racing ahead with healthcare it - tmc life … · 2016” by frost & sullivan malaysia;...

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HEALTHCARE IT

ANNUAL REPORT 2016

Racing ahead with

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To be the premier provider of outstanding value-basedmedical services in South East Asia

To provide exceptional medical services andcompassionate care to our patients and patrons through continuous effort, dedication, commitment and the application of world class standards in all of our endeavours

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02 Corporate Information03 Corporate Structure04 Corporate Profile06 Chairman’s Statement10 Corporate Social Responsibility13 Directors’ Profile18 Profile of Key Senior Management Team19 Corporate Directory20 Statement on Corporate Governance31 Audit and Risk Management

Committee Report34 Statement on Risk Management and

Internal Control37 Other Corporate Disclosure39 Financial Statements108 List of Properties109 Analysis of Shareholdings112 Analysis of Warrant Holdings115 Notice to Shareholders120 Appendix A

Proxy Form

* Artist impression : illustration of Thomson Iskandar medical hub

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Audit and Risk ManagementCommittee

Chairman: Gary Ho Kuat Foong Members : Dato’ Dr. Tan Kee Kwong Claire Lee Suk Leng Freddie Heng Kim Chuan

Nominating Committee

Chairman: Gary Ho Kuat FoongMembers : Dato’ Dr. Tan Kee Kwong Claire Lee Suk Leng Kan Kheong Ng Freddie Heng Kim Chuan

Remuneration Committee

Chairperson : Claire Lee Suk LengMembers : Dato’ Dr. Tan Kee Kwong Gary Ho Kuat Foong Kan Kheong Ng Freddie Heng Kim Chuan

Company Secretaries

Seow Fei San (MAICSA 7009732)Mok Mee Kee (MAICSA 7029343)

Auditors

BDO (AF0206)Chartered AccountantsLevel 8, BDO @ Menara CenTARa360 Jalan Tuanku Abdul Rahman50100 Kuala LumpurTel: 603-2616 2888Fax: 603-2616 2970

Share Registrar

Tricor Investor & Issuing HouseServices Sdn BhdUnit 32-01, Level 32Tower A, Vertical Business SuiteAvenue 3, Bangsar South No.8, Jalan Kerinchi59200 Kuala LumpurTel: 603-2783 9299Fax: 603-2783 9222

Registered Office

802, 8th Floor, Block C,Kelana Square, 17 Jalan SS7/2647301 Petaling JayaSelangor Darul EhsanTel: 603-7803 1126Fax: 603-7806 1387

Head Office

C-13-09 Sunway NexisNo.1, Jalan PJU 5/1Dataran SunwayKota Damansara47810 Petaling JayaSelangor Darul EhsanTel: 603-6287 1111Fax: 603-6287 1212

Stock Exchange Listing

Main Market of Bursa Malaysia Stock code :0101

Websitewww.tmclife.com

ANNUAL REPORT 2016 TMC LIFE SCIENCES BERHAD (624409-A)

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C O R P O R AT EI N F O R M AT I O N

Professor Emeritus Dato’ Dr.Khalid Bin Abdul Kadir

Non-IndependentNon-Executive Chairman

Roy Quek Hong Sheng Executive Director and

Group Chief Executive Officer

Dr. Chan Boon Kheng Non-Independent

Non-Executive Director

Dato’ Dr. Tan Kee KwongIndependent


Gary Ho Kuat FoongIndependent


Claire Lee Suk LengIndependent


Kan Kheong NgNon-Independent


Freddie Heng Kim Chuan Non-Independent



ANNUAL REPORT 2016TMC LIFE SCIENCES BERHAD (624409-A)

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C O R P O R AT ES T R U C T U R EAS AT 31 AUGUST 2016



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C O R P O R AT EP R O F I L E

TMC Life Sciences Berhad

TMC Life Sciences Berhad (TMCLS) is one of the fastestgrowing healthcare groups in Malaysia. It has beenlisted on the Main Market of Bursa Malaysia SecuritiesBerhad since 2005. TMCLS has embarked on a majorexpansion programme, with significant additionalcapacity and capabilities projected to come on streamby 2020. The plans include expanding its flagshiphospital, Tropicana Medical Centre to a 600-bed hospitalwith additional critical care units, operating theatresand specialist centres. A new integrated medical hub –Thomson Iskandar – will be developed in the proposedVantage Bay Healthcare City in bustling Johor Bahru.Located just off the Causeway linking Johor andSingapore, Thomson Iskandar will house a 500-bedtertiary hospital, specialist medical suites and relatedhealth and wellness facilities.

Tropicana Medical Centre

Dedicated to Healing, Committed to Care

TMCLS’s flagship hospital, Tropicana Medical Centre,Kota Damansara (TMCKD) is located in the goldentriangle of Petaling Jaya. It is a multi-disciplinarytertiary care centre equipped with advanced medicaltechnology and modern infrastructure to deliverquality, affordable healthcare solutions and a superiorservice experience for our local, regional andinternational patients. TMCKD handles over 18,000admissions a year.

The 200-bedded medical centre was served by a panelof over 100 Consultant Specialists – highly trained withcommendable track record in their represented medicaland surgical disciplines. The core disciplines of thehospital include Fertility & Reproductive Health;Diabetic & Kidney Care; ENT, Head & Neck LaserSurgery; Orthopaedic, Spine & Sports Injury, Heart &Lung Care; Gastroenterology & Liver Care; General,Cancer & Minimally-invasive Surgery; Hand &Microsurgery; Aesthetic & Plastic Reconstructive;Ophthalmological, as well as the full range of Woman &Paediatric services.

The medical/surgical specialties andsub-specialties available at TMCKD:• Anaesthesiology• Breast & Endocrine Surgery• Cancer Surgery• Cardiology• Cardiology – Electrophysiology• Cardiology - Interventional• Colorectal Surgery• Dermatology• ENT, Head & Neck Laser

Surgery• Endocrinology• Fertility

(Reproductive Medicine) • Gastroenterology• General & Minimally-invasive

Surgery

• Hand & Microsurgery • Hepatology• Internal Medicine• Nephrology• Neurology• Neurosurgery• Obstetrics & Gynaecology• Ophthalmology • Orthopaedic• Orthopaedic – Arthroplasty• Orthopaedic – Foot & Ankle• Orthopaedic – Spine• Orthopaedic – Sports Injuries• Orthopaedic – Surgery• Paediatric • Paediatric – Cardiology• Paediatric – Neonatology• Paediatric – Neurology

• Paediatric – Orthopaedic• Paediatric – Surgery• Paediatric – Urology• Plastic & Reconstructive

Surgery• Psychiatry• Psychiatry – Child &

Adolescent• Radiology & Interventional

Radiology• Respiratory Medicine• Upper Gastrointestinal

Surgery • Urology• Vascular & Endovascular

Surgery

Recently, TMCKD has recently launched its new Specialised Centre – Orthopaedic and Trauma Centre in August2016, in addition to its existing specialised centres, ENT Head & Neck Laser Surgery Centre, Women & ChildrenCentre and Diabetic & Metabolic Centre to name a few. TMCKD’s panel of Orthopaedic Specialists are capable oftreating patients with wide ranging conditions from neck, spine, hip, knee to foot for both adults and children.



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C O R P O R AT EP R O F I L E

TMC Fertility Centre

From Hope to Joy

TMC Fertility Centre (TMCFC) was established inJanuary 1994 at Damansara Utama, Selangor. With themain facility now located within TMCKD, TMC FertilityCentre has branches located in Johor Baru, Penang,Puchong, Kepong and Ipoh (upcoming). This enablesmore couples, in the country and in the region, whoneed fertility treatment to benefit from the world-classfertility treatment and technologies offered at TMCFertility Centre.

TMC Fertility Centre offers a complete range oftechnologically-advanced fertility treatments, led by anexperienced and dedicated team of fertility specialists,embryologists, Pre-implantation Genetic Diagnosis(PGD) scientists and specialised nurses.

Over the years, TMCKD has successfully establishedrelationships with leading insurance companies - in bothdomestic and international arenas - to offer greaterconvenience and value-added services to our patients.In January 2016, TMCKD has been selected as the

Platinum Hospital of AIA Berhad and the preferredhospital of PruBSN Takaful Berhad since 2014. With ourcommitment and dedication, TMCKD is also one of thetrusted partners for many corporate companies, servingthe healthcare needs of their employees.

TMC Fertility Centre“From Hope to Joy”

Since its inception, TMCFC has successfully helpedcouples to conceive close to 4,000 babies throughvarious assisted reproductive techniques, performedover 6,000 IVF procedures and the Centre enjoys an IVFclinical pregnancy success rate of averagely 60%. Thiscommendable success rate, which is comparable tosome of the most renowned fertility centres in theworld, has contributed to its achievement of beinghonoured by the Malaysia Book of Records for the“Highest Number of IVF Babies Produced by a SingleIVF Practice” at TMC Fertility Centre, Kota Damansara -3,210 IVF births since its inception till 28 February2013.

Recently, TMCFC was named the “Best Fertility Centre2016” by Frost & Sullivan Malaysia; “Fertility ServiceProvider of the Year 2016” by Global Health & Traveland; “International Fertility Clinic of The Year 2016” byInternational Medical Travel Journal, making it a multiaward-winning and internationally renowned Centre ofExcellence.


The financial period ended 31 August 2016 for TMC Life SciencesBerhad marked another year of strong financial performance for the

Group as we continue to deliver high quality healthcare servicesto the community. TMC Life Sciences received three major

awards in 2016 - Fertility Centre of the Year by Frost &Sullivan, Fertility Service Provider of the Year by Global

Health Travel, and International Fertility Clinic of the Yearby the International Medical Tourism Journal (IMTJ).

These accolades serve to confirm TMC Life Sciences’dominant position as the top fertility service

provider in Malaysia. We intend to build onour success by expanding and extendingour services. Our two major expansionprojects – the 400-bed expansion at ourflagship hospital in Kota Damansara andthe 500-bed Iskandariah Hospital at

Vantage Bay in Johor Bahru are in the midstof obtaining regulatory approvals for

construction. We look forward to receiving therelevant approvals to enable us to begin

construction and complete the two projects by 2020.

Financial Review

Financially, this has been another sterling year for TMCLife Sciences. Our Group revenue rose by 21% toRM161.5 million for the 15 months financial periodended 31 Aug 2016, compared to the preceding 15months financial period. This was achieved throughan increase in capacity (opening of more wards andhiring of more consultants) and higher patient loadand intensity of services. With the higher revenueachieved, the Group has recorded an impressive profitbefore tax for the financial period ended 31 Aug 2016of RM25.9 million, an increase of 100% compared tothe 15 months financial period ended 31 August 2015.Excluding fair value charges for the Employee ShareOption Scheme (ESOS) of RM1.7 million and non-claimable input GST amounting to RM3.5 million, theGroup would have recorded higher EBITDA margin of21% from the current 18% for the current financialperiod ended 31 August 2016.

Dear Shareholders,

On behalf of the Board of Directors, it is my pleasure to present the AnnualReport of TMC Life Sciences Berhadfor the financial period ended 31 August 2016.


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C H A I R M A N ’ SS TAT E M E N T



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Net profit for the financial period was RM20.8 million,recording a significant increase of 62% compared to theprevious year corresponding period. The Groupachieved a higher net margin of 13% compared to 10%in previous year corresponding period.

The Group continues to be prudent in spending andmanaging the operating cash flows. The cash and bankbalances built up has reached RM204.6 million ascompared to RM191.6 million at end of the last financialyear. This is in spite of the Group having spent in totalRM41 million on capital expenditure.

Dividends

In recognition of the Group’s continued strongperformance and commitment to significantly growour healthcare platform to generate even more andbetter returns, our shareholders have seen the marketvalue of the Group’s stock rose by 31% since the endof the last financial year. We intend to further rewardour shareholders through paying out dividends so thatwe can share the Group’s profits with ourshareholders. The Board has proposed a single-tierfinal dividend of 0.154 sen for the financial periodended 31 August 2016, subject to the approval of theshareholders at the forthcoming Annual GeneralMeeting. In deciding on the quantum, the Board wasmindful of the need to balance rewarding ourshareholders with maintaining a suitable cash reserveposition to support our two major expansion projectsin Kota Damansara and Johor Bahru.

Our Group revenue rose by 21% toRM161.5 million for the 15 monthsfinancial period ended 31 Aug2016, compared to the preceding 15 months financial period.

Compliance of Corporate Governance

At TMC Life Sciences Berhad, we are committed toupholding the highest standards of corporategovernance practice throughout the Group. This isfundamental to the discharging of our responsibilities tosafeguard shareholders' investment and ultimatelyenhance shareholders' value and the financialperformance of the Group.

The Standards of practice and policy that we adhere toin accordance with the Malaysian Code on CorporateGovernance 2012 and Corporate Governance Guide:Towards Boardroom Excellence by Bursa Securities washighlighted in the Statement on Corporate Governancestated on pages 20 to 30 of this Annual Report.



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The Financial Period 2016 at aGlimpse

Apart from our strong financialperformance, the Group alsorecorded other significant highlightsin this financial period:

New Specialist Centre

In line with our aim to always striveto provide more and betterservices, the Group launched ournew Orthopaedic and TraumaCentre on 7 August 2016. With thisnew centre, we are now able toprovide the full suite of orthopaedictreatments and services from theneck all the way to the foot. TheCentre is the latest addition to ourexisting renowned Centres ofExcellence such as the multi-awardwinning TMC Fertility Centre, ENTHead & Neck Laser Surgery Centre,Women & Children’s Centre, andDiabetic & Metabolic Centre.

Capacity and Services Expansion

As laid out in the Group’s blueprint,we have expanded our hospitalcapacity and services in KotaDamansara in stages since 2014 toaccommodate the increasingnumber of patients such as theadditional outpatient clinics andspecialist suites. In the financialperiod ended 31 August 2016, wehave expanded the capacity of ourAccident & Emergency Unit. In thesame period, we opened two (2)new wards adding another 51 beds.

New services have also been addedin this financial year, including cardiacelectrophysiology and Neurosurgery.

TMC Fertility Centre (TMCFC)Poised for More Growth

TMCFC continues on a path ofaccelerated growth, with expansionplans in full swing over the pastyear aimed at bringing the brand tonew heights internationally. AMemorandum of Understandingwas signed in the middle of theyear with Victoria Hospital inYangon, Myanmar, where TMCFCwill conduct monthly clinics in thehospital.

As China transits from its one-childto two-child policy, there issignificant potential for TMCFC tooffer its renowned fertility servicesto the Chinese market. The Grouphas initiated new marketing

partnerships in China in 2016 and weexpect to be able to draw moreChinese patients to TMCFC and ourrelated facilities in the coming years.

Upholding its commitment to qualitycare and delivery services, TMCFCobtained certification from theAustralia-based ReproductiveTechnology Accreditation Committee(RTAC) in recognition of TMCFC’s highservice quality and standards.

TMCFC also introduced FertilityCounselling services in January 2016to all patients. Throughout theirtreatment process, patients haveaccess to a trained counsellor.

Support group meetings for selectedpatients have also been introduced.

To top off a year of achievements,TMCFC won a string of accolades in2016. TMCFC was named the“Malaysia Fertility Centre of the Year”by Frost and Sullivan, the“International Fertility Clinic of theYear” by the International MedicalTravel Journal (IMTJ), and “FertilityCentre of the Year” by Global Healthmagazine.

These awards provide affirmation ofTMCFC’s success in providing thehighest quality fertility services. Oursuccess has helped to put Malaysianhealthcare on the global map and wetake our responsibility as thecountry’s flagbearer in this area withpride and honour.



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TMC Care Pharmacy

On 19 July 2016, TMC Care Pharmacy was set up atVantage Bay, Stulang Laut in Johor Bahru. Strategicallylocated at the waterfront end of Vantage Bay, TMC CarePharmacy will serve both Johoreans and vistors fromother parts of Malaysia and Singapore.

TMC Care is part of the Group’s continuing drive tointroduce new services and platforms across thehealthcare continuum. We intend to grow the TMC Carebrand and platform throughout the country.

Moving forward

Global economic trends suggest that 2017 will be achallenging year for the Malaysian economy. Forexmovements against the ringgit may cause challenges,especially for the healthcare sector as many medicaland healthcare equipment are imported and priced inUS dollars.

On our part, we will continue to be prudent in ourexpenses even as we seek to continue to grow ourrange of services and develop a larger footprint in theMalaysian healthcare sector. The Group hopes to beable to be the preferred partner to serve the localcommunity and also work with the Government tomake Malaysia a preferred destination for internationalmedical tourism. In this regard, our expansion plans inKota Damansara and Johor Bahru remain key prioritiesand we eagerly await the final regulatory approvals sothat we can begin work on both projects.

At TMC Life Sciences, we believe fully in our vision tobuild an integrated private healthcare service platform.Notwithstanding potential economic headwinds, weseek to continue to grow our business through goodplanning, prudent management of resources andupholding the highest standards of health and medical care.

A Word of Appreciation

Firstly, I would like to acknowledge our patients andtheir families for the confidence they have put in uswhen they use our services. Secondly, I wish to thankthe management, specialists and staff for theirdedication, hard work and loyalty to the Group, withoutwhich, our current achievements and growth would nothave been achievable. Thirdly, I would also like toextend my sincere gratitude to our suppliers andbusiness associates for their continuing support andbusiness partnership over the years.

I would also like to express my gratitude to my fellowboard members for their invaluable contribution andcommitment. Last but not least, my sincere appreciationto all shareholders for the lasting support to the Group.

PROFESSOR EMERITUS DATO’ DR. KHALID BINABDUL KADIRCHAIRMAN


TMCKD embarked on a 3-day outreach mission toKampung Manek Urai, Kelantan - one of East CoastMalaysia’s worst hit flood areas. It is a continuous effortunder the lead of TMC Life Sciences Berhad’s Chairman -Professor Emeritus Dato’ Dr. Khalid, supported by TMCKDstaff, TMC Sports Club and members of ElPutera group.Health clinic comprises of blood pressure, blood glucose,urine test, body mass index were conducted by Doctorsand nurses, and essential medications were donated toover 300 villagers. On top of that, TMCKD alsocontributed basic necessities such as rice, oil, sugar,fortified rice kernels, clothes, books and assisted to paintand furnish a new house donated to one of the villagers.


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For the financial period ended 31 August 2016, the Group has engaged in several initiatives as listed below:

Doctors, TMCKD staff, TMC Sports Club and ElPutera members joined forces in organising health clinic for thevillagers

C O R P O R AT E S O C I A LR E S P O N S I B I L I T Y

TMC Life Sciences Berhad is committed to contribute back tothe society. Over the years, we have placed a great emphasison healthcare awareness and prevention, as well as socialenvironmental sustainability in all our corporate socialresponsibly approach.

Outreach Programme - Health Clinic



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All supporters of Pink Power Charity BowlingExtravaganza 2015 at Sunway Megalanes


As a community based health care provider, TMCKD haspartaken in several charitable projects in support ofvarious good causes.

Pink Power Charity Bowling Extravaganza

In October 2015, TMCKD once again joined hands withBreast Cancer Welfare Association Malaysia (BCWA) forthe second time to organise their annual Pink PowerCharity Bowling Extravaganza tournament that aimed tocreate awareness and spread the importance of breastscreening as part of a healthy lifestyle. Attended by morethan 200 breast cancer survivors, sponsors, volunteersand members of the public, the tournament hassuccessfully raised close to RM 45,000 and garneredgreat support from Malaysia National Bowlers such asShalin Zulkifli, Sin Li Jane and local celebrities such asJaafar Onn, Rohana Jalil and many more. The fund raisedwere donated to BCWA in support of the association’soutreach programmes and to assist the newly-diagnosedbreast cancer patients from the lower income group.

Apart from supporting local community-based charitableprojects, TMCKD also worked hand-in-hand with theexpatriate communities such as Association of AmericaMalaysia and the Association of British Women Malaysia,in raising funds for the less fortunate group by providinghealth checks and participated in their annual charityChristmas Bazaars.

Charitable Projects for Communities



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Being an active and supportive member of healthprogrammes/carnivals organised by the localcommunities, associations and societies, TMCKD hascollaborated with numerous parties such as theResident Associations, schools and mosques at KotaDamansara, Malaysia SLE Association and MalaysiaMedical Association to name a few. Health talks andchecks such as Body Mass Index analysis, body fatanalysis, blood pressure and blood glucose screeningswere conducted during the event to raise healthawareness and to educate the public on relevanthealth risks and preventive measures.

Health Programmes/Carnivalsfor the Local Communities,Associations and Societies

Medical team standby, basic screenings and health talksby TMCKD during health events

All participants listening to health talk presented byDoctors

Puberty talk by our Senior ResidentMedical Officer for the internationalschool children

Public Education Programmes

TMCKD continued to organise public health talksthroughout financial period 2016. The talks deliveredby our group of consultant specialists, certifiedcounselors and nurses, were constantly conducted toaddress on various health topics to raise public’sawareness on different health issues. It also serves asa platform to educate the community on earlydetection and prevention care.


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5 6 7 81. Professor Emeritus Dato’ Dr. Khalid

Bin Abdul Kadir2. Roy Quek Hong Sheng3. Freddie Heng Kim Chuan 4. Dr. Chan Boon Kheng5. Gary Ho Kuat Foong6. Dato’ Dr. Tan Kee Kwong7. Kan Kheong Ng8. Claire Lee Suk Leng


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D I R E C T O R S ’P R O F I L E


Mr. Roy Quek was appointed to theBoard on 2 June 2015 and assumed therole of Group Chief Executive Officer on2 September 2015. Mr. Roy Quek is aneconomist by training and received his

undergraduate degree from the LondonSchool of Economics & Political Science,

and his post graduate degree fromPeking University. He completed bothdegrees on scholarships awarded by theSingapore Government. His immediate pastappointment was Deputy Secretary in theMinistry of Home Affairs, Singapore.

Mr. Roy Quek joined the Singapore CivilService in 1994 and was a member of theelite Administrative Services. Prior to joiningthe private sector, he had served in theMinistry of Defence, Ministry of Education,Ministry of Community Development, Youthand Sports, Ministry of Health, Ministry ofHome Affairs and the Prime Minister’s Office.

Among his key achievements during his distinguished careerin the public sector, he set up and was the Founding Directorof the National Population Secretariat in the Prime Minister’sOffice, Singapore. While in the Ministry of Education, hespearheaded efforts to develop a more holistic educationsystem and in the Ministry of Health, Singapore, he played akey role in rolling out the Singapore Healthcare 2020Masterplan.

For his work in the Singapore public sector, he was awardedthe Public Administration Medal (Silver) in 2008. An avidsportsman, he represented Singapore in squash and was alsoa member of his school teams in athletics and football.

Mr. Roy Quek has no family relationship with any Directorand/or major shareholder of the Company. He has noconvictions of any offences within the past five (5) years andhas no public sanctions and/or penalties imposed by therelevant regulatory bodies during the financial period. He hasno conflict of interest with the Company.

Details of Directors’ interest in shares of the Company andits subsidiaries as at 22 November 2016 are disclosed in thepage 111 and 114 of this Annual Report.


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Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir wasappointed to the Board on 7 October 2004. He graduatedwith first-class honours in B.Med. Sc. (1973) and a firstclass honours in MBBS from Monash University, Australia in1975 and PhD in 1982. He was awarded the FRACP(Australia) and FRCP’s from Edinburgh, Glasgow, Irelandand London and the Honorary Fellowship of the AmericanCollege of Physician in June 2008 and is a Fellow of theAcademy of Science Malaysia.

Professor Emeritus Dato’ Dr. Khalid started his career as alecturer at Universiti Kebangsaan Malaysia (“UKM”) in1982, promoted to Associate Professor in 1984, Head ofDepartment of Medicine in 1985, Dean of the MedicalFaculty and Professor in 1990. From 1997-2000, he wasDirector of the new Hospital Universiti Kebangsaan Malaysia(“HUKM”) with the task of building up HUKM. Upon hisretirement in 2004, he was awarded the title of ProfessorEmeritus.

He then joined Monash University as Professor of Medicineand started the Tan Sri Jeffery Cheah Clinical School in Johor.

He was one of the pioneers of the Company and TropicanaMedical Centre and is currently the consultantEndocrinologist.

He was in the Malaysia Medical Council from 1986 to 2001,President of the Persatuan Diabetes Malaysia from 1985 to1990, President of the Malaysia Endocrine Society from1995 to 2001, Member of Council, International DiabetesFederation from 2001 to 2002, and Master of The Academyof Medicine of Malaysia from 2006 to 2008.

He is active in research and haspublished more than 310 papersin international and national peerreviewed journals. ProfessorEmeritus Dato’ Dr. Khalid BinAbdul Kadir was conferred TheNational Science Award in 1997,The Asia Pacific Nutrition Award in1996 and The Merdeka Award in2008, and delivered The TunkuAbdul Rahman Oration, AcademyMedicine Malaysia 2010, and theGold Medal for outstanding servicesto Malaysian Medical AssociationMay 2016.

Professor Emeritus Dato’ Dr. KhalidBin Abdul Kadir has no familyrelationship with any Directorand/or major shareholder of theCompany. He has no convictions ofany offences within the past five(5) years and has no publicsanctions and/or penalties imposedby the relevant regulatory bodiesduring the financial period. He has noconflict of interest with the Company.

Details of Directors’ interest in shares of the Company andits subsidiaries as at 22 November 2016 are disclosed inthe page 111 and 114 of this Annual Report.

PROFESSOR EMERITUS DATO’ DR. KHALID BIN ABDUL KADIRAged 68, Male, Malaysian

Non-Independent Non-Executive Chairman

ROY QUEK HONG SHENGAged 46, Male, Singaporean

Executive Director Group Chief Executive Officer

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Mr. Freddie Heng Kim Chuan ("Freddie") was appointedto the Board on 2 November 2016. He is currently anindependent director of Noel Gifts International Ltd (listedin Singapore) and a non-executive director of SMLCorporation Limited (listed in Australia) and ThomsonMedical Pte Ltd.

TMC Life Sciences Berhad and Thomson Medical Pte. Ltd.are related companies by virtue of Sasteria Pte. Ltd.being the major shareholder of both companies.

Freddie graduated from the London School of Economicsand Political Science with a BSc (Economics) degree.He joined Arthur Andersen & Co (London) in 1977 andlater transferred to the Singapore office in 1981, wherehe remained until 1984. Freddie had previously served asa member of the board of directors in a number ofSingapore public-listed companies including several yearsas an Executive Director in Van Der Horst Limited. Freddieis also an independent financial and management

consultant, covering mainlyareas of general business andfinancial consulting, and mergersand acquisitions.

Freddie has no family relationshipwith any Director and/or majorshareholder of the Company. He hasno convictions of any offences withinthe past five (5) years and has nopublic sanctions and/or penaltiesimposed by the relevant regulatorybodies during the financial period. Hehas no conflict of interest with theCompany.

Details of Directors’ interest in sharesof the Company and its subsidiaries asat 22 November 2016 are disclosed in thepage 111 and 114 of this Annual Report.

Dr. Chan Boon Kheng wasappointed to the Board on 12 January 2011.

He received his medical degreefrom the National University of

Singapore and he obtained aMaster of Business Administration(Honors) from the University ofChicago.

He was the Group President ofThomson Medical Group from Jan2011 until Aug 2016. Prior to that hewas appointed as an Advisor andInterim Group Chief Executive Officer(CEO) of Pantai Holdings Berhad from

2007-2010. Dr. Chan also served

as an Advisor to various healthcare companies inMalaysia and Mudabala Development Company basedin Abu Dhabi and was the CEO and General Manager ofEast Shore Hospital in Singapore under ParkwayHealthcare prior to joining Pantai Holdings Berhad.

Dr. Chan has no family relationship with any Directorand/or major shareholder of the Company. He has noconvictions of any offences within the past five (5) yearsand has no public sanctions and/or penalties imposedby the relevant regulatory bodies during the financialperiod. He has no conflict of interest with the Company.

Details of Directors’ interest in shares of the Companyand its subsidiaries as at 22 November 2016 aredisclosed in the page 111 and 114 of this AnnualReport.

DR. CHAN BOON KHENGAged 48, Male, Singaporean

Non-Independent Non-Executive Director

FREDDIE HENG KIM CHUAN Aged 63, Male, Singaporean

Non-Independent Non-Executive DirectorMember of Nominating Committee

Member of Audit and Risk Management CommitteeMember of Remuneration Committee

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Mr. Gary Ho Kuat Foong was appointed to the Board ofTMC Life Sciences Berhad on 12 January 2011.

Mr. Ho has over 36 years’ experience in corporatemanagement and finance. He currently sits on theBoard of several private and public listed companies inAustralia and Singapore respectively.

Mr. Ho holds Bachelor degrees in Commerce andScience from the University of Western Australia. He isa member of CPA Australia and the Institute ofSingapore Chartered Accountants.

Mr. Ho has no familyrelationship with any Directorand/or major shareholder of theCompany. He has no convictionsof any offences within the pastfive (5) years and has no publicsanctions and/or penaltiesimposed by the relevantregulatory bodies during thefinancial period. He has noconflict of interest with theCompany.

Details of Directors’ interest inshares of the Company and itssubsidiaries as at 22 November2016 are disclosed in the page 111and 114 of this Annual Report.

Dato’ Dr. Tan was appointed to theBoard on 3 June 2005. Dato’ Dr. Tangraduated with an MBBS from theFaculty of Medicine, University ofMalaya in 1973 and joined the

Government service as a medical officeruntil 1977. Thereafter, he served as amedical officer with the British NationalHealth Service until 1980. Dato’ Dr. Tanwas a volunteer rural health officer inSouthern Sudan, Africa from 1981-1983.In 1985, he commenced private medicalgeneral practice until 1999, when he wasmade a Deputy Minister in the Ministry ofLand and Cooperative Development, apost he held until 2004. He had previouslyserved as a Member of Parliament for

Segambut, Kuala Lumpur from 1995 until2008. Presently, Dato’ Dr. Tan is a member of

Parliament for Wangsa Maju, Kuala Lumpur.

Dato’ Dr. Tan is currently the Chairman of the Board ofGovernors of Sekolah Menengah Laki-Laki Methodist,Sentul; Chairman of Pusat Bantuan Sentul, Member ofthe Management Committee of Wesley Methodist Schooland Chairman of the Board of Management of MethodistCollege Kuala Lumpur. He is also a Director of MalayanUnited Industries Berhad.

Dato’ Dr. Tan has no family relationship with any Directorand/or major shareholder of the Company. He has noconvictions of any offences within the past five (5) yearsand has no public sanctions and/or penalties imposed bythe relevant regulatory bodies during the financial period.He has no conflict of interest with the Company.

Details of Directors’ interest in shares of the Companyand its subsidiaries as at 22 November 2016 are disclosedin the page 111 and 114 of this Annual Report.

DATO’ DR. TAN KEE KWONGAged 69, Male, Malaysian

Independent Non-Executive DirectorMember of Nominating Committee

Member of Remuneration CommitteeMember of Audit and Risk Management Committee

GARY HO KUAT FOONGAged 61, Male, Australian

Independent Non-Executive DirectorChairman of Audit and Risk Management Committee

Chairman of Nominating CommitteeMember of Remuneration Committee



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Mr. Barry Kan was appointed to theBoard of TMC Life Sciences Berhadon 2 June 2015. He is a veteran ofalmost 30 years in the automotiveindustry with rich and vastexperience in managing variousillustrious global brands during hiscareer with renowned regionaldealership, Wearnes Automotive,headquartered in Singapore. Prior tothat, he was with the Port Authorityof Singapore for 7 years.

As General Manager at MalayanMotors (a division then of WearnesAutomotive Pte Ltd), his portfolioincluded the Rolls-Royce, Bentley,Jaguar and Volvo Trucks franchises inSingapore. He was also responsiblefor the introduction of some of thebrands into new territories such asBrunei, Indonesia, Taiwan andThailand. In addition to the strategicmanagement of the business, he tookpersonal interest in CustomerRelationship Management andAftersales operations, which resultedin a high level of clientele retentionfor the luxury automotive brands.

Promoted to Managing Director of the Prestige Division ofWearnes Automotive, he was instrumental in theacquisition of new brands which included Bugatti, LandRover and McLaren. He was also the key representative ofthe company for the high-society clientele which includedthe Captains of Industry as well as esteemed members ofRoyal families within the region.

To nurture the passion for driving and motorsports for theentire Corporate Group, he led a team to spearhead theinaugural motorsports division. Activities included track andinstructional driving days as well as distance drivingweekends in Malaysia where participants had the chance tolearn more about their cars and improve their driving skillswhilst the company had the chance to showcase theirproduct range and services.

When the exciting opportunity arose to develop theintegrated automotive hub in Nusajaya, Iskandar Malaysia,he joined Fastrack Autosports (Iskandar) Pte Ltd toconceptualise and execute the project, in partnership withUEW Sunrise Berhad. Mr. Kan leads the joint venturecompany, Fastrack Iskandar Sdn Bhd as its Chief ExecutiveOfficer.

Mr. Kan has no family relationship with any Director and/ormajor shareholder of the Company. He has no convictionsof any offences within the past five (5) years and has nopublic sanctions and/or penalties imposed by the relevantregulatory bodies during the financial period. He has noconflict of interest with the Company.

Details of Directors’ interest in shares of the Company andits subsidiaries as at 22 November 2016 are disclosed inthe page 111 and 114 of this Annual Report.

Ms. Claire Lee Suk Leng was appointed to the Board on18 October 2012.

Ms. Claire Lee holds Bachelor of Business Administration(Distinction) in Finance from the University of Hawaii atManoa. Ms. Claire Lee has over 10 years of experience in theareas of corporate finance and advisory, and private wealthmanagement. She started her career with the merchantbanking arm of the Union Bank of Switzerland, UBS (EastAsia) Ltd and later joined HSBC Investment Bank plc andSalomon Smith Barney (Singapore) Pte Ltd.

Ms. Claire Lee has no family relationship withany Director and/or major shareholder of theCompany. She has no conviction of anyoffences within the past five (5) years and hasno public sanctions and/or penalties imposed bythe relevant regulatory bodies during thefinancial period. She has no conflict of interestwith the Company.

Details of Directors’ interest in shares ofthe Company and its subsidiaries as at22 November 2016 are disclosed in the page 111and 114 of this Annual Report.

CLAIRE LEE SUK LENGAged 44, Female, Malaysian

Independent Non-Executive Director Chairperson of Remuneration Committee

Member of Nominating CommitteeMember of Audit and Risk Management Committee

KAN KHEONG NGAged 61, Male, Malaysian

Non-Independent Non-Executive DirectorMember of Nominating Committee

Member of Remuneration Committee



P R O F I L E O F K E Y S E N I O RM A N A G E M E N T T E A M

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Ms. Lam serves as the Chief Executive Officer ofTropicana Medical Centre (M) Sdn. Bhd. Prior to thecurrent position in 2012, she was appointed as the ChiefOperating Officer in May 2011. Ms. Lam has close to 20years’ of experience in business administration andhealthcare management, where 10 years in seniormanagement position in healthcare industry.

She sits on the Board of Association ofPrivate Hospitals of Malaysia (APHM)since 2013 and appointed as theHonorary Secretary in 2014 untilcurrent year. Ms. Lam is a CharteredSecretary by profession and holds an Associate Membership with theMalaysian Institute of CharteredSecretaries and Administrators.

Mr. Wong Yu Chee has over 20years’ experience in finance, audit,accounting and tax complianceservices in Malaysia and Shanghai.Mr. Wong started his career in 1996joining a local audit firm as auditor.

He then joined Coopers & Lybrand in1997, now known as Pricewater-

houseCoopers (PwC). Mr. Wong spent8 years in PwC specialised in assuranceassignment of large multinational company,public listed companies in variousindustries, IPO and corporate exercise.Mr. Wong joined Glaxo-SmithKline thenas Finance Manager before he leftMalaysia joining Ernst & Young Shanghaiend 2005. Mr. Wong spent 3 years inErnest & Young Shanghai focusing onstatutory audit assignment, IPO assuranceassignment, corporate exercise and US

audit assignment until he joined TMF Shanghai end2008, leading the accounting and tax complianceservices in TMF Shanghai for 2 years.

Mr. Wong relocated back to Malaysia in 2010, asDirector of Accounting & Tax Compliance Services inTMF Malaysia where he spent 5 years helpingbusinesses on accounting and tax compliance includingGST advisory and compliance services in TMF Malaysia.Mr. Wong then joined PCA Corporate Services Sdn Bhdin 2015 as Group Chief Operating Officer before joiningTMC Life Sciences Berhad as Group Chief FinancialOfficer on 3 August 2015.

Mr. Wong is a Fellow Member of Association ofChartered Certified Accountants (FCCA), member ofMalaysian Institute of Accountants (MIA)-CharteredAccountant (M) and Associate Member of Chartered TaxInstitute of Malaysia (ACTIM).

WONG YU CHEEAged 44, Male, Malaysian

Group Chief Financial Officer

LAM SOK MUIAged 46, Female, Malaysian

Chief Executive Officer of Tropicana Medical Centre (M) Sdn. Bhd.

Notes:1. None of the above personnel has any family relationship with any director and/or major shareholders of the Company.

2. None of the above personnel has any conviction for offences other than traffic offences in the past 5 years and none of them has any public sanction or penalty imposed by the relevant regulatory bodies during the financial period.3. None of the above personnel has any conflict of interest with the Company.


TMC FERTILITY AND WOMEN’S SPECIALIST CENTRES

Headquarter:

TMC Fertility & Women’s Specialist Centre2nd Floor, Tropicana Medical Centre

11, Jalan TeknologiTaman Sains Selangor 1PJU 5, Kota Damansara

47810 Petaling JayaSelangor Darul EhsanTel: 603-6287 1000Fax: 603-6287 1001www.tmcfertility.com

Branches:

TMC Fertility & Women’s Specialist Centre,Johor Bahru

02-03, Medical SuitesLevel 4, Menara Landmark

12, Jalan Ngee Heng80000 Johor BahruTel: 607-278 0088Fax: 607-278 0808

TMC Fertility & Women’s Specialist Centre,Penang

3E-1-1, Straits QuayJalan Seri Tanjung Pinang

Tanjung Tokong10470 Penang

Tel: 604-890 9118Fax: 604-890 9448

TMC Fertility & Women’s Specialist Centre,Puchong

5, Jalan Merbah 3Bandar Puchong Jaya

47800 PuchongSelangor Darul EhsanTel: 603-8076 7111Fax: 603-8071 7281

TMC Fertility & Women’s Specialist Centre,Kepong

8, Jalan PrimaMetro Prima, Kepong52100 Kuala LumpurTel: 603-6258 0000Fax: 603-6241 5809

TMC Fertility & Women’s Specialist Centre,Ipoh

33, Persiaran Pearl, Fair Park31400, Ipoh

Perak Darul RidzuanTel: 605-548 8118Fax: 605-548 7118


C O R P O R AT ED I R E C T O RY

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HOSPITAL

TROPICANA MEDICAL CENTRE (M) SDN BHD11, Jalan Teknologi

Taman Sains Selangor 1PJU 5, Kota Damansara

47810 Petaling JayaSelangor Darul EhsanTel: 603-6287 1111Fax: 603-6287 1212

www.tropicanamedicalcentre.com

RETAIL PHARMACY

TMC CARE SDN BHDJohor BahruVantage Bay

Lot 6376 & 9236Jalan Ibrahim Sultan80300 Johor BahruTel: 607-223 0088Fax: 607-221 0200


The Board of Directors of TMC Life Sciences Berhad recognises the importance of safeguarding and promoting theinterest of its stakeholders. The Board is committed to uphold high standards of corporate governance throughtransparency, accountability, integrity and corporate performance.

TMC Life Sciences Berhad adopts the following requirements and guidelines on corporate governance bestpractices:

• Malaysian Code on Corporate Governance 2012 (“MCCG” or “Code”);• Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”); and• Corporate Governance Guide: Towards Boardroom Excellence by Bursa Securities (“CG Guide”)

The Board is pleased to disclose below the manner in which it has applied the principles and best practices set outin the above requirements and guidelines, which provide the Group with the appropriate guidance to discharge itsdisclosure obligations, and the extent to which it has complied with MCCG.

(A) BOARD OF DIRECTORS

The Company is helmed by an experienced Board comprising members of calibre and credibility withnecessary skills, expertise and experience ranging from medical practitioners, to entrepreneurs andaccountants.

The Board is primarily responsible for oversight and the overall governance of the Group. It carries out itsmandate by providing strategic guidance, implementing succession planning, effectively monitoringmanagement goals and ensuring overall accountability for the business growth of the Group. In addition, theBoard is responsible for ensuring that the Group’s internal controls, risk management processes and reportingprocedures are in place. In discharging their fiduciary responsibilities, the Board develops the businessstrategies and the day-to-day management of the Company is further cascaded to the senior managementteam. The Board is monitoring the performance of the Group based on periodic performance of the Groupreported by management in the quarterly financial results and has full access to all operational informationand explanation provided by management.

Key matters reserved for the Board’s approval include the annual business plan and budget, dividend policy,business continuity plan, new issue of securities, business restructuring, expenditure above a certain pre-determined limit, new business venture, expansion plan, funding plan, acquisition or disposal of companieswithin the Group and any other strategic matters requiring Board’s decision.

The Board is committed to act in the best interest of the Group and its shareholders by exercising duediligence and care in discharging its duties and responsibilities to ensure that high ethical standards areapplied at all times.

Board Charter

The Board Charter, which was adopted by the Board in July 2013, sets out the composition, roles andresponsibilities and processes of the Board.

The objectives of the Board Charter are to ensure that all Board members are aware of their duties andresponsibilities as Board members, the various legislations and regulations affecting their conduct and thatthe highest standards of Corporate Governance are applied in all dealings by the Board Members individuallyand/or on behalf of the Company. It serves as a strategic guidance and effective oversight of management.

The details of the Board Charter are available for reference at the Company’s website www.tmclife.com

Composition of the Board and Board Balance

The Board comprises one (1) Non-Independent Non-Executive Chairman, one (1) Executive Director, three(3) Non-Independent Non-Executive Director and three (3) Independent Non-Executive Directors. This is inline with the requirements of Paragraph 15.02 of the MMLR of Bursa Securities that requires one-third (1/3)of the Board members to be independent directors.


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S TAT E M E N T O N C O R P O R AT E G O V E R N A N C E


All the Independent Directors fulfil the criteria of independence as defined in the MMLR and act independentlyof Management and do not participate in any business dealings. Neither are they involved in any otherrelationship with the Group that may impair their independent judgement and decision-making. The Boardperformed yearly assessment of its Independent Directors and received confirmation of independence fromthe respective Independent Directors.

Save for Dato’ Dr. Tan Kee Kwong, all the Independent Directors’ term of service with the Company are lessthan nine (9) years. The Board recognises the Code’s recommendation on the service tenure of anindependent director, which should not exceed a cumulative term of nine (9) years. Upon completion of thenine (9) years, an independent director may continue to serve on the board subject to the director’s re-designation as a non-independent director or seek shareholders’ approval in the event it retains as anIndependent Director.

Dato’ Dr. Tan Kee Kwong, an Independent Non-Executive Director who is also a member of NominatingCommittee, Remuneration Committee and Audit and Risk Management Committee, was appointed to theBoard of TMC Life Sciences Berhad on 3 June 2005 and as such his tenure of service has exceeded acumulative term of nine (9) years. The Board has reviewed and recommended that Dato’ Dr. Tan Kee Kwongshall continue to act as an Independent Non-Executive Director. In line with the Recommendation 3.3 of theCode, the Board will seek approval from the shareholders of the Company at the forthcoming 13th AGM tosupport the Board’s decision to retain Dato’ Dr. Tan Kee Kwong as Independent Non-Executive Director basedon the following justifications:

• He has fulfilled the criteria under the definition of Independent Director as stated in the MMLR and thushe would be able to bring an element of objectivity to the Board;

• He has vast and diverse range of experiences and therefore would be able to provide constructive opinion,independent judgment and to act in the best interest of the Company and shareholders;

• He has continued to exercise his independence and due care during his tenure of service; and• He has shown great integrity and independence, and had not entered into any related party transactions

with the Group.

Our Chairman, Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir is a Non-Independent Non-ExecutiveDirector of the Company by virtue of his position as Person-in-Charge (License Holder) of Tropicana MedicalCentre, Kota Damansara. The MCCG recommends that where the chairman of the board is not an independentdirector, the board must comprise a majority of independent directors. The Board acknowledges therecommendation of the Code but is of the view that although the present Board does not have a majority ofindependent directors, its current size and composition of the Board is able to ensure the balance of powerand authority on the Board with its strong presence of seven (7) non-executive directors. Also, the currentsize of the Board (i.e 8 directors) is sufficiently adequate for the current operations of the Group and thereis no immediate need to increase the number of independent directors for the time being after taking intoaccount the Board members’ wide experience and exposure in various areas as well as their diversebackground and skill.

The Board committed to ensure the effective leadership and is satisfied by having Professor Emeritus Dato’Dr. Khalid Bin Abdul Kadir as its Non-Independent Non-Executive Chairman due to his vast experience in themedical industry and is able to provide the Board with a clear direction to the strategy decision, contributingsignificantly to the long term growth of the Group. Further, he also demonstrates his objectivity in deliberatingand making decision aligning with the shareholders’ interest at large to ensure balance of power and authorityon the Board during his tenure as Chairman of the Company. In view of the foregoing, the NominatingCommittee and the Board had at their respective meetings held on 15 December 2016 decided to recommendProfessor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir, who is due for re-election at the forthcoming 13th AGMto be re-elected as Non-Independent Non-Executive Chairman of the Company.

The role of Chairman and the Executive Director cum Group Chief Executive Officer are separated. TheChairman provides leadership at Board level and represents the Board to the shareholders and otherstakeholders and is responsible for ensuring integrity and effectiveness of the Board and its committees.

The Executive Director cum Group Chief Executive Officer provides executive leadership and is accountableto the Board for implementation of the strategies, objectives and decisions of the Board within the frameworkof delegated authorities, values and policies of the Company.


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The Non-Executive Directors have a responsibility to bring independence and objective judgement to Board’sdecisions after taking into consideration the interest of the shareholders, employees and business associates.

The profile of the individual Directors are set out on pages 13 to 17 of this Annual Report.

Board Meeting

The Board meetings are scheduled to be held regularly with sufficient notice being issued for meetingsconducted in accordance with a structured agenda. The Board is supplied with information in a timely mannerand appropriate quality to enable them to discharge their duties. The Board has a formal schedule of mattersspecifically reserved for the Board’s discussion and/or approval. All issues and decisions made during theBoard Meetings are properly recorded and thereafter circulated to the Chairman for comments before minutesof proceedings are finalised and tabled to the Board for confirmation. The Company Secretary organises andattends all Board meetings to ensure proper recording of the proceedings. Ad-hoc meetings may be called asand when significant issues arise which requires the Board’s decisions.

In exercising their duties, the Directors have direct access to the senior management executives. In addition,the Directors may seek advice from the Company Secretary to assist them in furtherance of their duties.Where necessary, the Board may engage Independent Advisors at the Group’s expense on specialised issuesto enable them to discharge their duties proficiently.

During the financial period ended 31 August 2016, six (6) meetings were held in which the Board deliberatedupon and considered various issues including the Group’s financial results, corporate exercises, business plansand annual budgets, performance of the Group’s business, material agreements, major capital expendituresand strategic issues affecting the Group’s business.

Attendance of the Directors (save for Freddie Heng Kim Chuan who was appointed on 2 November 2016) atthe Board meetings held during the financial period ended 31 August 2016 are as follows:-

Director Attendance

Professor Emeritus Dato’ Dr. Khalid bin Abdul Kadir 6/6Roy Quek Hong Sheng 6/6Dr. Wong Chiang Yin (resignation on 31.12.2015 ) 3/3 *Dr. Chan Boon Kheng 6/6Dato’ Dr. Tan Kee Kwong 6/6Gary Ho Kuat Foong 6/6Claire Lee Suk Leng 4/6Kan Kheong Ng 5/6

* Reflects the number of Board meetings attended during the financial period up to the date of resignation.

Appointment to the Board

The Nominating Committee has been entrusted with the responsibility to identify, evaluate, select andrecommend to the Board suitable candidate with the required credentials to be appointed as a Director of theCompany, either to fill casual vacancies or as additions to meet the changing needs of the Group. That beingsaid, the potential candidates may be proposed by existing directors, shareholders or their party referral.The Board does not set specific criteria for assessment and selection of director candidate. However,consideration would be taken on the need of the mix of relevant experiences in healthcare industry andcorporate finance within board composition. Also, for appointment of independent director, the NominatingCommittee would also assess whether the candidate meets the requirements for independence based on thecriteria prescribed in the MMLR.

There was no new appointment of Director to the Board during the financial period ended 31 August 2016.Freddie Heng Kim Chuan was appointed on 2 November 2016 which the Board believes his credentials willcontribute to the future growth of the Group having considered his vast experience in corporate finance andhealthcare industry.


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Re-appointment and Re-election of Directors

In accordance with the Company’s Articles of Association, at every Annual General Meeting (“AGM”), one-third (1/3) of the Directors for the time being or, if the number is not three (3) or a multiple of three (3), thenumber nearest to one third shall retire from office such that each Director shall retire from office once inevery three (3) years and all Directors who retire from office shall be eligible for re-election. Proposals for re-appointment and re-election of Directors are recommended by the Nominating Committee to the Board priorto the shareholders’ approval at the AGM, based on the annual assessment conducted.

Based on the recent annual assessment and evaluation, the Nominating Committee is satisfied with theperformance of the directors who are standing for election, recommended to the Board their proposed re-election in accordance with Articles of Association. The Board supported the Nominating Committee’srecommendations to re-elect the eligible directors standing for re-election by rotation at the forthcoming 13th AGM.

Further, pursuant to Section 129(6) of the Companies Act, 1965, Directors over the age of 70 are requiredto offer themselves for re-appointment at every AGM.

Assessment on Board Independence

The Board recognises the importance of independence and objectivity in the decision-making process. TheBoard and its Nominating Committee have upon their annual assessment, concluded that each of the threeIndependent Non-Executive Directors continue to demonstrate conduct and behaviour that are essentialindicators of independence, and that each of them continues to fulfil the definition and criteria of independenceas set out in MMLR.

Based on the independent assessment, the Board is also concluded that the independence of Dato’ Dr. TanKee Kwong, whose tenure of service has exceeded a cumulative term of nine (9) years, details of which areset out on pages 20 to 21 of this annual report, is not affected by the length of his service.

Boardroom Gender Diversity

With regard to boardroom diversity, the Board is supportive of the gender diversity recommendations madein the MCCG. In October 2012, the Company appointed Ms Claire Lee Suk Leng as an Independent Non-Executive Director of the Company. She is also the Chairperson of Remuneration Committee and member ofARMC and Nominating Committee.

Annual Assessment of Directors and Board Committees

The Nominating Committee undertakes annual evaluation to review the performance of each individualDirectors, the effectiveness of the Board and the Board Committees.

The assessment of the Board and Board Committees covers areas such as the Board structure/mix, operation,decision making and boardroom participation and activities, meeting administration and conducts, skills,knowledge, experience and competencies and role and responsibilities. For the performance of the individualDirectors, the assessment criteria has included the areas of contribution and interaction with peer, quality ofinput of the Director, understanding of role, etc.

During the annual assessment exercise, the Directors are given a performance evaluation sheet for individualDirector Self/Peer Evaluation and Board Evaluation to complete. In addition, Directors who are members ofthe Board Committees are given additional performance evaluation sheets for the respective BoardCommittees to complete. Sufficient time is given to the Directors to complete the forms and upon completion,the forms are submitted to the Company Secretary for compilation of rating and scores and summary ofwhich would then be presented to the Nominating Committee for further review and assessment.


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During the financial period, an annual assessment exercised had been carried out by the NominatingCommittee. For good corporate governance, the Nomination Committee did not review its own effectivenessand the performances of the Nomination Committee members. Instead, such review was carried out by theBoard as a whole with the members of the Nomination Committee abstained from deliberation. In view thatthe Nomination Committee members are also members of Remuneration Committee and the Audit and RiskManagement Committee, the assessment of the effectiveness and performances of the RemunerationCommittee and the Audit and Risk Management Committee were also carried out by the Board.

The Director who is subject to re-election and/or re-appointment at next Annual General Meeting are assessedby the Nomination Committee (with the relevant Nomination Committee member abstaining on his/her ownre-election) before recommendation is made to the Board and shareholders for the re-election and/or re-appointment. Outcome of the assessment and recommendation would be reported to the Board forinformation and decision on areas for improvement.

Directors’ Training

The Directors keep themselves abreast on the latest industry developments as well as new statutory andregulatory requirements by attending various training programmes, seminars and/or conferences to enablethem to discharge their duties effectively.

The training needs of Directors would be assessed and proposed by the individual Director. Each Directordetermines the areas of training that he or she may require for personal development as a Director or as amember of a Board Committee. During the financial period under review, the Directors (save for FreddieHeng Kim Chuan who was appointed on 2 November 2016) have also attended the following trainingprogrammes, seminars and/or conferences:-

Name of Seminars/Director Training programmes attended

Professor Emeritus Dato’ International Symposium on Precision MedicineDr. Khalid bin Abdul Kadir (Cambridge University/Sunway University

Diabetes Complications Conference & Grand Rounds

7th MEMS Endocrine Congress

Risk Management Workshop

Roy Quek Hong Sheng APHM International Healthcare Conference and Exhibition 2015

Mandatory Accreditation Programme for Directors of Public Listed Companies (MAP)

Malaysian Financial Reporting Standards (MFRS) Made Simple for Directors & Senior Management

International Forum on Quality and Safety in Healthcare Asia 2015


Dato’ Dr. Tan Kee Kwong Risk Management Workshop

Best Practices for Sustainability Reporting – What a Company Director Needs to Know


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Name of Seminars/Director Training programmes attended

Gary Ho Kuat Foong CPA Australia - Congress on Demand

Singapore Institute of Directors – Remuneration Committee Guide

Singapore Institute of Directors – Board Risk Committee Guide


Dr. Chan Boon Kheng APHM International Healthcare Conference and Exhibition 2016


Kan Kheong Ng Insights into Malaysian Tax, GST & Customs Law and Cases Seminar


Claire Lee Suk Leng Sustainability Engagement Series for Directors / Chief Executive Officer

Directors’ Remuneration

The Remuneration Committee is responsible for reviewing and recommending to the Board, the remunerationpackage for the Executive Directors. It is the ultimate responsibility of the Board to approve the remunerationof the Executive Directors.

The remuneration of Non-Executive Directors, which made up of Directors’ fee, meeting allowance and otherbenefits, if any, is determined by the Board. The Directors’ fee is determined and recommended by the Boardand subject to the approval of the shareholders at general meeting.

The Directors’ remuneration paid or payable to all the Directors of the Company for the financial period ended31 August 2016 are as follows:-

Salaries, EPF and Meeting other Benefit-Received from TMC Life Fees Allowances emoluments in-kind TotalSciences Berhad (RM) (RM) (RM) (RM) (RM)

Executive Directors - - - - -Non-Executive Directors 383,500 55,800 - - 439,300

Salaries, EPF and Meeting other Benefit- Fees Allowances emoluments in-kind Total

Received on Group Basis (RM) (RM) (RM) (RM) (RM)

Executive Directors - - 1,939,772 - 1,939,772Non-Executive Directors 383,500 55,800 60,000 - 499,300


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The number of Directors who served during the financial period whose remuneration falls into the followingbands:-

Received from TMC Life Sciences Berhad Number of DirectorsRemuneration Bands Executive Non-Executive

Below RM50,000 0 1RM50,001 – RM100,000 0 4RM100,001 – RM150,000 0 1 Total 0 6

Received on Group Basis Number of DirectorsRemuneration Bands Executive Non-Executive

Below RM50,000 0 1RM50,001 – RM100,000 1 4RM100,001 – RM150,000 0 1RM500,001 – RM550,000 1 0RM1,300,001 – RM1,350,000 1 0 Total 3 6

# This includes Dr. Wong Chiang Yin who has resigned on 31 December 2015, and Dr. Chan Boon Khengwho has been re-designated as Non-Executive Non-Independent Director on 1 October 2016.

(B) BOARD COMMITTEES

The Board has set up different Board Committees with different functions to assist the Board in dischargingits fiduciary duties. These committees do not make decision on behalf of the Board and the Company. It iseach committee’s duty to review matters under its purview and make the necessary recommendation to theBoard for its consideration and decision making.

The Board has to date established the following principal Board Committees:-

Audit and Risk Management Committee

The Audit and Risk Management Committee (“ARMC”) comprises four (4) members who are Non-ExecutiveDirectors and three (3) of them are independent and ARMC’s responsibilities include reviewing managementand financial statements, related party transactions, internal control and risk management processes.

The summary of activities of the ARMC are set out separately in the ARMC Report on pages 31 to 32 of thisAnnual Report.

Nominating Committee

The Nominating Committee (“NC”) established by the Board consists of the following members:

Chairman : Gary Ho Kuat Foong

Members : Dato’ Dr. Tan Kee Kwong Claire Lee Suk Leng Kan Kheong Ng Freddie Heng Kim Chuan (Appointed on 2 November 2016)

The NC comprises five (5) members who are Non-Executive Directors and three (3) of them are Independent.The role of the NC is to assist the Board to evaluate candidates for nomination to the Board and to assess theeffectiveness of the Board and each individual Director on an ongoing basis in terms of contribution, skills,experience and other qualities.


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#


In addition, the NC also has the function of assessing the effectiveness of the Board, reviewing the skills andcompetencies of individual Directors and the composition of the various Committees of the Board. The objective is to improve the Board’s effectiveness, identify gaps, maximise strengths and addressweaknesses of the Board.

Summary of activities

During the financial period ended 31 August 2016, the NC conducted one (1) meeting. At the said meeting,the NC:

(a) Reviewed and assessed the performance and effectiveness of the Board of Directors, the Committees ofthe Board and the performance of each Director for financial year ended 31 May 2015.

(b) Reviewed and recommended the re-election of directors at the Twelfth Annual General Meeting held on21 October 2015 (“12th AGM”).

(c) Reviewed and assessed the board independence under the MCCG in relation to:

(i) retention of Dato’ Dr. Tan Kee Kwong as Independent Director notwithstanding his service for acumulative period of nine (9) years after the 12th AGM; and

(ii) recommendation of the Code on the requirement to have a majority independent directors on theboard where the chairman of the board is not an independent director.

Remuneration Committee

The Remuneration Committee (“RC”) established by the Board consists of the following members:

Chairperson : Claire Lee Suk Leng

Members : Dato’ Dr. Tan Kee Kwong Gary Ho Kuat Foong Kan Kheong Ng Freddie Heng Kim Chuan (Appointed on 2 November 2016)

The RC comprises five (5) members who are Non-Executive Directors. The role of the RC is to recommendto the Board, the remuneration packages of Executive Directors and Senior Management personnel of theGroup, in addition to any increment/incentive to be awarded.

Summary of activities

During the financial period ended 31 August 2016, the RC conducted two (2) meetings. At the said meetings,the RC:

(a) Discussed and recommended to the Board for approval, bonus and salary increment/adjustment forExecutive Directors, Senior Management and employees upon assessing the performance of the Companyand employees.

(b) Discussed and recommended to the Board for approval, the proposed increase of Directors’ fees.

(c) Discussed and recommended to the Board for approval, the proposed employment contract of ExecutiveDirector cum Group Chief Executive Officer.

(d) Discussed and recommended to the Board for approval, the proposed remuneration for the new Directors.


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(C) SHAREHOLDERS

Relationship with Shareholders

The Board acknowledges the need for the Company’s shareholders and investors to be informed of all materialbusiness and corporate developments concerning the Group in a timely manner. Shareholders and investorsare kept informed of financial performance, major corporate proposals and pertinent issues of the Group viaannouncements made through Bursa Securities.

Annual General Meeting

The AGM is the principal forum for dialogue and interaction with the shareholders and the shareholders areencouraged to raise any questions relating to the proposed resolutions as well as the Group’s businessoperations and affairs. The Notice and agenda of AGM together with Form of Proxy are given to shareholdersat least twenty-one (21) days before the AGM, which gives shareholders sufficient time to prepare themselvesto attend the AGM or to appoint a proxy to attend and vote on their behalf. Each item of special businessincluded in the Notice of the AGM is accompanied by an explanatory statement for the proposed resolutionto facilitate the full understanding and evaluation of issues involved.

The Chairman and Board of Directors will respond to shareholders’ questions during the meeting. The ExternalAuditors are also present to provide their professional and independent clarification, if required, on issueshighlighted by the shareholders.

Corporate and financial information of the Group are also made available to the public through the Group’swebsite at www.tmclife.com.

(D) ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible for the quality and completeness of publicly disclosed financial reports. The Boardwith the assistance of the ARMC has to ensure that the financial statements are drawn up in accordance withthe Malaysian Financial Reporting Standards, International Financial Reporting Standards and therequirements of the Companies Act, 1965 in Malaysia, that the appropriate accounting policies have beenused, consistently applied and supported by reasonable judgements and estimates, and the financial reportspresent a balanced, clear and comprehensive assessment of the Group’s financial performance.

Relationship with the Auditors

The Company, through its ARMC, has established a transparent and appropriate relationship with the Group’sauditors, both internal and external. It is the policy of the ARMC to meet the external auditors to discusstheir audit plan, audit findings and financial statements.

Internal Control

The Board acknowledges its overall responsibility for maintaining an internal control system that providesreasonable assurance of effective and efficient operations, compliance with laws and regulations as well asinternal procedures and guidelines. The system, by its nature, can only provide reasonable but not absoluteassurance against risk of material errors, fraud or loss.

The Statement of Risk Management and Internal Control which provides an overview of the state of internalcontrols within the Company and the Group is set out on pages 34 to 36 of this Annual Report.


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(E) RESPONSIBILITY STATEMENT BY DIRECTORS

The Directors are required by the Companies Act, 1965 to prepare financial statements for each financialyear which give a true and fair view of the state of affairs of the Group and Company and of the results andcash flow of the Group and the Company for the financial year then ended.

In preparing the financial statements, the Directors have:-

(i) Adopted the appropriate accounting policies and applied them consistently; (ii) Made judgements and estimates that are reasonable and prudent;(iii) Ensure applicable approved accounting standards have been followed, and any material departures have

been disclosed and explained in the financial statements; and(iv) Ensure the financial statements have been prepared on a going concern basis.

The Directors have the responsibility to ensure that the Group and the Company keeps proper accountingrecords, which disclose with reasonable accuracy the financial position of the Group and the Company, andwhich will enable them to ensure the financial statements have complied with Malaysian Financial ReportingStandards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 inMalaysia.

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

(F) CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

The Board places great importance on corporate social responsibility (“CSR”) and business sustainability andembraces CSR as an integral part of the Group’s business philosophy and corporate culture.

The CSR activities of the Group during the financial period are set out on pages 10 to 12 of this Annual Report.

(G) QUALIFIED AND COMPETENT COMPANY SECRETARIES

The Company Secretaries of the Group are experienced, competent and knowledgeable, play an importantrole in advising the Board on issues relating to corporate compliance with the relevant laws, rules, proceduresand regulations affecting the Board and the Group, as well as best practices of governance. The Directorshave ready and unrestricted access to the advice and services of the Company Secretaries. The Board isregularly kept up to date on and apprised of any regulations and guidelines.

The Company Secretaries are responsible for advising the Directors of their obligations and duties to disclosetheir interest in securities, disclosure of any conflict of interest in a transaction involving the Group, prohibitionon dealing in securities and restrictions on disclosure of price-sensitive information.

The Company Secretaries also safeguard all statutory books and records of the Company and maintain thestatutory registers of the Company. Company Secretaries also ensure all Board meetings are properlyconvened, and that accurate and proper records of the proceedings and resolutions passed are recorded.In addition, the Company Secretaries also ensure that any change in the Group’s statutory information shouldbe duly completed in the relevant prescribed forms and lodged with the Registrar of Companies within therequired period of time.


29



(H) ASSESSMENT OF SUITABILITY AND INDEPENDENCE OF EXTERNAL AUDITORS

A nomination letter from shareholder as required under the provision of the Companies Act, 1965 has beenobtained and attached as “Appendix A” of this annual report.

The Audit and Risk Management Committee (“ARMC”) had at its meeting held on 15 December 2016undertook annual assessment of the suitability and independence of external auditors before recommendationis made to the Board for appointment of the external auditors at the annual general meeting of the Company.At the said meeting, the ARMC considered:

(i) the need to unify audit procedures between the Company and the ultimate holding company, SasteriaPte. Ltd. for better efficiency and enhanced consistency in audit process;

(ii) technical capability, adequacy of resources, size and reputation of the incoming external auditors; and (iii) independence of the incoming external auditors.

Having regard to the outcome of the evaluations and the assessment of the external auditors, the Board isof the view that it is in the best interests of the Company and its major shareholder as a whole, had at itsmeeting held on 15 December 2016 supported and approved the ARMC recommendation for the shareholders’approval to be sought at the forthcoming on the appointment of Ernst & Young as external auditors of theCompany for the financial year ending 31 August 2017.

(I) CODES AND POLICIES

1. Code of Conduct and Ethics

The Board has made a commitment to create a corporate culture within the Group to operate thebusinesses in an ethical manner and to uphold the highest standards of professionalism and exemplarycorporate conduct in relation to interactions with shareholders, employees, suppliers and customers.The Group has implemented a Code of Conduct and Ethics which dictates the ethics and standard ofgood conduct expected of every Director. The Code of Conduct and Ethics, which forms part of the BoardCharter, is available for reference at www.tmclife.com

2. Whistleblowing Policy and Procedure

The Board allows employees and associates to report suspected and/or known misconduct, wrongdoings,corruption, fraud, waste and/or abuse involving resources of the Company.The Whistleblowing Policy andProcedure adopted by the Company in July 2013 provides and facilitates a mechanism for any employeeand associate to report concerns about any suspected and/or known misconduct, wrongdoings,corruption, fraud, waste and/or abuse.

The Whistleblowing Policy and Procedure is available at Company’s website at www.tmclife.com

3. Corporate Disclosure Policy & Procedures

The Board places importance in ensuring disclosures made to shareholders and investors are accurate,clear, timely and comprehensive as they are critical towards building and maintaining corporate credibilityand investor confidence. As such, the Board has adopted a Corporate Disclosure Policy & Procedures inJuly 2013 setting out the policies and procedures for disclosure of material information of the Group.The said Policy applies to all Directors, management, officers and employees of the Group.

(J) COMPLIANCE WITH MCCG

The Board is satisfied that during the financial period, the Company has complied with the Best Practices inCorporate Governance on the application of the principles and best practices in corporate governance.

The Statement on Corporate Governance is made in accordance with a resolution of the Board of Directorsdated 15 December 2016.


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31

A U D I T A N D R I S K M A N A G E M E N TC O M M I T T E E R E P O RT

During the financial period, the Audit and Risk Management Committee (“ARMC”) of TMC Life Sciences Berhadcarried out its duties and responsibilities in accordance with its terms of reference and held discussions with theinternal auditors, external auditors, outsourced risk management consultants and relevant members ofmanagement. The ARMC is of the view that no material misstatements or losses, contingencies or uncertaintieshave arisen, based on the reviews made and discussions held.

MEMBERS AND ATTENDANCE

The ARMC comprises the following members and details of attendance of each member at the six (6) meetingsheld during the financial period ended 31 August 2016 were as follows:

Director Designation Attendance

Gary Ho Kuat Foong Independent Non-Executive Director 6/6(Chairman)

Claire Lee Suk Leng Independent Non-Executive Director 5/6(Member)

Dato’ Dr. Tan Kee Kwong Independent Non-Executive Director 6/6(Member)

Freddie Heng Kim Chuan Non-Independent Non-Executive Director * (Member-appointed on 2.11.2016)

* Has not attended the meetings held during the financial period ended 31 August 2016 as he was onlyappointed on 2 November 2016.

TERMS OF REFERENCE

Primary Purposes

The ARMC had discharged its function and carried out its duties as set out in the terms of reference.

The terms of reference of the ARMC is accessible through the Group’s website (www.tmclife.com).

SUMMARY OF THE ACTIVITIES OF ARMC

The main activities carried out by the ARMC during the financial period ended 31 August 2016 included thefollowing:

Financial reporting and re-appointment of external auditors

(i) Reviewed the quarterly financial results of the Group including the draft announcements pertaining thereto,and made recommendations to the Board for approval. The reviews, served to ensure that the Group’sfinancial reporting and disclosures are in compliance with the MMLR and applicable accounting standards inMalaysia;

(ii) Reviewed with the External Auditors, the Audit Planning Memorandum for the financial period ended 31 August2016 on both the audit strategy and audit approach, the adequacy of existing external audit arrangements,with emphasis on the scope and quality of the audit and proposed fees for the statutory audit;

(iii) Reviewed with the External Auditors, the results of their audit for the financial year ended 31 May 2015, theaudit report and internal control recommendations in respect of improvements in internal control proceduresnoted in the course of their audit;


(iv) Met with External Auditors without the presence of Management during the period under review;

(v) Reviewed and recommended to the Board for approval, the re-appointment of External Auditors and the feesfor the audit and non-audit services for the financial period ended 31 August 2016;

(vi) Reviewed the annual audited financial statements of the Company and the Group for the financial year ended31 May 2015 and made recommendations to the Board for approval;

Internal audit

(vii) Reviewed with the Internal Auditors the Internal Audit Plan to ensure the adequacy of the scope and coverageof work;

(viii) Reviewed the audit reports presented by the Internal Auditors on their findings and recommendations withrespect to system and control weaknesses;

(ix) Reviewed the effectiveness of the audit process and the performance of the overall Internal Audit function;

Enterprise risk management

(x) Reviewed the updates and reports from the outsourced risk management consultant on the implementationof the Enterprise-wide Risk Management (ERM) Framework and the development of Enterprise Risk Scorecard,assessed the adequacy and effectiveness of the risk management framework and the appropriateness ofmanagement’s responses to key risk areas and proposed recommendations for improvements to beimplemented;

Recurrent related party transactions

(xi) Reviewed the recurrent related party transactions and ensured that they were not more favourable to therelated parties than those generally available to the public and complied with the MMLR;

(xii) Monitored the thresholds of the recurrent related party transactions to ensure compliance with the MMLR;

(xiii) Reviewed the related party transaction transacted during the financial period ended 31 August 2016 andmade statement of its view whether the transaction is in the best interest of the Company, fair, reasonableand on commercial terms and not detrimental to the interests of the non-interested shareholders of theCompany.

Other activities

(xiv)Reviewed and recommended to the Board for approval, the ARMC report and Statement on Risk Managementand Internal Control for inclusion in the 2015 Annual Report;

(xv) Reviewed, approved and/or recommended to the Board for approval, new policies or amendments to theexisting policies of the Company within the purview of the ARMC to ensure that the polices adopted arealigned with the developments of the rules, regulations, guidelines, best practices issued and recommendedby the relevant regulatory authorities.


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INTERNAL AUDIT FUNCTION

The Group‘s internal audit function is outsourced to a professional services firm, which was tasked with the aimof assisting the ARMC to discharge its duties and responsibilities. The main role of the Internal Auditors is toprovide the ARMC with independent and objective reports on the effectiveness of the system of internal controlswithin the Group. The ARMC discusses the internal audit reports with the Internal Auditors to ensurerecommendations from the reports are duly acted upon by management. 3 internal audit reviews were carriedout during the financial period ended 31 August 2016. The reviews were on the following areas:

a) Business processes review of TMC Fertility Centre at Johor Bahru Branch;b) Procurement and accounts payable and operations management of Tropicana Medical Centre (M) Sdn Bhd;

and c) Business processes review of TMC Fertility Centre at Puchong and Kepong Branch.

The cost incurred in relation to the internal audit function during the financial period ended 31 August 2016 wasRM81,000.

The Statement on Risk Management and Internal Control can be found on pages 34 to 36 of the Annual Report,and this provides an overview of the risk management and internal controls system within the Group.


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S TAT E M E N T O N R I S K M A N A G E M E N TA N D I N T E R N A L C O N T R O L

Introduction

The Malaysian Code on Corporate Governance requires the Board of Directors of public listed companies toestablish a sound risk management framework and system of internal control to safeguard shareholders’investments and the Group’s assets.

Pursuant to paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad(“Listing Requirements”) which requires the Board of Directors of public listed companies to include in the AnnualReport a “statement about the state of internal control of the listed issuer as a group”, the Board of Directors ofTMC Life Sciences Berhad is pleased to provide the following Statement on Risk Management and Internal Controlin accordance with the Statement on Risk Management and Internal Control: Guidelines for Directors of ListedIssuers and Practice Note 9 of the Listing Requirements.

Board Responsibility

The Board of Directors of TMC Life Sciences Berhad acknowledges the importance of maintaining a sound systemof risk management and internal control to safeguard the shareholders’ investments and the Group’s assets. TheBoard is assisted by the Risk Management Committee and management to implement the policies and procedureson risk and control. These include identifying the risks and assessing the potential impacts of the risks, and tohave the necessary internal control to mitigate the risks. The profiles of the risks are reviewed by the Board onannual basis.

The Board also acknowledges that whilst the Group’s system of risk management and internal control is designedto identify, manage and attempt to lower the risk threatening the achievement of business objectives, some risksmay not be totally eliminated. As such, the system of risk management and internal control can only providereasonable but not absolute assurance against material misstatement of financial and management informationand records, and/or against any financial losses or fraud.

The Group’s Risk Management and Internal Control System

Risk Management Framework

The Group recognises that risk is an integral and unavoidable component of its business and is characterised bythreats and opportunities. The Group works on fostering a risk-aware corporate culture and is committed tomanaging the risks in a proactive and effective manner to enhance opportunity, reduce threats and sustain itscompetitive advantage.

The Board has taken necessary measures to ensure that risk management is embedded in the Group’smanagement system with the assistance of the Management, Audit and Risk Management Committee (“ARMC”)and the outsourced Internal Auditors. In addition, the Group has established a Group-wide Strategic EnterpriseRisk Management (“ERM”) Framework leveraging on the best practices of existing frameworks within the Groupand has been updating the risk profiles quarterly.

The Group recognises the importance of quality and caliber of its employees and a variety of training anddevelopment opportunities are actively explored. Relevant training and continuing development programmes areprovided for staff to improve their various areas of knowledge, technical skills and personal development. Thesehad directly and indirectly enhanced their level of risk awareness in their operating environment. With thisunderstanding, risks can be identified or detected, and preventive/corrective measures can be applied to mitigateany losses that may occur.

The Group’s risk management framework is consistent with the ISO 31000 Risk Management Principles andGuidelines, which is designed to establish the context for an embedded ERM into key departments and businessprocesses of the Group.

The key elements of the Group’s Internal Control System

The Group’s internal control system consists of the policies, processes, activities and control environment thatfacilitates an effective and efficient operation by enabling it to respond appropriately to significant business,operational, financial, compliance and other risks in order to achieve the Group’s strategy and objectives.


34



The key elements of the Group’s internal control system, that are regularly reviewed by the Board, are as follows:

i. the Group has in place an established organisational structure with clearly defined lines of key responsibilitiesand appropriate levels of delegation and authority.

ii. the Group has in place internal procedures covering significant areas of operations, such as purchasing ofassets required for the operations of the Group, recruitment and selection of employees, training anddevelopment of employees and has a clear definition of authorisation procedures for purchasing, paymentand capital expenditure.

iii. regular executive committee meetings are held to review and monitor the business developments, to discussand resolve operational and management issues and to review the financial performance of the Group againstthe budget and business plans.

iv. the ARMC reviews the quarterly financial reports, annual financial statements and reports to the Board on itsreview and findings thereon to ensure effectiveness of the internal financial control environment of the Group.

v. the corporate head office coordinates the budgetary process for the Group wherein the budgets are discussedand prepared at the operating unit level, reviewed and recommended by executive committee and finallyapproved by the Board of Directors.

vi. significant corporate matters and its status discussed at the executive committee meetings are brought tothe Board meetings for further deliberation and review by the Board members.

vii. the Board, the ARMC and Management monitor the effectiveness of the Group’s risk management and internalcontrol system.

Management of Risks

The Group is principally involved in providing healthcare services. The Group undertake periodic exercise ofidentifying key external and operational risks faced by all business and functional units. Key risk exposure facedby the Group during the financial period have been identified by all business and functional unit heads through atwo-day workshop and with the appropriate risk mitigation plan being developed accordingly.

The key external risks of the Group include escalating costs resulting in lower operational profits due to inflation,foreign exchange fluctuation impact on the purchase of medical equipment and increasing competition fromexisting established medical and specialist centres. The Group manages the risk through implementing cost controlawareness and initiatives, monitoring the market and pricing trends and periodic review of costing and pricingstrategy to stay competitive in the market. As for increasing competition from existing established medical andspecialist centres, the Group is actively monitoring market development, trends and pricing of competitors.

The key operational risks of the Group include talent retention and limitation of core system capability. The Groupmanages talent retention risk through constantly benchmarking the compensation and rewards to industrystandards, implementation of performance based remuneration and establishing clear career developmentprograms to develop human capital. As for the core system capability risk, the Group established SteeringCommittee to execute strategic information technology plan which align the information technology requirementwith the continuous change in business and operational requirements.

The execution of risk mitigation plan are being monitored and managed by the respective business and functionalunits. Significant deviation from the risk mitigation plan will be reported to the Executive Committee accordingly.

Assurance Mechanisms

The ARMC is tasked by the Board to carry out the duty to review and monitor the effectiveness of the Group’sinternal control system. To discharge its responsibilities, the ARMC relies significantly on the support ofindependent internal auditors to review the effectiveness of risk identification procedures and control processesimplemented by management, and to report directly to the ARMC during the quarterly ARMC meetings. Theindependent internal auditors provide assurance over the operation and validity of the internal control system inrelation to the level of risk involved.

Based on these audits, the internal auditors provide the ARMC with half-yearly reports highlighting observationsand management action plans to improve the internal control system within the Group. In addition, the ARMCalso reviews and deliberates on any matters relating to internal control highlighted by the External Auditors in thecourse of their statutory audit of the financial statements of the Group.


35



36


The Board’s Commitment

As the Group operates in a dynamic business environment, a sound risk management and internal control systemmust be in place in order to be able to support its business objectives. Therefore, the Board remains committedtowards maintaining a sound system of risk management and internal control and believes that a balancedachievement of its business objectives and operational efficiency can be attained.

The Board’s Conclusion

The Board has received assurance from the Group Chief Executive Officer and the Group Chief Financial Officerthat based on the risk management and internal control of the Group as well as inquiry and information provided,the Group’s risk management and internal control system is operating adequately and effectively in all materialaspects.

The Board is of the view that the risk management and internal control system in place for the financial periodunder review and up to the date of issuance of the financial statements, is adequate and effective to safeguardthe shareholders’ investments and the Group’s assets.

Moving forward, the Group will continue to review our existing systems of risk management and internal controls,taking into consideration the changing business environment.

Review of Statement by External Auditors

As required by paragraph 15.23 of the Listing Requirements, the external auditors have reviewed this Statementon Risk Management and Internal Control. As set out in their terms of engagement, the said review procedureswere performed in accordance with the Recommended Practice Guide 5 (Revised): Guidance for Auditors OnEngagements To Report On The Statement On Risk Management and Internal Control Included in the AnnualReport (“RPG 5”) issued by the Malaysian Institute of Accountants.

RPG 5 does not require the external auditors to consider whether this Statement covers all risks and controls, orto form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system.RPG 5 also does not require the external auditors to consider whether the processes described to deal with materialinternal control aspects of any significant problems disclosed in this Annual Report will, in fact, remedy theproblems.

Based on their procedures performed, the external auditors have reported to the Board that nothing has come totheir attention that causes them to believe that this Statement is not prepared in all material respects, inaccordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management andInternal Control: Guidelines for Directors of Listed Issuers, nor is factually inaccurate.



37

O T H E R C O R P O R AT E D I S C L O S U R E

(a) Non-Audit Fees

The amount of audit fees incurred for statutory audit services rendered to the Group by the external auditorsfor the financial period ended 31 August 2016 amounted to RM142,000 of which RM35,000 was incurred byTMC Life Sciences Berhad.

The amount of the non-audit fees incurred for services rendered to TMC Life Sciences Berhad by the externalauditors for the financial period ended 31 August 2016 amounted to RM4,000 and there were no non-auditfees incurred by the subsidiaries.

(b) Material Contracts

During the financial period ended 31 August 2016, there were no material contracts entered into by theCompany and its subsidiaries involving Directors’, chief executive’s and/or major shareholders’ interests.

(c) Utilisation of Proceeds

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

(d) Employees’ Share Option Scheme (‘ESOS’)

The Company implemented an ESOS, which is in force for a period of five (5) years until 28 May 2020 ("theoption period").

The number of ESOS options of the Company during the financial period are as follows:

Number of options over ordinary shares of RM0.10 each

Outstanding Outstanding as at as at 1.6.2015 Granted Exercised Lapsed 31.8.2016

Directors- Executive Directors - 3,500,000 - - 3,500,000- Non-Executive Directors - 13,000,000 - (3,500,000) 9,500,000

16,500,000 - (3,500,000) 13,000,000

Senior Management - 2,000,000 - - 2,000,000Employees - 8,247,500 (45,000) (377,750) 7,824,750

Total - 26,747,500 (45,000) (3,877,750) 22,824,750

Movements during thefinancial period


40 Directors’ Report

46 Statement by Directors

46 Statutory Declaration

47 Independent Auditors’ Report

49 Statements of Financial Position

50 Statements of Profit or Loss and

Other Comprehensive Income

51 Consolidated Statement of Changes in Equity

52 Statement of Changes in Equity

53 Statements of Cash Flows

55 Notes to the Financial Statements

107 Supplementary Information on Realised and

Unrealised Profits or Losses


The Directors have pleasure in submitting their report together with the audited financial statements of the Groupand of the Company for the financial period from 1 June 2015 to 31 August 2016.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding whilst the principal activities of thesubsidiaries are set out in Note 10 to the financial statements. There have been no significant changes in thenature of these activities during the financial period.

CHANGE OF FINANCIAL YEAR END

During the financial period, the Company changed its financial year end from 31 May to 31 August.

RESULTS

Group CompanyRM’000 RM’000

Profit for the financial period, attributable to owners of the parent 20,765 5,711

DIVIDENDS

Dividends paid, declared or proposed since the end of the previous financial year were as follows:

CompanyRM’000

In respect of financial year ended 31 May 2015:Final single tier dividend of 0.14 sen per ordinary share paid on 9 November 2015 2,425

The Directors recommend a final single tier dividend of 0.154 sen per ordinary share in respect of the financialperiod ended 31 August 2016, subject to the approval of members at the forthcoming Annual General Meeting.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial period.

ISSUE OF SHARES AND DEBENTURES

During the financial period, the issued and paid-up ordinary share capital of the Company was increased byRM53,337,833 from RM119,952,143 to RM173,289,976 by way of issuance of 533,378,333 new ordinary sharesof RM0.10 each pursuant to the following:

(a) issuance of 533,333,333 new ordinary shares of RM0.10 each upon completion of the acquisition of entireequity interest in BB Waterfront Sdn. Bhd.; and

(b) issuance of 45,000 new ordinary shares of RM0.10 each pursuant to the exercise of the Employees’ ShareOption Scheme (‘ESOS’) at the exercise price of RM0.75 per ordinary share.


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D I R E C T O R S ’ R E P O RT


ISSUE OF SHARES AND DEBENTURES (continued)

The newly issued ordinary shares rank pari passu in all respects with the existing ordinary shares of the Company.There were no other issues of shares during the financial period.

The Company did not issue any debentures during the financial period.

EMPLOYEES’ SHARE OPTION SCHEME (‘ESOS’)

The Company implemented an ESOS, which is in force for a period of five (5) years until 28 May 2020 ("the optionperiod"). The main features of the ESOS are as follows:

(a) Eligible Directors and employees must be at least eighteen (18) years of age on the Date of Offer, who areconfirmed on the Date of Offer (in respect of Employee only) and have served full time for at least a periodof one (1) year of continuous services before the date of offer;

(b) The total number of shares offered under the ESOS shall not, in aggregate, exceed 15% of the issued andpaid-up ordinary share capital (excluding treasury shares) of the Company at any time during the existenceof the ESOS;

(c) The option price under ESOS is RM0.75 per ordinary share;

(d) The option granted to an Eligible Person shall be subject to a minimum of one hundred (100) Options and inmultiples of one hundred (100) Options and is subject to the following:

(i) Not more than 10% of the shares available under the ESOS shall be allocated to an eligible person, whoeither singly or collectively through persons connected with eligible persons, holds 20% or more of theissued and paid-up ordinary share capital (excluding treasury shares) of the Company.

(e) An option granted under ESOS may be exercised by the grantee upon achieving the vesting conditions set bythe ESOS Committee and is subject to the allotment of shares of 20% per year over the vesting periods offive (5) years; and

(f) The shares shall on issue and allotment rank pari passu in all respect with the then existing issued shares ofthe Company.

The details of the options over the ordinary shares of the Company are as follows:

Outstanding Outstanding ExercisableOption as at as at as at

price 1.6.2015 Granted Exercised Lapsed 31.8.2016 31.8.2016RM ‘000 ‘000 ‘000 ‘000 ‘000 ‘000

Grant dates11 June 2015 0.75 - 16,500 - (3,500) 13,000 3,10028 August 2015 0.75 - 10,248 (45) (378) 9,825 3,676

- 26,748 (45) (3,878) 22,825 6,776


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D I R E C T O R S ’R E P O RT




EMPLOYEES’ SHARE OPTION SCHEME (‘ESOS’) (continued)

The Company has been granted exemption by the Companies Commission of Malaysia vide its letter dated 15 November 2016 from having to disclose the list of option holders to whom options have been granted duringthe financial period and details of their holdings pursuant to Section 169(11) of the Companies Act,1965 inMalaysia except for information of executives who were granted 200,000 options above.

Other than the Directors’ options disclosed under Directors’ interests, the following executives were granted200,000 options and above under the ESOS during the financial period:

Outstanding Outstanding as at as at 1.6.2015 Granted Exercised 31.8.2016 ‘000 ‘000 ‘000 ‘000

Lam Sok Mui - 2,000 - 2,000Chong Soon Mei - 500 (30) 470Jessintha A/P Saverimuthu - 300 - 300Cheow Poh Kheng - 300 - 300Chua Guek Ling - 300 - 300Christina Anak Edward Endot - 300 - 300Guat Eng @ Kua Guat Eng - 250 - 250Loganayagi A/P Thangavelu - 200 - 200Zakaria Bin Zaini - 200 - 200Lai Chooi Hing - 200 - 200

WARRANTS 2015/2019

On 25 June 2015, the Company listed and quoted 266,666,666 Consideration Warrants pursuant to the acquisitionof BB Waterfront Sdn. Bhd. and 599,760,718 Bonus Warrants on the following basis:

(i) One (1) Consideration Warrant for every two (2) Consideration Shares issued for the acquisition of BBWaterfront Sdn. Bhd.; and

(ii) One (1) Bonus Warrant for every two (2) existing ordinary shares held.

The Warrants are constituted by the Deed Poll dated 28 May 2015 (‘Deed Poll’).

Salient features of the Warrants were as follows:

(a) Each Warrant entitled the registered holder thereof (“Warrant holder(s)”) to subscribe for one (1) new ordinaryshare of RM0.10 each in the Company at the exercise price of RM0.75, which may be exercised at any timefrom the date of issuance to the close of business on the market day immediately preceding the date whichwas the fourth anniversary from the date of the issuance of Warrants (“Exercise Period”);

(b) Any Warrants not exercised during the Exercise Period would thereafter lapse and ceased to be valid for anypurpose;

(c) Warrant holders must exercise the Warrants in accordance with the procedures set out in the Deed Poll andshares allotted and issued upon such exercise shall rank pari passu in all respects with the then existingshares of the Company, and shall be entitled for any dividends, rights, allotments and/or other distributionsafter the issue and allotment thereof;


42





WARRANTS 2015/2019 (continued)

(d) The Warrant holders were not entitled to any voting rights or to participate in any distribution and/or offer offurther securities in the Company until and unless such Warrant holders exercise their warrants for new sharesin the Company; and

(e) The Deed Poll and accordingly the Warrants, were governed by and shall be construed in accordance with thelaws of Malaysia.

As at reporting date, 866,427,384 Warrants 2015/2019 remained unexercised.

DIRECTORS

The Directors who have held office since the date of the last report are:

Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir Dato’ Dr. Tan Kee KwongGary Ho Kuat FoongDr. Chan Boon KhengClaire Lee Suk LengRoy Quek Hong ShengKan Kheong NgFreddie Heng Kim Chuan (appointed on 2 November 2016)Dr. Wong Chiang Yin (resigned on 31 December 2015)

DIRECTORS’ INTERESTS

The Directors holding office at the end of the financial period and their beneficial interests in ordinary shares andoptions over ordinary shares of the Company and of its related corporations during the financial period ended 31 August 2016 as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134of the Companies Act, 1965 in Malaysia were as follows:

Number of ordinary shares of RM0.10 eachBalance at Balance at

1.6.2015 Bought Sold 31.8.2016

Shares in the Company

Direct interests:Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir 500,000 - - 500,000

Deemed interests:Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir 200,000 - - 200,000

Number of Warrants Balance at Bonus Balance at

1.6.2015 issue Sold 31.8.2016

Warrants in the Company

Direct interests:Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir - 250,000 - 250,000

Deemed interests:Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir - 100,000 - 100,000


43



DIRECTORS’ INTERESTS (continued)

Option Balance Balance Price as at as at RM 1.6.2015 Granted Exercised 31.8.2016

Share options in the Company

Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir 0.75 - 3,500,000 - 3,500,000

Dato’ Dr. Tan Kee Kwong 0.75 - 2,000,000 - 2,000,000Dr. Chan Boon Kheng 0.75 - 3,500,000 - 3,500,000Gary Ho Kuat Foong 0.75 - 2,000,000 - 2,000,000Claire Lee Suk Leng 0.75 - 2,000,000 - 2,000,000

None of the other Directors holding office at the end of the financial period held any interests in the ordinaryshares and options over ordinary shares in the Company or ordinary shares and option over ordinary shares of itsrelated corporations during the financial period.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the Directors have received or become entitled to receive anybenefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable bythe Directors as shown in the financial statements) by reason of a contract made by the Company or a relatedcorporation with the Director or with a firm of which the Director is a member, or with a company in which theDirector has a substantial financial interest other than those as disclosed in Note 30 to the financial statements.

There were no arrangements during and at the end of the financial period, to which the Company is a party, whichhad the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares inor debentures of the Company or any other body corporate.

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL PERIOD

(a) Before the statements of profit or loss and other comprehensive income and statements of financialposition 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 themaking of provision for doubtful debts and have satisfied themselves that there are no knownbad debts to be written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets other than debts, which were unlikely to realise their bookvalues in the ordinary course of business had been written down to their estimated realisablevalues.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company duringthe financial period have not been substantially affected by any item, transaction or event of a materialand unusual nature.

(II) FROM THE END OF THE FINANCIAL PERIOD TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:

(i) which would necessitate the writing off of bad debts or would render the amount of the provisionfor doubtful debts in the financial statements of the Group and of the Company inadequate toany material extent; and


44


Number of options over ordinary shares


OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued)

(II) FROM THE END OF THE FINANCIAL PERIOD TO THE DATE OF THIS REPORT (continued)

(c) The Directors are not aware of any circumstances (continued):

(ii) which would render the values attributed to current assets in the financial statements of theGroup and of the Company misleading; and

(iii) which have arisen which would render adherence to the existing method of valuation of assetsor liabilities of the Group and of the Company misleading or inappropriate.

(d) In the opinion of the Directors:

(i) there has not arisen any item, transaction or event of a material and unusual nature likely toaffect substantially the results of the operations of the Group and of the Company for thefinancial period in which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, withinthe period of twelve (12) months after the end of the financial period which would or may affectthe ability of the Group and of the Company to meet their obligations as and when they fall due.

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the endof the financial period to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since the endof the financial period.

(g) The Directors are not aware of any circumstances not otherwise dealt with in this report or financialstatements which would render any amount stated in the financial statements of the Group and ofthe Company misleading.

SIGNIFICANT EVENTS DURING THE FINANCIAL PERIOD

Significant events during the financial period are disclosed in Note 36 to the financial statements.

ULTIMATE HOLDING COMPANY

The Directors regard Sasteria Pte. Ltd. as the ultimate holding company, a company incorporated in Singapore.

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

…......................................... .........................................Gary Ho Kuat Foong Roy Quek Hong ShengDirector Director

Petaling Jaya15 December 2016


45



In the opinion of the Directors, the financial statements set out on pages 49 to 106 have been drawn up inaccordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards, and theprovisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of theGroup and of the Company as at 31 August 2016 and of their financial performance and cash flows for the financialperiod from 1 June 2015 to 31 August 2016.

In the opinion of the Directors, the information set out in Note 37 to the financial statements on page 107 hasbeen complied in accordance with the Guidance on Special Matter No.1, Determination of Realised and UnrealisedProfits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements,issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa MalaysiaSecurities Berhad.

On behalf of the Board,

…......................................... .........................................Gary Ho Kuat Foong Roy Quek Hong ShengDirector Director


I, Wong Yu Chee, being the officer primarily responsible for the financial management of TMC Life Sciences Berhad,do solemnly and sincerely declare that the financial statements set out on pages 49 to 107 are, to the best of myknowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be trueand by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed at Petaling Jaya this 15 December 2016 Wong Yu Chee

Before me:

S TAT U T O RY D E C L A R AT I O N


46

S TAT E M E N T B Y D I R E C T O R S



47

I N D E P E N D E N T A U D I T O R S ’ R E P O RT

TO THE MEMBERS OF TMC LIFE SCIENCES BERHAD

Report on the Financial Statements

We have audited the financial statements of TMC Life Sciences Berhad, which comprise the statements of financialposition as at 31 August 2016 of the Group and of the Company, and statements of profit or loss and othercomprehensive income, statements of changes in equity and statements of cash flows of the Group and of theCompany for the financial period from 1 June 2015 to 31 August 2016, and a summary of significant accountingpolicies and other explanatory information, as set out on pages 49 to 106.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true andfair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards,and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internalcontrol as the Directors determine is necessary to enable the preparation of financial statements that are freefrom material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted ouraudit in accordance with approved standards on auditing in Malaysia. Those standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on our judgement, including the assessment of risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, we consider internal control relevant to the entity’s preparation of the financial statements that givea true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates madeby the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of theCompany as of 31 August 2016 and of their financial performance and cash flows for the financial period from 1June 2015 to 31 August 2016 in accordance with Malaysian Financial Reporting Standards, International FinancialReporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by theCompany and its subsidiaries of which we have acted as auditors have been properly kept in accordance withthe provisions of the Act.

(b) We have considered the accounts and the auditors’ report of the subsidiary of which we have not acted asauditors, which is indicated in Note 10 to the financial statements.


Report on Other Legal and Regulatory Requirements (continued)

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following(continued):

(c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the financialstatements of the Company are in form and content appropriate and proper for the purposes of thepreparation of the financial statements of the Group and we have received satisfactory information andexplanations required by us for those purposes.

(d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse commentmade under Section 174(3) of the Act.

Other Reporting Responsibilities

The supplementary information set out in Note 37 to the financial statements is disclosed to meet the requirementof Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible forthe preparation of the supplementary information in accordance with Guidance on Special Matter No. 1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa MalaysiaSecurities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (‘MIA Guidance’) andthe directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, inall material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of theCompanies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other personfor the content of this report.

BDO Rejeesh A/L BalasubramaniamAF : 0206 02895/08/2018 JChartered Accountants Chartered Accountant

Kuala Lumpur15 December 2016


48

I N D E P E N D E N T A U D I T O R S ’ R E P O RT TO THE MEMBERS OF TMC LIFE SCIENCES BERHAD



49

S TAT E M E N T S O F F I N A N C I A L P O S I T I O N

AS AT 31 AUGUST 2016

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

Note RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assets

Property, plant and equipment 8 322,537 113,242 - -Goodwill on consolidation 9 193,045 - - -Investment in subsidiaries 10 - - 483,687 116,303

515,582 113,242 483,687 116,303

Current assets

Inventories 11 6,867 6,512 - -Trade and other receivables 12 30,644 28,125 14,721 7,749Current tax assets 47 173 - 27Cash and bank balances 13 204,558 191,634 171,051 173,430

242,116 226,444 185,772 181,206

TOTAL ASSETS 757,698 339,686 669,459 297,509

EQUITY AND LIABILITIES

Equity attributable to theowners of the parent

Share capital 14 173,290 119,952 173,290 119,952Retained earnings/(Accumulated losses) 19,908 1,568 (529) (3,815)Reserves 15 494,129 180,189 494,090 180,104

687,327 301,709 666,851 296,241Non-controlling interests - - - -

TOTAL EQUITY 687,327 301,709 666,851 296,241

LIABILITIES

Non-current liabilities

Borrowings 16 1,804 1,899 - -Deferred tax liabilities 19 11,096 805 - -

12,900 2,704 - -

Current liabilities

Trade and other payables 20 56,316 35,158 1,619 1,268Borrowings 16 85 81 - -Current tax liabilities 1,070 34 989 -

57,471 35,273 2,608 1,268

TOTAL LIABILITIES 70,371 37,977 2,608 1,268

TOTAL EQUITY AND LIABILITIES 757,698 339,686 669,459 297,509

The accompanying notes form an integral part of the financial statements.



50

S TAT E M E N T S O F P R O F I T O R L O S S A N DO T H E R C O M P R E H E N S I V E I N C O M EFOR THE FINANCIAL PERIOD FROM 1 JUNE 2015 TO 31 AUGUST 2016


Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

Note RM’000 RM’000 RM’000 RM’000

Revenue 21 161,507 103,185 2,500 4,050

Cost of sales (55,740) (36,758) - -

Gross profit 105,767 66,427 2,500 4,050

Other income 10,919 4,516 8,783 3,166

Administrative expenses (87,733) (59,680) (3,719) (3,898)

Selling and distribution expenses (1,822) (1,629) (12) -

Other expenses (1,064) (935) - (6)

Finance costs 22 (126) (101) - -

Profit before taxation 23 25,941 8,598 7,552 3,312

Taxation 24 (5,176) 1,325 (1,841) (665)

Profit for the financial period/year 20,765 9,923 5,711 2,647

Other comprehensive (loss)/income:

Items that may be reclassified subsequently to profit or loss

Foreign currency translations 24(f) (46) 5 - -

Other comprehensive (loss)/income,net of tax (46) 5 - -

Total comprehensive income 20,719 9,928 5,711 2,647

Profit attributable to:

Owners of the parent 20,765 9,923 5,711 2,647Non-controlling interests - - - -

20,765 9,923 5,711 2,647

Total comprehensive income attributable to:

Owners of the parent 20,719 9,928 5,711 2,647Non-controlling interests - - - -

20,719 9,928 5,711 2,647

Earnings per ordinary shareattributable to the owners of the parent (sen):

- Basic 26 1.22 1.01

- Diluted 26 0.81 1.01



51

C O N S O L I D AT E D S TAT E M E N T O F C H A N G E S I N E Q U I T Y

FOR THE FINANCIAL PERIOD FROM 1 JUNE 2015 TO 31 AUGUST 2016

Non-distributableForeign (Accumulated

exchange losses)/Share Share Warrants translation Retained Total

capital premium reserve* reserve earnings equityGroup Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Balance as at 1 June 2014 80,237 33,159 28,083 80 (6,169) 135,390

Profit for the financial year - - - - 9,923 9,923Other comprehensive income, net of tax - - - 5 - 5

Total comprehensive income - - - 5 9,923 9,928

Transactions with owners

Ordinary shares issued pursuant to warrants exercised 39,715 119,144 - - - 158,859

Warrants exercised and expiry of unexercised warrants - 27,801 (28,083) - 282 -

Dividends paid - - - - (2,468) (2,468)

Total transactions with owners 39,715 146,945 (28,083) - (2,186) 156,391

Balance at 31 May 2015 119,952 180,104 - 85 1,568 301,709

Non-distributableForeign

Share exchangeShare Share Warrants options translation Retained Total

capital premium reserve reserve reserve earnings equityGroup Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Balance as at 1 June 2015 119,952 180,104 - - 85 1,568 301,709

Profit for the financial period - - - - - 20,765 20,765Other comprehensive income, net of tax - - - - (46) - (46)

Total comprehensive income - - - - (46) 20,765 20,719


Ordinary shares issued pursuant to: - acquisition of subsidiaries 10(a) 53,333 266,667 46,960 - - - 366,960- ESOS 5 34 - (5) - - 34

Share issuance expenses - (1,364) - - - - (1,364)Share options grantedunder ESOS - - - 1,694 - - 1,694

Dividends paid 25 - - - - - (2,425) (2,425)

Total transactions with owners 53,338 265,337 46,960 1,689 - (2,425) 364,899

Balance at 31 August 2016 173,290 445,441 46,960 1,689 39 19,908 687,327

Distributable

Distributable

* Warrant reserve is in relation to warrant expired on 22 December 2014.The accompanying notes form an integral part of the financial statements.



52

S TAT E M E N T O F C H A N G E S I N E Q U I T YFOR THE FINANCIAL PERIOD FROM 1 JUNE 2015 TO 31 AUGUST 2016

Non-distributableShare Share Warrants Accumulated Total

capital premium reserve losses equityCompany Note RM’000 RM’000 RM’000 RM’000 RM’000

Balance as at 1 June 2014 80,237 33,159 28,083 (4,276) 137,203

Profit for the financial year - - - 2,647 2,647Other comprehensive income, net of tax - - - - -

Total comprehensive income - - - 2,647 2,647


Ordinary shares issued pursuant to warrants exercised 39,715 119,144 - - 158,859

Warrants exercised and expiry of unexercised warrants - 27,801 (28,083) 282 -

Dividends paid - - - (2,468) (2,468)

Total transactions with owners 39,715 146,945 (28,083) (2,186) 156,391

Balance at 31 May 2015 119,952 180,104 - (3,815) 296,241

Non-distributableShare

Share Share Warrants options Accumulated Totalcapital premium reserve reserve losses equity

Company Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Balance as at 1 June 2015 119,952 180,104 - - (3,815) 296,241

Profit for the financial period - - - - 5,711 5,711Other comprehensive income, net of tax - - - - - -

Total comprehensive income - - - - 5,711 5,711


Ordinary shares issued pursuant to: - acquisition of a subsidiary 10(a) 53,333 266,667 46,960 - - 366,960- ESOS 5 34 - (5) - 34Share issuance expenses - (1,364) - - - (1,364)Share options granted under ESOS - - - 1,694 - 1,694Dividends paid 25 - - - - (2,425) (2,425)

Total transactions with owners 53,338 265,337 46,960 1,689 (2,425) 364,899

Balance at 31 August 2016 173,290 445,441 46,960 1,689 (529) 666,851




53

S TAT E M E N T S O F C A S H F L O W S

FOR THE FINANCIAL PERIOD FROM 1 JUNE 2015 TO 31 AUGUST 2016

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 25,941 8,598 7,552 3,312

Adjustments for:

Depreciation of property, plant andequipment 8 11,739 8,265 - -

Dividend income 21 - - (2,500) (4,050)Impairment losses on:- trade receivables 12 1,062 604 - -- other receivables 12 - - - 6Interest expense 126 101 - -Interest income (9,526) (3,653) (8,738) (3,166)Gain on disposal of property,plant and equipment (20) (8) - -

Property, plant and equipment written off 8 2 74 - -

Reversal of impairment losses on:- trade receivables 12 (3) (327) - -- other receivables 12 - - (45) -Share options granted under ESOS 1,694 - 1,271 -Unrealised (gain)/loss on foreign exchange (159) 1 - -

Operating profit/(loss) before changes in working capital 30,856 13,655 (2,460) (3,898)

Inventories (355) (1,874) - -Trade and other receivables (3,579) (7,291) (1,348) (750)Trade and other payables 5,374 7,025 98 643

Cash generated from/(used in) operations 32,296 11,515 (3,710) (4,005)

Income tax paid (899) (690) (825) (450)Interest paid (126) (101) - -

Net cash from/(used in) operating activities 31,271 10,724 (4,535) (4,455)




54

S TAT E M E N T S O F C A S H F L O W SFOR THE FINANCIAL PERIOD FROM 1 JUNE 2015 TO 31 AUGUST 2016

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of a subsidiary, net of cash acquired 10(a) 1,149 - - -

Dividends received 21 - - 2,500 4,050Deposits placed with financial institutionswith original maturity of more than three(3) months (104,654) (49,459) (100,580) (48,200)

Interest received 9,526 3,653 8,738 3,166Placement of deposits pledged witha licensed bank (4) (507) - -

Proceeds from disposals of property,plant and equipment 25 8 - -

Purchase of property, plant andequipment 8(c) (25,157) (11,708) - -

Advances to subsidiaries - - (5,326) (2,200)Subscription for ordinary shares in a subsidiary 10(b) - - (1) -

Net cash used in investing activities (119,115) (58,013) (94,669) (43,184)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid 25 (2,425) (2,468) (2,425) (2,468)Proceeds from ordinary shares issuedpursuant to:- warrants exercised - 158,859 - 158,859- ESOS exercised 34 - 34 -Share issuance expenses (1,364) - (1,364) -Repayments of:- hire-purchase creditor (25) (19) - -- term loan (66) (52) - -

Net cash (used in)/from financing activities (3,846) 156,320 (3,755) 156,391

Net (decrease)/increase in cash and cashequivalents (91,690) 109,031 (102,959) 108,752

Cash and cash equivalents at beginningof the financial period/year 141,605 32,567 125,230 16,478

Effects of exchange rate changes oncash and cash equivalents (44) 7 - -

Cash and cash equivalents at endof the financial period/year 13 49,871 141,605 22,271 125,230




55

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

31 AUGUST 2016

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed onthe Main Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at 802, 8th Floor, Block C, Kelana Square, 17 Jalan SS 7/26,47301 Petaling Jaya, Selangor Darul Ehsan.

The principal place of business of the Company is located at C-13-09 Sunway Nexis, No.1, Jalan PJU 5/1,Dataran Sunway, Kota Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan.

The immediate and ultimate holding companies of the Company are Sasteria (M) Pte. Ltd. and Sasteria Pte.Ltd. respectively, both of which are incorporated in Singapore.

The consolidated financial statements for the financial period ended 31 August 2016 comprise the Companyand its subsidiaries. These financial statements are presented in Ringgit Malaysia (“RM”), which is also thefunctional currency of the Company. All financial information presented in RM has been rounded to the nearestthousand, unless otherwise stated.

The financial statements were authorised for issue in accordance with a resolution by the Board of Directorson 15 December 2016.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding whilst the principal activities ofthe subsidiaries are set out in Note 10 to the financial statements. There have been no significant changes inthe nature of these activities during the financial period.

3. CHANGE OF FINANCIAL YEAR END

During the financial period, the Company changed its financial year end from 31 May to 31 August.

4. BASIS OF PREPARATION

The financial statements of the Group and of the Company set out on pages 49 to 106 have been preparedin accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial ReportingStandards (“IFRSs”) and the provisions of the Companies Act, 1965 in Malaysia.

However, Note 37 to the financial statements set out on page 107 has been prepared in accordance withGuidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Contextof Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the MalaysianInstitute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad.

5. SIGNIFICANT ACCOUNTING POLICIES

5.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared under the historical costconvention except as otherwise stated in the financial statements.

The preparation of financial statements in conformity with MFRSs requires the Directors to makeestimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expensesand disclosure of contingent assets and contingent liabilities. In addition, the Directors are also requiredto exercise their judgement in the process of applying the accounting policies. The areas involving suchjudgements, estimates and assumptions are disclosed in Note 7 to the financial statements. Althoughthese estimates and assumptions are based on the Directors’ best knowledge of events and actions,actual results could differ from those estimates.


5. SIGNIFICANT ACCOUNTING POLICIES (continued)

5.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all itssubsidiaries. Control is achieved when the Group is exposed, or has rights, to variable returns from itsinvolvement with the investee and has the ability to affect those returns through its power over theinvestee. Specifically, the Group controls an investee if and only if the Group has:

(a) Power over the investee;(b) Exposure, or rights, to variable returns from its involvement with the investee; and(c) The ability to use its power over the investee to affect its returns.

If the Group has less than a majority of the voting or similar rights of an investee, the Group considersall relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) The contractual arrangement with the other vote holders of the investee;(b) Rights arising from other contractual agreements; and(c) The voting rights of the Group and potential voting rights.

Intragroup balances, transactions, income and expenses are eliminated on consolidation. Unrealisedgains arising from transactions with associates and joint ventures are eliminated against the investmentto the extent of the interest of the Group in the investee. Unrealised losses are eliminated in the sameway as unrealised gains, but only to the extent that there is no impairment.

The financial statements of the subsidiaries are prepared for the same reporting period as that of theCompany, using consistent accounting policies. Where necessary, accounting policies of subsidiaries arechanged to ensure consistency with the policies adopted by the other entities in the Group.

Non-controlling interests represent equity in subsidiaries that are not attributable, directly or indirectly,to owners of the parent, and is presented separately in the consolidated statement of profit or loss andother comprehensive income and within equity in the consolidated statement of financial position,separately from equity attributable to owners of the Company. Profit or loss and each component ofother comprehensive income are attributed to the owners of the parent and to the non-controllinginterests. Total comprehensive income is attributed to non-controlling interests even if this results in thenon-controlling interests having a deficit balance.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate thatthere are changes to one or more of the three elements of control. Subsidiaries are consolidated fromthe date on which control is transferred to the Group up to the effective date on which control ceases,as appropriate. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of duringthe financial year are included in the statement of profit or loss and other comprehensive income fromthe date the Group gains control until the date the Group ceases to control the subsidiary.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of controlare accounted for as equity transactions. In such circumstances, the carrying amounts of the controllingand non-controlling interests are adjusted to reflect the changes in their relative interests in thesubsidiary. Any difference between the amount by which the non-controlling interest is adjusted and thefair value of consideration paid or received is recognised directly in equity and attributed to owners ofthe parent.

If the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the differencebetween:

(a) The aggregate of the fair value of the consideration received and the fair value of any retainedinterest; and

(b) The previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary andany non-controlling interests.


56

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S31 AUGUST 2016



5.2 Basis of consolidation (continued)

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

5.3 Business combinations

Business combinations are accounted for by applying the acquisition method of accounting.

Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination aremeasured at their fair value at the acquisition date, except that:

(a) deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangementsare recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119 EmployeeBenefits respectively;

(b) liabilities or equity instruments related to share-based payment transactions of the acquiree or thereplacement by the Group of an acquiree’s share-based payment transactions are measured inaccordance with MFRS 2 Share-based Payment at the acquisition date; and

(c) assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-currentAssets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred andthe services are received.

Any contingent consideration payable is recognised at fair value at the acquisition date. Measurementperiod adjustments to contingent consideration are dealt with as follows:

(a) If the contingent consideration is classified as equity, it is not remeasured and settlement isaccounted for within equity.

(b) Subsequent changes to contingent consideration classified as an asset or liability that is a financialinstrument within the scope of MFRS 139 are recognised either in profit or loss or in othercomprehensive income in accordance with MFRS 139. All other subsequent changes are recognisedin profit or loss.

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

Components of non-controlling interests in the acquiree that are present ownership interests and entitletheir holders to a proportionate share of the entity’s net assets in the event of liquidation are initiallymeasured at the present ownership instruments’ proportionate share in the recognised amounts of theacquiree’s identifiable net assets. All other components of non-controlling interests shall be measured attheir acquisition-date fair values, unless another measurement basis is required by MFRSs. The choiceof measurement basis is made on a combination-by-combination basis. Subsequent to initial recognition,the carrying amount of non-controlling interests is the amount of those interests at initial recognitionplus the non-controlling interests’ share of subsequent changes in equity.


57


31 AUGUST 2016



5.3 Business combinations (continued)

Any excess of the sum of the fair value of the consideration transferred in the business combination, theamount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previouslyheld equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assetsand liabilities is recorded as goodwill in the statement of financial position. In instances where the latteramount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss onthe acquisition date.

5.4 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure thatis directly attributable to the acquisition of the asset.

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

Each part of an item of property, plant and equipment with a cost that is significant in relation to thetotal cost of the asset and which has different useful life, is depreciated separately.

After initial recognition, property, plant and equipment except for freehold land are stated at cost lessany accumulated depreciation and any accumulated impairment losses, if any.

Depreciation is calculated to write off the cost of the assets to their residual value on a straight-line basisover their estimated useful lives. The principal annual depreciation periods and rates are as follows:

Long term leasehold land 99 yearsBuildings 2%Electrical and mechanical equipment 10%Motor vehicles 20%Medical equipment 10% - 20%Furniture and fittings 10% - 15%Renovation 10% - 15%Office equipment and computers 10% - 33 1/3%

Freehold land has unlimited useful life and is not depreciated. Assets under construction are stated atcost, and are not depreciated until such time when the asset is available for use.

At the end of each reporting period, the carrying amount of an item of property, plant and equipment isassessed for impairment when events or changes in circumstances indicate that its carrying amount maynot be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (seeNote 5.8 to the financial statements on impairment of non-financial assets).

The residual values, useful lives and depreciation method are reviewed at the end of each reportingperiod to ensure that the amount, method and period of depreciation are consistent with previousestimates and the expected pattern of consumption of the future economic benefits embodied in theitems of property, plant and equipment. If expectations differ from previous estimates, the changes areaccounted for as a change in an accounting estimate.

The carrying amount of an item of property, plant and equipment is derecognised on disposal or whenno future economic benefits are expected from its use or disposal. The difference between the netdisposal proceeds, if any, and the carrying amount is included in profit or loss.


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5.5 Leases and hire-purchase

(a) Finance leases and hire-purchase

Assets acquired under finance leases and hire-purchase which transfer substantially all the risksand rewards of ownership to the Group are recognised initially at amounts equal to the fair value ofthe leased asset or, if lower, the present value of the minimum lease payments, each determined atthe inception of the lease. The discount rate used in calculating the present value of the minimumlease payments is the interest rate implicit in the leases, if this is practicable to determine; if not,the incremental borrowing rate of the Group is used. Any initial direct costs incurred by the Groupare added to the amount recognised as an asset. The assets are capitalised as property, plant andequipment and the corresponding obligations are treated as liabilities. The property, plant andequipment capitalised are depreciated on the same basis as owned assets.

The minimum lease payments are apportioned between the finance charges and the reduction ofthe outstanding liability. The finance charges are recognised in profit or loss over the period of thelease term so as to produce a constant periodic rate of interest on the remaining lease and hire-purchase liabilities.

(b) Operating leases

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewardsincidental to ownership.

Lease payments under operating leases are recognised as an expense on a straight-line basis overthe lease term.

(c) Leases of land and buildings

For leases of land and buildings, the land and buildings elements are considered separately for thepurpose of lease classification and these leases are classified as operating or finance leases in thesame way as leases of other assets.

The minimum lease payments including any lump-sum upfront payments made to acquire theinterest in the land and buildings are allocated between the land and the buildings elements inproportion to the relative fair values of the leasehold interests in the land element and the buildingselement of the lease at the inception of the lease.

For a lease of land and buildings in which the amount that would initially be recognised for the landelement is immaterial, the land and buildings are treated as a single unit for the purpose of leaseclassification and is accordingly classified as a finance or operating lease. In such a case, theeconomic life of the buildings is regarded as the economic life of the entire leased asset.

5.6 Investments

Subsidiaries

A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to variablereturns from its involvement with the subsidiary and have the ability to affect those returns through itspower over the subsidiary.

An investment in subsidiary, which is eliminated on consolidation, is stated in the separate financialstatements of the Company at cost less impairment losses, if any. Investments accounted for at costshall be accounted for in accordance with MFRS 5 Non-current Assets Held for Sale and DiscontinuedOperations when they are classified as held for sale (or included in a disposal group that is classified asheld for sale) in accordance with MFRS 5.


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5.6 Investments (continued)

Subsidiaries (continued)

When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Groupwould derecognise all assets, liabilities and non-controlling interests at their carrying amount and torecognise the fair value of the consideration received. Any retained interest in the former subsidiary isrecognised at its fair value at the date control is lost. The resulting difference is recognised as a gain orloss in profit or loss.

5.7 Goodwill

Goodwill recognised in a business combination is an asset at the acquisition date and is initially measuredat cost being the excess of the sum of the consideration transferred, the amount of any non-controllinginterest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in theentity over net of the acquisition-date amounts of the identifiable assets acquired and the liabilitiesassumed. If, after reassessment, the interest of the Group in the fair value of the acquiree’s identifiablenet assets exceeds the sum of the consideration transferred, the amount of any non-controlling interestin the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any),the excess is recognised immediately in profit or loss as a bargain purchase gain.

After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwillis not amortised but instead tested for impairment annually or more frequently if events or changes incircumstances indicate that the carrying amount could be impaired. Objective events that would triggera more frequent impairment review include adverse industry or economic trends, significant restructuringactions, significantly lowered projections of profitability, or a sustained decline in the acquiree’s marketcapitalisation. Gains and losses on the disposal of an entity include the carrying amount of goodwillrelating to the entity sold.

5.8 Impairment of non-financial assets

The carrying amount of assets, except for financial assets (excluding investment in subsidiaries), andinventories, are reviewed at the end of each reporting period to determine whether there is any indicationof impairment. If any such indication exists, the asset’s recoverable amount is estimated.

The recoverable amount of an asset is estimated for an individual asset. Where it is not possible toestimate the recoverable amount of the individual asset, the impairment test is carried out on the cashgenerating unit (“CGU”) to which the asset belongs.

Goodwill that have an indefinite useful life are tested annually for impairment or more frequently if eventsor changes in circumstances indicate that the goodwill might be impaired.

The recoverable amount of an asset is estimated for an individual asset. Where it is not possible toestimate the recoverable amount of the individual asset, the impairment test is carried out on the CGUto which the asset belongs. Goodwill acquired in a business combination is from the acquisition date,allocated to each of the CGU or groups of CGU of the Group that are expected to benefit from thesynergies of the combination giving rise to the goodwill irrespective of whether other assets or liabilitiesof the acquiree are assigned to those units or groups of units.

Goodwill acquired in a business combination shall be tested for impairment as part of the impairmenttesting of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest levelwithin the Group at which the goodwill is monitored for internal management purposes and not largerthan an operating segment determined in accordance with MFRS 8 Operating Segments.

The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use.


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5.8 Impairment of non-financial assets (continued)

In estimating the value in use, the estimated future cash inflows and outflows to be derived fromcontinuing use of the asset and from its ultimate disposal are discounted to their present value usinga pre-tax discount rate that reflects current market assessments of the time value of money and therisks specific to the asset for which the future cash flow estimates have not been adjusted. Animpairment loss is recognised in profit or loss when the carrying amount of the asset or the CGU,including the goodwill, exceeds the recoverable amount of the asset or the CGU. The total impairmentloss is allocated first, to reduce the carrying amount of any goodwill allocated to the CGU and then tothe other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU. Theimpairment loss is recognised in profit or loss immediately.

An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for otherassets is reversed if, and only if, there has been a change in the estimates used to determine theassets’ recoverable amount since the last impairment loss was recognised.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceedthe carrying amount that would have been determined, net of depreciation or amortisation, if noimpairment loss had been recognised. Such reversals are recognised as income immediately in profitor loss.

5.9 Inventories

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

Cost is determined on a weighted average basis or specific identification as appropriate and comprisesthe original cost of purchase plus the cost of bringing the inventories to their present location andcondition.

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

5.10 Financial instruments

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

A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractualright to receive cash or another financial asset from another enterprise, or a contractual right toexchange financial assets or financial liabilities with another enterprise under conditions that arepotentially favourable to the Group.

A financial liability is any liability that is a contractual obligation to deliver cash or another financialasset to another enterprise, or a contractual obligation to exchange financial assets or financial liabilitieswith another enterprise under conditions that are potentially unfavourable to the Group.

Financial instruments are recognised on the statement of financial position when the Group has becomea party to the contractual provisions of the instrument. At initial recognition, a financial instrument isrecognised at fair value plus, in the case of a financial instrument not at fair value through profit orloss, transaction costs that are directly attributable to the acquisition or issuance of the financialinstrument.

An embedded derivative is separated from the host contract and accounted for as a derivative if, andonly if the economic characteristics and risks of the embedded derivative is not closely related to theeconomic characteristics and risks of the host contract, a separate instrument with the same terms asthe embedded derivative meets the definition of a derivative, and the hybrid instrument is notmeasured at fair value through profit or loss.


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5.10 Financial instruments (continued)

5.10.1 Financial assets

A financial asset is classified into the following four (4) categories after initial recognition forthe purpose of subsequent measurement:

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss comprise financial assets that are heldfor trading (i.e. financial assets acquired principally for the purpose of resale in the nearterm), derivatives (both, freestanding and embedded) and financial assets that werespecifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial assets classified as fair value through profitor loss are measured at fair value. Any gains or losses arising from changes in the fairvalue of financial assets classified as fair value through profit or loss are recognised inprofit or loss.

However, derivatives that is linked to and must be settled by delivery of unquoted equityinstruments that do not have a quoted market price in an active market are recognisedat cost.

(b) Held-to-maturity investments

Financial assets classified as held-to-maturity comprise non-derivative financial assetswith fixed or determinable payments and fixed maturity that the Group has the positiveintention and ability to hold to maturity.

Subsequent to initial recognition, financial assets classified as held-to-maturity aremeasured at amortised cost using the effective interest method. Gains or losses onfinancial assets classified as held-to-maturity are recognised in profit or loss when thefinancial assets are derecognised or impaired, and through the amortisation process.

(c) Loans and receivables

Financial assets classified as loans and receivables comprise non-derivative financialassets with fixed or determinable payments that are not quoted in an active market.

Subsequent to initial recognition, financial assets classified as loans and receivables aremeasured at amortised cost using the effective interest method. Gains or losses onfinancial assets classified as loans and receivables are recognised in profit or loss whenthe financial assets are derecognised or impaired, and through the amortisation process.

(d) Available-for-sale financial assets

Financial assets classified as available-for-sale comprise non-derivative financial assetsthat are designated as available for sale or are not classified as loans and receivables,held-to-maturity investments or financial assets at fair value through profit or loss.

Subsequent to initial recognition, financial assets classified as available-for-sale aremeasured at fair value. Any gains or losses arising from changes in the fair value offinancial assets classified as available-for-sale are recognised directly in othercomprehensive income, except for impairment losses and foreign exchange gains andlosses, until the financial asset is derecognised, at which time the cumulative gains orlosses previously recognised in other comprehensive income are recognised in profit orloss. However, interest calculated using the effective interest method is recognised inprofit or loss whilst dividends on available-for-sale equity instruments are recognised inprofit or loss when the Group’s right to receive payment is established.


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5.10.1 Financial assets (continued)

Cash and cash equivalents consist of cash on hand, balances and deposits with banks andhighly liquid investments which have an insignificant risk of changes in fair value with originalmaturities of three (3) months or less, and are used by the Group and the Company in themanagement of their short term commitments.

A financial asset is derecognised when the contractual right to receive cash flows from thefinancial asset has expired. On derecognition of a financial asset in its entirety, the differencebetween the carrying amount and the sum of consideration received (including any new assetobtained less any new liability assumed) and any cumulative gain or loss that had beenrecognised directly in other comprehensive income shall be recognised in profit or loss.

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whoseterms require delivery of the asset within the time frame established generally by regulationor marketplace convention. A regular way purchase or sale of financial assets shall berecognised and derecognised, as applicable, using trade date accounting.

5.10.2 Financial liabilities

Financial instruments are classified as liabilities or equity in accordance with the substance ofthe contractual arrangement. A financial liability is classified into the following two (2)categories after initial recognition for the purpose of subsequent measurement:

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss comprise financial liabilities thatare held for trading, derivatives (both, freestanding and embedded) and financialliabilities that were specifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial liabilities classified as fair value through profitor loss are measured at fair value. Any gains or losses arising from changes in the fairvalue of financial liabilities classified as fair value through profit or loss are recognised inprofit or loss.

(b) Other financial liabilities

Financial liabilities classified as other financial liabilities comprise non-derivative financialliabilities that are neither held for trading nor initially designated as at fair value throughprofit or loss.

Subsequent to initial recognition, other financial liabilities are measured at amortisedcost using the effective interest method. Gains or losses on other financial liabilities arerecognised in profit or loss when the financial liabilities are derecognised and throughthe amortisation process.

A financial liability is derecognised when, and only when, it is extinguished, i.e. when theobligation specified in the contract is discharged or cancelled or expires. An exchange betweenan existing borrower and lender of debt instruments with substantially different terms areaccounted for as an extinguishment of the original financial liability and the recognition of anew financial liability. Similarly, a substantial modification of the terms of an existing financialliability is accounted for as an extinguishment of the original financial liability and therecognition of a new financial liability.

Any difference between the carrying amount of a financial liability extinguished or transferredto another party and the consideration paid, including any non-cash assets transferred orliabilities assumed, is recognised in profit or loss.


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5.10.2 Financial liabilities (continued)

A financial guarantee contract is a contract that requires the issuer to make specified paymentsto reimburse the holder for a loss it incurs because a specified debtor fails to make paymentwhen due in accordance with the original or modified terms of a debt instrument.

The Group designates corporate guarantees given to banks for credit facilities granted tosubsidiaries as insurance contracts as defined in MFRS 4 Insurance Contracts. The Grouprecognises these insurance contracts as recognised insurance liabilities when there is a presentobligation, legal or constructive, as a result of a past event, when it is probable that an outflowof resources embodying economic benefits would be required to settle the obligation and areliable estimate can be made of the amount of the obligation.

At the end of every reporting period, the Group reassess whether its recognised insuranceliabilities are adequate, using current estimates of future cash flows under its insurancecontracts. If this assessment shows that the carrying amount of the insurance liabilities areinadequate, the entire deficiency shall be recognised in profit or loss.

Recognised insurance liabilities are only removed from statement of financial position when,and only when, it is extinguished via a discharge, cancellation or expiration.

5.10.3 Equity

An equity instrument is any contract that evidences a residual interest in the assets of theGroup and the Company after deducting all of its liabilities. Ordinary shares are classified asequity instruments.

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal valueof shares issued, if any, are accounted for as share premium. Both ordinary shares and sharepremium are classified as equity. Transaction costs of an equity transaction are accounted foras a deduction from equity, net of any related income tax benefit. Otherwise, they are chargedto profit or loss.

Interim dividends to shareholders are recognised in equity in the period in which they aredeclared. Final dividends are recognised upon the approval of shareholders in a generalmeeting.

The Group measures a liability to distribute non-cash assets as a dividend to the owners ofthe Company at the fair value of the assets to be distributed. The carrying amount of thedividend is remeasured at the end of each reporting date and at the settlement date, with anychanges recognised directly in equity as adjustments to the amount of the distribution. Onsettlement of the transaction, the Group recognises the difference, if any, between the carryingamount of the assets distributed and the carrying amount of the liability in profit or loss.

When the Group repurchases its own shares, the shares repurchased would be accounted forusing the treasury stock method.

Where the treasury stock method is applied, the shares repurchased and held as treasuryshares shall be measured and carried at the cost of repurchase on initial recognition andsubsequently. It shall not be revalued for subsequent changes in the fair value or market priceof the shares.

The carrying amount of the treasury shares shall be offset against equity in the statement offinancial position. To the extent that the carrying amount of the treasury shares exceeds theshare premium account, it shall be considered as a reduction of any other reserves as may bepermitted by the Companies Act, 1965 in Malaysia.

No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of theown equity instruments of the Company. If such shares are issued by resale, any differencebetween the sales consideration and the carrying amount is shown as a movement in equity.


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5.11 Impairment of financial assets

The Group assess whether there is any objective evidence that a financial asset is impaired at the endof each reporting period.

Loans and receivables

The Group collectively considers factors such as the probability of bankruptcy or significant financialdifficulties of the receivable, and default or significant delay in payments by the receivables todetermine whether there is objective evidence that an impairment loss on loans and receivables hasoccurred. Other objective evidence of impairment include historical collection rates determined on anindividual basis and observable changes in national or local economic conditions that are directlycorrelated with the historical default rates of receivables.

If any such objective evidence exists, the amount of impairment loss is measured as the differencebetween the financial asset’s carrying amount and the present value of estimated future cash flowsdiscounted at the financial asset’s original effective interest rate. The impairment loss is recognised inprofit or loss.

The carrying amount of loans and receivables are reduced through the use of an allowance account.

If in a subsequent period, the amount of the impairment loss decreases and it objectively relates toan event occurring after the impairment was recognised, the previously recognised impairment loss isreversed to the extent that the carrying amount of the asset does not exceed its amortised cost at thereversal date. The amount of impairment reversed is recognised in profit or loss.

5.12 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifiedasset is capitalised as part of the cost of the asset until when substantially all the activities necessaryto prepare the asset for its intended use or sale are complete, after which such expense is charged toprofit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to getready for its intended use or sale. Capitalisation of borrowing cost is suspended during extendedperiods in which active development is interrupted.

The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on theborrowing during the period less any investment income on the temporary investment of the borrowing.

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

5.13 Warrants reserve

Amount allocated in relation to the issuance of free warrants are credited to a warrants reserve whichis non-distributable. Warrants reserve is transferred to the share premium account upon the exerciseof warrants and the warrants reserve in relation to the unexercised warrants at the expiry of thewarrants period will be transferred to retained earnings.

5.14 Income taxes

Income taxes include all domestic and foreign taxes on taxable profits. Income taxes also include othertaxes, such as withholding taxes, which are payable by foreign subsidiaries on distributions to theGroup and Company.

Taxes in the statements of profit or loss and other comprehensive income comprise current tax anddeferred tax.


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5.14 Income taxes (continued)

(a) Current tax

Current tax expenses are determined according to the tax laws of each jurisdiction in which theGroup operates and include all taxes based upon the taxable profits.

(b) Deferred tax

Deferred tax is recognised in full using the liability method on temporary differences arisingbetween the carrying amount of an asset or liability in the statement of financial position and itstax base.

Deferred tax is recognised for all temporary differences, unless the deferred tax arises fromgoodwill or the initial recognition of an asset or liability in a transaction which is not a businesscombination and at the time of transaction, affects neither accounting profit nor taxable profit.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profitswould be available against which the deductible temporary differences, unused tax losses andunused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at theend of each reporting period. If it is no longer probable that sufficient taxable profit would beavailable to allow the benefit of part or all of that deferred tax asset to be utilised, the carryingamount of the deferred tax asset would be reduced accordingly. When it becomes probable thatsufficient taxable profit would be available, such reductions would be reversed to the extent ofthe taxable profits.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set offcurrent tax assets against current tax liabilities and when the deferred income taxes relate to thesame taxation authority on either:

(i) the same taxable entity; or

(ii) different taxable entities which intend either to settle current tax liabilities and assets on anet basis, or to realise the assets and settle the liabilities simultaneously, in each futureperiod in which significant amounts of deferred tax liabilities or assets are expected to besettled or recovered.

Deferred tax would be recognised as income or expense and included in the profit or loss for theperiod unless the tax relates to items that are credited or charged, in the same or a differentperiod, directly to equity, in which case the deferred tax would be charged or credited directly toequity.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to theyear when the asset is realised or the liability is settled, based on the announcement of tax ratesand tax laws by the Government in the annual budgets which have the substantive effect of actualenactment by the end of the reporting period.

5.15 Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a pastevent, when it is probable that an outflow of resources embodying economic benefits would be requiredto settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, the amount of a provision would be discounted toits present value at a pre-tax rate that reflects current market assessments of the time value of moneyand the risks specific to the liability.


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5.15 Provisions (continued)

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current bestestimate. If it is no longer probable that an outflow of resources embodying economic benefits wouldbe required to settle the obligation, the provision would be reversed.

Provisions for restructuring are recognised when the Group has approved a detailed formalrestructuring plan, and the restructuring either has commenced or has been announced publicly.

Provisions are not recognised for future operating losses. If the Group has a contract that is onerous,the present obligation under the contract shall be recognised and measured as a provision.

5.16 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence would beconfirmed by the occurrence or non-occurrence of one or more uncertain future events beyond thecontrol of the Group or a present obligation that is not recognised because it is not probable that anoutflow of resources would be required to settle the obligation. A contingent liability also arises inextremely rare cases where there is a liability that cannot be recognised because it cannot be measuredreliably. The Group does not recognise a contingent liability but discloses its existence in the financialstatements.

A contingent asset is a possible asset that arises from past events whose existence would be confirmedby the occurrence or non-occurrence of one or more uncertain future events beyond the control of theGroup. The Group does not recognise contingent assets but disclose its existence where inflows ofeconomic benefits are probable, but not virtually certain.

In the acquisition of subsidiaries by the Group under business combinations, contingent liabilitiesassumed are measured initially at their fair value at the acquisition date.

5.17 Employee benefits

(a) Short term employee benefits

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses andnon-monetary benefits are measured on an undiscounted basis and are expensed whenemployees rendered their services to the Group.

Short term accumulating compensated absences such as paid annual leave are recognised as anexpense when employees render services that increase their entitlement to future compensatedabsences. Short term non-accumulating compensated absences such as sick leave are recognisedwhen the absences occur and they lapse if the current period’s entitlement is not used in full anddo not entitle employees to a cash payment for unused entitlement on leaving the Group.

Bonuses are recognised as an expense when there is a present, legal or constructive obligationto make such payments, as a result of past events and when a reliable estimate can be made ofthe amount of the obligation.

(b) Defined contribution plan

The Company and its subsidiaries incorporated in Malaysia make contributions to a statutoryprovident fund. The contributions are recognised as a liability after deducting any contributionalready paid and as an expense in the period in which the employees render their services.


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5.17 Employee benefits (continued)

(c) Share-based payments

The Company operates an equity-settled, share-based compensation plan, allowing theemployees of the Company to acquire ordinary shares of the immediate holding company atpredetermined prices. The total fair value of share options granted to employees is recognised asan expense with a corresponding increase in the share options reserve within equity over thevesting period and taking into account the probability that the options will be vested.

The fair value of share options is measured at grant date, taking into account, if any, the marketvesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about thenumber of options that are expected to become exercisable on vesting date.

At the end of each reporting period, the Company revises its estimates of the number of optionsthat are expected to become exercisable on vesting date. It recognises the impact of the revisionof original estimates, if any, in profit or loss, with a corresponding adjustment to equity over theremaining vesting period. The equity amount is recognised in the share options reserve until theoptions are exercised, upon which it will be transferred to share premium. The share optionreserve in relation to the unexercised option at the expiry of the share option scheme will betransferred to retained earnings.

If the options are exercised, the Company issues new shares to the employees. The proceedsreceived, net of any directly attributable transaction costs are recognised in ordinary share capitalat nominal value, and any excess would be recognised in share premium.

5.18 Foreign currencies

5.18.1 Functional and presentation currency

Items included in the financial statements of each of the entities of the Group are measuredusing the currency of the primary economic environment in which the entity operates (“thefunctional currency”). The consolidated financial statements are presented in Ringgit Malaysia,which is the functional and presentation currency of the Company.

5.18.2 Foreign currency translation and balances

Transactions in foreign currencies are converted into functional currency at rates of exchangeruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the endof the reporting period are translated into functional currency at rates of exchange ruling atthat date. All exchange differences arising from the settlement of foreign currency transactionsand from the translation of foreign currency monetary assets and liabilities are included inprofit or loss in the period in which they arise. Non-monetary items initially denominated inforeign currencies, which are carried at historical cost are translated using the historical rateas of the date of acquisition, and non-monetary items which are carried at fair value aretranslated using the exchange rate that existed when the values were determined forpresentation currency purposes.

5.18.3 Foreign operations

Financial statements of foreign operations are translated at the end of the reporting periodexchange rates with respect to the assets and liabilities, and at exchange rates at the datesof the transactions with respect to the statement of profit or loss and other comprehensiveincome. All resulting translation differences are recognised as a separate component of equity.

In the consolidated financial statements, exchange differences arising from the translation ofnet investment in foreign operations are taken to equity. When a foreign operation is partiallydisposed of or sold, exchange differences that were recorded in equity are recognised in profitor loss as part of the gain or loss on disposal.


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5.18 Foreign currencies (continued)

5.18.3 Foreign operations (continued)

Exchange differences arising on a monetary item that forms part of the net investment of theCompany in a foreign operation shall be recognised in profit or loss in the separate financialstatements of the Company or the foreign operation, as appropriate. In the consolidatedfinancial statements, such exchange differences shall be recognised initially as a separatecomponent of equity and recognised in profit or loss upon disposal of the net investment.

Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition ofa foreign operation are treated as assets and liabilities of the acquired entity and translatedat the exchange rate ruling at the end of the reporting period.

5.19 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable, net of discounts andrebates.

Revenue is recognised to the extent that it is probable that the economic benefits associated with thetransaction would flow to the Group, and the amount of revenue and the cost incurred or to be incurredin respect of the transaction can be reliably measured and specific recognition criteria have been metfor each of the activities of the Group as follows:

(a) Sale of goods and rendering of services

Revenue from hospital operations comprises inpatient and outpatient hospital charges and salesof pharmaceutical products, medical and consumable supplies. These are recognised whenservices are rendered and goods are delivered, net of discounts, rebates and returns.

Other hospital revenue mainly consists of clinic rental from consultants. These are recognised onan accrual basis in accordance with the substance of the relevant agreements.

(b) Dividend income

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

(c) Interest income

Interest income is recognised as it accrues, using the effective interest method.

(d) Rental income

Rental income is recognised on an accrual basis in accordance with the substance of the relevantagreement.

(e) Membership fees

Membership fees are recognised upon their registration with the Group.

5.20 Operating segments

Operating segments are defined as components of the Group that:

(a) engages in business activities from which it could earn revenues and incur expenses (includingrevenues and expenses relating to transactions with other components of the Group);

(b) whose operating results are regularly reviewed by the chief operating decision maker of the Group(i.e. the Group’s Chief Executive Officer) in making decisions about resources to be allocated tothe segment and assessing its performance; and

(c) for which discrete financial information is available.


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5.20 Operating segments (continued)

An operating segment may engage in business activities for which it has yet to earn revenues.

The Group reports separately information about each operating segment that meets any of thefollowing quantitative thresholds:

(a) Its reported revenue, including both sales to external customers and intersegment sales ortransfers, is ten per cent (10%) or more of the combined revenue, internal and external, of alloperating segments.

(b) The absolute amount of its reported profit or loss is ten per cent (10%) or more of the greater,in absolute amount of:

(i) the combined reported profit of all operating segments that did not report a loss; and

(ii) the combined reported loss of all operating segments that reported a loss.

(c) Its assets are ten per cent (10%) or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable,and separately disclosed, if the management believes that information about the segment would beuseful to users of the financial statements.

Total external revenue reported by operating segments shall constitute at least seventy five percent(75%) of the revenue of the Group. Operating segments identified as reportable segments in thecurrent financial year in accordance with the quantitative thresholds would result in a restatement ofprior period segment data for comparative purposes.

5.21 Earnings per share

(a) Basic

Basic earnings per ordinary share for the financial period is calculated by dividing the profit forthe financial period attributable to equity holders of the parent by the weighted average numberof ordinary shares outstanding during the financial period.

(b) Diluted

Diluted earnings per ordinary share for the financial period is calculated by dividing the profit forthe financial period attributable to equity holders of the parent by the weighted average numberof ordinary shares outstanding during the financial period adjusted for the effects of dilutivepotential ordinary shares.

5.22 Fair value measurements

The fair value of an asset or a liability, (except for lease transactions) is determined as the price thatwould be received to sell an asset or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date. The fair value measurement assumes that the transaction tosell the asset or transfer the liability takes place either in the principal market or in the absence of aprincipal market, in the most advantageous market.

The Group measures the fair value of an asset or a liability by taking into account the characteristicsof the asset or liability if market participants would take these characteristics into account when pricingthe asset or liability. The Group has considered the following characteristics when determining fairvalue:

(a) The condition and location of the asset; and(b) Restrictions, if any, on the sale or use of the asset.


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5.22 Fair value measurements (continued)

The fair value measurement for a non-financial asset takes into account the ability of the marketparticipant to generate economic benefits by using the asset in its highest and best use or by sellingit to another market participant that would use the asset in its highest and best use.

The fair value of a financial or non-financial liability or an entity’s own equity instrument assumes that:

(a) A liability would remain outstanding and the market participant transferee would be required tofulfil the obligation. The liability would not be settled with the counterparty or otherwiseextinguished on the measurement date; and

(b) An entity’s own equity instrument would remain outstanding and the market participant transfereewould take on the rights and responsibilities associated with the instrument. The instrument wouldnot be cancelled or otherwise extinguished on the measurement date.

6. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs

6.1 New MFRSs adopted during the financial period

The Group and Company adopted the following Standards of the MFRS Framework that were issued bythe Malaysian Accounting Standards Board (“MASB”) during the financial period.

Title Effective Date

Amendments to MFRS 119 Defined Benefit Plans: Employee Contributions 1 July 2014 Amendments to MFRSs Annual Improvements to MFRSs 2010 - 2012 Cycle 1 July 2014Amendments to MFRSs Annual Improvements to MFRSs 2011 - 2013 Cycle 1 July 2014

There is no material effect upon the adoption of the above Amendments to MFRSs during the currentfinancial period.

6.2 New MFRSs that have been issued, but only effective for annual periods beginning on or after1 January 2016

The following are Standards of the MFRS Framework that have been issued by the Malaysian AccountingStandards Board (“MASB”) but have not been early adopted by the Group and the Company.

Title Effective Date

MFRS 14 Regulatory Deferral Accounts 1 January 2016Amendments to MFRS 10, MFRS 12 and MFRS 128 Investment Entities: Applying the Consolidation Exception 1 January 2016

Amendments to MFRS 101 Disclosure Initiative 1 January 2016Amendments to MFRS 116 and MFRS 138 Clarification of Acceptable Methods of Depreciation and Amortisation 1 January 2016

Amendments to MFRS 11 Accounting for Acquisitions of Interests in Joint Operations 1 January 2016

Amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants 1 January 2016Amendments to MFRS 127 Equity Method in Separate Financial Statements 1 January 2016Amendments to MFRSs Annual Improvements to 2012-2014 Cycle 1 January 2016Amendments to MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017

Amendments to MFRS 107 Disclosure Initiative 1 January 2017Amendments to MFRS 2 Classification and Measurement of Share-based Payment Transactions 1 January 2018

MFRS 15 Revenue from Contracts with Customers 1 January 2018Clarification to MFRS 15 1 January 2018MFRS 9 Financial Instruments (IFRS as issued by IASB in July 2014) 1 January 2018MFRS 16 Leases 1 January 2019Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associates or Joint Venture Deferred


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6. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

6.2 New MFRSs that have been issued, but only effective for annual periods beginning on or after1 January 2016 (continued)

The Group is in the process of assessing the impact of implementing these Standards, since the effectswould only be observable for the future financial years.

7. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

7.1 Changes in estimates

Estimates are continually evaluated and are based on historical experience and other factors, includingexpectations of future events that are believed to be reasonable under the circumstances.

The Directors are of the opinion that there are no changes in estimates at the end of the reporting period.

7.2 Critical judgements made in applying accounting policies

The following are the judgements made by the management in the process of applying the accountingpolicies of the Group that have the most significant effect on the amounts recognised in the financialstatements.

(a) Contingent liabilities

The determination and treatment of contingent liabilities is based on management’s view of theexpected outcome of the contingencies for matters in the ordinary course of the business. TheDirectors are of the view that the chances of the financial institutions and suppliers to call upon thecorporate guarantees are remote.

(b) Classification of leasehold land

The Group has assessed and classified land use rights of the Group as finance leases based on theextent to which risks and rewards incidental to ownership of the land resides with the Group arisingfrom the lease term. Consequently, the Group has classified the unamortised upfront payment forland use rights as finance leases in accordance with MFRS 117 Leases.

(c) Operating lease commitments - the Group as lessor

The Group has entered into rental agreements with external parties on its properties. The Grouphas determined that it retains all the significant risks and rewards of ownership of this propertywhich is leased out as operating leases due to the short term period of the lease.

7.3 Key sources of estimation uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertaintyat the end of each reporting period that have a significant risk of causing a material adjustment to thecarrying amounts of assets and liabilities within the next financial year.

7.3.1 Depreciation of plant and equipment

The cost of plant and equipment is depreciated on a straight line basis over the assets’ usefullives. Management estimates the useful lives of these plant and equipment to be within five (5)to ten (10) years, which are common life expectancies applied in the industry. Changes in theexpected level of usage and technological developments could impact the economic useful livesor principal annual rates of depreciation and the residual values of these assets, and thereforefuture depreciation charges could be revised.


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7. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

7.3 Key sources of estimation uncertainty (continued)

7.3.2 Impairment of goodwill on consolidation

The Group tests goodwill for impairment annually in accordance with its accounting policy. Seeaccounting policy Note 5.8 to the financial statements on impairment of goodwill.

For the purposes of assessing impairment, goodwill is allocated to cash-generating unit that areexpected to benefit from the synergies of the business combination in which the goodwill arose.

Significant judgement is required in the estimation of the present value of future cash flowsgenerated by the cash-generating unit, which involve uncertainties and are significantly affectedby assumptions used and judgement made regarding estimates of future cash flows and discountrates. Changes in assumptions could significantly affect the results of the Group’s tests forimpairment of goodwill. The key assumptions used are disclosed in Note 9 to the financialstatements.

7.3.3 Write down for obsolete or slow moving inventories

The Group writes down its obsolete or slow moving inventories based on assessment of theirestimated net selling price. Inventories are written down when events or changes incircumstances indicate that the carrying amounts could not be recovered. Managementspecifically analyses sales trend and current economic trends when making a judgement toevaluate the adequacy of the write down for obsolete or slow moving inventories. Whereexpectations differ from the original estimates, the differences would impact the carrying amountof inventories.

7.3.4 Impairment of receivables

The Group makes impairment of receivables based on an assessment of the recoverability ofreceivables. Impairment is applied to receivables where events or changes in circumstancesindicate that the carrying amounts may not be recoverable. The management specificallyanalyses historical bad debt, customer concentration, customer creditworthiness, currenteconomic trends and changes in customer payment terms when making a judgement to evaluatethe adequacy of impairment of receivables. Where expectations differ from the originalestimates, the differences would impact the carrying amount of receivables.

7.3.5 Income taxes

There are certain transactions and computations for which the ultimate tax determination maybe different from the initial estimate. The Group recognises tax liabilities based on itsunderstanding of the prevailing tax laws and estimates of whether such taxes will be due in theordinary course of business. Where the final outcome of these matters is different from theamounts that were initially recognised, such difference will impact the income tax and deferredtax provisions in the period in which such determination is made.

7.3.6 Fair values of borrowings

The fair values of borrowings are estimated by discounting future contractual cash flows at thecurrent market interest rates available to the Group for similar financial instruments. It isassumed that the effective interest rates approximate the current market interest rates availableto the Group based on its size and its business risk.


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7. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

7.3 Key sources of estimation uncertainty (continued)

7.3.7 Fair value measurement

The financial and non-financial assets and liabilities that are measured subsequent to initialrecognition at fair value are grouped into Level 1 to Level 3 based on the degree to which thefair value inputs are observable:

(i) Level 1 fair value measurements are those derived from quoted prices (unadjusted) inactive markets for identical assets or liabilities;

(ii) Level 2 fair value measurements are those derived from inputs other than quoted pricesincluded within Level 1 that are observable for the asset or liability, either directly (i.e. asprices) or indirectly (i.e. derived from prices); and

(iii) Level 3 fair value measurements are those derived from inputs for the asset or liability thatare not based on observable market data (unobservable inputs).

The classification of an item into the above levels is based on the lowest level of the inputs usedin the fair value measurement of the item. Transfers of items between levels are recognised inthe period they occur.

The Group measures financial instruments in the financial statements at fair value, as disclosedin Note 34 to the financial statements.

8. PROPERTY, PLANT AND EQUIPMENT Depre- ciation

Acquisition charges of a for the Group Balance at Reclassi- Written subsidiary financial Balance at 31.8.2016 1.6.2015 Additions Disposals fications off (Note 10(a)) period 31.8.2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Carrying amount Freehold land - - - - - 180,000 - 180,000 Long term leasehold land 17,950 - - - - - (255) 17,695 Buildings 56,603 17 - - - - (1,643) 54,977 Electrical and mechanical equipment 1,041 79 - (36) - - (299) 785 Motor vehicles 34 - - - - - (34) - Medical equipment 22,313 3,521 (2) - (2) - (6,627) 19,203 Furniture and fittings 1,263 569 (1) - - - (446) 1,385 Renovation 5,756 436 - 820 - - (1,325) 5,687 Office equipment and computers 2,227 1,324 (2) 529 - - (1,110) 2,968 Assets under construction 6,055 35,095 - (1,313) - - - 39,837 113,242 41,041 (5) - (2) 180,000 (11,739) 322,537


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8. PROPERTY, PLANT AND EQUIPMENT (continued)

Depreciationchargesfor the

Group Balance at Reclassi- Written financial Balance at31.5.2015 1.6.2014 Additions Disposals fications off year 31.5.2015

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Carrying amount

Long term leasehold land 18,154 - - - - (204) 17,950Buildings 57,829 84 - - - (1,310) 56,603Electrical and mechanical equipment 1,032 232 - - - (223) 1,041

Motor vehicles 82 - * - - (48) 34Medical equipment 22,405 4,816 - - (1) (4,907) 22,313Furniture and fittings 1,083 430 - - (2) (248) 1,263Renovation 3,103 1,331 - 2,075 (66) (687) 5,756Office equipment and computers 2,070 800 - - (5) (638) 2,227

Assets under construction 153 7,977 - (2,075) - - 6,055

105,911 15,670 - - (74) (8,265) 113,242

* In the previous financial year, the Group disposed a motor vehicle with carrying amount of RM Nil.

Accumulated CarryingAt cost depreciation amount

Group RM’000 RM’000 RM’000

31.8.2016

Freehold land 180,000 - 180,000Long term leasehold land 19,668 (1,973) 17,695Buildings 64,960 (9,983) 54,977Electrical and mechanical equipment 2,316 (1,531) 785Motor vehicles 193 (193) -Medical equipment 55,045 (35,842) 19,203Furniture and fittings 2,991 (1,606) 1,385Renovation 8,634 (2,947) 5,687Office equipment and computers 9,853 (6,885) 2,968Assets under construction 39,837 - 39,837

383,497 (60,960) 322,537


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8. PROPERTY, PLANT AND EQUIPMENT (continued)

Accumulated CarryingAt cost depreciation amount

Group RM’000 RM’000 RM’000

31.5.2015

Long term leasehold land 19,668 (1,718) 17,950Buildings 64,943 (8,340) 56,603Electrical and mechanical equipment 2,273 (1,232) 1,041Motor vehicles 252 (218) 34Medical equipment 51,530 (29,217) 22,313Furniture and fittings 2,426 (1,163) 1,263Renovation 7,378 (1,622) 5,756Office equipment and computers 8,005 (5,778) 2,227Assets under construction 6,055 - 6,055

162,530 (49,288) 113,242

(a) The carrying amounts of property, plant and equipment of the Group under hire-purchase arrangementare as follows:

Group31.8.2016 31.5.2015

RM’000 RM’000

Motor vehicle - 34

Details of the terms and conditions of the hire-purchase arrangement are disclosed in Notes 17 and 34to the financial statements.

(b) As at the end of the reporting period, a freehold building with a carrying amount of RM2,566,000 (2015:RM2,640,000) has been charged to a bank for credit facilities granted to the Group as disclosed in Note18 to the financial statements.

(c) During the financial period, the Group made the following cash payments to purchase property, plantand equipment:

Group31.8.2016 31.5.2015

RM’000 RM’000

Purchase of property, plant and equipment 41,041 15,670Unsettled and remained as other payables (15,884) (3,962)

Cash payments on purchase of property, plant and equipment 25,157 11,708


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9. GOODWILL ON CONSOLIDATION

Acquisition of a BalanceGroup Balance as at subsidiary as at 1.6.2015 Note (10(a)) 31.8.2016 RM’000 RM’000 RM’000

Carrying amount Goodwill - 193,045 193,045

At 31.8.2016

Group Accumulated Carrying Cost impairment amount RM’000 RM’000 RM’000

Goodwill 193,045 - 193,045

Goodwill has been allocated to the operating division of the Group, which represent the lowest level withinthe Group at which the goodwill is monitored for internal management purposes. The carrying amount ofgoodwill allocated to the cash-generating units ("CGU") of the Group is as follow:

Group31.8.2016 31.5.2015

RM’000 RM’000

Healthcare services segment 193,045 -

Healthcare services segment represent a subsidiary, BB Waterfront Sdn. Bhd., which was acquired by theCompany on 23 June 2015.

For the purpose of impairment testing, the recoverable amount of a CGU is determined based on its value-in-use. The value-in-use is determined by discounting the pre-tax cash flows based on financial forecast andfinancial projections approved by the management covering a thirteen-year period based on the followingkey assumptions:

31.8.2016%

Average growth rates 37Pre-tax discount rate 10.2

The discount rate was estimated based on the cost of equity of the Group’s subsidiary.

The management believes that there is no reasonably possible change in the key assumptions on whichmanagement has based its determination of the CGU’s recoverable amount, which would cause the CGU’scarrying amount to materially exceed its recoverable amount.

Based on the annual impairment testing undertaken by the Group, no impairment loss is required for thecarrying amount of the goodwill assessed as at 31 August 2016 as its recoverable amount is in excess of itscarrying amount.


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10. INVESTMENTS IN SUBSIDIARIES

Company31.8.2016 31.5.2015

RM’000 RM’000

Unquoted shares at cost- ordinary shares 381,564 14,603- redeemable preference shares 102,000 102,000Less: Impairment losses (300) (300)

483,264 116,303Add: Equity contribution to subsidiaries pursuant to ESOS 423 -

483,687 116,303

Details of the subsidiaries are as follows:

Interest in equity held by Company SubsidiaryName of company incorporation 31.8.2016 31.5.2015 31.8.2016 31.5.2015 Principal activities

Tropicana Medical Malaysia 100% 100% - - Multi-disciplinaryCentre (M) tertiary care services.Sdn. Bhd.

IVF Technologies Malaysia 100% 100% - - Provision of fertilitySdn. Bhd. services and operation

of women’s clinic. TMC Biotech Malaysia 100% 100% - - Provision of fertility Sdn. Bhd. consultancy,

laboratory & embryology services and research and development. TMC Lifestyle Malaysia 100% 100% - - Development, Sdn. Bhd. marketing and

management of healthcare programmes. TMC Properties Malaysia 100% 100% - - Property investment.Sdn. Bhd.

TMC Women’s Malaysia 100% 100% - - Dormant.Specialist (Kuantan) Sdn. Bhd.

BB Waterfront Malaysia 100% - - - Provision of healthcare Sdn. Bhd. * services.

TMC Care Sdn. Bhd. Malaysia 100% - - - Provision of pharmacy services and products. TMC Women’s Malaysia - - 100% 100% Business of operating Specialist Holdings fertility centres and Sdn. Bhd.^ providing related

services. PT Tropicana Healthcare Indonesia - - 65% 65% Marketing andIndonesia*^#+ promoting of

healthcare products.* Not audited by Messrs BDO.^ Held through Tropicana Medical Centre (M) Sdn. Bhd..# The non-controlling interest of the subsidiary that is not wholly owned by the Group is deemed to be immaterial to the

Group.+ Subsidiaries are consolidated based on management accounts for the financial period ended 31 August 2016. The

financial statements of the subsidiary is not required to be audited in their country of incorporation.


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Country of


10. INVESTMENTS IN SUBSIDIARIES (continued)

(a) On 23 June 2015, the Company completed the acquisition of the entire equity interest in BB WaterfrontSdn. Bhd. (“BB Waterfront”) for a purchase consideration of RM366,960,000 satisfied via the issuanceof 533,333,333 new ordinary shares of RM0.10 each in the Company ("Consideration Shares") at anissue price of RM0.60 per share, together with 266,666,666 free detachable warrants ("ConsiderationWarrants") on the basis of one (1) consideration warrant for every two (2) consideration shares. Theshares consideration was based on the fair value of RM0.60 per ordinary share of the Company, whichrepresents the last traded market price at Acquisition Date and also the fair value of RM0.1761 perwarrant of the Company.

The fair value of the identifiable assets and liabilities of BB Waterfront as at the date of acquisition areas follows:

RM’000

Property, plant and equipment (Note 8) 180,000Other receivables 1Cash and bank balances 1,149Deferred tax liabilities (Note 19) (7,176)Other payables (59)

Total identifiable net assets 173,915Goodwill arising from acquisition (Note 9) 193,045

366,960

The effects of the acquisition on cash flows are as follows:

RM’000

Total consideration for equity interest acquired 366,960Less: Consideration in shares and warrants (366,960)

Consideration settled in cash -Less: Cash and cash equivalents of subsidiaries acquired (1,149)

Net cash inflow of the Group on acquisition (1,149)

(b) On 18 March 2016, a wholly-owned subsidiary of the Company, TMC Care Sdn. Bhd. ("TMC Care") wasincorporated. The authorised share capital of TMC Care is RM400,000 divided into 400,000 ordinaryshares of RM1.00 each with a total issued and paid-up share capital of RM1,000 comprising 1,000ordinary shares of RM1.00 each. The intended business activities of TMC Care are carrying on retailbusiness of healthcare products. TMC Care pharmacy was opened in Johor Bahru on 19 July 2016.

The aforesaid incorporation does not have a material effect on the Group's earnings and net assets forthe financial period ended 31 August 2016.

11. INVENTORIES

The inventories comprising pharmaceutical products, medical and consumable supplies are carried at costand none of the inventories are carried at net realisable value.

During the financial period, inventories of the Group recognised as cost of sales amounted to RM50,617,000(2015: RM32,609,000).


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12. TRADE AND OTHER RECEIVABLES

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Trade receivables

Third parties 33,944 32,033 - -Less: Impairment losses (7,751) (6,725) - -

26,193 25,308 - -

Other receivables

Amounts owing by subsidiaries - - 13,424 7,845Other receivables 3,086 1,474 2,106 759Refundable deposits 728 629 1 1

3,814 2,103 15,531 8,605Less: Impairment losses

- subsidiaries - - (835) (880)- other receivables (252) (252) - -

3,562 1,851 14,696 7,725

Receivables 29,755 27,159 14,696 7,725

PrepaymentsPrepayments 889 966 25 24

30,644 28,125 14,721 7,749

(a) Trade receivables are non-interest bearing and the normal trade credit terms granted by the Groupranged from 30 to 60 (2015: 30 to 60) days from date of invoice. Other credit terms are assessed andapproved on a case-by-case basis. They are recognised at their original invoice amounts, which representtheir fair values on initial recognition.

(b) Amounts owing by subsidiaries represent advances, which are unsecured, interest-free and payable upondemand in cash and cash equivalents.

(c) The currency exposure profile of receivables is as follows:

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 29,744 27,149 14,696 7,725Indonesian Rupiah 11 10 - -

29,755 27,159 14,696 7,725


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12. TRADE AND OTHER RECEIVABLES (continued)

(d) The ageing analysis of trade receivables of the Group are as follows:

Group31.8.2016 31.5.2015

RM’000 RM’000

Neither past due nor impaired 14,695 5,597

Past due, not impairedLess than 90 days 5,016 16,43091 to 180 days 2,142 2,252Over 181 days 4,340 1,029

11,498 19,711Past due and impaired 7,751 6,725

33,944 32,033

Receivables that are neither past due nor impaired

A significant portion of trade receivables that are neither past due nor impaired are regular customersthat have been transacting with the Group. The Group uses ageing analysis to monitor the credit qualityof the trade receivables. Any receivables having significant balances past due or more than 90 days,which are deemed to have higher credit risk, are monitored individually.

Receivables that are past due but not impaired

The Group believes that no impairment is necessary in respect of these trade receivables. They aresubstantially companies with good collection trade record and no recent history of default.

Receivables that are past due and impaired

Trade receivables of the Group that are past due and impaired at the end of the reporting period are asfollows:

Individually impaired

31.8.2016 31.5.2015Group RM’000 RM’000

Trade receivables, gross 7,751 6,725Less: Impairment losses (7,751) (6,725)

- -


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12. TRADE AND OTHER RECEIVABLES (continued)

(d) The ageing analysis of trade receivables of the Group are as follows (continued):

The reconciliation of movement in the impairment loss are as follows:

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Trade receivables

At 1 June 2015/2014 6,725 6,448 - -Charge for the financial period/year 1,062 604 - -Reversal of impairment loss (3) (327) - -Written off (33) - - -

At 31 August 2016/31 May 2015 7,751 6,725 - -

Other receivables

At 1 June 2015/2014 252 252 880 874Charge for the financial period/year - - - 6Reversal of impairment loss - - (45) -

At 31 August 2016/31 May 2015 252 252 835 880

Total 8,003 6,977 835 880

Trade receivables that are individually determined to be impaired at the end of the reporting periodrelate to those debtors that exhibit significant financial difficulties and have defaulted on payments.These receivables are not secured by any collateral or credit enhancements.

(e) Information on financial risks of trade and other receivables is disclosed in Note 35 to the financialstatements.

13. CASH AND BANK BALANCES

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 21,515 18,911 3,796 9,420Deposits with licensed banks 183,043 172,723 167,255 164,010

204,558 191,634 171,051 173,430

(a) The weighted average effective interest rate of the deposits with licensed banks at the end of thereporting period was 4.2% (2015: 3.7%) per annum. The deposits have maturity periods ranging from1 to 12 months (2015: 1 to 12 months).

(b) Information on financial risks of cash and bank balances is disclosed in Note 35 to the financialstatements.


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13. CASH AND BANK BALANCES (continued)

(c) The currency exposure profile of cash and bank balances are as follows:

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 204,539 191,619 171,051 173,430 Indonesian Rupiah 19 15 - - 204,558 191,634 171,051 173,430

(d) For the purpose of the statements of cash flows, cash and cash equivalents comprise the following as atthe end of each reporting period:

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

As reported in the statements of financial position 204,558 191,634 171,051 173,430 Less: Deposits with licensed banks (more than three months) (154,176) (49,522) (148,780) (48,200) Deposits pledged to a licensed bank (511) (507) - - Cash and cash equivalents included in the statements of cash flows 49,871 141,605 22,271 125,230

14. SHARE CAPITAL

Group and Company 31.8.2016 31.5.2015

Number Numberof shares of shares

’000 RM’000 ’000 RM’000

Ordinary shares of RM0.10 each:Authorised:Balance as at 31 August 2016/31 May 2015 5,000,000 500,000 2,000,000 200,000

Issued and fully paid:Balance as at 1 June 2015/2014 1,199,521 119,952 802,373 80,237Issuance of ordinary shares pursuant to:- acquisition of a subsidiary 533,333 53,333 - -- ESOS 45 5 - -- conversion of warrants - - 397,148 39,715

Balance as at 31 August 2016/31 May 2015 1,732,899 173,290 1,199,521 119,952


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14. SHARE CAPITAL (continued)

(a) During the financial period, the issued and paid-up ordinary share capital of the Company was increasedby RM53,337,833 from RM119,952,143 to RM173,289,976 by way of issuance of 533,378,333 newordinary shares of RM0.10 each pursuant to the following:

(i) issuance of 533,333,333 new ordinary shares of RM0.10 each upon completion of acquisition of theentire equity interest in BB Waterfront Sdn. Bhd.; and

(ii) issuance of 45,000 new ordinary shares of RM0.10 each pursuant to the exercise of the Employees’Share Option Scheme (‘ESOS’) at the exercise price of RM0.75 per ordinary share.

The newly issued ordinary shares rank pari passu in all respects with the existing ordinary shares of theCompany. There were no other issues of shares during the financial period.

(b) The owners of the parent are entitled to receive dividends as and when declared by the Company andare entitled to one (1) vote per ordinary share at meetings of the Company. All ordinary shares rank paripassu with regard to the Company’s residual assets.

15. RESERVES

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Non-distributable:Share premium 445,441 180,104 445,441 180,104Warrants reserve 46,960 - 46,960 -Share options reserve 1,689 - 1,689 -Foreign exchange translation reserve 39 85 - -

494,129 180,189 494,090 180,104

(a) Share premium

The share premium is not distributable by way of cash dividends and may be utilised in the manner asset out in Section 60(3) of the Companies Act, 1965.

(b) Warants reserve

The warrants reserve arose from the acquisition of entire equity interest in BB Waterfront Sdn. Bhd. fora purchase consideration of RM366,960,000 to be satisfied via the issuance of 533,333,333 new ordinaryshares of RM0.10 each together with 266,666,666 free new detachable warrants during the financialperiod. The fair value of RM0.1761 per warrant was determined using the Black Scholes pricing modelbased on the following key assumptions:

Interest rate 3.99%Expected volatility of the Company’s share price 42.29%

(c) Share options reserve

The share options reserve represents the effect of equity-settled share options granted to employees.This reserve is made up of the cumulative value of services received from employees recorded on thegrant date of share options. When options are exercised, the amount from the share options reserve istransferred to share premium. The share option reserve in relation to the unexercised option at theexpiry of the share option scheme will be transferred to retained earnings.

(d) Foreign exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising fromthe translation of the financial statements of foreign operations whose functional currencies are differentfrom that of the Group’s presentation currency. It is also used to record the exchange differences arisingfrom monetary items which form part of the Group’s net investment in foreign operations, where themonetary item is denominated in either the functional currency of the reporting entity or the foreignoperation.


84



16. BORROWINGS

Group31.8.2016 31.5.2015

RM’000 RM’000

Current liabilities

SecuredHire-purchase creditor 21 20Term loan 64 61

85 81

Non-current liabilities

SecuredHire-purchase creditor 58 84Term loan 1,746 1,815

1,804 1,899

Total borrowingsHire-purchase creditor (Note 17) 79 104Term loan (Note 18) 1,810 1,876

1,889 1,980

All borrowings are denominated in RM.

17. HIRE-PURCHASE CREDITOR

Group31.8.2016 31.5.2015

RM’000 RM’000

Minimum hire-purchase payments:- not later than one (1) year 24 24- later than one (1) year and not later than five (5) years 61 92

Total minimum hire-purchase payments 85 116Less: Future interest charges (6) (12)

Present value of hire-purchase liabilities 79 104

Repayable as follows:Current liabilities:- not later than one (1) year 21 20

Non-current liabilities:

- later than one (1) year and not later than five (5) years 58 84

Total non-current portion 58 84

79 104

(a) The Group has a hire-purchase contract for a motor vehicle, as disclosed in Note 8 to the financialstatements. There are no restrictions imposed on the Group by the hire-purchase arrangements.

(b) Information on financial risks of hire-purchase creditor is disclosed in Note 35 to the financial statements.


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31 AUGUST 2016


18. TERM LOAN

Group31.8.2016 31.5.2015

RM’000 RM’000

Current portion:- repayable within one (1) year 64 61

Non-current portion:- repayable between one (1) and two (2) years 67 64- repayable between two (2) and five (5) years 223 213- repayable after five (5) years 1,456 1,538

Total non-current portion 1,746 1,815

1,810 1,876

(a) Details of the term loan outstanding at the end of the reporting period are as follows:

Number of Monthly Month of Groupmonthly instalment commencement Amount outstandinginstalments amount of repayment 31.8.2016 31.5.2015

RM’000 RM’000 RM’000

240 13 June 2010 1,810 1,876

(b) The term loan is secured by a first party first legal charge over the freehold building of the Group (Note8) and a corporate guarantee from the Company (Note 33).

(c) Information on financial risks of borrowing and its remaining maturity is disclosed in Note 35 to thefinancial statements.

19. DEFERRED TAX

(a) The deferred tax assets and liabilities are made up of the following:

Group31.8.2016 31.5.2015

RM’000 RM’000

Balance at 1 June 2015/2014 805 2,879Acquisition of a subsidiary (Note 10) 7,176 -Recognised in profit or loss (Note 24) 3,115 (2,074)

Balance at 31 August 2016/31 May 2015 11,096 805

Presented after appropriate offsetting:

Deferred tax assets, net - -Deferred tax liabilities, net 11,096 805

11,096 805


86



19. DEFERRED TAX (continued)

(b) The components and movements of deferred tax assets and liabilities during the financial period/yearprior to offsetting are as follows:

Fair value adjustment Acceleratedon business capitalcombination allowances Offsetting Total

RM’000 RM’000 RM’000 RM’000

Deferred tax liabilities of the Group

Balance as at 1 June 2015 2,803 7,893 (9,891) 805Acquisition of a subsidiary (Note 10) 7,176 - - 7,176Recognised in profit or loss (583) (1,466) 5,164 3,115

Balance as at 31 August 2016 9,396 6,427 (4,727) 11,096

Balance as at 1 June 2014 2,803 76 - 2,879Recognised in profit or loss - 7,817 (9,891) (2,074)

Balance as at 31 May 2015 2,803 7,893 (9,891) 805

Unabsorbed Unused tax capital losses allowances Others Offsetting Total RM’000 RM’000 RM’000 RM’000 RM’000

Deferred tax assets of the Group

Balance as at 1 June 2015 (2,483) (7,408) - 9,891 -Recognised in profit or loss 119 7,169 (2,124) (5,164) - Balance as at 31 August 2016 (2,364) (239) (2,124) 4,727 -

Balance as at 1 June 2014 - - - - -Recognised in profit or loss (2,483) (7,408) - 9,891 -

Balance as at 31 May 2015 (2,483) (7,408) - 9,891 -

(c) The amounts of temporary differences for which no deferred tax assets have been recognised in thestatement of financial position are as follows:

Group31.8.2016 31.5.2015

RM’000 RM’000

Unused tax losses 4,854 4,529Unabsorbed capital allowances 2,186 1,847Other temporary differences (1,942) 4,381

5,098 10,757

Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is notprobable that taxable profits of the subsidiaries would be available against which the deductibletemporary differences could be utilised.

The deductible temporary differences do not expire under current tax legislation.


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31 AUGUST 2016


20. TRADE AND OTHER PAYABLES

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Current

Trade payables

Third parties 24,299 21,536 - -

Other payables

Amounts owing to subsidiaries - - 262 9Other payables 10,143 4,589 134 82Deposits received 1,662 387 - -Accruals 20,212 8,646 1,223 1,177

32,017 13,622 1,619 1,268

56,316 35,158 1,619 1,268

(a) Trade payables are non-interest bearing and the normal trade credit terms granted to the Group rangedfrom 30 to 90 (2015: 30 to 90) days from date of invoice.

(b) The amounts owing to subsidiaries represent payments made on behalf, which are unsecured, interest-free and payable upon demand in cash and cash equivalents.

(c) Information on financial risks of trade and other payables is disclosed in Note 35 to the financialstatements.

(d) The currency exposure profile of payables are as follows:

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 49,735 34,813 1,619 1,268Indonesian Rupiah 440 345 - -Singapore Dollar 6,141 - - -

56,316 35,158 1,619 1,268

(e) Included in other payables and accruals of the Group is an amount of RM15,884,000 (2015:RM3,962,000) owing to suppliers of property, plant and equipment.


88



21. REVENUE

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Hospital and ancillary services 144,459 92,797 - -Clinic services 12,679 7,640 - -Clinic rental income 1,730 1,124 - -Hospital administration fee 1,930 827 - -Membership fees 133 127 - -Dividend income from subsidiaries - - 2,500 4,050Others 576 670 - -

161,507 103,185 2,500 4,050

22. FINANCE COSTS

Group1.6.2015 1.6.2014

to to31.8.2016 31.5.2015

RM’000 RM’000

Interest expense on:- hire-purchase creditor 6 6- term loan 120 95

126 101

23. PROFIT BEFORE TAXATION

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

Note RM’000 RM’000 RM’000 RM’000

Profit before taxation isarrived at after charging:

Auditors’ remuneration: - statutory audit:- current year 142 126 48 34

- non-statutory audit 4 4 4 4Depreciation of property, plant and equipment 8 11,739 8,265 - -


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31 AUGUST 2016


23. PROFIT BEFORE TAXATION (continued)

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

Note RM’000 RM’000 RM’000 RM’000

Profit before taxation isarrived at after charging (continued):

Directors’ remunerationreceivable by Directorsof the Company

- receivable from the Company:- fees 384 269 384 269- other emoluments 56 66 56 66- share options granted under ESOS 1,001 - 1,001 -

- receivable from subsidiaries:- other emoluments 1,940 774 - -- fees for professional services 60 48 - -- share options granted under ESOS 270 - 270 -

Impairment losses on:- trade receivables 12 1,062 604 - -- other receivables 12 - - - 6Loss on foreign exchange: - realised 6 24 1 14- unrealised - 1 - -Property, plant and equipment written off 8 2 74 - -

Rental expense:- equipment 215 176 - -- premises 949 592 - -Staff costs: - salaries, wages, bonuses

and allowances 40,913 28,524 - -- defined contribution plans 4,629 3,202 - -- share options granted under ESOS 423 - - -- other employee benefits 3,171 2,106 - -

And after crediting: Gain on disposal of property, plant and equipment 20 8 - -

Interest income from deposits place with licensed banks 9,526 3,653 8,738 3,166

Rental income 600 425 - -Reversal of impairment losses on: - trade receivables 12 3 327 - -- other receivables 12 - - 45 -Unrealised gain on foreign exchange 159 - - -


90



24. TAXATION

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Current year taxation based onprofit for the financial period/year:Malaysian income tax 2,035 751 1,831 665

Under/(over) provision in prior years:Malaysian income tax 26 (2) 10 -

2,061 749 1,841 665

Deferred tax (Note 19):Relating to origination and reversal of temporary differences 3,115 (2,067) - -

Over provision in prior years - (7) - -

3,115 (2,074) - -

Total taxation 5,176 (1,325) 1,841 665

(a) The Malaysian income tax is calculated at the statutory tax rate of 24% (2015: 25%) of the estimatedtaxable profit for the fiscal year.

(b) Tax expense for other taxation authorities are calculated at the rates prevailing in those respectivejurisdictions.

(c) A subsidiary of the Company, TMC Biotech Sdn. Bhd. (“TMC Biotech”), is not subject to tax as it hasbeen granted the BioNexus Status, by the Malaysian Biotechnology Corporation Sdn. Bhd. which qualifiedTMC Biotech for the BioNexus incentive. TMC Biotech will enjoy full exemption from income tax on itsstatutory income for a period of 10 years commencing March 2008.


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31 AUGUST 2016


24. TAXATION (continued)

(d) The reconciliations between the average effective tax rate and the applicable tax rate of the Group andof the Company are as follows:

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Profit before taxation 25,941 8,598 7,552 3,312

Tax at the statutory tax rate of 24% (2015: 25%) 6,226 2,150 1,812 828

Tax effects of:Non-deductible expenses 1,369 1,625 619 850Non-taxable income (58) (6) (600) (1,013)Tax exempt income (460) (308) - -Deferred tax assets not recognised during the financial period/year 177 123 - -

Recognition of previously unrecognised deferred tax asset (1,535) (1,450) - -

Utilisation of previously unrecognised capital allowances - (3,450) - -

Movement in deferred tax (569) - - -Under/(Over) provisionin the previous financial years

- current tax 26 (2) 10 -- deferred tax - (7) - -

Taxation for the financial period/year 5,176 (1,325) 1,841 665

(e) Tax savings of the Group are as follows:

Group1.6.2015 1.6.2014

to to31.8.2016 31.5.2015

RM’000 RM’000

Arising from utilisation of previously unrecognised capital allowances - 3,450

(f) Tax on each component of other comprehensive income is as follows:

Group31.8.2016 Before tax Tax effect After tax

RM’000 RM’000 RM’000

Item that may be reclassified subsequently to profit or loss

Foreign currency translations (46) - (46)


92



24. TAXATION (continued)

(f) Tax on each component of other comprehensive income is as follows (continued):

Group31.5.2015 Before tax Tax effect After tax

RM’000 RM’000 RM’000

Item that may be reclassified subsequently to profit or loss

Foreign currency translations 5 - 5

25. DIVIDENDS

Group and Company 31.8.2016 31.5.2015

Gross Grossdividend per Amount of dividend per Amount of

share dividend share dividendSen RM’000 Sen RM’000

Single tier dividend - - 0.14 2,425

A final single tier dividend in respect of the financial period ended 31 August 2016 of 0.154 sen per ordinaryshare has been proposed by the Directors after the reporting period for shareholders’ approval at theforthcoming Annual General Meeting. The financial statements for the current financial year do not reflectthis proposed dividend. This dividend, if approved by the shareholders, would be accounted for as anappropriation of retained earnings in the financial year ending 31 August 2017.

26. EARNINGS PER ORDINARY SHARE

(a) Basic

The basic earnings per ordinary share for the financial period/year is calculated by dividing the profit forthe financial period/year attributable to equity holders of the parent by the weighted average number ofordinary shares outstanding during the financial period/year.

Group31.8.2016 31.5.2015

Profit attributable to owners of the parent (RM’000) 20,765 9,923

Weighted average number of ordinary shares outstanding (’000) 1,707,184 984,969

Basic earnings per ordinary share (sen) 1.22 1.01


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31 AUGUST 2016


26. EARNINGS PER ORDINARY SHARE (continued)

(b) Diluted

The diluted earnings per ordinary share for the financial period/year is calculated by dividing the profitfor the financial period/year attributable to equity holders of the parent by the weighted average numberof ordinary shares outstanding during the financial period/year adjusted for the effects of dilutivepotential ordinary shares.

Group31.8.2016 31.5.2015

RM’000 RM’000

Profit attributable to owners of the parent 20,765 9,923

Weighted average number of ordinary shares outstanding (’000) 1,707,184 984,969Effect of dilution on conversion of warrants (’000) 846,470 -

Adjusted weighted average number of ordinary sharesapplicable to diluted earnings per ordinary share (’000) 2,553,654 984,969

Diluted earnings per ordinary share (sen) 0.81 1.01

27. EMPLOYEE BENEFITS

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Directors’ remuneration 1,940 774 - -Salaries, wages, overtime and allowances 40,913 28,524 - -

Defined contribution plan 4,629 3,202 - -Share options granted under ESOS:- Director 270 - - -- staff 423 - - -Other employee benefits 3,171 2,106 - -

51,346 34,606 - -

28. EMPLOYEES’ SHARE OPTION SCHEME (‘ESOS’)

The Company implemented an ESOS, which is in force for a period of five (5) years until 28 May 2020 ("the option period"). The main features of the ESOS are as follows:

(a) Eligible Directors and employees must be at least eighteen (18) years of age on the Date of Offer, whoare confirmed on the Date of Offer (in respect of Employee only) and have served full time for at leasta period of one (1) year of continuous services before the date of offer;

(b) The total number of shares offered under the ESOS shall not, in aggregate, exceed 15% of the issuedand paid-up ordinary share capital (excluding treasury shares) of the Company at any time during theexistence of the ESOS;

(c) The option price under ESOS is RM0.75 per ordinary share;


94



28. EMPLOYEES’ SHARE OPTION SCHEME (‘ESOS’) (continued)

(d) The option granted to an Eligible Person shall be subject to a minimum of one hundred (100) Optionsand in multiples of one hundred (100) Options and is subject to the following:

(i) Not more than 10% of the shares available under the ESOS shall be allocated to an eligible person,who either singly or collectively through persons connected with eligible persons, holds 20% or moreof the issued and paid-up ordinary share capital (excluding treasury shares of the Company).

(e) An option granted under ESOS may be exercised by the grantee upon achieving the vesting conditionsset by the ESOS Committee and is subject to the allotment of shares of 20% per year over the vestingperiods of five (5) years; and

(f) The shares shall on issue and allotment rank pari passu in all respect with the then existing issued sharesof the Company.

The details of the options over the ordinary shares of the Company are as follows:

Outstanding Exercisable Option as at as at price Granted Exercised Lapsed 31.8.2016 31.8.2016 RM ‘000 ‘000 ‘000 ‘000 ‘000

Grant dates 11 June 2015 0.75 16,500 - (3,500) 13,000 3,10028 August 2015 0.75 10,248 (45) (378) 9,825 3,676

26,748 (45) (3,878) 22,825 6,776

Share options exercised during the financial period resulted in the issuance of 45,000 ordinary shares at anissue price of RM0.75.

The fair value of share options granted during the financial period was estimated by the Group using theBlack-Scholes-Merton option pricing model, taking into account the terms and conditions upon which theoptions were granted. The fair value of share options measured at each grant date and the assumptions usedare as follows:

Grant dates11.6.2015 28.8.2015

ESOS expiry date 28.5.2020 28.5.2020Share price at Issue Date (per share) RM0.635 RM0.520 Potentially dilutive share price (per share) RM0.625 RM0.512Exercise Price per share at Issue Date RM0.75 RM0.75Historical Volatility 36.73% 36.73%Risk free Rate of Return at Issue Date 3.625% 3.910%Dividend Yield 0.57% 0.57%


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31 AUGUST 2016

Movement during thefinancial period


29. WARRANTS 2015/2019

On 25 June 2015, the Company listed and quoted 266,666,666 Consideration Warrants pursuant to theacquisition of BB Waterfront Sdn. Bhd. and 599,760,718 Bonus Warrants on the following basis:

(i) One (1) Consideration Warrant for every two (2) Consideration Shares issued for the acquisition of BBWaterfront Sdn. Bhd.; and

(ii) One (1) Bonus Warrant for every two (2) existing ordinary shares held.

The Warrants are constituted by the Deed Poll dated 28 May 2015 (‘Deed Poll’).

Salient features of the Warrants were as follows:

(a) Each Warrant entitled the registered holder thereof (“Warrant holder(s)”) to subscribe for one (1) newordinary share of RM0.10 each in the Company at the exercise price of RM0.75, which may be exercisedat any time from the date of issuance to the close of business on the market day immediately precedingthe date which was the fourth anniversary from the date of the issuance of Warrants (“Exercise Period”);

(b) Any Warrants not exercised during the Exercise Period would thereafter lapse and ceased to be valid forany purpose;

(c) Warrant holders must exercise the Warrants in accordance with the procedures set out in the Deed Pollas of 28 May 2015 and shares allotted and issued upon such exercise shall rank pari passu in all respectswith the then existing shares of the Company, and shall be entitled for any dividends, rights, allotmentsand/or other distributions after the issue and allotment thereof;

(f) The Warrant holders were not entitled to any voting rights or to participate in any distribution and/oroffer of further securities in the Company until and unless such Warrant holders exercise their warrantsfor new shares in the Company; and

(g) The Deed Poll and accordingly the Warrants, were governed by and shall be construed in accordancewith the laws of Malaysia.

As at reporting date, 866,427,384 Warrants 2015/2019 remained unexercised.

30. RELATED PARTY DISCLOSURES

(a) Identities of related parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, tocontrol the party or exercise significant influence over the party in making financial and operatingdecisions, or vice versa, or where the Group and the party are subject to common control or commonsignificant influence. Related parties could be individuals or other parties.

The Company has controlling related party relationship with its direct and indirect subsidiaries.


96



30. RELATED PARTY DISCLOSURES (continued)

(b) In addition to the transactions and balances detailed elsewhere in the financial statements, the Groupand the Company had the following transactions with related parties during the financial period:

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Subsidiaries:Administration service charges - - 668 574Dividend income - - 2,500 4,050

The related party transactions described above were entered into in the normal course of business carriedout based on negotiated terms and conditions and are mutually agreed with respective parties.

(c) Compensation of key management personnel

Key management personnel are those persons having the authority and responsibility for planning,directing, and controlling the activities of the entity, directly and indirectly, including any director (whetherexecutive or otherwise) of the Group.

The remuneration of Directors during the financial period was as follows:

Group Company1.6.2015 1.6.2014 1.6.2015 1.6.2014

to to to to31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Short term employee benefits 1,996 840 56 66Share options granted under ESOS 1,271 - 1,271 -

3,267 840 1,327 66

31. OPERATING SEGMENT

No segmental information is provided as the Group is primarily involved in the healthcare industry and theGroup’s activities are predominantly in Malaysia. The overseas segment does not contribute more than 10%of the consolidated revenue and assets.

Financial information is presented to management in accordance with the measurement policies of MFRS andIFRS. There are no adjustments or eliminations made in preparing the Company’s financial statements fromthe reportable segment revenues, profit or loss, assets and liabilities.

Major customers

The Group does not have significant reliance on a single major customer, with whom the Group transactedten percent (10%) or more of its revenue during the financial period/year.


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31 AUGUST 2016


32. COMMITMENTS

(a) Operating lease commitments

(i) The Group as lessee

The Group had entered into non-cancellable lease agreements for office premises, staff housing andequipment, resulting in future rental commitments which can, subject to certain terms in theagreements, be revised annually based on prevailing market rates.

The Group has aggregate future minimum lease commitment as at the end of the reporting periodas follows:

Group31.8.2016 31.5.2015

RM’000 RM’000

Not later than one (1) year 994 669Later than one (1) year and not later than five (5) years 1,010 413

2,004 1,082

(ii) The Group as lessor

The Group has entered into non-cancellable lease arrangements on its property. The leases includea clause to enable upward revision of the rental charge on a renewal term basis depending onprevailing market conditions.

The Group has aggregate future minimum lease receivables as at the end of the reporting period asfollows:

Group31.8.2016 31.5.2015

RM’000 RM’000

Not later than one (1) year 408 479Later than one (1) year and not later than five (5) years 644 869More than 5 years 466 635

1,518 1,983

(b) Capital commitments

Group31.8.2016 31.5.2015

RM’000 RM’000

Capital expenditure in respect of purchase ofproperty, plant and equipment:Contracted but not provided for 46,013 3,651Approved but not contracted for 1,748 3,915

47,762 7,566


98



33. CONTINGENT LIABILITIES

The Directors are of the opinion that provisions are not required in respect of these matters, as it is notprobable that a future outflow of economic benefits will be required or the amount is not capable of reliablemeasurement.

Company31.8.2016 31.5.2015

RM’000 RM’000

Unsecured

Corporate guarantees given to licensed banks forbanking facilities granted to subsidiaries of the Company 1,810 1,876

Letter of guarantee given to suppliers 2,044 1,487

3,854 3,363

The Directors are of the view that the chances of the financial institutions and suppliers to call upon thecorporate guarantees are remote.

34. FINANCIAL INSTRUMENTS

(a) Capital management

The primary objective of the Group’s capital management is to safeguard the Group’s ability to continuein operations as a going concern in order to provide fair returns for shareholders and benefits for otherstakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order tomaintain the optimal capital structure, the Group may, from time to time, adjust the dividend payout toshareholders, return capital to shareholders, issue new shares, redeem debts or sell assets to reducedebts, where necessary.

The Group considers its capital to comprise its ordinary share capital, retained earnings/accumulatedlosses, share premium, share options reserve, warrants reserve and its foreign exchange translationreserve which are classified as equity in the statement of financial position.

Pursuant to the requirements of Practice Note No.17/2005 of the Bursa Malaysia Securities, the Groupis required to maintain a consolidated shareholders’ equity equal to or not less than the 25% of theissued and paid-up share capital (excluding treasury shares) and such shareholders’ equity is not lessthan RM40.0 million. The Company has complied with this requirement for the financial period ended 31August 2016.

(b) Financial instruments

(i) Categories of financial instruments

31.8.2016 31.5.2015Group RM’000 RM’000

Financial assetsTrade and other receivables excluding prepayments- loans and receivables 29,755 27,159Cash and bank balances 204,558 191,634

234,313 218,793


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31 AUGUST 2016


34. FINANCIAL INSTRUMENTS (continued)

(b) Financial instruments (continued)

(i) Categories of financial instruments (continued)

31.8.2016 31.5.2015RM’000 RM’000

Group

Financial liabilitiesBorrowings - other financial liabilities, at amortised cost 1,889 1,980Trade and other payables- other financial liabilities, at amortised cost 56,316 35,158

58,205 37,138

Company

Financial assetsTrade and other receivables excluding prepayments- loans and receivables 14,696 7,725Cash and bank balances 171,051 173,430

185,747 181,155

Financial liabilitiesTrade and other payables - other financial liabilities, at amortised cost 1,619 1,268

(ii) Determination of fair value

Methods and assumptions used to estimate fair value

The fair values of financial assets and financial liabilities are determined as follows:

(a) Financial instruments that are not carried at fair value and whose carrying amounts are areasonable approximation of fair value

The carrying amounts of financial assets and financial liabilities, such as trade and otherreceivables, trade and other payables and term loans, are reasonable approximation of fairvalue, either due to their short-term nature or that they are floating rate instruments that arere-priced to market interest rates on or near the end of the reporting period.

The carrying amounts of the current position of borrowings are reasonable approximation offair values due to the insignificant impact of discounting.

(b) Obligations under finance lease and borrowings

The fair value of these financial instruments are estimated by discounting expected future cashflows at market incremental lending rate for similar types of lending, borrowing or leasingarrangements at the end of reporting period.


100



34. FINANCIAL INSTRUMENTS (continued)

(b) Financial instruments (continued)

(iii) Fair value hierarchy

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in activemarkets for identical assets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices includedwithin Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly(i.e. derived from prices).

Level 3 fair value measurements are those derived from inputs for the asset or liability that are notbased on observable market data (unobservable inputs).

The following tables set out the financial instruments not carried at fair value for which fair value isdisclosed, together with their carrying amount shown in the statement of financial position:

Fair value of financial instruments not carried at fair value Carrying

Level 1 Level 2 Level 3 Total amountRM’000 RM’000 RM’000 RM’000 RM’000

Group

Financial liabilities 31.8.2016Other financial liabilities- Hire-purchase creditor - 71 - 71 79

Financial liabilities 31.5.2015Other financial liabilities- Hire-purchase creditor - 91 - 91 104

35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s financial risk management objectives are to optimise value creation for its shareholders whilstminimising the potential adverse impact arising from interest rate risk, foreign currency risk, credit risk andliquidity and cash flow risk.

The financial risk management is carried out through risk review programmes, internal control systems,insurance programmes and adherence to the Group’s financial risk management policies. The Group’sexposure to financial risks and the management of the related exposures are as follows:

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’sfinancial instruments would fluctuate because of changes in market interest rates.

The Group’s exposure to interest rates relates primarily to the Group’s bank borrowings. The Group doesnot use derivative financial instruments to hedge its risk.

Sensitivity analysis for interest rate risk

The exposure to interest rate risk of the Group is not significant and therefore, sensitivity analysis is notpresented.


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102


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35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument wouldfluctuate because of changes in foreign exchange rates.

Transactional currency exposures mainly arose from transactions that are denominated in currenciesother than functional currencies of the operating entities.

The Group has exposure to risk of change in foreign exchange rates relates primarily to its operatingactivities (where payment of capital work-in-progress that are denominated in a foreign currency) andits subsidiary operating in Indonesia also has assets and liabilities together with expected cash flowsfrom anticipated transactions denominated in a foreign currency that gives rise to foreign exchangeexposure.

The Group also holds cash and bank balances denominated in foreign currency for working capitalpurposes. At the end of the reporting period, such foreign currency balances (in Indonesian Rupiah (IDR))amount to RM19,000 (2015: RM15,000) for the Group.

It is not the policy of the Group to enter into foreign exchange contracts in managing its foreign exchangerisk resulting from cash flows on transactions denominated in foreign currency.

The Company did not have any foreign currency exposure on its transactions.

Foreign currency risk sensitivity analysis

The following table demonstrates the sensitivity of the profit net of tax of the Group to a reasonablypossible change in the foreign currency exchange rates against the respective functional currencies ofthe Group entities, with all other variables held constant.

Group2016 2015Profit Profit

net of tax net of taxRM’000 RM’000

SGD/RM - Strengthened 5% +233 - - Weakened 5% -233 -

Sensitivities of other foreign currency are not disclosed as they are not material to the Group.

(c) Credit risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from tradeand other receivables. The Group manages its exposure to credit risk by the application of creditapprovals, credit limits and monitoring procedures on an ongoing basis.

The Group establishes an allowance for impairment that represents its estimate of incurred losses inrespect of the trade and other receivables as appropriate. The main components of this allowance are aspecific loss component that relates to individually significant exposures. Impairment is estimated bymanagement based on probability of bankruptcy or significant financial difficulties of the receivable anddefault or significant delay in payments by the receivables and current economic environment that isdirectly correlated with the historical default rates of receivables.

The Group’s major classes of financial assets are trade and other receivables. Information regardingtrade and other receivables that are neither past due nor impaired is disclosed in Note 12 to the financialstatements.


104




(c) Credit risk (continued)

Credit risk concentration profile

The Group’s major concentration of credit risk relates to the amounts owing by five (5) (2015: 5)customers, which constituted approximately 43% (2015: 45%) of its trade receivables as at the end ofthe reporting period.

Exposure to credit risk

As the Group does not hold any collateral, the maximum exposure to credit risk is represented by thecarrying amount of the financial assets as at the end of the reporting period. The Group has no exposureof credit risk for trade receivables by geographical region.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed inNote 12 to the financial statements. Deposits with licensed banks that are neither past due nor impairedare placed with or entered into with reputable financial institutions. The Directors believe that thepossibility of non-performance by these financial institutions is remote on the basis of their financialstrength.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 12 to thefinancial statements.

(d) Liquidity and cash flow risks

The Group is actively managing its operating cash flow to ensure that all operating and financing needsare met. It is the Group’s policy to ensure its ability to service its cash obligations by maintaining a levelof cash and cash equivalents deemed adequate to the Group’s operations. The Group also maintainsflexibility in funding by keeping committed credit lines available.

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the endof the reporting period based on contractual undiscounted repayment obligations:

On demand Oneor within to five Over fiveone year years years Total

31.8.2016 RM’000 RM’000 RM’000 RM’000Group

Financial liabilities:Trade and other payables 56,316 - - 56,316Borrowings 178 676 1,979 2,833

Total undiscounted financial liabilities 56,494 676 1,979 59,149

Company

Financial liabilities:Trade and other payables 1,619 - - 1,619

Total undiscounted financial liabilities 1,619 - - 1,619


105


31 AUGUST 2016



(d) Liquidity and cash flow risks (continued)

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the endof the reporting period based on contractual undiscounted repayment obligations (continued):

On demand Oneor within to five Over fiveone year years years Total

31.5.2015 RM’000 RM’000 RM’000 RM’000Group

Financial liabilities:Trade and other payables 35,158 - - 35,158Borrowings 178 706 2,131 3,015

Total undiscounted financial liabilities 35,336 706 2,131 38,173

Company

Financial liabilities:Trade and other payables 1,268 - - 1,268

Total undiscounted financial liabilities 1,268 - - 1,268

36. SIGNIFICANT EVENTS DURING THE FINANCIAL PERIOD

(a) On 23 June 2015, the Company completed the acquisition of entire equity interest in BB Waterfront Sdn.Bhd. (“BB Waterfront”) for a purchase consideration of RM366,960,000 to be satisfied via the issuanceof 533,333,333 new ordinary shares of RM0.10 each in the Company ("Consideration Shares") at anissue price of RM0.60 per share, together with 266,666,666 free detachable warrants ("ConsiderationWarrants") on the basis of one (1) consideration warrant for every two (2) consideration shares. Theshares consideration was based on the fair value of RM0.60 per ordinary share of the Company, whichrepresents the last traded market price at Acquisition Date and also the fair value of RM0.1761 perwarrant of the Company.

(b) On 18 March 2016, a wholly-owned subsidiary of the Company, TMC Care Sdn. Bhd. ("TMC Care") wasincorporated. The authorised share capital of TMC Care is RM400,000 divided into 400,000 ordinaryshares of RM1.00 each with a total issued and paid-up share capital of RM1,000 comprising 1,000ordinary shares of RM1.00 each. The business activities of TMC Care are carrying on retail business ofhealthcare products. TMC Care pharmacy was opened in Johor Bahru on 19 July 2016.

The aforesaid incorporation does not have a material effect on the Group's earnings and net assets forthe financial period ended 31 August 2016.


106



37. SUPPLEMENTARY INFORMATION ON REALISED AND UNREALISED PROFITS OR LOSSES

The retained earnings/(accumulated losses) as at the end of the reporting period may be analysed as follows:

Group Company31.8.2016 31.5.2015 31.8.2016 31.5.2015

RM’000 RM’000 RM’000 RM’000

Total retained earnings/(accumulated losses):- realised 30,845 2,374 (529) (3,815)- unrealised (10,937) (806) - -

Total Group/Company retained earnings/(accumulated losses) as per Consolidated/Company’s financial statements 19,908 1,568 (529) (3,815)


107


31 AUGUST 2016



108

L I S T O FP R O P E RT I E S

Approximate Net book Description/ age of Gross value atLocation Existing use building Land area floor area Tenure 31.08.2016 (years) (square feet) (square feet) RM'000

Land and building at Private 8.75 261,369 235,256 Leasehold 73,490Lot No. 11, Jalan Teknologi hospital and for 99 Taman Sains Selangor 1 corporate yearsPJU 5, Kota Damansara office expiring47810 Petaling Jaya 17 April Selangor Darul Ehsan 2108

Shoplot at Ground Floor - 7.75 1,873 6,625 Freehold 2,566No. 5, Jalan Merbah 3 Fertility Centre Bandar Puchong Jaya 1st Floor -47800 Puchong VacantSelangor Darul Ehsan 2nd Floor - Vacant 3rd Floor - For staff usage

PTB No.24436, Title No. Vacant - 180,292 - Freehold 180,000H.S (D) 566005 A parcel ofTown District of development landJohor Bahru approved forState of Johor Darul develomentTakzim of private (Located along Jalan medical centreStulang Darat, in thevicinity of Stulang Darat,Johor Bahru)


AUTHORISED CAPITAL : RM500,000,000.00ISSUED AND FULLY PAID-UP CAPITAL : RM173,343,961.90CLASS OF SHARES : ORDINARY SHARES OF 10 SEN EACH VOTING RIGHTS : ONE VOTE PER SHAREHOLDER ON A SHOW OF HANDS OR ONE

VOTE PER ORDINARY SHARE ON A POLL

DISTRIBUTION OF SHAREHOLDINGS

No. of % of No. of % of IssuedSize of Holding Shareholders Shareholders Shares Share Capital

LESS THAN 100 158 5.00 5,994 0.00100 TO 1,000 221 6.99 147,377 0.011,001 TO 10,000 1,295 40.97 8,093,890 0.4710,001 TO 100,000 1,214 38.40 43,721,441 2.52100,001 TO LESS THAN 5% OF ISSUED SHARES 269 8.51 407,166,095 23.49

5% AND ABOVE OF ISSUED SHARES 4 0.13 1,274,304,822 73.51

TOTAL 3,161 100.00 1,733,439,619 100.00

THIRTY LARGEST SHAREHOLDERS(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THESAME REGISTERED HOLDER)

No. of % of IssuedName Shares Share Capital

1. MAYBANK NOMINEES (ASING) SDN. BHD. 821,304,822 47.38PLEDGED SECURITIES ACCOUNT FOR SASTERIA (M) PTE LTD (307715)

2. UOB KAY HIAN NOMINEES (ASING) SDN. BHD. 230,000,000 13.27EXEMPT AN FOR UOB KAY HIAN (HONG KONG) LIMITED (A/C CLIENTS)

3. DYAM TUNKU ISMAIL IBNI SULTAN IBRAHIM 133,000,000 7.67

4. BEST BLEND SDN. BHD. 90,000,000 5.19

5. UOB KAY HIAN NOMINEES (ASING) SDN. BHD. 80,333,333 4.64UOB KAY HIAN PTE LTD FOR SASTERIA (M) PTE LTD

6. HSBC NOMINEES (ASING) SDN. BHD. 78,641,300 4.54EXEMPT AN FOR CREDIT SUISSE (HK BR-TST-ASING)

7. HSBC NOMINEES (ASING) SDN. BHD. 47,522,500 2.74EXEMPT AN FOR CREDIT SUISSE (SG BR-TST-ASING)

8. UOB KAY HIAN NOMINEES (ASING) SDN. BHD. 26,383,300 1.52EXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS)

9. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 18,000,000 1.04PLEDGED SECURITIES ACCOUNT FOR SIOW WONG YEN @ SIOW KWANG HWA

10 CIMSEC NOMINEES (ASING) SDN. BHD. 13,612,800 0.79EXEMPT AN FOR CIMB SECURITIES (SINGAPORE) PTE LTD (RETAIL CLIENTS)


109

A N A LY S I S O F S H A R E H O L D I N G S

AS AT 22 NOVEMBER 2016


THIRTY LARGEST SHAREHOLDERS(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THESAME REGISTERED HOLDER) (continued)

No. of % of IssuedName Shares Share Capital

11 AFFIN HWANG NOMINEES (ASING) SDN. BHD. 10,942,333 0.63EXEMPT AN FOR DBS VICKERS SECURITIES (SINGAPORE) PTE LTD (CLIENTS)

12 UOB KAY HIAN NOMINEES (TEMPATAN) SDN. BHD. 10,088,900 0.58EXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS)

13 BEH ENG PAR 9,889,400 0.57

14 LIM GAIK BWAY @ LIM CHIEW AH 5,381,600 0.31

15 MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 5,000,000 0.29PLEDGED SECURITIES ACCOUNT FOR WONG FUEI BOON

16 MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 4,950,000 0.29PLEDGED SECURITIES ACCOUNT FOR LOW CHEE YEN

17 SURINDER SINGH A/L RANBIR SINGH 4,483,333 0.26

18 JOO & LAM SENDIRIAN BERHAD 2,939,400 0.17

19 LAI WEI CHAI 2,690,000 0.16

20 KOH PEE BOON 1,930,000 0.11

21 WONG CHOON KEIT 1,784,000 0.10

22 SIO TAT HIANG 1,711,200 0.10

23 CARTABAN NOMINEES (ASING) SDN. BHD. 1,622,000 0.09EXEMPT AN FOR BOCI SECURITIES LTD (CLIENTS A/C)

24 HOOI THIEN ENG 1,519,466 0.09

25 MAYBANK NOMINEES (TEMPATAN) SDN. BHD. 1,366,475 0.08PLEDGED SECURITIES ACCOUNT FOR CHOONG BENG CHAUN

26 MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 1,343,200 0.08PLEDGED SECURITIES ACCOUNT FOR HO LIH MENG

27 AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD. 1,300,000 0.07PLEDGED SECURITIES ACCOUNT FOR YEW BOON HEAN (YEW0048C)

28 WONG BOON FONG 1,291,000 0.07

29 MOHD SALLEH BIN HJ HARUN 1,269,700 0.07

30 NG AIK SERN 1,240,000 0.07

1,611,540,062 92.97


110

A N A LY S I S O F S H A R E H O L D I N G S AS AT 22 NOVEMBER 2016



111

A N A LY S I S O F S H A R E H O L D I N G S


SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS AS PER REGISTER OF SUBSTANTIALSHAREHOLDERS AS AT 22 NOVEMBER 2016

Direct IndirectNo. of % of Issued No. of % of Issued

Shares Share Shares ShareName Held Capital Held Capital

SASTERIA (M) PTE. LTD. 901,638,155 52.01 - -SASTERIA PTE. LTD. - - 901,638,155(1) 52.01LIM ENG HOCK - - 1,221,638,155(2) 70.47INCANTO INVESTMENTS LIMITED 230,000,000 13.27 90,000,000(3) 5.19BEST BLEND SDN. BHD. 90,000,000 5.19 - -DYAM TUNKU ISMAIL IBNI SULTAN IBRAHIM 133,000,000 7.67 - -

Notes:

(1) Deemed interested through its 100% shares in Sasteria (M) Pte. Ltd., pursuant to Section 6A of theCompanies Act, 1965.

(2) Deemed interested by virtue of his ultimate shareholdings in Sasteria (M) Pte. Ltd., Incanto InvestmentsLimited and Best Blend Sdn. Bhd. pursuant to Section 6A of the Companies Act, 1965.

(3) Deemed interested through its shareholding in Best Blend Sdn. Bhd., pursuant to Section 6A of the CompaniesAct, 1965.

DIRECTORS’ SHAREHOLDINGS AS PER RESPECTIVE REGISTER OF DIRECTORS’ SHAREHOLDING AS AT 22 NOVEMBER 2016

Ordinary Shares ESOS Direct Indirect

No. of % of Issued No. of % of Issued No. ofShares Share Shares Share Option % of Option

Name Held Capital Held Capital Granted granted#

PROFESSOR EMERITUS 500,000 0.03 200,000 0.01 3,500,000 15.7DATO’ DR. KHALID BIN ABDUL KADIR

DATO’ DR. TAN KEE KWONG - - - - 2,000,000 9.0DR. CHAN BOON KHENG - - - - 3,500,000 15.7GARY HO KUAT FOONG - - - - 2,000,000 9.0CLAIRE LEE SUK LENG - - - - 2,000,000 9.0ROY QUEK HONG SHENG - - - - - -KAN KHEONG NG - - - - - -FREDDIE HENG KIM CHUAN - - - - - -

Notes:

(1) Deemed interested by virtue of his spouse’s interest pursuant to Section 134 of the Companies Act, 1965.

# Based on the options granted as at 22 November 2016 under Employees’ Share Option Scheme (“ESOS”)

(1)


NO. OF 2015/2019 WARRANTS ISSUED : 866,427,384NO. OF 2015/2019 WARRANTS OUTSTANDING : 866,394,534

DISTRIBUTION OF WARRANT HOLDINGS

No. of % of % ofWarrant Warrant No. of Issued

Size of Holding Holders Holders Warrants Warrants

LESS THAN 100 260 10.94 8,874 0.00100 TO 1,000 208 8.75 123,355 0.011,001 TO 10,000 877 36.89 4,476,440 0.5210,001 TO 100,000 793 33.36 29,070,713 3.36100,001 TO LESS THAN 5% OF ISSUED WARRANTS 236 9.93 154,646,012 17.85

5% AND ABOVE OF ISSUED WARRANTS 3 0.13 678,069,140 78.26

TOTAL 2,377 100.00 866,394,534 100.00

THIRTY LARGEST WARRANT HOLDERS(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THESAME REGISTERED HOLDER)

No. of % of IssuedName Warrants Warrants

1. MAYBANK NOMINEES (ASING) SDN. BHD. 410,652,474 47.40PLEDGED SECURITIES ACCOUNT FOR SASTERIA (M) PTE LTD (307715)

2. UOB KAY HIAN NOMINEES (ASING) SDN. BHD. 187,416,666 21.63EXEMPT AN FOR UOB KAY HIAN (HONG KONG) LIMITED (A/C CLIENTS)

3. DYAM TUNKU ISMAIL IBNI SULTAN IBRAHIM 80,000,000 9.23

4. HSBC NOMINEES (ASING) SDN. BHD. 19,500,050 2.25EXEMPT AN FOR CREDIT SUISSE (SG BR-TST-ASING)

5. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 6,099,900 0.70PLEDGED SECURITIES ACCOUNT FOR SIOW WONG YEN @ SIOW KWANG HWA

6. UOB KAY HIAN NOMINEES (TEMPATAN) SDN. BHD. 5,398,800 0.62EXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS)

7. KENANGA NOMINEES (TEMPATAN) SDN. BHD. 3,616,100 0.42PLEDGED SECURITIES ACCOUNT FOR NG TIAM MING (008)

8. BEH ENG PAR 3,002,950 0.35

9. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. 3,000,000 0.35CHOOI HEONG YENG

10. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 2,629,000 0.30PLEDGED SECURITIES ACCOUNT FOR LOW CHEE YEN

11. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. 2,593,700 0.30PLEDGED SECURITIES ACCOUNT FOR KOH KOK HOOI


112

A N A LY S I S O F WA R R A N T H O L D I N G S AS AT 22 NOVEMBER 2016


THIRTY LARGEST WARRANT HOLDERS(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THESAME REGISTERED HOLDER) (continued)

No. of % of IssuedName Warrants Warrants

12 HLB NOMINEES (TEMPATAN) SDN. BHD. 2,524,700 0.29PLEDGED SECURITIES ACCOUNT FOR WONG TAK KEONG

13 PUA LAY TEE 2,509,000 0.29

14 JF APEX NOMINEES (TEMPATAN) SDN. BHD. 2,500,000 0.29PLEDGED SECURITIES ACCOUNT FOR LEE YEOW TENG (MARGIN)

15 MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 2,500,000 0.29PLEDGED SECURITIES ACCOUNT FOR WONG FUEI BOON

16 JF APEX NOMINEES (TEMPATAN) SDN. BHD. 2,331,600 0.27PLEDGED SECURITIES ACCOUNT FOR TEO KWEE HOCK (STA 1)

17 YIELDFORCE SDN. BHD. 2,300,000 0.27

18 SURINDER SINGH A/L RANBIR SINGH 2,241,666 0.26

19 KENANGA NOMINEES (TEMPATAN) SDN. BHD. 2,050,000 0.24LIOW YIT LEE

20 RHB NOMINEES (TEMPATAN) SDN. BHD. 1,911,100 0.22PLEDGED SECURITIES ACCOUNT FOR LEE WEE LIAN

21 SIO TAT HIANG 1,863,900 0.22

22 AFFIN HWANG NOMINEES (ASING) SDN. BHD. 1,750,000 0.20EXEMPT AN FOR DBS VICKERS SECURITIES (SINGAPORE) PTE LTD (CLIENTS)

23 PUA LAI HWA 1,535,000 0.18

24 KEE CHENG HOON 1,430,000 0.17

25 TEE MING HOCK 1,400,000 0.16

26 KEE CHENG CHOOI 1,300,000 0.15

27 KENANGA NOMINEES (TEMPATAN) SDN. BHD. 1,252,000 0.14CHONG MEI

28 YEO ANN SECK 1,221,300 0.14

29 SO YONG POH 1,200,000 0.14

30 LIM CHING CHERNG 1,100,000 0.13

758,829,906 87.60


113

A N A LY S I S O F WA R R A N T H O L D I N G S



DIRECTORS’ WARRANT HOLDINGS AS PER REGISTER OF DIRECTORS’ WARRANT HOLDINGS AS AT 22 NOVEMBER 2016

Direct IndirectNo. of % of No. of % of

Warrants Issued Warrants IssuedName Held Warrant Held Warrant

PROFESSOR EMERITUS 250,000 0.03 100,000 0.01DATO’ DR. KHALID BIN ABDUL KADIR

DATO’ DR. TAN KEE KWONG - - - -DR. CHAN BOON KHENG - - - -GARY HO KUAT FOONG - - - -CLAIRE LEE SUK LENG - - - -ROY QUEK HONG SHENG - - - -KAN KHEONG NG - - - -FREDDIE HENG KIM CHUAN - - - -

Notes:

(1) Deemed interested by virtue of his spouse’s interest pursuant to Section 134 of the Companies Act, 1965.


114

A N A LY S I S O F WA R R A N T H O L D I N G S AS AT 22 NOVEMBER 2016

(1)


NOTICE OF THE 13TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 13th Annual General Meeting of the Company will be held at Greens III,Tropicana Golf & Country Resort Berhad, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 PetalingJaya, Selangor Darul Ehsan on Monday, 23 January 2017 at 10.00 a.m. to transact the following businesses:-


115

N O T I C E T OS H A R E H O L D E R S

AGENDA

AS ORDINARY BUSINESS:

1. To receive the Audited Financial Statements for the financial period ended 31 August 2016 and the Reports of Directors and Auditors thereon.

2. To approve a final single tier dividend of 0.154 sen per ordinary share in respect ofthe financial period ended 31 August 2016.

3. To approve the increase of Directors’ Fee.

4. To re-elect the following Directors who are retiring in accordance with theCompany’s Articles of Association:-

(i) Mr. Gary Ho Kuat Foong - Article 96 (1)(ii) Ms Claire Lee Suk Leng - Article 96 (1)(iii) Mr. Freddie Heng Kim Chuan - Article 103

5. To appoint Auditors of the Company and authorise the Directors to determine theirremuneration.

Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965 (acopy of which is annexed and marked “Appendix A” to the Annual Report 2016)has been received by the Company for the nomination of Messrs Ernst & Young,who have given their consent to act, for appointment as Auditors of the Company.

AS SPECIAL BUSINESS:

6. To consider and if thought fit, to pass the following ordinary resolutions, with orwithout modifications:-

(A) PROPOSED ALLOCATION OF EMPLOYEES’ SHARE OPTION SCHEMEOPTIONS TO ROY QUEK HONG SHENG

“THAT approval be and is hereby given to the Board, at any time and fromtime to time during the duration of the employees’ share option scheme,known as “TMC Employees’ Share Option Scheme” (“ESOS”), to offer and/orgrant to Roy Quek Hong Sheng, the Executive Director of the Company,options to subscribe for such number of ordinary shares of RM0.10 each in theCompany (“TMC Shares”) to be issued under the ESOS PROVIDED THAT notmore than ten percent (10%) of the new TMC Shares available under the ESOSat the point in time when the offer is made, should be allocated to anyindividual Eligible Person who, either singly or collectively through personsconnected (as defined in the Main Market Listing Requirements of BursaMalaysia Securities Berhad) to the Eligible Person, holds twenty percent (20%)or more of the issued and paid up share capital of TMC, and subject always tosuch terms and conditions and/or any adjustments which may be made inaccordance with the provision of By-Laws of the ESOS.”

(B) PROPOSED ALLOCATION OF EMPLOYEES’ SHARE OPTION SCHEMEOPTIONS TO KAN KHEONG NG

“THAT approval be and is hereby given to the Board, at any time and fromtime to time during the duration of the employees’ share option scheme,known as “TMC Employees’ Share Option Scheme” (“ESOS”), to offer and/orgrant to Kan Kheong Ng, the Non-Independent Non-Executive Director of theCompany, options to subscribe for such number of ordinary shares of RM0.10

(Please refer Note 1)

Ordinary Resolution 1


Ordinary Resolution 3Ordinary Resolution 4Ordinary Resolution 5






116


each in the Company (“TMC Shares”) to be issued under the ESOSPROVIDED THAT not more than ten percent (10%) of the new TMC Sharesavailable under the ESOS at the point in time when the offer is made, shouldbe allocated to any individual Eligible Person who, either singly or collectivelythrough persons connected (as defined in the Main Market ListingRequirements of Bursa Malaysia Securities Berhad) to the Eligible Person,holds twenty percent (20%) or more of the issued and paid up share capitalof TMC, and subject always to such terms and conditions and/or anyadjustments which may be made in accordance with the provision of By-Lawsof the ESOS.”

(C) PROPOSED ALLOCATION OF EMPLOYEES’ SHARE OPTION SCHEMEOPTIONS TO FREDDIE HENG KIM CHUAN

“THAT approval be and is hereby given to the Board, at any time and fromtime to time during the duration of the employees’ share option scheme,known as “TMC Employees’ Share Option Scheme” (“ESOS”), to offer and/orgrant to Freddie Heng Kim Chuan, the Non-Independent Non-ExecutiveDirector of the Company, options to subscribe for such number of ordinaryshares of RM0.10 each in the Company (“TMC Shares”) to be issued underthe ESOS PROVIDED THAT not more than ten percent (10%) of the new TMCShares available under the ESOS at the point in time when the offer is made,should be allocated to any individual Eligible Person who, either singly orcollectively through persons connected (as defined in the Main Market ListingRequirements of Bursa Malaysia Securities Berhad) to the Eligible Person,holds twenty percent (20%) or more of the issued and paid up share capitalof TMC, and subject always to such terms and conditions and/or anyadjustments which may be made in accordance with the provision of By-Lawsof the ESOS.”

(D) PROPOSED RETENTION OF INDEPENDENT NON-EXECUTIVE DIRECTOR

“THAT Dato’ Dr. Tan Kee Kwong be and is hereby retained as an IndependentNon-Executive Director of the Company and he shall continue to act asIndependent Non-Executive Director notwithstanding that he has been on theBoard of the Company for a cumulative term of more than nine (9) years.”

7. To transact any other business of which due notice shall have been received.



NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN THAT a final single tier dividend of 0.154 sen per ordinary share in respect of thefinancial period ended 31 August 2016, if approved by shareholders, will be paid on 13 February 2017 toshareholders whose names appear in the Record of Depositors of the Company at the close of business on 31 January 2017.

A Depositor shall qualify for entitlement only in respect of:-

(i) shares transferred to the Depositor’s Securities Account before 4.00 p.m. on 31 January 2017 in respect oftransfers; and

(ii) shares bought on Bursa Malaysia Securities Berhad on a cum-entitlement basis according to the Rules ofBursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

SEOW FEI SANMOK MEE KEECompany Secretaries




117


Notes to the Notice of 13th Annual General Meeting:

1. The audited accounts for the 15 months for thefinancial period ended 31 August 2016 are laid beforethe shareholders pursuant to the provisions of Section169(1) and (3) of the Companies Act, 1965 fordiscussion purpose only. It does not require members’approval thus will not be put forward for voting bymembers.

Other information

The Company has changed its financial year from 31May to 31 August on 1 October 2015 to be in line withthe financial year end of its holding company. Section143 (1) of the Companies Act, 1965 (“Act”) states thatan Annual General Meeting (“AGM”) must be held oncein every calendar year. As the Company foreseechallenges to hold its 2016 AGM before 31 December2016, an application for extension of time for theCompany to hold its AGM beyond the calendar yearwas made to the Companies Commission of Malaysia(“CCM”) under Section 143(2) of the Act. On 9November 2016, CCM has granted its approval for anextension of time until 28 February 2017 for theCompany to hold its AGM in respect of the calendaryear 2016 (“Approval”).

The Approval granted by CCM for 2016 AGM to be heldbeyond the calendar year will result the Companyhaving to convene two (2) AGMs in the followingcalendar year (2017) because compliance of Section143(1) of the Act is still required for calendar year2017. This 13th AGM is deemed to be held for thecalendar year 2016 and the 14th AGM to be held at thesame venue on the same day at 10.30 a.m. orimmediately after the conclusion or adjournment ofthe 13th AGM is for the calendar year 2017.

2. Only depositors whose names appear in the Record ofDepositors as at 16 January 2017 shall be regardedas members and entitled to attend, speak and vote atthe meeting.

3. A member entitled to attend and vote at the meetingis entitled to appoint a proxy to attend and vote in hisstead. A proxy need not be a member of the Companyand a member may appoint any persons to be hisproxy. The provisions of Section 149(1)(b) of theCompanies Act, 1965 shall not apply to the Company.

4. A member shall be entitled to appoint not more thantwo (2) proxies to attend and vote at the AnnualGeneral Meeting. Where a member appoints morethan one (1) proxy, the appointment shall be invalidunless the member specifies the proportions of hisholding to be represented by each proxy.

5. Where a member of the Company is an authorisednominee as defined under the Securities Industry(Central Depositories) Act, 1991, it may appoint atleast one (1) proxy but not more than two (2) proxiesin respect of each Securities Account it holds withordinary shares of the Company standing to the creditof the said Securities Account.

6. Where a member of the Company is an ExemptAuthorised Nominee which holds ordinary shares inthe Company for multiple beneficial owners in onesecurities account known as an omnibus account,there is no limit to the number of proxies which theExempt Authorised Nominee may appoint in respectof each omnibus account it holds.

7. The instrument appointing a proxy shall be in writingunder the hand of the appointer or his attorney dulyauthorised in writing, or if the appointer is acorporation, either under its Common Seal or underthe hand of its officer or attorney duly authorised.

8. The instrument appointing a proxy and the power ofattorney or other authority (if any), under which it issigned or a notarially certified copy thereof, must bedeposited at the Registered Office of the Company at802, 8th Floor, Block C, Kelana Square, 17 JalanSS7/26, 47301 Petaling Jaya, Selangor Darul Ehsannot less than forty eight (48) hours before the timefor holding the Annual General Meeting or anyadjournment thereof.

9. Explanatory Notes on Special Business:-

Resolutions No. 7 - 9 – Proposed Allocation ofEmployees’ Share Option Scheme (“ESOS”)

The proposed Ordinary Resolutions No. 7 to 9, ifpassed, will empower the Directors of the Company tooffer and grant to Roy Quek Hong Sheng, Kan KheongNg and Freddie Heng Kim Chuan, who were appointedas Directors of the Company after the implementationof the ESOS in 2015 the right to subscribe for suchnumber of new ordinary shares in the Companypursuant to the ESOS in the manner provided in theBy-Laws of ESOS.

Resolution No. 10 – Proposed Retention ofIndependent Non-Executive Director

The Ordinary Resolution 10 is proposed pursuant toRecommendation of the Malaysian Code on CorporateGovernance 2012 and if passed, will allow Dato’ Dr.Tan Kee Kwong to be retained and continue to act asIndependent Non-Executive Director of the Company.

Full details of the Board’s justifications for theretention of Dato’ Dr. Tan Kee Kwong is set out in theStatement of Corporate Governance in the 2016Annual Report.


NOTICE OF THE 14TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 14th Annual General Meeting of the Company will be held at Greens III,Tropicana Golf & Country Resort Berhad, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 PetalingJaya, Selangor Darul Ehsan on Monday, 23 January 2017 at 10.30 a.m. or immediately after the conclusion oradjournment of the Company’s 13th Annual General Meeting (whichever is later), which will be held at the samevenue on the same day at 10.00 a.m. to transact the following businesses:-


118


AGENDA

AS ORDINARY BUSINESS:

1. To re-elect the following Directors who are retiring in accordance with theCompany’s Articles of Association:-

i) Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir - Article 96 (1)ii) Mr. Kan Kheong Ng - Article 96 (1)

(Please refer Note 9)

2. To appoint Auditors of the Company and authorise the Directors to determine theirremuneration.

AS SPECIAL BUSINESS:

3. To consider and if thought fit, to pass the following ordinary resolutions, with orwithout modifications: -

(A) AUTHORITY TO ISSUE SHARES

“THAT subject always to the approvals of the relevant governmental and/orregulatory authorities, the Directors be and are hereby authorised pursuantto Section 132D of the Companies Act, 1965 to allot and issue shares in theCompany at any time until the conclusion of the next Annual General Meetingupon such terms and conditions and for such purposes as the Directors mayin their absolute discretion deem fit provided that the aggregate number ofshares to be issued pursuant to this Resolution does not exceed 10% of theissued share capital of the Company for the time being.”

(B) PROPOSED RETENTION OF INDEPENDENT NON-EXECUTIVE DIRECTOR

“THAT Dato’ Dr. Tan Kee Kwong be and is hereby retained as an IndependentNon-Executive Director of the Company and he shall continue to act asIndependent Non-Executive Director notwithstanding that he has been on theBoard of the Company for a cumulative term of more than nine (9) years.”

4. To transact any other business of which due notice shall have been received.

BY ORDER OF THE BOARD

SEOW FEI SANMOK MEE KEECompany Secretaries


Ordinary Resolution 1Ordinary Resolution 2





Notes to the Notice of 14th Annual General Meeting:

1. The Company has changed its financial year from 31 May to 31 August on 1 October 2015 to be in linewith the financial year end of its holding company.Section 143 (1) of the Companies Act, 1965 (“Act”)states that an Annual General Meeting (“AGM”) mustbe held once in every calendar year. As the Companyforesee challenges to hold its 2016 AGM before 31 December 2016, an application for extension oftime for the Company to hold its AGM beyond thecalendar year was made to the CompaniesCommission of Malaysia (“CCM”) under Section 143(2)of the Act. On 9 November 2016, CCM has granted itsapproval for an extension of time until 28 February2017 for the Company to hold its AGM in respect ofthe calendar year 2016 (“Approval”).

The Approval granted by CCM for 2016 AGM to be heldbeyond the calendar year has resulted the Companyhaving to convene two (2) AGMs in the followingcalendar year (2017) because compliance of Section143(1) of the Act is still required for calendar year2017. The 13th AGM of the Company to be held on thesame venue on the same day at 10.00 a.m. is for thecalendar year 2016. This 14th AGM is held for thecalendar year 2017 but no audited accounts need tobe tabled as the audited accounts for the relevantfinancial year has been tabled at the 13th AGM.

2. Only depositors whose names appear in the Record ofDepositors as at 16 January 2017 shall be regardedas members and entitled to attend, speak and vote atthe meeting.

3. A member entitled to attend and vote at the meetingis entitled to appoint a proxy to attend and vote in hisstead. A proxy need not be a member of the Companyand a member may appoint any persons to be hisproxy. The provisions of Section 149(1)(b) of theCompanies Act, 1965 shall not apply to the Company.

4. A member shall be entitled to appoint not more thantwo (2) proxies to attend and vote at the AnnualGeneral Meeting. Where a member appoints morethan one (1) proxy, the appointment shall be invalidunless the member specifies the proportions of hisholding to be represented by each proxy.

5. Where a member of the Company is an authorisednominee as defined under the Securities Industry(Central Depositories) Act, 1991, it may appoint atleast one (1) proxy but not more than two (2) proxiesin respect of each Securities Account it holds withordinary shares of the Company standing to the creditof the said Securities Account.

6. Where a member of the Company is an ExemptAuthorised Nominee which holds ordinary shares inthe Company for multiple beneficial owners in onesecurities account known as an omnibus account,there is no limit to the number of proxies which theExempt Authorised Nominee may appoint in respectof each omnibus account it holds.

7. The instrument appointing a proxy shall be in writingunder the hand of the appointer or his attorney dulyauthorised in writing, or if the appointer is acorporation, either under its Common Seal or underthe hand of its officer or attorney duly authorised.

8. The instrument appointing a proxy and the power ofattorney or other authority (if any), under which it issigned or a notarially certified copy thereof, must bedeposited at the Registered Office of the Company at802, 8th Floor, Block C, Kelana Square, 17 JalanSS7/26, 47301 Petaling Jaya, Selangor Darul Ehsannot less than forty eight (48) hours before the timefor holding the Annual General Meeting or anyadjournment thereof.

9. Re-election of Directors who retire by rotation inaccordance with Article 96(1)

For your information, based on the schedule ofretirement of rotation, Dr. Chan Boon Kheng is due forre-election at this meeting alongside with ProfessorEmeritus Dato’ Dr. Khalid Bin Abdul Kadir and Mr. KanKheong Ng. As Dr. Chan Boon Kheng has expressedhis intention not to seek for re-election, the resolutionpertaining to his re-election is not put up for members’consideration at this meeting and he will retain hisoffice as Director until the close of this 14th AnnualGeneral Meeting.

10. Explanatory Notes on Special Business:-

Resolution No. 4 – Authority to Issue Shares

The proposed Ordinary Resolution 4, if passed, willgive the Directors of the Company, from the date ofthe 14th Annual General Meeting, authority to issueshares from the unissued capital of the Company forsuch purposes as the Directors may deem fit and inthe interest of the Company (“Renewed GeneralMandate”). The authority, unless revoked or varied bythe Company in general meeting, will expire at theconclusion of the next Annual General Meeting of theCompany.

The Renewed General Mandate will provide flexibilityto the Company for any possible fund raisingactivities, including but not limited to further placingof shares, for purpose of funding future investmentproject(s), working capital and/or acquisitions.

As at the date of this Notice, no new shares in theCompany were issued pursuant to the authoritygranted to the Directors at the 12th Annual GeneralMeeting held on 21 October 2015 and which will lapseat the conclusion of the 13th Annual General Meeting.

Resolution No. 5 – Proposed Retention of IndependentNon-Executive Director

The Ordinary Resolution 5 is proposed pursuant toRecommendation of the Malaysian Code of CorporateGovernance 2012 and if passed, will allow Dato’ Dr.Tan Kee Kwong to be retained and continue to act asIndependent Non-Executive Director of the Company.

Full details of the Board’s justifications for theretention of Dato’ Dr. Tan Kee Kwong is set out in theStatement of Corporate Governance in the 2016Annual Report.


119



A P P E N D I X A


120


I/We (BLOCK LETTERS)

NRIC No./Company No. of

being (a) Member(s) of TMC LIFE SCIENCES BERHAD (624409-A) hereby appoint

of

or failing him/her, of

or failing him/her, the Chairman of Meeting, as *my/our proxy, to vote for *me/us and on *my/our behalf at the13th Annual General Meeting of the Company to be held at Greens III, Tropicana Golf & Country ResortBerhad, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Monday, 23 January 2017 at 10.00 a.m., or at any adjournment thereof and tovote as indicated below:-

FOR AGAINST

ORDINARY RESOLUTION 1










Please indicate with an “X” in the space provided above how you wish your votes to be cast on the resolutionsspecified. If no specific direction as to the voting is given, your proxy will vote or abstain at his/her discretion.

Dated this .............. day of .............……..., 2017.

No. of Shares Held

CDS No.

Signature

Notes:-

1. Only depositors whose names appear in the Record of Depositors as at 16 January 2017 shall be regarded as members and entitledto attend, speak and vote at the meeting.

2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need notbe a member of the Company and a member may appoint any persons to be his proxy. The provisions of Section 149(1)(b) of theCompanies Act, 1965 shall not apply to the Company.

3. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the Annual General Meeting. Where amember appoints more than one (1) proxy, the appointment shall be invalid unless the member specifies the proportions of hisholding to be represented by each proxy.

4. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991,it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each Securities Account it holds with ordinaryshares of the Company standing to the credit of the said Securities Account.

5. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficialowners in one securities account known as an omnibus account, there is no limit to the number of proxies which the Exempt AuthorisedNominee may appoint in respect of each omnibus account it holds.

6. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or ifthe appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised.

7. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notariallycertified copy thereof, must be deposited at the Registered Office of the Company at 802, 8th Floor, Block C, Kelana Square, 17 JalanSS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty eight (48) hours before the time for holding the Annual GeneralMeeting or any adjournment thereof.

PROXY FORM


Lastly, fold this flap for sealing

Fold here

Fold here

AffixStampHere

The Company SecretaryTMC Life Sciences Berhad802, 8th Floor, Block C, Kelana Square17 Jalan SS7/2647301 Petaling JayaSelangor Darul Ehsan


I/We (BLOCK LETTERS)

NRIC No./Company No. of

being (a) Member(s) of TMC LIFE SCIENCES BERHAD (624409-A) hereby appoint

of

or failing him/her, of

or failing him/her, the Chairman of Meeting, as *my/our proxy, to vote for *me/us and on *my/our behalf at the14th Annual General Meeting of the Company to be held at Greens III, Tropicana Golf & Country ResortBerhad, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor DarulEhsan on Monday, 23 January 2017 at 10.30 a.m., or immediately after the conclusion or adjournment ofthe Company’s 13th Annual General Meeting (whichever is later), which will be held at the same venue on thesame day at 10.00 a.m. and to vote as indicated below:-

FOR AGAINST






Please indicate with an “X” in the space provided above how you wish your votes to be cast on the resolutionsspecified. If no specific direction as to the voting is given, your proxy will vote or abstain at his/her discretion.

Dated this .............. day of .............……..., 2017.

No. of Shares Held

CDS No.

Signature

Notes:-

1. Only depositors whose names appear in the Record of Depositors as at 16 January 2017 shall be regarded as members and entitledto attend, speak and vote at the meeting.

2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need notbe a member of the Company and a member may appoint any persons to be his proxy. The provisions of Section 149(1)(b) of theCompanies Act, 1965 shall not apply to the Company.

3. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the Annual General Meeting. Where amember appoints more than one (1) proxy, the appointment shall be invalid unless the member specifies the proportions of hisholding to be represented by each proxy.

4. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991,it may appoint at least one (1) proxy but not more than two (2) proxies in respect of each Securities Account it holds with ordinaryshares of the Company standing to the credit of the said Securities Account.

5. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficialowners in one securities account known as an omnibus account, there is no limit to the number of proxies which the Exempt AuthorisedNominee may appoint in respect of each omnibus account it holds.

6. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or ifthe appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised.

7. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notariallycertified copy thereof, must be deposited at the Registered Office of the Company at 802, 8th Floor, Block C, Kelana Square, 17 JalanSS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty eight (48) hours before the time for holding the Annual GeneralMeeting or any adjournment thereof.

PROXY FORM


Lastly, fold this flap for sealing

Fold here

Fold here

AffixStampHere

The Company SecretaryTMC Life Sciences Berhad802, 8th Floor, Block C, Kelana Square17 Jalan SS7/2647301 Petaling JayaSelangor Darul Ehsan


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