ADVENTA BERHAD Annual Report 2015 - Welcome to … BERHAD (618533-M) ANNUAL REPORT 2015 7 Directors’ Profiles cont’d EDMOND CHEAH SWEE LENG Chairman, Senior Independent Non-Executive

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Annual Report 2015fo r financ ia l year ended 31 October 2015

02 Corporate Information

03 Group Corporate Structure

04 Chairman & Managing Director’s Statement

06 Directors’ Profiles

09 Corporate Governance Statement

23 Audit Committee Report

28 Statement on Risk Management and Internal Control

30 Responsibility Statement by the Board of Directors

31 Financial Statements

98 List of Properties

99 Statistics of Shareholdings

102 Notice of Thirteenth Annual General Meeting

107 Location Map to AGM

Form of Proxy

Contents

ADVENTA BERHAD (618533-M) ANNUAL REPORT 20152

BOARD OF DIRECTORS

EDMOND CHEAH SWEE LENGChairman/Senior Independent Non-Executive Director

LOW CHIN GUANManaging Director

KWEK SIEW LENGExecutive Director

TOH SENG THONGIndependent Non-Executive Director

DATO’ DR. NORRAESAH BINTI HAJI MOHAMADIndependent Non-Executive Director

AUDIT COMMITTEE

TOH SENG THONGChairman

EDMOND CHEAH SWEE LENGMember

DATO’ DR. NORRAESAH BINTI HAJI MOHAMADMember

NOMINATION COMMITTEE

EDMOND CHEAH SWEE LENGChairman

TOH SENG THONGMember

REMUNERATION COMMITTEE


LOW CHIN GUANMember


COMPANY SECRETARY

CHUA SIEW CHUAN (MAICSA 0777689)PAN SENG WEE (MAICSA 7034299)

REGISTERED OFFICE

21, Jalan Tandang 51/205A,Seksyen 51,46050 Petaling Jaya,Selangor Darul EhsanTel : 03-7772 9321Fax : 03-7772 9821

SHARE REGISTRAR

Securities Services (Holdings) Sdn. Bhd.Level 7, Menara Milenium, Jalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : 03-2084 9000Fax : 03-2094 9940

PRINCIPAL BANKERS

OCBC Bank (Malaysia) BerhadStandard Chartered Saadiq Berhad

EXTERNAL AUDITORS

Ernst & YoungUnit 10 D-J, Level 10, Menara Zenith,Jalan Putra Square 6,25200 Kuantan,Pahang, Malaysia

INTERNAL AUDITORS

PKF Advisory Sdn BhdLevel 33, Menara 1MK,Kompleks 1 Mont Kiara,No. 1, Jalan Kiara, Mont Kiara50480 Kuala Lumpur

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad

Sun Healthcare (M) Sdn. Bhd.

Distribution of medical and healthcare equipment, appliances and medical disposal products10

0%

Electron Beam Sdn. Bhd.

Industrial and commercial sterilisation, warehousing and handling services10

0%

Lucenxia (M) Sdn. Bhd.

Provision of home dialysis treatment

100%

PTM Progress Trading & Marketing Sdn. Bhd.

Provision of storage and warehousing services

100%

Corporate Information

ADVENTA BERHAD (618533-M) ANNUAL REPORT 2015 3

BOARD OF DIRECTORS

EDMOND CHEAH SWEE LENGChairman/Senior Independent Non-Executive Director





AUDIT COMMITTEE

TOH SENG THONGChairman

EDMOND CHEAH SWEE LENGMember

DATO’ DR. NORRAESAH BINTI HAJI MOHAMADMember

NOMINATION COMMITTEE



REMUNERATION COMMITTEE


LOW CHIN GUANMember


COMPANY SECRETARY

CHUA SIEW CHUAN (MAICSA 0777689)PAN SENG WEE (MAICSA 7034299)

REGISTERED OFFICE

21, Jalan Tandang 51/205A,Seksyen 51,46050 Petaling Jaya,Selangor Darul EhsanTel : 03-7772 9321Fax : 03-7772 9821

SHARE REGISTRAR

Securities Services (Holdings) Sdn. Bhd.Level 7, Menara Milenium, Jalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : 03-2084 9000Fax : 03-2094 9940

PRINCIPAL BANKERS

OCBC Bank (Malaysia) BerhadStandard Chartered Saadiq Berhad

EXTERNAL AUDITORS

Ernst & YoungUnit 10 D-J, Level 10, Menara Zenith,Jalan Putra Square 6,25200 Kuantan,Pahang, Malaysia

INTERNAL AUDITORS

PKF Advisory Sdn BhdLevel 33, Menara 1MK,Kompleks 1 Mont Kiara,No. 1, Jalan Kiara, Mont Kiara50480 Kuala Lumpur

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad


Distribution of medical and healthcare equipment, appliances and medical disposal products10

0%

Electron Beam Sdn. Bhd.

Industrial and commercial sterilisation, warehousing and handling services10

0%

Lucenxia (M) Sdn. Bhd.

Provision of home dialysis treatment

100%


Provision of storage and warehousing services

100%

Group Corporate Structure


Chairman & Managing Director’s Statement

From the beginning of the year we said healthcare distribution will be one of the core areas of our expansion. We achieved 32% higher revenue this year. To sustain this growth momentum going forward, one of the main focus area will be to widen our product range. SKU grew from 605 to 680 this year and to 800 within 2 years.

Diversifying into the surgical room sector has been the corner stone of our marketing drive, focusing on products of high value and performance. This will be built over the coming years into the country’s leading source of operating room (“OR”) products.

Hospital supplies is a core revenue business and we will continue to invest in this. Sun Healthcare’s mission is to help hospital and healthcare groups reduce their product supply costs, while achieving overall operational efficiency

Ladies and Gentlemen,

We are pleased to inform that our goals for 2015 were achieved across all sectors despite the stiff challenges in the market and the financial headwinds from the global slowdown and currencies instability.

through diversity in sourcing and inventory management. Our ability to bring together healthcare centres, general practitioners and vendors is the fundamental factor that sets us apart from the rest. We create better values along the supply chain by introducing new medical supplies that meets the changing medical techniques.

With the operation of our new logistic centre at Subang and its integrated functions, we intend to achieve higher cost savings and faster consolidation throughput in the Klang Valley. This logistic centre shall be extended to include pharmaceutical stock management and distribution. To further strengthen logistics coverage in the northern region covering Penang, Kedah, Perlis and Langkawi, we opened a new warehouse facility at Kulim, Kedah, reaching out faster to our customers and shortening delivery time.


Chairman & Managing Director’s Statementcont’d

Financially, this sector suffered from the rapid depreciation in the Ringgit, with many contracts tied up from 6 to 12 months. The introduction of the GST was another hurdle since supplies to hospitals are not GST chargeable and has to be absorbed by the company. However, we managed to mitigate the full impact by several negotiated increases.

2014 SalesRM23.2m

PBTRM0.57m

ROE40%

2015 RM30.6m+31.8%

RM0.78m+ 37%

38%

A new online portal, MyCare.com.my, allows partner physicians and their patients to purchase medical products and consumables online, creating the platform for off-site dispensing solution to general practitioners and post acute-care needs. This will be further expanded to geriatric care products.

The Company is looking at acquisitions to scale up and move into more specific sectors in healthcare supplies.

Since the acquisition of Electron Beam Sdn. Bhd. (“Electron Beam”) in 2012, the Company has grown 36% in revenue and 136% in annual earnings. We expect growth to be further enhanced next year with the introduction of new sterilization services in Q4 2016.The new business is expected to generate 20% increase in sales. Current sterilization services is also expected to grow.

Electron beam faced a slowdown in the last quarter, mainly from customers who had slower market demands. However cost savings measures undertaken successfully reduced the impact on the bottom line.

2014 SalesRM9.9m

PBTRM6.2m

ROE33%

2015 RM9.9mRM5.6m

- 10%23%

Lucenxia (M) Sdn. Bhd. (“Lucenxia”) has completed its extensive clinical evaluation exercise together with the Ministry of Health. The outcome was above all expectations. This encouraging result allows the company to bring forward its official launch of the Intellis Home Dialysis to Jan 2016. We are very pleased to have reached this important milestone, being the first company in South East Asia to operate in this service, potentially of significant scale. Rollout into regional countries will be done in phases over the next 3 years.

As the regional economies developed into higher income status, the prevalence of diabetes and other contributing factors has pushed the rate of increase in End Stage Renal Disease (ESRD) to higher than 10% a year, making it one of the fastest growing non communicable disease. The company has invested in education and knowledge dissemination among healthcare workers on the meaningful impact on quality of life that Intellis can offer.

Lucenxia is in a business with high sustainability and customer loyalty. We foresee a cautious start at the initial stage but expect exponential growth once patients’ acceptance and confidence level increases and by higher budgetary allocations from funding sources now that the rollout is approved.

Being the only full service home dialysis provider with on-line patient monitoring and day / night dialysis capability, we are poised to change the landscape of dialysis in the country and around us.

On behalf of the Board, we would like to take this opportunity to thank all our customer, suppliers, business partners and shareholders for being with us throughout this journey. We are here today because of your faith and confidence in us, that once again allows us to reach greater heights year after year. We would also like to thank the management teams and employees for their tireless commitment towards achieving the Group’s goals and aspirations. We look forward to another successful year ahead with several new initiatives planned.



Standing from left to right:

Dato’ Dr. Norraesah Binti Haji MohamadToh Seng ThongKwek Siew Leng

Sitting from left to right:

Edmond Cheah Swee LengLow Chin Guan


Directors’ Profiles

Standing from left to right:

Dato’ Dr. Norraesah Binti Haji MohamadToh Seng ThongKwek Siew Leng

Sitting from left to right:

Edmond Cheah Swee LengLow Chin Guan


Directors’ Profilescont’d

EDMOND CHEAH SWEE LENGChairman, Senior Independent Non-Executive Director

Mr. Edmond Cheah Swee Leng, aged 61, a Malaysian, was appointed to the Board of Adventa Berhad on 9 August 2004 and is presently the Chairman of the Company. His last re-election as a director was on 24 April 2014. He is a member of the Audit Committee and Chairman of the Remuneration Committee and Nomination Committee.

He is a Chartered Accountant by profession and a member of the Malaysian Institute of Accountants and Association of Chartered Accountants, England and Wales. He is also a certified financial planner. His professional experience has been in the fields of audit, merchant banking, corporate & financial advising, portfolio & investment management, unit trust management and financial planning.

His career started with a professional accounting firm in London where he was an Audit Manager. He was the manager in charge of Portfolio Investment in a merchant bank in Malaysia and subsequently in charge of the corporate and planning division in a public listed company. Mr. Cheah was the Chief Executive Officer/Executive Director and a member of the Investment Committee of Public Mutual Fund Berhad, the largest private unit trust management company in Malaysia.

He was also a council member and Chairman of the Secretariat of the Federation of Investment Managers Malaysia (FIMM), and is a former Task Force Member on Islamic Finance for Labuan International Offshore Financial Centre (LOFSA), and a former member on the Securities Market Consultation Panel in Bursa Malaysia Securities Berhad.

He attended all four (4) Board Meetings held during the financial year ended 31 October 2015.

Mr. Cheah sits on the Board of Nylex Malaysia Berhad, Ancom Berhad and Ancom Logictics Berhad, all of which are listed on Bursa Malaysia Securities Berhad. He is also an Investment Committee Member and Director of MAAKL Mutual Berhad.

He does not have any family relationship with any other director and/or substantial shareholder of the Company nor any conflict of interest in any business arrangement involving the Company.

He has no convictions for any offence within the past ten (10) years.


Mr. Low Chin Guan, aged 56, a Malaysian, was appointed to the Board of Adventa Berhad on 12 April 2004 and is presently the Managing Director of the Company. His last re-election as a director was on 29 April 2013. He is also a member of the Remuneration Committee.

He graduated as a Civil Engineer from the University of Manchester Institute of Science and Technology (UMIST), United Kingdom.

Mr. Low founded the initial subsidiary of the Group in 1988. He has years of experience in project management, operations of manufacturing and assembly plants, financial control, strategic planning and marketing. In 2004, he formed Adventa Berhad to hold the various companies and manufacturing facilities under a single group management.

He now leads the Group in the areas of strategic planning, business development, investments, acquisitions and key personnel recruitment. He is also actively involved in product development, particularly in technological directions.


Mr. Low does not hold directorships in any other public listed company. He is the son of Madam Wong Koon Mei @ Wong Kwan Mooi and the brother of Ms. Low Lea Kwan, who are substantial shareholders of the Company. He does not have any family relationship with any other director nor any conflict of interest in any business arrangement involving the Company, except as disclosed in the Financial Statements.

He has no convictions for any offence within the past ten (10) years.


Directors’ Profilescont’d


Ms. Kwek Siew Leng, aged 49, a Malaysian, was appointed to the Board of Adventa Berhad on 12 April 2004 and is presently an Executive Director of the Company. Her last re-election as a director was on 21 April 2015.

She is an Associate Member of the Chartered Institute of Management Accountants (CIMA) and a Chartered Accountant with the Malaysian Institute of Accountants (MIA). She has senior operations experience in audit and accounting prior to joining the Adventa Bhd group. Her prior employment in public practice includes stints in statutory and regulatory reporting, financial planning, budgeting and forecasting, taxation, managerial skills as well as system development in various fields.

She joined one of the Company’s subsidiaries as Finance Manager in 2002 and assumed the position of Group Finance Manager of Adventa Berhad in 2003. She was subsequently promoted to Finance Director in 2004. She is now responsible for the overall management and operations of the accounts and finance departments.

She attended all four (4) Board Meetings held during the financial year ended 31 October 2015.

She does not hold directorships in any other public listed company. She does not have any family relationship with any other director and/or substantial shareholder of the Company, nor any conflict of interest in any business arrangement involving the Company.

She has no convictions for any offence within the past ten (10) years.


Mr. Toh Seng Thong, aged 57, a Malaysian, was appointed to the Board of Adventa Berhad on 10 May 2004. His last re-election as a director was on 24 April 2014. He is the Chairman of the Audit Committee and a member of the Remuneration Committee and Nomination Committee. He graduated with a Bachelor of Commerce (Accounting) degree from the University of Canterbury, New Zealand in 1981. He is a Chartered Accountant by profession and a member of the Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants, New Zealand Institute of Chartered Accountants, a Fellow member of the Malaysian Institute of Taxation and an Associate member of the Harvard Business School Alumni Club of Malaysia. Mr Toh has over 27 years experience in auditing, taxation and corporate advisory and financial advisory as a practicing Chartered Accountant of Malaysia. He started his own practice under Messrs S T Toh & Co in 1997.


He sits on the Board of Latitude Tree Holdings Berhad and Malaysian Genomics Resource Centre Berhad, companies listed on Bursa Malaysia Securities Berhad. Mr. Toh does not have any family relationship with any other director and/or substantial shareholder of the Company nor any conflict of interest in any business arrangement involving the Company. He has no convictions for any offence within the past ten (10) years.


Dato’ Dr. Norraesah Binti Haji Mohamad, aged 67, a Malaysian, was appointed to the Board of Adventa Berhad on 8 November 2005 as an Independent Non-Executive Director of the Company. Her last re-election as a director was on 21 April 2015. She is also a member of the Audit Committee.

Dato’ Dr. Norraesah holds a Doctorate Degree in Economics Science (International Economics and Finance) and a Masters in International Economics and Financial Relations from the University of Paris Pantheon-Sorbonne, France.

She has more than 44 years of working experience in banking, consultancy and international trade and commerce. From 1972 to 1985, she worked with the International Trade Division of the Ministry of Trade and Industry and the Ministry of Finance before joining the corporate sector.

From 1988 to 1990, Dato’ Dr. Norraesah was the Communications Manager of ESSO Production Malaysia Inc. and subsequently assumed the position of Managing Director with a consultant firm providing financial advisory services. She was also appointed as Chief Representative of Credit Lyonnais Bank in Malaysia and was the Chairman of Bank Rakyat from 2000 to 2003.

She attended all four (4) Board Meetings held during the financial year ended 31 October 2015.

Dato’ Dr. Norraesah currently also sits on the board of My E.G. Services Berhad, Malaysian Genomics Resource Centre Berhad and Utusan Melayu (Malaysia) Berhad, all listed on Bursa Malaysia Securities Berhad.

She does not have any family relationship with any other director and/or substantial shareholder of the Company, nor any conflict of interest in any business arrangement involving the Company.

She has no convictions for any offence within the past ten (10) years.


Corporate Governance Statement

The Board of Directors (“the Board”) is committed to its policy of managing the affairs of the Group with transparency, integrity and accountability by ensuring that a sound framework of best corporate practices is in place at all levels of the Group’s business and thus discharging its principal responsibility towards protecting and enhancing long-term shareholders’ value and investors’ interest.

The Board is pleased to report to the Shareholders that the best practices of good corporate governance having regard to the Recommendations stated under each Principle in the Malaysian Code on Corporate Governance 2012 (“the Code”) have generally been practiced within the Group throughout the financial year ended 31 October 2015.

ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT

1.1. Clear functions of the Board and Management

The Group acknowledges the pivotal role played by the Board in the stewardship of its direction and operations, and ultimately the enhancement of long-term shareholders’ value. To fulfill this role, the Board is responsible for the overall corporate governance of the Group, including its strategic direction, establishing goals for management and monitoring the achievement of these goals.

The Board has delegated the authority to achieve the corporate objectives to the Managing Director. The Managing Director remains accountable to the Board for the authority that is delegated to him, and for the performance of the Group.

The Board monitors the decisions and actions of the Managing Director and the performance of the Group to gain assurance that progress is being made towards the corporate objectives.

1.2. Duties and responsibilities

The Board has overall responsibility for corporate governance, strategic direction, formulation of policies and overseeing the investment and business of the Company. The Board’s responsibilities as outlined in the Board Charter include:

a) reviewing and adopting the business plan and overall strategic directions for the Company including establishing company goals and ensuring that the strategies are in place to achieve them;

b) establishing policies for strengthening the performance of the Company including ensuring that the Management is proactively seeking to build the business through innovation, initiative, technology, new products and the development of its business capital;

c) overseeing the conduct of the Company’s business to evaluate whether the business is being properly managed;

d) identifying principal risks and ensuring the implementation of appropriate systems to manage these risks;e) succession planning, including appointing, training, fixing the remuneration of and where appropriate,

replacing senior management members of the Group;f) developing and implementing an investor relations programme or shareholders communications policy for

the Company;g) reviewing the adequacy and integrity of the Company’s internal control systems and management information

systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;h) deciding on necessary steps to protect the Company’s financial position and the ability to meet its debts and

other obligations when they fall due, and ensuring that such steps are taken;i) ensuring that the Company’s financial statements are true and fair and conform to any applicable laws and/or

regulations; andj) ensuring that the Company has appropriate corporate governance structures in place including standards of

ethical behaviour, and promoting a culture of corporate responsibility.

The Board of Directors delegates specific responsibilities to the respective Committees of the Board namely the Audit Committee, Nomination Committee, Remuneration Committee and Risk Management Committee in order to enhance business and corporate efficiency and effectiveness. The Chairman of the respective Committees will brief the Board on the matters discussed at the Committee meetings and minutes of these meetings are circulated to the full Board.


Corporate Governance Statementcont’d

ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT cont’d

1.2. Duties and responsibilities cont’d

The Board Committees are entrusted with specific responsibilities to oversee the Company’s affairs, in accordance with their respective Terms of References and operating procedures and the Board receives reports of their proceedings and deliberations. The Chairman of the respective committees will report to the Board the outcome of these meetings and such reports are incorporated into the Board papers. These committees were formed in order to enhance business and operational efficiency as well as efficacy. The Board remains fully responsible for the direction and control of the Company and of the Group.

1.3 Directors’ Code of Business Conducts and Ethics

Code of Ethics

The Board has adopted a Code of Conduct for the Directors of the Company, which covers a wide range of business practices and procedures. The Code of Conduct describes the standards of business conduct and ethical behaviour for Directors in the performance and exercise of their responsibilities as Directors of the Company or when representing the Company.

Whistle Blowing

As part of the Company’s continuous efforts to ensure that good corporate governance practices are being adopted, the Company has established Whistle Blowing Policy to provide a clear line of communication and reporting of concerns for employees at all levels.

1.4 Strategies promoting sustainability

The Company seeks to be a good corporate citizen in everything that it does. In promoting the Company’s sustainability and Corporate Social Responsibility (“CSR”) which form part of the Company’s strategies, the Company aims to:-

a) Conduct every aspect of our business with honesty, integrity and openness, respecting human rights and the interests of our employees, customers and third parties;

b) Respect the legitimate interests of third parties with whom we have dealings in the course of our business;c) Maintain the highest standards of integrity.

The Company engages with the local community at a range of levels and its relationships with the various members of the local community are very important to the Company and are an essential part in the growth of the Company’s business. In line with the Company’s core values, the Company seeks to play a part in promoting socially inclusive policies and our community approach incorporates the following elements:

• Engagementwiththelocalcommunitiesinwhichweoperateonthequalityofourservicesandanychangesto those services;

• Workingwithlocalauthorities,businessesandotherinterestedpartiestoimprovequalityoflife;• Offeringemploymentopportunitiestoallsectorsofthecommunitythroughnon-discriminatorypoliciesand

promoting opportunities to disadvantaged and vulnerable groups;• Promotingengagementbetweenourstaffandthecommunity;• SupportinglocalcommunitygroupsandcharitiessuchastheMalaysianSocietyofNephrologyandhospitals,

in both cash and kind.

As the Company strives to achieve continual improvement in environmental performance, the Company is committed to:-

• Reducingpollutionandtheoverallimpactofouroperationsontheenvironment;• Complyingwith,andwherepossible,exceedingapplicablelegalrequirementsrelatingtotheenvironment;• Actively promoting improved energy efficiency within our business in order to reduce the Company’s

contribution to climate change.



ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT cont’d

1.5 Access to information and advice

The Board has full and timely access to information concerning the Company and the Group. The Board is provided with the relevant agenda and board papers in sufficient time, at least 7 days, prior to the meetings to enable them to obtain further explanation and clarification to facilitate informed decision-making. The Board papers include reports on the Group’s financial, operational and corporate development.

The Board has unrestricted access to all information within the Company, whether as a full board or in their individual capacity, which is necessary for discharge of its responsibilities and may obtain independent professional advice at the Company’s expense in furtherance of their duties.

1.6 Qualified and competent Company Secretaries

The Board is supported by a suitably qualified and competent Company Secretary and has access to the advice and services of the Company Secretary, who is responsible to ensure that the Board meeting procedures are followed and the applicable statutory and regulatory requirements are complied with.

The Board is regularly updated and advised by the Company Secretaries who are qualified, experienced and competent on new statutory and regulatory requirements, and the resultant implications to the Company and Directors in relation to their duties and responsibilities. The Company Secretaries attend all Board and Board Committees meetings and ensure that meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are taken and maintained accordingly.

The removal of Company Secretaries, if any, is a matter for the Board, as a whole, to decide. Every Director has unhindered access to the advice and services of the Company Secretaries.

1.7 Board Charter

The Board has adopted a Board Charter which provides guiding principles for the Board to achieve the vision and mission of the Company and serves as a reference point for the Board’s activities. In the Board Charter, the Board has established a formal schedule of matters reserved to the Board for its deliberation and decision in order to enhance the delineation of roles between the Board and management.

The Board will periodically review this Board Charter from time to time to ensure it remains consistent with the Board’s objectives and responsibilities and any new regulations that may have an impact on the discharge of the Board’s responsibilities. The Board Charter is available in the Company’s website.

The Board also recognises the pivotal role of the independent directors in corporate accountability as they provide unbiased and independent views, advice and judgment. Mr. Edmond Cheah Swee Leng has been identified as the Senior Independent Non-Executive Director of the Board to whom concerns may be conveyed.

1.8 Succession Planning

The Board views succession planning as an integral part of ensuring business continuity especially during challenging times and has taken steps to identity suitable talents within and without the company for training and promotion into senior positions.

Periodic reviews were undertaken to assess suitability based on potential candidates’ capability, experience and qualification taking into account the business needs of the company.


STRENGTHEN COMPOSITION OF THE BOARD

2.1 Nomination Committee

The Board has established a Nomination Committee, consisting of two (2) Directors who are Independent Non-Executive Directors of the Company.

The principal objectives of the Nomination Committee in line with its Terms of Reference are:

• ToassisttheBoardofDirectorsintheirresponsibilitiesinnominatingnewnomineestotheBoardofDirectors.• ToassesstheperformanceoftheDirectorsoftheCompanyonanon-goingbasis.

The Nomination Committee overseas matters relating to the nomination of new Directors, annually reviews the required mix of skills, experience, independence, assessment of Independent Directors, reviews succession plans and boardroom diversity, overseas training courses for Directors and other requisite qualities of Directors and also conducts an annual assessment of the effectiveness of the Board as a whole, its Committees and the contribution of each individual Director.

The members of the Nomination Committee during the financial year are as follows:-

Chairman : Mr. Edmond Cheah Swee Leng Senior Independent Non-Executive Director Member : Mr. Toh Seng Thong Independent Non-Executive Director

The Nomination Committee may meet at least once a year or more frequently as deemed necessary. During the financial year ended 31 October 2015, the Committee had one (1) meeting and details of attendance of each committee member is as follows:

Name of DirectorsNo. of meetings

attended/held %

Mr. Edmond Cheah Swee Leng 1/1 100

Mr. Toh Seng Thong 1/1 100

2.2 Develop, maintain and review criteria for recruitment processes and annual assessment of Directors

Appointment Process

The Board, through the Nomination Committee’s annual appraisal, believes that the current composition of the Board brings the required mix of skills and core competencies required for the Board to discharge its duties effectively.

The Nomination Committee is also responsible for making recommendations to the Board on the suitability of candidates nominated for appointment to the Board and Board Committees. A formal and transparent procedures for appointment of directors are set out in the Terms of Reference of the Nomination Committee.

The decision as to who should be appointed is the responsibility of the full Board after considering the recommendations of the Committee. The Company Secretaries will ensure that all appointments are properly made; all the necessary information is obtained as well as all legal and regulatory obligations are met.

Re-election of Directors

Any Director appointed during the year is required under the Company’s Articles of Association to retire and seek re-election by the shareholders at the following Annual General Meeting (“AGM”) immediately after their appointment. The Articles also require that one-third of the Directors including the Managing Director retire by rotation and seek re-election at each AGM and that each Director shall submit himself/herself for re-election at least once in every three (3) years.

The Directors to retire from office at the forthcoming AGM are Mr Low Chin Guan and Mr. Toh Seng Thong.




STRENGTHEN COMPOSITION OF THE BOARD cont’d

2.2 Develop, maintain and review criteria for recruitment processes and annual assessment of Directors cont’d

Board Evaluation

The Board regularly evaluates its performance and the governance processes that support the Board’s work with the aim of improving individual contributions, effectiveness of the Board and its committees and the Group’s performance.

During the financial year under review, the Nomination Committee had reviewed:-

• theeffectivenessof theboardasawholeandof thecommitteesof theBoardand thecontributionandperformance of each individual Director;

• theindependenceoftheindependentDirectors;• recommendedtrainingneedforDirectors;and• theDirectorswhoaresubjecttoretirementbyrotationattheforthcomingAnnualGeneralMeeting(“AGM”),

and are eligible for re-election. The effectiveness of the Board is assessed in the areas of Board mix, composition and governance, quality of

monitoring and decision-making as well as Board responsibilities. The effectiveness of the committees of the Board are assessed in terms of composition and governance, skills and competencies, and duties and responsibilities in accordance with their respective Terms of Reference. The evaluation process also involved a self and peer review, where the Directors will assess their own performance and that of their fellow Directors.

Gender Diversity

The Board is presently of the view that there is no necessity yet to fix a specific gender diversity policy as the Board has two (2) female directors. The appointment of any Director(s) should be based on their merit, qualification and working experience.

2.3 Remuneration policies and procedures

Remuneration committee

The members of the Remuneration Committee consist of two (2) Non-Executive Directors and one (1) Executive Director and meet as and when required.

The principal function of the Remuneration Committee is to assist the Board in their responsibilities in assessing the remuneration packages of the Executive Directors.

The Remuneration Committee oversees matters relating to the review and assessment of the remuneration packages of the executive directors in all forms, with or without other independent professional advice or other outside advice, ensure the levels of remuneration be sufficiently attractive and be able to retain directors needed to run the Company successfully, structure the component parts of remuneration so as to link rewards to corporate and individual performance and to assess the needs of the Company for talent at Board level at a particular time.

The members of the Remuneration Committee shall comprise wholly or mainly of Non-Executive Directors. The current members of the Remuneration Committee are:

Chairman : Mr. Edmond Cheah Swee Leng Senior Independent Non-Executive Director Members : Mr. Toh Seng Thong Independent Non-Executive Director Mr. Low Chin Guan Managing Director



STRENGTHEN COMPOSITION OF THE BOARD cont’d

2.3 Remuneration policies and procedures cont’d

Remuneration committee cont’d

The Remuneration Committee may meet at least once a year or more frequently as deemed necessary. During the financial year ended 31 October 2015, the Committee had one (1) meeting and details of attendance of each Committee member is as follows:

Name of DirectorsNo. of meetings attended/held %



Mr. Low Chin Guan 1/1 100

During the financial year under review, the Remuneration Committee has deliberated on the following:

• TheremunerationpackagesoftheExecutiveDirectors

Directors’ Remuneration

The objective of the Company’s policy on Directors’ remuneration is to ensure that the level of remuneration is sufficient to attract and retain high profile Directors with a wealth of industry experience.

The aggregate Directors’ remuneration paid or payable or otherwise made to all Directors of the Company who served during the financial year are shown as follows:-

Category Fees SalariesOther

Emoluments Total

RM RM RM RM

Executive Directors 57,024 211,200 100,248 368,472

Non-Executive Directors 192,456 - - 192,456

The number of Directors whose total remuneration falls within the following bands is as follows:-

Range of Remuneration Executive DirectorsNon-Executive

Directors

RM50,001 - RM100,000 - 3

RM100,001 – RM150,000 1 -

RM200,001 – RM250,000 1 -

2.4 Audit Committee

The Audit Committee’s composition, duties & responsibilities, terms of reference and activities are set out on pages 23 to 27 of this Annual Report.



REINFORCE INDEPENDENCE

3.1 Annual Assessment of Independence

The Board recognises the importance of independence and objectivity in the decision-making process. The Independent Directors bring their respective knowledge and experience and provide independent judgement to the Board. The Board is committed in ensuring that Independent Directors are capable and willing to make decisions in the best interests of the Company and the shareholders free from interest or influence and are independent of the Management.

The Independent Directors namely, Mr Edmond Cheah Swee Leng, Mr Toh Seng Thong and Dato’ Dr. Norraesah Binti Haji Mohamad fulfilled the criteria of “Independence” as prescribed under the Main Market Listing Requirements (“MMLR”). The key criteria for the appointment of an Independent Director is one who is not a member of the management (a Non-Executive Director) and who is free of any business or other relationship which could interfere with the exercise of independent judgement or the ability to act in the best interests of the Company. The Board composition complies with the MMLR which requires that at least two (2) Directors or one-third (1/3) of the Board of the Company, whichever is the higher, to be Independent Directors.

3.2 Tenure of Independent Directors

The Board opts to deviate from Recommendation 3.2 of the Code which states that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an independent Director may continue to serve in the Board subject to the Director’s re-designation as a non-independent Director.

Both the Nomination Committee and the Board have assessed the independence of Mr. Edmond Cheah Swee Leng, Mr. Toh Seng Thong and Dato’ Dr. Norraesah Binti Haji Mohamad and are satisfied with the skills, contribution and independent judgment that the said Independent Non-Executive Directors bring to the Board in facilitating decision processes of the Company. The Board is of the view that even though the tenure of Mr. Edmond Cheah Swee Leng, Mr. Toh Seng Thong and Dato’ Dr. Norraesah Binti Haji Mohamad has exceeded nine (9) years, there are significant advantages to be gained from long-serving Directors who not only possess tremendous insight but also in-depth knowledge of the Company’s business and affairs.

Key justifications for retaining them as Independent Non-Executive Directors are as follows:-

l Mr. Edmond Cheah Swee Leng, Mr. Toh Seng Thong and Dato’ Dr. Norraesah Binti Haji Mohamad fulfill the criteria under the definition on Independent Director as stated in the Listing Requirements of Bursa Malaysia Securities Berhad and therefore, are able to bring independent and objective judgment to the Board;

l Mr. Edmond Cheah Swee Leng, Mr. Toh Seng Thong and Dato’ Dr. Norraesah Binti Haji Mohamad understand the Company’s business operations which enable them to contribute actively and effectively during deliberations or discussions at Audit Committee and Board meetings, as the case may be;

l A chartered accountant by profession, Mr. Edmond Cheah Swee Leng’s professional experience in the fields of audit, merchant banking, corporate and financial advising, portfolio and investment management, unit trust management and financial planning, would enable him to provide the Board and Board Committees, as the case may be, with pertinent and a diverse set of expertise, skills and competence;

l Mr. Toh Seng Thong’s experience of over 27 years in auditing, taxation and corporate advisory and financial advisory as a practicing Chartered Accountant of Malaysia would enable him to lead the Audit Committee and serve the Board effectively by providing invaluable insight into the Company’s business, thereby increasing his contribution to the Company; and

l Dato’ Dr. Norraesah Binti Haji Mohamad served the Government of Malaysia from 1972 to 1988 for a total of 16 years before leaving the public sector to join the private sector and her working experience of more than 44 years in banking, consultancy and international trade and commerce would enable her to contribute actively and effectively in expressing her views and in participating in deliberations and decision making of the Audit Committee and the Board.


REINFORCE INDEPENDENCE cont’d

3.3 Separation of position of the Chairman and Managing Director

There is a clear division of responsibility between the Chairman and the Group Managing Director to ensure that there is a balance of power and authority. The Chairman leads the Board and facilitates its work. He engages directly with the Group Managing Director to understand and oversee the strategy implementation and performance delivery. He is responsible for ensuring the processes of the Board are effective in carrying out its duties and responsibilities, including the timely provision of sufficient relevant information on financial and non-financial matters. The Chairman, in conjunction with the Managing Director and Company Secretary, sets agendas for the meetings of the Board that focus in strategic direction and performance of the Group. The Group Managing Director is responsible for the day to day management of the Group’s operations and business as well as implementation of the Board’s policies and decisions.

3.4 Board composition and balance

The Board has five (5) members comprising:-

Two (2) Executive Directors including one (1) Managing Director and three (3) Non-Executive Directors, including one (1) Senior Independent Non-Executive Chairman.

The Board composition is in compliance with Paragraph 15.02(1) of the MMLR of Bursa Malaysia Securities Berhad (“Bursa Securities”) and Recommendation 3.4 of the Code, wherein it states that the positions of Chairman and Chief Executive Officer (in this case, the Managing Director) should be held by different individuals, and the Chairman must be a non-executive member of the Board.

The Board members have a wide range of business, financial and technical experience. The mixed skills and experiences are vital for the successful direction of the Group. A brief profile of each Director is presented on pages 6 to 8 of this Annual Report.

FOSTER COMMITMENT

4.1 Time Commitment

The Board meets on a quarterly basis and additionally as required. The general agenda of the meetings includes discussion over minutes of previous meetings, quarterly financial results of the Group and any other issues requiring the Board’s deliberation and approval. The agenda for each Board meeting is circulated to all the Directors for their perusal prior to the convening of each meeting to enable Directors to obtain further clarifications/explanations prior to the meeting to ensure smooth proceeding of each meeting. The proceedings and resolutions reached at each Board meeting are minuted and signed by Chairman of the meeting.

Besides Board meetings, the Board exercises control on matters that require Board’s deliberation and approval through circulation of Directors’ Resolutions.

The Board held four (4) meetings during the financial year.

Record of each Director’s meeting attendance during the year under review is set out below:-

Name of DirectorsNo. of meetings attended/held %


Mr. Low Chin Guan 4/4 100

Ms. Kwek Siew Leng 4/4 100


Dato’ Dr. Norraesah Binti Haji Mohamad 4/4 100




FOSTER COMMITMENT cont’d

4.1 Time Commitment cont’d

Time Commitment and Protocol for accepting new directorships

The Board is satisfied with the level of time commitment extended by the Directors in fulfilling their roles and responsibilities as Directors of the Company. This is evidenced by the attendance record of the Directors at Board meetings.

Directors are expected to have the relevant expertise in order to contribute positively to the Company’s performance and to give sufficient time and attention to carry out their responsibilities to the Company and Group. The Board obtains this commitment from its new members at the time of appointment. The Board has established policies and procedures where a Director should notify the Chairman officially, before accepting any new directorship from any other company and the notification shall set out the expectation and an indication of time commitment that will be spent on the new appointment. This is so that Directors are able to devote sufficient time commitment to their roles and responsibilities as Directors of the Company. Any Board member shall not hold more than five (5) directorships in listed companies at any one time.

4.2 Directors’ Training

All the Board members have attended the Mandatory Accreditation Programme (“MAP”) as required by the MMLR.

There continues to be an awareness of the importance and benefits of attending and participating in training and continuing education programmes aimed at enhancing the Directors’ knowledge, skills and level of contribution to the company.

During the financial year under review, the directors attended the following training:-

1) Mr Edmond Cheah Swee Leng

Capital Market Director Programme for Fund Management (Modules 1, 2B, 3 & 4) organised by the Securities Industry Development Corporation on 31 July 2015

2) Mr Low Chin Guan

In-house training

3) Ms Kwek Siew Leng

OECD/G20 Base Erosion and Profit Shifting Project organised by Deloitte Malaysia In-house training

4) Mr Toh Seng Thong

National Tax Conference 2014 organised by Inland Revenue Board on 12 November 2014 Audit Committee Conference 2015 organised by Institute of Internal Auditors on 24 March 2015 Directors Corporate Governance Series: Building Effective Finance Function by Bursa Malaysia on 10

August 2015

5) Dato’ Dr Norraesah Binti Haji Mohamad

11th World Islamic Economic Forum – 2015 organised by WIEF Foundation on 3 – 5 November 2015



UPHOLD INTERGRITY IN FINANCIAL REPORTING

5.1 Compliance with applicable financial reporting standards

In presenting the annual audited financial statements and quarterly announcement of results to shareholders, the Directors aim to present a balanced and understandable assessment of the Group’s position and prospects.

The Audit Committee assists the Board by reviewing the information to be disclosed in the financial statements, to ensure completeness, accuracy, adequacy and compliance with applicable financial reporting standards. The composition, summary of activities and terms of reference of the Audit Committee can be found in the Audit Committee Report on pages 23 to 27 of this Annual Report.

The Statement of Directors’ Responsibility in respect of the Audited Financial Statements pursuant to paragraph 15.26(a) of the MMLR and pursuant to the Statement of Directors’ Responsibility of the Companies Act 1965 is set out on page 30 of this Annual Report.

5.2 Assessment of suitability and independence of external auditors

Through the Audit Committee, the Company has established a transparent and appropriate relationship with the Group’s External Auditors. From time to time, the Auditors highlighted to the Audit Committee and the Board on matters that require the Board’s attention.

The external auditors provide mainly audit-related services to the Company. Due to the familiarity of the Company, the external auditors also undertake certain non-audit services such as regulatory reviews and reporting and other services.

A summary of the activities of the Audit Committee during the year is set out in the Audit Committee Report on pages 23 and 27 of this Annual Report.

RECOGNISE AND MANAGE RISKS

6.1 Sound framework to manage risks

The Board has ultimate responsibility for reviewing the Company’s risks, approving the risk management framework and policy and overseeing the Company’s strategic risk management and internal control framework.

The Company has in place an on-going process for identifying, evaluating and managing significant risks that may affect the achievement of the business objective of the Group. The Board through the audit Committee and Risk Management Committee reviews the key risks identified on a regular basis to ensure proper management of risks and that measures are taken to mitigate any weaknesses in the control environment.

In addition, the Company developed its Risk Management Policy and Procedure Document with an embedded Enterprise Risk Management (“ERM”) framework.

The ERM framework is designed to:-

• establishthecontextforanembeddedERMframeworkwithintheGroup;• formalizetheERMfunctionsacrosstheGroup;• sensitizestaffmorestronglytoriskidentification,measurement,control,ongoingmonitoring,responsibilities

and accountabilities;• coordinateandstandardizetheunderstandingandapplicationofERMwithintheGroup;and• provecompliancebytheBoardoftheCompanywithitsorganizationalobligationsanddutiesofcareand

diligence in accordance with the Code via a structured documentation system.



RECOGNISE AND MANAGE RISKS

6.1 Sound framework to manage risks

The RMC comprises the following members:-

Chairperson : Ms. Kwek Siew Leng

Members : Mr. Daniel Peh : Mr. Choy Wah Wei : Mr. Robert Hill

The key features of the Risk Management framework are set out in the Statement of Risk Management and Internal Control of the Company on page 28 to 29 of this Annual Report.

6.2 Internal audit function

The Board has established an internal audit function within the Company, which is led by the out-sourced Internal Auditor, PKF Advisory Sdn Bhd, who reports directly to the Audit Committee.

Details of the Company’s internal control system and framework as set out in the Statement on Risk Management and Internal Control together with the Audit Committee Report of this Annual Report.

ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

7.1 Corporate Disclosure Policy

Information Disclosure

The Board has in place a policy to ensure disclosure of information is in accordance with the disclosure requirements under the MMLR and other applicable laws.

7.2 Leverage on information technology for effective dissemination of information

The Group maintains a website at www.adventa.com.my where shareholders as well as members of the public are invited to access the latest information on the Group. Alternatively, they may obtain the Group’s latest Annual Report and announcements via the Bursa Securities website at www.bursamalaysia.com.my. The Company will upload the internal corporate policies in the Corporate Governance section at the Company’s website in due course.

Information is disseminated via the Company’s annual reports, circulars to shareholders, quarterly financial results, press releases and various announcements made from time to time. The Policy on Corporate Communications and Disclosure adopted by the Company is to ensure that the Company has in place efficient procedures for the management of information which at the same time, will promote accountability in relation to the disclosure of material information as well as to build good investor relations with the investing public that inspires trust and confidence.

Shareholders and other interested parties may contact the Executive Director, to address any concerns by writing or via telephone or facsimile as follows:-

Address : Adventa Berhad No 21, Jalan Tandang 51/205A, Seksyen 51, 46050 Petaling Jaya, Selangor Darul Ehsan, Malaysia

Tel : 603-7772 9321 Fax : 603-7772 9821 Website : www.adventa.com.my


STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

8.1 Encourage shareholder participation at general meetings

The Board fully recognises the rights of shareholders and encourages them to exercise of their rights at the Company’s AGM.

It has also been the Company’s practice to send the Notice of the AGM and related papers to shareholders at least twenty-one (21) days before the meeting. The date, venue and time of these meetings are determined to provide the maximum opportunity for as many shareholders as possible to attend and participate either in person, by corporate representative or by proxy.

8.2 Encourage poll voting

The Board supports the use of poll votes to ensure a fair voting process. At the Eleventh AGM, the Chairman reminded the attending shareholders of their right to demand for poll voting. Nonetheless, no request for poll voting was received during the AGM. The Board would consider employing electronic means for poll votes for substantive resolutions in future general meetings.

8.3 Communication with Shareholders and Investors

The Company recognises the importance of keeping shareholders and investors informed of the Group’s business and corporate developments.

The AGM and Extraordinary General Meeting remains the principal forum for dialogue with shareholders where they may seek clarifications on the Group’s businesses. Shareholders are given reasonable time to ask questions pertaining to issues in the Annual Report, corporate developments on the business of the Group and resolutions proposed and to vote on all resolutions proposed. Shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. Those unable to attend are allowed to appoint proxies to attend and vote on their behalf. During the meeting, the Managing Director and the Executive Directors are prepared to provide responses to queries and to receive feedback from the shareholders.

External auditors are also present to provide their professional and independent clarification on issues of concern raised by the shareholders, if any.

The importance of keeping shareholders informed of developments concerning the Group is high on the agenda.

The shareholders are kept abreast of all important developments concerning the Group through regular and timely dissemination of information via quarterly financial announcements through Bursa Securities website, distribution of annual report and various other announcements made during the year. These will enable the shareholders, investors and members of public to have an overview of the Group’s performance and hence, will enable them to make any informed investment decision relating to the Group.

The Company’s website, www.adventa.com.my, provides an avenue for information, such as dedicated sections on corporate information, including financial information and announcements. The website is continuously updated to ensure that the information contained within is correct.



OTHER INFORMATION PURSUANT TO THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

1. Utilisation of Proceeds

The total gross proceeds of RM61.11 million from Proposed Disposal (after the Proposed Distribution) shall be utilised in the following manner:

Purpose

Estimated time

frame for utilisation

from completion

of the Proposed Disposal Amount

Reclassification Amount

Amount utilised as at 31.10.2015

Balance not utilised as at 31.10.2015

RM’000 RM’000 RM’000 RM’000

Payment for the purchase consideration of acquisition of Electron Beam Sdn. Bhd.

Within 1 month

9,000 - 9,000 -

Working capital for Sun Healthcare (M) Sdn. Bhd.

Within 12 months

12,000 - 12,000 -

Working capital for Electron Beam Sdn. Bhd.

Within 12 months

5,000 - 5,000 -

Working capital for Lucenxia (M) Sdn. Bhd.

Within 24 months

20,000 12,614# 32,614 -

Future business expansion opportunities

Within 24 months

12,614 (12,614)# - -

Estimated expenses in relation to the Proposals

Within 1 month

2,500 - 2,500 -

61,114 - 61,114 -

# The funds allocated for future business expansion opportunities is re-allocated to Lucenxia (M) Sdn. Bhd. as working capital in view of the trials still in progress and further investment needed in patient care education and training into rural region.

2. Recurrent Related Party Transactions of Revenue Nature

At the Annual General Meeting held on 21 April 2015, the Company obtained a Shareholders’ Mandate to allow the Group to enter into recurrent related party transactions of a revenue or trading nature.

In accordance with Section 3.1.5 of Practice Note 12 of the Bursa Securities Berhad Listing Requirements, the detail of recurrent related party transactions conducted pursuant to the Shareholders’ Mandate are disclosed as follows:

Related Party

Interest Director/Interested Major Shareholder Nature of Transaction

Value of Transactions from

21 April 2015 up to 29 February 2016

RM’000

Aspion Group Mr Low Chin Guan (a) Purchases of gloves from the Aspion Group 12,726

(b) Provision of sterilisation and warehouse and handling services to the Aspion Group

5,845

(c) Sales of non-gloves products to the Aspion Group

96




OTHER INFORMATION PURSUANT TO THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD cont’d

3. Share Buy-Back

The Company did not purchase any of its own shares during the financial year under review.

4. Depository Receipt Programme

The Company did not sponsor any depository receipt programme during the financial year under review.

5. Imposition of Sanctions/Penalties

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

6. Non-Audit Fees

During the financial year under review, the Group’s non-audit fees paid or payable to the External Auditors amounted to RM7,000.

7. Variation in Results

There was no material variance between the results of the financial year and the unaudited results previously announced. The Company did not make any release on the profit estimate, forecast or projections for the financial year.

8. Profit Guarantee

There was no profit guarantee given by the Company during the financial year under review.

9. Material Contracts Involving Directors and Major Shareholders

There were no material contracts involving the Company and its subsidiaries with directors and major shareholders of the Company either still subsisting at the end of the financial year ended 31 October 2015 or entered into since the end of the previous financial year.

10. Contracts Relating to Loans

There were no material contracts relating to loans entered into by the Company involving Directors and/or substantial shareholders.

11. Options, Warrants or Convertible Securities

The Company did not issue any options, warrants or convertible securities during the year under review.


Audit Committee Report

INTRODUCTION

The Board of Directors of the Company (the “Board”) is pleased to present the report of the Audit Committee for the financial year ended 31 October 2015.

A. MEMBERSHIP

The current members of the Audit Committee are:

Chairman : Mr. Toh Seng Thong Independent Non-Executive Director Members : Mr. Edmond Cheah Swee Leng Senior Independent Non-Executive Director Dato’ Dr. Norraesah Binti Haji Mohamad Independent Non-Executive Director

B. TERMS OF REFERENCE

The Terms of Reference of the Committee are as follows:

1. Composition of Members

The Board shall appoint the Audit Committee members from amongst themselves, comprising no fewer than three (3) non-executive directors. The majority of the Audit Committee members shall be independent directors.

In this respect, the Board adopts the definition of “independent director” as defined under Bursa Malaysia Securities Berhad Main Market Listing Requirements (“MMLR”).

All members of the Audit Committee shall be financially literate and at least one (1) member of the Audit Committee must:-

(a) be a member of the Malaysian Institute of Accountants (“MIA”); or(b) if he is not a member of the MIA, he must have at least three (3) years of working experience and:

i. he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or

ii. he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

(c) fulfill such other requirements as prescribed or approved by Bursa Securities.

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

The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years to determine whether such Audit Committee and members have carried out their duties in accordance with their Terms of Reference.

Retirement and Resignation

If a member of the Audit Committee resigns, dies, or for any reason ceases to be a member resulting in non-compliance with the composition criteria as stated in paragraph 1 above, the Board shall within three (3) months of the event appoint such number of the new members as may be required to fill the vacancy.

2. Chairman

The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an Independent Director.

In the absence of the Chairman of the Audit Committee, the other members of the Audit Committee shall amongst themselves elect a Chairman who must be an Independent Director to chair the meeting.


Audit Committee Reportcont’d

B. TERMS OF REFERENCE cont’d

3. Secretary

The Company Secretary shall be the Secretary of the Audit Committee and as a reporting procedure, the Minutes shall be circulated to all members of the Board.

4. Meetings

The Audit Committee shall meet regularly, with due notice of issues to be discussed, and shall record its conclusions in discharging its duties and responsibilities. In addition, the Chairman may call for additional meetings at anytime at the Chairman’s discretion.

Upon the request of the External Auditors or the Internal Auditors (if any), the Chairman of the Audit Committee shall convene a meeting of the Audit Committee to consider any matter the auditors believe should be brought to the attention of the Directors or shareholders.

Notice of the Audit Committee meetings shall be given to all the Audit Committee members unless the Audit Committee waives such requirement.

The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as

the Chairman, the Chief Executive Officer, the Finance Director, the head of internal audit and the External Auditors in order to be kept informed of matters affecting the Company.

The Finance Director, the head of internal audit and a representative of the External Auditors should normally attend meetings. Other Board members and employees may attend meetings upon the invitation of the Audit Committee. The Audit Committee shall be able to convene meetings with the External Auditors, the Internal Auditors, or both, without executive Board members or employees present whenever deemed necessary and at least twice a year with the External Auditors.

Questions arising at any meeting of the Audit Committee shall be decided by a majority of votes of the members present, and in the case of equality of votes, the Chairman of the Audit Committee shall have a second or casting vote.

5. Minutes

Minutes of each meeting shall be kept at the registered office and distributed to each member of the Audit Committee and also to the other members of the Board. The Audit Committee shall report on each meeting to the Board.

The minutes of the Audit Committee meeting shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting.

6. Quorum

The quorum for the Audit Committee meeting shall be the majority of members present whom must be Independent Directors.

7. Objectives

The principal objectives of the Audit Committee are to assist the Board in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the holding company and each of its subsidiaries. In addition, the Audit Committee shall:

(a) evaluate the quality of the audits performed by the Internal and External Auditors;(b) provide assurance that the financial information presented by management is relevant, reliable and

timely;(c) oversee compliance with laws and regulations and observance of proper codes of conduct; and(d) determine the quality, adequacy and effectiveness of the Group’s control environment.




8. Authority

The Audit Committee shall, in accordance with a procedure to be determined by the Board and at the expense of the Company,

(a) have explicit authority to investigate any matter within its Terms of Reference, the resources to do so, and full access to information. All employees shall be directed to co-operate as requested by members of the Audit Committee;

(b) have full and unlimited/unrestricted access to all information and documents/resources which are required to perform its duties as well as to the Internal and External Auditors and senior management of the Company and Group;

(c) obtain independent professional or other advice and to invite outsiders with relevant experience to attend, if necessary;

(d) have direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity (if any); and

(e) where the Audit Committee is of the view that the matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the MMLR, the Audit Committee shall promptly report such matter to Bursa Securities.

9. Duties and Responsibilities

The duties and responsibilities of the Audit Committee are as follows:

(a) To consider the appointment of the External Auditors, the audit fee and any question of resignation or dismissal, any letter of resignation from the External Auditors and whether there is reason (supported by grounds) to believe that the External Auditors are not suitable for re-appointment before making recommendations to the Board of Directors and recommend the nomination of a person or persons as External Auditors;

(b) To discuss with the External Auditors before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;

(c) To review with the External Auditors his evaluation of the system of internal controls and his audit report;

(d) To review the quarterly and year-end financial statements of the Board, focusing particularly on:-

• anychangeinaccountingpoliciesandpractices;• significantadjustmentsarisingfromtheaudit;• thegoingconcernassumption;and• compliancewithaccountingstandardsandotherlegalrequirements.

(e) To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss (in the absence of management, where necessary);

(f) To review the External Auditors’ management letter and management’s response;(g) To review the adequacy and effectiveness of risk management, internal control and governance systems

relating to the accounting and reporting practices of the Company;(h) To do the following, in relation to the internal audit function:-

• ensurethattheinternalauditfunctionisindependentoftheactivitiesitauditsandtheInternalAuditors shall report directly to the Audit Committee. The head of internal audit shall be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control and governance processes within the Company;

• reviewtheadequacyofthescope,functionsandcompetencyandresourcesoftheinternalauditfunction, and that it has the necessary authority to carry out its work;

• review the internal audit programmes and results of the internal audit process and, wherenecessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;

• reviewanyappraisalorassessmentoftheperformanceofmembersoftheinternalauditfunction;• approveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunction;

and• takecognizanceofresignationsof internalauditstaffmembersandprovidetheresigningstaff

member an opportunity to submit his/her reasons for resigning;



9. Duties and Responsibilities cont’d

The duties and responsibilities of the Audit Committee are as follows: cont’d

(i) To consider any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(j) To report its findings on the financial and management performance and other material matters to the Board;

(k) To consider the major findings of internal investigations and management’s response;(l) To verify the allocation of employees’ share option scheme (“ESOS”) in compliance with the criteria as

stipulated in the by-laws of ESOS of the Company, if any;(m) To determine the remit of the internal audit function;(n) To establish policies governing the circumstances under which contracts for the provision of non-audit

services can be entered into and procedures that must be followed by the External Auditors;(o) To consider other topics as defined by the Board; and(p) To consider and examine such other matters as the Audit Committee considers appropriate.

C. MEETINGS OF THE AUDIT COMMITTEE

The Audit Committee met four (4) times during the financial year under review and details of attendance of each member are as follows:-

NameNo. of meetings attended/held

Toh Seng Thong – Chairman 4/4

Edmond Cheah Swee Leng 4/4

Dato’ Dr. Norraesah Binti Haji Mohamad 4/4

Representatives of management, the Internal Auditors and the External Auditors also attended the meetings at the invitation of the Committee.

D. SUMMARY OF ACTIVITIES

The Audit Committee met at scheduled times; with due notices of meetings issued, and with agendas planned so that issues raised in respect of financial statements were deliberated and discussed in a focused and detailed manner.

In line with the Terms of Reference of the Committee, the following activities were carried out during the financial year under review:-

• ReviewedandevaluatedthescopeofworksandauditplansoftheInternalandExternalAuditors;• Reviewedthequarterlyandyear-to-dateunauditedfinancialstatements,priortodeliberationandapproval

by the Board;• ReviewedtheAuditedFinancialStatementsoftheGroupandoftheCompanyandrecommendedforBoard’s

approval;• ReviewedanddiscussedtheExternalAuditors’auditreportandareasofconcern;• ReviewedanddiscussedtheExternalAuditors’managementletterandmanagement’sresponse;• Reviewedandassessedtheriskmanagementactivitiesofthegroup;• ReviewedtheInternalAuditors’reportspertainingtothestateofinternalcontrolonoperatingunitswithin

the Group and appraised the adequacy and effectiveness of management’s response in resolving the audit issues reported;



D. SUMMARY OF ACTIVITIES cont’d

In line with the Terms of Reference of the Committee, the following activities were carried out during the financial year under review:- cont’d

• ReviewedtheproposedauditfeesfortheInternalandExternalAuditorsinrespectoftheirauditoftheGroupfor the financial year;

• MetwiththeExternalAuditorstwiceduringtheyearwithoutthepresenceofanyexecutiveBoardmembersand employees of the Group;

• ReviewedthedraftCirculartoShareholdersinrelationtotheProposedRenewalofShareholders’MandateforRecurrent Related Party Transactions of a Revenue or Trading Nature and Statement of Risk Management and Internal Control for inclusion in the 2014 Annual Report, and recommended the same for Board’s approval;

• ReviewedrelatedpartytransactionsandtheadequacyoftheGroup’sproceduresandprocessesinidentifying,monitoring, reporting and reviewing related party transactions in a timely and orderly manner; and

• Notedemergingfinancial reporting issuespursuant to the introductionofnewaccounting standardsandadditional statutory and regulatory disclosure requirements.

E. INTERNAL AUDIT FUNCTION

The Group has in place an internal audit function whose principal responsibility is to undertake regular and systematic reviews of the internal control system so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively in the Group and the Company. The internal audit function reports directly to the Audit Committee to ensure its independent status within the Group.

The Audit Committee is assisted in discharging its duties and responsibilities with respect to the adequacy and integrity of the system of internal controls within the Group by an independent consulting firm, PKF Advisory Sdn. Bhd., to whom the internal audit function has been outsourced. The internal audits were performed using a risk based approach and focused on:-

• reviewingidentifiedhighriskareasforcompliancewithestablishedpolicies,procedures,rules,guidelines,laws and regulations;

• evaluatingtheadequacyofcontrolsforsafeguardingassets;and• identifyingbusinessriskswhichhavenotbeenappropriatelyaddressed.

The Internal Auditors carry out audit assignments based on an audit plan that is reviewed and approved by the Audit Committee. The reports of the audits undertaken were forwarded to the management for their attention and necessary action and then presented to the Audit Committee for deliberation.

During the financial year under review, the Internal Auditors undertook the following activities:-

• reviewedtheadequacyandintegrityoftheGroup’sinternalcontrolsystemsrelatingtotheFixedAssetandInventory Management of the Group;

• ascertainedinventoryreportsareaccurate,completeandtimely;• physicalcountsofstockstakenintheprescribedmannerandaccuratelyrecorded;• reviewedtheeffectivenessofdocumentcontrolsforkeysupportingprocedures;• ensuredassetsaretagged,inworkingconditionandsafeguarded;and• reportedtotheAuditCommitteeitsinternalauditfindingsandtheresponseandrectificationundertakenby

the management.

The professional fees incurred for the internal audit function in respect of financial year ended 31 October 2015 amounted to approximately RM 16,600.

This Audit Committee Report is made in accordance with a resolution of the Board dated 3 February 2016.



Statement on Risk Managementand Internal Control

INTRODUCTION

Pursuant to Paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”) and the Principles and Best Practices provisions relating to internal control provided in the Malaysian Code on Corporate Governance 2012 (“the MCCG 2012”), the Board of Directors (“the Board”) of listed issuers are required to include in their Annual Report a “Statement on the state of its Risk Management and Internal Control”. The following Statement on Risk Management and Internal Control has also been prepared in accordance with the “Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers”.

BOARD RESPONSIBILITIES

The Board affirms its overall responsibility for the Group’s system of internal control which includes the establishment of an appropriate control environment and risk management framework as well as reviewing its adequacy and integrity. Due to the limitations that are inherent in any internal control system, the Group’s system of internal control can only manage rather than eliminate the risk of failure to achieve business objectives and therefore can only provide reasonable and not absolute assurance against material misstatement, loss or fraud. Notwithstanding this, the Board requires that the procedures and controls in place are subject to regular review as part of an ongoing process for identifying, evaluating and managing the significant risks faced by the Group.

The Board has received assurance from the Managing Director, Finance Director and the management team of the Group that the Group’s risk management and internal control systems have been operating adequately and effectively, in all material aspects, during the financial year under review and up to the date of this Statement.

The Board has extended the responsibilities of the Audit Committee to include the role of reviewing and monitoring the effectiveness of the Group’s internal control system. The Audit Committee receives assurance reports from the Internal Auditors on findings from audits carried out at operating units, and the External Auditors on areas for improvement identified during the course of statutory audit. The Reports of the Audit Committee is set out on pages 23 to 27 of the Annual Report.

RISK MANAGEMENT FRAMEWORK

The oversight of the Group’s risk management process is the responsibility of the Managing Director who is assisted by the heads of department of the respective operating companies. During the year, the Group monitored significant risks and risk mitigation strategies on an ongoing basis through its management at the Risk Management Committee (“RMC”) meetings and Board meetings. Under the purview of the RMC, the respective heads of each operating subsidiary and department of the Group are empowered with the responsibility of managing their respective operations. Its functions include, inter alia:

• developingriskmanagementframework;• coordinatetheupdatingoftheriskprofile;• monitortheimplementationofactionplans;and• reviewandassesstheapplicabilityofthecontrolenvironmentinmitigatingrisk.

In view of a constantly changing environment and competitive landscape, the Board is committed in maintaining a system of internal control that comprises the following environment, key processes and monitoring systems:

• TheAuditCommittee,throughtheRMC,reviewstheadequacyandeffectivenessoftheGroup’sriskmanagementand internal control procedures as well as any internal control issues identified by the Internal and External Auditors;

• Anannualriskassessmentanalysisthatassiststhemanagementtocontinuouslyidentifysignificantrisksassociatedwith key processes within a changing business and operating environment;

• Anannualbudgetingprocessthatestablishesmonthlybudgetsforeachbusinessunitagainstwhichperformanceis monitored on an ongoing basis;

• Monthlybusinessreportsandmanagementaccountsaresubmittedbytherespectivebusinessunitsforreviewbysenior management;

• Disasterrecoveryplansincludingfirepreventionmonitoringprocess,adequateinsurancecoverageandcomputerIT monitoring process to help ensure the risk of system failure and outages is minimised; and

• Segregationofdutiesandlimitsofauthorityarepractisedtoensureaccountabilityandresponsibility.


Statement on Risk Managementand Internal Control

cont’d

INTERNAL AUDIT

The internal audit function adopts a risk-based approach and prepares its strategies and plans for Audit Committee’s approval prior to execution of internal audit assessments. Internal audit reviews the internal controls in the key activities of the Group’s businesses.

The internal audit team from PKF Advisory Sdn. Bhd. (“PKF”), the independent consulting firm to which the internal audit function has been outsourced, assesses the adequacy and integrity of the internal control system based on the scope of work approved by the Audit Committee and reports to the Audit Committee on its findings and recommendations for improvement. The Internal Auditor also reviews the extent to which its recommendations have been accepted and implemented by the Management. The Audit Committee reviews internal audit reports and management responses thereto and ensures significant findings especially control deficiencies are adequately addressed and rectified by the Management of the operating units concern. The Audit Committee reviews internal control matters and update the Board on significant issues for the Board’s attention and action.

The Internal Auditors, which report directly to the Audit Committee, conducts reviews on the adequacy and effectiveness of the Group’s system of internal controls that the management has put in place. These audits review the internal controls in the key activities of the Group’s business based on a 3-year detailed internal audit plan approved by the Audit Committee. Based on these audits, the Internal Auditors provide the Committee with annual reports highlighting observations, recommendations and management action plans to improve the system of internal control.

During the financial year ended 31 October 2015, the Audit Committee with the assistance of the external professional consulting firm, PKF, reviewed the adequacy and integrity of the Group’s internal control systems relating to the following processes:-

• Fixedassets;and• Inventory.

OTHER KEY ELEMENTS OF INTERNAL CONTROL

Apart from risk management and internal audit, the Group’s system of internal controls comprises the following key elements:-

• awelldefinedorganisationalstructurewithclearreportinglinesandaccountabilities;• clearlydefinedinternalpoliciesandproceduresforkeyprocessestoensurefullcompliancebyalloperatingunits

and to minimise operating risks;• aclosemonthlymonitoringandreviewoffinancialresultsandforecastsforalloperatingunitsbytheManaging

Director; and• clearreportingstructurestoensurepropermonitoringoftheGroup’soperationstogetherwithregularquarterly

reports which monitor the Group’s performance.

CONCLUSION

For the financial year under review and up to the date of approval of this Statement, the Board is of the view that the Group’s system of internal control and risk management is sound and adequate enough to safeguard the shareholders’ investments and the Group’s assets.

There was no material internal control failure which resulted in material losses or contingencies during the financial period under review. The Board and management will, when necessary, put in place appropriate actions to further enhance the Group’s system of internal control.

This statement was made in accordance with a resolution of the Board dated 3 February 2016 and has been duly reviewed by the External Auditors, pursuant to paragraph 15.23 of the Listing Requirements.


Responsibility StatementBy the Board of Directors

In preparing the annual financial statements of the Group and of the Company, the Directors are collectively responsible to ensure that these financial statements have been prepared to give a true and fair view of the state of affairs of the Group and the Company at the end of the financial year and the results and cash flows of the Group and the Company in accordance with applicable approved accounting standards in Malaysia, the provisions of the Companies Act 1965 and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

In preparing the financial statements for the financial year ended 31 October 2015 set out on pages 38 to 97 of this Annual Report, the Directors have applied appropriate accounting policies on a consistent basis and made judgements and estimates that are reasonable and prudent.

The Directors have responsibility for ensuring that proper accounting records are kept which disclose with reasonable accuracy the financial position of the Group and the Company and which enable them to ensure that the financial statements comply with the Companies Act 1965.

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

This statement is made in accordance with a resolution of the Board of Directors dated 3 February 2016.

32 Directors’ Report

35 Statement by Directors

35 Statutory Declaration

36 Independent Auditors’ Report

38 Statements of Comprehensive Income

39 Statements of Financial Position

41 Statements of Changes in Equity

43 Statements of Cash Flows

45 Notes to the Financial Statements

97 Supplementary Information

Financial Statements


Directors’ Report

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 October 2015.

PrinciPal activities

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are described in Note 14 to the financial statements.

There have been no significant changes in the nature of the principal activities during the financial year.

results

Group company

rM rM

Profit/(loss) net of tax 3,089,997 (117,291)

Profit/(loss) attributable to:

Owners of the parent 3,089,997 (117,291)

Non-controlling interest - -

3,089,997 (117,291)

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

DiviDenDs

No dividend has been paid or declared by the Company since the end of previous financial year. The directors do not recommend the payment of any dividend for the current financial year.

Directors

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Low Chin GuanKwek Siew LengToh Seng ThongEdmond Cheah Swee LengDato’ Dr. Norraesah Binti Haji Mohamad


Directors’ Reportcont’d

Directors’ benefits

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Notes 10 to the financial statements) by reason of a contract made by the Company or a related corporation with a director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in Note 26 to the financial statements.

Directors’ interests

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Company during the financial year were as follows:

number of ordinary shares of rM0.35 each

1.11.2014 acquired sold 31.10.2015

Direct interest

Low Chin Guan 58,446,552 - - 58,446,552

Kwek Siew Leng 1,000,000 - - 1,000,000

Toh Seng Thong 200,000 - - 200,000

Edmond Cheah Swee Leng 140,000 - - 140,000

Dato’ Dr. Norraesah Binti Haji Mohamad 140,000 - - 140,000

indirect interest

Low Chin Guan # 7,960,960 - - 7,960,960

# By virtue of shareholdings by his family members

Low Chin Guan, by virtue of his interest in shares of the Company is also deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest.

other statutory inforMation

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there were no known bad debts and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.


Directors’ Reportcont’d

other statutory inforMation cont’d

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) it necessary to write off any bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

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

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

auDitors

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 24 February 2016.

low chin Guan KweK siew lenG


We, Low Chin Guan and Kwek Siew Leng, being two of the directors of Adventa Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 38 to 96 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 October 2015 and of their financial performance and cash flows for the year then ended.

The information set out in Note 33 to the financial statements have been prepared in accordance with the 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. Signed on behalf of the Board in accordance with a resolution of the directors dated 24 February 2016.

low chin Guan KweK siew lenG

I, Kwek Siew Leng, being the director primarily responsible for the financial management of Adventa Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 38 to 97 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared bythe abovenamed Kwek Siew Lengat Kuala Lumpur in the Federal Territoryon 24 February 2016 KweK siew lenG Before me,

Statement by DirectorsPursuant to Section 169(15) of the Companies Act 1965

Statutory DeclarationPursuant to Section 169(16) of the Companies Act 1965


rePort on the financial stateMents We have audited the financial statements of Adventa Berhad, which comprise the statements of financial position as at 31 October 2015 of the Group and of the Company, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 38 to 96. Directors’ responsibility for the financial statements The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group and the Company as at 31 October 2015 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. Report on other legal and regulatory requirements In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the

Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

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

(c) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act.

Independent Auditors’ Reportto the members of Adventa Berhad(Incorporated in Malaysia)


Independent Auditors’ Reportto the members of Adventa Berhad

(Incorporated in Malaysia)cont’d

other rePortinG resPonsibilities The supplementary information set out in Note 33 on page 97 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. 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 This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

ernst & younG sanDra seGaran a/l MunianDy@Krishnan AF: 0039 No. 2882/01/17(J) Chartered Accountants Chartered Accountant

Kuantan, Pahang Darul Makmur, Malaysia Date: 24 February 2016


Group company

note 2015 2014 2015 2014

rM rM rM rM

Revenue 4 41,881,364 34,796,801 - 792,000

Cost of sales 5 (27,194,718) (19,408,685) - -

Gross profit 14,686,646 15,388,116 - 792,000

Other income 6 664,727 485,943 929,814 1,556,599

other items of expense

Administrative expenses (4,111,665) (3,800,353) (921,977) (927,317)

Selling and marketing expenses (3,703,362) (3,073,297) - -

Other operating expenses (1,700,693) (1,918,903) (95,485) (712,583)

Finance costs 7 (977,775) (434,533) - -

Profit/(loss) before tax 8 4,857,878 6,646,973 (87,648) 708,699

Income tax expense 11 (1,767,881) (2,183,267) (29,643) (422,764)

Profit/(loss) for the year, representing total comprehensive income/(loss) for the year 3,089,997 4,463,706 (117,291) 285,935

Profit/(loss) attributable to:

Owners of the parent 3,089,997 4,463,706 (117,291) 285,935

Non-controlling interest - - - -

3,089,997 4,463,706 (117,291) 285,935

total comprehensive income/(loss) attributable to:

Owners of the parent 3,089,997 4,463,706 (117,291) 285,935

Non-controlling interest - - - -

3,089,997 4,463,706 (117,291) 285,935

earnings per share attributable to owners of the parent (sen per share)

Basic 12 2.02 2.92

The accompanying accounting policies and explanatory information form an integral part of the financial statements.

Statements of Comprehensive IncomeFor the financial year ended 31 October 2015


Group company

note 2015 2014 2015 2014

rM rM rM rM

assets

non-current assets

Property, plant and equipment 13(a) 51,175,746 44,497,462 4,222 2,715

Investment property 13(b) - - - -

Investment in subsidiaries 14 - - 23,056,726 23,056,726

Intangible assets 15 28,759,910 18,178,362 - -

Deferred tax assets 16 1,805,060 3,216,213 226,721 47,000

Amounts due from subsidiaries 17 - - 25,196,785 41,756,370

81,740,716 65,892,037 48,484,454 64,862,811

current assets

Inventories 18 11,582,034 9,279,497 - -

Trade and other receivables 19 17,955,037 13,028,628 - -

Other current assets 20 387,605 2,690,695 8,454 2,793

Tax recoverable 14,156 - 12,137 -

Cash and bank balances 21 22,122,205 5,849,823 20,340,701 4,143,749

52,061,037 30,848,643 20,361,292 4,146,542

total assets 133,801,753 96,740,680 68,845,746 69,009,353

equity and liabilities

current liabilities

Trade and other payables 22 14,847,698 13,003,811 191,394 158,967

Income tax payables 19 104,649 - 78,743

Loans and borrowings 23 10,444,758 2,283,097 - -

25,292,475 15,391,557 191,394 237,710

non-current liabilities


total liabilities 53,379,300 19,408,224 191,394 237,710

net assets 80,422,453 77,332,456 68,654,352 68,771,643

Statements of Financial PositionAs at 31 October 2015


Group company

note 2015 2014 2015 2014

rM rM rM rM

equity attributable to owners of the parent

Share capital 24 53,475,020 53,475,020 53,475,020 53,475,020

Share premium 24 4,829,789 4,829,789 4,829,789 4,829,789

Retained earnings 25 22,117,644 19,027,647 10,349,543 10,466,834

total equity 80,422,453 77,332,456 68,654,352 68,771,643

total equity and liabilities 133,801,753 96,740,680 68,845,746 69,009,353


Statements of Financial PositionAs at 31 October 2015cont’d


attributable to owners of the parent

non-distributable Distributable

total equity

share capital

share premium

retained earnings

rM rM rM rM

2015

Group

Opening balance at 1 November 2014 77,332,456 53,475,020 4,829,789 19,027,647

Total comprehensive income 3,089,997 - - 3,089,997

Closing balance at 31 October 2015 80,422,453 53,475,020 4,829,789 22,117,644

2014

Group


Total comprehensive income 4,463,706 - - 4,463,706


Statements of Changes in EquityFor the financial year ended 31 October 2015


non-distributable Distributable

total equity

share capital

share premium

retained earnings

rM rM rM rM

2015

company


Total comprehensive loss (117,291) - - (117,291)


2014

company


Total comprehensive income 285,935 - - 285,935



Statements of Changes in EquityFor the financial year ended 31 October 2015cont’d


Group company

note 2015 2014 2015 2014

rM rM rM rM

operating activities

Profit/(loss) before tax 4,857,878 6,646,973 (87,648) 708,699

Adjustments for:

Depreciation of property, plant and equipment 8 1,641,982 1,293,986 1,548 802

Interest expense 7 977,775 434,533 - -

Fair value gain on derivatives - (34,379) - -

Loss on disposal of property, plant and equipment 297 - - -

Impairment loss on trade receivables 8 168,409 159,253 - -

Interest income 6 (336,231) (343,923) (929,814) (1,556,599)

Net gain on unrealised foreign exchange 8 (202,107) (3,678) - -

Property, plant and equipment written off 8 142 163,471 - -

Total adjustments 2,250,267 1,669,263 (928,266) (1,555,797)

Operating cash flows before changes in working capital 7,108,145 8,316,236 (1,015,914) (847,098)

Changes in working capital

Increase in inventories (2,302,537) (563,313) - -

(Increase)/decrease in trade and other receivables (4,929,582) (8,598,426) 16,559,585 (6,754,248)

Decrease/(increase) in other current assets 2,303,090 (1,511,479) (5,661) (673)

Increase/(decrease) in trade and other payables 1,673,049 (990,076) 32,426 49,088

Total changes in working capital (3,255,980) (11,663,294) 16,586,350 (6,705,833)

Cash flows from/(used in) operations 3,852,165 (3,347,058) 15,570,436 (7,552,931)

Interest paid (780,993) (434,533) - -

Income taxes refunded 13,217 - - -

Income taxes paid (488,731) (213,297) (300,243) (251,147)

net cash flows from/(used in) operating activities 2,595,658 (3,994,888) 15,270,193 (7,804,078)

Statements of Cash FlowsFor the financial year ended 31 October 2015


Group company

2015 2014 2015 2014

rM rM rM rM

investing activities

Additional investment in a subsidiary - - - (11,000,000)

Interest received 336,231 343,923 929,814 1,556,599

Payment for deferred development costs (10,581,548) (6,460,928) - -

Proceeds from disposal of property, plant and equipment 146,200 - - -

Purchase of property, plant and equipment (8,269,405) (2,450,403) (3,055) (1,628)

net cash flows (used in)/from investing activities (18,368,522) (8,567,408) 926,759 (9,445,029)

financing activities

Drawdown of loans and borrowings 40,954,408 339,610 - -

Repayment of loans and borrowings (8,920,088) (5,440,577) - -

net cash flows from/(used in) financing activities 32,034,320 (5,100,967) - -

net increase/(decrease) in cash and cash equivalents 16,261,456 (17,663,263) 16,196,952 (17,249,107)

effect of exchange rate changes on cash and cash equivalents 10,926 - - -

cash and cash equivalents at 1 november 5,849,823 23,513,086 4,143,749 21,392,856

cash and cash equivalents at 31 october (note 21) 22,122,205 5,849,823 20,340,701 4,143,749


Statements of Cash FlowsFor the financial year ended 31 October 2015cont’d


1. corPorate inforMation

Adventa Berhad (“the Company”) is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Bursa Malaysia Securities Berhad. The registered office of the Company is located at No. 21, Jalan Tandang 51/205A, Seksyen 51, 46050 Petaling Jaya, Selangor Darul Ehsan.

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are described in Note 14 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year.

2. suMMary of siGnificant accountinG Policies

2.1 basis of preparation The financial statements have been prepared in accordance with Malaysian Financial Reporting Standards

(“MFRS”) as issued by the Malaysian Accounting Standards Board (“MASB”), International Financial Reporting Standards (“IRFS”) as issued by the International Accounting Standards Board and the requirements of the Companies Act, 1965 in Malaysia.

The financial statements have also been prepared on a historical basis, unless otherwise indicated in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (“RM”).

2.2 changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year except as

follows:

On 1 November 2014, the Group and the Company adopted the following new and amended MFRS and IC Interpretations mandatory for annual financial periods beginning on or after 1 January 2014.

Description

effective for annual periods beginning on

or after

Amendments to MFRS 132: Financial Instrument: Presentation Offsetting Financial Assets and Financial Liabilities 1 January 2014

Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities 1 January 2014

Amendments to MFRS 136: Recoverable Amount Disclosures for Non-Financial Assets 1 January 2014

Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting 1 January 2014

Annual Improvements to MFRSs 2010-2012 Cycle 1 January 2014

Annual Improvements to MFRSs 2011-2013 Cycle 1 January 2014

Adoption of the above Amendments to MFRS and IC Interpretation did not have any significant effect on the financial performance and position of the Company.

Notes to the Financial StatementsFor the financial year ended 31 October 2015


Notes to the Financial StatementsFor the financial year ended 31 October 2015cont’d

2. suMMary of siGnificant accountinG Policies cont’d

2.2 changes in accounting policies cont’d The nature and impact of the new and amended MFRS and IC Interpretation are described below:

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities

The amendments clarify the meaning of “currently has a legally enforceable right to set-off” and

“simultaneous realisation and settlement”. These amendments are to be applied retrospectively. These amendments have no impact on the Group, since none of the entities in the Group has any offsetting arrangements.

Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities

These amendments provide an exception to the consolidation requirement for entities that meet the

definition of an investment entity under MFRS 10 Consolidated Financial Statements and must be applied retrospectively, subject to certain transition relief. The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss. These amendments have no impact on the Group, since none of the entities in the Group qualifies to be an investment entity under MFRS 10.

Amendments to MFRS 136: Recoverable Amount Disclosures for Non-Financial Assets

The amendments to MFRS 136 remove the requirement to disclose the recoverable amount of a cash-generating unit (“CGU”) to which goodwill or other intangible assets with indefinite useful lives has been allocated when there has been no impairment or reversal of impairment of the related CGU. In addition, the amendments introduce additional disclosure requirements when the recoverable amount is measured at fair value less costs of disposal. These new disclosures include the fair value hierarchy, key assumptions and valuation techniques used which are in line with the disclosure required by MFRS 13 Fair Value Measurements.

The application of these amendments had no material impact on the disclosures in the Group’s and the

Company’s financial statements. Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting

These amendments provide relief from the requirement to discontinue hedge accounting when a derivative

designated as a hedging instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and measure of hedge effectiveness. Retrospective application is required.

These amendments have no impact on the Group as the Group does not have any derivatives that are

subject to novation. IC Interpretation 21 Levies IC 21 defines a levy and clarifies that the obligating event which gives rise to the liability is the activity that

triggers the payment of the levy, as identified by legislation. For a levy which is triggered upon reaching a minimum threshold, IC 21 clarifies that no liability should be recognised before the specified minimum threshold is reached. Retrospective application is required. The application of IC 21 has had no material impact on the disclosures or on the amounts recognised in the Group’s and the Company’s financial statements.



cont’d


2.2 changes in accounting policies cont’d

Amendments to MFRS 119: Defined Benefit Plans: Employee Contributions

MFRS 119 requires an entity to consider contributions from employees or third parties. The amendments to MFRS119 clarify how an entity should account for contributions made by employees or third parties to defined contribution plans, based on whether those contributions are dependent on the number of years of service provided by the employee. For contributions that are independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. For contributions that are dependent on the number of years of service, the entity is required to attribute them to the employees’ periods of service.

The application of these amendments has no material impact on the disclosures in the Group’s and the Company’s financial statements.

Annual Improvements to MFRS 2010–2012 Cycle

The Annual Improvements to MFRS 2010-2012 Cycle include a number of amendments to various MFRS,

which are summarised below. The Directors of the Company do not anticipate that the application of these amendments will have a significant impact on the Group’s and the Company’s financial statements.

standards Descriptions

Mfrs 3 business combinations

The amendments to MFRS 3 clarify that contingent consideration classified as liabilities (or assets) should be measured at fair value through profit or loss at each reporting date, irrespective of whether the contingent consideration is a financial instrument within the scope of MFRS 9 or MFRS 139. The amendments are effective for business combinations for which the acquisition date is on or after 1 July 2014.

Mfrs 8 operating segments

The amendments are to be applied retrospectively and clarify that:- an entity must disclose the judgements made by management in

applying the aggregation criteria in MFRS 8, including a brief description of operating segments that have been aggregated and the economic characteristics used to assess whether the segments are similar; and

- the reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reported to the chief operating decision maker.

Mfrs 116 Property, Plant and equipment and Mfrs 138 intangible assets

The amendments remove inconsistencies in the accounting for accumulated depreciation or amortisation when an item of property, plant and equipment or an intangible asset is revalued. The amendments clarify that the gross carrying amount is adjusted in a manner consistent with the revaluation of the carrying amount of the asset and that accumulated depreciation/amortisation is the difference between the gross carrying amount and the carrying amount after taking into account accumulated impairment losses.

Mfrs 124 related Party Disclosures

The amendments clarify that a management entity providing key management personnel services to a reporting entity is a related party of the reporting entity. The reporting entity should disclose as related party transactions the amounts incurred for the service paid or payable to the management entity for the provision of key management personnel services.




2.2 changes in accounting policies cont’d Annual Improvements to MFRS 2011–2013 Cycle




Mfrs 3 business combinations

The amendments to MFRS 3 clarify that the standard does not apply to the accounting for formation of all types of joint arrangement in the financial statements of the joint arrangement itself. The amendments are to be applied prospectively.

Mfrs 13 fair value Measurement

The amendments to MFRS 13 clarify that the portfolio exception in MFRS 13 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of MFRS 9 (or MFRS 139 as applicable).

Mfrs 140 investment Property

The amendments to MFRS 140 clarify that an entity acquiring investment property must determine whether:- the property meets the definition of investment property in terms of

MFRS 140; and- the transaction meets the definition of a business combination

under MFRS 3, to determine if the transaction is a purchase of an asset or is a business combination.

2.3 standards issued but not yet effective

The standards that are issued but not yet effective up to the date of issuance of the Group’s and of the

Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective.

Description

effective for annual periods beginning on

or after

Annual Improvements to MFRS 2012-2014 Cycle 1 January 2016

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation

1 January 2016

Amendments to MFRS 116 and MFRS 141: Agriculture: Bearer Plants 1 January 2016

Amendments to MFRS 10 and MFRS 128: Sales or Contribution of Assets between an Investor and its Associate or Joint Venture

Deferred

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations

1 January 2016

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

Amendments to MFRS 101: Disclosure Initiatives 1 January 2016

Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the Consolidation Exception

1 January 2016

MFRS 14 Regulatory Deferral Accounts 1 January 2016

MFRS 15 Revenue from Contracts with Customers 1 January 2018

MFRS 9 Financial Instruments 1 January 2018



cont’d


2.3 standards issued but not yet effective cont’d

The directors expect that the adoption of the above amendments and standards will have no material impact on the financial statements of the Group and of the Company in the period of initial application except as discussed below:

Annual Improvements to MFRS 2012–2014 Cycle




Mfrs 7 financial instruments: Disclosures

The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in a financial asset. An entity must assess the nature of the fee and arrangement against the guidance for continuing involvement in MFRS 7 in order to assess whether the disclosures are required.

In addition, the amendment also clarifies that the disclosures in respect of offsetting of financial assets and financial liabilities are not required in the condensed interim financial report.

Mfrs 119 employee benefits

The amendment to MFRS 119 clarifies that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather that the country where the obligation is located. When there is no deep market for high quality corporate bonds in that currency, government bond rates must be used.

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and

Amortisation The amendments clarify that revenue reflects a pattern of economic benefits that are generated from

operating a business (of which the asset is part) rather than the economic benefits that are consumed through the use of an asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets.

The amendments are effective prospectively for annual periods beginning on or after 1 January 2016, with early adoption permitted. These amendments are not expected to have any impact to the Group and the Company as the Group and the Company have not used a revenue-based method to depreciate its non-current assets.

Amendments to MFRS 101: Disclosure Initiatives

The amendments to MFRS 101 include narrow-focus improvements in the following five areas:

- Materiality - Disaggregation and subtotals - Notes structure - Disclosure of accounting policies - Presentation of items of other comprehensive income arising from equity accounted investments

The Directors of the Company do not anticipate that the application of these amendments will have a

material impact on the Group’s and the Company’s financial statements.




2.3 standards issued but not yet effective cont’d

Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the Consolidation Exception

The amendments clarify that the exemption from presenting consolidated financial statements applies

to a parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value. The amendments further clarify that only a subsidiary that is not an investment entity itself and provides support services to the investment entity is consolidated. In addition, the amendments also provide that if an entity that is not itself an investment entity has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries.

The amendments are to be applied retrospectively and are effective for annual periods beginning on or after 1 January 2016, with early adoption permitted. These amendments will not have any impact on the Group’s and the Company’s financial statements.

MFRS 9 Financial Instruments MFRS 9 reflects the first phase of work on the replacement of MFRS 139 and applies to classification and

measurement of financial assets and financial liabilities as defined in MFRS 139. The standard was initially effective for annual periods beginning on or after 1 January 2013, but Amendments to MFRS 9: Mandatory Effective Date of MFRS 9 and Transition Disclosures, issued in March 2012, moved the mandatory effective date to 1 January 2015. Subsequently, on 14 February 2014, it was announced that the new effective date will be decided when the project is closer to completion. The adoption of the first phase of MFRS 9 will have an effect on the classification and measurement of the Group’s financial assets, but will not have an impact on classification and measurements of the Group’s financial liabilities. The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.

2.4 basis of consolidation The consolidated financial statements comprise the financial statements of the Company and of its

subsidiaries as at 31 October 2015. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

- Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

- Exposure, or rights, to variable returns from its involvement with the investee; and - The ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers

all relevant facts and circumstances in assessing whether it has power over an investee, including:

- The contractual arrangement with the other vote holders of the investee; - Rights arising from other contractual arrangements; and - The Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there

are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.



cont’d

2. suMMary of siGnificant accountinG Policies cont’d 2.4 basis of consolidation cont’d

Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity

holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

- Derecognises the assets (including goodwill) and liabilities of the subsidiary; - Derecognises the carrying amount of any non-controlling interests; - Derecognises the cumulative translation differences recorded in equity; - Recognises the fair value of the consideration received; - Recognises the fair value of any investment retained; - Recognises any surplus or deficit in profit or loss; and - Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or

retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.

2.5 business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is

measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, any previously held equity interest is re-measured at its

acquisition date fair value and any resulting gain or loss is recognised in profit or loss. It is then considered in the determination of goodwill.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the

acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of MFRS 139 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognised either in either profit or loss or as a change to OCI. If the contingent consideration is not within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS. Contingent consideration that is classified as equity is not re-measured and subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.



2. suMMary of siGnificant accountinG Policies cont’d 2.5 business combinations and goodwill cont’d

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the

purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

2.6 current versus non-current classification

Assets and liabilities in statements of financial position are presented based on current/non-current

classification. An asset is current when it is:

- Expected to be realised or intended to sold or consumed in normal operating cycle; - Held primarily for the purpose of trading; - Expected to be realised within twelve months after the reporting period, or - Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at

least twelve months after the reporting period.

All other assets are classified as non-current. A liability is current when:

- It is expected to be settled in normal operating cycle; - It is held primarily for the purpose of trading; - It is due to be settled within twelve months after the reporting period; or - There is no unconditional right to defer the settlement of the liability for at least twelve months after

the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

2.7 fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability; or - In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group or by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would

use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.



cont’d

2. suMMary of siGnificant accountinG Policies cont’d 2.7 fair value measurement cont’d Valuation techniques that are appropriate in the circumstances and for which sufficient data are available,

are used to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are

categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and

the Company determine whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest Level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Policies and procedures are determined by senior management for both recurring fair value measurement and for non-recurring measurement.

External valuers are involved for valuation of significant assets and significant liabilities. Involvement

of external valuers is decided by senior management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The senior management decides, after discussions with the external valuers, which valuation techniques and inputs to use for each case.

At each reporting date, the senior management analyses the movements in the values of assets and

liabilities which are required to be re-measured or re-assessed according to the accounting policies of the Group and of the Company. For this analysis, the senior management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

The senior management, in conjunction with the external valuers, also compares the changes in the

fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, classes of assets and liabilities are determined based on the

nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

2.8 foreign currencies (a) Functional and presentation currency

The Group’s and the Company’s financial statements are presented in Ringgit Malaysia which is also

the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.



2. suMMary of siGnificant accountinG Policies cont’d 2.8 foreign currencies cont’d (b) Transactions and balances Transactions in foreign currencies are initially recorded by the Group’s entities at the functional

currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional

currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit or loss

with the exception of monetary items that are designated as part of the hedge of the Group’s net investment of a foreign operation. These are recognised in other comprehensive income until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated

using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the

carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

2.9 revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group

and the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.

The Company and its subsidiaries assess their revenue arrangements against specific criteria in order

to determine if the Company and its subsidiaries are acting as principal or agent. The Group and its subsidiaries have concluded that they are acting as a principal in all of its revenue arrangements.

The following specific recognition criteria must also be met before revenue is recognised: (a) Sale of goods Revenue from sale of goods is recognised upon the transfer of significant risks and rewards of

ownership to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(b) Management fees Management fees are recognised when services are rendered.



cont’d

2. suMMary of siGnificant accountinG Policies cont’d 2.9 revenue recognition cont’d (c) Interest income For all financial instruments measured at amortised cost and interest bearing financial assets classified

as available for sale, interest income or expense is recorded using the effective interest rate (“EIR”), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income is included in finance income in the profit or loss.

(d) Rental income Rental income is recognised on an accrual basis. 2.10 employee benefits (a) 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. 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 non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(b) Defined contribution plans The Group makes contributions to the Employees Provident Fund in Malaysia, a defined contribution

pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

2.11 taxes (a) Current income tax Current income tax assets and liabilities for the current period are measured at the amount expected

to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not

in the profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) Deferred tax Deferred tax is provided using the liability method on temporary differences at the reporting date

between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.



2. suMMary of siGnificant accountinG Policies cont’d 2.11 taxes cont’d (b) Deferred tax cont’d Deferred tax liabilities are recognised for all temporary differences, except: - when the deferred tax liability arises from the initial recognition of goodwill or an asset or

liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries when the

timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of

unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

- where the deferred tax asset relating to the deductible temporary difference arises from the

initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries,

deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the

extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year

when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or

loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set

off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate

recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurred during the measurement period or in profit or loss.



cont’d

2. suMMary of siGnificant accountinG Policies cont’d 2.11 taxes cont’d

(c) Sales tax and Goods and Services Tax (“GST”)

Revenues, expenses and assets are recognised net of the amount of sales tax except:

(i) where the sales tax and GST incurred on a purchase of assets or services are not recoverable from the taxation authority, in which case the sales tax and GST are recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

(ii) receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax and GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position.

2.12 borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that

necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

2.13 leases The determination of whether an arrangement is, or contains, a lease is based on the substance of

the arrangement at the inception date. The arrangement is assessed for whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

(a) As lessee Finance leases that transfer substantially all the risks and benefits incidental to ownership of the

leased item to the Group or to the Company, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in profit or loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable

certainty that ownership will be obtained by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognised as an operating expense in the income statement on a

straight-line basis over the lease term. (b) As lessor Leases in which the Group or the Company do not transfer substantially all the risks and benefits of

ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.



2. suMMary of siGnificant accountinG Policies cont’d 2.14 Property, plant and equipment Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated

impairment losses, if any. Such cost includes the cost of replacing component parts of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.

When significant parts of property, plant and equipment are required to be replaced at intervals, the Group derecognises the replaced part, and recognises the new part with its own associated useful life and depreciation. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred. The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

Long term leasehold land is depreciated over the period of the respective leases that range from 41 to 89

years. Depreciation of other property, plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets as follows:

- Buildings: 40 - 50 years- Plant and equipment: 5 to 30 years- Motor vehicles: 10 years- Office equipment, renovation, furniture and fittings: 5 to 10 years

The carrying values or property, plant and equipment are reviewed for impairment when event or changes in circumstances indicate that the carrying value may not be recoverable.

The residual values, useful life and depreciation method are reviewed at each financial year end and

adjusted prospectively if appropriate. An item of property, plant and equipment is derecognised upon disposal or when no future economic

benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.15 investment property Investment property is initially measured at cost, including transaction costs. Subsequent to initial

recognition, investment property is stated at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment property is included in the profit or loss in the period in which they arise. Fair values are evaluated annually by an accredited external, independent valuer, applying a valuation model recommended by the International Valuation Standards Committee.

Investment property is derecognised when either it has been disposed of or when the investment property

is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

Transfers are made to or from investment property only when there is a change in use. For a transfer from

investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment up to the date of change in use.



cont’d

2. suMMary of siGnificant accountinG Policies cont’d 2.16 intangible assets Intangible assets acquired separately are measured initially at cost. Following initial acquisition, intangible

assets are measured at cost less any accumulated amortisation and accumulated impairment losses. Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for

impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss.

Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually,

or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between

the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

Deferred development costs

Research costs are expensed as incurred. Deferred development costs arising from development

expenditures on an individual project are recognised when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete and the ability to measure reliably the expenditures during development. Deferred development costs have a finite useful life and are amortised over the period of expected sales from the related project on a straight line basis.

2.17 investment in subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies

so as to obtain benefits from its activities. In the Company’s separate financial statements, investment in subsidiaries is accounted for at cost less

impairment losses. 2.18 inventories Inventories are stated at lower of cost and net realisable value. Costs incurred in bringing inventories to their present location and condition are accounted for as purchase

costs on a weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business less the estimated

costs of completion and the estimated costs necessary to make the sale.



2. suMMary of siGnificant accountinG Policies cont’d 2.19 cash and short-term deposits Cash and short-term deposits in the statements of financial position comprise cash at banks and on hand

and short-term deposits with a maturity of three months or less. For the purposes of the statements of cash flows, cash and cash equivalents consist of cash and short-term deposits, net of any outstanding bank overdrafts.

2.20 impairment of non-financial assets At each reporting date, an assessment is made as to whether there is an indication that an asset may

be impaired. If any indication exists, or when annual impairment testing for an asset is required, the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a

pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

Impairment calculation are based on detailed budgets and forecast calculations, which are prepared

separately for each CGU to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the

statement of profit or loss in expense categories consistent with the function of the impaired asset.

Goodwill is tested for impairment annually at reporting date and when circumstances indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

For assets other than goodwill, an assessment is made at each reporting date to determine whether

there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the recoverable amount of the asset or CGU is estimated. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss.

2.21 financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability

or equity instrument of another entity.



cont’d


2.22 financial assets (a) Initial recognition and measurement Financial assets are classified, at initial recognition, as financial assets at fair value through profit or

loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Purchases or sales of financial assets that require delivery of assets within a time frame established by

regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group or the Company commit to purchase or sell the asset.

(b) Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories:

(i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading and

financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments as defined by MFRS 139. There were no financial assets designated at fair value through profit or loss. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative net changes in fair value) or finance income (positive net changes in fair value) in the statement of profit or loss.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded

at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Re-assessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss.

(ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments

that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (“EIR”) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. This category generally applies to trade and other receivables.




2.22 financial assets cont’d

(b) Subsequent measurement cont’d

(iii) Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturities are

classified as held-to-maturity when there is a positive intention and an ability to hold them to maturity. After initial measurement, held-to-maturity investments are measured at amortised cost using the EIR, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss as finance costs. There were no held-to-maturity investments during the reporting period.

(iv) Available-for-sale (“AFS”) financial investments AFS financial investments include equity investments and debt securities. Equity investments

classified as AFS are those that are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those that are intended to be held for an indefinite period of time and that may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, AFS financial investments are subsequently measured at fair value

with unrealised gains or losses recognised in other comprehensive income and credited in the AFS reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or the investment is determined to be impaired, when the cumulative loss is reclassified from the AFS reserve to the statement of profit or loss in finance costs. Interest earned whilst holding AFS financial investments is reported as interest income using the EIR method.

The ability and intention to sell its AFS financial assets in the near term are evaluated whether

they are still appropriate. When, in rare circumstances, these financial assets cannot be traded due to inactive markets, these financial assets will be reclassified if the management has the ability and intention to hold the assets for foreseeable future or until maturity.

For a financial asset reclassified from the AFS category, the fair value carrying amount at the

date of reclassification becomes its new amortised cost and any previous gain or loss on the asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the EIR. Any difference between the new amortised cost and the maturity amount is also amortised over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the statement of profit or loss.

(c) Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial

assets) is primarily derecognised (i.e. removed from the statements of financial position) when:

- The rights to receive cash flows from the asset have expired; or

- The rights to receive cash flows from the asset have been transferred or an obligation to pay the received cash flows in full without material delay to a third party has been assumed under a ‘pass-through’ arrangement; and either (a) substantially all the risks and rewards of the asset have been transferred or (b) substantially all the risks and rewards of the asset have neither been transferred nor retained but control of the asset has been transferred.



cont’d


2.22 financial assets cont’d (c) Derecognition cont’d When the rights to receive cash flows from an asset have been transferred or when a pass-through

arrangement has been entered into, the Group and the Company evaluate if, and the extent of, the risks and rewards of ownership that have been retained. When substantially all of the risks and rewards of the asset have not been transferred nor retained, the transferred asset continues to be recognised to the extent of the Group’s and the Company’s continuing involvement. In that case, an associated liability is also recognised. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations retained.

(d) Impairment of financial assets At each reporting date, an assessment is made as to whether there is objective evidence that a

financial asset or a group of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’), has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

(i) Financial assets carried at amortised cost For financial assets carried at amortised cost, an assessment is made as to whether impairment

exists individually (for financial assets that are individually significant) or collectively (for financial assets that are not individually significant). If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

The amount of any impairment loss identified is measured as the difference between the

asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in profit or loss. Interest income (recorded as finance income in the statement of profit or loss) continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group or the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to finance costs in the statement of profit or loss.




2.22 financial assets cont’d (d) Impairment of financial assets cont’d (ii) Available-for-sale (“AFS”) investments For AFS financial investments, an assessment is made at each reporting date whether there is

objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as AFS, objective evidence would include a

significant or prolonged decline in the fair value of the investment below its cost. ‘Significant’ is evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost. When there is evidence of impairment, the cumulative loss (measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of profit or loss) is removed from other comprehensive income and recognised in the statement of profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increases in their fair value after impairment are recognised in other comprehensive income.

In the case of debt instruments classified as AFS, the impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss.

Future interest income continues to be accrued based on the reduced carrying amount of

the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed through profit or loss.

2.23 financial liabilities (a) Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit

or loss, loans and borrowings and payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and

payables, net of directly attributable transaction costs. Financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,

financial guarantee contracts and derivative financial instruments. (b) Subsequent measurement The measurement of financial liabilities depends on their classification, as described below:

(i) Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading

and financial liabilities designated upon initial recognition as at fair value through profit or loss.



cont’d


2.23 financial liabilities cont’d (b) Subsequent measurement cont’d The measurement of financial liabilities depends on their classification, as described below: cont’d

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

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by MFRS 139. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in MFRS 139 are satisfied. No financial liability has been designated at fair value through profit or loss during the reporting period.

(ii) Loans and borrowings After initial recognition, interest-bearing loans and borrowings are subsequently measured at

amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and

fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in profit or loss.

This category generally applies to interest-bearing loans and borrowings. (c) Financial guarantee contracts Financial guarantee contracts issued by the Company are those contracts that require a payment

to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation.

(d) Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled,

or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.

(e) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the consolidated

statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.



2. suMMary of siGnificant accountinG Policies cont’d 2.24 Provisions Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past

event and 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. When it is expected that some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statements of profit or loss net of any reimbursement.

2.25 share capital and share issuance expenses An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the

Company after deducting all of its liabilities. Ordinary shares are equity instruments and are recorded at the proceeds received, net of directly attributable incremental transaction costs.

2.26 cash dividend and non-cash distribution to equity holders of the parent The Company recognises a liability to make cash or non-cash distributions to equity holders of the parent

when the distribution is authorised and the distribution is no longer at the discretion of the Company. A distribution is authorised when it is approved by the shareholders and a corresponding amount is recognised directly in equity.

Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-

measurement recognised directly in equity. Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the

carrying amount of the assets distributed is recognised in the statement of profit or loss. 2.27 contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose

existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group and

of the Company. 2.28 segment reporting For management purposes, the Group is organised into operating segments based on their products

and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 31, including the factors used to identify the reportable segments and the measurement basis of segment information.



cont’d

3. siGnificant accountinG juDGeMent anD estiMates

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

3.1 judgements made in applying accounting policies In the process of applying the Group’s accounting policies, management has not made any critical

judgements, apart from those involving estimations, which could have a significant effect on the amounts recognised in the financial statements.

3.2 estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the

reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

(a) Useful lives of plant and machinery The cost of plant and machinery for the sterilisation services is depreciated on a straight-line basis

over the assets’ estimated economic useful lives. Management estimates the useful lives of these plant and machinery to be 30 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(b) Impairment of Goodwill The Group determines whether goodwill is impaired at least on an annual basis. This requires an

estimation of the value in use of the cash-generating units (“CGU”) to which goodwill are allocated. Estimating a value in use amount requires management to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at 31 October 2015 was RM5,017,193 (2014: RM5,017,193).

(c) Impairment of research and development costs The Group determines whether research and development costs are impaired at least on an annual

basis. This require an estimation of the value-in-use of the cash-generating units (“CGU”) to which research and development costs are allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

The carrying amount of research and development costs was RM23,742,717 (2014: RM13,161,169) for the Group as at 31 October 2015.

The research and development costs are related to development of home dialysis machines. The

Group is confident there is no impairment as the present value of the estimated future cash flows exceed its carrying amount.



4. revenue

Group company

2015 2014 2015 2014

rM rM rM rM

Sale of goods, net of discounts 41,881,364 34,715,801 - -

Management fee - - - 792,000

Rental income - 81,000 - -

41,881,364 34,796,801 - 792,000

5. cost of sales Cost of sales represents cost of inventories sold.

6. other incoMe

Group company

2015 2014 2015 2014

rM rM rM rM

Gain on fair value change of derivatives - 34,379 - -

Interest income 336,231 343,923 929,814 1,556,599

Realised gain on foreign exchange 87,244 52,179 - -

Sundry income 38,883 51,784 - -

Unrealised gain on foreign exchange 202,369 3,678 - -

664,727 485,943 929,814 1,556,599

7. finance costs

Group company

2015 2014 2015 2014

rM rM rM rM

Interest expense on:

- Bank overdraft 17,999 - - -

- Bank loans 639,490 420,427 - -

- Obligations under finance leases 15,679 14,106 - -

- Revolving credits 304,607 - - -

977,775 434,533 - -



cont’d

8. Profit/(loss) before tax The following amounts have been included in arriving at profit/(loss) before tax:

Group company

2015 2014 2015 2014

rM rM rM rM

Auditors’ remuneration

- Statutory audit 92,000 82,000 50,000 50,000

- Under provision in prior year - 15,000 - 15,000

Depreciation of property, plant and equipment (Note 13) 1,641,982 1,293,986 1,548 802

Employee benefits expense (Note 9) 3,737,782 3,256,028 717,396 741,922

Gain on foreign exchange

- Realised (48,494) (50,316) - -

- Unrealised (202,107) (3,678) - -

Impairment loss on trade receivables (Note 19) 168,409 159,253 - -

Non-executive directors’ remuneration excluding benefits-in-kind (Note 10) 192,456 174,960 192,456 174,960

Rental expenses 564,600 501,200 - -

Property, plant and equipment written off (Note 13) 142 163,471 - -

9. eMPloyee benefits exPenses

Group company

2015 2014 2015 2014

rM rM rM rM

Salaries and wages 3,343,973 2,811,556 650,421 668,593

Contributions to defined contribution plan 361,051 315,469 65,016 69,675

Social security contributions 26,640 24,349 878 2,564

Other benefits 6,118 104,654 1,081 1,090

3,737,782 3,256,028 717,396 741,922

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting to RM642,329 (2014: RM622,564) and RM368,472 (2014: RM338,060) respectively as further disclosed in Note 10.



10. Directors’ reMuneration

Group company

2015 2014 2015 2014

rM rM rM rM

Executive directors’ remuneration (Note 9):

Fees 57,024 51,840 57,024 51,840

Other emoluments 585,305 570,724 311,448 286,220

642,329 622,564 368,472 338,060

Non-executive directors’ remuneration (Note 8):

Fees 192,456 174,960 192,456 174,960

Total directors’ remuneration 834,785 797,524 560,928 513,020

The details of remuneration of directors of the Company are analysed as follows:

Group company

2015 2014 2015 2014

rM rM rM rM

Executive:

Salaries and other emoluments 563,641 548,840 318,224 291,840

Contributions to defined contribution plan 78,068 72,484 49,628 45,600

Social security contributions 620 1,240 620 620

642,329 622,564 368,472 338,060

Non-executive:

Fees 192,456 174,960 192,456 174,960

Total 834,785 797,524 560,928 513,020

The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

number of directors

2015 2014

executive directors:

RM100,001 - RM150,000 1 1

RM200,001 - RM250,000 1 1

non-executive directors:

RM50,001 - RM100,000 3 3



cont’d

11. incoMe tax exPense

Group company

2015 2014 2015 2014

rM rM rM rM

statement of comprehensive income:

Current year tax 196,045 281,595 26,814 121,595

Under provision in prior years 160,683 31,047 182,550 35,570

356,728 312,642 209,364 157,165

Deferred income tax (note 16):

Relating to origination and reversal of temporary differences 1,329,837 1,878,588 (179,721) 265,599

Relate to changes in tax rate 65,691 - - -

Under/(over) provision in prior years 15,625 (7,963) - -

1,411,153 1,870,625 (179,721) 265,599

Income tax expense recognised in profit or loss 1,767,881 2,183,267 29,643 422,764



11. incoMe tax exPense cont’d

Reconciliation between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 October 2015 and 2014 are as follows:

2015 2014

rM rM

Group

Profit before tax 4,857,878 6,646,973

Income tax at Malaysian statutory tax rate of 25% (2014: 25%) 1,214,470 1,661,743

Effect of income not subject to tax (4) (193)

Effect on opening deferred tax of reduction in Malaysian income tax rate 126,145 -

Deferred tax recognised at different tax rates (60,454) -

Effect of expenses not deductible for tax purposes 480,229 498,633

Deferred tax assets recognised on unabsorbed capital allowances and unused tax losses (268,359) -

Deferred tax assets not recognised on unutilised business losses 99,546 -

Under/(over) provision of deferred tax in prior years 15,625 (7,963)

Under provision of income tax in prior years 160,683 31,047

Income tax expense recognised in profit or loss 1,767,881 2,183,267

company

(Loss)/profit before tax (87,648) 708,699

Income tax at Malaysian statutory tax rate of 25% (2014: 25%) (21,912) 177,175

Effect of expenses not deductible for tax purposes 194,905 210,019

Deferred tax assets recognised on unabsorbed capital allowances and unused tax losses (325,900) -

Under provision of income tax in prior years 182,550 35,570

Income tax expense recognised in profit or loss 29,643 422,764 Domestic current income tax is calculated at the statutory tax rate of 25% (2014: 25%) of the estimated

assessable profit for the financial year. The Malaysian statutory tax rate will be reduced to 24% from the current year’s rate of 25%, effective year of

assessment 2016. The computation of deferred tax as at 31 October 2015 has reflected these changes.



cont’d

12. earninGs Per share (a) basic Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to

owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

The following tables reflect the profit and share data used in the computation of basic earnings per share

for the years ended 31 October:

Group

2015 2014

rM rM

Profit net of tax attributable to owner of the parent used in the computation of basic earnings per share 3,089,997 4,463,706

number of shares

number of shares

Weighted average number of ordinary shares for basic earnings per share computation 152,785,770 152,785,770

sen per share

sen per share

Basic earnings per share: 2.02 2.92

(b) Diluted No diluted earnings per share were presented as there were no potential dilutive ordinary shares

oustanding as at 31 October 2015.



13(a). ProPerty, Plant anD equiPMent

long term leasehold

land buildings Plant and

equipment other

assets* total

rM rM rM rM rM

Group

cost

At 1 November 2013 3,496,760 16,381,827 20,288,873 1,137,129 41,304,589

Additions - - 1,548,048 1,008,355 2,556,403

Reclassification - - (3,450) 3,450 -

Reclassification from investment properties 7,500,000 - - - 7,500,000

Written off - - - (367,224) (367,224)

at 31 october 2014 and 1 november 2014 10,996,760 16,381,827 21,833,471 1,781,710 50,993,768

Additions - 6,934,748 1,096,857 435,300 8,466,905

Disposal - - - (204,399) (204,399)

Written off - - - (160) (160)

at 31 october 2015 10,996,760 23,316,575 22,930,328 2,012,451 59,256,114

accumulated depreciation

at 1 november 2013 200,261 1,638,185 3,160,348 407,279 5,406,073

Charge for the year (Note 8) 41,256 327,636 713,915 211,179 1,293,986

Written off - - - (203,753) (203,753)

at 31 october 2014 and 1 november 2014 241,517 1,965,821 3,874,263 414,705 6,496,306

Charge for the year (Note 8) 41,256 558,478 755,649 286,599 1,641,982

Disposal - - - (57,902) (57,902)

Written off - - - (18) (18)

at 31 october 2015 282,773 2,524,299 4,629,912 643,384 8,080,368

net carrying amount

at 31 october 2014 10,755,243 14,416,006 17,959,208 1,367,005 44,497,462

at 31 october 2015 10,713,987 20,792,276 18,300,416 1,369,067 51,175,746

* Other assets comprise of motor vehicles, office equipment, furniture, fittings and renovation.



cont’d

13(a). ProPerty, Plant anD equiPMent cont’d

office equipment,

furniture and fittings

rM

company

cost

at 1 november 2013 2,265

Additions 1,628

at 31 october 2014 and 1 november 2014 3,893

Additions 3,055

at 31 october 2015 6,948

accumulated depreciation

at 1 november 2013 376

Depreciation charge for the year (Note 8) 802

at 31 october 2014 and 1 november 2014 1,178

Depreciation charge for the year (Note 8) 1,548

at 31 october 2015 2,726

net carrying amount

at 31 october 2014 2,715

at 31 october 2015 4,222

(a) During the financial year, the Group and the Company acquired property, plant and equipment at aggregate costs of RM8,466,905 (2014: RM2,556,403) and RM3,055 (2014: RM1,628) respectively of which RM197,500 (2014: RM106,000) and Nil (2014: Nil) respectively were acquired by means of hire purchase arrangements. The carrying amounts of property, plant and equipment held under hire purchase arrangements are as follows:

Group

2015 2014

rM rM

Motor vehicles 375,112 181,312



13(a). ProPerty, Plant anD equiPMent cont’d

(b) The net carrying amounts of property, plant and equipment pledged as securities for loans and borrowings (Note 23) are as follows:

Group

2015 2014

rM rM

Long term leasehold land 10,713,987 10,755,243

Buildings 20,792,276 14,416,006

Plant and equipment 15,587,131 16,253,659

47,093,394 41,424,908

13(b). investMent ProPerty

Group

2015 2014

rM rM

At 1 November - 7,500,000

Reclassification to property, plant and equipment (Note 13(a)) - (7,500,000)

At 31 October - -

14. investMent in subsiDiaries

company

2015 2014

rM rM

Unquoted shares, at cost 23,056,726 23,056,726

Details of subsidiaries

names of subsidiariescountry of

incorporation Principal activitiesProportion of

ownership interest

2015 2014


Malaysia Distribution of medical and healthcare equipment and appliances

100% 100%

Electron Beam Sdn. Bhd. Malaysia Providing industrial and commercial sterilisation, warehousing and handling services

100% 100%

Luxencia (M) Sdn. Bhd. Malaysia Provision of home dialysis treatment

100% 100%


Malaysia Provision of storage and warehousing services

100% 100%



cont’d

15. intanGible assets

Group

Goodwill

Deferreddevelopment

costs total

rM rM rM

cost / net carrying amount

at 1 november 2013 5,017,193 6,700,241 11,717,434

Addition in internal development - 6,460,928 6,460,928

at 31 october 2014 and 1 november 2014 5,017,193 13,161,169 18,178,362

Addition in internal development - 10,581,548 10,581,548

at 31 october 2015 5,017,193 23,742,717 28,759,910

Deferred development costs

Deferred development costs relate to development of home dialysis machines. The amortisation will begin when the Group launches the product commercially.

Impairment testing of goodwill

Goodwill arising from business combinations has been allocated to two individual cash-generating units (“CGU”) for impairment testing as follows:

- Healthcare products - Sterilisation provider

The carrying amounts of goodwill allocated to each cash-generating unit (“CGU”) are as follows:

Group

2015 2014

rM rM

Healthcare products 248,039 248,039

Sterilisation provider 4,769,154 4,769,154

5,017,193 5,017,193

The recoverable amounts of the CGUs have been determined based on value in use calculations using cash flow projections from financial budgets approved by management covering a five-year period. The pre-tax discount rates (per annum) applied to the cash flow projections:

Pre-taxdiscount rates

2015 2014

Healthcare products 6.85% 6.85%

Sterilisation provider 6.85% 6.85%

The calculations of value in use for the CGUs are most sensitive to the following assumptions:

Pre-tax discount rates - Discount rates reflect the current market assessment of the risks specific to each CGU. This is the benchmark used by management to assess operating performance and to evaluate future investment proposals.



16. DeferreD tax

Group company

2015 2014 2015 2014

rM rM rM rM

At beginning of year (3,216,213) (5,086,838) (47,000) (312,599)

Recognised in profit or loss (Note 11) 1,411,153 1,870,625 (179,721) 265,599

At end of year (1,805,060) (3,216,213) (226,721) (47,000)

Presented after appropriate offsetting as follows:

Deferred tax assets (6,701,334) (8,008,474) (227,734) (47,679)

Deferred tax liabilities 4,896,274 4,792,261 1,013 679

(1,805,060) (3,216,213) (226,721) (47,000)

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Deferred tax liabilities of the Group:

Property, plant and

equipment

rM

At 1 November 2013 4,232,675

Recognised in profit or loss 559,586

At 31 October 2014 4,792,261

Recognised in profit or loss 104,013

At 31 October 2015 4,896,274

Deferred tax assets of the Group:

unutilised reinvestment

allowances

unutilised tax

losses and unabsorbed

capital allowances others total

rM rM rM rM

At 1 November 2013 (5,466,718) (3,856,023) 3,228 (9,319,513)

Recognised in profit or loss - 1,323,550 (12,511) 1,311,039

At 31 October 2014 (5,466,718) (2,532,473) (9,283) (8,008,474)

Recognised in profit or loss 218,669 1,036,828 51,643 1,307,140

At 31 October 2015 (5,248,049) (1,495,645) 42,360 (6,701,334)



cont’d

16. DeferreD tax cont’d

Deferred tax liabilities/(assets) of the company:

Property, plant and

equipment

unutilised tax

losses and unabsorbed

capital allowances total

rM rM rM

At 1 November 2013 472 (313,071) (312,599)

Recognised in profit or loss 207 265,392 265,599

At 31 October 2014 679 (47,679) (47,000)

Recognised in profit or loss 334 (180,055) (179,721)

At 31 October 2015 1,013 (227,734) (226,721)

17. aMounts Due froM subsiDiaries

The amounts due from subsidiaries are unsecured, interest bearing range from 3.25% to 4.00% per annum and are not expected to be repayable within twelve months from the reporting date.

18. inventories

Group

2015 2014

rM rM

cost

Trading goods 10,385,836 7,778,631

Spare parts 1,196,198 1,500,866

11,582,034 9,279,497



19. traDe anD other receivables

Group company

2015 2014 2015 2014

rM rM rM rM

current

trade receivables

Third parties 12,703,743 8,671,182 - -

Less : Allowance for impairment (third parties) (327,662) (159,253) - -

Trade receivables, net 12,376,081 8,511,929 - -

other receivables

Other receivables 5,391,732 4,371,755 - -

Deposits 187,224 144,944 - -

5,578,956 4,516,699 - -

17,955,037 13,028,628 - -

Total trade and other receivables 17,955,037 13,028,628 - -

Add: Cash and bank balances (Note 21) 22,122,205 5,849,823 20,340,701 4,143,749

Total loans and receivables 40,077,242 18,878,451 20,340,701 4,143,749

(a) trade receivables

The Group’s normal trade credit term ranges from 30 to 120 days. Other credit terms are assessed and approved on a case-by-case basis. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

Group

2015 2014

rM rM

Neither past due nor impaired 5,785,756 4,495,652

1 to 30 days past due not impaired 2,017,239 1,096,696

31 to 60 days past due not impaired 1,818,561 534,897

61 to 90 days past due not impaired 1,011,272 323,950

More than 91 days past due not impaired 1,743,253 2,060,734

6,590,325 4,016,277

Impaired 327,662 159,253

12,703,743 8,671,182



cont’d

19. traDe anD other receivables cont’d

(a) trade receivables cont’d

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM6,590,325 (2014: RM4,016,277) that are past due at the reporting date but not impaired. These receivables are unsecured in nature.

Based on past experience and no adverse information to date, the Directors of the Company are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in the credit quality and the balances are still considered fully recoverable.

Receivables that are impaired

Movement in allowance accounts:

Group

2015 2014

rM rM

At 1 November 159,253 -

Charge for the year (Note 8) 168,409 159,253

At 31 October 327,662 159,253

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

(b) related party balances

Amounts due from subsidiaries and companies in which certain directors have interest are unsecured, non-interest bearing and are repayable upon demand.

20. other current assets

Group company

2015 2014 2015 2014

rM rM rM rM

Prepaid operating expenses 89,537 128,922 8,454 2,793

Advances to suppliers of property, plant and equipment - 2,034,583 - -

Advances to suppliers of trading inventories 298,068 527,190 - -

387,605 2,690,695 8,454 2,793



21. cash anD cash equivalents

Group company

2015 2014 2015 2014

rM rM rM rM

Cash in hand and at banks 3,122,205 1,849,823 1,340,701 143,749

Deposits with licensed banks 19,000,000 4,000,000 19,000,000 4,000,000

Cash and bank balances 22,122,205 5,849,823 20,340,701 4,143,749

Short-term deposits are made with maturity of less than three months depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates. The weighted average effective interest rates as at 31 October 2015 for the Group was 2.90% (2014: 2.90%) per annum.

22. traDe anD other Payables

Group company

2015 2014 2015 2014

rM rM rM rM

trade payables

Third parties 1,194,264 783,698 - -

Due to companies in which certain directors have interest 9,378,746 4,807,781 - -

10,573,010 5,591,479 - -

other payables

Other payables 1,275,865 94,911 25,011 40,427

Due to companies in which certain directors have interest - 5,221,575 - -

Accruals 2,998,823 2,095,846 166,383 118,540

4,274,688 7,412,332 191,394 158,967

14,847,698 13,003,811 191,394 158,967

Total trade and other payables 14,847,698 13,003,811 191,394 158,967

Add: Loans and borrowings (Note 23) 38,531,583 6,299,764 - -

Total financial liabilities carried at amortised cost 53,379,281 19,303,575 191,394 158,967

(a) trade payables

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 120 days.



cont’d

22. traDe anD other Payables cont’d

(b) other payables

Other payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 120 days.

(c) related party balances

Amounts due to subsidiaries and companies in which certain directors have interest are non-interest bearing and are repayable on demand. The amounts are unsecured and to be settled in cash.

23. loans anD borrowinGs

Group

2015 2014

Maturity rM rM

current

Secured:

Obligations under finance leases (Note 27(b)) 2016 75,882 50,330

Bank loans:

- RM loan at BFR +1.75% per annum 2016 800,000 -

- RM loan at BFR +1.50% per annum 2016 5,000,000 -

- Bankers’ acceptances at 4.61% per annum 2016 1,572,913 339,610

- RM loan at BFR -1.5% per annum 2016 2,995,963 426,490

- RM loan at KLIBOR + 2% per annum 2016 - 1,466,667

10,444,758 2,283,097

non-current

Secured:

Obligations under finance leases (Note 27(b)) 2017 - 2020 165,360 76,020

Bank loans:

- RM loan at BFR +1.75% per annum 2017 - 2022 9,800,000 -

- RM loan at BFR +1.25% per annum 2017 - 2018 3,570,000 -

- RM loan at BFR -1.5% per annum 2017 - 2023 14,551,465 3,940,647

28,086,825 4,016,667

total borrowings

Obligations under finance leases (Note 27(b)) 241,242 126,350

Bank loans:

- RM loan at BFR +1.75% per annum 10,600,000 -


- Bankers’ acceptances at 4.61% per annum 1,572,913 339,610


- RM loan at BFR -1.5% per annum 17,547,428 4,367,137

- RM loan at KLIBOR + 2% per annum - 1,466,667

38,531,583 6,299,764



23. loans anD borrowinGs cont’d

The remaining maturities of the loans and borrowings are as follows:

Group

2015 2014

rM rM

On demand or not later than 1 year 10,444,758 2,283,097

Later than 1 year and not later than 2 years 6,100,442 481,892

Later than 2 years and not later than 5 years 15,325,637 1,534,685

Later than 5 years 6,660,746 2,000,090

38,531,583 6,299,764

The interest rates (per annum) at the reporting date for borrowings, excluding obligations under finance lease, were as follows:

Group

2015 2014

% %

RM loan at BFR +1.75% per annum 5.57 -



RM loan at BFR -1.5% per annum 5.35 5.10

RM loan at KLIBOR + 2% per annum - 4.62

* KLIBOR: The Kuala Lumpur Inter-Bank Offered Rates

* BFR: Based Financing Rates

The banking facilities and term loans are secured by the following:

(a) legal charge over certain assets of the Group as disclosed in Note 13 to the financial statements; and

(b) corporate guarantees by the Company.



cont’d

24. share caPital anD share PreMiuM

number ofordinary

shares ofrM0.35 each share capital

(issued and fully paid)

amount

share capital

(issued and fully paid)

share premium total

rM rM rM

At 1 November/31 October 152,785,770 53,475,020 4,829,789 58,304,809

number of ordinary shares of rM0.35 each amount

2015 2014 2015 2014

rM rM

authorised share capital

At 1 November/31 October 200,000,000 200,000,000 70,000,000 70,000,000

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction and rank equally with regard to the Company residual assets.

25. retaineD earninGs

As at 31 October 2015, the Company has tax exempt profits available for distribution of approximately RM10,750,000 (2014: RM10,750,000), subject to the agreement of the Inland Revenue Board. The Company may distribute dividends out of its entire retained earnings as at 31 October 2015 under the single tier system.



26. relateD Party transactions

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:

2015 2014

rM rM

Group

Related parties:*

Purchases of goods 14,197,883 9,147,169

Sales of goods 6,872,849 7,186,313

company

Interest charged to subsidiaries 594,439 1,216,726

Management fees from subsidiaries - 792,000

* Related parties are companies in which certain directors have interests. The directors are of the opinion that all the transactions above have been entered into in the normal

course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the year was as follow:

Group company

2015 2014 2015 2014

rM rM rM rM

Short-term employee benefits 564,261 550,080 318,844 292,460

Defined contribution plan 78,068 72,484 49,628 45,600

642,329 622,564 368,472 338,060

Included in the total remuneration of key management personnel are:

Group company

2015 2014 2015 2014

rM rM rM rM

Directors’ remuneration (Note 10) 834,785 513,020 561,288 513,020



cont’d

27. coMMitMents (a) capital commitments

Group

2015 2014

rM rM

capital expenditure

Approved and contracted for:

Property, plant and equipment - 4,929,000

(b) finance lease commitments

Group

2015 2014

rM rM

Minimum lease payments:

Not later than 1 year 88,396 56,736

Later than 1 year and not later than 2 years 81,696 36,628

Later than 2 years and not later than 5 years 95,940 44,876

Total minimum future payments 266,032 138,240

Future finance charges (24,790) (11,890)

241,242 126,350

Present value of payments:

Not later than 1 year 75,882 50,330

Later than 1 year and not later than 2 years 73,826 33,136

Later than 2 years and not later than 5 years 91,534 42,884

241,242 126,350

analysed as:

Due within 12 months (Note 23) 75,882 50,330

Due after 12 months (Note 23) 165,360 76,020

241,242 126,350

The finance lease liabilities bore interest at the reporting date of between 3.20% - 3.49% (2014: 3.23% - 3.49%) per annum.



28. fair value of financial instruMents

Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

note

Trade and other receivables (current) 19

Trade and other payables (current) 22

Loans and borrowings (current) 23

Loans and borrowings (non-current) 23

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

29. financial risK ManaGeMent objectives anD Policies

Financial liabilities, comprise loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Group’s and the Company’s operations and to provide guarantees to support its operations. Financial assets include trade and other receivables and cash and short-term deposits that derive directly from its operations.

The Group is exposed to market risk, interest risk, foreign currency risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks and ensures that the Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All derivative activities for risk management purposes are carried out by senior management who have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken. The Group does not apply hedge accounting. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk and foreign exchange currency risk. Financial instruments affected by market risk include deposits, loans and borrowings.

(b) interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group and the Company have no significant interest-bearing financial assets, the Group’s and the Company’s income and operating cash flows are substantially independent of changes in market interest rates.



cont’d

29. financial risK ManaGeMent objectives anD Policies cont’d

(c) foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group is exposed to transactional currency risk primarily through sales and purchases that are denominated in a currency other than the functional currency of the operations to which they relate. The currencies giving rise to this risk are primarily United States Dollars (“USD”), Euro (“EUR”) and Singapore Dollars (“SGD”). Such transactions are kept to an acceptable level. Material foreign currency transaction exposures are hedged, mainly with derivative financial instruments such as forward foreign exchange contracts.

The net unhedged financial assets/(liabilities) of the Group that are not denominated in their functional currencies are as follows:

net financial assets/(liabilities) held in non-functional currencies

functional currency of Group companies

united states

Dollars euro singapore

Dollars total

rM rM rM rM

at 31 october 2015

Ringgit Malaysia 749,872 15,228 914,799 1,679,899

at 31 october 2014

Ringgit Malaysia 175,412 - - 175,412

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the USD, EUR and SGD exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

Group

2015 2014

rM rM

Profit net of tax

USD/RM

- strengthened 5% (46,437) (8,933)

- weakened 5% 46,437 8,933

EUR/RM

- strengthened 5% (729) -

- weakened 5% 729 -

SGD/RM

- strengthened 5% (47,202) -

- weakened 5% 47,202 -




(d) credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Exposure to credit risk relates to operating activities (primarily trade receivables) and from financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

(i) Trade receivables

Customer credit risk is managed according to established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and approved by the directors who sets out the individual credit limits. Outstanding customer receivables are regularly monitored and financial standings of major customers are continuously reviewed.

At the reporting date, approximately 77% (2014 :78%) of the Group’s gross trade receivables were due from 6 (2014: 7) major customers.

An impairment analysis is performed at each reporting date on an individual basis and in addition, minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actual incurred historical data. The Group does not hold collateral as security.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:

- The carrying amount of each class of financial assets recognised in the statements of financial position.

- A nominal amount of RM36,717,000 (2014: RM5,834,000) relating to a bank guarantee provided by the Company to financial institutions for credit facilities granted to subsidiaries.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 19.

Financial assets that are either past due or impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 19.

(ii) Cash and short-term deposits

Cash is normally maintained at minimum levels and surplus cash are placed as short-term deposits with licensed banks and financial institutions. Such funds are reviewed by the Directors on a monthly basis and amounts placed as short-term deposits may be revised throughout the year. This is to minimise the concentration of risks and therefore mitigate financial loss through potential counterparty’s failure to make payments. Deposits with banks that are neither past due nor impaired are placed with or entered into with reputable financial institutions with no history of default.



cont’d


(e) liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

The Group and the Company manage their debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group and the Company maintain sufficient levels of cash to meet its working capital requirements. In addition, the Group and the Company strive to maintain available banking facilities at a reasonable level to its overall debt position.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2015

on demand or within one year

one to five years

over five years total

rM rM rM rM

Group

financial liabilities:

Trade and other payables 14,847,698 - - 14,847,698

Loans and borrowings 10,457,272 21,245,103 6,660,747 38,363,122

Total undiscounted financial liabilities 25,304,970 21,245,103 6,660,747 53,210,820

company


Trade and other payables 191,394 - - 191,394

Total undiscounted financial liabilities 191,394 - - 191,394




(e) liquidity risk cont’d

Analysis of financial instruments by remaining contractual maturities cont’d

2014

on demand or within one year

one to five years

over five years total

rM rM rM rM

Group


Trade and other payables 13,003,811 - - 13,003,811

Loans and borrowings 2,289,503 2,022,061 2,000,090 6,311,654

Total undiscounted financial liabilities 15,293,314 2,022,061 2,000,090 19,315,465

company


Trade and other payables 158,967 - - 158,967

Total undiscounted financial liabilities 158,967 - - 158,967

30. caPital ManaGeMent

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 October 2015 and 31 October 2014.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances. Capital represents equity attributable to the owners of the parent.

The Group is required by the Bursa Malaysia to maintain a consolidated shareholders’ equity equal to or not less than 25% of the issued and paid-up share capital and such shareholders’ equity is not less than RM40 million.



cont’d

30. caPital ManaGeMent cont’d

Group company

2015 2014 2015 2014

note rM rM rM rM

Trade and other payables 22 14,847,698 13,003,811 191,394 158,967


Less: Cash and bank balances 21 (22,122,205) (5,849,823) (20,340,701) (4,143,749)

Net debt 31,257,076 13,453,752 (20,149,307) (3,984,782)

Equity attributable to the owners of the parent, representing total capital 80,422,453 77,332,456 68,654,352 68,771,643

capital and net debt 111,679,529 90,786,208 48,505,045 64,786,861

Gearing ratio 28% 15% - -

31. seGMent inforMation

For management purposes, the Group is organised into business units based on its products and services, and has three reportable operating segments as follows:

I. The healthcare products segment comprises manufacturer, distributor and trader of healthcare products.

II. The sterilisation provider segment refers to provision of industrial and commercial sterilisation services, warehousing and handling services.

III. The corporate segment sector is involved in Group-level corporate services, treasury functions and provision of management services to subsidiaries.

Except as indicated above, no operating segments have 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. Group 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.



31.

seG

Me

nt

info

rM

ati

on

co

nt’d

h

ealth

care

pr

oduc

ts

st

erili

satio

n

prov

ider

c

orpo

rate

a

djus

tmen

ts a

nd

elim

inat

ions

Pe

r co

nsol

idat

ed

finan

cial

sta

tem

ents

2015

20

14

2015

20

14

2015

20

14

2015

20

14

2015

20

14

rM

rM

rM

rM

rM

rM

rM

rM

not

e rM

rM

reve

nue:

Exte

rnal

cus

tom

ers

30,

477,

897

23,

146,

575

11,

403,

467

11,

650,

226

- -

- -

4

1,88

1,36

4 3

4,79

6,80

1

Inte

r-seg

men

t -

- -

- -

792

,000

-

(792

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)A

- -

Tota

l rev

enue

30,

477,

897

23,

146,

575

11,

403,

467

11,

650,

226

- 7

92,0

00

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92,0

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41,

881,

364

34,

796,

801

resu

lts:

Inte

rest

inco

me

856

4

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- 9

29,8

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1,5

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343

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34,

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189

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1

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s

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92

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Segm

ent

(loss

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93,6

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(7,9

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(87,

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6

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ass

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413

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9

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8

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segm

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(48,

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(63,

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1,75

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4



cont’d

31. seGMent inforMation cont’d

A Inter-segment revenues are eliminated on consolidation.

B The following item is deducted from segment profit to arrive at “Profit before tax” presented in the consolidated statement of comprehensive income:

2015 2014

rM rM

Profit from inter-segment sales (230,171) (43,080)

C The following items are deducted from segment assets to arrive at total assets reported in the consolidated statement of financial position:

2015 2014

rM rM

Inter-segment assets (48,480,757) (63,934,749)

D The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2015 2014

rM rM

Inter-segment liabilities (30,167,972) (45,852,136)

Geographical information

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

revenue non-current assets

2015 2014 2015 2014

rM rM rM rM

Malaysia 40,623,807 32,462,544 81,740,716 65,892,037

Pakistan 594,325 327,353 - -

Sri Lanka 663,232 2,006,904 - -

41,881,364 34,796,801 81,740,716 65,892,037



31. seGMent inforMation cont’d

Geographical information cont’d

Non-current assets information presented above consist of the following items as presented in the consolidated statement of financial position:

2015 2014

rM rM

Property, plant and equipment 51,175,746 44,497,462

Intangible assets 28,759,910 18,178,362

Deferred tax assets 1,805,060 3,216,213

81,740,716 65,892,037

32. authorisation of financial stateMents for issue

The financial statements for the year ended 31 October 2015 were authorised for issue in accordance with a resolution of the directors on 24 February 2016.



cont’d

33. suPPleMentary inforMation - breaKDown of retaineD Profits into realiseD anD unrealiseD

The breakdown of the retained profits of the Group and of the Company as at 31 October 2015 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and 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.

Group company

2015 2014 2015 2014

rM rM rM rM

Total retained earnings of Adventa Berhad and its subsidiaries

- Realised 22,923,260 18,390,369 10,122,819 10,419,834

- Unrealised 2,007,169 3,219,891 226,724 47,000

24,930,429 21,610,260 10,349,543 10,466,834

Less: Consolidation adjustments (2,812,785) (2,582,613) - -

Retained earnings as per financial statements 22,117,644 19,027,647 10,349,543 10,466,834


List of PropertiesFor the year ended 31 October 2015

address/location Description/use

land area (square metres) tenure

age of building no. of years

net book value as at 31.10.2015

rM’000

Date of revaluation

or acquisition

electon beam sdn. bhd.

Lot PT 121634HSD 119754Mukim of KlangDistrict of KlangSelangor

Sterilisation plant, warehouse and office

17,098 99 yearsleasehold

expiring on24.02.2097

7 17,302 23 July 2012

PtM Progress trading & Marketing sdn. bhd.

Lot PT17HSM 9655Mukim of Sungai BuluhDistrict of PetalingSelangor

Warehouse 8,090 60 yearsleasehold

expiring on29.12.2055

6 14,204 22 December 2014


Statistics of Shareholdings As at 10 February 2016

Authorised Share Capital : RM70,000,000/-Issued and Paid-Up Capital : RM53,475,020 - comprising 152,785,770 Ordinary Shares of RM0.35 eachClass of Shares : Ordinary Shares of RM0.35 eachOn show of hands : One vote per shareholder/proxy presentOn a poll : One vote per Ordinary Share held

analysis of shareholDinGs

a. Distribution of shareholDinGs

range of shareholdingsnumber of

shareholders %number of

shares %

1- 99 138 5.60 6,109 0.00

100 - 1,000 491 19.94 397,852 0.26

1,001 - 10,000 1,355 55.01 6,157,344 4.03

10,001 - 100,000 411 16.69 12,948,061 8.47

100,001 to less than 5% of issued shares 64 2.60 37,321,752 24.43

5% and above of issued shares 4 0.16 95,954,652 62.81

total 2,463 100.00 152,785,770 100.00

b. substantial shareholDers (as shown in the Register of Substantial Shareholders)

Direct indirect

no. name no. of shares % no. of shares %

1. Low Chin Guan 58,446,552 38.25 (1)7,960,960 5.21

2. Wong Koon Mei @ Wong Kwan Mooi - - (2)66,407,512 43.46

3. Low Lea Kwan 7,960,960 5.21 (3)58,446,552 38.25

4. Lembaga Tabung Haji 14,335,900 9.38 - -

(1) Deemed interested by virtue of the family relationship between Mr. Low Chin Guan and Ms. Low Lea Kwan, who is his sister.

(2) Deemed interested by virtue of the family relationship between Madam Wong Koon Mei @ Wong Kwan Mooi and Mr. Low Chin Guan, who is her son and Ms. Low Lea Kwan, who is her daughter.

(3) Deemed interested by virtue of the family relationship between Ms. Low Lea Kwan and Mr. Low Chin Guan, who is her brother.


c. Directors’ shareholDinGs (as shown in the Register of Directors’ Shareholdings)

Direct indirect

no. name no. of shares % no. of shares %

1. Low Chin Guan 58,446,552 38.25 (1)7,960,960 5.21

2. Kwek Siew Leng 1,000,000 0.65 - -

3. Toh Seng Thong 200,000 0.13 - -

4. Edmond Cheah Swee Leng 140,000 0.09 - -

5. Dato’ Dr. Norraesah binti Haji Mohamad 140,000 0.09 - -

(1) Deemed interested by virtue of the family relationship between Mr. Low Chin Guan and Ms. Low Lea Kwan, who is his sister.

Mr. Low Chin Guan, by virtue of his total direct and indirect interests of 66,407,512 shares in the Company, and pursuant to Section 6A(4)(c) of the Companies Act, 1965, is deemed interested in the shares in all of the Company’s subsidiary companies to the extent that the Company has interests.

D. thirty (30) larGest securities account holDers

no. shareholders number of shares %

1. Low Chin Guan 58,446,552 38.25

2. HSBC Nominees (Asing) Sdn BhdExempt AN for Clearstream Banking S.A.

15,416,200 10.09

3. Lembaga Tabung Haji 14,335,900 9.38

4. Low Lea Kwan 7,756,000 5.08

5. Aphesus Limited 7,635,200 5.00

6. Sin Tong Meng 3,174,900 2.08

7. Public Nominees (Tempatan) Sdn BhdPledged Securities Account for Wong Yoke Fong @ Wong Nyok Fing (JRC)

1,888,000 1.24

8. CIMSEC Nominees (Tempatan) Sdn BhdCIMB Bank for Lai Kim Fook (MY0637)

1,577,328 1.03

9. Wong Yoke Fong @ Wong Nyok Fing 1,193,500 0.78

10. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lau Kooi See

1,171,100 0.77

11. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account for Mak Tian Meng

1,163,000 0.76

12. CIMSEC Nominees (Tempatan) Sdn BhdCIMB Bank for Mak Tian Meng (MY0343)

1,156,000 0.76

13. Wee Ye Yee 1,146,000 0.75

14. Amanahraya Trustees Berhad 1,000,000 0.65

15. Kwek Siew Leng 1,000,000 0.65

16. Emerson & CO.S.R.L. 775,500 0.51

17. TASEC Nominees (Tempatan) Sdn BhdPledged Securities Account for Sin Tong Meng

725,000 0.47

18. Theang Koh Keng 672,400 0.44

19. Liew Chuan Hau 614,264 0.40

Statistics of Shareholdings As at 10 February 2016cont’d


Statistics of Shareholdings As at 10 February 2016

cont’d

D. thirty (30) larGest securities account holDers cont’d

no. shareholders number of shares %

20. Lee Kok Hin 566,800 0.37

21. Chin Swee Ming 491,000 0.32

22. Lee Siew Chow 490,300 0.32

23. Foo Chooh Leong 460,000 0.30

24. Wee Ye Yee 438,000 0.29

25. Leang Saw Ying @ Leong Moh Yin 430,000 0.28

26. Loo Chee Lain 415,000 0.27

27. Wong Yoke Fong @ Wong Nyok Fing 410,000 0.27

28. M.Baaden Bin Asasmulia 400,000 0.26

29. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account for Tan See Seng (009)

359,100 0.24

30. Public Nominees (Tempatan) Sdn BhdPledged Securities Account for Yim Sing Chiew (KLC/TAS)

345,800 0.23

125,652,844 82.24


Notice of Thirteenth Annual General Meeting

notice is hereby Given that the Thirteenth Annual General Meeting of the Company will be held at 21, Jalan Tandang 51/205A, Seksyen 51, 46050 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 29 March 2016 at 10:30 a.m. for the following purposes:-

aGenDa

1. To receive the Audited Financial Statements for the financial year ended 31 October 2015 together with the Reports of the Directors and the Auditors thereon.

[Please refer to Explanatory Note (i)]

2. To approve the payment of Directors’ fees for the financial year ended 31 October 2015.

(Resolution 1)

3. To re-elect the following Directors who retire pursuant to Article 114 of the Company’s Articles of Association and being eligible, have offered themselves for re-election:-

(a) Mr. Low Chin Guan; and(b) Mr. Toh Seng Thong.

(Resolution 2)(Resolution 3)

4. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

(Resolution 4)

5. as special business

To consider and, if thought fit, to pass the following Ordinary Resolutions:-

orDinary resolution 1- authority to issue shares Pursuant to section 132D of the

coMPanies act, 1965

“that subject to Section 132D of the Companies Act, 1965 and approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND THAT such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

orDinary resolution 2- ProPoseD renewal of shareholDers’ ManDate for recurrent

relateD Party transactions of a revenue or traDinG nature

“that approval be and is hereby given to Adventa Berhad Group (“the Group”) to enter into and to give effect to specified recurrent related party transactions of a revenue or trading nature with the Related Parties as stated in Part A Section 1.5 of the Circular to Shareholders dated 7 March 2016, which are necessary for its day-to-day operations, to be entered into by the Group on the basis that this transaction is entered into on terms which are not more favorable to the Related Party involved than generally available to the public and are not detrimental to the minority shareholders of the Company (hereinafter referred to as the “Proposed renewal of shareholders’ Mandate”);

(Resolution 5)

(Resolution 6)


Notice of Thirteenth Annual General Meetingcont’d

that the Proposed Renewal of Shareholders’ Mandate is subject to annual renewal. In this respect, any authority conferred by the Proposed Renewal of Shareholders’ Mandate, shall only continue to be in force until:-

(a) the conclusion of the next Annual General Meeting (“aGM”) of the Company following the general meeting at which the Proposed Renewal of Shareholders’ Mandate was passed, at which time it will lapse, unless by resolution passed at the general meeting, the authority is renewed; or

(b) the expiration of the period within which the AGM after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965; or

(c) revoked or varied by resolution passed by the shareholders of the Company in general meeting,

whichever is the earlier;

anD that the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the Proposed Renewal of Shareholders’ Mandate.”

orDinary resolution 3- ProPoseD renewal of share buy-bacK authority of uP to 10%

of the issueD anD PaiD-uP share caPital of aDventa berhaD (“ProPoseD renewal of authority for share buy-bacK”)

“that, subject to the compliance with Section 67A of the Companies Act, 1965 and all other applicable laws, rules and regulations, approval be and is hereby given to the Company, to purchase such amount of ordinary shares of RM0.35 each in the Company (“shares”) as may be determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad (“bursa securities”) as the Directors may deem fit and expedient in the interest of the Company provided that the aggregate number of Shares to be purchased and held pursuant to this resolution does not exceed 10% of the existing issued and paid-up share capital of the Company including the Shares previously purchased and retained as treasury shares (if any), upon such terms and conditions as set out in Part B of the Circular to the Shareholders dated 7 March 2016.

anD that such authority shall commence immediately upon the passing of this ordinary resolution and until the conclusion of the next Annual General Meeting of the Company or the expiry of the period within which the next Annual General Meeting is required by law to be held unless revoked or varied by ordinary resolution in the general meeting of the Company but so as not to prejudice the completion of a purchase made before such expiry date, in any event in accordance with the provisions of the Main Market Listing Requirements of Bursa Securities and any other relevant authorities.

anD that the maximum amount of funds to be utilised for the purpose of the Proposed Renewal of Authority for Share Buy-Back shall not exceed the aggregate of the share premium and/or retained profits based on the latest audited financial statements and/or the latest management accounts of the Company (where applicable) available at the time of the purchase(s).

(Resolution 7)



anD that authority be and is hereby given to the Directors of the Company to decide in their absolute discretion to retain the Shares in the Company so purchased by the Company as treasury shares and/or to cancel them and/or to resell them and/or to distribute them as share dividends in such manner as may be permitted and prescribed by the provisions of the Main Market Listing Requirements of Bursa Securities and any other relevant authorities.

anD that authority be and is hereby given to the Directors of the Company to take all such steps as are necessary to enter into any agreements, arrangements and guarantees with any party or parties to implement, finalise and give full effect to the aforesaid with full powers to assent to any conditions, modifications, variations and/or amendments (if any) as may be imposed by the relevant authorities and to do all such acts and things as the Directors may deem fit and expedient in the interests of the Company.”

sPecial resolution- ProPoseD aMenDMent to articles of association of the coMPany

“that the following proposed amendment to the Articles of Association of the Company be approved and adopted:-

article no. existing article Deletion

138 (3) The interval between the close of a financial year end of the Company and the issue of annual financial statements relating to it and the Directors’ and auditors’ reports shall not exceed four (4) months.

The interval between the close of a financial year end of the Company and the issue of annual financial statements relating to it and the Directors’ and auditors’ reports shall not exceed four (4) months.

anD that the Directors of the Company be and is hereby authorised to do all such acts, deeds and things as are necessary and/or expedient in order to give full effect to the Proposed Amendment with full powers to assent to any conditions, modifications and/or amendments as may be required by any relevant authorities.”

(Resolution 8)

6. To transact any other ordinary business of which due notice has been given.

By Order of the Board

chua siew chuan (MAICSA 0777689)Pan senG wee (MAICSA 7034299)Company Secretaries

Kuala LumpurDated: 7 March 2016


Notes:

1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 22 March 2016 (“General Meeting Record of Depositors”) shall be eligible to attend the Meeting.

2. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where two (2) proxies are appointed, a member shall specify the proportion of his holdings to be represented by each proxy, failing which the appointment shall be invalid provided that where a member of the Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. If a member appoints two (2) proxies, he must specify which proxy is entitled to vote on a show of hands, only one (1) of those proxies is entitled to vote on a show of hands.

3. A proxy may but does not need to be a member of the Company and the provisions of Section 149 (1)(b) of the Companies Act, 1965 need not be complied with. Notwithstanding this, a member entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote instead of the member at the Meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly appointed under a power of attorney or if such appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a Power of Attorney.

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. The instrument appointing a proxy must be deposited at Securities Services (Holdings) Sdn. Bhd., Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

Explanatory Notes to Ordinary and Special Business:

i) Item 1 of the Agenda

This Agenda item is meant for discussion only, as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

ii) Ordinary Resolution 1 - Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

The Company wishes to renew the mandate on the authority to issue shares pursuant to Section 132D of the Companies Act, 1965 at the Thirteenth Annual General Meeting of the Company (hereinafter referred to as the “General Mandate”).

The Company had been granted a general mandate by its shareholders at the Twelfth Annual General Meeting of the Company held on 21 April 2015 (“the Previous Mandate”).

As at the date of this notice, the Previous Mandate granted by the shareholders had not been utilised and hence no proceeds were raised therefrom.

The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment project(s), working capital and/or acquisition(s).

iii) Ordinary Resolution 2 - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

The proposed adoption of the Ordinary Resolution in respect of the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature is intended to facilitate transactions in the normal course of business of the Group which are transacted from time to time with the specified classes of related parties, provided that they are carried out on an arm’s length basis and on the Group’s normal commercial terms and are not prejudicial to the shareholders on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders.



iv) Ordinary Resolution 3 - Proposed Renewal of Authority for Share Buy-Back

The proposed adoption of the Ordinary Resolution in respect of the Proposed Renewal of Authority for Share Buy-Back is to renew the authority granted by the shareholders of the Company at the Twelfth Annual General Meeting held on 21 April 2015. The proposed renewal will allow your Directors to exercise the power of the Company to purchase not more than 10% of the issued and paid-up share capital of the Company any time within the time period stipulated in Bursa Malaysia Securities Berhad Main Market Listing Requirements.

v) Special Resolution - Proposed Amendment to Articles of Association of the Company

The Proposed Amendment to Articles of Association of the Company is to streamline the Company’s Articles of Association to be aligned with the amendment to the Bursa Malaysia Securities Berhad Main Market Listing Requirements.

vi) Tenure of Independent Directors

The Board of Directors (“the Board”) opts to deviate from Recommendation 3.2 of the Malaysian Code on Corporate Governance 2012 which states that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an independent Director may continue to serve in the Board subject to the Director’s re-designation as a non-independent Director.

The Board is of the view that even though the tenure of Mr. Edmond Cheah Swee Leng, Mr. Toh Seng Thong and Dato’ Dr. Norraesah Binti Haji Mohamad has exceeded nine (9) years, there are significant advantages to be gained from long-serving Directors who not only possess tremendous insight in their various profession but also in-depth knowledge of the Company’s business and affairs.

Kindly refer to the Corporate Governance Statement in the Annual Report 2015 of the Company for further

information.



Assunta HospitalJalan Templer

Jalan Kilang 51/206

Pantai Baru Highway

Jalan Tandang

Jala

n 21

7

Jalan 204B

Jalan 204A

Jala

n 20

3

Jala

n 21

5

Jala

n 21

3

Jala

n Pe

ncha

la

Fede

ral H

ighw

ay

Jala

n Ki

lang

51/

205

Jalan PP Narayanan (Jln 222)TopMart

Federal HighwaySPRINT Highway

NKVETropicana

KualaLumpur

Subang, Shah Alam& Klang

KESASLDP

Puchong

Campbell Soup

GDEXMMLNestle

EON

P1 Green Packet

21, Jalan Tandang 51/205A,Seksyen 51,

46050 Petaling Jaya,Selangor Darul Ehsan

Location Map to AGM


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Form of Proxy

(Incorporated in Malaysia)

number of shares heldcDs account no.

*I/We (Full Name In Capital Letters)

of (Full Address)

being a Member of ADVENTA BERHAD, do hereby appoint (Full Name In Capital Letters)

of (Full Address)

or failing him/her (Full Name In Capital Letters)

of (Full Address)

or failing him/her, the CHAIRMAN OF THE MEETING, as *my/our proxy to attend and vote for *me/us and on *my/our behalf at the Thirteenth Annual General Meeting of the Company to be held at 21, Jalan Tandang 51/205A, Seksyen 51, 46050 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 29 March 2016 at 10:30 a.m. and at any adjournment thereof.

Please indicate with an “X” in the space provided below how you wish your votes to be cast. If no specific direction as to voting is given, the Proxy will vote or abstain from voting at his discretion.

item agenda1. To receive the Audited Financial Statements for the financial year ended 31 October

2015 together with the Reports of the Directors and the Auditors thereon.resolution for against

2. To approve the payment of Directors’ fees for the financial year ended 31 October 2015.

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3. To re-elect the Director, Mr. Low Chin Guan who retires pursuant to Article 114 of the Company’s Articles of Association.

2

4. To re-elect the Director, Mr. Toh Seng Thong who retires pursuant to Article 114 of the Company’s Articles of Association.

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5. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

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6. special businessOrdinary Resolution 1- Authority to issue shares pursuant to Section 132D of the Companies Act,

1965.

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7. Ordinary Resolution 2- Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party

Transactions of a Revenue or Trading Nature.

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8. Ordinary Resolution 3- Proposed Renewal of Authority for Share Buy-Back.

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9. special resolution- Proposed Amendment to Articles of Association of the Company

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* Strike out whichever not applicable. As witness my/our hand this day of 2016

Signature of Member/Common Seal Notes:

1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 22 March 2016 (“General Meeting Record of Depositors”) shall be eligible to attend the Meeting.

2. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where two (2) proxies are appointed, a member shall specify the proportion of his holdings to be represented by each proxy, failing which the appointment shall be invalid provided that where a member of the Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. If a member appoints two (2) proxies, he must specify which proxy is entitled to vote on a show of hands, only one (1) of those proxies is entitled to vote on a show of hands.

3. A proxy may but does not need to be a member of the Company and the provisions of Section 149 (1)(b) of the Companies Act, 1965 need not be complied with. Notwithstanding this, a member entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote instead of the member at the Meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly appointed under a power of attorney or if such appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a Power of Attorney.

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. The instrument appointing a proxy must be deposited at Securities Services (Holdings) Sdn. Bhd., Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

AFFIXSTAMP

1st Fold Here

Fold This Flap For Sealing

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The SecretaryaDventa berhaD (618533-M)

c/o Securities Services (Holdings) Sdn. Bhd.Level 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur

Documents

ADVENTA BERHAD Annual Report 2015 - Welcome to … BERHAD (618533-M) ANNUAL REPORT 2015 7 Directors’ Profiles cont’d EDMOND CHEAH SWEE LENG Chairman, Senior Independent Non-Executive