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TABLE OFCONTENTS

2 Corporate Profile

3 PRG Values

4 Corporate Information

5 Group Financial Highlights

6 Chairman’s Statement

8 Group Managing Director’s Review

10 Corporate Structure

11 PRG in the News

12 PRG Events

16 Board of Directors

18 Directors’ Profile

27 Management Team

28 Corporate Responsibility

32 Statement on Corporate Governance

43 Statement on Risk Management and Internal Control

47 Report on Audit Committee

54 Report on Remuneration Committee

58 Report on Nomination Committee

61 Financial Statements

195 List of Group Properties

197 Analysis of Shareholdings

201 Analysis of Warrants Holdings

204 Notice of Fifteenth Annual General Meeting

Proxy Form

CORPORATE PROFILEThe Company was incorporated on 13 March 2001 and listed on 16 October 2003 on Second Board of Bursa Malaysia Securities Berhad. Pursuant to the merger of the Main Board and Second Board into a single board, the Company was listed on Main Market with effect from 3 August 2009.

The Group started operations in 1983 in Malaysia as a partnership producing furniture webbing. The Group has since diversified into niche products for the textile and apparel, furniture, automotive, food packaging and medical industries.

On 30 July 2014, the Group diversified its core business to include property development after completion of a few corporate exercises. In order to strengthen the Company’s brand image and to reflect a more aligned business direction of the Group, the Company’s name was changed to PRG Holdings Berhad on 26 January 2015.

With the diversification of the Group’s principal activities to include property development, PRG had established a construction division to complement its property development activities. The Group has also obtained approval of shareholders to diversify to include construction business on 12 January 2016.

PRG stands forPREMIER GROUPThe name Premier Group denotes the company’s commitment to strive to deliver the best in everything that we do, be it, our products, our concept, our service, our quality and value add to our stakeholders.

To achieve such ideals, we must walk the talk by ensuring that we will always continue to innovate and place the interest of our customer as priority in developing our products. We also need to understand and cater to the needs of the customers, and create developments that are relevant and appropriate with eco-friendliness and sustainability as part of our concept.

This will set a platform for us to ensure we consistently strive for excellence in all our business endeavours, not forgetting our commitments to the society and also placing priority to our staff and creating an environment that is conducive to excel.

PRG HOLDINGS BERHAD Annual Report 20152

VISION• To be a premier company of

choice for our stakeholders both locally and internationally.

MISSION• Customer oriented• Innovative products• Creating values for customer and

stakeholders

PRGVALUES

• Respect We advocate the assimilation of difference

in our cultures in acknowledging differences of opinions, cultures and contributions, treating everyone with respect and create an environment for mutual respect.

• Innovation We promote and recognize creative thinking

as key to creating the best value to our stakeholders.

• Customer We aspire to maximize values and

satisfaction to our customer by creating quality products, excellence service, value added and concept that give our customer a better quality of life.

CORE VALUES• Integrity We act with professionalism in all our

dealings and always deliver on our promise.

• Commitment We are fully committed to what we do,

constantly challenging ourselves to serve better and to excel in every opportunity.

• Competency We drive efficiency by always looking

for the ways to better ourselves and our team performances, effectiveness and productivity.

• Teamwork We value team spirit and place

communication and sharing information as the key to our goals.

PRG HOLDINGS BERHAD Annual Report 2015 3

CORPORATE INFORMATIONBOARD OFDIRECTORSDato’ Lim Heen PeokIndependent Non-Executive Chairman

Dato’ Lua Choon Hann Group Managing Director

Cheah Eng ChuanManaging Director - Manufacturing

Dato’ Wee Cheng KwanExecutive Director - Property & Construction

Lee Sim HakExecutive Director

Ong Lock HooExecutive Director

Datuk Dr Wong Lai SumIndependent Non-Executive Director

Dato’ Hamzah bin Mohd SallehIndependent Non-Executive Director

Lim Chee HoongIndependent Non-Executive Director

PRINCIPALBANKERSAlliance Islamic Bank Berhad (776882-V)7-G & 9-G, Jalan PJU 5/20Pusat Perdagangan Kota DamansaraPJU5 Kota Damansara47810 Petaling Jaya Selangor Darul Ehsan

Hong Leong Bank Berhad (97141-X)Level 1, Wisma Hong Leong18, Jalan Perak, 50450 Kuala Lumpur

Malayan Banking Berhad (3813-K)B01 & B02, Sunway Giza MallNo. 2, Jalan PJU 5/14 Kota Damansara47810 Petaling Jaya Selangor Darul Ehsan

Malayan Banking Berhad9th Floor, Unit 906 115 Nguyen HueDistrict 1, Ho Chi Minh City, Vietnam

Malayan Banking BerhadSuite 909, 9th Floor, Conerstone Building16 Phan Chu Trinh StreetHoan Kien District Hanoi, Vietnam

Public Bank Berhad (6463-H)F-07, F-08 & F-09, Jalan SS 6/5BDataran Glomac Pusat Bandar Kelana Jaya47301 Petaling Jaya Selangor Darul Ehsan

United Overseas Bank (Malaysia) Berhad (271809-K)Menara UOB, Jalan Raja Laut50350 Kuala Lumpur

VID Public BankNo. 88 Nguyen Du, Ben Nghe WardDistrict 1, Ho Chi Minh City, Vietnam

COMPANYSECRETARIESYeoh Chong Keat (MIA 2736)Lim Fei Chia (MAICSA 7036158)

PRINCIPALPLACE OFBUSINESS Property & Construction Division:Lot C601, Capital 3, Oasis SquareNo. 2, Jalan PJU 1A/7A Ara Damansara47301 Petaling JayaSelangor Darul EhsanTel: (603) 7859 0877Fax : (603) 7859 0977

Manufacturing Division:Lot 1883, Jalan KPB 9Kg. Bharu Balakong43300 Seri KembanganSelangor Darul EhsanTel: (603) 8961 2278 Fax : (603) 8961 2340

REGISTEREDOFFICESuite 11.1ALevel 11, Menara Weld 76, Jalan Raja Chulan 50200 Kuala LumpurTel: (603) 2031 1988Fax: (603) 2031 9788

SHARE REGISTRARBina Management (M) Sdn Bhd(50164-V)Lot 10, The Highway CentreJalan 51/20546050 Petaling JayaSelangor Darul EhsanTel: (603) 7784 3922Fax: (603) 7784 1988

MAILING ADDRESSG.P.O. Box 1127950740 Kuala Lumpur

E-mail: [email protected]: www.prg.com.my

STOCKEXCHANGE LISTINGMain Market of Bursa Malaysia Securities BerhadStock Code : 7168Stock Name : PRG

AUDITORSBDO (Firm No. AF 0206)Menara CenTARaLevel 8360 Jalan Tunku Abdul Rahman50100 Kuala Lumpur


mailto:[email protected]

http://www.prg.com.my/

Financial Year Ended 31 December 2011 2012 2013 2014 2015

Operating ResultsRevenue RM’000 80,697 84,487 78,817 92,286 129,323Profit before taxation RM’000 5,624 5,308 5,892 2,389 7,241Profit attributable to shareholders RM’000 4,712 4,087 4,746 2,374 6,075

Financial PositionTotal Assets RM’000 98,916 94,404 97,070 237,626 268,119Total Borrowings RM’000 14,904 9,994 9,259 65,792 79,555Shareholders’ Equity RM’000 72,734 73,679 77,179 108,298 116,837

Financial RatiosReturn On Equity % 6.48 5.55 6.15 2.19 5.20Return On Revenue % 5.84 4.84 6.02 2.57 4.70Return On Capital Employed % 10.43 11.23 10.78 3.69 6.77

SHARE INFORMATIONGross Dividends Per Share sen 2.50 3.00 1.50 1.00 1.00*

Basic Earnings Per Share sen 5.21 4.51 4.89 1.98 4.19Net Assets Per Share sen 80.34 81.38 85.25 74.76 80.66

* Subject to shareholders’ approval at the forthcoming annual general meeting.

2015GROSS DIVIDEND PER SHARE (SEN)

2011 2012 2013 20140.0

0.75

1.5

2.25

3.2

3.75

2015NET ASSETS PER SHARE (SEN)

2011 2012 2013 20140

20

40

60

80

100

PROFIT BEFORE TAXATION (RM MILLION) 2011 2012 2013 2014 20150

2

4

6

8

10

REVENUE (RM MILLION) 2011 2012 2013 2014 20150

20

40

60

80

100

120

140

GROUP FINANCIALHIGHLIGHTS


DEARSHAREHOLDERS,On behalf of the Board of Directors, I am pleased to present to you the Annual Report and Audited Financial Statements of PRG Holdings Berhad (“PRG”) for the financial year ended 31 December 2015.

CHAIRMAN’SSTATEMENT

BUSINESS ENVIRONMENT

The Trans-Pacific Partnership agreement was officially signed by twelve member countries in February 2016, creating a massive trade bloc that will account for about 40% of the world’s economy. The TPP will advocate the gradual elimination of import taxes on textiles and apparel products within member countries and this will greatly benefit the Group. We foresee our textile and furniture related investments in Vietnam and Malaysia will be the beneficiaries of the TPP agreement and thus presenting to us an opportunity to expand our current business and to acquire new customers in all TPP member countries. The Group will continue to leverage its competitive edge in cost, quality and delivery capability to build the Group’s brand within this bigger TPP market.


On the local front, the Malaysian economy is expected to continue with a positive growth of 4.0% - 4.5% in 2016. The property market is expected to be soft in 2016, impacted by the goods and service tax, property cooling measures and financial institutions stringent measures on lending.

Whilst these factors may dampen current market sentiments, the mid to long term prospects for property development remains good. Malaysians are now trending towards properties equipped with good facilities and in locations surrounded by amenities that will provide a modern urban lifestyle. Our maiden project, Picasso Residence, is in this segment of market and we foresee a good uptake on this property. At the same time under the present scenario we are adopting a step by step approach in this sector, seeking opportunities and managing risks on a prudent and practical basis without overly stressing our resources.

FINANCIAL PERFORMANCE

The Group recorded a higher revenue of RM129.3 million which was 40% higher than the previous financial year of RM92.3 million, largely due to higher sales of manufacturing and progressive revenue from our construction activities and also profit recognition derived from the Picasso Residence property development.

Profit before taxation for the current financial year of RM7.2 million was RM4.8 million higher than RM2.4 million reported for the financial year of 2014, in tandem with the increase in revenue.

CORPORATE DEVELOPMENTS

The Group has successfully diversified its business to include property development in 2014 and has now also incorporated the construction business with the approval from shareholders in 2016. This synergetic move into construction will reinforce the Group’s property development business and enables the Group to leverage its knowhow and resources to extract maximum value from these complementary activities.

PROSPECTS

Looking ahead, we are positive that the strategy we have put in place over the years will position the Group’s manufacturing division to face the changes that are taking place rapidly in the world economy. Our early decision to locate our manufacturing base in Vietnam has been far sighted and beneficial especially with the implementation of the TPP agreement.

On our diversification into property and construction business, the Board believes that its maiden project will be well received based on its design concept and prime location. As mentioned we are viewing potential new developments on a prudent basis focusing on opportunities that can deliver reasonable returns with minimum risks.

DIVIDENDS

The Group’s dividend policy is to provide shareholders with reasonable returns from the profits of the Group and over the years we have strived to maintain a consistent dividend payout.

In consideration of the Group’s results and our future investment requirements, the Board of Directors has recommended a final single tier dividend of 2% or 1.0 sen per share for the financial year ended 31 December 2015. This proposal is pending shareholders’ approval at the forthcoming Annual General Meeting of the Company.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to express my appreciation to my fellow Board members both present and past, for their unwavering support, advice and assistance to enable me to discharge my responsibilities as Chairman to oversee the well being of the Group.

My appreciation is extended to the management and all members of the Group for their dedication, hard work and contribution to the Group throughout these challenging times.

Last but not least, on behalf of the Board and Management, I would also like to express our heartfelt thanks to our valued customers, shareholders, business associates, and partners for their support and confidence in the Group. We look forward to your continued support in 2016 as we strive to build a stronger diversified Group for the future.

Dato’ Lim Heen PeokChairman


REVIEW OF OPERATIONS

Manufacturing

Volatility in currency especially the strengthening of USD and weakness of other currencies including Euro and RM were very disruptive for the year under review as it affects competition and demand dynamics in the markets that we export.

Manufacturing division remains the core contributor with a total revenue of RM 89.0 million for the group in the year of 2015, an increase of 5.1% despite intense competitions by companies from China & India to maintain market shares in view of the slower global growth. Profit before tax has also increased by 9.3% to RM 7.3 million from RM 6.7 million.

During the year, efforts were also made to optimise cost structure by process improvements and capacity utilisation to mitigate cost increases. This is to cater for volume based business which we have managed to secure additional global accounts.

Property Development

Picasso ResidenceOur maiden project, Picasso Residence is located at the heart of the Golden Triangle, Kuala Lumpur. We have put in great effort during the design stage, to provide a contemporary architectural façade that offers a spectacular view of the Petronas Twin Towers, KL Tower and beautiful skylines of Kuala Lumpur. These artistically and stunning twin towers of 38-storey comes with comprehensive facilities and amenities befitting an elegant lifestyle such as glass encased gymnasium overlooking pool, sunken lounge, sky park, sky pavilion and private lift lobby to each unit. Picasso Residence is expected to be completed by 2019.

In relation to the sales of Picasso Residence, our Group has entered into a promoter and underwriter agreement with Dato’ Ng Yan Cheng (“DNYC”) for the engagement of DNYC as the promoter and underwriter of 210 units of Picasso Residence.

Construction

The Treetop Residency project secured in 2014 with a contract value of RM 50.15 million proceeded smoothly and is ahead of schedule. This project in Pasir Putih, Ipoh comprises of 5 blocks of 9-storey apartment, 1-storey gymnasium with swimming pool and 1-storey common facilities.

In October, our construction division, Premier Construction Sdn Bhd (PCSB), was one of the seven company shortlisted by Master Builder Association Malaysia (MBAM) and Polytechnic Ungku Omar to provide training to final year post graduates. This augurs well and reflected the confidence that MBAM has on PCSB’s capability and reputation in the construction industry.

I am also very happy to announced that in January 2016, PCSB was one of the first construction company in Malaysia to obtained the ISO 9001-2015 certification. This certification will improve the integration and alignment of our internal processes that will result in shorter turnaround time. I believe this will increase credibility and competitiveness in the market and enhance our revenue and market share in the future.

LOOKING FORWARD

The Group has managed to remain resilient in the face of continue volatility in the global markets. Challenges in the near terms are mainly coming from cost pressure such as increase in wages and currencies volatility.

In the medium to long term, we remain positive that the implementation of the Trans-Pacific Partnership (“TPP”) agreement with member countries will spur more investment in the textile and furniture industries into the TPP member countries, especially Vietnam and Malaysia where our manufacturing facilities are currently located. We have seen an increase in sales over the past one year especially from the fabric segment as a result of higher sourcing activities from foreign buyers.

As Vietnam is fast becoming a global manufacturing base, we will continue to increase capacity further in the future to position ourselves for further growth opportunities.

Barring any unforeseen circumstances, the Group’s manufacturing performance is expected to remain satisfactory for 2016.

On the property development segment, the Picasso Residence has started its construction work in 2015 and is expected to be completed by 2019. The piling work was completed in March 2016 while the podium and car park are expected to be completed by December 2016. We expect to see a higher revenue recognition from the property development sector this year.

We are constanly evaluating new oppurtunities and bidding for new contracts that can deliver reasonable returns with minimum risk.

Dato’ Lua Choon HannGroup Managing Director


Group MANAGINGDIRECTOR ’SREVIEW

DEARSHAREHOLDERS,It has been an extremely busy year for the Group where many milestones were achieved. I am pleased to report that despite the competition and on the backdrop of volatility in the global markets and currencies, the Group managed to achieve a total revenue of RM129.3 million, which represent an increase of 40% from the previous year. The growth was from both the steady income from manufacturing division and also progressive contribution of RM40.3 million revenue from its Property Development & Construction division.


MALAYSIA FOREIGN

PROPERTY & CONSTRUCTIONDIVISION

MANUFACTURINGDIVISION

100%FURNIWEB MANUFACTURING SDN BHD (164933-H)

100%FURNIWEB SAFETY WEBBING SDN BHD(391112-U)

100%TEXSTRIP MANUFACTURING SDN BHD (171110-T)

100%WEBTEX TRADING SDN BHD (131288-K)

100%SYARIKAT SRI KEPONG SDN BHD(21161-X)

100%FIRST ELASTIC CORPORATION (M) SDN BHD (328928-W)

100%FURNIWEB (VIETNAM) SHAREHOLDING COMPANY

100%PREMIER ELASTIC WEBBING & ACCESSORIES (VIETNAM) CO LTD

82%FURNITECH COMPONENTS (VIETNAM) CO LTD

50%TRUNET (VIETNAM) CO LTD

100%PREMIER GESTURE SDN BHD (561566-V)

60%PREMIER DE MUARA SDN BHD (1068541-X)

100%PREMIER CONSTRUCTION SDN BHD (1061330-H)

100%PREMIER PMC SDN BHD (1091731-D)

CORPORATE STRUCTURE


PRGIN THE NEWS


PRGEVENTS

Private preview function of our Picasso Residence Project in Kuala Lumpur.

Privite preview function of our Picasso Residence project in Singapore.


Signing ceremony for our collboration with Politeknik Ungku Omar and Master Builders Association Malaysia.


PRGEVENTS cont’d

A member of the economic transformation program for the state of Terengganu in collaboration with PEMANDU.

14th Annual General Meeting of our Company.


Our Subsidiary Furnitech Components (Vietnam) Co Ltd participated in the Vietnam International Furniture & Home Accessories Fair (VIFA 2016).

Our Subsidiary Premier Elastic Webbing & Accessories (Vietnam) Co Ltd participated in the Vietnam Saigon Textile & Garment Industry Expo.


BOARD OF DIRECTORS





BOARD OF DIRECTORS

Dato’ Lim Heen PeokIndependent Non-

Executive Chairman

Dato’ Hamzah Bin Mohd Salleh

Independent Non-Executive Director



Dato’ Wee Cheng KwanExecutive Director -Property & Construction

DIRECTORS’PROFILE

Dato’ Lim Heen PeokIndependent Non-Executive Chairman

Aged 68, a Malaysian, was appointed as the Independent Non-Executive Chairman of the Company on 25 November 2004. Dato’ Lim is also the Chairman of the Nomination Committee and a member of the Audit Committee.

After graduating from the University of Strathclyde, United Kingdom, Dato’ Lim joined the UMW Group in 1975 as an Executive Engineer and worked in the engineering, service, marketing and sales operations of the Group for 12 years in various managerial positions. During that time he was responsible for improving the operations, negotiation with overseas principals for product franchises and development of new products and markets.

In 1986 Dato’ Lim was appointed as the Managing Director of UMW Toyota Motor Sdn Bhd, a joint venture company between UMW and Toyota Motor Corporation of Japan. His primary role was to restructure the company to survive in the era of the National Car. He was instrumental in leading the company and developing the organization towards understanding and achieving world class standards of operations particularly in the area of quality, cost and delivery. After successfully making Toyota the top selling brand in the Non National Car market for 15 years, Dato’ Lim retired in 2004.

Dato’ Lim was the Chairman of T & K Autoparts which started as a Toyota plant manufacturing steering gear systems for the ASEAN market and which later also exported to Taiwan, Turkey and other countries. He also sat on the board of Kayaba (Malaysia) Sdn Bhd, Assembly Services Sdn Bhd, Automotive Industries Sdn Bhd, as well as UMW Toyota Capital Sdn Bhd. Dato’ Lim also played an active role in the automotive industry serving as the Vice President of the Malaysian Automotive Association. Currently, Dato’ Lim is an independent director of Liberty Insurance Berhad. He was also an Independent Director on the boards of Alliance Bank Bhd and Proton Holdings Bhd.

Dato’ Lim held 0.04% of the equity interest in the Company as at 31 March 2016. Dato’ Lim does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. He attended all five (5) Board meetings held in the financial year ended 31 December 2015 and has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.


DIRECTORS’PROFILE

Aged 39, a Malaysian, was appointed to the Board on 1 November 2013 as an Executive Director. Dato’ Lua was re-designated to Group Managing Director effective from 11 April 2016.

Dato’ Lua obtained his Bachelor of Law degree from the University of Cardiff in the United Kingdom and started his professional career in legal practice as a Prosecutor with the Attorney General’s Chambers in Singapore. With his years of practice, he gained a substantial and broad expertise, knowledge and experience in advising on legal matters, amongst others, pertaining to corporate affairs, finance and commercial matters. With his professional legal experience, business acumen and commercial know-how, Dato’ Lua became an entrepreneur in 2003 through various business ventures in Malaysia, China, Singapore, Taiwan and Hong Kong, involving various sectors, including the provision of corporate consultancy and solution services, property development and other related businesses. He is currently an Indipendent Non-Executive Director of Pelikan International Corporation Berhad and various directors of other private companies.

Dato’ Lua is a major shareholder of the Company, holding 15.83% of the equity interest in the Company as at 31 March 2016. He does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. He attended all five (5) Board meetings held in the financial year ended 31 December 2015 and has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.



DIRECTORS’PROFILE

Aged 69, a Malaysian, was appointed to the Board on 21 July 2003 as the Managing Director and is also a founder member of Furniweb Manufacturing Sdn Bhd (“FMSB”), Webtex Trading Sdn Bhd (“Webtex”) and Texstrip Manufacturing Sdn Bhd (“Texstrip’), the wholly-owned subsidiaries of the Company. Mr. Cheah is also a member of both the Remuneration Committee and Risk Management Committee.

Mr. Cheah served in the Malaysian Army between 1965 and 1974 before joining Oriental Elastic Industries Co., a company that manufactures covered elastic yarn, furniture webbing and seat belts, as a Sales Executive. He left the company in 1980 as a Manager and continued his career with Heveafil Sdn. Bhd., a company that manufactures rubber threads, as Sales Manager. At Heveafil Sdn Bhd, Mr. Cheah was placed in charge of the Asia Pacific region. In 1986, he joined Rubberflex Sdn Bhd, a rubber threads manufacturing company, as Sales Manager. Mr. Cheah later became the Managing Director of FMSB in 1987 and the Managing Director of Texstrip in 1988. Overall, he has more than 30 years of experience in the rubber threads and furniture webbing industries and is currently responsible for the overall operations of manufacturing division of the Group.

Mr. Cheah is a substantial shareholder of the Company, holding 5.32% of the equity interest in the Company as at 31 March 2016. He does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. He attended all five (5) Board meetings held in the financial year ended 31 December 2015 and has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.



DIRECTORS’PROFILE

Aged 39, a Malaysian, was appointed to the Board on 5 August 2013 as an Executive Director. Dato’ Wee is also a member of the Risk Management Committee.

After graduating with a Bachelor of Civil Engineering degree with First Class Honors from the University of Portsmouth in the United Kingdom in 1999, Dato’ Wee started his career with a construction consultant company in Singapore where he worked as a Civil Engineer. He then worked as a Structural Engineer with a construction company in Singapore for 4 years where he built his expertise in project management and structural engineering. Dato’ Wee returned to Malaysia in 2004 to work as a Project Manager for a local construction company before joining the WG Group in 2007. He is responsible for the running of the business with a particular emphasis on sales and business development. Dato’ Wee also has wide experience in fund raising and strategic planning in various industries including IPO, dual listing, mergers and acquisitions. He has more than 10 years of experience in the construction and financial industries.

Dato’ Wee is a major shareholder of the Company, holding 10.25% of the equity interest in the Company as at 31 March 2016. He does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. He attended all five (5) Board meetings held in the financial year ended 31 December 2015 and has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.

Dato’ Wee Cheng KwanExecutive Director - Property & Construction


DIRECTORS’PROFILE

Aged 62, a Malaysian, was appointed to the Board on 21 July 2003 as an Executive Director and is also a founder member of FMSB and Webtex. Mr. Lee is also a member of the Risk Management Committee.

Mr. Lee started his career with a textile company in Singapore where he worked for 3 years as Technical Supervisor. He subsequently went to further his studies at the University of Feng Chia, Taiwan and obtained a Diploma in Textile Engineering in 1976. He was with Oriental Elastic Industries Co. as the Production Manager for 5 years prior to joining FMSB in 1983. Mr. Lee carries with him more than 30 years of experience in the textile and furniture webbing industries. He is currently responsible for the production function of the Group.

Mr Lee held 2.09% of the equity interest in the Company as at 31 March 2016. Mr. Lee does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. He attended all five (5) Board meetings held in the financial year ended 31 December 2015 and has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.



Aged 64, a Malaysian, was appointed to the Board on 21 July 2003 as an Executive Director. He is also a founder member of FMSB and Webtex. Mr. Ong is also a member of the Risk Management Committee.

Mr. Ong worked with a sewing thread manufacturing company as Sales Executive from 1976 to 1977. He subsequently joined Oriental Elastic Industries Co. as Sales Executive before joining FMSB. Mr. Ong has close to 30 years of experience in the textile and rubber industries. Presently, he is in charge of the Group’s sales and marketing functions.

Mr. Ong held 1.80% of the equity interest in the Company as at 31 March 2016. Mr. Ong does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. He attended four (4) Board meetings held in the financial year ended 31 December 2015 and has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.


DIRECTORS’PROFILE


DIRECTORS’PROFILEDIRECTORS’PROFILE

Aged 61, a Malaysian, was appointed to the Board on 11 April 2016 as an Independent Non-Executive Director.

Datuk Dr. Wong has a BSc in Biochemistry, Masters in Public Administration and a PhD in Business from University Malaya. Since 2014, she has been appointed as an advisor to the Faculty of Economics and Business, University Malaya.

She was appointed as the Chief Executive Officer of the Malaysia External Trade Development Corporation (MATRADE), under the Ministry of Trade and Industry, in August 2012. In mid-June 2015, she retired as the CEO and there upon was appointed as MATRADE’s Advisor to the National Export Council, chaired by the Prime Minister. Over the 23 years at MATRADE, Datuk Dr. Wong has led various Divisions, including Corporate Management and Strategic Planning, and was Deputy CEO for Export Promotion prior to her appointment as CEO. Datuk Dr. Wong was actively involved in various committees for policy design and development to advance trade and economic growth for Malaysia, as well as, ASEAN and OIC countries and speaks regularly at many international seminars and conferences.

In February 2016, Datuk Dr Wong has been made a conjoint Professor to the School of Business of the University of Newcastle, Australia. She is also on the Singapore Business Advisory Group of University of Newcastle.

Datuk Dr. Wong does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. She has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.



Aged 68, a Malaysian, was appointed to the Board on 21 July 2003 as a Non-Independent Non-Executive Director and was re-designated as an Independent Non-Executive Director on 28 April 2005. Dato’ Hamzah is also a member of the Nomination Committee, the Audit Committee, the Remuneration Committee and the Risk Management Committee.

Dato’ Hamzah graduated with a Diploma in Management from the Malaysian Institute of Management and a Master’s degree in Business Administration from the University of Bath, United Kingdom. He was an Audit Assistant with PricewaterhouseCoopers (formerly known as Price Waterhouse & Co) from 1969 to 1974 and then worked as the Finance and Administration Manager in Pillar Naco Malaysia Sdn Bhd., a company dealing with architectural metal fabrication, for 6 years. From 1981 to 1994, he held various senior managerial positions in the Pernas Sime Darby Group and the Sime Darby Group of companies. He was an Executive Director of Malaysia Aica Berhad for 2 years and he is presently the Chief Executive Officer of Spanco Sdn Bhd, a fleet management specialist.

Dato’ Hamzah was the Non-Independent Director of PDZ Holdings Berhad and he also serves on the board of various other private companies

Dato’ Hamzah does not hold any equity interest in the Company as at 31 March 2016. Dato’ Hamzah does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. He attended four (4) Board meetings held in the financial year ended 31 December 2015 and has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.

Dato’ Hamzah Bin Mohd SallehIndependent Non-Executive Director

DIRECTORS’PROFILE

DIRECTORS’PROFILE


DIRECTORS’PROFILE

Aged 55, a Malaysian, was appointed to the Board on 21 July 2003 as an Independent Non-Executive Director. Mr. Lim is also the Chairman of the Audit Committee, the Remuneration Committee and the Risk Management Committee and a member of the Nomination Committee.

Mr Lim is a member of the Malaysian Institute of Certified Public Accountants, the Malaysian Institute of Accountants, as well as the Chartered Tax Institute of Malaysia. Presently, Mr. Lim is a practicing accountant in Malaysia under Messrs CHI-LLTC. He is also a partner in Lee Teik Swee & Co. Prior to that, Mr. Lim was attached to various firms and has more than 20 years of experience in the field of accounting. He currently is an independent non-executive director of Choo Bee Metal Industries Berhad.

Mr Lim held 0.05% of the equity interest in the Company as at 31 March 2016. Mr. Lim does not have any family relationship with any director and/or other major shareholder of the Company, nor any personal interest in any business arrangement involving the Company. He attended all five (5) Board meetings held in the financial year ended 31 December 2015 and has had no convictions for any offences within the past ten (10) years, other than traffic offences, if any.



MANAGEMENTTEAM

DATO’ STEVEN HOOI KOK HOECEO (Property & Construction)

Steven, aged 51, was appointed as the Chief Executive Officer, Property & Construction Division on 5 August 2014. He holds a Degree in Bachelor of Engineering (Civil & Structure) from University of Kebangsaan Malaysia, Degree in Business Administration and Master of Business Administration (Marketing) from New Zealand. He has more than 26 years experience in the Construction & Property Development sector. A team member in the construction of NKVE (Plus highway) while serving with Pati Sdn Bhd (Renong Group). While serving in Chase Perdana Berhad, he was involved in the property development of Kurnia Perdana in Kota Kinabalu and also on the BOT project for Universiti Malaysia Sabah.

He is a leading team members in Plaza Mariana (38 stories high-rise). He served as the CEO for 6 years in a State GLC owned company Suria Capital Holdings Berhad, fully owned subsidiary (SCHB Engineering Services Sdn Bhd). He was involved in setting up of the company from conceptual into a PKK class A and CIDB G7. He has successfully completed the Sapangar Bay Container Port, oil jetties in east coast of Sabah and JKNS rehabilitation of railway track from Tanjung Aru to Kimanis. Prior to joining us, he was the Chief Executive Officer for Encorp Construct Sdn Bhd for 4 years and has build the company from ground zero to a high-rise building construction company, with estimated total contract value of RM960 million.

TAN CHUAN DYICheif Operating Officer

Tan joined the Group as Chief Operating Officer in 2014.Tan has 19 years of experience in the financial services industry, particularly in the areas of fund management, institutional broking,

investment banking and capital markets.

Prior to joining PRG, he was with Kenanga Investment Bank where during his tenure, he has held several positions namely Director, Head

of Equity Syndication, Institutional Business and Projects.

Prior to Kenanga Investment Bank, he was Head, Equity Capital Markets of RHB Investment Bank Bhd. He started his career in the industry with Arab-Malaysian Asset Management before moving to AffinSecurities and CIMB as Senior Vice President, Institutional Sales.Tan holds a BSc in Business Administration – Finance from California

State University of Fresno


CORPORATERESPONSIBILITY

At PRG Holdings Berhad, we place a strong emphasis on corporate responsibility. In additional to maximizing returns to shareholders, the Group carries out initiatives which positively impact our employees, customers, suppliers, the environment, as well as the community in which we operate.

The Group places great importance on being a responsible corporate citizen and on the continuous demonstration of responsible corporate conduct across all aspects of our operations. We are mindful that corporate responsibility includes continuous communication and reporting of the non-financial impacts and achievements of the Group to its various stakeholders without ambiguity.

The corporate responsibility programs undertaken by the Group within the framework pillars of workplace, environment and community are further described below:

WORKPLACE

Human Resource

Every successful organization understands that its people are its most valuable assets. Ensuring our people feel appreciated is the most useful way of making certain they contribute effectively to our Group’s operations.

Regular meetings are held to discuss human resource issues and policies. The management strives to ensure every detail is catered for when it comes to means and measures that can assist in improving the competency and effectiveness of the Group’s human resource.


CORPORATERESPONSIBILITY cont’d

1. Human Capital Development

Employing and retaining the right people has become increasingly challenging. In order for the Group to compete for the best people, we have initiated several training and development programs with the intention of cultivating leadership and charting career paths.

We believe in providing employee training that enhances performance and are dedicated to equipping our people with the knowledge and proficiency that is necessary for them to perform at their level best.

New members to the Group are provided with an orientation briefing that covers the Group’s background, organization structure, culture and code of conduct. Subsequent to this, specially tailored training programs and on the job training are given by the respective departments, supplemented by other internally conducted programs as well as external professional courses over time.

The Group practices a merit based reward system in which employees who consistently perform at a high standard are rewarded accordingly. Regular formal performance evaluations are conducted to identify the strengths and weaknesses of each employee, upon which improvements and training plans are recommended.

2. Employee Quality of Life

Social and sports activities are organized by the Group for its people in order to promote staff interaction. The Group’s annual dinner is attended by employees together with their family members to allow the family members to better understand our Group’s working culture. In order to foster unity among the workforce and to promote healthy living among our people, weekly sports activities are organized and participation among employees have been keen.

3. Acknowledging Our People

The Group recognizes that the experience of our long serving employees is a precious asset that should not be overlooked. To acknowledge their contribution and faithfulness to the Group, long service awards are given annually to employees who attain their career milestones of every five years of service.

In order to establish a platform for employees to provide feedback to the management, suggestion boxes are made available at strategic locations and an employee satisfaction survey is conducted annually.

Safety and Health

Our Occupational Safety & Health policy pledges a strong commitment for the provision of a safe and healthy working environment for employees. The Group will never compromise on the safety and health of our workforce and all those who come into contact with us.



1. Occupational Safety & Health Committee

The Occupational Safety & Health Committee was set up as part of the Group’s plan to ensure the health and safety of our employees. The committee is chaired by an Executive Director and its members include employees from various sections of the organization, with the management, staff and workers all being represented.

The committee ensures that all initiatives on safety and health implemented by the Group are appropriately adhered to. Fire drills, gas leakage control and spillage control are conducted on a regular basis and briefings in relation to evacuation procedures are given to employees.

2. Emergency Response Team

The team was set up under the purview of the Occupational Safety & Health Committee to ensure that a quick response will be available to our people in the event of an emergency. Members of the team are given training on the use of fire fighting equipment, first aid, CPR and other measures to be taken during an emergency.


ENVIRONMENT

The Group takes measures to protect the environment in which we operate through the implementation of an environmental management system at our factories. The environmental management system uses the international environmental standard ISO 14001 as a benchmark in assessing, improving and maintaining the environmental integrity of its systems and is set up to ensure we adhere strictly to environmental laws and regulations governing plant operations and areas relating to environmental standards, noise level management, emission standards and treatment of plant effluents and waste water.

As part of our corporate responsibility agenda, we strive to minimize any adverse impact our operations may have on the environment and to achieve continuous improvement with regards to our factories’ environmental performance. We are pleased to report that certain of our factories fully comply and have been certified with the ISO 14001 Certification for Environmental Management Systems.

COMMITMENT TO COMMUNITY

We are involved in the communities in which we operate and feel it is essential that we meet our social responsibilities in a positive manner.

The Group has certain charity programmes devised to provide support for organizations and institutions that are involved in welfare, health and educational activities aimed at improving quality of life.

In the past year, contributions were made to the following organisations:

1. Desa Amal Jireh

Desa Amal Jireh (Jireh Charity Village) is a private welfare organization situated in Semenyih, Selangor. It consists of Rumah Faith that provides care and education for poor and under privileged children, Faith Eagle’s Nest for destitute senior citizens and Eagle’s Nest Computer & Community Centre where senior citizens from nearby areas learn computer skills and participate in a host of other activities.

2. Center for Raising Orphans and Disabled Children

Located in Bien Hoa City, Dong Nai Province, Vietnam, the center provides shelter for orphans and disabled children. At the center, the children are given education and have their everyday needs taken care of.



STATEMENT ONCORPORATE GOVERNANCE

The Board of Directors of PRG Holdings Berhad fully subscribes to and supports the spirit of the Malaysian Code on Corporate Governance 2012 (“the Code”) and is committed to ensure that the principles and best practices of the Code are observed and practiced throughout the Group in the pursuit of discharging its roles and responsibilities to protect and enhance shareholders’ value and financial performance of the Group.

The Board is pleased to outline the manner and extend in which the Group has applied the principles set out in the Code during the financial year under review.

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES Roles and responsibilities

The Board of Directors has within it individuals drawn from varied professions and specializations. Together with the management, they collectively bring a diverse range of experience, skills and knowledge necessary to effectively discharge their responsibilities towards achieving the Group’s business strategies and corporate goals.

The Board is responsible for formulating and reviewing the Group’s strategic direction and management of the Group. In discharging its roles and responsibilities, the Board is guided by the documented and approved Board of Charter (available on the Company’s website) and delegated day-to-day running of the Group to the Group Managing Director and management team.

Amongst the key responsibilities of the Board are:

• Evaluating, approving and monitoring the strategic and financial plans for the Group; • Evaluating, approving and monitoring the annual budgets and business plans and evaluating

the Group’s performance in relation to them; • Evaluating, approving and monitoring major capital expenditure, capital management and

all major corporate transactions; • Reviewing and approving financial reports to be published and related stock exchange

announcements; • Monitoring other material reporting and external communications by the Company; • Monitoring the Group’s performance in relation to principles of corporate governance; • Identifying principal risks of the Group and ensuring the implementation of appropriate

systems to mitigate and manage these risks; • Approving and monitoring the Group’s internal controls and reporting systems, evaluating

and reporting on their effectiveness and identifying and rectifying significant deficiencies; • Approving and monitoring compliance with the Company’s Code of Conduct and other

material policies; and • Monitoring and reviewing the Group’s operations in relation to and compliance with legal

and regulatory requirements.


STATEMENT ONCORPORATE GOVERNANCE cont’d

Code of Conduct

The Board has a formalised code of conduct which provides an ethical framework to guide actions and behaviours of all Directors and its employees. The code of conduct for employees promotes integrity and ethical conduct in all aspects of the Company’s operations, professional conduct, use of company property and information.

The Code of Conduct is available on the Company’s website at www.prg.com.my.

As part of its commitment to uphold the highest standards of ethics, integrity and accountability, the Group has formalised a Whistle Blowing Policy. This policy provides a safe and acceptable platform for employees to channel their concerns about illegal, unethical or improper business conduct affecting the Group.

Corporate Responsibility and Sustainability

The Board took cognizance that sustainability must be integrated into the overall business strategies of the Group, covering the economic, environmental, social and governance aspects to generate long term business continuity.

Details of the Group’s corporate responsibility activities are set out on page 28 to 31 of this Annual Report.

Supply of Information

The management has a responsibility and duty to provide the whole Board with all the information of which it is aware, to facilitate the discharge of the Board’s responsibilities. The Board therefore expects to receive all material information about the Group, its operating units, its activities and performance on a timely basis.

Unless there are urgent matters, the Board normally meets quarterly to review financial, operational and business performance. The meetings are scheduled in advance in the last quarter of preceding year for the Board members to plan their schedules. Prior to each Board meeting, all Board members are provided with the requisite notice, agenda and the relevant Board papers to enable them to have sufficient time to peruse the papers and, if necessary, obtain further information or clarification from the management to ensure effectiveness of the proceeding of the meetings. Senior management members are invited to attend these meetings to explain and clarify matters.

All directors have access to the advice and services of the Company Secretary and independent professional advisers, whenever necessary, at the Group’s expense to enable the Board and members of its various committees to discharge their duties with adequate knowledge on the matters being deliberated. All Independent Non-Executive Directors have access to the Group Managing Director and/or senior management should there be any explanations or clarifications needed on any aspects of the Group’s operations or management issues.




Company Secretary

The Board has full and unrestricted access to the advice and services of the Company Secretaries to enable them to discharge their duties effectively. The Company Secretary organises and attends all Board and Board Committee meetings and ensures the proper conduct of the meetings. The Company Secretary regularly updates the Board on new rules and regulations issued by regulatory authorities.

Board Charter

A Board Charter has been formalised and adopted to guide the Board in the effective discharge of its roles and responsibilities as well as to define the functions delegated to management and Board Committee. The Board Charter also sets out processes and procedures for convening Board meetings. The Board will regularly review the Board Charter to ensure it remains consistent with the Board’s objectives and responsibilities and any new regulations that may have an impact on the Board’s responsibilities.

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

2. STRENGTHEN COMPOSITION

Board Committees

The Board has delegated specific responsibilities to five (5) committees, which are set out below, in order to assist the Board in the execution of its duties effectively:

• Audit Committee • Remuneration Committee • Nomination Committee • Risk Management Committee • Long Term Incentive Plan Committee

All committees have written terms of reference and operating procedures that are reviewed intermittently. The Chairmen of the various committees report to the Board the outcome of the committee meetings which are recorded in the minutes of the Board meeting. These committees, which do not have executive powers, will deliberate and examine particular issues and report to the Board with their recommendations. The ultimate responsibility for the direction and control of the Company and the Group rests with the Board.




Board Balance

The Board of Directors comprises five (5) Executive Directors and three (3) Independent Non-Executive Directors during the financial year under review. The composition of the Board complies with the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements. There is balance in the Board as the directors, with their different backgrounds and specialization, collectively bring a wide range of experience and expertise to the Group. The presence of Independent Directors also assures an element of balance to the Board as they provide unbiased views and advice to all Board deliberations.

The profiles of the directors are presented on page 18 to 26 of this Annual Report.

There is clear segregation of responsibilities between the Chairman of the Board and the Group Managing Director to ensure that there is a balance of power and authority in the Group. The Independent Non-Executive Chairman is primarily responsible for the effectiveness and proper conduct of the Board while the Group Managing Director is responsible for implementing the policies and decisions of the Board as well as overseeing the operations and business development of the Group.

Appointments to the Board

The Group has in place formal procedures for the appointment of new directors. The Nomination Committee scrutinises the sourcing of suitability of the candidate(s) for appointment to the Board by taking into consideration the individual’s skills, expertise and experience, knowledge, professionalism and integrity before recommending to the Board. The Board encourages diversity in the Board’s composition and subscribes that suitably female candidates will be considered for appointment to the Board to facilitate decision making process by providing different insights and perspectives, amongst others attributes.

The terms of reference and activities of Nomination Committee are presented on page 58 to 59 of this Annual Report.

Remuneration Policies and Procedures

The terms of reference and activities of Remuneration Committee and Directors’ remuneration summary are presented on page 54 to 55 of this Annual Report.

Long Term Incentive Plan Committee

The LTIP Committee was set up during the year. There was no options granted and/or shares awarded to the employees during the financial year.



3. REINFORCE INDEPENDENCE

The Code stipulates that the cumulative tenure of an Independent Director should not exceed nine (9) years; an Independent Director who has served for nine years may continue to serve on the Board but in the capacity of a Non-Independent Director.

The Independent Non-Executive Directors, Dato’ Lim Heen Peok, Dato’ Hamzah bin Mohd Salleh and Lim Chee Hoong have served the Board for a cumulative period of more than nine (9) years. The Board is of the view that the independence of a director cannot be decided subjectively with reference to a fixed period of time. The Group benefits from having long serving directors who have accumulated valuable knowledge of the Group’s operations and have shown competence in advising and overseeing the management of the Group.

The Board has assessed Dato’ Lim Heen Peok, Dato’ Hamzah bin Mohd Salleh and Lim Chee Hoong to be independent in character and judgment as they have provided unbiased, objective and independent view to Board deliberation, free from any relationships or circumstances which are likely to affect or could appear to affect their judgment and are also independent of management. The Board is of the view that they will continue to provide invaluable contributions to the Board as Independent Directors hence shareholders’ approval will be sought at the coming annual general meeting to retain these three (3) Directors as Independent Directors of the Board.

Dato’ Lim Heen Peok as the Chairman of the Nomination Committee, Dato’ Hamzah bin Mohd Salleh and Lim Chee Hoong being a member of the Nomination Committee, have abstained from any deliberations or voting pertaining to their own independence at the Nomination Committee meeting. Dato’ Lim Heen Peok, Dato’ Hamzah bin Mohd Salleh and Lim Chee Hoong have also abstained from any deliberations or voting pertaining to their own independence at the Board meeting.

4. FOSTER COMMITMENT

Directors’ Commitment and Board Meetings

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities.

Board meetings are scheduled every quarter and additional meetings are convened as and when necessary. During the financial year ended 31 December 2015, five (5) meetings of the Board were held. Additional meetings are convened when necessary to deal with urgent and important matters that require attention of the Board. All Board meetings are furnished with proper agendas with due notice issued and board papers and reports prepared by the management which provides updates on financial, operational, legal and circulated prior to the meetings to all directors with sufficient time to review for effective discussions and deliberations during the meetings.



The Directors also reviewed, discussed and approved urgent matters by way of circular resolutions. The circular resolution when approved and signed by the full Board and/or majority of Directors, will be entered into the Board minutes book.

. Details of the board’s attendance record during the financial year are as follows:

Directors Total Meetings Attended Attendance (%)

Dato’ Lim Heen Peok 5 out of 5 100

Dato’ Lua Choon Hann 5 out of 5 100

Cheah Eng Chuan 5 out of 5 100

Dato’ Wee Cheng Kwan 5 out of 5 100

Lee Sim Hak 5 out of 5 100

Ong Lock Hoo 4 out of 5 80

Dato’ Hamzah bin Mohd Salleh 4 out of 5 80

Lim Chee Hoong 5 out of 5 100Dato’ Seri Yeoh Soo Ann

(resigned on 30 November 2015) 4 out of 5 80

The Company Secretary was present at all Board Meetings held during the financial year ended 31 December 2015.

The Board is satisfied with the level of time commitment given by the directors towards fulfilling the roles and responsibilities.

The directors are required to seek prior consent from the Chairman of the Board before they accept any new directorship outside the Group and an indication of time that will be spent on the new appointment.

In compliance with Paragraph 15.06 of the Main Market Listing Requirement of Bursa Securities, the directors hold not more than five (5) directorships in listed issuers for the purpose of ensuring that they denote sufficient time to their duties. The Company Secretary will monitor the number of directorships and the changes, if any, of each director.


Directors’ Training

In compliance with the Continuing Education Programme implemented by Bursa Securities, the directors are encouraged to attend appropriate training programmes to continuously update themselves with changes on guidelines issued by the relevant authorities as well as to keep abreast with developments in the marketplace, industry and corporate scene.

The training programmes and courses attended by the Directors during the financial year under review include the following:

Training/ Seminars Date

1 Comparative Analysis of PERS, MPERS and MFRS Framework 7 April 2015

2

Updates of the 2014 & 2015 IFRS-Compliant MFRS - Preparing MFRS-

Compliant Financial Statements in 2014, 2015 and thereafter

20-21 April 2015

3Audit Series - Workshop 1 - Audit

Opinion & Reporting - Proposed ISA 700 (Revised)

7-8 May 2015

4 Seminar Percukaian Kebangsaan 2015 5 November 2015

5 Corporate Governance Breakfast Series 21 September 2015

6 Future of Auditor Reporting – The Game Changer for Boardroom

2 November 2015

7 Developing an Outward Mindset 18 November 2015

8 Risk Management and Internal Audit Training

27 November 2015



5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

Financial Reporting

The Board aims to present a balanced and understandable assessment of the Group’s financial position and prospects in all of its reports to shareholders, investors and regulatory authorities. This is primarily achieved through the announcement of quarterly financial results and the Chairman’s Statement in the Annual Report. The quarterly financial results are reviewed by the Audit Committee and approved by the Board before being released to Bursa Securities.

The directors are responsible in the preparation of annual audited financial statements so as to give a true and fair view of the state of affairs, results and cash flows of the Company and of the Group. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

The directors are also responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Group, and for ensuring that the appropriate accounting policies have been consistently applied and that the financial statements comply with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.

Assessment of Suitability and Independence of External Auditors

The Audit Committee annually assesses the suitability and independence of the external auditors against the established evaluation criteria in accordance with the Listing Requirements. The Audit Committee meets with the external auditors at least twice a year to discuss their audit plan, audit findings and the Group’s financial statements. At least twice a year and whenever necessary, the Audit Committee shall meet with the external auditors without the presence of executive Board members or management personnel, to allow the Audit Committee and the external auditors to communicate independently.

The external auditors also rotates their engaging partner in charge of audit of the Group once every 5 years in compliance with the requirements of the relevant professional body. The Audit Committee was satisfied with the confirmation by external auditors in their audit report to Audit Committee that they are independent in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysia Institute of Accountants in relation to the audit of the financial statements of the Group for the year ended 31 December 2015.

In addition, the external auditors are invited to attend the Company’s Annual General Meeting/Extraordinary General Meeting(s) and are available to answer any questions from shareholders on the conduct of the statutory audit and the contents of the annual audited financial statements as well as any corporate exercise undertaken by the Group where external auditors are involved.



The Audit Committee considered the provision of non-audit services provided by external auditors during the financial year and concluded that the provision of these services did not compromise the external auditors’ independence and objectivity as the amount of fees paid for these services were not significant as compared to the total fees paid to the external auditors.

Based on the assessment conducted by the Audit Committee on the suitability and independence of the external auditors, the Board, on the recommendation of the Audit Committee, had recommended to the shareholders for approval at the 2015 AGM the reappointment of BDO as the external auditors of the Company for the financial year 2016.

6. REORGANISE AND MANAGE RISKS

Internal Controls and Risk Management

The Risk Management Committee assists the Board in overseeing the risk management matters relating to the activities of the Group. The Risk Management Committee reviews the risk management framework and process and monitors the effectiveness of risk treat/mitigation action plans for the management and control of key risks. The Board places significant emphasis on maintaining a sound system of internal control covering not only financial controls but also operational and compliance controls as well as risk management in order to safeguard shareholders’ investments and the Group’s assets. The Board continually reviews the adequacy and effectiveness of the internal control system to ensure it meets the Group’s particular needs and to manage the risks to which it is exposed.

The Company had an internal audit function for the Manufacturing Division was maintained in-house whilst the internal audit function for the Property Development and Construction Division was outsourced to an independent consulting firm, Sterling Business Alignment Consulting Sdn Bhd, to provide assurance and strengthen the effectiveness as well as the adequacy and integrity of the system of internal control of the Group. Both the in-house and outsourced Internal Auditors undertook independent assessment on internal control system and assured the Audit Committee that no material issue or major deficiency had been noted which would pose a high risk to the overall system of internal control under review.

The Statement on Risk Management and Internal Control set out on page 43 to 46 of this Annual Report provides an overview of the state of risk management and internal controls within the Group.

7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

Corporate Disclosure Policies and Procedures

The Company has put in place an internal policy to ensure that confidential information is handled properly by Directors, employees and relevant parties to avoid leakages and improper use of such information.



Leverage on Information Technology for Effective Dissemination of Information

The Company’s website at www.prg.com.my incorporates an Investor Relations section which provides all relevant information of the Company which is accessible to the public. This section enhances the Investor Relations function by including all announcements made by the Company and its annual reports.

8. STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

Relationship with Shareholders and Investors

The Board recognises the importance of timely dissemination of information to shareholders and investors to ensure that they are well informed of all major developments of the Company and the Group. Such information is communicated to shareholders and investors through various disclosures and announcements to Bursa Securities, including the quarterly financial results, annual reports and where appropriate, circulars and press releases.

The Annual General Meeting represents the principal forum for dialogue and interaction with shareholders. At the Annual General Meeting, the Board encourages and welcomes participation from shareholders to ask questions regarding the resolutions being proposed at the meeting and also other matters pertaining to the business activities of the Group. The Directors are present during the meeting to respond to questions raised by shareholders.

The Board has identified Dato’ Hamzah bin Mohd Salleh as Senior Independent Director to whom all concerns of shareholders can be effectively conveyed. Any concern from shareholders and stakeholders can be directed to Dato’ Hamzah at [email protected].

Apart from the mandatory announcements through Bursa Securities, the Company also provides the Group’s corporate and non-financial information at its website: www.prg.com.my

Poll Voting

The Code recommends that the Board should encourage poll voting for substantive resolutions. The Board is of the view that with the current level of shareholders’ attendance at Annual General Meetings, voting by way of show of hands continues to be efficient but nonetheless, will put resolutions to be voted by poll in accordance with the Listing Requirements. Shareholders will be informed of their voting rights at the general meetings of the Company. The Board will consider the feasibility of carrying out electronic voting at the Company’s general meetings in future.




mailto:[email protected]


ADDITIONAL COMPLIANCE INFORMATION

1. Share Buy-back

The Company did not repurchase any of its issued ordinary shares from the open market during the financial year.

As at 31 December 2015, a total of 208,900 of the Company’s ordinary shares have been repurchased and were being held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965. Treasury shares are carried at cost and have no rights to voting, dividends and participation in other distributions.

2. Options, Warrants or Convertible Securities

The Company did not grant any options, warrant or convertible securities to any party to take up unissued shares in the Company during the financial year ended 31 December 2015. No warrants were exercised into ordinary shares during the financial year ended 31 December 2015.

3. Employees’ Share Option Scheme and Share Grant Plan During the financial year, no options or shares were granted. 4. Sanctions/Penalties Imposed

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

5. Non-audit Fees

The amount of non-audit fees paid and payable to the external auditors by the Group for the financial year ended 31 December 2015 was RM11,100.

6. Variation in Results

There was no material variation between the audited results for the financial year ended 31 December 2015 and the unaudited results previously released.

7. Material Contracts

During the financial year, the Group did not enter into any material contracts involving directors’ and major shareholders’ interest other than as disclosed in Note 30 of the financial statements.

8. Recurrent Related Party Transactions

Details of the recurrent related party transactions conducted pursuant to the shareholders’ mandate obtained at the last AGM were disclosed in Section 2.3 of Part B of the Circular to Shareholders dated 29 April 2016 dispatched together with this Annual Report.



STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLINTRODUCTION

The Malaysian Code on Corporate Governance 2012 requires public listed companies to establish a sound risk management framework and internal control system to safeguard shareholders’ investments and the Group’s assets. Additionally, Listing Requirements require directors of public listed companies to include a statement in their annual reports on the state of their internal controls. The following statement has been prepared in accordance with the Statement on Risk Management and Internal Control – Guidelines for Directors of Listed Issuers, issued by the Task Force on Internal Control with the support and endorsement of Bursa Securities.

RESPONSIBILITY

The Board recognises the importance of a sound risk management framework and internal control system to good corporate governance and acknowledges its overall responsibility to ensure that the principal risks of the Group are identified, evaluated and managed with an appropriate system of internal control, and to ensure that the effectiveness, adequacy and integrity of the system are reviewed from time to time to suit the changes in the business environment.

The Board has established an appropriate risk management framework and internal control system and is of the view that the system is designed to manage the Group’s risks within an acceptable level rather than eliminate the risk of failure to achieve the policies, goals and objectives of the Group. It can therefore only provide reasonable but not absolute assurance against material misstatement of management and financial information or against financial losses and fraud.

KEY ELEMENTS OF RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

Risk Management Framework

The management of risks is an integral part of the Group’s management process. There is an ongoing process for identifying, evaluating and managing risks faced by the Group which was in place throughout the financial year under review and up to the date of approval of this statement by the Board for inclusion in the Annual Report.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL cont’dThe Group’s risk management framework has the following key attributes:

• Risk Governance and Strategy

The Risk Management Team (“RMT”) whose role is to identify, evaluate, and manage risks is headed by the Managing Director and also comprises of the Executive Directors, Chief Executive Officer, Chief Operating Officer and Head of Department.

The RMT conducts a quarterly review of business risks to identify new risks as well as to determine whether previously known risks remain relevant. Once business risks are identified, the RMT evaluates the risks and coordinates the development of risk mitigating action plans.

To address the identified risks, periodic meetings at various levels of management are conducted to discuss and report on operational performance, key operating statistics, as well as business strategies.

• Risk Reporting

The Group’s risk management framework provides for quarterly review and reporting. Significant risks identified by the RMT are reported to the Risk Management Committee and the Board during quarterly meetings.

The internal auditors provide an independent assessment of the adequacy and reliability of the operational risk management processes and report to the Audit Committee.

The Group will continue to focus on the key risks and the relevant controls to ensure that they are able to respond effectively to the changing business environment.

Internal Audit Function

The Group has an in-house internal audit department for manufacturing division that carries out regular reviews of the Group’s operations and system of internal control by examining and evaluating business processes to determine the adequacy and efficiency of financial and operating controls, and highlighting significant risks and non compliance impacting the Group. Where applicable, the internal audit department provides recommendations to improve on the effectiveness of risk management, controls and governance processes.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL cont’dThe internal audit function for property development and construction division was outsourced to an independent consulting firm, Sterling Business Alignment Consulting Sdn Bhd and perform the audit in accordance with Generally Accepted Auditing Practices for Internal Control Review.

The Audit Committee reviews the internal audit function, the scope of the annual internal audit plan, as well as the findings. The Audit Committee meets at least four times a year with the Board to discuss significant issues found during the internal audit process and makes the necessary recommendations to the Board.

Other Key Elements of Internal Control

The other key elements that provide effective internal control include:

• The Group has established an organization structure with clearly defined lines of responsibility, accountability, authority and reporting.

• The business plan and annual budget are prepared and presented to the Board for review and approval.

• Standard Operating Procedures which include policies and procedures within the Group are continuously reviewed and updated.

• Performance reports are provided quarterly to the directors and discussed at Board meetings. The Board receives from the management reports covering quarterly financial performance and other corporate matters.

• Monthly management accounts and reports are prepared to facilitate effective monitoring and decision making.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL cont’dCONCLUSION

For the financial year under review, after due and careful assessment and based on information and assurances provided by the Managing Director and Executive Director, the Board is satisfied that the Group’s risk management and internal control system was operating adequately and effectively in all material respects throughout the financial year and up to the date of approval of this statement by the Board for inclusion in the Annual Report. Measures are in place and continually being taken to ensure the ongoing adequacy and effectiveness of internal controls to safeguard shareholders’ investments and the Group’s assets.

There were no material losses, contingencies or uncertainties as a result of weaknesses in the risk management and internal control system that would require separate disclosures in this Annual Report. Nevertheless, the Board will continue to ensure that the Group’s risk management and internal control system are able to constantly adapt and prevail in its changing and challenging business environment.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

As required by paragraph 15.23 of the Bursa Securities Listing Requirements, the external auditors have reviewed this Statement on Risk Management & Internal Control. As set out in their terms of engagement, the procedures were performed in accordance with Recommended Practice Guide 5 (Revised) issued by Malaysian Institute of Accountants. Based on their procedures performed, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is not prepared in all material respects, in accordance with the disclosures required by paragraph 41 & 42 of the Guidelines, nor is it factually inaccurate. This statement is made in accordance with the resolution of the Board of Directors dated 11 April 2016.


COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee consists of three (3) members, all of whom are Independent Non-Executive Directors. The Chairman of the Audit Committee is also a member of the Malaysian Institute of Accountants.

The committee members are as follows:

Directors PositionLim Chee Hoong Chairman of Audit Committee &

Independent Non-Executive Director Dato’ Hamzah bin Mohd Salleh Independent Non-Executive Director

Dato’ Lim Heen Peok Independent Non-Executive Director

MEETINGS AND ATTENDANCE

The Audit Committee held a total of five (5) meetings during the financial year ended 31 December 2015. Details of attendance are as follows:

Directors AttendanceLim Chee Hoong 5 out of 5

Dato’ Hamzah bin Mohd Salleh 4 out of 5Dato’ Lim Heen Peok 5 out of 5

The Company Secretary was present at all Audit Committee Meetings held during the financial year ended 31 December 2015.

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

1. Constitution

The Board of Directors has constituted and established a committee of the Board to be known as the Audit Committee. The Audit Committee is to assist the Board in fulfilling its fiduciary responsibilities relating to corporate accounting, financial reporting practices, system of internal control, the audit process and the process of monitoring compliance with laws and regulations.

REPORT ONAUDIT COMMITTEE


2. Membership

• The Committee shall be appointed by the Board from amongst the directors of the Company and shall comprise of at least three (3) members, all of whom must be Non-Executive Directors and a majority of whom must be independent.

• At least one member of the Committee must be qualified under paragraph 15.09 (1)(c) of Bursa Securities’ Listing Requirements.

• No alternate director shall be appointed as a member of the Committee.

• The members of the Committee shall elect a Chairman from among their number who shall be an Independent Non-Executive Director.

• The Company Secretary or such other persons authorised by the Board shall act as the Secretary to the Committee.

• If a member of the Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced to below three (3), the Board of Directors shall, within three (3) months from the date of that event, appoint such number of new member(s) as may be required to make up the minimum number of three (3) members.

• The term of office and performance of the members of the Committee shall be reviewed by the Board of Directors at least once every three (3) years to determine whether the members have carried out their duties in accordance with their terms of reference.

3. Meetings and Minutes

• The Committee shall meet at least four (4) times in a financial year, although additional meetings may be called at any time at the Committee Chairman’s discretion.

• The quorum for a meeting of the Committee shall consist of not less than two (2) members, majority of whom must be independent directors.

REPORT ONAUDIT COMMITTEE cont’d


• Other than in circumstances which the Chairman of the Committee considers inappropriate, the Head of Finance, Head of Internal Audit and representatives of the external auditors will normally attend any meeting of the Committee to make known their views on any matter under consideration by the Committee or which in their opinion, should be brought to the attention of the Committee. Other Board members, employees and external professional advisers shall attend any particular meetings upon invitation by the Committee.

• The Committee shall report to the Board of Directors and its minutes tabled and noted by the Board. The books containing the minutes of proceedings of any meeting of the Committee shall be kept by the Company at the registered office or the principal office of the Company, and shall be open for inspection by any member of the Committee and the Board of Directors.

4. Authority

• The Committee is authorised by the Board to investigate any matter within the Committee’s terms of reference. It shall have full and unrestricted access to any information pertaining to the Group and shall have the resources it requires to perform its duties. All employees of the Group are required to comply with the requests made by the Committee.

• The Committee is authorised by the Board to obtain independent professional or other advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary, the expenses of which will be borne by the Company.

• The Committee shall have direct communication channels and be able to convene meetings with the external auditors, the Head of Internal Audit Department and/or the internal auditors or both, without the presence of other directors and employees of the Company, whenever deemed necessary.

• The Head of Internal Audit and/or the internal auditors report directly to the Committee and shall have direct access to the Chairman of the Committee on all matters of control and audit. All proposals by management regarding the appointment, transfer and/or removal of senior staff members of the Internal Audit Department or Internal Auditors, where applicable, shall require prior approval of the Committee. The Committee is also authorised by the Board to obtain information on any resignation of the outsourced Internal Auditors and/or internal audit staff members and provide the staff member an opportunity to submit his reasons for resigning.



5. Functions and Duties

• Review the following and report the same to the Board of Directors:

a) The audit plan, audit report and evaluation of the system of internal control with the external auditors as well as the assistance given by employees of the Group to the external auditors.

b) The adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work.

(c) Any internal audit programme, processes, the results of the internal audit programme, processes, or internal investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function.

(d) Review any appraisal or assessment of the performance of members of the internal audit function.

(e) The quarterly results and annual financial statements prior to the approval by the Board of Directors, focusing particularly on:

(i) Changes in or implementation of major accounting policies and practices.

(ii) Significant and unusual events.

(iii) Significant adjustments arising from the audit.

(iv) Compliance with accounting standards, other statutory and legal requirements and the going concern assumption.

(v) The accuracy and adequacy of the disclosure of information essential to a fair and full presentation of the financial affairs of the Group.

(f) Any related party transactions and conflict of interest situations that may arise within the Group and any related parties outside the Group including any transaction, procedure or course of conduct that raises questions of management integrity.

(g) Any letter of resignation from the external auditors of the Company.

(h) Whether there is reason (supported by grounds) to believe that the Company’s external auditors are not suitable for re-appointment.



(i) Any significant audit findings, reservations, difficulties encountered or material weaknesses reported by the external and internal auditors.

• Recommend the nomination of a person or persons as external auditors and the audit fee.

• Promptly report to Bursa Securities on any matter reported by it to the Board of the Company which has not been satisfactorily resolved resulting in a breach of Bursa Securities’ Listing Requirements.

• Carry out any other functions that may be mutually agreed upon by the Committee and the Board which would be beneficial to the Company and ensure the effective discharge of the Committee’s duties and responsibilities.

ACTIVITIES OF THE AUDIT COMMITTEE

During the financial year ended 31 December 2015, the activities carried out by the Audit Committee in the discharge of its duties included, among others, the following:

• Reviewed unaudited quarterly, year to date financial results and final audited financial statements before recommending to the Board for consideration and approval for release to Bursa Securities.

• Reviewed of the external auditors’ scope of work and audit plan for the year presented by representatives from the external auditors.

• Reviewed major audit findings and management’s response during the year with management, external auditors and internal auditors.

• Reviewed the extent of assistance provided by management and issues arising from audits with external auditors without presence of management and executive directors.

• Reviewed the assessment report on suitability and independence of the external auditors including non-audit services provided by the external auditors to the Company and corresponding fees and propose to the Board the re-appointment of the external auditors. The subject assessment encompassed audit planning and design, audit execution, audit fees and independence of the external auditors.

• Reviewed staffing requirement of the Internal Audit Department to ensure it is adequately staffed by employees with relevant skills, knowledge and experience to enable the department to perform its role.



• Recruitment and selection of internal auditors for the Property Development and Construction Division following the diversification of the principal activities of the Group to include property development, focusing on the corporate profiles of the candidates, experience of the Partners and senior management staff as well as its portfolio of clients and upon consideration, the Committee recommended to the Board for approval the appointment of Sterling Business Alignment Consulting Sdn Bhd as Internal Auditors for the Property Development and Construction Division of the Company.

• Reviewed the adequacy and relevance of the scope and risk based internal audit plan and results of the internal audit procedures with the in-house internal audit department and outsourced Internal Auditors for both the Manufacturing and Property Development and Construction Divisions. The focus of review was placed on high risk areas.

• Reviewed the significant risks identified by risk management committee on quarterly basis.

• Reviewed related party transactions and/or recurrent related party transactions to ensure that the transactions entered into were at arm’s length basis and on normal commercial terms.

• Reviewed the Statement on Risk Management and Internal Control and the Report of the Audit Committee for inclusion in the annual report.

• Reviewed the Circular to Shareholders on the proposed authority for the purchase of own shares by the Company and proposed shareholders’ mandate for recurrent related party transactions.

INTERNAL AUDIT FUNCTION

The Board has established an in-house internal audit department for Manufacturing Division, whereas the internal audit function for Property Development and Construction Division was outsourced to an independent consulting firm, Sterling Business Alignment Consulting Sdn Bhd, to provide the assurance on the effectiveness as well as the adequacy and integrity of the system of internal control.

For the year under review, audits were performed to evaluate and identify any weaknesses of the internal controls affecting the Group, the adequacy of the existing system of internal control and to recommend measures to management to improve and rectify any weaknesses.

The internal audit reviews has been carried out based on a risk-based audit approach and its findings were presented to Audit Committee on a quarterly basis.



During the financial year ended 31 December 2015, the Internal Auditors carried out the following activities:

(a) Prepared the annual audit plan for the Manufacturing, Property Development and Construction Divisions for the approval of the Audit Committee

(b) Performed risk-based audits and the findings were reported to the Audit Committee.

(c) Reviewed of the following processes of the Group’s operations:

i) Manufacturing Division

- Production & Quality Control- Human Resource (Production Payroll)- Inventory & Inventory Costing- Purchasing & Accounts Payable- Sales, Credit Control & Accounts Receivables- Finance & Information System

- Recurrent Related Party Transactions

ii) Property Development and Construction Division

- Procurement and Inventory Management

The findings arising from the above reviews were reported to Management for their response and subsequently for the Audit Committee deliberation. Where weaknesses were identified, recommended procedures have been or are being put in place to strengthen controls.

The costs incurred for the internal audit function in respect of the financial year ended 31 December 2015 amounted to RM358,359.



REPORT ONREMUNERATION COMMITTEE

COMPOSITION OF THE REMUNERATION COMMITTEE

The Remuneration Committee consists of three (3) members, the majority of whom are Non-Executive Directors.


Directors PositionLim Chee Hoong Chairman of Remuneration Committee &

Independent Non-Executive DirectorCheah Eng Chuan Managing Director

Dato’ Hamzah bin Mohd Salleh Independent Non-Executive Director

TERMS OF REFERENCE OF THE REMUNERATION COMMITTEE

1. Constitution

The Board has established a committee of the Board to be known as the Remuneration Committee.

2. Membership

• The Committee shall be appointed by the Board from amongst the directors of the Company and shall comprise of at least three (3) members, a majority of whom must be Non-Executive Directors. A quorum shall be two (2) members.

• The members of the Committee shall elect a Chairman from among their number.


3. Objective

Directors’ remuneration should be of a sufficient level to attract and retain the high caliber directors needed to manage the Group successfully.


In the case of Executive Directors, the component parts of remuneration should be structured so as to link rewards to corporate and individual performance. For Non-Executive Directors, their remuneration should reflect their respective levels of experience, expertise and responsibilities.

4. Functions

The functions of the Committee shall be:

• To recommend to the Board the framework of executive remuneration and its cost, and the remuneration package for each Executive Director, taking into account the performance of the individual, the inflation price index and information from independent sources on the rates of salary for similar jobs in a selected group of comparable companies.

• To reimburse reasonable expenses incurred by the directors in the course of their duties as directors.

• To review and determine the bonus scheme for the Executive Directors depending on various performance measurements of the Group.

• To review and determine the benefits-in-kind for the Executive Directors.

• To review the Executive Directors’ service contracts.

5. Reporting Procedures

• The remuneration of directors shall ultimately be the responsibility of the full Board after considering the recommendations of the Committee.

• Directors do not participate in decisions concerning their own remuneration packages.

REPORT ONREMUNERATION COMMITTEE cont’d


ACTIVITIES OF THE REMUNERATION COMMITTEE

During the financial year, the Remuneration Committee carried out the following activities:

(a) Reviewed and deliberated the remuneration packages of Executive Directors of the Company and determined the bonus for the Executive Directors.

(b) Reviewed the Directors’ Fees for the Non-Executive Directors of the Company.

(c) Reviewed the Report of the Remuneration Committee for inclusion in the annual report.

DIRECTORS’ REMUNERATION

Details of directors’ remuneration for the financial year ended 31 December 2015 are set out below:

Remuneration

Executive Directors

(RM)

Non-Executive Directors

(RM)Total(RM)

Directors’ fees* 120,000 130,000 250,000Salaries and other emoluments 3,170,254 - 3,170,254Bonus 376,300 - 376,300Benefits-in-kind 117,667 - 117,667

Total 3,784,221 130,000 3,914,221

* To be approved at the forthcoming Annual General Meeting (the directors’ fees are for the period from January 2015 to December 2015).



The number of directors whose total remuneration during the financial year ended 31 December 2015 falls within the following bands is as follows:

Range of remuneration (RM) Executive Director Non-Executive Director

Below 50,000 - 3300,001 – 350,000 1 -450,001 – 500,000 1 -550,001 - 600,000 2 -750,001 - 800,000 1 -1,050,001 - 1,100,000 1 -

Total 6 3

There were no directors whose total remuneration during the financial year ended 31 December 2015 falls within the bands of RM50,001 to RM300,000, RM350,001 to RM450,000, RM500,001 to RM550,000, RM600,001 to RM750,000 and RM800,001 to RM1,050,000.



REPORT ONNOMINATION COMMITTEE

COMPOSITION OF THE NOMINATION COMMITTEE

The Nomination Committee consists of three (3) members, all of whom are Non-Executive Directors.


Directors PositionDato’ Lim Heen Peok Chairman of Nomination Committee &

Independent Non-Executive Chairman Lim Chee Hoong Independent Non-Executive Director

Dato’ Hamzah bin Mohd Salleh Independent Non-Executive Director

TERMS OF REFERENCE OF THE NOMINATION COMMITTEE

1. Constitution The Board has established a committee of the Board to be known as the Nomination

Committee.

2. Membership

• The Committee shall be appointed by the Board from amongst the directors of the Company and shall comprise of at least three (3) members, all of whom must be Non-Executive Directors and a majority of whom must be independent. A quorum shall be two (2) members.

• The members of the Committee shall elect a Chairman from among their number.



REPORT ONNOMINATION COMMITTEE cont’d

3. Functions

The functions of the Committee shall be:

• To propose new candidates for appointment to the Board of Directors in accordance the Group’s directors recruitment criteria.

• To assess on an on-going basis, the effectiveness of the Board and the contribution of each individual director.

• To recommend to the Board, directors to fill the seats on other Board committees.

• To review annually the mix of skills and experience and other qualities of the Board members.

• To assess the independence of the Independent Directors upon admission, annually and when any new interest or relationship develops and confirm the conduct of the assessment in the annual report of the Company.

• To orientate and educate new directors as to the nature of the business, current issues within the Group, corporate strategies as well as expectations of the Company concerning input from directors and the general responsibilities of directors.

4. Re-election of Directors and Retirement of Directors by Rotation

In accordance with the Company’s Articles of Association, all directors who are appointed by the Board are subject to re-election by shareholders at the first opportunity after their appointment. The Articles also provide that at least one third of the remaining directors be subject to re-election by rotation at each Annual General Meeting.

The re-election of directors and retirement of directors by rotation are under the purview of the Nomination Committee.

5. Reporting Procedures

• The Committee reports to the full Board from time to time its recommendations for the Board’s consideration and implementation.

• The actual decision as to who shall be appointed to the Board is the responsibility of the full Board after considering the recommendations of the Committee.


ACTIVITIES OF THE NOMINATION COMMITTEE

a) The Nomination Committee upon its annual assessment of board performance and Director self-evaluation carried out for the financial year 2015, was satisfied that :

• The size, structure and composition of the Board is optimum with appropriate mix of knowledge, skills, attributes and core competencies.

• The Board has been able to discharge its duties and responsibilities professionally and

effectively. • All the Directors continue to uphold the highest governance standards in their conduct and that

of the Board.

• The Directors are able to devote sufficient time commitment to their roles and responsibilities as reflected by their satisfactory attendance at Board meeting and Board Committee meetings. It was noted that the Directors do not hold more than 2 directorships in public listed companies.

b) The Nomination Committee also deliberated and determined which directors would stand for re-election at the Company’s Annual General Meeting and assessed the independence of the Independent Directors against the established criteria.

c) The Nomination Committee discussed with Management succession planning that should be in place for the Group to provide for the succession of the Executive Directors and/or senior management and boardroom gender diversity advocated by the Government.

d) Reviewed of the Nomination Committee report for inclusion in the annual report

e) Discussion of the training needs of the directors and training programmes available to directors.

REPORT ONNOMINATION COMMITTEE cont’d


FINANCIALSTATEMENTS

DIRECTORS’ REPORT 62

STATEMENT BY DIRECTORS 69

STATUTORY DECLARATION 69

INDEPENDENT AUDITORS’ REPORT 70

STATEMENTS OF FINANCIAL POSITION 73

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 75

STATEMENTS OF CHANGES IN EQUITY 77

STATEMENTS OF CASH FLOWS 81

NOTES TO THE FINANCIAL STATEMENTS 84

TABLE OFCONTENTS


DIRECTORS’REPORT

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

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding and the provision of management services. The principal activities of the subsidiaries are set out in Note 9 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

Group CompanyRM’000 RM’000

Profit for the financial year 4,630 3,818

Attributable to:

Owners of the parent 6,075 3,818Non-controlling interests (1,445) -

4,630 3,818

DIVIDENDS

Dividends paid, declared or proposed since the end of the previous financial year were as follows:

CompanyRM’000

In respect of financial year ended 31 December 2014:Final single tier dividend of 1.00 sen per ordinary share,paid on 28 July 2015 1,449

The Directors propose a final single tier dividend of 1.00 sen per ordinary share, amounting to RM1,449,000 in respect of the financial year ended 31 December 2015, subject to the approval of members at the forthcoming Annual General Meeting. This dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the next financial year.


RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.

ISSUE OF SHARES AND DEBENTURES

The Company did not issue any new shares and debentures during the financial year.

TREASURY SHARES

The members of the Company, by a special resolution passed at the Extraordinary General Meeting held on 27 June 2005 authorised the Company’s plan to purchase its own shares. The authority granted by the members was subsequently renewed during subsequent Annual General Meetings of the Company, including the last meeting held on 23 June 2015. The Directors of the Company are committed to enhancing the value of the Company to its members and believe that the repurchase plan can be applied in the best interest of the Company and its members.

The Company has the right to retain, cancel, resell these shares and/or distribute these shares as dividends. As treasury shares, the rights attached to them as to voting, dividends and participation in any other distributions or otherwise are suspended. Of the total 145,062,500 (2014: 145,062,500) issued and fully paid ordinary shares of RM0.50 each as at 31 December 2015, 208,900 (2014: 208,900) ordinary shares of RM0.50 each bought for RM87,000 (2014: RM87,000) are held as treasury shares by the Company.

The number of outstanding ordinary shares of RM0.50 each in issue after deducting the treasury shares is 144,853,600 (2014: 144,853,600) as at 31 December 2015.

WARRANTS 2014/2019

On 11 July 2014, the Company issued 54,320,100 free detachable Warrants pursuant to the Rights Issue with Warrants Exercise on the basis of one (1) Warrant for every one (1) Rights Shares subscribed.

The Warrants are constituted by the Deed Poll dated 2 June 2014 (‘Deed Poll’).

DIRECTORS’REPORT cont’d


WARRANTS 2014/2019 (continued)

The salient features of the Warrants are disclosed in Note 17(c) to the financial statements.

As at 31 December 2015, unexercised warrants of the Company are as follows:

No. of warrants over WarrantDate issued Exercise price ordinary shares expiry date

7 July 2014 RM0.75 54,320,100 6 July 2019

No warrants were exercised into ordinary shares during the financial year ended 31 December 2015.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year.

DIRECTORS

The Directors who held for office since the date of the last report are:

Dato’ Lim Heen PeokDato’ Lua Choon HannCheah Eng ChuanDato’ Wee Cheng KwanLee Sim HakOng Lock HooDatuk Dr. Wong Lai Sum (appointed on 11 April 2016)Dato’ Hamzah Bin Mohd SallehLim Chee HoongDato’ Seri Yeoh Soo Ann (resigned on 30 November 2015)



DIRECTORS’ INTERESTS

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

Number of ordinary shares of RM0.50 each

Balanceas at

1.1.2015 Bought Sold

Balanceas at

31.12.2015/ Date of

resignationShares in the Company

Direct interests

Dato’ Lim Heen Peok 54,400 - - 54,400Cheah Eng Chuan 7,871,358 - - 7,871,358Dato’ Lua Choon Hann 11,717,700 6,331,700 - 18,049,400Lee Sim Hak 3,089,470 - - 3,089,470Ong Lock Hoo 2,658,300 - - 2,658,300Dato’ Wee Cheng Kwan 12,789,600 250,000 - 13,039,600Lim Chee Hoong 77,000 - - 77,000Dato’ Seri Yeoh Soo Ann (resigned on 30 November 2015) 25,449,000 - (25,449,000) -

Indirect interests

Lim Chee Hoong# 77,000 - - 77,000



DIRECTORS’ INTERESTS (continued)

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

Number of Warrants 2014/2019

Balanceas at

1.1.2015 Bought Sold

Balanceas at

31.12.2015/ Date of

resignationWarrants in the Company

Direct interests

Dato’ Lim Heen Peok 20,400 - - 20,400Cheah Eng Chuan 2,801,759 - - 2,801,759Dato’ Lua Choon Hann 3,900,900 - - 3,900,900Lee Sim Hak 1,213,706 - - 1,213,706Ong Lock Hoo 1,043,262 - - 1,043,262Dato’ Wee Cheng Kwan 4,725,600 - - 4,725,600Dato’ Seri Yeoh Soo Ann (resigned on 30 November 2015) 7,900,000 - - 7,900,000

# Disclosure of interests held by his spouse pursuant to Section 134(12)(c) of the Companies Act, 1965 in Malaysia.

The other Director holding office at the end of the financial year did not hold any interest in the ordinary shares and warrants of the Company or options over ordinary shares and debentures of its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than deemed benefits arising from related party transactions as disclosed in Note 30 to the financial statements and remuneration received by certain Directors as Directors of subsidiaries.

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate except for the warrants issued as disclosed in Note 17(c) to the financial statements, which are also offered to shareholders.



OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL YEAR

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

(i) to ascertain that proper 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 there are no known bad debts and that adequate provision had been made for doubtful debts; and

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

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

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:

(i) which would render the writing off of bad debts or render the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any material extent;

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

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

(d) In the opinion of the Directors:

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after the end of the financial year which will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due.



OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued)

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since

the end of the financial year.

(g) The Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

Significant event during the financial year is disclosed in Note 35 to the financial statements.

SIGNIFICANT EVENT SUBSEQUENT TO THE END OF THE REPORTING PERIOD

Significant event subsequent to the end of the reporting period is disclosed in Note 36 to the financial statements.

AUDITORS

The auditors, BDO, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the Directors.

.................................................................Cheah Eng ChuanDirector

Kuala Lumpur11 April 2016

........................................................Dato’ Wee Cheng KwanDirector



In the opinion of the Directors, the financial statements set out on pages 73 to 193 have been drawn up in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2015 and of the financial performance and cash flows of the Group and of the Company for the financial year then ended.

In the opinion of the Directors, the information set out in Note 37 to the financial statements on page 194 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.

On behalf of the Board,

.................................................................Cheah Eng ChuanDirector


........................................................Dato’ Wee Cheng KwanDirector

STATUTORY DECLARATION

I, Dato’ Wee Cheng Kwan, being the Director primarily responsible for the financial management of PRG Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 73 to 194 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly )declared by the abovenamed at )Kuala Lumpur, this )11 April 2016 )

Before me:

Baloo A/L T. Pichai (W-663)Commissioner for Oaths

STATEMENTBY DIRECTORS


Report on the Financial Statements

We have audited the financial statements of PRG Holdings Berhad, which comprise 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 73 to 193.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

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

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PRG HOLDINGS BERHAD


Report on Other Legal and Regulatory Requirements

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

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

(b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 9 to the financial statements.

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

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

Other Reporting Responsibilities

The supplementary information set out in Note 37 to the financial statements 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.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PRG HOLDINGS BERHAD cont’d


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.

BDOAF : 0206Chartered Accountants


Chan Wai Leng2893/08/17 (J) Chartered Accountant

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PRG HOLDINGS BERHAD cont’d


Group CompanyNote 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000ASSETS

Non-current assets

Property, plant and equipment 7 47,958 45,927 892 1,178 Intangible assets 8 1,534 1,349 - - Investments in subsidiaries 9 - - 46,427 41,742 Investment in a joint venture 10 1,413 1,012 - - Amounts owing by subsidiaries 12 - - 39,945 3,097 Deferred tax assets 11 15 36 - -

50,920 48,324 87,264 46,017

Current assets

Property development costs 13 146,297 128,468 - - Inventories 15 22,035 21,938 - - Trade and other receivables 12 24,273 22,094 8,667 49,955 Current tax assets 537 719 4 4 Cash and bank balances 16 24,057 16,083 219 190

217,199 189,302 8,890 50,149

TOTAL ASSETS 268,119 237,626 96,154 96,166

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital 17 72,531 72,531 72,531 72,531 Treasury shares 17 (87) (87) (87) (87) Reserves 18 44,393 35,854 19,753 17,384

116,837 108,298 92,197 89,828

Non-controlling interests (1,758) (355) - -

TOTAL EQUITY 115,079 107,943 92,197 89,828

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2015



RM’000 RM’000 RM’000 RM’000

LIABILITIES

Non-current liabilities

Borrowings 19 35,316 55,615 739 1,661 Trade and other payables 21 28,754 15,889 - 1,677 Deferred tax liabilities 11 1,179 1,031 - -

65,249 72,535 739 3,338

Current liabilities

Trade and other payables 21 43,119 46,534 2,108 2,061 Borrowings 19 44,239 10,177 1,110 939 Current tax liabilities 433 437 - -

87,791 57,148 3,218 3,000

TOTAL LIABILITIES 153,040 129,683 3,957 6,338

TOTAL EQUITY AND LIABILITIES 268,119 237,626 96,154 96,166

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2015 cont’d

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



RM’000 RM’000 RM’000 RM’000

Revenue 24 129,323 92,286 2,918 4,809Cost of sales (99,363) (71,830) - -

Gross profit 29,960 20,456 2,918 4,809Other income 3,390 2,155 1,341 1,566Distribution costs (3,795) (2,670) - -Administrative expenses (21,190) (16,600) (2,437) (2,008)Other expenses (370) (490) (315) -Interest income 211 202 2,441 296Finance costs (1,200) (818) (93) (86)Share of profit of a joint venture, net of tax 10 235 154 - -

Profit before tax 25 7,241 2,389 3,855 4,577Tax expense 26 (2,611) (993) (37) (1)

Profit for the financial year 4,630 1,396 3,818 4,576

Other comprehensive income, net of tax

Items that may be reclassified subsequently to profit or loss:Foreign currency translations 3,789 1,262 - -Share of other comprehensive income of a joint venture 10 166 85 - -

Total comprehensive income 8,585 2,743 3,818 4,576

Profit/(Loss) attributable to: Owners of the parent 6,075 2,374 3,818 4,576 Non-controlling interests (1,445) (978) - -

4,630 1,396 3,818 4,576

Total comprehensive income/(loss) attributable to: Owners of the parent 9,988 3,702 3,818 4,576 Non-controlling interests (1,403) (959) - -

8,585 2,743 3,818 4,576

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


Group Company2015 2014 2015 2014

Note sen sen sen sen

Earnings per ordinary share attributable to owners of the parent:

- Basic 27 4.194 1.983- Diluted 27 4.194 1.979

Dividend per ordinary share in respect of the financial year (sen):

- Final single tier dividend (paid) 28 - 1.00 - 1.00- Final single tier dividend (proposed) 28 1.00 - 1.00 -

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 cont’d



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RM’000 RM’000 RM’000 RM’000CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 7,241 2,389 3,855 4,577

Adjustments for: Amortisation of intangible assets 8 75 32 - - Depreciation of property, plant and equipment 7 4,924 3,515 291 46 Fair value adjustments on - trade receivables (31) 31 - - - trade payables 4 (4) - - - loans to subsidiaries - - (28) (1,175) Inventories written down 15 861 247 - - Impairment losses on - investment in a subsidiary 9 - - 315 - - trade receivables 12(g) - 64 - - Finance costs 1,200 818 93 86 Net loss on disposals of property, plant and equipment 120 - - - Dividend income from subsidiaries 24 - - (1,488) (4,065) Interest income (211) (202) (2,441) (296) Property, plant and equipment written off 7 205 - - - Reversal of impairment loss on trade receivables 12(g) - (1) - - Reversal of inventories written down 15 (2) (469) - - Share of profit of a joint venture, net of tax 10 (235) (154) - - Net unrealised gain on foreign exchange (1,532) (460) (1,154) (386)

Operating profit/(loss) before changes in working capital 12,619 5,806 (557) (1,213)

Decrease in inventories 958 551 - - Increase in property development costs (17,829) (70,994) - - (Increase)/Decrease in trade and other receivables (1,223) (5,216) (36) 23 Increase/(Decrease) in trade and other payables 8,738 5,951 (73) 181

STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015



RM’000 RM’000 RM’000 RM’000CASH FLOWS FROM OPERATING ACTIVITIES (continued)

Cash generated from/(used in) operations 3,263 (63,902) (666) (1,009)

Tax refunded 23 6 - -Tax paid (2,324) (1,280) (37) (5)

Net cash from/(used in) operating activities 962 (65,176) (703) (1,014)

CASH FLOWS FROM INVESTING ACTIVITES

Purchase of - property, plant and equipment 7 (4,915) (10,645) (5) (162)- intangible assets 8 (252) (68) - -Advances to subsidiaries - - (8,674) (31,443)Dividends received from a joint venture 10 703 159 - -Dividends received from subsidiaries - - 9,488 4,065Interest received 211 202 2,441 296Proceeds from disposals of property,

plant and equipment 136 - - -Acquisition of additional interest in a subsidiary 34 - (103) - -Deposits placed with financial

institutions with original maturityof more than three (3) months 16 (3) (2) - -

Placement of restricted cash 16 (71) (2,567) - -

Net cash (used in)/from investing activities (4,191) (13,024) 3,250 (27,244)

STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 cont’d



RM’000 RM’000 RM’000 RM’000CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid to owners of the parent 28 (1,449) (2,173) (1,449) (2,173)Interest paid (1,200) (818) (93) (86)Proceeds from issuance of ordinary shares pursuant to rights issue - 29,876 - 29,876Payment of share issuance expenses - (300) - (300)Proceeds from issuance of shares to non-controlling interest 34 - 307 - -Drawdowns of borrowings 29,478 65,788 - -Repayments of borrowings (17,369) (11,397) (821) (699)Repayments of hire purchase creditors (433) (192) (196) (72)

Net cash from/(used in) financing activities 9,027 81,091 (2,559) 26,546

Net increase/(decrease) in cash and cash equivalents 5,798 2,891 (12) (1,712)

Effects of exchange rate changes 1,454 198 41 -

Cash and cash equivalents as at beginning of financial year 13,491 10,402 190 1,902

Cash and cash equivalents as at end of financial year 16 20,743 13,491 219 190

STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 cont’d



1. CORPORATE INFORMATION

PRG Holdings Berhad (“the Company”) is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan, 50200 Kuala Lumpur.

The principal place of business of the Company is located at Lot 1883, Jalan KPB 9, Kg. Bharu Balakong, 43300 Seri Kembangan, Selangor Darul Ehsan.

The consolidated financial statements for the financial year ended 31 December 2015 comprise the Company and its subsidiaries and the Group’s interest in a joint venture. These financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.

The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 11 April 2016.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding and provision of management services. The principal activities of the subsidiaries are set out in Note 9 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. BASIS OF PREPARATION

The financial statements of the Group and of the Company set out on pages 73 to 193 have been prepared in accordance with Financial Reporting Standards (“FRSs”) and the provisions of the Companies Act, 1965 in Malaysia. However, Note 37 to the financial statements set out on page 194 has been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad.

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2015


4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements.

The preparation of these financial statements in conformity with FRSs requires the Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying the accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on the Directors’ best knowledge of events and actions, actual results could differ from those estimates.

4.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

(a) Power over the investee;

(b) Exposure, or rights, to variable returns from its involvement with the investee; and

(c) The ability to use its power over the investee to affect its returns.

If the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) The contractual arrangement with the other vote holders of the investee;

(b) Rights arising from other contractual agreements; and

(c) The voting rights of the Group and potential voting rights.

Intragroup balances, transactions, income and expenses are eliminated on consolidation. Unrealised gains arising from transactions with joint ventures are eliminated against the investment to the extent of the interest of the Group in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no impairment.

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2015 cont’d


4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.2 Basis of consolidation (continued)

The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the other entities in the Group.

Non-controlling interests represent equity in subsidiaries that are not attributable, directly or indirectly, to owners of the parent, and is presented separately in the consolidated statement of profit or loss and other comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the financial year are included in the statement of profit or loss and other comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Changes in the Company owners’ ownership interest in a subsidiary 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. 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 parent.

If the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:

(i) The aggregate of the fair value of the consideration received and the fair value of any retained interest; and

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




4.2 Basis of consolidation (continued)

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

4.3 Business combination

Business combinations are accounted for by applying the acquisition method of accounting.

Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured at their fair value at the acquisition date, except that:

(a) Deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with FRS 112 Income Taxes and FRS 119 Employee Benefits respectively;

(b) Liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement by the Group of an acquiree’s share-based payment transactions are measured in accordance with FRS 2 Share-based Payment at the acquisition date; and

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

Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the serviced are received.

Any contingent consideration payable is recognised at fair value at the acquisition date. Measurement period adjustments to contingent consideration are dealt with as follows:

(a) If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity.

(b) Subsequent changes to contingent consideration classified as an asset or liability that is a financial instrument within the scope of FRS 139 are recognised either in profit or loss or in other comprehensive income in accordance with FRS 139. All other subsequent changes are recognised in profit or loss.




4.3 Business combination (continued)

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

Components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation are initially measured at fair value, or at the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other components of non-controlling interests shall be measured at their acquisition-date fair values, unless another measurement basis is required by FRSs. The choice of measurement basis is made on a combination-by-combination basis. Subsequent to initial recognition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. The accounting policy for goodwill is set out in Note 4.9 to the financial statements. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.

4.4 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset.

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




4.4 Property, plant and equipment and depreciation (continued)

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has a different useful life, is depreciated separately.

After initial recognition, property, plant and equipment are stated at cost less any accumulated depreciation and any accumulated impairment losses.

Depreciation is calculated to write off the cost of the assets to their residual values on a straight line basis over their estimated useful lives. The principal depreciation periods and rates are as follows:

Long-term leasehold land 60 - 99 yearsBuildings 2% - 12.5%Plant and machinery 10% - 20%Furniture, fittings and office equipment 10% - 20%Motor vehicles 10% - 20%

Freehold land has unlimited useful life and is not depreciated. Capital work-in-progress representing machinery under installation and renovation-in-progress are stated at cost. Capital work-in-progress is not depreciated until such time when the asset is available for use.

At the end of each reporting period, the carrying amount of an item of property, plant and equipment is assessed for impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see Note 4.10 to the financial statements on impairment of non-financial assets).

The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate.

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profit or loss.




4.5 Leases and hire purchase

(a) Finance leases and hire purchase

Assets acquired under finance leases and hire purchase which transfer substantially all the risks and rewards of ownership to the Group are recognised initially at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the Group’s incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are depreciated on the same basis as owned assets.

The minimum lease payments are apportioned between finance charges and the reduction of the outstanding liability. The finance charges are recognised in profit or loss over the period of the lease term so as to produce a constant periodic rate of interest on the remaining lease and hire purchase liabilities.

(b) Operating leases

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.

(c) Leases of land and buildings

For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification and these leases are classified as operating or finance leases in the same way as leases of other assets.

The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and buildings are allocated between the land and the buildings elements in proportion to the relative fair values of the leasehold interests in the land element and the buildings element of the lease at the inception of the lease.




4.5 Leases and hire purchase (continued)

(c) Leases of land and buildings (continued)

For a lease of land and building in which the amount that would initially be recognised for the land element is immaterial, the land and building are treated as a single unit for the purpose of lease classification and is accordingly classified as a finance or operating lease. In such a case, the economic life of the building is regarded as the economic life of the entire leased asset.

4.6 Property development costs

Property development costs comprise all cost that are directly attributable to the development activities or that can be allocated on a reasonable basis to such activities. They comprise the cost of land under development, construction costs and other related development costs common to the whole project, including professional fees, stamp duties, commissions, conversion fees and other relevant levies as well as borrowing costs.

Property development costs not recognised as an expense are recognised as an asset measured at the lower of cost and net realisable value.

When revenue recognised in profit or loss exceeds progress billings to purchasers, the balance is classified as accrued billings under current assets. When progress billings exceed revenue recognised in profit or loss, the balance is classified as progress billings under current liabilities.

4.7 Construction contracts

Contract costs comprise costs related directly to the specific contract and those that are attributable to the contract activity in general and can be allocated to the contract and such other costs that are specifically chargeable to the customer under the terms of the contract.

When the total costs incurred on construction contracts plus recognised profits (less recognised losses), exceeds progress billings, the balance is classified as amount due from customers for contract work. When progress billings exceed costs incurred plus recognised profits (less recognised losses), the balance is classified as amount due to customers for contract works.




4.8 Investments

(a) Subsidiaries

A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to variable returns from its involvement with the subsidiary and have the ability to affect those returns through its power over the subsidiary.

An investment in subsidiary, which is eliminated on consolidation, is stated in the separate financial statements of the Company at cost less impairment losses, if any. Put options written over non-controlling interests on the acquisition of subsidiary shall be included as part of the cost of investment in the separate financial statements of the Company. Subsequent changes in the fair value of the written put options over non-controlling interests shall be recognised in profit or loss. Investments accounted for at cost shall be accounted for in accordance with FRS 5 Non-current Assets Held for Sale and Discontinued Operations when they are classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with FRS 5.

When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would derecognise all assets, liabilities and non-controlling interests at their carrying amount and recognise the fair value of the consideration received. Any retained interest in the former subsidiary is recognised at its fair value at the date control is lost. The resulting difference is recognised as a gain or loss in profit or loss.

(b) Joint arrangements

A joint arrangement is an arrangement of which two or more parties have joint control. The parties are bound by a contractual arrangement which gives two or more parties joint control of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

Joint venture

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. These parties are known as joint venturers.

In the separate financial statements of the Company, an investment in a joint venture is stated at cost.




4.8 Investments (continued)

(b) Joint arrangements (continued)

Joint venture (continued)

Any premium paid for an investment in a joint venture above the fair value of the share of the identifiable assets, liabilities and contingent liabilities acquired of the Group is capitalised and included in the carrying amount of the investment in joint venture. Where there is an objective evidence that the investment in a joint venture has been impaired, the carrying amount of the investment is tested for impairment in accordance with FRS 136 Impairment of Assets as a single asset, by comparing its recoverable amount with its carrying amount.

The Group recognises its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with FRS 128 Investments in Associates and Joint Ventures.

The Group determines the type of joint arrangement in which it is involved, based on the rights and obligations of the parties to the arrangement. In assessing the classification of interests in joint arrangements, the Group considers:

(i) The structure of the joint arrangement;

(ii) The legal form of joint arrangements structured through a separate vehicle;

(iii) The contractual terms of the joint arrangement agreement; and

(iv) Any other facts and circumstances.

When there are changes in the facts and circumstances change, the Group reassesses whether the type of joint arrangement in which it is involved has changed.

4.9 Intangible assets

(a) Goodwill

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




4.9 Intangible assets (continued)

(a) Goodwill (continued)

After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount could be impaired. Objective events that would trigger a more frequent impairment review include adverse industry or economic trends, significant restructuring actions, significantly lowered projections of profitability, or a sustained decline in the acquiree’s market capitalisation. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(b) Other intangible assets

Other intangible assets are recognised only when the identifiability, control and future economic benefit probability criteria are met.

The Group recognises at the acquisition date separately from goodwill, an intangible asset of the acquiree, irrespective of whether the asset had been recognised by the acquiree before the business combination. In-process research and development projects acquired in such combinations are recognised as an asset even if subsequent expenditure is written off because the criteria specified in the policy for research and development is not met.

Intangible assets are initially measured at cost. The cost of intangible assets recognised in a business combination is their fair values as at the date of acquisition.

After initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a straight line basis over the estimated economic useful lives and are assessed for any indication that the asset could be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. The amortisation expense on intangible assets with finite lives is recognised in profit or loss and is included within the other operating expenses line item.




4.9 Intangible assets (continued)

(b) Other intangible assets (continued)

An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows to the Group. Intangible assets with indefinite useful lives are tested for impairment annually and wherever there is an indication that the carrying amount may be impaired. Such intangible assets are not amortised. Their useful lives are reviewed at the end of each reporting period to determine whether events and circumstances continue to support the indefinite useful life assessment for the asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for as a change in accounting estimate in accordance with FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors.

Expenditure on an intangible item that is initially recognised as an expense is not recognised as part of the cost of an intangible asset at a later date.

An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use. The gain or loss arising from the derecognition determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset is recognised in profit or loss when the asset is derecognised.

Computer software

Costs that are associated with identifiable and unique software products controlled by the Group and have probable economic benefit exceeding the cost beyond one year are recognised as intangible assets. Expenditure which enhances or extends the performance of computer software programmes beyond their original specifications is recognised as a capital improvement and added to the original cost of the software. Costs associated with maintaining computer software are recognised as an expense as incurred.

Computer software costs are stated at cost less accumulated amortisation cost and accumulated impairment losses, if any. These costs are amortised using the straight line method over their estimated useful lives of two (2) to ten (10) years.

Licenses

Acquired licenses have finite useful lives and are carried at cost less accumulated amortisation and any accumulated impairment losses. Amortisation is calculated using the straight line method to allocate the cost of the licenses over their estimated useful lives of ten (10) years.




4.10 Impairment of non-financial assets

The carrying amount of assets, except for financial assets (excluding investments in subsidiaries and a joint venture), assets arising from construction contracts, property development costs, deferred tax assets and inventories, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

Goodwill that has an indefinite useful life is tested annually for impairment or more frequently if events or changes in circumstances indicate that the goodwill might be impaired.

The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash generating unit (“CGU”) to which the asset belongs. Goodwill acquired in a business combination is from the acquisition date, allocated to each of the Group’s CGU or groups of CGU that are expected to benefit from the synergies of the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units.

Goodwill acquired in a business combination shall be tested for impairment as part of the impairment testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest level within the Group at which the goodwill is monitored for internal management purposes and not larger than an operating segment determined in accordance with FRS 8 Operating Segments.

The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use.

In estimating value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal 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 for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in profit or loss when the carrying amount of the asset or the CGU, including the goodwill, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU.

The impairment loss is recognised in profit or loss immediately.

An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets is reversed if, and only if, there has been a change in the estimates used to determine the assets’ recoverable amount since the last impairment loss was recognised.




4.10 Impairment of non-financial assets (continued)

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Such reversals are recognised as income immediately in profit or loss.

4.11 Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined using the weighted average cost formula. The cost of consumables and raw materials comprises all costs of purchase plus the cost of bringing the inventories to their existing location and condition. The cost of work-in-progress and manufactured inventories includes the cost of raw materials, direct labour, other direct costs and a proportion of production overheads based on normal operating capacity of the production facilities.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

4.12 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially favourable to the Group.

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the Group.

Financial instruments are recognised on the statement of financial position when the Group has become a party to the contractual provisions of the instrument. At initial recognition, a financial instrument is recognised at fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issuance of the financial instrument.




4.12 Financial instruments (continued)

An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the economic characteristics and risks of the embedded derivative is not closely related to the economic characteristics and risks of the host contract, a separate instrument with the same terms as the embedded derivative meets the definition of a derivative, and the hybrid instrument is not measured at fair value through profit or loss.

(a) Financial assets

A financial asset is classified into the following four (4) categories after initial recognition for the purpose of subsequent measurement:

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss comprise financial assets that are held for trading (i.e. financial assets acquired principally for the purpose of resale in the near term), derivatives (both, freestanding and embedded) and financial assets that were specifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial assets classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial assets classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses.

However, derivatives that is linked to and must be settled by delivery of unquoted equity instruments that do not have a quoted market price in an active market are recognised at cost.

(ii) Held-to-maturity investments

Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity.

Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at amortised cost using the effective interest method. Gains or losses on financial assets classified as held-to-maturity are recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation process.





(a) Financial assets (continued)

(iii) Loans and receivables

Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Subsequent to initial recognition, financial assets classified as loans and receivables are measured at amortised cost using the effective interest method. Gains or losses on financial assets classified as loans and receivables are recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation process.

(iv) Available-for-sale financial assets

Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated as available for sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised directly in other comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised, at which time the cumulative gains or losses previously recognised in other comprehensive income are recognised in profit or loss. However, interest calculated using the effective interest method is recognised in profit or loss whilst dividends on available-for-sale equity instruments are recognised in profit or loss when the right of the Group to receive payment is established.

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in fair value with original maturities of three (3) months or less, and are used by the Group and the Company in the management of their short term commitments. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised directly in other comprehensive income shall be recognised in profit or loss.





(a) Financial assets (continued)

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or marketplace convention.

A regular way purchase or sale of financial assets shall be recognised and derecognised, as applicable, using trade date accounting.

(b) Financial liabilities

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. A financial liability is classified into the following two (2) categories after initial recognition for the purpose of subsequent measurement:

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

Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading, derivatives (both, freestanding and embedded) and financial liabilities that were specifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial liabilities classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial liabilities classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial liabilities classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses.

(ii) Other financial liabilities

Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held for trading nor initially designated as at fair value through profit or loss.

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains or losses on other financial liabilities are recognised in profit or loss when the financial liabilities are derecognised and through the amortisation process.





(b) Financial liabilities (continued)

A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

Any difference between the carrying amount of a 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.

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance contracts as defined in FRS 4 Insurance Contracts. The Group recognises these insurance contracts as recognised insurance liabilities when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits would be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

At the end of every reporting period, the Group assesses whether its recognised insurance liabilities are adequate, using current estimates of future cash flows under its insurance contracts. If this assessment shows that the carrying amount of the insurance liabilities is inadequate, the entire deficiency shall be recognised in profit or loss.

Recognised insurance liabilities are only removed from the statement of financial position when, and only when, it is extinguished via a discharge, cancellation or expiration.





(c) Equity

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are classified as equity instruments.

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to profit or loss.

Interim dividends to shareholders are recognised in equity in the period in which they are declared. Final dividends are recognised upon the approval of shareholders in a general meeting.

The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting date and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.

When the Group repurchases its own shares, the shares repurchased would be accounted for using the treasury stock method.

Where the treasury stock method is applied, the shares repurchased and held as treasury shares shall be measured and carried at the cost of repurchase on initial recognition and subsequently. It shall not be revalued for subsequent changes in the fair value or market price of the shares.

The carrying amount of the treasury shares shall be offset against equity in the statement of financial position. To the extent that the carrying amount of the treasury shares exceeds the share premium account, it shall be considered as a reduction of any other reserves as may be permitted by the Companies Act, 1965 in Malaysia.

No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the own equity instruments of the Company. If such shares are issued by resale, any difference between the sales consideration and the carrying amount is shown as a movement in equity.





(c) Equity (continued)

Warrant reserve

Proceeds from warrants which are issued at fair value, are credited to a warrants reserve. Warrants reserve is non-distributable, and is transferred to the share premium account upon the exercise of the warrants. Warrants reserve in relation to unexercised warrants at the expiry of the warrants period is transferred to retained earnings.

4.13 Impairment of financial assets

The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of each reporting period.

(a) Held-to-maturity investment and loans and receivables

The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties of the receivable or investee, and default or significant delay in payments to determine whether there is objective evidence that an impairment loss on held-to-maturity investment and loans and receivables has occurred. Other objective evidence of impairment include historical collection rates determined on an individual basis and observable changes in national or local economic conditions that are directly correlated with the historical default rates of receivables.

If any such objective evidence exists, the amount of impairment loss is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of held-to-maturity investment is directly reduced by the impairment loss whilst the carrying amount of loans and receivables are reduced through the use of an allowance account.

If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of impairment reversed is recognised in profit or loss.




4.13 Impairment of financial assets (continued)

(b) Available-for-sale financial assets

The Group collectively considers factors such as significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market as objective evidence that available-for-sale financial assets are impaired.

If any such objective evidence exists, an amount comprising the difference between the financial asset’s cost (net of any principal payment and amortisation) and current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in subsequent periods. Instead, any increase in the fair value subsequent to the impairment loss is recognised in other comprehensive income.

Impairment losses on available-for-sale debt investments are subsequently reversed to profit or loss if the increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

4.14 Borrowing costs

Borrowing costs that are directly attributable to the acquisition or production of a qualifying asset is capitalised as part of the cost of the asset until when substantially all the activities necessary to prepare the asset for its intended use or sale are complete, after which such expense is charged to profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended periods in which active development is interrupted.

The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the borrowing during the period less any investment income on the temporary investment of the borrowing.

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




4.15 Income taxes

Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other taxes, such as withholding taxes, which are payable by foreign subsidiaries or a joint venture on distributions to the Group and the Company, and real property gains taxes payable on the disposal of properties.

Taxes in the statements of profit or loss and other comprehensive income comprise current tax and deferred tax.

(a) Current tax

Current tax expenses are determined according to the tax laws of each jurisdiction in which the Group operates and include all taxes based upon the taxable profit (including withholding taxes payable by foreign subsidiaries on distribution of retained earnings to companies in the Group), and real property gains taxes payable on disposal of properties.

(b) Deferred tax

Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or liability in the statement of financial position and its tax base.

Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profit would be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable that sufficient taxable profit would be available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset would be reduced accordingly. When it becomes probable that sufficient taxable profit would be available, such reductions would be reversed to the extent of the taxable profit.




4.15 Income taxes (continued)

(b) Deferred tax (continued)

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

(i) the same taxable entity; or

(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax would be recognised as income or expense and included in profit or loss for the period unless the tax relates to items that are credited or charged, in the same or a different period, directly to equity, in which case the deferred tax will be charged or credited directly to equity.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on the announcement of tax rates and tax laws by the Government in the annual budgets which have the substantive effect of actual enactment by the end of each reporting period.

4.16 Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, and when it is probable that an outflow of resources embodying economic benefits would be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, the amount of a provision would be discounted to its present value at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits would be required to settle the obligation, the provision would be reversed.

Provisions for restructuring are recognised when the Group has approved a detailed formal restructuring plan, and the restructuring either has commenced or has been announced publicly.




4.16 Provisions (continued)

Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

4.17 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past events whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise a contingent asset but discloses its existence where the inflows of economic benefits are probable, but not virtually certain.

In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date.

4.18 Employee benefits

(a) Short term employee benefits

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are expensed when employees rendered their services to the Group.

Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render services that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur and they lapse if the current period’s entitlement is not used in full and do not entitle employees to a cash payment for unused entitlement on leaving the Group.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation.




4.18 Employee benefits (continued)

(b) Defined contribution plans

The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. The contributions are recognised as a liability after deducting any contributions already paid and as an expense in the period in which the employees render their services.

4.19 Foreign currencies

(a) Functional and presentation currency

Items included in the financial statements of each of the entities of the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency.

(b) Foreign currency translations and balances

Transactions in foreign currencies are converted into functional currency at rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the end of each reporting period are translated into functional currency at rates of exchange ruling at that date. All exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in profit or loss in the period in which they arise. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost, are translated using the historical rate as of the date of acquisition, and non-monetary items, which are carried at fair value are translated using the exchange rate that existed when the values were determined for presentation currency purposes.

(c) Foreign operations

Financial statements of foreign operations are translated at the end of the reporting period exchange rates with respect to their assets and liabilities, and at exchange rates at the dates of the transactions with respect to items reflected in profit or loss or other comprehensive income. All resulting translation differences are recognised as a separate component of equity.

In the consolidated financial statements, exchange differences arising from the translation of the net investment in foreign operations are taken to equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in profit or loss as part of the gain or loss on disposal.




4.19 Foreign currencies (continued)

(c) Foreign operations (continued)

Exchange differences arising on a monetary item that forms part of the net investment of the Company in a foreign operation shall be recognised in profit or loss in the separate financial statements of the Company or the foreign operation, as appropriate. In the consolidated financial statements, such exchange differences shall be recognised initially as a separate component of equity and recognised in profit or loss upon disposal of the net investment.

Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation are treated as assets and liabilities of the acquired entity and translated at the exchange rate ruling at the end of the reporting period.

4.20 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivables, net of discounts and rebates.

Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction would flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the activities of the Group as follows:

(a) Sale of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have been transferred to the customer and where the Group retains no continuing managerial involvement over the goods, which coincides with the delivery of goods and services and acceptance by customers.

(b) Property development

Property development revenue is recognised in respect of all development units that have been sold. Revenue recognition commences when the sale of the development unit is effected, upon the commencement of development and construction activities and when the financial outcome can be reliably estimated. The attributable portion of property development cost is recognised as an expense in the period in which the related revenue is recognised. The amount of such revenue and expenses recognised is determined by reference to the stage of completion of development activity at the end of each reporting period. The stage of completion is measured by reference to the proportion that property development costs incurred for work performed to date bear to the estimated total property development cost.




4.20 Revenue recognition (continued)

(b) Property development (continued)

When the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable to be recoverable and the property development costs on the development units sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project is recognised as an expense immediately, including costs to be incurred over the defects liability period.

(c) Construction contracts

Profits from contract works are recognised on a percentage of completion method. Percentage of completion is determined on the proportion of construction contract costs incurred for work performed to date against total estimated construction contract costs where the outcome of the project can be estimated reliably.

When it is probable that total construction contract costs will exceed total construction contract revenue, the expected loss is recognised as an expense immediately.

When the outcome of a construction contract cannot be estimated reliably, construction contract revenue is recognised only to the extent of construction contract costs incurred that it is probable will be recoverable and construction contract costs are recognised as an expense in the period in which they are incurred.

(d) Dividend income

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

(e) Interest income

Interest income is recognised as it accrues, using the effective interest method.

(f) Rental income

Rental income is accounted for on a straight line basis over the lease term of an ongoing lease.

(g) Management fees

Management fees are recognised when services are rendered.




4.21 Earnings per share

(a) Basic

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year.

(b) Diluted

Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential ordinary shares.

4.22 Operating segments

Operating segments are defined as components of the Group that:

(a) engage in business activities from which it could earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group);

(b) whose operating results are regularly reviewed by the chief operating decision maker of the Group in making decisions about resources to be allocated to the segment and assessing its performance; and

(c) for which discrete financial information is available.

An operating segment may engage in business activities for which it has yet to earn revenue.

The Group reports separately information about each operating segment that meets any of the following quantitative thresholds:

(a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is ten (10) per cent or more of the combined revenue, internal and external, of all operating segments.

(b) The absolute amount of its reported profit or loss is ten (10) per cent or more of the greater, in absolute amount of:

(i) the combined reported profit of all operating segments that did not report a loss; and

(ii) the combined reported loss of all operating segments that reported a loss.




4.22 Operating segments (continued)

(c) Its assets are ten (10) per cent or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if the management believes that information about the segment would be useful to users of the financial statements.

Total external revenue reported by operating segments shall constitute at least seventy five (75) percent of the revenue of the Group. Operating segments identified as reportable segments in the current financial year in accordance with the quantitative thresholds would result in a restatement of prior period segment data for comparative purposes.

4.23 Fair value measurements

The fair value of an asset or a liability, except for lease transactions is determined as 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 method adopted assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

The Group measures the fair value of an asset or a liability by taking into account the characteristics of the asset or liability if market participants would take these characteristics into account when pricing the asset or liability. The Group has considered the following characteristics when determining fair value:

(a) The condition and location of the asset; and

(b) Restrictions, if any, on the sale or use of the asset.

The fair value measurement for a non-financial asset takes into account the ability of the market participant 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.




4.23 Fair value measurements (continued)

The fair value of a financial or non-financial liability or an entity’s own equity instrument assumes that:

(a) A liability would remain outstanding and the market participant transferee would be required to fulfil the obligation. The liability would not be settled with the counterparty or otherwise extinguished on the measurement date; and

(b) An entity’s own equity instrument would remain outstanding and the market participant transferee would take on the rights and responsibilities associated with the instrument. The instrument would not be cancelled or otherwise extinguished on the measurement date.

5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs

5.1 New FRSs adopted during the financial year

The Group and Company adopted the following Standards of the FRS Framework that were issued by the Malaysian Accounting Standards Board (“MASB”) during the financial year.

Title Effective DateAmendments to FRS 119 Defined Benefit Plans: Employee

Contributions 1 July 2014

Amendments to FRSs Annual Improvements 2010-2012 Cycle 1 July 2014

Amendments to FRSs Annual Improvements 2011-2013 Cycle 1 July 2014

There is no material impact upon the adoption of these Amendments during the financial year.



5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs (continued)

5.2 New FRSs that have been issued, but only effective for annual periods beginning on or after 1 January 2016

The following are Standards of the FRS Framework that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been early adopted by the Group and the Company.

Title Effective Date

FRS 14 Regulatory Deferral Accounts 1 January 2016Amendments to FRS 10 and FRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

Amendments to FRS 11 Accounting for Acquisitions of Interests in Joint Operations 1 January 2016

Amendments to FRS 116 and FRS 138 Clarification of Acceptable Methods of Depreciation and Amortisation 1 January 2016

Amendments to FRS 127 Equity Method in Separate Financial Statements 1 January 2016

Amendments to FRSs Annual Improvements to 2012-2014 Cycle 1 January 2016

Amendments to FRS 101 Disclosure Initiative 1 January 2016Amendments to FRS 10, FRS 12 and FRS 128 Investment Entities: Applying the Consolidation Exception 1 January 2016

FRS 9 Financial Instruments (IFRS as issued by IASB in July 2014) 1 January 2018

The Group is in the process of assessing the impact of implementing these Amendments and Standards, since the effects would only be observable for future financial years.




5.3 New MFRSs that have been issued, but have yet to be adopted during the current financial year

The Group and Company are Transitioning Entities (“TE”) as defined by MASB and are expected to apply the following Standards of the Malaysian Financial Reporting Standards (“MFRS”) Framework for the financial year ending 31 December 2018.

TitleMFRS 1 First-time Adoption of Malaysian Financial Reporting StandardsMFRS 2 Share-based PaymentMFRS 3 Business CombinationsMFRS 4 Insurance ContractsMFRS 5 Non-current Assets Held for Sale and Discontinued OperationsAmendments to MFRS 5 (Annual Improvements to MFRSs 2012-2014 Cycle)MFRS 6 Exploration for and Evaluation of Mineral ResourcesMFRS 7 Financial Instruments: DisclosuresMandatory Effective Date of MFRS 9 and Transition Disclosures (Amendments to MFRS 9 (IFRS 9 issued by IASB in Nov 2009), MFRS 9 (IFRS 9 issued by IASB in Oct 2010) and MFRS 7)Amendments to MFRS 7 (Annual Improvements to MFRSs 2012-2014 Cycle)MFRS 8 Operating SegmentsMFRS 9 Financial InstrumentsMFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009) [will be superseded by MFRS 9 (IFRS 9 as issued by IASB in July 2014])MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010) [will be superseded by MFRS 9 (IFRS 9 as issued by IASB in July 2014])Mandatory Effective Date of MFRS 9 and Transition Disclosures (Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009), MFRS 9 (IFRS 9 (IFRS 9 issued by IASB in October 2010) and MFRS 7)MFRS 9 (Financial Instruments (Hedge Accounting and amendments to MFRS 9, MFRS 7 and MFRS 139) [will be superseded by MFRS 9 (IFRS 9 as issued by IASB in July 2014])MFRS 9 Financial Instruments (IFRS 9 as issued by IASB in July 2014)MFRS 10 Consolidated Financial StatementsAmendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associates or Joint Venture




5.3 New MFRSs that have been issued, but have yet to be adopted during the current financial year (continued)

The Group and Company are Transitioning Entities (“TE”) as defined by MASB and are expected to apply the following Standards of the Malaysian Financial Reporting Standards (“MFRS”) Framework for the financial year ending 31 December 2018 (continued).

TitleAmendments to MFRS 10, MFRS 12 and MFRS 128 Investment Entities: Applying the Consolidation ExceptionMFRS 11 Joint ArrangementsAmendments to MFRS 11 Accounting for Acquisitions of Interests in Joint OperationsMFRS 12 Disclosure of Interests in Other EntitiesAmendments to MFRS 10, MFRS 12 and MFRS 128 Investments Entities: Applying the Consolidation ExceptionMFRS 13 Fair Value MeasurementMFRS 14 Regulatory Deferral AccountsMFRS 15 Revenue from Contracts with CustomersMFRS 101 Presentation of Financial StatementsAmendments to MFRS 101 Disclosure InitiativeMFRS 102 InventoriesMFRS 107 Statement of Cash FlowsMFRS 108 Accounting Policies, Changes in Accounting Estimates and ErrorsMFRS 110 Events After the Reporting PeriodMFRS 112 Income TaxesMFRS 116 Property, Plant and EquipmentAmendments to MFRS 116 and MFRS 138 Clarification of Acceptable Methods of Depreciation and AmortisationAmendments to MFRS 116 and MFRS 141 Agriculture: Bearer PlantsMFRS 117 LeasesMFRS 119 Employee Benefits (revised)Amendments to MFRS 119 (Annual Improvements to MFRSs 2012-2014 Cycle)MFRS 120 Accounting for Government Grants and Disclosure of Government AssistanceMFRS 121 The Effects of Changes in Foreign Exchange Rates






Title

MFRS 123 Borrowing Costs

MFRS 124 Related Party Disclosures

MFRS 126 Accounting and Reporting by Retirement Benefit Plans

MFRS 127 Separate Financial Statements

Amendments to MFRS 127 Equity Method in Separate Financial Statements

MFRS 128 Investments in Associates and Joint Ventures

Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associates or Joint VentureMFRS 129 Financial Reporting in Hyperinflationary Economies

MFRS 132 Financial Instruments: Presentation

MFRS 133 Earnings Per Share

MFRS 134 Interim Financial Reporting

Amendments to MFRS 134 (Annual Improvements to MFRSs 2012-2014 Cycle)

MFRS 136 Impairment of Assets

MFRS 137 Provisions, Contingent Liabilities and Contingent Assets

MFRS 138 Intangible Assets

MFRS 139 Financial Instruments: Recognition and Measurement

MFRS 140 Investment Property

MFRS 141 Agriculture

Annual Improvements to MFRSs 2012 – 2014 Cycle

IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

IC Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments



5. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued)



TitleIC Interpretation 4 Determining Whether an Arrangement Contains a LeaseIC Interpretation 5 Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation FundsIC Interpretation 6 Liabilities Arising from Participating in a Specific Market-Waste Electrical and Electronic EquipmentIC Interpretation 7 Applying the Restatement Approach under MFRS 129 Financial Reporting in Hyper inflationary EconomiesIC Interpretation 9 Reassessment of Embedded DerivativesIC Interpretation 10 Interim Financial Reporting and ImpairmentIC Interpretation 12 Service Concession ArrangementsIC Interpretation 14 MFRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their InteractionIC Interpretation 16 Hedges of a Net Investment in a Foreign OperationIC Interpretation 17 Distributions of Non-cash Assets to OwnersIC Interpretation 19 Extinguishing Financial Liabilities with Equity InstrumentsIC Interpretation 20 Stripping Costs in the Production Phase of a Surface MineIC Interpretation 21 LeviesIC Interpretation 107 Introduction of the EuroIC Interpretation 110 Government Assistance – No Specific Relation to Operating ActivitiesIC Interpretation 115 Operating Leases – Incentives IC Interpretation 125 Income Taxes – Changes in the Tax Status of an Entity or its Shareholders



5. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued)



TitleIC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a LeaseIC Interpretation 129 Service Concession Arrangements: Disclosures

IC Interpretation 132 Intangible Assets – Web Site Costs

The Group is in the process of assessing the impact of implementing these Standards, Amendments and Interpretations since the effects would only be observable for the financial year ending 31 December 2018.

6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

6.1 Changes in estimates

Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Directors are of the opinion that there are no significant changes in estimates during the reporting period and at the end of the reporting period.

6.2 Critical judgements made in applying accounting policies

The following are judgements made by management in the process of applying the Group’s accounting policies that have a significant effect on the amounts recognised in the financial statements.

(a) Classification of leasehold land

The Group has assessed and classified leasehold land of the Group as finance leases based on the extent to which risks and rewards incidental to ownership of the land resides with the Group arising from the lease term. Consequently, the Group has classified the unamortised upfront payment for leasehold land as a finance lease in accordance with FRS 117 Leases.



6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

6.2 Critical judgements made in applying accounting policies (continued)

(b) Contingent liabilities

The determination and treatment of contingent liabilities is based on the Directors’ and management’s view of the expected outcome of the contingencies for matters in the ordinary course of business.

(c) Classification of non-current bank borrowings

Term loan agreements entered into by the Group include repayment on demand clauses at the discretion of the financial institutions. The Group believes that in the absence of a default being committed by the Group, these financial institutions are not entitled to exercise their rights to demand for repayment. Accordingly, the carrying amount of the term loans have been classified between current and non-current liabilities based on their repayment period.

(d) Contingent liabilities on corporate guarantees

The Directors are of the view that the chances of the financial institutions to call upon the corporate guarantees are remote.

6.3 Key sources of estimation uncertainty The following are key assumptions concerning the future and other key sources of estimation

uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(a) Impairment of goodwill on consolidation

The Group determines whether goodwill on consolidation is impaired at least on an annual basis. This requires an estimation of the value-in-use of the subsidiaries to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from the subsidiaries and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

Significant judgement is required in the estimation of the present value of future cash flows generated by the subsidiaries, which involves uncertainties and is significantly affected by assumptions used and judgement made regarding estimates of future cash flows and discount rates. Changes in assumptions could significantly affect the results of the Group’s assessment for impairment of goodwill. The assumptions used are disclosed in Note 8 to the financial statements.




6.3 Key sources of estimation uncertainty (continued)

(b) Impairment of assets

The Group determines whether an asset is impaired by evaluating the extent to which the recoverable amount of an asset is less than its carrying amount. This evaluation is subject to changes such as market performance, economic and political situation of the country.

Recoverable amount is measured at the higher of fair value less cost to sell for that asset and its value in use. Value in use is the net present value of the projected future cash flows derived from that asset discounted at an appropriate discount rate. For such discounted cash flow method, it involves the use of estimated future results and a set of assumptions to reflect its income and cash flows. Judgement has been used to determine the discount rate for the cash flows and the future growth of the business.

(c) Impairment of investments in subsidiaries and a joint venture and amounts owing by subsidiaries and a joint venture

The Company reviews the investments in subsidiaries and a joint venture for impairment when there is an indication of impairment and assesses the impairment of receivables on the amounts owing by subsidiaries and a joint venture when events or changes in circumstances indicate that the carrying amounts may not be recoverable.

The recoverable amounts of the investments in subsidiaries and a joint venture and amounts owing by subsidiaries and a joint venture are assessed by reference to the value in use of the respective subsidiaries and the joint venture.

The value in use is the net present value of the projected future cash flows derived from

the business operations of the respective subsidiaries and joint venture discounted at an appropriate discount rate. For such discounted cash flow method, it involves the use of estimated future results and a set of assumptions to reflect their income and cash flows. Judgement had also been used to determine the discount rate for the cash flows and the future growth of the businesses of the subsidiaries and joint venture.

(d) Depreciation of property, plant and equipment

The Group estimates the useful lives of property, plant and equipment at the time the assets are acquired based on historical experience, the expected usage, wear and tear of the assets and technical obsolescence arising from changes in the market demands or service output of the assets. The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectations differ from previous estimates due to changes in the factors mentioned above. Changes in these factors could impact the useful lives and the residual values of these assets; therefore future depreciation charges could be revised.





(e) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that future taxable profits would be available against which the losses and capital allowances could be utilised. Significant management judgement is required to determine the amount of deferred tax assets that could be recognised, based on the likely timing and extent of future taxable profits together with future tax planning strategies.

(f) Impairment of receivables

The Group makes impairment of receivables based on an assessment of the recoverability of receivables. Impairment is applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyse historical bad debts, receivable concentration, receivable creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of impairment of receivables. Where expectations differ from the original estimates, the differences would impact the carrying amount of receivables.

(g) Fair values of borrowings

The fair values of borrowings are estimated by discounting future contractual cash flows at the current market interest rates available to the Group for similar financial instruments. Sensitivity analysis of the effects of interest rate risk has been disclosed in Note 33 to the financial statements.

(h) Write down for obsolete or slow moving inventories

The Group writes down its obsolete or slow moving inventories based on an assessment of their estimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyses sales trend and current economic trends when making this judgement to evaluate the adequacy of the write down for obsolete or slow moving inventories. Where expectations differ from the original estimates, the differences would impact the carrying amount of inventories.





(i) Property development

The Group recognises property development revenue and expenses in the statement of profit or loss and other comprehensive income by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects. Total property development costs also includes an estimation of variation works that are recoverable from customers. In making the judgement, the Group evaluates the stage of completion based on past experience and by relying on the work of specialists.

(j) Impairment of property development costs

The Group determines whether there is any impairment for property development costs as at the end of each reporting period. This requires the management to estimate the recoverable amount of property development costs.

(k) Construction contracts

The Group recognises construction contract revenue and expenses in the statement of profit or loss and other comprehensive income by using the stage of completion method. The stage of completion is determined on the proportion of construction contract costs incurred for work performed to date against total estimated construction contract costs where the outcome of the project can be estimated reliably.

Significant judgement is required in determining the stage of completion, the extent of the progress billings issued, the estimated total construction contract revenue and costs, as well as the recoverability of the construction project revenue and the determination of liquidated and ascertained damages. Total construction contract revenue also includes an estimation of variation works that are recoverable from customers. In making the judgement, the Company evaluates based on past experience and by relying on the work of specialists.





(l) Income taxes

The Group is subject to income taxes of different jurisdictions. Significant judgement is required in determining the capital allowances and deductibility of certain expenses based on the interpretation of tax laws and legislations during the estimation of the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognised liabilities for tax based on estimates of assessment of the tax liability due. Where the final tax outcome is different from the amounts that were initially recorded, such differences would impact the income tax and deferred income tax provisions, where applicable, in the period in which such determination is made.

(m) Classification of joint arrangements

For all joint arrangements structured in separate vehicles, the Group assesses the substance of the joint arrangement in determining whether it is classified as a joint venture or a joint operation. This assessment requires the Group to consider whether there are any factors that give the Group rights to the net assets of the joint arrangements (in which case it is classified as a joint venture), or rights to specific assets, liabilities, expenses, and revenues (in which case it is classified as a joint operation). These factors include:

(i) Structure; (ii) Legal form; (iii) Contractual agreement; and (iv) Other facts and circumstances.

Upon consideration of these factors, the Group has determined that all of its joint arrangements structured through separate vehicles provide rights to the net assets and are therefore, classified as joint ventures.

(n) Fair value measurements

The financial and non-financial assets and liabilities that are measured subsequent to initial recognition at fair value are grouped into Level 1 to Level 3 based on the degree to which the fair value inputs are observable:

(i) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

(ii) Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and





(n) Fair value measurements (continued)

The financial and non-financial assets and liabilities that are measured subsequent to initial recognition at fair value are grouped into Level 1 to Level 3 based on the degree to which the fair value inputs are observable (continued):

(iii) Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The classification of an item into the above levels is based on the lowest level of the inputs used in the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.

The Group measures financial instruments in the financial statements at fair value as disclosed in Note 32 to the financial statements.

7. PROPERTY, PLANT AND EQUIPMENT

DepreciationBalance charge for Balance

as at the financial Translation Reclassi- as atGroup 1.1.2015 Additions Disposals Written off year adjustments fications 31.12.2015

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

Carrying amount

Freehold land 1,009 - - - - - - 1,009Long-term leasehold land 3,560 1,993 - - (88) - - 5,465Buildings 28,631 94 - (28) (1,346) 1,721 167 29,239Plant and machinery 7,830 471 (12) (63) (2,364) 498 2,281 8,641Furniture, fittings and office equipment 1,094 85 - (109) (216) 30 17 901Motor vehicles 3,336 255 (244) (5) (910) 20 - 2,452Capital work-in progress 467 2,227 - - - 22 (2,465) 251

45,927 5,125 (256) (205) (4,924) 2,291 - 47,958



7. PROPERTY, PLANT AND EQUIPMENT (continued)

[---------------------------------------- At 31.12.2015 ---------------------------------------]Accumulated Carrying

Cost depreciation amountRM’000 RM’000 RM’000

Freehold land 1,009 - 1,009Long-term leasehold land 6,859 (1,394) 5,465Buildings 38,673 (9,434) 29,239Plant and machinery 47,327 (38,686) 8,641Furniture, fittings and office equipment 2,885 (1,984) 901Motor vehicles 4,836 (2,384) 2,452Capital work-in-progress 251 - 251

101,840 (53,882) 47,958


as at the financial Translation Reclassi- as atGroup 1.1.2014 Additions year adjustments fications 31.12.2014

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000Carrying amount

Freehold land 1,009 - - - - 1,009Long-term leasehold land 3,642 - (82) - - 3,560Buildings 21,620 6,127 (864) 573 1,175 28,631Plant and machinery 7,583 1,289 (2,041) 228 771 7,830Furniture, fittings and office equipment 700 509 (129) 14 - 1,094Motor vehicles 1,356 2,372 (399) 7 - 3,336Capital work-in-progress 5 2,391 - 17 (1,946) 467

35,915 12,688 (3,515) 839 - 45,927

[------------------------------------------ At 31.12.2014 ---------------------------------------]Accumulated Carrying


Freehold land 1,009 - 1,009Long-term leasehold land 4,866 (1,306) 3,560Buildings 36,118 (7,487) 28,631Plant and machinery 42,277 (34,447) 7,830Furniture, fittings and office equipment 2,953 (1,859) 1,094Motor vehicles 5,431 (2,095) 3,336Capital work-in-progress 467 - 467

93,121 (47,194) 45,927





as at the financial as atCompany 1.1.2015 Additions year 31.12.2015

RM’000 RM’000 RM’000 RM’000Carrying amount

Furniture, fittings and office equipment 4 5 (1) 8Motor vehicles 1,174 - (290) 884

1,178 5 (291) 892

[------------------------------------------- At 31.12.2015 --------------------------------------------]Accumulated Carrying


Furniture, fittings and office equipment 9 (1) 8Motor vehicles 1,220 (336) 884

1,229 (337) 892


as at the financial as atCompany 1.1.2014 Additions year 31.12.2014

RM’000 RM’000 RM’000 RM’000Carrying amount

Furniture, fittings and office equipment - 4 - 4Motor vehicles - 1,220 (46) 1,174

- 1,224 (46) 1,178

[--------------------------------------------- At 31.12.2014 -------------------------------------------]Accumulated Carrying


Furniture, fittings and office equipment 4 - 4Motor vehicles 1,220 (46) 1,174

1,224 (46) 1,178




(a) As at 31 December 2015, freehold land, long-term leasehold land, buildings and certain plant and machinery of the Group with a carrying amount of RM34,848,000 (2014: RM25,837,000) are pledged to licensed banks as security for credit facilities granted to the Group as disclosed in Note 19 to the financial statements.

(b) Included in property, plant and equipment of the Group and of the Company are motor vehicles acquired under hire purchase arrangements with carrying amounts of RM1,931,000 (2014: RM2,508,000) and RM884,000 (2014: RM1,174,000) respectively.

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

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Purchase of property, plant and equipment 5,125 12,688 5 1,224Financed by hire purchase arrangements (210) (2,043) - (1,062)Cash payments on purchase of property, plant and equipment 4,915 10,645 5 162

(d) During the financial year, land premium was paid for an extension of 60 years on 12 February 2015 and subject to perfection of the documentation by authorities.

8. INTANGIBLE ASSETS

AmortisationBalance charge for Balance

as at the financial Translation as atGroup 1.1.2015 Additions year adjustment 31.12.2015

RM’000 RM’000 RM’000 RM’000 RM’000Carrying amount

Goodwill 1,233 - - - 1,233Computer software 113 252 (74) 8 299License 3 - (1) - 2

1,349 252 (75) 8 1,534



8. INTANGIBLE ASSETS (continued)

[-------------------------- At 31.12.2015 -------------------------]Accumulatedamortisation Carrying

Cost and impairment amountRM’000 RM’000 RM’000

Goodwill 1,924 (691) 1,233Computer software 614 (315) 299License 21 (19) 2

2,559 (1,025) 1,534

AmortisationBalance charge for Balance

as at the financial Translation as atGroup 1.1.2014 Additions year adjustment 31.12.2014

RM’000 RM’000 RM’000 RM’000 RM’000Carrying amount

Goodwill 1,233 - - - 1,233Computer software 73 68 (31) 3 113License 4 - (1) - 3

1,310 68 (32) 3 1,349

[--------------------------- At 31.12.2014 --------------------------]Accumulatedamortisation Carrying

Cost and impairment amountRM’000 RM’000 RM’000

Goodwill 1,924 (691) 1,233Computer software 337 (224) 113License 18 (15) 3

2,279 (930) 1,349

(a) Goodwill

Group2015 2014

RM’000 RM’000

Goodwill, gross 1,924 1,924Less: Impairment loss (691) (691)

Goodwill, net 1,233 1,233



8. INTANGIBLE ASSETS (continued)

(a) Goodwill (continued)

The carrying amount of goodwill arising from the acquisition of the respective subsidiaries allocated to the Group’s CGU is as follows:

Group2015 2014

RM’000 RM’000

Manufacturing of webbings, yarn and furniture components 1,233 1,233

(a) For the purpose of impairment testing, the recoverable amount of the CGU is determined based on a “value-in-use” calculation. The value-in-use of the CGU is determined by discounting the future cash flows to be generated from continuing use of the CGU. The value-in-use is derived based on management’s cash flow projections for three (3) financial years from 2016 to 2018.

The key assumptions used in the value-in-use calculations are as follows:

(i) The anticipated average annual revenue growth rates used in the cash flow projections of the CGU ranged from 10% to 55% (2014: 5% to 16%) per annum for the years 2016 to 2018.

(ii) Profit margins are projected based on the historical profit margin achieved for the products.

(iii) Pre-tax discount rate of 8.20% (2014: 8.20%) was applied over the projection periods in determining the recoverable amount of the CGU. The discount rate used is pre-tax and reflects the overall weighted average cost of capital of the Group.

(b) Sensitivity to changes in assumptions

The management believes that a reasonably possible change in the key assumptions on which management has based its determination of the CGU’s recoverable amount would not cause the CGU’s carrying amount to further exceed its recoverable amount.



9. INVESTMENTS IN SUBSIDIARIES

Company2015 2014

RM’000 RM’000

Unquoted equity shares - at cost 48,972 43,972Less: Impairment losses (2,545) (2,230)

46,427 41,742

The details of the subsidiaries are as follows:

Interest in equity held byCountry of Company Subsidiaries

Name of company incorporation 2015 2014 2015 2014 Principal activities% % % %

Furniweb Manufacturing Malaysia 100 100 - - Manufacture and sale of upholstery webbings, covered elastic yarn and rigid webbings

Sdn. Bhd.^

Texstrip Manufacturing Malaysia 100 100 - - Manufacture and Sdn. Bhd.^ marketing of rubber

strips and sheets

Webtex Trading Malaysia 100 100 - - Trading of machinery and accessories and acts as commission agent

Sdn. Bhd.^

Premier Gesture Sdn. Bhd.^ Malaysia 100 100 - - Investment holding company

Furniweb (Vietnam) Vietnam 100 100 - - Manufacture and sale of upholstery webbings and covered elastic yarn

Shareholding Company*

First Elastic Corporation Malaysia 100 100 - - Dormant (M) Sdn.Bhd.^

Subsidiaries of Furniweb Manufacturing Sdn. Bhd.Syarikat Sri Kepong Sdn. Bhd.^

Malaysia - - 100 100 Property holding company

Furniweb Safety Malaysia - - 100 100 Manufacture and sale Webbing Sdn. Bhd.^ of safety webbing



9. INVESTMENTS IN SUBSIDIARIES (continued)

The details of the subsidiaries are as follows (continued):Interest in equity held by

Country of Company SubsidiariesName of company incorporation 2015 2014 2015 2014 Principal activities

% % % %

Subsidiaries of Premier Gesture Sdn. Bhd.Premier De Muara Sdn. Bhd. ^

Malaysia - - 60 60 Property development and related activities

Premier Construction Sdn. Bhd. ^

Malaysia - - 100 100 Construction

Premier PMC Sdn. Bhd. ^

Malaysia - - 100 100 Property development and related activities

Subsidiaries of Furniweb (Vietnam) Shareholding CompanyPremier Elastic Webbing & Accessories (Vietnam) Co. Ltd.*

Vietnam 43 43 57 57 Manufacture and sale of narrow fabrics

Furnitech Components (Vietnam) Co. Ltd.*

Vietnam - - 82.01 82.01 Manufacture and sale of metal components for furniture industry

^ Subsidiaries audited by BDO, Malaysia * Subsidiaries audited by a member firm of BDO International

(a) Impairment losses on investments in subsidiaries amounting to RM315,000 relating to a subsidiary, Webtex Trading Sdn. Bhd. has been recognised during the financial year due to its recoverable amount being lower than its carrying amount as a result of streamlining business operations.

(b) On 30 September 2015, the Company subscribed for an additional 5,000,000 ordinary shares of RM1.00 each at a total consideration of RM5,000,000 in a wholly-owned subsidiary, Premier Gesture Sdn. Bhd. (“PGSB”) by way of capitalising the amount owing by PGSB. Consequently, there was no change in the effective equity interest held by the Company in PGSB.




(c) The subsidiaries of the Group that have non-controlling interests (“NCI”) are as follows:

Furnitech Components

(Vietnam) Co. Ltd.

Premier De Muara Sdn. Bhd. Total

2015

NCI percentage of ownership interest and voting interest 17.99% 40.00%

Carrying amount of NCI (RM’000) 184 (1,942) (1,758)

Loss allocated to NCI (RM’000) 259 1,186 1,445

2014

NCI percentage of ownership interest and voting interest 17.99% 40.00%

Carrying amount of NCI (RM’000) 401 (756) (355)

Loss allocated to NCI (RM’000) 121 857 978

(d) The summarised financial information before intra-group elimination of the subsidiaries that have NCI as at the end of each reporting period is as follows:


(Vietnam) Co. Ltd.

Premier De Muara Sdn. Bhd.

2015 RM’000 RM’000

Assets and liabilities

Non-current assets 4,110 24Current assets 4,047 159,759Non-current liabilities - (73,028)Current liabilities (7,133) (91,611)

Net assets/(liabilities) 1,024 (4,856)

Results

Revenue 4,719 1,929Loss for the financial year (1,442) (2,964)Total comprehensive loss (1,442) (2,964)

Cash flows from/(used in) operating activities 531 (18,808)Cash flows (used in)/from investing activities (591) 13,591Cash flows (used in)/from financing activities (87) 5,091

Net decrease in cash and cash equivalents (147) (126)




(d) The summarised financial information before intra-group elimination of the subsidiaries that have NCI as at the end of each reporting period is as follows (continued):


(Vietnam) Co. Ltd.

Premier De Muara

Sdn. Bhd.2014 RM’000 RM’000

Assets and liabilities

Non-current assets 3,432 29Current assets 5,206 135,107Non-current liabilities - (61,514)Current liabilities (6,407) (75,514)

Net assets/(liabilities) 2,231 (1,892)

Results

Revenue 5,270 -Loss for the financial year (496) (3,658)Total comprehensive loss (496) (3,658)

Cash flows used in operating activities (1,772) (71,401)Cash flows (used in)/from investing activities (1,297) 28,077Cash flows from financing activities 2,758 45,875

Net (decrease)/increase in cash and cash equivalents (311) 2,551

10. INVESTMENT IN A JOINT VENTURE

Group2015 2014

RM’000 RM’000

Unquoted equity shares, at cost 570 570Share of post acquisition reserves, net of dividends received 843 442

1,413 1,012



10. INVESTMENT IN A JOINT VENTURE (continued)

The details of the joint venture are as follows:

Interest in equity held by

subsidiaryCountry ofincorporationName of company 2015 2014 Principal activities

% %

Trunet (Vietnam) Co. Ltd.* Vietnam 50 50 Manufacture and marketing of meat netting and rootball netting

* Audited by a member firm of BDO International

Trunet (Vietnam) Co. Ltd., the only joint venture in which the Group participates, is an unlisted separate entity. The contractual arrangement provides the Group with only the rights to the net assets of the joint arrangement, with the rights to the assets and obligation for liabilities of the joint arrangement resting primarily with Trunet (Vietnam) Co. Ltd..

This joint arrangement has been classified as a joint venture and has been included in the consolidated financial statements using the equity method.

The summarised financial information of the joint venture, adjusted for any differences in accounting policies, and a reconciliation to the carrying amount in the consolidated financial statements, are as follows:

Group2015 2014

RM’000 RM’000Assets and liabilities

Non-current assets 293 76Current assets 2,758 3,407Current liabilities (226) (1,459)

Net assets 2,825 2,024

Proportion of the ownership of the Group 50% 50%

Carrying amount of the investment in a joint venture 1,413 1,012



10. INVESTMENT IN A JOINT VENTURE (continued)

The summarised financial information of the joint venture, adjusted for any differences in accounting policies, and a reconciliation to the carrying amount in the consolidated financial statements, are as follows (continued):

Group2015 2014

RM’000 RM’000Results

Revenue 3,108 2,538Cost of sales (2,105) (1,814)

Gross profit 1,003 724Other operating income 108 31Other operating expenses (560) (400)Interest income 4 8

Profit before tax 555 363Tax expense (85) (56)

Profit after tax 470 307

Other comprehensive income:

Foreign currency translations 332 170

Total comprehensive income 802 477

Share of results by the Group for the financial year

Share of profit by the Group for the financial year 235 154Share of other comprehensive income by the Group for the financial year 166 85

401 239Other information

Dividends received (703) (159)Dividends receivable - (703)

The joint venture had no contingent liabilities and capital commitments as at 31 December 2015 and 31 December 2014.



11. DEFERRED TAX (ASSETS)/LIABILITIES

(a) The deferred tax (assets)/liabilities are made up of the following:

Group2015 2014

RM’000 RM’000

Balance as at 1 January 2015/2014 995 1,124Recognised in profit or loss (Note 26) 169 (129)

Balance as at 31 December 2015/2014 1,164 995

Presented after appropriate offsetting:

Deferred tax assets, net (15) (36)Deferred tax liabilities, net 1,179 1,031

1,164 995

(b) The components and movements of deferred tax (assets)/liabilities during the financial year are as follows:

Deferred tax liabilities of the Group

Property,plant and Unabsorbed

equipment tax losses Others TotalRM’000 RM’000 RM’000 RM’000

At 1 January 2015 1,609 (231) (347) 1,031Recognised in profit or loss (352) 231 269 148

At 31 December 2015 1,257 - (78) 1,179

At 1 January 2014 1,635 (243) (248) 1,144Recognised in profit or loss (26) 12 (99) (113)

At 31 December 2014 1,609 (231) (347) 1,031



11. DEFERRED TAX (ASSETS)/LIABILITIES (continued)

(b) The components and movements of deferred tax (assets)/liabilities during the financial year are as follows (continued) :

Deferred tax assets of the Group

Otherdeductibletemporary

differences TotalRM’000 RM’000

At 1 January 2015 (36) (36)Recognised in profit or loss 21 21

At 31 December 2015 (15) (15)

At 1 January 2014 (20) (20)Recognised in profit or loss (16) (16)

At 31 December 2014 (36) (36)

(c) The amounts of temporary differences for which no deferred tax assets have been recognised in the statements of financial position are as follows:

Group2015 2014

RM’000 RM’000

Unrecognised tax losses- Local subsidiaries 4,287 1,591- Foreign subsidiaries* 4,710 4,153

8,997 5,744



11. DEFERRED TAX (ASSETS)/LIABILITIES (continued)

(c) The amounts of temporary differences for which no deferred tax assets have been recognised in the statements of financial position are as follows (continued):

* The unrecognised tax losses of foreign subsidiaries amounting to approximately VND26,548,874,000 equivalent to RM4,710,000 (2014: VND23,411,050,000 equivalent to RM4,153,000) are allowed to be carried forward to offset future taxable profits up to a maximum of five (5) years. Included in the brought forward unrecognised tax losses of foreign subsidiaries is an amount of approximately VND3,017,788,000 equivalent to RM535,000, which expired in the current financial year.

Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that future taxable profit of the subsidiaries will be available against which the deductible temporary differences can be utilised.

The deductible temporary differences other than unrecognised tax losses of foreign subsidiaries do not expire under the current tax legislation.

12. TRADE AND OTHER RECEIVABLES

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Non-current

Amounts owing by subsidiaries - - 39,945 3,097

Current

Trade receivables

Third parties 18,671 16,173 - -Retention sums 2,726 585 - -Amount owing by a joint venture 22 - - -

21,419 16,758 - -Less: Impairment loss - third parties (135) (126) - -

21,284 16,632 - -



12. TRADE AND OTHER RECEIVABLES (continued)

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000Other receivables

Amounts owing by subsidiaries - - 7,759 41,187Amount owing by a joint venture 95 7 - -Dividends receivable from- subsidiaries - - 799 8,695- a joint venture - 703 - -Other receivables 1,039 981 61 59Deposits 382 526 1 1

1,516 2,217 8,620 49,942

Loans and receivables 22,800 18,849 8,620 49,942

Prepayments 1,473 1,720 47 13Amounts due from customers for contract works (Note 14) - 1,525 - -

Total current 24,273 22,094 8,667 49,955

Grand total 24,273 22,094 48,612 53,052

(a) Trade receivables are non-interest bearing and the normal trade credit terms granted by the Group range from twenty one (21) days to ninety (90) days (2014: 30 days to 90 days) from date of invoice. They are recognised at their original invoice amounts, which represent their fair values on initial recognition. The amount owing by a joint venture in trade receivables are subject to trade terms.

(b) The non-trade amount owing by a joint venture is unsecured, interest-free and payable upon demand in cash and cash equivalents.




(c) (i) The non-current amount owing by a subsidiary of RM2,394,000 (2014: RM3,097,000) represents a loan, which is unsecured, bears interest at 4% (2014: 4%) per annum and has fixed repayment terms of five (5) years, which is payable in cash and cash equivalents.

(ii) The non-current amount owing by a subsidiary of RM37,551,000 (2014: Nil) represents a loan, which is unsecured, bears interest at 6.36% (2014: Nil) per annum and is payable in cash and cash equivalents on 31 December 2019 or upon issuance of certificate for the completion for the development project as disclosed in Note 13 to the financial statements, whichever is earlier.

(d) (i) Included in amounts owing by subsidiaries in other receivables is the current portion of RM3,084,000 (2014: RM2,310,000) of the above mentioned loan in Note 12(c)(i); which is unsecured, bears interest at 4% (2014: 4%) per annum and is payable in cash and cash equivalents within one (1) year.

(ii) The remaining amounts owing by subsidiaries represent advances and payments made on behalf which are unsecured, interest-free and payable upon demand in cash and cash equivalents.

(e) The retention sums are unsecured, interest-free and are expected to be collected as follows:

Group2015 2014

RM’000 RM’000

Within one (1) year 1,363 -Within two (2) to three (3) years 1,363 585

2,726 585

(f) The currency exposure profile of trade and other receivables (exclude prepayments) are as follows:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 7,077 5,930 40,754 45,677United States Dollar 10,122 9,100 7,012 6,667Vietnamese Dong 5,332 4,937 799 695Pound Sterling 102 106 - -Euro 167 301 - -

22,800 20,374 48,565 53,039




(g) The ageing analysis of trade receivables of the Group are as follows:

Group2015 2014

RM’000 RM’000

Neither past due nor impaired 17,801 16,019Past due, not impaired- 91 to 120 days 3,437 1,917- 121 to 150 days - 140- 151 to 180 days - -- 181 to 210 days 1 22- More than 210 days 45 59

3,483 2,138Past due and impaired 135 126

21,419 18,283

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the trade receivables of the Group that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM3,483,000 (2014: RM2,138,000) that are past due at the end of the reporting period but not impaired. Trade receivables of the Group that are past due but not impaired are unsecured in nature. The Group closely monitors the financial standing of these counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.




(g) The ageing analysis of trade receivables of the Group are as follows: (continued)

Receivables that are past due and impaired

Trade receivables of the Group that are past due and impaired at the end of the reporting period are as follows:

Individually impaired2015 2014

Group RM’000 RM’000

Trade receivables, gross 135 126Less: Impairment loss (135) (126)

- -

The reconciliation of movement in the impairment loss are as follows:

Group2015 2014

RM’000 RM’000

At 1 January 126 68Charge for the financial year (Note 25) - 64Written off - (8)Reversal of impairment losses (Note 25) - (1)Exchange differences 9 3

At 31 December 135 126

Trade receivables that are individually determined to be impaired at the end of the reporting period relate to those debtors that exhibit significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

(h) Information on financial risks of trade and other receivables is disclosed in Note 33 to the financial statements.



13. PROPERTY DEVELOPMENT COSTS

Group2015 2014

RM’000 RM’000

Property development costs at beginning of year:- leasehold land 123,389 -- development costs 5,079 -

128,468 -

Costs incurred during the year:- leasehold land - 123,389- development costs 19,142 5,079

19,142 128,468

Costs recognised in profit or loss during the year:- leasehold land (338) -- development costs (975) -

(1,313) -

Property development costs at end of year:- leasehold land 123,389 123,389- development costs 24,221 5,079- accumulated cost recognised in profit or loss (1,313) -

146,297 128,468

Leasehold land

The leasehold land under development is provided by Almaharta Sdn. Bhd. (“ASB”), a third party, pursuant to the Joint Venture Agreement (“JVA”) dated 31 December 2013 for the development in Wilayah Persekutuan Kuala Lumpur.

Pursuant to the JVA, ASB agreed to receive the purchase consideration of the leasehold land on a deferred payment basis progressively subject to the fulfilment of the conditions precedent contained in the JVA by 31 March 2014.

A refundable sum of RM10,000,000 was paid by the Group to ASB upon execution of the JVA in the financial year ended 31 December 2013. The refundable sum was transferred to property development costs in the previous financial year.



13. PROPERTY DEVELOPMENT COSTS (continued)

Leasehold land (continued)

In the previous financial year, the Group and ASB further extended the conditions precedent period of the JVA until 31 July 2014, whereby all conditions precedent in accordance to the JVA had been fulfilled on 30 July 2014. The JVA is deemed unconditional with effect from 30 July 2014.

Upon fulfilling the conditions precedent on 30 July 2014, a further sum of RM15,915,000 was paid to ASB as at 31 December 2014. This amount represented the second instalment and partial payment of the third instalment in accordance with the terms of the JVA.

During the financial year, the Group paid RM1,585,000 as full settlement of the third instalment in accordance with terms of the JVA.

The Group has accrued the remaining amount of RM44,733,000 (2014: RM47,474,000) payable to ASB for the purchase consideration of the leasehold land as disclosed in Note 21(d) to the financial statements.

Included in property development costs is interest expense of RM3,094,000 (2014: RM1,304,000) capitalised during the financial year at 6.36% (2014: 6.37%) per annum.

The long-term leasehold land of the Group together with development costs with a total carrying amount of RM146,297,000 (2014: RM128,468,000) have been pledged to a licensed bank for banking facilities granted to the Group as disclosed in Note 19 to the financial statements.

14. AMOUNTS DUE (TO)/FROM CUSTOMERS FOR CONTRACT WORKS

Group2015 2014

RM’000 RM’000

Construction contract costs 36,669 6,709Profit attributable to work performed to-date 9,228 828

45,897 7,537Less: Progress billings (49,338) (6,012)

(3,441) 1,525



14. AMOUNTS DUE (TO)/FROM CUSTOMERS FOR CONTRACT WORKS (continued)

The costs incurred to date on construction contract include the following charges made during the financial year:

Group2015 2014

RM’000 RM’000

Employee benefits 1,161 240Rental expenses 1,323 546

2,484 786

15. INVENTORIES

Group2015 2014

RM’000 RM’000At cost

Raw materials 10,247 9,104Work-in-progress 4,315 3,657Manufactured inventories 5,610 5,046Other consumables 1,495 1,392

21,667 19,199At net realisable value

Raw materials 98 1,476Work-in-progress 144 131Manufactured inventories 126 1,132

368 2,739

22,035 21,938

During the financial year, inventories of the Group recognised as cost of sales amounted to RM37,276,000 (2014: RM40,811,000). Inventories written down during the financial year amounted to RM861,000 (2014: RM247,000) and are included in cost of sales.

The Group reversed RM2,000 (2014: RM469,000) in respect of inventories written down in previous financial years, which were subsequently not required as the Group was able to sell those inventories above their carrying amounts.



16. CASH AND BANK BALANCES

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 18,993 11,772 211 182Deposits placed with financial institutions 5,064 4,311 8 8

24,057 16,083 219 190

(a) Included in the Group’s cash and bank balances is an amount of RM509,000 (2014: Nil) held under the Housing Development Account pursuant to Section 7A of Housing Development (Control and Licensing) Act, 1966, as amended by the Housing Developers (Housing Development Account) (Amendment) Regulations, 2002.

(b) Deposits placed with financial institutions of the Group and of the Company have maturity periods ranging from 7 days to 365 days (2014: 7 days to 365 days) and 7 days (2014: 7 days) respectively, with interest rates ranging from 0.35% to 6.00% (2014: 0.05% to 6.00%) per annum and 3.3% (2014: 3.2%) per annum respectively.

(c) The currency exposure profile of cash and bank balances are as follows:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 8,676 7,045 16 97United States Dollar 14,587 6,159 203 93Vietnamese Dong 712 1,362 - -Pound Sterling 10 83 - -Euro 57 1,299 - -Australian Dollar 14 134 - -Chinese Renminbi 1 1 - -

24,057 16,083 219 190



16. CASH AND BANK BALANCES (continued)

(d) For the purpose of the statements of cash flows, cash and cash equivalents comprise the following as at the end of each reporting period:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Cash and bank balances

Cash and bank balances 18,993 11,772 211 182Deposits placed with financial institutions 5,064 4,311 8 8

As reported in statements of financial position 24,057 16,083 219 190

Less:Bank overdraft (Note 19) (648) - - -Deposits placed with financial institutions with original maturity of more than three (3) months (28) (25) - -Restricted cash (2,638) (2,567) - -

As reported in statements of cash flows 20,743 13,491 219 190

(e) Restricted cash of RM2,638,000 (2014: RM2,567,000) represents deposits which are maintained in a designated Debt Service Reserve Account with a licensed bank in connection with banking facilities granted to the Group as disclosed in Note 19 to the financial statements.

(f) Information on financial risks of cash and cash equivalents is disclosed in Note 33 to the financial statements.



17. SHARE CAPITAL AND TREASURY SHARES

Group and Company2015 2014

Number Numberof shares of shares

’000 RM’000 ’000 RM’000Ordinary shares of RM0.50 each:

Authorised:Balance as at 1 January 2,000,000 1,000,000 200,000 100,000Created during the year - - 1,800,000 900,000

Balance as at 31 December 2,000,000 1,000,000 2,000,000 1,000,000

Issued and fully paid:Balance as at 1 January 145,062 72,531 90,742 45,371Issued for cash pursuant to rights issue - - 54,320 27,160

Balance as at 31 December 145,062 72,531 145,062 72,531

(a) The owners of the parent are entitled to receive dividends as and when declared by the Company and are entitled to one (1) vote per ordinary share at meetings of the Company. All ordinary shares rank pari passu with regard to the Company’s residual assets.

(b) Of the total 145,062,500 (2014: 145,062,500) issued and fully paid ordinary shares of RM0.50 each as at 31 December 2015, 208,900 (2014: 208,900) ordinary shares of RM0.50 each bought for RM87,000 (2014: RM87,000) are held as treasury shares by the Company. The number of outstanding shares in issue after the share buy-back is 144,853,600 (2014: 144,853,600) ordinary shares of RM0.50 each as at 31 December 2015.

(c) Warrants 2014/2019

On 11 July 2014, the Company issued 54,320,100 free detachable Warrants pursuant to the Rights Issue with Warrants Exercise on the basis of one (1) Warrant for every one (1) Rights Shares subscribed.

The Warrants are constituted by the Deed Poll dated 2 June 2014 (‘Deed Poll’).

The salient features of the Warrants are as follows:

(i) Each Warrant entitles the registered holder, at any time during the Exercise Period, to subscribe for one (1) new ordinary share of the Company of RM0.50 each at the exercise price;



17. SHARE CAPITAL AND TREASURY SHARES (continued)

(c) Warrants 2014/2019 (continued)

The salient features of the Warrants are as follows (continued):

(ii) The exercise price for the Warrants was fixed at RM0.75 per Warrant;

(iii) The Warrants may be exercised at any time within a period of five (5) years commencing from and including the date of issuance of the Warrants dated 7 July 2014 and ending at the expiry date to be dated 6 July 2019 (“Exercise Period”). Any Warrants not exercised during the Exercise Period will thereafter lapse and cease to be valid for any purpose; and

(iv) The new shares to be issued arising from the exercise of the Warrants will, upon allotment and issuance, rank pari passu in all respects with then existing shares, save and except that the said new shares will not be entitled to any dividends, rights, allotments and/or other distributions that may be declared, made or paid, prior to the date of allotment of the said new shares.

As at 31 December 2015, unexercised warrants of the Company are as follows:

Date issued Exercise price No. of warrants over Warrantordinary shares expiry date

7 July 2014 RM0.75 54,320,100 6 July 2019

No warrants were exercised into ordinary shares during the financial year ended 31 December 2015.

18. RESERVES

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Non-distributable:

Share premium 68 68 68 68Warrants reserve 4,346 4,346 4,346 4,346Exchange translation reserve (1,218) (5,131) - -

3,196 (717) 4,414 4,414Distributable:

Retained earnings 41,197 36,571 15,339 12,970

44,393 35,854 19,753 17,384



18. RESERVES (continued)

(a) Warrants reserve

The warrants reserve arose from a renounceable rights issue of 54,320,100 new ordinary shares of RM0.50 each together with 54,320,100 free new detachable warrants in the previous financial year. The fair value of RM0.08 per Warrant is determined using the Black Scholes pricing model based on the following key assumptions:

Share price RM0.73 per ShareExercise price RM0.75 per WarrantTenure 5 yearsInterest rate 4.25%Expected volatility of the Company’s share price 16.23%

(b) Exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items, which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

19. BORROWINGS

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Current liabilities

Term loans (secured) 33,057 4,345 904 743Trade bills (secured) 10,099 5,433 - -Hire purchase creditors (Note 20) 435 399 206 196Bank overdraft (secured) 648 - - -

44,239 10,177 1,110 939



19. BORROWINGS (continued)

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Non-current liabilities

Term loans (secured) 34,030 54,070 151 867Hire purchase creditors (Note 20) 1,286 1,545 588 794

35,316 55,615 739 1,661

79,555 65,792 1,849 2,600

Total borrowings

Term loans (secured) 67,087 58,415 1,055 1,610Trade bills (secured) 10,099 5,433 - -Hire purchase creditors (Note 20) 1,721 1,944 794 990Bank overdraft (secured) 648 - - -

79,555 65,792 1,849 2,600

(a) The currency exposure profile of borrowings are as follows:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 69,924 59,015 794 990United States Dollar 4,936 4,681 1,055 1,610Vietnamese Dong 4,695 2,096 - -

79,555 65,792 1,849 2,600



19. BORROWINGS (continued)

(b) A term loan of the Group with a carrying amount of RM50,716,000 (2014: RM45,625,000) is secured by way of:

(i) A charge over the leasehold land under development as disclosed in Note 13 to the financial statements.

(ii) Deposits maintained in a designated Debt Service Reserve Account with a licensed bank as disclosed in Note 16 to the financial statements.

(c) The remaining term loans of the Group with a total carrying amount of RM16,371,000 (2014: RM12,790,000), trade bills and bank overdraft of the Group are secured by the following:

(i) A pledge over the Group’s freehold land, long-term leasehold land, buildings and certain plant and machinery with a total carrying amount of RM34,848,000 (2014: RM25,837,000) as disclosed in Note 7 to the financial statements.

(ii) A pledge over the entire issued and fully paid-up share capital of a wholly-owned subsidiary, Furniweb Safety Webbing Sdn. Bhd..

(iii) Earmarking of unutilised trade facilities granted to certain subsidiaries.

(d) The term loans and trade bills granted to the subsidiaries are guaranteed by the Company as disclosed in Note 23 to the financial statements.

(e) The term loans of the Group and of the Company bear interest ranging from 3.50% to 6.36% (2014: 3.35% to 8.35%) per annum. The term loans are repayable by monthly instalments ranging from 60 to 300 months.

(f) The trade bills of the Group bear interest ranging from 2.50% to 8.50% (2014: 3.50% to 8.50%) per annum.

(g) The bank overdraft of the Group bears interest at 8.60% (2014: 8.60%) per annum.

(h) Information on financial risks of borrowings and its remaining maturity is disclosed in Note 33 to the financial statements.



20. HIRE PURCHASE CREDITORS

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Minimum hire purchase payments:- not later than one (1) year 504 484 239 238- later than one (1) year but not later than five (5) years 1,374 1,684 624 863

Total minimum hire purchase payments 1,878 2,168 863 1,101

Less: Future interest charges (157) (224) (69) (111)

Present value of hire purchase payments 1,721 1,944 794 990

Repayable as follows:

Current liabilities - not later than one (1) year 435 399 206 196

Non-current liabilities- later than one (1) year but not later than five (5) years 1,286 1,545 588 794

1,721 1,944 794 990



21. TRADE AND OTHER PAYABLES

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Non-current

Amount owing to a subsidiary - - - 1,677Other payables 28,754 15,889 - -

28,754 15,889 - 1,677

Current

Trade payables

Third parties 8,374 10,299 - -Retention sums 2,017 57 - -Amount owing to a joint venture 2 - - -

10,393 10,356 - -

Other payables

Amounts owing to subsidiaries - - 2,017 1,896Other payables 18,003 33,511 75 104Accruals 9,915 2,667 16 61

27,918 36,178 2,108 2,061

Amounts due to customers for contract works (Note 14) 3,441 - - -Progress billings in respect of property development cost 1,367 - - -

Total current 43,119 46,534 2,108 2,061

Grand total 71,873 62,423 2,108 3,738



21. TRADE AND OTHER PAYABLES (continued)

(a) Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from one (1) month to three (3) months from the date of invoice. The amount owing to a joint venture in trade payables is subject to trade terms.

(b) In the previous financial year, the non-current amount owing to a subsidiary represented loans, which were unsecured, interest free and repayable in full upon maturity, which was five (5) years from the date of full drawdown in cash and cash equivalents.

(c) The non-trade amounts owing to subsidiaries represent advances, which are unsecured, interest-free and payable upon demand in cash and cash equivalents.

(d) Non-current and current other payables of the Group include amounts of RM28,754,000 and RM15,979,000 respectively (2014: RM15,889,000 and RM31,585,000 respectively), which represent the present value of the remaining unpaid amount for the purchase consideration of the development land as disclosed in Note 13 to the financial statements.

(e) The currency exposure profile of trade and other payables are as follows:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 65,964 56,526 2,108 3,738United States Dollar 2,195 2,754 - -Vietnamese Dong 3,576 3,113 - -Australian Dollar 14 21 - -Euro - 9 - -Chinese Renminbi 124 - - -

71,873 62,423 2,108 3,738

(f) Information on financial risks of trade and other payables is disclosed in Note 33 to the financial statements.



22. COMMITMENTS

(a) Operating lease commitment

Non-cancellable operating lease rental are as follows:

Group2015 2014

RM’000 RM’000

Not later than one (1) year 562 520Later than one (1) and not later than five (5) years 1,643 1,502Later than five (5) years 10,535 8,998

12,740 11,020

The Group’s operating lease commitment comprise the following:

(i) rental of three pieces of land under operating leases. The leases typically run for an initial period of between forty four (44) and forty seven (47) years, with an option to renew the lease at the end of the lease term; and

(ii) rental of a factory for a period of three (3) years, with an option to renew the lease at the end of the lease term.

None of the leases included contingent rentals.

(b) Capital commitment

Group2015 2014

RM’000 RM’000

Capital expenditure in respect of purchase of property, plant and equipment:Contracted but not provided for 20 415



23. CONTINGENT LIABILITIES

Company2015 2014

RM’000 RM’000

Corporate guarantees given to banks for credit facilities granted to subsidiaries - unsecured (Note 19) - Limit of guarantee 184,326 179,903 - Amount utilised 77,952 68,534

Corporate guarantees given to third parties for credit limit granted to subsidiaries - unsecured - Limit of guarantee 34,150 35,535 - Amount utilised 17,582 21,101

The Directors are of the view that the chances of the banks and the third parties to call upon the corporate guarantees are remote. Accordingly, the fair values of the above corporate guarantees given to the subsidiaries for credit facilities are negligible.

24. REVENUE

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Sales of goods 89,034 84,749 - -Construction contract 38,360 7,537 - -Property development revenue 1,929 - - -Dividend income - - 1,488 4,065Management fees - - 1,430 744

129,323 92,286 2,918 4,809



25. PROFIT BEFORE TAXGroup Company

2015 2014 2015 2014Note RM’000 RM’000 RM’000 RM’000

Profit before tax is arrived at after charging:

Auditors’ remuneration:- statutory audit - current year 197 182 32 30 - over-provision in prior year - (1) - -- other services 11 81 11 81Amortisation of intangible assets 8 75 32 - -Directors’ remuneration: 30- Directors of the Company: - fees 250 361 190 221 - emoluments other than fees 3,496 2,577 863 414- Directors of a subsidiary: - emoluments other than fees 2,410 805 236 -Depreciation of property, plant and equipment 7 4,924 3,515 291 46Fair value adjustments on: - trade receivables - 31 - -- trade payables 4 - - -Impairment losses on:- investments in subsidiaries 9 - - 315 -- trade receivables 12(g) - 64 - -Interest expense on:- term loans 727 675 50 67- trade bills 363 105 - -- hire purchase creditors 94 35 43 19- bank overdraft 16 3 - -Inventories written down 15 861 247 - -Net loss on disposal of property, plant and equipment 120 - - -Loss on foreign exchange:- unrealised 237 200 - -- realised 200 157 - -Property, plant and equipment written off 7 205 - - -Rental expenses on:- factory 176 176 - -- hostel 169 14 - -- land 354 300 - -- office equipment 3 - - -



25. PROFIT BEFORE TAX (continued)

Group Company2015 2014 2015 2014

Note RM’000 RM’000 RM’000 RM’000and after crediting:

Fair value adjustment on:- loans to subsidiaries - - 28 1,175- trade receivables 31 - - -- trade payables - 4 - -Dividend income from subsidiaries 24 - - 1,488 4,065Gain on foreign exchange:- unrealised 1,769 660 1,154 386- realised 1,354 741 160 5Interest income from:- fixed deposits 96 43 - 4- bank balances 115 159 7 85- advances to subsidiaries - - 2,434 207Management fees charged to its subsidiaries 24 - - 1,430 744Reversal of inventories written down 15 2 469 - -Reversal of impairment loss on trade receivables 12(g) - 1 - -

The estimated monetary value of benefits-in-kind received by the Directors otherwise than in cash from the Group and the Company amounted to RM211,000 and RM39,000 (2014: RM106,000 and RM15,000) respectively.



26. TAX EXPENSE

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Current tax expense based on profit for the financial year:

Malaysia- current year provision 1,657 290 - -- under-provision in prior years 9 63 37 1Overseas- current year provision 776 769 - -

2,442 1,122 37 1

Deferred tax (Note 11)Effects of changes in tax rates (54) (33) - -Origination and reversal of temporary differences 145 18 - -Under/(Over)-provision in prior years 78 (114) - -

169 (129) - -

2,611 993 37 1

The Malaysian income tax is calculated at the statutory tax rate of twenty-five percent (25%) (2014: 25%) of the estimated taxable profits for the fiscal year. The Malaysian statutory tax rate will be reduced to twenty-four percent (24%) for the fiscal year of assessment 2016 onwards.

Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.



26. TAX EXPENSE (continued)

The numerical reconciliations between the tax expense and the product of accounting profit multiplied by the applicable tax rates of the Group and of the Company are as follows:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Tax at Malaysian statutory tax rate of 25% (2014: 25%) 1,810 597 964 1,144

Tax effects in respect of:

Effects of different tax rates in foreign jurisdictions (430) (457) - -Non-allowable expenses 942 536 246 218Tax incentives (96) (67) - -Share of profit of a joint venture (42) (28) - -Income not subject to tax (363) (169) (1,210) (1,362)Deferred tax assets not recognised 936 696 - -Effects of changes in tax rates (54) (33) - -Utilisation of previously unrecognised deferred tax assets (179) (31) - -Under/(Over)-provision in prior years:- tax expense 9 63 37 1- deferred tax 78 (114) - -

2,611 993 37 1

Tax savings of the Group are as follows:

Group2015 2014

RM’000 RM’000

Arising from utilisation of previously unrecognised tax losses 179 31



26. TAX EXPENSE (continued)

Tax on each component of other comprehensive income is as follows:

GroupBefore tax Tax effect After tax

RM’000 RM’000 RM’0002015

Foreign currency translations 3,789 - 3,789Share of other comprehensive income of a joint venture 166 - 166

3,955 - 3,955

GroupBefore tax Tax effect After tax

RM’000 RM’000 RM’0002014

Foreign currency translations 1,262 - 1,262Share of other comprehensive income of a joint venture 85 - 85

1,347 - 1,347



27. EARNINGS PER ORDINARY SHARE (a) Basic

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year:

Group

2015 2014RM’000 RM’000

Profit attributable to owners of the parent 6,075 2,374

Group2015 2014’000 ’000

Weighted average number of ordinary shares in issue 144,854 119,709

Group2015 2014sen sen

Basic earnings per ordinary share for: Profit for the financial year 4.194 1.983

(b) Diluted

Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential ordinary shares.

Group2015 2014

RM’000 RM’000

Profit attributable to owners of the parent 6,075 2,374



27. EARNINGS PER ORDINARY SHARE (continued)

(b) Diluted (continued)

Group2015 2014’000 ’000

Weighted average number of ordinary shares in issue 144,854 119,709Effect of warrants - 260

Adjusted weighted average number of ordinary shares applicable to basic earnings per ordinary share 144,854 119,969

Group2015 2014sen sen

Diluted earnings per ordinary share for: Profit for the financial year 4.194# 1.979

# The diluted earnings per share is same as the basic earnings per share because the effect of the assumed conversion of warrants outstanding will be anti-dilutive and the Company has no other dilutive potential ordinary share in issue as at the end of the reporting period.

28. DIVIDENDS

Group and Company2015 2014

Gross Amount of Gross Amount ofdividend dividend dividend dividend

per share net of tax per share net of taxsen RM’000 sen RM’000

Final dividend paid in respect of 31 December 2013 - - 1.50 2,173Final dividend paid in respect of 31 December 2014 1.00 1,449 - -

1.00 1,449 1.50 2,173



28. DIVIDENDS (continued)

The Directors propose a final single tier dividend of 1.00 sen per ordinary share, amounting to RM1,449,000 in respect of the financial year ended 31 December 2015, subject to the approval of members at the forthcoming Annual General Meeting.

The financial statements for the current financial year do not reflect this proposed dividend. The dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the next financial year.

29. EMPLOYEE BENEFITS

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Wages, salaries and bonuses 24,606 19,166 1,258 533Contributions to defined contribution plans 1,691 1,249 154 64Social security contributions 1,182 46 3 1Other benefits 2,074 124 42 7

29,553 20,585 1,457 605

Included in the employee benefits of the Group and of the Company are Executive Directors’ remuneration amounting to RM5,906,000 (2014: RM3,382,000) and RM1,099,000 (2014: RM414,000).

30. RELATED PARTY DISCLOSURES

(a) Identities of related parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

The Group has a related party relationship with its subsidiaries, joint venture, corporations in which certain Directors of a subsidiary has interests, Directors and key management personnel.



30. RELATED PARTY DISCLOSURES (continued)

(b) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:

Group Company2015 2014 2015 2014

Note RM’000 RM’000 RM’000 RM’000

SubsidiariesDividend income - - 1,488 4,065Interest income - - 2,434 207Management fees - - 1,430 744

Joint ventureDividend received/ receivable - 862 - -Sales of goods 1,101 863 - -Purchase of materials (329) (257) - -Commission received/ receivable 63 28 - -

Joint venture partnerSale of goods a 3,356 2,348 - -Dividends paid/payable - 863 - -

Note a

The joint venture partner of the Group is Trunet (UK) Limited (Formerly known as Trunature Holdings Limited), a company that owns 50% of Trunet (Vietnam) Co., Ltd., a joint venture.

The related party transactions described above were carried out based on negotiated terms and conditions and mutually agreed with related parties.



30. RELATED PARTY DISCLOSURES (continued)

(c) Compensation of key management personnel

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity, directly and indirectly, including any Director (whether executive or otherwise) of the Group and the Company.

The remuneration of Directors during the financial year was as follows:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Directors- fees 250 361 190 221- remuneration 5,906 3,382 1,099 414

6,156 3,743 1,289 635

(d) Transactions with corporations in which a Director of a subsidiary has interests

The aggregate value of transactions and outstanding balances relating to corporations in which a Director of a subsidiary has interest were as follows:

Transaction value Balancefor the year ended outstanding as at

31 December 31 December2015 2014 2015 2014

Note RM’000 RM’000 RM’000 RM’000

Shann Australia Pty. Ltd.- Sales a 1,341 1,332 462 542

Note a

The Group sells goods to Shann Australia Pty. Ltd., a company that owns 5.96% of Furnitech Components (Vietnam) Co. Ltd., a subsidiary of the Company.

The related party transactions described above were carried out based on negotiated terms and conditions and mutually agreed with related parties.



31. OPERATING SEGMENTS PRG Holdings Berhad and its subsidiaries are principally engaged in the manufacturing and sale

of webbings, yarn, furniture components, rubber strips and fabrics as well as being involved in property development and construction.

The Group has arrived at two (2) reportable segments that are organised and managed separately according to the nature of products and services, specific expertise and technologies requirements, which requires different business and marketing strategies. The reportable segments are summarised as follows:

(i) Manufacturing

The manufacture and sale and marketing of rubber strips and narrow fabrics, upholstery webbings, covered elastic yarn, rigid webbings, safety webbing, metal components for the furniture industry; trading and commission agent.

(ii) Property development and construction

Development and construction of residential and commercial properties.

Other operating segments that do not constitute reportable segments comprise operations related to investment holding.

The accounting policies of operating segments are the same as those described in the summary of significant accounting policies.

The Group evaluates performance on the basis of profit or loss from operations before tax.

Inter-segment revenue is priced along the same lines as sales to external customers and is eliminated in the consolidated financial statements. These policies have been applied consistently throughout the current and previous financial years.

Segment assets exclude tax assets. Segment liabilities exclude tax liabilities. Even though loans and borrowings arise from financing activities rather than operating activities, they are allocated to the segments based on relevant factors. Details are provided in the reconciliations from segment assets and liabilities to the position of the Group.



31. OPERATING SEGMENTS (continued)

Propertydevelopment

and2015 Manufacturing construction Others Elimination Total

RM’000 RM’000 RM’000 RM’000 RM’000Revenue

Revenue from external customers 89,034 40,289 - - 129,323Inter-segment revenue 737 2,360 2,918 (6,015) -

Total revenue 89,771 42,649 2,918 (6,015) 129,323

Finance costs (1,180) (217) (93) 290 (1,200)Interest income 589 139 2,441 (2,958) 211

Net finance (expense)/income (591) (78) 2,348 (2,668) (989)

Amortisation of intangible assets (29) (46) - - (75)Depreciation of property, plant and equipment (3,996) (637) (291) - (4,924)

Segment profit/(loss) before income tax 7,299 1,510 (1,568) - 7,241

- Share of profit of a joint venture 235 - - - 235- Inventories written down (861) - - - (861)- Reversal of inventories written down 2 - - - 2- Property, plant and equipment written off (205) - - - (205)- Net unrealised gain on foreign exchange 620 118 794 - 1,532

Capital expenditure 4,848 524 5 - 5,377

Investment in a joint venture 1,413 - - - 1,413

Segment assets 98,599 166,514 2,454 - 267,567

Segment liabilities 29,230 119,457 1,940 801 151,428




Propertydevelopment

and2014 Manufacturing construction Others Elimination Total

RM’000 RM’000 RM’000 RM’000 RM’000Revenue

Revenue from external customers 84,749 7,537 - - 92,286Inter-segment revenue 1,279 580 4,808 (6,667) -

Total revenue 86,028 8,117 4,808 (6,667) 92,286

Finance costs (1,025) (12) (86) 305 (818)Interest income 175 37 295 (305) 202

Net finance (expense)/income (850) 25 209 - (616)

Amortisation of intangible assets (27) (5) - - (32)Depreciation of property, plant and equipment (3,307) (162) (46) - (3,515)

Segment profit/(loss) before income tax 6,678 (2,727) (1,562) - 2,389

- Share of profit of a joint venture 154 - - - 154- Inventories written down (247) - - - (247)- Impairment loss on trade receivables (64) - - - (64)- Reversal of inventories written down 469 - - - 469- Reversal of impairment loss on trade receivables 1 - - - 1- Net unrealised (loss)/gain on foreign exchange (1) 48 413 - 460

Capital expenditure 3,279 8,253 1,224 - 12,756

Investment in a joint venture 1,012 - - - 1,012

Segment assets 88,282 145,915 2,674 - 236,871

Segment liabilities 25,438 99,210 2,766 801 128,215



31. OPERATING SEGMENTS (continued) Reconciliations of reportable profit or loss, assets and liabilities to the Group’s corresponding

amounts are as follows:

2015 2014RM’000 RM’000

Profit for the financial year

Total profit for reportable segments 7,241 2,389Income tax expense (2,611) (993)

Group’s profit for the financial year 4,630 1,396

2015 2014RM’000 RM’000

Assets

Total assets for reportable segments 267,567 236,871Tax assets 552 755

Group’s assets 268,119 237,626

Liabilities

Total liabilities for reportable segments 151,428 128,215Tax liabilities 1,612 1,468

Group’s liabilities 153,040 129,683




Geographical information

The Group’s manufacturing facilities and sales offices are mainly based in Malaysia and Vietnam.

In presenting information on the basis of geographical areas, segment revenue is based on the geographical location of customers from which the sales transactions originated.

Segment assets are based on the geographical location of the Group’s assets. The non-current assets do not include investment in a joint venture and deferred tax assets.

2015 2014RM’000 RM’000

Revenue from external customers

Malaysia 52,063 23,175Asia Pacific (excluding Malaysia) 49,845 37,151Europe 12,586 11,342North America 14,784 19,102Others 45 1,516

129,323 92,286

Non-current assets

Malaysia 31,286 31,358Asia Pacific (excluding Malaysia) 18,206 15,918

49,492 47,276

Major customers

The following are major customers with revenue equal to or more than 10 percent of the revenue of the Group:

Revenue Segment2015 2014

RM’000 RM’000

Customer A 5,703 10,106 ManufacturingCustomer B 38,360 - Property development

and construction

All common control companies of Customer C 9,615 11,644 Manufacturing



32. FINANCIAL INSTRUMENTS

(a) Capital management

The primary objective of the Group’s capital management is to ensure that entities of the Group would be able to continue as going concerns while maximising the return to shareholders through the optimisation of the debt and equity balance. The overall strategy of the Group remains unchanged from the financial year ended 31 December 2014.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. No changes were made in the objectives, policies or processes during the financial years ended 31 December 2015 and 31 December 2014.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group regularly reviews the gearing ratio to ensure they are at acceptable levels and within industry norms. The Group includes within net debt, borrowings less cash and bank balances. Capital represents equity attributable to the owners of the parent. A detailed calculation of the net debt is shown below:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Borrowings 79,555 65,792 1,849 2,600Less: Cash and bank balances (24,057) (16,083) (219) (190)

Net debt 55,498 49,709 1,630 2,410

Total capital 116,837 108,298 92,197 89,828Net debt 55,498 49,709 1,630 2,410

172,335 158,007 93,827 92,238

Gearing ratio 32% 31% 2% 3%



32. FINANCIAL INSTRUMENTS (continued)

(a) Capital management (continued)

Pursuant to the requirements of Practice Note No. 17/2005 of the Bursa Malaysia Securities Berhad, the Group is required to maintain a consolidated shareholders’ equity equal to or not less than the 25% of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not less than RM40,000,000. The Group has complied with this requirement for the financial year ended 31 December 2015.

(b) Categories of financial instruments

Group2015 2014

RM’000 RM’000Financial assets

Trade and other receivables, net of prepayments and amounts due from customers for contract works - loans and receivables 22,800 18,849Cash and bank balances 24,057 16,083

46,857 34,932

Financial liabilities

Borrowings - other financial liabilities 79,555 65,792Trade and other payables - other financial liabilities, net of amounts due to customers for contract works and progress billings in respect of property development cost 67,065 62,423

146,620 128,215




(b) Categories of financial instruments (continued)

Company2015 2014

RM’000 RM’000Financial assets

Trade and other receivables, net of prepayments - loans and receivables 48,565 53,039Cash and bank balances 219 190

48,784 53,229

Financial liabilities

Borrowings - other financial liabilities 1,849 2,600Trade and other payables - other financial liabilities 2,108 3,738

3,957 6,338

(c) Determination of fair values

Methods and assumptions used to estimate fair values

The fair values of financial assets and financial liabilities are determined as follows:

(i) Financial instruments that are not carried at fair values and whose carrying amounts are at reasonable approximation of fair values

The carrying amounts of financial assets and liabilities, such as trade and other receivables, current portion of amounts owing by subsidiaries, trade payables and current other payables, current portion of amounts owing to subsidiaries and borrowings are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

(ii) Hire purchase liabilities

The fair values of the hire-purchase liabilities are estimated based on the future contractual cash flows discounted at current market interest rates available for similar financial instruments and of the same remaining maturities.




(c) Determination of fair values (continued)

(iii) Non-current amounts owing by/(to) subsidiaries, non-current other payables and long-term borrowings

The fair values of these financial instruments are estimated by discounting the expected future cash flows at market incremental lending rates for similar types of lending, borrowing or leasing arrangements at the end of the reporting period. At the end of the reporting period, these amounts are carried at amortised cost and the carrying amounts approximate fair value.

(iv) Financial guarantee

The Company provides corporate guarantees to financial institutions for banking facilities and third parties for credit facilities granted to subsidiaries. The fair value of such financial corporate guarantees is negligible as the probability of the Group defaulting on the financial facilities is remote.

(d) Fair value hierarchy

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Fair value, which is determined for disclosure purposes, is calculated based on the present value of non-derivative financial liabilities of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. For other borrowings, the market rate of interest is determined by reference to similar borrowing arrangements.

Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs).




(d) Fair value hierarchy (continued)

The significant unobservable inputs used in determining the fair value measurement of Level 3 financial instruments as well as the relationship between key unobservable inputs and fair value, is detailed in the table below:

Inter-relationship Valuation Significant between key technique unobservable unobservable inputs

Financial instruments used inputs and fair value

Financial assets/liabilities

Amounts owing by/(to) subsidiaries Discounted cash flows method

Discount rate (3.45% and 8.00%)

The higher the discount rate, the lower the fair value of the assets/ liabilities would be.

Non-current otherpayables

Discounted cash flows method

Discount rate (6.37%)

The higher the discount rate, the lower the fair value of the liabilities would be.



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33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s financial risk management objectives are to optimise value creation for shareholders whilst minimising the potential adverse impact arising from fluctuations in foreign currency exchange and interest rates and the unpredictability of the financial markets.

The Group is exposed mainly to foreign currency risk, interest rate risk, liquidity and cash flow risks and credit risk. Information on the management of the related exposures is detailed below:

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group is exposed to foreign exchange rate risk on sales and purchases that are denominated in a currency other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily United States Dollar (“USD”), Vietnam Dong (“VND”) and Euro.

The Group and the Company also hold cash and bank balances denominated in foreign currencies for working capital purposes. Information regarding the currency exposure profile of cash and bank balances is disclosed in Note 16 to the financial statements.

The Group does not hedge these exposures by purchasing or selling forward currency contracts at present. However, the management keeps this policy under review.

In respect of its overseas subsidiaries, the Group maintains a natural hedge, where possible, by borrowing in the currency of the country in which the subsidiary is located or by borrowing in currencies that match the future revenue stream to be generated from its subsidiaries.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s and of the Company’s profit net of tax to a reasonably possible change in the United States Dollar (“USD”), Vietnamese Dong (“VND”) and Euro exchange rates against the Ringgit Malaysia (“RM”) respectively, with all other variables held constant. 10% is the sensitivity rate used when reporting foreign currency risk exposures internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates.


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33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(i) Foreign currency risk (continued)

The sensitivity analysis includes outstanding balances denominated in foreign currencies.

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000Profit net Profit net Profit net Profit net

of tax of tax of tax of tax

USD/RM - strengthen by 10% (2014: 10%) 1,778 843 616 515- weaken by 10% (2014: 10%) (1,778) (843) (616) (515)

VND/RM - strengthen by 10% (2014: 10%) (129) 192 80 70- weaken by 10% (2014: 10%) 129 (192) (80) (70)

Euro/RM - strengthen by 10% (2014: 10%) 22 159 - -- weaken by 10% (2014: 10%) (22) (159) - -

Sensitivity analysis of Sterling Pound (“GBP”), Australian Dollar (“AUD”), and Chinese Renminbi (“RMB”) are not disclosed as the fluctuation of these foreign exchange rates against the Group’s functional currency would not be significant.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s deposits placed with financial institutions and borrowings are exposed to a risk of changes in their fair values due to changes in market interest rates. The Group’s and the Company’s borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Short term receivables and payables are not exposed to interest rate risk.

The Group and the Company borrow for operations at fixed and variable rates using its hire purchase, term loans, trade financing facilities and bank overdraft. There is no formal hedging policy with respect to interest rate exposure.



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(ii) Interest rate risk (continued)

Sensitivity analysis for interest rate risk

The following table demonstrates the sensitivity analysis of the Group and of the Company if interest rates at the end of reporting period changed by 50 basis points with all other variables held constant:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000Profit net Profit net Profit net Profit net

of tax of tax of tax of tax

Increase by 0.5% (2014: 0.5%) (279) (231) 154 11Decrease by 0.5% (2014: 0.5%) 279 231 (154) (11)

The sensitivity is higher in 2015 than in 2014 because of an increase in the net financial instruments that are exposed to interest rate risk during the financial year. The assumed movement in basis points for interest rate sensitivity analysis is based on current observable market environment.

(iii) Liquidity and cash flow risks

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all operating, investing and financing needs are met. In liquidity risk management strategy, the Group measures and forecasts its cash commitments and maintains a level of cash and cash equivalents deemed adequate to finance the Group’s activities.




(iii) Liquidity and cash flow risks (continued)

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the reporting period based on contractual undiscounted repayment obligations.

On demandor within One to five Over fiveone year years years Total

As at 31 December 2015 RM’000 RM’000 RM’000 RM’000

GroupFinancial liabilitiesTrade and other payables 43,119 29,353 - 72,472Borrowings 47,886 34,755 18,358 100,999

Total undiscounted financial liabilities 91,005 64,108 18,358 173,471

CompanyFinancial liabilitiesTrade and other payables 2,108 - - 2,108Borrowings 1,164 776 - 1,940

Total undiscounted financial liabilities 3,272 776 - 4,048




(iii) Liquidity and cash flow risks (continued)

Analysis of financial instruments by remaining contractual maturities (continued)

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the reporting period based on contractual undiscounted repayment obligations (continued).

On demandor within One to five Over fiveone year years years Total

As at 31 December 2014 RM’000 RM’000 RM’000 RM’000

GroupFinancial liabilitiesTrade and other payables 46,538 17,500 - 64,038Borrowings 13,813 50,542 15,521 79,876

Total undiscounted financial liabilities 60,351 68,042 15,521 143,914

CompanyFinancial liabilitiesTrade and other payables 2,061 1,677 - 3,738Borrowings 1,025 1,748 - 2,773

Total undiscounted financial liabilities 3,086 3,425 - 6,511




(iv) Credit risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount and the Group regularly follows up on receivables outstanding beyond their stipulated time threshold for payments. The Group does not require collateral in respect of financial assets.

Exposure to credit risk

At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any individual customer or counterparty except that 48% (2014: 45%) of total Group’s trade receivables as at reporting date were due from five (5) (2014: five (5)) major customers.

The Company has no significant concentration of credit risk except for the amounts owing by subsidiaries and dividends receivable from subsidiaries constituting approximately 100% (2014: 100%) of the total receivables of the Company.

The Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.




(iv) Credit risk (continued)

Credit risk concentration profile

The Group determines concentration of credit risk by monitoring the country and industry sector profiles of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the end of the reporting period are as follows:

2015 2014RM’000 % of total RM’000 % of total

By countryMalaysia 6,740 32% 5,620 31%Asia Pacific (excluding Malaysia) 8,920 42% 6,273 34%Europe 2,957 14% 3,010 17%North America 2,589 12% 3,157 17%Others 78 * 97 1%

21,284 100% 18,157 100%

By industry sectorsManufacturing 16,039 75% 14,521 80%Property development and construction 5,245 25% 3,636 20%

21,284 100% 18,157 100%

* Amount is less than 1%

At the end of the reporting period, approximately 48% (2014: 45%) of the Group’s trade receivables were due from 5 major customers located in Malaysia, Asia Pacific excluding Malaysia, Europe and North America.




(iv) Credit risk (continued)

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 12 to the financial statements. Deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 12 to the financial statements.

34. CHANGES IN COMPOSITION OF THE GROUP

(a) In the previous financial year, Premier De Muara Sdn. Bhd. (“PDMSB”) allotted and issued an additional nine (9) new ordinary shares to PGSB and forty (40) new ordinary shares to Almaharta Sdn. Bhd. (“ASB”). On 23 June 2014, PDMSB allotted and issued an additional 149,940 new ordinary shares to PGSB and 99,960 new ordinary shares to ASB such that PGSB’s and ASB’s total equity interest in PDMSB equals to sixty percent (60%) and forty percent (40%) equity interests respectively.

The total interest acquired by ASB was RM100,000.

(b) In the previous financial year, a wholly-owned subsidiary, Furniweb (Vietnam) Shareholding Company (“FVSC”) acquired an additional 10.44% equity interest in Furnitech Components (Vietnam) Co. Ltd. (“FCV”) from a minority shareholder. The total cash consideration paid was RM103,000. Arising therefrom, FVSC’s equity interest in FCV was increased from 71.57% to 82.01%.



34. CHANGES IN COMPOSITION OF THE GROUP (continued)

(b) The fair value of the identifiable assets and liabilities of FCV as at the date of accretion were as follows:

2014RM’000

Property, plant and equipment 1,764Inventories 2,651Trade and other receivables 1,409Cash and cash equivalents 1,306Trade and other payables (4,010)Borrowings (1,994)

Total identifiable net assets 1,126Less: Fair value of 71.57% equity interest held previously as subsidiary (806)Less: Fair value of 17.99% equity interest held by NCI (203)

Total identifiable net assets acquired (at 10.44%) 117Purchase consideration settled in cash (103)

14

The acquisition had no material impact to the financial statements of the Group.

In the previous financial year, FCV increased its contributed capital by VND7,436,100,000, equivalent to RM1,151,108. The additional capital contribution acquired by NCI was RM207,000. The additional capital contribution did not result in any change in the percentage of shareholding of the Group.

35. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

On 15 December 2015, the Company announced its Proposed Diversification of principal activities to include construction business. The Proposed Diversification of principal activities was approved by the members in the Extraordinary General Meeting held on 12 January 2016.

36. SIGNIFICANT EVENT SUBSEQUENT TO THE END OF THE REPORTING PERIOD

On 11 January 2016, the Group entered into a Promoter and Underwriter Agreement with Dato’ Ng Yan Cheng for the engagement of Dato’ Ng Yan Cheng as the promoter and underwriter of two hundred and ten (210) units of development project of the Group as disclosed in Note 13 to the financial statements.



37. SUPPLEMENTARY INFORMATION ON REALISED AND UNREALISED PROFITS OR LOSSES

The retained earnings as at the end of the reporting period may be analysed as follows:

Group Company2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Total retained earnings of the Company and its subsidiaries: - Realised 58,167 53,767 13,772 12,691 - Unrealised (441) (1,399) 1,567 279

57,726 52,368 15,339 12,970Total share of retained earnings from a joint venture: - Realised 1,012 784 - - - Unrealised 4 (3) - -

58,742 53,149 15,339 12,970Less: Consolidation adjustments (17,545) (16,578) - -

Total retained earnings 41,197 36,571 15,339 12,970



LIST OFGROUP PROPERTIES

Address Owner Description Age of building

Tenure / Expiry

Existing Use

Land Area

(Sq ft.)

Carrying Value as at 31/12/2015

(RM)

Date of Valuation(* Date of

acquisition)

Title No. H.S. (M) 967, P.T. No. 208, Mukim of Cheras, District of Hulu Langat, Selangor

FMSB Land and a 1 ½ storey factory/warehouse building with office

23 Leasehold(60 years)/

11 Feb 2075^

Industrial 51,905 3,052,411 10/5/2002

Title No. H.S. (M) 943, P.T. No. 7179, Mukim of Cheras, District of Hulu Langat, Selangor

SSKSBFMSB

Land and a double storey factory/warehouse building


11 Feb 2075^

Industrial 56,253 3,612,065 10/5/2002

Title No. H.S. (M) 1594,P.T. No. 2374, Kg. Bharu Balakong, Mukim of Cheras, District of Hulu Langat, Selangor

FMSB Land, a 3 storey office building and a double storey factory/warehouse building

7 Leasehold(99 years)/ 3 Jul 2083

Industrial 85,887 8,752,810 *27/09/2005

No. 18, Road 3A, Bien Hoa Industrial Zone II, Long Binh Ward, Bien Hoa City, Dong Nai Province, Vietnam

FVSC 1 ½ storey factory/warehouse building with office, a double storey factory/warehouse building and a 3 storey factory/warehouse building

17 Lease(47 years)/

15 Jan 2044

Industrial 150,544 2,383,853 10/5/2002

Title No. H.S. (D) 37374, P.T. No. 4886, Mukim and District of Klang, SelangorAddress : No. 46, Jalan Harum 25/49, Seksyen 25, 40400 Shah Alam, Selangor

Texstrip 2 ½ storey terrace house (intermediate lot)

32 Freehold Residential 840 79,920 *27/1/2003

Title No. H.S. (M) 33413, P.T. No. 73813, Mukim and District of Klang, Selangor

Texstrip Land and double storey office block cum single storey factory building, guardhouse and car parking sheds

25 Freehold Industrial 50,444 2,205,832 10/5/2002


LIST OFGROUP PROPERTIES cont’d

Address Owner Description Age of building

Tenure / Expiry

Existing Use

Land Area

(Sq ft.)

Carrying Value as at 31/12/2015

(RM)

Date of Valuation(* Date of

acquisition)

HS(D) 111073, PT No. 9, Mukim Damansara, Daerah Petaling, Negeri SelangorAddress: Lot C601, Capital 3, Oasis Square, No. 2, Jalan PJU 1A/7A, Ara Damansara, 47301 Petaling Jaya, Selangor

PGSB Corporate Office

2 Freehold Commercial 8,541 5,371,667 *1/11/2014

PN 45266, 141 Section 88, Town and District of Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur

PDMSB Land held for property development


17 Feb 2108

Residential 162,043 148,965,280 30 July 2014

Street No. 8, Nhon Trach Industrial Zone 1, Nhon Trach District,Dong Nai Province, Vietnam

PEWA 1 ½ storey factory/warehouse building with office and a 3 storey factory/warehouse building

13 Lease(46 years)/

28 Feb 2048

Industrial 280,755 6,454,981 Not Available

Street No. 2, Nhon Trach Industrial Zone 1, Nhon Trach District,Dong Nai Province, Vietnam

Furnitech 1 ½ storey factory/warehouse building with office and a double storey staff quarters

11 Lease(44 years)/

22 Jan 2048

Industrial 242,436 3,227,091 Not Available

* There was no revaluation on the land and properties owned by the Group for the financial year ended 31 December 2015

^Land premium was paid for extension of 60 years on 12 February 2015 and subject to perfection of the documentation by authorities.


ANALYSIS OF SHAREHOLDINGS AS AT 31 MARCH 2016Authorised Share Capital : RM1,000,000,000 divided into 2,000,000,000

ordinary shares of RM0.50 eachIssued and Fully Paid-up Capital : RM74,024,600 divided into 148,049,200 ordinary

shares of RM0.50 eachClass of Shares : Ordinary shares of RM0.50 each

Voting Rights : On a show of hands - one vote On a poll - one vote for each share held

Category No. of Shareholders

% No. of SharesHeld

%

1 – 99 165 10.50 5,977 0.00100 - 1,000 177 12.29 50,868 0.031,001 - 10,000 505 37.41 2,401,098 1.6310,001 - 100,000 271 32.09 8,957,048 6.06100,001 to less than 5% of issued shares 80 7.44 93,449,411 63.21

5% and above of issued shares 5 0.27 42,975,898 29.07Total 1,203 100.00 147,840,300 * 100.00

* Excluding 208,900 treasury shares.

DIRECTORS’ SHAREHOLDINGS (As per Register of Directors’ Shareholdings)

Direct IndirectName of Director No. of Shares

Held% No. of Shares

Held %

Dato’ Lim Heen Peok 54,400 0.04 - -Dato’ Lua Choon Hann 23,404,500(a) 15.83 - -Cheah Eng Chuan 7,871,358(b) 5.32 - -Dato’ Wee Cheng Kwan 15,149,600(c) 10.25 - -Lee Sim Hak 3,089,470 2.09 - -Ong Lock Hoo 2,658,300 1.80 - -Lim Chee Hoong 77,000 0.05 77,000(d) 0.05Dato’ Hamzah bin Mohd Salleh - - - -


ANALYSIS OF SHAREHOLDINGS AS AT 31 MARCH 2016 cont’d

Notes:(a) Partly held through Kenanga Nominees (Tempatan) Sdn Bhd, Maybank Nominees (Tempatan) Sdn Bhd, JF Apex Nominees

(Tempatan) Sdn Bhd, MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd and AllianceGroup Nominees (Tempatan) Sdn Bhd.(b) Held through Affin Hwang Nominees (Tempatan) Sdn Bhd.(c) Held through Maybank Nominees (Tempatan) Sdn Bhd, RHB Capital Nominees (Tempatan) Sdn Bhd, RHB Nominees (Tempatan)

Sdn Bhd, MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd and HLIB Nominees (Tempatan) Sdn Bhd.(d) Deemed interested by virtue of his spouse’s interest pursuant to Section 134(12)(c) of the Companies Act, 1965.

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS (As per Register of Substantial Shareholders’ Shareholdings)

Direct Indirect

Name of Substantial Shareholder No. of Shares Held % No. of Shares

Held %

Dato’ Lua Choon Hann 23,404,500(a) 15.83 - -Cheah Eng Chuan 7,871,358(b) 5.32 - -Dato’ Wee Cheng Kwan 15,149,600(c) 10.25 - -Ng Yan Cheng 12,813,600 8.67 1,089,300(d) 0.74Wang Jing 7,994,300 5.41 - -Pacific Vintage Sdn Bhd 11,844,300(e) 8.01 - -

Notes:(a) Partly held through Kenanga Nominees (Tempatan) Sdn Bhd, Maybank Nominees (Tempatan) Sdn Bhd, JF Apex Nominees

(Tempatan) Sdn Bhd, MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd and AllianceGroup Nominees (Tempatan) Sdn Bhd.(b) Held through Affin Hwang Nominees (Tempatan) Sdn Bhd. (c) Held through Maybank Nominees (Tempatan) Sdn Bhd, RHB Capital Nominees (Tempatan) Sdn Bhd, RHB Nominees (Tempatan)

Sdn Bhd, MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd and HLIB Nominees (Tempatan) Sdn Bhd.(d) Held under Kenanga Nominees (Asing) Sdn Bhd Exempt An for Guotai Junan Securities (Hong Kong) Limited. Deemed interested

pursuant to Section 6A of the Companies Act, 1965.(e) Partly held through Kenanga Nominees (Tempatan) Sdn Bhd and Maybank Nominees (Tempatan) Sdn Bhd.



TOP 30 SHAREHOLDERS

Shareholder No. of Shares Percentage %

1 KENANGA NOMINEES (TEMPATAN) SDN BHD BENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR LUA CHOON HANN

10,497,700 7.10

2 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD BENEFICIARY: PLEDGED SECURITIES ACCOUNT FORWEE CHENG KWAN

8,927,840 6.04

3 NG YAN CHENG 8,128,600 5.50

4 AFFIN HWANG NOMINEES (TEMPATAN) SDN BHD BENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR CHEAH ENG CHUAN (CHE1991C)

7,871,358 5.32

5 KENANGA NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR PACIFIC VINTAGE SDN BHD

7,550,400 5.11

6 HO BUN HOI 7,337,300 4.96

7 MAYBANK NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR LUA CHOON HANN

5,466,000 3.70

8 WANG JING 5,280,000 3.57

9 NG YAN CHENG 4,685,000 3.17

10 HSBC NOMINEES (ASING) SDN BHDBENEFICIARY: EXEMPT AN FOR CREDIT SUISSE (SG BR-TST-ASING)

4,501,900 3.05

11 JF APEX NOMINEES (TEMPATAN)SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR LUA CHOON HANN

4,121,100 2.79

12 INOVASI MEGA ENERGY SDN BHD 3,997,500 2.70

13 MAYBANK NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR PACIFIC VINTAGE SDN BHD

3,543,900 2.40

14 LEE SIM HAK 3,089,470 2.09

15 KENANGA NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR CHEN SZE MIN (001)

2,949,140 1.99

16 WANG JING 2,714,300 1.84



TOP 30 SHAREHOLDERS

Shareholder No. of Shares Percentage %

17 ONG LOCK HOO 2,658,300 1.80

18 KOK CHI KEN 2,503,000 1.69

19 RHB NOMINEES (TEMPATAN) SDN BHD BENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR WEE CHENG KWAN

2,238,760 1.51

20 MAYBANK NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR WEE CHENG KWAN

2,188,000 1.48

21 TI LIAN KER 2,063,500 1.40

22 TA NOMINEES (TEMPATAN) SDN BHDBENEFICIARY : PLEDGED SECURITIES ACCOUNT FOR LAI SOO KOW

1,859,000 1.26

23 MIDF AMANAH INVESTMENT NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR LUA CHOON HANN (MGN-LCH0024M)

1,598,000 1.08

24 QIAN QING 1,570,200 1.06

25 TA NOMINEES (TEMPATAN) SDN BHDBENEFICIARY : PLEDGED SECURITIES ACCOUNT FOR WONG KEAT MOY

1,566,100 1.06

26 CHEN SZE MIN 1,440,300 0.97

27 ZHANG SHUAI 1,374,700 0.93

28 KENANGA NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR KOK CHI KEN (7000376)

1,319,540 0.89

29 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR KOK CHI KEN (7000376)

1,251,200 0.85

30 LAI KONG MENG 1,227,000 0.83

115,519,108 78.14


ANALYSIS OF WARRANTS HOLDINGS AS AT 31 MARCH 2016Total Number of Warrants Issued : 51,333,400

Exercise Price of Warrants : RM0.75

Category No. of Warrants Holders % No. of Warrants

Held %

1 - 99 21 3.15 838 0.00100 - 1,000 71 10.66 37,653 0.071,001 - 10,000 227 34.09 1,351,282 2.6310,001 - 100,000 284 42.64 10,410,950 20.28100,001 to less than 5% of issued warrants 57 8.56 18,637,378 36.315% and above of issued warrants 6 0.90 20,895,299 40.71Total 666 100.00 51,333,400 100.00

DIRECTORS’ WARRANTS HOLDINGS (As per Register of Directors’ Warrants Holdings)

Direct Indirect

Name of Directors No. of Warrants Held % No. of Warrants

Held %

Dato’ Lim Heen Peok 20,400 0.04 - -Dato’ Lua Choon Hann 7,656,600(a) 14.92 - -Cheah Eng Chuan 2,801,759(b) 5.46 - -Dato’ Wee Cheng Kwan 4,725,600(c) 9.21 - -Lee Sim Hak 1,213,706 2.36 - -Ong Lock Hoo 1,043,262 2.03 - -Dato’ Hamzah bin Mohd Salleh - - - -Lim Chee Hoong - - - -

Notes:(a) Partly held through Kenanga Nominees (Tempatan) Sdn Bhd.(b) Held through Affin Hwang Nominees (Tempatan) Sdn Bhd.(c) Held through Maybank Nominees (Tempatan) Sdn Bhd, RHB Capital Nominees (Tempatan) Sdn Bhd and RHB Nominees

(Tempatan) Sdn Bhd.


ANALYSIS OF WARRANTS HOLDINGS AS AT 31 MARCH 2016 cont’dTOP 30 WARRANTS HOLDERS

Warrants Holder No. of Warrants Percentage%

1 YEOH SOO ANN 4,135,000 8.06

2 KENANGA NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR LUA CHOON HANN

3,900,900 7.60

3 LUA CHOON HANN 3,755,700 7.32

4 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD BENEFICIARY: PLEDGED SECURITIES ACCOUNT FORWEE CHENG KWAN

3,347,940 6.52

5 TI LIAN KER 2,954,000 5.75

6 AFFIN HWANG NOMINEES (TEMPATAN) SDN BHD BENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR CHEAH ENG CHUAN (CHE1991C)

2,801,759 5.46

7 NG MEEI YUH 1,233,800 2.40

8 LEE SIM HAK 1,213,706 2.36

9 ONG LOCK HOO 1,043,262 2.03

10 CIMSEC NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: CIMB BANK FOR SIVA KUMAR A/L M JEYAPALAN (PB)

900,000 1.75

11 LEE JAM 753,000 1.47

12 MAYBANK NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR WEE CHENG KWAN

750,000 1.46

13 LIM CHIN HONG 672,000 1.31

14 HOU KOK CHUNG 650,000 1.27

15 RHB NOMINEES (TEMPATAN) SDN BHD BENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR WEE CHENG KWAN

627,660 1.22


TOP 30 WARRANTS HOLDERS

Warrants Holder No. of Warrants Percentage%

16 KENANGA NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR CHEN SZE MIN (001)

455,740 0.89

17 KENANGA NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR PACIFIC VINTAGE SDN BHD

454,300 0.89

18 ONG CHONG YI 428,400 0.83

19 KINTEX (K.L.) SDN BHD 423,360 0.82

20 CHING CHOOI SIM 400,000 0.78

21 CHAANG KOK FAI 385,000 0.75

22 YAP WENG KHOON 375,000 0.73

23 MAYBANK NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: SOPHIE GOH SU ANN

331,400 0.65

24 ANDREW LIM TATT KEONG 300,000 0.58

25 CHOY WEE CHIAP 300,000 0.58

26 MAYBANK NOMINEES (TEMPATAN) SDN BHDBENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR KENG LI MEI

300,000 0.58

27 WONG THIAM 290,000 0.56

28 SHIRLEY KOW YUET LAN 288,000 0.56

29 CHEAK MUN LUEN 260,000 0.51

30 CITIGROUP NOMINEES (TEMPATAN) SDN BHD BENEFICIARY: PLEDGED SECURITIES ACCOUNT FOR TAN SIONG AN

255,700 0.50

33,985,627 66.19

ANALYSIS OF WARRANTS HOLDINGS AS AT 31 MARCH 2016 cont’d


NOTICE OF FIFTEENTH ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN THAT the Fifteenth Annual General Meeting (“AGM”) of PRG Holdings Berhad (“PRG” or “the Company”) will be held at Arcadia I, Level 3, Hotel Armada Petaling Jaya, Lorong Utara C, Section 52, 46200 Petaling Jaya, Selangor Darul Ehsan on Thursday, 23 June 2016 at 11.00 a.m. for the following purposes:

ORDINARY BUSINESS

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

Explanatory Note A

2. To approve a final single tier dividend of 1.0 sen per share for the financial year ended 31 December 2015.

Resolution 1

3. To approve the payment of Directors’ fees of RM250,000 for the financial year ended 31 December 2015.

Resolution 2

4. To re-elect the following Directors who retire in accordance with Article 84 of the Company’s Articles of Association:

(i) Lim Chee Hoong;(ii) Lee Sim Hak; and(iii) Ong Lock Hoo.

Resolution 3Resolution 4Resolution 5

5. To re-elect Datuk Dr Wong Lai Sum who retires in accordance with Article 91 of the Company’s Articles of Association.

Resolution 6

6. To re-appoint Messrs BDO as the Company’s Auditors and to authorise the Directors to fix their remuneration.

Resolution 7


NOTICE OF FIFTEENTH ANNUAL GENERAL MEETING cont’dSPECIAL BUSINESS

To consider and if thought fit, to pass with or without modifications, the following Ordinary Resolutions:

7. RETENTION OF DATO’ LIM HEEN PEOK AS INDEPENDENT DIRECTOR

“THAT in accordance with the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”), Dato’ Lim Heen Peok be and is hereby retained as Independent Non-Executive Director of the Company and be designated as such until the conclusion of the next Annual General Meeting, subject to the provisions of the relevant regulatory authorities.”

Resolution 8

8. RETENTION OF LIM CHEE HOONG AS INDEPENDENT DIRECTOR

“THAT subject to the passing of Resolution 3 above and in accordance with the MCCG 2012, Lim Chee Hoong be and is hereby retained as Independent Non-Executive Director of the Company and be designated as such until the conclusion of the next Annual General Meeting, subject to the provisions of the relevant regulatory authorities.”

Resolution 9

9. RETENTION OF DATO’ HAMZAH BIN MOHD SALLEH AS INDEPENDENT DIRECTOR

“THAT in accordance with the MCCG 2012, Dato’ Hamzah bin Mohd Salleh be and is hereby retained as Independent Non-Executive Director of the Company and be designated as such until the conclusion of the next Annual General Meeting, subject to the provisions of the relevant regulatory authorities.”

Resolution 10

10. AUTHORITY UNDER SECTION 132D OF THE COMPANIES ACT, 1965 FOR THE DIRECTORS TO ISSUE SHARES

“THAT pursuant to Section 132D of the Companies Act, 1965 (“the Act”), 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 at any time, at such price, upon such terms and conditions and for such purposes and to such person or persons whomsoever as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution in any one financial year does not exceed 10% of the total issued share capital of the Company for the time being AND THAT the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad (“Bursa Securities”) for the listing of and quotation for the additional shares so issued AND THAT such authority shall continue to be in force until the conclusion of the next AGM of the Company.”

Resolution 11


NOTICE OF FIFTEENTH ANNUAL GENERAL MEETING cont’d11. PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK

“THAT subject always to the Act, provisions of the Company’s Memorandum and Articles of Association, the Listing Requirements of Bursa Securities and any other relevant authorities, the Company be and is hereby authorised to purchase such number of ordinary shares of RM0.50 each in the Company as may be determined by the Directors from time to time through Bursa Securities, subject to the following:

Resolution 12

(a) The aggregate number of shares which may be purchased by the Company shall not exceed 10% of the total issued and paid-up share capital of the Company at any point in time;

(b) The maximum funds to be allocated by the Company for the purpose of purchasing its own shares shall not exceed the retained earnings and/or the share premium account of the Company. The audited retained earnings and the share premium account of the Company as at 31 December 2015 are RM15.339 million and RM0.068 million respectively;

(c) The authority conferred by this resolution will be effective upon the passing of this resolution and will continue to be in force until:

(i) the conclusion of the next AGM of the Company following the AGM at which such resolution was passed, at which time the said authority will lapse, unless by a resolution passed at AGM, the authority is renewed, either unconditionally or subject to conditions; or

(ii) the expiration of the period within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by a resolution passed by the shareholders of the Company in a general meeting;

whichever is the earlier;

(d) Upon completion of the purchase by the Company of its own shares, the Directors of the Company be and are hereby authorised to deal with the shares purchased in their absolute discretion in the following manners:

(i) cancel the shares so purchased; or (ii) retain the shares so purchased as treasury shares and held by the

Company; or (iii) retain part of the shares so purchased as treasury shares and cancel

the remainder;

and the treasury shares may be distributed as dividends to the Company’s shareholders and/or resold in the open market in accordance with the relevant rules of Bursa Securities and/or subsequently cancelled;


NOTICE OF FIFTEENTH ANNUAL GENERAL MEETING cont’d

AND THAT authority be and is hereby unconditionally and generally given to the Directors of the Company to take all such steps as are necessary or expedient to implement, finalise and give full effect to the purchase of the Company’s own shares, with full power to assent to any conditions, modifications, revaluations and/or amendments as may be imposed by the relevant authorities and with full power to do all such acts and things thereafter in accordance with the Act, the provisions of the Memorandum and Articles of Association of the Company and the guidelines issued by Bursa Securities and any other relevant authorities.”

12. PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“PROPOSED SHAREHOLDERS’ MANDATE”)

“THAT subject always to the provisions of the Listing Requirements of Bursa Securities, approval be and is hereby given to the Company and its subsidiaries to enter into Recurrent Related Party Transactions of a revenue or trading nature as stated in Section 2.3 of Part B of the Circular to Shareholders dated 29 April 2016 with the specified classes of related parties mentioned therein which are necessary for the Group’s day-to-day operations and are carried out in the ordinary course of business on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company.

Resolution 13

THAT the approval shall continue to be in force until:

(i) the conclusion of the next AGM of the Company following the AGM at which such mandate was passed, at which time it will lapse, unless by a resolution passed at the AGM whereby the authority is renewed; or

(ii) the expiration of the period within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Act (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by a resolution passed by the shareholders in a general meeting;

whichever is the earlier;

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary or in the interests of the Company to give effect to the Proposed Shareholders’ Mandate.”

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


NOTICE OF FIFTEENTH ANNUAL GENERAL MEETING cont’dNOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS HEREBY GIVEN THAT a final single tier dividend of 1.0 sen per share for the financial year ended 31 December 2015, if approved by the shareholders at the forthcoming Fifteenth AGM, will be paid on 28 July 2016 to depositors registered in the Record of Depositors at the close of business on 30 June 2016 .

A depositor shall qualify for entitlement only in respect of:

a) Shares transferred into the depositor’s securities account before 4.00 p.m. on 30 June 2016 in respect of transfer; and

b) Shares bought on Bursa Securities on a cum entitlement basis according to the Rules of Bursa Securities.

BY ORDER OF THE BOARD

YEOH CHONG KEAT (MIA 2736)LIM FEI CHIA (MAICSA 7036158)Secretaries

Kuala Lumpur 29 April 2016

Notes:

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 15 June 2016 (General Meeting Record of Depositors) shall be eligible to attend, speak and vote at this meeting.

(ii) A proxy may but need not be a member of the Company, an advocate, an approved company auditor or a person approved by the Registrar (the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply).

(iii) To be valid, the original proxy form, duly completed must be deposited at the registered office of the Company situated at Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan, 50200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or at any adjournment thereof.

(iv) A member shall be entitled to appoint not more than two (2) proxies to attend, speak and vote at this meeting. Where a member appoints two (2) proxies, he/she shall specify the proportions of his/her shareholdings to be represented by each proxy failing which, the appointment shall be invalid.

(v) Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds.

(vi) If the appointor is a corporation this form must be executed under its common seal or under the hand of an officer or attorney duly authorised.(vii) The Personal Data Protection Act 2010, which regulates the processing of personal data in commercial transactions, applies to the Company.

By providing to the Company personal data which may include the name, contact details and mailing address, a member of the Company hereby consent, agree and authorise the processing and/ or disclosure of any personal data of or relating to the member for the purposes of issuing the notice of this meeting and convening the meeting (including any adjournment thereof), including but not limited to preparation and compilation of documents and other matters, whether or not supplied by the member. The member further confirms to have obtained the consent, agreement and authorisation of all persons whose personal data the member have disclosed and/ or processed in connection with the foregoing.


Explanatory Note A

This agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the audited financial statements. As such, this item is not put forward for voting.

Explanatory Notes under Special Business

(a) Resolutions 8, 9 and 10 – Retention of Independent Non-Executive Directors

The proposed resolutions are to seek shareholders’ approval to retain Dato’ Lim Heen Peok, Lim Chee Hoong and Dato’Hamzah bin Mohd Salleh as Independent Non-Executive Directors of the Company. They had served the Company as Independent Directors for a cumulative period of more than nine (9) years. In accordance with the MCCG 2012, the Nomination Committee and Board of Directors of the Company, after having assessed the independence of the abovenamed Directors, consider them to be independent based on amongst others, the following justifications and recommends that they be retained as Independent Non-Executive Directors of the Company:

(i) They have confirmed and declared that they are Independent Directors as defined under Paragraph 1.01 of the Listing Requirements of Bursa Securities;

(ii) They do not have any conflict of interest with the Company and have not been entering/is not expected to enter into contract(s) especially material contract(s) with the Company and/or its subsidiary companies;

(iii) They are currently not sitting on the board of any other public and/or private companies having the same nature of business as that of the Company and its subsidiary companies; and

(iv) They have provided unbiased, objective and independent view and judgment to Board deliberations and in view of their understanding of the Company’s business, the challenges faced by the Company and the environment in which the Company operates, the Board is of the view that they will continue to provide invaluable contributions to the Board as Independent Non-Executive Directors of the Company.

(b) Resolution 11 - Authority under Section 132D of the Companies Act, 1965 for the Directors to issue shares

This proposed resolution, if passed, will renew the authority given to the Directors of the Company to issue and allot new shares in the Company at any time, at such price, to such person or persons, upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit (“General Mandate”), provided that the number of shares issued pursuant to this General Mandate, when aggregated with the nominal value of any such shares issued during the preceding twelve (12) months, does not exceed 10% of the total issued share capital of the Company at the time of issue. This renewed General Mandate, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company.



The General Mandate procured and approved in the preceding year 2015 which was not exercised by the Company during the year, will expire at the forthcoming Fifteenth AGM of the Company.

With this renewed General Mandate, the Company will be able to raise funds expeditiously for the purpose of funding future investment, working capital and/or acquisition(s) without having to convene a general meeting to seek shareholders’ approval when such opportunities or needs arise.

(c) Resolution 12 – Proposed Renewal of Authority for Share Buy-Back

This proposed resolution, if passed, will allow the Company to purchase its own shares up to 10% of the total issued and paid-up share capital of the Company. This authority, unless revoked or varied by the Company in a general meeting, will expire at the next AGM of the Company. For further information on the Proposed Renewal of Authority for Share Buy-Back, please refer to Part A of the Circular to Shareholders dated 29 April 2016 despatched together with the Company’s Annual Report 2015.

(d) Resolution 13 – Proposed Shareholders’ Mandate

This proposed resolution, if passed, will authorise the Company and/or its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature, particulars of which are as set out in Part B of the Circular to Shareholders of the Company dated 29 April 2016 despatched together with the Company’s Annual Report 2015. This authority, unless revoked or varied by the Company in a general meeting, will expire at the next AGM of the Company.

STATEMENT ACCOMPANYING NOTICE OF FIFTEENTH ANNUAL GENERAL MEETING

Directors who are standing for re-election at the Fifteenth Annual General Meeting of the Company are:

Pursuant to Article 84 of the Articles of Association: 1. Lim Chee Hoong;2. Lee Sim Hak; and3. Ong Lock Hoo

Pursuant to Article 91 of the Articles of Association: 1. Datuk Dr Wong Lai Sum

The profiles of the above Directors who are seeking re-election are set out on pages 18 to 26 whilst the details of their securities holdings in the Company are set out on page 197 of this Annual Report.



PROXY FORMNo. of Shares held

CDS Account No.

I/We_________________________________________________NRIC/Company No.__________________ (Full name in block letters and NRIC No.)of__________________________________________________________________________________________

(Full address)

being member/members of PRG HOLDINGS BERHAD, do hereby appoint_____________________________________________________________________________________

(Full name in block letters and NRIC No.)

of _________________________________________________________________________________________(Full address)

or failing him/her______________________________________________________________________________(Full name in block letters and NRIC No.)

of _________________________________________________________________________________________(Full address)

or failing him/her, the Chairman of the meeting as my/our proxy(ies) to vote for me/us on my/our behalf at the Fifteenth Annual General Meeting of the Company to be held at Arcadia I, Level 3, Hotel Armada Petaling Jaya, Lorong Utara C, Section 52, 46200 Petaling Jaya, Selangor Darul Ehsan on Thursday, 23 June 2016 at 11.00 a.m. or at any adjournment thereof on the following resolutions referred to in the Notice of Annual General Meeting.

The proportion of *my/our holdings to be represented by *my/our proxy(ies) are as follows:

First Proxy: ____________ % Second Proxy: ____________ %

My/Our proxy(ies) is/are to vote as indicated hereunder:

RESOLUTIONS *FOR *AGAINST

1. To approve a final single tier dividend of 1.0 sen per share for the financial year ended 31 December 2015

2. To approve the payment of Directors’ fees of RM250,000 for the financial year ended 31 December 2015

3. To re-elect Lim Chee Hoong who retires in accordance with Article 84 of the Company’s Articles of Association

4. To re-elect Lee Sim Hak who retires in accordance with Article 84 of the Company’s Articles of Association

5. To re-elect Ong Lock Hoo who retires in accordance with Article 84 of the Company’s Articles of Association

6. To re-elect Datuk Dr Wong Lai Sum who retires in accordance with Article 91 of the Company’s Articles of Association

7. To re-appoint Messrs BDO as the Company’s auditors and to authorise the Directors to fix their remuneration

8. To retain Dato’ Lim Heen Peok as Independent Director9. To retain Lim Chee Hoong as Independent Director

10. To retain Dato’ Hamzah bin Mohd Salleh as Independent Director

11. To authorise Directors to issue shares pursuant to Section 132D of the Companies Act, 1965

12. Proposed Renewal of Authority for Share Buy-Back

13. Proposed Shareholders’ Mandate

*Please indicate with an “X” in the spaces provided how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his discretion.

Dated this ____________ day of ____________________ 2016

____________________________________Signature or Common Seal of Shareholder(s)

Notes:

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 15 June 2016 (General Meeting Record of Depositors) shall be eligible to attend, speak and vote at this meeting.

(ii) A proxy may but need not be a member of the Company, an advocate, an approved company auditor or a person approved by the Registrar (the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply).

(iii) To be valid, the original proxy form, duly completed must be deposited at the registered office of the Company situated at Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan, 50200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or at any adjournment thereof.

(iv) A member shall be entitled to appoint not more than two (2) proxies to attend, speak and vote at this meeting. Where a member appoints two (2) proxies, he/she shall specify the proportions of his/her shareholdings to be represented by each proxy failing which, the appointment shall be invalid.

(v) Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds.

(vi) If the appointor is a corporation this form must be executed under its common seal or under the hand of an officer or attorney duly authorised.

(vii) By submitting an instrument appointing a proxy(ies) and/ or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of this meeting

The Company SecretariesPRG HOLDINGS BERHAD(Company No: 541706-V)

Suite 11.1A, Level 11Menara Weld

76 Jalan Raja Chulan50200 Kuala Lumpur

Malaysia

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