Hsib - Ar2022

Annual Report
Hup Seng Industries Berhad

(199101015786 (226098-P) 2022
Table of Contents
Annual Report 2022
2 3 4
Corporate Information Corporate Structure Financial Highlights
6 16 21
Directors’ Profile Management Discussion Sustainability Statement
and Analysis
39 47 48
CG Overview Statement Statement of Directors’ Other Compliance Information
Responsibilities in
Relation to Financial Statements
49 51 53
Audit Committee Board Committee Statement on Risk Management and
Internal Control
58 127 129
Financial Statements Top 10 Properties of the Group Statement of Shareholdings
131
Notice of Annual General Meeting Form of Proxy
Corporate Information
Directors Secretaries
Kerk Kar Han Lee Wai Ngan (LS0000184)
(Chairman) Tan Kok Aun (MACS01564)
(apppointed on 1 April 2023)
Kerk Chiew Siong

Auditors
(Managing Director) Ernst & Young PLT
(202006000003 (LLP0022760-LCA) & AF 0039)
Kerk Chian Tung Chartered Accountants
(Executive Director)
Teo Lee Teck Registered Office

(Non-Independent Non-Executive Director)
3A, Mezzanine Floor
Kuo Liong Yok Jalan Ipoh Kecil
(Non-Independent Non-Executive Director) 50350 Kuala Lumpur
Tel : (03) - 4043 5750
Kerk Shiang Yih Fax : (03) - 4043 5755
(Non-Independent Non-Executive Director)
(appointed on 1 March 2023)
Principal Place of Business
Raja Khairul Anuar Bin Raja Mokhtar 14 Jalan Kilang
(Independent Non-Executive Director) Kawasan Perindustrian Tongkang Pecah
83010 Batu Pahat, Johor Darul Ta’zim
Lim Poh Seong
(Independent Non-Executive Director)
Share Registrar
Dr. Voon Yuen Hoong
(Independent Non-Executive Director) Tricor Investor & Issuing House Services Sdn Bhd
197101000970 (11324-H)
Ho Wei Lih Unit 32-01, Level 32, Tower A
(Independent Non-Executive Director) Vertical Business Suite
Avenue 3, Bangsar South
Y.Bhg. Dato’ Keh (Kerk) Chu Koh No. 8, Jalan Kerinchi
(Chairman) 59200 Kuala Lumpur
(resigned on 30 December 2022) Tel : (03) - 2783 9299
Fax : (03) - 2783 9222
Principal Bankers
RHB Bank Berhad
Malayan Banking Berhad
Public Bank Berhad
United Overseas Bank (Malaysia) Berhad
OCBC Al-Amin Bank Berhad
CIMB Islamic Bank Berhad

Stock Exchange Listing
Main Market of Bursa Malaysia Securities Berhad
Stock Code : 5024
Corporate Website
www.hsib.com.my
2 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

Corporate Structure

199101015786 (226098-P)
Hup Seng Perusahaan Hup Seng Hoon Yong In-Comix Food

Makanan (M) Sdn Bhd Brothers Sdn Bhd Industries Sdn Bhd
197401002709 (19770-K) 197701000334 (31372-V) 198901003447 (180753-V)
Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 3

5-Year Group Financial Highlights
327.3
318.2
309.5
307.4
295.8
41.2
40.4
38.9
27.2
26.1
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Revenue Profit After Tax

(RM Million) (RM Million)
28.9
26.4
26.3
5.1
5.0
4.9
19.6
18.5
3.4
3.3
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Earnings Per Share Return On Equity

(Sen) (ROE) (%)
6.0
6.0
6.0
123.3
118.9
116.6
92.0
73.4
3.0
2.5
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Net Dividends Per Share Dividends Payout

(Sen) Ratio (%)

5-Year Group Financial Highlights (cont’d)
Financial Year Ended 31.12.2018 31.12.2019 31.12.2020 31.12.2021 31.12.2022

Restated Restated
Key Results (RM)
Revenue 307,372,915 309,539,034 327,325,449 295,832,845 318,194,335

Profit after Tax 41,154,364 38,933,843 40,380,506 27,240,004 26,080,914
Other Key Data (RM)
Total Assets 236,464,405 234,205,813 228,779,958 207,153,461 212,835,948

Total Liabilities 79,998,926 86,806,491 89,000,130 68,133,625 71,735,198
Shareholders’ Equity 156,465,479 147,399,322 139,779,828 139,019,836 141,100,750
Capital Expenditure 4,211,222 16,685,132 3,835,705 2,756,293 6,310,673
Financial Ratio (%)
Revenue Growth 2.6 0.7 5.7 (9.6) 7.6

Net Profit Growth (7.4) (5.4) 3.7 (32.5) (4.3)
Net Profit Margin 13.4 12.6 12.3 9.2 8.2
Return on Equity (ROE) 26.3 26.4 28.9 19.6 18.5
Share Information
Earnings per Share sen 5.1 4.9 5.0 3.4 3.3

Net Dividends per Share sen 6.0 6.0 6.0 2.5 3.0
Dividends Payout Ratio % 116.6 123.3 118.9 73.4 92.0
Net Assets per Share RM 0.20 0.18 0.17 0.17 0.18
Other Information
Segment Ratio %
- Domestic Market 71.8 72.2 74.5 76.6 77.5
- Export Market 28.2 27.8 25.5 23.4 22.5
Total 100.0 100.0 100.0 100.0 100.0

Directors’ Profile
Kerk Kar Han

Kerk Kar Han, Malaysian aged 55, is the Chairman of the Company. He was appointed as a Non-Independent Non-
Executive Director of the Company on 15 August 2006 and redesignated as Chairman on 1 April 2023. He has been a
member of Remuneration Committee since 18 February 2014 until 1 April 2023. He is a member of Risk Management
Committee.
He graduated with a Bachelor in Business Administration from The Tatung Institute of Technology (now known as
Tatung University), Taiwan in 1995. He has over 28 years of experience in corporate administration, sales and marketing
development, customer and suppliers relationship management, product and packaging design and operational execution.
He was appointed as Director of Hup Seng Perusahaan Makanan (M) Sdn Bhd (”HSPM”) on 2 September 2013 and also
a member of Company Development Committee since year 2020.
He joined Hup Seng Hoon Yong Brothers Sdn Bhd (”HSHY”) on 20 September 1995 as a Management Executive. He
was promoted to Admin Senior Executive in July 1997. On 10 March 1998, he was appointed as the Executive Director of
HSHY. Subsequently, he was redesignated as Director cum Admin Senior Executive on 24 January 2003. On 1 January
2004, he was promoted to Director cum Assistant Admin Manager. On 1 January 2011, he was promoted to Director cum
Sales and Admin Manager, fully responsible for maintaining and improving the organisational administration system,
sales and marketing performance, ensuring the compliance of company policies, overseeing branches performance and
participating in sales and marketing strategic planning and decision making as well as supervising, overseeing and co-
ordinating operations of sales and marketing. Subsequently, he was redesignated as Executive Director on 16 July 2018.
He reports directly to Managing Director.
He was appointed as a Director for In-Comix Food Industries Sdn Bhd (“ICFI”) on 7 July 2009, fully responsible for
administration, marketing & sales and material purchase of the company and provides full support to HACCP
Management System. He meets with the Head of Operational Unit to discuss and resolve key operational, financial
and other key management issues regularly, and highlights and discusses significant issues at Board meetings. He was
appointed as management representative to oversee the implementation of the Halal Assurance Management System of
ICFI on 1 January 2014.
He is the nephew of Kerk Chiew Siong and cousin of Kerk Chian Tung, Teo Lee Teck, Kuo Liong Yok and Kerk Shiang Yih.
He does not have any conflict of interest with the Company. He has no convictions for any offences over the past 10 years.

Directors’ Profile (cont’d)
Kerk Chiew Siong

Kerk Chiew Siong, Malaysian aged 70, is the Managing Director of the Company. He became a member
of the Board of Directors on 4 October 1991 and was appointed as an Executive Director on 3 August
2000. He was redesignated as a Non-Executive Director on 1 February 2003 and then as a Non-Executive
Vice Chairman on 17 August 2006. Subsequently, he was redesignated as the Managing Director of the
Company on 1 January 2022.
He has more than 40 years of experience in business leadership, strategic planning, food safety
management, business development, talent acquisition as well as product and packaging design.
He started his career as a Director with HSPM on 12 March 1981 and was then redesignated as an Executive
Director and a Vice Chairman on 1 January 1990 and 1 February 2003 respectively. On 16 July 2018, he
was redesignated as the Chairman of HSPM. Moreover, he was appointed as a Director of HSHY on 15
February 1988 and was then redesignated as a Deputy Managing Director and an Executive Director on
1 January 1990 and 1 February 2003 respectively. On 1 July 2016, he was redesignated as the Managing
Director of HSHY. He was appointed as a Director of ICFI on 12 July 2005.
He is currently responsible for managing the Group’s operations and overseeing the Quality Assurance,
Research and Development and Business Development Department, primarily devising strategies for
market expansion and researching the potential of the Group’s products in existing and new markets.
As well, he is the key management personnel for the company-wide food safety and quality management
systems (i.e. ISO 9001:2015, HACCP, ISO 22000:2018, and FSSC 22000). In addition to the responsibilities
listed above, he also serves as the Chairman of Anti-
Bribery and Anti-Corruption Committee, advisor of
COVID-19 Emergency Response Protocol Committee
and Crisis Management Committee.
He is the uncle of Kerk Chian Tung, Teo Lee Teck, Kerk

Kar Han, Kuo Liong Yok and Kerk Shiang Yih. He does
not have any conflict of interest with the Company
except for certain recurrent related party transactions of
revenue or trading nature that is necessary for day-to-day
operations of the Group. He has no convictions for any
offences over the past 10 years.

Kerk Chian Tung

Kerk Chian Tung, Malaysian aged 52, became a member of the Board of Directors of
the Company on 15 November 1999 and has been an Executive Director of the same
since 17 August 2000. She is the niece of Kerk Chiew Siong and cousin of Teo Lee Teck,
Kerk Kar Han, Kuo Liong Yok and Kerk Shiang Yih. She does not have any conflict of
interest with the Company nor conviction for any offences over the past 10 years.
Kerk Chian Tung is a member of the Australian Society of Certified Practising

Accountants. She has more than 15 years of experience in corporate finance.
She graduated with a bachelor degree in Accounting from the University of Southern
Queensland, Australia in 1991 and a bachelor degree in Manufacturing Management
from the University of Monash, Australia in 1994. She joined an accounting firm as
an auditor in 1992 and later joined Arthur Andersen HRM (Tax Services) Sdn. Bhd.,
a public accounting firm as a Tax Consultant in 1995. In 1997, she was employed as
an Assistant Business Development Manager in Jaya Tiasa Holdings Berhad, a public
listed company involved in investment holding and provision of management services,
extraction and sale of logs. She joined a trading company as a Finance Manager in
1998 and then resigned in 1999 to become an investment analyst in SBB Securities
Sdn. Bhd., a company involved in stockbroking activities.

Teo Lee Teck

Teo Lee Teck, Malaysian aged 63, was appointed as
a Non-Independent Non-Executive Director of the
Company on 10 August 2000. He is a member of Risk
Management Committee. He was appointed as Director
of HSHY on 2 September 2013. He was a Director of
HSPM on 20 March 1984 and became an Executive
Director of the same since 1 January 1990.
He started his career with HSPM in 1977 as a Chocolate

Wafer Section supervisor and was promoted numerously
before assuming the position of Production Manager
in 1987. In 1994 he was promoted to Project Manager,
responsible for construction of factory and installation
of new plant, machines and facilities, as well as the
maintenance and inspection of the Fire Prevention
System.
He has been appointed as HSPM’s Quality Management

Representative in formulating, implementing and
ensuring the Company Quality Management System
fulfilled the standard requirement. He was fully
responsible for leading the task force towards the
achievement of ISO 9001:2015 in 2017. In line with the
increasing focus worldwide on food safety, to obtain ISO
22000:2018 Food Management System in 2019 and FSSC
22000 Food Safety Management System Certification in
2020. As well as working with HACCP team to obtain
HACCP and GMP certification through Malaysia’s
Ministry of Health to demonstrate the company
commitment towards food safety and quality to ensure
consumer confidence and meet the export requirement
for obtaining Health Certificate. He also was appointed
as Chairman of Company Development Committee
since year 2020.
He was appointed as a Director for ICFI on 7 July

2009, fully responsible for the product manufacturing,
quality and hygienic assurance of the company. He was
redesignated to Chairman of ICFI on 16 July 2018.
He is the nephew of Kerk Chiew Siong and cousin of

Kerk Chian Tung, Kerk Kar Han, Kuo Liong Yok and
Kerk Shiang Yih. He does not have any conflict of
interest with the Company. He has no convictions for
any offences over the past 10 years.

Kuo Liong Yok

Kuo Liong Yok, Malaysian aged 70, was appointed as a Non-Independent Non-Executive Director of the Company on
1 January 2022. He was appointed as a member of Risk Management Committee on 19 May 2022 and a member of
Remuneration Committee on 1 April 2023.
He graduated with a Bachelor of Commerce in Accounting from National Chengchi University, Taiwan in 1980. He has
over 40 years of experience in corporate administration, regulatory affairs, tax and treasury, logistics and transportation
management within the manufacturing and trading sectors.
He began his career as a Director with HSPM on 12 March 1981. He was redesignated as a Deputy Managing Director
and then an Executive Director on 1 January 1990 and 1 February 2003 respectively. On 16 July 2018, he was redesignated
as a Vice Chairman of HSPM. In addition, he was appointed as a Director of HSHY on 21 September 1989. He was later
redesignated as an Executive Director and a Director on 1 January 1990 and 1 February 2003 respectively. On 9 March
2022, he was redesignated as the Chairman of HSHY. He was appointed as a Director of ICFI on 15 December 2021.
Presently, he is responsible for overseeing the overall administrative operations of the Group. As well as the above, he
is also tasked with leading the Occupational Safety and Health Committee, COVID-19 Emergency Response Protocol
Committee, Sustainability Project Committee, as well as Malaysian and Indonesian Halal Management Systems.
He is the nephew of Kerk Chiew Siong and cousin of Kerk Chian Tung, Teo Lee Teck, Kerk Kar Han and Kerk Shiang
Yih. He does not have any conflict of interest with the Company except for certain recurrent related party transactions
of revenue or trading nature that is necessary for day-to-day operations of the Group. He has no convictions for any
offences over the past 10 years.

Kerk Shiang Yih Raja Khairul Anuar Bin

Kerk Shiang Yih, Malaysian aged 50, was appointed Raja Mokhtar
as a Non-Independent Non-Executive Director of
the Company on 1 March 2023. Raja Khairul Anuar Bin Raja Mokhtar, Malaysian
aged 48, was appointed as a Non-Executive
She graduated with a Bachelor of Business Director of the Company on 14 December 2000 and
Administration, majoring in Marketing and subsequently became an Independent Non-Executive
minoring in Management from Wichita State Director on 15 March 2012. He is the Chairman
University, Kansas, United States in 1996. of Remuneration Committee, a member of Audit
Committee and Risk Management Committee.
She has more than 25 years of experience in business He does not have any family relationship with any
and strategy development, cross-country sales director and/or major shareholder. He does not
management, customer relationship management, have any conflict of interest with the Company nor
product and packaging design, logistics management convictions for any offences over the past 10 years.
and operational execution. She began her career
with HSPM as a Market Development Executive in He holds a Bachelor of Commerce (majoring
1996, and was subsequently promoted to Market in Finance and Marketing) and a Diploma of
Development Assistant Manager in 2004 and Commerce from Curtin University of Technology,
Market Development Manager in 2009. As well, she Perth Western Australia in 1998. He started his
has served as a Director of HSPM and HSHY since career as an Executive at L&M Corporate (M)
2 September 2013 and 10 March 1998 respectively. Berhad from 1998 to 2000 and subsequently joined
a Multinational IT company, Hewlett-Packard Sales
Currently, she is responsible for leading the market (M) Sdn. Bhd., as a Business Analyst from 2001 to
development division of HSPM, with a primary 2002. He was with EMKAY (Paradigma Intan Sdn.
focus on identifying and developing new business Bhd.) a property development company from 2004
opportunities as well as managing customer to 2011. He now sits on the board of directors of
relationships and sales growth. several private companies.
She is the niece of Kerk Chiew Siong and cousin

of Kerk Chian Tung, Teo Lee Teck, Kerk Kar Han
and Kuo Liong Yok. She does not have any conflict
of interest with the Company except for certain
recurrent related party transactions of revenue
or trading nature that is necessary for day-to-day
operations of the Group. She has no convictions for
any offences over the past 10 years.

Lim Poh Seong

Lim Poh Seong, Malaysian aged 57, was appointed as an
Independent Non-Executive Director of the Company
on 1 September 2018 and became the Independent
Co-Chairman on 1 March 2019 until 31 August 2021.
He is a member of Audit Committee, Remuneration
Committee and Nomination Committee. He was
appointed as the Chairman of Risk Management
Committee on 31 March 2022.
He is a Fellow Member of The Association of Chartered

Certified Accountants (“ACCA”) and a member
of Malaysian Institute of Accountants (“MIA”).
He has over 25 years of experience in the fields of
auditing, accounting, corporate finance and overall
administration of business operations. He began his
career as an auditor with a major accounting firm in
Kuala Lumpur in 1989. Subsequently, he joined the
commercial sector where he held various positions
in the finance and operations divisions of several
Malaysian public listed companies. He was appointed
as an Executive Director of Pantai Holdings Berhad,
a public listed company involved in healthcare and
was put in charge of the group’s overall operations and
finance from April 2001 to September 2005. He left the
group in February 2007 as the Group Chief Operating
Officer. He was an Executive Director of Paos Holdings
Berhad from April 2007 to April 2008 and Asia Poly
Holdings Berhad from October 2007 to April 2008,
respectively. Currently he is also the Independent
Non-Executive Director and Audit Committee
Chairman for Paos Holdings Berhad and Samaiden
Group Berhad, both public listed companies. Mr Lim
does not have any family relationship with any director
and/or substantial shareholder of the Company or any
conflict of interest with the Company. He has not been
convicted of any offence within the past 15 years.

Dr. Voon Yuen Hoong

Dr. Voon Yuen Hoong, Malaysian aged 43, was appointed
as an Independent Non-Executive Director of the
Company on 31 March 2022. On 19 May 2022, she was
appointed as the Chairperson of Audit Committee,
and a member of Nomination Committee and Risk
Management Committee.
Dr. Voon holds a Bachelor of Arts (Honours) in

Management Accounting from Universiti Teknologi
Malaysia, a Master of Business Administration (“MBA”)
from Universiti Kebangsaan Malaysia and a Doctor of
Philosophy (“PhD”) in Taxation from Universiti Malaya.
She is a Fellow Member of Association of Chartered
Certified Accountants (“ACCA”), a Member of Malaysian
Institute of Accountants (“MIA”), a Member of Chartered
Tax Institute of Malaysia (“CTIM”) and a Member of
Financial Planning Association of Malaysia (“FPAM”).
Moreover, she is a Licensed Tax Agent under Section 153
of the Income Tax Act 1967, and has served as a Chief
Examiner of the CTIM Examination Committee since
2019.
Dr. Voon has more than 20 years of combined experience

in the fields of accounting, auditing, and taxation. She
began her career as an audit and tax assistant at a local
accounting firm in 2003. Upon completing her MBA
and earning her professional qualification from ACCA,
she joined an international accounting firm as a tax
supervisor and was promoted to the position of Assistant
Manager from 2007 to 2010. Subsequently, she joined
Crowe Malaysia as a Tax Manager in 2010.
Dr. Voon is currently a Tax Partner at Crowe Malaysia

and leads the firm’s tax compliance practice, which serves
clients ranging from small and medium-sized enterprises
to publicly-listed companies as well as multinational
corporations. Besides tax compliance engagements, she
also engages in tax audits and investigations, as well as
tax advisory services. Being a subject matter expert, she
has served as an expert witness in a number of court
proceedings. She is also a frequent speaker at chambers of
commerce and universities.
Dr. Voon does not have any family relationship with any
director and/or major shareholder, nor any conflict of
interest with the Company. She has no convictions for
any offences (other than traffic offences, if any) over the
past 10 years.

Ho Wei Lih
Ho Wei Lih, Malaysian aged 41, was appointed as an Independent Non-Executive Director of the Company
on 31 March 2022. On 19 May 2022, she was appointed as the Chairperson of Nomination Committee,
and a member of Audit Committee and Risk Management Committee. She does not have any family
relationship with any director and/or major shareholder, nor does she have any conflict of interest with
the Company. She has no convictions for any offences (other than traffic offences, if any) over the past 10
years.
Wei Lih holds a first-class honours degree in law (LL.B.) from the University of Birmingham, United
Kingdom and a master’s degree in law (LL.M.), from the University College London, United Kingdom,
specialising in commercial and corporate law. She was called to the Bar of England & Wales by the Middle
Temple in 2006 and was admitted to the Malaysian Bar in 2007.
Wei Lih started her legal career with Shearn Delamore & Co., advising on resolution of corporate and
commercial disputes from 2006 to 2010, prior to joining Rahmat Lim & Partners in 2011. From March to
November 2016, she was seconded to the Hong Kong office of Slaughter & May, a leading international law
firm. Wei Lih is currently a Partner and Head of the China Practice Group of Rahmat Lim & Partners, an
associate firm of Allen & Gledhill LLP, Singapore.
Wei Lih possesses knowledge and experience in the legal, compliance and regulatory areas. Her areas of
practice include public and private mergers and acquisitions, takeovers, general commercial contracts,
and corporate advisory work. She represents private equity funds and multinational corporations as
lead counsel for cross-border corporate transactions spanning the ASEAN region. Her advisory roles
cover investments, privatisations, acquisitions and divestitures across a wide range of industries for both
local and overseas clients. She also advises on private placements, joint ventures, distressed mergers and
acquisitions (“M&As”), and corporate restructuring transactions. Well regarded for her experience, Wei
Lih is recommended for corporate/M&A work by legal publications, such as Chambers Asia Pacific and
IFLR 1000.

Y. Bhg. Dato’ Keh (Kerk) Chu Koh

(resigned on 30 December 2022)
Y. Bhg. Dato’ Keh (Kerk) Chu Koh, Malaysian aged 80, is the Chairman of the
Company. He became a member of the Board of Directors on 4 October 1991 and
was appointed as the Managing Director on 3 August 2000. Subsequently, he was
redesignated as Chairman on 1 February 2003. He was appointed as the Deputy
Managing Director of HSPM on 13 October 1974 and then the Managing Director
of the same on 1 April 1977. He was appointed as the Deputy Managing Director
on 21 April 1977 and subsequently the Vice Chairman of HSHY on 1 January
1990. He was appointed as a Director of ICFI on 12 July 2005. He is the brother
of Kerk Chiew Siong, uncle of Kerk Chian Tung, Teo Lee Teck, Kerk Kar Han,
Kuo Liong Yok and father of Kerk Shiang Yih. He does not have any conflict of
interest with the Company except for certain recurrent related party transactions
of revenue or trading nature that is necessary for day-to-day operations of the
Group. He has no convictions for any offences over the past 10 years. He plans
the Group’s strategic business development and production development which
includes the installation of various production facilities in the Group’s factory
and heads the research and development team which researches new varieties
of biscuits. He contributed in obtaining the Certification of HACCP (Hazard
Analysis Critical Control Point) & BRC (British Retail Consortium) for HSPM
in year 2008 and ISO 22000:2005 in year 2012, to ensure that product safety and
quality are in line with global standard. He travels abroad extensively to keep
abreast with the latest developments in the biscuits manufacturing industry and
to assess new market prospects for the Group.

Management Discussion and Analysis
1. Overview
Hup Seng Industries Bhd. (“HSIB”) being the holding company of the Group, is one of the leading biscuits
manufacturers in Malaysia.
Currently the Group has three wholly owned subsidiaries namely:
i. Hup Seng Perusahaan Makanan (M) Sdn Bhd (“HSPM”) is principally engaged in the manufacture and
distribution of biscuits for the Group at its factory located in Tongkang Pecah, Batu Pahat, Johor;
ii. In-Comix Food Industries Sdn Bhd (“ICFI”) is involved in the manufacture and distribution of beverages for the
Group at its factory located in Senai, Johor; and
iii. Hup Seng Hoon Yong Brothers Sdn Bhd (“HSHY”) acts as the marketing and distribution arm for the biscuits
and beverages manufactured by HSPM and ICFI respectively in Malaysia. HSHY’s head office is located in Batu
Pahat, Johor and six (6) nation-wide sales networks covering all parts of Peninsular Malaysia namely, the Klang
Valley, Kota Bahru, Kuantan, Ipoh, Butterworth and Alor Setar.
2. Products and Brands

Hup Seng’s biscuits has been brand guaranteed for 64 years. The products, especially “Cap Ping Pong Crackers” are
distributed to cities and towns in the country. It is also a household name and has won the love of all ethnic groups.
Apart from distributing domestically, the Group also exports its products to over 40 countries.
The products produced and distributed by the Group can be summarized into the following product ranges:
I. Biscuits : Crackers, Cream Sandwich biscuits, Assorted biscuits, Cookies and other series.
II. Beverages : Instant Coffeemix, Teas and Cereals.
III. Other agent products : Rice crackers and other products.
Biscuits Range
Key iconic brands include a diversified brand portfolio spanning from savory to sweet biscuits and are marketed
under “Cap Ping Pong” and “Hup Seng Cream Crackers” for all consumer groups; while the “Kerk” and “Naturell”
brand products cater to those who wanted high-quality premium products and health-conscious consumer groups.
The latter are the premium modern products of the Group.
“Hup Seng Cream Crackers” has been consecutively awarded the Gold Medal for years 1994 to 2003, 2020, 2021
and Grand Gold Medal for years 2004 to 2019 and Gold Quality Award in 2022. It garnered the “International High
Quality Trophy” award in 2017 as well as 2020 and won the “25 Years Trophy” in 2018 by Monde Selection, Belgium.
Beverages Range
The Beverages range is marketed under the brand name “In-Comix”. The three (3) main categories are namely “3 in
1 Instant Coffeemix”, “Instant Teas” and “Nutritious Instant Cereal”. The major selling category under this range is
the “Instant Teas” and “3 in 1 Instant Coffeemix”. The Group is engaged in blending coffee mix and other beverage
mix and caters to both local and export markets.

Management Discussion and Analysis (cont’d)
2. Products and Brands (cont’d)

Other Agent Products
In addition to distributing biscuits and beverages, the Group is also the distributor for other agent products, such as,
“Want Want” rice crackers, and others. The Group leverage on its distribution network throughout the country to
sell agent products to increase the Group’s revenue.
3. Overview of Business Operations

The 2022 financial year was marked by many changes in the operating environment. The continuation of COVID-19
adversely affected consumer demand, led to workforce shortages and created severe disruptions in domestic and
global supply chains. These issues were compounded by global instability, for example the Russian-Ukraine war,
which led to substantial increases in the cost of major input materials, as well as freight and transport charges
and energy costs. Notwithstanding these challenges, the Group registered an increase in revenue of about 7.6%
to RM318.2 million from RM295.8 million in the preceding year. The revenue improvements are mainly due to
repricing in response to these global events.
On product mix, biscuits being the dominant range represent about 96.5% (2021: 96.2%) of the total sales and “Hup
Seng Cream Crackers” contributed about two-thirds of the biscuits range. Beverages and other agent products make
up the balance of 3.5% (2021: 3.8%) of the total sales.
Profit after tax, on the other hand, decreased 4.3% to RM26.1 million from RM27.2 million achieved in the previous
year dragged down by commodity price pressures and fuel costs, as well as the increase in the minimum wage rate
effective May 2022.
Major commodity prices were elevated and among them palm oil prices have exceeded those of preceding year on
average by about 28.7%, flour by about 32.8%, corn starch by about 39.2% and milk powder by about 24.6%.
Consequently, the Group’s earnings per share had decreased from 3.4 sen to 3.3 sen.
Total assets stood at RM212.8 million in FY2022 an increase of RM5.7 million from FY2021.
Total liabilities increased by RM3.6 million to RM71.7 million in FY2022. Net asset per share had increased from
RM0.17 to RM0.18.

4. Operating Performance
Since the declaration of the Covid-19 pandemic, the Group observed strict operating procedures and standards
which are aligned with Government mandates to ensure a safe and healthy environment for all its employees and
during the year, there was no outbreak nor was there any production interruption due to infection.
To sustain and improve the Group’s profit margin and operational efficiency, as far as it is commercially viable and
financially possible, the Group will consider to invest and upgrade its plant and machineries in order to reduce the
dependency of foreign workers, machines’ downtime, and implements various systems and processes to increase
productivity, efficiency and cost saving.
The Group will replace the last existing brick baking line fired by diesel to a new European baking line fired by
natural gas. The new line with modern technology could improve the cost of production, such as reducing fuel cost,
improve quality and hygiene, reduce waste and environmentally able to reduce carbon emission.
The Group will continuously review and improve the production processes and quality, reduce costs and wastages
and the obligation to focus on environmental protection in the future moving forward.
5. Sales and Marketing
5.1. Domestic Market
During the year, the domestic market accounted for 77.5% of the Group’s turnover, an increase of about RM19.9
million or 8.8% from all channels of distribution when compared to 2021.
Biscuits being the dominant range represent about 96.0% (2021: 95.4%) of the total domestic sales with the
balance of about 2.7% (2021: 3.3%) on beverages and about 1.3% (2021: 1.3%) on other agent products.
The domestic business in Malaysia is handled by our own sales team. The Group has its own logistics team and
few outsourced logistics companies to provide fast delivery to ensure customers receive the freshest products.
The Group’s sales team is responsible for domestic markets, such as super and hypermarkets, retails, wholesale
and convenience stores. The distributors in East Malaysia are responsible for distributing products there. The
revenue distribution among the three channels of the Group has been quite even.
During the first half of the year, the Group’s performance was affected due to the slow sentiments of the domestic
market as consumers need to prioritise in the face of rising living costs and supply chain interruption, and the
Group’s margin was eroded due to high operating costs.
Having said that, the Group’s domestic revenue and margin picked up in the fourth quarter as costs of major raw
materials stabilized and repricing of the Group’s product was successfully implemented.
With the advancement of technology, the Group’s sales team has launched a mobile phone application to provide
customers with a convenient and fast “Goods return process” via paperless mechanism effective December 2022.
The Group will be able to improve the efficiency of the sales team as well as to play the part in creating a more
sustainable system for environmental protection and sustainable energy saving and paper reduction.

5. Sales and Marketing (cont’d)

5.2. Export Market
Export market accounted for 22.5% of the Group’s turnover in 2022. It registered an increase of 3.6% or about
RM2.5 million, mainly from the biscuits segment when compared to 2021. The improvement in revenue is
mainly due to repricing in the third quarter.
Biscuits being the dominant range represent about 97.6% (2021: 97.9%) of the total export sales with the balance
of about 2.4% (2021: 2.1%) on beverages.
The existing export market is still dominated by Asia, accounting for 87.2% of the Group’s export turnover. The
main export markets are Thailand, Indonesia, Singapore, Saudi Arabia and Myanmar.
The performance of the export market is less than satisfactory due to the combined effects of soaring global food
and energy prices, the decline of currencies against the US dollar, and the problems of container shortages as
well as port congestion in various countries.
Nevertheless, the Group managed to maintain market share and be competitive by working closely with our
distributors to understand the general environment of their markets and when necessary, to assist distributors
to overcome difficulties in order to enhance their sales.
6. Risk Overview
The Group is currently facing a few risk factors that might affect the Group’s profitability. Those risks include the
following:
6.1. Fluctuation of Raw Material Prices
The fluctuation costs of raw materials will directly impact the Group’s profitability. The Group has taken steps to
minimise the risk of price fluctuation by monitoring the cost of materials closely with suppliers to secure a more
stable supply with reasonable prices and assures that the quality of raw materials is maintained.
6.2. Competition from Existing Players
Rivalry among industry players could affect profits through downward pressure on prices and declining profit
margin. The Group will continue to improve the quality of its products, adhere to the importance of food safety
to send the highest quality and safe food to consumers, and expand its manufacturing capacities to meet the
market demand.
6.3. Changes in Consumer’s Preferences
Consumers nowadays tend to be more health-conscious in terms of food. The Group is aware of this shift in
consumer preferences and will be looking into this to meet the requirement of such consumers.

7. Dividend Policy
The Group has adopted a dividend policy that will distribute an annual dividend pay-out of at least 60% of the annual
profit after tax to the shareholders. The dividend pay-out will be dependent on the Group’s sufficiency of retained
earnings and level of cash.
The Board of Directors declared and paid an interim single tier dividend of 3.0 sen per share for the financial year
ended 31 December 2022. The total dividend paid for the year amounted to RM24 million.
8. Outlooks of Future Prospects
The outlook for the FY2023 remains challenging due to uncertainty for both domestic and export markets. The
tension between the US-China and the Russia-Ukraine war have dealt a major shock to commodity markets and
disrupted world production and trade. This in turn, may affect the demand for the Group’s products. Nevertheless,
the Group remains optimistic about the prospects of the biscuits industry given the effort by the government and
the gradual recovery of global trade and economy where restrictions are relaxed and most economic sectors have
reopened.
The Group will continue to be vigilant and will focus on securing sales in both domestic and export markets and to
explore new markets to broaden its revenue and enhance the competitiveness of the products to drive for higher sales
and growth in market share. The Group will take the necessary measures to manage and mitigate these uncertainties
and will continue to implement any necessary action plans to maximise the Group’s earnings.

Sustainability Statement
1. About this Sustainability Statement

As part of Hup Seng Industries Berhad’s (“HSIB” or “the Group”) development of its sustainability journey, the Group is
pleased to present its sixth annual sustainability statement (“the Statement”), which provides a comprehensive overview
of the Group’s approaches to sustainability.
The statement has been prepared in accordance with the Global Reporting Initiative (“GRI”) Core Option Guidelines
as the basis for the Group’s economic, environmental and social (“EES”) disclosures. Following the GRI guidelines,
we address material issues that have a significant impact on our EES performance and stakeholders’ assessments. The
statement illustrates the progress of our sustainability performance for the period between 1st January 2022 and 31st
December 2022 and adheres to the Sustainability Reporting Guide (“SRG”) as well as the toolkit issued by Bursa Malaysia
Securities Berhad (“Bursa Securities”).
The statement encompasses four key companies within the Group, namely HSIB, Hup Seng Perusahaan Makanan (M)
Sdn. Bhd., Hup Seng Hoon Yong Brothers Sdn. Bhd. and In-Comix Food Industries Sdn. Bhd. Each of these companies
contributes to the overall environmental and social impact of the Group.
Full details of our Sustainability Report are available on our website at www.hsib.com.my.
2. Sustainability Governance Structure

An organization’s sustainability requires a top-down approach in which the Board of Directors (“the Board”) plays a
pivotal role in leading the organization towards its goals and objectives. We have also established a governance structure
to ensure that sustainability initiatives are overseen and implemented effectively. The sustainability project committee
is formed to integrate sustainability into the Group’s business processes and prepare the Group’s sustainability
reporting. A sustainability coordinator works closely with representatives from various business functions to implement
sustainability programs and initiatives. There is a clear line of communication; with the sustainability project committee
reporting to the executive committee which ultimately reports to the Board.
The Group’s sustainability governance structure is outlined below:
Board of Directors
Executive Committee
Sustainability Project Committee Sustainability Coordinator
The following are the core responsibilities of the sustainability project committee:
1. Conducts materiality assessments.

2. Identifies material sustainability issues and ensures effective stakeholder engagement.
3. Provides recommendations to the executive committee regarding the development and execution of strategies for
material sustainability matters.
4. Establishes targets and performance indicators for approval by the executive committee and the Board.
5. Ensures smooth implementation of strategies formulated into the Group’s business processes.
6. Monitors sustainability performance and maintains proper records to facilitate regular reviews.
7. Leads the preparation of sustainability statement and report, ensuring that applicable reporting requirements are met.

Sustainability Statement (cont’d)
v
3. Risk Management and Sustainability
Risk management is a critical pillar of good corporate governance, and the Board is aware of the importance of establishing
and maintaining a sound risk management and internal control system.
The Group has established and implemented a risk management framework for the identification, assessment, treatment,
monitoring and reporting of significant risks. The Board oversees the management in the formulation, update and maintenance
of an adequate and effective risk management framework. The Group’s Enterprise Risk Management (“ERM”) framework is
based on an internationally recognized risk management framework (i.e., ISO 31000). The Group maintains a risk register
which identifies the material risks faced by the Group and the internal controls in place to manage and mitigate those risks.
Throughout the year, we have reviewed and reevaluated our risk profile with reference to the current global standards and
best practices. The Group’s emerging and principal risks, together with its appetite with respect to each risk, were identified
and agreed upon.
In addition, the Board increased its focus on environmental, social and governance (“ESG”) matters and looked at how they
can be embedded in our decision-making processes. In this regard, we have taken initial steps by integrating some ESG
aspects into our ERM framework. Sustainability-related risks along ESG dimensions are part of the overall risk universe
covered in the risk management framework and processes.
4. Stakeholder Engagement
As part of our continuous improvement efforts, we engage with our stakeholders in both formal and informal settings. Our
engagements with our suppliers and consumers range from formal meetings to ongoing dialogues. Through our collaborations
with external stakeholder partners, we were able to identify and address issues as soon as they arise. This approach allows us
to better achieve our environmental, social and economic goals.
In FY2022, despite numerous COVID-19-related repercussions, we remained proactive in engaging various stakeholders
through a variety of channels. We have summarized our key stakeholders and methods of engagement in the following table:
Stakeholders Frequency Types of Engagement Focus
Customers • Throughout the year • Feedback surveys • Safe, nutritious and quality products
• As needed • Social media channels (e.g. • Regulatory compliance
Facebook and Instagram) • Third party food certification
• Corporate website • Customer satisfaction
Suppliers • Annually • Interviews • Regulatory compliance

• As needed • Face-to-face interactions • Business continuity
• Supplier performance • Fair pricing
evaluation • Responsive and timely communication
Employees • Annually • Learning and development • Respect for human rights

• As needed programs • Safe and healthy workplace
• Employee performance • Job security and supportive welfare
appraisal • Equal opportunity and career
• Team building activities development
• Sports and social events
Shareholders • Quarterly • Financial results • Financial performance

• Annually • Press releases • Good corporate governance
• As needed • Corporate website
• Annual General Meeting

4. Stakeholder Engagement (cont’d)
v Stakeholders Frequency Types of Engagement Focus
Regulators • Throughout the year • Statutory submissions • Ethical business practices

• As needed • Site visits and conferences • Product quality and safety
• Audits and assessments • Halal certification
• Occupational health and safety
• GHG and other emissions
• Effluent and waste
Media • Throughout the year • Media interviews • Business strategy and business growth
• As needed • Press releases • New product launches
• Advertisements • Product quality and safety
• Regulatory compliance
Non- • As needed • Corporate social • Ethical business practices

Governmental responsibility activities • Good corporate governance
Organizations
Community • Throughout the year • Social media channels (e.g. • Direct and indirect economic
Facebook and Instagram) contribution
• Corporate website • Responsible environmental
• Community events management and contribution to
society
Consumers • Throughout the year • Social media channels (e.g. • Brand awareness
Facebook and Instagram) • Consumers preferences and market
• Corporate website trends
• Product campaigns
Industry • As needed • Association meetings • Industry trends and standards

and Trade • Trainings • Knowledge and information sharing
Associations • Exhibitions
Academia • As needed • Corporate website • Knowledge and information sharing

5. Materiality Assessment
Identifying the Group’s EES matters that have material impact is key to formulating and implementing sustainable
strategies. The materiality matrix was developed based on the importance of material sustainability issues to key
stakeholders and to the business operations. The matrix is as follows:
High • Anti-Bribery Anti-Corruption • Environmental Compliance • Food Safety

• Transportation Management • Ecological Footprint • Nutrition Labelling
• Quality and Healthy Food
• Training and Development
• Injury Minimization
Importance to Stakeholders
• Climate Change • Diversity and Equal • Business Performance

• Effluents and Waste Management Opportunities • Energy Consumption
Low
Low Importance to the Group High
Material Topics and Risk Assessment
Our materiality assessment was conducted under the guidance of our risk management framework, and Bursa
Securities’s Sustainability Reporting Guide (3rd Edition) and Bursa Securities’s Toolkit, in order to ensure that our
economic, environmental, social and governance risk profile remains relevant.
In FY2022, we revisited our risk profile and integrated material sustainability matters into our Enterprise Risk
Management (“ERM”) framework in order to identify, shortlist, prioritize specific risks and opportunities. In addition,
we took into consideration the views of internal stakeholders and our business environment and weighted them against
our strategic priorities.
Sustainability risks can be identified and derived from a variety of perspectives, including:
• Conducting regular risk assessments and identifying new risks, both internally and externally;
• Evaluating the possible impacts of our operations and products on society and the environment;
• Assessing the potential risks associated with other factors, such as environmental trends and regulatory requirements.
In FY2022, we reviewed and retained all 46 material sustainability matters that were identified in the previous financial
year since these matters continue to be relevant to our stakeholders and have a significant impact on our Group’s
business operations.
Having analyzed each of the assessment of the 46 material matters, we identified the following 10 matters as being
material and significant to our Group’s business operations. These material matters were then evaluated in terms of
their sustainability risks and opportunities, and correlated with our Group’s risk profile.

5. Materiality Assessment (cont’d)
Material Topics and Risk Assessment (cont’d)
Potential Opportunities for Potential Risks for HSIB Link to Our

Material Issues Description HSIB if issue is addressed if issue is not addressed Corporate Risks
Business Performance • Return on equity and • Sustainable financial • Hinder business continuity. Strategic:
earnings per share. performance creates • Long Term Viability and
Corresponding United long-term value for all Growth Rate Risk
Nations Sustainable stakeholders. • Continuity Risk
Development Goals
(“UN SDGs”): 8 Financial:
• Financial Performance Risk
Ecological Footprint • The impact on environment • Reducing wastage at source • Environmental and Operation:
caused by our business supports operational reputational risk from the • Production Cost Overrun
Corresponding operations. efficiency, which is cost failure to meet stakeholders’ Risk
UN SDGs: 12 saving. expectations in managing
• Recycling also conserves our waste and production
diminishing natural efficiency.
resources.
Energy Consumption • Countering climate change • Reduce energy usage and • Waste of resources Operation:
has become a business emissions which saves and affects production • Machinery Breakdown Risk
Corresponding priority and no longer an costs. processes.
UN SDGs: 7, 12, 13 option.
Environmental • As a leader in food • Engaging with regulators • Reputational risk Compliance:

Compliance processing, environmental allows HSIB to prepare for and unable to obtain • Non-Compliance with
regulation compliance is emerging legislation and certification or license Regulatory Authority
Corresponding vital to the community ensure compliance. renewal from regulatory Requirements Risk
UN SDGs: 12 around our plants. bodies.
Injury Minimization • Minimize injury is our goal • Increased productivity • Injuries, occupational Operation:
in workplace safety. and efficiency in HSIB hazards, lost days and • Health and Safety Hazard
Corresponding operations. fatalities will result in Risk
UN SDGs: 3, 8 productivity loss and
Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

reputational risk.
25
26
5. Materiality Assessment (cont’d)
Material Topics and Risk Assessment (cont’d)
Potential Opportunities for Potential Risks for HSIB Link to Our

Material Issues Description HSIB if issue is addressed if issue is not addressed Corporate Risks
Training and • Develop future leaders • Remain competitive • Loss of competent and Operation:
Development through training programs. with skilled and diverse experienced employees. • Knowledge/Competency
employees. • Financial implications Risk
Corresponding • Cultivate high-performance when HSIB workforce is
UN SDGs: 4, 8 culture through effective not developed to meet the
training and upskilling evolving market demands.
programs.
Diversity and Equal • We are an equal • Remain competitive • Challenge to attract and Operation:
Opportunities opportunity employer with skilled and diverse retain talent. • Knowledge/Competency
who believes diverse employees. Risk
Corresponding background can contribute • Dependence on Foreign
UN SDGs: 5, 8, 10 to making better decisions. Labor Risk
Quality and Healthy • We strive to continuously • Deliver HSIB’s brand • Unable to meet consumers Strategic:

Food develop new products with promise to consumers demand and compete in • Innovation/R&D Risk
healthier ingredients. through product excellence. existing and new markets.
Corresponding • Offer healthier options that
UN SDGs: 2, 3 contribute to consumers’
well-being.
Nutrition Labelling • Correct labelling to be • Meeting consumer • Regulatory risks. Compliance:

printed on packaging demands for nutritional • Non-compliance to
Corresponding and is in compliance information which enable Regulatory Standards Risk
UN SDGs: 3, 12 with respective countries’ them to make informed
regulations. decision on choice of
products.
Food Safety • Our products have passed • Deliver HSIB’s brand • Reputational risk and Compliance:
the various certification promise to consumers branding damage. • Non-compliance to
Corresponding processes to ensure safety through product quality Regulatory Standards Risk
UN SDGs: 3 compliance. and increase in customers’
confidence. Operation:
• Product Quality Risk
6. Managing Sustainability
i. Economic / Economic performance
FY2022 was one of the most challenging periods in the history of our Group. Our operating costs were
significantly impacted by the increase in commodity and food prices, global supply chain disruptions as well
as the new Malaysian minimum wage. In addition, consumers were faced with rising costs of living and are
therefore more cautious with their purchases.
Nevertheless, the Group generated RM318.2 million in revenue, representing an increase of 7.6% from FY2021.
Detailed information regarding our financial performance can be found on pages on 70 and 72.
We have adopted a dividend policy that entails paying out at least 60% of the annual profit after taxes as dividends
to shareholders. We believe that such a pay-out rate will be beneficial and well-received by the shareholders and
investors.
ii. Environment / Materials
In order to manage waste effectively in Hup Seng, we focus on the following:
• Working closely with our suppliers to ensure that our raw materials and packaging materials conform to
our purchasing policy and are of high quality.
• Track, measure and monitor any losses that occur during the manufacturing processes and identify key
categories and waste streams.
• Reduce and recycle the generated waste by proper planning and monitoring.
In FY2022, approximately 472 tons of waste were disposed of by licensed waste contractors in accordance with
local regulations and some of these wastes were repurposed and used as animal feeds.
FY2020 FY2021 FY2022

Materials used by weight (thousand tons) 39 34 32
Recycled packaging materials as scrap sales (tons) 662 550 472
Besides the above, we have developed applications that enable storage and monitoring of data on a digital
platform, thereby eliminating the need for paper-based records and procedures.
iii. Environment / Energy
We strive to use the most efficient mix of energy sources in order to reduce our operating costs, thereby
improving our energy efficiency and contributing to the reduction of global warming. Moreover, in an effort
to reduce our energy consumption, we have established an electrical energy management (“EEM”) committee,
which is responsible for reviewing and recommending energy-saving measures.
FY2020 FY2021 FY2022

Energy consumption within the Group (mil kWh) 31 27 27
Energy intensity (kWh per ton) 844 830 875

6. Managing Sustainability (cont’d)

iii. Environment / Energy (cont’d)
In addition, we are aware that excessive use of lighting has a negative impact on the environment. Hence, we
practice turning off the lights of our office buildings during lunch breaks as well as investing in eco-friendly
and energy-saving lamps and light fixtures to reduce heat generation and energy consumption. We also reward
employees for their innovative ideas regarding energy conservation.
Water Management
We ensure that wastewater generated from our facilities are treated and meets all regulatory requirements
prior to its discharge into the environment. Our wastewater treatment system removes contaminants from
wastewater and converts it into an effluent that can be returned to the water cycle. Furthermore, we have
engaged an independent testing laboratory, accredited by the Department of Standards Malaysia, to monitor
our industrial effluent discharge on a monthly basis.
For the past three financial years, we have not exceeded the acceptable conditions for discharge of industrial
effluent set out in standard B.
FY2020 FY2021 FY2022

Water consumption within the Group (m3) 42,059 34,884 37,671
iv. Environment / Environmental compliance
As part of our commitment to the environment, we adhere to a formalized set of policies that provide guidance
on environmental issues as well as all applicable regulations, including:
1. Environmental Quality (Scheduled Waste) Regulations 2005

2. Environmental Quality (Clean Air) Regulations 2014
3. Environmental Quality (Industrial Effluent) Regulations 2009
4. Other relevant local government regulations
Further, we ensure that our transportation team operates in a manner that minimizes the impact on the
environment, particularly in terms of fuel consumption and carbon emissions. Presently, most of our trucks
are equipped with environmentally friendly Euro 2 and 3 engines and are powered by Euro 5 diesel fuel. Also,
to ensure the safety and roadworthiness of our trucks are in compliance with the Government’s safety and
emission regulations, we perform regular maintenance and service on our trucks in addition to sending them
for periodic inspections by the Pusat Pemeriksaan Kenderaan Berkomputer (“Puspakom”).
We have recorded zero incidents of non-compliance with environmental regulations for the last three financial
years.


v. Social / Occupational health and safety (“OHS”)
In view of the significance of OHS, we adopt a zero-tolerance approach regarding OHS violations and adheres to
the Occupational Safety and Health (Amendment) Act 2022 and other applicable regulations.
Our OHS policy is continuously reviewed and strengthened in order to safeguard the health and safety of all
employees, including full-time and part-time, through daily workplace inspections and walkabouts, regular on-
the-job training, safety awareness briefings, induction training for new employees, specific skill training for
machine and forklift operators, as well as quarterly committee meetings due to the high level of labor intensity
and complexity of machinery involved in our industry.
The establishment of an OHS committee also provides employees with a platform for identifying potential areas
for improvement, providing feedback to the management and motivating employees to take responsibility of
their own work environment.
Through continuous monitoring and supervision of our safety practices, we are pleased to report that we have
made significant progress in our OHS performance for FY2022:
FY2020 FY2021 FY2022

Number of work-related fatalities 0 0 0
Lost time injury frequency rate
(in million man hours) 1.58 2.46 0.36
Number of accident cases 5 7 1
It is our objective to have all employees attend health and safety training and approximately 74.5% of our
employees have completed the aforesaid training in FY2022.
COVID-19 health and safety
The Group’s COVID-19 Emergency Response Protocol (“ERP”) Committee is responsible for ensuring
compliance with the COVID-19 regulations introduced by the Government and the ERP COVID-19 employee
handbook from time to time. The ERP Committee also addresses critical issues relating to COVID-19 in a
timely manner in order to protect our workforce to the greatest extent possible.
Preventive measures for COVID-19 have continued to be implemented, including daily monitoring of health
status, wearing of a face mask, social distancing, self-isolation for those infected, etc. Additionally, the ERP
Committee requires that foreign employees’ accommodations be sanitized twice a week and the checklists and
sanitization records must be properly maintained. Regular inspections of hostels are also conducted by the
human resource department in an effort to reduce the risk of transmission of COVID-19.


vi. Social / Training and development
Despite the challenges posed by the pandemic during the reporting period, we have maintained our unwavering
commitment to developing the skills and capabilities of its employees. We are pleased to note that the Group has
recorded a significant increase in total training hours in comparison with FY2021. There was a total of 13,274
training hours completed by our employees, representing a 118% increase from the previous financial year. This
averaged out to 11.4 hours per employee higher than FY2021’s 4.9 hours per employee.
Total Training Hours by Gender:
FY2020 FY2021 FY2022

Male 6,244 3,918.5 8,759
Female 4.037 2,158.5 4,515
Total 10,281 6,077 13,274
Total Training Hours by Job Level:
FY2020 FY2021 FY2022

Management 7,422 3,892 7,238
Non-Management 2,859 2,185 6,036
Total 10,281 6,077 13,274
vii. Social / Diversity and equal opportunity
We are committed to creating a work environment that values equality, openness and freedom from bias and
discrimination. Additionally, to enrich the organization, we strive to attract and retain a diverse group of talent,
regardless of their gender, age, ethnicity, disabilities, skills, experience, and cultural background.
As of 31 December 2022, we employ 1,167 people, of whom 83% are permanent employees and the remainder
being contractors or temporary employees. We have also made significant progress in achieving gender equality
in our workforce, with 37% of all our employees being female. Our current workforce is primarily comprised of
51.4% of individuals under the age of 39, who bring fresh ideas to the organization and provide a healthy pipeline
of talent that may be nurtured into leadership positions in the future. 33.1% of our workforce are between the
ages of 40 and 55, whom assist in providing on-the-job training and mentoring to our young talents. As for the
remaining 15.5%, they are over the age of 55.


vii. Social / Diversity and equal opportunity (cont’d)
Percentage of employees by gender and age group for each employee category
FY2020 Male Female

Non- Non-
Management Executive Executive Management Executive Executive
Under 39 0.00% 0.45% 37.91% 0.08% 0.68% 13.04%

years old
40 to 55 0.76% 1.52% 15.92% 0.23% 1.36% 11.68%

years old
Over 55 1.44% 0.68% 6.14% 0.83% 0.76% 6.52%

years old
Total 2.20% 2.65% 59.97% 1.14% 2.80% 31.24%
FY2021 Male Female

Non- Non-
Under 39 0.08% 0.49% 35.47% 0.08% 0.73% 14.85%

years old
40 to 55 0.81% 1.62% 16.40% 0.25% 1.38% 12.18%

years old
Over 55 1.46% 0.57% 5.68% 0.89% 0.81% 6.25%

years old
Total 2.35% 2.68% 57.55% 1.22% 2.92% 33.28%
FY2022 Male Female

Non- Non-
Under 39 0.08% 0.43% 35.13% 0.08% 0.68% 15.43%

years old
40 to 55 0.86% 1.80% 16.88% 0.26% 1.46% 11.65%

years old
Over 55 1.54% 0.60% 5.49% 0.95% 0.77% 5.91%

years old
Total 2.48% 2.83% 57.50% 1.29% 2.91% 32.99%


Percentage of directors by gender and age group
FY2020 Male Female

Under 39 years old 0.00% 5.56%
40 to 55 years old 16.67% 27.77%
Over 55 years old 50.00% 0.00%
Total 66.67% 33.33%
FY2021 Male Female

40 to 55 years old 11.11% 27.77%
Total 66.67% 33.33%
FY2022 Male Female

40 to 55 years old 11.77% 29.41%
Total 64.71% 35.29%


Percentage of employees that are contractors or temporary employees by gender and nationality
Due to our commitment to equal opportunity, we do not discriminate against employees based on their
nationality or cultural background, and we are committed to complying with all key human rights and fair labor
practices.
FY2020 Male Female

Local Foreigner Local Foreigner
Permanent 47.0% 0.0% 35.0% 0.0%
Contractors or Temporary Employees 0.0% 18.0% 0.0% 0.0%
Total 47.0% 18.0% 35.0% 0.0%
FY2021 Male Female

Permanent 46.8% 0.0% 37.5% 0.0%
Total 46.8% 15.7% 37.5% 0.0%
FY2022 Male Female

Permanent 45.9% 0.0% 37.1% 0.0%
Total 45.9% 17.0% 37.1% 0.0%


Percentage of employee turnover by employee category
In order to remain competitive with our peers and be in line with the prevailing local market rates, we review
our compensation packages on a regular basis and provide fair remuneration and working conditions to all
employees. The benefits we provide for all full-time employees include medical benefits, maternity leave,
parental leave, long-service awards, etc.
FY2020 FY2021 FY2022

Management 0.00% 0.01% 0.00%
Executive 0.01% 0.02% 0.02%
Non-Executive 2.18% 1.48% 1.78%
Total 2.19% 1.51% 1.80%
Anti-Bribery and Anti-Corruption
In order to avoid bribery and corruption in our daily operations, we are committed to conducting business with
integrity and complying with the Anti-Corruption Commission Act of Malaysia. We have also developed an
anti-bribery and anti-corruption (“ABAC”) committee and policy, as well as code of conduct and whistleblowing
policy to assist our employees in understanding their roles and responsibilities.
As of 31 December 2022, all our directors and employees had read, acknowledged and agreed to comply with
our ABAC policy. The following is the breakdown of the percentage of employees who have received ABAC
training within each employee category over the past three financial years:
FY2020 FY2021 FY2022

Management 32.52% 33.04% 25.71%
Non-Management 66.72% 63.15% 64.44%
Total 99.24% 96.19% 90.15%
We are pleased to report that there have been no incidents of corruption, discrimination, harassment, human
rights violations, forced labor or child labor for the past three financial years.


viii. Social / Supporting our community
Over the years, we have collaborated with non-governmental organizations, government agencies, and
educational institutions to support community-based programs and initiatives, including food donations and
fundraising campaigns.
In FY2022, we have invested RM79,423.52 in corporate social responsibility (“CSR”) activities across 266
organizations, an increase of 147% compared to FY2021. The following are the amounts invested in the
communities and the number of beneficiaries for the past three financial years:
FY2020 FY2021 FY2022

Amount invested in the communities (RM) 43,303.92 32,120.64 79,423.52
Number of beneficiaries 181 99 266
Furthermore, we have contributed to local economic growth by creating employment opportunities and
supporting local businesses that meet our standard requirements in the communities where we operate.
FY2020 FY2021 FY2022

Number of new local hires 229 129 165
Spending on local suppliers (%) 75.09 78.27 77.61
ix. Social / Quality and healthy food
Our crackers, biscuits and cookies are developed and manufactured only with healthy ingredients and high-
quality production processes as our primary focus is on providing products that are unrivaled in terms of
quality.
As an official recognition of our products’ quality excellence, we have received the International High Quality
Award by Monde Selection, Belgium from FY1996 to FY2022 and the Gold Quality Award since FY1994. It is
one of the world’s most prestigious awards with regards to product quality.
The Group has always kept abreast with worldwide health concerns. As part of our continuous effort in
producing healthier products, our research and development department is currently monitoring the use of only
ingredients that are free of partially hydrogenated oils (“PHOs”), including new and alternative ingredients.
Presence in social media
To provide positive customer experiences, we believe that listening to customers’ feedback and acting on them
is critical. The use of digital and social media platforms, such as Facebook and Instagram, allows us to increase
our brands’ visibility as well as actively engage with customers and stakeholders for feedback on our products.
This also allows us to gain a deeper understanding of customers’ preferences and market trends.
For the past three financial years, we have not received any substantiated complaints concerning breaches of
customer privacy or losses of customer data. We do not disclose or use personal customer information for any
purposes other than those agreed upon.


x. Social / Nutrition labelling
In order for our consumers to make informed purchasing decisions, we ensure that the product labeling is
comprehensive, accurate, and easily understood.
All of our products contain information concerning the ingredients, recommended daily allowances, nutritional
information per serving, storage instructions, expiration date and nutritional advice in five different languages:
Malay, English, Chinese, French and Arabic.
The Halal logo is also displayed clearly on all of our products’ packaging, making it easier for Muslim consumers
to determine which products best meet their requirements.
xi. Social / Food safety
To ensure that only the highest quality products are delivered to our customers, we adhere to a rigorous food
safety policy. From the procurement of ingredients to the research and development process prior to the
manufacturing and packaging process, and finally to the storage and delivery of the products, a well-trained
and experienced team is responsible for overseeing all aspects of the product’s life cycle.
In addition to rigorous quality control procedures, our processes are regularly inspected by independent third-
party auditors. Among the certifications that we have received, both locally and internationally, are:
1. FSSC 22000 Food Safety System Certification

2. ISO 22000:2018 Food Safety Management System Certification
3. ISO 9001:2015 Quality Management System Certification
4. Hazard Analysis Critical Control Point (“HACCP”) Certification
5. Good Manufacturing Practices (“GMP”) Certification
6. Safe Food Industry Responsibility (“MeSTI”) Certification
7. Halal Certification from the Department of Islamic Development Malaysia (“JAKIM”)
8. Halal Certification from the Halal Product Assurance Organizing Agency of Indonesia (“BPJPH”)
Moreover, our suppliers are evaluated on an annual basis based on their performance in terms of quality,
delivery, and customer service. Over the past three financial years, all active suppliers have participated in the
performance evaluation process and received an overall satisfaction rating of over 90%.

7. Key Performance Data
Sustainability is an integral part of our value chain and we tailor our sustainability framework to meet the requirements
of our markets. As part of our efforts to communicate effectively with our stakeholders and demonstrate accountability
to them, we report our sustainability performance on an annual basis, as well as continually achieve sustainability
milestones through feedback from our stakeholders and refinement of our business operations and processes. Our key
performance indicators are as follows:
GRI FY FY FY
Aspect Standards Details 2020 2021 2022
Economic
Performance (RM mil) 201-1 Direct economic value generated and 327 296 318
distributed
Performance 201-1 Total number of factories 2 2 2
Performance (RM mil) 201-1 Operating costs 272 259 283
Performance (RM mil) 201-1 Taxes 15 10 9
Performance (RM mil) 201-1 Net profit 40 27 26
Performance (%) 201-1 Return on equity 28.9 19.6 18.5
Performance (RM) 201-1 Earnings per share 0.050 0.034 0.033
Performance (RM) 201-1 Net dividends per share 0.060 0.025 0.030
Environment
Material 301-1 Materials used by weight 39 34 32

(thousand tons)
Material (tons) 301-3 Recycled packaging materials as scrap sales 662 550 472
Energy (mil kWh) 302-1 Energy consumption within the Group 31 27 27
Energy 302-3 Energy intensity 844 830 875

(kWh per ton)
Water (m3) 303-5 Water consumption within the Group 42,059 34,884 37,671

7. Key Performance Data (cont’d)
GRI FY FY FY
Aspect Standards Details 2020 2021 2022
Social
Supporting our 204-1 Proportion of spending on local suppliers 75.1 78.3 77.6
community (%)
Diversity and equal 205-3 Confirmed incidents of corruption and 0 0 0

opportunity actions taken
Diversity and equal 401-1 Employee turnover rate 2.2 1.5 1.8
opportunity (%)
Supporting our 401-1 Number of new local hires 229 129 165
community
Occupational health 403-9 Number of work-related fatalities 0 0 0

and safety
Occupational health 403-9 Number of accident cases 5 7 1

and safety
Occupational health 403-9 Lost time injury frequency rate 1.6 2.5 0.4
and safety (in million
man hours)
Training and 404-1 Average number of hours each employee 7.8 4.9 11.4
development spent in training each year
Diversity and equal 406-1 Incidents of discrimination and corrective 0 0 0

opportunity actions taken
Quality and 418-1 Substantiated complaints concerning 0 0 0

healthy food breaches of customer privacy and losses of
customer data

CG Overview Statement
Principle A - Board Leadership and Effectiveness
The Board recognises its role in realising the best interests of the shareholders and other stakeholders while enhancing
the financial performance of the Group. The Board believes that through good corporate governance, corporate
accountability shall be enhanced and thus long term shareholders’ values be realised. This CG Overview Statement
is prepared by applying Malaysia Code on Corporate Governance 2021 (“MCCG 2021”), Main Market Listing
Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and Companies Act
2016. The application of Practices set out in the MCCG 2021 for the financial year 2022 is disclosed in the CG Report
which can be downloaded at www.hsib.com.my.
During the year, the Board discharged its duties and responsibilities objectively as stated in the Board Charter. The Non-
Executive Chairman has discharged his duties and responsibilities and applied Practice 1.2 of MCCG 2021 for financial
year 2022.
In line with MCCG 2021 Practice 1.3, the roles and responsibilities of Chairman and Managing Director are separated.
The responsibility of Chairman is primarily to ensure that conduct and working of the Board is in an orderly and
effective manner whilst the Managing Director manages the daily running of business and implementation of Board
and management policies. The Managing Director is accountable for the profitable operation and strategic development
of the Group, and is obliged to refer major matters back to the Board.
Prior to Board meetings, the Company Secretary and management would provide agenda and board papers to the
Board members at least five (5) working days before the Board and Committee meetings. The board papers include but
not limit to, minutes of previous meeting, quarterly financial results, internal and external audit report(s), Enterprise
Risk Management reports, supporting management reports, consultant reports and directors’ interests. In addition,
the Board also receives qualitative information from relevant departments of the Group, as needs arise. The Company
Secretary helps the Board and Committees function effectively and in accordance with their terms of reference and
best practices. The Company Secretary advises the Board and Committee on its roles and responsibilities, corporate
disclosures and compliance with companies and securities regulations and Listing Requirements. Our Board members
ensure that the minutes of meetings accurately reflect the deliberations and decisions of the Board and Committee,
including whether any Director abstained from voting or deliberating on a particular matter.
Board Charter which sets out the structure, strategic intents and responsibilities of the Board as well as the whistleblowing
policy is published at www.hsib.com.my. The Company applied Practice 2.1 of MCCG 2021 in maintaining its Board
Charter. The Board Charter is reviewed periodically by the Board and as needs arise. The last review of the Board
Charter was on 10 November 2021.
The Company meets the Listing Requirements Chapter 15.02(1) and (2) by having one-third (1/3) of its Board
members being Independent Non-Executive Directors. This board structure provides an effective balance of corporate
accountability to the Group, the Independent Directors contribute their independent judgment and knowledge to the
management whilst the Executive Directors conduct their day-to-day duties. The Independent Non-Executive Directors
on the Board were elected with the objective of safeguarding the shareholders’ interests whilst contributing impartial
and objective judgment to the decision making process of the Board. Through these years, these Independent Non-
Executive Directors have provided invaluable advices to the Board and practised fair professional judgments while
considering corporate matters.

CG Overview Statement (cont’d)
Principle A - Board Leadership and Effectiveness (cont’d)
The Board assessed the independence of the Independent Non-Executive Directors by adopting the criteria used in
defining “independent directors” in Main Market Practice Note 13 and concluded that all the Independent Non-Executive
Directors continued to conduct and behave independently for the financial year ended 31 December 2022. Independence
criteria such as whether each of the Independent Non-Executive Directors is independent of the Company’s management
and free from any business or other relationship which could interfere with the exercise of independent judgment or the
ability to act in the best interest of the Company and shareholders, have all been considered and assessed. The Board is
of the view that the Independent Non-Executive Directors have remained independent and objective throughout their
years of services and most importantly, they discharged their duty with integrity and competence.
In financial year 2022, the Board has departed Practice 5.3 of MCCG 2021. It was stated in the Board Charter of the
Company that if tenure of the independent director exceeded a cumulative term of nine (9) years, the Board must justify
and seek annual shareholders’ approval through a two-tier voting process to retain this independent director. One (1)
Independent Non-Executive Director, namely Raja Khairul Anuar Bin Raja Mokhtar, has been with the Board for more
than nine (9) years and the Board holds the opinion that his independence has not been compromised or impaired in
any way. The Board noted that it was because of the cumulative years of being in the industry that gave the Independent
Non-Executive Director greater in-sight and in-depth knowledge of the Group and therefore contributed to the Board
more effectively and relevantly.
The Board strongly recommends the retention of this Independent Non-Executive Director who has served the Board
for more than nine (9) years and will be tabling the relevant Ordinary Resolutions to shareholders at the forthcoming
AGM.
The Board members possess professional expertise, industrial knowledge and working experience in various fields that
contribute effectively to the formulating as well as the achieving of corporate goals and strategic plans of the Group. The
terms of reference of the Board Committees clearly stated that all the committees have the authority to act on behalf of
the Board or to examine a particular issue and report back to the Board with recommendation.
The Company has embedded gender diversity in its corporate culture and maintained one-third (1/3) of its board
composition in opposite gender since the day it was listed. The Board considered its members composition as having
a healthy mix of genders, professional skills, working experience and age group and would continue to upkeep such
diversity. The diversity policy can be found at the company website (www.hsib.com.my).

Principle A - Board Leadership and Effectiveness (cont’d)
Seven (7) board meetings were conducted in the financial year 2022, discussing and reviewing quarterly and annual
financial results, internal audit reports, dividend proposals, risk management matters, tax matters, investment proposals
and considerations, corporate strategy and corporate exercises. The composition of the Board and the attendance of the
individual directors during the financial year ended 31 December 2022 are as follows:-
No. of meetings attended

(out of the total 7
Name of Director Designation meetings held)
Y. Bhg. Dato’ Keh (Kerk) Chu Koh Non-Executive Chairman 7/7

(resigned on 30/12/2022)
Kerk Chiew Siong Managing Director 7/7
Kerk Chian Tung (f) Executive Director 7/7
Teo Lee Teck Non-Independent Non-Executive Director 7/7
Kerk Kar Han Non-Independent Non-Executive Director 7/7
Kuo Liong Yok Non-Independent Non-Executive Director 7/7

(appointed on 01/01/2022)
Lim Poh Seong Independent Non-Executive Director 7/7
Raja Khairul Anuar Bin Raja Mokhtar Independent Non-Executive Director 7/7
Dr. Voon Yuen Hoong (f) Independent Non-Executive Director 4/4

Ho Wei Lih (f) Independent Non-Executive Director 4/4

Mazrina Binti Arifin (f) Senior Independent Non-Executive Director 3/3

Norita Binti Ja’afar (f) Independent Non-Executive Director 3/3

Principle B - Effective Audit and Risk Management
The Chairperson of Audit Committee member has been an Independent Director since this committee was first set up
and this requirement is part of the Terms of Reference of Audit Committee.
The Terms of Reference of the Audit Committee clearly specified that a cooling off period of at least three (3) years
needed to be fulfilled before a former partner of the external audit firm can be considered to be appointed as a member
of the Audit Committee.

Principle B - Effective Audit and Risk Management (cont’d)
The Audit Committee has the necessary knowledge about accounting and finance and demonstrates an appropriate
level of vigilance and scepticism towards detecting financial anomalies or irregularities in the financial statement and
comprehensive management information. The Audit Committee also probed the management and external auditors
on significant matters and ascertained whether the financial statements are consistent with operational and other
information known and acquired.
The Board is aware of the importance of establishing and maintaining a sound system in Risk Management and Internal
Control in the Company and its subsidiaries to safeguard shareholders’ interest and Group’s assets. Hence, the Group
started an Enterprise Risk Management (“ERM”) system based on an internationally recognised risk management
framework ISO 31000 in 2015. In ERM, the levels of risk tolerance were determined and reviewed periodically, key
business risks were identified, detected, assessed, minimised and monitored. Then, risk profiles of the individual
companies would be discussed, reviewed and updated every six (6) months.
Audit Committee and the Board reviewed and examined the effectiveness and efficiency of internal control system on
finance, production, sales, human resources, procurement and compliance; addressed any shortcomings in internal
control to enable timely rectification and improvement; reviewed existing internal policies, procedures and practices
with the objective of putting in place robust surveillance mechanisms to prevent operational abuse behaviour.
The engagement of internal auditors is one of the many ways of reviewing and assessing the effectiveness of the risk
management and internal control system of the Group. Both the Board and Management will rectify the weaknesses
detected by the internal auditors through either adopting the recommendations made by the internal auditors or
developing its own alternatives to eliminate such weaknesses. The role and function of the internal auditors are outlined
in the Audit Committee Report.
Principle C – Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders
The Annual Report, press release as well as disclosures and announcements to Bursa Securities, such as quarterly and
annual financial results are the primary means of communication between the Company and shareholders. The Board
acknowledges the importance of disseminating information adhering to the disclosure requirements of the Bursa
Securities to the shareholders on a timely basis and consequently ensures that the investors are well informed of any
major developments of the Group. Notice of the AGM is issued to the shareholders at least 28 days prior to the date of
AGM, in which separate resolutions to be proposed at the AGM for each distinct issue are provided.
The AGM serves as the primary forum to foster dialogue with shareholders. The Board noted that Section 195(1) of
the Companies Act 2016 requires the Chairperson of a meeting to allow a reasonable opportunity for shareholders at
the AGM to question, discuss, comment or make recommendation on the management of the Company and the Board
ensures that adequate time is allocated for the question and answer session so that shareholders can clarify matters in
relation to resolutions being proposed at the meeting as well as operational and corporate affairs. By applying Practice
13.2 of MCCG 2021, the Chairperson of the Board and the Committees are prepared to address questions from the floor
during the General Meetings. By complying with Paragraph 8.29(a) of the Listing Requirements, the Company has
facilitated electronic voting by poll and votes were scrutinised by independent scrutineers. Upon request, the Executive
Director will meet up with the investors, press and investment analysts, and disseminate information adhering to the
disclosure requirements of Bursa Securities.
In line with MCCG 2021, the Company has a corporate website which provides information on corporate and group
information, board charter, quarterly results and annual reports through a more user friendly and timely manner.

Principle C – Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders (cont’d)
Directors’ Remuneration
Fee and benefits payable to directors are subject to annual approval of shareholders during the Annual General Meeting.
Remuneration policy of the Group was developed in the year of 2019 and is subject to review periodically by the Board
of Directors. This policy is available on www.hsib.com.my.
Listed below is a summary of the aggregate remuneration package of the Directors received/receivable from the
Company and its subsidiaries for the financial year ended 31 December 2022, categorised into appropriate components.
Group
Benefits- Other
Fees Allowances Salaries Bonuses in-kind emoluments Total
RM RM RM RM RM RM RM
Executive
Kerk Chiew Siong 160,000 8,000 724,680 241,560 12,255 272,358 1,418,853
Kerk Chian Tung 90,000 5,600 388,320 129,440 - 167,974 781,334
Non-Executive
(but holding executive
position in subsidiaries):
Y. Bhg. Dato’ Keh

(Kerk) Chu Koh 159,758 8,000 724,680 241,560 19,455 272,358 1,425,811
Teo Lee Teck 160,000 8,000 391,140 130,380 8,920 221,308 919,748
Kerk Kar Han 160,000 8,500 351,840 117,280 14,272 215,277 867,169
Kuo Liong Yok 160,000 8,000 408,720 136,240 8,920 175,259 897,139
Non-Executive:
Lim Poh Seong 100,000 7,600 - - - - 107,600
Raja Khairul Anuar

Bin Raja Mokhtar 100,000 6,600 - - - - 106,600
Dr. Voon Yuen Hoong 75,269 4,500 - - - - 79,769
Ho Wei Lih 75,269 4,500 - - - - 79,769
Mazrina Binti Arifin 25,000 2,600 - - - - 27,600
Norita Binti Ja’afar 25,000 2,600 - - - - 27,600
TOTAL 1,290,296 74,500 2,989,380 996,460 63,822 1,324,534 6,738,992

Principle C – Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders (cont’d)
Directors’ Remuneration (cont’d)
Company
Other
Fees Allowances Salaries Bonuses emoluments Total
RM RM RM RM RM RM
Executive
Kerk Chiew Siong 90,000 5,600 - - - 95,600
Kerk Chian Tung 90,000 5,600 388,320 129,440 167,974 781,334
Non-Executive
(but holding executive
Y. Bhg. Dato’ Keh

(Kerk) Chu Koh 89,758 5,600 - - - 95,358

Teo Lee Teck 90,000 5,600 - - - 95,600
Kerk Kar Han 90,000 6,100 - - - 96,100
Kuo Liong Yok 90,000 5,600 - - - 95,600
Non-Executive:
-
Lim Poh Seong 100,000 7,600 - - - 107,600
Raja Khairul Anuar Bin

Raja Mokhtar 100,000 6,600 - - - 106,600
Dr. Voon Yuen Hoong 75,269 4,500 - - - 79,769
Ho Wei Lih 75,269 4,500 - - - 79,769
Mazrina Binti Arifin 25,000 2,600 - - - 27,600
Norita Binti Ja’afar 25,000 2,600 - - - 27,600
TOTAL 940,296 62,500 388,320 129,440 167,974 1,688,530

Directors’ Training
Directors are encouraged to attend any form of training to enhance their knowledge and expertise in relations to
the industry, laws and regulations, business environment and etc. To date, all existing Directors have attended the
Mandatory Accreditation Programme (“MAP”) and sufficient Continuing Education Programme (“CEP”) as required
by Bursa Securities. The Directors continue to attend relevant seminars and programmes to keep their knowledge and
expertise updated.
In 2022, training programmes attended by directors of the Company are as follows:-
Name of Directors Program Title Date of Program Organiser
Y.Bhg. Dato’ Keh • Environmental, Social And Governance (ESG) 09/04/2022 Kinaki Management
(Kerk) Chu Koh Consultants Sdn Bhd
Kerk Chiew Siong • Environmental, Social And Governance (ESG) 16/04/2022 Kinaki Management
Consultants Sdn Bhd
• MIRA Webinar: What Should Investor 17/08/2022 Malaysian Investor

Relations Know About Section 17A – Relations Association
MACC Act 2009
Teo Lee Teck • Environmental, Social And Governance (ESG) 09/04/2022 Kinaki Management
Consultants Sdn Bhd
Kerk Kar Han • Environmental, Social And Governance (ESG) 16/04/2022 Kinaki Management
Consultants Sdn Bhd
• MIRA Webinar: Everything Investor 26/04/2022 Malaysian Investor

Relations Managers Need To Know About Relations Association
ESG Reporting

MACC Act 2009
Kuo Liong Yok • Bursa Malaysia Mandatory Accreditation 15/03/2022 to Institute of Corporate
Programme (MAP) 17/03/2022 Directors Malaysia
• Environmental, Social And Governance (ESG) 09/04/2022 Kinaki Management

Consultants Sdn Bhd
• MIRA Webinar: Everything Investor Relations 26/04/2022 Malaysian Investor

Managers Need To Know About ESG Relations Association
Reporting

MACC Act 2009

Directors’ Training (cont’d)
Name of Directors Program Title Date of Program Organiser
Kerk Chian Tung (f) • MIA Webinar Series: Conduct of Directors 23/08/2022 Malaysian Institute of
and Common Breaches of Listing Accountants
Requirements
• The Corporate Governance Overview 17/10/2022 Malaysian Institute of

Statement, CG Report, Audit Committee Accountants
Report, and Statement on Risk Management &
Internal Control
Lim Poh Seong • Audit Oversight Board’s Conversation 07/04/2022 Securities

with Audit Committee Members of Listed Commission of
Companies Malaysia
• Virtual Tax Conference 2022 09/05/2022 Thannees Tax

Consulting Services
• Virtual MIA International Accountants 08/06/2022 & Malaysian Institute of

Conference 2022: Leading ESG, Charting 09/06/2022 Accountants
Sustainability
Ho Wei Lih (f) • Bursa Malaysia Mandatory Accreditation 06/04/2022 to Institute of Corporate
Dr Voon Yuen • MIRA Webinar: Everything Investor Relations 26/04/2022 Malaysian Investor
Hoong (f) Managers Need To Know About ESG Relations Association
Reporting
• Bursa Malaysia Mandatory Accreditation 21/06/2022 to Institute of Corporate

Raja Khairul Anuar • Webinar on The Audit Committee 19/10/2022 Malaysian Institute of
Bin Raja Mokhtar “Unpacking the roles of the Committee & Corporate Governance
honing its effectiveness in discharging its
responsibilities holistically”

Statement of Directors’ Responsibilities
in Relation to Financial Statements
The Directors are required to prepare financial statements for each financial year which give a true and fair view of the
state of affairs of the Company and of the Group as at the end of the financial year and of the income statement and cash
flows of the Company and the Group for the financial year. This financial statements of the Group and of the Company
are prepared in accordance with Malaysian Financial Reporting Standards, International Financial Report Standards,
the requirements of the Companies Act 2016 (“the Act”) and pursuant to Paragraph 15.26(a) of the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad.
In preparing the financial statements, the Directors have:-
• adopted appropriate accounting policies and applied them consistently;

• made reasonable and prudent judgements and estimates; and
• prepared the financial statements on a going concern basis.
The Directors are responsible for ensuring that the Company and the Group keep adequate accounting records that
disclose with reasonable accuracy the financial position of the Company and the Group, and hence enable them to
ensure that the financial statements comply with the requirements of the Act.
The Directors also have general responsibilities for taking reasonably available steps to safeguard the assets of the Group,
and to detect and prevent fraud and other irregularities.
This statement was approved by the Board on 8 March 2023.

Other Compliance Information
Utilisation of Proceeds
No proceeds were raised by the Company from any corporate proposal during the financial year.
Contracts Relating to Loan
There were no contracts relating to a loan by the Company and its subsidiaries in respect of the preceding terms.
Sanctions and Penalties
There were no sanctions or penalties imposed on the Company and its subsidiaries, Directors or Management by the
relevant regulatory bodies during the financial year.
Material Contracts
None of the Directors and major shareholders has any material contract with the Company and/or its subsidiaries
during the financial year.
Non-Audit Fee
The amount of non-audit fees paid or payable to the External Auditors or a firm or corporation affiliated to the auditors’
firm for the financial year ended 31 December 2022 are as follows:-
Group Company
Particular RM RM
Non-Audit Fees paid or payable to External Auditor

- Review of the Statement on Risk Management and Internal Control 6,000 6,000
Non-Audit Fees paid or payable to a firm or corporation affiliated to the auditors’ firm
- Taxation services 52,800 6,500

Audit Committee
This Audit Committee Report was prepared in accordance with Paragraph 15.15(1) and (2) of the Main Market Listing
Requirements (“LR”) and provided information as required under Paragraph 15.15(3) of the LR.
COMPOSITION
The Committee comprised four (4) members, all of whom are Independent Non-Executive Directors. Such composition
meets the requirement of Paragraph 15.09(1)(a) and Paragraph 15.10 of the LR. Dr. Voon Yuen Hoong and Lim Poh
Seong are fellow members of the Association of Chartered Certified Accountants (“ACCA”) and meet the requirements
of Paragraph 15.09(1)(c)(ii) of the LR. In financial year 2022, the members of the Committee and their respective
designations were as follows:-
► Dr. Voon Yuen Hoong (f) (appointed on 19/05/2022)
(Chairperson of Audit Committee, Independent Non-Executive Director)
► Raja Khairul Anuar Bin Raja Mokhtar
(Member, Independent Non-Executive Director)
► Lim Poh Seong
► Ho Wei Lih (f) (appointed on 19/05/2022)
► Norita Binti Ja’afar (f) (resigned on 31/03/2022)
(Chairperson of Audit Committee, Independent Non-Executive Director)
► Mazrina Binti Arifin (f) (resigned on 31/03/2022)
(Member, Senior Independent Non-Executive Director)
ACTIVITIES DURING THE YEAR

Meetings
The Audit Committee meets regularly, with six (6) meetings held during the financial year ended 31 December 2022.
Prior to each Audit Committee meeting, a full set of Audit Committee papers and due notice of issues to be discussed
are given on a timely basis. All meetings are attended with the presence of Company Secretary whereby all proceedings
and conclusion from the Audit Committee meetings are minuted and signed by the Chairperson. The External Auditors
and Group Financial Controller were invited to attend these meetings to advise and clarify the accounting issues and
company matters. Chairperson of the Audit Committee maintained a constant flow of communication with Chairman
of the Board, Managing Director, Group Financial Controller, Head of External and Internal Auditors, in order to be
kept informed and updated with matters affecting the Group.
The dates and attendees of the meetings held are stated below:-
Total meetings
Attended by Dates of Meeting attended
16 Feb 10 Mar 19 May 20 Jun 10Aug 9 Nov
2022 2022 2022 2022 2022 2022
Dr. Voon Yuen Hoong (f) — — —    3/3
Raja Khairul Anuar Bin Raja Mokhtar       6/6
Lim Poh Seong       6/6
Ho Wei Lih (f) — — —    3/3
Norita Binti Ja’afar (f) (resigned on 31/03/2022)   — — — — 2/2
Mazrina Binti Arifin (f) (resigned on 31/03/2022)   — — — — 2/2

Audit Committee (cont’d)
The Audit Committee carried out the following activities during the financial year:-
o Reviewed the quarterly unaudited financial reports before recommending them to the Board of Directors for
subsequent consideration and approval.
o Reviewed the audited financial statements before submitting them to the Board, ensuring that the financial
statements were prepared in accordance with the applicable approved accounting standards and provisions of the
Companies Act 2016.
o Evaluated the performance of the External Auditors and made recommendations on their appointment to the Board.
o Discussed and attended to the key aspects of business operations that would affect the profitability and growth of
the Company and its subsidiaries.
o Reviewed the risk management and internal control systems of the Group for the year.
o Reviewed Internal Audit reports by outsourced Internal Auditors to ensure the effectiveness of internal controls.
o Met with External Auditors, without the presence of management to discuss financial issues and other related
matters thereof.
o Reviewed the quarterly management reports, which provided the detailed breakdown of income statements of the
three subsidiaries, revenue analysis, principal markets of manufactured products, analysis of sales outlets, production
output and capacity, etc.
o Reviewed and discussed Related Party Transactions (“RPT”) and Recurrent Related Party Transactions (“RRPT”)
with the Group Financial Controller, the External Auditors and the Company Secretary, to ascertain if the transactions
are conducted at arm’s length and on normal commercial terms, and such transactions are not detrimental to the
interest of minority shareholders.
Duties and responsibilities of the Committee were discharged according to its Terms of Reference.
Internal Audit activities during the year
Internal audit function was conducted by an outsourced professional firm with an objective that independent feedback
and reviews will be provided to the Audit Committee and subsequently the Board of Directors. The Audit Committee
reviewed through the findings of the internal auditors to ensure that any major weaknesses are recognised and rectified
on a timely basis and an effective and efficient risk management and internal control systems are maintained.
Two (2) internal audit reports were provided to the Audit Committee this year. The internal auditors reported on their
findings, recommended corrective measures to be taken by the management and the management responses thereto.
During the financial year, there was no material internal control weakness that would have resulted in any significant
loss to the Group.
Further review on internal control system was also done by the Audit Committee through discussion with relevant
management personnel during the Board meeting whereby other concerns were addressed.

Board Committee
Nomination Committee
All the three (3) Nomination Committee members appointed are Independent Non-Executive Directors and they are
namely:-
• Ho Wei Lih (f)

(Chairperson of Nomination Committee, Independent Non-Executive Director)
• Lim Poh Seong
• Dr. Voon Yuen Hoong (f)
• Mazrina Binti Arifin (f)

(Chairperson of Nomination Committee, Senior Independent Non-Executive Director)
• Norita Binti Ja’afar (f)
The Nomination Committee is responsible for:-
o Reviewing composition of the Board and making recommendation on the appointment of new Director and Board
Committees member to the Board.
o Choosing suitable candidates for the Board and Board Committees by taking into consideration the recommendations
from existing board members, management or shareholders and/or sourcing from a directors’ registry and open
advertisements or engaging independent search firms. The Committee will provide explanation if a director is
chosen solely based on recommendations from directors, management or shareholders.
o Conducting annual review on the mix of skills, experience, core competencies, integrity and time commitment of
the Directors, in order to determine if the Directors have effectively discharged their duties.
o Reviewing on an annual basis the appropriate balance and size of the Board for determination of the number and
suitability of Directors on the Board.
o Recommending suitable orientation, educational and training programmes to continuously train and equip the
existing and new Directors.
o Assessing the effectiveness of the Board, the Board Committees and the contribution of each individual director.
o Reviewing and assessing the gender diversity of the Board.
o Reviewing the succession plan of the Board.
o Assessing and recommending to the Board, the continuation of terms of office of Independent Directors while
applying MCCG 2021.
The Committee may use the services of professional recruitment companies to source for the appropriate candidates for
directorship. In carrying out its duties and responsibilities, the Nomination Committee will basically have full, free and
unrestricted access to the Company’s records, properties and personnel.

Board Committee (cont’d)
Nomination Committee (cont’d)
Nomination Committee conducts annual assessment on the effectiveness of the Board as a whole, taking into
consideration the contributions from the Board Committees and each individual director, including Independent Non-
Executive Directors as well as the Managing Director. These assessments are properly documented. The Board has been
maintaining diversity of gender, ethnicity and age since listed and has four female directors on the Board.
During the financial year, the Committee convened two (2) meetings, one on 23 February 2022 where Lim Poh Seong,
Mazrina Binti Arifin and Norita Binti Ja’afar attended and the other one on 19 December 2022 with the presence of Ho
Wei Lih, Lim Poh Seong and Dr. Voon Yuen Hoong.
Remuneration Committee
All of the Committee members appointed are Non-Executive Directors. Members of the Remuneration Committee are
namely:-
• Raja Khairul Anuar Bin Raja Mokhtar

(Chairperson of Remuneration Committee, Independent Non-Executive Director)
• Lim Poh Seong
• Kerk Kar Han
(Member, Non-Independent Non-Executive Director)
The Remuneration Committee is responsible for:-
o Assessing the performance and commitment of the Group’s Directors and senior management officers and ensuring
their remuneration package reflects their involvements, responsibilities undertaken, contributions and levels of
performance for the year.
o Reviewing and approving recommendations of the management on the salary increment, bonus and other benefits of
the Group’s Directors and senior management officers, which should be made based on the individual’s performance
and responsibilities.
o Establishing and reviewing the component parts of remuneration by referring closely to the performance, business
strategy and long-term objectives of the Company. Subsequently, Remuneration Committee will align rewards to
individual performance and assess the needs of the Company for talent at all relevant levels at a particular time.
o Recommending to the Board on the appropriateness of the remuneration package of the Directors and senior
management officers based on their assessment.
The individual Directors, including Executive Directors and Non-Executive Directors (including the Non-Executive
Chairman) should abstain from the deliberations and voting on decisions in respect of their own remuneration package
and entitlement.
In carrying out its duties and responsibilities, the Remuneration Committee shall have full, free and unrestricted access
to the Group’s records, properties and personnel, information and advices both from within the Group and externally
as it deems necessary or appropriate in accordance with the procedures determined by the Board. The Remuneration
Committee may, if it thinks fit, engage external advisers with relevant experience and expertise to consult on the
appropriateness of the remuneration packages of Board members as well as senior management officers.
One (1) meeting was held on 13 December 2022 with full attendance.

Statement on Risk Management &
Internal Control
Introduction
The Board of Directors (“the Board”) is pleased to present the Statement on Risk Management and Internal Control
(“this Statement”) of Hup Seng Industries Berhad (“the Company”) and its subsidiaries, namely Hup Seng Perusahaan
Makanan (M) Sdn. Bhd., Hup Seng Hoon Yong Brothers Sdn. Bhd. and In-Comix Food Industries Sdn. Bhd. (hereinafter
collectively referred to as “Hup Seng Group”) which outlines the nature and scope of the risk management and internal
control of Hup Seng Group for the financial year ended 31 December 2022 and up to the date of approval of this Statement
for inclusion in the Annual Report.
This Statement has been prepared pursuant to Section 246 (1) of the Companies Act 2016, Paragraph 15.26 (b) of Bursa
Malaysia Securities Berhad (“Bursa Securities”)’s Main Market Listing Requirements (“Listing Requirements”), and
guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“the
Guidelines”) and Principle B of the Malaysian Code on Corporate Governance 2021 (“MCCG 2021”).
Board Responsibility
The Board acknowledges its responsibilities in maintaining a sound system of risk management and internal control to
safeguard shareholders’ investments and Hup Seng Group’s assets as well as reviewing its adequacy and effectiveness.
In view of the limitations that are inherent in any system of risk management and internal control, the system is designed
to manage and mitigate rather than eliminate the risk of failure to achieve Hup Seng Group’s business objectives. Thus,
the system of risk management and internal control can only provide reasonable, but not absolute assurance against
material misstatement or loss.
Risk Management Process
A framework for Enterprise Risk Management (“ERM”) has been established in accordance with the international
standard for risk management, ISO 31000:2018, with the objective of setting clear guidelines in relation to the level of
risks acceptable to Hup Seng Group. Moreover, the framework is designed to ensure effective risk management and
promote the achievement of Hup Seng Group’s objectives.
Hup Seng Group has in place an on-going process for identifying, evaluating and managing the principal risks that may
affect the attainment of Hup Seng Group’s business objectives. In addition, the directors, key management personnel
and department heads of each subsidiary company have clear accountabilities to:
• Continuously identify, evaluate and manage risks relevant to the business in achieving Hup Seng Group’s business
objectives;
• Develop, implement and monitor the risk management framework in accordance with Hup Seng Group’s strategic
vision and overall risk appetite; and
• Identify changes in existing and emerging risks, initiate appropriate actions and promptly bring these to the attention
of the Risk Management Committee (“RMC”) and the Board.

Statement on Risk Management & Internal Control (cont’d)
Risk Management Process (cont’d)
The Board is assisted by the RMC, which is led by an Independent Non-Executive Director in overseeing Hup Seng
Group’s risk management efforts. The RMC comprises the following members, with half of the members are Independent
Non-Executive Directors:-
Lim Poh Seong Chairman, Independent Non-Executive Director
Raja Khairul Anuar Bin Raja Mokhtar Member, Independent Non-Executive Director
Dr. Voon Yuen Hoong Member, Independent Non-Executive Director
Ho Wei Lih Member, Independent Non-Executive Director
Teo Lee Teck Member, Chairman of Risk Working Committee (“RWC”),

Non-Independent Non-Executive Director
Kerk Kar Han Member, Non-Independent Non-Executive Director
Kuo Liong Yok Member, Non-Independent Non-Executive Director
Quek Ah Kow Member, Group Financial Controller
During the financial year under review, the professional consultant that had been engaged by the Company in the
previous financial year conducted follow-up reviews on the new risks identified in Hup Seng Group’s earlier risk registers,
with nearly all of the management actions were successfully implemented. Furthermore, the RWC and department
heads continue to review, discuss and update the risk registers of Hup Seng Group on a biannual basis. The risk profiles
are divided into four major categories: strategic, financial, operational and compliance, which are regularly updated
with appropriate mitigation plans and presented to the RMC for approval by the RWC.
The RMC held one meeting on 10 August 2022 with full attendance.

Internal Audit Function
The responsibility for reviewing the adequacy and effectiveness of the internal control system has been delegated by the
Board to the Audit Committee (“AC”). In turn, the AC assesses the adequacy and effectiveness of the internal control
system through independent reviews performed by the internal audit function, external auditors and management.
In order to ensure independence and avoid conflicts of interest, the internal audit function of Hup Seng Group is
outsourced to a professional services firm that reports directly to the AC. The scope of internal audit is determined
through inputs provided by the AC as well as assessments of Hup Seng Group’s risk management and internal control
practices. The internal auditors independently review the system of risk management and internal controls implemented
by management within Hup Seng Group and report their findings and recommendations to the AC.
During the financial year ended 31 December 2022, the internal auditors executed the approved audit plan and performed
internal control review for the following subsidiary company and functions:-
1. Procurement – cost management for Hup Seng Perusahaan Makanan (M) Sdn. Bhd.
• Material cost planning and target;
• Sourcing strategy for key material;
• Approval of ordering process;
• Monitoring of material cost; and
• Detection, resolution and reporting to management.
2. Production management for Hup Seng Perusahaan Makanan (M) Sdn. Bhd.
• Production planning;
• Production execution;
• Detection, resolution and reporting to management of production shortfalls and problems; and
• Monitoring of production plant efficiency and performance.
The AC deliberated on the findings and recommendations for improvement that were presented by the internal auditors
at its quarterly meetings in November 2022 and February 2023. Furthermore, the AC was satisfied with Hup Seng Group’s
overall risk management and internal control system, as well as the recommendations for addressing the internal audit
findings. The minutes of the AC meetings were also made available to the Board for their attention and further action,
if necessary.
The cost incurred for the internal audit function for the financial year ended 31 December 2022 amounted to RM40,000.

Key Elements of Internal Control System
Hup Seng Group’s internal control system also includes the following key elements:-
► An organisation structure which formally defines lines of responsibility and delegation of authority.
► Policies and procedures of all operating units within Hup Seng Group are documented in the Standard Practice
Instructions.
► Key functions such as corporate affairs, finance, tax, treasury and human resources are controlled centrally.
► Roles and responsibilities are properly segregated.
► Annual budgeting and target setting process which includes forecasts for each operating unit with detailed reviews
at all levels of operations.
► Monetary limits are set up at different levels of authorised positions so that unauthorised transactions can be
minimised.
► Effective reporting system in place to ensure timely generation of financial information for management review.
► Operating units meetings are conducted regularly to review financial performance, business development and
deliberate on management issues.
► Managing Director and Executive Directors of Hup Seng Group meet with senior management/all operating units
to discuss and resolve key operational, financial and other key management issues. Significant issues are highlighted
and discussed at Board meetings.
► The AC has access to external auditors and their reports and meets with them to discuss on their findings and
reports.
► Hup Seng Group has a policy on financial limits and approving authority for its operating and capital expenditure.
Whistleblowing Policy
Hup Seng Group has a whistleblowing policy, which provides an avenue for directors, employees, as well as external
parties such as suppliers, customers and other stakeholders to raise genuine concerns and/or to disclose suspected and/
or known improprieties, malpractices and misconduct in a safe and confidential manner.
The whistleblowing policy is available for reference at the Company’s website at https://www.hsib.com.my.

Anti-Bribery and Anti-Corruption Policy
Hup Seng Group takes a zero-tolerance stance towards all forms of bribery and corruption in its daily operations, and
is committed to conducting its business in an ethical, fair and transparent manner in compliance with Section 17A of
the Malaysian Anti-Corruption Commission Act (“MACC Act”) 2009.
The Anti-Bribery and Anti-Corruption (“ABAC”) Committee oversees Hup Seng Group’s ABAC activities and reports
to the Company’s Audit Committee and Directors. Furthermore, the ABAC Committee meets annually to review the
adequacy and effectiveness of its control measures and ensure that all directors and employees exercise professionalism
and integrity while performing their duties.
The ABAC Policy, Code of Conduct and Third-Party Code of Conduct can be found on the Company’s website at
https://www.hsib.com.my.
Assurance Provided by Managing Director and Group Financial Controller
The Board has identified the Managing Director as the CEO of the Company, as well as the Group Financial Controller
as the Chief Financial Officer (“CFO”) of the Company since 2013.
The Board has also obtained assurance from the Managing Director and CFO that the Group’s risk management and
internal control system is operating adequately and effectively, in all material aspects.
Conclusion
During the financial year under review, the Board is of the view that Hup Seng Group’s risk management and internal
controls are adequate for achieving its business objectives and will maintain an ongoing commitment to continue
taking appropriate measures to enhance Hup Seng Group’s risk management and internal control environment and
processes.
There were no material losses arising from any inadequacy or failure of the risk management and internal control
system which would require a separate disclosure in the Company’s Annual Report.
Review of the Statement by External Auditors
Pursuant to Paragraph 15.23 of the Listing Requirements of Bursa Securities, the external auditors have reviewed this
Statement in accordance with the scope set out in the Malaysian Approved Standard on Assurance Engagements, ISAE
3000 (Revised): Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, as well as
Audit and Assurance Practice Guide 3 issued by the Malaysian Institute of Accountants (“MIA”), which does not require
the external auditors to form an opinion on the adequacy and effectiveness of Hup Seng Group’s risk management and
internal control systems.

Financial Statements
59 64 64
Directors’ Report Statement by Directors Statutory Declaration
65 70 72
Independent Auditors’ Report Statements of Statements of
Comprehensive Income Financial Position
74 76 78
Statements of Changes in Equity Statements of Cash Flows Notes to the
Financial Statements

Directors’ Report
The Directors have pleasure in presenting their report together with the audited financial statements of the Group and
of the Company for the financial year ended 31 December 2022.
Principal activities
The principal activity of the Company is investment holding.
The principal activities of the subsidiaries are manufacture and sales of biscuits and coffee mix, and dealers in biscuits,
confectionery and other foodstuff.
Results
Group Company
RM RM
Profit net of tax 26,080,914 14,403,200

Profit net of tax attributable to owners of the parent 26,080,914 14,403,200
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed
in the financial statements.
In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year
were not substantially affected by any item, transaction or event of a material and unusual nature.
Dividends
The amount of dividends paid by the Company since 31 December 2021 were as follows:

RM
In respect of the financial year ended 31 December 2021 as reported in the

Directors’ report of that year:

Second Interim single-tier dividend of 1 sen on 800,000,000 ordinary shares,
declared on 28 February 2022 and paid on 5 April 2022 8,000,000
In respect of the financial year ended 31 December 2022:

First Interim single-tier dividend of 1 sen on 800,000,000 ordinary shares,
declared on 29 August 2022 and paid on 7 October 2022 8,000,000
Second Interim single-tier dividend of 1 sen on 800,000,000 ordinary shares,
declared on 23 November 2022 and paid on 29 December 2022 8,000,000
24,000,000
On 28 February 2023, the Directors declared a third interim single-tier dividend of 1 sen in respect of the financial
year ended 31 December 2022 on 800,000,000 ordinary shares, amounting to a dividend payable of RM8,000,000. Such
dividend will be payable on 5 April 2023.

Directors’ Report (cont’d)
Directors
The names of the Directors of the Company in office since the beginning of the financial year to the date of this report are:

Y.Bhg. Dato’ Keh (Kerk) Chu Koh** (Chairman)
Resigned on 30 December 2022
Kerk Chiew Siong** (Managing Director)
Kerk Chian Tung (Executive Director)
Teo Lee Teck** (Non Independent Non-Executive Director)
Kerk Kar Han** (Non Independent Non-Executive Director)
Norita Binti Ja’afar (Independent Non-Executive Director)
Resigned on 31 March 2022
Mazrina Binti Arifin (Senior Independent Non-Executive Director)
Resigned on 31 March 2022
Raja Khairul Anuar Bin Raja Mokhtar (Independent Non-Executive Director)
Lim Poh Seong (Independent Non-Executive Director)
Kuo Liong Yok** (Non Independent Non-Executive Director)
Appointed on 1 January 2022
Kerk Shiang Yih** (Non Independent Non-Executive Director)
Appointed on 1 March 2023
Voon Yuen Hoong (Independent Non-Executive Director)
Ho Wei Lih (Independent Non-Executive Director)
** These directors are also directors of the Company’s subsidiaries.
The names of the Directors of the Company’s subsidiaries in office since the beginning of the financial year to the date
of this report (not including those directors listed above) are:
Y. Bhg. Dato’ Keh (Kerk) Chu Koh

Kuo Chee Ching
Kuo Chee Joo
Teo Lay Gak
Kuo Chee Yoong
Kerk Han Meng
Kerk Ke Yee

Directors’ benefits
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement, to which
the Company was a party, whereby the Directors might acquire benefits by means of the acquisition of shares in, or
debentures of the Company or any other body corporate.
Since the end of the previous financial year, no Director has received or become entitled to receive benefits (other than
benefits included in the aggregate amount of emoluments received or due and receivable by the Directors 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 any Director or with a firm of which he/she is a member, or with a company in which he/she has a substantial
financial interest, except as disclosed in Note 22 to the financial statements.
The directors’ benefits are as follows:
Group Company
RM RM
Salaries and bonuses 6,461,600 517,760

Other emoluments 1,436,487 157,102
Defined contribution plan 930,382 73,372
Fees 1,780,296 940,296

Benefits-in-kind 117,342 -
10,726,107 1,688,530
Directors and Officers indemnity and insurance cost

During the financial year, the directors and officers of the Company are covered for the total amount of indemnity
coverage of RM15,000,000, and insurance premium paid for directors and officers of the Company is RM17,100.
Directors’ interests
According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in
shares in the Company and its related corporations during the financial year were as follows:
Number of Ordinary Shares
The Company 1 January 2022 Acquired Sold 31 December 2022
Direct interest
Teo Lee Teck 5,160,000 - - 5,160,000

Kerk Chian Tung 11,333,333 - - 11,333,333
Kerk Kar Han 6,446,666 - - 6,446,666
Kerk Chiew Siong 1,333,333 - - 1,333,333
Kuo Liong Yok** 4,133,333 100,000 - 4,233,333
Deemed interest
Teo Lee Teck 533,333 - - 533,333 *

Kerk Kar Han 500,000 - - 500,000 *
Kerk Chiew Siong 11,373,333 - - 11,373,333 *
Kuo Liong Yok 3,316,666 - - 3,316,666 *

Directors’ interests (cont’d)
Number of Ordinary Shares
Holding company 1 January 2022 Acquired Sold 31 December 2022

HSB Group Sdn. Bhd.
Direct interest
Kerk Chiew Siong 2,856,871 - - 2,856,871

Teo Lee Teck 2,150,103 - - 2,150,103
Kerk Kar Han 2,194,192 - - 2,194,192
Kerk Chian Tung 1,714,482 - - 1,714,482
Kuo Liong Yok** 1,248,912 33,360 - 1,282,272
Deemed interest
Kerk Chiew Siong 900,000 - - 900,000 *
* Deemed interested by virtue of their interests pursuant to Section 59(11)(c) of the Companies Act 2016.
** Kuo Liong Yok inherited 100,000 shares of Hup Seng Industries Berhad and 33,360 shares of HSB Group Sdn Bhd
from his deceased father in 2022.

Teo Lee Teck, Kerk Chian Tung, Kerk Kar Han, Kerk Chiew Siong and Kuo Liong Yok, by virtue of their interests in
the Company, are deemed interested in the shares of the subsidiary companies to the extent that the Company has an
interest. The other Directors in office at the end of the financial year had no interest in shares in the Company and its
related corporations during the financial year.
Holding company

The holding company is HSB Group Sdn. Bhd., which is incorporated and domiciled in Malaysia.
Other statutory information

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the
Company were made out, the Directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
allowance for doubtful debts and satisfied themselves that all known bad debts have been written off and
adequate allowance had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records
in the ordinary course of business have been written down to an amount which they might be expected so to
realise.
(b) At the date of this report, the Directors are not aware of any circumstances which would render:
(i) the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial
statements of the Group and of the Company inadequate to any substantial extent; and
(ii) the values attributed to the current assets in the financial statements of the Group and of the Company
misleading.

Other statutory information (cont’d)

(c) 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.

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

(e) At the date of this report, there does not exist:
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year
which secures the liabilities of any other person; or

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

(f) In the opinion of the Directors:

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

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the
financial year and the date of this report which is likely to affect substantially the results of the operations of
the Group and of the Company for the financial year in which this report is made.
Auditors
The auditors, Ernst & Young PLT, have expressed their willingness to continue in office.
Auditors’ remuneration is as follows:
Group Company
RM RM
Ernst & Young PLT
Statutory audit
- Current year 167,000 47,000
- Underprovision in prior year 18,000 18,000
Other services 6,000 6,000

191,000 71,000

Signed on behalf of the Board in accordance with a resolution of the Directors dated 8 March 2023.
Kerk Chiew Siong Kerk Kar Han

Statement by Directors
Pursuant to Section 251(2) of the Companies Act 2016
We, Kerk Chiew Siong and Kerk Kar Han, being two of the Directors of Hup Seng Industries Berhad, do hereby state
that, in the opinion of the Directors, the accompanying financial statements set out on pages 70 to 126 are drawn up
in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group
and of the Company as at 31 December 2022 and of their financial performance and cash flows for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the Directors dated 8 March 2023.
Kerk Chiew Siong Kerk Kar Han
Statutory Declaration
Pursuant to Section 251(1)(b) of the Companies Act 2016
I, Quek Ah Kow, being the officer primarily responsible for the financial management of Hup Seng Industries Berhad,
do solemnly and sincerely declare that the financial statements set out on pages 70 to 126 are in my opinion correct,
and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the
Statutory Declarations Act, 1960.
Subscribed and solemnly declared )

by the abovenamed Quek Ah Kow )
at Batu Pahat in the State of Johor )
Darul Ta’zim on 8 March 2023 ) Quek Ah Kow
Before me,
Chiang Ee Chin (J247)

Commissioner of Oaths

Independent Auditors’ Report
to the members of Hup Seng Industries Berhad (Incorporated in Malaysia)
Report on the audit of the financial statements

Opinion
We have audited the financial statements of Hup Seng Industries Berhad, which comprise the statements of financial
position as at 31 December 2022 of the Group and of the Company, and the statements of comprehensive income,
statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 70 to
126.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group
and of the Company as at 31 December 2022, and of their financial performance and their cash flows for the year then
ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and
the requirements of the Companies Act 2016 in Malaysia.
Basis for opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit
of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Independence and other ethical responsibilities
We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct
and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Code of Ethics for Professional
Accountants (including International Independence Standards) (“IESBA Code”), and we have fulfilled our other ethical
responsibilities in accordance with the By-Laws and the IESBA Code.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the Group and of the Company for the current year. We have determined that there are no key
audit matters to communicate in our report on financial statements of the Company. The key audit matter for the audit
of the financial statements of the Group is described below. This matter was addressed in the context of our audit of the
financial statements of the Group as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on this matter. For the matter below, our description of how our audit addressed the matter is provided in that
context.
We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the financial statements
section of our report, including in relation to this matter. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of
our audit procedures, including the procedures performed to address the matter below, provide the basis of our audit
opinion on the accompanying financial statements.

Independent Auditors’ Report (cont’d)
Report on the audit of the financial statements (cont’d)
Key audit matters (cont’d)
Revenue recognition
The Group recognised revenue from sale of goods amounting to approximately RM318.19 million during the year. Given
the nature of the operations of the Group, we identified revenue recognition in respect of sale of goods to be an area of
audit focus as we consider the high volume of transactions for numerous types of finished goods produced and traded by
the Group to be a possible cause of higher risk of material misstatements in respect of the timing and amount of revenue
recognised. Furthermore, the key performance indicators for the key management personnel are measured based on
the financial performance of the Group (revenue is one of the key determinants of the overall financial performance).
Specifically, we focused our audit efforts to determine the possibility of overstatement of revenue.
In addressing this risk, we tested the Group’s internal controls over the timing and amount of revenue recognised. We
also inspected the terms of significant sales transactions to determine the transaction price and the point of customer
obtains control of the goods and assessed whether revenue was recognised in accordance with the terms. In addition, we
inspected documents which evidenced the delivery of goods to customers. We also focused on testing the recording of
sales transactions close to the year end, including credit notes issued after year end, to establish whether the transactions
were recorded in the correct accounting period. Using data analytics, we performed correlation analysis between
revenue, trade receivables and cash and bank balances.
The notes relating to revenue are disclosed in Note 2.20, Note 3.1 and Note 4 to the financial statements.
Information other than the financial statements and auditors’ report thereon
The directors of the Company are responsible for the other information. The other information comprises the Directors’
Report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon,
which we obtained prior to the date of this auditors’ report, and the Annual Report, which is expected to be made
available to us after the date of this auditors’ report.
Our opinion on the financial statements of the Group and of the Company does not cover the other information and we
do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to
read the other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
When we read the remaining other information included in the Annual Report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors of the Company and take appropriate
action.


Responsibilities of the directors for the financial statements
The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company
that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial
Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible
for such internal control as the directors determine is necessary to enable the preparation of financial statements of the
Group and of the Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the
Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the
Company, as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing, we exercise professional judgement and maintain professional skepticism throughout the planning and
performance of the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements of the Group and of the
Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s and the Company’s internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by directors.


Auditor’s responsibilities for the audit of the financial statements (cont’d)
- Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures
in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report.
However, future events or conditions may cause the Group or the Company to cease to continue as a going
concern.
- Evaluate the overall presentation, structure and content of the financial statements of the Group and of the
Company, including the disclosures, and whether the financial statements of the Group and of the Company
represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial statements of the Group. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financial statements of the Group and of the Company of the current year and are therefore the key audit
matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.

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

202006000003 (LLP0022760-LCA) & AF 0039 02983/03/2024 J
Chartered Accountants Chartered Accountant

Johor Bahru, Malaysia
Date: 8 March 2023

Statements of Comprehensive Income
For the financial year ended 31 December 2022
Group

Note 2022 2021
RM RM
Revenue from contracts with customer 4 318,194,335 295,832,845

Cost of sales 5 (239,911,882) (214,159,313)

Gross profit 78,282,453 81,673,532
Other items of income
Interest income 1,214,232 1,060,334
Other income 1,717,330 1,486,788
Other items of expense
Administrative expenses (18,364,276) (18,614,834)
Selling and marketing expenses (27,382,803) (28,286,383)
Finance cost (25,782) (26,972)

Profit before tax 6 35,441,154 37,292,465
Income tax expense 9 (9,360,240) (10,052,461)

Profit net of tax, representing total comprehensive
income for the year 26,080,914 27,240,004

Profit net of tax attributable to:
Owners of the parent 26,080,914 27,240,004

Total comprehensive income attributable to:

Earnings per share attributable
to owners of the parent (sen per share):
Basic 10 3.26 3.41

Diluted 10 3.26 3.41
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

Statements of Comprehensive Income (cont’d)
Company
Note 2022 2021
RM RM
Gross dividends from subsidiaries 16,032,000 23,209,000

Interest income 650,406 543,497

Revenue 16,682,406 23,752,497
Other income 400 -

Reversal of/(impairment loss) on investment in a subsidiary 600,000 (1,400,000)
Administrative expenses (2,723,979) (3,420,418)
Finance cost (2,653) (3,325)
Profit before tax 6 14,556,174 18,928,754

Income tax expense 9 (152,974) (103,130)
Profit net of tax, representing total comprehensive

income for the year 14,403,200 18,825,624

Profit net of tax attributable to:

Total comprehensive income attributable to:

Statements of Financial Position
As at 31 December 2022
Group
Note 2022 2021
RM RM
Assets
Non-current assets
Property, plant and equipment 11 72,670,982 72,754,840
Investment properties 12 1,273,740 1,337,086
Right-of-use assets 13(a) 5,258,099 5,554,109
Deferred tax assets 19 317,688 509,661
79,520,509 80,155,696

Current assets
Inventories 15 29,941,476 28,211,902
Trade and other receivables 16 40,168,825 31,614,935
Prepayments 763,206 477,672
Cash and bank balances 17 62,441,932 66,693,256

133,315,439 126,997,765
Total assets 212,835,948 207,153,461
Equity and liabilities

Current liabilities
Trade and other payables 18 58,319,651 56,341,109
Lease liabilities 13(b) 301,159 238,138
Refund liabilities 4 2,752,283 2,088,702
Income tax payable 3,510,174 2,222,237
64,883,267 60,890,186
Net current assets 68,432,172 66,107,579

Non-current liabilities
Deferred tax liabilities 19 6,661,188 6,712,113
Other payable 18 - 205,411
6,851,931 7,243,439
Total liabilities 71,735,198 68,133,625

Equity attributable to owners of the parent
Share capital 20 80,000,000 80,000,000
Retained earnings 21 61,100,750 59,019,836

Total equity 141,100,750 139,019,836

Total equity and liabilities 212,835,948 207,153,461

Statements of Financial Position (cont’d)
As at 31 December 2022
Company
Note 2022 2021
RM RM
Assets
Non-current assets
Property, plant and equipment 11 6,136 6,020
Investment in subsidiaries 14 52,386,703 51,786,703
Right-of-use assets 13(a) 60,294 81,640
Deferred tax assets 19 11,691 11,691

52,464,824 51,886,054

Current assets
Trade and other receivables 16 55,663 43,354
Prepayments 5,450 6,038
Dividend receivable from subsidiaries - 10,491,000
Cash and bank balances 17 30,513,271 30,213,861
30,574,384 40,754,253
Total assets 83,039,208 92,640,307

Equity and liabilities
Current liabilities
Other payables 18 1,352,712 1,374,665
Income tax payable 51,395 12,395
1,426,147 1,408,406
Net current assets 29,148,237 39,345,847

Non-current liability

Equity attributable to owners of the parent
Share capital 20 80,000,000 80,000,000
Retained earnings 21 1,574,807 11,171,607
Total equity 81,574,807 91,171,607

Total equity and liabilities 83,039,208 92,640,307

Statements of Changes in Equity
◄�� Attributable to owners of the parent ��►
Note Non-distributable Distributable

Share Retained
capital earnings Total
RM RM RM
Group
At 1 January 2021 80,000,000 59,779,828 139,779,828
Total comprehensive income - 27,240,004 27,240,004
Transaction with the owners

Dividends on ordinary shares 28 - (27,999,996) (27,999,996)
Total transactions with the owners - (27,999,996) (27,999,996)
At 31 December 2021 80,000,000 59,019,836 139,019,836
At 1 January 2022 80,000,000 59,019,836 139,019,836

At 31 December 2022 80,000,000 61,100,750 141,100,750

Statements of Changes in Equity (cont’d)
Note Non-distributable Distributable

Share Retained
capital earnings Total
RM RM RM
Company
At 1 January 2021 80,000,000 20,345,979 100,345,979

At 31 December 2021 80,000,000 11,171,607 91,171,607
At 1 January 2022 80,000,000 11,171,607 91,171,607

At 31 December 2022 80,000,000 1,574,807 81,574,807

Statements of Cash Flows
Group Company
2022 2021 2022 2021
RM RM RM RM
Operating activities
Profit before tax 35,441,154 37,292,465 14,556,174 18,928,754
Adjustments for:
Reversal of allowance for doubtful debts (79,185) (93,319) - -
Bad debts written off 5,651 1,096 - -
Dividend income from subsidiaries - - (16,032,000) (23,209,000)
Depreciation of property, plant and
equipment 6,119,077 6,187,867 4,280 4,190
Depreciation of investment properties 63,346 63,346 - -
Depreciation of right-of-use assets 537,396 485,847 21,346 20,675
(Reversal of)/impairment loss on investment
in a subsidiary - - (600,000) 1,400,000
Interest expense on lease liabilities 25,782 26,972 2,653 3,325
Gain on disposal of property, plant and
equipment (216,645) (219,194) - -
Interest income (1,214,232) (1,060,334) (650,406) (543,497)
Inventories written off 235,226 171,425 - -
Property, plant and equipment written off 259,439 339,806 1,103 2
Operating cash flows before

changes in working capital 41,177,009 43,195,977 (2,696,850) (3,395,551)
(Increase)/decrease in inventories (1,964,800) 1,358,909 - -
(Increase)/decrease in trade and other receivables (8,480,356) 514,144 (12,309) 5,496
(Increase)/decrease in prepayments (285,534) 74,734 588 (588)
Increase/(decrease) in trade and other
payables 2,436,712 (2,334,975) (21,953) (356,612)

Cash flows generated from/(used in)
operations 32,883,031 42,808,789 (2,730,524) (3,747,255)
Interest expense on lease liabilities paid (25,782) (26,972) (2,653) (3,325)
Income taxes paid (7,931,255) (12,905,519) (113,974) (119,071)

Net cash flows generated from/(used in)
operating activities 24,925,994 29,876,298 (2,847,151) (3,869,651)

Statements of Cash Flows (cont’d)
Group Company
2022 2021 2022 2021
RM RM RM RM
Investing activities
Withdrawal of deposits for more than
3-months maturity with licensed banks 1,039,106 4,000,000 1,039,106 -
Dividend income received from subsidiaries - - 26,523,000 39,121,000
Interest received 1,214,232 1,060,334 650,406 543,497
Proceeds from disposal of property, plant
and equipment 232,660 221,620 - -
Purchase of property, plant and equipment (6,310,673) (2,756,293) (5,499) (3,709)
Net cash flows (used in)/ generated from

investing activities (3,824,675) 2,525,661 28,207,013 39,660,788

Financing activities
Dividends paid on ordinary shares (24,000,000) (43,999,996) (24,000,000) (43,999,996)
Repayment for lease liabilities (313,537) (261,988) (21,346) (20,675)
Net cash flows used in financing activities (24,313,537) (44,261,984) (24,021,346) (44,020,671)
Net (decrease)/increase in cash and cash

equivalents (3,212,218) (11,860,025) 1,338,516 (8,229,534)
Cash and cash equivalents at 1 January 65,654,150 77,514,175 29,174,755 37,404,289

Cash and cash equivalents at 31 December
(Note 17) 62,441,932 65,654,150 30,513,271 29,174,755

Notes to the Financial Statements
31 December 2022
1. Corporate information

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main
Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at 3A, Mezzanine Floor,
Jalan Ipoh Kecil, 50350 Kuala Lumpur. The principal place of business of the Company is located at 14, Jalan Kilang,
Kawasan Perindustrian Tongkang Pecah, 83010 Batu Pahat, Johor Darul Ta’zim.
The holding company of the Company is HSB Group Sdn. Bhd., which is incorporated and domiciled in Malaysia.
Related companies are those companies within the HSB Group Sdn. Bhd. group.
The principal activity of the Company is investment holding.
The principal activities of the subsidiaries are manufacture and sales of biscuits and coffee mix, and dealers in biscuits,
confectionery and other foodstuff.
2. Summary of significant accounting policies
2.1 Basis of preparation
These financial statements for the year ended 31 December 2022 have been prepared in accordance with
Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”)
and the requirements of the Companies Act 2016 in Malaysia.
The financial statements of the Group and of the Company have been prepared on the historical cost basis,
except as disclosed in the accounting policies below.
The financial statements are presented in Ringgit Malaysia (RM) except when otherwise indicated.
2.2 Changes in accounting policies
The accounting policies adopted are consistent with those of the preceding year except as follows:
On 1 January 2022, the Group and the Company adopted the following Amendments mandatory for annual
financial periods beginning on or after 1 January 2022:
Effective for annual periods

Description beginning on or after
Annual Improvements to MFRS Standards 2018-2020 1 January 2022

Amendments to MFRS 3: Business Combinations
- Reference to the Conceptual Framework 1 January 2022
Amendments to MFRS 116: Property, Plant and Equipment
- Proceeds before Intended Use 1 January 2022
Amendments to MFRS 137: Provisions, Contingent Liabilities and
Contingent Assets - Onerous Contracts - Cost of Fulfilling a Contract 1 January 2022

The directors are of opinion that the Amendments above did not have any material impact on the financial
statements.

Notes to the Financial Statements (cont’d)
31 December 2022
2. Summary of significant accounting policies (cont’d)
2.3 Standards, Annual Improvements and Amendments issued but not yet effective

The Standards, Annual Improvements and Amendments that are issued but not yet effective up to the date
of issuance of the Group’s and of the Company’s financial statements are disclosed below. The Group and the
Company intend to adopt these Standards, Annual Improvements and Amendments if applicable, when they
become effective.
Effective for annual periods

Description beginning on or after
MFRS 17 Insurance Contracts 1 January 2023

Amendments to MFRS 101: Presentation of Financial Statements
- Classification of Liabilities as Current or Non-current 1 January 2023
- Disclosure of Accounting Policies 1 January 2023
Amendments to MFRS 108: Accounting Policies, Changes in
Accounting Estimates and Errors - Definition of Accounting
Estimates 1 January 2023
Amendments to MFRS 112: Income Tax - Deferred Tax related to
Assets and Liabilities arising from a Single Transaction 1 January 2023
Amendments to MFRS 17: Insurance Contracts - Initial Application of
MFRS 17 and MFRS 9 - Comparative Information 1 January 2023
Amendments to MFRS 101: Presentation of Financial Statements
- Non-current Liabilities with Covenants 1 January 2024
Amendments to MFRS 16: Leases - Lease Liability in a Sale Leaseback 1 January 2024
Amendments to MFRS 10 and MFRS 128: Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture Deferred

The directors expect that the adoption of the above Standards, Annual Improvements and Amendments will
have no material impact on the financial statements in the year of initial application.
2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries
as at the reporting date. Control is achieved when the Group is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only if, the Group has:

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

(ii) Exposure, or rights, to variable returns from its investment with the investee; and
(iii) The ability to use its power over the investee to affect its returns.

31 December 2022
2.4 Basis of consolidation (cont’d)
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption
and when the Group has less than a majority of the voting rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
(i) The contractual arrangement with the other vote holders of the investee;

(ii) Rights arising from other contractual arrangements; and
(iii) The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated financial statements from the date the Group gains control until the date the Group ceases to
control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders
of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance. When necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group
assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of
the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity while any resultant gain or loss is recognised in
profit or loss. Any investment retained is recognised at fair value.
2.5 Business combinations and goodwill
Business combinations involving entities under common control are accounted for by applying the merger
method. The assets and liabilities of the combining entities are reflected at their carrying amounts reported
in the consolidated financial statements of the controlling holding company. Any difference between the
consideration paid and the share capital of the “acquired” entity is reflected within equity as merger reserve.
The statement of comprehensive income reflects the results of the combining entities for the full year,
irrespective of when the combination takes place. Comparatives are presented as if the entities have always
been combined since the date the entities had come under common control.

31 December 2022
2.5 Business combinations and goodwill (cont’d)
All other business combinations are accounted for using the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the
amount of any non-controlling interests in the acquiree. For each business combination, the Group elects
whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share
of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in
administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host
contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is remeasured at its
acquisition date fair value and any resulting gain or loss is recognised in profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition
date. Contingent consideration classified as an asset or liability that is a financial instrument and within the
scope of MFRS 139 Financial Instruments: Recognition and Measurement, is measured at fair value with
changes in fair value recognised in either profit or loss or as a change to OCI. If the contingent consideration
is not within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS. Contingent
consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within
equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable
assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired
and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised
at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over
the aggregate consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the Group’s cash-generating units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit
is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of
the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is
measured based on the relative values of the disposed operation and the portion of the cash-generating unit
retained.

31 December 2022
2.6 Current versus non-current classification
Assets and liabilities in the statement of financial position are presented based on current/non-current
classification. An asset is current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;
- Expected to be realised within twelve months after the reporting period; or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.
All other assets are classified as non-current. A liability is current when:
- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period; or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after
the reporting period.
All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.7 Fair value measurement

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

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

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

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

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available, to measure fair value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs.

31 December 2022
2.7 Fair value measurement (cont’d)

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

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value is
unobservable.

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

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

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

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

2.8 Foreign currency
(a) Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of
the primary economic environment in which the entity operates (“the functional currency”). The
consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s
functional currency.
(b) Foreign currency transactions

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective
functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional
currency spot rates of exchange at the reporting date.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary
items, are included in profit or loss for the period except for exchange differences arising on monetary
items that form part of the Group’s net investment in foreign operations.

31 December 2022
2.8 Foreign currency (cont’d)
(b) Foreign currency transactions (cont’d)

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of non-monetary items measured at fair value is
treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e.,
translation differences on items whose fair value gain or loss is recognised in other comprehensive
income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).
2.9 Property, plant and equipment and depreciation
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant
and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation
and accumulated impairment losses. When significant parts of property, plant and equipment are required
to be replaced at intervals, the Group depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant
and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance
costs are recognised in profit or loss as incurred. Land and buildings are stated at cost less accumulated
depreciation and any accumulated impairment losses.
Freehold land has an unlimited useful life and therefore is not depreciated. Leasehold land is amortised over
the lease term of 60 and 99 years on the straight line method. Capital work-in-progress are not depreciated
as these assets are not available for use. Depreciation on other property, plant and equipment is computed on
the straight line method over the following estimated useful lives of the assets:
Buildings 50 years
Plant and equipment 3 - 15 years
Motor vehicles 5 years
Other assets (other than capital work-in-progress)
3 - 15 years
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each financial year end, and adjusted
prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the income
statement in the year the asset is derecognised.
2.10 Investment properties
Investment properties are properties which are held either to earn rental income or for capital appreciation
or for both. Investment properties are stated at cost less accumulated depreciation and impairment losses.
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on the
straight line method over the following estimated useful life of the assets:

Buildings 50 years


31 December 2022
2.10 Investment properties (cont’d)
Investment properties are derecognised either when they have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is expected from their disposal. The difference between
the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of
derecognition.
Transfers are made to (or from) investment property only when there is a change in use. When investment
properties are stated at cost less accumulated depreciation and impairment losses, transfers between
investment property and owner-occupied property do not change the carrying amount of the property
transferred and they do not change the cost of that property for measurement or disclosure purpose.
2.11 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment assessment for an asset is required, the Group estimates
the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in
use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units (“CGU”)).
When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and
is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the
carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying
amount of the other assets in the unit or groups of units on a pro-rata basis.
Impairment losses are recognised in the statement of profit or loss expense categories consistent with the
function of the impaired assets.
An assessment is made at each reporting date to determine whether there is an indication that previously
recognised impairment losses no longer exist or have decreased. A previously recognised impairment loss is
reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount
since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined,
net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in the statement of profit or loss unless the asset is carried at revalued amount, in which case
the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent
period.
2.12 Subsidiaries
A subsidiary is an entity over which the Group has control over. Control is defined in Note 2.4.

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

31 December 2022
2.13 Financial instruments

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

Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair
value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual
cash flow characteristics and the Group’s business model for managing them. With the exception of
trade receivables that do not contain a significant financing component or for which the Group has
applied the practical expedient, the Group initially measure a financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables
that do no contain a significant financing component or for which the Group has applied the practical
expedient are measured at the transaction price determined under MFRS 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through
OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the
principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an
instrument level.

The Group’s business model for managing financial assets refers to how it manages its financial assets
in order to generate cash flows. The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e.,
the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement financial assets are classified in four categories:

- Financial assets at amortised cost (debt instruments)
- Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt
instruments)
- Financial assets designated at fair value through OCI with no recycling of cumulative gains and
losses upon derecognition (equity instruments)
- Financial assets at fair value through profit or loss

The Group’s only financial assets are its financial assets at amortised cost (debt instruments).

31 December 2022
2.13 Financial instruments (cont’d)
(a) Financial assets (cont’d)
Subsequent measurement (cont’d)
The Group measures financial assets at amortised cost if both of the following conditions are met:

- The financial asset is held within a business model with the objective to hold financial assets in
order to collect contractual cash flows
And

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method
and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is
derecognised, modified or impaired.

The Group’s financial assets at amortised cost comprise solely of its trade and other receivables
balances.

Derecognition

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

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

When the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to
the extent of its continuing involvement. In that case, the Group also recognises an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the rights and
obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the maximum amount of consideration that the
Group could be required to repay.

31 December 2022
(a) Financial assets (cont’d)

Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive, discounted
at an approximation of the original effective interest rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit enhancements that are integral to the contractual
terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures
for which there has been a significant increase in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life of the exposure, irrespective of the timing of
the default (a lifetime ECL).

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based
on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on
its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.

The Group considers a financial asset in default when contractual payments are 180 days past due.
However, in certain cases, the Group may also consider a financial asset to be in default when internal
or external information indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the Group. A financial
asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
(b) Financial liabilities

Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in
an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

The Group’s financial liability comprises trade and other payables which is classified as Loans and
borrowings.

31 December 2022
(b) Financial liabilities (cont’d)
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the
statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings.
Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the statement of
comprehensive income.
(c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of
financial position if there is a currently enforceable legal right to offset the recognised amounts and
there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
2.14 Cash and bank balances
Cash and bank balances in the statement of financial position comprise cash at banks and on hand, demand
deposits, short-term deposits with a maturity of three months or less and highly liquid investments that are
readily convertible to known amount of cash and which are subject to an insignificant risk of changes in
value.
For the purpose of statement of cash flows, cash and cash equivalents consist of cash and bank balances as
defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash
management.

2.15 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories
to their present location and condition are accounted for as follows:
- Raw materials: purchase costs on a first-in first-out basis.

- Finished goods and work-in-progress: costs of direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity but excluding borrowing costs. These costs
are assigned on a first-in first-out basis.

31 December 2022
2.15 Inventories (cont’d)
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of
completion and the estimated costs necessary to make the sale.
2.16 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects
some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to
a provision is presented in the statement of profit or loss net of any reimbursement.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of economic resources will be required to settle the obligation, the provision
is reversed.
If the effect of the time value of money is material, provisions are discounted using a current pre tax-rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
2.17 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the
acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the
activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing
costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their
intended use or sale.
All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs
consist of interest and other costs that the Group incurred in connection with the borrowing of funds.
2.18 Employee benefits

(a) Defined contribution plans

The Group makes contributions to the Employee Provident Fund in Malaysia, a defined contribution
pension scheme. Contributions to defined contribution pension schemes are recognised as an expense
in the period in which the related service is performed.
(b) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in
which the associated services are rendered by employees. Employee entitlements to annual leave are
recognised as liability when they accrue to the employees. The estimated liability for leave is recognised
for services rendered by employees up to the reporting date.

31 December 2022
2.19 Leases
(i) As lessee
The Group recognises a right-of-use asset and a lease liability at the commencement date of the contract
for all leases excluding short-term leases or leases for which the underlying asset is of low value,
conveying the right to control the use of an identified asset for a period of time.

The right-of-use assets are initially recorded at cost, which comprises:
- the amount of the initial measurement of the lease liability;

- any lease payments made at or before the commencement date of the lease, less any lease incentives
received; and

- any initial direct costs incurred by the Group;

Subsequent to initial recognition, the right-of-use assets are measured at cost less any accumulated
depreciation, accumulated impairment losses and adjusted for any remeasurement of lease liabilities.

Depreciation is computed on a straight-line basis over the estimated useful lives of the right-of-use
assets.
If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or
if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group
depreciates the right-of-use asset from the commencement date to the end of the useful life of the
underlying asset. Otherwise, the Group depreciates the right-of-use asset from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The lease liability is initially measured at the present value of the lease payments that are not paid at that
date. The lease payments are discounted using the Group’s incremental borrowing rate. Subsequent to
the initial recognition, the Group measures the lease liability by increasing the carrying amount to
reflect interest on the lease liability, reducing the carrying amount to reflect lease payments made, and
remeasuring the carrying amount to reflect any reassessment or lease modifications.
(ii) As lessor
The Group classified its leases as either operating lease or finance lease. Leases where the Group retains
substantially all the risks and rewards of ownership of the leased assets are classified as operating
leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount
of the leased asset and recognised over the lease term on the same basis as rental income.
If the Group transfers substantially all the risks and rewards incidental to ownership of the leased
assets, leases are classified as finance leases and are capitalised at an amount equal to the net investment
in the lease.

31 December 2022
2.20 Revenue from contracts with customers

The Group recognises revenue from contracts with customers for the provision of services and sale of
information based on the five-step model as set out below:

(i) Identify contract with a customer. A contract is defined as an agreement between two or more parties
that creates enforceable rights and obligations and sets out the criteria that must be met.

(ii) Identify performance obligations in the contract. A performance obligation is a promise in a contract
with a customer to transfer a good or service to the customer.
(iii) Determine the transaction price. The transaction price is the amount of consideration to which the
Group expects to be entitled in exchange for transferring promised goods or services to a customer,
excluding amounts collected on behalf of third parties.

(iv) Allocate the transaction price to the performance obligations in the contract. For a contract that has
more than one performance obligation, the Group allocates the transaction price to each performance
obligation in an amount that depicts the amount of consideration to which the Group expects to be
entitled in exchange for satisfying each performance obligation.

(v) Recognise revenue when (or as) the Group satisfies a performance obligation.
The Group satisfies a performance obligation and recognise revenue over time if the Group’s performance:

(i) Do not create an asset with an alternative use to the Group and have an enforceable right to payment
for performance completed to-date; or

(ii) Create or enhance an asset that the customer controls as the asset is created or enhanced; or

(iii) Provide benefits that the customer simultaneously receives and consumes as the Group performs.

For performance obligations where any one of the above conditions is not met, revenue is recognised at the
point in time at which the performance obligation is satisfied.
Revenue is measured at the fair value of consideration received or receivable.
(a) Sale of goods

The Group contracts with its customers for sales of biscuits and coffee mix, and dealers in biscuits,
confectionery and other foodstuff. Revenue from sale of goods is recognised at the point in time when
control of the asset is transferred to the customer, generally upon the transfer of significant risk and
rewards of ownership of the goods to the customer. Payment is generally due within 14 to 60 days
from transfer of risk and rewards. Revenue is not recognised to the extent where there are significant
uncertainties regarding recovery of the consideration due, associated costs or the possible return of
goods.

31 December 2022
2.20 Revenue from contracts with customers (cont’d)

(b) Delivery services

The Group provides delivery services that are bundled together with the sale of goods to a customer. The
delivery services can be obtained from other providers and do not significantly customise or modify
the goods sold.

Contracts for bundled sales of goods and delivery services are comprised of two performance obligations
because the promises to transfer goods and provide delivery services are capable of being distinct and
separately identifiable. Accordingly, the Group allocates the transaction price based on the relative
stand-alone selling prices of the goods and delivery services.
The Group recognises revenue from delivery services over time, using an input method to measure
progress towards complete satisfaction of the service, because the customer simultaneously receives
and consumes the benefits provided by the Group. Payment is generally due within 14 to 60 days from
delivery.
(c) Interest income

Interest income is recognised on an accrual basis using the effective yield method.
(d) Dividend income

Dividend income is recognised when the Group’s right to receive payment is established.
(e) Rental income

Rental income from investment property is recognised on a straight-line basis over the term of the
lease.
2.21 Taxes

(a) Current income tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted at the reporting date.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised
outside profit or loss, either in other comprehensive income or directly in equity.
(b) Deferred tax

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

31 December 2022
2.21 Taxes (cont’d)

(b) Deferred tax (cont’d)

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

- where the deferred tax liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; and
- in respect of taxable temporary differences associated with investments in subsidiaries, associates

and interests in joint ventures, where the timing of the reversal of the temporary differences can
be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused
tax losses can be utilised except:
- where the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognised only to the extent that
it is probable that the temporary differences will reverse in the foreseeable future and taxable profit
will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date
and are recognised to the extent that it has become probable that future taxable profit will allow the
deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the reporting date.
Deferred tax items in relation to the underlying transaction that do not affect profit or loss are recognised
either in other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity
and the same taxation authority.

31 December 2022
2.21 Taxes (cont’d)
(c) Sales tax

Expenses and assets are recognise net of the amount of sales tax, except:
- When the sales tax incurred on a purchase of assets or services is not recoverable from the taxation
authority, in which case, the sales tax is recognised as part of the cost of acquisition of the assets or
as part of the expense item, as applicable.
- When receivables and payables are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
2.22 Segment reporting

For management purposes, the Group is organised into operating segments based on their products
and services which are independently managed by the respective segment managers responsible for the
performance of the respective segments under their charge. The segment managers report directly to the
management of the Company who regularly review the segment results in order to allocate resources to
the segments and to assess the segment performance. Additional disclosures on each of these segments are
shown in Note 27, including the factors used to identify the reportable segments and the measurement basis
of segment information.
2.23 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction
costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the
period in which they are declared.
2.24 Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within
the control of the Group.

Contingent liabilities and assets are not recognised in the statement of financial position of the Group.

31 December 2022
3. Significant accounting estimates and judgements
The preparation of the Group’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of
contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could
result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected
in the future.

3.1 Significant judgment
In the process of applying the Group’s accounting policies, management has made the following judgement
which have significant effect on the amounts recognised in the financial statements:

Revenue from contracts with customers
Determining method to estimate variable consideration

Certain contracts with customers include trade incentives and certain consideration payable to customers. In
estimating the variable consideration, the Group is required to use either the expected value method or the
most likely amount method based on which method better predicts the amount of consideration to which it
will be entitled.

The Group determined that the most likely amount methods is the appropriate methods to use in estimating
the variable consideration for the sale of goods.
Before including any amount of variable consideration in the transaction price, the Group considers whether
the amount of variable consideration is constrained. The Group determined that the estimates of variable
consideration are not constrained based on its historical experience, business forecast and the current
economic conditions. In addition, the uncertainty on the variable consideration will be resolved within a
short time frame.
3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
(a) Useful lives of plant and equipment

The cost of plant and equipment are depreciated on a straight-line basis over the assets’ estimated
economic useful lives. Management estimates the useful lives of these plant and equipment to be within
3 to 15 years. These are common life expectancies applied in the food industry. Changes in the expected
level of usage and technological developments could impact the economic useful lives and the residual
values of this asset, therefore, future depreciation charges could be revised. The carrying amount of the
Group’s plant and equipment as at the reporting date is disclosed in Note 11.

31 December 2022
3. Significant accounting estimates and judgements (cont’d)
3.2 Key sources of estimation uncertainty (cont’d)

(b) Provision for expected credit loss of trade and other receivables
The Group uses a provision matrix to calculate ECLs for trade and others receivables. The provision
rates are based on days past due for groupings of various customer segments that have similar loss
patterns (i.e., by geography, product type, customer type and rating, and coverage by letters of credit
and other forms of credit insurance).

The provision matrix is initially based on the Group’s historical observed default rates. The Group will
calibrate the matrix to adjust the historical credit loss experience with forward-looking information.
For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate
over the next year which can lead to an increased number of defaults in the manufacturing sector, the
historical default rates are adjusted. At every reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed.
The assessment of the correlation between historical observed default rates, forecast economic conditions
and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of
forecast economic conditions. The Group’s historical credit loss experience and forecast of economic
conditions may also not be representative of customer’s actual default in the future.

(c) Impairment of investment in subsidiaries

MFRS 136 Impairment of assets requires an entity to assess at the end of each reporting period whether
there is any indication that an impairment loss recognised in prior periods may no longer exist or may
have increased. As at 31 December 2022, the financial statements of the Company recorded investment
in subsidiaries amounting to RM52.39 million. Included in this amount is the investment in In-Comix
Food Industries Sdn. Bhd. (“ICFI”) with carrying amount of RM7.85 million, on which impairment
loss of RM16.13 million was recognized in prior year.
Due to the existence of indicators of impairment during the year as a result of weak demand in domestic
and overseas market for its instant beverage products, the Company has performed an impairment
assessment and resulted in a reversal of impairment loss on investment in ICFI of RM0.60 million
for the current financial year (2021: impairment loss of RM1.4 million) and accordingly recorded
accumulated impairment loss of RM15.53 million (2021: RM16.13 million) as at 31 December 2022.
As disclosed in Note 14, the Company estimated the recoverable amount of the investment in ICFI
based on the higher of fair value less costs of disposal and value in use (by estimating the future cash
flows expected to be derived from the subsidiary and discounting these cash flows at an appropriate
discount rate). The reversal of impairment loss was made based on the subsidiary’s fair value less costs
of disposal. The reversal of impairment loss is due to the increase in fair value of the leasehold land and
building of ICFI based on comparable market transactions.
Further details of the impairment assessment on the investment in a subsidiary are disclosed in Note
14. The fair value hierarchy information for the fair value of its property, plant and equipment are
disclosed in Note 24.

31 December 2022
4. Revenue from contracts with customer
Group
2022 2021
RM RM
Types of income
Sales of biscuit 70,529,856 68,481,239
Sales of trading goods 245,098,018 225,494,820
Sales of beverages 2,566,461 1,856,786
318,194,335 295,832,845
Timing of revenue recognition

Goods transferred at a point in time 318,194,335 295,832,845
Information about receivables and refund liabilities from contracts with customers is disclosed as follows:
Group
2022 2021
RM RM
Receivables from contracts with customers (Note 16) 39,854,212 30,790,346

Refund liabilities 2,752,283 2,088,702
Refund liabilities
Refund liabilities represent the expected trade incentives to be given to the customers. The Group provides trade
incentives to certain customers based on the achievement of the performance criteria stated in the contracts.
Trade incentives give rise to variable consideration. To estimate the variable consideration for the expected trade
incentives, the Group applies the most likely amount method.
5. Cost of sales
Cost of sales represents cost of inventories sold.

31 December 2022
6. Profit before tax
The following items have been included in arriving at profit before tax:
Group Company
2022 2021 2022 2021
RM RM RM RM
Auditors’ remuneration
Statutory audits
- Current year 167,000 160,000 47,000 45,000
- Underprovision in prior year 18,000 - 18,000 -
Other services 6,000 5,000 6,000 5,000
Bad debts written off 5,651 1,096 - -
Employee benefits expenses
excluding Directors’ remuneration
(Note 7) 51,938,484 50,655,119 510,723 455,716
Directors’ fees (Note 8)
- Current year 1,780,296 1,819,893 940,296 923,065
Directors’ other emoluments (Note 8) 8,828,469 9,208,958 748,234 1,469,352
Depreciation of property, plant and
equipment (Note 11) 6,119,077 6,187,867 4,280 4,190
Depreciation of right-of-use assets
(Note 13) 537,396 485,847 21,346 20,675
Depreciation of investment properties
(Note 12) 63,346 63,346 - -
Impairment loss on investment in a
subsidiary (Note 14) - - - 1,400,000
Interest expense on lease liabilities
(Note 13) 25,782 26,972 2,653 3,325
Inventories written off 235,226 171,425 - -
Property, plant and equipment written off 259,439 339,806 1,103 2
Realised exchange losses 125,746 295,586 - -
Unrealised exchange losses 12,090 - - -
and crediting:
Dividend income - - 16,032,000 23,209,000

Interest income 1,214,232 1,060,334 650,406 543,497
Reversal of impairment loss on investment
in a subsidiary (Note 14) - - 600,000 -
Reversal of allowance for doubtful debts
(Note 16) 79,185 93,319 - -
Reversal of provision of sales team
target and team work incentive
provided in prior year 1,404,108 - - -
Gain on disposal of property, plant and
equipment 216,645 219,194 - -
Rental income 319,050 281,100 - -

31 December 2022
7. Employee benefits expense
Group Company
2022 2021 2022 2021
RM RM RM RM
Wages, salaries and allowances 45,865,204 44,816,283 452,753 403,959

Defined contribution plan 5,020,031 5,001,768 54,965 49,063
Employment Insurance System 54,888 54,983 308 277
Social security costs 514,201 430,453 2,697 2,417
Other staff related expenses 288,560 156,032 - -
Other allowance 195,600 195,600 - -
51,938,484 50,655,119 510,723 455,716
8. Key management personnel compensation

The details of remuneration for key management during the year are as follows:
v Group Company
2022 2021 2022 2021
RM RM RM RM
Directors of the Company

Executive:
Salaries and bonuses 1,484,000 1,097,390 517,760 1,097,390
Other emoluments 248,769 256,502 105,802 255,802
Defined contribution plan 205,163 70,460 73,372 70,460
Fees 250,000 219,893 180,000 163,065
Benefits-in-kind 12,255 4,902 - -
2,200,187 1,649,147 876,934 1,586,717
Non-Executive (but holding executive

Salaries and bonuses 2,501,840 2,786,099 - -
Defined contribution plan 360,702 399,418 - -
Fees 639,758 640,000 359,758 360,000
4,109,867 4,449,869 382,658 380,100

Non-Executive:
Fees 400,538 400,000 400,538 400,000
428,938 425,600 428,938 425,600
31 December 2022
8. Key management personnel compensation (cont’d)
Group Company
2022 2021 2022 2021
RM RM RM RM
Directors of Subsidiaries
Executive:
Salaries and bonuses 2,475,760 2,879,124 - -
Other emoluments 602,718 692,955 - -
Defined contribution plan 364,517 424,161 - -
Fees 420,000 490,000 - -
3,916,515 4,548,681 - -

Non-Executive:
Other emoluments 600 600 - -
Fees 70,000 70,000 - -
70,600 70,600 - -
Total 10,726,107 11,143,897 1,688,530 2,392,417
Directors’ remuneration analysed by:

Salaries and bonuses 6,461,600 6,762,613 517,760 1,097,390
Other emoluments 1,436,487 1,552,306 157,102 301,502
Total Directors’ remuneration

(excluding benefits-in-kind)
(Note 6) 8,828,469 9,208,958 748,234 1,469,352
Fees (Note 6) 1,780,296 1,819,893 940,296 923,065
Benefits-in-kind 117,342 115,046 - -

Total Directors’ remuneration 10,726,107 11,143,897 1,688,530 2,392,417
31 December 2022
9. Income tax expense

Major components of income tax expense
The major components of income tax expense for the years ended 31 December 2022 and 2021 are:
Group Company
2022 2021 2022 2021
RM RM RM RM
Statements of comprehensive income:

Current income tax:
- Malaysian income tax 9,287,000 10,220,000 140,000 101,000
- (Over)/underprovision in prior years (67,808) (13,258) 12,974 2,130

9,219,192 10,206,742 152,974 103,130

Deferred tax (Note 19):
- Origination and reversal of
temporary differences 50,000 (230,206) - -
- Underprovision in prior years 91,048 75,925 - -

141,048 (154,281) - -

Income tax expense recognised
in profit or loss 9,360,240 10,052,461 152,974 103,130
Reconciliation between tax expense and accounting profit
A reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate
tax rate for the years ended 31 December 2022 and 2021 are as follows:
Group Company
2022 2021 2022 2021
RM RM RM RM
Profit before tax 35,441,154 37,292,465 14,556,174 18,928,754

Taxation at Malaysian statutory
tax rate of 24% (2021: 24%) 8,505,877 8,950,192 3,493,482 4,542,901
Adjustments:
Income not subject to tax - - (3,991,680) (5,570,160)
Non-deductible expenses 845,264 1,067,602 638,198 1,128,259
Expenses with double deduction (14,141) (28,000) - -
(Over)/underprovision of income tax
expense in prior years (67,808) (13,258) 12,974 2,130
Underprovision of deferred
tax in prior years 91,048 75,925 - -

Income tax expense recognised
in profit or loss 9,360,240 10,052,461 152,974 103,130
Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2021: 24%) of the estimated assessable
profit for the year.
31 December 2022
10. Earnings per share
Earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the
parent by the weighted average number of ordinary shares in issue during the financial year.
Group
2022 2021
Profit net of tax attributable to owners of the parent (RM) 26,080,914 27,240,004

Weighted average number of ordinary shares in issue 800,000,000 800,000,000

Basic earnings per share (sen) 3.26 3.41

Diluted earnings per share (sen) 3.26 3.41
As at reporting date, the Company does not have any share options, warrants and other potential dilutive ordinary
shares.
11. Property, plant and equipment
104
Long term Short term
Freehold leasehold leasehold
land and land and land and Plant and Motor Other
buildings buildings buildings equipment vehicles assets Total
31 December 2022
Group RM RM RM RM RM RM RM
Cost

At 1 January 2021 32,604,552 1,011,786 26,668,417
26,533,323 73,978,136
73,269,140 10,977,228 11,114,202 156,354,321
Additions 45,376 - 171,105
135,094 1,109,226
1,988,251 871,572 559,014 2,756,293
Reclassification - - - 596,171
(1,279,255) - (596,171) -
Disposals/written off - - - (497,292) (623,261) (68,829) (1,189,382)

At 31 December 2021 and 26,668,417 73,978,136

1 January 2022 32,649,928 1,011,786 26,839,522
171,105 75,186,241
1,109,226 11,225,539 11,008,216 157,921,232
Additions 89,578 - 2,432,879- 603,739
596,171 323,102 2,861,375 6,310,673
Reclassification - - 95,400- 251,738
(497,292) - (347,138) -

26,839,522 75,186,241
At 31 December 2022 32,739,506 1,011,786 29,367,801 75,681,868 10,746,409 13,301,110 162,848,480
11. Property, plant and equipment (cont’d)
Long term Short term

Freehold leasehold leasehold
land and land and land and Plant and Motor Other
buildings buildings buildings equipment vehicles assets Total
Group RM RM RM RM RM RM RM
Accumulated depreciation
and impairment loss:
At 1 January 2021 5,840,707 270,428 9,516,248 47,837,764 8,236,919 8,123,609 79,825,675

Depreciation charge
for the year (Note 6) 305,850 12,682 857,622 3,588,992 1,036,815 385,906 6,187,867
Disposals/written off - - - (158,654) (623,253) (65,243) (847,150)

At 31 December 2021 and
1 January 2022 6,146,557 283,110 10,373,870 51,268,102 8,650,481 8,444,272 85,166,392
Depreciation charge
for the year (Note 6) 310,973 12,682 885,154 3,449,897 1,005,657 454,714 6,119,077
At 31 December 2022 6,457,530 295,792 11,259,024 54,630,287 8,853,920 8,680,945 90,177,498

Net carrying amount:

At 31 December 2021 26,503,371 728,676 16,465,652 23,918,139 2,575,058 2,563,944 72,754,840

At 31 December 2022 26,281,976 715,994 18,108,777 21,051,581 1,892,489 4,620,165 72,670,982

105
31 December 2022
31 December 2022
11. Property, plant and equipment (cont’d)
Group

Other assets include computer, office equipment, electrical installation, renovation, furniture and fittings and capital
work-in-progress which comprises machinery under installation amounting to RM672,933 (2021: RM1,020,071).
Office Furniture
equipment and fittings Total
Company RM RM RM
Cost

At 1 January 2021 47,726 12,315 60,041
Additions 3,709 - 3,709
Written off (4,698) - (4,698)
At 31 December 2021 and 1 January 2022 46,737 12,315 59,052

Additions 5,499 - 5,499
Written off (13,949) - (13,949)
At 31 December 2022 38,287 12,315 50,602


At 1 January 2021 42,558 10,980 53,538
Charge for the year (Note 6) 3,845 345 4,190
Written off (4,696) - (4,696)

At 31 December 2021 and 1 January 2022 41,707 11,325 53,032
Charge for the year (Note 6) 3,941 339 4,280
Written off (12,846) - (12,846)

At 31 December 2022 32,802 11,664 44,466

Net carrying amount:

At 31 December 2021 5,030 990 6,020

At 31 December 2022 5,485 651 6,136
31 December 2022
12. Investment properties
Group
2022 2021
RM RM
Cost
At 1 January/ 31 December 2,220,569 2,220,569
At 1 January 883,483 820,137
Depreciation charge for the year (Note 6) 63,346 63,346
At 31 December 946,829 883,483

Net book value

At 1 January 1,337,086 1,400,432

At 31 December 1,273,740 1,337,086

Fair value of investment properties (Note 24) 3,230,000 3,230,000
These properties are held to earn rentals or for capital appreciation or both.
31 December 2022
13. Right-of-use assets and lease liabilities
(a) Right-of-use assets
Prepaid land Lease

lease contracts Total
Group RM RM RM
Cost
At 1 January 2021 8,169,801 669,049 8,838,850
Additions - 498,360 498,360
Derecognition for lease termination - (48,045) (48,045)
Reversal of cost upon expiry of lease contracts - (308,956) (308,956)
At 31 December 2021 and 1 January 2022 8,169,801 810,408 8,980,209

Additions - 241,386 241,386
Reversal of cost upon expiry of lease contracts - (165,395) (165,395)
At 31 December 2022 8,169,801 886,399 9,056,200
At 1 January 2021 2,955,886 315,437 3,271,323
Depreciation charge for the year (Note 6) 223,859 261,988 485,847
Derecognition for lease termination - (22,114) (22,114)
Reversal of accumulated depreciation
upon expiry of lease contracts - (308,956) (308,956)
At 31 December 2021 and 1 January 2022 3,179,745 246,355 3,426,100

Depreciation charge for the year (Note 6) 223,859 313,537 537,396
Reversal of accumulated depreciation
upon expiry of lease contracts - (165,395) (165,395)
At 31 December 2022 3,403,604 394,497 3,798,101

Net carrying amount at 31 December 2021 4,990,056 564,053 5,554,109

Net carrying amount at 31 December 2022 4,766,197 491,902 5,258,099
31 December 2022
13. Right-of-use assets and lease liabilities (cont’d)
(a) Right-of-use assets (cont’d)
Lease contracts
Company RM
Cost
At 1 January 2021, 31 December 2021,
1 January 2022 and 31 December 2022 106,843

At 1 January 2021 4,528
Depreciation charge for the year (Note 6) 20,675
At 31 December 2021 and 1 January 2022 25,203

Depreciation charge for the year (Note 6) 21,346
At 31 December 2022 46,549
Net carrying amount at 31 December 2021 81,640

Net carrying amount at 31 December 2022 60,294
(b) Lease liabilities
Group Company
2022 2021 2022 2021
RM RM RM RM
Current liabilities
Lease liabilities 301,159 238,138 22,040 21,346

Non-current liabilities
Lease liabilities 190,743 325,915 38,254 60,294

Total lease liabilities 491,902 564,053 60,294 81,640
31 December 2022
13. Right-of-use assets and lease liabilities (cont’d)
(b) Lease liabilities (cont’d)

The movement of lease liabilities during the financial year is as follows:
Group
2022 2021
RM RM
At 1 January 564,053 353,612

Interest expense on lease liabilities (Note 6) 25,782 26,972
Addition 241,386 498,360
Derecognition for lease termination - (25,931)
Payments of:
- Principal (313,537) (261,988)
- Interest (Note 6) (25,782) (26,972)
At 31 December 491,902 564,053
v Company
2022 2021
RM RM
At 1 January 81,640 102,315

Interest expense on lease liabilities (Note 6) 2,653 3,325
Payments of:
- Principal (21,346) (20,675)
- Interest (Note 6) (2,653) (3,325)
At 31 December 60,294 81,640
14. Investment in subsidiaries
Company
2022 2021
RM RM
Unquoted shares, at cost 67,914,211 67,914,211

Less: Accumulated impairment loss (15,527,508) (16,127,508)
52,386,703 51,786,703
31 December 2022
14. Investment in subsidiaries (cont’d)
The subsidiary companies are:
Country of Proportion (%)

Name incorporation Principal activities of ownership interest

2022 2021
Hup Seng Perusahaan Malaysia Manufacture and sales of 100% 100%
Makanan (M) Sdn. Bhd. biscuits

Hup Seng Hoon Yong Malaysia Sales and distribution of 100% 100%
Brothers Sdn. Bhd. biscuits, confectionery
and other foodstuff
In-Comix Food Malaysia Manufacture and wholesale 100% 100%

Industries Sdn. Bhd. of coffee mix and all kinds of
foodstuff
The investment in In-Comix Food Industries Sdn. Bhd. (“ICFI”) carried cost of RM23.97 million (2021: RM23.97
million) and impairment loss of RM16.13 million was recognised in prior year. Due to the existence of indicators
of impairment during the year as a result of weak demand in domestic and overseas market for its instant beverage
products, the Company has performed an impairment assessment and resulted in a reversal of impairment loss on
investment in ICFI of RM0.60 million for the current financial year (2021: impairment loss of RM1.4 million) and
accordingly recorded accumulated impairment loss of RM15.53 million (2021: RM16.13 million) as at 31 December
2022. The reversal of impairment loss is due to the increase in fair value of the leasehold land and building of ICFI
based on comparable market transactions.
The Company estimated the recoverable amount of the investment in ICFI based on the higher of fair value less
costs of disposal and value in use (by estimating the future cash flows expected to be derived from the subsidiary
and discounting these cash flows at an appropriate discount rate). The calculation is based on the net assets of ICFI
adjusted for the fair value less costs of disposal of its leasehold land and building, by engaging the independent
valuer to perform valuation of the ICFI’s leasehold land and building. This represents the directors’ estimation of
fair value less costs of disposal for the investment in ICFI.
Description of valuation techniques used and key inputs to valuation on ICFI’s leasehold land and building are as
follows:
Valuation
technique Significant unobservable inputs

Long term Comparison Comparing the property with comparable properties which have been
leasehold land Method of sold and making adjustments for factors which affect value such as
Valuation location and accessibility, market conditions, size, shape and terrain of
land, tenurial interest and restrictions if any, occupancy status, built-up
area building construction, finishes and services, age and condition of
building and other relevant characteristics.

Buildings Depreciated Aggregated amount of gross replacement cost of the buildings and other
Replacement site works, from which appropriate deductions may then be made for the
Cost Method age, condition, economic or functional obsolescence and environmental
factors.
31 December 2022
15. Inventories
Group
2022 2021
RM RM
At cost
Raw materials 13,212,676 13,342,408
Finished goods 7,059,389 5,538,306
Spares and fuel 4,028,826 4,041,985
Trading inventories 3,886,137 3,805,425
Work-in-progress 308,573 279,608

28,495,601 27,007,732
At net realisable value:
Containers 1,445,875 1,204,170
29,941,476 28,211,902
Inventories of containers are stated at estimated net realisable value and based on the estimated quantity of tin
containers in circulation at the financial year end.
16. Trade and other receivables
Group Company
2022 2021 2022 2021
RM RM RM RM
Current
Trade receivables
Third parties 40,196,296 31,257,145 - -
Less: Allowance for doubtful debts (342,084) (466,799) - -
Trade receivables, net 39,854,212 30,790,346 - -
Other receivables
Deposits 229,218 354,646 8,200 8,200
Interest receivable from fixed deposits 74,274 57,379 47,463 35,154
Sundry receivables 11,121 412,564 - -

314,613 824,589 55,663 43,354
Total trade and other receivables 40,168,825 31,614,935 55,663 43,354

Add: Cash and bank balances (Note 17) 62,441,932 66,693,256 30,513,271 30,213,861
Financial assets measured at amortised

cost 102,610,757 98,308,191 30,568,934 30,257,215
31 December 2022
16. Trade and other receivables (cont’d)

Trade receivables
Trade receivables are non-interest bearing and are generally on 14 to 60 days (2021: 14 to 60 days) terms. They are
recognised at their original invoice amounts which represent their fair values on initial recognition.
Ageing analysis of trade receivables
The ageing analysis of the Group’s trade receivables is as follows:
Group
2022 2021
RM RM
Neither past due nor impaired 27,717,837 23,689,109
1 to 30 days past due not impaired 10,229,341 6,609,299

31 to 60 days past due not impaired 1,124,608 447,981
61 to 90 days past due not impaired 778,778 42,743
91 to 120 days past due not impaired 169 116
More than 121 days past due not impaired 3,479 1,098
12,136,375 7,101,237
Impaired 342,084 466,799
40,196,296 31,257,145
Receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with
the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated
during the financial year.
At the reporting date, trade receivables arising from export sales amounting to RM611,573 (2021: RM1,208,505)
have been arranged to be settled via letters of credit issued by reputable banks in countries where the customers
are based. The remaining balance of receivables are unsecured in nature. Although those balances are unsecured
in nature, they are mostly due from creditworthy customers.

Receivables that are past due but not impaired
The Group has trade receivables amounting to RM12,136,375 (2021: RM7,101,237) that are past due at the reporting
date but not impaired.
The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts
used to record the impairment are as follows:
31 December 2022
16. Trade and other receivables (cont’d)

Trade receivables (cont’d)
Receivables that are past due but not impaired (cont’d)
Movement in allowance accounts:
Group
2022 2021
RM RM
At 1 January 466,799 652,005

Written off (45,530) (91,887)
Reversal of allowance for doubtful debts (Note 6) (79,185) (93,319)
At 31 December 342,084 466,799
Trade receivables that are determined to be impaired at the reporting date relate to debtors that are in significant
financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit
enhancements.
17. Cash and bank balances
Group Company
2022 2021 2022 2021
RM RM RM RM
Cash and bank balances 7,041,932 6,154,150 363,271 174,755

Short-term deposits with licensed banks 55,400,000 59,500,000 30,150,000 29,000,000

Cash and cash equivalents 62,441,932 65,654,150 30,513,271 29,174,755
Long-term deposits of more than 3 months

maturity period with licensed banks - 1,039,106 - 1,039,106

Total cash and bank balances 62,441,932 66,693,256 30,513,271 30,213,861
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for
varying periods of between one day to three months depending on the immediate cash requirements of the Group,
and earn interests at the respective short-term deposit rates.
The weighted average effective interest rates (per annum) for deposits with licensed banks as at the reporting date
were as follows:
Interest rate
2022 2021
% %
Group 2.57 1.75

Company 2.44 1.88
31 December 2022
18. Trade and other payables
Group
2022 2021
RM RM
Non-current
Other payable
Sales tax payable - 205,411
Current
Trade payables
Third parties 35,317,665 33,210,572

Other payables
Payroll liabilities 10,613,588 9,585,465
Sales tax payable 1,776,948 2,699,871
Sundry suppliers 1,957,483 1,990,317
Accrued expenses 5,431,564 5,922,477
Containers refundable deposits 3,222,403 2,932,407
23,001,986 23,130,537
Total trade and other payables (current) 58,319,651 56,341,109
Total financial liabilities carried at amortised cost 58,319,651 56,546,520
Company
2022 2021
RM RM
Other payables
Payroll liabilities 53,593 102,883
Accrued expenses 1,299,119 1,271,782
Total other payables, representing total financial liabilities carried at

amortised cost 1,352,712 1,374,665
Trade payables
Trade payables are non-interest bearing. Trade payables are normally settled on 30 to 90 days (2021: 30 to 90 days)
terms.
31 December 2022
19. Deferred tax liabilities/(assets)
Group Company
2022 2021 2022 2021
RM RM RM RM
At 1 January 6,202,452 6,356,733 (11,691) (11,691)

Recognised in profit or loss (Note 9) 141,048 (154,281) - -

At 31 December 6,343,500 6,202,452 (11,691) (11,691)

Presented after appropriate offsetting
as follows:
Deferred tax assets (317,688) (509,661) (12,462) (12,462)
Deferred tax liabilities 6,661,188 6,712,113 771 771
6,343,500 6,202,452 (11,691) (11,691)
The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting
are as follows:
Deferred tax liabilities of the Group:
Property, plant
and equipment Offsetting Total
RM RM RM
At 1 January 2022 7,442,184 (730,071) 6,712,113
Recognised in profit or loss (46,219) (4,706) (50,925)
At 31 December 2022 7,395,965 (734,777) 6,661,188
At 1 January 2021 7,583,885 (828,578) 6,755,307

Recognised in profit or loss (141,701) 98,507 (43,194)
At 31 December 2021 7,442,184 (730,071) 6,712,113

Deferred tax assets of the Group:
Others Offsetting Total

RM RM RM
At 1 January 2022 (1,239,732) 730,071 (509,661)

Recognised in profit or loss 187,267 4,706 191,973
At 31 December 2022 (1,052,465) 734,777 (317,688)
At 1 January 2021 (1,227,152) 828,578 (398,574)

Recognised in profit or loss (12,580) (98,507) (111,087)
At 31 December 2021 (1,239,732) 730,071 (509,661)

31 December 2022
19. Deferred tax liabilities/(assets) (cont’d)
Deferred tax liability of the Company:
Property, plant and equipment

2022 2021
RM RM
At 1 January/31 December 771 771
Deferred tax asset of the Company:
Others
2022 2021
RM RM
At 1 January/31 December (12,462) (12,462)
20. Share capital
Number of ordinary shares Amount

2022 2021 2022 2021
RM RM
Issued and fully paid:

At 1 January/31 December 800,000,000 800,000,000 80,000,000 80,000,000
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to
one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s
residual assets.
21. Retained earnings

The Company may distribute dividends out of its entire retained earnings as at 31 December 2022 and 31 December
2021 under the single tier system.
22. Related party transactions

(a) For the purposes of these financial statements, parties are considered to be related to the Group if the Group
has the ability, directly or indirectly, to control the party or exercise significant influence over the party in
making financial and operating decisions or vice versa, or where the Group and the party are subject to
common control or common significant influence. Related parties may be individuals or other entities.
(b) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company
had the following transactions with related parties during the financial year:
31 December 2022
22. Related party transactions (cont’d)

2022 2021
Note RM RM
Group
Rental of premises payable to:
- Hup Seng Brothers Holdings Sdn. Bhd. (i) 96,600 90,600
Sales of beverages to:

- Henan Ever Crown International Trg Co, Ltd. (ii) - 27,043

Company
From subsidiary companies:
Dividends received and receivable 16,032,000 23,209,000
The Directors are of the opinion that all the transactions above have been entered into the normal course of
business and have been established under mutually agreed terms.
Note:

(i) Certain Directors of the Company and subsidiaries are also Directors and shareholders of Hup Seng
Brothers Holdings Sdn. Bhd.
(ii) The son-in-law of the Director of the Company, namely Kuo Liong Yok, is a director of Henan Ever
Crown International Trg Co, Ltd.
(c) Compensation of key management during the year was as follows:
Group Company
2022 2021 2022 2021
RM RM RM RM
Short-term employee benefits 9,795,725 10,249,858 1,615,158 2,321,957

10,726,107 11,143,897 1,688,530 2,392,417
23. Capital commitments
Group
2022 2021
RM RM
Capital expenditure:
Approved but not contracted for property, plant and equipment 90,861 1,350,000
Contracted but not provided for property, plant and equipment 452,104 2,086,794
542,965 3,436,794
31 December 2022
24. Fair value

Determination of fair value
Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation
of fair value
The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are
reasonable approximation of fair value:
Note
Trade and other receivables (current) 16

Trade and other payables (non-current and current) 18

The carrying amounts of the trade and other receivables and payables are reasonable approximation of their fair
values due to their relatively short maturity periods.

Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of assets by valuation
technique:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value is unobservable.
As at 31 December 2022, the Group held the following assets of which fair value are disclosed:
Total Level 1 Level 2 Level 3

RM RM RM RM
At 31 December 2022
Investment properties* (Note 12) 3,230,000 - - 3,230,000
Property, plant and equipment of ICFI

which is measured at fair value in
determining the recoverable value for
investment in a subsidiary:
- Long term leasehold land ^ 1,800,000 - - 1,800,000
- Building ^ 4,000,000 - - 4,000,000
At 31 December 2021
Investment properties* (Note 12) 3,230,000 - - 3,230,000
Property, plant and equipment of ICFI

which is measured at fair value in
determining the recoverable value for
investment in a subsidiary:
- Long term leasehold land ^ 1,700,000 - - 1,700,000
- Building ^ 3,700,000 - - 3,700,000
* The valuation method for investment properties is based on comparable market transaction that considers sales
of similar properties that have been transacted in the open market.
The fair value of the investment properties as at 31 December 2022 is determined by the directors based on their
estimate. The estimation of the directors is derived based on the valuation report as at 31 December 2021.
^
The valuation method for the long term leasehold land and building are disclosed in Note 14.
There were no transfers between the various fair value measurement levels during the financial year.
31 December 2022
25. Financial risk management objectives and policies

The Group is exposed to financial risks arising from their operations and the use of financial instruments. The key
financial risks include credit risk, liquidity risk and foreign currency risk.
The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are
executed by the Chief Financial Officer, Head of Treasury and Head of Credit Control. The Audit Committee
provides independent oversight to the effectiveness of the risk management process.
It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall
be undertaken and do not apply hedge accounting.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned
financial risks and the objectives, policies and processes for the management of these risks.
(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty
default on its obligations. The Group’s exposure to credit risk arises primarily from trade and other receivables.
For other financial assets (including cash and bank balances), the Group minimises credit risk by dealing
exclusively with high credit rating counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s
policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to
bad debts is not significant. For transactions that do not occur in the country of the relevant operating unit,
the Group does not offer credit terms without the approval of the Head of Credit Control.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected
credit losses. The provision rates are based on days past due for groupings of various customer segments with
similar loss patterns (i.e., by geographical region, product type, customer type and rating, and coverage by
letters of credit or other forms of credit insurance). The calculation reflects the probability-weighted outcome,
the time value of money and reasonable and supportable information that is available at the reporting date
about past events, current conditions and forecasts of future economic conditions.
Set out below is the information about the credit risk exposure on the Group’s trade receivables using a
provision matrix:
Days past due

Current 1-30 days 31-60 days 61-90 days >90 days Total
RM RM RM RM RM RM
31 December 2022
Expected credit loss rate 0.01% 0.10% 0.75% 0.39% 98.87%
Estimated total gross
carrying amount at default 27,719,829 10,240,050 1,133,050 781,823 321,544 40,196,296
Expected credit loss 1,992 10,709 8,442 3,045 317,896 342,084
31 December 2021
Expected credit loss rate 0.13% 0.25% 3.33% 4.41% 99.70%
Estimated total gross
carrying amount at default 23,719,904 6,625,644 463,435 44,713 403,449 31,257,145
Expected credit loss 30,795 16,345 15,454 1,970 402,235 466,799
31 December 2022
25. Financial risk management objectives and policies (cont’d)

(a) Credit risk (cont’d)
Exposure to credit risk
At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:
- the carrying amount of each class of financial assets recognised in the statement of financial position.
- an amount of RM1,069,950 (2021: RM971,120) relating to corporate guarantee provided by the Company
to several banks for its subsidiaries. As at 31 December 2022 and 2021, the Company has not recognised
any financial liability relating to the corporate guarantees given to its subsidiaries as the subsidiaries did
not default on any credit facilities.
Information regarding credit enhancements for trade receivables is disclosed in Note 16.
Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the country and industry sector profile of
its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables
at the reporting date is as follows:
Group
2022 2021
RM % of total RM % of total
By country:
Malaysia 34,540,766 86.67% 26,590,668 86.36%
Asia 5,172,340 12.98% 4,024,268 13.07%
Other countries 141,106 0.35% 175,410 0.57%
39,854,212 100.00% 30,790,346 100.00%
By industry sectors:
Biscuits manufacturing 5,138,243 12.89% 4,165,363 13.53%
Beverages manufacturing 372,229 0.94% 116,415 0.38%
Trading division 34,343,740 86.17% 26,508,568 86.09%
39,854,212 100.00% 30,790,346 100.00%
Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are disclosed in Note 16. Deposits with
banks that are neither past due nor impaired are placed with or entered into with reputable banks with high
credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 16.
31 December 2022
25. Financial risk management objectives and policies (cont’d)
(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations
due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from
mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is
to maintain sufficient levels of cash or cash convertible investments to meet its working capital requirements
and maintain available banking facilities at a reasonable level to its overall debt position.
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting
date based on contractual undiscounted repayment obligations.
Group Company
2022 2021 2022 2021
RM RM RM RM
Trade and other payables

- On demand or within 1 year 58,319,651 56,341,109 1,352,712 1,374,665
Other payables
- One to five years - 205,411 - -
58,319,651 56,546,520 1,352,712 1,374,665
(c) Foreign currency risk
The Group is exposed to transactional currency risk primarily through sales that are denominated in a
currency other than the functional currency of the operations to which they relate. Foreign exchange
exposures in transactional currencies other than functional currency of the Group entities are kept to an
acceptable level. The Group does not engage in any formal hedging activities.

Sensitivity analysis of foreign exchange rate changes
As at 2022 As at 2021
RM/United States Dollars (USD) exchange rate +/- 2.00% +/- 2.00%
USD denominated accounts receivable (RM) 820,472 386,762
Net income (RM) +/- 16,409 +/- 7,735
RM/Singapore Dollars (SGD) exchange rate +/- 2.50% +/- 2.50%

SGD denominated accounts receivable (RM) 3,447,424 3,937,705
Net income (RM) +/- 86,186 +/- 98,443
31 December 2022
26. Capital management
The Group’s objectives of managing capital are to safeguard the Group’s ability to continue in operations as a going
concern in order to provide fair returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. In order to maintain the optimal capital structure, the Group
may, from time to time, adjust the dividend payout to shareholders, return capital to shareholders and issue new
shares, where necessary. For capital management purposes, the Group considers shareholders’ equity and total
liabilities to be the key components in the Group’s capital structure. The Group monitors capital on the basis of
the gearing ratio. The ratio is calculated as the total liabilities to total equity. Total equity is the sum of total equity
attributable to shareholders. The gearing ratio as at 31 December 2022 and 2021, which are within the Group’s
objectives for capital management, are as follows:
2022 2021
RM RM

Total equity 141,100,750 139,019,836
Gearing ratio 51% 49%
27. Segment information
For management purposes, the Group is organised into business units based on their products and services, and
has three reportable operating segments as follows:
I. The biscuit manufacturing segment is in the business of manufacture and sales of biscuits.
II. The beverage manufacturing segment is in the business of manufacture and wholesale of coffee mix and all
kinds of foodstuff.
III. The trading division segment is in the business of sales and distribution of biscuits, confectionery and other
foodstuff.
Except as indicated above, no operating segments have been aggregated to form the above reportable operating
segments.
Management monitors the operating results of its business units separately for the purpose of making decisions
about resource allocation and performance assessment. Segment performance is evaluated based on operating
profit or loss which, in certain respects as explained in the table below, is measured differently from operating
profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes
are managed on a group basis and are not allocated to operating segments.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with
third parties.
27. Segment information (cont’d)
124
Biscuit Beverage Trading
manufacturing division manufacturing division division Consolidated
2022 2021 2022 2021 2022 2021 2022 2021

31 December 2022
RM RM RM RM RM RM RM RM
Revenue
Revenue 236,827,984 216,206,837 6,836,649 7,000,863 245,098,360 225,495,285 488,762,993 448,702,985 (A)
Results
Segment profit 11,513,402 14,399,385 125,074 367,573 25,977,983 25,355,828 37,616,459 40,122,786 (B)
Profit from
inter-segment sales (99,479) 49,925
Other income 650,806 543,497

Finance cost (2,653) (3,325)
Unallocated expenses (2,723,979) (3,420,418)

Profit before tax 35,441,154 37,292,465
Income tax expense (9,360,240) (10,052,461)
Profit net of tax 26,080,914 27,240,004
(A) Revenue reported above represents revenue generated from the reportable segments. Inter-segment sales for the current year is RM170,568,658
(2021: RM152,870,140).
(B) Segment profit represents the profit earned by each segment without allocation of the central administration costs, investment income, financial
costs and income tax expense. This is the measure reported to the decision maker for the purposes of resources allocation and assessment of
segment performance.
27. Segment information (cont’d)
Biscuit Beverage Trading

manufacturing division manufacturing division division Consolidated
2022 2021 2022 2021 2022 2021 2022 2021

RM RM RM RM RM RM RM RM
Assets
Segment assets 113,844,632 110,873,386 7,271,973 7,060,151 61,066,838 58,857,320 182,183,443 176,790,857
Unallocated assets 30,652,505 30,362,604
Total assets 212,835,948 207,153,461
Liabilities
Segment liabilities 53,673,840 49,998,307 1,099,082 1,523,227 15,487,582 15,133,098 70,260,504 66,654,632
Unallocated liabilities 1,474,694 1,478,993
Other segment
information
Depreciation 5,340,782 5,318,993 222,898 217,422 1,130,513 1,175,780 6,694,193 6,712,195
Unallocated expense 25,626 24,865
6 ,719,819 6,737,060
Additions of
non-current assets 3,674,664 2,015,022 7,697 4,811 2,622,813 732,751 6,305,174 2,752,584
Unallocated expense 5,499 3,709
6,310,673 2,756,293

Non cash expense other
than depreciation 401,344 474,224 29,802 3,035 (5,277) (53,235) 425,869 424,024
Unallocated expense 1,103 2

426,972 424,026
125
31 December 2022
31 December 2022
28. Dividends

Group and Company
2022 2021
RM RM
Recognised and paid during the financial year:

Dividends paid on ordinary shares:
- Third Interim single-tier dividend for 2020: 2 sen per share - 16,000,000
- First Interim single-tier dividend for 2021: 1.5 sen per share - 11,999,996
- Second Interim single-tier dividend for 2021: 1 sen per share 8,000,000 -
- First Interim single-tier dividend for 2022: 1 sen per share 8,000,000 -
- Second Interim single-tier dividend for 2022: 1 sen per share 8,000,000 -
24,000,000 27,999,996
Declared but not recognised as a liability as at 31 December:

- Second Interim single-tier dividend for 2021: 1 sen per share - 8,000,000
- Third Interim single-tier dividend for 2022: 1 sen per share 8,000,000 -
8,000,000 8,000,000
On 28 February 2023, the Directors declared a third interim single-tier dividend of 1 sen in respect of the financial
year ended 31 December 2022 on 800,000,000 ordinary shares, amounting to a dividend payable of RM8,000,000.
Such dividend will be payable on 5 April 2023.
29. Authorisation of financial statements for issue
The financial statements for the year ended 31 December 2022 were authorised for issue in accordance with a
resolution of the Directors on 8 March 2023.
Top 10 Properties of the Group
Location of Description Tenure of Existing Use Land Area/ Approximate Net Book
Property Land Build-up Area Age of Value as at
Building 31.12.22
RM
Hup Seng Perusahaan

Makanan (M) Sdn. Bhd.
Lot 1336 Single storey Freehold Warehouse/ 9,940 sq. m/ 23 years 9,733,065
14-A, Jalan Kilang detached factory office 13,285.27 sq. m
Kawasan Perindustrian an annex with 3
Tongkang Pecah storey office building
83010 Batu Pahat incorporating a
Johor Darul Ta’zim basement area
PTD 1858 Single storey 60 years Factory/ 20,234.11 sq. m/ 40 years 11,318,668
14, Jalan Kilang detached factory leasehold office 14,829.52 sq. m
Kawasan Perindustrian an annex with 2 (Expiring
Tongkang Pecah storey office building 24.05.2040)
83010 Batu Pahat and other ancillary
Johor Darul Ta’zim buildings
PTD 1127 HS(D) 38435 Single storey 60 years Store 4,047.00 sq. m/ - 755,223
(Formerly HS(D) 7577) detached factory leasehold 2,091.40 sq. m
4, Jalan Sampan (Expiring
Kawasan Perindustrian 07.11.2037)
Tongkang Pecah
83010 Batu Pahat
Johor Darul Ta’zim
PTD 1853 HS(D) 10338 Single storey 60 years Rented out 6,647.03 sq. m/ 34 years 1,069,145
9, Jalan Perahu detached factory leasehold (Expiring 5,160.60 sq. m
Kawasan Perindustrian cum 2 storey office (Expiring 30.09.2025)
Tongkang Pecah building 23.03.2040)
83010 Batu Pahat
PTD 1871 HS(D) 11676 Single storey 60 years Factory/ 4,047.00 sq. m/ 30 years 704,001
1A, Jalan Kapal detached factory leasehold warehouse 1,880.38 sq. m
Kawasan Perindustrian (Expiring
Tongkang Pecah 26.09.2040)
83010 Batu Pahat
Top 10 Properties of the Group (cont’d)
Location of Description Tenure of Existing Use Land Area/ Approximate Net Book
Property Land Build-up Area Age of Value as at
Building 31.12.22
RM
Hup Seng Perusahaan

Makanan (M) Sdn. Bhd.
PTD 1860 HS(D) 12111 3 storey office 60 years Vacant 4,805.04 sq. m/ 32 years 5,432,488
3, Jalan Kapal building cum leasehold 4,264.29 sq. m
Kawasan Perindustrian single storey factory (Expiring
Tongkang Pecah building 21.10.2041)
83010 Batu Pahat
Lot 766 HS(M) 672 4 storey factory Freehold 6-Vacant 14,822 sq. m/ 25 - 31 years 12,946,204
6, 18, 18.1, 18.2 & 18.3 building cum office 18-Store 11,492.22 sq. m
Jalan Kilang and 4 single storey 18.1-Store
Kawasan Perindustrian factory building 18.2-Store
Tongkang Pecah 18.3-Vacant
83010 Batu Pahat
Hup Seng Hoon Yong

Brothers Sdn. Bhd.
Lot No. 305884, PN149251 1 1/2 storey 99 years Branch office/ 1,586 sq. m/ 24 years 817,233
(Formerly PT 149442) detached factory leasehold warehouse 12,050 sq. ft.
12, Hala Rapat Baru 18 (Expiring
Taman Perusahaan 25.06.2096)
Ringan Kinta Jaya
31350 Ipoh
Perak Darul Ridzuan
Lot 6574 Industrial land Freehold Car park 9,704.38 sq. m - 2,023,429
Mukim of Linau
District of Batu Pahat
In-Comix Food Industries

Sdn. Bhd.
Plo No.94 Double storey 60 years Warehouse/ 6,328.94 sq. m/ 25 years 3,883,983
Kawasan Perindustrian detached factory leasehold office/ factory 5,059 sq. m
Senai 3 (Expiring
Jalan Cyber 6 08.06.2056)
81400 Senai
Statement of Shareholdings
As at 16 March 2023
Issued Share Capital : 800,000,000

Paid-Up Share Capital : RM80,000,000.00
Class of Shares : Ordinary Shares
Voting Rights : One vote per Ordinary Share on a poll
ANALYSIS BY SIZE OF HOLDINGS AS AT 16 MARCH 2023
No. of % of No. of % of
Holdings Holders Holders Shares Shares
1 - 99 165 1.08 6,364 0.00

100 - 1,000 3,373 22.10 2,105,740 0.26
1,001 - 10,000 7,785 51.00 38,671,681 4.83
10,001 - 100,000 3,549 23.25 102,761,343 12.85
100,001 - 39,999,999 (*) 392 2.56 248,454,119 31.06
40,000,000 and above (**) 1 0.01 408,000,753 51.00
Total 15,265 100.00 800,000,000 100.00
* - Less than 5% of Issued Shares

** - 5% and above of Issued Shares
LIST OF TOP 30 SHAREHOLDERS AS AT 16 MARCH 2023
Name Of Shareholders Holdings Percentage %
1. HSB Group Sdn Bhd (HSB Group Sdn Bhd) 408,000,753 51.00
2. Citigroup Nominees (Tempatan) Sdn Bhd
- Employees Provident Fund Board 19,503,900 2.44
3. Kerk Chian Tung 11,333,333 1.42
4. Chong Swee Ching 8,040,000 1.01
5. Kuo Chee Ching 7,322,666 0.92
6. Keh (Kerk) Chu Koh 7,306,666 0.91
7. Kerk Kar Han 6,446,666 0.81
8. Kerk Han Meng 5,226,666 0.65
9. Teo Lee Tong 5,173,333 0.65
10. Teo Lee Teck 5,160,000 0.65
11. Mary Kerk Beng Ley 4,666,666 0.58
12. Kuo Liong Yok 4,233,333 0.53
13. Kuo Chee Kian 3,793,333 0.47
14. Sim Guat Keow @ Sim Han Che 3,626,666 0.45
15. Kuo Chee Hau 3,560,000 0.45
16. Kuo Lee Yong 3,540,000 0.44
17. Kuo Chee Joo 3,500,000 0.44
18. Ng Ee Kim 3,443,333 0.43
19. Kuo Lee Ai 3,406,666 0.43
20. Kerk Ke Yee 3,333,333 0.42
Statement of Shareholdings (cont’d)
As at 16 March 2023
LIST OF TOP 30 SHAREHOLDERS AS AT 16 MARCH 2023 (cont’d)
Name Of Shareholders Holdings Percentage %
21. Kuo Lee Hun 3,113,333 0.39

22. Wan Lay Hoon 3,066,666 0.38
23. Lem Leh Lee @ Lim Mok Lee 2,840,000 0.36
24. Kuo Chee Yoong 2,766,666 0.35
25. Tan Beng Hong 2,653,333 0.33
26. Tan Leong Choo 2,314,466 0.29
27. Chooi Yuen Theng 2,133,333 0.27
28. Kuo Chee Koon 2,013,333 0.25
29. Quah Kim Hiang 1,885,400 0.24
30. Teo Lay Gak 1,866,666 0.23
INFORMATION ON SUBSTANTIAL HOLDER’S HOLDINGS AS AT 16 MARCH 2023
Name Of Shareholder Holdings Percentage %
HSB Group Sdn Bhd (HSB Group Sdn Bhd) 408,000,753 51.00
LIST OF DIRECTORS WITH REGISTERED SHAREHOLDINGS AS AT 16 MARCH 2023
Direct Interest Deemed Interest

No. of Percentage No. of Percentage
Name Of Directors Shares % Shares %
1. Kerk Chiew Siong 1,333,333 0.17 11,373,333 # 1.42

2. Kerk Chian Tung 11,333,333 1.42 - -
3. Teo Lee Teck 5,160,000 0.65 533,333 # 0.07
4. Kerk Kar Han 6,446,666 0.81 500,000 # 0.06
5. Kuo Liong Yok 4,233,333 0.53 3,316,666 # 0.41
6. Kerk Shiang Yih 653,333 0.08 - -
7. Raja Khairul Anuar Bin
Raja Mokhtar - - - -
8. Lim Poh Seong - - - -
9. Dr. Voon Yuen Hoong - - - -
10. Ho Wei Lih - - - -
Note:
# Deemed interested by virtue of his interest pursuant to Section 59(11)(c) of the Companies Act, 2016.
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Thirty-First Annual General Meeting (“31st AGM”) of Hup Seng Industries
Berhad (“the Company”) will be held at the Mezzanine Floor, The Katerina Hotel, 8, Jalan Zabedah, 83000 Batu Pahat,
Johor Darul Ta’zim on Thursday, 18 May 2023 at 9.00 a.m. for the following purposes:-
AGENDA
ORDINARY BUSINESS
1. To receive the audited financial statements of the Company for the financial year ended Please refer to
31 December 2022 together with the reports of the Directors and auditors thereon. Explanatory Note A
2. To approve the payment of Directors’ fees of RM1,780,296 for the financial year ended
31 December 2022. Resolution 1
3. To approve the payment of Directors’ benefits in accordance with Section 230(1) of the
Companies Act 2016 up to an amount of RM110,000 from 19 May 2023 until the next
Annual General Meeting (“AGM”) of the Company. Resolution 2
4. To re-elect the following Directors who retire by rotation in accordance with Article 103
of the Company’s Constitution and being eligible, offer themselves for re-election:-
i. Mr. Lim Poh Seong Resolution 3
ii. Ms. Kerk Chian Tung Resolution 4
iii. Mr. Teo Lee Teck Resolution 5
5. To re-elect the following Director who retire in accordance with Article 112 of the
Company’s Constitution, being the first AGM after her appointment, and being eligible,
offer herself for re-election:-
i. Ms. Kerk Shiang Yih Resolution 6
6. To re-appoint Ernst & Young PLT, the retiring auditors, as the auditors of the Company
until the conclusion of the next AGM and to authorise the Directors to fix their
remuneration. Resolution 7
Notice of Annual General Meeting (cont’d)
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolution:-
7. ORDINARY RESOLUTION
CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTOR
“THAT approval be and is hereby given to Raja Khairul Anuar bin Raja Mokhtar, 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 AGM of the Company.” Resolution 8
8. To transact any other business that can be transacted in an annual general meeting of
which due notice shall have been received.
FURTHER NOTICE IS HEREBY GIVEN that for the purpose of determining a member who shall be entitled to attend
this 31st AGM, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. to issue a Record of Depositors
as at 9 May 2023 (“General Meeting Record of Depositors”) and only a Depositor whose name appears on the General
Meeting Record of Depositors as at 9 May 2023 shall be entitled to attend the said meeting or appoint proxies to attend
and/or vote on his/her behalf.
BY ORDER OF THE BOARD
LEE WAI NGAN (LS0000184)

TAN KOK AUN (MACS01564)
Company Secretaries
Kuala Lumpur
20 April 2023
EXPLANATORY NOTE A
This Agenda item is meant for discussion only as under the provisions of Sections 248(2) and 340(1)(a) of the Companies
Act 2016 and the Company’s Constitution, the audited financial statements do not require the formal approval of
shareholders. As such, this item is not put forward for voting.
EXPLANATORY NOTES ON ORDINARY AND SPECIAL BUSINESSES
(i) Resolution 2 – Directors’ Benefits
Section 230(1) of the Companies Act 2016 requires that the fees of the Directors and any benefits payable to
the Directors of a listed company and its subsidiaries shall be approved at a general meeting. Pursuant thereto,
shareholders’ approval will be sought at this AGM for the payment of benefits payable to Directors for the period
from 19 May 2023 up to the next AGM. The estimated amount of Directors’ Benefits for the period from 19 May
2023 up to the next AGM amounts to RM110,000. The benefits is comprised of meeting allowances and overseas
trip (if any). In the event that the proposed Directors’ benefits payable are insufficient due to an enlarged size of the
board of directors, approval will be sought at the next AGM for additional Directors’ benefits to meet the shortfall.
(ii) Resolution 8 – Continuing in office as Independent Non-Executive Director
The Ordinary Resolution 8 proposed under Item No. 7 of the Notice of 31st AGM relates to the approval by
shareholders for the named director to continue in office as an Independent Non-Executive Director. The
Nomination Committee and the Board have assessed the independence of the director who has served as an
Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years. The Board
is satisfied that the director has met the independence guidelines as set out in Chapter 1 of the Main Market Listing
Requirements. The length of his service does not interfere with his ability and exercise of independent judgement
as an Independent Director. Therefore, the Board has recommended that the approval of the shareholders be
sought through a two-tier voting process for the continuing of office of Raja Khairul Anuar bin Raja Mokhtar as
an Independent Non-Executive Director of the Company.
NOTES:
1. A member entitled to attend and vote at the AGM is entitled to appoint a proxy or proxies to attend and vote
in his stead. A proxy may but need not be a member of the Company and there shall be no restriction as to the
qualification of the proxy. A proxy appointed to attend and vote at a meeting of the Company shall have the same
rights as the member to speak at the meeting.
2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. Where a
member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of
his holdings to be represented by each proxy.
3. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry
(Central Depositories) Act 1991 (“SICDA”) which holds ordinary shares in the Company for multiple beneficial
owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt
authorised nominee may appoint in respect of each omnibus accounts it holds. Where a member is an authorised
nominee as defined under SICDA, it may appoint one (1) proxy in respect of each Securities Account it holds with
ordinary shares of the Company standing to the credit of the said Securities Account.
4. The instrument appointing a proxy must be deposited at the Registered Office, 3A Mezzanine Floor, Jalan Ipoh
Kecil, 50350 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the AGM or
any adjournment thereof. The last date and time for lodging the form of proxy is Tuesday, 16 May 2023 at 9.00 a.m.
5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly
authorised in writing or if such appointer is a corporation under its common seal or by signature in accordance
with section 66(2) of the Companies Act 2016. Any authority pursuant to which such an appointment is made by
a power of attorney must be deposited with the Registered Office of the Company at 3A, Mezzanine Floor, Jalan
Ipoh Kecil, 50350 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the 31st
AGM or adjourned general meeting at which the person named in the appointment proposes to vote. A copy of the
power of attorney may be accepted provided that it is certified notarially and/or in accordance with the applicable
legal requirements in the relevant jurisdiction in which it is executed.
6. A corporate member who has appointed a representative, please deposit the ORIGINAL certificate of appointment
with the Registered Office of the Company at 3A, Mezzanine Floor, Jalan Ipoh Kecil, 50350 Kuala Lumpur. The
certificate of appointment should be executed in the following manner:
(i) If the corporate member has a common seal, the certificate of appointment should be executed under seal in
accordance to the Section 66(2) of the Companies Act, 2016.
(ii) If the corporate member does not have a common seal, the certificate of appointment should be affixed with
the rubber stamp of the corporate member (if any) and executed by:
(a) at least two (2) authorised officers, of whom one shall be a director; or
(b) any director and/or authorised officers in accordance with the laws of the country under which the
corporate member is incorporated.
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Form Of Proxy
CDS Account No. No. of Shares Held
199101015786 (226098-P)
I/We Tel:
(Full name in block, NRIC/Passport/Company No)
of
(Full address)
being a member/members of Hup Seng Industries Berhad, hereby appoint:
Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %
Address
*and / or
Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %
Address
or failing him, the Chairman of the Meeting, as my/our proxy/proxies to vote for *me/us and on *my/our behalf at the
Thirty-First Annual General Meeting (“31st AGM”) of the Company to be held at the Mezzanine Floor, The Katerina
Hotel, 8, Jalan Zabedah, 83000 Batu Pahat, Johor Darul Ta’zim on Thursday, 18 May 2023 at 9.00 a.m. and at every
adjournment thereof *for/against the resolutions to be proposed thereat.
*My/Our proxy is to vote as indicated below: -
No. Resolutions For Against
Resolution 1 To approve the payment of Directors’ fees for the financial year ended
31 December 2022.
Resolution 2 To approve the payment of Directors’ benefits up to an amount of RM110,000

from 19 May 2023 until the next AGM of the Company.
Resolution 3 To re-elect Mr. Lim Poh Seong as a Director of the Company.
Resolution 4 To re-elect Ms. Kerk Chian Tung as a Director of the Company.
Resolution 5 To re-elect Mr. Teo Lee Teck as a Director of the Company.
Resolution 6 To re-elect Ms. Kerk Shiang Yih as a Director of the Company.
Resolution 7 To re-appointment Ernst & Young PLT as auditors of the Company.
Resolution 8 Continuing in office of Raja Khairul Anuar bin Raja Mokhtar as

Independent Non-Executive Director
Please indicate with an “X” in the space provided whether you wish your votes to be cast for or against the resolutions. In the
absence of such specific directions, your proxy will vote or abstain as he thinks fit.
Dated this day of 2023

Signature of Member(s) or Common Seal
Notes:
1. A member entitled to attend and vote at the AGM is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may
but need not be a member of the Company and there shall be no restriction as to the qualification of the proxy. A proxy appointed to
attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.
2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. Where a member appoints more
than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.
3. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories)
Act 1991 (“SICDA”) which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus
account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus
accounts it holds. Where a member is an authorised nominee as defined under SICDA, it may appoint one (1) proxy in respect of each
Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.
4. The instrument appointing a proxy must be deposited at the Registered Office, 3A Mezzanine Floor, Jalan Ipoh Kecil, 50350 Kuala
Lumpur not less than forty-eight (48) hours before the time appointed for holding the AGM or any adjournment thereof. The last date
and time for lodging the form of proxy is Tuesday, 16 May 2023 at 9.00 a.m.
Please fold here
Stamp
Hup Seng Industries Bhd

199101015786 (Company No.226098-P)
3A, Mezzanine Floor

Jalan Ipoh Kecil
50350 Kuala Lumpur
Please fold here
5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if
such appointer is a corporation under its common seal or by signature in accordance with section 66(2) of the Companies Act 2016. Any
authority pursuant to which such an appointment is made by a power of attorney must be deposited with the Registered Office of the
Company at 3A, Mezzanine Floor, Jalan Ipoh Kecil, 50350 Kuala Lumpur not less than forty-eight (48) hours before the time appointed
for holding the 31st AGM or adjourned general meeting at which the person named in the appointment proposes to vote. A copy of the
power of attorney may be accepted provided that it is certified notarially and/or in accordance with the applicable legal requirements
in the relevant jurisdiction in which it is executed.
6. A corporate member who has appointed a representative, please deposit the ORIGINAL certificate of appointment with the Registered
Office of the Company at 3A, Mezzanine Floor, Jalan Ipoh Kecil, 50350 Kuala Lumpur. The certificate of appointment should be
executed in the following manner:
(i) If the corporate member has a common seal, the certificate of appointment should be executed under seal in accordance to the
Section 66(2) of the Companies Act, 2016.
(ii) If the corporate member does not have a common seal, the certificate of appointment should be affixed with the rubber stamp of
the corporate member (if any) and executed by:
(a) at least two (2) authorised officers, of whom one shall be a director; or
(b) any director and/or authorised officers in accordance with the laws of the country under which the corporate member is
incorporated.

199101015786 (26098-P)
199101015786 (26098-P)
Annual Report
2022
Plaza 138, Suite 18.03, 18th Floor, 138 Jalan Ampang, 50450 Kuala Lumpur.
Tel (03) 2161 5466 • Fax (03) 2163 6968
www.hsib.com.my

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Annual Report

Hup Seng Industries Berhad

Kerk Chiew Siong

Teo Lee Teck Registered Office

2 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

Hup Seng Industries Berhad

Hup Seng Perusahaan Hup Seng Hoon Yong In-Comix Food

Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 3

Revenue Profit After Tax

Earnings Per Share Return On Equity

Net Dividends Per Share Dividends Payout

4 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

Financial Year Ended 31.12.2018 31.12.2019 31.12.2020 31.12.2021 31.12.2022

Key Results (RM)

Revenue 307,372,915 309,539,034 327,325,449 295,832,845 318,194,335

Other Key Data (RM)

Total Assets 236,464,405 234,205,813 228,779,958 207,153,461 212,835,948

Financial Ratio (%)

Revenue Growth 2.6 0.7 5.7 (9.6) 7.6

Earnings per Share sen 5.1 4.9 5.0 3.4 3.3

Total 100.0 100.0 100.0 100.0 100.0

Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 5

Kerk Kar Han

6 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

Kerk Chiew Siong

He is the uncle of Kerk Chian Tung, Teo Lee Teck, Kerk

Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 7

Kerk Chian Tung

Kerk Chian Tung is a member of the Australian Society of Certified Practising

8 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

Teo Lee Teck

He started his career with HSPM in 1977 as a Chocolate

He has been appointed as HSPM’s Quality Management

He was appointed as a Director for ICFI on 7 July

He is the nephew of Kerk Chiew Siong and cousin of

Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 9

Kuo Liong Yok

10 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

Kerk Shiang Yih Raja Khairul Anuar Bin

She is the niece of Kerk Chiew Siong and cousin

Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 11

Lim Poh Seong

He is a Fellow Member of The Association of Chartered

12 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

Dr. Voon Yuen Hoong

Dr. Voon holds a Bachelor of Arts (Honours) in

Dr. Voon has more than 20 years of combined experience

Dr. Voon is currently a Tax Partner at Crowe Malaysia

Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 13

14 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

Y. Bhg. Dato’ Keh (Kerk) Chu Koh

Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 15

Currently the Group has three wholly owned subsidiaries namely:

2. Products and Brands

16 Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P)

2. Products and Brands (cont’d)

3. Overview of Business Operations

Annual Report 2022 • Hup Seng Industries Berhad 199101015786 (226098-P) 17