TABLE OF 7-G & 9-G, Jalan PJU 5/20 Pusat Perdagangan Kota Damansara PJU5 Kota Damansara 47810 Petaling Jaya ... This proposal is pending shareholders’ approval

TABLE OFCONTENTS

2 Corporate Profile

3 PRG Values

4 Corporate Information

5 Group Financial Highlights

6 Chairman’s Statement

8 Group Managing Director’s Review

10 Corporate Structure

11 PRG in the News

12 PRG Events

16 Board of Directors

18 Directors’ Profile

27 Management Team

28 Corporate Responsibility

32 Statement on Corporate Governance

43 Statement on Risk Management and Internal Control

47 Report on Audit Committee

54 Report on Remuneration Committee

58 Report on Nomination Committee

61 Financial Statements

195 List of Group Properties

197 Analysis of Shareholdings

201 Analysis of Warrants Holdings

204 Notice of Fifteenth Annual General Meeting

Proxy Form

CORPORATE PROFILEThe Company was incorporated on 13 March 2001 and listed on 16 October 2003 on Second Board of Bursa Malaysia Securities Berhad. Pursuant to the merger of the Main Board and Second Board into a single board, the Company was listed on Main Market with effect from 3 August 2009.

The Group started operations in 1983 in Malaysia as a partnership producing furniture webbing. The Group has since diversified into niche products for the textile and apparel, furniture, automotive, food packaging and medical industries.

On 30 July 2014, the Group diversified its core business to include property development after completion of a few corporate exercises. In order to strengthen the Company’s brand image and to reflect a more aligned business direction of the Group, the Company’s name was changed to PRG Holdings Berhad on 26 January 2015.

With the diversification of the Group’s principal activities to include property development, PRG had established a construction division to complement its property development activities. The Group has also obtained approval of shareholders to diversify to include construction business on 12 January 2016.

PRG stands forPREMIER GROUPThe name Premier Group denotes the company’s commitment to strive to deliver the best in everything that we do, be it, our products, our concept, our service, our quality and value add to our stakeholders.

To achieve such ideals, we must walk the talk by ensuring that we will always continue to innovate and place the interest of our customer as priority in developing our products. We also need to understand and cater to the needs of the customers, and create developments that are relevant and appropriate with eco-friendliness and sustainability as part of our concept.

This will set a platform for us to ensure we consistently strive for excellence in all our business endeavours, not forgetting our commitments to the society and also placing priority to our staff and creating an environment that is conducive to excel.

PRG HOLDINGS BERHAD Annual Report 20152

VISION• To be a premier company of

choice for our stakeholders both locally and internationally.

MISSION• Customer oriented• Innovative products• Creating values for customer and

stakeholders

PRGVALUES

• Respect We advocate the assimilation of difference

in our cultures in acknowledging differences of opinions, cultures and contributions, treating everyone with respect and create an environment for mutual respect.

• Innovation We promote and recognize creative thinking

as key to creating the best value to our stakeholders.

• Customer We aspire to maximize values and

satisfaction to our customer by creating quality products, excellence service, value added and concept that give our customer a better quality of life.

CORE VALUES• Integrity We act with professionalism in all our

dealings and always deliver on our promise.

• Commitment We are fully committed to what we do,

constantly challenging ourselves to serve better and to excel in every opportunity.

• Competency We drive efficiency by always looking

for the ways to better ourselves and our team performances, effectiveness and productivity.

• Teamwork We value team spirit and place

communication and sharing information as the key to our goals.

PRG HOLDINGS BERHAD Annual Report 2015 3

CORPORATE INFORMATIONBOARD OFDIRECTORSDato’ Lim Heen PeokIndependent Non-Executive Chairman

Dato’ Lua Choon Hann Group Managing Director

Cheah Eng ChuanManaging Director - Manufacturing

Dato’ Wee Cheng KwanExecutive Director - Property & Construction

Lee Sim HakExecutive Director

Ong Lock HooExecutive Director

Datuk Dr Wong Lai SumIndependent Non-Executive Director

Dato’ Hamzah bin Mohd SallehIndependent Non-Executive Director

Lim Chee HoongIndependent Non-Executive Director

PRINCIPALBANKERSAlliance Islamic Bank Berhad (776882-V)7-G & 9-G, Jalan PJU 5/20Pusat Perdagangan Kota DamansaraPJU5 Kota Damansara47810 Petaling Jaya Selangor Darul Ehsan

Hong Leong Bank Berhad (97141-X)Level 1, Wisma Hong Leong18, Jalan Perak, 50450 Kuala Lumpur

Malayan Banking Berhad (3813-K)B01 & B02, Sunway Giza MallNo. 2, Jalan PJU 5/14 Kota Damansara47810 Petaling Jaya Selangor Darul Ehsan

Malayan Banking Berhad9th Floor, Unit 906 115 Nguyen HueDistrict 1, Ho Chi Minh City, Vietnam

Malayan Banking BerhadSuite 909, 9th Floor, Conerstone Building16 Phan Chu Trinh StreetHoan Kien District Hanoi, Vietnam

Public Bank Berhad (6463-H)F-07, F-08 & F-09, Jalan SS 6/5BDataran Glomac Pusat Bandar Kelana Jaya47301 Petaling Jaya Selangor Darul Ehsan

United Overseas Bank (Malaysia) Berhad (271809-K)Menara UOB, Jalan Raja Laut50350 Kuala Lumpur

VID Public BankNo. 88 Nguyen Du, Ben Nghe WardDistrict 1, Ho Chi Minh City, Vietnam

COMPANYSECRETARIESYeoh Chong Keat (MIA 2736)Lim Fei Chia (MAICSA 7036158)

PRINCIPALPLACE OFBUSINESS Property & Construction Division:Lot C601, Capital 3, Oasis SquareNo. 2, Jalan PJU 1A/7A Ara Damansara47301 Petaling JayaSelangor Darul EhsanTel: (603) 7859 0877Fax : (603) 7859 0977

Manufacturing Division:Lot 1883, Jalan KPB 9Kg. Bharu Balakong43300 Seri KembanganSelangor Darul EhsanTel: (603) 8961 2278 Fax : (603) 8961 2340

REGISTEREDOFFICESuite 11.1ALevel 11, Menara Weld 76, Jalan Raja Chulan 50200 Kuala LumpurTel: (603) 2031 1988Fax: (603) 2031 9788

SHARE REGISTRARBina Management (M) Sdn Bhd(50164-V)Lot 10, The Highway CentreJalan 51/20546050 Petaling JayaSelangor Darul EhsanTel: (603) 7784 3922Fax: (603) 7784 1988

MAILING ADDRESSG.P.O. Box 1127950740 Kuala Lumpur

E-mail: [email protected]: www.prg.com.my

STOCKEXCHANGE LISTINGMain Market of Bursa Malaysia Securities BerhadStock Code : 7168Stock Name : PRG

AUDITORSBDO (Firm No. AF 0206)Menara CenTARaLevel 8360 Jalan Tunku Abdul Rahman50100 Kuala Lumpur


Financial Year Ended 31 December 2011 2012 2013 2014 2015

Operating ResultsRevenue RM’000 80,697 84,487 78,817 92,286 129,323Profit before taxation RM’000 5,624 5,308 5,892 2,389 7,241Profit attributable to shareholders RM’000 4,712 4,087 4,746 2,374 6,075

Financial PositionTotal Assets RM’000 98,916 94,404 97,070 237,626 268,119Total Borrowings RM’000 14,904 9,994 9,259 65,792 79,555Shareholders’ Equity RM’000 72,734 73,679 77,179 108,298 116,837

Financial RatiosReturn On Equity % 6.48 5.55 6.15 2.19 5.20Return On Revenue % 5.84 4.84 6.02 2.57 4.70Return On Capital Employed % 10.43 11.23 10.78 3.69 6.77

SHARE INFORMATIONGross Dividends Per Share sen 2.50 3.00 1.50 1.00 1.00*

Basic Earnings Per Share sen 5.21 4.51 4.89 1.98 4.19Net Assets Per Share sen 80.34 81.38 85.25 74.76 80.66

* Subject to shareholders’ approval at the forthcoming annual general meeting.

2015GROSS DIVIDEND PER SHARE (SEN)

2011 2012 2013 20140.0

0.75

1.5

2.25

3.2

3.75

2015NET ASSETS PER SHARE (SEN)

2011 2012 2013 20140

20

40

60

80

100

PROFIT BEFORE TAXATION (RM MILLION) 2011 2012 2013 2014 20150

2

4

6

8

10

REVENUE (RM MILLION) 2011 2012 2013 2014 20150

20

40

60

80

100

120

140

GROUP FINANCIALHIGHLIGHTS


DEARSHAREHOLDERS,On behalf of the Board of Directors, I am pleased to present to you the Annual Report and Audited Financial Statements of PRG Holdings Berhad (“PRG”) for the financial year ended 31 December 2015.

CHAIRMAN’SSTATEMENT

BUSINESS ENVIRONMENT

The Trans-Pacific Partnership agreement was officially signed by twelve member countries in February 2016, creating a massive trade bloc that will account for about 40% of the world’s economy. The TPP will advocate the gradual elimination of import taxes on textiles and apparel products within member countries and this will greatly benefit the Group. We foresee our textile and furniture related investments in Vietnam and Malaysia will be the beneficiaries of the TPP agreement and thus presenting to us an opportunity to expand our current business and to acquire new customers in all TPP member countries. The Group will continue to leverage its competitive edge in cost, quality and delivery capability to build the Group’s brand within this bigger TPP market.


On the local front, the Malaysian economy is expected to continue with a positive growth of 4.0% - 4.5% in 2016. The property market is expected to be soft in 2016, impacted by the goods and service tax, property cooling measures and financial institutions stringent measures on lending.

Whilst these factors may dampen current market sentiments, the mid to long term prospects for property development remains good. Malaysians are now trending towards properties equipped with good facilities and in locations surrounded by amenities that will provide a modern urban lifestyle. Our maiden project, Picasso Residence, is in this segment of market and we foresee a good uptake on this property. At the same time under the present scenario we are adopting a step by step approach in this sector, seeking opportunities and managing risks on a prudent and practical basis without overly stressing our resources.

FINANCIAL PERFORMANCE

The Group recorded a higher revenue of RM129.3 million which was 40% higher than the previous financial year of RM92.3 million, largely due to higher sales of manufacturing and progressive revenue from our construction activities and also profit recognition derived from the Picasso Residence property development.

Profit before taxation for the current financial year of RM7.2 million was RM4.8 million higher than RM2.4 million reported for the financial year of 2014, in tandem with the increase in revenue.

CORPORATE DEVELOPMENTS

The Group has successfully diversified its business to include property development in 2014 and has now also incorporated the construction business with the approval from shareholders in 2016. This synergetic move into construction will reinforce the Group’s property development business and enables the Group to leverage its knowhow and resources to extract maximum value from these complementary activities.

PROSPECTS

Looking ahead, we are positive that the strategy we have put in place over the years will position the Group’s manufacturing division to face the changes that are taking place rapidly in the world economy. Our early decision to locate our manufacturing base in Vietnam has been far sighted and beneficial especially with the implementation of the TPP agreement.

On our diversification into property and construction business, the Board believes that its maiden project will be well received based on its design concept and prime location. As mentioned we are viewing potential new developments on a prudent basis focusing on opportunities that can deliver reasonable returns with minimum risks.

DIVIDENDS

The Group’s dividend policy is to provide shareholders with reasonable returns from the profits of the Group and over the years we have strived to maintain a consistent dividend payout.

In consideration of the Group’s results and our future investment requirements, the Board of Directors has recommended a final single tier dividend of 2% or 1.0 sen per share for the financial year ended 31 December 2015. This proposal is pending shareholders’ approval at the forthcoming Annual General Meeting of the Company.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to express my appreciation to my fellow Board members both present and past, for their unwavering support, advice and assistance to enable me to discharge my responsibilities as Chairman to oversee the well being of the Group.

My appreciation is extended to the management and all members of the Group for their dedication, hard work and contribution to the Group throughout these challenging times.

Last but not least, on behalf of the Board and Management, I would also like to express our heartfelt thanks to our valued customers, shareholders, business associates, and partners for their support and confidence in the Group. We look forward to your continued support in 2016 as we strive to build a stronger diversified Group for the future.

Dato’ Lim Heen PeokChairman


REVIEW OF OPERATIONS

Manufacturing

Volatility in currency especially the strengthening of USD and weakness of other currencies including Euro and RM were very disruptive for the year under review as it affects competition and demand dynamics in the markets that we export.

Manufacturing division remains the core contributor with a total revenue of RM 89.0 million for the group in the year of 2015, an increase of 5.1% despite intense competitions by companies from China & India to maintain market shares in view of the slower global growth. Profit before tax has also increased by 9.3% to RM 7.3 million from RM 6.7 million.

During the year, efforts were also made to optimise cost structure by process improvements and capacity utilisation to mitigate cost increases. This is to cater for volume based business which we have managed to secure additional global accounts.

Property Development

Picasso ResidenceOur maiden project, Picasso Residence is located at the heart of the Golden Triangle, Kuala Lumpur. We have put in great effort during the design stage, to provide a contemporary architectural façade that offers a spectacular view of the Petronas Twin Towers, KL Tower and beautiful skylines of Kuala Lumpur. These artistically and stunning twin towers of 38-storey comes with comprehensive facilities and amenities befitting an elegant lifestyle such as glass encased gymnasium overlooking pool, sunken lounge, sky park, sky pavilion and private lift lobby to each unit. Picasso Residence is expected to be completed by 2019.

In relation to the sales of Picasso Residence, our Group has entered into a promoter and underwriter agreement with Dato’ Ng Yan Cheng (“DNYC”) for the engagement of DNYC as the promoter and underwriter of 210 units of Picasso Residence.

Construction

The Treetop Residency project secured in 2014 with a contract value of RM 50.15 million proceeded smoothly and is ahead of schedule. This project in Pasir Putih, Ipoh comprises of 5 blocks of 9-storey apartment, 1-storey gymnasium with swimming pool and 1-storey common facilities.

In October, our construction division, Premier Construction Sdn Bhd (PCSB), was one of the seven company shortlisted by Master Builder Association Malaysia (MBAM) and Polytechnic Ungku Omar to provide training to final year post graduates. This augurs well and reflected the confidence that MBAM has on PCSB’s capability and reputation in the construction industry.

I am also very happy to announced that in January 2016, PCSB was one of the first construction company in Malaysia to obtained the ISO 9001-2015 certification. This certification will improve the integration and alignment of our internal processes that will result in shorter turnaround time. I believe this will increase credibility and competitiveness in the market and enhance our revenue and market share in the future.

LOOKING FORWARD

The Group has managed to remain resilient in the face of continue volatility in the global markets. Challenges in the near terms are mainly coming from cost pressure such as increase in wages and currencies volatility.

In the medium to long term, we remain positive that the implementation of the Trans-Pacific Partnership (“TPP”) agreement with member countries will spur more investment in the textile and furniture industries into the TPP member countries, especially Vietnam and Malaysia where our manufacturing facilities are currently located. We have seen an increase in sales over the past one year especially from the fabric segment as a result of higher sourcing activities from foreign buyers.

As Vietnam is fast becoming a global manufacturing base, we will continue to increase capacity further in the future to position ourselves for further growth opportunities.

Barring any unforeseen circumstances, the Group’s manufacturing performance is expected to remain satisfactory for 2016.

On the property development segment, the Picasso Residence has started its construction work in 2015 and is expected to be completed by 2019. The piling work was completed in March 2016 while the podium and car park are expected to be completed by December 2016. We expect to see a higher revenue recognition from the property development sector this year.

We are constanly evaluating new oppurtunities and bidding for new contracts that can deliver reasonable returns with minimum risk.

Dato’ Lua Choon HannGroup Managing Director


Group MANAGINGDIRECTOR ’SREVIEW

DEARSHAREHOLDERS,It has been an extremely busy year for the Group where many milestones were achieved. I am pleased to report that despite the competition and on the backdrop of volatility in the global markets and currencies, the Group managed to achieve a total revenue of RM129.3 million, which represent an increase of 40% from the previous year. The growth was from both the steady income from manufacturing division and also progressive contribution of RM40.3 million revenue from its Property Development & Construction division.


MALAYSIA FOREIGN

PROPERTY & CONSTRUCTIONDIVISION

MANUFACTURINGDIVISION

100%FURNIWEB MANUFACTURING SDN BHD (164933-H)

100%FURNIWEB SAFETY WEBBING SDN BHD(391112-U)

100%TEXSTRIP MANUFACTURING SDN BHD (171110-T)

100%WEBTEX TRADING SDN BHD (131288-K)

100%SYARIKAT SRI KEPONG SDN BHD(21161-X)

100%FIRST ELASTIC CORPORATION (M) SDN BHD (328928-W)

100%FURNIWEB (VIETNAM) SHAREHOLDING COMPANY

100%PREMIER ELASTIC WEBBING & ACCESSORIES (VIETNAM) CO LTD

82%FURNITECH COMPONENTS (VIETNAM) CO LTD

50%TRUNET (VIETNAM) CO LTD

100%PREMIER GESTURE SDN BHD (561566-V)

60%PREMIER DE MUARA SDN BHD (1068541-X)

100%PREMIER CONSTRUCTION SDN BHD (1061330-H)

100%PREMIER PMC SDN BHD (1091731-D)

CORPORATE STRUCTURE


PRGIN THE NEWS


PRGEVENTS

Private preview function of our Picasso Residence Project in Kuala Lumpur.

Privite preview function of our Picasso Residence project in Singapore.


Signing ceremony for our collboration with Politeknik Ungku Omar and Master Builders Association Malaysia.


PRGEVENTS cont’d

A member of the economic transformation program for the state of Terengganu in collaboration with PEMANDU.

14th Annual General Meeting of our Company.


Our Subsidiary Furnitech Components (Vietnam) Co Ltd participated in the Vietnam International Furniture & Home Accessories Fair (VIFA 2016).

Our Subsidiary Premier Elastic Webbing & Accessories (Vietnam) Co Ltd participated in the Vietnam Saigon Textile & Garment Industry Expo.


BOARD OF DIRECTORS

Cheah Eng ChuanManaging Director - Manufacturing

Dato’ Lua Choon HannGroup Managing Director

Ong Lock HooExecutive Director

Lee Sim HakExecutive Director

BOARD OF DIRECTORS

Dato’ Lim Heen PeokIndependent Non-

Executive Chairman

Dato’ Hamzah Bin Mohd Salleh

Independent Non-Executive Director

Lim Chee HoongIndependent Non-Executive Director

Datuk Dr Wong Lai SumIndependent Non-Executive Director

Dato’ Wee Cheng KwanExecutive Director -Property & Construction

Documents

TABLE OF 7-G & 9-G, Jalan PJU 5/20 Pusat Perdagangan Kota Damansara PJU5 Kota Damansara 47810 Petaling Jaya ... This proposal is pending shareholders’ approval