contents 04 07 06 08 11 corporate structure corporate information directors’ profile senior...

Contents

04

0706

0811

Corporate Structure

Corporate Information

Directors’ Profile

SeniorManagement Profile

Group FinancialHighlights

1412

2622

3044

Chairman’s Statement

Management Discussionand Analysis

Corporate SocialResponsibility Statement

Statement onCorporate Governance

Statement on RiskManagement and Internal Control

Audit Committee Report

47

11849

120122

Statement ofDirectors’ Responsibility

Financial Statements

Analysis of Shareholdings

Notice ofAnnual General Meeting

Form of Proxy

List of Properties

Corporate Structure

JERASIA CAPITAL BERHAD (503248-A) ANNUAL REPORT 20174

(503248-A)

100%Jerasia Apparel

Sdn Bhd(156513-X)

100%Jerasia Brands

Sdn Bhd(156588-T)

100%Jerasia Haulage

Sdn Bhd(409828-T)

100%Jerasia Inspiration

Sdn Bhd(6523-D)

100%Jerasia Fashion

Sdn Bhd(360850-V)

100%Canteran Apparel

Sdn Bhd(211117-M)

100%Canteran Apparel

(Cambodia) Co. Ltd(00025589)

5JERASIA CAPITAL BERHAD (503248-A) ANNUAL REPORT 2017


Corporate Information

Board Of Directors

Dato’ Nik Mohamed Dinbin Datuk Nik YusoffIndependentNon-Executive Chairman

Datuk Yap Fung KongExecutive Deputy Chairman

Pronob Kumar Sen GuptaGroup Managing Director

Dato’ Tan Yik HuayIndependentNon-Executive Director

Dato’ Dr Yong Yuan TanNon-IndependentNon-Executive Director

Dato’ Sri Mohd Haniff bin Abd AzizNon-IndependentNon-Executive Director

Andrew Hong Tat BengIndependentNon-Executive Director

Registered Office

Level 7, Menara Milenium,Jalan Damanlela,Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur.Tel : 03 - 2084 9000Fax : 03 - 2094 9940

Share Registrar

Tricor Investor & Issuing House Services Sdn Bhd (11324-H)Unit 32-01, Level 32, Tower AVertical Business Suite,Avenue 3, Bangsar South,No. 8, Jalan Kerinchi,59200 Kuala Lumpur.Tel : 03 - 2783 9299Fax : 03 - 2783 9222

Auditors

SJ Grant Thornton(AF: 0737)(Member of Grant Thornton International Ltd.)Chartered AccountantsLevel 11, Sheraton Imperial Court,Jalan Sultan Ismail,50250 Kuala Lumpur.Tel : 03 - 2692 4022Fax : 03 - 2691 5229Email : [email protected]

Secretaries

Chua Siew Chuan (MAICSA 0777689)Yeow Sze Min (MAICSA 7065735)

Solicitors

Messrs Raja Eleena Siew Ang & Associates

Principal Bankers

Alliance Bank Malaysia BerhadAmBank (M) BerhadBank Of China (Malaysia) BerhadHSBC Bank Malaysia BerhadRHB Bank BerhadUnited Overseas Bank (Malaysia) Berhad

Stock Exchange Listing

Bursa Malaysia Securities BerhadMain MarketBMSB Code : 8931

Website

www.jerasia.biz

JERASIA CAPITAL BERHAD (503248-A) ANNUAL REPORT 2017 7

Group Financial Highlights

2013 2014 2015 2016* 2017 RM Million RM Million RM Million RM Million RM Million

Revenue 320.94 320.89 337.23 503.61 462.14Profit before tax 10.12 5.03 10.91 9.17 5.53Profit after tax 6.70 3.28 10.03 7.11 3.71

Revenue(RM Million)

Profit After tax(RM Million)

Profit Before Tax(RM Million)

320.94

320.89

337.23

503.61

462.14 10.12

5.03

10.91

5.53

9.17

6.70

3.28

10.03

7.11

3.71

2013 20152014 2016 2017

* The Group changed its financial year end from 31 March to 30 June and accordingly, the results for the financial period ended 30 June 2016 is for 15 months.



Dato’ Nik Mohamed Din bin Datuk Nik Yusoff, aged 74, male, a Malaysian, is an Independent Non-Executive Chairman of the Company. He is also the Chairman of the Remuneration Committee and a member of the Audit and Nomination Committees. Dato’ Nik Mohamed Din was appointed to the Board on 30 April 2001. He is a Barrister-at-Law from Lincoln’s Inn, London. He was a Magistrate with the Malaysian Judicial Services from 1968 to 1969 and practised as a lawyer with Mah Kok & Din from 1970 to 1983. From 1984 to 1988, he was a stockbroker and Chairman of OSK & Partners Sdn Bhd. He was Chairman of the Kuala Lumpur Stock Exchange (now known as Bursa Malaysia Securities Berhad) from 1985 to 1988 and its Executive Chairman from 1988 to 1998.

He is also a Director of the Federation of Public Listed Companies and the Datin Sri Ting Sui Ngit Foundation.

He does not have any family relationship with any director and/or major shareholder of Jerasia Capital Berhad and he has no conflict of interest with the Company.

Dato’ Nik Mohamed Din has no conviction for offences within the past five years, other than traffic offences, if any. There was also public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.

Datuk Yap Fung Kong, aged 67, male, a Malaysian, is the Executive Deputy Chairman of the Company. He was appointed to the Board on 28 March 2000. Datuk Yap holds a Bachelor of Economics (Honours) Degree from University of Malaya. He served with the Ministry of International Trade and Industry (“MITI”) from 1973 to 1984, in various capacities leading to being the Head of the Textiles Unit in the International Trade Division, responsible for Malaysia’s multilateral and bilateral textiles negotiations. In 1984, Datuk Yap left MITI and subsequently became an Executive Director of Tai Wah Garment Manufacturing Bhd (“Tai Wah”). He left Tai Wah in 1991 and founded Canteran Apparel Sdn Bhd. Datuk Yap has in the past, served as President of Malaysian Textile Manufacturers Association, Chairman of the Asean Federation of Textile Industries and is also a founding member of Malaysian Textile and Apparel Centre.

Datuk Yap does not hold any directorship in other public companies.


Datuk Yap has no conviction for offences within the past five years, other than traffic offences, if any. There was also public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.

Dato’ Nik Mohamed Din bin Datuk Nik YusoffIndependent Non-Executive Chairman

Datuk Yap Fung KongExecutive Deputy Chairman




Mr Pronob Kumar Sen Gupta, aged 51, male, a Malaysian, is currently the Group Managing Director and also a member of the Remuneration Committee of the Company. He was appointed to the Board on 24 March 2006.

He has been a Director of various subsidiaries in the Jerasia Group, since he joined in 2000. He holds a Bachelor of Science Degree in Economics (Accounting) from the University of London. Mr Sen Gupta is involved in the Strategic Planning, Business Development, Corporate and Finance matters for the Jerasia Group. Prior to joining the Jerasia Group in 2000, he was an Account Relationship Manager in the Corporate Banking Division with a local commercial bank.

Mr Sen Gupta does not hold any directorship in other public companies.

He does not have any family relationship with any director and/or major shareholder of Jerasia Capital Bhd and he has no conflict of interest with the Company.

Mr Sen Gupta has no conviction for offences within the past five years, other than traffic offences, if any. There was also public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.

Dato’ Tan Yik HuayIndependent Non-Executive Director

Dato’ Tan Yik Huay, aged 74, male, a Malaysian, is an Independent Non-Executive Director of the Company. Dato’ Tan was appointed to the Board on 20 April 2000 and is currently the Chairman of Audit and Nomination Committees. He is also a member of the Remuneration Committee.

Dato’ Tan is a Fellow of the Chartered Association of Certified Accountants, United Kingdom and a Fellow of the Institute of Chartered Secretaries and Administrators, United Kingdom. He is also a member of the Malaysian Institute of Accountants and a life member of the Malaysian Association of Certified Public Accountants.

He joined the textile industry in 1973 as the Finance Manager and later Executive Director of the Pen Group of Companies, an international integrated textile group. He was the Managing Director of Pen Apparel Sdn Bhd, a member of the TAL Group of Hong Kong until end January 2005 and currently a Non-Executive Director of the said company.

Dato’ Tan was the past President of the Malaysian Textile Manufacturers’ Association (“MTMA”) and the past Council of Malaysian Textile and Apparel Centre (“MATAC”) of which he is a founder member. He was also the past Chairman of Asian Chemical Fibers Industry Federation (“ACFIF”) and past Chairman of Pembangunan Sumber Manusia Bhd.

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

Dato’ Tan does not have any family relationship with any director and/or major shareholder of Jerasia Capital Bhd and he has no conflict of interest with the Company.

Dato’ Tan has no conviction for offences within the past five years, other than traffic offences, if any. There was also public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.

Dato’ Dr Yong Yuan TanNon-Independent Non-Executive Director

Dato’ Dr Yong Yuan Tan, aged 76, male, a Singaporean, is currently the Non-Independent Non-Executive Director of the Company. He is also a member of the Audit and Nomination Committees. Dato’ Dr Yong was appointed to the Board on 28 March 2000.

He holds a Doctorate in Chemistry from the University of Singapore which he obtained in 1970 and was a Post Doctoral Research Fellow for 3 years at the University of Sussex, United Kingdom from 1968 to 1970. He has more than 20 years of hands-on experience in the textile and apparel industry. He was elected as member of the Executive Committee of the Malaysian Textile Manufacturers’ Association (“MTMA”) from 1988 to 1996. He was also elected as the Deputy Chairman of Malaysian Textile & Apparel Centre (“MATAC”) from 1994 to 1999.

He was appointed as a member of the Academic Advisory Panel to the Textile Technology Department, Faculty of Applied Science at the University Technology of Mara (“UiTM”) from 1 November 2003 to 30 November 2005. UiTM also appointed Dato’ Dr Yong as an External Examiner to the Bachelor Degree Program at the same Department for the same time period. He was also appointed as Chairman of Working Group on ‘size designation for clothing’ in 2005 under the Industry Standard Committee on textile and apparel, established under the Standard Development and Infrastructure managed by SIRIM Berhad.

He is presently the Managing Director of a private limited company manufacturing polymer plastic flexible packaging in Thailand.

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

He does not have any family relationship with any director and/or major shareholder of Jerasia Capital Bhd and he has no conflict of interest with the Company.

Dato’ Dr Yong has no conviction for offences within the past five years, other than traffic offences, if any. There was also public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.



Dato’ Sri Mohd Haniff bin Abd AzizNon-Independent Non-Executive Director

Dato’ Sri Mohd Haniff bin Abd Aziz, aged 63, male, a Malaysian, is currently Non-Independent Non-Executive Director of the Company. He was appointed to the Board on 28 March 2000.

He holds a Bachelor of Economics (Honours) Degree from the University of Malaya which he obtained in 1975.

He served the Ministry of International Trade and Industry (“MITI”) for 19 years until he opted for an early retirement in 1994. During his term at MITI, he served as Assistant Director of the Ministry from 1975 to 1978 before serving in the Permanent Mission of Malaysia to the United Nations in Geneva from 1978 to 1981 and was later reassigned as Malaysian Trade Commissioner to the Philippines from 1981 to 1987 and then to Thailand from 1987 to 1991. He was the Director of the Malaysian External Trade Development Corporation (formerly known as Malaysian Export Trade Centre) from 1991 to 1994.

Dato’ Sri Mohd Haniff sits on the Board of Euro Holdings Berhad.


Dato’ Sri Mohd Haniff has no conviction for offences within the past five years, other than traffic offences, if any. There was also public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.

Andrew Hong Tat BengIndependent Non-Executive Director

Mr Andrew Hong Tat Beng, aged 53, male, a Malaysian, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 22 May 2014 and is currently a member of the Audit and Nomination Committees.

He holds the Masters of Management from Open University Malaysia (“OUM”) which he obtained in 2013 and Diploma of Technology in Operations Management – International Trade option from British Columbia of Institute of Technology, Canada obtained in 1987.

He served the Malaysian Textile Manufacturers Association (“MTMA”) as its Chief Executive Officer for 10 years until he opted for early retirement in June 2014. He also served as the Advisor for the Trans Pacific Partnership Agreement for the Ministry of International Trade and Industry (“MITI”) from March 2013 to March 2014. He was also the Advisor for the Malaysian Textile Manufacturers Association (“MTMA”) and also the past Permanent Secretary General for the ASEAN Federation of Textiles Industries.

Mr Hong was also the Secretary General for the Asian Chemical Fibres Industry Federation (“ACFIF”).

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


Mr Hong has no conviction for offences within the past five years, other than traffic offences, if any. There was also public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.


Senior Management ProfileLiew Wai SanFinancial Controller

Ms Liew Wai San, aged 40, female, a Malaysian, was appointed as the Financial Controller of Jerasia Capital Bhd (“JCB”) Group in May 2015.

Ms Liew, a Chartered Accountant, is a Member of the Malaysian Institute of Accountants and a Fellow Member of the Association of Chartered Certified Accountants, United Kingdom.

She started her career in 2002 in the auditing and subsequently, moved to the private sector in the Accounts and Finance Department. Ms Liew joined the JCB Group in 2007 as an Accountant. She was promoted to Financial Controller in May 2015.

Ms Liew does not have any family relationship with any director and/or major shareholder of JCB. She has no conflict of interest with the Company and has had no convictions for offences with the past five years. There were no public sanction or penalty imposed on her by any relevant regulatory bodies during the financial year.

Ong Peck ChooHead of Performance Management & Support

Ms Ong Peck Choo, aged 47, female, a Malaysian, is currently the Head of Performance Management & Support for the Jerasia Capital Bhd (“JCB”) Group.

Ms Ong a Chartered Accountant, is a Member of the Malaysian Institute of Accountants and also a Member of CPA Australia (Certified Practising Accountants). She holds a Bachelor of Business (Majoring in Accounting) from Royal Melbourne Institute of Technology (“RMIT”) University, Australia which she obtained in 1993.

She began her career in 1994 as an internal auditor with Arab-Malaysian Corporation Berhad Group. In 1998, Ms Ong joined MCL Corporation Bhd (“MCL”) Group as an Assistant Accounts Manager. She continued her career with the JCB Group following the reverse takeover of MCL. She became the Group Accountant in January 2008 and moved to her current position in 2015.

Ms Ong does not have any family relationship with any director and/or major shareholder of JCB. She has no conflict of interest with the Company and has had no convictions for offences with the past five years. There were no public sanction or penalty imposed on her by any relevant regulatory bodies during the financial year.

Samantha Lim Siew KeeHead of Human Resource & Administration

Ms Samantha Lim Siew Kee, aged 56, female, a Malaysian, was appointed as Head of Human Resource and Administration in January 2008.

She pursued her secretarial studies at Pitmans Central College in London after completing her A Levels. Following her return, she started her career as a Private Secretary to a Senior Partner at Price Waterhouse Coopers in 1987.

Ms Lim joined MCL Corporation Bhd (“MCL”) Group in 1996 as an Executive Secretary and was transferred and redesignated as Personnel Executive in April 1998. She was promoted to the position of Assistant Manager – Human Resource and Administration in September 1999 and was subsequently promoted to Manager in April 2003 and is currently the Head of Human Resource and Administration.

Ms Lim does not have any family relationship with any director and/or major shareholder of JCB. She has no conflict of interest with the Company and has had no convictions for offences with the past five years. There were no public sanction or penalty imposed on her by any relevant regulatory bodies during the financial year.

Yap Vee-KinHead of Retail

Mr Yap Vee-Kin, aged 38, male, a Malaysian, was appointed as the Head of Retail in May 2015. He holds a Bachelor in Information Technology from Charles Sturt University, Australia.

He began his career in 2000 in Technical Support before joining Jerasia Capital Bhd (“JCB”) Group in 2007 as the Nike Brand Manager. His primary role is to oversee the retail division and to ensure that all retail brands operate effectively and efficiently.

Mr Yap is the nephew of Datuk Yap Fung Kong, who is the Executive Deputy Chairman and major shareholder of Jerasia Capital Berhad (“JCB”). Save as disclosed, he does not have any family relationship with other directors and/ or major shareholder of JCB nor does he have any conflict of interest with the Company. He has had no convictions for offences within the past five years. There were no public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.

Seow Yuan HuiGeneral Manager, Export/Manufacturing

Mr Seow Yuan Hui, aged 33, male, a Malaysian, joined the Jerasia Capital Bhd (“JCB”) Group in November 2010.

He graduated from the University of Bath, United Kingdom with a Master of Engineering (Hons) in Mechanical Engineering in 2004. After graduating, he acquired invaluable experience as an Analyst for Accenture Malaysia over a period of approximately two years. From 2007, he worked on specific project consultancies in the garment manufacturing industry in Malaysia. He then joined Canteran Apparel Sdn Bhd which is the Manufacturing and Export Division for the Group as General Manager.

Mr Seow does not have any family relationship with any director and/or major shareholder of JCB. He has no conflict of interest with the Company and has had no convictions for offences with the past five years. There were no public sanction or penalty imposed on him by any relevant regulatory bodies during the financial year.



Dear Valued Shareholders,

On behalf of the Board of Directors, it gives me great pleasure to present to you the Annual Report and Audited Financial Statements

of the Jerasia Capital Berhad (“JCB”) Group for the financial year ended 30 June 2017.

Financial Performance

The current financial year ended 30 June 2017 covers a period of 12 months. As the previous financial period covers 15 months, comparisons must accordingly take recognition of the differential in the duration of the respective financial periods.

I am pleased to announce a set of positive results for the 12 months financial period under review. This is despite the Group enduring challenges domestically as well as uncertainties faced globally. Total turnover for the Group for the financial year under review recorded an increase of 10.0% to RM462.14 million from the RM419.95 million, compared to the four corresponding quarters of the preceding financial period. Profit before tax was RM5.53 million for the financial year ended 30 June 2017 compared to RM7.48 million for the cumulative four quarters ended 30 June 2016.

““



Future Prospects

I am confident that the Group will continue to sustain and maintain its positive momentum for the coming financial year. All the same, I wish to assure you that the Group exercises prudence and vigilance to meet our objectives of enhancing shareholders’ value in the mid to longer term.

Dividend

The Board of Directors did not recommend any dividend for the financial year ended 30 June 2017.

Acknowledgement

On behalf of the Board of Directors, I wish to thank all stakeholders, business partners, bankers and statutory bodies for their resolute confidence and support in JCB. Finally, I would like to thank my Board members, the Management and fellow colleagues, for their invaluable contribution and commitment to the Group.

Dato’ Nik Mohamed Din bin Datuk Nik YusoffChairman


Management Discussionand Analysis

Dear Valued Shareholders,

I am pleased to present the Management Discussion and Analysis Report (“MD&A”) for the Group. All information provided herein

should be read in conjunction with the accompanying financial statements for the financial year ended 30 June 2017.

““

The financial year ended 30 June 2017 was a challenging year not just for the Group but for business entities, in general. The Group faced strong headwinds and economic uncertainties, both globally and domestically.

On the international front, the International Monetary Fund (“IMF”) World Economic Outlook in its January 2017 Update, noted a shifting global economic landscape, “after a lacklustre outturn in 2016”. In its subsequent July 2017 update, a “firming recovery” was anticipated with a pickup in global growth. The outlook is reportedly on track, with expected global growth at 3.5% in 2017 and 3.6% in 2018, compared to projections of 3.1% in 2016. However, the growth projections for the UK is forecasted to reduce to 1.7% from 2.0%, assumedly on the effects from the fall out of Brexit.

The Malaysian economy grew at a moderate pace of 4.2% in 2016 from 5.0% in 2015 and 6% in 2014. However, as per Bank Negara Malaysia’s Second Quarter bulletin 2017, the pace of growth improved to 5.6% in the first quarter of 2017 and 5.8% in the second quarter of 2017. Continuing improvements in domestic economic conditions should provide further impetus to higher household spending in the longer term, arising from mega infrastructure projects in place as well as the Government’s concerted efforts with various economic stimulus packages.

REVIEW OF GROUP’S OPERATIONS

The Group attained listing status on 2 June 2000. Right from the onset, the Group took a visionary view on the mapping of the future direction of the Group. It accelerated the growth of a viable retail segment to complement the strong export manufacturing component in the Group’s business structure. This was with a view towards lessening its dependence on exports while taking advantage of a rapidly growing and lucrative domestic retail industry.

The Group is now solidly anchored on its two main core business activities, of:-

1. Manufacturing and Export

The Group’s manufacturing division is housed under:-

a) Canteran Apparel Sdn Bhd (“CASB”)

CASB has manufacturing facilities in two factory locations in Kluang, one in Paloh, one in Kahang and one in Tangkak. All these are in the state of Johor, Malaysia. This subsidiary of the Group has been operating in these factory locations since the 1990s.

b) Canteran Apparel (Cambodia) Co Ltd (“CAC”)

CAC, a 100% subsidiary of CASB, has been operating in Phnom Penh, Cambodia since April 2003. Prior to this, the Group had manufacturing presence in Cambodia, mainly through overseas sub-contracting since 1997, which gave us confidence to incorporate CAC in 2003 in Cambodia. Setting up a manufacturing base in Cambodia, inter alia, was primarily to derive benefits from Cambodia’s “Least Developed Country” status as well as low labour costs considerations.


Management Discussion and Analysis

The manufacturing division has demonstrated strength and resilience in withstanding two significant milestones. Firstly, the abolishment of global quotas in 2005, giving rise to free open market competition as sanctioned by the World Trade Organisation (“WTO”). Secondly, also in 2005 was the abandonment of the Ringgit Malaysia peg against the US Dollar at RM3.80 imposed since September 1998. In addition to this, the Group also withstood the tremendous competition and threat posed by the emergence of China then, as a significant large scale low cost producer of apparel products. In successfully weathering these challenges, the Group has taken advantage of opportunities as they presented themselves throughout the changing landscape of the global textiles and garments industry till today.

Strategic considerations

The manufacturing and export division continues to draw its strength and sustainability from its prudent approach of:-

(i) Building up customers’ loyalty based on proven performance track record and interdependence and reliability of long standing relationships;

(ii) Tapping on the Group’s Retail Partners to develop enhanced mutually beneficial value-chain linkages;

(iii) Exploiting niche market opportunities in other textile related industry. This area has been embarked upon successfully and satisfactorily in the last 18 months out of the Malaysian manufacturing facilities. It is being incubated and nurtured for rapid expansion over the immediate horizon. Products are packaged in accordance to specific designs for shipment to the lucrative craft and hobby market in the US. Such products are mostly sold online.

(iv) Updating its manufacturing processes to keep abreast of technological innovations. This has become particularly crucial in the face of increases in minimum wages continuing to rise, last being in July 2016. To mitigate this, better productivity gains and efficiency through innovative processes is the compensatory balancing factor.

2. Retail

The Group’s retail operations consists of:-

a) Setting up and operating retail shops for renowned international brands

The Group had since 2000 recognized the need to bring in renowned international brands to be a serious and sizeable retail player in the Malaysian retail industry. Accordingly, the following brands were brought in:-

i) Mango This hugely popular brand from Spain has grown from a first maiden store in Mid Valley Megamall,

Kuala Lumpur in 2000 to a chain of 41 stores throughout Malaysia. We are exclusively the sole distributor for the Mango label in Malaysia. We have grown to not only carrying the women’s line, but also Mango Man, Mango Kids, Mango Touch and Violeta by Mango (for plus sizes).

ii) Nike The Group cemented its relationship with Nike, the world renowned active sportswear brand in

August 2005 via a non-exclusive distributorship agreement for Malaysia. Over the course of our partnership with Nike Malaysia, the Group has not only evolved from just retailing Nike’s casual wear, better known as Nike Sportswear, but to also opening specific Nike Only Specialty Stores carrying different categories like Running and Basketball. Currently, the Group has 9 stores in total.

iii) Terranova Terranova, which originates from Italy, is well placed in the fast fashion segment, catering

easy to wear apparel for women, men and kids. The Group opened its first Terranova store in Sunway Pyramid, Selangor in August 2013. At present, the Group has 6 Terranova stores, 3 in the Selangor/Kuala Lumpur region, 1 in Malacca, 1 store in Kuching, Sarawak and 1 in Kota Kinabalu, Sabah.



iv) Calliope Sister brand to Terranova, the Group

introduced Calliope in 2016 and currently has 2 stores, one in Kuching, Sarawak and our most recent in MyTown Shopping Centre in Cheras, Kuala Lumpur. This brand has already been well received by the Malaysian consumers.

v) Calvin Klein Jeans (“CK Jeans”) The Group embarked on distributing

CK Jeans in 2003 and grew it to 10 stores in 9 years. However, in 2012, the Group’s distribution agreement with CK Jeans expired. This was due to CK Jeans’ newly adopted global approach of operating their own stores.

vi) Naf Naf The Group also introduced a French

label, Naf Naf, to the Malaysian market with 2 stores in the last quarter of 2003, growing to 7 stores by 2007. However, in 2009, the Group decided to discontinue the Naf Naf operations as it was not performing to expectations. In addition, the outright stock purchase arrangement with Naf Naf did not prove advantageous as compared to the consignment model the Group had with other international labels.


The retail scene in Malaysia continues to evolve and reinvent itself. This is particularly so with the rapid urbanisation of Malaysia, especially the large urban agglomeration of a Greater Kuala Lumpur. A population currently estimated at 7.25 million and expected to grow rapidly to 10 million, the recently added mass transit systems has brought seamless linkages in terms of logistics for easier reach across Greater Kuala Lumpur. As a result, there is a tangible quantum leap towards the Government’s vision of attaining developed status and we are presented with game changing opportunities to be exploited. The skyline and landscape of Greater Kuala Lumpur is so visibly pronouncing this explosive change in light of the various mega infrastructure projects completed and planned, going forward.



The Group takes full cognizance of the changes around and builds its strategies accordingly to achieve sustainable growth. The group will, inter alia:-

(i) Continue with its expansionary outlook in respect of all its international brands in strategic key new prospective malls;

(ii) Solicit new performing international brands to increase its portfolio of offerings and to inject much sought after freshness to the Malaysian fashion scene;

(iii) Where appropriate relocate existing shops to more strategic malls; (iv) Pursue vigorously with existing brand owners on the possibility of online retail platform covering

Malaysia and neighbouring countries.

b) Domestic brands

The Group’s home grown labels, namely, Ladylike, Milani and Charlie have a long standing history of over 30 years in the market place. Traditionally, they were marketed through counters in various departmental stores across Malaysia. The Group added its own school uniform brand, Ureka in 2005 to its stable of brands, originally also sold through counters in department stores.

In 2010, the Group in a bold move away from over dependence on counter operations, adventured with its first concept store, Trio by Jerasia. Ladylike, Milani and Charlie were amalgamated under one roof as an effective means towards reaching out to our customers. With the new Trio stores, the Group started its own children’s label, Trio Kids, in May 2011, to widen its product range. The Group is continuously expanding its product range in line with the rapidly changing fashion trends in this affordable, ready to wear segment.

The Group now has a total of 27 Trio by Jerasia stores located all over Malaysia, including in Sabah and Sarawak.


The Group has achieved an almost total transformation from marketing through counters in departmental stores to selling through its own stand-alone stores. In 2007, the Group marketed through 381 counters, whereas today there is only a residual of 9 counters in key departmental stores. As stated earlier, there are 27 stores now and has indeed more than doubled its sales revenue compared to 2007. The Group will continue its expansionary drive in the local brands segment aggressively, leveraging on the current experience and success thus far. It is intended to open more stores in both urban as well as sub-urban townships. There is also a consideration to infuse additional generic brands or even assimilate prospective and promising local brands from outside the group. In addition, efforts are being accelerated for the launch of an online retail platform to further elevate the domestic brands awareness and sales.



Revenue (RM Million) Profit Before Tax (RM Million)

462.145.53

7.48419.95

503.61

9.17

12 Months to June’17 July’15 to June’16 (*) 15 Months to June’16

(*)Comparative four quarters figures extracted from the Audited Financial Reports for the 15 months financial period ended 30 June 2016.

FINANCIAL HIGHLIGHTS

The Group recorded a revenue of RM462.14 million, an increase of 10.0% compared to a 12 month corresponding period (July 2015 to June 2016) of RM419.95 million, despite challenging market conditions in the current financial period under review. The export manufacturing segment which recorded a revenue of RM235.15 million contributed mainly to the increase of the Group’s revenue. This division was aided by a stronger US Dollar as well as an increase in the order books. The retail segment recorded a marginal increase in revenue to RM226.99 million, notwithstanding closures of 11 stores and 9 counters. However, 4 new stores were opened during the financial year. This marginal growth is despite a relatively weak consumer sentiment which saw a tangible shift in shopping habits for example, smaller ticket items, reduced shopping frequency as well as affordably priced alternative substitutes. Growth in the retail segment was muted due to inflationary pressures arising from the volatility of the Malaysian Ringgit giving rise to higher costs on importation, higher energy costs and reduction in domestic spending.

The Group recorded a profit before tax of RM5.53 million, a decrease of 26.1% compared to the 12 months’ corresponding period (July 2015 to June 2016) of RM7.48 million. Of this, the manufacturing segment contributed RM3.71 million and the retail segment, contributed RM2.35 million, whilst other segments registered a loss of RM0.53 million, primarily due to administrative expenses.

The reduction in profit before tax was due to the following salient factors:-

(i) On the export manufacturing segment, there was an unrealised foreign exchange loss of RM1.72 million arising from the US Dollar weakening against the Malaysian Ringgit as the foreign exchange rate was based on the rate as at 30 June 2017 (financial year end).

(ii) One off write-offs of property, plant and equipment amounting to RM1.34 million in the retail segment. This write-off is part of the Group’s ongoing plans to rationalise and realign existing store footprints in light of new shopping malls coming on stream nationwide. This exercise is expected to contribute positively to the Group in the medium to long term. In addition, it also provides the opportunity for not only existing consumers, but also new consumers who seek freshness of offerings as well as for consumers to experience a brand new environment.

(iii) Increase in finance costs of RM1.04 million arising from higher utilisation of bank facilities to support the planned capital expenditure for new stores as well as refurbishments of existing stores, and to finance raw materials to meet the increasing level of business activity in the export manufacturing segment and to fund purchases for finished products in the retail segment. It is to be noted that the finance costs, particularly in the retail segment, is purely short term and is expected to reduce depending on the level of activity, i.e. expansion and future positive cash flow generation.

Comparative Figures



The Group’s total assets was RM311.86 million as at 30 June 2017, an increase of 10.6% as compared to RM281.88 million in the previous financial period. This increase was mainly due to increase in inventories and trade receivables. Trade receivables increased as a result of higher export sales. The increase of inventories was mainly from retail segment due to new store openings to support inventory levels, replenishment of existing stores as well as planned purchases for future store openings in the pipeline.

Total liabilities of the Group increased by 18.3% to RM165.56 million from RM139.93 million, in the previous financial period. This increase in liabilities is primarily due to increase in bank borrowings to support working capital requirements for opening of new stores, refurbishment of existing stores and purchase of stocks in the retail segment.

Concurrently, the export manufacturing segment also saw an increase in trade financing, reflecting an increase in the order books.

The Group remains prudent in maintaining a financial position that will enable the execution of our strategic business objectives to create and add value in the ensuing years. We remain confident of meeting our working capital requirements and repayment of existing financial obligations as and when they come due, whilst maintaining and expanding the business segments.

CAPITAL STRUCTURE

Non-current assets(RM Million)

Current assets(RM Million)

Total Assets(RM Million)

92.4

5

219.

41

311.

86

94.7

3

187.

15

281.

88

As at 30 June’17 As at 30 June’16

ASSETS

8.50 157.06 165.56

13.44 126.49 139.93

LIABILITIES

Non-current liabilities(RM Million)

Current liabilities(RM Million)

Total liabilities(RM Million)

As at 30 June’17 As at 30 June’16



RISKS & EXPOSURE

Jerasia Capital Berhad and its subsidiaries are sensitive to various financial risks such as credit risk, liquidity risk, foreign currency risk and interest rate risk. The aim of the general risk policy is to enable financial risks to be identified, analysed and when necessary, mitigated in order to prevent negative financial results.

1. Credit Risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instruments fails to meet its contractual obligations. It is the Group’s policy to enter into financial instruments with a diversity of creditworthy counterparties. The Group does not expect to incur material credit losses of its financial assets or other financial instruments.

Concentration of credit risk exists when changes in economic, industry and geographical factors similarly affect the group of counterparties whose aggregate credit exposure is significant in relation to the Group’s total credit exposure. The Group’s transactions are entered into with diverse creditworthy counterparties, thereby mitigating any significant concentration of credit risk.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification and evaluation procedures. The Group does not offer credit terms without the approval of the management.

2. Liquidity Risk

Liquidity risk is the risk that the Group and the Company will not be able to meet its financial obligations as and when they fall due.

The Group and the Company maintains a level of cash and cash equivalents and banking facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due. The Group’s exposure to liquidity risk arises principally from its payables and bank borrowings.

3. Foreign Currency Risk

The Group is exposed to foreign currency risk as a result of its normal trading activities, where the currency denomination differs from the functional currency. The Group, inter-alia, manages its foreign currency risk by entering into forward foreign exchange contracts as and when considered necessary to limit its foreign exchange exposure. Exposure to currency risk as a whole is mitigated by the operating environment which provides for a natural hedge. Most payments for foreign payables is matched against receivables denominated in the same foreign currency.

4. 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 due to changes in market interest rates.

The Group’s interest rate management objective is to manage the interest expenses consistent with maintaining an acceptable level of exposure to interest rate fluctuation. In order to achieve this objective, the Group’s targets a mix of fixed and floating debt based on assessment of its existing exposure and desired interest rate profile.

The Group’s floating rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates.


FORWARD LOOKING STATEMENT

The Group has always been mindful of developments in the global and domestic front, continuously keeping abreast of the various changes and advances in the global economic platform but also paying particular attention to technological innovations as they are pioneered and introduced. As such, the Group has, as a matter of practice, evolved and transformed itself as and when situations are presented.

In the export manufacturing segment, the Group faces challenges due to the ongoing tight labour market and increased minimum wages, rising raw materials prices and volatile foreign currency exchange rates, particularly in Malaysia. The Group remains steadfast in its continued efforts to reduce overall production costs in order to increase productivity and to enhance operational efficiencies. There is strong focus in nurturing and enhancing our existing relationship with the Group’s retail partners, taking advantage of the mutually beneficial value chain linkages. There is also continuous efforts to source for strong credible buyers to strengthen and expand this segment. With these efforts, revenue streams are expected to improve to maintain a sustainable and positive growth, going forward.

In the retail segment, it is the Group’s strategy to further develop our Trio label as well as increase our exposure nationwide in terms of reach for all the retail labels in our stable. The Group will also continue to seek new potential foreign labels whilst operating in the “affordable, essential clothing segment”, keeping abreast of the domestic economic environment as well as the influx of newer shopping malls coming on-stream.

The Group is now actively pursuing its planned objective to launch our own online selling platform for Trio by Jerasia. We are also in discussions with our international brand partners to cover the online market for Malaysia and neighbouring countries.

It is the Group’s strategy to maintain the two core segments and not deviate into other unrelated industries. Growth can be attained by way of organic increases, sourcing for new buyers in the export manufacturing segment as well as acquiring rights to retail new fashion brands. Overall, the Group is confident of maintaining and sustaining its positive financial performance whilst operating under the current challenging and uncertain business environment both domestically and globally.

Thank you.





Jerasia Capital Berhad (“JCB”) as a Group believes that the fundamental principles of good corporate governance and responsibility lie in the fact that organisations should place a firm commitment towards Corporate Social Responsibility (“CSR”) activities. JCB’s vision in CSR is based on being a socially responsible and caring corporate citizen, which places a strong weightage towards achieving a balance between profitability and contributions.

Our CSR philosophy integrates our social and environmental responsibilities into our business strategies for the sustainable growth of the Company, which is in line with the CSR Framework for Public Listed Companies launched by Bursa Malaysia Securities Berhad (“Bursa Securities”).

The Group emphasises CSR on four main focal areas, which are the Environment, the Community, the Workplace and the Marketplace, in no order of priority.

The Environment

JCB understands that to be socially responsible and to play an actual role in preserving the environment, it is essential to operate in an environmentally conscious manner. Whenever and wherever possible, the Group has made efforts to reduce the impact of our business activity on the environment, especially in significant areas of impact such as electricity usage.

JCB continues to support the Earth Hour campaign, a yearly event that encourages communities worldwide to turn off non-essential lights for an hour. All our

boutiques in shopping malls across Malaysia reduced the number of lights on the retail floor or windows for Earth Hour on 25 March 2017.

The Group also strives to reduce the amount of natural resources used, by using electronic means of communication instead of paper, and minimising travel which emits carbon emissions by using video conferencing and Skype, whenever possible.

The Community

During the course of the year, JCB made donations to orphanages for them to be able to provide for the under-privileged children.

Subsequent to the financial year, the Group made a contribution to Yayasan Sunbeams Home, a non-governmental, self-supporting multi-racial foundation, caring for displaced, abused and neglected children of single parents. A team of volunteers from JCB visited this children’s home in July 2017, to spend time with the children and to provide aid to them in the form of cash and basic necessities.


The Group also has an internship programme for undergraduates who have an interest in the fashion retail industry. From a timeframe of between 1 to 3 months, the programme exposes our interns to the wide value-chain spectrum of the fashion industry to provide them a hands-on learning experience.

In April 2017, the Group sponsored RM10,000 worth of vouchers to a charity golf event intended to raise funds for the education of the rural children in Sarawak.

The Workplace

JCB is committed in its social responsibilities at the workplace by having in place a safety committee to oversee the safety, health and welfare at work for all employees and sending staff for workshops on safety in order to ensure that working conditions are in compliance with the requirements of the Occupational Safety and Health Act 1994 (“OSHA”).

In addition, JCB prioritises the welfare of its staff and has made commitments towards enhancing academic advancements for its staff as well as providing the necessary medical financial aid.


The Marketplace

JCB recognises that attention to good corporate governance ensures that business sustainability is developed and maintained. In line with this, the Group’s Code of Conduct serves as the standard for business ethics and conduct of the Group, creating a corporate culture in which the business of the Group is conducted in an ethical and professional manner and where the highest standards of professionalism are upheld.

Furthermore, the Group emphasises and encourages the usage of paper bags instead of plastic bags in an effort to “go green”.

In line with our corporate policies on promoting business sustainability through good corporate social responsibility, JCB fully intends to continue to explore new opportunities to increase our contribution to the community. Our commitment and sincerity in giving back to the communities will continue to remain steadfast and consistent.

www.jerasia.biz


AuditCommittee Report

The Board of Directors of the Company is pleased to present the Audit Committee Report for the financial year ended 30 June 2017, which provides insights to the manner in which the Audit Committee had discharged its functions.

I. COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee comprises four (4) members, all of whom are Non-Executive Directors (“NEDs”), three (3) being Independent NEDs. This meets the requirements of paragraph 15.09(1)(b) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad.

The Audit Committee Chairman, Dato’ Tan Yik Huay is an Independent NED. In this respect, the Company complies with Paragraph 15.10 of the MMLR. As, Dato’ Tan is a Fellow of the Chartered Association of Certified Accountants, United Kingdom, a member of the Malaysian Institute of Accountants and a life member of the Malaysian Association of Certified Public Accountants, the Company also complies with Paragraph 15.09(1)(c)(i) of the MMLR.

The Audit Committee comprised the following NEDs during the financial year ended 30 June 2017:-

Chairman : Dato’ Tan Yik Huay (Independent NED) Members : Dato’ Nik Mohamed Din bin Datuk Nik Yusoff (Independent NED) Dato’ Dr. Yong Yuan Tan (Non-Independent NED) Mr. Andrew Hong Tat Beng (Independent NED)

II. MEETINGS AND MINUTES

During the financial year ended 30 June 2017, the Audit Committee held a total of five (5) meetings. The details of attendance of the Audit Committee members are as follows:-

Number of Audit Committee Members of the Audit Committee Meetings Attended

Dato’ Tan Yik Huay 5/5 Dato’ Nik Mohamed Din bin Datuk Nik Yusoff 5/5 Dato’ Dr. Yong Yuan Tan 5/5 Mr. Andrew Hong Tat Beng 5/5

The Audit Committee meets quarterly and as and when required. Notices of Audit Committee meetings and Meeting Papers were distributed to the Audit Committee prior to the meeting to enable members to review relevant documents and provide feedbacks or comments at meetings.

Additionally, the Audit Committee would hold meetings with the External Auditors without the presence of the Executive Directors and Management, in order to provide the External Auditors an avenue to candidly express any concerns they may have, including those relating to their ability to perform audit works, without restraint or interference.

All deliberations during the Audit Committee meetings were recorded. Minutes of the Audit Committee meetings were tabled for confirmation at every succeeding Audit Committee meeting and subsequently presented to the Board for notation. The Chairman of the Audit Committee reports on key issues discussed at each Audit Committee meeting to the Board.

The Chairman of the Audit Committee had engaged on a continuous basis with the Management, Internal Auditors and the External Auditors, in order to keep abreast of matters and issues pertaining to the Group. The Audit Committee Chairman also conveyed to the Board matters of significant concern as and when raised by the Internal Auditors or External Auditors.

The Terms of Reference of the Audit Committee is accessible via the Company’s website at www.jerasia.biz.


III. SUMMARY OF WORK

During the financial year ended 30 June 2017, the Audit Committee had discharged its functions and carried out its duties as set out in its Terms of Reference.

A summary of the work undertaken by the Audit Committee for the financial year under review on how the Audit Committee had met its responsibilities is as follows:-

1. FINANCIAL REPORTING REVIEW

The Audit Committee reviewed the unaudited quarterly financial results and annual audited financial statements prior to tabling to the Board for approval.

In the review of the unaudited quarterly financial results and annual audited financial statements, the Audit Committee focused particularly on any changes in or implementation of major accounting policies changes, significant, unusual events and compliance with accounting standards and other legal requirements.

The Audit Committee had discussed with the Management and External Auditors the financial reporting standards that were applied, including the judgements exercised in the application of those standards that may affect the financial statements as well as issues arising from the statutory audit.

Upon recommendations by the Audit Committee, the unaudited quarterly financial results and annual audited financial statements were presented at the Board meetings for approval.

2. EXTERNAL AUDIT

The Audit Committee had:-

a. Reviewed and approved the External Auditors performance and independence evaluation checklist for enhancements and modifications to ensure that the recommendations in the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) are duly incorporated.

b. Undertook an assessment to assess the performance, suitability and independence of the External Auditors and its fees. The External Auditors provide a declaration of its compliance with the relevant ethical requirements regarding professional independence. Being satisfied with the performance, suitability and the audit independence of the External Auditors, the Audit Committee recommended for the Board’s approval the re-appointment of Messrs SJ Grant Thornton as External Auditors of the Company.

c. Reviewed and approved the provision of non-audit services by the External Auditors and its fees. In considering that the nature of the non-audit services will not impair the independence and objectivity of the External Auditors, the Audit Committee approved the provision of the non-audit services by the External Auditors.

The non-audit services conducted by the External Auditors were as follows:-• review of sales verification to shopping mall management• review of the Statement on Risk Management and Internal Control

d. Reviewed with the External Auditors the results of the annual audited financial statements, management letter and management’s response to the findings of the External Auditors and also the Auditors’ report to the shareholders.

e. Reviewed with the External Auditors, the Statement on Risk Management and Internal Control for inclusion in the 2016 Annual Report.




f. Discussed and followed up on resolutions on audit issues and recommendations of the External Auditors arising from the annual audit.

g. Reviewed with the External Auditors the statutory audit plan for the financial year ended 30 June 2017 and the proposed audit fees charged by the External Auditors for the statutory audit.

h. Met with the External Auditors without the presence of the Executive Directors and Management, to discuss issues arising from their audit or areas of concern. During the private session with the External Auditors, it was noted that the External Auditors had received full cooperation and the necessary assistance from the Management and staff, which fostered an effective working relationship between the External Auditors and Management.

3. INTERNAL AUDIT

The Audit Committee had:-

a. Reviewed internal audit reports, assessed the audit findings and management’s responses to those recommendations made by the Internal Auditors and follow-up audits on the outstanding issues to ensure that appropriate actions were taken and recommendations of the Internal Auditors were implemented.

b. Reviewed the internal audit plan for the financial year ending 30 June 2018 and determined that audit coverage be expanded.

c. Reviewed and approved the Internal Audit Function evaluation checklist for enhancements and modifications to ensure that the function is adequately resourced with competent and proficient internal auditors.

d. Reviewed the following in respect of internal audit function:-

• the adequacy of the scope, functions, competency and resources of the internal audit functions and whether it has the necessary authority to carry out its work.

• the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function.

e. Noted on the presentation detailing the Organisation Chart, Operation Manual Policies and Authority Limits as contained in the internal audit report.

f. Discussed and adopted a whistle-blowing policy which includes the mechanism and framework to enable all stakeholders to voice genuine concerns in a responsible and appropriate manner. The formation of the Whistle-blowing Committee comprises the following whistle-blower officers:-

Internal whistle-blower officers:-(1) Group Managing Director(2) Financial Controller(3) Head of Human Resource and Administration

External whistle-blower officers:-(1) Chairman of the Audit Committee (2) Internal Audit Function


IV. INTERNAL AUDIT FUNCTION

The internal audit function was previously performed in-house. It reports functionally to the Audit Committee. Taken into consideration the Company’s objective to expand its internal audit function, the Company had engaged Messrs Law & Associates, an outsourced independent professional services firm, to provide the internal audit service since February 2017.

The principal responsibility of the Internal Auditors is to undertake regular and systematic reviews of the system of internal control so as to provide reasonable assurance that the system is adequate and effective, and continue to operate satisfactorily.

The internal audit function adopts a risk based approach, identifying the auditable areas for the Group, prioritising the audit assignments based on the Group’s business activity, risk management and internal control reviews carried out in prior years. It reviews the key controls and its adequacy in responding to risks within the organisation’s governance, operations and information system, assess principal risks and plans of action to address these risks and recommends improvements to the existing systems and controls. In addition, internal auditors performs follow-ups on outstanding issues arising from prior audits.

A summary of work of the internal audit function for the financial year ended 30 June 2017 is as follows:-

(1) In-house internal audit had completed and reported audit assignments covering reviews of the factory audit for Malaysian operations and procedures and its applications, and follow-up on outstanding issues arising from prior audits.

(2) Subsequent to the engagement of Messrs. Law & Associates, the outsourced Internal Auditors had formulated the internal audit plan by developing, with the following principal objectives, and had presented, the plan for the Audit Committee’s review and approval:-- Identifying the auditable areas for the Group;- Prioritising the auditable areas in the audit universe using a risk assessment approach and

determining the areas to be reviewed; and- Planning the timeline for carrying out internal audit reviews.

(3) The Internal Auditors had identified the key auditable areas and determined the following areas to be reviewed:-- Sales, Marketing and Credit Control Management- Procure to Pay- Production Management- Inventory Management- Fixed Assets Management and Capital Expenditure

(4) Based on the audit reviews carried out, the Internal Auditors reported the results of the audit reviews to the Audit Committee. The reports highlighted internal control deficiency identified and corresponding recommendations for improvements; and

(5) Followed up on the status of implementation of management action plans carried out and reported the same to the Audit Committee.

The internal audit reviews carried out during the financial year ended 30 June 2017 did not reveal deficiency that have resulted in any material losses, contingencies or uncertainties that would require separate disclosure in this annual report. The total costs incurred for the internal audit function in respect of the financial year ended 30 June 2017 amounted to RM54,500.



The Board of Directors of Jerasia Capital Berhad believes that responding promptly to changes in its business environment and ensuring a level of corporate governance that enhances long-term sustainable growth, fairness, transparency and compliance of its management and operations is one of its important responsibilities and central to strengthening corporate culture as well as increasing corporate and shareholder value.

This Statement on Corporate Governance aims to provide insights to the shareholders and investors on the corporate governance practices of the Company for the financial year ended 30 June 2017 (“FY2017”).

In its application of corporate governance practices, the Board is pleased to report hereunder as required under Paragraph 15.25 of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), an overview of the manner in which the Group has applied the principles and the extent of compliance with the best practices as advocated by the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) under the stewardship of the Board, throughout the financial year under review. Where principles which the Board considers appropriate and useful have not yet been addressed, action is being taken to ensure future compliance.

1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

1.1 Clear functions reserved for the Board and those delegated to Management

The Board is responsible with promoting the success of the Company by setting the direction of the Company through establishment of strategic objectives and policies, and takes overall accountability for the Company. It retains full and effective control over the Company, whilst the management is responsible for managing the day-to-day running of the Group’s business activities and operations in accordance with the direction and delegation of the Board. All Board members are expected to show good stewardship and act in a professional manner, as well as uphold the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities.

To ensure the effective discharge of its function and responsibilities, various Board Committees, namely the Audit Committee, Nomination Committee and Remuneration Committee have been constituted with clearly written Terms of Reference (“TOR”). These TOR are reviewed as and when the need arises, and were amended during the year to reflect the latest compliance requirement as a result of changes in the regulatory framework.

All Board Committees play an important role in ensuring sound corporate governance. Minutes of the respective Board Committee meetings are available to all Board members and the Board is kept updated as to the proceedings and matters discussed during such meetings.

Executive Directors comprising the Executive Deputy Chairman and Group Managing Director, play a leadership role to oversee the planning, implementation, execution and evaluation of the Group’s business affairs. The Executive Directors, representing the Management, are committed to and responsible for the management of the Company’s business to ensure that the Company operates within a framework of prudent and effective controls.

• Executive Directors take on the primary responsibilities for implementing the Group’s business plans, managing the daily operational activities and identifying and executing new business opportunities. They also act as an organisation leader to collaborate with the Management in articulating the Group’s vision, mission, values and strategies.



• The Group Managing Director (“MD”) is the primary person accountable for, and who oversees, the Group’s overall management and the implementation of the directives from the Board. The Group MD, Mr. Pronob Kumar Sen Gupta reports to the Board on key strategic and operational matters concerning the Group at every Board meeting, and as when the need arises. The Group MD also undertakes the responsibility of reviewing its operational results to ensure that all agreed corporate objectives and performance targets are met. The Group MD is responsible of the entire production process, to quality control, to processes, to recruitment, to marketing, to sale, to profit and even to building a future policy of the Company.

• The Group’s senior management team comprising Financial Controller, Head of Performance Management & Support, Head of Human Resource & Administration, Head of Retail and General Manager (Export/Manufacturing) support the Executive Directors in their roles and responsibilities based on their respective levels of authority.

The types of decisions delegated by the Board to the management include:-

- the preparation of annual and quarterly financial results for the approval of the Board prior to publication and release to the Bursa Securities;

- execution of business strategy and other initiatives adopted by the Board;- implementation of adequate systems of internal controls and risk management procedures;

and- compliance with relevant statutory requirements, rules and regulations.

1.2 Clear roles and responsibilities in discharging the Board’s fiduciary and leadership functions

The Board has wide responsibilities which are discharged in the best interests of the Company. The roles of the Board and its principal responsibilities are described as follows:-

a. Reviewing and adopting the Company’s strategic plans

All Directors are engaged in strategy development. The Group MD also briefs and updates the Board on the implementation of the business plan and strategy of the Company and the overall Group, and/or any change in the business plan and strategy to adapt to the fast changing business environment, at each of these Board meetings, and as and when the need arises.

During the FY2017, the Group’s strategic plan was tabled for review and approved by the Board on 25 August 2016.

b. Overseeing the conduct of the Company’s business

The Executive Directors are responsible for the day-to-day management of the business and operations of the Group. Management’s performance, under the leadership of the Executive Deputy Chairman and Group MD, is assessed by the Board through updates of the Group’s operating drivers and financial performance during each reporting period. The Board is also kept informed of key strategic initiatives, material operational issues, if any, and the Group’s performance.

c. Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures

A statement featuring the Group’s risk management framework and internal control system is included in pages 44 to 46 of this Annual Report.

d. Succession planning

In discharging its responsibility on succession planning, the Board receives updates on succession planning which is a continuous process that takes place in the Group. In line with the expressed succession planning goals, the Group consistently develops human capital.




To support the Board’s succession plan and timeline, the Nomination Committee assisted the Board in overseeing the Group’s talent strategy, including the leadership and talent framework, senior management succession planning and development pipelines. The Organisational Structure and existing skill set of the Board were assessed during the FY2017, to ensure that the Board has the right skills and experience to support the delivery of strategic planning and corporate culture.

There was also an increased focus on aligning senior management succession to strategic planning to ensure that the best individuals are ready for the Group’s future direction and executive succession planning.

e. Overseeing the development and implementation of a shareholder communications policy for the Company

The Board strives to ensure there are channels for effective communication with shareholders and stakeholders. Company announcements, newsletters and all relevant updates are posted on the Company’s website and social media sites regularly. The main features of the Company’s shareholder communication process is described on page 43 of this Annual Report.

f. Reviewing the adequacy and the integrity of the management information and internal control system of the Company

The Board is ultimately responsible for the adequacy and integrity of the Company’s internal control system. Further details pertaining to the Group’s internal control system is available in the Statement on Risk Management and Internal Control contained in this Annual Report.

1.3 Code of Conduct

The Jerasia Group, its Directors, Management and employees firmly believe in creating a corporate culture to operate the businesses of the Group in an ethical manner and to uphold the highest standards of professionalism and exemplary corporate conduct. The Company has established a Code of Conduct for Directors and employees (“Code”). The Code serves to outline the standards of business conduct and ethical behaviour which the Directors and employees should possess in discharging their duties and responsibilities. A copy of the code of conduct policy is available on the Company’s website: www.jerasia.biz.

Additionally, the Group is committed in preserving and protecting its interest and reputation at all times. The Group expects high standards of integrity and accountability from all employees within its Group of Companies. It is also intended to encourage and enable employees and others to raise concerns within the Group prior to seeking resolution outside the Company.

In line with this commitment, the Group has adopted a formal whistleblowing policy in place to protect the values of transparency, integrity, impartiality and accountability in where the Company conducts its business and affairs. This policy sets out the mechanism and framework by which all its stakeholders enable to raise concerns in relation to the Group’s activities on a confidential basis. During the FY2017, the whistleblowing policy was updated, reviewed and approved by the Board and is made available on the website of the Company.

1.4 Strategies promoting sustainability

The Company aims to promote good corporate governance in the application of sustainability practices by committing to the global environmental, social and governance aspects of business. A detailed report on the Company’s sustainability activities is presented under the Corporate Social Responsibility Statement contained in this Annual Report.



1.5 Access to information and advice

The management is cognizant of the importance of providing complete and adequate information to the Directors on a timely basis to enable them to make informed decisions to discharge their duties and responsibilities. Prior to the meetings, Board and Board Committees papers are disseminated to the Directors in good time to allow them sufficient time to prepare for the items to be discussed during the meetings. Board papers include up-to-date financial information, reports from the Executive Directors and papers on major issues for consideration by the Board.

The board meets at least quarterly to consider performance, to monitor issues of strategic direction and to consider any other issues having a material effect on the Company. Senior Management and certain executives may attend board meetings by invitation, specifically where their contribution is required in order to assist the board in its deliberations.

All Directors are entitled, whether as a full board or in their individual capacity, to seek independent professional advice at the Company’s expenses where necessary in the furtherance of their duties. The Board have unrestricted access to all information of the Company on a timely basis in an appropriate form and quality necessary to enable them to discharge their duties and responsibilities. The Directors are also encouraged to have free and open contact with management at all levels and full access to all relevant information.

The Company Secretaries also play an essential role to support the Chairman, the Board and the Board Committees by ensuring timely and appropriate information flow and that Board policy and procedures are followed. The Company Secretaries attends all Board and Board Committee meetings, prepares meeting agendas and minutes of meetings and advises the Board on governance matters.

1.6 Qualified and competent company secretaries

The Company Secretaries play an advisory role to the Board in relation to the Company’s Memorandum and Articles of Association, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations. The Company is supported by two (2) suitably qualified and competent company secretaries. Both Company Secretaries are qualified Chartered Secretaries under Section 139A(a) of the Companies Act 1965 or Section 235(2)(a) of the Companies Act 2016 and are Fellow members of the Malaysian Association of the Institute of Chartered Secretaries and Administrators (“MAICSA”). The Company Secretaries are external company secretaries from Securities Services (Holdings) Sdn. Bhd. with vast knowledge and experience from being in public practice and is supported by a dedicated team of company secretarial personnel.

The Company Secretaries support the Board to ensure its effective functioning, and in managing the corporate governance framework of the Group. The Company Secretaries also advise the Directors on their fiduciary and statutory duties, as well as compliances with company law, the MMLR, the Company’s Memorandum and Articles of Association, the MCCG 2012, Board adopted policies, and other pertinent regulations governing the Company, including guiding the Board towards the necessary compliances, as and when necessary. The Company Secretaries attend and ensure that all Board meetings are properly convened, and that proper minutes of deliberations and decisions of the Board and Board Committees are recorded.

The Company Secretaries had and will continue to constantly keep themselves abreast on matters concerning company law, the capital market, corporate governance, and other pertinent matters, and with changes in the same regulatory environment, through continuous training and industry updates. They have also attended many relevant continuous professional development programmes as required by MAICSA for practicing Chartered Secretaries.

The Board is satisfied with the performance and support rendered by the Company Secretaries to the Board in the discharge of its function and duties.


1.7 Board charter

The Board Charter sets out the following:-• Key values and principles• Board roles and responsibilities• Board composition and balance• Board Performance• Division of responsibilities• Board Meetings• Directors’ training• Directors’ Remuneration• Code of conduct

Each Director is routinely reminded of their obligations as stated in the Company’s Board Charter. The Directors have the duty to declare immediately to the Board of their interests in any transactions to be entered into directly or indirectly within the Company or the Group, in order to uphold good corporate integrity. A review of those interests have undertaken by the Board at the Board meetings quarterly to ensure impartiality of the decisions made by the Board.

The Board Charter is available at the Company’s website at www.jerasia.biz.

2. STRENGTHEN COMPOSITION

The Board has put in place the following Board Committees to assist in carrying out its fiduciary duties:-• Audit Committee; • Nomination Committee; and• Remuneration Committee.

All of these Committees have written Terms of Reference (“TOR”) clearly outlining their objectives, duties and powers. The final decisions on all matters are determined by the Board as a whole.

2.1 Nomination Committee

The Nomination Committee (“NC”) comprises exclusively of the following Non-Executive Directors, a majority of whom are independent:-

Name Designation Directorship

Dato’ Tan Yik Huay Chairman Independent Non-Executive Director

Dato’ Nik Mohamed Din bin Datuk Nik Yusoff Member Independent Non-Executive Director

Dato’ Dr. Yong Yuan Tan Member Non-Independent Non-Executive Director

Mr. Andrew Hong Tat Beng Member Independent Non-Executive Director

The NC’s principal duties are to consider the size, structure and composition of the Board, ensure appropriate succession plans are in place for the Board and senior management and, where necessary, consider new appointments to the Board and senior management. The TOR of the NC which spells out its duties and responsibilities is accessible at the Company’s website at www.jerasia.biz.




The Nomination Committee shall meet at least once a year or more frequently as deemed necessary. During the FY2017, the NC had performed the following activities in the discharge of its duties:-

(i) Adopted the following evaluation forms and questionnaires:-• Board Skills Matrix Form;• Directors’/ Key Officers’ Evaluation Form;• Board and Board Committee Evaluation Form;• Independent Directors’ Self-Assessment Checklist;• Audit Committee Members’ Self and Peer Evaluation Form; and• Audit Committee Evaluation Questionaire.

(ii) Assessed the independence of the Independent Directors of the Company;

(iii) Reviewed the contribution and performance of each individual director to assess the character, experience, integrity, and competence to effectively discharge their role as a director;

(iv) Conducted an annual assessment and evaluation of the Board and Board Committees including review of the board composition, mix of skills, independence and diversity (including gender diversity);

(v) Discussed and deliberated on the following subjects arising from the annual assessment feedback:-a. Strategic plan;b. Key performance indicators;c. Risk management; andd. Succession planning framework.

(vi) Considered and recommended to the Board the Directors who were re-elected or re-appointed at the Sixteenth Annual General Meeting (“16th AGM”) of the Company;

(vii) Reviewed the term of office and performance of the Audit Committee and its members;

(viii) Reviewed and revised the TOR of the NC to align with the amendments to the MMLR; and

(ix) Reviewed the training programme for the Directors of the Company and had suggested a training session on ‘The Companies Act 2016 – Key Revamp Updates with Integrated Tax Planning Opportunities’, which was conducted in-house.

Annual Assessment

The NC conducts annually, assessments of the Board Members, Board Committees and the individual directors. The assessment involves individual directors and committee members completing separate evaluation questionnaires covering areas which include, amongst others, the Board composition and structure, operations, roles and responsibilities, skills and competencies, and performance/contribution of the Board Committees. The process also assessed individual Director’s contribution to interaction, quality of input and understanding of roles and responsibilities as a Director. The criteria for the evaluation are guided by the Corporate Governance Guide – Towards Boardroom Excellence.

Boardroom Diversity The Board is judicious of the gender diversity recommendation promoted by the MCCG 2012

pertaining to the need to establish a policy formalising the approach to boardroom diversity and to set targets and measures for the adoption of the said recommendation.



Presently, the Board does not have any female Directors but recognises the recommendation for gender diversity. All Board appointments are based on meritocracy and candidates are proposed and selected based on objective criteria, with due regard for the benefits of diversity within the Board. Diversity in this sense encompasses a wide range of factors, including but not limited to gender, age, cultural and educational background, professional experience, skills and knowledge. The final selection is based on merit and the contribution which the candidates can bring to the Board and in the best interest of the Company.

The NC considers the following objective criteria in the board nomination and election process of directors:-

• Professionalism• Integrity• Time commitment• Ability to discharge functions and responsibilities expected

The Board practices a policy on Board composition and balance, as follows:-

(i) Led and managed by experienced Board members from diverse backgrounds with a wide range of expertise. It is collectively responsible for strategic direction, development and control of the Company and ensuring accountability to its shareholders.

(ii) There must be a minimum of two (2) or one-third (1/3), whichever is higher, Independent Directors as members of the Board at any one time. The Independent Directors bring their independent judgement to bear on the decision-making process of the Company to ensure that a fully balanced and unbiased deliberation process is in place to safeguard the interest of other shareholders.

(iii) Must comprise a majority of Independent Directors in the event the Chairman of the Board is not an Independent Director.

(iv) Assesses the Independence of the Independent Non-Executive Directors annually by taking into account the individual Director’s ability to exercise independent and objective judgement at all times.

2.2 Remuneration Committee

The Remuneration Committee (“RC”) comprises the following Directors, a majority of whom are Independent Non-Executive Directors:-

Name Designation Directorship

Dato’ Nik Mohamed Din bin Datuk Nik Yusoff Chairman Independent Non-Executive Director

Dato’ Tan Yik Huay Member Independent Non-Executive Director

Mr. Pronob Kumar Sen Gupta Member Group Managing Director

The RC is guided by its written TOR, which clearly spells out its authority and duties. The primary duties of the RC are to make recommendations to the Board on the Company’s policy and structure for the remuneration package of Directors and senior management and the establishment of a formal and transparent procedure for developing policies on such remuneration. The recommendations of the Remuneration Committee are then put forward to the Board for consideration and adoption, where appropriate.



The RC is mindful that the Group operates in a highly competitive retail environment and the Committee seeks to ensure that the level and form of remuneration is appropriate to attract, retain and motivate Executive Directors of the right calibre to ensure the success of the Company into the future.

The RC reviews the remuneration packages of the Executive Directors, which include their salaries, benefits-in-kind (if any) and other emoluments and their annual performance bonus in detail, whilst the Non-Executive Directors are entitled to Directors’ fees.

The Directors will abstain from discussion and voting on decisions in respect of their own remuneration. The Directors’ fees are approved by shareholders at the Annual General Meeting upon the recommendations made by the Board.

Details of the aggregate remuneration of the Directors during the FY2017 are as follows:-

Directors’ Remuneration

Non- Executive Executive Directors Directors RM RM Company Fees - 212,500

Group

Salaries, bonus and other emoluments 1,560,000 - Contribution to defined contribution plan and social security 188,621 - Fees - 212,500

1,748,621 212,500

The number of Executive Directors and Non-Executive Directors of the Company whose remuneration falls within the following bands of RM50,000 is as set out below:-

Number of Directors Band of Remuneration Executive Non-Executive RM50,000 and below - 5 RM800,001 – RM850,000 1 - RM900,001 – RM950,000 1 -

3. REINFORCE INDEPENDENCE

3.1 Assessment of independence

The Board recognises the importance of independence and objectivity in its decision making process. The Independent Non-Executive Directors play a crucial role of bringing objectivity to the decisions made by the Board. They provide independent judgement and objectivity without being subordinated to operational considerations. They help to ensure that the interests of all stakeholders are taken into account. The Board assesses the independence of an Independent Director through the Assessment of Independence of Independent Directors under the annual Board evaluation process. The assessment of independence is based on the criteria prescribed under the MMLR. During the FY2017, none of the Independent Directors disclosed any relationships and/or transactions that could interfere with their independent judgements or ability to act in the best interest of the Company.



3.2 Tenure of independent directors

The MCCG 2012 recommends that the tenure of independent directors should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to serve on the Board subject to re-designation of the Independent Director as a Non-Independent Director. However, if the Board intends to retain an Independent Director who has served for a continuous period of more than nine (9) years in a similar capacity, then the Board must justify and seek shareholders’ approval before the said Independent Director can continue to act in such capacity as set out in Recommendation 3.3 of the MCCG 2012.

The Board is of the view that the independence of the Independent Directors should not be determined solely by their tenure of service. The Company nominates and appoints individuals of high calibre and integrity and does not believe that a term of more than nine (9) years can impair the independence of such individuals. Dato’ Nik Mohamed Din bin Datuk Nik Yusoff and Dato’ Tan Yik Huay, who have served on the Board for more than nine years, have incumbent knowledge of the Company’s and Group’s activities, corporate history and their requisite business acumen have provided invaluable contributions to the Board. They provide unbiased and balanced views to the Group’s strategic direction and governance.

The Board through the NC, had assessed the independence of the Independent Non-Executive Directors based on criteria set out in MMLR taking into account the individual Director’s ability to exercise independent and objective judgement at all times.

The NC and the Board had determined that the two (2) Independent Directors who have served on the Board for more than nine (9) years, remain objective and independent with the following justifications:-

• Both have confirmed and declared that they are Independent Directors as defined under the MMLR;

• Neither have any conflicts of interest with the Company;

• Both Directors do not participate in the day-to-day management of the Jerasia Group and they remain free of any business relationship with the Company which could reasonably be perceived to interfere with their exercise of independent judgement; and

• Both Directors bring their independent judgement to bear on the decision-making process of the Group to ensure a fully balanced and unbiased deliberation process is in place to safeguard the interest of shareholders.

The Board was satisfied with the level of independence demonstrated by all Independent Non-Executive Directors and hence, had recommended to retain them as Independent Non-Executive Directors of the Company.

3.3 Segregation of positions of Chairman and Managing Director

The Board has unitary structure where the roles of the Chairman and the Group MD are separate.

The Chairman of the Board is Dato’ Nik Mohamed Din bin Datuk Nik Yusoff, an Independent Non-Executive Director, focuses on the achievement of the Group’s strategic vision and also leading the Board in ensuring effectiveness of the Board.

The Chairman is primarily responsible for the following:-

• Ensuring effective conduct of the Board’s function and meetings;• Ensuring effective contribution of all Directors at Board meetings; and• Ensuring effective and respectful communication between Directors and between the Board

and its shareholders.



The Group Managing Director, Mr. Pronob Kumar Sen Gupta focuses on managing the Group’s business and operations, and are responsible for the following:-

• Ensuring effective implementation of the Board’s strategic decisions;• Ensuring efficient and effective operation of the Company;• Assessing business opportunities which are of potential benefit to the Company; and• Bringing material and other relevant matters to the attention of the Board in an accurate and

timely manner.

The distinct and separate roles of the Chairman and the Group MD, with a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making.

3.4 Composition of the Board

The Board is led and managed by experienced Board members from diverse backgrounds with a wide range of expertise. The seven (7) members of the Board comprise two (2) Executive Directors and five (5) Non-Executive Directors. Amongst the Non-Executive Directors, three (3) are Independent Non-Executive Directors including the Chairman, and thus, this fulfills the prescribed requirement for one-third of the Board to be independent as stated in the MMLR. All Directors have distinguished themselves in their field of expertise and have advised the Board in the area of their respective specialty, where this is relevant to the Group’s business activities and strategic development.

The composition of the Board is kept under review and changes are made when appropriate and in the best interests of the Group. The Board considers that its composition during the year had the necessary balance of Executive and Non-Executive Directors providing the desired blend of skills, experience and judgement appropriate for the needs of the Group’s business and overall effectiveness of the Board.

4. FOSTER COMMITMENT

4.1 Time commitment

During the financial year under review, the Board held five (5) meetings to discuss the Group’s overall corporate strategic direction and objectives, assess its operational and financial performance (including the annual and quarterly financial results) and to approve connected transactions and the Group’s main investments and corporate strategic plans. The average attendance rate of the Directors for these five (5) board meetings was 100%.

The attendance record of the Directors at the Board and Board Committee meetings during the financial year under review as set out in the table below:-

Shareholders’Directors Designation BOD AC NC RC Meeting

Dato’ Nik Mohamed Din Independent bin Datuk Nik Yusoff Non-Executive 5/5 5/5 1/1 1/1 1/1 Chairman Datuk Yap Fung Kong Executive Deputy 5/5 5/5 - - 1/1 Chairman

Pronob Kumar Group Sen Gupta Managing 5/5 5/5 - 1/1 1/1 Director



The attendance record of the Directors at the Board and Board Committee meetings during the financial year under review as set out in the table below (cont’d):-

Shareholders’Directors Designation BOD AC NC RC Meeting

Dato’ Tan Yik Huay Independent Non-Executive 5/5 5/5 1/1 1/1 1/1 Director

Dato’ Dr. Yong Yuan Tan Non-Independent Non-Executive 5/5 5/5 1/1 - 1/1 Director Dato’ Sri Mohd Haniff Non-Independent bin Abd Aziz Non-Executive 5/5 5/5 - - 1/1 Director Andrew Hong Tat Beng Independent Non-Executive 5/5 5/5 1/1 - 1/1 Director

To ensure that the Directors have the time to focus and fulfill their roles and responsibilities effectively, one criterion as agreed by the Board for determining candidates for the pool of potential Directors is that they must be able to commit sufficient time to the Company.

Prior to accepting new directorships, the Directors will notify the Chairman and inform him of the expected time commitment for the new appointment accordingly. The Directors are also required to submit a timely update on their other relevant directorships and shareholdings to the Company Secretaries, who will update the Board. Such information is used to monitor the number of directorships held by the Directors and to notify the Companies Commission of Malaysia accordingly, where required.

None of the Directors of the Company have more than five directorships in public listed corporations listed on Bursa Securities.

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

4.2 Directors’ training

In order for the Group to remain competitive, the Board ensures that the Directors continuously enhance their skills and expand their knowledge to meet the challenges of the Board.

The Directors are encouraged to attend training sessions, seminars, workshops and conferences to keep abreast of industry developments and trends to enable them to carry out their roles effectively as directors in discharging their responsibilities. Each Director can determine the areas of training that he may require for personal development as a Director or as a member of a Board Committee.

During the FY2017, all Directors of the Company attended a course on ‘The Companies Act 2016 – Key Revamp Updates with Integrated Tax Planning Opportunities’, which was conducted in-house.



Trainings and/or courses attended by each Director are as follows:-

Name of Directors Training/Courses AttendedDato’ Nik Mohamed Din bin Datuk Nik Yusoff

- Company Act 2016- Companies Bill 2015 : Key Amendments Relevant to Directors

Datuk Yap Fung Kong - Company Act 2016Pronob Kumar Sen Gupta - Company Act 2016Dato’ Tan Yik Huay - Limited Liability Partnership

- Critical Thinking Skill- Tax Seminar on Malaysia- Company Act 2016

Dato’ Dr Yong Yuan Tan - Company Act 2016Dato’ Sri Mohd Haniff Abd Aziz - Company Act 2016

- Updates on Transition to ISO 9001:2015 and 14001:2015

Andrew Hong Tat Beng - Company Act 2016

In addition, Directors continuously receive briefings and updates on the Group’s businesses and operations, new developments in the business environment, corporate governance and new regulatory requirements.

Regular presentations at Board meetings from senior management to ensure that the Non-Executive Directors have sufficient knowledge to make informed decision.

Regular updates on corporate governance, sustainability and legislative/regulatory issues by way of briefings from the Company Secretaries, management and advisors.

The Directors are expected to take responsibility for identifying additional training needs and to take steps to ensure each is adequately informed about the Group and their responsibilities as a Director. The Board is confident that all of its members have the knowledge, ability and experience to perform the functions required of a Director.

5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1 Compliance with applicable financial reporting standards

In presenting the annual financial statements and quarterly reports to shareholders, the Board takes responsibility to present a balanced and meaningful assessment of the Group’s financial position and prospect and to ensure that the financial statements are drawn up in accordance with the requirements of the Companies Act 1965 or Companies Act 2016 and applicable accounting standards in Malaysia.

During the FY2017, the AC, held five (5) meetings (with an attendance rate of 100%) mainly to review with senior management, the Company’s internal and external auditors, the significant internal and external audit findings and financial matters as required under the AC’s TOR. The AC’s review covers the audit plans as well as the findings of both the internal and the external auditors, internal controls, risk assessment, annual review of the continuing connected transactions of the Group, tax updates and financial reporting matters (including the annual results for the financial year ended 30 June 2017).

5.2 Assessment of Suitability and Independence of external auditors

The Board maintains a transparent and professional relationship with the external auditors through the AC. Under existing practices, the AC met the external auditors twice during this financial year to discuss their audit plan and their audit findings on the Company’s annual financial statements. In addition, the AC will also have private meetings with the external auditors without the presence of the Management to enable exchange of views on issues requiring attention.



5.2 Assessment of Suitability and Independence of external auditors (cont’d)

The AC had undertaken an assessment on the suitability and independence of the external auditors.

In its assessment, the AC considered several factors, which included the adequacy of experience and resources of the firm and the professional staff assigned to the audit and the level of non-audit services rendered by the external auditors to the Company. The external auditors provided a declaration of its compliance with the relevant ethical requirements regarding professional independence. Being satisfied with the performance, suitability and the audit independence of the external auditors, the AC recommended for the Board’s approval the appointment of Messrs SJ Grant Thornton as external auditors of the Company.

The amount of external audit fees and non-audit fees incured for the financial year ended 30 June 2017 were as follows:-

Fee incured Audit fee Non-Audit fee

The Company 25,000 5,000 The Group 195,800 12,000

6. RECOGNISE AND MANAGE RISKS

6.1 Sound framework to manage risk

The Board is responsible for establishing and maintaining a sound risk management and internal control system to ensure that the shareholders’ investments and assets of the Company are safeguarded. The Board through its Audit Committee evaluates the adequacy and effectiveness of the internal control system by reviewing audit findings, recommendations of internal auditor, management responses and actions taken on lapses.

An overview of the Group’s internal controls system and risk management framework is detailed in the Statement on Risk Management and Internal Control.

The Company continues to maintain and review its internal control procedures to ensure, as far as possible, its assets and its shareholders’ investments are protected.

6.2 Internal Audit Function

The internal audit function examines and evaluates the Company’s activities and resultant business risks and develops an annual internal audit plan that is approved by the AC. The Internal Auditors adopt a risk-based approach towards the planning and conduct of audits, which are consistent with the Group’s framework in designing, implementing and monitoring its internal control system. The AC reviews and approves the internal audit plans, audit review memorandum and evaluates the independence, effectiveness and performance of the internal audit function.

7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

7.1 Corporate Disclosure

The Company recognises the value of transparent, consistent and coherent communications with the investing community consistent with commercial confidentiality and regulatory considerations. The Company aims to build long-term relationships with shareholders and potential investors through appropriate channels for the management and disclosure of information.

The Board acknowledges the use of information technology to communicate with its stakeholders and has maintains a comprehensive website at www.jerasia.biz. that is accessible by the public to provide all relevant information on the Group. The Company’s website includes dedicated sections for corporate information, investor relations, news and events, and Bursa announcements. All announcements are also made electronically via Bursa LINK in a timely manner to ensure equal and fair access to information by the investing public.



To further enhance communication with investors and shareholders, the Company has an ‘Investor Relation’ section on the Company’s website which provides a platform for the shareholders and potential investors to direct their enquiries on the Company. The investor relation is managed by the Group MD.

In deciding on the necessary disclosures and announcements, the Board is also guided by Bursa Securities’ Corporate Disclosure Guide.

8. STRENGTHEN RELATIONSHIP BETWEEN THE COMPANY AND SHAREHOLDERS

8.1 Shareholder participation at general meetings

The Company strives to maintain an on-going dialogue with its shareholders. Shareholders are encouraged to participate in general meetings or to appoint proxies to attend and vote at meetings for and on their behalf if they are unable to attend such meetings. The process of the Company’s general meeting is monitored and reviewed on a regular basis. The Company provides information to shareholders regarding details of the Annual General Meeting (“AGM”), their entitlement to attend the AGM, the right to appoint a proxy as well as the qualifications of a proxy. All relevant information is disclosed to shareholders in advance of the AGM to allow shareholders sufficient time to go through and enable them to exercise their rights.

The shareholders’ general meeting is one of the principal channels for communicating with the shareholders and to ensure that shareholders’ views are communicated to the Board.

8.2 Encourage poll voting

The Board noted the Recommendation 8.2 of MCCG 2012 which states that the Board should encourage poll voting. In line with this recommendation, the Chairman will inform the shareholders of their right to demand a poll vote at the commencement of the general meeting.

Further to the recent changes to the MMLR issued by Bursa Securities on 25 March 2016 on the requirement for voting for any resolution set out in the notice of general meetings, or in any notice of resolution which may properly be moved and is intended to be moved at any general meeting be voted by poll with effect from 1 July 2016, the resolution proposed at the 16th AGM of the Company were voted by poll. The Board will consider and explore the suitability and feasibility of adopting electronic voting in coming years to facilitate greater shareholders participation at general meeting, and to ensure accurate and efficient outcomes of the poll voting process.

8.3 Effective communication and proactive engagement

In maintaining the commitment to effective communication with shareholders, the Group adopts the practice of comprehensive, timely and continuing disclosures of information to its shareholders as well as to the general investing public. The practice of disclosure of information is not just established to comply with the requirements of the MMLR pertaining to continuing disclosures, it also adopts the best practices as recommended in the MCCG 2012 with regard to strengthening engagement and communication with shareholders. Where possible and applicable, the Group also provides additional disclosure of information on a voluntary basis. The Group believes that consistently maintaining a high level of disclosure and extensive communication with its shareholders is vital to shareholders and investors to make informed investment decisions.

The Annual Report is the main channel of communication between the Company and its stakeholders. The Annual Report communicates comprehensive information of the financial results and activities undertaken by the Group. As a listed issuer, the contents and disclosure requirements of the annual report are also governed by the MMLR.

Another key avenue of communication with its shareholders is the AGM, which provides a useful forum for shareholders to engage directly with the Company’s Directors. During the general meeting, shareholders are at liberty to raise questions or seek clarification on the agenda items of the general meeting from the Company’s Directors.

This Statement is made in accordance with a resolution of the Board of Directors passed on 26 September 2017.


Statement on Risk Management and Internal Control

In relation to risk management and internal control, the Board of Directors (the “Board”) of Jerasia Capital Berhad are pleased to furnish the Statement on Risk Management and Internal Control which has been prepared in accordance with the Guidelines for Directors of Listed Issuers under Bursa Securities Main Market Listing Requirement.

Board’s Responsibilities

The Board, with assistance from the Executives and Senior Management has established an effective risk management framework and internal control systems. The control framework is embedded into the processes, structures and culture of the Group. However, the Board recognises that such systems are designed to manage risks rather than eliminate them, and can provide only a reasonable and not absolute assurance against any material misstatement, loss or irregularities.

The Board has received assurances from the Executive Deputy Chairman and the Group Managing Director that the risk management and internal control systems are operating adequately and effectively, in all material aspects, based on the risk management and internal control framework of the Group.

The Board has delegated to the Audit Committee to review the risk management and internal control processes and reports.

Key Elements of Risk Management and Internal Control Systems

The key elements of the Group’s risk management and internal control systems are described below:-

• Policies and standard operating procedures are clearly defined, documented and appropriately communicated to all levels. These policies and procedures are reviewed regularly and updated when necessary, to meet operational changes in business environment and reporting needs.

• Clearly defined delegation of responsibilities to the Board Committees and the Management, including organisational structures and appropriate authority limits. The limits of delegated authority are reviewed periodically and updated when necessary.

• The Board holds regular meetings where pertinent matters are highlighted and discussed, thus ensuring that the Board maintains effective supervision over appropriate controls and risk issues. The Board is also kept updated on the Group’s activities during regular meetings.

• The Board and the Audit Committee reviews the financial performance and cash flow reports of the Group on a quarterly basis.

• Comprehensive information is provided to the Board and the Audit Committee for monitoring of performance against strategic plans, covering all key financial and operational indicators.

• The Audit Committee reviews risk management and internal control issues identified in internal audit reports and External Auditors’ management letters.

• There are periodic internal audit reviews of the key activities of the Group’s businesses and business units to assess the adequacy and effectiveness of internal control.

• The Internal Audit Function reviews all operational and financial areas of the Group and ensures that procedural compliances are met and carried out.

During the financial year under review, some deficiencies in internal control were identified. However, as these deficiencies did not materially impact the Group’s business or operations in any way, they were not included in this statement. Nevertheless, measures to correct these deficiencies have been taken or are being taken.


Statement on Risk Managementand Internal Control

Risk Management Function

The Board, in fulfilling its responsibilities, has an established operational organisational structure with clearly defined lines of accountability and delegated authority. A process of hierarchical reporting is also in place to provide for a documented and auditable trail of accountability. In addition, all employees are instilled with a risk awareness culture, which emphasizes the need for strong corporate governance, effective communication, commitment to compliance with laws, regulations and internal controls, and integrity in all responsibilities.

The Group has in place an ongoing process for identifying, evaluating and managing any significant risks faced by the Group throughout the financial year under review. The level of risk tolerance of the Group is expressed through the use of a risk impact and likelihood matrix. The Group will only accept a commercial level of risk that will provide reasonable assurance on the long term profitability and sustainability of the Group.

The Management also periodically reviews areas of risk associated with the Group’s business and operations including financial risk, operational risk and strategic risk to ensure that the corporate objectives and strategies are achieved within the acceptable risk parameters. A risk profile of the Group had been developed, which together with a summary of the key findings and corresponding action plans, are presented and discussed at the Audit Committee and Board meetings.

The Board through the Audit Committee, who is assisted by the Internal Audit Function, periodically reviews these processes as well as the risk management framework as an ongoing commitment to continuously strengthen the risk management and control environment of the Group.

During the financial year, all departments have updated the respective risk profiles, reviewed internal control systems and proposed internal control processes to enhance efficiencies of the daily operations which is in turn, reviewed by the Internal Audit Function and reported to the Audit Committee on a timely manner.

Internal Audit Function

The Board outsourced its internal audit function, effective May 2017. The Internal Auditors adopt a risk-based approach in carrying out their work and in accordance with the audit plan approved annually by the Audit Committee. Any significant deviation from the approved plan will be communicated to the Audit Committee and/or Management through periodic activity reports. Periodic internal audit reviews are carried out and the audit findings and reports are presented to the Audit Committee. Areas of improvement identified are communicated to the management for further action. Follow-up reviews are also performed to ascertain the extent of management’s implementation of the recommended corrective action plans for improvements.

The Internal Audit Function also reports on other matters that are required and/or requested by the Board and/or Audit Committee.


Statement on Risk Managementand Internal Control

Review of Statement by External Auditors

As required by paragraph 15.23 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the External Auditors, Messrs SJ Grant Thornton, have reviewed this Statement on Risk Management and Internal Control in accordance with the Recommended Practice Guide 5 (Revised) issued by the Malaysian Institute of Accountants, for inclusion in the Annual Report for the financial year ended 30 June 2017 and reported to the Board that nothing has come to their attention that causes them to believe that the Statement is inconsistent with their understanding of the processes that the Board has adopted in the review of the adequacy and effectiveness of risk management and internal control systems within the Group. RPG5 (Revised) does not require the External Auditors to consider whether this Statement covers all risk and controls, or to form an opinion on the adequacy and effectiveness of the risk management and internal control system of the Group including the assessment and opinion by the Board and management thereon.

Conclusion

The Board is of the view that the risk management framework and internal control systems that have been instituted are satisfactory and adequate to provide reasonable assurance to safeguard the Group’s assets and shareholders’ investments, and as a result there were no material losses incurred during the financial year under review.

The Statement on Risk Management and Internal Control is made in accordance with a resolution of the Board dated 26 September 2017.


The Directors are required by the Companies Act, 2016 (“the Act”) to prepare financial statements for each financial year which have been made out in accordance with applicable Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the requirements of the Act.

The Directors are responsible to ensure that the financial statements give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year, and of the results and cash flows of the

Statement ofDirectors’ Responsibilityfor preparing the financial statements

Group and of the Company for the financial year.

In preparing the financial statements, the Directors have:-

• adopted appropriate accounting policies and applied them consistently;

• made judgements and estimates that are reasonable and prudent; and

• prepared the financial statements on a going concern basis.

The Directors are responsible to ensure that the Group and the Company keep accounting records which disclose the financial position of the Group and of the Company with reasonable accuracy, enabling them to ensure that the financial statements comply with the Act.

The Directors are responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and the Company, and to detect and prevent fraud and other irregularities.

5162

556455

5063

5666

61117

Directors’ Report

Statements of Profit or Lossand Other Comprehensive Income

Statementby Directors

CorporateInformation

Statements ofChanges in Equity

IndependentAuditors’ Report

Notes to theFinancial Statements

Statements ofFinancial Position

Disclosure of Realised andUnrealised Profits or Losses

Statutory Declaration

Statements ofCash Flows

Financial Statements


Board Of Directors

Dato’ Nik Mohamed Din bin Datuk Nik YusoffDatuk Yap Fung KongPronob Kumar Sen GuptaDato’ Tan Yik HuayDato’ Dr Yong Yuan TanDato’ Sri Mohd Haniff bin Abd AzizAndrew Hong Tat Beng

Audit Committee

Dato’ Tan Yik Huay (Chairman)Dato’ Nik Mohamed Din bin Datuk Nik YusoffDato’ Dr Yong Yuan TanAndrew Hong Tat Beng

Secretaries

Chua Siew Chuan(Appointed on 18 January 2017)Yeow Sze Min(Appointed on 30 June 2017)Pan Seng Wee (Appointed on 18 January 2017 and resigned on 30 June 2017)Wong Kwai Yin (Resigned on 18 January 2017)Tan Sook Mei (Resigned on 18 January 2017)

Auditors

SJ Grant Thornton(Member of Grant Thornton International Ltd.)Chartered AccountantsLevel 11, Sheraton Imperial CourtJalan Sultan Ismail50250 Kuala Lumpur

Solicitors

Messrs Raja Eleena Siew Ang & Associates

Registered Office

Level 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur

Principal Place Of Business

No. 2-8, Lorong 6E/91Taman Shamelin PerkasaBatu 3 ½, Jalan Cheras56100 Kuala Lumpur

Share Registrar

Tricor Investor & Issuing HouseServices Sdn BhdUnit 32-01, Level 32, Tower AVertical Business SuiteAvenue 3, Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala Lumpur

Principal Bankers

Alliance Bank Malaysia BerhadAmBank (M) Berhad Bank Of China (Malaysia) BerhadHSBC Bank Malaysia BerhadRHB Bank BerhadUnited Overseas Bank (Malaysia) Berhad

Stock Exchange Listing

Bursa Malaysia Securities Berhad - Main Market

CorporateInformation


Directors’Report

The Directors have pleasure in submitting their report together with the audited financial statements of the Group and of the Company for the financial year ended 30 June 2017.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and the provision of management consultancy services to subsidiaries within the Group. The principal activities of its subsidiaries are disclosed in Note 6 to the financial statements respectively.

There have been no significant changes in the nature of the activities of the Company and its subsidiaries during the financial year.

RESULTS

Group Company RM RM Profits for the financial year 3,713,073 96,477

DIVIDENDS

There were no dividends proposed, declared or paid by the Company since the end of the previous financial period.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year, except for those disclosed in the financial statements.

DIRECTORS

The Directors who held office during the financial year and up to date of this report are as follows:-

Dato’ Nik Mohamed Din bin Datuk Nik YusoffDatuk Yap Fung KongPronob Kumar Sen GuptaDato’ Tan Yik HuayDato’ Dr Yong Yuan TanDato’ Sri Mohd Haniff bin Abd AzizAndrew Hong Tat Beng


DIRECTORS (CONT’D)

The Directors who held office of all subsidiaries during the financial year and up to date of this report are as follows:-

Datuk Yap Fung KongPronob Kumar Sen Gupta

DIRECTORS’ INTERESTS IN SHARE

According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act 2016, the interests and deemed interests in the shares of the Company or its subsidiaries of those who were Directors at the end of the financial year end (including their spouses or children) are as follows:-

Number of ordinary shares At AtDirect Interests in the Company 1.7.2016 Bought Sold 30.6.2017 Datuk Yap Fung Kong 23,205,004 - - 23,205,004Dato’ Dr Yong Yuan Tan 12,810,000 - - 12,810,000 Dato’ Sri Mohd Haniff bin Abd Aziz 10,980,002 - (1,323,000) 9,657,002Dato’ Tan Yik Huay 120,000 - - 120,000Dato’ Nik Mohamed Din bin Datuk Nik Yusoff 10,000 - - 10,000

By virtue of their interests in the shares of the Company, Datuk Yap Fung Kong is deemed to have an interest in the shares in the subsidiaries to the extent the Company has an interest under Section 8 of the Companies Act 2016.

Other than those disclosed above, none of other Directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.

DIRECTORS’ FEES AND BENEFITS

During the financial year, the fees and other benefits received and receivable by the Directors of the Company are as follows:-

Incurred Incurred by the by the Company Subsidiaries Group RM RM RM Directors’ fees 212,500 - 212,500Directors’ remuneration - 1,748,621 1,748,621 212,500 1,748,621 1,961,121

Directors’ Report


DIRECTORS’ FEES AND BENEFITS (CONT’D)

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial period, no Director has received or become entitled to receive any benefit (other than as disclosed on Note 21 to the financial statements) 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.

ISSUE OF SHARES AND DEBENTURES

There was no issuance of shares or debentures during the financial year.

OTHER STATUTORY INFORMATION

Before the statements of financial position and statements of profit or loss and other comprehensive income of the Group and of the Company were made out, the Directors took reasonable steps:-

(a) 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 satisfied themselves that all known bad debts had been written off and no provision for doubtful debts was required; and

(b) 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 have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:-

(a) which would render it necessary to make any provision for doubtful debts in the financial statements of the Group and of the Company or the amount written off for bad debts inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) 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; or

(d) not otherwise dealt with in the report or the financial statements which would render any amount stated in the financial statements misleading.

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

(a) 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 liability of any other person; or

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

Directors’ Report


OTHER STATUTORY INFORMATION (CONT’D)

In the opinion of the Directors:-

(a) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, 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;

(b) the results of operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(c) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of the report which is likely to affect substantially the results of the operations of the Group and of the Company in the financial year in which this report is made.

There was no indemnity given to or insurance effected for the Directors or officers of the Company.

AUDITORS

The total amount of fee paid to or receivable by the Auditors, Messrs SJ Grant Thornton, as remuneration for their services as auditors of the Company and its subsidiaries for the financial year ended 30 June 2017 amounted to RM25,000 and RM132,000 respectively.

There was no indemnity given to or insurance effected for the auditors of the Group and of the Company.

The Auditors, Messrs SJ Grant Thornton, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with the Directors’ resolution dated 2 October 2017.

................................................................…… DATUK YAP FUNG KONG Executive Deputy Chairman ................................................................…… PRONOB KUMAR SEN GUPTAGroup Managing Director Kuala Lumpur

Directors’ Report


StatementBy Directors

StatutoryDeclaration

pursuant to Section 251(2) of the Companies Act 2016

pursuant to Section 251(1)(b) of the Companies Act 2016

In the opinion of the Directors, the financial statements set out on pages 61 to 116 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June 2017 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the information set out on page 117 to the financial statements had been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with the Directors’ resolution dated 2 October 2017.

.................................................................... ....................................................................DATUK YAP FUNG KONG PRONOB KUMAR SEN GUPTAExecutive Deputy Chairman Group Managing Director

Kuala Lumpur

I, Pronob Kumar Sen Gupta, being the Group Managing Director primarily responsible for the financial management of Jerasia Capital Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 61 to 116 and the financial information set out on page 117 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by )the abovenamed at Kuala Lumpur in )the Federal Territory this day of )2 October 2017 ) .................................................................... PRONOB KUMAR SEN GUPTA Group Managing DirectorBefore me:S.ARULSAMY (W.490)Commissioner for Oaths


IndependentAuditors’ Report to the Members of Jerasia Capital Berhad(Incorporated in Malaysia)Company No : 503248-A

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Jerasia Capital Berhad, which comprise the statements of financial position as at 30 June 2017 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 61 to 116.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as of 30 June 2017, and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis of Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter How our audit addressed the Key Audit Matter

Impairment of intangible assets

Refer to Note 2.6.1 (iii) and (iv) (Estimation uncertainty), Note 3.3 (Significant accounting policies) and Note 5 (Intangible assets).

As at 30 June 2017, the Group recorded a significant amount of goodwill and entrance fees as disclosed in Note 5 to the financial statements. The goodwill and entrance fees are allocated to the cash generating units within two reportable segments namely the garment manufacturing and retail.

Our audit procedure in relation to management’s impairment assessment included the following:-• Evaluating the model used in determining the

value-in-use of the cash generating unit as well as assessing the discount rate used.

• Challenging the reasonableness of key assumptions based on our knowledge of the business and industry.


Report on the Audit of the Financial Statements (cont’d)

Key Audit Matters (cont’d)

Key Audit Matter How our audit addressed the Key Audit Matter

Impairment of intangible assets (cont’d)

The Group performs an annual impairment test to identify impairment losses, arising when the recoverable amount for a cash generating unit is lower than the carrying amount recorded. When assessing the carrying amount of intangible assets, management made significant estimation about future results and profitability and the assumptions underlying these.

Allowance for inventories

Refer to Note 2.6.1 (v) (Estimation uncertainty), Note 3.6 (Significant accounting policies) and Note 8 (Inventories).

As at 30 June 2017, the Group holds significant inventories as disclosed in Note 8 to the financial statements. The assessment of inventory write-downs due to excess quantities and decline in net realisable value below cost involved judgements and estimation uncertainty in forming expectations about future sales and customers’ demands.

Our audit procedure in relation to management’s impairment assessment included the following (cont’d):-• Comparing actual performance per cash

generating unit to assumptions applied in prior year models, to assess historical accuracy of management’s estimates.

• Assessing the adequacy of disclosures in the financial statements.

Our audit procedures included the following:-• Obtaining an understanding of:-

- The Group’s inventory management process;

- How the Group identifies and assesses inventory write-downs; and

- How the Group makes the accounting estimates for inventory write-downs.

• Attending inventory count at financial year end in selected locations to observe the inventory count procedures and identify damaged and obsolete inventories.

• Making inquires of management regarding the action plans relating to slow moving aged and obsolete inventories.

• Reviewing the net realisable value of inventories on sampling basis.

• Evaluating the reasonableness and adequacy of the allowance for inventories recognised for identified exposures.

There are no key audit matters in relation to the Financial Statements of the Company.

Information Other than the Financial Statements and Auditors’ Report Thereon

The Directors of the Company are responsible for the other information. The other information comprise 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.

to the Members of Jerasia Capital Berhad(Incorporated in Malaysia)Company No : 503248-A

Independent Auditors’ Report



Information Other than the Financial Statements and Auditors’ Report Thereon (cont’d)

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

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 of the Company’s internal control.





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 and 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 and 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.





Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act 2016 in Malaysia, we also report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 6 to the financial statements.

Other Reporting Responsibilities

The supplementary information set out on page 117 is disclosed to meet the requirements of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

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

.................................................................... ....................................................................SJ GRANT THORNTON DATO’ N. K. JASANI(NO. AF: 0737) (No: 708/03/18(J/PH))CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT Kuala Lumpur 2 October 2017




Statements ofFinancial Positionas at 30 June 2017

Group Company 2017 2016 2017 2016 Note RM RM RM RM ASSETS NON-CURRENT ASSETS Property, plant and equipment 4 58,856,216 62,632,110 - - Intangible assets 5 31,947,078 30,827,441 - - Investment in subsidiaries 6 - - 101,892,628 101,892,628 Deferred tax assets 7 1,649,025 1,270,927 - -

Total non-current assets 92,452,319 94,730,478 101,892,628 101,892,628

CURRENT ASSETS Inventories 8 98,696,250 82,128,234 - - Trade and other receivables 9 104,760,325 94,703,426 2,000 2,000 Tax recoverable 3,919,557 491,777 - - Cash and bank balances 8,538,678 9,822,897 5,000 38,023

215,914,810 187,146,334 7,000 40,023 Asset held-for-sale 10 3,497,021 - - - Total current assets 219,411,831 187,146,334 7,000 40,023 TOTAL ASSETS 311,864,150 281,876,812 101,899,628 101,932,651

EQUITY AND LIABILITIES EQUITY Equity attributable to owners of the Company:- Share capital 11 82,046,114 82,046,114 82,046,114 82,046,114 Foreign exchange translation reserve 12 (399,717) (1,049,559) - - Retained earnings 64,658,940 60,945,867 11,605,922 11,509,445 TOTAL EQUITY 146,305,337 141,942,422 93,652,036 93,555,559 LIABILITIES NON-CURRENT LIABILITIES Deferred tax liabilities 7 1,424,937 1,125,385 - - Bank borrowings (unsecured) 13 7,075,171 12,319,291 - - Total non-current liabilities 8,500,108 13,444,676 - -

CURRENT LIABILITIES Trade and other payables 14 34,218,887 36,055,050 30,000 34,500 Tax payable 474,195 - - - Amount due to subsidiaries 15 - - 8,217,592 8,342,592 Bank borrowings (unsecured) 13 122,365,623 90,434,664 - -

Total current liabilities 157,058,705 126,489,714 8,247,592 8,377,092 TOTAL LIABILITIES 165,558,813 139,934,390 8,247,592 8,377,092

TOTAL EQUITY AND LIABILITIES 311,864,150 281,876,812 101,899,628 101,932,651

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


Statements of Profit or Loss and Other Comprehensive Incomefor the financial year ended 30 June 2017

Group Company 1.7.2016 1.4.2015 1.7.2016 1.4.2015 to to to to 30.6.2017 30.6.2016 30.6.2017 30.6.2016 Note RM RM RM RM Revenue 16 462,143,113 503,609,566 500,000 480,000 Cost of sales (342,682,266) (348,649,934) - - Gross profits 119,460,847 154,959,632 500,000 480,000 Other operating income 17 4,875,897 3,172,392 - - Selling and distribution expenses (25,002,938) (32,612,891) - - Other operating expenses (88,811,081) (111,585,678) (403,523) (370,310)

Finance costs 18 (4,991,301) (4,765,223) - - Profits before tax 5,531,424 9,168,232 96,477 109,690 Tax expense 19 (1,818,351) (2,055,772) - - Profits for the financial year/period 3,713,073 7,112,460 96,477 109,690 Other comprehensive income, net of tax Item that will be reclassified subsequently to profit or loss:- Foreign exchange translation reserve 649,842 689,669 - - Total comprehensive income for the financial year/period attributable to owners of the Company 4,362,915 7,802,129 96,477 109,690

Earnings per share attributable to owners of the Company (sen):- - Basic and diluted 20 4.53 8.67



Statements ofChanges in Equityfor the financial year ended 30 June 2017

---------Attributable to owners of the Company-------- ---Non-distributable--- Distributable Foreign exchange Share translation Retained Total capital reserve earnings equity RM RM RM RM Group

Balance as at 1 April 2015 82,046,114 (1,739,228) 53,833,407 134,140,293 Profit for the financial period - - 7,112,460 7,112,460 Other comprehensive income - 689,669 - 689,669 Total comprehensive income for the financial period - 689,669 7,112,460 7,802,129 Balance as at 30 June 2016 82,046,114 (1,049,559) 60,945,867 141,942,422 Profit for the financial year - - 3,713,073 3,713,073 Other comprehensive income - 649,842 - 649,842 Total comprehensive income for the financial year - 649,842 3,713,073 4,362,915 Balance as at 30 June 2017 82,046,114 (399,717) 64,658,940 146,305,337

Company Balance as at 1 April 2015 82,046,114 - 11,399,755 93,445,869 Profit/Total comprehensive income for the financial period - - 109,690 109,690 Balance as at 30 June 2016 82,046,114 - 11,509,445 93,555,559 Profit/Total comprehensive income for the financial year - - 96,477 96,477 Balance as at 30 June 2017 82,046,114 - 11,605,922 93,652,036


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Statements ofCash Flowsfor the financial year ended 30 June 2017

Group Company 1.7.2016 1.4.2015 1.7.2016 1.4.2015 to to to to 30.6.2017 30.6.2016 30.6.2017 30.6.2016 Note RM RM RM RM OPERATING ACTIVITIES Profits before tax 5,531,424 9,168,232 96,477 109,690

Adjustments for:- Bad debts written off 250 61,006 - - Depreciation of property, plant and equipment 13,346,667 13,748,139 - - Dividend income - - (500,000) (480,000)Gain on disposal of property, plant and equipment - (6,185) - - Interest expense 4,991,301 4,765,223 - - Interest income (8,532) (13,657) - - Inventories written off 1,615 - - - Property, plant and equipment written off 1,342,688 97,445 - - Unrealised loss/(gain) on foreign exchange 1,994,031 (561,133) - -

Operating profit/(loss) before working capital changes 27,199,444 27,259,070 (403,523) (370,310)

Changes in working capital:- Inventories (14,960,035) (17,876,266) - - Receivables (13,639,419) (12,249,165) - - Payables (7,082,513) 15,028,465 (4,500) 2,000

Cash (used in)/generated from operations (8,482,523) 12,162,104 (408,023) (368,310)

Tax paid (1,598,663) (2,224,337) - -

Net cash (used in)/from operating activities (10,081,186) 9,937,767 (408,023) (368,310)

INVESTING ACTIVITIES Dividend received - - 500,000 480,000 Interest received 8,532 13,657 - - Subsidiaries - - - (130,000) Purchase of intangible assets (1,119,637) (797,039) - - Purchase of property, plant and equipment (14,318,713) (33,458,589) - - Proceeds from disposal of property, plant and equipment - 23,241 - -

Net cash (used in)/from investing activities (15,429,818) (34,218,730) 500,000 350,000

FINANCING ACTIVITIES Net (repayment)/proceeds of term loans (4,028,883) 8,396,113 - - Net proceeds of bankers’ acceptances 16,755,575 5,825,000 - - Net proceeds/(repayment) of revolving credits 4,600,000 (1,550,000) - - Net proceeds of trust receipts 12,202,884 15,637,915 - - Repayment to subsidiaries - - (125,000) - Interest paid (4,991,301) (4,765,223) - -

Net cash from/(used in) financing activities 24,538,275 23,543,805 (125,000) -


Group Company 1.7.2016 1.4.2015 1.7.2016 1.4.2015 to to to to 30.6.2017 30.6.2016 30.6.2017 30.6.2016 Note RM RM RM RM CASH AND CASH EQUIVALENTS Net changes (972,729) (737,158) (33,023) (18,310)Effect of exchange translation differences (177,363) 277,907 - - Brought forward 8,680,703 9,139,954 38,023 56,333

Carried forward A 7,530,611 8,680,703 5,000 38,023

NOTE TO STATEMENTS OF CASH FLOWS A. CASH AND CASH EQUIVALENTS Cash and cash equivalents included in the statements of cash flows comprise the following amounts:-

Group Company 2017 2016 2017 2016 Note RM RM RM RM Cash and bank balances 8,538,678 9,822,897 5,000 38,023 Bank overdrafts 13 (1,008,067) (1,142,194) - - 7,530,611 8,680,703 5,000 38,023


for the financial year ended 30 June 2017

Statements of Cash Flows


Notes to theFinancial Statements30 June 2017

1. GENERAL 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 is located at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur. The principal place of business of the Company is located at No. 2-8, Lorong 6E/91, Taman Shamelin Perkasa, Batu 3 ½, Jalan Cheras, 56100 Kuala Lumpur.

The principal activities of the Company are investment holding and the provision of management

consultancy services to subsidiaries within the Group. The principal activities of its subsidiaries are disclosed in Note 6 to the financial statements respectively.

There have been no significant changes in the nature of the activities of the Company and its subsidiaries during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with the Directors’ resolution dated 2 October 2017.

2. BASIS OF PREPARATION

2.1 Statement of Compliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the requirements of the Companies Act 2016 in Malaysia.

2.2 Basis of Measurement

The financial statements of the Group and of the Company are prepared under the historical cost convention, unless otherwise disclosed in the significant accounting policies.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to by the Group.

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

A fair value measurement of a non-financial market takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.


2. BASIS OF PREPARATION (CONT’D)

2.2 Basis of Measurement (cont’d)

The Group and the Company use 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 their fair value measurement as a whole:-

Level 1 - Quoted (unadjusted) market prices in active markets for the identical assets. Level 2 - Valuation techniques for which the lowest level input that is significant to their fair value

measurement is directly or indirectly observable. Level 3 - Valuation techniques for which the lowest level input that is significant to their fair value

measurement is unobservable. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group

and the Company determine whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to their fair value measurement as a whole) at the end of each reporting period.

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

2.3 Functional and Presentation Currency

The financial statements are presented in Ringgit Malaysia (“RM”) which is the Company’s functional currency and all values are rounded to the nearest RM except when otherwise stated.

2.4 Adoption of Amendments/Improvements to MFRSs

The Group and the Company have consistently applied the accounting policies set out in Note 3 to the financial statements to all periods presented in these financial statements.

At the beginning of current financial year, the Group and the Company have adopted amendments/improvements to MFRSs which are mandatory for the financial periods beginning on or after 1 July 2016.

Initial application of the amendments/improvements to the standards did not have material impact to the financial statements.

30 June 2017

Notes to the Financial Statements


30 June 2017



2.4 Adoption of Amendments/Improvements to MFRSs (cont’d)

2.4.1 Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosure of Interests in Other Entities and MFRS 128 Investments in Associates and Joint Ventures: Investment Entities – Applying the Consolidation Exception

The amendments address issues that have arisen in applying the investment entities exception under MFRS 10. The amendments to MFRS 10 clarify that the exemption from presenting consolidated financial statements applies to parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value.

Furthermore, the amendments to MFRS 10 clarify that only a subsidiary of an investment entity that is not an investment entity itself and that provides support services to the investment entity is consolidated. All other subsidiaries of an investment entity are measured at fair value. The amendments to MFRS 128 allow the investor, when applying the equity method, to retain the fair value measurement applied by the investment entity associate or joint venture to its interests in subsidiaries.

These amendments are applied retrospectively and do not have any impact on the Group as the Group does not apply the consolidation exception.

2.4.2 Amendments to MFRS 101 Presentation of Financial Statements: Disclosure Initiatives

The amendments to MFRS 101 clarify, rather than significantly change, existing MFRS 101 requirements. The amendments clarify:-

- The materiality requirements in MFRS 101;- That specific line items in the statements of profit or loss and other comprehensive

income (“OCI”) and the statements of financial position may be disaggregated;- That entities have flexibility as to the order in which they present the note to the financial

statements;- That the share of OCI of associates and joint ventures accounted for using the equity

method must be presented in aggregate as a single line item, and classified between those items that will or will not be subsequently reclassified to profit or loss.

Furthermore, the amendments clarify the requirements that apply when additional subtotals are presented in the statements of financial position and the statements of profit or loss and OCI. These amendments do not have any impact to the Group and the Company.

2.4.3 Amendments to MFRS 116 Property, Plant and Equipment and MFRS 138 Intangible Assets: Clarification of Acceptable Methods of Depreciation and Amortisation

The amendments clarify the principle in MFRS 116 and MFRS 138 that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is part) rather than the economic benefits that are consumed through use of the asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets.

The amendments are applied prospectively and do not have any impact on the Group, given that it has not used a revenue-based method to depreciate its non-current assets.



2.5 Standards Issued But Not Yet Effective At the date of authorisation of these financial statements, certain new standards, amendments and

interpretations to existing standards have been published by the Malaysian Accounting Standards Board but are not yet effective, and have not been adopted by the Group and the Company.

Management anticipates that all of these relevant pronouncements will be adopted in the Company’s accounting policies for the first period beginning after the effective date of the pronouncement.

Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s and the Company’s financial statements is provided below. Certain new standards and interpretations have been issued but are not expected to have a material impact on the Group’s and the Company’s financial statements.

The initial application of the above standards, amendments and interpretations are not expected to have any financial impacts to the financial statements, except for:-

Amendments to MFRS 107 Statement of Cash Flows: Disclosure Initiative – effective 1 January 2017

The amendments require entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financial 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 statements of financial position for liabilities arising from financing activities.

On initial application of the amendments, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 1 July 2016, with early application permitted. Application of amendments will result in additional disclosure to be provided by the Group and the Company.

MFRS 9 Financial Instruments – effective 1 January 2018

This final version of MFRS 9 replaces all previous versions of MFRS 9. Retrospective comparative information is not compulsory.

The standard introduces new requirements for classification and measurement of financial assets and liabilities and impairment of financial assets.

(i) Classification and Measurement

The approach for classification of financial assets is driven by cash flow characteristics and the business model in which an asset is held with two measurement categories – amortised cost and fair value. All equity instruments are measured at fair value. A debt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest. For financial liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the fair value option is taken for financial liabilities, the fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than profit or loss, unless this creates an accounting mismatch.

Notes to the Financial Statements30 June 2017




2.5 Standards Issued But Not Yet Effective (cont’d)

The initial application of the above standards, amendments and interpretations are not expected to have any financial impacts to the financial statements, except for (cont’d):-

MFRS 9 Financial Instruments – effective 1 January 2018 (cont’d)

(ii) Impairment

The impairment requirements apply to financial assets measured at amortised cost and fair value through other comprehensive income, lease receivables and certain loan commitments as well as financial guarantee contracts. At initial recognition, allowance for impairment is required for expected credit losses (“ECL”) resulting from default events that are possible within the next 12 months (“12 months ECL”). In the event of a significant increase in credit risk, allowance for impairment is required for ECL resulting from all possible default events over the expected life of the financial instrument. The assessment of whether credit risk has increased significantly since initial recognition is performed for each reporting period by considering the probability of default occurring over the remaining life of the financial instrument. The assessment of credit risk, as well as the estimation of ECL, are required to be unbiased, probability-weighted and should incorporate all available information which is relevant to the assessment, including information about past event, current conditions and reasonable and supportable forecasts of future events and economic conditions at the reporting date. In addition, the estimation of ECL should also take into account the time value of money.

The Group and the Company are currently assessing the financial impact of adopting MFRS 9.

MFRS 15 Revenue from Contracts with Customers-effective 1 January 2018

MFRS 15 establishes principles that an entity shall apply to report useful information about the nature, timing and uncertainty of revenue and cash flows arising from a contract with customers. The core principle of MFRS 15 is that an entity recognises revenue in a manner which reflects the consideration an entity expects to be entitled in exchange for goods or services.

The adoption of MFRS 15 is not expected to have any impact on the financial statements of the Group.

IC Interpretation 22 Foreign Currency Transactions and Advance Consideration – effective 1 January 2018

This Interpretation addresses how to determine 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) on the derecognition of a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration in a foreign currency.

Applying paragraphs 21–22 of MFRS 121, 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.

If there are multiple payments or receipts in advance, the entity shall determine a date of the transaction for each payment or receipt of advance consideration.

30 June 2017



2.5 Standards Issued But Not Yet Effective (cont’d)

The initial application of the above standards, amendments and interpretations are not expected to have any financial impacts to the financial statements, except for (cont’d):-

MFRS 16 Leases – effective 1 January 2019

MFRS 16 introduces a single accounting model for a lessee and eliminates the distinction between finance lease and operating lease. Lessee is now required to recognised assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Upon adoption of MFRS 16, the Group is required to account for major part of their operating leases in the statements of financial position by recognising the ‘right-of-use’ assets and the lease liability, thus increasing the assets and liabilities of the Group.

The Group is currently assessing the financial impact of adopting MFRS 16.

2.6 Significant Accounting Estimates and Judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and of the Company’s accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below:-

2.6.1 Estimation Uncertainty

(i) Useful lives of depreciation assets

Property, plant and equipment are depreciated on a straight line basis over their estimated useful lives. Management estimates the useful lives of the property, plant and equipment to be within 5 to 99 years and reviews the useful lives of depreciable assets at the end of each reporting period. At 30 June 2017, management assesses that the useful lives represent the expected utility of the assets to the Group. The carrying amount is disclosed in Note 4 to the financial statements. Actual results, however, may vary due to change in the expected level of usage and technological developments, which may result in the adjustment to the Group’s assets.





2.6 Significant Accounting Estimates and Judgements (cont’d)

2.6.1 Estimation Uncertainty (cont’d)

(ii) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. Factors such as probability of insolvency or significant financial difficulties of the receivables and default or significant delay in payments are considered in determining whether there is objective evidence of impairment. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

The carrying amount of the Group’s loans and receivables at the end of reporting date is disclosed in Note 9 to the financial statements.

(iii) Impairment of goodwill

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. The actual results may vary, and may cause adjustments to the Group’s assets.

In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

The carrying amount of the Group’s goodwill at the end of the reporting date is disclosed

in Note 5 to the financial statements.

(iv) Impairment of entrance fees

The useful life of entrance fee is assessed to be indefinite. Intangible assets with indefinite useful life are carrying on cost and subject to impairment review at least annually. The impairment test of entrance fee is assessed on brand basis, amalgamating all the individual entrance fees.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. The actual results may vary, and may cause adjustments to the Group’s assets.

In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

The carrying amount of the Group’s entrance fees at the end of the reporting date is disclosed in Note 5 to the financial statements.

30 June 2017



2.6 Significant Accounting Estimates and Judgements (cont’d)

2.6.1 Estimation Uncertainty (cont’d)

(v) Inventories

Inventories are measured at the lower of cost and net realisable value. In estimating net realisable values, management takes into account the most reliable evidence available at the time the estimates are made. The realisation of these inventories may be affected by market-driven changes that may occur in the future.

The carrying amount of the Group’s inventories at the end of the reporting date is disclosed in Note 8 to the financial statements.

2.6.2 Significant Management Judgement

The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the financial statements.

Deferred Tax Assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group’s latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unutilised tax losses. The tax rules in the numerous jurisdictions in which the Group operates are also carefully taken into consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

3. SIGNIFICANT ACCOUNTING POLICIES

The Group and the Company apply the significant accounting policies, as summarized below, consistently throughout all periods presented in the financial statements, unless otherwise stated.

3.1 Consolidation

3.1.1 Basis of Consolidation

The Group’s financial statements consolidate the audited financial statements of the Company and all of its subsidiaries, which have been prepared in accordance with the Group’s accounting policies. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. The financial statements of the Company and its subsidiaries are all drawn up to the same reporting date.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.




3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

3.1 Consolidation (cont’d)

3.1.1 Basis of Consolidation (cont’d)

Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

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

3.1.2 Business Combination and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expenses and included in other operating expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

30 June 2017



3.1 Consolidation (cont’d)

3.1.2 Business Combination and Goodwill (cont’d)

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed off, the goodwill associated with the operation disposed off is included in the carrying amount of the operation when determining the gain or loss on disposal off the operation. Goodwill disposed off in this circumstance is measured based on the relative values of the operation disposed off and the portion of the cash-generating unit retained.

3.1.3 Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive.

Besides, the Group considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Investment in subsidiary is stated at cost less any impairment losses in the Company’s statement of financial position, unless the investment is held-for-sale or distribution. The cost of investments includes transaction costs. Where an indication of impairment exists, the carrying amount of the subsidiary is assessed and written down immediately to its recoverable amount.

Upon the disposal of investment in a subsidiary, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.

3.1.4 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 equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

3.1.5 Non-controlling Interest

Non-controlling interest represents the equity in subsidiary not attributable, directly or indirectly, to owners of the Company. It is presented separately in the statements of financial position, separate from equity attributable to owners of the Company.

Losses applicable to non-controlling interests in a subsidiary are allocated to the non-controlling interest even though it may result in deficit to non-controlling interest.





3.2 Property, Plant and Equipment

All property, plant and equipment are measured at cost less accumulated depreciation and less any impairment losses. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Cost includes expenditures that are directly attributable to the acquisition of the assets and any other costs directly attributable to bring the asset to working condition for its intended use, cost of replacing component parts of the assets, and the present value of the expected cost for the decommissioning of the assets after their use. All other repair and maintenance costs are recognised in profit or loss as incurred.

Depreciation is recognised on the straight line method in order to write off the cost of each asset over its estimated useful life. Freehold land is not depreciated. Other property, plant and equipment are depreciated based on the estimated useful lives of the assets as follows:-

Long-term leasehold land Over the tenure of lease ranging from 60 to 99 years Buildings 2% - 3% Plant and machinery 10% Electrical installations 10% Furniture and fittings 20% Office equipment 20% Computer and software 20% Motor vehicles 12.5% Renovations 15%

The residual values, useful life and depreciation method are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable or at least annually to ensure that the amount, method and period of depreciation are consistent with previous estimates and expected trend of consumption of future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gain or loss arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss.

3.3 Intangible Assets

3.3.1 Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less impairment losses. Gain and loss on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

30 June 2017



3.3 Intangible Assets (cont’d)

3.3.2 Entrance Fees

These represent entrance fees paid for rights to set up boutiques to market an international brand of fashion apparels and accessories. These entrance fees have an indefinite useful life based on the contractual terms with the Principal of the said brand. Entrance fees are stated at cost less impairment losses.

Subsequent increase in the recoverable amount of an intangible asset other than goodwill is treated as reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined had no impairment loss been recognised. The reversal is recognised in the profit or loss immediately.

3.4 Financial Instruments

3.4.1 Initial Recognition and Measurement

Financial assets and financial liabilities are recognised when the Group and the Company become a party to the contractual provisions of the financial instruments.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value. Financial assets and financial liabilities are measured subsequently as described below:-

3.4.2 Financial Assets – Categorisation and Subsequent Measurement

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:-

(a) loans and receivables;(b) financial assets at fair value through profit or loss; (c) held-to-maturity investments; and (d) available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expenses is recognised in profit or loss or in other comprehensive income.

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at end of each reporting period. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets.





3.4 Financial Instruments (cont’d)

3.4.2 Financial Assets – Categorisation and Subsequent Measurement (cont’d)

A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.

At the reporting date, the Group and the Company carry only loans and receivables on their

statements of financial position.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognitions, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. Gains or losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. The Group’s and the Company’s cash and cash equivalents, trade and other receivables (exclude prepayments and GST receivables) fall into this category of financial instruments.

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 assets.

3.4.3 Financial Liabilities – Categorisation and Subsequent Measurement

After the initial recognition, financial liability is classified as:-

(a) financial liability at fair value through profit or loss; (b) other financial liabilities measure at amortised cost using the effective interest method;

and(c) financial guarantee contracts.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

At the reporting date, the Group and the Company carry only other financial liabilities measured at amortised cost on their statements of financial position.

30 June 2017



3.4 Financial Instruments (cont’d)

3.4.3 Financial Liabilities – Categorisation and Subsequent Measurement (cont’d)

Other Financial Liabilities Measured at Amortised Cost

The Group’s and the Company’s other financial liabilities include bank borrowings, amount due to subsidiaries, trade and other payables (exclude GST payables).

Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Bank borrowings are classified as current liabilities unless the Group has right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Financial Guarantee Contracts

Financial guarantee contracts are issued by the Company for collateral and security deposits. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, 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 recognised less cumulative amortisation.

3.4.4 Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount reported in the statements of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

3.5 Impairment of Assets

3.5.1 Financial Assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may includes indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable date indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.





3.5 Impairment of Assets (cont’d)

3.5.1 Financial Assets (cont’d)

Financial Assets Carried at Amortised Cost

For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial assets, whether significant or not, it includes the assets in a Group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Financial assets that are individually assessed for impairment and for which an impairment loss is, or continue to be, recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.

The carrying amount of the assets is reduced through the use of a provision account and the amount of the loss is recognised in the profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in the profit or loss. Loans together with the associated provision are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent financial year, the amount of the estimated impairment loss increases or decreases due to an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the provision account.

3.5.2 Non-financial Assets

At each reporting date, the Group reviews carrying amounts of its non-financial assets to determine whether there is any indication of impairment. Non-financial assets are tested for impairment at least once annually or more frequently if events or changes are in circumstances indicate that the carrying amounts may be impaired either individually or at the cash-generating unit level. If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount is estimated and an impairment loss is recognised whenever the recoverable amount of the asset or a cash-generating unit is less than its carrying amount. Recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value-in-use.

In assessing value-in-use, estimated future cash flows are discounted to present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset. An impairment loss is recognised as an expense in profit or loss immediately, unless the asset is carried at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of previously recognised revaluation surplus for the same asset.

30 June 2017



3.5 Impairment of Assets (cont’d)

3.5.2 Non-financial Assets (cont’d)

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses for an asset may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

All reversals of impairment losses are recognised as income immediately in profit or loss unless the asset is carried at revalued amount, in which case the reversal in excess of impairment loss previously recognised through profit or loss is treated as revaluation increase. After such a reversal, depreciation charge is adjusted in future periods to allocate the revised carrying amount of the asset, less any residual value, on a systematic basis over its remaining useful life.

3.6 Inventories

Inventories are stated at the lower of cost and net realisable value, after adequate allowance has been made for deterioration, damage and obsolescence. Cost is determined on a weighted average basis.

The cost of finished goods and work-in-progress where relevant includes direct materials, direct labour, direct charges and appropriate variable production overheads.

Net realised value represents the estimated selling price in the ordinary course of business less the estimated costs necessary to make sale.

3.7 Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and bank balances which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank overdrafts are shown in current liabilities under bank borrowings in the statements of financial position.

3.8 Asset Held-for-Sale

Assets that are expected to be recovered primarily through sale rather than through continuing use, are classified as held-for-sale.

Classification of the assets (or disposal group) as held-for-sale occurs only when the assets is available for immediate sale in its present condition subject only to terms that are usual and customary and the sale must be highly probable. Management must be committed to a plan to sell the assets which are expected to qualify for recognition as a completed sale within one year from the date of reclassification. Action required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn.





3.8 Asset Held-for-Sale (cont’d)

Immediately before classification as held-for-sale (or disposal group), the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less costs to sell and are not depreciated. Any differences are recognised in the profit or loss.

3.9 Equity, Reserves and Distribution to Owners

An equity instrument is any contract that evidences a residual interest in the assets 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 transactions cost, ordinary shares are classified as equity.

Foreign currency translation difference arising on the translation of the Group’s foreign entities is included in the foreign exchange translation reserve.

Retained earnings include all current and prior periods retained earnings.

Final dividends proposed by the Directors are not accounted for in shareholders’ equity as an appropriation of retained earnings, until they have been approved by the shareholders in the general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability.

Interim dividends are simultaneously proposed and declared, as the articles of association of the Company grants the Directors the authority to declare interim dividends. Consequently, interim dividends are recognised directly as a liability when they are proposed and declared.

The distribution of non-cash assets to owners is recognised as dividend payable when the dividend was approved by shareholders. The dividend payable is measured at the fair value of the shares to be distributed. At the end of the financial year and on the settlement date, the Company reviews the carrying amount of the dividend payable recognised in equity. When the Company settles the dividend payable, the difference between the carrying amount of the dividend distributed and the carrying amount of the dividend payables is recognised as a separate line item in profit or loss.

All transactions with owners of the Company are recorded separately within equity.

3.10 Borrowings Costs

All borrowing costs are expensed 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.

30 June 2017



3.11 Foreign Currency Translation

The Group’s consolidated financial statements are presented in RM, which is also the Company’s functional currency.

3.11.1 Foreign Currency Transaction and Balances Transactions in foreign currencies are initially recorded at the functional currency rates

prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date.

All differences are taken to the profit or loss with the exception of all monetary items that forms part of a net investment in a foreign operation. These are recognised in other comprehensive income until the disposal of the net investment, at which time they are reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising in translation of non-monetary items is recognised in line with the gain or loss of the item that gave rise to the translation difference (translation differences on items whose gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss respectively).

3.11.2 Operations Denominated in Functional Currencies other than Ringgit Malaysia

Assets and liabilities of foreign subsidiary, including goodwill and fair value adjustments arising in an acquisition, are translated at financial period end exchange rates. The income and expenses of foreign subsidiary is translated to RM at average rates during the financial year.

Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign exchange translation reserve, except to the extent that the translation difference is allocated to non-controlling interest.

When a foreign subsidiary is disposed in its entirely or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposed part of its interest but retains control, then the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes only part of an associate company or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

If the settlement of a monetary item receivable from or payable to a foreign subsidiary is neither planned nor likely to occur in the foreseeable future, then foreign currency differences arising from such item will form part of the net investment in the foreign subsidiary. Differences of such nature are recognised in other comprehensive income and accumulated in the foreign exchange translation reserve.





3.12 Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group and the Company and the amount of revenue can be reliably measured.

3.12.1 Sale of Goods

Revenue relating to sale of goods is recognised net of sales returns and discounts upon the transfer of risks and rewards of ownership of the goods to the customers. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

3.12.2 Interest Income

Interest income is recognised in the profit or loss on time proportion basis taking into account the principal outstanding and the effective interest rate over the period to maturity, when it is determined that such income will accrue to the Group.

3.12.3 Dividend Income

Dividend income is recognised when the right to receive payment has been established and no significant uncertainty existed with regard to its receipt.

3.13 Tax Expense

Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

3.13.1 Current Tax

Current tax is the expected tax payable or receivable on the taxable profit or loss for the financial year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial periods.

Current tax is recognised in the statements of financial position as a liability (or an asset) to the extent that it is unpaid (or refundable).

3.13.2 Deferred Tax

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statements of financial position and their tax bases. Deferred tax is not recognised for the temporary differences arising from the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

30 June 2017



3.13 Tax Expense (cont’d)

3.13.2 Deferred Tax (cont’d)

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against the unutilised tax incentive can be utilised.

3.14 Goods and Services Tax

Goods and Services Tax (“GST”) is a consumption tax based on value-added concept. GST is imposed on goods and services at every production and distribution stage in the supply chain including importation of goods and services, at the applicable tax rate of 6%. Input GST that the Group paid on purchases of business inputs can be deducted from output GST.

Revenues, expenses and assets are recognised net of the amount of GST except:-

(a) Where the GST incurred in a purchase of assets or services is not recoverable from the authority, in which case the GST is recognised as part of the cost of acquisition of the assets or as part of the expense item as applicable; and

(b) 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.

3.15 Employee Benefits

3.15.1 Short Term Benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the period in which the associated services are rendered by employees of the Group and of the Company. 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.





3.15 Employee Benefits (cont’d)

3.15.1 Short Term Benefits (cont’d)

A provision is made for the estimated liability for leave as a result of services rendered by employees up to the end of the reporting period.

3.15.2 Defined Contribution Plan

Defined contribution plans are post-employment benefit plans under which the Group and the Company pay fixed contributions into separate entities of funds and will have no legal or constructive obligation to pay further contribution if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years.

Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).

3.16 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or asset or the arrangement conveys a right to use the asset, even if that right is not explicitly specific in an arrangement.

3.16.1 Operating Lease Leases, where the Group does not assume substantially all the risks and rewards of ownership

are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised in the statements of financial position. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classified as investment property.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the tenure of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the tenure of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

3.17 Earnings Per Ordinary Share

The Group presents basic and diluted Earnings Per Share (“EPS”) data for its ordinary shares.

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group based on the weighted average number of ordinary shares outstanding during the financial year.

Diluted EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group based on the weighted average number of shares outstanding, for the effects of all dilutive potential ordinary shares during the financial year.

30 June 2017



3.18 Operating Segments

Operating segments are reported in a manner consistent with internal reporting provided to the Executive Directors, who are responsible for allocating resources and assessing performance of the operating segments, has been identified to make strategic decisions. Additional disclosures on each of these segments are shown in Note 24 to the financial statements.

Segment revenues, expenses and results include transfer between segments. The price charged on intersegment transactions are the same as those charged for similar goods to parties outside of the Group in a negotiated basis. These transfers are eliminated on consolidation.

3.19 Contingencies

Where it is not probable that an inflow or an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the asset or the obligation is not recognised in the statements of financial position and is disclosed as a contingent asset or contingent liability, unless the probability of inflow or outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent assets or contingent liabilities unless the probability of inflow or outflow of economic benefits is remote.

3.20 Related Parties

A related party is a person or entity that is related to the Group and the Company. A related party transaction is a transfer of resources, services or obligations between the Group and the Company and its related party, regardless of whether a price is charged.

(a) A person or a close member of that person family is related to the Group and the Company if that person:-

(i) has control or joint control over the Group and the Company;(ii) has significant influence over the Group and the Company; or(iii) is a member of the key management personnel of the ultimate holding company of the

Group or the Company.

(b) An entity is related to the Group and the Company if any of the following condition applies:-

(i) the entity and the Group are the members of the same group;(ii) one entity is an associates or joint venture of the Group or the Company;(iii) both entities are joint ventures of the same third party;(iv) one entity is a joint venture of a third entity and the entity is an associate of the same

third entity;(v) the entity is a post-employment benefit plan for the benefits of employees of either the

Group or an entity related to the Group;(vi) the entity is controlled or jointly-controlled by a person identified in (a) above; (vii) a person identified in (a)(i) above has significant influence over the entity or is a member

of the key management personnel of the entity or the ultimate holding company or the entity; or

(viii) the entity, or any member of a group of which it is a party, provides key management personnel services to the Group or to the parent of the Group.



4.

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5. INTANGIBLE ASSETS

Group Entrance fees Goodwill Total RM RM RM

At cost At 1 April 2015 6,853,615 23,176,787 30,030,402 Additions 797,039 - 797,039 At 30 June 2016 7,650,654 23,176,787 30,827,441 Additions 1,119,637 - 1,119,637 At 30 June 2017 8,770,291 23,176,787 31,947,078

The entrance fees represent rights to set up and operate boutiques to market an international brand of fashion apparels and accessories.

Key assumptions used in value-in-use calculations

The recoverable amount for intangible assets was based on its value-in-use. Value-in-use was determined by discounting the future cash flows generated from the continuing operations of business acquired and entrance fees and were based on the following key assumptions:-

(a) cash flows are projected based on actual operating results and a five-year business plan; and(b) the projected growth rate is 3% to 5%.

A pre-tax discount rate of 6.9% was applied in determining the recoverable amount.

The value assigned to the key assumptions represent the management’s assessment of future trends in the industry and are based on external and internal consideration. A reasonably possible change in a key assumption does not have any significant difference to the recoverable amount.




6. INVESTMENT IN SUBSIDIARIES

Company 2017 2016 RM RM

Unquoted shares:- At cost 101,892,628 101,892,628

The particulars of subsidiaries are as follows:-

Principal place of business/ Country of Name of company Principal activities incorporation 2017 2016 % % Direct Subsidiaries Jerasia Apparel Sdn. Bhd. 100 100 Wholeselling, retailing and Malaysia (156513 – X) manufacturing of fashion

apparels and accessories Jerasia Brands Sdn. Bhd. 100 100 Wholeselling and retailing of Malaysia (156588 – T) fashion apparels and accessories Jerasia Fashion Sdn. Bhd. 100 100 Retailing of fashion apparels Malaysia (360850 – V) and accessories

Canteran Apparel Sdn. Bhd. 100 100 Manufacturing and exporting Malaysia (211117 – M) of garments and accessories Jerasia Haulage Sdn. Bhd. 100 100 Dormant Malaysia (409828 – T)

Jerasia Inspiration Sdn. Bhd. 100 100 Dormant Malaysia (6523 – D) Indirect Subsidiary Canteran Apparel 100 100 Manufacturing and exporting Cambodia (Cambodia) Co. Ltd.* of garments and accessories (00025589)

* Company not audited by SJ Grant Thornton

Effective ownership interest and

voting interest

30 June 2017


7. DEFERRED TAX (ASSETS)/ LIABILITIES

Group -------------------2017------------------- -------------------2016------------------- Assets Liabilities Net Assets Liabilities Net RM RM RM RM RM RM Brought forward (1,270,927) 1,125,385 (145,542) (1,533,293) 783,718 (749,575) (Over)/Under provision in prior financial periods/ years (Note 19) (54,340) 3,607 (50,733) (3,553) 34,212 30,659 (1,325,267) 1,128,992 (196,275) (1,536,846) 817,930 (718,916)

Recognised in profit or loss (Note 19) (323,758) 295,945 (27,813) 265,919 307,455 573,374 Carried forward (1,649,025) 1,424,937 (224,088) (1,270,927) 1,125,385 (145,542)

(a) Recognised deferred tax (assets)/liabilities The components of net deferred tax assets are made up of temporary differences arising from:-

Group 2017 2016 RM RM

Unutilised tax losses (1,711,427) (1,747,328) Excess of property, plant and equipment’s carrying amounts over their tax base 1,487,339 1,601,786

(224,088) (145,542)

Deferred tax assets were recognised to the extent that it is probable that future taxable profits will be

available against which the temporary difference can be utilised.

(b) Unrecognised deferred tax assets

The following items were not recognised for deferred tax assets (stated at gross):-


Property, plant and equipment (263,988) - Unutilised tax losses (54,755,400) (58,437,831) Unabsorbed capital allowances (2,070,736) (2,070,736)

(57,090,124) (60,508,567)


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7. DEFERRED TAX (ASSETS)/ LIABILITIES (CONT’D)

(b) Unrecognised deferred tax assets (cont’d)

Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that future taxable profits of the subsidiaries would be available against which the deductible temporary differences could be utilised.

The deductible temporary differences do not expire under current tax legislation.

8. INVENTORIES

Group 2017 2016 RM RM At carrying amount:- Raw materials 7,048,243 2,542,593 Work-in-progress 37,856,679 36,787,625 Finished goods 53,791,328 42,798,016 98,696,250 82,128,234

During the financial year/period, the amount of written off recognised as costs of sales are as follows:-

Group 1.7.2016 1.4.2015 to to 30.6.2017 30.6.2016 RM RM Recognised in profit or loss:- Inventories written off 1,615 -

9. TRADE AND OTHER RECEIVABLES

Group Company 2017 2016 2017 2016 RM RM RM RM Trade

Trade receivables 70,695,490 53,960,957 - - Non-trade

Advances 2,945,355 2,879,022 - - Deposits 19,105,913 17,641,234 2,000 2,000 GST receivables 1,407,572 1,238,389 - - Prepayments 4,609,938 5,147,906 - - Sundry receivables 5,996,057 13,835,918 - - 34,064,835 40,742,469 2,000 2,000

104,760,325 94,703,426 2,000 2,000

30 June 2017


9. TRADE AND OTHER RECEIVABLES (CONT’D)

Trade receivables are non-interest bearing and are recognised at their original invoice amounts which represent their fair values on initial recognition.

The Group’s trade credit terms granted to the trade receivables range from 30 to 120 (2016: 30 to 120) days. Other credit terms are assessed and approved by the management on a case-by-case basis.

10. ASSET HELD-FOR-SALE

The Group has initiated plans to sell its 1½ storey warehouse located at No. 12, Jalan 5/91, Shamelin Industrial Park, Batu 3 ½ Jalan Cheras, 56100 Kuala Lumpur. The asset has been presented as held-for-sale. The criteria in MFRS 5 would be met at the plan commitment date.

Group 2017 2016 RM RM Asset held-for-sales:-

Property, plant and equipment 3,497,021 -

11. SHARE CAPITAL Group and Company 2017 2016 RM RM Issued and fully paid:-

82,046,114 ordinary shares 82,046,114 82,046,114

The new Companies Act 2016 in Malaysia, which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value of share capital. There is no impact on the numbers of ordinary shares on issued or the relative entitlement of any of the members as a result of this transition.

12. FOREIGN EXCHANGE TRANSLATION RESERVE

The exchange translation reserve represents exchange differences arising from the translation of the financial statements of foreign operation who functional currency is different from that of the Group’s presentation currency.




13. BANK BORROWINGS (UNSECURED)

Group 2017 2016 RM RM Non-current Term loans 7,075,171 12,319,291 Current Bank overdrafts 1,008,067 1,142,194 Bankers’ acceptances 37,904,731 21,086,000 Revolving credits 26,450,000 21,850,000 Term loans 7,042,891 5,827,654 Trust receipts 49,959,934 40,528,816 122,365,623 90,434,664

(a) The bank borrowings are supported by:-

(i) Corporate guarantee by the Company; and(ii) Negative pledge over all present and future assets of the Group.

(b) The bank borrowings bear interest rates spread of between 0.50% and 1.75% (2016: 1.00% and 1.75%) above the respective bankers’ base lending rates or cost of funds per annum.

(c) Term loans are repayable on a monthly basis over the installment periods.

14. TRADE AND OTHER PAYABLES

Group Company 2017 2016 2017 2016 RM RM RM RM Trade

Trade payables 17,246,625 14,311,007 - - Non-trade

Accruals of expenses 3,421,183 5,308,652 30,000 34,500 GST payables 470,465 879,684 - - Sundry payables 13,080,614 15,555,707 - - 16,972,262 21,744,043 30,000 34,500

34,218,887 36,055,050 30,000 34,500

Trade payables are unsecured, non-interest bearing and with the credit terms granted by suppliers ranges

from 7 to 365 (2016: 7 to 365) days.

30 June 2017


15. AMOUNT DUE TO SUBSIDIARIES

The amount due to subsidiaries are non-trade related, unsecured, non-interest bearing and repayable on demand.

16. REVENUE

Group Company 1.7.2016 1.4.2015 1.7.2016 1.4.2015 to to to to 30.6.2017 30.6.2016 30.6.2017 30.6.2016 RM RM RM RM Sales of goods 462,143,113 503,609,566 - - Dividend income - - 500,000 480,000 462,143,113 503,609,566 500,000 480,000

17. OTHER OPERATING INCOME

Group 1.7.2016 1.4.2015 to to 30.6.2017 30.6.2016 RM RM Included in other operating income are the following:-

Interest income 8,532 13,657 Gain on disposal of property, plant and equipment - 6,185 Realised gain on foreign exchange 4,791,845 1,388,929 Unrealised gain on foreign exchange - 561,133

18. FINANCE COSTS

Group 1.7.2016 1.4.2015 to to 30.6.2017 30.6.2016 RM RM Interest expenses

Bankers’ acceptances 1,722,794 1,470,454 Bank overdrafts 65,798 77,330 Revolving credits 1,250,282 1,484,009 Term loans 843,479 924,186 Trade cards 102,217 21,218 Trust receipts 1,006,731 788,026 4,991,301 4,765,223




19. TAX EXPENSE

Group Company 1.7.2016 1.4.2015 1.7.2016 1.4.2015 to to to to 30.6.2017 30.6.2016 30.6.2017 30.6.2016 RM RM RM RM Current tax - current financial year 1,911,754 1,357,223 - - - (over)/under provision in prior financial periods/years (14,857) 94,516 - - Total current tax 1,896,897 1,451,739 - -

Deferred tax (Note 7) - origination and reversal of

temporary differences (27,813) 573,374 - - - (over)/underprovision in prior financial period/years (50,733) 30,659 - - Total deferred tax (78,546) 604,033 - - Tax expense 1,818,351 2,055,772 - -

A reconciliation of income tax expense applicable to profits before tax at the statutory tax rate to income tax expense at the effective tax rate of the Group and of the Company is as follows:-

Group Company 1.7.2016 1.4.2015 1.7.2016 1.4.2015 to to to to 30.6.2017 30.6.2016 30.6.2017 30.6.2016 RM RM RM RM Profits before tax 5,531,424 9,168,232 96,477 109,690 Tax at Malaysian statutory rate of 24% 1,327,542 2,200,376 23,154 26,326 Tax effect in respect of:-

Non-allowable expenses 1,479,637 1,448,782 96,846 88,874 (Over)/underprovision of tax expense in prior financial period/years (14,857) 94,516 - - (Over)/underprovision of deferred tax in prior financial period/years (50,733) 30,659 - - Income not subject to tax (115) (903,121) (120,000) (115,200) Movement on deferred tax assets not recognised (820,426) (768,241) - - Effect of different tax rate on foreign subsidiary (102,697) (47,199) - - Tax expense 1,818,351 2,055,772 - -

30 June 2017


20. EARNINGS PER SHARE

(a) The basic earnings per share has been calculated by dividing profit for the financial year/period attributable to owners of the Company of RM3,713,073 (2016: RM7,112,460) to the weighted average number of shares outstanding during the financial year/period of 82,046,114 (2016: 82,046,114).

(b) Diluted earnings per share equals to basic earnings per share as there is no dilutive potential ordinary shares outstanding during the financial year.

21. EMPLOYEE BENEFITS EXPENSE

Group 1.7.2016 1.4.2015 to to 30.6.2017 30.6.2016 RM RM Salaries, bonus and other emoluments 73,100,489 64,674,827 Contributions to defined contribution plans and social security 3,643,306 4,839,251 76,743,795 69,514,078

Key management personnel are those personnel having authority and responsibility for planning, directing and controlling the activities of the entity either directly or indirectly.

Key management personnel includes all the Directors and Senior Executives of the Group and the Company.

The remuneration received by the key management personnel of the Group and of the Company which includes the Non-Executive Directors during the financial year/period are as follows:-

Group Company 1.7.2016 1.4.2015 1.7.2016 1.4.2015 to to to to 30.6.2017 30.6.2016 30.6.2017 30.6.2016 RM RM RM RM Executive Directors

- Salaries, bonus and other emoluments 1,560,000 2,010,000 - - - Contributions to defined contribution plans and social security 188,621 242,042 - - Non-Executive Directors

- Fees 212,500 170,000 212,500 170,000

Senior Executives - Salaries, bonus and other emoluments 948,283 1,476,440 - -

- Contributions to defined contribution plans and social security 111,063 174,133 - -

Key management personnel compensation 3,020,467 4,072,615 212,500 170,000




22. RELATED PARTY TRANSACTIONS

Related party transactions of the Group and the Company are as follows:-

(a) Significant related party transactions during the financial year/period are as follows:-

Company 1.7.2016 1.4.2015 to to 30.6.2017 30.6.2016 RM RM

Dividend received from subsidiaries 500,000 480,000

(b) Key management personnel are those personnel having authority and responsibility for planning, directing and controlling the activities of the entity either directly or indirectly. Key management personnel included all the Directors and Senior Executives of the Group and the Company.

The remuneration of key management personnel is disclosed in Note 21 to the financial statements.

(c) The outstanding balances arising from the related party transactions as at the reporting date are disclosed in Note 15 to the financial statements.

23. OPERATING LEASE COMMITMENTS

The Group had entered into several tenancy agreements for the rental of retail space and factories, resulting in future rental commitment which can, subject to certain terms in the agreements, be revised accordingly or upon its maturity based on prevailing market rates.

The Group has aggregate future commitments as at the end of each reporting period as follows:-

Group 2017 2016 RM RM Not later than one (1) year 38,497,373 41,306,363 Later than one (1) year but not later than five (5) years 51,290,095 24,055,885 89,787,468 65,362,248

Certain lease rentals are subject to contingent rental, which are determined based on a percentage of sales generated from boutiques.

30 June 2017


24. OPERATING SEGMENTS

(a) Business Segments

The Group is organised into business units based on the nature of products and services, which comprises the following:-

(i) Garment Manufacturing Manufacturing and exporting of garments and accessories

(ii) Retail Retailing of fashion apparels and accessories

(iii) Others Others include investment holding and dormant companies

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the financial statements.

Garment Group Retail Manufacturing Others Elimination Note Total 2017 RM RM RM RM RM

Revenue External sales 226,994,646 235,148,467 - - 462,143,113 Inter-segment sales - - 500,000 (500,000) (i) -

Total revenue 226,994,646 235,148,467 500,000 (500,000) 462,143,113

Results Interest income 6,524 2,008 - - 8,532 Finance costs (3,143,405) (1,847,896) - - (4,991,301) Depreciation (12,500,434) (846,233) - - (13,346,667) Other non-cash expenses (1,620,704) (1,717,630) (100,250) 100,000 (ii) (3,338,584) Tax expense (627,105) (1,262,737) - 71,491 (1,818,351) Segment profit 2,026,057 2,449,989 (36,582) (726,391) 3,713,073

Other information Additions of non-current assets 15,287,089 151,261 - - (iii) 15,438,350 Deferred tax assets 1,536,341 - - 112,684 1,649,025 Asset held- for-sale 3,497,021 - - - 3,497,021 Segment assets 160,089,327 169,261,320 102,090,618 (119,577,115) (iv) 311,864,150

Deferred tax liabilities 1,020,412 404,525 - - 1,424,937 Segment liabilities 84,509,325 87,831,309 8,452,619 (15,234,440) (v) 165,558,813




24. OPERATING SEGMENTS (CONT’D)

(a) Business Segments (cont’d)

Garment Group (cont’d) Retail Manufacturing Others Elimination Note Total 2016 RM RM RM RM RM

Revenue External sales 272,076,034 231,533,532 - - 503,609,566 Inter-segment sales - - 480,000 (480,000) (i) -

Total revenue 272,076,034 231,533,532 480,000 (480,000) 503,609,566

Results Interest income 12,626 1,031 - - 13,657 Finance costs (3,123,302) (1,641,921) - - (4,765,223) Depreciation (12,496,604) (1,251,535) - - (13,748,139) Other non-cash income 29,767 379,100 - - (ii) 408,867 Tax expense (1,726,000) (321,120) - (8,652) (2,055,772) Segment profit 5,393,052 2,088,998 83,011 (452,601) 7,112,460

Other information Additions of non-current assets 33,691,569 564,059 - - (iii) 34,255,628 Deferred tax assets 1,229,734 - - 41,193 1,270,927 Segment assets 149,714,288 125,620,691 102,206,173 (95,664,340) (iv) 281,876,812

Deferred tax liabilities 804,385 321,000 - - 1,125,385 Segment liabilities 76,473,813 67,947,041 8,531,592 (13,018,056) (v) 139,934,390

30 June 2017




(i) Inter-segment revenues are eliminated on consolidation.

(ii) Other non-cash (expenses)/income consist of the following items:-

1.7.2016 1.4.2015 to to 30.6.2017 30.6.2016 RM RM

Bad debts written off (250) (61,006) Inventories written off (1,615) - Gain on disposal of property, plant and equipment - 6,185 Property, plant and equipment written off (1,342,688) (97,445) Unrealised (loss)/gain on foreign exchange (1,994,031) 561,133

(3,338,584) 408,867

Inter-segment income is eliminated on consolidation.

(iii) Additions of non-current assets consist of the following items:-

2017 2016 RM RM

Property, plant and equipment 14,318,713 33,458,589 Intangible assets 1,119,637 797,039

15,438,350 34,255,628

(iv) The following items are adjusted from segments assets to arrive at total assets reported in the consolidated statement of financial position:-

2017 2016 RM RM

Deferred tax 112,684 41,193 Investment in subsidiaries (103,985,841) (82,515,841) Inventories (469,518) (171,636) Inter-segment balances (15,234,440) (13,018,056)

(119,577,115) (95,664,340)






(v) The following items are adjusted from segments liabilities to arrive at total liabilities reported in the consolidated statement of financial position:-

2017 2016 RM RM

Inter-segment balances (15,234,440) (13,018,056)

(b) Geographical Information

The Group’s revenue and non-current assets information based on geographical location are as follows:-

1.7.2016 1.4.2015 to to 30.6.2017 30.6.2016 RM RM

Revenue Malaysia 240,930,760 272,791,874 United States of America 116,296,210 130,820,576 Europe 71,755,350 69,649,544 Singapore 32,850,259 29,938,779 Japan 310,534 408,793

462,143,113 503,609,566

2017 2016 RM RM

Non-current assets Malaysia 91,271,001 93,330,767 Cambodia 1,181,318 1,399,711

92,452,319 94,730,478

(c) Major Customer’s Information There was one major customer with revenue equivalent to RM71,776,109 (2016: RM97,715,761) of the

Group revenue generated from garment manufacturing segment.

30 June 2017


25. FINANCIAL INSTRUMENTS

25.1 Categories of Financial Instruments

The table below provides an analysis of financial instruments categorised as follows:-

Group

(a) Loans and Receivables (“L&R”)

Carrying amount L&R RM RM

2017

Financial assets Trade and other receivables (exclude prepayments and GST receivables) 98,742,815 98,742,815 Cash and bank balances 8,538,678 8,538,678

107,281,493 107,281,493

2016 Financial assets Trade and other receivables (exclude prepayments and GST receivables) 88,317,131 88,317,131 Cash and bank balances 9,822,897 9,822,897

98,140,028 98,140,028

(b) Other Liabilities Measured At Amortised Cost (“AC”)

Carrying amount AC RM RM

2017 Financial liabilities Trade payables and other payables (exclude GST payables) 33,748,422 33,748,422 Bank borrowings (unsecured) 129,440,794 129,440,794

163,189,216 163,189,216




25. FINANCIAL INSTRUMENTS (CONT’D)

25.1 Categories of Financial Instruments (cont’d)

The table below provides an analysis of financial instruments categorised as follows (cont’d):-

Group (cont’d)

(b) Other Liabilities Measured At Amortised Cost (“AC”) (cont’d)


2016 Financial liabilities Trade payables and other payables (exclude GST payables) 35,175,366 35,175,366 Bank borrowings (unsecured) 102,753,955 102,753,955

137,929,321 137,929,321

Company

(a) Loans and Receivables (“L&R”)

Carrying amount L&R RM RM

2017 Financial assets Other receivables 2,000 2,000 Cash and bank balances 5,000 5,000

7,000 7,000

2016 Financial assets Other receivables 2,000 2,000 Cash and bank balances 38,023 38,023

40,023 40,023

30 June 2017



25.1 Categories of Financial Instruments (cont’d)

The table below provides an analysis of financial instruments categorised as follows (cont’d):-

Company (cont’d)

(b) Other Liabilities Measured At Amortised Cost (“AC”)


2017 Financial liabilities Other payables 30,000 30,000 Amount due to subsidiaries 8,217,592 8,217,592

8,247,592 8,247,592

2016 Financial liabilities Other payables 34,500 34,500 Amount due to subsidiaries 8,342,592 8,342,592

8,377,092 8,377,092

25.2 Financial Risk Management Objectives and Policies

Financial Risks

The Group is exposed to financial risks arising from their operations and the use of financial instruments. Financial risk management policy is established to ensure that adequate resources are available for the development of the Group’s business whilst managing its credit risk, liquidity risk, foreign currency risk and interest rate risk. The Group operates within clearly defined policies and procedures that are approved by the Board of Directors to ensure the effectiveness of the risk management process. The Group does not actively engaged in the trading of financial assets for speculative purpose nor does it write options.





25.2 Financial Risk Management Objectives and Policies (cont’d)

Financial Risks (cont’d)

The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activities are set out as follows:-

(a) Credit Risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instruments fails to meet its contractual obligations. It is the Group’s policy to enter into financial instruments with a diversity of creditworthy counterparties. The Group does not expect to incur material credit losses of its financial assets or other financial instruments.

Concentration of credit risk exists when changes in economic, industry and geographical factors similarly affect the group of counterparties whose aggregate credit exposure is significant in relation to the Group’s total credit exposure. The Group’s transactions are entered into with diverse creditworthy counterparties, thereby mitigate any significant concentration of credit risk.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification and evaluation procedures. The Group does not offer credit terms without the approval of the management.

The Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of trade and other receivables in Note 9 to the financial statements.

Following are the areas where the Group and the Company are exposed to credit risk:-

Receivables

With a credit policy in place to ensure the credit risk is monitored on an ongoing basis, management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses aging analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than credit terms granted are deemed to have higher credit risk, and are monitored individually.

The aging analysis of trade receivables is as follows:-

Gross/Net Group RM

2017 Within credit terms 59,428,806 Past due 1-60 days but not impaired 10,950,918 Past due 61-120 days but not impaired 219,054 Past due more than 120 days but not impaired 96,712

70,695,490

30 June 2017





The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activities are set out as follows (cont’d):-

(a) Credit Risk (cont’d)

Following are the areas where the Group and the Company are exposed to credit risk (cont’d):-

Receivables (cont’d)

The aging analysis of trade receivables is as follows (cont’d):-

Gross/Net Group RM

2016 Within credit terms 53,649,023 Past due 1-60 days but not impaired 311,817 Past due 61-120 days but not impaired - Past due more than 120 days but not impaired 117

53,960,957

Trade receivables that are neither past due nor impaired are creditworthy customers with good payment records with the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year/period.

As at 30 June 2017, trade receivables of RM11,266,684 (2016: RM311,934) were past but not impaired. These relate to a number of independent customers for whom there is no recent history of default.

Trade receivables that are neither past due nor impaired and neither past due or impaired are disclosed above.

As at the reporting date, approximately 98% (2016: 97%) of trade receivables were due from 7 (2016: 9) customers.

Corporate guarantee The maximum exposure to credit risk of the Company amounting to RM272,934,804 (2016:

RM188,692,682), representing unsecured corporate guarantees given to the licensed banks for banking facilities granted to certain subsidiaries as at the end of the reporting period.

The Company monitors on an ongoing basis the financial results of the subsidiaries and

repayments made by the subsidiaries. As at the end of the reporting period, there was no indication that any subsidiaries would default on repayment.








(a) Credit Risk (cont’d)

Following are the areas where the Group and the Company are exposed to credit risk (cont’d):-

Corporate guarantee (cont’d)

The corporate guarantee does not have a determinable effect on the terms of the banking facilities due to the banks requiring parent’s guarantees as a pre-condition for approving the banking facilities granted to subsidiaries. The actual terms of the banking facilities are likely to be the best indicator of “at market” terms and hence the fair value of the banking facilities are equal to the banking facilities amount received by the subsidiaries. As such, there is no value on the corporate guarantee to be recognised in the financial statements.

Financial guarantee has not been recognised since the fair value on initial recognition was not material.

There is also no present obligation, legal or constructive, as a result of past event and it is not probable that an outflow of resources embodying economic benefits would be required to settle the obligation.

Cash and cash equivalents

The credit risk for cash and cash equivalents are considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

(b) Liquidity Risk Liquidity risk is the risk that the Group and the Company will not be able to meet its financial

obligations as and when they fall due.

In managing its exposures to liquidity risk, the Group and the Company maintain a level of cash and cash equivalents and banking facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

The Group and the Company aim at maintaining a balance of sufficient cash and deposits and flexibility in funding by keeping diverse sources of committed and uncommitted banking facilities from banks.

The liquidity risks arise principally from its payables and bank borrowings.

30 June 2017






(b) Liquidity Risk (cont’d)

The summary of the maturity profile based on contractual undiscounted repayment obligations are as below:-

-------------------Maturity------------------- Current -----Non-current----- On demand/ Total Carrying less than 1 to 2 2 to 5 contractual amount 1 year years years cash flows Group RM RM RM RM RM

2017 Non-derivative financial liabilities Unsecured:- Bank borrowings 129,440,794 123,683,792 4,170,452 3,317,934 131,172,178 Trade and other payables (exclude GST payables) 33,748,422 33,748,422 - - 33,748,422

Total undiscounted financial liabilities 163,189,216 157,432,214 4,170,452 3,317,934 164,920,600

2016 Non-derivative financial liabilities Unsecured:- Bank borrowings 102,753,955 91,725,310 6,570,544 6,662,691 104,958,545 Trade and other payables (exclude GST payables) 35,175,366 35,175,366 - - 35,175,366

Total undiscounted financial liabilities 137,929,321 126,900,676 6,570,544 6,662,691 140,133,911


>>

<<







(b) Liquidity Risk (cont’d)

The summary of the maturity profile based on contractual undiscounted repayment obligations are as below (cont’d):-

-------------------Maturity------------------- Current -----Non-current----- On demand/ Total Carrying less than 1 to 2 2 to 5 contractual amount 1 year years years cash flows Company RM RM RM RM RM

2017

Non-derivative financial liabilities Unsecured:- Other payables 30,000 30,000 - - 30,000 Amount due to subsidiaries 8,217,592 8,217,592 - - 8,217,592

Total undiscounted financial liabilities 8,247,592 8,247,592 - - 8,247,592

2016 Non-derivative financial liabilities Unsecured:- Other payables 34,500 34,500 - - 34,500 Amount due to subsidiaries 8,342,592 8,342,592 - - 8,342,592

Total undiscounted financial liabilities 8,377,092 8,377,092 - - 8,377,092

The above amounts reflect the contractual undiscounted cash flows, which may differ from the carrying amounts of financial liabilities at the reporting date.

30 June 2017

>>

<<






(c) Foreign Currency Risk

The Group is exposed to foreign currency risk as a result of its normal trading activities, where the currency denomination differs from the functional currency. The Group, inter-alia, manages its foreign currency risk by entering into forward foreign exchange contracts as and when considered necessary to limit its foreign exchange exposure. Exposure to currency risk as a whole is mitigated by the operating environment which provides for a natural hedge. Most payments for foreign payables is matched against receivables denominated in the same foreign currency.

USD SGD EURO HKD Group RM RM RM RM

2017 Financial assets Trade receivables 1,444,688 - - - Other receivables 841,317 - - - Cash and bank balances 1,240,323 - - - Financial liabilities Trade payables (7,726,334) (15,750) (2,640,610) (445) Other payables (82,321) (29,807) - - Bank borrowings (54,089,292) - (1,951,822) -

Net exposure (58,371,619) (45,557) (4,592,432) (445)

2016 Financial assets Trade receivables 263,957 - - - Other receivables 2,578,472 - - - Cash and bank balances 1,898,851 - - - Financial liabilities Trade payables (4,036,755) - (563,463) (165,861) Other payables (35,591) (42,173) - - Bank borrowings (40,528,816) - - -

Net exposure (39,859,882) (42,173) (563,463) (165,861)








(c) Foreign Currency Risk (cont’d)

Foreign currency sensitivity analysis

The following table illustrates the sensitivity of profit or loss with regards to the Group’s financial assets and financial liabilities and the RM/USD, RM/SGD, RM/EURO and RM/HKD exchange rate and all variables are held constant.

It assumes a +/- 2% (2016: +/- 3%) change of the RM/USD, +/- 1% (2016: +/- 2%) RM/SGD, +/- 1% (2016: +/- 3%) RM/EURO and +/- 2% (2016: +/- 3%) RM/HKD exchange rate at financial year/period end. This percentage has been determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity analysis based on the Group’s foreign currency financial instruments held at each reporting date and also takes into account exchange contracts that offset from changes in currency exchange rates.

If the RM had strengthened against the USD, SGD, EURO and HKD, then the impact would be as follows:-

--Effect on profits for the financial year/period-- USD SGD EURO HKD Group RM RM RM RM

2017 1,167,432 456 45,924 9 2016 1,195,796 843 16,904 4,976

If the RM had weakened against the USD, SGD, EURO and HKD then the impact on profit for the financial year/period would be the opposite effect.

Exposures to foreign exchange rates vary during the financial year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group’s exposure to foreign currency risk.

30 June 2017

><






(c) Foreign Currency Risk (cont’d)

Foreign currency sensitivity analysis (cont’d)

The Group incurred realised and unrealised (gain)/loss on foreign exchange as below:-

Group 1.7.2016 1.4.2015 to to 30.6.2017 30.6.2016 RM RM

Realised (4,791,845) (1,388,929) Unrealised 1,994,031 (561,133)

(d) 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 due to changes in market interest rates.

The Group’s interest rate management objective is to manage the interest expenses consistent with maintaining an acceptable level of exposure to interest rate fluctuation. In order to achieve this objective, the Group’s targets a mix of fixed and floating debt based on assessment of its existing exposure and desired interest rate profile.

The Group’s floating rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates.








(d) Interest Rate Risk (cont’d)

Interest rate sensitivity analysis

The interest rate profile of the Group’s significant interest-bearing financial instruments, based on carrying amounts at end of the reporting date were as follows:-


Floating rate instruments Financial liabilities - Bank overdrafts 1,008,067 1,142,194 - Bankers’ acceptances 37,904,731 21,086,000 - Revolving credits 26,450,000 21,850,000 - Term loans 14,118,062 18,146,945 - Trust receipts 49,959,934 40,528,816

129,440,794 102,753,955

Cash flow sensitivity analysis for floating rate instruments

The following table illustrates the sensitivity of profit to a reasonably possible change in interest rates of +/-25 (2016: +/-25) basis points (“bp”). These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

Group Effect on profits for the financial year/ period/Equity +25bp -25bp RM RM

2017 (323,602) 323,602 2016 (256,885) 256,885

30 June 2017






(d) Interest Rate Risk (cont’d)

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial liabilities at fair value through profit or loss and does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

25.3 Fair Value of Financial Instruments

The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their values and carrying amounts shown in the statements of financial position.

Fair value of financial instruments not carried at Carrying fair value amount Level 3 Group RM RM

2017 Financial liability Bank borrowings 131,172,178 129,440,794

2016 Financial liability Bank borrowings 104,958,545 102,753,955

Financial instruments not carried at fair value

Type Description of valuation technique and inputs usedBank borrowings Discounted cash flows using a rate based on the current market rate of

borrowings of the respective entities at the reporting date.

Policy on transfer between levels

The fair value of liabilities to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.




26. CONTINGENT LIABILITIES

Company 2017 2016 RM RM Unsecured:- Corporate guarantees given to the licensed banks for banking facilities granted to certain subsidiaries 272,934,804 188,692,682

27. CAPITAL MANAGEMENT

Total capital managed at Group level is the shareholders’ funds as shown in the statements of financial position.

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investors, creditors and market confidence and to sustain future development of the business. The Directors monitor and determine to maintain an optimal gearing ratio that complies with debt covenants and regulatory requirements.

The Group monitors capital using a gearing ratio, which are the total interest bearing borrowings over

owners’ equity. The borrowings include term loans and other loans while owners’ equity refers to the equity attributable to the owners of the Company.

Group 2017 2016 RM RM Total borrowings - long term borrowings 7,075,171 12,319,291 - short term borrowings 122,365,623 90,434,664 129,440,794 102,753,955 Less: Cash and bank balances (8,538,678) (9,822,897) Net debt 120,902,116 92,931,058 Total equity 146,305,337 141,942,422 Debt-to-equity ratio 83% 65%

28. COMPARATIVE INFORMATION

On 28 December 2015, the Company and its subsidiaries had changed their financial year end from 31 March 2016 to 30 June 2016.

Consequently, the comparative figures are for the period from 1 April 2015 to 30 June 2016. The comparative amounts for the statements of profit or loss and other comprehensive income, statements of cash flows, statements of changes in equity and related notes to the financial statements are not comparable.

30 June 2017


Bursa Malaysia Securities Berhad had on 25 March 2010 and 20 December 2010, issued directives requiring all listed corporations to disclose the breakdown of retained earnings into realised and unrealised on a Group and Company basis, as the case may be, in quarterly reports and annual audited financial statements.

The breakdown of retained earnings as at the reporting date that has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and Guidance on Special Matter No. 1 issued on 20 December 2010 by the Malaysian Institute of Accountants are as follows:-

Group Company 2017 2016 2017 2016 RM RM RM RM Retained earnings - Realised 107,993,624 101,506,051 11,605,922 11,509,445 - Unrealised (1,769,943) 706,675 - -

106,223,681 102,212,726 11,605,922 11,509,445Less: Consolidation adjustments (41,564,741) (41,266,859) - -

Retained earnings as per financial statements 64,658,940 60,945,867 11,605,922 11,509,445

The disclosure of realised and unrealised profits or losses above is solely for complying with the disclosure requirements stipulated in the directive by Bursa Malaysia Securities Berhad and should not be applied for any other purposes.

Disclosure of Realised andUnrealised Profits or Losses


CARRYING APPROXIMATE AMOUNT LAND AREA/ AS AT TENURE/ BUILT UP DATE OF AGE OF 30 JUNE 2017LOCATION/DESCRIPTION USAGE (SQ FT) ACQUISITION BUILDING (RM)

CANTERAN APPAREL SDN BHD

1. HS (D) 17652 99 years’ leasehold 23,958/ 23.7.1994 30 PTB 2862 expiring in 2086/ Daerah Kluang, Johor 3 storey factory 63,851 and located at 28 Jalan Bakau 86000 Kluang, Johor 19,514,1292. HS (D) 3513 60 years’ leasehold 21,780/ 23.7.1994 42 PTB 2863 expiring in 2035/ Daerah Kluang, Johor single storey office 21,284 and located at and factory 30 Jalan Bakau 86000 Kluang, Johor

3. HS (D) 4135 60 years’ leasehold 21,780/ 21.4.1997 41 PTB 2274 expiring in 2036/ Daerah Kluang, Johor 3 storey office and 19,023 and located at single storey factory 22 Jalan Bakau 86000 Kluang, Johor

4. HS (D) 4136 60 years’ leasehold 21,780/ 21.4.1997 41 PTB 3069 expiring in 2036/ Daerah Kluang, Johor 3 storey office and 19,023 2,588,965 and located at single storey factory 24 Jalan Bakau 86000 Kluang, Johor

5. HS (D) 1310 60 years’ leasehold 21,780/ 21.4.1997 45 PTB 2836 expiring in 2032/ Daerah Kluang, Johor single storey factory 10,224 and located at 26 Jalan Bakau 86000 Kluang, Johor

List ofPropertiesheld by the Group


held by the Group

List of Properties

CARRYING APPROXIMATE AMOUNT LAND AREA/ AS AT TENURE/ BUILT UP DATE OF AGE OF 30 JUNE 2017LOCATION/DESCRIPTION USAGE (SQ FT) ACQUISITION BUILDING (RM)

6. HS (D) 37183 Freehold/ 50,739/ 8.5.1999 18 PTD 50039 2 storey office and 24,600 Daerah Kluang, Johor single storey factory and located at 18 Jalan 20, Taman Sri Kluang 86000 Kluang, Johor

3,559,3387. HS (D) 37184 Freehold/ 55,688/ 8.5.1999 18 PTD 50040 2 storey office and 32,100 Daerah Kluang, Johor single storey factory and located at 20 Jalan 20, Taman Sri Kluang 86000 Kluang, Johor

JERASIA BRANDS SDN BHD

8. 2, 4 and 6 Lorong 6E/91 99 years’ leasehold 5,250/ 5.6.2000 34 1,700,784 Taman Shamelin Perkasa expiring in 2082/ Batu 3½, Jalan Cheras 3 units of 21,000 56100 Kuala Lumpur 4 storey office

9. 8 Lorong 6E/91 99 years’ leasehold 1,760/ 1.9.2002 34 542,963 Taman Shamelin Perkasa expiring in 2082/ Batu 3½, Jalan Cheras 4 storey office 7,040 56100 Kuala Lumpur

10. Unit 2-4-12, Block 2 99 years’ leasehold —/ 5.6.2000 34 92,167 4th Floor expiring in 2082/ Taman Shamelin Perkasa medium cost 1,023 Batu 3½, Jalan Cheras apartment/hostel 56100 Kuala Lumpur

11. 12, Jalan 5/91 99 years’ leasehold 12,750/ 1.7.2008 34 3,497,021 Shamelin Industrial Park expiring in 2082/ Batu 3½, Jalan Cheras 1½ storey 18,000 56100 Kuala Lumpur warehouse


Analysis ofShareholdings

Class of Shares : Ordinary SharesTotal Number of Holders : 4,540Total Number of Issued Shares : 82,046,114 Issued Share Capital : RM82,046,114Voting Rights : One (1) vote per ordinary share

ANALYSIS OF SHAREHOLDINGS

Size of Shareholdings No. of No. of Shareholders % Shares Held %

1 – 99 1,959 43.15 72,963 0.09100 – 1,000 1,291 28.43 602,436 0.741,001 – 10,000 857 18.88 4,002,832 4.8810,001 – 100,000 389 8.57 11,242,846 13.70100,001 – 4,102,304 (*) 40 0.88 24,453,031 29.804,102,305 and above (**) 4 0.09 41,672,006 50.79

TOTAL 4,540 100.00 82,046,114 100.00

Remarks: * Less than 5% of Issued Shares ** 5% and above of Issued Shares

SUBSTANTIAL SHAREHOLDERS’S SHAREHOLDINGS

The substantial shareholders of Jerasia Capital Berhad and its respective shareholdings based on the Register of Substantial Shareholders of the Company as at 2 October 2017 are as follows:-

Direct Interest Indirect Interest No. of No. of Shares Held % Shares Held %

Datuk Yap Fung Kong 23,205,004 28.28 - -Dato’ Dr. Yong Yuan Tan 12,810,000 15.61 - -Dato’ Sri Mohd Haniff bin Abd Aziz 9,657,002 11.77 - -

DIRECTORS’ SHAREHOLDINGS

The Directors’ shareholdings based on the Register of Directors’ Shareholdings of the Company as at 2 October 2017 are as follows:-

Direct Interest Indirect Interest No. of No. ofDirectors Shares Held % Shares Held %

Dato’ Nik Mohamed Din bin Datuk Nik Yusoff 10,000 0.01 - -Datuk Yap Fung Kong 23,205,004 28.28 - -Pronob Kumar Sen Gupta - - - -Dato’ Tan Yik Huay 120,000 0.15 - -Dato’ Dr. Yong Yuan Tan 12,810,000 15.61 - -Dato’ Sri Mohd Haniff bin Abd Aziz 9,657,002 11.77 - -Andrew Hong Tat Beng - - - -

as at 2 October 2017


Analysis of Shareholdings

THIRTY LARGEST SECURITIES ACCOUNT HOLDERS

No. Shareholders No. of Shares % 1. Datuk Yap Fung Kong 23,205,004 28.282. Maybank Securities Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Mohd Haniff bin Abd Aziz (REM 851-Margin) 9,657,002 11.773. RHB Nominees (Asing) Sdn. Bhd. Pledged securities account for Dato’ Dr. Yong Yuan Tan 4,500,000 5.484. Dato’ Dr. Yong Yuan Tan 4,310,000 5.255. Justin Foo Fang Sean 4,000,000 4.886. RHB Capital Nominees (Asing) Sdn. Bhd. Pledged securities account for Dato’ Dr. Yong Yuan Tan (CEB) 4,000,000 4.887. Teoh Cheng Hua 3,195,700 3.898. UOBM Nominees (Tempatan) Sdn. Bhd. United Overseas Bank (Malaysia) Bhd (PCP) 1,720,840 2.109. Datuk Foo Ton Hin 1,424,000 1.7410. CIMB Group Nominees (Asing) Sdn. Bhd. Exempt an for DBS Bank Ltd (SFS) 900,000 1.1011. Mah King Woon Sendirian Berhad 750,000 0.9112. Chai En Wei 720,600 0.8813. Ong Lian Choon 640,000 0.7814. Mah Siew Hoe 600,000 0.7315. Lim Kian Huat 530,400 0.6516. Yeoh Phek Leng 403,000 0.4917. CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB for Tan Bee Gaik (PB) 381,900 0.4618. Leau Kim Pun @ Liau Kim Pun 380,000 0.4619. Maybank Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Lam Fook Leong 375,500 0.4620. Keh Wee Kiet 300,000 0.3721. Loo Lee Lian 300,000 0.3722. Public Invest Nominees (Asing) Sdn. Bhd. Exempt an for Phillip Securities Pte Ltd (Clients) 273,300 0.3323. Leau Kim Pun @ Liau Kim Pun 261,300 0.3224. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Lee Sok Yong 210,000 0.2625. Tan Kheng Aun 204,841 0.2526. Woo Ah Yok 200,000 0.2427. Maybank Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Tan Boon Huat 188,700 0.2328. Chong Teck Seng 187,200 0.2329. RHB Nominees (Tempatan) Sdn. Bhd. Pledged securities account for Ng Kim Choo 179,700 0.2230. Pang Chin Loong 152,200 0.18

TOTAL 64,151,187 78.19


Notice ofAnnual General Meeting

NOTICE IS HEREBY GIVEN that the Seventeenth (“17th”) Annual General Meeting (“AGM”) of the Company will be held at Topas Room, Ground Floor, The Saujana Hotel Kuala Lumpur, Saujana Resport, Jalan Lapangan Terbang SAAS, 40150 Selangor Darul Ehsan, Malaysia on Tuesday, 28 November 2017 at 10:00 a.m. for the following purposes:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 30 June 2017 together with the Reports of the Directors and the Auditors thereon.

2. To approve the payment of Directors’ fees amounting to RM170,000 for the

financial year ended 30 June 2017. 3. To approve the payment of Directors’ benefits up to an amount of RM20,000

from 31 January 2017 until the next AGM of the Company. 4. To re-elect the following Directors who are retiring in accordance with Article

81 of the Company’s Articles of Association and being eligible, had offered themselves for re-election:-

(a) Dato’ Sri Mohd Haniff bin Abd Aziz; and(b) Mr. Andrew Hong Tat Beng.

5. To re-appoint the following Directors as Directors of the Company:-

(a) Dato’ Nik Mohamed Din bin Datuk Nik Yusoff; (b) Dato’ Dr. Yong Yuan Tan; and(c) Dato’ Tan Yik Huay.

6. To re-appoint Messrs. SJ Grant Thornton as Auditors of the Company until

the conclusion of the next AGM and to authorise the Directors to determine their remuneration.

As Special Business To consider and if thought fit, with or without any modification, to pass the following Ordinary Resolutions: 7. ORDINARY RESOLUTION NO. 1

- RETENTION OF DATO’ NIK MOHAMED DIN BIN DATUK NIK YUSOFF AS AN INDEPENDENT DIRECTOR OF THE COMPANY

“THAT approval be and is hereby given to retain Dato’ Nik Mohamed Din bin

Datuk Nik Yusoff, who has served the Board as an Independent Director of the Company for a cumulative term of more than nine (9) years, to retain his office as an Independent Director of the Company in accordance with the Malaysian Code on Corporate Governance 2012.”

(Please refer to theExplanatory Note 1)

(Resolution 1)

(Resolution 2)

(Resolution 3)(Resolution 4)

(Resolution 5)(Resolution 6)(Resolution 7)

(Resolution 8)

(Resolution 9)


8. ORDINARY RESOLUTION NO. 2 - RETENTION OF DATO’ TAN YIK HUAY AS AN INDEPENDENT DIRECTOR OF

THE COMPANY “THAT approval be and is hereby given to retain Dato’ Tan Yik Huay, who

has served the Board as an Independent Director of the Company for a cumulative term of more than nine (9) years, to retain his office as an Independent Director of the Company in accordance with the Malaysian Code on Corporate Governance 2012.”

9. ORDINARY RESOLUTION NO. 3- PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE

ITS OWN SHARES “THAT subject to compliance with Section 127 of the Companies Act 2016

and all other applicable laws, rules and regulations, approval be and is hereby given to the Company, to purchase such amount of ordinary shares in the Company as may be determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad (“Bursa Securities”) as the Directors may deem fit and expedient in the interest of the Company provided that the aggregate number of shares to be purchased and held pursuant to this resolution does not exceed 10% of the existing total number of issued shares in the ordinary share capital of the Company and the maximum funds to be allocated by the Company for the purpose of purchasing its own shares shall not exceed the total retained profits of the Company, upon such terms and conditions as set out in the Statement to Shareholders dated 27 October 2017.

THAT such authority shall commence immediately upon the passing of this Ordinary Resolution and until the conclusion of the next Annual General Meeting (“AGM”) of the Company or the expiry of the period within which the next AGM is required by law to be held unless revoked or varied by Ordinary Resolution in a general meeting of the Company but so as not to prejudice the completion of a purchase made before such expiry date, in any event in accordance with the provisions of Bursa Securities Main Market Listing Requirements and any other relevant authorities.

AND THAT authority be and is hereby given to the Directors of the Company to decide in their absolute discretion to retain the ordinary shares in the Company so purchased by the Company as Treasury Shares and/or to cancel them and/or to resell them and/or to distribute them as share dividends in such manner as may be permitted and prescribed by the provisions of the Bursa Securities Main Market Listing Requirements and any other relevant authorities.”

10. To transact any other ordinary business of which due notice shall have been

given.

By Order of the Board

CHUA SIEW CHUAN (MAICSA 0777689)YEOW SZE MIN (MAICSA 7065735)Company Secretaries

Kuala LumpurDated: 27 October 2017

(Resolution 10)

(Resolution 11)

Notice of Annual General Meeting


Explanatory Notes:-

1. Item 1 of the Agenda This Agenda item is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act

2016 does not require a formal approval of the shareholders for the Audited Financial Statements and only requires the Audited Financial Statements to be laid at the Meeting. Therefore, this Agenda item is not put forward for voting.

2. Item 3 of the Agenda The proposed Resolution 2 is to approve and facilitate the payment of Directors’ benefits during the

financial year as and when the benefits are due to be paid. Directors’ benefits include meeting allowances, which are calculated based on the current Board size and the number of scheduled Board and Board Committee meetings for the period from 31 January 2017 up to the next AGM of the Company. In the event the proposed amount is insufficient (e.g. due to additional meetings to be convened or enlarged Board size), approval will be sought at the next AGM for the additional benefits to meet the shortfall.

Special Businesses

3. Items 7 and 8 of the Agenda - Retention of Independent Directors of the Company pursuant to the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”)

(i) Dato’ Nik Mohamed Din bin Datuk Nik Yusoff

The Board of Directors has vide the Nomination Committee conducted an annual performance evaluation and assessment of Dato’ Nik Mohamed Din bin Datuk Nik Yusoff (“Dato’ Nik Mohamed Din”) who has served as an Independent Director for a cumulative term of more than nine (9) years and recommended him to continue in office as an Independent Director based on the following justifications:-

(a) Dato’ Nik Mohamed Din has fulfilled the definition of an independent director as set out under Paragraph 1.01 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements (“MainLR”)

• is not an executive director of the Company or any related corporation of the Company (each corporation is referred to as “said Corporation”);

• has not been within the last two (2) years and is not an officer (except as a non-executive director) of the said Corporation [“officer” includes a director, secretary, employee, receiver who is also a manager not appointed by the Court, and liquidator not appointed by the Court or creditors];

• is not a major shareholder of the said Corporation;• is not a family member of any executive director, officer or major shareholder of the said

Corporation;• is not acting as a nominee or representative of any executive director or major

shareholder of the said Corporation;• has not been engaged as an adviser by the said Corporation under such circumstances

as prescribed by the Exchange or is not presently a partner, director (except as an independent director) or major shareholder, as the case may be, of a firm or corporation which provides professional advisory services to the said Corporation under such circumstances as prescribed by the Exchange; or

• has not engaged in any transaction with the said Corporation under such circumstances as prescribed by the Exchange or is not presently a partner, director or major shareholder, as the case may be, of a firm or corporation (other than subsidiaries of the Company) which has engaged in any transaction with the said Corporation under such circumstances as prescribed by the Exchange;



(b) Dato’ Nik Mohamed Din has not been involved in any business or other relationship which could hinder the exercise of independent judgement, objectivity or his ability to act in the best interests of the Company;

(c) Dato’ Nik Mohamed Din has no potential conflict of interest, whether business or non-business related with the Company;

(d) Dato’ Nik Mohamed Din has not established or maintained any significant personal or social relationship, whether direct or indirect, with the Group Managing Director and Executive Directors, major shareholders or management of the Company (including their family members) other than normal engagements and interactions on a professional level consistent with his duties and expected of him to carry out his duties as an independent director; and

Dato’ Nik Mohamed Din does not derive any remuneration and other benefits apart from Directors’ fees that are approved by shareholders.

(ii) Dato’ Tan Yik Huay

The Board of Directors has vide the Nomination Committee conducted an annual performance evaluation and assessment of Dato’ Tan Yik Huay (“Dato’ Tan”) who has served as an Independent Director for a cumulative term of more than nine (9) years and recommended him to continue in office as an Independent Director based on the following justifications:-

(e) Dato’ Tan has fulfilled the definition of an independent director as set out under Paragraph 1.01 of the Bursa Malaysia Securities Berhad MainLR

• is not an executive director of the Company or any related corporation of the Company (each corporation is referred to as “said Corporation”);

• has not been within the last two (2) years and is not an officer (except as a non-executive director) of the said Corporation [“officer” includes a director, secretary, employee, receiver who is also a manager not appointed by the Court, and liquidator not appointed by the Court or creditors];

• is not a major shareholder of the said Corporation;• is not a family member of any executive director, officer or major shareholder of the said

Corporation;• is not acting as a nominee or representative of any executive director or major

shareholder of the said Corporation;• has not been engaged as an adviser by the said Corporation under such circumstances

as prescribed by the Exchange or is not presently a partner, director (except as an independent director) or major shareholder, as the case may be, of a firm or corporation which provides professional advisory services to the said Corporation under such circumstances as prescribed by the Exchange; or

• has not engaged in any transaction with the said Corporation under such circumstances as prescribed by the Exchange or is not presently a partner, director or major shareholder, as the case may be, of a firm or corporation (other than subsidiaries of the Company) which has engaged in any transaction with the said Corporation under such circumstances as prescribed by the Exchange;

(f) Dato’ Tan has not been involved in any business or other relationship which could hinder the exercise of independent judgement, objectivity or his ability to act in the best interests of the Company;



(g) Dato’ Tan has no potential conflict of interest, whether business or non-business related with the Company;

(h) Dato’ Tan has not established or maintained any significant personal or social relationship, whether direct or indirect, with the Group Managing Director and Executive Directors, major shareholders or management of the Company (including their family members) other than normal engagements and interactions on a professional level consistent with his duties and expected of him to carry out his duties as an independent director; and

Dato’ Tan does not derive any remuneration and other benefits apart from Directors’ fees that are approved by shareholders.

4. Item 9 of the Agenda - Proposed Renewal of Authority for the Company to Purchase Its Own Shares

The Proposed Resolution 11 is intended to allow the Company to purchase its own shares of up to 10% of the total number of issued shares in the ordinary share capital of the Company at any time within the time period stipulated in the Bursa Malaysia Securities Berhad Main Market Listing Requirements.

Please refer to the Statement to Shareholders dated 27 October 2017 for further information.

Notes to the Notice of the 17th AGM:-

1. In respect of deposited securities, only members/shareholders whose names appear in the Record of Depositors on 21 November 2017 shall be eligible to attend the Meeting.

2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy (subject always to a maximum of two (2) proxies) to attend and vote instead of him. A proxy may, but need not also be a member of the Company. A member may appoint any person as his proxy to exercise all or any of his rights to attend, participate, speak and vote at the Meeting.

3. A member who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 may appoint at least one (1) 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.

4. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

5. Where a member or the authorised nominee appoints two (2) proxies, or where an exempt authorised nominee appoints two (2) or more proxies, the proportions of shareholdings to be represented by each proxy must be specified in order for the appointments to be valid.

6. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under the corporation’s common seal or under the hand of an officer or attorney duly authorised.

7. The instrument appointing a proxy and the power of attorney or other authority, if any, must be deposited at the registered office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than forty-eight (48) hours before the time set for holding the Meeting or any adjournment thereof.


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I/We, ________________________________________________________________________________________________________________________ (NAME IN FULL AND IN CAPITAL LETTERS)NRIC/Passport/Company No. _________________________________________________________________________________________________

of ___________________________________________________________________________________________________________________________ (FULL ADDRESS)being a member of JERASIA CAPITAL BERHAD (“Company”), hereby appoint ____________________________________________________ (NAME IN FULL AND IN CAPITAL LETTERS) ______________________________________________________________ NRIC/Passport No. _____________________________________________

of ___________________________________________________________________________________________________________________________ (FULL ADDRESS)or failing him/her, ________________________________________ NRIC/Passport No. __________________________________________________ (NAME IN FULL AND IN CAPITAL LETTERS) of ___________________________________________________________________________________________________________________________ (FULL ADDRESS)

or failing him/her, the Chairman of the Meeting as my/our proxy to attend and vote for me/us on my/our behalf at the Seventeenth Annual General Meeting (“17th AGM”) of the Company to be held at Topas Room, Ground Floor, The Saujana Hotel Kuala Lumpur, Saujana Resort, Jalan Lapangan Terbang SAAS, 40150 Selangor Darul Ehsan, Malaysia on Tuesday, 28 November 2017 at 10:00 a.m. or at any adjournment thereof, and to vote as indicated below:-

No. Ordinary Resolutions For Against1. Approval of Directors’ fees

2. Approval of the payment of Directors’ benefits

3. Re-election of Dato’ Sri Mohd Haniff bin Abd Aziz as Director of the Company

4. Re-election of Mr. Andrew Hong Tat Beng as Director of the Company

5. Re-appointment of Dato’ Nik Mohamed Din bin Datuk Nik Yusoff as Director of the Company

6. Re-appointment of Dato’ Dr. Yong Yuan Tan as Director of the Company

7. Re-appointment of Dato’ Tan Yik Huay as Director of the Company

8. Re-appointment of Messrs. SJ Grant Thornton as Auditors of the Company

9. Retention of Dato’ Nik Mohamed Din bin Datuk Nik Yusoff as an Independent Director of the Company

10. Retention of Dato’ Tan Yik Huay as an Independent Director of the Company

11. Proposed Renewal of Authority for the Company to Purchase its Own Shares

Please indicate with an “X” in the appropriate space provided above as to how you wish your votes to be casted. If you do not indicate how you wish your proxy to vote on any Resolution, the proxy will vote or abstain from voting at his or her discretion.

Dated this ..................... day of ..................., 2017

.....................................................................Signature/ Common Seal of Member

Notes :-

1. In respect of deposited securities, only members/shareholders whose names appear in the Record of Depositors on 21 November 2017 shall be eligible to attend the Meeting.

2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy (subject always to a maximum of two (2) proxies) to attend and vote instead of him. A proxy may, but need not also be a member of the Company. A member may appoint any person as his proxy to exercise all or any of his rights to attend, participate, speak and vote at the Meeting.

3. A member who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 may appoint at least one (1) 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.

4. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

5. Where a member or the authorised nominee appoints two (2) proxies, or where an exempt authorised nominee appoints two (2) or more proxies, the proportions of shareholdings to be represented by each proxy must be specified in order for the appointments to be valid.

6. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under the corporation’s common seal or under the hand of an officer or attorney duly authorised.

7. The instrument appointing a proxy and the power of attorney or other authority, if any, must be deposited at the registered office of the Company at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than forty-eight (48) hours before the time set for holding the Meeting or any adjournment thereof.

(503248-A)

CDS Account No.

No. Shared Held

FORM OF PROXY

No. of shares Percentages

Proxy 1

Proxy 2

Total 100%

For appointment of two proxies, percentage of shareholdings to be represented by the procies:

The Share Registrar

TRICOR INVESTOR & ISSUING HOUSE SERVICES SDN BHD(11324-H)

Unit 32-01, Level 32, Tower AVertical Business Suite,

Avenue 3, Bangsar South,No. 8, Jalan Kerinchi,59200 Kuala Lumpur.

AFFIX STAMPHERE

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