life improving digital innovations - Green Packet... every human must thrive with life improving digital innovations GREEN PACKET BERHAD (534942-H) ANNUAL REPORT 2017 annual report

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annual report 2017

Corporate Information

02 Our Massive Transformative Purpose

03 Our Core Values

04 About Green Packet

06 Corporate Structure

07 Corporate Information

08 Wireless Connectivity

10 5-Year Financial Highlights

12 Message from the Chairman

16 Bringing You Closer

18 Management Discussion and Analysis

22 Digital Financial Evolution

24 Board of Directors’ Profile

30 Key Senior Management Profile

31 Sustainability Statement

50 Discover New Possibilities

Table of ContentsCorporate Governance

52 Corporate Governance Overview Statement

65 Statement on Risk Management and Internal Control

69 Audit Committee Report

72 Statement on Directors’ Responsibility

73 Additional Compliance Information

74 Financial Statements

Other Corporate Information

187 Statement of Shareholdings

190 Notice of Annual General Meeting

194 Statement Accompanying Notice of Annual General Meeting

Form of Proxy

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Green Packet Berhad (534942-H)02

Our Core ValuesCore values set the parameters on the way we work, operate and engage.

At Green Packet, our core values are: Our M T PAt Green Packet, we have adopted a Massive Transformative Purpose to drive and remind us of our existence. By committing to an outrageously huge and aspiration goal, Green Packet is concentrating our resources towards achieving that purpose.

Every Human Must Thrive withLife Improving Digital Innovations.

1. Believe in GRIT Never give up Dedicated to the long term vision Going the distance

2. Let’s COLLABORATE Believe in diversity and working

together Share expertise, experience and

resources Form partnerships with internal and

external stakeholders

3. INNOVATE for a Difference Build things that impact others Open to new ideas Explore, discover, experiment

4. Feel EMPATHY Seek to understand others Show care through our actions Provide meaningful experiences

5. Be COURAGEOUS Nothing is impossible Embrace new ways of doing things Speak up, confront challenges

Annual Report 2017 03

Our Core ValuesCore values set the parameters on the way we work, operate and engage.

At Green Packet, our core values are: Our M T PAt Green Packet, we have adopted a Massive Transformative Purpose to drive and remind us of our existence. By committing to an outrageously huge and aspiration goal, Green Packet is concentrating our resources towards achieving that purpose.

Every Human Must Thrive withLife Improving Digital Innovations.

1. Believe in GRIT Never give up Dedicated to the long term vision Going the distance

2. Let’s COLLABORATE Believe in diversity and working

together Share expertise, experience and

resources Form partnerships with internal and

external stakeholders

3. INNOVATE for a Difference Build things that impact others Open to new ideas Explore, discover, experiment

4. Feel EMPATHY Seek to understand others Show care through our actions Provide meaningful experiences

5. Be COURAGEOUS Nothing is impossible Embrace new ways of doing things Speak up, confront challenges

About Gr�n Packet

Green Packet Berhad (“Green Packet”) is an internationally recognized telecommunications,

media and technology player. Founded in the heart of California’s Silicon Valley in 2000 and

subsequently listed on the Malaysian Stock Exchange in 2005, Green Packet designs and

produces wireless devices, user-centred applications and services that enable the delivery

of valuable digital experiences.

While global business dynamics have changed drastically and in turn transformed value

standards, Green Packet remains committed to serve the end-consumers, organizations and

Governments. Today, Green Packet’s businesses are anchored in three key segments namely

Solutions, Communications and Digital Services (Financial Technology, Internet of Things

and Media).

Green Packet has developed many firsts in the industry for telecommunications operators

globally including the world’s first Multi-Mode LTE Modem and WiMAX Modem that allow

users to experience the best 4G-connection on a single device at anytime, anywhere. We have

also built hundreds of interconnections with global telecommunications, enabling us to be one

of the largest non-telecommunication wholesale operators.

Besides that, Green Packet is also strengthening its digital services portfolio which are media

content, digital payment, smart cities, connected cars and smart agriculture.

Green Packet is headquartered in Kuala Lumpur, Malaysia, a thriving and rapidly developing

country situated at the heart of Southeast Asia, and with firmly anchored businesses

worldwide and offices in Hong Kong, Bahrain, China, Singapore and Taiwan. To date, Green

Packet has served more than 100 clients in over 70 countries worldwide.

For more information about Green Packet, please visit www.greenpacket.com


About Gr�n Packet

Green Packet Berhad (“Green Packet”) is an internationally recognized telecommunications,

media and technology player. Founded in the heart of California’s Silicon Valley in 2000 and

subsequently listed on the Malaysian Stock Exchange in 2005, Green Packet designs and

produces wireless devices, user-centred applications and services that enable the delivery

of valuable digital experiences.

While global business dynamics have changed drastically and in turn transformed value

standards, Green Packet remains committed to serve the end-consumers, organizations and

Governments. Today, Green Packet’s businesses are anchored in three key segments namely

Solutions, Communications and Digital Services (Financial Technology, Internet of Things

and Media).

Green Packet has developed many firsts in the industry for telecommunications operators

globally including the world’s first Multi-Mode LTE Modem and WiMAX Modem that allow

users to experience the best 4G-connection on a single device at anytime, anywhere. We have

also built hundreds of interconnections with global telecommunications, enabling us to be one

of the largest non-telecommunication wholesale operators.

Besides that, Green Packet is also strengthening its digital services portfolio which are media

content, digital payment, smart cities, connected cars and smart agriculture.

Green Packet is headquartered in Kuala Lumpur, Malaysia, a thriving and rapidly developing

country situated at the heart of Southeast Asia, and with firmly anchored businesses

worldwide and offices in Hong Kong, Bahrain, China, Singapore and Taiwan. To date, Green

Packet has served more than 100 clients in over 70 countries worldwide.

For more information about Green Packet, please visit www.greenpacket.com


100% Green Packet International Sdn Bhd (751674-V)

100% Kiple Media Sdn Bhd (1245958-T)

100% Enrich Bonus Sdn Bhd (1180317-H)

100% Packet One Sdn Bhd (738690-H)

100% Worldline Enterprise Sdn Bhd (222332-T)

20% Shenzhen Memo Technology Co. Ltd (440301106159815)

100% Packet Interactive Sdn Bhd (765789-H)

100% Kiple Sdn Bhd (1208256-A)

100% Mobiduu Solutions Sdn Bhd (1152861-X)

80% Webonline Dot Com Sdn Bhd (510377-P)

70% First Wireless Sdn Bhd (728234-V)

32% G3 Global Berhad (f.k.a Yen Global Berhad) (570396-D)

18.9% Webe Digital Sdn Bhd (571389-H)

100% Next Telecommunications Sdn Bhd (393561-A)

100% NGT Networks Pte Ltd (200706773E)

40% Packet Interactive Entertainment (M) Sdn Bhd (1267579-A)

40% Funsea Interactive Entertainment (M) Sdn Bhd (1267581-D)

60% Vivohub Mobile Pte Ltd (201720482G)

100% Green Packet (S) Pte Ltd (200919726H)

100% Green Packet Networks (Taiwan) Pte Ltd (28681597)

100% Green Packet (Shanghai) Ltd (318669)

100% Green Packet (Australia) Pty Ltd (121034553) (Member’s Voluntary Winding-Up)

100% Green Packet Networks S.P.C (63896-1)

MalaysiaSingapore

ShanghaiBahrain Taiwan

Australia


Corporate Structure

100% Green Packet International Sdn Bhd (751674-V)

100% Kiple Media Sdn Bhd (1245958-T)

100% Enrich Bonus Sdn Bhd (1180317-H)

100% Packet One Sdn Bhd (738690-H)

100% Worldline Enterprise Sdn Bhd (222332-T)

20% Shenzhen Memo Technology Co. Ltd (440301106159815)

100% Packet Interactive Sdn Bhd (765789-H)

100% Kiple Sdn Bhd (1208256-A)

100% Mobiduu Solutions Sdn Bhd (1152861-X)

80% Webonline Dot Com Sdn Bhd (510377-P)

70% First Wireless Sdn Bhd (728234-V)

32% G3 Global Berhad (f.k.a Yen Global Berhad) (570396-D)

18.9% Webe Digital Sdn Bhd (571389-H)

100% Next Telecommunications Sdn Bhd (393561-A)

100% NGT Networks Pte Ltd (200706773E)

40% Packet Interactive Entertainment (M) Sdn Bhd (1267579-A)

40% Funsea Interactive Entertainment (M) Sdn Bhd (1267581-D)

60% Vivohub Mobile Pte Ltd (201720482G)

100% Green Packet (S) Pte Ltd (200919726H)

100% Green Packet Networks (Taiwan) Pte Ltd (28681597)

100% Green Packet (Shanghai) Ltd (318669)

100% Green Packet (Australia) Pty Ltd (121034553) (Member’s Voluntary Winding-Up)

100% Green Packet Networks S.P.C (63896-1)

MalaysiaSingapore

ShanghaiBahrain Taiwan

Australia


Corporate Information

BOARD OF DIRECTORS

Tan Sri Datuk Dr. Haji Omar Bin Abdul RahmanChairman/Independent Non-Executive Director

Puan Chan CheongNon-Independent Non-Executive Director

Tan Kay YenChief Executive Officer cum Executive Director

Tan Sri Dato’ Kok OnnNon-Independent Non-Executive Director

Boey Tak KongIndependent Non-Executive Director

A. Shukor Bin S.A. KarimIndependent Non-Executive Director

SHARE REGISTRAR

Symphony Share Registrars Sdn BhdLevel 6, Symphony HousePusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul EhsanHelpdesk No. : 603.7849 0777 Fax No. : 603.7841 8151/8152Helpdesk Email : [email protected]

PRINCIPAL BANKERS

HSBC Bank Malaysia Berhad2 Leboh Ampang50100 Kuala Lumpur

OCBC Bank (Malaysia) BerhadMenara OCBC18 Jalan Tun Perak55000 Kuala Lumpur

AUDITORS

Messrs Crowe HorwathChartered AccountantsLevel 16 Tower CMegan Avenue II12 Jalan Yap Kwan Seng50450 Kuala LumpurTel No. : 603.2788 9999Fax No. : 603.2788 9998

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad

Stock Name : GPACKET Stock Code : 0082

WEBSITE

www.greenpacket.com

AUDIT COMMITTEE

Boey Tak KongChairmanTan Sri Datuk Dr. Haji Omar Bin Abdul RahmanA. Shukor Bin S.A. Karim

NOMINATION COMMITTEE

Tan Sri Datuk Dr. Haji Omar Bin Abdul RahmanChairmanBoey Tak KongA. Shukor Bin S.A. Karim

REMUNERATION COMMITTEE

Tan Sri Datuk Dr. Haji Omar Bin Abdul RahmanChairmanA. Shukor Bin S.A. KarimTan Kay Yen

COMPANY SECRETARY

Tai Siew May (MAICSA 7015823)

REGISTERED OFFICE/HEAD OFFICE

B-23A-3, The Ascent ParadigmNo. 1, Jalan SS 7/26A, Kelana Jaya47301 Petaling JayaSelangor Darul EhsanTel No. : 603.2714 6288Fax No. : 603.2714 6289

Green Packet is mainly involved in creating seamless and unified connectivity by supplying indoor and outdoor devices for fixed and mobile wireless internet to clients from all over the world. In a world where connectivity is at the centre of everything, Green Packet prides in providing uninterrupted connectivity using the most advanced technologies and enhancing its competitive advantages and opportunities for telecommunications operators while allowing the end-users to enjoy the best user experience.

Wireless Connectivity

Green Packet is mainly involved in creating seamless and unified connectivity by supplying indoor and outdoor devices for fixed and mobile wireless internet to clients from all over the world. In a world where connectivity is at the centre of everything, Green Packet prides in providing uninterrupted connectivity using the most advanced technologies and enhancing its competitive advantages and opportunities for telecommunications operators while allowing the end-users to enjoy the best user experience.

Wireless Connectivity


5-Year Financial Highlights

2012 2014* 2015** 2016 2017MYR ‘000 MYR ‘000 MYR ‘000 MYR ‘000 MYR ‘000

�Profitability

Revenue 565,999 874,231 587,892 366,251 358,944Profit/(Loss) after taxation (118,365) (224,870) (25,484) 70,664 (16,578)

Key Balance Sheet Items

Total Assets 1,042,884 907,339 346,294 460,625 555,176Total Liabilities 828,274 885,850 288,003 330,483 385,694Total Equity 214,610 21,489 58,291 130,142 169,482No. of Shares in Issue 690,405 690,409 690,447 690,447 758,721

Segmental Information

Revenue- Solutions 146,415 200,068 252,397 153,290 126,323- Broadband Services 337,437 444,060 61,617 - -- Communications/Voice Services 128,663 256,982 318,438 234,499 256,458- Digital Services - - - - 2,327- Elimination (46,516) (26,879) (44,560) (21,538) (26,164)

565,999 874,231 587,892 366,251 358,944

Profit�Before�Taxation�by�Pillar

- Solutions 16,883 14,915 (8,042) (7,031)3 (2,584)- Broadband Services (100,755) (123,156) 108,793 - -- Communications/Voice Services 2,527 8,149 15,283 7,034 1,309- Digital Services - - - - (5,946)- Finance Cost (36,667)1 (101,891)1 (30,036)1 (16,081)1 (17,667)1

- Share of Results of Associates - - (116,961)2 (56,617) 2 (2,620)- Gain on dilution and fair value adjustments - - - 147,638 10,082

(118,012) (201,983) (30,963) 74,943 (17,426)

* 18 months financial period ended 30 June 2014

** 18 months financial period ended 31 December 2015 1 Notional finance costs due to interests cost imputed on Irredeemable Convertible Preference Shares-deferred Liabilities

Component. For 2015 and 2016, the notional finance cost was due to interest for Exchangeable Medium Term Notes; Guaranteed Redeemable Convertible Exchangeable Bonds ("GCEB"); term loan and vendor financing.

2 For 2015, the share of loss of associate is from Packet One Networks Sdn Bhd (now known as Webe Digital Sdn Bhd (”Webe”)). For 2016, the share of loss of associates are from Webe and G3 Global Berhad (formerly known as Yen Global Berhad).

3 For 2016, there is impairment of development costs, goodwill, intellectual property and inventories of RM12,566,000.


REVENUE (MYR’000)

* 18 months financial period ended 30 June 2014 ** 18 months financial period ended 31 December 2015

‘16 ‘17

366,

251

358,

944

TOTAL ASSETS (MYR’000)

TOTAL LIABILITIES (MYR’000) TOTAL EQUITY (MYR’000)

‘15**

587,

892

‘14*

874,

231

‘12

565,

999

‘16 ‘17

460,

625

555,

176

‘15**

346,

294

‘14*

907,

339

‘12

1,04

2,88

4

‘16 ‘17

330,

483

385,

694

‘15**

288,

003

‘14*

885,

850

‘12

828,

274

‘16 ‘17

130,

142

169,

482

‘15**

58,2

91

‘14*

21,4

89

‘12

214,

610

5-Year Financial Highlightscont’d


Message from the Chairman

DEAR VALUED SHAREHOLDERS,

On behalf of the Board of Directors of Green Packet Berhad (“Green Packet” or “the Group”), I am pleased to present to you the Annual Report and Audited Financial Statements for the financial year ended 31 December 2017 (“FYE2017”).


Message from the Chairmancont’d

Message from the Chairman

PERFORMANCE REVIEW

The year of 2017 was marked by a number of uncertainties in the global economic environment. Weak international trade and subdued investment conspired to slow world growth to its weakest pace since 2009. According to the latest projections by the World Bank, world GDP grew by 3 percent in 2017 from a sluggish rate of 2.4 percent in 2016.

Despite these headwinds, our efforts in re-aligning our business focus to the industry demands have helped us to stay resilient and to produce a relatively respectable performance in the face of these challenges.

The Group’s FYE2017 revenue decreased by 2.2% to RM359 million, where our Communications business was the main contributor to the group revenue. For the same period, Green Packet reported loss after tax of RM 16.58 million. The lower earnings was mainly due to initial business development costs incurred for our new Digital Services business.

NEW BUSINESS VENTURES

Fintech industry has a great potential in Malaysia given its attractive entrepreneural space, strong underlying market, good business-to-consumer model and a wide coverage of high speed internet access. Over the past few years, Malaysians are increasingly embracing e-payments device, notably following the greater adoption of smartphones and the introduction of more mobile-based payment platforms. Green Packet began its journey into fintech business after the acquisition of Webonline Dot Com Sdn Bhd in early 2017; and rolled-out the Group’s payment gateway and e-wallet service under the brand “Webcash” and developed its own Kiple application, “kiplePay”, that functions as mobile e-wallet application, offering a dynamic platform for both consumers

and merchants. Meanwhile, the takeover of mobile application developer Mobiduu Solutions Sdn Bhd in July 2017 enables Green Packet to provide an end to end solution for its services as Mobiduu has developed a proven and ready m-commerce and loyalty platform.

With Webcash, Kiple and Mobiduu, Green Packet is able to integrate the various solutions into one integrated technology platform to offer a complete solution with the mobile first front-end, e-wallet and a payment gateway back-end. The Group will continue to invest in marketing and promotion to attract more users and merchants in order to capture larger market share. Going forward, Green Packet expects fintech business to contribute positively to the Group’s revenue in the next 3 years.


In December 2017, Kiple Media Sdn Bhd, a wholly owned subsidiary of Green Packet inked a Collaboration Agreement with Asia Television Digital Media Sdn Bhd (ATV), a wholly owned subsidiary of Co-Prosperity Holdings Limited, a company listed on the Hong Kong Stock Exchange to provide dedicated content solutions in both free-to-air (FTA) as well as content to Satellite TV, Internet Protocol television (IPTV) and Over the top (OTT).

ATV will invest HK$50 million (RM26 million) into Kiple Media and then jointly operate three broadcasting channel television in Malaysia which may comprise of Chinese language movie channel, Chinese language general entertainment channel and home shopping channel.

On 23 January 2018, Green Packet entered into a frame contract with MYTV Broadcasting Sdn Bhd, the concession holder for the national digital

terrestrial television (DTT) rollout, to supply the DVB-T2 set-top boxes (STB). The contract is worth RM272 million whereby 3.6 million STB will be distributed to selected Malaysian households under the Government subsidy programme for DTT services and is expected to contribute positively to Green Packet’s FYE2018 earnings until the expiry of the Contract. The DTT project is a government initiative aimed to provide the public with high quality TV and radio broadcasting services which is congruent to Malaysia’s (and ASEAN’s) objective of achieving analogue switch-off (ASO) between 2015 and 2020.

The collaboration with ATV and contract from MYTV eventually completes Green Packet’s long term strategy to provide and deliver digital services encompassing telecommunications, media and technology; and we believe this will provide strong contribution to the Group’s future earnings.


CORPORATE HIGHLIGHTS

In September 2017, Green Packet has acquired additional 82.5 million rights shares in G3 Global Berhad (formerly known as Yen Global Berhad) for RM12.38 million. This has effectively raised Green Packet’s shareholding in G3 from 22% to 32%. Through G3’s wholly owned subsidiary, Atilze Digital Sdn Bhd, Green Packet has widen its exposure into the Internet of Things (IoT) business. Atilze specialises in IoT solutions with end-to-end delivery of connected devices, IoT networks and data-driven applications; covering Connected Vehicles, Smart Homes, Smart Building, Intelligent City and Precision Agriculture.



CORPORATE SOCIAL RESPONSIBILITY

During the financial year, the Group continued with its corporate social responsibility agenda. In December 2017, the Group brought the children from Rumah Amal Jireh and treated them to Subway, highlighting the importance of having a good dietary habits at a young age. The children were taught on healthy eating through educational games and quizzes.

APPRECIATION

This is indeed an exciting time to be part of Green Packet. We have a clear strategic plan aimed at driving sustainable long-term growth delivered by a fully-engaged and talented team. On behalf of the Board, I would like to thank all our employees for their hard work and commitment, and also their enthusiasm in embracing the new strategies.

I would also like to express my appreciation to our valued shareholders, business associates, government agencies, financial institutions and other stakeholders for their unwavering support. Thank you for your efforts, and I wish us all continued and sustainable success in the future. We look forward to 2018 and the continuing growth in Green Packet.

TAN SRI DATUK DR. HAJI OMARBIN ABDUL RAHMANChairman24 April 2018

OVERALL

As we move forward to a greater 2018, the Group had recently launched the Massive Transformative Purpose or better known as MTP. Every Human Must Thrive with Life Improving Digital Innovations. With this in mind, we will continue to innovate and offer better innovations to improve the living standard of everyone with advanced technologies and solutions. For the coming financial year, we are confident that we will be able to soar to greater heights with our focus primarily in digital innovation and transformation while our core businesses will continue to contribute significantly.


Primarily involved in the international wholesale of voice minutes and data bandwidth, Green Packet provides reliable and cost effective voice and data interconnection services to telecommunications operators both international and local. As Green Packet holds firm to its belief, it continues to provide connectivity to the ever growing migrant segments within Asia Pacific and expands to other relevant services for this segment to connect, transact and engage with their loved ones at home via e-Services platform.

Bringing you closer

Primarily involved in the international wholesale of voice minutes and data bandwidth, Green Packet provides reliable and cost effective voice and data interconnection services to telecommunications operators both international and local. As Green Packet holds firm to its belief, it continues to provide connectivity to the ever growing migrant segments within Asia Pacific and expands to other relevant services for this segment to connect, transact and engage with their loved ones at home via e-Services platform.

Bringing you closer


Management Discussion and Analysis

GROUP’S BUSINESS STRUCTURE

Green Packet Berhad (“Green Packet”) and its subsidiaries (collectively referred to as “the Group”) are principally engaged in the business of investment holdings, research, development, manufacturing, marketing and distribution of wireless telecommunication, media and internet of things products, communication services, consumer digital services and other high technology products and services.


Management Discussion and Analysiscont’d

OVERVIEW OF THE GROUP’S BUSINESS

The Group is organised into 3 main reportable divisions as follows:-

Solutions Communications Digital Services

Research, development, marketing and distribution of wireless networking and

telecommunication products and solutions.

Provision of total communication services, solutions and products.

Provision of Financial Technology (“Fintech”),

Internet of Things (“IoT”)and Media and Contents.

While the Solutions and Communications divisions are contributing majority of the revenue and earnings to the Group for FYE2017, the new Digital Services division will further enhance on the overall technology ecosystem of our solutions and services offerings. They are expected to provide the growth potential to the Group in the years to come.

FINANCIAL REVIEW

Group’s Financial Performance

The Group registered an earnings before interest, tax and depreciation (“EBITDA”) of RM6.05 million for FYE2017 and a revenue of RM358.94 million contributed by our Solutions, Communications and Digital Services business. The Group registered a loss after tax (“LAT”) of RM16.58 million for FYE2017 as compared to a profit after tax (“PAT”) of RM70.7 million for the year ended 31 December 2016.

This was mainly due to higher business development costs incurred to build the new Digital Services business coupled with weaker EBIDTA from the Solutions and Communications business. Compared to the previous year, the Group registered a one-off gain on dilution of investment of RM49.4 million and fair value gains on reclassification from interest in associate to long-term investment of RM98.2 million in Webe Digital Sdn Bhd (“Webe”).

The FYE2017 will be a full year of non-impact from the share of losses in Webe as the Group ceased to equity account our investment in Webe as at 31 July 2016 when Webe ceased to be an associate company of Green Packet.

Management Discussion and Analysis

OPERATIONS REVIEW

Solutions Business

The Solutions business registered a lower revenue of RM101.19 million and a loss before interest, tax and depreciation ("LBITDA") of RM0.81 million for FYE2017. This was mainly due to lower sales from the ASEAN region. The lower LBITDA for Solutions business for the last financial quarter in FYE2017 was also affected by foreign currency exchange losses due to the weaker USD against the MYR.

We continue to expand our product portfolio, offering high quality and simplicity features in products for our consumers. In 2017, we upgraded our product portfolio by adding Category 6 or LTE Advanced products which provide amongst other benefits, carrier aggregation for increased bandwidth throughput. We also launched a range of new IoT products that were developed under the “Roadmio” brand. Targeting to be sold through our telecommunication and enterprise customers, Roadmio is a total solution for the fleet telematics industry. It offers vehicle IoT gateway, sensors, smartphone app and cloud-based data analytics, all for the purpose of improving driving safety, reduce fuel expense, predictive maintenance as well as enhancing vehicle efficiency.


Communications Business

The Communications business registered an improved revenue of RM256.02million and EBITDA of RM2.28 million for FYE2017. This was mainly due to improvement in the revenue contribution from ASEAN and Middle East as we continue to expand our customer base globally. However, the EBITDA was low for the year mainly due to lower gross profit margins from the Communications business.

We continue to enhance our services range which includes offering wholesale data services and new voice services to our retail customers in Singapore. Adding to that, we also launched Vivohub, a mobile services application for foreign workers where they can conveniently connect to their loved ones’ and have good quality calls at anytime, anywhere while enjoying the lowest calling rates in the market.

Digital Services Business

Media

Worldline Enterprise Sdn Bhd ("WESB"), a wholly owned subsidiary of Green Packet invested 20% equity interest in Shenzhen Memo Technology Co Ltd (“Memohi”) on 17 February 2017 for an investment consideration of RMB 10.0 million. The principal business of Memohi is in the design, aggregation and delivery of seamless video watching experience to the living room combining cost effective hardware and an interactive software platform to transform video watching.

On 23 January 2018, the Group entered into a frame contract with MYTV Broadcasting Sdn Bhd for the design, supply, assembly, testing and acceptance of DVB-T2 set-top boxes (“STB”). The Contract is expected to contribute positively to the earnings and net assets per share of the Company for the financial years ending 31 December 2018 onwards until the expiry of the Contract.

Fintech

On 6 January 2017, Packet Interactive Sdn Bhd ("PISB"), a wholly owned subsidiary of Green Packet completed the investment in Webonline Dot Com Sdn Bhd (“WOL”) for RM6.0 million and invested a further RM3.0 million as a working capital to our maiden investment in building the Fintech business.

The Fintech business registered a revenue of RM1.73 million and LBITDA of RM4.56 million for FYE2017. This was mainly due to continued investment in business development, staff, marketing, merchants and user acquisition costs incurred to build the business.

In addition to that, the Group continued to strengthen its Fintech payment platform via the acquisition of Mobiduu Solutions Sdn Bhd (“Mobiduu”) for a total purchase price of RM4.0 million during the year. Moving forward, the Group will continue to innovate its e-wallet solutions beyond payment and focus extending the payment solutions to the home, education and vehicle segments.

Internet of Things

The Group made its maiden investment into IoT in FYE2016 through our acquisition of 22% equity interest in G3 Global Berhad (formerly known as Yen Global Berhad). G3’s wholly owned subsidiary, Atilze Digital Sdn Bhd (“Atilze”) develops and markets IoT solutions and other telecommunication products in South East Asia. In FYE2017, the Group increased its equity interest in G3 to 32%.

The Group equity accounted its share of losses from G3 of RM2.56 million in FYE2017. G3 continues to invest to develop its IoT solutions in areas such as smart cities, smart agriculture and connected car solutions in FYE2017.

CAPITAL MANAGEMENT

For the analysis of Total Assets, Total Liabilities, Total Equity and No. of Shares in issue for the last 5 years, they are disclosed in the 5-year Financial Highlights on page 11. The Group had not declared any dividends over the last 5 years.

CORPORATE EVENTS

During the FYE2017, the Company increased its issued shares from 690,446,719 to 758,720,619 by way of an issuance and allotment of 68,273,900 new ordinary shares at an issue price of RM 0.265 each.



OUTLOOK

Current Core Businesses

Solutions and Communications

The Group’s core business divisions of Solutions and Communications are expected to continue to be our key business drivers.

In 2017, we secured a greater geographical reach in markets for 4G broadband products and we will continue to grow our global customer footprint while developing new products and services to cross sell to our existing customers. This is intended with the launch of our Roadmio product and services that integrates fleet telematics, on board vehicle sensors, which aims to improve driving safety.

Adding to that, we are targeting growth in wholesale data services and mobile services application with the launch of Vivohub products and services.

The Group is primarily focused on the ASEAN market with Middle East contributing positively. Moving forward, Europe and the Americas are the target for geographic expansion for the Group’s core business.

Digital Services Business

Internet of Things

As technology evolves and progresses forward, the IoT industry will see a boom in growth.

The growth in the IoT industry will be mainly driven by the increase in the usage of mobile devices, greater access to broadband Internet, smart agriculture and smart city projects, growth in the sales of sensors and reduction in price of sensors as well as the availability of low powered wireless technology.

In view of the robust outlook of IoT globally and support from many IoT initiatives that the Malaysian government is driving, we are confident with our investment in IoT to provide a recurring and steady income stream to us over the medium to long term.

Fintech

Mobile payment solutions are one of the growing sectors in Malaysia. We can see that the interest towards the fintech industry is growing rapidly with more and more Malaysians embracing e-payments and the usage of mobile wallets has become more common. In these coming months, we will gradually rollout more Kiple applications in different vertical industries, offering an integrated e-wallet and payment gateway. We are optimistic that our investment in the fintech platform will be fruitful in near future.

Media and Contents

On the media front, the Group will continue to reach other geographical markets for its media hardware and content platform to end consumers. In Malaysia, the Group will focus on executing its media content joint venture to deliver on the DTT free-to-air channels or through IPTV platforms.

OVERALL

Our current businesses will eventually complete the Group’s long-term strategy to provide and deliver digital services encompassing telecommunications, media and technology.

As we move forward, we will continue to focus on identifying potential investments to enhance our digital services offerings in areas such as IoT, Fintech and Media & Contents that are complementary and synergistic to our existing business while at the same time, we will continue to focus on both of our core Solutions and Communications businesses. Barring any unforeseen circumstances, we are confident that we will be able to sustain our financial performance for the coming financial year.

On behalf of the Management team, I would like to express our gratitude to the Board of Directors and shareholders for their confidence and support. I would also like to record my sincere thanks and appreciation to my team and colleagues across the Group for their dedication and contribution throughout the year. I am confident that each of our businesses is well positioned to deliver growth, consistent returns and value to all our stakeholders.

TAN KAY YENChief Executive Officer24 April 2018



Green Packet is constantly moving forward with new thinking and new ways of improving lives hence that leads to the development of Kiple application which functions as an e-wallet and payment gateway. As Green Packet is committed to help its customers to embrace these changes through innovation, Kiple application comes with numerous features for users to enjoy their lifestyle with thoughtful spending. In a long run, this will create, promote, build and support a collaborative ecosystem towards improving the life experience of many.

Digital �nancial Evolution


Green Packet is constantly moving forward with new thinking and new ways of improving lives hence that leads to the development of Kiple application which functions as an e-wallet and payment gateway. As Green Packet is committed to help its customers to embrace these changes through innovation, Kiple application comes with numerous features for users to enjoy their lifestyle with thoughtful spending. In a long run, this will create, promote, build and support a collaborative ecosystem towards improving the life experience of many.

Digital �nancial Evolution


TAN SRI DATUK DR. HAJI OMAR BIN ABDUL RAHMANChairman/Independent Non-Executive Director

Gender : MaleNationality : MalaysianAge : 85Date of Appointment : 25 June 2004Length of Service : 13 years 11 monthsBoard Attendance in FYE 2017 : 6/6Date Last Re-appointed : 31 May 2017

Board of�Directors’�Profile

Membership of Board Committees:Remuneration Committee (Chairman)Nomination Committee (Chairman)Audit Committee

Qualification:�Tan Sri Omar graduated in veterinary science from the University of Sydney (1958); obtained a Certificate in Pathology from the University of Queensland (1959) and a Ph.D. from the University of Cambridge (1966). In addition he was awarded the following honourary degrees:

Hon DVSc (Melbourne, 1985); Hon Doctor of the University (Stirling, 1986); Hon Doctor of Laws (Guelph, 1989); Hon Doctor of Laws (Bristol, 1993); Hon DSc (Queensland, 1995); Hon DSc (UTM, 1996); Hon DSc (UKM, 1998); Hon DSc (UPM, 1999).

Working�Experience:Tan Sri Omar started work as a Research Officer in the Veterinary Research Institute, Ipoh in 1960 and was promoted to Senior Research Officer in 1966.

In 1972, he was appointed as the Founding Dean of the Faculty of Veterinary Medicine and Animal Sciences and the first professor at the newly established Universiti Pertanian Malaysia (UPM), now University Putra Malaysia. He played a major role in the establishment phase of the university. His last position was as Deputy Vice Chancellor Academic Affairs. He is now Professor Emiratus of the University. In 1984, Tan Sri Omar was appointed to the new position of Science Advisor in the Prime Minister’s Department. As Science Advisor, he served on a number of national committees and initiated many programmes for enhancing technology management, increasing funding for Research & Development (“R&D”) and for commercialization of the results of research. He was the founder chairman of Technology Park

Malaysia Corporation (“TPM”), the Malaysian Industry-Government Group for High Technology (MIGHT), Composite Technology (Research) Malaysia Sdn Bhd (CTRM) and Malaysian Technology Development Corporation (MTDC). Tan Sri Omar is the founding and current chairman of the London-based Commonwealth Partnership for Technology Management Ltd (CPTM), Founding Fellow of the Islamic World Academy of Sciences, a Fellow of the World Academy of Sciences (TWAS), an Honorary Fellow of the Academy of Sciences of Kyrgyzstan. He was a member of the United Nations Advisory Committee on Science and Technology for Development, the Executive Committee for OIC Ministerial Standing Committee on Scientific and Technological Cooperation and of the UNESCO’s International Scientific Council for Science and Technology Policy Development. He is the past President of the Federation of Asian Scientific Academies and Societies (FASAS), the past President of The Science Council of Asia and a former member of UNESCO Committee on Ethics of Science and Technology (COMEST).

Tan Sri Omar was the Founding President and current Senior Fellow of the Academy of Sciences Malaysia. He is also currently a member of the External Advisory Council of MAHSA University and a member of the Council of UCSI University.

Present Directorship in Public Company and Listed Entity: None

Declaration:• No family relationship with any director and/or

major shareholder of the Company.• No conflict of interest with the Company.• No conviction of offences within the past five years.• No public sanction or penalty imposed by the

relevant regulatory bodies during the financial year.


PUAN CHAN CHEONGNon-Independent Non-Executive Director

Gender : MaleNationality : MalaysianAge : 49 Date of Appointment : 1 November 2003Board Attendance in FYE 2017 : 6/6Date Last Re-appointed : 31 May 2017

Board of Directors’�Profilecont’d

Membership of Board Committees: Nil

Qualification:Puan Chan Cheong (better known as CC Puan) holds a Bachelor of Science in Business Administration with a double major in Management Information Systems and Finance from University of Nebraska-Lincoln, USA.

Working�Experience:Puan is the founder of Green Packet Berhad, a company that was established in the Silicon Valley in the year 2000 and is now headquartered in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad (the Malaysian Bourse).

Green Packet is a multinational digital technology group with deep knowledge of the challenges faced by telecommunications companies (“Telcos”). It helps Telcos worldwide to compete and succeed with business-driven wireless solutions and the acceleration of their digital ambitions.

Green Packet serves Telcos of any scale with the provision of 4G wireless connectivity devices, wholesale voice and data, and digital services. In select markets, Green Packet via its digital collective cum subsidiaries serve end-consumers, businesses, and Governments directly with user-centered applications: These range are from media content delivery, digital payment, smart home solutions, connected car and even smart agriculture.

The Company is also a major shareholder and strategic partner in Webe Digital Sdn Bhd (“Webe”), the latest and most exciting 4G mobile operator in Malaysia, along with Malaysia’s leading broadband provider, Telekom Malaysia (“TM”) and SK Telecom, South Korea’s largest mobile carrier.

Webe, formerly known as P1, was established by Green Packet in August 2008. From a green-field WiMAX operator, P1 became Malaysia’s first and leading wireless broadband operator with the largest network and subscriber base. In September 2014, P1 attracted the investment of TM, which subsequently became its holding company.

Puan, who was P1 CEO then, engineered the colossal tripartite partnership to pave way for P1’s LTE transition. He was earmarked to lead Webe as its CEO until 2016 to maximize partnership synergies and to ensure that Webe becomes a viable player in a highly competitive mobile LTE market. During this critical phase, he established the blueprint for Webe’s future development, and led key strategic transformations in product development, brand & culture, people strategy, and operational readiness. Thereafter, he transitioned to the board of Webe where he continues to shape the company’s progress.

Previously, as Green Packet Group Managing Director for 14 years, Green Packet Solutions became the world’s third largest WiMAX device provider with 122 clients in 66 countries; and P1’s success propelled it to become a showcase for other green-field operators globally.

Puan is an astute entrepreneur and a visionary with more than 20 years of diversified business experience. He has a strong success track record in consulting, and the development and management of large-scale telecommunications, infrastructure and property projects internationally. His personal accolades include Malaysia’s coveted PIKOM Technopreneur of the Year award.

He sits on the board of Green Packet and several of its subsidiaries where he plays an active advisory role especially in the shaping of the Group’s digital agenda.

Present Directorship in Public Company and Listed Entity: None

Declaration:• No family relationship with any director and/or major

shareholder of the Company.• No conflict of interest with the Company.• No conviction of offences within the past five years.• No public sanction or penalty imposed by the



TAN KAY YENChief Executive Officer cum Executive Director

Gender : MaleNationality : MalaysianAge : 46Date of Appointment : 7 October 2014 Board Attendance in FYE 2017 : 6/6Date of Election : 10 December 2014

Membership of Board Committees: Remuneration Committee

Qualification:Tan Kay Yen (better known as Kay Tan) holds a Bachelor of Science in Business Administration with a double major in Finance and Management Information System from University of Nebraska-Lincoln, USA in 1993.

Working�Experience:Tan is a Key Senior Management of the Company. He has more than 24 years of experience in sales, operations and management holding positions in the financial, IT, telecommunications and technology sector. He started his career with the Arab Malaysian Group in the financial sector. Following that he joined the IBI group of companies, a diverse IT firm in 1996 to hold a range of leadership positions. Prior to his appointment as Chief Executive Officer cum Executive Director of Green Packet in 2014, he was the Company’s Group Chief Operating Officer since 2006 and Acting Group Chief Financial Officer until 31 October 2014.

Present Directorship in Public Company and Listed Entity: G3 Global Berhad (formerly known as Yen Global Berhad)






TAN SRI DATO’ KOK ONNNon-Independent Non-Executive Director

Gender : MaleNationality : MalaysianAge : 66 Date of Appointment : 15 December 2000 Board Attendance in FYE 2017 : 5/6Date Last Re-elected : 26 May 2016

Membership of Board Committees:Nil

Working�Experience:Tan Sri Dato’ Kok Onn is the Managing Director cum Chief Executive Officer of Gadang Holdings Berhad, a company listed on the Second Board of Bursa Malaysia Securities Berhad (“Bursa Securities”) which was subsequently transferred to the Main Board of Bursa Securities on 24 December 2007.

He was formerly the Group Chief Executive Officer of Bridgecon Holding Berhad (“Bridgecon”). He transformed Bridgecon from a construction company to a group with activities involving property and resort development, toll expressway operations, manufacturing of ready-mixed concrete and quarrying. His exposure in the construction industry began in 1972 and has been involved in the industry for more than 45 years. He has gained extensive knowledge and experience in most aspects of civil and structural engineering schemes with various projects in Malaysia, China, Middle East and South Africa. He was also the person who transformed Bridgecon from a pure construction company to activities involving manufacturing and supply of ready-mixed concrete, concrete pumping, quarrying, property and resort development and on international aspect where he spearheaded Bridgecon’s venture into three toll expressway.

Present Directorship in Public Company and Listed Entity: Gadang Holdings Berhad






A. SHUKOR BIN S.A KARIMIndependent Non-Executive Director

Gender : MaleNationality : MalaysianAge : 61 Date of Appointment : 21 May 2008 Length of Service : 10 yearsAttendance in FYE 2017 : 6/6Date Last Re-elected : 26 May 2016

Membership of Board Committees: Audit CommitteeNomination Committee Remuneration Committee

Qualifications:�Shukor graduated with a BSc (Hons) in Computation from the University of Manchester, Institute of Science and Technology, UK.

Working�Experience:Shukor began his career with the Government of Malaysia, Statistics Department in 1979. He later joined Sapura Group in 1982 where he was one of the founding members of Sapura Information Technology (IT) and developed Sapura’s IT business to be one of Malaysia’s biggest IT companies with more than 1,000 employees in ASEAN and revenues exceeding RM600 million per annum in the late nineties with more than 20 subsidiaries involved in various aspects of the IT industry, from sales and distribution, systems integration to software development and IT education.

He was involved in many high profiles IT projects in Malaysia and abroad. Amongst others, he was the Managing Director of STH Consortium which implemented the Total Airport Management System in KLIA. He was also involved in the Design and Implementation of the Cable plant for KLCC and in E- Government projects for the implementation of Generic Office Environment for the Government of Malaysia.

Besides that, he was also an Executive Director in Telecom Smart School Sdn Bhd, which implemented the Smart School Project for the Ministry of Education in Malaysia. He was directly involved in the setting up of the Asia Pacific Institute of Information Technology (APIT) [now known as Asia Pacific University (APU)] which is today one of Malaysia’s biggest IT education institute. Additionally, he was highly involved in the development of the IT Industry in Malaysia and had served as a Chairman of Persatuan Industri Komputer dan Multimedia, Malaysia (PIKOM) from 1993 to 1995 and a Director in the Multimedia Development Corporation (now MDEC) for 2 years in the mid 1990s.

He was the Chairman of Packet One Networks (Malaysia) Sdn Bhd, (now known as Webe Digital Sdn Bhd), a wholly owned subsidiary of Green Packet from 2011 to 2014. Present Directorship in Public Company and Listed Entity: Theta Edge Berhad Declaration:• No family relationship with any director and/or





BOEY TAK KONGIndependent Non-Executive Director

Gender : MaleNationality : MalaysianAge : 64Date of Appointment : 11 March 2005 Length of Service : 13 years 2 monthsBoard Attendance in FYE 2017 : 5/6Date of last Re-election : 10 December 2014

Membership of Board Committees:Audit Committee (Chairman)Nomination Committee

Academic/Professional�Qualifications:• Chartered Accountant of the Malaysian Institute of

Accountants• Fellow of the Association of Chartered Certified

Accountants (UK)• Associate of the Institute of Chartered Secretaries

& Administrators (UK)• Member of the Institute of Marketing Malaysia• Member of the Malaysian Institute of Management

Working�Experience:Boey has over 23 years of broad senior management experience in financial management, internal audit, general management, corporate affairs and regional business development with 5 major listed groups with listings in Malaysia, Singapore, United Kingdom, Australia and New Zealand.

His industry knowledge covers financial services, industrial equipment assembly and distribution, general insurance, textile manufacturing, property development, infrastructure project management and integrated timber processing and marketing business.

Presently, he is the Managing Director of Terus Mesra Sdn Bhd, a governance and leadership development training company.

Present Directorship(s) In Listed Entity:Dutch Lady Milk Industries Berhad Censof Holdings BerhadGadang Holdings BerhadHo Hup Construction Company Berhad






LIEW KOK SEONGChief Financial Officer

Gender : MaleNationality : MalaysianAge : 49 Date of Appointment : 1 June 2016

Key Senior�Management�Profile

Qualification:�Liew is a member of the Malaysian Institute of Accountants

Working�Experience:Liew started his career in 1992 with KPMG. Between 1997 and 2001, he joined a construction company for a brief period and subsequently joined an IT company as a Senior Manager of Finance. In 2001, he joined The Store Corporation Berhad as Assistant General Manager of Finance. In 2006 to September 2012, he was with Green Packet. He joined Cuscapi Berhad as CFO in 2012. Subsequently, he was appointed as CFO of OCK Group Berhad in 2014.

Liew has over 24 years of experience in the areas of corporate finance, management accounting and reporting, business planning, treasury affairs and taxation. Throughout his career, he has served in various public listed companies and industries including IT, telecommunication, retail, property and construction and audit.

Present Directorship In Public Companies and Listed Entity:G3 Global Berhad (formerly known as Yen Global Berhad)





ABOUT THIS STATEMENT

Our maiden Sustainability Statement (the “Statement”) covers the operations of Green Packet Berhad (“Green Packet” or the “Company”) and the following active subsidiaries located in Malaysia and Singapore, across three business segments namely Solutions, Communications and Digital Services (Financial Technology and Internet-of-Things):

• Green Packet International Sdn. Bhd. • NGT Networks Pte. Ltd. • Kiple Sdn. Bhd.

Our statement reporting period is from 1 January 2017 to 31 December 2017, unless otherwise stated. This Statement has been prepared with reference to the Sustainability Reporting Guide and Toolkits, issued by Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

As the first step on the journey towards establishing a robust sustainability framework – this year, we focused on creating awareness on sustainability concepts and principles amongst internal stakeholders and enhancing the existing governance structure for managing our sustainability performance. This includes processes related to identifying, monitoring, data collating and reporting on the Company’s sustainability performance. Admittedly, the initial phase offered a steep learning curve as we are on the transition of progressing from providing a narrative to a more comprehensive and measurable sustainability performance disclosures.

Sustainability Statement

DIGITAL INDUSTRY TRANSFORMATION & OUR SUSTAINABILITY ASPIRATION - IMPROVING LIVES WITH DIGITAL INNOVATIONS

Organisational�context

Connectivity is no longer an option, but a necessity that is weaving its way into every aspect of our lives in the digital era. With the current exploding trend in the Information & Communication Technology (“ICT”) sector, we are now witnessing the existence of over 8.2 billion mobile connections and the number of connected devices is expected to be seven times the human population by year 20201. This is evident with the increasing use of mobile devices, wider penetration rate of the Internet and social media penetration in Malaysia, in making Malaysia a fertile ground for new digital growth.

Mobile penetration: 143.7 percent per 100

inhabitants in Malaysia, with multi-handset ownership per user

Internet penetration: 65.8 percent of

Malaysians are Internet users, with 59 percent are

active users

Social media penetration: 45 percent, with close

to one in every two Malaysians are active in

social networking

1 “Decoding disruptions: How companies can navigate a world of constant change”. KMPG International. 2017


Ushering Malaysia towards an era of digital empowerment

Internet of Things (“IoT”) Strategic Roadmap

Focusing on ICT as an imperative enabler for a knowledge economy, especially in the areas of industry, infrastructure, human capital and digital inclusion.

Eleventh Malaysia Plan2016 – 2020 (“11MP”)

Our Massive Transformative

Purpose

Legend:

United Nations Sustainable Development Goals (“SDGs”)

Focus on Emerging Countries

Digital Innovations

Joint Aspirations

SDG#1 SDG#9 SDG#10 ST#1 ST#5 ST#6

ST#3ST#2ST#1

1

1

1

10

10

9

9

9

9

SDG#1 SDG#4 SDG#5 SDG#8

SDG#12SDG#9

SDG#17 ST#5 ST#6SDG#9

SDG#16 SDG#17 ST#4 ST#5 ST#6

ST#3

SDG#1: No Poverty

SDG#4: Quality Education

SDG#5: Gender Equality

SDG#8: Decent Work and Economic Growth

SDG#9: Industry, Innovation and Infrastructure

SDG#10: Reduced Inequalities

Strategic Thrust #1: Enhancing inclusiveness towards an equitable society

Strategic Thrust #2: Improving wellbeing for all

Strategic Thrust #3: Accelerating human capital development for an advanced nation

Strategic Thrust #4: Pursuing green growth for sustainability and resilience

Strategic Thrust #5: Strengthening infrastructure to support economic expansion

Strategic Thrust #6: Re-engineering economic growth for greater prosperity

SDG#12: Responsible Consumption

SDG#16: Peace, Justice and Strong Institutions

SDG#17: Partnerships for the Goals

11th Malaysian Plan (“11MP”) Strategic Thrusts (“ST”)

ST#4

ST#5

ST#6

ST#2

ST#1

4

4

5

5

8

8

12

12

16

16

17

17

17

ICT as a key enabler to achieve developed nation

status by 2020

Sustainability Statementcont’d

Malaysia has identified ICT as a key enabler to achieving developed nation status by year 2020 and have undertaken considerable efforts to step up its “game” in the ICT sector:

How we drive digital transformation

At Green Packet, we strive to create a harmonious relationship with technology and progress by delivering sustainable value to our stakeholders. We aspire to improve and enrich lives through our quality products and services that support our customers to meet the new digital era. Bolstered by our Massive Transformative Purpose – anchored on the theme, Every Human Must Thrive with Life Improving Digital Innovations, and with a technological and human-centered mindset, we endeavor to bridge the digital divide, by uniting the fragmented communities and supporting network stability and security.

As a responsible solutions provider, we embrace innovation through the delivery of ICT-related products and services, with attention to managing economic, environmental and social impacts to our stakeholders. We provide an attractive and vibrant working environment for maintaining the well-being, career growth and development of our employees. We enrich local communities through our contribution to those in need and undertaking measures to reduce environmental impacts arising from our operations.

We believe that our efforts are imperative – as part of working towards contributing to sustainability agenda at the national and global level, namely the United Nations Sustainable Development Goals (“SDGs”) and Eleventh Malaysia Plan (“11MP”). As illustrated in Diagram 1, our Massive Transformative Purpose touches upon the relevant focus areas of the SDGs and 11MP. Throughout this Statement, icons representing the relevant SDGs and Strategic Thrusts of the 11MP will identify its intrinsic connection with the sustainability matters being discussed.


Ushering Malaysia towards an era of digital empowerment

Internet of Things (“IoT”) Strategic Roadmap

Focusing on ICT as an imperative enabler for a knowledge economy, especially in the areas of industry, infrastructure, human capital and digital inclusion.

Eleventh Malaysia Plan2016 – 2020 (“11MP”)

Our Massive Transformative

Purpose

Legend:

United Nations Sustainable Development Goals (“SDGs”)

Focus on Emerging Countries

Digital Innovations

Joint Aspirations

SDG#1 SDG#9 SDG#10 ST#1 ST#5 ST#6

ST#3ST#2ST#1

1

1

1

10

10

9

9

9

9

SDG#1 SDG#4 SDG#5 SDG#8

SDG#12SDG#9

SDG#17 ST#5 ST#6SDG#9

SDG#16 SDG#17 ST#4 ST#5 ST#6

ST#3

SDG#1: No Poverty

SDG#4: Quality Education

SDG#5: Gender Equality

SDG#8: Decent Work and Economic Growth

SDG#9: Industry, Innovation and Infrastructure

SDG#10: Reduced Inequalities

Strategic Thrust #1: Enhancing inclusiveness towards an equitable society

Strategic Thrust #2: Improving wellbeing for all

Strategic Thrust #3: Accelerating human capital development for an advanced nation

Strategic Thrust #4: Pursuing green growth for sustainability and resilience

Strategic Thrust #5: Strengthening infrastructure to support economic expansion

Strategic Thrust #6: Re-engineering economic growth for greater prosperity

SDG#12: Responsible Consumption

SDG#16: Peace, Justice and Strong Institutions

SDG#17: Partnerships for the Goals

11th Malaysian Plan (“11MP”) Strategic Thrusts (“ST”)

ST#4

ST#5

ST#6

ST#2

ST#1

4

4

5

5

8

8

12

12

16

16

17

17

17

ICT as a key enabler to achieve developed nation

status by 2020


Diagram 1:The intrinsic connection between the key elements of our Massive Transformative Purpose and the relevant SDGs and Strategic Thrusts of the 11MP


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Drive the implementation of strategies to manage sustainability matters whilst ensuring sustainability disclosures are aligned with regulatory requirement

Oversee the overall management of sustainability matters – including sustainability performance & disclosures

Set overall strategies & oversee the management of EES impacts arising from our business operations

Board ofDirectors

Chief ExecutiveOfficer

SustainabilityWorking Group

Significance of Green Packet'ssustainability impacts

Materiality Matrix

HighLowH

igh

Low

Board ofDirectorsEmployees

Shareholders/Investors

Government/regulatory bodies

Customers/Consumers

Business partnersSuppliers/vendors/subcontractors

IndustryAssociations

Media/Analysts

Localcommunities

Stak

ehol

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dep

ende

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on G

reen

Pac

ket

Influ

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on

Stak

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der

Asse

ssm

ents

& D

ecis

ions

Stakeholder's influence on Green Packet

Stakeholder Prioritisation Matrix

Hig

hde

pend

ence

N

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Low influence No influence Some influence High influence

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North America South America Europe Middle East Africa Asia Oceania

Legend

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MiddleEast

Europe

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Asia

Oceania


SUSTAINABILITY GOVERNANCE:

RESETTING SUSTAINABILITY GOVERNANCE FOR THE DIGITAL AGE

Diagram 3:Our sustainability governance structure & key responsibilities

We undertake various measures to progressively embed sustainable business practices into our day-to-day operations. Notably, during the reporting year, we have established a governance structure to manage and oversee the management of sustainability related matters within the Company.

As illustrated in Diagram 3, the Board of Directors (the “Board”) sets the overall strategy and provides oversight of managing economic, environmental and social (“EES”) impacts arising from the Company’s activities. A working group has been formed at the management level, i.e. the Sustainability Working Group (“SWG”). The SWG is chaired by the Chief Financial Officer (“CFO”) and supported by Heads of Department and representatives from various business units, from our operating entities located in Malaysia and Singapore.

SWG is tasked to drive the implementation of strategies to manage and monitor the sustainability matters across various businesses. With regard to this, SWG is responsible to prepare sustainability disclosures in the manner as prescribed by the local stock exchange. In addition to this, SWG supports the Chief Executive Officer (“CEO”) to raise stakeholder awareness in the area of sustainability to indicate changes and continuous improvement in business practices across all entities within Green Packet. The SWG shall provide progress updates on the Company’s sustainability practices to the CEO, who is in charge of overseeing the overall management of sustainability matters and sustainability disclosures, as delegated by the Board.

It is at our Board’s interest to instil sustainability awareness amongst our employees. During the reporting year, we have engaged with an external consultant to provide awareness trainings for the Board and key Senior Management Team at our Malaysian operating entities. We look forward to expanding our efforts to instil sustainability awareness for all levels of the employees across all operating entities.





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STAKEHOLDER ENGAGEMENT

We actively engage our internal and external stakeholders through multiple engagement channels. These engagement sessions are imperative in understanding our stakeholders’ views and addressing their expectations. We acknowledge that our stakeholders have varying levels of influence and dependence on our operations.

During the reporting year, under the facilitation of an external consultant, we adopted a structured exercise to prioritise our stakeholder groups. The Stakeholder Prioritisation Exercise was conducted by assessing the level of influence and dependence of each stakeholder group on Green Packet. As illustrated in Diagram 4, Board of Directors, employees, customers/consumers, government/ regulatory bodies, suppliers/vendors and business partners were found to be the most crucial stakeholder groups for Green Packet to engage with.


Diagram 4:Stakeholder Prioritisation Matrix


As show in Table 1, we have been engaging a wide range of stakeholders through multiple engagement channels, throughout the year to gauge their feedback and address their expectations.

Table 1:Summary of stakeholder engagement channels, key focus areas and our initiatives to respond to them

Stakeholder groups

Engagementchannels

Focusareas

How do we respond(Kindly refer to respective sections of the Statement)

Board of Directors, Investors/ Shareholders

• Meetings and regular email correspondences

• General meetings• Analyst briefings & media releases• Annual Report & Quarterly Reports• Corporate website

• Business strategy• Company financial performance• Quality of products and services• Information security• Human capital management• Corporate governance practices• Open and transparent

communication • Environmental practices• Contribution to the society

• Refer to page 42-49

Business Partners/ Suppliers/ vendors/ contractors

• Periodic meetings• Ongoing dialog sessions• One-to-one meetings• Periodic performance evaluation

• Collaborations and market synergy

• Corporate governance practices• Agreeable contracts• Terms of payments


Customers/ Consumers

• Direct engagements • Exhibitions • Online platform (e.g. Corporate

website)• Customer Satisfaction Survey

• Accessible & affordable products for digital inclusivity

• Quality of products & services• Digital data protection• Information security• Environmental practices

• Refer to page 41-44 & 49

Employees • Employee engagement survey• Learning and development

programme• Other avenues for interactions such

as annual dinner and quarterly town hall meeting

• Information security • Fair employment practices• Career development• Corporate governance practices


Government/ Regulatory Bodies

• Participation in programme organised by government/ regulatory bodies

• Digital data protection • Information security • Compliance to local regulatory

requirements

• Refer to page 43, 44 & 48

Local Communities

• Online platforms (e.g. social media & online applications)

• Corporate volunteering programme

• Accessible & affordable products for digital inclusivity

• Fair employment practices• Environmental practices• Community development

• Refer to page 43-46 & 49

Media/ Analyst

• Press conferences• Media releases• Media interviews

• Open and transparent communications

• Refer to page 48



MATERIALITY ASSESSMENT: “CONNECTING THE DOTS”


As we embark on our sustainability reporting journey, we attempt to approach materiality assessment in the best way possible – by harmonising our business needs and stakeholder interests. We adopted a structured materiality assessment approach, as guided by the Bursa Malaysia Sustainability Reporting Guide. We conducted surveys to determine the level of importance of a list of identified sustainability matters. The survey involved our employees, Senior Management and Board of Directors. For the coming years, we endeavor to progressively expand our scope of engagement to external stakeholders. The key activities involved in the materiality assessment are summarised below:

Key Activities

Identification�ofsustainability matters

Prioritisation ofsustainability matters

Approval ofMateriality�matrix

• R e v i e w e d i n t e r n a l documents and conducted desktop research on the sustainability disclosures by peer organisations and international voluntary reporting standards such as Global Reporting Initiatives (“GRI”) Standards

• Engaged with our internal stakeholders to assess the level of importance of each of the identified sustainability matter to our stakeholders

• Conducted a workshop with the representatives of Management across various business functions to determine the significance of each sustainability matter to the Company, by taking into account the degree of impact and likelihood of the occurrence of events associated with these identified sustainability matters

• The Materiality Matrix was developed and approved by the Board of Directors on 27 February 2018


Diagram 5 illustrates our Materiality Matrix. Customer satisfaction, strategic partnerships & collaborations, products & services – digital data protection, products & services – connectivity & digital inclusivity, data privacy & security and diverse & inclusive workplace are the top material sustainability matters which are of high importance to our stakeholders and business. The details of our initiatives in managing these material sustainability matters are discussed in the subsequent sections of the Statement.

Diagram 5:Materiality Matrix





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No. Sustainability Matters Contribution to SDGs Contribution to 11MP

1 Customer satisfaction SDG#1SDG#9

ST#6

2 Strategic partnerships & collaborations SDG#17 ST#6

3 Products & services – digital data protection SDG#9 ST#5

4 Products & services – connectivity & digital inclusivity SDG#1SDG#9

ST#1ST#2ST#5ST#6

5 Data privacy & security SDG#16

6 Diverse & inclusive workplace SDG#1SDG#5SDG#8

ST#1

7 Employee skills & talent SDG#4 ST#3

8 Corporate governance & regulatory compliance SDG#16

9 Sustainable supply chain management SDG#12 ST#2ST#6

10 Community engagement & development SDG#10 ST#2

11 Sustainable environmental practices SDG#12 ST#4


In Table 2, each sustainability matter is mapped against the respective stakeholder group across our value chain that are impacted most:

Table 2: Importance of sustainability matters to our stakeholders across the value chain

Our StakeholdersDirectors/

Employees

Governance/ Regulatory

bodiesCustomers/ Consumers

Business Partners/

Suppliers/ vendors/

contractorsInvestors/

ShareholdersLocal

Community

Sustainability Matters

Customer satisfaction

Refer topage 41-42

Strategic partnerships & collaborations

Refer topage 42

Product & services – digital data protection

Refer topage 43

Products & services – connectivity & digital inclusivity

Refer topage 43-44

Data privacy & security

Refer topage 44

Diverse & inclusive workplace

Refer topage 45-46

Employee skills & talent

Refer topage 47-48

Corporate governance & regulatory compliance

Refer topage 48

Sustainable supply chain management

Refer topage 49

Community engagement & development

Refer topage 49

Sustainable environmental practices

Refer topage 49

SUSTAINABILITY – A KEY ENABLER FOR DIGITAL TRANSFORMATION



CUSTOMER SATISFACTION

At Green Packet, our customers are placed at the center of everything we do. We are always eager to hear our customers’ feedback which is important to help us improve the way we do things. Their feedback are taken into account for development of new and customised products and enhancement of existing services for our customers residing across the globe. Our products support to boost digital connectivity in rural areas and aid the upgrading of technological capabilities of local businesses in the market place that we serve. "Diagram 6 illustrates our customer reach spreading across seven continents in providing tailored products and services".

Our customers are able to reach out to us via customer service centers and our corporate website for any enquiries and comments. As an airtime wholesaler, it is of utmost importance to prevent hardware or network failures that would dampen our consumers’ cellular experience. At Communications, we have established a Network Operations Centre (“NOC”) which is made up of a team of competent technicians. Guided by the NOC Standard Operating Procedure & Guidelines, NOC is responsible to assist with responding to all customer enquiries and managing airtime traffic on top of the complex network of our telecommunication infrastructure to deliver optimal network performance. At Solutions, the Business and Technical Support Team is dedicated to engage with our customers and identify areas of improvement. We invite our customers to participate in the Customer Satisfaction Survey on an annual basis. The Survey involves both internal and external parties which allows us to have visibility on the satisfaction levels of intermediaries and customers who deal with us. Examples of assessment criteria are availability, responsiveness, reliability and technical capability in meeting customers’ requirements.





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Diagram 6:Our Customer Reach Map

6Re-engineering economic growth for greater prosperity


5Strengthening infrastructure to support economic expansion



2Improvingwellbeingfor all

1Enhancing inclusiveness towards anequitable society


3Accelerating human capital development foran advanced nation




4Pursuing green growth for sustainabilityand resilience


During the reporting year, the Communications and Solutions segment have resolved 99.5% and 98.0% of customers’ complaints, respectively. In the coming year, we strive to continue to enhance our existing processes to more efficiently obtain and respond to our customers’ feedback.


• Participated by customers who deal with us

How Our Customers Feel About Us

Internal Customer Satisfaction Survey External Customer Satisfaction Survey

Internal Customer Satisfaction Survey

External Customer Satisfaction Survey 89.0%Target: 85.0%

87.8%

• Participated by our product distributors based on the services and support provided by our Project Managers and Support Engineers

How we promote connectivity and digital inclusivity through our products & services

Provided a total of 1.8 billion minutes of airtime

Expanded our presence and market reach across the globe to the regions that lack of appropriate infrastructure

Kiple application – provide a convenient, safe and efficient cashless payment experience for users

Roadmio – support the fleet telematics industry to promote safe driving, optimise fuel consumption and reduce environmental impacts

Extend network reach out to underserved communities

such as the African, Oceania, American, Middle Eastern and European continents

Stimulate knowledge transfer on latest

technologies and digital development

Enhancing digital television services for rural and urban communities, in support of

national agenda

Support smaller businesses involved in providing digital services and creating new

job opportunities

Key Suppliers Original Design Manufacturers

(“ODM”)

ElectronicsManufacturing

Services (’’EMS”)

Telecommunications Providers

Strategic Partners& Joint Ventures

Partnerships & collaborations for a greater socio-economic impact

Malaysia

Outcome

49% 51%

Singapore

33% 67%

Age Group

3%

34%

45%

18%20-29 years old

30-39 years old

40-49 years old

50-59 years old

Age Group

4%13%

33%

50%

20-29 years old

30-39 years old

40-49 years old

50-59 years old

Localtalent hire:

~90%

Localtalent hire:

~42%

STRATEGIC PARTNERSHIPS & COLLABORATIONS

We believe in the power of multi-stakeholder partnerships and collaborations with our key stakeholders, such as suppliers, original design manufacturers, electronics manufacturing service providers and telecommunication providers to spur innovative ideas, mobilise and share knowledge, expertise and technology for the development and enhancement of our products and services. Maintaining the strong symbiotic relationship with other key industry players, indirectly accelerates the growth of the local ICT sector and allows for collectively, reducing the connectivity gap amongst underserved communities across the globe. This is in line with our aspirations as a member of the Rural Broadband Association (“NTCA”) – an association that represents more than 800 independent community-based telecommunication companies, which advocates broadband accessibility and connectivity for communities in rural areas.
















PRODUCTS & SERVICES – DIGITAL DATA PROTECTION

While increased connectivity improves people’s lives in many ways, we recognise the importance of providing reliable and cyber-resilient ICT products and services – given that privacy concerns are increasing with the rapid growth of sensitive and confidential data being transmitted across telecommunication networks. In a recent survey by the Malaysian Communications and Multimedia Commission (“MCMC”), 59.1% of Malaysians participants responded that online privacy is extremely important and 32.8% thought it is important2.

As our business are susceptible to cybersecurity risk, it is imperative for us to shore up our defenses to ensure information security systems are well protected. Information Security Policies are put in place to ensure our product characteristics and information security practices are reliable. Additionally, we develop systems and procedures for safe handling and protection of our customer’s confidential information, making certain such information would not be used without customers’ consent.

Our products and services adhere to the stringent requirements pertaining to development, design and operation of information systems governed by our development policies. In the event non-conformances are identified, thorough investigation are carried out and corrective actions are implemented. Additionally, we have policies that are designed to ensure our suppliers comply with the industry’s best practices and the confidentiality and security of their information is protected within our systems. As a testament to our initiatives, we are proud to have obtained the Information Security Management System (“ISMS”) and Payment Card Industry Data Security Standard (“PCI DSS”) certification.

2 “Internet Users Survey 2017” Malaysian Communications and Multimedia Commission. 2017

PRODUCTS & SERVICES

– CONNECTIVITY & DIGITAL INCLUSIVITY



























With the exponential growth of Internet of Things (“IoT”) and changing consumer expectations, we are now entering a world where everything is connected. We take a stride further with the products and services we provide – promoting inclusivity by bridging the connectivity and digital gap on top of improving accessibility of our services amongst urban and rural communities, whilst enhancing the economy of individuals and businesses for greater prosperity. Our IoT products supports ”green growth” – aimed at minimising environmental impacts, safety risks and ultimately improve the quality of life.

On the Communications front, we provide voice and data interconnection services to global telecommunication operators. Our Solutions business segment provides indoor and outdoor devices for fixed and mobile wireless internet connectivity to clients from all over the world. Simplicity underpins everything we do and is synonymous with our digital offerings. All our hardware structures are streamlined and designs are simplified to keep our products durable and marketable at an affordable rate with enhanced network coverage and connectivity. Our Kiple application, an e-wallet application software is created to promote a convenience, safe and efficient cashless payment experience for both end users and our business partners. Not to mention, Roadmio – an IoT product which supports the fleet telematics industry to promote safe driving, optimise fuel consumption and reduce environmental impacts for the end users. We believe that our products would contribute to drive improvements in public safety and efficiency in the areas where we are operating in.


In the coming years, we will continue our efforts to provide affordable and quality products for customers from emerging markets. Additionally, in support of our corporate clients to meet the increasing demand for data services, our Communications segment intends to diversify product offerings by providing bundled voice and data services.


• Participated by customers who deal with us

How Our Customers Feel About Us

Internal Customer Satisfaction Survey External Customer Satisfaction Survey

Internal Customer Satisfaction Survey

External Customer Satisfaction Survey 89.0%Target: 85.0%

87.8%

• Participated by our product distributors based on the services and support provided by our Project Managers and Support Engineers

How we promote connectivity and digital inclusivity through our products & services

Provided a total of 1.8 billion minutes of airtime

Expanded our presence and market reach across the globe to the regions that lack of appropriate infrastructure

Kiple application – provide a convenient, safe and efficient cashless payment experience for users

Roadmio – support the fleet telematics industry to promote safe driving, optimise fuel consumption and reduce environmental impacts

DATA PRIVACY & SECURITY

In today’s digitalised world, data and information are deemed precious assets to organisations. The abundance and complexity of data storage requires a trust landscape to exhibit a culture that respects data privacy and protection. At Green Packet, we take the responsibility in securing data and information entrusted to us by our stakeholders. We are continuously enhancing our internal cyber-security governance to prevent leakage of confidential information through insider threats from workplace and Company ICT equipment such as laptop, servers, computers, employee mobile phone, etc.

We understand the potential risk of day-to-day business disruption that arises from data breaches and cyber-attacks. Strict policies have been put in place to manage data transfer, access and connection responsibly to keep employee data from being disclosed without explicit consent. We have invested in various ICT infrastructures and systems, which are aligned with the stringent requirements set forth in the industry. We are continuously working towards ensuring that all our systems and business processes are designed specifically to enhance data protection through investment in new ICT infrastructures and conducting periodic vulnerability assessments and penetration tests.

We conduct awareness trainings on a quarterly basis to educate our employees on the governing regulations and their roles in supporting Green Packet in its efforts to prevent cyber-attacks. Our continuous initiatives have been effective as we have not experienced any incidents of data breach in the company.















Diagram 7:Our Workforce Profile


DIVERSE & INCLUSIVE WORKPLACE

At Green Packet, we believe that our sustainable growth relies on the diversified skill sets, experiences and background of our employees, which enhances inclusiveness towards building an equitable society. We believe that great ideas are made of intersection of different perspectives. We strive to create a workplace where everyone’s voice is heard regardless of their gender, position and social dimension within the Company and community at large. We believe this is our winning formula that enables us to attract and retain top talents for the development of the next generation products and services. Our hiring practices are guided by our recruitment policy. We hire employees based on their skills and competencies whilst forbidding discriminatory selection based on gender, age, religion and ethnicity. Our workforce profile for both Malaysia and Singapore operating entities is illustrated in Diagram 7. Our workforce is the epitome of a young and vibrant community, with more than 45% of employees aged between 20 and 39 years old. Having young talent creates a workforce that is enthusiastic, ambitious and energetic, all of which are integral parts of working in a steadfast environment and to cope with the rising tide of change. We continue our efforts to tap into local talent pool and improve the employability of our local workforce.

Extend network reach out to underserved communities

such as the African, Oceania, American, Middle Eastern and European continents

Stimulate knowledge transfer on latest

technologies and digital development

Enhancing digital television services for rural and urban communities, in support of

national agenda

Support smaller businesses involved in providing digital services and creating new

job opportunities

Key Suppliers Original Design Manufacturers

(“ODM”)

ElectronicsManufacturing

Services (’’EMS”)

Telecommunications Providers

Strategic Partners& Joint Ventures

Partnerships & collaborations for a greater socio-economic impact

Malaysia

Outcome

49% 51%

Singapore

33% 67%

Age Group

3%

34%

45%

18%20-29 years old

30-39 years old

40-49 years old

50-59 years old

Age Group

4%13%

33%

50%

20-29 years old

30-39 years old

40-49 years old

50-59 years old

Localtalent hire:

~90%

Localtalent hire:

~42%















We take responsibility to ensure that our people feel safe and empowered at work and have zero-tolerance for unethical and immoral conduct at workplace. The Code of Conduct is embedded in the Employee Manual while the safety and anti-violence related policies are incorporated into our Employee Handbook. We also adhere to all mandatory employment requirements. Compensation packages are provided based on a structured performance appraisal process and benchmarked against market’s fair wage practices on an annual basis. We offer healthcare-related benefits such as outpatient medical benefits, insurance, optical and dental care benefits, health screening and examination claims and reimbursements. Other initiatives to promote a high-performing and innovative working culture is illustrated in the Diagram 8.

The voice of our people is equally important to us. Seeking and responding to our employees’ feedback is part of our aspiration of becoming the employer of choice. Town halls are held on a quarterly basis, at the Group level where employees are briefed on Green Packet’s latest achievements and action plans. Employees are able to ask questions and offer their opinions during the “Question-and-Answer” session at the end of the town hall meeting.


Initiatives to promote a high-performing and innovative working culture

Open Office or Hot Desk Concept

The concept of “open office” and “high-chair” set up is introduced to encourage team collaboration and

communication amongst employees, spur innovation and increase

productivity.

In-house Library

We believe that access to knowledge should be easy and convenient.

Hence, we have established an in- house library to promote a life-long

learning.

Flexi-Working Hours

Employees are given the choice of commencing work at different hours between 8:00 am. and 10:00 am. This policy is popular amongst our female employees and new parents, as they are given the liberty to manage their

time between family and work.

Encourage a Healthy Workforce

We offer subsidies for gym memberships to our employees as we believe that physical well-being is key to a productive and happy workforce

Supercharge Morning – Complimentary Breakfast

Session

To provide our employees with a great start of a day, we provide

complimentary and healthy breakfast. This also serves as a networking

platform for them to socialise with colleagues from all functions

Organise Corporate Events

We organise various corporate events such as monthly birthday

celebrations and annual dinner to appreciate their hard work and celebrate their achievements

together. This is also a good platform for the Management Team to engage

with our employees to solicit their feedback and incorporate them into

decision making processes

Diagram 8:Other initiatives to promote a high-performing and innovative working culture.


We believe in an open communications where employees are encouraged to express their concerns or opinions directly to the Management. We assess employee satisfaction levels through our survey which we started in year 2017 – “#haveyoursay Green Packet Organisational Survey 2017”. The outcome of the Survey showed that our employees are generally supportive of our workplace practices. They opined that efforts to promote personal development and transfer of knowledge/ expertise across various business units/ departments would require further improvement.

In year 2017, as part of our efforts to hire local talents, we participated in the career fair organised by an institution of higher learning. Additionally, we offer internship placements for undergraduates from local and private universities to learn the ropes of the industry. The internship programme will provide opportunities for the young graduates to learn new skills, be part of interesting projects and have the hands-on experience on the ongoing digital transformation at Green Packet.

In the near future, we are looking towards monitoring employee attrition rate in order to gauge the effectiveness of our efforts to retain our employees. We will continue to make a conscientious effort to engage with our employees whilst establishing a healthy work environment that would improve employee morale.

EMPLOYEE SKILLS & TALENT

Employee learning and development is no longer optional, it is essential for us to stay competitive. We seek to create a platform that helps to unleash our employees’ potential by providing adequate training programme to enhance their competencies. In this way, we promote lifelong learning opportunities for employees of all levels and ultimately, deliver a higher skilled workforce to fortify the overall development of ICT industry. We believe that by having a right class of people with right set of skillsets will help to improve workplace productivity.

Our Employee Manual handbook includes the Career Development Policy that governs our talent development initiatives for the career growth and development of our employees. To ensure that our business remains agile under the leadership of competent people, we have a succession planning programme where all senior management staff are assessed on an annual basis. This practice allows us to identify high-performing employees with potential to take on future Senior Management positions.

Our focus on technical competencies intensifies as we are facing a competitive global market with changing customer expectations. We conduct training need analysis to identify competency gaps and provide customised training programme for our employees. We go beyond the conventional scope of conducting physical trainings and instead, nurture our employees through a broad range of training programme. Learning at Green Packet is not confined within four walls, we encourage our employees to participate in conferences and seminars organised by external institutions, professional associations and other leading organisations for an enhanced learning outcome. Subsequent to this, we are looking at establishing a process to track the number of training hours received by our employees on an annual basis.
















We acknowledge the significance of sustainability impacts in transforming the way businesses think and work. During the reporting year, we engaged an external consultant to provide training on sustainability for our Senior Management and employees. It is our aim to educate our employees on the application of sustainability principles in the context of Green Packet’s nature and business operations.


Classroom training Job shadowing/ mentoring

Job rotation Career Action Plan - Job Enlargement and

Job Enrichment opportunities

Examples of technical and non-technical training prgoramme:

• Design Thinking Concept - to change the traditional way of thinking• Long Term Evolution-Evolved Packet Core (“LTE-EPC”) Planning Design

Training• Leadership and Corrective Feedback• Crucial Skills for Accountability and Results• Sustainability Topics

We have introduced Training Library – an online platform for our employees to share resources and learning materials

Training and Development Programme In Green Packet

CORPORATE GOVERNANCE & REGULATORY COMPLIANCE

Regulatory compliance is an essential part of our operations. Against the backdrop of increased level of regulatory scrutiny and ethical expectations, we recognise that good governance ensures equal access to justice to build an effective, accountable and inclusive institution at all levels. Our Risk Management Framework plays an integral role in supporting our sound corporate governance practices whilst ensuring compliance with local regulatory requirements. The details of the Risk Management Framework are discussed in the Statement on Risk Management & Internal Control (“SORMIC”) and Corporate Governance Overview Statement of the Annual Report.

We believe a company’s corporate culture is formed on the foundation of its people. We promote ethical standards across all levels of the organisation through our Code of Ethics and Code of Conduct for the Board. These Codes outline standard business conduct and ethical behavior applicable to every employee and Director within the Company. It acts as a moral compass aimed at guiding our people to make strategic day-to-day decisions. To ensure all employees are well informed of the Code of Ethics and Conduct, our induction training educates the standard behavior we expect of our employees. We are always on the lookout for suspected fraud, corruption, dishonest practices and other irregularities that may be detrimental to our reputation. The Code of Ethics has included appropriate communication and feedback channels for employees to raise concerns about possible improprieties, as curated in our whistleblowing policy and procedures.
















SUSTAINABLE SUPPLY CHAIN MANAGEMENT

The movement towards a sustainable supply chain amongst small and large organisations have seen tremendous growth over the years. Hence, there is a pressing need to adopt a sustainable production and consumption concept to unlock efficiencies in the supply chain process across our business value chain. At Green Packet, our approach to sustainable procurement embodies a strict assessment and selection of suppliers to ensure we operate ethically and with integrity throughout our value chain. This practice also propagates to uplift the awareness and sustainable consumption practices of the vendors and suppliers that we come into contact with throughout our business value chain.

At Communications, we have a stringent monitoring system on our suppliers’ voice traffic performance. The performance is monitored by our NOC Team, based on important indicators such as answer seizure ratio (“ASR”) and average call duration (“ACD”) to ensure good voice quality is maintained by our suppliers. At Solutions, we regularly monitor the performance of our suppliers for continuous improvement. Spearheaded by our Product Development and Logistics Team and Order Fulfilment Team based in Taiwan, we monitor our suppliers’ performance based on our Product Development Milestone, i.e. from concept planning upto after sales services. This is to systematically evaluate our suppliers in crucial areas focused on product functionality, quality control, cost, assurance system and delivery time.

COMMUNITY ENGAGEMENT & DEVELOPMENT

In the pursuit of our long-term vision and goals, we do not forget to enhance the livelihood of the community we serve and operate in. During the reporting year, we embarked on several initiatives, as part of our efforts to promote social inclusion of communities, irrespective of people’s background and economic status.

We took children from orphanages to savour healthy meals in Subway. We believe that instilling a healthy eating habits from young age can create a positive influence on the children’s dietary habits. We will continue our efforts to empower and enrich the lives of communities around us. We support the “Kasih Ibu Smart Selangor” Programme (“KISS”), initiated by the Selangor State Government to aid single mothers from low income households, by providing payment processing system for the Programme. It is expected that 30,000 mothers who reside in Selangor will benefit from this Programme. Every month, KISS programme will provide a monthly allowance for the fellow single mother to purchase their basic needs from the selected partnering merchants.

SUSTAINABLE ENVIRONMENTAL PRACTICES

We are mindful of the environmental impacts arising from our business operations. We are pursuing green growth by reducing waste generation from our operations through the 3R strategy – Reuse, Reduce and Recycle. We promote reduction of paper consumption by encouraging paperless communication and double-sided printing. Where possible, our employees are encouraged to avoid or reduce travel by using audio, web, or video-conferencing. Additionally, we always look out for opportunities to digitalise our existing processes. As discussed in the “Products & Services – Connectivity & Digital Inclusivity” section of the Statement, we strive to embody the sustainability features when we design our products and services. We keep in mind that our products should demonstrate quality functionality, environmental friendly and affordable to customers.








































Technology today is pushing the world forward at exponential speed. With technology, it connects us in many ways that we have not thought of especially in improving the lives of many people and make a positive social impact.

With that said, Green Packet has extended its expertise in IoT business with the concept to connect objects that has Internet connectivity such as devices, smart building, vehicles and even the creation of smart living city. In the IoT business, Green Packet focuses on connected hardware devices, cloud based data-driven applications and services for Connected Cars and solutions built on Low-Power Wide-Area Network (LPWAN) especially on LoRA technologies.

Discover new possibilities

Technology today is pushing the world forward at exponential speed. With technology, it connects us in many ways that we have not thought of especially in improving the lives of many people and make a positive social impact.

With that said, Green Packet has extended its expertise in IoT business with the concept to connect objects that has Internet connectivity such as devices, smart building, vehicles and even the creation of smart living city. In the IoT business, Green Packet focuses on connected hardware devices, cloud based data-driven applications and services for Connected Cars and solutions built on Low-Power Wide-Area Network (LPWAN) especially on LoRA technologies.

Discover new possibilities


The Board of Directors (“the Board”) of Green Packet Berhad (“Green Packet” or “the Company”) is committed to continuously enhancing shareholder value by maintaining high standards of corporate governance to promote corporate transparency and integrity. The Board believes that good corporate governance practices are pivotal towards enhancing business sustainability and corporate accountability with the ultimate objective of realizing long-term shareholder value, whilst taking into account the interests of other stakeholders.

The Company has applied all the principles set out in the Malaysian Code of Corporate Governance 2017 (“the Code”) except:

• Practice 4.2 (two-tier voting process to retain an independent director who has served beyond 12 years);• Practice 4.5 (Board to consists 30% female directors); and• Practice 7.2 (Disclosure of top five senior management’s remuneration on a named basis in the bands of

RM50,000).

The Statement below sets out the Company’s corporate governance processes with reference to the Code in which the Group has applied the principles of the Code and the extent of compliance with recommendations advocated therein.

The details of the application of each Practice set out in the Code can be download from the Company’s website: www.greenpacket.com

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

Board’s Roles and Responsibilities

The Company is led by a Board made up of an Executive Director and five Non-Executive Directors (inclusive of three Independent Non-Executive Directors). The non-executive members of the Board bring a wide range of skills and experience to the Board. The position of Chairman and Chief Executive Officer (“CEO”) are separately held by Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman and Mr Tan Kay Yen respectively. Mr Tan Kay Yen is the CEO cum Executive Director of the Company. The role of the Chairman is to manage and to provide leadership to the Board. He is accountable to the Board and acts as a direct liaison between the Board and Management of the Company, through the CEO.

The Board is responsible for approving and overseeing of the long-term objectives, business/corporate strategic plans, major acquisition & divestment and financial matters of the Group. The Board delegated the day-to-day management of the Company to the CEO. The day-to-day business of the Group, within the authorities as delegated by the Board, are further distributed under an approved Limits of Authority (“LOA”) to the Senior Management team of the Group.

The Board discharge some of its responsibilities through the delegation to the respective Board Committees with three (3) Board Committees. They are Audit Committee, Nomination Committee and Remuneration Committee. All Board Committees have their roles/functions, written terms of reference, operating procedures and authorities clearly defined. The Board reviews the Board Committees’ authority and terms of reference from time to time and the Board appoints the Chairman and members of each Board Committees. Full details of the Committees’ work are disclosed in the relevant sections for each of the Board Committee.

These Committees assist the Board in making informed decisions through in-depth discussions on issues pertaining to the respective Board Committees’ terms of reference and responsibilities. Subsequently, the Board Committees report the deliberations to the Board and the ultimate responsibility for the final decision on all matters lies with the Board.

The Board acknowledges its key responsibilities in directing the strategic plans, monitoring its performance targets and developing the long-term goals of the business of the Group.

Corporate Governance Overview Statement


Corporate Governance Overview Statementcont’d

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

Succession Planning

The Company has put in place a succession planning process to ensure continuity of leadership and long-term business sustainability. All senior management staff are assessed on a yearly basis. Their remuneration is linked to the achievement of business and performance objectives.

Annual performance assessment is part of succession planning process for executive leadership to identify and track senior management staff with potential for top management responsibility. Competency gaps identified during year end performance assessment will be the focus for training and development of senior management staff. Informal training includes role shadowing, mentoring, job rotation and on-the-job training, is commonly practiced in Green Packet. Appropriate formal training is also identified for continuous development of the senior management staff.

The Company constantly monitors and re-assesses the performance of employees and both training and development programmes are the Company’s way to continuously develop future leaders.

Ethical Standards through the Code of Ethics

The Company has in place a Code of Ethics governing the conduct of business of the Group applicable to every employee. The Code of Ethics has included appropriate communication and feedback channels for employees to raise concerns about possible improprieties via the whistleblowing policy and procedures.

The Board has adopted a Code of Conduct for the Board. This Code describes the standards of business conduct and ethical behavior for the Directors in the performance and exercise of their responsibilities as Directors of the Company or when representing the Company and its subsidiaries. These Codes are available on the Company’s website: www.greenpacket.com

Group’s Strategies for Sustainability

The Group is committed to become significant contributor in the business segments that it operates on a global basis. It believes that for sustainability, it needs to balance business growth with corporate responsibility, conserving resources for future generations by minimizing activities that may have a negative impact on the environment and driving efficiency and productivity in its daily business operations.

The Group’s commitment to health, safety and environment is shared by all employees and it has been incorporated into their work environment.

Board Members’ Supply and Access to Information

The Board are supplied with and granted access to timely information which allows them to discharge their responsibilities effectively and efficiently. Notice of meetings and board papers are given to members of the Board at least seven (7) days prior to the meeting.

Directors may obtain independent professional advice at the Company’s expense in furtherance of their duties, where this is deemed necessary, after consultation with the Chairman and other Board members.




Company Secretary

The Company Secretary is responsible along with the Board for administration of the Company’s matters under the Companies Act, Main Market Listing Requirements and other regulatory authorities. The Board is regularly updated and apprised by the Company Secretary on new statues and directives issued by regulatory authorities.

Board Charter

To facilitate the Board to discharge its stewardship responsibilities and risk management controls, the Company has established a Board Charter to delineate a clear distinction between Board and Management, together with a description of the Board’s roles and responsibilities. The Board Charter also sets out the roles and responsibilities of the Board and Board Committees, and the procedures and processes of the Board. The Board Charter was reviewed annually and updated on 29 November 2017. It is available on the Company’s website: www.greenpacket.com

Nomination Committee

The Nomination Committee comprises three (3) members, made up of exclusively independent directors. The membership of the Nomination Committee is set out in the Corporate Information section of this Annual Report. It is headed by the Senior Independent Director, Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman. The Terms of Reference can be viewed at the Company’s website: www.greenpacket.com

The Nomination Committee conducts an annual assessment of the Board as a whole, Board Committees and individual Directors. The criteria for the assessment includes contributions, integrity, competency and time commitment of the members of the Board in discharging their duties. In assessing suitability of candidates for new appointments, considerations are given on skill sets, experience, functional knowledge, time commitment and board diversity.

The Nomination Committee’s work includes reviewing and recommending to the Board, the re-election and re-appointment of Directors who will be retiring at the 16th Annual General Meeting. The Nomination Committee is satisfied with the Board structure and composition.

The Board is mindful of the gender diversity as required in the Code. However, emphasis shall first be placed on the qualities, experience and skills of a candidate irrespective of gender, which would best correspond to the composition of the Board so as to function effectively and efficiently. The diversity issue is discussed by the Nomination Committee and the Board.

Remuneration Committee The Remuneration Committee comprises three (3) members, the majority of whom are independent. The membership of the Remuneration Committee is set out in the Corporate Information section of this Annual Report.

This Remuneration Committee’s work includes reviewing and recommending matters relating to the remuneration of the Board and Senior Management on a yearly basis and makes the appropriate recommendations to the Board for consideration. The CEO and Non-Executive Directors abstained themselves from deliberation for matters relating to their remunerations. The remuneration package of the CEO is structured as to link to the Company’s performance and is subject to the approval of the Board. Remunerations and meeting allowances for the Non-Executive Directors are recommended by the Board for shareholders’ approval at the Annual General Meeting.




Remuneration Committee (cont’d)

The Board has approved a Remuneration Policy to determine the remuneration of Directors and Senior Management. The remuneration of the Board of Directors is determined on the basis of standards in the market and reflects demands to competencies and efforts in light of the scope of their work and the number of board/committee meetings.

The composition of the remuneration for the Senior Management are as follows:

• Fixed remuneration based on market standard, business key performance indicators and their roles & responsibilities; and

• Incentive plans consist of share options.

The Terms of Reference and Policy can be viewed at the Company’s website: www.greenpacket.com The aggregate Directors’ remuneration receivable / received from the Group and Company for the financial year under review is as follows:-

SalariesOther

Benefits@Other

Emoluments Total(RM) (RM) (RM) (RM)

Executive�DirectorTan Kay Yen 723,798 111,389 121,040 956,227

Total: 723,798 111,389 121,040 956,227

@ Employer's statutory contribution

Directors’ Fees

Meeting Allowances Total

(RM) (RM) (RM)

Non-Executive�DirectorsTan Sri Datuk Dr. Haji Omar Bin Abdul Rahman 86,306 13,000 99,306Puan Chan Cheong 32,364 6,000 38,364Tan Sri Dato’ Kok Onn 32,364 5,000 37,364Boey Tak Kong 71,811* 11,000 82,811A. Shukor Bin S. A. Karim 32,364 13,000 45,364

Total: 255,209 48,000 303,209 * included payment of director’s fee received from a subsidiary.




Remuneration Committee (cont’d)

The number of Directors whose total remuneration falls within the following bands:-

Range of Remuneration ExecutiveNon-

Executive Total

Below RM50,000 - 3 3RM50,001-RM100,000 - 2 2RM950,001-RM1,000,000 1 - 1

Total 1 5 6

Annual Assessment of Independent Directors

The assessment for independent director is done in accordance with the definition of independent director pursuant to the Listing Requirement i.e. items/criteria (a) to (g) of the aforesaid definition. The Board is satisfied with the level of independence demonstrated by all the Independent Non-Executive Directors with their ability to act in the interest of the Company in providing unbiased views and impartiality during the Board’s deliberations and decision-making process. The Board is of the view that the length of service of the Independent Directors on the Board do not in any way interfere with their independent judgement and ability to act in the best interest of the Group.

Approval for Independent Directors Serving Over Nine Years

The following Independent Non-Executive Directors who had served for a cumulative term of more than nine (9) years, were eligible to continue to act as Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with Code.

Date of Appointment Name of Directors No. of years of tenure

25 June 2004 Tan Sri Datuk Dr. Haji Omar bin Abdul Rahman 13 years 11 months11 March 2005 Boey Tak Kong 13 years 2 months21 May 2008 A.Shukor Bin S.A. Karim 10 years

The Board is unanimous in its opinion that Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman, Encik A. Shukor Bin S.A. Karim and Mr. Boey Tak Kong independence have not been impaired or compromised in any way as observed below:-

• They continue to fulfill the criteria and definition of an Independent Director as set out under Paragraph 1.01 of the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements; and

• During their tenure in office, they have not transacted or entered into any transactions with, nor provided any services to the Group within the scope and meaning set forth in Paragraph 5 of Practice Note 13 of the Listing Requirements; they have also provided sufficient time and have discharged their duties and responsibilities without fear or favour, often providing independent judgement and challenging the conduct of the Group’s business and financial performance.

In view of the above, the Board resolves to seek the shareholders’ approval to continue the services of Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman as an Independent Non-Executive Chairman, Mr. Boey Tak Kong and Encik A. Shukor Bin S.A. Karim to serve on the Board as Independent Non-Executive Directors respectively.




Separation�of�Positions�of�Chairman�and�the�Chief�Executive�Officer

The Chairman is an Independent Non-Executive Director. There is a clear separation of responsibilities between the Chairman and CEO to ensure a balance of power and authority.

Board Composition and Balance

The Company is led by an experienced Board consisting of individuals with appropriate knowledge and skills to provide entrepreneurial leadership to achieve the Group’s objectives and performance targets with good corporate governance.

There are six (6) members on the Board, comprising mainly Non-Executive Directors. There are three (3) Independent Non-Executive Directors, two (2) Non-Independent Non-Executive Directors and one (1) CEO cum Executive Director.

The presences of the Independent Non-Executive Directors fulfill a pivotal role in corporate accountability as they provide independent opinions, advice and judgment. This Board composition is in compliance with the Bursa Securities Main Market Listing Requirements.

The Board has identified Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman as its Senior Independent Director and Non-Executive Chairman, to whom concerns of shareholders and others may be conveyed. The profiles of the Directors are set out in the Board of Directors' Profile section of this Annual Report.

Directors’�Background�Experience

SkillsetNo. of

Directors

Marketing & Global Operations 4Accounting & Auditing 3Risk & Governance 5Technology 4Management & Leadership 6Government Relations 4

Director’s�Personal�Profile

Length of TenureNo. of

Directors Age DiversityNo. of

Directors

Less than 5 years 1 Less than 50 years 25 to 9 years - 50 to 65 years 2More than 9 years 5 Above 65 years 2

The Company is supportive of gender diversity to comprise 30% women directors as recommended by the Code. As the ICT industry is dominated mainly by male, the prospect to source for suitable women directors is challenging.




Time commitments

The Board have given sufficient time and attention to the affairs of the Company for the year. As at 31 December 2017, none of our Directors, individually, held directorships in more than five public companies (including the Company).

Board Meetings

The Board meets at least four (4) times a year on a quarterly basis, with additional meetings to be convened when necessary. Agenda and Board papers are circulated to the Board prior to the Board meetings so as to give the Directors time to consider and deliberate on the issues to be raised at the meetings in relation to the Group’s financial performance, corporate development, strategic issues and business plan.

During the financial year under review there were six (6) Board Meetings held and the attendance record of each director is as follows:-

Name of Director No. of meetings attended

Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman 6Puan Chan Cheong 6Tan Kay Yen 6Tan Sri Dato’ Kok Onn 5Boey Tak Kong 5A. Shukor Bin S.A Karim 6

Directors’ Training

All Directors have completed the Mandatory Accreditation Programme as prescribed by Bursa Securities.

The Company acknowledges that continuous education programmes are imperative for the Board to update and enhance their knowledge and skills.

Directors are regularly updated on the Group business and the competitive and regulatory environment in which they operate as well as the market outlook and industry trends in the ICT industry. Besides that, all Directors were well-informed of the latest development on relevant rules and regulation, in order to discharge their duties more effectively.




Directors’ Training

During the financial year under review, the Directors attended the following training programmes/seminars:-

Name of Director Details of Programme Organizer

Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman

• Bursa CG Breakfast Series – “Board Excellence: How to Engage and enthuse Beyond Compliance with Sustainability”

Bursa Malaysia Berhad

• Business as a force for good: The role of the private sector in achieving the Sustainable Development Goals

SIDC

• SDG Business Summit 2017 SIDC• CG Breakfast Series for Directors: “Leading

in a Volatile, Uncertain, Complex, Ambiguous (VUCA) World”

Iclif

• Sustainability Reporting KPMG

Puan Chan Cheong • Wild Digital Southeast Asia 2017 Catcha Group• New Economy Conference 2017 UOB Kay Hian• South East Asia Mentoring Masterclass YPO/WPO• Sustainability Reporting KPMG

Tan Kay Yen • Wild Digital Southeast Asia 2017 Catcha Group• Exponential Organisations Master Course by

Salim IsmailGazelles Growth Institute

• Google Design Sprint New York Google Launchpad• Mid Tier Companies Development Program

Wave 4Matrade

• Think Big, Go Global Bootcamp MDEC• Sustainability Reporting KPMG

Boey Tak Kong • A New Era of Auditor Reporting: Insights for Investors

Malaysian Institute of Accountants & Minority Shareholder Watchdog Group

• ACSAN Roundtable on Minority Shareholders’ Rights

The Malaysian Institute of Chartered Secretaries and Administrators

• Sustainable Development Goals Business Summit

S e c u r i t i e s I n d u s t r y Development Corporation

• Company Law Conference 2017 TARCIAN Alumni Association – MAICSA

• Responsible Investment Forum Bursa Malaysia & Securities Commission Malaysia

• Board Excellence: How to Engage and Enthuse Beyond Compliance with Sustainability

Bursa Malaysia & MINDA




Directors’ Training (cont’d)

During the financial year under review, the Directors attended the following training programmes/seminars:- (cont’d)


Boey Tak Kong 1) The Malaysian Code on Corporate Governance 2017 – Key Changes & Impact To The Board & Management

2) Overview of Key Changes in The Companies Act 2016 – How Board & Management Are Impacted

Coalition for Business Integrity Berhad

• An Overview of Industry 4.0 Transformation Accelerated Action Plan

Penang Skills Development Centre

• Face the Media – Make It Or Break It/Media Communication

Censof Holdings Berhad

• Sustainability Reporting KPMG• MCCG Dialogue with Securities Commission MAICSA• Leading in A Volatile, Uncertain, Complex,

Ambiguous WorldBursa Malaysia & The Iclif Leadreship and Governance Centre

• Case Study Workshop for Independent Directors Rethinking – Independent Directors: A New Frontier

Bursa Malaysia & SIDC

• Effective Internal Audit Function for Audit Committee Workshop

Bursa Malaysia & IIA Malaysia

• Enhance Quality of Management Discussion & Analysis for Chief Executive Officers & Chief Financial Officers of Listed Issuers

Bursa Malaysia

• Budget 2018 & Tax Audits and Controversies Seminar

Wong & Partners

• Integrating an Innovation Mindset with Effective Governance

Bursa Malaysia & MINDA

• MIA – SC Workshop on Malaysian Code on Corporate Governance

MIA

Tan Sri Dato’ Kok Onn • Best Practices for Annual Report – What a Company needs to disclose

Terus Mesra Sdn Bhd

• Prepare an Impactful Business Plan Process – Getting the Priorities Right

Terus Mesra Sdn Bhd

• Enhance Annual Report Disclosure Standards – What’s Next?

Terus Mesra Sdn Bhd

• Sustainability Statement Terus Mesra Sdn Bhd



Directors’ Training (cont’d)

During the financial year under review, the Directors attended the following training programmes/seminars:- (cont’d)


Tan Sri Dato’ Kok Onn • The Malaysian Code on Corporate Governance Key changes & impact to the Board & Management

Coalition for Business Integrity Berhad

• Investor Relations & Impact of ESG Terus Mesra Sdn Bhd• Sustainability Reporting KPMG

A. Shukor Bin S. A. Karim • MCCG Compliance Expectations – Better Reporting Integrity, Transparency & Accountability

Terus Mesra Sdn Bhd

• Sustainability Reporting KPMG

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

The Board endeavors to provide and present a balanced and meaningful assessment of the Group’s financial performance and prospects to shareholders, primarily through the annual reports, quarterly announcements of the Group’s results and other price-sensitive public reports. The Board is assisted by the Audit Committee ("AC") in overseeing the Group’s financial reporting processes and the accuracy, consistency and appropriateness of the use and application of accounting policies and standards, as well as the reasonableness and prudence in making estimates, statements and explanations.

Audit Committee

The Board’s obligation to establish formal and transparent arrangements in considering how it should apply financial reporting and internal control principles and maintaining an appropriate relationship with the Company’s external auditors, Crowe Horwath is met through the AC. All members of the AC are Non-Executive Directors and Mr. Boey Tak Kong fulfills the financial expertise requisite of the Listing Requirements.

The members of the AC are as follows:

Boey Tak Kong - Chairman/Independent Non-Executive DirectorTan Sri Datuk Dr. Haji Omar Bin Abdul Rahman - Independent Non-Executive DirectorA. Shukor Bin S.A. Karim - Independent Non-Executive Director

A full AC report detailing its composition, Terms of Reference and summary of activities during the financial under review is set out on pages 69 to 71 of the Annual Report.




PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (cont’d)

Compliance with Applicable Financial Reporting Standards

The Board is responsible to ensure that the financial statements of the Group are drawn up in accordance with the provisions of the Companies Act 2016 and applicable approved accounting standards in Malaysia. The Board also ensures that the Group has used appropriate accounting policies for the preparation of its financial statements, are consistently applied and supported by reasonable and prudent judgement and estimates.

In presenting the annual financial statements and quarterly announcement of results, the Directors make every effort to present a balanced and understandable assessment of the Company’s financial position and prospects. All financial statements and reports are subjected to detailed analysis and scrutiny by the AC before they are presented to the Board for approval and release.

Assessment�of�External�Auditors

The AC is responsible to review the competency and independence of the External Auditors. Having assessed their performance, the AC will recommend their re-appointment to the Board, upon which the shareholders’ approval will be sought at the Annual General Meeting.

The Board has established a formal and transparent arrangement for maintaining appropriate relationships with the Group’s external auditors. The AC meets the external auditors without the presence of Executive Director or the Management whenever necessary, but no less than twice a year.

Risk Management Committee

The Company has established and adopted the COSO policies and framework for the oversight and management of material business risks and has adopted a formal Risk Management Policy.

Management is charged with monitoring the effectiveness of risk management systems and is required to report to the Board on a quarterly basis.


Standard Operating Procedures

The Board understands that in order to strengthen the accountability aspects of financial reporting, the Company needs to maintain a sound system of internal controls to safeguard shareholders’ investment and the Company’s assets. A comprehensive Standard Operating Procedures has been drawn up for the Group.

Whistle Blowing Policy & Procedure

In addition to the Risk Management Policy, the Company has also formalized a Whistle-Blowing Policy & Procedure within the Group. It provides employees with a secured channel of reporting improprieties and protections are granted to employees who disclosed such allegations in good faith. It sets out the responsibility of all employees to identify and report suspected fraud, corruption, dishonest practices and other irregularities before it causes potential damage to the Company’s reputation or its stakeholders. It is an effective system that encourages employees to communicate and listen to each other making up part of an effective risk management framework.

Internal Audit Function

The effectiveness of the system of internal controls is reviewed by the Internal Auditors who operate independently from the activities of the Company under the purview of the AC. Details of the internal audit function are outlined on pages 70 to 71 of the AC Report.

Risk Management Framework

Board & Committees

Operating Executive

ExternalAudit

Regulator

3rd line of defence2nd line of defence1st line of defence

Internal Audit

Code of ConductDefines the culture of the organisation and sets the standards

of business practice within which our people perform their roles

Centres of excellenceFinancial OversightRisk ManagementGroup committees

Management controlOperationalise policies,

procedures, trainingand standards

Process and controlimplementation and

development

Embed and monitor effective risk management,legal compliance, and related assurance processes



Risk Management Committee (cont’d)



Internal Control

The Statement on Risk Management and Internal Control of the Group is set out on pages 65 to 68 of this Annual Report. This Statement provides an overview of the Group’s approach in maintaining a sound system of risk management and internal control to safeguard shareholders’ investment and the Group’s assets.

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

Effective Stakeholder Communication and Continuous Disclosure

The Company is fully committed in maintaining a high standard for the dissemination of relevant and material information on the development of the Group. The Company also places strong emphasis on the importance of timely and equitable dissemination of information to shareholders.

The Board recognizes the need for shareholders to be informed of all material business matters affecting the Group. In addition to various announcements made during the period, the timely release of financial results on a quarterly basis, press releases, analyst briefing presentations and annual report provides shareholders with an overview of the Group’s performance and operations. Under the Investor Relation Policy, the Company has assigned a designated person to receive feedback from shareholders and investment community. The Company had always leveraged on its information technology for effective dissemination of information to its shareholders and stakeholders. The official website is www.greenpacket.com

Annual General Meeting (“AGM”)

The AGM is the principal forum for dialogue and communication with shareholders and stakeholders. Shareholders are encouraged to attend and participate during the AGM in the question and answer session on the prospects, performance of the Group and other matters of concern. Members of the Board, Heads of Departments and the external auditors are present to answer questions raised at the meeting. Suggestions and comments raised by shareholders are also noted for consideration. Shareholders who are unable to attend are allowed to appoint proxy/proxies to attend and vote on their behalf. The Company encourages shareholder participation at general meetings and voting is carried by poll for resolutions.

Investors Service

The Company’s website www.greenpacket.com has a section dedicated to investor relations and provides up-to-date information on the Group’s business and operations. Further enquiries may be directed to the following person on all investor related matters:-

Person-in-charge : Liew Kok SeongPosition : Chief Financial OfficerTelephone : 603.2714 6288E-mail : [email protected]

This Corporate Governance Overview Statement has been approved by the Board on 24 April 2018.



1. Introduction

The Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of risk management and internal control to safeguard shareholders’ investments and the Group’s assets. The Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) require Directors of listed companies to include a statement in annual reports on the state of their risk management and internal control of the Group.

The Board of Directors of Green Packet (“Board”) is pleased to present the Statement on Risk Management and Internal Control, which has been prepared largely in accordance with the Statement on Risk Management and Internal Control – Guidelines for Directors of Listed Issuers. The Board believes the practice of good corporate governance is an important continuous process and not just a matter to be covered as compliance in its Annual Report.

2. Board Responsibility

The Board acknowledges its overall responsibility for the internal control system to cover the financial, compliance and operational controls of the Group. The Board also recognizes its responsibility for reviewing the adequacy and integrity of the system of internal control and risk management system to safeguard shareholders’ investment and the Group’s assets.

The Board has formalized an Enterprise Risk Management framework (“ERM framework” or “framework”) which is based on International accepted framework. The framework aids to the achievement of Group’s objectives and strategies by instilling continuous process of identifying, evaluating, profiling, mitigating, reporting and monitoring significant business risks the Group may face. However, in view of inherent limitations in any system of risk management and internal control, it should be noted that such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

Management is responsible in developing procedures and processes as well as implement internal controls which will help identify, assess, mitigate and monitor business risks. Management also takes corrective actions as and when needed in order to assist the Board in discharging its duties and responsibilities in maintaining a sound system of risk management and internal control.

The Board has received assurance from the Chief Executive Officer and the Chief Financial Officer that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects. Notwithstanding to this, the Company’s internal control system does not apply to its associate companies, which fall within the control of their majority shareholders. Accordingly, the Board has put in place an organization with formal lines of responsibility and delegation of authority that is designed to manage, rather than eliminate risk, and to improve the governance process of the Group.

The Board is of the opinion that the risk management and internal control system in place for the year under review and up to the date of issuance of the financial statements is adequate and effective to safeguard the shareholders’ investment, Group’s assets and the interests of internal and external stakeholders.

Statement on Risk Management and Internal Control


Statement on Risk Management and Internal Controlcont’d

3. Risk Management Policy

The Group maintains a Risk Management Policy to continually update and identify the various risk factors that could have a potentially significant impact on the Group’s mid to long-term business objectives.

The Board also, throughout the current financial year, has identified, evaluated and managed the significant risks faced by the Group through monitoring of the Group’s operational efficiency and profitability.

The key features of the Group’s ERM policy are:

- Sound risk management practice promotes effective governance which is integral to the achievement of business objectives.

- Embedding risk management into day-to-day management processes, decision making and strategic planning.

- Every employee of the organization is responsible to manage risks within their areas of responsibility.

- Periodic reporting and monitoring activities instil accountability and responsibility for managing risks.

- The risk management processes applied should aim to take advantage of opportunities, manage uncertainties and minimize threats.

The key Business Risks identified are as follows:

- Business Expansion and Growth into new areas in digital services and internet of things (“IOT”) - Technology obsolescence - Industry competitiveness - Government/Economic/Fiscal/Monetary Policies; and, - Financial Risks

4. Internal Audit Function

KPMG Management & Risk Consulting Sdn Bhd (“KPMG”), an independent professional firm, was appointed to support the Audit Committee, and by extension, the Board, by providing independent assurance on the effectiveness of the Group’s system of internal control.

In particular, KPMG appraises and contributes towards improving the Group’s risk management and control systems and reports to the Audit Committee. In assessing the adequacy and effectiveness of the system of internal control and financial control procedures of the Group, the Audit Committee reports to the Board on its activities, significant audit findings and the necessary recommendations or actions needed to be taken by Management to rectify those issues.

The internal audit work plan, which reflects the risk profile of the Group’s major business sectors is routinely reviewed and approved by the Audit Committee. The scope of KPMG’s function covered the audit and review of the Group’s processes such as financial management, procurement to payment, sales and customer service, billings and collections, risk management framework and organisational governance.

The costs incurred for the aforesaid internal audit function in respect of the financial year ended 31 December 2017 was RM80,000.00.



5. Key Process & Control Environment

The Group’s key internal control processes based on COSO principles benchmarking are as follows:

Control Environment

• Management provides strategic leadership with proper delegation, aligned to business and operations requirements in order to achieve the Group’s missions.

• A clear and detailed organisation structure has been established to focus on the related reporting responsibilities and accountabilities to ensure and clarify task ownership.

• The Board had delegated authority levels with limits for various business transactions to the senior management team duly documented, to facilitate effective internal control over expenditure commitment.

• The Group has in place a Whistle Blowing Policy, which forms part of the Code of Ethics, to provide an avenue for employees to report any breach or suspected breach of any law or regulation, including business principles and the Group’s policies and guidelines in a safe and confidential environment.

• A Code of Ethics & Conduct is established for all employees which define the ethical values and conduct of work required at the Company and Group levels. New employees are briefed on the Group’s culture, organization structure, codes of ethics & conducts and employees’.

Risk Assessment

• Risk management meetings were conducted and attended by the senior management team at subsidiaries’ levels to discuss, identify and manage key enterprise risks.

Control Activities

• The Group constantly reviews and updates its standing operating procedures to ensure consistency, clarity and accountability in the Group’s daily operations.

• The Group has in place a dedicated billing and customer care service to manage the billing and collection functions efficiently for the Group.

Information and Communication

• Employees are briefed on their job descriptions, responsibilities and key performance index expectations upon joining the Group by their immediate supervisors and a documented copy of the same is filed in their respective personnel files.

• Issues and matters arising from departments and functions are discussed and resolved in monthly management meetings.

• The communication channels widely used are email, teleconferencing with emphasis placed on effective and “free-flow” or open communication within the organization.

Monitoring

• Dashboards of individual functions are utilized to monitor and track progress of all projects and initiatives undertaken.

• Management constantly monitored financial performances, business plan achievement and the progress of corrective actions implemented.


6. Conclusion

The Board continues to take measures and maintains an ongoing commitment to strengthen the Group’s control environment and processes. During the financial year, there were no material losses caused by breakdown in internal controls.

As required by paragraph 15.23 of the Bursa Malaysia Securities Berhad Main Market Listing Requirement, the External Auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance review was performed in accordance with Malaysian Approved Standard on Assurance Engagements, ISAE 3000 (Revised), Assurance Engagements other than Audits or Reviews of Historical Financial Information and Audit and Assurance Practice Guide 3 (AAPG3): Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report, issued by the Malaysian Institute of Accountants. AAPG3 does not require the External Auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group. The External Auditors reported to the Board that nothing has come to their attention that causes them to believe that the statement is not prepared, in all material respect, in accordance with the disclosures required by paragraph 41 and 42 on the Statement on Risk Management and Internal Control : Guidelines for Directors of Listed Issuers and Practices 9.1 and 9.2 of the Malaysian Code on Corporate Governance 2017 to be set out, nor is factually inaccurate.

These statements were approved by the Board on 24 April 2018.



Audit Committee Report

The Audit Committee (“the AC”) is appointed by the Board. The Terms of Reference can be viewed at the Company’s website www.greenpacket.com

COMPOSITION & ATTENDANCE

The AC consists of three (3) members and held five (5) meetings during the financial year:

Name of member Designation Directorship Attendance

Boey Tak Kong Chairman Independent Non-Executive Director 5/5Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman

Member Senior Independent Non-Executive Director 5/5

A. Shukor Bin S.A. Karim Member Independent Non-Executive Director 5/5

The AC meetings were attended by the CEO cum Executive Director, Chief Financial Officer, Internal Auditors, External Auditors and the Company Secretary.

Minutes of each AC meeting were recorded and confirmed at the next following AC meeting, with the confirmed Minutes of Meeting duly extended to the Board for notation.

The AC Chairman conveyed to the Board matters of significant concerns as and when raised by the External Auditors, Internal Auditors and Management in relation to risks, challenges and financial assistance matters. In addition, the AC Chairman presented to the Board the Committee’s recommendations to approve the audited financial statements, quarterly financial results and annual audit fees.

ANNUAL PERFORMANCE ASSESSMENT

The annual performance review of the AC as a whole and on the member individually were carried out by the Nomination Committee in early 2018. The Board was satisfied that the AC and its members have discharged their duties and responsibilities in satisfactorily in accordance the Terms of Reference of the AC.

AUTHORITY OF AC

The AC has the explicit authority to investigate any matter within its Terms of Reference and has full and unrestricted access to any information pertaining to the Group. It also has full access to and co-operation of Management and full discretion to invite any Director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly. The AC is also provided with all the necessary information to enable them to make informed decisions.


Audit Committee Reportcont’d

SUMMARY OF WORKS DURING THE FINANCIAL YEAR UNDER REVIEW

The AC activities undertaken during the financial year covers the following matters:

(a) Review the quarterly financial results and the annual audited accounts of the Company and the Group before recommending to the Board;

(b) Review the annual audit plan of the external and internal auditors and the results of the audit performed by them including the audit recommendations made and management’s response to these recommendations.

(c) Review related party transactions and conflict of interest situation that may arise within the Group, including any transaction, procedure or course that may arise questions on Management integrity.

(d) Assess on the effectiveness of the external auditors and determine their remuneration. (e) Oversee the development and assess on the effectiveness of risk management policies, review risk

exposure, and ensure adequate resources and systems are put in place for effective risk management and internal control activities; and

(f) Meet the external auditors on two (2) private sessions without the presence of executive director and Management to note any material weaknesses and any Management override issues or non-compliance with any laws or regulations by Management.

(g) Review the Terms of Reference annually in accordance with the needs of the Company and any new regulations.

The Table below illustrates time incurred for various activities during the financial year under review:

Type of AC Activitie % of Time Spent

Financial reporting 35Internal Audit 15External Audit 25Risk Management & Internal Controls 25

Total 100

INTERNAL AUDIT FUNCTION

The Company has outsourced its internal audit function to KPMG Management & Risk Consulting Sdn Bhd (“KPMG”). The internal audit engagement by KPMG is headed by an Executive Director, namely, Mr Khaidzir. Mr Khaidzir is a professional member of the institute of Internal Auditors, Malaysia and a Chartered Accountant (Malaysian Institute of Accountants). Mr Khaidzir has accumulated over 20 years of experience in a wide range of governance advisory, risk and internal audit work.

All the personnel deployed by KPMG are free from any relationships or conflicts of interest, which could impair their objectivity and independence during the course of the work.

The internal audit work was carried out in accordance with a framework set by a recognised professional body i.e. IPPF issued by IIA, of which final communication of internal audit plan, processes and results of the internal audit assessment are supported by sufficient, reliable and relevant information which signifies a satisfactory conclusion of the internal audit work.


Audit Committee Reportcont’d

INTERNAL AUDIT FUNCTION (cont’d)

The internal audit work plan, which reflects the risk profile of the Group’s major business pillars is reviewed and approved by the AC. During the year, KPMG had conducted review on the financial management, procurement to payment, sales and customer service, billings and collections, risk management framework and organisational governance. The Internal Audit Report was presented to the AC and to Management for attention and corrective actions. The Management is responsible for ensuring that corrective actions are implemented within the agreed timeframe. The professional fees incurred in respect of the financial year ended 31 December 2017 was RM80,000.

EXTERNAL AUDITORS

The AC after the financial year-end audit, conducted an assessment on the performance of the External Auditors based on the following areas:-

l Team members’ working experience and credentials in the technology industry,l Firm’s competitive advantage with global network resources,l Firm’s audit work approach and their ability to provide value added advice and services, andl Firm’s commitment to perform the work within Bursa Malaysia’s timelines.

The AC recommended to the Board on 18 April 2018 for approval the retention of Crowe Horwath as the External Auditor for the financial year ending 31 December 2018.

Key audit matters raised by the external auditors were deliberated and the AC had reviewed and agreed with the Management’s treatment and controls measures implemented to provide the necessary safeguard for reporting integrity. The AC is pleased to report that there was no significant matter of disagreement that arose between the External Auditors and Management.

The AC to reinforce the independence and objectivity of the External Auditors, the AC reviewed all non-audit services to be performed by the External Auditors.

FINANCIAL REPORTING & COMPLIANCE

Review the quarterly and year-end financial statements of the Company, focusing particularly on:

l Any changes in accounting policies and practices.l Significant adjustments arising from the audit.l The going concern assumption.l Compliance with accounting standards and other legal requirements.


Statement on Directors’ Responsibility

The Directors are required to prepare the financial statements which give a true and fair view of the state of affairs of the Company and Group as at end of the financial year and of their results and cash flows for the financial year then ended.

In preparing the financial statements for the year ended 31 December 2017, the Directors have:-

• adopted suitable accounting policies and then applied them consistently;• made judgments and estimates that are reasonable and prudent; • ensured applicable accounting standards have been followed, subject to any material departure and

explained in the financial statements; and• prepared the financial statements on a going concern basis, unless it is inappropriate to presume that the

Group and the Company will continue in business.

The Directors have responsibility to ensure that proper and adequate accounting records are kept which disclose with reasonable accuracy at all times the financial position of the Company and Group, and which enable them to ensure that the financial statements comply with the Companies Act, 2016.

The Directors are also responsible for safeguarding the assets of the Group and the Company and, hence, for taking reasonable steps in the prevention and detection of fraud and other irregularities.


Additional Compliance Information

1. UTILIZATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS

During the financial year, no proceeds were raised by the Company from any corporate proposals.

2. AUDIT AND NON-AUDIT FEES

The amount of audit fees and non-audit fees incurred for the Company and Group paid or payable to the External Auditors, Messrs. Crowe Horwath, Internal Auditors, Messrs. KPMG Management & Risk Consulting Sdn Bhd and another firm were as follows:

Audit Fees(RM)

Non-Audit Fee (RM)

Company 150,307 85,000Group 402,174 168,680

3. MATERIAL CONTRACTS INVOLVING THE INTEREST OF DIRECTORS, CHIEF EXECUTIVE WHO IS NOT DIRECTOR OR MAJOR SHAREHOLDER

There were no material contracts entered into by the Company and its subsidiaries involving the interests of the Directors or major shareholders in the financial year ended 31 December 2017 or entered into since end of the previous financial year. There is no Chief Executive who is not a Director of the Company.

4. RECURRENT RELATED PARTY TRANSACTION OF A REVENUE NATURE

The Company did not enter into nor seeks mandate from its shareholders on any recurrent related party transaction of a revenue nature during the financial year.

5. LIST OF PROPERTIES

The Company and its subsidiaries do not own any properties.

�nancial Statements75 Directors’ Report

81 Statement by Directors

81 Statutory Declaration

82 Independent Auditors‘ Report

88 Statements of Financial Position

90 Statements of Profit or Loss and Other Comprehensive Income

92 Statements of Changes in Equity

96 Statements of Cash Flows

99 Notes to the Financial Statements

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Directors’ Report

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2017.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding, research, development, marketing and distribution of wireless networking and telecommunication products, networking solutions and other high technology products and services. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

The Group The Company RM’000 RM’000

Loss after taxation for the financial year (16,578) (11,633)

Attributable to:-Owners of the Company (16,197) (11,633)Non-controlling interests (381) -

(16,578) (11,633)

DIVIDENDS

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

RESERVES AND PROVISIONS

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

ISSUES OF SHARES AND DEBENTURES

During the financial year:-

(a) the Company increased its issued and paid-up share capital from RM138,089,344 to RM156,181,928 by way of an issuance of 68,273,900 new ordinary shares for a cash consideration of RM18,092,584 for the acquisition of new business and /or working capital purposes.

The new ordinary shares issued rank pari passu in all respects with the existing ordinary shares of the Company.

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


Directors’ Reportcont’d

TREASURY SHARES

There were no purchases of any ordinary shares from the open market during the financial year.

As at 31 December 2017, the Company held a total of 7,707,700 of its 758,720,619 issued and fully paid-up ordinary shares. The treasury shares are held at a carrying amount of RM12,216,888. Relevant details on the treasury shares are disclosed in Note 22 to the financial statements.

OPTIONS GRANTED OVER UNISSUED SHARES

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

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that there are no known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables.

At the date of this report, the directors are not aware of any circumstances that would require the writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, which were unlikely to be realised in the ordinary course of business, including their value as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.



CONTINGENT AND OTHER LIABILITIES

The contingent liabilities are disclosed in Note 39.1(c) to the financial statements. At the date of this report, there does not exist:-

(a) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or

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

No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

DIRECTORS

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

Tan Sri Datuk Dr. Haji Omar Bin Abdul RahmanTan Sri Dato’ Kok Onn Puan Chan CheongTan Kay Yen A. Shukor Bin S.A. Karim Boey Tak Kong


DIRECTORS (cont’d)

The names of directors of the Company’s subsidiaries who served during the financial year and up to the date of this report, not including those directors mentioned above, are as follows:-

Liew Kok SeongNik Mat Bin IsmailDavid Walter MendesJames David LarsenTang Pen SanTan Ley CheongT.Umadevi a/p S.ThiagarajanNilawati Binti JulaihiYap Chee Siong Datuk Bhupatrai a/l Mansukhlal PremjiShue, Ten HwaChris Chia Woon Liat (Appointed on 8.9.2017)Rashad Khaleel Mousa Bdeiri (Resigned on 31.7.2017)Suhaima Binti Abd Hamid (Resigned on 31.7.2017)Manirajah a/l Kulanthavelu (Resigned on 8.9.2017)Yin Fei (Resigned on 14.11.2017)

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares of the Company and its related corporations during the financial year are as follows:-

Number of Ordinary Shares

The CompanyAt

1.1.2017 Bought SoldAt

31.12.2017

Direct Interests

Puan Chan Cheong 76,320,770 - - 76,320,770Tan Sri Dato’ Kok Onn 2,000,000 3,143,800 - 5,143,800Boey Tak Kong 750,000 1,200,000 - 1,950,000

Indirect Interests

Puan Chan Cheong # 141,000,000 - - 141,000,000Tan Sri Dato’ Kok Onn # 141,000,000 - - 141,000,000

# Deemed interested by virtue of their direct substantial shareholdings in Green Packet Holdings Ltd.

By virtue of their interests in shares in the Company, Puan Chan Cheong and Tan Sri Dato’ Kok Onn are deemed to have interests in the shares in the related corporations during the financial year to the extent of the Company’s interest, in accordance with Section 8 of the Companies Act 2016.

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



DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by directors shown in the financial statements or the fixed salary of a full-time employee of the Company or related corporations) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

DIRECTORS’ REMUNERATION

The details of the directors’ remuneration paid or payable to the directors of the Company during the financial year are disclosed in Note 35 to the financial statements.

INDEMNITY AND INSURANCE COST

The directors and officers of the Group and the Company are covered by directors and officers liability insurance for any liability incurred in the discharge of their duties, provided that they have not acted fraudulently or dishonestly or derived any personal profit or advantage. The insurance premium paid during the financial year amounted to RM37,000. No indemnity was given to or insurance effected for auditors of the Company.

SUBSIDIARIES

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

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year are disclosed in Note 40 to the financial statements.

SIGNIFICANT EVENT OCCURRING AFTER THE REPORTING PERIOD

The significant event occurring after the reporting period is disclosed in Note 41 to the financial statements.



AUDITORS

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

The auditors’ remuneration are disclosed in Note 30 to the financial statements.

Signed in accordance with a resolution of the directors dated 24 April 2018.

Puan Chan Cheong

Tan Kay Yen



We, Puan Chan Cheong and Tan Kay Yen, being two of the directors of Green Packet Berhad, state that, in the opinion of the directors, the financial statements set out on pages 88 to 186 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2017 and of their financial performance and cash flows for the financial year ended on that date.

Signed in accordance with a resolution of the directors dated 24 April 2018.

Puan Chan Cheong Tan Kay Yen

I, Liew Kok Seong, MIA Membership Number: 10099, being the officer primarily responsible for the financial management of Green Packet Berhad, do solemnly and sincerely declare that the financial statements set out on pages 88 to 186 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the declaration to be true and by virtue of the Statutory Declarations Act 1960.

Subscribed and solemnly declared byLiew Kok Seong, I/C No. 680730-10-6985,at Kuala Lumpur in the Federal Territory on this 24 April 2018

Liew Kok SeongBefore me

Pesuruhjaya SumpahLai Din (W668)

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

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


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of Green Packet Berhad, which comprise the statements of financial position as at 31 December 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 88 to 186.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2017, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

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

Independence and Other Ethical Responsibilities

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

Independent Auditors’ ReportTo the Members of Green Packet Berhad(Incorporated in Malaysia) Company No: 534942-H


Key Audit Matters (cont’d)

Valuation of Other InvestmentRefer to Note 8 to the financial statements

Key Audit Matter

The fair value of the investment in Webe Digital Sdn Bhd is determined through the application of valuation techniques by an independent professional valuer engaged by the Group.

We focused on this area as it involved the exercise of significant judgement by the directors and the use of assumptions and estimates.

How our audit addressed the Key Audit Matter Our procedures included, amongst others:-

(a) We assessed the fair value in accordance with Malaysian Financial Reporting Standard 13 – Fair Value Measurement.

(b) We evaluated the objectivity, independence and capabilities of the independent professional valuer.

(c) We assessed the appropriateness of the valuation techniques and checked the reasonableness of the discount rate and terminal growth rate used, with the assistance of our valuation experts.

(d) We discussed with management the key assumptions used in the valuation model.

(e) We also checked the sensitivity analysis on revenue growth, profit margins and discount rate.

Recoverability of Trade ReceivablesRefer to Note 14 and Note 39.1(b)(iii) to the financial statements

Key Audit Matter

Trade receivables are a major component of the statement financial position of the Group and the debts past due have significantly increased as compared to the previous financial year.

We focused on this area as the adequacy of the impairment loss for trade receivables involved the use of judgement.

How our audit addressed the Key Audit Matter

Our procedures included, amongst others:-

(a) We considered the history of cash receipts, and post year end cash receipts from the customers.

(b) We tested the adequacy of the Group’s impairment loss on trade receivables by assessing the relevant assumptions taking account of our own knowledge of recent collection experience and also historical data from the Group’s previous collection experiences.

(c) We also considered other payment arrangements between the group and its customers in the communication services segment.

Independent Auditors’ ReportTo the Members of Green Packet Berhad

(Incorporated in Malaysia) Company No: 534942-Hcont’d


Key Audit Matters (cont’d)

Impairment of development costs and other intangible assetsRefer to Note 10 and Note 11 to the financial statements

Key Audit Matter

As disclosed in Note 10 and Note 11 to the financial statements, development costs and other intangible assets as at the reporting date amounted to RM8.53 million and RM9.94 million, respectively.

The development costs and other intangible assets are subject to impairment assessment. The assessment has been performed by comparing the carrying amounts to their corresponding recoverable amounts.

The recoverable amounts were determined using the value-in-use method, based on future financial information.

We focused on these areas as significant judgement and estimates are applied in determining the recoverable amounts.

How our audit addressed the key audit matter

Our procedures included, amongst others:- (a) We obtained management’s impairment analysis

and gained an understanding of their impairment assessment process.

(b) We reviewed the reasonableness of the key assumptions used and judgement made in determining the recoverable amount.

(c) We also checked the sensitivity analysis on revenue growth, profit margins and discount rate.

Independent Auditors’ ReportTo the Members of Green Packet Berhad(Incorporated in Malaysia) Company No: 534942-Hcont’d


Information Other than the Financial Statements and Auditors’ Report Thereon

The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

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

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

Responsibilities of Directors for the Financial Statements

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

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

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.




Auditors’ Responsibilities for the Audit of the Financial Statements (cont’d)

As a part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:-

l 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.

l Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

l Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

l 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.

l 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.

Independent Auditors’ ReportTo the Members of Green Packet Berhad(Incorporated in Malaysia) Company No: 534942-Hcont’d


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 5 to the financial statements.

OTHER MATTERS

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

Crowe Horwath Ooi Song WanFirm No: AF 1018 Approval No: 02901/10/2018 JChartered Accountants Chartered Accountant

Kuala Lumpur24 April 2018




The Group The Company2017 2016 2017 2016

Note RM’000 RM’000 RM’000 RM’000

ASSETS

NON-CURRENT ASSETSInvestments in subsidiaries 5 - - 39,082 39,692Investments in associates 6 38,099 17,472 35,037 18,250Plant and equipment 7 6,626 4,731 1,677 1,924Other investments 8 267,621 209,623 58,135 137Goodwill 9 2,481 - - -Development costs 10 8,534 652 6,252 -Other intangible assets 11 9,941 - - -Deferred tax assets 12 - - 320 360

333,302 232,478 140,503 60,363

CURRENT ASSETS

Inventories 13 1,347 800 109 199Trade receivables 14 148,077 141,076 275 21,298Other receivables, deposits and

prepayments 15 9,318 23,865 2,873 11,043Amount owing by subsidiaries 16 - - 240,117 220,124Amount owing by associates 17 18,572 - - -Amount owing by a related party 18 - - 18,240 -Current tax assets 2,479 - 2,407 873Short-term investments 19 1,185 14,813 1 13,882Fixed deposits with licensed banks 20 9,786 13,336 3,192 5,050Cash and bank balances 31,110 34,257 2,713 6,226

221,874 228,147 269,927 278,695

TOTAL ASSETS 555,176 460,625 410,430 339,058

Statements of Financial PositionAt 31 December 2017

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



Note RM’000 RM’000 RM’000 RM’000

EQUITY AND LIABILITIES

EQUITYShare capital 21 155,880 138,089 155,880 138,089Treasury shares 22 (12,217) (12,217) (12,217) (12,217)Reserves 23 24,096 4,182 (2,459) (31,134)

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 167,759 130,054 141,204 94,738

NON-CONTROLLING INTERESTS 1,723 88 - -

TOTAL EQUITY 169,482 130,142 141,204 94,738

NON-CURRENT LIABILITIESHire purchase payables 24 260 364 260 364Exchangeable Medium Term Notes 25 233,711 216,387 233,711 216,387Term loans 26 410 - - -Deferred tax liabilities 12 2,481 86 - -

236,862 216,837 233,971 216,751

CURRENT LIABILITIES

Trade payables 27 128,537 89,504 1 1,254Other payables and accruals 28 17,525 23,256 2,209 2,397Amount owing to subsidiaries 16 - - 30,578 23,326Amount owing to associates 17 2,347 - 2,347 -Amount owing to a related party 18 - 456 - 456Current tax liabilities - 294 - -Hire purchase payables 24 120 136 120 136Term loans 26 303 - - -

148,832 113,646 35,255 27,569

TOTAL LIABILITIES 385,694 330,483 269,226 244,320

TOTAL EQUITY AND LIABILITIES 555,176 460,625 410,430 339,058

Statements of Financial PositionAt 31 December 2017

cont’d




Note RM’000 RM’000 RM’000 RM’000

REVENUE 29 358,944 366,251 11,231 84,300COST OF SALES (326,847) (325,511) (3,920) (70,964)

GROSS PROFIT 32,097 40,740 7,311 13,336OTHER INCOME 11,713 153,523 14,186 7,949

43,810 194,263 21,497 21,285ADMINISTRATIVE EXPENSES (30,831) (29,510) (10,688) (11,045)SELLING AND DISTRIBUTION EXPENSES (4,041) (4,705) - -OTHER EXPENSES (6,077) (12,116) (5,822) (34,719)FINANCE COSTS (17,667) (16,372) (17,379) (16,196)SHARE OF RESULT IN ASSOCIATES,

NET OF TAX (2,620) (56,617) - -

(LOSS)/PROFIT BEFORE TAXATION 30 (17,426) 74,943 (12,392) (40,675)INCOME TAX EXPENSE 31 848 (4,279) 759 (2,717)

(LOSS)/PROFIT AFTER TAXATION (16,578) 70,664 (11,633) (43,392)

OTHER COMPREHENSIVE INCOME, NET OF TAXItem that may be reclassified subsequently

to profit or loss:- Foreign currency translation (4,217) 2,015 (20) 16- Fair value changes of available-for-sale

financial assets 40,328 - 40,328 -

36,111 2,015 40,308 16

TOTAL COMPREHENSIVE INCOME/(EXPENSES) FOR THE FINANCIAL YEAR 19,533 72,679 28,675 (43,376)

Statements of Profit or Loss and Other Comprehensive IncomeFor the Financial Year Ended 31 December 2017




Note RM’000 RM’000 RM’000 RM’000

(LOSS)/PROFIT AFTER TAXATION ATTRIBUTABLE TO:-Owners of the Company (16,197) 70,688 (11,633) (43,392)Non-controlling interests (381) (24) - -

(16,578) 70,664 (11,633) (43,392)

TOTAL COMPREHENSIVE INCOME/(EXPENSES) ATTRIBUTABLE TO:-Owners of the Company 19,914 72,703 28,675 (43,376)Non-controlling interests (381) (24) - -

19,533 72,679 28,675 (43,376)

(LOSS)/EARNINGS PER SHARE (SEN)Basic: 32 (2) 10

Diluted 32 (2) 10

Statements of Profit or Loss and Other Comprehensive IncomeFor the Financial Year Ended 31 December 2017

cont’d



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Statements of Changes in EquityFor the Financial Year Ended 31 December 2017

The

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n in

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9,48

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cont’d

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n in

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(43,

392)

(43,

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613

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8)-

(443

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,738

Statements of Changes in EquityFor the Financial Year Ended 31 December 2017cont’d

The

anne

xed

note

s fo

rm a

n in

tegr

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(11,

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40,

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(20)

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sact

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with

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ners

of t

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2117

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--

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-17

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--

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at 3

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55,5

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204


cont’d

The

anne

xed

note

s fo

rm a

n in

tegr

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art o

f the

se fi

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ial s

tate

men

ts.



Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES

(Loss)/Profit before taxation: (17,426) 74,943 (12,392) (40,675)

Adjustments for:-Amortisation of:- development costs 36 1,012 - 1,012- intellectual property - 1,001 - 1,001- trademark and patents 16 - - -Depreciation of plant and equipment 2,926 1,433 490 341Equipment written off 82 - 44 -Impairment loss on:- development costs - 4,600 - 2,716- trade receivables 106 195 - 149- amount owing by subsidiaries - - 3,017 15,000- investments in subsidiaries - - 610 13,984- intellectual property - 890 - 890- goodwill - 5,799 - -Interest expense 17,380 16,081 17,340 16,081Inventories written off 364 1,277 - 928Share of loss of associates 2,620 56,617 - -Gain on disposal of plant and equipment - (87) - (87)Unrealised loss/(gain) on foreign exchange 2,220 (1,306) 1,618 (568)Interest income (1,043) (1,548) (3,829) (4,190)Gain on dilution of associates - (49,391) - -Gain on fair value adjustments (10,082) (98,247) (10,082) -Writeback of inventories written off (2) (535) (2) (535)

Operating (loss)/profit before working capital changes/Balance carried forward (2,803) 12,734 (3,186) 6,047

Statements of Cash FlowsFor the Financial Year Ended 31 December 2017




Note RM’000 RM’000 RM’000 RM’000

Balance brought forward (2,803) 12,734 (3,186) 6,047(Increase)/Decrease in inventories (909) 13,282 92 14,108(Increase)/Decrease in trade and other

receivables (4,915) (34,647) 28,714 (11,157)Increase/(Decrease) in trade and other

payables 42,285 21,769 (1,391) (20,461)Decrease/(Increase) in amount owing by

subsidiaries - - 11,462 (446)Decrease in amount owing to subsidiaries - - - (459)

CASH FROM/(FOR) OPERATIONS 33,658 13,138 35,691 (12,368)Interest paid (56) (10) (735) (10)Tax paid (1,939) (3,441) (16) (700)

NET CASH FROM/(FOR) OPERATING ACTIVITIES 31,663 9,687 34,940 (13,078)

CASH FLOWS FOR INVESTING ACTIVITIESAdditional investment in subsidiaries - - - (7,054)Acquisition of subsidiaries 33 (8,013) - - -Advances to associates (19,028) - - -Advances to a related party - - (18,240) -Purchase of associate (23,247) (18,250) (16,787) (18,250)Purchase of other investments (7,588) - (7,588) -Purchase of plant and equipment 34(a) (3,537) (2,096) (332) (1,156)Proceeds from disposal of plant and

equipment - 87 - 87Purchase of treasury shares - (828) - (828)Development costs incurred (7,918) (652) (6,252) -(Advances to)/Repayment from subsidiaries - - (31,832) 11,006Subscription of shares in a subsidiary by

non-controlling interest 152 - - -Interest received 1,043 1,548 518 1,116Net withdrawal/(placement) of fixed deposits

pledged with a licensed bank 4,378 (725) 2,616 6,248

NET CASH FOR INVESTING ACTIVITIES (63,758) (20,916) (77,897) (8,831)

Statements of Cash FlowsFor the Financial Year Ended 31 December 2017

cont’d




Note RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(FOR) FINANCING ACTIVITIES

Advances from subsidiaries 34(b) - - 7,349 7,358Advances from associates 34(b) 2,347 - 2,347 -Repayment to related parties 34(b) (456) (316) (456) (316)Net proceeds from issuance of ordinary

shares 17,791 - 17,791 -Net drawdown of term loans 34(b) (290) - - -Repayment of hire purchase obligations 34(b) (120) (70) (120) (70)

NET CASH FROM/(FOR) FINANCING ACTIVITIES 19,272 (386) 26,911 6,972

NET DECREASE IN CASH AND CASH EQUIVALENTS (12,823) (11,615) (16,046) (14,937)

Foreign exchange translation differences (3,124) 1,659 (590) (34)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 49,075 59,031 20,108 35,079

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 34(c) 33,128 49,075 3,472 20,108


Statements of Cash FlowsFor the Financial Year Ended 31 December 2017cont’d


1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia. The registered office which is also the principal place of business, is at B-23A-3, The Ascent, Paradigm, No. 1, Jalan SS7/26A, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 24 April 2018.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding, research, development, marketing and distribution of wireless networking and telecommunication products, networking solutions and other high technology products and services. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. BASIS OF PREPARATION

The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

3.1 During the current financial year, the Group has adopted the following new accounting standards and/or interpretations (including the consequential amendments, if any):-

MFRSs and/or IC Interpretations (Including The Consequential Amendments)Amendments to MFRS 107: Disclosure InitiativeAmendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealised LossesAnnual Improvements to MFRS Standards 2014 – 2016 Cycles: Amendments to MFRS 12: Clarification of the Scope of the Standard

The adoption of the above accounting standards and/or interpretations (including the consequential

amendments, if any) did not have any material impact on the Group’s financial statements except as follows:-

The amendments to MFRS 107 require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. A reconciliation between opening and closing balances of these items is provided in Note 34(b) to the financial statements.

Notes to the Financial StatementsFor the Financial Year Ended 31 December 2017


Notes to the Financial StatementsFor the Financial Year Ended 31 December 2017cont’d

3. BASIS OF PREPARATION (cont’d)

3.2 The Group has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:-

MFRSs and/or IC Interpretations (Including The Consequential Amendments) Effective Date

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) 1 January 2018MFRS 15 Revenue from Contracts with Customers 1 January 2018MFRS 16 Leases 1 January 2019MFRS 17 Insurance Contracts 1 January 2021IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018IC Interpretation 23 Uncertainty over Income Tax Treatments 1 January 2019Amendments to MFRS 2: Classification and Measurement of Share-based

Payment Transactions 1 January 2018Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4

Insurance Contracts 1 January 2018Amendments to MFRS 9: Prepayment Features with Negative Compensation 1 January 2019Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between

an Investor and its Associate or Joint Venture DeferredAmendments to MFRS 15: Effective Date of MFRS 15 1 January 2018Amendments to MFRS 15: Clarifications to MFRS 15 ‘Revenue from Contracts

with Customers’ 1 January 2018Amendments to MFRS 119: Plan Amendment, Curtailment or Settlement 1 January 2019Amendments to MFRS 128: Long-term Interests in Associates and Joint

Ventures 1 January 2019Amendments to MFRS 140 – Transfers of Investment Property 1 January 2018Annual Improvements to MFRS Standards 2014 – 2017 Cycles:l Amendments to MFRS 1: Deletion of Short-term Exemptions for First-time

Adoptersl Amendments to MFRS 128: Measuring an Associate or Joint Venture at Fair

Value 1 January 2018Annual improvements to MFRS Standards 2015 – 2017 Cycles 1 January 2019



cont’d


3.2 The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application except as follows:-

(a) MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces the guidance in MFRS 139 on the classification and measurement of financial assets and financial liabilities, impairment of financial assets and on hedge accounting.

The initial application of MFRS 9 is not expected to have any material impact to the financial statements of the Group for the current financial year and prior periods as the Group will apply the standard retrospectively from 1 January 2018 with the practical expedients permitted under the standard, and that the comparatives (i.e. current period financial information) will not be restated.

Based on the assessments undertaken to date, the Group has determined the impact of its initial application of MFRS 9 as follows:-

Classification and Measurement

The Group does not expect a significant impact on its statements of financial position on applying the classification and measurement requirements of MFRS 9.

Loans and receivables financial assets are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analysed the contractual cash flow characteristics of these instruments and concluded that they meet the criteria to be measured at amortised cost under MFRS 9. Therefore, the Group does not expect the standard to affect the measurement of its debt financial assets.

In addition, the Group expects to continue measuring at fair value all financial assets currently held at fair value.

Impairment of Financial Assets

MFRS 9 replaces the ‘incurred loss’ model in MFRS 139 with an ‘expected credit loss’ (“ECL”) model. In view of strong creditworthiness of the Group’s receivables, the Group has concluded that the expected impacts of ECL on trade and other receivables (including related party balances) are insignificant upon the initial application of MFRS 9.

The analysis above are based on the assessments undertaken to date and may be subject to changes arising from further detailed analyses or additional reasonable and supportable information being made available to the Group in the future.




3.2 The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application except as follows:- (cont’d)

(b) MFRS 15 establishes a single comprehensive model for revenue recognition and will supersede the current revenue recognition guidance and other related interpretations when it becomes effective. Under MFRS 15, an entity shall recognise revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the distinct promised goods or services underlying the particular performance obligation is transferred to the customers. The amendments to MFRS 15 further clarify the concept of ‘distinct’ for the purposes of this accounting standard. In addition, extensive disclosures are also required by MFRS 15 about the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers.

As at the date of authorisation of issue of the financial statements, the assessment of implementing MFRS 15 has not been finalised. Thus, the potential impact of the adoption of this standard cannot be determined and estimated reliably until the assessment is completed later.

(c) MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and will replace the current guidance on lease accounting when it becomes effective. Under MFRS 16, the classification of leases as either finance leases or operating leases is eliminated for lessees. All lessees are required to recognise their leased assets and the related lease obligations in the statement of financial position (with limited exceptions). The leased assets are subject to depreciation and the interest on lease liabilities are calculated using the effective interest method. The Group anticipates that the application of MFRS 16 in the future may have an impact on the amounts reported and disclosures made in the financial statements. However, it is not practicable to provide a reasonable estimate of the financial impacts of MFRS 16 until the Group performs a detailed review.



cont’d

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Key Sources of Estimation Uncertainty

Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year other than as disclosed below:-

(a) Depreciation of Plant and Equipment and Amortisation of Development Costs

The estimates for the residual values, useful lives and related depreciation and amortisation charges for the plant and equipment and development costs are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Group anticipates that the residual values of its plant and equipment and development costs will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable and amortisation amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation and amortisation charges could be revised. The carrying amount of plant and equipment and development costs as at the reporting date are disclosed in Note 7 and Note 10 to the financial statements.

(b) Impairment of Goodwill

The assessment of whether goodwill is impaired requires an estimation of the value in use of the cash-generating unit to which the goodwill is allocated. Estimating a value in use amount requires management to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at the reporting date is disclosed in Note 9 to the financial statements.

(c) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax expense and deferred tax balances in the year in which such determination is made. The carrying amount of the Group and Company’s current tax asset as at the reporting date is RM2,478,976 (2016 – Nil) and RM 2,406,594 (2016 - RM872,582), respectively. The carrying amount of the Group’s current tax liabilities as at previous reporting date was RM294,036.



4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d) Key Sources of Estimation Uncertainty (cont’d)

(d) Write-down of Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories. The carrying amount of inventories as at the reporting date is disclosed in Note 13 to the financial statements.

(e) Deferred Tax Assets

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unabsorbed capital allowances to the extent that it is probable that future taxable profits would be available against which the deductible temporary differences, unused tax losses and unabsorbed capital allowances could be utilised. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the assessment of the probability of the future taxable profits. The carrying amount of deferred tax assets as at the reporting date is disclosed in Note 12 to the financial statements.

(f) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables. The carrying amount of trade receivables and other receivables as at the reporting date is disclosed in Note 14 and Note 15 to the financial statements.

(g) Impairment of Available-for-sale Financial Assets

The Group reviews its available-for-sale financial assets at the end of each reporting period to assess whether they are impaired. The Group also records impairment loss on available-for-sale equity investments when there has been a significant or prolonged decline in the fair value below their cost. The determination of what is “significant’ or “prolonged” requires judgement. In making this judgement, the Group evaluates, among other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost. The carrying amount of available-for-sale equity investments as at the reporting date is disclosed in Note 8 to the financial statements.



cont’d


4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d) Key Sources of Estimation Uncertainty (cont’d)

(h) Impairment of Development Costs and Other Intangible Assets

The assessment of whether development costs and other intangible assets are impaired requires an estimation of the value in use of the cash-generating unit to which these assets are allocated. Estimating a value in use amount requires management to make an estimate of the expected future cash flows from the cash generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of development costs and other intangible assets as at the reporting date are disclosed in Note 10 and note II to the financial statements.

(i) Impairment of Plant and Equipment and Investments in Associates

The Group determines whether its plant and equipment and investments in associates are impaired by evaluating the extent to which the recoverable amount of the assets are less than their carrying amounts. This evaluation is subject to changes such as market performance, economic and political situation of the country. A variety of methods is used to determine the recoverable amount, such as valuation reports and discounted cash flows. For discounted cash flows, significant judgement is required in the estimation of the present value of future cash flows generated by the assets, which involve uncertainties and are significantly affected by assumptions used and judgements made regarding estimates of future cash flows and discount rates. The carrying amount of plant and equipment and investments in associates as at the reporting date are disclosed in Note 7 and Note 6 to the financial statements.

Critical Judgements Made in Applying Accounting Policies

Management believes that there are no instances of application of critical judgement in applying the Group’s accounting policies which will have a significant effect on the amounts recognised in the financial statements other than as disclosed below:-

(a) Fair Value Estimate for Certain Financial Assets

The Group carries certain financial assets at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets would affect profit and/or equity.

(b) Contingent Liabilities

The recognition and measurement for contingent liabilities is based on management’s view of the expected outcome on contingencies after consulting legal counsel for litigation cases and experts for matters in the ordinary course of business. The directors are of the view that the chances of the financial institutions to call upon the corporate guarantees issued by the Group and the Company are remote.




4.2 BASIS OF CONSOLIDATION

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period.

Subsidiaries are entities (including structured entities, if any) controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

(a) Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss when incurred.

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

Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.

(b) Non-controlling Interests

Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from the equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.



cont’d


4.2 BASIS OF CONSOLIDATION (cont’d)

(c) Changes in Ownership Interests In Subsidiaries Without Change of Control

All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity of the Group.

(d) Loss of Control

Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit or loss which is calculated as the difference between:-

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests.

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

4.3 GOODWILL

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities at the date of acquisition is recorded as goodwill.

Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised as a gain in profit or loss.

In respect of equity-accounted associates, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill that forms part of the carrying amount of the equity-accounted associates.




4.4 FUNCTIONAL AND FOREIGN CURRENCIES

(a) Functional and Presentation Currency

The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional and presentation currency and has been rounded to the nearest thousand unless otherwise stated.

(b) Foreign Currency Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss except for differences arising from the translation of available-for-sale equity instruments which are recognised in other comprehensive income.

(c) Foreign Operations

Assets and liabilities of foreign operations are translated to the Group’s presentation currency at the exchange rates at the end of the reporting period. Income, expenses and other comprehensive income of foreign operations are translated at exchange rates at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity; attributed to the owners of the Company and non-controlling interests, as appropriate.

Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period except for those business combinations that occurred before the date of transition (1 January 2012) which are treated as assets and liabilities of the Company and are not retranslated.

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign subsidiary, or a partial disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that foreign operation attributable to the owners of the Company are reclassified to profit or loss as part of the gain or loss on disposal. The portion that related to non-controlling interests is derecognised but is not reclassified to profit or loss.



cont’d


4.4 FUNCTIONAL AND FOREIGN CURRENCIES (cont’d)

(c) Foreign Operations (cont’d)

In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non-controlling interests and are not recognised in profit or loss. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the proportionate share of the accumulative exchange differences is reclassified to profit or loss.

In the consolidated financial statements, when settlement of an intragroup loan is neither planned nor likely to occur in the foreseeable future, the exchange differences arising from translating such monetary item are considered to form part of a net investment in the foreign operation and are recognised in other comprehensive income.

4.5 FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised in the statements of financial position when

the Group has become a party to the contractual provisions of the instruments.

Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.

Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

(a) Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.




4.5 FINANCIAL INSTRUMENTS (cont’d)

(a) Financial Assets (cont’d)

(i) Financial Assets at Fair Value through Profit or Loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. Fair value through profit or loss category also comprises contingent consideration in a business combination.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Group’s right to receive payment is established.

Financial assets at fair value through profit or loss could be presented as current assets or non-current assets. Financial assets that are held primarily for trading purposes are presented as current assets whereas financial assets that are not held primarily for trading purposes are presented as current assets or non-current assets based on the settlement date.

(ii) Held-to-maturity Investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with interest income recognised in profit or loss on an effective yield basis.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current assets.

(iii) Loans and Receivables Financial Assets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.



cont’d



(a) Financial Assets (cont’d)

(iii) Loans and Receivables Financial Assets (cont’d)

Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets.

(iv) Available-for-sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories.

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

(b) Financial Liabilities

(i) Financial Liabilities at Fair Value through Profit or Loss Fair value through profit or loss category comprised financial liabilities that are either

held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. Fair value through profit or loss category also comprises contingent consideration in a business combination.

(ii) Other Financial Liabilities

Other financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.





(b) Financial Liabilities (cont’d)

Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(c) Equity Instruments

Instruments classified as equity are measured at cost and are not remeasured subsequently.

(i) Ordinary Shares

Ordinary shares are classified as equity and recorded at the proceeds received, net of directly attributable transaction costs.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(ii) Treasury Shares

When the Company’s own shares recognised as equity are bought back, the amount of the consideration paid, including all costs directly attributable, are recognised as a deduction from equity. Own shares purchased that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares.

Where treasury shares are reissued by resale, the difference between the sales consideration received and the carrying amount of the treasury shares in recognised in equity.

Where treasury shares are cancelled, their costs are transferred to retained profits. (d) Derecognition

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

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



cont’d



(e) Financial Guarantee Contracts

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

Financial guarantee contracts are recognised initially as liabilities at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee or, when there is no specific contractual period, recognised in profit or loss upon discharge of the guarantee. If the debtor fails to make payment relating to a financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the end of the reporting period and the amount initially recognised less cumulative amortisation.

4.6 INVESTMENTS IN SUBSIDIARIES

Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investments includes transaction costs.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.

4.7 INVESTMENTS IN ASSOCIATES

An associate is an entity in which the Group has a long-term equity interest and where it exercises significant influence over the financial and operating policies.

Investments in associates are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investment includes transaction costs.

The investment in an associate is accounted for in the consolidated financial statements using the equity method, based on the financial statements of the associate made up to 31 December 2017. The Group’s share of the post acquisition profits and other comprehensive income of the associate is included in the consolidated statement of profit or loss and other comprehensive income, after adjustment if any, to align the accounting policies with those of the Group, from the date that significant influence commences up to the effective date on which significant influence ceases or when the investment is classified as held for sale. The Group’s interest in the associate is carried in the consolidated statement of financial position at cost plus the Group’s share of the post acquisition retained profits and reserves. The cost of investment includes transaction costs.




4.7 INVESTMENTS IN ASSOCIATES (cont’d)

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation.

Unrealised gains or losses on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered.

When the Group ceases to have significant influence over an associate and the retained interest in the former associate is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as the initial carrying amount of the financial asset in accordance with MFRS 139. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that associate into profit or loss when the equity method is discontinued.

4.8 PLANT AND EQUIPMENT

All items of plant and equipment are initially measured at cost. Cost includes expenditure that are directly attributable to the acquisition of the asset and other costs directly attributable to bringing the asset to working condition for its intended use.

Subsequent to initial recognition, all plant and equipment, are stated at cost less accumulated depreciation and any impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of plant and equipment are recognised in profit or loss as incurred.

Depreciation on other plant and equipment is charged to profit or loss (unless it is included in the carrying amount of another asset) on a straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Motor vehicles 20%Plant and machinery 25% - 33%Office equipment 10% - 20%Furniture and fittings 10% - 20%Computer equipment 17% - 33%Renovation 10% - 50%Computer software 20% - 33%



cont’d


4.8 PLANT AND EQUIPMENT (cont’d)

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the plant and equipment. Any changes are accounted for as a change in estimate.

When significant parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (major components) of plant and equipment.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset, being the difference between the net disposal proceeds and the carrying amount, is recognised in profit or loss. The revaluation reserve included in equity is transferred directly to retained profits on retirement or disposal of the asset.

4.9 INTANGIBLE ASSETS

An intangible asset shall be recognised if, and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and that the cost of the asset can be measured reliably. An entity shall assess the probability of the expected future economic benefits using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset. An intangible asset shall be measured initially at cost.

The useful lives of intangible assets are assessed to be either finite or indefinite.

Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.

4.10 INTELLECTUAL PROPERTY

The intellectual property consists of the acquisition cost of the exclusive rights of a suite of software modules, including the trademarks, copyright, source codes and associated documentation. The acquisition cost is capitalised as an intangible asset as it is able to generate future economic benefits to the Group.




4.10 INTELLECTUAL PROPERTY (cont’d)

The intellectual property is amortised on a straight-line basis over the period of 10 years during which its economic benefits are expected to be consumed.

4.11 RESEARCH AND DEVELOPMENT EXPENDITURE

Research expenditure is recognised as an expense when it is incurred.

Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as non-current assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an entity can demonstrate all of the following:-

(a) its ability to measure reliably the expenditure attributable to the asset under development; (b) the product or process is technically and commercially feasible; (c) its future economic benefits are probable; (d) its intention to complete and the ability to use or sell the developed asset; and (e) the availability of adequate technical, financial and other resources to complete the asset under

development.

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the subsequent period.

The development expenditure is amortised on a straight-line method over period of 3 years when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its recoverable amount.

The amortisation method, useful life and residual value are reviewed, and adjusted if appropriate, at the end of each reporting period.

4.12 IMPAIRMENT

(a) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss, investments in subsidiaries and investments in associates), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be an objective evidence of impairment.

An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.



cont’d


4.12 IMPAIRMENT (cont’d)

(a) Impairment of Financial Assets (cont’d)

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassified from equity into profit or loss.

With the exception of available-for-sale debt instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(b) Impairment of Non-financial Assets

The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when an annual impairment assessment is compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow using a pre-tax discount rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating units and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rate basis.




4.12 IMPAIRMENT (cont’d)

(b) Impairment of Non-financial Assets (cont’d)

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

4.13 LEASED ASSETS

(a) Finance Assets

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. The corresponding liability is included in the statement of financial position as hire purchase payables.

Minimum lease payments made under finance leases are apportioned between the finance costs and the reduction of the outstanding liability. The finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss and allocated over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each accounting period.

Leasehold land which in substance is a finance lease is classified as plant and equipment.

(b) Operating Lease

All leases that do not transfer substantially to the Group all the risks and rewards incidental to ownership are classified as operating leases and, the leased assets are not recognised on the statement of financial position of the Group.

Payments made under operating leases are recognised as an expense in the profit or loss on a straight-line method over the term of the lease. Lease incentives received are recognised as a reduction of rental expense over the lease term on a straight-line method. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

4.14 INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-out method and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition.

Net realisable value represents the estimated selling price less the estimated costs of completion

and the estimated costs necessary to make the sale.



cont’d


4.14 INVENTORIES (cont’d)

During the financial year, the Group changed the cost formula used for inventories from weighted average cost method to first-in, first-out cost method. The effect of the change in cost method has no significant effect on the financial results of the Group for the current financial year.

4.15 INCOME TAXES

(a) Current Tax

Current tax assets and liabilities are expected amount of income tax recoverable or payable to the taxation authorities.

Current taxes are measured using tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period and are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss (either in other comprehensive income or directly in equity).

(b) Deferred Tax

Deferred tax are recognised using the liability method for all temporary differences other than those that arise from goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that the related tax benefits will be realised.

Current and deferred tax items are recognised in correlation to the underlying transactions either in profit or loss, other comprehensive income or directly in equity. Deferred tax arising from a business combination is adjusted against goodwill or negative goodwill.

Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity (or on different tax entities but they intend to settle current tax assets and liabilities on a net basis) and the same taxation authority.




4.15 INCOME TAXES (cont’d)

(c) Goods and Services Tax (“GST”)

Revenues, expenses and assets are recognised net of GST except for the GST in a purchase of assets or services which are not recoverable from the taxation authorities, the GST are included as part of the costs of the assets acquired or as part of the expense item whichever is applicable.

In addition, receivables and payables are stated with the amount of GST included (where applicable).

The net amount of the GST recoverable from or payable to the taxation authorities at the end of the reporting period is included in other receivables or other payables.

4.16 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.

4.17 PROVISIONS

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. The unwinding of the discount is recognised as interest expense in profit or loss.

4.18 EMPLOYEE BENEFITS

(a) Short-term Benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss and included in the development costs, where appropriate, in the period in which the associated services are rendered by employees of the Group.

(b) Defined Contribution Plans

The Group’s contributions to defined contribution plans are recognised in profit or loss and included in the development costs, where appropriate, in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.



cont’d


4.19 CONTINGENT LIABILITIES

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements, unless the probability of outflow of economic benefits is remote. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

4.20 FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. However, this basis does not apply to share-based payment transactions.

For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:-

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical asset or liability that the entity can access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3: Inputs are unobservable inputs for the asset or liability.

The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.

4.21 REVENUE AND OTHER INCOME

Revenue is measured at the fair value of the consideration received or receivable, net of returns, cash and trade discounts.

(a) Sale of Goods

Revenue from sale of goods is recognised when significant risks and rewards of ownership of the goods have been transferred to the buyer and where the Group does not have continuing managerial involvement and effective control over the goods sold.




4.21 REVENUE AND OTHER INCOME (cont’d)

(b) Services

Revenue is recognised upon the rendering of services and when the outcome of the transaction can be estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable.

(c) Interest Income

Interest income is recognised on an accrual basis using the effective interest method.

(d) Dividend Income

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

4.22 OPERATING SEGMENTS

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

4.23 BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. The capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

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

4.24 EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share is calculated by dividing the consolidated profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period, adjusted for own shares held.



cont’d

5. INVESTMENTS IN SUBSIDIARIES

The Company2017 2016

RM’000 RM’000

Unquoted shares, at cost- in Malaysia 49,003 49,003- outside Malaysia 64,001 64,055

113,004 113,058

Accumulated impairment losses:-

At 1 January (73,366) (59,382)Addition during the financial year (610) (13,984)Reversal of impairment loss 54 -

At 31 December (73,922) (73,366)

39,082 39,692 The details of the subsidiaries are as follows:-

Name of Subsidiary

Principal Place of Business/Country of

Incorporation

Percentage of Issued Share Capital Held by

Parent Principal Activities2017 2016

% %

Green Packet (Shanghai) Ltd. *

The People’sRepublic of

China

100 100 Research, development, marketing and distribution of wireless networking and telecommunications products and solutions.

Green Packet (Australia) Pty. Ltd. (“GPA”) ^

Australia 100 100 Marketing of wireless broadband equipment, systems and solutions.

Green Packet International Sdn. Bhd. (“GPISB”)

Malaysia 100 100 Providing shared service function including finance, human resources, IT, administrative and others.

Packet One Sdn. Bhd. (“POSB”)

Malaysia 100 100 Investment holding.



5. INVESTMENTS IN SUBSIDIARIES (cont’d)

Name of Subsidiary


Incorporation



% %

First Wireless Sdn. Bhd. (“FWSB”)

Malaysia 70 70 Development and marketing of wireless broadband equipment, systems and solutions.

Next Telecommunications Sdn. Bhd. (“NTSB”)

Malaysia 100 100 Provision of total communication services, solutions and products.

Next Global Technology Sdn. Bhd. (“NGTSB”) ^^(In Member’s Voluntary

Winding-up)

Malaysia - 100 Research and development of total value added data network and communication services.

Packet Interactive Sdn. Bhd. (“PISB”)

Malaysia 100 100 Provision of total contents and value added services.

Green Packet Networks S.P.C (“GPNSPC”) @ ©

Kingdom of Bahrain

100 100 Supply and management of telecommunications network equipment.

Green Packet Networks (Taiwan) Pte. Ltd. (“GPNTPL”) *

Taiwan 100 100 Marketing and distribution of wireless networking and telecommunications products, networking solutions and other high technology products and services.

NGT Networks Pte. Ltd. @ # The Republic of Singapore

100 100 Provision of international voice traffic.

Vivohub Mobile Pte. Ltd. (“VMPL”) @ #

The Republic of Singapore

60 - Mobile cellular and other wireless telecommunications network operation; and Retail sale of handphones and other telecommunications apparatus.

Worldline Enterprise Sdn. Bhd. (“WESB”)

Malaysia 100 100 Letting and management of properties and property investment.



cont’d


Name of Subsidiary


Incorporation



% %

Green Packet (S) Pte. Ltd. (“GPS”) @


100 100 Provision of wireless networking, telecommunication products, networking solutions and activities relating to high technology products and services.

Inova Venture Pte. Ltd. (“IVPL”) ^^(In Member’s Voluntary

Winding-up)


- 71 Provision of support services to telecommunication industry, general importers and exporters.

Enrich Bonus Sdn. Bhd. (“EBSB”)

Malaysia 100 100 Dormant.

Kiple Sdn. Bhd. (“KSB”) & Malaysia 100 100 Provision of internet portal services, e-commerce and other web related business.

Kiple Media Sdn. Bhd. ~ Malaysia 100 - Business of the media service provider.

Webonline Dot Com Sdn. Bhd (“WDCSB”) * &

Malaysia 80 - Provision of internet portal services, e-commerce and other web related business.

Mobiduu Solutions Sdn. Bhd. (“MSSB”) &

Malaysia 100 - Mobile application development.

* Thesesubsidiarieswereauditedbyotherfirmsofcharteredaccountants. @ ThesesubsidiarieswereauditedbymemberfirmsofCroweHorwathInternationalofwhichCroweHorwathisa

member. © Theauditors’ report on the financial statementsof the subsidiary containedan emphasis ofmatter on the

preparationoffinancialstatementsonagoingconcernbasis. # Held through NTSB. ^ The subsidiary is under member’s voluntary liquidation. ^^ Thesubsidiarieshadbeenliquidatedduringthecurrentfinancialyear. ~ There isnoaudit carriedouton thesubsidiary for thefinancial yearas itwas incorporatedon7September

2017. & Held through PISB.




(a) During the financial year,

(i) the Company acquired 100% equity interests in Kiple Media Sdn. Bhd. for a cash consideration of RM2;

(ii) PISB acquired 80% equity interests in WDCSB for a cash consideration of RM9,000,000;

(iii) PISB acquired 100% equity interests in MSSB for a cash consideration of RM4,000,000; and

(iv) NTSB acquired 60% equity interests in VMPL for a cash consideration of SGD 60,000 (approximately RM189,000).

(b) During the financial year, the Company carried out a review of the recoverable amounts of its investments in certain subsidiaries that have been persistently making losses. A total impairment loss of RM 610,000 (2016 – RM 13,984,000), representing the write-down of the investments to their recoverable amounts, was recognised in “Other Expenses” line item of the statement of profit or loss and other comprehensive income.

These investments in subsidiaries belonged to the Group’s ‘Solutions’ reportable segment.

(c) During the financial year, the Company completed its member’s voluntary winding-up for Inova Venture Pte Ltd and Next Global Technology Sdn Bhd. The winding-up has no significant effect on the financial results of the Group for the current financial year and the financial position of the Group as at the end of the current reporting period.

(d) The summarised financial information of non-controlling interests has not been presented as the non-controlling interests of the subsidiaries are not individually material to the Group.

6. INVESTMENTS IN ASSOCIATES


RM’000 RM’000 RM’000 RM’000

Quoted shares, at cost 35,037 18,250 35,037 18,250Unquoted shares, at cost 6,460 - - -Share of post-acquisition losses (3,398) (778) - -

38,099 17,472 35,037 18,250

The Group/ The Company

2017 2016RM’000 RM’000

Market value of quoted shares in Malaysia 108,240 35,090



cont’d

6. INVESTMENTS IN ASSOCIATES (cont’d)

The details of the associates are as follows:-

Name of Associate Principal Place

of BusinessEffective Equity

Interest Principal Activities2017 2016

% %

G3 Global Berhad (“G3”) * (formerly known as Yen Global Berhad)

Malaysia 32 22 Investment holding.

Shenzhen Memo Technology Co. Ltd. (“SMTCL”) * @

The People’ Republic of

China

20 - Research and development and sales of software, techinical development and sales of electronic products, import and export of domestic trading, goods and technologies.

* Theseassociateswereauditedbyotherfirmsofcharteredaccountants. @ Held through WESB.

(a) During the financial year, the Company subscribed in full for its rights entitlement under the proposed rights issue undertaken by G3 for a total consideration of RM12.10 million. Subsequently, the Company acquired an additional 10% equity interests in G3 for a cash consideration of RM12.375 million. Following the completion of the acquisition, the equity interest of the Company in G3 increased from 22% to 32%.

(b) During the financial year, WESB acquired 20% equity interest in SMTCL for a total purchase consideration of RMB10 million (approximately RM6.4 million).




(c) The summarised financial information for the associate that is material to the Group is as follows:-

G3 Group2017 2016

RM’000 RM’000

At 31 DecemberNon-current assets 2,943 16,480Current assets 76,802 27,124Non-current liabilities - (3,618)Current liabilities (13,273) (18,630)

Net Assets 66,472 21,356

12 month/5 month period ended 31 DecemberRevenue 21,220 9,818Loss for the financial year/period (9,263) (3,535)Total comprehensive expenses (9,263) (3,535)

Group’s share of loss for the financial year/period (2,564) (778)

Reconciliation of Net Assets to Carrying AmountGroup’s share of net assets above 21,271 4,698Goodwill 18,013 12,774Adjustment on measurement of rights shares with warrants (7,588) -

Carrying amount of the Group’s interests in this associate 31,696 17,472



cont’d


(c) The summarised financial information for the associate that is material to the Group is as follows:-(cont’d)

SMTCL2017

RM’000

At 31 December 2017Current assets 26,947Current liabilities (22,156)

Net Assets 4,791

12 months period ended 31 December 2017Revenue 12,916Loss for the financial period (283)

Group’s share of loss for the financial period (56)

Reconciliation of Net Assets to Carrying AmountGroup’s share of net assets above 958Goodwill 5,445

Carrying amount of the Group’s interests in this associate 6,403



7. PLANT AND EQUIPMENT

At1.1.2017

Acquisition of

subsidiaries AdditionsWritten

OffDepreciation

Charge

Effect of Foreign

Translation Difference

At31.12.2017

The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2017

Carrying amount

Motor vehicles 560 - - - (139) - 421Plant and machinery 787 655 1,898 - (1,025) (4) 2,311Office equipment 80 35 108 (11) (43) (2) 167Furniture and fittings 29 19 65 - (18) (2) 93Computer equipment 367 847 968 (16) (614) (13) 1,539Renovation 1,009 30 137 (55) (222) (64) 835Computer software 1,899 - 361 - (865) (135) 1,260

4,731 1,586 3,537 (82) (2,926) (220) 6,626

At1.1.2016 Additions

Disposals/Written

OffDepreciation

Charge

Effect of Foreign

Translation Difference

At31.12.2016

The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2016

Carrying Amount

Motor vehicles 46 617 # (103) - 560Plant and machinery 261 572 - (78) 32 787Office equipment 59 49 - (30) 2 80Furniture and fittings 10 21 - (4) 2 29Computer equipment 429 158 - (226) 6 367Renovation 363 759 - (123) 10 1,009Computer software 2,286 420 - (869) 62 1,899

3,454 2,596 # (1,433) 114 4,731

# - Amount less than RM1,000



cont’d

7. PLANT AND EQUIPMENT (cont’d)

AtCost

AccumulatedDepreciation

Net Book Value

The Group RM’000 RM’000 RM’000

2017

Motor vehicles 773 (352) 421Plant and machinery 7,758 (5,447) 2,311Office equipment 865 (698) 167Furniture and fittings 784 (691) 93Computer equipment 5,255 (3,716) 1,539Renovation 7,259 (6,424) 835Computer software 8,225 (6,965) 1,260

30,919 (24,293) 6,626

AtCost


Net Book Value

RM’000 RM’000 RM’000

2016

Motor vehicles 773 (213) 560Plant and machinery 2,637 (1,850) 787Office equipment 730 (650) 80Furniture and fittings 677 (648) 29Computer equipment 2,342 (1,975) 367Renovation 7,190 (6,181) 1,009Computer software 8,598 (6,699) 1,899

22,947 (18,216) 4,731





WrittenOff

DepreciationCharge

Effect of Foreign

TranslationDifference

At31.12.2017

The Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Net Book Value

Motor vehicles 560 - - (139) - 421Plant and machinery 469 12 - (88) (3) 390Office equipment 30 69 - (21) (1) 77Furniture and fittings 3 64 - (8) - 59Computer equipment 60 - - (49) - 11Renovation 716 138 (44) (131) (39) 640Computer software 86 49 - (54) (2) 79

1,924 332 (44) (490) (45) 1,677


WrittenOff

DepreciationCharge

Effect of Foreign

TranslationDifference

At31.12.2016

The Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Net Book Value

Motor vehicles 46 617 # (103) - 560Plant and machinery 261 245 - (69) 32 469Office equipment 30 16 - (18) 2 30Furniture and fittings 2 2 - (1) - 3Computer equipment 108 - - (48) - 60Renovation - 754 - (38) - 716Computer software 128 22 - (64) # 86

575 1,656 # (341) 34 1,924




cont’d


AtCost


Net Book Value

The Company RM’000 RM’000 RM’000

2017

Motor vehicles 773 (352) 421Plant and machinery 2,297 (1,907) 390Office equipment 601 (524) 77Furniture and fittings 707 (648) 59Computer equipment 1,515 (1,504) 11Renovation 6,717 (6,077) 640Computer software 1,117 (1,038) 79

13,727 (12,050) 1,677

2016

Motor vehicles 773 (213) 560Plant and machinery 2,309 (1,840) 469Office equipment 536 (506) 30Furniture and fittings 643 (640) 3Computer equipment 1,515 (1,455) 60Renovation 6,622 (5,906) 716Computer software 1,068 (982) 86

13,466 (11,542) 1,924

Included in plant and equipment of the Group and of the Company are the following assets held under hire purchase terms:-

The Group The Company 2017 2016 2017 2016

RM’000 RM’000 RM’000 RM’000

Motor vehicles 421 560 421 560



8. OTHER INVESTMENTS

The Group The Company Note 2017 2016 2017 2016

RM’000 RM’000 RM’000 RM’000

Unquoted shares, at cost (a) 18,628 18,628 18,628 18,628Unquoted shares, at fair value (b) 172,031 172,031 - -Convertible unsecured medium term

notes, at fair value (c) 37,455 37,455 - -Club membership (d) 137 137 137 137Quoted warrant, at fair value 57,998 - 57,998 -

286,249 228,251 76,763 18,765Impairment loss:-At the end of the financial year (18,628) (18,628) (18,628) (18,628)

267,621 209,623 58,135 137

(a) The unquoted shares, at cost, of the Group relate to investments of 3.0million Series B preferred stock of USD0.67 each, 2.0million Series C preferred stock of USD1.00 each, 200,000 Series D preferred stock of USD1.00 each and 1,815,736 Series E preferred stock of USD1.00 each in IWICS Inc., a company incorporated in the United States of America. The Group has recognised full impairment on these investments as the directors are of the opinion that the expected future return of these investments is uncertain.



cont’d

8. OTHER INVESTMENTS (cont’d)

(b) The unquoted shares, at fair value, are in respect of the investment in WEBE. The investment is designated as available-for-sale financial assets and measured at fair value. The unquoted shares were pledged to Mobikom Sdn Bhd (“Mobikom”), a wholly-owned subsidiary of Telekom Malaysia Berhad (“TM”), for the borrowing disclosed in Note 25 to the financial statements. The unquoted shares at fair value are analysed into level 3 fair value measurement.

The level 3 fair value of the investment has been determined using discounted cash flow approach approved by management based on the following significant unobservable inputs:-

Relationship Of Unobservable Inputs To Fair Value

Sensitivity Analysis (Assume All Other Variables Held Constant)

(i) Average revenue growth rates of 34% (2016-42%)

Based on the management’s experience and knowledge of market conditions of the specific industries.

The higher the revenue, the higher the fair value.

A 1% higher/lower in revenue would have resulted in an increase/decrease in the fair value by RM16,993,000 (2016-RM29,960,000).

(ii) Average Pre-tax operating profit margins of 23% (2016-19%)

Taking into account management’s experience and knowledge of market conditions of the specific industries.

The higher the pre-tax operating profit, the higher the fair value.

A 1% higher/lower in pre-tax operating profit would have resulted in an increase/decrease in the fair value by RM5,810,000 (2016-RM29,960,000).

(iii) Discount rate of 17.36% (2016-(14.91%)

Determined using a Capital Asset Pricing Model

The higher the discount rate, the lower the fair value.

A 1% higher/lower in discount rate would have resulted in a decrease/increase in the fair value by RM34,776,000 (2016-RM37,150,000).

Management believes that no reasonable change in the above key assumptions would cause the carrying amount of this investment to exceed its recoverable amounts.



8. OTHER INVESTMENTS (cont’d)

(c) The subscription of 8 years convertible unsecured medium term notes (“CMTN”) issued by WEBE is designated as available-for-sale financial assets and measured at fair value. CMTN comprises two elements, a straight bond and a conversion option. The fair value of the straight bond element is estimated using a present value calculation, discounted at the rate of interest that would apply to an identical financial instrument without any derivatives. The fair value of the conversion option is estimated using the Binomial Option Pricing Model.

The CMTNs bore a 1% coupon rate per annum. The CMTNs were pledged to Mobikom for the borrowing disclosed in Note 25 to the financial statements.

The CMTN shall be convertible into new ordinary shares of WEBE during the period commencing

from (and including) the third anniversary date of issue of the CMTN and ending on the Maturity Date (inclusive) or if the CMTN shall have been called for redemption before the Maturity Date, then up to the close of business on a date which is no later than seven Business Days prior to the date fixed for redemption thereof.

(d) These investments are designated as available-for-sale financial assets and are stated at cost as their fair values cannot be reliably measured using valuation techniques due to the lack of marketability of these investments.

9. GOODWILL

The Group2017 2016

RM’000 RM’000

Cost:-

At 1 January 16,282 16,282Acquisition of subsidiaries (Note 33) 2,481 -

At 31 December 18,763 16,282


At 1 January (16,282) (10,483)Addition during the year - (5,799)

At 31 December (16,282) (16,282)

2,481 -



cont’d

9. GOODWILL (cont’d)

(a) The carrying amounts of goodwill allocated to each cash-generating unit are as follows:-

The Group2017 2016

RM’000 RM’000

Digital Services 2,481 - (b) In the previous financial year, an impairment loss of RM5,799,000 was recognised on Solutions

Group in the statements of profit or loss and other comprehensive income under the “other expenses” line item as the subsidiary incurred losses for a number of financial years and there are presently no viable business plan to improve the performance of the subsidiary substantially.

The Group has assessed the recoverable amounts of goodwill allocated and determined that no additional impairment is required. The recoverable amounts of the cash-generating units are determined using the value-in-use approach, and this is derived from the present value of the future cash flows from each cash-generating unit computed based on the financial projections approved by management covering a period of 5 years. The key assumptions used in the determination of the recoverable amounts were as follows:-

Gross Margin Growth Rate Discount Rate2017 2016 2017 2016 2017 2016

Digital Services 40% - 95% - 70% - 80% - 11% -

(a) Budgeted gross margin The basis used to determine the value assigned to the budgeted gross margin is the average gross margins achieved in the year immediately before the budgeted year increased for expected efficiency improvements and cost saving measures.

(b) Growth rate The growth rates used are based on the expected projection of Digital Services.

(c) Discount rate The discount rates used are pre-tax and reflect specific risks relating to the relevant segments.

(d) Terminal value There is no growth rate in perpetuity to arrive at terminal value. The values assigned to the key assumptions represent management’s assessment of future trends

in the cash-generating units and are based on both external sources and internal historical data.

The directors believe that there is no reasonable change in the above key assumptions applied that is likely to materially cause the respective cash-generating unit carrying amount to exceed its recoverable amount.



10. DEVELOPMENT COSTS


RM’000 RM’000 RM’000 RM’000

Cost:-At 1 January 22,031 21,868 15,785 16,274Additions during the financial year 7,918 652 4,675 -Transfer from subsidiary – PISB - - 1,577 -

29,949 22,520 22,037 16,274Government grants - (489) - (489)

29,949 22,031 22,037 15,785

Accumulated amortisation:-

At 1 January (16,779) (15,767) (13,069) (12,057)Amortisation charge (36) (1,012) - (1,012)

At 31 December (16,815) (16,779) (13,069) (13,069)


At 1 January (4,600) - (2,716) -Impairment during the financial year - (4,600) - (2,716)

At 31 December (4,600) (4,600) (2,716) (2,716)

8,534 652 6,252 -

The development costs are in respect of the development of new modems, Internet of Things devices and Digital Services platform. Their amortisation charges and impairment loss are recognised in statements of profit or loss and other comprehensive income under the “other expenses” line item.

The reportable segment for the development costs are as follows:-

The Group 2017 2016

RM’000 RM’000

Solutions Group 6,019 652Communications Services 386 -Digital Services 2,129 -

8,534 652



cont’d

11. OTHER INTANGIBLE ASSETS

Intellectual

Property Software Licence

Trademarkand

Patents Total RM’000 RM’000 RM’000 RM’000 RM’000

The Group

Cost:-At 31.12.2016/1.1.2017 26,805 - - - 26,805Acquisition of subsidiaries (Note 33) - 3,988 5,951 88 10,027

At 31.12.2017 26,805 3,988 5,951 88 36,832

Amortisation:-At 31.12.2016/1.1.2017 25,915 - - - 25,915Acquisition of subsidiaries (Note 33) - - - 70 70Addition during the financial year - - - 16 16

At 31.12.2017 25,915 - - 86 26,001

Impairment losses:-At 31.12.2016/31.12.2017 890 - - - 890

Carrying amountsAt 31.12.2016 - - - - -

At 31.12.2017 - 3,988 5,951 2 9,941

(a) In the previous financial year, the intellectual property comprises the purchase price of the GP Base Software and is related to the Group’s Solution reportable segment. The amortisation charges and impairment loss are recognised in statement of profit or loss and other comprehensive income under the “Other Expenses” line item.

(b) The software comprises the development cost of a virtual platform and is related to the Group’s Digital Services reportable segment.

(c) The licence comprises the acquisition costs for the licence to issue electronic money and is related to the Group’s Digital Services reportable segment.



11. OTHER INTANGIBLE ASSETS (cont’d)

The Group assessed the recoverable amount of the licence and determined that no impairment is required. The recoverable amounts of the cash-generating units are determined using the value-in-use approach, and this is derived from the present value of the future cash flows from each cash-generating unit computed based on the financial projections approved by management covering a period of 5 years. The key assumptions used in the determination of the recoverable amounts were as follows:-

Gross Margin Growth Rate Discount Rate2017 2016 2017 2016 2017 2016

Digital Services 40% - 70% - 11% -

(a) Budgeted gross margin The basis used to determine the value assigned to the budgeted gross margin is the average gross margins achieved in the year immediately before the budgeted year increased for expected efficiency improvements and cost saving measures.

(b) Growth rate The growth rates used are based on the expected projection of Digital Services.

(c) Discount rate The discount rates used are pre-tax and reflect specific risks relating to the relevant segments.

(d) Terminal value There is no growth rate in perpetuity to arrive at terminal value. The values assigned to the key assumptions represent management’s assessment of future trends in the

cash-generating units and are based on both external sources and internal historical data.

The directors believe that there is no reasonable change in the above key assumptions applied that is likely to materially cause the respective cash-generating unit carrying amount to exceed its recoverable amount.

12. DEFERRED TAX ASSETS/(LIABILITIES)


RM’000 RM’000 RM’000 RM’000

At 1 January (86) (1,588) 360 (1,277)Acquisition of subsidiaries (2,407) - - -Recognised in profit or loss (Note 31) 12 1,502 (40) 1,637

At 31 December (2,481) (86) 320 360



cont’d

12. DEFERRED TAX ASSETS/(LIABILITIES) (cont’d)

The deferred tax liabilities are attributable to the following:-


RM’000 RM’000 RM’000 RM’000

Accelerated capital allowances (96) (86) - -Other temporary differences (2,385) - - -

(2,481) (86) - -

13. INVENTORIES


RM’000 RM’000 RM’000 RM’000

At Cost:-Inventories held for resale 1,347 800 109 199


RM’000 RM’000 RM’000 RM’000

Recognised in profit or loss:- as cost of sales 82,600 109,909 3,871 67,670- written off 364 1,277 - 928- writeback of inventories written off (2) (535) (2) (535)



14. TRADE RECEIVABLES


RM’000 RM’000 RM’000 RM’000

Trade receivables 148,867 141,760 913 21,936Allowance for impairment loss (790) (684) (638) (638)

148,077 141,076 275 21,298

Allowance for impairment loss:-

At 1 January (684) (489) (638) (489)Addition during the financial year (106) (195) - (149)

At 31 December (790) (684) (638) (638)

The Group’s normal trade credit terms range from 30 to 90 days.

The collective impairment allowance is determined based on estimated irrecoverable amounts from sales of goods, determined by reference to past default experience.

15. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


RM’000 RM’000 RM’000 RM’000

Other receivables 1,732 730 170 277Deposits 1,870 4,503 1,004 1,592Prepayments 5,716 18,632 1,699 9,174

9,318 23,865 2,873 11,043Allowance for impairment loss - - - -

9,318 23,865 2,873 11,043

Allowance for impairment loss:-At 1 January - (1,040) - (966)Written off during the financial year - 1,040 - 966

At 31 December - - - -



cont’d

16. AMOUNTS OWING BY/(TO) SUBSIDIARIES

The amounts owing by/(to) subsidiaries consist of the following:-

The Company2017 2016

RM’000 RM’000

Amount Owing By Subsidiaries

Current

- trade balances 12,327 865- non-trade balances 611,692 600,144

624,019 601,009Allowance for impairment loss (383,902) (380,885)

240,117 220,124

Allowance for impairment loss:-At 1 January (380,885) (365,885)Addition during the financial year (3,017) (15,000)

At 31 December (383,902) (380,885)

Amount Owing to Subsidiaries

Current- trade balances - 459- non-trade balances (30,578) (23,785)

(30,578) (23,326)

The trade amounts are subject to normal credit terms. The non-trade amounts are unsecured, interest-free and repayable/receivable on demand. The amounts owing are to be settled in cash.



17. AMOUNT OWING BY/(TO) ASSOCIATES


RM’000 RM’000 RM’000 RM’000

Amount owing by associates- trade balances 191 - - -- non-trade balances 18,381 - - -

18,572 - - -

Amount owing to associates- trade balances - - - -- non-trade balances (2,347) - (2,347) -

(2,347) - (2,347) -

The trade amounts are subject to normal credit terms. The non-trade amounts represents advances paid/received and it will be offset against future sales/purchases. The amounts are unsecured and interest-free. The amounts owing are to be settled in cash.

18. AMOUNT OWING BY/(TO) A RELATED PARTY

The amount owing by a related party represents advances paid to an associate of a related company. The amount is unsecured and interest-free. The amount owing will be offset against future purchase from this related party.

19. SHORT-TERM INVESTMENTS

The short-term investments represent investment in highly liquid money market. These investments are readily convertible to known amount of cash and are subject to an insignificant risk of changes in value. The short-term fund bore an effective interest rate of 3.51% (2016 - 2.85%) per annum at the end of the reporting period.

20. FIXED DEPOSITS WITH LICENSED BANKS

The fixed deposits with licensed banks of the Group and the Company at the end of the reporting period bore a weighted average effective interest rate of 2.16% (2016 - 1.50%) per annum. The fixed deposits have maturity periods ranging from 1 to 12 months (2016 - 1 to 12 months). The Group and the Company have pledged RM8,953,000 and RM2,434,000 (2016 - RM13,331,000 and RM5,050,000) out of the total fixed deposits with licensed banks respectively as security for banking facilities.



cont’d

21. SHARE CAPITAL

The movements in the authorised and paid-up share capital of the Company are as follows:-

The Company2017 2016 2017 2016

Number of Shares RM’000 RM’000‘000 ‘000

Authorised

Ordinary shares of RM0.20 each N/A 2,000,000 N/A 400,000

N/A NotapplicablepursuanttoCompaniesAct2016whichcameintooperationon31January2017asdisclosedinitem (ii) below.

The Company2017 2016 2017 2016

Number of Shares RM’000 RM’000‘000 ‘000

Issued And Fully Paid-Up

Ordinary shares of with no Par Value (2016 – Par Value of RM0.20 each)

At 1 January 690,447 690,447 138,089 138,089

Issuance of new shares for cash 68,274 - 18,093 -

Share issuance expenses - - (302) -

68,274 - 17,791 -

At 31 December 758,721 690,447 155,880 138,089

(i) The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company, and are entitled to one vote per ordinary share at meetings of the Company.

(ii) On 31 January 2017, the concepts of authorised share capital and par value of share capital were abolished in accordance with the Companies Act 2016. There is no impact on the numbers of ordinary shares or the relative entitlement of any of the members as a result of this transition.

22. TREASURY SHARES

There were no purchases of any ordinary shares from the open market during the financial year.

As at 31 December 2017, the Company held a total of 7,707,700 of its 758,720,619 issued and fully paid-up ordinary shares. The treasury shares are held at a carrying amount of RM12,216,888. None of the treasury shares were resold or cancelled during the financial year.



23. RESERVES

The Group The Company Note 2017 2016 2017 2016

RM’000 RM’000 RM’000 RM’000

Share premium 23.1 412,796 412,796 412,796 412,796Foreign exchange translation reserve 23.2 4,438 8,655 (68) (48)Fair value reserve 23.3 40,328 - 40,328 -Accumulated losses (433,466) (417,269) (455,515) (443,882)

24,096 4,182 (2,459) (31,134)

23.1 SHARE PREMIUM

The Company has adopted the transitional provisions set out in Section 618(3) of the Companies Act 2016 (“Act”) where the sum standing to the credit of the share premium may be utilised within twenty four (24) months from the commencement date of 31 January 2017 in the manner as allowed for under the Act. Therefore, the Group and the Company have not consolidated the share premium into share capital until the expiry of the transitional period.

23.2 FOREIGN EXCHANGE TRANSLATION RESERVE

The foreign exchange translation reserve arose from the translation of the financial statements of foreign subsidiaries and a foreign branch.

23.3 FAIR VALUE RESERVE

The fair value reserve represents the cumulative fair value changes (net of tax, where applicable) of available-for-sale financial assets until they are disposed of or impaired.



cont’d

24. HIRE PURCHASE PAYABLES


RM’000 RM’000 RM’000 RM’000

Minimum hire purchase payments:- not later than one year 136 152 136 152- later than one year and not later than five

years 293 413 293 413

429 565 429 565Less: Future finance charges (49) (65) (49) (65)

Present value of hire purchase payables 380 500 380 500

Current:-Not later than one year 120 136 120 136

Non-Current:-Later than one year and not later than five years 260 364 260 364

380 500 380 500

The hire purchase payables of the Group and of the Company bore a weighted average effective interest rate of 4.73% (2016 – 4.73%) per annum at the end of the reporting period.

25. EXCHANGEABLE MEDIUM TERM NOTES


RM’000 RM’000 RM’000 RM’000

Exchangeable Medium Term Notes 233,711 216,387 233,711 216,387

Non-Current:- repayable after five years 233,711 216,387 233,711 216,387



25. EXCHANGEABLE MEDIUM TERM NOTES (cont’d)

Exchangeable medium term notes (MTNs) On 22 September 2014, Green Packet Berhad (the Issuer), and CIMB Investment Bank Berhad, RHB

Investment Bank Berhad (Joint Lead Arrangers and Joint Lead Managers), RHB Investment Bank Berhad (Facility Agent), Malaysian Trustees Berhad (Security Agent) and Mobikom Sdn Bhd (MTN Holder) have entered into an unrated exchangeable medium term note programme (the “Exchangeable MTN Programme”) of up to RM210,000,000. This exchangeable MTNs will be issued in multiple series comprising Series 1 MTNs with RM120,000,000 and tenure of up to 8 years from the Issue date. RM30,000,000 shall be advanced to POSB to fund the acquisition of the minority shares, RM80,000,000 shall be used to finance the full settlement of all the liabilities and obligations of the Issuer to Intel and RM10,000,000 shall be used to finance the Issuer’s general working capital requirements and other corporate purposes. As for the subsequent Series with a tenure of up to 8 years from the first Issue date of the Exchangeable MTNs, RM60,000,000 shall be advanced to POSB to utilise the Convertible MTNs (the “Convertible MTN Subscription Tranche”). RM30,000,000 shall be utilised by the Issuer to finance the Issuer’s general working capital requirements and other corporate purposes. Provided that the amount allocated for settlement of the Issuer to Intel is not utilised in whole, the Issuer may utilise this special portion in and towards subscription by POSB of the Convertible MTNs.

The Issuer may redeem in whole or in part of the Exchangeable MTNs at any time before the maturity date (“early redemption”) and to redeem the relevant portion of exchangeable MTNs at the accreted value of the exchangeable MTNs in cash on the early redemption date. The issuer agrees that, at any time on and after the fifth anniversary of the first issue date, the Issuer shall use its best endeavours to utilise all excess free cash flow to redeem or early redeem the Exchangeable MTNs. The Exchangeable MTNs shall be redeemed by the Issuer on the maturity date if not redeemed earlier or exchanged into Charged Shares pursuant to the terms and conditions of the Programme Agreement.

26. TERM LOANS

The Group 2017 2016

RM’000 RM’000

Current liabilities 303 -Non-current liabilities 410 -

713 -

The term loans are secured by:-

(a) a debenture by way of first legal charge over a subsidiary’s present and future fixed and floating assets;

(b) a joint and several guarantee of the directors of the subsidiary; (c) Guarantee by Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP) for the amount of

RM700,000 or 70% from the approved amount under the Service Sector Guarantee Scheme (“SSGS”); and

(d) Corporate Guarantee to be executed by the Company.



cont’d

27. TRADE PAYABLES

The normal trade credit terms granted to the Group and the Company range from 30 to 90 (2016 - 30 to 90) days.

28. OTHER PAYABLES AND ACCRUALS

Included in other payables and accruals of the Group and the Company at the end of the reporting period was an amount of RM1,126,000 and RM96,000 respectively (2016 – RM8,866,000 and RM258,000) which represents prepayment received from customers.

29. REVENUE

Revenue of the Group and of the Company represent the invoiced value of goods sold and services rendered less discounts and returns.


RM’000 RM’000 RM’000 RM’000

Solutions Group 101,193 131,752 11,231 84,300Communications Services 256,022 234,499 - -Digital Services 1,729 - - -

358,944 366,251 11,231 84,300



30. (LOSS)/PROFIT BEFORE TAXATION


RM’000 RM’000 RM’000 RM’000

(Loss)/Profit before taxation is arrived at after charging/(crediting):-

Amortisation on:- development costs 36 1,012 - 1,012- intellectual property - 1,001 - 1,001- trademark and patents 16 - - -Impairment loss on: - amount owing by subsidiaries - - 3,017 15,000- development costs - 4,600 - 2,716- goodwill - 5,799 - -- intellectual property - 890 - 890- investments in subsidiaries - - 610 13,984- trade receivables 106 195 - 149Auditors’ remuneration:- audit fee:

- current financial year 402 389 150 135- under/(over)provision in the previous

financial year 40 (61) 36 (27)- non-audit fee:

- auditors of the Company 5 91 5 86- other auditors 164 105 80 -

Depreciation of plant and equipment 2,926 1,433 490 341Directors’ fee 255 238 251 238Directors’ remuneration 1,004 865 48 65Equipment written off 82 - 44 -Interest expense:- hire purchase 16 10 16 10- term loan 40 - - -- exchangeable MTNs 17,324 16,071 17,324 16,071Inventories written off 364 1,277 - 928



cont’d

30. (LOSS)/PROFIT BEFORE TAXATION (cont’d)


RM’000 RM’000 RM’000 RM’000

Rental of office 1,384 1,149 584 371Rental of equipment 66 - - #Staff costs:- defined contribution plan 1,599 934 162 112- salaries and other benefits 16,497 17,653 3,324 2,325Gain on fair value adjustments (10,082) (98,247) (10,082) -Gain on dilution of an associate - (49,391) - -Gain on disposal of plant and equipment - (87) - (87)Loss/(Gain) on foreign exchange: - realised 1,872 (1,353) 117 (1,434)- unrealised 2,220 (1,306) 1,618 (568)Interest income (1,043) (1,548) (3,829) (4,190)Rental income (198) - - -Writeback of inventories written off (2) (535) (2) (535)


31. INCOME TAX EXPENSE


RM’000 RM’000 RM’000 RM’000

Current tax:- for the financial year 748 2,979 503 1,778- (over)/underprovision in the previous

financial year (1,584) 2,802 (1,302) 2,576

(836) 5,781 (799) 4,354

Deferred taxation (Note 12):- for the financial year (33) (696) 40 (948)- under/(over)provision in the previous

financial year 21 (806) - (689)

(12) (1,502) 40 (1,637)

(848) 4,279 (759) 2,717



31. INCOME TAX EXPENSE (cont’d)

A reconciliation of income tax expense applicable to the (loss)/ profit before taxation at the statutory tax rate to income tax expense at the effective tax rate of the Group and of the Company is as follows:-


RM’000 RM’000 RM’000 RM’000

(Loss)/Profit before taxation (17,426) 74,943 (12,392) (40,675)

Tax at the statutory tax rate of 24% (2016 - 24%) (4,182) 17,986 (2,974) (9,762)

Tax effects of:-Non-taxable income (4,242) (28,644) (3,339) (1,263)Non-deductible expenses 4,830 13,566 2,487 11,876Deferred tax assets not recognised in the

current financial year 4,385 7 4,385 -Utilisation of deferred tax assets previously

not recognised (94) - (2) -Differential in tax rates 18 (632) (14) (21)(Over)/Underprovision in the previous

financial year- current tax (1,584) 2,802 (1,302) 2,576- deferred tax 21 (806) - (689)

(848) 4,279 (759) 2,717

Domestic income tax is calculated as the Malaysian statutory tax rate of 24% (2016 – 24%) of the estimated assessable profit for the financial year. The taxation of other jurisdictions is calculated at the rates prevailing in the respective jurisdiction.

On 21 October 2016, the Government of Malaysia announced the reduction of income tax rate from 24% to a range of 20% to 24% based on the percentage of increase in chargeable income as compared to the immediate preceding year of assessment for years of assessment 2017 and 2018.



cont’d

31. INCOME TAX EXPENSE (cont’d)

No deferred tax assets are recognised on the following items:-

The Group2017 2016

RM’000 RM’000

Unabsorbed capital allowances 8,908 8,698Unutilised tax losses 10,294 8,940Other temporary differences 28,998 12,290

48,200 29,928

32. (LOSS)/EARNINGS PER SHARE

The basic (loss)/earnings per share is arrived at by dividing the Group’s (loss)/profit attributable to shareholders by the following weighted average number of ordinary shares in issue during the financial year excluding treasury shares held by the Company.

The Group2017 2016

(Loss)/Profit attributable to owners of the Company (RM’000) (16,197) 70,688

Weighted average number of ordinary shares (‘000):-Issued ordinary shares at 1 January 690,447 685,739Effect of treasury shares held - (3,000)Effect of new ordinary shares issued 53,497 -

Weighted average number of ordinary shares at 31 December 743,944 682,739

Basic (loss)/ earnings per share (Sen) (2) 10

The diluted earnings per share is equal to the basic earnings per share as there were no potential dilutive ordinary shares outstanding at the end of the reporting period.



33. ACQUISITIONS OF SUBSIDIARIES AND NON-CONTROLLING INTERESTS

On 6 January 2017 and 17 July 2017, a subsidiary of the Company, PISB acquired 80% equity interests in Webonline Dot Com Sdn. Bhd. and 100% equity interests in Mobiduu Solutions Sdn. Bhd., respectively. The acquisition of these subsidiaries is to enable the Group to expand its business into the Digital Services segment.

The following summarises the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the date of acquisition.

The Group2017

RM’000

Plant and equipment 1,586Trade and other receivables 1,200Cash and bank balances 4,987Other intangible assets 9,957Trade payables and other payables (1,935)Term loans (1,003)Current tax liabilities (2)Deferred tax liabilities (2,407)

Net identifiable assets acquired 12,383Less: Non-controlling interests, measured at the proportionate share of the fair value

of the net identifiable assets (1,864)Add: Goodwill on acquisition (Note 9) 2,481

Total purchase consideration, to be settled by cash 13,000Less: Cash and bank balances of subsidiaries acquired (4,987)

Net cash outflow from the acquisition of subsidiaries 8,013

(a) The goodwill is attributable mainly to the control premium paid. In addition, the purchase consideration also included benefits derived from the expected revenue growth of the subsidiaries, their future market development as well as customer lists. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. The goodwill is not deductible for tax purposes.

(b) The subsidiaries have contributed revenue and loss after taxation of RM1,782,000 and RM1,843,000 to the Group since the date of acquisition.

(c) If the acquisition was effective at the beginning of the current financial year, the Group’s revenue and loss after taxation for the current financial year would have been RM 2,644,000 and RM1,806,000 respectively.

There were no acquisition of new subsidiaries in the last financial year.



cont’d

34. CASH FLOW INFORMATION

(a) The cash disbursed for the purchase of plant and equipment is as follows:-


RM’000 RM’000 RM’000 RM’000

Cost of plant and equipment purchased 3,537 2,596 332 1,656Amount financed through hire purchase - (500) - (500)

Cash disbursed for purchase of plant and equipment 3,537 2,096 332 1,156

(b) The reconciliations of liabilities arising from financing activities are as follows:-

Amount owing to

related parties

Amount owing to

associatesTermloans

Hire purchase Total

The Group RM’000 RM’000 RM’000 RM’000 RM’000

2017

At 1 January 456 - - 500 956

Changes in Financing Cash FlowsAdvances from associates - 2,347 - - 2,347Repayment to related parties (456) - - - (456)Repayment of borrowings - - (290) - (290)Repayment of hire purchase - - - (120) (120)

Non-cash ChangesAcquisition of subsidiaries (Note 33) - - 1,003 - 1,003

At 31 December - 2,347 713 380 3,440



34. CASH FLOW INFORMATION (cont’d)

(b) The reconciliations of liabilities arising from financing activities are as follows:-(cont’d)

Amount owing to

related parties

Amount owing to

associates

Amount owing to

subsidiariesHire

purchase TotalThe Company RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 456 - 23,326 500 24,282

Changes in Financing Cash FlowsAdvances from subsidiaries - - 7,349 - 7,349Advances from associates - 2,347 - - 2,347Repayment to related parties (456) - - - (456)Repayment of hire purchase - - - (120) (120)

Non-cash ChangesUnrealised gain on foreign exchange - - (97) - (97)

At 31 December - 2,347 30,578 380 33,305 Comparative information is not presented by virtue of the exemption given in MFRS 7.

(c) The cash and cash equivalents comprise the following:-


RM’000 RM’000 RM’000 RM’000

Short-term investments 1,185 14,813 1 13,882Fixed deposits with licensed banks 9,786 13,336 3,192 5,050Cash and bank balances 31,110 34,257 2,713 6,226

42,081 62,406 5,906 25,158Less: Fixed deposits pledged with

licensed bank (8,953) (13,331) (2,434) (5,050)

33,128 49,075 3,472 20,108



cont’d

35. KEY MANAGEMENT PERSONNEL COMPENSATION

The key management personnel of the Group and of the Company include executive directors and non-executive directors of the Company and certain members of senior management of the Group and of the Company.

The key management personnel compensation during the financial year are as follows:-


RM’000 RM’000 RM’000 RM’000

Directors

Directors of the Company

Executive directors:Short-term employee benefits:- salaries, bonuses and other benefits 845 708 - -- defined contribution benefit 111 85 - -- benefits-in-kind - 7 - -

Non-executive directors:Short-term employee benefits:- fee 255 238 251 238- allowances 48 65 48 65

1,259 1,103 299 303

Directors of the Subsidiaries

Executive directors:Short-term employee benefits:- salaries, bonuses and other benefits 2,895 3,839 - -- defined contribution benefit 101 71 - -

2,996 3,910 - -

Other Key Management Personnel

Short-term employee benefits 584 324 - -Defined contribution benefits 65 38 - -



36. RELATED PARTY DISCLOSURES

(a) Identities of Related Parties

Parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control.

In addition to the information detailed elsewhere in the financial statements, the Group has related party relationships with its directors, associates, key management personnel and entities within the same group of companies.

(b) Related Party Transactions

Other than those disclosed elsewhere in the financial statements, the Group and the Company also carried out the following transactions with the related parties during the financial year:-


RM’000 RM’000 RM’000 RM’000

Sales to subsidiaries: - GPA - - - 43 - GPS - - 187 2,214 - GPNSPC - - 60 459

Sales to an associate:- Atilze Digital Sdn. Bhd. 1,471 - 1,471 -

Interest received/receivable from subsidiaries

- POSB - - 3,311 3,074

Management fees received/receivable from subsidiaries

- NTSB - - 517 -- FWSB - - - 50

Management fees paid/payable to subsidiary

- GPISB - - 1,034 5,087

Transfer of development cost from a subsidiary - - 1,577 -

The outstanding balances of the related parties (including the allowance for impairment loss made) together with their terms and conditions are disclosed in the respective notes to the financial statements.



cont’d

37. OPERATING SEGMENTS

Operating segments are prepared in a manner consistent with the internal reporting provided to the management as its chief operating decision maker in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on their products and services provided.

The Group is organised into 3 main reportable segments as follows:-

(i) Solutions Group - Research, development, marketing and distribution of wireless networking and telecommunication products and solutions.

(ii) Digital Services - Provision of internet portal services, e-commerce and other web related business. (iii) Communications Services - Provision of total communication services, solutions and products.

(a) The management assesses the performance of the operating segments based on operating profit or loss which is measured differently from those disclosed in the consolidated financial statements. The accounting policies of the reportable segments are the same as the Group’s accounting policies.

Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

(b) Each reportable segment asset is measured based on all assets (including goodwill) of the segment other than investments in associates and tax-related assets.

(c) Each reportable segment liability is measured based on all liabilities of the segment other than borrowings and tax-related liabilities.

(d) Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments are presented under unallocated items. Unallocated items comprise mainly investments and related income, loans and borrowings and related expenses, corporate assets (primarily the Company’s headquarters) and head office expenses.

.



37. OPERATING SEGMENTS (cont’d)

37.1 BUSINESS SEGMENTS

Continuing operations

Solutions Group

Communications Services

DigitalServices Group

RM’000 RM’000 RM’000 RM’000

2017

RevenueExternal revenue 101,193 256,022 1,729 358,944Inter-segment revenue 25,130 436 598 26,164

126,323 256,458 2,327 385,108

Consolidation adjustments and eliminations (26,164)

Consolidated revenue 358,944

ResultsSegment results (83) 2,218 (4,651) (2,516)Interest income 893 62 88 1,043Depreciation of property, plant and

equipment (579) (1,054) (1,293) (2,926)Other non-cash expenses (Note a) (2,815) 83 (90) (2,822)

(2,584) 1,309 (5,946) (7,221)

Gain on fair value adjustment 10,082Share of result in associates, net of tax (2,620)Finance costs (17,667)Income tax expense 848

Consolidated loss after taxation (16,578)



cont’d


37.1 BUSINESS SEGMENTS (cont’d)


Solutions Group

Communications Services

DigitalServices Group

RM’000 RM’000 RM’000 RM’000

2017

AssetsSegment assets 322,589 167,850 24,159 514,598

Investment in associates 38,099Current tax asset 2,479

Consolidated total assets 555,176

Additions to non-current assets other than financial instruments and deferred tax assets:-

Plant and equipment 505 358 4,260 5,123Development costs 5,367 386 2,165 7,918Other intangible assets - - 10,027 10,027

LiabilitiesSegment liabilities 243,097 136,551 3,565 383,213

Deferred tax liabilities 2,481

Consolidated total liabilities 385,694






Solutions Group

Communications Services Group

RM’000 RM’000 RM’000

2016

RevenueExternal revenue 131,752 234,499 366,251Inter-segment revenue 21,538 - 21,538

153,290 234,499 387,789

Consolidation adjustments and eliminations (21,538)

Consolidated revenue 366,251

ResultsSegment results 4,273 8,461 12,734Interest income 1,490 58 1,548Depreciation of property, plant and equipment (363) (1,070) (1,433)Other non-cash expenses (Note a) (12,431) (415) (12,846)

(7,031) 7,034 3

Gain on fair value adjustment 98,247Gain on dilution of associate 49,391Share of result in associates, net of tax (56,617)Finance costs (16,081)Income tax expense (4,279)

Consolidated profit after taxation 70,664



cont’d




Solutions Group

Communications Services Group

RM’000 RM’000 RM’000

2016

AssetsSegment assets 311,764 131,389 443,153

Investment in associates 17,472

Consolidated total assets 460,625

Additions to non-current assets other than financial instruments and deferred tax assets:-

Plant and equipment 2,107 489 2,596Development costs 652 - 652

LiabilitiesSegment liabilities (235,925) (94,178) (330,103)

Current tax liabilities (294)Deferred tax liabilities (86)

Consolidated total liabilities (330,483)





(a) Other non-cash (gain)/expenses consist of the following:-

The Group2017 2016

RM’000 RM’000

Amortisation of:-- development costs 36 1,012- intellectual property - 1,001- trademark and patents 16 -Equipment written off 82 -Impairment of:-- Development costs - 4,600- Goodwill - 5,799- Intellectual property - 890- Trade receivables 106 195Inventories written off 364 1,277Gain on disposal of plant and equipment - (87)Unrealised loss/ (gain) on foreign exchange 2,220 (1,306)Writeback of inventories written off (2) (535)

2,822 12,846

37.2 GEOGRAPHICAL INFORMATION

Revenue is based on the country in which the customers are located.

Non-current assets are determined according to the country where these assets are located. The amounts of non-current assets do not include financial instruments (but including investments in associates and deferred tax assets).

Revenue Non-current Assets

2017 2016 2017 2016RM’000 RM’000 RM’000 RM’000

Malaysia 1,729 228 330,871 229,612Outside Malaysia 357,215 366,023 2,431 2,866

358,944 366,251 333,302 232,478



cont’d


37.3 MAJOR CUSTOMERS

The following are major external customers with revenue equal to or more than 10% of Group revenue:-

Revenue Contribution

2017 2016 SegmentRM’000 RM’000

Customer A 49,295 65,822 Communication servicesCustomer B 48,446 9,241 Solution groups

38. OPERATING LEASE COMMITMENTS

The future minimum lease payments under the non-cancellable operating leases are as follows:-


RM’000 RM’000 RM’000 RM’000

Not more than one year 546 1,211 175 337Later than one year and not later than five years 113 367 - 169

659 1,578 175 506

39. FINANCIAL INSTRUMENTS

The Group’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.



39. FINANCIAL INSTRUMENTS (cont’d)

39.1 FINANCIAL RISK MANAGEMENT POLICIES

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(a) Market Risk

(i) Foreign Currency Risk The Group is exposed to foreign currency risk on transactions and balances that are

denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar (“USD”) and Chinese Renminbi (“RMB”). Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level.

The Group’s exposure to foreign currency risk (a currency which is other than the functional currency of the entities within the Group) based on the carrying amounts of the financial instruments at the end of the reporting period is summarised below:-

Foreign currency exposure

United StatesDollar

RinggitMalaysia Others Total

The Group RM’000 RM’000 RM’000 RM’000

2017

Financial AssetsOther investments - 267,621 - 267,621Trade receivables 146,178 53 1,846 148,077Other receivables and deposits 542 3,000 60 3,602Amount owing by associates 18,299 273 - 18,572Short-term investments - 1,185 - 1,185Fixed deposits with licensed

banks 4,118 5,668 - 9,786Cash and bank balances 26,040 3,049 2,021 31,110

195,177 280,849 3,927 479,953



cont’d


39.1 FINANCIAL RISK MANAGEMENT POLICIES (cont’d)

(a) Market Risk (cont’d)

(i) Foreign Currency Risk (cont’d)

Foreign currency exposure (cont’d)

UnitedStatesDollar

Ringgit Malaysia Others Total


2017

Financial LiabilitiesHire purchase payables - 380 - 380Exchangeable Medium

Term Notes - 233,711 - 233,711Term loan - 713 - 713Trade payables 126,300 2,039 198 128,537Other payables and accruals 6,248 4,635 5,516 16,399Amount owing to associates - 2,347 - 2,347

132,548 243,825 5,714 382,087

Net financial assets/(liabilities) 62,629 37,024 (1,787) 97,866

Less: Net financial (assets)/liabilities denominated in the respective entities’ functional currencies (40,409) (37,024) 113 (77,320)

Currency Exposure 22,220 - (1,674) 20,546








United StatesDollar



2016

Financial AssetsOther investments - 209,623 - 209,623Trade receivables 139,256 165 1,655 141,076Other receivables and deposits 4,170 900 163 5,233Short-term investments 4,538 10,275 - 14,813Fixed deposits with licensed

banks 9,509 3,827 - 13,336Cash and bank balances 18,614 13,048 2,595 34,257

176,087 237,838 4,413 418,338

Financial LiabilitiesHire purchase payables - 500 - 500Exchangeable Medium

Term Notes - 216,387 - 216,387Trade payables 88,944 367 193 89,504Other payables and accruals 5,825 5,903 2,662 14,390Amount owing to related parties 456 - - 456

95,225 223,157 2,855 321,237

Net financial assets 80,862 14,681 1,558 97,101

Less: Net financial (assets)/liabilities denominated in the respective entities’ functional currencies (37,975) (14,681) 351 (52,305)

Currency Exposure 42,887 - 1,909 44,796



cont’d






UnitedStatesDollar


The Company RM’000 RM’000 RM’000 RM’000

2017

Financial AssetsOther Investments - 58,135 - 58,135Trade receivables 275 - - 275Other receivables and deposits - 1,118 56 1,174Amount owing by subsidiaries 8,864 231,172 81 240,117Amount owing by a related party 18,240 - - 18,240Short-term investments - 1 - 1Fixed deposits with licensed

banks - 3,192 - 3,192Cash and bank balances 2,594 32 87 2,713

29,973 293,650 224 323,847

Financial LiabilitiesHire purchase payables - 380 - 380Exchangeable Medium Term

Notes - 233,711 - 233,711Other payables and accruals - 1,589 524 2,113Trade payables - 1 - 1Amount owing to subsidiaries - 22,040 8,538 30,578Amount owing to associates - 2,347 - 2,347

- 260,068 9,062 269,130

Net financial assets/(liabilities) 29,973 33,582 (8,838) 54,717

Less: Net financial assets denominated in the entity’s functional currency - (33,582) - (33,582)









UnitedStatesDollar



2016

Financial AssetsOther Investments - 137 - 137Trade receivables 21,298 - - 21,298Other receivables and deposits - 1,811 58 1,869Amount owing by subsidiaries 3,013 217,053 58 220,124Short-term investments 4,563 9,319 - 13,882Fixed deposits with licensed

banks 3,628 1,422 - 5,050Cash and bank balances 763 5,356 107 6,226

33,265 235,098 223 268,586

Financial LiabilitiesHire purchase payables - 500 - 500Exchangeable Medium Term

Notes - 216,387 - 216,387Other payables and accruals - 1,585 554 2,139Trade payables 1,254 - - 1,254Amount owing to subsidiaries - 22,517 809 23,326Amounts owing to related

parties - 456 - 456

1,254 241,445 1,363 244,062

Net financial assets/(liabilities) 32,011 (6,347) (1,140) 24,524

Less: Net financial liabilities denominated in the entity’s functional currency - 6,347 - 6,347




cont’d





Foreign currency risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies as at the end of the reporting period, with all other variables held constant:-


RM’000 RM’000 RM’000 RM’000

Effects on (Loss)/Profit After Taxation

USD/RM:- strengthened by 5% -844 +1,630 -1,139 -1,216- weakened by 5% +844 -1,630 +1,139 +1,216

Others:-- strengthened by 5% +64 +73 +336 -43- weakened by 5% -64 -73 -336 +43

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from long-term borrowings with variable rates. The Group’s policy is to obtain the most favourable interest rates available and by maintaining a balanced portfolio mix of fixed and floating rate borrowings.

The Group’s fixed deposits with licensed banks and borrowings are carried at amortised cost. Therefore, they are not subject to interest rate risk as defined by MFRS 7 since neither their carrying amounts nor the future cash flows will fluctuate because of a change in market interest rates.

The Group’s exposure to interest rate risk based on the carrying amounts of the financial instruments at the end of the reporting period is disclosed in Note 19 to the financial statements.






(ii) Interest Rate Risk (cont’d)

Interest rate risk sensitivity analysis

Any reasonably possible change in the interest rates of floating rate short term investment at the end of the reporting period does not have material impact on the loss/profit after taxation and other comprehensive income of the Group and of the Company and hence, no sensitivity analysis is presented.

(iii) Equity Price Risk

The Group’s principal exposure to equity price risk arises mainly from changes in quoted investment prices. The Group manages its exposure to equity price risk by maintaining a portfolio of equities with different risk profiles.

If prices for quoted investments at the end of the reporting period strengthen by 5% (2016 – Nil) with all other variables being held constant, the other comprehensive income of the Group and of the Company would have increased by RM2,900,000 (2016 – Nil). A 5% (2016 – Nil) weakening in the quoted prices would have had an equal but opposite effect on the other comprehensive income of the Group and of the Company.

(b) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including unquoted investments and cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Groups uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 90 days, which are deemed to have higher credit risk, are monitored individually.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience and the current economic environment.

The Company provides financial guarantee to financial institutions for credit facilities granted to certain subsidiaries. The Company monitors the results of these subsidiaries regularly and repayments made by the subsidiaries.



cont’d



(b) Credit Risk (cont’d)

(i) Credit risk concentration profile

The Group’s major concentration of credit risk relates to the amounts owing by 3 customers which constituted approximately 38% of its trade receivables at the end of the reporting period.

In addition, the Group also determines concentration of credit risk by monitoring the geographical region of its trade receivables on an ongoing basis. The credit risk concentration profile of trade receivables at the end of the reporting period is as follows:-


RM’000 RM’000 RM’000 RM’000

Malaysia 17 - - -Outside Malaysia 148,060 141,076 275 21,298

148,077 141,076 275 21,298

(ii) Exposure to Credit Risk At the end of the reporting period, the maximum exposure to credit risk is represented

by the carrying amount of each class of financial assets recognised in the statement of financial position of the Group and of the Company after deducting any allowance for impairment losses (where applicable).

In addition, the Company’s maximum exposure to credit risk also includes corporate guarantees provided to its subsidiaries as disclosed under the ‘Maturity Analysis’ of item (c) below, representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period. As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.






(iii) Ageing analysis

The ageing analysis of the Group’s trade receivables (includes amount owing by related parties) is as follows:-

GrossAmount

IndividualImpairment

CollectiveImpairment

CarryingValue


2017

Not past due 1,531 - (86) 1,445

Past due:- less than 3 months 94,663 - - 94,663- 3 to 6 months 14,477 - (700) 13,777- over 6 months 38,196 - (4) 38,192

148,867 - (790) 148,077

2016

Not past due 32,557 - - 32,557

Past due:- less than 3 months 57,990 - (684) 57,306- 3 to 6 months 12,742 - - 12,742- over 6 months 38,471 - - 38,471

141,760 - (684) 141,076



cont’d




(iii) Ageing analysis (cont’d)

The ageing analysis of the Group’s trade receivables (includes amount owing by related parties) is as follows:- (cont’d)

GrossAmount

IndividualImpairment

CollectiveImpairment

CarryingValue


2017

Not past due 1,347 - (86) 1,261

Past due:- less than 3 months 187 - - 187- 3 to 6 months 7,217 - (551) 6,666- over 6 months 4,489 - (1) 4,488

13,240 - (638) 12,602

2016

Not past due 2,892 - - 2,892

Past due:- less than 3 months 20,009 - (638) 19,371- 3 to 6 months 195 - - 195- over 6 months 164 - - 164

23,260 - (638) 22,622

The collective impairment allowance is determined based on estimated irrecoverable amounts determined by reference to past default experience.

The Group believes that no additional impairment allowance is necessary in respect of these trade receivables that are past due but not impaired because they are companies with good collection track record and no recent history of default.





(c) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

Maturity Analysis

The following table sets out the maturity profile of the financial liabilities (include discontinued operations) as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

ContractualInterest

RateCarryingAmount

ContractualUndiscounted

Cash FlowsWithin1 Year

1 – 5Years

Over 5Years

The Group % RM’000 RM’000 RM’000 RM’000 RM’000

2017

Non-derivative Financial Liabilities

Hire purchase payables 4.73 380 429 136 293 -Exchangeable Medium

Term Notes 8.00 233,711 336,853 - 336,853 -Term Loan 4.50 713 874 371 503 -Trade payables - 128,537 128,537 128,537 - -Other payables and

accruals - 16,399 16,399 16,399 - -Amount owing to

associates - 2,347 2,347 2,347 - -

382,087 485,439 147,790 337,649 -



cont’d



(c) Liquidity Risk (cont’d)

Maturity Analysis (cont’d)

The following table sets out the maturity profile of the financial liabilities (include discontinued operations) as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):- (cont’d)

ContractualInterest

RateCarryingAmount



1 – 5Years

Over 5Years

The Group % RM’000 RM’000 RM’000 RM’000 RM’000

2016



Term Notes 8.00 216,387 345,867 - - 345,867Trade payables - 89,504 89,504 89,504 - -Other payables and

accruals - 14,390 14,390 14,390 - -Amount owing to related

parties - 456 456 456 - -

321,237 450,782 104,502 413 345,867








ContractualInterest

RateCarryingAmount



1 – 5Years

Over 5Years

The Company % RM’000 RM’000 RM’000 RM’000 RM’000

2017


Hire purchase payables 4.73 380 429 136 293 -Exchangea-ble Medium

Term Notes 8.00 233,711 336,853 - 336,853 -Trade payables - 1 1 1 - -Other payables - 2,113 2,113 2,113 - -Amount owing to

subsidiaries - 30,578 30,578 30,578 - -Amount owing to

associates - 2,347 2,347 2,347 - -Financial guarantee

contracts in relation to corporate and bank guarantee given to certain subsidiaries - - 1,381 1,381 - -

269,130 373,702 36,556 337,146 -



cont’d






ContractualInterest

RateCarryingAmount



1 – 5Years

Over 5Years

The Company % RM’000 RM’000 RM’000 RM’000 RM’000

2016



Term Notes 8.00 216,387 345,867 - - 345,867Trade payables - 1,254 1,254 1,254 - -Other payables - 2,139 2,139 2,139 - -Amount owing to

subsidiaries - 23,326 23,326 23,326 - -Amount owing to related

parties - 456 456 456 - -Financial guarantee

contracts in relation to corporate and bank guarantee given to certain subsidiaries - - 920 920 - -

244,062 374,527 28,247 413 345,867




39.2 CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio that complies with debt covenants and regulatory, if any. The debt-to-equity ratio is calculated as total net interest bearing borrowings divided by total equity.

The debt-to-equity ratio of the Group as at the end of the reporting period was as follows:-

The Group2017 2016

RM’000 RM’000

Hire purchase payables 380 500Exchangeable Medium Term Note 233,711 216,387Term loan 713 -

234,804 216,887Less: Short-term investments (1,185) (14,813)Less: Fixed deposits with licensed banks (9,786) (13,336)Less: Cash and bank balances (31,110) (34,257)

Net debt 192,723 154,481

Total equity 169,482 130,142

Debt-to-equity ratio 1.14 1.19

There was no change in the Group’s approach to capital management during the financial year.



cont’d


39.3 CLASSIFICATION OF FINANCIAL INSTRUMENTS


RM’000 RM’000 RM’000 RM’000

Financial Assets

Available-for-sale financial assetsUnquoted investments 209,623 209,623 137 137Quoted warrant 57,998 - 57,998 -

267,621 209,623 58,135 137

Loans and receivables financial assetsTrade receivables 148,077 141,076 275 21,298Other receivables and deposits 3,602 5,233 1,174 1,869Amount owing by subsidiaries - - 240,117 220,124Amount owing by associates 18,572 - - -Amount owing by a related party - - 18,240 -Short-term investments 1,185 14,813 1 13,882Fixed deposits with licensed banks 9,786 13,336 3,192 5,050Cash and bank balances 31,110 34,257 2,713 6,226

212,332 208,715 265,712 268,449

Financial Liabilities

Other financial liabilitiesHire purchase payables 380 500 380 500Exchangeable Medium Term Note 233,711 216,387 233,711 216,387Term loans 713 - - -Trade payables 128,537 89,504 1 1,254Other payables and accruals 16,399 14,390 2,113 2,139Amount owing to subsidiaries - - 30,578 23,326Amount owing to related parties - 456 - 456Amount owing to associates 2,347 - 2,347 -

382,087 321,237 269,130 244,062




39.4 FAIR VALUE INFORMATION

The fair values of the financial assets and financial liabilities of the Group and of the Company which are maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments or repayable on demand terms.

The fair value of quoted investments is determined at their quoted closing bid prices at the end of the reporting period.

The following table sets out the fair value profile of financial instruments that are carried at fair value and those not carried at fair value at the end of the reporting period:-

Fair Value Of Financial Instruments Carried

At Fair Value

Fair Value Of Financial Instruments Not Carried

At Fair ValueTotal

FairValue

CarryingAmountLevel 1 Level 2 Level 3 Level 1 Level 2 Level 3

The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2017Financial AssetsUnquoted investments - - 209,486 - - - 209,486 209,486Club membership - - - - - - # 137Quoted warrant 57,998 - - - - - 57,998 57,998

Financial LiabilitiesHire purchase payables - - - - 380 - 380 380Exchangeable Medium

Term Note - - - - 240,719 - 240,719 233,711Term loans - - - - 713 - 713 713

2016Financial AssetsUnquoted investments - - 209,486 - - - 209,486 209,486Club membership - - - - - - # 137

Financial LiabilitiesHire purchase payables - - - - 500 - 500 500Exchangeable Medium Term

Note - - - - 214,851 - 214,851 216,387 # The fair value cannot be reliably measured using valuation technique due to lack of marketability of the

unquoted shares.



cont’d


39.4 FAIR VALUE INFORMATION (cont’d)

Other than those disclosed below, the fair values of the financial assets and financial liabilities of the Company maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments.

Fair Value Of Financial Instruments Carried

At Fair Value

Fair Value Of Financial Instruments Not Carried

At Fair ValueTotal

FairValue

CarryingAmountLevel 1 Level 2 Level 3 Level 1 Level 2 Level 3

The Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2017Financial AssetClub membership - - - - - - # 137Quoted warrant 57,998 - - - - - 57,998 57,998


Note - - - - 240,719 - 240,719 233,711

2016Financial AssetClub membership - - - - - - # 137


Note - - - - 214,851 - 214,851 216,387

# The fair value cannot be reliably measured using valuation technique due to lack of marketability of the unquoted shares.




39.4 FAIR VALUE INFORMATION (cont’d)

(a) The fair values above are for disclosure purposes and have been determined using the following basis:-

(i) Fair Value of Financial Instruments carried at Fair Value

The level 3 fair value of the other investments is determined using discounted cash flow approach based on pre-tax cash flow projections performed by management based on the significant unobservable inputs as disclosed in Note 8 to the financial statements.

(ii) Fair Value of Financial Instruments not carried at Fair Value

The fair values hire purchase payable and borrowings are determined by discounting the relevant cash flows using interest rates for similar instruments at the end of the reporting period. The interest rates used to discount the estimated cash flows are as follows:-


% % % %

Hire purchase payables 4.73 4.73 4.73 4.73Exchangeable Medium Term

Notes 9.10 7.60 9.10 7.60Term loans 4.50 - - -

40. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR a) The Companies Act 2016 came into operation on 31 January 2017 (except for Section 241 and

Division 8 of Part III of the said Act) and replaced Companies Act 1965. Amongst the key changes introduced under the Companies Act 2016 that have affected the financial

statements of the Group and of the Company upon its initial implementation are:-

(i) Removal of the authorised share capital;

(ii) Ordinary shares ceased to have par value; and

(iii) Share premium account transferred to share capital account.

The Companies Act 2016 was applied prospectively and the impacts on the implementation are disclosed in the respective notes to financial statements.



cont’d

40. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (cont’d)

b) In the previous financial year, PISB entered into a conditional Sale and Purchase Agreement to acquire 1,600,000 ordinary shares representing 80% of the enlarged share capital of Webonline Dot Com Sdn. Bhd. (“WOL”) for a total cash consideration of RM9,000,000. The completion of the acquisition is subject to the approval of Bank Negara Malaysia and/or any regulatory authority (if required). The acquisition was completed on 6 January 2017.

c) In the previous financial year, WESB entered into a share subscription agreement to acquire 20% of the enlarged share capital of Shenzhen Memo Technology Co. Ltd for a total cash consideration of RMB10 million (approximately RM6.4 million). The completion of the acquisition is subject to the approval of Economy, Trade and Information Commission of Shenzhen Municipality and/or any other regulatory authority (if required). The acquisition was completed on 17 February 2017.

d) On 21 March 2017, the Company increased its issued shares from 690,446,719 to 758,720,619 by way of an issuance and allotment of 68,273,900 new ordinary shares at an issue price of RM0.265 each for the acquisition of new business and/or working capital purposes.

e) On 12 April 2017, the Company issued an undertaking to G3 to subscribe in full for its rights entitlement under the Proposed Rights Issue to be undertaken by G3. The Proposed Subscription will entail the subscription of 60,500,000 Rights Shares, together with 45,375,000 Warrants for a total consideration of RM12,100,000.

f) On 17 July 2017, PISB acquired 350,000 ordinary shares representing 100% equity interest in MSSB for a total cash consideration of RM4,000,000.

g) On 21 July 2017, NTSB incorporated a subsidiary, Vivohub Mobile Pte Ltd (“Vivohub”) in Singapore. The initial issued shares of Vivohub would be SGD100,000/- divided into 100,000 new ordinary shares. NTSB subscribed for 60% equity interest in Vivohub.

h) On 7 September 2017, a wholly-owned subsidiary, Kiple Media Sdn Bhd was incorporated with total issued and paid-up capital of two ordinary shares.

i) On 7 September 2017, the Company had subscribed in full for its rights entitlement under the Proposed Rights Issue undertaken by G3. The proposed subscription entailed the subscription of 60,500,000 rights shares, together with 45,375,000 warrants for a total consideration of RM12.100 million.

j) On 8 September 2017, the Company acquired additional 41.25 million provision allotment of rights (“PAL”) under the Rights Issue of G3 for a total consideration of RM4.125 million via an offmarket direct business transaction.

Pursuant to the PAL, the Company is entitled to subscribe for an additional 41.25 million G3 under the Rights Issue (“Additional Entitlement “). Subsequently, the Company subscribed for its Additional Entitlement under the Rights Issue at RM0.20 per G3 Share for a total consideration of RM8.25 million. Upon the completion of the Rights Issue and additional entitlement, the equity interest of the Company in G3 increased from 22% to 32%.



40. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (cont’d)

k) On 26 September 2017, PISB obtained a conditional letter of approval from the Ministry of Wellbeing, Housing and Local Government (“Ministry”) for the money lending licence under the Money Lending Act 1951 (Act 400) (“Conditional Approval”).The Conditional Approval is subject to the Directors of PISB and the business premises of PISB complying to and satisfying the prescribed requirements stated in the Ministry’s approval letter.

l) On 4 December 2017, GPA was placed under Member’s Voluntary Winding-up.

m) On 15 December 2017, the Company entered into a memorandum of understanding (the “MOU”) with Asia Television Digital Media (Malaysia) Sdn. Bhd. The MOU is intended to record the general understanding between both parties to cooperate and form a joint venture to operate broadcasting television channels in Malaysia.

41. SIGNIFICANT EVENT OCCURRING AFTER THE REPORTING PERIOD

a) On 23 January 2018, the Company entered into a contract with MYTV Broadcasting Sdn Bhd for the design, supply, assembly, testing and acceptance of DVB-T2(T2000) set-top boxes (“the Contract”). The total value of the Contract assuming all purchase orders are issued is estimated to be up to RM272.0 million


Total Number of Shares Issued : 751,012,919(Excluding 7,707,700 Treasury Shares)

Class of Shares : Ordinary shares

Voting Rights : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS

Range of shareholdingsNo. of

Holders% of

HoldersNo. of

Shares% of Issued

Capital

Less than 100 204 3.04 8,678 0.00100 -1,000 664 9.89 486,421 0.061,001-10,000 3,108 46.28 17,593,978 2.3410,001-100,000 2,280 33.95 81,038,917 10.79100,001-37,550,644 (*) 457 6.81 454,989,450 60.5837,550,645 and above (**) 2 0.03 196,895,475 26.22

Total 6,715 100.00 751,012,919 100.00

Notes:* - Less than 5% of the issued holdings** - 5% and more of the issued holdings

THIRTY LARGEST REGISTERED HOLDERS AS AT 29 MARCH 2018

No. Name of HoldersNo. of

Holdings% of Issued

Capital

1. Kenanga Nominees (Asing) Sdn BhdPledged Securities Account for Green Packet Holdings Ltd

121,000,000 16.11

2. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Puan Chan Cheong

75,895,475 10.11

3. JF Apex Nominees (Tempatan) Sdn BhdPledged Securities Account for Sieh Joo Shiong (Margin)

32,249,000 4.29

4. Gemtek Technology Co., Ltd 26,273,280 3.505. Citigroup Nominees (Asing) Sdn Bhd

Exempt AN for Citibank New York (Norges Bank 14)21,145,300 2.82

6. Kenanga Nominees (Asing) Sdn Bhd Pledged Securities Account for Green Packet Holdings Ltd

20,000,000 2.66

7. Kenanga Investment Bank BerhadIVT – (EDSP-OTC/ESH)

19,895,000 2.65

8. Malaysia Nominees (Tempatan) Sendirian BerhadGreat Eastern Life Assurance (Malaysia) Berhad (LBF)

14,000,000 1.86

9. Citigroup Nominees (Tempatan) Sdn BhdEmployees Provident Fund Board (PHEIM)

12,587,000 1.68

Statement of ShareholdingsAs at 29 March 2018


THIRTY LARGEST REGISTERED HOLDERS AS AT 29 MARCH 2018 (cont’d)

No. Name of HoldersNo. of

Holdings% of Issued

Capital

10. Malacca Equity Nominees (Tempatan) Sdn BhdExempt AN for Phillip Capital Management Sdn Bhd (EPF)

12,164,000 1.62

11. Malacca Equity Nominees (Tempatan) Sdn BhdExempt AN for Phillip Capital Management Sdn Bhd

11,269,900 1.50

12. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account for Kon Tek Yoong

10,745,600 1.43

13. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account for Lim Poh Yit

9,000,000 1.20

14. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account for Cheok Kuang Yi

8,550,000 1.14

15. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account for Lim Boon Hong

8,200,000 1.09

16. DB (Malaysia) Nominee (Tempatan) Sendirian BerhadExempt An for Deutsche Bank AG Singapore (Maybank Sg PWM)

8,000,000 1.07

17. Citigroup Nominees (Asing) Sdn BhdCEP for PHIEM SICAV-SIF

7,622,800 1.02

18. Citigroup Nominees (Asing) Sdn BhdExempt AN for UBS AG Hong Kong (Foreign)

7,491,300 1.00

19. Kenanga Nominees (Tempatan) Sdn BhdPledged Securities Account for Global Man Capital Sdn Bhd

6,700,000 0.89

20. Chang, Jin-Yi 6,379,000 0.8521. Tan Yew Sing 5,454,000 0.7322. CIMB Group Nominees (Asing) Sdn Bhd

Exempt AN for DBS Bank Ltd (SFS)4,277,000 0.57

23. DB (Malaysia) Nominee (Tempatan) Sendirian BerhadDeutsche Trustees Malaysia Berhad for United Asean Discovery Fund

4,254,500 0.57

24. Yeo Jin Hui 3,950,000 0.5325. Malacca Equity Nominees (Tempatan) Sdn Bhd

Exempt AN for Phillip Capital Management Sdn Bhd 3,943,609 0.53

26. CIMB Group Nominees (Tempatan) Sdn Bhd CIMB Commerce Trustee Berhad-AMB Smallcap Trust Fund

3,935,400 0.52

27. DB (Malaysia) Nominee (Asing) Sdn BhdDeutsche Bank AG Singapore for Summit Synergy Limited (Maybank SG)

3,931,600 0.52

28. Cimsec Nominees (Tempatan) Sdn BhdPledged Securities Account for Terence Wong @ Huang Thar-Rearn

3,500,000 0.47

29. Alliancegroup Nominees (Tempatan) Sdn BhdPledgedSecuritiesaccountforKokOnn(7002585)

3,000,000 0.40

30. RHB Nominees (Tempatan) Sdn BhdTan Ah Loy @ Tan May Ling

3,000,000 0.40

TOTAL 478,413,764 63.70

Statement of ShareholdingsAs at 29 March 2018cont’d


SUBSTANTIAL SHAREHOLDERS

According to the Register of Substantial Shareholders required to be kept under Section 144 of the Companies Act, 2016, the substantial shareholders of the Company are as follows:

Direct (A) Indirect (B)Shareholders No. of shares % No. of shares % Total interest %

Green Packet Holdings Ltd 141,000,000 18.77 - - - -Puan Chan Cheong 76,320,770 10.16 141,000,000 18.771 217,320,770 28.93Tan Sri Dato’ Kok Onn 5,143,800 0.68 141,000,000 18.771 146,143,800 19.45

DIRECTORS’ INTEREST

According to the register required to be kept under Section 59 of the Companies Act, 2016, the Directors’ Interest in the shares of the Company and its related companies are as follows:

Direct IndirectDirectors No. of Shares % No. of Shares %

Puan Chan Cheong 76,320,770 10.16 141,000,0001 18.77Tan Sri Dato’ Kok Onn 5,143,800 0.68 141,000,0001 18.77Boey Tak Kong 1,950,000 0.26 - -

Notes: 1 Deemed interested by virtue of their substantial shareholdings in Green Packet Holdings Ltd to the to the extent of

theCompany’sinterest,inaccordancewithSection8oftheCompaniesAct2016.

Other than disclosed above, none of the other directors holding office had no interest in shares in the Company or its related corporations.

Statement of ShareholdingsAs at 29 March 2018

cont’d


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the 16th Annual General Meeting of the Company will be held at Ballroom III, Main Wing, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, Off Persiaran Tropicana, 47410 Petaling Jaya, Selangor on Monday, 4 June 2018 at 10:00 a.m. for the following purposes:

1. To receive the Audited Financial Statements for the financial year ended 31 December 2017, together with the Reports of the Directors and the Auditors thereon.

2. To re-elect the following Directors who retire pursuant to Article 86 of the Company’s Articles of Association (“the Constitution”):-

a) Mr. Tan Kay Yen b) Mr. Boey Tak Kong 3. To approve the following payments to the Non-Executive Directors:- a) Directors’ fees of RM265,024 for the financial year ending 31 December 2018

for the Non-Executive Directors. (2017: RM251,209)

b) Directors’ benefits payable to the Non-Executive Directors of up to the amount of RM100,000, from 5 June 2018 until the next Annual General Meeting of the Company.

4. To re-appoint Messrs Crowe Horwath as Auditors of the Company and to authorize the Directors to fix their remuneration.

As special business

To consider and if thought fit, pass the following Ordinary Resolutions:-

5. Authority to Allot and Issue Shares Pursuant to Sections 75 and 76 of the Companies Act, 2016

“THAT, pursuant to Sections 75 and 76 of the Companies Act, 2016, the Company’s

Articles of Association (“the Constitution”) and the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the total issued and paid-up share capital of the Company (excluding treasury shares) for the time being and such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

6. Proposed Renewal of Authority to Purchase its Own Shares by the Company

“THAT, subject to Section 127 of the Companies Act, 2016 (“the Act”), the provisions of the Company’s Articles of Association (“the Constitution”) and the requirements of Bursa Malaysia Securities Berhad and any other relevant authority, the Directors of the Company be and are hereby authorized to purchase such number of ordinary shares in the Company through the Bursa Malaysia Securities Berhad subject further to the following:-

(Refer to Explanatory Note A)

Resolution 1Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6


Notice of Annual General Meetingcont’d

(i) the maximum number of shares which may be purchased and/or held by the Company shall be equivalent to 10% of the issued and paid-up share capital of the Company (“Shares”) for the time being;

(ii) an amount not exceeding the Company’s retained profits at the time of purchase(s) will be allocated by the Company for the purchase of own Shares;

(iii) the authority conferred by this resolution will commence immediately upon passing of this resolution and will expire at the conclusion of the next Annual General Meeting of the Company, unless earlier revoked or varied by ordinary resolution of the shareholders of the Company in a general meeting or the expiration of the period within which the next Annual General Meeting after that date is required by the law to be held, whichever occurs first, but not so as to prejudice the completion of purchase(s) by the Company before the aforesaid expiry date and, in any event, in accordance with the provisions of the guidelines issued by Bursa Malaysia Securities Berhad or any other relevant authority; and

(iv) upon completion of the purchase(s) of the Shares by the Company, the Directors of the Company be and are hereby authorized to deal with the Shares in the following manner:-

(a) distribute the treasury shares as dividends to Shareholders; or (b) resell the treasury shares or any of the treasury shares in accordance

with Listing Requirements; or (c) transfer the treasury shares, or any of the shares for the purposes of or

under an employees’ share scheme; or (d) transfer the treasury shares, or any of the shares as purchase

consideration; or (e) cancel the treasury shares, or any of the treasury; or (f) sell, transfer or otherwise use the treasury shares for such other

purposes as allowed by the Act.

in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and the requirements of Bursa Malaysia Securities Berhad and any other relevant authority for the time being in force;

AND THAT the Directors of the Company be and are hereby authorized to take all such steps as are necessary or expedient to implement or to effect the purchase(s) of the Shares with full power to assent to any condition, modification, variation and/or amendment as may be imposed by the relevant authorities and to take all such steps as they may deem necessary or expedient in order to implement, finalize and give full effect in relation thereto.”

7. Proposed Retention of Independent Non-Executive Chairman

“THAT Tan Sri Dato’ Dr Haji Omar Bin Abdul Rahman who has served as Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, shall continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with Malaysian Code of Corporate Governance.”

Resolution 7

Resolution 8



8. Proposed Retention of Independent Non-Executive Director “THAT Mr. Boey Tak Kong who has served as Independent Non-Executive Director

of the Company for a cumulative term of more than nine (9) years, shall continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with Malaysian Code of Corporate Governance.”

9. Proposed Retention of Independent Non-Executive Director “THAT Encik A. Shukor Bin S.A. Karim who has served as Independent Non-Executive

Director of the Company for a cumulative term of more than nine (9) years, shall continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with Malaysian Code of Corporate Governance.”

BY ORDER OF THE BOARDTai Siew May (MAICSA 7015823)Company Secretary

Petaling Jaya, Selangor30 April 2018

Notes:

1. A member entitled to attend and vote at this meeting is entitled to appoint proxy/proxies to attend and vote in his stead but his attendance shall automatically revoke the proxy’s authority. A proxy may but need not be a member of the Company. If the proxy is not a member of the Company, he need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.

2. A member shall be entitled to appoint up to three (3) proxies to vote at the same meeting. Where a member appoints more thanone (1)proxy, theappointmentshallbe invalidunlesshespecifies theproportionofhisholdings toberepresented by each proxy.

3. Where a member of the Company is an authorised nominee as defined under the Securities Industry (CentralDepositories) Act, 1991 (“SICDA”), it may appoint at least one (1) proxy but limited to three (3) 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 of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiplebeneficialownersinonesecuritiesaccount(“Omnibusaccount”), thereisnolimittothenumberofproxieswhich the exempt authorised nominee may appoint in respect of each omnibus account it holds.

5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing and if the appointer is a corporation/company, either under its common seal or the hands of its attorney.

6. The instrumentappointingaproxymustbedepositedat theofficeof theCompany’sShareRegistrar,SymphonyShareRegistrarsSdnBhd, Level 6,SymphonyHouse,PusatDaganganDana1, JalanPJU1A/46, 47301PetalingJaya,SelangorDarulEhsannotlessthanforty-eight(48)hoursbeforethetimeappointedforholdingthemeetingorany adjournment thereof.

Resolution 9

Resolution 10


7. For the purpose of determiningwho shall be entitled to attend and vote at thismeeting, the Company shall berequesting the BursaMalaysia Depository Sdn Bhd to issue a Record of Depositors as at 25May 2018. Only aDepositorwhosenameappearsontheRecordofDepositorsasat25May2018shallbeentitledtoattendandvoteatthis meeting or appoint proxies to attend, speak and vote on his/her behalf.

EXPLANATORY NOTE A

The Audited Financial Statements are for discussion only as the provision of Section 340(1) of the Companies Act 2016 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this item will not be put for voting.

EXPLANATORY NOTE ON ORDINARY BUSINESS:

Ordinary Resolution 4 – Benefits payable to Non-Executive Directors

The benefits payable to the Non-Executive Directors consists of meeting allowances of RM1,000 per meeting for Board and Board committee meetings. At the 15th Annual General Meeting held on 31 May 2017, the benefits payable to the Non-Executive Directors of the Company from 1 January 2017 until the 16th Annual General Meeting on 4 June 2018 was RM78,000. The utilization of this approved amount as at 31 December 2017 was RM48,000. Based on the schedule meetings up to the date of this Notice of Meeting, the utilization was RM70,000. Hence, the total utilized amount was 89.7% of the approved amount. The proposed increment is to facilitate more meetings to be conducted from the 5 June 2018 until the next Annual General Meeting of the Company.

EXPLANATORY NOTES ON SPECIAL BUSINESS:

1) The Resolution 6, if passed, will empower the Directors of the Company to issue shares up to 10% of the issued and paid-up share capital (excluding treasury shares) of the Company at the time of such issuance of shares and for such purposes as they consider would be in the best interest of the Company without having to convene separate general meetings.

The purpose of this general mandate will provide flexibility to the Company for any possible fundraising activities, including but not limited to placement of shares, funding future investment project(s), working capital and/or acquisitions. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company. The Company did not raise any new funds under the mandate approved by shareholders at the 15th Annual General Meeting held on 31 May 2017.

2) The Resolution 7, if passed, will empower the Company to purchase and/or hold up to 10% of the total issued shares of the Company. This authority unless revoked or varied by the Company at a General Meeting will expire at the next Annual General Meeting. (Please refer to the Statement of Share Buy-Back dated 27 April 2018 which is dispatched together with this Annual Report for further information).

The Company did not execute any share buyback under the mandate approved by shareholders at the 15th Annual General Meeting held on 31 May 2017. As the date of this Notice, the Company has 7,707,700 treasury shares.

3) The Resolution 8, if passed, will allow Tan Sri Datuk Dr. Haji Omar bin Abdul Rahman to be retained and continue to act as an Independent Non-Executive Chairman of the Company.

The Nomination Committee and the Board have assessed the independence of Tan Sri Datuk Dr. Haji Omar bin Abdul Rahman and recommended him to continue to act as an Independent Non-Executive Chairman of the Company. The Board’s justifications for the retention of Tan Sri Datuk Dr. Haji Omar bin Abdul Rahman are set out in the Corporate Governance Overview Statement in this Annual Report.



4) The Resolution 9, if passed, will allow Mr Boey Tak Kong to be retained and continue to act as an Independent Non-Executive Director of the Company.

The Nomination Committee and the Board have assessed the independence of Mr Boey Tak Kong and recommended him to continue to act as an Independent Non-Executive Director of the Company. The Board’s justifications for the retention of Mr Boey Tak Kong are set out in the Corporate Governance Overview Statement in this Annual Report.

5) The Resolution 10, if passed, will allow Encik A.Shukor Bin S.A. Karim to be retained and continue to act as an Independent Non-Executive Director of the Company.

The Nomination Committee and the Board have assessed the independence of Encik A.Shukor Bin S.A. Karim and recommended him to continue to act as an Independent Non-Executive Director of the Company. The Board’s justifications for the retention of Encik A.Shukor Bin S.A. Karim are set out in the Corporate Governance Overview Statement in this Annual Report.

Pursuant to Paragraph 8.29(A) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all resolutions set out in this Notice will be put to vote by way of poll.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

As at the date of this Notice, there are no individuals who are standing for election as Directors.

1. Further details of individuals standing for re-election and re-appointment as Directors are set out in the Board of Directors’ Profile and Statement of Shareholdings on pages 24 to 29 and 189 respectively of this Annual Report.

All independent Non-Executive Directors have completed their annual assessment in accordance with the definition of independent director pursuant to the Main Market Listing Requirement.

The Board is satisfied with the level of independence demonstrated by all the Independent Non-Executive Directors with their ability to act in the interest of the Company in providing unbiased views and impartiality during the Board’s deliberations and decision-making process. The Board is of the view that the length of service of the Independent Directors on the Board do not in any way interfere with their independent judgement and ability to act in the best interest of the Group.

2. General Mandate for the Issuance and Allotment of New Shares

Please refer to the explanatory notes for Resolution 6 set out in the Notice of the 16th Annual General Meeting.


Form of Proxy

I/We NRIC/Passport/Company No. Tel:

of

being a Shareholder of the Company, hereby appoint *THE CHAIRMAN OF THE MEETING or failing him:

Name Address NRIC/Passport No.Proportion of Shareholdings (%)

1.

*And/or (delete as appropriate)2.

*And/or (delete as appropriate)3.

* If you wish to appoint other person/persons to be your proxy/proxies, kindly delete the words “The Chairman of the Meeting or failing him” and insert the name/names of the person/persons desired.

as my/our proxy/proxies, to vote for me/us on my/our behalf at the 16th Annual General Meeting of the Company to be held at Ballroom III, Main Wing, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, Off Persiaran Tropicana, 47410 Petaling Jaya, Selangor on Monday, 4 June 2018 at 10:00 a.m. or at any adjournment thereof.

Please indicate with a cross (X) in the space provided, how you wish your vote to be cast. If you do not do so, the proxy may vote or abstain at his/her discretion.

NO. ORDINARY RESOLUTIONS First Proxy “A” Second Proxy “B” Third Proxy “C”FOR AGAINST FOR AGAINST FOR AGAINST

1. To re-elect Mr. Tan Kay Yen as Director.2. To re-elect Mr. Boey Tak Kong as Director.3. To approve the following payments to the Non-Executive

Directors:- • Directors’ fees of RM265,024 for the financial year ending

31 December 2018. (2017: RM251,209)4. • Directors’ benefits of up to the amount of RM100,000 from

5 June 2018 until the next Annual General Meeting of the Company.

5. To re-appoint Auditors of the Company and authorise the Directors to fix their remuneration.

6. Authority to Allot and Issue Shares Pursuant to Sections 75 and 76 of the Companies Act, 2016.

7. Proposed Renewal of Authority to Purchase its Own Shares by the Company.

8. Proposed retention of Tan Sri Datuk Dr. Haji Omar Bin Abdul Rahman as Independent Non-Executive Chairman.

9. Proposed retention of Mr. Boey Tak Kong as Independent Non-Executive Director.

10. Proposed retention of Encik A. Shukor Bin S.A. Karim as Independent Non-Executive Director.

Dated this ________________ day of ________________ 2018

Signature of Shareholder/Common Seal of Shareholder

Number of shares held:

CDS Account No.:

Contact No:

GREEN PACKET BERHAD(534942-H)

(Incorporated in Malaysia)

AFFIXSTAMP

Then Fold Here

First Fold Here

SHARE REGISTRARS OF GREEN PACKET BERHADSymphony Share Registrars Sdn Bhd

Level 6, Symphony House, Pusat Dagangan Dana 1,Jalan PJU 1A/46, 47301 Petaling Jaya,

Selangor Darul Ehsan

Notes:1. A member entitled to attend and vote at this meeting is entitled to appoint proxy/proxies to attend and vote in his stead but his attendance shall automatically

revoke the proxy’s authority. A proxy may but need not be a member of the Company. If the proxy is not a member of the Company, he need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.

2. A member shall be entitled to appoint up to three (3) proxies to vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shallbeinvalidunlesshespecifiestheproportionofhisholdingstoberepresentedbyeachproxy.

3. WhereamemberoftheCompanyisanauthorisednomineeasdefinedundertheSecuritiesIndustry(CentralDepositories)Act,1991(“SICDA”),itmayappointat least one (1) proxy but limited to three (3) 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. WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecurities 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. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing and if the appointer is a corporation/company, either under its common seal or the hands of its attorney.

6. TheinstrumentappointingaproxymustbedepositedattheofficeoftheCompany’sShareRegistrar,SymphonyShareRegistrarsSdnBhd,Level6,SymphonyHouse,PusatDaganganDana1,JalanPJU1A/46,47301PetalingJaya,SelangorDarulEhsannotlessthanforty-eight(48)hoursbeforethetimeappointedfor holding the meeting or any adjournment thereof.

7. Forthepurposeofdeterminingwhoshallbeentitledtoattendandvoteatthismeeting,theCompanyshallberequestingBursaMalaysiaDepositorySdnBhdtoissueaRecordofDepositorsasat25May2018.OnlyaDepositorwhosenameappearsontheRecordofDepositorsasat25May2018,shallbeentitledtoattend and vote at this meeting or appoint proxies to attend, speak and vote on his/her behalf.

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