MalaysiaStock.Biz board of directors (cont’d) Wong Zee shin Independent non-executive Director MEJ...

globaltec formation berhad (953031-A)•annual report 2015

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datuk seri panglima (Dr.)GohTianChuan,JPGroupexecutiveChairman

kong kok keongGroupDeputyexecutiveChairman/ExecutiveChairmanofAutoVGroup

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board of directors

�board of directors (cont’d)

Wong Zee shinIndependentnon-executiveDirector

MEJJENDATO’mokhtar bin perman (rtd)non-Independentnon-executiveDirector

Yong nam YunCEOofAutoVGroup/

AlternateDirectortoKongKokKeong

ash’ari bin aYubseniorIndependent

non-executiveDirector

ooi boon pinChiefExecutiveOfficer(“Ceo”)ofAICGroup/executiveDirector

chen heng munexecutiveDirector/GroupFinanceDirector

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�0 directors’ profile

datuk seri panglima (dr.) goh tian chuanSSAP, SPDK, PGDK, ASDK, JP, PhD(h) Group Executive ChairmanMalaysian, aged 54

DatukSeriPanglima(Dr.)GohTianChuan,JPisourfounderandGroupExecutiveChairman.HewasappointedtoourBoardofDirectors(“Board”)on20July2011andasamemberoftheRemunerationCommitteeon28March2012.HeisalsoaNon-ExecutiveDirector(appointedon17December2014)ofNuEnergyGasLimited(“NGY”),asubsidiaryoftheGlobaltecGroupwhichislistedontheAustralianSecuritiesExchange.

DatukSeriPanglima(Dr.)GohTianChuan,JPgraduatedfromtheRoyalMalaysiaPoliceCollegein1982andwasaSeniorPoliceOfficerattachedtothepoliceheadquartersKotaKinabalu,Sabah,Malaysiaforthirteen(13)years.Hestartedhisownbusinessafterleavingthepoliceforcein1994.Hisbusinessesatpresent,apartfromhisinvestmentsinseveralpubliclistedcompaniescoversamultitudeofindustriesfrominvestmentholdingtoplantationandpropertydevelopment.

On31May2012,amergerexercisewhichintegratedthethenAICCorporationBerhad(“AIC”),JotechHoldingsBerhad (“Jotech”) and AutoV Corporation Berhad respective group of companies under our Company(“Merger”)wascompleted.DatukSeriPanglima(Dr.)GohTianChuan,JPwastheExecutiveChairmanofAICandJotech.HewasappointedtotheboardofdirectorsofAICon15June2006.HewasalsoappointedasamemberoftheRemunerationCommitteeofAICon31July2006.HewasredesignatedasExecutiveChairmanofAICon2July2007.DatukSeriPanglima(Dr.)GohTianChuan,JPwasappointedtotheboardofdirectorsofJotechon1June2006andwasalsotheChairmanoftheRemunerationCommitteeofJotech.

On2October2006,hewasconferredthetitleofPanglimaGemilangDarjahKinabalu(“PGDK”)whichcarriesthetitleof“Datuk”bytheHonourableHeadofStateofSabah,Malaysia.OnDecember2011,hewasappointedasJusticeofthePeace(“JP”)bytheHonourableHeadofStateofMalacca,Malaysia.On26December2013,hewasconferredthetitleofSriSultanAhmadShahPahang(“SSAP”)whichcarriesthetitleof“Dato’Sri”bytheHonourableSultanAhmadShahofPahangDarulMakmur,Malaysia.On4October2014,hewasconferredtheawardSeriPanglimaDarjahKinabalu(“SPDK”)bytheHonourableHeadofStateofSabah,thehigheststateawardinSabahwhichcarriesthetitle‘DatukSeriPanglima’.

Basedon his experiences as a Senior PoliceOfficer andCorporate Leader inMalaysia, hewas conferredHonoraryDoctorateofCivilLawsbyEuropeanUniversitySwitzerlandon7April2012.

��directors’ profile (cont’d)

kong kok keongGroup Deputy Executive Chairman/Executive Chairman of AutoV GroupMalaysian, aged 61

KongKokKeongwasappointedtoourBoardon28March2012astheGroupDeputyExecutiveChairmanandistheExecutiveChairmanofAutoVGroup.HewasappointedaNon-ExecutiveDirectoron21August2014andlaterredesignatedasNon-ExecutiveChairmanofNGYon17December2014.

KongKokKeongobtainedhisB.A(Honours)inBusinessStudiesfromLeicesterPolytechnic,UnitedKingdominJuly1979.HestartedhiscareerwithBinderHamlyn(CharteredAccountants)inUnitedKingdomasanelectronicdataprocessingsupervisorfromSeptember1979toJanuary1983.HethenreturnedtoMalaysiaandjoinedRashidHussainSecuritiesSdnBhdasaFinanceManagerfromApril1983toAugust1984.HemovedontoLarutTinFieldsBhdasanaccountantfromSeptember1984toAugust1985.FromSeptember1985toOctober1987,hewastheFinancialControllerofKimaraSecuritiesSdnBhdbeforejoiningFountainIndustriesSdnBhdasanaccountant from January 1988 toDecember 1988. Subsequently, hewas aDirector of Visionplan Systems(M)SdnBhdfromJanuary1989toApril1990.FromMay1990toMarch1992,hewasacommissioneddealer’srepresentativeforArab-MalaysianSecuritiesSdnBhd.HelaterjoinedInnosabahSecuritiesSdnBhdandservedasanExecutiveDirector fromApril1992toDecember2001.Duringthatperiod, inSeptember1993,hewasappointedasaDirectorofSititrust&AdministratorLtd,aLabuanoffshorecompanytowhichhestillserves,asadirectoruntiltoday.

KongKokKeongistheExecutiveChairmanofAutoVsince15April2006.

ooi boon pinCEO of AIC Group/Executive DirectorMalaysian, aged 57

ooiBoonPinwasappointedtoourBoardon28March2012asanexecutiveDirectorandheistheCeoofAICGroup.

He graduated with an Honours Degree in Manufacturing technology from the national Institute for HigherEducation(UniversityofLimerick),Irelandin1981.Whilestudyingforhisdegree,hejoinedAnalogDevicesB.V.,Ireland,in1978,acompanyinvolvedindesignandwaferfabrication,assemblyandtestofsemiconductors,asaProductDevelopmentEngineerand laterasaProcessEngineer intheassemblydepartment.UponhisreturntoMalaysiain1981,hejoinedMicro-MachiningsdnBhd,asaQualityAssuranceengineerwherehewasinchargeofqualityassuranceintoolroomandleadframestampingfacility.HewaspromotedtothepositionofProjectEngineeringManagerandwasresponsibleforthedevelopmentofnewtooldesignsandend-of-lineassemblyequipmentfromdesigntomanufacturing.In1985hefoundedProdelconandisitsManagingDirectorfrom1996tillnow.HewasanExecutiveDirectorofJotechsince30April1997butwasredesignatedasaNon-IndependentNon-ExecutiveDirectoron20August2008.He isalso theChairmanof the TechnicalAdvisoryCommitteeforAppliedEngineeringatthePenangSkillsDevelopmentCentre(“PSDC”)andacouncilmemberofPSDC.HewasawardedthePingatKelakuanTerpujibytheGovernorofPenanginJuly2006.


�� directors’ profile (cont’d)

chen heng munExecutive Director/Group Finance DirectorMalaysian, aged 45

ChenHengMunwasappointedtoourBoardon28March2012asanexecutiveDirectorandheisalsoourGroupFinanceDirector.HeisalsoaNon-ExecutiveDirector(appointedon1January2015)ofNGY.

Prior to passing the professional exams conducted by the then Malaysian Association of Certified PublicAccountantsin1995,ChenHengMunworkedforKPMG,aninternationalaccountingfirmfromJanuary1991toFebruary1996.HestartedasanAuditAssistantinKPMGandleftasanAuditSupervisor.Subsequently,hejoinedAICasGroupAccountantinFebruary1996andwasappointedtotheboardofAICon1August2007asanExecutiveDirector/ChiefFinancialOfficer.HewasanIndependentNon-ExecutiveDirectorofJotechfrom3January2007to2July2007.HewasappointedtotheBoardofAutoVon26May2008asNon-IndependentNon-ExecutiveDirector.HeisamemberoftheMalaysianInstituteofAccountants,MalaysianInstituteofCertifiedPublicAccountantsandCertifiedPublicAccountants,Australia.

ash’ari bin aYubSenior Independent Non-Executive DirectorMalaysian, aged 73

Ash’aribinAyub isour Senior IndependentNon-ExecutiveDirectorandhewasappointed toourBoardon28March2012.HeisalsotheChairmanoftheAuditCommittee,RemunerationCommitteeandNominatingCommittee.

HepassedtheprofessionalexaminationofthethenMalaysianAssociationofCertifiedPublicAccountantson24June1967.He isamemberof theMalaysian InstituteofCertifiedPublicAccountantsandtheMalaysianInstituteofAccountants.He startedhiscareerwithCoopersBrothers&Coasanarticledclerk in1961andwas laterpromotedtoaqualifiedauditassistant.HeservedinCoopersBrothers&Countil1970.Thereafter,hejoinedvariousorganisationsinthegovernmentandprivatesector.HewasaseniorpartnerinCoopers&Lybrandforabout20yearsfrom1974untilhisretirementin1994.Currently,heisanIndependentNon-ExecutiveDirectorofMetrodHoldingsBerhadandBCBBerhad.

He has been the Independent Non-Executive Director of AutoV since 20 February 2001. He was also theChairman of the Audit Committee and Remuneration Committee of AutoV and was a member of theNominatingCommitteeofAutoV.SubsequenttotheMerger,hehasresignedfromAutoVon30June2012.

��directors’ profile (cont’d)

Wong Zee shinIndependent Non-Executive DirectorMalaysian, aged 40

WongZeeshinisourIndependentnon-executiveDirectorandhewasappointedtoourBoardon28March2012.HeisamemberoftheAuditCommittee,NominatingCommitteeandRemunerationCommitteesince28March2012.

HegraduatedwithaBachelorDegreeinFinanceandAccountingfromtheUniversitytechnologyofsydney,AustraliainJuly1999.HeisamemberoftheMalaysianInstituteofAccountantsandCertifiedPublicAccountants,Australia.HestartedhiscareerinErnst&Young,aninternationalpublicaccountingfirminSandakan,SabahfromDecember1999to2004.InAugust2004,hejoinedCepatwawasanGroupBerhadasanAccountantandlaterjoinedSogomaxSdnBhdasanAccountantinJune2006.SubsequentlyinDecember2009topresent,hejoinedMalbumiEstateSdnBhdastheirGroupAccountant.

Hewasappointedto theBoardofJotechon2July2007.Hewas the IndependentNon-ExecutiveDirectorofJotechandwasalsotheChairmanoftheAuditandNominatingCommitteesandwasamemberoftheRemunerationCommittee.SubsequenttotheMerger,hehasresignedfromJotechon18June2012.

MEJJENDATO’MOkhTARbINPERMAN(RTD)Non Independent Non Executive DirectorMalaysian, aged 62

MejJenDato’MokhtarBinPerman(Rtd)isourNon-IndependentNon-ExecutiveDirectorandhewasappointedtoourBoardon10June2013.HejoinedtheMalaysianArmyinJuly1970.AftercompletinghismilitarytrainingattheRoyalMilitaryCollege,hewascommissionedintotheRoyalMalaysianArtilleryRegiment.DuringhisserviceintheArmy,hewassenttoattendthevariousacademicandprofessionalcourseslocallyaswellasoverseas.Inhisnearly40yearsofservice intheArmy,MejJenDatoMokhtar(Rtd)hasservedinbothcommandandstaffappointmentsatthevariousunits,formationsandtheMinistryofDefence.HehasalsorepresentedtheMalaysianArmyat thevarious internationalconferences, seminarsandworkshops locallyandoverseas.HislastappointmentintheMalaysianArmywasastheGeneralOfficer-In-CommandoftheTrainingCommand,responsiblefortheindividualtrainingofallMalaysianArmyofficersandsoldiers.HeretiredfromtheMalaysianArmyinDecember2010.


�� directors’ profile (cont’d)

Yong nam YunCEO of AutoV Group/Alternate Director to Kong Kok KeongMalaysian, aged 49

YongNamYunwasappointedasanalternatedirectortoKongKokKeongon6January2014andheistheCEOofAutoVGroup.

Heobtainedhis LCCIDiploma from theJasaCollege,Malaysia in1987.Hehasbeen involved inhis familybusinessessince1987,startingwithKumLoongEnterpriseSdnBhdasFinanceDirectorfrom1987to1998andlaterastheChiefOperatingOfficerinKumLoongPlasticIndustriesSdnBhdfrom1998to2009.InFebruary2009,heformedKLPIResourcesSdnBhdandbecametheChiefExecutiveOfficer.YongNamYunthenco-foundedProreka(M)SdnBhdinApril2000andheldthepositionofChiefExecutiveOfficer.HewasappointedasanExecutiveDirectorofAutoVon28December2011.YongNamYunisalsoadirectorandshareholder inKLPIResourcesSdnBhd,whichprovidescubicprintingandpaintingservices.

additional information

Conflictofinterest/familyrelationshipswithanyDirectorand/ormajorShareholdernoneConvictionsforoffences(withinthepast10years,otherthantrafficoffences)noneParticularsofmaterialcontractsoftheGroup,involvingdirectorsandmajorshareholders’interestnone

15ExEcutivE chairman’S StatEmEnt

Datuk Seri Panglima (Dr.) Goh tian chuan, JPGroup Executive Chairman

Dear ShareholdersOn behalf of the Board of Directors, I would like to present to you the 2015 annual report of your Company.

GlobaltEc formation bErhaD (953031-A) • annual report 2015

16 ExEcutivE chairman’S StatEmEnt (cont’D)

ovErviEw

The global economy expanded at a moderate pace in 2014/2015, with uneven growth across and within regions. As the year 2014/2015 progressed, downside risks to global growth re-emerged following geopolitical developments in Eastern Europe and the Middle East, weaker-than-expected economic activity in a number of major economies, and rising concerns over the growth prospects of commodity-producing emerging economies amid the significant decline in the prices of oil and other commodities. In addition, the marked increase in global financial market volatility and the sharp decline in oil prices towards the end of 2014 further heightened the downside risks emanating from the external environment. Tracking the slide in oil prices, the Ringgit also weakened against the US Dollar.

The electronics industry, being one of the industries in which the Group operates, is under constant change and intense competition and will result in downward pressure on margins. Aside from this, this has undoubtedly been one of the tougher years for the Malaysian car industry. Apart from global factors, there have also been local issues, the most significant being the introduction of the Goods & Services Tax, which have impacted new vehicle sales. The Total Industry Volume (“TIV”) for the first 6 months of 2015 were 3.3% lower than for the same period in 2014 – 322,184 units versus 333,156 units. Flagging economic growth in China, where smartphone sales exceed 400 million units each year, is posing concerns that the global semiconductor industry may face a slowdown as a consumption boom of the world’s second-largest economy is punctured. Adding to the gloomy outlook, global semiconductor sales in July 2015 registered a decline, after posting year-on-year growth for 26 consecutive months. In July, worldwide semiconductor sales were US$27.9 billion (RM120.3 billion), dipping 0.9% from US$28.1 billion in July 2014. In fact, growth in global semiconductor sales has been decelerating since early last year.

During the financial year, the Group ventured into the oil and gas exploration and production (“E&P”) and services business with primary focus in the unconventional oil and gas, and this business was aptly named as the Energy Segment. The Group acquired a 55% direct interest in NuEnergy Gas Limited, (“NGY”), a company listed on the Australian Securities Exchange. In the second quarter of 2015, NGY signed a conditional share purchase agreement to acquire the entire interest in Dart Energy (Indonesia) Holdings Pte Ltd (“DEIH”). The proposed acquisition of DEIH is expected to be completed by fourth quarter of 2015. NGY and DEIH have secured strategically located coal bed methane (“CBM”) in areas where there is a significantly undersupplied gas and power market and where there is abundant energy infrastructure to take gas and/or power to the market. NGY and DEIH group of companies have a total of 6 operated production sharing contracts (“PSC”) and 1 joint evaluation (“JE”) in Indonesia. The Group is expected to boost its PSC positions in South Sumatra by integrating DEIH’s and NGY’s PSCs to potentially operate a large scale CBM development which is unprecedented. We believe these PSC assets are potentially world class CBM plays, and can be commercialised quickly. It is worth noting, the Energy Segment comprises a highly experienced management team that can add value by optimising development and production plans and offering synergic services like drilling, completion and production optimisation in the oil and gas E&P and services industry.

17ExEcutivE chairman’S StatEmEnt (cont’D)

ovErviEw (cont’D)

As part of the Group’s effort to restructure it’s business, the Group had during the year divested and announced to cease some of its non-core and/or non-profitable businesses. In doing so, the Group has reduced its exposure to the low margin metal stamping business with the divestment of Jotech Metal Fabrication Industries Sdn Bhd (“JMF”) and announced the cessation of operations of GuangDong Jotech Kong Yue Precision Industries Ltd (“JKY”). In addition, the Group has also divested AIC Properties Sdn Bhd (“AICP”), a non-operating subsidiary, which owns a piece of vacant land in Sabah. These divestments have strengthened our liquidity position which in turn enables the Group to solidify its core businesses. In accordance with the Malaysian Financial Reporting Standards, the after-tax results of these businesses which have been divested/ceased were classified as discontinued operations and shown as a single line item in the profit or loss.

The Group faced a very challenging business environment during the financial year. The semiconductor business continued to incur losses whilst the automotive business was lacklustre. On the other hand, the Precision Machining, Stamping and Tooling (“PMST”) Division remained profitable but was again not enough to stem those losses.

Nevertheless, your Board is fully committed in turning around the Group and believes the Group’s financial reserves and expertise in the diverse businesses as well as the business networks will be a key strength that can help propel the Group towards achieving its vision. In addition, through relentless efforts of the Group in seeking new opportunities, we believe the new ventures in the Energy Segment will help the Group to reach new heights.



financial rEviEw

Revenue from continuing operations for financial year 2015 fell RM19.6 million from prior year to RM299.4 million. This decrease was attributable to both the Integrated Manufacturing Services (“IMS”) and Resources segments. The drop in the IMS Segment’s revenue of RM18.6 million was due to a decrease in revenue contributions from all divisions, with the Automotive Division registering the steepest decline as a result of overall weak demand. The decrease in revenue contribution from the Resources Segment was due to a decline in the prices of oil palm fresh fruit bunches (“FFB”).

The Group’s revenue and net results by segment/division for the financial year are summarised as follows:

Forfinancialyearended30June Revenue Net(loss)/profit 2015 2014 2015 2014 amount amount amount amountSegment/Division rm’000 % rm’000 % rm’000 rm’000

PMST 91,793 28 93,263 25 9,448 7,754Semiconductor 37,842 11 42,382 12 (3,615) (19,703)Automotive 162,935 49 175,553 48 (9,057) (3,919)

IMS 292,570 88 311,198 85 (3,224) (15,868)

Oil palm plantations 6,568 2 7,386 2 (326) 165

Resources 6,568 2 7,386 2 (326) 165

Energy 12 * - - (1,923) -

Investmentholding 218 * 379 * (37,528) (21,203)

Continuingoperations 299,368 90 318,963 87 (43,001) (36,906)Discontinued operations 33,562 10 49,348 13 1,704 (280)Consolidation adjustments (213) (373) - -

Total 332,717 100.0 367,938 100.0 (41,297) (37,186)

Note:* Negligible


financial rEviEw (cont’D)

For the current financial year, the net loss from continuing operations increased from RM36.9 million in prior year to RM43.0 million. Included in the current year net loss from continuing operations was a non-operational net accounting charge (comprising impairments on goodwill, customer relationships, plant and equipment, and offset by gain on bargain purchase) amounting to RM34.8 million. Whereas included in the prior year was a net accounting charge (comprising impairments on goodwill and plant and equipment but set off by deferred tax liability reversal and fair value gain on biological assets) amounting to RM27.5 million. Excluding these net accounting charges, the Group’s results from continuing operations improved marginally from a net loss of RM9.9 million to a lower net loss of RM8.3 million.

Save for the IMS Segment, all the segments registered a dip in their results. The IMS Segment registered a lower net loss due mainly to the Semiconductor Division registering a decrease in its net loss, underpinned by a lower impairment loss on plant and equipment. Except for the Automotive Division, all the other IMS divisions registered an improvement in their results for the current year. The net loss from the Automotive Division, however, increased in tandem with the decrease in its revenue. The Energy Segment which was acquired during the year incurred a net loss as it has not commenced commercial production. The Investment Holding Segment registered an increase of RM16.3 million in its net losses due mainly to higher impairment loss on goodwill and customer relationships, in aggregate, of RM24.6 million but was partially offset by gain on bargain purchase of NGY of RM9.2 million.

Included in the net profit from the discontinued operations for the current year was the net gain on disposal of AICP and JMF amounting to RM8.3 million. Excluding this net gain, the discontinued operations incurred a higher net loss for the current year vis-à-vis the previous year, as a result of weak demand.

Despite excluding the cash and cash equivalents of discontinued operations at end of current financial year, the cash and bank balances of the Group have been growing steadily year on year, from RM38.2 million as at financial year 2013 to RM43.2 million as at financial year 2014 to RM59.2 million as at end of current financial year due mainly to the positive cash flows from operating activities. In addition, the Group’s bank borrowings decreased from RM56.0 million to RM47.4 million resulting in gearing ratio declining to 0.15 times from 0.16 times in the prior year. Furthermore, current ratio improved to 2.1 times from 1.8 times in the prior year.




IMS SegMent

PmSt DiviSion

The PMST Division is involved in precision machining and automation (“PMA”) and precision metal stamping and tooling (“PST”).

During the financial year, the PMST Division reported a marginal slide in revenue from RM93.3 million in the prior year to RM91.8 million for the current financial year due to some weakness experienced in demand. However, net profit grew from RM7.8 million to RM9.4 million as a result of overall favourable product mix.

PMA’s revenue increase 6% as compared to the preceding year’s revenue of RM42.7 million. The increase in revenue was driven by expansion in overseas market and favourable growth in photonics, radio frequency microwave products and medical devices. PMA also benefited from favourable foreign currency exchange rate in the export market and will continue to maintain its competitive edge with high-quality products, expertise in engineering process and production. PMA will strive to improve the efficiency and utilisation of its installed capacity by utilising customised robotic handling systems in its line as well as reduce its fixed and variable costs. PMA is in the planning stage to build a new facility at Bukit Minyak Industrial Park to cater for the future increase in demand for high precision parts and assemblies from its multi-national customers.

However, revenue from PST dropped by 8% as compared to preceding year’s revenue of RM50.7 million. The decrease in profitability was mainly due to the decrease in average selling prices as a result of intense competition. The increasing labour costs due to inflation and minimum wages requirement in Indonesia along with weakening of the Indonesian Rupiah have also eroded profit margins.

automotivE DiviSion

The Malaysian Automotive Association (“MAA”) has released the official TIV for the year 2014. A total of 666,465 units were sold, a slight increase from 2013’s 655,793 units. However, the TIV recorded for first half of year 2015 is only 322,184 units on the back of more stringent loan approval policies coupled with weaker consumer sentiments and more intense competition. Its major customer, Proton has its market share eroded to 15.6% for the first half of 2015 compared to 17.4% in 2014.

As the Automotive Division is heavily reliant on Proton, the Automotive Division’s revenue fell from RM175.6 million to RM162.9 million year on year. Consequently, the Automotive Division’s net loss widened from RM3.9 million in the prior year to RM9.1 million for the current financial year. In addition, costs have escalated due to the sharp decline of the Ringgit against the United States of America (“USA”) Dollar (“USD”), as some major components are imported.



IMS SegMent (cont’d)

automotivE DiviSion (cont’D)

MAA is revising 2015’s TIV forecast downwards by 0.5% to 670,000 units from 680,000 units. On this note, the Automotive Division has taken steps to be more vigilant and will streamline production activities by reducing its overheads and improving efficiencies. Continuous efforts are also being made to procure new customers and markets. Most recently, there seems to be a growing trend of renewed buying interest in cars made by Proton as a result of increasing prices of imported and foreign marque cars (which have lower local content) due mainly to the weakening of the Ringgit against major currencies. However, the long term effects of this are still yet to be seen. SEmiconDuctor DiviSion

The semiconductor business persists to be challenging as can be seen by the Semiconductor Division registering a year on year decline in its revenue from RM42.4 million for financial year 2014 to RM37.8 million for the current financial year due to a decline in demand and loading. Nevertheless, the Semiconductor Division’s net loss declined from RM19.7 million to RM3.6 million underpinned by a decrease in the impairment loss on plant and machinery amounting to RM12.2 million but was offset by a decrease in deferred tax income of RM4.8 million. The improvement was also attained through a favourable product mix, better cost model and the strengthening of the USD against Ringgit Malaysia.

The Semiconductor Division will continue to enhance its portfolio of products packages and services to be more in line with the faster growing segments of the semiconductor industry whilst de-emphasising the legacy or older packages and products.

ReSouRceS SegMent

The Plantation Division registered a revenue of RM6.6 million for this financial year which is RM0.8 million or 11% lower than the RM7.4 million recorded in the previous financial year as a result of lower average FFB prices. The Plantation Division incurred a net loss of RM0.3 million as compared to a net profit of RM0.2 million for the prior year. This was mainly attributable to a decrease of RM0.6 million in the fair value gain on biological assets.



financial rEviEw (cont’D) eneRgy SegMent

oil anD GaS E&P anD SErvicES

As 2014/2015 progressed, the oil and gas industry was shocked with the sudden steep decline in crude oil prices beginning in second half of 2014. The price of world benchmark Brent crude declined by about 51% from a high of USD116 a barrel in June 2014 to USD62 a barrel in June 2015 and is now trading at below USD50 a barrel. Fears of a slowdown in drilling contracts grew as oil and gas companies softened the exploration and production activities globally.

The Energy Segment, which has yet to commence commercial production incurred a net loss of RM1.9 million, constituted mainly of administrative and personnel expenditure. As at end of the financial year, the carrying value of the exploration and evaluation expenditure amounted to RM86.2 million.

Upon the completion of the proposed acquisition of DEIH, the Energy Segment will have 6 PSCs and the right to one JE, thereby reinforcing its position and strategy to acquire, explore, appraise and develop CBM acreage in Indonesia. The PSCs and JE are listed below:

During the year, the Energy Segment focussed on its CBM exploration and drilling activities whereby 3 core wells in Tanjung Enim PSC (being one of DEIH’s PSC) were successfully drilled to their target depth of 300 metres. Logs of the coal seams confirmed total thickness between 40 to 49 metres with over 13 metres from a single seam. Gas saturation analysis tested across all of the seams from the 3 core wells demonstrated gas content ranging between 80 and 110 scf/ton as certified by PT Sucofindo, the official certifier in Indonesia. These results were highly encouraging as they show geological parameters similar with some of the world’s successful commercialised CBM basins. With these results, the Energy Segment looks forward to intensify its drilling campaigns in the next quarter for the early establishment of gas reserves.

As for the Rengat PSC, the first exploratory well was spud towards the end of June 2015 and successfully drilled to the target depth of 495 metres. Both mud and wireline logging have confirmed prognosis of identifiable coal seams to their depth. However, the targeted seams revealed low economic significance. The Energy Segment will continue to log and conduct permeability test on coal formations to identify and map coal continuity across this basin and to understand the reservoir characteristics for further development.

nGY’s PScs PSC Participatinginterest Location1. Muara Enim 40% South Sumatra2. Muara Enim II 30% South Sumatra3. Rengat 100% Central Sumatra

DEIH’sPSCsandJE PSC Participatinginterest Location1. Tanjung Enim 45% South Sumatra2. Muralim 50% South Sumatra3. Bontang Bengalon 100% East Kalimantan

JE Location 1. Bungamas South Sumatra


ProSPEctS

Entering financial year 2016, the Group remains to be cautiously optimistic about its outlook, despite continuing depressed conditions in the economy. Short-term global economic uncertainties have not significantly changed the medium to long-term outlook for the markets the Group serves. According to research done at ExxonMobil, over the next 25 years, the population of our planet will increase from 7 billion to about 9 billion and the size of the global economy will more than double. Against this backdrop of global growth, it is estimated that 60% of the energy required will be supplied by oil and natural gas. In fact, it is expected that natural gas will surpass coal as the second largest fuel source. Premised on the above, we see this as an opportunity to thrust forward in our expansion in the oil and gas industry at relatively lower costs.

The uncertainty of the global economy growth and lackluster local business environment continues to pose a challenging outlook for the Group’s businesses in the IMS Segment. In addition to the relatively small contribution from the plantation division, the volatility of crude palm oil prices makes the plantations division an unsteady source of income.

forwarD PlanS anD StratEGiES

Your Board shares your concerns and urgency to return the Group to profit in the ensuing years. On this note, efforts are currently being undertaken to expedite the oil and gas E&P business to achieve reserve bookings as soon as possible. Your Board is confident that the Energy Segment will contribute positively to the Group’s long term performance and enhance the Group’s long term growth potential. Also, there are ongoing plans to further integrate the Group’s manufacturing business primarily in the automotive sector. In addition, efforts are underway for the automotive business to expand regionally, particularly to Indonesia, and diversify its customer portfolio. In this aspect, the Automotive Division has initiated many discussions with large multinational car manufacturers as well as initiated collaborations with the suppliers to these large multinational car manufacturers. Moreover, as the profitable PMA business is running at close to its maximum capacity, it is planning to build a new facility which will expand its existing capacity and will be able to cater for any increased demand for high precision machined components by its multi-national customers. Riding on the growth of the automotive industry in Indonesia, the PST business will focus on tapping into higher value added metal stamped automotive products/accessories by leveraging on the expertise and network of the Automotive Division and widen its product range as well as customer base to ensure the sustainable growth of its revenue and profit contribution to the Group.

Your Board is constantly on the lookout for opportunities to further divest or down size or cease its non-profitable and/or non-core manufacturing assets and business.



corPoratE GovErnancE anD invEStor rElationS

Our Group deems it our top priority in role-modelling ourselves in maintaining high standards in corporate governance practices in managing our businesses and affairs within the Group. To achieve these objectives, your Board and key management staff have been proactively educating ourselves in order for the Group to comply fully with the principles and best practices set out in the Malaysian Code on Corporate Governance and developments of internationally recognised best governance practices. The Group remains committed to espouse and maintain its good corporate governance track record through timely and objective reporting and constant communication with all its stakeholders.

corPoratE Social rESPonSibilitiES (“cSr”)

Your Board believes in the importance of CSR in that the improvement in the conditions surrounding our stakeholders, employees, society and the environment, which is the embodiment of CSR, is vital to the growth of the Group. Your Board recognises that acting in a responsible and sustainable manner creates new opportunities, enhances investor value, and improves social and environmental returns.

aPPrEciation

I wish to express my sincere thanks to all our shareholders for your continued support and wish to reiterate that your Board is committed to improve the Group’s performance and enhance shareholders’ values.

I would like to express our sincere gratitude to our valued customers, business partners, bankers and the relevant government authorities for their invaluable support.

I also wish to express my gratitude to my fellow Board members, the management and staff for their professionalism and undying commitment to steer the Group towards excellence.

Datuk Seri Panglima (Dr.) Goh tian chuan, JPGroup Executive Chairman23 October 2015

25

The Board of Directors (“Board”) is committed to ensure that the highest standards of corporate governance are practiced throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholder value and the financial performance of the Group.

Set out below is a statement of how the Group has applied the principles of the Malaysian Code on Corporate Governance 2012 (the “Code”), having regard to the recommendations stated under each principle. The Group has applied the principles of the Code, having regard to the recommendations stated under each principle.

SECTION 1: DIRECTORS

THE BOARD OF DIRECTORS

An effective Board leads and controls the Group. The Board meets at least four times a year, with additional meetings convened as necessary. In addition, the Board also attends general meetings and meetings with management from time to time. All Board members bring an independent judgement to bear on issues of strategy, performance, resources and standards of conduct.

The Board held four (4) Board Meetings during the financial year. The details of attendance of each individual Director are as follows:

Name Meetings Attended Datuk Seri Panglima (Dr.) Goh Tian Chuan, JP (“Datuk Seri Panglima (Dr.) Goh”) 4/4Kong Kok Keong 4/4Ooi Boon Pin 4/4Chen Heng Mun 4/4Ash’ari bin Ayub 4/4Wong Zee Shin 4/4Mej Jen Dato’ Mokhtar bin Perman (Rtd) 4/4Yong Nam Yun (alternate to Kong Kok Keong) 4/4

The Board has delegated specific responsibilities to three subcommittees, namely Audit Committee, Nominating Committee and Remuneration Committee. All committees have written terms of reference and procedures, and the Board receives reports of their proceedings and deliberations. These Committees have the authority to examine particular issues and report back to the Board with their recommendations. The ultimate responsibilities for the final decision on all matters, however, lie with the Board.

Director(s), prior to accepting new directorships in other companies outside the Group, must inform the Group Executive Chairman of the Board of such appointment and an indication of the time the Director(s) will spend on the new appointment.

BOARD CHARTER

The Board has adopted a charter, which amongst others, provide guidance to the Board in discharging their roles, responsibilities and duties. The Board Charter also inter-alia outlines the balance and composition of the Board, the Board’s authorities, schedule of the matters reserved for the Board, the establishment of Board committees and the processes and procedures in convening board meetings. The Board Charter is reviewed annually and is posted on the Company’s website.

CORPORATE GOVERNANCE STATEMENT

GlOBAlTEC FORMATION BERHAD (953031-A) • Annual Report 2015

26

SECTION 1: DIRECTORS (cont’d)

BOARD BAlANCE

The Board, headed by the Group Executive Chairman currently has eight (8) members, comprising four (4) Executive Directors, one (1) Non-Independent Non-Executive Director, two (2) Independent Non-Executive Directors and one (1) alternate director. Together, the Directors bring a wide range of business and financial experience relevant to the Group. A brief description of the background of each Director is presented on pages 10 to 14.

Datuk Seri Panglima (Dr.) Goh is the Group Executive Chairman and Chief Executive Officer (“CEO”) of the Resources Segment while Kong Kok Keong is the Group Deputy Executive Chairman and Executive Chairman of AutoV Group and Ooi Boon Pin serves as CEO of AIC Group. There is a clear division of responsibility for these roles to ensure balance of power and authority.

The Board takes cognisance that the Code recommends that where the chairman of the Board is not an independent director, majority of the Board must comprise independent directors. However, the Board has decided to depart from this recommendation as the Board acknowledges that the Group Executive Chairman is the single largest shareholder and there is the advantage of shareholder leadership and a natural alignment of interest. In respect of potential conflicts of interest, the board is comfortable that there is no undue risk involved as all related party transactions are disclosed and strictly dealt with in accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”). In addition, the presence of Independent Directors ensures that there is independence of judgement.

The role of the Non-Executive Directors is to provide independent and objective views, constructively challenge and actively play a part in the development of the business objectives and strategies of the Group, ensure effective check and balance in the proceedings of the Board and that no individual has unrestricted power or influence over any Board decision. Ash’ari bin Ayub, the Audit Committee Chairman, is the Senior Independent Non-Executive Director to whom concerns may be conveyed.

The Company considers that the complement of Non-Executive Directors provides an effective Board with a mix of knowledge and broad business and commercial experience. This balance is particularly important in ensuring that the strategies proposed by the executive management are fully discussed and examined, and take into account of the long term interests of the Company. The Board is satisfied that the current Board composition fairly reflects the interest of minority shareholders in the Company.

The Board has formalised and adopted a Gender and Workplace Diversity policy, which encompasses diversity in, amongst others gender, age, ethnicity and cultural background. The Directors, whose experience, knowledge and skills are entrenched in various industries reflect the diverse nature of the Group’s operations. However, achieving gender diversity is challenging, particularly in the industries the Group is in. Notwithstanding this, The Board will work towards introducing the female composition of our Board when suitable candidates are identified.

In addition, the Board takes cognisance of the Code’s recommendation that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. As at the end of the financial year, all the Independent Directors have been in service for less than four (4) years.

SUPPlY OF INFORMATION

All Directors review Board reports prior to the Board meeting. These papers are issued in sufficient time to enable the Directors to obtain further explanations, where necessary, in order to be briefed properly before the meeting. The board paper includes, among others, the following details:

• Quarterly performance report of the Group

CORPORATE GOVERNANCE STATEMENT (CONT’D)

27


SUPPlY OF INFORMATION (cont’d)

• Major risk, operational and financial issues• Business outlook• Material legal matters • Information on related party transactions • Circular resolutions passed• Announcements and press releases made• Internal control concerns• Policies and governance matters

In addition, there is a schedule of matters reserved specifically for the Board’s decision, including the approval of corporate plans, acquisitions and disposals of assets that are material to the Group, major investments and changes to senior management and control structure of the Group, including key policies, procedures and authority limits.

All Directors have access to the advice and services of the Company Secretaries and take independent professional advice, if necessary, at the Company’s expense. Before incurring such professional fees, the Director concerned must consult with the Group Executive Chairman.

AUDIT COMMITTEE

The Audit Committee report is presented on pages 35 to 40 of this annual report.

APPOINTMENTS TO THE BOARD

The Code endorses, as good practice, a formal procedure for appointments to the Board, with a Nominating Committee making recommendations to the Board. The Code, however, states that this procedure may be performed by the Board as a whole, although, as a matter of best practice, it recommends that these responsibilities be delegated to a committee.

New appointees will be considered and evaluated by the Nominating Committee. The Nominating Committee will then recommend the candidates to be approved by the Board. The Company Secretary will ensure that all appointments are properly made, that all information necessary is obtained, as well as all legal and regulatory requirements are met.

NOMINATING COMMITTEE

The Nominating Committee consists entirely of Non-Executive Directors, majority of whom are independent, and the members are as follows: • Ash’ari bin Ayub (Chairman)• Wong Zee Shin• Mej Jen Dato’ Mokhtar bin Perman (Rtd)

The Chairman of the Nominating Committee is in line with the Code as the Code recommends that the Senior Independent Director be the Chairman of Nominating Committee.



28

DIRECTORS’ TRAINING

As an integral element of the process of appointing new directors, the Nominating Committee ensures that there is appropriate orientation and education program for new Board members. This is supplemented, where appropriate, by visits to key locations and meetings with key senior executives. All Directors have attended the Mandatory Accreditation Programme as prescribed by Bursa Malaysia.

During the financial year, the Directors received briefings and updates on the Group’s businesses, operations, risk management, internal controls, corporate governance, finance and any changes to relevant legislation, rules and regulations. The Directors are also encouraged to attend seminars and briefings in order to keep themselves abreast with the latest developments in the business environment and to enhance their skills and knowledge.

During the financial year, the Directors collectively or on their own, attended various training programmes, seminars, briefings and/or workshops as follows:

Director Name of Conferences, Seminars and Training Programmes Attended

Datuk Seri Panglima (Dr.) Goh - Directors Breakfast Series with Beverly Behan – Great Companies Deserve Great Boards - Board Chairman Series: The Role of the Chairman

Kong Kok Keong - Parts Manager System Integration Training - Leadership Transformation Training

Ooi Boon Pin - SEMICON WEST 2014 - Invest Penang Seminar - Khazanah Megatrends Forum 2014 - Japan International Machine Tool Fair 2014 - Blackrock Economic Outlook - PSDC Strategic Review Meeting - Working visit to Modular Automation and Tornier Macroom

Chen Heng Mun - Directors Breakfast Series with Beverly Behan – Great Companies Deserve Great Boards - 2014 National Conference on Internal Auditing – Embracing Change - KPMG Tax Summit 2014



NOMINATING COMMITTEE (cont’d)

The primary objectives of the Nominating Committee are to evaluate suitability of candidates and make recommendations to the Board on all new Board appointments. The Nominating Committee is also empowered to assess the performance of the Directors, effectiveness of the Board and Board Committees as a whole.

The activities of the Nominating Committee during the year were as follows:

• Review the composition of the Board and the board committees;• Review the performance and effectiveness of all the directors; and• Review and recommend to the Board on the re-election of directors retiring, at the forthcoming Annual General Meeting.

29


DIRECTORS’ TRAINING (cont’d)


The Company recognises the importance of continuous professional development and training for its directors. The Board as a whole has undertaken an assessment of the training needs of each director after taking into account the training programmes the Directors had attended in the past three (3) years and the qualification, role, responsibilities, knowledge and experience of the respective Directors. The proposed training programmes encompass areas related to the industry or businesses of the Group, governance, risk management and the relevant regulations related to the Group.

RE-ElECTION

In accordance with Article 77 of the Company’s Articles of Association, at the first annual general meeting (“AGM”), all Directors shall retire from office and at the AGM in every subsequent year, one-third (1/3) of our Directors or, if the number of Directors is not three (3) or a multiple of three (3), the number nearest to one-third (1/3) shall retire from office and be eligible for re-election provided always that all our Directors shall retire from office once at least in each three (3) years but shall be eligible for re-election. The Directors to retire in each year shall be those who have been longest in office since their last election.

Article 83 of the Articles of Association of the Company further states that any director newly appointed shall hold office only until the next following AGM and then shall be eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotation at that AGM.

Directors over seventy years of age shall hold office until the next AGM but shall be eligible for re-appointment in accordance with Section 129(6) of the Companies Act, 1965.

The following Directors are subject to re-election at this forthcoming AGM:

• Datuk Seri Panglima (Dr.) Goh (Article 77)• Ooi Boon Pin (Article 77)• Ash’ari bin Ayub (Section 129(6) of the Companies Act, 1965)

Director Name of Conferences, Seminars and Training Programmes Attended

Ash’ari bin Ayub - KPMG Tax Summit 2014 - Getting to know GST - Nominating Committee Programme 2: Effective Board Evaluations - CSR and Company Performance

Wong Zee Shin - Institute of Approved Company Secretaries – Companies Commission of Malaysia Training Academy (“IACS – COMTRAC”) Seminar 2014 - GST: From A to Z for Oil Palm Industry - Seminar Percukaian Kebangsaan 2014 - Malaysian Institute of Accountants – Getting Accounting Right for GST in Malaysia - WWF Malaysia – Sustainable Palm Oil – The Way Forward - Malaysian Institute of Accountants – Accounting for GST – A Complete Guide to Accounting for GST in Malaysia

Mej Jen Dato’ Mokhtar - Workshop on Enhanced Understanding of Risk Management and Internal bin Perman (Rtd) Controls

Yong Nam Yun - Parts Manager System Integration Training - Leadership Transformation Training


30 CORPORATE GOVERNANCE STATEMENT (CONT’D)

SECTION 2: DIRECTORS’ REMUNERATION

REMUNERATION COMMITTEE

The Remuneration Committee comprises of two (2) Independent Non-Executive Directors and an Executive Director.

The Remuneration Committee members are as follows:

• Ash’ari bin Ayub (Chairman)• Wong Zee Shin• Datuk Seri Panglima (Dr.) Goh

During the financial year, the Remuneration Committee:

• noted that the total directors fees of RM126,000, which are paid and payable to the Non-Executive Directors, for the financial year ended 30 June 2015 was within the shareholders’ mandate of RM300,000 per annum obtained at the first AGM of the Company;

• reviewed the remuneration of the Executive Directors and opined that the remuneration is adequate and commensurate with the present job scope of the Executive Directors. The Remuneration Committee would revisit the remuneration package of the Executive Directors as and when the need arises; and

• recommended the payment of the directors remuneration for the Executive and Non-Executive Directors to the Board for approval.

The Remuneration Committee is responsible to recommend to the Board a remuneration framework for Directors with the objective to ensure that the Company attracts and retains the Directors needed to run the Group successfully. It is the ultimate responsibility of the entire Board to approve the remuneration of the Executive Directors with the respective Directors abstaining from decisions in respect of their remuneration.

The determination of the remuneration of the Non-Executive Directors is a matter for the Board as a whole with individual Directors abstaining from decision in respect of their remuneration.

DIRECTORS’ REMUNERATION

The number of Directors of the Company whose remuneration and fees received from the Group for the financial year ended 30 June 2015, including fees paid to companies in which Directors have interest, fall in the following bands:

Executive Non-Executive

RM1,700,000 – RM1,750,000 1 -RM800,000 – RM850,000 1 -RM500,000 – RM550,000 3 -Below RM50,000 - 3

31

The Board has considered disclosure details of the remuneration of each Director. The Board is of the view that the transparency and accountability aspects of corporate governance as applicable to Directors’ remuneration are appropriately served by the “range disclosure” as required by the listing requirements.

SECTION 3: PROMOTING ETHICAl CONDUCT

The Board has adopted a Code of Ethics and Conduct which governs the ethics and conduct of the Directors, management and employees of the Group. The Code of Ethics and Conduct, which is posted on the Company’s website includes appropriate communication and feedback channels that facilitate whistleblowing. The Board reviews and amends the Code of Ethics and Conduct when the need arises.

SECTION 4: PROMOTING SUSTAINABIlITY

The Board has formalised and adopted a Sustainability Policy which form part of the Company’s Code of Ethics and Conduct. The Board’s commitment to sustainability is outcomes-based, innovative and founded on the belief that the Group has a responsibility for its contribution to have a lasting impact on the environment around us. Sustainability is about creating a lasting legacy for the planet and for our community.

The Board recognises that acting in a responsible and sustainable manner creates new opportunities, enhances investor value, and improves social and environmental returns.

The Board has ultimate responsibility for reviewing and approving the sustainability strategy and monitoring the achievement of sustainability objectives through reviewing regular performance reporting.

SECTION 5: SHAREHOlDERS

INVESTOR RElATIONS AND SHAREHOlDERS COMMUNICATION

The Board acknowledges the importance of communication with the shareholders and investors. Discussions were held between the senior management with the analysts, media, shareholders and investors throughout the year. Presentations based on permissible disclosures are given to explain the Group’s performance, major developments and significant events of the Group. The Group has been making timely announcements to the public with regards to the Group’s corporate proposals, financial results, other regulatory announcements as well as information which would be of interest to the investors and members of the public.

In addition, the Group has also established a website at www.globaltec.com.my for shareholders and the public to access for information related to the Group. The shareholders communication policy is also posted on the Company’s website.


RM’000 Executive Non-Executive

Remuneration 4,125 -Fees - 126Meeting allowances - 8Estimated monetary value of benefits-in-kind 11 -

SECTION 2: DIRECTORS’ REMUNERATION (cont’d)

DIRECTORS’ REMUNERATION (cont’d)

The aggregate remuneration of Directors with categorisation into appropriate components is as follows:


32

SECTION 5: SHAREHOlDERS (cont’d)

INVESTOR RElATIONS AND SHAREHOlDERS COMMUNICATION (cont’d)

AGM

The AGM represents the principal forum for dialogue and interaction with all shareholders of the Company. Shareholders are encouraged to attend the AGM and participate in the proceedings and question and answer session. All Directors, senior management and external auditors are available to respond to the shareholders’ questions during the AGM.

SECTION 6: ACCOUNTABIlITY AND AUDIT

FINANCIAl REPORTING

The Board has a responsibility and aims to provide/present a fair, balanced and meaningful assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements, quarterly reports to Bursa Malaysia as well as the Chairman Statement in the annual report to the shareholders. The Audit Committee assists the Board in overseeing the Group’s financial reporting processes and the quality of its financial reporting.

STATEMENT OF DIRECTORS’ RESPONSIBIlITY FOR PREPARING THE FINANCIAl STATEMENTS

The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which have been made out in accordance with the applicable approved accounting standards and give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows of the Group and of the Company for the financial year then ended.

In preparing the financial statements, the Directors have:

• selected suitable accounting policies and applied them consistently;• made judgements and estimates that are reasonable and prudent;• ensured that all applicable accounting standards have been followed; and• prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made enquiries, that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future.

The Directors have responsibility for ensuring that the Group and the Company keep accounting records which disclose with reasonable accuracy of the financial position of the Group and the Company and which enable them to ensure that the financial statements comply with the applicable approved accounting standards in Malaysia and the Companies Act, 1965.

The Directors have overall responsibilities for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent other irregularities.

CORPORATE DISClOSURE POlICY

The Board is committed to ensuring that communications to the investing public regarding the business, operations and financial performance of the Group are accurate, timely, factual, informative, consistent, broadly disseminated and where necessary, information lodged with regulators is in accordance with applicable regulatory requirements.


33CORPORATE GOVERNANCE STATEMENT (CONT’D)

SECTION 6: ACCOUNTABIlITY AND AUDIT (cont’d)

CORPORATE DISClOSURE POlICY (cont’d)

The objectives of the Corporate Disclosure Policy are to:

(a) warrant in writing the Group’s existing disclosure policies, guidelines and procedures and ensure consistent approach to the Group’s disclosure practices throughout the Group;

(b) ensure that all persons to whom the Corporate Disclosure Policy applies, understand their obligations to preserve the confidentiality of material information;

(c) effectively increase understanding of the Group’s business and enhance its corporate image by encouraging practices that reflect openness, accessibility and cooperation; and

(d) reinforce the Company’s commitment to compliance with the continuous disclosure obligations imposed by Malaysian securities law and regulations and the listing requirements.

RISK MANAGEMENT AND INTERNAl CONTROl

The Board has established a risk management framework and reviews it periodically. The Statement on Risk Management and Internal Control presented on pages 41 and 42 provides an overview of the risk profiles and state of internal control within the Group.

RElATIONSHIP WITH THE AUDITORS

The role of the Audit Committee in relation to the external auditors is described on pages 35 to 40. The Company has always maintained a close and transparent relationship with its external auditors in seeking professional advice and ensuring compliance with the accounting standards in Malaysia.

The Audit Committee has a direct communication channel with the internal and external auditors. During the financial year, the Audit Committee had two (2) meetings with the external and internal auditors without the presence of the Executive Directors and management.

SECTION 7: CORPORATE SOCIAl RESPONSIBIlITY

The Board believes the improvement in the conditions surrounding our stakeholders, employees, society and the environment is vital to the growth of the Group.

The Board recognises that acting in a responsible and sustainable manner creates new opportunities, enhances investor value, and improves social and environmental returns.

Our corporate social responsibilities cover the following key areas:

OCCUPATIONAl HEAlTH AND SAFETY

Policies, including any updates as well as any training on occupational health and safety matters are provided to employees. In line with this, designated officers, in our major subsidiaries, are assigned to ensure the policies are adhered and implemented effectively and safety audits are conducted regularly. Health and safety programmes are also carried out every year to create awareness and to educate employees on occupational health and safety related matters.


34

SECTION 7: CORPORATE SOCIAl RESPONSIBIlITY (cont’d)

EMPlOYEE AND COMMUNITY WElFARE AND DEVElOPMENT

The Group actively contributes to the sports development of the nation. The Company is one of the sponsors of the Sabah Rhinos Football Team for season 2015.

Training is provided to the employees. The training comprises both technical, soft skills and includes grooming future leaders. Apart from training, employees are also provided with medical and healthcare insurance and adequate leave and compensation programs which commensurate with their rank and level of employments.

Further, the Group acknowledges the need to provide a healthy and balanced lifestyle to its employees and also giving back to the community. In this aspect, various initiatives, such as health talk, blood donation campaign, family day, social events and sports activities were organised by our major subsidiaries.

The Board has formalised and adopted a Gender and Workplace Diversity policy. This can be seen in our multi-racial and a work force with balanced age and gender composition.

ENVIRONMENTAl PRESERVATION

It is our policy to comply with environmental laws governing plant operations, maintenance and improvement in areas relating to environmental standards, emission standards, energy conservation, housekeeping and storage methods, noise level management and treatment of plant effluents and waste water. In addition, our factories are certified to the international environmental management systems standard, ISO 14001.

EDUCATION AND TRAINING

Education continues to be a key beneficiary of the Group’s corporate contribution, in line with its belief that education plays a key role in nation building. The Group offers industrial training attachments to undergraduates from the local universities and technical colleges as part of ongoing commitment towards providing the necessary exposure and training to students of today. The above statement is made in accordance with the resolution of the Board dated 23 October 2015.


35

1. ROlE OF AUDIT COMMITTEE (“COMMITTEE”)

The Committee shall:

• Provide assistance to the Board of Directors (“Board”) in fulfilling its fiduciary responsibilities relating to the corporate governance, risk management, accounting and reporting practices of the Company and the Group together with the status of internal controls. • Improve the Group’s business efficiency and the quality of the accounting function, the system of internal controls and audit function, thereby strengthening the confidence of the public in the Group’s reported results. • Maintain through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as the internal auditors. • Enhance the independence of both the external and internal auditors’ functions through active participation in the audit process. • Provide an objective view on the effectiveness of Enterprise Risk Management as a whole to the Board. • Strengthen the role of the independent Directors by giving them a greater depth of knowledge as to the operations of the Company and the Group through their participation in the Committee. • Act upon the Board’s request to investigate and report on any issues or concerns with regards to the Management of the Group. • Carry out any other function defined by the Board.

2. TERMS OF REFERENCE

• COMPOSITION

The Committee shall be appointed by the Board from amongst its Directors and consist of no fewer than three (3) members, all of whom shall be non-executive Directors, with the majority being independent Directors, unencumbered by any relationships with senior management and the operating executives, or any other relationship which might, in the opinion of the Board, be considered to be a conflict of interest. At least one member of the Committee:

(i) must be a member of the Malaysian Institute of Accountants (“MIA”); or

The Committee comprises of the following members:

ChairmanAsh’ari bin Ayub, Chairman Senior Independent Non-Executive Director(The Chairman is a member ofthe Malaysian Institute of Accountants)

MembersWong Zee Shin Independent Non-Executive DirectorMej Jen Dato’ Mokhtar bin Perman (Rtd) Non-Independent Non-Executive Director

MEMBERS OF THE AUDIT COMMITTEE (“COMMITTEE”)

AUDIT COMMITTEE REPORT


36

2. TERMS OF REFERENCE (cont’d)

• COMPOSITION (cont’d)

(ii) if he is not a member of the MIA, he must have at least three (3) years’ working experience and:

(a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or

(b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or (iii) fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

The members of the Committee shall elect a Chairman from among their number who shall be an Independent Director. An alternate Director must not be appointed as a member of the Committee. In the event of any vacancy in the Committee, the Board, through the Nominating Committee if necessary, shall fill the vacancy within three months.

The Board shall review the performance of the Committee and the terms of office of each of its members at least once in every three years to determine whether the Committee and its members have carried out their duties in accordance with their terms of reference. • AUTHORITY The Committee is authorised by the Board:

a) to investigate any matter within its terms of reference; b) to request the resources required to perform its duties; c) to request and be granted full and unrestricted access to any information it determines as relevant to its activities from any employees of the Company or the Group and all employees are directed to co-operate with any request made by the Committee; d) to have direct communication channels with the external auditors and the internal auditors; e) to obtain independent professional advice and to engage external party having relevant experience and expertise as it considers necessary to assist the Committee; and f) to convene meetings with the external and internal auditors, excluding the attendance of the other Directors and employees of the Group, whenever deemed necessary.

• ATTENDANCE AND FREQUENCY OF MEETINGS

The quorum for a meeting is two (2) members of the Committee, provided that the majority of members present at the meeting shall be Independent Non- Executive Directors.

The Executive Directors and Group Finance Director are normally invited to attend meetings only for discussion of those matters on the agenda for the meeting which fall within their specific scope of responsibility. Representatives from the Group’s internal audit function are normally invited for attendance at each meeting. Representatives of the external auditors are also invited from time to time to brief the Committee on related audit matters.

A minimum of four (4) meetings per year is planned, although additional meetings may be called at any time at the Committee Chairman’s discretion.

AUDIT COMMITTEE REPORT (CONT’D)

37


• ATTENDANCE AND FREQUENCY OF MEETINGS (cont’d)

At least twice a year, if required, the Committee shall meet with the external auditors, the internal auditors or both, without the presence of any executives of the Group.

• PROCEDURES OF MEETINGS

a) The Committee Chairman shall preside at all meetings. In his absence, Committee members present shall elect among themselves an independent Director to be the chairman of the meeting; b) The Committee Chairman may call for a meeting upon the request of the internal or external auditors or any Committee Member, or the Company’s Group Executive Chairman, in order to consider any matter that should be brought to the attention of the Directors or shareholders; c) The Secretary of the Committee shall, with the agreement of the Committee Chairman, draw up the agenda for the meeting and the agenda shall be sent to all members of the Committee and any other persons who may be required to attend; d) A minimum seven days’ notice shall be given for all meetings. Nevertheless, a shorter notice is permitted subject to agreement by all Committee members; e) All decisions are determined by a majority of votes. In case of equality of votes, the Committee Chairman shall have a casting vote; and f) A resolution in writing signed by a majority of the Committee members and constituting a quorum shall be effective as a resolution passed at a meeting of the Committee.

• MINUTES OF MEETINGS

The Company Secretary shall attend the meetings of the Committee and keep written minutes of all proceedings. Minutes of meetings must be signed by the Chairman of the meeting and are kept at the registered office of the Company.

• FUNCTIONS

The Committee shall review, appraise and report to the Board on:

a) The discussion with the external auditors, prior to the commencement of audit, the audit plan which states the nature and scope of the audit and ensures co-ordination of audit where more than one audit firm is involved; b) The review with the external auditors, their evaluation of the system of internal controls and the Statement on Risk Management and Internal Control, together with their management letters and Management’s response; c) The discussion of issues and reservations arising from the external audits, the audit report and any matters the external auditors may wish to discuss (in the absence of Management, where necessary); d) The assistance given by the employees of the Group to the external and internal auditors; e) The review of the following in respect of internal audit: • Adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work; • The internal audit plan; • The major findings of internal audit investigations and Management’s responses, ensuring that appropriate actions are taken on the recommendations of the internal auditors;



38


• FUNCTIONS (cont’d)

• Co-ordination of external audit with internal audit; • Approval of any appointment or termination and appraisal of the performance of the Group Internal Audit function; and • Resignations of internal auditors, together with providing the resigning internal auditors an opportunity to submit the reasons for resignation. f) The review of quarterly reporting to Bursa Malaysia and audited financial statements of the Group before the submission to the Board, focusing particularly on: • Changes in or implementation of major accounting policies; • Significant and unusual events arising from the audit; • Compliance with accounting and financial reporting standards and other legal requirements; and • Any commentary on the future outlook for the Company and the Group. g) The review of any related party transaction and conflict of interest situation that may arise within the Group or the Company, including any transaction, procedure or course of conduct that raises questions of Management integrity; h) The review of any letter of resignation from the external auditors together with the reasons for such resignation; i) The review of the re-appointment of the Group’s external auditors, including the examination of the independence of the external auditors and, where appropriate, the reasons (supported by grounds) why it is not suitable to re-appoint the external auditors; j) The recommendation for the nomination and appointment of external auditors, as well as for approval of the audit fee; k) Prompt reporting to Bursa Malaysia on any matter reported by the Committee to the Board which has not been satisfactorily resolved, resulting in a breach by the Company of the Listing Requirements of Bursa Malaysia; and l) Any other function that may be mutually agreed upon by the Committee and the Board from time to time, which would be beneficial to the Company and the Group and ensure the effective discharge of the Committee’s duties and responsibilities.

3. MEETINGS OF THE COMMITTEE

The details of attendance at the Committee meetings for the financial year ended 30 June 2015 are as follows:

Total Committee Date of Meeting Members (Percentage of Attendance) 1. 21 August 2014 3 3 (100%) 2. 27 November 2014 3 3 (100%) 3. 12 February 2015 3 3 (100%) 4. 20 May 2015 3 3 (100%)

Attendance byCommittee Members


39

3. MEETINGS OF THE COMMITTEE (cont’d)

The details of attendance by individual Committee Member for the financial year ended 30 June 2015 are as below:

Name of Director Total Meetings Attended Percentage of Attendance 1. Ash’ari bin Ayub 4/4 100% 2. Wong Zee Shin 4/4 100% 3. Mej Jen Dato’ Mokhtar bin Perman (Rtd) 4/4 100%

4. INTERNAl AUDIT FUNCTION

In discharging its duties, the Audit Committee is supported by an internal audit function which is outsourced to an independent professional service firm who undertakes the necessary activities to enable the Committee to discharge its functions effectively. The Committee regards the internal audit function as essential to assist in obtaining the assurance it requires regarding the effectiveness of the systems of internal controls within the Company and the Group.

During the financial year under review, the internal auditor conducted internal audits to assess the effectiveness and integrity of the system of internal controls of the Company and certain operating units in the Group in accordance with the approved audit plan by the Committee. The findings and recommendations for improvements were presented to the Audit Committee for deliberation. The costs incurred by the Group for the internal audit function during the period amounted to RM104,000.

5. ACTIVITIES

During the financial year and up to the date of this report, the Committee carried out its duties in accordance with its term of reference. The main activities undertaken by the Committee were as follows:

• Reviewed the external auditors’ scope of work and audit plans for the period. Prior to the audit, representatives from the external auditors presented their audit strategy and plan. • Reviewed with the external auditors the results of the audit, the audit report and the management letters. • Reviewed the independence, objectivity and effectiveness of the external auditors and the services provided, including non-audit services (if any). • Reviewed the internal auditors’ scope of work, function, competency and resources in carrying out the internal audit work. • Held a private meeting with the external and internal auditors without the presence of Management. • Reviewed the internal audit reports, which highlighted the internal audit findings, recommendations and management‘s response. Discussed with Management, actions taken to improve the system of internal control based on improvement opportunities identified in the internal audit reports. • Reviewed the Annual Report and the Audited Financial Statements of the Group and the Company, prior to the submission to the Board for their consideration and approval, to ensure that the Audited Financial Statements were drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable Approved Accounting Standards as determined and set out by The Malaysian Accounting Standard Board (“MASB”). Any significant issues arising from the audit of the financial statements by the external auditors were deliberated upon.



40 AUDIT COMMITTEE REPORT (CONT’D)

5. ACTIVITIES (cont’d)

• Received and reviewed the Enterprise Risk Management reports. • Reviewed the quarterly unaudited financial results announcements of the Group before recommending them to the Board for its approval. The review and discussion of these announcements was conducted with the presence of the Executive Directors. • Reviewed and approved the statements of risk management and internal controls to be included in the Annual Report. • In respect of the quarterly and period end financial statements, reviewed the Company’s compliance with the Listing Requirements of Bursa Malaysia, applicable approved accounting standards set by MASB and other relevant legal and regulatory requirements. • Reviewed related party transactions entered into by the Company and the Group to ensure that such transactions were undertaken in line with the Group’s normal commercial terms and that the internal control procedures with regards to such transactions is sufficient.

41

INTRODUCTION

This Statement on Risk Management and Internal Control by the Board of Directors (“Board”) on the Group is made pursuant to the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and in accordance with the Principles and Recommendations as provided in the Malaysian Code on Corporate Governance 2012 (“Code”). This statement is guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.

BOARD’S RESPONSIBIlITIES

The Board acknowledges its overall responsibility for the establishment of a sound risk and control framework for the Group and as such, affirms its commitment and responsibility for the Group’s risk management and internal control systems covering not only financial controls but also operational, organisational and compliance controls as well as the review of its adequacy, integrity and effectiveness.

The Board determines the Group’s level of risk tolerance and actively identifies, assesses and monitors key business risks to safeguard shareholders’ investments and the Group’s assets. It should be noted, however, that such framework/systems are designed to manage rather than to eliminate the risk of failure to achieve business objectives. In addition, it should be noted that these systems can only provide reasonable but not absolute assurance against material misstatement or loss.

There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group in its achievement of its objectives and strategies. The process has been in place during the year up to the date of approval of the annual report and is subject to review by the Board.

The Board is assisted by Management in implementing the Board’s policies and procedures on risk and control by identifying and analysing risk information, designing and operating suitable internal controls to manage and control these risks, and monitoring effectiveness of risk management and control activities.

The key features of the risk management and internal control systems are described below.

RISK MANAGEMENT AND INTERNAl CONTROl

Risk Management

The Group has established an Enterprise Risk Management framework to identify, evaluate and manage the key risks to an acceptable level.

The Group also maintains a database of risks and controls information captured in the format of risk registers. Key risks of major business units are identified, assessed and categorised to highlight the sources of risks, their impacts and the likelihood of occurrence. Risk profiles for these major operating business units are presented to the Audit Committee and the Board for deliberation and approval. Action plans to address key risks were developed and their status of implementation was reported to the Audit Committee and the Board.

The risk profiles of the major operating business units of the Group are being monitored by its respective Management. The risks identified for the Group were considered in formulating the strategies and plans that were approved and adopted by the Board. The strategies and plans are monitored and revised as the need arises.

Briefings on risk management were conducted for Board and Management as part of the Group’s efforts to instill a proactive risk management culture and implement a proper risk management framework in the Group.

STATEMENT ON RISK MANAGEMENTAND INTERNAl CONTROl


42

RISK MANAGEMENT AND INTERNAl CONTROl (cont’d)

Internal Control

The Board receives and reviews reports from the Management on key financial data, performance indicators and regulatory matters quarterly. This is to ensure that matters that require the Board and Management’s attention are highlighted for review, deliberation and decision on a timely basis. The Board approves appropriate responses or amendments to the Group’s policy. Besides, the results of the Group are reported quarterly and any significant fluctuations are analysed and acted on in a timely manner.

There is a budgeting system that requires preparation of the annual budget by all major operating business units. The annual budget which contains financial and operating targets and performance indicators are reviewed and approved by the Executive Directors together with the Management before being presented to the Board for final review and approval.

Issues relating to the business operations are highlighted to the Board’s attention during Board meetings. Further independent assurance is provided by the Group Internal Audit Function and the Audit Committee. The Audit Committee reviews internal control matters and updates the Board on significant issues for the Board’s attention and action.

The Group’s internal audit function has been outsourced to a professional service firm, as part of its effort in ensuring that the Group’s systems of internal controls are functioning as intended. Further details of the Internal Audit Function are set out on page 39 in the Audit Committee Report.

The other salient features of the Group’s systems of internal controls are as follows:

• Quarterly review of the financial performance of the Group by the Board and the Audit Committee;• Defined organisation structure and delegation of responsibilities;• Operations review meetings are held by the respective divisions to monitor the progress of business operations, deliberate significant issues and formulate corrective measures;• Establishment of a whistle blowing framework; and• Code of conduct provided to all employees of the Group.

REVIEW BY BOARD

The Board considered the system of internal controls and risk management described in this statement to be satisfactory and generally adequate within the context of the Group’s business environment. The Board and Management will continue to take measures to strengthen the control environment and monitor the robustness of the internal controls framework.

The Board has also obtained assurance from the Group Executive Chairman and Group Finance Director that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects, for the financial year ended 30 June 2015 and up to the date of this Statement.

This Statement on Risk Management and Internal Control has not dealt with the associate and joint venture in which the Group does not have full management control over. However, the Group’s interest is served through representations on the Board of the associate and joint venture.

CONClUSION

The Board, through the Audit Committee and Management, confirms that it has reviewed the effectiveness of the internal control framework and considers the Group’s system of internal controls is sufficient to provide reasonable assurance in safeguarding the shareholders’ interests and assets of the Group.

The above statement is approved in accordance with the resolution of the Board dated 23 October 2015.

STATEMENT ON RISK MANAGEMENTAND INTERNAl CONTROl (CONT’D)

43

financial statements

44 Directors’ Report

48 statements of Financial Position

50 StatementsofProfitorLossandOtherComprehensiveIncome

52 ConsolidatedStatementsofChangesinEquity

53 StatementsofChangesinEquity

54 StatementsofCashFlows

57 NotestotheFinancialStatements

144 StatementbyDirectors

144 StatutoryDeclaration

145 IndependentAuditors’Report

globaltec formation berhad (953031-a) • annual report 2015

44Forthefinancialyearended30June2015directors’ report

TheDirectorsherebysubmittheirreportandtheauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended30June2015.

principal activities

The Company is principally engaged in investment holding activities, whilst the principal activities of thesubsidiariesareas stated inNote8 to thefinancial statements. Therehasbeennosignificantchange in thenatureoftheseactivitiesduringthefinancialyear.

Duringtheyear,theCompanyhasdiversifiedintoanewbusinesssegmentviatheacquisitionofNewCenturyEnergyResourcesLimited(“NCE”),NewCenturyEnergyServicesLimited(“NCES”)andNuEnergyGasLimited(“NGY”)and its subsidiarieswhoareprincipally involved in theoilandgasexplorationandproductionandservices.

results

group company rm’000 rm’000

Lossfortheyearattributableto: OwnersoftheCompany (41,297) (27,878) Non-controllinginterests (4,505) -

(45,802) (27,878)

reserves and provisions

Therewerenomaterialtransferstoorfromreservesandprovisionsduringthefinancialyearunderreviewexceptasdisclosedinthefinancialstatements.

dividends

NodividendwaspaidduringthefinancialyearandtheDirectorsdonotrecommendanydividendtobepaidforthefinancialyearunderreview.

directors of the company

Directorswhoservedsincethedateofthelastreportare:

DatukSeriPanglima(Dr.)GohTianChuan,JP KongKokKeong OoiBoonPin ChenHengMun Ash’aribinAyub WongZeeShin MejJenDato’MokhtarbinPerman(Rtd) YongNamYun(alternate director to Kong Kok Keong)

45

Noneof theotherDirectors holdingofficeat 30 June 2015 hadany interest in the shares or options of theCompanyduringthefinancialyear.

ByvirtueoftheirinterestsinthesharesoftheCompany,DatukSeriPanglima(Dr.)GohTianChuan,JPandKongKokKeongarealsodeemedinterestedinthesharesofthesubsidiariesduringthefinancialyeartotheextentthattheCompanyhasaninterest.

SaveforDatukSeriPanglima(Dr.)GohTianChuan,JPandKongKokKeong,noneoftheotherDirectorsholdingofficeat30June2015hadany interest inthesharesoroptionsof therelatedcorporationsof theCompanyduringthefinancialyear.

directors’ benefits

Sincetheendofthepreviousfinancialyear,noDirectoroftheCompanyhasreceivednorbecomeentitledtoreceiveanybenefit(otherthanabenefitincludedintheaggregateamountofemolumentsreceivedordueandreceivablebyDirectorsasshowninthefinancialstatementsoftheCompanyorofrelatedcorporations)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththeDirectororwithafirmofwhichtheDirectorisamember,orwithacompanyinwhichtheDirectorhasasubstantialfinancialinterestotherthanasdisclosedinNote34tothefinancialstatements.

number of ordinary shares of rm0.10 each

Notes:

(a) Deemed interested by virtue of Section 6A of the Companies Act, 1965 (“Act”) held through Cara Kaya Sdn Bhd and his son.(b) Deemed interested by virtue of Section 6A of the Act held through Darulnas (M) Sdn Bhd and by virtue of Section 134(12) of the Act held through his spouse.(c) Deemed interested by virtue of Section 134(12) of the Act held through his spouse.

directors’ interests in shares

TheinterestsanddeemedinterestsintheordinarysharesoftheCompanyandofitsrelatedcorporations(otherthanwholly-ownedsubsidiaries)of thosewhowereDirectorsatfinancialyearend(including the interestsofthespousesorchildrenoftheDirectorswhothemselvesarenotDirectorsoftheCompany)asrecordedintheRegisterofDirectors’Shareholdingsareasfollows:

at at 1.7.2014 bought sold 30.6.2015

Interests in the CompanyDatukSeriPanglima(Dr.)GohTianChuan,JP –directinterest 1,050,033,251 - - 1,050,033,251 –indirectinterest(a) 10 - - 10KongKokKeong –directinterest 615,749,677 - - 615,749,677 –indirectinterest(b) 387,953,000 - - 387,953,000OoiBoonPin –directinterest 78,035,580 450,000 (500,000) 77,985,580 –indirectinterest(c) 19,285,800 500,000 - 19,785,800ChenHengMun –directinterest 1,862,180 - - 1,862,180 –indirectinterest(c) 2,004,716 - - 2,004,716WongZeeShin 19,327 - - 19,327YongNamYun 118,520,799 - - 118,520,799

Forthefinancialyearended30June2015

directors’ report (cont’d)


46

directors’ benefits (cont’d)

Therewerenoarrangementsduringandat theendof thefinancialyearwhichhadtheobjectofenablingDirectorsof theCompany toacquirebenefitsbymeansof theacquisitionof shares inordebenturesof theCompanyoranyotherbodycorporate.

options granted over unissued shares

NooptionsweregrantedtoanypersontotakeupunissuedsharesoftheCompanyduringthefinancialyear.

issue of shares and debentures

Therewerenochanges in theauthorised, issuedandpaid-upcapitalof theCompanyduring the financialyear.

Therewerenodebenturesissuedduringthefinancialyear.

other statutory information

BeforethefinancialstatementsoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablestepstoascertainthat:

i) allknownbaddebtshavebeenwrittenoffandadequateprovisionmadefordoubtfuldebts,and

ii) anycurrentassetswhichwereunlikelytoberealisedintheordinarycourseofbusinesshavebeenwritten downtoanamountwhichtheymightbeexpectedsotorealise.

Atthedateofthisreport,theDirectorsarenotawareofanycircumstances:

i) thatwouldrendertheamountwrittenoffforbaddebtsortheamountoftheprovisionfordoubtfuldebtsin theGroupandintheCompanyinadequatetoanysubstantialextent,or

ii) thatwouldrenderthevalueattributedtothecurrentassetsinthefinancialstatementsoftheGroupandof theCompanymisleading,or

iii) whichhavearisenwhichrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesofthe GroupandoftheCompanymisleadingorinappropriate,or

iv) nototherwisedealtwithinthisreportorthefinancialstatementsthatwouldrenderanyamountstatedinthe financialstatementsoftheGroupandoftheCompanymisleading.

Atthedateofthisreport,theredoesnotexist:

i) anychargeontheassetsoftheGrouporoftheCompanythathasarisensincetheendofthefinancialyear andwhichsecurestheliabilitiesofanyotherperson,or

ii) anycontingent liability in respectof theGrouporof theCompany thathasarisen since theendof the financialyear.

Forthefinancialyearended30June2015


47Forthefinancialyearended30June2015


other statutory information (cont’d)

Nocontingent liabilityorother liabilityofanycompany intheGrouphasbecomeenforceable,or is likelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,intheopinionof theDirectors,will ormay substantiallyaffect theabilityof theGroupandof theCompany tomeet theirobligationsasandwhentheyfalldue.

IntheopinionoftheDirectors,exceptforthegainonbargainpurchase,netgainondisposalofsubsidiaries,impairment losses on goodwill, customer relationships and property, plant and equipment of RM9,222,000,RM8,285,000,RM22,000,000,RM21,079,000andRM9,616,000respectivelyasdisclosedinNotes22and26tothefinancialstatements,thefinancialperformanceoftheGroupforthefinancialyearended30June2015havenotbeensubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnaturenorhasanysuchitem,transactionoreventoccurredintheintervalbetweentheendofthatfinancialyearandthedateofthisreport.

IntheopinionoftheDirectors,exceptfortheimpairmentlossoninvestmentsinsubsidiariesofRM25,784,000asdisclosedinNote22tothefinancialstatements,thefinancialperformanceoftheCompanyforthefinancialyearended30June2015havenotbeensubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnaturenorhasanysuchitem,transactionoreventoccurredintheintervalbetweentheendofthatfinancialyearandthedateofthisreport.

significant events during the year

SignificanteventsduringtheyeararedisclosedinNote36tothefinancialstatements.

auditors

Theauditors,MessrsKPMG,haveindicatedtheirwillingnesstoacceptre-appointment.

SignedonbehalfoftheBoardofDirectorsinaccordancewitharesolutionoftheDirectors:

datuk seri panglima (dr.) goh tian chuan, Jp

ooi boon pin

ShahAlam,Date:23October2015


48Asat30June2015statements of financial position

group company note 2015 2014 2015 2014 rm’000 rm’000 rm’000 rm’000

assets Property,plantandequipment 3 133,035 177,253 46 61 Biologicalassets 4 39,919 39,919 - - Explorationandevaluationassets 5 86,163 - - - Investmentproperty 6 - 11,045 - - Intangibleassets 7 42,345 86,964 - - Investmentsinsubsidiaries 8 - - 324,325 377,228 Investmentinanassociate 9 6,934 7,021 - - Investmentinjointventure 10 - - - - Otherinvestments 11 22 - - -

total non-current assets 308,418 322,202 324,371 377,289

Inventories 13 45,449 50,265 - - Otherinvestments 11 1,902 1,834 - - Currenttaxassets 3,365 3,165 - - Tradeandotherreceivables 14 84,681 79,436 42,023 4,026 Cashandcashequivalents 15 59,192 43,204 7,333 400 194,589 177,904 49,356 4,426 Assetsclassifiedasheldforsale 16 18,526 - - -

total current assets 213,115 177,904 49,356 4,426

total assets 521,533 500,106 373,727 381,715

equity Sharecapital 17.1 538,174 538,174 538,174 538,174 Sharepremium 17.2 105,473 105,473 105,473 105,473 Reserves (332,248) (294,897) (296,151) (268,273)

total equity attributable to owners of the company 311,399 348,750 347,496 375,374non-controlling interests 76,971 21,275 - -

total equity 388,370 370,025 347,496 375,374

49Asat30June2015

statements of financial position (cont’d)


liabilities Loansandborrowings 18 16,649 22,845 - - Deferredtaxliabilities 12 13,152 10,419 - -

total non-current liabilities 29,801 33,264 - - Loansandborrowings 18 30,779 33,177 - - Provisions 20 1,404 1,746 - - Governmentgrants 19 5 10 - - Currenttaxliabilities 1,100 1,581 50 307 Tradeandotherpayables 21 63,292 60,303 26,181 6,034 96,580 96,817 26,231 6,341 Liabilitiesclassifiedasheldforsale 16 6,782 - - -

total current liabilities 103,362 96,817 26,231 6,341

total liabilities 133,163 130,081 26,231 6,341

total equity and liabilities 521,533 500,106 373,727 381,715

The notes on pages 57 to 143 are an integral part of these financial statements.


50 statements of profit or loss andother comprehensive income Fortheyearended30June2015

group company note 2015 2014 2015 2014 rm’000 rm’000 rm’000 rm’000 restated

continuing operations Revenue –saleofgoods 292,518 310,631 - -–dividend(gross) 6 7 450 -–services 6,844 8,325 4,411 4,095

299,368 318,963 4,861 4,095Costofsales - -

Gross profit 49,377 48,318 4,861 4,095Administrativeexpenses Distributioncosts - -Otheroperatingexpenses Otheroperatingincome 16,161 6,649 - -

results from operating activities 22Financeincome 23 1,282 604 142 100Financecosts 24Net finance (costs)/income 99

operating loss Shareoflossofequity-accountedinvestees, netoftax - -

loss before tax Taxexpense 25

loss from continuing operations

discontinued operations Lossfromdiscontinuedoperations,netoftax 26 - -

loss for the year

Other comprehensive income/(expense), net of taxItems that may be reclassified subsequently to profit or loss Foreigncurrencytranslationdifferences forforeignoperations 7,723 - -Fairvaluelossonavailable-for-sale financialassets - - -Shareofforeigncurrencytranslation differencesofequity-accountedinvestees - -Other comprehensive income/(expense) for the year, net of tax 7,659 - -

total comprehensive expense for the year

(249,991) (270,645)

(42,706) (46,227) (5,811) (5,791) (1,559) (1,705) (56,065) (38,998) (25,824) (44,947)

(34,792) (31,963) (26,774) (46,643)

(4,507) (3,903) (852) (1) (3,225) (3,299) (710)

(38,017) (35,262) (27,484) (46,544)

(45) (150)

(38,062) (35,412) (27,484) (46,544) (4,955) (1,548) (394) (346)

(43,017) (36,960) (27,878) (46,890)

(2,785) (417)

(45,802) (37,377) (27,878) (46,890)

(2,648) (22) (42) (8) (2,656)

(38,143) (40,033) (27,878) (46,890)

51statements of profit or loss andother comprehensive income (cont’d)

Fortheyearended30June2015


(Loss)/Profit attributable to: OwnersoftheCompany -fromcontinuingoperations -fromdiscontinuedoperations 1,704 - - Non-controllinginterests -fromcontinuingoperations - - -fromdiscontinuedoperations - -

loss for the year

Total comprehensive (expense)/ income attributable to: OwnersoftheCompany -fromcontinuingoperations -fromdiscontinuedoperations 3,096 - - Non-controllinginterests -fromcontinuingoperations 2,770 - - -fromdiscontinuedoperations - -

total comprehensive expense for the year

Basic (loss)/earnings per ordinary share (sen): 28 -fromcontinuingoperations -fromdiscontinuedoperations 0.032


(43,001) (36,905) (27,878) (46,890) (281) (16) (55) (4,489) (136)

(45,802) (37,377) (27,878) (46,890)

(40,447) (39,562) (27,878) (46,890) (312) (55) (3,562) (104)

(38,143) (40,033) (27,878) (46,890)

(0.799) (0.692) (0.005) (0.767) (0.697)


52 consolidated statements ofchanges in equity Fortheyearended30June2015

Foreigncurrencytransla

tiondifferencesfor

foreignoperations

--

-3,956

-3,956

3,725

7,681

Fairva

luelossonava

ilable-for-salefinancialassets

--

-

-

Totalotherc

omprehensiveincomefo

rtheyear

--

-3,946

-3,946

3,713.527,659

Lossfo

rtheyear

--

--

Tota

l co

mp

rehe

nsiv

e in

co

me

/(e

xpe

nse

) fo

r the

ye

ar

--

-3,946

Co

ntr

ibu

tion

s b

y a

nd

dist

ribu

tion

s to

ow

ne

rs o

f th

e C

om

pa

ny

Acquisitionthroughbusinesscombinations

--

--

--

58,288

58,288

Dividendstonon-controllinginterests

--

--

--

tota

l tra

nsa

ctio

ns w

ith o

wne

rs o

f the

co

mp

any

--

--

--

56,488

56,488

at 3

0 Ju

ne 2

015

538,174

105,473

6,041

311,399

76,971

388,370

Note17.1Note17.2Note17.3

Note17.4

(10)

(10)

(12).521.(22)

(41,297)(41,297)(4,505) (45,802)

(41,297)(37,351)

(792) (38,143)

(1,800)

(1,800)

(200,963)

(137,326)

n

on-

sha

re

sha

re

ca

pita

l o

the

r a

cc

umul

ate

d

c

ont

rolli

ng

tota

l

c

ap

ital

pre

miu

m

rese

rve

re

serv

es

loss

es

tota

l in

tere

sts

eq

uity

gro

up

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

attr

ibut

ab

le to

ow

ners

of t

he c

om

pa

nyN

on-

dis

trib

uta

ble

at 1

Jul

y 20

13

527,365

105,473

6,041

382,311

22,192

404,503

Foreigncurrencytransla

tiondifferencesfor

foreignoperations

--

-

-

32

Totalotherc

omprehensive(expense)/

incomefo

rtheyear

--

-

-

32Lossfo

rtheyear

--

--

tota

l co

mp

rehe

nsiv

e e

xpe

nse

for t

he y

ea

r -

- -

Co

ntr

ibu

tion

s b

y a

nd

dist

ribu

tion

s to

o

wn

ers

of t

he

Co

mp

an

y

Contingentconsid

erationpaidonacquisition

ofa

subsid

iary

10,809

--

-

6,485

- .52

6,485

Changesinownershipinterestinsubsid

iaries

--

--

Dividendstonon-controllinginterests

--

--

--

tota

l tra

nsa

ctio

ns w

ith o

wne

rs o

f the

co

mp

any

10,809

--

6,313

5,555

At 3

0 Ju

ne 2

014/

1 Ju

ly 2

014

538,174

105,473

6,041

348,750

21,275

370,025

(197,897)

(58,671)

(2,688)

(2,688)

(2,656)

(2,688)

(2,688)

(2,656)

(37,186)(37,186)

(191) (37,377)

(2,688)

(37,186)(39,874)

(159) (40,033)

(4,324)

(172)

(172)

(158).521

(330

)

(600).521(600)

(4,324)

(172)

(758)

(204,909)

(96,029)

The

no

tes

on

pa

ge

s 57

to

143

are

an

inte

gra

l pa

rt o

f th

ese

fin

an

cia

l sta

tem

en

ts.

53

fair value share share adjustment accumulated total capital premium reserve losses equitycompany rm’000 rm’000 rm’000 rm’000 rm’000

Non-distributable

statements of changes in equity Fortheyearended30June2015

at 1 July 2013 527,365 105,473 415,779loss and total comprehensive expense for the year - - -

Contributions by and distributions to owners of the Company Contingentconsiderationpaidonacquisition ofasubsidiary 10,809 - - 6,485

total transactions with owners of the company 10,809 - - 6,485 At 30 June 2014/1 July 2014 538,174 105,473 375,374loss and total comprehensive expense for the year - - -

at 30 June 2015 538,174 105,473 347,496

Note17.1 Note17.2

Attributable to owners of the Company

(79,105) (137,954) (46,890) (46,890)

(4,324)

(4,324) (83,429) (184,844) (27,878) (27,878)

(83,429) (212,722)



54 statements of cash flowsFortheyearended30June2015


Cash flows from operating activities Lossbeforetax: –continuingoperations –discontinuedoperations - -

Adjustmentsfor: Amortisationofcustomerrelationships 1,658 1,658 - - Amortisationofdevelopmentcosts 471 335 - - Amortisationofgovernmentgrants - - Amountowingbysubsidiarywrittenoff - - 16 - Depreciationofproperty,plantandequipment 17,138 24,487 19 7 Dividendincome - Fairvaluechangeoncontingentconsideration - - 1,181 Fairvaluelossonotherinvestments 81 26 - - Financecosts 5,098 4,533 852 - Finance income Fairvaluechangesonbiologicalassets - - - Gainondisposalofproperty,plantandequipment - - Gainonsaleofdiscontinuedoperations - - - Gainonbargainpurchase - - - Impairmentoncustomerrelationships 21,079 - - - Impairmentlossongoodwill 22,000 18,430 - - Impairmentlossoninvestmentsinsubsidiaries - - 25,784 43,766 Impairmentlossonproperty,plantandequipment 9,616 14,479 - - Inventorieswrittenoff 2,804 1,530 - - Net(reversal)/impairmentlossontradeand otherreceivables 630 - - Otherreceivableswrittenoff - - 24 - Property,plantandequipmentwrittenoff 586 45 - - Provisionforwarranties 472 2,805 - - Shareoflossofequity-accountedinvestees 45 150 - - Unrealisedforeignexchange(gain)/loss 262 - - Operating profit/(loss) before changes in working capital 17,819 30,638 Changeininventories 680 - - Changeintradeandotherreceivables 3,096 Changeintradeandotherpayables 16,653 4,327 20,147 2,052

Cash generated from/(used in) operations 25,456 38,741 283 Taxpaid(net) Warrantiespaid - -

Net cash generated from/(used in) operating activities 18,610 34,359 237

(38,062) (35,412) (27,484) (46,544) (2,401) (706)

(40,463) (36,118) (27,484) (46,544)

(5) (18)

(6) (7) (450) (482)

(1,310) (740) (142) (100) (1,308) (31) (59) (8,733) (9,222)

(486)

(2,973)

(1,381) (1,690) (2,242) (6,774) (38,037) (79)

(19,271) (6,032) (1,499) (651) (46) (814) (2,883)

(19,922)

55


Cash flows from investing activities Additionsinotherinvestments - - - Acquisitionofnon-controllinginterests - - - Acquisitionofsubsidiaries,netofcashand cashequivalentsacquired 35.3 - - - Developmentcostspaid - - Dividendreceived 6 7 450 - Explorationandevaluationexpenditure incurred - - - Interestreceived 1,161 740 142 100 Proceedsfromdisposalofproperty, plantandequipment 1,005 204 - - Proceedsfromdisposalofsubsidiaries 26 23,511 - - - Profitguaranteeshortfallcompensation received - 1,663 - - Purchaseofproperty,plantandequipment (ii) Redemptionofpreferenceshares inasubsidiary - - 27,119 -

Net cash generated from/(used in) investing activities 4,872 27,707 56

Cash flows from financing activities Drawdownofborrowings 13,016 8,675 - - Repaymentofborrowings - - Repaymentoffinanceleaseliabilities - - Withdrawalofpledgeddepositswithalicensedbank 1,281 55 - - Dividendspaidtonon-controllinginterest - - Interestpaid - Net cash used in financing activities -

net increase in cash and cash equivalents 21,331 3,296 6,933 293Effectofexchangeratefluctuationsoncash andcashequivalents 4,197 779 - -Cashandcashequivalentsatbeginningofyear 29,335 25,260 400 107

cash and cash equivalents at end of year (i) 54,863 29,335 7,333 400

(1,453) (276)

(6,601) (337) (792)

(6,782)

(7,091) (7,758) (4) (44)

(7,665)

(9,076) (23,272) (474) (3,723)

(1,800) (600) (5,098) (4,533) (852)

(2,151) (23,398) (852)

statements of cash flows (cont’d) Fortheyearended30June2015


56 statements of cash flows (cont’d) Fortheyearended30June2015


(i) Cash and Cash Equivalents Cashandcashequivalents includedinthestatementsofcashflowsoftheGroupcomprisethefollowing statementsoffinancialpositionamounts:


Bymeansof: –Financeleases 71 2,712 - - –Cashandcashequivalents 7,091 7,758 4 44 3 7,162 10,470 4 44

2015 2014 disposal disposal continuing group held continuing group held operations for sale total operations for sale total rm’000 rm’000 rm’000 rm’000 rm’000 rm’000 (note 15 (note 16) (note 15 and 18) and 18)

group

Cashandbankbalances 26,933 2,624 29,557 22,832 - 22,832 Shorttermplacementfundswith approvedfinancialinstitutions 4,349 - 4,349 5,477 - 5,477 Depositswithlicensedbanks 27,910 - 27,910 14,895 - 14,895 59,192 2,624 61,816 43,204 - 43,204 Less: Bankoverdrafts - - Depositspledgedassecurity - -

52,239 2,624 54,863 29,335 - 29,335

CashandcashequivalentsincludedinthestatementsofcashflowsoftheCompanycomprisecashand bankbalances.

(ii) Purchase of Property, Plant and Equipment

Duringtheyear,theGrouppurchasedproperty,plantandequipmentwiththefollowingaggregatecost,of whichRM71,000(2014:RM2,712,000)wasacquiredbymeansoffinanceleases.

(4,261) (4,261) (9,896) (9,896) (2,692) (2,692) (3,973) (3,973)

57notes to the financial statements

GlobaltecFormationBerhadisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandislistedontheMainMarketofBursaMalaysiaSecuritiesBerhad.Theaddressoftheregisteredofficeandprincipalplaceofbusinessisasfollows:

Registered Office/Principal Place of Business

WismaAICLot3,PersiaranKemajuanSeksyen1640200ShahAlamSelangorDarulEhsan

TheconsolidatedfinancialstatementsoftheCompanyasatandforthefinancialyearended30June2015comprisetheCompanyanditssubsidiaries(togetherreferredtoasthe“Group”andindividuallyreferredtoas“Groupentities”)andtheGroup’sinterestinanassociateandajointventure.ThefinancialstatementsoftheCompanyasatandforthefinancialyearended30June2015donotincludeotherentities.

TheCompanyisprincipallyengagedininvestmentholdingactivities,whilsttheprincipalactivitiesofitssubsidiariesareasstatedinNote8.Therehasbeennosignificantchangeinthenatureoftheseactivitiesduringthefinancialyear.

Duringtheyear,theCompanyhasdiversifiedintoanewbusinesssegmentviatheacquisitionofNewCenturyEnergyResourcesLimited(“NCE”),NewCenturyEnergyServicesLimited(“NCES”)andNuEnergyGasLimited(“NGY”)and its subsidiarieswhoareprincipally involved in theoilandgasexplorationandproductionandservices.

ThefinancialstatementswereauthorisedforissuebytheBoardofDirectorson23October2015.

1. basis of preparation

(a) statement of compliance

The financial statements of theGroupandof theCompany havebeenprepared in accordance withMalaysianFinancialReportingStandards(“MFRSs”), InternationalFinancialReportingStandards andtherequirementsoftheCompaniesAct,1965inMalaysia.

The following are accounting standards, amendments and interpretations that have been issued bytheMalaysianAccountingStandardsBoard(“MASB”)buthavenotbeenadoptedbytheGroup andtheCompany:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016

• AmendmentstoMFRS5,Non-currentAssetsHeldforSaleandDiscontinuedOperations(Annual Improvements2012-2014Cycle) • Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014 Cycle) • Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in AssociatesandJointVentures–SaleorContributionofAssetsbetweenanInvestoranditsAssociate orJointVenture • AmendmentstoMFRS10,ConsolidatedFinancialStatements,MFRS12,Disclosureof Interests in OtherEntitiesandMFRS128, Investments inAssociatesandJointVentures– InvestmentEntities: ApplyingtheConsolidationException • Amendments toMFRS11, JointArrangements–Accounting forAcquisitionsof Interests inJoint Operations


58

1. basis of preparation (cont’d)

(a) statement of compliance (cont’d)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after1 January 2016 (cont’d)

• MFRS14,RegulatoryDeferralAccounts • AmendmentstoMFRS101,PresentationofFinancialStatements–DisclosureInitiative • Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets – ClarificationofAcceptableMethodsofDepreciationandAmortisation • AmendmentstoMFRS116,Property,PlantandEquipmentandMFRS141,Agriculture–Agriculture: BearerPlants • AmendmentstoMFRS119,EmployeeBenefits(AnnualImprovements2012-2014Cycle) • AmendmentstoMFRS127,SeparateFinancialStatements–EquityMethodinSeparateFinancial statements • AmendmentstoMFRS134,InterimFinancialReporting(AnnualImprovements2012-2014Cycle)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018

• MFRS9,FinancialInstruments(2014) • MFRS15,RevenuefromContractswithCustomers

TheGroupandtheCompanyplantoapplytheabovementionedaccountingstandards,amendments andinterpretations:

• fromtheannualperiodbeginningon1July2016forthoseaccountingstandards,amendmentsor interpretationsthatareeffectiveforannualperiodsbeginningonorafter1January2016,except forMFRS14whichisnotapplicabletotheGroupandtheCompany.

• fromtheannualperiodbeginningon1July2018fortheaccountingstandardsthatareeffective forannualperiodsbeginningonorafter1January2018.

TheGroupand theCompanyarecurrentlyassessing the financial impact thatmayarise from the adoptionoftheaboveaccountingstandardsandamendments.

(b) basis of measurement

Thefinancialstatementshavebeenpreparedonthehistoricalcostbasisotherthanasdisclosed in Note2andontheassumptionthattheGroupandtheCompanyaregoingconcern.

TheGroupandtheCompanyincurredlossfortheyearofRM45,802,000andRM27,878,000respectively forthefinancialyearended30June2015.Thisindicatestheexistenceofanuncertaintywhichmay castsignificantdoubtontheabilityoftheGroupandtheCompanytocontinueasagoingconcern.

Thevalidityof thegoingconcernassumption isdependentupon theabilityof theGroupand the CompanytogeneratesufficientpositivecashflowsfromtheiroperationstoenabletheGroupandthe Companytofulfilltheirobligationsasandwhentheyfalldue.

notes to the financial statements (cont’d)

59notes to the financial statements (cont’d)

1. basis of preparation (cont’d)

(b) basis of measurement (cont’d)

At thedateof this report, there isnoreasonfor theDirectors tobelievethatthere isanysignificant uncertainty that theGroupand theCompanywillnotbeable togenerate sufficientpositivecash flows from their operations. Accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to amounts and classificationofliabilitiesthatmaybenecessaryiftheGroupandtheCompanyareunabletocontinue asagoingconcern.

(c) functional and presentation currency

ThesefinancialstatementsarepresentedinRinggitMalaysia(“RM”),whichistheCompany’sfunctional currency.AllfinancialinformationispresentedinRMandhasbeenroundedtothenearestthousand, unlessotherwisestated.

(d) use of estimates and judgements

Thepreparationof financial statements inconformitywithMalaysianFinancialReportingStandards (“MFRSs”) requires management tomake judgements, estimates and assumptions that affect the applicationofaccountingpoliciesandthereportedamountsofassets,liabilities,incomeandexpenses. Actualresultsmaydifferfromtheseestimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimatesarerecognisedintheperiod inwhichtheestimatesarerevisedandinanyfutureperiods affected.

Therearenosignificantareasofestimationuncertaintyandcriticaljudgementsinapplyingaccounting policiesthathavesignificanteffectontheamountsrecognisedinthefinancialstatementsotherthan thosedisclosedinthefollowingnotes:

• Note4 – fairvalueofbiologicalassets • Note5 – impairmentassessmentonexplorationandevaluationassets • Note7 – measurementof the recoverable amountsofcash-generatingunits (“CGUs”)and customerrelationships • Note8 – impairmentassessmentoninvestmentsinsubsidiaries • Note12 – deferredtaxassetsandliabilities • Note30 – fairvalueoffinancialinstruments • Note35 – businesscombinations


60 notes to the financial statements (cont’d)

2. significant accounting policies

Theaccountingpoliciessetoutbelowhavebeenappliedconsistentlytotheperiodspresentedinthese financialstatementsandhavebeenappliedconsistentlybyGroupentities,unlessotherwisestated.

(a) basis of consolidation

(i) Subsidiaries

Subsidiariesareentities, including structuredentities,controlledby theCompany. Thefinancial statementsofsubsidiariesareincludedintheconsolidatedfinancialstatementsfromthedatethat controlcommencesuntilthedatethatcontrolceases.

TheGroupcontrolsanentitywhenitisexposed,orhasrights,tovariablereturnsfromitsinvolvement withtheentityandhastheabilitytoaffectthosereturnsthroughitspowerovertheentity.

Potential voting rights are considered when assessing control only when such rights are substantive.

TheGroupalsoconsiders ithasdefactopoweroveraninvesteewhen,despitenothavingthe majority of voting rights, it has the current ability to direct the activities of the investee that significantlyaffecttheinvestee’sreturn.

InvestmentsinsubsidiariesaremeasuredintheCompany’sstatementoffinancialpositionatcost lessanyimpairmentlosses,unlesstheinvestmentisclassifiedasheldforsaleordistribution.Thecost ofinvestmentincludestransactioncosts.

(ii) Business combinations

Businesscombinationsareaccountedforusingtheacquisitionmethodfromtheacquisitiondate, whichisthedateonwhichcontrolistransferredtotheGroup.

Fornewacquisitions,theGroupmeasuresthecostofgoodwillattheacquisitiondateas:

• thefairvalueoftheconsiderationtransferred;plus • therecognisedamountofanynon-controllinginterestsintheacquiree;plus • ifthebusinesscombinationisachievedinstages,thefairvalueoftheexistingequityinterest intheacquiree;less • the net recognised amount (generally fair value) of the identifiable assets acquired and liabilitiesassumed.

Whentheexcessisnegative,abargainpurchasegainisrecognisedimmediatelyinprofitorloss.

Foreachbusinesscombination,theGroupelectswhetheritmeasuresthenon-controllinginterests intheacquireeeitheratfairvalueorattheproportionateshareoftheacquiree’sidentifiablenet assetsattheacquisitiondate.

Transactioncosts,otherthanthoseassociatedwiththeissueofdebtorequitysecurities,thatthe Groupincursinconnectionwithabusinesscombinationareexpensedasincurred.


2. significant accounting policies (cont’d)

(a) basis of consolidation (cont’d)

(iii) Acquisitions of non-controlling interests

TheGroupaccountsforallchangesinitsownershipinterestinasubsidiarythatdonotresultina lossofcontrolasequitytransactionsbetweentheGroupanditsnon-controllinginterestholders. AnydifferencebetweentheGroup’sshareofnetassetsbeforeandafterthechange,andany considerationreceivedorpaid,isadjustedtooragainstGroupreserves.

(iv) Loss of control

Uponthe lossofcontrolofasubsidiary,theGroupderecognisestheassetsand liabilitiesofthe formersubsidiary,anynon-controllinginterestsandtheothercomponentsofequityrelatedtothe former subsidiary from the consolidated statement of financial position. Any surplus or deficit arisingonthelossofcontrolisrecognisedinprofitorloss.IftheGroupretainsanyinterestinthe former subsidiary, then such interest ismeasured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as anavailable-for-sale financialassetdependingonthelevelofinfluenceretained.

(v) Associates

Associates are entities, including unincorporated entities, in which the Group has significant influence,butnotcontrol,overthefinancialandoperatingpolicies.

Investments inassociatesareaccountedfor in theconsolidatedfinancial statementsusingthe equitymethodlessanyimpairment losses,unless it isclassifiedasheldforsaleordistribution(or includedinadisposalgroupthatisclassifiedasheldforsaleordistribution).Thecostoftheinvestment includes transaction costs. The consolidated financial statements include the Group’s share oftheprofitorlossandothercomprehensiveincomeoftheassociates,afteradjustmentsifany,to align theaccountingpolicieswith thoseof theGroup, from thedate that significant influence commencesuntilthedatethatsignificantinfluenceceases.

When theGroup’s shareof losses exceeds its interest inanassociate, thecarryingamountof thatinterestincludinganylong-terminvestmentsisreducedtozero,andtherecognitionoffurther lossesisdiscontinuedexcepttotheextentthattheGrouphasanobligationorhasmadepayments onbehalfoftheassociate.

When theGroupceases tohave significant influenceoveranassociate,any retained interest intheformerassociateatthedatewhensignificantinfluenceislostismeasuredatfairvalueand thisamountisregardedastheinitialcarryingamountofafinancialasset.Thedifferencebetween thefairvalueofanyretainedinterestplusproceedsfromtheinterestdisposedofandthecarrying amountoftheinvestmentatthedatewhenequitymethodisdiscontinuedisrecognisedinprofit orloss.

When theGroup’s interest inanassociatedecreasesbutdoesnot result ina lossof significant influence,anyretainedinterestisnotremeasured.Anygainorlossarisingfromthedecreasein interestisrecognisedinprofitorloss.Anygainsorlossespreviouslyrecognisedinothercomprehensive incomearealsoreclassifiedproportionatelytoprofitorlossifthatgainorlosswouldberequiredto bereclassifiedtoprofitorlossonthedisposaloftherelatedassetsorliabilities.

InvestmentsinassociatesaremeasuredintheCompany’sstatementoffinancialpositionatcost lessanyimpairmentlosses,unlesstheinvestmentisclassifiedasheldforsaleordistribution.Thecost oftheinvestmentincludestransactioncosts.


62


(a) basis of consolidation (cont’d)

(vi) Joint arrangements

JointarrangementsarearrangementsofwhichtheGrouphasjointcontrol,establishedbycontracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements’returns.

Jointarrangementsareclassifiedandaccountedforasfollows:

• A jointarrangement isclassifiedas“jointoperation”whentheGrouportheCompanyhas rightstotheassetsandobligationsforthe liabilities relatingtoanarrangement.TheGroup accountsforeachofitsshareoftheassets,liabilitiesandtransactions,includingitsshareof thoseheldorincurredjointlywiththeotherinvestors,inrelationtothejointoperation. • Ajointarrangementisclassifiedas“jointventure”whentheGrouphasrightsonlytothenet assetsofthearrangements.TheGroupaccountsforitsinterestinthejointventureusingthe equitymethod.InvestmentsinjointventurearemeasuredintheGroup’sstatementoffinancial positionatcostlessanyimpairmentlosses,unlesstheinvestmentisclassifiedasheldforsaleor distribution.Thecostofinvestmentincludestransactioncosts.

(vii) Non-controlling interests

Non-controllinginterestsattheendofthereportingperiod,beingtheequity inasubsidiarynot attributabledirectlyorindirectlytotheownersoftheCompany,arepresentedintheconsolidated statement of financial position and statement of changes in equity within equity, separately fromequityattributabletotheownersoftheCompany.Non-controllinginterestsintheresultsof theGroupispresentedintheconsolidatedstatementofprofitorlossandothercomprehensive incomeasanallocationoftheprofitorlossandothercomprehensiveincomefortheyearbetween non-controllinginterestsandownersoftheCompany.

Lossesapplicabletothenon-controllinginterestsinasubsidiaryareallocatedtothenon-controlling interestsevenifdoingsocausesthenon-controllingintereststohaveadeficitbalance.

(viii) Transactions eliminated on consolidation Intra-groupbalancesand transactions,andanyunrealised incomeandexpensesarising from intra-grouptransactions,areeliminatedinpreparingtheconsolidatedfinancialstatements.

Unrealisedgainsarisingfromtransactionswithequity-accountedassociateandjointventureare eliminatedagainsttheinvestmenttotheextentoftheGroup’sinterestintheinvestees.Unrealised lossesareeliminatedinthesamewayasunrealisedgains,butonlytotheextentthatthereisno evidenceofimpairment.

(b) foreign currency

(i) Foreign currency transactions

TransactionsinforeigncurrenciesaretranslatedtotherespectivefunctionalcurrenciesofGroup entitiesatexchangeratesatthedatesofthetransactions.

Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesattheendofthereportingperiod areretranslatedtothefunctionalcurrencyattheexchangerateatthatdate.




(b) foreign currency (cont’d)

(i) Foreign currency transactions (cont’d)

Non-monetaryassetsandliabilitiesdenominatedinforeigncurrenciesarenotretranslatedatthe endofthereportingperiod,exceptforthosethataremeasuredatfairvalueareretranslatedto thefunctionalcurrencyattheexchangerateatthedatethatthefairvaluewasdetermined.

Foreigncurrencydifferencesarisingon retranslationare recognised inprofitor loss,except for differences arising on the retranslation of available-for-sale equity instruments or a financial instrumentdesignatedasahedgeofcurrencyrisk,whicharerecognisedinothercomprehensive income.

Intheconsolidatedfinancialstatements,whensettlementofamonetaryitemreceivablefromor payable toa foreignoperation isneitherplannednor likely tooccur in the foreseeable future, foreignexchangegainsand lossesarising from suchamonetary itemareconsidered to form part of a net investment in a foreign operation and are recognised in other comprehensive income,andarepresentedintheforeigncurrencytranslationreserve(“FCTR”)inequity.

(Ii) Operations denominated in functional currencies other than Ringgit Malaysia

TheassetsandliabilitiesofoperationsdenominatedinfunctionalcurrenciesotherthanRM,including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange ratesattheendofthereportingperiod,exceptforgoodwillandfairvalueadjustmentsarising frombusinesscombinationsbefore1January2011(thedatewhentheGroupfirstadoptedMFRS) whicharetreatedasassetsandliabilitiesoftheCompany.Theincomeandexpensesofforeign operations,excludingforeignoperationsinhyperinflationaryeconomicsaretranslatedtoRMat exchangeratesatthedatesofthetransactions.

Foreigncurrencydifferencesarerecognisedinothercomprehensiveincomeandaccumulatedin theFCTRinequity.However,iftheoperationisanon-wholly-ownedsubsidiary,thentherelevant proportionateshareofthetranslationdifferenceisallocatedtothenon-controllinginterests.When aforeignoperationisdisposedofsuchthatcontrol,significantinfluenceorjointcontrolislost,the cumulativeamountintheFCTRrelatedtothatforeignoperationisreclassifiedtoprofitorlossas partofthegainorlossondisposal.

WhentheGroupdisposesofonlypartofitsinterestinasubsidiarythatincludesaforeignoperation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. WhentheGroupdisposesofonlypartofitsinvestmentinanassociateorjointventurethatincludes aforeignoperationwhileretainingsignificantinfluenceorjointcontrol,therelevantproportionof thecumulativeamountisreclassifiedtoprofitorloss.

(c) financial instruments

(i) Initial recognition and measurement

Afinancialassetorafinancial liability isrecognisedinthestatementoffinancialpositionwhen, andonlywhen,theGrouportheCompanybecomesapartytothecontractualprovisionsofthe instrument.

Afinancialinstrumentisrecognisedinitially,atitsfairvalueplus,inthecaseofafinancialinstrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisitionorissueofthefinancialinstrument.


64


(c) financial instruments (cont’d)

(ii) Financial instrument categories and subsequent measurement

TheGroupandtheCompanycategorisefinancialinstrumentsasfollows:

Financial assets

(a) Financialassetsatfairvaluethroughprofitorloss

Fairvaluethroughprofitorlosscategorycomprisesfinancialassetsthatareheldfortrading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designatedintothiscategoryuponinitialrecognition.

Derivativesthatarelinkedtoandmustbesettledbydeliveryofunquotedequityinstruments whosefairvaluescannotbereliablymeasuredaremeasuredatcost.

Otherfinancialassetscategorisedasfairvaluethroughprofitorlossaresubsequentlymeasured attheirfairvalueswiththegainorlossrecognisedinprofitorloss.

(b) Loans and receivables

Loansandreceivablescategorycomprisesdebtinstrumentsthatarenotquotedinanactive market.

Financialassetscategorisedasloansandreceivablesaresubsequentlymeasuredatamortised costusingtheeffectiveinterestmethod.

(c) Available-for-salefinancialassets

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivativesthatareeitherdesignatedinthiscategoryornotclassifiedinanyoftheother categories.Theyareincludedinnon-currentassetsunlessmanagementintendstodisposeof the investment within 12 months of the reporting date. Investments are designated as available-for-sale if theydonothavefixedmaturitiesandfixedordeterminablepayments andmanagementintendstoholdthemforthemediumtolongterm.

Available-for-saleassetsarecarriedat fair value,withchanges in fair value recognised in equity.Ifthereisasignificantorprolongeddeclineinthefairvalueofasecuritybelowitscost it isconsideredasanindicatorthatthesecuritiesare impaired. Ifanysuchevidenceexists for available-for-sale financial assets, the cumulative loss - measured as the difference between theacquisition cost and thecurrent fair value, less any impairment loss on that financialassetpreviouslyrecognisedinprofitorloss-isremovedfromequityandrecognised in the statements of profit or loss and other comprehensive income. Impairment losses recognisedintheconsolidatedstatementofprofitorlossandothercomprehensiveincome onequityinstrumentsclassifiedasavailable-for-salearenotreversedthroughtheconsolidated statementofprofitorlossandothercomprehensiveincome.

Allfinancialassets,exceptforthosemeasuredatfairvaluethroughprofitor loss,aresubjectto reviewforimpairment(seeNote2(k)(i)).





(ii) Financial instrument categories and subsequent measurement (cont’d)

Financial liabilities

Allfinancialliabilitiesaresubsequentlymeasuredatamortisedcostotherthanthosecategorised asfairvaluethroughprofitorloss.

Fairvaluethroughprofitorlosscategorycomprisesfinancialliabilitiesthatarederivatives(except foraderivative that isa financialguaranteecontractoradesignatedandeffectivehedging instrument) or financial liabilities that are specifically designated into this category upon initial recognition.

Derivativesthatare linkedtoandmustbesettledbydeliveryofequity instruments thatdonot haveaquotedprice inanactivemarket for identical instrumentswhose fair valuesotherwise cannotbereliablymeasuredaremeasuredatcost.

Otherfinancialliabilitiescategorisedasfairvaluethroughprofitorlossaresubsequentlymeasured attheirfairvalueswiththegainorlossrecognisedinprofitorloss.

(iii) Financial guarantee contracts

Afinancialguaranteecontractisacontractthatrequirestheissuertomakespecifiedpayments toreimbursetheholderforalossitincursbecauseaspecifieddebtorfailstomakepaymentwhen dueinaccordancewiththeoriginalormodifiedtermsofadebtinstrument.

Fairvaluesarisingfromfinancialguaranteecontractsareclassifiedasdeferredincomeandare amortisedtoprofitorlossusingastraight-linemethodoverthecontractualperiodor,whenthereis no specifiedcontractualperiod, recognised inprofitor lossupondischargeof theguarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation ismade. If thecarryingvalueof thefinancialguaranteecontract is lower thanthe obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.

(iv) Regularwaypurchaseorsaleoffinancialassets Aregularwaypurchaseorsaleisapurchaseorsaleofafinancialassetunderacontractwhose terms requiredeliveryof theassetwithin the time frameestablishedgenerallyby regulationor conventioninthemarketplaceconcerned.

Aregularwaypurchaseorsaleoffinancialassetsisrecognisedandderecognised,asapplicable, usingtradedateaccounting.Tradedateaccountingrefersto:

(a) therecognitionofanassettobereceivedandtheliabilitytopayfor itonthetradedate, and (b) derecognitionofanasset that is sold, recognitionofanygainor lossondisposaland the recognitionofareceivablefromthebuyerforpaymentonthetradedate.





(v) Derecognition

Afinancialassetorpartofitisderecognisedwhen,andonlywhenthecontractualrightstothe cashflowsfromthefinancialassetexpireorcontroloftheassetisnotretainedorsubstantiallyall oftherisksandrewardsofownershipofthefinancialassetaretransferredtoanotherparty.On derecognitionofafinancialasset,thedifferencebetweenthecarryingamountandthesumofthe considerationreceived(includinganynewassetobtainedlessanynewliabilityassumed)andany cumulativegainorlossthathadbeenrecognisedinequityisrecognisedinprofitorloss.

Afinancialliabilityorapartofitisderecognisedwhen,andonlywhen,theobligationspecified inthecontractisdischarged,cancelledorexpires.Onderecognitionofafinancialliability,the differencebetween thecarryingamountof thefinancial liabilityextinguishedor transferred to anotherpartyandtheconsiderationpaid,includinganynon-cashassetstransferredorliabilities assumed,isrecognisedinprofitorloss.

(d) property, plant and equipment

(i) Recognition and measurement

Itemsofproperty,plantandequipmentaremeasuredatcostlessanyaccumulateddepreciation andanyaccumulatedimpairmentlosses.

Costincludesexpendituresthataredirectlyattributabletotheacquisitionoftheassetandany othercostsdirectlyattributabletobringingtheassettoworkingconditionforitsintendeduse,and thecostsofdismantlingandremovingtheitemsandrestoringthesiteonwhichtheyarelocated. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifyingassets,borrowingcostsarecapitalisedinaccordancewiththeaccountingpolicyon borrowingcosts.Costalsomayincludetransfersfromequityofanygainorlossonqualifyingcash flowhedgesofforeigncurrencypurchasesofproperty,plantandequipment.

Purchasedsoftwarethatisintegraltothefunctionalityoftherelatedequipmentiscapitalisedas partofthatequipment.

Whensignificantpartsofanitemofproperty,plantandequipmenthavedifferentusefullives,they areaccountedforasseparateitems(majorcomponents)ofproperty,plantandequipment.

Thegainorlossondisposalofanitemofproperty,plantandequipmentisdeterminedbycomparing theproceeds fromdisposalwith thecarryingamountofproperty,plantandequipmentand is recognisednetwithin“otheroperatingincome”and“otheroperatingexpenses”respectivelyin profitorloss.

(ii) Subsequent costs

Thecostofreplacingacomponentofanitemofproperty,plantandequipmentisrecognised inthecarryingamountoftheitemifitisprobablethatthefutureeconomicbenefitsembodied within thecomponentwill flow to theGroupor theCompany,and its costcanbemeasured reliably. Thecarryingamountof the replacedcomponent isderecognisedtoprofitor loss. The costsoftheday-to-dayservicingofproperty,plantandequipmentarerecognisedinprofitorloss asincurred.



(d) property, plant and equipment (cont’d)

(iii) Depreciation

Depreciation isbasedon thecostofanasset less its residualvalue.Significantcomponentsof individual assets are assessed, and if a component has a useful life that is different from the remainderofthatasset,thenthatcomponentisdepreciatedseparately.

Depreciationisrecognisedinprofitorlossonastraight-linebasisovertheestimatedusefullivesof each component of an item of property, plant and equipment from the date that they are availableforuse.Leasedassetsaredepreciatedovertheshorteroftheleasetermandtheiruseful livesunlessit isreasonablycertainthattheGroupwillobtainownershipbytheendofthelease term.Freeholdlandisnotdepreciated.Property,plantandequipmentunderconstructionarenot depreciateduntiltheassetsarereadyfortheirintendeduse.

Theestimatedusefullivesforthecurrentandcomparativeperiodsareasfollows:

• Leaseholdland 30-99years • Buildings 50-60years • Plantandmachinery 3-10years • Tools,jigsandfixtures 1-4years • Furniture,fittings,officeequipment,renovationandsignboards 3-10years • Motorvehicles 5years

Depreciationmethods,usefullivesandresidualvaluesarereviewedattheendofthereporting periodandadjustedasappropriate.

(e) biological assets

Biologicalassetscomprisematureandimmatureoilpalmplantations.Biologicalassetsarestatedat fairvaluelessestimatedcoststosellwithanychangesthereinrecognisedinprofitorlossinthereporting periodinwhichitarises.

(f) leased assets

(i) Finance lease

LeasesintermsofwhichtheGrouportheCompanyassumessubstantiallyalltherisksandrewards ofownershipareclassifiedasfinanceleases.Uponinitialrecognition,theleasedassetismeasured atanamountequal to the lowerof its fairvalueand thepresentvalueof theminimum lease payments.Subsequentto initial recognition,theasset isaccountedfor inaccordancewiththe accountingpolicyapplicabletothatasset.

Minimum lease payments made under finance leases are apportioned between the finance expenseandthereductionoftheoutstandingliability.Thefinanceexpenseisallocatedtoeach periodduringtheleasetermsoastoproduceaconstantperiodicrateofinterestontheremaining balanceoftheliability.Contingentleasepaymentsareaccountedforbyrevisingtheminimum leasepaymentsovertheremainingtermoftheleasewhentheleaseadjustmentisconfirmed.

Leaseholdlandwhichinsubstanceisafinanceleaseisclassifiedasproperty,plantandequipment, orasinvestmentpropertyifheldtoearnrentalincomeorforcapitalappreciationorforboth.




(f) leased assets (cont’d)

(ii) Operating leases

LeaseswheretheGrouportheCompanydoesnotassumesubstantiallyalltherisksandrewards of ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the statement of financial position. Propertyinterestheldunderanoperatinglease,whichisheldtoearnrentalincomeorforcapital appreciationorforboth,isclassifiedasinvestmentpropertyandmeasuredusingcostmodel.

Paymentsmadeunderoperatingleasesarerecognisedinprofitorlossonastraight-linebasisover thetermofthelease.Leaseincentivesreceivedarerecognisedinprofitorlossasanintegralpart ofthetotalleaseexpense,overthetermofthelease.Contingentrentalsarechargedtoprofitor lossinthereportingperiodinwhichtheyareincurred.

Leaseholdlandwhichinsubstanceisanoperatingleaseisclassifiedasprepaidleasepayments.

(g) investment properties

(i) Investment properties carried at cost

Investmentpropertiesarepropertieswhichareownedorheldtoearnrentalincomeorforcapital appreciationorforboth,butnotforsaleintheordinarycourseofbusiness,useintheproduction orsupplyofgoodsorservicesorforadministrativepurposes.

Investmentpropertiesaremeasuredatcostlessanyaccumulateddepreciationandanyimpairment losses, consistent with the accounting policy for property, plant and equipment as stated in accountingpolicyNote2(d).

Depreciationiscalculatedoverthedepreciableamount,whichisthecostofanasset,orother amountsubstitutedforcost.

Depreciationisrecognisedinprofitorlossonastraight-linebasisoverthetermofthelease.

An investment property is derecognised on its disposal, or when it is permanently withdrawn fromuseandnofutureeconomicbenefitsareexpectedfromitsdisposal.Thedifferencebetween thenetdisposalproceedsandthecarryingamountisrecognisedinprofitorlossintheperiodin whichtheitemisderecognised.

(ii) Reclassificationto/frominvestmentproperty

Whenanitemofproperty,plantandequipmentistransferredtoinvestmentpropertyfollowinga changeinitsuse,thecarryingamountoftheitemimmediatelypriortotransferisrecognisedasthe deemedcostoftheinvestmentpropertyforsubsequentaccounting.

Whentheuseofapropertychangessuchthatitisreclassifiedasproperty,plantandequipment or inventories, itscarryingamountat thedateof reclassificationbecomes itsdeemedcost for subsequentaccounting.



(h) intangible assets

(i) Goodwill

Goodwillarisesonbusinesscombinationsismeasuredatcostlessanyaccumulatedimpairment losses. In respect of equity-accounted associates and joint venture, the carrying amount of goodwillisincludedinthecarryingamountoftheinvestmentandanimpairmentlossonsuchan investmentisnotallocatedtoanyasset,includinggoodwill,thatformspartofthecarryingamount oftheequity-accountedassociatesandjointventure.

(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technicalknowledgeandunderstanding,isrecognisedinprofitorlossasincurred.

Expenditure on development activities, whereby the research findings are applied to a plan ordesignfortheproductionofneworsubstantiallyimprovedproductsandprocesses,iscapitalised only ifdevelopmentcostscanbemeasuredreliably, theproductorprocess is technicallyand commerciallyfeasible,futureeconomicbenefitsareprobableandtheGroupintendstoandhas sufficientresourcestocompletedevelopmentandtouseorselltheasset.

Theexpenditurecapitalisedincludesthecostofmaterials,directlabourandoverheadscoststhat aredirectlyattributabletopreparingtheassetforitsintendeduse.Forqualifyingassets,borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Other developmentexpenditureisrecognisedinprofitorlossasincurred.

Capitaliseddevelopmentexpenditure ismeasuredatcost lessanyaccumulatedamortisation andanyaccumulatedimpairmentlosses.

(iii) Customer relationships

Customerrelationshipsareintangibleassetsacquiredinabusinesscombinationandarearising fromsupplyarrangementswithselectedestablishedlongtermcustomers.Customerrelationships aredeterminedusingfairvalueatacquisition,whichhavefiniteusefullives,andaremeasuredat costlessanyaccumulatedamortisationandanyaccumulatedimpairmentlosses.

(iv) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodiedinthespecificassettowhichitrelates.Allotherexpenditure,includingexpenditureon internallygeneratedgoodwillandbrands,isrecognisedinprofitorlossasincurred.

(v) Amortisation

Goodwillisnotamortisedbutistestedforimpairmentannuallyandwheneverthereisanindication thattheymaybeimpaired.

Developmentcostsandcustomerrelationshipsareamortisedandrecognisedinprofitorlossona straight-linebasisovertheirrespectiveestimatedusefullives.Amortisationisbasedonthecostof anassetlessitsresidualvalue.




(h) intangible assets (cont’d)

(v) Amortisation (cont’d)

Theestimatedusefullivesforthecurrentandcomparativeperiodsareasfollows:

• capitaliseddevelopmentcosts 4–5years • customerrelationships 20years

Amortisationmethods,usefullivesandresidualvaluesarereviewedattheendofeachreporting periodandadjusted,ifappropriate.

(i) inventories

Inventoriesaremeasuredatthelowerofcostandnetrealisablevalue.

Thecostofinventoriesiscalculatedusingtheweightedaveragecostmethod,andincludesexpenditure incurredinacquiringtheinventories,productionorconversioncostsandothercostsincurredinbringing themtotheirexistinglocationandcondition.Inthecaseofwork-in-progressandfinishedgoods,cost includesanappropriateshareofproductionoverheadsbasedonnormaloperatingcapacity.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lesstheestimated costsofcompletionandtheestimatedcostsnecessarytomakethesale.

(j) cash and cash equivalents

Cashandcashequivalentsconsistofcashonhand,balancesanddepositswithbanksandhighly liquid investmentswhichhavean insignificant riskofchanges in fairvaluewithoriginalmaturitiesof threemonthsorless,andareusedbytheGroupandtheCompanyinthemanagementoftheirshort termcommitments.Forthepurposeofthestatementofcashflows,cashandcashequivalentsare presentednetofbankoverdraftsandpledgeddeposits.

(k) impairment

(i) Financial assets

All financial assets (except for financial assets categorised as fair value through profit or loss, investments in subsidiaries, investments in associate and joint venture) are assessed at each reportingdatewhetherthereisanyobjectiveevidenceofimpairmentasaresultofoneormore eventshavinganimpactontheestimatedfuturecashflowsoftheasset.Lossesexpectedasa resultoffutureevents,nomatterhowlikely,arenotrecognised.Foraninvestmentinanequity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidenceof impairment. Ifanysuchobjectiveevidenceexists, thenthe impairment lossof the financialassetisestimated.

Animpairmentlossinrespectofloansandreceivablesisrecognisedinprofitorlossandismeasured asthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuture cashflowsdiscountedat theasset’soriginaleffective interest rate.Thecarryingamountof the assetisreducedthroughtheuseofanallowanceaccount.



(k) impairment (cont’d)

(i) Financial assets (cont’d)

An impairment loss in respectofavailable-for-salefinancialassets is recognised inprofitor loss and ismeasured as the difference between the asset’s acquisition cost (net of any principal repaymentandamortisation)andtheasset’scurrentfairvalue,lessanyimpairmentlosspreviously recognised.Whereadecline in the fairvalueofanavailable-for-salefinancialassethasbeen recognised in the other comprehensive income, the cumulative loss in other comprehensive incomeisreclassifiedfromequitytoprofitorloss.

Animpairmentlossinrespectofunquotedequityinstrumentthatiscarriedatcostisrecognisedin profitorlossandismeasuredasthedifferencebetweenthefinancialasset’scarryingamountand thepresentvalueofestimatedfuturecashflowsdiscountedatthecurrentmarketrateofreturnfor asimilarfinancialasset.

Impairmentlossesrecognisedinprofitorlossforaninvestmentinanequityinstrumentclassifiedas availableforsaleisnotreversedthroughprofitorloss.

If, ina subsequentperiod, the fair valueofadebt instrument increasesand the increasecan beobjectivelyrelatedtoaneventoccurringaftertheimpairmentlosswasrecognisedinprofitor loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceedwhatthecarryingamountwouldhavebeenhadtheimpairmentnotbeenrecognisedat thedatetheimpairmentisreversed.Theamountofthereversalisrecognisedinprofitorloss.

(ii) Other assets

Thecarryingamountsofotherassets(exceptforinventoriesanddeferredtaxassets)arereviewed attheendofeachreportingperiodtodeterminewhetherthereisanyindicationofimpairment.If any such indicationexists, then theasset’s recoverableamount isestimated.Forgoodwilland intangibleassetsthathaveindefiniteusefullivesorthatarenotyetavailableforuse,therecoverable amountisestimatedeachperiodatthesametime.

For thepurposeof impairment testing,assetsaregrouped together into the smallestgroupof assetsthatgeneratescashinflowsfromcontinuingusethatarelargelyindependentofthecash inflowsofotherassetsorCGUs.Subjecttoanoperatingsegmentceilingtest,forthepurposeof goodwillimpairmenttesting,CGUstowhichgoodwillhasbeenallocatedareaggregatedsothat the levelatwhich impairmenttesting isperformedreflectsthe lowest levelatwhichgoodwill is monitoredforinternalreportingpurposes.Thegoodwillacquiredinabusinesscombination,forthe purposeofimpairmenttesting,isallocatedtoaCGUoragroupofCGUsthatareexpectedto benefitfromthesynergiesofthecombination.

TherecoverableamountofanassetorCGUisthegreaterofitsvalueinuseanditsfairvalueless costsofdisposal.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheir presentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetime valueofmoneyandtherisksspecifictotheassetorCGU.

AnimpairmentlossisrecognisedifthecarryingamountofanassetoritsrelatedCGUexceedsits estimatedrecoverableamount.




(k) impairment (cont’d)

(ii) Other assets (cont’d)

Impairmentlossesarerecognisedinprofitorloss.ImpairmentlossesrecognisedinrespectofCGUs areallocatedfirst to reduce thecarryingamountofanygoodwillallocated to theCGU (ora groupofCGUs)andthentoreducethecarryingamountsoftheotherassets intheCGU(ora groupofCGUs)onapro ratabasis.

Animpairment loss inrespectofgoodwill isnotreversed. Inrespectofotherassets, impairment lossesrecognisedinpriorperiodsareassessedattheendofeachreportingperiodforanyindications thatthelosshasdecreasedornolongerexists.Animpairmentlossisreversediftherehasbeen achangeintheestimatesusedtodeterminetherecoverableamountsincethelastimpairment losswas recognised.An impairment loss is reversedonly to theextent that theasset’scarrying amount does not exceed the carrying amount that would have been determined, net of depreciationoramortisation,ifnoimpairmentlosshadbeenrecognised.Reversalsofimpairment lossesarecreditedtoprofitorlossinthefinancialyearinwhichthereversalsarerecognised.

(l) non-current assets held for sale or distribution to owners

Non-current assets, or disposal group comprising assets and liabilities, that are expected to be recoveredprimarily throughsaleordistribution rather thanthroughcontinuinguse,areclassifiedas heldforsaleordistribution.

Immediatelybeforeclassificationasheldforsaleordistribution,theassets,orcomponentsofadisposal group, are remeasured in accordancewith theGroup’s accounting policies. Thereafter generally theassets,ordisposalgrouparemeasuredattheloweroftheircarryingamountandfairvalueless costsofdisposal.

Any impairment lossonadisposalgroup isfirstallocatedtogoodwill,andthento remainingassets andliabilitiesonproratabasis,exceptthatnolossisallocatedtoinventories,financialassets,deferred tax assets, employee benefit assets and investment property, which continue to be measured in accordancewiththeGroup’saccountingpolicies.Impairmentlossesoninitialclassificationasheldfor saleordistributionandsubsequentgainsorlossesonremeasurementarerecognisedinprofitorloss. Gainsarenotrecognisedinexcessofanycumulativeimpairmentloss.

Intangibleassetsandproperty,plantandequipmentonceclassifiedasheld for saleordistribution are not amortised or depreciated. In addition, equity accounting of equity-accounted investees ceasesonceclassifiedasheldforsaleordistribution.

(m) equity instruments

Instrumentsclassifiedasequityaremeasuredatcoston initial recognitionandarenot remeasured subsequently.

(i) Issue expenses

Costs directly attributable to the issue of instruments classified as equity are recognised as a deductionfromequity.

(ii) Ordinary shares

Ordinarysharesareclassifiedasequity.



(n) Employee benefits

(i) Short-termemployeebenefits

Short-termemployeebenefitobligationsinrespectofsalaries,annualbonuses,paidannualleave andsickleavearemeasuredonanundiscountedbasisandareexpensedastherelatedservice isprovided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharingplansiftheGrouphasapresentlegalorconstructiveobligationtopaythisamount as a result of past service provided by the employee and the obligation can be estimated reliably.Agroupofsubsidiaries’obligationsforemployees’annualleaveandlongserviceleave entitlementsarerecognisedasprovisionsinthestatementoffinancialposition.

(ii) State plans

TheGroup’scontributionstoEmployees’ProvidentFundarechargedtoprofitorlossinthefinancial yeartowhichtheyrelate.Prepaidcontributionsarerecognisedasanassettotheextentthata cashrefundorareductioninfuturepaymentsisavailable.

(iii) Definedbenefitplans

TheGroup’snetobligationinrespectofdefinedbenefitplansiscalculatedseparatelyforeach planbyestimatingtheamountoffuturebenefitthatemployeeshaveearnedinthecurrentand priorperiods,discountingthatamountanddeductingthefairvalueofanyplanassets.

Thecalculationofdefinedbenefitobligationsisperformedannuallybyaqualifiedactuaryusing theprojectedunitcreditmethod.WhenthecalculationresultsinapotentialassetfortheGroup,the recognisedassetislimitedtothepresentvalueofeconomicbenefitsavailableintheformofany future refunds from theplanor reductions in futurecontributions to theplan. Tocalculate the presentvalueofeconomicbenefits,considerationisgiventoanyapplicableminimumfunding requirements.

Remeasurementsofthenetdefinedbenefit liability,whichcompriseactuarialgainsandlosses, thereturnonplanassets(excludinginterest)andtheeffectoftheassetceiling(ifany,excluding interest),arerecognisedimmediatelyinothercomprehensiveincome.TheGroupdeterminesthe netinterestexpenseorincomeonthenetdefinedliabilityorassetfortheperiodbyapplyingthe discount rate used tomeasure thedefinedbenefit obligationat thebeginningof theannual periodtothethennetdefinedbenefitliabilityorasset,takingintoaccountanychangesinthenet defined benefit liability or asset during the period as a result of contributions and benefit payments.

Netinterestexpenseandotherexpensesrelatingtodefinedbenefitplansarerecognisedinprofit orloss.

Whenthebenefitsofaplanarechangedorwhenaplan iscurtailed, the resultingchange in benefitthat relatestopastserviceorthegainor lossoncurtailment is recognised immediately inprofitorloss.TheGrouprecognisesgainsandlossesonthesettlementofadefinedbenefitplan whenthesettlementoccurs.

(iv) Terminationbenefits

TerminationbenefitsareexpensedattheearlierofwhentheGroupcannolongerwithdrawthe offerofthosebenefitsandwhentheGrouprecognisescostsforarestructuring.Ifbenefitsarenot expectedtobesettledwhollywithin12monthsoftheendofthereportingperiod,thentheyare discounted.


74


(o) provisions

Aprovisionisrecognisedif,asaresultofapastevent,theGrouphasapresentlegalorconstructive obligationthatcanbeestimatedreliably,anditisprobablethatanoutflowofeconomicbenefitswill be required to settle theobligation. Provisionsaredeterminedbydiscounting theexpected future cashflowsatapre-taxratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyand therisksspecifictotheliability.Theunwindingofthediscountisrecognisedasfinancecost.

Warranties

A provision for warranties is recognised when the underlying products or services are sold. The provisionisbasedonhistoricalwarrantydataandaweightingofallpossibleoutcomesagainsttheir associatedprobabilities.

(p) exploration and evaluation asset

Explorationandevaluationassets in relationtoseparateareasof interest, forwhichrightsof tenure are current, are capitalised in the year in which they are incurred and are carried at cost less accumulatedimpairmentlosseswherethefollowingconditionsaresatisfied:

(i) therightoftenureoftheareaofinterestarecurrent;and (ii) atleastoneofthefollowingconditionsisalsomet:

• theexplorationandevaluationexpendituresareexpectedtoberecoupedthroughsuccessful developmentandexploitationoftheareaofinterest,oralternatively,byitssale;or • explorationandevaluationactivities intheareaof interesthavenotatthereportingdate reacheda stagewhichpermitsa reasonableassessmentof theexistenceorotherwiseof economicallyrecoverablereserves,andactiveandsignificantoperationsin,orinrelationto, theareaofinterestarecontinuing.

Capitalisedexplorationcosts are reviewedat each reportingdateas towhetheran indicationof impairmentexists.Ifanysuchindicationexists,therecoverableamountofthecapitalisedexploration costs isestimatedtodeterminetheextentoftheimpairmentloss(ifany).Whereanimpairmentloss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverableamount,butonlytotheextentthattheincreasedcarryingamountdoesnotexceedthe carryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeenrecognisedforthe asset in previous years. Where a decision is made to proceed with development, accumulated expenditurewillbetestedforimpairment,transferredtodevelopmentproperties,andthenamortised over the life of the reserves associated with the area of interest once mining operations have commenced.

Projectcosts relating to theoilandgas sectorarecarried forward to theextent that the following conditionshavebeenmet:

• itisprobablethatthefutureeconomicbenefitsembodiedintheassetwilleventuate;and • theassetpossessesacostorothervaluethatcanbemeasuredreliably.

Costswhichnolongersatisfytheaboveconditionsarewrittenoffinprofitorloss.




(q) revenue and other income

(i) Goods sold

Revenuefromthesaleofgoods inthecourseofordinaryactivities ismeasuredatfairvalueof theconsideration receivedor receivable, net of returnsandallowances, tradediscounts and volumerebates.Revenue is recognisedwhenpersuasiveevidenceexists,usually in theformof an executed sales agreement, that the significant risks and rewards of ownership have been transferredtothecustomer,recoveryoftheconsiderationisprobable,theassociatedcostsand possiblereturnofgoodscanbeestimatedreliably,thereisnocontinuingmanagementinvolvement withthegoods,andtheamountofrevenuecanbemeasuredreliably.Ifitisprobablethatdiscounts willbegrantedandtheamountcanbemeasuredreliably,thenthediscountisrecognisedasa reductionofrevenueasthesalesarerecognised.

(ii) Services

Revenue from services rendered is recognised in profit or loss when the services have been rendered. Revenue from management services is accrued, by reference to the agreements entered.

(iii) Rental income Rentalincomefrominvestmentpropertyisrecognisedinprofitorlossonastraight-linebasisover thetermofthelease.Leaseincentivesgrantedarerecognisedasanintegralpartofthetotalrental income,overthetermofthelease.Rentalincomefromsub-leasedpropertyisrecognisedasother income.

(iv) Dividend income

DividendincomeisrecognisedinprofitorlossonthedatethattheGroup’sortheCompany’sright toreceivepaymentisestablished,whichinthecaseofquotedsecuritiesistheex-dividenddate.

(v) Interest income

Interestincomeisrecognisedasitaccruesusingtheeffectiveinterestmethodinprofitorloss.

(vi) Government grants

Government grants are recognised initially as deferred income at fair value when there is reasonableassurancethattheywillbereceivedandthattheGroupwillcomplywiththeconditions associatedwiththegrant;theyarethenrecognisedinprofitorlossasotherincomeonasystematic basisovertheusefullifeoftheasset.

GrantsthatcompensatetheGroupforexpensesincurredarerecognisedinprofitorlossasother incomeonasystematicbasisinthesameperiodsinwhichtheexpensesarerecognised.




(r) borrowing costs

Borrowingcosts thatarenotdirectlyattributabletotheacquisition,constructionorproductionofa qualifyingassetarerecognisedinprofitorlossusingtheeffectiveinterestmethod.

Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets, whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseor sale,arecapitalisedaspartofthecostofthoseassets.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditurefortheassetisbeingincurred,borrowingcostsarebeingincurredandactivitiesthatare necessarytopreparetheassetforitsintendeduseorsaleareinprogress.Capitalisationofborrowing costsissuspendedorceaseswhensubstantiallyalltheactivitiesnecessarytopreparethequalifying assetforitsintendeduseorsaleareinterruptedorcompleted.

Investment income earned on the temporary investment of specific borrowings pending their expenditureonqualifyingassetsisdeductedfromtheborrowingcostseligibleforcapitalisation.

(s) income tax

Incometaxexpensecomprisescurrentanddeferredtax.Currenttaxanddeferredtaxarerecognised inprofitorlossexcepttotheextentthatitrelatestoabusinesscombinationoritemsrecogniseddirectly inequityorothercomprehensiveincome.

Currenttaxistheexpectedtaxpayableorreceivableonthetaxableincomeorlossfortheyear,using taxratesenactedorsubstantivelyenactedbytheendofthereportingperiod,andanyadjustmentto taxpayableinrespectofpreviousfinancialyears.

Deferredtaxisrecognisedusingtheliabilitymethod,providingfortemporarydifferencesbetweenthe carryingamountsofassetsand liabilities in the statementof financial positionand their taxbases. Deferredtaxisnotrecognisedforthefollowingtemporarydifferences:theinitialrecognitionofgoodwill, theinitialrecognitionofassetsorliabilitiesinatransactionthatisnotabusinesscombinationandthat affectsneitheraccountingnortaxableprofitorloss.Deferredtaxismeasuredatthetaxratesthatare expectedtobeappliedtothetemporarydifferenceswhentheyreverse,basedonthelawsthathave beenenactedorsubstantivelyenactedbytheendofthereportingperiod.

Deferredtaxassetsandliabilitiesareoffsetifthereisalegallyenforceablerighttooffsetcurrenttax liabilitiesandassets,andtheyrelatetoincometaxes leviedbythesametaxauthorityonthesame taxableentity,orondifferenttaxentities,buttheyintendtosettlecurrenttaxliabilitiesandassetsona netbasisortheirtaxassetsandliabilitieswillberealisedsimultaneously.

Adeferredtaxasset is recognisedtotheextentthat it isprobablethatfuturetaxableprofitswillbe availableagainstwhichthetemporarydifferencecanbeutilised.Deferredtaxassetsarereviewedat theendofeachreportingperiodandarereducedtotheextentthatitisnolongerprobablethatthe relatedtaxbenefitwillberealised.

Unutilisedreinvestmentallowanceandinvestmenttaxallowance,beingtaxincentivethatisnotatax baseofanasset,isrecognisedasadeferredtaxassettotheextentthatitisprobablethatthefuture taxableprofitswillbeavailableagainsttheunutilisedtaxincentivecanbeutilised.



(t) discontinued operations

AdiscontinuedoperationisacomponentoftheGroup’sbusinessthatrepresentsaseparatemajorline ofbusinessorgeographicalareaofoperationsthathasbeendisposedoforisheldforsaleordistribution, orisasubsidiaryacquiredexclusivelywithaviewtoresale.Classificationasadiscontinuedoperation occursupondisposalorwhentheoperationmeetsthecriteriatobeclassifiedasheldforsale,ifearlier. Whenanoperationisclassifiedasadiscontinuedoperation,thecomparativestatementofprofitor lossandothercomprehensiveincomeisre-presentedasiftheoperationhadbeendiscontinuedfrom thestartofthecomparativeperiod.

(u) earnings per ordinary share

TheGrouppresentsbasicanddilutedearningspersharedataforitsordinaryshares(“EPS”).

BasicEPSiscalculatedbydividingtheprofitorlossattributabletoordinaryshareholdersoftheCompany bytheweightedaveragenumberofordinarysharesoutstandingduringtheperiod,adjustedforown sharesheld.

DilutedEPSisdeterminedbyadjustingtheprofitorlossattributabletoordinaryshareholdersandthe weighted average number of ordinary shares outstanding adjusted for own shares held for the effectsofalldilutivepotentialordinaryshares,whichcompriseconvertiblenotesandshareoptions grantedtoemployees.

(v) operating segments

Anoperatingsegment isacomponentoftheGroupthatengages inbusinessactivities fromwhich itmayearnrevenuesandincurexpenses,includingrevenuesandexpensesthatrelatetotransactions withanyof theGroup’sothercomponents.Alloperatingsegments’operating resultsare reviewed regularly by thechief operatingdecisionmakers,which in this caseare ExecutiveDirectors of the Group,tomakedecisionsaboutresourcestobeallocatedtothesegmentandtoassessitsperformance, andforwhichdiscretefinancialinformationisavailable.

(w) contingent liabilities

Whereitisnotprobablethatanoutflowofeconomicbenefitswillberequired,ortheamountcannot beestimated reliably, theobligation isnot recognised in thestatementsoffinancialpositionand is disclosedasacontingent liability,unless theprobabilityofoutflowofeconomicbenefits is remote. Possibleobligations,whoseexistencewillonlybeconfirmedby theoccurrenceornon-occurrence ofoneormorefutureevents,arealsodisclosedascontingentliabilitiesunlesstheprobabilityofoutflow ofeconomicbenefitsisremote.




(x) fair value measurement

Fairvalueofanassetoraliability,exceptforshare-basedpaymentandleasetransactions,isdetermined asthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransaction betweenmarketparticipantsatthemeasurementdate.Themeasurementassumesthatthetransaction toselltheassetortransfertheliabilitytakesplaceeitherintheprincipalmarketorintheabsenceofa principalmarket,inthemostadvantageousmarket.

Fornon-financialasset,thefairvaluemeasurementtakesintoaccountamarketparticipant’sability togenerateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanother marketparticipantthatwouldusetheassetinitshighestandbestuse.

Whenmeasuringthefairvalueofanassetoraliability,theGroupusesobservablemarketdataasfar aspossible.Fairvaluesarecategorisedintodifferentlevelsinafairvaluehierarchybasedontheinputs usedinthevaluationtechniqueasfollows:

Level1: quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheGroup canaccessatthemeasurementdate.

Level2: inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetor liability,eitherdirectlyorindirectly.

Level3: unobservableinputsfortheassetorliability.

TheGrouprecognisestransfersbetweenlevelsofthefairvaluehierarchyasofthedateoftheeventor changeincircumstancesthatcausedthetransfers.


3.

pro

pert

y, p

lan

t a

nd

eq

uip

men

t

At1July2013

66,184

64,816

344,290

11,119

25,924

4,901

50517,284

Additions

-57

5,763

2,008

1,616

992

34

10,470

Disp

osa

ls -

-

-

-

Writ

ten

off

-

-

- -

Reclassifications

-38

26

-3

-

-Effectofm

ovementsinexchangera

tes

-

At30June2014/1July2014

65,707

63,730

343,394

13,043

27,314

4,898

12518,098

Additions

-16

5,369

95

1,316

207

159

7,162

Acquisitionsofsubsid

iaries

--

452

64

262

--

778

Disp

osalofsubsid

iaries

-

-D

ispo

sals

- -

-

- W

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ff

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- Transfertoassetsheldfo

rsale

-

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tes

326

1,306

4,033

23

536

88

-6,312

At30June2015

50,897

49,627

306,984

13,196

21,280

2,863

171

445,018

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’000

rm

’000

rm

’000

rm

’000

(1,849)

(82)

(959)

(2,890)

(4)

(84)

(116)

(204)

(67)

(477)

(1,181)

(4,832)

(31)

(36)

(5)

(6,562)

(5,760)

(8,005)

(23,519)

(3,487)

(1,375)

(42,146)

(1,939)

(9)

(501)

(2,449)

(3,247)

(29)

(1,565)

(34)

(4,875)

(9,376)

(7,420)

(17,559)

(3,087)

(420)

(37,862)



Depreciationfo

rtheyear

1,392

1,887

11,194

224

1,491

950

-17,138

Impairm

entloss

--

1,419

-8,197

--

9,616

Disp

osalofsubsid

iaries

-

-

-D

ispo

sals

- -

-

- W

ritte

n o

ff

- -

- Transfertoassetsheldfo

rsale

-

-Effectofm


tes

39

417

2,364

8287

55

-3,170

At30June2015

Accumulateddepreciation

5,211

8,830

258,586

4,680

16,553

1,350

-295,210

Accumulatedim

pairm

entlosses

--

15,344

1,379

50

--

16,773

5,211

8,830

273,930

6,059

16,603

1,350

-311,983

ca

rryi

ng a

mo

unts

At30June2014/1July2014

61,065

52,482

47,108

7,187

6,846

2,553

12177,253

At30June2015

45,686

40,797

33,054

7,137

4,677

1,513

171

133,035

(2,237)

(22,156)

(3,053)

(1,274)

(28,720)

(1,014)

(6)

(455)

(1,475)

(3,282)

(29)

(947)

(31)

(4,289)

(862)

(2,485)

(10,881)

(9,834)

(240)

(24,302)

3.

pro

pert

y, p

lan

t a

nd

eq

uip

men

t (c

on

t’d

)

de

pre

cia

tion

and

imp

airm

ent

loss

es

At1July2013


3,262

10,011

267,661

3,914

19,458

2,153

-306,459

Accumulatedim

pairm

entlosses

--

1,321

-49

--

1,370

3,262

10,011

268,982

3,914

19,507

2,153

-307,829

Depreciationfo

rtheyear

1,380

1,962

18,244

620

1,239

1,042

-24,487

Impairm

ent

--

13,100

1,379

--

-14,479

Disp

osa

ls -

-

-

-

Writ

ten

off

-

-

- -

Reclassifications

-

405

-

--

-Effectofm


tes

-

-

-At30June2014/1July2014


4,642

11,248

281,865

4,477

20,419

2,345

-324,996

Accumulatedim

pairm

entlosses

--

14,421

1,379

49

--

15,849

4,642

11,248

296,286

5,856

20,468

2,345

-340,845

fu

rnitu

re,

fit

ting

s, o

ffic

e

eq

uip

me

nt,

too

ls,

reno

vatio

n

co

nstr

uctio

n

pla

nt a

nd

jigs

and

a

nd

mo

tor

wo

rk-i

n-G

roup

(c

ont

’d)

Land

Bu

ildin

gs

ma

chi

nery

fix

ture

s si

gnb

oa

rd

vehi

cle

s p

rog

ress

To

tal

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

(1,848)

(78)

(819)

(2,745)

(4)

(57)

(98)

(159)

(377)

(28)

(348)

(2,593)

(74)

(31)

(3,046)


3. property, plant and equipment (cont’d)

3.1 leased plant and equipment

At 30 June 2015, the carrying amounts of plant and equipment of theGroup under finance lease arrangementareasfollows:

furniture, fittings and office company equipment rm’000

group 2015 2014 rm’000 rm’000

carrying amounts Plantandmachinery 881 2,322 Officeequipment 487 72 Motorvehicles 477 713 1,845 3,107

Theseleasedplantandequipmentarechargedtofinancialinstitutionsassecurityforborrowingsofthe GroupasdisclosedinNote18.

cost At1July2013 28 Additions 44 At30June2014/1July2014 72 Additions 4

At30June2015 76 depreciation At1July2013 4 Depreciationfortheyear 7

At30June2014/1July2014 11 Depreciationfortheyear 19

At30June2015 30 carrying amounts At30June2014/1July2014 61 At30June2015 46


82

3. property, plant and equipment (cont’d)

3.2 security

At30June2015,theproperty,plantandequipmentoftheGroupwiththefollowingcarryingamounts arechargedtofinancialinstitutionsassecurityforborrowingsoftheGroupasdisclosedinNote18:

3.3 land

Includedinthecarryingamountsoflandare:

4. biological assets

group 2015 2014 rm’000 rm’000 restated

carrying amounts Land 8,831 15,750 Buildings 772 14,584 Plantandmachinery 10,371 12,929

19,974 43,263

group 2015 2014 rm’000 rm’000 restated

Freeholdland 2,952 8,760 Shorttermleaseholdlandwithunexpiredleaseperiodoflessthan50years 29,308 38,748 Longtermleaseholdlandwithunexpiredleaseperiodofmorethan50years 13,426 13,557 45,686 61,065

group 2015 2014 rm’000 rm’000

at fair value Atbeginningofyear 39,919 38,611 Changeinfairvaluerecognisedinprofitorloss - 1,308

Atendofyear 39,919 39,919

TheserelatetotheGroup’sbearerbiologicalassetsofoilpalmplantations.


83

4. biological assets (cont’d)

analysis of the biological assets

security

Biological assets, representing oil palm plantation, with a carrying amount of RM39,919,000 (2014: RM39,919,000)arechargedtofinancialinstitutionsassecurityforborrowingsoftheGroupasdisclosedin Note18.

fair value information

ThefairvaluemeasurementforbiologicalassetshasbeencategorisedasLevel3fairvaluebasedonthe inputstothevaluationtechniquesused.

level 3 fair value

Level3fairvalueisestimatedusingunobservableinputsfortheplantation.

ThefollowingtableshowsareconciliationofLevel3fairvalues:

group 2015 2014

Plantedarea(inhectares) Mature 741 737 Immature 41 27 782 764 Outputharvested Oilpalmfreshfruitbunches(inmetricton) 15,297 14,764

Fairvaluelesscoststosell(inRM’000) 39,919 39,919


group 2015 2014 rm’000 rm’000

Atbeginningofyear 39,919 38,611 Gains recognised in profit or loss Changeinfairvalue - 1,308

Atendofyear 39,919 39,919


84

4. biological assets (cont’d)

fair value information (cont’d)

level 3 fair value (cont’d)

ThefollowingtableshowsthevaluationtechniquesusedinthedeterminationoffairvalueswithinLevel3,as wellasthesignificantunobservableinputsusedinthevaluationmodels.

analysis of measurement

Theoilpalmsweremainlyplantedbetween1996and2015,andarecurrentlyagedbetween0to19years old.

Significantassumptionsmadeindeterminingthefairvaluesoftheoilpalmplantationsareasfollows:

(a) Oilpalmtreeshaveanaveragelifeof25years,withthefirstthreeyearsasimmatureandremaining yearsasmature;and

(b) ThereiskeendemandforoilpalmestatesinSabahwiththecontinueddemandforfreshfruitbunches fromlocalmills.

valuation processes applied by the group for level 3 fair value

Thefairvalueofoilpalmplantationsisdeterminedbyanexternalindependentvaluer,havingappropriate recognisedprofessionalqualificationsandrecentexperienceinthelocationandcategoryofplantations beingvalued.ThevaluerprovidesthefairvalueoftheGroup’splantationsportfolioeveryyear.Changes inLevel3fairvaluesareanalysedbythemanagementeveryyearafterobtainingvaluationreportfromthe valuer.

financial risk management strategies

TheGroupisexposedtofinancialrisksarisingfromchangesinoilpalmfreshfruitbunches(“FFB”)prices.The GroupdoesnotanticipatethatFFBpriceswilldeclinesignificantlyintheforeseeablefutureand,therefore, hasnotenteredintoderivativeorothercontractstomanagetheriskofadeclineinFFBprices.TheGroup reviewsitsoutlookforFFBpricesregularlyinconsideringtheneedforactivefinancialriskmanagement.

Inter-relationship between significant Significant unobservable inputs and fair value valuation technique unobservable inputs measurement

The fair value of the biologicalassets is derived by deductingfrom the value of the whole, themarket value of the land (in itsexistinguseasanagriculturalland)as evidenced by market salesand the value of buildings andstructures.

Inarrivingatthebare landvalue,comparisonofmarketsalesismadebetween similar raw plantationlands.

Adjustedmarket price of thecomparable land within thevicinity.

Expected price of fresh fruitbunches.

The estimated fair value wouldincrease/(decrease)if:

– marketpricesoflandwere(lower) /higher.– fair value of fresh fruit bunches werehigher/(lower).


85

TheinvestmentpropertywasrelatedtoaparcelofvacantlongtermleaseholdlandacquiredbytheGroup in 2010whichhadanunexpired lease termof 910 yearsasat 30 June 2014. This parcel of investment propertywasnotrentedoutandnoincomewasgeneratednoranydirectoperatingexpensewasincurred. Duringthefinancialyear,thesaidlandhasbeendisposedofthroughthedisposalofasubsidiary(seeNote 26).

long term leasehold group land rm’000


5. exploration and evaluation assets

cost At1July2013/30June2014/1July2014 - - - Acquisitionofsubsidiaries 15,753 62,818 78,571 Effectofmovementsinexchangerates 150 660 810 Additions - 6,782 6,782

At30June2015 15,903 70,260 86,163 carrying amounts At30June2014/1July2014 - - -

At30June2015 15,903 70,260 86,163

exploratory exploration group rights expenditure total rm’000 rm’000 rm’000

Explorationandevaluationassetsprincipallycompriseexplorationandevaluation relatedcosts incurred forseveralcoalbedmethaneproductionsharingcontracts(‘PSC’)inIndonesia.Exploratoryrightsrelateto thepremiumpaidfortheparticipatinginterestintheMuaraEnimandRengatPSCsbyNuEnergyGasLimited, asubsidiaryacquiredduringtheyear.

TheexplorationandevaluationassetsarenotamortisedasthePSCshavenotcommencedcommercial productionduringthefinancialyear.

impairment assessment

Managementassessedtherecoverableamountsof theexplorationandevaluationassetsbasedonthe higherofitsfairvaluelesscosttosell(“FVLCTS”)andvalueinuse(“VIU”).Noimpairmentlossistoberecognised basedontheassessmentresult.

6. investment property

cost At1July2013/30June2014/1July2014 11,045 Disposalofasubsidiary (11,045)

At30June2015 - carrying amounts At30June2014/1July2014 11,045

At30June2015 -


86

Inter-relationship between significant Significant unobservable inputs and fair value valuation technique unobservable inputs measurement

TheGroupestimatesthefairvalueof the investmentpropertybasedonthefollowingkeyassumptions:– Comparison of the Group’s investmentpropertywithsimilar properties that were listed for sale within the vicinity or other comparablelocalities;and– Enquirieswith relevantproperty valuersandrealestateagentson marketconditionsandchanging markettrends.

Assumptions used todetermine the adjustmentsto be applied on themarketpriceofcomparablepropertywithin the vicinity. Theadjustments are made forlocation, accessibility, size,shape,tenure,titlerestrictions,if any, land use zoning andother relevant characteristicstoarriveatthefairvalueofthesubjectproperty.

The estimated fair value wouldincrease/(decrease) if theadjustments applied on marketpricesofpropertieswerefavourable/(unfavourable).


level 1 level 2 level 3 total rm’000 rm’000 rm’000 rm’000

2014 Leaseholdland - - 20,000 20,000

level 3 fair value

Level3fairvalueisestimatedusingunobservableinputsfortheinvestmentproperty.

ThefollowingtableshowsthevaluationtechniquesusedinthedeterminationoffairvalueswithinLevel3, aswellasthesignificantunobservableinputsusedinthevaluationmodels.

6. investment property (cont’d)

fair value information

Fairvalueofinvestmentpropertyiscategorisedasfollows:

87

cost At1July2013 94,889 31,499 1,594 127,982Additions - - 792 792

At30June2014/1July2014 94,889 31,499 2,386 128,774Additions 252 - 337 589

At30June2015 95,141 31,499 2,723 129,363 amortisation and impairment loss At1July2013 Accumulatedamortisation - - 841 841 Accumulatedimpairmentloss 20,546 - - 20,546 20,546 - 841 21,387Amortisationfortheyear - 1,658 335 1,993Impairmentloss 18,430 - - 18,430At30June2014/1July2014 Accumulatedamortisation - 1,658 1,176 2,834 Accumulatedimpairmentloss 38,976 - - 38,976 38,976 1,658 1,176 41,810Amortisationfortheyear - 1,658 471 2,129Impairmentloss 22,000 21,079 - 43,079At30June2015 Accumulatedamortisation - 3,316 1,647 4,963 Accumulatedimpairmentloss 60,976 21,079 - 82,055 60,976 24,395 1,647 87,018

carrying amounts At30June2014/1July2014 55,913 29,841 1,210 86,964

At30June2015 34,165 7,104 1,076 42,345

customer developmentgroup goodwill relationships cost total rm’000 rm’000 rm’000 rm’000

7. intangible assets

7.1 amortisation

Theamortisationofcustomer relationshipsanddevelopmentcosts is recognisedasotheroperating expensesinprofitorlossandisamortisedovertheirrespectiveestimatedusefullives.

7.2 impairment testing for cgus containing customer relationships and goodwill

TheperformanceoftheIntegratedManufacturingServices(“IMS”)segmentoftheGroupdepends heavilyonthesalesofamajorcustomer.In2015,therehasbeenasignificantslowdowninthesalesof the saidmajor customer. Hence, the impairment loss on customer relationships and goodwill was recognised.

Forthepurposeofimpairmenttesting,goodwillofRM33,913,000(2014:RM55,913,000)andRM252,000 (2014:Nil)areallocatedto the IMSandEnergysegments respectively.However, for thepurposeof segmentalreportingwhichreflectstheinternalmanagementreportsreviewedbythechiefoperating decisionmakers,goodwillisnotallocatedtoanyofthereportablesegment.



88

7. intangible assets (cont’d)

7.2 impairment testing for cgus containing customer relationships and goodwill (cont’d)

Inassessingwhethergoodwillandcustomer relationshipsare impaired, thecarryingamountof the CGU(includinggoodwillandcustomerrelationships)iscomparedwiththerecoverableamountofthe CGU.TherecoverableamountisthehigherofFVLCTSandVIU.

TherecoverableamountoftheIMSsegmentwasdeterminedbasedonitsVIU.Thecarryingamountof the IMS segment was higher than its recoverable amount and an impairment loss to goodwill of RM22,000,000(2014:RM18,430,000)andanimpairmentlosstocustomerrelationshipsofRM21,079,000 (2014:Nil)wererecognisedinprofitorloss.

TherecoverableamountoftheEnergysegmentwasdeterminedbasedonthehigherof itsFVLCTS andVIU.The recoverableamountof theEnergysegmentwashigher than itscarryingamountand hence,noimpairmentlosswasrecognised.

VIUwasdeterminedbydiscountingthefuturecashflowsexpectedtobegeneratedfromthecontinuing operationsoftheCGUsandwasbasedonthefollowingkeyassumptions:

• Cashflowswereprojectedbasedonpastexperience,actualoperatingresultsin2015andthe5- yearbusinessplanapprovedbytheBoardofDirectors. • Theanticipatedannualrevenuegrowthincludedinthecashflowsprojectionswasbetween0% and7%fortheyearsfrom2016to2020(2014:1%to33%fortheyearsfrom2015to2019)basedon averagegrowthexperiencedoverthepastfiveyears. • Cashflowsformorethan5yearswereextrapolatedusingaconstantterminalgrowthrateof2% forthecashflowsgeneratedbyCGUsinMalaysiaand4%forthecashflowsgeneratedbyCGUs inIndonesia(2014:4%forboththecashflowsgeneratedbyCGUsinMalaysiaandIndonesia). • Projected gross profit margin which reflects the average historical gross margin, adjusted for projectedmarketandeconomicconditionsandinternalresourcesefficiency. • Pre-taxdiscountratesof10%to11%(2014:10.5%to12.9%)wereappliedindiscountingthecash flows.ThediscountratesweredeterminedbasedontheGroup’sweightedaveragecostofcapital adjustedfortheriskoftheunderlyingassets.

Thevaluesassignedtothekeyassumptionsrepresentmanagement’sassessmentoffuturetrendsinthe industriesandarebasedonbothexternalsourcesandinternalsources.

sensitivity analysis

Theaboveestimatesaresensitiveinthefollowingkeyareas:

a) anincrease/(decrease)ofaonepercentagepointindiscountrateusedwouldhave(decreased)/ increasedtherecoverableamountbyapproximately(RM13,802,000)/RM18,115,000.

b) an increase/(decrease) of a one percentagepoint in terminal growth rate usedwould have increased/(decreased) the recoverable amount by approximately RM23,644,000/ (RM17,958,000).


89

company 2015 2014 rm’000 rm’000

at cost Unquotedshares 536,385 563,504 Less:Impairmentloss (212,060) (186,276)

324,325 377,228

During thefinancial year, theCompany redeemed27,119,000of its redeemableconvertiblepreference sharesinAICCorporationSdnBhd,awhollyownedsubsidiaryataredemptionpriceofRM1.00each.

impairment assessment Managementassessedtherecoverableamountsoftheinvestmentsinsubsidiariesbasedonthehigherof FVLCTSorVIUofthesesubsidiaries.TheassessmentresultedinanadditionalimpairmentlossofRM25,784,000 (2014:RM43,766,000)duringtheyear.Theimpairmentlosswasmadeagainstthegroupentitiesoperatingin theIMSsegment.Thekeyassumptionsusedinarrivingattherecoverableamounts,whereVIUmethodis used,aredisclosedinNote7.

Thedetailsofthesubsidiariesareasfollows:


8. investments in subsidiaries

AICCorporationSdnBhd(“AIC”) Malaysia Investmentholding 100 100 AutoVCorporationSdnBhd(“AutoV”) Malaysia Investmentholding 100 100 JotechHoldingsSdnBhd(“Jotech”) Malaysia Investmentholding 100 100 GlobaltecEnergyResourcesSdnBhd Malaysia Investmentholding 100 - (formerly known as JCM Auto Components Sdn Bhd) (“GER”) (1)

subsidiaries of ger

NewCenturyEnergyResources Cayman Investmentholdingand 60 - Limited(“NCE”)(7) Islands explorationandproduction ofoilandgas

NewCenturyEnergyServices Cayman Provisionofservicestothe 60 - Limited(“NCES”)(7) Islands oilandgasindustry

NuEnergyGasLimited Australia Investmentholdingand 44 - (“NGY”)(1)(2)(5)(8) explorationandproduction ofoilandgas

principal effective place of ownership business/ interest and country of voting interest name of subsidiary incorporation principal activities 2015 2014 % %



subsidiaries of nces

StarMineGlobalLimited(7) BritishVirgin Dormant 60 - Islands

NewCenturyEnergyServicesSdnBhd Malaysia Dormant 60 100 (formerly known as Globaltec Plantations Sdn Bhd) (1)

subsidiaries of ngy

IndonCBMPtyLtd(2) Australia Coalbedmethane 44 - exploration PTTrisulaCBMEnergi(2) Indonesia Coalbedmethane 42 - exploration IndoCBMSumbagselIIPteLimited(2) Singapore Coalbedmethane 44 - exploration NuEnergyGas(Singapore)PteLimited(2) Singapore Hasnotcommencedits 44 - intendedoperationsof petroleumminingand prospectingservices NuEnergyGas(Tanzania)Limited(2)(3) Tanzania Coalbedmethane 44 - exploration NuEnergyGas(Zambia)Limited(2)(3) Zambia Coalbedmethane 44 - exploration PourmorePtyLtd(2) Australia Dormant 44 - SheratonPinesPtyLtd(2) Australia Dormant 44 -

subsidiaries of Jotech

CergasFortuneSdnBhd Malaysia Cultivationandsales 100 100 ofoilpalmfruitbunches

MalgreenProgressSdnBhd(1) Malaysia Cultivationandsalesof 100 100 oilpalmfruitbunches


8. investments in subsidiaries (cont’d)

Thedetailsofthesubsidiariesareasfollows(cont’d):


subsidiaries of Jotech (cont’d)

PTIndotechMetalNusantara(2) Indonesia Manufacturingand 100 100 fabricationoftoolsand diesandstampedmetal components for electronics andautomotiveindustries

GuangDongJotechKongYuePrecision ThePeople’s Manufacturingand 60 60 IndustriesLtd(“JKY”)(2) Republicof fabricationoftoolsand China diesandstampedmetal components for electronics andelectricalindustries Ceasedoperations subsequenttotheyearend

YeeHengPrecisionStampingSdnBhd Malaysia Dormant 100 100

JotechMetalFabricationIndustries Malaysia Manufacturingand - 100 SdnBhd(4) fabricationoftoolsand diesandstampedmetal components for electrical andconsumerelectronics industries

subsidiaries of aic

ProdelconSdnBhd Malaysia Manufactureofhigh 100 100 precisiontooling,die-sets, semiconductormoulds andpartsandhighprecision components,jigsand fixturesandthedesignand manufactureofturnkey automationsystems

AICTechnologySdnBhd Malaysia Investmentholding 100 100 AICInspirasiSdnBhd Malaysia Dormant 100 100

AICPropertiesSdnBhd(4) Malaysia Investmentholding - 100

IntegralCADTechnologiesSdnBhd Malaysia Dormant 100 100





92

subsidiary of aic technology sdn bhd AICSemiconductorSdnBhd(“AICS”) Malaysia Design,procurement,sales, 94 94 assemblyandtestof integratedcircuitchipsand otherancillaryactivities

subsidiary of prodelcon sdn bhd

IsotraxEngineeringSdnBhd(1)(2) Malaysia Dormant 100 100

subsidiaries of autov

AutoVMandoSdnBhd Malaysia Manufactureof 70 70 automotivesteering columnsandrelated vehiclecomponents

AutoVSystemsSdnBhd(“ASSB”) Malaysia Marketingandmanufacture 100 100 ofautomotivecomponents

AutomakoSdnBhd(6) Malaysia Manufactureandsaleof 100 100 automotivewiperarms andbladesandother relatedcomponents. Operationsceasedand transferredtoASSBduring theyear

AutoventureCoatSdnBhd(9) Malaysia Dormant - 100

AutoventureCorporationSdnBhd(1) Malaysia Investmentholding 100 100 AutovisorPlasticsSdnBhd(6) Malaysia Manufacturingofsunvisors 100 100 andinteriorcarlamps. Operationsceasedand transferredtoASSBduring theyear

AventurDoorSystemSdnBhd(6) Malaysia Manufacturingofcar 100 100 windowregulatorsandother automotivecomponents. Operationsceasedand transferredtoASSBduring theyear





93

subsidiaries of autov (cont’d)

NuwizardTechnologiesSdnBhd(3) (9) Malaysia Dormant 100 100

BrimalHoldingsSdnBhd(6) Malaysia Design,manufacturingand 100 100 assemblyofautomotive componentsandelectronic products.Operations ceasedandtransferredto ASSBduringtheyear

JPMetalSdnBhd Malaysia Manufactureand 100 100 fabricationoftoolsand diesandstampedmetal components for electronics andautomotiveindustries

NobelDecreeSdnBhd(1)(6) Malaysia Manufactureandsupply 84 84 ofautomotiveelectric horns.Operationsceased andtransferredtoASSB duringtheyear

Proreka(M)SdnBhd(“Proreka”)(1) Malaysia Manufacturingandsourcing 100 100 ofpartsfortheautomotive industry

subsidiaries of autoventure corporation sdn bhd

AutoVMarketingSdnBhd(1) Malaysia Dormant 100 100

HKRManufacturingSdnBhd Malaysia Dormant 100 100

subsidiaries of proreka

ProrekaAutomotivePartsSdnBhd (1) Malaysia Productdesignservices 100 100 andtradinginautomotive partsandaccessories

ProrekaPlasticSdnBhd Malaysia Dormant 100 100

ProrekaTechSdnBhd (1) Malaysia Manufacturingandtrading 100 100 inautomotivepartsand accessories.Ceased operationsduringtheyear






94

(1) The auditors’ reports on the financial statements of these subsidiaries contain an emphasis of matter on going concern. The ability of these subsidiaries to continue as going concerns is dependent on the continuing financial support from the Company.

(2) Not audited by member firms of KPMG International.

(3) An application has been made to de-register this subsidiary during the financial year.

(4) These subsidiaries were consolidated based on their management accounts up to the date of its disposal during the year.

(5) Although the Group effectively owns less than half of the ownership interest and voting power in NGY, the Directors have determined that the Group controls the entity. GER and its subsidiary, NCE, each owns 27.7% direct ownership interests and voting power in NGY. This represents a total of 55.4% direct ownership in NGY. Consequently, the Group has de facto control over NGY, on the basis that the remaining voting rights in NGY are widely dispersed and that there is no indication that all other shareholders exercise their votes collectively.

(6) During the year, the business and undertaking, including all the assets and liabilities of these subsidiaries were transferred and integrated into ASSB.

(7) Not required to be audited pursuant to the relevant regulations of the country of incorporation. The results of these entities are not material to the Group.

(8) The subsidiary is listed on the Australian Securities Exchange.

(9) These subsidiaries have been de-registered.

subsidiaries of proreka (cont’d)

SenkoSekeiSdnBhd (3) Malaysia Dormant 100 100





95


8.1 non-controlling interests in subsidiaries TheGroup’ssubsidiariesthathavematerialnon-controllinginterests(“NCI”)areasfollows:

other individually insignificant 2015 JKy aics ngy subsidiaries total rm’000 rm’000 rm’000 rm’000 rm’000

nci percentage of ownership interest and voting interest 40% 6% 56% CarryingamountofNCI 4,697 7,470 59,441 5,363 76,971

LossallocatedtoNCI 2,160

rm’000 rm’000 rm’000 as at 30 June Non-currentassets 13,560 41,280 91,891 Currentassets 4,964 27,213 23,942 Non-currentliabilities - Currentliabilities

Netassets 11,742 58,916 106,174 year ended 30 June Revenue 11,640 37,842 - Lossfortheyear Cashflowsfromoperatingactivities 1,050 2,932 Cashflowsfrominvestingactivities 12 Cashflowsfromfinancingactivities -

Netincrease/(decrease)incashandcash equivalents 941 402

Summarised financial information before intra-group elimination


(4,489) (237) (1,939) (4,505)

(2,021) (6,361) (4,761) (9,579) (3,298)

(11,222) (3,852) (3,465) (1,222) (62) (6,922) (121) (2,468)

(8,144)


96

9. investment in an associate


8.1 non-controlling interests in subsidiaries (cont’d)

group 2015 2014 rm’000 rm’000

At cost: UnquotedsharesoutsideMalaysia 7,221 7,221 Shareofpost-acquisitionreserves (287) (200)

6,934 7,021


other individually insignificant 2014 JKy aics subsidiaries total rm’000 rm’000 rm’000 rm’000

nci percentage of ownership interest and voting interest 40% 6% CarryingamountofNCI 8,258 7,707 5,310 21,275

LossallocatedtoNCI 1,234

rm’000 rm’000 as at 30 June Non-currentassets 21,640 44,699 Currentassets 7,642 30,507 Non-currentliabilities - Currentliabilities Netassets 20,645 62,768 year end 30 June Revenue 13,538 42,382 Lossfortheyear

Cashflowsfromoperatingactivities 939 Cashflowsfrominvestingactivities - Cashflowsfromfinancingactivities -

Netincrease/(decrease)incashand cashequivalents 939

Summarised financial information before intra-group elimination

(3,786) (4,851) (12,438)

(341) (20,998) (185) (278) (129)

(592)

(136) (1,289) (191)

97

Detailsoftheassociateareasfollows:

RockhillResourcesLtd. BritishVirgin Intendedbusinessactivity 40 40 Islands isexplorationandextractionofcoal. Businessoperationhasyetto commence.

principal effective place of ownership business/ interest and country of voting interest name of entity incorporation nature of the relationship 2015 2014 % %

2015 2014 rm’000 rm’000

as at 30 June Non-currentassets 2,211 2,000 Currentassets 30 30 Non-currentliabilities - Currentliabilities

Netassets/(liabilities) 2,174 year ended 30 June Lossandothercomprehensiveexpense group’s share of results Group’sshareofloss Group’sshareofforeigncurrencytranslationloss

reconciliation of net assets to carrying amount as at 30 June Group’sshareofnetassets 870 Goodwill 7,203 7,203 Eliminationofeffectsduetodebt-to-equityconversion - CarryingamountintheGroup’sstatementoffinancialposition 6,934 7,021

The following tables summarise the information of the Group’s associate, adjusted for any differences inaccountingpoliciesandreconciletheinformationtothecarryingamountoftheGroup’sinterestinthe associate.


9. investment in an associate (cont’d)

(2,441) (67) (43)

(454)

(218) (394) (45) (150) (42) (8)

(182)

(1,139)


98

10. investment in Joint venture

group 2015 2014 rm’000 rm’000

UnquotedsharesinMalaysia,atcost 4,646 4,646 Shareofpost-acquisitionreserves Less:Impairmentloss

- -

Proreka Sprintex Sdn Bhd (“PSSB”) is theonly jointarrangement inwhich theGroupparticipates. PSSB is structuredasaseparatevehicleandprovidestheGrouptherighttoitsnetassets.Accordingly,theGroup hasclassifiedtheinvestmentinPSSBasajointventure.

Detailsofthejointventureareasfollows:

ProrekaSprintexSdnBhd Malaysia SupplieroftheGroupinmanufacturing 50 50 (“PSSB”) andtradingofautomotivepartsand accessories.

principal effective place of ownership business/ interest and country of voting interest name of entity incorporation nature of the relationship 2015 2014 % %

ThefollowingtablessummarisethefinancialinformationofPSSB,adjustedforanydifferencesinaccounting policies.ThetablesalsoreconcilethesummarisedfinancialinformationtothecarryingamountoftheGroup’s interestinPSSB,whichisaccountedforusingtheequitymethod.

Summarised financial information

2015 2014 rm’000 rm’000

as at 30 June Non-currentassets 4,864 6,016 Currentassets 2,768 3,071 Non-currentliabilities Currentliabilities

Netassets 379 4,053 year ended 30 June Lossandothercomprehensiveexpense

(1,763) (1,763) (2,883) (2,883)


(6,746) (1,935) (507) (3,099)

(3,674) (2,512)

99

10. investment in Joint venture (cont’d)

Summarised financial information (cont’d)

2015 2014 rm’000 rm’000

Included in the total comprehensive expense Revenue 1,258 1,349 Depreciation Interestexpense

reconciliation of net assets to carrying amount as at 30 June Group’sshareofnetassets 190 2,027 Shareofpost-acquisitionlossesnotrecognised 2,693 856 Impairmentloss

CarryingamountintheGroup’sstatementoffinancialposition - -

impairment assessment

In2013,theGrouphasfullyimpaireditsinvestmentinthejointventureduetocontinuedlossesfacedbythe jointventureintheprioryears.

contingent liability

Asat30June2015,theCompanyhasoutstandingcorporateguaranteeofRM5.0milliongrantedinfavour ofalicensedbankforcreditfacilitiesgrantedtothejointventure.Outofthetotalbankingfacilitiesgranted tothejointventure,atotalofRM2.0million(2014:RM2.8million)wasoutstandingattheyearend.

11. other investments

quoted outside malaysia group shares fund shares total rm’000 rm’000 rm’000 rm’000

2015 non-current Available-for-salefinancialassets - - 22 22

- - 22 22 current Financialassetsatfairvaluethroughprofitorloss –Heldfortrading 300 - - 300 –Designateduponinitialrecognition - 1,602 - 1,602

300 1,602 - 1,902

total 300 1,602 22 1,924

Marketvalue 300 1,602 22 1,924


quoted in malaysia

(1,191) (1,158) (149) (206)

(2,883) (2,883)


100

11. other investments (cont’d)

quoted outside malaysia group shares fund shares total rm’000 rm’000 rm’000 rm’000

2014 current Financialassetsatfairvaluethroughprofitorloss –Heldfortrading 381 - - 381 –Designateduponinitialrecognition - 1,453 - 1,453

total 381 1,453 - 1,834 Marketvalue 381 1,453 - 1,834


quoted in malaysia

12. DEfERRED TAx ASSETS/(LIABILITIES)

Recognised deferred tax assets/(liabilities)

Deferredtaxassetsandliabilitiesareattributabletothefollowing:

assets liabilities net group 2015 2014 2015 2014 2015 2014 rm’000 rm’000 rm’000 rm’000 rm’000 rm’000

Property,plantandequipment –capitalallowancesinexcessof depreciation - - –revaluationpriortoMFRSadoption - - Exploratoryrights - - - - Unabsorbedcapitalallowances 237 20 - - 237 20 Provisions 1,207 1,153 - - 1,207 1,153 Unabsorbedtaxlosses - 237 - - - 237 Otheritems 143 - - 143 Taxassets/(liabilities) 1,587 1,410 Setoff 1,587 1,410 - -

Nettaxliabilities - -

(6,476) (7,222) (6,476) (7,222) (1,931) (4,575) (1,931) (4,575) (6,332) (6,332)

(32) (32) (14,739) (11,829) (13,152) (10,419) (1,587) (1,410)

(13,152) (10,419) (13,152) (10,419)


12.

def

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ax

ass

ets

an

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es (

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m

ove

me

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mp

ora

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iffe

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dur

ing

the

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to

reco

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Tran

slatio

n

busin

ess

Disp

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of

liabi

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s in

pro

fit

Tran

slatio

n

at

or lo

ss

exch

ange

a

t co

mbi

natio

ns

subs

idia

ries

held

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ss

exch

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1.7.

2013

(n

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25)

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30.6

.201

4 (n

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35.3

) (n

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26)

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) (n

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25)

diffe

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es 3

0.6.

2015

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

(15,455)

(7,222)

(6,476)

(4,682)

(4,575)

(1,931)

(6,301)

(31)

(6,332)

(20)

(237)

(3,560)

(579)

(55)

(40)

(1,479)

(32)

(13)

(13,273)

(10,419)

(6,301)

(31)

(13,152)

Property,plantand

equipment

–capita

lallowancein

excessofd

epreciation

8,173

60

-

693

-53

-

–reva

luationpriorto

MFRSadoption

107

-

-504

2,021

119

-

Exploratoryrights

--

--

-

--

Unabsorbedcapita

l

allowances

-20

-20

-

-237

-.521.237

Unabsorbedtaxlosses

100

137

-237

--

-

-.521.521

-

Unabsorbedre

investment

allowances

3,560

-

--

--

--.521.521

-

Provisio

ns

1,787

1,153

-

-94

-.521,207

Otheritems

1,417

30

-

-

188

-.521.143

2,819

35

1,124

2,021

454


102

12. DEfERRED TAx ASSETS/(LIABILITIES) (CONT’D)

unrecognised deferred tax assets

Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems(statedatgross):

group company 2015 2014 2015 2014 rm’000 rm’000 rm’000 rm’000

Unabsorbedtaxlosses –Unrecognisedtemporarydifferences 36,675 41,415 - - –Acquisitionthroughbusinesscombinations 40,110 - - - Unabsorbedcapitalallowances 29,197 23,707 - - Property,plantandequipment (20,364) (34,376) - - Provisions 6,076 5,699 - - Otheritems 18,403 15,147 - - 110,097 51,592 - -

The temporarydifferencesabovedonotexpire under current tax legislation.Deferred taxassets have beenrecogniseduptotheextentofthefuturetaxableprofitsavailableagainstwhichtheGroupcanutilise thebenefitstherefrom.

13. inventories

group 2015 2014 rm’000 rm’000

Rawmaterials 23,861 24,919 Work-in-progress 5,436 7,807 Finishedgoods 14,850 15,097 Consumablegoods 1,302 2,442

45,449 50,265 Carryingamountofinventoriespledgedassecurityforborrowings ofasubsidiary(Note18) 4,244 6,034

Recognised in profit or loss (Debit/(Credit)):

Inventoriesrecognisedascostofsales 139,789 201,127 Inventorieswrittenoff 2,804 1,530 Inventorieswrittenback - (64)


* The written off and written back are included in cost of sales.


14. trade and other receivables

14.1 trade receivables

IncludedintradereceivablesoftheGroup:

a) isanamountofRM1,353,000(2014:RM819,000)duefromthenon-controllinginterestsofsubsidiaries. Thetradereceivablesaresubjecttonormaltradeterms;

b) isanamountofRM21,000(2014:RM17,000)owingbyacompanyinwhichapersonrelatedtoa directorhasinterests.Thetradereceivableissubjecttonormaltradeterms;and

c) isanamountofRM52,000(2014:RM137,000)owingbycompaniesinwhichcertaindirectorshave interests.Thetradereceivablesaresubjecttonormaltradeterms.

14.2 amount due from subsidiaries

Thetradeamountduefromsubsidiariesisunsecured,interestfreeandrepayableondemand.

Thenon-tradeamountduefromsubsidiariesisunsecured,interestfreeandrepayableondemand.

14.3 deposits

Included in thedepositsof theGroupandtheCompanyare rentaldepositsofRM3,327,000(2014: RM3,391,000)whichearninterestattherateofabout3%(2014:3%)perannum.

14.4 amount due from a joint venture

The non-trade amount due from a joint venture is unsecured, interest free and repayable on demand.


trade Tradereceivables 14.1 67,621 69,769 - - Less:Impairmentloss (3,339) (3,802) - - 64,282 65,967 - - Amountduefromsubsidiaries 14.2 - - 838 625 64,282 65,967 838 625 non-trade Otherreceivables 2,091 2,999 25 - Less:Impairmentloss (795) (818) - -

1,296 2,181 25 - Deposits 14.3 10,865 5,539 3,338 3,401 Amountduefromsubsidiaries 14.2 - - 36,822 - Amountduefromajointventure 14.4 40 900 - - Prepayments 8,198 4,849 1,000 -

20,399 13,469 41,185 3,401

total 84,681 79,436 42,023 4,026

globaltec formation berhad (953031-A) • annual report 2015


15. cash and cash equivalents


Deposits placed with licensed banks 27,910 14,895 - - Short term placement funds with approved financialinstitutions 4,349 5,477 - - Cash and bank balances 26,933 22,832 7,333 400

59,192 43,204 7,333 400

Included in deposits placed with licensed banks of the Group are deposits of RM2,692,000 (2014: RM3,973,000) pledged for bank facilities granted to subsidiaries (Note 18).

16. disposal group held for sale

A subsidiary within the IMS operating segment is presented as disposal group held for sale following the commitmentof theGroup’smanagementduring thefinancialyear toaplan toceaseoperationsand dispose of its business. At 30 June 2015, the assets and liabilities of the disposal group are as follows:

group note 2015 rm’000

Assetsclassifiedasheldforsale Property, plant and equipment a 13,560 Inventories b 986 Receivables c 1,356 Cash and cash equivalents 2,624

18,526 Liabilitiesclassifiedasheldforsale Payables and accruals 1,699 Current tax liabilities 80 Borrowings 2,982 Deferred tax liabilities 2,021

6,782

The carrying value of property, plant and equipment of the disposal group is the same as its carrying value beforeitwasreclassifiedtoassetsclassifiedasheldforsaleundercurrentassets.

Cumulativeincomeorexpenserecognisedinothercomprehensiveincome

The cumulative income recognised in other comprehensive income relating to the disposal group is RM10,470,000.


16. disposal group held for sale (cont’d)

note a

Property, plant and equipment held for sale comprise the following:

group note 2015 rm’000

Cost 3 37,862 Accumulated depreciation 3 (15,610) Accumulated impairment losses 3 (8,692)

13,560

note b

Theinventoriesheldforsalecompriserawmaterials,workinprogressandfinishedgoodswhicharecarried at cost calculated using the weighted average method.

note c

Receivables are carried at cost less impairment loss, if any.

17. capital and reserves

17.1Sharecapital

Authorised: Ordinary shares of RM0.10 each 1,000,000 10,000,000 1,000,000 10,000,000 Issuedandfullypaidup: Ordinary shares of RM0.10 each At beginning of year 538,174 5,381,738 527,365 5,273,646 Issued during the year - - 10,809 108,092 At end of year 538,174 5,381,738 538,174 5,381,738

GroupandCompany number number Amount ofshares Amount ofshares rm’000 ’000 rm’000 ’000 2015 2015 2014 2014

In 2014, 108,091,663 ordinary shares of RM0.10 each in the Company were allotted and issued as a result of the conversion of 5.45 million Redeemable Convertible Preference Shares in ASSB (“ASSB RCPS”).

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company and rank equally with regard to the Company’s residual assets.



17. capital and reserves (cont’d)

17.2 Sharepremium

This comprises the premium paid on subscription of ordinary shares in the Company over and above the par value of the shares.

17.3 capital reserve

The capital reserve arose from the redemption of preference shares by a subsidiary in prior years.

17.4 Otherreserves

available Foreign forsale Business Fairvalue currency financial combination adjustment translation assets (Debit)/Credit deficit reserve reserve reserve Total group rm’000 rm’000 rm’000 rm’000 rm’000

At 1 July 2013 - Fair value changes arising from ordinary shares in the Company issued as contingent consideration paid on acquisition of a subsidiary - - - Foreign currency translation differences of foreign operations - - - At 30 June 2014/1 July 2014 - Fair value loss on available-for-sale financialassets - - - Foreign currency translation differences of foreign operations - - 3,956 - 3,956

At 30 June 2015 590

i) Thebusinesscombinationdeficitrepresentstheexcessofthepurchaseconsiderationpaidbythe Company, the legal acquirer, over the net assets of AIC, the accounting acquirer in 2012.

ii) The fair value adjustment reserve represents the difference between the fair value and the issue price of the ordinary shares in the Company issued:

(a) as consideration for the acquisition of the business and undertakings, including all the assets and liabilities of AutoV and Jotech in 2012; and

(b) on conversion of the ASSB RCPS in 2014 as mentioned in Note 17.1.

iii) The foreign currency translation reserve comprises all foreign currency differences arising from the translationofthefinancialstatementsoftheGroupentitieswithfunctionalcurrenciesotherthan RM.

iv) Theavailableforsalefinancialassetsreserveisattributabletofairvaluechangesoftheavailable forsalefinancialassetsofasubsidiaryacquiredduringtheyear.

(157,064) (40,155) (678) (197,897)

(4,324) (4,324) (2,688) (2,688) (157,064) (44,479) (3,366) (204,909)

(10) (10)

(157,064) (44,479) (10) (200,963)


18. loan and borrowings


non-current Term loans 18.1 15,876 21,570 - - Finance lease liabilities 18.3 773 1,275 - - 16,649 22,845 - -

current Term loans 18.1 6,786 9,183 - - Tradefinancing 18.2 18,296 12,462 - - Murabahahcapitalfinancing 18.4 249 486 - - Finance lease liabilities 18.3 1,187 1,150 - - Bank overdrafts 18.5 4,261 9,896 - - 30,779 33,177 - - total borrowings 47,428 56,022 - -

18.1 term loans

The term loans are secured by either single security or combination of securities, comprising freehold andleaseholdland,buildings,plantandequipment,biologicalassets,inventories,fixedandfloating charges on certain assets as well as corporate guarantees from certain Group entities as disclosed in Notes 3, 4 and 13. 18.2 Tradefinancing

Thetradefinancingaresecuredbyeithersinglesecurityorcombinationofsecurities,comprisingfixed andfloatingchargesonassetsaswellascorporateguaranteesfromtheGroupentities.

18.3 finance lease liabilities

Finance lease liabilities of the Group are repayable as follows:

present present Future valueof Future valueof minimum minimum minimum minimum lease lease lease lease payments interest payments payments interest payments group 2015 2015 2015 2014 2014 2014 rm’000 rm’000 rm’000 rm’000 rm’000 rm’000

Less than one year 1,276 89 1,187 1,216 66 1,150 Betweenoneandfiveyears 962 189 773 1,333 58 1,275

2,238 278 1,960 2,549 124 2,425



18. loan and borrowings (cont’d)

18.4 Murabahahcapitalfinancing

Theborrowingsaresecuredbyfixedandfloatingchargesonassetsaswellascorporateguarantees from a Group entity.

18.5 Bankoverdrafts

The bank overdrafts are secured by deposits placed with licensed banks (as disclosed in Note 15) as well as corporate guarantees from certain Group entities.

These borrowings are subject to repayment terms and interest rates as disclosed in Note 30.5.

19. government grants

group 2015 2014 rm’000 rm’000

At beginning of year 10 28 Amortised during the year (5) (18)

At end of year 5 10

A government grant was received by a subsidiary from Small and Medium Industries Development Corporation to improve and upgrade its production capacity. The government grant is being amortised on asystematicbasisovertheusefullifeoftheassetsof5yearsandrecognisedasotherincomeinprofitorloss. Therearenootherunfulfilledconditionsorcontingenciesattachedtothegrant.

Duringtheyear,RM5,000(2014:RM18,000)hasbeenamortisedandrecognisedasotherincomeinprofitor loss.

20. provisions

group 2015 2014 rm’000 rm’000

Provisionforwarranties At beginning of year 1,746 1,824 Provisions made during the year 472 2,805 Provisions used during the year (814) (2,883)

At end of year 1,404 1,746

Theprovisionforwarrantiesrelatestofinishedgoodssoldduringtheyear.Theprovisionisbasedonestimates made from historical warranty data associated with similar products and services. The Group expects to incurtheliabilityoverthenext2to3financialyears.


21. trade and other payables


Trade Trade payables 21.1 42,841 39,735 - -

Non-trade Accrued expenses 9,351 10,823 393 333 Employeebenefitsliabilities 21.2 2,176 1,550 - - Other payables 21.3 8,746 8,187 415 359 Amount due to subsidiaries 21.4 - - 25,373 5,342 Amount due to directors 178 8 - -

20,451 20,568 26,181 6,034 63,292 60,303 26,181 6,034

21.1 Tradepayables

Included in trade payables of the Group:

a) is an amount of RM244,000 (2014: RM241,000) due to a company in which a director has interests. The trade payable is subject to normal trade terms;

b) is an amount of RM11,000 (2014: RM1,053,000) due to the shareholder of a joint venture. The trade payable is subject to normal trade terms; and

c) is an amount of RM29,000 (2014: RM185,000) due to the non-controlling interest of a subsidiary. The trade payable is subject to normal trade terms.

21.2 Employeebenefitsliabilities

AGroupentitymakescontributionstoanon-contributoryunfundeddefinedbenefitplanthatprovides pension for its employees upon retirement. Under the plan, eligible employees are entitled to retirement benefits,dependingontheemployees’lastdrawnsalaryforeachcompletedyearofserviceupon the retirement age.

ThedefinedbenefitplanexposestheGrouptoactuarialrisks,suchaslongevityrisk,currencyriskand interest rate risk.

Funding

Theplanwill be fully fundedby theGroupentitywhichoffers suchbenefits to its employees. The funding requirements are based on the pension fund’s actuarial measurement framework set out in the funding policies of the plan and supported by a separate actuarial valuation for which the assumptions may differ from the assumptions used in determining the defined benefits liabilities. Employees are not required to contribute to the plan.



21. trade and other payables (cont’d)

21.2 Employeebenefitsliabilities(cont’d)

Movementinnetdefinedbenefitliabilities

Thefollowingtableshowsareconciliationfrombeginningofyeartotheendofyearfornetdefined benefitliabilitiesanditscomponents.

group 2015 2014 rm’000 rm’000

Balance at beginning of year 1,550 1,328

Includedinprofitorloss Current service cost 412 304 Past service credit 6 19 Interest cost 159 121 Benefitpayment (30) (4) Effect of movements in exchange rate 79 (218) Balance at end of year 2,176 1,550

actuarial assumptions

Principal actuarial assumptions at the end of the reporting period (expressed as weighted averages):

group 2015 2014

Discount rate 8.5% 8.7% Future salary growth 10.0% 10.0% Mortality rate 0.00064 0.00064 Disability rate 0.00006 0.00006

Sensitivityanalysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holdingotherassumptionsconstant,wouldhaveaffectedthedefinedbenefitobligation.However, theDirectorsareoftheviewthattheaboverisksarenotsignificant.

21.3 Otherpayables

Included in other payables of the Group:

a) is an amount of RM33,000 (2014: Nil) due to a company in which a person related to a director has interests. The amount is unsecured, interest free and repayable on demand; and

b) is an amount of RM22,000 (2014: Nil) due to a company in which a director has interests. The amount is unsecured, interest free and repayable on demand.

In 2014, an amount of RM110,000 due to the non-controlling interest of a subsidiary has been included in other payables. The amount was unsecured, interest free and repayable on demand.

21.4 Amountduetosubsidiaries

The non-trade amount due to subsidiaries represents advances received which are unsecured, interest free and repayable on demand.


22. results from operating activities


Resultsfromoperatingactivitiesisarrivedat aftercharging: Amortisation of customer relationships 1,658 1,658 - - Amortisation of development costs 471 335 - - Amount owing by subsidiary written off - - 16 - Auditors’ remuneration: – Audit fees KPMG Malaysia – current year 593 495 80 80 – prior year (5) 37 - 35 Other auditors 105 105 - - – Non-audit fees KPMG Malaysia 91 50 75 30 Other auditors 1 - - - Depreciation of property, plant and equipment 17,138 24,487 19 7 Fair value loss on contingent consideration - - - 1,181 Fair value loss on other investments 81 26 - - Impairment loss on customer relationships 21,079 - - - Impairment loss on goodwill 22,000 18,430 - - Impairment loss on investments in subsidiaries - - 25,784 43,766 Impairment loss on trade and other receivables - 630 - - Impairment loss on property, plant and equipment 9,616 14,479 - - Inventories written off 2,804 1,530 - - Other receivables written off - - 24 - Personnel expenses (including key management personnel): – Contribution to Employees Provident Fund 3,286 4,505 167 148 – Wages, salaries and others 57,109 59,412 1,794 1,243 –Expensesrelatedtodefinedbenefitplans(net) 626 222 - - Property, plant and equipment written off 586 45 - - Provision for warranties 472 2,805 - - Rental expense in respect of: – Equipment 73 58 5 5 – Premises 3,822 1,595 1,520 1,504 Realised foreign exchange loss 1,652 2,362 - - Unrealised foreign exchange loss - 262 - -

andaftercrediting: Amortisation of government grants 5 18 - - Dividend income 6 7 450 - Fair value gain on contingent consideration - 482 - - Gain arising from fair value changes in biological assets - 1,308 - - Gain on bargain purchase 9,222 - - - Gain on disposal of property, plant and equipment 31 59 - - Inventories written back - 64 - - Management fees received - - 2,691 3,095 Rental income from property 12 12 1,720 1,000 Unrealised foreign exchange gain 2,973 - - - Reversal of impairment loss on trade and other receivables 486 - - -



23. finance income


Interest income on: – other investment of quoted fund in Malaysia 149 - - - – deposits and short term placement funds with licensedbanksandapprovedfinancialinstitutions 1,133 604 142 100

1,282 604 142 100

24. finance costs


Interest expense on: – Term loans 2,177 2,087 - - – Finance lease liabilities 95 143 - - –Tradefinancingfacilities 1,359 1,501 - - 3,631 3,731 - - Otherfinancecosts 876 172 852 1

4,507 3,903 852 1

25. tax expense

RecognisedinProfitorLoss


Taxexpense/(benefit)on – continuing operations 4,955 1,548 394 346 – discontinued operations 26 - - Tax on gain on sale of discontinued operations 26 448 - - -

Total tax expense 5,339 1,259 394 346

(64) (289)


25. tax expense (cont’d)

RecognisedinProfitorLoss(cont’d)


Deferredtaxexpense Origination and reversal of temporary differences 360 - - Over provision in prior year - - Effect of changes in tax rate - - - Crystallisation of deferred tax liabilities on revaluation surplus - - - Total deferred tax recognised in profitorloss - -

Total tax expense 5,339 1,259 394 346

Reconciliationoftaxexpense

Loss for the year Total tax expense 5,339 1,259 394 346

Loss excluding tax

Income tax calculated using tax rate of 25% Non-deductible expenses 15,933 9,561 7,334 11,983 Tax exempt income - - Effect of deferred tax assets not recognised 5,294 4,429 - - Recognition of previously unrecognised deferred tax assets - - - (Over)/Under provision in prior years 44 Crystallisation of deferred tax liability on revaluation surplus of property arising prior to MFRS adoption - - - Effect of lower tax rate on gain on disposal of discontinued operation - - - Effect of different tax rates in foreign jurisdictions - - -

5,339 1,259 394 346

(26) (319) (3,153) (26) (109)

(454) (2,819)

(45,802) (37,377) (27,878) (46,890)

(40,463) (36,118) (27,484) (46,544)

(10,116) (9,029) (6,871) (11,636)

(2,835) (113)

(522) (341) (3,702) (1)

(109)

(1,792)

(173)

current tax expense Malaysian – current year 4,729 4,049 350 347 – prior years 44 Overseas – current year 1,086 578 - -

Total current tax expense recognised inprofitorloss 5,793 4,078 394 346

(22) (549) (1)



26. discontinued operations

Duringthefinancialyear:

a) AIC had entered into a conditional sale and purchase agreement to dispose of its entire equity interest in AIC Properties Sdn Bhd (“AICP”) for a total cash consideration of RM20 million. The disposal was completedduringthefinancialyear.

b) Jotech had entered into a share sale agreement for the disposal of Jotech’s entire equity interest in Jotech Metal Fabrication Industries Sdn Bhd (“JMF”) for a total cash consideration of RM5.5 million. The disposalwascompletedduringthefinancialyear.

c) Jotech had decided to cease the operations of JKY. The cessation plan involves cessation of all business activities, disposal of all assets and settlement of all liabilities as disclosed in Note 16.

Consequently, the results of AICP, JMF and JKY were presented as discontinued operations in accordance to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations.

Loss attributable to the discontinued operations was as follows:

Resultsofdiscontinuedoperations

group note 2015 2014 rm’000 rm’000

Revenue 33,562 48,975 Expenses Resultsfromoperatingactivities Taxbenefit 25 64 289

Resultsfromoperatingactivities,netoftax Gain on sale of discontinued operations 8,733 - Tax on gain on sale of discontinued operations 25 -

Lossfortheyear Includedinresultsfromoperatingactivitiesare: Depreciation of property, plant and equipment Impairment loss on property, plant and equipment - Finance costs Finance income 28 136

The total comprehensive income from discontinued operations of RM3,096,000 (2014: total comprehensive expense of RM312,000) is attributable to the owners of the Company.

group 2015 2014 rm’000 rm’000

Cashflows(usedin)/fromdiscontinuedoperations Net cash used in operating activities Net cash generated from/(used in) investing activities 23,465 Netcashusedinfinancingactivities

Effectoncashflows 20,249

(44,696) (49,681) (11,134) (706)

(11,070) (417)

(448)

(2,785) (417) (2,127) (2,475) (8,692) (591) (630)

(1,910) (222) (57) (1,306) (1,359)

(1,638)


26. discontinued operations (cont’d)

EffectofthedisposalofAICPandJMFonthefinancialpositionoftheGroup

2015 rm’000

Investment property 11,045 Property, plant and equipment 13,426 Inventories 3,838 Trade and other receivables 7,238 Cash and cash equivalents 1,541 Current tax assets 67 Deferred tax liabilities Trade and other payables Loans and borrowings

Net assets 16,767 Gain on sale of discontinued operations 8,733

Cash consideration received 25,500 Tax on gain on sale of discontinued operations Cash and cash equivalents disposed of

Netcashinflow 23,511

Net gain on disposal of discontinued operations 8,285

JKY isclassifiedasdisposalgroupheldforsaleontheconsolidatedstatementoffinancialpositionofthe Group. The details are disclosed in Note 16.

27. Key management personnel compensations

The key management personnel compensations are as follows:


Directors: – Fees 126 151 126 151 – Remuneration 4,133 4,496 812 600 –Estimatedmonetaryvalueofbenefits-in-kind 11 11 - -

4,270 4,658 938 751 Other key management personnel: –Short-termemployeebenefits 5,750 5,007 550 382 –Estimatedmonetaryvalueofbenefits-in-kind 19 27 - - 5,769 5,034 550 382 10,039 9,692 1,488 1,133

(1,124) (15,007) (4,257)

(448) (1,541)



28. earnings per ordinary share – group

i) Basicearningsperordinaryshare

Thecalculationofbasicearningsperordinarysharewasbasedontheprofit/lossattributabletoowners of the Company and the weighted average number of ordinary shares outstanding, calculated as follows:

group 2015 2014 rm’000 rm’000

(Loss)/ProfitattributabletoownersoftheCompany Continuing operations Discontinued operations 1,704

‘000 ‘000 Weightedaveragenumberofordinaryshares Issued ordinary shares at beginning of year 5,381,738 5,273,646 Issued during the year - 60,413

At end of year 5,381,738 5,334,059 sen sen Basic(loss)/earningsperordinaryshare Continuing operations Discontinued operations 0.032

ii) Dilutedearningsperordinaryshare

Diluted earnings per ordinary share is not applicable as there were no dilutive instruments as at year end.

(43,001) (36,905) (281) (41,297) (37,186)

(0.799) (0.692) (0.005) (0.767) (0.697)


29. operating segments

The Group has four reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the strategic business units, the Group’s Executive Directors (the chief operating decision makers) review internal management reports at least on a monthly basis. The following summary describes the operations in each of the Group’s reportable segments:

• IMS Includes automotive components design and manufacturing, precision machining, stamping and tooling and semiconductor divisions • Resources Includes oil palm plantation and coal mining divisions • Energy Includes oil and gas exploration and production and services • Investment holding Includes investments in subsidiaries and property investment

The accounting policies on the determination of the reportable segments are as described in Note 2(v).

Performanceismeasuredprimarilyonsegmentprofitbeforetax(“segmentprofit”)asincludedintheinternal managementreportsthatarereviewedbytheGroup’sExecutiveDirectors.SegmentProfitisusedtomeasure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

segment assets

Segment assets are measured based on all assets (excluding goodwill) of a segment, as included in the internal management reports that are reviewed by the Group’s Executive Directors. Segment assets are used to measure the return of assets of each segment.

segment liabilities

Segment liabilities are measured based on all liabilities of a segment, as included in the internal management reports that are reviewed by the Group’s Executive Directors. Segment liabilities are used to measure the gearing of each segment.

Segmentcapitalexpenditure Segmentcapitalexpenditureisthetotalcostincurredduringthefinancialyeartoacquireproperty,plant and equipment and intangible assets other than goodwill.



29.

ope

rati

ng

seg

men

ts (

co

nt’

d)

2015

SegmentProfit/(Loss)

-

Inc

om

e/(

Exp

en

se)

inc

lud

ed

in t

he

measureofSegment(Loss)/Profit

a

re:

Re

ven

ue

fro

m e

xte

rna

l cu

sto

me

rs

326,

132

6,56

8 12

21

8 -

332,

930

33,5

62

- 29

9,36

8In

ter-

seg

me

nt

reve

nu

e

- -

- 4,

411

- 4,

411

- -

4,41

1D

ep

rec

iatio

n a

nd

am

ort

isatio

n

-

-

Fair

valu

e lo

ss o

n o

the

r in

vest

me

nts

-

- -

-

-

-Fi

na

nc

e c

ost

s

-

10

1

-

Fin

an

ce

inc

om

e

643

- 35

4 41

4

1,31

0 28

-

1,28

2Im

pa

irme

nt

loss

on

pro

pe

rty,

p

lan

t a

nd

eq

uip

me

nt

-

- -

-

-

Inve

nto

ries

writ

ten

off

- -

- -

-

-R

eve

rsa

l of i

mp

airm

en

t

loss

on

tra

de

an

d o

the

r

rec

eiv

ab

les

(ne

t)

486

- -

- -

486

- -

486

Investmen

tCon

solidation

Investmen

tCon

tinuing

IMS

Resource

sEnergy

ho

lding

adjustmen

ts

Total

IMS

holding

operations

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

Discon

tinue

dop

erations

(8,6

55)

(86)

(3

,344

) (1

,592

)

(13,

677)

(1

1,11

7)

(17)

(2

,543

)

(16,

834)

(4

50)

(149

) (1

76)

(1

7,60

9)

(2,1

27)

(1

5,48

2)

(81)

(81)

(81)

(2,9

27)

(1,2

70)

(1

,002

)

(5,0

98)

(591

)

(4,5

07)

(101

)

(9

,616

)

(9

,616

) (8

,692

) (9

24)

(2,8

04)

(2,8

04)

(2,8

04)


29.

ope

rati

ng

seg

men

ts (

co

nt’

d)

2014

SegmentProfit/(Loss)

1,

871

-

-

Inc

om

e/(

Exp

en

se)in

clu

de

d

in

th

e m

ea

sure

of S

eg

me

nt

(Loss)/Profitare:

Re

ven

ue

fro

m e

xte

rna

l cu

sto

me

rs

360,

545

7,38

6 -

7 -

367,

938

48,9

75

- 31

8,96

3In

ter-

seg

me

nt

reve

nu

e

3,05

5 -

- 13

,095

-

16,1

50

- -

16,1

50D

ep

rec

iatio

n a

nd

am

ort

isatio

n

-

-

-

Fair

valu

e g

ain

on

bio

log

ica

l ass

ets

-

1,30

8 -

- -

1,30

8 -

-.5

21,

308

Fair

valu

e g

ain

on

co

ntin

ge

nt

c

on

side

ratio

n

- -

- 48

2 -

482

- -

.521

.48

2Fa

ir va

lue

loss

on

oth

er i

nve

stm

en

ts

- -

-

-

- -

.521

.521

.Fi

na

nc

e c

ost

s

-

-

-Fi

na

nc

e in

co

me

23

8 -

- 50

2 -

740

136

-60

4Im

pa

irme

nt

loss

on

pro

pe

rty,

p

lan

t a

nd

eq

uip

me

nt

-

- -

-

- -

Imp

airm

en

t lo

ss o

n t

rad

e

a

nd

oth

er r

ec

eiv

ab

les

(ne

t)

-

- -

-

- -

.521

.521

.In

ven

torie

s w

ritte

n o

ff

-

- -

-

- -

Investmen

tCon

solidation

Investmen

tCon

tinuing

IMS

Resource

sEnergy

ho

lding

adjustmen

ts

Total

IMS

holding

operations

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

Discon

tinue

dop

erations

(16,

564)

(1

,344

)

(16,

037)

(6

88)

(18)

(1

5,33

1)

(24,

309)

(3

49)

(1

64)

(2

4,82

2)

(2,4

75)

(2

2,34

7)

(2

6)

(2

6)

.5

21.

(26)

(2,9

40)

(1,2

35)

(3

58)

(4

,533

) (6

30)

(3

,903

)

(14,

479)

(1

4,47

9)

(14,

479)

(630

)

(6

30)

.5

21(6

30)

(1,5

30)

(1,5

30)

(1,5

30)



29.

ope

rati

ng

seg

men

ts (

co

nt’

d)

2015

seg

me

nt a

sse

ts

287,

397

76,3

24

115,

372

60,2

95

539,

388

18,5

26

- 52

0,86

2

Inc

lud

ed

in t

he

me

asu

re o

f se

gm

en

t

ass

ets

are

: A

dd

itio

ns

to n

on

-cu

rre

nt

ass

ets

oth

er t

ha

n

financialinstrumentsanddeferred

ta

x a

sse

ts

7,15

9 19

3 6,

925

4 14

,281

75

-

14,2

06

se

gm

ent

lia

bili

ties

104,

384

26,2

13

46,8

66

14,8

24

192,

287

6,78

2 -

185,

505

2014

seg

me

nt a

sse

ts

340,

606

76,3

50

- 56

,965

47

3,92

1 -

- 47

3,92

1

Inc

lud

ed

in t

he

me

asu

re o

f se

gm

en

t

ass

ets

are

:A

dd

itio

ns

to n

on

-cu

rre

nt

ass

ets

oth

er t

ha

n

financialinstrumentsanddeferred

ta

x a

sse

ts

10,6

47

571

- 44

11

,262

-

- 11

,262

seg

me

nt li

ab

ilitie

s 13

6,95

3 26

,885

-

25,8

12

189,

650

- -

189,

650

inve

stm

ent

inve

stm

ent

con

tinui

ng

IMS

Resource

sEnergy

ho

lding

Total

IMS

holding

operations

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

rm

’000

Discon

tinue

dop

erations


29. operating segments (cont’d)

Reconciliationofsegmentprofit,segmentassetsandliabilities

Reconciliationtoconsolidatedlossbeforetax

group 2015 2014 rm’000 rm’000

Total segment loss Less: Discontinued operations 11,134 706 Unallocated income/(expenses): Amortisation of customer relationships Gain on bargain purchase 9,222 - Impairment loss on customer relationships - Impairment loss on goodwill Eliminationofinter-segmentprofits 7 Consolidated loss before tax

Reconciliationtoconsolidatedtotalassets

group 2015 2014 rm’000 rm’000

Total segment assets 539,388 473,921 Customer relationships 7,104 29,841 Goodwill on consolidation 34,165 55,913 Consolidation adjustments (59,124) (59,569)

Consolidated total assets 521,533 500,106

Reconciliationtoconsolidatedtotalliabilities

group 2015 2014 rm’000 rm’000

Total segment liabilities 192,287 189,650 Consolidation adjustments (59,124) (59,569)

Consolidated total liabilities 133,163 130,081

Geographicalsegments

The Group’s Executive Directors (the Chief Operating Decision Makers) review and monitor the performance andfinancial informationof thecontinuingoperationsbygeographical segmentsat leastonamonthly basis. There were no geographical information provided to the Chief Operating Decision Makers in relation to the discontinued operations.

In presenting information on the basis of geographical segments, segment revenue is based on geographical location of customers. Segment assets are based on the geographical location of the assets. The amounts ofnon-currentassetsdonotincludefinancialinstruments,investmentinassociateanddeferredtaxassets.

(13,677) (16,037)

(1,658) (1,658)

(21,079) (22,000) (18,430) (4) (38,062) (35,412)



29. operating segments (cont’d)

Geographicalsegments(cont’d)

Thegeographical information in regards to revenue, non-currentassets (excluding financial instruments, investment in an associate and deferred tax assets) and trade receivables of the Group can be shown as follows:

Malaysia 199,164 195,106 50,948 Australia 1,724 - 211 United Kingdom 6,853 - 629 Singapore 10,761 - 1,855 Taiwan 14,484 - 2,863 United States of America 11,701 - 2,016 Indonesia 47,033 106,327 4,698 The People’s Republic of China 2,767 29 390 Other countries 4,881 - 672

299,368 301,462 64,282

2014

Malaysia 208,157 273,078 45,433 United Kingdom 5,091 - 421 Singapore 10,708 - 2,281 Taiwan 23,926 - 6,207 United States of America 11,784 - 1,147 Indonesia 50,709 20,462 6,353 The People’s Republic of China 1,626 21,641 2,126 Other countries 6,962 - 1,999

318,963 315,181 65,967

Non-current Trade revenue assets receivables 2015 rm’000 rm’000 rm’000

segmentIMS 1 78,657 1 89,577

Numberof Numberof customers rm’000 customers rm’000

2015 2014

Majorcustomers

The following are major customers with revenue equal or more than 10% of the Group’s total revenue:


30. financial instruments

30.1 Categoriesoffinancialinstruments

Thetablebelowprovidesananalysisoffinancialinstrumentscategorisedasfollows:

(a) Loans and receivables (“L&R”); (b) Fairvaluethroughprofitorloss(“FVTPL”): – Heldfortrading(“HFT”),or – Designated upon initial recognition (“DUIR”); (c) Available-for-sale (“AFS”); and (d) Finance liabilities measured at amortised cost (“FL”).

carrying l&r/ fvtpl- fvtpl- amount (fl) hft afs duir 2015 rm’000 rm’000 rm’000 rm’000 rm’000

financial assets group Other investments 1,924 - 300 22 1,602 Trade and other receivables 76,483 76,483 - - - Cash and cash equivalents 59,192 59,192 - - -

137,599 135,675 300 22 1,602 company Trade and other receivables 41,023 41,023 - - - Cash and cash equivalents 7,333 7,333 - - -

48,356 48,356 - - - financial liabilities group Loans and borrowings - - - Trade and other payables - - -

- - - company Trade and other payables - - -

(47,428) (47,428) (61,116) (61,116)

(108,544) (108,544)

(26,181) (26,181)



30. financial instruments (cont’d)

30.1 Categoriesoffinancialinstruments(cont’d)

carrying l&r/ fvtpl- fvtpl- amount (fl) hft afs duir 2014 rm’000 rm’000 rm’000 rm’000 rm’000

financial assets group Other investments 1,834 - 381 - 1,453 Trade and other receivables 74,587 74,587 - - - Cash and cash equivalents 43,204 43,204 - - -

119,625 117,791 381 - 1,453

company Trade and other receivables 4,026 4,026 - - - Cash and cash equivalents 400 400 - - -

4,426 4,426 - - - financial liabilities group Loans and borrowings - - - Trade and other payables - - -

- - -

company Trade and other payables - - -


Net (losses)/gain on: Fairvaluethroughprofitorloss: –HFT - - Available-for-salefinancialassets - - - Loans and receivables 3,095 142 100 Financial liabilities measured at amortised cost 99

30.2 Netgainsandlossesarisingfromfinancialinstruments

(56,022) (56,022) (58,753) (58,753)

(114,775) (114,775)

(6,034) (6,034)

(81) (26) (22) (2,507) (4,507) (4,533) (852) (1) (1,515) (7,066) (710)



30.3 financial risk management

TheGrouphasexposuretothefollowingrisksfromitsuseoffinancialinstruments:

• Credit risk • Liquidity risk • Market risk

30.4 Creditrisk

CreditriskistheriskofafinanciallosstotheGroupifacustomerorcounterpartytoafinancialinstrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers. The Company’s exposure to credit risk arises principally from advances to subsidiaries and the corporate guarantees given to banks for credit facilities granted to subsidiaries.

(a) Receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Normally, financial guarantees given by banks, shareholders or directors of customers are obtained, and credit evaluations are performed on customers requiring credit over a certain amount.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables isrepresentedbythecarryingamountsinthestatementoffinancialpositionandtheGrouphas nosignificantconcentrationofcreditrisk.

Management has taken reasonable steps to ensure that receivables that are neither past due norimpairedarestatedattheirrealisablevalues.Asignificantportionofthesereceivablesare regular customers that have been transacting with the Group. The Group uses ageing analysis tomonitorthecreditqualityofthereceivables.Anyreceivableshavingsignificantbalancespast due more than 120 days, which are deemed to have higher credit risk, are monitored individually.

The exposure of credit risk for trade receivables as at the end of the reporting period by geographic region is disclosed in Note 29.




30.4 Creditrisk(cont’d)

(a) Receivables(cont’d)

Impairment losses

The ageing of trade receivables of the Group as at the end of the reporting period was:

Individual Collective gross impairment impairment net group rm’000 rm’000 rm’000 rm’000

2015 Not past due 43,370 - - 43,370 Past due 1 – 30 days 10,520 - - 10,520 Past due 31 – 120 days 9,669 - - 9,669 Past due more than 120 days 4,062 (3,339) - 723

67,621 (3,339) - 64,282 2014 Not past due 51,358 - - 51,358 Past due 1 – 30 days 11,651 - - 11,651 Past due 31 – 120 days 3,335 (768) - 2,567 Past due more than 120 days 3,425 (3,034) - 391

69,769 (3,802) - 65,967

The movements in the allowance for impairment losses of trade receivables during the year were:

group 2015 2014 rm’000 rm’000

At beginning of year 3,802 2,077 Impairment loss recognised - 1,725 Impairment loss reversed (463) -

At end of year 3,339 3,802

The allowance account in respect of receivables is used to record impairment losses. Unless theGroupissatisfiedthatrecoveryoftheamountispossible,theamountconsideredirrecoverable is written off against the receivable directly.

(b) Investmentsandotherfinancialassets


Investments are allowed only in liquid securities and only with counterparties that have a credit ratingequaltoorbetterthantheGroup.Transactionsinvolvingderivativefinancialinstruments areenteredwithapprovedfinancialinstitutions.



30.4 Creditrisk(cont’d)

(b) Investmentsandotherfinancialassets(cont’d)


As at the end of the reporting period, the Group has only invested in listed securities and money market fund. The maximum exposure to credit risk is represented by the carrying amounts in the statementoffinancialposition.

In view of the sound credit rating of counterparties, management does not expect any counterparty to fail to meet its obligations.

Theinvestmentsandotherfinancialassetsareunsecured.

(c) Financialguarantees


The Company provides unsecured corporate guarantees to banks in respect of banking facilities granted to the subsidiaries and joint venture. The Company monitors on an ongoing basis the results of the subsidiaries and joint venture and repayments made by these entities.


As at 30 June 2015, the Company had executed corporate guarantees in favour of licensed financialinstitutionsuptoalimitofRM80.3million(2014:RM96.4million)forcreditfacilitiesgranted to subsidiaries. Out of the total banking facilities secured by corporate guarantees issued by the Company, a total of RM40.3 million (2014: RM45.4 million) was outstanding at end of reporting period.

The corporate guarantee of RM5.0 million (2014: RM5.0 million) from the Company to the joint venture, together with advances amounting to RM0.04 million (2014: RM0.9 million) as at 30 June 2015by theGroup to the joint venture, represents a formofprovisionof financial assistance by the Company. Out of the total banking facilities granted to the joint venture and secured by a corporate guarantee by the Company, a total of RM2.0 million (2014: RM2.8 million) was outstanding at the year end.

As at the end of reporting period, there was no indication that the subsidiaries and joint venture would default on the repayment of their outstanding credit facilities. The corporate guarantees have not been recognised since the fair value was not material.

30.5 Liquidityrisk

LiquidityriskistheriskthattheGroupwillnotbeabletomeetitsfinancialobligationsastheyfalldue. The Group’s exposure to liquidity risk arises principally from its various payables and borrowings.

Prudentliquidityriskmanagementimpliesmaintainingsufficientcashandcashequivalentsandthe availability of funding through an adequate amount of committed credit facilities. Due to the dynamic natureoftheunderlyingbusinesses,theGroupaimsatmaintainingflexibilityinfundingbymaintaining committed credit lines available. In addition, the objective for debt maturities monitoring is to ensure that the amount of debt maturing in any one year is not beyond the Group’s means to repay and/or refinance.



Carrying

Contractual

Contractual

Und

er1

1-2

2-5

Morethan

amounts

interestra

te

cashflows

year

years

years

5ye

ars

rm’0

00

%

rm’0

00

rm’0

00

rm’0

00

rm’0

00

rm’0

00

30.

fin

an

cia

l in

stru

men

ts (

co

nt’

d)

30.5Liquidityrisk(cont’d)

Ma

turit

y a

na

lysis

Thetablebelowsummarisesthem

aturityprofileoftheGroup’sfinancialliabilitiesasattheendofthereportingperiodbasedon

un

disc

ou

nte

d c

on

tra

ctu

al p

aym

en

ts:

g

roup

fi

nanc

ial l

iab

ilitie

s

2015

Non-derivativefinancialliabilities

Se

cu

red

te

rm lo

an

s

–fixedra

te

2,528

5.00

2,913

473

574

1,866

-

–floatingra

te

20,134

4.65–12.20

24,935

9,466

7,031

7,240

1,198

Tradefinancing

18,296

3.74–12.00

18,303

18,303

--

-

Murabahahcapita

lfinancing

249

5.01

252

252

--

-

Fin

an

ce

lea

se li

ab

ilitie

s 1,

960

2.38

- 6

.80

2,23

8 1,

276

962

- -

Ba

nk

ove

rdra

fts

4,26

1 7.

85 -

8.3

5 4,

261

4,26

1 -

- -

Tr

ad

e a

nd

oth

er p

aya

ble

s*

61,1

16

- 61

,116

61

,116

-

- -

108,

544

11

4,01

8 95

,147

8,

567

9,10

6 1,

198

*Thecontractualcashflowsoftradeandotherpaya

blesexcludederivatives,contingentconsid

erationpaya

bleandw

here

applicable,accrualsforinterestonborrowingshavebeenincludedinthecontractualc

ashflowsoftherespectivefinancial

liab

ilitie

s.

20

14

Non-derivativefinancialliabilities

Se

cu

red

te

rm lo

an

s

–floatingra

te

30,753

4.40–12.20

34,620

11,496

9,249

12,913

962

Tradefinancing

12,462

3.31–12.00

12,493

12,493

--

-

Murabahahcapita

lfinancing

486

5.01

492

492

--

-

Fin

an

ce

lea

se li

ab

ilitie

s 2,

425

2.00

– 6

.79

2,54

9 1,

216

1,13

2 20

1 -

Ba

nk

ove

rdra

fts

9,89

6 7.

85 –

8.3

5 9,

896

9,89

6 -

- -

Tr

ad

e a

nd

oth

er p

aya

ble

s*

58,7

53

- 58

,753

58

,753

-

- -

114,

775

11

8,80

3 94

,346

10

,381

13

,114

96

2



30.5 Liquidityrisk(cont’d)

Maturity analysis (cont’d)

ThetablebelowsummarisesthematurityprofileoftheCompany’sfinancialliabilitiesasattheendof the reporting period based on undiscounted contractual payments:

Carrying Contractual Contractual Under1 amount interestrate cashflows year company rm’000 % rm’000 rm’000

30.6 market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and otherpricesthatwillaffecttheGroup’sfinancialpositionorcashflows.

(a) Currencyrisk

The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily the United States Dollar (“USD”), Singapore Dollar (“SGD”), Euro (“EUR”), Japanese Yen (“JPY”) and Australian Dollar (“AUD”).


The Group maintains a natural hedge, whenever possible, by buying materials and selling its products and services in similar currencies other than its functional currency. In addition, the Group enters into foreign currency forward contracts in the normal course of business, where appropriate,tomanageitsexposureagainstforeigncurrencyfluctuationsonsalesandpurchases transactions denominated in foreign currencies.

The Group and the Company are also exposed to foreign currency risk in respect of their investment in foreign subsidiaries. The Group does not hedge this exposure by having foreign currency borrowings but keeps this policy under review and will take necessary action to minimise the exposure of this risk.

financial liabilities 2015 Non-derivativefinancialliabilities Other payables 26,181 - 26,181 26,181 Financial guarantees - - 40,300 40,300

26,181 66,481 66,481 2014 Non-derivativefinancialliabilities Other payables 6,034 - 6,034 6,034 Financial guarantees - - 45,400 45,400

6,034 51,434 51,434



Currency risk sensitivity analysis

Foreign currency risk arises from Group entities which have a RM functional currency. The exposure to currency risk of Group entities which do not have a RM functional currency is not material and hence, sensitivity analysis is not presented.

A 10% (2014: 10%) strengthening of RM against the following currencies at the end of the reporting periodwouldhaveincreased/(decreased)profitfortheyearbytheamountsshownbelow.This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecasted sales and purchases.

Assets/(Liabilities)denominatedin USD SGD EUR JPY AUD group rm’000 rm’000 rm’000 rm’000 rm’000

2015 Trade and other receivables 9,632 35 176 - 211 Cash and cash equivalents 5,002 - 1,048 383 - Secured bank loans - - - - - Trade and other payables - Net exposure 1,800 29 1,224 380 193

group 2015 2014 rm’000 rm’000

USD (135) (547) SGD (2) (39) EUR (92) - JPY (29) - AUD (14) (11)


30.6 Marketrisk(cont’d)

(a) Currencyrisk(cont’d)

Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than the functional currency of the Group entities) risk, based on carrying amounts as at the end of the reporting period was:

2014 Trade and other receivables 15,990 352 - - 428 Cash and cash equivalents 3,344 192 - - - Secured bank loans - - - - Trade and other payables - - Net exposure 7,291 523 - - 152

(12,834) (6) (3) (18)

(5,500) (6,543) (21) (276)




(a) Currencyrisk(cont’d)

Currency risk sensitivity analysis (cont’d)


Fixedrateinstruments Financial assets 6,716 13,886 - - Financial liabilities - - 1,979 10,975 - -

floating rate instruments Financial assets 28,870 9,877 3,327 3,391 Financial liabilities - - 3,327 3,391

(4,737) (2,911)

(42,691) (53,111) (13,821) (43,234)

A 10% (2014: 10%) weakening of RM against the above currencies at the end of the reporting period would have had equal but opposite effect on the above currencies to the amount shown above, on the basis that all other variables remain constant.

(b) Interestraterisk

TheGroup’s fixed rateborrowingsareexposed toa risk of change in their fair valuedue to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change incashflowsduetochangesininterestrates.

Investments inequity securitiesand short term receivablesandpayablesarenot significantly exposed to interest rate risk.


TheGroup’s income and operating cash flows are substantially independent of changes in market interest rates. Interest rate exposure arises from the Group’s borrowings and deposits, andismanagedthroughtheuseoffixedandfloatingrateborrowingsanddeposits.TheGroup doesnotusederivativefinancialinstrumentstohedgeitsinterestraterisk.

Exposure to interest rate risk

TheinterestrateprofileoftheGroup’sandtheCompany’ssignificantinterest-bearingfinancial instruments, based on carrying amounts as at the end of the reporting period was:





(b) Interestraterisk(cont’d)

Interest rate risk sensitivity analysis

Fairvaluesensitivityanalysisforfixedrateinstruments

TheGroupdoesnotaccountforanyfixedratefinancialassetsandliabilitiesatfairvaluethrough profitorloss.Therefore,achangeininterestratesattheendofthereportingperiodwouldnot affectprofitorloss.

Cashflowsensitivityanalysisforvariablerateinstruments

A change of 100 basis points (“bp”) in interest rates at the end of the reporting period would have increased/(decreased) profit for the year by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

2015 2014 100 bp 100 bp 100 bp 100 bp increase decrease increase decrease rm’000 rm’000 rm’000 rm’000 group Floating rate instruments 104 324

company Floating rate instruments 25 25

(c) Otherpricerisk

Equity price risk arises from the Group’s investments in equity securities.


Management of the Group monitors the equity investments on a portfolio basis. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the Directors of the Group entities.

Equity price risk sensitivity analysis

Investmentsinequitysecuritiesarenotsignificant,assuch,sensitivityanalysisisnotpresented.

30.7 Fairvalueoffinancialinstruments

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings approximate their fair values due to the relatively short term nature of these financialinstruments.

(104) (324)

(25) (25)


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18,296

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30.7 Fairvalueoffinancialinstruments(cont’d)

Policyontransferbetweenlevels

Thefairvalueofafinancialassetorliabilitytobetransferredbetweenlevelsisdeterminedasofthe date of the event or change in circumstances that caused the transfer.

Transfersbetweenlevel1andlevel2fairvalues

Therehasbeenno transferbetweenLevel 1and2 fair valuesduring thefinancial year (2014:no transfer in either direction).

Level1fairvalue

Level1fairvalueisderivedfromquotedprice(unadjusted)inactivemarketsforidenticalfinancial assets or liabilities that the entity can access at the measurement date.

Level2fairvalue

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observableforthefinancialassetsorliabilities,eitherdirectlyorindirectly. Level3fairvalue

Level3fairvalueisestimatedusingunobservableinputsforthefinancialassetsandliabilities.

Non-derivative Financial Liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of futureprincipalandinterestcashflows,discountedatthemarketrateofinterestattheendofthe reporting period. For other borrowings, the market rate of interest is determined by reference to similar borrowing arrangements.

The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the key unobservable inputs used in the valuation models.

Fairvalueoffinancialinstrumentsnotcarriedatfairvalue

Inter-relationship betweensignificant unobservableinputs and fair valuemeasurement

Significantunobservable

inputs

Description of valuationtechniqueandinputsusedtype

The estimated fair value would increase/ (decrease) if the interest rate were (lower)/higher.

• Discount rate (2015: 2.38 – 6.80%; 2014: 2.00 – 6.79%)

The fair values have been determined by discounting therelevantcashflowsusingcurrent interest rates for similar instruments at the end of the reporting period.

Long term borrowings withfixedinterest rates

Notsignificant.• Discount rate (2015: 3.74 – 12.20%; 2014: 3.31 – 12.20%)

The carrying amounts approximate fair value as they are re-priced to market interest rates for liabilities with similarriskprofiles.

Long term borrowings with variable interest rates


group 2015 2014 rm’000 rm’000

Total loans and borrowings (Note 18) 47,428 56,022 Less: Cash and cash equivalents (Note 15) (59,192) (43,204)

Net (cash)/debt (11,764) 12,818 Total equity attributable to owners of the Company 311,399 348,750 Debt-to-equity ratio (times) N/A 0.04

31. capital management

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’sabilitytocontinueasagoingconcern,soastomaintaininvestor,creditorandmarketconfidence and to sustain future development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

The Group’s debt-to-equity ratios at 30 June 2015 and 30 June 2014 were as follows:

TherewerenochangesintheGroup’sapproachtocapitalmanagementduringthefinancialyear.

32. capital commitments


Capital expenditure commitments in respect of: – Property, plant and equipment: – Approved but not contracted for - 902 - - – Approved and contracted for 589 - - - 589 902 - - – Acquisition of shares: – Approved and contracted for 1,893 - - -

2,482 902 - -



The Company leases two factory facilities under operating leases. The leases typically run for a period of 10 years, with a remaining period of about 2 years at end of the reporting period and an option to renew the leaseafterthatdate.Leasepaymentsareincreasedevery3to4yearstoreflectmarketrentals.Noneof the leases includes contingent rentals.

34. related parties

34.1 Identityofrelatedparties

Forthepurposesofthesefinancialstatements,partiesareconsideredtoberelatedtotheGroupor the Company if the Group or the Company has the ability, directly or indirectly, to control the party or exercisesignificantinfluenceoverthepartyinmakingfinancialandoperatingdecisions,orviceversa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities.

Relatedpartiesalsoincludekeymanagementpersonneldefinedasthosepersonshavingauthority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Key management personnel include all the Directors of the Group and certain members of senior management of the Group.

33. operating leases

leases as lessee

Non-cancellable operating lease rentals are payable as follows:

GroupandCompany 2015 2014 rm’000 rm’000

Less than one year 1,520 1,520 Betweenoneandfiveyears 253 1,773 1,773 3,293


Advances received from directors 18,500 - - - - Advances received from a company in which a director has interests 11,142 - - - - Consultancy fees payable to a company in which a director has interests 144 - - Management fees payable to a company in which a director of a subsidiary has interests 204 - - - - Interest payable on advances due to directors 425 - - - - Interest payable on advances due to a company in which a director has interests 207 - - - - Sales to non-controlling interests of subsidiaries 1,353 - 1,353 - Sales to a company in which a person related to a director has interests 21 - 21 - Sales commission paid/payable to a company in which a person related to a director has interests 115 - - Sales to companies in which certain directors have interests 52 - 52 - Sales to joint venture partner of the joint venture - - - - Sales commission receivable from the joint venture partner of the joint venture - - - - Purchases from companies in which a director has interests 995 - - Purchases from non-controlling interest of a subsidiary 980 - - Purchases from the joint venture partner of the joint venture 56 - - Royalty fee payable to non-controlling interest of a subsidiary 133 - - - - Rental expense payable to a company in which a director has interests 64 - - - - Rental income receivable from a company in which a director of a subsidiary has interests - - - -

34. related parties (cont’d)

34.2 Relatedpartytransactions

The balanceswith related parties are disclosed in Notes 14 and 21. The significant related party transactions of the Group and of the Company, other than key management personnel compensations (see Note 27) are as follows:

gross allowance balance for Netbalance Impairment AmountDebit/(Credit) impairmentDebit/(Credit) loss transacted outstanding lossat outstanding recognised group fortheyear atyearend yearend atyearend fortheyear 2015 rm’000 rm’000 rm’000 rm’000 rm’000

(22) (22)

(7,767)

(33)

(33) (33) (259) (571) (74) (244) (244) (29) (29) (11) (11)

(12)




34.2 Relatedpartytransactions (cont’d)

Consultancy fees paid/payable to a company in which a person related to a Director of the Company has interests 48 - - - - Sales to non-controlling interests of subsidiaries 819 - 819 - Sales to a company in which a person related to a Director of the Company has interests 17 - 17 - Sales commission paid/payable to a company in which a person related to a Director of the Company has interests 110 - - - - Sales to companies in which certain directors have interests 137 - 137 - Sales commission receivable from the joint venture partner of the joint venture - - - - Purchases from companies in which a director of certain subsidiaries has interests 1,165 - - Purchases from non-controlling interest of a subsidiary 2,476 - - Purchases from the joint venture partner of the joint venture 57 - - Royalty fee payable to non-controlling interest of a subsidiary 230 - - Rental income receivable from a company in which a director of a subsidiary has interests - - - -

(7,816) (49) (407) (144) (241) (241) (185) (185) (1,053) (1,053) (110) (110) (12)

gross allowance balance for Netbalance Impairment AmountDebit/(Credit) impairmentDebit/(Credit) loss transacted outstanding lossat outstanding recognised group fortheyear atyearend yearend atyearend fortheyear 2014 rm’000 rm’000 rm’000 rm’000 rm’000


2015 Advances received from directors - - - - Advances received from a company in which a director has interests - - - - Interest payable on advances due to directors 425 - - - - Interest payable on advances due to a company in which a director has interests 207 - - - - Dividend received from a subsidiary - - - - Management fees received/ receivable from subsidiaries 387 - 387 - Rental received/receivable from subsidiaries 451 - 451 -


34.2 Relatedpartytransactions (cont’d)

All of the outstanding balances are expected to be settled in cash by the related parties. 35. acquisitions of subsidiaries

35.1 Acquisitionofasubsidiary–GER

Duringthefinancialyear,theCompanyhadacquiredtheentireequityinterest,comprising2ordinary shares of RM1 each in GER, a shelf company, for a cash consideration of RM2. The acquisition of GER has no material effect to the Group.

35.2 Acquisitionofsubsidiaries–NCEandNCES

During thefinancial year, theGroup subscribed fora60%equity interest,comprising300ordinary shares of USD1 each, in NCE and NCES for cash consideration of USD100,000 respectively. The acquisition of NCE and NCES have no material effect to the Group.

gross allowance balance for Netbalance Impairment AmountDebit/(Credit) impairmentDebit/(Credit) loss transacted outstanding lossat outstanding recognised fortheyear atyearend yearend atyearend fortheyear company rm’000 rm’000 rm’000 rm’000 rm’000

2014 Management fee received/ receivable from subsidiaries (3,095) 446 - 446 - Rental received/receivable from subsidiaries (1,000) 179 - 179 -

(18,500)

(11,142)

(450)

(2,691) (1,720)



35. acquisitions of subsidiaries (cont’d)

35.2 Acquisitionofsubsidiaries–NCEandNCES(cont’d)

The following summarises the consideration transferred and the recognised amounts of assets acquired and liabilities assumed of NCE and NCES at the acquisition date:

group 2015 rm’000

Fairvalueofconsiderationtransferred Cash and cash equivalents 639 Identifiableassetsacquiredandliabilitiesassumed Cash and cash equivalents 639 Receivables 6

Totalidentifiablenetassets 645 Shareoftotalnetidentifiableassetsacquired 387 Netcashflowarisingfromacquisitionofsubsidiaries Purchase consideration settled in cash and cash equivalents (639) Cash and cash equivalents acquired 639 -

Goodwill

Goodwill recognised as a result of the acquisition was as follows:

group 2015 rm’000

Total consideration transferred 639 Fairvalueofidentifiablenetassets (645) Non-controlling interests, based on their proportionate interest in the recognised amounts of the asset and liabilities of the acquiree 258 Goodwill 252

The goodwill arising on acquisition of NCE and NCES is attributable mainly to the skills and technical talent of the key personnel of NCE and NCES. None of the goodwill recognised is expected to be deductible for income tax purposes.



35.3 Acquisitionofasubsidiary–NGY

Duringthefinancialyear,theGroupsubscribedfora44.4%effectiveinterestinNGYforatotalcash consideration of RM36,366,000 via NCE and GER. In the six months to 30 June 2015, the subsidiary did not generate any revenue and contributed a net loss (before allocation to non-controlling interests) of RM3,465,000. If the acquisition had occurred on 1 July 2014, management estimates that consolidatedrevenueandnetlosswouldhavebeenthesameforthefinancialyear.Indetermining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 July 2014.

The following summarises the consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the acquisition date:

group 2015 rm’000

Fairvalueofconsiderationtransferred Cash and cash equivalents 36,366

Identifiableassetsacquiredandliabilitiesassumed Property, plant and equipment 778 Available-for-salefinancialassets 42 Exploration and evaluation assets 78,571 Receivables, deposits and prepayments 3,751 Cash and cash equivalents 29,765 Deferred tax liabilities Other payables Non-controlling interests Totalidentifiablenetassets 102,805 Shareoftotalnetidentifiableassetsacquired 45,588

Netcashoutflowarisingfromacquisitionofsubsidiary Purchase consideration settled in cash and cash equivalents Cash and cash equivalents acquired 29,765

Gainonbargainpurchase

Gain on bargain purchase recognised as a result of the acquisition was as follows:

group 2015 rm’000

Total consideration transferred 36,366 Fairvalueofidentifiablenetassets Non-controlling interests, based on their proportionate interest in the recognised amounts of the asset and liabilities of the acquiree 57,217 Gain on bargain purchase

(6,301) (2,988) (813)

(36,366)

(6,601)

(102,805)

(9,222)




35.3 Acquisitionofasubsidiary–NGY(cont’d)

Gainonbargainpurchase(cont’d)

The gain on bargain purchase was included as part of other operating income in the Group’s consolidatedstatementofprofitorlossandothercomprehensiveincomefortheyear.Thegainon bargain purchase was mainly attributable to subscription of the listed shares in NGY being made based on its quoted price which was lower than NGY’s net assets per share on the date of acquisition. The subscription/quoted price was lower than the net assets per share mainly due to the perceived high inherent risks involved in an oil and gas exploration and production company which has not commenced commercial production.

Acquisition-relatedcosts

The Group incurred acquisition-related costs of RM941,000 related mainly to external legal fees and due diligence costs. The legal fees and due diligence costs have been included in administrative expensesintheGroup’sconsolidatedstatementofprofitorlossandothercomprehensiveincome.

35.4 Acquisitionofasubsidiary–StarMineGlobalLtd

Duringthefinancialyear,theGroupacquiredtheentireequityinterest,comprising100sharesofUSD1 each, in Star Mine Global Ltd, a shelf company incorporated in the British Virgin Islands for a cash consideration of USD100. The acquisition of Star Mine Global Ltd has no material effect to the Group.

36. significant events during the year

i) Duringthefinancialyear,theGrouphadacquiredtheentireequityinterestinGER,ashelfcompany, for a cash consideration of RM2 (see Note 35.1).

ii) Duringthefinancialyear,theGroupsubscribedtoa60%equity interest inbothNCEandNCESfor cash consideration of USD100,000 respectively (see Note 35.2).

iii) Duringthefinancialyear, theCompanyentered intoaconditionalsaleandpurchaseagreement (“SPA”) to acquire 250 ordinary shares of RM1.00 each in Empangan Sejati Sdn Bhd (“ESSB”), for a cash considerationofRM1,434,000.Duringthefinancialyear,theCompanyhasalsoenteredintoashares subscription agreement (“SSA”) with ESSB to subscribe for additional 240 ordinary shares of RM1.00 each in ESSB, for a cash consideration of RM1,310,000. The SPA and SSA are pending completion as at the date of this report.

iv) Duringthefinancialyear,theGroupsubscribedfora44.4%effectiveinterestinNGYforatotalcash consideration of RM36,366,000 (see Note 35.3).

v) Duringthefinancialyear,AIChadenteredintoaconditionalsaleandpurchaseagreementforthe disposal of its entire equity interests in AICP, for a cash consideration of RM20,000,000 (see Note 26).

vi) Duringthefinancialyear,Jotechhadenteredintoasharesaleagreementforthedisposalofitsentire equity interests in JMF for a cash consideration of RM5,500,000 (see Note 26).

vii) Duringthefinancialyear,NGYhadenteredintoaconditionalsharepurchaseagreementtoacquire the entire equity interest in Dart Energy (Indonesia) Holdings Pte Ltd for a cash consideration of USD1,000,000. This proposed acquisition is pending completion as at the date of this report.

viii) Duringthefinancialyear,theGrouphaddecidedtoceasetheoperationsofJKY(seeNote16).


37. supplementary financial information on the breaKdown of realised and unrealised profits or losses The breakdown of the accumulated losses of the Group and of the Company as at 30 June 2015, into realised and unrealised losses, pursuant to Paragraph 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements are as follows:

The determination of realised and unrealised losses is based on the Guidance on Special Matter No.1, DeterminationofRealisedandUnrealisedProfitsor Losses in theContextofDisclosurePursuant toBursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.


Total accumulated losses of the Company and its subsidiaries: – Realised – Unrealised - -

The share of accumulated losses from joint venture: – Realised - - The share of accumulated losses from associate: – Realised - - Less: Consolidation adjustments 133,793 152,662 - -

Total accumulated losses

(260,453) (235,233) (212,722) (184,844) (8,616) (11,495)

(269,069) (246,728) (212,722) (184,844)

(1,763) (1,763)

(287) (200)

(137,326) (96,029) (212,722) (184,844)



IntheopinionoftheDirectors,thefinancialstatementssetoutonpages48to142aredrawnupinaccordancewith Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements oftheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasof30June2015andoftheirfinancialperformanceandcashflowsfortheyearthenended.

In the opinion of theDirectors, the information set out inNote 37 onpage 143 to the financial statementshas been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and UnrealisedProfitsandLosses intheContextofDisclosuresPursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

DatukSeriPanglima(Dr.)GohTianChuan,JP

ooi boon pin

Shah Alam,Date: 23 October 2015

I, ChenHengMun, theDirector primarily responsible for the financialmanagement ofglobaltec formation Berhad,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages48to143are,tothebest 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 above named in Kuala Lumpur on 23 October 2015.

ChenHengMun

Before me:

ShafieB.DaudCommissioner for Oaths (W350)

Pursuant to Section 169(15) of the Companies Act, 1965

statutory declarationPursuant to Section 169(16) of the Companies Act, 1965

statement by directors

145notes to the financial statements (cont’d)independent auditors’ report

report on the financial statements

WehaveauditedthefinancialstatementsofGlobaltecFormationBerhad,whichcomprisethestatementsoffinancialpositionasat30June2015oftheGroupandoftheCompany,andthestatementsofprofitorlossandothercomprehensive income,changes inequityandcashflowsof theGroupandof theCompany for theyearthenended,andnotes,comprisingasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation, as set out on pages 48 to 142.

Directors’ Responsibility for the Financial Statements

TheDirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementssoastogiveatrueand fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for suchinternalcontrolastheDirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsthat are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit 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 financialstatementsarefreefrommaterialmisstatement.

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 therisksofmaterialmisstatementof thefinancial statements,whetherdueto fraudorerror. Inmaking those riskassessments,weconsiderinternalcontrolrelevanttotheentity’spreparationoffinancialstatementsthatgivea 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 madebytheDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinion.

Opinion

Inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasof30June2015andoftheirfinancialperformanceandcashflowsfortheyearthenendedinaccordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

To the members of Globaltec Formation Berhad


146 notes to the financial statements (cont’d)independent auditors’ report (cont’d)

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 actedasauditors,whichareindicatedinNote8tothefinancialstatements.

c) Weare satisfied that theaccountsof the subsidiaries thathavebeenconsolidatedwith theCompany’s financialstatementsareinformandcontentappropriateandproperforthepurposesofthepreparationof the financial statements of theGroupandwe 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

Ourauditwasmadeforthepurposeofforminganopiniononthefinancialstatementstakenasawhole.TheinformationsetoutinNote37onpage143tothefinancialstatementshasbeencompiledbytheCompanyas required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No.1, DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosuresPursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

other matters

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

Kpmg tai yoon fooFirm Number: AF 0758 Approval Number: 2948/05/16(J)Chartered Accountants Chartered Accountant

Petaling Jaya,

Date: 23 October 2015

To the members of Globaltec Formation Berhad

147Required Under The Listing Requirements of Bursa Malaysia Securities Berhad

other information

Share Buyback

There were no share buyback transactions entered into by the Company during the financial year.

options or Convertible Securities

The Company has not granted any options nor issued any convertible securities in the Company as at 30 June 2015.

There were no securities convertible into shares of the Company that were exercised during the financial year.

Depository receipt (“Dr”) programme

During the financial year, the Company did not sponsor any DR programme.

imposition of Sanctions and Penalties

There were no material sanctions or penalties imposed on the Company and its subsidiaries (“Group”), Directors or management by the relevant regulatory bodies during the financial year.

non-audit fees

Non-audit fees paid/payable to the external auditors by the Group and by the Company for the financial year amounted to RM92,000 and RM75,000 respectively.

Variation in Results from Profit Estimates, Forecasts or Projections, or Unaudited Results Announced

There were no variances of 10% or more between the results for the financial year and the unaudited results previously announced.

There were no profit forecasts or projections issued by the Group during the financial year.

Profit Guarantee

There were no profit guarantees given or received by the Group during the financial year.

Utilisation of Proceeds from Proposals

There were no proposals for the raising of funds during the financial year.

material Contracts

There were no material contracts entered into by the Group involving Directors and substantial shareholders either subsisting at the end of the financial year ended 30 June 2015 or entered into since the end of the previous financial year.

GlobAltEc FoRmAtion bERhAd (953031-A) • annual report 2015

148Required Under The Listing Requirements of Bursa Malaysia Securities Berhad

other information (Cont’D)

Related Party Relationship with the Group

Atmel Corporation Holds 6.1% ordinary equity interest and 19.9% of the convertible redeemable preference shares (“Atmel”) in AIC Semiconductor Sdn Bhd (“AICS”), a subsidiary of the Group

Mando Corporation Mando has a 30% equity interest in AutoV Mando Sdn Bhd (“AVMSB”), a subsidiary of the (“Mando”) Group

Details of the recurrent related party transactions of a revenue or trading nature and in the normal course of business of the Group, pursuant to the aforesaid shareholders’ mandate, for the financial year ended 30 June 2015 are as follows: Vendor/ Purchaser/ Amount for the financial transaction Provider recipient year ended 30 June 2015 rm’000

Assembly and testing of integrated circuit chips AICS Atmel 3,986

Purchase of automotive parts Mando AVMSB 980

recurrent related Party transactions

The following information is provided in accordance with Paragraph 10.09(2)(b) and Paragraph 3.1.5 of Practice Note 12 of the listing requirements of Bursa Malaysia Securities Berhad.

On 15 December 2014, the Company obtained the approvals from its shareholders for a renewal of an existing mandate for its subsidiaries to enter into recurrent transactions in its ordinary course of business with related parties in order to comply with paragraph 10.09 of the Bursa Malaysia Securities Berhad’s Listing Requirements.

The relationship of the related parties with the Company and its subsidiaries pursuant to the aforesaid shareholders mandate are as follows:

149As at 12 October 2015

stAtistics on shAREholdinGs

AnAlysis by sizE oF holdinGs

list oF toP 30 holdERs

Size of Shareholdings no. of no. of holders % Shares %

1 – 99 453 3.406 20,884 0.000100 – 1,000 422 3.173 176,138 0.0031,001 – 10,000 1,708 12.843 10,894,905 0.20310,001 – 100,000 7,660 57.598 358,040,371 6.653100,001 – 263,682,311 * 3,051 22.942 3,431,327,428 63.759269,086,895 and above ** 5 0.038 1,581,278,185 29.382

total 13,299 100.000 5,381,737,911 100.000

% of issued no. name Shares held Capital

1. Kong Kok Keong 351,153,178 6.525

2. Lembaga Tabung Angkatan Tentera 335,541,500 6.235

3. Alliancegroup Nominees (Tempatan) Sdn Bhd 326,938,291 6.075

Pledged Securities Account for Goh Tian Chuan (8026702)

4. Darulnas (M) Sdn. Bhd. 298,000,000 5.537

5. AMSeC Nominees (Tempatan) Sdn Bhd 269,645,216 5.010

Pledged Securities Account for Goh Tian Chuan

6. HSBC Nominees (Asing) Sdn Bhd 210,465,976 3.911

Exempt an for BSi SA (BSi Bk SG-nr)

7. Maybank Nominees (Tempatan) Sdn Bhd 193,120,143 3.588


8. Kong Kok Keong 150,041,666 2.788

9. Goh Tian Chuan 125,800,600 2.338

10. Kong Kok Keong 114,554,833 2.129

* Less than 5% of issued shares** 5% and above of issued shares

Authorised Share Capital : RM1,000,000,000

Issued and Fully Paid-up Shares : RM538,173,791

Class of Shares : Ordinary shares of RM0.10 each

Voting Rights : One vote per ordinary share


150As at 12 October 2015

stAtistics on shAREholdinGs (cont’d)

list oF toP 30 holdERs (cont’d)

% of issued no. name Shares held Capital

11. Loke Mei Ping 89,953,000 1.671

12. CiMSeC Nominees (Tempatan) Sdn Bhd 77,116,396 1.433

CimB Bank for Jasen Vun Vui Fen (mQ0083)


Pledged Securities Account for Juddy Chu Yen Tien

14. Ooi Boon Pin 67,554,600 1.255


CimB Bank for Yong nam Yun (PB)

16. Malacca Equity Nominees (Tempatan) Sdn Bhd 58,290,385 1.083



CimB Bank for Goh Tian Chuan (mQ0008)

18. Hiew Yon Fo 52,500,000 0.976


Pledged Securities Account for Juddy Chu Yen Tien (8026715)


Pledged Securities Account for Liaw kit Siong

21. DB (Malaysia) Nominee (Asing) Sdn Bhd 45,368,900 0.843

Exempt an for Bank of Singapore Limited

22. AMSeC Nominees (Tempatan) Sdn Bhd 38,364,850 0.713



CimB Bank for Juddy Chu Yen Tien (mQ0109)



25. Malacca Equity Nominees (Tempatan) Sdn Bhd 34,576,933 0.643



Pledged Securities Account for Ang Hung Teck (8083175)


CimB Bank for Yong nam Yun (PBCL-OG0030)

28. Pang Kim Fan 30,000,000 0.557


Pledged Securities Account for Pang kim Fan (8051066)

30. Yong Nam Yun 25,520,799 0.474

total 3,337,015,269 62.006

151

sUbstAntiAl shAREholdERs’ shAREholdinGs As PER thE REGistER oF sUbstAntiAl shAREholdERs

diREctoRs’ shAREholdinGs As PER thE REGistER oF diREctoRs’ shAREholdinGs

Notes:(1) Deemed interest by virtue of his son’s interest.(2) Deemed interest by virtue of his shareholdings in Darulnas (m) Sdn Bhd.* negligible.

name Direct % indirect %

1. Datuk Seri Panglima (Dr.) Goh Tian Chuan, JP 1,050,033,251 19.51 10 *2. Kong Kok Keong 615,749,677 11.44 298,000,000 5.543. Lembaga Tabung Angkatan Tentera 335,541,500 6.23 - -4. Darulnas (M) Sdn Bhd 298,000,000 5.54 - -

no. of Shares no. of Shares

name Direct % indirect %

1. Datuk Seri Panglima (Dr.) Goh Tian Chuan, JP 1,050,033,251 19.51 10 * 2. Kong Kok Keong 615,749,677 11.44 387,953,000 7.213. Ooi Boon Pin 77,985,580 1.45 19,785,800 0.374. Chen Heng Mun 1,862,180 0.03 2,004,716 0.045. Ash’ari Bin Ayub - - - -6 Wong Zee Shin 19,327 * - -7. Mej Jen Dato’ Mohktar Bin Perman (RTD) - - - -8. Yong Nam Yun 118,520,799 2.20 - -

no. of Shares no. of Shares

(1)

(2)

(3)

Notes:

(1) Deemed interested pursuant to Section 6A of the Companies Act, 1965 by virtue his son’s interest.(2) Deemed interested pursuant to Section 134 of the Companies Act, 1965 by virtue of his spouse’s interest, and shareholdings in Darulnas (m) Sdn Bhd.(3) Deemed interested pursuant to Section 134 of the Companies Act, 1965 by virtue of his spouse’s interest.* negligible.

(1)

(2)

As at 12 October 2015

stAtistics on shAREholdinGs (cont’d)

(3)


152 PRoPERtiEs oF thE GRoUP

Kawasan Industri KIIC, Lot C-7CJln. TolJakarta-CikampekKM 47 Teluk JambeKarawang 41361Jawa Baratindonesia

2-storey office with single storey detached factory building/Manufacturing and fabrication of tools and dies and precision stamping parts for the electronic and automotive industries

25 May 2012

18 years79,040 46,228 Leaseover 30 years/

24.9.2021

1,838

location/address

latest date of

revaluation /Date of

purchase

ageof

buildinglandarea

(sq. ft.)

Builtup

area(sq. ft.)

tenure/Date ofexpiry

of lease

net bookvalues as

at30 June

2015rm’000

Lot 26 & 27Zone Perindustrian Phase 1Kulim Hi-Tech industrial Park09000 KedahMalaysia

Office building annexed to a factory building/Assembly and test of integrated circuit chips

20 October2011 *

Plant 1:18 years

Plant 2:14 years

513,140 Plant 1: 95,000

Plant 2: 89,000

Leaseover 60 years/

19.8.2056

32,472

Plot 78Lintang BayanLepas 7Phase iVKawasan Perindustrian Bayan Lepas11900 Pulau PinangMalaysia

Office building annexed to a factory building/Manufacture of tooling products, automation systems and precision machining

2 May2012 *

17 years 66,000 51,000 Leaseover 60 years/

10.7.2057

5,371

Lot 27217, Jalan Haji Abdul MananBatu 5 1/2Off Jalan Meru41050 KlangSelangorMalaysia

Single storey detached factory with a double storey office/Manufacturing of automotive components

25 May 2012

20 years53,604 37,502 Freehold 5,521

Lot 6, Jalan 6/4Kawasan Perindustrian Seri Kembangan43300 Seri KembanganPetaling JayaSelangorMalaysia

Single storey detached factory with a double storey office/Metal stamping operations

25 May 2012

26 years48,319 29,881 Lease over 99 years/10.1.2089

5,694

lAnd And bUildinGs

Description/existinguse

*

As at 30 June 2015

153PRoPERtiEs oF thE GRoUP (cont’d)

location/address

latest date of

revaluation /Date of

purchase

ageof

buildinglandarea

(sq. ft.)

Builtup

area(sq. ft.)

tenure/Date ofexpiry

of lease

net bookvalues as

at30 June

2015rm’000

lAnd And bUildinGs (cont’d)

Description/existinguse

*

No.40 Yin Zhou Road, Kong Yue Industrial Park, XinHui District,JiangMen City, GuangDong Province,People’s Republic of China

2-storey office with single storey detached factory building/Manufacturing and fabrication of tools and dies and precision stamping parts for the electronic and electrical industries

25 May 2012

12 years358,793 93,076 Leaseover 50 years/

11.5.2053

13,448

Kawasan Industri KIIC, Lot E-4BJln. TolJakarta-CikampekKM47 Teluk JambeKarawang, 41361Jawa Baratindonesia

2-storey office and single storey detached factory/Manufacturing and fabrication of tools and dies and precision stamping parts for the electronic and automotive industries

25 May 2012

3 years 107,639 44,627 Leaseover 30 years/

24.9.2025

5,883

Plot 321 being part of Mukim 13 Daerah TengahSeberang Perai TengahPenangMalaysia

Vacant land October 2011

N/A174,719 N/A Leaseover 60 years/

25.1.2072

2,996

Note:* Treatedasdeemedcosts intheauditedfinancialstatementsoftheGroup, inaccordancetothetransitional provisions of mFrS 1, First-Time Adoption of malaysian Financial reporting Standards.

As at 30 June 2015


154 PRoPERtiEs oF thE GRoUP (cont’d)

location/address

titletype

latestdate of

revaluation/Date of

purchaseCrop

plantedlandarea

hectares (“ha.”)

tenure/ Date of expiryof lease

net book value as at

30 June 2015

rm’000

Division 1,Bukit Garam/Sg. LokanOff KM 76.5Sandakan-Lahad Datu Highway KinabatanganSabah, Malaysia

Country Lease(“cl”)and Native Title (“nt”)

25 May 2012

(Biologicalassets:17 July

2014)

Oil palm (i) CL: 142.883

(ii) NT: 40.510

a) 17.293 ha. Leasehold/ 31.12.2081

b) 59.570 ha. Leasehold/ 31.12.2082

c) 5.830 ha. Leasehold/ 31.12.2082

d) 36.200 ha. Leasehold/ 31.12.2096

e) 23.990 ha. Leasehold/ 31.12.2100

Perpetual/ 31.5.2039

13,711

PlAntAtion EstAtEs

Division 2Bukit Garam/Sg. LokanOff KM 76.5Sandakan-Lahad Datu HighwayKinabatanganSabah, Malaysia

NT, ProvisionalList (“Pl”) and Field Register (“fr”)

25 May 2012


2014)

Oil palm (i) NT: 225.219

(ii) FR: 4.828

(iii) PL : 9.801

a) 205.829 ha. Perpetual/ 12.12.2098

b) 19.390 ha. Perpetual/ 31.5.2039

Perpetual/31.5.2039

Leasehold/ 31.12.2079

21,479

*

As at 30 June 2015

155PRoPERtiEs oF thE GRoUP (cont’d)

Division 3Bukit Garam/Sg. LokanOff KM 76.5Sandakan- Lahad Datu HighwayKinabatangan Sabah, Malaysia

CL and NT 25 May 2012


2014)

Oil palm (i) CL: 24.270

(ii) NT: 364.534

Leasehold/ 31.12.2096

a) 361.271 ha. Perpetual/ 31.5.2039

b) 3.263 ha. Perpetual/ 13.7.2040

24,768

Bukit Garam/Sg. LokanOff KM 76.5Sandakan – Lahad Datu HighwayKinabatanganSabah, Malaysia

NT 25 May 2012


2014)

Oil palm NT: 104.205 a) 97.185 ha. Perpetual/ 7.12.2040

b) 7.020 ha. Perpetual/ 18.12.2038

6,755

PlAntAtion EstAtEs (cont’d)

location/address

titletype

latestdate of

revaluation/Date of

purchaseCrop

plantedlandarea

hectares (“ha.”)

tenure/ Date of expiryof lease

net book value as at

30 June 2015

rm’000

*

As at 30 June 2015


156 noticE oF thE FoURthAnnUAl GEnERAl mEEtinG

noticE is hEREby GiVEn that the Fourth Annual General Meeting of the Company will be held at Selangor 1, Dorsett Grand Subang, Jalan SS 12/1, 47500 Subang Jaya, Selangor Darul Ehsan, Malaysia on 15 December 2015 at 10.00 a.m. for the following business:

AGEndA

1. To receive the Audited Financial Statements of the Company for the financial year ended 30 June 2015 together with the Directors’ and Auditors’ Reports thereon.

2. To re-elect the following Directors retiring in accordance with Article 77 of the Company’s Articles of Association:

(i) Datuk Seri Panglima (Dr.) Goh Tian Chuan, JP (ii) Mr. Ooi Boon Pin

3. To consider and if thought fit, to pass the following Ordinary Resolution in accordance with Section 129 of the Companies Act, 1965:

“THAT Tuan Haji Ash’ari Bin Ayub, retiring pursuant to Section 129 of the Companies Act, 1965, be and is hereby re-appointed as Director of the Company to hold office until the next annual general meeting.”

4. To appoint Messrs KPMG as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.

5. As Special Business to consider and if thought fit, to pass the following Ordinary Resolutions, with or without modifications:

oRdinARy REsolUtion – AUthoRity to issUE shAREs

“THAT subject always to the Companies Act, 1965 (“Act”) and the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Act, to issue shares in the Company from time to time at such price, upon such terms and conditions, 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 does not exceed ten percentum (10%) of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

12

3

4

5

resolution no.

157noticE oF thE FoURth AnnUAl GEnERAl mEEtinG (cont’d)

oRdinARy REsolUtion – PRoPosEd REnEWAl oF shAREholdERs’ mAndAtE FoR REcURREnt RElAtEd PARty tRAnsActions oF A REVEnUE oR tRAdinG nAtURE With AtmEl coRPoRAtion

“THAT approval be and is hereby given to the Company and/or its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature as set out in Section 2.2 of the Circular to Shareholders dated 18 November 2015 with Atmel Corporation, provided that such transactions are undertaken in the ordinary course of business, on arm’s length basis, on normal commercial terms which are not more favourable to the related party than those generally available to the public and are not detrimental to the minority shareholders; AND THAT the Directors and/ or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) as they may consider expedient or necessary or in the interest of the Company to give effect to the transactions contemplated and/or authorised by this ordinary resolution;

AND THAT such approval shall continue to be in force until the earlier of:

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the forthcoming AGM at which the proposed renewal of shareholders’ mandate for recurrent related party transactions of a revenue or trading nature with Atmel Corporation is approved, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed; (ii) the expiration of the period within which the next AGM after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or (iii) is revoked or varied by resolution passed by the shareholders of the Company in general meeting.”

6. To transact any other business for which due notice shall have been given.

by oRdER oF thE boARd

Seow Fei SanLaw Mee PooLeong Lup YanSecretaries

Petaling Jaya

18 November 2015

6


158

NOTES:

(i) Proxy

1. Only depositors whose names appear in the Record of Depositors as at 8 December 2015 shall be regarded as members and entitled to attend, speak and vote at the Annual General Meeting (“Meeting”). 2. A member entitled to attend, speak and vote at the Meeting is entitled to appoint a proxy or proxies to attend, speak and vote on his/her behalf. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of proxy.

3. A member shall not be entitled to appoint more than two (2) proxies to attend, speak and vote at the same meeting.

4. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

5. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised.

6. The instrument appointing a proxy must be deposited at the Company’s Share Registrar’s Office at Tricor Investor Services Sdn. Bhd., Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for the Meeting or any adjournment thereof.

7. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

8. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt Authorised Nominee may appoint in respect of each omnibus account it holds.

(ii) ExplanatoryNotesonSpecialBusiness

• ordinary resolution no. 5

The proposed Ordinary Resolution 5, if passed, will empower the Directors of the Company to issue not more than 10% of the issued share capital of the Company subject to the approvals of all the relevant governmental and/or other regulatory bodies and for such purposes as the Directors consider would be in the interest of the Company. This authorisation will, unless revoked or varied by the Company in a general meeting, expire at the next Annual General Meeting of the Company.

As at the date of this Notice, no new shares in the Company were issued pursuant to the authority granted to the Directors at the Third Annual General Meeting held on 15 December 2014 and which will lapse at the conclusion of the Fourth Annual General Meeting.

The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.. • ordinary Resolution no. 6

The proposed Ordinary Resolution 6, if passed, will allow the Group to enter into Recurrent Transactions pursuant to paragraph 10.09 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Further information on the Proposed Renewal of Shareholders’ Mandate for Recurrent Transactions is set out in the Circular to Shareholders dated 18 November 2015, which is despatched together with the Company’s Annual Report 2015.

noticE oF thE FoURth AnnUAl GEnERAl mEEtinG (cont’d)

159

FoRm oF PRoxy

Please indicate with an “X” in the space above on how you wish to cast your vote. In the absence of specific directions, your proxy will vote or abstain as he/she thinks fit.

Dated this day of 2015

Signature/Seal of Member

Number of Shares Held

i/We

NRIC No./Company No.

being (a) Member(s) of GlobAltEc FoRmAtion BerhaD (953031-A) hereby appoint the following person(s):

resolution no. for against

1

2

3

4

5

6

(BLOCK LETTERS)of

or failing him/her, THE CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us on my/our behalf at the Fourth Annual General Meeting of the Company to be held at Selangor 1, Dorsett Grand Subang, Jalan SS 12/1, 47500 Subang Jaya, Selangor Darul Ehsan, Malaysia on 15 December 2015 at 10.00 a.m. and at any adjournment thereof and to vote as indicated below:

Name of proxy, NRIC No.

1.

2.

or failing him/her,

1.

2.

No. of shares to be represented by proxy

CDS Account No.


160 Notes:

1. Only depositors whose names appear in the record of Depositors as at 8 December 2015 shall be regarded as members

and entitled to attend, speak and vote at the Annual General meeting (“meeting”).

2. A member entitled to attend, speak and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak

and vote on his/her behalf. A proxy may but need not be a member of the Company and the provisions of Section

149(1)(b)oftheCompaniesAct,1965shallnotapplytotheCompany.Thereshallbenorestrictionastothequalification

of proxy.

3. A member shall not be entitled to appoint more than two (2) proxies to attend, speak and vote at the same meeting.

4. Whereamemberappointstwo(2)proxies,theappointmentshallbeinvalidunlesshe/shespecifiestheproportionsof

his/her holdings to be represented by each proxy.

5. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised

in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly

authorised.

GlobAltEc FoRmAtion bERhAd (953031-A)

c/o tricor investor Services Sdn. Bhd.Unit 32-01, Level 32, Tower A, Vertical Business Suite

Avenue 3, Bangsar South

No. 8, Jalan Kerinchi, 59200 Kuala Lumpur

Fold Here

Fold Here

StamP

Notes:

6. TheinstrumentappointingaproxymustbedepositedattheCompany’sShareRegistrar’sOfficeatTricorInvestorServices

Sdn. Bhd., Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, no. 8, Jalan kerinchi, 59200 kuala

Lumpur not less than forty-eight (48) hours before the time appointed for the meeting or any adjournment thereof.

7. WhereamemberoftheCompanyisanauthorisednomineeasdefinedundertheSecuritiesIndustry(CentralDepositories)

Act, 1991, it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each securities account

it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

8. Where a member of the Company is an Exempt Authorised nominee which holds ordinary shares in the Company for

multiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhich

the Exempt Authorised nominee may appoint in respect of each omnibus account it holds.

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