Chairman's Statement 1-2. Statement by the Trustees 3. Statutory Declaration 3. Independent Auditors' Report 4-5. Balance Sheet 6

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2 WORLD WIDE FUND FOR NATURE MALAYSIA (Incorporated in Malaysia) CONTENTS PAGE Chairman's Statement 1-2 Statement by the Trustees 3 Statutory Declaration 3 Independent Auditors' Report 4-5 Balance Sheet 6 Statement of Income and Expenditure 7-8 Statement of Receipts and Payments 9-10 Notes to the Financial Statements 11-21

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8 WORLD WIDE FUND FOR NATURE MALAYSIA (Incorporated in Malaysia) BALANCE SHEET AS AT 30 JUNE 2016 NON-CURRENT ASSETS Note RM RM Property, plant and equipment 3 9,201,885 9,772,380 9,201,885 9,772,380 CURRENT ASSETS Inventories 4 171, ,855 Sundry receivables 5 1,934,661 1,000,781 Fixed deposits with licensed financial institutions 6 20,800,000 20,800,000 Cash and bank balances 4,612,433 6,353,716 27,519,092 28,325,352 CURRENT LIABILITY Sundry payables 7 3,813,379 4,987,768 3,813,379 4,987,768 NET CURRENT ASSETS 23,705,713 23,337,584 32,907,598 33,109,964 REPRESENTED BY: FUND ACCOUNTS 8 32,907,598 33,109,964 The accompanying notes form an integral part of the financial statements. 6

9 WORLD WIDE FUND FOR NATURE MALAYSIA (Incorporated in Malaysia) STATEMENT OF INCOME AND EXPENDITURE FOR THE YEAR ENDED 30 JUNE RM RM INCOME Donations 25,320,822 23,438,770 Grants - International grants 11,222,463 14,116,621 Events, promotions and sale of images and inventories 387,923 1,603,466 Gain from disposal of property, plant and equipment 2,200 50,427 Gain on disposal of investment - 32,530 Reversal of provision for diminution in value on long term investments - 60,646 Interest income 844, ,463 Licensing and royalty income - 10,121 37,778,186 39,978,044 LESS: EXPENDITURE Salaries and wages 5,448,543 5,099,662 Employees' Provident Fund 754, ,491 PA insurance, hospitalisation, medical & SOCSO 179, ,676 Auditors' remuneration 15,000 15,000 Depreciation 886, ,618 Newspapers, periodicals and books 9,243 11,616 Telecommunication (Telephone, fax and internet) 65,425 90,845 Office running costs (Printing, stationery, postage, etc) 192, ,710 Bank charges 15,974 12,735 Travel and transportation costs 481, ,231 Insurance 38,231 32,855 Sundry expenses 33,572 43,000 Building and maintenance expenses 149, ,493 Staff advertisements 31,072 54,124 International secretariat services 938, ,953 Balance carried forward 9,239,091 8,948,009 7

10 WORLD WIDE FUND FOR NATURE MALAYSIA (Incorporated in Malaysia) STATEMENT OF INCOME AND EXPENDITURE FOR THE YEAR ENDED 30 JUNE 2016 (CONTD.) Note RM RM Balance brought forward 9,239,091 8,948,009 IT infrastructure, equipment and maintenance 618, ,644 HR, training and capacity building expenses 207, ,665 Awards for long service and special merit 13,113 8,968 Electricity and water 92,483 87,111 Fund raising expenses 6,307,104 6,052,128 Communications and branding 200, ,404 Staff welfare 193,986 5,138 Rental expenses 244, ,672 Knowledge management and library expenses 4,653 3,556 Legal fees 2,703 12,336 Inventories obsolescence provision - 49,377 Consultancy fees 588, ,741 17,712,092 16,932,749 Less: Project management costs charged to various projects (2,519,953) (1,900,239) Cost recoveries charged to various projects (483,419) (477,363) Operating expenditure 14,708,720 14,555,147 Surplus of income over operating expenditure 23,069,466 25,422,897 Transfer to fund accounts 8 (23,069,466) (25,422,897) - - The accompanying notes form an integral part of the financial statements. 8

11 WORLD WIDE FUND FOR NATURE MALAYSIA (Incorporated in Malaysia) STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 30 JUNE RM RM RECEIPTS Donations 24,913,777 23,438,770 Grants - International grants 10,867,732 14,116,621 Events, promotions and sale of images and inventories 622,954 1,368,435 Interest income 395, ,463 Proceeds from disposal of property, plant and equipment 2,200 50,431 Proceeds from disposal of investment - 273,955 Licensing and royalty income - 10,121 36,802,264 39,923,796 LESS: PAYMENTS Salaries and wages 5,466,984 5,124,354 Employees' Provident Fund 746, ,828 PA insurance, hospitalisation, medical & SOCSO 179, ,676 Auditors' remuneration 15,000 15,000 Newspapers, periodicals and books 9,243 11,616 Telecommunication (Telephone, fax and internet) 71,445 87,618 Office running costs (Printing, stationery, postage, etc) 213, ,598 Bank charges 15,974 12,735 Travel and transportation costs 473, ,258 Insurance 29,260 32,855 Sundry expenses 30,256 43,000 Building and maintenance expenses 157, ,928 Staff advertisements 55,452 29,744 International secretariat services 938, ,953 Balance carried forward 8,402,551 8,099,163 9

12 WORLD WIDE FUND FOR NATURE MALAYSIA (Incorporated in Malaysia) STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 30 JUNE 2016 (CONTD.) RM RM Balance brought forward 8,402,551 8,099,163 IT infrastructure, equipment and maintenance 774, ,810 HR, training and capacity building expenses 222, ,461 Awards for long service and special merit 13,113 8,968 Electricity and water 96,540 87,111 Fund raising, communications and branding expenses 6,728,087 6,128,754 Staff welfare 193,986 5,138 Rental expenses 244, ,672 Knowledge management and library expenses 4,653 3,556 Legal fees 2,703 12,336 Consultancy fees 584, ,741 Inventories purchased 132, ,255 Acquisition of property, plant and equipment 329,938 1,003,151 Conservation and education projects expenses 20,814,517 21,818,873 Placement of fixed deposits with licensed financial institutions with original maturity period of more than 3 months 20,800,000-59,343,547 38,757,989 NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (22,541,283) 1,165,807 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF FINANCIAL YEAR 27,153,716 25,987,909 CASH AND CASH EQUIVALENTS AT THE END OF FINANCIAL YEAR 4,612,433 27,153,716 Cash and cash equivalents comprise: Cash and bank balances 4,612,433 6,353,716 Fixed deposits with licensed financial institutions with original maturity period of less than 3 months - 20,800,000 4,612,433 27,153,716 The accompanying notes form an integral part of the financial statements. 10

13 WORLD WIDE FUND FOR NATURE MALAYSIA (Incorporated in Malaysia) NOTES TO THE FINANCIAL STATEMENTS 30 JUNE GENERAL INFORMATION The World Wide Fund for Nature Malaysia ("the Organisation") was incorporated under the Trustees (Incorporation) Act The principal activity of the Organisation is to promote conservation by education and research as follows: (a) by supporting studies and educational activities; (b) by the publication of educational and scientific works thereon; and (c) by providing opportunities for such studies and activities by means of the conservation of landscape fauna and flora, water, soils and other natural resources. There have been no significant changes in these activities during the financial year. The registered office of the Organisation is located at 1, Jalan PJS 5/28A, Petaling Jaya Commercial Centre (PJCC) Petaling Jaya, Selangor. The number of employees in the Organisation at the end of the financial year was 212 (2015: 206). The financial statements were authorised for issue by the Board of Trustees in accordance with a resolution of the Trustees on 9 December

14 2. SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of Preparation The financial statements of the Organisation have been prepared under the historical cost convention and comply with the requirements of the Trust Deed dated 13 January 1972 and Private Entity Reporting Standards in Malaysia. The financial statements are prepared in Ringgit Malaysia (RM). 2.2 Malaysian Private Entities Reporting Standard On 14 February 2014, the Malaysian Accounting Standards Board ("MASB") issued a new MASB approved accounting framework, the Malaysian Private Entities Reporting Standard ( MPERS ). The Organisation will be required to prepare financial statements using the MPERS in its first MPERS financial statements for the year ending 30 June In presenting its first MPERS financial statements, the Organisation may be required to restate the comparative financial statements to amounts reflecting the application of MPERS. The adjustments required on transition, if there are any, will be made, retrospectively, against opening retained profits. The financial performance and financial position as disclosed in these financial statements for the year ended 30 June 2016 could be different if prepared under the MPERS. At the date of these financial statements, the Organisation has not completed its quantification of the financial effects of the differences between Private Entities Reporting Standards and accounting standards under the MPERS. The Organisation is currently assessing the impact of adopting MPERS, and is confident that it will meet the relevant milestones to enable full compliance with MPERS in its financial statements for the year ending 30 June

15 2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 2.3 Summary of Significant Accounting Policies (a) Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(b). Leasehold land and building are depreciated over the period of the respective leases. Depreciation of other property, plant and equipment is provided for on a straight line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates: Leasehold land and building 2% Motor vehicles 20% Office equipment and computers 33.3% Renovations 15% Gains or losses arising from the disposal of property, plant and equipment is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognised as income or expense in the income statement. (b) Impairment of Assets At each balance sheet date, the Organisation reviews the carrying amounts of its assets to determine whether there is any indication of impairment. If any such indication exists, impairment is measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use, which is measured by reference to discounted future cash flows. An impairment loss is recognised as an expense in the statement of income and expenditure immediately. (c) Inventories Inventories are stated at the lower of cost or net realisable value. Cost is determined using the weighted average method and represents cost of purchase. Net realisable value is the estimated selling price in the ordinary course of business. 13

16 2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 2.3 Summary of Significant Accounting Policies (Contd.) (d) Cash and Cash Equivalents For the purpose of the statement of receipts and payments, cash and cash equivalents include cash on hand and at banks and deposits with financial institutions with original maturity period of less than 3 months. (e) Investments Fixed deposits with licensed financial institutions with original maturity period of more than 3 months are classified as investments and not as cash and cash equivalents. These investments are carried at cost. The interest income arising from these investments are recognised in the statement of income and expenditure on an accrual basis as described in Note 2.3(h)(ii). (f) Employee Benefits (i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Organisation. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term nonaccumulating compensated absences such as sick leave are recognised when the absences occur. (ii) Defined contribution plans The Organisation makes contributions to the Employees Provident Fund ( EPF ). Such contributions are recognised as an expense in the statement of income and expenditure as incurred. (g) Currency Conversion and Translation Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange ruling at the dates of the transactions. At each balance sheet date, foreign currency monetary items are translated into Ringgit Malaysia at exchange rates ruling at that date. All exchange rate differences are taken to the statement of income and expenditure. 14

17 2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 2.3 Summary of Significant Accounting Policies (Contd.) (g) Currency Conversion and Translation (Contd.) The principal exchange rates used for each respective unit of foreign currency ruling at the balance sheet date are as follows: RM RM Great Britain Pounds United States Dollars Euros Swiss Francs Australian Dollars Indonesian Rupiahs ('000) (h) Income Recognition Income is recognised when it is probable that the economic benefits associated with the transaction will flow to the Organisation and the amount of the income can be measured reliably. (i) Donations from individuals, corporations, foundations and grants are recognised on the receipts basis. The recognition of donations on the receipts basis represents a departure from the provisions of the accounting standard ( MASB 9 : Revenue ) as issued by the Malaysian Accounting Standards Board. MASB 9 requires revenue of such nature to be recognised on an accrual or systematic and rational basis. However, the Board of Trustees is of the opinion that compliance with the provisions of MASB 9 would be misleading to users and the effect of such a departure from the requirements of MASB 9 may be insignificant to the results of the Organisation. (ii) Interest, licensing, royalty and income from events and promotions are recognised on an accrual basis. Sale of inventories are recognised when the Organisation has transferred to the buyer the significant risks and rewards of ownership of the goods. Gains and losses on the disposal of investments are calculated as the difference between net sales proceeds and the carrying amount and are recorded on occurrence of the sale transaction. 15

18 2. SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 2.3 Summary of Significant Accounting Policies (Contd.) (i) Expense Recognition Expenses are recognised when it is probable that the economic benefits associated with the transaction will flow out from the Organisation and the amount of expense can be measured reliably. (j) Provisions Provisions are recognised when the Organisation has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. (k) Reserve Fund An amount of not exceeding 10% of the surplus of income over operating expenditure of the General Fund is transferred to the Reserve Fund on an annual basis, in compliance with the Licensing Agreement signed with the World Wide Fund International. The reserve fund is maintained for WWF International, and may be utilised in the event of a cash call from WWF International as a contribution towards its international conservation activities. 16

19 3. PROPERTY, PLANT AND EQUIPMENT Office Leasehold equipment land and Motor and building vehicles computers Renovations Total RM RM RM RM RM Cost At 1 July ,330,254 3,509,613 2,582,560 3,111,425 16,533,852 Additions 208, ,583 75,783 27, ,592 Disposal - (169,281) (17,390) - (186,671) At 30 June 2015 / 1 July ,538,800 3,728,915 2,640,953 3,139,105 17,047,773 Additions - 8, ,023 81, ,591 Disposal - (12,600) - - (12,600) At 30 June ,538,800 3,724,795 2,866,976 3,220,193 17,350,764 Accumulated Depreciation At 1 July ,099 3,240,756 2,364, ,564 6,642,442 Charge for the year 149, , , , ,618 Disposal - (169,278) (17,389) - (186,667) At 30 June 2015 / 1 July ,832 3,233,174 2,452,805 1,307,582 7,275,393 Charge for the year 150, , , , ,086 Disposal - (12,600) - - (12,600) At 30 June ,608 3,407,377 2,591,118 1,717,776 8,148,879 Net Book Value At 30 June ,106, , ,858 1,502,417 9,201,885 At 30 June ,256, , ,148 1,831,523 9,772,380 17

20 4. INVENTORIES RM RM At Cost Books - 1,354 Stationery 244 6,418 T-shirts 163, ,725 Souvenirs 7,989 18, , ,232 Less: Provision for inventories obsolescence - (49,377) 171, , SUNDRY RECEIVABLES RM RM Deposits 119, ,713 Miscellaneous receivables 1,815, ,068 1,934,661 1,000,781 The Organisation has no significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors. 18

21 6. FIXED DEPOSITS WITH LICENSED FINANCIAL INSTITUTIONS RM RM Classified as Investment Fixed deposits with licensed financial institutions 20,800,000 - Classified as Cash and Cash Equivalent Fixed deposits with licensed financial institutions - 20,800,000 20,800,000 20,800,000 The weighted average interest rate applicable during the financial year was 3.72% per annum (2015: 3.0% per annum) and the average maturity for the placement of deposits was 180 days (2015: 30 days). 7. SUNDRY PAYABLES RM RM Miscellaneous payables 886, ,035 Accruals 2,926,719 4,130,733 3,813,379 4,987,768 19

22 8. FUND ACCOUNTS 2016 General Restricted International Reserve In Trust Fund Fund Grants Fund Fund Total RM RM RM RM RM RM At 1 July ,580,874 2,841, ,130 7,420,576 2,793,758 33,109,964 Surplus of income over operating expenditure transferred from statement of income and expenditure 9,361,174 2,485,829 11,222, ,069,466 Deficit of In Trust Fund receipt over spending (144,787) (144,787) Transfers (3,032,557) - 2,096, , Application of funds for conservation and education projects (7,653,286) (2,171,896) (13,301,863) - - (23,127,045) At 30 June ,256,205 3,155, ,170 8,356,693 2,648,971 32,907, At 1 July ,399,207 5,294,546 2,360,476 6,518,153 2,356,006 31,928,388 Surplus of income over operating expenditure transferred from statement of income and expenditure 9,024,229 2,282,047 14,116, ,422,897 Surplus of In Trust Fund receipt over spending , ,752 Transfers 2,724,888 (3,627,311) - 902, Application of funds for conservation and education projects (7,567,450) (1,107,656) (16,003,967) - - (24,679,073) At 30 June ,580,874 2,841, ,130 7,420,576 2,793,758 33,109,964 20

23 8. FUND ACCOUNTS (CONTD.) The In Trust fund is held on behalf of the following hosted organisations and other conservation based non-governmental organisations ("NGO") RM RM Hosted organisations: TRAFFIC Southeast Asia Fund ("TSEA") 2,439,271 2,711,908 Ma'Daerah Turtle Sanctuary Trust Fund ("MDTCTF") 33,563 37,612 The Malaysian Conservation Alliance for Tigers Fund ("MYCAT") 172,073 39,824 Other conservation based NGOs 4,064 4,414 2,648,971 2,793,758 TSEA has been co-operating with WWF-Malaysia on initiatives related to the role of monitoring and controlling wildlife trade in support of biodiversity conservation in Southeast Asia since As a host, WWF-Malaysia provides operational support to TSEA as the hosted party i.e. assisting TSEA in maintaining its bank account amongst other administrative and logistical support. As per the agreement, TSEA pays WWF-Malaysia an agreed fixed sum associated with the services provided. MDTCTF is a Trust Fund established in 2008 and held by WWF-Malaysia on behalf of the Department of Fisheries, WWF-Malaysia and BP Amoco as partners for conservation works undertaken in Ma'daerah Beach, Kerteh. This Trust Fund will be managed by WWF-Malaysia i.e. to maintain a separate bank account and to receive all funds for and behalf of the Trust and disbursing the fund upon the authority of the partners. MYCAT is a joint programme of the Department of Wildlife and National Parks Peninsular Malaysia, Malaysian Nature Society, TSEA, Wildlife Conservation Society-Malaysia Programme and WWF- Malaysia. This is a collaborative platform for the implementation of the National Tiger Action Plan for Malaysia. As per the MoA signed on 1 January 2009, WWF-Malaysia is to provide operational support for MYCAT i.e. maintaining a separate bank account for the sole purpose of receiving money and making payments on behalf of MYCAT as well as facilitating Consultancy fees payment processing. WWF-Malaysia also maintains a separate trust account to account for monies received and payments made by MYCAT. A service fee of RM100 per month is charged to MYCAT for the services provided as aforementioned. Restricted fund comprise funds received from individuals, corporations, embassies, Foundations and aid agencies. International grants comprise all funds received from the WWF-Network. Both the restricted fund and international grants are earmarked for specific conservation projects. General fund comprise funds that are not subject to any specific conditions imposed by the donors. This fund is used to support general operations and a variety of projects within each conservation program. Reserve fund comprise funds transferred from the General Fund and is maintained in compliance with the Licensing Agreement signed with the WWF-International. 9. TAXATION The income of the Organisation is tax exempt in accordance with the provisions of Section 44(6) of the Income Tax Act,