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IKK Inch Kenneth

10.50
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Inch Kenneth LSE:IKK London Ordinary Share GB0004601091 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 10.50 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Inch Kenneth Kajang Rubber Annual Financial Report (7889D)

02/05/2017 7:00am

UK Regulatory


Inch Kenneth Kajang Rubber (LSE:IKK)
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TIDMIKK

RNS Number : 7889D

Inch Kenneth Kajang Rubber

29 April 2017

INCH KENNETH KAJANG RUBBER PUBLIC LIMITED COMPANY

GROUP ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

CONTENTS

 
    Corporate Information                  1 
 
    Board of Directors' Profiles           3 
 
    Chairman's Statement                   5 
 
    Strategic Report                       7 
 
    Corporate Social Responsibilities      10 
 
    Corporate Sustainability Statement     11 
 
    Corporate Governance                   12 
 
    Audit Committee Report                 20 
 
    Statement on Internal Control          23 
 
    Group Financial Highlights             25 
 
    Directors' Report                      26 
 
    Statement of Responsibilities 
     of Those Charged With Governance      30 
 
    Statutory Declaration                  31 
 
    Independent Auditors' Report           32 
 
    Group and Company Statement 
     of Profit or Loss                     34 
 
    Group and Company Statement 
     of Profit or Loss and Other 
     Comprehensive Income                  35 
 
    Group and Company Statement 
     of Financial Position                 36 
 
    Group Statement of Changes 
     in Equity                             38 
 
    Company Statement of Changes 
     in Equity                             40 
 
    Group and Company Statement 
     of Cash Flows                         41 
 
    Notes to the Financial Statements      42 
 
    Analysis of Shareholdings 
 
    List of Properties Registered 
     Under the Group of Companies          74 
 
    Notice of Annual General Meeting       76 
 
    Form of Proxy 
 
 

Corporate Information

 
       BOARD OF DIRECTORS 
   Dato' Adnan bin Maaruf     Independent Non-Executive 
                               Director/Chairman 
         Datuk Kamaruddin     Independent Non-Executive 
                bin Awang      Director 
      Dato' Haji Muda bin     Independent Non-Executive 
                  Mohamed      Director 
   Dato' Tik bin Mustaffa     Independent Non-Executive 
                               Director 
       Dr. Radzuan bin A.     Independent Non-Executive 
                   Rahman      Director 
 
          AUDIT COMMITTEE 
         Datuk Kamaruddin     Chairman 
                bin Awang 
      Dato' Haji Muda bin     Member 
                  Mohamed 
   Dato' Tik bin Mustaffa     Member 
 
       SENIOR INDEPENT 
   NON-EXECUTIVE DIRECTOR 
   Dato' Tik bin Mustaffa     Independent Non-Executive 
                               Director 
 
        UK COMPANY NUMBER     SC007574 
 
          MALAYSIA COMPANY 
                    NUMBER    990261M 
         COMPANY SECRETARY    Lee Thai Thye (LS 0000737) 
 
         REGISTERED OFFICE    No. 2 Lochrin Square, 
                        IN     96 Fountainbridge 
            UNITED KINGDOM    Edinburgh EH3 9QA, Midlothian, 
                               United Kingdom 
                              Tel: 44 0131 226 5541 
                               Fax: 44 0131 226 2278 
 
          PRINCIPAL OFFICE    22nd Floor Menara Promet 
               IN MALAYSIA     (KH) 
                               Jalan Sultan Ismail 
                               50250 Kuala Lumpur, Malaysia 
                              Tel: 603-2144 4446 Fax: 
                               603-2141 8463 
 
       PRINCIPAL REGISTRAR    Computershare Investor 
                        IN     Services plc 
            UNITED KINGDOM    PO Box 82, The Pavillions, 
                               Bridgwater Road 
                              Bristol BS99 7NH, United 
                               Kingdom 
                              Tel: 44 0870 702 0003 
                               Fax: 44 0870 703 6101 
 
     REGISTRAR IN MALAYSIA    Mestika Projek (M) Sdn 
                               Bhd (225545V) 
                              22(nd) Floor Menara Promet 
                               (KH) 
                               Jalan Sultan Ismail 
                              50250 Kuala Lumpur, Malaysia 
                              Tel: 603-2144 4446 Fax: 
                               603-2141 9650 
 
                  AUDITORS    UHY Hacker Young LLP 
                              Quadrant House 
                               4 Thomas More Square 
                              London E1W 1YW, United 
                               Kingdom 
 
           BUSINESS OFFICE    26th Floor Menara Promet 
                               (KH) 
                              Jalan Sultan Ismail 
                               50250 Kuala Lumpur, Malaysia 
                               Tel: 603-2144 4446 Fax: 
                               603-21418463 
 
                   WEBSITE    www.ikkr.com.my 
 
 
 
 
        PRINCIPAL BANKERS      Bank Islam Malaysia Berhad 
                                AmFunds Management Berhad 
                               Agrobank Berhad 
                                CIMB Bank Berhad 
                                Affin Hwang Asset Management 
                                Berhad 
 
  STOCK EXCHANGE LISTINGS      Bursa Malaysia Securities 
                                Berhad - Main Board 
                               London Stock Exchange 
                                plc 
                               Singapore Exchange Securities 
                                Trading Limited 
 

Board of Directors' Profiles

DATO' ADNAN BIN MAARUF

Independent Non-Executive Director

Chairman

Malaysian, aged 73

Dato' Adnan bin Maaruf was appointed to the Board on 22 April 2000.

He graduated from University of Malaya with a Bachelor of Arts (Honours) Degree and a Masters in Management from AIM Philippines. He started his career in the Government sector and after eighteen (18) years, became the Deputy Secretary General in the Ministry of National and Rural Development. He then became the Managing Director of Mara Holdings Sdn Bhd for five (5) years and subsequently, the Chairman of Malaysia Cooperative Insurance Society for ten (10) years.

He does not have any family relationship with any Director and/or major shareholder of the Company and there is no business arrangement with the Company in which he has a personal interest. He attended all the Board Meetings held in the financial year ended 31 December 2016.

He has had no convictions for any offences within the past five (5) years.

DATUK KAMARUDDIN BIN AWANG

Independent Non-Executive Director

Chairman of the Audit Committee

Malaysian, aged 68

Datuk Kamaruddin bin Awang was appointed to the Board on 17 July 2009. He is the Chairman of the Audit Committee.

He obtained his Bachelor of Commerce and Administration from Victoria University of Wellington, New Zealand, in 1973. He is a member of the Institute of the Chartered Accountants of New Zealand and Institute of Chartered Secretaries & Administrators, United Kingdom, since 1977. He was the Executive Chairman of Metacorp Berhad and had previously held directorships in a number of listed companies.

He does not have any family relationship with any Director and/or major shareholder of the Company and there is no business arrangement with the Company in which he has a personal interest. He attended four (4) of the Board Meetings held in the financial year ended 31 December 2016.

He has had no convictions for any offences within the past five (5) years.

DATO' HAJI MUDA BIN MOHAMED

Independent Non-Executive Director

Member of the Audit Committee

Malaysian, aged 72

Dato' Haji Muda bin Mohamed was appointed to the Board on 15 February 2000. He is also a member of the Audit Committee.

He graduated with a Diploma in Civil Engineering and subsequently a Bachelor of Science, Civil Engineering Degree from University of Westminster, United Kingdom. A Fellow in the Institution of Engineers Malaysia, he started his career as an engineer in two Government agencies and an international oil company. After thirteen (13) years, he joined Sime UEP Properties Bhd and left ten (10) years later after becoming its Operation Director. He then went on to TTDI Development Sdn Bhd, and left seven (7) years later after serving as its Group Chief Executive Officer. He is now an Executive Chairman of a company dealing in civil engineering contracting jobs. He does not sit on the board of any other listed company.

He does not have any family relationship with any Director and/or major shareholder of the Company and there is no business arrangement with the Company in which he has a personal interest. He attended all the Board Meetings held in the financial year ended 31 December 2016.

He has had no convictions for any offences within the past five (5) years.

DATO' TIK BIN MUSTAFFA

Independent Non-Executive Director

Member of the Audit Committee

Malaysian, aged 71

Dato' Tik bin Mustaffa was appointed to the Board on 6 July 2012. He is also a member of the Audit Committee.

He holds a Bachelor's Degree in Economics from University of Malaya and a Master's Degree in Business Administration from University of Oregon, United States of America.

He started his career in the Malaysian Government Service where he served the Public Service Department, University Teknologi Malaysia, Ministry of Finance and Kuantan Port Authority. He also served the State Administrations of Pahang and Selangor as the State Finance Officer and State Secretary respectively.

In 1996, he joined Hicom Holdings Bhd as its Senior Vice President and was later appointed as its Senior Group Director for Operations in the merged entity of DRB-Hicom Bhd. He left in 2005, and in 2010, he became the Chairman for Eastern Pacific Industrial Corporation Berhad for a year. He is currently the Chairman/Director of Trumer International Sdn Bhd.

He does not have any family relationship with any of the Company's Directors and/or major shareholders and has no conflict of interest with the Company. He attended all the Board Meetings held in the financial year ended 31 December 2016.

He has had no convictions for any offences within the past five (5) years.

DR. RADZUAN BIN A. RAHMAN

Independent Non-Executive Director

Malaysian, aged 73

Dr. Radzuan bin A. Rahman was appointed to the Board on 24 March 2005.

He graduated with a Bachelor's Degree in Agricultural Science from University of Malaya, and later pursued his Masters in Science and Doctorate in Resource Economics at Cornell University, New York. He was a lecturer and Dean at the faculty of Resource Economics and Agribusiness, Universiti Pertanian Malaysia (now known as Universiti Putra Malaysia), until March 1980. He then went to Sime Darby Plantations Berhad and in 1984, joined Golden Hope Plantations Berhad as a Director of Corporate Planning and worked his way up to be Group Director of the plantation division. He was later appointed as the Managing Director of Island & Peninsular Berhad and Austral Enterprises Berhad and retired in 2004. He was a Director of Fraser & Neave Holdings Berhad and Kuwait Finance House (Malaysia) Berhad. He currently sits on the boards of Idaman Unggul Berhad, Kulim (Malaysia) Berhad and several private companies.

He does not have any family relationship with any Director and/or major shareholder of the Company and there is no business arrangement with the Company in which he has a personal interest. He attended all the Board Meetings held in the financial year ended 31 December 2016.

He has had no convictions for any offences within the past five (5) years.

Chairman's Statement

On behalf of the Board of Inch Kenneth Kajang Rubber Public Limited Company, I present herewith the One Hundred and Seventh Annual Report and Financial Statements of the Company and the Group for the financial year ended 31 December 2016.

DIVIDS

The Board has proposed an interim dividend payout of 2% (0.2 pence) as part of our commitment to deliver shareholders value, with the total dividends under the single tier system.

PERFORMANCE REVIEW

During the financial year under review, the Group recorded a revenue of RM10.834 million and a loss after tax of RM3.741 million compared to a revenue of RM10.289 million and a post-tax loss of RM1.941 million for the previous year. The increase in Group's turnover by RM0.545 million is mainly due to the higher bookings received from the travel agents and online travel agents by the tourism division during the financial year under review.

The plantation division recorded a lower revenue at RM0.266 million (2015: RM0.376 million) due to the decline in production of fresh fruit bunches ("FFB") by 44% to 481 tonnes (2015: 868 tonnes). Revenue from the Group's tourism division also increased by 24.5% to RM8.395 million from RM6.744 million in 2015 due to higher bookings received.

Included in the above results for the financial year under review was a share of loss after taxation of RM0.17 million versus share of profit after taxation of RM4.598 million in 2015 from the Group's associate - Concrete Engineering Products Berhad ("Cepco"), a manufacturer and distributor of prestressed spun concrete piles and poles. The decreased sales volume is attributable to the slower offtake in the overseas projects.

Overall, the total performance of the Group was mainly affected by the lower profit from Cepco.

CORPORATE DEVELOPMENT

The shareholders of the Company had approved an ordinary resolution at the One Hundred and Sixth AGM held on 24 May 2016 for the Company to purchase its own shares up to a maximum of 10% of the issued and paid-up capital of the Company. The Directors of the Company are committed to enhancing the value of the Company and believe that the purchase plan is being implemented in the best interest of the Company and its shareholders.

As at 31 December 2016, the Company has 17,540,800 ordinary shares held as treasury shares and the issued and paid-up share capital of the Company remained at 420,750,000 ordinary shares of GBP0.10 each.

FUTURE OUTLOOK

The Master Plan to develop the land bank in Kajang, totalling approximately 140 hectares is completed and has been submitted to Jabatan Alam Sekitar ("JAS"), Lembaga Lebuhraya Malaysia ("LLM") and Jabatan Kerja Raya ("JKR") for their approval.

We are certain that this township will impact positively to the socio-economic condition of the South Greater Klang Valley region.

On the tourism division, as was expected, revenue increased in 2016. Based on the marketing efforts put in place, we anticipate that 2017 will see even more tourists coming to the resort.

APPRECIATION

On behalf of the Board, I wish to express my appreciation to all our customers, shareholders, business partners, bankers and government authorities for their continued support and encouragement during the year.

Special thanks also go to the management and staff. Your invaluable efforts and firm dedication to the Group are truly appreciated. We are confident that success is in the pipeline.

I would also like to take this opportunity to offer my personal gratitude to my fellow Board members for their commitment and guidance.

DATO' ADNAN BIN MAARUF

Chairman

28 April 2017

Strategic Report

REVIEW AND PERFORMANCE OF THE BUSINESS

The Group's principle activities remain unchanged throughout the year 2016. The plantations in Kajang and Bangi are still providing revenue through the sale of the FFB they produce, albeit at a lower volume.

ESTATES

The total area of the Group's estates as at 31 December 2016 is as follows:

 
                                                         Hectares 
                                                 2016         2015 
 
  Oil Palm (Mature)                               177          177 
  Roads, buildings, gardens, nurseries 
   and wasteland                                   12           12 
                                         ------------  ----------- 
 
  Total                                           189          189 
                                         ============  =========== 
 

The yields from the plantation activity for the year ended 31 December 2016 are as follows:

 
   Harvested crops       Fresh fruit 
                             bunches 
-------------------    ------------- 
 
  2016 (tonnes)                  481 
  2015 (tonnes)                  868 
 

TOURISM

In Terengganu, the hotels within the Group recorded higher revenue due to more bookings received during the year, as reflected by the marketing efforts done during the year.

MANUFACTURING

During the year, the sales from our rubber manufacturing subsidiary in Thailand were much lower at RM2.049 million (2015: RM3.016 million). This was mainly due to the drop in production as the rainy season was longer as compared to previous years.

OVERALL

Overall, the Group's revenue was RM10.834 million for the year ended 31 December 2016 as compared to RM10.289 million in the preceding year, increase of 5.3%, mainly due to the higher bookings received by the tourism division during the financial year under review.

The Group's results after tax increased from a loss of RM1.941 million to a loss of RM3.741 million, or a loss per share of RM0.0093 (2015: loss per share of RM0.0048). The higher loss was due principally to the lower share of loss of our associate, Cepco, of RM0.17 million.

With this result, the Group's Net Tangible Assets is now RM636.441 million (2015: RM638.309 million) or RM1.58 (2015: RM1.58) per share, which is calculated after deducting the shares that were bought back. During the financial year ended 31 December 2016, there was no share buyback and no resale or cancellation of treasury shares. A total of 17,540,800 shares were bought back and retained as treasury shares as at 31 December 2016.

Despite the business activities of the Group remaining at approximately the same level as last year, the cash position available for use at the end of the 2016 financial year was RM27.130 million (2015: RM26.755 million) and short term investments of RM93.875 million (2015: RM110.422 million). The movement is mainly due to the payments made to finalise a land transaction, assets under construction and the dividend paid in May 2016.

At 31 December 2016, the Group had total assets of RM725.474 million compared to RM719.934 million in 2015. The Group's total liabilities stood higher at RM89.033 million compared to RM81.625 million at the prior year end. The resulting net assets were RM636.441 million at 31 December 2016 (2015: RM638.309 million). The current ratio is now at 17.30 (2015: 41.66).

RESULTS AND DIVIDS

The Group's results for the year are set out on page 34. The Group's loss attributable to shareholders of the Company for the financial year ended 31 December 2016 amounted to RM3.741 million (2015: loss of RM1.941 million).

On 28 April 2016, the Directors approved and declared a 2% interim dividend for the financial year ended 31 December 2015. The total amount of RM4.685 million was paid on 30 May 2016. The interim dividend was under the single tier system of RM0.0116 per share, on 403,209,200 ordinary shares. A dividend of 2% is proposed for the financial year ended 31 December 2016.

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

FUTURE DEVELOPMENTS AND PROJECTS

The Master Plan to develop the land bank in Kajang, totalling approximately 140 hectares is completed and has been submitted to Jabatan Alam Sekitar ("JAS"), Lembaga Lebuhraya Malaysia ("LLM") and Jabatan Kerja Raya ("JKR") for their approval. We are certain that this township will impact positively to the socio-economic condition of the South Greater Klang Valley region.

On the tourism division, as was expected, revenue increased in 2016. Based on the marketing efforts put in place, we anticipate that 2017 will see even more tourists coming to the resort.

The statements above comply with Principle 1.4 of the Malaysian Code on Corporate Governance 2012.

No other events have occurred since the reporting date which significantly affects the Company or the Group.

PRINCIPAL RISKS AND UNCERTAINTIES FACING THE BUSINESSES

The principal risks and uncertainties facing the Group are:

   i)            Exposure to the risks inherent to the oil palm and rubber industries 

The Group is susceptible to certain business risks inherent to the oil palm and rubber industries as well as general business risks, which include but are not limited to:

   (i)              constraints and rising costs of labour supply and raw materials; 
   (ii)             poor weather; 
   (iii)            price fluctuations of commodity; 
   (iv)            threat of substitute products; and 
   (v)             change in regulatory, economic and business conditions. 
   ii)           Exposure to the risks inherent in the property development industry 

The Group is considering entering into property development. It will be exposed to the cyclical performance caused by the changes in the domestic and global economic conditions, which give rise to intense competition among the local players and new entrants in the property market. In addition, its profitability may also be affected by the changes in the economic and political environment such as changes in taxation, inflation, foreign exchange rates, government policies, population growth and accounting policies.

   iii)          Exposure to the risks inherent to the tourism industry 

The Group is subject to risks inherent to the hotel and tourism sector. These may include general global and regional economic downturns, uncertainties from terrorism activities and war, socio-political instability, a decrease in demand or an oversupply of hotel and resort rooms, an increase in the operating costs due to inflation and other factors such as energy and labour costs, labour supply shortages, changes in credit conditions, changes in customers' preferences and the collectability of debts.

INFORMATION TO SHAREHOLDERS

The Group has its own website (http://www.ikkr.com.my) for the purposes of improving information flow to shareholders and potential investors.

On behalf of the Board

DATO ADNAN BIN MAARUF

Director

DATUK KAMARUDDIN BIN AWANG

Director

Kuala Lumpur, Malaysia

28 April 2017

Corporate Social Responsibilities

The Group recognises that its performances are also measured by being a good corporate citizen and making more contribution to people and environment. We would therefore integrate our business activities so that our actions would benefit our employees as well as the surrounding society.

At Perhentian Island Resort ("PIR"), we place high importance in maintaining the natural environment in order to preserve the natural beauty of the corals existing just off our beach while protecting other marine life as well. Efforts have been made to ensure that the rainforest, being the ideal backdrop for our resort, is retained at its best. Development that may compromise the surrounding nature would not be undertaken. The cleanliness of the pristine water and white sandy beaches has always been of serious concern. Employees, customers and hotel guests are encouraged to share the same vision in protecting and sustaining good environmental care aspects. We also support the various events held at Pulau Perhentian Kecil where tourism activities are being carried out and the local community is taken care off.

At Motel Desa, the team spirit has always been instilled among the employees. We maintain the natural environment through various programs of recycling and gardening. We always strive to provide meaningful contributions towards the society, such as holding the buka puasa event for the needy every year. We also employ handicapped employees who have been specially trained to conduct their duties at the hotel.

At Supara Company Limited ("Supara"), we have been consistently participating in the To Be Number One antidrug campaign since 2003. It is a program that aims to prevent drug trafficking from spreading at workplaces in the country. We take serious concern in having a drug-free working environment by conducting urine test in every three (3) months and holding biannual medical check-up by Ministry of Health for all workers. We prohibit smoking at the factory premises and discourage workers from doing so at other time.

Other initiatives include planting trees and vegetables in the factory compound and participating in other government's moves to improve the environment. We take steps to reduce wastage and pollution during production by switching from diesoline to gas for drying of rubber. We ensure that no contamination occurs from our production by discharging it into our ponds before the water is released to the main drainage system.

At the Group level, employees are viewed as the key assets for its growth and also the main drivers of strength to each respective company. In this regard, employees are provided with a safe and conducive environment for both work and social advantages. Accommodations and other necessary facilities are provided to staff and workers at the rubber factory, plantation estates as well as the resort and hotel. They are also given adequate medical and health insurance benefits in the event of any untoward incident occurring.

The Group also makes an effort to create a workplace that is free from any form of discrimination and harassment where all employees have equal opportunities to realise their full potential. More interactions among the employees are encouraged by having sports events and annual dinners during the year.

Corporate Sustainability Statement

Environmental sustainability is an ethical responsibility and a moral issue. The Group is committed in exercising its best efforts to conserve the environment through the following programs:

-- Reduces greenhouse gas emissions by increasing energy efficiency and lowering its consumption. We actively try to find ways to reduce our carbon footprint while expanding our energy supply to meet the needs of our businesses. We invest in renewable energy by changing from diesel to gas at Supara and using solar heaters at PIR.

-- Maintains water resource effectively by encouraging all of our business units to ensure sustainable consumption of water in their operations. We also make an effort to develop efficient ways to recycle water from our usage, and to explore alternative ways to generate clean water from the surrounding sources. At PIR, we use underground water supply to nurture plants and clean the surroundings.

-- Encourages paperless operations within the Group. All staffs are advised to use electronic mails and keeping documents in softcopies.

-- Uses more energy saving LED lights.

-- Develops our resort based on the original environment and enhances the landscape by planting lush tropical vegetation where appropriate.

-- Takes part in cleaning activities at the base of the ocean together with other environmental organisations to preserve the natural habitat of the marine park.

-- Ensures that all water discharged from the business activities are properly filtered before it goes to the main drainage system.

Corporate Governance

THE MALAYSIAN CODE ON CORPORATE GOVERNANCE

It is the policy of the Company to manage the affairs of the Group in accordance with the appropriate standards for good corporate governance. Set out below is a statement on how the Company has applied the principles and complied with the recommendations as set out in the Malaysian Code on Corporate Governance 2012 ("MCCG 2012") except where stated otherwise.

THE UNITED KINGDOM CORPORATE GOVERNANCE REQUIREMENTS

The Financial Conduct Authority in the United Kingdom ("the FCA") requires the Company to comply with the FCA's Listing Rules 14.3.24 and 18.4.3(2) and Disclosure and Transparency Rule 7.2. The Annual Report contains below and in the Statement of Internal Control the information required by these rules.

BOARD OF DIRECTORS

Board Charter

The Board Charter was established in year 2002 to set out strategic intent and outline the Board's structure and procedures, code of conduct, roles and responsibilities and relationship of the Board to the management in accordance with Principle 1.3 and 1.7 of the MCCG 2012. The following paragraphs detail out the charter. The Board recognises the importance of the Board Charter and will adhere to it and will take steps to enhance the Board Charter from time to time.

Board Composition and Board Balance

The Board has five (5) members, comprising of all Independent Non-Executive Directors. This composition fulfils the requirements mandated by the Main Market Listing Requirements ("Main LR") of Bursa Malaysia Securities Berhad ("Bursa Securities") which stipulates that at least two (2) Directors or one-third of the Board, whichever is higher, must be independent. The Directors have wide ranging experience and all had occupied senior positions in the public and/or private sectors. Four of them have experiences related to the plantation, tourism and property sectors which are the main business drivers of the Group. A brief profile of each Director is presented on pages 3 to 4 of this Annual Report.

The balance between Independent Non-Executive Directors together with the support from management is to ensure that there is an effective representation for the shareholders. It further ensures that issues of strategy, performance and resources are fully addressed and investigated to take into account long-term interests of shareholders, relevant stakeholders and the community in which the Group conducts its business. The Independent Non-Executive Directors also bring independent judgement and challenge standards of conduct and fulfil a pivotal role in corporate accountability.

The Directors, with their different backgrounds and specialisations, collectively bring considerable knowledge, judgement and experience to the Board that has been vital to the direction of the Group.

No individual or a group of individuals dominates the Board's decision making and the number of Directors reflects fairly the investment of the shareholders. The Board of Directors must select among them a Chairman, who, in accordance with Principle 3.4 of the MCCG 2012, must be a Non-Executive Director. In accordance with Principle 3.5 of the MCCG 2012, the Board must comprise a majority of Independent Directors. The Chairman of the Board is Dato' Adnan bin Maaruf.

The Board has not set a gender diversity target as of the reporting period. It is of the view that the Board membership should be determined based on a candidate's skills, experience and other qualities regardless of gender. Thus the Board is still looking for a female director that will be able to complement the current representation.

A statement by the Directors and their responsibilities for preparing the financial statements is included on page 31.

Board Responsibilities

The Board plays a primary role in the conduct and control of the Group's business affairs. The Board is primarily responsible for the Group's overall strategic plans for business performance, succession planning, risk management, investor relations programmes, internal control, management information and statutory matters. The Board is required to commit their time in order to have an effective working partnership with the management in establishing the strategic direction and goals and in monitoring its achievement. This complies with Principle 1.1 of the MCCG 2012.

The presence of Independent Non-Executive Directors shall provide unbiased and independent views and judgement in the decision making process at the Board level and to ensure that no significant decisions and policies are made by any individual and that the interest of the minority shareholders are safeguarded. This complies with Principle 1.2 of the MCCG 2012.

The Board delegate specific powers and responsibilities to three (3) Board Committees namely, Audit, Nomination and Remuneration Committees, and the day to day operation matters to the management headed by the Group Chief Operating Officer.

Appointments to the Board

Appointment to the Board is based on the recommendations of the Nomination Committee established by the Board. This includes subsidiary companies. The Nomination Committee considers the required mix of skills and experience that the Directors should bring to the Board in making these recommendations. The Nomination Committee is responsible, inter alia, for making recommendations to the Board on new nominees for the Board including Board Committees and for assessing Directors on an ongoing basis. The Nomination Committee also reviews the Board's required mix of skills and experience and other qualities, including core competencies which Non-Executive Directors should bring to the Board.

The Board must show their commitment in terms of time and contribution. As such, before accepting any other appointment, it is courteous to inform the other Board members of their intention, in accordance with Principle 4.1 of the MCCG 2012.

Re-election

All Directors appointment to the Board are subject to the rules and regulations of the Malaysian Companies Act 2016 ("the Act") and the Company's Articles of Association ("the Articles").

In accordance with the Articles, all Directors shall retire from office at least once in each three (3) years and a retiring Director is eligible for re-election.

An election of the Directors shall take place each year. At each AGM, one-third of the Directors for the time being (or if their number is not a multiple of three (3), the number nearest to but no greater than one-third) shall retire from office provided that all Directors shall retire from office at least once every three (3) years but shall be eligible for re-election.

The Articles further provide that all newly appointed Directors shall retire from office but shall be eligible for re-election in the next AGM subsequent to their appointment.

The names of the Directors of the Company who are seeking re-election or re-appointment at the 107(th) AGM of the Company to be held on 23 May 2017 as per set out in the Notice of AGM are as follows:

DIRECTORS STANDING FOR RE-ELECTION AT THE ONE HUNDRED AND SEVENTH ANNUAL GENERAL MEETING ("AGM")

Pursuant to Article 86:

   --      Datuk Kamaruddin bin Awang 
   --      Dato' Adnan bin Maaruf 
   --      Dato' Haji Muda bin Mohamed 

Special Business

Pursuant to Recommendations 3.2 and 3.3 of the Malaysian Code on Corporate Governance 2012:

   --      Dato' Adnan bin Maaruf 
   --      Dato' Haji Muda bin Mohamed 
   --      Dr. Radzuan bin A. Rahman 

Tenure of Independent Directors

In accordance with Principle 3.2 and 3.3 of the MCCG 2012, Directors will remain independent for a period of up to 9 years. As such, the Board will recommend to retain those Directors who have exceeded nine (9) years and shall seek shareholders' approval at the forthcoming AGM. The recommendation for the extension is detailed out in the Notice of AGM on page 80.

Supply of Information

The Board meets on a quarterly basis with additional meetings held whenever necessary. There were five (5) Board of Directors meetings held during the financial year ended 31 December 2016 and the details of attendance are set out as follows:

 
   Name of Directors               No. of 
                                   Meetings 
                                   Attended 
------------------------------  ----------- 
 
  Dato' Adnan bin Maaruf             5/5 
  Datuk Kamaruddin bin Awang         4/5 
  Dato' Haji Muda bin Mohamed        5/5 
  Dato' Tik bin Mustaffa             5/5 
  Dr. Radzuan bin A. Rahman          5/5 
 
  All meetings were held at 22(nd) 
   Floor Menara Promet (KH), Jalan 
   Sultan Ismail, 50250 Kuala Lumpur. 
 
 

The Company Secretary was present at all Board of Directors meetings held during the financial year ended 31 December 2016, in accordance with Principle 1.6 of the MCCG 2012.

Prior to the Board meetings, the agenda together with the relevant documents and information are distributed to all Directors to ensure that Directors have sufficient time to review and be prepared for discussion. The Group Chief Operating Officer and/or other relevant key management personnel will provide information on the Group's performance and clarification on relevant issues and management's recommendations for deliberation and discussion by the Board prior to decision-making. Proceedings of Board meetings are recorded and signed by the Chairman of the meeting.

Apart from the above, the Board members are updated on the Company's activities and its operations on a regular basis. Management's review and analysis on the Group's performance will be tabled to the Board every quarter for review. All Directors whether as a full board or in their individual capacity have access to all information of the Company on a timely basis in an appropriate form and quality necessary to enable them to discharge their duties and responsibilities.

All Directors have access to the advice and services of the Company Secretary and are entitled to seek independent professional advice, whenever necessary, at the expense of the Group. The appointment and removal of the Company Secretary are matters for the Board as a whole.

Directors' Training

The Board acknowledges the fact that continuous education is vital for the Board members to gain insight into the state of economy, manufacturing, technological advances in the core business and keep abreast of latest regulatory developments and management strategies. This complies with Principle 4.2 of the MCCG 2012.

The Board receives regular briefings and updates on the Group's businesses, operations, risk management, internal controls, corporate governance, finance and any new or changes to the relevant legislation, rules and regulations.

All the Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Securities. During the year, the Senior Management are encouraged to attend courses whether in-house or external to help them in the discharge of their duties. The Directors have also attended the following seminars to broaden their perspective, skills, knowledge and to keep abreast of the relevant changes in law, regulations and the business environment:

 
  Directors                 Seminar Title                     Date 
 
  Dato' Adnan bin           The Bell of Gender Equality       11 March 
   Maaruf                                                      2016 
  Datuk Kamaruddin          The New Auditor's Report          13 January 
   bin Awang                                                   2016 
                            - Sharing the UK Experience 
                            Valuation on Mergers and          8 March 
                             Acquisitions                      2016 
  Dato' Haji Muda           CG Breakfast Series for           26 February 
   bin Mohamed               Directors                         2016 
                            Improving Board Risk Oversight 
                             Effectiveness 
                            Audit Committee Conference        29 March 
                             2016                              2016 
  Dato' Tik bin Mustaffa    Audit Committee Conference        29 March 
                             2016                              2016 
  Dr. Radzuan bin           Sustainability Symposium:         8 October 
   A. Rahman                 Responsible Business,             2015 
                             Responsible Investing 
 

The Directors will continue to undergo other relevant training programmes and seminars from time to time as they consider necessary to equip themselves with the relevant knowledge and ideas to discharge their duties effectively.

BOARD COMMITTEES

The Board has set up Committees to delegate specific powers and responsibilities, all of which have their own written constitutions and terms of reference. The Chairman of the respective Committees reports to the Board the outcomes and recommendations thereon and minutes of such Committee meetings will be tabled for the Board's notation. The ultimate responsibility for the final decision on all matters of Board Committees lies with the entire Board. The Committees are as follows:

Audit Committee

The Audit Committee's terms of reference, which outline the Committee's functions, responsibilities and duties, are contained in the Audit Committee Report.

During the year, the Audit Committee has, inter alia, performed the following functions:

-- Reviewed the Group's quarterly and annual financial statements before announcing to Bursa Securities, Singapore Stock Exchange Securities Trading Limited ("SGX-ST") and London Stock Exchange plc ("LSE");

-- Reviewed with the external auditors, Messrs UHY Hacker Young LLP, the scope of their engagement, fees, as well as the accounting and reporting matters emanating from their examination of the annual financial statements;

-- Appraised on significant risk, control, regulatory and financial matters that have come to the attention of the external auditors in the course of their audit; and

-- Deliberated on the implications and effects of the relevant International Financial Reporting Standards which came into effect during the year.

The Committee is aware of the risk management, control and governance processes relating to critical corporate and operational areas. It also closely monitors the recommendations made in order to obtain assurance that all key risk and control concerns have been duly addressed and properly managed. This complies with Principle 6.1 of the MCCG 2012.

More information on the Audit Committee is given in the Audit Committee Report on pages 20 to 22.

Nomination Committee

In accordance with Principle 2.1 of the MCCG 2012, the Nomination Committee was established on 20 February 2003 and the members of the Nomination Committee comprises of:

(a) Dato' Tik bin Mustaffa Chairman, Independent Non-Executive Director

(b) Dato' Adnan bin Maaruf Member, Independent Non-Executive Director

(c) Dr. Radzuan bin A. Rahman Member, Independent Non-Executive Director

The functions of the Nomination Committee as per Principle 2.2 of the MCCG 2012 include:

   --    Assesses the effectiveness of the Board and the contribution of each individual Director; 

-- Assesses the size of the Board and reviews the mix of skills and experience and other qualities required by the Board to function completely and efficiently;

-- Assesses and recommends new nominees for appointment to the Board and to the Boards of the Group's subsidiary companies;

-- Assesses the independence of Independent Directors for recommendation to the shareholders for approval at the Company's general meeting in line with Principle 3.1 of the MCCG 2012.

The Company Secretary will ensure that all appointments are properly made and that all necessary information is obtained from the Directors.

The Nomination Committee has met four (4) times during the financial year ended 31 December 2016 to review all the Directors who are due for re-election and re-appointment at the Company's AGM, and to deliberate and nominate Directors to attend seminars.

Remuneration Committee

The Remuneration Committee was established on 20 February 2003.

The members of the Remuneration Committee are:

(a) Dato' Haji Muda bin Mohamed Chairman, Independent Non-Executive Director

(b) Datuk Kamaruddin bin Awang Member, Independent Non-Executive Director

(c) Dr. Radzuan bin A. Rahman Member, Independent Non-Executive Director

The Remuneration Committee has met once (1) during the financial year ended 31 December 2016.

DIRECTORS' REMUNERATION REPORT

The Level and Make-up of Remuneration

The Remuneration Committee endeavours to ensure that the remuneration package offered is competitive to attract, retain and motivate senior executives of high calibre who will strive to achieve the Group's objectives. This complies with Principle 2.3 of the MCCG 2012.

The package may include basic salary, benefits and annual bonuses that will be based on the individual performance and dependent upon the achievement of predetermined targets. The Directors' fees and meeting allowances paid to all Directors, individually and per meeting respectively, are disclosed in note 11 to the financial statements.

There were no performance-related bonuses or other benefits given to any of the Directors during the 2016 financial year.

The fees for the Non-Executive Directors are determined by the Board and approved by the shareholders. The only other remuneration of the Non-Executive Directors is meeting allowances, which are set by the Board having taken advice on appropriate levels. During the 106(th) AGM, except for one (1) person, all other shareholders unanimously voted "FOR" and approved the payment for Director's fees in respect of the year ended 31 December 2015.

The Committee has not set any policy on the Directors' Remuneration until the Group's Business Plan has been fully implemented.

The Company does not have any pension scheme for its employees and Directors. The Company does, however, make the statutory contribution for its employees to the relevant regulatory body, the Employees Provident Fund in Malaysia. The fund operates as a defined contribution scheme. The Company does not have any long term incentive plans or share option schemes for its employees and Directors.

Procedure

The Remuneration Committee is responsible for making recommendations to the Board, within agreed terms of reference, on an overall remuneration package for the senior executives. The Committee has not engaged any person to advise and assist on any matters relating to the Directors' remuneration during 2016.

DISCLOSURE - INFORMATION SUBJECT TO AUDIT

During the year ended 31 December 2016, none of the Directors had any interests in the shares of the Company or Group undertakings.

The Directors' total remuneration comprises the following:

 
                        Basic        Meeting         Total         Total 
                        Salary      Allowances        2016          2015 
                           & 
                         Fees          (RM)           (RM)          (RM) 
                         (RM) 
-------------------  ---------  --------------  -------------  ---------- 
  Non-Executive 
   Directors 
-------------------  ---------  --------------  -------------  ---------- 
  Dato' Adnan bin 
   Maaruf               40,000           6,000         46,000      46,000 
-------------------  ---------  --------------  -------------  ---------- 
  Datuk Kamaruddin 
   bin Awang            30,000           6,750         36,750      38,250 
-------------------  ---------  --------------  -------------  ---------- 
  Dato' Haji Muda 
   bin Mohamed          30,000           7,000         37,000      37,000 
-------------------  ---------  --------------  -------------  ---------- 
  Dato' Tik bin 
   Mustaffa             30,000           7,000         37,000      35,750 
-------------------  ---------  --------------  -------------  ---------- 
  Dr. Radzuan bin 
   A. Rahman            30,000           4,500         34,500      33,000 
-------------------  ---------  --------------  -------------  ---------- 
                       160,000          31,250        191,250     190,000 
-------------------  ---------  --------------  -------------  ---------- 
  Staff cost (Note                                                    6.8 
   10)                                            6.1 million     million 
-------------------  ---------  --------------  -------------  ---------- 
  Directors' fee 
   (%)                                                   3.1%        2.8% 
-------------------  ---------  --------------  -------------  ---------- 
  Dividend paid                                                       4.4 
   (page 5)                                       4.7 million     million 
-------------------  ---------  --------------  -------------  ---------- 
  Directors' fee 
   (%)                                                   4.1%        4.3% 
-------------------  ---------  --------------  -------------  ---------- 
 

Pension Entitlements

The Company does not have a pension scheme in place.

Long-Term Incentive Plans

The Company does not have a long-term incentive plan in place.

Interest in Share Options

The Company does not have a share option scheme in place.

Excess Retirement Benefits of Directors and Past Directors

The Company does not have a retirement benefit scheme in place.

Compensation for Past Directors

There was no compensation made to the past Directors in respect of loss of office and pensions.

PERFORMANCE GRAPH

The Company's performance graphs required to be included in the Directors' Remuneration Report are shown on page 25.

SHAREHOLDERS

Dialogue between the Company and its Investors

The Group believes in clear communications with its shareholders. The Annual Report and the quarterly announcements are the primary methods of communication to report the Group's business activities and financial performance to all shareholders. All such reporting information can be obtained from the website of Bursa Securities or the Group's website www.ikkr.com.my. This complies with Principle 7.2 of the MCCG 2012. Shareholders also have the opportunity to put questions at the AGM where the Directors are available to discuss aspects of the Group's business activities and performance. The shareholders may also forward their questions to the Company via e-mail at ir@ikkr.com.my or contact the Principal Office in Malaysia. This complies with Principle 8.3 of the MCCG 2012.

The Annual General Meeting

The AGM remains the principal forum for dialogue with shareholders, wherein, the Board presents the operations and performance of the Group. During the meeting, shareholders are given every opportunity to enquire and comment on matters relating to the Group's business. The Chairman, members of the Board and senior management personnel are available to respond to shareholders' queries during this meeting. This complies with Principle 8.1 of the MCCG 2012. On any matter that requires the members present to decide, as per Principle 8.2 of the MCCG 2012, the Board will encourage poll voting if it is deemed necessary.

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 every quarter and the financial year, primarily through the annual financial statements and quarterly announcements of results to shareholders as well as the Chairman's Statement in the Annual Report. The Audit Committee assists the Board by reviewing the disclosure of information to ensure completeness, accuracy and validity. This complies with Principle 7.1 of the MCCG 2012.

Internal Control and Risk Management System

The Directors acknowledge their responsibility for the Group's system of internal controls covering not only financial controls but also operational and compliance controls, as well as risk management. The internal control system involves each subsidiary business and is designed to meet the needs of each subsidiary, to ensure that the risks faced by the business in pursuit of its objectives are identified and managed at known acceptable levels. The Group Chief Operating Officer has given his assurance that the Group's exposure to risk is limited to those mentioned in note 26.3. The Group will be continuously reviewing the adequacy and integrity of its system of internal control. A full Statement on Internal Control is included on pages 23 and 24.

The Board also acknowledges the internal audit function as an integral part of an effective system of corporate governance. In this regard, the Board has taken steps to outsource the internal audit function.

Relationship with Auditors

The Board, via the establishment of the Audit Committee, maintains a formal and transparent relationship with the Company's auditors. The roles of the Audit Committee in relation to the auditors are detailed in the Audit Committee Report on page 20.

COMPLIANCE STATEMENT

The Board is satisfied that the Company had in 2016 complied with the best practices of MCCG 2012.

ADDITIONAL COMPLIANCE INFORMATION

Share Buy-Backs

During the financial year, there were no share buy-backs by the Company.

Options, Warrants or Convertible Securities

There was no grant or exercise of options, warrants or convertible securities during the financial year.

American Depository Receipt ("ADR") or Global Depository Receipt ("GDR") Programme

The Company did not sponsor any ADR or GDR programme during the financial year.

Imposition of Sanctions and/or Penalties

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

Non-Audit Fees

The non-audit fees paid to the Company's external auditors amounted to RM2,202 for the financial year under review.

Profit Estimate, Forecast, Projections and Variation in Results

The Company did not make any release on profit estimates, forecasts or projections for the financial year.

There was a variation of 10% or more between the audited results for the financial year ended 31 December 2016 and the unaudited results previously announced. The loss after tax is now stated at RM3.741 million as compared to RM3.056 million reported earlier, mainly due to the revenue, related cost of sale and related unrealized foreign exchange loss not taken up due to the different cut off period between subsidiaries.

Profit Guarantee

The Company did not give any profit guarantees during the financial year.

Material Contracts

There were no material contracts entered into by the Company and its subsidiaries involving Directors and major shareholders' interests.

Revaluation Policy on Freehold Land

The Group revalues its freehold lands whenever the market value of the assets has changed materially from the prior year and/or in at least every five (5) years.

Employee Share Option Scheme ("ESOS")

There were no ESOS offered during the financial year ended 31 December 2016.

Corporate Social Responsibility ("CSR")

The Group is aware of its responsibility to its shareholders, human capital, environment and the community. Details of CSR are disclosed on page 10.

Recurrent Related Party Transactions

There were no transactions with related parties undertaken by the Group during the period under review except as disclosed in note 27 to the financial statements.

RESPONSIBILITY STATEMENT FOR PREPARING THE ANNUAL AUDITED FINANCIAL STATEMENTS

The Board has seen and approved the Annual Report and Audited Financial Statements for the year ended 31 December 2016 and collectively and individually accept full responsibility for the accuracy of the information given and confirm that after making reasonable enquiries to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement or information therein misleading.

This Corporate Governance Statement, including the information on Directors' Remuneration, is made in accordance with the resolution of the Board of Directors dated 28 April 2017.

DATUK KAMARUDDIN BIN AWANG

Director

Audit Committee Report

The Directors are pleased to present the Audit Committee Report of the Company in respect of the financial year ended 31 December 2016.

COMPOSITION

The composition of the Audit Committee and designation of the Directors are as follows:

Members of the Committee

Datuk Kamaruddin bin Awang

Chairman (Independent Non-Executive Director)

Dato' Haji Muda bin Mohamed

Member (Independent Non-Executive Director)

Dato' Tik bin Mustaffa

Member (Independent Non-Executive Director)

Secretary to the Committee

Lee Thai Thye (LS 0000737)

TERMS OF REFERENCE

The terms of reference of the Audit Committee comprise mainly the constitution, membership, authority, duties and responsibilities of the Audit Committee.

   1.             Constitution 

The Board of Directors has established a Committee of the Board known as the Audit Committee.

   2.             Membership and Meetings 

The Committee is appointed by the Directors and shall at all times comprise not less than three (3) members of whom all are Independent Non-Executive Directors. All members of the Audit Committee shall also be financially literate, and at least one of the members must fulfil the requirements of Rule 15.09 (c) of the Main LR. The Chairman of the Committee must be an Independent Non-Executive Director and shall be appointed by the Committee members. The Company Secretary shall act as the secretary to the Committee. There shall be at least four (4) meetings per year.

   3.             Attendance at Audit Committee Meetings 

Attendance at Audit Committee Meetings during 2016 was as follows:

 
   Name of Directors                No. of 
                                    Meetings 
                                    Attended 
-------------------------------  ----------- 
 
  Datuk Kamaruddin bin Awang          4/5 
  Dato' Haji Muda bin Mohamed         5/5 
  Dato' Tik bin Mustaffa              5/5 
 
  All meetings were held at 22(nd) 
   Floor Menara Promet (KH), Jalan Sultan 
   Ismail, 50250 Kuala Lumpur. 
 
 
   4.             Authority 

The Audit Committee has the authority to investigate any activity within its terms of reference, and shall obtain the cooperation of the other Board members, employees and external auditors, and any other external professional bodies which it considers necessary.

   5.             Duties and Responsibilities 

The Audit Committee's main duties and responsibilities are as follows:

   a)             Reviews the audit plan with the external auditors. 

b) Reviews with the external auditors, the adequacy and effectiveness of the accounting and internal control systems.

   c)             Acts upon problems and reservations arising from interim and final audits. 

d) Reviews the financial statements prior to the Directors' approval to ensure a fair and full presentation of the financial affairs of the Company and the Group, and that they comply with applicable financial reporting standards, as required by Principle 5.1 of the MCCG 2012.

e) Assists in establishing an internal audit function and other appropriate control procedures, as required by Principle 6.2 of the MCCG 2012.

f) Reviews internal audit reports and highlights to the Board on any significant issues.

   g)            Assists in conducting of management audits or other sensitive matters. 

h) Assesses the suitability and independence of the external auditors, in accordance with Principle 5.2 of the MCCG 2012.

i) Makes recommendations to retain or replace the firm of external auditors and the agreement of the audit fee for the ensuing year.

j) To make available at least one (1) member to attend the Head Office at least once in two (2) weeks.

   6.             Summary of Activities 

The Committee met five (5) times during the year for the following purposes:

a) Reviewed the Group's quarterly and annual financial statements before recommending to the Board to approve for announcement to Bursa Securities, SGX-ST and LSE.

b) Reviewed with the external auditors, Messrs UHY Hacker Young LLP, the scope of their engagement, fees as well as the accounting and reporting matters emanating from their examination of the annual financial statements.

c) Appraised on significant risk, control, regulatory and financial matters that have come to the attention of the external auditors in the course of their audit, and counter check to see if Internal Audit report also indicated these findings.

d) Deliberated on the implications and effects of the relevant International Financial Reporting Standards which came into effect during the year.

e) Met with the external consultants on ongoing projects to get updates on the status and any issues faced by them due to external parties or management related.

f) Met with the Heads of Business Units to enquire about the overall business operations.

   g)            Attended all sub-committee meetings on new business ventures. 
   7.             Internal Audit Function 

The Group's internal control systems are reviewed by the outsourced internal auditor, together with external consultants. Their principal responsibility is to assist the Audit Committee in providing independent assessments for the adequacy, efficiency and effectiveness of the internal control systems to ensure compliance with the systems and standard operating procedures in the Group. The Group Internal Audit is independent from the activities or operations of other operating units.

A summary of the Internal Audit activities during the financial year under review is as follows:

a) Performed operational audits on business units of the Group to ascertain the adequacy and integrity of their system of internal controls and made recommendations for improvement where weaknesses were found.

b) Conducted follow-up review to determine the adequacy, effectiveness and timeliness of actions taken by the management on audit recommendations.

c) The tourism and plantation units are the main business units being subjected for the internal audit scope as they include some subjective variables. As for the manufacturing unit, it is audited yearly under the ISO 9001 audit.

After each audit, the findings and recommendations for improvement were communicated to the respective management for their response and corrective actions. Any findings would be looked into and responded accordingly to avoid any financial impact. All reports would also be checked later against the external audit progress report. In this respect, the Internal Audit has added value by improving the control processes within the Group.

The total costs incurred for the Internal Audit in discharging its functions and responsibilities in 2016 amounted to RM50,202 compared to RM36,673 in 2015.

Statement on Internal Control

The Board is pleased to make the following disclosures pursuant to Paragraph 15.26(b) of the Main LR of Bursa Securities, which requires the Board of Directors of public listed companies to include in its annual report "A statement about the state of internal control of the listed issuer as a group". The Board confirms that there is an ongoing process of identifying, evaluating and managing the significant risks faced by the Group, and that the process will be regularly reviewed by the Board and accords with 'The Statement on Internal Control - Guidance For Directors of Public Listed Companies'.

BOARD'S RESPONSIBILITY

In accordance with Principle 6 of the MCCG 2012, the Board is committed to maintaining a sound system of internal control to safeguard shareholders' investments and the Group's assets. Accordingly, the Board acknowledges its responsibility for the Group's overall system of internal control which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity. However, it should be noted that due to the limitations that are inherent in any system of internal control, such a system is designed to manage rather than eliminate the risk of failure to achieve the Group's business objectives. Accordingly, it can only provide reasonable and not absolute assurance against material misstatement or loss.

REVIEW PROCESS FOR INTERNAL CONTROL SYSTEM

In view of the size and nature of the Group's operations, the Group has an in-house function for the review of its internal control system, which forms part of the internal audit function. Currently the functions are focused on the most active subsidiaries. An external consultant has also been contracted to conduct certain system checks on the operational activities at Perhentian Island Resort Sdn Bhd and for the new property division.

The reports are presented to the Audit Committee. Being an independent function, the reports must be presented with impartiality, proficiency and due professional care.

The internal audit function facilitates the Board, through the Audit Committee, in carrying out its responsibility to review and evaluate the adequacy and integrity of the Group's internal control system. The Board reviews matters pertaining to internal control which among others, includes the adequacy and integrity of the internal control systems of the Group. Reviews are carried out annually to provide independent assessments on the adequacy, efficiency and effectiveness of the Group's internal control systems in anticipating potential risk exposures over key business systems and processes and in controlling the proper conduct of businesses within the Group.

The internal audit function adopts a risk-based approach whereby the strategies and plans are prepared based on the risk profile of the Group. The plans will be presented to the Audit Committee for approval annually. The resulting reports will be reviewed by the Audit Committee and forwarded to the management for attention and necessary corrective actions. The management is responsible for ensuring any corrective actions on reported weaknesses are taken within the required time frame.

OTHER CONTROL PROCEDURES

Apart from internal audit, there is an organisational structure with formally defined lines of responsibility and delegation of authority. This will provide a process of hierarchical reporting for an auditable trail of accountability.

The monitoring and management of the Group is delegated to the Exco Committee comprising of a few Board members and senior operational management. The committee, through their involvement in the business operations and attendance at senior management level meetings, manages and monitors the Group's financial performance, key performance indicators, operational effectiveness and efficiency, discusses and resolves significant business issues and ensures compliance with applicable laws, regulations, rules, directives and guidelines. These meetings serve as a two-way platform for the Board to communicate and address significant matters in relation to the Group's business and financial affairs and provide updates on significant changes in the businesses and the external environment that may result in any significant risks to the Group.

Internal control procedures are set out in standard operating practice and business process manuals and internal memos to serve as internal control guidance for proper measures to be undertaken and are subject to regular review, enhancement and improvement by the Internal Auditor.

REVIEW OF THIS STATEMENT

Pursuant to Paragraph 15.23 of the Main LR, the external auditors have reviewed this Statement and the Risk Management Statement for inclusion in the 2015 Annual Report, and reported to the Board that nothing has come to their attention that causes them to believe that the Statements are inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control.

This Statement on Internal Control is made in accordance with the resolution of the Board of Directors dated 28 April 2017.

DATUK KAMARUDDIN BIN AWANG

Director

Group Financial Highlights

 
                                          2016       2015       2014        2013       2012       2011       2010       2009       2008       2007 
                      ------------------------  ---------  ---------  ----------  ---------  ---------  ---------  ---------  ---------  --------- 
 
    Financial Performance 
 
  Revenue             RM'000            10,834     10,289     23,639      14,073     16,408     20,173     28,165     17,582     17,550     19,736 
  (Loss)/Profit 
   Before 
   Taxation           RM'000           (3,389)    (1,898)    (6,988)    (28,189)      4,757    (3,973)    (4,223)      1,483    (1,459)        874 
  (Loss)/Profit 
   for the 
   Year               RM'000           (3,741)    (1,941)    (7,127)    (28,497)      4,430    (4,164)    (4,918)        982    (1,540)        697 
  (Loss)/Earnings 
   Per Share          Sen               (0.93)     (0.48)     (1.77)      (7.05)       1.06     (0.99)     (1.17)       0.23     (0.37)       0.17 
  Dividend 
   Per Share 
   (proposed/paid)      Sen              1.116      1.118      1.090       1.099      1.455          -          -          -          -          - 
 
 
  Total Assets        RM'000           725,474    719,934    706,621     718,832    742,308    726,207    701,696    516,412    513,774    571,152 
  Share Capital       Shares'000       420,750    420,750    420,750     420,750    420,750    420,750    420,750    420,750    420,750    420,750 
  Treasury 
   Shares             Shares'000        17,541     17,541     17,541      17,541      3,265          -          -          -          -          - 
  Shareholders' 
   Equity             RM'000           636,441    638,309    630,951     713,807    737,855    719,023    653,182    486,826    486,017    540,263 
  Total 
   Liabilities        RM'000            89,033     81,625     75,670       5,025      4,453      7,184     48,514     29,586     27,757     30,889 
  Borrowings          RM'000                 -          -          -           -         24         94     15,455     22,727     20,030     23,840 
  Current 
   Ratios             Times              17.30      41.66      64.15       44.65      55.90      36.77       8.24       3.36       0.60       0.54 
  Quick Ratios        Times              17.21      41.38      63.26       41.06      51.51      34.75       8.15       3.11       0.60       0.54 
  Debt-Equity 
   Ratios             Times               0.00       0.00       0.00        0.00       0.00       0.00       0.02       0.05       0.04       0.04 
 
  Net Assets 
   Per Share          RM                  1.58       1.58       1.56        1.78       1.77       1.71       1.55       1.16       1.15       1.28 
                                     ---------  ---------  ---------  ----------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 

All figures are in RM thousands unless otherwise stated.

SHARE PRICE PERFORMANCE GRAPH

The graph below shows the movement of the Company's share price on Bursa Securities against the corresponding change in the Kuala Lumpur Composite Index ("KLCI") and the Group's Net Tangible Assets per share ("NTA per share"). The KLCI was selected as it represents a broad equity market index in which the Company is a constituent member.

http://www.rns-pdf.londonstockexchange.com/rns/7889D_1-2017-4-29.pdf

DIRECTORS' REPORT

FOR THE YEARED 31 DECEMBER 2016

_______________________________________________________________________________________________

The Directors have pleasure in presenting their report, together with the audited financial statements of Inch Kenneth Kajang Rubber Public Limited Company ("the Company" or "the Parent") and its subsidiaries (together "the Group") for the financial year ended 31 December 2016.

Principal activities

The Company was incorporated in Scotland with company number SC007574, as a public company limited by shares.

The Company is involved in investment holding and carries on the business of an oil palm grower in Selangor, Malaysia.

The subsidiary undertakings are engaged in the operations of a block rubber manufacturer, tourist resort, retailing building supplies, property development and leasing of properties in Malaysia.

A more detailed review of the Group's operations is set out in the Chairman's Statement.

Group structure

The Group operates through its Parent and subsidiary companies, details of which are set out in note 15 to these financial statements.

Results and dividends

The Group's results for the year are set out on page 34. The Group's loss attributable to shareholders of the Company for the financial year ended 31 December 2016 amounted to RM3.741 million (2015: loss of RM1.941 million).

On 28 April 2016, the Directors approved and declared a 2% interim dividend for the financial year ended 31 December 2015. The total amount of RM4.685 million was paid on 30 May 2016. The interim dividend was under the single tier system of 1.116 sen per share, on 403,209,200 ordinary shares. A dividend of 2% is proposed for the financial year ended 31 December 2016.

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

The Board plays an active role in the development of the Company's strategy. It has in place a strategy planning process, whereby the management presents to the Board its recommended strategy annually, together with its proposed business and regulatory plans for the ensuing year at a dedicated session, for the Board's review and approval. At this session, the Board deliberates both the management's and its own perspectives, and challenges the management's views and assumptions, to ensure the best outcome. In conjunction with this, the Board also reviews and approves the annual budget for the ensuing year, and sets the Key Performance Indicators (KPIs) under the Corporate Balanced Scorecard (CBS), ensuring that the targets correspond to the Company's strategy and business plan, reflect competitive industry trends and internal capabilities as well as provide sufficient stretch for the management.

DIRECTORS' REPORT

FOR THE YEARED 31 DECEMBER 2016

_______________________________________________________________________________________________

The following table indicates the areas that may be looked at for improvement:

 
  Department           Areas 
-------------------  --------------------------------------- 
  Finance              Return on Investment 
                        Cash Flow 
                        Return on Capital Employed 
                        Financial Results (Quarterly/Yearly) 
-------------------  --------------------------------------- 
  Internal Business    Number of activities per 
   Processes            function 
                        Duplicate activities across 
                        functions 
                        Process alignment (is the 
                        right process in the right 
                        department) 
                        Process bottlenecks 
                        Process automation 
-------------------  --------------------------------------- 
  Learning & Growth    Is there the correct level 
                        of expertise for the job 
                        Employee turnover 
                        Job satisfaction 
                        Training/Learning opportunities 
-------------------  --------------------------------------- 
  Customer             Delivery performance to 
                        customer 
                        Quality performance for 
                        customer 
                        Customer satisfaction rate 
                        Customer percentage of market 
                        Customer retention rate 
-------------------  --------------------------------------- 
 

Post balance sheet events

No other events have occurred since the reporting period end which significantly affects the Company or the Group.

Directors

The Directors of the Company who held office during the year and at the date of this report are:

Dato' Adnan bin Maaruf

Datuk Kamaruddin bin Awang

Dato' Haji Muda bin Mohamed

Dato' Tik bin Mustaffa

Dr. Radzuan bin A. Rahman

Directors' interests

Neither at the end of the financial year ended 31 December 2016, nor at any time during that year, was there any arrangement to which the Company was a party, whereby the Directors could acquire benefits by means of the acquisition of shares in or debentures of, the Company or Group undertakings.

Since the end of the previous financial year, no Director has received or become entitled to receive any benefits (other than benefits included in the aggregate amount of emoluments received by the Directors as shown in the financial statements) by reason of a contract made by the Company or Group undertakings with any Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

None of the Directors who held office during the financial year and to the date of this report, together with their immediate families, had any interests in the shares of the Company or Group undertakings.

Substantial shareholders

The Company has been notified, in accordance with Rule 5 of the United Kingdom's FCA's Disclosure and Transparency Rules, of the following interests in its ordinary shares as at 10 April 2017 by shareholders holding 3% or more of the share capital:

 
                                              Number of       % of 
                                              shares of     Issued 
  Name                                         10p each    Capital 
----------------------------------------  -------------  --------- 
   Concrete Engineering Products Berhad      58,088,000      14.41 
  Ng Ah Chai                                 50,283,200      12.47 
  Hamptons Property Sdn Bhd                  49,327,700      12.23 
  FA Securities Sdn Bhd                      28,972,500       7.19 
  Euston Technologies Sdn Bhd                22,662,066       5.62 
 

No other person has notified an interest in the ordinary shares of the Company required to be disclosed to the Company in accordance with the United Kingdom's Companies Act 2006 ("UK Companies Act 2006").

No shareholders have any special rights or restrictions on voting rights attached to their shares.

Creditor payment policy and practice

It is the Group's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the Group and its suppliers, provided that all trading terms and conditions have been complied with.

At 31 December 2016, the Group had an average of 17 days (2015: 15 days) purchase outstanding in trade payables.

Health and Safety

All aspects of health and safety at the Group's plantations are handled by our agent, Akem Links Sdn Bhd, and reviewed by the Board. The Company also places a high level of importance on health and safety aspects at its principal trading subsidiaries, Perhentian Island Resort Sdn Bhd, Motel Desa Sdn Bhd and Supara Company Limited. Any health and safety issues at these subsidiaries may be detrimental to its image and hence may affect revenues achieved.

Employees

The number of staff employed by the Group at the year end was 172 (2015: 180). At the resort, factory and estates, we provide employees with full quarters and required facilities, to provide a conductive environment, both for work and entertainment.

Political and charitable donations

There were no political or charitable donations made by the Group during the year ended 31 December 2016 except for community support by the subsidiary, Perhentian Island Resort Sdn Bhd, to the village committee, as and when the need arose.

Environment

The Group's business is situated within areas that are subject to environmental conditions imposed by the local government authorities. All conditions have been fulfilled throughout the year. There have been no issues raised by the authorities pertaining to the day to day operation in relation to these conditions.

Financial instruments

Details of the Group financial instruments and risks management are disclosed in note 26.

Information to shareholders

The Group has its own website (http://www.ikkr.com.my) for the purposes of improving information flow to shareholders and potential investors.

Going concern

After making appropriate enquiries and examining those areas which could give rise to financial exposure, the Directors are satisfied that no material or significant exposures exist and that the Group has adequate resources to continue its operations for the foreseeable future. For this reason, and as further discussed in note 2.1, the Directors continue to adopt the going concern basis in preparing the Company's and Group's financial statements.

Auditors

In accordance with Section 489 of the UK's Companies Act 2006, a resolution proposing that UHY Hacker Young be re-appointed as auditors of the Company and that the Directors be authorised to fix their remuneration will be put to the next AGM.

On behalf of the Board

DATO' ADNAN BIN MAARUF

Director

DATUK KAMARUDDIN BIN AWANG

Director

Kuala Lumpur, Malaysia

28 April 2017

STATEMENT OF RESPONSIBILITIES OF THOSE CHARGED WITH GOVERNANCE

FOR THE YEARED 31 DECEMBER 2016

_______________________________________________________________________________________________

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable United Kingdom company law and International Financial Reporting Standards as adopted by the European Union ("IFRS").

The Directors are required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the Company and of the profit or loss and cash flows of the Group and of the Company for that period. In preparing those financial statements, the Directors are required to:

   --    select suitable accounting policies and then apply them consistently; 
   --    make judgments and estimates that are reasonable and prudent; 

-- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

-- prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business;

-- provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

-- state that the Group and the Company has complied with IFRS, subject to any material departures disclosed and explained in the financial statements.

The Directors confirm that the financial statements comply with the above requirements.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and of the Company and to enable them to ensure that the financial statements comply with the UK's Companies Act 2006 and Article 4 of the International Accounting Standards (IAS) Regulation. The Directors are also responsible for safeguarding the assets of the Group and of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of disclosure to auditors

The Directors who were members of the Board at the time of approving this report are listed on page 1. Having made enquiries of fellow Directors and of the Company's auditors, each of these Directors confirms that:

- to the best of each Director's knowledge and belief, there is no relevant audit information of which the Company's auditors are unaware; and

- each Director has taken all the steps a Director might reasonably be expected to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The United Kingdom Corporate Governance Statement

The Financial Conduct Authority in the United Kingdom ("the FCA") requires the Company to comply with the FCA's Listing Rules 14.3.24 and 18.4.3(2) and Disclosure and Transparency Rule 7.2. The Annual Report contains in the Statements of Corporate Governance and Internal Control the information required by these rules.

Disclosures in respect of the Malaysian Code on Corporate Governance 2012

As required by the Main LR of Bursa Securities, the Annual Report contains a Corporate Governance Statement pursuant to the MCCG 2012.

STATUTORY DECLARATION

PURSUANT TO SECTION 251 (1) (b) OF THE MALAYSIAN COMPANIES ACT, 2016

_______________________________________________________________________________________________

I, HUSSAIN AHMAD BIN ABDUL KADER, being the officer primarily responsible for the financial management of Inch Kenneth Kajang Rubber Public Limited Company, do solemnly and sincerely declare that the accompanying financial statements set out on pages 34 to 73 are in my opinion correct and 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 above named

HUSSAIN AHMAD BIN ABDUL KADER

at Kuala Lumpur in the Federal Territory

on 28 April 2017

Before me

KAPT. (B) JASNI BIN YUSOFF (W465)

Commissioner for Oaths

Kuala Lumpur, Malaysia

28 April 2017

INDEPENT AUDITORS' REPORT

TO THE SHAREHOLDERS OF INCH KENNETH KAJANG RUBBER PUBLIC LIMITED COMPANY

FOR THE YEARED 31 DECEMBER 2016

We have audited the financial statements of Inch Kenneth Kajang Rubber Public Limited Company for the year ended 31 December 2016 which comprise of the Group and Company Statement of Profit or Loss, Group and Company Statement of Profit or Loss and Other Comprehensive Income, Group and Company Statement of Financial Position, Group and Company Statement of Changes in Equity, Group and Company Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the UK Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and Auditors

As explained more fully in the Statement of Responsibilities of those Charged with Governance set out on page 30, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion:

-- the financial statements give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 31 December 2016 and of the Group's and the Parent Company's loss for the year then ended;

-- the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and

-- the financial statements have been prepared in accordance with the requirements of the UK Companies Act 2006; and, as regards the Group financial statements, Article 4 of the IAS Regulation.

Opinion on other matters prescribed by the UK Companies Act 2006

In our opinion:

-- the part of the Directors' Remuneration Report included within the Corporate Governance Statement relating to Directors' remuneration to be audited has been properly prepared in accordance with the UK Companies Act 2006;

-- the information given in the Directors' Report and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-- the information given in the Corporate Governance Statement set out on pages 12 to 19 with respect to internal control and risk management systems in relation to financial reporting processes and the information about share capital structures in the Directors' Report is consistent with the financial statements.

INDEPENT AUDITORS' REPORT

TO THE SHAREHOLDERS OF INCH KENNETH KAJANG RUBBER PUBLIC LIMITED COMPANY

FOR THE YEARED 31 DECEMBER 2016

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the UK Companies Act 2006 requires us to report to you if, in our opinion:

-- adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

-- the Parent Company's financial statements and the part of the Directors' Remuneration Report included within the Corporate Governance Statement relating to Directors' remuneration to be audited are not in agreement with the accounting records and returns; or

   --              certain disclosures of Directors' remuneration specified by law are not made; or 
   --              we have not received all the information and explanations we require for our audit. 

Julie Zhuge Wilson (Partner)

Senior Statutory Auditor

for and on behalf of UHY Hacker Young

Chartered Accountants and Statutory Auditors

Quadrant House

4 Thomas More Square

London E1W 1YW

28 April 2017

The maintenance and integrity of the Inch Kenneth Kajang Rubber Public Limited Company website is the responsibility of the Directors. The work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website; and legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another.

GROUP AND COMPANY STATEMENT OF PROFIT OR LOSS

FOR THE YEARED 31 DECEMBER 2016

________________________________________________________________________________________________

 
                                              GROUP                 COMPANY 
                              Notes     2016        2015        2016       2015 
                                       RM'000      RM'000      RM'000     RM'000 
 
 
  Revenue                       4        10,834      10,289        266        376 
 
  Cost of sales                         (3,829)     (4,968)      (255)      (305) 
                                     ----------  ----------  ---------  --------- 
 
  Gross profit                            7,005       5,321         11         71 
 
  Other income                  5         1,410         618        670        699 
  Administrative expenses              (16,009)    (16,801)    (8,799)    (8,215) 
  Selling and marketing 
   expenses                               (383)       (330)          -          - 
 
 
  Operating loss                6       (7,977)    (11,192)    (8,118)    (7,445) 
 
  Finance income                7         4,761       4,554      4,676      4,462 
  Other gains and 
   losses                       5            68         142         36         80 
  Share of results 
   of associate                16         (170)       4,598          -          - 
  Impairment of goodwill       18          (71)           -          -          - 
 
 
Loss before taxation                    (3,389)     (1,898)    (3,406)    (2,903) 
 
  Taxation                      8         (352)        (43)          -          - 
 
  Loss for the year                     (3,741)     (1,941)    (3,406)    (2,903) 
                                     ==========  ==========  =========  ========= 
 
  Attributable to: 
    Equity holders 
     of the Company                     (3,741)     (1,941)    (3,406)    (2,903) 
                                     ==========  ==========  =========  ========= 
 
Loss per share (Sen):           9 
   Basic                                 (0.93)      (0.48) 
   Diluted                               (0.93)      (0.48) 
 
Net dividend per 
 share (Sen)                              1.116       1.118 
                                     ==========  ========== 
 

The results for 2016 and 2015 entirely relate to continuing operations.

GROUP AND COMPANY STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

FOR THE YEARED 31 DECEMBER 2016

________________________________________________________________________________________________

 
 
                                                          GROUP                COMPANY 
                                                     2016       2015       2016        2015 
                                                    RM'000     RM'000     RM'000      RM'000 
 
 
  Loss for the year                                 (3,741)    (1,941)     (3,406)    (2,903) 
                                                  =========  =========  ==========  ========= 
 
    Other comprehensive income: 
 
  Items that will not be reclassified 
   subsequently 
   to profit or loss 
  Revaluation of properties, net of tax               5,700     12,557           -      3,750 
 
  Items that may be reclassified subsequently 
  to profit or loss 
  Revaluation of available-for-sale investments 
   and short term investments                           712        214         844       (37) 
  Reclassification adjustments on short 
   term 
   investments                                          (9)      (189)        (28)          - 
 
  Exchange differences on translating 
   foreign operations                                 (161)      1,113           -          - 
                                                  ---------  ---------  ----------  --------- 
 
  Other comprehensive income, net of tax              6,242     13,695         816      3,713 
                                                  ---------  ---------  ----------  --------- 
 
  Total comprehensive income/(loss) for 
   the year                                           2,501     11,754     (2,590)        810 
                                                  =========  =========  ==========  ========= 
 
 

GROUP AND COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2016

 
                                                GROUP                  COMPANY 
                                Notes      2016        2015        2016        2015 
                                          RM'000      RM'000      RM'000      RM'000 
  ASSETS 
  Non-current assets 
  Property, plant 
   and equipment                 12       502,728     462,381     122,951     119,774 
  Investment property            13            69          71           -           - 
  Intangible assets              14           121          35          29          32 
  Investments in 
   subsidiaries                  15             -           -     241,570     237,075 
  Investment in associate        16        24,570      24,740      18,146      18,146 
  Available-for-sale 
   investments                   17            66          84          12          13 
  Goodwill                       18             -          71           -           - 
                                       ----------  ----------  ----------  ---------- 
                                          527,554     487,382     382,708     375,040 
                                       ----------  ----------  ----------  ---------- 
 
  Current assets 
  Inventories                    19         1,036       1,555           -           - 
  Trade and other 
   receivables                   20        75,879      93,820       1,850       1,299 
  Short term investments         21        93,875     110,422      91,819     107,940 
  Cash and cash equivalents      22        27,130      26,755      25,182      24,275 
                                       ----------  ----------  ----------  ---------- 
                                          197,920     232,552     118,851     133,514 
                                       ----------  ----------  ----------  ---------- 
  TOTAL ASSETS                            725,474     719,934     501,559     508,554 
                                       ==========  ==========  ==========  ========== 
 
  EQUITY AND LIABILITIES 
  Equity attributable to shareholders 
   of the Company 
  Share capital                  23       287,343     287,343     287,343     287,343 
  Share premium                                 8           8           8           8 
  Property revaluation 
   reserve                                234,034     228,085      68,700      68,700 
  Investment revaluation 
   reserve                                 15,992      15,222         400       (417) 
  Foreign currency 
   translation reserve                      (351)       (190)           -           - 
  Retained earnings                       115,395     123,821     136,657     144,747 
                                       ----------  ----------  ----------  ---------- 
                                          652,421     654,289     493,108     500,381 
  Less : Treasury 
   shares                        24      (15,980)    (15,980)    (15,980)    (15,980) 
                                       ----------  ----------  ----------  ---------- 
  Total Equity                            636,441     638,309     477,128     484,401 
                                       ----------  ----------  ----------  ---------- 
 
  Current liabilities 
  Trade and other 
   payables                      25        11,365       5,507       1,516       1,238 
  Taxation payable                             75          75           -           - 
                                       ----------  ----------  ----------  ---------- 
                                           11,440       5,582       1,516       1,238 
                                       ----------  ----------  ----------  ---------- 
  Non-current liabilities 
  Employee entitlements          25            15          15          15          15 
  Deferred tax liabilities        8        77,578      76,028      22,900      22,900 
                                           77,593      76,043      22,915      22,915 
                                       ----------  ----------  ----------  ---------- 
  Total Liabilities                        89,033      81,625      24,431      24,153 
                                       ----------  ----------  ----------  ---------- 
   TOTAL EQUITY AND 
    LIABILITIES                           725,474     719,934     501,559     508,554 
                                       ==========  ==========  ==========  ========== 
 

The financial statements of Inch Kenneth Kajang Rubber Public Limited Company [registered numbers: SC007574 (Scotland) and 990261M (Malaysia)] were approved by the Board of Directors on 28 April 2017 and signed on its behalf by:

   DATO ADNAN BIN MAARUF                                                 DATUK KAMARUDDIN BIN AWANG 

Director Director

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEARED 31 DECEMBER 2016

_________________________________________________________________________________________________

 
                      Share      Share       Property     Investment        Foreign     Retained      Treasury       Total 
                    Capital    Premium    Revaluation    Revaluation       Currency     Earnings        Shares      Equity 
                                              Reserve        Reserve    Translation 
                     RM'000     RM'000         RM'000         RM'000         RM'000       RM'000        RM'000      RM'000 
  Year ended 
   31 December 
   2016 
  At 1 January 
   2016             287,343          8        228,085         15,222          (190)      123,821      (15,980)     638,309 
 
  Total 
   comprehensive 
   income for 
   year                   -          -          5,949            770          (161)      (3,741)             -       2,817 
  Dividends 
   paid                   -          -              -              -              -      (4,685)             -     (4,685) 
 
  At 31 December 
   2016             287,343          8        234,034         15,992          (351)      115,395      (15,980)     636,441 
                  =========  =========  =============  =============  =============  ===========  ============  ========== 
 
 
  Year ended 
   31 December 
   2015 
  At 1 January 
   2015             287,343          8        215,528         15,197        (1,303)      130,158      (15,980)     630,951 
  Total 
   comprehensive 
   loss for 
   year                   -          -         12,557             25          1,113      (1,941)             -      11,754 
  Dividends 
   paid                   -          -              -              -              -      (4,396)             -     (4,396) 
 
  At 31 December 
   2015             287,343          8        228,085         15,222          (190)      123,821      (15,980)     638,309 
                  =========  =========  =============  =============  =============  ===========  ============  ========== 
 
 

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEARED 31 DECEMBER 2016

_________________________________________________________________________________________________

Share capital represents the nominal value of ordinary shares issued to shareholders of the company. The amount of share capital a company reports on its statement of financial position only accounts for the initial amount for which the original shareholders purchased the shares from the issuing company. Any price differences arising from price appreciation/depreciation as a result of transactions in the secondary market are not included.

Share premium is a contribution made by a shareholder when shares are issued and paid-in above the par value of such shares.

Property revaluation reserve is the capital reserve where changes in the value of the properties are recognised when they are revalued.

Investment revaluation reserve is the change in the value of investments recognised when they are revalued.

Foreign currency translation reserve represents the exchange differences resulting from the retranslation of net investments in subsidiary undertakings.

Retained earnings are net earnings not paid out as dividends, but retained by the company to be reinvested in its core business.

Treasury shares are those issued but re-purchased by the company. They are considered as issued but not outstanding and are not therefore included when calculating earnings per share and are not entitled to receive dividends. Treasury shares are treated as a reduction from equity.

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEARED 31 DECEMBER 2016

_________________________________________________________________________________________________

 
                            Share      Share       Property     Investment    Retained     Treasury      Total 
                          Capital    Premium    Revaluation    Revaluation    Earnings       Shares     Equity 
                                                    Reserve        Reserve 
                           RM'000     RM'000         RM'000         RM'000      RM'000       RM'000     RM'000 
 
  Year ended 
   31 December 
   2016 
 
  At 1 January 
   2016                   287,343          8         68,700          (417)     144,747     (15,980)    484,401 
 
  Total comprehensive 
   income for 
   year                         -          -              -            817     (3,405)            -    (2,588) 
 
  Dividends 
   paid                         -          -              -              -     (4,685)            -    (4,685) 
 
  At 31 December 
   2016                   287,343          8         68,700            400     136,657     (15,980)    477,128 
                        =========  =========  =============  =============  ==========  ===========  ========= 
 
 
  Year ended 
   31 December 
   2015 
 
  At 1 January 
   2015                   287,343          8         64,950          (380)     152,046     (15,980)    487,987 
 
 
  Total comprehensive 
   loss for 
   year                         -          -          3,750           (37)     (2,903)            -        810 
 
  Dividends 
   paid                         -          -              -              -     (4,396)            -    (4,396) 
 
  At 31 December 
   2015                   287,343          8         68,700          (417)     144,747     (15,980)    484,401 
                        =========  =========  =============  =============  ==========  ===========  ========= 
 

GROUP AND COMPANY STATEMENT OF CASH FLOWS

FOR THE YEARED 31 DECEMBER 2016

____________________________________________________________________________________________

 
                                              GROUP                  COMPANY 
                                         2016        2015       2016        2015 
                                        RM'000      RM'000     RM'000      RM'000 
  Cash flows from operating 
   activities 
  Operating loss                        (7,977)    (11,192)    (8,118)      (7,445) 
  Adjustments for items not 
   requiring an outflow of 
   funds: 
  Provision for diminution                    -          81          -            - 
   in value of stocks 
  Depreciation and amortisation           1,517       1,777         45           30 
                                     ----------  ----------  ---------  ----------- 
  Operating loss before changes 
   in working capital                   (6,460)     (9,334)    (8,073)      (7,415) 
   Changes in working capital: 
  Decrease/(increase) in 
   inventories                              519       1,774          -            - 
  (Increase)/decrease in 
   trade and other receivables           17,941    (19,075)      (551)        (151) 
  Increase/(decrease) in 
   trade and other payables               5,858       1,997        278          256 
  Taxation refunded                           -           -          -            - 
  Taxation paid                           (270)       (270)          -            - 
                                     ----------  ----------  ---------  ----------- 
  Net cash used in operating 
   activities                            17,588    (24,908)    (8,346)      (7,310) 
                                     ----------  ----------  ---------  ----------- 
 
  Investing activities 
  Proceeds from disposal                      -          58          -            - 
   of property, plant and 
   equipment 
  Proceeds from disposal 
   of investments                        22,725      36,450     20,725       34,350 
  Interest and dividends 
   received                               4,761       4,554      4,676        4,462 
  Loans granted to subsidiaries               -           -    (4,495)      (5,959) 
  Payments to acquire investments       (6,000)    (23,064)    (3,749)     (22,977) 
  Payments to acquire intangible 
   assets                                  (55)        (31)        (9)         (28) 
  Payments to acquire property, 
   plant and equipment                 (33,959)     (5,646)    (3,210)      (3,710) 
                                     ----------              --------- 
  Net cash generated from 
   investing activities                (12,528)      12,321     13,938        6,138 
                                     ----------  ----------  ---------  ----------- 
 
  Financing activities 
  Dividends paid                        (4,685)     (4,396)    (4,685)      (4,396) 
  Net cash used in financing 
   activities                           (4,685)     (4,396)    (4,685)      (4,396) 
                                     ----------  ----------  ---------  ----------- 
 
  (Decrease)/increase in 
   cash and cash equivalents                375    (16,983)        907      (5,568) 
  Cash and cash equivalents 
   at 1 January                          26,755      43,738     24,275       29,843 
                                     ----------  ----------  ---------  ----------- 
  Cash and cash equivalents 
   at 31 December                        27,130      26,755     25,182       24,275 
                                     ==========  ==========  =========  =========== 
 
  Cash and cash equivalents 
   comprise of: 
  Short term deposits                    23,407      23,926     23,362       23,716 
  Cash and bank balances                  3,723       2,829      1,820          559 
                                         27,130      26,755     25,182       24,275 
                                     ==========  ==========  =========  =========== 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   1.             Corporate information 

The consolidated financial statements of Inch Kenneth Kajang Rubber Public Limited Company ("the Company") and its subsidiaries (together "the Group") for the year ended 31 December 2015 were authorised for issue by the Directors on 25 April 2017. Inch Kenneth Kajang Rubber Public Limited Company is a public limited company incorporated in Scotland. Its shares are publicly traded on Bursa Securities, SGX-ST and LSE. The principal activities of the Group are oil palm plantation owners, tourism resort operators, manufacturers of constant viscosity (CV) block rubber and property development. Further information on the Company's subsidiaries is in note 15.

   2.            Accounting policies 

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated below.

   2.1          Basis of preparation and going concern 

The Group's financial statements are prepared on a going concern basis and in accordance with International Financial Reporting Standards, as adopted by the European Union ("IFRS") and in accordance with those parts of the UK's Companies Act 2006 applicable to companies preparing their accounts in accordance with IFRS.

The Company's financial statements have also been prepared in accordance with IFRS and the UK Companies Act 2006.

The financial statements of the Group and Company are prepared on an historical cost basis as modified by the revaluation of freehold lands and available-for-sale investments.

The Group's financial statements are presented in Ringgit Malaysia and all values are rounded to the nearest thousand (RM'000) except when otherwise indicated. The exchange rate of Ringgit Malaysia to Pounds Sterling at 31 December 2015 was GBP1: RM5.5108 (RM1: GBP0.1815) and 31 December 2015 was GBP1: RM6.3607 (RM1: GBP0.1572).

Going concern

During the year ended 31 December 2016 the Group made a loss of RM3.741 million (2015: loss of RM1.941 million) and at the year end date the Group had net current assets of RM186.48 million (2015: RM226.97 million) and net assets of RM636.44 million (2015: RM638.31 million). The operations of the Group are currently being financed by funds raised from the Group's operations and proceeds from disposal of land in year 2011. The Group has adequate resources to continue its operations for the foreseeable future as there are assets available that could be converted to cash or cash equivalents, should the need arise. The financial statements have, therefore, been prepared on the going concern basis.

   2.2                          New IFRS Standards and Interpretations 

The Group has adopted all relevant standards effective for accounting periods beginning on or after 1 January 2016 from the beginning of the reporting period.

As at end of the reporting period, the Group has not adopted the following standards as it is either not effective or not applicable to the Group's business.

Standards, amendments and interpretations

The Group has adopted all relevant standards effective for accounting periods beginning on or after 1 January 2016 from the beginning of the reporting period.

As at end of the reporting period, the Group has not adopted the following standards as it is either not effective or not applicable to the Group's business.

Standards, amendments and interpretations (not yet endorsed by EU at 6 April 2017)

   -       IFRS 9 Financial Instruments (July 2014) - EU effective date 1 January 2018; 

- IFRS 15 Revenue from Contracts with Customers (May 2014) including amendments to IFRS 15 - EU effective date 1 January 2018;

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   2.2          New IFRS Standards and Interpretations (continued) 

Standards, amendments and interpretations (not yet endorsed by EU at 6 April 2017) (continued)

   -       IFRS 14 Regulatory Deferral Accounts (January 2014); 
   -       IFRS 16 Leases (January 2016); 

- Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (September 2014);

- Amendments to IAS 12: Recognition of Deferred Tax assets for Unrealised Losses (January 2016);

   -       Amendments to IAS 7: Disclosure Initiative (January 2016); 
   -       Classifications to IFRS 15: Revenue from Contracts with Customers (April 2016); 

- Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions (June 2016);

- Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (September 2016);

   -       Annual Improvements to IFRS Standards 2014-2016 Cycle (December 2016); 

- IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration (December 2016);

   -       Amendments to IAS 40: Transfers of Investment Property (December 2016). 

Except for those in issue but not yet adopted above that the Directors anticipate will have material effect on the reported income or net assets of the Group.

   2.3          Basis of consolidation and goodwill 

The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved where the Company: has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its return.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Where necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policies into line with the Group's accounting policies.

The consolidated financial statements have been prepared by using the principles of acquisition accounting ("the purchase method") which includes the results of the subsidiaries from their date of acquisition.

All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions are eliminated fully on consolidation.

Goodwill is the difference between the amount paid on the acquisition of a subsidiary company or a business and the aggregate fair value of the identifiable assets and liabilities acquired. Goodwill is capitalised as an intangible asset. In accordance with IFRS 3 'Business Combinations', goodwill is not amortised but tested for impairment annually or when there are any other indications that its carrying value is not recoverable.

Goodwill is therefore stated at cost less any provision for impairment in value. If a subsidiary undertaking is subsequently sold, goodwill arising on acquisition is taken into account in determining the profit and loss on sale. Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash generating units or groups of cash generating units that are expected to benefit from the business combination in which the goodwill arose.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

_____________________________________________________________________________________________

   2.4          Investment in associated undertaking 

Companies, other than subsidiary undertakings, in which the Group has an investment and over which it exerts significant influence but does not control, are treated as associated undertakings.

Investments in associated undertakings are equity accounted and carried in the Group statement of financial position at cost plus post acquisition changes in the Group's share of net assets of the associate, less any impairment in value.

Any goodwill arising on the acquisition of an associate, representing the excess of the cost of the investment compared to the Group's share of the net fair value of the associate's identifiable assets and liabilities, is included in the carrying amount of the associate. Goodwill on the acquisition of associates is not amortised.

The Group statement of profit or loss includes the Group's share of the associate's profit after tax. To the extent that losses of an associate exceed the carrying amount of the investment, the Group discontinues including its share of further losses and the investment is reported at nil value. Additional losses are only provided if the Group has an obligation to a third party.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss of the Group's investment in its associate at each period end date. The Group calculates the amount of impairment as being the difference between the fair value of the associate and the carrying value and recognises the amount in the profit or loss.

Unrealised gains on transactions between the Group and its associate are eliminated to the extent of the Group's interest in the associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the associate are changed where necessary to ensure consistency with the accounting policies of the Group.

The Parent Company's investment in its associate is included in the Company statement of financial position at cost, less any provision for impairment.

   2.5          Intangible assets 

Intangible assets of the Group consist of computer software and are capitalised at their cost and are amortised through administrative expenses on a straight-line basis over their expected useful lives of 5 years.

The carrying value of intangible assets is tested for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.

   2.6          Property, plant and equipment 

Freehold lands are stated at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be determined using fair values at the end of the reporting period. Fair value is based on periodic valuations made at least once in every five years and an interim valuation every three years based on management decision. Valuations are carried out by an independent external licensed valuer on an open market value basis. Any surplus or deficit arising on valuation is transferred directly to equity as a revaluation surplus in the property revaluation reserve, except for those deficits expected to be permanent, which are charged to profit or loss. Freehold lands are not depreciated.

Other property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.

Depreciation is calculated on a straight-line basis to write off the costs, less estimated residual values of each asset over its estimated useful lives, as follows:

                                   Buildings                                               10 - 50 years 
                                   Land improvements                             5 - 20 years 
                  Other assets                                          5 - 10 years 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

_____________________________________________________________________________________________

   2.6          Property, plant and equipment (continued) 

The carrying values of property, plant and equipment are tested for impairment if events or changes in circumstances indicate the carrying values may not be recoverable. Any impairment losses are recognised in the profit or loss.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each period end date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within the statement of profit or loss.

When revalued assets are sold, the amounts included in property revaluation reserves are transferred to retained earnings.

   2.7          Biological assets 

The Group's biological assets consist of oil palm tree plantations. According to IAS 41 'Agriculture', biological assets should be valued annually at their fair values. The gain or loss in fair value of biological assets is to be included in the profit or loss.

The Group has used IAS 41's cost model to value the biological assets because the Directors believe that fair values cannot be measured reliably as the trees on the plantations are mature (greater than 25 years old). At 31 December 2016 the costs of the biological assets have been fully depreciated. Even though the plantations are still producing income the Directors believe that any attempt to revalue the plantations to their fair values would not be reliable as market-determined prices or values are not readily available and alternative estimates of fair value are unreliable. The biological assets (i.e. the oil palm trees) are therefore carried in the Company's and Group's financial statements at a nil net book value.

The freehold estate land is carried at its fair value as discussed in note 2.6 above.

The harvested produce (fresh fruit bunches) are sold immediately after being harvested. Therefore the requirement under IAS 41 to value agricultural produce at market value as inventories does not apply.

   2.8          Investment property 

Investment property consists of investment in building that is held for long-term rental yield and/or for capital appreciation and is not occupied by the Group.

Investment property is stated at cost less accumulated depreciation and impairment losses. Depreciation for investment property is calculated using the straight-line method to allocate their cost over their estimated economic lives as follows:

                                   Leasehold building                              remaining lease period 

Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable amount.

Gains and losses on disposal are determined by comparing the net disposal proceeds with the carrying amount and are included in the profit or loss.

   2.9          Non-current asset held for sale 

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset and its sale is highly probable. Management must be committed to sale, which should be expected to qualify for recognition as a completed sale within a year from date of classification.

Non-current assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   2.10        Financial assets 

The Group classifies its financial assets in the following categories: fair value through profit or loss, held-to-maturity, short term investments, loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. At the end of the reporting period, the Group had all of the above except for assets with fair value through profit or loss and held-to-maturity.

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intent and ability to hold the assets to maturity. Investments intended to be held for an undefined period are not included in this classification. Other long-term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost using the effective interest method less any impairment.

Short term investments

Short term investments are investments in unquoted unit trust with licensed investment banks. After initial recognition, short term investments are measured at fair value with gains or losses being recognised in other comprehensive income and accumulated under investment revaluation reserve until the investment is derecognised or until the investment is determined to be impaired at which time the accumulate gain or loss previously reported in equity is included in the profit or loss. The fair value of the investments is measured at mark to market based on the net asset value at each reporting date.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are measured at amortised cost using the effective interest method less any impairment and are included in current assets, except for maturities greater than twelve months after the reporting period date. These are classified as non-current assets. The Group's loans and receivables comprise "trade and other receivables" and "cash and cash equivalents" in the statement of financial position.

Interest income is recognised by applying the effective interest rate except for short-term receivables when the recognition of interest would be immaterial.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within twelve months after the period end date.

Purchases and sales of financial assets are recognised on the trade-date; the date on which the Group commits to purchase or sell the assets. Investments are initially recognised at fair value plus transaction costs. Available-for-sale financial assets are subsequently carried at fair value with gains or losses being recognised in other comprehensive income and accumulated under investment revaluation reserve until the investment is derecognised or until the investment is determined to be impaired at which time the accumulate gain or loss previously reported in equity is included in the profit or loss. The fair value of investments that are traded in active market at the end of each reporting period is determined by reference to the relevant stock exchange's quoted market bid prices at the close of business on the reporting period date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.

   2.11        Parent Company investments in subsidiaries and associates 

The Parent Company's investments in subsidiaries and associated undertakings are included in the Company statement of financial position at cost less any provisions for impairments.

   2.12        Inventories 

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

No harvested fresh fruit bunches are held at year end, therefore, the requirement under IAS 41 'Agriculture' to value agricultural produce at market value does not apply.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

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   2.13        Cash and cash equivalents 

Cash and cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. For an investment to qualify as a cash equivalent it must be readily convertible to a known amount of cash and be subject an insignificant risk of changes in value. The amount in the statement of financial position is stated at cost, which is approximately equal to the fair value, and comprises cash in hand, cash at bank, short term deposits and short term investments.

   2.14        Impairment of non-current assets 

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the profit or loss in those expense categories consistent with the function of the impaired asset.

   2.15        Financial liabilities and equity 

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Financial liabilities include trade and other payables and bank borrowings.

Trade and other payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the company.

All borrowings and overdrafts are recorded at the amount of the proceeds received, net of direct issue costs. Finance charges are charged to the statement of profit or loss on an accruals basis using the effective interest rate method.

Equity instruments are recorded at the fair value of the consideration received, net of direct issue costs

   2.16        Revenue 

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable net of value added tax, returns, rebates or discounts and after eliminating sales with the Group.

Revenue derived from plantation activities represents the sale of oil palm fresh fruit bunches and is recognised on the accruals basis.

Revenue derived at manufacturing activities is recognised from sales when the goods are delivered, and the risks and rewards of ownership of the goods are transferred to buyers.

Revenue derived from resort activities represents room rentals, net of hotel room tax, and the sale of food and beverages. Accommodation revenue is recognised on the arrival of customers. Payments received in advance of the arrival of guests are included in current liabilities as accommodation rental received in advance.

Dividend income is recognised when the right to receive payments is established.

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

The Group's policy for recognition of revenue from operating leases is described in note 2.17 below.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

_____________________________________________________________________________________________

   2.17        Leases 

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases.

The Group as lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging as operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Group as lessee

Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

   2.18        Employee entitlements 

The liability for employees' compensation for unutilised leave is accrued in relation to services rendered by employees and relates to rights which have been vested. These amounts are not discounted.

The Group's contribution to a defined contribution plan is charged to the profit or loss in the period to which the contribution relates.

   2.19        Provisions 

Provisions are recognised when the Group has a legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, expected future cash flows are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.

Where the Group expects some or all of a provision to be reimbursed, for example under an insurance policy, the reimbursement is recognised as a separate asset but only when recovery is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. Where discounting is used, the increase in the provision due to unwinding of discount is recognised as a finance cost.

   2.20        Dividend distributions 

Dividend distributions proposed by the Board of Directors and unpaid at the year end are not recognised in the financial statements as a liability until they have been approved by the Company's shareholders at the AGM.

   2.21        Related parties 

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party, or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.

   2.22        Current and deferred income tax 

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the period end date and any adjustments to tax payable in respect of previous years.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the period end date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax liabilities are recognised for the temporary timing differences associated with subsidiaries, joint ventures and associates, but only where the Group is able to control the timing of the reversal of the temporary difference.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the assets can be utilised.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   2.22        Current and deferred income tax (continued) 

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of freehold lands measured at fair value is presumed to be recovered through sale after implementation of the Group business plan.

   2.23        Foreign currency translation 

Functional and presentational currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in 'Ringgit Malaysia' ('RM'), which is the Company's and the Group's functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss.

The assets, liabilities and the results of the foreign subsidiary undertakings are translated into Ringgit Malaysia at the rates of exchange ruling at the year end. Exchange differences resulting from the retranslation of net investments in subsidiary undertakings are treated as movements on reserves.

   3.            Significant accounting judgements and estimates 

In the process of applying the Group's accounting policies, which are described in note 2 above, the Directors have made the following judgments and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom exactly equal the related actual results. The estimates and assumptions that have a risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Carrying value of associate

The directors assess the fair value of the Group's investment in its associated undertaking, Concrete Engineering Products Berhad ("Cepco") is more than the carrying value. No impairment or reversal of impairment was recommended. The assessment was made by reference to the value-in-use of the associate to the Group.

The value-in-use calculation includes a discounted cash flow assessment model; the primary assumptions underlying the model were:

o Sales growth rate 3.80%

   o  Terminal value equal to Price Earnings ratio                                   15 

Additional assumptions utilised include:

   o  Duration of assessment period                                                          5 years 

o Discount rate of 6%

Depreciation, useful lives and residual values of property, plant & equipment

The Directors estimate the useful lives and residual values of property, plant & equipment in order to calculate the depreciation charges. Changes in these estimates could result in changes being required to the annual depreciation charges in the statement of profit or loss and the carrying values of the property, plant and equipment in the statement of financial position.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   3.            Significant accounting judgements and estimates (continued) 

Fair value measurements

A number of the group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The group has an established control framework with respect to the measurement of fair values. When measuring the fair value of an asset or a liability, the management uses market observable data as far possible. Where Level 1 inputs are not available, the Group engages third party qualified valuers to perform the valuation. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are included in the relevant notes.

Deferred tax asset

Deferred tax assets are recognised for all unutilised tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant judgment and measurement is required to determine the amount of deferred tax asset that can be recognised, based on the likely timing of future taxable profit together with future tax planning strategies. The carrying value of deferred tax assets recognised as at 31 December 2016 is RM Nil (2015: RM Nil) and the unrecognised tax losses as at 31 December 2016 is approximate RM7.0 million (2015: RM7.0 million) in respect of which the future economic benefit is uncertain. Further details are shown in note 8.

   4.            Segmental information 

The Group applies IFRS 8 'Operating Segments'. The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating decision maker. In identifying its operating segments, management generally follows the Group's service lines, which represent the main products and services provided by the Group.

The Group's operating businesses are organised and managed separately according to the nature of products produced and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

At 31 December 2016, the Group was organised into four operating segments as follows:

   --       Plantations - sale of fresh fruit bunches; 
   --       Manufacturing - producing constant viscosity (CV) rubber blocks; 
   --       Tourism - operation of two tourist resorts, sale of rooms and sale of food and beverages; 
   --       Others being: 

i) Property development and leasing - development and sale of land and properties and leasing of buildings;

   ii)    Trading - trading of building materials; and 
   iii)   Investment - holding of equity interests in quoted shares. 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   4.            Segmental information (continued) 

The segment results for the year ended 31 December 2016 are as follows:

 
                            Plantation    Tourism     Manufacturing     Others       Total 
                              RM'000       RM'000        RM'000         RM'000      RM'000 
                          ------------  ----------  ---------------  ----------  ----------- 
  Revenue 
  From external 
   customers                       266       8,395            2,049         124       10,834 
   Segment revenues                266       8,395            2,049         124       10,834 
 
  Finance income                     -          81                4       4,676        4,761 
  Other gains and 
   losses                           28          32                -           8           68 
  Share of profit 
   / (loss) of Cepco                 -           -                -       (170)        (170) 
  Depreciation 
   and amortisation               (45)       (959)            (453)        (60)      (1,517) 
  Tax expenses                       -       (352)                -           -        (352) 
  Other expenses 
   (net of other 
   income)                       (241)     (6,093)          (2,336)     (8,695)     (17,365) 
                          ------------  ----------  ---------------  ----------  ----------- 
  Segment profit/(loss)              8       1,104            (736)     (4,117)      (3,741) 
                          ------------  ----------  ---------------  ----------  ----------- 
 
  Segment assets               150,024      29,933            4,673     540,844      725,474 
                          ------------  ----------  ---------------  ----------  ----------- 
 
  Segment liabilities           24,431       1,907              154      62,541       89,033 
                          ------------  ----------  ---------------  ----------  ----------- 
 
  Other disclosures 
  Investment in 
   Cepco                             -           -                -      24,570       24,570 
  Capital expenditure            1,489       3,768               32      26,948       32,237 
   Tangible                      1,722           -                -           -        1,722 
   Assets under 
    construction                     9          47                -           -           56 
   Intangible 
 
 

Segment revenue reported above represents revenue generated from external customers. Inter-segment sales within the Group amounted to approximate RM1.52 million (2015: RM2.27 million).

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   4.             Segmental information (continued) 

The segmented results for the year ended 31 December 2015 are as follows:

 
                             Plantation    Tourism    Manufacturing    Others      Total 
                               RM'000      RM'000        RM'000        RM'000      RM'000 
                           ------------  ---------  ---------------  ---------  ---------- 
  Revenue 
  From external 
   customers                        376      6,744            3,016        153      10,289 
                           ------------  ---------  ---------------  ---------  ---------- 
 
    Segment revenues                376      6,744            3,016        153      10,289 
 
  Finance income                      -         92                -      4,462         4,554 
  Other gains 
   and losses                         -         61                -         81           142 
  Share of profit/(loss) 
   of Cepco                           -          -                -      4,598         4,598 
  Depreciation 
   and amortisation                (30)    (1,188)            (468)       (91)       (1,777) 
  Provision for 
   diminution in 
   value of stocks                               -             (81)          -          (81) 
  Tax expenses                        -        (7)                -       (36)          (43) 
  Other expenses 
   (net of other 
   income)                        (305)    (7,040)          (3,947)    (8,331)      (19,623) 
                           ------------  ---------  ---------------  ---------  ------------ 
  Segment profit/(loss)              41    (1,338)          (1,480)        836       (1,941) 
                           ------------  ---------  ---------------  ---------  ------------ 
 
  Segment assets                133,514      2,015            3,301    581,104       719,934 
                           ------------  ---------  ---------------  ---------  ------------ 
 
  Segment liabilities 
   (restated)                     1,238      2,223              100     78,064        81,625 
                           ------------  ---------  ---------------  ---------  ------------ 
 
 
 
    Other disclosures 
   Investment in 
    Cepco                                   -         -      -    24,740     24,740 
         Capital expenditure               35     1,804     36        96      1,971 
    Tangible                            3,675         -      -         -      3,675 
    Assets under 
     construction                          28         -      3         -         31 
    Intangible 
 
 

Geographic information

The Group operates in two principal geographical areas - Malaysia and Thailand.

The Group's revenue from continuing operations from external customers by location of operations and information about its non-current assets* by location of assets are detailed below.

 
                    Revenue from            Non-current 
                  external customers           assets 
                  2016         2015       2016       2015 
                 RM'000       RM'000     RM'000     RM'000 
 
  Malaysia          8,785       7,950    500,777    460,285 
  Thailand          2,049       2,339      2,141      2,202 
              -----------  ----------  ---------  --------- 
 
                   10,834      10,289    502,918    462,487 
              ===========  ==========  =========  ========= 
 
  *non-current assets for this purpose consist 
   of property, plant and equipment, investment 
   property and intangible assets. 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   4.         Segmental information (continued) 

Information about major customers

Included in revenues arising from manufacturing are revenues of approximately RM0.9 million (2015: RM1.2 million) which arose from sales to the Group's largest customer. No other single customers contributed 10% or more to the Group's revenue for both 2016 and 2015.

   5.         Other income and other gains and losses 
 
 
                                      Group              Company 
                                  2016      2015      2016      2015 
                                 RM'000    RM'000    RM'000    RM'000 
  Other income 
  Rebates from investment 
   in unit trust                    341       379       341       379 
  Sundry income                      12        61         -         - 
  Rental income from                  -        12         -         - 
   investment property 
  Other rental income               236       195        28        28 
  Management fee to 
   subsidiary                         -         -       300       300 
  Gain on foreign 
   exchange                          10      (29)         -       (8) 
  Insurance claim                     -         -         -         - 
  Interest for compensation        811*         -         -         - 
   received 
 
                                  1,410       618       669       699 
                               ========  ========  ========  ======== 
 
 

* Interest for compensation received on compulsory acquisition of the Company's land.

Other gains and losses

 
  Gain on sale of                  -      51      -       - 
   assets 
  (Loss)/gain on sale 
   of investment                   3    (98)      -    (87) 
  Cumulative gain 
   reclassified from 
   equity on redemption 
   of short term investment       65     189     36     167 
                               -----  ------  -----  ------ 
 
                                  68     142     36      80 
                               =====  ======  =====  ====== 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

__________________________________________________________________________________________________

   6.         Operating loss 
 
                                         Group                   Company 
                                     2016      2015           2016      2015 
                                    RM'000    RM'000         RM'000    RM'000 
 The operating loss 
  is stated after 
  charging/(crediting): 
 Auditors' remuneration:               240       200 
   - Parent Company 
   auditor                              54       146            240       200 
   - Subsidiaries' 
   auditor                                                        -         - 
 Depreciation                        1,463     1,761             33        16 
 Amortisation of 
  intangible assets                     54        16             12        14 
 Operating leases                      766       665            329       350 
 Staff costs (note 
  10)                                6,086     6,798          3,201     3,712 
 Bad debts written                       -         -              -         - 
  off 
 Loss/(gain) on foreign 
  exchange                            (10)        29              -         8 
 Provision for contingent                -         -              -         - 
  liability 
 Fixed assets written                    -         -              -         - 
  off 
 Loss from diminution                    -        81              -         - 
  in value of stocks 
                                  ========  ========       ========  ======== 
 

The non-audit fees paid to the Company's external auditors amounted to RM2,202 for the financial year 2016 (2015: RM3,457).

Direct operating expenses from investment property that generated rental income for the Group during the financial year amounted to RM3,125 (2014: RM2,517).

   7.            Finance income and costs 
 
                                   Group              Company 
                               2016      2015      2016      2015 
                              RM'000    RM'000    RM'000    RM'000 
  Finance income 
  Short term deposits          1,785       825     1,780       823 
  Short term investments       2,976     3,729     2,896     3,639 
 
 
                               4,761     4,554     4,676     4,462 
                            ========  ========  ========  ======== 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

_____________________________________________________________________________________________

   8.             Taxation 
   8.1          Income taxes recognised in profit and loss 

The tax charge is made up as follows:

 
                                                                   Group              Company 
                                                               2016      2015      2016      2015 
                                                              RM'000    RM'000    RM'000    RM'000 
  In Malaysia 
 
   *    Current taxation                                         352        41         -         - 
 
   *    Under/(over) provision in respect of prior years           -         2         -         - 
 
                                                                 352        43         -         - 
                                                            ========  ========  ========  ======== 
 

Other than the subsidiary in Thailand which is a tax resident there, the Company and the Group are tax residents in Malaysia. The Group is liable to corporation tax in Malaysia and Thailand but is not subject to United Kingdom corporation tax. The Group's effective tax rate differs from the standard rate of corporation tax in Malaysia of 24% (2015: 25%) as follows:

 
                                    Group                Company 
                               2016       2015       2016       2015 
                              RM'000     RM'000     RM'000     RM'000 
 
 Loss before taxation         (3,389)    (1,898)    (3,406)    (2,903) 
 
  Tax credit at standard 
   corporation tax 
   rate in Malaysia 
   of 24% (2014: 25%)           (813)      (474)      (818)      (726) 
 
  Tax effects of: 
 Expenses not deductible 
  for tax purposes                951      1,545        689        435 
 Income not subject 
  to tax                        (733)      (188)      (704)       (20) 
 Utilisation of business 
  losses                        1,084        (8)        857          - 
 Temporary timing 
  differences not 
  recognised                    (137)      (834)       (24)        311 
 Under/(over) provision             -          2 
  in respect of prior                                     -          - 
  years 
                            ---------  ---------  ---------  --------- 
 
  Total tax charge 
   for year                       352         43          -          - 
                            =========  =========  =========  ========= 
 
   8.2          Income taxes recognised in other comprehensive income 

The tax charge relating to components of other comprehensive income is as follows:

 
                                       Group                Company 
                                   2016        2015      2016       2015 
                                 RM'000      RM'000    RM'000     RM'000 
 
  Fair value gain 
   on freehold land 
 Before tax                       7,500      16,742         -      5,000 
 Tax charge                     (1,800)     (4,185)         -    (1,250) 
                              ---------  ----------  --------  --------- 
 
 After tax                        5,700      12,557         -      3,750 
                              ---------  ----------  --------  --------- 
 
  Other comprehensive 
   income                         5,700      12,557         -      3,750 
                              =========  ==========  ========  ========= 
 
  Deferred tax liabilities        1,800       4,185         -      1,250 
                              =========  ==========  ========  ========= 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

_____________________________________________________________________________________________

   8.             Taxation (continued) 
   8.3          Deferred tax balances 

The estimated deferred tax assets at 24% (2015: 25%) not recognised in these financial statements are as follows:

 
                              Group              Company 
                          2016      2015      2016      2015 
                         RM'000    RM'000    RM'000    RM'000 
 
  Arising from: 
  Unused tax losses       6,842     7,033     6,501     5,744 
 Unutilised capital 
  allowances                210       494        73        49 
                       --------  --------  --------  -------- 
 
                          7,052     7,527     6,574     5,793 
                       ========  ========  ========  ======== 
 

The key factors that may affect future tax charges include the ability to claim capital allowances in excess of depreciation, utilisation of unrelieved tax losses and changes in tax legislation. The Group expects to be able to claim capital allowances in excess of depreciation in future years based on its capital investment plans. The Group also has unutilised tax losses estimated to be RM28.5 million (2015: RM28 million ) which arise mainly in relation to activities in Malaysia and which may generally be carried forward without time limits applying. The availability of the unused tax losses for offsetting against future taxable profits of the Company and its subsidiaries are subject to there being no substantial changes in shareholdings of the Company and its subsidiaries under Section 44 (5A) & (5B) of Income Tax Act, 1967 in Malaysia.

As for the subsidiary in Thailand, the unutilised tax losses is estimated to be THB68.6 million (approximate RM8.2 million) (2015: THB64.7 million (approximate RM7.7 million)) which may be carried forward for a maximum of five (5) years.

The revaluation of available-for-sale investments and short term investments that has been reported as part of other comprehensive income on page 36 of these financial statements is not shown net of taxation. This is on the basis that the Group and the Company have unutilised losses which exceed the revalued amount. Unused tax losses carried forward at the end of reporting period, which is disclosed above, have been reduced correspondingly.

As disclosed in note 12, freehold lands have been revalued, and a revaluation surplus arises. Deferred tax has been provided in respect of the revaluation surplus where the carrying amount of freehold lands is presumed to be recovered through sale after implementation of the Group business plan.

The analysis of deferred tax liabilities is as follows:

 
                                     Group                  Company 
                                2016        2015        2016        2015 
                               RM'000      RM'000      RM'000      RM'000 
 
 
 Deferred tax liabilities 
  due more than 12 months       77,578      76,028      22,900      22,900 
 Deferred tax liabilities            -           -           -           - 
  due within 12 months 
                            ----------  ----------  ----------  ---------- 
 
                                77,578      76,028      22,900      22,900 
                            ==========  ==========  ==========  ========== 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

_____________________________________________________________________________________________

   8.3          Deferred tax balances (continued) 

The movement in deferred tax liabilities during the year, without taking consideration the offsetting of balances within same jurisdiction, is as follow:

 
                                          Group                  Company 
                                     2016        2015        2016        2015 
                                    RM'000      RM'000      RM'000      RM'000 
 
 
  At 1 January                       76,028      71,843      22,900      21,650 
  Adjustment                          (250)           -           -           - 
 Charge to other comprehensive 
  income                              1,800       4,185           -       1,250 
                                 ----------  ----------  ----------  ---------- 
 
   At 31 December                    77,578      76,028      22,900      22,900 
                                 ==========  ==========  ==========  ========== 
 
   9.            Loss per share 

The calculation of loss per share is based on the Group's loss for the year and the weighted average number of shares in issue after adjusting for movement in treasury shares during the financial year. There are no potential dilutive shares or share options outstanding and therefore, the diluted loss per share is the same as basic loss per share.

 
 
                                         2016       2015 
  Net loss attributable to 
   the owners of the Company 
   (RM'000)                             (3,741)    (1,941) 
                                      ---------  --------- 
 
  Weighted average number of 
  ordinary shares in issue 
  after adjusting for movement 
  in treasury shares [Number 
  of shares ('000)]                     403,209    403,209 
                                      ---------  --------- 
 
  Basic and diluted loss per 
   share (Sen)                          (0.93)     (0.48) 
                                      ---------  --------- 
 
   10.          Employee information 
 
                                    Group              Company 
                                2016      2015      2016      2015 
                               RM'000    RM'000    RM'000    RM'000 
  Staff costs comprises: 
 
  Wages and salaries            5,738     6,406     3,050     3,558 
 Contribution to 
  a statutory 
     employees' provident 
      fund                        348       392       151       154 
 
                                6,086     6,798     3,201     3,712 
                             ========  ========  ========  ======== 
 

The decrease of Group wages and salaries in 2016 is due to less number of staff employed.

The statutory employees' provident fund is a defined contribution scheme funded by a government body in Malaysia.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

________________________________________________________________________________________

   10.          Employee information (continued) 

The average monthly number of employees employed by the Group during the year was as follows:

 
                                Group              Company 
                            2016      2015      2016      2015 
                           Number    Number    Number    Number 
 
  Plantation                   20        20        20        20 
  Tourism                     113       121         -         - 
 Manufacturing                 31        32         -         - 
 Property development 
  and leasing                   6         5         -         - 
 Investment                     2         2         2         2 
                         --------  --------  --------  -------- 
                              172       180        22        22 
                         ========  ========  ========  ======== 
 
   11.          Directors' emoluments 
 
                             Group                   Company 
                         2016        2015        2016         2015 
                        RM'000      RM'000      RM'000       RM'000 
 
 Directors' fees 
  & allowances               220       190           191       190 
                        ========  ========      ========  ======== 
 
  Highest paid 
   Director                   46        46            46          46 
                    ============  ========  ============  ========== 
 
 

The above emoluments are made up as follows:

 
                        Basic 
                       Salary      Meeting       Total      Total 
                          & 
                        Fees      Allowances     2016       2015 
                        (RM)         (RM)        (RM)       (RM) 
-------------------  ---------  ------------  ---------  --------- 
 
  Non-Executive 
   Directors 
  Dato' Adnan bin 
   Maaruf               40,000         6,000     46,000     46,000 
  Datuk Kamaruddin 
   bin Awang            30,000         6,750     36,750     38,250 
  Dato' Haji Muda 
   bin Mohamed          30,000         7,000     37,000     37,000 
  Dato' Tik bin 
   Mustaffa             30,000         7,000     37,000     35,750 
  Dr. Radzuan bin 
   A. Rahman            30,000         4,500     34,500     33,000 
-------------------             ------------  ---------  --------- 
                       160,000        31,250    191,250    190,000 
===================  =========  ============  =========  ========= 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

________________________________________________________________________________________

   12.          Property, plant and equipment 
 
 
    Group                    Freehold           Prepaid           Buildings         Assets          Others      Total 
                              lands            land and                              under 
                                           land improvements                     construction 
                             RM'000            RM'000             RM'000           RM'000          RM'000     RM'000 
  Cost or valuation 
  At 1 January 
   2015                       432,852                  3,590         19,921              1,054       8,775    466,192 
  Additions                         -                      -          1,342              3,675         629      5,646 
  Revaluations                 16,742                      -              -                  -           -     16,742 
  Disposals                         -                                     -                  -        (10)       (10) 
  Exchange differences             29                     49            255                  -         378        711 
                         ------------  ---------------------  -------------  -----------------  ----------  --------- 
 
  At 1 January 
   2016                       449,623                  3,639         21,518              4,729       9,772    489,281 
  Additions                    20,000                  6,948          3,359              3,075         577     33,959 
  Revaluations                  7,500                      -              -                  -           -      7,500 
  Disposals                         -                      -              -                  -        (20)       (20) 
  Exchange differences             14                     23            117                  -         174        328 
                         ------------  ---------------------  -------------  -----------------  ----------  --------- 
 
  At 31 December 
   2016                       477,137                 10,610         24,994              7,804      10,503    531,048 
                         ------------  ---------------------  -------------  -----------------  ----------  --------- 
 
  Accumulated depreciation 
  At 1 January 
   2015                             -                  1,129         16,311                  -       7,040     24,480 
  Charge for the 
   year                             -                     39          1,080                  -         641      1,760 
  On disposals                      -                      -              -                  -         (3)        (3) 
  Exchange differences              -                     48            248                  -         367        663 
 
  At 1 January 
   2016                             -                  1,216         17,639                  -       8,045     26,900 
  Charge for the 
   year                             -                     36            562                  -         865      1,463 
  On disposals                      -                      -              -                  -        (20)       (20) 
  Exchange differences              -                     23            115                  -       (161)       (23) 
                         ------------  ---------------------  -------------  -----------------  ----------  --------- 
 
  At 31 December 
   2016                             -                  1,275         18,316                  -       8,729     28,320 
                         ------------  ---------------------  -------------  -----------------  ----------  --------- 
 
  Carrying amount 
   At 31 December 
   2016                       477,137                  9,335          6,678              7,804       1,774    502,728 
                         ============  =====================  =============  =================  ==========  ========= 
 
  At 31 December 
   2015                       449,623                  2,423          3,879              4,729       1,727    462,381 
                         ============  =====================  =============  =================  ==========  ========= 
 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

___________________________________________________________________________________________

   12.       Property, plant and equipment (continued) 

Fair value measurement of the Group's and Company's freehold lands

The Group's freehold lands are stated at their revalued amounts, being the fair value at the date of revaluation. In order to establish the 31 December 2016 valuation of the Group's freehold lands, valuations were obtained.

The fair value measurement of the Group's freehold lands in Kajang and Bangi as at 31 December 2016 and 31 December 2015 were performed by Nilai Properties Consultants Sdn Bhd (V(1) 0065), an independent valuer not related to the Group, using the open market basis method. These lands are currently being used for the Group's plantation activities for growing of oil palm fresh fruit bunches. The Group has been given consent for the change of use of the lands. Further commentary on the Group's plans for its land is included in the Chairman's Statement.

In the opinion of the Directors, there is no indication of any significant difference between the carrying amount and market values of the other freehold lands of the Group at 31 December 2016.

The historical cost of the above freehold lands of the Group is RM107.242 million and of the Company is RM0.407 million. There are no restrictions on the title of the Group's property, plant and equipment.

The fair values of all the freehold lands of the Group and Company are classified as Level 2. There were no transfers between Levels 1 and 2 during the year.

Assets under construction

This represents 22 units of low cost terrace houses under construction at Dunedin estate, Mukim of Semenyih. The total contract sum is approximate RM6 million. The construction is completed pending the issuance of certificate of occupancy which is expected to be obtained in second half of year 2016, now extended to late 2017.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

___________________________________________________________________________________________

   12.          Property, plant and equipment (continued) 
 
  Company                      Freehold    Buildings       Assets        Others     Total 
                                 lands                      under 
                                                         construction 
                                RM'000      RM'000         RM'000        RM'000     RM'000 
  Cost or valuation 
  At 1 January 2015             110,000          477            1,054       406     111,937 
  Additions                           -            -            3,675        35       3,710 
  Revaluations                    5,000            -                -         -       5,000 
  Disposals                           -            -                -         -           - 
 
  At 1 January 2016             115,000          477            4,729       441     120,647 
  Additions                           -            -            3,075       135       3,210 
  Revaluations                        -            -                -      (20)        (20) 
   At 31 December 
    2016                        115,000          477            7,804       556     123,837 
                             ----------  -----------  ---------------  --------  ---------- 
 
  Accumulated depreciation 
  At 1 January 2015                   -          477                -       380         857 
  Charge for the 
   year                               -            -                -        16          16 
   On disposals                       -            -                -         -           - 
 
  At 1 January 2016                   -          477                -       396         873 
  Charge for the 
   year                               -            -                -        33          33 
  On Disposal                         -            -                -      (20)        (20) 
 
  At 31 December 
   2016                               -          477                -       409         886 
                             ----------  -----------  ---------------  --------  ---------- 
 
  Carrying amount 
  At 31 December 
   2016                         115,000            -            7,804       147     122,951 
                             ==========  ===========  ===============  ========  ========== 
 
  At 31 December 
   2015                         115,000            -            4,729        45     119,773 
                             ==========  ===========  ===============  ========  ========== 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

____________________________________________________________________________________________

   13.          Investment Property 
 
  Group                         31 December    31 December 
                                    2016           2015 
                                  RM'000         RM'000 
  Cost 
  At 1 January                          100            100 
  Addition / (Disposal)                   -              - 
                              ------------- 
   At 31 December                       100            100 
                              -------------  ------------- 
 
  Accumulated depreciation 
  At 1 January                           29             28 
  Charge for the year                     2              1 
                              ------------- 
 
  At 31 December                         31             29 
                              -------------  ------------- 
 
  Carrying amount 
  At 31 December                         69             71 
                              =============  ============= 
 

Included in investment property is apartment at Amber Tower Seri Mas Condominium, Cheras, Kuala Lumpur.

The investment property is valued at cost less accumulated depreciation. The fair value of the investment property is estimated at RM0.3 million.

   14.       Intangible assets 

Computer software and corporate website creation

 
                             Group              Company 
                         2016      2015      2016      2015 
                        RM'000    RM'000    RM'000    RM'000 
 
  Cost 
  At 1 January             200        75        99        71 
 Additions                  55        31         9        28 
  Disposals                  -         -         -         - 
                      --------  --------  --------  -------- 
 
    At 31 December         255       106       108        99 
                      --------  --------  --------  -------- 
 
  Accumulated 
   amortisation 
  At 1 January              80        55        67        53 
  Amortisation 
   for the year             54        16        12        14 
  On disposals               -         -         -         - 
                      --------  --------  --------  -------- 
 
    At 31 December         134        71        79        67 
                      --------  --------  --------  -------- 
 
  Carrying amount 
  At 31 December           121        35        29        32 
                      ========  ========  ========  ======== 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

____________________________________________________________________________________________

   15.          Investments in subsidiaries 
 
                                             Company 
                                         2016       2015 
                                        RM'000     RM'000 
  Cost 
  Shares in subsidiary undertakings       6,338      6,338 
  Provision for impairment loss 
   on investment in subsidiary          (5,338)    (5,338) 
  Loans to subsidiary undertakings      247,539    243,044 
  Allowance for doubtful debts          (6,969)    (6,969) 
                                      ---------  --------- 
 
                                        241,570    237,075 
                                      =========  ========= 
 

The loans to subsidiary undertakings are interest free and have no fixed repayment terms.

The subsidiaries of the Group are as follows:

 
  Name of company                   Country             Nature           Type          Percentage 
                                       of             of business          of          of % share 
                                 incorporation                          holding          capital 
                                                                                          held 
                                                                                     2016      2015 
  Inch Kenneth 
   Hotels & Resorts                                   Investment       Ordinary 
   (M) Sdn Bhd                     Malaysia             holding          shares        100       100 
 
  Perhentian Island                                    Operation 
   Resort Sdn Bhd                                      of tourist      Ordinary 
   #                               Malaysia              resort          shares        100       100 
 
  Inch Kenneth                                         Property 
   Development                                        development      Ordinary 
   (M) Sdn Bhd                     Malaysia           and leasing        shares        100       100 
 
  IKKR Timur Sdn                   Malaysia             Dormant        Ordinary        100         - 
   Bhd (formerly                                                         shares 
   known as Saujana 
   Residensi Sdn 
   Bhd) 
 
  Inch Kenneth 
   Trading (M)                                                         Ordinary 
   Sdn Bhd #                       Malaysia             Dormant          shares        100       100 
 
  IKK Property                                                         Ordinary 
   (M) Sdn Bhd#                    Malaysia             Dormant          shares        100       100 
 
  Inch Kenneth 
   Plantations                                                         Ordinary 
   (M) Sdn Bhd                     Malaysia             Dormant          shares        100       100 
 
  Inch Kenneth 
   Sea Sports Adventure 
   (M) Sdn Bhd                                                         Ordinary 
   #                               Malaysia             Dormant          shares        100       100 
 
                                                       Trading 
  IKK Rubber International                            of rubber        Ordinary 
   (M) Sdn Bhd                     Malaysia             blocks          Shares         100     100 
 
                                                    Manufacturing 
  Supara Company                                      of rubber        Ordinary 
   Limited #                       Thailand            blocks           Shares         100     100 
 
  Motel Desa Sdn                                      Operation        Ordinary 
   Bhd #                           Malaysia           of a motel        shares         100     100 
 
  Inch Kenneth 
   Tours (M) Sdn                                                       Ordinary 
   Bhd #                           Malaysia            Dormant          shares         100     100 
 
 

# These subsidiaries are held indirectly by the Company.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

________________________________________________________________________________________

   16.          Investment in associated undertaking 

Group

The Group's investment in its associated undertaking represents a 22.40% (2015: 22.40%) interest in Concrete Engineering Products Berhad ("Cepco"), a public company incorporated in Malaysia. The principal activity of Cepco is the manufacture and distribution of prestressed spun concrete piles and poles. The Group's investment in Cepco is accounted for under the equity accounting method as follows:

 
                                     2016        2015 
                                    RM'000      RM'000 
  Shares 
 
  At 1 January and 31 December       40,914      40,914 
                                 ==========  ========== 
 
  Share of retained profits 
  At 1 January                       15,441      10,843 
  Share of profit /(loss)             (170)       4,598 
                                 ----------  ---------- 
 
  At 31 December                     15,271      15,441 
                                 ==========  ========== 
 
  Share of dividend 
  At 1 January                      (1,104)     (1,104) 
  Share of dividend                       -           - 
                                 ----------  ---------- 
 
  At 31 December                    (1,104)     (1,104) 
 
  Accumulated impairment 
  At 1 January                     (30,511)    (30,511) 
  Impairment charge                       -           - 
                                 ----------  ---------- 
 
  At 31 December                   (30,511)    (30,511) 
                                 ----------  ---------- 
 
  Carrying amount                    24,570      24,740 
                                 ==========  ========== 
 
 
 
  The Group's share of the net assets        2016        2015 
   of Cepco is as follow: 
                                            RM'000      RM'000 
  Share of assets 
  Share of non-current assets                19,907      19,290 
  Share of current assets                    33,952      31,243 
                                         ----------  ---------- 
 
                                             53,859      50,533 
                                         ----------  ---------- 
 
  Share of liabilities 
  Share of non-current liabilities          (3,076)     (2,338) 
  Share of current liabilities             (24,706)    (21,948) 
                                         ----------  ---------- 
 
                                           (27,782)    (24,286) 
                                         ----------  ---------- 
 
  Share of net assets                        26,077      26,247 
  Goodwill (net of impairment) arising 
   on the acquisition of Cepco              (1,507)     (1,507) 
   Carrying value of Cepco                   24,570      24,740 
                                         ==========  ========== 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

________________________________________________________________________________________

   16.          Investment in associated undertaking (continued) 

Group (continued)

The Group's share of the results of Cepco is as follow:

 
                                             2016      2015 
                                            RM'000    RM'000 
 
  Share of revenue                          40,796    52,186 
                                          ========  ======== 
 
  Share of operating profit/(loss)             771     5,622 
  Share of finance costs                     (700)     (712) 
  Share of taxation                          (241)     (312) 
                                          --------  -------- 
 
  Share of profit/(loss) which included 
   in Group statement of profit or 
   loss                                      (170)     4,598 
                                          ========  ======== 
 

Cepco's shares are quoted on the Bursa Securities and the market value of the Group's investment in Cepco at the end of reporting period was RM15.548 million (2015: RM18.256 million).

The financial year end for Cepco is 31 August while for the Group it is 31 December. In order to equity account for the associate as at 31 December the result from 1 September to 31 December is added to the results for the year ended 31 August 2016 while the results for the period in the prior year are deducted. Accordingly the accounting period used to equity account for Cepco is the same as the financial year for the Group.

Company

The movement in the Company's investment in Cepco is as follows:

 
                                    2016      2015 
                                   RM'000    RM'000 
  Cost 
  At 1 January and 31 December     40,236    40,236 
                                 ========  ======== 
 
 
  Accumulated impairment 
  At 1 January                 22,090      22,090 
  Impairment charge                 -           - 
                           ----------  ---------- 
 
                               22,090      22,090 
                           ==========  ========== 
 
  Carrying amount              18,146      18,146 
                           ==========  ========== 
 
   17.          Available-for-sale investments 
 
                                    Group                Company 
                               2016       2015       2016       2015 
                               RM'000     RM'000     RM'000     RM'000 
 
  Quoted shares: 
  At 1 January                     66         57          7         20 
  Disposal of investments           1          -          -          - 
  Fair value adjustments          (1)         27          5        (7) 
 
  At 31 December                   66         84         12         13 
                            =========  =========  =========  ========= 
 

The above available-for-sale investments are stated at their fair values. The historical cost of the above investments of the Group is RM182,000 and of the Company is RM92,000.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

________________________________________________________________________________________

   18.          Goodwill 

Group

 
                                   2016         2015 
                                   RM'000      RM'000 
  At cost 
  At 1 January and 31 December      4,573      4,573 
                                 ========  ========= 
 
 

Accumulated impairment

 
  At 1 January and 31 December     (4,502)    (4,502) 
  Impairment charge                   (71)          - 
                                 ---------  --------- 
                                   (4,573)    (4,502) 
                                 =========  ========= 
 
 
 Carrying amount       -    71 
                   =====  ==== 
 

The Group has tested goodwill for impairment in accordance with IAS 36. A full provision for impairment has been recommended for the financial year ended 31 December 2016.

   19.          Inventories 
 
                         Group              Company 
                     2016      2015      2016      2015 
                    RM'000    RM'000    RM'000    RM'000 
 
  Resort stores         86        62         -         - 
  Rubber blocks        950     1,493         -         - 
 
                     1,036     1,555         -         - 
                  ========  ========  ========  ======== 
 

No harvested fresh fruit bunches are shown as inventory at the year end because they are all sold immediately after being harvested.

The amount stated at the estate and the resort is within the normal inventories level.

   20.       Trade and other receivables 
 
                                        Group                Company 
                                   2016       2015       2016       2015 
                                   RM'000     RM'000     RM'000     RM'000 
 
  Trade receivables                   372        381          8         10 
  Other receivables 
   and prepayments                 74,457     92,409        812        259 
  Corporation tax recoverable       1,050      1,030      1,030      1,030 
 
                                   75,879     93,820      1,850      1,299 
                                =========  =========  =========  ========= 
 

At 31 December 2016, included in other receivables approx. RM72 million was a settlement signed to acquire a leasehold industrial land with an area approximate 8.75 acres (Plot 64006 of Parent Lot PT 16708) in Mukim Petaling, which is expected to be registered to the Group in 2017.

Included in other receivables in 2015 was RM11.3 million as deposit for the acquisition of land and building, where a key management personnel of the Group is a Director (Note 25) and an amount of RM6.9 million related to consideration paid for land acquired. Both are now transferred to non-current assets and in the process of being registered titles to the Group.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

________________________________________________________________________________________

   20.       Trade and other receivables (continued) 

At 31 December 2016 the trade and other receivables balances are mainly incurred during the normal course of business. The receivables outside their payment terms yet not provided for are as follows:

 
  Within credit terms      72,204    87,747      8     10 
  Outside credit terms 
   but not impaired: 
   0-1 month                    -        27      -     10 
   1-2 months                   -         -      -      - 
   More than 2 months       2,625     5,016    812    249 
                         --------  --------  -----  ----- 
                           74,829    92,790    820    269 
                         ========  ========  =====  ===== 
 

The directors are of the opinion that the receivables, both within and outside the credit terms, are creditworthy and there should be no issues on its recoverability.

   21.       Short term investments 
 
                                Group                Company 
                           2016       2015       2016       2015 
                           RM'000     RM'000     RM'000     RM'000 
 
  Investments on unit 
   trusts with: 
  Licensed investment 
   banks                   93,875    110,422     91,819    107,940 
                        =========  =========  =========  ========= 
 

Unquoted unit trusts are measured at mark to market based on the net asset value at each reporting date. The time weighted rate of return of these investments at the reporting date were between 2.6% and 4.6% (2015: 2.6% to 4.1%).

   22.       Cash and cash equivalents 
 
                                  Group              Company 
                              2016      2015      2016      2015 
                             RM'000    RM'000    RM'000    RM'000 
 
  Cash at bank                2,377     2,763       711       558 
  Cash in hand                   67        66         1         1 
  Deposits with licensed 
   banks                     23,407    22,683    23,362    22,640 
  Investments with 
   licensed banks             1,279     1,243     1,108     1,076 
                           --------  --------  --------  -------- 
                             27,130    26,755    25,182    24,275 
                           ========  ========  ========  ======== 
 

The effective interest rates of deposits at the reporting date were between 1.9% and 3.6% (2015: 1.8% to 3.5%). Included in deposits with licensed banks is the short term deposits totalling to RM27,588 (2015: RM27,588) which was pledged with commercial banks as collateral for issuing letters of guarantee.

The investments with licensed banks are qualified as a cash equivalent as they are readily convertible to a known amount of cash with an insignificant risk of changes in value.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

___________________________________________________________________________________________

   23.          Share capital 
 
  Group and Company 
                                     2016       2015 
                                    GBP'000    GBP'000 
  Authorised 
  1,000,000,000 ordinary shares 
   of 10p each                      100,000    100,000 
                                  =========  ========= 
 
 
                                    2016        2015       2016       2015 
                                   RM'000      RM'000     GBP'000    GBP'000 
  Allotted, called up 
   and fully paid 420,750,000 
   ordinary shares of 
   10p each                        287,343     287,343     42,075     42,075 
                                ==========  ==========  =========  ========= 
 

No ordinary shares were allotted during the year and the Company does not have any share options or share warrants in issue at 31 December 2016.

   24.          Treasury shares 
 
   Group and 
    Company 
                                  2016                        2015 
                          Number                      Number 
                         of shares      Amount       of shares      Amount 
                      ------------  ------------  ------------  ------------ 
                                          RM                          RM 
 
  At 1 January 
   and 31 December      17,540,800    15,979,529    17,540,800    15,979,529 
                      ============  ============  ============  ============ 
 

The shareholders of the Company approved an ordinary resolution at the One Hundred and Sixth AGM held on 24 May 2016 for the Company to repurchase its own shares up to a maximum of 10% of the issued and paid-up capital of the Company ("Share Buy Back"). The Directors of the Company are committed to enhancing the value of the Company and believe that the purchase plan is being implemented in the best interest of the Company and its shareholders.

During the financial year, the Company did not repurchase any of its issued share capital. Pursuant to the provisions of Section 127(1) of the Companies Act 2016 (the "Act"), the Company may either retain the repurchased shares as treasury shares or cancel the repurchased shares or a combination of both. The repurchased shares held as treasury shares may either be distributed as share dividends, resold on Bursa Securities in accordance with the relevant rules of Bursa Securities, subsequently cancelled or any combination of the three.

As treasury shares, the rights attached as to voting, dividends and participation in other distribution and otherwise are suspended and the treasury shares shall not be taken into account in calculating the number or percentage of shares or of a class of shares for any purposes including substantial shareholdings, takeovers, notices, the requisitioning of meetings, the quorum for a meeting and the result of a vote on a resolution at a meeting.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   25.          Trade and other payables 
 
                          Group              Company 
                      2016      2015      2016      2015 
                     RM'000    RM'000    RM'000    RM'000 
 
  Trade payables        168       211         -         8 
  Other payables     11,197     5,296     1,516     1,230 
                   --------  --------  --------  -------- 
                     11,365     5,507     1,516     1,238 
                   ========  ========  ========  ======== 
 

The normal trade credit terms granted to the Group ranges from 7 to 90 days.

Employee entitlements

 
  Group and Company 
                                      Provision 
                                     for employee 
                                     entitlements 
                                       RM'000 
 
 At 1 January and 31 December 
  2016                                         15 
                                 ================ 
 

During the year, a freehold land and building was acquired by the Group at RM20 million with a deferred consideration of RM5.35 million was included in other payables, where a key management personnel of the Group is a Director of the selling company.

   26.          Financial instruments 
   26.1        Capital risk management 

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group is not subjected to any externally imposed capital requirement.

   26.2        Classification of financial instruments 

Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The principal accounting policies of the Group described how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised, The following table analysed the financial assets and liabilities at the reporting date by the classes of financial instruments to which they are assigned, and therefore by the measurement basis.

Group

 
                                        Loans    Available-for-sale        Financial 
                              and receivables           investments      liabilities 
                                                                        at amortised      Total 
                                                                                cost 
  31 December 2016                     RM'000                RM'000           RM'000     RM'000 
 
  Financial Assets 
  Available-for-sale 
   investments                              -                    66                -         66 
  Trade and other 
   receivables                         75,879                     -                -     75,879 
  Short term investments                    -                93,875                -     93,875 
  Cash and cash 
   equivalents                         27,130                     -                -     27,130 
                                      103,009                93,941                -    196,950 
                           ==================  ====================  ===============  ========= 
 
 
 
 
    Financial Liabilities 
  Trade and other 
   payables                    -     -    11,365    11,365 
    -                                -    11,365    11,365 
 ====  ===============================  ========  ======== 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   26.          Financial instruments (continued) 
   26.2        Classification of financial instruments (continued) 

Group

 
                                 Loans and    Available-for-sale        Financial 
                               receivables           investments      liabilities 
                                                                     at amortised      Total 
                                                                             cost 
  31 December                       RM'000                RM'000           RM'000     RM'000 
   2015 
 
  Financial Assets 
  Available-for-sale 
   investments                           -                    84                -         84 
  Trade and other 
   receivables                      93,820                     -                -     93,820 
  Short term investments                 -               110,422                -    110,422 
  Cash and cash 
   equivalents                      26,755                     -                -     26,755 
                                   120,575               110,506                -    231,081 
                            ==============  ====================  ===============  ========= 
 
 
 
 
  Financial Liabilities 
  Trade and other 
   payables                  -     -    5,507    5,507 
                          ----  ----  -------  ------- 
    -                              -    5,507    5,507 
 ====  =============================  =======  ======= 
 

C

Company

 
                                        Loans    Available-for-sale        Financial 
                              and receivables           investments      liabilities 
                                                                        at amortised      Total 
                                                                                cost 
  31 December 2016                     RM'000                RM'000           RM'000     RM'000 
 
  Financial Assets 
  Available-for-sale 
   investments                              -                    12                -         12 
  Trade and other 
   receivables                          1,850                     -                -      1,850 
  Short term investments                    -                91,819                -     91,819 
  Cash and cash 
   equivalents                         25,182                     -                -     25,182 
                           ------------------  --------------------  ---------------  --------- 
                                       27,032                91,831                -    118,863 
                           ==================  ====================  ===============  ========= 
 
 
 
 
  Financial Liabilities 
  Trade and other 
   payables                       -          -    1,516      1,516 
                           --------  ---------  -------  --------- 
                                  -          -    1,516      1,516 
                           ========  =========  =======  ========= 
 
  31 December 2015 
 
  Financial Assets 
  Available-for-sale 
   investments                    -         13        -         13 
  Trade and other 
   receivables                1,299          -        -      1,299 
  Short term investments          -    107,940        -    107,940 
  Cash and cash 
   equivalents               24,275          -        -     24,275 
                           --------  ---------  -------  --------- 
                             25,574    107,953        -    133,527 
                           ========  =========  =======  ========= 
 
 
 
 
    Financial Liabilities 
  Trade and other 
   payables                    -     -    1,238    1,238 
                            ----  ----  -------  ------- 
    -                                -    1,238    1,238 
 ====  ===============================  =======  ======= 
 
 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   26.          Financial instruments (continued) 
   26.3        Financial risk management objectives and policies 

The Group's principal financial instruments consist of cash, short-term deposits and short term investments. The main purpose of these financial instruments is to finance the Group's operations and investments. The Group has other financial instruments such as receivables and payables that arise directly from its operations.

The Directors recognise that financial risk management is an area in which they may need to develop specific policies should the Group become exposed to further financial risks as the business develops.

The main risks arising from the Group's financial instruments are credit risk and market risk which include foreign exchange rates and equity prices. The Board reviews and agrees policies for managing each of these risks as and when they arise. Currently, the Group does not expose to interest rate risk and liquidity risk.

Credit risk

The Group has adopted a policy of only dealing with recognised creditworthy third parties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

The Group and the Company manages the exposures to credit risk by performing credit evaluations on all of their major customers requiring credit, and where appropriate, credit guarantee insurance is purchased. The Group's maximum exposure to credit risk is represented by the carrying amount of financial assets in the financial statements which amounts to RM125 million.

As the Group trades only with recognised creditworthy third parties, there is no requirement for collateral. The credit risk on liquid funds is limited because counterparties are banks with high credit ratings.

Foreign currency risk

The Group has some structural currency exposure as some of its investments and operations are in Thai Baht. Apart from the proceeds derived in Ringgit Malaysia, the Group also receives proceeds from rubber block sales in US Dollars. However the foreign currency risk is considered immaterial to the Group and the Company as a whole.

Market price risk

The Group is exposed to unquoted unit trusts market price and equity securities price risk, from the investments held by the Group and classified as short term investments and available-for-sale investments respectively.

Market price sensitivity analysis

The following table demonstrates the sensitivity to a reasonably possible change in market price, with all other variables held constant, of the Group's and the Company's profit before tax (through the impact on fair value through profit or loss).

 
                                  Group            Company 
                                  RM'000           RM'000 
  31 December 2016 
  Investment in Malaysia 
    Market price increase by 
     10 percentage point          11,519           11,032 
    Market price decrease by 
     10 percentage point         (11,519)               (11,032) 
                               ==========  ===================== 
 
  31 December 2015 
  Investment in Malaysia 
    Market price increase by                              13,710 
     10 percentage point          14,219                   . 
    Market price decrease by 
     10 percentage point         (14,219)              (13,710) 
                               ==========  ===================== 
 

Hedges

The Group did not enter into any interest rate swaps or forward currency contracts to hedge against interest rate risk or foreign currency risk.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

_________________________________________________________________________________________

   26.          Financial instruments (continued) 
   26.4        Fair values measurements 

The fair values of financial assets and financial liabilities of the Group and the Company approximates to their carrying amounts, as disclosed in the statement of financial position and related notes.

Fair value hierarchy

The Group's and the Company's financial instruments carried at fair value are analysed as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices);

Level 3: Inputs for the assets or liabilities that are not based on observable market date (unobservable inputs).

As at reporting date, the Group's and the Company's quoted other investments are classified as Level 1.

There were no material transfers between Level 1, Level 2 and Level 3 during the financial year. The Group and the Company do not have any financial instruments classified as Level 2 and Level 3 as at 31 December 2016.

   27.          Related party transactions 

Transactions within the Group have been eliminated in the preparation of the financial information set out in this report and are not disclosed in this note. Balance and transaction with other related parties and key personnel are either disclosed under the relevant notes or disclosed below.

Compensation of key management personnel of the Group

Key management personnel of the Group are defined as those persons having authority and responsibility for the planning, directing and controlling the activities of the Group, directly or indirectly. Key management of the Group are therefore considered to be the Directors and top management personnel of the Company. The following table summarises compensation paid to key personnel:

 
                                      Group and Company 
                                       2016       2015 
                                      RM'000     RM'000 
 
  Short-term employment benefits          470        662 
                                   ==========  ========= 
 

Further information about the remuneration of individual Directors is shown in note 11 and in the Corporate Governance Statement.

   28.          Control 

The Company and Group are controlled by its shareholders. No one individual has overall control of the Company.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARED 31 DECEMBER 2016

______________________________________________________________________________________________

   29.          Commitments 

Financial commitment

The Group and Company have the following future minimum lease obligations payable under operating

 
     leases: 
                                      Land and buildings 
                                     2016         2015 
                                    RM'000       RM'000 
  Group 
  Operating leases which 
   expire: 
  Within one year                        462          760 
  Between two and five 
   years                                   -          517 
                                 -----------  ----------- 
                                         462        1,277 
                                 ===========  =========== 
 
  Company 
  Operating leases which 
   expire: 
  Within one year                        219          328 
  Between two and five 
   years                                   -          219 
                                 -----------  ----------- 
                                         219          547 
                                 ===========  =========== 
 
 

Operating lease payment represents rental payable by the Group and the Company for the use of office premise.

Capital commitment

 
                               2016       2015 
                              RM'000     RM'000 
  Group 
  Renovation of resorts 
   and motel rooms                  -       243 
                              =======  ======== 
 
   30.          Events after the balance sheet date 

There were no material subsequent events since 31 December 2016 until 25 April 2017. The Directors proposed that a 2% interim dividend for the financial year ended 31 December 2016 be distributed to the shareholders during the year 2017. The interim dividend is under the single tier system of GBP0.002 per share, on 403,209,200 ordinary shares.

   31.          Realised and unrealised Profits 

The breakdown of retained profits of the Group, pursuant to the format prescribed by Bursa Securities, is as follows:

 
                                     As at             As at 
                                     31 Dec            31 Dec 
                                      2016              2015 
                                     RM'000            RM'000 
 
  Total Retained Profits of the Company and its 
   subsidiaries: 
   - Realised b/f                    133,277           133,187 
                                     (3,741)                 - 
   - Realised 
                                     (4,685)                 - 
   - Dividends 
   - Unrealised                          170                90 
                                  ----------        ---------- 
                                     125,021           133,277 
  Total share of Retained Profits from associated 
   company: 
   - Realised b/f                    (2,149)                 - 
   - Unrealised                        (170)           (2,149) 
                                  ----------        ---------- 
   Less : Consolidation effects      (2,319)           (2,149) 
                                     (7,307)           (7,307) 
                                  ----------        ---------- 
  Total Group Retained Profit        115,395           123,821 
                                  ----------        ---------- 
 

List of Properties Registered under the Group of companies

as at 31 December 2016

 
 
                                                                                                 Age of Property (Year)       Net Book Value 31/12/2016       Date of Acquisition/Last Revaluation 
                 Leasehold/                                  Existing Use        Land Area                                                     (RM'000) 
                  Title Nos                 Tenure                               (Hectare) 
-------------------------------------  -------------  -------------------  ---------------  ---------------------------  ------------------------------  ----------------------------------------- 
 
  1      Lot Nos:                           Freehold             Oil Palm           138.57                          101                         324,000                                Acquired on 
         204, 505, 626, 1005,                                  Plantation                                                                                                             24.03.1914 - 
         1091, 653, 1204,                                                                                                                                                               16.06.1916 
         1874, 1910, 1912,                                                                                                                                                                and last 
         1880, 1881, 1882, 23802,                                                                                                                                                      revalued on 
         23803, 23804, 23805,                                                                                                                                                           15.02.2017 
         23806, 23807, 24375, 
         25269, 25270, 25275 
 
 
         Kajang estate, Mukim of Semenyih, Daerah Ulu Langat, Selangor 
 
    2      Lot Nos:                         Freehold             Oil Palm            61.89                          101                         115,000                                Acquired on 
         540,                                                  Plantation                                                                                                             24.03.1914 - 
         PT 21625                                                                                                                                                                       16.06.1916 
         PT 21630                                                                                                                                                                         and last 
                                                                                                                                                                                       revalued on 
                                                                                                                                                                                        15.02.2017 
 
         Dunedin estate, Mukim of Semenyih, Daerah Ulu Langat, Selangor 
 
  3      H.S.(D) 1470                      Leasehold               Resort           9.9947                           27                           5,476                                Acquired on 
         PT Lot 354                      expiring in             Land and                                                                                                               18.08.1990 
                                                2050            Buildings 
 
         Mukim of Pulau Perhentian, Daerah Besut, Terengganu 
 
 
                                                            Land, Factory                                                                                                              Acquired on 
           Title                                               and Office                                                                                                               24.08.2009 
    4      No. 9654                         Freehold             building             5.18                           17                           1,967            and last revalued on 22.01.2010 
 
         77/17 Moo 4 Bangmaruan Road, Tambon Bang Muang, Takuapa 82190, Phangnga, South Thailand 
 
 
    5      Lot No. 3468                     Freehold      Motel, Land and             2.38                           32                          19,434            Acquired on 30.10.2009 and last 
                                                                Buildings                                                                                                              revalued on 
 
         Mukim of Bukit Besar, Kuala Terengganu                                                                                                            11.01.2015 
  6        H.S.(D) 22923                 Leasehold                             Leasehold               902.4195sq. m.             27.5            2,352                              Acquired on 
           Bandar Port Swettenham      expiring in                                  Land                                                                                              31.12.2012 
                                              2088 
 
 
 

District of Klang, State of Selangor

List of Properties Registered under the Group of companies

as at 31 December 2016

 
 
                                                                       Age of Property (Year)       Net Book Value 31/12/2016       Date of Acquisition/Last Revaluation 
         Leasehold/                    Existing Use      Land Area                                                   (RM'000) 
          Title Nos        Tenure                        (Hectare) 
 
       TL077512817 to 
  7    862               Leasehold    Commercial,            5.278                           47                           6,948                              Acquired on 
       TL077517170 to     expiring    Residential &                                                                                                           12.03.2014 
       830                      in 
       TL0775256720to      2029 to    Open Space 
       681                    2069 
       TL 077517358                   Land 
       to 545 
 
       District of 
       Sandakan, 
       Sabah 
 
 
       Lot 100, 
  8    GM1130             Freehold    Industrial             4.046                           24                          20,000                              Acquired on 
       Mukim Tanjung                  Land                                                                                                                    29.12.2016 
       Dua 
       Belas 
 
 
  9    15-06A            Leasehold    Apartment          91 sq mtr                           22                              69                              Acquired on 
       Amber Tower        expiring                                                                                                                            30.06.2003 
                                in 
       Seri Mas               2085 
       Condominium 
 
 
 

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the One Hundred and Seventh Annual General Meeting ("AGM") of the Company will be held at Dewan Murni, Ground Floor Menara Integriti, Institut Integriti Malaysia, Persiaran Tuanku Syed Sirajuddin, Off Jalan Tuanku Abdul Halim, 50480 Kuala Lumpur, Malaysia, on Tuesday, 23 May 2017 at 10:00 a.m. for the following purposes:

 
  1.    To lay before the meeting the financial statements for the year ended 31 December 2016 and 
         the Reports of the Directors and Auditors thereon. 
 
  2.    To approve the payment of Directors' fees in respect of the year ended 31 December 2016.         Resolution 1 
 
  3.    To re-appoint Datuk Kamaruddin bin Awang who retires pursuant to Article 86 of the Company's     Resolution 2 
         Articles of Association, and being eligible, offers himself for re-appointment. 
 
  4.    To re-appoint the following Directors who retire pursuant to Article 86 of the Company's 
        Articles 
        of Association, and being eligible, offer themselves for re-appointment: 
 
        4.1 Dato' Adnan bin Maaruf                                                                       Resolution 3 
        4.2 Dato' Haji Muda bin Mohamed                                                                  Resolution 4 
 
  5.    To re-appoint Messrs UHY Hacker Young LLP as Auditors of the Company and to authorise the        Resolution 5 
         Directors to fix their remuneration. 
 
        AS SPECIAL BUSINESS 
 
         To consider and if thought fit, to pass the following Ordinary Resolutions: 
 
  6.    CONTINUITY AS INDEPENT DIRECTORS 
 
        That subject to the passing of Resolutions 4.1 and 4.2, the following Directors who have 
        served 
        as Independent Non-Executive Directors for a cumulative term of more than nine (9) years, 
        continue to act as Independent Non-Executive Directors of the Company pursuant to 
        Recommendations 
        3.2 and 3.3 of the MCCG 2012: 
 
        6.1    Dato' Adnan bin Maaruf                                                                    Resolution 6 
        6.2    Dato' Haji Muda bin Mohamed                                                               Resolution 7 
 
 
  7.    CONTINUITY AS INDEPENT DIRECTOR 
 
        To re-appoint Dr. Radzuan bin A. Rahman who has served as Independent Non-Executive Director     Resolution 8 
        for a cumulative term of more than nine (9) years, continue to act as Independent 
        Non-Executive 
        Director of the Company pursuant to Recommendations 3.2 and 3.3 of the MGGC 2012. 
 
  8.    PROPOSED RESOLUTION TO EMPOWER THE DIRECTORS OF INCH KENNETH KAJANG RUBBER PUBLIC LIMITED        Resolution 9 
        COMPANY ("IKKR" OR "THE COMPANY") TO ISSUE SHARES PURSUANT TO SECTION 551 OF THE UNITED 
        KINGDOM 
        COMPANIES ACT 2006 ("UK COMPANIES ACT 2006") 
 
        The New Mandate will enable the Directors to take swift action in case of, inter alia, a need 
        for corporate exercises or in the event of business opportunities or other arising 
        circumstances 
        which involve the issue of new shares, and to avoid delay and cost in convening general 
        meetings 
        to approve such issue of shares. 
 
  9.    PROPOSED RENEWAL OF AUTHORITY FOR THE PURCHASE BY THE COMPANY OF ITS OWN SHARES                  Resolution 10 
 
        "THAT, subject to the Malaysian Companies Act 2016, the Memorandum and Articles of 
        Association 
        of the Company and the requirements of Bursa Malaysia Securities Berhad ("Bursa Securities") 
        and any other relevant authorities, the Company be generally and unconditionally authorised 
        to make market purchases (within the meaning of section 701(3) of the UK Companies Act 2006) 
        of ordinary shares of 10p each in the capital of the Company ("IKKR Shares") provided that: 
 
        (a)    the maximum number of IKKR Shares hereby authorised to be purchased is 42,075,000 
               (representing 
               10% of the Company's issued ordinary share capital at 10 April 2017); 
 
        (b)    the maximum amount of funds to be allocated by the Company shall not exceed the 
               audited retained 
               profits and the share premium account of the Company as at 31 December 2016 of 
               RM136,656,555 
               and RM8,434 respectively; 
 
        (c)    the minimum price, exclusive of any expenses, which may be paid for an IKKR Share is 
               the prevailing 
               market share price; 
 
        (d)    the maximum price, exclusive of any expenses, which may be paid for any such share is 
               an amount 
               not more than 15% above the weighted average share price for the five (5) market days 
               immediately 
               preceding the date of the purchase(s); 
 
        (e)    upon the full implementation of the Proposed Share Buy-Back, the Directors of the 
               Company 
               be and hereby authorised to decide in their absolute discretion to either retain the 
               IKKR 
               Shares purchased by the Company pursuant to the Proposed Share Buy-Back ("Purchased 
               Shares") 
               as treasury shares to be resold on the stock exchanges where IKKR Shares are listed; 
               or the 
               Purchased Shares may be cancelled; or the Purchased Shares may in part be retained as 
               treasury 
               shares and the remainder cancelled; 
 
        (f)    the authority hereby conferred shall be in force immediately upon the passing of this 
               resolution 
               until the earlier of 24 November 2018 (the date which is 18 months after the meeting) 
               or the 
               close of the next AGM of the Company or the authority is revoked or varied by ordinary 
               resolution 
               passed by the shareholders in a general meeting; and 
 
        (g)    the Company may make a contract for the purchase of IKKR Shares under this authority 
               before 
               the expiry of this authority which would or might be executed wholly or partly after 
               the expiry 
               of such authority, and may make purchases of IKKR Shares in pursuance of such a 
               contract as 
               if such authority had not expired." 
 

To transact any other business of which due notice shall have been given.

By order of the Board

LEE THAI THYE (LS 0000737)

Company Secretary

Kuala Lumpur, Malaysia

2 May 2017

NOTES:

Appointment of Proxy

1. A member of the Company entitled to attend and vote is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or signed by an officer or attorney duly authorised.

3. Where a member appoints more than one proxy, the appointment shall not be valid unless he specifies the proportion of his holding to be represented by each proxy.

   4.     Any alteration in the proxy form must be initialled. 

5. The instrument appointing a proxy must be deposited at the Registrar's Office, 22nd Floor Menara Promet (KH), Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia, not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof. For shareholders residing outside of Malaysia, the Proxy Form could be forwarded by fax at +603 2141 9650 or by email to ir@ikkr.com.my.

6. For the purpose of determining a member who shall be entitled to attend the 107th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue a General Meeting Record of Depositors ("ROD") as at 17 May 2017. Only a depositor whose name appears on the Register of Members/ROD therein shall be entitled to attend the said meeting or appoint a proxy to attend and/or vote on his/her stead.

Audited Financial Statements

7. The Audited Financial Statements laid at this meeting pursuant to Section 340(1)(a) of the Malaysian Companies Act 2016 are meant for discussion only. It does not require shareholders' approval, and therefore, not put forward for voting.

Directors' Fees

8. Section 230(1) of the Malaysian Companies Act 2016 provides that "the fees" of the Directors and "any benefits" payable to the Directors of a listed company and its subsidiaries shall be approved at a general meeting. The Board agreed that the shareholders' approval shall be sought at the 107(th) AGM on the Directors' fees.

Re-election of Directors Who Retire Pursuant to Article 86 of the Company's Articles of Association ("AA")

9. Article 86 of the AA provides an election of Directors shall take place each year. At each AGM one-third of the Directors for the time being (or if their number is not a multiple of three, the number nearest to but no greater than one-third) shall retire from office provided always that all Directors shall retire from office once at least in each three (3) years but shall be eligible for re-election.

With the current Board size of five (5), three (3) Directors are to retire in accordance with Article 86 of the AA.

9.1 Datuk Kamaruddin bin Awang, who will be retiring and being eligible, offers himself for re-appointment.

9.2 With the coming into force the Malaysian Companies Act 2016 on 31 January 2017, there is no age limit for Directors. At the 106(th) AGM of the Company held on 24 May 2016, Dato' Adnan bin Maaruf and Dato' Haji Muda bin Mohamed, both being above the age of 70, were re-appointed pursuant to Section 129 of the Malaysian Companies Act 1965 to hold office until the conclusion of the 107(th) AGM. Their term of office will end at the conclusion of the 107(th) AGM and they have offered themselves for re-appointment.

The Nomination Committee of the Company has accessed the criteria and contributions of the above three (3) Directors and recommended for their re-appointment. The Board has also endorsed the Nomination Committee recommendation that they be re-appointed as Directors of the Company.

EXPLANATORY NOTES ON SPECIAL BUSINESS:

Continuity as Independent Directors

10. In line with Recommendations 3.2 and 3.3 of the MCCG 2012, the Board has vide the Nomination Committee's recommendations that both Dato' Adnan bin Maaruf and Dato' Haji Muda bin Mohamed to be retained as Independent Non-Executive Directors. This will subject to the passing of Resolutions No. 6 and 7.

The Nomination Committee has also recommended that Dr. Radzuan bin A. Rahman to be retained as Independent Non-Executive Director.

The Committee is of the opinion that the Directors have complied with the independence criteria as prescribed in the Main Market Listing Requirements ("MMLR") of Bursa Malaysia Securities Berhad and remained independent in exercising their judgement and in carrying out their duties as Independent Directors. The Company benefits from the experience of these Independent Non-Executive Directors who have over time, gained valuable insights into the Group, its market and the industry.

Their knowledge of the Group's various core business operations during their tenure of office will enable them to discharge their duties effectively. They are able to act in the best interests of the Company in their contributions and performance together with ability to make analytical inquiries and offer advice and guidance.

Issue Shares Pursuant to Section 551 of the UK Companies Act 2006

11. This Resolution is proposed pursuant to Section 551 of the UK Companies Act 2006, and if passed, will give the Directors of the Company, from the date of the above AGM, authority to issue ordinary shares in the Company not exceeding 10% of the issued capital of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the 106(th) AGM held on 24 May 2016 which will lapse at the conclusion of the 107(th) AGM.

The renewal of this mandate will enable the Directors to avoid any delay and cost involved in convening a general meeting. It is thus appropriate to seek members' approval.

Proposed Renewal of Authority for the Purchase by the Company of its Own Shares

12. The details on the Proposed Renewal of Authority is included in the Statement to Shareholders dated 29 April 2017 which is enclosed together with the Annual Report.

INCH KENNETH KAJANG RUBBER PUBLIC LIMITED COMPANY FORM OF PROXY

   CDS AC No:           _____________________ 

No of Shares Held: _____________________

I/We________________________________________________________(NRIC/CO NO): _____________________

(FULL NAME IN BLOCK LETTERS)

of_____________________________________________________________________________________________

(ADDRESS)

being a shareholder/shareholders of Inch Kenneth Kajang Rubber Public Limited Company, hereby appoint *The Chairman of the Company or

___________________________________________________________________________________(___________)

                                               (FULL NAME OF PROXY)                                                             % 

of_____________________________________________________________________________________________

(ADDRESS)

*and/or failing whom __________________________________________________________________(__________)

                                                                  FULL NAME OF PROXY)                                                                     % 

of_____________________________________________________________________________________________

(ADDRESS)

as *my/our proxy to vote on *my/our behalf at the 107th Annual General Meeting of the Company to be held at Dewan Murni, Ground Floor Menara Integriti, Institut Integriti Malaysia, Persiaran Tuanku Syed Sirajuddin, Off Jalan Tuanku Abdul Halim, 50480 Kuala Lumpur, Malaysia, on Tuesday, 23 May 2017 at 10:00 a.m. for the following purposes:

 
  NO     RESOLUTION                                                                                     FOR    AGAINST 
   1     To approve the payment of Directors' fees 
   2     Re-appointment of Datuk Kamaruddin bin Awang 
   3     Re-appointment of Dato' Adnan bin Maaruf 
   4     Re-appointment of Dato Haji Muda bin Mohamed 
   5     Re-appoint Messrs UHY Hacker Young LLP as Auditors of the Company and to authorise the 
         Directors 
         to fix their remuneration 
  6.1    SPECIAL BUSINESS - ORDINARY RESOLUTION 6 
          To re-appoint Dato' Adnan bin Maaruf 
  6.2    SPECIAL BUSINESS - ORDINARY RESOLUTION 7 
          To re-appoint Dato' Haji Muda bin Mohamed 
   7     SPECIAL BUSINESS - ORDINARY RESOLUTION 8 
          To re-appoint Dr. Radzuan bin A. Rahman 
   8     SPECIAL BUSINESS - ORDINARY RESOLUTION 9 
          To approve the proposed resolution to empower the Directors of the Company to issue shares 
          pursuant to section 551 of the UK Companies Act 2006 
   9     SPECIAL BUSINESS - ORDINARY RESOLUTION 10 
         To approve the proposed renewal of authority for the purchase by the Company of its own 
         shares 
 

Please indicate with an 'X' in the appropriate spaces how you wish your votes to be casted. If no specific direction as to voting is given, your proxy will vote or abstain from voting at his/her discretion.

_______________________________ Dated this day _______ of __________ 2017

Signature/Seal of Shareholder(s)

Tel No: _________________________

*Delete whichever is not applicable.

Note:

A member of the Company entitled to attend and vote is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company. Where a member appoints more than one proxy, the appointment shall not be valid unless he specifies the proportion of his holding to be represented by each proxy. Any alteration in the proxy form must be initialled. The instrument appointing a proxy must be deposited at the Registrar's Office of the Company, not less than forty-eight (48) hours before the time for holding the meeting. For shareholders residing outside of Malaysia, the Proxy Form could be forwarded by fax at +603 2141 9650 or by email to ir@ikkr.com.my

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR OKCDDBBKKOQB

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May 02, 2017 02:00 ET (06:00 GMT)

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