Company No: D. TSH RESOURCES BERHAD ( D) (Incorporated in Malaysia)

Transcription

1 No: TSH RESOURCES BERHAD () (Incorporated in Malaysia) DIRECTORS REPORT AND AUDITED FINANCIAL STATEMENTS 31 DECEMBER 2016

2 No: TSH RESOURCES BERHAD (Incorporated in Malaysia) CONTENTS PAGE DIRECTORS REPORT 1-5 STATEMENT BY DIRECTORS 6 STATUTORY DECLARATION 6 INDEPENDENT AUDITORS REPORT 7-12 STATEMENTS OF COMPREHENSIVE INCOME STATEMENTS OF FINANCIAL POSITION STATEMENTS OF CHANGES IN EQUITY STATEMENTS OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION ON REALISED AND UNREALISED PROFITS OR LOSSES 115

3 No: 1 TSH RESOURCES BERHAD (Incorporated in Malaysia) DIRECTORS REPORT The Directors have pleasure in submitting their report and the audited financial statements of the and of the for the financial year ended 31 December PRINCIPAL ACTIVITIES The principal activities of the are investment holding, oil palm cultivation and forest plantation. The principal activities of the subsidiaries are stated in Note 22 to the financial statements and are primarily involved in oil palm cultivation and processing. There have been no significant changes in the nature of these activities during the financial year. RESULTS RM 000 RM 000 Profit for the financial year 67, ,071 Attributable to: Owners of the 57, ,071 Non-controlling interests 9,184-67, ,071 DIVIDENDS Dividends paid, declared or proposed by the since the end of the previous financial year were as follows: In respect of the financial year ended 31 December 2015 RM 000 First and final single tier dividend of 2.0 sen per ordinary share, paid on 16 June ,908 At the forthcoming Annual General Meeting, a first and final single tier dividend in respect of the financial year ended 31 December 2016, of 2.0 sen per ordinary share will be proposed for shareholders approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2017.

4 No: 2 RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements. ISSUE OF SHARES AND DEBENTURES The did not issue any new shares and debentures during the financial year. TREASURY SHARES During the financial year, the repurchased 1,000 of its issued ordinary shares from the open market at a price of RM1.93 per ordinary share. The total consideration paid for the repurchase including transaction costs was RM1,975. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, As at 31 December 2016, the held as treasury shares a total of 4,000 of its 1,345,412,443 issued ordinary shares. Such treasury shares are held at a carrying amount of RM8,607 and further relevant details are disclosed in Note 34 to the financial statements. OPTIONS GRANTED OVER UNISSUED SHARES No options were granted to any person to take up unissued shares of the during the financial year. DIRECTORS The Directors who have held for office since the date of the last report are: Datuk (Dr.) Kelvin Tan Aik Pen Dato Tan Aik Sim Datuk Jaswant Singh Kler Dato Jasmy bin Ismail Selina Binti Yeop Lope Yap Boon Teck Tan Aik Kiong Tan Aik Yong Chew Siew Yeng Lim Fook Hin

5 No: 3 DIRECTORS INTERESTS The Directors holding office at the end of the financial year and their beneficial interests in ordinary shares of the and of its related corporations during the financial year ended 31 December 2016 as recorded in the Register of Directors Shareholdings kept by the under Section 134 of the Companies Act, 1965 in Malaysia were as follows: Shares in the Direct interests: Number of ordinary shares of RM0.50 each Balance Balance as at as at Acquired Sold Datuk (Dr.) Kelvin Tan Aik Pen 167,394, ,394,239 Dato Tan Aik Sim 53,105, ,105,976 Tan Aik Kiong 55,107, ,107,189 Tan Aik Yong 53,654, ,654,712 Lim Fook Hin 1,602, ,602,000 Indirect interests: Tan Aik Kiong 27, ,000 Chew Siew Yeng 210, ,000 Lim Fook Hin 4,500, ,500,000 Shares in the subsidiary - Ekowood International Berhad Direct interests: Datuk (Dr.) Kelvin Tan Aik Pen 6,274, ,274,939 Dato Tan Aik Sim 838, ,506 Datuk Jaswant Singh Kler 30, ,000 Tan Aik Kiong 910, ,592 Tan Aik Yong 840, ,506 Indirect interests: Tan Aik Kiong None of the other Directors in office at the end of the financial year had any interest in the ordinary shares of the or its related corporations during the financial year. DIRECTORS BENEFITS Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the financial statements) by reason of a contract made by the or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than deemed benefits arising from related party transactions as disclosed in Note 43 to the financial statements. There were no arrangements during and at the end of the financial year, to which the is a party, which had the object of enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the or any other body corporate.

6 No: 4 OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (I) AS AT THE END OF THE FINANCIAL YEAR (a) Before the statements of comprehensive income and statements of financial position of the and of the were made out, the Directors took reasonable steps: (i) (ii) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values. (b) In the opinion of the Directors, the results of the operations of the and of the during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature. (II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT (c) The Directors are not aware of any circumstances: (i) (ii) which would render the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the and of the inadequate to any material extent; which would render the values attributed to current assets in the financial statements of the and of the misleading; and (iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the and of the misleading or inappropriate. (d) In the opinion of the Directors: (i) (ii) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the and of the for the financial year in which this report is made; and no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after the end of the financial year which would or may affect the ability of the and of the to meet their obligations as and when they fall due.

7 No: 5 OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued) (III) AS AT THE DATE OF THIS REPORT (e) (f) (g) There are no charges on the assets of the and of the which have arisen since the end of the financial year to secure the liabilities of any other person. There are no contingent liabilities of the and of the which have arisen since the end of the financial year. The Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements of the and of the misleading. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR Significant event during the financial year is disclosed in Note 45 to the financial statements. SIGNIFICANT EVENT SUBSEQUENT TO THE END OF THE REPORTING PERIOD Significant event subsequent to the end of the reporting period is disclosed in Note 46 to the financial statements. AUDITORS The auditors, BDO, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the Directors.... Dato Tan Aik Sim Director... Tan Aik Yong Director Kuala Lumpur 5 April 2017

8 No: 6 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENT BY DIRECTORS In the opinion of the Directors, the financial statements set out on pages 13 to 114 have been drawn up in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the and of the as at 31 December 2016 and of the financial performance and cash flows of the and of the for the financial year then ended. The information set out in Note 47 to the financial statements on page 115 has been compiled with in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad. On behalf of the Board,... Dato Tan Aik Sim Director... Tan Aik Yong Director Kuala Lumpur 5 April 2017 STATUTORY DECLARATION I, Loh Toi Meei, being the officer primarily responsible for the financial management of TSH Resources Berhad, do solemnly and sincerely declare that the financial statements set out on pages 13 to 115 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly ) declared by the abovenamed at ) Kuala Lumpur, this ) 5 April 2017 ) Before me:

9 No: 7 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF TSH RESOURCES BERHAD Report on Audit of the Financial Statements Opinion We have audited the financial statements of TSH Resources Berhad, which comprise statements of financial position as at 31 December 2016 of the and of the, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the and of the for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 13 to 114. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the and of the as at 31 December 2016, and of their financial performance and their cash flows for the financial year then ended in accordance with Financial Reporting Standards ( FRS ) and the requirements of the Companies Act, 1965 in Malaysia. Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing ( ISAs ). Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and Other Ethical Responsibilities We are independent of the and of the in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants ( By- Laws ) and the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants ( IESBA Code ), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the and of the for the current year. These matters were addressed in the context of our audit of the financial statements of the and of the as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

10 No: 8 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF TSH RESOURCES BERHAD (continued) Key Audit Matters (continued) Recoverability of plasma receivables As at 31 December 2016, the had plasma receivables amounting to RM42.40 million, which was net of impairment losses of RM9.70 million. The details of plasma receivables and its credit risk have been disclosed in Note 26 to the financial statements. There has been further allowance for impairment on plasma receivables amounting to RM3.70 million in the current financial year. The determination of whether plasma receivables is recoverable involves significant management judgement. In such cases, management uses judgement, based on specific known facts or circumstances. Audit response The audit procedures, with the involvement of the component auditors, included the following: i. challenged assessments performed by management and critically assessed recoverability of debts based on historical trends and expectation of repayment patterns from plasma receivables, either through funding from banks and/or cash flows from plasma receivables through the sales of fresh fruit bunches; ii. vouched to offer letters from banks that provide funding to plasma receivables during and subsequent to the end of the reporting period for its effect, if any, in reducing amounts outstanding as at the end of the reporting period; and iii. assessed and challenged reasonableness of discount rate used in calculating the present value of long term plasma receivables over their expected repayment periods. Information Other than the Financial Statements and Auditors Report Thereon The Directors of the are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the and of the and our auditors report thereon. Our opinion on the financial statements of the and of the does not cover the other information and we do not express any form of assurance conclusion thereon.

11 No: 9 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF TSH RESOURCES BERHAD (continued) Information Other than the Financial Statements and Auditors Report Thereon (continued) In connection with our audit of the financial statements of the and of the, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the and of the or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Statements The Directors of the are responsible for the preparation of financial statements of the and of the that give a true and fair view in accordance with FRSs and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the and of the that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the and of the, the Directors are responsible for assessing the ability of the and of the to continue as a going concerns, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the or the or to cease operations, or have no realistic alternative but to do so. Auditors Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements of the and of the as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

12 No: 10 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF TSH RESOURCES BERHAD (continued) Auditors Responsibilities for the Audit of the Financial Statements (continued) As part of an audit in accordance with approved standards on auditing in Malaysia and ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (a) Identify and assess the risks of material misstatement of the financial statements of the and of the, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. (b) Obtain an understanding of internal control relevant to the audit 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 s and the s internal control. (c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. (d) Conclude on the appropriateness of the Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the or of the to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements of the and of the or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the or the to cease to continue as a going concern. (e) Evaluate the overall presentation, structure and content of the financial statements of the and of the, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. (f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the to express an opinion on the financial statements of the. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

13 No: 11 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF TSH RESOURCES BERHAD (continued) Auditors Responsibilities for the Audit of the Financial Statements (continued) We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial statements of the and of the for the current financial year and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. 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 and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. (b) We have considered the accounts and the auditors reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 22 to the financial statements. (c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the and we have received satisfactory information and explanations required by us for those purposes. (d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

14 No: 12 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF TSH RESOURCES BERHAD (continued) Other Reporting Responsibilities The supplementary information set out in Note 47 of the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. Other Matters The financial statements of the and of the for the financial year ended 31 December 2015 were audited by another firm of chartered accountants whose report dated 18 April 2016 expressed an unqualified opinion on those statements. This report is made solely to the members of the, 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. BDO AF : 0206 Chartered Accountants Tang Seng Choon 2011/12/17 (J) Chartered Accountant Kuala Lumpur 5 April 2017

15 No: 13 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Note RM 000 RM 000 RM 000 RM 000 Revenue 6 872, ,530 80,553 94,706 Cost of sales 7 (560,402) (530,721) (3,582) (3,605) Gross profit 311, ,809 76,971 91,101 Other items of income Interest income 8 13,125 1,648 71,967 83,423 Dividend income Other income 10 15,244 89,113 73,260 61,297 Other items of expenses Marketing and distribution (35,269) (34,692) - - Administrative expenses (139,053) (125,044) (50,739) (51,031) Finance costs 11 (21,363) (16,343) (55,614) (43,852) Other expenses (49,740) (280,698) (11,771) (8,545) Share of profit of associate, net of tax 7,170 4, Share of profit of jointly controlled entities, net of tax 10,939 6, Profit/(Loss) before tax ,580 (85,788) 104, ,431 Taxation 15 (46,521) (19,451) 2,372 (1,984) Profit/(Loss) for the financial year 67,059 (105,239) 107, ,447 Other comprehensive income: Items that may be reclassified subsequently to profit or loss: Foreign currency translations 15(d) 123, , Item that may not be reclassified subsequently to profit or loss: Remeasurements of net defined benefit liabilities 15(d) 917 3, Revaluation of leasehold land 15(d) - 168,130-36,229 Effect of deferred tax on revaluation of leasehold land 15(d) - (40,352) - (8,695) Other comprehensive income for the financial year, net of tax 124, ,622-27,534 Total comprehensive income for the financial year 191, , , ,981

16 No: 14 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 (continued) Note RM 000 RM 000 RM 000 RM 000 Profit/(Loss) attributable to: Owners of the 57,875 (105,549) 107, ,447 Non-controlling interests 9, ,059 (105,239) 107, ,447 Total comprehensive income attributable to: Owners of the 177, , , ,981 Non-controlling interests 14,177 20, Earnings/(Loss) per share attributable to owners of the (sen per share): Basic (7.85) Diluted (7.85) 191, , , ,981 The accompanying notes form an integral part of the financial statements.

17 No: 15 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 ASSETS Note RM 000 RM 000 RM 000 RM 000 Non-current assets Property, plant and equipment , , , ,624 Biological assets 19 1,625,886 1,381, , ,447 Land use rights , , Intangible assets 21 61,057 59, Investments in subsidiaries , ,659 Investment in an associate 23 80,849 65,666 61,259 53,274 Investments in jointly controlled entities 24 75,772 77,833 20,750 20,750 Deferred tax assets 25 18,543 20, Other receivables 26 71, , ,171 1,125,313 Investment securities 27 5,064 5, Current assets 2,964,480 2,745,161 1,940,333 2,058,117 Inventories , ,949 1,673 1,483 Trade and other receivables , , , ,901 Other current assets 29 27,456 18, ,220 Tax recoverable 15,923 16, Investment securities Derivative assets Short term funds Cash and bank balances ,202 57,311 83,451 13, , , , ,206 TOTAL ASSETS 3,510,495 3,176,497 2,641,478 2,360,323 EQUITY AND LIABILITIES Equity attributable to owners of the Share capital , , , ,706 Share premium 34 1,301 1,301 1,301 1,301 Treasury shares 34 (8) (6) (8) (6) Other reserves , ,438 31,762 32,226 Retained earnings , , , ,283 1,506,984 1,356,680 1,072, ,510 Non-controlling interests 156, , TOTAL EQUITY 1,663,428 1,501,341 1,072, ,510

18 No: 16 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2016 (continued) LIABILITIES Non-current liabilities Note RM 000 RM 000 RM 000 RM 000 Loans and borrowings , , , ,113 Retirement benefits 38 14,582 11, Other payables , ,000 Hire purchase payables Deferred tax liabilities , ,535 21,080 23,452 Current liabilities 1,038, , , ,565 Loans and borrowings , , , ,058 Trade and other payables , , , ,968 Hire purchase payables Derivative liabilities 31 10, Current tax payable 11,849 1, ,258 1,037, , ,248 TOTAL LIABILITIES 1,847,067 1,675,156 1,568,807 1,367,813 TOTAL EQUITY AND LIABILITIES 3,510,495 3,176,497 2,641,478 2,360,323 The accompanying notes form an integral part of the financial statements.

19 No: 17 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 < Attributable to owners of the > < Non-distributable > Distributable < Non-distributable > Equity attributable Asset Foreign to owners of Other revaluation currency Share of Non- Equity, the, Share Share Treasury Retained reserves, and capital translation associate controlling total total capital premium shares earnings total reserve reserve reserve interests 2016 Note RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 January ,501,341 1,356, ,706 1,301 (6) 535, , ,139 20, ,661 Profit for the financial year 67,059 57, , ,184 Other comprehensive income Foreign currency translations 123, , , ,394-4,993 Remeasurements of net defined benefit liabilities Other comprehensive income for the financial year, net of tax 124, , , ,394-4,993 Total comprehensive income for the financial year 191, , , , ,394-14,177 Revaluation reserve realised upon depreciation charged ,312 (2,312) (2,312) Grant of equity-settled share options to employees by an associate Transactions with owners Purchase of treasury shares 34 (2) (2) - - (2) Dividends paid on ordinary shares 17 (26,908) (26,908) (26,908) Dividend paid to non-controlling interests (2,394) (2,394) (29,304) (26,910) - - (2) (26,908) (2,394) Balance as at 31 December ,663,428 1,506, ,706 1,301 (8) 569, , , , ,444

20 No: 18 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 (continued) < Attributable to owners of the > < Non-distributable > Distributable c > < Non-distributable > Equity attributable Asset Foreign to owners of Other revaluation currency Share of Non- Equity, the, Share Share Treasury Retained reserves, and capital translation associate controlling total total capital premium shares earnings total reserve reserve reserve interests 2015 Note RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 January ,353,694 1,247, ,706 1,301 (2) 670,602 (97,140) 12,984 (110,305) ,227 (Loss)/Profit for the financial year (105,239) (105,549) (105,549) Other comprehensive income Foreign currency translations 134, , , ,921-5,100 Remeasurements of net defined benefit liabilities 38 3,823 3, , Revaluation of land , , , , ,872 Effect of deferred tax on revaluation of land 15(d) (40,352) (35,583) (35,583) (35,583) - - (4,769) Other comprehensive income for the financial year, net of tax 265, , , , , ,921-20,203 Total comprehensive income for the financial year 160, , (101,726) 241, , ,921-20,513 Grant of equity-settled share options to employees by an associate Transactions with owners Purchase of treasury shares 34 (4) (4) - - (4) Adjustment of additional interests in subsidiaries 1,480 2, ,960 1,480 1,480 - (1,480) Acquisitions of subsidiaries 21, ,174 Dividends paid on ordinary shares 17 (33,635) (33,635) (33,635) Dividends paid to non-controlling interests (1,773) (1,773) (12,758) (30,679) - - (4) (33,635) 2,960 1,480 1,480-17,921 Balance as at 31 December ,501,341 1,356, ,706 1,301 (6) 535, , ,139 20, ,661

21 No: 19 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 (continued) < Non-distributable > Distributable < Non-distributable > Other Asset Equity, Share Share Treasury Retained reserves, revaluation Capital total capital premium shares earnings total reserve reserve 2016 Note RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 January , ,706 1,301 (6) 286,283 32,226 28,782 3,444 Profit for the financial year 107, , Other comprehensive income for the financial year, net of tax Total comprehensive income for the financial year 107, , Revaluation reserve realised upon depreciation charged (464) (464) - Transactions with owners Purchase of treasury shares 34 (2) - - (2) Dividends paid on ordinary shares 17 (26,908) (26,908) (26,910) - - (2) (26,908) Balance as at 31 December ,072, ,706 1,301 (8) 366,910 31,762 28,318 3,444

22 No: 20 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 (continued) < Non-distributable > Distributable < Non-distributable > Other Asset Equity, Share Share Treasury Retained reserves, revaluation Capital total capital premium shares earnings total reserve reserve 2015 Note RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Balance as at 1 January , ,706 1,301 (2) 189,471 4,692 1,248 3,444 Profit for the financial year 130, , Other comprehensive income Revaluation of land 35 36, ,229 36,229 - Effect of deferred tax on revaluation of land 35 (8,695) (8,695) (8,695) - Other comprehensive income for the financial year, net of tax 27, ,534 27,534 - Total comprehensive income for the financial year 157, ,447 27,534 27,534 - Transactions with owners Purchase of treasury shares 34 (4) - - (4) Dividends paid on ordinary shares 17 (33,635) (33,635) (33,639) - - (4) (33,635) Balance as at 31 December , ,706 1,301 (6) 286,283 32,226 28,782 3,444 The accompanying notes form an integral part of the financial statements.

23 No: 21 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 CASH FLOWS FROM OPERATING ACTIVITIES Note RM 000 RM 000 RM 000 RM 000 Profit/(Loss) before tax 113,580 (85,788) 104, ,431 Adjustments for: Amortisation of biological assets Amortisation of land use rights 20 6,801 6, Bad debts written off 12 1, Depreciation of property, plant and equipment 44,383 43,790 4,662 4,752 Dividend income 9 (625) (38) (625) (38) Fair value loss /(gain) on forward currency contracts 1,482 (634) - - Fair value loss/(gain) on commodity future contracts 8,316 (168) (74) 154 (Gain)/Loss from fair value adjustment of forest of forest planting expenditure 19 (916) (27,943) 1,025 (25,395) Gain on disposal of property, plant and equipment (927) (2,555) (125) (304) Impairment losses on: - cost of investments in subsidiaries , investment securities trade receivables 26(a) other receivables 4, property, plant, equipment , Interest expense 11 21,363 16,343 55,614 43,852 Interest income 8 (13,125) (1,648) (71,967) (83,423) Inventories written down/(back) 5,348 (1,559) - - Net (gain)/loss on redemption of shortterm term investment (4) 24 (4) 24 Net unrealised foreign exchange loss/(gain) 20,578 83,909 (68,196) (33,962) Property, plant and equipment written off Recognition of deferred capital grants - (47,890) - - Share of profit of associate (7,170) (4,446) - - Share of profit of jointly controlled entities (10,939) (6,935) - - Waiver of debts owing by subsidiaries - - 1,940 - Write back of impairment losses on: property, - property, plant and equipment 18 (7) (2,306) trade receivables 26(a) (393) (959) other receivables - (4,221) - - Total adjustments 79, ,651 (76,092) (94,113) Operating cash flows before changes in working capital 193, ,863 28,607 38,318

24 No: 22 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 (continued) Changes in working capital Note RM 000 RM 000 RM 000 RM 000 (Increase)/Decrease in inventories (21,126) (20,441) (190) 622 Decrease/(Increase) in receivables 10,393 (21,962) (111,016) (251,951) (Decrease)/Increase in payables (10,443) (37,382) 195, ,658 Increase/(Decrease) in retirement benefits obligations 3,936 (1,923) - - Total changes in working capital (17,240) (81,708) 84,120 (125,671) Cash flows from/(used in) operations 176,159 70, ,727 (87,353) Interest paid (21,363) (16,343) (55,614) (43,852) Income tax paid (23,293) (48,709) - - Income tax refunded 36 3, Real Property Gains Tax (RPGT) paid - (28) - (28) Net cash flows from/(used in) operating activities 131,539 8,655 57,113 (130,348) CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of subsidiaries 22(e) - (31,229) - (44,770) Additional investment in associate (7,985) - (7,985) - Additional investments in subsidiaries (3,518) Dividends received from: - jointly controlled entities 13,000 15, short term investments Forest planting expenditure (11,549) (14,878) (7,880) (10,187) Interest received 8 13,125 1,648 71,967 83,423 Issuance of share capital to non-controlling interest Oil palm planting expenditure (134,528) (151,177) - - Withdrawals/(Placements) of deposits 1,411 4,011 1,442 (102) Proceeds from disposal of investment securities Proceeds from disposal of property, plant and equipment 2,305 10, ,581 Purchase of land use rights 20 (15,143) (3,558) - - Purchase of property, plant and equipment 18 (35,058) (73,348) (3,174) (2,501) Redemption of investment in subsidiary ,700 Redemption of short-term investments Withdrawals of pledged deposits Net cash (used in)/from investing activities (173,792) (241,723) 55,469 32,988

25 No: 23 TSH RESOURCES BERHAD (Incorporated in Malaysia) STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016 (continued) CASH FLOWS FROM FINANCING ACTIVITIES Note RM 000 RM 000 RM 000 RM 000 Dividends paid 17 (26,908) (33,635) (26,908) (33,635) Dividends paid to non-controlling interests (2,394) (1,773) - - Net (repayments)/drawdowns of bankers acceptances (6,934) 4,787 - (20,000) Net drawdown/(repayment) of foreign currency import loan 143 (153) - - Net (repayments)/drawdowns of revolving credits (172,867) 157,695 (135,075) 130,114 Net drawdowns of Sukuk Ijarah Medium Term Notes 50,000 30, Net repayments of Sukuk Ijarah Commercial Papers (20,000) Net drawdowns of Sukuk Musyarakah Medium Term Notes 150, Net drawdowns of term loans 135,966 77, ,975 26,866 Net repayments of hire purchase payables (576) (1,466) - - Purchase of treasury shares 34 (2) (4) (2) (4) Net cash flows from/(used in) financing activities 106, ,167 (46,010) 103,341 Net increase in cash and cash equivalents 64, ,572 5,981 Effects of exchange rate changes 8,951 2,653 4,539 - Cash and cash equivalents as at beginning of financial year 51,385 48,633 12,340 6,359 Cash and cash equivalents as at end of financial year ,511 51,385 83,451 12,340 The accompanying notes form an integral part of the financial statements.

26 No: 24 TSH RESOURCES BERHAD (Incorporated in Malaysia) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER CORPORATE INFORMATION TSH Resources Berhad ( the ) is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the is located at Level 10, Menara TSH, No. 8 Jalan Semantan, Damansara Heights, Kuala Lumpur. The principal place of business of the is located at Bangunan TSH, TB 9, KM 7, Apas Road, Tawau, Sabah. The consolidated financial statements for the financial year ended 31 December 2016 comprise the and its subsidiaries and the interests of the in an associate and jointly controlled entities. These financial statements are presented in Ringgit Malaysia ( RM ), which is also the s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated. The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 5 April PRINCIPAL ACTIVITIES The principal activities of the are investment holding, oil palm cultivation and forest plantation. The principal activities of the subsidiaries are stated in Note 22 to the financial statements and are primarily involved in oil palm cultivation and processing. There have been no significant changes in the nature of these activities during the financial year. 3. BASIS OF PREPARATION The financial statements of the and of the set out on pages 13 to 114 have been prepared in accordance with Financial Reporting Standards ( FRSs ) and the requirements of the Companies Act, 1965 in Malaysia. However, Note 47 to the financial statements set out on page 115 has been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ( MIA Guidance ) and the directive of Bursa Malaysia Securities Berhad. The new FRSs and amendments to FRSs adopted during the financial year are set out in Note 44(a) to the financial statements. The financial statements of the and of the have been prepared under the historical cost convention except as otherwise stated in the financial statements.

27 No: BASIS OF PREPARATION (continued) The has positive cash flows from its business activities and sufficient credit facilities in place to meet its operational requirements (as disclosed further in Note 5(b)(ii) to the financial statements), notwithstanding that the has net current liabilities of RM262,243,000 as at 31 December In addition, the carries out monthly cash flows review for the next twelve (12) months to ensure that the business operations have sufficient funds available to meet their obligations as and when they fall due. Historical results of the treasury management show that the has the ability to meet its obligations as and when they fall due and the has not defaulted on any obligations due or payable to financial institutions or creditors. The Directors are confident that the will continue to operate profitably in the foreseeable future and to obtain continuous financial support from the lenders and shareholders. 4. SEGMENT INFORMATION For management purposes, the is organised into business units based on their products and services, and has two reportable operating segments as follows: (i) (ii) Palm products - the operation of oil palm plantations, manufacture and sale of crude palm oil and palm kernel; and Others - manufacture and sale of downstream wood products, operation of a forest management unit, manufacture, sale and trading of cocoa products, and generation and supply of electricity from biomass plants. Except as indicated above, no operating segments has been aggregated to form the above reportable operating segments. Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments. Transfer prices between operating segments are on an arm s length basis in a manner similar to transactions with third parties.

28 No: SEGMENT INFORMATION (continued) Revenue Adjustment and Per consolidated Palm products Others eliminations financial statements RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Notes RM 000 RM 000 External customers 752, , , , , ,530 Inter-segment 24,315 27, (24,315) (27,718) (a) - - Total revenue 777, , , ,482 (24,315) (27,718) 872, ,530 Results Interest income 116, , (103,659) (109,349) 13,125 1,648 Dividend income Depreciation and amortisation 47,806 46,571 3,642 3, ,448 50,441 Share of profit of associate 7,170 4, ,170 4,446 Share of profit of jointly controlled entities 10,939 6, ,939 6,935 Other material non-cash expenses 28,150 78,554 3, , (b) 31, ,839 Segment profit/(loss) 146,920 90,547 20,649 (85,223) (53,989) (91,112) (c) 113,580 (85,788) Assets: Additions to non-current assets 209, , , (d) 210, ,671 Segment assets 2,516,597 2,384, , , , ,477 (e) 3,510,495 3,176,497 Segment liabilities 69,659 58,086 72,088 66,578 1,705,320 1,550,492 (f) 1,847,067 1,675,156

29 No: SEGMENT INFORMATION (continued) Notes: Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements. (a) (b) Inter-segment revenues are eliminated on consolidation. Other material non-cash expenses consist of the following items as presented in the respective notes to the financial statements: RM 000 RM 000 Impairment losses on: - property, plant and equipment - 183,845 - trade receivables Inventories written down/(back) 5,348 (1,559) Unrealised foreign exchange loss 20,578 83,909 Impairment losses/(write back) on other receivables (non-current) 4,533 (4,416) 31, ,839 (c) The following items are added to/(deducted from) segment profit to arrive at Profit before tax presented in the statements of comprehensive income: RM 000 RM 000 Share of profit of associate 7,170 4,446 Share of profit of jointly controlled entities 10,939 6,935 Finance costs (21,363) (16,343) Unallocated corporate expenses (50,735) (86,150) (53,989) (91,112) (d) Additions to non-current assets consist of: RM 000 RM 000 Property, plant and equipment 35,058 74,226 Biological assets 160, ,887 Land use rights 15,143 3, , ,671 (e) The following items are added to segment assets to arrive at total assets reported in the statements of financial position: RM 000 RM 000 Tax recoverable 15,923 16,065 Deferred tax assets 18,543 20,295 Unallocated amounts 272, , , ,477

30 No: SEGMENT INFORMATION (continued) (f) The following items are added to segment liabilities to arrive at total liabilities reported in the statements of financial position: RM 000 RM 000 Deferred tax liabilities 157, ,535 Borrowings 1,530,209 1,385,122 Unallocated amounts 17,668 14,835 Geographical information 1,705,320 1,550,492 Revenues and segment assets information based on the geographical location of customers and assets respectively are as follows: Revenues Segment assets RM 000 RM 000 RM 000 RM 000 Malaysia 497, ,244 1,552,163 1,430,059 Europe 10,568 2, ,922 Indonesia 295, ,022 1,951,770 1,734,620 United States of America 47,297 33,607 2,615 3,799 Others 21, ,764 1, , ,530 3,510,495 3,176, CAPITAL AND FINANCIAL RISK MANAGEMENT (a) Capital management The primary objective of the s capital management is to ensure that it maintains a good credit rating and healthy capital ratios in order to support a balanced growth objective in its business and to maximise shareholders value. The manages its capital structure and makes adjustments to it, in light of changes in economic conditions and the free cash flow position. To achieve this objective, the may adjust the internal plans in its expansion of plantation land areas and plantation programme. No changes were made in the objectives, policies or processes during the financial years ended 31 December 2016 and 31 December The monitors capital using a debt/equity ratio, which is loans and borrowings less cash and bank balances divided by total equity. The intends to manage its debt/equity ratio at below 1.0 level over the near to medium term to support its existing credit metrics despite its existing financial covenant under the current banking facilities indicating at 1.5 level.

31 No: CAPITAL AND FINANCIAL RISK MANAGEMENT (continued) (a) Capital management (continued) RM 000 RM 000 RM 000 RM 000 Loans and borrowings 1,530,209 1,385, , ,171 Less: Cash and bank balances (Note 33) (131,202) (57,311) (83,451) (13,782) Less: Short-term funds (Note 32) (144) (145) (144) (145) Net debt 1,398,863 1,327, , ,244 Total Equity 1,663,428 1,501,341 1,072, ,510 Gearing ratio Pursuant to the requirements of Practice Note No. 17/2005 of the Bursa Malaysia Securities Berhad, the is required to maintain a consolidated shareholders equity of not less than or equals to twenty-five percent (25%) of the issued and paid-up capital and such shareholders equity is not less than RM40.0 million. The has complied with this requirement for the financial year ended 31 December (b) Financial risk management The and the are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Chief Financial Officer, Head of Treasury and Head of Finance. The audit committee provides independent oversight to the effectiveness of the risk management process. It is, and has been throughout the current and previous financial years, the s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The and the do not apply hedge accounting. (i) Credit risk The s and the s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances), the and the minimise credit risk by dealing exclusively with high credit rating counterparties. The s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The trades only with recognised and creditworthy third parties. It is the s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the s exposure to bad debts is not significant. Information regarding credit enhancements for trade and other receivables and credit risk concentration profiles has been disclosed in Note 26 to the financial statements.