SOUTHERN ACIDS (M) BERHAD 35TH ANNUAL GENERAL MEETING 24 AUGUST 2016 SHAREHOLDERS BRIEFING

Shareholders Briefing Information This briefing is mainly the summary of the key highlights of the Chairman’s Statement and Management Discussion And Analysis as stated in the Company’s 2016 Annual Report (“2016 AR”). Information contained in this briefing is solely based on 2016 AR and all other information available from Bursa website.

Presentation Contents Southern Acids (M) Berhad (“the Company or SAB”) & Its Subsidiaries (“Southern Acids”) Financial Highlights Review Of Core Businesses Prospects Questions & Answers

SOUTHERN ACIDS FY2016 FINANCIAL HIGHLIGHTS

SELECTED FINANCIAL HIGHTLIGHTS - FY2016 Vs FY2015 FY2016 (RM’000) FY2015 (RM’000) Change 503,414 536,665 Revenue 6.2% Profit before tax 36,916 43,691 15.5% 25,964 34,106 Profit for the year 23.9% Earnings per share 18.2 sen 20.1 sen 9.5% Dividend (net) 5.0 sen No change 27.5% 24.9% Dividend pay-out ratio 10.4%

SELECTED FINANCIAL HIGHLIGHTS - FY2016 Vs FY2015 FY2016 (RM’000) FY2015 (RM’000) Change 626,372 604,922 Total Assets 3.5% Total Liabilities 67,854 65,847 3.0% Net Current Assets 225,424 211,364 6.7% Equity attributable to Shareholders of the Company 513,942 493,392 4.2%

Southern Acids Financial Results FY2016 RM’000 FY2015 Variance % Revenue 503,414 536,665 (33,251) (6.2) PBT 36,916 43,691 (6,775) (15.5) Highlights:- Revenue was lower by 6.2% in FY2016 compared to FY2015; and PBT was lower by 15.5% in FY2016 compared to FY2015. In summary, Oleochemical and Healthcare Divisions achieved a higher PBT whereas Plantation & Milling reported a lower PBT in FY2016. Profit before tax up mainly because of higher sales and better margin earned on sales recorded by the oleochemical and the plantation division.

REVIEW OF BUSINESS DIVISIONS SOUTHERN ACIDS FY2016 REVIEW OF BUSINESS DIVISIONS

Review of Oleochemical Division FY2016 RM’000 FY2015 Variance % Revenue 284,020 349,850 (65,830) (18.8) PBT 16,269 9,038 7,231 80.0 Highlights:- The 18.8% lower in revenue was mainly due to 15.8% lower in sales volume. The lower demand from major importing countries has caused stiff competition in international market; and Analysis of the RM7.2m increase in PBT:- Operational profit; the efficient sourcing of raw material has cushioned the impact from lower sales. The division achieved a marginal increase of RM0.9m in PBT; and Non-Operational profit; out of the RM7.2m, RM6.3m was contributed mainly by gain in forex (both realized and unrealized).

Prospects of Oleochemical Division This division will remain to be challenging in FY2017 and it is expected to face the same uncontrollable factors as follow, amongst others:- Economy situation of major importing countries which will determine the market demand and pricing; Higher operating costs due to the increase in regulated price in Malaysia. For example, natural gas price and minimum wages; Changes in Malaysia foreign labor policy; Volatility in USD/MYR exchange rate; and Volatility in CPO price.

Oleochemical Division’s Plan For FY2017 In view of the anticipated challenges in FY2017, the following are among the key identified measures to be taken:- To implement cost optimization; To increase sales to high margin market via more efficient marketing strategy; and To look into automation processes to reduce dependency on workers and improve efficiency and productivity; To look into the possibility of alternative fuel source to reduce the dependency on external energy supply; and To manage the forex and commodity hedging more diligently.

Review of Plantation & Milling Division FY2016 RM’000 FY2015 Variance % Revenue 135,010 106,041 28,969 27.3 PBT 9,101 23,660 (14,559) (61.5) Highlights:- The increase in revenue was mainly contributed from the new 60MT/hour palm oil mill (“POM”) commissioned in August 2015; Despite higher revenue, operational profit was lower by RM14.6m was due to the following factors:- The El Nino effect had severely affected the fresh fruit bunches (“FFB”) supply and its quality; In view of the low FFB supply, the higher price for external outsourced FFB was higher; and The average selling price (“ASP”) of CPO realized was lower compared to the ASP of CPO in FY2015.

Prospects Of Plantation & Milling Division The performance of this division in FY2017 will be affected by the following factors, amongst others:- Impact of post-El Nino on FFB production and its quality; Changes in Indonesia’s regulated cost such as minimum wages (yearly affair) and export levy; CPO selling price; and Effectiveness on the implementation status of biodiesel mandate by Malaysia and Indonesia governments.

Plantation & Milling Division’s Plan For FY2017 In view of the anticipated challenges in FY2017, the following are among the key identified measures to be taken:- To implement cost optimization; To purchase external FFB more competitively; To look into mechanization for plantation operations in order to reduce the dependency on workers and to improve efficiency and productivity; and To look into the prospect of increasing brown field estate.

Review of Healthcare Division FY2016 RM’000 FY2015 Variance % Revenue 71,257 66,761 4,496 6.7 PBT 13,529 9,306 4,223 45.4 Highlights:- The 6.7% higher in revenue was contributed by 11.0% higher in average revenue per patient (“ARPP”); and Analysis of the RM4.2m increase in PBT:- Operational profit; higher ARPP recorded in FY2016 contributed additional PBT of RM2.7m compared to PBT in FY2015; and Non-Operational profit; RM1.5m was contributed mainly from the reversal of accounting provisions which no longer required in FY2016.

Prospects of Healthcare Division The performance of this division in FY2017 may be affected by the following factors, amongst others:- Competition from nearby hospitals; Recruiting and training the key human resources; and Economic outlook that may affect patients spending behavior.

Healthcare Division’s Plan For FY2017 The main objective of this division is to at least maintain its market share and improve its bottom line for FY2017. Among the identified measures to be taken are as follows:- Cost optimization; To enhance branding and awareness via strategic marketing activities; To continue our staff retention program; and To improve service delivery via gradual upgrading program.

Prospects of Southern Acids Based on the prospects commentary, the performance of Southern Acids will remain challenging in FY2017.

SOUTHERN ACIDS FY2016 QUESTIONS & ANSWERS