Contents Analysis of Shareholdings 92 ... KPMG, Penang AUDITORS Alliance Bank Malaysia Berhad AmBank (M) Berhad Hong Leong Bank Berhad ... On a macro outlook,

Contents

Corporate Information 2

Corporate Structure 3

Financial Highlights 4

Chairman’s Statement 5

Profile of The Board of Directors 6

Statement on Corporate Governance 8

Statement on Risk Management and Internal Control 13

Audit Committee Report 16

Other InformationRequired by Bursa Malaysia Securities Berhad’s Main Market Listing Requirements 19

Financial Statements 20

List of Properties 91

Analysis of Shareholdings 92

Notice of Annual General Meeting 94

Proxy Form

ANNUAL REPORT 2015 / POLY GLASS FIBRE (M) BHD. (42138-X) 2

KPMG, Penang

AUDITORS

Alliance Bank Malaysia Berhad

AmBank (M) Berhad

Hong Leong Bank Berhad

Malayan Banking Berhad

Public Bank Berhad

BANKERS

Main Market of Bursa Malaysia Securities Berhad

STOCK EXCHANGE LISTING

Symphony Share Registrars Sdn. Bhd.Level 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling Jaya, Selangor

REGISTRARS

Tel : 603 - 7841 8000Fax : 603 - 7841 8151

REGISTERED OFFICE

Suite 12-A, Level 12Menara NorthamNo. 55, Jalan Sultan Ahmad Shah10050 PenangTel : 604 - 228 0511Fax : 604 - 228 0518

BUSINESS ADDRESS

No. 2449, Lorong Perusahaan SepuluhKawasan Perusahaan Perai13600 Perai, Penang

Website : www.polyglass.my

Tel : 604 - 390 8460Fax : 604 - 399 6197

Ch’ng Lay Hoon

SECRETARY

BOARD OF DIRECTORS

Omar Bin Mohamed SaidIndependent Non-Executive Director

Khoo Kah HockIndependent Non-Executive Director

Fong Wern ShengExecutive Chairman & Chief Executive Officer

Tan Ming Chong

Chief Operating Officer

Fong Wah KaiExecutive Director

Sia Taik HianSenior Independent Non-Executive Director

CORPORATE INFORMATION


POLY GLASS FIBRE (M) BHD. (42138-X) / ANNUAL REPORT 2015 3

CORPORATE STRUCTURE

PGF InsulationSdn. Bhd.

(228905-M)

SK InsulationSolutions Sdn. Bhd.

(208649-A)

Clover Sdn. Bhd.(179152-D)

Golden ApproachSdn. Bhd.

(267743-W)

Concrete EnergySdn. Bhd.

(813919-M)

100%

100%

100%

100%

100%



FINANCIAL HIGHLIGHTS

Year Ended 28 February 2011RM’000

2012RM’000

2013RM’000

2014RM’000

2015RM’000

Turnover 32,730 31,680 33,926 40,601 43,923

Profit Before Taxation 7,433 6,742 23,215 6,268 6,130

Profit After Taxation 6,559 6,455 21,443 5,914 5,506

Profit Attributable to Shareholders 6,559 6,455 21,443 5,914 5,506

As at 28 February

Total Assets 127,893 139,435 172,819 177,112 178,048

Shareholders’ Funds 81,297 87,753 109,195 115,110 120,616

Net Earnings Per Share (Sen) 4.10 4.04 13.40 3.70 3.44

Net Assets Per Share (RM) 0.51 0.55 0.68 0.72 0.75

3.0

6.0

9.0

12.0

15.0

2011

4.10

4.04

13.4

0

3.70

3.44

Net Earnings Per Share (Sen)

20132012 2014

2011

7,43

3

6,74

2

23,2

15

6,26

8

6,13

0

Profit Before Taxation (RM’000)

20132012 2014

60,000

80,000

100,000

120,000

140,000

2011

81,2

97

87,7

53

109,

195

115,

110

120,

616

Shareholders’ Funds (RM’000)

20132012 2014

45,000 25,000

40,000 20,000

35,000 15,000

30,000 10,000

25,000 5,000

20,000 0

0 0

2011

32,7

30

31,6

80 33,9

26

40,6

01 43,9

23

Turnover (RM’000)

20132012 2014 2015

2015

2015

2015


CHAIRMAN’S STATEMENT

On behalf of the Board of Directors, I am pleased to present the Annual Report and the Financial Statements of the Group for the financial year ended 28 February 2015.

FINANCIAL RESULTS

For the current financial year to-date 28 February 2015, the Group achieved a revenue of RM43.92 million which was 8.1% or RM3.32 million higher than previous financial year. This is mainly due to the better sales of fibre glasswool to the export market.

The Group has registered a profit before tax (“PBT”) of RM6.13 million for the current financial year as compared to the preceding year’s PBT of RM6.27 million. The lower PBT is mainly due to the reversal of impairment loss for property owned by Clover Sdn. Bhd. back in financial year of 2014.

The fibre glasswool segment recorded a PBT of RM6.12 million, which represents an increase of 11% as compared to preceding year’s PBT of RM 5.52 million. The increase was derived from better production volume and sales.

OPERATION REVIEW

Financial year 2015 (“FY2015”) has been a challenging year for fibre glasswool segment. A strong Ringgit Malaysia for most part of FY2015 reduced the export competitiveness for our products. Depreciation of Ringgit Malaysia in the last quarter of FY2015, however, did have a positive impact on price and volume as importers found it less lucrative.

There were also increases in utility costs to contend with. Effective 1 January 2014, the electricity tariff went up by 16%, followed closely by a 19% increase in the natural gas tariff which was implemented on 1 May 2014. The knock-on inflationary costs affected our bottomline. The Group mitigated the impact through automation, process and technology enhancement.

PROSPECTS

Insulation business is expected to be the major driving force of the Group’s profitability. The next financial year will continue to present challenges to the Group due to high inflation, volatile currency and the implementation of Goods and Services Tax effective 1 April 2015. All of these are expected to contribute to a higher operating cost environment.

On the other hand, the recent announcement by the government that there will be no further energy subsidy rationalization in 2015 will help the Group to keep its operating expenses under control. The low petrol prices, if continued, will also bode well for our business. Notwithstanding the above, plant upgrades and additional warehousing space are in the pipeline in order to mitigate these risks through optimizing manufacturing capacity.

On a macro outlook, economies of the key markets that we are involved in, namely ASEAN, Oceania and Japan are expected to grow steadily. As we celebrate the 30th Anniversary in 2015 of our fibre glasswool manufacturing arm, sales and marketing activities are planned for domestic and international markets to promote the Ecowool brand. The Group will also continue its effort to grow the insulation business organically and vertically into downstream activities.

The property division of the Group will continue to seek for opportunity to improve the value of its development properties in Diamond Creeks Country Retreat.

DIVIDENDS

The Board of Directors does not recommend any dividend for the financial year ended 28 February 2015.

APPRECIATION

On behalf of the Board of Directors, I wish to extend my appreciation to the shareholders, customers and business associates for their continued support and to our employees for their hard work and dedication to the Group.

Fong Wern ShengExecutive Chairman

PROFILE OF THE BOARD OF DIRECTORS

Fong Wern Sheng, 34, a Malaysian

Tan Ming Chong, 35, a Malaysian

Fong Wah Kai, 68, a Malaysian

Sia Taik Hian, 51, a Malaysian

Appointed on the Board as an Executive Director of the Company on 7 October 2003 and re-designated as the Chief Executive Officer of the Company on 18 January 2012. He is also the Executive Chairman of the Company, a position he held since 3 June 2008. He holds a Hon. Bachelor of Management & Information Technology degree from University of Manchester Institute of Science & Technology. He began his career in the Company as a Risk Management Manager in 2003.

Mr. Fong Wern Sheng is a member of the Remuneration Committee.

He has attended all the five (5) Board Meetings held during the financial year ended 28 February 2015.

Appointed on the Board as an Executive Director of the Company on 17 May 2010 and re-designated as the Chief Operating Officer of the Company on 18 January 2012. He holds a Master Degree in Economics from University of Warwick and a Bachelor in Economics from London School of Economics.

Prior to joining the Company, he was a Manager in the business advisory division of Ernst & Young where he was involved in various types of organization improvement projects with clients in different industries.

Mr. Tan has attended all the five (5) Board Meetings held for the financial year ended 28 February 2015.

Appointed on the Board as an Executive Director of the Company on 25 March 1989. He served as an Executive Director in his family business for the past thirty (30) years.

Mr. Fong has attended three (3) out of the five (5) Board Meetings held during the financial year ended 28 February 2015.

Appointed on the Board as an Independent Non-Executive Director and the Chairman of the Audit Committee of the Company on 22 June 2001. He is currently the Senior Independent Non-Executive Director of the Company. He is a Chartered Accountant and has more than 20 years of extensive experiences in all aspects of the accounting profession.

He is a member of the Malaysian Institute of Accountants, a member of the Australia Society of Certified Practising Accountants, a member of the Association of Taxation and Management Accountants, a fellow member of the Taxation Institute of Australia and an associate member of the Australian Computer Society.

In 1994-2000, he was the Finance & Administration Manager of Gemtech Resources Bhd. In 2000 – 2013, he was the Director of Genesis Square Sdn Bhd, a private limited company.

Mr. Sia is also the Chairman of the Audit Committee, the Remuneration Committee and the Nominating Committee.

Mr. Sia has attended all the five (5) Board Meetings held during the financial year ended 28 February 2015.


PROFILE OF THE BOARD OF DIRECTORS (Cont’d)

Omar Bin Mohamed Said, 33, a Malaysian

Khoo Kah Hock, 47, a Malaysian

Appointed on the Board as an Independent Non-Executive Director of the Company on 7 October 2003. He holds a Hon. Bachelor of Management (Accounting and Finance) degree from University of Manchester Institute of Science & Technology. Upon graduation, he was attached with Ernst & Young from 2003- 2006. Currently he is the Managing Director of a local company specialising in downstream retail oil and gas. He is the Non-Independent Non-Executive Director of Turbo Mech Berhad, a company listed on the Main Market of Bursa Malaysia Securities Berhad.

Encik Omar is a member of the Audit Committee, the Remuneration Committee and the Nominating Committee.

He has attended four (4) out of all the five (5) Board Meetings held during the financial year ended 28 February 2015.

Appointed on the Board as an Independent Non-Executive Director of the Company on 12 December 2012. He graduated from City and Guilds of London Institute, United Kingdom in 1994 with a Professional Certificate in Engineering (Electrical/Electronic), major in Electrical Engineering and subsequently from University of Southern Pacific, United States of America in 2006 with a Master Degree in Business Administration.

He has more than 23 years of experience in equipment maintenance, production and engineering skills including all areas of technical training, strong knowledge of analytical skills with knowledge of Six Sigma, Lean Manufacturing, LeanSigma, Supply Chain, SPC, FMEA & OEE and familiarity with Hard Disk Drive, Head sliders, Tape Head, Tape Drives, Lead frame Plating and PCB manufacturing process.

Mr. Khoo is a member of the Audit Committee, the Nominating Committee and the Remuneration Committee.

Mr. Khoo has attended all the five (5) Board Meetings held during the financial year ended 28 February 2015.

Notes:

1. AlltheDirectorsdonothaveanyconflictofinterestwiththeGroupotherthanasdisclosedinNote14oftheFinancialStatements.

2. AlltheDirectorshavenotbeenconvictedforanyoffenceswithinthepasttenyearsotherthanfortrafficoffences,ifany.

3. AlltheDirectorshavenofamilyrelationshipwithanyotherDirectorsormajorshareholdersoftheGroupwiththeexceptionofMr.FongWahKai,theExecutiveDirectorandsubstantialshareholderoftheCompanyisthefatherofMr.FongWernSheng,theCompany’sExecutiveChairmanandChiefExecutiveOfficerandasubstantialshareholderoftheCompany.

4. TheDirectors’shareholdingsareasdisclosedinpage92ofthisAnnualReport.


STATEMENT ON CORPORATE GOVERNANCE

The Board of Directors fully appreciates the importance of adopting high standards of corporate governance within the Group. The Board views corporate governance as synonymous with three key concepts, namely transparency, accountability and integrity.

The Board evaluates the status of the Group’s corporate governance practices with a view to adopt and apply, where practicable, the Principles of Malaysian Code on Corporate Governance 2012 (the “Code”) respectively. As such, the Board is fully committed to the maintenance of high standards of corporate governance in its quest to enhance shareholder value.

The Board is pleased to provide the following statement, which outlines the main corporate governance practices that were in place throughout the financial year under review unless otherwise stated.

A. BOARD OF DIRECTORS

BOARD RESPONSIBILITIES

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 shareholder value. To fulfill this role, the Board is responsible for the overall corporate governance of the Group, including the strategic direction, risk management, establishing goals for Management and monitoring the achievement of these goals. The Board is aware of the importance of succession planning and is in the process of developing suitable programmes in place to ensure that operations at all levels are run smoothly.

MEETINGS

The Board meets at least four (4) times a year at quarterly intervals with additional meetings convened when urgent and important decisions need to be taken between the scheduled meetings. During the year ended 28 February 2015, the Board met on five (5) occasions, where it deliberated upon and considered a variety of matters including the Group’s financial results, major investments, strategic decisions and the direction of the Group.

The Board receives documents on matters requiring its consideration prior to and in advance of each meeting. During the meetings, the Board is briefed by the Chief Operating Officer and Executive Directors on the performance of the Group. All proceedings from Board meetings are recorded and the minutes thereof signed by Chairman of the meeting.

Details of Directors’ attendances at meetings of the Board and Audit Committee during the financial year under review are as follows :-

DIRECTOR BOARD AUDIT COMMITTEE

Mr. Fong Wern Sheng 5/5 –

Mr. Tan Ming Chong 5/5 –

Mr. Fong Wah Kai 3/5 –

Mr. Sia Taik Hian 5/5 5/5

Encik Omar Bin Mohamed Said 4/5 4/5

Mr. Khoo Kah Hock 5/5 5/5

BOARD COMMITTEES

The Board of Directors delegates certain responsibilities to the Audit Committee, Nominating Committee and Remuneration Committee in order to enhance business and operational efficiency as well as efficacy.

The Audit Committee has written terms of reference and the Board receives reports of its proceedings and deliberations. The Chairman of the Audit Committee reports to the Board the outcome of the Committee meetings and extracts of such reports are incorporated in the minutes of the full Board meeting.



STATEMENT ON CORPORATE GOVERNANCE (Cont’d)

BOARD BALANCE

At the date of this statement, the Board consists of six (6) members, comprising three (3) Independent Non-Executive Directors and three (3) Executive Directors. The Board has complied with Paragraph 15.02 of the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements that stipulates at least two (2) Directors or one-third (1/3) of the Board of the Company, whichever is the higher, are Independent Directors.

The Directors, with their different backgrounds and specializations, collectively bring with them a wide range of experience and expertise in areas such as finance, corporate affairs, marketing and operations. With this mix of expertise, the Company is essentially led and guided by an experienced and competent Board. A brief profile of each Director is presented on pages 6 and 7 of this Annual Report.

The Chairman ensures that there is division of responsibilities to balance authority and power and no individual would dominate the Board’s decision making while he always encourages participation from all Directors for Board meetings.

Pursuant to Best Practices of the Code, the Board has appointed Mr. Sia Taik Hian as the Senior Independent Non-Executive Director of the Board to whom concerns of Directors, Shareholders, Management and others may be conveyed.

The Board is satisfied that the current Board composition fairly reflects the investment of all shareholders in the Company.

SUPPLY OF INFORMATION

The Chairman, with the assistance of the Company Secretary, ensures that all Directors have full and timely access to information with Board papers distributed in advance of meetings. Every Director also has unhindered access to the advice and services of the Company Secretary. The Board believes that the current Company Secretary is capable of carrying out her duties to ensure the effective functioning of the Board. The Articles of Association specify that the Board may remove any secretary so appointed.

Prior to the meetings of the Board and the Audit Committee, appropriate documents which include the agenda and reports relevant to the issues of the meetings covering the areas of strategic, financial, operational and regulatory compliance matters, are circulated to all the members to obtain further explanation, where necessary, in order to be properly briefed before the meeting.

The Directors review and approve all quarterly financial results and announcements before releasing them to Bursa Securities.

The Directors collectively determine, whether as a full Board or in their individual capacity, to take independent professional advice, where necessary and under appropriate circumstances, in furtherance of their duties, at the Group’s expense.

APPOINTMENT TO THE BOARD

NominatingCommittee

The Board had on 26 January 2006 established the Nominating Committee which shall be primarily responsible for identifying and recommending new nominees to the Board. Besides this, the Committee shall also assess the effectiveness of the Board, the committees of the Board and contributions of each director on an ongoing basis and annually review the required mix of skills, experiences and other qualities including core competencies. The recommendations of the Committee will be subject to the approval of the Board.

As the date of this report, the members of the Nominating Committee comprise :-

Mr. Sia Taik Hian Senior Independent Non-Executive DirectorEncik Omar Bin Mohamed Said Independent Non-Executive DirectorMr. Khoo Kah Hock Independent Non-Executive Director

All members of the Nomination Committee are Non-Executive Independent Directors.

The Committee shall meet whenever there is a need for the Committee to perform its function, and at least once every year in carrying out an annual review of the Board, its Committees and the contribution of individual Directors to the Company.



DIRECTORS’ TRAINING

Directors are encouraged to attend any form of training to enhance their knowledge and expertise in relations to the industry, laws and regulations, business environment and etc. The Directors continue to attend relevant seminars and programmes to keep their knowledge and expertise updated.

In FY 2015, training programmes attended by Directors of the Company are as follows :-

1. 2014 Continuous Director Education2. Executive Tax & GST Briefing3. Knowing Your Goods and Service Tax4. Mastering Leadership, Management & Supervisory Skills5. Seminar on MS 1525:2014

In addition to the above, Directors are updated on the recent developments in the areas of statutory and regulatory requirements from briefings by the External Auditors, Company Secretary and the Internal Auditors during the Audit Committee and Board Meetings.

RE-ELECTION

The Articles of Association provide that all Directors of the Company are subject to retirement. At least one-third of the Directors for the time being, of if their number is not three (3) or a multiple of three (3), then the number nearest to, but not more than one-third (1/3) of the total shall retire from office at the Annual General Meeting, provided always that all Directors shall retire from office at least once in every three (3) years. A retiring Director shall be eligible for re-election. This provides an opportunity for shareholders to renew their mandates.

The election of each Director is voted on separately. To assist shareholders in their decision, sufficient information such as personal profile, attendance of meetings and the shareholdings in the Group of each Director standing for election are furnished in the Annual Report accompanying the Notice of the Annual General Meeting.

Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with Section 129 (6) of the Companies Act, 1965.

The Company Secretary ensures that all the necessary information is obtained and that all legal and regulatory obligations are met before the appointments are made.

B. DIRECTOR’S REMUNERATION

Remuneration Committee

The Remuneration Committee established on 26 January 2006 consists mainly of Independent Non-Executive Directors with members as follows :-

Mr. Sia Taik Hian Senior Independent Non-Executive DirectorEncik Omar Bin Mohamed Said Independent Non-Executive DirectorMr. Khoo Kah Hock Independent Non-Executive DirectorMr. Fong Wern Sheng Executive Chairman

The Remuneration Committee shall be responsible for developing the remuneration policy and determining the remuneration packages for Executive Directors of the Company.

The Company’s policy on Directors’ remuneration is to attract and retain the Directors of calibre needed to manage the business of the Company and to align the interest of the Directors to those of the shareholders.

The determination of the remuneration of each Non-Executive Director is decided by the Board as a whole, with individual Directors abstaining from decisions in respect of their individual remuneration.



The Company pays each Non-Executive Director an annual fee, which is approved by the shareholders at the Annual General Meeting. The Board, as a whole, determines the remuneration of the Executive Directors, with the individual Directors concerned abstaining from decision in respect of their individual remuneration. Details of the Directors’ remuneration for the financial year are under review as follows :-

DIRECTORS REMUNERATION RM

FEESRM

OTHER EMOLUMENTS

RMBENEFITS-IN-KIND

RM

Executive 964,226 – – 18,755

Non-Executive – 25,200 7,200 –

The number of Directors whose remuneration falls into the following bands comprises :-

RANGE OF REMUNERATION NUMBER OF DIRECTORSRM Executive Non-Executive

0 – 50,000 – 3250,001 – 300,000 1 –300,001 – 350,000 2 –

C. SHAREHOLDERS

The Company recognizes the importance of communicating with its shareholders and does this through the Annual Report, Annual General Meeting (“AGM”) and Extraordinary General Meeting. It is the Company’s practice to send the Notice of AGM and related papers to shareholders at least twenty-one (21) working days before the meeting. At the AGM, the shareholders are encouraged to ask questions both about the resolutions being proposed or about the Group’s operations in general.

In addition, the Company makes various announcements through Bursa Securities, in particular, the timely release of the quarterly results within two (2) months from the close of a particular quarter. Members of the public can also obtain the full financial results and the Company’s announcements from Bursa Securities’ website.

D. ACCOUNTABILITY AND AUDIT

FINANCIAL REPORTING

The Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements, quarterly announcements of the results to shareholders and the Chairman’s statement in the Annual Report. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting.

DIRECTORS’ RESPONSIBILITY STATEMENT IN RESPECT OF THE PREPARATION OF THE AUDITED FINANCIAL STATEMENTS

The Board is responsible for ensuring that the financial statements of the Group give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and of their results and cashflows for the year then ended. In preparing the financial statements, the Directors have ensured that applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied.

In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies and made reasonable and prudent judgements and estimates.

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

STATE OF INTERNAL CONTROLS

The Statement on Risk Management and Internal Control furnished on pages 13 to 15 of this Annual Report provides an overview on the state of internal controls within the Group during the financial year.



RELATIONSHIP WITH THE AUDITORS

Key features underlying the relationship of the Audit Committee with the internal and external auditors are included in the Audit Committee’s terms of reference as detailed on pages 16 to18 of this Annual Report.

A summary of the activities of the Audit Committee during the financial year, including the evaluation of the independent audit process, are set out in the Audit Committee Report on pages 16 to 18 of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Board has been aware of the importance of the practice of Corporate Social Responsibility. Throughout the year, the Group had contributed donations to some cooperative societies. The Group has also initiated a donation drive to help the flood victims that was affected by the Malaysian East Coast in 2015.

The Company is committed to spend on promoting the use of fibre glasswool products for building industry in Malaysia. The Group has provided free insulation to schools to improve occupants comfort and raise awareness of energy efficiency.

The manufacturing arm of the Group has continued to take initiatives to reduce carbon footprints in all areas of its operations, e.g. adopting energy efficient equipment to lower energy consumption and increase the use of recycled materials in its manufacturing process. Within the working environment, in the face of growing demand for energy and depleting natural resources, employees are encouraged to reduce the use of paper, recycle any recyclable items and reduce wastages.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

The Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) requires public listed companies to maintain a sound system of risk management and internal control to safeguard shareholders’ investments and company’s assets. Under the provisions of the Bursa Malaysia Securities Berhad Main Market Listing Requirements (“Main Listing Requirements”), under paragraph 15.26(b), Directors of public listed companies are required to produce a statement on the state of the Group’s internal control in their Annual Report.

The Board of Directors (“Board”) continues with its commitment to maintain sound systems of risk management and internal control throughout Poly Glass Fibre (M) Bhd and its subsidiaries (“Group”) and in compliance with the Main Listing Requirements and the Statement on Risk Management and Internal Control (Guidelines for Directors of Listed Issuers) (“Internal Control Guidelines”), the Board is pleased to provide the following statement which outlines the nature and scope of risk management and internal control of the Group during the financial year in review.

BOARD RESPONSIBILITY

The Board acknowledges the importance of sound risk management and internal control being embedded into the culture, processes and structures of the Group. The systems of internal control cover risk management and financial, organizational, operational, project and compliance controls. The Board affirms its overall responsibility for the Group’s systems of internal control and for reviewing the effectiveness and efficiency of those systems to ensure its viability and robustness. It should be noted, however, that such systems are designed to manage, rather than eliminate, risks of failure to achieve corporate objectives. Inherently, it can only provide reasonable and not absolute assurance against material misstatement or loss.

The Group has established an ongoing process for identifying, evaluating, monitoring and managing significant risks faced, or potentially exposed to, by the Group in pursuing its corporate objectives. The adequacy and effectiveness of this process have been continually reviewed by the Board and are in accordance with the Internal Control Guidelines.

RISK MANAGEMENT COMMITTEE’S ROLE

The Board confirms that there is an on-going process for identifying, assessing and responding to risks to achieve the objectives of the Group for the financial year under review. The process is in place for the period under review and up to the date of issuance of the Statement on Risk Management and Internal Control.

The Risk Management Committee (“RMC”) is accountable to the Board for the implementation of the processes in identifying, evaluating, monitoring and reporting of risks and internal control. On an annual basis, the Chief Executive Officer, Chief Operating Officer and Senior Group Finance Manager have provided the Board the assurance that the Group’s risk management and internal control systems are operating adequately and effectively, in all material aspects, to ensure achievement of corporate objectives.

CONTROL STRUCTURE AND ENVIRONMENT

In furtherance to the Board’s commitment to maintain sound systems of risk management and internal control, the Board continues to maintain and implement a strong structure and environment for the proper conduct of the Group’s business operations as follows :

• The Board meets at least quarterly and has set a schedule of matters which is required to be brought to its attention for discussion, thus ensuring that it maintains full and effective supervision over appropriate controls. The Chief Operating Officer provides explanation to the board papers on pertinent issues. In addition, the Board is kept updated on the Group’s activities and its operations on a regular basis;

• An organization structure with well-defined scopes of responsibility, clear lines of accountability, and appropriate levels of delegated authority;

• A process of hierarchical reporting which provides for a documented and auditable trail of accountability;

• A set of documented internal policies and procedures for operational and human resource management, which is subject to regular review and improvement. A documented delegation of authority with clear lines of accountability and responsibility serves as a tool of reference in identifying the approving authority for various transactions including matters that require Board’s approval;

• Regular and relevant information provided to management, covering financial and operational performance and key business indicators, for effective monitoring and decision making;

• Regular visits to operating units by members of the Board and senior management.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (Cont’d)

RISK MANAGEMENT

The Group has established sound risk management practices to safeguard the Group’s business interest from risk events that may impede the achievement of business strategy, enable value creation and growth through identification of opportunities and provide assurance to the Groups’ various stakeholders.

The Group has engaged an independent professional accounting and consulting firm, to implement the Enterprise Risk Management (“ERM”) processes to identify, assess, monitor, report and mitigate risks impacting the Group’s business and supporting activities.

The main components of the Group’s risk governance and structure consists of the Board, the Audit Committee and the RMC. The structure allows for strategic risk discussions to take place between the Board, the Audit Committee and the RMC on a periodical basis. The summary of the accountabilities for the Board, the Audit Committee and the RMC under the risk governance structure are as follows :

A. BOARD OF DIRECTORS• Overall risk oversight responsibility;• Determines that the principal risks are identified, and appropriate as well as robust systems are implemented to manage

these risks; and• Reviews the adequacy and the integrity of the Group’s internal control systems and information systems, including

systems for compliance with applicable laws, regulations, rules, directives and guidelines.

B. AUDIT COMMITTEE• Reviews and endorses policies and frameworks and other key components of risk management for implementation within

the Group; and• Reviews and endorses the corporate risk profile for the Group, and the progress of ongoing risk management activities

to identify, evaluate, monitor and manage critical risks.

C. RISK MANAGEMENT COMMITTEE• Oversees the effective implementation of risk policies and guidelines, ERM and cultivation of risk management culture

within the organization; and• Reviews and monitors periodically the status of the Group’s principal risks and their mitigation actions and update the

Board and Audit Committee accordingly.

During the year, the Group has identified some significant risks which are critical to the success of the business. The likelihood and impact of the risks have been assessed and appropriate mitigation actions have been identified for the risks.

Risk awareness sessions have been incorporated in the monthly management meetings attended by the Group’s senior and middle management and key employees. This is part of the ongoing initiative to sustain risk awareness and risk management capabilities.

In essence, Risk Management is conducted through an ongoing process between the Board, the Management and employees in the Group. The Group believes that the risk management framework and guidelines adopted and implemented have strengthened the risk ownership and risk management culture amongst the employees.

INTERNAL AUDIT FUNCTION

The Board acknowledges the importance of the internal audit function and has engaged the services of an independent professional consulting firm, UHY Governance Sdn. Bhd. to provide much of the assurance it requires regarding the effectiveness as well as the adequacy and integrity of the Group’s systems of internal control.

The internal audit adopts a risk-based approach in developing its audit plan which addresses all the core auditable areas of the Group based on their risk profile. Scheduled internal audits are carried out by the internal auditors based on the audit plan presented to and approved by the Audit Committee.

The Audit Committee has full and direct access to the internal auditors and the Audit Committee receives reports on all internal audits performed. The Internal Auditors continue to independently and objectively monitor compliance with regard to policies and procedures, and the effectiveness of the internal controls systems. Significant findings and recommendations for improvement are highlighted to Management and the Audit Committee, with periodic follow-up of the implementation of action plans. The Management is responsible for ensuring that corrective actions were implemented accordingly.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (Cont’d)

INTERNAL AUDIT FUNCTION (CONT’D)

Based on the internal auditors’ reports for the financial year ended 28 February 2015, there is a reasonable assurance that the Group’s systems of internal control are generally adequate and appear to be working satisfactorily. A number of minor internal control weaknesses were identified during the financial year, all of which have been, or are being, addressed. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group’s annual report.

The Board continues to review and implement measures to strengthen the internal control environment of the Group.

CONCLUSION

The Board, having received assurance from the Chief Executive Officer, Chief Operating Officer and Senior Group Finance Manager, is satisfied with the adequacy and effectiveness of the Group’s risk management and internal control system for the year under review and up to the date of approval of this Statement. There were no material internal control weaknesses which had resulted in material losses, contingencies or uncertainties that would require disclosure in this Annual Report.

This statement is issued in accordance with a resolution of the Directors dated 30 June 2015.


AUDIT COMMITTEE REPORTFOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2015

1. CONSTITUTION

The Audit Committee (the “Committee”) was established by the Board in 1994 as the prime body to assist the Board in ensuring a high standard of corporate responsibility, integrity and accountability to shareholders in line with the corporate governance and disclosure standards expected from that of a public listed company in Malaysia.

The present members of the Committee are :-

Mr. Sia Taik Hian - Chairman/ Senior Independent Non-Executive Director

En. Omar Bin Mohamed Said - Member/ Independent Non-Executive Director

Mr. Khoo Kah Hock - Member/ Independent Non-Executive Director

2. TERMS OF REFERENCE

The terms of reference of the Committee are as follows :-

2.1 OBJECTIVES

The principal objective of the Committee is to assist the Board of Directors in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the Company and each of its subsidiaries. In addition, the Committee shall :-

a) oversee and appraise the quality of the audit conducted by the internal and external auditors;b) oversee compliance with laws and regulations and observance of a proper code of conduct; andc) determine the adequacy of the control environment of the Group.

2.2 COMPOSITION

The Committee shall be appointed by the Board from among their number (pursuant to a resolution of the Board of Directors) and shall consist of not less than three (3) members, a majority of whom shall be Independent Non-Executive Directors and at least one of whom shall be :-• a member of the Malaysian Institute of Accountants (“MIA”) or• if the Director is not a member of the MIA, the Director must have at least three (3) years of working experience and :-

- the Director must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967, or

- the Director must be a member of the associations of accountants specified in Part II of the First Schedule of the Accountants Act, 1967.

- fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad (“Bursa Securities”).

If a member of the Committee resigns, dies or for any other reason ceases to be a member with the result that the number of members is reduced to below three (3), the Board shall, within three (3) months of the event appoint such number of new members as may be required to fill the vacancy.

The Chairman of the Committee shall be an Independent Non-Executive Director. No alternate Director of the Board shall be appointed as a member of the Committee.

The Board shall review the terms of office and performance of the Committee and each of its members at least once every three (3) years to determine whether the Committee and its members have carried out their duties in accordance with their terms of reference.

2.3 MEETINGS

The Committee will meet at least four (4) times a year and such additional meetings as the Chairman shall decide in order to fulfill its duties. Where relevant and appropriate, the internal auditor and representatives of the external auditors shall normally be invited to attend meetings. The external auditors or any member of the Committee may request a meeting if they consider one necessary.

The Committee shall meet at least twice a year with the external auditors without the presence of any Executive Director of the Board. The Committee may, as and when deemed necessary, invite other Board members and senior management members to attend the meetings.


AUDIT COMMITTEE REPORT (Cont’d)FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2015

2. TERMS OF REFERENCE (CONT’D)

2.3 MEETINGS (Cont’d)

The Company Secretary shall be responsible, with the concurrence of the Chairman, for preparing and circulating the Agenda and the Notice of Meeting, together with supporting explanatory documentation to members of the Committee prior to each meeting. The minutes of each meeting shall be kept and distributed to members of the Committee and the Board of Directors.

In order to form a quorum in respect of a meeting of an Audit Committee, the majority of members present must be

Independent Directors.

The Committee shall regulate the manner of proceedings of its meetings, having regard to normal conventions on such matter.

2.4 AUTHORITY

The Committee is authorised by the Board :-

a) to investigate any matter within its terms of reference;b) to have the resources in order to perform its duties as set out in its terms of reference;c) to have full and unrestricted access to any information pertaining to the Company and the Group;d) to have direct communication channels to the internal and external auditors;e) to obtain, at the expense of the Company, external legal or other independent professional advice if it considers

necessary; andf) to meet with the external auditors, excluding the attendance of the executive members of the Committee, whenever

deemed necessary.

2.5 DUTIES

The duties of the Committee are :-

a) to recommend to the Board the nomination of a person or persons as external auditors and the audit fees thereof;b) to make appropriate recommendations to the Board on matters of resignation or dismissal of the external auditors;c) to consider whether there is reason (supported by grounds) to believe that the external auditors are not suitable for

re-appointment; d) 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;e) to review with the external auditors, their evaluation of the system of internal controls;f) to review the assistance given by the employees of the Company to the external auditors;g) to review the quarterly and year-end financial statements of the Company and the Group before submission to the

Board of Directors, focusing particularly on :-• any changes in or implementation of major accounting policies;• significant and unusual events;• significant adjustments arising from the audit;• the going concern assumption; and• compliance with accounting standards and other legal requirements.

h) to discuss problems and reservations arising from the interim and final external audits, and any matters the external auditors, the internal auditors or both, may wish to discuss, excluding the attendance of other Directors and employees of the Company, whenever deemed necessary;

i) to review the external auditors’ management letter and management’s response thereto;j) to establish the following with the internal auditor :-

• review adequacy of scope, functions, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work;

• review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate action is taken on the recommendations of the internal audit function;

• review any appraisal or assessment of the performance of members of the internal audit function; and• approve any appointment or termination of senior staff members associated with the internal audit function and

to provide opportunity for the resigning staff member to submit his reasons for resigning.k) to consider any related party transactions and conflict of interest situation that may arise within the Company or the

Group, including any transaction, procedure or course of conduct that raises questions of management integrity;l) to review the effectiveness of internal control system; m) to consider the major findings of internal investigations and management’s response; andn) any such other functions as may be authorised by the Board.


AUDIT COMMITTEE REPORT (Cont’d)FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2015

2. TERMS OF REFERENCE (CONT’D)

2.6 REPORTING PROCEDURES

The Chairman of the Committee shall report on each meeting to the Board. The Committee shall prepare reports, at least once a year, to the Board summarizing the Committee’s activities during the year in discharge of its duties and responsibilities and the related significant results and findings.

Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Bursa Malaysia Securities Berhad (“Bursa Securities”) Listing Requirements, the Committee shall promptly report such matter to Bursa Securities.

3. ACTIVITIES OF THE AUDIT COMMITTEE

There were five (5) meetings convened the financial year ended 28 February 2015.

Details of the attendance of members at the Audit Committee Meetings are as follows :-

ATTENDANCE

Mr. Sia Taik Hian 5/5

Encik Omar Bin Mohamed Said 4/5

Mr. Khoo Kah Hock 5/5

In line with the terms of reference, the following activities were carried out by the Committee during the financial year ended 28 February 2015 in discharge of its duties and responsibilities :-(a) reviewed the internal audit plan and reports;(b) reviewed the audit plan of the external auditors;(c) reviewed the audit report for the Company and Group prepared by the external auditors and considered the major

findings by the external auditors and management’s responses thereto;(d) reviewed the unaudited quarterly financial results of the Company and Group with Management prior to submission to the

Board for consideration and approval; and(e) followed up on corrective actions taken by Management on the audit issues raised by the external auditors and internal

auditors.

4. INTERNAL AUDIT FUNCTION

Internal audit function was conducted by an outsourced professional firm with an objective that independent feedback and reviews will be provided to the Audit Committee and subsequently the Board of Directors. The Audit Committee reviewed through the findings of the internal auditors to ensure that any major weaknesses are recognized and rectified on a timely basis, and an effective and efficient internal control system is well maintained.

Two (2) internal audit reports were provided to the Audit Committee this year. The internal auditors reported on their findings, recommended corrective measures to be taken by the management and the management responses thereto. Subsequently, the internal auditors followed up on the extent of their recommendations being implemented.

During the financial year, there was no material internal control weakness that would have resulted in any significant loss to the Group.

The internal audit cost incurred for the financial year ended 28 February 2015 was RM16,960. Further details of the activities of the internal audit function are set out in the Statement on Risk Management and Internal Control on pages 13 to 15 of this Annual Report.


OTHER INFORMATIONREQUIRED BY BURSA MALAYSIA SECURITIES BERHAD’S MAIN MARKET LISTING REQUIREMENTS

1. UTILISATION OF PROCEEDS

During the financial year ended 28 February 2015, the Company did not raise any proceeds.

2. SHARE BUYBACKS During the financial year ended 28 February 2015, the Company did not enter into any share buyback transactions.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES No options were granted to any person to take up unissued shares or debentures of the Company.

4. AMERICAN DEPOSITORY RECEIPT (ADR)/ GLOBAL DEPOSITORY RECEIPT (GDR)

During the financial year ended 28 February 2015, the Company did not sponsor any ADR/GDR programme.

5. IMPOSITION OF SANCTIONS AND/OR PENALTIES

There was no public imposition of sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the regulatory bodies during the financial year ended 28 February 2015.

6. NON-AUDIT FEES

The amount of non-audit fees paid to the external auditors, Messrs KPMG, by the Company for the financial year ended 28 February 2015 amounted to RM18,774.00.

7. VARIATION OF RESULTS

The Company did not release any profit estimates, forecast or projection for the financial year ended 28 February 2015.

There is significant variance between the results for the financial year ended 28 February 2015 and the unaudited results previously announced by the Company.

8. PROFIT GUARANTEE

The Company did not provide any profit guarantee to any parties during the financial year ended 28 February 2015.

9. MATERIAL CONTRACTS

Save as disclosed below, the Company and subsidiaries involving directors and substantial shareholders has not entered into any material contracts either still subsisting at the end of the financial year ended 28 February 2015 or entered into since the end of the previous financial year :-

The Company via its wholly owned subsidiary companies namely, PGF Insulation Sdn Bhd had advanced from a substantial

shareholder of the Company, Equaplus Sdn Bhd, for working capital purposes.

As at 28 February 2015, the total balance due and payable for the advances was recorded at RM13.817 million and shall be repaid not later than 31 August 2016.

The advances are secured by way of a corporate guarantee from the Company with interest rate more specifically disclosed in Note 14 of the Notes to the Financial Statements for the financial year ended 28 February 2015.

10. RECURRENT RELATED PARTY TRANSACTIONS OF REVENUE NATURE

The Company does not have any recurrent related party transaction of revenue nature for the financial year ended 28 February 2015.

Financial Statements

Directors’ Report 22

Consolidated Statement of Financial Position 25

Consolidated Statement of Profit or Loss and Other Comprehensive Income 26

Consolidated Statement of Changes in Equity 27

Consolidated Statement of Cash Flows 28

Statement of Financial Position 30

Statement of Profit or Loss and Other Comprehensive Income 31

Statement of Changes in Equity 32

Statement of Cash Flows 33

Notes to the Financial Statements 35

Statement by Directors 87

Statutory Declaration 88

Independent Auditors’ Report 89


DIRECTORS’ REPORTFOR THE YEAR ENDED 28 FEBRUARY 2015

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 28 February 2015.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the trading of fibre glasswool and its related products, provision of management services and investment holding, whilst the principal activities of the subsidiaries are as stated in Note 5 to the financial statements.

There has been no significant change in the nature of these activities during the financial year.

RESULTS

Group CompanyRM RM

Profit for the year attributable to owners of the Company 5,506,391 969,129

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the financial year under review except as disclosed in the financial statements.

DIVIDEND

No dividend was paid since the end of the previous financial year and the Directors do not recommend any dividend to be paid for the financial year under review.

DIRECTORS OF THE COMPANY

Directors who served since the date of the last report are :

Fong Wern Sheng, Executive Chairman/Chief Executive Officer Tan Ming Chong, Chief Operating Officer Fong Wah Kai, Executive DirectorSia Taik Hian, Senior Independent Non-Executive DirectorOmar Bin Mohamed Said, Independent Non-Executive Director Khoo Kah Hock, Independent Non-Executive Director


DIRECTORS’ REPORT (Cont’d)FOR THE YEAR ENDED 28 FEBRUARY 2015

DIRECTORS’ INTERESTS IN SHARES

The direct and deemed interests in the ordinary shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at financial year end (including the interests of the spouses or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows :

Number of ordinary shares of RM1 eachBalance at

1.3.2014 Bought (Sold)Balance at 28.2.2015

The Company

Direct Interest

Fong Wah Kai - own 6,798,800 – – 6,798,800Fong Wern Sheng - own 10,797,400 – – 10,797,400

Deemed Interest

Fong Wah Kai - own 78,056,900 – – 78,056,900Fong Wern Sheng - others * 24,323,053 – – 24,323,053

* These are shares held by corporations which are either controlled by the Director or in which he and his associates hold more than 15% of the voting shares.

By virtue of their interests of more than 15% in the shares of the Company, Mr. Fong Wah Kai and Mr. Fong Wern Sheng are also deemed interested in the shares of all the subsidiaries during the financial year to the extent that the Company has an interest.

None of the other Directors holding office at 28 February 2015 had any interest in the ordinary shares of the Company and of its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements of the Company and its related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than the interest paid by the Company and certain subsidiaries for advances from a corporate shareholder of the Company in which a Director has substantial financial interests as disclosed in Note 25.2(ii) to the financial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

ISSUE OF SHARES AND DEBENTURES

There were no changes in the authorised, issued and paid-up capital of the Company and no debentures were issued during the financial year.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year under review.


DIRECTORS’ REPORT (Cont’d)FOR THE YEAR ENDED 28 FEBRUARY 2015

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that :

i) all known bad debts have been written off and adequate provision made for doubtful debts; and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances : i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in

the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial statements of the Group and of the Company misleading.

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

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

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, the financial performance of the Group and of the Company for the year ended 28 February 2015 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

AUDITORS

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

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

Fong Wern Sheng

Tan Ming Chong

Penang,

Date: 30 June 2015


CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 28 FEBRUARY 2015

Note 2015 2014RM RM

Assets

Property, plant and equipment 3 48,513,022 49,497,146Investment property 4 6,107,421 6,233,101Land held for property development 6 96,913,335 97,523,851Deferred tax assets 7 1,078,000 2,156,000

Total non-current assets 152,611,778 155,410,098

Inventories 8 8,499,392 7,001,239Trade and other receivables 9 10,897,403 9,100,717Current tax assets – 36,641Cash and cash equivalents 10 6,038,949 5,563,177

Total current assets 25,435,744 21,701,774

Total assets 178,047,522 177,111,872

Equity

Share capital 11 159,974,948 159,974,948Reserves 12 (39,358,738) (44,865,129)

Equity attributable to owners of the Company 120,616,210 115,109,819

Liabilities

Loans and borrowings 13 10,499,896 12,984,786Advances from a shareholder 14 13,816,969 13,816,969Deferred tax liabilities 7 13,263,674 13,816,674

Total non-current liabilities 37,580,539 40,618,429

Loans and borrowings 13 4,099,603 3,839,672Advances from a shareholder 14 – 2,510,000Provision for liquidated damages 15 – 600,000Trade and other payables 16 15,744,201 14,433,952Current tax payable 6,969 –

Total current liabilities 19,850,773 21,383,624

Total liabilities 57,431,312 62,002,053

Total equity and liabilities 178,047,522 177,111,872

The notes on pages 35 to 86 are an integral part of these financial statements.


CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHERCOMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2015

Note 2015 2014RM RM

Continuing operations

Revenue 17 43,922,732 40,601,443

Other operating income 1,130,698 2,590,994

Changes in manufactured inventories 1,074,341 306,632

Raw materials consumed (13,687,573) (11,838,463)

Staff costs 20 (8,560,250) (8,140,965)

Depreciation and amortisation (4,311,499) (4,908,458)

Other operating expenses (11,751,523) (10,126,264)

Results from operating activities 18 7,816,926 8,484,919

Finance costs 19 (1,687,306) (2,216,924)

Profit before tax 6,129,620 6,267,995

Tax expense 22 (623,229) (353,620)

Profit for the year representing total comprehensive income for the year 5,506,391 5,914,375

Profit attributable to owners of the Company 5,506,391 5,914,375

Total comprehensive income attributable to owners of the Company 5,506,391 5,914,375

Basic earnings per ordinary share (sen) 23 3.44 3.70



CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 28 FEBRUARY 2015

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CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 28 FEBRUARY 2015

Note 2015 2014RM RM

Cash flows from operating activities

Profit before tax from continuing operations 6,129,620 6,267,995

Adjustments for :Depreciation of :

- Property, plant and equipment 3 4,185,819 4,888,143- Investment property 4 125,680 20,315

Plant and equipment written off 18 25,021 842Interest income 18 (175,838) (96,604)Interest expense 19 1,687,306 2,216,924Gain on disposal of property, plant and equipment 18 (131,855) (13,619)Reversal of impairment loss on property 18 – (2,035,453)Reversal of provision for liquidated damages 18 (600,000) –Development costs charged to profit or loss 6 734,167 –

Operating profit before changes in working capital 11,979,920 11,248,543

Changes in working capital :Inventories (1,498,153) (1,054,926)Trade and other receivables (1,796,686) 1,521,263Trade and other payables 1,310,249 (1,970,170)

Cash generated from operations 9,995,330 9,744,710

Tax paid (54,619) (72,264)

Net cash from operating activities 9,940,711 9,672,446

Cash flows from investing activities

Interest received 175,838 96,604Proceeds from disposal of property, plant and equipment 187,700 14,239Purchase of plant and equipment A (3,152,561) (3,561,692)Additions to land held for property development 6 (123,651) –

Net cash used in investing activities (2,912,674) (3,450,849)



CONSOLIDATED STATEMENT OF CASH FLOWS (Cont’d)FOR THE YEAR ENDED 28 FEBRUARY 2015

Note 2015 2014RM RM

Cash flows from financing activities

Repayment to a shareholder (2,510,000) (8,500,000)Interest paid (1,687,306) (2,216,924)Repayment of finance lease liabilities (635,322) (931,342)Short term borrowings, net 624,000 (1,353,000)(Repayment)/Drawdown of term loans (2,070,479) 10,215,551

Net cash used in financing activities (6,279,107) (2,785,715)

Net increase in cash and cash equivalents 748,930 3,435,882

Cash and cash equivalents at 1 March 2014/2013 5,168,025 1,732,143

Cash and cash equivalents at 28 February B 5,916,955 5,168,025

NOTES

A. PuRChASEOFPlANTANDEquiPMENT

During the financial year, the Group acquired plant and equipment with an aggregate cost of RM3,282,561 (2014 : RM4,738,282) of which RM130,000 (2014 : RM1,176,590) was acquired by means of finance lease. The balance of RM3,152,561 (2014 : RM3,561,692) was made by cash payments.

B. CAShANDCAShEquivAlENTS

Cash and cash equivalents included in the consolidated statement of cash flows comprise the following consolidated statement of financial position amounts :

Note 2015 2014RM RM

Cash and bank balances 10 605,609 3,284,446Fixed deposits with a licensed bank 10 5,433,340 2,278,731Bank overdrafts 13 (121,994) (395,152)

5,916,955 5,168,025



STATEMENT OF FINANCIAL POSITIONAS AT 28 FEBRUARY 2015

Note 2015 2014RM RM

Assets

Property, plant and equipment 3 292,481 260,412Investments in subsidiaries 5 89,504,374 85,304,374

Total non-current assets 89,796,855 85,564,786

Inventories 8 – 411,221Trade and other receivables 9 18,792,220 23,237,552Current tax assets – 36,236Cash and cash equivalents 10 4,767,669 2,567,726

Total current assets 23,559,889 26,252,735

Total assets 113,356,744 111,817,521

Equity

Share capital 11 159,974,948 159,974,948Reserves 12 (49,388,480) (50,357,609)

Equity attributable to owners of the Company 110,586,468 109,617,339

Liabilities

Loans and borrowings 13 81,190 55,035

Total non-current liability

Loans and borrowings 13 1,939,085 847,531Trade and other payables 16 748,897 1,297,616Current tax payable 1,104 –

Total current liabilities 2,689,086 2,145,147

Total liabilities 2,770,276 2,200,182

Total equity and liabilities 113,356,744 111,817,521



STATEMENT OF PROFIT OR LOSS AND OTHERCOMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 2015

Note 2015 2014RM RM

Continuing operations

Revenue 17 3,323,810 2,058,160

Other operating income 85,046 15,056,642

Changes in trading inventories (411,221) 309,245

Staff costs 20 (507,637) (491,827)

Depreciation and amortisation (115,282) (88,887)

Other operating expenses (1,372,349) (1,284,070)

Results from operating activities 18 1,002,367 15,559,263

Finance costs 19 (28,988) (131,333)

Profit before tax 973,379 15,427,930

Tax expense 22 (4,250) (73,296)

Profit for the year representing total comprehensive income for the year 969,129 15,354,634



STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 28 FEBRUARY 2015

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STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 28 FEBRUARY 2015

Note 2015 2014RM RM

Cash flows from operating activities

Profit before tax from continuing operations 973,379 15,427,930

Adjustments for :Depreciation of property, plant and equipment 3 115,282 88,887Plant and equipment written off 18 89 15Interest income 18 (85,046) (56,536)Interest expense 19 28,988 131,333Gain on disposal of property, plant and equipment 18 – (107)Reversal of impairment loss on investments in subsidiaries 18 – (15,000,000)

Operating profit before changes in working capital 1,032,692 591,522

Changes in working capital :Inventories 411,221 (309,245)Trade and other receivables 245,332 3,494,043Trade and other payables (548,719) (551,568)

Cash generated from operations 1,140,526 3,224,752

Tax refunded/(paid) 33,090 (109,532)

Net cash from operating activities 1,173,616 3,115,220

Cash flows from investing activities

Purchase of plant and equipment A (17,440) –Proceeds from disposal of property, plant and equipment – 109Interest received 85,046 56,536

Net cash from investing activities 67,606 56,645



STATEMENT OF CASH FLOWS (Cont’d)FOR THE YEAR ENDED 28 FEBRUARY 2015

Note 2015 2014RM RM

Cash flows from financing activities

Repayment to a shareholder – (2,000,000)Interest paid (28,988) (131,333)Short term borrowings, net 977,000 (589,000)Repayment of finance lease liabilities (89,076) (97,521)

Net cash from/(used in) financing activities 858,936 (2,817,854)

Net increase in cash and cash equivalents 2,100,158 354,011

Cash and cash equivalents at 1 March 2014/2013 2,545,517 2,191,506

Cash and cash equivalents at 28 February B 4,645,675 2,545,517

NOTES

A. PuRChASEOFPlANTANDEquiPMENT

During the financial year, the Company acquired plant and equipment with an aggregate cost of RM147,440 (2014 : RM Nil) of which RM130,000 (2014 : RM Nil) was acquired by means of finance lease. The balance of RM17,440 (2014 : RM Nil) was made by cash payments.

B. CAShANDCAShEquivAlENTS

Cash and cash equivalents included in the statement of cash flows comprise the following statement of financial position amounts :

Note 2015 2014RM RM

Cash and bank balances 10 2,824 2,567,726Fixed deposits with a licensed bank 10 4,764,845 –Bank overdraft 13 (121,994) (22,209)

4,645,675 2,545,517



NOTES TO THE FINANCIAL STATEMENTS

Poly Glass Fibre (M) Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the registered office and principal place of business of the Company are as follows :

Registered office

Suite 12-A, Level 12Menara NorthamNo. 55, Jalan Sultan Ahmad Shah10050 Penang

Principal place of business

2449, Lorong Perusahaan 10Kawasan Perusahaan Perai13600 PeraiPenang

The consolidated financial statements of the Company as at and for the financial year ended 28 February 2015 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”).

The Company is principally engaged in the trading of fibre glasswool and its related products, provision of management services and investment holding. The principal activities of its subsidiaries are disclosed in Note 5.

During the previous financial year, Equaplus Sdn. Bhd. ceased to be the holding company.

These financial statements were authorised for issue by the Board of Directors on 30 June 2015.

1. BASIS OF PREPARATION

(A) STATEMENT OF COMPLIANCE

The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (“FRSs”) and the requirements of the Companies Act, 1965 in Malaysia.

The following are accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company :

FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2014• Amendments to FRS 1, First-timeAdoptionofMalaysianFinancialReportingStandards(Annualimprovements2011-

2013Cycle)• Amendments to FRS 2, Share-basedPayment(Annualimprovements2010-2012Cycle)• Amendments to FRS 3, BusinessCombinations(Annualimprovements2010-2012Cycleand2011-2013Cycle)• Amendments to FRS 8,OperatingSegments(Annualimprovements2010-2012Cycle)• Amendments to FRS 13,FairvalueMeasurement(Annualimprovements2010-2012Cycleand2011-2013Cycle)• Amendments to FRS 116,Property,PlantandEquipment(Annualimprovements2010-2012Cycle)• Amendments to FRS 119, EmployeeBenefits-DefinedBenefitPlans:EmployeeContributions• Amendments to FRS 124,RelatedPartyDisclosures(Annualimprovements2010-2012Cycle)• Amendments to FRS 138, intangibleAssets(Annualimprovements2010-2012Cycle)• Amendments to FRS 140, investmentProperty(Annualimprovements2011-2013Cycle)

FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016• Amendments to FRS 5, Non-currentAssetsheldforSaleandDiscontinuedOperations(Annualimprovements2012-

2014Cycle)• Amendments to FRS 7, Financialinstruments:Disclosures(Annualimprovements2012-2014Cycle)• Amendments to FRS 10, ConsolidatedFinancialStatementsandFRS128, investments inAssociatesandJoint

ventures-SaleorContributionofAssetsbetweenaninvestoranditsAssociateorJointventure


NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

1. BASIS OF PREPARATION (CONT’D)

(A) STATEMENT OF COMPLIANCE (CONT’D)

FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016 (Cont’d)• Amendments to FRS 10, ConsolidatedFinancialStatements,FRS12,DisclosureofinterestsinOtherEntitiesand

FRS128,investmentsinAssociatesandJointventures–investmentEntities:ApplyingtheConsolidationException• Amendments to FRS 11, JointArrangements-AccountingforAcquisitionsofinterestsinJointOperations• FRS 14, RegulatoryDeferralAccounts• Amendments to FRS 101, PresentationofFinancialStatements-Disclosureinitiative• Amendments to FRS 116, Property,PlantandEquipmentandFRS138,intangibleAssets-ClarificationofAcceptable

MethodsofDepreciationandAmortisation• Amendments to FRS 119, EmployeeBenefits(Annualimprovements2012-2014Cycle)• Amendments to FRS 127, SeparateFinancialStatements-EquityMethodinSeparateFinancialStatements• Amendments to FRS 134, interimFinancialReporting(Annualimprovements2012-2014Cycle)

FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018• FRS 9, Financial Instruments (2014)

The Group and the Company plan to apply the abovementioned accounting standards, amendments and interpretations :

• from the annual period beginning on 1 March 2015 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 July 2014, as applicable.

• from the annual period beginning on 1 March 2016 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2016, as applicable.

The Group’s and the Company’s financial statements for annual period beginning on 1 March 2017 will be prepared in accordance with the Malaysian Financial Reporting Standards (MFRSs) issued by the MASB and International Financial Reporting Standards (IFRSs).

The initial application of the accounting standards, amendments or interpretations are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and of the Company.

The Group falls within the scope of IC Interpretation 15, Agreements for the Construction of Real Estate. Therefore, the Group is currently exempted from adopting the MFRSs and is referred to as a “Transitioning Entity”.

(B) BASIS OF MEASUREMENT

The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.

(C) FUNCTIONAL AND PRESENTATION CURRENCY

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financial information is presented in RM, unless otherwise stated.

(D) USE OF ESTIMATES AND jUDGEMENTS

The preparation of the financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in Note 6 - Impairment loss on land held for property development.



2. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to the periods presented in these financial statements

and have been applied consistently by Group entities, unless otherwise stated.

(A) BASIS OF CONSOLIDATION

(I) SUBSIDIARIES

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

(II) BUSINESS COMBINATIONS

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as :

• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in

connection with a business combination are expensed as incurred.

(III) LOSS OF CONTROL

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(IV) TRANSACTIONS ELIMINATED ON CONSOLIDATION

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.



2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(B) FOREIGN CURRENCY

(I) FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are translated to the functional currency of the Group entities at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting period except for those that are measured at fair value, which are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss.

In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the foreign currency translation reserve (“FCTR”) in equity.

(C) FINANCIAL INSTRUMENTS

(I) INITIAl RECOGNITION AND MEASUREMENT

A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised as fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.

(II) FINANCIAl INSTRUMENT CATEGORIES AND SUBSEqUENT MEASUREMENT

The Group and the Company categorise financial instruments as follows :

FINANCIAl ASSETS

lOANS AND RECEIVABlES

Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method and are subject to review for impairment (see Note 2(j)(i)).

FINANCIAl lIABIlITIES

All financial liabilities are subsequently measured at amortised cost.




(C) FINANCIAL INSTRUMENTS (CONT’D)

(III) FINANCIAl GUARANTEE CONTRACTS

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Fair value arising from financial guarantee contracts are classified as deferred income and is amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.

(IV) REGUlAR wAY PURCHASE OR SAlE OF FINANCIAl ASSETS

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to :

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and (b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a

receivable from the buyer for payment on the trade date.

(V) DERECOGNITION

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or control of the asset is not retained or substantially all of the risks and rewards of ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged, cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

(D) PROPERTY, PLANT AND EQUIPMENT

(I) RECOGNITION AND MEASUREMENT

Items of property, plant and equipment are measured at cost/valuation less any accumulated depreciation and any accumulated impairment losses.

The Group has availed itself to the transitional provision when the MASB first adopted IAS 16 (Revised) : Property, plant and equipment in 1998. The buildings erected on the short term leasehold land of the Group are shown at Directors’ valuation on 1 March 1992 based on the valuation exercise carried out by a firm of professional valuers on an open market value basis. No later valuation has been recorded for these property, plant and equipment.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.




(D) PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(I) RECOGNITION AND MEASUREMENT (CONT’D)

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net within “other operating income” and “other operating expenses” respectively in profit or loss.

(II) SUBSEqUENT COSTS

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(III) DEPRECIATION

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment from the date that they are available for use. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Property, plant and equipment under construction (capital-in-progress) are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows :

%

Buildings 2 - 5Plant, machinery and equipment 5 - 20Furniture, fittings and equipment 6.7 - 20Motor vehicles 10 - 20

Leasehold land is depreciated over the lease term of 60 years.

Depreciation method, useful lives and residual values are reviewed at the end of the reporting period and adjusted as appropriate.

(E) INVESTMENT PROPERTY

Investment properties are properties which are owned to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. These include freehold land and leasehold land which in substance is a finance lease held for a currently undetermined future use. Properties that are occupied by the Group are accounted for as owner-occupied rather than as investment properties. Investment properties are initially and subsequently measured at cost.




(E) INVESTMENT PROPERTY (CONT’D)

Cost includes expenditures that are directly attributable to the acquisition of the investment property. The cost of self-constructed investment property also includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs.

Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of 50 years.

An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period in which the item is derecognised.

(F) LEASED ASSETS

(I) FINANCE lEASE

Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment, or as investment property if held to earn rental income or for capital appreciation or for both.

(II) OPERATING lEASE

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the statement of financial position.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

Leasehold land which in substance is an operating lease is classified as prepaid lease payments.

(G) LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS

(I) lAND HElD FOR PROPERTY DEVElOPMENT

Land held for property development consists of land (including costs associated with the acquisition of land) or such portions thereof on which no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current asset and is measured at cost less accumulated impairment losses.

Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.




(G) LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONT’D)

(II) PROPERTY DEVElOPMENT COSTS

Property development costs comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities, including interest expense incurred during the period of active development.

Property development costs not recognised as an expense is recognised as an asset and is stated at the lower of cost and net realisable value.

The excess of revenue recognised in profit or loss over billings to purchasers is shown as accrued billings under trade

and other receivables and the excess of billings to purchasers over revenue recognised in profit or loss is shown as progress billings under trade and other payables.

(H) INVENTORIES

Inventories are measured at the lower of cost and net realisable value.

The cost of inventories is calculated based on the following bases :

Raw materialsfirst-in, first-out Trading inventories

Manufactured inventoriesConsumables – weighted average

Cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories, cost includes an appropriate share of production overheads based on normal operating capacity.

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.

(I) CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in fair value with original maturities of three months or less, and are used by the Group and the Company in the management of their short term commitments. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

(j) IMPAIRMENT

(I) FINANCIAl ASSETS

All financial assets (except for investments in subsidiaries) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised.

An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

If, in a subsequent period, 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, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.




(j) IMPAIRMENT (CONT’D)

(II) OTHER ASSETS

The carrying amount of other assets (except for inventories and deferred tax assets) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating unit. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to a cash-generating unit or a group of cash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. 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 or cash-generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cash-generating units) and then to reduce the carrying amount of the other assets in the cash-generating unit (group of cash-generating units) on a prorata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are recognised.

(K) EQUITY INSTRUMENTS

Instruments classified as equity are measured at cost on initial recognition and are not re-measured subsequently.

(I) ISSUE ExPENSES

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

(II) ORDINARY SHARES

Ordinary shares are classified as equity.

(L) EMPLOYEE BENEFITS

(I) SHORT-TERM EMPlOYEE BENEFITS

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.




(L) EMPLOYEE BENEFITS (CONT’D)

(II) STATE PlANS

The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which they relate. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(M) PROVISIONS

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

(N) CONTINGENT LIABILITIES

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(O) REVENUE AND OTHER INCOME

(I) GOODS SOlD

Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

(II) PROPERTY DEVElOPMENT REVENUE

Revenue from property development activities is recognised based on the stage of completion measured by reference to the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

Where the financial outcome of a property development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on the development units sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised immediately in profit or loss.

(III) INTEREST INCOME

Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.

(IV) COMMISSIONS

Where the Company acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is the net amount of commission made by the Company.




(P) BORROWING COSTS

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended sale are interrupted or completed.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

(Q) INCOME TAX

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted

or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entity, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Unutilised investment tax allowances, being tax incentive that is not a tax base of an asset, is recognised as deferred tax asset to the extent that it is probable that the future taxable profits will be available against the unutilised tax incentive can be utilised.

(R) EARNINGS PER SHARE

The Group presents basic earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.




(S) OPERATING SEGMENTS

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

(T) FAIR VALUE MEASUREMENTS

Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as 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 measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

For non-financial asset, the fair value measurement 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.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value are categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows :

Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.

Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 : unobservable inputs for the asset or liability.

The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in

circumstances that caused the transfers.


NOTES TO THE FINANCIAL STATEMENTS (Cont’d)3.

P

RO

PE

RTY

, PLA

NT

AN

D E

QU

IPM

EN

T

At v

alua

tion

At c

ost

Sho

rtte

rmle

aseh

old

land

Bui

ldin

gs

Sho

rtte

rmle

aseh

old

land

Bui

ldin

gs

Pla

nt,

mac

hine

ry

and

equi

pmen

t

Furn

iture

, fit

tings

an

d eq

uipm

ent

Mot

orve

hicl

esC

apita

lin

-pro

gres

sTo

tal

RM

RM

RM

RM

RM

RM

RM

RM

RM

Gro

up

Val

uatio

n/C

ost

At 1

Mar

ch 2

013

1,82

0,00

02,

885,

000

5,04

7,69

17,

618,

031

68,8

83,9

482,

148,

475

1,96

6,62

94,

652,

344

95,0

22,1

18A

dditi

ons

––

–19

6,10

02,

788,

008

92,2

4360

,859

1,60

1,07

24,

738,

282

Dis

posa

ls–

––

–(2

5,92

0)(1

9,15

1)–

–(4

5,07

1)W

rite-

off

––

––

(2)

(132

,665

)(4

5,76

7)–

(178

,434

)Tr

ansf

er to

inve

stm

ent

prop

erty

(Not

e 4)

––

––

––

–(6

,253

,416

)(6

,253

,416

)

At 2

8 Fe

brua

ry 2

014/

1

Mar

ch 2

014

1,82

0,00

02,

885,

000

5,04

7,69

17,

814,

131

71,6

46,0

342,

088,

902

1,98

1,72

1–

93,2

83,4

79

Add

ition

s–

––

734,

154

2,30

2,00

310

0,05

514

6,34

9–

3,28

2,56

1D

ispo

sals

––

––

(399

,459

)(2

,420

)(5

33,0

58)

–(9

34,9

37)

Writ

e-of

f–

––

–(7

5,18

0)(3

74,3

69)

(54,

834)

–(5

04,3

83)

At 2

8 Fe

brua

ry 2

015

1,82

0,00

02,

885,

000

5,04

7,69

18,

548,

285

73,4

73,3

981,

812,

168

1,54

0,17

8–

95,1

26,7

20



P

RO

PE

RTY

, PLA

NT

AN

D E

QU

IPM

EN

T (C

ON

T’D

)

At v

alua

tion

At c

ost

Sho

rtte

rmle

aseh

old

land

Bui

ldin

gs

Sho

rtte

rmle

aseh

old

land

Bui

ldin

gs

Pla

nt,

mac

hine

ry

and

equi

pmen

t

Furn

iture

, fit

tings

an

d eq

uipm

ent

Mot

orve

hicl

esC

apita

lin

-pro

gres

sTo

tal

RM

RM

RM

RM

RM

RM

RM

RM

RM

Gro

up

Dep

reci

atio

n an

d im

pair

men

t los

ses

Acc

umul

ated

dep

reci

atio

n38

2,93

01,

210,

175

1,49

8,56

61,

083,

398

31,7

91,5

011,

613,

779

1,53

9,88

4–

39,1

20,2

33A

ccum

ulat

ed im

pairm

ent l

oss

––

––

––

–2,

035,

453

2,03

5,45

3

At 1

Mar

ch 2

013

382,

930

1,21

0,17

51,

498,

566

1,08

3,39

831

,791

,501

1,61

3,77

91,

539,

884

2,03

5,45

341

,155

,686

Dep

reci

atio

n fo

r the

yea

r36

,400

57,7

0026

2,28

363

,716

4,18

4,74

413

3,12

415

0,17

6–

4,88

8,14

3D

ispo

sals

––

––

(25,

919)

(18,

532)

––

(44,

451)

Writ

e-of

f–

––

––

(131

,826

)(4

5,76

6)–

(177

,592

)R

ever

sal o

f im

pairm

ent l

oss

––

––

––

–(2

,035

,453

)(2

,035

,453

)

Acc

umul

ated

dep

reci

atio

n41

9,33

01,

267,

875

1,76

0,84

91,

147,

114

35,9

50,3

261,

596,

545

1,64

4,29

4–

43,7

86,3

33A

ccum

ulat

ed im

pairm

ent l

oss

––

––

––

––

–

At 2

8 Fe

brua

ry 2

014/

1

Mar

ch 2

014

419,

330

1,26

7,87

51,

760,

849

1,14

7,11

435

,950

,326

1,59

6,54

51,

644,

294

–43

,786

,333

Dep

reci

atio

n fo

r the

yea

r36

,400

57,7

0026

2,28

310

5,35

83,

401,

260

134,

970

187,

848

–4,

185,

819

Dis

posa

ls–

––

–(3

43,8

57)

(2,1

78)

(533

,057

)–

(879

,092

)W

rite-

off

––

––

(50,

620)

(373

,910

)(5

4,83

2)–

(479

,362

)

At 2

8 Fe

brua

ry 2

015

455,

730

1,32

5,57

52,

023,

132

1,25

2,47

238

,957

,109

1,35

5,42

71,

244,

253

–46

,613

,698



P

RO

PE

RTY

, PLA

NT

AN

D E

QU

IPM

EN

T (C

ON

T’D

)

At v

alua

tion

At c

ost

Sho

rtte

rmle

aseh

old

land

Bui

ldin

gs

Sho

rtte

rmle

aseh

old

land

Bui

ldin

gs

Pla

nt,

mac

hine

ry

and

equi

pmen

t

Furn

iture

, fit

tings

an

d eq

uipm

ent

Mot

orve

hicl

esC

apita

lin

-pro

gres

sTo

tal

RM

RM

RM

RM

RM

RM

RM

RM

RM

Gro

up

Car

ryin

g am

ount

s

At 1

Mar

ch 2

013

1,43

7,07

01,

674,

825

3,54

9,12

56,

534,

633

37,0

92,4

4753

4,69

642

6,74

52,

616,

891

53,8

66,4

32

At 2

8 Fe

brua

ry 2

014/

1

Mar

ch 2

014

1,40

0,67

01,

617,

125

3,28

6,84

26,

667,

017

35,6

95,7

0849

2,35

733

7,42

7–

49,4

97,1

46

At 2

8 Fe

brua

ry 2

015

1,36

4,27

01,

559,

425

3,02

4,55

97,

295,

813

34,5

16,2

8945

6,74

129

5,92

5–

48,5

13,0

22



3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Furniture, fittings

andequipment

Motorvehicles Total

RM RM RM

Company

Cost

At 1 March 2013 763,587 297,879 1,061,466Disposals (14,803) – (14,803)Write-off (129,426) – (129,426)

At 28 February 2014/1 March 2014 619,358 297,879 917,237

Additions – 147,440 147,440Write-off (111,395) (147) (111,542)

At 28 February 2015 507,963 445,172 953,135

Depreciation

At 1 March 2013 621,207 90,943 712,150Charge for the year 29,341 59,546 88,887Disposals (14,801) – (14,801)Write-off (129,411) – (129,411)


Charge for the year 28,705 86,577 115,282Write-off (111,307) (146) (111,453)

At 28 February 2015 423,734 236,920 660,654

Carrying amounts

At 1 March 2013 142,380 206,936 349,316


At 28 February 2015 84,229 208,252 292,481



3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

3.1 REVERSAl OF IMPAIRMENT lOSS

Impairment loss of RM2 million provided on the uncompleted unit, has been reversed in the previous financial year, as the Directors are of the opinion that the recoverable amount is higher than the carrying amount since the unit is completed during the year, based on the recent sales transactions of other units within the same building.

3.2 ClASSIFICATION BETwEEN PROPERTY, PlANT AND EqUIPMENT AND INVESTMENT PROPERTY

The property completed in the previous financial year was transferred to investment property as the intention is to hold it to earn rental.

3.3 REVAlUATION

The buildings erected on the short term leasehold land of the Group are shown at Directors’ valuation on 1 March 1992 based on the valuation exercise carried out by a firm of professional valuers on an open market value basis. No later valuation has been recorded for these property, plant and equipment.

Had the revalued buildings been carried at historical cost less accumulated depreciation, the carrying amounts of the revalued assets of the Group that would have been included in the financial statements at the end of the year would be RM484,422 (2014 : RM507,675).

3.4 ASSETS UNDER FINANCE lEASES AND TERM lOAN

The carrying amounts of plant and equipment of the Group and of the Company acquired under finance leases and term loan are as follows :

Group Company 2015 2014 2015 2014

RM RM RM RM

Under finance leases

Furniture, fittings and equipment – 66,739 – 66,739Plant, machinery and equipment 48,950 1,468,138 48,950 –Motor vehicles 165,410 188,584 165,410 147,390

Under term loan

Plant, machinery and equipment 18,270,038 19,736,251 – –



4. INVESTMENT PROPERTY - GROUP

RM

Cost

At 1 March 2013 –Transfer from property, plant and equipment (Note 3) 6,253,416

At 28 February 2014/1 March 2014/28 February 2015 6,253,416

Accumulated depreciation

At 1 March 2013 –Depreciation for the year 20,315

At 28 February 2014/1 March 2014 20,315

Depreciation for the year 125,680

At 28 February 2015 145,995

Carrying amount

At 28 February 2014/1 March 2014 6,233,101

At 28 February 2015 6,107,421

The following are recognised in profit or loss in respect of investment property :

2015 2014RM RM

Direct operating expenses :- non-income generating investment property 242,548 40,647

4.1 FAIR VALUE INFORMATION

The fair value was based on Directors’ estimation using the latest available market information of similar property within the same locality. The fair value of the investment property of the Group as at 28 February 2015 is classified as level 3 of fair value hierarchy and determined to be approximately RM6,284,000 (2014 : RM7,021,000).



5. INVESTMENTS IN SUBSIDIARIES - COMPANY

2015 2014RM RM

Unquoted shares, at cost 168,577,312 168,577,312Add : Effect of fair value adjustment on inter-company loan 6,243,000 6,243,000Add : Additions 4,200,000 –Less : Accumulated impairment loss (89,515,938) (89,515,938)

89,504,374 85,304,374

Details of the subsidiaries are as follows :

Name of subsidiaryCountry of

incorporation

Effective ownership

interest Principal activities2015 2014

% %

PGF Insulation Sdn. Bhd. Malaysia 100 100 Manufacture and sale of fibre glasswool and its related products

Golden Approach Sdn. Bhd. Malaysia 100 100 Property development

Concrete Energy Sdn. Bhd. Malaysia 100 100 Property holding

Clover Sdn. Bhd. Malaysia 100 100 Property holding, trading in fibre glasswool and its related products

SK Insulation Solutions Sdn. Bhd. Malaysia 100 100 Trading in fibre glasswool and its related products

RESTRICTION IMPOSED BY BANK COVENANTS

The covenants of a bank facility taken by a subsidiary of the Group restrict the ability of the subsidiary to provide advances to other companies within the Group and to declare dividends to its shareholders in excess of 50% of the subsidiary’s profit after tax unless prior written consent from the bank is obtained.

6. LAND HELD FOR PROPERTY DEVELOPMENT, AT COST - GROUP

Note 2015 2014RM RM

At 1 March 97,523,851 97,523,851Add : Additions during the year 123,651 –Less : Development costs charged to profit or loss (734,167) –

At 28 February 6.1 96,913,335 97,523,851



6. LAND HELD FOR PROPERTY DEVELOPMENT, AT COST - GROUP (CONT’D)

6.1 BAlANCE AT END OF FINANCIAl YEAR COMPRISED :

2015 2014RM RM

Leasehold land, at valuation 177,535,290 177,535,290Less : Accumulated impairment loss (85,123,042) (85,123,042)

92,412,248 92,412,248

Leasehold land, at cost 7,372,225 7,372,225Development costs 81,577,770 81,454,119Accumulated costs charged to profit or loss (84,448,908) (83,714,741)

96,913,335 97,523,851

The Group through its subsidiary, Golden Approach Sdn. Bhd. (“GASB”) has suspended and delayed the development

of its development properties since April 1999 upon being served with the winding-up petition initiated by one of the main contractors of GASB. In view of the prolonged suspension of development activities and the uncertainty as to the ultimate completion of the development project and the future cash flows and recoverable amounts, the Board of Directors will annually reassess the recoverable amount of land held for future development (based on available information/facts) within the vicinity.

The current recoverable amount of the land held for property development was based on professional valuation carried out by a firm of professional valuers on an open market value basis conducted in November 2012.



D

EFE

RR

ED

TA

X A

SS

ETS

/(LIA

BIL

ITIE

S) -

GR

OU

P

REC

OG

NIS

ED D

EFER

RED

TA

x A

SSET

S/(l

IAB

IlIT

IES)

D

efer

red

tax

asse

ts a

nd li

abili

ties

are

attri

buta

ble

to th

e fo

llow

ing

:

Ass

ets

Liab

ilitie

sN

et20

1520

1420

1520

1420

1520

14R

MR

MR

MR

MR

MR

M

Pro

perty

, pla

nt a

nd e

quip

men

t- c

apita

l allo

wan

ces

(4,4

72,3

94)

(3,5

46,3

94)

––

(4,4

72,3

94)

(3,5

46,3

94)

- rev

alua

tion

(288

,606

)(2

88,6

06)

––

(288

,606

)(2

88,6

06)

Unu

tilis

ed in

vest

men

t tax

allo

wan

ce5,

776,

000

5,89

9,00

0–

–5,

776,

000

5,89

9,00

0La

nd h

eld

for p

rope

rty d

evel

opm

ent

- rev

alua

tion

––

(13,

263,

674)

(13,

816,

674)

(13,

263,

674)

(13,

816,

674)

Pro

visi

ons

63,0

0092

,000

––

63,0

0092

,000

Def

erre

d ta

x as

sets

/(lia

bilit

ies)

1,07

8,00

02,

156,

000

(13,

263,

674)

(13,

816,

674)

(12,

185,

674)

(11,

660,

674)



7. DEFERRED TAX ASSETS/(LIABILITIES) - GROUP (CONT’D)

Movement in temporary differences during the year :

At 1.3.2013

Recognised in profit or loss

(Note 22)At

28.2.2014

Recognised in profit or loss

(Note 22)At

28.2.2015RM RM RM RM RM

Property, plant and equipment- capital allowances (2,152,394) (1,394,000) (3,546,394) (926,000) (4,472,394)- revaluation (288,606) – (288,606) – (288,606)

Unutilised investment tax allowance 4,889,000 1,010,000 5,899,000 (123,000) 5,776,000Land held for property development

- revaluation (13,816,674) – (13,816,674) 553,000 (13,263,674)Provisions 27,000 65,000 92,000 (29,000) 63,000

Net tax liabilities (11,341,674) (319,000) (11,660,674) (525,000) (12,185,674)

UNRECOGNISED DEFERRED TAX ASSETS

Deferred tax assets (stated at gross) have not been recognised in respect of the following items :

Group Company 2015 2014 2015 2014

RM RM RM RM

Taxable temporary differences (47,000) (7,000) (47,000) (7,000)Tax loss carry-forwards 18,885,000 18,743,000 487,000 503,000Provisions 145,000 95,000 145,000 95,000

18,983,000 18,831,000 585,000 591,000

Tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of the above

items because it is not probable that future taxable profit will be available against which the Group and the Company can utilise the benefits there from.

The comparative figures have been restated to reflect the revised taxable temporary differences, tax loss carry-forwards and provisions available to the Group and the Company.



8. INVENTORIES

Group Company 2015 2014 2015 2014

RM RM RM RM

At cost

Raw materials 3,263,014 2,986,382 – –Manufactured inventories 3,478,285 2,403,944 – –Consumables 1,758,093 1,610,913 – –Trading inventories – – – 411,221

8,499,392 7,001,239 – 411,221

9. TRADE AND OTHER RECEIVABLES

Group Company Note 2015 2014 2015 2014

RM RM RM RM

Current

Trade

Subsidiaries 9.1 – – 13,074,684 16,591,734Trade receivables 8,454,484 8,928,667 4,538,947 3,703,705

8,454,484 8,928,667 17,613,631 20,295,439

Non-trade

Subsidiaries 9.1 – – 1,132,348 2,918,221Deposits 9.2 2,293,353 78,344 8,590 8,620Prepayments 149,566 93,706 37,651 15,272

2,442,919 172,050 1,178,589 2,942,113

10,897,403 9,100,717 18,792,220 23,237,552

9.1 AMOUNT DUE FROM SUBSIDIARIES

The trade amount due from a subsidiary is subject to normal trade terms.

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

9.2 DEPOSITS

Included in deposits is an amount of RM2,202,719 (2014 : RM Nil) in respect of down payment paid for the purchase of machinery.



10. CASH AND CASH EQUIVALENTS

Group Company 2015 2014 2015 2014

RM RM RM RM

Cash and bank balances 605,609 3,284,446 2,824 2,567,726Fixed deposits with a licensed bank 5,433,340 2,278,731 4,764,845 –

6,038,949 5,563,177 4,767,669 2,567,726

Included in the cash and bank balances is an amount of RM6,869 (2014 : RM6,739) held pursuant to Section 7A of the Housing Development (Control and Licensing) Act, 1966 and are restricted from use in other operations.

11. SHARE CAPITAL - GROUP/COMPANY

2015 2014Amount

RMNumber of

sharesAmount

RMNumber of

shares

Ordinary shares of RM1 each

Authorised 300,000,000 300,000,000 300,000,000 300,000,000

Issued and fully-paid 159,974,948 159,974,948 159,974,948 159,974,948

12. RESERVES


RM RM RM RM

Non-distributable

Share premium 42,786,982 42,786,982 42,786,982 42,786,982Capital reserve 12.1 181,394 181,394 – –Accumulated losses (82,997,517) (88,503,908) (93,411,210) (94,380,339)

(40,029,141) (45,535,532) (50,624,228) (51,593,357)

Distributable

Capital reserve 12.1 670,403 670,403 1,235,748 1,235,748

(39,358,738) (44,865,129) (49,388,480) (50,357,609)



12. RESERVES (CONT’D)

12.1 CAPITAl RESERVE

The distributable capital reserve represents the gain on disposal of a subsidiary.

The non-distributable capital reserve represents the surplus arising from the revaluation of short term leasehold land and building.

13. LOANS AND BORROWINGS


RM RM RM RM

Non-current

Secured

Term loans 10,418,706 12,574,157 – –Finance lease liabilities 13.2 81,190 410,629 81,190 55,035

10,499,896 12,984,786 81,190 55,035

Current

Secured

Term loans 2,160,518 2,075,546 – –Finance lease liabilities 13.2 66,091 241,974 66,091 51,322

2,226,609 2,317,520 66,091 51,322

Unsecured

Bank overdrafts 121,994 395,152 121,994 22,209Bankers’ acceptances 1,751,000 1,096,000 1,751,000 774,000Export credit refinancing – 31,000 – –

1,872,994 1,522,152 1,872,994 796,209

4,099,603 3,839,672 1,939,085 847,531

13.1 SECURITY

The finance lease liabilities are secured as the rights to the leased assets revert to the lessor in the event of default.

The term loans are secured over certain plant, machinery and equipment (see Note 3).



13. LOANS AND BORROWINGS (CONT’D)

13.2 FINANCE lEASE lIABIlITIES

Finance lease liabilities are payable as follows :

2015 2014

Future minimum

lease payments Interest

Present value of

minimum lease

payments

Future minimum

lease payments Interest

Present value of

minimum lease

paymentsRM RM RM RM RM RM

Group

Less than 1 year 72,282 6,191 66,091 290,502 48,528 241,974Between 1 and 5 years 84,756 3,566 81,190 450,521 39,892 410,629

157,038 9,757 147,281 741,023 88,420 652,603

Company

Less than 1 year 72,282 6,191 66,091 58,488 7,166 51,322Between 1 and 5 years 84,756 3,566 81,190 61,851 6,816 55,035

157,038 9,757 147,281 120,339 13,982 106,357

14. ADVANCES FROM A SHAREHOLDER, UNSECURED - GROUP

Note 2015 2014RM RM

Non - current

Advances from a shareholder 14.1 13,816,969 13,816,969

Current

Advances from a shareholder 14.1 – 2,510,000

14.1 The advances from a shareholder are unsecured and carry interests at 6.60% - 6.85% (2014: 6.60%) per annum.

The Company has issued a corporate guarantee of the similar amount in favour of the shareholder to guarantee the repayment of debt by the subsidiaries.

Long term advances shall be repaid by 31 August 2016 based on the extended repayment period granted by the shareholder during the financial year.



15. PROVISION FOR LIQUIDATED DAMAGES - GROUP

Note RM

At 1 March 2013/28 February 2014/1 March 2014 600,000Less : Reversal of provision for liquidated damages 18 (600,000)

At 28 February 2015 –

The provision for liquidated damages was previously related to the compensation to buyers for late delivery of the project undertaken by the subsidiary, GASB.

16. TRADE AND OTHER PAYABLES


RM RM RM RM

Trade

Subsidiary 16.1 – – 265,054 267,960Trade payables 7,502,577 7,175,137 – –Progress billings 2,978,550 2,978,550 – –

10,481,127 10,153,687 265,054 267,960

Non-trade

Subsidiaries 16.1 – – – 617,398Other payables 2,025,432 1,150,076 219,853 185,504Accrued expenses 3,237,642 3,130,189 263,990 226,754

5,263,074 4,280,265 483,843 1,029,656

15,744,201 14,433,952 748,897 1,297,616

16.1 AMOUNT DUE TO SUBSIDIARIES

The trade amount due to a subsidiary is subject to normal trade terms.

The non-trade amount due to subsidiaries is unsecured, interest-free and repayable on demand.



17. REVENUE

Group Company 2015 2014 2015 2014

RM RM RM RM

Sale of goods 43,083,124 40,601,443 282,289 169,270Commission income – – 1,453,110 658,890Property development revenue 839,608 – – –Dividend – – 1,000,000 1,230,000Management fees received – – 588,411 –

43,922,732 40,601,443 3,323,810 2,058,160

18. RESULTS FROM OPERATING ACTIVITIES

Results from operating activities is arrived at after charging :

Group Company 2015 2014 2015 2014

RM RM RM RM

Auditors’ remunerationAudit fees

- KPMG 70,300 70,300 16,225 16,225Other services

- KPMG 6,000 6,000 6,000 6,000- Affiliates of KPMG 25,069 20,317 8,465 7,260

Depreciation of : - property, plant and equipment (Note 3) 4,185,819 4,888,143 115,282 88,887- investment property (Note 4) 125,680 20,315 – –

Directors’ emolumentsDirectors of the Company

- Fees 25,200 25,200 25,200 25,200- Others 971,426 869,008 971,426 850,669

Plant and equipment written off (Note 3) 25,021 842 89 15Rental of premises 24,200 24,000 24,200 24,000Impairment loss on trade receivables – 17,126 – –Bad debts written off 3,584 – 3,584 –

and crediting :

Dividend income from a subsidiary – – 1,000,000 1,230,000Rental income from properties 46,800 66,300 – –Gain on disposal of property, plant and equipment 131,855 13,619 – 107Interest income 175,838 96,604 85,046 56,536



18. RESULTS FROM OPERATING ACTIVITIES (CONT’D)

Group Company 2015 2014 2015 2014

RM RM RM RM

and crediting : (Cont’d)

Gain on foreign exchange- realised 117,207 272,418 – –- unrealised 16,112 80,824 – –

Reversal of impairment loss on :

- investments in subsidiaries – – – 15,000,000- property – 2,035,453 – –

Reversal of provision for liquidated damages 600,000 – – –

The estimated monetary value of Directors’ benefits-in-kind of the Group and of the Company otherwise than in cash is

RM18,755 (2014 : RM26,349).

Included in Directors’ emoluments - others of the Group and of the Company is an amount of RM101,903 (2014 : RM95,884), representing contributions made to state plans.

19. FINANCE COSTS

Group Company 2015 2014 2015 2014

RM RM RM RM

Bank overdrafts 1,838 1,151 798 501Banker’s acceptances 20,435 65,427 20,137 40,948Advances from a shareholder 934,342 1,356,460 – 80,845Finance lease obligations 16,274 81,102 8,053 9,039Term loans 713,881 697,497 – –Export credit refinancing 536 15,287 – –

1,687,306 2,216,924 28,988 131,333

20. EMPLOYEE INFORMATION

Group Company 2015 2014 2015 2014

RM RM RM RM

Staff costs 8,560,250 8,140,965 507,637 491,827

Staff costs of the Group and of the Company include contributions to the Employees’ Provident Fund of RM629,930 (2014 : RM605,852) and RM60,778 (2014 : RM59,229) respectively.



21. KEY MANAGEMENT PERSONNEL COMPENSATIONS

Group Company 2015 2014 2015 2014

RM RM RM RM

Directors- Remuneration 971,426 869,008 971,426 850,669- Other short term employee benefits (including estimated monetary value of benefits-in-kind) 18,755 26,349 18,755 26,349

990,181 895,357 990,181 877,018

Other key management personnel- Short term employee benefits 780,989 750,776 294,577 236,149

1,771,170 1,646,133 1,284,758 1,113,167

Other key management personnel comprises persons other than the Directors of the Group and of the Company having authority and responsibility for planning, directing and controlling the activities of the entity either directly or indirectly.

22. TAX EXPENSE

RECOGNISED IN PROFIT OR LOSS

Group Company 2015 2014 2015 2014

RM RM RM RM

Current tax expense

- current year 122,250 30,000 21,250 72,500- prior years (24,021) 4,620 (17,000) 796

98,229 34,620 4,250 73,296

Deferred tax expense

- Origination and reversal of temporary differences 653,000 938,000 – –- Over provision in prior years (128,000) (619,000) – –

525,000 319,000 – –

Total tax expense 623,229 353,620 4,250 73,296



22. TAX EXPENSE (CONT’D)

RECONCILIATION OF TAX EXPENSE

Group Company 2015 2014 2015 2014

RM RM RM RM

Profit before tax 6,129,620 6,267,995 973,379 15,427,930

Tax at Malaysian tax rate of 25% (2014 : 25%) 1,532,405 1,566,999 243,345 3,856,983Non-deductible expenses 234,792 349,467 29,273 41,229Tax exempt income (153,500) (508,859) (250,000) (4,000,000)Tax incentive (377,823) (625,482) – –Effect of deferred tax asset not recognised 36,486 185,050 (1,302) 159,423Effect of change in tax rate* (508,094) – – –Other items 10,984 825 (66) 14,865

775,250 968,000 21,250 72,500

(Over)/Under provision in prior years (152,021) (614,380) (17,000) 796

Tax expense 623,229 353,620 4,250 73,296

* The corporate tax rates are 25% for year of assessment 2015 and 24% for subsequent years of assessment. Consequently, deferred tax assets and liabilities are measured during these tax rates.

23. EARNINGS PER ORDINARY SHARE - GROUP

BASiCEARNiNGSPERORDiNARyShARE

The calculation of basic earnings per ordinary share as at 28 February 2015 was based on the Group’s profit attributable to the owners of the Company of RM5,506,391 (2014 : RM5,914,375) and on the weighted average number of ordinary shares outstanding during the year of 159,974,948 (2014 : 159,974,948).

24. OPERATING SEGMENTS

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

Fibre glasswool and related products Manufacturer and distributor of fibre glasswool and other related products

Property development Development of a country retreat comprising bungalow lots and orchard lots

Investment holding Investment in shares and letting of properties



24. OPERATING SEGMENTS (CONT’D)

Performance is measured based on segment profit before tax and interest expense as included in the internal management reports that are reviewed by the Group’s Chief Executive Officer (the chief operating decision maker). Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

SEGMENT ASSETS The total of segment asset is measured based on all assets of a segment, as included in the internal management reports

that are reviewed by the Group’s Chief Executive Officer. Segment total asset is used to measure the return of assets of each segment.

SEGMENT LIABILITIES Segment liabilities information is neither included in the internal management reports nor provided regularly to the Group’s

Chief Executive Officer. Hence no disclosure is made on segment liability.

SEGMENT CAPITAL EXPENDITURE

Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant and equipment.

Fibre glasswool

and related products

Property development

Investment holding Total

RM’000 RM’000 RM’000 RM’000

2015

Segment profit/(loss) 7,450 109 258 7,817

includedinthemeasureofsegmentprofitare:Revenue from external customers 43,083 840 – 43,923Depreciation and amortisation 3,932 – 379 4,311Interest income 176 – – 176Reversal of provision for liquidated damages – 600 – 600

Notincludedinthemeasureofsegmentprofit butprovidedtoChiefExecutiveOfficer:Finance costs 1,326 1 360 1,687Tax expense 1,105 (553) 71 623

Segment assets 65,998 99,456 12,594 178,048

includedinthemeasureofsegmentassetsare:Additions to non-current assets other than financial instruments 2,546 124 736 3,406Deferred tax assets 1,078 – – 1,078



24. OPERATING SEGMENTS (CONT’D)

Fibre glasswool

and related products

Property development

Investment holding Total

RM’000 RM’000 RM’000 RM’000

2014

Segment profit/(loss) 7,173 (684) 1,996 8,485

includedinthemeasureofsegmentprofitare:Revenue from external customers 40,601 – – 40,601Reversal of impairment loss on property – – 2,035 2,035Depreciation and amortisation 4,676 1 231 4,908Interest income 97 – – 97

Notincludedinthemeasureofsegmentprofit butprovidedtoChiefExecutiveOfficer:Finance costs 1,659 194 364 2,217Tax expense 350 – 4 354

Segment assets 64,114 100,058 12,940 177,112

includedinthemeasureofsegmentassetsare:Additions to non-current assets other than financial instruments 2,953 – 1,785 4,738Deferred tax assets 2,156 – – 2,156

GEOGRAPHICAL SEGMENTS

The Group’s business is mainly carried out in Malaysia, Indonesia, Oceania and Singapore.

In presenting information on the basis of geographical segments, segment revenue is based on geographical location of customers. Segment assets are based on the geographical location of the assets. The amounts of non-current assets do not include financial instruments and deferred tax assets.

2015 2014

RevenueNon-current

assets RevenueNon-current

assetsRM’000 RM’000 RM’000 RM’000

Geographical information

Malaysia 19,494 151,534 18,157 153,254Asia (excluding Malaysia) 15,305 – 15,437 –Oceania 8,348 – 4,931 –Others 776 – 2,076 –

43,923 151,534 40,601 153,254



25. RELATED PARTIES

25.1 IDENTITY OF RElATED PARTIES

For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. Related parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. Key management personnel includes the Executive Directors of the Group and certain members of senior management of the Group.

The Group has a related party relationship with its subsidiaries (see Note 5), a corporate shareholder, Directors and key management personnel.

25.2 SIGNIFICANT RElATED PARTY TRANSACTIONS

Related party transactions have been entered into in the normal course of business under normal trade terms. The significant related party transactions of the Group and the Company are shown below. The balances related to the below transactions are shown in Notes 9, 14 and 16.

i) Transactions with related companies

2015 2014RM RM

Sales to a subsidiary 282,289 169,270Commission income 1,453,110 658,890Management fees received 588,411 –

ii) Transactions with Equaplus Sdn. Bhd., a corporate shareholder of the Company

Group Company 2015 2014 2015 2014

RM RM RM RM

Interest payable and paid 934,342 1,356,460 – 80,845

iii) Transactions with Directors and key management personnel

There were no transactions with Directors and key management personnel other than the remuneration package paid to them in accordance with the terms and conditions of their appointment as disclosed in Note 21.

26. CAPITAL COMMITMENT - GROUP

2015 2014RM’000 RM’000

Property, plant and equipment- Authorised but not contracted for 5,361 –- Contracted but not provided for 8,249 836

13,610 836



27. MATERIAL LITIGATIONS

GOlDEN APPROACH SDN. BHD. (“GASB”)

i) On 20 July 2005, GASB was served a Writ of Summons and a Statement of Claim issued from the Kuala Lumpur High Court (“KLHC”) by a Contractor of GASB for claims of RM3,212,689 (being outstanding sum on Interim Certificates issued by the Engineer and a further amount derived from Tasja’s final claim amounting to RM1,316,784 and RM1,895,905 respectively). GASB disputed the claims.

On the application of GASB, the KLHC has struck out the claim by Tasja on 3 April 2006 and the decision was affirmed

by the Court of Appeal (“COA”) on 13 August 2009. The Federal Court however had on 22 November 2010 allowed Tasja’s appeal with costs and remitted the matter to the KLHC for full trial.

The KLHC has heard the evidence of both Tasja and GASB and on 13 June 2012, the KLHC has allowed Tasja’s claim for the sum of RM3,212,689 with interest and cost of RM20,000 awarded to Tasja. An appeal against the KLHC decision has been lodged with the COA. On the hearing of the appeal on 22 May 2013, the COA has directed that the case be refixed for hearing before another panel of judges as a member of the COA has heard the appeal in the KLHC. When the matter came up for case management on 23 July 2013, the COA proceeded to fix the hearing of the appeal on 17 October 2013.

On 17 October 2013, the COA after hearing submissions from both counsels unanimously allowed GASB’s appeal and set aside the KLHC’s order given on 12 June 2012 with cost of RM10,000 awarded to GASB. The court has also ordered the sum of RM6,309,565 paid into KLHC be released to GASB.

Tasja has filed a Notice of Motion on 14 November 2013 for leave to appeal to the Federal Court. Hearing has been postponed several times. The Federal Court has requested for the ground of judgement from COA before fixing a hearing date of the Motion. On 29 June 2015, the Federal Court has fixed 8 September 2015 for a further case management pending release of the ground of judgement.

28. FINANCIAL INSTRUMENTS

28.1 CATEGORIES OF FINANCIAL INSTRUMENTS

The table below provides an analysis of financial instruments categorised as follows :

(a) Loans and receivables (“L&R”); and(b) Financial liabilities measured at amortised cost (“FL”).

Carrying amount L&R

RM RM

Financial assets

2015

Group

Trade and other receivables (excluding prepayments) 10,747,837 10,747,837Cash and cash equivalents 6,038,949 6,038,949

16,786,786 16,786,786Company


23,522,238 23,522,238



28. FINANCIAL INSTRUMENTS (CONT’D)

28.1 CATEGORIES OF FINANCIAL INSTRUMENTS (CONT’D)

Carrying amount L&R

RM RM

Financial assets

2014

Group


14,570,188 14,570,188Company


25,790,006 25,790,006

Carrying amount FL

RM RM

Financial liabilities

2015

Group

Loans and borrowings 14,599,499 14,599,499Trade and other payables 15,744,201 15,744,201Advances from a shareholder 13,816,969 13,816,969

44,160,669 44,160,669

Company

Loans and borrowings 2,020,275 2,020,275Trade and other payables 483,843 483,843Amount due to subsidiaries 265,054 265,054

2,769,172 2,769,172




28.1 CATEGORIES OF FINANCIAL INSTRUMENTS (CONT’D)

Carrying amount FL

RM RM

Financial liabilities

2014

Group

Loans and borrowings 16,824,458 16,824,458Trade and other payables 14,433,952 14,433,952Advances from a shareholder 16,326,969 16,326,969

47,585,379 47,585,379

Company

Loans and borrowings 902,566 902,566Trade and other payables 412,258 412,258Amount due to subsidiaries 885,358 885,358

2,200,182 2,200,182

28.2 NET GAINS AND LOSSES ARISING FROM FINANCIAL INSTRUMENTS

Group Company 2015 2014 2015 2014

RM RM RM RM

Net (losses)/gains arising on :

Loans and receivables 305,573 283,572 81,462 56,536Financial liabilities measured at amortised cost (1,687,306) (2,216,924) (28,988) (131,333)

(1,381,733) (1,933,352) 52,474 (74,797)

28.3 FINANCIAL RISK MANAGEMENT

The Group has exposures to the following risks from its use of financial instruments :

• Credit risk• Liquidity risk• Market risk




28.4 CREDIT RISK

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers. The Company’s exposure to credit risk arises principally from loans and advances to subsidiaries.

RECEIVABLES

RiSKMANAGEMENTOBJECTivES,POliCiESANDPROCESSESFORMANAGiNGThERiSK

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

ExPOSuRETOCREDiTRiSK,CREDiTquAliTyANDCOllATERAl

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statement of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than 60 days, which are deemed to have higher credit risk, are monitored individually.

The receivables of the Group and the Company that are secured by financial guarantees given by directors of the customers are as follows :

Group Company 2015 2014 2015 2014

RM RM RM RM

Secured by :

Financial guarantees given by directors of the customers 2,623,986 2,368,706 2,623,986 2,087,870

The exposure to credit risk for trade receivables as at the end of reporting period by geographic region was :

Group Company 2015 2014 2015 2014

RM RM RM RM

Malaysia 7,224,553 6,395,516 17,613,631 20,295,439Asia (excluding Malaysia) 330,510 1,701,086 – –Oceania 899,421 832,065 – –

8,454,484 8,928,667 17,613,631 20,295,439




28.4 CREDIT RISK (CONT’D)

RECEIVABLES (CONT’D)

iMPAiRMENTlOSSES

The Group and the Company maintain an ageing analysis in respect of trade receivables only. The ageing of trade receivables as at the end of the reporting period was :

GrossIndividual

impairment NetRM RM RM

Group

2015

Not past due 2,692,002 – 2,692,002Past due 1 - 30 days 2,458,885 – 2,458,885Past due 31 - 60 days 420,872 – 420,872Past due more than 60 days 2,882,725 – 2,882,725

8,454,484 – 8,454,484

2014

Not past due 4,038,048 – 4,038,048Past due 1 - 30 days 2,090,827 – 2,090,827Past due 31 - 60 days 350,227 – 350,227Past due more than 60 days 2,466,691 (17,126) 2,449,565

8,945,793 (17,126) 8,928,667

Company

2015

Not past due 15,562,477 – 15,562,477Past due 1 - 30 days 1,588,349 – 1,588,349Past due 31 - 60 days 410,093 – 410,093Past due more than 60 days 52,712 – 52,712

17,613,631 – 17,613,631

2014

Not past due 19,053,953 – 19,053,953Past due 1 - 30 days 1,039,179 – 1,039,179Past due 31 - 60 days 184,963 – 184,963Past due more than 60 days 17,344 – 17,344

20,295,439 – 20,295,439




28.4 CREDIT RISK (CONT’D)

RECEIVABLES (CONT’D)

iMPAiRMENTlOSSES(CONT’D)

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

Group Company 2015 2014 2015 2014

RM RM RM RM

At 1 March 2014/2013 17,126 16,128 – –Impairment loss recognised – 17,126 – –Impairment loss written off (17,126) (16,128) – –

At 28 February – 17,126 – –

The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group and the Company is satisfied that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.

FINANCIAL GUARANTEES


The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries and to a shareholder, Equaplus Sdn. Bhd. in respect of advances given to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries.


The maximum exposure to credit risk amounts to RM12,579,000 (2014 : RM14,650,000) and RM13,817,000 (2014 : RM16,327,000) representing the outstanding banking facilities of the subsidiaries and amount owing to a corporate shareholder, Equaplus Sdn. Bhd. by the subsidiaries as at the end of the reporting period.

As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.

The financial guarantees have not been recognised since the fair value on initial recognition was not material.

INTER COMPANY LOANS AND ADVANCES


The Company provides unsecured loans and advances to subsidiaries. The Company monitors the results of the subsidiaries regularly.


As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.

Loans and advances are only provided to subsidiaries which are wholly owned by the Company.




28.4 CREDIT RISK (CONT’D) INTER COMPANY LOANS AND ADVANCES (CONT’D)

iMPAiRMENTlOSSES

As at the end of the reporting period, there was no indication that the loans and advances to the subsidiaries are not recoverable. The Company does not specifically monitor the ageing of the advances to the subsidiaries.

28.5 LIQUIDITY RISK

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.


NOTES TO THE FINANCIAL STATEMENTS (Cont’d)28

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Non-derivativefinancialliabilities

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28.6 MARKET RISK

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affect the Group’s financial position or cash flows.

28.6.1 CURRENCY RISK

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than Ringgit Malaysia. The currencies giving rise to this risk are primarily New Zealand Dollar, US Dollar, Singapore Dollar, Japanese Yen, Australian Dollar and Euro.


The Group uses forward exchange contracts to hedge its foreign currency risk. Most of the forward exchange contracts have maturities of less than one year after the end of the reporting period.

ExPOSuRETOFOREiGNCuRRENCyRiSK

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

Denominated inNew

ZealandDollar

USDollar

Singapore Dollar

japaneseYen

Australian Dollar Euro

RM RM RM RM RM RM

Group

2015

Balances recognised in the statement of financial position

Trade receivables 177,982 (32,362) 167,537 268,658 – –Trade payables – (450,655) (3,727) (41,385) (97,768) (104,228)

177,982 (483,017) 163,810 227,273 (97,768) (104,228)

Forecast transactions

Forecast sales – – – 587,057 – –Forward exchange contract on forecast sales – – – (465,059) – –

– – – 121,998 – –

Net exposure 177,982 (483,017) 163,810 349,271 (97,768) (104,228)




28.6 MARKET RISK (CONT’D)

28.6.1 CURRENCY RISK (CONT’D)

ExPOSuRETOFOREiGNCuRRENCyRiSK(CONT’D)

Denominated inNew

Zealand Dollar US Dollar

Singapore Dollar

japaneseYen

RM RM RM RM

Group

2014

Balances recognised in the statement of financial position

Trade receivables 133,986 21,187 362,928 1,349,907Trade payables – (33,139) – –

133,986 (11,952) 362,928 1,349,907

Forecast transactions

Forecast sales – – – 4,176,166Forward exchange contract on forecast sales – – – (2,510,489)

– – – 1,665,677

Net exposure 133,986 (11,952) 362,928 3,015,584

CuRRENCyRiSKSENSiTiviTyANAlySiS

Foreign currency risk arises from Group entities which have a Ringgit Malaysia (RM) functional currency.

A 5% strengthening of the RM against the following currencies at the end of the reporting period would have increased/(decreased) post-tax profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that Group considered to be reasonably possible at the end of the reporting period. This analysis assumes that all other variables, in particular interest rates, remained constant and ignores any impact of forecasted sales and purchases.





28.6.1 CURRENCY RISK (CONT’D)

CuRRENCyRiSKSENSiTiviTyANAlySiS(CONT’D)

Profit or loss2015 2014

Group RM RM

New Zealand Dollar (6,674) (5,024)US Dollar 18,113 448Singapore Dollar (6,143) (13,610)Japanese Yen 8,917 43,522Australian Dollar 3,666 –Euro 3,909 –

A 5% weakening of RM against the above currencies at the end of the reporting period would have had equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remained constant.

28.6.2 INTEREST RATE RISK

The Group’s and the Company’s exposures to interest rate risk is confined to the fluctuations in interest rates on borrowings which vary with reference to the prime lending rate of the banks.


The Group and the Company borrow for operations at variable rates using their banking facilities, and use fixed rate finance lease facility as well as the floating rate term loan to finance their capital expenditure. The Group and the Company also obtained advances from a major shareholder for which the financing cost is also essentially pegged against the bank’s borrowing costs that varies according to the prime lending rate of an anchor bank.

ExPOSuRETOiNTERESTRATERiSK

The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was :

Group Company 2015 2014 2015 2014

RM RM RM RM

Fixed rate instruments

Financial assets 5,433,340 2,278,731 4,764,845 –Financial liabilities (7,642,322) (16,429,306) (1,898,281) (880,357)

(2,208,982) (14,150,575) 2,866,564 (880,357)

Floating rate instruments

Financial liabilities (20,774,146) (16,722,121) (121,994) (22,209)





28.6.2 INTEREST RATE RISK (CONT’D)

iNTERESTRATERiSKSENSiTiviTyANAlySiS

(A) FAiRvAluESENSiTiviTyANAlySiSFORFixEDRATEiNSTRuMENTS

The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

(B) CAShFlOWSENSiTiviTyANAlySiSFORFlOATiNGRATEiNSTRuMENTS

A change of 50 basis points (“bp”) in interest rates at the end of the reporting period would have increased/(decreased) post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remained constant.

Profit or loss Group Company

50 bp increase

50 bp decrease

50 bp increase

50 bpdecrease

RM RM RM RM

2015

Floating rate instruments (77,903) 77,903 (457) 457

2014

Floating rate instruments (62,708) 62,708 (83) 83

28.7 FAIR VALUE INFORMATION

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



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28.7 FAIR VALUE INFORMATION (CONT’D)

LEVEL 3 FAIR VALUE

Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.

The fair value of advances from a shareholder, term loans and finance lease liabilities are calculated using discounted cash flows.

29. CAPITAL MANAGEMENT

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

During 2015, the Group’s strategy which was unchanged from 2014, was to maintain the debt-to-equity ratio at below 1.5 : 1. The debt-to-equity ratios at 28 February 2015 and 28 February 2014 were as follows :

Group2015 2014

RM’000 RM’000

Total borrowings 28,416 33,151Less : Cash and cash equivalents (Note 10) (6,039) (5,563)

Net debt 22,377 27,588

Total equity 120,616 115,110

Debt-to-equity ratio 0.19 0.24

There were no changes in the Group’s approach to capital management during the financial year.



30. SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS OR LOSSES

The breakdown of the accumulated losses of the Group and of the Company as at 28 February 2015 and 28 February 2014, into realised and unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows :

Group Company 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Total accumulated losses of the Company and its subsidiaries

- realised (139,986) (145,366) (93,411) (94,380)- unrealised (12,170) (12,180) – –

(152,156) (157,546) (93,411) (94,380)

Less : Consolidation adjustments 69,158 69,042 – –

Total accumulated losses (82,998) (88,504) (93,411) (94,380)

The determination of realised and unrealised profits is based on the Guidance of Special Matter No. 1, DeterminationofRealisedandunrealisedProfitsorlossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadlistingRequirements, issued by the Malaysian Institute of Accountants on 20 December 2010.


STATEMENT BY DIRECTORSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

In the opinion of the Directors, the financial statements set out on pages 25 to 85 are drawn up in accordance with 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 of 28 February 2015 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the information set out in Note 30 on page 86 to the financial statements has been compiled in accordance with the Guidance on Special Matter No. 1, DeterminationofRealisedandunrealisedProfitsorlosses in theContextofDisclosuresPursuanttoBursaMalaysiaSecuritiesBerhadlistingRequirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

Fong Wern Sheng Tan Ming Chong

Penang,

Date: 30 June 2015


STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, Tan Ming Chong, the Director primarily responsible for the financial management of Poly Glass Fibre (M) Bhd., do solemnly and sincerely declare that the financial statements set out on pages 25 to 86 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed at Georgetown in the State of Penang on 30 June 2015.

Tan Ming Chong

Before me:Goh Suan Bee(No. P125)Commissioner for OathsPenang


INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF POLY GLASS FIBRE (M) BHD.

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Poly Glass Fibre (M) Bhd., which comprise the statements of financial position as at 28 February 2015 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 25 to 85.

DiRECTORS’RESPONSiBiliTyFORThEFiNANCiAlSTATEMENTS

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 Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal controls 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 the 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 of 28 February 2015 and of their financial performance and cash flows for the year then ended in accordance with 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 accounts of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

c) Our audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.


OTHER REPORTING RESPONSIBILITIES

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 30 on page 86 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance of Special Matter No. 1, DeterminationofRealisedandunrealisedProfitsorlossesintheContextofDisclosuresPursuanttoBursaMalaysiaSecuritiesBerhadlistingRequirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG Ooi Kok SengAF 0758 2432/05/17 (J)Chartered Accountants Chartered Accountant

Date: 30 June 2015

Penang

INDEPENDENT AUDITORS’ REPORT (Cont’d) TO THE MEMBERS OF POLY GLASS FIBRE (M) BHD.


LIST OF PROPERTIES

Location/Address Tenure Area Description

Age ofAssets(Years)

Net BookValueRM’000

Date ofValuation/Acquisition

1. Plot 255, Mukim 1Prai Industrial EstateSeberang Perai TengahPulau Pinang

Leasehold(60 yearsexpiring25.10.2044)

6,151sq. metres

Office andFactoryBuilding

)))



10,117sq. metres


)))

29 6,914 01-03-1992



19,806sq. metres


7 6,330 12-08-2008

4. Unit No. A12A.01Lot No. 491, Section 10Town of GeorgetownNorth East District ofPenang

Freehold 1,908sq. metres

Light IndustrialLot

2 6,107 28-03-1996

5. Diamond CreeksCountry RetreatMukim Ulu Bernam Timur,Daerah Batang Padang,Perak


3,621,930sq. metres

Land held forfutureDevelopment

18 96,913* 07-11-2012

* ForadditionaldetailspleaserefertoNote6ofthefinancialstatements


ANALYSIS OF SHAREHOLDINGSAS AT 30 jUNE 2015

Class of Securities : Ordinary shares of RM1.00 eachAuthorised Share Capital : RM300,000,000.00Issued and Fully Paid-up Capital : RM159,974,948.00Voting Rights : Every member of the Company present in person or by proxy shall have one vote on a

show of hands, and in the case of poll, shall have one vote for every share of which he is the holder.

DIRECTORS’ SHAREHOLDINGS IN THE COMPANY

Name Direct % Deemed %

Fong Wern Sheng 10,797,400 6.75 24,323,053(i) 15.20Tan Ming Chong – – – –Fong Wah Kai 6,798,800 4.25 78,056,900(ii) 48.79Sia Taik Hian – – – –Omar Bin Mohamed Said – – – –Khoo Kah Hock – – – –

LIST OF SUBSTANTIAL SHAREHOLDERS OF THE COMPANY

Name of Shareholders Direct % of Shares Deemed % of Shares

Fong Wah Kai 6,798,800 4.25 78,056,900(ii) 48.79Equaplus Sdn Bhd 78,056,900 48.79 – –Fong Wern Sheng 10,797,400 6.75 24,323,053(i) 15.20Green Cluster Sdn Bhd 24,323,053 15.20 – –

Notes : (i) DeemedinterestedbyvirtueofSection6A(4)oftheCompaniesAct1965andheldthroughGreenClusterSdnBhd(ii) DeemedinterestedbyvirtueofSection6A(4)oftheCompaniesAct1965andheldthroughEquaplusSdnBhd

DISTRIBUTION SCHEDULE OF SHAREHOLDINGS

No. of Holders Size of Holdings Total Holdings %

87 Less than 100 1,360 0.001,786 100 to 1,000 shares 1,734,996 1.092,458 1,001 to 10,000 shares 9,220,632 5.76

325 10,001 to 100,000 shares 8,676,000 5.4232 100,001 to less than 5% of issued shares 37,962,007 23.73

2 5% and above of issued shares 102,379,953 64.00

4,692 TOTAL 159,974,948 100.00


ANALYSIS OF SHAREHOLDINGS (Cont’d)AS AT 30 jUNE 2015

LIST OF THIRTY (30) LARGEST SHAREHOLDERS

Shareholder’s Name Shareholdings %

1. Equaplus Sdn. Bhd. 78,056,900 48.79

2. Green Cluster Sdn. Bhd. 24,323,053 15.20

3. Mayban Nominees (Tempatan) Sdn. Bhd.Fong Wern Sheng

6,510,600 4.07

4. Tan Seok Leng 6,317,000 3.95

5. Cimsec Nominees (Tempatan) Sdn. Bhd.Pengurusan Danaharta Nasional Berhad for MKDV Sdn Bhd

4,562,211 2.85

6. Mayban Nominees (Tempatan) Sdn. Bhd.Fong Wah Kai

4,440,600 2.78

7. Mayban Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Fong Wern Sheng

4,257,000 2.66

8. Koh Chye Khim 3,514,996 2.20

9. Fong Wah Kai 2,341,600 1.46

10. Mayban Nominees (Tempatan) Sdn BhdPledged Securities Account for Tan Kok Hooy

726,000 0.45

11. Ooi Say Hup 459,000 0.29

12. Ooi Say Hup 449,900 0.28

13. Foh Chong & Sons Sdn Bhd 338,000 0.21

14. Tan Chong Kheng 310,000 0.19

15. Tiew Sin Kok 310,000 0.19

16. JF Apex Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Say Fung

309,000 0.19

17. Lim Jin Chow 281,000 0.18

18. Lim Jin Keat 281,000 0.18

19. Lim Tye Nee 281,000 0.18

20. Wui Mee Ling 280,000 0.18

21. Oh Siew Suah @ Kenneth 219,000 0.14

22. Chang Ah Boon 210,700 0.13

23. Sam Ah Tak 201,000 0.13

24. Tan Hock Ghee 150,000 0.09

25. Ong Ah Yiew @ Ong Keng Wah 140,000 0.09

26. Goh Hui Nee 138,300 0.09

27. Perbadanan Kemajuan Negeri Selangor 136,000 0.09

28. Chong Joon Hau 124,500 0.08

29. Lim Yam Kiew 120,000 0.08

30. Perbadanan Kemajuan Negeri Selangor 120,000 0.08


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 25th Annual General Meeting of the Company will be held at Kelawai Room, Level 1, Evergreen Laurel Hotel Penang, No. 53, Persiaran Gurney, 10250 Penang on 18 August 2015 at 2.30 p.m. for the following purposes: -

AGENDAORDINARY BUSINESS

1. To receive the Company’s Audited Financial Statements for the year ended 28 February 2015 together with the Reports of Directors and Auditors thereon.

2. To re-elect the following Directors who retire in accordance with Article 84 of the Articles of Association of the Company, and being eligible have offered themselves for re-election: -

(a) Mr. Fong Wah Kai (Resolution 1)

(b) Mr. Sia Taik Hian (Resolution 2)

3. To approve the Directors’ Fees and Remuneration. (Resolution 3)

4. To re-appoint Messrs KPMG as Auditors to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration. (Resolution 4)

SPECIAL BUSINESS

To consider and if thought fit, to pass the following as Ordinary Resolution: -

5. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965

“That, subject always to the Companies Act, 1965 (“the Act”) and the Articles of Association of the Company and approvals of the Bursa Malaysia Securities Berhad (“Bursa Securities”) and other relevant Governmental or regulatory authorities, where such approvals are necessary, the Directors be and are hereby given full authority, pursuant to Section 132D of the Act to issue and allot shares in the capital of the Company at any time upon such terms and conditions and for such purposes as the Directors may, in their discretion, deem fit, provided that the aggregate number of the shares to be issued pursuant to this resolution does not exceed ten percentum (10%) of the issued and paid-up share capital of the Company for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting (“AGM”) of the Company.” (Resolution 5)

6. CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS

(a) Subject to the passing of Resolution 2, to retain the Mr. Sia Taik Hian, who has served for more than nine (9) years as Independent Non-Executive Director of the Company, pursuant to Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012 (the “Code”) (Resolution 6)

(b) To retain the En. Omar Bin Mohamed Said, who have served for more than nine (9) years as Independent Non-Executive Director of the Company, pursuant to Recommendation 3.3 of the Code. (Resolution 7)

7. To transact any other ordinary business for which due notice has been given in accordance with the Act.

NOTICE IS HEREBY GIVEN that for purpose of determining a member who shall be entitled to attend this 25th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with the Article 62(3) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 11 August 2015. Only a depositor whose name appears on the Record of Depositors as at 11 August 2015 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf.

By Order of the Board

Ch’ng Lay HoonCompany Secretary

Penang

27 July 2015


NOTICE OF ANNUAL GENERAL MEETING (Cont’d)

NOTES:

1. Appointment of Proxy

A member entitled to attend, speak and vote at this meeting may appoint more than one (1) proxy, who need not be a member, to attend, speak and vote in his stead. Where a member appoints more than one (1) Proxy the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

If the appointer is a corporation, the form of proxy must be executed under its Common Seal or under the hand of its officer or attorney duly authorised.

Where a member of the Company is an exempt authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991 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 authorized nominee may appoint in respect of each Omnibus Account it holds.

To be valid, the duly completed form of proxy must be deposited at the Company’s registered office at Suite 12A, Level 12, Menara Northam, No. 55, Jalan Sultan Ahmad Shah, 10050 Penang, not less than forty-eight (48) hours before the time stipulated for holding the meeting or adjournment thereof.

Should you desire your proxy to vote on the resolutions set out in the Notice of Meeting, please indicate with a “√” in the appropriate space. If no specific direction as to voting is given, the Proxy will vote or abstain at his discretion.

Explanatory Note on Special Business

Resolution 5

The proposed resolution is in relation to authority to allot shares pursuant to Section 132D of the Act, and if passed, will give a renewed mandate to the Directors of the Company, from the date of above AGM, authority to issue and allot shares in the Company up to and not exceeding in total ten percentum (10%) of the issued share capital of the Company for the time being, for such purposes as the Directors consider would be in the interest of the Company (“General Mandate”). This General Mandate, unless revoked or varied at a general meeting of the Company, will expire at the conclusion of the next AGM of the Company or the period within which the next AGM of the Company is required by law to be held whichever is the earlier.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors of the Company at the 24th AGM held on 18 August 2014 and which will lapse at the conclusion of the 25th AGM.

At this juncture, there is no decision to issue new shares. However, should the need arise to issue new shares the General Mandate would avoid any delay and costs in convening a general meeting of the Company to specifically approve such issue of share. If there should be a decision to issue new shares after the General Mandate is obtained, the Company would make an announcement in respect of the purpose and utilization of the proceeds arising from such issue.

Resolution 6 & 7

The Board of Directors via the Nominating Committee assessed the independence of Mr. Sia Taik Hian and En. Omar Bin Mohamed Said, who has served on the Board as Independent Non-Executive Directors of the Company for a cumulative of more than nine (9) years and the Board has recommended that the approval of the shareholders be sought to re-appoint Mr. Sia Taik Hian and En. Omar Bin Mohamed Said, based on the following justifications: -

(a) They have met the criteria the independence guidelines set out in Chapter 1 of the Main Market Listing Requirements of Bursa Securities and therefore able to give independent opinion to the Board;

(b) Being directors for more than nine (9) years have enabled them to contribute positively during deliberations/discussions at meetings as they are familiar with the operations of the Company and possess tremendous knowledge of the Company’s operations;

(c) They have the caliber, qualifications, experiences and personal qualities to challenge management in an effective and constructive manner; and

(d) They have contributed sufficient time and exercised due care during their tenure as Independent Non-Executive Directors and carried out their fiduciary duties in the interest of the Company and minority shareholders.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING PURSUANT TO PARAGRAPH 8.27(2) OF BURSA MALAYSIA SECURITIES BERHAD’S MAIN MARKET LISTING REQUIREMENTS

Details of Directors who are standing for re-election in Agenda 2 of the Notice of the 25th Annual General Meeting of the Company are set out in the Directors’ Profile on pages 6 and 7 of the Annual Report while their securities holdings (where applicable) are set out in the Analysis of Shareholdings –Directors’ Interests in the Company and Related Corporation (page 92 of the Annual Report).

THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

NO. OF SHARES HELD

I/We,

of

being a member/members of POLY GLASS FIBRE (M) BHD. hereby appoint

of

or failing him

of

as my/our proxy to vote for me/us on my/our behalf at the 25th Annual General Meeting of the Company, to be held on 18 August

2015 and any adjournment thereof.

Resolution For Against

1. Re-election of Mr. Fong Wah Kai as Director

2. Re-election of Mr. Sia Taik Hian as Director

3. Approval of Directors’ Fees and Remuneration

4. Re-appointment of Auditors

5. Approval for Directors to issue shares pursuant to Section 132D of the Companies Act 1965

6. Continuing in Office as Independent Non Executive Director for Mr. Sia Taik Hian

7. Continuing in Office as Independent Non Executive Director for En. Omar Bin Mohamed Said

The Proportions of my holdings to be represented by my *proxy/proxies are as follows: -

Please indicate with “√” on the spaces provided on how you wish your votes to be cast. In the absence of specific directions, your proxy will vote or abstain from voting at his discretion.

Signed this …............ day of……………. 2015.

……………………………………….(Signed)

NOTES:1. Amemberentitledtoattendandvoteatthismeetingmayappointmorethanone(1)proxy,whoneednotbeamember,to

attendandvoteinhisstead.Whereamemberappointsmorethanone(1)proxytheappointmentshallbeinvalidunlesshespecifiestheproportionofhisholdingstoberepresentedbyeachproxy.

2. iftheappointerisacorporation,theformofproxymustbeexecutedunderitsCommonSealorunderthehandofitsofficeror attorney duly authorised.

3. Where amember of the Company is an exempt authorized nominee as defined under the Securities industry (CentralDepositories)Act1991whichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“Omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorizednomineemayappointinrespectofeachOmnibusAccountitholds.

4. Tobevalid,thedulycompletedformofproxymustbedepositedattheCompany’sregisteredofficeatSuite12A,level12,MenaraNortham,No.55,JalanSultanAhmadShah,10050Penang,not less than forty-eight (48)hoursbefore the timestipulatedforholdingthemeetingoradjournmentthereof.

5. Forthepurposeofdeterminingamemberwhoshallbeentitledtoattendthis25thAGM,theCompanyshallberequestingBursaMalaysiaDepositorySdnBhd,inaccordancewiththeArticle62(3)oftheCompany’sArticlesofAssociationandSection34(1)oftheSecuritiesindustry(CentralDepositories)Act1991,toissueaGeneralMeetingRecordofDepositorsasat11August2015.OnlyadepositorwhosenameappearsontheRecordofDepositorsasat11August2015shallbeentitledtoattendthesaidmeetingorappointproxiestoattendand/orvoteonhis/herbehalf.

PROXY FORM

(BLOCK LETTERS)

POLY GLASS FIBRE (M) BHD. (42138-X)(Incorporated in Malaysia)

First named Proxy - %Second named Proxy - %

100.00 %

Fold this flag sealing

2nd fold here

Stamp

1st fold here

The Company SecretaryPOLY GLASS FIBRE (M) BHD. (42138-X)

Suite 12-A, Level 12Menara Northam

No. 55, Jalan Sultan Ahmad Shah10050 Penang

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