TURIYA BERHAD (55576-A)

Transcription

1 TURIYA BERHAD (55576-A) ANNUAL REPORT 2017 ANNUAL REPORT 2017 TURIYA BERHAD TURIYA BERHAD (55576-A) Suite 7.3, 7th Floor, Wisma Chase Perdana, Changkat Semantan Damansara Heights, Kuala Lumpur, Malaysia Tel: Fax: Website: A

2 Contents Corporate Profile Corporate Structure Five-Year Financial Highlights Corporate Information Chairman s Statement Management Discussion and Analysis Directors Profile Audit Committee Report Statement on Corporate Governance Statement on Directors Responsibility Statement on Risk Management and Internal Control Financial Statements List of Properties Location of Operations Analysis of Shareholdings Other Information Notice of the Annual General Meeting Statement Accompanying Notice of Annual General Meeting Proxy Form

3 corporate profile TURIYA BERHAD ( Turiya and/or the Company ) ( has a history that dates back to 1961 when it was established as a private limited company known as Sitt Tatt Sdn Bhd. After more than 20 years of growth and expansion, TURIYA was listed on the Main Board of Bursa Malaysia Securities Berhad on 19 October As at 31 March 2017, TURIYA has an authorized share capital of RM500 million and an issued and paid up share capital of RM228.7 million. From its beginning as a company dealing in commodities, building materials, engine lubricants and forwarding services, TURIYA started its growth strategy by expanding into industrial gases in 1974 via a joint venture with Air Products & Chemicals, Inc USA (which was subsequently disposed in January 2007). Thereafter, the Company ventured into industrial chemicals, label printing and welding electrodes. In 2003, TURIYA diversified its business further into the semiconductor plating services, specialty chemical manufacturing for electroplating process and production of electroplating equipments through the acquisition of three Singapore companies, namely Pyramid Manufacturing Industries Pte Ltd ( Pyramid ), CEM Machinery Pte Ltd (which was disposed on 1 October 2014) and PMI Plating Services Pte Ltd (which was dissolved on 10 March 2011). Wisma Chase Perdana 2 Annual Report 2017

4 corporate profile (cont d) Factory of Pyramid Manufacturing Industries Pte. Ltd. Pyramid ( is principally involved in the manufacturing, distribution, research and development of specialty chemical products for the electroplating processes in the semiconductor industry. These products have wide applications in the semiconductor and electroplating industry whilst Pyramid s propriety electroplating process serves many leading customers in the semiconductor, electronics and automotive sectors. Pyramid is continuously exploring its Research and Development activities in the semiconductor chemical solutions and offers various solutions for specific customer requests. While electroplating remains as its core business, Pyramid is continues to serve both in upstream and downstream activities as well as other industries where it shares common applications. Pyramid s capability in formulating the chemistry according to customer requirements is one of its key competencies. In 2005, CEM s wholly owned subsidiary, Wuxi CEM Electronics Equipment Co. Ltd., commenced its operations to serve a niche semiconductor market in China. It has discontinued its operations since end of March Due to the cyclical nature and uncertainty in the semiconductor business, the Company diversified its earnings base into property investment. In 2009, the Company completed its acquisition of Wisma Chase Perdana (WCP). WCP is an office building strategically located next to Gate 2, Istana Negara in Damansara Heights, Kuala Lumpur totaling 245,238 square feet and currently 37.6% tenanted. It is also in the proximity of the new Semantan MRT station which commenced operations in December This building provides the Company with a long term sustainable rental income. Moving forward, TURIYA will continue to focus and expand on its core businesses. This will provide the Company with a sound base to generate a robust yet sustainable earning in the future. Annual Report

5 corporate structure 4 Annual Report 2017

6 five-year financial highlights Financial Year Ended 31 March # (RM 000) Turnover Continuing operations 19,233 21,773 26,819 32,219 34,784 Discontinued operations (Loss)/Profit for the financial year attributable to: Equity holders of the Company (1,451) 1,914 1,230 (27,087) (15,567) Non-controlling interests 273 (69) (316) (1,120) (686) Paid-up Capital 228, , , , ,728 Total Tangible Assets 173, , , , ,782 Shareholders Fund 127, , , , ,683 (Loss)/Earnings Per Share (sen) (0.63) (11.84) (6.81) Net Assets Per Ordinary Share Attributable to Equity Holders of The Company (sen) Net Tangible Assets Per Share (sen) # Note: # As restated. Annual Report

7 five-year financial highlights (cont d) 6 Annual Report 2017

8 corporate information BOARD OF DIRECTORS Executive Chairman Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. Managing Director Dato Mohamed Nazir Bin Nor Md Independent Non-Executive Directors Mr. Jayapalasingam Kandiah Mr. Abdulla Abdulaziz Ali Taleb Mr. Khaled Yusuf Abdulla AbdulKarim Janahi (Vacated of Office 16 August 2016) Non-Independent Non-Executive Director Ms. Usha Nathan A. Vaidyanathan EXECUTIVE COMMITTEE Committee Members Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. (Chairman) Dato Mohamed Nazir Bin Nor Md AUDIT COMMITTEE Committee Members Mr. Jayapalasingam Kandiah (Chairman) Ms. Usha Nathan A. Vaidyanathan Mr. Abdulla Abdulaziz Ali Taleb NOMINATION COMMITTEE Committee Members Mr. Jayapalasingam Kandiah (Chairman) Ms. Usha Nathan A. Vaidyanathan Mr. Abdulla Abdulaziz Ali Taleb REMUNERATION COMMITTEE Committee Members Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. (Chairman) Mr. Jayapalasingam Kandiah Mr. Abdulla Abdulaziz Ali Taleb INVESTMENT COMMITTEE Committee Members Dato Mohamed Nazir Bin Nor Md (Chairman) Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. Mr. Jayapalasingam Kandiah RISK MANAGEMENT COMMITTEE Committee Members Mr. Jayapalasingam Kandiah (Chairman) Dato Mohamed Nazir Bin Nor Md Mr. Lau Tuck Wai COMPANY SECRETARY Ms. Wong Youn Kim (MAICSA ) AUDITORS Baker Tilly AC (AF ) Chartered Accountants Baker Tilly MH Tower Level 10, Tower 1, Avenue 5 Bangsar South City Kuala Lumpur Telephone : Facsimile : REGISTERED OFFICE Suite 7.3, 7th Floor Wisma Chase Perdana Changkat Semantan Damansara Heights Kuala Lumpur Telephone : Facsimile : PRINCIPAL PLACE OF BUSINESSES Malaysia Turiya Berhad Suite 7.3, 7th Floor Wisma Chase Perdana Changkat Semantan Damansara Heights Kuala Lumpur Telephone : Facsimile : Singapore Turiya Technologies Pte. Ltd. No. 87, Tuas Avenue 1 Singapore Telephone : Facsimile : / U.S.A. Amcare Labs International Inc. U. Amcare Labs International c/o BusinessSuites Harborplace 111 S. Calvert St. Suite 2700 Box 672, Baltimore, MD Telephone : Facsimile : SHARE REGISTRAR Symphony Share Registrars Sdn. Bhd. Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/ Petaling Jaya Selangor Darul Ehsan Telephone : Facsimile : /52 PRINCIPAL BANKERS CIMB Bank Berhad Bank Kerjasama Rakyat Malaysia Berhad United Overseas Bank Ltd., Singapore DBS Bank Ltd., Singapore STOCK EXCHANGE LISTING Listed on the Main Board of Bursa Malaysia Securities Berhad on 19 October Sector : Industrial Products Stock name : Turiya Stock code : 4359 Annual Report

9 Chairman s statement I am pleased to present on behalf of the Board of Directors of the Company, the Annual Report and the Audited Financial Statements for the financial year ended 31 March 2017 of Turiya Berhad. On behalf of the Board of Directors, I wish to extend my appreciation to the staff and management in their dedication in carrying out their duties over the past year. I would also like to thank our customers, shareholders, business partners, government authorities and business associates for their continued support and trust. Further information of Turiya s performance in the financial year is detailed in the Management Discussion and Analysis on page 9. Corporate Social Responsibility Through its corporate social responsibility programme, the Group endeavours to reach out to the underprivileged society by way of contributions through non-profit organizations. The Group also continues to demonstrate and emphasise on environmental conservation, improving air quality and reducing waste in its business. CORPORATE GOVERNANCE In line with good corporate governance principles and practices, the Board of Directors will continue to enhance its role in the company by upholding business accountability, transparency and responsibility to safeguard the interest of all the investors and preserve shareholders value. DIVIDEND The Board of Directors does not recommend any dividend for the current financial year. Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. Executive Chairman 8 Annual Report 2017

10 Management Discussion and Analysis BUSINESS OVERVIEW The Klang Valley office market is expected to remain subdued during 2017 and 2018 with increase in supply and it remains a tenant-favoured market. Existing office buildings have to put more effort to initiate asset enhancement through refurbishment, conversion or redevelopment to optimise the returns. Taking the advice of property agents and consultants, Turiya has initiated several upgrading works in Wisma Chase Perdana. The Company is in the midst of replacing all the air-conditioning system with more reliable and energy efficient units; refurbished the food court on level 3 as well as considering a complete upgrade of all common areas in the building under phase one. The second phase of upgrading works would involve the façade of the building. All these will enhance the building s value and help to increase the occupancy. In addition, the Company is considering to offer more attractive tenancy terms and incentives in return for long term tenancy. Semiconductor businesses are cyclical in nature, susceptible to global economic prospects and outlooks. World Semiconductor Trade Statistics (WSTS) forecasted the worldwide Semiconductor market to grow in 2017 and 2018 up to 3% and 2% respectively. This augurs well for the business. FINANCIAL OVERVIEW Changes RM Million RM Million % Total Revenue (2.54) (Loss)/Profit for the Financial Year (1.18) The Group recorded revenue of RM19.23 million for the financial year ended 31st March 2017 as compared to RM21.77 million in the preceding financial year. This represents a decline of RM2.54 million or 11.66% which was mainly due to non-renewal of tenancies in the property segment despite the marked improvement in revenue and profit in the semiconductor segment for the financial year. As a result, the group recorded a loss of RM1.18 million for the financial year, compared to the profit of RM1.85 million reported in the preceding financial year. FUTURE PROSPECTS The management will continue its efforts on operational efficiency and effective cost management to maintain the Group s competitive edge in the semiconductor industry and the investment property business. With the completion of the Mass Rapid Transit (MRT) s Semantan station, the marketability of Wisma Chase Perdana is expected to improve significantly in coming years. The Group will continue to seek alternative sources of revenue streams as well. Annual Report

11 Directors profile TAN SRI DATUK DR. MOHAN A/L M.K. SWAMI, J.P. Executive Chairman Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P., a Malaysian, aged 66, was appointed to the Board of Turiya Berhad ( Turiya ) on 23 November He was subsequently appointed the Executive Deputy Chairman of Turiya on 2 April There were several re-designations until 25 August 2008 when he was appointed as the Executive Chairman till to-date. He is also the Chairman of the Executive Committee and Remuneration Committee and a member of the Investment Committee of Turiya. Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. graduated in Medicine from Mysore University (India) and commenced his career in 1978 in Sabah, Malaysia. He became the Assistant Director of Medical Services in 1980 and later went on to establish the largest private group medical practice in Sabah. Between 1996 and 2000, Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. was actively involved in International Conferences and was a member of many overseas business delegations led by various government leaders and the Prime Minister of Malaysia. He headed the Business Delegation of the G15 Conference in Harare, Zimbabwe in November He was appointed as the Honorary Consul for the Republic of Botswana in Malaysia in 1999, a position he holds till to-date. He was also a member of the National Economic Consultative Council II (MAPEN II). In 2011 Perdana University, a Public Private Partnership project was established through Academic Medical Centre Sdn Bhd and he serves as the Chairman of the Board of Governors. Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. was awarded the BrandLaureate, (the Brand Icon Leadership Award) in 2011 and is recognised as one of Malaysia s leading philanthropist (Forbes Asia, July 2012). In April 2013, he was appointed as the Chancellor of the Swami Rama Himalayan University in India. He is also on the Board of Epsom Properties Ltd (India), a company listed on the Bombay Stock Exchange and Chennai Stock Exchange. He is deemed a major shareholder of the Company by virtue of his 100% equity interest held in Empire Holdings Ltd. He does not have any family relationship with any other director and/or major shareholder of the Company nor does he has any conflict of interest with the Company. Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. has not been convicted of any offence within the past 10 years. 10 Annual Report 2017

12 directors profile (cont d) DATO MOHAMED NAZIR BIN NOR MD Managing Director Dato Mohamed Nazir Bin Nor Md, a Malaysian, aged 40, was appointed to the Board of Turiya on 26 August 2015 as Managing Director. He is the Chairman of Investment Committee and also a member of the Executive Committee and Risk Management Committee of the Company. He was a corporate and investment banker for 6 years, having served in Public Bank and CIMB Bank (both Bumiputra-Commerce Bank and CIMB Investment Bank) before joining Sime Darby Berhad. In 2012, Dato Nazir was appointed as a Deputy General Manager in Johor Corporation and subsequently moved to Inai Kiara, where he served as the Chief Executive Officer of the investment holding Company of Inai Kiara Group for a period of 3 years. Dato Nazir is familiar with both banking and corporate sectors, specialising in refinancing, restructuring and corporate exercises. Currently, he is the Group Managing Director of Chase Perdana Sdn Bhd. Dato Nazir also serves as a Director in his private company Fawster Motorsports Sdn Bhd, an automobile workshop based in Sunway, Selangor. He does not have any family relationship with any other director and/or any major shareholder of the Company nor does he has any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Annual Report

13 directors profile (cont d) JAYAPALASINGAM KANDIAH Independent Non-Executive Director Mr. Jayapalasingam Kandiah, a Malaysian, aged 69, was appointed to the Board of Turiya as an Independent Non-Executive Director on 24 November He is a member of the Nomination Committee and Risk Management Committee of the Company. On 20 February 2013, he was re-designated as the Non-Independent Non-Executive Director of Turiya. He was re-designated to the Board of Turiya as an Independent Non-Executive Director on 19 May He is the Chairman of the Audit Committee, Nomination Committee and Risk Management Committee and also a member of the Remuneration Committee and Investment Committee of the Company. Mr. Jayapalasingam is a member of the Malaysian Institute of Certified Public Accountants, Malaysian Institute of Accountants and holds a Bachelor of Law Degree from University of London and possesses the Certificate of Legal Practice. He has been in practice as a Chartered Accountant since 1975 and is currently a partner in Noordin Jaafar Chartered Accountants, member firm of Nexia International. He is currently the review partner overseeing transaction services including insolvencies, mergers and restructuring. He does not have any family relationship with any other director and/or any major shareholder of the Company nor does he has any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. 12 Annual Report 2017

14 directors profile (cont d) ABDULLA ABDULAZIZ ALI TALEB Independent Non-Executive Director Mr. Abdulla Taleb, a Bahraini, aged 38, was appointed to the Board of Turiya Berhad as Independent Non-Executive Director on 24 May He has more than 16 year experience in banking and currently he is heading Commercial and Financial Institutions Department of Ithmaar Bank Bahrain. Besides that Mr. Taleb has strong work experience in a number of banking functions including Islamic financial services, corporate banking, capital markets and credits. Prior to joining Ithmaar Bank he held senior positions in various banks and financial institutions including BMI Bank, First Investment Bank, Shamil Bank of Bahrain and Khaleej Finance & Investments. Mr. Taleb has a Bachelor Degree in Banking Finance from Kingdom University and Associate Diploma in Economics Banking and Finance from University of Bahrain. He also holds Advanced Diploma in Islamic Banking from Bahrain Institute of Banking and Finance. He does not have any family relationship with any other director and/or any major shareholder of the Company nor does he has any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Annual Report

15 directors profile (cont d) USHA NATHAN A. VAIDYANATHAN Non-Independent Non-Executive Director Ms. Usha Nathan, a Malaysian, aged 47, was appointed to the Board of Turiya on 1 March 1999 as an Alternate Director and subsequently appointed as Non-Executive Director of the Company on 16 January Thereafter on 13 July 2005, she was re-designated as an Independent Non-Executive Director of Turiya. On 10 July 2014, she was re-designated as Non-Independent Non-Executive Director of Turiya. She is a member of the Audit Committee and Nomination Committee of the Company. She holds a Bachelors Degree in Business Administration from the International Islamic University, Malaysia. She joined Chase Perdana Sdn Bhd ( CPSB ), a sister company of Turiya on 1 September 1994 in the Corporate Affairs & Business Development Department. Prior to joining CPSB, she was attached to a pharmaceutical multinational company in the Product Development Department. She is currently also a Non-Executive Director of Epsom Properties Limited, a company listed on Bombay Stock Exchange and Chennai Stock Exchange. She does not have any family relationship with any other director and/or any major shareholder of the Company nor does she has any conflict of interest with the Company. She has not been convicted of any offence within the past 10 years. 14 Annual Report 2017

16 audit committee report MEMBERSHIP The Audit Committee shall be appointed by the Directors among their number (pursuant to a resolution of the Board of Directors) which fulfils the following requirements: (a) the Audit Committee must be composed of no fewer than three (3) members, where the majority of them should not be: Executive Directors of the Company or any related corporation; or Any person having a relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the functions of the Audit Committee. (b) all the committees members must be Non-Executive Directors, with majority of them being Independent Directors; and (c) at least one (1) member of the Audit Committee: must be a member of the Malaysian Institute of Accountants (MIA); or if he is not a member of MIA, he must has at least three (3) years working experience; and he must has passed the examination specified in Part 1 of the 1st Schedule of the Accountant Act, 1967; or he must be a member of one of the association of accountants specified in Part II of the 1st Schedule of the Accountant Act, No Alternate Director is to be appointed as a member of the Audit Committee. The members of the Audit Committee shall elect a Chairman from among their number who shall be an Independent Director. In the event of any vacancy in the Audit Committee resulting in the non-compliance of items (a) to (c) above, the vacancy must be filled within three (3) months of the vacancy. The Board of Directors must review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with the Terms of Reference. Annual Report

17 audit committee report (cont d) COMPOSITION The Audit committee of Turiya Berhad ( the Company ), chaired by an Independent Director, comprises three members, two (2) Independent Non-Executive Directors and One (1) Non- Independent Non-Executive Director. The current composition meets the requirement of Paragraphs and 15,10 of the Main Market Listing Requirements ( Listing Requirements ) of Bursa Malaysia Securities Berhad ( Bursa Securities ). The members of the Audit Committee comprises as follows: Chairman Mr. Jayapalasingam Kandiah Independent Non-Executive Director Committee Members Mr. Abdulla Abdulaziz Ali Taleb Independent Non-Executive Director Ms. Usha Nathan A. Vaidyanathan Non-Independent Non-Executive Director The Audit Committee is authorized by the Board to independently investigate any activity within its Terms of Reference and shall have unrestricted access to information pertaining to the Group, form the internal and external auditors, Management and all Employees. MEETINGS During the financial year, the Audit Committee conducted 5 meetings of which all were duly convened with sufficient notices given to all Audit Committee members together with the agenda, report and proposals for deliberation at the meetings. The Group Managing Director and External Auditors were invited to all Audit Committee meetings to facilitate direct communication as well as to provide clarification on audit issues and the operations of the Group. Representatives from the External Auditors and Internal Auditors, were in attendance to present the relevant reports and proposals to the Audit Committee at the meetings which included inter alia, the Auditors audit plans and audit reports and the audited financial statements for the financial year ended 31 March In the Audit Committee meetings, the external auditors were given opportunities to raise any matters and were given unrestricted access to communicate at any time should they become aware of incidents or matters during the course of their audits or reviews. Minutes of the Audit Committee meetings were tabled for confirmation at the following Audit Committee meeting and subsequently presented to the Board for notation. 16 Annual Report 2017

18 audit committee report (cont d) MEETINGS (cont d) Details of attendance of the Audit Committee members at the Audit Committee meetings during the financial year are as follows: Audit Committee Member Designation in the Company Attendance Mr. Jayapalasingam Kandiah Independent Non-Executive Director 5/5 Ms. Usha Nathan Non-Independent Non-Executive Director 4/5 A. Vaidyanathan Mr. Abdulla Abdulaziz Ali Taleb Independent Non-Executive Director 4/4 SUMMARY of ACTIVITIES The Audit Committee s activities during the financial year under review comprised the following: Quarterly Financial Statements and Audited Financial Statements reviewed the unaudited financial results before recommending them for Board s approval, focusing particularly on:- - Any change in accounting policies - Significant adjustments arising from audit - Compliance with accounting standards and other legal requirements reviewed the audited financial statements of the Company prior to submission to the Directors for their perusal and approval. This was to ensure compliance of the financial statements with the provisions of the Companies Act, 2016 and the applicable approved accounting standards as per Malaysian Accounting Standards Board. External Auditors reviewed the external audit planning memorandum, outlining the audit scope, audit process and areas of emphasis based on the external auditors presentation of audit plan; review the quarterly and year-end financial statement; reviewed the external audit review memorandum and the response from the Management; consideration and recommendation to the Board for approval of the audit fees payable to the external auditors; reviewed the performance and effectiveness of the external auditors in the provision of statutory audit services and recommend to the Board for approval on the re-appointment of external auditors; and reviewed and evaluated the factors relating to the independence of the external auditors. Annual Report

19 audit committee report (cont d) SUMMARY ACTIVITIES (cont d) Internal Auditors The Group outsources its Internal Audit Function to a professional services firm. The Internal Auditors were engaged to conduct regular review and appraisals of the effectiveness of the governance, risk management and internal control process within the Company and the Group. The Internal Audit Report is presented directly to the Audit Committee. The Internal Auditors are given full access to all the documents relating to the Company and Group s governance, financial statements and operational assessments. The Audit Committee has reviewed: adequacy of internal controls and compliance with existing policies and procedures for the Asset Management process including Inventory; bank placements, cash/bank balances, trade debtors and inventory are accurately recorded, reconciled and reported; review vendor s compliance with contract requirements on procurement of products and services; review whether trade debtors are closely monitored and appropriately followed up; review adequacy of physical security over building and safeguarding of inventory stock; financial controls over expenditure cycle and the follow up; follow up building maintenance. Internal Control and Risk Management reviewed the internal audit plan for adequacy scope and coverage and risk areas; reviewed risk management report and internal audit reports; reviewed the effectiveness and adequacy of risk management, operational and compliance processes; reviewed the adequacy and effectiveness of corrective actions taken by the Management on all significant matters raised; reviewed audit work programme and processes; and reviewed the adequacy and independence of the Group s Internal Audit Function. 18 Annual Report 2017

20 audit committee report (cont d) RELATED PARTY TRANSACTION AND CONFLICT OF INTEREST At each quarterly meeting, the Audit Committee reviewed the recurrent related party transactions ( RPT ) and conflict of interest situation that may arise within the Company and its Group including any transaction, procedure or course of conduct that raises questions of Management integrity. The Audit Committee reviewed the RPT and conflict of interest situation presented by the Management prior to the Company entering into such transaction. The Audit Committee also ensures that the adequate oversight over the controls on the identification of the interested parties and possible conflict of interest situation before entering into transaction. INTERNAL AUDIT FUNCTION The purpose of the Internal Audit function is to provide the Board, through the Audit Committee, with reasonable assurance of the effectiveness of the risk management, control and governance processes in the Group. To ensure that the responsibilities of internal auditors are fully discharged, the Audit Committee reviews the adequacy of the scope, functions and resources of the Internal Audit function as well as the competency of the Internal Auditors. The Internal Auditors also highlight to the Audit Committee the audit findings which required follow-up action by Management as well as outstanding audit issues which required corrective action to ensure an adequate and effective internal control system within the Group. All Internal Audit activities in financial year ended 31 March 2017 were outsourced to an independent assurance provider and the total cost incurred amounted to RM37, STATEMENT BY AUDIT COMMITTEE IN RELATION TO THE EMPLOYEES SHARE OPTION SCHEME OF THE COMPANY The Company has not implemented any employee share option scheme during the financial year ended 31 March Annual Report

21 Statement on corporate governance In line with the principles and best practices as recommended by the Malaysian Code of Corporate Governance 2012 ( MCCG 2012 or the Code ). There Board of Directors of Turiya Berhad (The Board ) supports the principles of good corporate governance and is committed to establishment and implementation of a proper framework and controls to protect and enhance shareholders and stakeholders value and financial performance of the Group. Pursuant to Paragraph of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board reports herein the manner in which the Company has applied the Principles and Recommendations under MCCG 2012 during the financial year ended 31 March 2017 and any non-observation of the recommendation of MCCG 2012, including the reasons thereof are disclosed in the statement. PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES 1.1 Clear Functions of the Board and Management The Board has established a Board Charter which is available on the corporate website. The Board Charter clearly sets out the principal role, qualification and composition of the Board, the demarcation of the roles, functions, responsibilities and powers of the Board, the Board Committees and the Management. It also defines the specific accountabilities and responsibilities of the Board to ensure smooth interaction between the Management and the Board. It also reinforces the overall accountability of the Board and Management towards the Company and stakeholders. The Board is responsible for implementing the policies and decisions of the Board, determining the Company s overall strategic directions as well as the development and control of the business operations of the Group, and ultimately the enhancement of longterm shareholders value. The Board has a schedule of matters reserved specifically for its decision which includes, among others, approval of annual and quarterly results, acquisitions and disposals as well as material agreements, major capital expenditures and strategic business plans. The Board is collectively responsible for the proper stewardship of the Group s business and the creation of long term shareholder value and financial performance of the group. However, in the normal course of events, day to day management of the Company are in the hands of the Management and under the Stewardship of Executive Chairman, Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. and Group Managing Director, Dato Mohamed Nazir Bin Nor Md. The Board will link the Company s governance and management functions through the Executive Chairman and Group Managing Director. 20 Annual Report 2017

22 Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.1 Clear Functions of the Board and Management (cont d) All Board authority conferred on Management is delegated through the Executive Chairman and Group Managing Director so that the authority and accountability of Management is considered to be the authority and accountability of the Executive Chairman and Group Managing Director insofar the Board is concerned. Only decisions of the Board acting as a body are binding on the Executive Chairman and Group Managing Director. Decisions or instructions of individual Directors, officer or committees are not binding except in those instances where specific authorisation is given by the Board. The Group has established a framework to identify training plans for staff, based on competency profiling that is reviewed annually to continuously train and develop Management and staff to increase their levels of competency, skill efficiency and productivity. The Board through its Nomination Committee has issued a directive to the Senior Management to establish a succession-planning framework for the Board s deliberation for an orderly succession of Senior Management. 1.2 Clear Roles and Responsibilities The respective roles and responsibilities of the Board and Management have been clearly defined. The Board has discharged its responsibilities in the best interests of the Company in pursuit of an integrated regulatory and commercial objective. The following are among the key responsibilities of the Board: Reviewing and adopting the Company s strategic plans; Overseeing the conduct of the Company s business; Identifying principal risks and ensuring the implementation of appropriate systems to manage them; Succession planning; Overseeing the development and implementation of a communication policy for the Company; Reviewing the adequacy and integrity of management information and internal control system of the Company; The Board assumes full responsibilities for the overall performance of the Company and its subsidiaries by setting policies, establishing goals and monitoring the achievement of the goals through strategic action plans and careful stewardship of the Group s assets and resources. The Executive Board members regularly conduct meetings with the management to engage and review the Company s ongoing business operational plan to ensure the company is moving towards achieving Company s goals enhance shareholders and stakeholders value. Annual Report

23 Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.2 Clear Roles and Responsibilities (cont d) Overseeing the Conduct of the Company s Business The Executive Chairman and Group Managing Director are responsible for the implementation of the Board s decisions and overall responsibilities on the day to day management of the Company. Thereafter, the Executive Chairman and Group Managing Director shall report to the Board on all important matters pertaining to the daily operations of the Company and the Company s performances. Identifying principal risks and ensuring the implementation of the appropriate internal controls and mitigation measures Risk management, as a continuous process, plays an essential role in the group s business operation. The Board recognizes that risk management is an integral part of the Group s business operation, and as such, has in place the tools for identifying, evaluating and managing the significant risks faced by the Group on an ongoing basis through Risk Management Committee. Details of the Group s implementation of risk management are set out in the Group s Statement on Risk Management and Internal Control on pages 38 to 40 of this Annual Report. Succession Planning The Board recognizes the important of succession planning in maintaining long-term sustainable performance and delegates the planning on succession of key personnel to the Nomination Committee. Through the Nomination Committee, the Board ensures that an appropriate succession plan is in place for member of the board and to identify and groom senior management to maintain continuity of key positions in the day to day management of the company. In the succession planning program, the Nomination Committee will take into consideration the skills and depth of experience required for the Board to continue to function effectively. During the Nomination Committee Meeting, the Nomination Committee will discuss with Human Resources Department to identify key senior management position vacancies and high calibre internal candidates, including identifying the gaps in employees competency levels and training needs. 22 Annual Report 2017

24 Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.2 Clear Roles and Responsibilities (cont d) Overseeing the development and implementation of Shareholder Communication Policy The Board recognizes the important of effective communication and proactive engagement with the shareholders and investors to keep them informed of the performance, corporate governance, business and corporate development. Therefore, the board has within the legal and regulatory framework governing the release of material and price sensitive information, provided easy access to corporate and financial information of the Group through the following channels: Annual Report; Circulars to shareholders; Various disclosures and announcement to the Bursa Securities; and Company s website at Reviewing the adequacy and the integrity of the management information and internal control systems of the company The Board is ultimately responsible for the adequacy and integrity of the Company s internal control system. Details pertaining to the Company s internal control system and its effectiveness are available at the Group s Statement on Risk Management and Internal Control on pages 38 to 40 of this Annual Report. 1.3 Code of Ethics The Board has formalized a Directors Code of Ethics, setting out the standards of conduct expected from Directors. The Code of Ethics for Directors requires the Board to observe and display high ethical business standards and corporate behavior and to apply these values to all aspects of the Group s business and professional practice. The conduct of the Director will be consistent with their duties and responsibilities to the company and, indirectly to Shareholders and Stakeholders. Directors will always act within any limitations imposed by the Board on its activities and decision making process. The Directors code of Ethics is available online at Whistle-Blowing Policy To enhance corporate governance practices across the Group, a whistle-blowing policy was adopted which provide Directors, Employees, Shareholders, Vendors or any parties with a business relationship of the Group with an avenue to report suspected wrongdoings that any adversely impact the Group. The aim of this policy is to encourage the reporting of such matters in good faith, with the confidence that the person filing the report, as far as possible, be protected from reprisal, harassment or subsequent discrimination. Annual Report

25 Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.5 Sustainability of Business The Board is mindful of the important of business sustainability and in conducting the Group business, the impact on the environment, social and governance aspect is taken in consideration. The Board is responsible to ensure that the Group s strategies promote sustainability and the impact on the environmental, social and governance aspects are taken into consideration in conducting the Group s business. 1.6 Access to Information and Advice The Board has unrestricted access to all information within the Company and the advices and services of the Company Secretaries. The Directors may obtain independent professional advice in furtherance of their duties whenever necessary at the Company s expense. Each Board member receives regular reports, including a comprehensive review and analysis of the Group s performance. The Board meeting agenda and a full set of Board papers for each agenda item to be discussed are made available to the Directors prior to the meeting. They will be circulated in sufficient time to enable the Directors to obtain further explanations, where necessary, in order to be briefed properly before the meeting. Guidelines are in place in terms of content, presentation and delivery of Board papers for each Board meeting, so as to provide the Directors with sufficient information to make informed decisions. The Board has unrestricted access to all information within the Company, whether collectively or individually, in furtherance of their duties. The Board is accorded the absolute right to consult experts or obtain external assistance for independent professional advice, where necessary, and all such expenses shall be borne by the Company. 1.7 Qualified and Competent Company Secretary The Company Secretary of the Company is qualified to act as company secretary under Section 235 of the Companies Act, 2016 and member of The Malaysian Institute of Chartered Secretaries and Administrators. 24 Annual Report 2017

26 Statement on corporate governance (cont d) PRINCIPLE 1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont d) 1.7 Qualified and Competent Company Secretary (cont d) The Board is satisfied with the performance and support rendered by the Company Secretary to the Board in the discharge of its functions. The Company Secretary through the Board ensure that the Company complies with regulatory requirements, adherence to board policies and procedures, rules, relevant laws and best practices on corporate governance. The Company Secretary ensures that all board meetings are properly convened so that accurate and proper records of the proceedings and resolutions passed are recorded and maintained in the statutory registered of the Company. The Company Secretary also keeps abreast of the evolving capital market environment, regulatory changes and developments in corporate governance through update the Board timely. 1.8 Board Charter The Board retains full and effective control of the Group. Its roles are essentially providing leadership, management oversight, setting strategic direction premised on sustainability and promoting ethical conduct in business dealing. The Board has adopted certain responsibilities for effective discharge of its functions through formalizing its Board Charter. The Board has delegated specific responsibilities to various Board Committees namely the Executive Committee, Audit Committee, Nomination Committee, Remuneration Committee, Investment Committee and Risk Management Committee whose functions are within their respective terms of reference approved by the Board. The said terms of reference are periodically reviewed by the Board, as and when necessary and the Board appoints the Chairman and members of each committees. These Committees assist the Board in making informed decisions through in-depth discussions on issues in discharge of the respective committees terms of reference and responsibilities. The Chairman of the various Committees will report to the Board the outcome of the committee meetings which will be recorded in the minutes of the Board meeting. The ultimate responsibility for decision making, however, lies with the Board. The Company s Board Charter is available online at For certain day-to-day operations, the Board has delegated authorities and powers to Management with the prescribed limits of authority. Annual Report

27 Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD During the financial period under review, the Board consists of five (5) members comprising an Executive Chairman, one (1) Managing Director, two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. No individual or group of individuals dominates the Board s decision making process. The profile of each Director is presented on pages 10 to 14 of this Annual Report. The Company considers that its complement of Non-Executive Directors provides an effective Board with a mix of industry-specific knowledge and broad business and commercial experiences. It enables the Board to provide clear and effective leadership to the Company and to bring informed and independent judgement to many aspects of the Company s strategies and performances so as to ensure that the highest standards of conduct and integrity are maintained by the Company on a global basis. Profiles of the Board members are set out in the Directors Profile of this Annual Report. The Board has complied with the requirement of the Listing Requirements of Bursa Malaysia that at least two (2) Directors or one-third (1/3) of the Board, whichever is higher, must be Independent and the requirement of the Code that the Board must comprise a majority of Independent Directors where the Chairman of the Board is a Non Independent Director, as three (3) out of five (5) of its Board members are Independent, which is higher than the prescribed minimum requirements. The Company recognizes the contributions of Non- Executive Directors as equal Board members in the development of the Company s strategies, their role in representing the interests of minority shareholders and providing a balanced and independent view to the Board. All Non-Executive Directors are free from any form of relationships that could interfere with their independent judgment. The Board has taken an alternative view to the best practice requiring the Company to identify in its Annual Report a Senior Independent Non-Executive Director to whom concerns may be conveyed. The Board does not consider it necessary to make such an appointment based on the fact that shareholders already have fundamental rights to direct any areas of concern to any member of the Board, each of whom is assessable to the shareholders. The Board has delegated specific responsibilities to six (6) Board appointed Committees, namely Executive Committee, Audit Committee, Nomination Committee, Remuneration Committee, Investment Committee and Risk Management Committee, details of which are set out below. Their respective scope of authorities and responsibilities are clearly defined in their terms of reference which have been approved by the Board. 2.1 Nomination Committee should Comprise Exclusively of Non-Executive Directors, A Majority of whom must be Independent The Nomination Committee comprises two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. This Committee is empowered to bring recommendations to the Board as to the appointment of any new Executive or Non- Executive Director, provided that the Chairman of the Nomination Committee, in developing such recommendations, consults all Directors and reflects that consultation in his recommendation brought before the Board. 26 Annual Report 2017

28 Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (cont d) 2.2 Develop, Maintain and Review Criteria for Recruitment and Annual Assessment of Directors The Nomination Committee is chaired by Mr. Jayapalasingam Kandiah and its members are Ms. Usha Nathan A. Vaidyanathan and Mr. Abdulla Abdulaziz Ali Taleb. The Nomination Committee will recommend to the Board on suitable candidates for appointment as Board Members, Member of Board Committee and Executive Director or Managing Director of the Company based on the following evaluation criteria: Skills, knowledge, expertise and experience; Professionalism; Time commitment to effectively discharge his role as a Director; Contribution and performance; Character, integrity and competence; Boardroom diversity including gander diversity; and In the case of candidates for the position of Independent Non-Executive Director and Non-Independent Non-Executive Director, the Nomination Committee shall also evaluate the candidates ability to discharge such responsibilities/functions as are expected from of Independent Non-Executive Director and Non-Independent Nonexecutive Director. The Nomination Committee will arrange for the induction of any new Directors appointed to the Board to enable them to have a full understanding of the nature of the business, current issues within the Company and corporate strategies as well as the structure and management of the Company. The Nomination Committee also ensures that the Board has an appropriate balance of skills, experiences and other qualities, including core competencies that the Executive or Non-Executive Directors should bring to the Board. For this purpose, the Nomination Committee reviews the profile of the required skills and attributes of the Board members. This profile is used to assess the suitability of the candidacy of Executive or Non-Executive Directors put forward by the Directors and/or outside consultants. The Board acknowledges the recommendation of the MCCG 2012 on gender diversity. It was advocated that the Board should ensure participation of women on the Board to reach 30% by year As far as gender diversity is concerned, the Board does not have a specific policy on setting targets for women candidates. The evaluation of suitability of candidates is based on candidates competency, time commitment, character, integrity, contribution and performance. The Board, through the Nomination Committee, conducts an annual self-evaluation on its effectiveness as a whole, each individual Director and the different committees established by the Board. In relation to the year under review, the Board save for the interested Directors, is of the opinion that Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. and Ms. Usha Nathan A. Vaidyanathan the Directors who are seeking reelection at the forthcoming Annual General Meeting, have continued to give effective counsel and commitment. Annual Report

29 Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (cont d) 2.3 Establish Formal and Transparent Remuneration Policies and Procedures to Attract and Retain Director The Remuneration Committee is primary responsible for the development and review of the remuneration policy and packages for the Board members. The remuneration policy aims to attract and retain Directors necessary for proper governance and smooth running of the Company. The Remuneration Committee comprises one (1) Executive Director and two (2) Independent Non-Executive Director. The Remuneration Committee s principal objective is to develop, review and recommend to the Board fair remuneration packages inclusive of the annual salaries, incentive arrangements, service arrangements and other employment conditions for the Executive Directors. Information prepared by independent consultants and appropriate survey data on the remuneration practices of comparable companies are taken into consideration. The Remuneration Committee is chaired by Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. and its member is Mr. Jayapalasingam Kandiah and Mr. Abdulla Abdulaziz Ali Taleb. The Remuneration Committee is responsible for evaluating, deliberating and recommending to the Board the compensation and benefits that are fairly guided by market norms and industry practices for the business the company is in. The Remuneration is also responsible for evaluating the Executive Chairman and Managing Director s remuneration which is linked to the performance of the Executive Chairman and Managing Director and performance of the Group. Individual Director do not participate in the decisions regarding his individual remuneration.the Executive Director will not be present when matters affecting his own remuneration arrangements are being considered. The determination of remuneration packages of Non-Executive Directors, shall be a matter for the Board collectively. The individuals concerned shall abstain from discussion of their own remuneration. The policy of the Remuneration is in line with the Group s overall practice on compensations and benefits. This is to reward employees competitively, taking into account performance, market comparisons and competitive pressures in the industry. Whilst not seeking to maintain a strict market position, it takes into account comparable roles in similar organizations. 28 Annual Report 2017

30 Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (cont d) 2.3 Establish Formal and Transparent Remuneration Policies and Procedures to Attract and Retain Director (cont d) Details of the remuneration of the Directors of the Company, whose remuneration are analyzed into bands of RM50, during the financial year ended 31 March 2017, are indicated below: Number of Directors Range of Remuneration per Annum executive Non-Executive Up to RM50,000-2 RM50,001 to RM100, RM100,001 to RM150,000-1 RM150,001 to RM200, RM200,001 to RM250, RM300,001 to RM350, RM1,200,001 to RM1,300, The Remuneration Committee considers that it is crucial to link a significant proportion of the total executive remuneration package to individual and corporate performance. It is the Committee s policy to review the proportion of the total remuneration package linked to performance to align the executive performance and reward with the interests of the shareholders. Remuneration policy and arrangements are subject to regular reviews to achieve this objective and to ensure that the Group can attract and retain executives of high caliber in a competitive business environment. The Board shall determine the fees payable to Non-Executive Directors subject to shareholders approval at the Annual General Meeting of the Company. The remuneration packages of the Directors for the financial year ended 31 March 2017 by category are as follows: Remuneration Packages Total per Annum for the Financial Year Ended 31 March 2017 (RM) Executive Directors Non-Executive Directors Directors fees - 216,000 Salary & other emoluments 1,446,056 - Benefits-in-kind 26,883 - Meeting allowances - - Other allowances - 92,571 TOTAL 1,472, ,571 Annual Report

31 Statement on corporate governance (cont d) PRINCIPLE 2 STRENGTHEN COMPOSITION OF THE BOARD (cont d) 2.3 Establish Formal and Transparent Remuneration Policies and Procedures to Attract and Retain Director (cont d) The Group maintains a Directors and Officers Liability Insurance to indemnify Directors and officers of the Group against any liability incurred by them in carrying out their duties while holding office. The said persons, however, shall not be covered and indemnified in the event of any negligence, fraud, breach of trust proven against them. PRINCIPLE 3 REINFORCE INDEPENDENCE 3.1 Annual Assessment of Independent Directors The Independent Directors play a pivotal role in corporate accountability and provide unbiased and independent views and objective judgment to the Board s deliberation and decision making process, which mitigate risks arising from undue influence form interested parties. This is reflected in their membership of the various Board Committees and attendance of meetings as detailed above. 3.2 Tenure of Independent Directors The Board takes cognizance of the Code s recommendation that the tenure of an Independent Director should not exceed a cumulative term of nine years. However an Independent Director may in the interest of the Company, continue to serve on the Board upon reaching the ninth year limit subject to the Independent Director s re-designation as a Non-Independent Director. In the event the Board intends to retain the Director as Independent Director, who has served in that capacity for a period of exceeding nine years, the Board will justify and seek the shareholders approval. 3.3 Justification and Shareholders Approval to Retain an Independent Director who has Served more than Nine Years The tenure of our Independent Directors is below nine years and justification is not required as of now. 3.4 Separation of Position of the Chairman and Group Managing Director (GMD) The Board is aware of the MCCG 2012, which recommends the appointment of an Independent Non-Executive Director as Board Chairman. The Board thus far is satisfied with the appointment of Executive Chairman in view of his vast experience and knowledge which is beneficial to the Group The positions of Chairman and GMD are separately held by Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. and as the Executive Chairman and Dato Mohamed Nazir Bin Nor Md as the GMD to ensure appropriate balance of power and authority with accountability and clear division of roles and responsibilities. 30 Annual Report 2017

32 Statement on corporate governance (cont d) PRINCIPLE 3 REINFORCE INDEPENDENCE (cont d) 3.4 Separation of Position of the Chairman and Group Managing Director (GMD) (cont d) Whilst the Code recommends that the Chairman must be a non-executive member of the Board, the Executive Chairman s position has been perceived as appropriate and of benefit to the Group and the Board given his extensive experience, knowledge, network, leadership and familiarity with the Group s business, industry and products. The Chairman also consults with the Independent Non-Executive Directors for their independent advice, opinion and views. The Chairman in overseeing and executing his executive functions ensures that the Company achieves the financial performance for each financial year, and more importantly delivers long-term and sustainable value to stakeholders. 3.5 The Board must Comprise a Majority of Independent Directors where the Chairman of the Board is not an Independent Director The Board was aware that the Code recommends that the Board must comprise a majority of Independent Directors where the Chairman of the Board is not an Independent Director, However, the Board considers the current size adequate given due consideration to existing scope and nature of the Group s business operations and represents fairly the interest of the shareholders. Furthermore, the Independent Non- Executive Directors express their concerns whenever necessary to ensure proper checks and balance are in place in the Board s decision-making process and implementation of policies. PRINCIPLE 4 FOSTER COMMITMENT 4.1 Board Meetings and Time Commitment The Board meets regularly on quarterly basis with additional meetings convened as and when necessary. The Board approvals are sought via circular resolutions on operational matters that require urgent Board s decisions. At each Board meeting, there is a full financial reporting and business review and discussion, including monitoring the performance to date against the budgets and financial plans that were previously approved by the Board. Sufficient information is provided to enable the Board to make informed decisions. Board papers are prepared for each Board meeting incorporating both qualitative and quantitative information for discussions and decisions. Minutes of all Board proceedings are certified as true records by the Chairman of the meetings and are properly kept. Annual Report

33 Statement on corporate governance (cont d) PRINCIPLE 4 FOSTER COMMITMENT (cont d) 4.1 Board Meetings and Time Commitment (cont d) There were a total of five (5) Board meetings held during the financial year ended 31 March Details of the Directors attendance at Board meetings are as follows: Name of Directors designation Attendance Tan Sri Datuk Dr. Mohan A/L M.K. Executive Chairman 5/5 Swami, J.P. Dato Mohamed Nazir Bin Nor Md Managing Director 5/5 Ms. Usha Nathan A. Non-Independent 4/5 Vaidyanathan Non-Executive Director Mr. Jayapalasingam Kandiah Independent 5/5 Non-Executive Director Mr. Abdulla Abdulaziz Ali Taleb Independent 4/4 Non-Executive Director Mr. Khaled Yusuf Abdulla Independent 0/2 AbdulKarim Janahi Non-Executive Director (Vacate of Office on 16 August 2016) The Board of Directors note the Code s recommendation to notify the Chairman before any of the Directors accept any new directorship, including the indication of time that will be spent on new appointment. This requirement has been communicated to the Directors before their appointment to the Board. 4.2 Access to Continuing Education Programmes All the Directors of the Company have attended and completed the Mandatory Accreditation Programme prescribed by Bursa Malaysia. During the financial year ended 31 March 2017, all the Directors have attended the briefings conducted by the Company Secretary pertaining to the updates on the Listing Requirements and Companies Act, 2016 and accounting standards. In this regards, the Board will continue to undergo relevant training programmes to further enhance their skills and knowledge to keep abreast with the latest development in the industry and regulatory requirements on an ongoing basis. 32 Annual Report 2017

34 Statement on corporate governance (cont d) PRINCIPLE 5 UPHOLD INTEGRITY IN FINANCIAL REPORTING The Board is responsible to present a fair assessment of the Group s financial performance and business prospects, primarily through its annual audited financial statements, quarterly reports to Bursa Securities and Annual Report to the shareholders. The Board has to ensure that the financial statements are drawn up in accordance with provisions of the Companies Act, 2016 and applicable approved accounting standards in Malaysia. In compliance with the Companies Act, 2016, the Directors are responsible for the preparation of the financial statements for each financial year, which gives a true and fair view of the state of affairs of the Group and the Company and of the results and cash flow of the Group and the Company for the financial year then ended. 5.1 Audit Committee Should Ensure Financial Statements Comply With Applicable Financial Reporting Standards The Board upholds integrity in financial reporting by ensuring that shareholders are provided with reliable information of the Company s financial performance, its position and future prospects, in the Financial Statement and quarterly financial reports. The Audit Committee assist the Board in overseeing the Group s financial reporting processes and the quality of its financial reporting. One of the key responsibilities of the Audit Committee is to ensure that the Financial Statements of the Group and Company comply with applicable financial reporting standards in Malaysia. Such Financial Statements comprise the quarterly financial reports announced to Bursa Securities and the annual statutory Financial Statement. The Audit Committee comprises of three (3) members are two (2) Independence Non- Executive Director and (1) one Non Independent Non-Executive Director. The composition of the Audit Committee, including its role and responsibilities are set out on page 15 to 19 in this Annual Report. 5.2 Assessment of Suitability and Independence of External Auditor The Audit Committee and Board place great emphasis on the objectivity and independence of the external auditors in providing true and fair report to the shareholders. Through the Audit Committee, the Board maintains a transparent relationship with the Internal and External Auditors in seeking professional advice on the internal control and ensuring compliance with the appropriate accounting standards. The Audit Committee is empowered to communicate directly with the external and internal auditors and vice versa to highlight any issues of concern at any point in time. The Internal Auditors met the Audit Committee at least one (1) time during the financial year to discuss the nature, scope of the audit, internal controls and issues that may require the attention of the Audit Committee or the Board. Audit Plan was also discussed on that score taking into account of the historical risk and control matters and the ongoing risk exposure to the Group. Annual Report

35 Statement on corporate governance (cont d) PRINCIPLE 5 UPHOLD INTEGRITY IN FINANCIAL REPORTING (cont d) 5.2 Assessment of Suitability and Independence of External Auditor (cont d) The External Auditors remuneration including non-audit fees for the Group and the Company for the financial year ended 31 March 2017 is disclosed in Note 6 to the financial statements. The External Auditors have confirmed to the Audit Committee that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the independence criteria set out by the Malaysian Institute of Accountants. In compliance with Main Main Market Listing Requirements of Bursa Malaysia and the Code, the Audit Committee within its duties reviews the scope of work, independence, objectivity and findings and recommendations of the audits conducted by both the Internal and External Auditors. The Audit Committee also made arrangements to meet and discuss with the Internal and External Auditors separately without the presence of Management on any matters relating to the Group and its audit activities. PRINCIPLE 6 RECOGNISE AND MANAGE RISK 6.1 Sound Framework to Manage Risks The Board recognizes the importance of maintaining the effectiveness of the Group s system of risk management processes and internal control within the Group. The Risk Management Committee was established to assist the Board s functions in identifying principal risks, ensuring the policy put in place is adequate and procedures and recommendations with regards to the management of risks and internal control are being followed through by the various business/operating units. The Risk Management Committee has been established to assist the Board in recognizing and managing risks and the members are: 1. Jayapalasingam Kandiah (Chairman) 2. Dato Mohamed Nazir Bin Nor Md 3. Lau Tuck Wai Information on the Group s internal controls system and risk management is presented in the Statement on Internal Control as set out on pages 38 to 40 in this Annual Report. 6.2 Internal Audit Function 34 The Board of Directors had outsourced the Internal Audit function to a professional firm of consultants, which is independent of the activities it reviews. The Internal Audit function reviews the auditable areas based on the internal audit plan approved by the Audit Committee and Board of Directors and provides an independent assessment of the adequacy and effectiveness of the Group s internal control system. Annual Report 2017

36 Statement on corporate governance (cont d) PRINCIPLE 6 RECOGNISE AND MANAGE RISK (cont d) 6.2 Internal Audit Function (cont d) The Head of outsourced Internal Audit reports directly to the Audit Committee, which receives reports of audit findings and recommendations arising from each audit review. The Management is responsible for ensuring that corrective actions are taken on reported weaknesses and recommendations are adhered to in ensuring proper internal control systems are in place. The Group had incurred RM37, during the financial year for its outsourced Internal Audit function. Details of the Group s internal control processes are set out in the Statement on Risk Management and Internal Control in pages 38 to 40 of this Annual Report. PRINCIPLE 7 ENSURE TIMELY AND HIGH QUALITY DISCLOSURE 7.1 Corporate Disclosure Policy and Procedures The Board is aware of the timely and high quality disclosure of material information to the public is an integral part of the corporate governance framework and shall ensure compliance with the disclosure requirements as set out in the Listing Requirements of Bursa Malaysia. Procedures have been established to ensure that material and price-sensitive information are handled in a controlled manner to ensure that the prescribed guidelines are strictly adhered to. 7.2 Leverage on Information Technology for Effective Dissemination of Information The Board has established a section on the Company s website, where information on the Company s announcements to the regulators, the salient features of the Board Charter and the Company s announcements and financial information can be accessed at PRINCIPLE 8 STRENGTHEN RELASIONSHIP BETWEEN COMPANY AND SHAREHOLDERS 8.1 Encourage Shareholder Participation at General Meeting AGM represents the principal forum for dialogue and interaction with the shareholders. Beside the usual agenda for the AGM, the Board presents the progress and performance of the businesses as contained in this Annual Report and provides opportunity for shareholders to raise questions pertaining to the financial reporting and business activities of the Group. Directors are available to provide responses to questions from the shareholders during these meetings. At the previous AGM, the Executive Chairman also shared with the shareholders on the responses by the Company submitted in advance to queries raised by the Minority Shareholder Watchdog Group ( MSWG ). Annual Report

37 Statement on corporate governance (cont d) PRINCIPLE 8 STRENGTHEN RELASIONSHIP BETWEEN COMPANY AND SHAREHOLDERS (cont d) 8.1 Encourage Shareholder Participation at General Meeting (cont d) Notice of AGM is circulated to shareholders at least 21 days prior to the date of the meeting together with explanatory notes describing the effects of any proposed resolutions to be tabled under special business. All the resolutions set out in the Notice of the last AGM were duly passed and approved via polling process. The outcome was announced to Bursa on the same day of the AGM. 8.2 Effective Communication and Proactive Engagement The Board recognises the importance of an effective channel of communication between the Board, the shareholders and the general investing public. The Company strives to promote and encourage bilateral communications with its shareholders through General Meetings and ensures that information is disseminated to investors, analysts and the general investing public in a timely manner. The Company also strives to maintain and promote transparency in its business activities by continually updating shareholders and investing public of any corporate developments and events pursuant to the Corporate Disclosure Policy of the Listing Requirements of Bursa Malaysia. The primary modes of dissemination of information to the shareholders on the Group s business, corporate affairs and financial information consists of Annual Reports, press releases, quarterly reports and company announcements which can be accessed from the Company s website. In order to maintain high level of transparency and to effectively address any issues of concern from anyone, the Company has a dedicated electronic mail, i.e. contactus@turiya.com.my. Pertinent corporate information of the Group and its business activities are available at COMPLIANCE WITH THE CODE The Board considers that the Group has complied substantially with the principles and recommendation as stipulated in the MCCG 2012 throughout financial year The Board will endeavor to improve and enhance the procedures from time to time. The Statement on Corporate Governance is made in accordance with the resolution passes at the Board of Directors meeting held on 13 July Annual Report 2017

38 STATEMENT ON DIRECTORS RESPONSIBILITY IN RESPECT OF THE ANNUAL AUDITED FINANCIAL STATEMENTS (Pursuant to Paragraph 15.26(a) of the Listing Requirements of Bursa Malaysia) The Act places responsibility on the Directors to ensure that the financial statements provide a true and fair view of the financial position of the Group and the Company as at 31 March 2017 and of their financial performance and cash flows for the financial year then ended. The Board is satisfied that in preparing the financial statements of the Group for the financial year ended 31 March 2017, the Group has conformed to the appropriate accounting policies and applied them consistently and prudently and that measures have been taken to ensure that the accounting records are properly kept in accordance with the law. The Directors also have the general responsibility to take such steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities relevant to preparation and fair presentation of financial statements that are free from material misstatement. Annual Report

39 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Responsibility The Board has the overall responsibility to establish a sound risk management framework and internal control system by adopting best practices, instilling good risk management and implementing strong internal control systems to ensure key risk areas are managed to achieve our Group s business objectives. The Board recognises that the Group s system of internal control is designed to manage rather than eliminate the risk of failure to achieve the Group s objectives. Hence, it can only provide reasonable and not absolute assurance against material misstatement of management and financial information or against financial losses and fraud. Key Processes The Group has in place policies that serve as the guiding principles to inculcate a working culture that places high importance on professionalism, integrity and good governance. To that end, the management has put in place a sound internal control system with financial authority limits, standard operating procedures and risk management processes. 1. RISK MANAGEMENT The Group has put in place an ongoing risk management process of identifying, documenting, evaluating, monitoring and managing significant risks affecting the achievement of its business objectives throughout the financial year up to the date of approval of this statement for inclusion in the annual report. An annual review of risk profile is carried out as an integral part of the annual strategic planning cycle and accordingly certain changes to the risk management and internal control process have been made. This involved identifying the type of risk within an enterprise, measuring those potential risks and proposing means to hedge, insure or mitigate some of the risks that impacts the future earnings of the group. This said process is reviewed by the Board in accordance with the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers. 2. INTERNAL CONTROL The process of internal control has been designed to enable the Board to monitor the Group s overall financial and operational activities, identify principal risks and ensure appropriate systems are in place to manage these risks. The Group s internal control system has been designed to manage rather than eliminate business risks and can only provide reasonable and not absolute assurance against material misstatement, loss or fraud. The Board and Management have established a process of continuously enhancing the system of internal controls as and when there are changes to the business environment or regulatory guidelines. 38 Annual Report 2017

40 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont d) 2. INTERNAL CONTROL (cont d) In addition to ensuring compliances to a clearly defined delegation of authorities and responsibilities (to operating units), quarterly and comprehensive information are provided to the management. The framework of the Group s system of internal control and key procedures include: A management structure with clearly defined lines of responsibility and appropriate levels of delegation. Key functions such as finance, credit control, treasury, human resources and legal matters are controlled centrally. The management determines the applicability of risk monitoring and reporting procedures and is responsible for the identification and evaluation of significant risks applicable to their areas of business together with the design and operation of suitable internal controls. Clear definitions of limits of authority and responsibilities have been approved by the Board and subject to annual reviews and enhancements. Corporate values, which emphasise on ethical behaviour and quality services, are set out in the Group s Employee Handbook and the Board Charter. 3. INTERNAL AUDIT FUNCTION The Group s internal audit function is outsourced to a professional services firm, to assist the Board and Audit Committee in providing an independent assessment on the adequacy and effectiveness of the Group s internal control system. During the financial year ended 31 March 2017, an internal audit was carried out on Asset Management Pyramid Manufacturing Industries Pte. Ltd., Financial Controls Over Expenditure Cycle Pyramid Manufacturing Industries Pte. Ltd. and the findings of the internal audit, including the recommendations on corrective actions, were presented to the Audit Committee. A follow up review has been conducted on Controls Over Expenditure Cycle and Building Maintenance to ensure that corrective actions are properly implemented based on the agreed action plan. Based on the internal audit review conducted, none of the weaknesses noted have resulted in any material losses, contingencies or uncertainties that would require separate disclosure in this annual report. Annual Report

41 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont d) CONCLUSION The Board has reviewed the risk management and internal control system and is satisfied that the risk management and internal control system of the Group in place for the year under review is generally adequate and effective. The Board has also received assurance from the Executive Chairman, Group Managing Director and the Finance Manager that the Group s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group. The Group s system of internal controls will continue to be reviewed, added to or updated in line with changes in the operating environment to ensure its continuing effectiveness. 4. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS As required by Paragraph of the Bursa Securities Listing Requirements, the external auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance engagement was performed in accordance with ISAE3000, Assurance Engagement other than Audits or Review of Historical Financial Information and Recommended Practice Guide ( RPG ) 5, Guidance for Auditors on the Review of Directors Statement on Internal Control included in the Annual Report. Based on their procedures performed, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this statement is not prepared, in all material aspects, in accordance with disclosure required by paragraphs 41 and 42 of the Statement of Risk Management and Internal Controls: Guidance for Directors of Listed Issuers to be set out, nor is factually inaccurate. RPG 5 does not require the external auditors to consider whether this Statement covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group s risk and control system. 40 Annual Report 2017

42 financial statements Directors Report Statement by Directors Statutory Declaration Independent Auditors Report to the Members Statements of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Statement of Financial Position Consolidated Statement of Changes in Equity Statement of Changes in Equity Statements of Cash Flows Notes to the Financial Statements

43 directors report The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March PRINCIPAL ACTIVITIES The Company is principally involved in the business of letting properties and property management, investment holding and the provision of management consultancy services to its subsidiaries. The principal activities of the subsidiaries are set out in Note 12 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. RESULTS Group RM Company RM Loss for the financial year (1,177,077) (3,907,127) Attributable to: Owners of the Company (1,450,531) (3,907,127) Non-controlling interests 273,454 - DIVIDENDS (1,177,077) (3,907,127) No dividend has been paid or declared by the Company since the end of the previous financial year. The directors do not recommend the payment of any dividends in respect of the financial year ended 31 March 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. BAD AND DOUBTFUL DEBTS Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and 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 provision for doubtful debts, and have satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts. 42 Annual Report 2017

44 directors report (CONT D) BAD AND DOUBTFUL DEBTS (cont d) At the date of this report, the directors are not aware of any circumstances which would render the amount written off for bad debts or the amount of provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent. CURRENT ASSETS Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and the Company were made out, the directors took reasonable steps to ensure 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 had 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 of the Group and of the Company 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 method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. CONTINGENT AND OTHER LIABILITIES As at the date of this report, there does not exist: (i) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; and (ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial year. No contingent liability 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 affect the ability of the Group and of the Company to meet their obligations as and 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 the Company, which would render any amount stated in the financial statements misleading. Annual Report

45 directors report (cont d) ITEMS OF AN UNUSUAL NATURE Other than as disclosed in the financial statements, in the opinion of the directors: (i) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature other than as disclosed in the financial statements; and (ii) 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 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. ISSUE OF SHARES AND DEBENTURES During the financial year, no shares or debentures were issued by the Company. DIRECTORS of the company The directors in office during the financial year and during the period from the end of the financial year to the date of the report are: Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. Usha Nathan A/P A. Vaidyanathan Jayapalasingam A/L Kandiah Dato Mohamed Nazir Bin Nor Md Abdulla Abdulaziz Ali Taleb (Appointed on ) Khaled Yusuf Abdulla Abdulkarim Janahi (Resigned on ) DIRECTORS INTEREST The interests of the directors in office at the end of the financial year in the shares of the Company and its related corporations during the financial year according to the registers of directors shareholding required to be kept under Section 59 of the Companies Act 2016 are as follows: Number of Ordinary Shares of USD1 each as at as at Bought Sold Ultimate holding company Empire Holdings Limited Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. ( TSDDM ) Annual Report 2017

46 directors report (CONT D) DIRECTORS INTEREST (cont d) Number of Ordinary Shares of RM 1 each as at as at Bought Sold The Company Direct Interest Jayapalasingam Kandiah 150, ,800 Deemed Interest * Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. 152,485,087 # ,485,087 # * Deemed interested in the Company by virtue of TSDDM s interest in Empire Holdings Limited, a major shareholder of the Company which is 100% owned by TSDDM. # 35,833,590 shares (15.67%) are held by Empire Holdings Limited and 116,651,497 shares (51%) are held by Ithmaar Bank B.S.C. where Empire Holdings Limited is the beneficiary, which is 100% owned by TSDDM. The other directors in office at the end of the financial year did not have any interest in shares of the Company and its related corporations during the financial year. DIRECTORS BENEFITS Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of the emoluments received or due and receivable by the directors as disclosed in Note 7 to the financial statements or the fixed salary of a full time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest. Neither during nor at the end of the financial year, was the 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 Group s and the Company s directors remuneration are disclosed in Note 7 to the financial statements. Annual Report

47 directors report (cont d) SUBSIDIARIES The details of the Company s subsidiaries are disclosed in Note 12 to the financial statements. Other than the subsidiary with modified opinion in the auditors report as disclosed in Note 12 to the financial statements, the available auditors reports on the accounts of the remaining subsidiaries did not contain any qualification. AUDITORS REMUNERATION The details of the Group s and the Company s auditors remuneration are disclosed in Note 6 to the financial statements. ULTIMATE HOLDING COMPANY The directors regard Empire Holdings Limited, a company incorporated in the Republic of Seychelles as an International Business Company, as the ultimate holding company of the Company. SIGNIFICANT EVENT SUBSEQUENT TO THE END OF THE FINANCIAL YEAR Details of significant event subsequent to the end of financial year is disclosed in Note 37 to the financial statements. AUDITORS Messrs. Baker Tilly Monteiro Heng have indicated their willingness to accept appointment as auditors of the Company in place of retiring auditors, Messrs. Baker Tilly AC. This report was approved and signed on behalf of the Board of Directors in accordance with a resolution of the directors dated 21 July TAN SRI DATUK DR. mohan A/L M.K. SWAMI, J.P. dato MOHAMED NAZIR BIN NOR MD 46 Annual Report 2017

48 statement by directors Pursuant to Section 251(2) of the Companies Act 2016 We, the undersigned, being two of the directors of the Company, do hereby state that, in the opinion of the directors, the accompanying financial statements as set out on pages 54 to 152 are drawn up in accordance with the 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 at 31 March 2017 and of their financial performance and cash flows for the financial year then ended. The supplementary information set out on page 153 has been prepared in accordance with the 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 presented based on the format as prescribed by Bursa Malaysia Securities Berhad. Signed on behalf of the Board in accordance with a resolution dated 21 July TAN SRI DATUK DR. MOHAN A/L M.K. SWAMI, J.P. DATO MOHAMED NAZIR BIN NOR MD STATUTORY DECLARATION Pursuant to Section 251(1) of the Companies Act 2016 I, Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P, being the director primarily responsible for the financial management of the Company, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements as set out on pages 54 to 152 and the supplementary information as set out on page 153 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Oaths and Declaration Act (Cap. 211). Subscribed and solemnly declared at Republic of Singapore on 21 July Before me, TAN SRI DATUK DR. MOHAN A/L M.K. SWAMI, J.P. A T Selvan (N2016/0589) Notary Public Annual Report

49 INDEPENDENT AUDITORS REPORT To The Members Of Turiya Berhad (Incorporated in Malaysia) Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Turiya Berhad, which comprise the statements of financial position as at 31 March 2017 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 54 to 152. 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 the 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 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, 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. Going Concern (Note 2 to the Financial Statements) The Group and the Company incurred a net loss of RM1,177,077 and RM3,907,127 respectively during the financial year ended 31 March 2017 mainly due to loss of a major tenant in its property segment. 48 Annual Report 2017

50 INDEPENDENT AUDITORS REPORT To The Members Of Turiya Berhad (Incorporated in Malaysia) (Cont d) Report on the Audit of the Financial Statements (cont d) Key Audit Matters (cont d) The directors have continued to adopt the going concern basis in preparing the financial statements after having prepared a cash flows forecast supporting the assertion that the Group will have sufficient resources to continue for a period of at least 12 months from the end of the financial year. The directors assessment on the Group s ability to continue as a going concern was an area of focus as the assessment requires the exercise of judgement by the directors on assumptions supporting the cash flows forecast, including the revenue, profit margin and the actual timing of collection of receivables, and these are fundamental to the appropriateness of the going concern basis which was adopted for the preparation of the financial statements. Our Audit Response: Our audit procedures included, among others: reviewing the cash flow forecast over the next 12 months; comparing the actual results with previous cash flow forecasts to assess the performance of the business and historical accuracy of the forecasts; reviewing the cash flow forecast by comparing the Group s assumptions to externally derived data as well as our assessments in relation to key assumptions such as revenue and profit margins; and testing the mathematical accuracy of the cash flow forecast calculation. Investment Property (Notes 2(d)(vi) and 11 to the Financial Statements) The Group s investment property is measured at fair value subsequent to their initial recognition. The Group estimated the fair value of the investment property based on the market valuation performed by an external independent valuer. We focused on this area because the valuation requires judgement in determining the appropriate valuation methods and the key assumptions used in the valuations. Our Response: Our audit procedures included, among others: evaluating the competence, capabilities and objectivity of the external valuers which included consideration of their qualifications and experience; reading the valuation report of the property and discussing with external valuers on their valuation methodology and the judgements they made; and assessing the valuation methodology used and appropriateness of the key assumptions based on our knowledge of the property industry. Annual Report

51 INDEPENDENT AUDITORS REPORT To The Members Of Turiya Berhad (Incorporated in Malaysia) (Cont d) Report on the Audit of the Financial Statements (cont d) Key Audit Matters (cont d) Goodwill (Notes 2(d)(iii) and 14 to the Financial Statements) As at 31 March 2017, the Group has goodwill of RM4.356 million arising from the acquisition of a subsidiary. The goodwill is tested for impairment annually. We focused on this area because this assessment requires the exercise of judgement by the Group on the discount rate applied in the recoverable amount calculation and the assumptions supporting the underlying cash flow projections which include forecast growth rates, gross profit margin and operating expenses. Our Response: Our audit procedures focused on evaluating the cash flow projections and the Group s forecasting procedures which included, among others: comparing the actual results with previous cash flow projections to assess the performance of the business and historical accuracy of the projections; comparing the Group s assumptions to externally derived data as well as our assessments in relation to key assumptions to assess their reasonableness and achievability of the projections; testing the mathematical accuracy of the impairment assessment; and performing a sensitivity analysis around the key assumptions that are expected to be more sensitive to the recoverable amount. 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. 50 Annual Report 2017

52 INDEPENDENT AUDITORS REPORT To The Members Of Turiya Berhad (Incorporated in Malaysia) (Cont d) Responsibilities of the Directors for the Financial Statements The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with the 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. The directors of the Company are responsible for overseeing the Group s financial reporting process. 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 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 scepticism throughout the audit. We also: identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s and the Company s internal control. Annual Report

53 INDEPENDENT AUDITORS REPORT To The Members Of Turiya Berhad (Incorporated in Malaysia) (Cont d) Auditors Responsibilities for the Audit of the Financial Statements (cont d) As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: (cont d) evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group s or the Company s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern. evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation. obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, 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. 52 Annual Report 2017

54 INDEPENDENT AUDITORS REPORT To The Members Of Turiya Berhad (Incorporated in Malaysia) (Cont d) Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 12 to the financial statements. Other Reporting Responsibilities The supplementary information set out on page 153 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 contents of this report. BAKER TILLY AC O ong Teng Yan No. AF N no /07/2019 J Chartered Accountants Chartered Accountant Kuala Lumpur 21 July 2017 Annual Report

55 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Financial Year Ended 31 March 2017 Group company note RM RM RM RM Revenue 4 19,232,637 21,772,644 5,076,808 9,745,659 Cost of sales 5 (11,658,590) (9,877,234) (2,978,577) (2,511,372) Gross profit 7,574,047 11,895,410 2,098,231 7,234,287 Other income 2,964,536 2,449,599 1,108,628 1,027,182 Administrative expenses Selling and distribution expenses Other expenses (5,879,103) (180,943) (1,960,968) (8,111,882) (213,696) (106,244) (3,084,049) (37,626) (453,357) (3,400,616) (28,415) (528,541) Profit/(Loss) from operations 2,517,569 5,913,187 (368,173) 4,303,897 Finance costs (3,561,776) (3,766,688) (3,538,954) (3,733,932) (Loss)/Profit before tax from continuing operations 6 (1,044,207) 2,146,499 (3,907,127) 569,965 Tax expense 8 (132,870) (301,041) - - (Loss)/Profit for the financial year (1,177,077) 1,845,458 (3,907,127) 569,965 Other comprehensive income, net of tax: Items that may be reclassified subsequently to profit or loss: Foreign currency translation differences 176,094 (839,520) ,094 (839,520) - - Total comprehensive (loss)/ income for the financial year (1,000,983) 1,005,938 (3,907,127) 569, Annual Report 2017

56 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (cont d) For the Financial Year Ended 31 March 2017 Group company note RM RM RM RM (Loss)/Profit attributable to: Owners of the Company (1,450,531) 1,914,439 (3,907,127) 569,965 Non-controlling interests 273,454 (68,981) - - (Loss)/Profit for the financial year (1,177,077) 1,845,458 (3,907,127) 569,965 Total comprehensive (loss)/ income attributable to: Owners of the Company (1,026,913) 1,066,378 (3,907,127) 569,965 Non-controlling interests 25,930 (60,440) - - Total comprehensive (loss)/ income for the financial year (1,000,983) 1,005,938 (3,907,127) 569,965 Basic (loss)/earnings per ordinary share attributable to owners of the Company: (sen per share) 9 (0.63) 0.84 Diluted (loss)/earnings per ordinary share attributable to owners of the Company: (sen per share) 9 (0.63) 0.84 The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. Annual Report

57 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 March note RM RM ASSETS Non-current assets Property, plant and equipment 10 12,779,917 12,869,178 Investment property ,477, ,477,458 Investment in joint venture Deposit with licensed bank ,181 Intangible assets 14 4,356,051 3,992,221 Other investment ,500,002 Current assets 157,613, ,275,043 Inventories 17 1,126,811 1,074,754 Trade receivables 18 2,941,787 2,458,464 Other receivables, deposits and prepayments 19 1,198,931 6,647,685 Tax recoverable 7,182 5,014 Deposits with licensed bank , ,694 Cash and bank balances 2,089,126 2,337,487 7,492,502 12,945,098 Non-current assets classified as held for sale 21 12,500,000 - TOTAL ASSETS 177,605, ,220, Annual Report 2017

58 consolidated STATEMENT OF FINANCIAL POSITION (cont d) As at 31 March note RM RM EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital ,778, ,728,426 Reserves 23 (153,529,186) (100,451,953) 127,249, ,276,473 Non-controlling interests (881,820) (907,864) Total equity 126,367, ,368,609 Liabilities Non-current liabilities Deferred tax liabilities 16 2,250,294 2,215,380 Borrowings 27 37,289,020 42,007,148 Total non-current liabilities 39,539,314 44,222,528 Current liabilities Trade payables ,071 1,044,278 Amount due to holding company ,000 - Other payables and accruals 26 4,911,092 4,961,110 Borrowings 27 4,820,989 5,623,616 Tax payable 186,841 - Total current liabilities 11,698,993 11,629,004 Total liabilities 51,238,307 55,851,532 TOTAL EQUITY AND LIABILITIES 177,605, ,220,141 The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. Annual Report

59 STATEMENT OF FINANCIAL POSITION As at 31 March note RM RM ASSETS Non-current assets Property, plant and equipment 10 7,543,033 7,989,381 Investment property ,477, ,477,458 Subsidiaries 12 11,888,270 12,475,235 Other investment ,500,002 Current assets 159,908, ,442,076 Trade receivables 18 94,895 83,484 Other receivables, deposits and prepayments ,169 5,488,904 Deposits with licensed bank , ,694 Cash and bank balances 543,468 1,930,387 1,265,197 7,924,469 Non-current assets classified as held for sale 21 12,500,000 - TOTAL ASSETS 173,673, ,366, Annual Report 2017

60 STATEMENT OF FINANCIAL POSITION (cont d) As at 31 March note RM RM EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital ,778, ,728,426 Reserves 23 (156,116,953) (100,159,620) Total equity 124,661, ,568,806 Liabilities Non-current liabilities Deferred tax liabilities 16 1,832,276 1,832,276 Borrowings 27 37,269,847 41,981,497 Total non-current liabilities 39,102,123 43,813,773 Current liabilities Trade payables 24 47,418 77,521 Amount due to subsidiaries 12 1,175,666 1,917,475 Amount due to holding company ,000 - Other payables and accruals 26 3,074,898 2,668,214 Borrowings 27 4,812,176 4,320,756 Total current liabilities 9,910,158 8,983,966 Total liabilities 49,012,281 52,797,739 TOTAL EQUITY AND LIABILITIES 173,673, ,366,545 The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. Annual Report

61 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Financial Year Ended 31 March 2017 Attributable to owners of the Company Non- Distributable foreign currency nonshare Share translation Accumulated controlling Total capital premium reserve losses Total interests equity 2017 RM RM RM RM RM RM RM At 1 April ,728,426 52,050,206 6,004,452 (158,506,611) 128,276,473 (907,864) 127,368,609 Comprehensive income Loss for the financial year (1,450,531) (1,450,531) 273,454 (1,177,077) Other comprehensive income Foreign currency translation differences , ,504 (247,410) 176,094 Total comprehensive income for the financial year ,504 (1,450,531) (1,027,027) 26,044 (1,000,983) Transition to no-par value regime on 31 January ,050,206 (52,050,206) At 31 March ,778,632-6,427,956 (159,957,142) 127,249,446 (881,820) 126,367, Annual Report 2017

62 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (cont d) For the Financial Year Ended 31 March 2017 Attributable to owners of the Company Non- Distributable foreign currency nonshare Share translation Accumulated controlling Total capital premium reserve losses Total interests equity 2016 RM RM RM RM RM RM RM At 1 April ,728,426 52,050,206 6,852,529 (160,421,050) 127,210,111 (847,440) 126,362,671 Comprehensive income Profit for the financial year ,914,439 1,914,439 (68,981) 1,845,458 Other comprehensive income Foreign currency translation differences - - (848,077) - (848,077) 8,557 (839,520) Total comprehensive income for the financial year - - (848,077) 1,914,439 1,066,362 (60,424) 1,005,938 At 31 March ,728,426 52,050,206 6,004,452 (158,506,611) 128,276,473 (907,864) 127,368,609 The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. Annual Report

63 STATEMENT OF CHANGES IN EQUITY For the Financial Year Ended 31 March 2017 S share Share Accumulated Total capital premium losses equity RM RM RM RM At 1 April ,728,426 52,050,206 (152,779,791) 127,998,841 Profit for the financial year, representing total comprehensive income for the financial year , ,965 At 31 March ,728,426 52,050,206 (152,209,826) 128,568,806 Loss for the financial year, representing total comprehensive loss for the financial year - - (3,907,127) (3,907,127) Transition to no-par value regime on 31 January ,050,206 (52,050,206) - - At 31 March ,778,632 - (156,116,953) 124,661, The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. Annual Report 2017

64 STATEMENTS OF CASH FLOWS For the Financial Year Ended 31 March 2017 CASH FLOWS FROM OPERATING ACTIVITIES Group company note RM RM RM RM (Loss)/ Profit before tax: (1,044,207) 2,146,499 (3,907,127) 569,965 Bad debts write off 7, Depreciation of property, plant and equipment 761, , , ,558 Gain on disposal of property, plant and equipment - (98,354) - (99,999) Gain on reclassification of translation reserve from other comprehensive income (410,624) (1,430,856) - - Gain on disposal of investment in unquoted shares (96,319) Waiver of balances (10,741) (616,808) - - Impairment loss on other receivables - 74, Interest expenses 3,561,776 3,766,688 3,538,954 3,733,932 Interest income (31,778) (284) (31,682) - Reversal of impairment loss on amount due from subsidiary , ,961 Property, plant and equipment written off - 31, Unrealised foreign exchange gain (26,107) Operating profit before working capital changes 2,710,679 4,641, ,301 5,392,417 Changes in working capital: Payables (103,484) (796,089) 376,581 (979,929) Receivables 4,957,783 7,095,645 4,979, ,713 Inventories (52,057) (329,278) - - Cash generated from operations carried down 7,512,921 10,612,173 5,977,206 4,832,201 Annual Report

65 STATEMENTS OF CASH FLOWS (cont d) For the Financial Year Ended 31 March 2017 CASH FLOWS FROM INVESTING ACTIVITIES Group company note RM RM RM RM Cash generated from operations brought down 7,512,921 10,612,173 5,977,206 4,832,201 Tax paid (58,567) (131,686) - - Tax refund 102, Interest paid (3,561,776) (3,766,688) (3,538,954) (3,733,933) Net cash from operating activities 3,995,386 6,713,799 2,439,252 1,098,269 Interest received 31, ,682 - Purchase of property, plant and equipment 10 (230,706) (163,920) (4,350) - Purchase of other investment (17,400) Withdrawal/(Placement) of deposit with licensed bank 456,668 (436,181) - - Proceeds from disposal of property, plant and equipment - 109, ,000 Proceeds from disposal of investment in unquoted shares 114, Repayment from subsidiaries ,507 3,701,299 Net cash from/ (used in) investing activities 355,327 (490,754) 43,839 3,801,299 CASH FLOWS FROM FINANCING ACTIVITIES Advances from/(repayment to) holding company 800,000 (303,655) 800,000 (303,655) (Repayment to)/advances from subsidiaries - - (741,809) 657,459 Payment of finance lease (9,676) (7,639) - - Repayment of term loan (4,220,230) (4,007,496) (4,220,230) (4,007,496) Net cash used in financing activities (3,429,906) (4,318,790) (4,162,039) (3,653,692) 64 Net increase/(decrease) in cash and cash equivalents 920,807 1,904,255 (1,679,948) 1,245,876 Cash and cash equivalents at beginning of the financial year 1,463,925 (407,314) 2,352,081 1,106,205 Effect of exchange rate fluctuations (166,941) (33,016) - - Cash and cash equivalents at the end of the financial year (A) 2,217,791 1,463, ,133 2,352,081 Annual Report 2017

66 Note to the statements of cash flows: A. CASH AND CASH EQUIVALENTS STATEMENTS OF CASH FLOWS (cont d) For the Financial Year Ended 31 March 2017 Cash and cash equivalents included in the statements of cash flows comprise the following amounts: Group company note RM RM RM RM Bank overdrafts 27 - (1,295,256) - - Deposits with licensed bank , , , ,694 Cash and bank balances 2,089,126 2,337, ,468 1,930,387 2,217,791 1,900, ,133 2,352,081 Less: Deposit pledged - (436,181) - - 2,217,791 1,463, ,133 2,352,081 The annexed notes form an integral part of, and should be read in conjunction with, these financial statements. Annual Report

67 NOTES TO THE FINANCIAL STATEMENTS 1. CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office and principal place of business of the Company are both located at Suite 7.3, 7th Floor, Wisma Chase Perdana, Changkat Semantan, Damansara Heights, Kuala Lumpur. The ultimate holding company is Empire Holdings Limited, a company incorporated in the Republic of Seychelles as an International Business Company. The Company is principally involved in the business of letting properties and property management, investment holding and the provision of management consultancy services to its subsidiaries. The principal activities of the subsidiaries are set out in Note 12. There have been no significant changes in the nature of these activities during the financial year. The financial statements of the Company were authorised for issue by the Board of Directors in accordance with a resolution dated 21 July BASIS OF PREPARATION The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards ( MFRSs ), International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. During the financial year ended 31 March 2017, the Group and the Company incurred a net loss of RM1,177,077 and RM3,907,127 respectively mainly due to loss of a major tenant in its property segment. The directors of the Company are of the opinion that the preparation of the financial statements of the Group and the Company on a going concern basis remain appropriate after having prepared a cash flow projection to support the assertion that the Group and the Company will have sufficient resources to continue for a period of at least 12 months from the end of the financial year. (a) Statement of Compliance the preparation of financial statements in conformity with MFRSs requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reported period. It also requires directors to exercise their judgement in the process of applying the Group s and the Company s accounting policies. Although these estimates and judgement are based on the directors best knowledge of current events and actions, actual results may differ. 66 Annual Report 2017

68 2. BASIS OF PREPARATION (cont d) (a) Statement of Compliance (cont d) the areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2(d). New MFRSs, amendments/improvements to MFRSs and new IC Interpretation ( IC Int ) (i) Adoption of amendments/improvements to MFRSs the Group and the Company had adopted the following amendments/ improvements to MFRSs that are mandatory for the current financial year: Amendments/Improvements to MFRSs MFRS 5 Non-current Assets Held for Sale and Discontinued Operations MFRS 7 Financial Instruments: Disclosures MFRS 10 Consolidated Financial Statements MFRS 11 Joint Arrangements MFRS 12 Disclosure of Interest in Other Entities MFRS 101 Presentation of Financial Statements MFRS 116 Property, Plant and Equipment MFRS 119 Employee Benefits MFRS 127 Separate Financial Statements MFRS 128 Investments in Associates and Joint Ventures MFRS 138 Intangible Assets MFRS 141 Agriculture the adoption of the above amendments/improvements to MFRSs did not have any significant effect on the financial statements of the Group and of the Company, and did not result in significant changes to the Group s and the Company s existing accounting policies. (ii) New MFRSs, amendments/improvements to MFRSs and new IC Int that have been issued, but not yet effective the Group and the Company have not adopted the following new MFRSs, amendments/improvements to MFRSs and new IC Int that have been issued, but yet to be effective: effective for financial periods beginning on or after New MFRSs MFRS 9 Financial Instruments 1 January 2018 MFRS 15 Revenue from Contracts with Customers 1 January 2018 MFRS 16 Leases 1 January 2019 Annual Report

69 2. BASIS OF PREPARATION (cont d) (a) Statement of Compliance (cont d) New MFRSs, Amendments/Improvements to MFRSs and New IC (cont d) (ii) New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective (cont d) effective for financial periods beginning on or after Amendments/Improvements to MFRSs MFRS 1 First-time Adoption of MFRSs 1 January 2018 MFRS 2 Share-based Payment 1 January 2018 MFRS 4 Insurance Contracts 1 January 2018 MFRS 10 Consolidated Financial Statements Deferred MFRS 12 Disclosure of Interests in Other Entities 1 January 2017 MFRS 107 Statement of Cash Flows 1 January 2017 MFRS 112 Income Taxes 1 January 2017 MFRS 128 Investments in Associates and Joint Ventures 1 January 2018/ Deferred MFRS 140 Investment Property 1 January 2018 New IC Int IC Int 22 Foreign Currency Transactions and Advance 1 January 2018 Consideration A brief discussion on the above significant new MFRSs, amendments/ improvements to MFRSs and new IC Int are summarised below. Due to the complexity of these new MFRSs, amendments/improvements to MFRSs and new IC Int, the financial effects of their adoption are currently still being assessed by the Group and the Company. MFRS 9 Financial Instruments Key requirements of MFRS 9: MFRS 9 introduces an approach for classification of financial assets which is driven by cash flow characteristics and the business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments. 68 Annual Report 2017

70 2. BASIS OF PREPARATION (cont d) (a) Statement of Compliance (cont d) New MFRSs, Amendments/Improvements to MFRSs and New IC (cont d) (ii) New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective (cont d) MFRS 9 Financial Instruments (cont d) Key requirements of MFRS 9 (cont d): In essence, if a financial asset is a simple debt instrument and the objective of the entity s business model within which it is held is to collect its contractual cash flows, the financial asset is measured at amortised cost. In contrast, if that asset is held in a business model the objective of which is achieved by both collecting contractual cash flows and selling financial assets, then the financial asset is measured at fair value in the statements of financial position, and amortised cost information is provided through profit or loss. If the business model is neither of these, then fair value information is increasingly important, so it is provided both in the profit or loss and in the statements of financial position. MFRS 9 introduces a new, expected-loss impairment model that will require more timely recognition of expected credit losses. Specifically, this Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entity to recognise expected credit losses at all times and to update the amount of expected credit losses recognised at each reporting date to reflect changes in the credit risk of financial instruments. This model eliminates the threshold for the recognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before credit losses are recognised. MFRS 9 introduces a substantially-reformed model for hedge accounting, with enhanced disclosures about risk management activity. The new model represents a significant overhaul of hedge accounting that aligns the accounting treatment with risk management activities, enabling entities to better reflect these activities in their financial statements. In addition, as a result of these changes, users of the financial statements will be provided with better information about risk management and the effect of hedge accounting on the financial statements. Annual Report

71 2. BASIS OF PREPARATION (cont d) (a) Statement of Compliance (cont d) New MFRSs, Amendments/Improvements to MFRSs and New IC (cont d) (ii) New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective (cont d) MFRS 15 Revenue from Contracts with Customers the core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with the core principle by applying the following steps: Identify the contracts with a customer; Identify the performance obligation in the contract; Determine the transaction price; Allocate the transaction price to the performance obligations in the contract; and Recognise revenue when (or as) the entity satisfies a performance obligation. MFRS 15 also includes new disclosures that would result in an entity providing users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers. the following MFRSs and IC Interpretations will be withdrawn on the application of MFRS 15: MFRS 111 MFRS 118 IC Interpretation 13 IC Interpretation 15 IC Interpretation 18 IC Interpretation 131 Construction Contracts Revenue Customer Loyalty Programmes Agreements for the Construction of Real Estate Transfers of Assets from Customers Revenue Barter Transactions Involving Advertising Services 70 Annual Report 2017

72 2. BASIS OF PREPARATION (cont d) (a) Statement of Compliance (cont d) New MFRSs, Amendments/Improvements to MFRSs and New IC (cont d) (ii) New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective (cont d) MFRS 16 Leases Currently under MFRS 117 Leases, leases are classified either as finance leases or operating leases. A lessee recognises on its statement of financial position assets and liabilities arising from the finance leases. MFRS 16 eliminates the distinction between finance and operating leases for lessees. All leases will be brought onto its statement of financial position except for short-term and low value asset leases. Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investments in Associates and Joint Ventures these amendments address an acknowledged inconsistency between the requirements in MFRS 10 and those in MFRS 128, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. the main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business, as defined in MFRS 3. A partial gain or loss is recognised when a transaction involves assets that do not constitute a business. Amendments to MFRS 12 Disclosure of Interests in Other Entities Amendments to MFRS 12 clarify that entities classified as held for sale are required to apply all the disclosure requirements of MFRS 12 except for the disclosure requirements set out in paragraphs B10-B16. Amendments to MFRS 107 Statement of Cash Flows Amendments to MFRS 107 require entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including changes from cash flows and non-cash changes. the disclosure requirement could be satisfied in various ways, and one method is by providing reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities. Annual Report

73 2. BASIS OF PREPARATION (cont d) (a) Statement of Compliance (cont d) New MFRSs, Amendments/Improvements to MFRSs and New IC (cont d) (ii) New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective (cont d) Amendments to MFRS 112 Income Taxes Amendments to MFRS 112 clarify that decreases in value of debt instrument measured at fair value for which the tax base remains at its original cost give rise to a deductible temporary difference. The estimate of probable future taxable profits may include recovery of some of an entity s assets for more than their carrying amounts if sufficient evidence exists that it is probable the entity will achieve this. the amendments also clarify that deductible temporary differences should be compared with the entity s future taxable profits excluding tax deductions resulting from the reversal of those deductible temporary differences when an entity evaluates whether it has sufficient future taxable profits. In addition, when an entity assesses whether taxable profits will be available, it should consider tax law restrictions with regards to the utilisation of the deduction. Amendments to MFRS 128 Investments in Associates and Joint Ventures Amendments to MFRS 128 clarify that an entity, which is a venture capital organisation, or a mutual fund, unit trust or similar entities, has an investmentby-investment choice to measure its investments in associates or joint ventures at fair value through profit or loss. Amendments to MFRS 140 Investment Property Amendments to MFRS 140 clarify that to transfer to, or from, investment properties there must be evidence of a change in use. To conclude if a property has changed use there should be an assessment of whether the property meets the definition of investment property. A change in intention, in isolation, does not provide evidence of a change in use. the amendments also clarify that the list of circumstances that evidence a change in use is not exhaustive. 72 Annual Report 2017

74 2. BASIS OF PREPARATION (cont d) (a) Statement of Compliance (cont d) New MFRSs, Amendments/Improvements to MFRSs and New IC (cont d) (ii) New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective (cont d) IC Int 22 Foreign Currency Transactions and Advance Consideration IC Int 22 clarifies that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. (b) Functional and Presentation Currency the individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates ( the functional currency ). The consolidated financial statements are presented in Ringgit Malaysia ( RM ), which is also the Company s functional currency. All financial information presented in RM has been rounded to the nearest RM, unless otherwise stated. (c) Basis of Measurement the financial statements of the Group and of the Company have been prepared on the historical cost basis, except as otherwise disclosed in the summary of significant accounting policies. (d) Significant Accounting Estimates and Judgements Significant areas of estimation uncertainty and critical judgements used in applying accounting principles that have significant effect on the amount recognised in the financial statements are described in the following notes: (i) Tax expense (Note 8) significant judgement is required in determining the capital allowances and deductibility of certain expenses when estimating the provision for taxation. There were transactions during the ordinary course of business for which the ultimate tax determination of whether additional taxes will be due is uncertain. The Group recognises liabilities for tax based on estimates of assessment of the tax liability due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current tax and deferred tax in the periods in which the outcome is known. Annual Report

75 2. BASIS OF PREPARATION (cont d) (d) Significant Accounting Estimates and Judgements (cont d) (ii) Depreciation of property, plant and equipment (Note 10) the cost of property, plant and equipment is depreciated on a straight line method over the assets useful lives. Management estimates the useful lives of these property, plant and equipment to be within 3 to 47 years. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (iii) Impairment of investment in subsidiaries, other investment and goodwill (Note 12, 14 and 15) significant judgement is used in the estimation of the present value of future cash flows generated by the cash-generating units which involve uncertainties and are based on assumptions used and judgement made regarding estimates of future cash flows and discount rate. (iv) Write down of inventories to net realisable value (Note 17) reviews are made periodically by the 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. (v) Impairment loss on trade receivables and other receivables (Note 18 and 19) the Group assesses at each reporting date whether there is any objective evidence that a receivable is impaired. Allowances are applied where events or changes in circumstances indicate that the balances may not be collectable. to determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where the expectation is different from the original estimate, such difference will impact the carrying amount of receivables at the reporting date. (vi) Fair value of investment property (Note 11) the measurement of the fair value of the investment properties performed by management is based on an independent professional valuation with reference to the direct comparison method, being comparison of current prices in an active market for similar properties in the same location and condition and where necessary, adjusting for location, terrain, size, present market trends and other differences and income method, being the projected net income and other benefits that the subject property can generate over the life of the property capitalised at market derived yields to arrive at the present value of the property. The management believes that the chosen valuation techniques and assumptions are appropriate in determining the fair value of the Group s investment property. 74 Annual Report 2017

76 3. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Consolidation (i) Subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entities and has the ability to affect those returns through its power over the entities. the accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group. (ii) Accounting for Business Combinations Business combinations are accounted for using acquisition method from the acquisition date, which is the date on which control is transferred to Group. the Group has changed its accounting policy with respect to accounting for business combinations. Acquisition on or after 1 April 2011 For acquisition on or after 1 April 2011, the Group measures goodwill at the acquisition date as: (i) The fair value of the consideration transferred; plus (ii) The recognised amount of any non-controlling interests in the acquiree; plus (iii) If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less (iv) The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a gain on bargain purchase is recognised immediately in profit or loss. the consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Annual Report

77 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (a) Basis of Consolidation (cont d) (ii) Accounting for Business Combinations (cont d) Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree s employees (acquiree s awards) and relate to past services, then all or a portion of the amount of the acquirer s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree s awards and the extent to which the replacement awards relate to past and/or future service. Acquisitions between 1 April 2006 and 1 April 2011 For acquisitions between 1 April 2006 and 1 April 2011, goodwill represents the excess of the cost of the acquisition over the Group s interest in the recognised amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree. When the excess was negative, a gain on bargain purchase was recognised immediately in profit or loss. transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations were capitalised as part of the cost of the acquisition. Acquisitions prior 1 April 2006 For acquisitions prior 1 April 2006, goodwill represents the excess of the cost of the acquisition over the Group s interest in the fair values of the net identifiable assets and liabilities. 76 Annual Report 2017

78 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (a) Basis of Consolidation (cont d) (iii) Accounting for Acquisitions of Non-controlling Interests the Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves. (iv) Loss of Control upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equityaccounted investee or as an available-for-sale financial asset depending on the level of influence retained. Prior to 1 April 2011, if the Group retained any interest in the previous subsidiary, such interest was measured at the carrying amount at the date that control was lost and this carrying amount would be regarded as cost on initial measurement of the investment. (v) Non-controlling Interests Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and consolidated statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the financial year between non-controlling interests and the owners of the Company. Since 1 April 2011, losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. This change in accounting policy is applied prospectively in accordance with the transitional provisions of the standard. Annual Report

79 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (a) Basis of Consolidation (cont d) (v) Non-controlling Interests (cont d) Prior to 1 April 2011, where losses applicable to the non-controlling interests exceed their interests in the equity of a subsidiary, the excess, and any further losses applicable to the non-controlling interests, were charged against the Group s interest except to the extent that the non-controlling interests had a binding obligation to, and was able to, make additional investment to cover the losses. If the subsidiary subsequently reported profits, the Group s interest was allocated with all such profits until the non-controlling interests share of losses previously absorbed by the Group had been recovered. (vi) Transactions Eliminated on Consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. (b) Joint Ventures Joint ventures are joint arrangements whereby the parties that have joint control of the arrangements have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. In the Company s financial statements, an investment in a joint venture is stated at cost less impairment losses, if any, unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale). the Group s interest in joint ventures is accounted for in the consolidated financial statements using the equity method of accounting. Under the equity method, an investment in a joint venture is initially recognised at cost. Thereafter, the consolidated financial statements include the Group s share of the profit or loss and other comprehensive income of the joint ventures, after adjustments to align the accounting policies with those of the Group, from the date that the investee becomes a joint venture. the Group s share of the profit or loss of the joint ventures during the financial year is included in the consolidated financial statements, after adjustments to align the accounting policies with those of the Group, from the date that joint control commences until the date that joint control ceases. 78 Annual Report 2017

80 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (b) Joint Ventures (cont d) the Group s investment in joint ventures is recorded at cost inclusive of goodwill and adjusted thereafter for accumulated impairment loss and the post acquisition change in the Group s share of net assets of the joint venture. When the Group s share of losses exceeds its interest in a joint venture, the carrying amount of that interest (including any long-term interests that, in substance, form part of the Group s net investment in the joint venture) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has a legal or constructive obligation or has made payments on behalf of the investee. Should the joint venture subsequently report profits, the Group will only resume to recognise its share of profits after its share of profits equals to the share of losses previously not recognised. After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group s investment in its joint ventures. The Group determines at each reporting date whether there is any objective evidence that the investment in the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognises the amount in profit or loss. Any reversal of impairment loss is recognised in profit or loss to the extent that the recoverable amount of the investment subsequently increases. the Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that is attributable to the other venturers. The Group does not recognise its share of profits or losses from the joint venture that result from the purchase of assets by the Group from the joint venture until it resells the assets to an independent party. However, a loss on the transaction is recognised immediately if the loss provides evidence of a reduction in the net realisable value of current assets or an impairment loss. When necessary, in applying the equity method, adjustments are made to the financial statements of the joint ventures to ensure consistency of accounting policies with those of the Group. unrealised gains on transactions between the Group and its joint venture are eliminated to the extent of the Group s interest in the joint venture; unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred. Where necessary, in applying the equity method, adjustments are made to the financial statements of the joint venture to ensure consistency of accounting policies with those of the Group. Upon disposal of such investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss. Annual Report

81 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (c) Goodwill on Business Combination Goodwill arises on the acquisition of subsidiaries. the goodwill represents the excess of the cost of the acquisition over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Goodwill is measured at cost and is not amortised but tested for impairment at least annually or more frequently when there is objective evidence of impairment. Goodwill is allocated to cash generating units and is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment. The entire carrying amount of the investment is tested for impairment when there is objective evidence of impairment. (d) Foreign Currencies (i) Foreign Currency Transactions In preparing the financial statements of the individual entities, transactions in currencies other than the entity s functional currency (foreign currencies) are recorded in Ringgit Malaysia using the exchange rates prevailing at the dates of the transactions. Monetary items denominated in foreign currencies at the reporting date are translated to the functional currencies at the exchange rates on the reporting date. Non-monetary items denominated in foreign currencies are not retranslated at the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on settlement of monetary items and on retranslation of monetary items at the reporting date are recognised in profit or loss except for exchange differences arises on monetary items that form part of the Group s net investment in foreign operation. These are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences arising on monetary items that form part of the Company s net investment in foreign operations are recognised in profit or loss in the Company s separate financial statements or the individual financial statements of the foreign operation, as appropriate. 80 Annual Report 2017

82 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (d) Foreign Currencies (cont d) (i) Foreign Currency Transactions (cont d) exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity. (ii) Foreign Operations Denominated in Functional Currencies other than Ringgit Malaysia the results and financial position of foreign operations that have a functional currency different from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows: (i) Assets and liabilities for each reporting date presented are translated at the closing rate prevailing at the reporting date; (ii) Income and expenses are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and (iii) All resulting exchange differences are taken to other comprehensive income. Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 April 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date. Goodwill and fair value adjustments which arose on the acquisition of foreign subsidiaries before 1 April 2006 are deemed to be assets and liabilities of the parent company and are recorded in RM at the rate prevailing at the date of acquisition. Upon disposal of a foreign subsidiary, the cumulative amount of translation differences at the date of disposal of the subsidiary is taken to the consolidated profit or loss. (e) Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable. Annual Report

83 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (e) Revenue Recognition (cont d) (i) Goods Sold Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised upon delivery of goods when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. (ii) Rental Income Rental income is recognised on an accrual basis. (iii) Dividend Income Dividend income is recognised when the right to receive payment is established. (iv) Interest Income Interest income is recognised on an accrual basis using the effective interest method. (v) Rendering of Services Revenue from the installation of plating machine/equipment is recognised by reference to the stage of completion at the reporting date. Stage of completion is determined by reference to actual costs incurred to date as a percentage of total estimated costs for each contract. Where the contract outcome cannot be measured reliably, revenue is recognised to the extent of the expenses recognised that are recoverable. (f) Employee Benefits (i) Short Term Employee Benefits Wages, salaries, social security contributions and bonuses are recognised as an expense in the financial year in which the associated services are rendered by employees of the Group. 82 Annual Report 2017

84 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (f) Employee Benefits (cont d) (i) Short Term Employee Benefits (cont d) Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. (ii) Defined Contribution Plans the Company and subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign subsidiaries make contributions to their respective countries statutory pension schemes and recognise the contribution payable: (a) after deducting contribution already paid as liability; and (b) as an expense in the financial year in which the employees rendered their services. (iii) Termination Benefits termination benefits are payable whenever an employee s employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. the Group recognises termination benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal or to provide termination benefits as a result of a proposal to encourage voluntary redundancy. Benefits falling due more than 12 months after the reporting date are discounted to present value. (g) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowings costs are recognised in profit or loss in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds. Annual Report

85 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (h) Leases (i) Finance Lease the Group as Lessee Assets acquired by way of finance leases where the Group assumes substantially all the benefits and risks of ownership are classified as property, plant and equipment. Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges. The corresponding finance lease obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property, plant and equipment acquired under finance lease is depreciated in accordance with the depreciation policy for property, plant and equipment. (ii) Operating Lease the Group as Lessee operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentive provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. The up-front payment for lease of land represents prepaid land lease payments and are amortised on a straight-line basis over the lease term. (iii) Operating Lease the Group as Lessor Assets leased out under operating leases are presented on the statements of financial position according to the nature of the assets. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. (i) Tax Expense (i) Income Tax 84 tax expense in profit or loss represents the aggregate amount of current and deferred tax. Current tax is the expected amount payable in respect of taxable income for the financial year, using tax rates enacted or substantially enacted by the reporting date, and any adjustments recognised for prior financial years tax. When an item is recognised outside profit or loss, the related tax effect is recognised either in other comprehensive income or directly in equity. Annual Report 2017

86 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (i) Tax Expense (cont d) (i) Income Tax (cont d) Deferred tax is recognised using the liability method, on all temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is not recognised if the temporary difference arises 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 nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to apply in the period in which the assets are realised or the liabilities are settled, based on tax rates and tax laws that have been enacted or substantially enacted by the reporting date. Deferred tax assets are recognised only to the extent that there are sufficient taxable temporary differences relating to the same taxable entity and the same taxation authority to offset or when it is probable that future taxable profits will be available against which the assets can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realised. unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will be available for the assets to be utilised. Deferred tax assets relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from business combination is adjusted against goodwill on acquisition or the amount of any excess of the acquirer s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities over the acquisition cost. (ii) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax ( GST ) except: where the GST incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables that are stated with the amount of GST included. the net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position. Annual Report

87 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (j) Discontinued Operations A component of the Group is classified as discontinued operations when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations. A component is deemed to be held for sale if its carrying amounts will be recovered principally through a sale transaction rather than through continuing use. upon classification as held for sale, non-current assets and disposal groups are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in profit or loss. (k) Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that are directly attributable to the acquisition of the asset. Subsequent costs are included in the assets carrying amount or recognised as separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The costs of the day-today servicing of property, plant and equipment are recognised in profit or loss as incurred. Freehold land has an unlimited useful life and therefore is not depreciated. Assets under construction included in property, plant and equipment are not depreciated as these assets are not yet available for use. Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates: Leasehold buildings Over the lease period of 8 to 47 years Plant and machinery 6.6% 20% Furniture and fittings 10% 20% Motor vehicles 10% 33.3% office machines and equipment 7.5% 20% Sundry tools and equipment 10% 20% Computer equipment 20% 33.33% the residual values, useful lives and depreciation method are reviewed at each reporting date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. 86 Annual Report 2017

88 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (k) Property, Plant and Equipment and Depreciation (cont d) An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is recognised in profit or loss. Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use and no further charge for depreciation is made in respect of these property, plant and equipment. (l) Investment Properties Investment properties are properties which are held either to earn rental income or capital appreciation or for both and which are not substantially occupied for use by, or in the operation of the Group. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Fair value is arrived at by reference to market evidence of transaction of prices for similar properties and is performed by a registered independent valuer having an appropriate recognised professional qualification and recent experience in the location and category of the properties being valued. Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the financial year in which they arise. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future benefits is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year in which they arise. (m) Other Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. the cost of intangible assets acquired in a business combination is their fair values as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each reporting date. Annual Report

89 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (n) Impairment of Non-financial Assets the carrying amounts of non-financial assets other than investment properties carried at fair value, inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the asset s recoverable amount is estimated. The recoverable amount is the higher of fair value less costs of disposal and the value in use, which is measured by reference to discounted future cash flows and is determined on an individual asset basis, unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit to which the asset belongs to. An impairment loss is recognised whenever the carrying amount of an item of asset exceeds its recoverable amount. An impairment loss is recognised as expense in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro-rata basis. Any subsequent increase in recoverable amount of an asset, other than goodwill, due to a reversal of impairment loss is restricted to the carrying amount that would have been determined (net of accumulated depreciation, where applicable) had no impairment loss been recognised in prior years. The reversal of impairment loss is recognised in profit or loss. (o) Inventories trading inventories, finished goods, inventories-in-transit, work-in-progress and raw materials are stated at the lower of cost determined on the first-in first-out basis and net realisable value after adequate provision has been made for all deteriorated, damaged, obsolete or slow moving inventories. Cost of finished goods and work-in-progress includes cost of raw materials, direct labour and a proportion of manufacturing overheads. Cost of trading inventories, raw materials, inventories-in-transit and stores and spares includes the original purchase price and the incidental cost of bringing the inventories to their present locations and conditions. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale. 88 Annual Report 2017

90 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (p) Contract for Rendering of Services Where the outcome of a contract for rendering of services can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs. Where the outcome of a service contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable to be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the total costs incurred on service contracts plus recognised profits (less recognised losses) exceed progress billings, the balance is shown as amount due from customers on contract. When the progress billings exceed costs plus recognised profits (less recognised losses), the balance is shown as amount due to customers on contract. (q) Financial Assets Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. the Group and the Company determine the classification of their financial assets at initial recognition, and has categorised the financial assets as loans and receivables and available-for-sale financial assets. (i) Loans and Receivables Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current. Annual Report

91 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (q) Financial Assets (cont d) (ii) Available-for-sale Financial Assets Available-for-sale are financial assets that are designated as available for sale or are not classified in financial assets at fair value through profit or loss, heldto-maturity investments and loans and receivables. After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial asset are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group s right to receive payment is established. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss. 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. A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss. Regular way purchases or sales are purchases and sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e. the date that the Company commit to purchase or sell the asset. the effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument, or where appropriate, a shorter period to the net carrying amount on initial recognition. 90 Annual Report 2017

92 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (r) Fair Value Estimation of Unquoted Equity Securities the fair values of unquoted equity securities that are not traded in an active market are determined by using a variety of methods and makes assumptions based on market conditions existing at each reporting date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as discounted cash flow analyses, are also used to determine the fair value of securities. However, if the probabilities of various estimates cannot be reasonably measured, the Company is precluded from measuring the instruments at fair value, and the financial instruments are measured at cost. (s) Impairment of Financial Assets the Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired. (i) Trade and other Receivables and other Financial Assets Carried at Amortised Cost to determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group s and the Company s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables. If any such evidence exists, the amount of impairment loss 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. The impairment loss is recognised in profit or loss. the carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account. 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 to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss. Annual Report

93 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (s) Impairment of Financial Assets (cont d) (ii) Available-for-sale Financial Assets Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired. If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss. Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For availablefor-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss. (iii) Unquoted Equity Securities Carried at Cost If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the 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. (t) Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and on hand, and demand deposits that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank overdraft. 92 Annual Report 2017

94 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (u) Share Capital An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. (v) Financial Liabilities Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability. Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities. (i) Other Financial Liabilities the Group s and the Company s other financial liabilities include trade payables, other payables including deposits and accruals and borrowings. trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group and the Company have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss. Annual Report

95 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (w) Segment Reporting For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by their respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the senior management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are disclosed in Note 30, including the factors used to identify the reportable segments and the measurement basis of segment information. (x) 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 specified debtor fails to make payment when due. Financial guarantee contracts are recognised initially as a liability 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. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group and the Company, 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 reporting date and the amount initially recognised less cumulative amortisation. (y) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. (z) Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of uncertain future event(s) not wholly within the control of the Group. 94 Annual Report 2017

96 3. SIGNIFICANT ACCOUNTING POLICIES (cont d) (z) Contingencies (cont d) Contingent liabilities or assets are not recognised in the statements of financial positions of the Group. (aa) Fair Value Measurement Fair value of an asset or liability, except for share-based payment and lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market which must be accessible to by the Group. 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 the highest and best use or by selling it to another market participant that would use the asset in its highest and best use. the Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities; Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at each reporting date. For the purpose of fair value disclosures, the Group had determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. Annual Report

97 4. REVENUE Revenue of the Group and of the Company comprise the following: Group company RM RM RM RM Sale of goods 14,155,829 12,026, Rental income from investment property 5,076,808 9,745,659 5,076,808 9,745,659 19,232,637 21,772,644 5,076,808 9,745, COST OF SALES Cost of sales of the Group and of the Company comprise of the following: Group company RM RM RM RM Manufacturing and trading goods 8,680,013 7,365, Direct expenses on investment property 2,337,564 2,511,372 2,337,564 2,511,372 11,017,577 9,877,234 2,337,564 2,511, Annual Report 2017

98 6. (LOSS)/PROFIT BEFORE TAX FROM CONTINUING OPERATIONS (Loss)/Profit before tax from continuing operations is arrived at after charging/ (crediting): Group company RM RM RM RM Auditors remuneration Audit services current financial year 210, ,630 89,040 84,000 (over)/under provision in prior financial year (863) 4, ,000 other services by auditor of the Company 30,000 29,000 30,000 29,000 Amount due from subsidiaries written off ,329 Bad debts written off 7, Depreciation of property, plant and equipment 761, , , ,558 Employee benefits expenses [Note 6 (a)] 5,260,742 5,286,298 2,579,132 2,741,378 Impairment loss on other receivables - 74,767-74,767 Reversal of Impairment loss on amount due from a subsidiary - - (570,458) (738,961) Interest expenses bank overdrafts and other bank borrowings 3,561,776 3,766,688 3,474,764 3,661,596 others ,090 72,337 Research and development expenditure 105, , others ,337 Non-executive directors remuneration (Note 7) 320, , , ,670 Operating leases: Rental of office and computer equipment 14,180 7,074 2,540 7,074 Rental of premises 128, , Property, plant and equipment written off - 31, Annual Report

99 6. (LOSS)/PROFIT BEFORE TAX FROM CONTINUING OPERATIONS (cont d) (Loss)/Profit before tax from continuing operations is arrived at after charging/ (crediting): (cont d) Group company RM RM RM RM Realised foreign exchange loss/(gain) 324, ,220 (280,989) - Recovery of bad debts - (13,895) - - Dividend income - - (170,340) - Gain on disposal of property, plant and equipment - (98,354) - (99,999) Gain on disposal of investment in unquoted shares (96,319) Interest income (31,778) (284) (31,682) - Legal case compensation (1,975,103) Unrealised foreign exchange (gain) 131,320 (379,109) - - Waiver of amount due by subsidiary (174,427) Waiver of other payables (10,741) (616,808) - - GST not claimable 2,660 1,887 2,660 1,887 (a) Employee benefits expenses Group company RM RM RM RM Salaries, bonus and other staff related costs 4,661,306 4,731,903 2,284,251 2,428,415 Contributions to defined contribution plans 599, , , ,963 Employee benefits expenses 5,260,742 5,286,298 2,579,132 2,741,378 Included in employee benefits expenses of the Group and of the Company are executive directors remuneration amounting to RM1,629,336 (2016: RM1,576,789) and RM1,446,056 (2016: RM1,401,820). 98 Annual Report 2017

100 7. DIRECTORS REMUNERATION Directors of the Company: Group company RM RM RM RM Executive directors Salaries and other emoluments 1,458,780 1,416,175 1,275,500 1,241,206 Contributions to defined contribution plans 170, , , ,614 Estimated monetary value of benefit-in-kind 26,883 24,060 26,883 24,060 Directors of the Company: 1,656,219 1,600,849 1,472,939 1,425,880 Non-executive directors Fees 228, , , ,000 Other emoluments 92, ,478 92, ,386 Estimated monetary value of benefit-in-kind - 4,284-4,284 Director of the subsidiary: 320, , , ,670 Executive directors Salaries and other emoluments 433, , Contributions to defined contribution plans 45,303 36, , , ,455,096 2,418,571 1,781,510 1,815,550 Benefits provided to Directors The estimated value of benefits provided to directors during the financial year by way of usage of the Group s and of the Company s plant and equipment are as follows: Group/Company RM RM Estimated monetary value of benefits-in-kind 26,883 28,344 Annual Report

101 TAX EXPENSE Annual Report 2017 Group company RM RM RM RM Current tax: Current financial year Overseas taxation 179,279 2, Prior financial year Overseas taxation (46,409) 121, Deferred tax: (Note 16) Origination of temporary differences - 177, Tax expense recognised in profit or loss 132, , The reconaliation from tax tax amount at statutory income tax rate to the Group s and the Company s tax expenses is as follow: (Loss)/Profit before tax (1,044,207) 2,146,499 (3,907,127) 569,965 Tax at Malaysian statutory income tax rate of 24% (2016: 24%) (250,610) 515,160 (937,710) 136,792 Effect of different tax rates in foreign jurisdictions 1,633,911 (431,329) - - Non-allowable expenses 756, , , ,102 Deferred tax assets not recognised in the financial statements 663, ,205 - Overseas tax incentive (163,640) (112,339) - - Non-taxable income Utilisation of deferred tax assets not recognised in prior financial years (2,473,506) - (182,149) (325,298) (136,910) - (231,213) (154,681) Others 13,501 (21,976) - - Current financial year expense 179,279 2, (Over)/Under provision in prior financial year: current tax (46,409) 121, deferred tax - 177, Tax expense 132, ,

102 8. TAX EXPENSE (cont d) Domestic income tax is calculated at the Malaysian Statutory tax rate of 24% (2016: 24%) of the estimated assessable profit for the financial year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. 9. (LOSS)/EARNINGS PER ORDINARY SHARE Basic (loss)/earnings per ordinary share Basic (loss)/earnings per share amounts are calculated by dividing (loss)/profit for the financial year from continuing or discontinued operations attributable to owners of the Company by the weighted average number of ordinary shares outstanding (excluding treasury shares) during the financial year. The basic (loss)/earnings per share is calculated by dividing the Group s (loss)/profit after tax and non-controlling interests by the weighted average number of ordinary shares in issue during the financial year. Group RM RM (Loss)/Profit attributable to owners of Company (1,450,531) 1,914,439 Weigthed average number of ordinary shares for basic earnings per share computation 228,728, ,728,426 (Loss)/Earnings per ordinary share (sen) (0.63) 0.84 Diluted (loss)/profit per ordinary share The Group has no dilutive potential ordinary shares. As such, there is no dilution effect on the (loss)/earnings per ordinary share of the Group for the financial year. Annual Report

103 10. PROPERTY, PLANT AND EQUIPMENT E equipment, tools, plant Furniture Group Land and and and Motor buildings machinery fittings vehicles Total 2017 RM RM RM RM RM Cost At 1 April ,971,938 2,744,343 1,844,131 1,035,652 24,596,064 Additions - 227,805 2, ,706 Written off - - (10,179) - (10,179) Translation difference 804, , ,431 19,814 1,170,954 At 31 March ,776,061 3,156,734 1,999,284 1,055,466 25,987,545 Accumulated depreciation At 1 April ,659,900 2,533,337 1,671, ,051 11,684,893 Charge for the financial year 609,037 86,479 42,753 22, ,031 Written off - - (10,179) - (10,179) Translation difference 412, , ,186 1, ,062 At 31 March ,681,904 2,781,601 1,854, ,937 13,161,807 Accumulated impairment loss At 1 April , ,993 Translation difference - 3, ,828 At 31 March , ,821 Net carrying amount At 31 March ,094, , , ,529 12,779, Annual Report 2017

104 10. PROPERTY, PLANT AND EQUIPMENT (cont d) E equipment, tools, plant Furniture Group Land and and and Motor buildings machinery fittings vehicles Total 2016 RM RM RM RM RM Cost At 1 April ,356,004 3,146,756 1,735,443 1,236,654 24,474,857 Additions - 5,395 4, , ,920 Disposals - (93,362) - (360,000) (453,362) Written off - (486,973) (22,965) - (509,938) Translation difference 615, , ,217 4, ,587 At 31 March ,971,938 2,744,343 1,844,131 1,035,652 24,596,064 Accumulated depreciation At 1 April ,757,688 2,828,326 1,532,661 1,164,214 11,282,889 Charge for the financial year 603, ,636 48,106 15, ,796 Disposals - (85,615) - (359,999) (445,614) Written off - (455,694) (22,767) - (478,461) Translation difference 298, , , ,283 At 31 March ,659,900 2,533,337 1,671, ,051 11,684,893 Accumulated impairment loss At 1 April , ,062 Translation difference - 2, ,931 At 31 March , ,993 Net carrying amount At 31 March ,312, , , ,601 12,869,178 Annual Report

105 10. PROPERTY, PLANT AND EQUIPMENT (cont d) Analysis of equipment, tools, plant and machinery: Office machines Sundry Group and tools and Computer Plant and equipment equipment equipment machinery Total 2017 RM RM RM RM RM Cost At 1 April ,759 1,328, ,466 98,318 2,744,343 Additions 102, , ,805 Translation difference 28, ,836 18,424 8, ,586 At 31 March ,798 1,582, , ,280 3,156,734 Accumulated depreciation At 1 April ,078 1,255, ,592 68,181 2,533,337 Charge for the financial year 36,045 47,264 3,170-86,479 Translation difference 18, ,862 18,312 6, ,785 At 31 March ,521 1,421, ,074 74,394 2,781,601 Accumulated impairment loss At 1 April , ,137 41,993 Translation difference 1, ,748 3,828 At 31 March , ,885 45,821 Net carrying amount At 31 March , ,154 2, , Annual Report 2017

106 10. PROPERTY, PLANT AND EQUIPMENT (cont d) Analysis of equipment, tools, plant and machinery (cont d): Office machines Sundry Group and tools and Computer Plant and equipment equipment equipment machinery Total 2016 RM RM RM RM RM Cost At 1 April ,720 1,541, ,145 91,455 3,146,756 Additions 5, ,395 Disposal (9,504) - (83,858) - (93,362) Written off (158,320) (328,653) - - (486,973) Translation difference 30, ,017 19,179 6, ,527 At 31 March ,759 1,328, ,466 98,318 2,744,343 Accumulated depreciation At 1 April ,606 1,378, ,184 63,421 2,828,326 Charge for the financial year 23,956 71,721 5, ,636 Disposal (9,504) - (76,111) - (85,615) Written off (158,070) (297,624) - - (455,694) Translation difference 24, ,274 12,560 4, ,684 At 31 March ,078 1,255, ,592 68,181 2,533,337 Accumulated impairment loss At 1 April , ,034 39,062 Translation difference ,103 2,931 At 31 March , ,137 41,993 Net carrying amount At 31 March ,825 73,314 5, ,013 Annual Report

107 10. PROPERTY, PLANT AND EQUIPMENT (cont d) Office machines Furniture Company Motor and Computer and Building vehicles equipment equipment fittings Total 2017 RM RM RM RM RM RM Cost At 1 April ,148, , , ,548 41,408 11,755,939 Additions ,449 2,901 4,350 At 31 March ,148, , , ,997 44,309 11,760,289 Accumulated depreciation At 1 April ,206, , , ,976 21,195 3,766,558 Charge for the financial year 441,239-4, , ,698 At 31 March ,647, , , ,816 25,126 4,217,256 Net carrying amount At 31 March ,501, ,605 2,181 19,183 7,543, Annual Report 2017

108 10. PROPERTY, PLANT AND EQUIPMENT (cont d) Office machines Furniture Company Motor and Computer and Building vehicles equipment equipment fittings Total 2016 RM RM RM RM RM RM Cost At 1 April ,148,497 1,162, , ,548 41,408 12,115,939 Disposal - (360,000) (360,000) At 31 March ,148, , , ,548 41,408 11,755,939 Accumulated depreciation At 1 April ,764,956 1,162, , ,128 17,433 3,676,999 Charge for the financial year 441,239-4,709 (152) 3, ,558 Disposal - (359,999) (359,999) At 31 March ,206, , , ,976 21,195 3,766,558 Net carrying amount At 31 March ,942, ,293 1,572 20,213 7,989,381 Annual Report

109 10. PROPERTY, PLANT AND EQUIPMENT (cont d) (a) The buildings of the Group and of the Company have been pledged to a licensed bank for banking facilities granted to the Group. (b) During the financial year, the Group acquired property, plant and equipment with aggregate cost of RM230,706 (2016: RM163,920) of which are satisfied as follows: Group RM RM Cash payments 230, ,920 (c) Property, plant and equipment acquired under finance lease arrangements are as follows: Group RM RM Net carrying amount Office machines and equipment 23,434 29, INVESTMENT PROPERTY The investment property of the Group and of the Company is the Wisma Chase Perdana building. The fair value of the said property as at 31 March 2017 was approximately RM140.5 million (2016: RM140.5 million). The fair value was arrived at after taking into consideration the valuation conducted by an external professional firm of surveyors and valuers using the comparison method and/or the income method. Group/Company RM RM At fair value At beginning of the financial year 140,477, ,477, Annual Report 2017

110 11. INVESTMENT PROPERTY (cont d) The investment property is pledged to a licensed bank for term loan granted to the Company as mentioned in Note 27. Rental income generated from and direct operating expenses incurred on investment property are as follows: Group/Company RM RM Rental income 5,076,808 9,745,659 Direct operating expenses generated rental income 2,979,577 2,511,372 Fair value hierarchy disclosures for investment properties have been provided in Note During the financial year, the estimated fair value of the investment property performed by management is based on an independent professional valuation with reference to the income method, being the projected net income and other benefits that the subject property can generate over the life of the property capitalised at market derived yields to arrive at the present value of the property. The most significant input into this valuation approach is the estimated net annual income generated by the property which is arrived at after deducting all costs as the base value and discounting this net annual income with the commercial yields for the duration of the life expectancy of the property or the term of the lease In the previous financial year, the estimated fair value of the investment property performed by management was based on an independent professional valuation with reference to the direct comparison method, being comparison of current prices in an active market for similar properties in the same location and condition and where necessary, adjusting for location, terrain, size, present market trends and other differences. The most significant input into this valuation approach was price per square foot of comparable properties. Annual Report

111 12. SUBSIDIARIES Company RM RM Unquoted shares, at cost At beginning/end of the financial year 37,007,739 37,007,739 Less: Accumulated impairment loss At beginning/end of the financial year (37,007,682) (37,007,682) Amount due from subsidiaries 128,321, ,479,178 Less: Allowance for impairment loss At beginning of the financial year (117,004,000) (117,742,961) Reversal 570, ,961 At end of the financial year (116,433,542) (117,004,000) 11,888,213 12,475,178 11,888,270 12,475,235 Amount due to subsidiaries note Interest bearing (a) 1,175,666 1,462,108 Non-interest bearing (b) - 455,367 1,175,666 1,917,475 The amount due from subsidiaries is non-trade in nature, unsecured and interest free. The settlement of the amount is neither planned nor likely to occur in the foreseeable future. As this amount is, in substance, a part of the Company s net investment in the subsidiaries, it is stated at cost less accumulated impairment loss. The management performed an impairment test for the Company s investment in subsidiaries and amount due from subsidiaries in view of the continuing losses of the subsidiaries. Full impairment on investments in certain subsidiaries and amount due from certain subsidiaries had been made for subsidiaries which had become inactive. 110 Annual Report 2017

112 12. SUBSIDIARies (cont d) Amount due to subsidiaries: (a) Amounts due to subsidiaries consist of advances and recoverable expenses which are non-trade in nature, unsecured, bears interest at rate of 6.00% (2016: 6.00%) per annum, expected to be settled in cash and is repayable on demand. (b) Amounts due to subsidiaries consist of advances and recoverable expenses which are non-trade in nature, unsecured, interest free and expected to be settled in cash and is repayable on demand. The particulars of the subsidiaries are as follows: Principal place of business/ Country of Effective ownership interest/ Voting rights Name of company incorporation Principal activities Turiya Technologies Republic of 100% 100% Investment holding Pte. Ltd. ** Singapore Turiya-CH Management Malaysia 51% 51% Domant Services Sdn. Bhd. Turiya Technologies (M) Malaysia 100% 100% Domant Sdn. Bhd. # Iconic Global Limited ** Republic of 75% 75% Investment holding Singapore Zeal International Holdings Republic of 100% 100% Investment holding Ltd. Ç Seychelles Subsidiaries of Turiya Technologies Pte. Ltd. Pyramid Manufacturing Republic of 100% 100% Manufacturing and Industries Pte. Ltd. ** Singapore trading in chemicals Subsidiary of Pyramid Manufacturing Industries Pte. Ltd. Wuxi CEM Electronics People s Republic 100% 100% Dormant Equipment Co. Ltd. * ø of China Annual Report

113 12. SUBSIDIARies (cont d) Principal place of business/ Country of Effective ownership interest/ Voting rights Name of company incorporation Principal activities Subsidiary of Zeal International Holdings Ltd Amcare Group International British Virgin 72% 72% Investment holding Ltd. ç Islands Subsidiary of Amcare Group International Ltd. Alliance Health Partners Inc. ç British Virgin 72% 72% Investment holding Islands Subsidiary of Alliance Health Partners Inc. Amcare Lab International United States of 65% 65% Establishment of global Inc. * America network of laboratory medicine systems Subsidiaries of Amcare Labs International Inc. Amcare Labs Emirates British Virgin 65% 65% Dormant Limited * ç Islands * Audited by firms of auditors other than Baker Tilly AC ** Audited by independent member firm of Baker Tilly International in the respective countries ç Not required to be audited under the local laws and regulations # Consolidated using unaudited management financial statements and under members voluntary winding up ø Subsidiary with auditors report that contained a modified opinion on the basis of the matter described below: The auditors of Wuxi CEM Electronics Co., Ltd., a subsidiary of the Company, were unable to send confirmations to verify trade receivables and other receivables of RM94,177 and RM65,533 respectively as of 31 March In addition, there were no other alternative audit procedures that could be adopted to obtain sufficient evidence. Accordingly, the auditors of Wuxi CEM Electronics Co., Ltd. were unable to determine whether any adjustments to the said amounts were necessary. As a result, the auditors of Wuxi CEM Electronics Co., Ltd. express a modified opinion of the financial statements. 112 Annual Report 2017

114 12. SUBSIDIARies (cont d) The subsidiaries of the Group that have material non-controlling interests ( NCI ) are as follows: Amcare Turiya-CH Labs Iconic Management International Individually Global Services Inc. and its immaterial Limited Sdn. Bhd. subsidiaries Sdn. Bhd. Total 2017 RM RM RM RM RM NCI percentage of ownership interest and voting interest 25% 49% 35% Carrying amount of NCI (150,921) 5,024 (721,686) (14,237) (881,820) Profit/(Loss) allocated to NCI 278, (2,809) (3,452) 273,454 Total comprehensive income allocated to NCI 9, ,460 1,374 25, NCI percentage of ownership interest and voting interest 25% 49% 35% Carrying amount of NCI (429,917) 167,965 (636,815) (9,097) (907,864) Profit/(Loss) allocated to NCI 17,615 (18,879) (70,949) 3,232 (68,981) Total comprehensive income/(loss) allocated to NCI 54,516 (18,879) (70,949) (25,128) (60,440) Annual Report

115 12. SUBSIDIARIES (cont d) The financial information of Iconic Global Limited, Turiya-CH Management Services Sdn. Bhd. and Amcare Labs International Inc. and its subsidiaries before intra-group elimination of the subsidiaries that have material NCI as of the reporting date are as follows: 2017 Amcare Turiya-CH Labs Iconic Management International Global Services Inc. and its Limited Sdn. Bhd. subsidiaries RM RM RM Assets and liabilities Non-current assets Current assets 104,710 14,069 91,438 Current liabilities (5,045,241) (3,816) (2,141,682) Net (liabilities)/assets (4,940,531) 10,253 (2,050,244) Results Revenue Profit/(Loss) for the financial year 1,114,201 1,467 (7,865) Total comprehensive income/(loss) 1,114,201 1,467 (7,865) Cash flows from/(used in) operating activities 1,322, ,920 (28,894) Cash flows from investing activities ,987 Cash flows used in financing activities (1,287,479) (549,454) - Net increase/(decrease) in cash and cash equivalents 34,530 (3,534) 86,093 Dividends paid to NCI - 163, Annual Report 2017

116 12. SUBSIDIARIES (cont d) The financial information of Iconic Global Limited, Turiya-CH Management Services Sdn. Bhd. and Amcare Labs International Inc. and its subsidiaries before intra-group elimination of the subsidiaries that have material NCI as of the reporting date are as follows: (cont d) 2016 Amcare Turiya-CH Labs Iconic Management International Global Services Inc. and its Limited Sdn. Bhd. subsidiaries RM RM RM Assets and liabilities Non-current assets - 2,957 1,361 Current assets 610, ,131 2,995 Current liabilities (6,293,590) (294,302) (1,813,490) Net (liabilities)/assets (5,683,033) 342,786 (1,809,134) Results Revenue Profit/(Loss) for the financial year 70,348 (38,529) (201,560) Total comprehensive income/(loss) 217,716 (38,529) (201,560) Cash flows used in operating activities Cash flows from/(used in) financing activities (570,519) 627,904 (2,936) (1,593) (4,397) 2,023 Net increase/(decrease) in cash and cash equivalents 57,385 (4,529) (2,374) Dividends paid to NCI There are no significant restrictions on the Company s ability to access or use the assets and settle the liabilities of the Group. Annual Report

117 13. INVESTMENT IN JOINT VENTURE Group RM RM Unquoted share 3 3 The particulars of the joint venture are as follows: Principal place of business/ Effective ownership interest/ Voting country of rights Principle Name of company incorporation activities Interest held by Zeal International Holdings Ltd. Health Invest British Virgin 50% 50% Web based electronic International Ltd. Islands medical records The Group has not recognised losses related to Health Invest International Ltd., totalling RM3,674 (2016: RM4,790) in the current financial year and RM3,369,417 (2016: RM3,365,743) cumulatively, since the Group has no obligation in respect of these losses. The Group s joint venture is not material individually or in aggregate to the financial position, financial performance and cash flows of the Group. There are no contingent liabilities that are incurred jointly with other investors. 116 Annual Report 2017

118 14. INTANGIBLE ASSETS Group 2017 Goodwill on consolidation RM Total RM Cost At 1 April ,599, ,599,697 Translation difference 363, ,830 At 31 March ,963, ,963,527 Accumulated impairment loss At 1 April 2016/31 March ,607, ,607,476 Net carrying amount At 31 March ,356,051 4,356, Cost At 1 April ,241, ,241,752 Translation difference 14,357,945 14,357,945 At 31 March ,599, ,599,697 Accumulated impairment loss At 1 April ,528, ,528,215 Translation difference 14,079,261 14,079,261 At 31 March ,607, ,607,476 Net carrying amount At 31 March ,992,221 3,992,221 Annual Report

119 14. INTANGIBLE ASSETS (cont d) (a) Impairment tests for goodwill Goodwill on acquisition is allocated to the Group s cash-generating units ( CGU ), business segment as follows: Group RM RM Semi-conductor 4,356,051 3,992,221 Goodwill is tested annually for impairment, including in the year of its initial recognition, as well as when there are indicators of impairment. Impairment losses are recognised when the carrying amount of the cash generating unit to which the goodwill has been allocated exceeds its recoverable amount. Impairment loss is recognised in the consolidated statement of profit or loss and other comprehensive income and subsequent reversal is not allowed. The recoverable amount of semi-conductor segment is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the fiveyear period are extrapolated using the growth rates stated below. The following describes each key assumption on which management has based its cash flow projections to undertake impairment testing of goodwill: (i) Budgeted gross margin The budgeted gross margin of 38% (2016: 37%) is based on the management s expectation of market developments in the industry. (ii) Growth rate Growth rate of 2% (2016: 2%) was extrapolated for cash flows beyond the 5-year period as the management does not anticipate significant growth. (iii) Discount rate The pre-tax discount rate used of 11.58% (2016: 14.67%) which reflected specific risks of chemical trading and manufacturing of semiconductor equipment segment in the Republic of Singapore and the People s Republic of China. The management believes that no reasonable change in the above key assumptions would cause the carrying amount of the goodwill to exceed its recoverable amounts. 118 Annual Report 2017

120 15. OTHER INVESTMENT Unquoted shares, at cost Group Company RM RM RM RM At beginning of the financial year 12,500,002 12,500,002 12,500,002 12,500,002 Transferred to non-current assets held for sale (Note 21) (12,500,000) - (12,500,000) - At end of the financial year 2 12,500, ,500,002 In the previosu financial year, included in other investment was an amount of RM12,500,000 representing equity interest of 2.08% in Academic Medical Centre Sdn. Bhd., a company incorporated in Malaysia. 16. deferred tax liabilities Group Company RM RM RM RM At 1 April 2016/2015 2,215,380 2,215,380 1,832,276 1,832,276 Translation difference 34, At 31 March 2,250,294 2,215,380 1,832,276 1,832,276 The components of deferred tax assets and liabilities prior to offsetting are as follows: Group Company RM RM RM RM Unabsorbed capital allowances Investment property * (9,579) 1,832,276 (3,819) 1,832,276 (9,579) 1,832,276 (3,819) 1,832,276 Difference between the carrying amounts of property, plant and equipment and their tax bases 427, ,923 9,579 3,819 2,250,294 2,215,380 1,832,276 1,832,276 * The rate applied to compute the deferred tax is based on Real Property Gain Tax of 5%. Annual Report

121 16. deferred tax liabilities (cont d) The deferred tax assets of the Company and certain subsidiaries not recognised in the financial statements are in respect of the following temporary differences: RM RM Group Unutilised tax losses, unabsorbed capital allowances and others 12,609,369 15,514,435 Company Unutilised tax losses, unabsorbed capital allowances and others 6,596,254 3,837,068 Included in unutilised tax losses of the Group is an amount of RM6,004,875 (2016: RM5,280,083) which will expire in the year INVENTORIES Group RM RM At cost: Finished goods 601, ,830 Raw materials 524, ,924 1,126,811 1,074,754 Cost of inventories recognised as expense and included in cost of sales during the financial year amounted to RM8,680,013 (2016: RM7,365,862). 120 Annual Report 2017

122 18. TRADE RECEIVABLES RM RM Group Trade receivables 2,941,787 2,458,464 Company Trade receivables 94,895 83,484 In the previous financial year, included in trade receivables of the Group was an amount of RM25,658 owing by companies in which the Company and/or a director had substantial financial interest. (a) Credit terms of trade receivables Trade receivables are non-interest bearing and are generally on 30 to 60 days (2016: 30 to 60 days) terms. (b) Aging analysis of trade receivables Group Company RM RM RM RM Neither past due nor impaired 2,150,381 1,597,831 73,210 66,834 1 to 30 days past due but not impaired 3, ,801 3,436 8, to 60 days past due but not impaired 683,202 82,513 7,657 1, to 90 days past due but not impaired 2,332 41,263 2,332 6, to 120 days past due but not impaired , More than 121 days past due but not impaired 101, ,515 7, , ,633 21,685 16,650 2,941,787 2,458,464 94,895 83,484 Annual Report

123 18. TRADE RECEIVABLES (cont d) Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired are credit worthy debtors with good payment records with the Group and the Company. None of the Group s and the Company s trade receivables that are neither past due nor impaired have been renegotiated during the financial year. Receivables that are past due but not impaired The Group and the Company have trade receivables amounting to RM791,406 (2016: RM860,633) and RM21,685 (2016: RM16,650) respectively that are past due at the reporting date but not impaired. No impairment loss on trade receivables has been made as, in the opinion of the management, the debts would be collected in full within the next twelve months. 19. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS Group Company Note RM RM RM RM Other receivables, deposits and prepayments 13,661,871 17,718, ,748 5,735,483 Less: Allowance for impairment loss (a) (12,462,940) (11,070,609) (246,579) (246,579) The other receivables, deposits and prepayments comprise: 1,198,931 6,647, ,169 5,488,904 External parties 511, , ,881 A company in which the Company and a director has financial interest (b) 9,420 5,042,181 9,420 5,066,142 Joint venture (b) 7, ,927 7,785 - Related company (b) 24,544-24,544 - Deposits 139, , , ,740 Prepayments 348, , , ,141 GST refundable 158,173-22,292-1,198,931 6,647, ,169 5,488, Annual Report 2017

124 19. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (cont d) (a) The movements of the allowance accounts used to record the impairment loss are as follows: Group Company RM RM RM RM At 1 April 2016/ ,070,609 10,428, , ,812 Charge during the financial year - 74,767-74,767 Translation difference 1,392, , At 31 March 12,462,940 11,070, , ,579 Other receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties. These receivables are not secured by any collateral or credit enhancements. (b) The amounts are non-trade in nature, unsecured, interest free, and repayable on demand in cash. 20. DEPOSITS WITH LICENSED BANK The deposits with licensed bank of the Group and the Company bear effective interest at rate of 1.50% (2016: 0.50% to 2.30%) per annum with maturity period of 3 days (2016: 1 to 410 days). In the previous financial year, deposits amounted to RM436,181 was pledged to bank as security for issuance of bank guarantee for the security deposit. 21. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE The asset classified as held for sales on the Group s and the Company s statement of financial position as at 31 March 2017 is as follows: Group/Company RM RM At cost: Other investment 12,500,000 - On 19 July 2017,the Company entered into share sale agreement with Chase Perdana Sdn. Bhd. to dispose of its 2.08% equity interest in Academic Medical Centre Sdn. Bhd. at a purhase consideration of RM12,500,000. Annual Report

125 22. SHARE CAPITAL Issued and fully paid: The holders of ordinary share are entitled to receive dividends from time to time and are entitled to one vote per share at meeting of the Company. All shares rank equally with regards to the Company s residual assets. The new Companies Act 2016 (the Act ), which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value of share capital. Consequently, the amounts standing to the credit of the share premium account of RM52,050,206 become part of the Company s share capital pursuant to the transitional provisions set out in Section 618(2) of the Act. Notwithstanding this provision, the Company may within 24 months from the commencement of the Act, use the amount standing to the credit of its share premium account of RM52,050,206 for purposes as set out in Sections 618(3). There is no impact on the number of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition. 23. RESERVES Group/Company Number of shares Amount Unit Unit RM RM At beginning of the financial year 228,728, ,728, ,728, ,728,426 Transition to non-par value regime on 31 January ,050,206 - At end of the financial year 228,728, ,728, ,778, ,728,426 Group Company RM RM RM RM Share premium - 52,050,206-52,050,206 Foreign currency translation reserve * 6,427,956 6,004, Accumulated losses (159,957,142) (158,506,611) (156,116,953) (152,209,826) (153,529,186) (100,451,953) (156,116,953) (100,159,620) * These reserves are not available for distribution as dividends. 124 Annual Report 2017

126 23. RESERVES (cont d) (a) Share premium The share premium arose from the issue of the Company s shares at a premium. (b) Foreign currency translation reserve The foreign currency translation reserve is used to record foreign currency differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operations. 24. TRADE PAYABLES The normal trade credit terms granted by the trade payables are generally ranging from 30 to 60 days (2016: 30 to 60 days). 25. AMOUNT DUE TO HOLDING COMPANY The amount is non-trade in nature, unsecured, interest free and repayable on demand in cash. 26. OTHER PAYABLES AND ACCRUALS Group Company RM RM RM RM Other payables 2,364,019 1,471,680 1,049, ,900 Accruals 739,502 1,418, , ,724 Rental and utilities deposits 1,807,571 2,070,590 1,807,571 2,070,590 4,911,092 4,961,110 3,074,898 2,668,214 Included in other payables of the Group and of the Company are amounts of RM1,158,329 (2016: RM351,587) and RM806,741 (2016: RM Nil) owing to related companies. These amounts are non-trade in nature, unsecured, interest free, expected to be settled in cash and are repayable on demand. Annual Report

127 27. BORROWINGS Group Company RM RM RM RM 126 Non-current Term loan secured 37,269,847 41,981,497 37,269,847 41,981,497 Finance lease liabilities Singapore Dollar 19,173 25, Annual Report ,289,020 42,007,148 37,269,847 41,981,497 Current Term loan secured 4,812,176 4,320,756 4,812,176 4,320,756 Bank overdrafts secured Singapore Dollar - 1,295, Finance lease liabilities Singapore Dollar 8,813 7, Term Loan The term loan is repayable as follows: 4,820,989 5,623,616 4,812,176 4,320,756 42,110,009 47,630,764 42,082,023 46,302,253 Group and Company RM RM Within 12 months 4,812,176 4,320,755 More than 1 year but up to 2 years 4,996,037 4,658,500 More than 2 years but up to 3 years 5,415,007 5,022,647 More than 3 years but up to 4 years 5,869,112 5,415,258 More than 4 years but up 5 years 6,361,298 5,838,559 After 5 years 14,628,393 21,046,534 The term loan of the Group and of the Company is secured by: 42,082,023 46,302,253 (a) legal charge over building known as Wisma Chase Perdana, held under lot 51452, Changkat Semantan, Damansara Heights, Kuala Lumpur (Note 10 and 11); and (b) deed of assignment over rental proceeds of the 26 strata office units and car parks in Wisma Chase Perdana. The term loan bear interest at an interest rate of 8.08% (2016: 7.55%) per annum.

128 27. BORROWINGS (cont d) Bank Overdrafts The bank overdrafts of the Group are secured by: (a) corporate guarantee by the Company; and (b) a legal charge over a subsidiary s property. The bank overdrafts bear interest at a rate of 6.00% (2016: 6.00%) per annum. Finance Lease Liabilities Finance lease liabilities are payable as follows: Group RM RM Future minimum lease payments 30,251 36,967 Less: Future finance charges (2,265) (3,712) Total present value of minimum lease payments 27,986 33,255 Payable within one year Future minimum lease payments 10,083 9,241 Less: Future finance charges (1,270) (1,637) Present value of minimum lease payments 8,813 7,604 Payable more than 1 year but not more than 5 years Future minimum lease payments 20,168 27,726 Less: Future finance charges (995) (2,075) Present value of minimum lease payments 19,173 25,651 Total present value of minimum lease payments 27,986 33,255 The finance lease liabilities bear effective interest at a rate of 3.00% (2016: 3.00%) per annum. Annual Report

129 28. OPERATING LEASE ARRANGEMENTS The Group as Lessee Total future minimum lease payments under non-cancellable operating lease in relation to the land and office equipment of the Company and a subsidiary are as follows: Group Company RM RM RM RM Payable within 1 year 136, ,311 6,000 5,940 Payable after 1 year but not later than 5 years 541, ,481 20,000 - Payable after 5 years 2,549,255 3,045, ,227,517 3,758,149 26,000 5,940 The Group leases land and office equipment under operating leases. The leases run for a period of between 5 and 30 years. 29. RELATED PARTY DISCLOSURES (a) Identity of Related Party For the purpose of these financial statements, parties are considered to be related to the Group and the Company if the Group and the Company have the ability to directly control the party or exercise significant influence over the party in making financial and operating decision, or vice versa, or where the Group and the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. The Group and the Company have a related party relationship with its subsidiaries, joint venture, key management personnel, related company, related parties and persons connected to directors. Related company refers to subsidiary of holding company. Related parties refer to companies in which certain directors of the Company have substantial financial interests. 128 Annual Report 2017

130 29. RELATED PARTY DISCLOSURES (cont d) (b) Related Party Transactions and Balances In addition to the transactions disclosed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year: Transactions with a company in which the Company and a director has substantial financial interest Group RM RM Academic Medical Centre Sdn. Bhd. Rental of office received/receivable 12,672 50,054 Transactions with related company Chase Perdana Sdn. Bhd. ( CPSB ) (The Company and CPSB have a common holding company ) Contract work paid/payable 641,013 - Rental of office received/receivable 240, ,390 Transactions with subsidiaries Company RM RM Turiya Technologies Pte. Ltd. Interest paid/payable 64,090 72,337 Turiya-CH Management Services Sdn. Bhd. Purchase of property, plant and equipment 1,449 - Dividend income received/receivable 170,340 - Information on related party balances are disclosed in Notes 12, 18, 19, 25 and 26. Annual Report

131 29. RELATED PARTY DISCLOSURES (cont d) (c) Compensation of Key Management Personnel Key management personnel includes personnel having authority and responsibility for planning, directing and controlling activities of the entity, including directors of the Group and of the Company. The remuneration of the key management personnel (including directors) is as follows: Group Company RM RM RM RM Salaries and other employee benefits 2,212,354 2,193,555 1,584,071 1,626,592 Contribution to statutory provident fund 215, , , ,614 Estimated monetary value of benefits-in-kind 26,883 28,344 26,883 28,344 2,455,096 2,418,571 1,781,510 1,815,550 Included in the key management personnel compensation are: Group Company RM RM RM RM Directors remuneration and fees of the Company 1,949,907 1,974,267 1,754,627 1,787,206 Directors remuneration of subsidiaries 478, , Estimated monetary value of benefits-in-kind 26,883 28,344 26,883 28,344 2,455,096 2,418,571 1,781,510 1,815, Annual Report 2017

132 30. SEGMENT INFORMATION For management purposes, the Group is organised into business segments based on their products and services. The Group s chief operation decision maker reviews the information of each business segment on monthly basis for the purposes of resource allocation and assessment of segment performance. Therefore, the Group s reportable segments under MFRS 8 are as follows: Investment holding Investment property Semi-conductor Health care Investment holding and provision of management consultancy services. Rental of office lots. Manufacturing industrial machineries, chemicals trading. Provision of medical laboratory management and testing. Segment Revenue and Results The accounting policies of the reportable segments are the same as the Group s accounting policies described in Note 3. Segment result represents profit before tax, interest income and finance cost of the segment. Inter-segment transactions are entered in the ordinary course of business based on terms mutually agreed upon by the parties concerned. Segment Assets Segment assets are measured based on all assets (including goodwill) of the segment, excluding investment in joint venture, deferred tax assets and current tax assets. Segment Liabilities Segment liabilities are measured based on all liabilities, excluding current tax liabilities, borrowings and deferred tax liabilities. Information about Major Customers There is no single customer with revenue equal or more than 10% of the Group revenue during the financial year. In the previous financial year, the Group has a major customer with revenue equal or more than 10% of the Group revenue from the investment property segment contributing total revenue of RM5,105,957. Annual Report

133 30. SEGMENT INFORMATION (cont d) 132 (a) Segment Revenue and Results Investment holding & Investment Semi- Health others Property conductor Care Total Eliminations Consolidated 2017 RM RM RM RM RM RM RM REVENUE Annual Report 2017 External revenue - 5,076,808 14,155,829-19,232,637-19,232,637 Intersegment revenue 255, ,244 (255,244) - Total revenue 255,244 5,076,808 14,155,829-19,487,881 (255,244) 19,232,637 RESULTS Segment results (1,367,411) 2,739,244 1,121,939 (7,981) 2,495,791 2,495,791 Interest income 31, ,778 31,778 Profit from operations 2,517,569 2,517,569 Finance costs - (3,537,954) (22,822) - (3,561,776) (3,561,776) (1,044,207) (1,044,207) (132,870) (132,870) Loss before tax Tax expenses (1,177,077) (1,177,077) (273,454) (273,454) (1,450,531) (1,450,531) Loss for the financial year Non-controlling interests Loss attributable to owners of the Company

134 30. SEGMENT INFORMATION (cont d) (a) Segment Revenue and Results (cont d) Investment holding & Investment Semi- Health others Property conductor Care Total Eliminations Consolidated 2016 RM RM RM RM RM RM RM REVENUE External revenue - 9,745,659 12,026,985-21,772,644-21,772,644 Intersegment revenue 380, ,793 (380,793) - Total revenue 380,793 9,745,659 12,026,985-22,153,437 (380,793) 21,772,644 RESULTS Segment results (2,610,369) 7,161,951 1,562,879 (201,558) 5,912,903 5,912,903 Interest income Profit from operations 5,913,187 5,913,187 Finance costs - (3,661,596) (105,092) - (3,766,688) (3,766,688) Profit before tax 2,146,499 2,146,499 Tax expenses (301,041) (301,041) Profit for the financial year 1,845,458 1,845,458 Non-controlling interests 68,981 68,981 Profit attributable to owners of the Company 1,914,439 1,914,439 Annual Report

135 30. SEGMENT INFORMATION (cont d) (b) Segment Assets and Liabilities Investment holding & Investment Semi- Health others Property conductor Care Total Eliminations Consolidated 2017 RM RM RM RM RM RM RM Segment assets representing consolidated total assets 25,671, ,477,498 11,365,108 91, ,605, ,605,933 Segment liabilities 5,416,473-1,387,604 73,927 6,878,004-6,878,004 Borrowings - 42,082,023 27,986-42,110,009-42,110,009 Deferred tax liabilities - 1,832, ,018-2,250,294-2,250,294 Consolidated total liabilities 5,416,473 43,914,299 1,833,608 73,927 51,328,307-51,328,307 OTHER INFORMATION Depreciation of property, plant and equipment 453, ,532 1, , ,031 Additions to non-current assets other than financial instruments and deferred tax assets: Additions to property, plant and equipment and investment property 2, , , , Annual Report 2017

136 30. SEGMENT INFORMATION (cont d) (b) Segment Assets and Liabilities (cont d) Investment holding & Investment Semi- Health others Property conductor Care Total Eliminations Consolidated 2016 RM RM RM RM RM RM RM Segment assets 28,735, ,477,458 14,003,011 4, ,220, ,220,138 Investment in joint venture Consolidated total assets 28,735, ,477,458 14,003,011 4, ,220, ,220,141 Segment liabilities 3,040,336-1,151,566 1,813,486 6,005,388-6,005,388 Borrowings - 46,302,253 1,328,511-47,630,764-47,630,764 Deferred tax liabilities - 1,832, ,104-2,215,380-2,215,380 Consolidated total liabilities 3,040,336 48,134,529 2,863,181 1,813,486 55,851,532-55,851,532 OTHER INFORMATION Depreciation of property, plant and equipment 451, ,412 2, , ,796 Property, plant and equipment written off ,477-31,477-31,477 Additions to non-current assets other than financial instruments and deferred tax assets: Additions to property, plant and equipment and investment property , , ,920 Annual Report

137 30. SEGMENT information (cont d) (c) Geographical Information Revenue information based on the geographical location of customers and non-current assets analysed by geographical location of the assets are as follows: Malaysia Singapore China America Total Consolidated RM RM RM RM RM RM 2017 Revenue 5,076,808 14,155, ,232,637 19,232,637 Non-current assets * 152,376,542 5,236, ,613, ,613, Revenue 9,745,659 11,958,653 68,332-21,772,644 21,772,644 Non-current assets * 148,469,795 8,867,701-1, ,338, ,338,857 * Excluding financial instruments and deferred tax assets 136 Annual Report 2017

138 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include interest rate risk, credit risk, liquidity risks, and foreign currency risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the division heads and heads of departments within the Group and the Company. The Audit Committee provides independent oversight to the effectiveness of risk management process. The following sections provide details regarding the Group s and the Company s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks. (a) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of the Group s financial instruments will fluctuate because of changes in market interest rates. The Group s exposure to interest rate relates to interest bearing financial assets and liabilities. Interest bearing financial assets include fixed deposits with licensed banks which are placed for better yield returns than cash at banks. The deposits placed with licensed banks at fixed rate expose the Group to fair value interest rate risk. The Group s interest bearing financial liabilities comprise finance lease liabilities, bank overdrafts, bank line of credit and term loan. The bank overdrafts, bank line of credit and term loan totalling RM42,082,023 (2016: RM47,597,509) at floating rate expose the Group to cash flow interest rate risk. The finance lease liabilities at fixed rate expose the Group to fair value interest rate risk. Sensitivity analysis for interest rate risk At the reporting date, an increase/decrease of 50 basis points in interest rate, with all other variables held constant, the Group s profit net of tax would increase or decrease by approximately RM159,900 (2016: RM181,300), arising mainly as a result of lower/ higher interest expenses on floating rate loans and borrowings. (b) Credit Risk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group s and the Company s exposure to credit risk arises primarily from trade and other receivables. The Group has a credit policy in place and the exposure to credit risk is managed through the application of credit approvals, credit limits and monitoring procedures. Annual Report

139 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (b) Credit Risk (cont d) The Company provides unsecured loans and advances to subsidiaries and joint venture. The maximum exposure to credit risk is represented by their carrying amounts in the statements of financial position as at the end of the financial year. The Company also has exposure to credit risk arising from the corporate guarantee provided by the Company to the banks on the subsidiaries banking facilities. As at the end of the financial year, an amount of RM116,433,542 and RM11,751,578 (2016: RM117,004,000 and RM10,412,221) was impaired in respect of loans and advances to subsidiaries and joint venture respectively. The Company does not specifically monitor the ageing of the advances to the subsidiaries and joint ventures. Credit risk concentration profile There is no significant concentration of credit risk with any single party as at the reporting date. The Group determines concentration of credit risk by monitoring the country of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group s net trade receivables at the reporting date are as follows: Group RM RM By country Republic of Singapore 2,752,715 2,199,940 People s Republic of China 94,177 88,984 Malaysia 94, ,540 2,941,787 2,458, Annual Report 2017

140 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (b) Credit Risk (cont d) Financial guarantee The Company provides financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the repayments made by the subsidiaries and their financial performance. The maximum exposure to credit risk amounts to RM Nil (2016: RM1,295,256) representing the outstanding banking facilities of the subsidiaries at the reporting date. At the reporting date, there was no indication that the subsidiaries would default on its repayment. The financial guarantee has not been recognised as the fair value on initial recognition was immaterial. (c) Liquidity Risk Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations when they fall due. The Group s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group s objective is to maintain a balance between continuity of funding and flexibility through use of stand-by credit facilities. The Group s and the Company s liquidity risk management policy is to manage its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. In addition, the Group and the Company maintain sufficient levels of cash and available banking facilities at a reasonable level to its overall debt position to meet their working capital requirement. Annual Report

141 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (c) Liquidity Risk (cont d) The table below summarises the maturity profile of the Group s and the Company s financial liabilities at the reporting date based on contractual undiscounted repayment obligations: On demand Carrying Contractual or within 1 to 2 2 to 5 Over 5 amount cash flows 1 year years years years Group RM RM RM RM RM RM 31 March 2017 Financial liabilities: Trade payables 980, , , Other payables and accruals 4,911,092 4,911,092 4,911, Amount due to holding Company 800, , , Borrowings 42,110,009 55,068,410 7,835,187 7,835,187 23,485,397 15,912,639 48,801,172 61,759,573 14,526,350 7,835,187 23,485,397 15,912, March 2016 Financial liabilities: Trade payables 1,044,278 1,044,278 1,044, Other payables and accruals 4,961,110 4,961,110 4,961, Borrowings 47,630,764 62,040,827 7,678,333 7,678,333 23,025,761 23,658,400 53,636,152 68,046,215 13,683,721 7,678,333 23,025,761 23,658, Annual Report 2017

142 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (c) Liquidity Risk (cont d) The table below summarises the maturity profile of the Group s and the Company s financial liabilities at the reporting date based on contractual undiscounted repayment obligations: (cont d) On demand Carrying Contractual or within 1 to 2 2 to 5 Over 5 amount cash flows 1 year years years years Company RM RM RM RM RM RM 31 March 2017 Financial liabilities: Trade payables 47,418 47,418 47, Other payables and accruals 3,074,898 3,074,898 3,074, Amount due to subsidiaries 1,175,666 1,175,666 1,175, Amount due to holding company 800, , , Borrowings 42,082,023 55,038,159 7,825,104 7,825,104 23,475,312 15,912,639 47,180,005 60,136,141 12,923,086 7,825,104 23,475,312 15,912, March 2016 Financial liabilities: Trade payables 77,521 77,521 77, Other payables and accruals 2,668,214 2,668,214 2,668, Amount due to subsidiaries 1,917,475 1,917,475 1,917, Borrowings 46,302,253 62,003,860 7,669,092 7,669,092 23,007,276 23,658,400 50,965,463 66,667,070 12,332,302 7,669,092 23,007,276 23,658,400 Annual Report

143 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (d) Foreign Currency Risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency rates. The Group and the Company has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of the Group, primarily Ringgit Malaysia, China Renminbi ( RMB ) and Singapore Dollar ( SGD ). The foreign currency in which these transactions are denominated is mainly in United States Dollar ( USD ). The Company has advances from its subsidiary denominated in Singapore Dollar ( SGD ). The Group is also exposed to currency translation risk arising from its net investments in foreign operations. The Group s net investment in Singapore and China is not hedged as currency positions in SGD and RMB are considered to be long-term in nature. Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level. The Group s foreign currency exposure profiles are as follows: USD RM Total RM 2017 Financial Assets Cash and cash equivalents 820, ,588 Trade receivables 1,507,530 1,507,530 2,328,118 2,328,118 Financial Liabilities Trade and other payables (691,867) (691,867) Currency exposure on net financial assets 1,636,251 1,636, Annual Report 2017

144 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (d) Foreign Currency Risk (cont d) USD RM Total RM 2016 Financial Assets Cash and cash equivalents 226, ,725 Trade receivables 1,058,614 1,058,614 1,285,339 1,285,339 Financial Liabilities Trade and other payables (542,466) (542,466) Currency exposure on net financial assets 742, ,873 The Company s foreign currency exposure profiles is as follows: SGD RM Total RM 2017 Financial Liabilities Amount due to a subsidiary, represent currency exposure on net financial assets (1,175,666) (1,175,666) 2016 Financial Liabilities Amount due to a subsidiary, represent currency exposure on net financial assets (1,462,108) (1,462,108) Annual Report

145 31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (d) Foreign Currency Risk (cont d) Sensitivity analysis for foreign currency risk The table below demonstrates the sensitivity to a reasonable change in key foreign currency rate with all variables held constant, of the Group s and of the Company s (loss)/profit net of tax ( LAT/PAT ). Group USD/SGD RM RM LAT PAT weaken 3% (2016: 1%) 40,743 (6,166) strengthen 3% (2016: 1%) (40,743) 6,166 Company SGD/RM weaken 9% (2016: 8%) (80,416) 88,896 strengthen 9% (2016: 8%) 80,416 (88,896) CATEGORIES OF FINANCIAL INSTRUMENTS The following table analyses the financial assets and liabilities in the statements of financial position by class of financial instruments to which they are assigned, and therefore by the measurement basis. Group 2017 Annual Report 2017 Loans and receivables RM Total RM Financial assets Trade receivables 2,941,787 2,941,787 Other receivables and deposits * 692, ,557 Deposits with licensed bank 128, ,665 Cash and bank balances 2,089,126 2,089,126 * Excluding GST refundable and prepayments 5,852,135 5,852,135

146 32. CATEGORIES OF FINANCIAL INSTRUMENTS (cont d) The following table analyses the financial assets and liabilities in the statements of financial position by class of financial instruments to which they are assigned, and therefore by the measurement basis (cont d). Financial liabilities at amortised cost Total RM RM Group 2017 Financial liabilities Trade payables 980, ,071 Amount due to holding company 800, ,000 Other payables and accruals 4,911,092 4,911,092 Borrowings 42,110,009 42,110,009 48,801,172 48,801,172 Loans and receivables RM Total RM Group 2016 Financial assets Trade receivables 2,458,464 2,458,464 Other receivables and deposits * 6,319,282 6,319,282 Deposits with licensed bank 857, ,875 Cash and bank balances 2,337,487 2,337,487 11,973,108 11,973,108 Financial liabilities at amortised cost RM Total RM Financial liabilities Trade payables 1,044,278 1,044,278 Other payables and accruals 4,961,110 4,961,110 Borrowings 47,630,764 47,630,764 53,636,152 53,636,152 * Excluding GST refundable and prepayments Annual Report

147 32. CATEGORIES OF FINANCIAL INSTRUMENTS (cont d) The following table analyses the financial assets and liabilities in the statements of financial position by class of financial instruments to which they are assigned, and therefore by the measurement basis (cont d). Loans and receivables RM Total RM Company 2017 Financial assets Trade receivables 94,895 94,895 Other receivables and deposits * 173, ,542 Deposits with licensed bank 128, ,665 Cash and bank balances 543, , , ,570 Financial liabilities at amortised cost RM Total RM Financial liabilities Trade payables 47,418 47,418 Amount due to subsidiaries 1,175,666 1,175,666 Amount due to holding company 800, ,000 Other payables and accruals 3,074,898 3,074,898 Borrowings 42,082,023 42,082,023 47,180,005 47,180,005 * Excluding GST refundable and prepayments 146 Annual Report 2017

148 32. CATEGORIES OF FINANCIAL INSTRUMENTS (cont d) The following table analyses the financial assets and liabilities in the statements of financial position by class of financial instruments to which they are assigned, and therefore by the measurement basis (cont d). Loans and receivables RM Total RM Company 2016 Financial assets Trade receivables 83,484 83,484 Other receivables and deposits * 5,199,763 5,199,763 Deposits with licensed bank 421, ,694 Cash and bank balances 1,930,387 1,930,387 7,635,328 7,635,328 Financial liabilities at amortised cost RM Total RM Financial liabilities Trade payables 77,521 77,521 Amount due to subsidiaries 1,917,475 1,917,475 Other payables and accruals 2,668,214 2,668,214 Borrowings 46,302,253 46,302,253 50,965,463 50,965,463 * Excluding GST refundable and prepayments Annual Report

149 33. FAIR VALUE OF FINANCIAL INSTRUMENTS The methods and assumptions used to determine the fair value of the following classes of financial assets and liabilities are as follows: (a) Cash and cash equivalents, trade and other receivables and payables The carrying amounts of cash and cash equivalents, trade and other receivables and payables are reasonable approximation of fair values due to short term nature of these financial instruments. (b) Borrowings The carrying amounts of the current portion of borrowings are reasonable approximation of fair values due to the insignificant impact of discounting. The carrying amount of long term floating rate loan approximates fair value as the loans will be re-priced to market interest rate on or near reporting date. The fair value of finance lease liabilities is estimated using discounted cash flow analysis based on current lending rate of similar types of lease arrangements. The carrying amounts and fair value of financial instruments, other than those with carrying amounts are reasonable approximation of fair value are as follows: Group Company Carrying Fair Carrying Fair amount value amount value RM RM RM RM 2017 Financial liabilities Term loan (non-current) 37,269,847 37,269,847 37,269,847 37,269,847 Finance lease liabilities 27,986 27, Financial liabilities Term loan (non-current) 41,981,497 41,981,497 41,981,497 41,981,497 Finance lease liabilities 33,255 32, Annual Report 2017

150 34. FAIR VALUE HIERARCHY The following table provides the fair value measurement of the Group s assets and liabilities as at 31 March: Assets Measured at Fair Value Group/Company Fair value measurement using 2017 Level 1 Level 2 Level 3 RM RM RM RM Investment property (Note 11) 140,477, ,477, Level 1 Level 2 Level 3 RM RM RM RM Investment property (Note 11) 140,477, ,477,458 Liabilities Measured at Fair Value Group Fair value measurement using 2017 Level 1 Level 2 Level 3 RM RM RM RM Term loan (non-current) 37,269,847-37,269,847 - Finance lease liabilities 27,024-27, Level 1 Level 2 Level 3 RM RM RM RM Term loan (non-current) 41,981,497-41,981,497 - Finance lease liabilities 32,365-32,365 - Annual Report

151 34. FAIR VALUE HIERARCHY (cont d) The following table provides the fair value measurement of the Group s assets and liabilities as at 31 March: (cont d) Liabilities Measured at Fair Value (cont d) Company Fair value measurement using 2017 Level 1 Level 2 Level 3 RM RM RM RM Term loan (non-current) 37,269,847-37,269, Level 1 Level 2 Level 3 RM RM RM RM Term loan (non-current) 41,981,497-41,981,497 - In the current financial year, a valuation was performed in April 2017 and the directors have exercised judgement that there is no significant change in value at the reporting date. Description of valuation technique used and key unobservable inputs to valuation on investment poperty measured at Level 3 is as follows: Valuation technique Significant unobservable Relationship of unobservable inputs inputs and fair value 2017 Income method Estimated rental value The higher the estimated rental, per square feet per month the higher the fair value of RM RM7.01 E estimated outgoings per the higher the estimated square feet per month of outgoings, the lower the fair RM0.70 value E estimated capitalisation rate The higher the estimated of 6.50% capitalisation rate, the lower the fair value Estimated market yield rate of 6.25% The higher the estimated market yield rate, the lower the fair value 150 Annual Report 2017

152 34. FAIR VALUE HIERARCHY (cont d) Description of valuation technique used and key unobservable inputs to valuation on investment poperty measured at Level 3 is as follows: (cont d) Valuation technique Significant unobservable Relationship of unobservable inputs inputs and fair value 2016 Comparison method Estimated price per square The higher the estimated price foot of RM616 per square foot, the higher the fair value Policy on Transfer between Levels The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. During the financial year ended 31 March 2017 and 31 March 2016, there was no transfer between the fair value measurement hierarchy. 35. CAPITAL COMMITMENT Group/Company RM RM Capital expenditures approved and contracted for: investment property 2,468, CAPITAL management The primary objective of the Group s capital management is to ensure that it maintains healthy capital ratio in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in business and economic conditions. To maintain or adjust capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies and processes during the financial years ended 31 March 2017 and 31 March The Group is not subject to any externally imposed capital requirements. Annual Report

153 36. CAPITAL MANAGEMENT (cont d) The Group monitors capital using a gearing ratio, which is total net debts divided by total equity. Net debts is calculated as total debts (loans and borrowings) less cash and cash equivalents. Total equity is calculated as share capital plus reserves and non-controlling interests. The Group s and the Company s gearing ratios as at the reporting date are as follows: Group Company RM RM RM RM Borrowings 42,110,009 47,630,764 42,082,023 46,302,253 Less: Cash and cash equivalents (2,217,791) (3,195,362) (672,133) (2,352,081) Net debts 39,892,218 44,435,402 41,409,890 43,950,172 Total equity 126,367, ,368, ,661, ,568,806 Gearing ratio SIGNIFICANT EVENT SUBSEQUENT TO THE END OF THE FINANCIAL YEAR On 19 July 2017, the Company entered into share sale agreement with Chase Perdana Sdn. Bhd. to dispose of its 2.08% equity interest in Academic Medical Centre Sdn. Bhd. at a purchase consideration of RM12,500,000. The transaction is expected to be completed within the next financial year. 152 Annual Report 2017

154 SUPPLEMENTARY NOTES TO INFORMATION THE FINANCIAL ON STATEMENTS THE DISCLOSURE (cont d) OF REALISED AND UNREALISED PROFITS 31 OR March LOSSES 2017 The following analysis of realised and unrealised accumulated losses of the Group and of the Company as at 31 March 2017 and 31 March 2016 is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad ( Bursa Malaysia ) dated 25 March 2010 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 Listing Requirements, as issued by the Malaysian Institute of Accountants. The accumulated losses of the Group and the Company as at 31 March 2017 and 2016 are as follows: Group Company RM RM RM RM Total accumulated losses of the Company and its subsidiaries realised (348,757,281) (356,966,429) (190,930,180) (187,023,053) unrealised 45,011,364 43,920,472 34,813,227 34,813,227 (303,745,917) (313,045,957) (156,116,953) (152,209,826) Add: Consolidated adjustments 143,788, ,539, Total accumulated losses as per statements of financial position (159,957,142) (158,506,611) (156,116,953) (152,209,826) The disclosure of realised and unrealised profit or loss above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia and should not be applied for any other purposes. Annual Report

155 List of properties As at 31 March 2017 Approx. Net Age of Carrying Date of D description Existing Land Area buildings Amount Valuation/ Address of Property Use Tenure ( sq. ft. ) ( Years ) ( RM ) Acquisition Turiya Berhad Wisma Chase Perdana Freehold Office Freehold 241, ,978, April Changkat Semantan and office 2017 Damansara Heights building 100 (Valuation) Kuala Lumpur Pyramid Manufacturing Industries Pte. Ltd. 87 Tuas Avenue 1 Leasehold Office Leasehold 24, ,593, October Singapore land and and ( buildings Factory yrs lease (Acquisition) expiring 2042) TOTAL 152,571, Annual Report 2017

156 location of operations Factories/Plants PYRAMID MANUFACTURING INDUSTRIES PTE. LTD. SINGAPORE No. 87, Tuas Avenue 1 Singapore Tel : Fax : / branches/sales offices Turiya TECHNOLOGIES PTE. LTD. ICONIC GLOBAL LIMITED PYRAMID MANUFACTURING INDUSTRIES PTE. LTD. SINGAPORE No. 87, Tuas Avenue 1 Singapore Tel : Fax : / SINGAPORE No. 87, Tuas Avenue 1 Singapore Tel : Fax : / SINGAPORE No. 87, Tuas Avenue 1 Singapore Tel : Fax : / WUXI CEM ELECTRONICS EQUIPMENT CO. LTD. P.R. CHINA No.12 Chun Lei Rd. XiShan Economic Development Zone Wuxi, Jiangsu P.R. China Tel : Fax : AMcare labs international inc. U.S.A. U. Amcare Labs International c/o BusinessSuites Harborplace 111 S. Calvert St. Suite 2700 Box 672 Baltimore, MD Tel: Fax: Annual Report

157 analysis of shareholdings (ordinary shares) As At 30 JUNE 2017 SHARE CAPITAL FOR ORDINARY SHARES Authorized Capital : RM450,000, Issued and Paid-Up Share Capital : RM228,728, Class of Securities : Ordinary Shares Voting Rights : On a poll, one vote per ordinary share held DISTRIBUTION SCHEDULE FOR ORDINARY SHARES Size of Holdings No. of Shareholders (%) Total Shareholdings (%) Less than , ,000 1, ,302, ,001 10,000 2, ,203, , , ,006, ,001 11,436,420 * ,561, ,436,421 and above ** ,651, Total 4, ,728, * Less than 5% of issued ordinary shares ** 5% and above of issued ordinary shares THIRTY LARGEST ORDINARY SHAREHOLDERS (As per Record of Depositors) No. of Shares % of Issued Name of Shareholders/Depositors held Shares 1. *Maybank Nominees (Asing) Sdn Bhd 116,651, Ithmaar Bank B.S.C. 2. *Maybank Nominees (Asing) Sdn Bhd 32,000, Ithmaar Bank for Empire Holdings Limited (988122) 3. Sekarajasekaran A/L Arasaratnam 10,407, Rabindra A/L Harichandra 9,027, Chelliah Holdings Sdn Bhd 6,000, Chief Minister, State of Sabah 6,000, Public Nominees (Tempatan) Sdn Bhd 4,912, [Pledged Securities Account for Chelliah Holdings Sdn Bhd (SRB/PDN/PMS)] 8. Empire Holdings Limited 3,833, Public Nominess (Tempatan) Sdn Bhd 1,247, [Pledged Securities Account for Cheng Lin Chin (E-PBT)] 10. Kenanga Nominees (Tempatan) Sdn Bhd 1,030, [Pledged Securities Account for Teh Siew Wah (021)] 156 Annual Report 2017

158 analysis of shareholdings (ordinary shares) (cont d) As At 30 JUNE 2017 THIRTY LARGEST ORDINARY SHAREHOLDERS (cont d) (As per Record of Depositors) No. of Shares % of Issued Name of Shareholders/Depositors held Shares 11. Subramaniam Pillai A/L Sankaran Pillai 1,014, Citigroup Nominees (Tempatan) Sdn Bhd 1,004, [Pledged Securities Account for Vijaya Alphonsus Rajadurai (471247)] 13. Yeoh Kean Choong 871, PM Nominees (Tempatan) Sdn Bhd 592, [Pledged Securities Account for Khoo Yee Tat (B)] 15. Arasalingam A/L Sangarapillai 450, Mohamed Idris Mohamed Aslam 400, Ang Chun Bock 363, Maybank Nominees (Tempatan) Sdn Bhd 362, [Pledged Securities Account for Ahmad Bukhari Bin Ibrahim] 19. Ooi Say Hup 359, Cimsec Nominees (Tempatan) Sdn Bhd [CIMB Bank for Khor Hoe Guan (M57008)] 335, Ooi Say Hup 332, Maybank Securities Nominees (Tempatan) Sdn Bhd 321, [Pledged Securities Account for Sekarajasekaran A/L Arasaratnam (Margin)] 23. Maybank Nominees (Tempatan) Sdn Bhd 320, [Chua Eng Ho Wa Chua Eng Wah] 24. Lim Swee Ing 310, Pang Kok Eng 280, Maybank Nominees (Tempatan) Sdn Bhd 271, [Pledged Securities Account for Sekarajasekaran A/L Arasaratnam] 27. Siah Gim Eng 270, Wong Yuen Choong 243, Cimsec Nominees (Tempatan) Sdn Bhd 222, [Pledged Securities Account for Ng Geok Wah (B Brklang-CL] 30. Public Nominees (Tempatan) Sdn Bhd 218, [Pledged Securities Account for Lu Choon Yii (E-SRK)] Total 199,651, * Maybank Nominees (Asing) Sdn. Bhd. Shamil Bank of Bahrain B.S.C. (C), holds 116,651,497 Turiya Berhad s shares on behalf of Empire Holdings Limited as a chargee. Annual Report

159 analysis of shareholdings (ordinary shares) (cont d) As At 30 JUNE 2017 SUBSTANTIAL ORDINARY SHAREHOLDERS (As per Register of Substantial Shareholders and excluding bare trustee) Name of Substantial No. of Shares No. of Shares Ordinary Shareholders direct Interest % Indirect Interest % 1. Ithmaar Bank of B.S.C. *116,651,497 (a) Empire Holdings Ltd ( EHL ) *152,485,087 (b) Tan Sri Datuk Dr. Mohan - - *152,485,087 (c) A/L M.K. Swami, J.P. 4. Rabindra A/L Harichandra ( RH ) 9,027, *10,912,600 (d) 4.77 DIRECTORS INTERESTS IN ORDINARY SHARES (As per Register of Directors Shareholdings) Name of Directors No. of Shares No. of Shares D direct Interest % Indirect Interest % 1. Tan Sri Datuk Dr. Mohan - - *152,485,087 (c) A/L M.K. Swami, J.P. ( TSDDMS ) 2. Dato Mohamed Nazir Bin Nor Md Usha Nathan A. Vaidyanathan Mr. Jayapalasingam Kandiah 150, Mr. Abdulla Abdulaziz Ali Taleb * Notes: (a) Direct Interest of Ithmaar Bank of B.S.C. (A nominee of Ithmaar Development Company Limited ( IDC ) pursuant to the Shares Charge created by EHL in favour of IDC) is held as follows:- 116,651,497 shares held through Maybank Nominees (Asing) Sdn. Bhd. (b) Direct Interest of EHL is held as follows:- 35,833,590 shares held under EHL; and 116,651,497 shares held through Maybank Nominees (Asing) Sdn. Bhd. for Ithmaar Bank of B.S.C. (Beneficiary: EHL) (c) Indirect Interest of TSDDMS is held as follows:- Deemed interests in 152,485,087 shares by virtue that EHL is wholly owned by TSDDMS. (d) Indirect Interest of RH is held as follows:- Deemed interests in 10,912,600 shares by virtue of RH s substantial shareholding in Chelliah Holdings Sdn. Bhd. 158 Annual Report 2017

160 ANALYSIS OF Shareholdings (IRREDEEMABLE CONVERTIBLE PREFERENCE SHAREs) SHARE CAPITAL FOR IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES ( ICPS ) Authorized Capital : RM50,000, Issued and Paid-Up Share Capital : Nil Class of Securities : ICPS Voting Rights : No voting rights Annual Report

161 other information Compliance Statement The Board confirms that the Group has made significant effort to maintain high standards of corporate governance throughout the year under review. The Board acknowledges that achieving excellence in corporate governance is a continuous process and is committed to play a pro-active role in steering the Group towards the highest level of integrity and ethical standard. Additional Compliance Information The following is provided in compliance with the Main Market Listing Requirements of Bursa Securities: Utilisation of Proceeds There were no proceeds raised from any corporate exercises during the financial year ended 31 March Share Buyback There was no share buyback exercise undertaken by the Company during the financial year ended 31 March Options, Warrants or Convertible Securities There were no options, warrants or convertible securities issued during the financial year ended 31 March American Depository Receipt ( ADR ) or Global Depository Receipt ( GDR ) The Company has not sponsored any ADR or GDR programme during the financial year ended 31 March Sanctions and/or Penalties Imposed There was no sanction and/or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 March Non-Audit Fees During the financial year ended 31 March 2017, there was RM54, non-audit fees paid to the external auditors. 160 Annual Report 2017

162 other information (cont d) Profit Guarantee The Company did not provide any profit guarantee during the financial year ended 31 March Variation in results The Audited Financial Statements of the Company for the financial year ended 31 March 2017 contained in this Annual Report do not have material variance compared with the Quarterly Results of the Group that was announced to Bursa Securities on 24 May Material Contracts Involving Directors and Substantial Shareholders The Company and its subsidiaries did not enter into any material contracts involving Directors and Substantial Shareholders during the financial year ended 31 March Revaluation Policy on Landed Properties The Group has adopted a policy of sufficient regularity revaluation of its landed properties. Annual Report

163 notice of annual general meeting NOTICE IS HEREBY GIVEN THAT the Thirty-Seventh Annual General Meeting of Turiya Berhad (55576-A) will be held at the Dewan Perdana, Aras 1, Menara Suruhanjaya Koperasi Malaysia, Changkat Semantan Off Jalan Semantan, Bukit Damansara, Kuala Lumpur on Wednesday, 23 August 2017 at 9.30 a.m. for the following purposes: AGENDA AS ORDINARY BUSINESS: 1. To receive the Audited Financial Statements of the Company for the financial year ended 31 March 2017 together with the Reports of the Directors and Auditors thereon. 2. To re-elect the following Directors, who are retiring pursuant to Article 107 of the Company s Articles of Association and being eligible, offer themselves for re-election:- (i) Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. (ii) Ms. Usha Nathan A. Vaidyanathan Resolution 1 Resolution 2 3. To appoint Messrs. Baker Tilly Monteiro Heng who have indicated their willingness, as Auditors of the Company in place of the retiring Auditors, Messrs. Baker Tilly AC, and to hold office until the conclusion of the next Annual General Meeting of the Company and to authorise the Directors to fix their remuneration. AS SPECIAL BUSINESS: 4. To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without modifications: Resolution 3 (a) Ordinary Resolution - Approval of Directors Fees Resolution 4 THAT the Directors fees totaling RM216,000/- for the financial year ended 31 March 2017 be and is hereby approved. (b) Ordinary Resolution - Authority for directors to issue and allot shares in the Company pursuant to Section 76 of the Companies Act, 2016 Resolution THAT pursuant to Section 76 of the Companies Act, 2016 and subject to the Articles of Association of the Company and the approvals of the relevant government/regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per centum (10%) of the issued capital of the Company for the time being AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company. Annual Report 2017

164 notice of annual general meeting (cont d) 5. To transact any other business of the Company of which due notice shall have been given in accordance with the Company s Articles of Association and the Companies Act, By Order of the Board Wong Youn Kim (MAICSA ) Company Secretary 31 July 2017 Kuala Lumpur NOTES: 1. A member entitled to attend and vote at this meeting is entitled to appoint not more than two proxies to attend and vote in his/her stead and where a member appoints two proxies, the holder shall specify the proportion of his/her shareholding to be represented by each proxy. A proxy or attorney need not be a member of the Company. There shall be no restriction as to the qualification of the proxy. 2. (i) Where a member is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy but not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account; (ii) Where a member of the Company is an exempt authorized nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds. An exempt authorized nominees refers to an authorized nominee defined under the Securities Industry (Central Depositories) Act 1991 ( SICDA ) which is exempted from compliance with the provisions of subsection 25A (1) of the SICDA; (iii) Where a member or the authorized nominee appoints two (2) proxies, or where an exempt authorized nominee appoints two (2) or more proxies, the proportions of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies; and (iv) A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting. 3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorized in writing, or if the appointor is a corporation, either under the corporation s seal or under the hand of an officer or attorney duly authorized. 4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Suite 7.3, 7th Floor, Wisma Chase Perdana, Changkat Semantan, Damansara Heights, Kuala Lumpur not less than 48 hours before the appointed time of holding this meeting or any adjournment thereof. 5. Depositors who appear in the Record of Depositors as at 17 August 2017 shall be regarded as Members of the Company entitled to attend the 37th Annual General Meeting or appoint a proxy to attend and vote on his/her behalf. Annual Report

165 notice of annual general meeting (cont d) EXPLANATORY NOTES FOR AUDITED FINANCIAL STATEMENTS: The Audited Financial Statement under Agenda 1 are laid in accordance with Section 340(1)(a) of the Companies Act, 2016 for discussion only as the approval of shareholders is not required, Hence, this Agenda is not put forward for voting by the Shareholders of the Company. EXPLANATORY NOTES FOR SPECIAL BUSINESS: 1. ORDINARY RESOLUTION ON APPROVAL OF DIRECTORS FEES The Proposed Resolution No. 4 is in accordance with Article 101 of the Company s Articles of Association and if passed, will authorise the payment of Directors fees to the Non-Executive Directors of the Company for their services rendered as Directors for the financial year ended 31 March ORDINARY RESOLUTION ON AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 76 OF THE COMPANIES ACT, 2016 The Proposed Resolution No. 5, if passed, will give the Directors of the Company authority to issue shares in the Company up to an amount not exceeding 10% of the total issued capital of the Company for the time being for such purposes as the Directors deem consider would be in the best interests of the Company. This authority, unless revoked or varied by the shareholders of the Company in general meeting, will expire at the conclusion of the next Annual General Meeting. The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to placing of shares, for purpose of funding current and/or future investment project(s), working capital and/or acquisitions. As at the date of this Notice, the Company has not issued any new shares pursuant to the authority granted to the Directors at the last Annual General Meeting held on 16 August 2016 and thus, no proceeds were raised there-from. 164 Annual Report 2017

166 Statement accompanying notice of annual general meeting 1. The Directors who are offering themselves for re-election at the Thirty-Seventh Annual General Meeting are as follows: Name position Age Nationality (i) Tan Sri Datuk Dr. Mohan Executive Chairman 66 Malaysian A/L M.K. Swami, J.P. (ii) Ms. Usha Non-Independent 47 Malaysian Nathan A. Vaidyanathan Non-Executive Director For details on the Directors who are standing for re-election, please refer to the Directors Profile on pages 10 & 14 of this Annual Report. 2. Place, date and hour of the Thirty-Seventh Annual General Meeting: Dewan Perdana, Aras 1, Menara Suruhanjaya Koperasi Malaysia, Changkat Semantan Off Jalan Semantan, Bukit Damansara, Kuala Lumpur on Wednesday, 23 August 2017 at 9.30 a.m. 3. Attendance of Directors at Board Meetings There were five (5) Board of Directors meetings held during the financial year ended 31 March Details of attendance of Directors are as follows:- Name Attendance 1. Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. 5/5 2. Ms. Usha Nathan A. Vaidyanathan 4/5 3. Mr. Jayapalasingam Kandiah 5/5 4. Dato Mohamed Nazir Bin Nor Md 5/5 5. Abdulla Abdulaziz Ali Taleb 4/4 5. Mr. Khaled Yusuf Abdulla AbdulKarim Janahi (Vacate of Office on 0/2 16 August 2017) 4. Details of securities holdings in the Company and its subsidiaries for the Directors seeking re-election (as at 30 June 2017). For details of the securities holdings of Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. in Turiya Berhad, please refer to page 158 of this Annual Report. Ms. Usha Nathan A. Vaidyanathan do not hold any securities in the Company and its subsidiaries. Annual Report

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168 proxy form Number of Shares Held CDS Account No. TURIYA BERHAD (55576-A) I/We of being a member/members of Turiya Berhad, hereby appoint (NRIC No: ) of and / or (NRIC No: ) of or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/ our behalf at the Thirty-Seventh Annual General Meeting of Turiya Berhad to be held at the Dewan Perdana, Aras 1, Menara Suruhanjaya Koperasi Malaysia, Changkat Semantan Off Jalan Semantan, Bukit Damansara, Kuala Lumpur on Wednesday, 23 August 2017 at 9.30 a.m. and at any adjournment thereof. You may indicate with an or in the boxes provided below how you wish your votes to be cast. No. RESOLUTIONs for AGAINST 1 To re-elect Tan Sri Datuk Dr. Mohan A/L M.K. Swami, J.P. as a Director of the Company. 2 To re-elect Ms. Usha Nathan A. Vaidyanathan as a Director of the Company. 3 To appoint Messrs. Baker Tilly Monteiro Heng who have indicated their willingness, as Auditors of the Company in place of the retiring Auditors, Messrs. Baker Tilly AC, and to hold office until the conclusion of the next Annual General Meeting of the Company and to authorise the Directors to fix their remuneration. 4 To approve the Directors fees for the financial year ended 31 March To empower the Directors of the Company to issue shares pursuant to Section 76 of the Companies Act, Please take note that the Company shall accept the vote cast by your proxy as a valid vote whether or not your proxy has acted in accordance with your instructions. Signed this day of 2017 Signature of Member/Common Seal