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ANNUAL REPORT 2015 BREWING A SUSTAINABLE FUTURE

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Page 1: GAB Annual Report for Bursa submission.pdf

ANNUAL REPORT 2015

BREWING ASUSTAINABLE FUTURE

Page 2: GAB Annual Report for Bursa submission.pdf

For more information about GAB,please visit www.gab.com.my

REVENUE

OPERATING PROFIT

+8.6%

+9%

+10%

+35%

PROFIT BEFORE TAXATION

OPERATING CASH FLOW

fy15 FACTS AT A GLANCE

DELIVERED COST SAVINGS

RM0.6 MILLIONTHROUGH SUCCESSFULGST TRANSITION

547ACCIDENT-FREE DAYS AS OF 30 JUNE 2015

PUTRABRANDICON

Exceeded target in

REDUCING

ELECTRICITY

THERMAL ENERGY

WATER

CONSUMPTION

HEINEKEN WON THE

20156

engaged in the

SUNGEI WAY W.A.T.E.RPROJECT

NEW COMMUNITIES

to RM292 millionto RM1.75 billion

to RM348 millionto RM295 million

Page 3: GAB Annual Report for Bursa submission.pdf

CONTENTSSTATEMENT on CORPORATE GOVERNANCE pg.57

AUDIT COMMITTEE REPORT pg.69

STATeMENT ON RISK MANAGEMENT & INTERNAL CONTROL pg.73

FINANCIAL STATEMENTS pg.77

PROPERTIES OWNED BY THE GROUP pg.125

OTHER INFORMATION pg.126

ANALYSIS OF STOCKHOLDINGS pg.127

NOTICE OF AGM pg.130

FORM OF PROXY

GROUP DIRECTORY

pg.10

pg.14Vision, Mission & Values pg.2

Management Discussion and Analysis pg.5

Financial Highlights pg.6

Analysis of Group Revenue pg.7

Corporate information pg.8

Chairman Says… pg.10

Managing Director Says… pg.14

DIRECTORS’ PROFILE pg.18

MANAGEMENT TEAM pg.22

MANAGEMENT TEAM PROFILE pg.24

GROWING BRANDS pg.28

OPERATIONAL REVIEW pg.4747 Financial Highlights50 Supply Chain Highlights52 Commercial Highlights53 IT Highlights54 Corporate Responsibility Highlights56 Human Resources Highlights

Page 4: GAB Annual Report for Bursa submission.pdf

Listed on the Main Market of Bursa

Malaysia, GAB’s principal shareholder

is GAPL Pte Ltd based in Singapore.

GAPL Pte Ltd is wholly owned

by Heineken N.V.gab

who

we a

re to

day

Page 5: GAB Annual Report for Bursa submission.pdf

vision To be Malaysia’s most celebrated drinks company

mission brewing great moments with great drinks

our values • Deliver Excellence

• Enjoy and Celebrate • Win with Integrity • Learn and Grow • Collaborate with Respect

Page 6: GAB Annual Report for Bursa submission.pdf
Page 7: GAB Annual Report for Bursa submission.pdf

OverviewThe Group achieved a profit before tax (PBT) of RM292 million for the financial year ended 30 June 2015, a 10% increase from the previous year (PBT: RM266 million). The good performance is attributed to:

• Continuous investment in core brands with optimised commercial effectiveness and focus on activation to drive consumption.• Innovation to meet changing consumer needs to extend our beer core with exciting new products and create adjacent beer categories.• Strategic outlet partnership to drive consumption through improved brand visibility and promotion, supported by more efficient route to

market and uplifting of distributors’ capabilities.• Good GST preparedness resulted in minimised consumer impact and maximised value to the business and trade partners supported by

seamless business process change across customer value chain.• Stepped up engagement with Government and Customs which led to greater enforcement effort on contraband beers.

Revenue and Gross MarginThe Group recorded a revenue of RM1.75 billion for the year under review, 8.6% higher than the previous year. The increase was driven by strong sales performance with effective commercial investment, efficient route to market and strategic channel focus with the combination of a robust pricing strategy that offers the right value to consumers. The Group’s gross margin increased by 7.3% to RM621 million mainly driven by business growth. The cost efficiency measures made by the Group were able to partially off-set the impact of increased in volume, adverse foreign exchange and cost increase due to inflation.

ExpensesTotal operating expenses* for the year increased by 5.9% (RM18.5 million) versus previous year to RM330 million. The year-on-year increase was mainly driven by business growth. Net finance costs reduced by 39% (RM1.9 million) compared to previous year as significant cash opportunities were unlocked through efficient working capital management especially on trade debtors.

* Operating expenses include expenses on distribution, marketing, sales and administration.

ProfitThe Group posted a profit after tax of RM214 million, an 8% increase compared to RM198 million in the previous year. The profit growth was in tandem with the revenue growth.

Total Assets and LiabilitiesThe Group ended the financial year with total assets of RM693 million, a marginal reduction by 1% compared to previous year of RM702 million due to the decrease in trade debtors. Total liabilities decreased by 8% from RM344 million in the previous year to RM317 million for the year under review due to the reduction in borrowings.

Cash flowOperating cash flow increased by 35% to RM348 million for the year. The increase is attributable to the increase in profit growth and by unlocking significant opportunities on efficient working capital management especially with trade debtors.

Tax paid for the year increased by RM11 million to RM85 million compared to the previous year due to higher taxable profit and lower capital allowance. There was a tax refund of RM22 million for reinvestment allowance from prior years.

Investment in capital expenditure remained broadly the same level as the previous year at RM38 million.

The year ended with cash equivalents of RM52 million as compared to RM62 million in the previous year due to efficient utilisation of cash balance as reflected in the decrease in net borrowings of RM75 million versus last year.

MANAGEMENT DISCUSSION AND ANALYSIS

GUINNESS ANCHOR

BERHAD

pg.5

Page 8: GAB Annual Report for Bursa submission.pdf

FINANCIALHIGHLIGHTS KEY FIGURES

FOR FINANCIALYEAR ENDED 30 JUNE

Key Operating Results (RM’ 000)2011 2012 2013 2014 2015

Revenue 1,488,720 1,623,687 1,676,348 1,610,587 1,748,885

PBIT 240,598 277,241 292,746 270,609 295,361

Tax expense (61,505) (69,582) (71,132) (67,581) (78,206)

Profit after tax 181,378 207,399 217,604 198,206 214,193

Net cash from operating activities 195,345 180,272 225,608 236,225 295,017

Other Key Data (RM’ 000)2011 2012 2013 2014 2015

Total assets 685,138 779,418 738,984 701,670 692,653

Total liabilities (168,522) (399,715) (373,444) (344,861) (316,505)

Reserves 365,567 228,654 214,491 205,760 225,099

Total equity 516,616 379,703 365,540 356,809 376,148

Capital expenditures 33,392 60,115 45,555 39,280 38,429

Financial Ratios (%)2011 2012 2013 2014 2015

Operating working capital % of revenue 8.9 11.7 11.4 13.0 8.7

EBITDA margin 18.7 19.2 19.9 19.4 19.3

Return on equity 46.6 73.0 80.1 75.8 78.5

Share Information2011 2012 2013 2014 2015

Earnings per 50 sen stock unit (sen) 60.0 68.7 72.0 65.6 70.9

Net dividend per 50 sen stock unit (sen) 54.0 125.0* 68.5 64.5 71.0

Dividend yield (%) 5.3 9.4* 3.6 4.9 5.0

Net assets per 50 sen stock unit (sen) 171.0 126.0 121.0 118.0 125.0

Market capitalisation (RM’ billion) 3.1 4.0 5.8 4.0 4.3

* Includes special dividend.

EBITDA : Earnings before interest, tax, depreciation and amortisationPBIT : Profit before interest and tax

GUINNESS ANCHOR

BERHAD

pg.6

Page 9: GAB Annual Report for Bursa submission.pdf

FOR FINANCIALYEAR ENDED 30 JUNE 2015

ANALYSIS OF GROUP REVENUE

48%EXCISE, CUSTOM DUTIES& SALES TAX6%

STAFF COSTS

12%PROFIT AFTERTAXATION

18%DISTRIBUTION, SALES& ADMINISTRATION COSTS

9%RAW MATERIALS& PACKAGING COSTS

5%TAXATION2%

DEPRECIATION & AMORTISATION

GUINNESS ANCHOR

BERHAD

pg.7

Page 10: GAB Annual Report for Bursa submission.pdf

CORPORATE INFORMATION

REGISTERED OFFICESungei Way BreweryLot 1135, Batu 9, Jalan Klang LamaP O Box 144, 46710 Petaling JayaSelangor, Malaysia

Tel: 603-78614688Fax: 603-78614602Email: [email protected]

DIRECTORSDATUK SERI SAW CHOO BOON (CHAIRMAN)HANS ESSAADI (MANAGING DIRECTOR)MARTIN GILES MANENDATIN NGIAM PICK NGOH, LINDACHOO TAY SIAN, KENNETHYONG WENG HONGFRANS ERIK EUSMAN

WEBSITEwww.gab.com.my

The Company’s Annual Report 2015 is available on the Company’s website at www.gab.com.my and also on Bursa Malaysia’s website at www.bursamalaysia.com

SECRETARYNg Sow Hoong(MAICSA 7027552)

AUDITORSKPMGChartered AccountantsLevel 10, KPMG Tower8 First Avenue, Bandar Utama47800 Petaling JayaSelangor, Malaysia

Tel: 603-77213388Fax: 603-77213399

SHARE REGISTRARTricor Investor Services Sdn BhdUnit 32-01, Level 32, Tower A Vertical Business SuiteAvenue 3, Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala Lumpur, Malaysia

Tel: 603-27839299Fax: 603-27839222

PRINCIPAL BANKERSStandard Chartered Bank Malaysia BerhadHSBC Bank Malaysia Berhad

STOCK EXCHANGE LISTINGListed on the Main Market of Bursa MalaysiaStock short name: GABStock number: 3255

GUINNESS ANCHOR

BERHAD

pg.8

Page 11: GAB Annual Report for Bursa submission.pdf

BREWING GREAT

MOMENTS

Page 12: GAB Annual Report for Bursa submission.pdf

CHAIRMANSAYS...

We continued to strengthen the fundamental component of our

business - our brands. Investment into brand building and focus on innovation

were enhanced to meet changing consumer needs.

DATUK SERI SAW CHOO BOONChairman

pg.10

GUINNESS ANCHOR

BERHAD

Page 13: GAB Annual Report for Bursa submission.pdf

Dear shareholders,I am pleased to present Guinness Anchor Berhad’s (GAB) results for the Financial Year 2015 (FY15), which reflects a turnaround from the previous year as a result of various initiatives taken and executed by the Management and employees of the Company.

Revenue grew by 8.6% to RM1.75 billion in FY15 from RM1.61 billion in the previous financial year, while profit before tax increased by 10% to RM292 million. Net profit was RM214 million, up by 8% from the previous year while earnings per share increased to 70.9 sen, up from 65.6 sen.

In consideration of the favourable results, the Board has proposed a single tier final dividend of 51 sen per stock unit to be paid on 31 December 2015, which will be tabled for shareholders’ approval at the coming 51st Annual General Meeting. This is in addition to the single tier interim dividend of 20 sen per 50 sen stock unit which was paid on 22 April 2015.

In FY15, GAB operated in an environment which saw low consumer sentiment, post Goods and Services Tax inflationary pressure and unfair competition from contraband beers.

Strengthening fundamentals, maintaining focus

In FY15, GAB operated in an environment which saw low consumer sentiment, post Goods and Services Tax (GST) inflationary pressure and unfair competition from contraband beers. In light of these challenges, we remained focused and implemented several initiatives which have contributed to our FY15 performance.

We approached the implementation of GST by putting in place a holistic commercial process and system change, which enabled us to ensure compliance with accounting and tax laws without any business disruption. We engaged our distributors, outlet owners and trade associations regularly and provided them relevant training and support. As a result, GAB saw a smooth transition into the GST environment for all our stakeholders from 1 April 2015.

We also continued to strengthen the fundamental component of our business - our brands. Investment into brand building and focus on innovation were enhanced to meet changing consumer needs – resulting in the launch of GAB’s first super premium beer, Affligem and three new variants of Strongbow cider brand (Strongbow Gold, Strongbow Honey and Strongbow Elderflower). These new brands will help optimise opportunities for GAB by meeting changing consumer preferences.

Throughout FY15, GAB continued to engage with the Royal Malaysian Customs (RMC) and other enforcement agencies to eradicate contraband beers, which pose an unfair competition to our business as they are priced significantly lower compared to duty-paid beers. With the strong enforcement actions by RMC, we saw a significant increase in raids and volume of confiscated illicit products which in turn made a positive impact on the duty-paid market.

CHAIRMAN SAYS... GUINNESS ANCHOR

BERHAD

pg.11

Page 14: GAB Annual Report for Bursa submission.pdf

Ensuring sustainability

While we expanded our efforts on driving our financial performance, we also continued to support a sustainable environment, both for our business as well as the community in which we operate.

We continued to actively champion the principle of responsible drinking, with our Drink Sensibly (DS) campaign, which we initiated in 2010. Through concerted efforts in all GAB internal and marketing events, the campaign reminds consumers to enjoy their drinks in a

CHAIRMAN SAYS...

sensible and responsible manner. Our DS social media campaign which was carried out during Christmas last year, has reached out to almost 4 million people. The campaign was shortlisted for the Ethical Corporation's Responsible Business Awards 2015 – Best Consumer Engagement campaign.

In FY15, GAB also stepped up a notch and activated the Enjoy Responsibly Day in Malaysia as part of the Heineken global initiative. In total, 46 markets activated the Enjoy Responsibly Day reaching out to over 40,000 Heineken employees in participating operations. I am pleased that GAB was able to be a part of this first ever worldwide event, aimed at engaging and educating employees about the impact of alcohol abuse and to work together to make moderation the social norm, as responsible drinking is key to our sustainable future.

Our Corporate Responsibility effort continues to grow year-on-year through the GAB Foundation. Our W.A.T.E.R (Working Actively Through Education & Rehabilitation) Project is now into its 8th year. It has expanded into two river projects - Sungei Way in Selangor and Sungai Kinta in Perak, built three river education centres and conducted year-round outreach programmes with the local communities, schools and businesses, in collaboration with the relevant partners and authorities.

In this financial year, the Sungei Way W.A.T.E.R Project introduced its first Business Community Training Programme. In total, 20 business operators along the river were engaged, which we see as an important step in bringing corporate entities into crucial water conservation efforts.

In Perak, the Sungai Kinta W.A.T.E.R Project organised its first ever River Carnival where we shared learnings on the importance of water conservation with more than 2,000 people. Continuing our streak of many firsts, we also launched the first River Care Education Centre in June 2015, in conjunction with the World Environment Day. This one stop learning centre was set up to signify the appreciation of the efforts put in by local communities of Sungai Kinta in the maintenance of its three tributaries namely Sungai Senam, Sungai Buntong and Sungai Kledang.

While we expanded our efforts on driving our financial performance, we also continued to support a sustainable environment, both for our business as well as the community in which we operate.

On the Education front, our English Enrichment Training Programme (EETP) is now into its 4th year, and in FY15, we expanded the programme to the 7th state, Johor, joining Kedah, Melaka, Negeri Sembilan, Perak, Sabah and Sarawak. Our programme which aims to enhance teachers creative teaching and classroom management skills has reached out to approximately 40 schools every year, trained 270 teachers which in turn benefitted more than 4,900 students since 2012.

I regret to inform you that on 3 September 2015, GAB received bills from RMC demanding payment of additional excise duties and sales tax claims amounting to RM56.3 million. These bills are based on the new valuation method of goods for determining excise duty and sales tax that was imposed on 1 November 2013. With this method, advertising and promotional costs incurred by our subsidiary marketing company, Guinness Anchor Marketing Sdn Bhd, were included in determining the manufacturer’s cost. The Board and the Management Team believe that all excise duties and sales tax for the periods in question have been paid based on valuations previously assessed and approved by RMC. We are confident of our position in defending these claims. Please be rest assured that we will exhaust all avenues to affirm our view and seek an amicable resolution with RMC on this matter.

GUINNESS ANCHOR

BERHAD

pg.12

Page 15: GAB Annual Report for Bursa submission.pdf

I am proud to say that the strategies and enhancements in our business that we made in the past year have brought positive results for us in FY15.

Heineken N.V. acquisition of GAPL

On 7 October 2015, Heineken N.V. acquired the entire interest of Diageo in GAPL Pte Ltd (GAPL), a major shareholder of GAB. Heineken N.V. now owns 100% of GAPL which in turn holds 51% interest in GAB. Pursuant to this transaction, GAB will continue to benefit from access to both Heineken’s and Diageo’s international brand portfolios. Heineken has indicated that it intends to remain GAB’s long-term majority shareholder.

With this acquisition, Ms Apurvi Haridas Sheth @ Apurvi Sheth Murpuri and Mr Alvaro Andres Cardenas Munoz have both stepped down from the GAB Board effective 7 October 2015. They have been replaced by Mr Frans Erik Eusman who was appointed on 9 October 2015.

I would like to thank Apurvi and Alvaro for their invaluable contributions during their tenure with GAB.

CHAIRMAN SAYS...

Positioned for the next 50 years

I am proud to say that the strategies and enhancements in our business that we made in the past year have brought positive results for us in FY15. We are confident that the measures taken have placed GAB in a better position to address and manage the issues and variables in our business.

The outlook for FY16 remains challenging, as the market and the operating environment is driven by various domestic as well as global uncertainties and sensitive consumer sentiment. Therefore, it is crucial that we continue to build on the measures that we have put in place, and ensure we remain able and capable of overcoming the challenges that we foresee for the business in the future.

I would like to thank my fellow Board members, the Management Team and employees of GAB Group for their dedication and commitment in the past year to positively turn around our performance. I would also like to thank our shareholders, business partners, customers and consumers for your continued confidence and support towards GAB.

In FY16, GAB will celebrate its 50th anniversary in Malaysia. I look forward to marking this significant milestone in the history of GAB with all of you.

DATUK SERI SAW CHOO BOONCHAIRMAN20 October 2015

Changes in the Board

The Company welcomed a new addition to the GAB Board, Mr Yong Weng Hong on 18 August 2015. Weng Hong has extensive experience in finance and I look forward to his contributions.

The Board bade farewell to Mr Michiel Egeler, who had retired from his position as Regional Director of Heineken Asia Pacific, and concurrently therefore, resigned as a Director of GAB on 18 August 2015. I would like to thank Michiel for his valuable contributions to GAB in the past three years.

I would also like to take this opportunity to pay a tribute to the late Dato’ Syed Salleh Syed Othman who passed away on 15 August 2015. Dato’ was an active and valuable member of our Board, as well as the Nomination and Remuneration Committee of which he was Chairman. On behalf of GAB and the Board, I would like to record our deepest condolences to the family of the late Dato’ Syed Salleh.

GUINNESS ANCHOR

BERHAD

pg.13

Page 16: GAB Annual Report for Bursa submission.pdf

MANAGING DIRECTORSAYS...

HANS ESSAADIManaging Director

In Financial Year 2015 (FY15), GAB delivered great performance. Our revenue

grew by 8.6% and profit before tax increased by 10%. We have also

managed to successfully unlock significant cash opportunities and were

able to deliver an increase of 35% in operating

cash flow.

This healthy growth was adirect result of an effective strategy,

holistic goods and services taximplementation, our focus on

innovation and increasedcommercial investments.

GUINNESS ANCHOR

BERHAD

pg.14pg.14

GUINNESS ANCHOR

BERHAD

Page 17: GAB Annual Report for Bursa submission.pdf

MANAGING DIRECTOR SAYS...

Our success drivers

In FY15, we focused on delivering the five key strategies we had determined:

Strong portfolio of brands

The Company continued to strengthen its leadership position with its core brands. Tiger introduced an exciting new consumer campaign – Tiger Uncage while Heineken revealed a series of limited edition Heineken Star bottles through The Cities of the World campaign. Guinness attracted new drinkers through our efforts to reinvigorate the iconic brand and Anchor optimised its value beer opportunities and grew significantly in the refreshment channels.

CONTINUED INVESTMENTBEHIND OUR CORE BRANDS – TIGER, GUINNESS, HEINEKEN AND ANCHOR

EXCELLENT OUTLET EXECUTION IN ALL CHANNELS

CONTINUED ENHANCEMENT OF OUR PROCESSES AND SYSTEMS TO ACHIEVE OPERATIONAL EFFECTIVENESS

CONTINUED SUPPORT FOR THE GOVERNMENT’S FIGHT AGAINST CONTRABAND BEERS

INCREASED INVESTMENT INTO INNOVATION TO ADDRESS CHANGING CONSUMER PREFERENCES

Putra Brand Icon

Our investments have certainly paid off. I am thrilled to say that Heineken was awarded the Putra Brand Icon after winning its fourth consecutive Gold Award. Only six brands out of hundreds received this recognition. Tiger also won a Silver Award at the 2015 Putra Brand Awards. These awards are a testament to our brands as they are measured by consumer preferences in Malaysia.

Brewing success with innovation

On the innovation front, Tiger Radler’s doubly refreshing offering, introduced in FY14, gained increasing traction in the market and garnered positive sales in its first full financial year. In FY15, we introduced three new Strongbow variants – Gold, Honey and Elderflower, and GAB’s first super premium brand, Affligem. The launch of these new brands has helped the Company maximised its opportunities to meet consumers’ preferences, provide new and exciting consumer experiences and increase consumption at participating outlets.

Combating contraband

Malaysia and our business continue to face the issue of cheaply priced illegally imported beers. In FY15, the Royal Malaysian Customs (RMC) stepped up their enforcement initiatives and conducted numerous raids on illegal importers and retailers. GAB appreciates the efforts by RMC as the reduced presence of contraband beers has been instrumental in helping with our growth. However, we foresee that consumers will continue to opt for these cheaper alternatives as general consumer sentiments and spending continues to be low. We urge distributors, retailers and consumers to support the efforts of RMC to fight the sale of contraband beers in Malaysia as these illicit products are depriving the nation of significant tax revenue and pose potential health risks.

GUINNESS ANCHOR

BERHAD

pg.15

Page 18: GAB Annual Report for Bursa submission.pdf

Successful GST transition

A key element of our positive performance for FY15 was the seamless transition into the GST environment for us and our business partners. We instituted business process changes which delivered cost savings and a 70% reduction in administrative processes for GAB and our distributors.

We expended significant efforts to upgrade our IT system accurately and smoothly, including holding workshops to assist our distributors with accounting systems, preparation and distribution of GST-related information packs, and responding to 500 queries through our Helpdesk. More than 1,000 people – vendors, trade associations, outlet operators and staff – were reached to ensure they were fully ready for the GST implementation.

To address post-GST inflationary pressures, we executed our FY15 pricing strategy in order to minimise impact on consumers while at the same time, maximising value to business and trade partners.

The holistic implementation of the GST project for GAB and our distributors was made possible because of the diversed talents we have within the project team and how they functioned as one single unit. The project was such an excellent case study that the National Award for Management Accounting (NAfMA) presented our Finance Director, Atul Chhaparwal with the ‘CFO of the Year’ 2015 Award. On behalf of the GAB Board and Management, we appreciate and value the high degree of professionalism, conscientiousness and commitment demonstrated by the GST project team.

Openness, governance and integrity

The strategies that we had planned and executed in FY15 were not merely to attain success for a single financial year. Our goal in all the measures we have taken is to ensure GAB’s growth trajectory is sustainable and viable.

In attaining our corporate targets, we are committed to living by a set of key values that will drive the way we do things in GAB: to deliver excellence, collaborate with

In attaining our corporate targets, we are committed to living by a set of key values that will drive the way we do things in GAB: to deliver excellence, collaborate with respect, learn and grow, win with integrity and finally, to enjoy our efforts and celebrate our successes.

respect, learn and grow, win with integrity and finally, to enjoy our efforts and celebrate our successes.

Our culture of openness, strong governance and integrity continued to be enhanced in FY15 with a revamp of our Code of Conduct and a new reporting channel, Speak Up. The channel provides employees with a platform to voice non-compliance issues confidentially.

Optimising efficiencies and streamlining processes

Fundamental to our culture is the belief that every employee has a role to play in the success of GAB, and this ultimately means that each and every one of us has ownership and accountability for the results of all plans and activities we need to deliver. Our planned and deliberate minimisation and optimisation of resource consumption - electricity, thermal energy, water in our brewery process continued in FY15 as part of our sustainability framework.

Safety, as always, remained a top priority in our operations, and to date, GAB has achieved 547 consecutive accident-free days as at 30 June 2015. The Total Productive Management (TPM) methodology that we have set in place has enabled us to further enhance systems and processes, improve efficiency, drive workforce performance and help cultivate a zero-loss mindset. I would like to take the opportunity to thank Bernard Eloy, the former Supply Chain Director for embedding the TPM practice within the team and his contributions to GAB for the past five years. We welcomed William Mathers, who replaced Bernard, to the GAB family in April 2015.

We also welcomed Chow Yi Lin who rejoined GAB on 1 December 2014 as IT Director. She is heading the implementation of the 12-month business transformation initiative, Project Breakout. Yi Lin was formerly the Regional Service Delivery Manager at Diageo Singapore and prior to that, she had served in GAB for 15 years. Before her move to Singapore, she was the Head of Information Services and Technology. With her extensive experience in IT Management and Solutions, I am confident that she will uplift and further enhance our IT systems.

MANAGING DIRECTOR SAYS... GUINNESS ANCHOR

BERHAD

pg.16

Page 19: GAB Annual Report for Bursa submission.pdf

Heineken N.V.’s acquisition of GAPL

On 7 October 2015, Heineken N.V. acquired Diageo’s shares in GAPL Pte Ltd (GAPL). Heineken N.V. now owns 100% of GAPL, which in turn holds 51% interest in GAB. This transaction will not affect GAB’s portfolio of brands as the current license agreements for the Diageo brands will continue. Heineken N.V., with its wide portfolio of brands and established operational systems and structure will bring about a positive impact to GAB.

Thank you

The outlook for FY16 continues to be driven by uncertainties, both locally and globally. We will remain vigilant to the developments in the market, and will continue to build on the strong strategy and fundamentals that have contributed to our positive performance in FY15.

We expect to continue to create winning partnerships with distributors, engage with authorities on contraband beers, execute innovation brilliantly, improve the contract management process, optimise IT solutions, and overall, drive cost efficiencies across our entire business. I want to thank all my colleagues for their professionalism, commitment and passion over the past year. It is a privilege to work with such a dynamic team and to lead this great Company. I would also like to thank every one of our consumers who make the choice to enjoy our brands and our business partners and shareholders for their unwavering support, without which our achievements would not have been possible.

HANS ESSAADIMANAGING DIRECTOR20 October 2015

Playing our part in the community

Our Drink Sensibly (DS) initiative continued to make head way in leading the responsible drinking agenda. During the year-end festive season, we produced a series of animated webisodes to drive home the message of sensible drinking. The campaign generated a total of 3.8 million impressions, and was shortlisted by the Ethical Corporation, UK for “Best Consumer Engagement” campaign.

In terms of corporate responsibility, we continued to build on the activities of the GAB Foundation, in particular expanding the W.A.T.E.R (Working Actively Through Education and Rehabilitation) Project, introducing the English Enrichment Training Programme to Johor and organising the Business Community Training Programme to encourage more businesses to be involved in water conservation activities.

Celebrating 50 years in Malaysia

In 2016, we will celebrate 50 years of GAB’s presence in Malaysia. In 1964, we began as Guinness Malaysia Limited, and on 15 November 1989, the Company changed its name to Guinness Anchor Berhad following the merger with Malayan Breweries (Malaya) Sdn Bhd. Since then, we have grown our portfolio several times over, and today, we are the leading brewery in Malaysia with brands that are loved and enjoyed by consumers all across the country. As part of this celebration, we launched three limited edition Guinness Foreign Extra Stout bottle and can designs which are inspired by Malaysia’s rich history, culture and its people. I wish to take this opportunity to thank all GAB stakeholders – our shareholders, employees and business partners – for their continuous support and ask that you celebrate this major milestone with us.

MANAGING DIRECTOR SAYS... GUINNESS ANCHOR

BERHAD

pg.17

Page 20: GAB Annual Report for Bursa submission.pdf

DIRECTORS’ PROFILE

Datuk Seri Saw Choo Boon, Malaysian, aged 69, was appointed to the Board on 21 May 2012 and was elected Chairman of the Board on 22 November 2012.

Datuk Seri Saw joined Shell in 1970 as a Refinery Technologist in Shell Refining Company (Federation of Malaya) Bhd (Shell Malaysia). He then served in various capacities in manufacturing, supply, trading and planning in Malaysia, Singapore and the Netherlands. In 1996, Datuk Seri Saw was appointed Managing Director of Shell MDS (Malaysia) Sdn Bhd and from 1998 to 1999, he assumed the positions of Managing Director for Oil Products (Downstream) and Managing Director of Shell Malaysia. In 1999, with the globalisation of Shell Oil Products business, he was appointed the Vice-President of the Commercial business in the Asia-Pacific region. In 2005, he managed Shell’s global marine products business. On 18 May 2006, he became the Chairman of Shell Malaysia until his retirement on 30 June 2010, after 40 years of continuous service.

Presently, Datuk Seri Saw is an Independent Director of three other listed companies namely Shell Malaysia, RHB Capital Bhd and Digi.Com Bhd. He is also an Independent Director of RHB Investment Bank Berhad.

In addition, Datuk Seri Saw is a member of the Government’s Special Economic Committee, the co-Chairman of the Government’s Public-Private Sector Special Task Force on Facilitating Business (PEMUDAH), President of Federation of Malaysian Manufacturers (FMM) Council, a Director of the Socio-Economic Research Centre (SERC) Board of the Associated Chinese Chambers of Commerce and Industry Malaysia.

DATUK SERI SAW CHOO BOONBACHELOR OF SCIENCE (HONS) (CHEMISTRY)(UNIVERSITY OF MALAYA)

Independent Non-Executive Director, Chairman of the Board of Directors

GUINNESS ANCHOR

BERHAD

pg.18

Page 21: GAB Annual Report for Bursa submission.pdf

Martin Giles Manen, Malaysian, aged 60, was appointed to the Board on 29 August 2008.

Martin served more than 21 years with Sime Darby Group, holding various senior positions including Group Tax Controller, Group Company Secretary, Group Finance Director and Divisional Director of the Allied Products & Services Division. After leaving the Sime Darby Group in 2007, he served as Chief Executive Officer of a public relations and communications consultancy until May 2009. Martin started his career at KPMG with whom he served 11 years in Malaysia and the United Kingdom, undertaking audit, tax and business advisory assignments.

Martin has served as a member of the Malaysian Accounting Standards Board and the Executive Committee of the International Fiscal Association (Malaysia Branch). Martin also serves on the Board of Hong Leong Investment Bank Berhad and Unisem (M) Berhad.

Hans Essaadi, a Dutch national, aged 49, joined GAB on 4 January 2013 and was appointed as Managing Director of GAB on 1 March 2013.

Hans started his career in 1991 as a Sales Representative with Heineken Netherlands and in 1995, he moved to Heineken Germany as Sales Manager. He returned to Heineken Netherlands in 1997, first serving as Heineken Export Manager with the Heineken Export Group and then as Senior Brand Manager with Vrumona, a major Dutch soft drinks manufacturer and a wholly owned subsidiary of Heineken until the end of 2002. In early 2003, Hans was appointed Country Manager of Heineken Puerto Rico, a key market for the Heineken Group as the No.10 Heineken beer market in the world. By the end of 2005, he was appointed General Manager of Brau Union International based in Vienna, Austria, part of Heineken Region – Central and Eastern Europe.

Subsequently, in 2008, Hans was appointed General Manager of Sirocco, a joint venture between Heineken and Emirates in Heineken Region – Africa and Middle East, his most recent role prior to joining GAB. In this role, he oversaw several key markets in the Gulf Region and managed a portfolio of brands from various principals including Heineken International, AB InBev, Molson Coors and Asia Pacific Breweries.

Hans currently serves as a Governing Council Member of the Confederation of Malaysian Brewers Berhad.

DIRECTORS’ PROFILE

MARTIN GILESMANEN

CHARTERED ACCOUNTANT

MEMBER OF THE MALAYSIAN INSTITUTE OF ACCOUNTANTS AND THE MALAYSIAN INSTITUTE OF CERTIFIED PUBLIC

ACCOUNTANTS

Senior IndependentNon-Executive Director

HANSESSAADI

BACHELOR’S DEGREE, MAJOR IN FINANCE

(HOTELSCHOOL THE HAGUE)

Managing Director

GUINNESS ANCHOR

BERHAD

pg.19

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DIRECTORS’ PROFILE

Choo Tay Sian, Kenneth, Singaporean, aged 48, was appointed to the Board on 15 August 2013.

Kenneth Choo is the Managing Director of Heineken Asia Pacific Pte Ltd (HAP), a company based in Singapore. He is responsible for the growth and development of its operating companies within the Asia Pacific region. He joined HAP in 2003 and has held senior positions in Finance and Business Development within HAP. He played a key leadership role during Heineken’s acquisition of Asia Pacific Breweries Limited (APB) and following that, the successful integration of APB.

From 2013 to 2014, Kenneth led the Finance function across Asia Pacific as Senior Director Regional Finance, overseeing planning and control, strategy development, accounting and reporting, tax and treasury as well as people and competency development. He took on the Regional Director role in 2014, leading the operating companies in Singapore, Indochina and exports cluster at HAP.

Before joining Heineken, Kenneth was the Regional Business Development Director of global retailer, Royal Ahold NV.

Datin Ngiam Pick Ngoh, Linda, Malaysian, aged 60, was appointed to the Board on 3 December 2012.

Datin Ngiam was the Group Managing Director / Chief Executive Officer of Star Publications (M) Bhd (now known as Star Media Group Berhad) from 1 July 2008 to 30 June 2011. She was first employed in The Star as Advertising Sales Promotions Manager in 1985 before serving as General Manager, Advertising and Business Development in 1995. In 2004, she was appointed as Deputy Group General Manager and in 2007 she was promoted to Executive Director / Group Chief Operating Officer before assuming the office as Group Managing Director / Chief Executive Officer in 2008, a position she held till her retirement in 2011.

She was a Board Member of the Audit Bureau of Circulations (ABC) Malaysia and Chairperson of the ABC Content & Communications Committee. She represented The Star on the Malaysian Newspapers Publishers Association (MNPA) as its Honorary Secretary and was a Board Member of the Advertising Standards Authority (ASA) Malaysia.

Currently, Datin Ngiam sits on the Board of Star Media Group Berhad (formerly known as Star Publications (Malaysia) Bhd), MUI Properties Bhd and Hong Leong Assurance Bhd. She also serves as a Trustee of Yayasan Sin Chew.

DATIN NGIAM PICK NGOH, LINDA

BACHELOR OF ARTS (HONS) IN SOCIAL SCIENCES (UNIVERSITY OF MALAYA)

DIPLOMA IN ADVERTISING AND MARKETING (INSTITUTE OF COMMUNICATIONS, ADVERTISING AND MARKETING (CAM) OF

UNITED KINGDOM)

Independent Non-Executive Director

CHOO TAY SIAN,KENNETH

BACHELOR OF ACCOUNTANCY DEGREE (HONS) (NANYANG TECHNOLOGICAL UNIVERSITY,

SINGAPORE)

ADVANCED MANAGEMENT PROGRAM (HARVARD BUSINESS SCHOOL)

CHARTERED ACCOUNTANT - SINGAPORE

Non-Independent Non-Executive Director

GUINNESS ANCHOR

BERHAD

pg.20

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Yong Weng Hong, Singaporean, aged 47, was appointed to the Board on 18 August 2015.

Weng Hong is the Business Control Director at Heineken Asia Pacific Pte Ltd. He has over 23 years of experience in Finance across Singapore listed companies, government agencies and multinational companies. Weng Hong first joined Asia Pacific Breweries Limited (APB) (now known as Heineken Asia Pacific Pte Ltd) in 2001 as a Project Manager. He was promoted several times over the years and eventually to General Manager, Group Finance in 2007. He played instrumental roles in overseeing accounting and reporting, financial planning and analysis, strategic planning, M&A deals, post-acquisition integration, people development and investor relationships.

After the acquisition of APB by Heineken, he led the integration of the Finance function in the Asia Pacific region. In his current role, he acts as an active business partner to the operating companies and various functions in supporting business decisions, driving business performance and developing people capabilities in the region.

Frans Erik Eusman, a Dutch national, aged 53, was appointed to the Board on 9 October 2015.

Frans joined Heineken in 1987. He has worked in various finance and general management positions in Europe and Asia, which included his role as Corporate Control & Accounting Director from 2003 to 2005. From 2005 to 2010, he was President of Heineken, France. From 2010 until 2015, he was Chief Business Service Officer and member of the Executive Committee of Heineken. In July 2015, he was appointed President of Heineken Asia Pacific.

DIRECTORS’ PROFILE

YONGWENG HONG

BACHELOR IN ACCOUNTANCY (NANYANG TECHNOLOGICAL UNIVERSITY,

SINGAPORE)

Non-IndependentNon-Executive Director

FRANS ERIK EUSMAN

MASTER OF BUSINESS ADMINISTRATION (VU UNIVERSITY AMSTERDAM, THE NETHERLANDS)

Non-IndependentNon-Executive Director

GUINNESS ANCHOR

BERHAD

pg.21

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WILLIAM MATHERSSUPPLY CHAIN DIRECTOR THUM

CHEE YUENSALES DIRECTOR

RENUKA INDRARAJAHCORPORATE RELATIONS & LEGAL DIRECTOR

LIM KWAN-SEKHUMAN RESOURCES DIRECTOR

MANAGEMENT TEAM

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HANS ESSAADIMANAGING DIRECTOR

BRUCE DALLASMARKETING DIRECTOR

ATUL CHHAPARWALFINANCE DIRECTOR

CHOW YI LINIT DIRECTOR

Page 26: GAB Annual Report for Bursa submission.pdf

MANAGEMENTTEAM PROFILE

HANS ESSAADI

MANAGING DIRECTOR

ATUL CHHAPARWAL

FINANCE DIRECTOR

THUM CHEE YUEN

SALES DIRECTOR

Bachelor’s Degree, Major in Finance (Hotelschool the Hague)

Hans Essaadi, a Dutch national, aged 49, joined GAB on 4 January 2013 and was appointed as Managing Director of GAB on 1 March 2013.

Hans started his career in 1991 as a Sales Representative with Heineken Netherlands and in 1995, he moved to Heineken Germany as Sales Manager. He returned to Heineken Netherlands in 1997, first serving as Heineken Export Manager with the Heineken Export Group and then as Senior Brand Manager with Vrumona, a major Dutch soft drinks manufacturer and a wholly owned subsidiary of Heineken until the end of 2002. In early 2003, Hans was appointed Country Manager of Heineken Puerto Rico, a key market for the Heineken Group as the No.10 Heineken beer market in the world. By the end of 2005, he was appointed General Manager of Brau Union International based in Vienna, Austria, part of Heineken Region – Central and Eastern Europe.

Subsequently, in 2008, Hans was appointed General Manager of Sirocco, a joint venture between Heineken and Emirates in Heineken Region – Africa and Middle East, his most recent role prior to joining GAB. In this role, he oversaw several key markets in the Gulf Region and managed a portfolio of brands from various principals including Heineken International, AB InBev, Molson Coors and Asia Pacific Breweries.

Hans currently serves as a Governing Council Member of the Confederation of Malaysian Brewers Berhad.

Chartered Accountant Master of Business Administration

Atul Chhaparwal, an Indian national, has held several senior finance roles within the Diageo Group in his tenure of more than 14 years.

He has led finance teams in various Asian markets. He has a proven track record of consistently delivering holistic business performance, maintaining the high standards of controls, compliance and motivating teams.

Prior to joining GAB, Atul was the Finance Director for Diageo Moet Hennessy Thailand, a Diageo managed Joint Venture between Diageo and Moet Hennessy distributing brands owned by both shareholders in Thailand.

He was the Regional Finance Director for Singapore, Malaysia and Indonesia from December 2007 to July 2011 in Diageo and Assistant General Manager – Commercial Finance and Finance Controller for Diageo’s India Hub operations prior to that.

Master of Business Administration (Nottingham Trent University)

B.A. (HONS) (Universiti Sains Malaysia)

Thum Chee Yuen, Malaysian, joined GAB in May 2010. He has 20 years of commercial experience in diverse industries, including property, pharmaceutical, fast moving consumer goods and telecommunications.

He began his career as a Sales & Marketing Executive for Lion Group in 1996 and subsequently joined Boehringer Ingelheim Malaysia as a Product Specialist in 1997.

He then joined Unilever as Key Account Manager in 2001 and progressed to Regional Sales Manager. Thum joined Celcom Axiata Berhad in 2007 in the position of Vice President – Sales Planning and Operations.

GUINNESS ANCHOR

BERHAD

pg.24

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RENUKA INDRARAJAH

CORPORATE RELATIONS & LEGAL DIRECTOR

WILLIAMMATHERS

SUPPLY CHAIN DIRECTOR

Solicitor of the High Court of Australia Solicitor of the Supreme Court of Queensland Post Graduate Diploma in Legal Practice (QUT) Bachelor of Laws (University of Queensland)

Renuka Indrarajah, Malaysian, formerly an Advocate and Solicitor, joined GAB in February 2002 as Legal Manager. She was promoted as Head of Legal Affairs in 2004 and in May 2007, she received another promotion to Corporate Relations and Legal Director.

Renuka began her career as a solicitor in Queensland, Australia until 1993 when she returned to Malaysia. She continued her career in the Corporate Department of Skrine, a prominent firm of Advocates & Solicitors in Kuala Lumpur. In December 1998, she joined Sema Group and was responsible for setting-up and managing the regional legal department, which entailed having all legal matters pertaining to the Asia Pacific region under her purview.

In her role as Corporate Relations and Legal Director, Renuka is responsible for leading GAB’s Corporate Relations and Legal Team in safeguarding and building the corporate reputation of the Company. The divisions within the Corporate Relations and Legal Department are External Affairs, Legal and Secretarial, Corporate Communications and Responsibility and the GAB Foundation.

Renuka currently serves as a Governing Council Member of the Confederation of Malaysian Brewers Berhad and as Trustee of GAB Foundation.

BSc. Brewing Heriot Watt University, Edinburgh, Master Brewer, The Institute of

Brewing and Distilling

William Mathers, British, joined GAB on 15 April 2015 as Supply Chain Director.

William has over 30 years of brewing experience covering technical and operation functions, with several major brewing companies working in the United Kingdom, Europe and most recently working globally from the Netherlands.

William started his career in 1981 where he opened a micro brewing company in Glasgow brewing his own beer.

Thereafter, he moved on as Brewing Manager at Webster’s Brewery, then part of the Diageo Group.

Subsequently he held several senior Supply Chain roles including Head Brewer at John Smiths Courage Brewery, Group Manufacturing Development Manager and Operations Integration Manager at Scottish & Newcastle plc., before joining Heineken Global Supply Chain Services in 2008.

MANAGEMENT TEAM PROFILE

BRUCE DALLASMARKETING DIRECTOR

Master of Business Administration (Henley Management College, UK)

Bachelor of Commerce in Economics and Marketing (University of Natal, South Africa) Bachelor of Commerce (HONS), Marketing

(University of Natal, South Africa)

Bruce Dallas, South African, was appointed as GAB’s Marketing Director on 15 March 2013.

Prior to joining GAB, Bruce was with Diageo Asia Pacific based in Singapore as Category Director, Beer and Baileys.

He began his career in 1997, in South Africa and over the next few years worked on several brands such as Carmel, Monate, Bestfoods, Marmite, Knorrox and Skippy.

He was seconded to Bestfoods European Head Office in Brussels, Belgium in 2000 and subsequently returned to South Africa as Group Product Manager for Knorr South Africa.

Bruce was made Regional Marketing Manager for Unilever Africa, Middle East & Turkey in 2003. Bruce joined Brandhouse Beverages South Africa, a joint venture between Diageo, Heineken and Namibian Breweries in 2006, as Portfolio Manager, Innovation and Renovation and two years later he was appointed Group Portfolio Manager, Innovation, Vodka and Ready-To-Drink.

He joined Diageo Africa in 2010 as Marketing Director of West Africa Spirits before moving to Asia in 2011.

GUINNESS ANCHOR

BERHAD

pg.25

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MANAGEMENT TEAM PROFILE

LIM KWAN-SEK

HUMAN RESOURCES DIRECTOR

CHOWYI LIN

IT DIRECTOR

MSc. (Econs) Management (London School of Economics, UK)

B.A. (HONS) Sociology, (Reading University, UK)

Lim Kwan-Sek, Malaysian, joined GAB on 1 January 2014. He has 19 years of work experience, having worked in diverse industries both locally and overseas.

Kwan-Sek’s experience covers a wide range of areas, including business transformation, strategy and business development, mergers and acquisitions. He has also been in various senior leadership roles, guiding the delivery of the business agenda.

He began his career as a Management Consultant with Accenture in 1996. He was involved in the design and implementation of business solutions for a wide range of clients.

He subsequently joined Maybank as Head of Organisational Development in Group HR and later took on the lead role in talent management. His next role was in Sime Darby as Head of Organisational Performance managing various Group HR functions.

Prior to GAB, Kwan-Sek was the Chief HR Officer of AIA Malaysia.

Bachelor of Science (Information Systems)(University of New South Wales, Sydney)

Chow Yi Lin, Malaysian, has over 29 years of working experience covering IT Management, Service Delivery and IT Solutions.

This is her second stint with GAB, having previously served for 16 years with her last position as Head of Information Services and Technology where she successfully implemented SAP to the business and CRM to support sales force and distributors transformation.

She left GAB in 2005 to join Diageo Singapore as Regional Service Delivery Manager and rejoined GAB on 1 December 2014.

Her last appointment before rejoining GAB was Senior IT Manager, South Asia Pacific and Solutions with Burberry Singapore. In this role, she was a key member of the Asia IT leadership team, covering South Asia and Australia.

GUINNESS ANCHOR

BERHAD

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ENJOY AND CELEBRATE

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WE KEEP OUR BRAND PROMISECLOSE TO HEART.This year, we expanded our iconicportfolio of international brands toinclude three new Strongbow variants.

Growing brands

GUINNESS ANCHOR

BERHAD

pg.28

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CORE BRANDSThere is never a dull moment with our core brands – Tiger, Guinness and Heineken. We constantly innovate to remain relevant, thus keeping fans and followers’ experiences fresh and exciting through the years.

GROWING BRANDS

OUR BRANDS CONTINUED TO DELIVER GREAT MOMENTS AND EXCITING EXPERIENCES THROUGH EACH OF THEIR CAMPAIGNS. FY15’S CALENDAR WAS PACKED WITH A VARIETY OF EVENTS THAT SAW THE RETURN OF POPULAR SHOWCASES, THE EXPANSION OF SUCCESSFUL CAMPAIGNS, AND INTRODUCTION OF NEW CREATIVE LINE-UPS.Read on to revisit the many thrilling events from GAB’s brands that kept Malaysia excited through the year.

GUINNESS ANCHOR

BERHAD

pg.29

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WORLD ACCLAIMEDICONIC ASIAN BEER

brand profile

“TIGER ASPIRES TO SPARK A CHANGE AMONG YOUNG ASIANS, TO FOLLOW THEIR DREAMS AND REALISE THEIR POTENTIAL….”

DELIGHTING FANS WITH

ITS REFRESHING ANDFULL-BODIED FLAVOURACROSS MORE THAN 70 COUNTRIES

S I N C E 1932 OF TIGER FCBIG AWAY GAMES

MULTIPLE AWARD-WINNING ASIAN BEERWITH OVER 50 INTERNATIONAL AWARDS AND ACCOLADES TO DATE

Silver AWARD WINNER AT THE 2015 PUTRA BRAND AWARDS

11Y E A R S

MALAYSIA’S LEADING BEER BRAND

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Returning to Malaysia for the second year since its successful debut in 2014, Tiger Translate has fast become a local headlining event that delivers a bolder, edgier unconventional multi-sensory fusion of arts and music. Expanding the reach, in FY15 about 3,500 fans enjoyed the artistic showcase across three satellite shows held in the Klang Valley and Penang, with the main event culminating in Kuala Lumpur on 13 June 2015.

From elements of Thailand for the grand entrance 2.5 metre tall tiger head sculpture created by Rukkit Kuanhawate, to the geometrically designed main bar by Hong Kong’s Parent’s Parents, and Malaysia’s own Louis Low’s stylised tiger creation in a glass art installation. This year’s Tiger Translate assembled rising Asian stars with a diverse line-up of local and international indie rock, electro, funk and groove artists. Fans enjoyed acts by homegrown bands Love Me Butch and Twilight Actiongirl, to collaborations between UK’s DJ Tim Exile with Malaysia’s Lightforge, British group Blood Red Shoes and Hong Kong’s My Little Airport and Taiwan’s Wonfu. The popular event garnered wide media coverage with an estimated PR value of RM1.4 million.

BOLDLY ASIAN, TIGER IS THE PERFECT ACCOMPANIMENT FOR FANS THAT FOLLOW THEIR DREAMS.

THIS YEAR, TIGER CONTINUED TO EXCITE THROUGH ITS SIGNATURE EXPERIENTIAL EVENTS, TIGER TRANSLATE, TIGER FC AND THE NEWLY-DEBUTED TIGER UNCAGE.

AN ASIAN ICONTIGER, GROWING BRANDS GUINNESS ANCHOR

BERHAD

pg.32

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Football and Tiger go hand-in-hand. For the 11th year, Tiger FC Big Away Games fuelled the adrenalin of thousands of football aficionados with their signature event viewings, food and ice-cold Tiger!

This year’s campaign brought hundreds of diehard football fans from across Klang Valley to celebrate the tournament. The season finale saw two longstanding rival teams battle it out to the cheers of supporters who gathered at The Beer Factory in Sunway Giza on 19 May 2015. The highlight of the contest was The Real Pitch which rewarded winners with a 5D/2N trip to London that included attending a match game at the stadium, and the opportunity to join British football fans to watch and cheer on their teams in another match game at a local British pub.

In FY15, Tiger also introduced a new emotive and thought-provoking campaign. Running counter to traditional beer advertising, Tiger UNCAGE contemporarises how the brand connects authentically to inspire its fans to realise their potential despite adversity or naysayers. It debuted in September 2014 with a series of short films that celebrate inspiring stories of young Asian personalities such as female Chinese tattooist Joey Pang, a make-up artist turned coveted tattooist, Thai-American stuntman Charlie Ruedpokanon, who studied business management but is now a Shaolin-trained stuntman, and Singaporean filmmaker Anthony Chen, whose films broke Asian conventions.

GROWING BRANDS

UNCAGE tells the story of how they have forged their own paths, breaking free from conformity. The print and digital campaign struck a chord with fans, and amassed some RM1 million worth of PR value across print and digital media platforms.

GUINNESS ANCHOR

BERHAD

pg.33

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brand profile

AWARDED FOURTH PLACE FOR THE 2015 GLOBAL LEAGUE OF EXCELLENCE OUT OF 52 BREWERIES OUTSIDE OF DUBLIN, IRELAND

THE WORLD’S MOST DISTINCTIVE BEER, BORN OUT OF DETERMINATION, COURAGE, INGENUITY AND PASSION

No. 1STOUTIN MALAYSIASELLS MORE THAN 10 MILLION PINTS DAILY WORLDWIDE

AND AROUND THE WORLD

FOUNDED BY

A R T H U R GUINNESS I N 1 7 5 9

THE FIRST GUINNESS IN MALAYSIA WAS PRODUCED IN THE SUNGEI WAY BREWERY 50 YEARS AGO

AN UNRIVALLED BLACK LIQUID AND WINNER OF MULTIPLE QUALITY AWARDS IN MALAYSIA

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BIG FLAVOURS, BOLD AND BLACK, GUINNESS HAS BEEN THE PREFERRED CHOICE OF PREMIUM BLACK BEER FOR DRINKERS AROUND THE WORLD SINCE 1759. CLOSE TO 260 YEARS LATER, IT IS STILL CREATING DISTINCTIVE EXPERIENCES.

GO BOLD WITHGUINNESS

GROWING BRANDS GUINNESS ANCHOR

BERHAD

pg.36

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A longstanding partnership of great beer and great music, Guinness launched its new music platform, Guinness Amplify: Music Made of More. Through this music platform, Malaysia’s favourite black brew celebrates musicians who have been bold, determined and passionate enough to follow their dreams and make them a reality.

Across the country over seven weeks between September to October 2014, Guinness lovers enjoyed 14 amazing Malaysian acts like Kyoto Protocol, Paperplane Pursuit and Froya, supported by international guest stars, MAGIC!, the Canadian Nu Reggae act with their chart-topping multi-platinum smash-hit single ‘Rude’.

Taking another step forward this year, Guinness extended the campaign with an introduction of a sidestream of Amplify. Amplify: Curates saw these talented musicians ‘paying it forward’ and giving lesser-known artists a similar boost in their music career by inviting them to share the stage and showcase their music. Sabahan songstress Froya was the first to take up the mantle as Curator, sharing her journey with up and coming artists, Rozella, Jumero and +2dB.

Under its Made of More campaign, Guinness also introduced the X’mas Bold Confessions booth to inspire its followers to literally reveal what many fear to do – confess their inner most hidden secrets! In time to close off 2014 and to scrub the slate clean for the coming New Year, the two-month campaign tour captured on film bold confessions of many Malaysians alike! These did not remain secrets for long as they were viralised under the hashtag #BoldConfessions and @GuinnessMY!

GROWING BRANDS GUINNESS ANCHOR

BERHAD

pg.37

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brand profile

WORLD’S No. 1INTERNATIONAL PREMIUM BEER BRAND

RENOWNED FOR ITS PROGRESSIVE AND INNOVATIVE PERSONALITY

FOR THE SECOND CONSECUTIVE YEAR, THE OFFICIAL BEER PARTNER OF CIMB CLASSIC, THE ONLY OFFICIAL PGA TOUR FEDEXCUP EVENT IN SOUTHEAST ASIA. THE TOURNAMENT BOASTED THE LARGEST PRIZE PURSE FOR A PROFESSIONAL GOLF EVENT IN THE REGION

THE CITIES OF THE WORLD CAMPAIGN UNVEILED

LIMITED EDITION BOTTLES

FEATURING 6 ICONIC CITIES

Kuala Lumpur WAS PART OF THIS GLOBAL SERIES

SERVED IN

1 7 8 COUNTRIES SINCE 1873

PUTRA BRAND ICON 2015 Winner4 TIME GOLD AWARD RECIPIENT OF THE PUTRA BRAND AWARDS (2012 – 2015)

BUILT ON CORE VALUES OF OPEN MINDEDNESS, COSMOPOLITAN, INVENTIVE AND WITTY

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HEINEKEN WAS CONFERRED WITH THE PRESTIGIOUS ACCREDITATION OF BEING A PUTRA BRANDS ICON AFTER SUCCESSFULLY BAGGING THE GOLD AWARD FOR THE ‘BEVERAGE-ALCOHOLIC’ CATEGORY AT THE 2015 PUTRA BRAND AWARDS FOR THE FOURTH CONSECUTIVE YEAR. THE ONLY BRAND AWARD CHOSEN BY THE PEOPLE BASED ON THEIR PREFERENCES, THIS WIN FOR HEINEKEN INDICATED THAT THE CONSUMERS ARE ENJOYING THE BRAND. THE HEINEKEN PROMISE IS TO KEEP ON PROGRESSING AND DELIVERING EXCITING NEW EXPERIENCES IN MALAYSIA. WINNING GOLD THIS YEAR AS CHOSEN BY THE CONSUMERS IS A TESTAMENT TO HEINEKEN’S COMMITMENT AND DELIVERY ON THAT PROMISE.

HEINEKEN

The bar is set high when you are well-versed with exciting experiences from around the world. Heineken’s signature golf tournament, the Heineken Championship with the CIMB Classic, continued to bring golf-fans’ dreams alive with an opportunity to play with the professionals.

In FY15, the Heineken Championship provided six amateur golfers the dream opportunity to play in the CIMB Classic Pro-Am 2014. These six golfers were selected out of more than 380 amateur golfers from over 100 golf clubs across the country.

The experience continued into the 4-day CIMB Classic 2014, one of South-East Asia’s finest professional golf tournaments, which attracted close to 35,000 people this year alone. For those who visited The Heineken Green Experience marquee, they enjoyed a panoramic viewing spot located at the 1st and 14th hole, with servings of Heineken Extra Cold chilled between -3º and 1º, perfect to quench participants thirst during that hot afternoon.

great moments brewed WITH

GROWING BRANDS GUINNESS ANCHOR

BERHAD

pg.40

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putrabrandicon

Ending on a high note, Heineken presented the Sundown Party on the last day of the tournament, with a thrilling infusion of performances by musicians, DJs, and a speed painter, teamed with specially-created Heineken cocktails.

Heineken’s Cities of the World (COTW) campaign inspired consumers to venture beyond their habitual daily routines and to discover hidden gems within their own cities. It was an innovative global campaign brought to Malaysian shores over two months between August and September 2014, nationwide. The highlight of the campaign was the limited edition collection of six-specially designed Heineken bottles. Each bottle represented a global city – Amsterdam, Berlin, London, New York, Shanghai, and of course, Kuala Lumpur.

The COTW campaign also hosted a digital contest. For the grand prize, Heineken sent 10 Malaysians to New York for 72 hours to experience unique adventures in the Big Apple which represented one of the six cities in the collection. The campaign also developed a mobile-friendly website which revealed unique locations across Malaysia. This geo-targeted compass gave people a look into the interesting locations around their vicinity, enabling them to spark new experiences wherever they were. This tied in to the campaign’s theme of encouraging Heineken fans to open their world to new experiences through creative technology. Total print and digital coverage reached RM2 million.

GROWING BRANDS GUINNESS ANCHOR

BERHAD

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portfolio brands

AWARDED GOLD AT THE MONDE SELECTION FOR 3 CONSECUTIVE YEARS FROM 2010 TO 2012ANCHOR STRONG IS THE BOLDER VARIANT OF THE ANCHOR BRAND, BREWED USING COLD FILTRATION PROCESS RESULTING IN A BREW THAT IS STRONG YET REFRESHING

A MALAYSIAN FAVOURITESINCE 1933

lagerA POPULAR BREW WITH A SMOOTH, REFRESHING TASTE

The No. 1German Wheat Beer BREWED ACCORDING TO THE STRICTEST AND OLDEST REGULATIONS OF BREWING SET OUT IN “THE GERMAN PURITY LAW” - ONLY THE PUREST WATER, MALTED WHEAT AND BARLEY, HOPS AND YEAST CAN BE USED IN THE BREWING PROCESS

ONE OF THE OFFICIAL BEERSAT THE WORLD-FAMOUS OKTOBERFEST, HELD IN MUNICH EVERY YEAR

THE PREFERRED NON-ALCOHOLIC BEVERAGE

A NUTRITIOUS

MALT DRINK

malt beverageCONTAINS ALL THE GOODNESS OF MALT, INCLUDING A HIGH CONCENTRATION OF B VITAMINS (B1, B3 AND B6)

A NON-ALCOHOLIC MALT BEVERAGE THAT BOOSTS ENERGY AND ALERTNESS

THE CREAM OF IRISH ALES

THE NO.1 SELLING ALE IN MALAYSIA

aleTHE REDVELVETY

ALE THAT IS SAVOURED

THE WORLD OVERTHE SILKY SMOOTH

ALTERNATIVE TO LAGERSAND STOUTS THE PERFECTLY CRAFTED PINT

WITH IRISH ORIGINS DATING BACK TO 1710; A JOURNEY THAT IS

WORTH IT

THE REAL SHANDY AN ALL-TIME CHINESE NEW YEAR

FAVOURITE

APPEALS TO DRINKERS PREFERRING A LIGHTER OPTION,

WITH ITS REFRESHING BUZZ AND UNIQUE BLEND OF BEER MIXED WITH FIZZY LEMONADE

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INNOVATION BRANDSIn tune, discerning and ahead of the game, GAB balances its portfolio with current and innovative new brands and line extensions. In FY15, we expanded our line-up with one new brand and three new brand variants.

STAYING REFRESHEDIntroduced in November 2013 as the easy-to-drink zesty lemon version of Tiger beer, Tiger Radler continues to deliver refreshing experiences to its fans. It is the drink of choice for every occasion and in FY15, we held a series of Tiger pop-up parties to show our fans just how Tiger Radler can be enjoyed all the time. Laughfest was a light-hearted comedy night featuring notable stand-up comedian Paul Ogata, who left the audience in stitches. There was also an exclusive Aquabeats pool party featuring fun elements like “chicken fight” and “water-gun warfare” with music by local acts DJ Def and Ashes & Oak Trees. Two lucky fans were also given a chance to win a sponsored house party worth RM5,000. The first winner was chosen from the #WhatsRefreshing contest while the second was awarded for sending an Instagram picture of the most refreshing #Radlermoment at the Pop-Up Party.

tiger radlerD O U B L EREFRESHMENTCOMBINES THE CRISP AND EASY-DRINKING TASTE OF TIGER BEER WITH THE ZESTY FLAVOUR OF NATURAL LEMON JUICE

NEW VARIANTS TO ENJOYThe world’s no.1 cider brand keeps fans delighted and wanting more with inventions of flavour adaptations building on its 125-year recipe. Following the introduction of its contemporised bottle design in 2013, Strongbow released three new variants in Malaysia – Strongbow Apple Ciders Gold, Strongbow Apple Ciders Honey, and Strongbow Apple Ciders Elderflower in November 2014. The variants deliver the same crisp and refreshing notes that keep every sip of Strongbow authentic and full of zest.

RECOGNISED AS THE FIRST DRINKO F T H E E V E N I N G

W O R L D ’ S

NO.1CIDER

strongbowWORLD’SBEST SELLING CIDER BRAND

PERFECTED OVER 125 YEARSOF CIDER-MAKING HERITAGE

SPARKLING NATURE OF THEPRODUCT AND OVER-THE-ICESERVING RITUALGIVES STRONGBOW ITS CRISP, REFRESHING TASTE

ACHIEVED OVER 6 YEARS OF CONSISTENT GROWTH IN MALAYSIA

GROWING BRANDS

STRONGBOW APPLE CIDERS GOLDAlluring warm golden yellow glow, a classic crisp apple bite with a light aftertaste of bittersweet apples.

STRONGBOW APPLE CIDERS HONEYTantalising aroma of honey in every sip for a pleasantly refreshing experience.

STRONGBOW APPLE CIDERS ELDERFLOWERSweet floral aroma with a hint of lime for a brilliant zesty finish.

GUINNESS ANCHOR

BERHAD

pg.43

Page 46: GAB Annual Report for Bursa submission.pdf

GLAMPING THE KIRIN ICHIBAN WAYKirin Ichiban was introduced into GAB’s portfolio in FY14, to become the first new brand in five years. The brand aims to bring the best of Japan’s experiences to consumers, and launched a one-of-a-kind ‘Glampers’ month-long campaign in August 2014 to combine the best of glamorous camping and Japan. The ‘Glamping Night’ contest simulated a camp-site where contestants had to complete a checklist of Japanese-themed activities including the Kendama (a traditional Japanese game), arts and crafts and savour delectable Japanese bento boxes. The winner won a holiday trip to Japan, which included an exclusive tour of Kirin Brewery and the annual Chichibu festival.

“FIRST PRESS” METHODWITH NO BITTER AFTERTASTE

kirin ichiban

CRISP START, FOLLOWED BY RICH FLAVOURS. COMPLEMENTS JAPANESE, ORIENTAL, EUROPEAN CUISINES.

NO.1PREMIUM 100%MALT BEER

JAPAN’S

ANYTIME, ANYWHERE, ANYONE!When Smirnoff Ice was launched in Malaysia in June 2014, Malaysians knew they were in for awesome experiences. As the world’s no.1 ready-to-drink beverage, Smirnoff Ice is the ‘drink for everyone’. In FY15, Smirnoff Ice brought that fun essence through a series of orchestrated Halloween-themed appearances across Kuala Lumpur and Penang, to show that with Smirnoff Ice, awesome experiences can happen to anyone, anytime, and anywhere! Ghoulish-dressed characters were spotted in everyday-type activities including grocery shopping, dance-offs in the streets, and at event parties.

smirnoff ice

SELLS OVER 69.6 BILLION BOTTLES GLOBALLY

EXCLUSIVELY FOR EVERYONESUITABLE FOR ANY OCCASION AND ANYWHERE

WORLD’S

NO.1 READY-TO-DRINKALCOHOLIC BEVERAGE

SYNONYMOUS WITH HERITAGE, PURITY AND CRAFTSMANSHIP

aff ligem

A LEGACY OF CRAFTBelgian, and with a rich heritage of more than 940 years dating back to 1074, Affligem pours like a dream of purity and superb craftsmanship into every single drop. The double-fermented specialty beer appeals to sophisticated drinkers who appreciate fine dining in private cosy settings.

GAB enriched its iconic portfolio with Affligem as its first super-premium craft brew in October 2014. It was introduced into the GAB portfolio through the Purist Dinner, exclusive dining settings for small numbers of just 10-15 diners. The Affligem experience showcased the tasting notes of the craft brew, its unique pouring rituals, and food pairing accompaniments.

BELGIAN CRAFT BREW WITH A RICH HISTORY DATING BACK TO 1074

WINNER AT THE EUROPEAN BEER STAR AWARDS AND WORLD BEER CUP

GROWING BRANDS GUINNESS ANCHOR

BERHAD

pg.44

Page 47: GAB Annual Report for Bursa submission.pdf

As loyal customers celebrated the Chinese New Year (CNY) festivities with purchases of Tiger Beer, Guinness, Heineken or Anchor, they stood the chance to win from among prizes worth collectively more than RM2.5 million which included 100,000 bottles of Tiger Radler and 800 cash-filled ang pow packets of RM388 each. The CNY contest grand finale rewarded 44 winners with pure gold bars, of which 10 consumers walked away with the grand prize of 500g of gold worth up to RM85,000 each.

For the 2014 Oktoberfest, GAB created a ‘mugnificient’ new record with its 2.6 metre high and 1.72 metre wide giant replica of the Company’s signature mug logo. The giant mug was endorsed by the Malaysian Book of Records as Malaysia’s Biggest Mug. As it travelled across the country, consumers had the opportunity to provide the correct or closest estimate volume of liquid that the giant mug can hold. The top five winning entries received a year’s supply of Tiger Beer! Now that is a lot of beer to last through the year!

TRADE MARKETING HIGHLIGHTSGAB SHOWCASED ITS FULL LINE-UP OF BRANDS DURING KEY CELEBRATORY OCCASIONS SUCH AS CHINESE NEW YEAR AND OKTOBERFEST.

GAB Professional Solutions (GABPS) is our intensive 5-star product and service training programme that equips our trade partners’ bartenders with skills to strengthen their service quality and ensure consumers always enjoy a perfectly poured Heineken draft beer. It is a year-long programme offered through the GABPS Academy that ends with the GABPS National Finals, an ultimate showcase of skills and showmanship.

This year, more than 1,400 bartenders took part, where after eight months of training, and several rounds of competition, the top three candidates finally emerged as the winners. They then advanced to the GABPS Academy Boot Camp, a 3D/2N intensive training session. The best performing individual at the Boot Camp was then sent to the Heineken Global Bartender Finals in Amsterdam to compete against the world’s top bartenders.

GROWING BRANDS GUINNESS ANCHOR

BERHAD

pg.45

Page 48: GAB Annual Report for Bursa submission.pdf
Page 49: GAB Annual Report for Bursa submission.pdf

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15

GAB recorded a strong

turnaround in FY15 with

success stories across our brands,

supported by stable integrated

operational platforms.

FINANCIAL HIGHLIGHTSBack on track, stronger growth trajectory

The growth drivers of our FY15 financial performance is attributed to our highly successful and effective commercial strategy, a holistic GST implementation, unwavering focus on strategy and increased commercial investments.

Return to growth

We recorded good financial growth across the board compared to last year, with a 8.6% increase in revenue. Operating profit grew by 9% while profit before tax increased by 10% to RM292 million from RM266 million. Unlocking cash opportunity, excellent GST implementation along with a commendable performance across our brand portfolio resulted in a strong turnaround in FY15.

GAB converted GST implementation challenges into an opportunity through various operational changes. We were able to minimise operational

costs and neutralise partial impact on consumer price increase. We invested approximately RM5 million to get GAB and our trade partners to be in full compliance with the new tax environment, and more importantly to ensure a smooth transition with no-business disruptions or loss of business come 1 April 2015. The investments made translated into an overall positive performance delivery and also unlocked significant cash opportunity for the Company. You can read more about this under the GST case study highlight in the next page.

Intensifying stakeholder engagements

In support of strengthening stakeholder accessibility and communication, commencing this period, GAB increased its engagements with financial analysts from twice yearly, to once every quarter. This has seen a deeper understanding on key issues and increased in two-way dialogues between the Company and our stakeholders.

FY15 KEY HIGHLIGHTS

THIS IS A RESULT OF INCREMENTAL INVESTMENTS BEHIND OUR BRANDS,

DELIVERY ON COMMERCIAL DRIVERS AND BY UNLOCKING POTENTIAL

THROUGH INNOVATIONS. WE BELIEVE THE INVESTMENTS BEHIND THESE

PROVEN GROWTH DRIVERS WILL CONTINUE TO PROPEL US FURTHER ALONG

THE GROWTH TRAJECTORY FOR MANY MORE YEARS TO COME.

FINANCIAL

+8.6%REVENUE

+9%OPERATING PROFIT

+10%PROFIT BEFORE TAXATION

+35%CASH FLOW

SIGNIFICANT COST AND OPERATIONAL SAVINGS FROM GST-IMPLEMENTATION ADDITIONAL CASH FLOW UPSIDE

RM18 millionDELIVERED COST SAVINGS

RM0.6 million

INVESTOR SESSIONS

4xA YEAR

GUINNESS ANCHOR

BERHAD

pg.47

Page 50: GAB Annual Report for Bursa submission.pdf

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15

GST Implementation: A success story

A holistic approach creating value for our business and all trade partners.

GAB together with its business partners seamlessly and smoothly transitioned into the GST environment with no business and operational disruptions.

Our success is attributed to the following key drivers – full readiness, a holistic approach for the entire value chain network, and integrated teamwork. Our GST-readiness campaign spanned 1.5 years, and looked into business process change, IT system upgrade and change management for all our distributors, retailers and trade partners. The commercial and pricing strategy was an integral part of the GST

implementation with a clear objective to minimise adverse price impact on our valued consumers.

The GST project also reinforced GAB as a partner ‘who truly cares’ and would be there to support during difficult times. We strengthened our relationship with our business partners and distributors along the entire value chain by proactively reaching out to understand their concerns. We then invested in training, guiding, equipping and ensuring that they too would be GST-ready come 1 April 2015.

The project’s success was the result of a cross-functional team led by Finance, with IT, Sales Operations & Planning, Distributor Development, and Logistics & Procurement. Top management provided the team with the strategic direction to achieve the targetted results.

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Benefits of our GST readiness

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• Simplified trade claim processes

to deliver cost savings

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• GS

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• More than 1,000 people reached

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• Sum

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• Seamless and ac

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GUINNESS ANCHOR

BERHAD

pg.48

Page 51: GAB Annual Report for Bursa submission.pdf

GST IMPLEMENTATION HIGHLIGHTS

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15

CAPITALISATION OF RETURNABLE BOTTLES

SMOOTH IMPLEMENTATION FOR GAB AND

ENTIRE VALUE CHAIN NETWORK, WITH FULL

COMPLIANCE AND NO BUSINESS DISRUPTIONS

CASH FLOW UPSIDE

7% OF TOTAL WORKING CAPITALRM18MIL

MONTHLY REDUCTIONof documentation processing time

70%

RETURNING FULL DEPOSIT VALUETO OUTLETS

NET PRICING STRATEGY

DELIVERED COST SAVINGS

TO GABMILLIONRM0.6

INTEGRATEDTEAMWORK• cross functional,

multi-department team; with strong Management support

ADVANCED PREPAREDNESS• 1.5 years preparation

• project investment of RM5 million

HOLISTIC CAMPAIGN• extended GST project coverage

beyond GAB, to include trade partners, distributors and retailers

• trained internal sales team as GST ambassadors

• organised engagement sessions, workshops for distributors and sales team

• trained 1,000 people over 2 roadshows across 8 regions

• facilitated IT and accounting system readiness for distributors through GST Forum

• specially produced GST Booklet & FAQs

• created dedicated GST hotline for business partners

• proactively engaged customs and tax consultants for regular updates

GUINNESS ANCHOR

BERHAD

pg.49

Page 52: GAB Annual Report for Bursa submission.pdf

Excellent product quality

Our brews received multiple recognitions in FY15, a testament of our promise to keep to the highest level of international brewing and quality standards.

• Heineken maintained its quality and received high quality scores throughout the year

• Guinness received a perfect 10 scoring from Diageo Global and was ranked 4th place for the Guinness League of Excellence for the taste of Foreign Extra Stout

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15

FY15 KEY HIGHLIGHTS

ACHIEVED

100% PACKAGING QUALITY SCORING FOR HEINEKEN

FIRST TIME RECORD

A PERFECT 10 SCOREFOR GUINNESS (FROM DIAEGO GLOBAL)

ESP RESULTS EXCEEDED ALL TARGETS:

6.2% SAVINGS ON ELECTRICITY

9.6% REDUCTION ON THERMAL ENERGY

19.2% LOWER USAGE OF WATER

Reducing energy and water for a sustainable future

Cognisant of keeping our environment secure for future generations, our Energy Saving Programme (ESP) has been a high priority since 2009 in keeping utility resources’ consumption (electricity, thermal energy and water) as low as possible without compromising the quality of our brews. Some key highlights recorded through ESP included electricity consumption recorded at 10.69 kWh/hl, a savings of 6.2% exceeding the target of 10.92 kWh/hl, while thermal energy usage fell to 86.74 MJ/hl, exceeding the target of 92 MJ/hl with a savings of 9.6%. Water consumption fell from 4.54 hl/hl in FY13 to 3.99 hl/hl, a 19.2% savings exceeding the FY15 target of 4.79 hl/hl. The FY15 results demonstrate GAB’s capacity to produce quality brews through responsible consumption of resources.

A safer place to work

There is no compromise on employees’ safety. To GAB, it is a balance of producing quality brews in a work environment that is safe for our employees every day. In FY15, we achieved a critical momentum of 547 consecutive accident-free days as at 30 June 2015, a halfway mark to global aspirational levels for breweries. The Safety Pyramid and Behavioural Based Safety (BBS) approach has been instrumental in shifting control to employees ensuring a safe and healthy work environment.

SUPPLY CHAIN HIGHLIGHTSEnhanced effectiveness, productivity and quality

This year’s highlights showcase a more stable, robust and sustainably-resourced supply chain in supporting our commitment to produce and deliver great drinks every single time. The results are derived from improvement measures implemented in FY15.

Performance improvements with Total Productivity Management (TPM)

Our TPM methodology has been expanded which enabled us to further enhance systems and processes, improve effectiveness and productivity and help cultivate a zero-loss mindset across our Supply Chain processes. The savings quantum is translated into monetary terms, where up to 30% will be reinvested to help further drive improvements in our environmental performance. These TPM results will also be instrumental in supporting GAB’s ongoing quest to achieve the Bronze Award in World Class Brewery Organisation status.

HEINEKEN

HIGHEST TASTE TEST SCORE ACHIEVED

547 AS AT 30 JUNE 2015

CONSECUTIVE ACCIDENT-FREE DAYS

GUINNESS ANCHOR

BERHAD

pg.50

Page 53: GAB Annual Report for Bursa submission.pdf

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15

VISIONACHIEVING ZERO ACCIDENT

MISSIONPROVIDING A SAFE WORKING CONDITION IN THE BREWERY FOR ALL EMPLOYEES

OWN PERSONNEL

INCIDENT OWN PERSONNEL

NEAR MISSES OWN PERSONNEL

BEHAVIORAL OBSERVATIONS

Stop-BBS | Safety Tags

SAFETY PYRAMID FY14/15

CONTRACTOR PERSONNEL

INCIDENT CONTRACTOR

NEAR MISSES CONTRACTOR

SAFETY AUDITS & TAGS (CONDITION)

UNPLANNED EVENTS

PLANNED ACTIVITIES

TOP PART OF PYRAMID= REACTIVE PART

BOTTOM PART OF PYRAMID= PROACTIVE PART, ACTING BEFORE UNWANTED EVENTS (INCIDENTS & ACCIDENTS) TAKE PLACE

FATALITIES0/0

SERIOUS + MINOR ACCIDENTS

0/0 0/0

2/5

86/60 8/20

2/8

0.91/0.5 | 170/120 18/50

75%ORR* ROLL-OUT COMPLETION TO PLAN

80.1%COMPLIANCE WITH COMPANY RULES,

STANDARDS & PROCEDURES

* ORR: Office of Rail Regulation

GUINNESS ANCHOR

BERHAD

pg.51

Page 54: GAB Annual Report for Bursa submission.pdf

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15

COMMERCIAL HIGHLIGHTSDelivering on our promise every single time

We examined our current strategies and activities, and analysed what and how we could do things better. This exercise covered our marketing strategy to ensure we continue to retain market share for our core brands and innovate to meet changing consumer preferences. Our sales strategy reviewed how we could institute strategic outlet partnerships and enhance consumer experiences in outlets, and optimise the route to market by uplifting our distributors capabilities.

Our strategy to continue investing behind our operations yielded results in commercial operational efficiencies which we were able to reap in FY15.

Powering up the commercial efficiencies

The business embarked on a fact-base initiative, Project Power, with the aim to better understand the Malaysian beer market in early FY15. Through this project, we managed to identify 10 commercial initiatives that drove higher upside delivery for GAB in FY15.

With more clarity on which channels to invest in, the business was well equipped to succeed despite the challenging market trends. Our focus was on driving accelerated growth in selective profitable channels while maintaining position in strong hold areas. Through this initiative, processes were streamlined, and sharper clarity was introduced to the commercial team which resulted in higher efficiencies within the business.

Optimising efficiencies in distribution management

We streamlined our distribution network by 23%, from 53 to 41 partners to drive efficiency across our entire value chain. The process was carried out through various assessments which were conducted internally and also through independent external parties. Distributors’ performance are measured based on their business growth, infrastructure capabilities, service quality and more importantly their shared vision to grow with GAB. To ensure a win-win partnership, we developed training opportunities to help our distributors streamline their distribution network and drive greater efficiencies in their operations processes, including warehouse management.

Driving efficiency and excellent execution in outlets

To increase efficiency in sales operations, we introduced a new application known as the Quick Business Report. With this new application, Sales personnel are able to generate daily business reports of trade partners with just a click of a button. Sales personnel are now better equipped on outlet achievements and are able to provide trade partners with the right advice.

In mid-FY15, we implemented the Excellent Outlet Execution (EoE) initiative. EoE is a holistic approach in ensuring that we optimise consumer experiences in all our trade outlets. Our focus moving forward is to excel in outlet execution, to drive distribution in all channels, increase brand presence and visibility, ensure product freshness and deliver a perfect serve in all outlets.

EFFICIENCIES ACHIEVED IN:

COMMERCIAL OPERATIONS

CLEARER VIEW OF “WHERE TO INVEST”

PRIORITISING INITIATIVES THAT HELPED DRIVE HIGHER UPSIDE DELIVERY IN FY15

FY15 KEY HIGHLIGHTS

DISTRIBUTION MANAGEMENT

STREAMLINEDISTRIBUTION NETWORK BY 23%INCREASED

TRAINING AND BUSINESS EFFICIENCIES ACROSS OPERATIONS, PROCESSES AND WAREHOUSE MANAGEMENT

INVENTORY STOCK MANAGEMENT

CLARITY, STANDARDISATION IN EXECUTION FOR

OPTIMAL CONSISTENTRESULTS

GUINNESS ANCHOR

BERHAD

pg.52

Page 55: GAB Annual Report for Bursa submission.pdf

IT HIGHLIGHTSProgressing through technology efficiencies

We invested and expended significant efforts to upgrade our IT systems accurately and smoothly. This was a key contributing factor to driving efficiencies across multiple facets of GAB and its business partners operations in FY15.

Optimising IT solutions

We launched a major business transformation programme, Project Breakout, which we believe will increase operational efficiencies across the entire value chain from our brewery right up to the outlets. The scope of the project encompasses sales force automation, a new robust system for our distributors, and improved systems for trade promotions and contract management.

Underpinned by new technology and re-engineering of business processes, the project will be implemented in phases over 12 months. We have been engaging closely with our operational stakeholders (Sales and Finance teams and distributors) to understand business needs, and will conduct comprehensive training and change management activities to ensure that the business is ready for the new systems and ways of working.

Workplace productivity

We upgraded the Wi-Fi services in our offices, operation facilities and warehouses to increase the accessibility and ease of information sharing, reduce general operational downtime and provide flexibility for employees to be linked to the system with instant uploads from any part of the office or facility.

GST achievement unlocked

As part of the GST-readiness exercise, IT played a key role in ensuring that system amendments and data migration were completed on time, and that our systems were ready for GST. We extended our IT support to our distributors – to assist them in engaging the right software providers for the upgrades of their systems for GST compliance.

An essential component to unlocking this achievement was the extension of the ‘hearing you’ approach, where a GST Forum was held to address the distributors’ concerns and needs for their IT infrastructure to be GST compliant.

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15

FY15 KEY HIGHLIGHTS

END-TO-END IT INFRASTRUCTURE, SYSTEMS AND SOFTWARETO SUPPORT SEAMLESSTRANSITION TO GSTFOR GAB AND DISTRIBUTORS

UPGRADED

WI-FI SERVICEIN ALL GAB OFFICES,OPERATION FACILITIES AND WAREHOUSES NATIONWIDE

EFFICIENCIES ACHIEVED THROUGH:

‘HEARING YOU’REVAMP OF GAB’SENTIRE IT SYSTEMBASED ON STAKEHOLDERS’ FEEDBACK

GUINNESS ANCHOR

BERHAD

pg.53

Page 56: GAB Annual Report for Bursa submission.pdf

CORPORATE RESPONSIBILITY HIGHLIGHTSEnriching communities

The sustainability of any business has to be cognisant of its place in the community in which it operates. For GAB, we placed importance on being a positive and responsible company.

We carry out our corporate social responsibility initiatives under three priorities - Environment, Education and Community. As a reputable and trusted company, we lead the responsible drinking agenda with our Drink Sensibly (DS) initiatives.

Here in this section, we provide a snapshot of how we continued to deliver on our Corporate Responsibility (CR) commitment in FY15. For more details of our initiatives, please refer to the Corporate Responsibility Report 2015.

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15 GUINNESS ANCHOR

BERHAD

pg.54

Page 57: GAB Annual Report for Bursa submission.pdf

GAB FOUNDATIONSet up in 2007, the Foundation focuses on three pillars that aim

to create a positive impact in the community we operate in

COMMUNITYEmployees participated in GAB Foundation’s activities to help enrich the local communities

FY15: EXPANDED TO 7TH STATE - JOHOR, Trained 58 teachers from 33 schools across Malaysia

EDUCATIONFlagship programme THE ENGLISH ENRICHMENT TRAINING PROGRAMME (EETP)

Ongoing SINCE 2012

Invested close to RM3 MILLION

Reached out to over 170 VENACULAR SCHOOLS and trained 270 TEACHERS which in turn benefitted more than 4,500 STUDENTS

DRINK SENSIBLYA platform for GAB to lead the responsible

consumption agenda

FY15: More than 3 MILLION PEOPLE reached through the DS festive campaign webisodes, “HOW TO PARTY SMART FOR A GREAT NIGHT OUT”

DS is present at all GAB brand events through an ON GROUND AND DIGITAL SOCIAL MEDIA DRIVE

Reached out to over 140,000 CONSUMERS AND 10,000 RETAIL FRONTLINE STAFF since 2011

More than 7,000 DOWNLOADS OF DS APP since it was introduced in 2012

DRINK SENSIBLY (DS) CAMPAIGNS

GAB’s flagship initiative to encourage responsible consumption in Malaysia.

Celebrated by OVER 81,000 HEINEKEN EMPLOYEES GLOBALLY, including GAB

REINFORCES THE RESPONSIBILITY of the Company and each employee in promoting responsible consumption to their stakeholders

ENJOY RESPONSIBLY DAY (ERD)

FY15: Introduction of Heineken's global ERD programme targeted for employees

• SUNGAI KINTA (SG. KINTA), PERAK - EDUCATION & AWARENESS

FY15: LAUNCHED FIRST RIVER CARNIVAL; reached out to more than 2,000 pax from over 40 schools, 18 communities, 10 businesses, local authorities, in a single day

3 YEARS RUNNING since 2012

Ongoing works, ALL KEY MILESTONESACHIEVED

Maintenance of 1 RIVER EDUCATION CENTRE

REPLICATE SUCCESSES from Sg. Way

ENVIRONMENT W.A.T.E.R PROJECT (2 RIVER PROJECTS)

• SUNGEI WAY (SG. WAY) - REHABILITATION & CONSERVATION

PIONEERPROGRAMMEongoing since 2007

WIDE-REACH, MULTI-ENGAGEMENT AND EDUCATION TOUCHPOINTSover 16,000 people to date including schools, businesses, communities, local authorities

Improved the Sungei Way river from Class IV-V(extremely polluted) toCLASS III (SUITABLE FOR LIVING ORGANISMS)

Maintanence of 2 RIVER EDUCATION CENTRES

FY15: Introduced the BUSINESS COMMUNITY TRAINING PROGRAMME 20 COMPANIES participated

Our ‘DS festive campaign’ was shortlisted for

‘BEST CONSUMER ENGAGEMENT’ at the 2015

ETHICAL CORPORATION BUSINESS AWARDS

OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15 GUINNESS ANCHOR

BERHAD

pg.55

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OPERATIONAL REVIEW: HOW WE RAISED THE BAR IN FY15

FY15 KEY HIGHLIGHTSHUMAN RESOURCES HIGHLIGHTSBuilding a “Great Place to Work”

Employees are a key priority in GAB. Fundamental to our culture is the belief that every employee has a role to play in the success of GAB. In FY15, we intensified our internal efforts through two main platforms - engagement and capability development. An area of focus was developing and enhancing employee skill sets, be it on the technical front, or for professional and personal career development.

Engaging our employees

We continue to build an engaging and supportive culture that enables our employees to succeed in their roles.

New hires are engaged from the first day through our onboarding programme where they are provided with the right information and support that will help them transition smoothly into their roles.

Integrity is a behavior expected from GAB employees. To help employees have a clearer understanding on what is the right-thing-to-do, we revamped our Code of Conduct and simplified the guidelines, language and tone to ensure that it is easily understood. We also introduced a breach reporting channel called Speak Up that allows employees to report non-compliance issues anonymously without any fear of reprisal.

To gain more insight on what our employees think about the Company, we further enhanced our annual Employee Climate Survey by improving our questions and benchmarking it against the industry standards.

Developing talent

In FY15, we initiated the Supply Chain Technical Trainee Programme to build GAB’s Supply Chain talent pool for future business needs. This key initiative focuses on equipping the trainees with the necessary technical skills and to nurture them to be future supervisors within the various functions of Supply Chain.

We recognise that senior leadership capability is important to business sustainability and driving the right behaviours. As such, we developed a programme to help our senior managers have more effective coaching conversations with their teams.

NEW SUPPLY CHAIN TECHNICAL TRAINEE PROGRAMME TO SUPPORT FUTURE TALENT NEEDS

STRENGTHEN CULTURE OF COMPLIANCE WITH THE REVAMPED

CODE OF CONDUCT AND A NEW CHANNEL FOR

BREACH REPORTING

INTRODUCED

COACHING PROGRAMME FOR ALL SENIOR MANAGERS

ENHANCED ANNUAL EMPLOYEE

CLIMATE SURVEY TO BETTER UNDERSTAND EMPLOYEES’ LEVEL OF ENGAGEMENT

UPGRADED

ONBOARDING EXPERIENCE WITH TOOLKITS FOR MANAGERS AND NEW INDUCTION PROGRAMME FOR NEW HIRES

GUINNESS ANCHOR

BERHAD

pg.56

Page 59: GAB Annual Report for Bursa submission.pdf

STATEMENT ON CORPORATE GOVERNANCE

THE BOARD OF DIRECTORS (THE BOARD) OF GUINNESS ANCHOR BERHAD (GAB OR THE COMPANY) IS COMMITTED TO ENSURING

THAT HIGH STANDARDS OF BUSINESS ETHICS AND CORPORATE GOVERNANCE ARE PRACTISED THROUGHOUT THE COMPANY

AND ITS SUBSIDIARIES (THE GROUP) THROUGH THE IMPLEMENTATION OF EFFECTIVE POLICIES AND ADOPTION OF GOOD

GOVERNANCE PRACTICES. THE COMPANY ADHERES TO THE PRINCIPLES OF GOOD CORPORATE GOVERNANCE WHICH HAS

HELPED IN CONTRIBUTING TOWARDS THE ACHIEVEMENT OF THE GROUP’S STRATEGIC GOALS AND VALUES IN BUSINESS. THIS

HAS LED THE GROUP TO ACHIEVE LONG TERM SUSTAINABLE FINANCIAL PERFORMANCE AND GROWTH.

The principles adopted by the Company are in line with the principles and recommendations stipulated in the Malaysian Code on Corporate Governance 2012 (CG Code).

This Corporate Governance Statement outlines the Company’s application of the underlying principles and recommendations provided in the CG Code, the key elements and the state of corporate governance practices of the Company.

GUINNESS ANCHOR

BERHAD

pg.57

Page 60: GAB Annual Report for Bursa submission.pdf

1. ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT

1.1 Clear Functions of the Board and Management

The Board’s role is to lead and control the Group’s business and affairs on behalf of shareholders. The Board takes into consideration the interests of all stakeholders in their decision making so as to ensure the Group’s objectives of creating long term shareholder value are met. The Board also oversees the Group’s performance and operations progress towards the corporate objectives.

The Board delegates the authority and responsibility for managing the day-to-day operations of the Group to the Management Team led by the Managing Director. The Management Team is also responsible for the implementation of business plans and strategies, policies and decisions approved by the Board and communicating matters to the Board. The responsibilities and authorities of the Management Team are clearly defined in the Group’s Policies and Procedures Manual.

There is a schedule of key matters reserved specifically for the Board deliberation and decision to ensure the direction and control of the Group are in its hands. They include, amongst others:

• Appointment of Directors and Chairman • Establishment of Board Committees, their membership

and delegated authorities • Appointment of key management positions including

Managing Director and Finance Director• Business strategy formulation and planning• Decision on emerging business issues• Challenges arising from regulatory changes and changes

in business environment• Approval of the remuneration structure and policy

for executive director and where appropriate, senior management based upon recommendations of the relevant Board Committee

• Succession planning for Managing Director and Senior Management

• Payment of interim dividend and recommendation of final dividend for shareholders’ approval

• Decision on material transactions / major investments and matters that have significant impact to the Group

• Major capital expenditure, acquisitions or disposal of a business or assets in excess of authority levels delegated to Management

• Changes to management and control structure of the Group, including key policies and authority limits

1.2 Principle Responsibilities of the Board

The Board has the overall responsibility in leading and determining the Group’s strategic direction. It provides an effective oversight of the conduct of the Group’s businesses, ensuring an appropriate risk management and internal control system is in place as well as regularly reviewing such system to ensure its adequacy and integrity.

The Board assumes the following principal responsibilities in discharging its fiduciary and leadership functions:

• Reviewing and adopting a strategic plan for the Company;• Overseeing the conduct of the Company’s business to

evaluate whether the business is being properly managed;• Identifying principal risks and ensuring the implementation

of appropriate internal controls and mitigation measures;• Succession planning, including appointing, training, fixing

of compensation and where appropriate, replacing Senior Management;

• Overseeing the development and implementation of an investor relations programme and shareholder communications policy for the Company; and

• Reviewing the adequacy and the integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

The Board has delegated specific responsibilities to Board Committees, each with defined terms of reference and responsibilities. The Board receives reports of their proceedings and deliberations. Where committees have no authority to make decisions on matters reserved for the Board, recommendation would be presented to the Board for approval. The Chairman of the various committees report the outcome of the committee meetings to the Board and relevant decisions are recorded in the minutes of the Board of Directors’ meetings.

1.3 Ethical Standards and Code of Conduct

The Group has in place a Code of Conduct which governs the conduct of all the GAB Group employees including the Board members. It sets out principles on conducting business and dealings with business partners, customers, government and community and general work place behavior. It also provides guidance on maintaining confidentiality and disclosure of information, disclosure of conflict of interest, internal control, anti-competition practices, duty to protect the Group’s assets and to report where there is a breach of the Group’s policies and procedures. During the financial year 2015, an e-learning session has been rolled out to all employees to raise awareness and assess employees’ understanding on the Code of Conduct. It is compulsory for all employees to complete the e-learning module.

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The Company has also in place a Vendor Code which outlines the Company’s expectations of the Group’s suppliers and service providers in respect of the commercial requirements, labour standards and policies, environmental policies, health and safety regulations, applicable laws as well as the standard for ethical and business conduct in their business relationship with the Group. The Group engages the suppliers and service providers to raise their awareness on the Group’s expectation on the standards of business ethics and to review their performance based on the obligations committed to the Group.

The Company has also adopted the Malaysian International Chamber of Commerce and Industry’s Ethics Charter since 2006. The Company strives to abide by the guide when conducting business while pursuing its corporate and business interests with VIGOUR, which represents the business values of Value Creation, Integrity, Governance, Obligation, Understanding and Responsibility.

During the financial year 2015, a Controls, Compliance and Ethics (CC&E) Team was established to replace the Compliance Champion Workgroup (CCW). The Team is responsible for overseeing compliance of the Group’s processes and ethics in its day-to-day operations and implementing relevant programme to inculcate compliance culture within the organisation.

The Group has a Speak Up policy that provides an avenue for employees, suppliers and business partners to raise concerns through approved channels about unethical practices affecting GAB without repercussions, in a safe and confidential manner. Concerns can be reported anonymously through a Speak Up hotline / link / email managed by an independent external service provider appointed by the Company, as well as an internal email channel managed by the CC&E Team. A Speak Up Workgroup comprising the Head of Compliance, Head of Internal Audit and Head of Industrial Relations of GAB has been established. They are responsible to ensure that a credible investigation process will follow on the receipt of a report and that any confirmed wrong doing will be remedied.

1.4 Strategies Promoting Sustainability

The Board is committed to implementing responsible and sustainable corporate practices that maintain the equilibrium between the Company’s bottom line performance and environmental and social performance. GAB has fully embraced good corporate responsibility practices in the areas of stakeholder engagement, community, workplace, marketplace and environment. Every business decision that the Group makes pertaining to growth and profitability is consistent with its social and environmental goals for

sustainability. The corporate responsibility activities are disclosed in a separate report titled Corporate Responsibility Report which is attached to this Annual Report.

1.5 Access to Information

The Board recognises the importance of providing timely, relevant and up-to-date information in ensuring an effective decision making process by the Board. In this regard, the Board is provided with not only quantitative information but also those of qualitative nature which is pertinent to enable the Board to discharge its duties effectively.

Prior to the scheduled Board / Board Committee meeting, the Directors will be provided a structured agenda together with comprehensive management reports and proposal papers on a timely manner. Management reports presented to the Board include the following information:

• Business and financial performance of the Group• Productivity and product quality measures• Marketing and sales activities• Market developments and consumer trends• Developments on human resources• Environmental and industry issues• Legal and regulatory matters• Developments on IT systems

Where necessary, members of the Management Team will be invited to attend Board / Board Committee meetings to report and update on areas of the business within their responsibility to provide Board members with insights into the business, and clarify any issues raised by the Directors in relation to the Group operations. Directors are encouraged to share their views and insights in the course of deliberation and to partake in discussions.

All issues discussed and all decisions made during the Board/Board Committee Meeting will be properly recorded by the Company Secretary. Minutes of Board Meetings are circulated to all Directors for their perusal prior to it being tabled for confirmation at the following Board Meeting. Upon receiving confirmation from all the Board members, the minutes will be signed by the Chairman of the meeting as a correct record of the proceedings of the meeting. Decisions made and policies approved by the Board will be communicated to the Management Team for action after the meeting.

The Board is also regularly updated and kept informed of the latest developments in the legislation and regulatory framework affecting the Group.

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1.6 Access to Management, Company Secretary and Independent Advisers

All Directors have unrestricted and constant access to and interaction with the Management Team on issues under their respective purview. The Directors are regularly updated on the Company’s performance and major developments concerning the Group’s operations.

The Directors also have unrestricted access to the advice and services of the Company Secretary. The Company Secretary advises the Board on any new statutory and regulatory requirements relating to corporate governance. The Company Secretary, who is qualified, experienced and competent, organises and attends all Board and Board Committees meetings and ensures meetings are properly convened; accurate and proper records of the proceedings and resolutions passed are maintained accordingly. The removal of Company Secretary, if any, is a matter for the Board to decide collectively.

The Board, whether as a full Board or in their individual capacity, may seek independent professional advice on specific issues at the Company’s expense, where necessary, to enable them to discharge their duties.

1.7 Board Charter

The Board is guided by the terms of reference which sets out the principles and processes in the discharge of their responsibility. It provides the Board strategic intent and outlines the Board’s roles and responsibilities, the Board’s rights to establish committees to assist in the discharge of its duties and its meetings requirements.

The Board’s terms of reference is accessible in GAB’s corporate website: www.gab.com.my

2. STRENGTHEN COMPOSITION OF THE BOARD

2.1 Nomination and Remuneration Committee

The Company had two separate committees i.e. Nomination Committee and Remuneration Committee. The Nomination Committee was responsible to oversee selection and assessment of Directors for appointment / re-appointment to the Board and Board Committees whilst the Remuneration Committee was responsible for matters concerning the Group’s remuneration policy and practices for employees and the Company Directors respectively.

On 1 November 2014, the Nomination Committee and the Remuneration Committee were merged and reconstituted as a single committee known as Nomination and Remuneration Committee (NRC). As of 9 October 2015, the combined committee comprises entirely of Non-Executive Directors with majority being Independent, as follows:

• Datuk Seri Saw Choo Boon (Chairman, Independent

Non-Executive Director) – Re-designated as Chairman of NRC on 9 October 2015

• Datin Ngiam Pick Ngoh, Linda (Independent Non-Executive Director)

• Martin Giles Manen (Senior Independent Non-Executive Director) – Appointed on 9 October 2015

• Kenneth Choo Tay Sian (Non-Independent Non-Executive Director) – Appointed on 9 October 2015

Notes: The former Chairman of NRC, Dato’ Syed Salleh bin Syed Othman passed away on

15 August 2015. Michiel Egeler and Apurvi Haridas Sheth @ Apurvi Sheth Murpuri ceased as

members of the NRC on 18 August 2015 and 7 October 2015 respectively.

The activities carried out by the separate committees during the financial year 2015 are set out below:

Nomination Committee

Prior to its merger with the Remuneration Committee, the Nomination Committee had five members including a Chairman and two Directors who are Independent Directors of the Company. Between 1 July 2014 to 31 October 2014, the Nomination Committee met once with a 100% attendance rate. At the meeting, the Nomination Committee reviewed the following matters:

• The effectiveness of the size, mix and the composition of the Board and Board Committees

• The contribution of individual Directors in relation to the effective decision-making of the Board

• The independence of Independent Directors• The re-nomination of the Directors who were due for

retirement at the Company’s Annual General Meeting (AGM)

• Training requirements for Board members to upgrade their skills in enhancing their effective contribution

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Remuneration Committee

Prior to its merger with the Nomination Committee, the Remuneration Committee had four members who are all Non-Executive Directors of the Company. Between 1 July 2014 to 31 October 2014, the Remuneration Committee met once with a 100% attendance rate. At the meeting, the Remuneration Committee deliberated the following matters:

• Payment of performance bonus for the Group Senior Management and Management employees

• Salary increment, performance bonus KPIs and structure for Management staff

Nomination and Remuneration Committee (NRC)

The roles and responsibilities of the NRC include the following:

Concerning Board and Board Committees’ Appointment and Evaluation

(i) To recommend to the Board, candidates for all directorships of the Company and its subsidiaries to be filled by the nominees of the major shareholders or the Board of the Company for any vacancies on the Boards of the Company and its subsidiaries;

(ii) To consider, in making its recommendations, candidates for directorships proposed by the Managing Director and within the bounds of practicability, by any other senior executive or any director or shareholder;

(iii) To recommend to the Board on the establishment of new committees or the dissolution of any existing committees of the Board which no longer serves its purpose;

(iv) To recommend to the Board to fill the seats on any Board Committees;

(v) To evaluate the performance and effectiveness of the Board and the Board Committees of the Company annually;

(vi) To assess the independence of Independent Directors of the Company annually;

(vii) To identify training requirements for the Directors to ensure they receive appropriate continuous training programmes to keep abreast with the developments in the industry and with changes in the regulatory requirements; and

(viii) To ensure succession plans and policies are formulated for the Group.

Concerning remuneration

(i) To recommend to the Board a competitive compensation and remuneration package for Managing Director / Executive Directors and Senior Management employees in order to attract and retain outstanding individuals with the skills and experience needed to manage the Group’s business successfully;

(ii) To recommend to the Board a competitive remuneration package for Non-Executive Directors in order to attract and retain outstanding individuals of integrity, caliber, credibility and who have the necessary skills and experience to bring an independent judgement to bear on the issues of strategy, performance and resources for the success of the Group; and

(iii) To review and recommend the annual compensation and rewards for all individual Directors and Senior Management employees based on their KPI achievements.

2.2 Recruitment of Directors and Annual Assessment

Appointments and Re-election to the Board

The NRC is empowered to identify and recommend to the Board, candidates for new appointments to the Board. There are specific criteria for assessing candidature for directorship. The suitability of a candidate will be assessed by taking into consideration the individual’s background, competencies, knowledge, expertise and experience, personal qualities and commitment. Considerations will also be given on whether the candidate meets the requirements for independence as defined in the Bursa Securities Main Market Listing Requirements; the candidate’s understanding of the Group business and market; and factors that promote boardroom diversity, including gender diversity and other qualities of the Board. The NRC is also responsible to ensure that the procedures for appointing new Directors are transparent and that appointments are made on merit.

The Company’s Articles of Association provides that the total number of Directors shall not be less than two nor more than 12. The Board may appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors, but the total number of Directors shall not exceed the said limit. Any new Director appointed by the Board during the year shall hold office only until the next AGM of the Company and shall be eligible for re-election.

The Company’s Articles of Association further provides that one-third of the Directors shall retire from office by rotation at each AGM and all Directors, including the Managing Director, shall retire from office at least once every three years but shall be eligible for re-election. A Director seeking re-election or re-appointment shall abstain from all deliberations regarding his/her re-election or re-appointment to the Board.

Pursuant to Section 129 of the Companies Act, 1965, Directors who are of the age of 70 and above shall retire at every AGM and may offer themselves for re-appointment to hold office until the next AGM.

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The NRC will review and assess annually the re-election / re-appointment of retiring Directors who seek re-election / re-appointment at the Company’s AGM. In determining whether to recommend a Director for re-election or re-appointment, the Director’s effectiveness and contribution to the activities of the Board will be duly considered by the NRC. The NRC will thereupon submit its recommendation on the proposed re-election / re-appointment of Directors to the Board for consideration before tabling the same for shareholders’ approval.

The following Directors are due to retire at the coming AGM. They have offered themselves for re-appointment / re-election:

Pursuant to Article 89 of the Company’s Articles of Association• Hans Essaadi• Datin Ngiam Pick Ngoh, Linda

Pursuant to Article 96 of the Company’s Articles of Association• Yong Weng Hong• Frans Erik Eusman

The re-appointment / re-election of the above Directors will be tabled for shareholders’ approval at the coming AGM to be held on 25 November 2015.

Annual Assessment

The NRC conducts the Board Effectiveness Evaluation via questionnaires, which comprises Board and Board Committees effectiveness assessment and Directors self and peer assessment. The NRC assesses the effectiveness in terms of composition, conduct, accountability and responsibility of the Board and Board Committees in accordance with the terms of reference. The Directors self and peer assessment is conducted to evaluate the mix of skills, experience and the individual Director’s ability to contribute to the development of strategy and exercise independent judgement towards the effective functioning of the Board. The NRC also evaluates the independence of Independent Directors based on the criteria of “Independence” as prescribed by the Bursa Securities Main Market Listing Requirements.

The evaluation process is led by the NRC Chairman with the support from the Company Secretary. The NRC will review the feedback gathered from the evaluation; identify areas for improvements to enhance the effectiveness of the Board and recommend actions to be taken by the Board.

The NRC, pursuant to its recent annual evaluation, was satisfied that the current size and composition of the Board is appropriate and well-balanced with the right mix of skills and experience and that the Board has adequate independent element that reflects the interest of minority shareholders and

provides an effective check and balance. The NRC was also satisfied that the Board comprises individuals of caliber and creditability with necessary skills and qualifications which will enable the Board to discharge its responsibility effectively. Through the Directors self and peer assessment, the Non-Executive Directors have indicated their satisfaction with the level of independence of each of their peers and their ability to act in the best interest of the Company in decision-making.

Directors’ Remuneration

The Group has adopted a formal procedure to determine the remuneration of the Directors so as to ensure that the Company attracts and retains the Directors needed to run the Group successfully. In the case of the Managing Director, the component parts of his remuneration are structured so as to link rewards to corporate and individual performance. In the case of Non-Executive Directors, their remunerations reflect the experience, level of responsibilities and contributions and the time spent in attending to the Group matters.

Remuneration Policy

The current remuneration policy for the Directors is as follows:

(a) Remuneration Package for Managing Director / Executive Directors

The NRC is guided by the compensation framework of the Heineken Group, which is an indirect major shareholder of the Company. The remuneration package of the Managing Director / Executive Directors consists of both fixed and performance-linked elements. The performance of the Managing Director / Executive Directors is reviewed annually taking into consideration the corporate and individual performance.

(b) Fees and Allowances for Non-Executive Directors

The fees and allowances payable to the Non-Executive Directors are determined by the Board as authorised by the shareholders of the Company. All Non-Executive Directors are paid annual fixed Director fees for serving as members of the Board. In addition, they are also paid meeting attendance allowances for each meeting they attend. The Chairmen of the Board Committees also receive an annual fixed allowance for the additional time and commitment required. Information from independent sources and survey data on the remuneration practices of comparable companies are considered in determining the remuneration package for the Non-Executive Directors.

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The Board, based on the recommendation of the NRC, proposed to adjust the current remuneration for the Non-Executive Directors as follows:

RM

Current Proposed

Annual fee for Non-Executive Director 60,000 75,000

Annual fee for Audit Committee member Nil 5,000

Annual fee for NRC member Nil 4,000

Annual allowance for Audit Committee Chairman 6,500 8,000

Annual allowance for NRC Chairman 4,000 6,000

Annual allowance for Board Chairman 100,000 No change

Meeting allowance(per meeting attended) 1,200 No change

The total remuneration payable for the financial year ending 30 June 2016 is estimated to be around RM685,000, calculated based on the above proposal and the current composition of the Board and Board Committees. The proposed adjustment will enhance the Board’s ability to attract and retain Directors of high calibre with the necessary skills and experience to drive the Group’s success. It is also to align the Directors’ remuneration of the Company to other fast-moving consumer goods companies.

The above proposed adjustment will be tabled for shareholders’ approval at the Company’s 51st AGM.

(c) Bonus Scheme

The Group sets up a bonus scheme for all employees including the Managing Director / Executive Directors. The criteria for the scheme is the performance achieved from the Group’s businesses against targets, together with an assessment of each individual’s performance. Bonus payable to Managing Director / Executive Directors will be reviewed by the NRC and is subject to the Board’s approval.

(d) Benefits in Kind

Certain customary benefits (such as motor vehicles, mobile phones and club memberships) are made available to the Chairman of the Board and the Managing Director / Executive Directors of the Company in accordance with the Company’s policies.

(e) Contribution to Employees Provident Fund

Contributions will be made to the Employees Provident Fund for Managing Director / Executive Directors who are Malaysian citizens.

Details of the Directors’ Remuneration

The details of the remuneration paid to Directors (including former Directors of the Company) for the financial year ended 30 June 2015 are as follows:

Remuneration

Financial year ended30 June 2015

Executive Director

Non-Executive Directors

RM RM

Fees & Chairman allowance - 590,499

Meeting attendance allowance - 97,200

Benefits in kind* 581,901 12,881

Salary & Other emoluments** 1,359,225 -

Total 1,941,126 700,580

Notes:* Benefits in kind include rental payments, motor vehicles, club memberships

and personal expenses ** Other emoluments include bonuses, incentives, retirement benefits, provisions

for leave and allowances.

The number of Directors of the Company (including former Directors of the Company) whose total remuneration including benefits-in-kind for the financial year ended 30 June 2015 which fall within the required disclosure bands are as follows:

Range of Remuneration

Financial year ended30 June 2015

RMExecutive

Director

Non-ExecutiveDirectors

50,001 - 100,000 - 7

150,001 – 200,000 - 1

1,900,001 - 1,950,000 1 -

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3. INDEPENDENT DIRECTORS

3.1 Assessment of Independent Directors

The Independent Non-Executive Directors play an important role in bringing impartiality and scrutiny to Board deliberations and decision-making, and also serve to stimulate and challenge the Management in an objective manner. They do not participate in the day-to-day management of the Company and do not involve themselves in business transactions or other relationship which could materially compromise their independent judgement. The decisions are arrived at after taking into account the long term interests, not only of the shareholders, but also of employees, customers, suppliers, and the many communities in which the Group conducts its business.

The four Independent Non-Executive Directors who served on the Board during the financial year 2015, fulfill the criteria of independence as defined in the Bursa Securities Main Market Listing Requirements. The Company meets the minimum requirement prescribed by the Bursa Securities Main Market Listing Requirements to have at least one-third of the Board comprised of Independent Non-Executive Directors.

The Chairman of the Audit Committee, Martin Giles Manen, is the designated Senior Independent Non-Executive Director, to whom concerns pertaining to the Group may be conveyed by shareholders and other stakeholders.

3.2 Tenure of Independent Directors

The Company does not have term limits for Independent Directors but the Board does evaluate the contribution and the tenure of the Independent Directors. The Board believes that valuable contribution can be obtained from Directors who have, over a period of time, developed valuable insight of the Company and its business. Their experience enables them to discharge their duties and responsibilities independently and effectively in the decision making processes of the Board notwithstanding their tenure on the Board. The Board therefore was of the view that imposing a fixed term limit for Independent Directors does not necessarily promote independence and objectivity.

3.3 Re-appointment of Independent Director who has served for nine years or more

As of 9 October 2015, none of the existing Independent Directors have served on the Board for a cumulative term of nine years or more.

3.4 Separation of positions of the Chairman and Managing Director

There is a clear division of responsibility between the Chairman and the Managing Director to ensure that there is a balance of power and authority in the Board, such that no one individual has unfettered powers of decision-making. The Chairman of the Board is primarily responsible for ensuring the effective functioning of the Board and leading the Board in the oversight of management. He engages directly with the Managing Director to monitor performance and oversees the implementation of strategies.

The Managing Director is responsible for the day-to-day management of the Group operations and business as well as implementation of business plans and strategies, policies and decisions approved by the Board.

3.5 Board Composition and Balance

As of 9 October 2015, the Board comprises of seven members, of whom three (including the Chairman) are Independent Non-Executive Directors, three are Non-Independent Non-Executive Directors, and one is an Executive Director. The Board considers various aspects of diversity when assessing the Board’s size and mix each time a vacancy arises.

The Board believes that the size of the Board is optimum in that it has an appropriate mix of relevant skills, knowledge and experience which commensurate with the complexity, scope and operations of the Group. It also has a balanced composition with adequate Board independence that represents the minority interest.

A brief profile of the Board members is presented on pages 22 to 25 of this Annual Report.

4. DIRECTORS’ COMMITMENT

4.1 Time Commitment

The annual meetings schedule which sets out the dates for meetings of the Board, Board Committees and shareholders, as well as the closed period for dealings in the Company’s stocks by Directors based on the targeted date of announcement of quarterly results of the Group, is prepared and circulated to Directors before the beginning of each year to facilitate the Directors to plan ahead.

The Board meets on a quarterly basis. Additional meetings are convened as and when necessary, to consider urgent proposals or matters that require the Board’s consideration.

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The Board met four times during the financial year ended 30 June 2015 and attendance of Directors at Board meetings, was as follows:

Name Attendance

Datuk Seri Saw Choo BoonChairman, Independent Non-Executive Director 4 / 4Hans EssaadiManaging Director 4 / 4Martin Giles ManenSenior Independent Non-Executive Director 4 / 4Datin Ngiam Pick Ngoh, LindaIndependent Non-Executive Director 4 / 4Kenneth Choo Tay SianNon-Independent Non-Executive Director 4 / 4Dato’ Syed Salleh bin Syed Othman Independent Non-Executive Director (Passed away on 15 August 2015) 4 / 4Michiel EgelerNon-Independent Non-Executive Director (Resigned on 18 August 2015) 4 / 4Apurvi Haridas Sheth @ Apurvi Sheth Mirpuri Non-Independent Non-Executive Director (Resigned on 7 October 2015) 3 / 4Alvaro Andres Cardenas Munoz Non-Independent Non-Executive Director (Resigned on 7 October 2015) 4 / 4

Notes: Yong Weng Hong and Frans Erik Eusman were appointed to the Board after the

financial year ended 30 June 2015.

At Board meetings, the Board reviews Management reports on the business and financial performance of the Group and discusses major operational and financial issues. Off-site Board meeting to discuss specific topics will be arranged, when necessary, to facilitate more time for discussion and view sharing.

Directors are encouraged to pose queries (if any) to Management prior to each Board meeting to enable them to better prepare for the meeting.

Directors are expected to devote sufficient time and effort to carry out their responsibilities. The Board will seek commitment from Directors at the time of appointment. Directors are advised to notify the Chairman / Board before accepting any new directorship.

4.2 Directors’ Training and Induction

Any Director appointed to the Board is required to complete the Mandatory Accreditation Programme (MAP) within four months from the date of appointment. The newly appointed Directors, namely Yong Weng Hong and Frans Erik Eusman will complete the MAP within the required timeline.

Induction programme is arranged for newly appointed Directors to enable them to have a full understanding of the nature of the businesses, current issues within the Group and corporate strategies as well as the structure and management of the Group.

The Company Secretary organises and coordinates training programmes for the Directors. The Directors may request to attend other training courses according to their needs from time to time to keep abreast with relevant changes in laws and regulations, and the business environment.

During the financial year ended 30 June 2015, the Directors attended external training programmes including seminars and conferences in the areas of commercial, corporate governance, risk management, legal and regulatory framework, leadership and management, economic and financial.

The Directors are mindful of the need to continue to refresh their skills and knowledge to assist them in the discharge of their duties as Directors. The Board will, on a continuous basis, evaluate and determine the training needs of the Directors.

5. INTEGRITY IN FINANCIAL REPORTING

5.1 Financial Reporting

In presenting the quarterly financial reports and the annual financial statements to shareholders and investors, the Board is committed to providing a clear, balanced and meaningful assessment of the Group’s financial position and prospects.

The Board, assisted by the Audit Committee, oversees the financial reporting of the Group. The Audit Committee reviews the Group’s quarterly financial reports and annual financial statements, the appropriateness of the Group’s accounting policies and the changes to these policies to ensure that these financial statements comply with accounting standards and regulatory requirements.

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The Management Discussion and Analysis and the message from the Chairman and the Managing Director in this Annual Report provide additional analysis and commentary on the state of the Group’s business. The Statement by Directors pursuant to Section 169 of the Companies Act, 1965 is set out in the Financial Statements section of this Annual Report.

As required by the Companies Act, 1965, the Directors are

responsible for ensuring that the financial statements of the Group are prepared in accordance with the requirements of the applicable approved accounting standards in Malaysia, provisions of the Companies Act, 1965 and the Bursa Securities Main Market Listing Requirements, and give a true and fair view of the financial position of the Group at the end of the financial year.

The Directors are satisfied that in preparing the financial statements for the financial year ended 30 June 2015, the Group has adopted and applied consistently appropriate accounting policies, supported by reasonable and prudent judgements and estimates; and implemented relevant internal controls to ensure the financial statements are free from material misstatement. The Directors also consider that all applicable approved accounting standards in Malaysia have been adopted and the financial statements have been prepared on a going concern basis.

Related Party Transactions

The Group has in place a Related Party Policy and established the appropriate procedures to ensure that the Company meets its obligations under the Bursa Securities Main Market Listing Requirements relating to related party transactions. All related party transactions are reviewed by the sub-committee appointed by the Audit Committee and the same will be reported to the Audit Committee and the Board on a quarterly basis.

Where any Director who has an interest (direct or indirect) in

any related party transaction, such Director shall abstain from deliberation and voting on the resolution of such transaction at the Audit Committee and the Board meetings.

The shareholders’ mandate in respect of recurrent related party transactions is obtained at the AGM of the Company on a yearly basis. The recurrent related party transactions entered into by the Group with its related parties during the financial year ended 30 June 2015 were for the purchase of manufacturing and marketing materials, payment of engineering, technical, marketing and advertising services fees, payment of royalties for licences to brew our products and the sale and purchase of beverage products.

Details of these transactions are set out under Note 24 of the Audited Financial Statements in this Annual Report.

5.2 Suitability and Independence of External Auditors

The Board through the Audit Committee has established a transparent and professional relationship with the Group’s external auditors. The Audit Committee has explicit authority to communicate directly with external auditors.

The Audit Committee meets with the external auditors at least

twice a year to discuss their audit plans and audit findings in relation to the Group’s financial statements. Prior to some Audit Committee meetings, private sessions between the Audit Committee and the external auditors were held without the presence of the Managing Director, the Management and the Head of Internal Audit to discuss the audit findings and any other observations they may have had during the audit process. In addition, the external auditors are invited to attend the AGM of the Company and are available to answer shareholders’ queries on the conduct of the statutory audit and the preparation and content of their audit report.

The Audit Committee is responsible for approving audit and non-audit services provided by the external auditors. In approving such services, the Audit Committee ensures that the independence and objectivity of the external auditors are not compromised. The external auditors are engaged mainly to perform statutory audit on the Group’s financial statements. The external auditors also undertake certain non-audit services such as review of the breakdown of realised and unrealised gains / losses, review of the Statement on Risk Management and Internal Control and other services provided in relation to commercial activities carried out by the Group.

The external auditors have confirmed that there were no circumstances and relationship that create threats to their independence and that the ethical requirements have been complied with. In compliance with the requirements of the Malaysian Institute of Accountants, the external auditors rotate their audit partners assigned to the Group every five years.

Further information on the role of the Audit Committee in relation to the external auditors is stated under section B of the Audit Committee Report.

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6. RISK MANAGEMENT AND INTERNAL CONTROLS SYSTEM

6.1 Risk Management Framework

The Audit Committee assists the Board by providing an objective review of the effectiveness and efficiency of the Group’s internal control, risk management and governance framework.

The Group has in place a continuous and systematic process for identifying, evaluating and managing the principal risks that may affect the achievement of its business objectives. This process is embedded into the Group’s culture, people, strategy, processes and structures and is reviewed by the Board via the Audit Committee to ensure the adequacy and integrity of the system. The key features of the Risk Management Framework are set out in the Statement on Risk Management and Internal Control.

6.2 Internal Audit Function

The Board acknowledges its responsibilities for the Group’s system of internal control covering not only financial controls but also operational and compliance controls as well as risk management. The internal control system involves each business and key management from each business, including the Board, and is designed to meet the Group’s particular needs and to manage the risks to which it is exposed. The system can therefore only provide reasonable, and not absolute, assurance against material misstatement or loss.

The Group’s Internal Audit provides independent and objective reports on the Group’s management, records, accounting policies and controls to the Audit Committee. The internal audits include evaluation of the processes by which risks are identified, assessed and managed and ensure that controls which are instituted are appropriate and can effectively address acceptable risk exposures. The Group’s Internal Audit also ensures that recommendations to improve controls are followed through by the Management.

The Statement on Risk Management and Internal Control, which provides an overview of the state of internal controls within the Group, is presented on page 73-76 of this Annual Report.

STATEMENT ON CORPORATE GOVERNANCE

7. STRENGTHEN RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

The Group recognises the importance of being accountable to its shareholders and investors, as such; it maintains an active and proactive communication approach with its shareholders and investors. The Group firmly believes that prompt and timely information should be provided to shareholders and investors to enable them to make informed investment decisions. Information is provided through readily accessible channels such as corporate website, investors briefing and AGM.

Dissemination of Information

The Company communicates with its shareholders and stakeholders through the timely release of financial results on a quarterly basis, annual report, press releases and announcements to Bursa Securities. Such information is also published on the corporate website www.gab.com.my which is accessible by investors and the general public.

During the financial year ended 30 June 2015, the Company refreshed its corporate website which aimed at providing comprehensive information through well-structured content and enhanced navigational features for the benefit of our stakeholders. The corporate website also allows investors and the general public to inquire about investor relations matters, provide feedback and post queries or concerns regarding the Group. The Company will review each electronic mail received and respond accordingly to its stakeholders in a timely manner.

Investors Relations

The Company holds post-announcement of results briefings and discussions with investment analysts, fund managers, institutional investors and the media. The briefings, which are conducted by the Managing Director and the Finance Director, are intended not only to promote the dissemination of the financial results of the Group but to keep the investing public and other stakeholders informed on the progress and development of the Group’s business. During the year under review, four briefing sessions were held.

In addition, the investors relations personnel meets with equity research analysts, fund managers, institutional shareholders and investors on a one-on-one basis during the Company’s open period. Presentations are made to provide comprehensive insights into the Group’s business strategy, performance and major developments of the Group’s business activities. In these meetings, the Management also addresses queries / concerns raised with regards to the Group performance, market outlook, business operations and other matters affecting shareholders’ interests.

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STATEMENT ON CORPORATE GOVERNANCE

While the Company endeavours to provide as much information as possible to its shareholders and stakeholders, the Board is mindful of ensuring all shareholders are treated equitably. Undisclosed material information about the Company will not be disclosed on an individual or selective basis to any person unless such information has previously been fully disclosed and disseminated to the public.

AGM

The AGM is a principal platform for open communication between the shareholders, Directors and Senior Management of the Company. Notice of the AGM is sent to shareholders at least 21 days ahead of the meeting date together with the Annual Report that contains the audited financial statements and information on the rationale of any proposed resolution under the special business agenda to assist shareholders in deciding how they should vote on each agenda item. The notice of meeting is also posted on the Company’s corporate website and advertised in a local daily newspaper.

At each AGM, a comprehensive review of the progress and performance of the Group’s business together with an overview of the Group’s activities will be presented to shareholders. Shareholders are given opportunities to participate in the question and answer session on the proposed resolutions and the Group’s operations. The Chairman, Managing Director and the Finance Director are available to respond to shareholders’ queries during the meeting. Where appropriate, a written response will be provided to any significant question that cannot be readily answered at the meeting.

At the 50th AGM of the Company held on 28 November 2014, in

addition to the above, the Company also shared its response to the questions submitted in advance by the Minority Shareholder Watchdog Group. All resolutions put forth for shareholders’ approval at the said AGM were voted by a show of hands. Poll voting will be adopted if there is / are substantive resolution(s) to be put forth for shareholders’ approval at the general meetings moving ahead. The outcome of the AGM was announced to Bursa Securities on the same meeting day.

A press conference was held immediately after the AGM where the Chairman, the Managing Director and the Finance Director shared the financial performance and development of the Group business.

The Company will continue to ensure value-added information relating to corporate governance are provided and work towards enhancing the transparency and timeliness on all corporate disclosures and reporting.

This statement has been reviewed and approved by the Board on 20 October 2015.

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COMPOSITION

The Audit Committee comprises the following five members, three of whom, including the Chairman, are Independent Non-Executive Directors:

Martin Giles Manen (Chairman)Senior Independent Non-Executive Director(A Chartered Accountant and a member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants)

Datuk Seri Saw Choo BoonIndependent Non-Executive Director

Datin Ngiam Pick Ngoh, LindaIndependent Non-Executive Director(Appointed on 21 August 2014)

Kenneth Choo Tay SianNon-Independent Non-Executive Director(Has more than three years working experience in the finance field) (Appointed on 1 November 2014)

Yong Weng HongNon-Independent Non-Executive Director (Has more than three years working experience in the finance field) (Appointed on 9 October 2015)

Notes:Dato’ Syed Salleh bin Syed Othman passed away on 15 August 2015.Michiel Egeler and Alvaro Andres Cardenas Munoz resigned on 1 November 2014 and 7 October 2015 respectively.

A. TERMS OF REFERENCE

In discharging its duties and responsibilities, the Audit Committee is guided by the following Terms of Reference:

Membership

The Audit Committee comprises at least three Directors, the majority of whom are independent. The members of the Audit Committee shall elect a Chairman who shall be an Independent Director, from amongst themselves.

The members of the Audit Committee are all Non-Executive Directors. At least one member of the Audit Committee shall be a member of the Malaysian Institute of Accountants or alternatively a person who has at least three years working experience and has passed the examinations specified in Part 1 of the First Schedule of the Accountants Act, 1967 or is a member of one of the associations specified in Part II of the said schedule, or a person who fulfills the requirements as may be prescribed by Bursa Securities from time to time.

No alternate Director shall be appointed as a member of the Audit Committee. The Board shall review the terms of office and performance of the members of the Audit Committee at least once a year to determine whether the members have carried out their duties in accordance with their Terms of Reference.

In the event of any vacancy in the Audit Committee resulting in the non-compliance of the Main Market Listing Requirements of Bursa Securities, the Board shall fill the vacancy within three months from the date of the vacancy.

Meetings and Minutes

The Audit Committee shall meet at least four times annually. A majority of the members in attendance must be Independent Directors in order to form a quorum for the meeting.

The Finance Director and the Head of Internal Audit shall normally attend meetings of the Audit Committee. External auditors shall be entitled to attend meetings of the Audit Committee at least once a year to make known their views on any matter under consideration by the Audit Committee, or which in their opinion, should be brought to the Audit Committee’s attention. Non-member Directors and employees of the Company shall not attend unless specifically invited by the Audit Committee.

The Head of Internal Audit or the Company Secretary shall be the Secretary of the Audit Committee. The Secretary shall record, prepare and circulate the minutes of the meetings of the Audit Committee and ensure that the minutes are properly kept and produced for inspection if required.

The Audit Committee shall report to the Board and its minutes will be tabled to and noted by the Board.

Authority

The Audit Committee is authorised by the Board to review any activity within the Audit Committee’s Terms of Reference. It is authorised to seek any information it requires from any Director or member of Management and has full and unrestricted access to any information pertaining to the Company and the Management, and all employees of the Group are required to comply with the requests made by the Audit Committee.

The Audit Committee is authorised by the Board to obtain external professional advice and secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. In the event that any member of the Audit Committee shall need to seek external professional advice in furtherance of his duties, he shall first consult with and obtain the prior approval of the Chairman of the Audit Committee.

AUDIT COMMITTEE REPORT

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AUDIT COMMITTEE REPORT

The Audit Committee is also authorised by the Board of the Company to review any activity within its Terms of Reference, and where it deems necessary, investigate any matter referred to it or that it has come across in respect of a transaction that raises questions of Management integrity, possible conflicts of interest, or abuse by a significant or controlling shareholder.

The Audit Committee shall have direct communication channels and be able to convene meetings with the external auditors excluding the attendance of the non-independent members of the Audit Committee, whenever deemed necessary.

The Head of Internal Audit shall report directly to the Audit Committee and shall have direct access to the Chairman of the Audit Committee on all matters of control and audit. All proposals by Management regarding the appointment, transfer and removal of the Head of Internal Audit of the Company shall require prior approval of the Audit Committee. Any inappropriate restrictions on audit scope are to be reported to the Audit Committee.

Duties

1. To review the quarterly and annual financial statements of the Company, focusing particularly on:• any significant changes to accounting policies and

practices• significant adjustments arising from the audits• compliance with accounting standards and other legal

requirements• the going concern assumption

2. To review any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions of Management’s integrity.

3. To consider annually the Risk Management Framework adopted within the Group and to be satisfied that the methodology employed allows the identification, analysis, assessment, monitoring and communication of risks in a regular and timely manner that will allow the Group to minimise losses and maximise opportunities.

4. To ensure that the system of internal controls is soundly conceived and in place, effectively administered and regularly monitored.

5. To cause reviews to be made on the extent of compliance with established internal policies, standards, plans and procedures including for example, the Code of Conduct.

6. To obtain assurance that proper plans for control have been developed prior to the commencement of major areas of change within the organisation.

7. To be satisfied that the strategies, plans, manning and organisation for internal auditing are communicated down through the Group, specifically:• to review the internal audit plans and to be satisfied with their

consistency with the Risk Management Framework used, the adequacy of coverage and the audit methodologies employed.

• to be satisfied that the internal audit function within the Company has the proper resources and standing to enable them to complete their mandates and approved audit plans.

• to review status reports from internal audit and ensure that appropriate action is taken on the recommendations of the internal audit function. To recommend any broader reviews deemed necessary as a consequence of the issues or concerns identified.

• to review any appraisal or assessment of the performance of the members of the Internal Audit function, to approve any appointment or termination of senior staff members of the Internal Audit function and to inform itself of any resignations of Internal Audit staff members and reasons thereof.

• to ensure Internal Audit has full, free and unrestricted access to all activities, records, property and personnel necessary to perform its duties.

• to request and review any special audit which it deems necessary.

8. To review with the external auditors the nature and scope of their audit plan and report.

9. To review any matters concerning the appointment and re-appointment, audit fee and any questions of resignation or dismissal of the external auditors.

10. To review and evaluate factors related to the independence of the external auditors and assist them in preserving their independence.

11. To be advised of significant use of the external auditors in performing non-audit services within the Group, considering both the types of services rendered and the fees, such that their position as auditors are not deemed to be compromised.

12. To review the external auditors’ findings arising from audits, particularly any comments and responses in Management Letters as well as the assistance given by the employees of the Group in order to be satisfied that appropriate action is being taken.

13. To recommend to the Board steps to improve the system of internal controls derived from the findings of the internal and external auditors and from the consultations of the Audit Committee itself.

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14. To review with the external auditors the Statement on Risk Management and Internal Control of the Group for inclusion in the Annual Report.

15. To prepare the annual Audit Committee report to the Board which includes the composition of the Audit Committee, its Terms of Reference, number of meetings held, a summary of its activities and the existence of an Internal Audit function and summary of the activities of that function for inclusion in the Annual Report.

16. To review the Board’s statements on compliance with the Malaysian Code on Corporate Governance for inclusion in the Annual Report.

17. To review dividend payments.

18. To act on any other matters as may be directed by the Board.

B. ACTIVITIES OF THE AUDIT COMMITTEE

Meetings

During the financial year ended 30 June 2015, four Audit Committee meetings were held and were attended by all the members of the Audit Committee.

Some members of Senior Management i.e. the Managing Director, Finance Director, Sales Director, Human Resources Director, Corporate Relations and Legal Director and the Head of Internal Audit were also invited to attend these meetings to assist in clarifying matters raised at the meeting.

The Group’s external auditors were present at two Audit Committee meetings during the financial year where matters relating to the audit of the Group annual financial statements were discussed. The external auditors also met the Audit Committee without the presence of the Managing Director, Management and the Head of Internal Audit during the financial year to discuss audit findings and any other observations they may have during the audit process. The Audit Committee Chairman had two separate meetings with the external auditors without the Management’s presence. The Chairman also held separate meetings with the Managing Director, Finance Director and the Head of Internal Audit prior to every scheduled Audit Committee meeting.

The Chairman of the Audit Committee reports to the Board on matters deliberated at every Audit Committee meeting and recommendations made by the Audit Committee.

During the financial year 2015, the Audit Committee carried out its duties in accordance to its Terms of Reference. The main activities carried out by the Audit Committee during the financial year included the following:

Financial Reporting• Reviewed the quarterly financial results of the Group and

the relevant announcements to Bursa Securities before recommending them for the Board’s approval.

• Reviewed the annual Audited Financial Statements of the Group prior to submission to the Board for approval. The review was to ensure that the financial reporting and disclosures are in compliance with the Bursa Securities Main Market Listing Requirements, provisions of the Companies Act, 1965, applicable International Financial Reporting Standards, approved accounting standards issued by the Malaysian Accounting Standards Board and any other relevant legal and regulatory requirements.

Internal Audit• Reviewed the Internal Audit Plan including the audit methodology

in assessing and rating risks of auditable areas to ensure adequate scope and comprehensive coverage on the audit activities of the Group.

• Reviewed the effectiveness of the audit process, resource requirements for the year and assessed the performance of the Internal Audit Department. The competency and performance of the Head of Internal Audit were also reviewed.

• Reviewed the Internal Audit reports which encompassed the audit issues, audit recommendations and Management’s responses to these recommendations. Improvement actions in the area of internal controls, systems and efficiency enhancements suggested by the internal auditors were discussed together with Management.

• Reviewed the implementation of these recommendations through follow-up audit reports to ensure all key risks and control issues were addressed.

• Suggested additional improvement opportunities in the areas of internal control, systems and efficiency improvement.

• Reviewed the results of ad hoc investigations / special reviews on internal misconduct in relation to the Code of Conduct and suspicion of fraud or operational failures within the Group.

• Reviewed the reports from the Risk and Control Workgroup (RCW) following their quarterly meetings.

External Audit• Reviewed with the external auditors their audit scope and audit

plan for the year and their proposed fees for the statutory audit and review of the Statement on Risk Management and Internal Control.

• Reviewed the external audit reports and areas of concern highlighted in the Management Letter including Management’s responses to the findings of the external auditors.

• Discussed with external auditors the significant accounting and auditing issues, impact of new or proposed changes in accounting standards and regulatory requirements applicable to the Group.

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• Assessed the independence and objectivity of the external auditors during the year in carrying out statutory audit for the Group and prior to the appointment of the external auditors for ad hoc non-audit services. The Audit Committee also received report from the external auditors confirming that there were no circumstances and relationship that create threats to their independence and that the ethical requirements have been complied with.

• Assessed the performance of the external auditors and made recommendations to the Board on their re-appointment and remuneration.

Other Activities• Reviewed the effectiveness of the Group’s Risk Management

Programme including the process for identifying, evaluating and managing business risks, and reviewed the key strategic risks for the Group.

• Reviewed the adequacy, effectiveness and reliability of controls over financial reporting based on the Control Assurance and Risk Management (CARM) Programme assessment.

• Reviewed the related party transactions entered / to be entered into by the Company and its subsidiaries pursuant to the shareholders’ mandate on recurrent related party transactions approved by shareholders on 28 November 2014, and the proposed mandate for recurrent related party transactions for the ensuing year.

• Reviewed industry issues and Management’s concerns over the potential implication of the issues to the Group operations and business.

• Reviewed the Group’s preparation for the implementation of goods and services tax to ensure proper processes and system changes were put in place and compliance to the accounting and tax laws without any business disruption.

• Review of major claims and issues with substantial financial impact.

• Reviewed the Statement on Corporate Governance, Audit Committee Report and the Statement on Risk Management and Internal Control and recommended to the Board to approve the same for inclusion in the Annual Report.

Training

During the financial year under review, the Audit Committee members attended various conferences, seminars and training programmes to enhance their knowledge in order to efficiently discharge their duties as Directors of the Company as well as to improve their competencies in their respective fields of expertise. Some of the trainings and workshops attended by the members include Audit Committee Conference 2015, Financial Reporting Roundtable, ASEAN Economic Initiatives Workshop, Ministry-Industry Dialogue on Generating Green Wealth in Spurring the Nation’s Prosperity and Academy of Sciences Malaysia General Assembly: Malaysia Beyond 2020.

C. INTERNAL AUDIT FUNCTION

The Internal Audit function is carried out in-house by the Internal Audit Department (IAD) led by the Head of Internal Audit who reports directly to the Audit Committee. The Head of Internal Audit is currently supported by an Assistant Manager and two Executives. The IAD has direct access to the Chairman of the Audit Committee on all internal control and audit issues. The Audit Committee determines the adequacy of the scope, functions, competency and resources of the IAD.

The principal role of the IAD is to undertake independent and systematic reviews on the Group's internal controls system so as to provide reasonable assurance on the adequacy, integrity and effectiveness of the Group’s overall system of internal controls, risk management and governance.

The IAD adopts a risk-based auditing approach towards the planning and conduct of audits consistent with the Group’s established framework in designing, implementing and monitoring of control system. The IAD also works collaboratively with the RCW to review the risk management processes of the Group as a whole. The monitoring process and CARM approach are in line with the Risk Management Framework and risk awareness culture within the organisation.

The IAD carried out its activities based on the Annual Internal Audit Plan approved by the Audit Committee. During the financial year ended 30 June 2015, the IAD completed a total of 20 audit assignments. The audit conducted covered various operational areas within the Group which include review on:

(i) Regional sales and distribution operations (ii) Credit control and warehouse management operations(iii) Key strategic risks and risk management processes (iv) Implementation of corrective actions and preventive measures

based on audit recommendations raised (v) Changes to policies and procedures (vi) Related party transactions entered into by the Group(vii) Internal control areas assessed under the CARM Programme

During the financial year ended 30 June 2015, the IAD also carried out three investigative audits on suspicion of fraud or operational failures reported to them within the Group.

Findings of the IAD were highlighted to relevant Management who is responsible for ensuring that corrective actions on reported weaknesses are taken within the required timeframe. The finding reports were also deliberated at RCW meetings and presented to the Audit Committee for review at their quarterly meetings.

The total cost incurred by the IAD in relation to the conduct of the Internal Audit functions of the Group for the financial year ended 30 June 2015 was approximately RM1.02 million comprising mainly salaries, traveling and training expenses.

This report has been reviewed by the Audit Committee and approved by the Board on 20 October 2015.

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The Board of Directors (the Board) recognises the importance of maintaining a sound system of risk management and internal controls in Guinness Anchor Berhad Group (the Group) to safeguard shareholders’ investments and the Group’s assets. The Group has in place a framework for procedures on risk management and internal control which is in line with the guidelines set out in the “Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers”.

This statement stipulates the nature and the key element of the system of risk management and internal controls that the Group has in place during the financial year ended 30 June 2015 (FY15).

BOARD’S RESPONSIBILITY

The Board is responsible and accountable for the Group’s system of risk management and internal controls, which includes the establishment of risk management processes and control environment, as well as reviewing its effectiveness, adequacy and integrity as an integral part of good corporate governance. The system of risk management and internal controls covers, inter alia, governance, risk management, financial, organisational, environmental, operational and compliance controls. Such system is designed to manage and minimise impact rather than completely eliminate the risk of failure that may impede the achievement of the Group’s business objectives. Accordingly, it can only provide reasonable, but not absolute, assurance against any material misstatement or losses.

RISK MANAGEMENT FRAMEWORK

The Group has in place a Risk Management Framework to promote effective risk management and enhance the corporate governance assurance process. The framework provides an integrated risk management structure with the establishment of the respective risk workgroups to ensure major areas of risks are controlled and coordinated. This involves the process for identifying, evaluating, monitoring and managing risks that may affect the achievement of the Group’s business objectives. This process is embedded into the Group’s culture, people, strategy, processes and structures and is reviewed by the Board via the Audit Committee to ensure its adequacy and integrity.

The risk management processes are categorised into five broad processes as follows:

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

IdentifyRisks

ObjectiveSetting

Action Plans

MitigationPlanning

EvaluateRisk

EffectiveAction

Planning

Stru

ctur

e

Strategy

Peop

le

Culture

Process

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The risk profile of the Group is established during risk assessment sessions facilitated by the Risk and Control Workgroup (RCW). Risks identified are analysed and categorised in the following manner to enable the Group to allocate its resources to deal with the different levels of risks whereby a risk owner is assigned to ensure appropriate risk response actions are carried out:

Impact Risk Management Matrix

Critical Considerable management

required

Must manage and monitor

risks

Extensive management

essential

Major Risks may be worth accepting with monitoring

Management effort worthwhile

Management effort required

Manageable Accept risks Accept, but monitor risks

Manage and monitor risks

Remote Possible Likely

Likelihood

The Group manages its business risks in a rapidly changing business environment with the following objectives:

• Ensuring the continuity of supply of its products to the consumers at all times.

• Safeguarding the Group’s assets and reputation.• Preserving the safety and health of the Group employees.• Ensuring that the Group operations do not impact negatively on

the business community.• Protecting the interests of all stakeholders.• Ensuring compliance to internal policies and procedures, the

Malaysian Code on Corporate Governance, brand owner’s codes and policies and all applicable Malaysian laws and regulations.

• Promoting an effective risk awareness culture where risk management is an integral aspect of the Group’s management systems.

The RCW, which is made up of cross-functional Senior Managers and is led by the Managing Director, oversees the areas of risk management and internal control of the Group. It meets on a quarterly basis to review the adequacy of systems, policies and procedures and internal control processes to mitigate the business risks and to follow-up on action plans proposed by Management on the recommendations of the Internal Audit Department and external auditors. It reports to the Audit Committee and is supported by the Controls, Compliance and Ethics (CC&E) Team. The CC&E Team was set up during FY15 to replace the previously established Compliance Champion Workgroup (CCW) and its objective is to build a “Culture of Compliance” within the organisation, and to oversee compliance to the Group’s processes and ethics in its day-to-day operations. The team is administered as a function within the Finance Department and it reports directly to the Finance Director.

CONTROL ASSURANCE AND RISK MANAGEMENT

To further strengthen the Group’s internal controls and enhance its corporate governance, the Group has adopted a risk management and compliance programme – internally known as CARM (Control Assurance and Risk Management). CARM is developed by Diageo Plc (a former joint owner of the holding company of Guinness Anchor Berhad (GAB)). CARM is a web-based self-assessment programme that requires each function to evaluate and ensure that it has controls in place to manage a broad range of risks arising from the day-to-day business activities within the Group. CARM emphasises on internal controls over financial reporting and it focuses on transparency, accountability and safeguarding of assets in its review mechanism.

The CC&E Team coordinates the CARM assessment where the heads of function and process owners, who participate in the annual assessment, are briefed on the CARM processes and the scope of assessment. The outcome of the assessment is tested by the Internal Audit Department and the findings are reported to the RCW and the Audit Committee.

INTERNAL AUDIT FUNCTION

The Internal Audit Department (IAD) is responsible for reviewing key business processes of the Group and monitoring compliance with policies and procedures and the effectiveness of the internal control system. Audits are carried out based on the audit plan approved by the Audit Committee. The annual audit plan is developed based on the risk profiles of the respective functions identified in accordance with the Group’s Risk Management Framework. The audit reports, including significant findings in respect of any non-compliance, will be highlighted for Management and Audit Committee’s attention. Measures and actions by Management to address the improvement areas highlighted are followed-up and reviewed on a quarterly basis.

The IAD has a clear line of reporting to the Audit Committee and its performance is reviewed by the Audit Committee on an annual basis. Thus, the IAD is independent of the operational and management activities they audit.

For FY15, the IAD conducted 16 audits in the regional sales and distribution operations, four audits on operational processes and embarked on three investigative audits on Management’s request. In addition, IAD conducted the FY15 CARM testing of controls and reviewed the action plans implemented. Internal audit findings are discussed at Management level and actions are agreed in response to the IAD recommendations. Audit findings together with Management’s response and proposed action plans are presented to the Audit Committee on a quarterly basis for review. The progress of implementation of the agreed actions are monitored by the IAD through follow-up reviews.

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KEY ELEMENTS OF RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

The key elements of the Group’s risk management and internal control system are described below:

Authority and Responsibility

• As part of its Risk Management Framework, the Board has an organisational structure with clearly defined lines of accountability and responsibilities and delegated authority to the Board Committees and the Management to ensure they discharge their duties. The roles and responsibilities of the Board and Board Committees are provided in the Statement on Corporate Governance.

There is a schedule of key matters reserved specifically for the Board deliberation and decision. The Group is practising segregation of duties to ensure that specific tasks or duties within related business processes or associated with the systems supporting business processes are deliberately apportioned between different employees, to prevent unintentional or fraudulent transactions.

• Internal policies and procedures of core business processes with limit of authority delegated to appropriate levels of employees are documented in the Group’s Standard Policies and Procedures Manual (Manual). This Manual is subject to review and improvement to reflect changing risks or resolve operational deficiencies. The Manual is communicated and made accessible to all employees on the Group Document Repository Portal. Changes to the existing policies or implementation of any new policies and guidelines are presented to the RCW and the Audit Committee for approval. Non-compliance cases, if any, are reported to the Audit Committee.

Monitoring, Reporting and Performance Measurement

• Management Team meetings are held on a monthly basis to review business performance, identify, discuss and resolve operational, financial and key management issues. On a quarterly basis, the Managing Director reports to the Board on key business and operational issues covering, but not limited to strategy, performance, resources and regulatory compliance.

• RCW meets on a quarterly basis to review the adequacy of systems, policies and procedures and internal control processes to mitigate the business risks and to follow-up on action plans proposed by Management on the recommendations of the IAD.

• Annual Internal audit on compliance with the ISO 9001:2008 Quality Management System requirements.

• A half-yearly Hazard Analysis Critical Control Point internal audit to monitor compliance with product safety requirements.

• Annual budgeting process where respective functions prepare budgets before a new financial year commences. The annual budget is reviewed by the Management Team and approved by the Board.

• Monthly review of expenditure versus budget is carried out by the Finance Department with the respective functions to ensure all spends are managed in line with plan and key variances, if any, are followed up and reported to Management.

• Visits are made to regional offices to conduct regional reviews by the Management Team.

• Stakeholder engagement with employees, shareholders (existing and potential), analysts, media, trade partners and relevant authorities are conducted to better gauge the needs of the stakeholders and gather feedback on effectiveness and efficiency for continuous improvement.

Employees Competency and Awareness

• E-learning sessions were rolled out by the CC&E Team in December 2014 to raise awareness and to assess employees’ understanding on the GAB Code of Conduct. It is compulsory for all employees to complete this e-learning module, and the results from the assessments are closely monitored by the employees’ line manager, the CC&E Team and the RCW. Where employees’ assessment results showed a lack of understanding on the GAB Code of Conduct, the line manager had coaching conversations with the employee concerned to close the gap.

• Training and development programmes such as knowledge, health and safety, technical training and leadership are organised for employees to ensure that they are equipped with necessary knowledge and skills and kept up to date with the necessary competencies to carry out their responsibilities towards achieving the Group’s objectives.

• Briefings and roadshows are conducted to keep employees informed of changes to legislation that are expected to affect the Group’s operations or the way the Group conducts its business.

• Induction programme for new hires is organised with the aim of raising their awareness and educating them on the Group’s approach to risk management and internal controls. Such sessions also provide a forum to enhance the participants’ understanding on the Group’s risk management and control procedures as well as their roles in managing the risks.

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Integrity and Ethical Values

• The Group has in place a Code of Conduct that governs the standards of ethics and responsible business conduct expected from employees. It covers all aspects of the Group’s business operations such as compliance with laws, policies and procedures, integrity, conduct in the workplace, business conduct, maintaining confidentiality and disclosure of information, fraud and improper payments, avoiding situations where there are conflicts of interest, protection of the Group’s assets, safety and health, community and environment, sexual harassment and anti-competition practices.

• The Group has established a Speak Up policy to provide an avenue for employees, suppliers and business partners to raise concerns to the appropriate parties about unethical practices affecting GAB without repercussions in a safe and confidential manner. Concerns can be reported anonymously through a Speak Up Hotline / Link / Email managed by an independent external service provider engaged by GAB, as well as an internal email channel managed by the CC&E Team. A Speak Up Workgroup comprising the Head of Compliance, Head of Internal Audit and Head of Industrial Relations of GAB has been formed to ensure all reports received are investigated and appropriate actions are taken. In December 2014, the Speak Up Policy and Hotline were communicated to all distributors of GAB to create awareness that there is an established channel for them to report any breaches or non-compliance observed in their dealings with GAB.

• The Group employees are guided by the Corporate Vision and Values which are embedded within the Company’s policies and procedures and work culture.

Other Policies

• A Vendor Code which outlines the standard for ethical and business conduct expected from suppliers and service providers in their business relationship with the Group. The Group engages the suppliers and service providers to raise their awareness on the Group’s expectation on the standards of business ethics and to review their performance based on the obligations committed to the Group.

• The Group’s assets are insured against any mishap that will result in material losses. Measures are also put in place to ensure major assets within the Group are physically safeguarded.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

• A Business Continuity Plan which includes a Disaster Recovery Plan, is in place to ensure continuity of business operations in the event of a significant disruption or disaster. The Group has a Crisis Management Team which comprises members of the Management Team, to provide leadership and timely decision-making in the event of crisis. The Crisis Management Team is assisted by the Emergency Response Team, which is entrusted to implement the necessary procedures for responding and stabilising the situation following an incident as well as the Recovery Team, which is assigned to identify primary disaster recovery plan to keep the business operational. Crisis simulation is conducted to enhance the Group’s preparedness in crisis and emergency response to ensure that disruption to its operations and business during a crisis of disaster is minimised or properly managed. A simulation on the activation of the Business Continuity Plan when a key business risk occurs was conducted in June 2015 to assess the Group’s preparedness in dealing with crisis.

BOARD ASSESSMENT

The Board is of the view that the overall risk management and internal control systems in place for FY15 and up to the date of approval of this statement are operating adequately and effectively, in all material aspects, based on the same assurance received from both the Managing Director and Finance Director of the Company via the CARM assessment sign-off. During the financial year 2015, there were no material financial and non-financial losses reported as a result of weaknesses or inadequacies in internal controls. The Board will continue to review the systems and ensure that measures will be taken to strengthen the risk management and internal control environment within the Group.

This statement has been reviewed by the Audit Committee and approved by the Board on 20 October 2015.

GUINNESS ANCHOR

BERHAD

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financialstatements78 Directors’ Report81 Statements of Financial Position82 Statements of Profit or Loss and Other Comprehensive Income83 Statements of Changes in Equity84 Statements of Cash Flows86 Notes to the Financial Statements122 Statement by Directors and Statutory Declaration123 Independent Auditors’ Report

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The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June 2015.

Principal activities

The Company is principally engaged in the production, packaging, marketing and distribution of beverages, primarily alcoholic, whilst the principal activities of the subsidiaries are as stated in Note 5 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

Results

Group Company

RM’000 RM’000

Profit for the year attributable to:

Owners of the Company 214,193 187,825

Reserves and provisions

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

Dividends

Since the end of the previous financial year, the Company paid:

i) a final ordinary dividend of 44.5 sen per 50 sen stock unit under the single tier tax system totalling RM134,433,610 in respect of the financial year ended 30 June 2014 on 31 December 2014; and

ii) an interim ordinary dividend of 20 sen per 50 sen stock unit under the single tier tax system totalling RM60,419,600 in respect of the

financial year ended 30 June 2015 on 22 April 2015.

The Directors now recommend the declaration of a final ordinary dividend of 51 sen per 50 sen stock unit under the single tier tax system totalling RM154,069,980 in respect of the financial year ended 30 June 2015 which if approved by the owners of the Company will be payable on 31 December 2015.

Directors of the Company

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

Datuk Seri Saw Choo Boon Hans EssaadiMartin Giles Manen Dato’ Syed Salleh bin Syed Othman Michiel EgelerDatin Ngiam Pick Ngoh, LindaApurvi Haridas Sheth @ Apurvi Sheth Mirpuri Alvaro Andres Cardenas Munoz Kenneth Choo Tay Sian

DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015

GUINNESS ANCHOR

BERHAD

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DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015

Directors’ interests in shares

According to the Register of Directors’ Shareholdings, none of the Directors (including the spouses or children of the Directors who themselves are not Directors of the Company) holding office at 30 June 2015 had any interest in the ordinary shares/stock units of the Company or of its related corporations during the financial year.

Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the Company) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

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

Issue of shares and debentures

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

Options granted over unissued shares

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

Ultimate holding corporation

The Directors regard GAPL Pte. Ltd., a corporation incorporated in the Republic of Singapore, as the ultimate holding corporation. GAPL Pte. Ltd. is a joint venture corporation whose ultimate owners are Diageo Plc., a corporation incorporated in England and Wales, and Heineken Asia Pacific Pte. Ltd. (HAPPL), a corporation incorporated in the Republic of Singapore. HAPPL is owned by Heineken N.V., a corporation incorporated in Netherlands.

Other statutory information

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

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

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

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, or

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

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

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

GUINNESS ANCHOR

BERHAD

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Other statutory information (continued)

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

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

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

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

In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 30 June 2015 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

Auditors

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

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

Datuk Seri Saw Choo BoonDirector

Hans EssaadiDirector

Petaling Jaya,14 August 2015

DIRECTORS’ REPORTFOR THE YEAR ENDED 30 JUNE 2015

GUINNESS ANCHOR

BERHAD

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Group Company

Note 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Assets

Property, plant and equipment 3 219,581 220,424 192,717 194,902

Intangible assets 4 33,317 38,790 33,310 38,781

Investments in subsidiaries 5 - - 14,344 14,344

Other receivables and prepayments 6 27,005 16,615 512 779

Total non-current assets 279,903 275,829 240,883 248,806

Inventories 7 49,049 39,975 22,755 28,710

Current tax assets 15,138 7,003 8,760 6,591

Receivables, deposits and prepayments 6 296,269 317,059 43,999 113,256

Cash and cash equivalents 8 52,294 61,804 51,157 54,499

Total current assets 412,750 425,841 126,671 203,056

Total assets 692,653 701,670 367,554 451,862

Equity

Share capital 9 151,049 151,049 151,049 151,049

Retained earnings 225,099 205,760 61,895 68,924

Total equity attributable to owners of the Company 376,148 356,809 212,944 219,973

Liabilities

Borrowings 10 50,000 50,000 50,000 50,000

Deferred tax liabilities 11 48,498 42,855 37,382 39,343

Total non-current liabilities 98,498 92,855 87,382 89,343

Borrowings 10 25,000 100,000 25,000 100,000

Trade and other payables 12 193,007 147,620 42,228 42,546

Current tax liabilities - 4,386 - -

Total current liabilities 218,007 252,006 67,228 142,546

Total liabilities 316,505 344,861 154,610 231,889

Total equity and liabilities 692,653 701,670 367,554 451,862

STATEMENTS OF FINANCIAL POSITIONAS AT 30 JUNE 2015

The notes on pages 86 to 121 are an integral part of these financial statements.

GUINNESS ANCHOR

BERHAD

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STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2015

Group Company

Note 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Revenue 1,748,885 1,610,587 1,148,392 994,744

Cost of sales (1,128,332) (1,032,434) (1,041,780) (924,942)

Gross profit 620,553 578,153 106,612 69,802

Other income 4,777 3,902 1,724 1,148

Distribution, marketing and selling expenses (234,729) (231,933) (8,294) (8,406)

Administrative expenses (82,256) (69,984) (16,980) (21,984)

Other expenses (12,984) (9,529) (10,680) (8,963)

Dividend income - - 136,742 227,904

Results from operating activities 295,361 270,609 209,124 259,501

Finance income 13 2,631 2,591 2,592 2,551

Finance costs 14 (5,593) (7,413) (5,593) (7,413)

Net finance costs (2,962) (4,822) (3,001) (4,862)

Profit before tax 292,399 265,787 206,123 254,639

Tax expense 15 (78,206) (67,581) (18,298) (8,046)

Profit/Total comprehensive income for the year 16 214,193 198,206 187,825 246,593

Profit/Total comprehensive income for the year attributable to:

Owners of the Company 214,193 198,206 187,825 246,593

Basic/Diluted earnings per ordinary stock unit (sen) 17 70.9 65.6

The notes on pages 86 to 121 are an integral part of these financial statements.

GUINNESS ANCHOR

BERHAD

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STATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2015

Attributable to owners of the Company

Distributable

Note Share Retained Total

capital earnings equity

Group RM’000 RM’000 RM’000

At 1 July 2013 151,049 214,491 365,540

Total comprehensive income for the year - 198,206 198,206

Dividends to owners of the Company 18 - (206,937) (206,937)

At 30 June 2014/1 July 2014 151,049 205,760 356,809

Total comprehensive income for the year - 214,193 214,193

Dividends to owners of the Company 18 - (194,854) (194,854)

At 30 June 2015 151,049 225,099 376,148

Note 9

Attributable to owners of the Company

Distributable

Note Share Retained Total

capital earnings equity

Company RM’000 RM’000 RM’000

At 1 July 2013 151,049 29,268 180,317

Total comprehensive income for the year - 246,593 246,593

Dividends to owners of the Company 18 - (206,937) (206,937)

At 30 June 2014/1 July 2014 151,049 68,924 219,973

Total comprehensive income for the year - 187,825 187,825

Dividends to owners of the Company 18 - (194,854) (194,854)

At 30 June 2015 151,049 61,895 212,944

Note 9

The notes on pages 86 to 121 are an integral part of these financial statements.

GUINNESS ANCHOR

BERHAD

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Group Company

Note 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Cash flows from operating activities

Profit before tax 292,399 265,787 206,123 254,639

Adjustments for:

Amortisation of intangible assets 4 10,758 9,664 10,756 9,664

Amortisation of prepaid contractual promotion expenses 46,489 35,030 - -

Depreciation of property, plant and equipment 3 30,968 31,517 22,896 24,043

Dividend income - - (136,742) (227,904)

Finance income 13 (2,631) (2,591) (2,592) (2,551)

Finance costs 14 5,593 7,413 5,593 7,413

Gain on disposal of property, plant and equipment (1,111) (944) (206) (292)

Impairment loss on trade receivables 824 - - -

Intangible assets written off 214 175 214 175

Property, plant and equipment written off 2,791 254 2,779 252

Reversal of impairment loss on trade receivables - (237) - -

Unrealised foreign exchange differences (40) 66 (44) 66

Operating profit before changes in working capital 386,254 346,134 108,777 65,505

Change in inventories (9,074) 7,368 5,955 (2,865)

Change in trade and other payables 45,427 (31,588) (274) (2,706)

Change in receivables, deposits and prepayments (36,913) (26,111) 69,524 (54,265)

Cash generated from operations 385,694 295,803 183,982 5,669

Interest paid (5,593) (7,413) (5,593) (7,413)

Tax refunded - 22,025 - 19,728

Tax paid (85,084) (74,190) (22,428) (8,090)

Net cash from operating activities 295,017 236,225 155,961 9,894

Cash flows from investing activities

Acquisition of intangible assets 4 (5,499) (13,864) (5,499) (13,864)

Acquisition of property, plant and equipment 3 (32,930) (25,416) (23,493) (17,257)

Dividend received - - 136,742 227,904

Interest received 2,631 2,591 2,592 2,551

Proceeds from disposal of property, plant and equipment 1,125 963 209 295

Net cash (used in)/from investing activities (34,673) (35,726) 110,551 199,629

STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2015

The notes on pages 86 to 121 are an integral part of these financial statements.

GUINNESS ANCHOR

BERHAD

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STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2015 (CONTINUED)

Group Company

Note 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Cash flows from financing activities

Dividends paid to owners of the Company 18 (194,854) (206,937) (194,854) (206,937)

Proceeds from issuance of commercial papers 25,000 100,000 25,000 100,000

Repayment of commercial papers - (100,000) - (100,000)

Repayment of medium term notes (100,000) - (100,000) -

Net cash used in financing activities (269,854) (206,937) (269,854) (206,937)

Net (decrease)/increase in cash and cash equivalents (9,510) (6,438) (3,342) 2,586

Cash and cash equivalents at 1 July 61,804 68,242 54,499 51,913

Cash and cash equivalents at 30 June (i) 52,294 61,804 51,157 54,499

Note to the statements of cash flows

(i) Cash and cash equivalents

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

Group Company

Note 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Deposits placed with a licensed bank 8 - 671 - 671

Cash and bank balances 8 52,294 61,133 51,157 53,828

52,294 61,804 51,157 54,499

The notes on pages 86 to 121 are an integral part of these financial statements.

GUINNESS ANCHOR

BERHAD

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NOTES TO THE FINANCIAL STATEMENTS

Guinness Anchor Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The address of its registered office and principal place of business is as follows:

Sungei Way BreweryLot 1135, Batu 9, Jalan Klang LamaP.O. Box 14446710 Petaling JayaSelangor Darul Ehsan

The consolidated financial statements of the Company as at and for the financial year ended 30 June 2015 comprise the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”). The financial statements of the Company as at and for the financial year ended 30 June 2015 do not include other entities. The Company is principally engaged in the production, packaging, marketing and distribution of beverages, primarily alcoholic, whilst the principal activities of the subsidiaries are as stated in Note 5 to the financial statements.

The Directors regard GAPL Pte. Ltd., a corporation incorporated in the Republic of Singapore, as the ultimate holding corporation. GAPL Pte. Ltd. is a joint venture corporation whose ultimate owners are Diageo Plc., a corporation incorporated in England and Wales, and Heineken Asia Pacific Pte. Ltd. (HAPPL), a corporation incorporated in the Republic of Singapore. HAPPL is owned by Heineken N.V., a corporation incorporated in Netherlands.

These financial statements were authorised for issue by the Board of Directors on 14 August 2015.

1. Basis of preparation

(a) Statement of compliance

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

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

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016• Amendments to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual Improvements 2012-2014

Cycle)• Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014 Cycle)• Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures

– Sale or Contribution of Assets between an Investor and its Associate or Joint Venture• Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in Other Entities and MFRS

128, Investments in Associates and Joint Ventures – Investment Entities: Applying the Consolidation Exception• Amendments to MFRS 11, Joint Arrangements – Accounting for Acquisitions of Interests in Joint Operations• MFRS 14, Regulatory Deferral Accounts• Amendments to MFRS 101, Presentation of Financial Statements – Disclosure Initiative• Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets – Clarification of Acceptable

Methods of Depreciation and Amortisation• Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture – Agriculture: Bearer Plants• Amendments to MFRS 119, Employee Benefits (Annual Improvements 2012-2014 Cycle)• Amendments to MFRS 127, Separate Financial Statements – Equity Method in Separate Financial Statements• Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2012-2014 Cycle)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017• MFRS 15, Revenue from Contracts with Customers

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

GUINNESS ANCHOR

BERHAD

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NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation (continued)

(a) Statement of compliance (continued)

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

• from the annual period beginning on 1 July 2016 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2016 except for Amendments to MFRS 5, Amendments to MFRS 11, MFRS 14, Amendments to MFRS 116 and 141 which are not applicable to the Group and the Company.

• from the annual period beginning on 1 July 2017 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2017.

• from the annual period beginning on 1 July 2018 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2018.

The initial application of the applicable accounting standards, amendments or interpretations are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and the Company except as mentioned below:

MFRS 15, Revenue from Contracts with Customers

MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC Interpretation 13, Customer Loyalty Programs, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfers of Assets from Customers and IC Interpretation 131, Revenue – Barter Transactions Involving Advertising Services.

The Group is currently assessing the financial impact that may arise from the adoption of MFRS 15.

MFRS 9, Financial Instruments

MFRS 9, replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and financial liabilities, and on hedge accounting.

The Group is currently assessing the financial impact that may arise from the adoption of MFRS 9.

(b) Basis of measurement

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

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.

(d) Use of estimates and judgements

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

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

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements.

pg.87

GUINNESS ANCHOR

BERHAD

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NOTES TO THE FINANCIAL STATEMENTS

2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements and have been applied consistently by Group entities, unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

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

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

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses. The cost of investments includes transaction costs.

(ii) Business combinations

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

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

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

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

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

(iii) Loss of control

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

(iv) Transactions eliminated on consolidation

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

pg.88

GUINNESS ANCHOR

BERHAD

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NOTES TO THE FINANCIAL STATEMENTS

2. Significant accounting policies (continued)

(b) Foreign currency transactions

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

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

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

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

(c) Financial instruments

(i) Initial recognition and measurement

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

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

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

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

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.

All financial assets are subject to review for impairment (see Note 2(i)(i)).

Financial liabilities All financial liabilities are subsequently measured at amortised cost.

(iii) Derecognition

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

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

pg.89

GUINNESS ANCHOR

BERHAD

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NOTES TO THE FINANCIAL STATEMENTS

2. Significant accounting policies (continued)

(d) Property, plant and equipment

(i) Recognition and measurement

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

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs.

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

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

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

(ii) Subsequent costs

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

(iii) Depreciation

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

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

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

• leasehold land 61 - 95 years• buildings 50 years• plant and machinery 13 - 20 years• movable plant 2 - 10 years

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

pg.90

GUINNESS ANCHOR

BERHAD

Page 93: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

2. Significant accounting policies (continued)

(e) Operating leases

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

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

(f) Intangible assets

(i) Computer software

Computer software that are acquired by the Group, which have finite useful lives, are stated at cost less any accumulated amortisation and any accumulated impairment losses. Capital work-in-progress is measured at cost and is not amortised until the assets are ready for their intended use.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.

(iii) Amortisation

Computer software are amortised from the date that they are available for use. Amortisation is based on the cost of an asset less its residual value.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of 5 years.

Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted, if appropriate.

(g) Inventories

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

The cost of inventories is calculated using the weighted average method, and includes cost of raw materials, duties where applicable, and other expenses incurred in acquiring the inventories and bringing them to their existing location and condition. For finished goods and work-in-progress, cost also includes direct labour and an appropriate proportion of production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated cost necessary to make the sale.

(h) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits placed with licensed banks. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits, if any.

pg.91

GUINNESS ANCHOR

BERHAD

Page 94: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

2. Significant accounting policies (continued)

(i) Impairment

(i) Financial assets

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

Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy or the disappearance of an active market for a security.

The Group considers evidence of impairment for receivables at specific asset level. All receivables are assessed individually for impairment.

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

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) Other assets

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

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

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

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

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

pg.92

GUINNESS ANCHOR

BERHAD

Page 95: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

2. Significant accounting policies (continued)

(j) Equity instrument

Ordinary shares classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

(k) Employee benefits

(i) Short-term employee benefits

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

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

(ii) State plans

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

(iii) Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the end of the reporting period, then they are discounted.

(l) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

(m) Revenue and other income

(i) Goods sold

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

(ii) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s rights to receive payment is established.

(iii) Interest income

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

pg.93

GUINNESS ANCHOR

BERHAD

Page 96: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

2. Significant accounting policies (continued)

(n) Borrowing costs

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

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

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

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

(o) Income tax

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

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

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

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying

amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted.

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

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

(p) Earnings per ordinary stock unit

The Group presents basic and diluted earnings per stock unit data for its ordinary stock unit (EPS).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary stock units outstanding during the period.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary stock units outstanding for the effects of all dilutive potential ordinary stock units, if any.

pg.94

GUINNESS ANCHOR

BERHAD

Page 97: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

2. Significant accounting policies (continued)

(q) Operating segments

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

(r) Fair value measurements

Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

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

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

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

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

Level 3: unobservable inputs for the asset or liability.

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

pg.95

GUINNESS ANCHOR

BERHAD

Page 98: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

3. Property, plant and equipment

Freeholdland

Long termleasehold

land BuildingsPlant and

machineryMovable

plant

Capitalwork-in-progress Total

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

At 1 July 2013 4,037 20,191 92,817 340,348 186,793 2,699 646,885

Additions - - 361 274 2,890 21,891 25,416

Write off - - (635) (1,496) (7,893) - (10,024)

Disposals - - - (1,655) (4,289) - (5,944)

Transfers - - 1,776 7,917 9,965 (19,658) -

Transfer (to)/from intangible assets - - (235) - 1,011 463 1,239

At 30 June 2014/1 July 2014 4,037 20,191 94,084 345,388 188,477 5,395 657,572

Additions - - 47 304 8,488 24,091 32,930

Write off - - (1,826) (3,915) (22,604) - (28,345)

Disposals - - - (1,810) (7,796) - (9,606)

Transfers - - 3,437 7,664 16,622 (27,723) -

At 30 June 2015 4,037 20,191 95,742 347,631 183,187 1,763 652,551

Depreciation

At 1 July 2013 - 7,358 44,831 235,882 133,038 - 421,109

Depreciation charge for the year - 255 5,325 12,120 13,817 - 31,517

Write off - - (416) (1,469) (7,885) - (9,770)

Disposals - - - (1,655) (4,270) - (5,925)

Transfer (to)/from intangible assets - - (113) - 330 - 217

At 30 June 2014/1 July 2014 - 7,613 49,627 244,878 135,030 - 437,148

Depreciation charge for the year - 256 5,473 9,867 15,372 - 30,968

Write off - - (1,091) (3,378) (21,085) - (25,554)

Disposals - - - (1,810) (7,782) - (9,592)

At 30 June 2015 - 7,869 54,009 249,557 121,535 - 432,970

Carrying amounts

At 1 July 2013 4,037 12,833 47,986 104,466 53,755 2,699 225,776

At 30 June 2014/1 July 2014 4,037 12,578 44,457 100,510 53,447 5,395 220,424

At 30 June 2015 4,037 12,322 41,733 98,074 61,652 1,763 219,581

pg.96

GUINNESS ANCHOR

BERHAD

Page 99: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

3. Property, plant and equipment (continued)

Long termleasehold

land BuildingsPlant and

machineryMovable

plant

Capitalwork-in-progress Total

Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

At 1 July 2013 20,191 86,134 340,348 138,858 2,699 588,230

Additions - 75 274 391 16,517 17,257

Write off - (438) (1,496) (7,643) - (9,577)

Disposals - - (1,655) (1,497) - (3,152)

Transfers - 1,776 7,917 5,418 (15,111) -

Transfer from intangible assets - - - 793 463 1,256

At 30 June 2014/1 July 2014 20,191 87,547 345,388 136,320 4,568 594,014

Additions - 11 304 6,808 16,370 23,493

Write off - (1,710) (3,915) (17,967) - (23,592)

Disposals - - (1,810) (4,513) - (6,323)

Transfers - 2,563 7,664 9,122 (19,349) -

At 30 June 2015 20,191 88,411 347,631 129,770 1,589 587,592

Depreciation

At 1 July 2013 7,358 42,761 235,882 101,317 - 387,318

Depreciation charge for the year 255 3,721 12,120 7,947 - 24,043

Write off - (219) (1,469) (7,637) - (9,325)

Disposals - - (1,655) (1,494) - (3,149)

Transfer from intangible assets - - - 225 - 225

At 30 June 2014/1 July 2014 7,613 46,263 244,878 100,358 - 399,112

Depreciation charge for the year 256 3,927 9,867 8,846 - 22,896

Write off - (975) (3,378) (16,460) - (20,813)

Disposals - - (1,810) (4,510) - (6,320)

At 30 June 2015 7,869 49,215 249,557 88,234 - 394,875

Carrying amounts

At 1 July 2013 12,833 43,373 104,466 37,541 2,699 200,912

At 30 June 2014/1 July 2014 12,578 41,284 100,510 35,962 4,568 194,902

At 30 June 2015 12,322 39,196 98,074 41,536 1,589 192,717

3.1 Change in accounting policy

Returnable bottles were previously categorised as inventories. Effective 1 April 2015, the Group changed its accounting treatment by capitalising returnable bottles as movable plant to align with accounting treatment of other returnable packaging items. The change in accounting policy does not have any material financial impact in both the current and prior years. As a result, the management applied the change of accounting policy prospectively.

pg.97

GUINNESS ANCHOR

BERHAD

Page 100: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

4. Intangible assets

Computersoftware

Capitalwork-in-progress Total

Group RM’000 RM’000 RM’000

Cost

At 1 July 2013 60,642 690 61,332

Additions - 13,864 13,864

Write off (4,613) - (4,613)

Transfer 11,521 (11,521) -

Transfer to property, plant and equipment (776) (463) (1,239)

At 30 June 2014/1 July 2014 66,774 2,570 69,344

Additions - 5,499 5,499

Write off (15,999) - (15,999)

Transfer 5,513 (5,513) -

At 30 June 2015 56,288 2,556 58,844

Amortisation

At 1 July 2013 25,545 - 25,545

Amortisation for the year 9,664 - 9,664

Write off (4,438) - (4,438)

Transfer to property, plant and equipment (217) - (217)

At 30 June 2014/1 July 2014 30,554 - 30,554

Amortisation for the year 10,758 - 10,758

Write off (15,785) - (15,785)

At 30 June 2015 25,527 - 25,527

Carrying amounts

At 1 July 2013 35,097 690 35,787

At 30 June 2014/1 July 2014 36,220 2,570 38,790

At 30 June 2015 30,761 2,556 33,317

pg.98

GUINNESS ANCHOR

BERHAD

Page 101: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

4. Intangible assets (continued)

Computersoftware

Capitalwork-in-progress Total

Company RM’000 RM’000 RM’000

Cost

At 1 July 2013 60,642 690 61,332

Additions - 13,864 13,864

Write off (4,613) - (4,613)

Transfer 11,521 (11,521) -

Transfer to property, plant and equipment (793) (463) (1,256)

At 30 June 2014/1 July 2014 66,757 2,570 69,327

Additions - 5,499 5,499

Write off (15,999) - (15,999)

Transfer 5,513 (5,513) -

At 30 June 2015 56,271 2,556 58,827

Amortisation

At 1 July 2013 25,545 - 25,545

Amortisation for the year 9,664 - 9,664

Write off (4,438) - (4,438)

Transfer to property, plant and equipment (225) - (225)

At 30 June 2014/1 July 2014 30,546 - 30,546

Amortisation for the year 10,756 - 10,756

Write off (15,785) - (15,785)

At 30 June 2015 25,517 - 25,517

Carrying amounts

At 1 July 2013 35,097 690 35,787

At 30 June 2014/1 July 2014 36,211 2,570 38,781

At 30 June 2015 30,754 2,556 33,310

pg.99

GUINNESS ANCHOR

BERHAD

Page 102: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

5. Investments in subsidiaries

Company

2015 2014

RM’000 RM’000

Unquoted shares

- at cost 14,344 14,344

Details of the subsidiaries are as follows:

Name of entity

Principal place ofbusiness/Country of

incorporation Principal activities

Effective ownershipinterest and

voting interest

2015 2014

% %

Guinness Anchor Marketing Sdn. Bhd. Malaysia Marketing and distribution of beverages primarily alcoholic in Malaysia

100 100

Ramaha Corporation (M) Sdn. Bhd. Malaysia Property holding and land development

100 100

Guinness Sabah Sdn. Bhd. Malaysia Dormant 100 100

Malayan Breweries (Malaya) Sdn. Bhd.*

Malaysia Dormant 100 100

Guinness Singapore Pte. Limited# Singapore Dormant - 100

* On 11 February 2011, Malayan Breweries (Malaya) Sdn. Bhd. has applied to the Companies Commission of Malaysia (CCM) to have its name struck-off pursuant to Section 308 of the Companies Act, 1965. The striking-off is pending completion.

# On 10 April 2014, Guinness Singapore Pte. Limited has applied to the Accounting and Corporate Regulatory Authority (ACRA) to have its name struck-off from the Register. The striking-off was approved by ACRA on 12 September 2014.

pg.100

GUINNESS ANCHOR

BERHAD

Page 103: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

6. Receivables, deposits and prepayments

Group Company

Note 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Non-current

Other receivables 6.2 787 1,019 512 779

Prepayments 6.3 26,218 15,596 - -

27,005 16,615 512 779

Current

Trade

Amount due from related parties 6.1 2,493 1,624 2,493 1,624

Amount due from a subsidiary 6.1 - - - 24,945

Trade receivables 259,701 294,734 - 2,637

Less: Impairment losses (2,783) (6,384) - -

259,411 289,974 2,493 29,206

Non-trade

Amount due from related parties 6.1 3,540 3,236 209 149

Amount due from subsidiaries 6.1 - - 35,552 76,865

Deposits 2,973 7,418 1,244 6,519

Other receivables 6.2 4,995 1,555 2,380 271

Prepayments 6.3 25,350 14,876 2,121 246

36,858 27,085 41,506 84,050

296,269 317,059 43,999 113,256

6.1 Amounts due from related parties and subsidiaries

The trade amounts due from related parties and a subsidiary are subject to the normal trade terms.

The non-trade amounts due from related parties and subsidiaries are unsecured, interest free and repayable on demand.

6.2 Other receivables

Included in other receivables are staff loans of the Group and of the Company amounting to RM1,445,000 (2014: RM1,580,000) and RM923,000 (2014: RM1,149,000) respectively of which RM787,000 (2014: RM1,019,000) and RM512,000 (2014: RM779,000) are repayable after the next 12 months for the Group and the Company respectively.

6.3 Prepayments

Included in prepayments of the Group are upfront payments for promotional activities of RM49,015,000 (2014: RM29,909,000) of which RM26,218,000 (2014: RM15,596,000) are to be amortised over a period of more than 12 months. The upfront payments are made to the Group’s distributional channels to carry out promotional activities over the period specified in the contract. The amount is amortised to profit or loss based on the volume purchased by outlets from the distributors or the time period as stipulated in the contract.

pg.101

GUINNESS ANCHOR

BERHAD

Page 104: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

7. Inventories

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Raw materials 9,296 13,358 9,296 13,358

Work-in-progress 2,570 1,889 2,570 1,889

Finished goods 27,371 12,224 1,612 1,241

Packaging materials 4,553 7,174 4,553 7,174

Engineering stores and spares 5,259 5,330 4,724 5,048

49,049 39,975 22,755 28,710

Recognised in profit or loss :

Inventories recognised as cost of sales 1,065,083 979,781 1,041,611 921,341

8. Cash and cash equivalents

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Deposits placed with a licensed bank - 671 - 671

Cash and bank balances 52,294 61,133 51,157 53,828

52,294 61,804 51,157 54,499

9. Share capital

Company

AmountNumber of

shares AmountNumber of

shares

2015 2015 2014 2014

RM’000 ’000 RM’000 ’000

Authorised:

Shares of RM0.50 each 200,000 400,000 200,000 400,000

Issued and fully paid:

Ordinary stock units of RM0.50 each 151,049 302,098 151,049 302,098

The holders of ordinary stock units are entitled to receive dividends as declared from time to time, and are entitled to one vote per ordinary stock unit at meetings of the Company.

pg.102

GUINNESS ANCHOR

BERHAD

Page 105: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

10. Borrowings

Group and Company

Note 2015 2014

RM’000 RM’000

Non-current

Medium Term Notes (unsecured) 10.1 50,000 50,000

Current

Medium Term Notes (unsecured) 10.1 - 100,000

Commercial Papers (unsecured) 10.2 25,000 -

On 25 November 2011, the Company obtained the approval of the Securities Commission for the issuance of Commercial Papers (CPs) / Medium Term Notes (MTNs) Programme of up to RM500 million (CP/MTN Programme). The CP/MTN Programme is for a tenure of 7 years.

10.1 Medium Term Notes

On 28 December 2011, the Company issued MTNs amounting to RM150 million under the CP/MTN Programme. The Company repaid RM100 million (2014: NIL) of the MTNs issued during the year. The remaining MTNs issued are as follows:

Tenure (years) Interest rate (per annum) Maturity date Nominal value

RM’000

5 3.78% 27 December 2016 50,000

The interest is payable every half yearly and the principal is repayable in full upon maturity.

10.2 Commercial Papers

On 19 January 2015, the Company issued CPs amounting to RM25 million under the CP/MTN Programme. Subsequent to the balance sheet date, the CPs matured and the entire RM25 million was repaid on 10 July 2015.

pg.103

GUINNESS ANCHOR

BERHAD

Page 106: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

11. Deferred tax liabilities

Recognised deferred tax assets / (liabilities)

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net

2015 2014 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

Property, plant and equipment 1,045 2,264 (37,438) (39,704) (36,393) (37,440)

Other items 151 2,062 (12,256) (7,477) (12,105) (5,415)

Tax assets/(liabilities) 1,196 4,326 (49,694) (47,181) (48,498) (42,855)

Set off of tax (1,196) (4,326) 1,196 4,326 - -

Net tax liabilities - - (48,498) (42,855) (48,498) (42,855)

Company

Property, plant and equipment - - (37,438) (39,704) (37,438) (39,704)

Other items 60 361 (4) - 56 361

Tax assets/(liabilities) 60 361 (37,442) (39,704) (37,382) (39,343)

Set off of tax (60) (361) 60 361 - -

Net tax liabilities - - (37,382) (39,343) (37,382) (39,343)

Movement in temporary differences during the year

At1.7.2013

Recognisedin profitor loss

(Note 15)

At30.6.2014/

1.7.2014

Recognisedin profitor loss

(Note 15)At

30.6.2015

RM’000 RM’000 RM’000 RM’000 RM’000

Group

Property, plant and equipment (32,148) (5,292) (37,440) 1,047 (36,393)

Other items (8,070) 2,655 (5,415) (6,690) (12,105)

(40,218) (2,637) (42,855) (5,643) (48,498)

Company

Property, plant and equipment (33,655) (6,049) (39,704) 2,266 (37,438)

Other items 1,107 (746) 361 (305) 56

(32,548) (6,795) (39,343) 1,961 (37,382)

pg.104

GUINNESS ANCHOR

BERHAD

Page 107: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

12. Trade and other payables

Group Company

Note 2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Trade

Amount due to related parties 12.1 1,248 1,096 1,248 1,096

Trade payables 37,724 52,563 16,709 23,131

38,972 53,659 17,957 24,227

Non-trade

Amount due to related parties 12.1 9,672 13,016 - 1,244

Amount due to a subsidiary 12.1 - - 100 100

Other payables 1,923 2,400 1,445 2,057

Accrued expenses 12.2 142,440 78,545 22,726 14,918

154,035 93,961 24,271 18,319

193,007 147,620 42,228 42,546

12.1 Amount due to related parties and a subsidiary

The trade amount due to related parties is subject to normal trade terms.

The non-trade amounts due to related parties and a subsidiary are unsecured, interest free and repayable on demand.

12.2 Accrued expenses

Included in accrued expenses of the Group are accruals for promotion expenses of RM89,751,000 (2014: RM52,454,000).

13. Finance income

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Interest income received from deposits placed with a licensed bank 2,622 2,576 2,588 2,539

Interest income received from staff loans 9 15 4 12

Recognised in profit or loss 2,631 2,591 2,592 2,551

pg.105

GUINNESS ANCHOR

BERHAD

Page 108: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

14. Finance costs

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Interest expense of financial liabilities that are not at fair value through profit or loss:

- Commercial papers 1,299 6,065 1,299 6,065

- Medium term notes 3,872 1,144 3,872 1,144

- Revolving credit 255 159 255 159

- Export billing 167 45 167 45

Recognised in profit or loss 5,593 7,413 5,593 7,413

15. Tax expense

Recognised in profit or loss

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Current tax expense

Malaysian

- current year 72,496 64,498 20,711 1,135

- under / (over) provision in prior year 67 446 (452) 116

Total current tax recognised in profit or loss 72,563 64,944 20,259 1,251

Deferred tax expense

Origination and reversal of temporary differences 2,787 4,294 (2,498) 6,754

Under / (Over) provision in prior year 2,856 (1,657) 537 41

Total deferred tax recognised in profit or loss (Note 11) 5,643 2,637 (1,961) 6,795

Total income tax expense 78,206 67,581 18,298 8,046

Reconciliation of tax expense

Profit for the year 214,193 198,206 187,825 246,593

Total income tax expense 78,206 67,581 18,298 8,046

Profit excluding tax 292,399 265,787 206,123 254,639

Income tax calculated using Malaysian tax rate of 25% (2014: 25%) 73,100 66,447 51,531 63,660

Non-deductible expenses 2,183 2,345 868 1,205

Tax exempt dividend - - (34,186) (56,976)

Under / (Over) provision in prior year 2,923 (1,211) 85 157

78,206 67,581 18,298 8,046

pg.106

GUINNESS ANCHOR

BERHAD

Page 109: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

16. Profit for the year

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Profit for the year is arrived at after charging:

Amortisation of prepaid contractual promotion expenses 46,489 35,030 - -

Amortisation of intangible assets 10,758 9,664 10,756 9,664

Auditors’ remuneration

- Statutory audit

KPMG 160 160 96 96

- Other services

KPMG 87 42 33 32

Affiliates of KPMG 61 68 32 46

Depreciation of property, plant and equipment 30,968 31,517 22,896 24,043

Hire of equipment 1,623 1,506 660 708

Impairment loss on trade receivables 824 - - -

Intangible assets written off 214 175 214 175

Net realised loss on foreign exchange - 2,730 - 2,164

Net unrealised loss on foreign exchange - 66 - 66

Personnel expenses (including key management personnel):

- Contributions to state plans 11,232 10,980 3,298 5,070

- Wages, salaries and others 90,079 73,110 27,027 31,696

Property, plant and equipment written off 2,791 254 2,779 252

Rental expense on buildings 3,027 2,729 503 43

and after crediting:

Dividend income from unquoted subsidiary - - 136,742 227,904

Gain on disposal of property, plant and equipment 1,111 944 206 292

Net realised gain on foreign exchange 1,262 - 703 -

Net unrealised gain on foreign exchange 40 - 44 -

Reversal of impairment loss on trade receivables - 237 - -

pg.107

GUINNESS ANCHOR

BERHAD

Page 110: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

17. Earnings per ordinary stock unit

Basic earnings per ordinary stock unit

The calculation of basic earnings per ordinary stock unit at 30 June 2015 was based on the profit attributable to ordinary shareholders of RM214,193,000 (2014: RM198,206,000) and a weighted average number of ordinary stock unit outstanding of 302,098,000 (2014: 302,098,000).

Weighted average number of ordinary stock unit

Group

2015 2014

’000 ’000

Issued ordinary stock unit at 30 June 302,098 302,098

Basic earnings per ordinary stock unit (sen) 70.9 65.6

Diluted earnings per ordinary stock unit

There were no diluted earnings per ordinary stock unit for the Group as at 30 June 2015 and 2014.

18. Dividends

Dividends recognised by the Company are:

Sen perstock unit

Totalamount Date of payment

RM’000

2015

Interim 2015 ordinary 20.00 60,420 22 April 2015

Final 2014 ordinary 44.50 134,434 31 December 2014

Total amount 194,854

2014

Interim 2014 ordinary 20.00 60,420 25 April 2014

Final 2013 ordinary 48.50 146,517 27 December 2013

Total amount 206,937

The Directors now recommend the declaration of a final ordinary dividend of 51 sen per 50 sen stock unit under the single tier tax system totalling RM154,069,980 in respect of the financial year ended 30 June 2015 which if approved by the owners of the Company will be payable on 31 December 2015.

pg.108

GUINNESS ANCHOR

BERHAD

Page 111: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

19. Operating segment

The Group’s business is focused only in malt liquor brewing including production, packaging, marketing and distribution of its products, principally in Malaysia. Approximately 1% (2014: 1%) of the total sales is exported, mainly to Asian countries. As such, only one reportable segment analysis is prepared. The Managing Director of the Company (the chief operating decision maker) reviews internal management reports at least on a monthly basis.

Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Managing Director of the Company. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of the segment relative to other entities that operate within this industry.

Segment assets and liabilities Segment assets and liabilities information is neither included in the internal management reports nor provided regularly to the Managing

Director of the Company. Hence, no disclosure is made on segment assets and liabilities.

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

Group

2015 2014

RM’000 RM’000

Total additions to property, plant and equipment and intangible assets 38,429 39,280

2015 2014

RM’000 RM’000

Segment profit 292,399 265,787

Included in the measure of segment profit are:

Revenue from external customers 1,725,741 1,597,653

Depreciation and amortisation (41,726) (41,181)

Not included in the measure of segment profit but provided to the Managing Director of the Company

Net finance costs (2,962) (4,822)

Reconciliation of reportable segment revenue, profit and other material items

Group

2015 2014

RM’000 RM’000

Segment revenue

Revenue from external customers 1,725,741 1,597,653

Revenue from internal customers 23,144 12,934

Consolidated revenue 1,748,885 1,610,587

Net finance costs

Finance income 2,631 2,591

Finance costs (5,593) (7,413)

Consolidated net finance costs (2,962) (4,822)

No reconciliation is performed for reportable segment profit, depreciation and amortisation to consolidated figures as there are no differences.

pg.109

GUINNESS ANCHOR

BERHAD

Page 112: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments

20.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:(a) Loans and receivables (L&R);(b) Financial liabilities measured at amortised cost (FL).

Carrying amount

L&R/(FL)

RM’000 RM’000

2015

Financial assets

Group

Receivables and deposits 271,706 271,706

Cash and cash equivalents 52,294 52,294

324,000 324,000

Company

Receivables and deposits 42,390 42,390

Cash and cash equivalents 51,157 51,157

93,547 93,547

Financial liabilities

Group

Trade and other payables (193,007) (193,007)

Borrowings (75,000) (75,000)

(268,007) (268,007)

Company

Trade and other payables (42,228) (42,228)

Borrowings (75,000) (75,000)

(117,228) (117,228)

2014

Financial assets

Group

Receivables and deposits 303,202 303,202

Cash and cash equivalents 61,804 61,804

365,006 365,006

Company

Receivables and deposits 113,789 113,789

Cash and cash equivalents 54,499 54,499

168,288 168,288

pg.110

GUINNESS ANCHOR

BERHAD

Page 113: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments (continued)

20.1 Categories of financial instruments (continued)

Carrying amount

L&R/(FL)

RM’000 RM’000

2014

Financial liabilities

Group

Trade and other payables (147,620) (147,620)

Borrowings (150,000) (150,000)

(297,620) (297,620)

Company

Trade and other payables (42,546) (42,546)

Borrowings (150,000) (150,000)

(192,546) (192,546)

20.2 Net gains and losses arising from financial instruments

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Net gains/(losses) on:

Loans and receivables 2,366 2,828 2,592 2,551

Financial liabilities measured at amortised cost (4,850) (10,209) (4,846) (9,643)

(2,484) (7,381) (2,254) (7,092)

20.3 Financial risk management

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

• Credit risk• Liquidity risk• Market risk

20.3.1 Credit risk

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

(a) Receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. The Group requires collateral to be pledged by all customers to cover a percentage of the credit limit granted to them.

pg.111

GUINNESS ANCHOR

BERHAD

Page 114: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments (continued)

20.3 Financial risk management (continued)

20.3.1 Credit risk (continued)

(a) Receivables (continued)

Exposure to credit risk, credit quality and collateral

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

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

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

Group

2015 2014

RM’000 RM’000

Malaysia 256,918 286,630

Others 2,493 3,344

259,411 289,974

The carrying amounts of collaterals for trade receivables as at the end of the reporting period were:

Group

Carrying amounts

2015 2014

RM’000 RM’000

Type of collateral

Bank guarantees 48,298 47,008

Cash deposits - 2,499

Properties charged* 29,762 31,097

Quoted shares pledged* 1,344 2,016

79,404 82,620

* The carrying amounts of properties charged and quoted shares pledged are based on the market value at the date they were charged or pledged to the Group.

pg.112

GUINNESS ANCHOR

BERHAD

Page 115: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments (continued)

20.3 Financial risk management (continued)

20.3.1 Credit risk (continued)

(a) Receivables (continued)

Impairment losses

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

GrossIndividual

impairment Net

RM’000 RM’000 RM’000

Group

2015

Not past due 251,933 - 251,933

Past due 1 - 30 days 3,876 - 3,876

Past due 31 - 120 days 75 - 75

Past due more than 120 days 6,310 (2,783) 3,527

262,194 (2,783) 259,411

2014

Not past due 280,947 - 280,947

Past due 1 - 30 days 4,845 - 4,845

Past due 31 - 120 days 3,497 - 3,497

Past due more than 120 days 7,069 (6,384) 685

296,358 (6,384) 289,974

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

Group

2015 2014

RM’000 RM’000

At 1 July 6,384 6,621

Impairment loss recognised 824 -

Impairment loss reversed - (237)

Impairment loss written off (4,425) -

At 30 June 2,783 6,384

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

pg.113

GUINNESS ANCHOR

BERHAD

Page 116: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments (continued)

20.3 Financial risk management (continued)

20.3.1 Credit risk (continued)

(b) Inter company balances

Risk management objectives, policies and processes for managing the risk

The Company provides credit terms and unsecured advances to subsidiaries and related parties and monitors their results regularly.

Exposure to credit risk, credit quality and collateral

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

Advances are only provided to subsidiaries which are wholly owned by the Company.

Impairment losses

As at the end of the reporting period, there was no indication that the inter-company balances are not recoverable.

(c) Cash and cash equivalents

Risk management objectives, policies and processes for managing the risk

The Group and the Company are also exposed to counterparty credit risk from financial institutions through fund placement activities. These exposures are managed in accordance with the existing guidelines and procedures that define the parameters within which the investment activities shall be undertaken in order to achieve the Group’s investment objective of preserving capital and generating additional returns above appropriate benchmarks within allowable risk parameters. Fund placements are only made with reputable licensed financial institutions with high creditworthiness.

Exposure to credit risk, credit quality and collateral

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

In view of the sound credit rating of counterparties, management does not expect any counterparties to fail to meet their obligations.

20.3.2 Liquidity risk

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

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

pg.114

GUINNESS ANCHOR

BERHAD

Page 117: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments (continued)

20.3 Financial risk management (continued)

20.3.2 Liquidity risk (continued)

Maturity analysis

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period based on undiscounted contractual payments:

Carryingamount

Contractualinterest rate/

couponContractualcash flows

Under1 year

1 – 2years

2- 5years

Group RM’000 RM’000 RM’000 RM’000 RM’000

2015

Non-derivative financial liabilities

Borrowings

- Medium Term Notes (unsecured) 50,000 3.78% 52,832 1,890 50,942 -

- Commercial Papers (unsecured)

25,000 4.35% 25,000 25,000 - -

Trade and other payables 193,007 - 193,007 193,007 - -

268,007 270,839 219,897 50,942 -

2014

Non-derivative financial liabilities

Borrowings

- Medium Term Notes (unsecured) 150,000 3.70% - 3.78% 156,527 103,705 1,890 50,932

Trade and other payables 147,620 - 147,620 147,620 - -

297,620 304,147 251,325 1,890 50,932

Company

2015

Non-derivative financial liabilities

Borrowings

- Medium Term Notes (unsecured) 50,000 3.78% 52,832 1,890 50,942 -

- Commercial Papers (unsecured)

25,000 4.35% 25,000 25,000 - -

Trade and other payables 42,228 - 42,228 42,228 - -

117,228 120,060 69,118 50,942 -

2014

Non-derivative financial liabilities

Borrowings

- Medium Term Notes (unsecured) 150,000 3.70% - 3.78% 156,527 103,705 1,890 50,932

Trade and other payables 42,546 - 42,546 42,546 - -

192,546 199,073 146,251 1,890 50,932

pg.115

GUINNESS ANCHOR

BERHAD

Page 118: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments (continued)

20.3 Financial risk management (continued)

20.3.3 Market risk

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

(a) Currency risk

The Group is exposed to foreign currency risk through normal trading activities on sales and purchases that are denominated in currency other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily U.S. Dollar (USD), Singapore Dollar (SGD), Euro Dollar (EURO) and Thai Baht (THB).

Risk management objectives, policies and processes for managing the risk

The Group uses forward exchange contracts to hedge its foreign currency risk. There is no outstanding forward exchange contract as at the end of the reporting period.

Exposure to foreign currency risk

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

Denominated in

USD SGD EURO THB

Group RM’000 RM’000 RM’000 RM’000

2015

Trade receivables 2,492 - - -

Trade payables (3,126) (3,995) (2,364) (81)

Net exposure (634) (3,995) (2,364) (81)

2014

Trade receivables 4,081 - - -

Trade payables (2,197) - (516) (1,015)

Net exposure 1,884 - (516) (1,015)

As foreign currency risk arising from Group’s operations is not material, sensitivity analysis is hence not presented.

pg.116

GUINNESS ANCHOR

BERHAD

Page 119: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments (continued)

20.3 Financial risk management (continued)

20.3.3 Market risk (continued)

(b) Interest rate risk

The Group’s fixed rate short-term deposits placed with a licensed bank and its fixed rate borrowings are exposed to a risk of change in their fair values due to changes in interest rates. Short term receivables and payables are not significantly exposed to interest rate risk.

Risk management objectives, policies and processes for managing the risk

The Group does not have a formal policy in place for managing the risk arising from interest rate. The fluctuation of interest rate is however monitored closely by the Group.

Exposure to interest rate risk

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

Group and Company

2015 2014

RM’000 RM’000

Fixed rate instruments

Financial assets - 671

Financial liabilities (75,000) (150,000)

(75,000) (149,329)

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

20.4 Fair value information

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

The table below analyses the financial instruments not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in the statements of financial position.

2015 2014

Carryingamount

Fair valueLevel 3

Carryingamount

Fair valueLevel 3

RM’000 RM’000 RM’000 RM’000

Group and Company

Borrowings (75,000) (75,000) (150,000) (150,000)

pg.117

GUINNESS ANCHOR

BERHAD

Page 120: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

20. Financial instruments (continued)

20.4 Fair value information (continued)

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period.

Transfers between Level 1 and Level 2 fair values

There has been no transfer between Level 1 and Level 2 fair values during the financial year (2014: no transfer in either directions).

Level 3 fair value Level 3 fair value is estimated using unobservable inputs for the financial liabilities. The fair value of long term liabilities are determined

using the discounted cash flows valuation technique.

Interest rates used to determine fair value

The interest rate used to discount estimated cash flows, where applicable, is as follows:

2015 2014

Borrowings 3.78% - 4.35% 3.70% - 3.78%

21. Capital management

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Group defines as result from operating activities divided by total equity attributable to owners of the Company. The Board of Directors also monitors the level of dividends to owners of the Company.

The Group monitors and maintains a balanced level of total equity to ensure the Group has adequate capital to support its future development and the payment of dividends to owners of the Company. There was no change in the Group’s approach to capital management during the financial year.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than the 25 percent of the issued and paid-up capital and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

22. Operating leases

Leases as lessee

Non-cancellable operating lease rentals are payable as follows:

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Less than one year 2,837 2,947 1,898 1,516

Between one and five years 4,117 2,119 3,688 1,393

6,954 5,066 5,586 2,909

The Group leases a number of warehouses and factory facilities under operating leases. The leases typically run for a period of 1 to 5 years with an option to renew the lease after that date.

pg.118

GUINNESS ANCHOR

BERHAD

Page 121: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

23. Capital commitments

Group and Company

2015 2014

RM’000 RM’000

Capital expenditure commitments

Property, plant and equipment

Authorised but not contracted for 39,669 109,477

Authorised and contracted for within one year 3,629 3,935

43,298 113,412

24. Related parties

Identity of related parties

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

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

The Group has related party relationship with its ultimate holding corporation, substantial shareholders of the ultimate holding corporation, subsidiaries and key management personnel.

The Directors regard GAPL Pte. Ltd., a corporation incorporated in the Republic of Singapore, as the ultimate holding corporation. GAPL Pte. Ltd. is a joint venture corporation whose ultimate owners are Diageo Plc., a corporation incorporated in England and Wales, and Heineken Asia Pacific Pte. Ltd. (HAPPL), a corporation incorporated in the Republic of Singapore. HAPPL is owned by Heineken N.V., a corporation incorporated in Netherlands.

Significant related party transactions

Significant related party transactions of the Group and the Company other than those disclosed in note 25 are shown below. The balances related to the below transactions are shown in notes 6 and 12 respectively.

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

A. Subsidiary

Guinness Anchor Marketing Sdn Bhd

Sale of products - - 1,122,910 1,017,046

Management service fee received and receivable - - 36,299 8,340

pg.119

GUINNESS ANCHOR

BERHAD

Page 122: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

24. Related parties (continued)

Significant related party transactions (continued)

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

B. Related corporations

Diageo Plc and its related corporations

Purchase of goods (12,808) (14,433) (12,808) (14,433)

Sale of products 23,144 12,934 23,144 12,934

Royalties paid and payable (12,951) (11,507) - (5,250)

Heineken N.V. and its related corporations

Purchase of goods (16,009) (13,231) (15,235) (13,231)

Royalties paid and payable (32,105) (27,426) - -

Marketing and technical fees paid and payable (686) (233) (686) (233)

Marketing and advertising service fees received and receivable

19,792 20,383 - -

25. Key management personnel compensation

The key management personnel compensations are as follows:

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Directors

- Fees 597 597 591 591

- Remuneration 1,359 1,289 1,359 1,289

- Meeting attendance allowance 97 92 97 92

Other short term benefits (including estimated monetary value of benefit-in-kind of RM46,000 (2014: RM46,000))

595 490 595 490

2,648 2,468 2,642 2,462

Other key management personnel:

Short-term employee benefits 5,688 6,283 3,823 4,288

8,336 8,751 6,465 6,750

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

26. Comparatives

Certain comparatives were restated to conform with current year disclosure.

pg.120

GUINNESS ANCHOR

BERHAD

Page 123: GAB Annual Report for Bursa submission.pdf

NOTES TO THE FINANCIAL STATEMENTS

27. Supplementary financial information on the breakdown of realised and unrealised profits or losses

The breakdown of the retained earnings of the Group and of the Company as at 30 June, into realised and unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows:

Group Company

2015 2014 2015 2014

RM’000 RM’000 RM’000 RM’000

Total retained earnings of the Company and its subsidiaries:

- realised profits/(losses) 276,326 250,779 99,461 (39,850)

- unrealised (losses)/profits (49,054) (43,779) (37,566) 108,774

227,272 207,000 61,895 68,924

Less: Consolidation adjustments (2,173) (1,240) - -

Total retained earnings 225,099 205,760 61,895 68,924

The determination of realised and unrealised profits is based on the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.

pg.121

GUINNESS ANCHOR

BERHAD

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

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

In the opinion of the Directors, the financial statements set out on pages 81 to 120 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 30 June 2015 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the information set out in Note 27 on page 121 has been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

Datuk Seri Saw Choo BoonDirector

Hans EssaadiDirector

Petaling Jaya,14 August 2015

I, Atul Chhaparwal, the officer primarily responsible for the financial management of Guinness Anchor Berhad, do solemnly and sincerely declare that the financial statements set out on pages 81 to 121 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named in Petaling Jaya on 14 August 2015.

Atul Chhaparwal

Before me:

Commissioner for Oaths

Raymond Cha Kar SiangNo. B362Suite 607, 6th floor, Block EPhileo Damansara 19, Jalan 16/11, Off Jalan Damansara46350 Petaling Jaya, Selangor

GUINNESS ANCHOR

BERHAD

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Report on the Financial Statements

We have audited the financial statements of Guinness Anchor Berhad, which comprise the statements of financial position as at 30 June 2015 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 81 to 120.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 30 June 2015 and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

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

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

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF GUINNESS ANCHOR BERHAD

GUINNESS ANCHOR

BERHAD

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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF GUINNESS ANCHOR BERHAD(COMPANY NO. 5350-X)(INCORPORATED IN MALAYSIA)

Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 27 on page 121 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Other Matters

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

KPMG Chew Beng HongFirm Number: AF 0758 Approval Number: 2920/02/16(J)Chartered Accountants Chartered Accountant

Petaling Jaya, Malaysia14 August 2015

GUINNESS ANCHOR

BERHAD

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PROPERTIESOWNED BY THE GROUP

Address / Location

Landarea

(acres) Existing use Tenure

Approximateage of building

(years)

Net BookValue

At 30 June 2015(RM’000)

Date of Acquisition /Revaluation*

Lot 1135, Batu 9Jalan Klang Lama46000 Petaling JayaSelangor

20.84 Office building & factory

Leasehold expiring23 September 2063

49 53,645 30 September 1984*

120 Air KerohIndustrial Estate75450 Melaka

1.07 Office building & store

Leasehold expiring13 January 2080

33 325 30 September 1984*

Lot 123 SemambuIndustrial Site25350 KuantanPahang

0.52 Office building & store

Leasehold expiring5 March 2046

33 275 30 September 1984*

Lot 1136 Batu 9Jalan Klang Lama46000 Petaling JayaSelangor

2.88 Storage Freehold Not applicable 4,037 31 December 1991

58,282

* The revaluation of properties was carried out primarily for the purpose of bonus issue in 1984.

GUINNESS ANCHOR

BERHAD

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UTILISATION OF PROCEEDS

There were no proceeds raised from corporate proposals during the financial year.

SHARE BUY-BACK

There was no share buy-back by the Company during the financial year.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

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

DEPOSITORY RECEIPT PROGRAMME

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

SANCTIONS / PENALTIES

There were no sanctions and/or penalties imposed on the Company and its subsidiaries by the relevant regulatory bodies during the financial year, which have material impact on the operations or financial position of the Group.

NON-AUDIT FEES

The amount of non-audit fees paid by the Group to external auditors, Messrs KPMG and its affiliated companies for the financial year ended 30 June 2015 amounted to RM147,600. This amount was incurred in respect of the following services provided to the Group:

• Tax compliance services: RM60,600• Review of the Statement of Risk Management and Internal Control: RM20,000• Other services in relation to commercial activities carried out by the Group: RM10,000• Review of the breakdown of realised and unrealised gains / losses: RM12,000• Review of sales tax special refund information: RM45,000

VARIATION IN RESULTS

There was no variation between the audited financial results in the audited financial statements and the unaudited financial results for the financial year ended 30 June 2015 announced by the Company on 14 August 2015.

PROFIT ESTIMATE, FORECAST OR PROJECTION

The Company did not issue any profit estimate, forecast or projection during the financial year.

PROFIT GUARANTEE

There were no profit guarantees given by the Company and its subsidiaries during the financial year.

MATERIAL CONTRACTS

There were no material contracts (not being contracts entered into in the ordinary course of business) entered into by the Company and/or its subsidiaries involving the interest of Directors and major Shareholders, either still subsisting at the end of the financial year ended 30 June 2015 or entered into since the end of the previous financial year.

CONFLICT OF INTEREST

None of the Directors have any family relationship with other Directors and / or major Shareholder of the Company, nor any personal interest in any business arrangement involving the Company. None of the Directors have had conviction for any offences within the past ten years.

OTHER INFORMATIONGUINNESS ANCHOR

BERHAD

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ANALYSIS OF STOCKHOLDINGSAS AT 8 OCTOBER 2015

Authorised Share Capital - 400,000,000 shares of 50 sen eachIssued and Paid-up Capital - 302,098,000 shares of 50 sen eachClass of Shares - Ordinary stock units of 50 sen eachVoting Rights - One vote per ordinary stock unit

Size of Holdings No. of stockholders %

No. of stock units %

1 – 99 872 7.05 6,622 0.00

100 – 1,000 5,177 41.89 3,700,697 1.22

1,001 – 10,000 5,048 40.84 19,410,187 6.43

10,001 – 100,000 1,120 9.06 32,827,092 10.87

100,001 – 15,104,899 142 1.15 92,083,502 30.48

15,104,900 and above 1 0.01 154,069,900 51.00

TOTAL 12,360 100.00 302,098,000 100.00

Substantial Stockholders as per Register of Substantial Stockholders

Name of Stockholder Direct Indirect

No. of stock units % No. of stock units %

GAPL Pte Ltd 154,069,900 51.00 - -

Aberdeen Asset Management PLC and its subsidiaries 16,589,600 5.49 - -

Aberdeen Asset Management Asia Limited 16,059,600 5.32 - -

Mitsubishi UFJ Financial Group, Inc - 16,115,768# 5.33#

# Deemed interested by virtue of Section 6A(4) of the Companies Act, 1965

Directors’ Interest

According to the Register of Directors’ Shareholdings, none of the Directors (including the spouses or children of the Directors who themselves are not Directors of the Company) holding office as of 8 October 2015 had any interest in the ordinary stock units of the Company or its related corporations.

GUINNESS ANCHOR

BERHAD

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30 Largest Stockholders

No. of stock units %

1. GAPL Pte Ltd 154,069,900 51.00

2. Malaysia Nominees (Tempatan) Sendirian Berhad

Great Eastern Life Assurance (Malaysia) Berhad (Par 1) 10,217,480 3.38

3. HSBC Nominees (Asing) Sdn Bhd

BNP Paribas Secs Svs Lux for Aberdeen Global 6,819,100 2.26

4. HSBC Nominees (Asing) Sdn Bhd

BNP Paribas Secs Svs Jersey for Aberdeen Asian

Income Fund Limited 3,477,600 1.15

5. UOB Kay Hian Nominees (Asing) Sdn Bhd

Exempt An for UOB Kay Hian Pte Ltd ( A/C Clients ) 3,251,129 1.08

6. Cartaban Nominees (Asing) Sdn Bhd

RBC Investor Services Bank for Vontobel Fund – Far East Equity 2,723,909 0.90

7. Citigroup Nominees (Asing) Sdn Bhd

Exempt An for Citibank New York (Norges Bank 9) 2,659,000 0.88

8. Hong Leong Assurance Berhad

As Beneficial Owner (Life Par) 2,561,800 0.85

9. Maybank Nominees (Asing) Sdn Bhd

Exempt An for DBS Bank Limited (Client A/C) 2,550,000 0.85

10. HSBC Nominees (Asing) Sdn Bhd

BNP Paribas Secs Svs Paris for Aberdeen Asian

Smaller Companies Investment Trust Plc 2,250,000 0.74

11. DB (Malaysia) Nominee (Asing) Sdn Bhd

SSBT Fund AM4N for Aberdeen Institutional Commingled Funds LLC 2,179,000 0.72

12. Tokio Marine Life Insurance Malaysia Bhd

As Beneficial Owner (PF) 2,175,400 0.72

13. Tai Tak Estates Sdn Bhd 2,156,000 0.71

14. CIMSEC Nominees (Asing) Sdn Bhd

Exempt An for CIMB Securities (Singapore) Pte Ltd (Retail Clients) 1,889,070 0.63

15. Chinchoo Investment Sdn.Berhad 1,865,000 0.62

ANALYSIS OF STOCKHOLDINGSAS AT 8 OCTOBER 2015

GUINNESS ANCHOR

BERHAD

pg.128

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30 Largest Stockholders (Continued)

No. of stock units %

16. Chang Sin Fong 1,430,000 0.47

17. Kam Loong Mining Sdn Bhd 1,320,000 0.44

18. Gan Teng Siew Realty Sdn.Berhad 1,277,000 0.42

19. Key Development Sdn.Berhad 1,250,000 0.41

20. HLB Nominees (Asing) Sdn Bhd

Tan Eng Chin Holdings (Pte.) Limited (Cust.Sin 40555) 1,150,000 0.38

21. Citigroup Nominees (Asing) Sdn Bhd

Exempt An for OCBC Securities Private Limited (Client A/C-Nr) 1,100,189 0.36

22. CIMSEC Nominees (Tempatan) Sdn Bhd

Exempt An for CIMB Securities (Singapore) Pte Ltd (Retail Clients) 1,088,700 0.36

23. Chan Emily 1,052,000 0.35

24. UOBM Nominees (Asing) Sdn Bhd

Banque De Luxembourg for Bl Emerging Markets 971,100 0.32

25. HSBC Nominees (Asing) Sdn Bhd

Exempt An for JPMorgan Chase Bank, National Association (Taiwan) 941,099 0.31

26. Citigroup Nominees (Tempatan) Sdn Bhd

Exempt An for AIA Bhd. 909,700 0.30

27. Mrs Chan Lam Choon Nee Mun Swee Heong 896,400 0.30

28. Malaysia Nominees (Tempatan) Sendirian Berhad

Great Eastern Life Assurance (Malaysia) Berhad (Par 3) 880,000 0.29

29. Citigroup Nominees (Asing) Sdn Bhd

CBNY for DFA Emerging Markets Small Cap Series 877,000 0.29

30. Yeoh Saik Khoo Sendirian Berhad 837,269 0.28

216,824,845 71.77

ANALYSIS OF STOCKHOLDINGSAS AT 8 OCTOBER 2015

GUINNESS ANCHOR

BERHAD

pg.129

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As Special Business

9. To consider and, if thought fit, to pass the following resolution:

PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (PROPOSED SHAREHOLDERS’ MANDATE)

THAT, pursuant to Paragraph 10.09 of the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities), the Company and / or its subsidiaries (the Group) be and are hereby authorised to enter into any of the recurrent transactions of a revenue or trading nature as set out in Section 2.3 of the Circular to Shareholders dated 3 November 2015 with the related parties mentioned therein which are necessary for the Group’s day-to-day operations, subject further to the following:

(i) the transactions are in the ordinary course of business on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of the Company; and

(ii) disclosure of the aggregate value of the transactions of the Proposed Shareholders’ Mandate conducted during the financial year will be disclosed in the Annual Report for the said financial year,

AND THAT such approval shall continue to be in force until:

(i) the conclusion of the next Annual General Meeting (AGM) of the Company at which time it will lapse, unless by a resolution passed at the Meeting, the authority is renewed;

(ii) the expiration of the period within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (the Act) (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by the Company in a general meeting,

whichever is earlier;

NOTICE OFANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 51st Annual General Meeting of Guinness Anchor Berhad (the Company) will be held at Grand Ballroom, Connexion @ Nexus, No. 7, Jalan Kerinchi, Bangsar South City, 59200 Kuala Lumpur, Malaysia on Wednesday, 25 November 2015 at 10.00 a.m. for the following purposes:

AGENDA

As Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 30 June 2015 together with the Directors’ and Auditors’ Reports thereon.

2. To approve the payment of a final single tier dividend of 51 sen per 50 sen stock unit in respect of the financial year ended 30 June 2015.

3. To re-elect Mr Hans Essaadi who retires by rotation pursuant to Article 89 of the Company’s Articles of Association as a Director of the Company.

4. To re-elect Datin Ngiam Pick Ngoh, Linda who retires by rotation pursuant to Article 89 of the Company’s Articles of Association as a Director of the Company.

5. To elect Mr Yong Weng Hong who retires pursuant to Article 96 of the Company’s Articles of Association as a Director of the Company.

6. To elect Mr Frans Erik Eusman who retires pursuant to Article 96 of the Company’s Articles of Association as a Director of the Company.

7. To approve the proposed increase and payment of Directors’ fee of up to RM685,000 for the financial year ending 30 June 2016.

8. To re-appoint Messrs KPMG as Auditors of the Company and to authorise the Directors to fix their remuneration.

Ordinary Resolution 1

Ordinary Resolution 2

Ordinary Resolution 3

Ordinary Resolution 4

Ordinary Resolution 5

Ordinary Resolution 6

Ordinary Resolution 7

Ordinary Resolution 8

GUINNESS ANCHOR

BERHAD

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AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things as they may consider expedient or necessary to give effect to the Proposed Shareholders’ Mandate.

Ordinary Resolution 9

10. To consider any other business of which due notice have been given.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

Subject to the approval of Stockholders, a final single tier dividend of 51 sen per 50 sen stock unit in respect of the financial year ended 30 June 2015 will be paid on 31 December 2015 to Stockholders registered at the close of business on 10 December 2015.

A Depositor shall qualify for entitlement to the dividend only in respect of:

(a) Shares deposited into the Depositor’s securities account before 12.30 pm on 7 December 2015 in respect of shares which are exempted from mandatory deposit;

(b) Shares transferred into the Depositor’s securities account before 4.00 pm on 10 December 2015 in respect of ordinary transfers; and

(c) Shares bought on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

By Order of the Board

Ng Sow Hoong Company SecretaryMAICSA 7027552

Petaling Jaya 3 November 2015

NOTES:

1. Pursuant to Article 56 of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 12 November 2015. Only a depositor whose name appears on such Record of Depositors shall be entitled to attend and vote at the meeting.

2. A member entitled to attend and vote at the meeting may only appoint one (1) proxy to attend and vote in his stead. A proxy may but need not be a member of the Company and there shall be no restrictions as to the qualification of the proxy. If the appointer is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of an officer or attorney duly authorised.

3. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficial owners in one securities account (Omnibus Account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds. Where an exempt authorised nominee appoints more than one proxy, the proportion of shareholdings to be represented by each proxy must be specified in the Form of Proxy. An exempt authorised nominee with more than one securities account must submit a separate Form of Proxy for each securities account.

4. For a proxy to be valid, the original Form of Proxy must be deposited at the Share Registrar’s Office, Tricor Investor Services Sdn Bhd, Unit 32-01, Level 32 Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Any alteration to the Form of Proxy must be initialed.

5. Registration Registration will commence at 8.00 a.m. and close promptly at 10.30 a.m. on the day of the meeting. Members and proxies are advised to be punctual. For

verification purpose, members and proxies are required to produce their original identity card at the registration counter.

Door gifts will be distributed to members or proxies upon their registration as a token of appreciation for their continued support to the Company. Please take note each member or proxy who is present shall be entitled to one (1) door gift only upon registration, irrespective of the number of members he / she represents. For example, in the event that a proxy represents two or more members, he / she shall be entitled to one (1) door gift only.

NOTICE OF ANNUAL GENERAL MEETING GUINNESS ANCHOR

BERHAD

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EXPLANATORY NOTES

Ordinary Resolution 7

- Proposed increase and payment of Directors’ Remuneration for the financial year ending 30 June 2016 It is proposed that the current remuneration for the Non-Executive Directors of the Company be adjusted as follows:

RM

Current Proposed

Annual fee for Non-Executive Director 60,000 75,000

Annual fee for Audit Committee member Nil 5,000

Annual fee for Nomination and Remuneration Committee member Nil 4,000

Annual allowance for Audit Committee Chairman 6,500 8,000

Annual allowance for Nomination and Remuneration Committee Chairman 4,000 6,000

Annual allowance for Board Chairman 100,000 No change

Meeting allowance (per meeting attended) 1,200 No change

The total remuneration payable for the financial year ending 30 June 2016 is estimated to be around RM685,000, calculated based on the above proposal and the current composition of the Board and Board Committees. The proposed adjustment will enhance the Board’s ability to attract and retain Directors of high calibre with the necessary skills and experience to drive the Group’s success. It is also to align the Directors’ remuneration of the Company to other fast-moving consumer goods companies.

The proposed motion, if passed, will facilitate payment of remuneration to Non-Executive Directors of the Company based on the above adjustment during the financial year ending 30 June 2016.

Ordinary Resolution 9

- Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a revenue or trading nature Ordinary Resolution 9, if passed, will allow the Group to enter into the recurrent related party transactions in the ordinary course of business and the necessity

to convene separate general meetings from time to time to seek shareholders’ approval as and when such recurrent related party transactions occur, would be eliminated. This would reduce substantial administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available to the Group. The Shareholders’ Mandate is subject to renewal on an annual basis.

Further information on the Proposed Shareholders’ Mandate is set out in the Circular to Shareholders of the Company dated 3 November 2015.

NOTICE OF ANNUAL GENERAL MEETING GUINNESS ANCHOR

BERHAD

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I/We _________________________________________________________________________________________________________________________

I/C No. __________________________________________________ / Certificate of Incorporation No. ___________________________________ of

_____________________________________________________________________________________________________________________________

being a Member of GUINNESS ANCHOR BERHAD, hereby appoint _________________________________________________________________

I/C No. ______________________________________________ of _____________________________________________________________________

as my/our proxy to vote for me/us and on my/our behalf at the 51st Annual General Meeting of the Company to be held at Grand Ballroom, Connexion @ Nexus, No.7, Jalan Kerinchi, Bangsar South City, 59200 Kuala Lumpur, Malaysia on Wednesday, 25 November 2015 at 10.00 a.m. and at any adjournment thereof.

My/our proxy is to vote as indicated below:[Please indicate with an ‘X’ in the appropriate space as to how you wish your votes to be cast in respect of our each Resolution. In the absence of specific directions, your proxy will vote or abstain from voting as he or she thinks fit.]

Signed this_____________________________________ day of _______________________________________________ 2015

_______________________________________ Signature or Common Seal of Member

* Only original Forms are valid. Photocopies are not acceptable. Any alteration to the Form of Proxy must be initialed.

By returning / submitting this form, I hereby confirm that i have read, understood and consent to the processing of my personal data as set out in the Personal Data Protection Act 2010 Notice which is published on www.gab.com.my

No. of stock units held:

CDS Account No.:

ORDINARY RESOLUTIONS FOR AGAINST

RESOLUTION 1

RESOLUTION 2

RESOLUTION 3

RESOLUTION 4

RESOLUTION 5

RESOLUTION 6

RESOLUTION 7

RESOLUTION 8

RESOLUTION 9

FORM OF PROXY*Guinness Anchor Berhad(Company No. 5350-X) Incorporated in Malaysia

Page 136: GAB Annual Report for Bursa submission.pdf

NOTES:

1. Pursuant to Article 56 of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to issue a Record of Depositors as at 12 November 2015. Only a depositor whose name appears on such Record of Depositors shall be entitled to attend and vote at the meeting.

2. A member entitled to attend and vote at the meeting may only appoint one (1) proxy to attend and vote in his / her stead. A proxy may but need not be a member of the Company and there shall be no restrictions as to the qualification of the proxy. If the appointer is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of an officer or attorney duly authorised.

3. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficial owners in one securities account (Omnibus Account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds. Where an exempt authorised nominee appoints more than one proxy, the proportion of shareholdings to be represented by each proxy must be specified in the Form of Proxy. An exempt authorised nominee with more than one securities account must submit a separate Form of Proxy for each securities account.

4. For a proxy to be valid, the original Form of Proxy must be deposited at the Share Registrar’s Office, Tricor Investor Services Sdn Bhd, Unit 32-01, Level 32 Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Any alteration to the Form of Proxy must be initialed.

5. Registration Registration will commence at 8.00 a.m. and close promptly at 10.30 a.m. on the day of the meeting. Members and proxies are advised to be punctual. For verification purpose, members and proxies are

required to produce their original identity card at the registration counter.

Door gifts will be distributed to members or proxies upon their registration as a token of appreciation for their continued support to the Company. Please take note each member or proxy who is present shall be entitled to one (1) door gift only upon registration, irrespective of the number of members he / she represents. For example, in the event that a proxy represents two or more members, he / she shall be entitled to one (1) door gift only.

Registrars forGuinness Anchor BerhadTricor Investor Services Sdn Bhd Unit 32-01, Level 32 Tower AVertical Business Suite, Avenue 3Bangsar South, No. 8, Jalan Kerinchi59200 Kuala Lumpur, Malaysia

Affix stamp here

Please fold here to seal

Please fold here to seal

Page 137: GAB Annual Report for Bursa submission.pdf

Connexion @ NexusNo. 7, Jalan Kerinchi,Bangsar South City,59200 Kuala Lumpur,Malaysia.

Page 138: GAB Annual Report for Bursa submission.pdf

CORPORATE OFFICEGuinness Anchor BerhadSungei Way BreweryLot 1135, Batu 9Jalan Klang Lama46000 Petaling JayaSelangor, MalaysiaTel : 603-78614688Fax : 603-78614602

REGIONAL SALES OFFICESGuinness Anchor Marketing Sdn Bhd

Kuala LumpurLot 48, Jalan TigaOff Jalan Chan Sow Lin55200 Kuala LumpurMalaysiaTel : 603-92351999Fax : 603-92351900

ButterworthNo. 9, Lorong Perusahaan Maju 11Taman Perusahaan Pelangi13600 Seberang PraiButterworthMalaysiaTel : 604-5086288Fax : 604-5087288

Penang50-J, Ground Floor, Wisma Hong BeePengkalan Weld10300 Penang, MalaysiaTel : 604-2645227/228Fax : 604-2630227

IpohNo.1 Persiaran Sultan Azlan Shah 331350 IpohPerak, MalaysiaTel : 605-2493088 Fax : 605-2493089

MalaccaLot 120, Ayer Keroh Industrial Estate75450 Malacca, MalaysiaTel : 606-2325772/8249/4986/9308/9309Fax : 606-2322771

GROUP DIRECTORY

Johor BahruNo. 22 (Lot 1569) Jalan DewaniOff Jalan TampoiKawasan Perindustrian Temenggong81100 Johor Bahru, JohorMalaysiaTel : 607-3310100Fax : 607-3312891

Seremban613 Jalan Haruan 4/8Oakland Commercial Centre70300 SerembanNegeri Sembilan, MalaysiaTel : 606-6334647/648/649Fax : 606-6334650

KuantanLot 123, Semambu Industrial Site25350 Kuantan, Pahang, MalaysiaTel : 609-5661900/909Fax : 609-5662523

MentakabNo. 46, Ground and 1st Floor Jalan Bendera MahkotaTaman Bukit Bendera28400 MentakabPahang, MalaysiaTel : 609-2770832

Sarawak

KuchingLot 310, Section 9 KTLDLorong 7, Rubber Road93400 KuchingSarawak, MalaysiaTel : 6082-240099 : 6082-244043/046 Fax : 6082-246787

Miri1st Floor, Lot 2302 Bulatan Commercial CentreJalan Dato Permaisuri98008 Miri, Sarawak, MalaysiaTel : 6085-650755 Fax : 6085-658775

SibuNo. 12 Jalan Tapang Timur96000 SibuSarawak, MalaysiaTel : 6084-326533Fax : 6084-326533

Sabah

Kota KinabaluBuilding No. 19B, Lot 21 Sedco Light Industrial EstateJalan Kilang, Kolombong88450 Kota KinabaluSabah, MalaysiaTel : 6088-324488

SandakanBlock C, Lot 5, Taman Grand ViewJalan Sim Sim90000 SandakanSabah, MalaysiaTel : 6089-271214/210968Fax : 6089-274082

TawauLot 3, TB 4478 Ground & First Floors, Block APusat Komersil Ba ZhongJalan Tawau Lama91000 Tawau, Sabah, MalaysiaTel : 6089-771202/774383Fax : 6089-773275

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GUINNESS ANCHOR BERHAD (5350-X)Sungei Way Brewery

Lot 1135, Batu 9, Jalan Klang LamaP.O. Box 144, 46710 Petaling JayaSelangor Darul Ehsan, Malaysia

Tel: 603-7861 4688Fax: 603-7861 4602