2016 annual report Sleek Linear Contents OVERVIEW 02 our Vision & Our Mission 03 Corporate Information 04 Group Corporate Structure 06 Board of Directors’ Profile 10 Key Senior Management’s Profile

SIGNATURE IN FY 2016 13 Group Financial Highlights 14 Chairman’s Statement 16 Group Managing Director’s Review of Financial Results & Operations 20 Projects Portfolio (FY 2016 Highlights) 24 Latest Awards 26 Corporate & Marketing Events 30 Staff Events 32 our People & Our Social Responsibility

ACCOUNTABILITY 39 nomination Committee Statement 41 Corporate Governance Statement 50 Statement of Responsibility by Directors 51 Additional Compliance Statement 52 Audit and Risk Management Committee Report 54 Statement on Risk Management & Internal Control

FINANCIALS 57 Financial Statements 136 List of Properties 138 Analysis of Shareholdings 141 Analysis of Warrant Holdings 143 notice of Annual General Meeting Form of Proxy Simply Natural

OUR VISION MISSION Delighting and inspiring our & Delivering the ‘Signature customers the world over. Experience’ to all our customers.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 02 ANNUAL REPORT 2016 CORPORATE INFORMATION

BOARD OF DIRECTORS • Dato’ Dr. Mohd Shafei Bin Abdullah • Wong Maw Chuan Independent Non-Executive Chairman Independent Non-Executive Director

• Tan Kee Choong • Yap Khong Group Managing Director Senior Independent Non-Executive Director

• Dato’ Chooi Yoey Sun Group Executive Director

AUDIT AND RISK SHARE REGISTRAR MANAGEMENT COMMITTEE Boardroom Corporate Services (KL) Sdn Bhd Wong Maw Chuan (Chairman) Lot 6.05, Level 6, KPMG Tower, 8 First Avenue Yap Khong Bandar Utama, 47800 Petaling Jaya Dato’ Dr. Mohd Shafei Bin Abdullah Selangor Darul Ehsan Tel: (603) 7720 1188 Fax: (603) 7720 1111 COMPANY SECRETARY Tan Ai Ning (MAICSA 7015852) Te Hock Wee (MAICSA 7054787) PRINCIPAL BANKERS Alliance Bank Malaysia Berhad HSBC Bank Malaysia Berhad REGISTERED OFFICE OCBC Bank (Malaysia) Berhad Standard Chartered Bank Berhad Lot 6.05, Level 6, KPMG Tower 8 First Avenue, Bandar Utama Malayan Banking Berhad 47800 Petaling Jaya, Selangor Darul Ehsan Tel: (603) 7720 1188 Fax: (603) 7720 1111 AUDITORS Crowe Horwath (AF 1018) Level 16, Tower C, Megan Avenue II STOCK EXCHANGE LISTING 12 Jalan Yap Kwan Seng 50450 Kuala Lumpur Main Market Tel: (603) 2788 9999 Bursa Malaysia Securities Berhad Fax: (603) 2788 9998 Stock Name: SIGN Stock Code: 7246

INVESTOR RELATIONS AND ENQUIRIES CORPORATE OFFICE Madam Lim Mee Ding Public and Investor Relations Officer Lot 24, Jalan Teknologi [email protected] Taman Sains Selangor 1 Tel: (603) 6286 7000 Kota Damansara, PJU 5 Fax: (603) 6140 2881 47810 Petaling Jaya, Selangor Darul Ehsan Tel: (603) 6286 7000 Fax: (603) 6286 7100

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 03 MALAYSIA, Peninsular, Sabah & Sarawak

INDONESIA, Jakarta

BRUNEI, Bandar Seri Begawan SRI LANKA, Colombo

PHILIPPINES, Manila, Cebu Island MALDIVES, Male FRENCH POLYNESIA, Tahiti

CAMBODIA, Phnom Penh LEBANON, Beirut VIETNAM, Hanoi

MYANMAR, Yangon INDIA, Hyderabad THAILAND, Bangkok

PAKISTAN, Lahore, Islamabad UAE, Dubai SINGAPORE

GROUP CORPORATE STRUCTURE Signature International Berhad

Signature Signature Kubiq Cabinet Aluminium Sdn Bhd Sdn Bhd Sdn Bhd Signature Signature Signature Interiors Realty Obicorp Sdn Bhd Sdn Bhd Sdn Bhd

A Concept Signature Kitchen Signature Signature Academy Fabriano Kitchen & Bath Sdn Bhd Manufacturing Sdn Bhd Sdn Bhd Sdn Bhd Sdn Bhd (Formerly known as Signature Kitchen Academy Sdn Bhd) (Formerly known as Inspired Business Sdn Bhd) Equal Strategy Pte Ltd

Signature Global Marketing Pte Ltd Flamingo Power Fabriano Kitchen Cabinet (Foshan) Pte Ltd Sdn Bhd Cosentino Quartz (M) Sdn Bhd Signature Kitchen (UK) Pte Limited Signature Design & Technology Sdn Bhd

SIGNATURE INTERNATIONAL BERHAD (754118-K) 04 ANNUAL REPORT 2016 Name of Subsidiary Companies Shareholding Interest Signature Cabinet Sdn Bhd Design, marketing and distribution of kitchen systems, wardrobe systems and built-in kitchen appliances. 100%

Signature Manufacturing Sdn Bhd Manufacturing of kitchen systems and wardrobe systems. 100%

Signature Kitchen Sdn Bhd Retailing of kitchen systems, wardrobe systems and built-in kitchen appliances. 100%

Signature Obicorp Sdn Bhd Marketing and distribution of built-in kitchen appliances and white goods. 100%

Kubiq Sdn Bhd Selling, marketing and distributing kitchen and bedroom cabinets, knockdown furniture and furniture parts, appliances 100% and accessories.

Signature Interiors Sdn Bhd Interior decorators, consultants and planners of the arrangement, decoration and furnishing of 100% office, shops and residential interiors.

Signature Realty Sdn Bhd Investment properties holding. 100%

Signature Academy Sdn Bhd (Formerly known as Signature Kitchen Academy Sdn Bhd) Providing of in-house courses, workshops and supply manpower related to installation of kitchen cabinet, wardrobe 100% and any other related carpentry and kitchen work.

Cosentino Quartz (M) Sdn Bhd Retail solid surface, worktop and related products. 100%

Equal Strategy Pte Ltd Investment holding. 100%

Fabriano Sdn Bhd Investment holding. 100%

Fabriano Kitchen Cabinet (Foshan) Pte Ltd Manufacturing, distribution, import and export of kitchen systems, wardrobe systems, built-in 100% kitchen appliances, lighting and bathroom accessories.

Signature Global Marketing Pte Ltd Marketing and distribution of kitchen systems, wardrobe systems and built-in kitchen appliances. 100%

Signature Kitchen (UK) Pte Limited Marketing, distribution, import and export of kitchen systems, wardrobe systems, built-in kitchen appliances. 100%

A Concept Kitchen & Bath Sdn Bhd (Formerly known as Inspired Business Sdn Bhd) 91.34% Marketing and distribution of built-in kitchen appliances, white goods and bathroom accessories.

Signature Aluminium Sdn Bhd Manufacture, supply, fabrication and installation of aluminum, glass and aluminum related products for the retail 60% and project business.

Flamingo Power Sdn Bhd Property development and investment holding. 60%

Signature Design & Technology Sdn Bhd Manufacture, supply, fabrication and installation of aluminum, glass and aluminum related products for the retail 48% and project business.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 05 BOARD OF DIRECTORS’ PROFILE

DATO’ TAN KEE CHOONG YAP KHONG DATO’ WONG MAW CHUAN DR. MOHD Group Managing Senior Independent CHOOI YOEY SUN Independent Non- SHAFEI BIN Director Non-Executive Director Group Executive Executive Director ABDULLAH Director Independent Non- Executive Chairman

SIGNATURE INTERNATIONAL BERHAD (754118-K) 06 ANNUAL REPORT 2016 Dato’ Dr. Mohd Shafei Bin Abdullah Perdana and also Advisor for Persatuan was appointed to the Board of Signature Alumni Kolej Ke-3 University Malaya International Berhad on 13 September 2013. (ETICHA).

Dato’ Dr. Shafei holds a Bachelor Degree Other than Signature International Berhad, of Economics from University Malaya, a he is the Chairman of UDA Holdings Berhad. Doctorate of Business Administration from European American University and Doctorate He is also a member of the Nomination and of Business Administration (CDBA) from Audit and Risk Management Committees of Oxford Association of Management, United the Company. Kingdom. He has no family relationship with any other He started his career as a teacher in 1979 Director and/or major shareholder of the up to 1982. Later in 1985, he joined a bank Company. He holds 1,326 ordinary shares in as an officer. His political career started in the Company but has no shareholdings in the 2003 where he was appointed as a political subsidiary companies. He has not entered secretary to the Minister of Defence Malaysia into any transaction, whether directly or and served until 2008. Subsequently, he indirectly, that has a conflict of interest with Dato’ served as political secretary to the Minister the Company. He has no conviction for any offence within the past 5 years. Dr. Mohd Shafei of Finance up to May 2013. Bin Abdullah He is the Chairman of Mardi Holdings Sdn. He attended all the five (5) Board meetings of Bhd., Century Software (M) Sdn. Bhd., Jana the Company held during the financial year Independent Non- Tanmia Sdn. Bhd., and Sky Blue Media Sdn. 2016. Executive Chairman, Bhd. He also sits in the Board of Trustees of Age 58, Male, Malaysian Majlis Professor Negara, Yayasan Wangsa

Tan Kee Choong was appointed to the importantly, market penetration throughout Board of Signature International Berhad on Malaysia and business expansion overseas. 20 November 2007. He is currently a Director of Kubiq Sdn He started his career in 1990 when he was Bhd, Signature Obicorp Sdn Bhd, Signature employed as a Sales Executive in Better Aluminium Sdn Bhd, Signature Interiors Living Grand Sdn Bhd, a company in the Sdn Bhd and other subsidiary companies trading of building materials and design of of Signature Cabinet Sdn Bhd. Other than kitchen cabinets, handling retail sales of Signature International Berhad, he is not kitchen cabinets. In 1992, he joined Home a Director of any other public company and Scene Sdn Bhd as a Project Executive listed issuer. handling project sales of kitchen cabinets. He left Home Scene Sdn Bhd in 1994 and He is also the Chairman of the Option Committee of the Company. founded Signature Cabinet Sdn Bhd with Dato’ Chooi Yoey Sun. As disclosed in the Analysis of Shareholdings, he is a major shareholder of the Company. As the co-founder and Group Managing None of his family members have direct or Director, his main responsibility is developing indirect relationship with any director and/or the strategic direction of the Signature Group. major shareholder of the Company. He has Tan Kee Choong He is also in charge of product research not entered into any transaction, whether Group Managing Director, and development on kitchen systems and directly or indirectly, that has a conflict Age 54, Male, Malaysian wardrobe systems. He has approximately 25 of interest with the Company. He has no years of experience in the kitchen systems conviction for any offence within the past 5 industry, gaining his experience through years. a hands-on management style. He has contributed significantly to the production He attended all the five (5) Board meetings of process improvements, product quality, brand the Company held during the financial year recognition, research and development and more 2016.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 07 BOARD OF DIRECTORS’ PROFILE (CONT’D)

Dato’ Chooi Yoey Sun was appointed to the penetration achieved by Signature Kitchen Board of Signature International Berhad on nationwide as well as overseas is a testament 20 November 2007. to his success.

His career started in 1990, where he started He is currently a Director of Kubiq Sdn Bhd, Signature Obicorp Sdn Bhd, Signature his venture in MJKB Sdn Bhd, a company Aluminium Sdn Bhd, Signature Interiors trading in home appliances and furniture. Sdn Bhd and other subsidiary companies Since then, he has developed invaluable of Signature Cabinet Sdn Bhd. Other than hands-on experience in merchandising and Signature International Berhad, he is not a retail distribution outlet. In 1994, he joined Director of any other public company and his partner, Tan Kee Choong, in establishing listed issuer. Signature Cabinet Sdn Bhd. He is also a member of the Remuneration As the co-founder and Group Executive and Option Committees of the Company. Director, he draws on the vast experience amassed from his earlier ventures and As disclosed in the Analysis of Shareholdings, channels it towards spearheading a dynamic he is a major shareholder of the Company. sales and marketing division within the None of his family members have direct or indirect relationship with any director and/or Signature Group. major shareholder of the Company. He has not entered into any transaction, whether Dato’ Chooi Yoey Sun He brings with him approximately 24 directly or indirectly, that has a conflict years of experience in the marketing and Group Executive Director, of interest with the Company. He has no management of kitchen systems. He is Age 53, Male, Malaysian conviction for any offence within the past 5 entrusted with the main task of making years. kitchen and related products as a household necessity as well as making the brand He attended all the five (5) Board meetings of Signature Kitchen a household brand. The the Company held during the financial year current brand recognition and market 2016.

Yap Khong was appointed to the Board Other than Signature International Berhad, he of Signature International Berhad on 20 is not a Director of any other public company November 2007. and listed issuer.

He graduated in 1970 from University of He is the Chairman of the Remuneration Malaya with a Bachelor of Economics and Nomination Committees and a member (Honours) and he is an Associate Member of Audit and Risk Management and Option of the Chartered Institute of Bankers Committees of the Company. (United Kingdom). He has more than 33 years of experience in the banking and He has no family relationship with any other financial sector. He has held various senior Director and/or major shareholder of the management positions in two financial Company and does not hold any shares in the Company and its subsidiary companies. institutions, namely UMBC and Alliance He has not entered into any transaction, Bank Berhad. whether directly or indirectly, that has a conflict of interest with the Company. He has He held the position of Senior Banker in no conviction for any offence within the past Alliance Bank Berhad prior to his retirement in 5 years. 2006, where he was responsible for marketing Yap Khong commercial and corporate businesses. He He attended all the five (5) Board meetings of Senior Independent is also a business advisor to a few private the Company held during the financial year Non-Executive Director, companies. 2016. Age 71, Male, Malaysian

SIGNATURE INTERNATIONAL BERHAD (754118-K) 08 ANNUAL REPORT 2016 BOARD OF DIRECTORS’ PROFILE (CONT’D)

Wong Maw Chuan was appointed to the of the company. Analabs was subsequently Board of Signature International Berhad on promoted to the Main Board of Bursa 20 November 2007. Malaysia and thereafter he resigned as the Executive Director of Analabs on 31 October He graduated in 1987 from Tunku Abdul 2002. In 2002, he set up a consulting firm Rahman College with a Diploma in Financial which provides professional and business Accounting. He subsequently obtained his consulting services to private limited as well professional qualification from The Association as public listed companies. of Chartered Certified Accountants and he is currently a member of the Malaysian He is the Chairman of the Audit and Risk Institute of Accountants and a Fellow Member Management Committee and member of of the Association of Chartered Certified Remuneration and Nomination Committees Accountants (FCCA) as well as a Certified of the Company. Financial Planner (CFP). Other than Signature International Berhad, he He started his career in 1988 as an Audit is not a Director of any other public company Assistant in Roger, Yue, Tan & Associate. In and listed issuer. 1994, he took up the post of Audit Manager at KPMG Peat Marwick where he was He has no family relationship with any other involved in numerous audit assignments, Director and/or major shareholder of the Wong Maw Chuan due diligence and mergers and acquisitions Company and does not hold any shares in the Company and its subsidiary companies. Independent Non-Executive exercises. He left KPMG Peat Marwick in He has not entered into any transaction, Director, Age 52, Male, 1997 and joined Analabs Resources Berhad whether directly or indirectly, that has a Malaysian (“Analabs”) as Chief Financial Officer. He was actively involved in the restructuring of the conflict of interest with the Company. He has company as well as the listing of Analabs on no conviction for any offence within the past the Second Board of Bursa Malaysia. 5 years.

Upon the listing of Analabs on the Second He attended all the five (5) Board meetings of Board of Bursa Malaysia, he was appointed the Company held during the financial year as the Executive Director, mainly in charge of 2016. corporate finance and business development

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 09 KEY SENIOR MANAGEMENT’S PROFILE

Dato’ Chooi Yoey Sun is the co-founder and Group Executive Director of Signature International Berhad. He was appointed since 20 November 2007.

Dato’ Chooi Yoey Sun Dato’ Chooi’s career started in 1990, where he started Group Executive Director his venture in MJKB Sdn Bhd, a company trading in home Aged 53, Male, Malaysian appliances and furniture. Since then, he has developed invaluable hands-on experience in merchandising and retail distribution outlet. In 1994, he joined his partner, Tan Kee Choong, in establishing Cabinet Industries Sdn Bhd (later known as Signature Cabinet Sdn Bhd).

Dato’ Chooi brings with him approximately 24 years of experience in the marketing and management of kitchen systems. He is entrusted with the main task of making kitchen and related products as a household necessity as well as making the brand Signature Kitchen a household brand. As the driving force behind the sales, marketing and project divisions, Dato’ Chooi plays a pivotal role in the brand recognition and retail and project market penetration achieved by Signature Kitchen nationwide as well as overseas.

Dato’ Chooi was conferred the Darjah Indera Mahkota Pahang (D.I.M.P.) which carries the title Dato’ in 2014 for his contribution throughout the years.

He is currently a Director of Kubiq Sdn Bhd, Signature Obicorp Sdn Bhd, Signature Aluminium Sdn Bhd, Signature Interiors Sdn Bhd and other subsidiary companies of Signature Cabinet Sdn Bhd. Other than Signature International Berhad, he is not a Director of any other public company and listed issuer.

As disclosed in the Analysis of Shareholdings, he is a major shareholder of the Company. None of his family members have direct or indirect relationship with any director and/or major shareholder of the Company. He has not entered into any transaction, whether directly or indirectly, that has a conflict of interest with the Company. He has no conviction for any offence within the past 5 years.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 10 ANNUAL REPORT 2016 Tan Kee Choong Group Managing Director Aged 54, Male, Malaysian

(later known as Signature Cabinet Sdn Bhd) with Dato’ Chooi Yoey Sun.

With approximately 25 years of experience in the kitchen systems industry through a hands-on management style, he plays a key role in developing the strategic direction of the Signature Group. He is also in charge of product research and development on kitchen systems and wardrobe systems, and has contributed significantly to the production process improvements, product quality, strategic brand positioning, research and development, and more importantly, market penetration throughout Malaysia and business expansion overseas.

He was awarded the BEST CEO award at Focus Malaysia’s inaugural Best Under Billion Awards on 6 November 2015.

He is currently a Director of Kubiq Sdn Bhd, Signature Obicorp Sdn Bhd, Signature Aluminium Sdn Bhd, Signature Interiors Sdn Bhd and other subsidiary companies of Signature Cabinet Sdn Bhd. Other than Signature International Berhad, he is not a Director of any other public company and listed issuer. Tan Kee Choong is the co-founder and Group Managing Director of Signature International Berhad. He was As disclosed in the Analysis of Shareholdings, he is a appointed since 20 November 2007. major shareholder of the Company. None of his family members have direct or indirect relationship with any He started his career in 1990 as a Sales Executive in director and/or major shareholder of the Company. He Better Living Grand Sdn Bhd, handling the retail sales of has not entered into any transaction, whether directly or kitchen cabinets. In 1992, he joined Home Scene Sdn Bhd indirectly, that has a conflict of interest with the Company. as a Project Executive handling project sales of kitchen He has no conviction for any offence within the past 5 cabinets. In 1994, he founded Cabinet Industries Sdn Bhd years.

Lim Mee Ding was appointed as Director of Finance on Controller for the EPMB Group of Companies for 11 years. 30 April 2015. In her previous roles, she was also the Chief Financial Officer of a multinational corporation as well as the Country She holds a Masters of Business Administration Manager for a software solution provider. from Edith Cowan in 2004 and a Bachelor’s Degree in Accounting from University of Malaya in 1994. She is She is not a Director of any other public company and a Chartered Accountant of the Malaysian Institute of listed issuer. She has no family relationship with any Accountants as well as Certified Financial Planner, and other Director and/or major shareholder of the Company is also recognised as a Certified Master Trainer by Open and does not hold any shares in the Company and its University Malaysia and LW Master Trainers Academy. subsidiary companies. She has not entered into any transaction, She has around 22 years of experience in multinational whether directly or indirectly, corporations and listed companies. Her acumen is further that has a conflict of interest honed by an exposure to a wide range of disciplines with the Company. She has including accounting, taxation, investment feasibility no conviction for any offence studies, procurement, human resource management, within the past 5 years. administration, warehousing, and general business operations. Lim Mee Ding Prior to her appointment as Director of Finance of the Director of Finance Signature Group of Companies, she was the Financial Aged 47, Female, Malaysian

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 11 Sleek Linear

SIGNATURE INTERNATIONAL BERHAD (754118-K) 12 ANNUAL REPORT 2016 GROUP FINANCIAL HIGHLIGHTS

30 June 2016 30 June 2015 30 June 2014 RESULTS RM’000 RM’000 RM’000

Revenue 196,768 273,490 178,743 PAT attributable to shareholders 47,793 33,596 19,226 Total assets 290,784 262,690 225,050 Earnings per share (sen) 20.1 14.0 8.08 Net assets per share (RM) 0.68 0.60 0.51

30 June 2016 30 June 2015 30 June 2014 REVENUE ANALYSIS RM’000 RM’000 RM’000

Retail 54,976 64,770 54,840 Project 141,792 208,720 123,903 196,768 273,490 178,743 Local 193,885 269,494 174,349 Export 2,883 3,996 4,394 196,768 273,490 178,743 Kitchen and wardrobe systems 165,105 227,159 158,169 White goods and built-in kitchen appliances 3,425 2,893 2,407 Aluminium and glass products 27,914 43,421 17,284 Interior fit-out works and others 324 17 883 196,768 273,490 178,743

PAT attributes to Revenue shareholders (RM ’000) (RM ’000)

2016 196,768 2016 47,793

2015 273,490 2015 33,596

2014 178,743 2014 19,226

Earnings Net assets per share per share (Sen) (RM)

2016 20.1 2016 0.68

2015 14.0 2015 0.60

2014 8.08 2014 0.51

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 13 Dear esteemed stakeholders,

On behalf of the board of directors of Signature International Berhad (“Signature” or “the Group”), I am CHAIRMAN’S proud to present the Annual Report and Audited Financial STATEMENT Statements for the financial year ended 30 June 2016. The Board is pleased to announce two dividends for our shareholders this year as a result of the Board’s continued confidence in the Group’s financial performance: a special dividend of 10 sen per ordinary share which was paid out on 4 July 2016, as well as a final single tier dividend of 2 sen per ordinary share which is recommended by the Board and subject to shareholders’ approval at the upcoming Signature AGM in respect to the financial year ended 30 June 2016.

As a commitment to our shareholders, the Board is also recommending a share buyback exercise to be tabled in agreement with Management. Currently, the Board is of the opinion that shares are undervalued, and this exercise will offer better potential returns for our shareholders. Cumulative treasury shares number 4,358,600 units to date.

Notable Developments for FY2016

As Signature matures as a corporation and a listed entity, we have embarked on a number of corporate exercises intended to optimise the Group’s share structure for the benefit of our shareholders and internal stakeholders alike. On 21 April 2016, Signature has completed a share split that subdivides every one existing ordinary share of 50 sen each into two ordinary shares of 25 sen each. This resulted in 240 million subdivided shares on the date hereof and the increase in the number of shares is expected to provide better market liquidity and encourage more retail participation from public shareholders and investors.

Following the share split, a bonus warrant issue was announced with up to 60 million warrants awarded on the basis of one warrant for every four existing subdivided shares held by the entitled shareholders. This was done to reward the existing shareholders for their loyalty and continuing support by providing an option to further increase their equity participation. The increase in the number of shares of the Company pursuant to the conversion of the warrants is also expected to provide additional working capital to the Group. A total of 59.14 million warrants debuted on 28 April 2016.

Signature has indeed come a long way especially when one considers its humble beginnings, thorough dedication Dato ’ Dr. Mohd Shafei of its founders throughout the course of building an established brand, the culmination of years of hard Bin AbdulLah work, and the scale in which the Group’s operations have Independent Non-Executive Chairman grown in the Malaysian and international marketplace. The Board strongly recognises the role in which the top management’s depth and wealth of experience has contributed to Signature’s achievements, coupled with the strong capabilities of an energetic team that ranks second to none.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 14 ANNUAL REPORT 2016 However, we want to take this opportunity to applaud Within the Group, the Board sees great benefits in recognising the senior management and managers – those who lead and inspiring the current talent pool of employees that lead operations on a day-to-day basis – who have taken the Signature’s operations. Signature owes its milestones to company through some of its most challenging times the talent and culture inculcated by Management and the and most exhilarating achievements. We believe that direction and sound leadership shown throughout the years Signature owes much of its sustainable success to these is responsible for the innovations the Group has seen and people who are poised to lead the Company forward and pioneered within the industry. The Board strongly recommends are already capable of doing so. As part of our commitment a deeper commitment to the senior management and unit to Signature’s focus on human resource development, managers that make this happen by focusing on the diversity the Group has also established an employees’ share inherent in their experience and knowledge, whilst driving option scheme (ESOS) to reward, recognise, retain and further creativity and new innovations that can only be forged motivate our employees. The ESOS will be limited to out of new digital advancements and increasingly fragmented 10% of the issued and paid-up share capital of Signature marketing channels. Training and development should focus on International Berhad excluding treasury shares of the empowering these new leaders to embrace a new strategic way Group. of thinking and embrace their roles of leading the organisation to the next level. The Board is also compelled to provide further clarification to the compulsory land acquisition by the state government On the topic of innovation, the Board sees much potential to for the construction of new public infrastructure. The be derived from unlocking new capabilities and opportunities acquisition will affect only one lot which is used by the proffered by digitalisation. As I have noted previously, the Group for housing glass and aluminium fabrication work information age has all-encompassing influences on the and warehousing facilities. Signature’s management has digital lifestyle that has permeated the modern marketplace. provided the necessary assurance that contingency plans Consumers are now the both masters and followers of the are in place to mitigate any potential adverse impacts impact of digitalisation in their daily lives, from the way we to the business and general operations of the Group interact and think to the way we purchase and consume. The throughout the land handover and necessary relocation of traditional consumer journey has never seen such a gargantuan these physical assets. evolution before the dawn of social media and the world’s information at our fingertips. While this poses numerous Prospects & Outlook challenges to the marketer, it also provides ample opportunities to leverage this wealth of information to better meet the needs With the Board’s current overview of the macroeconomic of consumers’ digital lifestyles. Signature has invested in IT environment that Signature currently operates in, let skills and technology that will help bring services and offerings me be the first to acknowledge the range of adversities closer to these needs, many steps further forwards in heralding seen by the industry and the economy as a whole. an era of better customer service, more relevant products, The introduction of Goods and Services Tax (GST) customer lifetime management, and increased operational notwithstanding, the economy still nurses sores from efficiency. Automation and real-time dynamisms are the key to the impact of softer consumer spending, a weaker transformation and we are glad that Signature has taken the Ringgit, and post-GST repercussions especially for right direction towards this. small to medium businesses. However, Signature’s solid operational acumen has negated the impact of these Appreciation and Acknowledgement factors in the Company’s operations and the Board does not consider these to have impact on key financial Moving forwards, the Board reiterates our recognition that indicators beyond marginal changes. Signature has plumbed deeper depths and emerged stronger and more resilient even amidst the trials this past year. With the Observers may question the difference between FY2015’s force of will and a strong direction set forth by the Management, outstanding revenue and numbers of the current year. we are confident that Signature will continue to surmount To compare the recent financial year to the immense greater heights in our quest to bring the best value for our success obtained in the previous one requires context. customers, shareholders, employees and stakeholders alike. Project books that forecast sustainable performance came to fruition early in FY2015; this necessarily meant In fact, we are pleased to share that Signature is one of only that projects realised in the next period numbered five Malaysian companies that made it to the 2016 Forbes fewer in comparison. However, the Board views this as a Asia’s “Best Under a Billion” list announced in August, which necessary side-effect of the local development scene with honours 200 leading public companies in the Asia Pacific region. seasonal peaks and troughs. Given the circumstances, This outstanding accolade puts Signature at the forefront of a Signature still maintains a healthy order and tender book universe of 17,000 companies with an annual revenue below overall and this large pipeline of unbilled sales that will US$1bil, which were individually screened on sales and earnings be delivered within the next couple of years stands to growth while ably demonstrating the strongest five-year return provide excellent visibility for the Group. On behalf of the on equity. Board, we recognise that Signature is well-catered to fit into these opportunities by creating added-value through On behalf of the board of directors, I thank our customers, world-class offerings, and we express full confidence business partners and stakeholders who have stood by the Group in the prospects of the Group and we look forward to in the face of adversity. To our shareholders, it is our sincere wish optimistic numbers in the coming financial year. that this coming year brings more validation to the trust and support you have invested in Signature throughout the years.

Yours sincerely,

Dato’ Dr. Mohd Shafei Bin Abdullah Independent Non-Executive Chairman

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 15 GROUP MANAGING DIRECTOR’S REVIEW OF FINANCIAL RESULTS AND OPERATIONS

Dato’ Chooi Yoey Sun Group Executive Director

TAN KEE CHOONG Group Managing Director

SIGNATURE INTERNATIONAL BERHAD (754118-K) 16 ANNUAL REPORT 2016 Dear shareholders and fellow associates,

It is my honour to present the ninth annual review of financials and operations of Signature International Berhad (“Signature” or “the Group”) on behalf of Management and the Board of Directors.

Financial Performance been delayed. The difference between these has caused an unbalance to our order book forecast, which also has For the FY2016, the Group recorded a revenue of RM196.8 been slower to be replenished since the previous financial million, a drop of 28% from the previous financial year’s quarter due to a weaker property market outlook. performance of RM273.5 million. The drop of revenue is mainly due to slower replenishment of the order book since However, this imbalance is expected to be self-adjusting, the previous financial year as well as unavoidable site delays and the Group has already seen an improvement in from certain development projects this year. The previous our order book, driven especially by upcoming local year’s stellar revenue figure was also due to the early developments that are due for completion in the latter realisation of some projects within that period, leaving a dip half of 2016. Signature’s tender book now stands ranging in our on-going project revenue forecast between FY2015 from RM400 million to RM500 million. Coupled with our and FY 2016. growing track record, increasing efficiency and high- output turnaround capabilities, we are fairly confident in Our key performance index, profit after tax, stands at our ability to secure projects that demand a distinguished RM50.6 million for FY2016 which represents a growth of track record and a reputation for unstinting quality. 45.8% from RM34.7 million in the preceding period. This is mainly contributed from the compensation income Local Projects due to compulsory land acquisition by the Selangor state Signature’s project and tender books remain consistent government. despite the slowdown in new property launches; this is due to our cumulative follow-up on previous launches as Operational Review well as continuous efforts in covering newly-launched properties. We will focus on developments that are in the 1. Land Acquisition & Operations planning stages, or those that are currently underway in property hotspots in the Klang Valley, Penang, the East Currently, Signature occupies two contiguous plots of land Coast of Peninsular Malaysia, as well as East Malaysia. at our headquarters in Selangor – Lot 24 houses the Of particular note are the burgeoning developments in Group’s head office, kitchen cabinet production plant and the South, namely Iskandar Malaysia in Nusajaya, Johor. the SignatureKitchen flagship showroom; while Lot 2 is These areas have the eye of all major property players in used as a material warehouse for our cabinet works, a Malaysia – many of which we have already worked with glass and aluminium fabrication workshop, storage of and established a reputation for – and we are optimistic electrical appliances stock, and the manufacturing and in our outlook of contributing to the vision these industry sales of Kubiq products. The latter plot of land has been leaders have in their respective developments. acquired by the Selangor state government with due compensation for the purpose of constructing the DASH Signature’s order book has also increased to RM201 (Damansara-Shah Alam Elevated Expressway). million as of end-July 2016. Based on ongoing tenders, we expect to secure more projects to add on to our order In view of the above, we will be expanding on the unutilised book soon. Currently, our follow-up on upcoming projects space at Lot 24 to construct an additional double-story involves working with numerous major developers industrial structure incorporating factory and warehouse including UEM Sunrise, WCT Holdings, BRDB, Greenland, facilities with a built-up area of approximately 56,000 Iskandar Waterfront, KSL, SP Setia, Astaka Padu, Zhou square feet, which will replace the shortfall of space at Yuan Group, Gamuda Land, Encorp and CapitaLand. With Lot 2 as a result of the compulsory land acquisition. In this healthy indicator of steady performance and trust addition, Signature has also purchased a small factory earned from local developers, we are optimistic that our in Kapar, Klang, to restore the aluminium and glass project revenues will be improved in the coming financial production facilities, while the Kubiq production will be year. merged with the main production lines within Lot 24.

During this transition period, the main production in Overseas Projects the original factory space at Lot 24 will not be affected Leveraging our years of experience in managing offshore in a major way. The necessary mitigation measures projects, a key shift in our strategy for overseas and relocation plans are already in place, and will be expansion is to identify and develop project dealers in introduced in stages to meet the timing of the handover foreign markets who are existing players in those regions as well as the completion of the new space. and have the resources to undertake contracts with their own installation teams. By doing so, Signature will have 2. Further Expansion and Capitalisation of the flexibility to allocate operational resources depending on the local capabilities of these partners, be it full Project Growth installation by Signature’s personnel or merely supplying Signature sees the continual growth of our project material for local assembly. We already have working portfolio as a mainstay of the Group’s long-term business partners in the project market in Vietnam, Cambodia, plan. For FY2016, Signature’s lower recorded business Thailand, Myanmar, Papua New Guinea, Indonesia, UAE, revenue is attributed to a widening spectrum of causes Sri Lanka, Pakistan, and India, which will build upon our in our projects, where most projects were recognised growing portfolio of more than 60 completed projects in within the previous financial year due to the more rapid overseas. progress of some projects on-site, whereas others have

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 17 GROUP MANAGING DIRECTOR’S REVIEW OF FINANCIAL RESULTS AND OPERATIONS (cont’d)

the Group is constantly on the lookout for new contracts For retail, we will also be adopting a “push” marketing from overseas projects to enhance our group order book. strategy where SignatureKitchen will be actively reaching Our current tender book for foreign markets include RM50 out to customers via participation in roadshows and million in projects from Cambodia, Sri Lanka, Indonesia, exhibitions both locally and abroad. These efforts Vietnam, Myanmar and Papua New Guinea, out of which have become one of the main revenues streams for we are confident in securing RM10 million which will our retail market. The current annual calendar for be awarded soon. On top of this, Signature has its eyes home improvement and décor exhibitions already firmly set on the Battersea Power Station Development demonstrates the growing market demand locally and in London, which is a led by a consortium of Malaysian Signature has been supporting these with our presence investors aiming to transform the area into a luxury and promotional packages tailored specifically to new accommodation and leisure development. Specifically, home owners and discerning customers looking for the Group is working closely with relevant parties to an upgrade. At the same time, Signature will focus on prepare our bids for Phase 3A of the development developing the competence of our own front-liners and comprising 539 units of residential properties for the sales force to encourage better sales conversion. installation of kitchen work packages. Coupled with favourable exchange rates for exports, Signature is Another form of industry collaboration is via optional confident in increasing our overseas footprint throughout project sales, where SignatureKitchen is working closely the next couple years. with developers to offer kitchen packages to purchasers of new landed property units which usually do not come 3. Capitalising on Increasing Retail & Brand with kitchen cabinetry as standard chattels during the handover. We aim to fill this potential demand by offering Presence exclusive vouchers to new home-owners that entitle I am also happy to report that the SignatureKitchen them to attractive packages from the SignatureKitchen Lifestyle Galleries in Johor Bahru and Puchong are range. increasingly well-received by customers – both current and potential ones alike – who continue to enjoy a hands- Actively having brand presence at these crucial time on experience with our flagship product lines and home windows will provide a first-mover advantage in our lifestyle solutions. marketing efforts. We have confidence that growing consumer preference towards quality, design, and each Lifestyle Gallery features fully-functional and fully- reliability will justify the price premium that Signature’s equipped kitchen and living spaces that put customers in a offerings command. physical immersion of SignatureKitchen’s latest offerings and innovative solutions. These exclusive showroom spaces provide customers with absolute peace of mind 4. Rethinking Complementary Businesses before making their decision to invest in our brands. Our Signature’s appliances arm – Obicorp – still serves as the retail outlets will also be complemented by exclusive in- key supporting business for the main kitchen business store events, the latest kitchen trends on display, and covered by the Group’s retail and project delivery. in-house customer lounges where they can relax while Therefore, the revenue stream from this area remains in consultation with trained retail experts and designers consistent so far as there are leads from SignatureKitchen, to craft their ideal living space. We will be replicating and while retail opportunities remain strong, Signature more of these flagship galleries in the next one to two will be focusing on cross-selling appliances as part of our years to cater to the increasing number of residential key project proposals. Meanwhile, the aluminium works developments – especially high-value condominiums and arm of the Group, which has a significant dependency on SOHO units – that have been making a foothold in these development projects, has seen a slight decline in this urban nexuses. financial year due to inconsistent project completion forecasts but its future remains bright with the numerous In our bid to enhance customer touchpoints, especially for projects in the pipeline. new home owners, we have embarked on a transformation of existing dealers’ showrooms to Signature concept Kubiq, introduced as a modular kitchen systems brand stores – a streamlined and consistent retail experience with an affordable, no-frills concept, was launched dedicated to showcasing the brand in the diverse needs to meet a new generation of first-time and budget- of today’s retail customers. Since the first upgraded conscious homeowners who value practicality and Signature Concept Store in Subang Jaya, Selangor, we convenience with the added assurance of quality. At have been making great strides in converting showrooms the time of its conception, the market was ripe with nationwide to this standard. The favourable response this opportunity and we stand by the importance of this received by the Subang Concept Store has spurred our niche. As of late, however, Kubiq’s performance has efforts to recruit more interested third parties to share in been below the Group’s targets set for its growth and the growing success of the Signature brand by investing we have had to revise our strategies and positioning for in their own concept stores, and we look forward to this underdeveloped market. While it is still too early to further applications from existing and potential dealers provide an outline of Kubiq’s new approach, one area to join our growing network. that will be explored is transforming Kubiq’s business model to include online ordering for offline delivery or As more dealers come on board, the Group will also be installation. This is hoped to appeal to tech-savvy first- extending support via planning and collaboration to form time home owners who are no strangers to e-commerce a network of retail touchpoints and upgraded showrooms and who frequently compare products online. throughout the country that will provide more avenues for walk-in customers to experience our offerings. Our retail presence is now unrivalled; currently, we also have showrooms managed by appointed dealers in 15 countries covering Asia Pacific region.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 18 ANNUAL REPORT 2016 MOVING FORWARDS Leading the Game Amidst Industry Challenges The nature of Signature’s business is largely dependent on As Signature International Berhad moves into the new the property markets we operate it; that is a fact of who we are, financial year, we see the need to take our people, operations, where we are and where we see ourselves going. However, and business outlook to the next level to grow together with we remain optimistic in the face of numerous challenges as the changing environments we operate in. our business will continue as long as developers continue to meet the needs of a growing populace and blooming Gearing Up for Modern Digital Lifestyles residential requirements. Based on the current project As the business expands, so does the need for more order book and tender book, I would say that the next few sophisticated information technology (IT) and automation years look promising. Our constant pursuance of overseas to drive efficiency in production to logistics and inventory projects will also be a mitigation factor to soften any local tracking. One of the recent milestones in this area is the slowdown in the property market as well. Combined with development and implementation of an in-house, real- an ongoing commitment to build up our retail base, the time sales monitoring dashboard which can monitor all management has confidence that expected revenue and aspects of our daily showroom operations, from number proper stewardship of investments and financial resources of walk-ins to the tracking of proposals, conversion rates, will continue to see Signature afloat. and sales. This dashboard can be accessible via smart devices by all showroom managers and our management OUR APPRECIATION staff anytime and anywhere, making it much easier to track sales performance nationwide and identify key areas The Group is progressing commendably in brand-building. for improvement while providing us valuable insights on Signature now represents the hallmark of excellence in the streamlining our retail business. regional and international kitchen and wardrobe solutions industry. It also symbolises a trusted partner for both retail The next step we have in mind is to implement an online and project markets who seek the best for consumer needs tracking system where customers can log-in themselves of today. We fully recognise our continual investment in the and monitor the production timelines of their orders, and brand with the aim of connecting and reaching out to our even choose their preferred installation dates with a few customers while diversifying our offerings to target markets simple clicks. We are also committed to enhancing our more effectively. customer relationship management (CRM) systems that greatly smoothen the sales process from planning to delivery With that in mind, we will continue our focus on operational and installation, which will also be combined with digital excellence to increase productivity whilst reducing costs, marketing solutions that will allow us to collect and analyse leveraging on cutting-edge technology to further enhance customer data to keep in touch with trends and consumer and increase the efficiency of business processes, and preferences, providing much-needed insights into customer actively seek growth opportunities for our core businesses behaviour and targeting for our online campaigns. both locally and abroad. The sum of these efforts are led strongly by the emphasis we have placed on our people, We firmly believe that the end-to-end integration of who have grown with the Group to be an invaluable asset information technology is the key to aligning the brand closer in driving the company through challenging times to the to customers’ requirements especially with the increasing success we have today. affinity towards online transactions and buying behaviour. With this, Signature’s management has unanimously agreed On behalf of the management, I express my sincerest to put more resources in building IT and automation as a gratitude to all for the dedication shown throughout FY2016 main driver for the business moving forwards. that have brought us to yet another key milestone in Signature International Berhad’s history. We thank you, our Building the Next Generation of Leaders shareholders, for your continued support and confidence Signature continually looks to our people to drive the and we hope that you look forward, as we do, to the spoils of organisation into greater heights. We fully acknowledge the our achievements in the coming months. importance of employees as our most valuable resource, drawing from decades of experience and expertise among our shared talent pool across our various arms to form Yours sincerely, greater synergies for the Group. Indeed, many minds stand to achieve great things if directed towards singular Tan Kee Choong and achievable goals and we will focus on inculcating Group Managing Director an unshakeable corporate culture of excellence that will differentiate us from other industry players and be a cornerstone for the sustainability of the company.

The Group’s beginnings owe nothing less to the perseverance of the company’s pioneering workforce in developing and maintaining excellent customer relationships in our early years. However, the time is now ripe for senior management and first-line managers to carry this vision into the future. Signature sees great importance in developing a new strategic mindset among senior managers, empowering them to think broadly and in alignment with the overarching business environment and company direction to drive their teams forwards. Leadership will be a main focus for our human resource development efforts and we look forward to the strategic contributions the next generation of leaders will undoubtedly bring.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 19 6 Derbyshire @ Singapore

The Signature by Urbano @ Bangkok, Thailand

Project

The Peak Residences Portfolio @ Cambodia (FY 2016 Highlights)

SIGNATURE INTERNATIONAL BERHAD (754118-K) 20 ANNUAL REPORT 2016 Banyan Tree Signatures @ Pavilion

Perennia @ Bandar Rimbayu

Maple Residences @ Klang

Tijani Ukay @ Ampang Ponderosa Woods @ Johor

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 21 Siphonia 1 @ Chemara Hills

Medang Serai @ Bukit Bandaraya, Bangsar Vortex @ Jalan Sultan Ismail

Twin Arkz @ Bukit Jalil

Dex @ Jalan Ipoh

SIGNATURE INTERNATIONAL BERHAD (754118-K) 22 ANNUAL REPORT 2016 Solstice @ Cyberjaya

Cybersquare @ Cyberjaya Damai 88 @ Jalan Ampang

Riverson @ Kota Kinabalu

Tropicana Landmark @ Kota Kinabalu Bay 21 @ Kota Kinabalu

Silverscape @ Malacca

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 23 LATEST AWARDS

Forbes Asia

Bestunder A Billion 2016

‘Best Under A Billion’ List Awarded by Forbes Asia

We are pleased to share with you all that Signature International Berhad is one of the five Malaysian companies that has made it to the 2016 Forbes Asia’s “Best Under A Billion” list.

The “Best Under A Billion” list honours 200 leading public companies in the Asia Pacific region with annual revenue between US$5mil and US$1bil, have positive net income and have been publicly traded for at least a year.

Forbes said from a universe of 17,000 companies, the candidates were screened on sales growth and earnings growth in the past 12 months and over three years, and for the strongest five-year return on equity.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 24 ANNUAL REPORT 2016 Brand Laureate Product Branding Awards 2014-2015

Best Brands in Kitchen & Wardrobe Systems Awarded by The BrandLaureate

Sin Chew Business Excellence Awards 2015

Product and Service Excellence Category Awarded by Sin Chew

KITCHEN & BATHROOM AWARDS (KBAA) 2015 - Best Kitchen Award (SIGNATURE KITCHEN)

KITCHEN & BATHROOM AWARDS (KBAA) 2015 - Best Luxury Kitchen Award (BINOVA) Awarded by ACG Media, in partnership with REDHA and endorsed by MITI and MATRADE

Merit Award for Top Corporate Governance and Performance 2015 Awarded by Minority Shareholder Watchdog Group (MSWG)

Best Under Billion 2015 - Best CEO Award (Mr. Tan Kee Choong) Awarded by Focus Malaysia

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 25 CORPORATE & MARKETING EVENTS

Aug 02 2015 The Launch of Perennia by IJM Land Berhad Signature Kitchen collaborated with IJM Land Berhad for the Perennia development in Bandar Rimbayu to provide customers and investors added value for the property. The collaboration marks a convergence of urban living concept and kitchen luxury within the modern colonial façade. During the launch, Signature Kitchen invited AFC Celebrity Chef, Johnny Fua and the owner of Restoran Rebung, Dato’ Chef Ismail for a cooking demonstration in conjunction with the Hari Raya festivities.

Aug 08 2015 Duta Villa Oasis Night Celebrity Chef Johnny Fua again made an appearance for Signature Kitchen at the launch of Hilltop Homes in Duta Villa, a luxury development in Setia Alam. He performed a cooking demonstration to all visitors during the event Duta Villa Oasis Night.

Sep 05 2015 Signature Kitchen Concept Store Opening @ Subang Jaya Signature Kitchen launched its first concept store in SS15, Subang Jaya. The concept store is not like any other Aug ordinary showrooms; it is a place for customers to enjoy 19- 232015 the Signature difference and MasterChef Asia Sponsorship behold the look and feel of Signature’s kitchen range. It Being the kitchen experts, SIGNATURE also features a live kitchen was selected as the sponsor for the set where cooking demo was kitchen cabinets for the MasterChef Asia done for guests to enjoy some TV show and during the special ‘Meet- delicacies during the opening. and-Greet-the-Judges’ event held at MidValley to launch the show, attended by hundreds of fans.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 26 ANNUAL REPORT 2016 CORPORATE & MARKETING EVENTS (cont’d)

Sep 20 2015 Jelly Mooncake by Tracy Lau Food consultant for NTV7 Good Morning Tai Tai and guest judge on 8TV Hot Chef Season 2 Semi Finals, Tracy Lau, shared tips on making jelly mooncake for the Mid-Autumn Festival to Signature Kitchen’s customers of Privilege card members.

Nov 02 2015 Focus Malaysia’s Best Under Billion Sep Awards 2015 SIGNATURE’s Group Managing Director, Mr 26 2015 Tan Kee Choong was awarded the BEST CEO Tijani Raja Dewa award at the inaugural Best Under Billion Awards 2015. The Awards programme was – Celebrate Mooncake Festival organised to recognise top-performing listed Signature Kitchen also worked with Symphony Life for the Tijani companies on Bursa Malaysia with market Raja Dewa project in Kota Bharu, Kelantan. It is an esteemed capitalisation of under RM1 billion. Tan was collaboration aimed to bring out some modern charm in the chosen for displaying dynamism, leadership, residences with elevated concept. The event, organised alongside strong business and management acumen; the Mid-Autumn Festival, saw the Champion of MasterChef Malaysia and how he had (together with co-founder and a Le Cordon Bleu Paris trained and certified Patisserie Chef, Dato’ Chooi Yoey Sun) steered the company to Dato’ Fazley Yaakob treating guests to a cooking demonstration. greater heights.

Nov 07- 172015 Top Management Study Trip to US Group MD, Tan Kee Choong attended the Tsinghua University-Stanford University’s “Enterprise Innovation & Strategic Decision Course in Times of Change” programme at Silicon Valley to gain cutting edge knowledge and advanced innovative business thinking, and experience technological innovations through multidimensional company visits - in order to lead in the next decade.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 27 CORPORATE & MARKETING EVENTS (cont’d)

Nov 06 2015 Sin Chew Business Excellence Awards 2015 Signature Kitchen was honoured to receive the Sin Chew Business Excellence Awards 2015 under the Product and Service Excellence Category. It is one of the most prestigious business awards in Malaysia with emphasis on all key business management disciplines. The award definitely strengthens Signature’s commitment to provide excellence in both products and services to all customers

Nov Dec 26 2015 07 2015 Kitchen and Bathroom Achievement Awards Signature International Berhad Annual (KBAA) 2015 General Meeting It was a remarkable honour for Signature Kitchen to receive SIGNATURE held its 9th Annual General Meeting for 2015 at the Best Kitchen Awards and Best Luxury Kitchen Awards the Tropicana Golf & Country Club, stating its achievements for BINOVA, an imported kitchen brand under Signature and milestones of the year. The board of directors also Kitchen. Organised by ACG Media, in partnership with Real shared some of their growth prospects and upcoming Housing Development Association (REDHA), and endorsed implementation of strategies for the future projection. by the Ministry of International Trade and Industry (MITI) and Malaysia External Trade Development Corporate (MATRADE), the awards are meant to set benchmark in quality, functionality and delivery of product in the collaboration with property developers nationwide.

Dec 10 2015 MSWG 2015 SIGNATURE International Berhad was selected to be the Top 100 Overall Corporate Governance Companies, ranked at 73 as well as the Merit Award for Top Corporate Governance and Performance. It was announced during the Minority Shareholder Watchdog Group (MSWG)-ASEAN Corporate Governance Transparency Index, Findings and Recognition 2015 – The Malaysian Chap by MSWG Chairman, Y.B. Tan Sri Dato’ Seri Dr Sulaiman Mahbob. The award is incorporated to recognise and incentivise corporates which advocated transparency with sustainable performance as well as individuals who championed good corporate governance.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 28 ANNUAL REPORT 2016 Jan 16 2016 Chinese New Year Cooking Demo In line with the Chinese New Year season, Signature Kitchen’s Privilege Card members and customers were treated to a cooking demo of Poon Choi and the making of Yee Sang at Signature Kitchen Lifestyle Gallery, Puchong.

Mar 19 2016 Nyonya Cooking with Chef Florence Tan Celebrity Chef Florence Tan, widely known as the ‘Nyonya food spokesperson’ as she is an international ambassador of Nyonya cuisine for the Malaysian Tourism Board, joined us for a cooking session during the Signature Kitchen’s BIG Sale. Being the author of the book “Secrets of Nyonya Cooking” and one who has appeared so much in TV programmes, namely BBC and Asian Food Channel among others, she showcased a cooking demonstration featuring three specialty Nyonya dishes to our valued guests and customers.

Apr 03- 062016 Asia-Pacific Distributors Convention SIGNATURE attended Cosentino Group’s 2016 APAC Distributor Meeting in Penang, Malaysia with more than 50 guest representatives from 11 countries including Indonesia, Taiwan, Thailand, Singapore, the Philippines, China, Japan, Australia and New Zealand. The main theme this year was “Growing with Cosentino”, focusing on the strategies for retail market.

Apr Apr 12- 162016 15 2016 EuroCucina Egger Factory Visit Signature’s team visited the EuroCucina exhibition to stay Signature’s marketing team paid a visit to EGGER, one of the abreast with latest developments in cutting-edge kitchens leading manufacturers for wood based solutions in Europe designs and technology, wardrobes and state-of-the-art factory in Tyrol, Austria, to learn more about the manufacturing appliances during the Salone del Mobile furniture fair in processes as well as the latest innovations and trends for decors Milan. and surfaces for kitchen and furniture.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 29 STAFF EVENTS

3 July 2015 - Buka Puasa Party 19 Feb 2016 – Yee Sang Event

21 Aug 2015 – Annual Convention

15 Dec 2015 – 4th Graduation Day for Signature Academy Batch 5, 7, 8 & 9

SIGNATURE INTERNATIONAL BERHAD (754118-K) 30 ANNUAL REPORT 2016 2016 STAFF EVENTS (cont’d)

17 Dec 2015 – Christmas Party 30 Mar 2016 – Annual Dinner

12 Mar 2016 – Factory Annual Dinner

8 Jun 2016 – 5th Graduation Day for Signature 11 Jun 2016 – Bukit Gasing Hiking Academy Batch 10, 11 & 12

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 31 OUR PEOPLE & OUR SOCIAL RESPONSIBILITY Building A SUSTAINABLE SIGNATURE

SIGNATURE has a fundamental responsibility to maintain and develop a sustainable business growth for the years to come.

Signature’s Corporate & Social Responsibility (CSR) is aligned with the Group’s core values: teamwork, excellence and customer passion. We are committed to strive for quality and sustainability, at the same time providing the best we can for our staff, customers, business partners, and the environment and community we live in. It can be concluded in the following framework:

SIGNATURE INTERNATIONAL BERHAD (754118-K) 32 ANNUAL REPORT 2016 OUR PEOPLE & OUR SOCIAL RESPONBILITY (CONT’D)

WORKPLACE

SIGNATURE’s workplace goal is to cultivate and develop potential individuals for the organisation and providing exciting benefits for them. The workplace is maintained as a healthy, safe and conducive environment to ensure all members are well-nurtured, appreciated and accredited for their work dedication and achievements.

Recruitment & Employment Opportunities We see the people as our most valuable asset. As such, recruitment plays a crucial role in selecting the right talent to come on board. Equal significance is given to job competency and good culture as both the aspects contribute to the growth of the business. At SIGNATURE, we deploy various acquisition strategies and selection methods to ensure talent aspirations can complement business goals and vice versa.

Installers Apprentice Programme Apart from normal recruitment methods, we also take a To date, twelve batches of apprentices have graduated from different approach to encourage employability in light of the Academy, of which some are employed by Signature the unemployment issues in Malaysia. Signature Academy Kitchen as kitchen installers and project supervisors while initiated the Installers Apprentice Programme in April the rest are either freelance installers or still undergoing 2014 with an objective to train and produce professional on-the-job training. installers in order to deliver professional services to the kitchen industry. To further enhance the enrolment and employment rates, SIGNATURE works closely with organisation such as It is an industrial training programme that focuses on both MARA to enable final year students to join the Installers technical and behavioural aspects, targeting students Apprentice Programme as interns in Signature Kitchen to seeking for specialised skills or providing unemployed acquire specialised skills in kitchen installation. Those who graduates an alternative career path. The programme will display outstanding performance will be given employment help them acquire living skills to generate better income, offer to be a permanent staff. improve livelihood and a chance to develop their own business in the industry in the future.

Internship Opportunities Through Signature’s internship programme, undergraduates are welcomed to gain industrial experience and apply learned theories in real working life. The aim of the internship programme is to hopefully improve employment rates and contribute to the development of a succession pipeline within the Group.

Coaching & Development With a long-term plan for continuous growth, SIGNATURE believes it is essential to build a strong leadership organisation to cater to future needs of the businesses. Therefore, the Group sees a need to bring our people out of complacency and to equip them with knowledge and skills to compete in the industry.

Comprehensive development trainings are conducted with an objective to broaden our staff’s horizons, renew perspectives and advancing capabilities in their respective specialisations. We determine the needs of training based on the organisation’s goals and individual’s scope of work.

Soft-Skills Development Empowerment The importance of soft-skills cannot be emphasised In order to produce more capable leaders in the company, enough. In FY2016, there were two major trainings that empowerment stands as a paramount element for attend to enhancing the people’s soft-skills. The Power of department heads to be able to enrich and drive the team Structured Thinking introduced the idea of understanding in unison. SIGNATURE’s Group Managing Director, Mr. Tan a problem and deciphering it as a structure. They learned and Group Executive Director, Dato’ Michael Chooi are to manage their thinking and develop problem solving leaders who empower the management team to lead and skills to improve productivity in a more systematic manner. manage with deserved authority. The result is effective administration at every tier, eliminating the need to micro- How to Create an Effective Presentation is catered mainly manage. for the sales team as they acquire the skills of public speaking, body language, crafting presentation content and message delivery. The training also helped to build their confidence, being the key to an effective presentation.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 33 OUR PEOPLE & OUR SOCIAL RESPONBILITY (CONT’D)

Employee Protection SIGNATURE has implemented various employee protection schemes to ensure that the staff are well looked after with policies such as Group Hospitalisation and Surgery as well as the Group Personal Accident. Both the policies are meant to protect employees, should they require medical treatment for illnesses or accidents arising from work. The Group also offers annual health screening and outpatient medical which can be utilised for normal medical services, dental and traditional treatments.

During FY2016, there was also a dental screening event to raise awareness on the importance of regular dental check- ups, introduction to some of the dental treatments and prevention steps that can be done to protect our teeth.

Health & Safety Being a kitchen and wardrobe systems manufacturer, a lot of our ground work is based in factory and construction settings which are prone to accidents. Given such a need, Signature has taken a careful approach to ensure the health and safety of the people are given utmost priority at all times.

Annual training that touches on specific issues is also conducted to constantly reinforce the awareness of health and safety. For FY2016, a group of staffs underwent an Internal Safety & Health training to learn about potential hazards in the workplace, importance of compliance with health and safety policies as well as safe handling, storing and use of substances.

Sports & Social In the course of encouraging our staff to strike a work-life balance, various sports and social activities are organised throughout the year by the Group’s Sports Club. The activities are meant to promote the importance of health and to foster closer relations among all departments of the Signature Group.

During the financial year, the Sports Club had organised weekly badminton sessions and weekend hikes in Bukit Gasing. Both the activities involved team spirit, awareness for health and fitness and plenty of fun.

MARKETPLACE

The trust and confidence of our network, including customers, shareholders, business partners, investors, suppliers, bankers and governments play a definitive part on the business’ prolonged success. As such, SIGNATURE Group places a great deal of importance to inculcate business culture with good corporate governance and outstanding product stewardship.

Corporate Governance Good corporate governance comes from the Group’s business operations, supported by core values and integrity. In Signature, the management plays its role in corporate governance by always delivering promises, being transparent and promoting the act of professionalism.

For FY2016, the Group’s remarkable performance is evidenced in the awards that they received. SIGNATURE International Berhad was accorded the Merit Award for Top Corporate Governance and Performance, ranked 73 among other public listed companies in Malaysia for the Top 100 Overall Corporate Companies. Organised by the Minority Shareholder Watchdog Group (MSWG), the awards are formulated to give recognition to companies that have taken efforts to maintain good corporate governance, transparency and sustainable performance.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 34 ANNUAL REPORT 2016 OUR PEOPLE & OUR SOCIAL RESPONBILITY (CONT’D)

The Group Managing Director of SIGNATURE, Mr. Tan Kee Choong was also awarded the BEST CEO at the inaugural Best Under Billion Awards 2015. The award, organised by The Focus Malaysia, was extended to recognise top-performing listed companies on Bursa Malaysia. The BEST CEO category highlights that success does not depend only on the business but also the personalities behind them. Mr. Tan was chosen for his dynamism, leadership, strong business and management acumen and how he, along with co-founder Dato’ Chooi Yoey Sun, steered the company to greater heights.

Both the awards are a testament to the Group’s continuous journey of excellence in sound management, business practices and a genuine commitment to protect shareholders’ interest.

Product Stewardship Being a manufacturer, SIGNATURE Group strives to be excellent in product stewardship to ensure quality is never compromised. The adoption of ISO 9001 quality certification in 2010 has brought about systematic procedures, policies and practices to deliver products that meet specifications in superior quality and workmanship. Operation processes are also reviewed on a regular basis for improvements in production and quality control.

Recent awards that we received for our products exemplifies our commitment to quality. Signature Kitchen was awarded the Sin Chew Business Excellence Awards 2015 under the Product and Service Excellence Category. It is one of the most trusted business awards in Malaysia, serving as a recognition for business success and excellence.

Signature Kitchen also won the Best Kitchen Awards and Best Luxury Kitchen Awards for the brand BINOVA, an imported kitchen brand distributed by Signature Kitchen. The awards are endorsed by the Ministry of International Trade and Industry (MITI) and Malaysia External Trade Development Corporate (MATRADE) in partnership with ACG Media and Real Housing Development Association (REDHA). It is an award that celebrates quality and creativity, and to give acknowledgement to good performing brands and products in the market.

The BrandLaureate Product Branding 2014-2015 for the Best Brands in Kitchen and Wardrobe Systems is also an accolade that reaffirmed Signature’s position as the market leader in kitchen industry.

COMMUNITY

SIGNATURE also makes every effort to connect with the community, giving back through efforts in public health, aiding the less fortunate and supporting education.

SJK (C) Puay Chai Cooking Lab Project We strongly believe in culturing young minds and supporting the efforts to teach children new and valuable life skills. Kubiq, a wholly owned subsidiary of SIGNATURE sponsored six kitchen sets to SJK (C) Puay Chai 2 for their new cooking lab which will be utilised for future ‘Reka Bentuk Teknologi’ classes for the upper primary students in the school.

The cooking lab was officially launched on 1 November 2015 during the schools’ yearly carnival. The event was officiated jointly by Tan Sri Dato’ Teo Chiang Kok, Chairman of the Board of Governors, Mr Liew Boon Yen, Chairman of the Parent Teacher Association of the school, and Mr Simon Leong, Operations Director for Kubiq Sdn Bhd.

Following the ceremony, the event continued with Kubiq’s Mini MasterChef event where five pairs of selected student- and-parent worked together as a team to recreate two dishes demonstrated by the Kubiq Chefs. The event was a success as all 5 teams that took part showed great teamwork and managed to recreate the dishes successfully.

Blood Donation Signature’s Sports Club organised a Blood Donation campaign on 16th December 2015 as part of the Group’s CSR move. The event was carried out to create awareness about how blood donors can make a vast difference in saving people’s lives. Held in Signature Kitchen’s Lifestyle Gallery in Kota Damansara, it managed to garner a total of 69 pints of blood.

Staffs of Signature also learned about the benefits of blood donation and with hopes that they would continue doing so, cultivating a deed that lasts. Signature’s Group Managing Director, Mr. Tan Kee Choong was also one of the donors during the blood donation campaign.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 35 OUR PEOPLE & OUR SOCIAL RESPONBILITY (CONT’D)

Shelter Home Visit On 17th January 2016, a large group of SIGNATURE staffs gathered to attend the Shelter Home Visit in line with the Group’s aim to aid the needy. The Group sponsored a few wardrobes and a kitchen cabinet set to the shelter homes, along with a total of RM2,726 in cash. Apart from the monetary donation, many of them also contributed in forms of food and daily use items such as towels, stationery, bottles, etc.

During the visit, Signature also conducted a cooking event with our in-house chef demonstrating a simple dish for children of the shelter home to learn and replicate. It was a truly fun and memorable event as children enjoyed the interactive activity and they felt overjoyed with the amount of gifts and love they received.

The visit certainly highlighted some of the values that we should instil in ourselves, particularly gratitude, empathy and the kind act of sharing.

Education Education is a fundamental part of the society, potentially the backbone of the upcoming leaders and successors. SIGNATURE has always been supportive of education and we play our part through educational visits by students from both overseas and local colleges or universities.

For FY2016, we have hosted visits from Southern University College, Institut Kemahiran MARA and Raffles College for interior design students or those specialising in design and technical courses. They were all given a tour to Signature Kitchen Lifestyle Gallery and factory in Kota Damansara. The educational visit is a valuable experience for them to learn how kitchens and wardrobes are made, the practical knowledge in designing and the entire production processes.

Interior Design Students of Design and Technical Students Interior Design students from Southern University College of Institut Kemahiran MARA Raffles College

SUSTAINABILITY

SIGNATURE Group takes a holistic approach by integrating sustainability into the development of new management models for the company. Group Managing Director, Mr. Tan Kee Choong, launched a blueprint in 2015 that outlined the sustainability business management of the organisation to support business continuity and competitiveness in the long term.

Sustainability can never be precisely defined but in the business context it implies development that meets the needs of present without compromising the ability of future generations to meet their own needs. In simpler terms, business sustainability is the strength of business foundation and the people and culture that when combined as a whole, can sustain the business for as long as it is.

The aspect of sustainability should be well-positioned and governed within an organisation with a clear alignment to the corporate strategy. It involves understanding the organisation’s needs, culture, industry size, opportunities, maturity and the various sustainability-related risks. Mr. Tan decided to embed sustainability in the business, backed by supportive culture and strong leadership.

His blueprint emphasised on the strategies to be taken, some of the key performance indexes and how all of these are aligned with Signature’s core values. From the values, a culture that fits the organisation is inculcated in order to produce an outcome which serves the purpose of the sustainability blueprint. Only then can we fully achieve the realisation of our vision and mission.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 36 ANNUAL REPORT 2016 Stello Folding Door SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 37 Stello Swing Door

SIGNATURE INTERNATIONAL BERHAD (754118-K) 38 ANNUAL REPORT 2016 NOMINATION COMMITTEE STATEMENT

MEMBERS OF THE NOMINATION COMMITTEE

The Nomination Committee (“NC”) held one (1) meeting during the financial year. Details of the composition of the NC and the attendance of each member at the meeting held during the year are as follows:

Name Attendance

Mr Yap Khong (Chairman) 1/1 Senior Independent Non-Executive Director

Mr Wong Maw Chuan 1/1 Independent Non-Executive Director

Dato’ Dr. Mohd Shafei Bin Abdullah 1/1 Independent Non-Executive Chairman

Details of the members of the NC are contained in the “Directors’ Profile” as set out on pages 6 to 9 of this Annual Report.

The duties and responsibilities of the NC are spelt out in the Terms of Reference of the NC, a copy of which is available in the Company’s website, www.signatureinternational.com.my.

SUMMARY OF ACTIVITIES OF THE NC

During the financial year under review and as at the date of this Annual Report, the NC has undertaken the following activities:

(a) Assessed the effectiveness of the Board as a whole, the committees of the Board and the contribution and performance of each individual Director. (b) Assessed the mix of skills, experience, size and composition of the Board. (c) Assessed the independence of its Independent Directors. (d) Reviewed the character, experience, integrity, competence and time commitment of the Directors and Director of Finance to ensure each of them has effectively discharged their roles accordingly. (e) Reviewed the details of trainings accomplished by the Directors and determined the training needs of each Director. (f) Reviewed and recommended to the Board the re-appointment and re-election of the Directors. (g) Reviewed NC Statement and recommended to the Board for incorporation into the Company’s Annual Report. (h) Reviewed the Terms of Reference of NC prior to the recommendation to the Board for approval. (i) Reviewed the term of office and performance of the Audit and Risk Management Committee and each of its members pursuant to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. (j) Reviewed and recommended Independent Directors who have served as Independent Non-Executive Directors of the Company for a cumulative term of nine (9) years, to continue to act as Independent Non-Executive Directors of the Company pursuant to the Malaysian Code on Corporate Governance 2012.

APPOINTMENT PROCESS

The NC leads the process for identifying and making recommendation for the Board’s approval on suitable candidates for directorship to the Board and members to the Board Committees.

In evaluating the suitability of candidates, the NC will review their profile and curriculum vitae and considers, inter-alia, the competency, character, commitment (including time commitment), contribution and experience of the candidates in meeting the needs of the Company. In regards to the candidates for appointment as Independent Director, the NC would assess the candidate’s suitability based on the criteria on independence as set out in the Main Market Listing Requirements of Bursa Securities.

Upon completion of evaluation of the proposed candidate, the NC would recommend to the Board. Based on the recommendation of the NC, the Board would evaluate and decide on the appointment of the proposed candidate.

The Company Secretary will ensure that all appointments are properly made and that legal and regulatory obligations are met.

The Board is supportive of gender diversity policy. In its selection of Board members, the Board provides equal opportunity to all candidates who meet the criteria and other qualities.

There was no appointment of new Director during the financial year.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 39 NOMINATION COMMITTEE STATEMENT (CONT’D)

ANNUAL ASSESSMENT

The evaluation process is led by the NC Chairman and supported by the Company Secretary via questionnaires.

The NC reviews and evaluates the performance of individual Director including Independent Non-Executive Directors, Board as a whole and Board Committees on an annual basis with the aim of providing individual contribution, effectiveness of the Board and its Committees, identify gaps, maximise strengths and address weaknesses of the Board.

The assessment criteria used in the assessment of Board and individual Director include mix of skills, knowledge, Board diversity, size and experience of the Board, core competencies and contribution of each Director. The Board Committees were assessed based on their roles and responsibilities, scope and knowledge, frequency and length of meetings, supply of sufficient and timely information to the Board and also overall effectiveness and efficiency in discharging their function.

The assessment of the Independent Directors is in accordance with the criteria as set out in the Board Charter and Main Market Listing Requirements of Bursa Securities.

The results of the assessment would be reported by the NC to the Board which is essential for the Board to form the basis of recommending relevant Director for re-appointment/re-election at the Annual General Meeting (“AGM”).

RE-APPOINTMENT/RE-ELECTION OF DIRECTORS

In accordance with the Company’s Articles of Association, an election of Directors shall take place each year at an AGM and one-third (1/3) of the Directors are subject to retirement by rotation, in any event, each Director shall retire from office once in every three (3) years. The Directors to retire in each year are the Directors who have been longest in office since their appointment or re-election. A retiring Director is eligible for re-election. This provides an opportunity for shareholders to renew their mandates. The re-election of each Director is voted on separate resolution during the AGM of the Company. To assist shareholders in their decision, sufficient information such as personal profile, meeting attendance and the shareholdings in the Group of each Director standing for re-election are furnished in the Board of Directors’ Profile contained in the Annual Report.

Directors who are appointed by the Board during the financial year are subject to retirement at the next AGM held following their appointments in accordance with the Company’s Articles of Association. All retiring Directors are eligible for re-election.

Based on the schedule of retirement by rotation, Mr Wong Maw Chuan and Dato’ Dr. Mohd Shafei Bin Abdullah are subject to retirement by rotation pursuant to Article 129 of the Company’s Articles of Association at the forthcoming AGM.

Pursuant to Section 129(1) of the Companies Act, 1965, Directors who are over seventy (70) years of age may be re-appointed as Director to hold office until the next AGM.

Mr Yap Khong who is above 70 years of age will seek shareholders’ approval at the forthcoming AGM to re-appoint him as Director to hold office until the conclusion of the next AGM of the Company.

Further, pursuant to the Malaysian Code on Corporate Governance 2012, the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. The Board must justify and seek shareholders’ approval should the Board wishes to retain such Director as an Independent Director.

Mr Wong Maw Chuan and Mr Yap Khong have served as Independent Non-Executive Directors of the Company for a cumulative term of more than nine (9) years. The Board had on 26 September 2016 via the Nomination Committee conducted an annual performance evaluation and assessment of Mr Wong Maw Chuan and Mr Yap Khong who have served as Independent Non- Executive Directors of the Company for a cumulative term of more than nine (9) years and agreed to seek shareholders’ approval at the forthcoming AGM of the Company to retain them to continue to act as Independent Non-Executive Directors of the Company until the conclusion of the next AGM.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 40 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT

The Board of Directors (“the Board”) of Signature International Berhad (“the Company”) is committed to exercise good corporate governance by supporting and applying the Principles and Recommendations set out in the Malaysian Code on Corporate Governance 2012 (“the Code”). The Board recognises that maintaining good governance ethics is critical to business integrity and performance, and key to delivering shareholders’ value. In addition, the Board evaluates and where appropriate, implements relevant proposals to ensure that the Company and its subsidiaries (“the Group”) continue to adhere to good corporate governance with the aim of ensuring Board’s effectiveness in enhancing shareholders’ value.

The Board is pleased to share the manner in which the Principles and Recommendations of the Code have been complied within the Group throughout the financial year ended 30 June 2016 and up to the date of this Annual Report.

Establish clear roles and responsibilities of the Board and Management

1.1 Clear functions of the Board and Management

The Group recognises the important role played by the Board in the stewardship of its direction and operations, and ultimately, the enhancement of long-term shareholders’ value. To fulfill this role, the Board is responsible for the overall corporate governance of the Group, including its strategic direction, establishing goals for management and monitoring the achievement of these goals.

The day-to-day management of the Group’s business is delegated to the Group Managing Director and Group Executive Director and Management except the following significant matters which reserved for the Board as stipulated in the Board Charter established since 30 October 2013 which was subsequently reviewed on 29 August 2016 and approved by the Board on the same day:

i. Reviewing and adopting a strategic plan for the Group; ii. Overseeing the conduct of the Group’s business; iii. Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures; iv. Management succession planning; v. Overseeing the development and implementation of shareholder communications policy for the Group; and vi. Reviewing the adequacy and the integrity of the management information and internal controls system of the Group.

The Group Managing Director and Group Executive Director are responsible for making and implementing operational and corporate decisions and primarily accountable to the Board for the authority that is delegated to them as well as the performance of the Group and achievement of corporate objectives. Nonetheless, the Independent Non-Executive Directors also play an important role in corporate accountability by providing unbiased and independent views, advice and judgment in safeguarding the interests of the shareholders.

The Board monitors the decisions and actions of the Group Managing Director and Group Executive Director and the performance of the Group to gain assurance that progress is being made towards the corporate objectives, within the limits it has imposed.

The Board meets on a regular and scheduled basis, at least five (5) times a year with additional meetings held as and when urgent issues warrant matters to be attended to. During the quarterly Board meetings, the Board reviews the attainment of corporate objectives and the performance of each of the business segments, substantiated with financial and operational information and/or reports prepared by the Management. The Board is also provided with sufficient business related insights, information and assurance from the Group Managing Director and Group Executive Director towards attaining the corporate objectives and making informed decision.

1.2 Clear roles and responsibilities

The Board is constantly mindful of safeguarding the interest of the Group’s customers, investors and all other stakeholders in discharging its stewardships.

To ensure the effective discharge of its function and responsibilities, the Board has established and delegates certain responsibilities to the Board Committees, as follows:-

Board Committees Key Functions

Audit and Risk Management Committee Explained on pages 52 to 53 of this Annual Report Remuneration Committee Explained on pages 44 to 45 of this Annual Report Nomination Committee Explained on pages 39 to 40 of this Annual Report

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 41 CORPORATE GOVERNANCE STATEMENT (CONT’D)

The Board Committees are entrusted with specific responsibilities to oversee the Company’s affairs, in accordance with their respective written Terms of References and operating procedures. At each Board Meeting, minutes of the Board Committees are presented to the Board. The Chairman of the respective Committees also report to the Board the key issues deliberated at the respective Committee meetings and such reports are incorporated into the Minutes of the Board meetings. These committees were formed in order to enhance business and operational efficiency as well as efficacy. The Board, however, remains fully responsible for the direction and control of the Company and the Group.

The Management leads and manages specific businesses or key functions of the Group under the supervision of the Group Managing Director and Group Executive Director. Catering to the dynamic business environment, the Group Managing Director, the Group Executive Director and Management are responsible for formulating strategic plans to accommodate changes swiftly with their intensive knowledge and professionalism.

This process allows the Board to gain assurance and preserve efficiency whilst reviewing strategic plans presented. With the presence of Independent Directors, further deliberation is available to enhance the value of strategic plans prior to the conclusion and development of a value added business strategy.

With regard to overseeing performance of the Group, the Group Managing Director is appointed by the Board to be primarily responsible to develop strategic direction of the Group, implementation of Board decisions, and the attainment of corporate objective. The Group Managing Director has demonstrated strong leadership in discharging his responsibilities and in steering the Group on the right path in achieving the goals and objectives.

The Board has unrestricted access to operational information and has established a transparent relationship with the Group Managing Director and Management. The Board reviews operational and financial results presented to them and are informed on the latest business conditions on a quarterly and yearly basis. The Audit and Risk Management Committee comprises three (3) members, all of whom are Independent Non-Executive Directors to assess operational and financial adequacy impartially. Key issues will be disclosed and presented by the Chairman of the Audit and Risk Management Committee as a routine part of the Board meeting’s agenda.

Risk Management is regarded by the Board as an integral part of the Group’s business operations which helps identify, evaluate and monitor key business risks obstructing the achievement of the Company’s goals and objectives. Audit and Risk Management Committee was delegated by the Board to develop, implement and maintain an effective risk management framework with assistance of the Group’s Outsourced Internal Auditors. In line with the universal accepted standard ISO 31000, the Group Outsourced Internal Auditors has initiated a risk management framework in conjunction with the Group Risk Policy established by the Board on 30 October 2013. The Internal Auditors namely Audex Governance Sdn Bhd was appointed on 3 April 2014.

The Board is committed to establish and maintain adequate internal control system throughout the Group in all its business functions that not limiting to financial aspects of the business but also operational, regulatory compliance as well as risk management matters. In order to fulfill the commitment, internal audit function is assisting the Board to review the effectiveness and adequacy of internal control system independently and on-going basis. Details pertaining to risk management and adequacy of internal control system are set out in the Statement of Risk Management and Internal Control of the Annual Report on pages 54 to 56.

Succession planning is critical element in preventing business disruptions and promoting operational sustainability for which the Nomination Committee is entrusted by the Board to review and recommend candidates for executive management. The Board had on 30 October 2013 established a policy on Management Succession Plan to ensure that the operations of the Group have unfretted continuity in the absence of its key management personnel.

The Board values the dialogue with shareholders and appreciates the keen interest of shareholders on the Group’s performance. In this regard, the Board had on 13 February 2015 established a Corporate Disclosure Policy and Procedures to provide accurate, timely, consistent and fair disclosure of corporate information to the shareholders and stakeholders of the Group and the public generally. The Group Managing Director has been appointed as the primary spokesperson of the Company to communicate with audience constituents and respond to questions in relation to corporate vision, strategies, developments, future prospects, financial plans and operation matters.

1.3 Formalised ethical standards through Code of Conduct

The Board acknowledges the importance of establishing a corporate culture which engenders ethical conduct that permeates throughout the Company. The Board had on 30 October 2013 adopted and implemented a Code of Ethics to provide guidance to stakeholders on the ethical behaviours to be expected from the Group whilst the Code of Conduct was included in Employee Handbook.

The Code of Ethics includes, inter alia, matters relating to duties and responsibilities of Directors and Management and their social responsibilities.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 42 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT (CONT’D)

The Board will review and update the Code of Conduct and Code of Ethics, where necessary, to meet the needs of the Group and to address the changing conditions of its business environment.

A summary of the Code of Conduct will be published on the Company’s website in due course.

1.4 Strategies promoting sustainability

The Board is mindful of the importance of building a sustainable business. The Board had on 30 October 2013 developed and implemented the Sustainability Policy to ensure that the Group’s strategies continue to promote sustainability, with attention given to environmental, social and governance aspects (“ESG”) of the Group’s business.

The Company’s activities on corporate responsibilities for the year under review are set out in pages 32 to 36 of this Annual Report.

1.5 Access to information and advice

The Board recognises that the decision making process is highly contingent on the strength of information furnished. As such, Directors have unrestricted access to any information pertaining to the Company.

The Chairman plays a key role in ensuring that all Directors have full and timely access to information with Board papers circulated at least seven (7) days in advance of each Board meetings. This ensures that Directors have sufficient time to appreciate issues deliberated at the Board meetings and expedite the decision making process. A comprehensive balance of financial and non-financial information is encapsulated in the papers covering strategic, operational, regulatory, marketing and human resource issues.

There is also a formal procedure sanctioned by the Board, whether as the Board as a whole or in their individual capacity, for Directors to obtain independent professional advice at the Company’s expense.

Detailed periodic briefings on the industry outlook and Company performance are also conducted for the Directors to ensure that the Board is well informed on the latest market and industry trends.

1.6 Qualified and competent Company Secretaries

The Company Secretaries ensure the flow of information to the Board and its Committees. They ensure that Board procedures are complied with and advise the Board on governance matters and other relevant laws and regulations.

The Board is regularly updated and advised by the Company Secretaries who are qualified, experienced and competent on new statutory and regulatory requirements, and the resultant implications to the Company and Directors in relation to their duties and responsibilities. The Company Secretaries, who support the Board in ensuring adherence to Board policies and procedures, brief the Board on the proposed contents and timing of material announcements to be made to regulators. The Company Secretaries attend all Board and Board Committees meetings and ensure that meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are taken and maintained accordingly. The Company Secretaries also assist in providing information to the Board and Board Committees, and between Non-Executive Directors and Management from time to time.

The removal of Company Secretaries, if any, is a matter for the Board, as a whole, to decide. Every Director has also unhindered access to the advice and dedicated support services of the Company Secretaries.

1.7 Board Charter

The Board is guided by the principles contained in the Board Charter.

The Board had in year 2013 formalised a Board Charter setting out the principles for the operation of the Board, the Company and the Group which describes the functions of the Board and those delegated to Management of the Company. The Board Charter has subsequently been reviewed and approved by the Board during the Board meeting held on 29 August 2016.

The Board Charter is accessible via the Company’s website, www.signatureinternational.com.my

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 43 CORPORATE GOVERNANCE STATEMENT (CONT’D)

Strengthen Composition of the Board

2.1 Nomination Committee

The Nomination Committee consists entirely of Independent Non-Executive Directors, led by Mr Yap Khong, the Senior Independent Non-Executive Director. The Nomination Committee is empowered by the Board and its Terms of Reference to bring to the Board recommendations as to the appointment of new Directors. The Nomination Committee assesses the suitability of candidates, taking into account the required mix of skills, knowledge, expertise and experience, core competencies and other qualities before recommending their appointment to the Board.

The Nomination Committee systematically assesses the effectiveness of the Board, its Board Committees, the Director of Finance and the contribution and performance of each individual Director on an annual basis. The Nomination Committee also keeps under review the Board’s structure, size and composition.

The Board as a policy will select candidate as a Director who will best serve the Company regardless of gender, ethnicity and age. The Board has no immediate plans to implement a diversity policy nor set any target or undertake any specific measures in view that the Board membership is dependent on each candidate’s skills, knowledge, expertise and other qualities. However, the Board will take the necessary step to recruit suitable women candidates to the Board as and when the opportunity arises to reach 30% of board composition. There are no barriers by reason of an individual’s gender, race, religion and age.

The Company is in the midst of formulating the diversity policy which aims to set the approach to achieve diversity on Board and workforce.

During the Nomination Committee held on 26 September 2016, the Nomination Committee reviewed the Board composition to identify and close any possible gap in the Board’s functional knowledge and competencies by bringing in new experience, knowledge and expertise on the Board to meet the current and future needs of the Company. Based upon requirement stipulated in both the Board Charter and Terms of Reference of Nomination Committee, the Board through the Nomination Committee’s annual appraisal concluded that the Board has the right balance of expertise, skills and attributes including relevant core competencies and the Board’s size is conducive for effective discussion and decision-making.

The Nomination Committee Statement is on pages 39 to 40 of this Annual Report.

2.2 Remuneration policies and procedures

Remuneration Committee

The Remuneration Committee comprises two (2) Independent Non-Executive Directors and one (1) Executive Director with Mr Yap Khong as the Chairman. The Remuneration Committee is responsible for recommending the remuneration framework for Directors as well as the remuneration packages of Executive Directors to the Board. None of the Executive Directors participated in any way in determining their individual remuneration.

Non-Executive Directors’ remuneration is a matter to be decided by the Board as a whole with the Director concerned abstaining from deliberations and voting on decisions in respect of his individual remuneration. Non-Executive Directors are entitled to fixed directors fees with certain allowances which should be decided by the Board as a whole. Directors’ fees for Non-Executive Directors are benchmarked against market rate apart from the extent of their duties and responsibilities, attendance at Board meetings and qualifications and contributions.

Upon review conducted in January and September 2016, the Board is of the view that the current remuneration level is sufficient to attract, retain and motivate qualified Directors to serve on the Board.

The members of the Remuneration Committee are as follows:-

Name of Director Membership Directorship Mr Yap Khong Chairman Senior Independent Non-Executive Director Mr Wong Maw Chuan Member Independent Non-Executive Director Dato’ Chooi Yoey Sun Member Group Executive Director

The Remuneration Committee held two (2) meetings during the financial year ended 30 June 2016 and all the members registered full attendance.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 44 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT (CONT’D)

Remuneration Package

The aggregate Directors’ remuneration for the financial year ended 30 June 2016 are as follows:-

Received from the Company

Other Benefits- Fees emoluments in kind Total Category (RM’000) (RM’000) (RM’000) (RM’000) Executive Directors - 4,450 - 4,450 Non-Executive Directors 186 348 - 534

Received on Group Basis

Other Benefits- Fees emoluments in kind Total Category (RM’000) (RM’000) (RM’000) (RM’000) Executive Directors - 4,870 - 4,870 Non-Executive Directors 186 348 - 534

Breakdown of Directors’ remuneration for the financial year ended 30 June 2016, by category and in each successive band of RM50,000 is as follows:-

Received from the Company

Executive Non-Executive

RM100,000 – RM150,000 - 2 RM300,001 – RM350,000 - 1 RM2,200,001 – RM2,250,000 2 - Total 2 3

Received on Group Basis

Executive Non-Executive

RM100,000 – RM150,000 - 2 RM300,001 – RM350,000 - 1 RM2,200,001 – RM2,250,000 2 - Total 2 3

The Company does not disclose each Director’s remuneration separately as such information is considered highly sensitive and confidential in nature. The Board is of the opinion that the transparency and accountability aspects of corporate governance as applicable to Directors’ remuneration are appropriately served by the disclosure made above.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 45 CORPORATE GOVERNANCE STATEMENT (CONT’D)

Reinforce of Independence

3.1 Annual Assessment of Independence

The Board recognises the importance of independence and objectivity in the decision-making process. The independent Directors bring their respective knowledge and experience to the Board. The Board is committed in ensuring that Independent Directors are capable and willing to make decisions in the best interests of the Company and the shareholders free from interest or influence and are independent of the Management.

The Independent Directors namely, Dato’ Dr. Mohd Shafei bin Abdullah, Mr Yap Khong and Mr Wong Maw Chuan fulfilled the criteria of “Independence” as prescribed under the Listing Requirements. The Board composition complies with the Listing Requirements which requires that at least two (2) Directors or one-third (1/3) of the Board of the Company, whichever is the higher, to be independent Directors.

3.2 Tenure of Independent Directors

In line with the Code and the Board Charter, the tenure of an independent Director should not exceed a cumulative term of nine (9) years. However, an independent Director may continue to serve on the Board upon reaching the 9-year limit subject to the independent Director’s re-designation as a Non-Independent Non-Executive Director. In the event the Board intends to retain the Director as Independent after the latter has served a cumulative term of nine (9) years, the Board must justify the decision and seek shareholders’ approval at general meeting. In justifying the decision, the Nomination Committee is entrusted to assess the candidate’s sustainability to continue as an Independent Non- Executive Director based on the criteria on independence.

Mr Yap Khong and Mr Wong Maw Chuan have served as Independent Directors on the Board for more than nine (9) years. They contributed to the Company’s business with their vast knowledge, industrial experience and familiarity to the operations of the Company. They have continued to exercise their independence and due care during their tenure as Independent Non-Executive Directors of the Company, carried out their professional duties in the best interest of the Company and shareholders, and have shown great integrity of independence. Following an assessment by the Nomination Committee and the Board, the Board recommended that they continue to act as Independent Directors of the Company subject to shareholders’ approval at the Tenth Annual General Meeting (“AGM”) of the Company.

Further justifications for the recommended continuance as Independent Non-Executive Director for the Directors are reflected in the Notice of Tenth AGM on page 146 of this Annual Report.

3.3 Separation of positions of the Chairman and Group CEO

There is a clear division of responsibilities at the head of the Group to ensure a balance of authority and power. The Board is led by Dato’ Dr. Mohd Shafei bin Abdullah, an Independent Non-Executive Chairman and the executive management of the Group is led by Mr Tan Kee Choong, the Group Managing Director and Dato’ Chooi Yoey Sun, the Group Executive Director.

The roles of the Chairman, the Group Managing Director and Group Executive Director are clearly defined in their individual position descriptions. The Chairman is responsible for running the Board and ensures that all Directors receive sufficient relevant information on financial and non-financial matters to enable them to participate actively in the Board’s decisions. The Group Managing Director and Group Executive Director are responsible for the day- to-day management of the business as well as the implementation of Board’s policies and decisions. Mr Yap Khong is the Senior Independent Non-Executive Director designated to clarify matters or enquiries that may be raised by shareholders or investors.

3.4 Board Composition and Balance

As at the date of this Statement, the Board consists of an Independent Non-Executive Chairman, a Group Managing Director, a Group Executive Director and two (2) Independent Non-Executive Directors. A brief profile of each Director is presented on pages 6 to 9 of this Annual Report.

The Non-Executive Directors contribute significantly in areas such as policy and strategy, performance monitoring, allocation of resources as well as improving governance and controls. Together with the Executive Directors who have in-depth knowledge of the business, the Board constituted of individuals who are committed to business coupled with integrity and professionalism in all its activities.

The Board is satisfied that the current Board composition fairly reflects the interests of minority shareholders in the Company.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 46 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT (CONT’D)

Foster Commitment

4.1 Time Commitment

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors. Meetings for the year are scheduled at the end of the preceding year to enable the Directors to plan ahead and ensure that the Board and its Committee meetings are accounted for in their respective schedules. It provides the scheduled dates for meetings of the Board and Board Committees and the AGM, as well as the closed periods for dealings in securities by Directors based on the targeted dates of announcements of the Company’s quarterly results. The Board meets for both scheduled meetings and on other occasions to deal with urgent matters. Due notice is given for all scheduled and additional meetings.

During the financial year ended 30 June 2016, the Board met on five (5) occasions, where it deliberated upon and considered a variety of matters including the financial results, strategic decisions, the business plan and direction of the Group.

The Board receives documents on matters requiring its consideration prior to and in advance of each meeting. The Board papers are comprehensive and encompass both quantitative and qualitative factors so that informed decisions are made. At Board meetings, the Chairman encourages constructive and healthy debates, and Directors are free to express their views. Any Director who has a direct or deemed interest in the subject matter shall abstain from deliberation and voting on the respective resolution. Decisions of the Board are made unanimously or by consensus. All proceedings from the Board meetings are minuted and signed by the Chairman of the meeting.

Procedures are in place for Directors to seek both independent professional advice at the Company’s expense and have access to the Company Secretary in order to fulfill their duties and specific responsibilities.

The Board members are required to notify the Board’s Chairman prior to their acceptance of new directorships in other companies notwithstanding that the Listing Requirements allows a Director to sit on the Board of five (5) listed issuers. Such notification is expected to include an indication of time that will be spent on the new appointment.

Details of Directors’ attendance at Board Meetings held during the financial year ended 30 June 2016 are as follows:

Meeting attended by the Directors / Total Number of Meeting held during the financial year ended % of Directors 30 June 2016 Attendance

Executive Directors Mr Tan Kee Choong 5/5 100% Dato’Chooi Yoey Sun 5/5 100%

Non-Executive Directors Dato’ Dr. Mohd Shafei bin Abdullah 5/5 100% Mr Wong Maw Chuan 5/5 100% Mr Yap Khong 5/5 100%

4.2 Directors’ training

The Board, via the Nomination Committee, assesses the training needs of each of its Directors on an annual basis in accordance with the Nomination Committee’s Terms of Reference, by determining areas that would best strengthen their contributions to the Board. Review of the trainings accomplished by the Directors and determination of the training needs of each Director was conducted in September 2016 by the Nomination Committee. From the assessment, the Nomination Committee concluded that the Directors have attended adequate trainings enabling them to discharge their responsibilities.

The Directors have attended various training programmes, seminars, conferences and briefings in areas of finance, tax, corporate governance and risk management, industry and regulatory developments. All the Directors have completed the Mandatory Accreditation Programme (“MAP”) prescribed by Bursa Malaysia Securities Berhad.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 47 CORPORATE GOVERNANCE STATEMENT (CONT’D)

Among the training programmes, seminars and briefings attended by the Directors during the financial year are as follows:-

Name of Directors Title of Training

Mr. Tan Kee Choong • Companies Bill • Building & Sustaining Brilliant Business • Innovation & Strategic Decisions in a Changing Environment Program at Stanford • How to Create an Effective Presentation • The Power of Structured Thinking • Masterself!

Dato’ Dr. Mohd Shafei Bin Abdullah • Companies Bill

Mr. Wong Maw Chuan • MIA conference • Budget conference • Audit Committee Conference • Bursa Sustainability Engagement Series • MFRS updates • Companies Bill

Mr. Yap Khong • Companies Bill

Dato’ Chooi Yoey Sun • Companies Bill • How to Create an Effective Presentation • The Power of Structured Thinking • Masterself!

The Senior Management had also briefed the Directors on general economic, industry and technical developments from time to time.

The Directors will continue to attend relevant training courses to further enhance their skills and knowledge to enable them to discharge their responsibilities more effectively.

The Company Secretaries circulate the relevant guidelines on statutory and regulatory requirements from time to time for the Board’s reference and brief the Board quarterly on these updates at Board meetings. The External Auditors also briefed the Board members on any changes to the Malaysian Financial Reporting Standards that affect the Group’s financial statements during the year.

Uphold integrity in financial reporting

5.1 Compliance with applicable financial reporting standards

Financial Reporting

The Board commits to provide and present a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements and quarterly results to shareholders as well as the Chairman’s Statement and review of operations in the Annual Report.

The Board is assisted by the Audit and Risk Management Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting. The Audit and Risk Management Committee reviews the annual and interim financial statements, and assesses whether suitable accounting policies have been adopted and whether management has made appropriate judgements and estimates.Timely release of quarterly results announcements, annual financial statements and annual report reflects the Board’s commitment to provide transparent and up-to-date disclosures to the public.

Related Party Transactions

An internal compliance framework exists to ensure that the Group meets its obligations relating to related party transactions under the Listing Requirements. The Board, through its Audit and Risk Management Committee, reviews all material related party transactions involved. A Director who has an interest in a transaction must abstain from deliberation and voting on the relevant resolution in respect of such transaction at the Board and at any general meeting convened to consider such resolution.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 48 ANNUAL REPORT 2016 CORPORATE GOVERNANCE STATEMENT (CONT’D)

5.2 Assessment of sustainability and independence of external auditors

Key features underlying the relationship of the Audit and Risk Management Committee with the External Auditors are included in the Audit and Risk Management Committee’s Terms of Reference, a copy of which is available in the Company’s website, www.signatureinternational.com.my.

A summary of the activities of the Audit and Risk Management Committee during the year and up to the date of this Annual Report, including the evaluation of the independent audit process, are set out in the Audit and Risk Management Committee Report on pages 52 to 53 of the Annual Report.

The External Auditors provide audit and non-audit related services to the Company during the financial year under review.

The External Auditors attended three (3) out of five (5) Audit and Risk Management Committee meetings held in the first (1st), second (2nd) and fourth (4th) quarter of fiscal year 2016. The Audit and Risk Management Committee also discussed key concerns and obtained feedback from the External Auditors on the matter relating to the Company’s affairs during both meetings without the presence of the Management. The Audit and Risk Management Committee is satisfied with the External Auditors’ technical competency and audit independence and have recommend to the Board for the shareholders’ approval on their re-appointment as auditors of the Company.

Recognise and manage risks

6.1 Sound framework to manage risks

The Board recognises the importance of establishing and maintaining a sound system of internal controls which cover risk management, financial, organisational, operational and compliance controls. The Board acknowledges its responsibility and accountability for the Company’s system of internal controls and for reviewing the effectiveness, adequacy and integrity of the system.

The Board through its Audit and Risk Management Committee reviews the key risks identified on a regular basis and ensuring the implementation of appropriate systems to manage these risks, as far as possible, to ensure the protection of its assets and shareholders’ interest.

The key features of the Risk Management Framework are set out in the Statement on Risk Management and Internal Control of the Company as set out on pages 54 to 56 of this Annual Report.

6.2 Internal audit function

The Board has established an internal audit function within the Company, which is led by Audex Governance Sdn Bhd who reports directly to the Audit and Risk Management Committee. The Internal Auditors attended four (4) out of five (5) Audit and Risk Management Committee meetings held during the fiscal year.

For the financial year under review, the internal audit reviews were carried out to assess the adequacy and effectiveness of the Company and its subsidiaries’ systems of internal control and compliance with the Group’s policies and procedures over its project management, production process, human resource management and etc.

The review procedures were designed to understand, document, evaluate risks and related controls and to identify areas for improvement and formulate recommendations for improvement thereon. The audit procedures applied principally consisted of process evaluations through interviews with various personnel, observations and testing of controls.

During the meeting, the Audit and Risk Management Committee also reviewed the adequacy, competency and suitability of internal audit resources available, and assess whether the scope of internal audit engagement aligns with the Company’s risk management profile.

The Statement on Risk Management and Internal Control furnished on pages 54 to 56 of the Annual Report provides an overview on the state of internal controls within the Group, in an effort to manage risk.

Ensure timely and high quality disclosure

7.1 Corporate Disclosure Policy

Information Disclosure

The Board has adopted and implemented a Corporate Disclosure Policy and Procedures to ensure all investors and shareholders of the Company enjoy equal access to material information necessary for making informed investing decision.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 49 CORPORATE GOVERNANCE STATEMENT (CONT’D) / STATEMENT OF RESPONSIBILITY BY DIRECTORS

7.2 Leverage on information technology for effective dissemination of information

Investor Relations and shareholders’ communication

The Company’s website, www.signatureinternational.com.my provides an avenue for information, such as dedicated sections on corporate information, including financial information, share price history, announcements and press releases. The website is continuously updated to ensure that the information contained within is current.

Strengthen relationship between Company and shareholders

8.1 Encourage shareholder participation at general meetings

The Board acknowledges the need for the shareholders to be informed of all material business matters affecting the Company. In addition to various announcements made, the timely release of financial results on a quarterly basis provides shareholders with an overview of the Group’s performance and operations.

The AGM is the principal forum for dialogue with shareholders. Notice of AGM together with a copy of the Company’s Annual Report will be sent to shareholders at least twenty-one (21) days before the meeting. Members of the Board as well as the External Auditors will be present to answer questions relevant to the resolution being proposed, the financial performance, business operations or corporate governance of the Company and other matters affecting the Company’s shareholders’ interests.

Shareholders are invited to ask questions both about the resolutions being proposed before putting a resolution to vote as well as matters relating to the Group’s operations in general. During the last AGM as well as the Extraordinary General Meeting (“EGM”) held in April 2016, a question and answer session was held where the Chairman invited shareholders to raise questions with responses from the Board. All the resolutions set out in the Notice of the AGM and EGM were put to vote by show of hands and duly passed. The outcome of the AGM and EGM was announced to Bursa Securities on the same meeting day.

8.2 Effective Communication and Proactive Engagement

The Board encourages participation at general meetings and will generally put the resolutions to vote by a show of hand, except for related party transaction where a poll will be conducted or unless otherwise demanded by shareholders in accordance with the Articles of Association of the Company. However, with effect from the forthcoming AGM, all resolutions set out in the Company’s Notice of AGM or Notices of Resolutions received, and its related amendments will be subject to poll voting. A summary of the key matters discussed at the Company’s AGM will also be posted onto the Company’s website.

This statement is made in accordance with the resolution of the Board of Directors duly passed on 26 September 2016.

STATEMENT OF RESPONSIBILITY BY DIRECTORS IN RESPECT OF THE PREPARATION OF THE ANNUAL AUDITED FINANCIAL STATEMENTS

The Directors are responsible for ensuring that the financial statements of the Group are drawn up in accordance with the applicable Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965.

The Directors are also responsible for ensuring that the annual audited financial statements of the Group are prepared with reasonable accuracy fromt he accounting records of the Group so as to give a true and fair view of the financial position of the Group as of 30 June 2016 and their financial performance and cash flows for the year then ended.

In preparing the annual audited financial statements, the Directors have:

(a) selected and applied the appropriate and relevant accounting policies on a consistent basis; (b) made judgements and estimates that are reasonable and prudent; and (c) prepared the annual audited financial statements on a going concern basis.

The Directors are also responsible for taking reasonable steps to safeguard the assets of the Group to prevent and detect fraud and other irregularities.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 50 ANNUAL REPORT 2016 ADDITIONAL COMPLIANCE STATEMENT

1. UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS

The Company had raised an aggregate of approximately RM297,377 via the subscription of the following during the financial year ended 30 June 2016:-

(a) 295,000 new ordinary shares of RM0.25 each pursuant to the exercise of employee share options at a subscription price of RM1.00 for each new share; and

(b) 2,450 new ordinary shares of RM0.25 each pursuant to the conversion of warrant at the exercise price of RM0.97 per share.

The Company has since fully utilised the proceeds raised as working capital for the Group.

2. EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”)

During the financial year under review, the Company had granted 22,195,000 options pursuant to the ESOS on 3 May 2016. The ESOS shall be in force for a period of five (5) years from the effective date of 3 May 2016. A detailed breakdown of the allocation of the options as at 30 June 2016 are as follows:-

a) The total number of options granted, exercised and outstanding during the financial year under review:

Number of Options Grand Total Directors Granted 22,195,000 5,000,000 Exercised 295,000 - Outstanding 21,900,000 5,000,000

b) Percentage of options applicable to Directors and Senior Management under the ESOS since the commencement of ESOS up to financial year ended 30 June 2016:

Since the commencement of the ESOS up to financial Directors and Senior Management year ended 30 June 2016 Aggregate maximum allocation 75% Actual percentage granted 62%

c) The table below set out the options granted to Non-Executive Directors during the financial year:

Granted Exercised Balance Dato’ Dr. Mohd Shafei Bin Abdullah 2,000,000 - 2,000,000 Wong Maw Chuan 500,000 - 500,000 Yap Khong 500,000 - 500,000

3. AUDIT AND NON-AUDIT FEES

The audit and non-audit fees payable to the External Auditors during the financial year are as follows:-

Company Group (RM) (RM) Audit services rendered 26,000 179,000 Non-audit services rendered 5,000 5,000 Total 31,000 184,000

4. MATERIAL CONTRACTS INVOLVING INTEREST OF THE DIRECTORS, CHIEF EXECUTIVE AND MAJOR SHAREHOLDERS

There were no material contracts entered into by the Company and its subsidiaries involving Directors’, Chief Executives’ and major shareholders’ interest which were still subsisting as at the end of the financial year under review or which were entered into since the end of the previous financial year except as disclosed in Note 37 of page 113 of the Financial Statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 51 Audit and Risk Management Committee Report

The Audit Committee of Signature International Berhad (“the Company”) was established with the objective of assisting the Board of Directors (“Board”) in the areas of corporate governance, system of internal control, risk management and financial reporting of the Company and its subsidiaries (“the Group”). On 29 August 2016, the Board approved the re-naming of the Audit Committee to Audit and Risk Management Committee (“ARMC”) to better reflect the dual roles which are currently undertaken by this Committee.

MEMBER OF THE ARMC

The ARMC comprises three (3) members, all of whom are Independent Non-Executive Directors. Details of the composition of the ARMC are as follows:-

Mr. Wong Maw Chuan (Chairman) Independent Non-Executive Director

Mr. Yap Khong (Member) Senior Independent Non-Executive Director

Dato’ Dr. Mohd Shafei Bin Abdullah (Member) Independent Non-Executive Chairman

Mr Wong Maw Chuan is a member of the Malaysian Institute of Accountants and a fellow member of the Associate of Chartered Certified Accountants. The ARMC, therefore, meets the requirements of Paragraph 15.09(1) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).

The duties and responsibilities of the ARMC are spelt out in the Terms of Reference of the ARMC. A copy of the Terms of Reference is available in the Company’s website, www.signatureinternational.com.my.

ATTENDANCE OF ARMC MEETINGS

During the financial year, five (5) meetings were held. The details of attendance of each member at the ARMC meetings held during the financial year are as below:

Director Attendance Mr. Wong Maw Chuan 5/5 Mr. Yap Khong 5/5 Dato’ Dr. Mohd Shafei Bin Abdullah 5/5

SUMMARY OF ACTIVITIES OF THE ARMC

The activities carried out by the ARMC during the financial year and up to the date of this report in discharging of its duties and responsibilities included:-

Risk Management and Internal Control

• evaluated the overall effectiveness of the system of internal control through the review of the results of work performed by the internal and external auditors and discussions with key management.

• reviewed the Statement on Risk Management and Internal Control prior to the recommendation to the Board for approval for inclusion in the Company’s Annual Report.

Financial Results

• reviewed the unaudited quarterly financial results and annual audited financial statements of the Group and the Company including the announcements pertaining thereto before recommending to the Board for release to Bursa Securities and Securities Commission. The review focused primarily on: - major judgmental areas, significant and unusual events; - significant adjustments resulting from audit; - the going concern assumptions; - compliance with the Malaysian Financial Reporting Standards (“MFRS”) and other applicable approved accounting standards in Malaysia; and - compliance with Paragraph 9.22 and Appendix 9B of the MMLR of Bursa Securities and other regulatory requirements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 52 ANNUAL REPORT 2016 Audit and Risk Management Committee Report (CONT’D)

External Audit

• reviewed with the external auditors, their audit plan for the financial year to ensure that their scope of work adequately covers the activities of the Group.

• reviewed the results and issues arising from their audit of the annual financial statements and their resolution of such issues as highlighted in their report to the ARMC.

• evaluated the performance and independence of the external auditors and recommended to the Board on their re- appointment and audit fee.

• held three (3) meetings with the external auditors during the financial year without the presence of the Executive Directors and Management of the Group to ensure there were no restrictions on the scope of their audit and to discuss any items that the external auditors did not wish to raise in the presence of Management. The issues highlighted by the external auditors during the private meetings were addressed by the Management.

Internal Audit

• reviewed and approved the annual audit plan to ensure adequate scope and comprehensive coverage of the Group’s activities.

• reviewed and discussed with the internal auditors the internal audit findings and progress on each of the issues arising from the internal audit, amongst others, the following key audit areas: - project management; - production process; and - human resource management.

• reviewed the audit recommendations and representations made and corrective actions taken by management in addressing and resolving issues as well as ensuring that all issues were adequately addressed on a timely basis.

• monitored the implementation of mitigating actions by Management on outstanding issues to ensure all key risks and control weaknesses are properly addressed.

• reviewed the audit tests used in the execution of the internal audit work and results of their work.

• reviewed the adequacy of the scope, functions, competency and resources of the internal audit function.

• held three (3) meetings with the internal auditors during the financial year without the presence of Executive Directors and Management of the Group for discussions on audit related matters. The issues highlighted by the IA during the private meetings were conveyed to the Management for further action.

Related Party Transactions

• reviewed the related party transactions and recurrent related party transactions that may arise within the Company and the Group.

Others

• reviewed the Corporate Governance Statement and ARMC Report prior to the submission to the Board for consideration and approval for inclusion in the Company’s Annual Report.

• reviewed the Aging Report on quarterly basis.

• reviewed the Terms of Reference of ARMC prior to the recommendation to the Board for approval.

• verified the options allocated to the Group’s eligible employees in accordance with allocation criteria established pursuant to the by-laws governing the Company’s Employees’ Share Option Scheme.

In all ARMC meetings, the Director of Finance was present to report on the results of the Group as well as to answer questions posed by the ARMC in relation to the results to be announced. During these ARMC meetings, representatives from the internal auditors had also been present to provide updates on the progress of internal audit work and to also provide comments and recommendations, where applicable to improve the systems of internal control supporting the activities of the Group.

INTERNAL AUDIT FUNCTION

Details on the internal audit function are set out in the Statement on Risk Management and Internal Control on pages 54 to 56 of this Annual Report.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 53 Statement on Risk Management and Internal Control

The Board of Directors (“the Board’) is pleased to present its Statement on Risk Management and Internal Control for the financial year ended 30 June 2016. This Statement is prepared pursuant to paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and as guided by the latest “Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers” (“the Guideline”).

Board’s Responsibility

The Board acknowledges that risk management and internal control systems are integral parts of corporate governance. The Board also acknowledges its overall responsibility for maintaining a good sound system of risk management and internal control, and for reviewing its adequacy and integrity.

Principally, the responsibilities of the Board as provided under the Guideline for risk and control governance are:

• To embed risk management in all aspects of the Group’s activities, which also encompasses subsidiaries of the Company; and

• To review risk management framework, processes, responsibilities and to obtain reasonable assurance that risks are appropriately managed.

The Board understands the principal risks of the businesses that the Group is engaged in and accepts that business decisions require the balancing of risks and return. The Board confirms that there is an ongoing process for identifying, evaluating and managing significant risks to effectively mitigate the risks that may impede the achievement of the Group’s business objectives.

Risk Management

The risk management function of the Group continues to be driven by the Group Managing Director and Group Executive Director, who are assisted by the key management staff. This function is carried out as part of the Group’s daily operating and business management processes and is being overseen through the management review meetings and their daily involvement. Risks that may affect the Group’s business objectives are continually monitored, and any new significant risk identified are subsequently evaluated and managed.

Periodically, the Group Managing Director, the respective heads of department and key management staff conduct regular management meetings. The objectives of these meetings are to ensure policies, decisions and expected operational performance targets and objectives set are communicated, understood and executed by line management. At the same time, these meetings reinforce the monitoring and supervisory controls at the line management levels while actions are strategised to address issues and risks identified.

Subsequent to the financial year ended 30 June 2016, Management carried out a risk assessment exercise, with the assistance of external consultants, to update the Group and divisional risk profiles. The updated Group and divisional key risk profiles were presented and deliberated at the Audit and Risk Management meeting held on 29 August 2016.

Internal Control System

• Organisation Structure and Authorisation Procedures

The Group maintains a formal organisation structure that includes clear delegation of responsibilities and accountability. It sets out the roles and responsibilities, appropriate authority limits, review and approval procedures in order to enhance the internal control system of the Group’s various operations.

• Group Policies and Procedures

Documented policies and procedures are in place and are regularly reviewed and updated to ensure that it maintains its effectiveness and continues to support the Group’s business activities at all times as the Group continues to grow. One of the subsidiary, Signature Manufacturing Sdn Bhd is ISO accredited.

• Human Resource Policy

Comprehensive guidelines on the employment and retention of employees are in place to ensure that the Group has a team of employees who are well trained and equipped with all the necessary knowledge, skills and abilities to carry out their responsibility effectively.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 54 ANNUAL REPORT 2016 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)

• Information and Communication

Information critical to the achievement of the Group’s business objectives are provided to the Senior Management and the Board on a periodic basis. This allows matters that require the Board and Senior Management’s attention are highlighted for review, deliberation and decision making on a timely basis.

• Monitoring and Review

Scheduled operational and management meetings are held to discuss and review the Group’s business plans, budgets, financial and operational performance. The quarterly financial statements containing key financial results and comparisons are presented to the Board for their review, consideration and approval. The Board also plays an active role in discussing and reviewing the business plans, strategies, performance and risks faced by the Group.

Internal Audit Function

The Group’s internal audit function is outsourced to a professional services firm, to assist the Board and Audit and Risk Management Committee in providing an independent assessment on the adequacy, efficiency and effectiveness of the Group’s internal control system.

During the financial year ended 30 June 2016, the outsourced internal audit function conducted reviews in accordance with the risk based internal audit plan approved by the Audit and Risk Management Committee. The auditable entity and business processes are as follows:

Name of Subsidiary Business Process/Area Signature Cabinet Sdn Bhd Project Management Signature Manufacturing Sdn Bhd Production Signature Cabinet Sdn Bhd, Cosentino Quartz (M) Sdn Bhd, Kubiq Sdn Bhd, Signature Kitchen Human Resource Management Sdn Bhd, Signature Obicrop Sdn Bhd, Signature Interiors Sdn Bhd, Signature Manufacturing Sdn Bhd and Signature International Berhad

Findings from the internal audit reviews, including the recommended corrective actions, were discussed with Senior Management and the relevant head of departments prior to present to Audit and Risk Management Committee at their scheduled meetings on a quarterly basis.

In addition, follow up review was conducted to ensure that corrective actions have been implemented on a timely manner. Based on the internal audit reviews conducted, none of the weaknesses noted have resulted in any material losses, contingencies or uncertainties that would require a separate disclosure in this annual report.

The total cost incurred for the internal audit function in respect of the financial year ended 30 June 2016 was RM60,000 (2015: RM60,000).

Board Assurance and Limitation

Before producing this Statement, the Board has received assurance from the Group Managing Director and Finance Director that, to the best of their knowledge that the Group’s risk management and internal control systems are operating adequately and effectively, in all material aspects.

During the financial year under review and up to the date of approval of this statement for inclusion in the annual report, the Board is satisfied that the existing systems of internal control and risk management are effective to assist the Group in meeting its business objectives and there were no material losses, contingencies or uncertainties arising from significant control weaknesses that would require a separate disclosure in this annual report.

Nonetheless, the Board wishes to reiterate that risk management and internal control systems will continuously be improved in tandem with the evolving business environment. However, it should be noted that all risk management and of internal control systems could only manage rather than eliminate the risks of failure to achieve business objectives. Therefore, these systems of internal control and risk management in the Group can only provide reasonable but not absolute assurance against material misstatements, frauds and losses.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 55 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)

Conclusion

The Board is of the view that the Group’s internal control systems and risk management are adequate to safeguard shareholders’ investments and the Group’s assets. Nevertheless, the Board is aware that the Group’s internal control and risk management systems must be evaluated periodically to ensure its continued effectiveness to meet the dynamic changes in the Group’s business environment. Therefore, the Board will, when necessary, put in place appropriate action plans to further enhance and strengthen the Group’s internal control and risk management system.

This statement was approved by the Board of Directors on 26 September 2016.

Review of Statement on Risk Management and Internal Control by External Auditors

The External Auditors have performed limited assurance procedures on this Statement on Risk Management and Internal Control pursuant to the scope set out in Recommended Practice Guide (“RPG”) 5 (Revised), Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the Annual Report of the Group for the year ended 30 June 2016, and reported to the Board that nothing has come to their attention that causes them to believe the statement intended to be included in the Annual Report is not prepared, in all material respects, in accordance with the disclosures required by paragraph 41 and 42 of the Guidelines, nor is the Statement factually inaccurate.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 56 ANNUAL REPORT 2016 FINANCIAL Contents

58 Directors’ Report 63 Statement by Directors 63 Statutory Declaration 64 Independent Auditors’ Report 66 Statements of Financial Position 68 Statements of Profit and Loss and Other Comprehensive Income 70 Statements of Changes in Equity 74 Statements of Cash Flows 77 Notes to the Financial Statements DIRECTORS’ REPORT

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June 2016.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding whilst the principal activities of its subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

The Group The Company RM’000 RM’000

Profit after taxation for the financial year 50,559 30,023

Attributable to:- Owners of the Company 47,793 30,023 Non-controlling interests 2,766 - 50,559 30,023

DIVIDENDS

Since the end of the previous financial year:-

(a) the Company paid a first interim single tier dividend of 4 sen per ordinary share amounting to RM4,798,280 in respect of the financial year ended 30 June 2015 as declared in the Directors’ report of the financial year;

(b) the Company paid a final single tier dividend of 6 sen per ordinary share amounting to RM7,163,862 in respect of the financial year ended 30 June 2015 which was approved by the shareholders at the Annual General Meeting held on 7 December 2015; and

(c) the Directors of the Company declared a special dividend of 10 sen per ordinary share amounting to RM23,683,885 in respect of the financial year ended 30 June 2016 which was paid on 4 July 2016.

At the forthcoming Annual General Meeting, a final single tier dividend of 2 sen per ordinary share amounting to RM4,718,777 computed based on the issued and paid-up share capital with voting rights as at 30 June 2016 of 235,938,850 ordinary shares of RM0.25 each in respect of the current financial year will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in the financial statements for the forthcoming financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the statements of changes in equity and Note 31 to the financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 58 ANNUAL REPORT 2016 DIRECTORS’ REPORT (CONT’D)

ISSUES OF SHARES AND DEBENTURES

During the financial year:-

(a) the authorised share capital of the Company which was RM100,000,000 divided into 200,000,000 ordinary shares of RM0.50 each were altered by sub dividing the 200,000,000 ordinary shares of RM0.50 each into 400,000,000 ordinary shares of RM0.25 each;

(b) a share split on the issued and paid-up share capital was undertaken involving the subdivision of every one (1) existing ordinary share of RM0.50 each into two (2) new ordinary shares of RM0.25 each. Pursuant to the share split, 120,000,000 ordinary shares of RM0.50 each of the Company were subdivided into 240,000,000 ordinary shares of RM0.25 each;

(c) the Company increased its issued and paid-up share capital from RM60,000,000 to RM60,074,363 by way of:-

(i) an issuance of 295,000 new ordinary shares of RM0.25 each for cash arising from the exercise of options under the Company’s Employees’ Share Option Scheme at the exercise price as disclosed in Note 21 to the financial statements; and

(ii) an issuance of 2,450 new ordinary shares of RM0.25 each for cash arising from the exercise of Warrants 2016/2021 at the exercise price of RM0.97 in accordance with the Deed Poll dated 6 April 2016.

The new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of the Company; and

(d) there were no issues of debentures by the Company.

TREASURY SHARES

The details on the treasury shares are disclosed in Note 20 to the financial statements.

WARRANTS

The details on the Warrants are disclosed in Note 22 to the financial statements.

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company except for the share options granted pursuant to the Company’s Employee Share Option Scheme.

EMPLOYEES’ SHARE OPTION SCHEME

The Employees’ Share Option Scheme of the Company (“ESOS”) is governed by the ESOS By-Laws and was approved by shareholders on 6 April 2016. The ESOS is to be in force for a period of 5 years effective from 3 May 2016.

The main features of the ESOS are disclosed in Note 21 to the financial statements.

During the financial year, the Company has granted 22,195,000 share options under the ESOS. These options will be expiring on 2 May 2021 and are exercisable in stages within the vesting period of 5 years from the date of offer.

The option prices and the details in the movement of the options granted are as follows:-

< ----- Number of Options over Ordinary Shares of RM0.25 Each ---- > At At Exercise 1 July 30 June Date of Offer Price 2015 Granted Exercised 2016

3 May 2016 RM1.00 - 22,195,000 (295,000) 21,900,000

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 59 DIRECTORS’ REPORT (CONT’D)

EMPLOYEES’ SHARE OPTION SCHEME (CONT’D)

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose in this report the names of holders to whom options have been granted to subscribe for less than 500,000 ordinary shares of RM0.25 each. The names of option holders granted options to subscribe for 500,000 or more ordinary shares of RM0.25 each during the financial year, other than directors whose details are disclosed in the section on Directors’ Interests in this report, are as follows:-

At Grant Expiry Exercise 30 June Name Date Date Price Granted Exercised 2016

Mohd Anwar Bin Haji Abdul Wahab 3 May 2016 2 May 2021 RM1.00 1,250,000 - 1,250,000 Lau Kock Sang 3 May 2016 2 May 2021 RM1.00 1,200,000 (50,000) 1,150,000 Lim Kwee Geok 3 May 2016 2 May 2021 RM1.00 970,000 - 970,000 Leong Kin San 3 May 2016 2 May 2021 RM1.00 900,000 (135,000) 765,000 Lim Mee Ding 3 May 2016 2 May 2021 RM1.00 655,000 - 655,000 Lim Meng Khoon 3 May 2016 2 May 2021 RM1.00 575,000 (50,000) 525,000 Chang Chee Keong 3 May 2016 2 May 2021 RM1.00 500,000 - 500,000 Leow Zhi Xiang 3 May 2016 2 May 2021 RM1.00 500,000 - 500,000 Mah Soe May 3 May 2016 2 May 2021 RM1.00 500,000 (60,000) 440,000

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables.

At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their value as shown in the accounting records of the Group and of the Company, 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 which would render the values attributed to the current assets in the financial statements misleading.

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

The contingent liabilities are disclosed in Note 40 to the financial statements. At the date of this report, there does not exist:-

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

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

SIGNATURE INTERNATIONAL BERHAD (754118-K) 60 ANNUAL REPORT 2016 DIRECTORS’ REPORT (CONT’D)

CONTINGENT AND OTHER LIABILITIES (CONT’D)

No contingent or other liability of the Group and of the Company 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 when they fall due.

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

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

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.

DIRECTORS

The directors who served since the date of the last report are as follows:-

Tan Kee Choong Dato’ Chooi Yoey Sun Wong Maw Chuan Yap Khong Dato’ Dr. Mohd Shafei Bin Abdullah

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:-

Number Of Ordinary Shares Of RM0.50 Each At 1.7.2015 Bought Sold At 20.4.2016 Direct Interests Tan Kee Choong 29,878,004 - - 29,878,004 Dato’ Chooi Yoey Sun 29,706,250 - - 29,706,250 Dato’ Dr. Mohd Shafei Bin Abdullah 663 - - 663

Number Of Ordinary Shares Of RM0.25 Each* At 21.4.2016 Bought Sold At 30.6.2016 Direct Interests Tan Kee Choong 59,756,008 - - 59,756,008 Dato’ Chooi Yoey Sun 59,412,500 - - 59,412,500 Dato’ Dr. Mohd Shafei Bin Abdullah 1,326 - - 1,326

* Arising from subdivision of one (1) existing ordinary share into two (2) ordinary shares of the Company.

Number Of Warrant 2016/2021 At 1.7.2015 Entitled Exercised At 30.6.2016 Direct Interests Tan Kee Choong - 14,939,002 - 14,939,002 Dato’ Chooi Yoey Sun - 14,853,125 - 14,853,125 Dato’ Dr. Mohd Shafei Bin Abdullah - 331 - 331

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 61 DIRECTORS’ REPORT (CONT’D)

DIRECTORS’ INTERESTS (CONT’D)

By virtue of their interests in shares in the Company, Tan Kee Choong and Dato’ Chooi Yoey Sun are deemed to have interests in shares in its subsidiaries to the extent of the Company’s interest, in accordance with Section 6A of the Companies Act 1965.

The other directors holding office at the end of the financial year did not have any interests in shares in the Company or its related corporations during the financial year.

In addition to the above, the following Directors who were in office at the end of the financial year are deemed to have interest in the shares of the Company to the extent of the options granted to them pursuant to the ESOS of the Company:-

Number of Options Over Ordinary Shares Of RM0.25 Each At 1.7.2015 Granted Exercised At 30.6.2016 Direct Interests Tan Kee Choong - 1,000,000 - 1,000,000 Dato’ Chooi Yoey Sun - 1,000,000 - 1,000,000 Wong Maw Chuan - 500,000 - 500,000 Yap Khong - 500,000 - 500,000 Dato’ Dr. Mohd Shafei Bin Abdullah - 2,000,000 - 2,000,000

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or 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.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate other than the share options granted to the directors pursuant to the ESOS of the Company.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year are disclosed in Note 44 to the financial statements.

AUDITORS

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.

Signed in accordance with a resolution of the directors dated 6 October 2016

Tan Kee Choong

Dato’ Chooi Yoey Sun

SIGNATURE INTERNATIONAL BERHAD (754118-K) 62 ANNUAL REPORT 2016 STATEMENT BY DIRECTORS PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT 1965

We, Tan Kee Choong and Dato’ Chooi Yoey Sun, being two of the directors of Signature International Berhad, state that, in the opinion of the directors, the financial statements set out on pages 66 to 134 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 2016 and of their financial performance and cash flows for the financial year ended on that date.

The supplementary information set out in Note 46, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed in accordance with a resolution of the directors dated 6 October 2016

Tan Kee Choong Dato’ Chooi Yoey Sun

STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT 1965

I, Lim Mee Ding, I/C No. 690521-07-5122, being the officer primarily responsible for the financial management of Signature International Berhad, do solemnly and sincerely declare that the financial statements set out on pages 66 to 134 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 Lim Mee Ding, I/C No. 690521-07-5122, at Kuala Lumpur in the Federal Territory on this 6 October 2016

Lim Mee Ding

Before me

Lai Din No.: W668 Commissioner for Oaths

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 63 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SIGNATURE INTERNATIONAL BERHAD (Incorporated in Malaysia) (Company No : 754118 - K)

Report on the Financial Statements

We have audited the financial statements of Signature International Berhad, which comprise the statements of financial position as at 30 June 2016 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 66 to 134.

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 2016 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 have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 5 to the financial statements;

(c) We are satisfied that the financial statements 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; and

(d) The 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.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 64 ANNUAL REPORT 2016 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SIGNATURE INTERNATIONAL BERHAD (CONT’D) (Incorporated in Malaysia) (Company No : 754118 - K)

Other Reporting Responsibilities

The supplementary information set out in Note 46 on page 135 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of 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.

Crowe Horwath Ong Beng Chooi Firm No: AF 1018 Approval No: 3155/05/17 (J) Chartered Accountants Chartered Accountant

6 October 2016

Kuala Lumpur

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 65 STATEMENTS OF FINANCIAL POSITION AT 30 JUNE 2016

The Group The Company 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000

ASSETS NON-CURRENT ASSETS Investments in subsidiaries 5 - - 31,437 31,137 Property, plant and equipment 6 36,330 49,312 - - Investment properties 7 35,618 35,868 - - Other investment 8 - - - - Deferred tax assets 9 3,503 2,339 - - 75,451 87,519 31,437 31,137

CURRENT ASSETS Inventories 10 17,039 17,588 - - Amount owing by contract customers 11 40,317 37,152 - - Trade receivables 12 49,334 58,906 - - Other receivables, deposits and prepayments 13 13,410 12,709 80 302 Amount owing by subsidiaries 14 - - 45,235 37,493 Current tax assets 1,916 1,642 - 422 Short-term investments 15 57,220 24,436 371 573 Fixed deposit with a licensed bank 16 155 155 - - Cash and bank balances 35,942 22,583 24,427 4,952

215,333 175,171 70,113 43,742

TOTAL ASSETS 290,784 262,690 101,550 74,879

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 66 ANNUAL REPORT 2016 STATEMENTS OF FINANCIAL POSITION (CONT’D) AT 30 JUNE 2016

The Group The Company 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000

EQUITY AND LIABILITIES EQUITY Share capital 17 60,074 60,000 60,074 60,000 Share premium 18 1,189 889 1,189 889 Merger deficit 19 (28,123) (28,123) - - Treasury shares 20 (4,016) (90) (4,016) (90) Employees’ share option reserve 21 2,241 - 2,241 - Retained profits 22 129,462 112,174 6,570 7,395 Foreign exchange translation reserve 23 (158) (49) - -

TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 160,669 144,801 66,058 68,194

NON-CONTROLLING INTERESTS 4,511 4,263 - -

TOTAL EQUITY 165,180 149,064 66,058 68,194

NON-CURRENT LIABILITIES Deferred tax liabilities 9 2,901 2,901 - - Long-term borrowings 24 21,171 20,647 - -

24,072 23,548 - -

CURRENT LIABILITIES Amount owing to contract customers 11 17,377 31,259 - - Trade payables 25 20,804 23,655 - - Other payables and accruals 26 34,508 25,371 3,367 1,887 Amount owing to a subsidiary 14 - - 8,143 - Current tax liabilities 1,489 1,652 298 - Short-term borrowings 27 3,670 3,343 - - Dividend payable 23,684 4,798 23,684 4,798

101,532 90,078 35,492 6,685

TOTAL LIABILITIES 125,604 113,626 35,492 6,685

TOTAL EQUITY AND LIABILITIES 290,784 262,690 101,550 74,879

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 67 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

The Group The Company 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000

REVENUE 30 196,768 273,490 39,248 24,222

COST OF SALES (138,558) (180,997) - -

GROSS PROFIT 58,210 92,493 39,248 24,222

OTHER INCOME 62,876 10,813 81 44

121,086 103,306 39,329 24,266

SELLING AND DISTRIBUTION EXPENSES (6,931) (6,335) - -

ADMINISTRATIVE EXPENSES (36,164) (37,426) (7,853) (6,269)

OTHER EXPENSES (13,954) (10,216) (1,270) -

FINANCE COSTS (2,050) (2,387) - -

PROFIT BEFORE TAXATION 31 61,987 46,942 30,206 17,997 INCOME TAX EXPENSE 32 (11,428) (12,197) (183) -

PROFIT AFTER TAXATION 50,559 34,745 30,023 17,997

OTHER COMPREHENSIVE INCOME

Items that may be reclassified subsequently to profit or loss - Foreign currency translation differences (109) (81) - -

TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR 50,450 34,664 30,023 17,997

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 68 ANNUAL REPORT 2016 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

The Group The Company 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000

PROFIT AFTER TAXATION ATTRIBUTABLE TO:- Owners of the Company 47,793 33,596 30,023 17,997 Non-controlling interests 2,766 1,149 - - 50,559 34,745 30,023 17,997

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:- Owners of the Company 47,684 33,515 30,023 17,997 Non-controlling interests 2,766 1,149 - - 50,450 34,664 30,023 17,997

EARNINGS PER SHARE (SEN): - basic 33 20.1 14.0 - diluted 33 20.1 N/A

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 69 STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

Non-Distributable Distributable Foreign Exchange Attributable Non- Share Treasury Share Merger Translation Retained To Owners Of Controlling Total Note Capital Shares Premium Deficit Reserve Profits The Company Interests Equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 The Group

Balance at 1.7.2014 60,000 (921) - (28,123) 32 89,730 120,718 2,919 123,637

Profit after taxation for the financial year - - - - - 33,596 33,596 1,149 34,745 Other comprehensive income for the financial year - Foreign currency translation differences - - - - (81) - (81) - (81)

Total comprehensive income for the financial year - - - - (81) 33,596 33,515 1,149 34,664

Contribution by and distribution to owners of the Company: - Purchase of treasury shares - (90) - - - - (90) - (90) - Treasury shares sold - 921 889 - - - 1,810 - 1,810 - Dividend 34 - - - - - (10,796) (10,796) - (10,796) Changes in ownership interests in subsidiaries that do not result in a loss of control - - - - - (356) (356) 195 (161)

Total transactions with owners - 831 889 - - (11,152) (9,432) 195 (9,237)

Balance at 30.6.2015 60,000 (90) 889 (28,123) (49) 112,174 144,801 4,263 149,064

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 70 STATEMENTS OF CHANGES IN EQUITY (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

Non-Distributable Distributable Employees’ Foreign Share Exchange Attributable Non- Share Treasury Share Merger Option Translation Retained To Owners Of Controlling Total Capital Shares Premium Deficit Reserve Reserve Profits The Company Interests Equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 The Group

Balance at 1.7.2015 60,000 (90) 889 (28,123) - (49) 112,174 144,801 4,263 149,064

Profit after taxation for the financial year ------47,793 47,793 2,766 50,559 Other comprehensive income for the financial year: - Foreign currency translation differences - - - - - (109) - (109) - (109)

Total comprehensive income for the financial year - - - - - (109) 47,793 47,684 2,766 50,450

Balance carried forward 60,000 (90) 889 (28,123) - (158) 159,967 192,485 7,029 199,514

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 71 STATEMENTS OF CHANGES IN EQUITY (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

Non-Distributable Distributable Employees’ Foreign Share Exchange Attributable Non- Share Treasury Share Merger Option Translation Retained To Owners Of Controlling Total Note Capital Shares Premium Deficit Reserve Reserve Profits The Company Interests Equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 The Group

Balance brought forward 60,000 (90) 889 (28,123) - (158) 159,967 192,485 7,029 199,514

Contributions by and distributions to owners of the Company:

- Recognition of share option expenses - - - - 2,318 - - 2,318 - 2,318 - Employees’ share options exercised 17 73 - 222 - - - - 295 - 295 - Issuance of shares upon warrants exercised 1 - 1 - - - - 2 - 2 - Purchase of treasury shares - (3,926) - - - - - (3,926) - (3,926) - Dividends: - by the Company 34 ------(30,848) (30,848) - (30,848) - by subsidiary to non-controlling interest ------(1,874) (1,874) Changes in a subsidiary’s ownership interests that do not result in a loss of control ------343 343 (644) (301)

Total transactions with owners 74 (3,926) 223 - 2,318 - (30,505) (31,816) (2,518) (34,334) Transfer to share premium upon exercise of share options - - 77 - (77) - - - - -

Balance at 30.6.2016 60,074 (4,016) 1,189 (28,123) 2,241 (158) 129,462 160,669 4,511 165,180

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 72 STATEMENTS OF CHANGES IN EQUITY (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

Non-Distributable Distributable Employees’ Share Treasury Share Share Retained Total Capital Shares Premium Option Profits Equity Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 The Company

Balance at 1.7.2014 60,000 (921) - - 194 59,273

Profit after taxation/Total comprehensive income for the financial year - - - - 17,997 17,997

Contribution by and distribution to owners of the Company: - Purchase of treasury shares - (90) - - - (90) - Treasury shares sold - 921 889 - - 1,810 - Dividend 34 - - - - (10,796) (10,796)

Total transactions with owners - 831 889 - (10,796) (9,076)

Balance at 30.6.2015/1.7.2015 60,000 (90) 889 - 7,395 68,194

Profit after taxation/Total comprehensive income for the financial year - - - - 30,023 30,023

Contributions by and distributions to owners of the Company: - Recognition of share option expenses - - - 2,318 - 2,318 - Employees’ share options exercised 73 - 222 - - 295 - Issuance of shares upon warrants exercised 1 - 1 - - 2 - Purchase of treasury shares - (3,926) - - - (3,926) - Dividend 34 - - - - (30,848) (30,848)

Total transactions with owners 74 (3,926) 223 2,318 (30,848) (32,159)

Transfer to share premium upon exercise of share options - - 77 (77) - -

Balance at 30.6.2016 60,074 (4,016) 1,189 2,241 6,570 66,058

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 73 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES Profit before taxation 61,987 46,942 30,206 17,997

Adjustments for:- Allowance for impairment losses on: - trade receivables 6,276 11,133 - - - other receivables - 72 - - Depreciation of property, plant and equipment 3,010 2,828 - - Fair value adjustment: - investment properties 346 (1,869) - - Interest expense 1,290 1,043 - - Property, plant and equipment written off 250 125 - - Recognition of share option expenses 2,318 - 1,270 - Dividend income from subsidiaries - - (34,000) (21,000) (Gain)/Loss on disposal of - property, plant and equipment (248) (223) - - - leasehold land and buildings arising from compulsory land acquisition (28,844) - - - - investment properties 9 - - - Income from short-term investments (920) (522) (61) (39) Interest income (88) (164) (10) (4) Reversal of allowance for impairment losses on receivables (1,198) (5,800) - - Unrealised gain on foreign exchange (89) (402) - -

Operating profit/(loss) before working capital changes 44,099 53,163 (2,595) (3,046) Increase in amount owing by contract customers (3,165) (14,769) - - (Decrease)/Increase in amount to contract customers (13,882) 7,861 - - Decrease/(Increase) in inventories 549 (862) - - Decrease /(Increase) in trade and other receivables 3,882 (6,460) 222 (299) Increase/(Decrease) in trade and other payables 6,286 (1,672) 1,460 1,675 CASH FROM/(FOR) OPERATIONS CARRIED FORWARD 37,769 37,261 (913) (1,670)

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 74 ANNUAL REPORT 2016 STATEMENTS OF CASH FLOWS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

The Group The Company 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000

CASH FROM/(FOR) OPERATIONS BROUGHT FORWARD 37,769 37,261 (913) (1,670)

Interest paid (1,290) (1,043) - - Income tax (paid)/refunded (13,029) (13,819) 557 11

NET CASH FROM/(FOR) OPERATING ACTIVITIES 23,450 22,399 (356) (1,659)

CASH FLOWS FROM/(FOR) INVESTING ACTIVITIES Acquisition of subsidiary shares from non-controlling interests (300) (161) (300) - Advances to subsidiaries - - (6,694) (10,255) Dividend received from subsidiaries: - - 34,000 21,000 Income from short-term investments received 920 522 61 39 Interest received 88 164 10 4 Proceeds from disposal of: - property, plant and equipment 1,158 466 - - - leasehold land and buildings arising from compulsory land acquisition 43,757 - - - - investment properties 1,400 - - - Purchase of property, plant and equipment 35 (1,823) (4,260) - - Purchase of investment properties (1,505) (3,014) - - Withdrawal/(Placement) of short-term investments with maturity periods above 3 months 7,138 (7,138) - -

NET CASH FROM/(FOR) INVESTING ACTIVITIES 50,833 (13,421) 27,077 10,788

BALANCE CARRIED FORWARD 74,283 8,978 26,721 9,129

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 75 STATEMENTS OF CASH FLOWS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

The Group The Company 2016 2015 2016 2015 Note RM’000 RM’000 RM’000 RM’000

BALANCE BROUGHT FORWARD 74,283 8,978 26,721 9,129

CASH FLOWS FOR FINANCING ACTIVITIES

Advances from a subsidiary - - 8,143 - Dividends paid to: - owners of the Company (11,962) (5,998) (11,962) (5,998) - non-controlling interests (1,874) - - - Drawdown of term loans - 5,078 - - Proceeds from exercise of - employees’ share options 295 - 295 - - warrants 2 - 2 - Purchase of treasury shares (3,926) (90) (3,926) (90) Resale of treasury shares - 1,810 - 1,810 Repayment of term loans (2,527) (2,767) - - Repayment of hire purchase obligations (901) (565) - -

NET CASH FOR FINANCING ACTIVITIES (20,893) (2,532) (7,448) (4,278)

NET INCREASE IN CASH AND CASH EQUIVALENTS 53,390 6,446 19,273 4,851

EFFECT OF FOREIGN EXCHANGE TRANSLATION (109) (84) - -

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 39,881 33,519 5,525 674

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 36 93,162 39,881 24,798 5,525

The annexed notes form an integral part of these financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 76 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

1. gENERAL INFORMATION

The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:-

Registered office : Lot 6.05, Level 6, KPMG Tower, 8, First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan.

Principal place of business : Lot 24, Jalan Teknologi, Taman Sains Selangor 1, Kota Damansara, PJU5, 47810 Petaling Jaya, Selangor Darul Ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 6 October 2016.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding whilst the principal activities of its subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. BASIS OF PREPARATION

The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

3.1 No new accounting standards and interpretations (including the consequential amendments) have been adopted by the Group during the current financial year.

3.2 The Group has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:-

MFRSs and/or IC Interpretations (Including The Consequential Amendments) Effective Date MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) 1 January 2018 MFRS 14 Regulatory Deferral Accounts 1 January 2016 MFRS 15 Revenue from Contracts with Customers 1 January 2018 MFRS 16 Leases 1 January 2019 Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018 Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor Deferred until and its Associate or Joint Venture further notice Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016 Amendments to MFRS 15: Effective Date of MFRS 15 1 January 2018 Amendments to MFRS 15: Clarifications to MFRS 15 ‘Revenue from Contracts with Customers’ 1 January 2018 Amendments to MFRS 101: Disclosure Initiative 1 January 2016 Amendments to MFRS 107: Disclosure Initiative 1 January 2017 Amendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017 Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation 1 January 2016 Amendments to MFRS 116 and MFRS 141: Agriculture – Bearer Plants 1 January 2016 Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016 Annual Improvements to MFRSs 2012 – 2014 Cycle 1 January 2016

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 77 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

3. BASIS OF PREPARATION (CONT’D)

3.2 The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application except as follows:-

(a) MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces the existing guidance in MFRS 139 and introduces a revised guidance on the classification and measurement of financial instruments, including a single forward-looking ‘expected loss’ impairment model for calculating impairment on financial assets, and a new approach to hedge accounting. Under this MFRS 9, the classification of financial assets is driven by cash flow characteristics and the business model in which a financial asset is held. Therefore, it is expected that the Group’s investments in unquoted shares that are currently stated at cost less accumulated impairment losses will be measured at fair value through other comprehensive income upon the adoption of MFRS 9. The Group is currently assessing the financial impact of adopting MFRS 9.

(b) MFRS 15 establishes a single comprehensive model for revenue recognition and will supersede the current revenue recognition guidance and other related interpretations when it becomes effective. Under MFRS 15, an entity shall recognise revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the distinct promised goods or services underlying the particular performance obligation is transferred to the customers. The amendments to MFRS 15 further clarify the concept of ‘distinct’ for the purposes of this accounting standard. In addition, extensive disclosures are also required by MFRS 15. The Group anticipates that the application of MFRS 15 in the future may have a material impact on the amounts reported and disclosures made in the financial statements. However, it is not practicable to provide a reasonable estimate of the financial impacts of MFRS 15 until the Group performs a detailed review.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:-

(a) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(b) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax expense and deferred tax balances in the year in which such determination is made.

(c) Impairment of Non-financial Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 78 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

(d) Classification between Investment Properties and Owner-occupied Properties

The Group determines whether a property qualifies as an investment property, and has developed a criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independent of the other assets held by the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property.

(e) Classification of Leasehold Land

The classification of leasehold land as a finance lease or an operating lease requires the use of judgement in determining the extent to which risks and rewards incidental to its ownership lie. Despite the fact that there will be no transfer of ownership by the end of the lease term and that the lease term does not constitute the major part of the indefinite economic life of the land, management considered that the present value of the inception of the lease payments approximated to the fair value of the land at the minimum lease. Accordingly, management judged that the Group has acquired substantially all the risks and rewards incidental to the ownership of the land through a finance lease.

(f) Contracts

Contracts accounting requires reliable estimation of the costs to complete the contract and reliable estimation of the stage of completion.

(i) Contract Revenue

Contract accounting requires that variation claims and incentive payments only be recognised as contract revenue to the extent that it is probable that they will be accepted by the customers. As the approval process often takes some time, a judgement is required to be made of its probability and revenue recognised accordingly.

(ii) Contract Costs

Using experience gained on each particular contract and taking into account the expectations of the time and materials required to complete the contract, management estimates the profitability of the contract on an individual basis at any particular time.

(g) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 79 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

(h) write-down of Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.

(i) Fair Value Estimates for Certain Financial Assets and Liabilities

The Group carries certain financial assets and financial liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity.

(j) Share-based Payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity investments at the date at which they are granted. The estimating of the fair value requires determining the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. This also requires determining the most appropriate inputs to the valuation model including the expected life of the option volatility and dividend yield and making assumptions about them.

4.2 BASIS OF CONSOLIDATION

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period.

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

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

(a) Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss when incurred.

In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

Non-controlling interests in the acquiree may be initially measured either at fair value or at the non- controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 80 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.2 BASIS OF CONSOLIDATION (CONT’D)

(b) Non-controlling Interests

Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from the equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

(c) Changes in Ownership Interests in Subsidiaries Without Change of Control

All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity of the Group.

(d) Loss of Control

Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit or loss which is calculated as the difference between:-

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests.

Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of (i.e. reclassified to profit or loss or transferred directly to retained profits). The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

4.3 FUNCTIONAL AND FOREIGN CURRENCIES

(a) Functional and Presentation Currency

The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional and presentation currency and has been rounded to the nearest thousand, unless otherwise stated.

(b) Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

(c) Foreign Operations

Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end of the reporting period. Income, expenses and other comprehensive income of foreign operations are translated at exchange rates ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity; attributed to the owners of the Company and non-controlling interests as appropriate.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 81 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.3 FUNCTIONAL AND FOREIGN CURRENCIES (CONT’D)

(c) Foreign Operations (Cont’d)

Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period.

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign subsidiary, or a partial disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that foreign operation attributable to the owners of the Company are reclassified to profit or loss as part of the gain or loss on disposal. The portion that related to non-controlling interests is derecognised but is not reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non- controlling interests and are not recognised in profit or loss. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the proportionate share of the accumulative exchange differences is reclassified to profit or loss.

In the consolidated financial statements, when settlement of an intragroup loan is neither planned nor likely to occur in the foreseeable future, the exchange differences arising from translating such monetary item are considered to form part of a net investment in the foreign operation and are recognised in other comprehensive income.

4.4 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised in the statements of financial position when the Group has become a party to the contractual provisions of the instruments.

Financial instruments are classified as financial assets, financial liabilities or equity in accordance with the substance of the contractual arrangement and their definition in MFRS132. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.

Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

(a) Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.

(i) Financial Assets at Fair Value Through Profit or Loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 82 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.4 FINANCIAL INSTRUMENTS (CONT’D)

(a) Financial Assets (Cont’d)

(i) Financial Assets at Fair Value Through Profit or Loss (cont’d)

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Group’s right to receive payment is established.

Financial assets at fair value through profit or loss could be presented as current assets or non- current assets. Financial assets that are held primarily for trading purposes are presented as current assets whereas financial assets that are not held primarily for trading purposes are presented as current assets or non-current assets based on the settlement date.

(ii) Held-to-maturity Investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with interest income recognised in profit or loss on an effective yield basis.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current assets.

(iii) Loans and Receivables Financial Assets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets.

(iv) Available-for-sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories.

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 83 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.4 FINANCIAL INSTRUMENTS (CONT’D)

(b) Financial Liabilities

All financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.

Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(c) Equity Instruments

Equity instruments classified as equity are measured at cost and are not remeasured subsequently.

(i) Ordinary Shares

Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(ii) Treasury Shares

When the Company’s own shares recognised as equity are bought back, the amount of the consideration paid, including all costs directly attributable, are recognised as a deduction from equity. Own shares purchased that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares.

Where treasury shares are sold, the difference between the sales consideration and the carrying amount of the treasury shares are shown as a movement in equity. When the consideration received is more than the carrying amount, the credit difference arising is taken to the share premium account. Where the consideration received is less than the carrying amount, the debit difference is offset against reserves.

(d) Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. 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 or 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.

4.5 INVESTMENTS IN SUBSIDIARIES

Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investments includes transaction costs.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 84 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.6 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Freehold land is stated at cost less any impairment losses, and is not depreciated.

Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Freehold building 2% Leasehold land over the remaining lease period of 94 years Buildings over the lease period of 94 years Computers 20% - 40% Furniture and fittings, renovation and signboards 10% Motor vehicles 20% Plant and machinery, tools and factory equipment 10% Showroom and office equipment 10% - 20%

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and 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.

Capital work-in-progress represents assets under construction, and which are not ready for commercial use at the end of the reporting period. Capital work-in-progress is stated at cost, and is transferred to the relevant category of assets and depreciated accordingly when the assets are completed and ready for commercial use.

Cost of capital work-in-progress includes direct cost, related expenditure and interest cost on borrowings taken to finance the construction or acquisition of the assets to the date that the assets are completed and put into use.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset, being the difference between the net disposal proceeds and the carrying amount, is recognised in profit or loss.

4.7 IMPAIRMENT

(a) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss and investments in subsidiaries), are assessed at the end of each reporting period 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.

An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets 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 financial asset’s original effective interest rate.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 85 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.7 IMPAIRMENT (CONT’D)

(a) Impairment of Financial Assets (Cont’d)

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

(b) Impairment of Non-financial Assets

The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when an annual impairment assessment is compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value in use, which is measured by reference to discounted future cash flow using a pre-tax discount rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised in profit or loss immediately.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

4.8 INVESTMENT PROPERTIES

Investment properties are properties held either to earn rental income or for capital appreciation or for both. Initially investment properties are measured at cost including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the year in which they arise.

If the Group determines that the fair value of an investment property under construction is not reliably determinable but expects the fair value of the property to be reliably determinable when construction is complete, the Group shall measure that investment property under construction at cost until either its fair value becomes reliably determinable or construction is completed (whichever is earlier). Once the Group is able to measure reliably the fair value of an investment property under construction that has previously been measured at cost, the Group shall measure that property at its fair value.

Investment properties are derecognised when they have either been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal.

On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property or inventories, the fair value at the date of change becomes the cost for subsequent accounting purposes. If owner-occupied property becomes an investment property, such property shall be accounted for in accordance with the accounting policy set for property, plant and equipment up to date of change in use.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 86 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.9 ASSETS UNDER HIRE PURCHASE

Assets acquired under hire purchase are capitalised in the financial statements as property, plant and equipment and the corresponding obligations are treated as hire purchase payables. The assets capitalised are measured at the lower of the fair value of the leased assets and the present value of the minimum lease payments and are depreciated on the same basis as owned assets. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant periodic rate of charge on the hire purchase outstanding. Finance charges are recognised in profit or loss over the period of the respective hire purchase agreements

4.10 INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in-first-out basis and comprises the purchase price, production or conversion costs and incidentals incurred in bringing the inventories to their present location and condition.

Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

Where necessary, due allowance is made for all obsolete, damaged and slow-moving items.

4.11 AMOUNTS OWING BY/TO CONTRACT CUSTOMERS

The amounts owing by/to contract customers are stated at cost plus profits attributable to contracts in progress less progress billings and allowance for foreseeable losses, if any. Cost includes direct materials, labour and applicable overheads.

4.12 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.

4.13 PROVISIONS

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. The unwinding of the discount is recognised as interest expense in profit or loss.

4.14 BORROWING COSTS

Borrowing costs, directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

All other borrowing costs are recognised in profit or loss as expenses in the period in which they incurred.

4.15 INCOME TAXES

Income tax for the reporting period comprises current tax and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting period and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 87 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.15 INCOME TAXES (CONT’D)

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Where investment properties are carried at their fair value, the amount of deferred tax recognised is measured using the tax rates that would apply on sale of those assets at their carrying value at the reporting date unless the property is depreciable and is held with the objective to consume substantially all of the economic benefits embodies in the property over time, rather than through sale.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity and the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs.

4.16 EMPLOYEE BENEFITS

(a) Short-term Benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Group.

(b) Defined Contribution Plans

The Group’s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

(c) Share-based Payment Transactions

The Group operates an equity-settled share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments of the Company (known as “share options”).

At grant date, the fair value of the share options is recognised as an expense on a straight-line method over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding credit to employee share option reserve in equity. The amount recognised as an expense is adjusted to reflect the actual number of the share options that are expected to vest. Service and non- market performance conditions attached to the transaction are not taken into account in determining the fair value.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 88 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.16 EMPLOYEE BENEFITS (CONT’D)

(c) Share-based Payment Transactions (Cont’d)

In the Company’s separate financial statements, the grant of the share options to the subsidiaries’ employees is not recognised as an expense. Instead, the fair value of the share options measured at the grant date is accounted for as an increase to the investment in subsidiary undertaking with a corresponding credit to the employee share option reserve.

Upon expiry of the share option, the employee share option reserve is transferred to retained profits.

When the share options are exercised, the employee share option reserve is transferred to share capital or share premium if new ordinary shares are issued.

4.17 CONTINGENT LIABILITIES

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

4.18 RELATED PARTIES

A party is related to an entity (referred to as the “reporting entity”) if:-

(a) A person or a close member of that person’s family is related to a reporting entity if that person:-

(i) has control or joint control over the reporting entity; (ii) has significant influence over the reporting entity; or (iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the reporting entity.

(b) An entity is related to a reporting entity if any of the following conditions applies:-

(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. (vi) The entity is controlled or jointly controlled by a person identified in (a) above. (vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). (viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including any director (whether executive or otherwise) of that entity.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 89 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.19 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 to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

4.20 EARNINGS PER ORDINARY SHARE

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

Diluted earnings per ordinary share is determined by adjusting the consolidated profit or loss attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding, adjusted, for own shares held, for the effects of all dilutive potential ordinary shares.

4.21 REVENUE AND OTHER INCOME

(a) Contracts

Revenue on contracts is recognised on the percentage of completion method unless the outcome of the contract cannot be reliably determined, in which case revenue on contracts is only recognised to the extent of contract costs incurred that are recoverable. Foreseeable losses, if any, are provided for in full as and when it can be reasonably ascertained that the contract will result in a loss.

The stage of completion is determined based on the proportion that the contract costs incurred for work performed to date bear to the estimated total contract costs.

(b) Sale of Goods

Revenue is measured at fair value of the consideration received or receivable and is recognised upon delivery of goods and customers’ acceptance and where applicable, net of returns, cash and trade discounts.

(c) Services

Revenue is recognised upon the rendering of services and when the outcome of the transaction can be estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable.

(d) Rental Income

Rental income is accounted for on a straight-line method over the lease term.

(e) Interest Income

Interest income is recognised on an accrual basis using the effective interest method.

(f) Dividend Income

Dividend income from investment is recognised when the right to receive dividend payment is established.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 90 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.22 FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction 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.

For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:-

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date;

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

Level 3: Inputs are unobservable inputs for the asset or liability.

The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.

5. INVESTMENTS IN SUBSIDIARIES

The Company 2016 2015 RM’000 RM’000

Unquoted shares, at cost At 1 July 31,137 31,137 Addition during the year 300 - At 30 June 31,437 31,137

During the financial year:-

(a) the Group acquired two new subsidiaries as follows: (i) Flamingo Power Sdn. Bhd; and (ii) Signature Design & Technology Sdn. Bhd.

(b) the Group incorporated a new wholly-owned subsidiary known as Signature Kitchen (UK) Pte. Ltd.

(c) the Company increased its effective equity from 80% to 100% in an existing subsidiary namely Signature Interiors Sdn. Bhd., through the acquisition of equity from non-controlling interests.

The events above have no significant effect on the financial results of the Group for the current financial year and the financial position of the Group as at the end of the reporting period.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 91 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

5. INVESTMENTS IN SUBSIDIARIES (CONT’D)

The details of the subsidiaries are as follows:-

Principal Place Effective Equity Name of Subsidiary of Business Interest Principal Activities 2016 2015 Direct subsidiaries:-

Signature Cabinet Malaysia 100% 100% Design, marketing and distribution of Sdn. Bhd. kitchen systems, wardrobe systems and built-in kitchen appliances.

Signature Aluminium Malaysia 60% 60% Manufacture, supply, fabrication, and Sdn. Bhd. installation of aluminium, glass and aluminium related products for the retail and project business.

Signature Obicorp Sdn. Malaysia 100% 100% Marketing and distribution of built-in Bhd. kitchen appliances and white goods.

Kubiq Sdn. Bhd. Malaysia 100% 100% Selling, marketing and distributing kitchen and bedroom cabinets, knockdown furniture and furniture parts, appliances and accessories.

Signature Interiors Malaysia 100% 80% Interior decorators, consultants and Sdn. Bhd. planners of the arrangement, decoration and furnishing of office, shops and residential interiors.

Signature Realty Malaysia 100% 100% Investment properties holding. Sdn. Bhd.

Indirect subsidiaries:-

Signature Manufacturing Malaysia 100% 100% Manufacturing of kitchen systems and Sdn. Bhd. wardrobe systems.

Signature Kitchen Sdn. Malaysia 100% 100% Retailing of kitchen systems, wardrobe Bhd. systems and build-in kitchen appliances.

Fabriano Sdn. Bhd. Malaysia 100% 100% Investment holding.

A Concept Kitchen & Malaysia 91.34% 91.34% Marketing and distribution of built-in Bath Sdn. Bhd. kitchen appliances, white goods and bathroom accessories.

Equal Strategy Pte. Ltd. The British Virgin 100% 100% Investment holding. lslands

Signature Global The Republic of 100% 100% Marketing and distribution of kitchen Marketing Pte. Ltd. ^ Singapore systems, wardrobe systems and built-in kitchen appliances.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 92 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

5. INVESTMENTS IN SUBSIDIARIES (CONT’D)

The details of the subsidiaries are as follows (Cont’d):-

Principal Place Effective Equity Name of Subsidiary of Business Interest Principal Activities 2016 2015 Indirect subsidiaries:-

Fabriano Kitchen Cabinet The People’s 100% 100% Manufacturing, distribution, import and (Foshan) Pte. Ltd. * Republic of China export of kitchen systems, wardrobe systems, built-in kitchen appliances, lighting and bathroom accessories.

Cosentino Quartz (M) Malaysia 100% 100% Retail solid surface, worktop and related Sdn. Bhd. products.

Signature Academy Malaysia 100% 100% Providing of in-house courses, workshops Sdn. Bhd and supply manpower related to installation of kitchen cabinet, wardrobe and any other related carpentry and kitchen work.

Flamingo Power Malaysia 60% - Dormant Sdn. Bhd. #

Signature Design & Malaysia 48% - Dormant Technology Sdn. Bhd. #

Signature Kitchen (UK) United Kingdom 100% - Dormant Pte. Ltd. #

^ This subsidiary was audited by a member firm of Crowe Horwath International of which Crowe Horwath is a member.

* This subsidiary was audited by other firms of chartered accountants.

# This subsidiary was incorporated during the financial year and did not commence business operations since incorporation. The consolidation of this subsidiary is based on the management accounts for the financial year ended 30 June 2016.

(a) The non-controlling interests at the end of the reporting period comprise the following:-

Effective Equity Interest The Group 2016 2015 2016 2015 % % RM’000 RM’000

Signature Aluminium Sdn. Bhd. (“SASB”) 40 40 4,529 3,633 Signature Interiors Sdn. Bhd. (“SISB”) - 20 - 644 Other individually immaterial subsidiaries (18) (14)

4,511 4,263

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 93 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

5. INVESTMENTS IN SUBSIDIARIES (CONT’D)

The details of the subsidiaries are as follows (Cont’d):-

(b) The summarised financial information (before intra-group elimination) for each subsidiary that has non- controlling interests that are material to the Group is as follows:-

SASB 2016 2015 RM’000 RM’000

At 30 June Non-current assets 8,078 3,565 Current assets 28,740 32,240 Non-current liabilities (3,783) (473) Current liabilities (21,712) (26,249) Net assets 11,323 9,083

Financial Year Ended 30 June Revenue 29,085 44,886 Profit for the financial year 6,925 1,945 Total comprehensive income 6,925 1,945

Total comprehensive income attributable to non-controlling interests 2,770 778 Dividend paid to non-controlling interest 1,874 -

Net cash flows from operating activities 6,262 3,388 Net cash flows for investing activities (1,299) (4,551) Net cash flows for financing activities (4,819) (83)

SISB 2015 RM’000 At 30 June

Non-current asset 20 Current assets 15,382 Current liabilities (12,181) Net assets 3,221

Financial year ended 30 June Revenue 25,769 Profit for the financial year 1,886 Total comprehensive income 1,886

Total comprehensive expenses attributable to non-controlling Interests 377

Net cash flows for operating activities (3,442) Net cash flows for investing activities - Net cash flows from financing activities 3,103

The financial information of SISB for the financial year ended 2016 is not presented as SISB is a wholly-owned subsidiary of the Group at the end of the reporting period.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 94 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

6. PROPERTY, PLANT AND EQUIPMENT

Foreign At Written Depreciation Exchange At 1.7.2015 Additions Disposals Off Charge Differences 30.6.2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 The Group

Net Book Value

Buildings 15,011 1,700 (6,051) - (224) - 10,436 Freehold land - 2,088 - - - - 2,088 Leasehold land 24,307 - (9,106) - (250) - 14,951 Plant and machinery, tools and factory equipment 2,347 58 (47) (4) (444) - 1,910 Motor vehicles 3,194 1,346 (103) - (1,150) - 3,287 Furniture and fittings, renovation and signboards 2,328 263 (417) (36) (332) - 1,806 Showroom and office equipment 1,887 600 (99) (210) (492) - 1,686 Computers 238 47 - - (118) (1) 166 49,312 6,102 (15,823) (250) (3,010) (1) 36,330

Foreign At Written Depreciation Exchange At 1.7.2014 Additions Disposals Off Charge Differences 30.6.2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 The Group

Net Book Value

Buildings 15,254 - - - (243) - 15,011 Leasehold land 24,575 - - - (268) - 24,307 Plant and machinery, tools and factory equipment 1,518 1,224 (12) - (391) 8 2,347 Motor vehicles 2,075 2,257 (88) - (1,049) (1) 3,194 Furniture and fittings, renovation and signboards 1,946 958 (93) (118) (386) 21 2,328 Showroom and office equipment 984 1,326 (33) (5) (386) 1 1,887 Computers 144 214 (17) (2) (105) 4 238 46,496 5,979 (243) (125) (2,828) 33 49,312

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 95 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

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

At Accumulated Net Book Cost Depreciation Value RM’000 RM’000 RM’000 The Group

At 30.6.2016

Buildings 12,462 (2,026) 10,436 Freehold Land 2,088 - 2,088 Leasehold Land 16,686 (1,735) 14,951 Plant and machinery, tools and factory equipment 4,394 (2,484) 1,910 Motor vehicles 7,722 (4,435) 3,287 Furniture and fittings, renovation and signboards 2,822 (1,016) 1,806 Showroom and office equipment 3,009 (1,323) 1,686 Computers 686 (520) 166 49,869 (13,539) 36,330

At 30.6.2015

Buildings 18,048 (3,037) 15,011 Leasehold Land 26,780 (2,473) 24,307 Plant and machinery, tools and factory equipment 4,397 (2,050) 2,347 Motor vehicles 7,402 (4,208) 3,194 Furniture and fittings, renovation and signboards 3,524 (1,196) 2,328 Showroom and office equipment 4,378 (2,491) 1,887 Computers 960 (722) 238 65,489 (16,177) 49,312

(a) The total net book value of the motor vehicles of the Group acquired under hire purchase terms at the end of the reporting period amounted to approximately RM3,142,000 (2015 - RM2,940,000).

(b) Included in property, plant and equipment of the Group are the following assets pledged to financial institutions as security for banking facilities granted to the Group:-

2016 2015 RM’000 RM’000

Buildings 10,436 8,853 Freehold land 2,088 - Leasehold land 14,951 15,117 27,475 23,970

SIGNATURE INTERNATIONAL BERHAD (754118-K) 96 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

7. INVESTMENT PROPERTIES

The Group 2016 2015 RM’000 RM’000

At 1 July 35,868 30,985 Additions during the financial year 1,505 3,014 Fair value adjustment (346) 1,869 Disposals during the financial year (1,409) - At 30 June 35,618 35,868

Investment properties comprise the following:-

Freehold buildings: - completed investment properties, at fair value 15,795 8,389 - investment property under construction, at cost 501 8,182 16,296 16,571 Leasehold buildings: - completed investment properties, at fair value 19,322 19,297 At 30 June 35,618 35,868

(a) The investment properties of approximately RM26,546,651 (2015 - RM21,597,000) at the end of the reporting period were pledged to licensed banks as security for banking facilities granted to the Group.

(b) The fair values of completed investment properties are analysed as follows:-

Level 1 Level 2 Level 3 Total The Group RM’000 RM’000 RM’000 RM’000

2016

Buildings: - freehold - 15,795 - 15,795 - leasehold - 19,322 - 19,322 - 35,117 - 35,117

2015

Buildings: - freehold - 8,389 - 8,389 - leasehold - 19,297 - 19,297 - 27,686 - 27,686

The level 2 fair values of the buildings have been derived using the market comparison approach performed by an independent valuer. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties. There has been no change to the valuation technique during the financial year.

There were no transfers between the various levels during the financial year.

(c) The investment property under construction is stated at cost. The fair value of this property is unable to be determined reliably as there are uncertainties in estimating its fair value at this junction.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 97 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

8. OTHER INVESTMENT

The Group 2016 2015 RM’000 RM’000

Unquoted shares outside Malaysia, at cost 321 321 Allowance for impairment losses (321) (321) - -

On 21 February 2007, the Group acquired a 32% equity interest in Signature Kitchen India Private Limited, a company incorporated in India.

The Group does not consider this investment as an associate as the Group has no significant influence over its financial and operating policy decisions.

9. DEFERRED TAX ASSETS/(LIABILITIES)

The Group 2016 2015 RM’000 RM’000

At 1 July (562) (141) Recognised in the profit or loss (Note 32) 1,164 (421) At 30 June 602 (562)

The Group 2016 2015 RM’000 RM’000 Presented as follows:- Deferred tax assets 3,503 2,339 Deferred tax liabilities (2,901) (2,901) 602 (562)

The components of the deferred tax assets/(liabilities) are attributable to the following:-

The Group 2016 2015 RM’000 RM’000

Deferred tax assets:- Allowance for impairment losses on receivables 3,067 2,153 Excess of depreciation over capital allowances 49 169 Others 637 166 3,753 2,488

Deferred tax liabilities:- Accelerated capital allowances over depreciation (574) (449) Leasehold land and buildings at deemed cost (2,311) (2,311) Fair value gain on investment properties (204) (204) Others (62) (86) (3,151) (3,050) 602 (562)

SIGNATURE INTERNATIONAL BERHAD (754118-K) 98 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

10. INVENTORIES

The Group 2016 2015 RM’000 RM’000 At Cost:- Raw materials, parts and accessories 3,391 8,365 Work-in-progress 782 609 Goods-in-transit 8,338 1,775 Finished goods 4,320 6,549 16,831 17,298 At Net Realisable Value:- Finished goods 208 290 17,039 17,588

Recognised in profit or loss:- Inventories recognised as cost of sales 58,214 65,521

11. AMOUNTS OWING BY/(TO) CONTRACT CUSTOMERS

The Group 2016 2015 RM’000 RM’000 Amount owing by:- Contract costs incurred to-date 262,576 215,104 Attributable profits 85,925 91,412 348,501 306,516 Progress billings (308,184) (269,364) 40,317 37,152

Amount owing to:- Contract costs incurred to-date 197,174 111,297 Attributable profits 63,555 15,982 260,729 127,279 Progress billings (278,106) (158,538) (17,377) (31,259)

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 99 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

12. TRADE RECEIVABLES

The Group 2016 2015 RM’000 RM’000

Trade receivables 56,606 62,992 Retention sums 19,211 17,325 75,817 80,317 Allowance for impairment losses (26,483) (21,411) 49,334 58,906

Allowance for impairment losses:- At 1 July (21,411) (16,078) Addition during the financial year (6,276) (11,133) Reversal during the financial year 1,198 5,800 Written off during the financial year 6 - At 30 June (26,483) (21,411)

(a) The Group’s normal trade credit terms range from 30 to 90 (2015 - 30 to 90) days. Other credit terms are assessed and approved on a case-by-case basis.

(b) The retention sums are unsecured, interest-free and expected to be collected within periods ranging from 1 to 4 (2015 - 1 to 4) years.

13. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Other receivables 5,926 4,983 4 301 Deposits 6,428 6,796 1 1 Prepayments 1,156 1,030 75 - 13,510 12,809 80 302 Less: Allowance for impairment losses (100) (100) - - 13,410 12,709 80 302

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Allowance for impairment losses: At 1 July (100) (28) - - Addition during the financial year - (72) - - At 30 June (100) (100) - -

Included in other receivables of the Group are advances to suppliers and subcontractors amounting to approximately RM2,464,000 (2015 - RM1,531,000) for future supply of goods and services.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 100 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

14. AMOUNTS OWING BY/TO SUBSIDIARIES

The amounts owing are non-trade in nature, unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

15. SHORT-TERM INVESTMENTS

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Unit trust funds, quoted in Malaysia, at fair value 57,220 24,436 371 573

Short-term investments are classified as financial assets at fair value through profit or loss, measured at fair value.

16. FIXED DEPOSIT WITH A LICENSED BANK

The fixed deposit at the end of the reporting period has been pledged to a licensed bank as security for banking facilities granted to the Group.

The fixed deposit amounted to approximately RM155,000 (2015 - RM155,000) at the end of the reporting period was held in trust by a director of the Company and a director of its subsidiary.

The effective interest rate of the fixed deposit is 3.20% (2015 - 3.30%) per annum at the end of the reporting period. The fixed deposit has a maturity period of 12 months (2015 - 12 months).

17. SHARE CAPITAL

The movements in the authorised share capital of the Company are as follows:-

<------2016------> <------2015------> Par Number Share Par Number Share Value of Shares Capital Value of Shares Capital RM ’000 RM’000 RM ’000 RM’000 Ordinary shares At 1 July 0.50 200,000 100,000 0.50 200,000 100,000 Subdivision of every 1 ordinary share of RM0.50 each into 2 shares of RM0.25 each 0.25 200,000 - - - At 30 June 0.25 400,000 200,000 0.50 200,000 100,000

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 101 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

17. SHARE CAPITAL (CONT’D)

The movements in the issued and paid-up share capital of the Company are as follows:-

<------2016------> <------2015------> Par Number Share Par Number Share Value of Shares Capital Value of Shares Capital RM ’000 RM’000 RM ’000 RM’000 Ordinary shares At 1 July 0.50 120,000 60,000 0.50 120,000 60,000 Issuance of ordinary shares pursuant to: - subdivision of every 1 ordinary share of RM0.50 each into 2 shares of RM0.25 each 0.25 120,000 - - - the Employees’ Share Option Scheme (Note 21) 0.25 295 73 - - - the Warrants 2016/2021 (Note 22) 0.25 2 1 - - At 30 June 0.25 240,297 60,074 0.50 120,000 60,000

(i) The holders of ordinary shares (except for treasury shares) are entitled to receive dividends as and when declared by the Company, and are entitled to one vote per ordinary share at meetings of the Company.

(ii) During the financial year, the Company has undertaken a share split exercise involving the subdivision of every one (1) existing ordinary share of RM0.50 each into two (2) ordinary shares of RM0.25 each in the Company.

18. SHARE PREMIUM

The movement in share premium of the Group and the Company are as follows:-

The Group/The Company 2016 2015 RM RM

At 1 July 889 - New shares issued: - under the Employees’ Share Option Scheme 299 - - exercise of Warrants 2016/2021 1 - Treasury shares sold - 889 At 30 June 1,189 889

The share premium reserve represents the premium paid on subscription of ordinary shares in the Company over and above the par value of the shares issued, net of transaction costs (if any). The share premium reserve is not distributable by way of dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act 1965.

19. MERGER DEFICIT

The merger deficit is related to the subsidiaries which were consolidated under the merger method of accounting.

The merger deficit arose from the difference between the carrying value of the investment and the nominal value of the shares of the subsidiaries upon consolidation using merger accounting principles.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 102 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

20. TREASURY SHARES

The Group/The Company 2016 2015 RM’000 RM’000

At 1 July 90 921 Share buy-back during the financial year 3,926 90 Treasury shares sold - (921) At 30 June 4,016 90

The amount relates to the acquisition cost of treasury shares.

At the Annual General Meeting held on 7 December 2015 the shareholders of the Company approved the Company’s plan to repurchase its own shares. The directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders.

During the financial year, the Company purchased its own ordinary shares from the open market under the share buy- back programme. Details of the movement of treasury shares are as follows:-

Price Per Number Of Total Par value Share Shares Consideration RM RM RM’000

Balance at 1 July 2015 0.50 1.72 - 2.80 48,000 90 Purchases before ordinary share split: - August 2015 0.50 2.02 - 2.44 437,000 922 - September 2015 0.50 1.89 20,000 38 - December 2015 0.50 1.91 97,300 186 - January 2016 0.50 1.63 - 1.75 777,200 1,290 - February 2016 0.50 1.71 - 1.74 349,800 604

0.50 1.63 - 2.44 1,681,300 3,040

Balance at 20 April 2016 0.50 1.63 - 2.80 1,729,300 3,130 Subdivision of every 1 share of RM0.50 each into 2 shares of RM0.25 each 0.25 0.82 - 1.40 1,729,300 - Purchases after ordinary share split: - June 2016 0.25 0.99 900,000 886 Balance at 30 June 2016 0.25 0.82 - 1.40 4,358,600 4,016

The total shares purchased under the share buy-back programme were financed by internally generated funds. The shares purchased were retained as treasury shares in accordance with Section 67A of the Companies Act 1965 and are presented as a deduction from shareholders’ equity.

21. EMPLOYEES’ SHARE OPTION RESERVE

The employees’ share option reserve represents the equity-settled share options granted to employees. The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of the share options.

The Employees’ Share Option Scheme of the Company (“ESOS”) is governed by the ESOS By-Laws and was approved by shareholders on 6 April 2016. The ESOS is to be in force for a period of 5 years effective from 3 May 2016.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 103 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

21. EMPLOYEES’ SHARE OPTION RESERVE (CONT’D)

The main features of the ESOS are as follows:-

(a) Eligible persons are employees and/or directors of the Group, save for companies which are dormant, who have been confirmed in the employment of the Group and is at least eighteen (18) years of age.

(b) The maximum number of new ordinary shares of the Company, which may be available under the scheme, shall not exceed in aggregate 10%, or any such amount or percentage as may be permitted by the relevant authorities of the issued and paid-up share capital of the Company (excluding treasury shares, if any) at any one time during the existence of the ESOS.

(c) The option price shall be determined by the Option Committee based on the 5-day weighted average market price of ordinary shares of the Company immediately preceding the offer date of the option, with a discount of not more than 10%, or at the par value of ordinary shares of the Company, whichever is higher.

(d) The option may be exercised by the grantee by notice in writing to the Company in the prescribed form during the option period in respect of all or any part of the new ordinary shares of the Company comprised in the ESOS as per the vesting conditions.

(e) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects with the existing ordinary shares of the Company, provided always that new ordinary shares so allotted and issued, will not be entitled to any dividends, rights, allotments and/or other distributions declared, where the entitlement date of which is prior to date of allotment and issuance of the new ordinary shares.

The option prices and the details in the movement of the options granted are as follows:-

<- Number of Options over Ordinary Shares of RM0.25 Each -> Preliminary Contractual Exercise Life of At 1 At 30 Date of Offer Price Option July 2015 Granted Exercised June 2016 3 May 2016 RM1.00 5 years - 22,195,000 (295,000) 21,900,000

During the financial year, the Company has granted 22,195,000 share options under ESOS. These options will be expiring on 2 May 2021 and are exercisable in stages if the employee remains in service within the vesting period of 5 years from the date of offer.

The fair value of the share options granted were estimated using a trinomial model, taking into account the terms and conditions upon which the options were granted. The fair value of the share options measured at grant date and the assumptions used are as follows:-

The Group/The Company 2016 2015 RM’000 RM’000

Fair value of share options at the grant date (RM) 26 sen -

Weighted average ordinary share price (RM) 1.09 - Exercise price of share option (RM) 1.00 - Expected volatility (%) 28.60 - Expected life (years) 5.00 - Risk free rate (%) 3.43 - Expected dividend yield (%) 4.33 -

SIGNATURE INTERNATIONAL BERHAD (754118-K) 104 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

22. WARRANTS

On 28 April 2016, the Company issued 59,135,342 Warrants 2016/2021 on the basis of one (1) free Warrant for every four (4) ordinary shares of RM0.25 each held in the Company. The salient features of Warrants 2016/2012 as constituted in the Deed Poll dated 6 April 2016 are as follows:-

Terms Details

Exercise Rights Each Warrant entitles the Warrant Holders, at any time during the Exercise Period, to subscribe for one (1) new Share at the Exercise Price, subject to adjustments in accordance with the provisions of the Deed Poll.

Exercise Period The Warrants may be exercised at any time within a period of five (5) years commencing from and including the date of issuance of the Warrants and ending at 5.00 p.m. on 21 April 2021. Any Warrants not exercised during the Exercise Period will thereafter lapse and cease to be valid.

Exercise Price RM0.97 payable in full upon the exercise of each Warrant.

Mode of exercise Warrant Holders must complete and sign the exercise notice (which shall be irrevocable) and deliver the duly completed and executed exercise notice to the Company’s registrar together with a remittance by way of banker’s draft or cashier’s order or money order or postal order drawn on a bank or post office operating in Malaysia.

Board lot For the purpose of trading on Bursa Securities, a board lot of Warrants shall comprise of 100 Warrants or as varied from time to time by any relevant authorities carrying the right to subscribe for 100 new Shares.

Rights of the Warrant Warrant Holders shall not be entitled to participate in any dividend, rights, allotments and/ Holders or other distributions, the entitlement date of which is prior to the date of allotment of the new Shares upon the exercise of the Warrants. Warrant Holders are not entitled to any voting rights or participation in any form of distribution and/or offer of securities in the Company until and unless such Warrant Holders exercise their Warrants into new Shares

Modification of rights The Company may, from time to time, without the consent or sanction of the Warrant Holders of the Warrant Holders but in accordance with the Deed Poll, modify the Deed Poll, if such modification made does not materially prejudice the interests of the Warrant Holders or is made to correct a manifest error or to comply with prevailing laws of Malaysia, Rules of Bursa Depository, Securities Industry (Central Depositories) Act, 1991 and/or the Listing Requirements.

Subject to the approval of any relevant authority, any modification, alteration or abrogation of the covenants or provisions contained in the Deed Poll proposed or agreed to by the Company must be sanctioned by special resolution of the Warrant Holders, effected by the Deed Poll, executed by the Company and expressed to be supplemental and comply with the requirements of the Deed Poll.

Listing status Approval in principle from Bursa Malaysia Securities Berhad (“Bursa Securities”) was obtained on 28 April 2016 for admission of the Warrants to the official List as well as the listing of the new ordinary shares arising from the exercise of the Warrants.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 105 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

22. wARRANTS (CONT’D)

The following is the movement in the number of Warrants 2016/2021 to take up unissued ordinary shares of RM0.25 each in the Company during the financial year.

No. of warrants 2016/2021

At 1 July 2015 - Issued during the financial year 59,135,342 Exercised during the financial year (2,450) At 30 June 2016 59,132,892

23. FOREIGN EXCHANGE TRANSLATION RESERVE

The foreign exchange translation reserve arose from the translation of the financial statements of foreign subsidiaries and is not distributable by way of dividends.

24. LONG-TERM BORROWINGS

The Group 2016 2015 RM’000 RM’000

Hire purchase payables (Note 28) 1,906 1,849 Term loans (Note 29) 19,265 18,798 21,171 20,647

25. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 30 to 90 (2015 - 30 to 90) days.

26. OTHER PAYABLES AND ACCRUALS

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Deposits received from customers 10,196 14,363 - - Other payables and accruals 24,312 11,008 3,367 1,887 34,508 25,371 3,367 1,887

27. SHORT-TERM BORROWINGS

The Group 2016 2015 RM’000 RM’000

Hire purchase payables (Note 28) 755 654 Term loans (Note 29) 2,915 2,689 3,670 3,343

SIGNATURE INTERNATIONAL BERHAD (754118-K) 106 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

28. HIRE PURCHASE PAYABLES

The Group 2016 2015 RM’000 RM’000 Minimum hire purchase payments: - not later than one year 874 766 - later than one year but not later than five years 1,734 1,982 - later than five years 412 78 3,020 2,826 Less: future finance charges (359) (323) Present value of hire purchase payables 2,661 2,503

Current (Note 27): - not later than one year 755 654

Non-current (Note 24): - later than one year but not later than five years 1,540 1,783 - later than five years 366 66

1,906 1,849 2,661 2,503

The hire purchase payables bore effective interest rates ranging from 4.47% to 7.00% (2015 - 4.69% to 6.39%) per annum at the end of the reporting period.

29. TERM LOANS

The Group 2016 2015 RM’000 RM’000 Current (Note 27): - repayable within one year 2,915 2,689

Non-current (Note 24): - repayable between one and two years 3,002 2,751 - repayable between two and five years 8,702 8,268 - repayable after five years 7,561 7,779

19,265 18,798 22,180 21,487

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 107 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

29. TERM LOANS (CONT’D)

Details of the repayment terms are as follows:-

Number of Date of The Group Term Monthly Monthly Commencement Amount Outstanding Loan Instalment Instalments of Repayment 2016 2015 RM RM’000 RM’000

1 29,020 120 1 July 2011 1,557 1,832 2 19,337 120 1 July 2011 1,035 1,218 3 19,337 120 1 July 2011 1,043 1,221 4 23,123 120 5 September 2011 1,029 1,189 5 4,956 120 30 June 2011 369 406 6 116,667 120 23 November 2011 7,467 8,867 7 19,362 60 1 March 2016 587 724 8 9,730 120 1 August 2015 807 852 9 8,738 120 1 August 2015 724 768 10 13,138 300 1 August 2015 2,313 2,353 11 11,488 300 1 August 2015 2,022 2,057 12 24,880 180 1 August 2016 3,227 - 22,180 21,487

The term loans bore effective interest rates ranging from 4.20% to 5.10% (2015 - 4.20% to 5.10%) per annum at the end of the reporting period.

The term loans are secured by:-

(a) a first legal charge over the freehold land, certain leasehold land and buildings of the certain subsidiaries;

(b) a first legal charge over certain investment properties of the subsidiaries;

(c) a corporate guarantee of the Company; and

(d) a joint and several guarantee of certain directors of the Company.

30. REVENUE

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Sale of goods 54,976 64,770 - - Contract revenue 141,792 208,720 - - Dividend income from subsidiaries - - 34,000 21,000 Management fee from subsidiaries - - 5,248 3,222 196,768 273,490 39,248 24,222

SIGNATURE INTERNATIONAL BERHAD (754118-K) 108 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

31. PROFIT BEFORE TAXATION

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Profit before taxation is arrived at after charging/(crediting): Allowance for impairment losses on: - trade receivables (Note 12) 6,276 11,133 - - - other receivables - 72 - - Audit fee: - current financial year 179 139 26 20 - underprovision in the previous financial year 31 10 6 - Depreciation of property, plant and equipment (Note 6) 3,010 2,828 - - Directors’ fee 186 242 186 162 Directors’ non-fee emoluments 5,226 4,047 4,798 3,557 Direct operating expenses of investment properties: - revenue generating during the financial year 37 26 - - - non-revenue generating during the financial year 37 1 - - Fair value adjustment: - investment properties (Note 7) 346 (1,869) - - Interest expense: - hire purchase 116 97 - - - term loans 1,154 914 - - - others 20 32 - - Property, plant and equipment written off (Note 6) 250 125 - - Rental of plant and machinery 57 44 - - Rental of premises 1,139 1,161 - - Rental of showroom 914 1,041 - - Staff costs: - salaries, wages, bonuses and allowance 24,459 21,477 2,339 1,278 - defined contribution plan 2,387 2,276 225 131 - other benefits 3,575 1,447 1,371 83 - share option expenses 1,664 - 691 - Compensation fee for relocation exercise arising from compulsory land aquisition (Note 44(f)) (27,647) - - - Dividend income from subsidiaries - - (34,000) (21,000) (Gain)/Loss on disposal of: - property, plant and equipment (248) (223) - - - leasehold land and buildings arising from compulsory land acquisition (28,844) - - - - investment properties 9 - - - Loss/(Gain) on foreign exchange: - realised 207 65 - - - unrealised (89) (402) - - Income from short-term investments (920) (522) (61) (39) Interest income (88) (164) (10) (4) Rental income from investment properties (406) (318) - - Reversal of allowance for impairment losses on receivables (Note 12) (1,198) (5,800) - - Sub-rental income - (2) - -

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 109 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

32. INCOME TAX EXPENSE

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Current tax: - for the financial year 13,011 13,080 183 - - overprovision in the previous financial year (419) (1,304) - - 12,592 11,776 183 -

Deferred tax (Note 9): - relating to originating and recognition of temporary differences (1,099) 512 - - - Overprovision of deferred tax liabilities in the previous financial year (65) (91) - -

(1,164) 421 - - 11,428 12,197 183 -

During the current financial year, the statutory tax rate was reduced from 25% to 24%.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

A reconciliation of income tax expense applicable to the profit before taxation at the statutory tax rate to income tax expense at the effective tax rate of the Group and of the Company is as follows:-

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Profit before taxation 61,987 46,942 30,206 17,997

Tax at the statutory tax rate of 24% (2015 - 25%) 14,877 11,736 7,249 4,499

Tax effects of:- Non-deductible expenses 3,328 1,558 1,149 213 Non-taxable gains (6,497) (569) (8,175) (5,260) Deferred tax arising from fair value gain on investment properties - 91 - - Deferred tax assets not recognised during the financial year 589 848 - 548 Utilisation of deferred tax assets not recognised in the previous financial year (314) (60) (40) - Overprovision in the previous financial year: - current tax (419) (1,304) - - - deferred tax (65) (91) - - Differential in tax rates (71) (12) - - Income tax expense for the financial year 11,428 12,197 183 -

SIGNATURE INTERNATIONAL BERHAD (754118-K) 110 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

32. INCOME TAX EXPENSE (CONT’D)

Tax savings during the financial year arising from:-

The Group 2016 2015 RM’000 RM’000

Utilisation of deferred tax assets previously not recognised arising from: - allowance for impairment losses on trade receivables 116 - - excess of depreciation over capital allowances - 132 - tax losses 1,192 106

No deferred tax assets are recognised at the end of the reporting period for the following items:-

The Group 2016 2015 RM’000 RM’000

Unutilised tax losses 3,443 3,857 Allowance for impairment losses on receivables 2,995 1,854 Provisions 418 - 6,856 5,407

33. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit after tax attributable to the owners of the Company for the financial year by the weighted average number of ordinary shares in issue excluding treasury shares during the financial year.

The Group 2016 2015

Net profit for the financial year (RM’000) 47,793 33,596

Weighted average number of ordinary shares in issue (‘000):- 237,871 239,904

Basic earnings per share (sen) 20.1 14.0

Weighted average number of ordinary shares for basic earnings per share (‘000) 237,871 239,904 Shares deemed to be issued for no consideration: - warrants 2016/2021 in issue (‘000) 197 - Weighted average number of ordinary shares for diluted earnings per share computation (‘000) 238,068 239,904

Diluted earnings per ordinary share (sen) 20.1 N/A

The share options granted to the employees under the existing ESOS have not been included in the calculation of diluted earnings per share because they are anti-dilutive as the exercise price of the share options are higher than the average market price of the Company’s shares from the grant date up to the end of the reporting period.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 111 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

34. DIVIDEND

The Group 2016 2015 RM’000 RM’000

Paid:

In respect of the financial year ended 30 June 2014: - a first and final single tier dividend of 5 sen per ordinary share - 5,998

In respect of the financial year ended 30 June 2015: - a first interim single tier dividend of 4 sen per ordinary share - 4,798 - a final single tier dividend of 6 sen per ordinary share 7,164 -

Declared:

In respect of the financial year ended 30 June 2016: - a special dividend of 10 sen per ordinary share 23,684 - 30,848 10,796

At the forthcoming Annual General Meeting, a final single tier dividend of 2 sen per ordinary share amounting to RM4,718,777 computed based on the issued and paid-up share capital with voting rights as at 30 June 2016 of 235,938,850 ordinary shares of RM0.25 each in respect of the current financial year will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed final dividend in respect of the current financial year. Such dividend, if approved by the shareholders, will be accounted for in the financial statements for the forthcoming financial year.

35. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

The Group 2016 2015 RM’000 RM’000

Cost of property, plant and equipment purchased 6,102 5,979 Amount financed through: - hire purchase (1,059) (1,719) - term loan (3,220) - Cash disbursed for purchase of property, plant and equipment 1,823 4,260

36. CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:-

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Short-term investments with financial institutions (Note 15) 57,220 24,436 371 573 Fixed deposit with a licensed bank (Note 16) 155 155 - - Cash and bank balances 35,942 22,583 24,427 4,952 93,317 47,174 24,798 5,525 Less: Short-term investments with maturity periods above 3 months - (7,138) - - Less: Fixed deposit pledged to a licensed bank (155) (155) - - 93,162 39,881 24,798 5,525

SIGNATURE INTERNATIONAL BERHAD (754118-K) 112 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

37. SIGNIFICANT RELATED PARTY DISCLOSURES

(a) Identities of related parties

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.

In addition to the information detailed elsewhere in the financial statements, the Group has related party relationships with its directors, key management personnel and entities within the same group of companies

(b) Significant Related Party Transactions and Balances

Other than those disclosed elsewhere in the financial statements, the Group and the Company also carried out the following significant transactions with the related parties during the financial year:-

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

(i) Subsidiaries Dividend income - - 34,000 21,000 Management fee - - 5,248 3,222

(ii) A company in which a substantial shareholder of the Company Project revenue - 27,736 - -

(iii) Key management personnel compensation (including directors) Short-term employee benefits 5,412 4,289 4,984 3,719

The significant outstanding balances of the related parties (including the allowance for impairment loss made) together with their terms and conditions are disclosed in the respective notes to the financial statements.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 113 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

38. KEY MANAGEMENT PERSONNEL COMPENSATION

The key management personnel of the Group and of the Company include executive directors and non-executive directors of the Company and certain members of senior management of the Group and of the Company.

(a) The key management personnel compensation during the financial year are as follows:-

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Directors

Directors of the Company

Executive Directors

Short-term employee benefits: - salaries, bonuses and other benefits 3,904 3,333 3,904 3,333 - defined contribution benefits 315 224 315 224 - share option expenses 231 - 231 - 4,450 3,557 4,450 3,557

Non-Executive Directors

Short-term employee benefits: - fee 186 162 186 162 - share option expenses 348 - 348 - 4,984 3,719 4,984 3,719

Directors

Directors of the Subsidiaries

Executive Directors

Short term employee benefits: - salaries, bonuses and other benefits 340 443 - - - defined contribution plan 41 47 - - - share option expenses 47 - - - 428 490 - -

Non-Executive Directors

Short-term employee benefits: - fee - 80 - - 428 570 - -

SIGNATURE INTERNATIONAL BERHAD (754118-K) 114 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

38. KEY MANAGEMENT PERSONNEL COMPENSATION (CONT’D)

(b) The number of the Company’s directors with total remuneration falling in bands of RM50,000 are as follows:-

The Company 2016 2015 No of Directors Executive Directors: - RM1,750,001 - RM1,800,000 - 2 - RM2,000,001 - RM2,250,000 2 -

Non-executive Directors: - Below RM50,000 - 2 - RM50,000 - RM100,000 - 1 - RM100,001 - RM150,000 2 - - RM300,001 - RM350,000 1 - 5 5

39. CAPITAL COMMITMENTS

The Group 2016 2015 RM’000 RM’000

Approved but not contracted for:- Purchase of property, plant and equipment - 486

Approved and contracted for:- Property, plant and equipment 1,093 - Investment properties 46,038 46,876

40. CONTINGENT LIABILITIES

No provisions are recognised on the following matters as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement:-

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Unsecured:-

Corporate guarantee given to licensed banks for credit facilities granted to subsidiaries - - 18,953 21,488

Performance guarantee extended by subsidiaries to third parties 16,159 21,953 - - 16,159 21,953 18,953 21,488

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 115 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

41. OPERATING SEGMENTS

Operating segments are prepared in a manner consistent with the internal reporting provided to the Group Executive Directors as its Group operating decision makers in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on their products and services provided.

The Group is organised into 5 main reportable segments as follows:-

(i) Design, Manufacture and Retail of Kitchen and Wardrobe Systems - involved in the designing, manufacturing and retailing of Group core business as in kitchen cabinets and wardrobe from point of design to delivery to the projects, retailers and end consumers.

(ii) Marketing and Distribution of White Goods - involved in the marketing and distribution of white goods and home appliances (eg. Washing machines, hood, hob, oven, fridge and etc) to projects, retailers and end consumers.

(iii) Manufacture of Glass and Aluminium Products - involved in supplying and distribution of glass and aluminium products to projects and end consumers.

(iv) Interior fit-out works - specialises in interior fit-out and design consultation for commercial projects.

(v) Others - consist of dormant and investment holding companies which are non-core business and for investment holding purposes.

The Group Executive Directors assess the performance of the reportable segments based on their profit before interest expense and taxation. The accounting policies of the reportable segments are the same as the Group’s accounting policies.

Borrowings and investment-related activities are managed on a group basis by the central treasury function and are not allocated to reportable segments.

Each reportable segment assets is measured based on all the assets (including goodwill) of the segment other than investments in associates and tax-related assets.

Each reportable segment liabilities is measured based on all liabilities of the segment other than borrowings and tax- related liabilities.

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the reportable segments are presented under unallocated items. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters) and head office expenses.

Transfer prices between operating segments are at arm’s length basis in a manner similar to transactions with third parties. The effects of such inter-segment transactions are eliminated on consolidation.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 116 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

41. OPERATING SEGMENTS (CONT’D)

41.1 BUSINESS SEGMENTS

Design Manufacture And Retail Marketing Manufacture Of Kitchen And Of Glass Consolidation And distribution And Interior Adjustments Wardrobe Of White Aluminium Fit-out And The The Group Systems Goods Products Works Others Eliminations Group 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

REVENUE: External revenue 165,105 3,425 27,914 309 15 - 196,768 Inter-segment revenue 38,212 13,779 1,171 1,701 39,405 (94,268) - Total revenue 203,317 17,204 29,085 2,010 39,420 (94,268) 196,768

RESULTS Segment results 50,881 8,999 9,369 (508) 30,086 (34,790) 64,037 Finance costs (1,698) (61) (73) - (218) - (2,050)

Profit from ordinary activities before taxation 49,183 8,938 9,296 (508) 29,868 (34,790) 61,987 Income tax expense (11,428)

Profit from ordinary activities after taxation 50,559 Non-controlling interests (2,766)

Net profit attributable to owners of the Company 47,793

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 117 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

41. OPERATING SEGMENTS (CONT’D)

41.1 BUSINESS SEGMENTS (CONT’D)

Design Manufacture And Retail Marketing Manufacture Of Kitchen And Of Glass Consolidation And distribution And Interior Adjustments Wardrobe Of White Aluminium Fit-out And The The Group Systems Goods Products Works Others Eliminations Group 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

OTHER INFORMATION Segment assets 277,653 15,848 36,782 15,233 119,572 (179,723) 285,365 Unallocated assets 5,419 290,784

Segment liabilities 177,358 3,181 24,653 12,757 60,455 (157,191) 121,213 Unallocated liabilities 4,391 125,604

Capital expenditure: - Property, plant and equipment 1,665 - 4,437 - - - 6,102 Allowance for impairment losses on trade and other receivables 4,847 11 1,418 - - - 6,276 Depreciation 2,623 31 340 16 - - 3,010 Fair value adjustment on investment properties (199) - (147) - - - (346) Reversal of allowance for Impairment losses on trade receivables (935) - - (263) - - (1,198)

SIGNATURE INTERNATIONAL BERHAD (754118-K) 118 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

41. OPERATING SEGMENTS (CONT’D)

41.1 BUSINESS SEGMENTS (CONT’D)

Design Manufacture And Retail Marketing Manufacture Of Kitchen And Of Glass Consolidation And distribution And Interior Adjustments Wardrobe Of White Aluminium Fit-out And The The Group Systems Goods Products Works Others Eliminations Group 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

REVENUE: External revenue 227,159 2,893 43,421 17 - - 273,490 Inter-segment revenue 52,276 14,737 1,465 25,752 24,362 (118,592) - Total revenue 279,435 17,630 44,886 25,769 24,362 (118,592) 273,490

RESULTS Segment results 39,317 3,498 3,128 2,598 18,201 (17,413) 49,329 Finance costs (2,097) (34) (46) (34) (176) - (2,387)

Profit from ordinary activities before taxation 37,220 3,464 3,082 2,564 18,025 (17,413) 46,942 Income tax expense (12,197)

Profit from ordinary activities after taxation 34,745 Non-controlling interests (1,149)

Net profit attributable to owners of the Company 33,596

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 119 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

41. OPERATING SEGMENTS (CONT’D)

41.1 BUSINESS SEGMENTS (CONT’D)

Design Manufacture And Retail Marketing Manufacture Of Kitchen And Of Glass Consolidation And distribution And Interior Adjustments Wardrobe Of White Aluminium Fit-out And The The Group Systems Goods Products Works Others Eliminations Group 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

OTHER INFORMATION Segment assets 236,166 15,370 35,766 15,403 91,872 (135,868) 258,709 Unallocated assets 3,981 262,690

Segment liabilities 149,598 4,211 26,586 11,847 31,260 (114,429) 109,073 Unallocated liabilities 4,553 113,626

Capital expenditure: - Property, plant and equipment 4,864 143 522 - 450 - 5,979 Allowance for impairment losses on trade and other receivables 3,804 - 7,401 - - - 11,205 Depreciation 2,392 22 312 18 84 - 2,828 Fair value adjustment on investment properties (1,195) - (145) - (529) - (1,869) Reversal of allowance for Impairment losses on trade receivables (5,742) - (58) - - - (5,800)

41.2 gEOGRAPHICAL INFORMATION

Revenue Non-Current Assets 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Malaysia 193,885 269,494 74,654 87,517 Outside Malaysia 2,883 3,996 797 2 196,768 273,490 75,451 87,519

SIGNATURE INTERNATIONAL BERHAD (754118-K) 120 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

41. OPERATING SEGMENTS (CONT’D)

41.3 MAJOR CUSTOMERS

During the financial year, there are no customers with revenue exceeding 10% of the Group’s revenue.

In the previous financial year, revenue from a single major customer, with revenue exceeding 10% of Group revenue, amounted to approximately RM30.16 million arising from sales of the design manufacture and retail of kitchen and wardrobe systems segment.

42. FOREIGN EXCHANGE RATES

The applicable closing foreign exchange rates used (expressed on the basis of one unit of foreign currency to RM equivalent) for the translation of the foreign currency balances at the end of the reporting period are as follows:-

The Group Currency 2016 2015 Code RM RM

Euro EUR 4.48 4.20 New Zealand Dollar NZD 2.87 2.55 Singapore Dollar SGD 2.99 2.80 Thai Baht THB 0.11 0.11 United Arab Emirates Dirham AED 1.10 1.03 United States Dollar USD 4.03 3.77 Australian Dollar AUD 3.00 2.90 Indonesian Rupiah IDR 0.03 0.03 Chinese Renminbi CNY 0.61 0.61 Philippine Peso PHP 0.09 0.08 Pound Sterling GBP 5.44 5.93

43. FINANCIAL INSTRUMENTS

The Group’s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

43.1 FINANCIAL RISK MANAGEMENT POLICIES

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(a) Market Risk

(i) Foreign Currency Risk

The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than the respective functional currencies of entities within the Group. The currencies giving rise to this risk are primarily United States Dollar (“USD”), Euro (“EUR”) and Singapore Dollar (“SGD”). Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 121 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(a) Market Risk (Cont’d)

(i) Foreign Currency Risk (Cont’d)

The Group’s exposure to foreign currency risk (a currency which is other than the functional currency of the entities within the Group) based on the carrying amounts of the financial instruments at the end of the reporting period is summarised below:-

Foreign Currency Exposure

United States Singapore Ringgit Dollar Dollar Euro Others Malaysia Total The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2016

Financial assets Trade receivables 59 - - 11 49,264 49,334 Other receivables and deposits 83 244 93 8 11,826 12,254 Short-term investments - - - - 57,220 57,220 Fixed deposit with a licensed bank - - - - 155 155 Cash and bank balances 2,107 928 58 406 32,443 35,942 2,249 1,172 151 425 150,908 154,905

Financial liabilities Trade payables 1,408 280 840 152 18,124 20,804 Other payables and accruals 180 45 55 209 34,019 34,508 Dividend payable - - - - 23,684 23,684 Hire purchase payables - - - - 2,661 2,661 Term loans - - - - 22,180 22,180 1,588 325 895 361 100,668 103,837

Net financial assets/ (liability) 661 847 (744) 64 50,240 51,068 Less: Net financial assets denominated in the respective entities functional currencies - - - - (50,240) (50,240) Currency exposure 661 847 (744) 64 - 828

SIGNATURE INTERNATIONAL BERHAD (754118-K) 122 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(a) Market Risk (Cont’d)

(i) Foreign Currency Risk (Cont’d)

Foreign currency exposure (Cont’d)

United States Singapore Ringgit Dollar Dollar Euro Others Malaysia Total The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2015

Financial assets Trade receivables 434 - - 38 58,434 58,906 Other receivables and deposits 449 13 62 299 10,856 11,679 Short-term investments - - - - 24,436 24,436 Fixed deposit with a licensed bank - - - - 155 155 Cash and bank balances 1,198 443 39 928 19,975 22,583 2,081 456 101 1,265 113,856 117,759

Financial liabilities Trade payables 446 7 52 270 22,880 23,655 Other payables and accruals 1,136 47 55 599 23,534 25,371 Dividend payable - - - - 4,798 4,798 Hire purchase payables - - - - 2,503 2,503 Term loans - - - - 21,487 21,487 1,582 54 107 869 75,202 77,814

Net financial assets/ (liability) 499 402 (6) 396 38,654 39,945 Less: Net financial assets denominated in the respective entities functional currencies - - - - (38,654) (38,654) Currency exposure 499 402 (6) 396 - 1,291

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 123 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(a) Market Risk (Cont’d)

(i) Foreign Currency Risk (Cont’d)

Foreign currency risk sensitivity analysis

The Group 2016 2015 RM’000 RM’000

Effects on profit after taxation/other comprehensive income

USD/RM - strengthened by 5% 25 19 - weakened by 5% (25) (19)

SGD/RM - strengthened by 5% 32 15 - weakened by 5% (32) (15)

EUR/RM - strengthened by 5% (28) - - weakened by 5% 28 -

OTHERS/RM - strengthened by 5% 2 15 - weakened by 5% (2) (15)

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from interest-bearing financial assets and liabilities. The Group’s policy is to obtain the most favourable interest rates available. Any surplus funds of the Group will be placed with licensed financial institutions to generate interest income.

The interest rate risk profile of the Group’s interest-bearing financial instruments based on the carrying amounts at the end of the reporting period are as follows:-

The Group 2016 2015 RM’000 RM’000

Fixed rate instruments

Fixed deposit with a licensed bank 155 155 Hire purchase payables (2,661) (2,503) (2,506) (2,348)

Floating rate instrument

Term loans (22,180) (21,487)

SIGNATURE INTERNATIONAL BERHAD (754118-K) 124 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(a) Market Risk (Cont’d)

(ii) Interest Rate Risk (Cont’d)

Interest rate risk sensitivity analysis

The interest rate risk sensitivity analysis on the fixed rate instruments is not disclosed as these financial instruments are measured at amortised cost. Therefore, they are not subject to interest rate risk as defined in MFRS 7 since neither their carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The following table details the sensitivity analysis instrument to a reasonably possible change in the interest rate at the end of the reporting period, with all other variables held constant:-

The Group 2016 2015 RM’000 RM’000

Effects on profit after taxation/other comprehensive income

Increase of 100 basis point (bp) (169) (161) Decrease of 100 bp 169 161

(iii) Equity Price Risk

The Group’s principal exposure to equity price risk arises mainly from changes in quoted prices for short-term investments. The Group manages its exposure to equity price risk by maintaining a portfolio of equities with different risk profiles.

Equity price risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the prices of the quoted investments at the end of the reporting period, with all other variables held constant:-

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Effects on profit after taxation/other comprehensive income

Increase of 5% 2,174 916 14 21 Decrease of 5% (2,174) (916) (14) (21)

(b) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including quoted investments, cash and bank balances and derivatives), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Groups uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 90 days, which are deemed to have higher credit risk, are monitored individually.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 125 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(b) Credit Risk (Cont’d)

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience and the current economic environment.

(i) Credit risk concentration profile

In the previous financial year, the Group’s major concentration of credit risk was related to the amount owing by a single customer which constituted approximately 10% of its trade receivables at the end of the reporting period.

(ii) Exposure to credit risk

In addition, the Group also determines concentration of credit risk by monitoring the geographical region of its trade receivables on an ongoing basis. The credit risk concentration profile of trade receivables at the end of the reporting period is as follows:-

The Group 2016 2015 RM’000 RM’000

China - 34 India - 28 Indonesia - 31 Mauritius - 13 Singapore 59 - United Arab Emirates - 58 Vietnam - 143 Thailand - 4 Malaysia 49,275 58,595 49,334 58,906

At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position of the Group and of the Company after deducting any allowance for impairment losses (where applicable).

SIGNATURE INTERNATIONAL BERHAD (754118-K) 126 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(b) Credit Risk (Cont’d)

(iii) Ageing analysis

The ageing analysis of trade receivables at the end of the reporting period is as follows:-

Gross Individual Collective Carrying Amount Impairment Impairment Value The Group RM’000 RM’000 RM’000 RM’000

2016

Not past due 21,599 - - 21,599

Past due: - less than 3 months 3,889 - - 3,889 - 3 to 6 months 4,719 - - 4,719 - over 6 months 45,610 (26,483) - 19,127 75,817 (26,483) - 49,334

2015

Not past due 12,022 (507) - 11,515

Past due: - less than 3 months 27,444 (110) - 27,334 - 3 to 6 months 6,702 - - 6,702 - over 6 months 34,149 (20,794) - 13,355 80,317 (21,411) - 58,906

At the end of the reporting period, trade receivables that are individually impaired were those in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

The Group believes that no additional impairment allowance is necessary in respect of trade receivables that are past due but not impaired because they are companies with good collection track record and no recent history of default.

(c) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 127 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(c) Liquidity Risk (Cont’d)

Maturity Analysis

The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

Contractual Contractual Over Interest Carrying Undiscounted Within 1 - 5 5 Rate Amount Cash Flows 1 Year Years Years The Group % RM’000 RM’000 RM’000 RM’000 RM’000

2016

Trade payables - 20,804 20,804 20,804 - - Other payables and accruals - 34,508 34,508 34,508 - - Dividend payable - 23,684 23,684 23,684 - - Hire purchase payables 4.47 - 7.00 2,661 2,937 873 1,519 545 Term loans 4.20 - 5.10 22,180 28,968 3,883 14,222 10,863 103,837 110,901 83,752 15,741 11,408

2015

Trade payables - 23,655 23,655 23,655 - - Other payables and accruals - 25,371 25,371 25,371 - - Dividend payable - 4,798 4,798 4,798 - - Hire purchase payables 4.69 - 6.39 2,503 2,825 766 1,982 77 Term loans 4.20 - 5.10 21,487 27,873 3,661 13,701 10,511 77,814 84,522 58,251 15,683 10,588

SIGNATURE INTERNATIONAL BERHAD (754118-K) 128 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(c) Liquidity Risk (Cont’d)

Maturity Analysis (Cont’d)

Contractual Contractual Over Interest Carrying Undiscounted Within 1 - 5 5 Rate Amount Cash Flows 1 Year Years Years The Company % RM’000 RM’000 RM’000 RM’000 RM’000

2016

Other payables and accruals - 3,367 3,367 3,367 - - Amount owing to a subsidiary - 8,143 8,143 8,143 - - Dividend payable - 23,684 23,684 23,684 - - 35,194 35,194 35,194 - -

2015

Other payables and accruals - 1,887 1,887 1,887 - - Dividend payable - 4,798 4,798 4,798 - - 6,685 6,685 6,685 - -

43.2 CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio. The Group’s strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents.

The debt-equity ratio of the Group as at the end of the reporting period was as follows:

The Group 2016 2015 RM’000 RM’000

Trade payables 20,804 23,655 Other payables and accruals 34,508 25,371 Dividend payable 23,684 4,798 Hire purchase payables 2,661 2,503 Term loans 22,180 21,487 103,837 77,814 Less: Cash and cash equivalents (Note 36) (93,162) (39,881) Net debt 10,675 37,933 Total equity 165,180 149,064 Debt-to-equity ratio 0.06 0.25

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 129 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.3 CLASSIFICATION OF FINANCIAL INSTRUMENTS

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Financial assets

Loans and receivables financial assets Trade receivables (Note 12) 49,334 58,906 - - Other receivables and deposits (Note 13) 12,254 11,679 5 302 Amount owing by subsidiaries (Note 14) - - 45,235 37,493 Fixed deposit with a licensed bank (Note 16) 155 155 - - Cash and bank balances 35,942 22,583 24,427 4,952 97,685 93,323 69,667 42,747 Fair value through profit and loss Short-term investments (Note 15) 57,220 24,436 371 573 154,905 117,759 70,038 43,320

Financial liabilities

Other financial liabilities Trade payables (Note 25) 20,804 23,655 - - Other payables and Accruals (Note 26) 34,508 25,371 3,367 1,887 Amount owing to a subsidiary (Note 14) - - 8,143 - Dividend payable 23,684 4,798 23,684 4,798 Hire purchase payables (Note 28) 2,661 2,503 - - Term loans (Note 29) 22,180 21,487 - - 103,837 77,814 35,194 6,685

SIGNATURE INTERNATIONAL BERHAD (754118-K) 130 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.4 FAIR VALUE INFORMATION

The fair values of the financial assets and financial liabilities of the Group and of the Company which are maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments.

The following table sets out the fair value profile of financial instruments that are carried at fair value and those not carried at fair value at the end of the reporting period:-

Fair Value Of Financial Instruments Carried Fair Value Of Financial Instruments Not Total At Fair Value Carried At Fair Value Fair Carrying Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Value Amount The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2016

Financial Asset Short-term investments: - unit trust funds in Malaysia 57,220 - - - - - 57,220 57,220

Financial Liabilities Hire purchase payables - - - - 2,775 - 2,775 2,661 Term loans - - - - 22,180 - 22,180 22,180

2015

Financial Asset Short-term investments: - unit trust funds in Malaysia 24,436 - - - - - 24,436 24,436

Financial Liabilities Hire purchase payables - - - - 3,154 - 3,154 2,503 Term loans - - - - 21,487 - 21,487 21,487

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 131 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.4 FAIR VALUE INFORMATION (CONT’D)

Fair Value Of Financial Instruments Carried Fair Value Of Financial Instruments Not Total At Fair Value Carried At Fair Value Fair Carrying Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Value Amount The Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2016

Financial Asset Short-term investments: - unit trust funds in Malaysia 371 - - - - - 371 371

2015

Financial Asset Short-term investments: - unit trust funds in Malaysia 573 - - - - - 573 573

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 132 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

43. FINANCIAL INSTRUMENTS (CONT’D)

43.4 FAIR VALUE INFORMATION (CONT’D)

(a) The fair values above are for disclosure purposes and have been determined using the following basis:-

(i) The fair values of quoted investments are measured at their quoted closing bid prices at the end of the reporting period.

(ii) The fair values of hire purchase payables and term loans are determined by discounting the relevant cash flows using interest rates for similar instruments at the end of the reporting period. The interest rates used to discount the estimated cash flows are as follows:-

The Group 2016 2015 % %

Hire purchase payables 4.73 - 6.54 4.69 - 6.39 Term loans 4.20 - 5.10 4.20 - 5.10

(b) In regard to financial instruments carried at fair value, there were no transfer between level 1 and level 2 during the financial year.

44. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 18 August 2015, the Company further acquired 200,000 ordinary shares of RM1 each in Signature Interiors Sdn. Bhd. (“SISB”) representing a 20% equity interest in SISB for a total cash consideration of RM300,000, resulting in an increase in the Group’s equity interest held in SISB from 80% to 100%.

(b) On 22 March 2016, the Company’s 60% owned subsidiary, Signature Aluminium Sdn. Bhd. (“SASB”) acquired 2 ordinary shares of RM1 each in Flamingo Power Sdn. Bhd. (“FPSB”), representing a 100% equity interest in FPSB for a total cash consideration of RM2. Upon completion of the acquisition, FPSB became an indirect subsidiary of the Group.

(c) On 27 April 2016, the Company’s 60% owned subsidiary, SASB acquired 1 ordinary share of RM1 each in Signature Design & Technology Sdn. Bhd. (“SDTSB”) representing a 50% equity interest in SDTSB for a total cash consideration of RM1.

On 6 June 2016, SASB further subscribed for 79 ordinary shares of RM1 each in SDTSB for a total cash consideration of RM79, resulting in an increase in SASB’s equity interest in SDTSB from 50% to 80%. Upon completion of the acquisition, SDTSB became an indirect subsidiary of the Group.

(d) Corporate Exercise

During the financial year, the Company completed the following corporate proposals:-

(i) Proposed share split involving the subdivision of every 1 existing ordinary share of RM0.50 each into 2 ordinary shares of RM0.25 each.

The Share Split has been finalised following the listing of and quotation for 240,000,000 Subdivided Shares on the Main Market of Bursa Securities with effect from 9.00 a.m. on Thursday, 21 April 2016.

(ii) Proposed bonus issue of up to 60,000,000 warrants (“Warrant(s)”) on the basis of one (1) Warrant for every four (4) existing Subdivided Shares.

The Bonus Issue of Warrants has been completed following the listing of and quotation for 59,135,342 Warrants on the Main Market of Bursa Securities with effect from 9.00 a.m. on Thursday, 28 April 2016.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 133 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

44. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (CONT’D)

(d) Corporate Exercise (Cont’d)

(iii) Proposed establishment of an Employees’ Share Option Scheme (“ESOS”) of up to 10% of the issued and paid-up share capital of the Company (excluding treasury shares of the Company) at any point in time to be granted to the eligible directors and employees of the Company and its subsidiaries which are not dormant.

The effective date for the implementation of the ESOS has been fixed on 3 May 2016, being the date of full compliance of the ESOS.

The descriptions of the options under the ESOS are as follows:-

Date of offer of the ESOS Options 3 May 2016 Exercise price of the ESOS Options offered RM1 Number of ESOS Options offered 23,355,000 Vesting period of the ESOS Options offered 3 May 2016 to 2 May 2021

(e) On 13 May 2016, Fabriano Sdn. Bhd. (“FSB”), a wholly-owned subsidiary of the Group, incorporated a new wholly- owned subsidiary in the United Kingdom under the Companies Act 2006, known as Signature Kitchen (UK) Pte. Ltd. (“Signature UK”).

(f) During the financial year, Signature Cabinet Sdn Bhd (“SCSB”), a wholly-owned subsidiary of the Company received a notice of compulsory land acquisition from The Selangor State Government in relation to a piece of land measuring approximately 13,506 square metres held under H.S. (D) 241038, PT 9927, Pekan Baru Sungai Buloh, District of Petaling (“the Subject Land”) for the purpose of construction of a highway known as the Damansara- Shah Alam Elevated Expressway (“DASH”).

SCSB had submitted a claim for compensation in accordance with the Land Acquisition Act, 1960. The Selangor State Government served the Notification of Award as encapsulated in the Form H and SCSB has accepted the offer.

SCSB occupied 2 lots of land contiguous to each other held under (i) H.S. (D) 241037, PT 9926 with postal address of Lot 24, Jalan Teknologi, Taman Sains Selangor 1, Kota Damansara PJU 5, 47810 Petaling Jaya, Selangor (hereinafter referred to as “Lot 24”); and (ii) H.S.(D) 241038, PT 9927 bearing postal address of Lot 2, Jalan Teknologi 3/7, Taman Sains Selangor 1, Kota Damansara PJU 5, 47810 Petaling Jaya, Selangor (hereinafter referred to as “Lot 2” which is the Subject Land).

The main operations are located at Lot 24 which houses the head office of the Group, its kitchen cabinet production plant and its flagship showroom whilst Lot 2, the Subject Land, is the adjoining lot with warehouse facilities and caters for the glass and aluminium fabrication works.

In view that the compulsory land acquisition is principally only on Lot 2, the main operations on Lot 24 remains unaffected. The commencement of the DASH construction works is estimated to take place in the last quarter of 2016.

45. COMPARATIVE FIGURES

The following figures have been reclassified to conform with the presentation of the current financial year:-

The Group The Company As Previously As Previously As Restated Reported As Restated Reported RM’000 RM’000 RM’000 RM’000

Statement of Cash flows (Extract):- Net cash (for)/from investing activities (13,431) (12,134) 10,788 10,861 Net cash for financing activities (2,532) (2,693) N/A N/A

SIGNATURE INTERNATIONAL BERHAD (754118-K) 134 ANNUAL REPORT 2016 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2016

46. SUPPLEMENTARY INFORMATION - DISCLOSURE OF REALISED AND UNREALISED PROFITS

The breakdown of the retained profits of the Group and of the Company at the end of the reporting period into realised and unrealised profits/(losses) are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, is as follows:-

The Group The Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000

Total retained profits - realised 118,553 100,617 6,570 7,395 - unrealised 1,278 756 - - 119,831 101,373 6,570 7,395 Consolidation adjustment 9,631 10,801 - - At 30 June 129,462 112,174 6,570 7,395

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 135 List of Properties

Carrying Approximately Total Area value @ 30 Description of age of buildings (Square June 2016 Year of Location use Tenure at 30 June 2016 feet) (RM’000) Acquisition

PROPERTY, PLANT AND EQUIPMENT

Lot 24, Jalan Teknologi, Head Office and Leasehold 10 years 98,043 8,736 2007 Taman Sains Selangor 1, Kota Factory Building 99 years. Damansara, 47810 Petaling Expires 2106 Jaya, Selangor, Malaysia

No. 23 Jalan Haji Abdul 1 ½ Storey Freehold < 1 year 10,694 1,700 2016 Manan 3/KU8, Kawasan Semi-Detached Perindustrian Meru Barat, Factory Building 41050 Klang Selangor.

Lot 24, Jalan Teknologi, Head Office and Leasehold n/a 174,240 14,951 2011 Taman Sains Selangor 1, Kota Factory Land 99 years. Damansara, 47810 Petaling Expires 2106 Jaya, Selangor, Malaysia

No. 23 Jalan Haji Abdul 1 ½ Storey Freehold n/a 20,280 2,088 2016 Manan 3/KU8, Kawasan Semi-Detached Perindustrian Meru Barat, Factory Land 41050 Klang Selangor.

INVESTMENT PROPERTIES

C-18-6 East Lake Residence, Service Leasehold 9 years 2,000 780 2008 Pekan Serdang, Daerah Apartment 99 years. Petaling, Selangor. Expired 2100

B3A-5, Block 3A, Jalan Shop Office Leasehold 6 years 6,157 3,100 2010 Teknologi 2/1B, Kota D’sara 99 years. Signature Park, Kota Expired 2104 Damansara, 47810 Petaling Jaya, Selangor. (Lot 20)

B3A-7, Block 3A, Jalan Shop Office Leasehold 6 years 6,157 3,100 2010 Teknologi 2/1B, Kota D’sara 99 years. Signature Park, Kota Expired 2104 Damansara, 47810 Petaling Jaya, Selangor.(Lot 19)

B3A-9, Block 3A, Jalan Shop Office Leasehold 6 years 9,042 5,065 2010 Teknologi 2/1B, Kota D’sara 99 years. Signature Park, Kota Damansara, 47810 Petaling Jaya, Selangor. (Lot 18)

No. B-22-2, Setia Sky High rise Leasehold 7 years 936 985 2009 Residences, 76, Jalan Raja Residences 99 years. Muda Abdul Aziz, 50300 Kuala Expired 2104 Lumpur

SIGNATURE INTERNATIONAL BERHAD (754118-K) 136 ANNUAL REPORT 2016 LIST OF PROPERTIES (CONT’D)

Carrying Approximately Total Area value @ 30 Description of age of buildings (Square June 2016 Year of Location use Tenure at 30 June 2016 feet) (RM’000) Acquisition

No. C-28-6E, Kiara 9 Condominium Freehold 6 years 2,694 2,000 2010 Residency, Jalan Kiara 3, Mont (type Duplex) Kiara, 50480 Kuala Lumpur

N-16-3A, Level 16, Persiaran Condominium Freehold 5 years 1,389 1,300 2011 Capsquare, 50100 Kuala Lumpur

Unit D-15-03A , Type E2,Level Service Freehold 3 years 3,136 2,500 2013 6, Tower D, Aragreen Apartment Residences

2-1, Jalan Putra Perdana 3A, 1 Storey Freehold 3 years 3,498 1,250 2013 Glades, Putra Heights, 47650 Cluster Home Subang Jaya, Selangor

2-2, Jalan Putra Perdana 3A, 21/2 Storey Freehold 3 years 3,208 1,000 2013 Glades, Putra Heights, 47650 Cluster Home Subang Jaya, Selangor

B-12-1, 1, Level 12, Quadro High rise Freehold 3 years 1,927 2,300 2013 Residence, 1 Persiaran KLCC, Residences 50450 Kuala Lumpur

Parcel No. A-3-3A, Vortex Service Freehold 2 year 744 800 2014 Suites & Residences, Kuala Apartment Lumpur City Centre

Unit 23, Eve Suites Retail Retail Shop Freehold 2 year 5,036 3,270 2014 Shop, Jalan PJU 1A/41, Ara Damansara, Mukim Damansara, Selangor

Unit C-20-1, Green Residence, Condominium Freehold 2 year 1,557 501 2014 Lot 1098, Jalan Rasa Sayang, Cheras, Selangor

Unit C-37-2, Cybersquare, SOHO Freehold 2 year 775 390 2014 Lot 207771, Mukim Dengkil, Daerah Sepang, Selangor

Lot 17, Jalan Utara, Seksyen Detached Leasehold 3 years 8,680 3,707 2014 11, 46200 Selangor House 99 years Expired 2069

Lot 19, Jalan Utara, Seksyen Detached Leasehold 3 years 8,680 3,570 2014 11, 46200 Selangor House 99 years. Expired 2068

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 137 Analysis of shareholdings as at 7 october 2016

Authorised share capital : RM100,000,000 Issued and paid-up share capital : RM60,076,237.50 comprising 240,304,950 ordinary shares of RM0.25 each Class of shares : Ordinary shares of RM0.25 each Voting rights by show of hand : One vote for every member Voting rights by poll : One vote for every share held

ANALYSIS BY SIZE SHAREHOLDINGS

No. of Size of Holdings Shareholders % No. of Shares %

Less than 100 29 0.83 458 0.00 100 to 1,000 230 6.55 156,992 0.07 1,001 to 10,000 2,008 57.22 11,562,076 4.91 10,001 to 100,000 1,124 32.03 33,797,494 14.34 100,001 to less than 5% of issued shares 116 3.31 70,960,822 30.11 5% and above of issued shares 2 0.06 119,168,508 50.57 TOTAL 3,509 100.00 235,646,350* 100.00

* Excluding a total of 4,658,600 shares bought back by the Company and retained as treasury shares as per the Record of Depositors as at 7 October 2016.

DIRECTORS’ SHAREHOLDINGS as per Register of Directors’ Shareholdings as at 7 October 2016

Direct Interest Indirect Interest Name No. of Shares %^ No. of Shares %^

DATO' DR. MOHD SHAFEI BIN ABDULLAH 1,326* 0.00 - - TAN KEE CHOONG 59,756,008 25.36 - - DATO’ CHOOI YOEY SUN 59,412,500 25.21 - - WONG MAW CHUAN - - - - YAP KHONG - - - -

Notes: * Held through nominee companies. ^ Excluding a total of 4,658,600 shares bought back by the Company and retained as treasury shares.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 138 ANNUAL REPORT 2016 Analysis of shareholdings (CONT’D) as at 7 october 2016

SUBSTANTIAL SHAREHOLDERS as per Register of Substantial Shareholders as at 7 October 2016

Direct Interest Deemed Interest Name of Substantial Shareholders No. of Shares %^ No. of Shares %^

TAN KEE CHOONG 59,756,008 25.36 - - DATO’ CHOOI YOEY SUN 59,412,500 25.21 - - VALUE PARTNERS HONG KONG LIMITED 13,336,400 5.66 - - VALUE PARTNERS GROUP LIMITED - - 13,336,4001 5.66 CHEAH CAPITAL MANAGEMENT LIMITED - - 13,336,4002 5.66 CHEAH COMPANY LIMITED - - 13,336,4003 5.66

Notes: 1 Deemed interested as holding company of Value Partners Hong Kong Limited which is the holding company of Value Partners Ltd. 2 Deemed interested as shareholder in Value Partners Group Limited, who has an interest in shares in the Company by virtue of it being the holding company of Value Partners Hong Kong Limited, which is the holding company of Value Partners Ltd. 3 Deemed interested as holding company of Cheah Capital Management Limited, a shareholder in Value Partners Group Limited, who has an interest in shares in the Company by virtue of it being the holding company of Value Partners Hong Kong Limited which is the holding company of Value Partners Ltd. ^ Excluding a total of 4,658,600 shares bought back by the Company and retained as treasury shares.

SHARES IN RELATED CORPORATION

There is no change in the deemed interest of Directors in related corporation as disclosed in the Directors’ Report for the financial year ended 30 June 2016 on pages 61 and 62 of this Annual Report.

LIST OF THIRTY LARGEST SHAREHOLDERS as at 7 October 2016

No. Name No. of Shares %^

1. TAN KEE CHOONG 59,756,008 25.36 2. DATO’ CHOOI YOEY SUN 59,412,500 25.21 3. HSBC NOMINEES (ASING) SDN BHD 7,525,600 3.19 EXEMPT AN FOR THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED (HBAP-SGDIV-ACCL) 4. HSBC NOMINEES (ASING) SDN BHD 6,888,500 2.92 HSBC-FS FOR VALUE PARTNERS HIGH - DIVIDEND STOCKS FUND

5. HSBC NOMINEES (TEMPATAN) SDN BHD 4,559,700 1.93 HSBC (M) TRUSTEE BHD FOR MANULIFE INVESTMENT PROGRESS FUND (4082)

6. HSBC NOMINEES (TEMPATAN) SDN BHD 4,332,000 1.84 HSBC (M) TRUSTEE BHD FOR RHB SMART TREASURE FUND

7. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 4,000,000 1.70 EMPLOYEES PROVIDENT FUND BOARD (RHB INV)

8. HSBC NOMINEES (TEMPATAN) SDN BHD 3,480,000 1.48 HSBC (M) TRUSTEE BHD FOR RHB EQUITY TRUST

9. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 3,000,000 1.27 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) (RHB INV)

10. HSBC NOMINEES (TEMPATAN) SDN BHD 2,740,000 1.16 HSBC (M) TRUSTEE BHD FOR RHB PRIVATE FUND - SERIES 3

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 139 Analysis of shareholdings (CONT’D) as at 7 october 2016

LIST OF THIRTY LARGEST SHAREHOLDERS (CONT’D) as at 7 October 2016

No. Name No. of Shares %^

11. FONG TING WONG 2,522,000 1.07 12. HSBC NOMINEES (TEMPATAN) SDN BHD 2,380,000 1.01 HSBC (M) TRUSTEE BHD FOR RHB DANA HAZEEM

13. HSBC NOMINEES (TEMPATAN) SDN BHD 1,896,500 0.80 HSBC (M) TRUSTEE BHD FOR RHB SMALL CAP OPPORTUNITY UNIT TRUST

14. AMANAHRAYA TRUSTEES BERHAD 1,161,600 0.49 BSN DANA DIVIDEN AL-IFRAH

15. LEE MENG TICK 1,120,000 0.48 16. LEONG KIN SAN 1,055,000 0.45 17. AMANAHRAYA TRUSTEES BERHAD 1,025,400 0.44 BSN DANA AL-JADID

18. HSBC NOMINEES (ASING) SDN BHD 936,000 0.40 HSBC-FS FOR RHB ASEAN MEGATREND MASTER FUND

19. HSBC NOMINEES (TEMPATAN) SDN BHD 885,100 0.38 HSBC (M) TRUSTEE BHD FOR RHB SMART INCOME FUND

20. MAYBANK NOMINEES (TEMPATAN) SDN BHD 800,000 0.34 MAYBANK TRUSTEES BERHAD FOR RHB DYNAMIC FUND (200188)

21. NG KIM KEONG 743,400 0.32 22. AMANAHRAYA TRUSTEES BERHAD 600,000 0.25 AMANAH SAHAM BANK SIMPANAN NASIONAL

23. YAP BOOI LEK 555,000 0.24 24. CITIGROUP NOMINEES (TEMPATAN) SDN BHD 475,000 0.20 PLEDGED SECURITIES ACCOUNT FOR CHONG CHOI MEI (474415)

25. DB (MALAYSIA) NOMINEE (ASING) SDN BHD 426,700 0.18 BNYM SA/NV FOR THE ASIA PACIFIC FUND, INC.

26. BOON KIT LEONG 400,000 0.17 27. CIMSEC NOMINEES (TEMPATAN) SDN BHD 400,000 0.17 CIMB BANK FOR AZIZAN BIN ABD RAHMAN (MY0531)

28. CHAI HOOI TEING 373,000 0.16 29. ADVIABLE VENTURES SDN BHD 350,000 0.15 30. HSBC NOMINEES (TEMPATAN) SDN BHD 338,600 0.14 HSBC (M) TRUSTEE BHD FOR MANULIFE INVESTMENT REGULAR SAVINGSFUND (4710)

^ Excluding a total of 4,658,600 shares bought back by the Company and retained as treasury shares.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 140 ANNUAL REPORT 2016 ANALYSIS OF WARRANT HOLDINGS as at 7 october 2016

Total Number of Outstanding Warrants ‘A’ : 59,130,392 Issue Date : 22 April 2016 Expiry Date : 21 April 2021 Exercise Price of Warrants ‘A’ : RM0.97

ANALYSIS OF WARRANT HOLDINGS Distribution of warrant holdings according to size:

No. of % of Warrant Warrant No. of % of Holders/ Holders/ Warrants Issued Size of Warrant Holdings Depositors Depositors Held Warrants

1 - 99 103 5.58 4,042 0.01 100 - 1,000 441 23.89 309,570 0.52 1,001 - 10,000 901 48.81 3,824,150 6.47 10,001 - 100,000 351 19.01 11,155,353 18.87 100,001 to less than 5% of Issued Warrants 48 2.60 14,045,150 23.75 5% and above of Issued Warrants 2 0.11 29,792,127 50.38 Total 1,846 100.00 59,130,392 100.00

DIRECTORS’ WARRANT HOLDINGS as per Register of Directors’ Warrants Holdings as at 7 October 2016

Direct Interest Indirect Interest Name No. of Warrants % No. of Warrants %

DATO' DR. MOHD SHAFEI BIN ABDULLAH 331* 0.00 - - TAN KEE CHOONG 14,939,002 25.26 - - DATO’ CHOOI YOEY SUN 14,853,125 25.12 - - WONG MAW CHUAN - - - - YAP KHONG - - - -

Note: * Held through nominee companies.

THIRTY LARGEST WARRANT HOLDERS as at 7 October 2016

No. Name No. of Warrants %

1. TAN KEE CHOONG 14,939,002 25.26 2. DATO’ CHOOI YOEY SUN 14,853,125 25.12 3. HSBC NOMINEES (ASING) SDN BHD 1,881,400 3.18 EXEMPT AN FOR THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED (HBAP-SGDIV-ACCL) 4. HSBC NOMINEES (TEMPATAN) SDN BHD 1,092,900 1.85 HSBC (M) TRUSTEE BHD FOR MANULIFE INVESTMENT PROGRESS FUND (4082)

5. MAYBANK NOMINEES (TEMPATAN) SDN BHD 1,000,000 1.69 PLEDGED SECURITIES ACCOUNT FOR TAN SUN PING

6. HSBC NOMINEES (TEMPATAN) SDN BHD 870,000 1.47 HSBC (M) TRUSTEE BHD FOR RHB EQUITY TRUST

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 141 Analysis of WARRANT holdings (CONT’D) as at 7 october 2016

THIRTY LARGEST WARRANT HOLDERS (CONT’D) as at 7 October 2016

No. Name No. of Warrants %

7. HSBC NOMINEES (TEMPATAN) SDN BHD 685,000 1.16 HSBC (M) TRUSTEE BHD FOR RHB PRIVATE FUND - SERIES 3

8. FONG TING WONG 605,500 1.02 9. TENH HONG WAY 510,000 0.86 10. MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD 460,000 0.78 PLEDGED SECURITIES ACCOUNT FOR YONG WAI LIH (MARGIN)

11. BOON KIT LEONG 400,000 0.68 12. TER LEONG SWEE 361,000 0.61 13. HSBC NOMINEES (TEMPATAN) SDN BHD 351,100 0.59 HSBC (M) TRUSTEE BHD FOR RHB DANA HAZEEM

14. AMSEC NOMINEES (TEMPATAN) SDN BHD 300,000 0.51 WONG PAK KONG

15. LEE CHEE KEONG 300,000 0.51 16. MAYBANK NOMINEES (TEMPATAN) SDN BHD 264,700 0.45 KUAN KEAN KEE

17. LEE BOON HAU 230,000 0.39 18. MAYBANK NOMINEES (TEMPATAN) SDN BHD 220,000 0.37 PLEDGED SECURITIES ACCOUNT FOR TAN CHIN HOOI

19. YONG CHEW FATT 215,400 0.36 20. HUI SAI KONG 210,000 0.36 21. KHAW KEAN TECK 200,000 0.34 22. NG THONG PIN 190,000 0.32 23. LAI TECK SIAN 184,900 0.31 24. NG GEOK CHOO 170,000 0.29 25. KEH CHIN ZIUNG 162,500 0.27 26. PUBLIC NOMINEES (TEMPATAN) SDN BHD 153,900 0.26 PLEDGED SECURITIES ACCOUNT FOR YANG CHUN SENG (E-KLG/SJM)

27. CIMSEC NOMINEES (TEMPATAN) SDN BHD 153,100 0.26 CIMB BANK FOR LEN BOOK LEARN (M66002)

28. LIM LEE PENG 150,000 0.25 29. TAN HAI CHUN 150,000 0.25 30. TING TIEW HUNG 150,000 0.25

SIGNATURE INTERNATIONAL BERHAD (754118-K) 142 ANNUAL REPORT 2016 notice of annual general meeting

NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of the Company will be held at Greens 3, Sports Wing, Jalan Kelab Tropicana, Off Jalan Tropicana Utama, Persiaran Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 22 November 2016 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 2016 together with Please refer to the Reports of the Directors and Auditors thereon. the Explanatory Note

2 To approve the payment of Directors’ fees of RM186,000.00 for the financial year ended 30 June Ordinary 2016. Resolution 1

3 To approve the declaration of the final single tier dividend of 2 sen per ordinary share in respect of Ordinary the financial year ended 30 June 2016. Resolution 2

4 To re-elect Mr Wong Maw Chuan who is retiring in accordance with Article 129 of the Company’s Ordinary Articles of Association. Resolution 3

5 To re-elect Dato’ Dr. Mohd Shafei Bin Abdullah who is retiring in accordance with Article 129 of the Ordinary Company’s Articles of Association. Resolution 4

6 To consider and, if thought fit, to pass the following resolution pursuant to Section 129(6) of the Ordinary Companies Act, 1965: Resolution 5

“That pursuant to Section 129(6) of the Companies Act, 1965, Mr Yap Khong be re-appointed as Director to hold office until the conclusion of the next Annual General Meeting of the Company.”

7 To re-appoint Messrs Crowe Horwath as Auditors of the Company and to authorise the Directors to Ordinary fix their remuneration. Resolution 6

AS SPECIAL BUSINESS:

To consider and if thought fit, pass the following resolutions:-

8 Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965 Ordinary Resolution 7 “THAT pursuant to Section 132D of the Companies Act, 1965, the Articles of Association of the Company and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to allot and issue shares in the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued does not exceed ten percent (10%) of the issued share capital of the Company for the time being AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad (“Bursa Securities”) AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

9 Authority for Mr Yap Khong to continue in office as Independent Non-Executive Director Ordinary Resolution 8 “THAT authority be and is hereby given to Mr Yap Khong who has served as an Independent Non- Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with the Malaysian Code on Corporate Governance 2012.”

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 143 Notice of annual general meeting (CONT’D)

10 Authority for Mr Wong Maw Chuan to continue in office as Independent Non-Executive Director Ordinary Resolution 9 “THAT authority be and is hereby given to Mr Wong Maw Chuan who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with the Malaysian Code on Corporate Governance 2012.”

11 Proposed Renewal of Authority for the Company to Purchase Its Own Shares Ordinary Resolution 10 “THAT, subject to the provisions of Section 67A of the Companies Act, 1965, the Memorandum and Articles of Association of the Company, Part IIIA of the Companies Regulations 1966 and Chapter 12 of the Main Market Listing Requirements of Bursa Securities, the Company be and is hereby authorised to purchase such number of ordinary shares of RM0.25 each in the Company (“Proposed Share Buy-Back Authority”) as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that:

(i) the maximum aggregate number of ordinary shares purchased and/or held by the Company as treasury shares shall not exceed ten percent (10%) of the issued and paid-up ordinary share capital of the Company at any point in time;

(ii) the funds allocated by the Company for the purpose of purchasing its shares shall not exceed the total retained profits and/or share premium account of the Company. The audited retained profits and share premium account of the Company stood at RM6,570,000 and RM1,189,000 respectively as at 30 June 2016.

(iii) the authority conferred by this resolution shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the forthcoming AGM, at which time the said authority will lapse, unless the authority is renewed at that meeting, either unconditionally or subject to conditions; or

(b) 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 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or

(c) revoked or varied by ordinary resolution passed by the shareholders in a general meeting,

whichever occurs first.

THAT the Directors of the Company be and are hereby authorised to deal with the shares purchased at their absolute discretion, either partially or fully, in the following manner:

(i) cancel all the shares so purchased;

(ii) retain the shares so purchased as treasury shares;

(iii) distribute the treasury shares as share dividends to shareholders;

(iv) resell the treasury shares on Bursa Securities in accordance to the Main Market Listing Requirements of Bursa Securities; and

(v) any combination of (i), (ii), (iii) and (iv) above.

AND THAT the Directors of the Company be and are hereby authorised to give effect to the Proposed Share Buy-Back Authority with full power to assent to any modifications and/or amendments as may be required by the relevant authorities.”

SIGNATURE INTERNATIONAL BERHAD (754118-K) 144 ANNUAL REPORT 2016 Notice of annual general meeting (CONT’D)

12 Proposed Amendments to the Articles of Association of the Company Special Resolution “THAT the proposed amendments to the Articles of Association of the Company as set out in Appendix A of the Notice of Annual General Meeting be and is hereby approved AND THAT the Directors of the Company be and are hereby authorised to do all things and acts necessary to effect the amendments to the Articles of Association of the Company.”

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

NOTICE OF DIVIDEND ENTITLEMENT

NOTICE IS ALSO HEREBY GIVEN that the final single tier dividend of 2 sen per ordinary share for the financial year ended 30 June 2016, if approved at the Tenth Annual General Meeting, will be paid on Monday, 9 January 2017 to Depositors whose names appear in the Record of Depositors on Friday, 16 December 2016.

A Depositor shall qualify for entitlement to the dividend only in respect of:

(a) Shares transferred to the Depositor’s Securities Account before 4.00 p.m. on Friday, 16 December 2016 in respect of ordinary transfers; and

(b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

By Order of the Board TAN AI NING (MAICSA 7015852) TE HOCK WEE (MAICSA 7054787) Secretaries

Selangor Darul Ehsan Date: 24 October 2016

Notes: (i) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy/proxies to attend and vote in his/her stead. A proxy may but need not be a member of the Company, an advocate, an approved Company auditor, or a person approved by the Registrar. There shall be no restriction as to the qualification of the proxy.

(ii) A member may appoint up to two (2) proxies to attend the same meeting. Where a member appoints two (2) proxies, the appointments shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy.

(iii) Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there shall be no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds.

(iv) The instrument appointing a proxy by a member who is entitled to attend and vote at the Annual General Meeting, shall be in writing, executed by or on behalf of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or the hand of its officer or its duly authorised attorney.

(v) The instrument appointing a proxy or the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Registered Office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan at least twenty-four (24) hours before the time appointed for the taking of the poll.

(vi) In respect of deposited securities, only members whose names appear on the Record of Depositors on 15 November 2016 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/ or vote on his behalf.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 145 Notice of annual general meeting (CONT’D)

Explanatory Note on Special Business

To receive the Audited Financial Statements

Agenda item no. 1 is meant for discussion only as the provision of Section 169(1) of the Act does not require a formal approval of shareholders for the Audited Financial Statements. Hence, this item on the Agenda is not put forward for voting.

Ordinary Resolution 7 Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965

The proposed Ordinary Resolution 7, if passed, will empower the Directors to issue shares up to an aggregate amount not exceeding 10% of the issued and paid-up share capital of the Company for the time being, for such purposes as the Directors consider would be in the best interest of the Company without having to convene separate general meetings. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting.

This is a renewal of the mandate obtained from its shareholders at the last Annual General Meeting held on 7 December 2015 and will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placement of shares for purpose of funding future investment, working capital and/or acquisitions.

The Company had not issued any new shares pursuant to Section 132D of the Companies Act, 1965 under the general mandate which was approved at the Ninth Annual General Meeting of the Company.

Ordinary Resolution 8 on the Authority for Mr Yap Khong to continue in office as Independent Non-Executive Director

The Board of Directors had on 26 September 2016 via the Nomination Committee conducted an annual performance evaluation and assessment of Mr Yap Khong who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years and recommended him to continue to act as Independent Non-Executive Director of the Company based on the following justifications:- a. He fullfilled the criteria under the definition on Independent Directors as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. b. His experience enables him to provide the Board with a diverse set of experience, expertise, skills and competence. He has been with the Company for more than nine (9) years and therefore understands the Company’s business operations which enable him to participate actively and contribute during deliberations and discussions at Audit Committee, Remuneration Committee, Nomination Committee and Board meetings without compromising his independent and objective judgement. c. He execised due care during his tenure as an Independent Non-Executive Director of the Company and carried out his professional duties in the interest of the Company and shareholders.

Ordinary Resolution 9 on the Authority for Mr Wong Maw Chuan to continue in office as Independent Non-Executive Director

The Board of Directors had on 26 September 2016 via the Nomination Committee conducted an annual performance evaluation and assessment of Mr Wong Maw Chuan who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years and recommended him to continue to act as Independent Non-Executive Director of the Company based on the following justifications:- a. He fullfilled the criteria under the definition on Independent Directors as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. b. His experience in the audit and accounting industries enables him to provide the Board with a diverse set of experience, expertise, skills and competence. He has been with the Company for more than nine (9) years and therefore understands the Company’s business operations which enable him to participate actively and contribute during deliberations and discussions at Audit Committee, Remuneration Committee, Nomination Committee and Board meetings without compromising his independent and objective judgement. c. He establish high commitment and devoted sufficient time to his responsibilities as an Independent Non-Executive Director of the Company.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 146 ANNUAL REPORT 2016 Notice of annual general meeting (CONT’D)

Ordinary Resolution 10 Proposed Renewal of Authority for the Company to Purchase Its Own Shares

The proposed Ordinary Resolution 10, if passed, will empower the Directors to purchase the Company’s shares of up to 10% of the issued and paid-up share capital of the Company at any point in time, by utilising the funds allocated which shall not exceed the total retained profits and share premium of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting.

Please refer to the Statement to Shareholders dated 24 October 2016 accompanying the Annual Report of the Company for the financial year ended 30 June 2016 for further information.

Special Resolution on Proposed Amendments to the Articles of Association of the Company

The Special Resolution, if passed, will allow the Chairman the prerogative to promote orderly conduct of general meetings and render the Articles of Association of the Company to be in line with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

Personal data privacy: By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 147 appendix a

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

The Articles of Association of the Company are proposed to be amended in the following manner:-

Article No. Existing Articles Amended Articles To add Article (New provision) Without prejudice to any other power which the 90A Chairman may have under the provisions of these Articles or at common law and subject to the Act and the Listing Requirements, the Chairman may take such action as he thinks fit to promote the orderly conduct of the business of all general meetings as specified in the notice of such meetings and the Chairman’s decision on matters of procedure or arising incidentally from the business of such meetings shall be final, as shall be his determination as to whether any matter is of such a nature.

To amend A resolution put to vote at a meeting shall be Subject to the Listing Requirements, any resolution Article 91 decided by a show of hands unless before, or on the set out in the notice of any general meeting, or in declaration of the result of the show of hands, a poll any notice of resolution which may properly be is duly demanded. Subject to the Act, a poll may be moved and is intended to be moved at any general demanded: meeting shall be voted by poll. Subject to the Act, a poll may be demanded: (1) by the Chairman; or (1) by the Chairman; or (2) by at least five (5) Members having the right to vote at the meeting in person or by proxy; or (2) by at least five (5) Members having the right to vote at the meeting in person or by proxy; or (3) by a Member or Members representing at least one-tenth (1/10) of the total voting rights (3) by a Member or Members representing at of all the Members having the right to vote at least one-tenth (1/10) of the total voting rights the meeting; or of all the Members having the right to vote at the meeting; or (4) by a Member or Members holding shares conferring a right to vote at the meeting being (4) by a Member or Members holding shares shares on which an aggregate sum has been conferring a right to vote at the meeting being paid up equal to at least one-tenth (1/10) of shares on which an aggregate sum has been the total sum paid on all the shares conferring paid up equal to at least one-tenth (1/10) of that right, and a demand by a person as the total sum paid on all the shares conferring proxy for or attorney of a Member (whether that right, and a demand by a person as individual, corporate or otherwise) or as duly proxy for or attorney of a Member (whether authorised representative for a corporate individual, corporate or otherwise) or as duly Member shall be the same as a demand by authorised representative for a corporate the Member. Member shall be the same as a demand by the Member. Unless a poll is so demanded a declaration by the Chairman that a resolution has on a show of Unless a poll is so demanded a declaration by hands been carried or carried unanimously, or by the Chairman that a resolution has on a show of a particular majority, or lost, and an entry to that hands been carried or carried unanimously, or by effect in the book containing the minutes of the a particular majority, or lost, and an entry to that proceedings of the Company shall be conclusive effect in the book containing the minutes of the evidence of the fact without proof of the number proceedings of the Company shall be conclusive or proportion of the votes recorded in favour of or evidence of the fact without proof of the number against the resolution. or proportion of the votes recorded in favour of or against the resolution.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 148 ANNUAL REPORT 2016 appendix a (CONT’D)

Article No. Existing Articles Amended Articles To amend A poll shall be taken as the Chairman directs A poll shall be taken in such manner as the Article 93 (including (without limitation) the use of ballot Chairman directs and at least one (1) scrutineer or voting papers or tickets) and he may appoint must be appointed to validate the votes cast at the scrutineers (who need not be Members) and fix a general meeting. The appointed scrutineer must time and place for declaring the result of the poll. not be an officer of the Company or its related The result of the poll shall be deemed to be the corporation, and must be independent of the person resolution of the meeting at which the poll was undertaking the polling process. The Chairman demanded. may fix a time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

The poll may be conducted manually using voting slips or electronically using various forms of electronic devices. Such votes shall be counted by the poll administrator, and verified by the scrutineer, as may be appointed by the Chairman for the purpose of determining the outcome of the resolution(s) to be decided on poll.

To amend Subject to Article 78, every Member shall be entitled Subject to Article 78, every Member shall be entitled Article 98 to be present and to vote at any general meeting in to be present and to vote at any general meeting in respect of any share or shares upon which all calls respect of any share or shares upon which all calls due to the Company have been paid. Subject to any due to the Company have been paid. Subject to rights or restrictions attached to any shares, every Article 91 and any rights or restrictions attached to Member who: any Shares, every Member who:

(1) being an individual, is present in person or by (1) being an individual, is present in person or by proxy or attorney; or proxy or attorney; or (2) being a corporation, is present by a duly (2) being a corporation, is present by a duly authorised representative or by proxy or authorised representative or by proxy or attorney, attorney,

and on a show of hands every Member (a holder and on a show of hands every Member (a holder of ordinary shares or preference shares who is of ordinary shares or preference shares who is personally present and entitled to vote) shall have personally present and entitled to vote) shall have one (1) vote and on a poll every Member shall have one (1) vote and on a poll every Member shall have one (1) vote for every share of which he is the holder. one (1) vote for every share of which he is the holder. On a poll votes may be given either personally On a poll votes may be given either personally or by proxy or by attorney or by a duly authorised or by proxy or by attorney or by a duly authorised representative of a corporate Member. A proxy representative of a corporate Member. Subject to shall be entitled to vote on a show of hands on any Article 91, a proxy shall be entitled to vote on a show question at any general meeting. of hands on any question at any general meeting.

To amend A Member who is of unsound mind or whose Subject to Article 91, a Member who is of unsound Article 99 person or estate is liable to be dealt with in any mind or whose person or estate is liable to be dealt way under the law relating to mental disorder may with in any way under the law relating to mental vote, whether on a show of hands or on a poll, by disorder may vote, whether on a show of hands or on his committee or by such other person as properly a poll, by his committee or by such other person as has the management of his estate, and any such properly has the management of his estate, and any committee or other person may vote by proxy or such committee or other person may vote by proxy attorney. Evidence to the Directors’ satisfaction of or attorney. Evidence to the Directors’ satisfaction the person claiming to exercise the right to vote of the person claiming to exercise the right to vote shall be deposited at the Office, at least forty-eight shall be deposited at the Office, at least forty-eight (48) hours before the time appointed for holding the (48) hours before the time appointed for holding the meeting or adjourned meeting at which the right to meeting or adjourned meeting at which the right to vote is to be exercised. If this is not done, the right to vote is to be exercised. If this is not done, the right to vote shall not be exercisable. vote shall not be exercisable.

SIGNATURE INTERNATIONAL BERHAD (754118-K) ANNUAL REPORT 2016 149 appendix a (CONT’D)

Article No. Existing Articles Amended Articles To amend No person (except a retiring Director (whether by No person (except a retiring Director (whether by Article 132 rotation or otherwise)) shall be eligible for election rotation or otherwise) shall be eligible for election to to the office of Director at any general meeting the office of Director at any general meeting unless: unless: (1) a Member intending to propose him for (1) a Member intending to propose him for election has, at least eleven (11) clear days election has, at least eleven (11) clear days before the meeting, left at the Office a notice before the meeting, left at the Office a notice in writing duly signed by the nominee, giving in writing duly signed by the nominee, giving his consent to the nomination and signifying his consent to the nomination and signifying his candidature for the office, or the intention his candidature for the office, or the intention of such Member to propose him for election; of such Member to propose him for election; or or (2) in the case of a person recommended by the (2) in the case of a person recommended by the Directors for election, such notice referred to Directors for election, such notice referred to in Article 128(1) may be left at the Office nine in Article 132(1) may be left at the Office nine (9) clear days before the meeting, (9) clear days before the meeting, and notice of each and every candidature for and notice of each and every candidature for election election to the board of Directors shall be served to the board of Directors shall be served on the on the Members at least seven (7) days before the Members at least seven (7) days before the meeting meeting at which the election is to take place. The at which the election is to take place. cost of serving the notice to propose the election of a Director where the nomination is made by a Member or Members, shall be borne by the Member or Members making the nomination.

To amend A copy of the reports by the Directors and auditors of A copy of the reports by the Directors and auditors of Article 180 the Company, the profit and loss accounts, balance the Company, the profit and loss accounts, balance sheets and group accounts (if any) (including all sheets and group accounts (if any) (including documents required by law to be annexed or attached all documents required by law to be annexed or to all or any of them) shall be sent at least twenty-one attached to all or any of them) shall be sent at least (21) days before the general meeting at which they twenty-one (21) days before the general meeting at are to be laid) to all Members, holders of debentures which they are to be laid) to all Members, holders of and all other persons entitled to receive notices of debentures and all other persons entitled to receive general meetings under the Act or these Articles. notices of general meetings under the Act or these The interval between the close of a financial year Articles. of the Company and the issue of the annual audited accounts, the Directors’ and auditors’ reports shall not exceed four (4) Months. The required number of copies of each of these documents shall at the same time be sent to the Exchange.

SIGNATURE INTERNATIONAL BERHAD (754118-K) 150 ANNUAL REPORT 2016 SIGNATURE INTERNATIONAL BERHAD CDS account number of holder (Company No. 754118-K) No. of Ordinary Shares held (Incorporated in Malaysia) FORM OF PROXY

I/We (Full Name in Capital Letters)

NRIC No. or Company No. (New and Old NRIC No.) of (Full Address) being a member(s) of Signature International Berhad hereby appoint (Full Name in Capital Letters)

NRIC No. of (Full Address) or failing him/her, NRIC No. (Full Name in Capital Letters) of (Full Address) or failing him/her, *the Chairman of the Meeting as my/our proxy(ies), to vote for me/us on my/our behalf at the Tenth Annual General Meeting of the Company to be held at Greens 3, Sports Wing, Jalan Kelab Tropicana, Off Jalan Tropicana Utama, Persiaran Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Tuesday, 22 November 2016 at 10.00 a.m. and at any adjournment thereof.

My/our proxy/proxies is/are to vote as indicated below:

No. Resolutions For Against 1. To approve the payment of Directors’ fees of RM186,000.00 for the financial year Ordinary Resolution 1 ended 30 June 2016 2. To approve the declaration of the final single tier dividend of 2 sen per ordinary share Ordinary Resolution 2 in respect of the financial year ended 30 June 2016 3. To re-elect Mr Wong Maw Chuan as Director Ordinary Resolution 3 4. To re-elect Dato’ Dr. Mohd Shafei Bin Abdullah as Director Ordinary Resolution 4 5. To re-appoint Mr Yap Khong as Director Ordinary Resolution 5 6. To re-appoint Messrs. Crowe Horwath as Auditors of the Company and to authorise Ordinary Resolution 6 the Directors to fix their remuneration 7. Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965 Ordinary Resolution 7 8. Authority for Mr Yap Khong to continue in office as Independent Non-Executive Director Ordinary Resolution 8 9. Authority for Mr Wong Maw Chuan to continue in office as Independent Non-Executive Ordinary Resolution 9 Director 10. Proposed Renewal of Authority for the Company to Purchase its Own Shares Ordinary Resolution 10 11. Proposed Amendments to the Articles of Association Special Resolution

(Please indicate with an “X” in the appropriate box against the resolutions on how you wish your proxy to vote. The proxy is to vote on the resolutions set out in the Notice of Meeting as you have indicated. If no specific instruction as to voting is given, this form will be taken to authorise the proxy to vote at his/her discretion.)

Signed this day of , 2016 For appointment of two proxies, the shareholdings to be represented by the proxies are:- Proxies No of Shares % of Shares Signature of Shareholder / Common Seal Proxy 1 Proxy 2 *Strike out whichever not applicable Total 100%

Notes: (i) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy/proxies to attend and vote in his/her stead. A proxy may but need not be a member of the Company, an advocate, an approved Company auditor, or a person approved by the Registrar. There shall be no restriction as to the qualification of the proxy. (ii) A member may appoint up to two (2) proxies to attend the same meeting. Where a member appoints two (2) proxies, the appointments shall be invalid unless the member specifies the proportions of his holdings to be represented by each proxy. (iii) Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there shall be no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. (iv) The instrument appointing a proxy by a member who is entitled to attend and vote at the Annual General Meeting, shall be in writing, executed by or on behalf of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or the hand of its officer or its duly authorised attorney. (v) The instrument appointing a proxy or the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Registered Office of the Company at Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan at least twenty-four (24) hours before the time appointed for the taking of the poll. (vi) In respect of deposited securities, only members whose names appear on the Record of Depositors on 15 November 2016 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

Personal Data Privacy: By submitting an instrument appointing a proxy(ies) and /or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting dated 24 October 2016. 1st fold here

AFFIX STAMP HERE

SIGNATURE INTERNATIONAL BERHAD (754118-K) Level 6.05, Level 6, KPMG Tower 8 First Avenue, Bandar Utama 47800 Petaling Jaya, Selangor Darul Ehsan

2nd fold here SIGNATURE INTERNATIONAL BERHAD (754118-K) Lot 24, Jalan Teknologi, Taman Sains Selangor 1, Kota Damansara, PJU 5, 47810 Petaling Jaya, Selangor, Malaysia. TEL: +603 6286 7000 FAX: +603 6140 2881/+603 6286 7100 www.signatureinternational.com.my www.signaturekitchen.com.my