transcending with fortitudee - latest announcement a successful business is actually an arduous task...

Transcendingwith Fortitudee

— Annual Report 2017

(383028-D)( )

COMPANY PROFILE

CORPORATE STRUCTURE

CORPORATE INFORMATION

PROFILE OF BOARD OF DIRECTORS

PROFILE OF SENIOR TEAM MEMBERS

MANAGEMENT DISCUSSION &

ANALYSIS DISCLOSURES

NOTICE OF ANNUAL GENERAL MEETING

AUDIT AND RISK MANAGEMENT

COMMITTEE REPORT

02

03

04

06

10

12

16

18

Contents

Cover Rationale

STATEMENT ON CORPORATE GOVERNANCE

STATEMENT ON RISK MANAGEMENT AND

INTERNAL CONTROL

ADDITIONAL COMPLIANCE INFORMATION

STATEMENT OF DIRECTORS’ RESPONSIBILITY

FINANCIAL STATEMENTS

LIST OF PROPERTIES

ANALYSIS OF SHAREHOLDINGS

PROXY FORM (Enclosed)

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33

35

37

38

118

119

Contrary to the general perceptions on the ease of doing business,

sustaining a successful business is actually an arduous task which

requires complex management skills, unyielding dedication and the

right mix of people, product offerings and resources. SKH has

throughout the many years, persevered in all aspects to remain

competitive and relevant just like the tiny ants which work

round-the-clock to provide to its colony.

Here at SKH, we strive to go beyond our achievements, performance

and/or failures with much courage even when it is sometimes

painful to the overall organizational health and growth as illustrated

in our theme for this year “Transcending with Fortitude”. The Group

wishes to convey the message and pledge to our stakeholders that

we will find our way through any hardships and keep the fighting

spirit going.

SKH CONSORTIUM BERHAD (383028-D)2 SKH CONSORTIUM BERHAD (383028-D)2

Company Profile

SKH CONSORTIUM BERHAD (383028-D) (“SKH”)

prides itself as an information technology company

with a legacy and aims to create another set of

milestones in the property construction industry.

With renewed vigour and impetus, SKH continues

to drive forward to bring the best in our products,

services and developments. The management team

of the Group has clear visions and goals for SKH to

reclaim its glory and expand the company into a

stronger entity that will withstand the test of times.

Through our commitment to excellence in everything

we do, persevering quality in our deliverables and

responsibility to the society at large, we aim to uphold

our promises to our stakeholders and be rewarded

with their trust and confidence in us. SKH also believes

that employees are our greatest asset that must be

valued and appreciated at all times.

For more information, please visit www.skh.my.

ANNUAL REPORT 2017 3ANNUAL REPORT 2017 3

100%SUPER KIAN

HOLDINGS

SDN BHD (926546-T)

100%TRISTAR UNION

SDN BHD(1160203-W)

100%NUONE

SDN BHD(951868-W)

100%VIEWNET

COMPUTER

SYSTEM

SDN BHD (568363-H)

100%OPEN

ADVENTURE

SDN BHD(887896-K)

100%Pc Zone

Computer

Trading (M)

Sdn Bhd(472852-W)

70%Open

Adventure

Services

Sdn Bhd(941917-M)

(383028-D)

Corporate Structure


Corporate Information

BOARD OF DIRECTORS

TAN OOI JIN

Executive Chairman/Executive Director

LEE LI CHAIN

Finance Director/Executive Director

TAN TZU PIN

Non-Independent Non-Executive Director

DATO’ CHAIRIL NAZRI BIN AHMAD

Independent Non-Executive Director

LEONG KAH MUN


YAP KIEN MING


SAM KOK HONG


AUDIT AND RISK MANAGEMENT

COMMITTEE

LEONG KAH MUN (Chairman)


YAP KIEN MING

SAM KOK HONG

REMUNERATION COMMITTEE

YAP KIEN MING (Chairman)


TAN OOI JIN

LEONG KAH MUN

SAM KOK HONG

NOMINATION COMMITTEE

YAP KIEN MING (Chairman)


SAM KOK HONG

LEONG KAH MUN

COMPANY SECRETARY

Leong Sue Ching(MAICSA No.: 7040814)

REGISTERED OFFICE

No. 9A, Jalan Medan Tuanku

Medan Tuanku

50300 Kuala Lumpur

Wilayah Persekutuan.

Tel. No. : 603-2691 8996

Fax. No. : 603-2698 6996

WEBSITE

www.skh.my

AUDITORS

Crowe Horwath

Level 16, Tower C

Megan Avenue II

12, Jalan Yap Kwan Seng

50450 Kuala Lumpur


Tel. No. : 603-2788 9999

Fax. No. : 603-2788 9998

LEGAL ADVISERS

Peter Ling & van Geyzel

B-19-4, Tower B

Northpoint Office Suites

Mid Valley City

No. 1 Medan Syed Putra

59200 Kuala Lumpur


Tel. No. : 603-2282 3080

Fax. No. : 603-2201 9880

REGISTRAR

Tricor Investor & Issuing

House Services Sdn. Bhd.

Unit 32-01, Level 32, Tower A

Vertical Business Suite, Avenue 3

Bangsar South

No. 8, Jalan Kerinchi

59200 Kuala Lumpur


Tel. No. : 603-2783 9299

Fax. No. : 603-2783 9222

PRINCIPAL BANKER

Malayan Banking Berhad

Ground & Mezzanine Floors

Wisma Genting

Jalan Sultan Ismail

50250 Kuala Lumpur.

Tel. No. : 603-2163 5051

Fax. No. : 603-2162 0184

OFFICE

Unit C-01-3, Block C

Plaza Glomac

No. 6, Jalan SS7/19

Kelana Jaya

47301 Petaling Jaya

Selangor Darul Ehsan

Malaysia.

Tel. No. : 603-7805 2188

Fax. No. : 603-7805 5688

LISTING

ACE Market of

Bursa Malaysia Securities Berhad

Stock Name and Stock Code:

SKH (0060)

Courage isn’t always a lion’s roar… It’s also the silence

of ants working patiently, persistently and never giving

up. SKH has set our minds to work like them.

SKH CONSORTIUM BERHAD (383028-D)6

Profile of Board of Directors

TAN OOI JINExecutive Chairman/Executive Director

TAN OOI JIN, a Malaysian, aged 42, is the Executive Chairman of the Company. He is an Independent Non-Executive Director of the Company since 22 September 2011 and re-designated as Chairman on 23 September 2011 and subsequently re-designated as Executive Chairman on 25 February 2016. He is also a member of the Remuneration Committee of the Company.

He is a lawyer by qualification and holds a Second Class Honours LLB Bachelor of Laws degree from the University of Newcastle-upon-Tyne, UK and during his years of practice, he had focused on the areas of Corporate & Securities and ICT. A former ASEAN scholar, he started his legal career in a medium-sized firm with an international affiliation focusing on Corporate & Securities and ICT.

He also advised the Technopreneurs Association of Malaysia (TeAM) and its members including its council members on legal issues and strategy. He was also part of a group of industry leaders which incorporated the National Incubators Network Association (NINA). He currently sits on the Board of Trustees of the 1Utopia Foundation which aims to generate donations whether in cash or in forms of ICT equipment and gadgets to orphanages, schools and underprivileged children.

During his tenure as a practitioner, he has advised on various corporate and commercial transactions especially cross border ones and he has also advised the listing of various companies in Malaysia as well as overseas including London, Hong Kong and Singapore and is constantly consulted to assist public-listed companies to recover and unlock their intrinsic value so as to enhance shareholders’ investments. He currently sits on the board of a private company involved in circuit manufacturing and whose ultimate holding company is listed on the NASDAQ and also sits on the Board of Directors of Lay Hong Berhad and Sterling Progress Berhad.

He had been publicly reprimanded by Bursa Malaysia Securities Berhad on 20 June 2017 and fined RM50,000 for breaching regulations regarding Lay Hong Berhad’s response to unusual market activity queries on November 2, 2015 and January 19, 2016 where he sits as an Independent non-Executive Director.

He has no family relationship with any director and/or major shareholders. He does not hold any shares, direct or indirect in SKH Consortium Berhad.

LEE LI CHAINFinance Director/Executive Director

LEE LI CHAIN, a Malaysian, aged 41, graduated from Tunku Abdul Rahman College with Advanced Diploma in Commerce (Financial Accounting) in 1999. She is a Chartered Accountant with the Malaysian Institute of Accountants and a member of the Association of Chartered Certified Accountants.

She started her career in 2000 as a tax assistant in a medium-sized tax firm. During her tenure in tax, she was in charge of ensuring tax compliance by individuals, medium to large private companies and public listed companies. She also advised her clients on structuring their operations in a more tax efficient way. She was also assisting in special assignments on ad-hoc basis.

She then joined a medium-sized audit firm in 2001 and left in 2010 as a Senior Manager. She was responsible for the planning and reviewing of the audits of public listed companies, private

limited companies and foreign owned entities involved in a wide range of industries. She also led special assignments such as reporting accountants’ work in initial public offerrings and financial due diligence reviews.

She then joined a joint venture company, between a Malaysian Government-Linked Company (GLC) and a Middle East company in 2011 as a Group Finance Manager, and subsequently a Malaysian public listed company as Senior Group Finance Manager.

She is currently the Finance Director of the Company where she leads the finance team and oversees the financial aspects of the group.

Ms Lee does not hold any directorships in other public companies. She has no family relationship with any Directors and/or major shareholders of the Company.

ANNUAL REPORT 2017 7

Profile of Board of Directorscont’d

TAN TZU PINNon-Independent Non-Executive Director

TAN TZU PIN, a Malaysian, aged 41, is a Non-Independent Non-Executive Director of the Company since 17 August 2015. He graduated from Central Queensland University in Australia with a degree in Business Administration in 2000.

After graduation, he joined his family’s construction company as a Project Manager where he learned his trade. After a few years of undertaking and successfully completing major projects, he was promoted to the position of Executive Director in 2003.

He then led his family company which is based in JB and with over 30 years track record to secure and execute more projects which include construction of warehouses and factories in Port Tanjung Pelepas, high rises residential in Taman Tampoi Indah, hotel in Nusajaya and other high rise projects in JB.

Mr Tan was instrumental in focusing his aim to increase the revenue of his family company which saw a huge increment in this respect and was involved in various multi-million construction projects.

His vision and efforts were rewarded when his company won the Golden Bull Award and was ranked in the top 100 Small and Medium Enterprises in Malaysia. From there he continued to grow the company which has consistently been booking about RM200 million revenue per year.

He is also currently involved in activities to promote the construction industry and to assist other newer players and is an active committee member of the Johor Master Builders Association.

Mr Tan does not hold any directorship in other public companies.



DATO’ CHAIRIL NAZRI BIN AHMAD, a Malaysian, aged 45, is an Independent Non-Executive Director of the Company since 8 December 2010. He is also a member of Audit and Risk Management Committee, Nomination Committee and Remuneration Committee. He is a graduate of the University of Newcastle, United Kingdom, obtaining the degree of Bachelor of Arts in Accounting and Financial Analysis with Honors, as a beneficiary of the Shell Scholarship Program.

He started his career as an auditor with Coopers & Lybrand to provide audit advisory and auditing related services to various clients which include MNCs, GLCs and large private companies. Among the notable companies that he has had the opportunity to serve were POS Malaysia Berhad, Telekom Malaysia Berhad and IJM Corporation Berhad. The invaluable corporate experience that he had gained in these various industries had provided him with a strong foundation in the understanding and the application of best practices in various industries.

Subsequently, he moved on to management and technology consulting. He joined Accenture, the leading global management consulting and technology services company. During his 8 years

tenure in Accenture, Dato’ Chairil has served many large organisations and multinationals, amongst which include Siemens AG (Germany), PETRONAS Group of Companies (Malaysia), Universiti Teknologi Petronas (Malaysia), Carrefour (France), Natsteel (Singapore) and MISC Berhad (Malaysia). His consulting expertise was primarily in the areas of Business Process Engineering, Change Management, Enterprise Resource Planning (ERP) implementation, Shared Services and Corporate Strategy planning and implementation. His primary focus was in the Oil and Gas industry having served the PETRONAS group for 4 years. Nevertheless, he was then exposed to several other industries which include telecommunication, IT, maritime, logistics, steel, construction, education and retailing.

In 2011, Dato’ Chairil founded Solar System & Power Sdn Bhd that focuses in the development, construction and operation of Solar Power Generation Plant. To date he has successfully led the company to complete the development and construction of a 2 megawatt Solar Power Generation Plant and in the midst of constructing another 1 megawatt Solar Power Plant in Puchong Selangor.

Dato’ Chairil does not hold any directorship in other public companies.



YAP KIEN MING


LEONG KAH MUN


YAP KIEN MING, a Malaysian, aged 52, is an

Independent Non-Executive Director of the

Company since 18 July 2014. He is also a member

of Audit and Risk Management Committee and

Chairman of Remuneration and Nomination

Committees. He graduated with a Bachelor

Degree of Arts in Economics and Marketing from

the University of Brock, Canada.

He began his career as a Strategic Management

Executive with Kein Hing Industries Sdn. Bhd.

During his 5 years’ tenure, he had started and

headed the Purchasing Department. In addition,

Mr Yap had also put in place a stock system

besides heading the Purchasing Department. He

was also responsible for an integrated stamping,

machining and surface grinding line and

Sales and Marketing with clients that included

Sanden, Sharp, Nippondenso, Matsushita, Clipsal

and PDL Switch Gear Manufacturers. He was

also responsible for a Licensed Manufacturing

Warehouse, a Joint Venture between 3 Japanese

manufacturers, namely Tomen, Matsushita,

Meiwa and Kein Hing Industries Sdn. Bhd.

Subsequently, he joined Polychem Sdn. Bhd.

as Regional Product Manager which is a

manufacturers agent for hand tools, cutting tools

LEONG KAH MUN, a Malaysian, aged 48, is

a Non-Independent Non-Executive Director

of the Company since 11 November 2016. He

is a chairman of Audit and Risk Management

Committee and member of the Nomination and

Remuneration Committees.

Mr. Leong is currently the managing director

of a boutique management consultancy firm,

specializing in corporate restructuring, internal

auditing and risk management. He is a Chartered

Accountant and was a Council Member of the

Malaysian Institute of Accountants (MIA) for the

year 2012/16. He is also an Associate Member of

the Institute of Internal Auditors, Malaysia (IIAM).

and non-ferrous materials from United Kingdom,

Europe and Australia, where he had served a

wide range of industries from automotive, mould

and die, oil and gas and electrical, electronics

manufacturers.

In the last decade, he was appointed as the

Regional Sales Manager for Garryson (now

under ATA Tools.), and responsible for the Sales

and Marketing for China, Indonesia, Malaysia,

Singapore and Thailand. During his tenure, he

was involved in the Business Development, Sales

and Distribution channels, Technical Training and

support to the dealers around the region.

Mr Yap has vast experience in Technical Sales and

Cross Cultural marketing in Asia and his primary

focus was in the oil and gas, aerospace and

shipping industry.

He is now the Managing Director of Takaso

Trading Sdn. Bhd. which represents a few UK

companies in Industrial Products and Automotive

High Performance Tuning.

Mr Yap holds another directorship as an

Independent non-Executive Director in Pan Pages

Berhad since June 2017.

Mr. Leong began his career in an audit firm

and subsequently moved into various senior

management capacity in both private and public

listed companies in Malaysia, with businesses

ranging from property management, main

contractor, manufacturing, trading and quarrying.

He served as an Independent Non-Executive

Director at Halex Holdings Berhad from October

16, 2014 until 22 May 2017. Mr. Leong Kah Mun

serves as an Independent Non-Executive Director

of Malaysia Pacific Corporation Berhad since

November 9, 2015.



SAM KOK HONG


SAM KOK HONG, a Malaysian, aged 49, is

an Independent Non-Executive Director of

the Company since 27 April 2016. He is also

a member of Audit and Risk Management,

Nomination and Remuneration Committees of

the Company. He had his formative, secondary

and pre-university education in Singapore, and

graduated with a Bachelors Degree of Science

from the National University of Singapore in

1991.

He then started his career in a reputable shipping

company in Singapore in 1991, and progressed

to spearhead their business expansion into

Malaysia in 1994. He was tasked to lead the

Malaysian business’ growth and expansion and

was appointed as director and responsible for the

group’s Malaysian operations and their further

expansions into Sabah and Sarawak.

He grew the Malaysian operations to such

success that the business was then acquired by

the Boustead group as part of their growth plans.

After acquisition by Boustead Holding in 1999, he

was seconded to senior management positions

in the Boustead Shipping Group of companies. In

Boustead Shipping Group, his last held position

was General Manager before venturing out.

He specializes in the development of shipping

agencies’ activities in emerging markets and has

assisted various shipping owners to extend their

service coverage to South East Asian ports.

Currently he sits on the board of several private

shipping and logistics companies in Malaysia,

Hong Kong, Myanmar and Singapore.

Mr Sam does not hold any directorship in other

public companies.

Notes to Directors’ profile:

1. Family Relationships

None of the Directors have any family relationship with any Directors and/or major shareholders of the Company.

2. Conflict of Interest

None of the Directors have any business arrangement with the Company in which he has a personal interest or have any

conflict of interest with the Company.

3. Conviction of Offences

None of the Directors have any conviction for offences within the past 5 years other than traffic offences.

4. Attendance of Board Meetings

The details of the Directors’ attendance at Board Meetings are set out on page 29 of this Annual Report.

5. Shareholdings

The details of the Directors’ interest in the securities of the Company are set out on page 119 of this Annual Report.


Profile of Senior Team Members

PANG KIM MOON (SIMON)Chief Executive Officer

PANG KIM MOON (SIMON), a Malaysian, aged 42, Chief Executive Officer of Viewnet Computer System

Sdn Bhd. He has more than 20 years of experience in the IT & ICT retail and distribution industry.

NG LOCK EN (RONALL), a Malaysian, aged 38, Chief Operation Officer of Viewnet Computer System Sdn

Bhd. He has more than 15 years of experience in the IT & ICT retail and distribution industry.

YOW WENG WENG (SHARON), a Malaysian, aged 31, General Manager of Super Kian Holdings Sdn Bhd.

She has more than 8 years of experience in the finance industry specifically in insurance and banking.

NG LOCK EN (RONALL)Chief Operation Officer

YOW WENG WENG (SHARON)

General Manager

“Where there’s sugar, there are ants” & the same goes to

“Where there’s opportunities & possibilities, there’s SKH”.


Management Discussion & Analysis Disclosures

GROUP’S BUSINESS AND OPERATIONS OVERVIEW

WHAT WE DO

The SKH Consortium Berhad (SKH) Group is principally

involved in ICT and we have also diversified into the property

construction sector. Essentially we have these 2 divisions that

are diverse to prevent over-reliance on one single industry

and also to hedge against any adverse conditions affecting

one of such industries. In another words, in uncertain

economic conditions as we are experiencing locally, we

choose not to put all our eggs in one basket. Further, the

Group does not rule out venturing into other business sectors

if there are good opportunities to drive the Group forward.

However, we are adopting a prudent and cautious approach

when considering any opportunity.

The key activities of our Group include trading in IT and

ICT related products (hardware, software and accessories),

electronic commerce provider and facilitator, software

development and support services and property construction

and its related business. Our Group has multiple ICT

products retail outlets under our wholly-owned subsidiaries

Viewnet Computer System Sdn Bhd (“Viewnet”) and PC Zone

Computer Trading (M) Sdn Bhd (“PC Zone”) in shopping malls

including Plaza Low Yat which remains the main ICT mall in

Malaysia and Pavilion. For our property construction projects,

we are involved in works in Kemaman, Terengganu, Batu

Pahat, Johor and a new warehouse construction project in

USJ, Subang.

SKH envisions itself to be a strong entity that will withstand

the test of times and continues to deliver quality products

and services while upholding our commitment to create

sustainable growth and value for our stakeholders.

In order to achieve our goals, the Group plans to enhance

the products offerings and services through bringing in

up-to-date trending products and personalized customer

service, increasing our property construction portfolio by

actively engaging new projects and opportunities, optimise

profitability by reducing redundant operational costs and

expenses, create a productive and efficient team of workforce

through better human resources trainings and incentives,

and establishing good relationships with all stakeholders for

a higher business returns and prospects. More importantly,

we are constantly mindful that the world and various

ecosystems are changing all the time and we must be able to

adapt and evolve.


Management Discussion & Analysis Disclosurescont’d

FINANCIAL RESULTS AND FINANCIAL CONDITION REVIEW

In this financial year, the Group recorded revenue of RM136.6

million as compared to RM197.7 million in the previous

15-months financial period, a decrease of 30.9%. The revenue

was mainly derived from the sales of IT and ICT products such

as the Do-It-Yourself (“DIY”) products (customers’ self-built-

up owned products), accessories and gadgets. The property

construction projects contributed RM7.1 million which is

about 5.2% to the overall Group’s revenue.

The difference in revenue in IT and ICT Division was mainly

due to the shorter financial period (12 months compared to

15 months) to which the revenue was recorded. Whereas,

the property construction segment recorded lower revenue

in the current financial year mainly due to a slowdown in

the scheduled progress of the Kemaman’s project due to

the economic instability affecting the oil and gas industry

in Kemaman, which in turn caused a lower demand for

properties and has been further affected by lower purchasing

power due to tightened borrowing policies imposed by

financial institutions on prospective purchasers.

On the other hand, the Group’s profit before tax (“PBT”)

increased by 109.8% from loss before tax (“LBT”) recorded

at RM19.4 million in the previous financial period to PBT

of RM1.9 million for the current financial year, mainly due

to impairment losses of equipment, impairment losses

of goodwill on consolidation, impairment losses of other

intangible assets, impairment losses on receivables and

share-based payment arising from ESOS which were made in

the previous financial period.

Operating expenses was reduced by 61.2% to RM15.7 million

in the current financial year as compared to RM40.5 million

in the previous financial period. This is because of the shorter

financial period to which the operating expenses were

recorded as well as the impairments of assets and share-

based payment arising from ESOS as mentioned above.

The Group’s trade receivables increased by 10.7% to RM12.4

million from RM11.2 million in the last financial period

mainly due to certain aged outstanding balances from the

construction division. Subsequent to the financial year end,

the Group managed to secure payments from the trade

receivable by way of offsetting the amount owing of RM4.8

million against the purchase price of the properties. The

Group is also actively monitoring the settlement of the

balance of debts.

As for the Group’s trade payables, it was decreased by 11.6%

to RM21.3 million from RM24.1 million recorded in the last

financial period. This was attributed to lesser purchases

towards year end and the Group took a shorter period to

repay their suppliers.

The Group has sufficient funds for working capital. The Group’s

borrowings arose from hire purchase of motor vehicles.

Even though the Group managed to persevere and maintain

its performance (i.e. revenue) in the ICT retail segment in this

financial year (if compared to previous corresponding twelve-

month financial period), the ICT industry remains challenging

as cost of living has been rising along with inflation and

uncertainties, where consumers have seen being prudent with

their spending. In addition, the industry also faces stiff price

competition from both local and overseas markets, where

consumers can now shop online without much hassle and while

there is also a continued shift towards lower priced products.

Having foreseen this, the Group decided to commence a division

in a more stable sector in Malaysia which is the construction

sector to add to the income basket. It should be noted that

construction differs from property development as developers

face challenges affecting the property sector but we can see

for ourselves that construction works are still continuing and

carried out by construction players. In this light, the Group’s

property construction division and its projects continue to

progress within planned expectations although the Kemaman

project was affected as the area was impacted by the oil and gas

industry’s slowdown but the Group has safeguarded its position

and does not have any significant impact on the overall business

operations and risk exposure as the management of the Group

had ensured that the Group is not responsible for the delay and

any possible claims due to the developer deciding to adopt a

wait-and-see approach.

OPERATIONS REVIEW

Our ICT division managed to bounce back into the black

and achieved a PBT of RM1.5 million as compared to a LBT of

RM15.5 million recorded in the previous financial period. The

Group’s decision to proceed with the various impairments of

assets in the previous financial period was a tough choice;

however, it was done timely as it has put the Group in a

better position this year.

Bearing the understanding that the ICT industry is going

through rough times, the Group is working hard to counter

these issues by seeking to evolve our products and services

to suit current market conditions as part of our long term

goals. The management is looking into various strategies and

possibilities, which include revamping our products offerings,

customer service improvement, e-commerce platform,

branches relocations, collaborations and partnerships with

new vendors, and etc. The DIY products which were marketed

have proved to be profitable and the Group will continue to

expand and tap on its potential. Further, the Group has plans

to evolve our ICT retail operations to cater for wholesale

purchases including for foreigners to tap our product range

to onward selling to their respective local markets.


Management Discussion & Analysis Disclosurescont’d

As for the construction division, the Group managed to

recoup its losses from RM1.8 million to making a PBT of

RM2.1 million. It was mainly attributed to work performed

for a project in Kemaman. The management continues to

hold its confidence in the construction market and is looking

at its organic growth together with the inorganic merging &

acquisition (M&A) hybrid model.

Although the business growth is considerably slow, it is

steadily expanding over time as the Group increasingly

improves our positioning in the industry with the projects on

hand and management continuously sources for new feasible

business opportunities and ventures.

RISK MANAGEMENT

The Group’s businesses in the ICT and construction sectors

are highly competitive with multiple market players and

subject to today’s volatile economy, which is very much

affected by various factors such as consumers‘ spending,

inflation and foreign exchange among others factors. With

upward pressure on prices posing a setback to consumption

growth and a depreciated ringgit contributing towards a

higher cost-push inflation and cautious spending, the Group

foresees challenging times. However, this is no excuse as

many industries are similarly affected.

To remain competitive, the Group will restructure the types of

ICT products available and reinforce the marketing initiatives

to cater to and attract more customers. This will also be

complemented with internal employee trainings especially the

front-liners so that customer experience will be enhanced to

encourage return sales and loyalty. The ICT sales strategy will

also need to evolve to keep up with the times and leverage on

the behavior of customers still visiting our outlets.

While the Group is also exposed to risks of cases whereby

construction projects being postponed or terminated by the

developers and there is no assurance that work completed

will be fully reimbursed, the Group is taking necessary

precautions to work with reputable companies to prevent

such incidents.

Also, with an organic plus inorganic growth approach,

the Group cautiously secures strategic deals and working

relationships with various parties to consistently generate

encouraging performance to bring value for our stakeholders.

In a nutshell, the Group wishes to reduce costs and stem

expenses outflow where we are able to whilst consolidating

our cash position to minimize risk. Adopting a prudent

approach when considering any new opportunity/project will

hopefully also mitigate risks in such challenging times.

MOVING FORWARD

The retail industry has been suffering a lot of external

pressures and challenges from rising cost of business to

retaining customers. Therefore, there is a need to evolve the

structure to overcome such high volume but low margin

business. E-commerce and online shopping is a growing

trend in the country with more and more retailers and

vendors offering online and mobile shopping platforms to

tap into the booming market.

As in many other countries around the world, the trend of

online shopping is gaining a sizeable market share in the

Malaysian retail space, according to leading retail consulting

firm Retail Group Malaysia (RGM). Currently, online retail

sales only account for less than 2% of total retail sales in the

country and the big piece of cake is still within reach. With

this, the Group sees e-Commerce to be the direction to

progress in order to sustain the ICT division’s income.

With the diversification into construction, the Group has

somehow mitigated our sole reliance on the ICT industry.

Notwithstanding the fact that the weak value of Malaysian

Ringgit resulting in higher cost of imported products and

labor force among other issues, the Group is consolidating

cash, being prudent with expenditures and strategising to

transcend these tough periods with fortitude.

The management is also constantly looking for new

opportunities to balance reliance on high volume low

margin business which includes exploring prospects in other

business sectors to broaden its income stream. Management

expects that the overall outlook for the Group’s performance

for the next financial year to be challenging due to the

uncertainties in the current market condition.

At present, the Group’s focus is to create and enhance

sustainable value for our shareholders. Therefore, the

management thinks that it is wiser to reinvest the earnings in

growing our businesses. As such, the Group did not declare

any dividend in the short term but is hopeful of distributing

excess profits once we are back on track with stable income

in the future.

Teamwork - “When many work together for a goal, great things may be accomplished.” At SKH, we believe that the achievements of an organization are the results of the combined efforts of each individual.


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Twenty-First Annual General Meeting of SKH CONSORTIUM BERHAD (383028-D) (“Company” or

“SKH”) will be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala

Lumpur on Friday, 25 August 2017 at 2.30 p.m. for the following purposes:

1. To receive the Audited Financial Statements for the financial year ended 31 March 2017

together with the Reports of the Directors and Auditors thereon.

2. To re-elect Mr. Tan Ooi Jin, Director who is retiring in accordance with Article 83 of the

Company’s Articles of Association.

3. To re-elect Ms. Lee Li Chain, Director who is retiring in accordance with Article 83 of the


4. To re-elect Mr Leong Kah Mun, Director who is retiring in accordance with Article 90 of the


5. To approve the payment of Directors’ fees of RM400,000 for the financial year ending 31

March 2018 which is payable quarterly in arrears.

6. To approve the payment of Directors’ benefits up to an amount of RM20,000 from 01 April

2017 until the next Annual General Meeting of the Company.

7. To re-appoint Messrs Crowe Horwath as Auditors of the Company until the conclusion of

the next Annual General Meeting and to authorise the Directors to fix their remuneration.

As Special Business

8. To consider and, if thought fit, with or without any modification, to pass the following

Resolution:

Authority to Issue Shares

“THAT, subject always to the Companies Act, 2016, the Articles of Association of the

Company and the approvals of the relevant governmental and/or regulatory authorities, if

applicable, the Directors be and are hereby empowered pursuant to Section 75 and Section

76 of the Companies Act, 2016, to issue shares in the Company from time to time and upon

such terms and conditions and for such purposes as the Directors may in their absolute

discretion deem fit, PROVIDED THAT the aggregate number of shares issued pursuant to

this Resolution does not exceed ten (10) per cent of the total number of issued shares of

the Company for the time being, AND THAT the Directors be and are also empowered to

obtain the approval for the listing of and and quotation for the additional shares so issued

on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in

force until the conclusion of the next Annual General Meeting of the Company.”

9. To transact any other business that may be transacted at an Annual General Meeting of

which due notice shall have been given in accordance with the Companies Act, 2016 and

the Articles of Association of the Company.

By Order of the Board

LEONG SUE CHING (MAICSA 7040814)

Company Secretary

Kuala Lumpur

31 July 2017

(Please refer to

Explanatory Note 1)

(Ordinary Resolution 1)








Notice of Annual General Meetingcont’d

Explanatory Notes on Ordinary and Special Business:

1. Item 1 of the Agenda

This Agenda item is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act, 2016 does not require a formal

approval of the shareholders and hence, is not put forward for voting.

2. Item 8 of the Agenda

The proposed Ordinary Resolution 7, if passed, will authorise the Directors of the Company to issue not more than 10% of the issued share

capital of the Company subject to the approvals of all relevant governmental/regulatory bodies. This authorisation will empower the Directors

of the Company to issue shares notwithstanding that the authorisation has ceased to be in force if the shares are issued in pursuance of an offer,

agreement or option made or granted by the Directors while the authorisation was in force. This authorisation will expire at the conclusion of

the next Annual General Meeting of the Company.

As at the date of this notice, no new shares in the Company were issued pursuant to the general authority to the directors for issuance of shares

pursuant to Section 132D of the Companies Act, 1965 at the Twentieth Annual General Meeting held on 19 August 2016 and which will lapse at

the conclusion of the Twenty-First Annual General Meeting.

The general mandate sought will enable the Directors of the Company to issue and allot shares, including but not limited for further possible

fund raising exercises, further placement of shares for purpose of funding current and/or future investment projects, working capital, repayment

of borrowings and/or acquisitions.

Notes:

(1) A member may appoint up to two (2) proxies to attend and vote instead. A proxy may but need not be a member of the Company. If the proxy

is not a member, the proxy need not be an advocate, an approved company auditor or a person approved by the Companies Commission of

Malaysia.

(2) Where a Member appoints more than one (1) proxy, he shall specify the proportion of his holdings to be represented by each proxy, failing which

the appointment shall be invalid.

(3) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, such member may appoint

at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said

securities account.

(4) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners

in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in

respect of each omnibus account it holds.

(5) If the appointor is a corporation, this form must be executed under its common seal or under the hand of an attorney duly authorised.

(6) To be valid, this form which is duly completed must be deposited at the registered office of the Company at No. 9A, Jalan Medan Tuanku, Medan

Tuanku, 50300 Kuala Lumpur, Wilayah Persekutuan not less than forty eights (48) hours before the time for holding the meeting PROVIDED THAT

in the event the member(s) duly executes the form of proxy but does not name any proxy, such member(s) shall be deemed to have appointed

the Chairman of the meeting as his/their proxy, PROVIDED ALWAYS that the rest of the proxy form, other than the particulars of the proxy have

been duly completed by the member(s).

(7) For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting the Bursa Malaysia Depository

Sdn. Bhd. to make available to the Company pursuant to Article 58 of the Articles of Association of the Company and Rule 7.16(2) of the ACE

Market Listing Requirements of Bursa Malaysia Securities Berhad, a Record of Depositors as at 18 August 2017 and only a Depositor whose

name appears on such Record of Depositors shall be entitled to attend, speak and vote at this meeting.

(8) All resolutions as set out in this notice of AGM are to be voted by poll.


Audit and Risk Management Committee Report

COMPOSITION OF THE AUDIT AND RISK MANAGEMENT COMMITTEE

The Committee was established on 23 September 2004. The members of the Committee are as follows:

Chairman : Leong Kah Mun – Independent Non-Executive Director

(Appointed on 11 November 2016)

Lim Bun Hwa – Independent Non-Executive Director

(Resigned on 1 September 2016)

Members : Dato’ Chairil Nazri Bin Ahmad – Independent Non-Executive Director

(Appointed on 8 December 2010)

Yap Kien Ming – Independent Non-Executive Director

(Appointed on 22 August 2014)

Sam Kok Hong – Independent Non-Executive Director

(Appointed on 27 April 2016)

Tan Ooi Jin – Executive Director

(Resigned on 16 June 2017)

TERMS OF REFERENCE

1. Composition

The Committee shall comprise no fewer than three (3) members, a majority of whom shall be independent directors and

all members should be non-executive directors. At least one (1) member must be a member of the Malaysian Institute

of Accountants or possess such other qualifications and/or experience as approved by Bursa Malaysia Securities Berhad

(“Bursa Securities”).

In the event of any vacancy with the result that the number of members is reduced to below three, the vacancy shall

be filled within two (2) months but in any case not later than three (3) months. Therefore, a member of the Committee

who wishes to retire or resign should provide sufficient written notice to the Company so that a replacement may be

appointed before he leaves.

The Board of Directors of the Company must review the term of office and performance of the Committee and each of its

members at least once every three (3) years to determine whether the Committee and its members have carried out their

duties in accordance with their terms of reference.

2. Rights

The Committee shall:

a. have authority to investigate any matter within its terms of reference;

b. have the resources which are required to perform its duties;

c. have full and unrestricted access to any information pertaining to the Group;

d. have direct communication channels with the external auditors and person(s) carrying out the internal audit

function or activity;

e. have the right to obtain legal or independent professional or other advice at the Company’s expense;

f. have the right to convene meetings with the external auditors, internal auditors, or both, excluding the presence of

the executive board members, whenever deemed necessary;


Audit and Risk Management Committee Reportcont’d

TERMS OF REFERENCE cont’d

2. Rights cont’d

g. promptly report to the Bursa Malaysia, or such other name(s) as may be adopted by Bursa Malaysia, matters which

have not been satisfactorily resolved by the Board of Directors resulting in a breach of the listing requirements;

h. have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman shall have

the casting vote should a tie arise;

i. meet as and when required on a reasonable notice; and

j. the Chairman shall call for a meeting upon the request of the External Auditors.

3. Duties

The duties of the Committee shall include:

a. To review with the external auditors on:

the audit plan, its scope and nature;

the audit report;

the results of their evaluation of the accounting policies and systems of internal accounting controls within

the Group; and

the assistance given by the officers of the Company to external auditors, including any difficulties or disputes

with Management encountered during the audit.

b. To review the adequacy of the scope, functions and resources and set the standards of the internal audit function.

c. To ensure that the external auditors review a statement made by the Board of Directors, with regard to the state of

internal control of the listed company and report the results thereof to the Board of Directors.

d. To recommend such measures as to be taken by the Board of Directors on the effectiveness of the system of internal

control, management information and risk management practices of the Group.

e. To review the internal audit programme, processes the results of the internal audit programme, processes or

investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal

audit function.

f. To review any appraisal or assessment of the performance of the internal audit function.

g. To approve any appointment or termination of the internal auditors.

h. To take cognisance of resignation of internal auditors and provide the resignation internal auditors an opportunity

to submit its reasons for resignation.

i. To review with management:

audit reports and management letter issued by the external auditors and the implementation of audit

recommendations;

interim financial information; and

the assistance given by the officers of the Company to external auditors.

j. To monitor related party transactions entered into by the Company or the Group and to determine if such

transactions are undertaken on an arm’s length basis and normal commercial terms and on terms not more

favourable to the related parties than those generally available to the public, and to ensure that the Directors report

such transactions annually to shareholders via the annual report, and to review conflicts of interest that may arise

within the Company or the Group including any transaction, procedure or course of conduct that raises questions of

management integrity.


TERMS OF REFERENCE cont’d

3. Duties cont’d

k. To review the quarterly reports on consolidated results and annual financial statements prior to submission to the

Board of Directors, focusing particularly on:

changes in or implementation of major accounting policy and practices;

significant and/or unusual matters arising from the audit;

the going concern assumption; and

compliance with accounting standards and other legal requirements.

l. To consider the appointment and/or re-appointment of auditors, the audit fee and any questions of resignation or

dismissal including recommending the nomination of person or persons as auditors to the board.

m. To verify the allocation of options pursuant to a share scheme for employees as being in compliance with the

criteria for allocation of options under the share scheme, at the end of each financial year.

MEETINGS ATTENDANCE

The Committee held five (5) meetings during the financial year ended 31 March 2017. The record of attendance of these

meetings by the members is as follows:-

Director Meeting attendance *

Leong Kah Mun (Appointed w.e.f. 11 November 2016) 2/2

Dato’ Chairil Nazri Bin Ahmad 5/5

Yap Kien Ming 5/5

Sam Kok Hong 4/5

Tan Ooi Jin (Resigned w.e.f. 16 June 2017) 5/5

Lim Bun Hwa (Resigned w.e.f. 1 September 2016) 3/3

* Meetings held during the financial year under review were 25 May 2016, 15 July 2016, 25 August 2016, 24 November 2016 and 24 February 2017.

ACTIVITIES OF THE COMMITTEE

During the financial year ended 31 March 2017, the activities carried by the Committee include:

a. Reviewed the unaudited quarterly reports of the Group before recommending to the Board of Directors for their approval

and release of the Group’s results to Bursa Securities;

b. Reviewed the annual audited financial statements, Directors’ and Auditors’ Reports and other accounting issues arising

from the financial year ended 31 March 2017 audit;

c. Reviewed with the external auditors on the audit planning memorandum of the Group for the financial year ended 31

March 2017;

d. Reviewed with the external auditors on the results and issues arising from the audits and their resolutions;

e. Reviewed with the external auditors on the impact of new accounting standards on the Group’s performance and its state

of readiness;

f. Reviewed with the internal auditors on the internal audit findings and recommendations;



ACTIVITIES OF THE COMMITTEE cont’d

g. Reviewed the quarterly impairment losses on receivables;

h. Reviewed the software development expenditure;

i. Reviewed the Audit and Risk Management Committee Report, Statement of Corporate Governance and Statement of Risk

Management and Internal Control before recommending to the Board of Directors for their approval, for inclusion in the

2017 Annual Report;

j. Reviewed the progress of the legal actions taken by the Company against trade debtors;

k. Reviewed the quarterly status of recurrent related party transactions;

l. Reviewed the performance of the external auditors and made recommendation to the Board of Directors on appointment

and remuneration of the external auditors; and

m. Conducted one (1) meeting with the external auditors without the presence of the Executive Directors and Management

of the group.

INTERNAL AUDIT FUNCTION

The Group has outsourced its Internal Audit Function to an independent internal audit service provider for the financial year

ended 31 March 2017.

The functions of internal audit are:

a. Perform audit work in accordance with the pre-approved internal audit plan.

b. Carry out review on the system of internal controls of the Group.

c. Review and comment on the effectiveness and adequacy of the existing control policies and procedures.

d. Provide recommendations, if any, for the improvement of the control policies and procedures.

The cost incurred for the internal audit function in respect of the financial year ended 31 March 2017 was RM30,000.

STATEMENT VERIFYING ALLOCATION OF OPTIONS

The Employees Share Option Scheme (“ESOS”) of the Company was approved by the shareholders at the Extraordinary General

Meeting held on 3 December 2012, and was implemented on 15 January 2013.

The allocations of ESOS were verified by the Audit and Risk Management Committee for each financial year to ensure

compliance with the allocation criteria determined by the ESOS Committee and in accordance with By-Laws of the ESOS.

There were no options offered to eligible persons under the ESOS during the financial year ended 31 March 2017.



Statement on Corporate Governance

The Board of Directors (“Board”) recognises that the practice of good corporate governance (“CG”) throughout the Company

and its subsidiaries (collectively “Group”) is fundamental to build a sustainable business and discharging its responsibilities to

protect and enhance shareholder value and financial performance of the Group. The Board observes and practises the principles

and best practices as recommended by the Malaysian Code of Corporate Governance 2017 (“MCCG 2017”). This statement

provides an insight into the CG practices of the Company pursuant to the Principles and Recommendations as set out in the

MCCG 2017.

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

1.1 Clear functions of the Board and those delegated to Management

The Group is headed by an experienced Board comprising professionals and entrepreneurs with diverse

knowledge and experience in business, financial, property, shipping and IT/ICT background. The Board leads the

group by providing directions and guidance to the management and staff in order to achieve its corporate goals

and objectives. The Board aims to maximise shareholder’s value and safeguarding stakeholders’ interest including

securing sustainable long-term financial results and increasing shareholders’ value, without compromising on social

and environment considerations.

The Board delegates and confers some of its authorities and discretion on the Chairman, Executive Directors, and

Management as well as on properly constituted Board Committees comprising mainly Non-Executive Directors.

The Board delegates the day-to-day management of the Group’s business to the Board Executive Directors, but

reserves for its consideration significant matters such as the following:

Approval of financial results

Declaration of dividends

Risk appetite setting

Short-term and medium-term business plans

Annual budget

Capital management plan

Appointment of key responsible persons

The Executive Directors are accountable to act according to commonly accepted good business practice or

professional ethics.

It is the role of the Management to manage the Company in accordance with the direction and delegation by the

Board and the Board is focused on the Group’s overall governance.

The Board also delegates and confers some of the Board’s authorities and discretion to properly constituted Board

Commiittees comprising majority non-Executive directors. Committees are made up of Audit and Risk Management

Committee (“ARMC”), Nomination Committee (“NC”) and Remuneration Committee (“RC”); and are entrusted with

specific responsibilities to oversee the Group’s affairs, with authority to act on behalf of the Board in accordance

with their respective Terms of Reference. At each Board meeting, minutes of the Board Committee meetings are

presented to keep the Board informed. The Chairman of the relevant Board Committees also report to the Board on

key issues deliberated by the Board Committees at their respective meetings.

1.2 Clear roles and responsibilities in discharging fiduciary and leadership functions

The Board has discharged its responsibilities in the best interests of the Company. The following, amongst others,

are the key responsibilities of the Board:

(a) Reviewing and adopting the Company’s strategic plans

The Board will review, evaluate and approve, on regular basis, the proposed annual budgets, proposed

business plans, financial and operating results of the Company and the principal risks that may have

significant impact on the Group’s business or on its financial position, and the mitigating factors. The Board

will deliberate both Management’s and its own perspectives, and challenge the Management’s views and

assumptions to ensure the best outcome is achieved.


Statement on Corporate Governancecont’d

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES cont’d

1.2 Clear roles and responsibilities in discharging fiduciary and leadership functions cont’d

(b) Overseeing the conduct of the Company’s business

The Executive Directors are responsible for the day-to-day management of the business and operations of the

Group, such as property construction and IT/ICT, in respect of both its regulatory and commercial functions.

He is supported by Management and the Chief Financial Officer (“CFO”).

Management’s performance, under the leadership of the Executive Directors, is assessed by the Board

through monitoring the success in delivering the approved targets and business plans against the

performance of the Group.

(c) Identifying principal risks and ensuring the implementation of appropriate internal controls and

mitigation measures

Through the AC, the Board oversees the risk management framework of the Group by providing an objective

non-executive review of the effectiveness and efficiency of the internal controls, risk management and

governance processes. The AC advises the Board on areas of high risk faced by the Group and the adequacy

of compliance and control throughout the Group. The AC reviews the action plan implemented and makes

relevant recommendations to the Board to manage risks.

(d) Succession Planning

The Board has entrusted the NC and RC with the responsibility to review candidates for the Board and key

management positions and to determine remuneration packages for these appointments, and to formulate

nomination, selection, remuneration and succession policies for the Group.

The NC also undertakes yearly evaluation of the performance of the Chief Financial Officer, whose

remuneration is directly linked to performance.

(e) Overseeing the development and implementation of a shareholder communications policy for the

Company

The Company strongly believes that effective and timely communication is essential in maintaining good

relations with the shareholders, investors and investment community. This will enhance the shareholders’

understanding of the Group, in terms of their appreciation of the business strategies, performance and

challenges of the Group. As an ongoing effort for the Group to strengthen its relationship with the

shareholders, the Company continuously discloses and disseminates relevant information in a timely manner

to its shareholders as well as to the general investing public. The Company strives to carry out its Investor

Relations (“IR”) activities, of which the information is available on its website.

In addition to the above, shareholders and investors can make inquiries about IR matters via dedicated e-mail

addresses available on the corporate website.

(f) Reviewing the adequacy and integrity of management information and internal control system of the

Company

The Board has an overall responsibility for the adequacy and integrity of the Company’s internal control

system that provides reasonable assurance of effective and efficient operations and compliance with the

applicable law and regulations, as well as with internal procedures and guidelines. Details pertaining to the

Company’s internal control system and the reviews of its effectiveness are set out in the Statement on Risk

Management and Internal Control of this Annual Report.



1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES cont’d

1.3 Formalised ethical standards through Code of Ethics

The Board is guided by the Company’s Code of Ethics for Directors and Employees in discharging its oversight role

effectively. The Code of Ethics require all Directors to observe high ethical business standards, and to apply these

values to all aspects of the Group’s business and professional practice and act in good faith in the best interests

of the Group and its shareholders. A summary of the Code of Ethics, clearly stated in the employee handbook, has

been uploaded on the intranet.

In addition, the Company has formalise a Whistleblowing Policy to foster an environment where integrity and

ethical behaviour are maintained and any illegal or improper action and/or wrongdoing in the Company can be

exposed.

The Whistleblowing Policy sets out the internal channel/procedures for all employees of the Group to disclose any

irregularities and the protection accorded to employees who disclose such allegations.

1.4 Strategies promoting sustainability

The Board shall formalise strategies on promoting sustainability. Attention will be given to the environmental, social

and governance aspects of business which underpin sustainability as well as balancing with the interest of various

stakeholders to enhance investor’s perception and public trust.

1.5 Access to information and advice

The Directors have individual and independent access to the advice and dedicated support services of the Company

Secretary in ensuring the effective functioning of the Board. The Directors may seek advice from Management on

issues under their respective purview. The Directors may also interact directly with Management, or request further

explanation, information or updates on any aspect of the Company’s operations or business concerns from them.

In addition, the Board may seek independent professional advice at the Company’s expense on specific issues to

enable it to discharge its duties in relation to matters being deliberated.

1.6 Qualified and competent company secretary

The Board is regularly updated and apprised by the Company Secretary on new regulation issued by the regulatory

authorities. The Company Secretary also serves notice to the Directors and Principal Officers to notify them of closed

periods for dealing in the Company’s shares.

The Company Secretary attends and ensures that all Board meetings are properly convened, and that accurate and

proper recording of the proceedings and resolutions passed are taken and maintained in the statutory register of

the Company.

The Company Secretary works closely with Management to ensure timely and appropriate information flow within

and to the Board and Board Committees.

1.7 Board Charter

In discharging its duties, the Board is constantly mindful of the need to safeguard the interests of the Group’s

stakeholders. In order to facilitate the effective discharge of its duties, the Board is guided by the Board Charter

which was adopted by the Board on 22 February 2013 and the same was published on the corporate website.

The Board Charter serves to ensure that all Board members acting on the Group’s behalf are aware of their

expanding roles and responsibilities. It sets out the strategic intent and specific responsibilities to be discharged

by the Board members collectively and individually. It also regulates on how the Board conducts business in

accordance with CG principles.



2. STRENGTHEN COMPOSITION

2.1 NC

The NC was established on 28 April 2005 and comprises exclusively Independent Non-Executive Directors.

The NC is guided by specific terms of reference and the NC’s duties are as follows:

To recommend candidates to fill the seats on the Board and Board Committees;

To assess the contribution of each individual Director;

To review annually the Board structure, size, composition and the balance between Executive Directors, Non-

Executive Directors and Independent Directors to ensure that the Board has the appropriate mix of skills and

experience including core competencies which Directors should bring to the Board and other qualities to

function effectively and efficiently;

To take the necessary steps to ensure that women candidates are sought as part of the Company’s

recruitment exercise to meet its gender diversity policy;

To review annually the independence of Independent Directors;

To select, monitor and overseeing succession plan for the Executive Director and senior management of the

Company;

To identify suitable orientation, educational and training programmes for continuous development of

Directors;

To establish and implement processes for assessing the effectiveness of the Board as a whole, the Committees

of the Board and assessing the contribution of each Director; and

To consider other matters as referred to the Committee by the Board.

2.2 Senior Independent Non-Executive Directors

The Board has identified the Independent Non-Executive Director, Yap Kien Ming, as the Senior Independent Non-

Executive Director to whom concerns of shareholders and other stakeholders may be conveyed. The NC was chaired

by Yap Kien Ming.

Mr Yap can be contacted by e-mail <[email protected]>

2.3 Develop, maintain and review criteria for recruitment and annual assessment of Directors

Board appointment process

The NC is responsible for identifying and recommending suitable candidates for Board membership and also for

assessing the performance of the Directors on an ongoing basis. The Board will have the ultimate responsibility

and final decision on the appointment. This process shall ensure that the Board membership is accurately reflected

in the long-term strategic direction and needs of the Company and determines skills matrix to support strategic

direction and needs of the Company.

Management shall then engage broadly to develop a pool of interested potential candidates meeting the skills,

expertise, personal qualities and diversity requirements for both the Board and the Committee appointments.

The NC evaluates and matches the criteria of the candidate, and will consider diversity, including gender, where

appropriate, and recommends to the Board for appointment.

The NC will contact those persons identified to determine interest in serving the Company. This communication will

ensure that prospective Board members have clarity regarding the nominating process as well as Director/Board

profiles, roles and responsibilities, expectations of time commitments and other information as required.

According to the Articles of Association of the Company, all Directors are required to submit themselves for re-

election at intervals of not more than three (3) years. The Articles of Association also state that one-third (1/3) of the

Board members shall retire from office at the Annual General Meeting (“AGM”) and shall be eligible for re-election at

the same AGM.

The new Director(s) duly appointed by the Board are then recommended for re-election at the AGM.



2. STRENGTHEN COMPOSITION cont’d

2.3 Develop, maintain and review criteria for recruitment and annual assessment of Directors cont’d

Board appointment process cont’d

In making the selection, the Board is assisted by the NC to consider the following aspects:

Probity, personal integrity and reputation – the person must have the personal qualities such as honesty,

integrity, diligence and independence of mind and fairness.

Competence and capability – the person must have the necessary skills, ability and commitment to carry out

the role.

The Board encourages a dynamic and diverse composition with skills, experience, time commitment and other

qualities in meeting the future needs of the Company. Currently, the Board comprises one female director.

During the financial year ended 31 March 2017, Mr Leong Kah Mun was appointed as Independent Non-Executive

Director on 11 November 2016.

Annual Assessment

The Board reviews and evaluates its own performance and the performance of its Committees on an annual basis.

The Board evaluation comprises a Board Assessment, an Individual (Self & Peer) Assessment and an Assessment of

Independence of Independent Directors.

The assessment of the Board is based on specific criteria, covering areas such as the Board structure, Board

operations, roles and responsibilities of the Board, the Board Committee and the Chairman’s role and

responsibilities.

For Individual (Self & Peer) Assessment, the assessment criteria include contribution to interaction, quality of inputs,

and understanding of role.

The results of the assessment would form the basis of the NC’s recommendation to the Board for the re-election of

Directors at the next AGM.

Gender diversity policy

The Board is supportive of the gender boardroom diversity. The Board shall endeavour to maintain at least one

female Director at all times to possibly provide alternative views where applicable. The Company has one (1) female

director for the time being.

Further, the Company will endeavour to achieve a higher target through the progressive refreshing of the Board as

it implements the nine-year policy for Independent Non-Executive Directors.

2.4 Remuneration Policies and Procedures

The RC and the Board ensure that the Company’s remuneration policy remains supportive of the Company’s corporate

objectives and is aligned with the interest of shareholders, and further that the remuneration packages of Directors

and key Senior Management Officers are sufficiently attractive to attract and to retain persons of high calibre.

The RC reviews annually the performance of the Executive Directors and submits recommendations to the Board

on specific adjustments in remuneration and/or reward payments that reflect their respective contributions for

the year, and which are depend on the performance of the Group, achievement of the goals and/or quantified

organisational targets as well as strategic initiatives set at the beginning of each year.

The Board as a whole determines the remuneration of Non-Executive Directors and recommends the same for

shareholders’ approval.



2. STRENGTHEN COMPOSITION cont’d

2.4 Remuneration Policies and Procedures cont’d

All Executive Directors are entitled to the above Director’s fee and only Non-Executive Directors are entitled to

meeting allowance for Board Committee Meetings they attended. The remuneration package of the Executive

Directors consists of monthly salary, bonus and benefits-in-kind and Officers Liability Insurance in respect of any

liabilities arising from acts committed in their capacity as Directors and Officers of the Company.

Details of the Directors’ remuneration (including benefits-in-kind) of each Director during the financial year ended

31 March 2017 of the Company and the Group are as follows:

Executive

Directors

(RM)

Non-Executive

Directors

(RM)

Salaries and other emoluments 858,197 6,750

Fees 108,000 170,000

The number of Directors whose remuneration falls into each band of RM50,000 for the financial year ended 31

March 2017 of the Company and the Group are set as below:

Remuneration

Executive

Directors

(RM)

Non-Executive

Directors

(RM)

Total

(RM)

Below RM50,000 - 6 176,750

RM200,001 – RM250,000 1 - 238,394

RM350,001 – RM400,000 2 - 727,803

3. REINFORCE INDEPENDENCE

3.1 Annual Assessment of Independence

The Board, through the NC, assesses the independence of Independent Directors annually. The criteria for assessing

the independence of an Independent Director include the relationship between the Independent Director and the

Company and his involvement in any significant transaction with the Company.

Based on the above assessment in 2017, the Board is generally satisfied with the level of independence

demonstrated by all the Independent Directors, and their ability to bring independent and objective judgement to

board deliberations.

Mr Leong Kah Mun, an Independent Non-Executive Director, is seeking for re-appointment at the forthcoming AGM.

The NC is satisfied that Mr Leong Kah Mun has demonstrated that he is independent of management and free from

any business or other relationship which could interfere with the exercise of independent judgement. The Board

therefore recommends and supports his proposed re-appointment.

3.2 Tenure of Independent Directors

The Board has adopted a nine-year policy for Independent Non-Executive Directors. An Independent Director

may continue to serve on the Board subject to the director’s re-designation as a Non-Independent Director.

Otherwise, the Board will justify and seek shareholders’ approval at the AGM in the event it retains the director as an

Independent Director.

None of the Independent Non-Executive Directors served more than nine years in the Company.



3. REINFORCE INDEPENDENCE cont’d

3.3 Shareholders’ approval for the Continuance Office as Independent Directors

The Board would seek shareholders’ approval at the AGM if an Independent Director who has served in that capacity

for more than nine years shall remain as an Independent Director.

The NC will assess the independence of the Independent Director based on the assessment criteria developed by

the NC, and recommended to the Board for recommendation to shareholders for approval. Justification for the

Board’s recommendation would be provided to the shareholders.

3.4 Separation of the Positions of the Chairman and the Executive Directors

Currently Mr Tan Ooi Jin, an Executive Director, is the Chairman of the Company. The Board is comfortable that

there is no undue risk involved since all major and significant matters were referred to the Board for consideration

and approval. Moreover, the Independent Directors are able to provide an element of objectivity, independent

judgement and check and balance on the Board.

The Code states that the Board must comprise a majority of independent directors where the chairman is not an

independent director. Although the Chairman of the Company is not an Independent Director, the 4 Independent

Non-Executive Directors fairly protects the investment in the Company by shareholders other than the major

shareholder.

3.5 Composition of the Board

The Board of Directors currently comprises seven (7) members, of whom four (4) are Independent Non-

Executive Directors, one (1) Non-Independent Non-Executive Director, and two (2) Executive Directors. The four

(4) Independent Non-Executive Directors fulfilled the criteria of independence as defined in the ACE Market

Listing Requirements (“AMLR”). The Independent Non-Executive Directors do not participate in the day-to-day

management of the Company and do not involve themselves in business transactions or relationships with the

Company, in order not to compromise their objectivity. In staying clear of any potential conflict of interest, the

Independent Non-Executive Directors remain in a position to fulfill their responsibility to provide check and balance

to the Board.

The Board composition has met the AMLR and the Code for a balance board is fulfilled with Independent Directors

constituting more than one-third of the Board.

The Independent Non-Executive Directors are of the calibre necessary to provide an independent judgement on the

issues of strategy, performance and resource allocation. They carry sufficient weight in Board decisions to ensure

long-term interest of the shareholders, employees, customers and other stakeholders.

The seven (7) members of the Board are persons of high calibre and integrity, and they possess the appropriate

skills and provide a wealth of knowledge, experience and skills in the key areas of accountancy, business operations

and development, finance and risk management, amongst others.

Jointly with the Finance Director, the Executive Directors are accountable to the Board over the daily management

and development of the Company.

The profile of each of the member of the Board is presented on the pages 6 to 9 of this Annual Report.



4. FOSTER COMMITMENT

4.1 Time Commitment

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and

responsibilities as Directors of the Company. The Board met five (5) times during the financial year ended 31 March

2017 and record of attendance of the Directors at Board Meetings are set out in the table below:-

Name of Director

Attendance

(As at 31/03/2017)

Tan Ooi Jin 5/5

Lee Li Chain 5/5

Dato’ Chairil Nazri Bin Ahmad 5/5

Yap Kien Ming 5/5

Tan Tzu Pin 5/5

Sam Kok Hong 4/5

Leong Kah Mun (Appointed w.e.f. 11 November 2016) 2/2

Dato’ Low Liong Kian (Resigned w.e.f. 24 May 2017) 4/5

Lim Bun Hwa (Resigned w.e.f. 1 September 2016) 3/3

To ensure that the Directors have the time to focus and fulfil their roles and responsibilities effectively, the Directors

must not hold directorships in more than five (5) public listed companies and shall notify the Chairman before

accepting any new directorship.

To facilitate the Directors’ time planning, an annual meeting schedule is prepared and circulated at the beginning of

every year, as well as the tentative closed periods for dealings in securities by Directors based on the targeted date

of announcements of the Group’s quarterly results.

4.2 Training

All Directors have completed the Mandatory Accreditation Programme (”MAP”) as prescribed by Bursa Malaysia

Securities Berhad (“Bursa Securities”).

Each Director is encouraged to attend briefing, conferences, forums, trade fairs (locally and internationally),

seminars and training to keep abreast with the latest developments in the industry, matters of relevance to their

respective personal development and to enhance their skills and knowledge, which may be constructive or useful in

discharging their role as Director of the Company.

During the financial year ended 31 March 2017, the Directors have attended the following training, seminars,

conferences and exhibitions which they considered vital in keeping abreast with changes in laws and regulation,

business environment, and corporate governance development:-

No. Name of Director Course Attended Date

1 Lee Li Chain The Interplay between CG, non-Financial

Information (NFI) and Investment Decision

A Comprehensive Review of Malaysian Private

Entities Reporting Standards (MPERS)

Advocacy Sessions on Management Discussion

and Analysis for Chief Executive Officers and

Chief Financial Officers

MIA International Accountants Conference

2016

09 May 2016

23-24 June 2016

9 September 2016

15-16 November 2016



4. FOSTER COMMITMENT cont’d

4.2 Training cont’d

No. Name of Director Course Attended Date

2. Tan Ooi Jin CG Breakfast Series: How to Leverage on AGMs for better engagement with Shareholders

Cross Border Assignments Forum (Crowe Horwath)

Initial Public Offering (IPO): The route to your corporate dream

21 November 2016

11 January 2017

28 July 2016

3. Dato’ Chairil Nazri Bin Ahmad

Facilities Maintenance Management Conference 2016 - Be above and beyond

July 2016

4. Yap Kien Ming I am Ready to Manage Risks Guerilla Business Intensive

20 October 2016 25-29 April 2017

5. Tan Tzu Pin Indo Buildtech Expo - Jakarta 17 - 21 May 2017

6. Leong Kah Mun Accounting for Agriculture Sector Empowering Practitioners to Create Value In

Practice

15 March 2017 13 June 2017

5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1 Compliance with applicable financial reporting standards

The Board is committed to provide a balanced, clear and meaningful assessment of the financial performance and prospects of the Company via all disclosures and announcements made.

The Board is assisted by the ARMC to oversee and scrutinise the process and quality of the financial reporting, includes reviewing and monitoring the integrity of the financial statements and the appropriateness of the Company’s accounting policies to ensure accuracy, adequacy and completeness of the report, as well as in compliance with the relevant accounting standards.

5.2 Assessment of suitability and independence of external auditors

The ARMC is responsible for reviewing audit, recurring audit-related and non-audit services provided by the external auditors. These recurring audit-related and non-audit services comprise regulatory reviews and reporting, interim reviews, tax advisory and compliance services. In their review, the ARMC ensures that the independence and objectivity of the external auditors are not compromised.

The terms of engagement for services provided by the external auditors are reviewed by the ARMC prior to submission to the Board for approval.

It is the policy of the ARMC to meet with the external auditors two times a year to discuss their audit plan, audit findings and the Group’s financial statements. At least one of these meetings is held without the presence of the Management staff. The external auditors are also invited to attend the annual general meeting of the Company and are available to answer shareholders’ questions on the conduct of the statutory audit and the preparation and contents of their audit report.

The ARMC has reviewed the provision of non-audit services by the external auditors during the period and confirmed that the provision of these services did not compromise the external auditors’ independence and objectivity as the amount of the fees paid for these services was not significant when compared to the total fees paid to the external auditors.

The External Auditors have confirmed that they were, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

Having satisfied itself with Messrs Crowe Horwath’s performance, the ARMC will recommend their re-appointment to the Board, upon which the shareholders’ approval will be sought at the AGM.



6. RECOGNISE AND MANAGE RISKS

6.1 Sound framework to manage risks

The Board oversees, reviews and monitors the operation, adequacy and effectiveness of the Group’s system of

internal controls.

In the process of applying a risk assessment approach, the management from each division identifies the risks

relating to their area; the likelihood of the occurrence of the risks; the consequences; and the action plan to manage

those risks. The risks that derived from this process are then communicated at management level and reported to

the ARMC. The Board confirms that this process will continue throughout the year and up to the date of approval

of this statement with the aim of identifying, evaluating and managing the significant risks associated with all the

business entities within the Group. This process is regularly reviewed by the Board to ensure the adequacy and

integrity of the Group’s internal control system.

The Company continues to maintain and review its internal control procedures to ensure the protection of its assets

and its shareholders’ investment.

6.2 Internal Audit Function

The Company has outsourced its Internal audit function to a professional services firm namely IA Essential Sdn.

Bhd during the financial year ended 31 March 2017 to assist the ARMC in discharging its duties and responsibilities

in respect of reviewing the adequacy and effectiveness of the Group’s internal control systems. The scope of the

internal audit function covers the audits of key units and operations of the Group outlined in the internal audit plan

which was approved by the ARMC. The internal audit function conducts its audit focusing on key control risks in the

major business units of the Group.

The Statement on Risk Management and Internal Control as included on page 33 of this Annual Report provides the

overview of the internal control framework adopted by the Company during the financial year ended 31 March 2017.

7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

7.1 Corporate Disclosure Policy and Procedures

The Company has put in place a Corporate Disclosure Policy with the objective to ensure communications to the

public are timely, factual, accurate, complete, broadly disseminated and where necessary, filed with regulators in

accordance with applicable laws.

The Executive Directors and CFO are responsible for determining materiality of information and ensuring timely,

complete and accurate disclosure of material information to the investing public in accordance with securities laws

and stock exchange rules and regulations, monitoring compliance with this policy and overseeing the disclosure

controls and procedures. If in doubts, the Executive Directors and CFO shall consult the Board and the Board shall

make a decision.

Sufficient information would be made available to the Company Secretary or any other relevant advisors for drafting

of the announcement.

The Board is mindful that information which is expected to be material must be announced in a timely fashion, and that

any confidential information or price sensitive should be handled properly and discreetly to avoid untimely leakage to the

public and improper use of such information such as in contravention of any of its contractual obligations.

7.2 Leverage on information technology for effective dissemination of information

The Company’s website provides all relevant corporate information and it is accessible by the public. The Company’s

website includes all announcements made by the Company to Bursa Securities, Annual Reports, financial results,

key financial highlights as well as the philosophy and commitment of the Company.

Through the Company’s website, the stakeholders are able to direct queries to the Company.


8. STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

8.1 Encourage shareholder participation at general meetings

In an effort to encourage greater shareholders’ participation at AGMs, the Board takes cognisance in serving

longer than the required minimum notice period for AGMs, when possible. The Chairman ensures that the Board is

accessible to shareholders and an open channel of communication is cultivated.

The Company encloses the Annual Report to Shareholders and notice of AGM with regard to, amongst others,

details of the AGM, their entitlement to attend the AGM, the right to appoint proxy and also qualification of proxy.

The Company allows a shareholder to appoint a proxy who may not be a member of the Company. If the proxy

is not a member of the Company, he/she need not be an advocate, an approved company auditors or a person

approved by the Registrar of Companies.

To further promote participation of members through proxies, which in line with the AMLR, the Company had

amended its Articles of Association to include explicitly the right of proxies to speak at general meetings.

8.2 Encourage poll voting

At the 20th AGM of the Company held on 19 August 2016, all resolutions put forth for shareholders’ approval at the

meeting were voted by poll.

8.3 Effective communication and proactive engagement

At the 21st AGM, Directors were present in person to engage directly with, and be accountable to the shareholders

for their stewardship of the Company. The Directors, Management and external auditors were in attendance to

respond to the shareholders’ queries.

From the Company’s perspective, the AGM also serves as a forum for Directors and Management to engage with

the shareholders personally to understand their needs and seek their feedback. The Board welcomes questions

and feedback from shareholders during and at the end of shareholders’ meeting and ensures their queries are

responded in a proper and systematic manner.

COMPLIANCE STATEMENT

Overall, the Board is satisfied that the Company has applied the principles and recommendations of the MCCG 2017 throughout

the Group. However, the Board concurs that there are still areas that require further improvements and enhancements to

achieve excellence in corporate governance standards.

This statement is made in accordance with the resolution of the Board dated 13 July 2017.



Statement on Risk Management and Internal Control

INTRODUCTION

The Malaysian Code on Corporate Governance requires the Board of Directors (“Board”) of listed companies to maintain a sound

system of internal control to safeguard shareholders’ investments and the Group’s assets. The Board of the Company is pleased

to present this Statement on Risk Management and Internal Control, with respect to the state, nature and scope of the internal

control of the Group for the financial year ended 31 March 2017.

RESPONSIBILITY

The Board is ultimately responsible for the Group’s system of internal controls which includes the establishment of an

appropriate control environment and framework as well as reviewing its adequacy and integrity. Because of the limitations

that are inherent in any system of internal control, this system is designed to manage, rather than eliminate, the risk of failure

to achieve corporate objectives. Accordingly, it can only provide reasonable but not absolute assurance against material

misstatement or loss. The system of internal control covers, inter alia, risk management and financial, organisational, operational

and compliance controls.

The Board has delegated these aforementioned responsibilities to the Audit and Risk Management Committee whereby the

Audit and Risk Management Committee is assigned with the duty, through its terms of reference and the Risk Management

Framework approved by the Board, to provide assurance to the Board on the effectiveness of risk management and internal

control systems of the Group. Through the Audit and Risk Management Committee, the Board is kept informed of all significant

control issues brought to the attention of the Audit and Risk Management Committee by the Management, the internal audit

function and external auditors.

The Board is of the view that the risk management and internal control system in place for the period under review and up to

the date of issuance of the financial statements is adequate and effective to safeguard the interests of shareholders, customers,

employees and the Group’s assets.

RISK MANAGEMENT FRAMEWORK

The Board has delegated its authority to the Management to review and determine the level of risk tolerance. In the process

of applying a risks assessment approach, the Management from each division identifies the risks relating to their area; the

likelihood of the occurrence of the risks; the consequences; and the action plan to manage those risks. The risks that derived

from this process are then communicated at management level and reported to the Audit and Risk Management Committee.

The Board confirms that this process will continue throughout the period and up to the date of approval of this statement with

the aim of identifying, evaluating and managing the significant risks associated with all the business entities within the Group.

This process is regularly reviewed by the Board to ensure the adequacy and integrity of the Group’s internal control system

and accords with the guidance given in the Statement on Risk Management and Internal Control – Guidance for Directors of

Public Listed Companies, issued by the Task Force on internal control. The monitoring of the risk management by the Board

is enhanced by the internal audits carried out by the internal audit function with specific audit objectives and business risks

identified for each internal audit cycle based on the internal plan approved by the Audit and Risk Management Committee. An

external consultant was engaged to develop the key risk profile for a major subsidiary in 2014. No major change in control and

operations of the major subsidiary during the current financial period under review. The Board has engaged an independent

professional firm to identify key risks of major subsidiaries in the financial year ended 31 March 2017 and to review and

ascertain the controls identified have been carried out effectively to mitigate the risk exposure.

INTERNAL CONTROL

The Group currently relies on existing internal control mechanisms and its in-house knowledge management software to

provide management with the required level of assurance that the business is being operated in an orderly manner. This is

further enhanced by meetings between the Group’s Audit and Risk Management Committee members and its independent

external auditors to better understand the Group’s state of affairs and internal control.

The Group has engaged an independent professional firm for RM30,000 per year to provide outsourced Internal Audit services

that supports the Audit and Risk Management Committee in discharging its duties with respect to the adequacy and integrity of

the systems of internal controls within the Group.


Statement on Risk Management and Internal Controlcont’d

INTERNAL CONTROL cont’d

The Audit and Risk Management Committee considers reports from internal audit and from Management in its reviews on the

risks of monitoring and compliance procedures, ensuring that an appropriate mix of techniques is used to obtain the level of

assurance required by the Board. The Audit and Risk Management Committee presents its findings to the Board on a quarterly

basis or earlier, as appropriate. The minutes of the meetings are tabled to the Board.

The Board regularly receives and reviews management reports which highlight financial performance and the key operational

performance indicators. The Board deliberates on these matters and where necessary, ensures that actions are taken to resolve

issues promptly and satisfactorily. There is a structured budgeting and forecasting system in place where a detailed budgeting

process is established according to Business Plan for the next financial year which is to be approved by the Board of the

respective subsidiaries.

Other key elements of the Group’s internal control system include:

having clear internal policies and procedures in respect of Operations and Human Resources in place and regularly

updated to ensure that it maintains its effectiveness and supports the Group’s business activities at all times as the Group

continues to grow as well as to reflect the changes in the business environment, legal requirements or changes in the

business processes; and

clearly defined delegation of responsibilities to the Board, Management Executive and business operating units where

information critical to the achievement of the Group’s business objectives are provided by the Senior Management to the

Board for deliberation on a timely basis.

REVIEW OF THE ADEQUACY OF RISK MANAGEMENT AND INTERNAL CONTROL

For the financial year under review and up to the date of this statement, the Board has obtained assurance from the Executive

Directors and Chief Financial Officer that the Group’s risk management and internal control system is operating adequately and

effectively, in all material aspects.

There were no material losses incurred during the current financial period as a result of weaknesses in internal control. Together

with the Management, the Board continues to take pertinent measures to sustain and, where required, to improve the Group’s

governance, risk and control structures and processes in meeting the Group’s strategic objectives.


Additional Compliance Information

During the financial year ended 31 March 2017, the additional compliance information are as follow:-

1. Utilisation of Proceeds

Rights Issue with Warrants On 19 January 2012, Hong Leong Investment Bank Berhad announced that the Rights Issue with Warrants has been

completed following the listing of and quotation for 312,631,700 Rights Shares together with 234,473,775 Warrants on the ACE Market of Bursa Securities.

As at 31 March 2017, the status of the utilisation of proceeds raised from the Rights Issue with Warrants for the following purposes, details of which are disclosed in the table below:-

Purposes

Proposed

Utilisation

(RM’000)

Actual

Utilisation

(RM’000)

Revised timeframe

for Utilisation

Deviation

(RM’000)

/ % Explanation

Working capital requirements 9,004 9,004 Within 48 months (i)

Expansion of existing business 9,782 9,782 Within 24 months (i)

Working capital requirements for the

projects in Kemaman

5,000 682 Within 18 months (ii) 4,318 / 86.4 N1

Future projects in the property

industry

7,000 7,000 Within 24 months (ii)

Estimated expenses in relation to the

Rights Issue with Warrants

477 477 Within 1 month (i)

Total 31,263 26,945

Notes:-

N1 Pending utilisation.

(i) The timeframe was computed from the Rights Issue completion date, i.e 19 January 2012.

(ii) The timeframe is computed from the date of shareholders’ approval on the redeployment of this part of proceeds i.e. 19 January 2016.

2. Share Buy-Back

The Company does not have any scheme to buy back its own shares.

3. Options, Warrants or Convertible Securities

No options were issued or exercised by the Company during the financial year ended 31 March 2017. On 19 January 2012, the Company issued 312,631,700 Renounceable Right Issue Shares of RM0.10 each together with

234,473,775 Free Detachable Warrants (“Warrants”) on the ACE Market of Bursa Malaysia Securities Berhad. The Warrants had expired on 16 January 2017 (“Expiry Date”). No Warrants were exercised for the period from 1 April 2016 till the Expiry Date and the unexercised Warrants of 198,267,975 had lapsed on the Expiry Date.

4. Depository Receipts

The Company did not sponsor any depository receipts programme.

5. Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company and/or its subsidiaries.

6. Variation in Results

There was no variance of 10% or more between the audited results for the financial year ended 31 March 2017 and the unaudited results previously announced by the Company.


Additional Compliance Informationcont’d

7. Profit Guarantee

During the financial year, there was no profit guarantee received by the Company.

8. Material Contracts

There were no material contracts entered into by the Company nor any of its subsidiaries involving directors’ interest either still subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the previous financial year.

9. Non-audit Fees

The non-audit fees paid by the Group to external auditors or company affiliated to the external auditors’ firm for the financial year ended 31 March 2017 amounted to RM4,500.

10. Recurrent Related Party Transactions of Revenue Nature

The details of the transactions with related parties undertaken by the Company and its subsidiaries during the financial year ended 31 March 2017 are disclosed in Note 39 to the Financial Statements on page 103 of this Annual Report.

11. Employees Share Option Scheme

The Employees Share Option Scheme (“ESOS”) of the Company was approved by the shareholders at the Extraordinary General Meeting held on 3 December 2012 and is governed by the by-laws.

The ESOS was implemented on 15 January 2013 and is to be in force for a period of 5 years, subject however, to an extension at the discretion of the Board of Directors upon the recommendation of the Option Committee for a period up to 5 years commencing from the date of expiration of the original 5-year period.

No options were granted or exercised during the financial year ended 31 March 2017.

Table below summarised ESOS granted to Directors and Senior Management:-

Granted to Directors and Senior Management

During the financial

year ended

31 March 2017

Since commencement

of the ESOS on

15 January 2013

Aggregate maximum allocation in percentage - 50.0%

Actual percentage granted - 49.9%

There is no option offered/granted to the Non-Executive Directors pursuant to an ESOS.

12. Corporate Social Responsibility

The workplace

SKH encourages a work-life balance concept and harmony environment in work place. We offer career advancement, multicultural workplace, award employees for their outstanding performance during the financial year. In addition, SKH also encourages employees for continuous learning and development programs to enhance individual competencies in work that closes the gap between current and desired employee capability. Thoughout the year, SKH also practices organizing indoor gathering, birthday celebration and outdoor activities in every alternate month to enhance the rapports amongst the staff in SKH.

Health and safety at work

Health and safety at work are essential at workplace. The Company objective is to have an accident and illness free environment. We strive to ensure the workplace is safe and without risk to the health and welfare of all those in the premises. No reportable accidents or incidents occurred during the financial year ended 31 March 2017.


Statement of Directors’ Responsibilityin Relation to Financial Statements

The Directors are responsible to ensure that the financial statements of the Company and the Group are properly drawn up in

accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of

the Companies Act, 2016 in Malaysia (“the Act”), so as to give a true and fair view of the financial position of the Company and

the Group as at the end of the financial year and of the financial performance and cash flows of the Company and the Group for

the financial year then ended.

The Directors are satisfied that in preparing the financial statements of the Company and the Group for the year ended 31

March 2017, the Company and the Group have adopted suitable accounting policies and applied them consistently, prudently

and reasonably. The Directors also considered that the relevant applicable approved accounting standards have been followed

in the preparation of the financial statements. The financial statements of the Company and the Group have been prepared on

the going concern basis.

The Directors are satisfied that the Company and the Group keep sufficient accounting and other records and the registers

required by the Act have been properly kept in accordance with the provisions of the Act.

Financial StatementsDIRECTORS’ REPORT

STATEMENT BY DIRECTORS

STATUTORY DECLARATION

INDEPENDENT AUDITORS‘ REPORT

STATEMENTS OF FINANCIAL POSITION

STATEMENTS OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

STATEMENTS OF CHANGES IN EQUITY

STATEMENTS OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

39

44

44

45

49

51

52

55

58


The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial

year ended 31 March 2017.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set

out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the

financial year.

RESULTS

The Group The Company

RM RM

Profit after taxation for the financial year 1,553,358 667,715

Attributable to:-

Owners of the Company 1,551,079 667,715

Non-controlling interests 2,279 -

1,553,358 667,715

DIVIDENDS

No dividend was recommended by the directors for the financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the

financial statements.

ISSUES OF SHARES AND DEBENTURES

During the financial year:-

(a) there were no changes in the issued share capital of the Company; and

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

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the

Company.

EMPLOYEES’ SHARE OPTION SCHEME

The Employees’ Share Option Scheme of the Company (“ESOS”) is governed by the ESOS By-Laws and was approved by

shareholders on 3 December 2012. The ESOS is be in force for a period of 5 years effective from 15 January 2013.

The details of the ESOS are disclosed in Note 19.3 to the financial statements.

Directors’ Report


WARRANTS 2012/2017

Pursuant to a Deed Poll dated 5 December 2011 (“Deed Poll”), the Company issued 234,473,775 new Warrants (“Warrants”) in

conjunction with the issue of 312,631,700 renounceable rights issue at a nominal value of RM0.10 in 2012.

The principal terms of the Warrants as stated in the Deed Poll are as follows:

(a) Each Warrant entitles the registered holder, at any time during the exercise period, to subscribe for one (1) new ordinary

share at the exercise price of RM0.10 per Warrant, subject to adjustments in accordance with the provisions of the Deed

Poll.

(b) Subject to the provisions of the Deed Poll, the exercise price and/or the number of Warrants are subject to adjustment in

accordance with the provisions set out in the Deed Poll.

(c) If the Company is wound up or an order has been granted for such compromise or arrangement, all Exercise Rights which

are not exercised within six weeks of the passing of the resolution for winding-up or within six weeks after the granting

of the court order approving the winding-up, compromise or arrangement (other than a consolidation, amalgamation or

merger in which the Company is the continuing corporation), will cease to be valid for any purpose.

(d) The exercise period is approximately 5 years from the date of issue to the expiry date on 16 January 2017.

(e) Upon expiry of the exercise period, any Warrants which have not been exercised and delivered to the registrar will lapse

and cease to be valid for any purpose.

At the end of the reporting period, the number of Warrants not exercised amounted to 198,267,975 and the Warrants lapsed on

16 January 2017.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to

ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment

losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had

been made for impairment losses on receivables.

At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad

debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the

Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to

ascertain that any current assets, which were unlikely to be realised in the ordinary course of business, including their values as

shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be

expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the

current assets in the financial statements misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the

existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

Directors’ Reportcont’d


CONTINGENT AND OTHER LIABILITIES

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

(a) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which

secures the liabilities of any other person; or

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

No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable

within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may

substantially affect the ability of the Group and of the Company to meet their obligations when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the

financial statements of the Group and of the Company which would render any amount stated in the financial statements

misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the

directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or

event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations

of the Group and of the Company for the financial year in which this report is made.

DIRECTORS

The names of directors of the Company who served during the financial year until the date of this report are as follows:-

Tan Ooi Jin

Lee Li Chain

Dato’ Chairil Nazri Bin Ahmad

Yap Kien Ming

Tan Tzu Pin

Sam Kok Hong

Leong Kah Mun (Appointed on 11.11.2016)

Lim Bun Hwa (Resigned on 1.9.2016)

Dato’ Low Liong Kian (Resigned on 24.5.2017)

The names of directors of the Company’s subsidiaries who served during the financial year until the date of this report, not

including those directors mentioned above, are as follows:-

Chong Aik Fun

Henry Lee Yit Chain

Liaw Yit Sun

Lim Siew Ping

Ng Pak Yoong

Pang Kim Moon

Wong Khee Haur



DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in

shares in the Company and its related corporations during the financial year are as follows:-

Number of Ordinary Shares

At

1.4.2016 Bought Sold

At

31.3.2017

The Company

Indirect Interest

Dato’ Low Liong Kian 164,280,002 * - (163,280,002) @ 1,000,000

Tan Tzu Pin 163,280,002 # - (163,280,002) ^ -

* Deemed interested under Section 8 of the Companies Act 2016 by virtue of his direct interests in Master Knowledge Sdn. Bhd. and his spouse

direct interests in the Company.

@ Through the disposal of his shareholdings in Master Knowledge Sdn. Bhd.

# Deemed interested under Section 8 of the Companies Act 2016 by virtue of his direct interests in Master Knowledge Sdn. Bhd.

^ Through the disposal of his shareholdings in Master Knowledge Sdn. Bhd.

The other directors holding office at the end of the financial year had no interest in shares in the Company or its related

corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial period, no director has received or become entitled to receive any benefit (other than

benefits included in the aggregate amount of remuneration received or due and receivable by directors shown in the financial

statements or the fixed salary of a full-time employee of the Company or related corporations) by reason of a contract made by

the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in

which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions

entered into in the ordinary course of business with companies in which certain directors have substantial financial interests as

disclosed in Note 39 to the financial statements.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is

to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other

body corporate.

DIRECTORS’ REMUNERATION

The details of the directors’ remuneration paid or payable to the directors of the Company during the financial year are disclosed

in Note 38 to the financial statements.

INDEMNITY AND INSURANCE COST

During the financial year, there is no indemnity coverage and insurance premium paid for the directors of the Group.

SUBSIDIARIES

The details of the Group’s subsidiaries are disclosed in Note 5 to the financial statements.



SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

The significant event during the financial year is disclosed in Note 42 to the financial statements.

SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD

The significant events occurring after the reporting period are disclosed in Note 43 to the financial statements.

AUDITORS

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

The details of the auditors’ remuneration are disclosed in Note 28 to the financial statements.

To the extent permitted by law, the Company has agreed to indemnify its auditors as part of the terms of its audit engagement

against any claims by third parties arising from the audit. No payment has been made to indemnify the auditors during or since

the financial year.

Signed in accordance with a resolution of the directors dated 13 July 2017.

Tan Ooi Jin

Lee Li Chain



We, Tan Ooi Jin and Lee Li Chain, being two of the directors of SKH Consortium Berhad, state that, in the opinion of the

directors, the financial statements set out on pages 49 to 116 are drawn up in accordance with Malaysian Financial Reporting

Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to

give a true and fair view of the financial position of the Group and of the Company as of 31 March 2017 and of their financial

performance and cash flows for the financial year ended on that date.

The supplementary information set out in Note 45, which is not part of the financial statements, is prepared in all material

respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the

Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of

Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed in accordance with a resolution of the directors dated 13 July 2017.

Tan Ooi Jin Lee Li Chain

I, Lee Li Chain, I/C No. 750916-08-5458, being the director primarily responsible for the financial management of SKH

Consortium Berhad do solemnly and sincerely declare that the financial statements set out on pages 49 to 116 are, to the best

of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by

virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by

Lee Li Chain, I/C No. 750916-08-5458,

at Kuala Lumpur in the Federal Territory

on this 13 July 2017.

Before me Lee Li Chain

Commissioner for Oaths

Lai Din (W668)

Statement by DirectorsPursuant to Section 251(2) of the Companies Act 2016

Statutory DeclarationPursuant to Section 251(1)(B) of the Companies Act 2016


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of SKH Consortium Berhad, which comprise the statements of financial position as

at 31 March 2017 of the Group and of the Company, and the statements of profit or loss and other comprehensive income,

statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then

ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 49 to

116.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of

the Company as at 31 March 2017, and of their financial performance and their cash flows for the financial year then ended in

accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of

the Companies Act 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on

Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the

Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to

provide a basis for our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and

Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’

Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance

with the By-Laws and the IESBA Code.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial

statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our

audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do

not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Impairment of goodwill

Refer to Note 11 in the financial statements

Key Audit Matter How our audit addressed the key audit matter

We focused on this area because the Group carries

significant goodwill. The impairment assessment for

goodwill is significant to our audit as it involves significant

management judgement and is based on assumptions

that are affected by expected future market and economic

conditions.

Our procedures included, amongst others:

- Tested the value-in-use model for goodwill including

challenging management forecast and other

assumptions including discount rate and long-term

growth rates.

- Compared previous cash flow projections to actual

results to assess the reasonableness of assumptions

used in the cash flow projections.

- Performed a sensitivity analysis over revenue growth

rate and discount rate used in deriving the value-in-

use to assess the potential impact of a reasonable

possible change to any of these assumptions on the

recoverable amount of goodwill.

Independent Auditors’ Report To the Members of SKH Consortium Berhad (Incorporated in Malaysia)

Company No: 383028 - D


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS cont’d

Key Audit Matters cont’d

Recoverability of trade receivables

Refer to Note 13 in the financial statements

Key Audit Matter How our audit addressed the key audit matter

The outstanding trade receivables of the Group amounted

to approximately RM12 million.

Management recognised the allowance of impairment

losses on trade receivables based on specific known facts

or customers’ ability to pay.

The determination of whether trade receivables are

recoverable involves significant management judgement.

Our procedures included, amongst others:

- Reviewed the ageing analysis of receivables and

tested its reliability.

- Reviewed subsequent cash collections for major

receivables and overdue amounts.

- Examined other evidence including customers’

correspondences, proposed settlement plan and

repayment schedule.

- Evaluated the reasonableness and adequacy of

the allowance for impairment loss recognised for

identified exposures.

- Tested the adequacy of the Group’s impairment

of trade receivables by assessing the relevant

assumptions and historical data from the Group’s

previous collection experience.

Information Other than the Financial Statements and Auditors’ Report Thereon

The directors of the Company are responsible for the other information. The other information comprises the information

included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’

report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not

express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of

the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are

required to report that fact. We have nothing to report in this regard.

Responsibilities of Directors for the Financial Statements

The directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company

that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting

Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for such internal

control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the

Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s

and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using

the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease

operations, or have no realistic alternative but to do so.

Independent Auditors’ Report To the Members of SKH Consortium Berhad (Incorporated in Malaysia)Company No: 383028 - Dcont’d


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS cont’d

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company

as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our

opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they

could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As a part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing,

we exercise professional judgement and maintain professional skepticism throughout the audit. We also:-

whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence

that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement

resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal control.

in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the

Company’s internal control.

disclosures made by the directors.

evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt

on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists,

we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group

and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit

evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the

Company to cease to continue as a going concern.

including the disclosures, and whether the financial statements of the Group and of the Company represent the

underlying transactions and events in a manner that achieves fair presentation.

within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction,

supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant

audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding

independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on

our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of

the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters.

We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when,

in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse

consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Independent Auditors’ Report To the Members of SKH Consortium Berhad (Incorporated in Malaysia)

Company No: 383028 - Dcont’d


OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 45 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad

and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information

in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the

Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute

of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary

information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia

Securities Berhad.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act

2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Crowe Horwath Ngiam Mia Teck

Firm No: AF 1018 Approval No: 03000/07/2018 J

Chartered Accountants Chartered Accountant

13 July 2017

Kuala Lumpur

Independent Auditors’ Report To the Members of SKH Consortium Berhad (Incorporated in Malaysia)Company No: 383028 - Dcont’d



31.3.2017 31.3.2016 31.3.2017 31.3.2016

Note RM RM RM RM

ASSETS

NON-CURRENT ASSETS

Investments in subsidiaries 5 - - 15,568,000 13,568,004

Property and equipment 6 9,337,591 9,053,818 2,250,091 2,325,961

Investment property 7 1,337,000 1,430,600 - -

Trade receivable 13 2,432,199 - - -

Lease receivable 8 - 115,796 - -

Other investments 9 - 199,000 - 199,000

Other intangible assets 10 - 892,857 - -

Goodwill on consolidation 11 5,763,879 5,763,879 - -

18,870,669 17,455,950 17,818,091 16,092,965

CURRENT ASSETS

Inventories 12 17,385,945 17,732,867 - -

Trade receivables 13 10,006,421 11,197,406 - -

Other receivables, deposits and prepayments 14 15,214,812 14,750,864 27,275 24,685

Lease receivable 8 - 47,855 - -

Amounts owing by subsidiaries 15 - - 33,830,979 35,680,599

Tax refundable 1,313,600 119,613 - -

Short-term investments 16 13,846,188 13,370,993 13,846,188 13,370,993

Cash and bank balances 11,371,592 13,706,487 4,805,312 4,465,206

69,138,558 70,926,085 52,509,754 53,541,483

Asset classified as held for sale 17 - 1,197,916 - -

69,138,558 72,124,001 52,509,754 53,541,483

TOTAL ASSETS 88,009,227 89,579,951 70,327,845 69,634,448

Statements of Financial Position At 31 March 2017

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



31.3.2017 31.3.2016 31.3.2017 31.3.2016

Note RM RM RM RM

EQUITY AND LIABILITIES

EQUITY

Share capital 18 55,444,175 55,444,175 55,444,175 55,444,175

Share premium 19 5,323,561 5,323,561 5,323,561 5,323,561

Warrants reserve 19 - 10,052,186 - 10,052,186

Retained profits/(Accumulated losses) 5,309,369 (6,293,896) 9,429,255 (1,290,646)

Total equity attributable to owners of the

Company 66,077,105 64,526,026 70,196,991 69,529,276

Non-controlling interests (109,170) (111,449) - -

TOTAL EQUITY 65,967,935 64,414,577 70,196,991 69,529,276

NON-CURRENT LIABILITIES

Hire purchase payables 20 87,342 114,947 - -

Deferred tax liabilities 21 65,000 30,000 - -

152,342 144,947 - -

CURRENT LIABILITIES

Trade payables 22 21,326,455 24,143,269 - -

Other payables and accruals 23 536,048 834,722 130,854 105,172

Hire purchase payables 20 26,447 25,053 - -

Provision for taxation - 17,383 - -

21,888,950 25,020,427 130,854 105,172

TOTAL LIABILITIES 22,041,292 25,165,374 130,854 105,172

TOTAL EQUITY AND LIABILITIES 88,009,227 89,579,951 70,327,845 69,634,448

NET ASSETS PER SHARE (RM) 24 0.12 0.12

Statements of Financial Position At 31 March 2017cont’d




1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

Note RM RM RM RM

REVENUE 25 136,555,441 197,654,560 2,300,000 4,526,400

DIRECT COSTS 26 (120,298,407) (177,573,340) - -

GROSS PROFIT 16,257,034 20,081,220 2,300,000 4,526,400

OTHER INCOME 27 1,314,444 1,036,469 485,795 640,997

17,571,478 21,117,689 2,785,795 5,167,397

ADMINISTRATIVE EXPENSES 28 (13,259,065) (25,638,444) (1,773,629) (2,499,528)

DISTRIBUTION COSTS (298,609) (654,154) - -

OTHER EXPENSES 29 (2,107,761) (14,209,789) (344,451) (14,604,727)

FINANCE COSTS 30 (5,678) (33,910) - -

PROFIT/(LOSS) BEFORE TAXATION 1,900,365 (19,418,608) 667,715 (11,936,858)

INCOME TAX EXPENSE 31 (347,007) (1,314,957) - -

PROFIT/(LOSS) AFTER TAXATION 1,553,358 (20,733,565) 667,715 (11,936,858)

OTHER COMPREHENSIVE EXPENSES

Item That May be Reclassified Subsequently to

Profit or Loss

Foreign currency translation differences - (259) - -

TOTAL COMPREHENSIVE INCOME/(EXPENSES)

FOR THE FINANCIAL YEAR/PERIOD 1,553,358 (20,733,824) 667,715 (11,936,858)

PROFIT/(LOSS) AFTER TAXATION

ATTRIBUTABLE TO:-

Owners of the Company 1,551,079 (20,566,200) 667,715 (11,936,858)

Non-controlling interests 2,279 (167,365) - -

1,553,358 (20,733,565) 667,715 (11,936,858)

TOTAL COMPREHENSIVE INCOME/(EXPENSES)

FOR THE FINANCIAL YEAR/PERIOD

ATTRIBUTABLE TO:-

Owners of the Company 1,551,079 (20,566,319) 667,715 (11,936,858)

Non-controlling interests 2,279 (167,505) - -

1,553,358 (20,733,824) 667,715 (11,936,858)

EARNINGS/(LOSS) PER SHARE (SEN)

- Basic 32 0.28 (4.29)

- Diluted 32 0.28 (4.29)

Statements of Profit or Loss and Other Comprehensive Income

For the Financial Year Ended 31 March 2017



Share

Capital

Share

Premium

Warrants

Reserve

Foreign

Exchange

Translation

Reserve

Employees’

Share

Option

Reserve

(Accumulated

Losses)/

Retained

Profit

Attributable

to Owners

of the

Company

Non-

Controlling

Interests Total

The Group RM RM RM RM RM RM RM RM RM

Balance at 1.1.2015 87,018,289 4,054,751 10,145,996 (767) 1,200,000 (29,890,538) 72,527,731 627,665 73,155,396

Contributions by and

distributions to owners

of the Company:-

Conversion of warrants 185,030 - - - - - 185,030 - 185,030

Disposal of subsidiaries - - - 886 - (886) - (122,025) (122,025)

Employees’ share option

lapsed - - - - (1,225,000) 1,225,000 - - -

Exercise of ESOS 11,750,000 1,175,000 - - (1,175,000) - 11,750,000 - 11,750,000

Reclassification of

warrants reserve upon

conversion of warrants - 93,810 (93,810) - - - - - -

Share capital reduction (43,509,144) - - - - 43,509,144 - - -

Share option granted

under ESOS - - - - 1,200,000 - 1,200,000 - 1,200,000

(31,574,114) 1,268,810 (93,810) 886 (1,200,000) 44,733,258 13,135,030 (122,025) 13,013,005

Changes in a subsidiary’s

ownership interests

that do not result in a

loss of control - - - - - (570,416) (570,416) (449,584) (1,020,000)

Total transactions with

owners (31,574,114) 1,268,810 (93,810) 886 (1,200,000) 44,162,842 12,564,614 (571,609) 11,993,005

Loss after taxation - - - - - (20,566,200) (20,566,200) (167,365) (20,733,565)

Other comprehensive

expenses:

- Foreign currency

translation differences - - - (119) - - (119) (140) (259)

Total comprehensive

expenses - - - (119) - (20,566,200) (20,566,319) (167,505) (20,733,824)

Balance at 31.3.2016 55,444,175 5,323,561 10,052,186 - - (6,293,896) 64,526,026 (111,449) 64,414,577

Statements of Changes in EquityFor the Financial Year Ended 31 March 2017



Share

Capital

Share

Premium

Warrants

Reserve

(Accumulated

Losses)/

Retained

Profit

Attributable

to Owners

of the

Company

Non-

Controlling

Interests Total

The Group RM RM RM RM RM RM RM

Balance at

31.3.2016/1.4.2016 55,444,175 5,323,561 10,052,186 (6,293,896) 64,526,026 (111,449) 64,414,577

Reclassification of

warrants reserve

upon expiry of

warrant 2012/2017 - - (10,052,186) 10,052,186 - - -

Profit after taxation,

representing total

comprehensive

income for the

financial year - - - 1,551,079 1,551,079 2,279 1,553,358

Balance at 31.3.2017 55,444,175 5,323,561 - 5,309,369 66,077,105 (109,170) 65,967,935

Statements of Changes in EquityFor the Financial Year Ended 31 March 2017

cont’d



Non-Distributable Distributable

Share

Capital

Share

Premium

Warrants

Reserve

Employees’

Share

Option

Reserve

Accumulated

Losses Total

The Company RM RM RM RM RM RM

Balance at 1.1.2015 87,018,289 4,054,751 10,145,996 1,200,000 (34,087,932) 68,331,104

Contributions by and

distributions to owners

of the Company:-

Employees’ share option

lapsed - - - (1,225,000) 1,225,000 -

Share option granted

under ESOS - - - 1,200,000 - 1,200,000

Share capital reduction (43,509,144) - - - 43,509,144 -

Exercise of ESOS 11,750,000 1,175,000 - (1,175,000) - 11,750,000

Conversion of warrants 185,030 - - - - 185,030

Reclassification of


conversion of warrants - 93,810 (93,810) - - -

(31,574,114) 1,268,810 (93,810) (1,200,000) 44,734,144 13,135,030

Loss after taxation,

representing total

comprehensive

expenses for the

financial period - - - - (11,936,858) (11,936,858)

Balance at

31.3.2016/1.4.2016 55,444,175 5,323,561 10,052,186 - (1,290,646) 69,529,276

Reclassification of


expiry of warrant

2012/2017 - - (10,052,186) - 10,052,186 -

Profit after taxation,

representing total

comprehensive income

for the financial year - - - - 667,715 667,715

Balance at 31.3.2017 55,444,175 5,323,561 - - 9,429,255 70,196,991

Statements of Changes in EquityFor the Financial Year Ended 31 March 2017 cont’d




1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

Note RM RM RM RM

CASH FLOWS FOR OPERATING ACTIVITIES

Profit/(Loss) before taxation 1,900,365 (19,418,608) 667,715 (11,936,858)

Adjustments for:-

Amortisation of other intangible assets 142,857 526,310 - -

Bad debts written off - 6,238 - -

Depreciation of property and equipment 992,311 2,537,420 175,451 213,851

Depreciation of investment property 93,600 46,800 - -

Equipment written off - 25 - 25

Impairment losses on:

- amount owing by a subsidiary - - - 9,864,283

- equipment - 4,361,620 - -

- goodwill on consolidation - 1,420,356 - -

- investments in subsidiaries - - - 4,132,000

- other intangible assets 750,000 1,430,833 - -

- other receivables - 16,712 - -

- trade receivables 102,768 4,191,459 - -

Interest expense 5,678 33,910 - -

Loss on disposal of subsidiaries - 195,282 - 394,568

Share-based payment arising from ESOS 33 - 1,200,000 - -

Dividend income - - (2,300,000) (4,500,000)

Gain on disposal of asset held for sale (119,309) - - -

Gain on disposal of equipment (1,792) - - -

Loss/(Gain) on disposal of other investments 169,000 (41,000) 169,000 (41,000)

Gain from a bargain purchase - (1,815) - -

Interest income (496,392) (685,037) (475,195) (571,677)

Reversal of impairment losses on trade

receivables (471,494) (35,850) - -

Unrealised gain on foreign exchange, net - (18,288) - -

Operating profit/(loss) before working capital

changes/balance carried forward 3,067,592 (4,233,633) (1,763,029) (2,444,808)

Statements of Cash FlowsFor the Financial Year Ended 31 March 2017




1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

Note RM RM RM RM

Operating profit/(loss) before working capital

changes/balance brought forward 3,067,592 (4,233,633) (1,763,029) (2,444,808)

Decrease in inventories 346,922 938,366 - -

(Increase)/Decrease in trade and other

receivables (1,336,436) (4,992,192) (2,590) 675,712

(Decrease)/Increase in trade and other payables (3,115,488) 89,569 25,682 (328,770)

CASH FLOWS FOR OPERATIONS (1,037,410) (8,197,890) (1,739,937) (2,097,886)

Income tax paid (1,523,377) (1,540,726) - -

Income tax refunded - 122,246 - -

Interest paid (5,678) (33,910) - -

NET CASH FOR OPERATING ACTIVITIES (2,566,465) (9,650,280) (1,739,937) (2,097,866)

CASH FLOWS FROM/(FOR) INVESTING

ACTIVITIES

Acquisition of subsidiaries, net of cash and cash

equivalents acquired 35 - 3,465 - (4)

Additional investment in an existing subsidiary - (1,020,000) (1,999,996) (1,020,000)

Repayments from/(Advances to) subsidiaries - - 1,849,620 (12,857,762)

Disposal of subsidiaries, net of cash 36 - (1,088,258) - 555,000

Dividend received - - 2,300,000 4,500,000

Interest received 496,392 685,037 475,195 571,677

Net withdrawal of deposits with licensed banks - 1,038,539 - -

Proceeds from disposal of asset held for sell 1,317,225 - - -

Proceeds from disposal of equipment 1,792 - - -

Proceeds from disposal of other investments 30,000 92,000 30,000 92,000

Purchase of intangible assets - (2,200,000) - -

Purchase of property and equipment 34 (1,276,084) (4,682,314) (99,581) -

Repayment from lease receivable 163,651 56,699 - -

NET CASH FROM/(FOR) INVESTING

ACTIVITIES 732,976 (7,114,832) 2,555,238 (8,159,089)

BALANCE CARRIED FORWARD (1,833,489) (16,765,112) 815,301 (10,256,955)

Statements of Cash FlowsFor the Financial Year Ended 31 March 2017cont’d




1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

Note RM RM RM RM

BALANCE BROUGHT FORWARD (1,833,489) (16,765,112) 815,301 (10,256,955)

CASH FLOWS(FOR)/FROM FINANCING

ACTIVITIES

Net repayment of hire purchase payables (26,211) (62,960) - -

Net repayment of bankers’ acceptances - (2,253,000) - -

Proceeds from exercise of ESOS - 11,750,000 - 11,750,000

Proceeds from conversion of warrants - 185,030 - 185,030

NET CASH (FOR)/FROM FINANCING

ACTIVITIES (26,211) 9,619,070 - 11,935,030

NET (DECREASE)/INCREASE IN CASH AND

CASH EQUIVALENTS (1,859,700) (7,146,042) 815,301 1,678,075

EFFECT OF FOREIGN EXCHANGE

TRANSLATION - 14,230 - -

CASH AND CASH EQUIVALENTS AT

BEGINNING OF THE FINANCIAL YEAR/

PERIOD 27,077,480 34,209,292 17,836,199 16,158,124

CASH AND CASH EQUIVALENTS AT END OF

THE FINANCIAL YEAR/PERIOD 37 25,217,780 27,077,480 18,651,500 17,836,199

Statements of Cash FlowsFor the Financial Year Ended 31 March 2017

cont’d



1. GENERAL INFORMATION

The Company is a public company limited by shares, incorporated and domiciled in Malaysia. The registered office and

principal place of business are as follows:-

Registered office : No. 9A, Jalan Medan Tuanku,

Medan Tuanku,

50300 Kuala Lumpur,


Principal place of business : C-01-3, Block C, Plaza Glomac,

No. 6, Jalan SS7/19, Kelana Jaya,

47301 Petaling Jaya,

Selangor.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the

directors dated 13 July 2017.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries

are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities

during the financial year.

3. BASIS OF PREPARATION

The financial statements of the Group are prepared under the historical cost convention and modified to include other

bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian

Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the

Companies Act 2016 in Malaysia.

3.1 During the current financial year, the Group has adopted the following new accounting standards and

interpretations (including the consequential amendments, if any):-

MFRSs and/or IC Interpretations (Including The Consequential Amendments)

MFRS 14 Regulatory Deferral Accounts

Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities – Applying the Consolidation Exception

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations

Amendments to MFRS 101: Disclosure Initiative

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation

Amendments to MFRS 116 and MFRS 141: Agriculture – Bearer Plants

Amendments to MFRS 127: Equity Method in Separate Financial Statements

Annual Improvements to MFRSs 2012 – 2014 Cycle

The adoption of the above accounting standards and/or interpretations (including the consequential amendments)

did not have any material impact on the Group’s financial statements.

Notes to the Financial StatementsFor the Financial Year Ended 31 March 2017



cont’d

3. BASIS OF PREPARATION cont’d

3.2 The Group has not applied in advance the following accounting standards and/or interpretations (including the

consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but

are not yet effective for the current financial year:-

MFRSs and/or IC Interpretations (Including The Consequential Amendments) Effective Date

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) 1 January 2018

MFRS 15 Revenue from Contracts with Customers 1 January 2018

MFRS 16 Leases 1 January 2019

IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018

Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018

Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance

Contracts

1 January 2018

Amendments to MFRS 10 and MFRS 128 (2011): Sale or Contribution of Assets between an

Investor and its Associate or Joint Venture

Deferred until

further notice

Amendments to MFRS 15: Effective Date of MFRS 15 1 January 2018

Amendments to MFRS 15: Clarifications to MFRS 15 ‘Revenue from Contracts with Customers’ 1 January 2018

Amendments to MFRS 107: Disclosure Initiative 1 January 2017

Amendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017

Amendments to MFRS 140 – Transfers of Investment Property 1 January 2018

Annual Improvements to MFRS Standards 2014 – 2016 Cycles:

Amendments to MFRS 12: Clarification of the Scope of Standard 1 January 2017

Annual Improvements to MFRS Standards 2014 – 2016 Cycles:

Amendments to MFRS 1: Deletion of Short-term Exemptions for First- time Adopters

Amendments to MFRS 128: Measuring an Associate or Joint Venture at Fair Value 1 January 2017

The adoption of the above accounting standards and/or interpretations (including the consequential amendments,

if any) is expected to have no material impact on the financial statements of the Group upon their initial application

except as follows:-

MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces the existing guidance in MFRS 139 and introduces a revised

guidance on the classification and measurement of financial instruments, including a single forward-looking

‘expected loss’ impairment model for calculating impairment on financial assets, and a new approach to hedge

accounting. Under this MFRS 9, the classification of financial assets is driven by cash flow characteristics and the

business model in which a financial asset is held. Therefore, it is expected that the Group’s investments in unquoted

shares that are currently stated at cost less accumulated impairment losses will be measured at fair value through

other comprehensive income upon the adoption of MFRS 9. The Group is currently assessing the financial impact of

adopting MFRS 9.

MFRS 15 establishes a single comprehensive model for revenue recognition and will supersede the current

revenue recognition guidance and other related interpretations when it becomes effective. Under MFRS 15, an

entity shall recognise revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the distinct

promised goods or services underlying the particular performance obligation is transferred to the customers. The

amendments to MFRS 15 further clarify the concept of ‘distinct’ for the purposes of this accounting standard. In

addition, extensive disclosures are required by MFRS 15. The Group anticipates that the application of MFRS 15 in

the future may have an impact on the amounts reported and disclosures made in the financial statements. However,

it is not practicable to provide a reasonable estimate of the financial impacts of MFRS 15 until the Group performs a

detailed review.

The amendments to MFRS 107 require an entity to provide disclosures that enable users of financial statements to

evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and

non-cash changes. Accordingly, there will be no financial impact on the financial statements of the Group upon its

initial application. However, additional disclosure notes on the statements of cash flows may be required.


Notes to the Financial StatementsFor the Financial Year Ended 31 March 2017cont’d

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the directors and management and are based on historical

experience and other factors, including expectations of future events that are believed to be reasonable under the

circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and

disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities,

income and expenses are discussed below:-

(a) Depreciation of Property and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property and

equipment are based on commercial factors which could change significantly as a result of technical

innovations and competitors’ actions in respond to the market conditions. The Group anticipates that the

residual values of its property and equipment will be insignificant. As a result, residual values are not being

taken into consideration for the computation of the depreciable amount. Changes in the expected level of

usage and technological development could impact the economic useful lives and the residual values of

these assets, therefore future depreciation charges could be revised.

(b) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different

from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing

tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final

outcome of these matters is different from the amounts that were initially recognised, such difference will

impact the income tax expense and deferred tax balances in the year in which such determination is made.

(c) Impairment of Non-financial Assets

When the recoverable amount of an asset is determined based on the estimate of the value in use of the

cash-generating unit to which the asset is allocated, the management is required to make an estimate of the

expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to

determine the present value of those cash flows.

(d) Amortisation of Development Costs

The estimates for the residual values, useful lives and related amortisation charges for the development costs

are based on commercial factors which could change significantly as a result of technical innovations and

competitors’ actions in response to the market conditions. The Group anticipates that the residual values of

its development costs will be insignificant. As a result, residual values are not being taken into consideration

for the computation of the amortisation amount. Changes in the expected level of usage and technological

development could impact the economic useful lives and the residual values of these assets, therefore future

amortisation charges could be revised.

(e) Write-down of Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These

reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the

valuation of inventories.

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

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another

portion that is held for use in the production or supply of goods or services or for administrative purposes. If

these portions could be sold separately (or leased out separately under a finance lease), the Group accounts

for the portions separately. If the portions could not be sold separately, the property is an investment

property only if an insignificant portion is held for use in the production or supply of goods or services or for

administrative purposes.



cont’d

4. SIGNIFICANT ACCOUNTING POLICIES cont’d

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS cont’d

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

Judgement is made on an individual property basis to determine whether ancillary services are so significant

that a property does not qualify as investment property.

(g) Impairment of Available-for-sale Financial Assets

The Group reviews its available-for-sale financial assets at the end of each reporting period to assess whether

they are impaired. The Group also records impairment loss on available-for-sale equity investments when

there has been a significant or prolonged decline in the fair value below their cost. The determination of what

is “significant” or “prolonged” requires judgement. In making this judgement, the Company evaluates, among

other factors, historical share price movements and the duration and extent to which the fair value of an

investment is less than its cost.

(h) Classification of Leasehold Land

The classification of leasehold land as a finance lease or an operating lease requires the use of judgement in

determining the extent to which risks and rewards incidental to its ownership lie. Despite the fact that there

will be no transfer of ownership by the end of the lease term and that the lease term does not constitute the

major part of the indefinite economic life of the land, management considered that the present value of the

minimum lease payments approximated to the fair value of the land at the inception of the lease. Accordingly,

management judged that the Group has acquired substantially all the risks and rewards incidental to the

ownership of the land through a finance lease.

(i) Impairment of Goodwill

Goodwill is tested for impairment annually and at other times when such indicators exists. This requires

management to estimate the expected future cash flows of the cash-generating unit to which goodwill is

allocated and to apply a suitable discount rate in order to determine the present value of those cash flows.

The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discount

rate used. If the expectation is different from the estimation, such difference will impact the carrying value of

goodwill.

(j) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired.

Management specifically reviews its loan and receivables financial assets and analyses historical bad debts,

customer concentrations, customer creditworthiness, current economic trends and changes in the customer

payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated

based on historical loss experience for assets with similar credit risk characteristics. If the expectation is

different from the estimation, such difference will impact the carrying value of receivables.

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

The Group carries certain financial assets and financial liabilities at fair value, which requires extensive use

of accounting estimates and judgement. While significant components of fair value measurement were

determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group

uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect

profit and/or equity.




4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS cont’d

(l) Share-based Payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value

of the equity investments at the date at which they are granted. The estimating of the fair value requires

determining the most appropriate valuation model for a grant of equity instruments, which is dependent

on the terms and conditions of the grant. This also requires determining the most appropriate inputs

to the valuation model including the expected life of the option volatility and dividend yield and making

assumptions about them.

4.2 BASIS OF CONSOLIDATION

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up

to the end of the reporting period.

Subsidiaries are entities (including structured entities, if any) controlled by the Group. The Group controls an

entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has

the ability to affect those returns through its power over the entity. Potential voting rights are considered when

assessing control only when such rights are substantive. The Group also considers it has de facto power over an

investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of

the investee that significantly affect the investee’s return.

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on

which control ceases, as appropriate.

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup losses may

indicate an impairment that requires recognition in the consolidated financial statements. Where necessary,

adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with

those of the Group.

(a) Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method,

the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities

incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred

includes the fair value of any asset or liability resulting from a contingent consideration arrangement.

Acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss

when incurred.

In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured

to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-

controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets at the date of

acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.

(b) Non-controlling Interests

Non-controlling interests are presented within equity in the consolidated statement of financial position,

separately from the equity attributable to owners of the Company. Profit or loss and each component of

other comprehensive income are attributed to the owners of the Company and to the non-controlling

interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-

controlling interests having a deficit balance.



cont’d


4.2 BASIS OF CONSOLIDATION cont’d

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

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

(d) Loss of Control

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

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

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

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

4.3 GOODWILL

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities at the date of acquisition is recorded as goodwill.

Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised as a gain in profit or loss immediately.

4.4 FUNCTIONAL AND FOREIGN CURRENCIES

(a) Functional and Presentation Currency

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

The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional and presentation currency.

(b) Transactions and Balances

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




4.5 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised in the statements of financial position when the Group has

become a party to the contractual provisions of the instruments.

Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with

the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends, gains and

losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to

holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either

on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the

acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss)

are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial

instrument at fair value through profit or loss are recognised immediately in profit or loss.

Financial instruments recognised in the statements of financial position are disclosed in the individual policy

statement associated with each item.

(a) Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss,

held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as

appropriate.

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

Financial assets are classified as financial assets at fair value through profit or loss when the financial

asset is either held for trading or is designated to eliminate or significantly reduce a measurement

or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for

trading unless they are designated as hedges. Fair value through profit or loss category also comprises

contingent consideration in a business combination.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising

on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is

recognised in profit or loss when the Group’s right to receive payment is established.

Financial assets at fair value through profit or loss could be presented as current assets or non-current

assets. Financial assets that are held primarily for trading purposes are presented as current assets

whereas financial assets that are not held primarily for trading purposes are presented as current assets

or non-current assets based on the settlement date.

(ii) Held-to-maturity Investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments

and fixed maturities that the management has the positive intention and ability to hold to maturity.

Held-to-maturity investments are measured at amortised cost using the effective interest method less

any impairment loss, with interest income recognised in profit or loss on an effective yield basis.

Held-to-maturity investments are classified as non-current assets, except for those having maturity

within 12 months after the reporting date which are classified as current assets.



cont’d


4.5 FINANCIAL INSTRUMENTS cont’d

(a) Financial Assets cont’d

(iii) Loans and Receivables Financial Assets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted

in an active market are classified as loans and receivables financial assets. Loans and receivables

financial assets are measured at amortised cost using the effective interest method, less any impairment

loss. Interest income is recognised by applying the effective interest rate, except for short-term

receivables when the recognition of interest would be immaterial.

The effective interest method is a method of calculating the amortised cost of a financial asset and of

allocating interest income over the relevant period. The effective interest rate is the rate that discounts

estimated future cash receipts (including all fees and points paid or received that form an integral part

of the effective interest rate, transaction costs and other premiums or discounts) through the expected

life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial

recognition.

Loans and receivables financial assets are classified as current assets, except for those having settlement

dates later than 12 months after the reporting date which are classified as non-current assets.

(iv) Available-for-sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are designated in this category

or are not classified in any of the other categories.

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end

of each reporting period. Gains and losses arising from changes in fair value are recognised in other

comprehensive income and accumulated in the fair value reserve, with the exception of impairment

losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve

is reclassified from equity into profit or loss. Interest income calculated for a debt instrument using the

effective interest method is recognised in profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s

right to receive payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost

less accumulated impairment losses, if any.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be

realised within 12 months after the reporting date.

(b) Financial Liabilities

(i) Financial Liabilities at Fair Value through Profit or Loss

Fair value through profit or loss category comprises financial liabilities that are either held for trading

or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that

would otherwise arise. Derivatives are also classified as held for trading unless they are designated as

hedges.

(ii) Other Financial Liabilities

Other financial liabilities are initially measured at fair value plus directly attributable transaction costs

and subsequently measured at amortised cost using the effective interest method.




4.5 FINANCIAL INSTRUMENTS cont’d

(b) Financial Liabilities cont’d

(ii) Other Financial Liabilities cont’d

The effective interest method is a method of calculating the amortised cost of a financial liability and

of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly

discounts estimated future cash payments through the expected life of the financial liability, or, where

appropriate, a shorter period.

Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer

settlement of the liability for at least 12 months after the reporting date.

(c) Equity Instruments

Ordinary shares are reclassified as equity instruments. Equity instruments classified as equity are measured at

cost and are not remeasured subsequently. Incremental costs directly attributable to the issue of new ordinary

shares are shown in equity as a deduction, net of tax, from proceeds.

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

(d) Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows

from the financial asset expire or the financial asset is transferred to another party without retaining control

or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between

the carrying amount and the sum of the consideration received (including any new asset obtained less any

new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in

profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract

is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the

carrying amount of the financial liability extinguished or transferred to another party and the consideration

paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

(e) Financial Guarantee Contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse

the holder for a loss it incurs because a specific debtor fails to make payment when due in accordance with

the original or modified terms of a debt instrument.

Financial guarantee contracts are recognised initially as liabilities at fair value, net of transaction costs.

Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss

over the period of the guarantee or, when there is no specific contractual period, recognised in profit or

loss upon discharge of the guarantee. If the debtor fails to make payment relating to a financial guarantee

contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated

loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the

present obligation at the end of the reporting period and the amount initially recognised less cumulative

amortisation.



cont’d


4.6 INVESTMENTS IN SUBSIDIARIES

Investments in subsidiaries including the fair value adjustments on inter-company loans at inception date (or the

share options granted to employees of the subsidiaries) are stated at cost in the statement of financial position

of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in

circumstances indicate that the carrying values may not be recoverable. The cost of the investments includes

transaction costs.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the

carrying amount of the investments is recognised in profit or loss.

4.7 OTHER INTANGIBLE ASSETS

(a) Research and Development Expenditure

Research expenditure is recognised as an expense when it is incurred.

Development expenditure is recognised as an expense except that costs incurred on development projects

are capitalised as non-current assets to the extent that such expenditure is expected to generate future

economic benefits. Development expenditure is capitalised if, and only if, an entity can demonstrate all of the

following:-

(a) its ability to measure reliably the expenditure attributable to the asset under development;

(b) the product or process is technically and commercially feasible;

(c) its future economic benefits are probable;

(d) its intention to complete and the ability to use or sell the developed asset; and

(e) the availability of adequate technical, financial and other resources to complete the asset under

development.

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment

losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the

subsequent period.

The development expenditure is amortised on a straight-line method over a period of 5 years when the

products are ready for sale or use. In the event that the expected future economic benefits are no longer

probable of being recovered, the development expenditure is written down to its recoverable amount.

The amortisation method, useful life and residual value are reviewed, and adjusted if appropriate, at the end

of each reporting period.

(b) Computer Software

Costs incurred to acquire computer software that are not an integral part of the related hardware, are

capitalised as intangible assets and amortised on a straight-line basis over the estimated useful life of 5 years.

4.8 PROPERTY AND EQUIPMENT

All items of property and equipment are initially measured at cost. Cost includes expenditure that are directly

attributable to the acquisition of the asset and other costs directly attributable to bringing the asset to working

condition for its intended use.

Subsequent to initial recognition, all property and equipment are stated at cost less accumulated depreciation and

any impairment losses.




4.8 PROPERTY AND EQUIPMENT cont’d

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only

when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow

to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is

derecognised. The costs of the day-to-day servicing of property and equipment are recognised in profit or loss as

incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on

which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the

straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation

of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully

depreciated. The principal annual rates used for this purpose are:-

Buildings 2%

Leasehold land Over the lease period of 80 years

Computer software and equipment 10% - 33 1/3%

Electrical and fittings 5% - 10%

Furniture and fittings 10% - 25%

Motor vehicles 20%

Office equipment 10% - 20%

Renovation 10% - 20%

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of

the reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous

estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the

property and equipment. Any changes are accounted for as a change in estimate.

When significant parts of an item of property and equipment have different useful lives, they are accounted for as

separate items (major components) of property and equipment.

Capital work-in-progress represents assets under construction, and which are not ready for commercial use at

the end of the reporting period. Capital work-in-progress is stated at cost, and will be transferred to the relevant

category of assets and depreciated accordingly when the assets are completed and ready for commercial use.

Cost of capital work-in-progress includes direct cost, related expenditure and interest cost on borrowings taken to

finance the acquisition of the assets to the date that the assets are completed and put in use.

An item of property and equipment is derecognised upon disposal or when no future economic benefits are

expected from its use. Any gain or loss arising from derecognition of the asset, being the difference between the net

disposal proceeds and the carrying amount, is recognised in profit or loss.

4.9 INVESTMENT PROPERTY

Investment property is property which is owned or held under a leasehold interest to earn rental income or for

capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply

of goods or services or for administrative purposes.

Investment property is initially measured at cost. Cost includes expenditure that is directly attributable to the

acquisition of the investment property.

Subsequent to initial recognition, investment property is stated at cost less accumulated depreciation and

impairment losses, if any.



cont’d


4.9 INVESTMENT PROPERTY cont’d

Depreciation is charged to profit or loss on the straight-line method over the estimated useful lives of the

investment property. The principal annual rates used for this purpose are:-

Buildings 2%

Renovation 20%

Investment property is derecognised when they have either been disposed of or when the investment property is

permanently withdrawn from use and no future benefit is expected from its disposal.

On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying

amount is recognised in profit or loss.

Transfers are made to or from investment property only when there is a change in use. All transfers do not change

the carrying amount of the property reclassified.

4.10 IMPAIRMENT

(a) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss and investments in

subsidiaries), are assessed at the end of each reporting period whether there is any objective evidence of

impairment as a result of one or more events having an impact on the estimated future cash flows of the

asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered

to be an objective evidence of impairment.

An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is

recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the

present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is

measured as the difference between its cost (net of any principal payment and amortisation) and its current

fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative

loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is

reclassified from equity into profit or loss.

With the exception of available-for-sale debt instruments, if, in a subsequent period, the amount of the

impairment loss decreases and the decrease can be related objectively to an event occurring after the

impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to

the extent that the carrying amount of the financial asset at the date the impairment is reversed does not

exceed what the amortised cost would have been had the impairment not been recognised. In respect of

available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not

reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is

recognised in other comprehensive income.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or

loss and is measured as the difference between the financial asset’s carrying amount and the present value of

estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such

impairment losses are not reversed in subsequent periods.




4.10 IMPAIRMENT cont’d

(b) Impairment of Non-financial Assets

The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply,

are reviewed at each end of the reporting period for impairment when an annual impairments assessment is

compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing

the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset

exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss

shall be recognised. The recoverable amount of the assets is the higher of the assets’ fair value less costs to

sell and their value-in-use, which is measured by reference to discounted future cash flow using a pre-tax

discount rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group

determines the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued

amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a

previously recognised revaluation surplus for the same asset. Impairment losses recognised in respect of

cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-

generating units and then to reduce the carrying amounts of the other assets in the cash-generating unit on a

pro rate basis.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the

recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of

the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would

have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The

reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which

case the reversal of the impairment loss is treated as a revaluation increase.

4.11 LEASED ASSETS

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental

to ownership. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value

and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted

for in accordance with the accounting policy applicable to that asset. The corresponding liability is included in the

statement of financial position as hire purchase payables.

Minimum lease payments made under finance leases are apportioned between the finance costs and the

reduction of the outstanding liability. The finance costs, which represent the difference between the total leasing

commitments and the fair value of the assets acquired, are recognised in the profit or loss and allocated over the

lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each

accounting period.

4.12 INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average

cost method and comprises the purchase price, and incidentals incurred in bringing the inventories to their present

location and condition.

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

4.13 INCOME TAXES

(a) Current Tax

Current tax assets and liabilities are expected amount of income tax recoverable or payable to the taxation

authorities.



cont’d


4.13 INCOME TAXES cont’d

(a) Current Tax cont’d

Current taxes are measured using tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period and are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss (either in other comprehensive income or directly in equity).

(b) Deferred Tax

Deferred tax are recognised using the liability method for all temporary differences other than those that arise from goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

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

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

Current and deferred tax items are recognised in correlation to the underlying transactions either in profit or loss,

other comprehensive income or directly in equity. Deferred tax arising from a business combination is adjusted

against goodwill or negative goodwill.

Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legally enforceable

right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same

taxable entity (or on different tax entities but they intend to settle current tax assets and liabilities on a net basis)

and the same taxation authority.

(c) Goods and Service Tax (“GST”)

Revenues, expenses and assets are recognised net of GST except for the GST in purchase of assets or services which are not recoverable from the taxation authorities, the GST are included as part of the costs of the assets acquired or as part of the expense item whichever is applicable.

In addition, receivables and payables are also stated with the amount of GST included (where applicable).

The net amount of the GST recoverable from or payable to the taxation authorities at the end of the reporting period is included in other receivables or other payables.

4.14 CASH AND CASH EQUIVALENTS

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

4.15 PROVISIONS

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

the discount is recognised as interest expense in profit or loss.




4.16 EMPLOYEE BENEFITS

(a) Short-term Benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on

an undiscounted basis and are recognised in profit or loss and included in the development costs, where

appropriate, in the period in which the associated services are rendered by employees of the Group.

(b) Defined Contribution Plans

The Group’s contributions to defined contribution plans are recognised in profit or loss and included in the

development costs, where appropriate, in the period to which they relate. Once the contributions have been

paid, the Group has no further liability in respect of the defined contribution plans.

(c) Share-based Payment Transactions

The Group operates an equity-settled share-based compensation plan, under which the Group receives

services from employees as consideration for equity instruments of the Company (known as “share options”).

At grant date, the fair value of the share options is recognised as an expense on a straight-line method over

the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a

corresponding credit to employees’ share option reserve in equity. The amount recognised as an expense is

adjusted to reflect the actual number of the share options that are expected to vest. Service and non-market

performance conditions attached to the transaction are not taken into account in determining the fair value.

In the Company’s separate financial statements, the grant of the share options to the subsidiaries’ employees

is not recognised as an expense. Instead, the fair value of the share options measured at the grant date is

accounted for as an increase to the investment in subsidiary undertaking with a corresponding credit to the

employees’ share option reserve.

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

When the share options are exercised, the employees’ share option reserve is transferred to share capital or

share premium if new ordinary shares are issued, or to treasury shares if the share options are satisfied by the

reissuance of treasury shares.

Any recharge for the share options granted to a subsidiary’s employees is to be offset against the investments

in subsidiaries in the Company’s separate financial statements with any excess goes to profit or loss as a

distribution from the subsidiary.

4.17 LEASE RECEIVABLE

Lease is classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of

ownership to the lessee.

Amount owing by lessees under finance lease is recognised as receivable at the amount of the Group’s net

investment in the lease. Finance lease income is allocated to accounting periods so as to reflect a constant periodic

rate of return on the Group’s net investment outstanding in respect of the lease.

4.18 REVENUE AND OTHER INCOME

(a) Sale of Goods

Revenue is measured at fair value of the consideration received or receivable and is recognised upon delivery

of goods and customers’ acceptance, and where applicable, net of goods and services tax, return, cash and

trade discounts.



cont’d


4.18 REVENUE AND OTHER INCOME cont’d

(b) Support and Maintenance Income

Revenue is recognised upon the rendering of services and when the outcome of the transaction can be

estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is

recognised to the extent of the expenses incurred that are recoverable.

Support and maintenance income are recognised over the period of the service contracts based on services

rendered.

Any billings in advance of which the maintenance services have not been performed will be treated as

unearned income until the services have been delivered. The unearned income will be credited to the profit or

loss and other comprehensive income upon the services performed.

(c) Interest Income

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

(d) Dividend Income

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

(e) Rental Income

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

(f) Managing Contractor Revenue

(i) Managing contractors’ work

Revenue on contracts is recognised on the percentage of completion method unless the outcome of

the contract cannot be determined, in which case revenue on contracts is only recognised to the extent

of contract costs incurred that are recoverable. Foreseeable losses, if any, are provided for in full as and

when it can be reasonable ascertained that the contract will result in a loss.

The stage of completion is determined based on the proportion that contract costs incurred for work

performed to date bear to the estimated total contract costs.

(ii) Managing marketing and administrative works

Managing marketing and administrative income are recognised over the period of the service contracts

based on services rendered.

4.19 RELATED PARTIES

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

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

(i) has control or joint control over the reporting entity;

(ii) has significant influence over the reporting entity; or

(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting

entity.

Close members of the family of a person are those family members who may be expected to influence, or be

influenced by, that person in their dealings with the reporting entity.




4.19 RELATED PARTIES cont’d

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

(i) the entity and the reporting entity are members of the same group (which means that each parent,

subsidiary and fellow subsidiary is related to the others).

(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a

member of a group of which the other entity is a member).

(iii) both entities are joint ventures of the same third party.

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) the entity is a post-employment benefit plan for the benefit of employees of either the reporting entity

or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring

employers are also related to the reporting entity.

(vi) the entity is contolled or jointly controlled by a person identified in (a) above.

(vii) a person identified in (a)(i) above has significant influence over the entity or is a member of the key

management personnel of the entity (or of a parent of the entity).

(viii) the entity, or any member of a group of which it is a part, provides key management personnel services

to the reporting entity or to the parent of the reporting entity.

Related parties also include key management personnel defined as those persons having authority and

responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly,

including its director (whether executive or otherwise) of that entity.

4.20 CONTINGENT LIABILITIES

A contingent liability is a possible obligation that arises from past events and whose existence will only be

confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It

can also be a present obligation arising from past events that is not recognised because it is not probable that an

outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements, unless the

probability of outflow of economic benefits is remote. When a change in the probability of an outflow occurs so that

the outflow is probable, it will then be recognised as a provision.

4.21 FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date, regardless of whether that price is directly observable or

estimated using a valuation technique. The measurement assumes that the transaction takes place either in the

principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset,

the fair value measurement takes into account a market participant’s ability to generate economic benefits by using

the asset in its highest and best use or by selling it to another market participant that would use the asset in its

highest and best use. However, this basis does not apply to share-based payment transactions.

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

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

access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or

liability, either directly or indirectly; and

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

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

caused the transfer.



cont’d


4.22 OPERATING SEGMENTS

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

4.23 EARNINGS PER ORDINARY SHARE

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

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

4.24 BORROWING COSTS

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

4.25 NON-CURRENT ASSETS HELD FOR SALE

Non-current assets (or disposal group comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the non-current assets (or the disposal group) are remeasured in accordance with the Group’s accounting policies. Upon classification as held for sale, the non-current assets (the disposal group) are not depreciated and are measured at the lower of their previous carrying amount and fair value less cost to sell. Any differences are recognised in profit or loss.

5. INVESTMENTS IN SUBSIDIARIES

The Company

31.3.2017 31.3.2016

RM RM

Unquoted shares, at cost:-

At 1 April 2016/1 January 2015 17,700,004 20,527,500

Addition during the financial year/period 1,999,996 1,020,004

Disposal during the financial year/period - (5,047,500)

Share option granted under ESOS^ - 1,200,000

At 31 March 19,700,000 17,700,004

Accumulated impairment losses:-

At 1 April 2016/1 January 2015 (4,132,000) (4,792,500)

Addition during the financial year/period - (4,132,000)

Disposal during the financial year/period - 4,792,500

At 31 March (4,132,000) (4,132,000)

15,568,000 13,568,004

^ Share option granted by the Company to eligible employees of subsidiaries in the previous financial period.



5. INVESTMENTS IN SUBSIDIARIES cont’d

The details of the subsidiaries are as follows:-

Name of Subsidiaries

Principal Place

of Business/

Country of

Incorporation

Percentage of Issued

Share Capital Held

by Parent

Principal Activities31.3.2017 31.3.2016

Nuone Sdn. Bhd. (“Nuone”) Malaysia 100% 100% Dormant.

Viewnet Computer System

Sdn. Bhd. (“Viewnet”)

Malaysia 100% 100% Business of trading in software, hardware,

multimedia, internet and as an electronic

commerce provider and facilitator.

Open Adventure Sdn. Bhd.

(“OA”)

Malaysia 100% 100% Engaged in software development and

support services.

Super Kian Holdings Sdn.

Bhd. (“Super Kian”)

Malaysia 100% 100% Involved in property construction and its

related business.

Tristar Union Sdn. Bhd.

(“TUSB”)

Malaysia 100% 100% Involved in property construction and its

related business.

Subsidiary of Viewnet:-

PC Zone Computer Trading

(M) Sdn. Bhd.

Malaysia 100% 100% Involved in rental of premises.

Subsidiaries of OA:-

Open Adventure Services

Sdn. Bhd. (“OAS”)

Malaysia 70% 70% Engaged in software development and

support services.

During the financial year, the Company subscribed for an additional 999,998 ordinary shares for purchase consideration of RM999,998 in Super Kian and 999,998 ordinary shares for purchase consideration of RM999,998 in TUSB.

In the previous financial period:-

i) the Company acquired 100% equity interest in Super Kian and TUSB for cash. The acquisitions had no significant effect on the financial results of the Group for the previous financial period and the financial position of the Group as at the end of the previous reporting period. The details of the acquisitions are disclosed in Note 35 to the financial statements.

(ii) the Company disposed of its equity interests in TMS Software Sdn. Bhd. (“TSSB”) and Lephone (SEA) Sdn. Bhd. (“Lephone”). The details of the disposal are disclosed in Note 36 to the financial statements.

(iii) OA disposed of its equity interests in Open Adventure Technologies Sdn. Bhd. (“OAT”) and Open Adventure (Australia) Pty. Ltd. (“OAA”). The details of the disposal are disclosed in Note 36 to the financial statements.

(iv) the Company acquired an additional 34% equity interest in OA from its non-controlling interests. Following the completion of the acquisition, OA became a 100% owned subsidiary of the Company. The details of the acquisition are disclosed in Note 35 to the financial statements.

(v) the Company assessed the recoverable amount of the investments in subsidiaries and determined to recognise an additional impairment loss of RM4,132,000 which was recognised in “Other Expenses” line item of the statement of profit or loss and other comprehensive income as the subsidiaries suffered significant losses.



cont’d

5. INVESTMENTS IN SUBSIDIARIES cont’d

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

Effective Equity

Interest The Group

31.3.2017 31.3.2016 31.3.2017 31.3.2016

% % RM RM

OAS 30 30 (109,170) (111,449)

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

OAS

31.3.2017 31.3.2016

RM RM

At 31 March

Non-current asset - 991

Current assets 83,775 361,479

Current liabilities (47,677) (333,968)

Net assets 36,098 28,502

Financial Year/Period Ended 31 March

Revenue 727,693 1,295,686

Profit/(Loss) for the financial year/period 7,596 (374,960)

Total comprehensive income/(expenses) 7,596 (374,960)

Total comprehensive income/(expenses) attributable to non-controlling interests 2,279 (112,488)

Net cash from/(for) operating activities 158,296 (490,451)

Net cash (for)/from financing activities (154,066) 417,973

6. PROPERTY AND EQUIPMENT

At

1.4.2016 Additions

Depreciation

Charges

At

31.3.2017

RM RM RM RM

The Group

Net Book Value

Buildings 5,656,964 - (121,275) 5,535,689

Leasehold land 818,199 - (10,390) 807,809

Computer software and equipment 80,739 8,509 (30,536) 58,712

Electrical and fittings 34,940 - (6,820) 28,120

Furniture and fittings 135,784 2,141 (55,252) 82,673

Motor vehicles 423,107 1,090,769 (210,370) 1,303,506

Office equipment 162,314 21,044 (38,729) 144,629

Renovation 1,741,771 153,621 (518,939) 1,376,453

9,053,818 1,276,084 (992,311) 9,337,591



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cont’d

6. PROPERTY AND EQUIPMENT cont’d

Cost

Accumulated

Impairment

Losses

Accumulated

Depreciation

Net Book

Value

The Group RM RM RM RM

31.3.2017

Buildings 6,063,700 - (528,011) 5,535,689

Leasehold land 831,186 - (23,377) 807,809

Computer software and equipment 7,777,703 (4,361,620) (3,357,371) 58,712


Furniture and fittings 498,853 - (416,180) 82,673

Motor vehicles 1,701,212 - (397,706) 1,303,506

Office equipment 424,622 - (279,993) 144,629

Renovation 5,478,081 - (4,101,628) 1,376,453

22,844,813 (4,361,620) (9,145,602) 9,337,591

Cost

Accumulated

Impairment

Losses

Accumulated

Depreciation

Net Book

Value


31.3.2016

Buildings 6,063,700 - (406,736) 5,656,964

Leasehold land 831,186 - (12,987) 818,199

Computer software and equipment 7,781,279 (4,361,620) (3,338,920) 80,739



Motor vehicles 610,443 - (187,336) 423,107


Renovation 5,324,460 - (3,582,689) 1,741,771

21,580,814 (4,361,620) (8,165,376) 9,053,818




At

1.4.2016 Addition

Depreciation

Charges

At

31.3.2017

RM RM RM RM

The Company

Net Book Value

Buildings 2,191,963 - (51,274) 2,140,689

Computer software and equipment 228 - (228) -


Office equipment 10,572 - (9,932) 640

Renovation 84,514 99,581 (79,199) 104,896

2,325,961 99,581 (175,451) 2,250,091

At

1.1.2015

Written

Off

Depreciation

Charges

At

31.3.2016

RM RM RM RM

The Company

Net Book Value

Buildings 2,256,056 - (64,093) 2,191,963

Computer software and equipment 2,098 (25) (1,845) 228



Renovation 175,370 - (90,856) 84,514

2,539,837 (25) (213,851) 2,325,961

Cost

Accumulated

Depreciation

Net Book

Value

The Company RM RM RM

31.3.2017

Buildings 2,563,700 (423,011) 2,140,689

Computer software and equipment 186,136 (186,136) -

Furniture and fittings 286,054 (282,188) 3,866

Office equipment 102,968 (102,328) 640

Renovation 968,517 (863,621) 104,896

4,107,375 (1,857,284) 2,250,091



cont’d


Cost

Accumulated

Depreciation

Net Book

Value

The Company RM RM RM

31.3.2016

Buildings 2,563,700 (371,737) 2,191,963

Computer software and equipment 186,136 (185,908) 228

Furniture and fittings 286,054 (247,370) 38,684

Office equipment 102,968 (92,396) 10,572

Renovation 868,936 (784,422) 84,514

4,007,794 (1,681,833) 2,325,961

(a) Included in property and equipment of the Group at the end of the reporting period were motor vehicles with a total net book value of RM139,181 (31.3.2016 - RM194,700) which were acquired under hire purchase terms.

(b) In the previous financial period, the Group has carried out a review of the recoverable amount of its equipment in its subsidiary which had been persistently making losses. An impairment loss of RM4,361,620, representing the write-down of the equipment to the recoverable amount was recognised in “Other Expenses” line item of the consolidated statement of profit or loss and other comprehensive income as disclosed in Note 29 to the financial statements.

7. INVESTMENT PROPERTY

The Group

31.3.2017 31.3.2016

RM RM

Cost:-

At 1 April 2016/1 January 2015 1,477,400 -

Addition during the financial year/period - 1,477,400

At 31 March 1,477,400 1,477,400

Accumulated depreciation:-

At 1 April 2016/1 January 2015 (46,800) -

Depreciation during the financial year/period (93,600) (46,800)

At 31 March (140,400) (46,800)

1,337,000 1,430,600

Fair Value 1,349,000 1,487,000

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM

Rental income generated from investment property during the financial year/period 36,000 9,000

Direct operating expenses arising from investment property that generated rental

income during the financial year/period 1,071 1,085



7. INVESTMENT PROPERTY cont’d

The Group has opted for the cost model in determining the carrying amount of the investment property.

The fair value of the investment property is based on the current prices in an active market for the similar properties

within the area in which the investment property is located.

8. LEASE RECEIVABLE

The Group

31.3.2017 31.3.2016

RM RM

Minimum lease receivable payments:

- not later than one year - 54,048

- later than one year and not later than five years - 121,618

- 175,666

Less: Future finance income - (12,015)

Present value of lease receivable - 163,651

Current:

Not later than one year - 47,855

Non-Current:

Later than one year and not later than five years - 115,796

- 163,651

Lease receivable of the Group represents lease of a motor vehicle. During the current financial year, the lease of a motor

vehicle has been terminated and the motor vehicle has been sold.

9. OTHER INVESTMENTS

The Group/The Company

31.3.2017 31.3.2016

RM RM

Unquoted shares in Malaysia - 199,000

In the previous financial period, investments in unquoted shares of the Group and of the Company, designated as

available-for-sale financial assets, are stated at cost as their fair values cannot be reliably measured using valuation

techniques due to the lack of marketability of the shares.



cont’d

10. OTHER INTANGIBLE ASSETS


Note 31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Software development costs (a) - - - -

Computer software (b) - 892,857 - -

- 892,857 - -

(a) Software Development Costs


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Software development, at cost

At 1 April 2016/1 January 2015 3,365,644 3,575,358 3,365,644 3,365,644

Disposal of a subsidiary - (209,714) - -

At 31 March 3,365,644 3,365,644 3,365,644 3,365,644

Accumulated amortisation:-

At 1 April 2016/1 January 2015 (3,290,379) (3,397,102) (3,290,379) (3,290,379)

Disposal of a subsidiary - 106,723 - -

At 31 March (3,290,379) (3,290,379) (3,290,379) (3,290,379)

Accumulated impairment:-

At 1 April 2016/1 January 2015 (75,265) (178,256) (75,265) (75,265)


At 31 March (75,265) (75,265) (75,265) (75,265)

- - - -

The software development costs of the Group and of the Company at the end of the reporting period relate to

expenditure incurred for the development of software, namely “tmsEKP”.



10. OTHER INTANGIBLE ASSETS cont’d

(b) Computer Software

The Group

31.3.2017 31.3.2016

RM RM

Computer software, at cost:-

At 1 April 2016/1 January 2015 2,200,000 650,000

Addition during the financial year/period - 2,200,000

Disposal of a subsidiary - (650,000)

At 31 March 2,200,000 2,200,000

Accumulated amortisation:-

At 1 April 2016/1 January 2015 (407,143) -

Amortisation during the financial year/period (142,857) (526,310)

Disposal of a subsidiary - 119,167

At 31 March (550,000) (407,143)


At 1 April 2016/1 January 2015 (900,000) -

Impairment during the financial year/period (750,000) (1,430,833)

Disposal of a subsidiary - 530,833

At 31 March (1,650,000) (900,000)

- 892,857

The computer software of the Group at the end of the reporting period relates to software, namely “Mobile Business

App Platform”, “Integrated Customer Loyalty Management System (“CLMS”) & Mobile CLMS” and “Envision Small

Business Solution”.

The Group assessed the recoverable amount of computer software and determined that an impairment loss was

recognised in “Other Expenses” line item of the statement of profit or loss and other comprehensive income as

the recoverable amount is lower than the carrying amount. The recoverable amount of the cash-generating unit is

estimated based on its value in use.



cont’d

11. GOODWILL ON CONSOLIDATION

The Group

31.3.2017 31.3.2016

RM RM

Cost:-

At 1 April 2016/1 January 2015 7,184,235 10,323,429

Disposal of a subsidiary - (3,139,194)

At 31 March 7,184,235 7,184,235


At 1 April 2016/1 January 2015 (1,420,356) (3,139,194)

Impairment during the financial year/period - (1,420,356)

Disposal of a subsidiary - 3,139,194

At 31 March (1,420,356) (1,420,356)

5,763,879 5,763,879

In the previous financial period, the Group assessed the recoverable amount of goodwill and determined that an

impairment loss was recognised in “Other Expenses” line item of the statement of profit or loss and other comprehensive income as the recoverable amount was lower than the carrying amount. The recoverable amount of the cash-generating unit is estimated based on its value in use.

The carrying amount of goodwill is allocated to Viewnet and its subsidiary, a cash-generating unit.

(a) The Group has assessed the recoverable amount of goodwill allocated and determined that no additional impairment is required. The recoverable amount of the cash-generating unit is determined using the value in use approach, and this is derived from the present value of the future cash flows from the operating segments computed based on the projections of financial budgets approved by management covering a period of 5 years. The key assumptions used in the determination of the recoverable amount are as follows:-

Gross Margin Growth Rate Discount Rate

1.4.2016to

31.3.2017

1.1.2015to

31.3.2016

1.4.2016to

31.3.2017

1.1.2015to

31.3.2016

1.4.2016to

31.3.2017

1.1.2015to

31.3.2016

Viewnet and its subsidiary 10% to 11% 10% 5% to 7% 8% 5% 9%

(i) Budgeted gross margin Average gross margin achieved in the four years immediately before the

budgeted period and expectations of market developments over the periods

under review.

(ii) Growth rate Based on the expected projection of the type of business. There is no growth

rate in perpetuity to arrive at terminal value.

(iii) Discount rate (pre-tax) The discount rate used is the average rate of weighted average cost of capital

of the Company obtained from Bloomberg as at 31 March 2016 and 31 March

2017, respectively.

The values assigned to the key assumptions represent management’s assessment of future trends in the cash-generating units and are based on both external sources and internal historical data.

(b) The directors believe that there is no reasonable possible change in the above key assumptions applied that is likely

to materially cause the respective cash-generating unit carrying amount to be exceeded its recoverable amount.



12. INVENTORIES

The Group

31.3.2017 31.12.2016

RM RM

Inventories held for sale 17,385,945 17,732,867

Recognised in profit or loss

Inventories recognised as cost of sales 114,582,911 146,606,622

13. TRADE RECEIVABLES


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Non-current

Trade receivable 2,432,199 - - -

Current

Trade receivables 11,019,923 15,380,923 - -

Allowance for impairment losses (1,013,502) (4,183,517) - -

10,006,421 11,197,406 - -

12,438,620 11,197,406 - -

Allowance for impairment losses:-

At 1 April 2016/1 January 2015 (4,183,517) (325,964) - (19,092)

Reversal during the financial year/period 471,494 35,850 - -

Addition during the financial year/period (102,768) (4,191,459) - -

Write-off during the financial year/period 2,801,289 256,002 - 19,092


At 31 March (1,013,502) (4,183,517) - -

The Group’s normal trade credit terms range from 7 days to 90 days (31.3.2016 - 7 days to 90 days). Other credit terms are

assessed and approved on a case-by-case basis.

Included in trade receivables is an amount of approximately RM4.8 million owing by a customer of which the settlement is

via contra of properties as disclosed in Note 43 to the financial statements.



cont’d

14. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Other receivables 354,109 484,041 1,500 -

Deposits 14,793,209 13,870,797 24,360 24,025

Prepayments 67,494 396,026 1,415 660

15,214,812 14,750,864 27,275 24,685

Other receivables 354,109 484,041 1,500 -

Allowance for impairment losses - - - -

354,109 484,041 1,500 -


At 1 April 2016/1 January 2015 - (93,425) - -

Addition during the financial year/period - (16,712) - -

Write-off during the financial year/period - 110,137 - -

At 31 March - - - -

Deposits of the Group mainly consist of performance bond, rental and utility deposits.

15. AMOUNTS OWING BY SUBSIDIARIES

The Company

31.3.2017 31.3.2016

RM RM

Non-trade balances 43,695,262 45,544,882

Allowance for impairment losses (9,864,283) (9,864,283)

33,830,979 35,680,599


At 1 April 2016/1 January 2015 (9,864,283) (11,204,031)

Addition during the financial year/period - (9,864,283)

Disposal of a subsidiary - 11,204,031

At 31 March (9,864,283) (9,864,283)

(a) The non-trade balances represent unsecured interest-free advances and payments made on behalf. The amounts

owing are repayable on demand and are to be settled in cash.

(b) The amount owing by a subsidiary in the previous financial period was impaired as the subsidiary had been

suffering significant financial losses.



16. SHORT-TERM INVESTMENTS


31.3.2017 31.3.2016

RM RM

Unit trusts in Malaysia, at fair value 13,846,188 13,370,993

Market value of short-term investments 13,846,188 13,370,993

17. ASSET CLASSIFIED AS HELD FOR SALE

In the previous financial period, on 6 January 2016 and 3 February 2016, a wholly-owned subsidiary of the Company, Nuone entered into a Sale and Purchase Agreement and a supplementary agreement, respectively with Avenue Escapade Sdn. Bhd. to dispose of an office unit located at Persoft Tower. Accordingly, the property was classified as asset held for sale.

The asset measured at the lower of its carrying amount and fair value less costs to sell is as follows:-

The Group

31.3.2017 31.3.2016

RM RM

Asset classified as held for sale:-

Office premises, at cost - 1,197,916

The disposal has been completed during the current financial year.

18. SHARE CAPITAL

The movements in the authorised and paid-up share capital of the Group and the Company are as follows:-


31.3.2017 31.3.2016 31.3.2017 31.3.2016

Number of Shares RM RM

Authorised

Ordinary Shares of RM0.10 Each N/A 5,000,000,000 N/A 500,000,000

Issued and Fully Paid-up

Ordinary Shares With No Par Value

(31.3.2016 - Par Value of RM0.10 Each)

At 1 April 2016/1 January 2015 554,441,745 870,182,890 55,444,175 87,018,289

Share capital reduction - - - (43,509,144)

Share consolidation - (435,091,445) - -

Conversion of warrants - 1,850,300 - 185,030

Exercise of ESOS - 117,500,000 - 11,750,000

At 31 March 554,441,745 554,441,745 55,444,175 55,444,175

N/A Not applicable due to the adoption of the Companies Act 2016 as disclosed in item (i) below.



cont’d

18. SHARE CAPITAL cont’d

(i) On 31 January 2017, the concepts of authorised share capital and par value of share capital were abolished in

accordance with the Companies Act 2016. Consequently, the amount standing to the credit of the Company’s share

premium account become part of the Company’s share capital pursuant to the transitional provisions set out in

Section 618(2) of the Companies Act 2016. There is no impact on the numbers of ordinary shares in issue or the

relative entitlement of any of the members as a result of this transition.

(ii) In the previous financial period, the Company had:-

(a) completed its share capital reduction via the cancellation of RM0.05 of the par value of every ordinary share of

RM0.10 each pursuant to Section 64(1) of the Companies Act, 1965 in Malaysia;

(b) completed its share consolidation involving the consolidation of every two shares of RM0.05 each into one

new share of RM0.10 each;

(c) increased its issued and paid-up share capital by the issuance of 1,850,300 new ordinary shares of RM0.10

each pursuant to the conversion of 1,850,300 warrants at an exercise price of RM0.10 each; and

(d) increased its issued and paid-up share capital by the issuance of 117,500,000 new ordinary shares of RM0.10

each pursuant to the exercise of 117,500,000 share options at an exercise price of RM0.10 each.

The new shares issued rank pari passu in all respects with the existing shares of the Company.

(iii) The holders of ordinary shares are entitled to receive dividends as and when declared by the Company, and are

entitled to one vote per ordinary share at meetings of the Company.

19. RESERVES

19.1 Share Premium

The movements in the share premium of the Group and the Company are as follows:-


31.3.2017 31.3.2016

RM RM

At 1 April 2016/1 January 2015 5,323,561 4,054,751

Share-based compensation pursuant to ESOS - 1,175,000

Reclassification of warrants reserve upon conversion of warrants - 93,810

At 31 March 5,323,561 5,323,561

The Company has adopted the transitional provisions set out in Section 618(3) of the Companies Act 2016 where

the sum standing to the credit of the share premium may be utilised within twenty four (24) months from the

commencement date of 31 January 2017 in the manner as allowed for under the Companies Act 2016. Therefore,

the Group and the Company has not consolidated the share premium into share capital until the expiry of the

transitional period.



19. RESERVES cont’d

19.2 Warrants Reserve


31.3.2017 31.3.2016

RM RM

At 1 April 2016/January 2015 10,052,186 10,145,996

Reclassification of warrants reserve upon conversion of warrants - (93,810)

Reclassification of warrants reserve upon expiry of warrants (10,052,186) -

At 31 March - 10,052,186

The 2012/2017 Warrants lapsed on 16 January 2017.

19.3 Employees’ Share Option Reserve

In the previous financial period, the employees’ share option reserve represented the equity-settled share options

granted to eligible employees and directors. The reserve was made up of the cumulative value of services received

from employees recorded over the vesting period commencing from the grant date of equity-settled share options,

and was reduced by the expiry or exercise of the share options.

The ESOS is governed by the ESOS By-Laws and was approved by shareholders on 3 December 2012. The ESOS is to

be in force for a period of 5 years effective from 15 January 2013.

The main features of the ESOS are as follows:-

(a) Eligible persons are employees and/or directors of the Group, save for companies which are dormant.

(b) The aggregate number of options exercised and options offered and to be offered under the ESOS shall not

exceed 30% of the issued and paid-up share capital of the Company (excluding treasury shares) at any one

time during the existence of the ESOS.

(c) The allocation of options to the directors and senior management of the Group in aggregate, shall not exceed

50% of the new ordinary shares available under ESOS. In addition, not more than 10% of the new ordinary

shares available under the ESOS shall be allocated to any individual eligible person who either singly or

collectively through person connected with him or her, holds 20% or more of the issued and paid-up share

capital of the Company.

(d) The option price shall be determined by the Option Committee based on the 5-day weighted average market

price of ordinary shares of the Company immediately preceding the offer date of the option, with a discount

of not more than 10%, or at the par value of ordinary shares of the Company, whichever is higher.

(e) The option may be exercised by the grantee by notice in writing to the Company in the prescribed form

during the option period in respect of all or any part of the new ordinary shares of the Company comprised in

the ESOS.

(f ) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all

respects with the existing ordinary shares of the Company, provided always that new ordinary shares so allotted

and issued, will not be entitled to any dividends, rights, allotments and/or other distributions declared, where

the entitlement date of which is prior to date of allotment and issuance of the new ordinary shares.

In the previous financial period, the Company had granted 120,000,000 share options under the ESOS and of which

117,500,000 had been exercised. The options were vested on the date of offer.

The options which lapsed in the previous financial period were due to resignation of an employee.



cont’d

20. HIRE PURCHASE PAYABLES

The Group

31.3.2017 31.3.2016

RM RM

Minimum hire purchase payments:

- not later than one year 32,032 32,032

- later than one year and not later than five years 96,239 128,129

128,271 160,161

Less: Future finance charges (14,482) (20,161)

Present value of hire purchase payables 113,789 140,000

Current:

Not later than one year 26,447 25,053

Non-Current:

Later than one year and not later than five years 87,342 114,947

113,789 140,000

The hire purchase payables of the Group are secured by the Group’s motor vehicles under hire purchase.

21. DEFERRED TAX LIABILITIES

The Group

31.3.2017 31.3.2016

RM RM

At 1 April 2016/1 January 2015 30,000 30,000

Recognised in profit or loss (Note 31) 35,000 -

At 31 March 65,000 30,000

The deferred tax liability is attributable to the accelerated capital allowances.

22. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 30 days to 120 days (31.3.2016 - 30 days to 120 days).



23. OTHER PAYABLES AND ACCRUALS


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Accruals 332,958 425,233 113,342 102,715

Other payables 187,815 398,087 17,512 2,457

Unearned income 15,275 11,402 - -

536,048 834,722 130,854 105,172

Unearned income represents an appropriate proportion of the consideration received for which the maintenance services

are expected to be performed within twelve months from the end of the reporting period.

24. NET ASSETS PER SHARE

The net assets per share is calculated based on the net assets value at the end of the reporting period of RM66,077,105

(31.3.2016 - RM64,526,026) divided by the number of ordinary shares in issue at the end of the reporting period of

554,441,745 (31.3.2016 - 554,441,745).

25. REVENUE


1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM RM RM

Dividend income - - 2,300,000 4,500,000

Sale of goods 128,455,096 181,121,879 - -

Support and maintenance Income 1,025,184 7,590,960 - 26,400

Managing contractor revenue 7,075,161 8,941,721 - -

136,555,441 197,654,560 2,300,000 4,526,400

Revenue represents billings for sales of software, hardware, professional services less discounts and progress billings as

further disclosed in Note 40 to the financial statements.



cont’d

26. DIRECT COSTS

The Group

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM

Included in the direct costs are:-

Amortisation of other intangible asset 142,857 526,310

Cost of inventories 114,582,911 146,606,622

Staff costs:

- salaries, wages, bonuses and allowances 623,347 2,542,092

- defined contribution plan 70,998 299,242

- other benefits 8,564 11,951

27. OTHER INCOME


1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM RM RM

Included in the other income are:-

Gain from a bargain purchase - 1,815 - -

Gain on disposal of:

- asset held for sale 119,309 - - -

- equipment 1,792 - - -

- other investments - 41,000 - 41,000

Gain on foreign exchange:

- realised 73,134 208 - -

- unrealised - 18,339 - -

Interest Income 496,392 685,037 475,195 571,677

Rental Income 104,000 141,600 10,600 -

Reversal of impairment losses on trade receivables 471,494 35,850 - -



28. ADMINISTRATIVE EXPENSES


1.4.2016to

31.3.2017

1.1.2015to

31.3.2016

1.4.2016to

31.3.2017

1.1.2015to

31.3.2016

RM RM RM RM

Included in the administrative expenses are:-

Auditors’ remuneration:

- audit fees

- current financial year 103,500 120,500 28,000 25,000

- underprovision in the previous financial period 10,000 2,500 3,500 1,000

- non-audit fees 4,500 4,000 4,500 4,000

Rental:

- premises 3,101,318 4,102,337 111,600 138,045

- equipment 4,414 6,300 3,300 4,950

- car park 53,717 64,618 - -

Share-based payment arising from ESOS - 1,200,000 - -

Staff costs:

- salaries, wages, bonuses and allowances 5,911,806 9,856,856 149,700 300,289

- defined contribution plan 685,597 1,178,406 18,330 34,640

- other benefits 308,523 1,020,604 52,377 194,106

29. OTHER EXPENSES


1.4.2016to

31.3.2017

1.1.2015to

31.3.2016

1.4.2016to

31.3.2017

1.1.2015to

31.3.2016

RM RM RM RM

Bad debts written off - 6,238 - -

Depreciation of property and equipment 992,311 2,537,420 175,451 213,851

Depreciation of investment property 93,600 46,800 - -

Equipment written off - 25 - 25

Impairment losses on:

- amount owing by a subsidiary - - - 9,864,283

- equipment - 4,361,620 - -

- goodwill on consolidation - 1,420,356 - -

- investments in subsidiaries - - - 4,132,000

- other intangible assets 750,000 1,430,833 - -

- other receivables - 16,712 - -

- trade receivables 102,768 4,191,459 - -

Loss on disposal of other investments 169,000 - 169,000 -

Loss on disposal of subsidiaries - 195,282 - 394,568

Loss on foreign exchange:

- realised 82 2,993 - -

- unrealised - 51 - -

2,107,761 14,209,789 344,451 14,604,727



cont’d

30. FINANCE COSTS

The Group

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM

Interest expenses:

- hire purchase 5,678 21,971

- bankers’ acceptances - 11,939

5,678 33,910

31. INCOME TAX EXPENSE


1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM RM RM

Current tax:

- for the financial year/period 702,260 1,308,999 - -

- overprovision in the previous financial period/year (390,380) (2,497) - -

311,880 1,306,502 - -

Real property gains tax:

- for the financial year/period - 8,455 - -

- underprovision in the previous financial period/year 127 - - -

127 8,455 - -

Deferred tax (Note 21):

- for the financial year/period 35,000 - - -

347,007 1,314,957 - -



31. INCOME TAX EXPENSE cont’d

A reconciliation of income tax expense applicable to the profit/(loss) before taxation at the statutory tax rate to income

tax expense at the effective tax rate of the Group and of the Company is as follows:-


1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM RM RM

Profit/(Loss) before taxation 1,900,365 (19,418,608) 667,715 (11,936,858)

Tax at the statutory tax rate of 24% (31.3.2016 - 25%) 456,088 (4,854,653) 160,252 (2,984,215)

Tax effects of:-

Non-deductible expenses 1,026,240 4,198,515 501,795 3,799,134

Origination of deferred tax assets not recognised in

the financial year/period - 2,165,750 4,000 453,000

Utilisation of deferred tax assets previously not

recognised in the financial year/period (580,560) - - -

Real property gains tax for the financial year/period - 8,455 - -

Non-taxable income (164,508) (200,613) (666,047) (1,267,919)

(Over)/Underprovision in the previous financial

period/year:

- current tax (390,380) (2,497) - -

- real property gains tax 127 - - -

Income tax expense for the financial year/period 347,007 1,314,957 - -

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2016 - 25%) of the estimated assessable

profit for the financial year.

The temporary differences attributable to the deferred tax liability and deferred tax assets which are not recognised in the

financial statements are as follows:-


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Deferred tax liability:

Accelerated capital allowances (41,000) (27,000) - -

Deferred tax assets:

Excess of depreciation over capital allowances 61,000 49,000 56,000 40,000

Impairment losses on trade receivables 1,014,000 4,184,000 - -

Unabsorbed capital allowances 2,370,000 2,420,000 383,000 383,000

Unutilised tax losses 14,279,000 13,463,000 10,861,000 10,861,000

Others 15,000 28,000 - -

17,698,000 20,117,000 11,300,000 11,284,000



cont’d

32. EARNINGS/(LOSS) PER SHARE

The Group

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM

Earnings/(Loss) after taxation attributable to owners of the Company (RM) 1,551,079 (20,566,200)

Weighted average number of ordinary shares:-

Issued ordinary shares at 1 April 2016/1 January 2015 554,441,745 870,182,890

Effect of share capital consolidation - (435,091,445)

Effect of new ordinary shares issued pursuant to the exercise of ESOS - 43,230,262

Effect of new ordinary shares issued pursuant to the conversion of warrants - 775,968

Weighted average number of ordinary shares for basic earnings/(loss) per share

computation 554,441,745 479,097,675

Basic earnings/(loss) per ordinary share attributable to equity holders of the

Company (sen) 0.28 (4.29)

Diluted earnings/(loss) per ordinary share attributable to equity holders of the

Company (sen) 0.28 (4.29)

33. SHARE-BASED COMPENSATION PURSUANT TO ESOS

In the previous financial period, the Group had on 12 June 2015 granted share options to eligible employees and directors

of certain subsidiaries to purchase shares in the Company under the ESOS approved by the shareholders of the Company

on 3 December 2012.

The number of share options are as follows:-

Number of Option Over Ordinary Shares

of RM0.10 Each


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

At 1 April 2016/1 January 2015 - 30,000,000 - 30,000,000

Granted - 120,000,000 - -

Exercised - (117,500,000) - -

Lapsed - (32,500,000) - (30,000,000)

At 31 March - - - -



33. SHARE-BASED COMPENSATION PURSUANT TO ESOS cont’d

The fair value of the share options granted was estimated by using the trinomial model, taking into consideration the

terms and conditions upon which the options were granted. The fair value of the share options measured at the grant

date and the assumptions are as follows:-

Date of Share

Options

Granted

12.6.2015

Fair value of share options at the grant date (RM per share) 0.01

Weighted average share price (RM) 0.057

Exercise price (RM) 0.10

Expected volatility (%) 46.76

Expected life (years) 2.58

Risk free rate (%) 3.73

Value of employee services received for issue of share options

The Group

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM

Total expense recognised as share-based compensation pursuant to ESOS - 1,200,000

At 31 March - 1,200,000

34. PURCHASE OF PROPERTY AND EQUIPMENT


1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM RM RM

Cost of property and equipment purchased 1,276,084 4,822,314 99,581 -

Amount financed through hire purchase - (140,000) - -

Cash disbursed for purchase of property and

equipment 1,276,084 4,682,314 99,581 -



cont’d

35. ACQUISITION OF SUBSIDIARIES AND NON-CONTROLLING INTERESTS

35.1 Acquisition of Subsidiaries


(a) On 18 August 2015, the Company acquired 100% equity interest in Super Kian. Upon the acquisition, Super Kian became a wholly-owned subsidiary of the Company. Super Kian was incorporated as a private limited company in Malaysia on 22 December 2010. Super Kian is principally involved in the property construction and its related business.

The fair values of the identifiable assets and liabilities of Super Kian as at the date of acquisition were:-

Pre-

acquisition

carrying

amounts

Fair value

adjustments

Recognised

values on

acquisition

RM RM RM

Cash and bank balances 3,467 - 3,467

Other payables and accruals (1,419) - (1,419)

Provision for taxation (231) - (231)

Net identifiable assets 1,817 - 1,817

Gain from a bargain purchase (1,815)

Fair value of consideration transferred 2

The effect of the acquisition on cash flows was as follows:-

RM

Fair value of the consideration transferred 2

Less: Non-cash consideration -

Consideration settled in cash 2

Less: Cash and cash equivalents of subsidiary acquired (3,467)

Net cash inflow on acquisition 3,465

(b) On 19 October 2015, the Company acquired two (2) ordinary shares of RM1.00 each, represented 100% equity

interest in TUSB for a total cash consideration of RM2.00. Upon the acquisition, TUSB became a wholly-owned subsidiary of the Company. TUSB was incorporated as a private limited company in Malaysia on 28 September 2015. TUSB was dormant at the end of the previous reporting period.

(c) On 18 March 2015, the Company acquired an additional 34% equity interest in OA for a cash consideration of RM1,020,000, increased its equity interest from 66% to 100%. The carrying amount of OA’s net assets in the Group’s financial statements on the date of acquisition was RM1,322,305. The Group recognised a decrease in non-controlling interests of RM449,584 and a decrease in retained profits of RM570,416.

The following summarised the effect of changes in the equity interests in OA that was attributable to the owners of the Company:-

The Group

RM

Equity interest at 31 March 2015 (66%) 872,721

Effect of increase in the Company’s ownership interest 449,584

Equity interest at 31 March 2015 (100%) 1,322,305



36. DISPOSAL OF SUBSIDIARIES


(a) On 21 April 2015, the Company disposed of 51% equity interest in Lephone. The Company and Shenzhen Blephone

Technology Co., Ltd. had mutually agreed to terminate the Joint Venture and Shareholders’ Agreement. Pursuant to

the termination, the entire equity interest in Lephone which comprised 500,000 ordinary shares of RM1.00 each was

disposed of to Leow Soon Lok and Liew Hann Tsyr for a total cash consideration of RM500,000. The consideration

received by the Company was RM255,000. In consequence thereof, Lephone ceased to be a subsidiary of the Company.

The financial effects of the disposal at the date of disposal were summarised below:-


RM RM

Investment in a subsidiary - 255,000

Cash and bank balances 500,000 -

Non-controlling interests (245,000) -

Share of carrying amount of net assets disposed of 255,000 255,000

Less: Loss on disposal of a subsidiary - -

Consideration received, satisfied in cash 255,000 255,000

Less: Cash and bank balances of the subsidiary disposed of (500,000) -

Net cash (outflow)/inflow from the disposal of the subsidiary (245,000) 255,000

(b) On 11 May 2015, OA, a wholly-owned subsidiary of the Company, disposed of 70% equity interest in OAT which

comprised 7,000 ordinary shares of RM1.00 each to Goh Yeong Hui and Wan Ezwilme Bin Wan Omar for a total cash

consideration of RM2. In consequence thereof, OAT ceased to be a subsidiary of the Company.


The Group

RM

Other receivables, deposits and prepayments 200

Cash and bank balances 760

Other payables and accruals (6,044)

Non-controlling interests 127,279

Share of carrying amount of net assets disposed of 122,195

Less: Loss on disposal of a subsidiary (Note 29) (122,193)

Consideration received, satisfied in cash 2

Less: Cash and bank balances of the subsidiary disposed of (760)

Net cash outflow from the disposal of the subsidiary (758)



cont’d

36. DISPOSAL OF SUBSIDIARIES cont’d

(c) On 27 July 2015, OA, a wholly-owned subsidiary of the Company, disposed of 70% equity interest in OAA which

comprised 3,500 ordinary shares of AUD1.00 each to Khoo Teng Ken for a total cash consideration of AUD1.00

(equivalent to RM3.00). In consequence thereof, OAA ceased to be a subsidiary of the Company.


The Group

RM

Cash and bank balances 16,198

Other payables and accruals (1,849)

Non-controlling interests (4,304)

Share of carrying amount of net assets disposed of 10,045

Less: Loss on disposal of a subsidiary (Note 29) (10,042)

Consideration received, satisfied in cash 3

Less: Cash and bank balances of the subsidiary disposed of (16,198)

Net cash outflow from the disposal of the subsidiary (16,195)

(d) On 30 March 2016, the Company had entered into a Share Sale Agreement with Aboutsafety Dotcom Sdn. Bhd.

(“ADSB”) for the disposal of 100% equity interest in TSSB which comprised 500,000 ordinary shares of RM1.00 each

to ADSB for a total cash consideration of RM300,000. In consequence thereof, TSSB ceased to be a subsidiary of the

Company.



RM RM

Equipment 374,155 -

Trade receivables 959,354 -

Other receivables, deposits and prepayments 144,412 -

Cash and bank balances 1,126,305 -

Other payables and accruals (1,928,275) -

Hire purchase payable (312,904) -

Share of carrying amount of net assets disposed of 363,047 -

Amount owing by TSSB written off - 694,568

Less: Loss on disposal of a subsidiary (Note 29) (63,047) (394,568)

Consideration received, satisfied in cash 300,000 300,000

Less: Cash and bank balances of the subsidiary disposed of (1,126,305) -

Net cash (outflow)/inflow from the disposal of the subsidiary (826,305) 300,000



37. CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:-


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Short-term investments 13,846,188 13,370,993 13,846,188 13,370,993


25,217,780 27,077,480 18,651,500 17,836,199

38. KEY MANAGEMENT PERSONNEL COMPENSATION

The key management personnel of the Group and of the Company include executive directors and non-executive

directors of the Company.

(a) The key management personnel compensation during the financial year/period are as follows:-


1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM

Executive Directors:

Short-term employee benefits

- salaries and allowances 764,112 653,036

- defined contribution plan 91,704 82,127

- others 2,381 1,498

- fee 108,000 70,000

Non-executive Directors:

Short-term employee benefits

- allowances 6,750 6,300

- fee 170,000 152,000

Total 1,142,947 964,961



cont’d

38. KEY MANAGEMENT PERSONNEL COMPENSATION cont’d

(b) The number of the Company’s directors with total remuneration falling in bands of RM50,000 are as follows:-


1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

Number of Directors

Executive directors:

- Below RM50,000 - 1

- RM100,001 - RM150,000 - 1

- RM200,001 - RM250,000 1 1

- RM350,001 - RM400,000 2 -

- RM400,001 - RM450,000 - 1

Non-executive directors:

- Below RM50,000 6 5

9 9

39. SIGNIFICANT RELATED PARTY DISCLOSURES

(a) Identities of Related Parties

Parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly,

to control or jointly control the party or exercise significant influence over the party in making financial and

operating decisions, or vice versa, or where the Group or the Company and the party are subject to common

control.

In relation to the information detailed elsewhere in the financial statements, the Group has related party

relationships with its directors, key management personnel and entities within the same group of companies.



39. SIGNIFICANT RELATED PARTY DISCLOSURES cont’d

(b) Significant Related Party Transactions and Balances

Other than those disclosed elsewhere in the financial statements, the Group and the Company also carried out the

following significant transactions with the related parties during the financial year/period:-


1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

1.4.2016

to

31.3.2017

1.1.2015

to

31.3.2016

RM RM RM RM

Administrative expenses charged to subsidiaries - - - (122,356)

Administrative expenses charged by a subsidiary - - 12,128 2,264

Hosting and maintenance fee charged by a

subsidiary - - - 22,919

Outsourcing fee charged by a related party - 50,000 - -

Professional services charged by a related party 10,120 40,900 10,120 37,900

Rental charged to subsidiaries - - - (156,240)

Rental charged by a related party 111,600 78,120 111,600 78,120

Administrative expenses charged to a related

party - (15,867) - -

Rental charged to a related party (900) - (900) -

Staff secondment fee charged to a related party - (228,000) - -

40. OPERATING SEGMENTS

Operating segments are prepared in a manner consistent with the internal reporting provided to the Group Executive

Committee as its chief operating decision maker in order to allocate resources to segments and to assess their

performance. For management purposes, the Group is organised into business units based on their products and services

provided.

The Group is organised into 3 main reportable segments as follows:-

(i) Information Technology (“IT”) and Information Communication Technology (“ICT”) division - involved in the research

and development, system network support, trading in IT related products (hardware, software and accessories),

electronic commerce provider and facilitator, software development and support services and others (“IT and ICT

Division”);

(ii) Property construction and its related business (“Construction Division”); and

(iii) Investment holding (“Investment Holding Division”).



cont’d

40. OPERATING SEGMENTS cont’d

Business Segments

IT and ICTDivision

ConstructionDivision

Investment HoldingDivision The Group

RM RM RM RM

1.4.2016 to 31.3.2017

Revenue

External revenue/Consolidated revenue 129,480,280 7,075,161 - 136,555,441

Inter-segment revenue 4,528 - 2,300,000 2,304,528

129,484,808 7,075,161 2,300,000 138,859,969

Consolidation adjustments (2,304,528)

Consolidated revenue 136,555,441

Results

Segment results 2,866,104 2,081,090 (1,758,501) 3,188,693

Interest income 21,197 - 475,195 496,392

Reversal of impairment losses on trade receivables 471,494 - - 471,494

Amortisation of other intangible assets (142,857) - - (142,857)

Depreciation of property and equipment (800,638) (16,222) (175,451) (992,311)

Depreciation of investment property (93,600) - - (93,600)

Interest expense (5,678) - - (5,678)

Impairment losses on other intangible assets (750,000) - - (750,000)

Impairment losses on trade receivables (102,768) - - (102,768)

Loss on disposal of other investments - - (169,000) (169,000)

Consolidated profit/(loss) before taxation 1,463,254 2,064,868 (1,627,757) 1,900,365

Income tax expense (274,238) (72,769) - (347,007)

Consolidated profit/(loss) after taxation 1,189,016 1,992,099 (1,627,757) 1,553,358




Business Segments cont’d

IT and ICTDivision



RM RM RM RM

31.3.2017

Assets

Segment assets/Consolidated total assets 42,640,270 24,440,091 20,928,866 88,009,227

Liabilities

Segment liabilities/Consolidated total liabilities 21,849,190 61,248 130,854 22,041,292

Other Segment Items

Additions to non-current asset other than financial

instrument:

- Property and equipment 1,174,362 2,141 99,581 1,276,084

1.1.2015 to 31.3.2016

Revenue

External revenue 188,686,439 8,941,721 26,400 197,654,560

Inter-segment revenue 26,315 - 4,500,000 4,526,315

188,712,754 8,941,721 4,526,400 202,180,875

Consolidation adjustments (4,526,315)

Consolidated revenue 197,654,560



cont’d



IT and ICTDivision



RM RM RM RM

1.1.2015 to 31.3.2016

Results

Segment results (3,426) (1,792,294) (2,376,835) (4,172,555)

Interest income 113,360 - 571,677 685,037

Reversal of impairment losses on trade receivables 35,850 - - 35,850

Amortisation of other intangible assets (526,310) - - (526,310)

Bad debts written off (6,238) - - (6,238)

Depreciation of property and equipment (2,319,913) (3,656) (213,851) (2,537,420)

Depreciation of investment property (46,800) - - (46,800)

Interest expense (33,910) - - (33,910)

Impairment losses of equipment (4,361,620) - - (4,361,620)

Impairment losses of goodwill on consolidation (1,420,356) - - (1,420,356)

Impairment losses of other intangible assets (1,430,833) - - (1,430,833)

Impairment losses on trade receivables (4,191,459) - - (4,191,459)

Impairment losses on other receivable (16,712) - - (16,712)

Gain/(Loss) on disposal of subsidiaries (132,235) - (63,047) (195,282)

Share-based payment arising from ESOS (1,200,000) - - (1,200,000)

Consolidated loss before taxation (15,540,602) (1,795,950) (2,082,056) (19,418,608)

Income tax expense (1,314,957) - - (1,314,957)

Consolidated loss after taxation (16,855,559) (1,795,950) (2,082,056) (20,733,565)

31.3.2016

Assets

Segment assets/Consolidated total assets 47,842,409 21,351,697 20,385,845 89,579,951

Liabilities

Segment liabilities/Consolidated total liabilities 24,719,518 340,684 105,172 25,165,374

Other Segment Items

Additions to non-current asset other than financial

instrument:

- Property and equipment 4,759,544 62,770 - 4,822,314

- Other intangible assets 2,200,000 - - 2,200,000





The Group principally operates in Malaysia.

During the current financial year, there is no major customer with revenue from each customer equal to or more than 10%

of the Group’s revenue.

In the previous financial period, there is no major customer with revenue from each customer equal to or more than 10%

of the Group’s revenue.

41. FINANCIAL INSTRUMENTS

The Group’s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and

equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the

unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

41.1 Financial Risk Management Policies

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(a) Market Risk

(i) Foreign Currency Risk

The Group does not have material foreign currency transactions, assets and liabilities and hence is not

exposed to any significant or material currency risk.

(ii) Interest Rate Risk

The Group does not have any floating rate borrowings and hence, is not exposed to interest rate risk.

(iii) Equity Price Risk

The Group’s principal exposure to equity price risk arises mainly from changes in quoted investment

prices. The Group manages its exposure to equity price risk by maintaining a portfolio of equities with

different risk profiles.

Equity Price Risk Sensitivity Analysis

The following table details the sensitivity analysis to a reasonably possible change in the prices of the

quoted investments at the end of the reporting period, with all other variables held constant:-

The Group/Company

31.3.2017 31.3.2016

RM RM

Effects on Profit/(Loss) After Taxation

Increase of 10% 1,384,619 1,337,099

Decrease of 10% (1,384,619) (1,337,099)



cont’d

41. FINANCIAL INSTRUMENTS cont’d

41.1 Financial Risk Management Policies cont’d

(b) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other

receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits

and monitoring procedures on an ongoing basis. For other financial assets (including quoted investments,

cash and bank balances and derivatives), the Group minimises credit risk by dealing exclusively with high

credit rating counterparties.

The Group uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables

having significant balances past due or more than 180 days, which are deemed to have higher credit risk, are

monitored individually.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect

of the trade and other receivables as appropriate. The main components of this allowance are a specific loss

component that relates to individually significant exposures, and a collective loss component established

for groups of similar assets in respect of losses that have been incurred but not yet identified. Impairment is

estimated by management based on prior experience and the current economic environment.

The Company provides corporate guarantees to a supplier for purchases made by a subsidiary. The Company

monitors the payments made by the subsidiary.

(i) Credit Risk Concentration Profile

The Group’s major concentration of credit risk relates to the amounts owing by 2 (31.3.2016 - 2)

customers which constituted approximately 83% (31.3.2016 - 82%) of its trade receivables at the end of

the reporting period.

(ii) Exposure to Credit Risk

At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying

amount of each class of financial assets recognised in the statement of financial position of the Group

and of the Company after deducting any allowance for impairment losses (where applicable).

In addition, the Company’s maximum exposure to credit risk also includes corporate guarantees

provided to a supplier for purchases made by a subsidiary as disclosed under the ‘Maturity Analysis’

of item (c) below, representing the amount owing to a supplier by its subsidiary as at the end of the

reporting period. These corporate guarantees have not been recognised in the Company’s financial

statements since their fair values on initial recognition were not material. As at the end of the reporting

period, there was no indication that the subsidiary would default on payment.



41. FINANCIAL INSTRUMENTS cont’d 41.1 Financial Risk Management Policies cont’d (b) Credit Risk cont’d

(iii) Ageing Analysis

The ageing analysis of trade receivables at the end of the reporting period is as follows:-

Gross

Amount

Individual

Impairment

Collective

Impairment

Carrying

Value


31.3.2017

Not past due 2,296,897 - - 2,296,897

Past due:

- less than 3 months 648,292 - - 648,292

- 3 to 6 months 592,005 - - 592,005

- over 6 months 8,910,721 (424) (13,332) 8,896,965

- over 1 year 1,004,207 (907,684) (92,062) 4,461

13,452,122 (908,108) (105,394) 12,438,620

31.3.2016

Not past due 6,134,776 - - 6,134,776

Past due:

- less than 3 months 623,333 - - 623,333

- 3 to 6 months 4,332,944 - - 4,332,944

- over 6 months 54,121 - (20,328) 33,793

- over 1 year 4,235,749 (4,118,427) (44,762) 72,560

15,380,923 (4,118,427) (65,090) 11,197,406

At the end of the reporting period, trade receivables that are individually impaired were those in

significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

The collective impairment allowance is determined based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience.

Trade receivables that are past due but not impaired

The Group believes that no additional impairment allowance is necessary in respect of these trade receivables. They are substantially companies with good collection track record and no recent history of default.

Trade receivables that are neither past due nor impaired

A significant portion of trade receivables that are neither past due nor impaired are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 180 days,

which are deemed to have higher credit risk, are monitored individually.



cont’d



(c) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk

management by maintaining sufficient cash balances and the availability of funding through certain

committed credit facilities.

Maturity Analysis

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period

based on contractual undiscounted cash flows (including interest payments computed using contractual rates

or, if floating, based on the rates at the end of the reporting period):-

Contractual

Interest

Rate

Carrying

Amount

Contractual

Undiscounted

Cash Flows

Within

1 Year

1 – 5

Years

The Group % RM RM RM RM

31.3.2017

Trade payables - 21,326,455 21,326,455 21,326,455 -

Other payables and

accruals - 487,287 487,287 487,287 -

Hire purchase payables 2.88 113,789 128,271 32,032 96,239

21,927,531 21,942,013 21,845,774 96,239

31.3.2016

Trade payables - 24,143,269 24,143,269 24,143,269 -

Other payables and

accruals - 680,394 680,394 680,394 -

Hire purchase payables 2.88 140,000 160,161 32,032 128,129

24,963,663 24,983,824 24,855,695 128,129





(c) Liquidity Risk cont’d

Contractual

Interest

Rate

Carrying

Amount

Contractual

Undiscounted

Cash Flows

Within

1 Year

The Company % RM RM RM

31.3.2017

Other payables and accruals - 130,854 130,854 130,854

Financial guarantee contracts in relation

to corporate guarantees extended

to a supplier for purchase made by a

subsidiary* - - 225,828 225,828

130,854 356,682 356,682

31.3.2016

Other payables and accruals - 105,172 105,172 105,172

Financial guarantee contracts in relation

to corporate guarantees extended

to a supplier for purchase made by a

subsidiary* - - 356,246 356,246

105,172 461,418 461,418

Note:-

* The contractual undiscounted cash flows represent the amount owing to a supplier by a subsidiary at the end of the reporting

period. The financial guarantee has not been recognised since its fair values on initial recognition was not material.

41.2 Capital Risk Management

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital

structure so as to support its businesses and maximise shareholders’ value. To achieve this objective, the Group may

make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount

of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio. The Group’s strategies were unchanged from

the previous financial year. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is

calculated as interest-bearing borrowings less cash and cash equivalents.

The debt-to-equity ratio as at 31 March 2017 is not presented as it is not applicable as the cash and cash equivalents

exceeded the interest-bearing borrowings.



cont’d


41.3 Classification Of Financial Instruments cont’d


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Financial Assets

Available-for-sale Financial Asset

Other investments - 199,000 - 199,000

Loans and Receivables Financial Assets

Trade receivables 12,438,620 11,197,406 - -

Other receivables and deposits 15,128,948 14,354,838 25,860 24,025

Lease receivable - 163,651 - -

Amounts owing by subsidiaries - - 33,830,979 35,680,599


38,939,160 39,422,382 38,662,151 40,169,830

Fair Value through Profit or Loss

Short-term investments 13,846,188 13,370,993 13,846,188 13,370,993

Financial Liability

Other Financial Liabilities

Trade payables 21,326,455 24,143,269 - -

Other payables and accruals 487,287 680,394 130,854 105,172

Hire purchase payables 113,789 140,000 - -

21,927,531 24,963,663 130,854 105,172



41

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41.4 Fair Value Information cont’d

(a) Fair Value of Financial Instrument Carried at Fair Value

The fair value at short-term investments are determined at their observable input, either directly or indirectly.

(b) Fair Value of Financial Instrument not Carried at Fair Value

The fair value of the Group’s hire purchase payables that carry fixed interest rate is determined by discounting the relevant future contractual cash flows using current market interest rate for similar instruments at the end of the reporting period. The interest rate used to discount the estimated cash flows is 2.88% (31.3.2016 - 2.88%).

42. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

The Companies Act 2016 came into effect on 31 January 2017 (except for Section 241 and Division 8 of Part III of the said Act) and replaced the Companies Act 1965.

Amongst the key changes introduced under the Companies Act 2016 that have affected the financial statement of the Group and of the Company upon its initial adoption are:-

i) Removal of the authorised share capital; ii) Ordinary shares ceased to have par value; and iii) Share premium account will become part of the share capital.

The adoption of the Companies Act 2016 has been applied prospectively and the impacts of adoption are disclosed in the respective notes to the financial statements.

43. SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD

(a) On 27 April 2017, the Company entered into a conditional Sale and Purchase Agreement (“SPA”) with a vendor for the acquisition of two properties for a total consideration of RM4.8 million. The purpose of the acquisition is to enable the settlement of debt owing to the Group by a customer against the purchase price of the properties in accordance with the terms and conditions of the SPA.

(b) On 7 September 2015, Super Kian, a wholly-owned subsidiary of the Company, entered into a Managing Contractor Agreement (“MCA”) with a customer, whereby Super Kian was appointed as the managing contractor for the development of a piece of land of approximately 12.1407 hectares held under HS(D) 3832, PT4141, Mukim Banggul in Kemaman, Terengganu owned by Lembaga Pemagang Amanah Yayasan Pembangunan Keluarga Terengganu. Pursuant to the MCA, Super Kian’s roles include the administration, management, consulting, reporting, communication, co-ordination, assisting in the sales and marketing as well as responsible in assisting and advising the customer on the appointment of a team of external contractors, subcontractors, engineers, surveyors and/or other professional consultants required for the development of the land.

On 11 May 2017, the Company has received a letter from the customer whereby the customer has requested Super Kian to temporarily stop the managing contractor work as the customer has decided to delay the development of the land for a period of one (1) year from 11 May 2017. The postponement of the project by the customer is mainly due to the unstable economic conditions affecting the oil and gas industry in Kemaman, which in turn caused a lower demand for properties and has been further affected by lower purchasing power due to tightened borrowing policies imposed by financial institutions on prospective purchasers. As a result of the customer’s request to delay, the customer froze the calculation of the management period until the re-commencement of the managing contractor work. The customer agrees that Super Kian will not be liable for any liquidated and ascertained damages as a result of its decision to postpone the work.

44. COMPARATIVE FIGURES

The comparative figures covered the financial period from 1 January 2015 to 31 March 2016. Consequently, the comparative figures for the statements of profit or loss and other comprehensive income, statements of changes in equity, statements of cash flows and their related notes are not comparable to that for the current 12-month period ended 31

March 2017.



cont’d

45. SUPPLEMENTARY INFORMATION – DISCLOSURE OF REALISED AND UNREALISED PROFITS/(LOSSES)

The breakdown of the retained profit/(accumulated losses) of the Group and the Company at the end of the reporting

period into realised and unrealised losses are presented in accordance with the directive issued by Bursa Securities and

prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses

in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian

Institute of Accountants, as follows:-


31.3.2017 31.3.2016 31.3.2017 31.3.2016

RM RM RM RM

Total retained profit/ (accumulated losses):

- realised 216,932 (24,568,829) 9,429,255 (1,290,646)

- unrealised - - - -

216,932 (24,568,829) 9,429,255 (1,290,646)

Less: Consolidation adjustments 5,092,437 18,274,933 - -

At 31 March 5,309,369 (6,293,896) 9,429,255 (1,290,646)


List of PropertiesAs At 31 March 2017

Location Description

Date Of

Acquisition

Approximate

Age of

Buildings

(Years) Tenure

Built-up

Area/

Land Area

(sq. ft.)

Existing

Use

Net Book

Value

(RM’000)

H.S. (M) 10263

Lot PT 113 Seksyen 40,

Bandar Petaling Jaya,

Mukim Damansara

3 storey

shop office

11 October

2006

10 Leasehold

(99 years)

expiring on

28.9.2103

11,572 Office

premises

2,141

Lot No. 63858

Mukim of Plentong,

District of Johor Bahru,

Johor Darul Tazkim

4 storey

shop office

17 March

2014

21 Freehold 1,679 Rented

out

1,337

H.S(D) 9654 PT 13247

Mukim Bentong,

District of Bentong,

Negeri Pahang

A piece

of vacant

agricultural

land

11 December

2013

- Leasehold

(99 years)

expiring on

14.7.2094

46,177 Vacant

land

808

Lot No. 65092

Mukim of Bandar

Sungai Buloh,

District of Gombak ,

Selangor

Two and

half storey

bungalow

house

15 June 2015 13 Freehold 9,149 Vacant 3,395


Analysis of ShareholdingsAs at 21 June 2017

Issued Share Capital : RM55,444,174.50 comprising of 554,441,745 ordinary shares

Class of Shares : Ordinary shares

Voting Rights : One (1) vote per ordinary share

Number of shareholders : 4,430

ANALYSIS OF SHAREHOLDINGS

Holdings

No. of

shareholders

% of

shareholders

No of

shares held

% of

shareholdings

1 – 99 270 6.08 13,057 0.00

100 – 1,000 225 5.08 131,105 0.02

1,001 – 10,000 971 21.92 6,515,100 1.18

10,001 – 100,000 2,353 53.12 106,591,880 19.23

100,001 – 27,722,086* 609 13.75 247,910,601 44.71

27,722,087 and above** 2 0.05 193,280,002 34.86

TOTAL 4,430 100.00 554,441,745 100.00

Note:

* less than 5% of issued shares

** 5% and above of issued shares

LIST OF SUBSTANTIAL SHAREHOLDERS (BASED ON REGISTER OF SUBSTANTIAL SHAREHOLDERS)

Direct Indirect

Shareholders No. of shares % No. of shares %

Kenanga Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Master Knowledge Sdn Bhd

163,280,002 29.45 - -

RHB Capital Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Fong Siling (CEB)

30,000,000 5.41 - -

LIST OF DIRECTORS’ SHAREHOLDINGS

Direct Deemed

No. of Shares % No. of Shares %

Tan Ooi Jin - - - -

Leong Kah Mun - - - -

Lee Li Chain - - - -

Dato’ Chairil Nazri Bin Ahmad - - - -

Yap Kien Ming - - - -

Tan Tzu Pin - - - -

Sam Kok Hong - - - -


Analysis of ShareholdingsAs at 21 June 2017cont’d

LIST OF THIRTY (30) LARGEST SHAREHOLDERS

Name

No. of

shares held Percentage (%)

1 Kenanga Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Master Knowledge Sdn Bhd

163,280,002 29.45

2 RHB Capital Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Fong Siling (CEB)

30,000,000 5.41

3 Teoh Hooi Bin 5,181,500 0.93

4 Cimsec Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Lu Yieng Lung (Kuching-CL)

4,095,000 0.74

5 Maybank Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Sia Boon Huat

4,075,400 0.74

6 Lee Ooi Chong 3,514,200 0.63

7 Maybank Securities Nominees (Tempatan) Sdn Bhd

Lim & Tan Securities Pte Ltd for Lim Soo Kim

3,500,000 0.63

8 Citigroup Nominees (Tempatan) Sdn Bhd

Exempt an for OCBC Securities Private Limited (Client A/C-R ES)

3,400,000 0.61

9 Malacca Equity Nominees (Tempatan) Sdn Bhd

Exempt An for Phillip Capital Management Sdn Bhd (EPF)

3,306,750 0.60

10 Toh Chee Seng 3,000,000 0.54

11 Lim Chia Ling 2,950,000 0.53

12 Affin Hwang Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Chung Kin Chuan (CHU0226C)

2,937,400 0.53

13 Cimsec Nominees (Tempatan) Sdn Bhd

Exempt An for CIMB Securities (Singapore) Pte Ltd (Retail Clients)

2,750,000 0.50

14 Maybank Securities Nominees (Asing) Sdn Bhd

Lim & Tan Securities Pte Ltd for Chua Siew Gain

2,500,000 0.45

15 Chew Seng Tooi 2,000,000 0.36

16 DB (Malaysia) Nominee (Asing) Sdn Bhd

Exempt An for Bank of Singapore Limited

2,000,000 0.36

17 Lim Bee Kua 2,000,000 0.36

18 HLIB Nominees (Tempatan) Sdn Bhd

Pledged Securities Acoount for Ong Chin Seong

1,930,700 0.35

19 Public Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Tan Soon Hin (E-BPJ)

1,900,000 0.34

20 RHB Capital Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Soo Siew Seng (CEB)

1,900,000 0.34


Analysis of ShareholdingsAs at 21 June 2017

cont’d

LIST OF THIRTY (30) LARGEST SHAREHOLDERS cont’d

Name

No. of

shares held Percentage (%)


Pledged Securities Account for Vincent Tan Seng Chye

1,825,000 0.33

22 Kenanga Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Heng Yong Kang @ Wang Yong Kang (08HE101Q1-008)

1,795,000 0.32

23 Lau Wai Kok 1,700,000 0.31


Maybank Kim Eng Securities Pte Ltd for Mohd Amir Bin Mohamed Senawi

1,600,000 0.29

25 Citigroup Nominees (Asing) Sdn Bhd

Exempt An for UBS AG Singapore (Foreign)

1,500,000 0.27

26 Law King Yong 1,500,000 0.27

27 Nurul Amirah Syazana Binti Mohd Amir 1,500,000 0.27

28 Tan Chong Jun 1,500,000 0.27

29 Public Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Chew Seng Tooi (E-BMM)

1,385,400 0.25

30 Maybank Nominees (Tempatan) Sdn Bhd Koo Hooi Peng 1,350,000 0.24

TOTAL 261,876,352 47.22

This page is intentionally left blank.

SKH CONSORTIUM BERHAD (383028-D)

(Incorporated in Malaysia)

PROXY FORM

*I/We NRIC/Co. No. (full name in block letters)

of (full address)

Tel No. being a Member(s) of SKH CONSORTIUM BERHAD (383028-D), hereby appoint # the

Chairman of the Meeting or

NRIC/Co. No. of

or failing him/her

NRIC/Co. No.

of

(full address)

as *my/our proxy to vote for *me/us on *my/our behalf at the Twenty-First Annual General Meeting of the Company to be held

Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Friday,

25 August 2017 at 2.30 p.m. or at any adjournment thereof and to vote as indicated below:

Item Ordinary Resolutions

1. To receive the Audited Financial Statements for the financial period ended 31

March 2017 together with the Reports of the Directors and Auditors thereon

Ordinary

Resolution For Against

2. To re-elect Mr. Tan Ooi Jin as Director 1

3. To re-elect Ms. Lee Li Chain as Director 2

4. To re-elect Mr. Leong Kah Mun as Director 3

5. To approve the Directors’ fees 4

6. To approve the payment of Directors’ benefits up to an amount of RM20,000

from 01 April 2017 until the next Annual General Meeting of the Company

5

7. To re-appoint Messrs Crowe Horwath as Auditors of the Company and to

authorise the Directors to fix their remuneration

6

8. To authorise Directors to issue shares in the Company pursuant to Section 75

and Section 76 of the Companies Act, 2016

7

Mark either box if you wish to direct the proxy how to vote. If no mark is made the proxy may vote on the resolution or abstain

from voting as the proxy thinks fit. If you appoint two proxies and wish them to vote differently this should be specified.

# If you wish to appoint other person(s) to be your proxy/proxies, kindly delete the words “The Chairman of the Meeting” and insert the name(s) of

the person(s) desired.

* Delete if not applicable.

Signed this day of 2017

Number of Shares Held CDS Account No.

- -

(full name in block letters)

(full address)

(full name in block letters)

Signature/Common Seal of Shareholder

Affix

StampThe Company Secretary

SKH CONSORTIUM BERHAD(383028-D)

No. 9A, Jalan Medan Tuanku

Medan Tuanku

50300 Kuala Lumpur

Wilayah Persekutuan

1st Fold Here

Fold This Flap For Sealing

Then Fold Here

Notes:

(1) A member may appoint up to two (2) proxies to attend and vote instead. A proxy may but need not be a member of the Company. If the proxy is not a member, the proxy need not be an advocate, an approved company auditor or a person approved by the Companies Commission of Malaysia.

(2) Where a Member appoints more than one (1) proxy, he shall specify the proportion of his holdings to be represented by each proxy, failing which the appointment shall be invalid.

(3) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, such member may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(4) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

(5) If the appointor is a corporation, this form must be executed under its common seal or under the hand of an attorney duly authorised.

(6) To be valid, this form which is duly completed must be deposited at the registered office of the Company at No. 9A, Jalan Medan Tuanku, Medan Tuanku, 50300 Kuala Lumpur, Wilayah Persekutuan not less than forty eights (48) hours before the time for holding the meeting PROVIDED THAT in the event the member(s) duly executes the form of proxy but does not name any proxy, such member(s) shall be deemed to have appointed the Chairman of the meeting as his/their proxy, PROVIDED ALWAYS that the rest of the proxy form, other than the particulars of the proxy have been duly completed by the member(s).

(7) For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting the Bursa Malaysia Depository Sdn. Bhd. to make available to the Company pursuant to Article 58 of the Articles of Association of the Company and Rule 7.16(2) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, a Record of Depositors as at 18 August 2017 and only a Depositor whose name appear on such Record of Depositors shall be entitled to attend, speak and vote at this meeting.

(8) All resolutions as set out in the notice are to be voted by poll.

SKH CONSORTIUM BERHAD (383028-D)

Unit C-01-3, Block C, Plaza Glomac, No. 6, Jalan SS7/19, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia.

Tel No. : (6)03 - 7805 2188 Fax No. : (6)03 - 7805 5688

www.skh.my

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