ceramic world showrooms - white horse · 2018-04-30 · 93450 kuching, sarawak, east malaysia. tel:...

Ceramic World Showrooms

Kuala LumpurNo. 1, Jalan Persiaran Satu, Bandar Baru Selayang,68100 Batu Caves, Selangor Darul Ehsan, West Malaysia.Tel: 03-6136 1188 Fax: 03-6138 2366 E: [email protected]

Johor BahruLot 26242 (PTD 52712), Jalan Rosmerah 2/18,Taman Johor Jaya, 81100, Johor Bahru,Johor Darul Takzim, West MalaysiaTel: 07- 357 1888 Fax: 07-351 0659E: [email protected]

ButterworthNo.3088, Jalan Kelisa Emas 1, Seberang Jaya,13700 Perai, Pulau Pinang, West MalaysiaTel : 04 -397 7888 Fax : 04 - 397 7999E: [email protected]

Alor Setar 202, Lorong Perak 8, Kawasan Perusahaan Mergong 2,05150 Alor Setar, Kedah Darul Aman, West Malaysia. Tel: 04-732 7226 Fax: 04-732 7282E: [email protected]

KlangLot 2737, Jalan Raja Nong/KS2, Taman Perindustrian Sg. Jati,41200 Klang, Selangor Darul Ehsan, West Malaysia.Tel: 03-5161 3888 Fax: 03-5161 3111E: [email protected]

Concept Gallery

Pulau PinangNo.97, Lorong Kinta, 10400, Penang, West MalaysiaTel : 04-210 9999 Fax : 04-210 9998 E: [email protected]

Other Branches

Batu PahatNo. 102, Jalan Jelawat, Taman Banang, 83000 Batu Pahat,Johor Darul Takzim, West Malaysia.Tel: 07-433 2855/433 3855 Fax: 07-433 4855

Ipoh Plot 76, Persiaran Portland, Kawasan Perindustrian Tasek,31400 Ipoh, Perak Darul Ridzuan, West Malaysia.Tel: 05-291 2288 Fax: 05-291 8822

Kuantan Lot 55, Semambu Industrial Estate, 25350 Kuantan,Pahang Darul Makmur, West Malaysia.Tel: 09-568 5333 Fax: 09-568 5666

Kota BharuNo. 1, Lot PT 4089, Jalan 9/44,Kawasan Perindustrian Pengkalan Chepa 11, 16100 Kota Bharu, Kelantan Darul Naim, West Malaysia.Tel: 09-774 4333 Fax: 09-774 4166

KuchingLot 1035, Jalan Utama, Pending Industrial Estate,93450 Kuching, Sarawak, East Malaysia.Tel: 082-341 577 Fax: 082-341 578

Kota Kinabalu Lot 48A, Jalan Kilang, Sedco Industrian Estate,Kolombong Off Mile 5 ½, Jalan Tuaran, 88450 Kota Kinabalu, Sabah, East Malaysia.Tel: 088-434 008 Fax: 088- 433 171

Overseas Marketing Offices

Singapore WHITE HORSE CERAMIC (S) PTE. LTD.1, Sungei Kadut Way, Singapore 728770Tel: (65) 6269 0555 Fax: (65) 6269 0055 E: [email protected]

PhilippinesWHITE HORSE CERAMIC (PHIL.) INC.,346, Sta. Clara Street, Corner Syquia Street,Sta. Ana Manila, 1009 Philippines.Tel: (632) 268 1928 Fax: (632) 562 0751E: [email protected]

ThailandWHITE HORSE CERAMIC (THAILAND) LTD.34/9 MOO13, Bangna-Trad Km 12 Rd.,Bangleeyai,Bangplee District, Samutprakarn Province 10540 Thailand.Tel: (662)316 3788 Fax: (662) 316 3794/95/96 E: [email protected]

IndonesiaPT. WH CERAMIC INDONESIAKomplek Pergudangan Jembatan Tiga,Blok D/7 A-B Penjaringan,Jakarta Utama, 14440 Indonesia. Tel: (62 21) 6660 5020 Fax: (62 21) 6660 5030E: [email protected]

Komplek Pergudangan Nila Alam, Gudang 1&2,Jalan Raya Waru 1A, Waru Sidoarjo, Jawa Timur, 61256 IndonesiaTel: (62 31) 853 5156 Fax: (62 31) 853 3797

ChinaRoom B-E, 33rd Floor, Developing Building, No. 13 Huayuan East Road,Changcheng District, Foshan City, 52800 Guangdong, China.Tel : (86 757) 8278 5366 Fax : (86 757) 8277 5252E : [email protected]

Vietnam Marketing Network Headquarters

Road 2A, My Xuan A Industrial Zone, Tan Thanh District,Ba Ria - Vung Tau Province, VietnamTel: (84) 254 393 2333 Fax: (84) 254 393 2338 E: [email protected]

Ho Chi Minh Branch270A Ly Thuong Kiet Street, District 10, Ho Chi Minh CityTel: (84) 283 864 9800 Fax: (84) 283 864 9808

Can Tho Branch225 Street 3/2, Hung Loi Ward, Ninh Kieu District, Can Tho CityTel: (84) 292 383 9999 Fax: (84) 292 383 1111

Nha Trang BranchNo.131B, Road 23/10, Phuong Son Ward, Nha Trang City, Khanh Hoa ProvinceTel: (84) 258 382 1085 Fax: (84) 258 382 1086

Da Nang BranchLot 48, Street 4, Da Nang Industrial Park - An Don, Son Tra Dist. Da Nang CityTel: (84) 236 393 1222 Fax: (84) 236 393 1228

Ha Noi Branch683 Nguyen Khoai Street, Thanh Tri Ward, Hoang Mai District, Ha Noi CapitalTel: (84) 243 644 6555 Fax : (84) 243 644 6553

Hai Phong Branch750 Nguyen Van Linh, Le Chan Dist. Hai Phong CityTel: (84) 225 378 4555 Fax: (84) 225 378 4666

Bieh Hoa Branch10 Thong Nhat Ward, Bien Hoa City, Dong Nai Province

CO

NTE

NTS

02 CORPORATE INFORMATION

03 CORPORATE STRUCTURE

04 FINANCIAL HIGHLIGHTS

05 PROFILE OF DIRECTORS

08 KEY SENIOR MANAGEMENT PROFILE

09 MANAGEMENT DISCUSSION AND ANALYSIS

13 SUSTAINABILITY STATEMENT

15 CORPORATE GOVERNANCE OVERVIEW

STATEMENT

44 AUDIT COMMITTEE REPORT

52 STATEMENT ON RISK MANAGEMENT

AND INTERNAL CONTROL

54 STATEMENT OF DIRECTORS’

RESPONSIBILITY

55 FINANCIAL STATEMENTS

138 LIST OF LANDED PROPERTIES

142 ANALYSIS OF SHAREHOLDINGS

145 NOTICE OF ANNUAL GENERAL MEETING

FORM OF PROXY_ ENCLOSED

WHITE HORSE BERHAD2

CORPORATE INFORMATION

BOarD Of DirECtOrS

Liao Yuan Shun(Chairman/ Managing Director)

teo Swee teng(Deputy Managing Director)

Cheng Soon Mong(Deputy Managing Director)

teo Kim Lap (Non-IndependentNon-Executive Director)

Liao Shen Hua (Non-IndependentNon-Executive Director)

teo Kim tay (Non-IndependentNon-Executive Director)

Liao Jung Chu(Non-IndependentNon-Executive Director)

Law Piang Woon(Senior IndependentNon-Executive Director)

Chew Pei fang(IndependentNon-Executive Director)

rosita Yeo Swat Geok(IndependentNon-Executive Director)

auDit COMMittEE

Chairperson

rosita Yeo Swat Geok(IndependentNon-Executive Director)

Members




NOMiNatiON COMMittEE

Chairman


Members



rEMuNEratiON COMMittEE

Chairman

Liao Yuan Shun (Chairman/ Managing Director)

Members



SECrEtarY

Chua Siew Chuan(MAICSA : 0777689)

rEGiStErED OffiCE

PLO 464, Jalan GangsaPasir Gudang Industrial Estate81700 Pasir Gudang Johor Darul TakzimTel : (60)7 -251 1111Fax : (60)7 -251 1011

rEGiStrar

Securities Services (Holdings)Sdn. Bhd. (36869-T)Level 7, Menara MileniumJalan Damanlela Pusat Bandar DamansaraDamansara Heights 50490 Kuala LumpurWaliyah PersekutuanTel : 603 – 2084 9000Fax : 603 – 2094 9940

auDitOrS

Ernst & YoungChartered AccountantsLevel 16-1, Jaya 99, Tower B,99 Jalan Sri Lanang,75100 Melaka

PriNCiPaL BaNKErS

Malayan Banking Berhad (3813-K)69-75, Jalan Meranti MerahTaman Kebun Teh80250 Johor Bahru,Johor Darul Takzim

Malayan Banking Berhad (3813-K)14, Pusat Perdagangan,Jalan Bandar,81700 Pasir Gudang,Johor Darul Takzim

The Bank of Nova Scotia BerhadUnit 09, 17th Floor, Office Tower,Johor Bahru City Square,108, Jalan Wong Ah Fook,80000 Johor Bahru,Johor Darul Takzim

AmBank (M) BerhadLevel 31, Selesa Tower,Jalan Dato’ Abdullah Tahir,80300 Johor Bahru,Johor Darul Takzim

DBS Bank LtdKuala Lumpur Representative Office,#08-01, Menara Keck Seng,203, Jalan Bukit Bintang,55100 Kuala LumpurWilayah Persekutuan

United Overseas Bank(Malaysia) Berhad8, Jalan Ponderosa 2/1,Taman Ponderosa,81100 Johor Bahru,Johor Darul Takzim

RHB Bank Berhad (6171-M)10 Pusat Perdagangan,Jalan Bandar,81700 Pasir Gudang,Johor Darul Takzim

StOCK ExCHaNGE

Main Market of Bursa MalaysiaSecurities Berhad

WEBSitE

www.whitehorse.my

WHITE HORSE BERHAD ANNUAL REPORT 2017 3

CORPORATE sTRuCTuRE

WHitE HOrSE CEraMiCMarKEtiNG SDN. BHD.

(250561-D)

WHitE HOrSE CEraMiCiNDuStriES SDN. BHD.

(216824-X)

WHitE HOrSECEraMiC iNDuStriES

(ViEtNaM) CO., LtD

• White Horse Ceramic (S) Pte. Ltd. • White Horse Ceramic (Phil.) Inc. • White Horse Ceramic (Thailand) Ltd • PT WH Ceramic Indonesia• Grand Mark International Co., Ltd

(455130-X)

100% 100% 100%

100%

WHITE HORSE BERHAD4

0

100,000

500,000

300,000

700,000

200,000

600,000

400,000

800,000

2013

2013 2013

20132015

2015 2015

20152014

2014 2014

20142016

2016 2016

20162017

2017 2017

2017

revenue(rM’000)

RM’000

0

100,000

500,000

300,000

700,000

200,000

600,000

400,000

800,000

Shareholder’s funds(rM’000)

RM’000

0

10,000

50,000

30,000

20,000

60,000

40,000

70,000

Profit after tax(rM’000)

RM’000

0

15

5

25

20

10

30

Earnings per share *(Sen per share)

Sen per share

646,814

765,200 752,729

695,158

640,103

699,549738,380

761,670 768,297745,435

48,182

59,235

34,217

26,445

5,079

21.0

25.8

14.9

11.8

2.2

* Calculated based on the total number of issued shares of 240,000,000 ordinary shares.

FINANCIAL HIGHLIGHTs


PROFILE OF DIRECTORs

LiaO YuaN SHuN

Taiwanese • Male • Aged: 64

Mr Liao is the Executive Chairman of White Horse Berhad. He was appointed to the Board as Executive Chairman of White Horse Berhad on 6 August 1999. Upon finishing his secondary education in Taiwan, he ventured into the ceramic tiles industry and has more than 35 years of experience in the industry. Mr Liao also sits on the board of several private limited companies in Malaysia. He has attended all four (4) Board Meetings held in the financial year ended 31 December 2017. He is the brother of Mr Liao Jung Chu, who is a Director of White Horse Berhad. He is the Chairman of the Remuneration Committee. Mr Liao does not have any directorships in other public companies and public listed companies.

tEO SWEE tENG

Malaysian • Male • Aged: 60

Mr Teo is the Deputy Managing Director of White Horse Berhad. He was appointed to the Board on 6 August 1999. His first involvement in the ceramic tiles industry began in 1983 upon completing his secondary education when he started a business in marketing and distributing of ceramic tiles. Mr Teo presently sits on the board of several private limited companies in Malaysia. He has attended all four (4) Board Meetings held in the financial year ended 31 December 2017. He is the brother of Mr Teo Kim Lap and Mr Teo Kim Tay, who are the Directors of White Horse Berhad. Mr Teo does not have any directorships in other public companies and public listed companies.

CHENG SOON MONG

Singaporean • Male • Aged: 75

Mr Cheng is the Deputy Managing Director of White Horse Berhad. He was appointed to the Board on 6 August 1999. Mr Cheng graduated from high school and has over 40 years of experience in the ceramic tiles business. Mr Cheng has been an Executive Director of White Horse Ceramic Industries Sdn Bhd since its incorporation in 1991. Mr Cheng also sits on the board of several private limited companies in Malaysia. Mr Cheng has attended all four (4) Board Meetings held in the financial year ended 31 December 2017. He is not related to any other Directors on the Board nor substantial shareholders of the Company. Mr Cheng does not have any directorships in other public companies and public listed companies.

LiaO JuNG CHu


Mr Liao is a Non-Independent Non-Executive Director of White Horse Berhad. He was appointed to the Board on 6 August 1999. Mr Liao completed his senior high education in veterinarian studies. He then ventured into the ceramic tiles industry in 1972. Mr Liao also sits on the board of several private limited companies in Malaysia. He has attended three (3) out of the four (4) Board Meetings held in the financial year ended 31 December 2017. He is the brother of Mr Liao Yuan Shun who is the Executive Chairman of White Horse Berhad, and the father of Mr Liao Shen Hua, who is a Director of White Horse Berhad. He is also a member of the Nomination Committee and the Audit Committee of the Company. Mr Liao does not have any directorships in other public companies and public listed companies.

WHITE HORSE BERHAD6

tEO KiM LaP


Mr Teo is a Non-Independent Non-Executive Director of White Horse Berhad. He was appointed to the Board on 6 August 1999. Together with his brothers, he ventured into the ceramic tiles business upon completion of his secondary education. Mr Teo presently sits on the board of several private limited companies. He has attended three (3) out of four (4) Board Meetings held in the financial year ended 31 December 2017. He is the brother of Mr Teo Swee Teng and Mr Teo Kim Tay, who are the Directors of White Horse Berhad. Mr Teo does not have any directorships in other public companies and public listed companies.

LiaO SHEN Hua


Mr Liao is a Non-Independent Non-Executive Director of White Horse Berhad. He was appointed to the Board on 6 August 1999. He holds a Diploma in electrical engineering from Ta Hua College of Technology, Taiwan. He was introduced to the ceramic tiles industry soon after his graduation in 1987. As the Executive Director in charge of manufacturing division in White Horse Ceramic Industries Sdn Bhd, a position he has been holding since 1991, Mr Liao is currently responsible for the overall manufacturing operation of White Horse Ceramic Industries Sdn Bhd. He has attended all four (4) Board Meetings held in the financial year ended 31 December 2017. He is the son of Mr Liao Jung Chu, who is a Director of White Horse Berhad. Mr Liao does not have any directorships in other public companies and public listed companies.

tEO KiM taY


Mr Teo is a Non-Independent Non-Executive Director of White Horse Berhad. He was appointed to the Board on 6 August 1999. He ventured into the ceramic tiles industry upon completion of secondary education. Mr Teo presently sits on the board of several private limited companies. He has attended all four (4) Board Meetings held in the financial year ended 31 December 2017. He is the brother of Mr Teo Kim Lap and Mr Teo Swee Teng, who are the Directors of White Horse Berhad. Mr Teo does not have any directorships in other public companies.

LaW PiaNG WOON


Mr Law is the Senior Independent Non-Executive Director of White Horse Berhad. He was appointed to the Board on 19 June 2001. He holds a Degree in Commerce (Accountancy) from Nanyang University, Singapore. Mr Law has been practising as a Public Accountant. Apart from his qualification as a member of the Malaysia Institute of Accountant, he also holds various qualifications including Certified Public Accountant (Australia), Chartered Accountant of the Institute Singapore Chartered Accountants, Fellows of the Chartered Tax Institute of Malaysia and Association of Chartered Certified Accountants respectively. Mr Law is also an Independent Non-Executive Director of Harn Len Corporation Berhad. Mr Law has attended all four (4) Board Meetings held in the financial year ended 31 December 2017. He is not related to any other Directors on the Board nor substantial shareholders of the Company. Mr Law is also the Chairman of the Nomination Committee, as well as a member of the Audit Committee and Remuneration Committee.

Profile of Directors (continued)


Profile of Directors (continued)

CHEW PEi faNG

Singaporean • Female • Aged: 58

Ms Chew is the Independent Non-Executive Director of White Horse Berhad. She was appointed to the Board on 20 June 2001. Ms Chew graduated with a Bachelor Degree of Social Science (Economics Honours) in 1985 and has worked in several companies with vast experience in the field of administration. Ms Chew has attended all four (4) Board Meetings held in the financial year ended 31 December 2017. She is not related to any other Directors on the Board nor substantial shareholders of the Company. Ms Chew is also a member of the Audit Committee, Nomination Committee and Remuneration Committee. Ms Chew does not have any directorships in other public companies and public listed companies.

rOSita YEO SWat GEOK

Malaysian • Female • Aged: 64

Ms Yeo is the Independent Non-Executive Director of White Horse Berhad. She was appointed to the Board on 19 April 2013. Ms Yeo graduated with a Bachelor Degree of Law LBB (Honours) in 1978 from University of Singapore and has been actively practicing law since then. She has been managing her own law firm, Messrs. Yeo & Co Advocates & Solicitors from June 1989 to June 2016. With effect from 1 July 2016, she is practicing as a consultant at a law firm, Messrs. Chua & Partners. Ms Yeo attended all four (4) Board Meetings held in the financial year ended 31 December 2017. Ms Yeo is also the Chairperson of the Audit Committee. Ms Yeo is not related to any other Directors on the Board nor substantial shareholders of the Company. Ms Yeo does not have any directorships in other public companies and public listed companies.

Conflict of interest

Apart from Mr Cheng Soon Mong, Mr Law Piang Woon, Ms Chew Pei Fang and Ms Rosita Yeo Swat Geok, the rest of the Directors are deemed interested in the recurrent related party transactions, of which a shareholders’ mandate has been obtained in the Annual General Meeting held on 26 May 2017. Details pertaining to these transactions are disclosed in the Financial Statements for the financial year ended 31 December 2017.

Conviction of Offence

None of the Directors has been convicted of any offence within the past five (5) years, other than traffic offences, nor any public sanction or penalty imposed by the relevant regulatory bodies, during the financial year ended 31 December 2017.

WHITE HORSE BERHAD8

kEy sENIORMANAGEMENT PROFILE

KWaN KiM fOOK

regional financial ControllerMalaysian, Male, Aged: 58

Mr. Kwan joined White Horse Ceramic Industries Sdn Bhd (“WHCi”) on 16 June 1997 as the Financial Controller. He holds a Bachelor Degree in Accounting from the University of Malaya and is a member of the Malaysian Institute of Accountants. He had worked with Bank Negara Malaysia for several years and some multinational companies before joining White Horse. He was appointed as Regional Financial Controller on 1 March 2014.

raYMOND LOO KiM Huat

General Manager, MarketingMalaysian, Male, Aged: 50

Mr. Raymond Loo joined White Horse Marketing Sdn Bhd on 15 May 2000 as the Regional Manager for Domestic Sales. He graduated from University of Malaya with a degree in Economics. Before joining the Company, he worked in Public Bank Berhad for three (3) years and a building materials company for five (5) years. He was appointed as General Manager of Domestic Sales Division on 1 January 2013.

LuO tSu-tE

assistant General Manager, Manufacturing Taiwanese, Male, Aged: 48

Mr. Luo joined WHCI on 28 April 2006 as the Assistant General Manager of manufacturing division. He holds a Diploma in Ceramic Engineering from National United University, Taiwan. He served in the Republic of China Armed Forces as a Lieutenant for four (4) years before joining White Horse Ceramic Co., Ltd., Taiwan’s Research and Development Department. He is responsible for overseeing the daily operations in both manufacturing facilities in Malaysia.

taN CHiN GOaN

Senior Manager, Human resourcesMalaysian, Male, Aged: 57

Mr. Tan joined WHCI on 18 July 1997. He completed his Degree in Commerce at the University of Windsor, Canada. Prior to joining WHCI, he has eleven (11) years of experience in the field of administration and human resources functions in various companies. He is responsible for the human resources function in the Group. He was appointed to Senior Manager on 1 January 2003.

None of the above Key Senior Management has any:-• directorships in public companies and public listed companies;• family relationship with any Directors and/or major shareholders of the Company;• personal interest or conflict of interest in any business arrangement involving the Group;• conviction for offences within the past five (5) years other than traffic offences (if any); and• public sanctions or penalties imposed by the relevant regulatory bodies during the financial year ended 31

December 2017


MANAGEMENT DIsCussIONAND ANALysIs

The Board of Directors and Management of White Horse Berhad (“White Horse” or “the Company”) are pleased to present the Management Discussion and Analysis (“MD&a”) for the financial year ended 31 December 2017 (“fYE 2017”). The review would provide an insight to the business operations as well as key events and factors leading to the operating and financial performance for the FYE 2017.

(a) BuSiNESS OPEratiONS OVErViEW

White Horse strives to be a reputable manufacturer of premium quality tiles. The vision of White Horse is “to become a world class ceramic tiles manufacturer.”

The Group is involved in the manufacturing of ceramic wall and floor tiles. With a sole vision to pursue, the Group remains steadfast in its sole business objective of offering ceramic tiles of par excellence to the market. Having been in the market for two (2) decades, the Group now has three (3) manufacturing facilities spanning over two (2) countries, and now is one (1) of the leading players in Malaysia.

The Company strongly believes in building its forte and expertise in ceramic tiles manufacturing and has never waver from its sole business segment by diversifying into other non-related businesses.

At present, our products are sold both domestically and export to more than thirty (30) countries in the world. In the Malaysia scene, we have a wide marketing network of eleven (11) marketing offices. Ten (10) distribution centres and five (5) major showrooms, namely “Ceramic World” other than the smaller scale showrooms in the respective centres, so as to provide a prompt service to our dealers and end consumers. Apart from the five (5) overseas subsidiaries in Singapore, Philippines, Thailand, Indonesia and China, we have an international sales team to service our overseas customers.

As for Vietnam, we have seven (7) marketing offices, seven (7) distribution centres and ten (10) showrooms across the country, so as to provide a prompt service to our local dealers and end consumers.

The following table highlights the financial information of our Group for the past five (5) financial years:-

2013 2014 2015 2016 2017 rM’000 rM’000 rM’000 rM’000 rM’000

Revenue 646,814 765,200 752,729 695,158 640,103 Profit before tax 73,596 76,359 47,685 37,595 6,829 Interest expense 4,970 9,764 5,890 6,960 8,259 Proft after tax 48,182 59,235 34,217 26,445 5,079 Shareholders’ equity 699,549 738,380 761,670 768,297 745,435 Total assets 1,161,240 1,196,563 1,271,350 1,208,651 1,108,056 Loans and borrowings 199,284 211,462 250,133 244,022 189,164 Earnings per share (sen) 21.0 25.8 14.9 11.8 2.2

WHITE HORSE BERHAD10

(B) fiNaNCiaL PErfOrMaNCE OVErViEW

review of financial results for the fYE 2017 and financial Conditions

For the FYE 2017, the Group recorded a turnover of RM640.0 million, a decrease of 7.9% as compared to the previous financial year. The decrease in revenue was mainly due to the slowdown in the construction industry coupled with the stiff market competition in the tile industry.

The Group is profit before taxation stood at RM6.8 million for the FYE 2017, a decrease of 81.8% as compared to the previous financial year mainly due to the lower revenue achieved and also the additional provision of stock obsolescence.

Finance costs amounted to RM8.3 million, representing an increase of 18.7% as compared with previous financial year mainly due to the interest rate hike.

Cash and bank balances amounting to RM80.6 million, a reduction of 46.3% as compared with last year of RM150.1 million, which was mainly due to the repayment of borrowings and also the purchases of property, plant and equipment.

The gearing ratio stood at 0.25 times as compared to 0.32 times of last year due to repayment of borrowings.

Although the trade receivables turnover days stood at 72 days which was two (2) days more than previous financial year, the amount has reduced by 5.6%. If we applied revenue of last year, it turned out to be at 66 days.

The inventories turnover days stood at 273 days, as compared with last year of 293 days,an improvement of 20 days due to the effect from our implementation of storage control system.

In view of the broad operating expenses, the lower revenue achieved has inevitably affected the bottom line of the Company. In order to maximise our shareholders’ value, we have carried out counter measures to expand our revenue by restructuring our marketing strategies and also to rationalising our production capacity, in addition to our cost-saving implementation.

Our newly built showroom, namely Ceramic World, in Plentong, Johor Bahru, would be in operation in the third Quarter of 2018. It is relocated from the Johor Jaya site, which was a leased land, to our existing own freehold land.

The new showroom comprised a warehouse, other than a sales office, situated at a strategic location, will serve our customers promptly and conveniently.

In view of the slow pace in the construction and renovation industries, there would be no major capital expenditure taking place in the forthcoming years.

It also has impacted our Group’s operation and performance, where our revenue shall be achieved at a level to sustain our broad operating expenses.

Cost-savings measures and stringent credit control have been implemented to ensure a positive cash-inflow, other than the enhancement of production efficiency and productivity. New products with higher margin are still being developed and introduced into the market regularly.

Financial condition and liquidity are considered manageable as some of the banks’ lending capacity are still not been fully utilised.

Management Discussion and Analysis (continued)


(C) rEViEW Of OPEratiNG aCtiVitiES

The local property market continues to be in the oversupplied situation in particular on the main sub-sectors such as office and high-end residential units in the year of 2017.

Unsold units in the first half of 2017 hit the highest number in ten (10) years including residential and office properties.

Internally, the manufacturing arm has embarked on heat recycling projects by channeling the heat emission from the firing kilns to the other stages of production as part of the energy saving drive. In addition, the ongoing cost saving research efforts are focusing in recycling production waste. Furthermore, the manufacturing arm is also engaged in the process of streamlining and rationalising our range of product models to cater to the market needs.

In the year 2017, our brand White Horse was awarded the Platinum Winner in the Floor and Wall Tiles category for the Reader’s Digest Trusted Brands in Malaysia.

anticipated or known risks faced by the Group

The Group is exposed to a variety of market and financial risks which includes foreign currency and interest rate hike risks.

For market risk, the Group’s business operates in a stiff competitive environment with local manufacturers and building material importers. In order to remain competitive, our Group will focus on a wide product range and high product quality to uphold our premium pricing over the other competitors. This is supported by our continuous research and development efforts and product innovation.

In order to mitigate the foreign currency risk, we had carried out a natural hedging by utilising our export proceeds to pay for our imports.

As regards to the interest rate hike risk, we conduct cost-savings measures across the board and also to enforce stringent credit control procedure, so as to minimise our borrowings.

(D) futurE OutLOOK

The local property market continues to be in the oversupplied situation, particularly in the main sub-sectors such as office and high-end residential units in the year of 2017.

As mentioned above, unsold units in the first half of 2017 hit the highest number in ten (10) years including residential and office properties. Housing affordability remains a key issue in the local market, particularly in the key cities. Outlook for local property sector continues to look bleak for year of 2018.

Our business operating environment remains highly challenging and competitive. On one end, the operating cost is constantly on an upward trend deteriorating our profitability while on the other hand, stiff competition in the market has caused our product pricing to remain stagnant. Energy pricing, in particular the natural gas price has been on an upward trend, resulting to higher operating costs.

Amidst the challenging operating environment and economic conditions, we remain a positive outlook for the financial year of 2018.



(D) futurE OutLOOK (CONtiNuED)

Dividend Policy

For the past nine (9) years, the Company has been consistently paying out a dividend of 10 sen per share in two (2) separate payments each year.

The dividend payouts have demonstrated the Company’s commitment in rewarding a fair and equitable return of investment to its shareholders.

However, this year, in view of the lower profit margin, the Board has recommended a final tax-exempt dividend of 2 sen per share for the FYE 2017, subjects to the approval of shareholders at the forthcoming Annual General Meeting in May 2018.

The Company had paid an interim tax-exempt dividend of 5 sen per share on 10 January 2018 as per our announcement made in the third quarter for the financial period ended 30 September 2017.

appreciation

The Board of Directors would like to express our gratitude to all our valued shareholders, customers, vendors, business associates, financial institution and regulatory authorities for their continued supports and confidence in our Group.



susTAINABILITy sTATEMENT

White Horse Berhad and its subsidiaries (“White Horse” or “the Group”) present our inaugural Sustainability Statement for the financial year ended 31 December 2017. This report serves as a measure to communicate to our stakeholders the key matters that impact our businesses in terms of economic, social and environmental aspects. The scope of this report encompasses our manufacturing arm, i.e. White Horse Ceramic Industries Sdn. Bhd. (“WHCi”) and marketing arm, i.e. White Horse Marketing Sdn. Bhd. (“WHM”) in Malaysia.

Our materiality issues were organised into the following three (3) main pillars of sustainability:-

(1) Economic (2) Social(3) Environmental

Economic

Corporate Governance and Ethical Behaviour

White Horse is committed to maintain the highest standards in relation to corporate governance, ethics and compliance. We believe good corporate governance is essential to the sustainability of our businesses and pivotal to protect the interest of our stakeholders.

We have put in place across our operations various policies but not limited to the following:-

(1) Code of Ethics and Conduct;(2) Personal Data Protection Policy; and(3) Whistleblowing Policy.

Social

Our People

We believe that employees are one of the most important assets to drive the business. Thus, the Group has always endeavored to safeguard the welfare, healthcare, training and career development of our employees. Trainings were provided to the employees from time to time to equip our employees with necessary skills and knowledge. Long service awards are set up to recognise the efforts and contribution of long services employees. Occupational Health and Safety (“OSH”)

In the manufacturing arm, we place high importance on safety and employees’ well-being. There is a Safety and Environmental Committee to ensure a conducive and safe working environment. We have in place an OSH policy that is adhered to and communicated to all employees. To promote health awareness and encourage healthy lifestyle among our staff, the Company organises various sports and recreational activities like football, sepak takraw, yoga and dance classes.

Workplace Diversity The Group embraces diversity at workplace and we do not allow room for any form of discrimination practice against people of different gender, age, ethnicity, nationality or marital status.

Gender diversity

As at 30 March 2018, the Group had achieved a ratio of 78:22 in the workforce of the Group in terms of male against female.


Age diversity

As at 30 March 2018, 37% of our employees belong to the age group of between 26 to 35 with the next largest age group being those aged between 36 to 45 (32%). The Group’s age demographics broadly reflected those of Malaysia where the younger age employees form the majority of the workforce. Ethnicity diversity

As at 30 March 2018, employees of Malay ethnicity constituted the largest workforce of the Group at 48%, with the foreigner ethnicity staff being the next largest workforce at 31%. Notwithstanding so, the Group practices a well balance hiring of staff in the human resources recruitment process.

Community Initiatives

Not forgetting the society at large, the Group had contributed in industrial training for students from various higher institutions. The Group also sets up a children’s education incentive fund with the aim of encouraging employees’ children to pursue academic excellence.

White Horse reaches out to the community in order to share our good fortune and passion with others who are less fortunate. Various visits and events were organised by WHM to support and render help to a few charitable organisations such as old folk and orphanage homes.

Environmental

Environmental Stewardship

As a good corporate citizen, we have a responsibility to conserve energy and preserve the environment. Energy conservation programmes have been initiated to reduce energy consumption and thus managing the escalating energy costs.

Environmental Policy

White Horse has in place an Environmental Policy in our manufacturing facilities which articulates our commitment and efforts towards environmental conservation. The policy is communicated to all employees.

ISO Certification

WHCI has been awarded ISO 14001:2015 Environment Management System Certification. Procedures are put in place to deploy resources and monitor matters relating to legal and regulatory compliance.

Green Product Certification

Selected range of products are also awarded the SIRIM Eco-Labelling Mark by SIRIM QAS International Sdn. Bhd. and Singapore Green Labelling Scheme Certificate by Singapore Environment Council. This is part of our efforts in going green.

Water, Energy and Waste Management

WHCI has waste water management plants in the manufacturing facilities to treat waste water produced in the process of production and recycle the treated water into the factory.

Heat recycling projects are ongoing in an effort to reduce the consumption of natural gas.

Given the nature of our operations, wastes are produced during the production process. They are duly categorised, segregated and handled according to the respective regulations. Competent personnel are trained to manage waste related matters.

Sustainability Statement (continued)


CORPORATE GOvERNANCEOvERvIEw sTATEMENT

The Company and its subsidiaries (“Group”) is fully committed to business integrity, transparency and professionalism whist pursuing its corporate objectives to enhance shareholders’ value and its overall competitive positioning. As part of this commitment, the Board of Directors (“Board”) of the Company recognises the importance of governance and plays an active role in administering and reviewing the Group’s governance practices and framework to ensure its relevance and ability to meet future challenges.

Development in Corporate Governance

The Securities Commission Malaysia (“SC”) had on 26 April 2017 released the new Malaysian Code on Corporate Governance (“New MCCG”), superseding the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”), a set of best practices to strengthen corporate culture anchored on accountability and transparency.

application Period

The Board is pleased to present this Corporate Governance Overview Statement (“Statement”) to provide investors with an overview of the extent of compliance with three (3) Principles as set out in the New MCCG under the stewardship of the Board.

Notwithstanding the above, item 3.4 of the Practice Note 9 of the Main Market Listing Requirements (“Main Lr”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) stipulated that “a listed issuer must also ensure that the Corporate Governance (“CG”) Report covers the practices for the whole financial year. If a practice had been in place for only part of the financial year, the listed issuer must state so and the period during which it had been in place.”

In view of the transitional period where the New MCCG only came into operation with effect from 26 April 2017, this Statement in general complied with MCCG 2012, New MCCG, Companies Act 2016 (“Ca 2016”), Amended Main LR of Bursa Securities effective since 2 January 2018 and also be guided by the Corporate Governance Guide issued by Bursa Securities.

application Period CG Practices

1 January 2017 to 25 April 2017 MCCG 2012

26 April 2017 to 31 December 2017 and/or up to 24 April 2018 (being the date of Notice of Annual General Meeting, where applicable)

New MCCG

This Statement also serves as a compliance with Paragraph 15.25 of the Main LR of Bursa Securities. In addition, the CG Report which sets out the application of each Practice is available for viewing in the Group’s corporate website at www.whitehorse.my.


PriNCiPLE a: BOarD LEaDErSHiP aND EffECtiVENESS

(1) Board responsibilities

intended Outcome 1.0

Every company is headed by a Board, which assumes responsibility for the Company’s leadership and is collectively responsible for meeting the objectives and goals of the Company.

(i) roles and responsibilities of the Board

The Board is responsible for oversight of the Company and noted that the vision of the Group is “to become a world class ceramic tiles manufacturer”. By utilising high end, imported machinery and technologies – the Board further noted that the Group is the only tile manufacturer in Malaysia capable of producing a range encompassing a broad spectrum of porcelain and ceramic tiles and tile accessories.

The Board Members, in carrying out their duties and responsibilities, are firmly committed to ensuring that set vision be “realised”, that the highest standards of corporate governance and corporate conduct are adhered to, in order that the Company achieves strong financial performance for each financial year, and more importantly delivers long-term and sustainable value to stakeholders.

Key matters reserved for the Board’s approval include the following:-

• Approval of financial results;• Declaration of dividend;• Issuance of new securities;• Annual business plan;• Annual financial budget;• Acquisition or disposal of material fixed assets; and• Acquisition or disposal of group companies.

To ensure the effective discharge of its function and responsibilities, the Board delegates some of the Board’s authorities and discretion on the Executive Directors, representing the Management, as well as to properly constituted Board Committees.

The Board Committees are entrusted with specific responsibilities to oversee the Company’s affairs, in accordance with their respective Terms of Reference. At each Board Meeting, minutes of the Board Committee Meetings are presented to the Board.

The respective Chairman of the Board Committees will also report to the Board on key issues deliberated by the Board Committees.

Corporate Governance Overview Statement (continued)



PriNCiPLE a: BOarD LEaDErSHiP aND EffECtiVENESS (CONtiNuED)

(1) Board responsibilities (Continued)

intended Outcome 1.0 (Continued)

(i) roles and responsibilities of the Board (Continued)

The Board provides stewardship to the Group’s strategic direction and operations, and ultimately the enhancement of long-term shareholders’ value. The Board is primarily responsible for:-

(a) reviewing and adopting a strategic plan for the Company

The Board plays an active role in the establishment of the Company’s strategic plan. The Board reviews and deliberates on the following proposed business plans at great length, as well as challenging Management’s underlying assumptions, prior to approving the same for adoption for the financial year ending 31 December 2018:-

(i) To increase manufacturing flexibility to reduce downtime to switch between different products so as to increase responsiveness to customers’ orders; and

(ii) To increase the efficiency of inventory management.

(b) Overseeing the conduct of the Company’s business

The Board monitors the performance of the Management on a regular basis vide the insertion of relevant agenda item in the Board Meeting. The Managing Director (“MD”) is the conduit between the Board and the Management in ensuring the success of the Company’s governance and management function.

The MD is responsible for day-to-day management of the Company with all powers, discretions and delegations authorised, from time to time, by the Board.

As the first agenda item at every Board of Directors’ Meeting, Mr. Liao Yuan Shun (“Mr. Liao YS”) as the MD would report to the Board on the following matters:-

• Report on the performance of the Group for the quarter under review; and• Strategic initiatives for the next quarter and financial year under review.

(c) Considering Management’s recommendations on key issues including acquisitions and divestments, restructuring, funding and significant capital expenditure

At the Board of Directors’ Meeting during the financial year ended 31 December 2017 (“fYE 2017”), Mr. Liao YS informed that the Management of White Horse Ceramic Industries Sdn. Bhd. plans to readjust the borrowings in United States of America Dollars to mitigate the currency exposure risk.

(d) identifying principal risks and ensuring the implementation of appropriate systems to manage these risks

The Audit Committee has been entrusted by the Board to identify, evaluate, monitor and manage any relevant major risks faced by the Group so that the Group will achieve its business objectives. However, the Board as a whole remains responsible for all the actions of the Audit Committee with regard to the execution of the delegated role and this includes the outcome of the review and disclosure on key risks and internal control in the Company’s annual reports.





(i) roles and responsibilities of the Board (Continued)

(e) reviewing the adequacy and integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines

Given the diverse locations of the operating departments/ branches/ subsidiaries, the Board has established key control processes to ensure there is a sound framework of Group reporting on internal controls and regulatory compliance.

The Internal Audit Department (“iaD”) is required to review the robustness of the key control processes of the operating departments/ branches/ subsidiaries based on the approved Internal Audit Plan agreed by the Audit Committee.

(ii) Key responsibilities of the Chairman

The Board is led by Mr. Liao YS, who is the Chairman and MD of the Company. He is assisted by two (2) Deputy MDs. Although the positions of Chairman and MD are held by the same individual, the roles of the Chairman and MD are clearly demarcated and each has a clear accepted division of responsibilities.

As outlined in the Board Charter, the Chairman is primarily responsible for matters pertaining to the Board and the overall conduct of the Company. The MD together with the Deputy MDs oversee the running of the Group and the implementation of the Board’s decisions, business strategies and policies. There is also a clear demarcation of responsibilities between the roles of the MD and Deputy MDs to ensure a balance of authority and power, such that no one individual has unfettered powers of decision-making.

(iii) Separation of the positions of the Chairman and MD

The Board noted the combination of the positions of the Chairman and the MD is essential for the commercial environment that the Group is currently operating. Such combination of roles render creditability and confidence to third party(ies) on the authority of the Chairman and MD for successful conclusion of commercial deals/ transactions.

As the alternate practice, the Board undertakes the following effort to ensure there is a balance of power and authority on the Board:-

(a) The composition of the Board consists of 30% of Independent Non-Executive Directors, whom, collectively, have the weightage in terms of Board’s decision making and are free to exercise their independent judgement or act in the best interests of the Company, and to safeguard the interest of the minority shareholders.

(b) The decision of the Board shall always be agreed upon by at least majority of the Directors present at the Meeting, therefore, no individual Director can dominate the decision-making of the Board.

(c) A clear division of responsibilities for the role of Chairman of the Board has been outlined in the Board Charter, which are distinct and separate from his roles and responsibilities as MD.






(iv) Company Secretary

In compliance with Practice 1.4 of the New MCCG, the Board is supported by a suitably qualified and competent Company Secretary, i.e. Ms. Chua Siew Chuan, FCIS.

Ms. Chua is a Fellow member of the Malaysian Institute of Chartered Secretaries and Administrators (“MaiCSa”) and is qualified to act as company secretary under Section 235(2) of the CA 2016. Details of the qualifications and experience of the Company Secretary are set out in Item 1.4 of the CG Report, available for viewing in the Group’s corporate website at www.whitehorse.my.

For the FYE 2017, the Company Secretary has attended the relevant continuous professional development programmes as required by MAICSA for practising company secretaries. The Company Secretary also possessed a valid Practising Certificate issued by MAICSA for the FYE 2017.

The appointment and removal of the Company Secretary is a matter for the Board. All Directors have access to the advice and services of the Company Secretaries, who are responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. Moreover, the Company Secretary ensures that the deliberations at the Board Meetings are well captured and minuted. The Company Secretary also plays a key role to facilitate communication between the Board and Management.

In performing their duties, the Company Secretary carries out, amongst others, the following tasks:-

• Statutory duties as required under the CA 2016, Main LR of Bursa Securities and Capital Market and Services Act 2007;

• Facilitating and attending Board Meetings and Board Committee Meetings, respectively; • Ensuring that Board Meetings and Board Committee Meetings, respectively are properly convened

and the proceedings are properly recorded; • Ensuring timely communication of the Board level decisions to the Management for further action; • Ensuring that all appointments to the Board and/or Board Committees are properly made in

accordance with the relevant regulations and/or legislations; • Maintaining records for the purpose of meeting statutory obligations;• Facilitating the provision of information as may be requested by the Directors from time to time

and ensuring adherence to Board policies and procedures;• Facilitating the conduct of the assessments to be undertaken by the Board and/or Board

Committees as well as to compile the results of the assessments for the Board and/or Board Committee’s notation;

• Assisting the Board with the preparation of announcements for release to Bursa Securities and SC; and

• Rendering advice and support to the Board and Management.

For the FYE 2017, the Board is satisfied with the performance and support rendered by the Company Secretary to the Board in discharging its functions.






(v) Circulation of meeting materials

As a standing practice, the notice of the Board Meetings is served at least seven (7) days before each Board Meeting. In compliance with Practice 1.5 of the New MCCG as well as Board Charter of the Company, meeting papers and agenda items are to be circulated at least seven (7) days prior to the Meetings to allow ample time for Directors to consider the relevant information.

A comprehensive meeting papers comprising background, matters arising, research, analysis, findings/updates, results, presentations, recommendations and any other relevant information is prepared and circulated in advance to enable the Board to make considerations, deliberations and decisions.

Minutes of the Board/Board Committees Meetings have been accurately recorded by the Company Secretary to reflect the deliberations, in terms of the issues discussed, and the conclusions thereof in discharging its duties and responsibilities. The Minutes was then tabled at the next Board/Board Committees Meetings for perusal and confirmation. Upon Committee/Directors’ confirmation, the Chairman of the Board/Board Committee Meetings signs the minutes as a correct record of the proceedings and thereafter, the said minutes of all proceedings are kept in the statutory books at the registered office of the Company to be made available for inspection under the CA 2016.


there is demarcation of responsibilities between the Board, Board Committees and Management.

there is clarity in the authority of the Board, its Committees and individual Directors.

(vi) Board Charter

The Board had on 20 November 2013 approved and adopted the Board Charter and the same was uploaded to the Company’s website. The Board recognises the importance to set out the key values, principles and ethos of the Company, as policies and strategy development are based on these considerations. The Board Charter had included the division of responsibilities and powers between the Board and Management as well as the different committees established by the Board.

The Board Charter entails the following salient outlines:-

(1) The Board• Roles and responsibilities of the Board;• Board composition;• Nomination and appointment;• Independence of Directors;• Board Committees;• Role of Chairman of the Board; and• MD.

(2) Board Procedures• Process and procedures for Board Meetings; and• Notice of Meeting, Agenda and Board Papers.

(3) Directors’ Remuneration






(vi) Board Charter (Continued)

(4) Communication• Relationship with Management; and• Relationship with Shareholders.

(5) Application of Board Charter

The Board had on 23 February 2017 reviewed the Board Charter of the Company. The Board will review the Board Charter periodically and make any necessary amendments to ensure they remain consistent with the Board’s objectives, current law and practices.

A full copy of the Board Charter is available for viewing on the Group’s corporate website at www.whitehorse.my/board-charter.


the Board is committed to promoting good business conduct and maintaining a healthy corporate culture that engenders integrity, transparency and fairness.

the Board, Management, employees and other stakeholders are clear on what is considered acceptable behaviour and practice in the company.

(vii) Code of Ethics and Conduct

(a) Business Conduct and Corporate Culture

The Board has adopted a Code of Ethics and Conduct for Directors with effect from 16 February 2015 in order to adhere to the general principles and standards of business conduct and ethical behaviour in the performance and exercise of their responsibilities as Directors of the Company, as well as to uphold good corporate integrity which ultimately serves as a ground rules to the employees of the Company in their discharge of respective duties and responsibilities.

The Code of Ethics and Conduct will be reviewed periodically to ensure the information remains relevant and appropriate.

An abridged copy of this Code of Ethics and Conduct is available for viewing on the Group’s corporate website at www.whitehorse.my/code-of-ethics-and-conduct.

(b) Whistleblowing Policy

The Board has put in place a Whistleblowing Policy to facilitate the whistle blower to report or disclose through established channels about any violations or wrongdoings they may observe in the Group without fear of retaliation and should they act in good faith when reporting such concerns.

This policy does not apply to or change the Company’s policies and procedures for individual employee grievances or complaints relating to job performances, employment terms and conditions. Such concerns will be channeled to the Human Resources Department for further reviewing.






(vii) Code of Ethics and Conduct (Continued)

(b) Whistleblowing Policy (Continued)

Only genuine concerns should be reported under the whistle blowing procedures. The report should be made in good faith with a reasonable belief that the information and any allegations in it are substantially true and the report is not made for personal gain. Malicious and false allegations will be viewed seriously and treated as a gross misconduct and if proven may lead to dismissal.

A copy of this Policy is available for viewing on the Group’s corporate website at www.whitehorse.my/whistleblowing-policy.

(2) Board Composition


Board decisions are made objectively in the best interests of the Company taking into account diverse perspectives and insights.

(i) Composition of the Board

The Board comprises members experienced in ceramic tiles manufacturing and marketing and is supported by other professionals in the legal, operational, marketing, research and development, administration and financial sectors. The e ffective combination of existing technical skills and working experience is vital for the continual success of the Group. The profile of the Directors is presented in another section of the Annual Report.

The Board has ten (10) members. Seven (7) of the ten (10) members are Non-Executive members, three (3) of whom are Independent Non-Executive Directors. The composition of the Board complied with paragraph 15.02 of the Main LR of Bursa Securities. The Independent Non-Executive Directors provide an unbiased and independent view and judgement to the pertinent issues of the Company and the interest of the stakeholders and the Group. The number of Directors reflects fairly the investment of the shareholders in particular the minority shareholders.

The Independent Non-Executive Directors are independent of management and free from any business relationship, which could materially interfere with their independent judgement. Their role is to provide independent view, advice and judgment to ensure a balanced and unbiased decision-making process as well as to safeguard the interest of public shareholders. As the Chairman/MD of the Company is a Non-Independent Executive Director, the Company acknowledges the importance of increasing the number of Independent Directors pursuant to Practice 4.1 of the New MCCG and is currently seeking for potential candidates to ensure the balance of power and authority on the Board.

The Board has identified the Senior Independent Non-Executive Director, Mr. Law Piang Woon to whom concerns of shareholders and other stakeholders may be conveyed.

For the FYE 2017, Mr. Law Piang Woon has not received any concerns raised by any shareholders.




(2) Board Composition (Continued)


(i) Composition of the Board (Continued)

The Board has put in place the following Board Committees to assist in carrying out its fiduciary duties:-

• Audit Committee; • Nomination Committee; and • Remuneration Committee.

All of these Committees have written Terms of Reference clearly outlining their objectives, duties and powers. The final decisions on all matters are determined by the Board as a whole.

(ii) tenure of independent Directors

Practice 4.2 of the New MCCG recommended that the tenure of an Independent Director does not exceed a cumulative term limit of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to service on the Board as a Non-Independent Director.

If the Board intends to retain an Independent Director beyond nine (9) years, it should justify and seek annual shareholders’ approval. If the Board continues to retain the Independent Director after twelfth (12) year, the Board should seek annual shareholders’ approval through a two-tier voting process (subject to the Articles of Association of the Company be amended to provide the same).

The Board subscribes to an open policy on the tenure of Independent Director whereby there should not be an arbitrary tenure be imposed on the Independent Directors. The Board believes that the length of tenure of Independent Directors on the Board does not interfere with their objective and independent judgement or their ability to act in the best interest of the Company.

In view thereof, the Board shall provide justifications and seek shareholders’ approval in the event it proposes to retain an Independent Director who has served the Board in that capacity for more than nine (9) years, upon the prior review and relevant recommendation from the Nomination Committee.

The Company will be seeking shareholders’ approval at the forthcoming Annual General Meeting (“aGM”) for the retention of Mr. Law Piang Woon (“Mr. Law”) who has served the Board as an Independent Non-Executive Director of the Company for a cumulative term of more than twelve (12) years since 19 June 2001.

The Board has vide the Nomination Committee conducted an annual performance evaluation and assessment of Mr. Law who has served as an Independent Non-Executive Director for a cumulative term of more than twelve (12) years and recommended him to continue in office as an Independent Non-Executive Director based on the following justifications:-

(a) Mr. Law has fulfilled the definition of an Independent Director as set out under Paragraph 1.01 of the Bursa Securities’s Main LR;

(b) Mr. Law has not been involved in any business or other relationship which could hinder the exercise of independent judgement, objectivity or his ability to act in the best interests of the Company;

(c) Mr. Law has no potential conflict of interest, whether business or non-business related with the Company;






(ii) tenure of independent Directors (Continued)

(d) Mr. Law has not established or maintained any significant personal or social relationship, whether direct or indirect, with the MD and Executive Directors, major shareholders or management of the Company (including their family members) other than normal engagements and interactions on a professional level consistent with his duties and expected of him to carry out his duties as an Independent Non-Executive Director;

(e) Mr. Law has contributed sufficient time and efforts in his capacity as the designated Senior Independent Non-Executive Director, Chairman of the Nomination Committee, as well as a member of Remuneration Committee and Audit Committee; and

(f) Mr. Law does not derive any remuneration and other benefits apart from Directors’ fees and benefits payable to the Non-Executive Directors that are approved by the shareholders.

(g) Mr. Law continues to maintain his professional accountancy qualifications as Certified Public Accountants, Australia, Chartered Accountant in Singapore, Fellow of Chartered Tax Institute in Malaysia, and Fellow of the Association of Chartered Certified Accountants.

(iii) appointment of the Board and Senior Management

The duties and responsibilities of the Nomination Committee are as follows:-

(a) To recommend to the Board of Directors, candidates for all directorships to be filled by the shareholders or the Board of Directors. In making its recommendations, the Nomination Committee should consider the candidates’ the following:-

• Having regard to mix of skills, character, experience, integrity, competence, time commitment pursuant to Paragraph 2.20A of the Main LR of Bursa Securities;

• knowledge, expertise and experience;• professionalism;• gender diversity; and • in the case of candidates for the position of Independent Non-Executive Directors, the

Nomination Committee should also evaluate the candidates’ ability to discharge such responsibilities/functions as expected from Independent Non-Executive Directors.

(b) To consider, in making its recommendations, candidates for directorships proposed by the MD and, within the bounds of practicability, by any other senior executive or any Director or Shareholder.

(c) To recommend to the Board of Directors, the nominees to fill the seats on Board Committees.

(d) To assess the effectiveness of the Board of Directors as a whole and each individual Directors/Committees of the Board.






(iii) appointment of the Board and Senior Management (Continued)

(e) To review annually, the term of office and performance of the Audit Committee and each of its members to determine whether the Audit Committee and members have carried out their duties in accordance with the Terms of Reference of the Audit Committee.

(f) To review training programmes for the Board of Directors and to facilitate Board induction and training programmes, including induction training for new Board members.

(g) To act in line with the directions of the Board of Directors.

(h) To consider and examine such other matters as the Nomination Committee considers appropriate.

(iv) Board Diversity Policy

The Board affirms its commitment to boardroom diversity as a truly diversified Board to enhance the Board’s effectiveness, creativity and capacity to thrive in good times and weather tough times.

Bearing in mind that an appointment to the Board is a long term commitment to the Company, the Board has not set any short term target or measure for boardroom diversity, but nevertheless works to ensure that there is no discrimination on the basis of, but not limited to, ethnicity, race, age, gender, nationality, political affiliation, religious affiliation, sexual orientation, marital status, education, physical ability or geographic region, during the recruitment of new Board members.

The Board has indicated its commitment to boardroom diversity by the following appointments:-

Gender Diversity

Ms. Chew Pei Fang is the Independent Non-Executive Director of the Company since 20 June 2001. Ms. Rosita Yeo Swat Geok, has been appointed as an Independent Non-Executive Director to the Board on 19 April 2013.

Age Diversity

The Board believes that the Directors with diverse age profile will be able to provide a different perspective and bring vibrancy to the Group’s strategy making process.

The age profile of the Directors were ranging from 54 to 78 years of age, which underlies the Board’s commitment to age diversity at the Board level appointment.






(iv) Board Diversity Policy (Continued)

Diversity in Nationality and Geographic Region

Mindful of global mobility of talents, the Board does not restrict its composition to just Malaysians. The Board endeavour to source and appoint Directors of diverse nationality and of trans-national background and experiences:-

• Mr. Liao YS, the Chairman and MD, is a Taiwanese who has more than 35 years of experience in the ceramic industry.

• Mr. Cheng Soon Mong, the Deputy MD, is a Singaporean with over 40 years of experience in the ceramic tiles business.

• Mr. Liao Jung Chu, a Non-Independent Non-Executive Director, is a Taiwanese who has more than 44 years of experience in the ceramic tiles industry.

• Mr. Liao Shen Hua, another Non-Independent Non-Executive Director, is a Taiwanese who is responsible for the overall manufacturing operation of one of the key subsidiary of the Company.

(v) Nomination Committee

The Nomination Committee was set up on 8 February 2002. The term of office of the Nomination Committee is three (3) years and may be re-nominated and re-appointed by the Board. During the financial year under review, the Nomination Committee met once and the meeting attendance is as follows:-

MembersMembership/Designation

No. ofMeetingsattended %

Law Piang Woon ChairmanSenior Independent Non-Executive Director

1/1 100

Liao Jung Chu MemberNon-Independent Non-Executive Director

1/1 100

Chew Pei Fang MemberIndependent Non-Executive Director

1/1 100

The Board is of the opinion that Mr. Law Piang Woon, a Senior Independent Non-Executive Director, is ideal as Chairman of the Nomination Committee, given his experience and time commitment, as well as in compliance with.

The Nomination Committee has undertaken the following activities during the financial year:-

(a) Examined the size of the Board, mix of skills, independence and time commitment based on the commercial needs of the Company;

(b) Conducted the Effectiveness of the Board evaluation to assess the effectiveness of the Board as a whole and Board Committees in accordance with the three (3) key principles of the New MCCG;

(c) Evaluated the contribution and performance of each individual Director;






(v) Nomination Committee (Continued)

(d) Evaluated the contribution and performance of the Audit Committee and each individual Audit Committee member;

(e) Review and recommendation to the Board, the adoption of “Declaration by Independent Directors” to confirm the “independence” of the Independent Directors on an annual basis;

(f) Review and recommendation to the Board, the re-election of the Directors who will be retiring at the forthcoming AGM of the Company; and

(g) Review and recommendation to the Board, the retention of the Independent Non-Executive Director in accordance with the New MCCG.

Consequent to the New MCCG, the Terms of Reference of the Nomination Committee has been revised and updated by the Board on 6 April 2018. An updated copy of this Terms of Reference is available for reviewing at the Group’s corporate website at www.whitehorse.my.

Directors’ Training

In order for the enlarged White Horse Berhad Group to remain competitive, the Board ensures that the Directors continuously enhance their skills and expand their knowledge to meet the challenges of the Board.

The Board has cultivated the following best practices:-

• All newly appointed Directors are to attend the Mandatory Accreditation Programme as prescribed by the Main LR of Bursa Securities within the stipulated timeframe;

• All Directors are encouraged to attend talks, training programmes and seminars to update their knowledge on the latest regulatory and business environment;

• The Directors may be requested to attend additional training courses according to their individual needs as a Director or member of Board Committees on which they serve;

• The Directors are briefed by the Company Secretary on the letters issued by Bursa Securities at every Board meeting.

All members of the Board have attended the Mandatory Accreditation Programme prescribed by Bursa Securities.

Upon assessing the training needs of the Directors, the Board recognised that continuing education would be the way forward in ensuring its members are continually equipped with the necessary skills and knowledge to meet the challenges ahead.







Directors’ Training (Continued)

As at the date of this Statement, the Board members had participated in the following continuing education programmes:-

Name of Directors Dates Description of training Programmes

Liao Yuan Shun 24 August 2017 • Introduction to CA 2016 and the New MCCG

Teo Swee Teng 24 August 2017 • Introduction to CA 2016 and the New MCCG

Cheng Soon Mong 24 August 2017 • Introduction to CA 2016 and the New MCCG

Teo Kim Lap 24 August 2017 • Introduction to CA 2016 and the New MCCG

Liao Shen Hua 24 August 2017 • Introduction to CA 2016 and the New MCCG

Teo Kim Tay 24 August 2017 • Introduction to CA 2016 and the New MCCG

Liao Jung Chu 24 August 2017 • Introduction to CA 2016 and the New MCCG

Law Piang Woon 24 August 2017

6 September 2017

11 December 2017

14 December 2017

• Introduction to CA 2016 and the New MCCG

• New MCCG: A New Dimension

• Latest Developments in Malaysian Financial Reporting Standards (“MfrS”) 15 and MFRS 16 organised by the Malaysian Institute of Accountants (“Mia”)

• Recent Tax Cases 2017 organised by The Chartered Tax Institute of Malaysia

Chew Pei Fang 24 August 2017

16 October 2017


• Case Study Workshop for Independent Directors

Rosita Yeo Swat Geok 3 August 2017

24 August 2017

6 September 2017

16 October 2017

• Driving Financial Integrity and Performance - Enhancing Financial Literacy


• New MCCG: A New Dimension

• Case Study Workshop for Independent Directors







Directors’ Training (Continued)

In addition, the Company Secretary and the External Auditors update the Board on a regular basis the respective changes and amendments to regulatory requirements and laws and accounting standards to help Directors keep abreast of such developments.

2018 Training Needs

Upon review of the training needs of the Directors for the FYE 31 December 2017 and recognising the need to keep abreast with the fast changing business and regulatory environment, the Board has encouraged its members to attend at least one (1) continuing education programme.


Stakeholders are able to form an opinion on the overall effectiveness of the Board and individual Directors.

In compliance with Practice 5.1 of the New MCCG, on behalf of the Board, the Nomination Committee conducted the following assessments annually and subsequently reported the respective results to the Board for notation:-

(a) Directors’ self-assessment

In conducting the evaluation, the following main criteria were adopted by the Nomination Committee:-

• Contribution to interaction;• Quality of input; and• Understanding of role.

Based on the evaluation conducted for the FYE 2017, the Nomination Committee was satisfied with the performance of the individual Board of Directors.

(b) Evaluation on the effectiveness of the Board of Directors and the Committees of the Board

In conducting the evaluation, the following main criteria were adopted by the Nomination Committee:-

• Board mix and composition;• Quality of information and decision-making; and• Boardroom activities.

Based on the evaluation conducted for the FYE 2017, the Nomination Committee was satisfied with the performance of the Board and Committees of the Board.

The Nomination Committee has been tasked to review the attendance of the Directors at Board and/or Board Committee Meetings. Upon review, the Nomination Committee noted the Board members have devoted sufficient time and effort to attend Board and/or Board Committee Meetings for the FYE 2017.






(b) Evaluation on the effectiveness of the Board of Directors and the Committees of the Board (Continued)

For the FYE 2017, majority of the Board members achieved a 100% attendance at the Board and Committees Meetings held. The attendance record of each Director at Board Meetings during the last financial year is as follows:-

Board of Directors DesignationNo. of meetings

attended

Liao Yuan Shun Executive Chairman 4/4

Teo Swee Teng Deputy Managing Director 4/4

Cheng Soon Mong Deputy Managing Director 4/4

Liao Jung Chu Non-Independent Non-Executive Director 4/4

Teo Kim Lap Non-Independent Non-Executive Director 3/4

Liao Shen Hua Non-Independent Non-Executive Director 4/4

Teo Kim Tay Non-Independent Non-Executive Director 4/4

Law Piang Woon Senior Independent Non-Executive Director 4/4

Chew Pei Fang Independent Non-Executive Director 4/4

Rosita Yeo Swat Geok Independent Non-Executive Director 4/4

(c) annual assessment of independence

The Board has set out policies and procedures to ensure effectiveness of the Independent Non-Executive Directors on the Board, including new appointments. The Board assesses the independence of the Independent Non-Executive Directors annually, taking into account the individual Director’s ability to exercise independent judgment at all times and to contribute to the effective functioning of the Board.

The Independent Non-Executive Directors are not employees and they do not participate in the day-to-day management as well as the daily business of the Company. They bring an external perspective, constructively challenge and help develop proposals on strategy, scrutinise the performance of Management in meeting approved goals and objectives, and monitor risk profile of the Company’s business and the reporting of monthly business performances.

The Board noted that Letters of Declaration has been executed by the following Independent Non-Executive Directors of the Company, confirming their independence pursuant to the Main LR of Bursa Securities as well as the New MCCG and that they have undertaken to inform the Company immediately should there be any change which could interfere with the exercise of their independent judgement or ability to act in the best interest of the Company:-

• Mr. Law Piang Woon;• Ms. Chew Pei Fang; and• Ms. Rosita Yeo Swat Geok.







(c) annual assessment of independence (Continued)

Based on the outcome of the Directors’ self-assessment, the evaluation on the effectiveness of the Board as a whole, as well as the additional assessment on the independence of the Independent Directors, the Board is satisfied with the level of independence demonstrated by the Independent Non-Executive Directors and their ability to act in the best interest of the Company.

The Board considers that its Independent Directors provide an objective and independent views on various issues dealt with at the Board and Board Committee level. All Non-Executive Directors are independent of management and free from any relationship. The Board is of the view that the current composition of Independent Directors fairly reflects the interest of minority shareholders in the Company through the Board representation.

(d) re-election of Directors

In accordance with Article 94 of the Articles of Association of the Company, it is stated that one-third (1/3) of the Directors shall retire from office and shall be eligible for re-election at each AGM. All Directors shall retire from office at least once in each three (3) years but shall be eligible for re-election. As such, pursuant to Article 94, the following Directors are to retire at the forthcoming Twentieth AGM of the Company (hereinafter referred to as “the retiring Directors”):-

• Mr. Liao Shen Hua; and• Mr. Liao Yuan Shun

Ms. Chew Pei Fang who retires in accordance with Article 94 of the Articles of Association, has expressed her intention not to seek for re-election. Hence, she will retain office until the close of the Twentieth AGM.

For the Retiring Directors, the Nomination Committee has conducted the following assessment based on the criteria as prescribed by the Main LR of Bursa Securities:-

• Integrity and professionalism; • Time commitment to discharge his roles;• Character; and• Experience

The Nomination Committee has further considered the following additional criteria:-

• Results obtained from the Self Performance Evaluation;• Supply of relevant and timely information to the Board;• Support rendered to the Group MD; and• Adequacy of functional knowledge as Executive Director overseeing the function of Human

Resources and Finance.

Upon review, the Nomination Committee was satisfied with the performance of the Retiring Directors. The Board has in turn concurred the same and resolved that both Mr. Liao Shen Hua and Mr. Liao Yuan Shun be recommended to the shareholders for approval at the forthcoming Twentieth AGM.



(3) remuneration


the level and composition of remuneration of Directors and senior management take into account the Company’s desire to attract and retain the right talent in the Board and senior management to drive the Company’s long-term objectives.

Remuneration policies and decisions are made through a transparent and independent process.

(i) remuneration Committee

The Remuneration Committee was set up on 8 February 2002. The term of office of the Remuneration Committee is three (3) years and may be re-nominated and re-appointed by the Board. During the financial year under review, the Remuneration Committee met once and the meeting attendance is as follows:-

MembersMembership/Designation

No. ofMeetingsattended %

Liao Yuan Shun ChairmanManaging Director

1/1 100

Law Piang Woon MemberSenior Independent Non-Executive Director

1/1 100

Chew Pei Fang MemberIndependent Non-Executive Director

1/1 100

The Board is of the opinion that Mr. Law Piang Woon, a Senior Independent Non-Executive Director, is ideal as Chairman of the Remuneration Committee, given his experience and time commitment, as well as in compliance with.

The Remuneration Committee has undertaken the following activities during the financial year:-

(a) Reviewed and recommended the remuneration packages for the Executive Directors and Non-Independent Non-Executive Directors for the FYE 2017;

(b) Reviewed and recommended the Directors’ fees for the FYE 2017; and(c) Reviewed and recommended the benefits payable to the Non-Executive Directors pursuant to

Section 230(1)(b) of the CA 2016.

The Terms of Reference of the Remuneration Committee is available for viewing at the Group’s corporate website at www.whitehorse.my.




(3) remuneration (Continued)


(ii) Directors’ remuneration Policy

The Board believes in a remuneration policy that fairly supports the Directors’ responsibilities and fiduciary duties in steering the Group to achieve its long-term goals and enhance shareholders’ value. The Board’s objective in this respect is to offer a competitive remuneration package in order to attract, develop and retain its Directors and will endeavor to establish a Directors’ Remuneration Policy in the near future.

The Nomination Committee is responsible for reviewing and making recommendations to the Board for approval, the framework and remuneration packages of the Non-Executive Directors in all forms, drawing from outside advice whenever necessary prior to making the relevant recommendations to the Board such that the levels of remuneration are sufficient to attract and retain the Directors needed to run the Company successfully. In its review, the Nomination Committee considers various factors including the Directors’ fiduciary duties, time commitments expected of them and the Company’s performance.

For the FYE 2017, a total Directors’ fees of RM150,000/- to the Non-Executive Directors have been recommended to the shareholders for approval at the forthcoming AGM of the Company.


Stakeholders are able to assess whether the remuneration of Directors and senior management is commensurate with their individual performance, taking into consideration the Company’s performance.

(iii) Details of each individual Director’s remuneration for the fYE 2017

In compliance with Practice 7.1 of the New MCCG, there is detailed disclosure on named basis for the remuneration of individual Directors.

For the FYE 2017, the aggregate of remuneration received and receivable by the Executive Directors and Non-Executive Directors of the Company and the Group categorised into appropriate components are as follows:-

Received from the Company

Name of Director SalariesrM’000

feesrM’000

Benefits-in-kind rM’000

OthersrM’000

totalrM’000

Non-Executive Directors

Law Piang Woon 2.5 50 – – 52.50

Chew Pei Fang 2.5 50 – – 52.50

Rosita Yeo Swat Geok 2.5 50 – – 52.50

Total 7.5 150 – – 157.50






(iii) Details of each individual’s director’s remuneration for the fYE 2017 (Continued)

Received on Group Basis

Name ofDirector Salaries

rM’000fees

rM’000Bonus

rM’000

Contribution to defined

contributionplan

rM’000

Benefits-in-kind rM’000

totalrM’000

Executive Directors

Liao Yuan Shun 102 60 11 9 31 213

Teo Swee Teng 252 80 36 31 29 428

Cheng Soon Mong 252 80 36 12 53 433

Non-Executive Directors

Teo Kim Lap 144 80 18 15 8 265

Liao Shen Hua 102 60 11 9 22 204

Teo Kim Tay 144 80 18 15 50 307

Liao Jung Chu 72 60 10 9 3 154

Law Piang Woon 3 50 – – – 53

Chew Pei Fang 3 50 – – – 53

Rosita Yeo Swat Geok 3 50 – – – 53

total 1077 650 140 100 196 2163

(iv) Details of top five (5) senior management’s remuneration for the fYE 2017

The details of the remuneration of top five (5) Senior Management in the bands of RM50,000/- for the FYE 2017 were as follows:-

range of remuneration Number of top five (5) Senior Management

RM150,001 – RM200,000 2

RM201,001 – RM250,000 –

RM250,001 - RM300,000 1

RM 300,001 – RM350,000 –

RM350,001 – RM400,000 2

total 5

The Board is of the view that it is inappropriate to disclose the names and detailed remuneration of Senior Management staff other than the Executive Directors given the competitive human resources environment as such disclosure may give rise to recruitment and talent retention issues.



PriNCiPLE B: EffECtiVE auDit aND riSK MaNaGEMENt



there is an effective and independent audit Committee.

the Board is able to objectively review the audit Committee’s findings and recommendations. the Company’s financial statement is a reliable source of information.

(1) audit Committee

The membership, a summary of the activities of the Audit Committee and internal audit function and activities are stated in the Audit Committee Report of this Annual Report on Page 44.

As at the date of this Statement, the Chairperson of the Audit Committee is Ms. Rosita Yeo Swat Geok, an Independent Non-Executive Director, while Liao YS is the Non-Independent Non-Executive Chairman of the Board.

No appointment of former key audit partners as audit Committee/ Board Member

Practice 8.2 of the New MCCG requires the Audit Committee to have a policy that requires a former key audit partner to observe a cooling-off period of at least two (2) years before being appointed as a member of the Audit Committee. The Terms of Reference of the Audit Committee has been updated accordingly in order for the Audit Committee to formalise such policy.

As a matter of practice, the Audit Committee has recommended to the Nomination Committee not to consider any key audit partner as a candidate for Board Directorship/ Audit Committeeship to solidify the Audit Committee’s stand on such Policy.

assessment of Suitability and independence of External auditors

In compliance with Practice 8.3 of the New MCCG, for the FYE 2017, the Audit Committee has formalised the procedures to assess the suitability, objectivity and independence of external auditors vide an annual assessment of the suitability and independence of the external auditors.

In its assessment of “Suitability” of the external auditors, the Audit Committee considered, inter alia, the following factors:-

• The external auditors have the adequate resources, skills, knowledge and experience to perform their duties with professional competence and due care in accordance with approved professional auditing standards and applicable regulatory and legal requirements;

• To the knowledge of the Audit Committee, the external auditors do not have any record of disciplinary actions taken against them for unprofessional conduct by the MIA which has not been reversed by the Disciplinary Board of MIA;

• The engagement partner has not served for a continuous period of more than five (5) years with the Company;

• The external audit firm has the geographical coverage required to audit the Company;• The external audit firm advises the Audit Committee on significant issues and new developments

pertaining to risk management, corporate governance, financial reporting standards and internal controls on a timely basis;

• The external audit firm consistently meets the deadlines set by the Company;• The level of quality control procedures in the external audit firm, including the audit review

procedures; and• The external audit scope is adequate to cover the key financial and operational risks of the

Company.



PriNCiPLE B: EffECtiVE auDit aND riSK MaNaGEMENt (CONtiNuED)



there is an effective and independent audit Committee. (Continued)

the Board is able to objectively review the audit Committee’s findings and recommendations. the Company’s financial statement is a reliable source of information. (Continued)

(1) audit Committee (Continued)

assessment of Suitability and independence of External auditors

In its assessment of “Objectivity” of the external auditors, the Audit Committee considered, the following factor:-

• The nature and extent of the non-audit services rendered and the appropriateness of the level of fees.

In its assessment of “Independence” of the external auditors, the Audit Committee considered, inter alia, the following factors:-

• The lead engagement partner has not served for a continuous period of more than five (5) years with the Company;

• The Audit Committee receives written assurance from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements;

• Tenure of the current external auditors.

The Audit Committee noted that for the FYE 2017, Messrs. Ernst & Young, the external auditors of the Company confirmed that the engagement quality control reviewer and members of the engagement team in the course of their audits were and had been independent for the purpose of the audit in accordance with the terms of relevant professional and regulatory requirements.

Upon completion of its assessment, the Audit Committee was satisfied with Messrs. Ernst & Young’s technical competency and audit independence during the financial year under review and recommended to the Board the re-appointment of Messrs. Ernst & Young as external auditors for the financial year ending 31 December 2018. The Board has in turn, has recommended the same for shareholders’ approval at the forthcoming AGM of the Company.






Companies make informed decisions about the level of risk they want to take and implement necessary controls to pursue their objectives.

the Board is provided with reasonable assurance that adverse impact arising from a foreseeable future event or situation on the Company’s objectives is mitigated and managed.

(1) risk Management and internal Control framework

framework to Manage risks

The Risk Management Committee was set up in November 2004, comprising members from the Executive Directors and Management representing the key departments.

The objective of the Risk Management Committee is to provide assistance to the Board in discharging its fiduciary responsibilities relating to safeguarding of shareholders’ capital through a structured approach to risk management. The Risk Management Committee has since held one (1) meeting in the FYE 2017. Reviews were made on existing mitigation plans of certain operational risks. New areas of operational risks were also identified and responsibilities were delegated to plan appropriate and timely actions.

The Risk Management Committee has established an Enterprise Risk Management Framework to determine the Company’s level of risk tolerance and actively identity, assess and monitor key business to safeguard shareholders’ investments.

The Statement on Risk Management and Internal Control of the Group as set out on Pages 52 to 53 of this Annual Report provides an overview of the state and features of risk management and internal controls within the Group, in compliance with Practice 9.2 of the New MCCG.

For the FYE 2017, the Board opined that the risk management and internal controls of the Group were effective and adequate.






Companies have an effective governance, risk management and internal control framework and stakeholders are able to assess the effectiveness of such a framework.

internal audit function

The internal audit function is independent of the operations of the Group and provides reasonable assurance that the Group’s system of internal control is satisfactory and operating effectively. The internal auditors adopt a risk-based approach towards the planning and conduct of audits, which are consistent with the Group’s framework in designing, implementing and monitoring its internal control system. An Internal Audit Planning Memorandum, setting out the internal audit work expected to be carried out for a period of one (1) year, is tabled to the Audit Committee at the beginning of the year.

The Company has its own internal audit function to identify and assess the principal risks and to review the adequacy and effectiveness of the internal controls of the Group. Areas for improvement were highlighted and the implementation of recommendations was monitored. None of the internal control weaknesses has resulted in any material losses, contingencies or uncertainties that would require disclosure in the Annual Report.

The In-House Internal Auditors communicate regularly with and report directly to the Audit Committee. For the FYE 2017, the In-House Internal Auditors met up twice with the Audit Committee.

formal assessment of internal auditors

For the FYE 2017, the Audit Committee has formalised the procedures to assess the performance of internal auditors vide an annual assessment of the suitability of the internal auditors.

In its assessment, the Audit Committee considered, inter alia, the following assessment criteria:-• Understanding;• Charter and structure;• Skills and experiences;• Communication; and• Performance.

Upon completion of its assessment, the Audit Committee was satisfied with the in-house internal auditors’ technical competency and audit independence during the financial year under review.




PriNCiPLE C: iNtEGritY iN COrPOratE rEPOrtiNG aND MEaNiNGfuL rELatiONSHiP WitH StaKEHOLDErS

(1) Communication with Stakeholders


there is continuous communication between the Company and stakeholders to facilitate mutual understanding of each other’s objectives and expectations.

Stakeholders are able to make informed decisions with respect to the business of the Company, its policies on governance, the environment and social responsibility.

In compliance with Practice 11.1 of the New MCCG, the Board ensures that there is effective, transparent and regular communication with its stakeholders through a variety of communication channels as follows:-

(a) Shareholders’ Communication and Investor Relations

The Company is committed to on-going communication across its entire shareholder base, whether institutional investors, private or employee shareholders. This is achieved principally through annual and quarterly reports and the AGM and timely dissemination of information on significant company developments and price sensitive information in accordance with the Main LR of Bursa Securities. All the Directors were present at the Nineteenth AGM of the Company held on 26 May 2017 to engage with the shareholders personally and proactively.

The proceedings of the AGM included the presentation of the Company’s operating and financial performances for the financial year under review, the presentation of financial statements to the shareholders, and a question and answer session in which the Chairman of the Meeting would invite shareholders to raise questions on the Company’s financial statements and other items for adoption at the AGM, before putting a resolution to vote. The Executive Directors ensure that sufficient opportunities are given to shareholders to raise issues relating to the affairs of the Company and that adequate responses are given.

All Non-Executive Directors abstained from voting on the resolution concerning their remuneration. The results of all the resolutions set out in the Notice of the Twentieth AGM will be announced on the same day to the Bursa Securities, which is accessible on the Bursa Securities’ website.

The Board ensures that full information of the Directors who are retiring at the AGM and willing to serve if re-elected are disclosed in the Notice of the AGM.

The explanatory notes facilitating full understanding and evaluation of issues involved in the proposed resolutions accompanying each item of special business is included in the Notice of the AGM.


PriNCiPLE C: iNtEGritY iN COrPOratE rEPOrtiNG aND MEaNiNGfuL rELatiONSHiP WitH StaKEHOLDErS (CONtiNuED)

(1) Communication with Stakeholders (Continued)


(b) Leverage on Information Technology for Effective Dissemination of Information

The Company’s website incorporates an Investor Relations section which provides all relevant information on the Company and is accessible by the public. This Investor Relations section enhances the Investor Relations function by including all announcements made by the Company, annual reports as well as the financial information of the Company.

The announcement of the quarterly financial results is also made via Bursa LINK immediately after the Board’s approval. The Board discloses to the public all material information necessary for informed investment and takes reasonable steps to ensure that all shareholders enjoy equal access to such information.

(c) Downloadable “Tiles Handbook”

The Board noted the Group has developed a unique “Tiles Handbook”, which is downloadable from the Group’s website at www.whitehorse.my. The said Handbook focuses on the various aspects of ceramic tiles such as characteristics of the tiles, tips for choosing appropriate tiles prior to purchase, types of checks to be made before laying the tiles, methods of laying the tiles as well as care and maintenance of the tiles.

(d) White Horse Ceramic App

This mobile application enables the public to quickly and easily view the Group’s latest ceramic wall tiles, ceramic floor tiles and porcelain tiles series. It is downloadable from the Group’s website at www.whitehorse.my; by way of scanning of QR Code; purchase from Apple App Store or Download vide Google Playstore.

(e) Investor Relations

During the FYE 2017, the Group has invited investors from financial institutions to our manufacturing facilities for visitation and discussions.



PriNCiPLE C: iNtEGritY iN COrPOratE rEPOrtiNG aND MEaNiNGfuL rELatiONSHiP WitH StaKEHOLDErS (CONtiNuED)

(2) Conduct of General Meetings (Continued)


Shareholders are able to participates, engage the Board and senior management effectively and make informed voting decisions at General Meetings.

(i) Notice of aGM

In accordance with the Articles of Association of the Company, a notice to convene the AGM is issued by the Board. Notice is given at least fourteen (14) days before the meeting or at least twenty one (21) days before the meeting where any special resolution is to be proposed or where it is an AGM. The notice is to be published in at least one (1) nationally circulated Bahasa Malaysia or English daily newspaper and in writing to Bursa Securities.

The Notice of the Twentieth AGM together with the Annual Report are despatched to shareholders at least twenty-eight (28) days prior to the meeting date. Sufficient notice period is given to the shareholders in order for them to schedule their time to attend the Company’s AGM.

(ii) attendance of Directors at General Meetings

All the members of the Board will be presence to provide better opportunity for the shareholders to effectively engage with each Board member.

(iii) Poll Voting

The Company had conducted the poll voting manually for all resolutions set out in the Notice of Nineteenth AGM for which the Nineteenth AGM held on 26 May 2017. The Company has appointed an independent scrutineer to validate the votes cast at the Nineteenth AGM. The poll results were announced by the Company to the Bursa Securities on the same day.

The Board will consider and explore the suitability and feasibility of adopting electronic voting in coming years to facilitate greater shareholders participation at general meetings and to ensure accurate and efficient outcomes of the poll voting process.



KEY fOCuS arEaS aND futurE PriOritiES

Looking ahead to financial year ending 2018 and 2019, the Board and its respective committees will:-

• Focus on major strategic issues to ensure sustainability and growth; • Continue to monitor succession planning for the senior leadership team, to ensure a healthy pipeline of talent

is emerging for future senior executive management;• Consider other variety of approaches and independent sources to identify suitable candidate for appointment

of Directors, should the need arise; and• Continue to review the balance, experience and skills of the Board.

CONCLuSiON

The Board is satisfied that, it complies substantially with the Practices of the MCCG 2012 and New MCCG, respectively in their application period. The CG Report which sets out the application of each Practice of New MCCG is available for viewing in the Group’s corporate website at www.whitehorse.my.

This Statement and the CG Report have been approved by the Directors in accordance with a Resolution of the Board of Directors passed on 6 April 2018.



CONCLuSiON (CONtiNuED)

additional Compliance information

The following information is provided in compliance with Paragraph 9.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad:-

1. Material Contracts

There were no material contracts entered into by the Company and its subsidiaries (not being contracts entered into in the ordinary course of business) involving the interests of Directors, Chief Executive and/or major shareholders, either still subsisting at the end of the financial year ended 31 December 2017 or entered into since the end of the previous financial year.

2. utilisation of Proceeds

The Company did not raise funds through any corporate proposal during the financial year under review.

3. audit and Non-audit fees

For the financial year ended 31 December 2017, Messrs. Ernst & Young and Ernst & Young Tax Consultants Sdn. Bhd., the external auditors and tax agent of the Company respectively, have rendered certain audit and non-audit services to the Company and Group, a breakdown of which is listed below for information:-

Company(rM)

Group(rM)

audit services rendered

Statutory audit 51,000 166,000

Other audit fees:

Key audit matters 3,000 8,000

Malaysian Financial Reporting Standards (“MfrS”) 9 andMFRS 15 impact analysis review

8,000 3,000

Subtotal 62,000 177,000

Non-audit services rendered

Messrs. Ernst & Young

Reading of annual report 3,000 8,000

Review of Statement on Risk Management and Internal Control 8,000 3,000

Review of impairment assessment by EY’s Transaction andAdvisory Services Department

20,000 20,000

Ernst & Young tax Consultants Sdn. Bhd.Preparation and submission of Forms C

6,000 52,500

Subtotal 37,000 83,500

Total 99,000 260,500

4. recurrent related Party transactions of a revenue or trading Nature (“rrPt”)

The information on RRPT for the financial year under review is disclosed in Note 29 of the Audited Financial Statements in this Annual Report.



AuDIT COMMITTEE REPORT

The Board of Directors of White Horse Berhad (“White Horse” or “the Company”) is pleased to present the Audit Committee (“aC”) Report which provides insights as to the manner the AC discharged its functions for the Group for the financial year ended 31 December 2017 (“fYE 2017”), in compliance with Paragraph 15.15(1) of the Main Market Listing Requirements (“Main Lr”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) as well as the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) (where applicable) and the New Malaysian Code on Corporate Governance issued with effective from 26 April 2017 (“New MCCG”) for the applicable period between 26 April 2017 to 31 December 2017 and/or date of this Statement.

Composition

The AC comprises four (4) members, which consist of three (3) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. This complies with Paragraph 15.09(1)(a) and (b) of the Main LR of Bursa Securities.

aC member – Mr. Law Piang Woon, CA (Malaysia), CA (Singapore), FCCA, FCTIM

Mr. Law is a Chartered Accountant and tax agent by profession. He is a member of the Malaysian Institute of Accountants and Certified Public Accountant Australia, Chartered Accountant of the Institute of Singapore Chartered Accountants, Fellow of the Association of Chartered Certified Accountants and Chartered Tax Institute of Malaysia, respectively. This complies with Paragraph 15.09(1)(c) of the Main LR of Bursa Securities. The rotation of AC Chairperson from Mr. Law Piang Woon to Ms. Rosita Yeo Swat Geok during FYE 2017 is to refresh the composition of AC and provide better objectivity to the AC as a whole.

In compliance with Practice 8.1 of the New MCCG, the Chairperson of the AC is not the Chairman of the Board.

review of term of Office and Performance

For the FYE 2017, the AC has completed the self and peer assessment for the review by the Nomination Committee (“NC”). Upon review, the NC noted the AC and its members have carried out their duties in accordance with the Terms of Reference of AC, thereby complying with Paragraph 15.20 of the Main LR of Bursa Securities.

Formal assessment on the External Auditors

In compliance with Practice 8.3 of the new MCCG, the AC has established policies and procedures to assess the suitability, objectivity and independence of the external auditors on annual basis, prior to making their recommendation to the Board whether to seek shareholders’ approval at next Annual General Meeting (“aGM”) for the re-appointment of external auditors for the ensuing year. Upon completion of its assessment, the AC was satisfied with Messrs. Ernst & Young’s technical competency i.e. effectiveness, suitability and independence during the financial year under review and recommended to the Board the re-appointment of Messrs. Ernst & Young as external auditors for the financial year ending 31 December 2018. The Board has in turn, has recommended the same for shareholders’ approval at the forthcoming AGM of the Company.


terms of reference (“tOr”)

In line with the recent amendments of Main LR of Bursa Securities and released of New MCCG by the Securities Commission Malaysia, the TOR of the AC has been reviewed and revised by the AC and recommended the same to the Board of Directors’ approval for adoption. Accordingly, the revised TOR of the AC was approved by the Board of Directors on 6 April 2018. The two (2) major amendments to the TOR of the AC were to incorporate the following Practices as stipulated in the new MCCG:-

• Practice 8.1 of the new MCCG which stipulates that Chairman of the Audit Committee is not the Chairman of the Board; and

• Practice 8.2 of the new MCCG requires the AC to have a policy that requires a former key audit partner to observe a cooling-off period of at least two (2) years before being appointed as a member of the AC.

The updated TOR of the AC is available on the Group’s website at www.whitehorse.my.

Meetings

The AC held a total of four (4) meetings during the FYE 2017. The details of attendance of the AC Meetings during the financial year were as below:-

Name Designation

No. ofMeetingsattended

Percentage ofattendance (%)

Rosita Yeo Swat Geok(Chairperson)

Independent Non-Executive Director 2/2 100

Law Piang Woon(Member)

Senior Independent Non-Executive Director 4/4 100

Liao Jung Chu(Member)

Non-Independent Non-Executive Director 4/4 100

Chew Pei Fang(Member)

Independent Non-Executive Director 4/4 100

For the FYE 2017, the AC Meetings were held as follows:-

No. aC Meeting Date

Private session with the External auditors without Executive Directors and Management

(1) 23 February 2017 –(2) 26 May 2017 –(3) 24 August 2017 √

(4) 23 November 2017 –

Audit Committee Report (continued)



Private Sessions

As a standing practice, the AC would hold private session with the external auditors without the presence of the Executive Directors and Management (“Private Session”). For the FYE 2017, one (1) private session was held. At the Private Session, the external auditors were encouraged to raise with the AC any matters they considered important to bring to the AC’s attention. The lead audit engagement partner of the external auditors responsible for the Group has attended the Private Session for the FYE 2017.

At the Private Sessions, the AC Chairperson sought information on the communication flow between the external auditors and the Management which was necessary to allow unrestricted access to information for the external auditors to effectively perform their duties. For the FYE 2017, the external auditors confirmed to the AC that there were neither restrictive nor non-co-operative behaviour exhibited by the Management in the course of their audit.

AC Meeting Proceedings

Notices of AC meetings and meeting papers were distributed to the AC at least one (1) week in advance prior to the meeting to enable the AC members to peruse and provide their feedbacks/comments at the meeting.

All deliberations during the AC meetings were duly minuted. Minutes of AC meetings were tabled for confirmation at every succeeding AC meeting.

The AC Chairperson presented the AC’s recommendations together with the respective rationale to the Board for approval of the annual audited financial statements and the unaudited quarterly financial results. As and when necessary, the AC Chairperson would convey to the Board matters of significant concern raised by the Internal and/or External Auditors.

Mr. Kwan Kim Fook, the Regional Financial Controller normally attend AC Meetings. Other Board Members and/or employees would attend the AC Meetings upon the invitation of the AC.

SuMMarY Of WOrKS uNDErtaKEN BY tHE aC

The AC has undertaken the following works during the FYE 2017:-

(a) Oversight of financial reporting

(i) Reviewed the unaudited quarterly financial results for the quarters ended 31 December 2016, 31 March 2017, 30 June 2017, 30 September 2017 and 31 December 2017, respectively and recommended the same for the Board’s approval;

(ii) Reviewed the draft audited financial statements for the FYE 2017 and recommended the same for the

Board’s approval;

(iii) Reviewed the Group’s compliance with the accounting standards and relevant regulatory requirements;

(b) Oversight of External auditors

(iv) Reviewed the suitability and independence of the external auditors vide a formalised “Assessment on External Auditors” and upon reviewed and being satisfied with the results of the said Assessment, the same has been recommended to the Board for approval;

(v) Reviewed the external auditors’ Audit Plan for FYE 2017 and Management’s response;

(vi) Reviewed and recommended the re-appointment of external auditors for the FYE 2017.


(c) Oversight of internal audit Department (“iaD”) and function

(vii) Review and adoption of an Internal Audit Plan for FYE 2017;

(viii) Reviewed and approved the internal audit reports for FYE 2017;

(ix) Review and adoption of the In-house Internal Audit Charter;

(x) Reviewed the adequacy and performance of the internal audit function and its comprehensive coverage of the Group’s activities;

(xi) Reviewed the effectiveness of the internal audit function vide a formalised “Assessment on Internal Auditors”;

(d) review of related Party transactions (“rPt”)

(xii) Reviewed the related party transactions, entered into by the Company and its group of companies;

(xiii) Reviewed the quarterly recurrent RPT Report, prepared by the IAD;

(xiv) Issuance of Statement of AC for inclusion in the draft Circular to Shareholders in relation to the Proposed Renewal of Shareholders’ Mandate for entering into Recurrent RPTs to confirm the review of the terms of the Proposed Shareholders’ Mandate and its satisfaction with the review procedures set out for recurrent RPTs;

(xv) Review of the draft Circular to Shareholders in relation to the Proposed Renewal of Shareholders’ Mandate for entering into recurrent RPTs;

(e) Oversight of risk Management Matters

(xvi) To review the principal risks identified by the Management and IAD and ensuring the implementation of appropriate internal controls and mitigation measures;

(xvii) Reviewed the AC Report and Statement on Risk Management and Internal Control to be included in the Annual Report 2017;

(f) Oversight of Share Buy-Back activities

(xviii) Review of the draft Statement to Shareholders in relation to the Proposed Renewal of Authority for Share Buy-back and recommendation of the same to the Board of Directors for approval;

(xix) Examined the effects of the Proposed Renewal of Authority for Share Buy-back on the share capital, net assets, working capital and earnings per share of the Company.

(xx) Examined the impact of share buy-back on the Company’s dividend declaration for FYE 2017.

(g) Other Matters

(xxi) Recommendation of the payment of a tax-exempted interim dividend of 5 sen per share and final tax-exempt dividend of 2 sen per share for the FYE 2017 to the Board of Directors for approval.



Conclusion made on Review of Recurrent RPTs for FYE 2017

From its review of RPTs entered into by the Company and its group of companies for the FYE 2017, the AC has concluded that the RPTs were conducted at arm’s length basis and on normal commercial terms consistent with the Company’s usual business practices and policies.

For FYE 2017, the AC was of the opinion that the Group has in place adequate procedures and processes to monitor, track and identify recurrent RPT in a timely and orderly manner.

iNtErNaL auDit fuNCtiON

(1) in-house iaD

The Company has an IAD which reports to the AC. The IAD is mainly responsible for undertaking a regular review of the internal control system of the Group and to ensure its operations are carried out effectively and efficiently.

The scope of internal audit covers the periodic audits of key departments, branches and overseas subsidiaries within the Group to test on the appropriateness of control design and implementation as well as compliance with existing policies and procedures.

The IAD performs periodic audits of the Company and subsidiaries within the Group based on a risk-based approach in developing its audit plan which addresses all the core auditable areas of the Group based on their risk profile. The audit focuses on areas with high risk and potential inadequate controls to ensure that an adequate action plan is in place to improve the controls. For those areas with high risk and inadequate controls, the audit ascertains that the risks are effectively mitigated by the controls.

Other works undertaken by the IAD during the financial year include:-

• Ascertained the extend of compliance of established policies, procedures and statutory requirements;• Reviewed the operation flow within the Group;• Recommended improvement on existing systems; and• Presented the audit plan for the FYE 2017 to the AC.

Date of appointment : Year 2001

Principal Engagement Lead : Chiang Hsieh Tsui-Ju

Qualifications : Degree in Accountancy

Experiences : 20 years of experience in finance and accounting and internal audit functions

Number of resources : There are a total of ten (10) staff in IAD. (2) iaD audit assignments for fYE 2017

Given the diverse nature of the Group’s subsidiaries, the IAD has segregated their audit activities into three (3) main categories:-

(a) Departmental Audit Assignments;(b) Malaysian and Vietnam Branches Audit Assignments; and(c) Subsidiaries Audit Assignments.



iNtErNaL auDit fuNCtiON (CONtiNuED)

(2) iaD audit assignments for fYE 2017 (Continued)

Category of auditactivities audit area/ entity audit Period

Departmental AuditAssignments

• Customer Services• International Sales• Purchasing• Finance and accounting

• Warehouse• Human Resource

• Management Information System

January 2017 to December 2017

January 2017 to October 2017

January 2017 to November 2017

Malaysian andVietnam BranchesAudit Assignments

Malaysia• Johor Bahru• Batu Pahat

• Klang • Kuala Lumpur

• Kuantan• Kota Bahru

• Alor Setar• Butterworth• Ipoh• Kota Kinabalu• Kuching

Vietnam• Hanoi• Hai Phong• Danang• Nha Trang• Ho Chi Minh City• Can Tho



January 2017 to October 2017

January 2017 to September 2017


Subsidiaries AuditAssignments

• White Horse Ceramic (Phil) Inc.• White Horse Ceramic (S) Pte Ltd.• White Horse Ceramic (Thai) Ltd.

• PT WH Ceramic Indonesia



For FYE 2017, representatives from the IAD attended two (2) AC Meetings to table their findings and reports.





(2) iaD audit assignments for fYE 2017 (Continued)

Internal Audit Review and Assurance

For the FYE 2017, the IAD has successfully completed all their audit assignments in accordance with their risk-based Internal Audit Schedule for 2017. The Head of IAD further affirmed to the AC that sufficient and appropriate audit procedure have been conducted and evidence gathered to support the accuracy of the conclusions reached and contained in their internal audit reports for FYE 2017.

The internal audits performed met the objective of highlighting to the AC the audit findings which required follow-up action by the Management, any outstanding audit issues which required corrective actions to be taken to ensure an adequate and effective internal control system within the Group, as well as any weaknesses in the Group’s internal control system. It ensured that those weaknesses were appropriately addressed and that recommendations from the internal audit reports and corrective actions on reported weaknesses were taken appropriately within the required timeframe by the Management.

For the FYE 2017, the IAD engagement team personnel, including the Principal Engagement Lead, have affirmed to the AC that in relation to the Company/Group, they were free from any relationships or conflicts of interest, which could impair their objectivity and independency.

(3) internal audit Charter

The AC has adopted an Internal Audit Charter in order to formalise the remit of the IAD and the internal audit function as well as to regulate the process to review the adequacy of scope, functions, competency, and resources of the internal audit function. The Internal Audit Charter comprises the following items:-(i) In-House Internal Audit Charter; (ii) Terms of reference for in-house internal audit function; (iii) Authority;(iv) Reporting;(v) Objectivity and independence; (vi) Objectives and scope of work;(vii) Internal audit function administration;(viii) Oversight functions of the AC in relation to internal audit functions; and(ix) Review of Internal Audit Charter.

The Internal Audit Charter was adopted by the Board on 26 February 2016.



(4) internal audit function review

On a yearly basis, the AC would conduct an internal audit function review in order to review the adequacy and performance of the internal audit function and its comprehensive coverage of the Group’s activities (“the ia review”).

For the FYE 2017, the IA Review has been conducted by the AC on 27 February 2018. The AC has conducted the IA Review based on the following criteria:- • Understanding;• Charter and structure;• Skills and experiences;• Communication; and• Performance.

Upon review, the AC was satisfied with the performance and the conduct of IAD for the FYE 2017.

(5) Operational costs incurred by iaD for fYE 2017

The operational cost incurred by the IAD for FYE 2017 amounted to RM1,038,942/- (2016: RM1,018,445/-).

This AC Report is made in accordance with the Resolution passed by the Directors at the Board of Directors’ Meeting held on 27 February 2018.



sTATEMENT ON RIsk MANAGEMENT AND INTERNAL CONTROL

Pursuant to Paragraph 15.26 (b) of Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements, the Board of Directors of White Horse Berhad is pleased to provide the following statement on the state of risk management and internal control of the Group, which has been prepared in accordance with the Statement on Internal Control: Guidance for Directors of Public Listed Companies issued by the Institute of Internal Auditors Malaysia and adopted by Bursa Securities.

The Board of Directors acknowledges its responsibility for maintaining a sound system of risk management and internal control to safeguard shareholders’ investment and the Group assets, and for reviewing its adequacy and integrity.

In view of the limitations that are inherent in any system of internal control, this system is designed to manage, rather than eliminate the risk of failure to achieve corporate objectives. Accordingly, the system could provide only reasonable but not absolute assurance against material misstatement, operational failures, fraud or loss.

The Group has in place an on-going process for identifying, evaluating, monitoring and managing significant risks in its respective departments, Malaysia branches, subsidiaries and Vietnam branches that may affect the achievement of business objectives, throughout the year under review. This process is reviewed by the Board via the Audit Committee.

The Board and Management practice proactive significant risks identification on a yearly basis or earlier as appropriate, particularly for any major proposed transactions, changes in nature of activities and/or operating environment, or venturing into new operating environment which may entail different risks, and put in place the appropriate risk response strategies and controls until those risks are managed to, and maintained at, a level acceptable to the Board.

The Board acknowledges the importance of internal audit. Group Internal Audit performs periodic audits of the Company and subsidiaries within the Group based on a risk-based approach in developing its audit plan which addresses all the core auditable areas of the Group based on their risk profile. The audit focuses on areas with high risk and potential inadequate controls to ensure that an adequate action plan is in place to improve the controls. For those areas with high risk and inadequate controls, the audit ascertains that the risks are effectively mitigated and closely by the controls.

All audit findings, recommendations and Management’s actions are rigorously deliberated upon at Audit Committee meetings before being reported to the Board. Quarterly reports to the Audit Committee track the progress towards completion of all corrective actions taken on issues highlighted by the Group Internal Auditors.

Based on the internal audit reviews conducted, none of the audit issues has resulted in any material control deficiencies. Details of the activities of the internal audit function are provided in the Audit Committee Report of this Annual Report.

The monitoring, review and reporting arrangements in place give reasonable assurance that the structure of controls and their implementation are appropriate to the Group’s operations and that risks are at an acceptable level throughout the Group’s businesses. Such arrangements, however, do not eliminate the possibility of human error or deliberate circumvention of control procedures by employees and others.

The Board is of the view that the system of internal controls in place for the year under review and up to the date of issuance of the financial statements is sound and sufficient to safeguard the shareholders’ investment, the interest of customers, regulators, employees and the Group’s assets.


The key elements of the Group’s existing system of internal controls are described below:-• The organisation structure is clearly defined by means of organisation charts and main job function and

responsibilities are communicated to all levels.• Clearly documented internal policies and procedures set out in a series of Standard Operating Procedures,

which is constantly reviewed for improvement to reflect changes in business structures and processes.• The Audit Committee examines the effectiveness of the Group’s system of internal control on behalf of the

Board. This is accomplished through the review of the internal audit department’s work, which adopts a series of audit program in identifying areas of priority and which is carried out in accordance with the audit plan.

• Regular internal audit visits, which provide independent assurance on the effectiveness of the Group’s system of internal control and advising Management on areas for further improvement.

• The Group has a policy on approving authority for its operating and capital expenditure.

The Board is committed towards operating and maintaining a sound system of internal control and recognises that the system must continuously evolve to support the type of business and size of operations of the Group. As such, the Board will, when necessary, put in place appropriate action plans to rectify any potential weaknesses or further enhance the system of internal control. There were no material losses incurred during the financial year as a result of weaknesses in internal control.

For the financial year under review and up to the date of approval of this Statement on Risk Management and Internal Control, based on inquiry, information and assurances provided by the Managing Director and Regional Financial Controller, the Board is satisfied that the Group’s risk management and internal control system is operating adequately and effectively in all materials aspects. Measures are in place and continually being taken to ensure the ongoing adequacy and effectiveness of risk management and internal control to safeguard the Group’s assets and enhance shareholders’ investment.

As required by Paragraph 15.23 of Bursa Securities Main Market Listing Requirements, the external auditors have reviewed this Statement of Risk Management and Internal Control. Their review was performed in accordance with Recommended Practice Guide 5 (“rPG5”) issued by the Malaysian Institute of Accountants. RPG5 does not require the external auditors to form an opinion on the adequacy and effectiveness of the risks management and internal control systems of the Group.

The statement is made in accordance with the Resolution passed by the Directors at the Board of Directors’ Meeting held on 27 February 2018.

Statement on Risk Management and Internal Control (continued)


sTATEMENT ON DIRECTORs’ REsPONsIBILITy

in relation to the Financial Statements

The Directors are required to prepare financial statements which give a true and fair view of the state of affairs of the Group and of the Company as at end of each financial year and of the results and cash flows of the Group and of the Company for the financial year then ended.

During the preparation of the financial statements, the Directors have considered the following:

- appropriate accounting policies have been used and are consistently applied;- reasonable and prudent judgments and estimates were made; and- all applicable approved accounting standards in Malaysia have been followed.

The Directors are responsible for ensuring that the Company maintains accounting records that disclose with reasonable accuracy the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with the Companies Act, 2016.

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

The Statement is made in accordance with the Resolution passed by the Directors at the Board of Directors’ Meeting held on 27 February 2018.

FIN

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56 DIRECTOR’S REPORT

61 STATEMENT BY DIRECTORS

61 STATUTORY DECLARATION

62 INDEPENDENT AUDITORS’ REPORT

68 STATEMENTS OF COMPREHENSIVE INCOME

69 STATEMENTS OF FINANCIAL POSITION

71 STATEMENTS OF CHANGES IN EqUITY

73 STATEMENTS OF CASH FLOWS

76 NOTES TO THE FINANCIAL STATEMENTS

FIN

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The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2017.

PriNCiPaL aCtiVitiES

The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries are described in Note 17 to the financial statements.

rESuLtS

Group Company rM’000 rM’000

Profit net of tax attributable to equity holders of the parent 5,079 31,437

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

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

DiViDENDS

The amounts of dividends paid by the Company since 31 December 2016 were as follows:

rM’000

In respect of financial year ended 31 December 2016: Final tax exempt dividend of 5 sen per share paid on 10 July 2017 11,450 In respect of financial year ended 31 December 2017: Interim tax exempt dividend of 5 sen per share paid on 10 January 2018 11,445

22,895

At the forthcoming Annual General Meeting, a final tax exempt dividend in respect of the financial year ended 31 December 2017 of 2 sen per share on 228,895,800 ordinary shares, amounting to a dividend payable of RM4,577,916 will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2018.

DIRECTORs’ REPORT


DirECtOrS

The names of the directors of the Company in office since the beginning of the financial year to the date of this report are:

Liao Yuan ShunLiao Jung ChuLiao Shen HuaTeo Swee TengTeo Kim LapTeo Kim TayCheng Soon MongLaw Piang WoonChew Pei FangRosita Yeo Swat Geok

The names of the directors of the Company’s subsidiaries in office since the beginning of the financial year to the date of this report (not including those directors listed above) are:

Liao Shen YaoChang Hua Wei

DirECtOrS’ BENEfitS

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

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of remuneration received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 12 to the financial statements) by reason of a contract made by the Company or a related corporation 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, except as disclosed in Note 29 to the financial statements.

Directors’ Report (continued)



DirECtOrS’ iNtErEStS

Pursuant to Section 59(3) of the Companies Act 2016, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows:

Number of ordinary shares 1.1.2017 Bought Sold 31.12.2017

Direct interestLiao Yuan Shun 1,052,800 548,055 – 1,600,855 Liao Jung Chu 1,098,000 – – 1,098,000 Liao Shen Hua 1,865,797 1,415,000 680,000 2,600,797 Teo Swee Teng 11,073,593 – – 11,073,593 Teo Kim Lap 11,083,027 – – 11,083,027 Teo Kim Tay 12,409,015 – – 12,409,015 Cheng Soon Mong 4,877,735 – – 4,877,735 Liao Shen Yao 1,685,897 1,875,000 760,000 2,800,897

Number of ordinary shares 1.1.2017 Bought Sold 31.12.2017

indirect interestLiao Yuan Shun 29,064,055 20,861,105 23,429,160 26,496,000 Liao Jung Chu 38,997,303 – 31,477,000 7,520,303 Liao Shen Hua 11,840,000 10,760,000 14,100,000 8,500,000 Teo Swee Teng 2,425,000 – – 2,425,000 Teo Kim Lap 1,450,000 – – 1,450,000 Teo Kim Tay 150,000 – – 150,000 Cheng Soon Mong 132,500 – – 132,500 Chew Pei Fang 120,000 – – 120,000 Liao Shen Yao 12,020,000 760,000 10,080,000 2,700,000

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.

treasury shares

During the financial year, the Company repurchased 348,600 of its issued ordinary shares from the open market at the average price of RM2.01 per share. The total consideration paid for the repurchase including transaction costs was RM699,060. The shares repurchased are being held as treasury shares in accordance with Section 127 of the Companies Act 2016.

As at 31 December 2017, the Company held as treasury shares a total of 11,093,900 of its 240,000,000 issued ordinary shares. Such treasury shares are held at a carrying amount of RM17,297,339 and further relevant details are disclosed in Note 26(b) to the financial statements.

indemnities to directors and officers

During the financial year, the total amount of insurance effected for directors and officers of the Company was RM10,000,000 under the Group Directors’ and Officers’ Liability Insurance Policy.


DirECtOrS’ iNtErEStS (CONtiNuED) Other statutory information

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

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

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

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

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

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

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

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

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

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

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

(f) In the opinion of the directors:

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

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




auDitOrS

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

Auditors’ remuneration are disclosed in Note 10 to the financial statements.

iNDEMNifiCatiON Of auDitOrS

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement against claims by third parties arising from the audit. No payment has been made to indemnify Ernst & Young during or since the financial year.

Signed on behalf of the Board in accordance with a resolution of the directors dated 11 April 2018.

teo Swee teng Cheng Soon Mong


sTATEMENT By DIRECTORs

Pursuant to Section 251(2) of the Companies Act 2016

We, Liao Yuan Shun and Cheng Soon Mong, being two of the directors of White Horse Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 68 to 138 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2017 and of their financial performance and cash flows for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 11 April 2018.

teo Swee teng Cheng Soon Mong

I, Cheng Soon Mong (Passport No.: E2312511L), being the director primarily responsible for the financial management of White Horse Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 68 to 138 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared bythe abovenamed Cheng Soon Mong at Johor Bahru in the State of Johoron 11 April 2018 Cheng Soon Mong

Before me, aBD KariM BiN aBD raHMaNCommissioner for Oaths

sTATuTORy DECLARATION

Pursuant to Section 251(1)(b) of the Companies Act 2016


INDEPENDENT AuDITORs’ REPORT

to the members of White Horse Berhad

rEPOrt ON tHE auDit Of tHE fiNaNCiaL StatEMENtS

Opinion

We have audited the financial statements of White Horse Berhad, which comprise the statements of financial position as at 31 December 2017 of the Group and of the Company, and statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 68 to 138.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2017, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence and other ethical responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial statements of the Group as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis of our audit opinion on the accompanying financial statements.


rEPOrt ON tHE auDit Of tHE fiNaNCiaL StatEMENtS (CONtiNuED)

Key audit matters (Continued)

Valuation of inventories

(Refer to Note 4.16, Note 7.2(c) and Note 18 to the financial statements)

As at 31 December 2017, the inventories balance stood at RM392 million, representing 35% of the total assets of the Group. Included in inventories were various types of tiles (finished goods) of RM252 million stated at lower of cost and net realisable value (“NRV”).

The Group constantly develops new products/designs to cater for consumers’ changing preference for tile designs. The demand for a particular tile design will naturally slow down after certain number of years and that may affect the NRV of the finished goods.

The Group carried out assessments of the NRV of the finished goods at the reporting date and recorded a write-down of finished goods amounting to RM8.4 million in the current year.

We focused on this area because the inventories balance is material to the financial statements and the write-down of inventories requires a high level of judgement based on management’s experience.

How our audit addressed the matter

We assessed the process, method and assumptions used by management in writing down the finished goods which, amongst others, included the following:

• evaluating the basis in determining slow moving inventories by analysing past sales trend and expected future sales;

• testing the reliability of the inventory ageing report; and

• testing the NRV of finished goods by comparing to selling prices of actual sales made near or subsequent to year end.

Independent Auditors’ Reportto the members of White Horse Berhad

(continued)



(continued)


Key audit matters (Continued)

impairment assessment of cost of investment in a subsidiary of the Company and certain property, plant and equipment of the Group

(Refer to Note 7.2(e), Note 15 and Note 17 to the financial statements)

As at 31 December 2017, the Company’s investment in a subsidiary, White Horse Ceramic Industries (Vietnam) Co. Ltd. (“WHV”), was higher than its net assets, which provides an indication that the carrying amounts of the cost of investment in WHV of RM83 million (representing 31% of the total assets of the Company) and the property, plant and equipment (“PPE”) owned by WHV of RM70 million (representing 6% of the total assets of the Group) may be impaired. Accordingly, management estimated the recoverable amounts of the cost of investment in WHV and PPE owned by WHV using value-in-use (“VIU”). Estimating the VIU involves the application of judgement and the use of subjective management estimations with respect to sales growth, profit margin and discount rate.

The impairment review was significant to our audit because the carrying amounts of cost of investment and PPE involved are significant to the financial statements of the Company and of the Group, and the assessment process is complex based on assumptions that are highly judgemental.

How our audit addressed the matter

Our audit procedures, amongst others, included the following:

• reviewing management’s identification of indicators of impairment in accordance with the accounting standards;

• evaluating the assumptions and model used by the Group and the Company in performing the impairment assessment with the involvement of our internal valuation experts;

• testing the basis of preparing the cash flow forecasts by taking into account the back testing results on the accuracy of previous forecasts and the historical evidence supporting underlying assumptions; and

• assessing the appropriateness of the other key assumptions, such as the weighted- average cost of capital discount rates assigned to the relevant cash generating unit, as well as the long-term growth, by comparing against internal information, and external economic and market data.

We also assessed the sensitivity analysis performed by the management on the key inputs to the impairment model, to understand the impact that reasonable alternative assumptions would have on the overall carrying amounts of the investment in WHV and the related PPE.

In addition, we also reviewed the adequacy of the disclosures of key assumptions used to which the recoverable amounts are most sensitive.



Information other than the financial statements and auditors’ report thereon

The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial statements

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


(continued)



(continued)


Auditors’ responsibilities for the audit of the financial statements (Continued)

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.



Auditors’ responsibilities for the audit of the financial statements (Continued)

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

OtHEr MattErS

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Lee ah too AF 0039 02187/09/2019 J Chartered Accountants Chartered Accountant

Melaka, MalaysiaDate: 11 April 2018


(continued)


Group Company Note 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000

revenue 8 640,103 695,158 35,044 24,514 Cost of goods sold (523,660) (519,055) – –

Gross profit 116,443 176,103 35,044 24,514

Other items of incomeInterest income 2,440 2,972 – – Other income 9 14,692 7,839 2,272 518

Other items of expenseAdministrative and general expenses (68,922) (89,921) (5,845) (2,411)Selling and distribution expenses (49,565) (52,438) – – Interest expense (8,259) (6,960) – –

Profit before tax 10 6,829 37,595 31,471 22,621 Income tax expense 13 (1,750) (11,150) (34) (269)

Profit for the year 5,079 26,445 31,437 22,352

Other comprehensive (loss)/income:Other comprehensive (loss)/income to be reclassified to profit or loss in subsequent periods (net of tax):Foreign currency translation of foreign operations (4,347) 3,357 – –

Other comprehensive (loss)/income for the year, net of tax (4,347) 3,357 – –

total comprehensive income for the year, net of tax 732 29,802 31,437 22,352

Earnings per share attributable to equity holders of the parent (sen per share):Basic and diluted 14 2.2 11.8

sTATEMENTs OF COMPREHENsIvE INCOME

for the financial year ended 31 December 2017

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


sTATEMENTs OF FINANCIAL POsITION

as at 31 December 2017


assetsNon-current assetsProperty, plant and equipment 15 442,880 463,145 – – Prepaid land lease payments 16 14,380 16,116 – – Investment in subsidiaries 17 – – 222,828 223,384 Goodwill 677 677 – – Trade and other receivables 19 793 939 43,974 48,737

458,730 480,877 266,802 272,121

Current assetsInventories 18 391,581 415,413 – – Trade and other receivables 19 139,226 141,690 1,170 160 Other current assets 20 32,291 17,327 76 76 Tax recoverable 5,639 2,286 – 56 Investment securities 21 – 1,000 – – Cash and bank balances 22 80,589 150,058 1,215 261

649,326 727,774 2,461 553

total assets 1,108,056 1,208,651 269,263 272,674

Current liabilitiesLoans and borrowings 23 179,164 230,016 – – Trade and other payables 24 111,224 121,983 16,348 27,681 Tax payable – – 49 – Dividend payable 11,522 11,492 11,522 11,492

301,910 363,491 27,919 39,173

Net current assets/(liabilities) 347,416 364,283 (25,458) (38,620)

Non-current liabilitiesLoans and borrowings 23 10,000 14,006 – – Other payable 24 39,586 47,832 – – Deferred taxation 25 11,125 15,025 – –

60,711 76,863 – –

total liabilities 362,621 440,354 27,919 39,173

Net assets 745,435 768,297 241,344 233,501



Equity attributable to equity holders of the parentShare capital 26 246,936 240,000 246,936 240,000 Share premium – 6,936 – 6,936Treasury shares 26(b) (17,297) (16,598) (17,297) (16,598)Retained earnings 27 497,239 515,055 11,705 3,163 Foreign currency translation reserve 28 18,557 22,904 – –

total equity 745,435 768,297 241,344 233,501

total equity and liabilities 1,108,056 1,208,651 269,263 272,674

Statements of Financial Positionas at 31 December 2017

(continued)



Non-Distributable foreign currency Distributable total Share Share treasury translation retained Note equity capital premium shares reserve earnings Group rM’000 rM’000 rM’000 rM’000 rM’000 rM’000 2017

Opening balance at 1 January 2017 768,297 240,000 6,936 (16,598) 22,904 515,055

transition to no-par value regime 26(a) – 6,936 (6,936) – – –

Profit for the year 5,079 – – – – 5,079 Other comprehensive loss (4,347) – – – (4,347) –

total comprehensive income 732 – – – (4,347) 5,079

Purchase of treasury shares 26(b) (699) – – (699) – – Dividends 34 (22,895) – – – – (22,895)

total transactions with owners (23,594) – – (699) – (22,895)

Closing balance at 31 December 2017 745,435 246,936 – (17,297) 18,557 497,239 2016

Opening balance at 1 January 2016 761,670 240,000 6,936 (16,354) 19,547 511,541

Profit for the year 26,445 – – – – 26,445 Other comprehensive income 3,357 – – – 3,357 –

total comprehensive income 29,802 – – – 3,357 26,445

Purchase of treasury shares 26(b) (244) – – (244) – – Dividends 34 (22,931) – – – – (22,931)

total transactions with owners (23,175) – – (244) – (22,931)

Closing balance at 31 December 2016 768,297 240,000 6,936 (16,598) 22,904 515,055

sTATEMENTs OF CHANGEs IN EquITy



Non-Distributable Distributable total Share Share treasury retained Note equity capital premium shares earnings Company rM’000 rM’000 rM’000 rM’000 rM’000 2017

Opening balance at 1 January 2017 233,501 240,000 6,936 (16,598) 3,163

Transition to no-par value regime 26(a) – 6,936 (6,936) – –

Profit for the year, representing total comprehensive income 31,437 – – – 31,437

Purchase of treasury shares 26(b) (699) – – (699) – Dividends 34 (22,895) – – – (22,895)

total transactions with owners (23,594) – – (699) (22,895)

Closing balance at 31 December 2017 241,344 246,936 – (17,297) 11,705 2016

Opening balance at 1 January 2016 234,324 240,000 6,936 (16,354) 3,742

Profit for the year, representing total comprehensive income 22,352 – – – 22,352

Purchase of treasury shares 26(b) (244) – – (244) – Dividends 34 (22,931) – – – (22,931)

total transactions with owners (23,175) – – (244) (22,931)

Closing balance at 31 December 2016 233,501 240,000 6,936 (16,598) 3,163

Statements of Changes in Equityfor the financial year ended 31 December 2017

(continued)



sTATEMENTs OF CAsH FLOws


Group Company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000

Operating activitiesProfit before tax 6,829 37,595 31,471 22,621

Adjustments for:Amortisation of prepaid land lease payments 1,725 2,919 – – Bad debts recovered (27) – – – Depreciation of property, plant and equipment 39,969 45,928 – – Loss/(gain) on disposal of property, plant and equipment 4 (481) – – Interest expense 8,259 6,960 – – Interest income (2,440) (2,972) – – Inventories written down/(write-back) 13,012 (11,074) – – Inventories written off 533 – – – Loss on disposal of prepaid land lease payments – 69 – – Net unrealised foreign exchange (gain)/loss (5,493) 9,659 (1,696) 1,716 Unrealised fair value loss on non current receivables – – 4,763 – Property, plant and equipment written off 329 83 – – Impairment loss on investment in subsidiaries – – 556 – Impairment loss on trade receivables 144 597 – – Reversal of impairment loss of trade receivables (17) (27) – –

Total adjustments 55,998 51,661 3,623 1,716

Operating cash flow before changes in working capital 62,827 89,256 35,094 24,337

Changes in working capitalDecrease/(increase) in receivables (4,028) 55,167 (1,010) 10,782 Increase in other current assets (14,964) (629) – – Decrease in inventories 10,287 5,230 – – Decrease in payables (20,724) (61,886) (9,607) (12,155)

Total changes in working capital (29,429) (2,118) (10,617) (1,373)

Cash flow generated from operations 33,398 87,138 24,477 22,964



Tax (paid)/refund (9,003) (18,848) 71 (36)Interest received 2,440 2,972 – – Interest paid (8,259) (6,960) – –

(14,822) (22,836) 71 (36)

Net cash flows generated from operating activities 18,576 64,302 24,548 22,928

investing activitiesPurchase of property, plant and equipment (24,895) (24,013) – – Proceeds from disposal of investment securities 1,000 – – – Proceeds from disposal of prepaid land lease payment – 321 – – Proceeds from disposal of property, plant and equipment 65 771 – –

Net cash flows used in investing activities (23,830) (22,921) – –

financing activitiesDividends paid (22,895) (22,944) (22,895) (22,944)Decrease in loans and borrowings (39,361) (13,317) – – Repayment of obligations under finance leases (84) (81) – – Purchase of treasury shares (699) (244) (699) (244)

Net cash flows used in financing activities (63,039) (36,586) (23,594) (23,188)

Net (decrease)/increase in cash and cash balances (68,293) 4,795 954 (260)Effects of foreign exchange rate changes (1,176) 1,028 – – Cash and cash balances at 1 January 150,058 144,235 261 521

Cash and cash balances at 31 December (Note 22) 80,589 150,058 1,215 261

Statements of Cash Flowsfor the financial year ended 31 December 2017

(continued)


Statements of Cash Flowsfor the financial year ended 31 December 2017

(continued)

Effect of changes in Changes from foreign 1 January financing exchange 31 December Note 2017 cash flows rates 2017 rM rM rM rM

Changes in liabilities arising from financing activities:

Dividends paid 34 – (22,895) – (22,895)Decrease in loans and borrowings 23 243,941 (39,361) (15,430) 189,150 Repayment of obligations under finance leases 23 81 (84) 17 14 Purchase of treasury shares 26(b) – (699) – (699)

244,022 (63,039) (15,413) 165,570



NOTEs TO THE FINANCIAL sTATEMENTs


1. COrPOratE iNfOrMatiON

White Horse Berhad (“the Company”) is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The principal place of business and the registered office of the Company is located at PLO 464, Jalan Gangsa, Pasir Gudang Industrial Estate, 81700 Pasir Gudang, Johor.

The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries are described in Note 17.

2. BaSiS Of PrEParatiON

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (MFRS) as issued by the Malaysian Accounting Standards Board (MASB), International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and the Companies Act 2016 in Malaysia.

The financial statements of the Group and of the Company have been prepared on the historical basis, except as disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (RM). All values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

3. BaSiS Of CONSOLiDatiON

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries (collectively the “Group”) as at 31 December 2017. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

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

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

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers the following in assessing whether or not the Group’s voting rights in an investee are sufficient to give it power over the investee:

- The size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

- Potential voting rights held by the Group, other vote holders or other parties;- Rights arising from other contractual arrangements; and- Any additional facts and circumstances that indicate that the Group has, or does not have, the current

ability to direct the relevant activities at the time than decisions need to be made, including voting patterns at previous shareholders’ meetings.


Notes to the Financial Statementsfor the financial year ended 31 December 2017

(continued)

3. BaSiS Of CONSOLiDatiON (CONtiNuED)

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in profit or loss from the date the Group gains control until the date the Group ceases to control the subsidiary.

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

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

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

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

4. SuMMarY Of SiGNifiCaNt aCCOuNtiNG POLiCiES

4.1 Business combinations and goodwill

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

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

If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss. It is then considered in the determination of goodwill.

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



(continued)

4. SuMMarY Of SiGNifiCaNt aCCOuNtiNG POLiCiES (CONtiNuED)

4.1 Business combinations and goodwill (Continued)

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

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

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

4.2 Current versus non-current classification

Assets and liabilities in statement of financial position are presented based on current/non-current classification. An asset is current when it is:

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

at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

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

after the reporting period.

All other liabilities are classified as non-current.

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



(continued)


4.3 fair value measurement

The Group measures financial instruments such as investment securities and contingent consideration assets at fair value at each reporting date. Fair value related disclosures for financial instruments are summarised in the following notes:

Note

Investment securities 21Financial instruments (including those carried at amortised) 31

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

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

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

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

Valuation techniques that are appropriate in the circumstances and for which sufficient data are available, are used to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

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

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

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

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

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



(continued)


4.3 fair value measurement (Continued)

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

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

For the purpose of fair value disclosures, classes of assets and liabilities are determined based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

4.4 foreign currencies

(a) functional and presentation currency

The Group’s and the Company’s financial statements are presented in Ringgit Malaysian which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

(b) transactions and balances

Transactions in foreign currencies are initially recorded by the Group entities at the functional currency spot rates at the date of the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates at the reporting date.

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

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



(continued)


4.4 foreign currencies (Continued)

(c) Group companies

On consolidation, the assets and liabilities of foreign operations are translated into RM at the rate of exchange prevailing at the reporting date and their income statements are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognised in profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

4.5 revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group or the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.

The Group and the Company have concluded that they are the principals in all of its revenue arrangements since they are the primary obligors in all the revenue arrangements, have pricing latitude and are also exposed to inventory and credit risks.

The specific recognition criteria described below must also be met before revenue is recognised.

(a) Sale of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods.

(b) Dividend income

Dividend income is recognised when the Group’s and the Company’s right to receive payment is established.

(c) Management fees

Management fees is recognised when services are rendered.



(continued)


4.5 revenue recognition (Continued)

Other income of the Group and the Company, presented separately from revenue, are recognised using the following bases:

(a) interest income

For all financial instruments measured at amortised cost and interest bearing financial assets classified as available for sale, interest income or expense is recorded using the effective interest rate (“EIR”), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income is included in finance income in statement of comprehensive income.

(b) rental income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

4.6 Employee benefits

(i) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as expenses in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans

The Group makes contributions to the Employees Provident Fund (“EPF”) in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

4.7 taxes

(a) Current income tax

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

Current income tax relating to items recognised directly in equity is recognised in equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.



(continued)


4.7 taxes (Continued)

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

(i) where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

(ii) in respect of taxable temporary differences associated with investments in subsidiaries and interest in a joint venture, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

(i) where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

(ii) in respect of deductible temporary differences associated with investments in subsidiaries and interest in a joint venture, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.



(continued)


4.7 taxes (Continued)

(b) Deferred tax (Continued)

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurred during the measurement period or in profit or loss.

(c) Goods and Services tax (“GSt”)

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

- Where the amount of GST incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of GST included.

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

4.8 Cash dividend and non-cash distribution to equity holders of the parent

The Company recognises a liability to make cash or non-cash distributions to equity holders of the parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. A distribution is authorised when it is approved by the shareholders and a corresponding amount is recognised directly in equity.

Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.

Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in profit or loss.

4.9 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.



(continued)


4.9 Property, plant and equipment (Continued)

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

- Leasehold land 60 to 908 years- Buildings 12 to 50 years- Plant, machinery and equipment 5 to 12 years- Other assets 3 to 10 years

Assets under construction included in property, plant and equipment are not depreciated as these assets are not yet available for use.

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

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the year the asset is derecognised.

4.10 Leases

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

(a) as lessee

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

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognised as an operating expense in profit or loss on a straight-line basis over the lease term.



(continued)


4.10 Leases (Continued)

(b) as lessor

Leases in which the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

4.11 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they incur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

4.12 investment in subsidiaries

A subsidiary is an entity over which the Group has all the following:

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

(ii) Exposure, or rights, to variable returns from its investment with the investee; and

(iii) The ability to use its power over the investee to affect its returns.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

4.13 financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

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



(continued)


4.14 financial assets

(a) initial recognition and measurement

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

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

(b) Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

(i) financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments as defined by MFRS 139. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative net changes in fair value) or finance income (positive net changes in fair value) in profit or loss.

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



(continued)


4.14 financial assets (Continued)

(b) Subsequent measurement (Continued)

(ii) Loans and receivables (Continued)

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

Loans and receivables of the Group and of the Company comprise trade and other receivables (other than prepaid operating expenses and tax recoverable), due from related companies and cash and bank balances.

(iii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held to maturity when the Group has the positive intention and an ability to hold them to maturity. After initial measurement, held to maturity investments are measured at amortised cost using the EIR, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in profit or loss. The losses arising from impairment are recognised in profit or loss as finance costs.

The Group and the Company did not have any held-to-maturity investments during the years ended 31 December 2017 and 2016.

(iv) available-for-sale (afS) financial investments

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

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



(continued)



(b) Subsequent measurement (Continued)

(iv) available-for-sale (afS) financial investments (Continued)

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

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

The Group and the Company did not have any AFS financial instruments during the years ended 31 December 2017 and 2016.

(c) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the statements of financial position) when:

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

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

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

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.



(continued)



(d) impairment of financial assets

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

(i) financial assets carried at amortised cost

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

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

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



(continued)



(d) impairment of financial assets (Continued)

(ii) available-for-sale (afS) investments

For AFS financial investments, the Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired.

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

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

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

4.15 financial liabilities

(a) initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings and financial guarantee contracts.



(continued)


4.15 financial liabilities (Continued)

(b) Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

(i) financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liability designated upon initial recognition as at fair value through profit or loss.

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

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

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

(ii) Other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised costs using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in profit or loss.

(c) financial guarantee contracts

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



(continued)


4.15 financial liabilities (Continued)

(d) Derecognition

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

(e) Offsetting of financial instruments

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

4.16 inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:

- Raw materials and consumable supplies: purchase costs on a weighted average basis.

- Finished goods and work-in-progress: costs of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. These costs are assigned on a weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.

4.17 impairment of non-financial assets

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

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, the depreciated replacement cost valuation model is used.

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



(continued)


4.17 impairment of non-financial assets (Continued)

Impairment losses of continuing operations, are recognised in profit or loss in expense categories consistent with the function of the impaired asset.

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

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

4.18 Cash and short-term deposits

Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the consolidated statement cash flows, cash and bank balances consist of cash and short-term deposits as defined above.

4.19 Provisions

Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When it is expected that some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in profit or loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

4.20 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its liabilities. Ordinary shares are equity instruments and are recorded at the proceeds received, net of directly attributable incremental transaction costs.



(continued)


4.21 treasury shares

Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of such equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in share premium.

4.22 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

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

4.23 Segment reporting

For management purposes, the Group is organised into operating segments based on their geographical location which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 35, including the factors used to identify the reportable segments and the measurement basis of segment information.

5. CHaNGES iN aCCOuNtiNG POLiCiES

The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2017, the Group and the Company adopted the following new and amended MFRSs mandatory for annual financial periods beginning on or after 1 January 2017.

Effective for annual periodsDescription beginning on or after

MFRS 107 Disclosure Initiative (Amendments to MFRS 107) 1 January 2017MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to MFRS 112) 1 January 2017Annual Improvements to MFRS Standards 2014 - 2016 Cycle Amendments to MFRS 12 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in MFRS 12 1 January 2017

MFRS 107 Disclosure Initiative (Amendments to MFRS 107)

The amendments to MFRS 107 Statement of Cash Flows requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of these amendments, entities are not required to provide comparative information for preceding periods. Apart from the additional disclosures as shown in the statement of cash flows, the application of these amendments had no impact on the Group and the Company.



(continued)

5. CHaNGES iN aCCOuNtiNG POLiCiES (CONtiNuED)

MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to MFRS 112)

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

The application of these amendments has had no impact on the Group and the Company as the Group and the Company already assess the sufficiency of future taxable profits in a way that is consistent with these amendments.

Annual Improvements to MFRS Standards 2014 - 2016 Cycle - Amendments to MFRS 12 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in MFRS 12

The amendments clarify that an entity need not provide summarised financial information for interests in subsidiaries, associates or joint ventures that are classified (or included in a disposal group that is classified) as held for sale. The application of these amendments has had no effect on the Group and the Company as none of the Group and the Company’s interest in these entities are classified, or included in a disposal group that is classified, as held for sale.

6. StaNDarDS iSSuED But NOt YEt EffECtiVE

The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group’s and the Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective.


MFRS 2 Classification and Measurement of Share-based Payment Transactions (Amendments to MFRS 2) 1 January 2018MFRS 9 Financial Instruments 1 January 2018MFRS 15 Revenue from Contracts with Customers 1 January 2018MFRS 140 Transfers of Investment Property (Amendments to MFRS 140) 1 January 2018

Annual Improvements to MFRS Standards 2014 – 2016 Cycle (i) Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards 1 January 2018 (ii) Amendments to MFRS 128 Investments in Associates and Joint Ventures 1 January 2018IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018



(continued)

6. StaNDarDS iSSuED But NOt YEt EffECtiVE (CONtiNuED)


MFRS 9 Prepayment Features with Negative Compensation (Amendments to MFRS 9) 1 January 2019MFRS 16 Leases 1 January 2019MFRS 128 Long-term Interests in Associates and Joint Ventures (Amendments to MFRS 128) 1 January 2019Annual Improvements to MFRS Standards 2015–2017 Cycle (i) Amendments to MFRS 3 Business Combinations 1 January 2019 (ii) Amendments to MFRS 11 Joint Arrangements 1 January 2019 (iii) Amendments to MFRS 112 Income Taxes 1 January 2019 (iv) Amendments to MFRS 123 Borrowing Costs 1 January 2019IC Interpretation 23 Uncertainty over Income Tax Treatments 1 January 2019MFRS 119 Plan Amendment, Curtailment or Settlement (Amendments to MFRS 119) 1 January 2019MFRS 17 Insurance Contracts 1 January 2021Amendments to MFRS 10 and MFRS 128: Sales or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

MFRS 9 Financial Instruments

MFRS 9 introduces new requirements for classification and measurement, impairment and hedge accounting. MFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application is required, but comparative information is not compulsory. During 2017, the Group and the Company has performed a detailed impact assessment of all three aspects of MFRS 9. The assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information being made available to the Group and the Company in 2018 when the Group and the Company adopts MFRS 9.

Based on the analysis of the Group’s and the Company’s financial assets and liabilities as at 31 December 2017 on the basis of facts and circumstances that exist at that date, the directors of the Group and the Company have assessed the impact of MFRS 9 to the Group’s and the Company’s financial statements as follows:

(i) Classification and measurement

Loans and receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal. The Group and the Company analysed the contractual cash flow characteristics of this instruments and concluded that they meet the criteria for amortised cost measurement under MFRS 9. Therefore, reclassification for these instruments is not required.

(ii) Impairment

The Group and the Company will apply the simplified approach and record lifetime expected losses on all trade receivables.



(continued)


MFRS 15 Revenue from Contracts with Customers

MFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. MFRS 15 will supersede the current revenue recognition guidance including MFRS 118 Revenue, MFRS 111 Construction Contracts and the related interpretations when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the goods or services underlying the particular performance obligation is transferred to the customer.

Revenue of the Group is recognised when the goods are delivered to the customers, where the revenue and costs can be measured reliably, and the recovery of the consideration is probable and there is no continuing management involvement with the goods.

These amendments are not expected to have a significant impact on the Group and the Company’s financial statements.

Annual Improvements to MFRS Standards 2014–2016 Cycle

The Annual Improvements to MFRS Standards 2014-2016 Cycle include a number of amendments to various MFRSs, which are summarised below. These amendments do not have a significant impact on the Group’s and the Company’s financial statements.

Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards - Deletion of short-term exemptions for first-time adopters

This amendment is not applicable to the Group and the Company as the Group and the Company is not a first-time adopter of MFRS.



(continued)


Amendments to MFRS 128 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice

The amendments clarify that:

- an entity that is a venture capital organisaton, or other qualifying entity, may elect, at initial recognition, on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.

- if an entity, that is not itself an investment entity, has an interest in associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at a later date on which:

(i) the investment entity associate or joint venture is initially recognised;

(ii) the associate or joint venture becomes an investment entity; and

(iii) the investment entity associate or joint venture first becomes a parent.

Earlier application of these amendments are permitted and must be disclosed. These amendments are not applicable to the Group as the Group is not a venture capital organisation and the Group does not have any associate or joint venture that is an investment entity.

IC Interpretation 22 Foreign Currency Transactions and Advance Consideration

The interpretation clarifies that, in determining the exchange rate to use on initial recognition of an asset, expense or income, when consideration for that item has been paid or received in advance in a foreign currency which resulted in the recognition of a non-monetary asset or non-monetary liability, the date of transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

Entities may apply the amendments either retrospectively or prospectively. Specific transition provisions

apply to prospective application. Early application is permitted and must be disclosed. The application of these amendments will not have an impact on the Group and the Company as the Group and the Company are already accounting for transactions involving the payment or receipt of advance consideration in foreign currency in a way that is consistent with the amendments.

MFRS 9 Prepayment Features with Negative Compensation (Amendments to MFRS 9)

Under MFRS 9, a debt instrument can be measured at amortised cost or at fair value through other comprehensive income, provided that the contractual cash flows are solely payments of principal and interest on the principal amount outstanding (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to MFRS 9 clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract.

The amendments must be applied retrospectively. Earlier application is permitted. These amendments are not expected to have a significant impact on the Group and the Company’s financial statements.



(continued)


MFRS 16 Leases

MFRS 16 will replace MFRS 117 Leases, IC Interpretation 4 Determining whether an Arrangement contains a Lease, IC Interpretation 115 Operating Lease-Incentives and IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under MFRS 117.

At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The right-of-use asset is initially measured at cost and subsequently measured at cost (subject to certain exceptions), less accumulated depreciation and impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially measured at present value of the lease payments that are not paid at that date. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications.

Classification of cash flows will also be affected as operating lease payments under MFRS 117 are presented as operating cash flows, whereas under MFRS 16, the lease payments will be split into a principal (which will be presented as financing cash flows) and an interest portion (which will be presented as operating cash flows).

Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors will continue to classify all leases using the same classification principle as in MFRS 117 and distinguish between two types of leases: operating and finance leases. MFRS 16 also requires lessees and lessors to make more extensive disclosures than under MFRS 117.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted but not before an entity applies MFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The Group plans to assess the potential effect of MFRS 16 on its financial statements in year 2018.

MFRS 128 Long-term Interests in Associates and Joint Ventures (Amendments to MFRS 128)

The amendments clarify that an entity applies MFRS 9 Financial Instruments to longterm interests in an associate or joint venture to which the equity method is not applied but that, in substance, form part of the net investment in the associate or joint venture (long-term interests). In applying MFRS 9, an entity does not account for any losses of the associate, or joint venture, or any impairment losses on the net investment, recognised as adjustments to the net investment in the associate or joint venture that arise from applying MFRS 128 Investments in Associates and Joint Ventures.

Entities must apply the amendments retrospectively, with certain exceptions. Early application of the amendments is permitted and must be disclosed. As the amendments eliminate ambiguity in the wording of the standard, the directors of the Company do not expect the amendments to have any impact on the Group’s and the Company’s financial statements.

Annual Improvements to MFRS Standards 2015–2017 Cycle

The Annual Improvements to MFRS Standards 2015-2017 Cycle include a number of amendments to various MFRSs, which are summarised below. These amendments do not have a significant impact on the Group’s and the Company’s financial statements.



(continued)


Amendments to MFRS 112 Income Taxes - Income tax consequences of payments on financial instruments classified as equity

The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.

An entity applies these amendments for annual reporting periods beginning on or after 1 January 2019. Earlier application is permitted. When an entity first applies these amendments, it applies them to the income tax consequences of dividends recognised on or after the beginning of the earliest comparative period.

Amendments to MFRS 123 Borrowing Costs - Borrowing costs eligible for capitalisation

The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete.

An entity applies these amendments to borrowing costs incurred on or after the beginning of the annual reporting periods beginning on or after 1 January 2019. Earlier application is permitted.

IC Interpretation 23 Uncertainty over Income Tax Treatments

The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of MFRS 112 and does not apply to taxes or levies outside the scope of MFRS 112, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.

The interpretation specifically addresses the following:

- whether an entity considers uncertain tax treatments separately;

- the assumptions an entity makes about the estimation of tax treatments by taxation authorities;

- how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and

- how an entity considers changes in facts and circumstances.

An entity must determine whether to consider each uncertain tax treatment separately or together with one or more uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The Group and the Company will apply the interpretation from its effective date.



(continued)

7. SiGNifiCaNt aCCOuNtiNG JuDGEMENtS aND EStiMatES

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

7.1 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has not made any critical judgements, apart from those involving estimations, which could have a significant effect on the amounts recognised in the financial statements.

7.2 Estimates and assumptions

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

(a) useful lives of plant and machinery

The cost of plant and machinery for the manufacture of tiles is depreciated on a straight-line basis over the assets’ useful lives. Management estimates the useful lives of these plant and machinery to be 5 to 12 years. These are common life expectancies applied in the industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(b) impairment of loans and receivables

An assessment is made at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments, are considered.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 19.

(c) Written down of inventories

The Group reviews the adequacy of valuation of the inventories at each reporting date to ensure that inventories are stated at the lower of cost and net realisable value. In assessing the extent of written down of slow moving inventories, the directors, having considered all available information, such as the age of the inventories, trend, as well as the quality of the inventories, are of the opinion that the inventories are properly written down to the value which can be realised in the ordinary course of business.



(continued)

7. SiGNifiCaNt aCCOuNtiNG JuDGEMENtS aND EStiMatES (CONtiNuED)

7.2 Estimates and assumptions (Continued)

(d) taxes

Deferred tax assets are recognised for unutilised tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which the losses and credits can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

The carrying amount of recognised tax losses and tax credits of the Group is disclosed in Note 25.

(e) impairment of cost of investment in a subsidiary of the Company and certain property, plant and equipment of the Group

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 an annual impairment assessment 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 fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

In determining fair value less costs of disposal, recent market transactions are taken into account.

Impairment losses are recognised in profit or loss. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Impairment loss on investment is not reversed in a subsequent period.



(continued)



(e) impairment of cost of investment in a subsidiary of the Company and certain property, plant and equipment of the Group (Continued)

Key assumptions used to Derive recoverable amount

The recoverable amount is determined based on value-in-use (“VIU”) calculations using cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period were extrapolated using the estimated growth rates stated below.

The following describes each key assumption on which management has based its cash flow projections to undertake impairment test of cost of investment in a subsidiary of the Company and certain property, plant and equipment of the Group:

(i) Discount rate

The discount rate used is based on the weighted average cost of capital of the subsidiary company.

(ii) terminal Growth rate

The terminal growth rate used is based on the subsidiary’s country expected long term inflation and economic growth rate.

The sensitivity of the impairment of cost of investment in subsidiary of the Company and certain property, plant and equipment of the Group to changes in the key assumptions are as follow:

Changes in increase in Decrease in assumption assumption assumption

(i) Cost of investment in a subsidiary of the Company Decrease in Increase in Discount rate 1% VIU by 15% VIU by 18%

Increase in Decrease in Terminal growth rate 1% VIU by 12% VIU by 10%

(ii) Certain property, plant and equipment of the Group Decrease in Increase in Discount rate 1% VIU by 9% VIU by 10%



(continued)



(f) income tax provision

Judgement is involved in determining the Group’s and the Company’s provision for income taxes as there are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final outcome of these matters is different from the amounts that were initial recognised, such differences will impact the income tax and deferred tax provision in the period in which such determination is made.

8. rEVENuE

Revenue of the Group and of the Company consists of the following:


Gross dividends from subsidiaries – – 34,900 24,370 Management fees from a subsidiary – – 144 144Sale of goods 640,103 695,158 – –

640,103 695,158 35,044 24,514

9. OtHEr iNCOME


Bad debts recovered 27 – – –Rental income 715 980 – – Gain on disposal of property, plant and equipment – 481 – – Reversal of impairment loss of trade receivables 17 27 – – Realised gain on foreign exchange 6,807 5,044 576 518Unrealised gain on foreign exchange 5,493 – 1,696 –Sundry income 1,633 1,307 – –

14,692 7,839 2,272 518



(continued)

10. PrOfit BEfOrE tax

The following items have been included in arriving at profit before tax:


Auditors’ remuneration- Statutory audit Company’s auditors 240 237 51 48 Other auditors 80 76 – –Impairment loss on trade receivables 144 597 – –Impairment loss on investment in subsidiaries – – 556 –Inventories written down/(write-back) 13,012 (11,074) – –Inventories written off 533 – – – Amortisation of prepaid land lease payments 1,725 2,919 – – Depreciation of property, plant and equipment 39,969 45,928 – –Non-executive directors’ remuneration (Note 12) 1,168 1,449 158 98 Property, plant and equipment written off 329 83 – –Loss on disposal of property, plant and equipment 4 – – –Loss on disposal of prepaid land lease payments – 69 – –Operating lease: - minimum lease payments for land and buildings 4,655 4,444 – –Employee benefits expense (Note 11) 100,613 123,765 – – Unrealised fair value loss on non current receivables – – 4,763 – Unrealised loss on foreign exchange – 9,659 – 1,716

11. EMPLOYEE BENEfitS ExPENSE Group Company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000

Wages and salaries 89,790 112,600 – – Social security contributions 791 762 – – Contributions to defined contribution plan 6,548 6,786 – – Other staff related expenses 3,484 3,617 – –

100,613 123,765 – –

Included in employee benefits expense of the Group are executive directors’ remuneration amounting to RM962,000 (2016: RM1,045,000) as further disclosed in Note 12.



(continued)

12. DirECtOrS’ rEMuNEratiON Group Company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000

Executive: Salaries and other emoluments 606 690 – – Fees 220 220 – – Bonus 83 83 – – Contributions to defined contribution plan 53 52 – –

Total executive directors’ remuneration excluding benefits in kind (Note 11) 962 1,045 – – Benefits-in-kind 113 129 – –

1,075 1,174 – –

Non-executive: Salaries and other emoluments 470 689 8 8 Fees 430 430 150 90 Bonus 57 75 – – Contributions to defined contribution plan 48 64 – – Benefits-in-kind 83 82 – –

# 1,088 1,340 158 98

Other directors: Executive directors of the subsidiaries: Salaries and other emoluments 84 112 – – Fees 60 60 – – Bonus 10 10 – – Contributions to defined contribution plan 9 9 – – Benefits-in-kind 3 – – –

166 191 – –

Total excluding benefits in kind 2,130 2,494 158 98

# This includes remuneration of RM1,005,000 (2016: RM1,258,000) paid to non-executive directors of the Company, who are executive directors of the subsidiaries.



(continued)

12. DirECtOrS’ rEMuNEratiON (CONtiNuED)

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

2017 2016 Number of Directors Number of Directors Non- Non- Executive executive Executive executive

RM50,001 – RM100,000 – 3 – 3 RM150,001 – RM200,000 – 1 – 1 RM200,001 – RM250,000 1 1 1 1 RM250,001 – RM300,000 – 1 – – RM300,001 – RM350,000 – 1 – 1 RM350,001 – RM400,000 – – – – RM400,001 – RM450,000 2 – – 1 RM450,001 – RM500,000 – – 2 –

3 7 3 7

13. iNCOME tax ExPENSE

Major components of income tax expense

The major components of income tax expense for the years ended 31 December 2017 and 2016 are:


Statement of comprehensive income:Current income tax:- Malaysian income tax 4,550 10,298 34 34 - Foreign tax 606 1,403 – – Underprovision in prior years 613 34 – 235

5,769 11,735 34 269

Deferred income tax (Note 25):- Origination and reversal of temporary differences (2,221) (979) – – - Effect of reduction in foreign income tax rate 4 – – – (Over)/under provision in prior years (1,802) 394 – –

(4,019) (585) – –

Tax expense for the year 1,750 11,150 34 269



(continued)

13. iNCOME tax ExPENSE (CONtiNuED)

Reconciliation between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 December 2017 and 2016 are as follows:

2017 2016 Group rM’000 rM’000

Profit before tax 6,829 37,595

Taxation at Malaysian statutory tax rate of 24% (2016: 24%) 1,639 9,023Different tax rates in other countries 747 (549)Adjustments: Expenses not deductible for tax purposes 3,460 9,857 Income not subject to tax (2,371) (6,093) Utilisation of current year’s reinvestment allowance (318) (769) Utilisation of previously unrecognised unutilised capital allowances (86) (73) Deferred tax asset recognised in respect of current year’s tax losses – (267) Under/(over) provision of income tax in prior years 613 (201) (Over)/under provision of deferred tax in prior years (1,802) 394 Others (132) (172)

Tax expense for the year 1,750 11,150

Company

Profit before tax 31,471 22,621

Taxation at Malaysian statutory tax rate of 24% (2016: 24%) 7,553 5,429 Adjustment: Expenses not deductible for tax purposes 1,402 689 Income not subject to tax (8,921) (5,849)

Tax expense for the year 34 269



(continued)

14. EarNiNGS PEr SHarE

(a) Basic

Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year.

The following tables reflect the profit and share data used in the computation of basic earnings per share for the years ended 31 December:

Group 2017 2016

Profit net of tax attributable to equity holders of the parent (RM’000) 5,079 26,445

Weighted average number of ordinary shares in issue (‘000) * 229,124 223,498

Basic earnings per share (sen) 2.2 11.8

* The weighted average number of shares takes into account the weighted average effect of changes in treasury shares transactions during the year.

(b) Diluted

The diluted earnings per share is the same as basic earnings per share as the Company does not have any dilutive potential ordinary shares.



(continued)

15. PrOPErtY, PLaNt aND EQuiPMENt

Plant, machinery * Land and and # Other buildings equipment assets total Group rM’000 rM’000 rM’000 rM’000

Cost:

at 1 January 2016 388,637 671,482 38,038 1,098,157Additions 8,265 12,304 3,444 24,013Disposals (271) (1,323) (2,935) (4,529)Written off – (5,291) (420) (5,711)Exchange differences 2,159 2,107 209 4,475

at 31 December 2016 and 1 January 2017 398,790 679,279 38,336 1,116,405 Additions 15,850 7,722 1,323 24,895Disposals (11) (294) (371) (676)Written off (22) (2,194) (238) (2,454)Exchange differences (4,128) (2,997) (300) (7,425)

at 31 December 2017 410,479 681,516 38,750 1,130,745

accumulated depreciation:at 1 January 2016 89,332 496,680 29,905 615,917Charge for the year 9,793 33,291 2,844 45,928Disposals (228) (1,148) (2,854) (4,230)Written off – (5,235) (419) (5,654)Exchange differences 919 213 167 1,299

at 31 December 2016 and 1 January 2017 99,816 523,801 29,643 653,260Charge for the year 8,948 28,408 2,613 39,969 Disposals (4) (262) (341) (607)Written off (7) (1,897) (221) (2,125)Reclassification – 3 (3) –Exchange differences (932) (1,452) (248) (2,632)

at 31 December 2017 107,821 548,601 31,443 687,865

Net carrying amount

At 31 December 2016 298,974 155,478 8,693 463,145

At 31 December 2017 302,658 132,915 7,307 442,880

# Other assets comprise office equipment, furniture, fixtures, computers, renovation and motor vehicles.



(continued)

15. PrOPErtY, PLaNt aND EQuiPMENt (CONtiNuED)

* Land and buildings

Long term freehold leasehold Construction land land Buildings in progress total

rM’000 rM’000 rM’000 rM’000 rM’000

Cost:

at 1 January 2016 26,265 66,893 295,020 459 388,637 Additions – – 152 8,113 8,265 Disposal – – (271) – (271)Exchange differences – – 2,159 – 2,159

at 31 December 2016 and 1 January 2017 26,265 66,893 297,060 8,572 398,790 Additions – – 536 15,314 15,850 Disposal – – (11) – (11)Written off – – (22) – (22)Exchange differences – – (4,128) – (4,128)

at 31 December 2017 26,265 66,893 293,435 23,886 410,479

accumulated depreciation:

at 1 January 2016 – 8,583 80,749 – 89,332 Charge for the year – 917 8,876 – 9,793 Disposal – – (228) – (228)Exchange differences – – 919 – 919

at 31 December 2016 and 1 January 2017 – 9,500 90,316 – 99,816Charge for the year – 904 8,044 – 8,948Disposal – – (4) – (4)Written off – – (7) – (7)Exchange differences – – (932) – (932)

at 31 December 2017 – 10,404 97,417 – 107,821

Net carrying amount

At 31 December 2016 26,265 57,393 206,744 8,572 298,974

At 31 December 2017 26,265 56,489 196,018 23,886 302,658



(continued)

15. PrOPErtY, PLaNt aND EQuiPMENt (CONtiNuED)

(a) Property, plant and equipment acquired during the financial year were by means of:

Group 2017 2016 rM’000 rM’000

Cash payment 24,895 24,013

(b) Included in the property, plant and equipment of the Group are motor vehicles with net carrying amount of RM380,000 (2016: RM548,000) held under finance lease arrangements.

(c) The net carrying amounts of property, plant and equipment pledged for borrowings (Note 24) are as follow:

Group 2017 2016 rM’000 rM’000

Leasehold building 2,301 3,351 Plant, machinery and equipment – 4,466

(d) All other assets were subject to negative pledge in relation to the bank borrowings granted to the Group as referred to in Note 23.

16. PrEPaiD LaND LEaSE PaYMENtS

Group 2017 2016 rM’000 rM’000

Cost: At 1 January 32,394 32,526Disposal – (390)Exchange differences (25) 258

At 31 December 32,369 32,394

accumulated amortisation:At 1 January 16,278 13,231Amortisation for the year 1,725 2,919 Exchange differences (14) 128

At 31 December 17,989 16,278

Net carrying amount 14,380 16,116

Amount to be amortised:- Not later than one year 1,725 1,726 - More than one year but not later than five years 6,899 6,904- More than five years 5,756 7,475

Prepaid land lease payments are subject to negative pledge in relation to the bank borrowings granted to the Group as referred to in Note 23.



(continued)

17. iNVEStMENt iN SuBSiDiariES

Company 2017 2016 rM’000 rM’000

Unquoted shares, at cost 223,384 223,384 Less: Impairment loss on investment in subsidiaries (556) –

Net cost of investment 222,828 223,384

Details of the subsidiaries are as follows:

Country of Proportion (%) ofName of subsidiaries incorporation Principal activities ownership interest 2017 2016

Held by the Company:

White Horse Malaysia Manufacture and 100 100 Ceramic Industries distribution of ceramic and Sdn. Bhd. 1 homogeneous tiles

White Horse Malaysia Distribution of ceramic and 100 100 Marketing Sdn. Bhd. 1 homogeneous tiles

White Horse Vietnam Manufacture and 100 100 Ceramic Industries distribution of ceramic and (Vietnam) Co., Ltd. 2 homogeneous tiles

Held through White Horse Ceramic Industries Sdn. Bhd.:

White Horse Ceramic Singapore Distribution of ceramic 100 100 (S) Pte. Ltd. 3 and homogeneous tiles

White Horse Ceramic Philippines Distribution of ceramic 100 100 (Phil.) Inc. 3 and homogeneous tiles

White Horse Ceramic Thailand Distribution of ceramic 100 100 (Thailand) Ltd. 3 and homogeneous tiles

PT WH Ceramic Indonesia Distribution of ceramic 100 * 100 * Indonesia 3 and homogeneous tiles

Grand Mark International People’s Distribution of ceramic, 100 100 Co., Ltd. 3 Republic building materials, and

of China hardware

1 Audited by Ernst & Young, Malaysia2 Audited by member firm of Ernst & Young Global3 Audited by firms other than Ernst & Young* The total equity interests held by the Group is 100% and it is held by the following subsidiaries:

(i) White Horse Ceramic Industries Sdn. Bhd. 99.96%(ii) White Horse Ceramic (S) Pte. Ltd. 0.04%



(continued)

18. iNVENtOriES

Group 2017 2016 rM’000 rM’000

CostRaw materials 86,454 88,459 Work-in-progress 16,346 12,016 Finished goods 211,326 252,472 Packing materials 2,026 1,773 Abrasive stones 2,868 2,998 Consumable supplies 27,853 36,434

346,873 394,152 Net realisable valueConsumable supplies 3,997 –Finished goods 40,711 21,261

391,581 415,413

The amount of inventories recognised as an expense of the Group was RM301,853,000 (2016: RM306,180,000).

19. traDE aND OtHEr rECEiVaBLES Group Company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000

Currenttrade receivablesThird parties 96,987 110,050 – – Due from companies in which certain directors of the Company have interest: - Teobros Ceramica Sdn. Bhd. * 28,523 24,840 – – - White Horse Ceramic Co., Ltd. * 4,256 2,615 – –

129,766 137,505 – –Less: Allowance for impairment (third parties) (3,647) (3,842) – –

Trade receivables, net 126,119 133,663 – –

Other receivablesDue from a subsidiary – – 1,165 160 Goods and Services Tax 263 – – –Sundry receivables and deposits 12,844 8,027 5 –

13,107 8,027 1,170 160

139,226 141,690 1,170 160



(continued)

19. traDE aND OtHEr rECEiVaBLES (CONtiNuED) Group Company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000

Non-currentOther receivablesDue from a subsidiary – – 43,974 48,737 Sundry receivables and deposits 793 939 – –

793 939 43,974 48,737

Total trade and other receivables (current and non-current) 140,019 142,629 45,144 48,897 Less: Goods and Services Tax (263) – – – Add: Cash and bank balances (Note 22) 80,589 150,058 1,215 261

Total loans and receivables represent the financial assets carried at amortised cost 220,345 292,687 46,359 49,158

* These companies are substantially owned by certain directors of the Company.

(a) trade receivables

The Group’s normal trade credit term ranges from 30 to 120 days (2016: 30 to 120 days). The trade credit term given to companies in which certain directors have interest ranges from 180 to 210 days (2016: 180 to 210 days). Other credit terms are assessed and approved on a case-by-case basis. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

The Group has no significant concentration of credit risk that may arise from exposure to a single or to groups of debtors except for the amounts due from companies in which certain directors have interests as disclosed above.

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables is as follows:

Group 2017 2016 rM’000 rM’000

Neither past due nor impaired 99,673 96,537 1 to 30 days past due not impaired 7,257 16,853 31 to 60 days past due not impaired 3,397 2,642 61 to 90 days past due not impaired 3,016 929 91 to 120 days past due not impaired 527 2,497 More than 121 days past due not impaired 11,426 13,381

25,623 36,302 Impaired 4,470 4,666

129,766 137,505



(continued)

19. traDE aND OtHEr rECEiVaBLES (CONtiNuED) (a) trade receivables (Continued)

Receivables that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has total trade receivables amounting to RM25,623,000 (2016: RM36,302,000) that are past due at the reporting date but not impaired. The directors are of the opinion that the receivables are collectible in view of long term business relationships with the customers. These receivables are unsecured in nature.

RM8,282,977 (2016: RM10,716,000) of the amount past due but not impaired is related to a company in which certain directors of the Company have interest.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Group 2017 2016 rM’000 rM’000

Trade receivable - nominal amounts 4,470 4,665 Less: Allowance for impairment (3,647) (3,842)

823 823

Movement in allowance accounts:

2017 2016 rM’000 rM’000

At 1 January 3,842 3,306Charge for the year (Note 10) 144 597Written off (115) (140)Reversal of impairment loss (Note 9) (17) (27)Exchange difference (207) 106

At 31 December 3,647 3,842

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

(b) related party balances

Amount due from a subsidiary is non-interest bearing, unsecured and is repayable on demand.



(continued)

20. OtHEr CurrENt aSSEtS Group Company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000

Prepaid operating expenses 12,836 8,541 76 76Advances to suppliers of raw materials and property, plant and equipment 19,455 8,786 – –

32,291 17,327 76 76

21. iNVEStMENt SECuritiES

Group 2017 2016 rM’000 rM’000

CurrentFinancial assets at fair value through profit or lossMoney market funds quoted in Malaysia – 1,000

22. CaSH aND BaNK BaLaNCES


Cash on hand and at banks 79,498 148,973 1,215 261 Deposits with licensed banks 1,091 1,085 – –

Cash and bank balances 80,589 150,058 1,215 261

Bank balances of the Group amounting to RM170,000 (2016: RM131,000) are held under trust by certain managerial staff of the Group.

Short-term deposits are made for varying periods with maturity of less than three months depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates. The weighted average effective interest rates as at 31 December 2017 for the Group was 2.50% (2016: 2.50%) per annum.



(continued)

23. LOaNS aND BOrrOWiNGS interest rates Group per annum 2017 2016 2017 2016 Maturity rM’000 rM’000

CurrentSecured:Obligations under finance leases (Note 30(c)) 2018 14 75 USD bank loan 5.00%-6.00% 5.00%-6.00% 2018 – 1,345

Unsecured:Term loan 10.65% 10.65% 2018 4,000 4,000 USD bank loan 2.65%-5.85% 2.50%-7.18% 2018 8,181 12,451 Bankers’ acceptances 2.82% 2.88% 2018 40,640 46,872 Revolving credits 2.67% 1.76% 2018 126,329 165,273

179,164 230,016

Non-currentSecured:Obligations under finance leases (Note 30(c)) 2019 – 6Unsecured:Term loan 10.65% 10.65% 2019 - 2021 10,000 14,000

10,000 14,006

Total loans and borrowings 189,164 244,022

The remaining maturities of the loans and borrowings as at 31 December 2017 are as follows:

Group 2017 2016 rM’000 rM’000

On demand or within one year 179,164 230,016 More than 1 year and less than 2 years 4,000 4,006 More than 2 years and less than 5 years 6,000 10,000

189,164 244,022

USD bank loan

This loan is secured by a mortgage over certain of the Group’s property, plant and equipment (Note 15).

The loans and borrowings are subject to negative pledge over all assets of the Group as referred to in Notes 15 and 16.



(continued)

24. traDE aND OtHEr PaYaBLES Group Company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000

Currenttrade payablesThird parties 52,879 49,595 – – Due to a company in which certain directors of the Company have interest: - Teobros Ceramica Sdn. Bhd. 139 28 – –

53,018 49,623 – –

Other payablesDue to a company in which certain directors of the Company have interest - White Horse Investment (S) Pte. Ltd.* 16,248 26,916 16,248 26,916 Due to a subsidiary – – – 665 Sundry payables and accruals 41,958 45,001 100 100 Goods and Services Tax – 443 – –

58,206 72,360 16,348 27,681

111,224 121,983 16,348 27,681

Non-currentOther payableDue to a company in which certain directors of the Company have interest - White Horse Investment (S) Pte. Ltd.* 39,015 47,238 – –Sundry payables and accruals 571 594 – –

39,586 47,832 – –

Total trade and other payables 150,810 169,815 16,348 27,681Add: Loans and borrowings (Note 23) 189,164 244,022 – – Less: Goods and Services Tax – 443 – –

Total financial liabilities carried at amortised cost 339,974 413,394 16,348 27,681

* A company owned substantially by certain directors of the Company, namely Liao Yuan Shun, Liao Jung Chu, Liao Shen Hua, Teo Swee Teng, Teo Kim Lap, Teo Kim Tay and Cheng Soon Mong.



(continued)

24. traDE aND OtHEr PaYaBLES (CONtiNuED)

(a) trade payables

The amounts are non-interest bearing. The normal trade credit terms granted to the Group range from 30 to 90 days (2016: 30 to 90 days).

(b) related party balances

Amounts due to a company in which certain directors of the Company have interest are unsecured and non-interest bearing. Included in the amount is outstanding purchase consideration for the acquisition of White Horse Ceramic Industries (Vietnam) Co. Ltd. of RM16,248,000 (2016: RM26,916,000).

25. DEfErrED tax

Group 2017 2016 rM’000 rM’000

At 1 January 15,025 15,653 Recognised in profit or loss (Note 13) (4,019) (585)Exchange differences 119 (43)

At 31 December 11,125 15,025

Deferred income tax as at 31 December relates to the following:

Deferred Deferred tax liabilities tax assets accelerated capital Provisions allowances and others total rM’000 rM’000 rM’000

At 1 January 2016 28,590 (12,937) 15,653 Recognised in profit or loss (33) (552) (585)Exchange differences (47) 4 (43)

At 31 December 2016 28,510 (13,485) 15,025 Recognised in profit or loss (5,068) 1,049 (4,019)Exchange differences 926 (807) 119

At 31 December 2017 24,368 (13,243) 11,125

The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.



(continued)

26. SHarE CaPitaL, SHarE PrEMiuM aND trEaSurY SHarES

Number of ordinary amount share of rM1 each total Share Share share capital capital capital (issued and treasury (issued and Share and share treasury fully paid) shares fully paid) premium premium shares ’000 ’000 rM’000 rM’000 rM’000 rM’000

At 1 January 2016 240,000 10,625 240,000 6,936 246,936 (16,354)Purchase of treasury shares – 120 – – – (244)

At 31 December 2016 and 1 January 2017 240,000 10,745 240,000 6,936 246,936 (16,598)Purchase of treasury shares – 349 – – – (699)Transition to no-par value regime – – 6,936 (6,936) – –

At 31 December 2017 240,000 11,094 246,936 – 246,936 (17,297)

Number of shares amount 2017 2016 2017 2016 ’000 ’000 rM’000 rM’000

Issued and fully paidAt beginning of financial year 240,000 240,000 240,000 240,000 Transition to no-par value regime – – 6,936 –

At end of financial year 240,000 240,000 246,936 240,000



(continued)

26. SHarE CaPitaL, SHarE PrEMiuM aND trEaSurY SHarES (CONtiNuED)

(a) Share capital

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company residual assets.

Effective from 31 January 2017, the Companies Act 2016 (“the Act”) abolished the concept of authorised share capital and par value of share capital. Consequently, the amount standing to the credit balance of share premium become a part of the Company’s share capital persuant to the transitional provision set out in Section 618(2) of the Act. Notwithstanding this provision, the Company may within 24 months from the commencement of the Act, use this amount for purposes as set out in Section 618(4) of the Act. There is no impact on the number of ordinary shares in issue or the relative entitlement of the member as a result of this transition.

(b) treasury shares

Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance.

The Company acquired 348,600 (2016: 120,500) shares in the Company through purchases on Bursa Malaysia Securities Berhad during the financial year. The total amount paid to acquire the shares was RM 699,060 (2016: RM243,905) and this is presented as a component within shareholders’ equity.

The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares.

27. rEtaiNED EarNiNGS

The Company may distributes dividends out of its entire retained earnings as at 31 December 2017 under the single tier system.

28. fOrEiGN CurrENCY traNSLatiON rESErVE

The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.



(continued)

29. rELatED PartY DiSCLOSurES

(a) Sale and purchase of goods and services

In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:


Gross dividends fromsubsidiaries, White Horse Ceramic Industries Sdn. Bhd., – – 19,900 24,370

White Horse Marketing Sdn. Bhd., – – 15,000 –

Management fees from a subsidiary – – 144 144

Sales of goods to Teobros Ceramica Sdn. Bhd. * 35,080 29,911 – –

Sales of raw materials, consumable supplies and products to White Horse Ceramic Co., Ltd @ 7,611 5,982 – –

Purchase of goods from Teobros Ceramica Sdn. Bhd. * 245 279 – –

* A company owned substantially by certain directors, namely Teo Swee Teng, Teo Kim Lap and Teo Kim Tay.

@ A company owned substantially by certain directors, namely Liao Yuan Shun, Liao Jung Chu and Liao Shen Hua.

(b) Compensation of key management personnel

Group 2017 2016 rM’000 rM’000

Short-term employee benefits 1,967 2,303

Key management personnel comprise of executive directors of the Company and non-executive directors of the Company who are the executive directors of the subsidiaries.



(continued)

30. COMMitMENtS

(a) Capital commitments

Group 2017 2016 rM’000 rM’000

In respect of capital expenditure:- Approved and contracted for 1,916 11,500

(b) Operating lease commitments - as lessee

The Group has entered into non-cancellable operating lease agreements for the use of land and buildings. These leases have an average life of between 2 to 37 years with renewal option included in the certain contracts. Certain contracts include escalation clauses computed based on percentage of rental while others include fixed rentals for an average life of between 2 to 5 years. There are no restrictions placed upon the Group by entering into these leases.

The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at the reporting date but not recognised as liabilities are as follows:

Group 2017 2016 rM’000 rM’000

Future minimum rentals payments:Not later than 1 year 5,382 5,920 Later than 1 year and not later than 5 years 10,219 9,243After 5 years 40,120 40,916

55,721 56,079



(continued)

30. COMMitMENtS (CONtiNuED)

(c) finance lease commitments

The Group has finance leases for certain items of motor vehicles (Note 15). These leases do not have terms of renewal, but have purchase options at nominal values at the end of the lease term.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

2017 2016 rM’000 rM’000

Minimum lease payments:Not later than 1 year 15 78 Later than 1 year but not later than 2 years – 10

Total minimum lease payments 15 88 Less: Amounts representing finance charges (1) (6)

Present value of minimum lease payments 14 82

Present value of payments:Not later than 1 year 14 75 Later than 1 year but not later than 2 years – 6

Present value of minimum lease payments 14 81 Less: Amount due within 12 months (Note 23) (14) (75)

Amount due after 12 months (Note 23) – 6

31. fair VaLuE Of fiNaNCiaL iNStruMENtS

Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

Note

Trade and other receivables (current) 19Trade and other payables (current) 24Loans and borrowings (current) 23Loans and borrowings (non-current) 23

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.



(continued)

31. fair VaLuE Of fiNaNCiaL iNStruMENtS (CONtiNuED)

Determination of fair value (Continued)

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value (Continued)

The carrying amounts of the loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2: Inputs that are based on observable market data, either directly or indirectly

Level 3: Inputs that are not based on observable market data

Quoted prices in Significant Significant active observable unobservable market inputs inputs total (Level 1) (Level 2) (Level 3) rM’000 rM’000 rM’000 rM’000

Group


assets measured at fair value:(i) Financial asset at fair value through profit or loss - Quoted investment securities (Note 21) – – – –


assets measured at fair value:(i) Financial asset at fair value through profit or loss - Quoted investment securities (Note 21) 1,000 1,000 – –

During the reporting period ended 31 December 2017 and 2016, there were no transfers between the various fair value measurements.



(continued)

32. fiNaNCiaL riSK MaNaGEMENt OBJECtiVES aND POLiCiES

Financial liabilities comprise loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. Financial assets include trade and other receivables and cash and short-term deposits that derive directly from its operations.

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks and ensures that the Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk and foreign currency risk. Financial instruments affected by market risk include loans and borrowings, deposits, trade and other receivables and trade and other payables.

(i) interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Exposure to the risk of changes in market interest rates relates primarily to the long-term debt obligations with floating interest rates.

Interest rate risk arises primarily from interest-bearing borrowings. Interest rate exposure is managed by maintaining a balanced mix of fixed and floating rate borrowings and regular reviews of its debt portfolio.

Information on maturity dates and effective interest rates of financial assets and liabilities are disclosed in their respective notes.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates based on the utilisation of floating rate loans and borrowings throughout the reporting period. With all other variables held constant, the Group’s profit before tax is affected through the impact on floating rate borrowings, as follows:

Effect on Group’s profit before tax

2017 2016 rM’000 rM’000

Increase in 10 basis points (189) (350)Decrease in 10 basis points 189 350

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.



(continued)

32. fiNaNCiaL riSK MaNaGEMENt OBJECtiVES aND POLiCiES (CONtiNuED)

(a) Market risk (Continued)

(ii) foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Exposure to the risk of changes in foreign exchange rates relates primarily to the operating activities when revenue or expense is denominated in a foreign currency other than the functional currency of the operations to which they relate.

The net unhedged financial assets/(financial liabilities) of the Group that are not denominated in its functional currency are as follows:

Net financial assets/(Liabilities) Held in Non-functional Currency

united Singapore States Chinesefunctional Dollars Dollars Euro renminbi total Currencies rM’000 rM’000 rM’000 rM’000 rM’000

at 31 December 2017

Singapore Dollars (“SGD”) – (1,253) – – (1,253)Ringgit Malaysia (“RM”) (397) (125,067) 788 873 (123,803)Indonesian Rupiah (“IDR”) – (1) – – (1)Vietnamese Dong (“VND”) – (8,722) – – (8,722)

(397) (135,043) 788 873 (133,779)

at 31 December 2016

Singapore Dollars (“SGD”) – (2,469) – – (2,469)Ringgit Malaysia (“RM”) (299) (190,391) 1,581 917 (188,192)Indonesian Rupiah (“IDR”) – – – – – Vietnamese Dong (“VND”) – (5,701) – – (5,701)

(299) (198,561) 1,581 917 (196,362)



(continued)


(a) Market risk (Continued)

(ii) foreign currency risk (Continued)

Sensitivity analysis for foreign currency risk

The hypothetical sensitivity of the Group’s profit before tax to a 10% change in the USD, SGD, Euro, IDR, VND and RMB exchange rates at the reporting date against RM, assuming all other variables remain unchanged.

Group 2017 2016 rM’000 rM’000

Profit before tax

USD/RM - strengthened 10% (2016: 10%) (12,507) (19,039) - weakened 10% (2016: 10%) 12,507 19,039SGD/RM - strengthened 10% (2016: 10%) (39) (30) - weakened 10% (2016: 10%) 39 30Euro/RM - strengthened 10% (2016: 10%) 79 158 - weakened 10% (2016: 10%) (79) (158)RMB/RM - strengthened 10% (2016: 10%) 87 92 - weakened 10% (2016: 10%) (87) (92)USD/SGD - strengthened 10% (2016: 10%) (125) (247) - weakened 10% (2016: 10%) 125 247 USD/VND - strengthened 10% (2016: 10%) (872) (570) - weakened 10% (2016: 10%) 872 570

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.



(continued)


(b) Credit risk (Continued)

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

Credit risk concentration profile

At the reporting date, the Group does not have any significant exposure to any individual customer or counterparty except for companies in which certain directors have interests as disclosed in Note 19, which accounts for 26% (2016: 21%) of the total trade receivables. The directors believe that this does not create significant impact for the Group in view of the fact that the directors have direct participation and influential power in the management of these counterparties.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 19. Deposits with banks that are neither past due nor impaired are placed with or entered into with reputable financial institutions with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 19.

(c) Liquidity risk

Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

The Group and the Company manage its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group and the Company maintain sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group and the Company strive to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group and the Company raise committed funding from financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.



(continued)


(c) Liquidity risk (Continued)

analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2017 Within One to one year five years total rM’000 rM’000 rM’000

Group

financial liabilities:Trade and other payables 111,224 41,133 152,357Loans and borrowings 179,164 14,313 193,477

Total undiscounted financial liabilities 290,388 55,446 345,834

Company

financial liabilities:Other payables, including financial guarantees* 224,260 – 224,260

Total undiscounted financial liabilities 224,260 – 224,260

2016 Within One to one year five years total rM’000 rM’000 rM’000

Group

financial liabilities:Trade and other payables 121,540 51,355 172,895 Loans and borrowings 230,016 18,984 249,000

Total undiscounted financial liabilities 351,556 70,339 421,895

Company

financial liabilities:Other payables, including financial guarantees* 278,448 – 278,448

Total undiscounted financial liabilities 278,448 – 278,448

* Based on the maximum amount that can be called for under the financial guarantee contracts.



(continued)


(c) Liquidity risk (Continued)

A nominal amount of RM207,912,000 (2016: RM251,432,000) relating to corporate guarantees provided by the Company to banks for its subsidiaries’ loans and borrowings.

The fair value of the corporate guarantees granted by the Company to banks in respect of loans and borrowings obtained by its subsidiaries is not material as the difference in borrowing rates charged by the banks is not significant in the absence of such guarantees.

33. CaPitaL MaNaGEMENt

The primary objective of the Group’s capital management is to ensure that it maintains a healthy capital ratio to support its operations and maximise shareholder value.

The Group manages its capital structure and makes adjustments, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders. No changes were made in the objectives, policies or processes during the years ended 31 December 2017 and 31 December 2016.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances.

Group Company 2017 2016 2017 2016 Note rM’000 rM’000 rM’000 rM’000

Loans and borrowings 23 189,164 244,022 – – Trade and other payables 24 150,810 169,815 16,348 27,681 Less: - Cash and bank balances 22 (80,589) (150,058) (1,215) (261)

Net debt 259,385 263,779 15,133 27,420

Total capital 745,435 768,297 241,344 233,501

Capital and net debt 1,004,820 1,032,076 256,477 260,921

Gearing ratio 25.8% 25.6% 5.9% 10.5%



(continued)

34. DiViDENDS

Group and Company 2017 2016 rM’000 rM’000

recognised during the financial year: Dividends on ordinary shares: - Final tax exempt dividend for 2016: 5 sen (2015: 5 sen) per share 11,450 11,468 - Interim tax exempt dividend for 2017: 5 sen (2016: 5 sen) per share 11,445 11,463

22,895 22,931

At the forthcoming Annual General Meeting, a final tax exempt dividend in respect of the financial year ended 31 December 2017 of 2 sen per share on 228,895,800 ordinary shares, amounting to a dividend payable of RM4,577,916 will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2018.

35. SEGMENtaL rEPOrtiNG

For management purposes, the Group is organised into business units based on their geographical areas, and has three reportable operating segments as below:

(i) Malaysia - The Malaysia segment includes manufacturing and distribution of ceramic homogenous tiles in Malaysia.

(ii) Vietnam - The Vietnam segment includes manufacturing and distribution of ceramic homogenous tiles in Vietnam.

(iii) Others - The other segments include distribution of ceramic homogenous tiles in Indonesia, Philippine, Singapore and Thailand.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.



(continued)

35. SEGMENtaL rEPOrtiNG (CONtiNuED) The directors are of the opinion that all inter-segment transactions have been entered into in the normal course

of business and have been established on negotiated and mutually agreed terms.

31 December 2017

adjustments and Malaysia Vietnam Others Eliminations Notes Consolidated rM’000 rM’000 rM’000 rM’000 rM’000

revenueExternal sales 438,151 135,289 66,663 – 640,103 Inter-segment sales 20,275 – – (20,275) A –

Total revenue 458,426 135,289 66,663 (20,275) 640,103

resultsInterest income 2,388 43 9 – 2,440 Depreciation and amortisation 30,830 8,730 2,134 – 41,694 Inventories written down/(write-back) 8,532 5,390 (910) – 13,012 Inventories written off 533 – – – 533 Unrealised foreign exchange (gain)/loss (8,700) 3,322 (115) – (5,493)Segment profit/(loss) 20,807 (5,684) (35) (8,259) B 6,829

assetsAdditions to non-current assets 22,651 1,978 266 – 24,895 Segment assets 865,637 172,361 63,742 6,316 C 1,108,056

LiabilitiesSegment liabilities 243,212 101,000 7,284 11,125 D 362,621

Other segment informationCapital commitments 1,916 – – – 1,916



(continued)

35. SEGMENtaL rEPOrtiNG (CONtiNuED)

31 December 2016

adjustments and Malaysia Vietnam Others Eliminations Notes Consolidated rM’000 rM’000 rM’000 rM’000 rM’000

revenueExternal sales 480,295 129,265 85,598 – 695,158 Inter-segment sales 27,811 15,480 – (43,291) A –

Total revenue 508,106 144,745 85,598 (43,291) 695,158

resultsInterest income 2,900 51 21 – 2,972 Depreciation and amortisation 34,789 11,694 2,364 – 48,847 Inventories write-back (11,074) – – – (11,074)Unrealised foreign exchange loss 5,334 4,160 – 165 9,659 Segment profit/(loss) 40,416 (237) 4,313 (6,897) B 37,595

assetsAdditions to non-current assets 18,866 4,632 515 – 24,013 Segment assets 930,718 201,748 75,508 677 C 1,208,651

LiabilitiesSegment liabilities 307,196 120,183 236 12,739 D 440,354

Other segment informationCapital commitments 11,500 – – – 11,500



(continued)

35. SEGMENtaL rEPOrtiNG (CONtiNuED)

A Inter-segment revenues are eliminated on consolidation.

B The following items are added to/(deducted from) segment profit to arrive at “profit before tax” presented in the consolidated statement of comprehensive income.

2017 2016 rM’000 rM’000

Finance costs (8,259) (6,960)

C The following items are added to segment assets to arrive at total assets reported in the consolidated statement of financial position:

2017 2016 rM’000 rM’000

Tax recoverable 5,639 2,286 Goodwill 677 677

6,316 2,963

D The following items are added to segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2017 2016 rM’000 rM’000

Deferred tax liabilities 11,125 15,025

36. autHOriSatiON Of fiNaNCiaL StatEMENtS fOr iSSuE

The financial statements for the year ended 31 December 2017 were authorised for issue in accordance with a resolution of the directors on


Location address DescriptionExistinguse tenure

approximateage of

Building(years)

Land &Built-up

area(sq meter)

Dateof

acquisition

2017Carryingamount

(rM)

Lot PTD 156654,HS(D) 309464Mukim of Plentong,District of Johor Bahru,Johor

PLO 464, Jalan Gangsa,Pasir GudangIndustrial Estate,81700 Pasir GudangJohor

Industrial buildingand a block of5 Storeycorporate officewith basement.

Owner occupied

Lease from JohorCorporation30 years expiringon 03/07/2022with option forfurther extensionof 30 years.

21 83,079&

64,425

01-Oct-91 33,925,666

Lot PTD 2860,HS(D) 367647Mukim of Sungai Tiram,District of Johor Bahru,Johor

PLO 29,Tanjung LangsatIndustrial Complex,81700 Pasir Gudang

Industrial building Owneroccupied

Leasehold 60years expiringon 08/02/2064

16 129,624&

92,047

01-Sep-00 65,299,417



Industrial building Owneroccupied


7 117,055&

27,090

24-Nov-09 32,024,063

Lot PTD 4587,HS(D) 503711Mukim of Sungai Tiram,District of Johor Bahru, Johor


Vacant Land forIndustrial building

Owneroccupied


6 50,931&0

01-Jan-13 6,684,365

Lot PTD 119781,HS(D) 247731,Mukim of Plentong,District of Johor Bahru,Johor

PLO 453, Jalan Keluli 3,Pasir GudangIndustrial Estate,81700 Pasir GudangJohor

Single storeywarehouseand annexedwith doublestorey office

Owneroccupied

Lease from JohorCorporation30 years expiringon 30/12/2026with option forfurther extensionof 30 years.

20 24,280&

14,295

01-May-95 8,059,685


PLO 496, Jalan Keluli 3,Pasir GudangIndustrial Estate,81700 Pasir GudangJohor

Single storeywarehouse

Owneroccupied

Leasehold 30years expiringon 21/06/2030with option forfurther extensionof 30 years.

17 25,490&

14,605

01-Sep-00 8,639,249


PLO 728, Zone 12,Pasir GudangIndustrial Area


Owneroccupied


12 20,488&

13,413

30-Sep-07 8,984,377

LIsT OF LANDED PROPERTIEs




approximateage of

Building(years)

Land &Built-up

area(sq meter)

Dateof

acquisition

2017Carryingamount

(rM)


Block 7,Jalan Cendana 2,Taman Cendana,81700 Pasir GudangJohor

A block of5 storey mediumcost flat with38 unitsapartments

Owner occupied


21 3,600&

2,531

31-Mar-97 1,683,634

HS(D) 135082& 135083PTD 71022 & 71023Mukim Plentong

Block 69 & 68Jalan Tembusu,Taman Air Biru,81700 Pasir Gudang,Johor.

A block of5 storey mediumcost flat with35 unitsapartments

Owneroccupied


31 2,678&

2,230

31-Jan-07 2,398,947



Industrial land Owneroccupied


16 4,468&0

01-Jul-02 496,678



Natural gasservice station

Owneroccupied


16 400&0

01-Sep-01 56,792

GRN 459987LOT 90523Mukim of PlentongDistrict of Johor Bahru.

H.S.(D) No 302878,P.T. No PTD 15664Mukim of Plentong District of Johor Bahru.

Vacant Land for2 storeywarehouse andshowroomwith 3-storeyoffice

Owneroccupied

Freehold 4 9,528 30-Sep-14 15,465,139

Lot P.T.No:17306,HS(M) 10066,Mukim of Batu,District of Gombak,Selangor.

No:1, JalanPersiaran Satu,Bandar Baru Selayang,68100 Batu Caves

Single storeywarehouseand annexedwith threestorey office

Owneroccupied


20 12,550&

7,884

01-Jul-95 12,237,872

GM 975 Lot 2737Mukim Klang,Daerah Klang

Lot 2737,Jalan Nong / KS2,Taman PerindustrianSg, Jati41200 Klang,Selangor


Owneroccupied

Freehold 10 12,014&

8,628

24-Mar-05 13,132,650

List of Landed Propertiesas at 31 December 2017

(continued)



(continued)


approximateage of

Building(years)

Land &Built-up

area(sq meter)

Dateof

acquisition

2017Carryingamount

(rM)

Lot No:67890,HS(D)KA 1257/76Mukim Ulu Kinta,District of Kinta,Perak

Plot 76,Persiaran Portland,Kawasan PerindustrianTasek,31400 Ipoh


Owner occupied


16 4,065&

2,717

28-Feb-02 2,032,980

PN 2918, Lot 68293,Mukim Ulu Kinta,District of Kinta,Perak

Plot 81,Persiaran Portland,Kawasan PerindustrianTasek,31400 Ipoh

Vacant Land forIndustrial Building

Owneroccupied


42 4,065 31-Jan-11 1,009,215

Mukim 63 Lot 1214Mukim Mergung,Daerah Kota Setar

No 202Kaw PerusahaanMergong II,Lorong Perak 805150 A lor Setar, Kedah

7 units of2 storey and2 units ofwarehouse

Owneroccupied


40 5,727 31-Jul-07 3,185,028

HS(M) 460 PT 4526,Mukim 01,Seberang Perai TengahPulau Pinang

No 3088Jalan Kelisa Emas 1,Seberang Jaya, 13700 Perai


Owneroccupied

Freehold 12 7,778&

8,894

01-Mar-06 17,068,004

Lot 55, HS(D) 1456,PTD 8754, Mukim ofKuala Kuantan,Pahang

Lot 55, SemambuIndustrial Estate,25350 Kuantan


Owneroccupied


38 4,480&

1,583

30-Sep-98 1,109,013

HS(D) 3087,PTD 2404, MukimSimpang Kanan,Batu Pahat, Johor.

104, Jalan Jelawat,Taman Banang,83000 Batu Pahat,Johor.

Single StoreyShophouse

Owneroccupied

Freehold 46 164 14-Feb-11 317,103

HS(M) 11473,LOT 5644,Mukim Kajang,Daerah Hulu Langat,Selangor

HS(M) 11473,LOT 5644,Mukim Kajang,Daerah Hulu Langat,Selangor

Vacant Land Owneroccupied


48 15,517 30-Sep-14 6,558,924



approximateage of

Building(years)

Land &Built-up

area(sq meter)

Dateof

acquisition

2017Carryingamount

(rM)

Country Lease No. 015364646Mile 10, Tuaran Road,District of KotaKinabalu, Sabah

Mile 10, Tuaran Road,in the District of Kota Kinabalu,Sabah.

Vacant Land Owner occupied


94 9,834 31-Jul-15 11,356,274

No 7525 Tambol,Bang Pleeyai,Amphur, Bangplee,Samutprakam,Bangkok, Thailand.

Bangna Tart RoadKM 11, Bangplee,Samutprakam,Bangkok, Thailand


Owner occupied


13 9,600&

8242

13-Jan-05 6,733,500

A 12502 (now knownas Lot 1342m)MK 11, Singapore

No. 1,Sungai Kadut Way,Singapore 728770


Owneroccupied


25 4,374&

2,916

25-Jul-03 4,946,973

Street 2A, My Xuan AIndustrial Park,Tan Thanh District,Ba Ria-Vung TauProvince,Vietnam

Street 2A, My Xuan AIndustrial Park,Tan Thanh District,Ba Ria-Vung TauProvince,Vietnam

Industrialbuildings and ablock of 4 storeycorporate office

Owneroccupied


10 278,511&

99,802

01-Aug-08 23,411,563

48, Street 4, Da NangIndustrial Park,An Don, Son TraDistrict, Da Nang City,Vietnam

48, Street 4, Da NangIndustrial Park,An Don, Son TraDistrict, Da Nang City,Vietnam


Owneroccupied


13 6,253&

4,527

01-May-05 729,015

Unit LD-7.8Lexington BuildingNo 6, An Phu Town, An Phu Ward, District 2,Ho Chi Minh CityVietnam

Unit LD-7.8Lexington BuildingNo 6, An Phu Town, An Phu Ward, District 2,Ho Chi Minh CityVietnam

Residential apartment

Owner occupied


1 82 29-Mar-17 529,768

total : 288,075,894


(continued)


ANALysIs OF sHAREHOLDINGs

as at 31 March 2018

Total Number of Issued Shares (inclusive of treasury shares) RM240,000,000/- comprising of 240,000,000 : ordinary sharesClass of Shares : Ordinary SharesVoting Rights : One vote per ordinary shareTreasury Shares held as at 30 March 2018 : 11,104,200 ordinary shares

1. DiStriButiON Of SHarEHOLDErS

Size of Holdings No. of Holders % No. of Shares %

1 - 99 12 0.58 160 0.00100 - 1,000 231 11.17 180,840 0.081,001 - 10,000 1,467 70.94 5,161,300 2.2510,001 - 100,000 260 12.57 7,216,900 3.15100,001 - 11,444,789 (less than 5% 96 4.64 181,438,885 79.27of Issued Shares) 11,444,790 and above (5% and above 2 0.10 34,897,715 15.25of Issued Shares)

2,068 100.00 228,895,800 100.00

2. DirECtOrS’ SHarEHOLDiNGS

The Directors’ Shareholdings of White Horse Berhad based on the Register of Directors’ Shareholdings are as follows:-

No. of Ordinary Shares HeldNo. Direct % indirect %

1. Liao Yuan Shun 1,600,855 0.70 26,496,000 (1) 11.58 2. Liao Jung Chu 1,098,000 0.48 7,520,303 (2) 3.29 3. Liao Shen Hua 2,600,797 1.14 8,500,000 (3) 3.71 4. Teo Swee Teng 11,073,593 4.84 2,425,000 (4) 1.06 5. Teo Kim Lap 11,083,027 4.84 1,450,000 (5) 0.63 6. Teo Kim Tay 12,409,015 5.42 150,000 (6) 0.07

7. Cheng Soon Mong 4,877,735 2.13 132,500 (7) 0.06 8. Chew Pei Fang – – 120,000 (8) 0.05 9. Law Piang Woon – – – – 10. Rosita Yeo Swat Geok – – – –


3. LiSt Of SuBStaNtiaL SHarEHOLDErS

The List of Substantial Shareholders of White Horse Berhad based on the Register of Substantial Shareholders of the Company and their respective shareholdings are as follows:-

No. of Ordinary Shares HeldNo. Direct % indirect %

1. Lembaga Tabung Haji 22,488,700 9.82 – –

2. Teo Kim Tay 12,409,015 5.42 150,000 (6) 0.07

3. Liao Yuan Shun 1,600,855 0.70 26,496,000 (1) 11.58

4. Teo Swee Teng 11,073,593 4.84 2,425,000 (4) 1.06

5. Teo Boon Hoo 11,663,335 5.10 – –

6. Teo Kim Lap 11,083,027 4.84 1,450,000 (5) 0.63

Note:

(1) Deemed interested through his wife, Liao Chen Mei Hsiu and his sons, Liao Hung Chang and Liao Chia Feng, his daughters, Liao Chung Yi and Liao Chia Ning and through his direct interest in Ding Qiao Investment Co., Ltd.

(2) Deemed interested through his sons, Liao Shen Hua, Liao Shen Yao and Liao Shen Chun.

(3) Deemed interested through his son, Liao Kuan Yung, his daughters, Liao Wan Yu and Liao Tzu Chi and through his direct interest in Bao Shun Investment Co., Ltd.

(4) Deemed interested through his mother, Yeow Hoon Eng, his wife, Ku Kuan and his sons, Teo Wee Kee and Teo Wee Siong and his daughter, Teo Wei Chin.

(5) Deemed interested through his mother, Yeow Hoon Eng, his wife, Ong Yock Hong and his son, Teo Rhen Gie and his daughters, Teo Sin Rhu and Teo Sin Yee.

(6) Deemed interested through his mother, Yeow Hoon Eng.

(7) Deemed interested through his wife, Tan Pak Lan and his son, Cheng Hang Huat and his daughter, Cheng Swee Chin.

(8) Deemed interested through her spouse, Yap Wai Ming.

Analysis of Shareholdingsas at 31 March 2018

(continued)


Analysis of Shareholdingsas at 31 March 2018

(continued)

4. LiSt Of tHirtY LarGESt SECuritiES aCCOuNtS HOLDErS No. Names Shareholdings %

1. Lembaga Tabung Haji 22,488,700 9.822. Teo Kim Tay 12,409,015 5.423. Teo Swee Teng 11,073,593 4.844 Teo Boon Hoo 11,058,835 4.835. Teo Kim Lap 11,048,527 4.836. Liao Chia Feng 6,500,000 2.847. Liao Chung Yi 6,500,000 2.848. Liao Hung Chang 6,500,000 2.849. Cheng Soon Mong 4,877,735 2.1310. Chen, Yu-Ching 4,835,000 2.1111. UOB Kay Hian Nominees (Asing) Sdn. Bhd. 4,385,470 1.92 Exempt An for UOB Kay Hian Pte Ltd12. Liao Chia Ning 4,296,000 1.8813. Liao, Shen-Chun 4,224,609 1.8514. Ang Tian Su 4,206,694 1.8415. Chen, Tsui-Ling 4,118,000 1.8016. Chen, Yu-Ju 4,118,000 1.8017. Liao, Chih-Hao 4,000,000 1.7518. Liao, Chun-Hao 4,000,000 1.7519. AMSEC Nominees (Tempatan) Sdn. Bhd. 3,303,900 1.44 Pledged Securities Account - Ambank (M) Berhad for Lim Pei Tiam @ Liam Ahat Kiat (SMART)20. Liao Kuan Yung 3,000,000 1.3121. Liao Wan Yu 3,000,000 1.3122. Liao, Chieh-Ting 3,000,000 1.3123. Liao, Yen-Jen 3,000,000 1.3124. Yong Sheng Investment Co., Ltd. 3,000,000 1.3125. Chen, Hen-Jui 2,834,637 1.2426. Liao, Shen-Yao 2,800,897 1.2227. Wong Heng Mui 2,717,560 1.1928. Bao Shun Investment Co., Ltd. 2,700,000 1.1829. Liao, Shen-Hua 2,600,797 1.1430. Shih, Chi-Fong 2,560,000 1.12

165,157,969 72.15

Note:-

The analysis of shareholdings is based on the total number of issued shares of the Company as at 30 March 2018 after deducting 11,104,200 ordinary shares bought back by the Company and held as Treasury Shares as at 30 March 2018.


NOTICE OF ANNuAL GENERAL MEETING

NOtiCE iS HErEBY GiVEN that the Twentieth Annual General Meeting of WHITE HORSE BERHAD will be held at PLO 464, Jalan Gangsa, Pasir Gudang Industrial Estate, 81700 Pasir Gudang, Johor Darul Takzim on Wednesday, 23 May 2018 at 2:00 p.m. for the following purposes:-

aGENDa

1. To receive the Audited Financial Statements for the financial year ended 31 December 2017 together with the Reports of the Directors and the Auditors thereon.

[Please refer to Explanatory Note 1]

2. To approve the payment of the final tax-exempt dividend of 2 sen per share for the financial year ended 31 December 2017.

(Resolution 1)

3. To re-elect the following Directors who retire pursuant to Article 94 of the Company’s Articles of Association and being eligible, have each offered themselves for re-election:-

(a) Mr. Liao Shen Hua(b) Mr. Liao Yuan Shun

Ms. Chew Pei Fang who retires in accordance with Article 94 of the Articles of Association, has expressed her intention not to seek for re-election. Hence, she will retain office until the close of the Twentieth Annual General Meeting.

(Resolution 2)(Resolution 3)

4. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to determine their remuneration.

(Resolution 4)

5. as Special Business

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

Ordinary resolution No. 1- Payment of Directors’ fees

“tHat the Directors’ fees amounting to RM150,000/- only for the financial year ended 31 December 2017, be and is hereby approved for payment.”

Ordinary resolution No. 2- Payment of Benefits Payable to the Non-Executive Directors Pursuant to

Section 230(1)(b) of the Companies act, 2016

“tHat subject to Section 230(1)(b) of the Companies Act, 2016, the benefits payable to the Non-Executive Directors up to an amount of RM180,000/- from 24 May 2018 to the Twenty-First Annual General Meeting of the Company, be and is hereby approved for payment.”

(Resolution 5)

(Resolution 6)


Ordinary resolution No. 3- authority to issue Shares Pursuant to the Companies act, 2016

“tHat subject to the Companies Act, 2016, the Articles of Association of the Company and approvals of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other governmental/regulatory authorities, the Directors of the Company be and are hereby empowered, pursuant to the Companies Act, 2016, to issue and allot shares in the Company at any time to such persons and upon such terms and conditions and for such purposes as the Directors of the Company may, in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total number of issued shares of the Company for the time being and the Directors of the Company be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Securities; aND tHat such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Ordinary resolution No. 4- Proposed renewal of authority for Share Buy-Back

“tHat, subject to the compliance with Section 127 of the Companies Act, 2016 and all other applicable laws, rules and regulations, provisions of the Company’s Memorandum and Articles of Association and the requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), approval be and is hereby given to the Company, to purchase such amount of ordinary shares in the Company (“Shares”) as may be determined by the Directors of the Company from time to time through Bursa Securities as the Directors may deem fit and expedient in the interest of the Company provided that the aggregate number of Shares to be purchased and held pursuant to this resolution does not exceed ten per centum (10%) of the existing total number of issued shares of the Company including the Shares previously purchased and retained as treasury shares (if any), upon such terms and conditions as set out in the Statement to Shareholders dated 24 April 2018;

aND tHat such authority shall commence immediately upon the passing of this resolution and until the conclusion of the next Annual General Meeting of the Company or the expiry of the period within which the next Annual General Meeting is required by law to be held unless revoked or varied by ordinary resolution in the general meeting of the Company but so as not to prejudice the completion of a purchase made before such expiry date, in any event in accordance with the provisions of Bursa Securities’ Main Market Listing Requirements and any other relevant authorities;

aND tHat the maximum amount of funds to be utilised for the purpose of the Proposed Renewal of Authority for Share Buy-Back shall not exceed the Company’s retained profits based on the latest audited financial statements of the Company for the financial year ended 31 December 2017 of RM11,705,000/-;

aND tHat authority be and is hereby given to the Directors of the Company to decide in their absolute discretion to retain the Shares in the Company so purchased by the Company as treasury shares and/or to cancel them and/or to resell them and/or to distribute them as share dividends in such manner as may be permitted and prescribed by the provisions of Bursa Securities Main Market Listing Requirements and any other relevant authorities;

(Resolution 7)

(Resolution 8)

Notice ofAnnual General Meeting

(continued)



(continued)

aND tHat authority be and is hereby given to the Directors of the Company to take all such steps as are necessary to implement, finalise and give full effect to the aforesaid with full powers to assent to any conditions, modifications, variations and/or amendments (if any) as may be imposed by the relevant authorities and to do all such acts and things as the Directors may deem fit and expedient in the interests of the Company.”

Ordinary resolution No. 5- Proposed renewal of Shareholders’ Mandate for recurrent related Party

transactions of a revenue or trading Nature

“tHat subject to the Companies Act, 2016 (“the act”), the Memorandum and Articles of Association of the Company and Bursa Malaysia Securities Berhad Main Market Listing Requirements, approval be and is hereby given to the Company and its subsidiaries to enter into any of the category of recurrent transactions of a revenue or trading nature as set out in Part II – Proposed Renewal of Shareholders’ Mandate, Paragraph 1.3 of the Company’s Circular to Shareholders dated 24 April 2018 with the related parties mentioned therein which are necessary for White Horse Berhad Group’s day-to-day operations subject further to the following:-

(a) the transactions are in the ordinary course of business and are on normal commercial terms which are not more favourable to the related parties than those available to the public and on terms not to the detriment of the minority shareholders; and

(b) disclosure is made in the annual report of the breakdown of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year based on the following information:

(i) the types of recurrent related party transactions made; and(ii) the names of the related parties involved in each type of the recurrent

related party transactions made and their relationship with the Company.

aND tHat such approval shall continue to be in force until:-

(a) the conclusion of the next Annual General Meeting (“aGM”) of the Company following the forthcoming AGM at which such Proposed Renewal of Shareholders’ Mandate was passed, at which time it will lapse, unless by a resolution passed at an AGM whereby the authority is renewed;

(b) the expiration of the period within which the next AGM of the Company subsequent to the date it is required to be held pursuant to the provisions of the Act; or

(c) revoked or varied by resolution passed by the shareholders in an AGM or Extraordinary General Meeting,

whichever is earlier;

And the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this resolution.”

(Resolution 9)


Ordinary resolution No. 6 - approval to Continue in Office as independent Non-Executive Director

“tHat Mr. Law Piang Woon who has served the Board as an Independent Non-Executive Director of the Company for a cumulative term of more than twelve (12) years since 19 June 2001, be and is hereby retained as an Independent Non-Executive Director of the Company.”

(Resolution 10)

6. To transact any other ordinary business for which due notice has been given.

NOtiCE Of DiViDEND ENtitLEMENt

NOtiCE iS aLSO HErEBY GiVEN that the final tax-exempt dividend of 2 sen per share in respect of the financial year ended 31 December 17 will be payable on 10 July 2018 to depositors who are registered in the Record of Depositors at the close of business on 22 June 2018, if approved by shareholders at the forthcoming Twentieth Annual General Meeting of the Company held on Wednesday, 23 May 2018.

A Depositor shall qualify for entitlement only in respect of:-

(a) Shares transferred into the Depositor’s Securities Account before 4:00 p.m. on 22 June 2018 in respect of ordinary transfers; and

(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.

By Order of the Board

Chua Siew ChuanMAICSA 0777689Company Secretary

Johor Darul Takzim24 April 2018


(continued)



(continued)

Explanatory Notes to Ordinary Businesses:

1. Item 1 of the Agenda

This agenda item is meant for discussion only, as the provision of Section 340 (1) (a) of the Companies Act, 2016 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this agenda item is not put forward for voting.

2. Payment of Directors’ Fees

The proposed adoption of the Ordinary Resolution No. 1, if passed, will authorise the payment of Directors’ fees pursuant to Article 67 of the Articles of Association of the Company.

3. Benefits payable to the Non-Executive Directors

The proposed benefits payable to the Non-Executive Directors pursuant to Section 230(1)(b) of the Companies Act, 2016 has earlier been reviewed by the Remuneration Committee and the Board of Directors of the Company, which recognise that the benefits payable is in the best interest of the Company for the applicable period between 24 May 2018 to the Twenty-First Annual General Meeting of the Company. The proposed benefit comprises of meeting allowance of RM500/- per meeting day for each Independent Non-Executive Director, which shall be accorded based on actual attendance of meetings by the Independent Non-Executive Directors. In addition, the proposed benefits comprise of travelling allowance, car allowance and sports club membership subscription.

4. Authority to Issue Shares Pursuant to the Companies Act, 2016

The proposed adoption of the Ordinary Resolution No. 3, if passed, will empower the Directors of the Company to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting provided that the aggregate number of shares issued does not exceed 10% of the total number of issued shares of the Company during the preceding twelve (12) months for the time being.

The general mandate will provide flexibility to the Company for allotment of shares for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment project(s), working capital and/or acquisition(s).

This general mandate sought by the Company is to renew the general mandate granted to the Directors at the Nineteenth Annual General Meeting held on 26 May 2017 to issue shares pursuant to the Companies Act, 2016. 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 Nineteenth Annual General Meeting held on 26 May 2017 and which will lapse at the conclusion of the Twentieth Annual General Meeting.

5. Proposed Renewal of Authority for Share Buy-Back

The proposed adoption of the Ordinary Resolution No. 4 is to renew the authority granted by the shareholders of the Company at the Nineteenth Annual General Meeting held on 26 May 2017. The proposed renewal will allow the Directors to exercise the power of the Company to purchase not more than 10% of the total number of issued shares of the Company any time within the time period stipulated in the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“Main Lr”).


Explanatory Notes to Ordinary and Special Businesses: (Continued)

6. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

The proposed adoption of the Ordinary Resolution No. 5 is to renew the existing shareholders’ mandate granted by the shareholders of the Company at the Nineteenth Annual General Meeting held on 26 May 2017. The proposed renewal of shareholders’ mandate will enable the Company and its subsidiaries (White Horse Berhad Group) to enter into any of the recurrent related party transactions of a revenue or trading nature which are necessary for White Horse Berhad Group’s day-to-day operations, subject to the transactions being in the ordinary course of business and on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company.

7. Approval to Continue in Office as Independent Non-Executive Director

(i) Mr. Law Piang Woon

The Board of Directors has vide the Nomination Committee conducted an annual performance evaluation and assessment of Mr. Law Piang Woon (“Mr. Law”) who has served as an Independent Non-Executive Director for a cumulative term of more than twelve (12) years and recommended him to continue in office as an Independent Non-Executive Director based on the following justifications:-

(a) Mr. Law has fulfilled the definition of an independent director as set out under Paragraph 1.01 of the Bursa Securities Main LR;

(b) Mr. Law has not been involved in any business or other relationship which could hinder the exercise of independent judgement, objectivity or his ability to act in the best interests of the Company;

(c) Mr. Law has no potential conflict of interest, whether business or non-business related with the Company;

(d) Mr. Law has not established or maintained any significant personal or social relationship, whether direct or indirect, with the Managing Director and Executive Directors, major shareholders or management of the Company (including their family members) other than normal engagements and interactions on a professional level consistent with his duties and expected of him to carry out his duties as an Independent Non-Executive Director;

(e) Mr. Law has contributed sufficient time and efforts in his capacity as the designated Senior Independent Non-Executive Director, Chairman of the Nomination Committee, as well as a member of Remuneration Committee and Audit Committee; and

(f) Mr. Law does not derive any remuneration and other benefits apart from Directors’ fees and benefits payable to the Non-Executive Directors which require the approval from the shareholders at the forthcoming Twentieth Annual General Meeting.

(g) Mr. Law continues to maintain his professional accountancy qualifications as Certified Public Accountants, Australia, Chartered Accountant in Singapore, Fellow of Chartered Tax Institute in Malaysia, and Fellow of the Association of Chartered Certified Accountants.

Further information on the Proposed Renewal of Authority for Share Buy-Back and Proposed Renewal of Shareholders’ Mandate are set out in the Statement/Circular to Shareholders of the Company which is despatched together with the Company’s Annual Report 2017.


(continued)



(continued)

Notes:-

1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 16 May 2018 (“General Meeting record of Depositors”) shall be eligible to attend the Meeting.

2. A member entitled to attend and vote at the Meeting is entitled to appoint more than two (2) proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

3. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he or she specifies the proportion of his or her holdings to be represented by each proxy.

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

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. The instrument appointing a proxy must be deposited at the Company’s Registered Office at PLO 464, Jalan Gangsa, Pasir Gudang Industrial Estate, 81700 Pasir Gudang, Johor Darul Takzim not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

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✄

NO. OF SHARES HELD CDS ACCOUNT NO.

(Company No: 455130 - X)(Incorporated in Malaysia)

fOrM Of PrOxY

*I/We, ...........................................................................................................................NRIC/Passport No./Company (FULL NAME IN BLOCK CAPITALS)

No. ......................................................................... of ..............................................................................................

.................................................................................................................................................................................... (FULL ADDRESS)

being a *member/members of WHitE HOrSE BErHaD, hereby appoint ..............................................................

................................................................................... NRIC/Passport No. .............................................................. (FULL NAME IN BLOCK CAPITALS)

of ...............................................................................................................................................................................

.................................................................................................................................................................................... (FULL ADDRESS)

or failing *him/her, ...................................................................................................................................................... (FULL NAME IN BLOCK CAPITALS)

NRIC/Passport No. ................................................ of ..............................................................................................

.................................................................................................................................................................................... (FULL ADDRESS)

or failing *him/her, the Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the Twentieth Annual General Meeting of the Company to be held at PLO 464, Jalan Gangsa, Pasir Gudang Industrial Estate, 81700 Pasir Gudang, Johor Darul Takzim on Wednesday, 23 May 2018 at 2:00 p.m. and at any adjournment thereof for/against the resolution(s) to be proposed thereat.

aGENDa

No. resolutions for against

1. To approve the declaration of the final tax-exempt dividend of 2 sen per share for the financial year ended 31 December 2017.

2. To re-elect Mr. Liao Shen Hua who retires pursuant to Article 94 of the Company’s Articles of Association.

3. To re-elect Mr. Liao Yuan Shun who retires pursuant to Article 94 of the Company’s Articles of Association.

4. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

5. As Special Business Ordinary Resolution No. 1- Payment of Directors’ Fees

6. As Special BusinessOrdinary Resolution No. 2- Payment of Benefits Payable to the Non-Executive Directors pursuant to Section

230(1)(b) of the Companies Act, 2016

7. As Special Business Ordinary Resolution No. 3- Authority to Issue Shares Pursuant to the Companies Act, 2016

No. resolutions for against

8. As Special Business Ordinary Resolution No. 4- Proposed Renewal of Authority for Share Buy-Back

9. As Special Business Ordinary Resolution No. 5- Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party

Transactions of a Revenue or Trading Nature

10. As Special Business Ordinary Resolution No. 6- Approval to Continue in Office as Independent Non-Executive Director - Mr. Law

Piang Woon

* Strike out whichever not applicable

Please indicate your vote by a (/) in the respective box of each resolution. Unless voting instructions are indicated in the space above, the proxy will vote or abstain from voting as he/she thinks fit.

As witness my/our hand(s) this ___________ day of _____________________, 2018

_____________________________________Signature(s)/Common Seal of Member(s)

Notes:-

1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 16 May 2018 (“General Meeting record of Depositors”) shall be eligible to attend the Meeting.

2. A member entitled to attend and vote at the Meeting is entitled to appoint more than two (2) proxies to attend

and vote in his stead. A proxy may but need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

3. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he or she specifies the proportion of his or her holdings to be represented by each proxy.

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

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. The instrument appointing a proxy must be deposited at the Company’s Registered Office at PLO 464, Jalan Gangsa, Pasir Gudang Industrial Estate, 81700 Pasir Gudang, Johor Darul Takzim not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

For appointment of two proxies, percentage of shareholdings to be represented by the proxies

No. of shares Percentage

Proxy 1

Proxy 2

Proxy 3

Total 100%

Ceramic World Showrooms

Kuala LumpurNo. 1, Jalan Persiaran Satu, Bandar Baru Selayang,68100 Batu Caves, Selangor Darul Ehsan, West Malaysia.Tel: 03-6136 1188 Fax: 03-6138 2366 E: [email protected]

Johor BahruLot 26242 (PTD 52712), Jalan Rosmerah 2/18,Taman Johor Jaya, 81100, Johor Bahru,Johor Darul Takzim, West MalaysiaTel: 07- 357 1888 Fax: 07-351 0659E: [email protected]

ButterworthNo.3088, Jalan Kelisa Emas 1, Seberang Jaya,13700 Perai, Pulau Pinang, West MalaysiaTel : 04 -397 7888 Fax : 04 - 397 7999E: [email protected]

Alor Setar 202, Lorong Perak 8, Kawasan Perusahaan Mergong 2,05150 Alor Setar, Kedah Darul Aman, West Malaysia. Tel: 04-732 7226 Fax: 04-732 7282E: [email protected]

KlangLot 2737, Jalan Raja Nong/KS2, Taman Perindustrian Sg. Jati,41200 Klang, Selangor Darul Ehsan, West Malaysia.Tel: 03-5161 3888 Fax: 03-5161 3111E: [email protected]

Concept Gallery

Pulau PinangNo.97, Lorong Kinta, 10400, Penang, West MalaysiaTel : 04-210 9999 Fax : 04-210 9998 E: [email protected]

Other Branches

Batu PahatNo. 102, Jalan Jelawat, Taman Banang, 83000 Batu Pahat,Johor Darul Takzim, West Malaysia.Tel: 07-433 2855/433 3855 Fax: 07-433 4855

Ipoh Plot 76, Persiaran Portland, Kawasan Perindustrian Tasek,31400 Ipoh, Perak Darul Ridzuan, West Malaysia.Tel: 05-291 2288 Fax: 05-291 8822

Kuantan Lot 55, Semambu Industrial Estate, 25350 Kuantan,Pahang Darul Makmur, West Malaysia.Tel: 09-568 5333 Fax: 09-568 5666

Kota BharuNo. 1, Lot PT 4089, Jalan 9/44,Kawasan Perindustrian Pengkalan Chepa 11, 16100 Kota Bharu, Kelantan Darul Naim, West Malaysia.Tel: 09-774 4333 Fax: 09-774 4166

KuchingLot 1035, Jalan Utama, Pending Industrial Estate,93450 Kuching, Sarawak, East Malaysia.Tel: 082-341 577 Fax: 082-341 578

Kota Kinabalu Lot 48A, Jalan Kilang, Sedco Industrian Estate,Kolombong Off Mile 5 ½, Jalan Tuaran, 88450 Kota Kinabalu, Sabah, East Malaysia.Tel: 088-434 008 Fax: 088- 433 171

Overseas Marketing Offices

Singapore WHITE HORSE CERAMIC (S) PTE. LTD.1, Sungei Kadut Way, Singapore 728770Tel: (65) 6269 0555 Fax: (65) 6269 0055 E: [email protected]

PhilippinesWHITE HORSE CERAMIC (PHIL.) INC.,346, Sta. Clara Street, Corner Syquia Street,Sta. Ana Manila, 1009 Philippines.Tel: (632) 268 1928 Fax: (632) 562 0751E: [email protected]

ThailandWHITE HORSE CERAMIC (THAILAND) LTD.34/9 MOO13, Bangna-Trad Km 12 Rd.,Bangleeyai,Bangplee District, Samutprakarn Province 10540 Thailand.Tel: (662)316 3788 Fax: (662) 316 3794/95/96 E: [email protected]

IndonesiaPT. WH CERAMIC INDONESIAKomplek Pergudangan Jembatan Tiga,Blok D/7 A-B Penjaringan,Jakarta Utama, 14440 Indonesia. Tel: (62 21) 6660 5020 Fax: (62 21) 6660 5030E: [email protected]

Komplek Pergudangan Nila Alam, Gudang 1&2,Jalan Raya Waru 1A, Waru Sidoarjo, Jawa Timur, 61256 IndonesiaTel: (62 31) 853 5156 Fax: (62 31) 853 3797

ChinaRoom B-E, 33rd Floor, Developing Building, No. 13 Huayuan East Road,Changcheng District, Foshan City, 52800 Guangdong, China.Tel : (86 757) 8278 5366 Fax : (86 757) 8277 5252E : [email protected]

Vietnam Marketing Network Headquarters

Road 2A, My Xuan A Industrial Zone, Tan Thanh District,Ba Ria - Vung Tau Province, VietnamTel: (84) 254 393 2333 Fax: (84) 254 393 2338 E: [email protected]

Ho Chi Minh Branch270A Ly Thuong Kiet Street, District 10, Ho Chi Minh CityTel: (84) 283 864 9800 Fax: (84) 283 864 9808

Can Tho Branch225 Street 3/2, Hung Loi Ward, Ninh Kieu District, Can Tho CityTel: (84) 292 383 9999 Fax: (84) 292 383 1111

Nha Trang BranchNo.131B, Road 23/10, Phuong Son Ward, Nha Trang City, Khanh Hoa ProvinceTel: (84) 258 382 1085 Fax: (84) 258 382 1086

Da Nang BranchLot 48, Street 4, Da Nang Industrial Park - An Don, Son Tra Dist. Da Nang CityTel: (84) 236 393 1222 Fax: (84) 236 393 1228

Ha Noi Branch683 Nguyen Khoai Street, Thanh Tri Ward, Hoang Mai District, Ha Noi CapitalTel: (84) 243 644 6555 Fax : (84) 243 644 6553

Hai Phong Branch750 Nguyen Van Linh, Le Chan Dist. Hai Phong CityTel: (84) 225 378 4555 Fax: (84) 225 378 4666

Bieh Hoa Branch10 Thong Nhat Ward, Bien Hoa City, Dong Nai Province

ceramic world showrooms - white horse · 2018-04-30 · 93450 kuching, sarawak, east malaysia. tel:...

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