2016 A N N U A L R E P O R T

Transcription

1 DEVELOPMENT BERHAD Incorporated in Malaysia (COMPANY NO: 7573 V) 2016 A N N U A L R E P O R T

2 C O N T E N T S NOTICE OF ANNUAL GENERAL MEETING 2-5 STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING 6 CORPORATE INFORMATION 7-8 CHAIRMAN'S STATEMENT 9-10 MANAGEMENT DISCUSSION & ANALYSIS ( MD&A ) STATEMENT OF CORPORATE GOVERNANCE STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL AUDIT COMMITTEE REPORT PROFILE OF DIRECTORS DIRECTORS REPORT STATEMENT BY DIRECTORS 36 STATUTORY DECLARATION 36 INDEPENDENT AUDITORS REPORT STATEMENTS OF COMPREHENSIVE INCOME 39 STATEMENTS OF FINANCIAL POSITION STATEMENTS OF CHANGES IN EQUITY STATEMENTS OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION - BREAKDOWN OF RETAINED PROFITS INTO REALISED AND UNREALISED 81 STATEMENT OF SHAREHOLDINGS SUBSTANTIAL SHAREHOLDERS 84 DIRECTORS SHAREHOLDINGS 84 LIST OF PROPERTIES 85 FORM OF PROXY Page 1

3 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the Forty-Eighth Annual General Meeting of KUCHAI DEVELOPMENT BERHAD Agenda ORDINARY BUSINESS REFER TO EXPLANATORY NOTE A RESOLUTION 1 RESOLUTION 2 RESOLUTION 3 RESOLUTION 4 RESOLUTION 5 THAT RESOLUTION 6 RESOLUTION 7 SPECIAL BUSINESS ORDINARY RESOLUTION 1 CONTINUATION OF TERMS OF OFFICE AS INDEPENDENT DIRECTOR THAT ORDINARY RESOLUTION 2 AUTHORITY TO ALLOT SHARES - SECTION 132D THAT AND THAT RESOLUTION 8 REFER TO EXPLANATORY NOTE B RESOLUTION 9 2

4 NOTICE OF ANNUAL GENERAL MEETING (cont d) ORDINARY RESOLUTION 3 PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE FOR KUCHAI DEVELOPMENT BERHAD AND GROUP S DAY-TO-DAY OPERATIONS ENTERED INTO WITH ICE COLD BEER PTE. LTD. PURSUANT TO PARAGRAPH OF THE BURSA MALAYSIA S MAIN MARKET LISTING REQUIREMENTS THAT AND THAT RESOLUTION 10 ORDINARY RESOLUTION 4 PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE FOR KUCHAI DEVELOPMENT BERHAD AND GROUP S DAY-TO-DAY OPERATIONS ENTERED INTO WITH THE NYALAS RUBBER ESTATES LIMITED, PURSUANT TO PARAGRAPH OF THE BURSA MALAYSIA S MAIN MARKET LISTING REQUIREMENTS THAT AND THAT RESOLUTION 11 3

5 NOTICE OF ANNUAL GENERAL MEETING (cont d) 9. To transact any other business of which due notice has been given. NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS HEREBY GIVEN THAT subject to the approval of the shareholders at the Forty-Eighth Annual General Meeting, the single tier First and Final Dividend of 0.2% and A Depositor shall qualify for entitlement only in respect of:- (b) Securities transferred into the Depositor s Securities Account before 4.00 p.m. on 5 (c) Securities bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis LEONG SIEW FOONG (MAICSA NO ) Company Secretaries 4

6 NOTICE OF ANNUAL GENERAL MEETING (cont d) Notes : EXPLANATORY NOTES ON ORDINARY RESOLUTIONS: Note A Note B (i) Ordinary Resolution 2 (ii) Ordinary Resolutions 3 and 4 5

7 STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING DETAILS OF INDIVIDUAL WHO ARE STANDING FOR ELECTION AS DIRECTOR Chew Khat Khiam Albert Age 59, Australian 6

8 CORPORATE INFORMATION DIRECTORS LEE SOO HOON Independent Non-Executive Chairman LEE CHUNG-SHIH Managing Director TAY BENG CHAI Independent Non-Executive Director CHEONG MUN HONG Executive Director CHEW KHAT KHIAM ALBERT Independent Non-Executive Director SECRETARIES LEONG SIEW FOONG ZARINA BINTI AHMAD AUDIT COMMITTEE MEMBERS LEE SOO HOON Chairman TAY BENG CHAI CHEW KHAT KHIAM ALBERT NOMINATION COMMITTEE MEMBERS LEE SOO HOON TAY BENG CHAI REMUNERATION COMMITTEE MEMBERS TAY BENG CHAI Chairman LEE SOO HOON AUDITORS ERNST & YOUNG Chartered Accountants 7

9 CORPORATE INFORMATION (cont d) REGISTERED OFFICE JALAN KUNING, TAMAN PELANGI, JOHOR BAHRU, JOHOR SHARE REGISTRAR LEVEL 6, SYMPHONY HOUSE, PUSAT DAGANGAN DANA, BANKER OCBC BANK (MALAYSIA) BERHAD STOCK EXCHANGE MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD ( Bursa Malaysia ) WEBSITE 8

10 CHAIRMAN S STATEMENT Dear Shareholders, Acknowledgements Dividends 9

11 CHAIRMAN S STATEMENT (cont d) Prospects Appreciation LEE SOO HOON 10

12 MANAGEMENT DISCUSSION & ANALYSIS ( MD&A ) Investments Overview 11

13 MANAGEMENT DISCUSSION & ANALYSIS ( MD&A ) (cont d) Financial Position SEMENYIH LAND DEVELOPMENT 12

14 STATEMENT OF CORPORATE GOVERNANCE THE CODE OF CORPORATE GOVERNANCE ESTABLISH CLEAR ROLES AND RESPONSIBILITIES 1. Roles and Responsibilities of the Board year 2. Delegation to Management 13

15 STATEMENT OF CORPORATE GOVERNANCE (cont d) 3. Chairman 4. Board Charter 5. Code of Conduct and Business Ethics com DIRECTORS 1. The Board 14

16 STATEMENT OF CORPORATE GOVERNANCE (cont d) 2. Board Composition and Balance 3. Board Meetings Name of Directors Attendance of meetings Notes:- ^ Re-designated as Managing Director w.e.f. 1 March 2016 * Resigned w.e.f. 1 May 2016 ** Appointed w.e.f 10 October

17 STATEMENT OF CORPORATE GOVERNANCE (cont d) 4. Access to Information and Advice BOARD COMMITEES www. kuchaidevelopment.com Audit Committee Nomination Committee Chairman Members Lee Soo Hoon Tay Beng Chai Note:- * Resigned w.e.f. 1 May

18 STATEMENT OF CORPORATE GOVERNANCE (cont d) 1. Composition 2. Appointment to the Board 3. Annual Assessment of Independent Directors 17

19 STATEMENT OF CORPORATE GOVERNANCE (cont d) 4. Board Assessment 18

20 STATEMENT OF CORPORATE GOVERNANCE (cont d) 5. Re-election Remuneration Committee Chairman Tay Beng Chai Members Lee Soo Hoon Note:- * Resigned w.e.f. 1 May Composition 2. Directors Remuneration 19

21 STATEMENT OF CORPORATE GOVERNANCE (cont d) Fees Total RM RM RM Total 80, , ,531 Below RM50, RM50,001 to RM100,000-2 RM100,001 to RM150, TIME COMMITMENT 1. Expectation of Time Commitment 20

22 STATEMENT OF CORPORATE GOVERNANCE (cont d) 2. Directors Training Date Seminar/Workshop Conducted by Attended by 21

23 STATEMENT OF CORPORATE GOVERNANCE (cont d) SHAREHOLDERS COMMUNICATION AND INVESTORS RELATIONS POLICY 1. Dialogue Between the Company and Investors 2. Annual General Meeting ACCOUNTABILITY AND AUDIT 1. Directors Responsibility for Preparing the Annual Audited Financial Statements 22

24 STATEMENT OF CORPORATE GOVERNANCE (cont d) 2. Financial Reporting 3. Internal Control 4. Relationship with Auditors 23

25 STATEMENT OF CORPORATE GOVERNANCE (cont d) CORPORATE SOCIAL RESPONSIBILITY ( CSR ) & SUSTAINABILITY STATEMENT ADDITIONAL COMPLIANCE INFORMATION Disclosure of recurrent related party transactions (RRPT) Utilisation of Proceeds Share Buy-Backs Exercise of Options, Warrants or Convertible Securities Depository Receipt Programme Sanctions and/or Penalties Variation in Results Profit Guarantee, Profit Estimate, Forecast or Projection Material Contracts Contract Relating to Loan 24

26 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Introduction Board Responsibility Risk Management Framework Internal Audit Other Key Elements of Internal Control 25

27 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont d) Board s Conclusion Review by the External Auditors, the 26

28 AUDIT COMMITTEE REPORT MEMBERS Chairman Lee Soo Hoon Members Tay Beng Chai Note:- * Resigned w.e.f. 1 May 2016 ** Appointed w.e.f. 10 October 2016 Functions 27

29 AUDIT COMMITTEE REPORT (cont d) ATTENDANCE AT MEETINGS DURING THE FINANCIAL YEAR Name of Audit Committee Members Attendance of Meetings Notes:- * Resigned w.e.f. 1 May 2016 ** Appointed w.e.f. 10 October 2016 SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR Entity 28

30 AUDIT COMMITTEE REPORT (cont d) Internal Audit Function 29

31 PROFILE OF DIRECTORS LEE SOO HOON Gender Male Age 74 Nationality (as at 30 June 2016) Malaysian LEE CHUNG-SHIH Gender Male Age 54 30

32 PROFILE OF DIRECTORS (cont d) TAY BENG CHAI Gender Male Age 55 Nationality (as at 30 June 2016) Malaysian b) Managing Partner of Tay & Partners, Malaysia CHEW KHAT KHIAM ALBERT Gender Male Age 59 Nationality Australian 31

33 PROFILE OF DIRECTORS (cont d) (as at 30 June 2016) CHEONG MUN HONG Gender Male Age 30 (as at 30 June 2016) b) Holder of the right to use the CFA designation 32

34 DIRECTORS REPORT PRINCIPAL ACTIVITIES RESULTS Economic Entity RM Company RM DIVIDENDS Amount RM Net dividend per share Sen Amount RM Net dividend per share Sen 33

35 DIRECTORS REPORT (cont d) DIRECTORS Lee Chung-Shih Lee Soo Hoon Tay Beng Chai Cheong Mun Hong DIRECTORS BENEFITS DIRECTORS INTERESTS < Number of Ordinary Shares of RM0.50 Each > 1 July 30 June 2015 Bought Sold 2016 The Company Lee Chung-Shih < Number of Ordinary Shares of RM1 Each > 1 July 30 June 2015 Bought Sold 2016 Holding company Lee Chung-Shih Fellow subsidiary Lee Chung-Shih 34

36 DIRECTORS REPORT (cont d) OTHER STATUTORY INFORMATION AUDITORS Lee Soo Hoon Lee Chung-Shih 35

37 STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965 Lee Soo Hoon Lee Chung-Shih STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965 ) ) ) at Johor Bahru in the State of Johor on Johor Bahru 36

38 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF KUCHAI DEVELOPMENT BERHAD Report on the financial statements Auditors responsibility Opinion Report on other legal and regulatory requirements 37

39 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF KUCHAI DEVELOPMENT BERHAD (cont d) Other matters Ernst & Young Lee Ming Li Johor Bahru, Malaysia 38

40 STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 Economic Entity Company Note RM RM RM RM Revenue 4 6,914,247 5,805,852 7,265,928 6,210,285 (123,861) (110,170) (123,861) (110,170) 6,790,386 5,695,682 7,142,067 6,100,115 (1,053,615) (903,941) (1,053,615) (903,941) 522,808 17,494, ,808 17,494,273 (44,213,467) (877,213) (29,132,435) (877,213) (37,953,888) 21,408,801 (22,521,175) 21,813,234 (6,920,848) - - (44,874,736) 24,046,278 (22,521,175) 21,813,234 (105,065) (365,510) (105,065) (365,510) (44,979,801) 23,680,768 (22,626,240) 21,447,724 Other comprehensive income: 2,894,304 35,337, ,861,965 39,261,424 19,464,339 26,882,794 28,756,269 74,598,652 19,464,339 26,882,794 (16,223,532) 98,279,420 (3,161,901) 48,330,518 (44,979,801) 23,680,768 (22,626,240) 21,447,724 (16,223,532) 98,279,420 (3,161,901) 48,330,518 (36.35) Diluted 9(b) (36.35) The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 39

41 STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2016 Economic Entity Note RM RM RM Assets Non-current assets 11,300 16,970 12,961 26,902,753 25,081,002 22,966, ,913, ,997, ,761, ,548, ,825, ,435, ,194,830 Current assets , ,345 90,862 56,968 56,842 52, ,105,109 45,711,266 37,555,184 53,365,763 45,922,453 37,698,332 Total assets 460,191, ,357, ,893,162 Equity and liabilities Current liabilities , , , ,830 9,390 1, , , ,625 Net current assets 52,448,143 45,074,305 36,945,707 Net current liability , ,343 - Total liabilities 1,170,487 1,061, ,625 Net assets 459,020, ,296, ,140,537 Equity attributable to owners of the parent 18 61,873,667 61,873,667 61,873,667 Retained earnings ,774,232 Reserves ,372, ,616,655 76,018,003 Total equity 459,020, ,296, ,140,537 Total equity and liabilities 460,191, ,357, ,893,162 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 40

42 STATEMENTS OF FINANCIAL POSITION (cont d) AS AT 30 JUNE 2016 Company Note RM RM Assets Non-current assets 11,300 16,970 26,902,753 25,081,002 24,155,384 22,755, ,997, ,761, ,067, ,615,320 Current assets , ,345 56,968 56, ,105,109 45,711,266 53,365,763 45,922,453 Total assets 315,433, ,537,773 Equity and liabilities Current liabilities , , ,830 9, , ,148 Non-current assets 52,448,143 45,074,305 Non-current liability , ,343 Total liabilities 1,170,487 1,061,491 Net assets 314,262, ,476,282 Equity attributable to owners of the parent 18 61,873,667 61,873,667 Retained earnings ,423, ,101,644 Reserves 19 96,965,310 77,500,971 Total equity 314,262, ,476,282 Total equity and liabilities 315,433, ,537,773 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 41

43 STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 < Non-distributable > < Distributable > Share of Foreign Property associated currency and Share Share company translation investment General Retained Total Economic Entity Note capital premium reserves reserve reserves reserve earnings equity RM RM RM RM RM RM RM RM 2016 Opening balance at 1 July 2015 (as previously stated) 61,873,667 1,795,866 64,395,382 65,814,835 12,610,572 6,000, ,694, ,184,504 Balance at 1 July 2015 (as restated) 61,873,667 1,795,866 64,395,382 65,814,835 12,610,572 6,000, ,805, ,296,207 Dividends (1,051,852) (1,051,852) Closing balance at 30 June ,873,667 1,795,866 67,289,686 91,676,800 12,610,572 6,000, ,774, ,020, Opening balance at 1 July 2014 (as previously stated) 61,873,667 1,795,866 29,058,154 26,553,411 12,610,572 6,000, ,536, ,428,392 Balance at 1 July 2014 (as restated) 61,873,667 1,795,866 29,058,154 26,553,411 12,610,572 6,000, ,248, ,140,537 (as restated) ,337,228 39,261, ,680,768 98,279,420 Dividends (123,750) (123,750) Closing balance at 30 June ,873,667 1,795,866 64,395,382 65,814,835 12,610,572 6,000, ,805, ,296,

44 STATEMENTS OF CHANGES IN EQUITY (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 < Non-distributable > < Distributable > Share of Foreign Property associated currency and Share Share company translation investment General Retained Total Company Note capital premium reserves reserve reserves reserve earnings equity RM RM RM RM RM RM RM RM 2016 Opening balance at 1 July ,873,667 1,795,866-57,094,533 12,610,572 6,000, ,101, ,476,282 Dividends (1,051,852) (1,051,852) Closing balance at 30 June ,873,667 1,795,866-76,558,872 12,610,572 6,000, ,423, ,262, Opening balance at 1 July ,873,667 1,795,866-30,211,739 12,610,572 6,000, ,777, ,269,514 Dividends (123,750) (123,750) Closing balance at 30 June ,873,667 1,795,866-57,094,533 12,610,572 6,000, ,101, ,476,282 The accompanying accounting policies and explanatory notes form an integral part of the financial statements

45 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 Economic Entity Company RM RM RM RM OPERATING ACTIVITIES (44,874,736) (22,521,175) 21,813,234 6,676 5,937 6,676 5,937 (5,736,989) (4,756,532) (6,088,670) (5,160,965) 644, , , ,213 (251,648) (227,200) (251,648) (227,200) 6,920, ,081, ,487,886 (17,208,364) 28,487,886 (17,208,364) (522,009) (281,236) (522,009) (281,236) (244,393) (181,381) (244,393) (181,381) (36,288) 8 (36,288) 8 (126) (4,556) (126) (4,556) Payables (76,835) 16,609 (76,835) 16,609 (357,642) (169,320) (357,642) (169,320) 61,940-61,940 - (41,743) (157,499) (41,743) (157,499) (337,445) (326,819) (337,445) (326,819) INVESTING ACTIVITIES 248, , , ,269 6,088,670 5,160,965 6,088,670 5,160,965 - (9,121) - (9,121) (145,478) (82,035) (145,478) (82,035) 6,191,277 5,242,078 6,191,277 5,242,078 44

46 STATEMENTS OF CASH FLOWS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 Economic Entity Company RM RM RM RM FINANCING ACTIVITIES (1,051,852) (123,750) (1,051,852) (123,750) (1,051,852) (123,750) (1,051,852) (123,750) NET INCREASE IN CASH AND CASH EQUIVALENTS 4,801,980 4,791,509 4,801,980 4,791,509 EFFECTS OF EXCHANGE RATE CHANGES 2,446,385 3,282,538 2,446,385 3,282,538 CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 40,941,513 32,867,466 40,941,513 32,867,466 CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR (NOTE 15) 48,189,878 40,941,513 48,189,878 40,941,513 45

47 1. CORPORATE INFORMATION NOTES TO THE FINANCIAL STATEMENTS JUNE 2016 FOR THE FINANCIAL YEAR ENDED SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation 2.2 Changes in accounting policies 2.3 Standards issued but not yet effective Description Effective for annual periods beginning on or after 46

48 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.3 Standards issued but not yet effective (cont d) Amendments to FRS 127: Equity Method in Separate Financial Statements Amendments to FRS 10, FRS 12 and FRS 128: Investment Entities: Applying the Consolidation Exception FRS 9 Financial Instruments Malaysian Financial Reporting Standards (MFRS Framework) 47

49 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.4 Current versus non- current classification 2.5 Fair value measurement 48

50 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.5 Fair value measurement (cont d) 2.6 Foreign currencies (a) Functional and presentation currency (b) Foreign currency transactions 49

51 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.6 Foreign currencies (cont d) (b) Foreign currency transactions (cont d) (c) Foreign operations (d) Translation to the presentation currency 2.7 Associates 50

52 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.7 Associates (cont d) NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE Equipment and depreciation 51

53 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.9 Investment properties NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE Impairment of non-financial assets 52

54 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.11 Financial assets NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (a) Financial assets at fair value through profit or loss (b) Loans and receivables 53

55 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) (a) Trade and other receivables and other financial assets carried at amortised cost (b) Unquoted equity securities carried at cost 2.13 Cash and cash equivalents 2.14 Provisions 54

56 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.15 Financial liabilities NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (a) Financial liabilities at fair value through profit or loss (b) Other financial liabilities 2.16 Employee benefits (a) Short term benefits 55

57 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.16 Employee benefits (cont d) (b) Defined contribution plans (c) Retirement benefits 2.17 Leases (a) As lessee (b) As lessor 56

58 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.18 Revenue NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (a) Rental income (b) Interest income (c) Dividend income 2.19 Income taxes (a) Current tax (b) Deferred tax 57

59 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont d) 2.19 Income taxes (cont d) NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (b) Deferred tax (cont d) 2.20 Segment reporting 2.21 Share capital and share issuance expenses 2.22 Contingencies 58

60 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES 3.1 Judgements made in applying accounting policies 3.2 Key sources of estimation uncertainty (a) Impairment of investment in associates (b) Revaluation of investment properties 4. REVENUE Economic Entity Company RM RM RM RM - in Malaysia 9,595 9, , ,028 - outside Malaysia 5,727,394 4,746,937 5,727,394 4,746, , , , , , , , ,200 6,914,247 5,805,852 7,265,928 6,210,285 59

61 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE (LOSS)/PROFIT FROM OPERATIONS Economic Entity and Company RM RM - Statutory audit 33,000 32,000 32,602 31,400 6,676 5,937 - Realised (797) (4,673) - Unrealised 644, ,213 28,487, , ,170 15,081, OTHER INCOME Economic Entity and Company RM RM Other income 522, ,236-17,208, , ,808 17,494, DIRECTORS REMUNERATION Economic Entity and Company RM RM Executive: Salary 80,181 - Fees 50, ,826 - Non-Executive: Fees 159, ,465 Total 290, ,465 60

62 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE DIRECTORS REMUNERATION (cont d) Number of Directors Executive director: Below RM50, RM50,001 to RM100, RM100,001 to RM150, Non-Executive director: Below RM50, RM50,001 to RM100, INCOME TAX EXPENSE Major components of income tax expense Economic Entity Company RM RM RM RM 38,567 36,890 38,567 36,890 36,787 64,294 36,787 64,294 75, ,184 75, ,184 3,461 82,483 3,461 82,483 - (18,157) - (18,157) 3,461 64,326 3,461 64,326 26, ,000 26, , , , , ,510 61

63 8. INCOME TAX EXPENSE (cont d) NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE Economic Entity RM RM Restated (44,874,736) 24,046,278 (10,769,937) 6,011,570 3,962, ,557 6,770,527 (4,290,708) (1,548,490) (1,314,865) 1,661,004 (659,370) 3,461 64, ,000 26,250 - Company 105, ,510 (22,521,175) 21,813,234 (5,405,082) 5,453, , ,557 6,770,527 (4,391,817) (1,548,490) (1,314,865) 3,461 64, ,000 26, , ,510 62

64 9. (LOSS)/EARNINGS PER SHARE NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (a) Basic Economic Entity RM RM Restated (44,979,801) 23,680, ,747, ,747,334 (36.35) (b) Diluted 10. EQUIPMENT Economic Entity and Company RM RM RM Cost At 1 July ,201-16,201 Additions - 9,121 9,121 At 30 June 2015 and 1 July ,728 9,121 26,849 At 30 June ,819 9,682 28,501 Accumulated depreciation At 1 July ,240-3,240 Charge for the year (Note 5) 1,662 4,275 5,937 At 30 June 2015 and 1 July ,318 4,561 9,879 Charge for the year (Note 5) 1,871 4,805 6,676 At 30 June ,527 9,674 17,201 Net carrying amount At 30 June ,410 4,560 16,970 At 30 June , ,300 63

65 11. INVESTMENT PROPERTIES NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE Economic Entity and Company RM RM At beginning of year 25,081,002 22,966,002 Fair value gain during the year (Note 6) 522, ,236 1,299,742 1,833,764 At end of year 26,902,753 25,081, RM RM 550, ,322 8,058 7, INVESTMENT IN ASSOCIATE Economic Entity RM RM RM Restated Restated 24,155,384 22,755,624 20,796, ,839, ,819, ,871, ,994, ,575, ,667,467 (15,081,032) ,913, ,575, ,667,467 Company RM RM 24,155,384 22,755,624 51,872,889 54,862,174 64

66 12. INVESTMENT IN ASSOCIATE (cont d) Accounting Country of Equity interest (%) Principal method Name incorporation Activity applied Held by the Company: NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 Sungei Bagan Malaysia Held through Sungei Bagan Rubber Company (Malaya) Berhad Lanstar Assets British Virgin RM RM RM Restated Restated Current assets 153,700, ,399, ,704, ,682, ,502, ,193,708 Current liabilities (2,327,524) (1,593,379) (1,400,026) (5,395,175) (5,362,829) (1,771,095) Net assets 561,659, ,945, ,726, % 148,890, ,737, ,567,153 (1,630,838) (1,630,838) (1,630,838) 15,081,032 15,081,032 15,081,032 23,542,429 15,275, ,975 (1,888,297) (1,888,297) (2,287,855) 183,994, ,575, ,667,467 (15,081,032) ,913, ,575, ,667,467 65

67 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE INVESTMENT IN ASSOCIATE (cont d) Summarised statements of comprehensive income RM RM RM Restated Restated Revenue 11,078,780 11,097,228 14,938,766 2,400 3, ,395 (2,731,584) (2,560,062) (2,579,732) (12,448,444) (12,624,294) 3,776,929 2,393,010 8,489, ,229 (173,240) 1,025,439 (2,393,447) (1,879,078) 5,431,885 14,225,140 (15,080,414) 136,312,960 35,784,731 (16,959,492) 141,744,845 50,009, % (498,125) 1,439,944 3,770,942 (6,422,723) 1,197,533 8,997, (71,262) (6,920,848) 2,637,477 12,697,650 (3,997,667) 36,135,203 9,486,174 6,422,723 (1,197,533) (8,997,970) 469, ,558 5,686 2,894,304 35,337, ,890 (4,026,544) 37,974,705 13,191,540 66

68 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE INVESTMENT IN ASSOCIATE (cont d) (ii) Yield rate 13. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS Economic Entity and Company RM RM Quoted - Shares in Malaysia 2,878,567 2,993,710 Shares outside Malaysia 202,519, ,922,564 2,545,816 2,138, ,943, ,054,305 Unquoted - 3,054,248 2,707, ,997, ,761,724 67

69 14. OTHER RECEIVABLES NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE Economic Entity and Company RM RM 201, ,095 2,250 2, , , Economic Entity and Company RM RM 13,558 2,733 25,769-39,327 2, CASH AND BANK BALANCES Economic Entity and Company RM RM 8,682,174 11,044,439 - in Malaysia 4,915,231 5,955,509 - outside Malaysia 39,507,704 28,711,318 53,105,109 45,711,266 Interest rate (%) Maturity days In Malaysia Outside Malaysia Economic Entity and Company RM RM 53,105,109 45,711,266 (4,915,231) (4,769,753) 48,189,878 40,941,513 68

70 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE OTHER PAYABLES Economic Entity and Company RM RM 223, , , , , ,755-1, , , Economic Entity and Company RM RM 140, ,936-7, , , DEFERRED TAX LIABILITY Economic Entity and Company RM RM At beginning of year 213,343-26, ,000 13,274 13,343 At end of year 252, ,343 Deferred tax liability Economic Entity and Company 2015 Investment properties RM At 1 July 2013, 30 June 2014 and 1 July At 30 June , Investment properties RM At 30 June 2015 and 1 July ,343 26,250 13,274 At 30 June ,867 69

71 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SHARE CAPITAL Number of ordinary shares of RM0.50 each Amount RM RM Authorised 200,000, ,000, ,000, ,000, ,747, ,747,334 61,873,667 61,873, RESERVES Economic Entity Company Note RM RM RM RM (a) 1,795,866 1,795,866 1,795,866 1,795,866 (b) 67,289,686 64,395, translation reserve (c) 91,676,800 65,814,835 76,558,872 57,094,533 reserves (d) 12,610,572 12,610,572 12,610,572 12,610,572 General reserve (e) 6,000,000 6,000,000 6,000,000 6,000, ,372, ,616,655 96,965,310 77,500, RETAINED EARNINGS 70

72 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE DIVIDENDS Amount Net dividend per share RM RM Sen Sen 123, , , ,051, , Net dividend Amount per share RM Sen 22. SIGNIFICANT RELATED PARTY TRANSACTIONS Economic Entity and Company RM RM 925, , , ,014 16,020 14,229 71

73 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE OPERATING LEASE ARRANGEMENTS RM RM Not later than 1 year 465, ,970 Later than 1 year and not later than 5 years - 438, ,457 1,315, FAIR VALUE (a) Fair value hierarchy < Fair value measurement using > in active observable unobservable markets inputs inputs Economic Entity and Level 1 Level 2 Level 3 Total Company RM RM RM RM 2016 Assets measured at fair value 207,943,568 3,054,248 26,902, ,900, Assets measured at fair value 223,054,305 2,707,419 25,081, ,842,726 72

74 24. FAIR VALUE (cont d) NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (b) Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value Note (c) Determination of fair values 25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (a) Liquidity risk 73

75 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (b) Interest rate risk Effect on (decrease) in before Economic Entity and Company basis points tax (RM) Ringgit Malaysia Ringgit Malaysia (10) (500) Ringgit Malaysia Ringgit Malaysia (10) (600) (c) Foreign currency risk 74

76 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (c) Foreign currency risk (cont d) RM RM (180,000) (180,000) 180, , ,100 (332,000) (273,100) 332, (100) (100) (d) Market price risk Economic Entity and Company RM RM Profit or loss Quoted shares in Malaysia 143, ,700 (143,900) (149,700) 10,126,000 10,896,100 (10,126,000) (10,896,100) 280, ,300 (280,000) (242,300) 75

77 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE CATEGORIES OF FINANCIAL INSTRUMENTS Economic Entity and Company Note RM RM (a) Fair value through profit or loss 210,997, ,761,724 (b) Loans and receivables 203, ,345 53,105,109 45,711,266 53,308,795 45,865,611 (c) Financial liabilities measured at amortised cost , , CAPITAL MANAGEMENT RM RM RM Restated Restated Total liabilities 1,170,487 1,061, ,625 Total equity 459,020, ,296, ,140,537 Gearing ratio

78 28. SEGMENT INFORMATION NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (a) Business segments Interest Rental Investments Income Income Total Economic Entity RM RM RM RM 2016 REVENUE 5,736, , ,610 6,914,247 RESULT (37,836,481) 251,648 1,323,758 (36,261,075) (1,692,813) (37,953,888) (6,920,848) (105,065) (44,979,801) ASSETS 224,214,874 44,585,044 22,427, ,227, ,913, ,913,678 50, ,191,310 LIABILITIES 267, , , ,245 1,170,487 OTHER INFORMATION (28,487,886) - - (28,487,886) , ,009 77

79 28. SEGMENT INFORMATION (cont d) NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (a) Business segments (cont d) Interest Rental Investments Income Income Total Economic Entity RM RM RM RM 2015 Restated REVENUE RESULT ASSETS 477,357,698 LIABILITIES 1,061,491 OTHER INFORMATION Fair value gain 78

80 28. SEGMENT INFORMATION (cont d) NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 (b) Geographical Segments Total revenue from external customers Segment assets RM RM RM RM Restated Malaysia 183, , ,139, ,100,962 6,730,662 5,626, ,450, ,409,622 Mauritius - - 3,054,248 2,707,419 Australia - - 2,547,588 2,139,695 6,914,247 5,805, ,191, ,357, RESTATEMENTS Elimination of the fair value changes on the investment in the Company held by its associate Economic Entity As previously Increase/ stated (Decrease) Restated RM RM RM Non-current assets Equity Retained earnings 242,536,722 (2,287,855) 240,248,867 79

81 29. RESTATEMENTS (cont d) NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016 As previously Increase/ stated (Decrease) Restated RM RM RM Non-current assets Equity Retained earnings 265,694,182 (1,888,297) 263,805,885 (iii) Statement of comprehensive income for the year ended 30 June 2015 As previously Increase/ stated (Decrease) Restated RM RM RM Operating activities As previously Increase/ stated (Decrease) Restated RM RM RM 30. AUTHORISATION OF FINANCIAL STATEMENTS FOR ISSUE 80

82 NOTES TO THE FINANCIAL STATEMENTS (cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE SUPPLEMENTARY INFORMATION - BREAKDOWN OF RETAINED PROFITS INTO REALISED AND UNREALISED Economic Entity Company RM RM RM RM Restated - Realised (14,681,355) (19,613,686) (14,681,355) (19,613,686) - Unrealised 170,104, ,715, ,104, ,715, ,423, ,101, ,423, ,101,644 - Realised 41,529,490 41,918, Unrealised 30,384,093 51,996, ,913,583 93,915, (9,562,903) (9,211,222) ,774, ,805, ,423, ,101,644 81

83 STATEMENT OF SHAREHOLDINGS As at 27 September 2016 ANALYSIS OF SHAREHOLDINGS Number of Holders Holdings Total Holdings Percentage of Holdings (%) THIRTY LARGEST SHAREHOLDERS Name of shareholder Number of shares Percentage of shares Lee Foundation, States of Malaya Wong Swee Sin 82

84 STATEMENT OF SHAREHOLDINGS (cont d) Name of shareholder Number of shares Percentage of shares 83

85 SUBSTANTIAL SHAREHOLDERS < No. of Shares > Shareholder Direct Deemed Interest % Interest % DIRECTORS' SHAREHOLDINGS < No. of Shares > Direct Deemed Directors Interest % Interest % 84

86 LIST OF PROPERTIES use Tenure Land Area building Fair Value Revaluation(R) (RM) Langat, Selangor Darul Ehsan 85

87 FORM OF PROXY at NO RESOLUTION RESOLUTION FOR AGAINST NO. OF SHARES HELD CDS ACCOUNT NO

88 Please fold here Stamp Here KUCHAI DEVELOPMENT BERHAD Please fold here 88

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