Asia Poly AR2019_CB - I3investor

Advancing to new Perspectives

ASIA POLY HOLDINGS BERHAD [Registration No: 200301016756 (619176 - A)]

ANNUAL REPORT 2019

Table ofContents

Corporate Overview

Corporate Information 2

The Company and Its Business 3

Corporate Structure 9

Business Review

Financial Highlights 10

Five-Year Trend 11

Management Discussion and Analysis 12

Our Products 18

Governance

Board of Directors Profile 20

Senior Key Management Profile 22

Audit Committee Report 24

Corporate Governance Overview Statement

27

Additional Compliance Information 35

Sustainability Statement 37

Statement on Risk Management andInternal Control

40

Directors’ Responsibility Statement 43

Financial Statements

Directors’ Report 44

Statutory Declaration 50

Independent Auditors’ Report 51

Statements of Financial Position 55

Statements of Profit or Loss and Other Comprehensive Income

57

Statements of Change in Equity 59

Statements of Cash Flows 63

Notes to the Financial Statements 66

Additional Information

List of Properties Owned by the Company

137

Analysis on Shareholdings 138

Analysis of ICPS Holdings 140

Analysis of Warrants Holdings 142

Notice of Seventeenth Annual General Meeting

146

Administrative Notes 149

Proxy Form

AsiA Poly holdings berhAd [registrAtion no: 200301016756 (619176 - A)]

Annual report 20192

CORPORATE INFORMATION

AUDIT COMMITTEE

Tan Ban TattChairmanIndependent Non-Executive Director

Lim Teck SengNon-Independent Non-Executive Director

Datin Azreen Binti Abu NohIndependent Non-Executive Director

REMUNERATION COMMITTEE

Lim Teck SengChairmanNon-Independent Non-Executive Director

Dato’ Yeo Boon LeongExecutive Chairman


NOMINATION COMMITTEE

Tan Ban TattChairmanIndependent Non-Executive Director



COMPANY SECRETARIES

Ho Meng Chan (MACS 00574)SSM PC No. 202008003175

Wu Siew Hong (MAICSA 7039647)SSM PC No. 202008002457

SOLICITORS

Gary Teh & NgiamSolicitors and Advocates

SHARE REGISTRAR

Boardroom Share Registrars Sdn Bhd 11th Floor, Menara SymphonyNo. 5, Jalan Prof. Khoo Kay KimSeksyen 1346200 Petaling JayaSelangor Darul Ehsan Tel : +603 - 7890 4700 Fax : +603 - 7890 4670Email : [email protected]

REGISTERED OFFICE

308, Block A (3rd Floor)Kelana Business Centre97, Jalan SS 7/2, Kelana Jaya47301 Petaling JayaSelangor Darul EhsanTel : +603 - 7492 1818Fax : +603 - 7892 1933Email : [email protected]

PRINCIPAL BANKERS

Am Bank (M) Berhad

Am Islamic Bank Berhad

AUDITORS

Crowe Malaysia PLT 201906000005(LLP0018817-LCA) & AF 1018Chartered AccountantsKuala Lumpur

STOCK EXCHANGE

Ace Market of Bursa MalaysiaSecurities Berhad

Stock code : 0105Stock name : ASIAPLY

WEBSITE

www.asiapoly.com.my

Dato’ Yeo Boon LeongExecutive Chairman


Tan Ban TattIndependent Non-Executive Director

Thoo Soon HuatNon-Independent Non-Executive Director


BOARD OFDIRECTORS


Annual report 2019 3

Asia Poly was incorporated in Malaysia as a public company on 20 June 2003 under the Companies Act, 1965.

The Company was established as an investment holding company of the Asia Poly Group in conjunction with the listing of the Group on MESDAQ Market (now known as Ace Market) of the Bursa Malaysia Securities Berhad on 26 October 2005.

The Group consists of eight (8) subsidiaries, one (1) jointventure and one (1) jointventure associate. The Company’s sole subsidiary which was active is as follow: Date/ Effective Country of equitySubsidiary Incorporation interest Principal activities

Asia Poly Industrial 28 December 1984/ 100% Manufacturing and selling of Sdn Bhd Malaysia cast acrylic products

Asia Poly Industrial Sdn Bhd commenced operations in 1992 with one production line and a production capacity of 200 MT per month. Over the years, the Group has expanded its production capacity to 600 MT per month with two production lines. The production is currently running on two (2) twelve (12) hour shifts daily.

The Asia Poly Group manufactures and sells cell cast acrylic products under the brand name of “A-Cast”. Our Group supplies our products domestically as well as to international markets. For the financial year ended 31 Dec 2019, approximately 73% of its manufactured acrylic sheet products are exported overseas to various countries covering (4) regions such as Asia, Australia, Europe and South America and others (including India and Middle East). Its products are also exported to countries with stringent quality control such as Japan, Australia, Brazil and the UK. The cell cast acrylic sheet products are manufactured in accordance to customers’ specifications with enhanced physical properties and performance values.

Acrylic sheet products provide excellent light transmission and resist degradation caused by UV light. Acrylic sheet products are also significantly more shatter resistance as compared to glass as well as having higher tolerance to certain chemicals such as ammonia dilute acids and aliphatic hydrocarbons. Due to its unique characteristics that include versatility, flexibility, durability and optical clarity, acrylic sheet products are used as a wide range of sectors. This includes building and construction, industrial, transportation. Healthcare, automotive and consumer sectors.

A-cast brand products in compliance with the various certifications and standards such as ISO 9001:2015 certification, European Union’s EN263 standard for sanitary grade sheets and Japan’s JIS standard for general purpose sheets.

BUSINESS OVERVIEW

Asia Poly is principally an investment holding company. Through its subsidiary APSB, the Asia Poly Group is engaged in the manufacturing and selling of acrylic products (acrylic sheets and acrylic BLOCK) in various types and sizes.

Asia Poly Group through APSB manufactures a wide range of cast acrylic sheet products, which are available in various specifications such as clear, tinted, opaque and fluorescent. These cast acrylic sheet products are available in two (2) types of finishes, which are matt-finish and gloss finish. The cast acrylic sheet products manufactured by APSB are also available in a wide range of thickness, length and width. The cast acrylic sheet products can also be formulated into various colors according to customers’ specification.

Acrylic sheet products can be used in a wide range of applications such as cosmetic display stands, signs, furniture, infra-red applications, noise barriers, telephone booths, poster displays, interior fittings and other miscellaneous usage. Asia Poly Group’s acrylic sheet products are manufactured and marketed under the brand name of “A-Cast”.

THE COMPANY AND ITS BUSINESS


Annual report 20194

MANUFACTURING DIVISION The Asia Poly Group currently manufactures and sells cell cast acrylic sheet products under the brand name of “A-CAST”. The cell cast acrylic sheet products are manufactured in accordance to customers’ specifications and have enhanced physical properties and performance values as compared to high-end plastic materials available in the market.

Acrylic sheet products (acrylic sheets and acrylic BLOCK) or PMMA sheets offer excellent transparency, strength and outdoor durability. Acrylic sheet products serve as the building block for many product and are used principally by industries that require good weather resistance. Some other popular uses of acrylic sheet products include sound barriers, kitchen and bath countertops, bathroom stall partitions, furniture, signage, car accessories, skylights, aquariums, button lamps, telephones, musical instruments, security barriers for banks and limousine interiors. It is also the material of choice for museum cases and displays because of its clarity and workability.

Cast acrylic is a rigid, hard thermoplastic material, which is characterized by its color range availability and easy fabrication. Cast acrylic sheet products’ minimal aging, discoloration and does not deform easily is suitable for extended outdoor use. It has very clear and high gloss surfaces that enhances illumination and comprises a variety of colors. Cast acrylic sheet products weight half as much as general glass. It has excellent UV stability and is suitable for sign manufacture, point-of-sales display units, safety glazing, machine enclosures and model manufacture.

Advantages

FlexibilityAcrylic is termed as a thermoplastic that can be heated and combined with other monomers to be formed in various ways. Acrylic can be used to form a broader range of products typically used in paints and coatings. It is also polymerized into a solid form to become sheet

that can be easily cut, sawed, machined, thermoformed and cemented, making it an idealistic material for use in a variety of household goods as well as industrial products.

TransparencyAcrylic or PMMA sheet has a 92% transparency level much higher than glass and has only 50% the weight with higher impact resistance. Acrylic sheet products offer excellent optical characteristics, thickness tolerances, light stability and low internal stress levels for consistent performance. In summary, acrylic is the clearest of all the plastics, and it maintains an outstanding luminous transmittance of 92% while carrying half the weight of glass.

Strength and durabilityAcrylic products are durable and fairly rigid, although breakable beyond its maximum impact level. As with plastics, acrylic flexes much more than glass. Its impact resistance is also an important feature. If subjected to force beyond its limit, it does not shatter into small segments but rather large pieces. The measure of this resistance depends largely on the thickness chosen for the sheet. Some forms of specially made acrylic sheet/BLOCK are known to have enough impact resistance to combat the bullet of a 0.44-caliber handgun.

Weather resistanceAcrylic products can withstand long exposure to sunlight. Most commercial acrylics have been UV stabilised and as such, is weather resistance to extreme cold and sudden temperature changes. Therefore, this makes it highly suitable for outdoor application such as signboards.

Unaffected by laboratory chemicalsAcrylic products are unaffected by the aqueous solutions of most laboratory chemicals, including detergents, cleaners, dilute inorganic acids, alkaline and aliphatic hydrocarbons. This makes storage and maintenance easy, as acrylic is not known to cause hazardous chemical reaction when mixed with other compounds or chemicals.

THE COMPANY AND ITS BUSINESS (Cont’d)



Disadvantages

Poor scratch/abrasion resistanceAcrylics, as with most plastics, have poor scratch resistance, dissolved by a number of organic solvents or organic materials that are not solvents for acrylic, which can cause cracking and crazing. This makes it unsuitable as a substitute product for many items requiring high level of scratch resistance. However, certain acrylic products can be mixed or coated with special abrasion-resistant additives during the production process, which significantly increases the service life of the products while retaining its enhanced properties. It offers higher level of resistance from yellowing and hazing for an extended service life in high profile architectural glazing.

Difficult to join/weldAcrylic is difficult to weld which makes it unsuitable for products that require joining parts. However, acrylic can be satisfactorily solvent cemented.

PROSPECTS

Currently, Asia Poly Group's manufacturing facility in Klang, Selangor has 2 production lines manufacturing on average 600 MT worth of acrylic sheets per month. The acrylic sheets are used for various purposes such as building applications (e.g. interior decorative partitions), food catering (e.g. trays and display counter covers), domestic/ household (e.g. cabinets and furniture), medical (e.g. hospital equipment), transport (e.g. boat and car accessories), etc.

By leveraging on the Group's existing technologies and expertise in the polymer industry, Asia Poly Group intends to improve its existing products by applying hard coat to all the cast acrylic sheets produced by the Group. For information purposes, hard coating refers to the application of a very thin layer of coating (about 5 microns) to an underlying material (also known as a substrate) such as acrylics or polycarbonates in order to protect it from abrasion, scratching and chemical damage.

A hard coat film is capable of improving the surface hardness of cast acrylic sheets produced by Asia Poly Group and prevents the surface from being scratched. Hard coatings are made of sol-gels of silica and nanoparticles that are applied in a liquid form to the substrate and then hardened to a glass-like hard finish. This requires heating the coated materials at a certain temperature for a certain period of time in a dust free environment. This helps to prevent highly visible imperfections on the coated surface. The end result of the coating process is the full development of the desired properties on the cast acrylic sheets.

Given the above, Asia Poly Group will be able to produce acrylic sheets that are more resistant to abrasion and scratching, which is expected to improve its competitiveness and demand for the Group's products in the market.

Further, Asia Poly Group also intends to intensify promotional efforts both locally and overseas by participating in local and overseas trade fairs and advertising in design and architecture magazines to improve market awareness and enhance the market presence of Asia Poly Group's products.



Annual report 20196

PROPERTY DEVELOPMENT DIVISION

Asia Poly Business Park

High Reserve Land Sdn Bhd (“HRLSB”) being the property arm of the Group has launched its maiden project, Asia Poly Business Park at the 4th quarter of 2019.

HRLSB has decided to develop the land as it is free from encumbrances. The development shall provide long-term recurring income and potential capital appreciation to the Group. The diversification of the asset-based investment shall be able to strengthen the balance sheet of the Group in the long-term.

Earthwork and foundation works have begun which shall be followed by piling and building construction work on 2nd quarter of 2020.

Total construction period is expected to take 24 months from the date of commencement and the development is anticipated to be completed by end of 2021.

Overview of the Property Market

Malaysia’s property market remains flat and did not see much improvement in 2019 as it is continued to be affected by affordability issue, slower economic growth and high level of unsold stock.

Malaysia’s real gross domestic product (GDP) growth will decelerate to 4.3% in 2020 below the government forecast of 4.8% due to weaker external trade performance, softer domestic demand growth and political uncertainty.

Although trade diversion arising from trade tensions between the US and China could marginally benefit Malaysia in the short term, the overall weakening of the global trade growth will continue to weigh down on the Malaysian economy.

Overall, the property outlook is anticipated to remain sluggish in 2020 but location with good accessibility and high affordability will still attract potential tenant. As for commercial property, selected prime and strategic areas with high commercial value will still provide unlimited potential for capital appreciation.

Prospects

HRLSB shall look forward to the completion of Asia Poly Business Park which we believe will be well received by potential tenants.

We see demand for quality and innovative design such as Asia Poly Business Park to offer plenty of business opportunities and capital appreciation for the Company.


GasEngine

Flare

Sludge Holding Tank

BiogasBlower

BiogasDehumidifier

DecanterCentrifuge

EffluentCollection tank

ExitingPonds

POMEPolishing

Plant

POMEFinal Discharge

RawPOME

Whole Raw EFB

SlurryHigh Strength

EffluentDecanter

Cake DecanterCake Mixing

Tank

EFB ShreadPress &

Centrifuge

BiogasScrubber

Sludge OilSeparator

2 x MixingPond

NewAnaerobicDigesters



RENEWABLE ENERGY DIVISION

Overview

In view that the renewable energy sector in Malaysia has been steadily growing and given the Government's support in providing an economically viable platform for investments in the power and energy sector, the Group expects the renewable energy business to continue its robust, resilient and sustainable growth.

The Group has decided to concentrate on growing its renewable energy business segment in the immediate term whilst continue to focus on improving the profitability of its existing core business in the acrylic industry.

In order to generate sustainable and predictable income stream, the Group has diversified into power generation on the international front through Asia Poly Green Energy Sdn Bhd (“APGESB”).

During the year, the Group has continued to make a concerted effort to develop a sustainable and recurring income flow through its Green Energy. Here are some of the common types of green energy the Group has proposed to venture into.

Prospect

Looking forward, the Group is continuing to leverage on its financial strength and established track record in the green energy sector which is continuing to see a growing revenue stream. In green energy sector, Asia Poly continues to eye investment opportunities in regional concession assets to bolster recurring income.

BIOGAS POWER PLANT (POME)

The concept of Biogas

Biogas is the mixture of gases produced by the breakdown of organic matter in the absence of oxygen (anaerobically), primarily consisting of methane and carbon dioxide. Biogas can be produced from raw material such as plant material eg Fresh Fruit Bunch (FFB). Biogas is produced by anaerobic digestion with methanogen, which digest material inside a closed system whereby it is called anaerobic digester.

Biogas is primarily methane (CH4) and carbon dioxide (CO2) and may have small amounts of hydrogen sulfide (H2S), moisture and siloxanes. The gases methane, hydrogen and carbon monoxide (CO) can be combusted or oxidized with oxygen. This energy release allows biogas to be used in a gas engine to convert the energy into electricity and heat.

Palm oil mill effluent (POME) is a remarkably contaminating effluent generated from three principle processes such as the sterilization, condensation, and hydrocyclone of palm oil in mills. The high biological oxygen demand (BOD), chemical oxygen demand (COD) and acidic pH of POME create an environmental issue if it is discharged into the aquatic and terrestrial ecosystem without treatment. However, proper handling of POME is considered as a potential substrate for a renewable energy source. Biogas consisting mostly of methane and carbon dioxide can be produced using anaerobic digestion of POME. The process of biogas production involves the indigenous microbial organism through hydrolysis, acidogenesis, acetogenesis, and methanogenesis.


GasEngine

Flare

Sludge Holding Tank

BiogasBlower

BiogasDehumidifier

DecanterCentrifuge

EffluentCollection tank

ExitingPonds

POMEPolishing

Plant

POMEFinal Discharge

RawPOME

Whole Raw EFB

SlurryHigh Strength

EffluentDecanter

Cake DecanterCake Mixing

Tank

EFB ShreadPress &

Centrifuge

BiogasScrubber

Sludge OilSeparator

2 x MixingPond

NewAnaerobicDigesters


Annual report 20198


A biogas plant is decentralized energy system, which can lead to self-sufficiency in heat and power needs, and at the same time reduces environmental pollution. The key components of a modern biogas power plant includes plant material, anaerobic digester, effluent treatment, biogas storage and biogas use / electricity generating equipment.

In this case, the palm oil mills process Fresh Fruit Brunch (FFB) and produce two main products: Crude Palm Oil (CPO) and Palm Kernel Oil (PKO). The process generates abundant waste water called Palm Oil Mill Effluent (POME).

The POME is then converted into biogas through a gasification process. The biogas is used to fuel gas engine and generates electricity.

HYDROELECTRIC POWER PLANT, RUN OF THE RIVER

The concept of hydroelectric power

In the generation of hydroelectric power, water is collected or stored at a higher elevation and flows downward through large pipes or tunnels (penstocks) to a lower elevation; the difference in these two elevations is known as the head.

At the end of its passage down the pipes, the falling water causes turbines to rotate. The turbines in turn drive generators, which convert the turbines’ mechanical energy into electricity. Transformers are then used to convert the alternating voltage suitable for the generators to a higher voltage suitable for long-distance transmission. The structure that houses the turbines and generators, and into which the pipes or penstock feed, is called powerhouse.

The Run-of-the-River hydroelectric power does not involve the construction of the damn. Water is channeled into the penstock, by building a small weir, which will have minimal environmental impact.

Advantages of Hydro

Hydroelectric power has certain advantages over these other sources: it is continually renewable owing to the recurring nature of the hydrologic cycle and produces neither atmospheric nor thermal pollution. Hydroelectric power is a preferred energy source in areas with heavy rainfall and with hilly or mountainous regions that are in reasonably close proximity to the main load centers. Some large hydro sites that are remote from load centers may be sufficiently attractive to justify the long high-voltage transmission lines. Small local hydro sites may also be economical, particularly if they combine storage of water during light loads with electricity production during peaks.

Prospect

Looking forward, the Group is continuing to leverage on its financial strength and established track record in the green energy sector which is continuing to see a growing revenue stream. In green energy sector, Asia Poly continues to eye investment opportunities in regional concession assets to bolster recurring income.

Notwithstanding the Group's ongoing business development in the acrylic industry, the Group is of the view that the renewable energy business will enable the Group to diversify its earnings base, as well as provides a source of additional income stream to the Group. At this juncture, Asia Poly Group has embarked on the renewable energy business via its 51%-owned subsidiary, namely Asia Poly Bio Gas Sdn. Bhd. (“APBGSB”), which was incorporated in July 2019 and was granted a feed-in approval by SEDA in October 2019 to supply electricity to TNB for a tenure of 21 years. Nevertheless, APBGSB has not generated any revenue since APBGSB Biogas Plant has not been constructed yet as APBGSB is in the final stages of signing the supply and leasing agreement with the Kelantan State Economic Development Corporation (PKNIK) in relation to the leasing of the land for the construction of the ABBGSB Biogas Plant. The supply and leasing agreement is expected to be executed between APBGSB and the Kelantan State Economic Development (PKINK) by second quarter of 2020.

PT RIMBA TRIPA

Sale of power and electricity


100%

ASIA POLY INDUSTRIALSDN. BHD.

Manufacture and Sales of Cast AcrylicProducts

ASIA POLY RENEWABLE ENERGYSDN. BHD.

Investment, owner and operator of allkinds of renewable energy plants

ASIA POLY FOOD AND BEVERAGESDN. BHD.

Restaurants and Trading of all kinds ofFood Products

ASIA POLY WASTE MANAGEMENTSDN. BHD.

Manufacturers, Dealers and Operators ofrecycle plant for all kinds of Acrylic Products

100%

49%

100%

ASIA POLY DISTRIBUTIONSDN. BHD.

General Trading

100%

HIGH RESERVE LANDSDN. BHD.

Investment and Property Development

100%

ASIA POLY GREEN ENERGYSDN. BHD.

Investment holdings, Owner and Operatorof Hydro, Solar, Coal, Combined Cycle Gas and all kinds of Green Energy Power Plants

100%

49%

ASIA POLY HYDRO (PAHANG) SDN. BHD.(formerly known as Harta GlamorSdn. Bhd.)

Renewable energy andpower plant

50%

ASIA POLY BIO GAS SDN. BHD.

Sale of power and electricity

51%



CORPORATE STRUCTURE


Annual report 201910

FINANCIAL HIGHLIGHTS

(As at 31 December 2019)

73.1million

REVENUE


27.5million

MARKET CAPITALISATION


4.6million

LOSS BEFORE TAXATION


79.2million

TOTAL EQUITY

Period Apr-Dec FY Dec FY Dec FY Dec FY Dec 2015 2016 2017 2018 2019

OPERATING RESULT Revenue RM’000 56,760 58,153 83,245 73,018 73,112Profit before taxation RM’000 5,317 5,687 961 (3,008) (4,027)Profit after taxation RM’000 4,608 4,062 525 (3,058) (4,626)

FINANCIAL POSITION Total assets RM’000 66,409 78,265 106,540 108,662 104,514Share capital RM’000 26,374 30,319 54,918 64,245 64,245Shareholders’ fund RM’000 34,935 59,499 79,655 84,346 79,117

OPERATING RESULT Return on shareholder funds % 13.19 6.83 0.66 (3.63) (5.85)Earnings per share sen 4.85 1.45 0.20 (0.66) (1.02)Dividend per share sen 0.75 0.50 - 0.50 - Net assets per share RM 0.13 0.20 0.24 0.19 0.17

All figures are in Ringgit Malaysia



FIVE YEAR TREND

REVENUE(RM million)

10

20

30

40

50

60

70

80

90

0

NET ASSETS PER SHARE(RM)

0.05

0.10

0.15

0.20

0.25

0.30

0

SHAREHOLDERS’ FUND (RM million)

10

20

30

40

50

60

80

90

70

0

PROFIT BEFORE TAX(RM million)

1

2

3

4

5

6

0

-5

-4

-2

-3

-1

EARNINGS PER SHARE(sen)

1

2

-1

0

3

4

5

-2

56.8 83.258.2 73.0 34.9 79.759.5 84.3

0.13 0.240.20 0.19

4.85 0.201.45 (0.66)5.3 1.05.7 (3.0)

73.1

0.17

79.1

(4.0) (1.02)

Apr-Dec 2015Dec 2016

Dec 2018Dec 2017


Dec 2018Dec 2017

Apr-Dec 2015Dec 2016 Dec 2018

Dec 2017

Apr-Dec 2015Dec 2016 Dec 2018

Dec 2017


Dec 2018Dec 2017

Dec 2019

Dec 2019

Dec 2019

Dec 2019

Dec 2019



MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS OVERVIEW

The Malaysian economy has been growing steadily over the past twelve months. Internationally, the world economy remains fluid due to a series of economic announcements made by the United States of America (“USA”) and China, two of the world’s largest trading economies.

We continue to remain concern on the probable repercussions of more new American trade policies that could lead to a trade war between USA and its major trading partners in Europe and especially China, which will inadvertently also affect trades in this region. Together with the Board and senior management of the Group, we continue to take note and be mindful of the world’s economic landscape affecting Asia and Malaysia.

The Company is principally involved in the manufacturing and sale of cast acrylic sheet. Its products are catered to a wide cross section of industries in both local and overseas markets such as building applications, food industry/catering, domestic applications, transport and medical applications, among others.

Overall, the performance of the Group has been challenging due to the weak business conditions that prevail in the industry. The Group remains vigilant in cost management. The Group is maintaining its strategy of focusing its efforts on optimizing the operational structure to ensure sustainable and efficient operations to meet the increased competitive pressure faced by the industry.

With increasing competition, we have to be prudent in managing our costs and upkeep the quality of our products to enable us to maintain our position as one of the preferred and major cast acrylic players in the industry.

FINANCIAL PERFORMANCE

For the year under review, the Group turnover amounted to RM73.11 million. Loss before taxation amounted to RM4.03 million. In the corresponding financial year ended 31 December 2018 (“FYE 2018), the group’s turnover amounted to RM73.02 million with a loss before tax figure of RM3.01 million. The Group shows a slight increase in revenue of RM0.09 million or 0.12%. The fluctuation of the crude oil price especially lower the cost of our main raw materials, Methyl Methacrylate Monomer (“MMA”) which in a truly manner has been directly passed to customers was the main reason that the Group was unable to achieve a higher sales turnover for the year under review even though it has increased its production capacity. This is reflected in the output of production measured in metric tonnes (“MT”) where the total consumption increased from 4,699MT to 5,688MT. Export sales accounted to 70% while local sales recorded at 30% for FY 2019. The Group registered a loss before tax of RM4.03 million against RM3.01 million for FY2018 due to huge fluctuation in foreign currency exchange rate and raw material cost, shortage of experienced technical personnel, rising operating cost may have material impact on sales and profitability margin. Hence, close monitoring of currency fluctuation and production operations, diversification in sourcing of raw materials and better cost control as well as rebalancing customer base are the on-going measures that have been implemented to mitigate the impact. Overall the Group record a loss after tax of RM4.63 million in FY2019 as compared to RM3.06 million LAT for FY2018.

KEY FINANCIAL INDICATORS

Loss per share was lower at 1.02 sen in FY2019 as compared to 0.66 sen for FY2018.

Loss on equity was also lower at 5.85% in FY2019 as compared to 3.63% for FY2018.

Net asset per share was also lower at RM0.17 in FY2019 as compared to RM0.19 FY2018.

Gearing Ratio (net debt /shareholders equity) was higher at 0.10 in FY2019 as compared to 0.07 for FY2018.

As for past performance, kindly refer to the "Five Years Financial Highlights" and Financial indicators' contained in this annual report for financial information and indicators for the past five years from 2015 to 2019.

ASSETS

Non-current assets increased by RM5.89 million or 11.34% due mainly to the installation of the renewable energy solar rooftop panels at the subsidiary factory which cost RM1.68 Million.

Inventories decreased by RM5.35 million or 48.9% was mainly due to the increase in average inventory turnover for the year.



ASSETS (Cont’d)

Trade receivables increased by RM0.43 million or 3.11% because of higher sales during end of the year resulting in an increased amount owing and not due for payment from customers.

Non-trade receivables, deposits and prepayment decreased by RM3.52 million or 83.17% was primarily due to development expenditure now capitalized.

LIABILITIES

Trade payables decreased by RM1.85 million or 14.05% due to lower purchases of raw materials at year end.

CAPITAL STRUCTURE AND FINANCIAL RESOURCES

The Group has been financing its operations during the year through internally generated funds. The Group’s liquidity has been very good and it has no long-term bank borrowings. As at 31 December 2019, cash and bank balances and short-term deposits were amounted to RM25.2 million. The Group is comfortable with its current capital structure to operate its business.

CAPITAL EXPENDITURE

The Group has purchase PPE for approximately RM2.141 Million in FY2019 for manufacturing use as well as installed renewable energy solar rooftop panels at the subsidiary factory which cost RM1.68 Million to generate electricity and economic savings to the Group. It will be financed through internally generated funds.

PROSPECTS

The global economy is expected to continue its modest growth trajectory with the lead coming from the 2 major economies mainly China and the USA. The outlook for Malaysia continues to be affected by developments in the global and domestic fronts. The persistent weak Ringgit Malaysia which continues to impact business confidence and consumer sentiment will inherently put a damper on the outlook of the Company for the financial year ending 31 December 2020 (“FYE 2020”).

The year 2020 will continue with challenges due to global and domestic economic uncertainties. For long term competiveness, the Group is continuously improving product quality with a committed technical and R & D team in pursuit of product excellence and process automation. In addition, our marketing personnel are also continuously exploring new markets and avenues for growth. Fluctuations in crude oil prices which would in turn affect our input raw material prices, escalating labour costs, uncertainties in global economy, volatility in exchange rates such as US Dollars and Euro, and market sentiments are the key concerns of the Group for the current year which may have a material impact on sales revenue and profitability. Notwithstanding the lackluster market in general the Group is focused on improving production efficiency productivity and processes to ensure that costs are kept in check. All in all, notwithstanding the weak consumer market environment, we anticipate the performance of the Group to remain challenging. However, the Group will continue to exercise prudent management and close monitoring of the key risks to mitigate the impact on the company performance.

ANTICIPATED OR KNOWN RISKS

Risk identification, assessment and management is an integral part of the Group. Other than the risk associated with the uncertain global economy, some of the risks that could have a material impact on the Group include raw material supply and raw material price fluctuation risk and financial risk. The cost of resin is the main raw material cost for our manufacturing industry and resin price is subject to the fluctuation of the crude oil price and market demand and supply. The Group continuously monitor such development on a constant basis to ensure that the selling price of our related products are linked to the prevailing resin prices. An adequate and steady supply of resin is also important to ensure smooth and efficient production process. The Group has established relationships with its existing suppliers and works very closely with them to ensure a steady supply of raw materials. At the same time, we continue to explore new suppliers to expand our supplier base to meet our growth. Financial risks include foreign exchange currency risk, interest rate risk, and the availability of funds to meet its business needs. The Group’s functional and reporting currency is Ringgit Malaysia. In FY 2019, about 70% of our manufacturing sales was denominated in foreign currencies, in particularly United States Dollar (“USD”). The Group has also obtained certain funding of its working capital with borrowings denominated in foreign currency mainly in USD to balance up its position. In addition, the Group manages its bank balances by having a combination of Ringgit and USD account to better manage its interest rate risk.

MANAGEMENT DISCUSSION AND ANALYSIS (Cont’d)



DIVIDEND

The board of directors has not recommended any dividend to be paid during the financial year under review.

ACQUISITION OF QUOTED SHARES

The Company has acquired 26,862,000 ordinary shares of Dolphin International Berhad (“DIB”) on 3 January 2020 at the purchase consideration of RM5,920,263.33 via off market which represents 11% of the total number of issues and paid up capital of DIB.

INVESTMENT IN SUBSIDIARIES

(a) On 15 February 2019, the Company further subscribed for 499,998 ordinary shares of RM1 each issued by its wholly-owned subsidiary, AP Waste Management Sdn. Bhd. for a cash consideration of RM499,998.

(b) On 27 February 2019, its wholly-owned subsidiary, High Reserve Land Sdn. Bhd. (“HRLSB”) has incorporated a new company, Harta Glamor Sdn. Bhd. (“HGSB”) with total issued and paid-up capital of two ordinary shares. HRLSB subscribed for 50% equity interest in HGSB. The intended principal activities of HGSB are property investment, property development and construction. On 12 December 2019, HGSB has changed its name as Asia Poly Hydro (Pahang) Sdn. Bhd. It also changed its principal activities to investment, owner and operator of renewable energy plants.

(c) On 26 March 2019, the Company further subscribed for 999,998 ordinary shares of RM1 each issued by its wholly-owned subsidiary, Asia Poly Green Energy Sdn. Bhd. for a cash consideration of RM999,998.

(d) On 10 July 2019, its wholly-owned subsidiary, APGESB has incorporated a new company, Asia Poly Bio Gas Sdn. Bhd. (“APBGSB”) with total issued and paid-up capital of 50,000 ordinary shares of RM1 each. APGESB subscribed for 51% equity interest in APBGSB. Subsequently, APBGSB has increased its issued and paid up share capital from RM50,000 to RM250,000 by way of issuance of 200,000 new ordinary shares at an issue price of RM1 each for a cash consideration of RM200,000 APGESB has further subscribed for 102,500 ordinary shares for a cash consideration of RM102,500.The intended principal activities of APBGSB are investment in renewable energy businesses and related activities.

DISPOSAL OF SUBSIDIARIES

(a) PT Rimba Tripa (“PT Rimba”) During the financial year, PT Rimba Tripa, a subsidiary, had issued additional 362,500 and 387,500 ordinary shares and was subscribed by the Group’s wholly-owned subsidiary, Asia Poly Green Energy Sdn. Bhd. (“APGESB”) and external parties respectively. APGESB lost its control in PT Rimba Tripa and resulted in PT Rimba Tripa ceasing to be a subsidiary and becoming a 49% owned associate of the Group.

(b) Asia Poly Food and Beverage Sdn. Bhd. (“APFBSB”)During the financial year, the Company’s equity interest in APFBSB decreased from 100% to 49% arising from participating in a joint venture. Consequently, the Company loss of control of APFBSB and reclassified its investment in Asia Poly Food and Beverage Sdn. Bhd. to investment in a joint venture.

On 2 July 2019, Asia Poly Food and Beverages Sdn. Bhd. (“APFBSB”), a subsidiary, had issued additional 979,998 and 1,020,000 ordinary shares and was subscribed by the Company and external party respectively. The Group lost its control in APFBSB and resulted in APFBSB ceasing to be a subsidiary and becoming a 49% owned joint venture of the Group by virtue of a shareholders’ agreement with the external party. Subsequently, on 12 December 2019, APFBSB had issued another additional 882,000 and 918,000 ordinary shares and was further subscribed by the Company and external party respectively

CORPORATE DEVELOPMENT

Share Capital

For the financial year ended 31 December 2019, the issued and paid up capital of the Company has increased to 457,718,750 shares by way of exercise of irredeemable convertible preference shares (“ICPS”).

Trade receivables increased by RM0.43 million or 3.11% because of higher sales during end of the year resulting in an increased amount owing and not due for payment from customers.




CORPORATE DEVELOPMENT (Cont’d)

Corporate Exercise

(a) On 31 January 2020, one of the wholly owned subsidiaries, APGE has entered into a conditional share sale agreement (“SSA”) with Dolphin International Berhad (“DIB” or “Vendor”) for the proposed acquisition of 4,500,000 ordinary shares in Dolphin Biogas Sdn. Bhd. (“DBSB”), representing 80% equity interest in DBSB for a purchase consideration of RM2,123,675 (“Purchase Consideration”) and the assumption of liabilities comprising RM341,271 owing by DBSB to Dolphin Applications Sdn Bhd ("DASB"), a wholly-owned subsidiary of DIB, as well as any advances by DIB to DBSB and its subsidiary from the date of SSA. The proposed diversification of the principal activities of the Company and its subsidiaries to include renewable energy business and related activities. Subsequently, on 26 March 2020, the Purchase Consideration was revised and shall be satisfied entirely via cash in the following manner:-

(i) APGESB shall pay to DIB the sum of RM212,367 upon execution of the SSA, which is deemed to be part payment of the Purchase Consideration of the DBSB shares;

(ii) APGESB shall pay to DIB the balance of the deposit amounting to RM1,249,200, which is deemed to be part payment of the Purchase Consideration of the DBSB shares in the following order:-

Time period • Upon the execution of the SSA RM416,400 • Upon the expiry of two months from the date of the SSA RM416,400 • Upon the expiry of four months from the date of the SSA RM416,400

(iii) APGESB shall pay the balance purchase consideration of RM662,108 to DIB on Completion Date where DIB shall sell and APGESB shall purchase the Sale Shares free from all claims, charges, liens, encumbrances and equities whatsoever together with all rights attached thereto and all dividends, rights and distributions declared paid or made.

(b) Proposed diversification of the principal activities of the Company and its subsidiaries (“Asia Poly Group”) to include renewable energy business and related activities.

The proposed diversification will enable Asia Poly Group to diversify into a new viable business which will provide an additional revenue stream and cash flow, which may in turn improve the financial results of Asia Poly Group.

The Board of Asia Poly are of the view that the proposed diversification is expected to have stable and strong growth prospects and will diversify Asia Poly Group's revenue and contribute positively to Asia Poly Group's future earnings. Consequently, the Proposed Diversification will reduce the dependency on the existing businesses.

(c) On 27 February 2020, the Company entered into a conditional sale of shares agreement with Uncle Don's Holdings Sdn Bhd (formerly known as Frontier Touch Holdings Sdn. Bhd.) and Dolphin International Berhad ("DIB" or "Purchaser") for the disposal by the Company of its entire 49% equity interest in Asia Poly Food and Beverage Sdn Bhd, a joint venture, to the Purchaser for a total disposal consideration of RM10.78 million to be satisfied via RM5.88 million in cash and issuance of 64,473,684 new ordinary shares in DIB at an issue price of RM 0.076 per DIB share.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 15 January 2019, one of the wholly owned subsidiaries, Asia Poly Green Energy Sdn. Bhd. (“APGESB”) has entered into a Teaming Agreement with Musteq Engineering Sdn. Bhd. for the purposes of exploring, securing, developing and executing renewable energy development projects jointly and/or jointly with third party as partner.

(b) On 5 April 2019, its wholly-owned subsidiary, Asia Poly Industrial Sdn. Bhd. has appointed D’nonce (M) Sdn. Bhd. as distributor of A-Cast brand of Cell-Cast Acrylic Sheets in South East Asia Market (“the Contract”) to distribute 18 million acrylic sheets for a period of 12 months. The Contract is expected to commence immediately and subject to renewal.

(c) On 2 July 2019, the Company entered into a Shareholders’ Agreement with Uncle Don’s Holdings Sdn. Bhd. (“UDHSB”) whereby the Company and UDHSB participated in a joint venture for the purpose of working together in the food and beverage industry more particularly in establishing new Uncle Don’s outlets.

(d) On 7 October 2019, one of the subsidiaries, APBGSB has been granted and received Feed- in Approval by Sustainable Energy Development Authority Malaysia for the Bio Gas Project in Tapis, Kelantan.




SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (Cont’d)

(e) On 12 December 2019, APBGSB has entered into the Renewable Energy Power Purchase Agreement with Tenaga Nasional Berhad (“TNB”). The Agreement governs the obligations of APBGSB to sell and TNB to purchase and accept the renewable energy. (f) On 27 December 2019, the Board of Directors of Asia Poly announce that the existing SIS will be terminated. All outstanding SIS options remain unexercised as at that date. The outstanding options are no longer attractive as the SIS options have been out of the money and there is no intention to grant any further SIS options as the SIS is expiring in 15 months , ie. 17 March 2021.

IMPLICATIONS OF COVID-19

The recent outbreak of COVID-19 has negatively impacted economic conditions globally. Asia Poly Group is an export oriented company whereby its manufactured acrylic sheet products are exported overseas to various countries covering 4 regions such as Asia, Australia, Europe and South America and others (including India and Middle East). In addition, Asia Poly Group also relies on imported raw materials, particularly the methyl methacrylate monomer (MMA), to be used in the manufacturing of cast acrylic sheets.

In the event that the COVID-19 outbreak continues and results in a prolonged period of commercial and other similar restrictions such as the MCO imposed since 18 March 2020 to contain the COVID-19 outbreak in Malaysia, Asia Poly Group could experience disruptions in its business operations as well as the supply chain. If such supply disruptions were to prolong, Asia Poly Group may not be able to source for alternate supply expeditiously. Any unexpected shortage of raw materials could disrupt Asia Poly Group's production schedules, resulting in a loss of revenues and could materially affect Asia Poly Group's business, cash flows, financial condition and results of operations.

The outbreak of COVID-19 is an event of force majeure that is beyond the control of Asia Poly Group. The Government had on, 27 March 2020, announced a Second Economic Stimulus Package 2020 (ESP2) themed Prihatin Rakyat valued at RM250 billion as part of its effort to spur the economy of Malaysia amidst the outbreak of COVID-19. Nevertheless, the success of the aforesaid economic stimulus measures or any future measures which may be introduced by the Government cannot be ascertain at this juncture, and the long term impact of COVID-19 on Asia Poly Group's business operations and financial performance remains uncertain at this juncture as the outbreak continues to progress and the conditions are unpredictable.

Notwithstanding the above, the Board will continue to monitor the status and progress of COVID-19 and shall endeavour, to the extent possible, to review the performance and progress of Asia Poly Group's operations and financial performance as well as introduce measures to minimise its operating costs where required.

FORWARD LOOKING

Overall, the Group, with the various action plans and strategies that have been put in place in the past years to address the respective challenges faced for financial year 2019, the Group looks forward to this coming financial year with renewed vigour against the backdrop of a global economy taking hold on firmer ground. The group look forward to ramp up its production and to grow its sales volume with a more aggressive marketing stance with better market sentiments and demand on the recovery path. For this coming financial year, the Group remains optimistic as it endeavours to enter new markets, expanding existing ones for its product.

Moving forward, Asia Poly Group intends to focus its efforts on the biogas sector within the renewable energy business segment, by growing the aforesaid sector, either organically or inorganically. In respect of organic growth strategy, Asia Poly Group may undertake collaborative effort with other oil palm players to set up new biogas plants. Alternatively, Asia Poly Group may explore inorganic growth strategies via acquisitions of other biogas plants or through joint ventures, mergers and/ or acquisitions of other companies involved in the biogas business. Notwithstanding the above, Asia Poly Group will undertake feasibility studies to provide risk-reward assessment on the viability of such organic/ inorganic growth strategies prior to implementing such strategies.

Whilst developing the biogas sector, the management of Asia Poly Group will also explore other viable types of renewable energy business to venture into, which include amongst others, solar power and hydro power. Nevertheless, Asia Poly Group will only venture into the aforesaid types of renewable energy business aside from the biogas sector after taking into consideration the availability of resources and internal capacity to undertake such ventures.




Moving forward, our business strategy will also focus on adapting to the new way of doing business taking into consideration the rapid transformation in the power generation industry whilst we will continue in our efforts to achieve operational excellence for our plants, the Group will aggressively pursue opportunities in high growth areas in both conventional and RE power generation as well as waste management and environment related services to achieve sustainable growth for Asia Poly Group.

The Group will work diligently to increase productivity by prioritising the efficiency in our operations and aggressively seeking new businesses in various lucrative industries. Consistent growth in revenues and earnings in the future will be the board’s priorities. The board will continue to strive to create and enhance value for its stakeholders with new business strategies.

ACKNOWLEDGEMENT

We would like to express our appreciation to the Board and management team during this hard time for their contribution, support and commitment, dedication and loyalty to the Group. The Group also takes this opportunity to thank its employees who have shown great tenacity and commitment with us, and we are confident that Asia Poly will improve its performance with your unwavering support. We look forward to contribute to the Group’s growth and further success in the coming years.

We would also like to extend our sincerest appreciation and gratitude to all our shareholders, valued customers, vendors, financiers and the relevant authorities for their continued support and confidence in Asia Poly, enabling us to advance with our strategic plans. Together, we will strive for Asia Poly to achieve stronger financial years ahead.


A-CAST



Asia Poly’s brand of “A-CAST” cast acrylic sheet is manufactured from 100% Virgin Methyl Methacrylate monomer (MMA) sourced exclusively from reputable and reliable suppliers. As the premier manufacturer of cast acrylic sheet in Malaysia, Asia Poly utilises the cell-cast production process, maximising the mechanical properties and chemical resistance of the “A-CAST” sheet for use in a wide range of applications.

With a state-of-the-art manufacturing facility, “A-CAST” is produced in small batch quantities which in turn offers the flexibility to produce an extensive range of colours, finishes and effects with colour matching service also available.

“A-CAST” is a cast acrylic sheet that has become synonymous with clarity, colours and choice. The versatility of the material and wide range of colours, surfaces and finishes enable designers to quickly realise their creative ideas. The MMA is an organic compound that is processed through a series of mixing stations to blend the required additives and pigments which are then cast between two sheets of high quality flat glass. The batch is then polymerised in specially developed waterbaths and ovens, allowing the sheets to harden and cure. The cell cast process has benefited over the years from the application of engineering technology to increase process control and repeatability from one production batch to the next and Asia Poly have taken full advantage of these developments to produce a quality cast acrylic sheet, second to none.

While this batch process delivers significant flexibility in the product mix with a wide range of colours, finishes and thicknesses, other benefits of “A-CAST” cell cast acrylic arise from its molecular structure and inherent physical properties which include:

• Clear sheet with a light transmission and optical clarity higher than that of glass at 93%.• High gloss surface finish as standard with single-sided and dual-sided matt options.• Half the weight of glass with five times the strength so less liable to breakage.• Excellent resistance to weathering means the material is suitable for indoor and outdoor applications.• Excellent surface hardness for abrasion resistance.• Good chemical resistance so durable and easily cleaned.• Thermoplastic so can be recycled into other products and itself.

These physical properties of the product, including the ability to be readily fabricated, formed and cemented, lend it to many different applications including both functional and aesthetic uses. As a leading manufacturer and innovator in the production and supply of cast acrylic sheets, Asia Poly prides itself on its international service and delivery capability, supporting many distributors worldwide with a wide portfolio of quality products.

OUR PRODUCTS



OUR PRODUCTS (Cont’d)

TRANSPORT

Boat cabin windowsBoat windscreensCar accessories/visorsCaravan windowsCoach observation panelsCoach seat corner protectorsMotorcycle windshieldsSliding window panels

MEDICAL APPLICATIONS

Hospital trays and equipmentIncubatorsilluminated eye testing charts

MISCELLANEOUS APPLICATIONS

Bus shelter glazingDisplay cabinetsFire hydrant platesGeneral engravingGreenhousesMuseum protective covers anddisplay unitsSlim box displays

BUILDING APPLICATIONS

GlazingExterior wall liningInterior decorative partitionsInterior wall panelsShower screensShower bath cabinetsBathsVanity unitsStair and elevator panelssignages

FOOD INDUSTRY/CATERING

Bar fittingsCinema ice-cream andvending trays (illuminated)Display counter coversFood coversFood conveyor belt coversFood packaging machine windowsKitchen and restaurant partitionsSelf-service food compartment flapsShelf paneling

DOMESTIC APPLICATIONS

AquariaBathroom cabinetsCoffee tablesFurnitureLighting fittingsMahjong setsPartitionsPhotograph frames

A-CAST



BOARD OF DIRECTORS PROFILE

DATO’ YEO BOON LEONG54 years of age, Male, Malaysian Executive Chairman

Dato’ Yeo Boon Leong, appointed on 30 April 2015 as Non-Executive Chairman but was re-designated as an Executive Chairman on 20 May 2015. He is also a member of the Remuneration Committee.

Dato’ Yeo graduated from Victoria University of Wellington, New Zealand with a Bachelor of Commerce Degree.

Dato’ Yeo is presently the Managing Director of High Reserve Marketing Sdn Bhd which deals in household DIY hardware. He is also the Managing Director of Dian Be Hardware Co. Sdn Bhd which retail DIY hardware outlets, Managing Director of Gere Industries (M) Sdn Bhd dealing in assembly and packaging of all kinds of locks. His previous appointment included General Manager of Denko Industrial Corporation Berhad.

Currently, Dato’ Yeo is the Non-Executive Chairman of Ta Win Holdings Berhad., a public listed company.

LIM TECK SENG50 years of age, Male, MalaysianNon-Independent Non-Executive Director Lim Teck Seng, appointed on 30 April 2015. He is also a member of the Audit Committee, a member of the Nomination Committee and the Chairman of Remuneration Committee.

Mr. Lim graduated from University of Nebraska in Lincoln, the United States of America with a Degree in Bachelor of Science of Business Administration (major in Finance).

Mr. Lim was formerly Chairman of JF Apex Securities Berhad and Group Executive Director of Apex Equity Holdings Berhad before he left the group in March 2018. He was with Apex Group of companies for 9 years. Before he joined Apex Group, he worked with MIDF Group of Companies in various departments for 11 years.

He is presently a Non-Executive Director of Lay Hong Berhad, a public listed company and also sits on the board of European Credit Investment Bank Ltd.

THOO SOON HUAT58 years of age, Male, MalaysianNon-Independent Non-Executive Director

Thoo Soon Huat, appointed on 20 May 2015 as an Independent Non-Executive Director and redesignated to Non-Independent Non-Executive Director on 10 January 2020.

Mr. Thoo holds a Bachelor Degree of Science from Universiti Pertanian Malaysia, Malaysia.

Mr, Thoo has over 20 years of experience in sales and marketing, designing, implementation and maintenance of data center for ICT companies, financial sectors and government institutions. Over the past 18 years, he and his team of engineers and designers have designed and built more than 200 custom infrastructure technology facilities. Currently, he holds directorship in several private limited companies in Malaysia.

He is currently an Executive Director of Dolphin International Berhad, a public listed company.

TAN BAN TATT43 years of age, Male, MalaysianIndependent Non-Executive Director

Tan Ban Tatt, appointed on 01 June 2016. He is the Chairman of the Audit Committee and the Chairman of the Nomination committee. Mr. Tan holds a bachelor of accountancy degree from University Putra Malaysia, Malaysia. He is a member of Malaysian Institute of Accountants (MIA) and a fellow member of the Association of Chartered Certified Accountants (ACCA).

Mr. Tan began his career in one of the big four accounting firm in year 2001 to 2004. Thereafter he enhanced his working experience in finance and business as Group Finance Manager in a public listed company in Malaysia. He joined a mid-size audit firm in 2006 and promoted to partner since year 2014 until his departure in May 2016. He was appointed as a chief Financial Officer in a listed company in year 2016. Currently, he is a Practitioner of a Chartered Accounting firm. He is presently an Independent Non-Executive Director of Dolphin International Berhad, a public listed company.



BOARD OF DIRECTORS PROFILE (Cont’d)

DATIN AZREEN BINTI ABU NOH 51 years of age, Female, MalaysianIndependent Non-Executive Director

Datin Azreen Binti Abu Noh, appointed on 10 January 2020. She is a member of the Audit Committee, Nomination committee and Remuneration committee.

She holds a LLB (HONS) University Kebangsaan Malaysia She was admitted as an Advocate and Solicitor of the High Court of Malaya in 1996. In addition, she is a senior professional lawyer specialised in construction, corporate litigation, arbitration and commercial matters. Since 2003, she is the Managing Partner of Messrs Firuz Jaffril, Aidil & Zarina where she builds her reputation on managing legal aspects of TNB, KLIA and other governments’ construction related joint venture projects. Besides her solid legal

background, Datin Azreen is also a Managing Director for various private companies where she accumulated vast entrepreneurial experience such as organising annual food feast, mountain biking and children with learning disability charity event for her Black Forest Golf Club in 2015, business setup and franchise expansion of Deluxe Merchant Sdn Bhds branded F&B cafe business in 2016 which involved Petronas Dagangan Berhad as its new franchise partner. She was awarded by Niaga Times the Personaliti Industri Usahawan Malaysia in 2017 for her immense contribution to expand the F&B cafe franchise business.

She is also an Independant Non-Executive Director of Amway (Malaysia) Holdings Berhad and Independant Non-Executive Director of Ta Win Holdings Berhad, both public listed companies.

Notes:-

* None of the Directors has any family relationship with any Director and/or major shareholder of the Company nor conflict of interest involving the Company.

* None of the Directors has any conviction for offences, public sanction or penalty imposed by the relevent regulatory bodies within the past five (5) years, other than traffic offences.

* The details of the interest of Directors are set out on pages 48, 138 and 140 of this Annual Report



SENIOR KEY MANAGEMENT PROFILE

TAY SWEE KENG 54 years of age, Male, MalaysianExecutive Director

Mr Tay Swee Keng joined Asia Poly Industrial Sdn Bhd on 02 May 2017 as an Executive Director.

He holds a Diploma in Mechanical Engineering from Tunku Abdul Rahman College

Mr Tay has wide experience in heavy- lift transportation and installation for power generation , communications, oil & gas equipments and machineries. He is also experienced in ships chartering and shipping agency, warehousing & logistics services.

KUA CHYE HENG 57 years of age, Male, MalaysianSales and Marketing Director

Mr. Kua Chye Heng holds a bachelor’s degree of social science from University Kebangsaan Malaysia (UKM), Bangi.

Mr. Kua has 28 years of experience in marketing of financial products and services, construction machineries trading and rental services, real estate, and trading of industrial products. He joined Asia Poly Industrial Sdn Bhd in May 2006 as the Sales and Marketing Director. He is responsible for the commercialisation of the products as while as focusing on the sales and marketing strategy and planning.

GAN ENG TIEN51 years of age, Male, MalaysianGeneral Manager

Mr. Gan Eng Tien graduated from the University of Norwich, with a Bachelor of Arts (majoring in Economics) and Masters of Science in International Finance from the University of Surrey, United Kingdom.

He started his career in property development with Bandar Subang Sdn Bhd (a subsidiary of Farlim Group Berhad). Subsequently, he joined Brunsfield Group of Companies where his last position held was Assistant General Manager in charge of the Sales and Marketing Division.

Thereafter, he joined High Reserve Group of Companies as Project Director where he continues to be in charge of its proposed developments in Puchong and Cyberjaya. He is responsible for the planning and implementation of property development projects. His role includes, among others, identification of land banks, product development as well as sales and marketing.

He then joined Asia Poly Group as General Manager in 2018 overlooking the property development projects of the Group.

He has accumulated over 20 years of experience in the property development industry.

CH’NG SIEW LEI 50 years of age, Female, MalaysianSenior Finance Manager

Ms Ch’ng Siew Lei holds a professional degree from Chartered Institute of Management Accountants (CIMA), UK. She is a member of Malaysia Institute Accountants (MIA) and a fellow member of Chartered Management Accountants.

Ms Ch’ng began her career in 1992 as an Assistant Accountant in a subsidiary of a public listed company and subsequently joined a trading firm as an Accountant until her departure in 1998. She then joined Asia Poly Industrial Sdn Bhd as a Finance Manager. She is currently a Senior Finance Manager overseeing the accounting, finance and treasury matters of the Group.

LOH POH MING 44 years of age, Female, MalaysianSenior Technical Support Manager

Ms Loh Poh Ming graduated from Universiti Putra Malaysia with a B.Eng (Chemical) in 1998.

Ms Loh joined Asia Poly Industrial Sdn Bhd as a QC Executive in 1999. She was promoted to R & D Manager responsible for R & D and QC functions in 2005 and subsequently promoted to Senior Technical Support Manager in product formulations in PMMA production.



Notes:-

* None of the senior key management has any family relationship with any Director and/or major shareholder of the Company nor conflict of interest involving the Company.

* None of the senior key management has any conviction for offences, public sanction or penalty imposed by the relevant regulatory bodies within the past five (5) years, other than traffic offences.

SENIOR KEY MANAGEMENT PROFILE (Cont’d)

FUNG BEE FOONG 53 years of age, Female, MalaysianHuman Resource Manager

Ms Fung Bee Foong holds a Private Secretary certificate from Bintang College, Klang.

Ms Fung began her career in 1992 as a Secretary of Chairman and General Manager in Asia Poly Industrial Sdn Bhd. She has accumulated experiences in Sales and Marketing, Purchasing and Human Resource before being promoted to Human Resource Manager in 2006.

LIM BOON SHEN 32 years of age, Male, MalaysianAccount Manager

Mr Lim Boon Shen graduated from Tunku Abdul Rahman College with a Diploma in Business Accounting in year 2008.

Mr Lim began his career in 2008 in a mid-size audit firm in Klang and has over 6 years in auditing experiences. Thereafter, he joined a public listed company as Assistant Account Manager in Malaysia and China for accounting and internal control on account related matters. He then joined Asia Poly Industrial Sdn Bhd in April 2019 as an Account Manager overseeing the accounting and finance of the Company.



AUDIT COMMITTEE REPORT

COMPOSITION AND DESIGNATION OF AUDIT COMMITTEE

The current membership of the Audit Committee is made up of the following Directors:

Tan Ban Tatt (Chairman of the Committee, Independent Non-Executive Director)Lim Teck Seng (Non-Independent Non-Executive Director)Datin Azreen Binti Abu Noh* (Independent Non-Executive Director)

* Appointed as member of Audit Committee on 10 January 2020 in place of Mr. Thoo Soon Huat, who resigned as member of Audit Committee on 10 January 2020

The composition of the Audit Committee meets the requirement of Rules 15.09 (1)(a) and (b) and 15.10 of ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“AMLR”).

Mr. Tan Ban Tatt is a member of Malaysian Institute of Accounts (MIA) and a fellow member of the Association of Chartered Certified Accountants (ACCA) and fulfils the requirement of Rule 15.09 (1)(c)(i) of the AMLR.

The Terms of Reference of the Audit Committee is available for reference on the Group’s website at www.asiapoly.com.my.

The Board has entrusted the Nomination Committee to review the terms of office of the Audit Committee members and the performance of the Audit Committee and its members through an annual evaluation. The Board is satisfied that the Audit Committee and its members discharged their functions, duties and responsibilities in accordance with the Terms of Reference of the Audit Committee, supporting the Board in ensuring the Group upholds appropriate Corporate Governance standards.

During the financial year ended 31 December 2019, the Chairman of the Audit Committee had engaged on a continuous basis with the management, Internal Auditors and the External Auditors, in order to keep abreast of matters and issues affecting the Company.

The Company Secretary acts as the secretary to the Audit Committee. Minutes of each meeting are distributed to each Board member, and the Chairman of the Audit Committee reports on key issues discussed at each meeting to the Board.

SUMMARY OF ATTENDANCE OF AUDIT COMMITTEE MEETINGS

During the financial year ended 31 December 2019, the Audit Committee met seven (7) times and the attendance of the Members were as follows:

Name of Members Total meetings attended Percentage of attendance (%)

Tan Ban Tatt 7/7 100Thoo Soon Huat* 7/7 100Lim Teck Seng 7/7 100

* Resigned as member of Audit Committee on 10 January 2020

SUMMARY OF WORKS

The Audit Committee carried out the following activities during the financial year ended 31 December 2019 in discharging its duties and responsibilities as stipulated in its Terms of Reference:-

Financial Reporting

(a) Reviewed the unaudited quarterly reports on consolidated results and financial statements’ result to ensure that the financial reporting and disclosure requirements of relevant authorities had been complied with, focusing particularly on:-

- the going concern assumption;- compliance with accounting standards and regulatory requirements;- any changes in accounting policies and practices; - significant issues and unusual event; and - significant adjustment arising from the audit; if any



SUMMARY OF WORKS (Cont’d)

Financial Reporting (Cont’d)

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with the management and External Auditors on the salient accounting and audit issues, significant risks and audit focus areas, any deficiency on internal control, reasonableness of significant judgements, amendments to the reporting standards and other legal requirements; and

(b) Reviewed the quarterly management report. The management was invited to the meetings to brief the Audit Committee on management report. The Audit Committee sought explanations and additional information from the respective management staff on the reason for the variances/fluctuations in the financial performance as compared to the financial forecast. They also highlighted the areas that require attention of management and improvement.

External Audit

(a) Reviewed, evaluated and approved the Messrs. Crowe Malaysia PLT’s Audit Plan for the financial year ending 31 December 2019. The audit approach, areas of audit emphasis, significant event during the financial year, reporting and deliverables, engagement team, auditors’ responsibilities, accounting standards updates and other updates amongst others were discussed and brought to the attention of Audit Committee;

(b) Reviewed the Messrs. Crowe Malaysia PLT’s Audit Review Memorandums for financial year ended 31 December 2018 entailing amongst others, significant audit findings, summary of unadjusted differences, key audit matters, communication with Audit Committee and status update of the significant audit findings and issues arising from the audit;

(c) Reviewed with the External Auditors the approved accounting standards applicable to the financial statements of the Group;

(d) Reviewed the annual audited financial statements of the Company and the Group prior to the submission to the Board for approval;

(e) Reviewed and discussed the audit and accounting matters highlighted by the External Auditors and recommendations made by them and the management’s responses;

(f) Reviewed and assessed the independence of the External Auditors;

(g) Assessed the fee chargeable by the auditors to ensure that the policies governing the provisions of non-audit fees are observed;

(h) Assessed and evaluated the performance of the External Auditors, Messrs. Crowe Malaysia PLT and upon evaluation, recommended the re-appointment of Messrs. Crowe Malaysia PLT to the Board for obtaining shareholders’ approval in the annual general meeting; and

(i) Conducted independent meetings (without the presence of Management) with the external auditors.

Internal Audit

(a) Reviewed and approved the Internal Audit Plan to ensure that the scope and coverage of the internal audit on the Group’s operations is adequate and that all the risk areas are audited by Internal Auditors;

(b) Reviewed and deliberated internal audit reports containing approaches of internal audit reviews, findings, the recommendation action plans and the management’s response and the status of implementation of the action plans; and

(c) Reviewed the effectiveness of internal audit processes as well as the adequacy of the scope, functions, competency and resources of the internal audit function and whether it has the necessary authority to carry out its works.

AUDIT COMMITTEE REPORT (Cont’d)



SUMMARY OF WORKS (Cont’d)

Other activities

(a) Reviewed the Group’s investment proposals;

(b) Reviewed the Statement on Risk Management and Internal Control for inclusion in the Annual Report;

(c) Reviewed the Audit Committee Report for inclusion in the Annual Report: and

(d) Verified the allocation and movement of Share Issuance Scheme of last financial year to ensure that it had been carried out according to the criteria and procedures as contained in the By-Laws.

INTERNAL AUDIT FUNCTION

The Company has outsourced its internal audit function to NGL Tricor Governance Sdn. Bhd. to assist the Audit Committee in discharging its duties and responsibilities more effectively. They act independently and with due professional care and report directly to the Audit Committee. The outsourced Internal Auditors adopted a risk-based approach towards the planning and conduct of audit.

The Audit Committee has full and direct access to the outsourced Internal Auditors, reviews its internal audit plan and reports on audits performed, and monitors its performance. The Audit Committee also reviews the adequacy of the scope, functions, competency and resources of outsourced internal audit functions from time to time.

In respect of the financial year ended 31 December 2019, the internal audit function’s scope of audit covered the following areas and processes of Asia Poly Industrial Sdn Bhd, a wholly-owned subsidiary of the Company:

1) Finance Function

a) Budgeting Process;b) Recording of Account Payable and Receivable;c) Cash and Bank Balances; andd) Financial Reporting.

2) Fixed Asset Management

a) Fixed assets acquisition and recognition;b) Fixed assets disposal, transfer and write-off;c) Maintenance of Fixed Assets Register; and d) Safeguarding of assets.

The reviews were to assess whether the procedures, systems and controls of the processes are adequate and effective to meet the requirements of :-

a) compliance with applicable laws & regulations, policies & procedures;b) reliability and integrity of information; andc) safeguarding of assets.

Internal Auditors also had carried out follow-up audit visits to review the improvement actions taken to resolve internal audit findings as stated in the previous Internal Audit Reports.

The audit findings and recommendations for improvement and the status of implementation of management’s action plans were presented at the Audit Committee Meetings.

For the financial year ended 31 December 2019, the total costs incurred for the outsourced internal audit function is RM29,000.00.

This report is made in accordance with a resolution of the Board of Directors on 19 June 2020.

AUDIT COMMITTEE REPORT (Cont’d)



The Board of Asia Poly Holdings Berhad recognises the importance of practicing the highest standards of Corporate Governance throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial performance of the Group.

The Board is pleased to present this Statement which provide an overview of the Corporate Governance practices adopted by the Group during the financial year ended 31 December 2019. This overview takes guidance from the three (3) key principles of good corporate governance as set out in the Malaysian Code on Corporate Governance (“Code”).

This statement is prepared in compliance with Ace Market Listing Requirements of Bursa Malaysia Securities Berhad (“AMLR”) and it is to be read together with the Corporate Governance Report 2019 (“CG Report”), which is made available on the Group’s website : www.asiapoly.com.my. The CG Report provides the details on how the Group has applied each Practice as set out in the Code during the financial year 2019.

PRINCIPLE A BOARD LEADERSHIP AND EFFECTIVENESS

I Board Responsibilities

The Board is responsible to ensure long term success and delivering of sustainable value to its stakeholders through its leadership and management of the Group’s businesses. For the foregoing, the Board sets the strategic direction of the Group while exercising oversight on the day-to-day management and operation delegated to Senior Management to ensure that the conduct of the business of the Group is in compliance with relevant laws, practices, standards and guidelines applicable to the Group. The Board sets the appropriate tone at the top, providing leadership and managing good governance and practices throughout the Group.

In order to ensure orderly and effective discharge of the Board’s function and responsibilities, the Board has in place an internal governance model for Group where specific powers of the Board are delegated to the relevant Board Committees and Senior Management.

Internal Governance Model

CORPORATE GOVERNANCE OVERVIEW STATEMENT

Board of Directors

Leadership and oversight

Board CommitteesAudit Committee

Nomination CommitteeRemuneration Committee

Entrusted by the Board with specific responsibilities to oversee the Group’s affairs

Senior Management

Day to day operations, management decisions

Risk Management Committee

Managing Risks



PRINCIPLE A BOARD LEADERSHIP AND EFFECTIVENESS (Cont’d)

I Board Responsibilities (Cont’d)

The Board, Board of Committees and/or management are supported by the respective terms of references, various policies and procedures in execution of their duties with the following which constitute the key components of the Group’s governance framework :-

• Board Charter• Terms of References of Board Committees• Remuneration Policy and Procedures for Directors and Senior Management• Policies and Procedures to assess the suitability and independence of External Auditors• Operational Policies and Procedures• Terms of Reference of Risk Management Committee• Code of Conduct and Ethics• Whistle Blowing Policy

The above mentioned Board charter, terms of references, policies and procedures are reviewed and updated periodically in accordance with the needs of the Company and any new regulations that may have an impact on the Group in order to ensure that they continue to remain relevant and appropriate.

The Board is guided by a Board Charter which sets out the roles, functions, composition, responsibilities, operations and processes of the Board and also outlines the issue and decisions reserved for the Board. The Board Charter also serves as a reference and primary induction literature providing insights to prospective Board members and Senior Management and it is made available on the Group’s website at www.asiapoly.com.my, which is in line with the recommendation made by the Code. The Chairman is responsible for the leadership, effectiveness, conduct and governance of the Board. Although the position of Chairman and CEO are held by the same person, Dato’ Yeo Boon Leong, the roles and responsibilities of Chairman and CEO are clearly defined in the Board Charter.

The Board is mindful of the combined roles and is comfortable that there is no undue risk involved as the functions of the CEO are executed by delegation of the authority approved by the Board to the key management staff to ensure that division and accountability in essence are separated. All major matters and issues were referred to the Board for consideration and approval. Furthermore, half of the Board members are Independent Directors and they provide an element of objectivity, independent judgement and check and balance on the Board. The Board observed that the Chairman has exercised his due diligence in the interest of the Group and shareholders by leading the Board in exercising collective oversight of management during his tenure as the Executive Chairman. He provided objectivity in decision-making and ensured effective conduct of the board meetings. The Board will consider the appointment of CEO upon identifying a suitable candidate and when the need arises.

The Code of Conduct and Ethics for Directors is also made available on the Group’s website. It governs the conduct of the Directors and reflects the Group’s underlying core ethical values and commitment toward a high standard of integrity, transparency, fairness, accountability, contribution towards the social and environmental growth of the surroundings in which it operates and the pursuit of excellence. While the similar Code of Conduct for Employees is set out in the “Hand Book for Employees”.

Additionally, the Group has in place a Whistle Blowing Policy to facilitate all employees of the Group to raise concerns about unethical behaviour, malpractices, illegal acts or failure to comply with regulatory requirements that is taking place/ has taken place/ may take place in the future. In this respect, the policy makes it clear that any such concern can be raised without fear of victimisation to the reporting employee. It provides a formal channel to encourage and enable employees to report serious concerns so that such concerns can be properly addressed.

The Board together with the Senior Management pledge to conduct business ethically and adhere to all applicable laws and regulations whilst embracing zero-tolerance on any form of bribery and corruption. In strengthening its full commitment to govern its business practices with almost integrity and deter the occurrence of bribery or corruption within the Group, the Board has deliberated in November, 2019 and subsequently, engaged a professional consultant, NGL Tricor Governance Sdn. Bhd. to assist in documenting its processes and formalisation of policies and standard operating procedures for an Anti-bribery Management System.

Every Director has unhindered access to the advice and dedicated support services of the two (2) Company Secretaries, who are members of the professional bodies prescribed by the Minister, to ensure that Board procedures are followed and the applicable rules and regulations for the conduct of the affairs of the Board are complied with. The Company Secretaries have an oversight on overall corporate secretarial functions.

CORPORATE GOVERNANCE OVERVIEW STATEMENT (Cont’d)



GENDER ETHNICITY AGE

IndianChinese

Malay

Below 21

21 - 30

31 - 40

41 - 50

51 - 60

Female

Male

13%

4%

17%

31%

35%31%

65%

39%

61%

4%



II Board Composition

During the year under review, the Board comprised four (4) Directors as follows:-

Directors Directorate

Dato’ Yeo Boon Leong Executive Chairman, Non-Independent Executive DirectorLim Teck Seng Non-Independent Non-Executive DirectorThoo Soon Huat* Independent Non-Executive DirectorTan Ban Tatt Independent Non-Executive Director

* re-designated as Non-Independent Non-Executive Director on 7 January 2020

In the financial year ended 31 December 2019, the Independent Non-Executive Directors form half of the Board size, made a positive contribution and development of the Company’s strategy and policies through independent, constructive and informed comments.

The Board acknowledges the importance of fostering diversity to enhance effectiveness of the Board and Senior Management. Having a range of diverse dimensions brings different perspectives to the boardroom and to various levels of Management within the Group.

Nomination Committee is responsible to identify and select potential candidate(s) and to make recommendations to the Board for the appointment of Director(s) based on a set of selection criteria in order to ensure the Board has the right mix of skill to meet its objectives. The Executive Chairman is responsible for selection and appointment of candidates for Senior Management position based on selection criteria which best matches the requirements of the open position.

All appointments and employment are based on objective criteria including (but not limited to) diversity in skills, experience, age, cultural background and gender. The Group is committed to maintaining an environment of respect for people in all business dealings and achieving a workplace environment free of harassment and discrimination on the basis of gender, physical or mental state, ethnicity, nationality, religion or age.

In line with the recommendation of the Code, the Board has on 29 March 2018, set target to have at least 10% of woman directors in the Board within the next 2 years. Appointment of women to the Board will be made when a suitable candidate who can add value to the Board is identified. The said target has been achieved with the appointment of Datin Azreen Binti Abu Noh as the Independent Non-Executive Director of the Company on 10 January 2020.

Gender, Ethnicity and Age diversity in the Board and Management Team as at 31 December 2019




II Board Composition (Cont’d)

Total Workforce Diversity As At 31 December 2019

Age group Below 21 21-30 31-40 41-50 51-60 Above 61 Total Total

Nationality Malaysian Foreigner Malaysian Foreigner Malaysian Foreigner Malaysian Foreigner Malaysian Foreigner Malaysian Foreigner

M F RaceGender M F M M F M M F M M F M M F M M F M

Ethnicity:-Malay 0 1 3 3 10 7 6 3 9 2 1 0 29 16 46Chinese 0 0 3 1 1 0 2 5 4 1 0 0 10 7 17India 0 0 2 1 0 1 4 1 2 0 0 0 8 3 11Nepal 1 13 13 4 0 0 31 0 31Myanmar 1 3 3 1 0 0 8 0 8Bangladesh 1 26 2 0 0 0 29 0 29Total 0 1 3 8 5 42 11 8 18 12 9 5 15 3 0 1 0 0 115 26 141

Total Workforce

The Board has adopted a formal and objective annual evaluation of the Board, Board Committees and Directors’ performance. The Board through the Nomination Committee conducts the annual assessment on effectiveness of the Board, the Board Committees and the individual Directors of the Company.

During financial year ended 31 December 2019, the Company Secretaries assisted in the preparation of documents and facilitation the annual evaluation. The evaluation process was led by Chairman of the Nomination Committee with the assistance of the Company Secretaries. Each Director participated in the evaluation by answering a set of questionnaires. The evaluation process was based on self and peer assessments whereby the Directors assessed each other and themselves, the Board as a whole and the performance of each Board Committee. The results of all assessments and comments were collated and summarised by the Company Secretaries and were deliberated at the Nomination Committee meeting and thereafter the Nomination Committee’s Chairman reported the results and deliberation to the Board.

The results of the assessments indicated that the performance of the Board, the Board Committees, the individual Directors and Members of the Board Committees during the review period had been satisfactory and therefore, they had been effective in their overall discharge of functions, roles and duties. Also, there was no apparent weaknesses or shortcomings identified that warrant specific action plan to address the same. Nevertheless, the Board views that continuous learning and training as an integral part of directors’ development and authorised the management to continue arranging relevant training for Directors in order to further enhance their knowledge and to keep abreast with the latest development in the industry as well as to keep abreast with the ever changing regulatory and compliance matters.

The details on the activities of the Nomination Committee during the financial year ended 31 December 2019 are disclosure in the CG Report.

During the financial year ended 31 December 2019, the seminars/courses attended by the Directors including the following:

(a) Tan Ban Tatt

Date Description of Training Programme Organiser Duration

25.6.2019 &26.6.2019

Practical Auditing Methodology for SMPs The Malaysian Institute of Accountants (MIA)

16 Hours

17.10.2019 Malaysia Budget Forum -Moving into 2020 with Budget 2020

Syarikat Ong 8 Hours

31.12.2019 Complimentary Technical Update Session By MIA’s Professional Practices and Technical Division

The Malaysian Institute of Accountants (MIA)

3 Hours





II Board Composition (Cont’d)

(b) Thoo Soon Huat

Date Description of Training Programme Organiser Duration

30.4.2019 MIA’s Engagement Session with Audit Committee Members on Integrated Reporting

Malaysian Institute of Accountants (MIA)

2 Hours

In addition, Directors’ education also includes briefings by the Internal Auditors, External Auditors and the Company Secretaries on the relevant updates on statutory and regulatory requirements from time to time during the Audit Committee and Board meetings.

Although Dato’ Yeo Boon Leong and Mr. Lim Teck Seng did not attend any official training during the financial year under review, they enhanced their knowledge and kept abreast with the latest development on statutory and regulatory requirements from the briefings given by the Internal Auditors, External Auditors and the Company Secretaries from time to time during the Audit Committee and Board Meetings. They also enhanced their knowledge by focusing on business news and extensive reading of relevant business and regulatory materials. They actively seek advice and interact with the relevant professional personnel to enhance their skills and knowledge on specific area.

During the financial year ended 31 December 2019, the attendance records of Board and Board Committees meetings are as follows:-

Directors Board MeetingAudit Committee

Meeting

Nomination Committee

Meeting

RemunerationCommittee

Meeting

Dato’ Yeo Boon Leong 8/8 - - 1/1Lim Teck Seng 8/8 7/7 1/1 1/1Thoo Soon Huat 8/8 7/7 1/1 1/1

Tan Ban Tatt 8/8 7/7 1/1 -

The Board is satisfied with the level of commitment given by the Directors in fulfilling their roles and responsibilities as Directors of the Company. To ensure that the Directors devote sufficient time to carry out their roles and responsibilities and in line with the AMLR, a Director of the Company must not hold directorships of more than five (5) Public Listed Companies.

In the intervals between Board Meetings, any matters requiring urgent Board decisions and/or approvals can be sought via circular resolutions which are supported with all the relevant information and explanations required for informed decisions to be made.

The Directors are required to submit an update on their other directorships from time to time for monitoring of the number of directorships held by the Directors of the Company and for notification to Companies Commission Malaysia accordingly.

III Remuneration

The Board has in placed a set of policies and procedures for remuneration of Directors and Senior Management (“Remuneration Policy”). The Board, through the Remuneration Committee is responsible for establishing, reviewing and recommending to the Board the remuneration packages of each individual Executive Director, the Executive Chairman and the Secretary. The Remuneration Committee is also responsible for recommending the remuneration for Senior Management and to ensure that their remuneration commensurate with that of their responsibilities and commitment.

The Chairman of the Committee may request for a meeting as and when deemed necessary. The remuneration of Directors shall be the ultimate responsibility of the full Board after considering the recommendation of the Committee.






III Remuneration (Cont’d)

On 5 April 2019, the Remuneration Committee conducted a review of the Remuneration Policy and was of the view that the Remuneration Policy is appropriate and applicable and did not recommend any amendment to the Remuneration Policy. The Remuneration Committee also reviewed the Directors’ fee, Directors’ allowances and remuneration packages of the Executive Chairman and Senior Management to ensure they are competitive and sufficient to attract, retain and motivate individuals to serve on the Board and the Group. In this respect, the Board approved the recommendation by the Remuneration Committee to put forth the Directors’ Fee and Allowances to the shareholders for approval at the Sixteenth Annual General Meeting.

The Details of the Directors’ remuneration of the Company for the financial year ended 31 December 2019 is as follows:

Company Salaries

(RM)Bonuses

(RM) Fees(RM)

Benefit in kind(RM)

Other Remuneration

(RM)Total(RM)

Executive Director

Dato’ Yeo Boon Leong - - 75,000 - 12,600 87,600

Non-Executive Directors

Lim Teck Seng - - 60,000 - 12,200 72,200

Thoo Soon Huat - - 60,000 - 14,000 74,000

Tan Ban Tatt - - 60,000 - 12,600 72,600Total - - 255,000 - 51,400 306,400

Group Salaries

(RM)Bonuses

(RM) Fees(RM)

Benefit in kind(RM)

Other Remuneration

(RM)Total(RM)

Executive Director

Dato’ Yeo Boon Leong 663,000 25,000 75,000 - 93,083 856,083

Non-Executive Directors

Lim Teck Seng - - 60,000 - 228,200 288,200

Thoo Soon Huat - - 60,000 - 14,000 74,000

Tan Ban Tatt - - 60,000 - 12,600 72,600Total 663,000 25,000 255,000 - 347,883 1,290,883

The top five (5) Senior Management’s remuneration for the financial year ended 31 December 2019 is as follows :-

Range of Remuneration (RM) Top Five Senior Management

250,000-300,000 1

200,000-250,000 2

150,000-200,000 1

100,000-150,000 0

50,000-100,000 1

Total 5




III Remuneration (Cont’d)

The top five (5) Senior Management’s remuneration for the financial year ended 31 December 2019 is as follows :-The Board is of the opinion that the disclosure of the Senior Management Personnel names and the various remuneration component i(salary, bonus, benefits in-kind, other emoluments) would not be in the best interest of the Group due to confidentiality and sensitivity of each remuneration package.

PRINCIPLE B EFFECTIVE AUDIT AND RISK MANAGEMENT

I Audit Committee

The Audit Committee comprises three (3) Non-Executive Directors, out of which two (2) are Independent, which is in compliance with the AMLR. The Audit Committee is chaired by an Independent Non-Executive Director, Mr. Tan Ban Tatt, who is distinct from the Chairman of the Board. It is required under the Terms of Reference of Audit Committee of a former key audit partner to observe a cooling off period of at least two (2) years before being appointed as a member of Audit Committee. The composition of the Audit Committee was reviewed by the Nomination Committee during the annual assessment held on April 2019 and Nomination Committee did not recommend changes to the composition of the Audit Committee with the view that the Audit Committee maintain an independent and effective Audit Committee.

All members of the Audit Committee are financially literate whilst Mr. Tan Ban Tatt is a member of MIA and a fellow member of the Association of Chartered Certified Accountants (ACCA). The Audit Committee has full access to both the Internal and External Auditors who, in turn, have access at all times to the Chairman of Audit Committee.

Detailed of activities carried out by the Audit Committee during the financial year ended 31 December 2019 are set out in the Audit Committee Report.

The Company has in place policies and procedures to assess the suitability, objectivity and independence of the External Auditors. In the annual assessment on the suitability, objectivity and independence of the auditors, the Audit Committee is guided by the factors as prescribed under AMLR as well as the policies and procedures which were adopted by the Board.

II Risk Management And Internal Control Framework

The Risk Management Committee is responsible to oversee the Group’s risk management framework and policies. The composition of Risk Management Committee consists of an Audit Committee, senior executives and second tier executives so as the risks at all level throughout the organisation are managed. During financial year ended 31 December 2019, the Risk Management Committee is chaired by Mr. Thoo Soon Huat, an Independent Non-Executive Director of the Company.

The Risk Management Committee assessed and monitored the efficacy and effectiveness of the risk management controls and measures taken whilst the adequacy and effectiveness of the internal controls were reviewed by the Audit Committee in conjunction with the activities and reports of the outsourced Internal Auditors.

The internal audit function is outsourced to NGL Tricor Governance Sdn. Bhd. and the internal audit personnel, are free from any family relationship with any Directors and/or major shareholders and do not have any conflict of interest with the Group. The internal audit function is independent of the operations of the Group and provides reasonable assurance that the Group’s system of internal control is satisfactory and operating effectively.

Further details of the Group’s risk management and internal control are disclosed in the Statement of Risk Management and Internal Control which has been reviewed by the External Auditors.





PRINCIPLE C INTERGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

I Communication with Stakeholders

The Board leverages on a number of formal channels for effective dissemination of information to shareholders and other stakeholders, particularly through Annual Reports, Circular to Shareholders, announcements to Bursa Malaysia Securities Berhad, media releases, Annual General Meeting (“AGM”), Extraordinary General Meeting (“EGM”) and the Group’s website, www.asiapoly.com.my.

The Company is not a Large Company as defined by the Code. The Company will consider adopting integrated reporting if the Board is of the view that the benefits of the adoption outweigh the costs.

II Conduct of General Meetings

At the Sixteenth AGM which held on 30 May 2019, all Directors including Chairman of all the respective Board Committees were present at the meeting to engage directly with and be accountable to the shareholders for their stewardship of the Company. The Senior Management and External Auditors also present to respond to the shareholders’ queries. The Chairman of the Board chaired the Sixteenth AGM in an orderly manner and allowed the shareholders or proxies the opportunity to speak at the meeting.

Shareholders were provided with sufficient notices of AGM and accompanying explanatory material such as notes and Annual Report in order for the shareholders to make arrangements to attend the AGM and exercise their rights. Shareholders were encouraged to appoint proxy/proxies to vote on their behalf if they are unable to attend the AGM. The copies of the proxy forms were available in the Group’s website and the CD-Roms distributed in the Company’s Abridged Annual Report. In line with the recommendations of the Code, the Notice of Sixteenth AGM of the Company was issued 28 days before the AGM date.

The Company’s Sixteenth AGM was held at the Conference room of the Company which is located within the vicinity of Klang Valley with the intention to create a sense of “family” to its shareholders. This venue is familiar to most shareholders of the Company since past AGMs or EGMs were held at the same venue.

In line with the AMLR on requirement for poll voting for any resolution set out in the notice of general meetings, the resolutions tabled at the Sixteenth AGM were all voted by poll. Depending on the cost effectiveness, the Board will consider on the leverage of technology to enhance the quality of engagement with its shareholders and facilitate further participation by shareholders at AGMs and EGMs of the Company.

STATEMENT ON COMPLIANCE

Overall, the Company has substantially complied with the majority of the Code for the financial year 2019. The Board is committed and will continue to strengthen the application of the corporate governance practices and procedures throughout the Group, in pursuit of safeguarding the interest of all shareholders and stakeholders.

This Corporate Governance Overview Statement was approved by the Board of Directors on 19 June 2020.



1) UTILISATION OF PROCEEDS

The Company did not undertake any corporate proposals to raise proceeds during the financial year ended 31 December 2019.

As at 19 June 2020, the status of utilisation of proceeds raised from the Renounceable Rights Issue of 333,559,880 new Irredeemable Convertible Preference Shares (“ICPS”) together with free detachable warrants which was completed on 19 December 2017 is at follows :

Purpose

ProposedUtilisation(RM’000)

ActualUtilisation(RM’000)

Deviation(RM’000)

Expected timeframe for utilisation of proceeds from the date of listing of the ICPS

Setting up coating plant 12,350 - 12,350 *Within 42 months

Working capital 3,251 3,251 - Within 12 months

Repayment of loan borrowings 177 177 - Within 12 months

Estimated expenses in relation to the ICPS

900 900 - Within 2 weeks

Total proceeds 16,678 4,328 12,350

* As announced by the Company on 17 May 2019 and 18 June 2020, the time frame for the utilisation of the proceeds for setting up coating plant has been extended for a further period of twenty four (24) months.

2) NON-AUDIT FEES

The amount of non-audit fees paid or payable to the External Auditors or a firm or corporation affiliated to the Auditors’ firm for the financial year ended 31 December 2019 are as follows:-

Particular Company (RM) Group (RM)

Non-Audit Fees paid or payable to External Auditor

- review of the Statement on Risk Management and Internal Control 5,000 5.000

3) SHARE ISSUANCE SCHEME

The five (5) years Share Issuance Scheme (“SIS”) of the Company which was effective on 18 March 2016 was the only SIS in existence during the financial year ended 31 December 2019. In view of the said SIS has no longer attractive as the SIS Options have been out of the money and there was no intention to grant any further SIS Options as the expiration date (17 March 2021) of SIS is approaching, the said SIS was terminated with effect from 27 December 2019 as announced by the Company.

No option was offered to the eligible employees and Directors during the financial year ended 31 December 2019 and no option has been exercised during the financial year ended under review. The total number of option granted, exercised and outstanding under the SIS since its commencement up to 26 December 2019 (prior to the effective date of termination) are as set out in the table below:-

Category

No. of Options

Allocated

No. of Options Granted

No of Options

Exercised

No. of Options Forfeited/

Lapsed

No of Options

outstanding

Eligible Employees 7,450,000 5,098,000 - 1,570,000 2,352,000

Senior Management 2,170,000 1,410,000 - 270,000 760,000

Executive Director 4,420,000 2,820,000 - 420,000 1,600,000

Non-Executive Director 6,000,000 3,600,000 - - 2,400,000

Total 20,040,000 12,928,000 - 2,260,000 7,112,000

ADDITIONAL COMPLIANCE INFORMATION



3) SHARE ISSUANCE SCHEME (Cont’d)

Non-Executive Director

No. of Options

Granted/Vested

No. of Options Granted

No ofOptions

Exercised

No. of Options

Forfeited/Lapsed

No of Options

outstanding

Lim Teck Seng 3,000,000 1,800,000 - - 1,200,000

Thoo Soon Huat 3,000,000 1,800,000 - - 1,200,000

Total 6,000,000 3,600,000 - - 2,400,000

The percentage of options applicable to the Directors and senior management under SIS are as follows :-

Directors and Senior Management During the periond under reviewSince commencement of the SIS up to 26 December 2019

Aggregate maximum allocation 67% 67%

Actual granted and accepted 67% 64%

4) MATERIAL CONTRACTS

There were no material contracts (not being contracts entered into the ordinary course of business) entered into by the Company and its subsidiaries involving the interests of Directors and major shareholders of the Company either subsisting at the end of the financial year or entered into since the end of the previous financial year.

ADDITIONAL COMPLIANCE INFORMATION (Cont’d)



INTRODUCTION

This Sustainability Statement (“Statement”) sets out what the Board considers as material sustainability risks and opportunities that impact the way the Group’s operations are carried out as well as how such risks and opportunities are managed during the financial year under review.

Asia Poly Holdings Berhad and its subsidiaries (“the Group”) are committed to maintain the sustainability towards our stakeholders which form an important part of our business. We believe that by adopting sustainable principals will guide us through the journey of making the world a better place to live in without compromising the profitability of the Company.

ln line with this, we integrate sustainability strategies into our operations by harnessing our expertise and implementing measures that can mitigate the negative impact to our operations and positively contribute to the Economy, Environment and Society (EES).

SUSTAINABILITY GOVERNANCE STRUCTURE

A robust governance structure is crucial to ensure that we achieve our sustainability commitments. The Board of Directors (“the Board”) is primarily responsible for the sustainability performance of the Group and leads the initiatives to embed sustainability considerations into the Group’s strategy. The Board has delegated the task of managing sustainability related matters to the Management Team. As sustainability is a journey, and as the Group moves forward, the Board will, through engagement with the Management Team ascertain and develop a formal approach to sustainability so as to provide a more detailed and comprehensive perspective on sustainability. The Management Team will also report to the Board on sustainability matters and status of initiatives deployed via the Audit Committee together with risk management matters.

Stakeholders Description Engagement Method Substainability Issues

Customers Our customers are converters, product manufacturers and distributors.

Customer feedback, factory visit and monthly meeting.

Product quality, cost and services.

Employees

Our employees are keyenablers of all our business activities and provide value added throughout the valuechain.

Representative meeting,monthly briefing and training.

Prompt salary payment,performance management, learning & development, compensation and benefits.

Shareholders The owners of the Company Annual General Meeting Group Financial performance

Regulators

Government bodies thatensure compliance of theGroup.

Income tax return, Licencerenewal, SecuritiesCommission declaration,Annual Return.

Compliance with legalrequirements, financialreporting, environmentalcompliance, occupationalsafety & health.

Bankers

Source of business and projectfinancing

Annual review of financialhealth and financial position.

Financial health, solvency,loan covenants, default inrepayment of interest andprincipals.

Suppliers

Raw Material suppliers

Monthly meeting and factory visit.

Raw material source andpricing, imported medium and liner price comparison.

ECONOMIC

As a public listed company, the Company is principally responsible towards its shareholders in securing and growing their financial assets. Generally, companies generate return to its shareholders in two ways i.e. by distributing dividends and appreciation of its share price. The Company constantly strives to achieve economic sustainability by utilising its assets efficiently and effectively, which allows continued generation of profitability over time.

SUSTAINABILITY STATEMENT



SUSTAINABILITY STATEMENT (Cont’d)

ENVIRONMENT

Adhering to stringent environmental standards The Group’s continuous efforts towards good Environmental, Occupational Safety and Health management practices has resulted in the subsidiary being accredited with ISO 9001:2008 for Quality Management.

Energy Investments in automation over the years have not only reduced the costs but have also indirectly contributed to minimising wastages of resources used. Efficient usage of resources and lesser machine hours have indirectly contributed to a smaller carbon footprint due to lesser kilowatt hours of electricity used.

For energy consumption, we are solely dependent on local electricity supply. The Group has been continuously devoting efforts to reduce the usage of the electricity, we have also engaged a certified electricity consultant to perform an analysis and to provide solutions to further reduce the usage of electricity apart from our current initiatives. In addition, Asia Poly Industrial Sdn. bhd. has installed and implemented the solar photovoltaic (PV) systems on the rooftops of factory to generate electricity which had subsequently reduce the carbon footprint and deliver economic savings to the Group. We have also taken initiatives to implement energy saving measures such as turning off lights when not in use, enabling power management functions on computers or laptops, activating sleep mode for photocopy machines when not in use, conducting scheduled preventive maintenance for equipment and machines.

Waste management

The Group is focused on the efficient use of resources and proper management waste which is a by-product of the manufacturing process. The Group is committed to ensure all scheduled wastes are appropriately treated and stored or disposed off in compliance with law and regulations. We also seek to reduce waste generation by seeking to improving design and technology employed in the production processes.

The Group believe in constant improvement to optimize input and minimizes wastages in our raw material inputs. We seek to use such inputs efficiently to maximize output of value added goods and avoid unnecessary waste generation.

Environment friendly initiative

To prevent or reduce impact to the environment, we choose to practice 3R which is reduce, reuse and recycle. Throughout our facility, we have provided designated bins to discard paper, plastic items, food waste, tins and cans. We have also initiated an effort to reduce the usage of paper by avoiding printing unnecessary documents, conducting internal communication online as well as encouraging the practice of using both sides of the paper.

SOCIAL

Talent engagement

At the heart of the Group’s success are its employees. Ultimately, a safe and inclusive work environment is one that will encourage a spirit of togetherness and harmony among employees. The Group is committed to investing in employee growth and build a workplace that recognises talent. We believe that quality and conducive working environment will increase efficiency and productivity as well as improving the quality of life of the employees. We also strongly believe that human capital is the greatest asset of all successful companies. We actively create opportunities for our employees to develop and realise their true potential so as to ensure that they feel appreciated and valued for their performance.

The Group offer a competitive remuneration package to our staff and incentives to those who meet performance targets. Other than benefits that are mandated and defined by local legislation, the Group also provides its employees with Group Hospitalisation Insurance and other medical benefits.

In order to keep our employees motivated, committed and to enhance their knowledge, the Group continuously strive to offer and provide various training and development skills to its employees. Various trainings were conducted during the year including trainings on management skills, soft skills, on-the job, computer and system training and others.

To help build rapport among employees, various activities including company outings and social gatherings are planned. These include Hari Raya Buka Puasa, Company Annual Dinner and occasional lunches. We believe this will help our employees to get to know each other better and instill a feel of togetherness and support a more cohesive and cooperative working environment.



SUSTAINABILITY STATEMENT (Cont’d)

Education

The Group continuously offers and accepts students undergoing internship programme required by their educational institutions and universities in completing their respective course.

Through this programme, the Company aims to provide students the opportunity to apply what they have learned and expand their knowledge whilst equipping them with the invaluable on-the-job experience.

Safe and healthy working environment

We are committed to provide a healthy and safe working environment for all our staff. We have set up a Safety, Health and Environment Committee to oversee the occupational health and safety initiatives. Programs and initiatives implemented to achieve greater health and safety awareness amongst our employees include safety and awareness training, cardiopulmonary resuscitation (CPR) and first aid response training.

Personal Protective Equipment (safety boots, ear plugs and protective gloves) is available to all workers on a need basis. A Quality Environment Health & Safety management system such as “Company Bomba Team” is in place and this is subject to inspection by Jabatan Bomba. We conduct briefings to our staff to create and reinforce the awareness on health and safety.

The health and safety of employees at the workplace are important to the Group. Health and safety policies of the Group are reviewed periodically and improved whenever necessary. Emphasis is placed on providing a safe, clean, hygienic and healthy working environment.

Corporate Liability Provision

As the Corporate Liability Provision under Section 17A of the Malaysian Anti-Corruption Commission (Amendment) Act 2018 will come into effect from 1 June 2020, the Company would embark on the implementation of an anti-bribery and anti-corruption policy which prohibits all forms of bribery and corruption practices and conduct trainings to the Directors and all staff of the Company to ensure that the business is free from any acts of bribery and corruption in upholding high standards of ethics and integrity.

BUILDING A SUSTAINABLE FUTURE

The Group recognises that it has a responsibility to a wider community beyond its employees, shareholders and creditors. The Group will continue to ensure that it has to maintain thoughtfulness and integrity in its dealings with the media, authorities, local communities or other interested parties. Moving forward in the Group’s sustainability journey, the Group will concurrently continue to focus on developing quality products and services that generate returns for shareholders while balancing the interests of other stakeholders.

This statement was approved by the Board on 19 June 2020.



INTRODUCTION

The Board of Directors (“the Board”) recognises the importance of good practice of corporate governance and is committed to establish a sound risk management framework and system of internal control to safeguard shareholders’ investments and the assets of Asia poly Holdings Berhad (“Asia Poly” or “the Company”) and its subsidiaries (“the Group”).

The Board is pleased to present the Statement on Risk Management and Internal Control which outlines the nature and scope of risk management and the internal control systems of the Group for the financial year ended 31 December 2019, which has been prepared pursuant to Paragraph 15.23 of the Ace Market Listing Requirements of Bursa Malaysia Securities Berhad, Malaysian Code on Corporate Governance and Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.

BOARD RESPONSIBILITIES

The Board acknowledges its overall responsibility for maintaining the Group’s systems of internal controls and risk management to safeguard shareholders’ investment, the interest of customers, regulators, employees, and the Group’s assets. The Board further recognises its responsibility in reviewing the adequacy and integrity of these systems.

The Board regularly receives and reviews reports on internal control, and is of the view that the system of internal control is adequate to safeguard shareholders’ interest and the Group’s assets. The role of Management is to implement the Board’s policies and guidelines on risks and controls, to identify and evaluate the risks faced, and to operate suitable system of internal controls to manage these risks.

However, due to the limitations that are inherent in any system of internal control, the systems of internal controls can only provide reasonable and not absolute assurance against material misstatement or loss as it is designed to manage rather than eliminate the risk of failure to achieve the Group’s business objectives.

The Company risk management and internal control systems does not apply to its joint venture and associate company which falls within the control of their majority shareholders.

MANAGEMENT RESPONSIBILITIES

Management is responsible for implementing the Group’s policies and procedures on risk and internal control to identify, evaluate, measure, monitor and report risks as well as the effectiveness of the internal control systems, taking appropriate and timely remedial actions as required.

RISK MANAGEMENT

The Board acknowledges that there is an on-going process of identifying, evaluating, monitoring, assessing, reporting and managing significant risks by the Management to achieve the objectives of the Group for the financial year under review. The process is in place for the year under review and up to the date of issuance of the Statement on Risk Management and Internal Control.

The Board has established a Risk Management Committee (“RMC”) to oversee the implementation of risk management framework and risk management activities of key risks in the Group. The RMC shall ensure effective implementation and maintenance of the Risk Management Framework. RMC is chaired by the Audit Committee member and supported by several Heads of Departments and second tier executives. The Heads of departments and business units are responsible for managing the risks in their departments or business units. Changes in the key business risks or emergence of new key risks shall also be highlighted and discussed in the risk management meeting. During the year, the Group’s business units and key process owners have conducted their risk assessments and internal controls reviews.

The risk identification process involves reviewing and identifying the possible risk exposure arising from both internal and external environment changes and operation conditions. The risk measurement guidelines consist of financial and non-financial qualitative measure of risk consequences based on risk likelihood rating and risk impact rating.

As part of the Risk Management process, a Registry of Risk and a Enterprise Risk Management Policy had been prepared. The Registry of Risk is maintained to identify principal business risks and updated for changes in the risk profile. The Enterprise Risk Management Policy summarises risk management methodology, approach and processes, roles and responsibilities, and various risk management concept. The respective risk owners are accountable to identify risks and to ensure that adequate control systems are implemented to mitigate risks faced by the Group. The process of identifying, evaluating, monitoring and managing risks is embedded in various work processes and procedures of the respective operational functions and management team.

STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL



THE KEY ELEMENTS OF INTERNAL CONTROL

The following sets out the key element of the Group’s internal control, which have been in place throughout the financial year ended 31 December 2019 and up to the date of this Statement:

1. Organisational Structure & Authorisation Procedures

The Company maintains a formal organisational structure that includes clear delegation of responsibilities and accountability. The organizational structure is appropriately set up given the nature, size and complexity of the Company. The Company’s business objectives are communicated to the respective personnel in relation to their respective roles so that they understand and are accountable for the achievement of these objectives. The authority limits, roles and responsibilities and line of reporting are also documented in writing as a formal medium of communication.

2. Periodical and/or Annual Budget

An annual budget is prepared by management and tabled to the Board for approval. Periodic monitoring is carried out to measure the actual performance against budget to identify significant variances and revise remedial action plans.

3. Company Policies and Procedures

Documented policies and procedures for key business processes are formalised and are regularly reviewed and updated to ensure that it maintains its effectiveness and continues to support the Company’s business activities at all times as the Company continues to grow.

4. Human Resource Policy

Comprehensive guidelines on the employment and retention of employees are in place to ensure that the Company has a team of employees who are well trained and equipped with all the necessary knowledge, skills and abilities to carry out their responsibility effectively. Training and development are provided as and when required by employees with the objective of enhancing their knowledge and competency;

5. ISO certification

Certain of the Company’s operations are ISO 9001:2015 certified. With such certifications, audits are conducted by external parties periodically to ensure compliance with the terms and conditions of the certification.

6. Related Party Transactions

Related party transactions are disclosed, reviewed, and monitored by the Board on a periodic basis.

7. Monitoring and Review

Scheduled operational and management meetings are held to discuss and review the business plans, budgets, financial and operational performances of the Company. Monthly management accounts containing key financial results, operational performance and comparison of actual performance against budgets are presented to the management team for monitoring and review. The quarterly financial statements are presented to the Board for their review, consideration and approval. The Board also plays an active role in discussing and reviewing the business plans, strategies, performance and risks faced by the Company.

INTERNAL AUDIT FUNCTIONS

In accordance with the Malaysian Code on Corporate Governance, the Group, in its efforts to provide adequate and effective internal control system has appointed Messrs NGL Tricor Governance Sdn Bhd (“NGL Tricor”), an independent consulting firm, to review the adequacy and integrity of its system of internal control. The independent consulting firm acts as the internal auditors and report directly to the Audit Committee.

STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL(Cont’d)



STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL(Cont’d)

INTERNAL AUDIT FUNCTIONS (Cont’d)

The internal audit reviews address critical business processes, identified risks and internal control gaps, assessed the effectiveness and adequacy of the existing state of internal control of the Group and recommended possible improvements to the internal control process. This is to provide reasonable assurance that such systems continue to operate satisfactorily and effectively within the Group. The scope of audit focused on the five (5) broad control components, which are control environment, risk activities, control activities, information and communications and monitoring. During the financial year ended 31 December 2019, internal audits were carried out in accordance with the risk based internal audit plan approved by the Audit Committee. The business processes reviewed were Finance Function and Fixed Assets Management Function. The management was required to explain any purported lack of compliance pursuant to the audit reports issued. The results of the internal audit reviews were discussed with Senior Management and subsequently, audit findings, including the recommendations for improvement were reported to the Audit Committee at the quarterly meetings. In addition, follow up reviews were also conducted to ensure that corrective actions have been implemented in a timely manner and the results of the follow up reviews were also reported to the Audit Committee and Board during the quarterly board meetings

The total costs incurred for the outsourced internal audit function during the financial year ended 31 December 2019 is RM29,000.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in Audit and Assurance Practice Guide (“AAPG”) 3, 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 (“MIA”) for inclusion in the annual report of the Group for the financial year ended 31 December 2019.

The External Auditors have opined to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and effectiveness of the risk management and internal control system of the Group in all material respects in accordance with the disclosure required by paragraph 41 and 42 on the Statement on Risk Management and internal Control Guideline for Directors of Listed Issuers.

AAPG 3 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Board and management thereon. The external auditors are also not required to consider whether the processes described to deal with material internal control aspects of any significant problems disclosed in the Annual Report will, in fact, remedy the problems.

CONCLUSION

In line with the Guidelines, the Executive Chairman has provided assurance to the Board that the Group’s risk management and internal control systems are adequate and effective, in all material aspects.

The Board is of the opinion that the Group’s system of risk management and internal control is operating adequately and effectively throughout the financial year under review and up to date of this Statement. The Board shall continue to take the appropriate and necessary measures to improve such systems to meet the Company’s corporate objectives.

This statement is made in accordance with the resolution of the Board of Directors dated 19 June 2020.



The Directors are responsible to ensure that the financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia and so as to give a true and fair view of the financial position of the Group and the Company as at 31 December 2019 and of the financial performance and the cash flows of the Group and of the Company for the financial year then ended.

The Directors are satisfied that in preparing the financial statements of the Group and of the Company for the financial period ended 31 December 2019, the Group has used the appropriate accounting policies and applied them consistently. The Directors are also of the view that relevant approved accounting standards have been followed in the preparation of these financial statements.

This Statement is made in accordance with a resolution of the Board of Directors on 19 June 2020.

DIRECTORS’ RESPONSIBILITY STATEMENT



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 2019.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS The Group The Company RM RM Loss after taxation for the financial year (4,626,350) (4,178,948) Attributable to:- Owners of the Company (4,616,695) (4,178,948)Non-controlling interests (9,655) - (4,626,350) (4,178,948) 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 statement.

ISSUES OF SHARES AND DEBENTURES

During the financial year:-

(a) the Company issued 12,305,150 new ordinary shares from the conversion of 24,610,300 Irredeemable Convertible Preference Shares (“ICPS”) with a conversion ratio of two (2) ICPS to be converted into one (1) new ordinary share.

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.



WARRANTS

Warrants 2015/2020

Pursuant to a Deed Poll dated 5 November 2015 (“Deed Poll”), the Company issued 58,609,973 warrants (“Warrants A”) in conjunction with the two-call rights issued with warrants.

The main features of the Warrants 2015/2020 are as follows:

(a) The issue date of the Warrants A is 21 December 2015 and the expiry date is 13 December 2020. Any Warrants A not exercised at the expiry date will lapse and cease to be valid for any purpose;

(b) Each Warrant entitles the registered holder to subscribe for one (1) new ordinary share of RM0.10 in the Company at an exercise price of RM0.10 per ordinary share;

(c) Subject to the provisions in the Deed Poll, the exercise price and the number of Warrants A held by each Warrant holder shall be adjusted by the Board in consultation with approved adviser and certification of the external auditors, in the event of alteration to the share capital of the Company;

(d) The Warrant holders are not entitled to any voting rights or participation in any form of distribution and/or offer of securities in the Company until and unless such Warrant holders exercise their Warrants A to subscribe for new ordinary shares; and

(e) The Warrants A shall be transferable in the manner provided under the Securities Industry (Central Depositories) Act, 1991 and the Rules of Bursa Malaysia Depository Sdn. Bhd.

In the previous financial year, pursuant to the renounceable rights issue of ICPS mentioned in Note 19, an additional 8,237,314 adjustment Warrants 2015/2020 was made in accordance with the provisions under the Deed Poll constituting the Warrants 2015/2020 dated 5 November 2015. Consequently, the exercise price of Warrants 2015/2020 remained at RM0.10 and the additional warrants was revised on 29 November 2017 to ensure that the existing Warrants 2015/2020 holders would not be prejudiced after the implementation of the renounceable rights issue of ICPS with Warrants 2017/2022.

The movement of Warrants A during the financial year is as follows:-

Entitlement of Ordinary Shares At 1.1.2019 Exercised Lapsed At 31.12.2019

Number of unexercised Warrants A 64,701,287 - - 64,701,287

Warrants 2017/2022

Pursuant to a Deed Poll dated 27 October 2017 (“Deed Poll”), the Company issued 83,389,970 detachable warrants (“Warrants B”) in conjunction with the issuance of 333,559,880 renounceable rights issue of ICPS at a nominal value of RM0.05 in 2017.

The main features of the Warrants 2017/2022 are as follows:

(a) The issue date of the Warrants B is 13 December 2017 and the expiry date is 12 December 2022. Any Warrants B not exercised at the expiry date will lapse and cease to be valid for any purpose;

(b) Each Warrant entitles the registered holder to subscribe for one (1) new ordinary share of RM0.10 in the Company at an exercise price of RM0.10 per ordinary share;

(c) Subject to provision in the Deed Poll, the exercise price and the number of Warrants B held by each Warrant holder shall be adjusted by the Board in consultation with approval adviser and certification of the external auditors, in the event of alternation to the share capital of the Company;

DIRECTORS’ REPORT (Cont’d)



WARRANTS (Cont’d)

Warrants 2017/2022 (Cont’d)

(d) The Warrant holders are not entitled to any voting rights or participation in any form of distribution and/or offer of securities in the Company until and unless such Warrant holder exercise their Warrants B to subscribe for new ordinary shares; and

(e) The Warrants B shall be transferable in the manner provided under the Securities Industry (Central Depositories) Act, 1991 and the Rules of Bursa Malaysia Depository Sdn. Bhd.

Entitlement of Ordinary Shares At 1.1.2019 Exercised Lapsed At 31.12.2019

Number of unexercised Warrants B 83,389,970 - - 83,389,970

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 except for the share options granted pursuant to the Company’s Share Issuance Scheme below.

SHARE ISSUANCE SCHEME

The Share Issuance Scheme of the Company (“SIS”) is governed by the SIS By-Laws and was approved by the shareholders at an Extraordinary General Meeting held on 28 October 2015. The SIS was implemented on 28 March 2017 and will be in force for a maximum period of 4 years from the effective date.

The details of the SIS are disclosed in Note 20(b) to the financial statements.

On 26 December 2019, the Group have terminated the SIS with effective from 27 December 2019.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables and satisfied themselves that all known bad debts had been written off and that adequate allowance have been made for impairment losses on receivables.

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

CURRENT ASSETS

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

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 the date of this report are as follows:-

Dato’ Yeo Boon LeongLim Teck SengThoo Soon HuatTan Ban TattAzreen Binti Abu Noh (Appointed on 10 January 2020)

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:-

Tay Swee KengKua Chye HengGan Eng Tien Liaw Jing Quan Mohd Hanis Bin Ahmad (First director and resigned on 22 August 2019)Nur Adzlinda Binti Amri (First director and resigned on 27 December 2019)




DIRECTORS’ INTERESTS

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

Number of Ordinary Shares At 1.1.2019 Bought Sold At 31.12.2019

The Company

Direct InterestsDato’ Yeo Boon Leong 88,996,556 - - 88,996,556Lim Teck Seng - 1,600,000 - 1,600,000Thoo Soon Huat 682,300 - - 682,300

Number of Irredeemable Convertible Preference Shares At 1.1.2019 Bought Sold At 31.12.2019

The Company

Direct interestDato’ Yeo Boon Leong 49,996,800 6,320,000 (2,056,200) 54,260,600Lim Teck Seng - 500,000 (500,000) -Thoo Soon Huat 1 - - 1

Number of warrants 2015/2020 At 1.1.2019 Issued Sold At 31.12.2019

The Company

Direct interestDato’ Yeo Boon Leong 33 - - 33

Number of warrants 2017/2022 At 1.1.2019 Issued Sold At 31.12.2019

The Company

Direct interestDato’ Yeo Boon Leong 75 - - 75

Number of options over ordinary shares At 1.1.2019 Granted Terminated At 31.12.2019

The Company

Direct interestDato’ Yeo Boon Leong 1,600,000 800,000 (2,400,000) -Lim Teck Seng 1,200,000 600,000 (1,800,000) -Thoo Soon Huat 1,200,000 600,000 (1,800,000) -

The other directors in office at the end of the financial year had no interest in shares, warrants and options over unissued shares of the Company 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 except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with certain directors as disclosed in Note 38(b) to the financial statements. Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate other than the share options granted to certain directors pursuant to the SIS of the Company.

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 Company maintains a Directors’ and Officers’ Liability Insurance Policy on a group basis. During the financial year, the total amount of indemnity coverage and insurance premium paid for the directors of the Group were RM10,000,000 and RM11,000 respectively. 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 42 to the financial statements.

SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD

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

AUDITORS

The auditors, Crowe Malaysia PLT, have expressed their willingness to continue in office.

The details of the auditors’ remuneration are disclosed in Note 29 to the financial statements.

Signed in accordance with a resolution of the directors dated 19 June 2020

Dato’ Yeo Boon Leong

Lim Teck Seng




We, Dato’ Yeo Boon Leong and Lim Teck Seng, being two of the directors of Asia Poly Holdings Berhad, state that, in the opinion of the directors, the financial statements set out on pages 55 to 136 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 2019 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 19 June 2020.

Dato’ Yeo Boon Leong Lim Teck Seng

I, Ch’ng Siew Lei, MIA Membership Number: CA 16340, being the officer primarily responsible for the financial management of Asia Poly Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 55 to 136 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 by the abovementionedCh’ng Siew Lei, NRIC Number: 690507-10-5014at Kuala Lumpur in the Federal Territoryon this 19 June 2020

Ch’ng Siew LeiBefore meDatin Hajah Raihela WanchikNo W-275

Commissioner For Oaths

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 Asia Poly Holdings Berhad, which comprise the statements of financial position as at 31 December 2019 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 55 to 136.

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 2019, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

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

Independence and Other Ethical Responsibilities

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

Key Audit Matters

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

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

Impairment of Property, Plant and Equipment (“PPE”)Refer to Notes 4.1(c), 4.12(b) and 8 to the financial statementsKey Audit Matter How our audit addressed the key audit matter

The Group’s PPE amounted to RM37,175,261 other than freehold land amounting to RM20,000,000, representing approximately 16% of the Group’s total assets.

The management has performed impairment assessment of their PPE by comparing its carrying amount with its value in use (“VIU”) computed using the discounted cash flow (“DCF”) model prepared by management. The DCF is subject to the application by management of certain key assumptions and judgements.

We considered this as a key audit matter due to the significance of the carrying amount and the inherent uncertainties in the application of management’s assumptions and judgements in the computation of the VIU.

Our procedures included, amongst others, the following:-

(a) Reviewed the 5-year cash flows forecast projections prepared by Management and approved by the Board of Directors;

(b) Discussed with Management on the basis and key assumption used in the cash flows forecast projections; and

(c) Performed sensitivity analysis on the key assumptions such as revenue growth rates, profit margin and discount rate.

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFASIA POLY HOLDINGS BERHAD (Incorporated in Malaysia)



Key Audit Matters (Cont’d)

We have determined the matter described below to be the key audit matter to be communicated in our report. (Cont’d)

Valuation of Land held for Property DevelopmentRefer to Notes 4.1(d), 4.12(b) and 12(a) to the financial statementsKey Audit Matter How our audit addressed the key audit matter

The Group’s land held for property development amounted to RM15,295,286 representing approximately 15% of the Group’s total assets.

We considered this as a key audit matter due to the significance of the carrying amount and the inherent uncertainties and significant judgement by the management involved in the valuation of this land held for property development to arrive at the net realisable value based on the valuation performed by a firm of professional valuer. The inherent uncertainties include among others, the appropriateness of the valuation method used by the professional value and the extent of adjustments by the valuer.

Our audit procedures included, amongst others, the following:-

(a) Assessed the net realisable value of the land as at the end of the reporting period based on the valuation carried out by a firm of professional valuers engaged by the management;

(b) Assessed the objectivity, independence and expertise of the third party expert

(c) Compared the estimated market value determined by the valuer against recent asking price for comparable properties around the vicinity;

(d) Assessed the basis of the valuation model, appropriateness of data used and assumptions applied in performing the valuation by the third party expert and by management; and

(e) Considered the adequacy of disclosures on the net realisable value assessment.

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 the Directors for the Financial Statements

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

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

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFASIA POLY HOLDINGS BERHAD (Incorporated in Malaysia) (Cont’d)



Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

• Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.




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 Malaysia PLT Choong Kok Keong 201906000005 (LLP0018817-LCA) & AF 1018 03461/11/2021 JChartered Accountants Chartered Accountant

19 June 2020

Kuala Lumpur




STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 2019

The Group The Company Note 2019 2018 2019 2018 RM RM RM RM

ASSETS NON-CURRENT ASSETS Investment in subsidiaries 5 - - 23,571,622 22,071,624Investment in an associate 6 1,972,408 - - -Investment in a joint venture 7 1,577,778 - 1,861,998 -Property, plant and equipment 8 37,175,261 36,696,514 - -Right-of-use assets 9 532,164 - - -Other investments 10 857,480 - 857,480 -Development costs 11 439,504 - - -Inventories 12 15,295,286 15,259,881 - - 57,849,881 51,956,395 26,291,100 22,071,624 CURRENT ASSETS Inventories 12 5,582,722 10,934,603 - -Trade receivables 13 14,310,824 13,879,607 - -Other receivables, deposits and prepayments 14 711,826 4,229,450 - -Amount owing by subsidiaries 15 - - 15,445,181 19,583,922Amount owing by a joint venture 16 11,619 - 2,642 -Amount owing by an associate 17 808,800 - - -Fixed deposits with licensed banks 18 15,483,493 20,112,027 15,483,493 20,112,027Cash and bank balances 9,719,900 6,891,265 2,799,895 2,610,774Current tax assets 34,560 658,271 34,560 34,560 46,663,744 56,705,223 33,765,771 42,341,283 TOTAL ASSETS 104,513,625 108,661,618 60,056,871 64,412,907 EQUITY AND LIABILITIES EQUITY Share capital 19 64,244,761 64,244,761 64,244,761 64,244,761Reserves 20 14,872,330 20,100,754 (4,307,943) (128,995) Equity attributable to owners of the company 79,117,091 84,345,515 59,936,818 64,115,766Non-controlling interests 112,846 74,374 - - TOTAL EQUITY 79,229,937 84,419,889 59,936,818 64,115,766

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



STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 2019 (Cont’d)


NON-CURRENT LIABILITIES Lease liabilities 21 344,652 - - -Hire purchase payables 22 - 91,211 - -Deferred tax liabilities 23 3,376,000 2,846,000 - - 3,720,652 2,937,211 - - CURRENT LIABILITIES Trade payables 24 11,342,080 13,195,765 - -Other payables and accruals 25 1,404,600 1,911,881 120,053 297,141Lease liabilities 21 177,617 - - -Hire purchase payables 22 - 45,898 - -Short-term borrowings 26 8,318,104 6,150,974 - -Current tax liabilities 320,635 - - - 21,563,036 21,304,518 120,053 297,141 TOTAL LIABILITIES 25,283,688 24,241,729 120,053 297,141 TOTAL EQUITY AND LIABILITIES 104,513,625 108,661,618 60,056,871 64,412,907





REVENUE 27 73,111,515 73,018,159 - 2,500,001 COST OF SALES (67,105,487) (68,956,074) - - GROSS PROFIT 6,006,028 4,062,085 - 2,500,001 OTHER INCOME 843,680 650,610 705,515 574,126 6,849,708 4,712,695 705,515 3,074,127 ADMINISTRATIVE EXPENSES (6,583,774) (5,416,351) (1,279,829) (735,708) OTHER EXPENSES (3,010,048) (2,118,035) (3,010,048) (208,000) FINANCE COSTS (754,225) (185,917) (459,573) - NET IMPAIRMENT LOSS ON FINANCIAL ASSETS 28 - - - (870,700) SHARE OF LOSS OF EQUITY ACCOUNTED ASSOCIATE (254,850) - - -

SHARE OF LOSS OF EQUITY ACCOUNTED JOINT VENTURE (274,306) - - - (LOSS)/PROFIT BEFORE TAXATION 29 (4,027,495) (3,007,608) (4,043,935) 1,259,719 INCOME TAX EXPENSE 30 (598,855) (49,924) (135,013) (76,924)

(LOSS)/PROFIT AFTER TAXATION (4,626,350) (3,057,532) (4,178,948) 1,182,795

OTHER COMPREHENSIVE (EXPENSES)/INCOME 31 Items that Will Not be Reclassified Subsequently to Profit or Loss Revaluation of property and equipment (637,000) - - -


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019




OTHER COMPREHENSIVE (EXPENSES)/INCOME (CONT’D) 31

Items that Will be Reclassified Subsequently to Profit or Loss Foreign currency translation differences - 138,111 - -Share of other comprehensive income of equity accounted associate 26,570 - - - TOTAL COMPREHENSIVE (EXPENSES)/ INCOME FOR THE FINANCIAL YEAR (5,236,780) (2,919,421) (4,178,948) 1,182,795 (LOSS)/PROFIT AFTER TAXATION ATTRIBUTABLE TO:- Owners of the Company (4,616,695) (2,854,943) (4,178,948) 1,182,795Non-controlling interests (9,655) (202,589) - -

(4,626,350) (3,057,532) (4,178,948) 1,182,795 TOTAL COMPREHENSIVE (EXPENSES)/ INCOME ATTRIBUTABLE TO:- Owners of the Company (5,227,125) (2,784,506) (4,178,948) 1,182,795Non-controlling interests (9,655) (134,915) - - (5,236,780) (2,919,421) (4,178,948) 1,182,795

LOSS PER SHARE (SEN)

Basic 32 (1.02) (0.66) Diluted 32 (0.80) (0.46)


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (Cont’d)



N

on-D

istri

buta

ble

D

istri

buta

ble

Fo

reig

n

Attri

buta

ble

Shar

e Ex

chan

ge

To

Ow

ners

No

n-

Sh

are

War

rant

O

ther

Re

valu

atio

n O

ptio

n Tr

ansl

atio

n Re

tain

ed

of th

e Co

ntro

lling

To

tal

No

te

Capi

tal

Rese

rve

Rese

rve

Rese

rve

Rese

rve

Rese

rve

Prof

its

Com

pany

In

tere

sts

Equi

tyTh

e G

roup

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

Balan

ce at

1.1.2

018

54

,918,0

00

12,01

8,393

(12

,018,3

93)

14,56

9,000

38

3,344

(71

,022)

9,646

,739

79,44

6,061

20

9,289

79

,655,3

50

Loss

after

taxa

tion f

or th

e fina

ncial

y

ear

-

- -

- -

- (2,

854,9

43)

(2,85

4,943

) (20

2,589

) (3,

057,5

32)

Othe

r com

preh

ensiv

e inc

ome f

or

the fi

nanc

ial ye

ar:

31

- Fo

reign

curre

ncy t

ransla

tion

dif

feren

ces

-

- -

- -

70,43

7 -

70,43

7 67

,674

138,1

11

Total

comp

rehen

sive i

ncom

e/(ex

pens

es)

for t

he fin

ancia

l yea

r

- -

- -

- 70

,437

(2,85

4,943

) (2,

784,5

06)

(134,9

15)

(2,91

9,421

)

Balan

ce ca

rried f

orwa

rd

54

,918,0

00

12,01

8,393

(12

,018,3

93)

14,56

9,000

38

3,344

(58

5) 6,7

91,79

6 76

,661,5

55

74,37

4 76

,735,9

29

Contr

ibutio

ns by

and d

istrib

ution

s to o

wners

o

f the C

ompa

ny:

Issua

nce o

f sha

re by

conv

ersion

of

ICPS

2,526

,761

- -

- -

- -

2,526

,761

- 2,5

26,76

1Ac

quisi

tion o

f a su

bsidi

ary

6,8

00,00

0 -

- -

- -

- 6,8

00,00

0 -

6,800

,000

Share

optio

n to e

mploy

ees

-

- -

- 56

3,265

-

- 56

3,265

-

563,2

65Di

viden

ds by

the C

ompa

ny

34

- -

- -

- -

(2,20

6,066

) (2,

206,0

66)

- (2,

206,0

66)

Canc

ellati

on of

SIS

- -

- -

(184,0

81)

- 18

4,081

-

- -

To

tal tr

ansa

ction

s with

owne

rs

9,326

,761

- -

- 37

9,184

-

(2,02

1,985

) 7,6

83,96

0 -

7,683

,960

Ba

lance

at 31

.12.20

18

64

,244,7

61

12,01

8,393

(12

,018,3

93)

14,56

9,000

76

2,528

(5

85)

4,769

,811

84,34

5,515

74

,374

84,41

9,889

The a

nnex

ed no

tes fo

rm an

integ

ral pa

rt of

these

finan

cial s

tatem

ents.

STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019



N

on-D

istri

buta

ble

D

istri

buta

ble

F

orei

gn

At

tribu

tabl

e

Sh

are

Exch

ange

To O

wne

rs

Non-

Shar

e W

arra

nt

Oth

er

Reva

luat

ion

Opt

ion

Tran

slat

ion

Reta

ined

of

the

Cont

rolli

ng

Tota

l

Note

Ca

pita

l Re

serv

e Re

serv

e Re

serv

e Re

serv

e Re

serv

e Pr

ofits

Co

mpa

ny

Inte

rest

s Eq

uity

The

Gro

up

RM

R

M

RM

RM

RM

RM

RM

RM

RM

RM

Balan

ce at

31.12

.2018

/1.1.2

019

64

,244,7

61

12,01

8,393

(12

,018,3

93)

14,56

9,000

76

2,528

(5

85)

4,769

,811

84,34

5,515

74

,374

84,41

9,889

Ini

tial a

pplic

ation

of M

FRS

16

44

- -

- -

- -

(1,88

4) (1,

884)

- (1,

884)

Balan

ce at

31

.12.20

18/1.

1.201

9 (res

tated

)

64,24

4,761

12

,018,3

93

(12,01

8,393

) 14

,569,0

00

762,5

28

(585

) 4,7

67,92

7 84

,343,6

31

74,37

4 84

,418,0

05

Loss

after

taxa

tion f

or th

e fina

ncial

year

-

- -

- -

- (4,

616,6

95)

(4,61

6,695

) (9,

655)

(4,62

6,350

)Ot

her c

ompr

ehen

sive e

xpen

ses f

or

the fi

nanc

ial ye

ar:

31

- R

emea

surem

ent o

f defe

rred t

ax on

revalu

ed pr

opert

y and

equip

ment

ari

sing f

rom ch

ange

in re

al pr

opert

y

gains

tax r

ate

-

- -

(637,0

00)

- -

- (6

37,00

0) -

(637,0

00)

Ot

her c

ompr

ehen

sive e

xpen

ses f

or th

e fi

nanc

ial ye

ar :

31

- S

hare

of oth

er co

mpreh

ensiv

e inc

ome

of

an eq

uity a

ccou

nted a

ssoc

iate

-

- -

- -

26,57

0 -

26,57

0 -

26,57

0

Total

comp

rehen

sive (

expe

nse)/

incom

e fo

r the

finan

cial y

ear

-

- -

(637,0

00)

- 26

,570

(4,61

6,695

) (5,

227,1

25)

(9,65

5) (5,

236,7

80)

Ba

lance

carrie

d for

ward

64,24

4,761

12

,018,3

93

(12,01

8,393

) 13

,932,0

00

762,5

28

25,98

5 15

1,232

79

,116,5

06

64,71

9 79

,181,2

25

The a

nnex

ed no

tes fo

rm an

integ

ral pa

rt of

these

finan

cial s

tatem

ents.

STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (Cont’d)



Non

-Dis

tribu

tabl

e

Dis

tribu

tabl

e

Fore

ign

At

tribu

tabl

e

Sh

are

Exch

ange

To O

wne

rs

Non-

Shar

e W

arra

nt

Oth

er

Reva

luat

ion

Opt

ion

Tran

slat

ion

Reta

ined

of

the

Cont

rolli

ng

Tota

l

Note

Ca

pita

l Re

serv

e Re

serv

e Re

serv

e Re

serv

e Re

serv

e Pr

ofits

Co

mpa

ny

Inte

rest

s Eq

uity

The

Gro

up

RM

R

M

RM

RM

RM

RM

RM

RM

RM

RM

Balan

ce br

ough

t forw

ard

64

,244,7

61

12,01

8,393

(12

,018,3

93)

13,93

2,000

76

2,528

25

,985

151,2

32

79,11

6,506

64

,719

79,18

1,225

Co

ntribu

tions

by an

d dist

ributi

ons

to ow

ners

of the

Com

pany

:

- Dee

med d

ispos

al of

a sub

sidiar

y

- -

- -

- 58

5 -

585

(74,37

4) (73

,789)

- Sha

res is

sued

by a

subs

idiary

to no

n-

contr

olling

inter

ests

-

- -

- -

- -

- 12

2,501

12

2,501

- Can

cella

tion o

f SIS

- -

- -

(762,5

28)

- 76

2,528

-

- -

To

tal tr

ansa

ction

s with

owne

rs

- -

- -

(762,5

28)

585

762,5

28

585

48,12

7 48

,712

Ba

lance

at 31

.12.20

19

64

,244,7

61

12,01

8,393

(12

,018,3

93)

13,93

2,000

-

26,57

0 91

3,760

79

,117,0

91

112,8

46

79,22

9,937

The a

nnex

ed no

tes fo

rm an

integ

ral pa

rt of

these

finan

cial s

tatem

ents.




N

on-

Dis

trib

utab

le

D

istr

ibut

able

Sha

re

War

rant

O

ther

S

hare

Op

tio

n

Ret

aine

d

Tota

l

No

te

Cap

ital

R

eser

ve

Res

erve

R

eser

ve

Pro

fits

Eq

uity

The

Co

mp

any

R

M

RM

R

M

RM

R

M

RM

Bala

nce

at 1

.1.2

018

54

,918

,000

12

,018

,393

(1

2,01

8,39

3)

383,

344

(52,

333)

55

,249

,011

Profi

t afte

r tax

atio

n/To

tal c

ompr

ehen

sive

inco

me

for

the

finan

cial

yea

r

- -

- -

1,18

2,79

5 1,

182,

795

Con

tribu

tions

by

and

dist

ribut

ions

to o

wne

rs o

f the

Com

pany

:-

Is

suan

ce o

f sha

re b

y co

nver

sion

of I

CPS

2,

526,

761

- -

- -

2,52

6,76

1Ac

quis

ition

of a

sub

sidi

ary

6,

800,

000

- -

- -

6,80

0,00

0Sh

are

optio

n to

em

ploy

ees

-

- -

563,

265

- 56

3,26

5Di

vide

nd b

y th

e C

ompa

ny

34

- -

- -

(2,2

06,0

66)

(2,2

06,0

66)

Can

cella

tion

of S

IS

-

- -

(184

,081

) 18

4,08

1 -

Tota

l tra

nsac

tions

with

ow

ners

9,32

6,76

1 -

- 37

9,18

4 (2

,021

,985

) 7,

683,

960

Bala

nce

at 3

1.12

.201

8/1.

1.20

19

64

,244

,761

12

,018

,393

(1

2,01

8,39

3)

762,

528

(891

,523

) 64

,115

,766

Loss

afte

r tax

atio

n/To

tal c

ompr

ehen

sive

exp

ense

s f

or th

e fin

anci

al y

ear

-

- -

- (4

,178

,948

) (4

,178

,948

)

C

ontri

butio

ns b

y an

d di

strib

utio

ns to

ow

ners

of t

he C

ompa

ny:-

Can

cella

tion

of S

IS

-

- -

(762

,528

) 76

2,52

8 -

Tota

l tra

nsac

tions

with

ow

ners

- -

- (7

62,5

28)

762,

528

-

Bala

nce

at 3

1.12

.201

9

64,2

44,7

61

12,0

18,3

93

(12,

018,

393)

-

(4,3

07,9

43)

59,9

36,8

18

The

anne

xed

note

s fo

rm a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.




The Group The Company 2019 2018 2019 2018 RM RM RM RM

CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES (Loss)/Profit before taxation (4,027,495) (3,007,608) (4,043,935) 1,259,719 Adjustments for:- Depreciation of property, plant and equipment 1,448,838 1,928,612 - -Depreciation of right-of-use assets 223,310 - - -Equipment written off 10,178 7,744 - -Impairment loss on amount owing by subsidiaries - - - 870,700Interest expense on lease liabilities 22,485 - - -Interest expense 271,520 185,917 - -Inventories written off 86,431 255,371 - -Inventories written down - 433,525 - -Loss on disposal of other investments 3,010,048 - 3,010,048 -Share-based payments - 563,265 - 208,000Share of net loss of equity accounted associate 254,850 - - -Share of net loss of equity accounted joint venture 274,306 - - -Unrealised loss on foreign exchange 134,531 268,765 - -Fair value gain on other investments (161,551) - (161,551) -Gain on deemed disposal of subsidiaries (52,869) - - -Gain on disposal of equipment (15,000) (1,000) - -Interest income (543,964) (576,740) (543,964) (574,126)Dividend income - - - (2,500,001)Reversal of inventories previously written down (89,147) - - - OPERATING PROFIT/(LOSS) BEFORE WORKING CAPITAL CHANGES/BALANCE CARRIED FORWARD 846,471 57,851 (1,739,402) (735,708)

Changes in Working Capital:- Decrease in trade and other receivables 6,166,249 4,336,533 - 133,848Decrease/(Increase) in inventories 5,354,597 (1,166,016) - -(Decrease)/Increase in trade and other payables (4,923,091) (5,019,643) (177,088) 116,761Increase in land held for property development (35,405) (340,286) - -Decrease in amount owing by subsidiaries - - 1,949,438 1,174,141Increase in amount owing by a joint venture (11,619) - (2,642) -Increase in amount owing by an associate (808,800) - - -

CASH FROM/(FOR) OPERATIONS/ BALANCE CARRIED FORWARD 6,588,402 (2,131,561) 30,306 689,042


STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019




BALANCE BROUGHT FORWARD 6,588,402 (2,131,561) 30,306 689,042Income tax paid 238,491 (999,252) (135,013) (30,060)Interest paid 35(b) (271,520) (185,917) - - NET CASH FROM/(FOR) OPERATING ACTIVITIES 6,555,373 (3,316,730) (104,707) 658,982 CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES Acquisition of equipment 35(a) (2,141,210) (1,491,552) - -Acquisition of a subsidiary - 1,073 - -Additional investments in existing subsidiaries - - (1,499,998) -Investment in an associates by a former subsidiary (2,822,500) - - -Additional investments in a joint venture (1,861,998) - (1,861,998) -Disposal of subsidiaries, net of cash and cash equivalents disposed of 33 (626) - - -Proceeds from disposal of equipment 15,000 1,001 - -Proceeds from disposal of other investments 11,118,254 - 11,118,254 -Purchase of other investments (14,824,231) - (12,634,928) -Interest received 543,964 576,740 543,964 574,126Increase in development expenditure - (813,052) - -Development costs paid (439,504) - - -Dividend received - - - 2,500,001 CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES (10,412,851) (1,725,790) (4,334,706) 3,074,127


STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019




CASH FLOWS FROM FINANCING ACTIVITIES

Net proceeds from issuance of ordinary shares 19 - 2,526,761 - 2,526,761Net repayment of hire purchase obligations 35(b) - (38,259) - -Net drawdown of short term borrowings 35(b) 2,167,130 2,581,051 - -Dividends paid 34 - (2,206,066) - (2,206,066)Net proceeds from issuance of ordinary shares in a subsidiary to non-controlling interest 122,501 - - -Repayment of lease liabilities 35(b) (232,052) - - - NET CASH FROM FINANCING ACTIVITIES 2,057,579 2,863,487 - 320,695 NET (DECREASE)/ INCREASE IN CASH AND CASH EQUIVALENTS (1,799,899) (2,179,033) (4,439,413) 4,053,804 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 27,003,292 29,334,595 22,722,801 18,668,997 EFFECTS OF FOREIGN EXCHANGE TRANSLATION - (152,270) - - CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 35(d) 25,203,393 27,003,292 18,283,388 22,722,801


STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (Cont’d)



1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Ace Market of Bursa Malaysia Securities Berhad. The registered office and principal place of business are as follows:-

Registered office : 308, Block A (3rd floor), Kelana Business Centre, No. 97, Jalan SS7/2, Kelana Jaya, 47301, Petaling Jaya, Selangor Darul Ehsan, Malaysia. Principal place of business : Lot 758, Jalan Haji Sirat, Mukim Kapar, 42100, Klang, Selangor Darul Ehsan, Malaysia.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of directors dated 19 June 2020.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. BASIS OF PREPARATION

The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”) and International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

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

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

MFRS 16 Leases

IC Interpretation 23 Uncertainty Over Income Tax Treatments

Amendments to MFRS 9: Prepayment Features with Negative Compensation

Amendments to MFRS 119: Plan Amendment, Curtailment or Settlement

Amendments to MFRS 128: Long-term Interests in Associates and Joint Ventures

Annual Improvements to MFRS Standards 2015 – 2017 Cycles

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:-

MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and replaced the previous guidance on lease accounting. 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 lease assets and the related lease obligations in the statement of financial position (with limited exceptions) as right-of-use assets and lease liabilities respectively. The right-of-use assets are subject to depreciation and the interest on lease liabilities are calculated using the effective interest method. The impacts on the financial statements of the Group upon its initial application of MFRS 16 are disclosed in Note 44 to the financial statements.

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019



3. BASIS OF PREPARATION

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 17 Insurance Contracts 1 January 2021

Amendments to MFRS 3: Definition of a Business 1 January 2020

Amendments to MFRS 9, MFRS 139 and MFRS 7: Interest Rate Benchmark Reform 1 January 2020

Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Deferred

Amendments to MFRS 101 and MFRS 108: Definition of Material 1 January 2020

Amendments to MFRS 101: Classification of Liabilities as Current or Non-current 1 January 2022

Amendments to References to the Conceptual Framework in MFRS Standards 1 January 2020

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.

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 Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment 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 property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amount of property, plant and equipment as at the reporting date is disclosed in Note 8 to the financial statements.

(b) Property under Revaluation

Certain property of the Group are reported at revalued amounts which are based on valuations performed by independent professional valuers by reference to the selling prices of recent transactions and asking prices of similar properties of nearby location and where necessary. Other factors such as model assumptions, market dislocations and unexpected correlations can also materially affect these estimates and the resulting valuations. The carrying amount of property measured at revaluation as at the reporting date is disclosed in Note 8 to the financial statements.

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (Cont’d)



4. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont’d)

Key Sources of Estimation Uncertainty (Cont’d)

(c) Impairment of Property, Plant and Equipment and Right-of-use Assets

The Group determines whether its property, plant and equipment and right-of-use assets are impaired by evaluating the extent to which the recoverable amount of the asset is less than its carrying amount. 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 property, plant and equipment and right-of-use assets as at the reporting date is disclosed in Notes 8 and 9 to the financial statements.

(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 12 to the financial statements.

(e) Impairment of Trade Receivables

The Group uses the simplified approach to estimate a lifetime expected credit loss allowance for all trade receivables. The Group develops the expected loss rates based on the payment profiles of past sales and the corresponding historical credit losses, and adjusts for qualitative and quantitative reasonable and supportable forward-looking information. If the expectation is different from the estimation, such difference will impact the carrying value of trade receivables. The carrying amount of trade receivables as at the reporting date is disclosed in Note 13 to the financial statements.

(f) Impairment of Non-Trade Receivables

The loss allowances for non-trade financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting appropriate inputs to the impairment calculation, based on the past payment trends, existing market conditions as well as forward-looking estimates at the end of each reporting period. The carrying amounts of other receivables, amounts owing by subsidiaries, amount owing by a joint venture and amount owing by an associate as at the reporting date are disclosed in Notes 14, 15, 16 and 17 to the financial statements.

(g) Impairment of Development Costs

The Group determines whether an item of its development costs is impaired by evaluating the extent to which the recoverable amount of the asset is less than its carrying amount. 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 significant affected by assumptions used and judgements made regarding estimates of future cash flows and discount rates. The carrying amount of development costs as at the reporting date is disclosed in Note 11 to the financial statements.





4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont’d)

Key Sources of Estimation Uncertainty (Cont’d)

(h) 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.

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) Lease terms

Some leases contain extension options exercisable by the Company before the end of the noncancellable contract period. In determining the lease term, management considers all facts and circumstances including the past practice and any cost that will be incurred to change the asset if an option to extend is not taken. An extension option is only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

(b) Share-based Payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity investments at the date at which they are granted. The estimating of the fair value requires determining the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. This also requires determining the most appropriate inputs to the valuation model including the expected life of the option volatility and dividend yield and making assumptions about them.

4.2 BASIS OF CONSOLIDATION

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

Subsidiaries are entities 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.





4.2 BASIS OF CONSOLIDATION (Cont’d)

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.

(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 9 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.





4.3 FUNCTIONAL AND FOREIGN CURRENCIES

(a) Functional and Presentation Currency

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

The consolidated financial statements are presented in Ringgit Malaysia (“RM”) which is the Company’s functional and presentation currency.

(b) Foreign Currency Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the exchange rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

(c) Foreign Operations

Assets and liabilities of foreign operations (including any goodwill and fair value adjustments arising on acquisition) 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.

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.

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.





4.4 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised in the statement of financial position when the Company 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 (other than trade receivables without significant financing component which are measured at transaction price as defined in MFRS 15 - Revenue from Contracts with Customers at inception). 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

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value (through profit or loss, or other comprehensive income), depending on the classification of the financial assets.

Debt Instruments

(i) Amortised Cost

The financial asset is held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest. Interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset. When the asset has subsequently become credit-impaired, the interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset.

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), excluding expected credit losses, through the expected life of the financial asset or a shorter period (where appropriate).

(ii) Fair Value through Other Comprehensive Income

The financial asset is held for both collecting contractual cash flows and selling the financial asset, where the asset’s cash flows represent solely payments of principal and interest. Movements in the carrying amount are taken through other comprehensive income and accumulated in the fair value reserve, except for the recognition of impairment, interest income and foreign exchange difference which are recognised directly in profit or loss. Interest income is calculated using the effective interest rate method.





4.4 FINANCIAL INSTRUMENTS (Cont’d)

(a) Financial Assets (Cont’d)

Debt Instruments (Cont’d)

(iii) Fair Value through Profit or Loss

All other financial assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss.

The Group reclassifies debt instruments when and only when its business model for managing those assets change.

Equity Instruments

All equity investments are subsequent measured at fair value with gains and losses recognised in profit or loss except where the Group has elected to present the subsequent changes in fair value in other comprehensive income and accumulated in the fair value reserve at initial recognition.

The designation at fair value through other comprehensive income is not permitted if the equity investment is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise.

Dividend income from this category of financial assets is recognised in profit or loss when the Group’s right to receive payment is established unless the dividends clearly represent a recovery of part of the cost of the equity investments.

(b) Financial Liabilities

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

Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. The changes in fair value of these financial liabilities are recognised in profit or loss.

(ii) Other Financial Liabilities

Other financial liabilities are 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 (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 liability or a shorter period (where appropriate).





4.4 FINANCIAL INSTRUMENTS (Cont’d)

(c) Equity Instruments

Equity instruments classified as equity are measured initially 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) Irredeemable Convertible Preference Shares

Irredeemable convertible preference shares (“ICPS”) are classified as equity in accordance with the substance of the contractual arrangement of the instruments. Dividends on ICPS are recognised as distributions within equity.

(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 when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition of a financial asset measured at amortised cost, the difference between the carrying amount of the asset and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of a debt instrument classified as fair value through other comprehensive income, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity to profit or loss. In contrast, there is no subsequent reclassification of the fair value reserve to profit or loss following the derecognition of an equity investment.

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

(e) Warrants

The Group issued Warrants 2015/2020 and Warrants 2017/2022 and these are not recognised in the financial statements. Each warrant is convertible into one new ordinary share of RM0.10 each at the adjusted exercise price of RM0.10 per share respectively during the exercise period and will only be recognised as equity instruments upon conversion.

(f) Financial Guarantee Contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due 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 amount of the credit loss determined in accordance with the expected credit loss model and the amount initially recognised less cumulative amortisation.





4.5 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.

4.6 INVESTMENT IN ASSOCIATES

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

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 2019. 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 investment 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.

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. The interest in the associate is the carrying amount of the investment in the associate determined using the equity method together with any long-term interests that, in substance, form part of the Group’s net investment in the associate.

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 9. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that associate to profit or loss when the equity method is discontinued.

4.7 PROPERTY, PLANT AND EQUIPMENT

All items of property, 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 property, plant and equipment, other than freehold land, are stated at cost less accumulated depreciation and any impairment losses.

Freehold land is stated at valuation less impairment losses recognised after the date of the revaluation.





4.7 PROPERTY, PLANT AND EQUIPMENT (Cont’d)

Freehold land are revalued periodically, at least once in every five years. Surpluses arising from the revaluation are recognised in other comprehensive income and accumulated in equity under the revaluation reserve to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are recognised in profit or loss.

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 equipment are recognised in profit or loss as incurred.

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

Factory building 2%Plant and machinery 4 - 40%Fire protection system 10%Office equipment, furniture and fittings 10 - 20%Laboratory and factory equipment 10%Motor vehicles 20%Renovation 10%

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 property, plant and equipment. Any changes are accounted for as a change in estimate.

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

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. 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.

4.8 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.





4.8 RESEARCH AND DEVELOPMENT EXPENDITURE (Cont’d)

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the subsequent period.

The development expenditure is amortised on a straight-line method over a period of 5 years when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its recoverable amount.

The amortisation method, useful life and residual value are reviewed, and adjusted if appropriate, at the end of each reporting period.

4.9 LEASES

The Group assesses whether a contract is or contains a lease, at the inception of the contract. The Group recognises a right-of-use asset and corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for low-value assets and short-term leases with 12 months or less. For these leases, the Group recognises the lease payments as an operating expense on a straight-line method over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use assets and the associated lease liabilities are presented as a separate line item in the statements of financial position.

The right-of-use asset is initially measured at cost. Cost includes the initial amount of the corresponding lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, less any incentive received.

The right-of-use asset is subsequently measured at cost less accumulated depreciation and any impairment losses, and adjustment for any remeasurement of the lease liability. The depreciation starts from the commencement date of the lease. If the lease transfers ownership of the underlying asset to the Group or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of the right-of-use assets are determined on the same basis as those property, plant and equipment.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured when there is a change in the future lease payments (other than lease modification that is not accounted for as a separate lease) with the corresponding adjustment is made to the carrying amount of the right-of-use asset or is recognised in profit or loss if the carrying amount has been reduced to zero.





4.9 LEASES (Cont’d)

Accounting Policies Applied Until 31 December 2018

(a) Finance Lease

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.

(b) Operating Lease

All lease 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 and of the Company.

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.

4.10 INVENTORIES

(a) Land Held for Property Development

Land held for property development consists of land on which no significant development work has been undertaken other than earthwork, infrastructure work and professional fees incurred to put the land ready for development or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current asset and is stated at the lower of cost and net realisable value.

Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

Net realised value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses.

Land held for property development is transferred to property development costs (under current assets) when development activities have commenced and where the development activities can be completed within the Group’s normal operating cycle.

(b) Trading Goods

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 necessary to make the sale.





4.11 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.

4.12 IMPAIRMENT

(a) Impairment of Financial Assets

The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised cost and trade receivables.

The expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.

The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group always recognises lifetime expected credit losses for trade receivables using the simplified approach. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience and are adjusted for looking-forward information (including time value of money where appropriate).

For all other financial instruments, the Group recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.

The Group recognises an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at fair value through other comprehensive income, for which the loss allowance is recognised in other comprehensive income and accumulated in the fair value reserve, and does not reduce the carrying amount of the financial asset in the statement of financial position.

(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 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 an asset is the higher of the asset’s fair value less costs to sell and its value-in-use, which is measured by reference to discounted future cash flows using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where it is not possible to estimate the recoverable amount of an individual asset, the Group determines the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised in profit or loss.

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.





4.13 EMPLOYEE BENEFITS

(a) Short-term Benefits

Wages, salaries, paid annual leave and bonuses are measured on an undiscounted basis and are recognised in profit or loss 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 in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

(c) Share-based Payment Transactions

The Group operates an equity-settled share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments of the Company (known as “share options”).

At grant date, the fair value of the share options is recognised as an expense on a straight-line method over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding credit to employee share option reserve in equity. The amount recognised as an expense is adjusted to reflect the actual number of the share options that are expected to vest. Service and non-market performance conditions attached to the transaction are not taken into account in determining the fair value.

In the Company’s separate financial statements, the grant of the share options to the subsidiaries’ employees is not recognised as an expense. Instead, the fair value of the share options measured at the grant date is accounted for as an increase to the investment in subsidiary undertaking with a corresponding credit to the employee share option reserve.

Upon expiry of the share option, the employee share option reserve is transferred to retained profits.

When the share options are exercised, the employee share option reserve is transferred to share capital if new ordinary shares are issued.

4.14 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.





4.14 INCOME TAXES (Cont’d)

(b) Deferred Tax (Cont’d)

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 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.

4.16 EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share is calculated by dividing the consolidated profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period, adjusted for own shares held.

Diluted earnings per ordinary share is determined by adjusting the consolidated profit or loss attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding, for the effects of all dilutive potential ordinary shares.

4.17 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.





4.17 FAIR VALUE MEASUREMENTS (Cont’d)

For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:-

Level 1 : Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date;

Level 2 : Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 : Inputs are unobservable inputs for the asset or liability.

The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.

4.18 BORROWING COSTS

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

4.19 JOINT ARRANGEMENT

Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements returns.

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint operations and joint ventures.

(a) Joint Operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, the obligations for the liabilities, relating to the arrangement. The Group accounts for each of its interest in the joint operations the assets, liabilities, revenue and expenses (including its share of those held or incurred jointly with the other investors) in accordance with the applicable accounting standards.

(b) Joint Ventures

A joint venture is a joint arrangement whereby the Group has rights only to the net assets of the arrangement.

Investments in joint ventures 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 a joint venture is accounted for in the consolidated financial statements using the equity

method, based on the financial statements of the joint venture made up to 31 December 2019. The Group’s share of the post acquisition profits and other comprehensive income of the joint venture 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 joint control commences up to the effective date when the investment ceases to be a joint venture or when the investment is classified as held for sale. The Group’s investment in the joint venture 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.





4.19 JOINT ARRANGEMENT (Cont’d)

(b) Joint Ventures (Cont’d)

When the Group’s share of losses exceeds its interest in a joint venture, 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. The interest in the joint venture is the carrying amount of the investment in the joint venture determined using the equity method together with any long-term interests that, in substance, form part of the Group’s net investment in the joint venture.

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

The Group discontinues the use of the equity method from the date when the investment ceases to be a joint venture or when the investment is classified as held for sale. When the Group retains an interest in the former joint venture and the retained interest 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 9. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that joint venture to profit or loss when the equity method is discontinued. However, the Group will continue to use the equity method when an investment in a joint venture becomes an investment in an associate. Under such change in ownership interest, the retained investment is not remeasured to fair value but a proportionate share of the amounts previously recognised in other comprehensive income of the joint venture will be reclassified to profit or loss where appropriate. All dilution gains or losses arising in investments in joint ventures are recognised in profit or loss.

4.20 REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue from contracts with customers is recognised by reference to each distinct performance obligation in the contract with customer. Revenue from contracts with customers is measured at its transaction price, being the amount of consideration which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, net of sales and service tax, returns, rebates and discounts.

The Group recognises revenue when (or as) it transfers control over a product or service to customer. An asset is transferred when (or as) the customer obtains control of that asset.

The Group transfers control of a good or service at a point in time unless one of the following overtime criteria is met:-

• The customer simultaneously receives and consumes the benefits provided as the Group performs.

• The Group’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced.

• The Group’s performance does not create an asset with an alternative use and the Group has an enforceable right to payment for performance completed todate.

Sale of Cast Acrylic Products/Chemical Related Material

Revenue from sale of cast acrylic/chemical related material is recognised when the Group has transferred control of the goods to the customer, being when the goods have been delivered to the customer and upon its acceptance. Following delivery, the customer has full discretion over the manner of distribution and price to sell the goods, and bears the risks of obsolescence and loss in relation to the goods.

A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.





4.21 REVENUE FROM OTHER SOURCES AND OTHER OPERATING INCOME

(a) Dividend Income

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

(b) Interest Income

Interest income is recognised on an accrual basis using the effective interest method.

5. INVESTMENT IN SUBSIDIARIES

The Company 2019 2018 RM RM

Unquoted shares in Malaysia, at cost 23,571,622 22,071,624

The details of the subsidiaries are as follows:-

Principal Place of Business/Country of

Percentage of Issued Share Capital

Held by Parent

Name of Subsidiaries Incorporation 2019 2018 Principal Activities

% %

Subsidiaries of the Company

Asia Poly Industrial Sdn. Bhd. Malaysia 100 100 Manufacture and sale of cast acrylic products

High Reserve Land Sdn. Bhd. (“HRL”) Malaysia 100 100 Land or property development and construction

Asia Poly Green Energy Sdn. Bhd. (“APGE”)

Malaysia 100 100 Investment holding

Asia Poly Food and Beverage Sdn. Bhd. (“APFB”)

Malaysia - 100 Dormant

AP Waste Management Sdn. Bhd. Malaysia 100 100 Dormant

Asia Poly Renewable Energy Sdn. Bhd. Malaysia 100 100 Dormant

Asia Poly Distribution Sdn. Bhd. Malaysia 100 100 Dormant

Subsidiary at Asia Poly Green Energy Sdn. Bhd.

PT Rimba Tripa (“PTRT”) * Indonesia - 51 Generation and sale of power and electricity

Asia Poly Bio Gas Sdn. Bhd. (“APBG”) ^ Malaysia 51 - Investment in renewable energy business and related activities




5. INVESTMENT IN SUBSIDIARIES (Cont’d)

The details of the subsidiaries are as follows (Cont’d):-

Principal Place of Business/Country of

Percentage of Issued Share Capital

Held by Parent

Name of Subsidiaries Incorporation 2019 2018 Principal Activities

% %

Subsidiary at High Reserve Land Sdn. Bhd.

Asia Poly Hydro (Pahang) Sdn. Bhd. (formerly known as Harta

Glamor Sdn. Bhd.) (“APHP”) # ^

Malaysia 50 - Dealing with renewable energy - hydro power

* The subsidiary was audited by member firms of Crowe Global of which Crowe Malaysia PLT is a member.

# Although the Group only owns 50% of the ownership in Asia Poly Hydro (Pahang) Sdn. Bhd. (formerly known as Harta Glamor Sdn. Bhd.) (“APHP”), the Directors have determined that the Group has controls over the Board of APHP.

^ These subsidiaries have yet to commence their business operations during the financial year.

(a) During the financial year,

(i) PTRT had issued additional 750,000 ordinary shares and APGE had subscribed for 362,500 ordinary shares for a total cash consideration of RM2,154,500. These have resulted in PTRT ceasing to be a subsidiary and becoming a 49% owned associate of the Group. The details of the deemed disposal are disclosed in Note 33(a) to the financial statements.

(ii) the Company subscribed for an additional 499,998 ordinary shares issued by its subsidiary, APWM, for a cash consideration of RM499,998.

(iii) the Company subscribed for an additional 999,998 ordinary shares issued by its subsidiary, APGE, for a cash consideration of RM999,998.

(iv) HRL had incorporated a new subsidiary, APHP, and subscribed for 1 ordinary share for a cash consideration of RM1, representing 50% equity interest in APHP.

(v) APFB had issued additional 1,999,998 ordinary shares and the Company had subscribed for 979,998 ordinary shares for a total cash consideration of RM979,998. These have resulted in APFB ceasing to be a subsidiary and becoming a 49% owned joint venture of the Group. The details of the deemed disposal are disclosed in Note 33(b) to the financial statements.

(vi) APGE has incorporated a subsidiary, APBG, and subscribed for 25,500 ordinary shares for a cash consideration of RM25,500, representing 51% equity interest in APBG. Subsequently, APBG had issued additional 200,000 ordinary shares and APGE had further subscribed for 102,500 ordinary shares for a total cash consideration of RM102,500, maintaining its 51% equity interest in APBG.




5. INVESTMENT IN SUBSIDIARIES (Cont’d)

(b) The non-controlling interests at the end of the reporting period comprise the following:-

Effective Equity Interest The Group2019 2018 2019 2018

% % RM RM

Asia Poly Bio Gas Sdn. Bhd. 49 - 118,584 -

Asia Poly Hydro (Pahang)Sdn. Bhd. (formerly known as Harta Glamor Sdn. Bhd.)

50 - (5,738) -

PT Rimba Tripa - 49 - 74,374

112,846 74,374

Summarised financial information of non-controlling interests has not been presented as the non-controlling interests of the subsidiaries are not material for the Group.

6. INVESTMENT IN AN ASSOCIATE

The Group 2019 2018 RM RM

Unquoted shares outside Malaysia, at cost 1,094,786 -Share of post acquisition loss (254,850) -Share of post acquisition reserve 26,570 - 866,506 -Capital contribution, at cost 1,105,902 - 1,972,408 -

The details of the associate is as follows:-

Principal Place of Business/Country of Effective Equity Interest

Name of Associate Incorporation 2019 2018 Principal Activities% %

PT Rimba Tripa * Indonesia 49 - Generation and sale of power and electricity

* The associate was audited by member firms of Crowe Global of which Crowe Malaysia PLT is a member.

Capital contributions represent unsecured, interest-free non-trade advances given to associate. The settlement of these advances is neither planned nor unlikely to occur in the foreseeable future as it is the Group’s intention to treat them as a long-term source of capital to the associate. As these advances are, in substance, a part of the Group’s net investment in those associate, they are stated at cost less impairment losses, if any.




6. INVESTMENT IN AN ASSOCIATE (Cont’d)

The summarised financial information for the associate that is material to the Group is as follows:-

PT Rimba Tripa 2019 RM

At 31 DecemberNon-current assets 4,431,748Current assets 442,425Current liabilities (3,105,793) Net assets 1,768,380 12-month Period Ended 31 DecemberLoss for the financial year (520,103)Other comprehensive income 54,225Total comprehensive expense (465,878) Group’s share of loss for the financial year (254,850)Group’s share of other comprehensive income 26,570 Reconciliation of Net Assets to Carrying AmountGroup’s share of net assets/ Carrying amount of the Group’s interests in this associate 866,506

7. INVESTMENT IN A JOINT VENTURE


Unquoted shares in Malaysia, at cost 1,852,084 - 1,861,998 -Share at post acquisition loss (274,306) - - - 1,577,778 - 1,861,998 -

The details of the joint venture is as follows:-

Principal Place of Business/Country of Effective Equity Interest

Name of Joint Venture Incorporation 2019 2018 Principal Activities% %

Asia Poly Food and Beverage Sdn. Bhd. ^

Malaysia 49 - Operator of two restaurant outlets and other

related activities

^ The joint venture was audited by other firms of chartered accountants.




7. INVESTMENT IN A JOINT VENTURE (Cont’d)

The Group entered into a Shareholders’ Agreement with Uncle Don’s Holdings Sdn. Bhd. (“UDHSB”) whereby the Group and UDHSB participated in a joint venture for the purpose of working together in the food and beverage industry more particularly in establishing new Uncle Don’s outlets.

Although the Group holds less than 50% of the voting power in Asia Poly Food and Beverage Sdn. Bhd., the Group has determined that it does not have sole control over the investee considering that strategic and financial decision of the relevant activities of the investee require unanimous consent by all shareholders.

Subsequent to being a joint venture, APFB had further issued additional 1,740,000 ordinary shares and the Company had further subscribed for 882,000 ordinary shares for a total cash consideration of RM882,000, maintaining its 49% equity interest in APFB.

The summarised financial information for the joint venture that is material to the Group is as follows:-

Asia Poly Food & Beverage Sdn. Bhd. 2019 RM

At 31 DecemberNon-current assets 4,068,680Current assets 2,313,722Non-current liabilities (396,274)Current liabilities (2,766,174) Net assets 3,219,954 12-month Period Ended 31 DecemberLoss for the financial year (559,809) Group’s share of loss for the financial year (274,306) Reconciliation of Net Assets to Carrying AmountGroup’s share of net assets/ Carrying amount of the Group’s interests in this joint venture 1,577,778




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8. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

At At Accumulated Carrying Cost Valuation Depreciation Amounts The Group RM RM RM RM

2019

Freehold land - 20,000,000 - 20,000,000Factory building 7,941,147 - (2,170,122) 5,771,025Plant and machinery 18,226,145 - (8,129,526) 10,096,619Fire protection system 350,350 - (349,302) 1,048Office equipment, furniture and fittings 2,916,876 - (2,326,382) 590,494Laboratory and factory equipment 3,811,777 - (3,116,134) 695,643Motor vehicles 336,081 - (331,993) 4,088Renovation 19,811 - (3,467) 16,344 33,602,187 20,000,000 (16,426,926) 37,175,261

2018

Freehold land - 20,000,000 - 20,000,000Factory building 7,933,847 - (2,011,337) 5,922,510Plant and machinery 16,794,829 - (7,533,856) 9,260,973Fire protection system 357,281 - (353,002) 4,279Office equipment, furniture and fittings 2,951,817 - (2,524,176) 427,641Laboratory and factory equipment 3,799,104 - (2,913,923) 885,181Motor vehicles 609,835 - (432,230) 177,605Renovation 19,811 - (1,486) 18,325 32,466,524 20,000,000 (15,770,010) 36,696,514

(a) In the last financial year, included in the property, plant and equipment of the Group were motor vehicles with a total carrying amount of RM172,378, which were acquired under hire purchase terms. These leased assets had been pledged as security for the hire purchase payables of the Group as disclosed in Note 22 to the financial statements.




8. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

(b) On 28 July 2016, the Group’s freehold land were revalued by independent professional valuers. The surpluses arising from the revaluations, net of deferred taxation, have been credited to other comprehensive income and accumulated in equity under the revaluation reserve.

As of 31 December 2019, the directors assessed the fair value of the freehold land based on the current prices in the market of properties of similar condition and location. The directors are of the view that the carrying amount of the freehold land approximates its current fair value.

The details of the Group’s property carried at fair value are analysed as follows:-

Level 1 Level 2 Level 3 Total The Group RM RM RM RM

2019 Freehold land - 20,000,000 - 20,000,000

2018 Freehold land - 20,000,000 - 20,000,000

The level 2 fair values have been determined based on the market comparison approach that reflects recent transaction prices for similar properties. The most significant input into this valuation approach is the price per square foot of comparable properties. There has been no change to the valuation technique during the financial year.

There were no transfers between level 1, level 2 and level 3 during the financial year.

The fair value measurements of the freehold land are based on the highest and best use which does not differ from their actual use.

(c) If the revalued property was measured using the cost model, the carrying amount would be as follows:-


Freehold land 4,520,000 4,520,000




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9. RIGHT-OF-USE ASSETS (Cont’d)

(a) The Group leases office building, motor vehicles, house and shop lot of which the leasing activities are summarised below:-

(i) Office building The Group leases a office building which the Group has entered into a non-cancellable operating lease agreement for use of office building. The lease is for a period of two (2) years operating lease agreements with an option to renew the lease for a further two (2) years term at a new rental rate to be based on the prevailing market rate mutually agreed after that date.

(ii) Motor vehicles The Group has leased its motor vehicles under hire purchase arrangements. The leases are secured by the leased assets. The Group has an option to purchase the asset at the expiry of the lease period at an insignificant amount.

(iii) House The Group leases a house which the Group has entered into a non-cancellable operating lease agreement for use of residential. The lease is for a period of two (2) years operating lease agreements with an option to renew the lease for a further two (2) years term at a new rental rate to be based on the prevailing market rate mutually agreed after that date.

(iv) Shop lot The Group leases a shop lot which the Group has entered into a non-cancellable operating lease agreement for use of commercial. The lease is for a period of two (2) years operating lease agreements with an option to renew the lease for a further one (1) year term at a new rental rate to be based on the prevailing market rate mutually agreed after that date.

10. OTHER INVESTMENTS

The Group/ The Company 2019 2018 RM RM

Quoted shares, at fair value 857,480 -

11. DEVELOPMENT COSTS


Cost:- At 1 January - -Additions during the financial year 439,504 - At 31 December 439,504 -

The development costs consist of direct and related costs in the process of development of the Group’s hydropower plant and bio gas plant.




12. INVENTORIES


Non-current Land held for development (Note 12(a)) 15,295,286 15,259,881 Current Trading goods (Note 12(b)) 5,582,722 10,934,603 20,878,008 26,194,484

(a) Land held for development


At 1 January 15,259,881 - Acquisition of a subsidiary: - Freehold land - 14,738,000- Property development costs - 181,595 Additions during the financial year: - Property development costs 35,405 340,286 At 31 December 15,295,286 15,259,881

(b) Trading goods


At cost:- Raw materials 2,726,136 3,205,299Work-in-progress 229,178 55,397Finished goods 2,627,408 7,673,907 5,582,722 10,934,603 Recognised in profit or loss:- Inventories recognised as cost of sales 67,105,487 68,956,074 Amount written down to net realisable value - 433,525Reversal of inventories previously written down (89,147) -

In previous financial year, management assessed its inventories for impairment and wrote down certain raw materials which aged more than one year based on the Group’s policy. In 2019, the write-down was reversed due to its raw material being used for production.




13. TRADE RECEIVABLES


Trade receivables 14,310,824 13,913,477 Less: Allowance for impairment losses - (33,870) 14,310,824 13,879,607

Allowance for impairment losses:- At 1 January 33,870 33,870Written off during the financial year (33,870) - At 31 December - 33,870

The Group’s normal trade credit terms range from 30 to 120 days (2018 - 30 to 120 days).

14. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

The Group 2019 2018 Note RM RM

Other receivables:- Third parties - 179,193Advances to suppliers (i) 3,814 191,384Goods and services tax recoverable 287,667 746,275 291,481 1,116,852Deposits 250,092 159,400Prepayments (ii) 170,253 2,953,198 711,826 4,229,450

(i) The advances to suppliers are unsecured and interest-free. The amount owing will be offset against future purchases from the suppliers.

(ii) In the last financial year, included in prepayments of the Group were expenditures incurred of RM2,917,820 for the development of a hydro electric power plant.




15. AMOUNT OWING BY SUBSIDIARIES

The Company 2019 2018 RM RM

Current Non-trade balances 16,305,436 20,454,622Allowance for impairment losses (860,255) (870,700) 15,445,181 19,583,922

Allowance for impairment losses:- At 1 January 870,700 -Addition during the financial year - 870,700Transfer to amount owing by a joint venture (Note 16) (10,445) - At 31 December 860,255 870,700

The non-trade balances represent unsecured payments made on behalf. The amounts owing are interest-free, repayable on demand and are to be settled in cash.

16. AMOUNT OWING BY A JOINT VENTURE


Current Non-trade balances 22,064 - 13,087 -Allowance for impairment losses (10,445) - (10,445) - 11,619 - 2,642 -

Allowance for impairment losses:- At 1 January - - - -Transfer from amount owing by a subsidiary 10,445 - 10,445 - At 31 December 10,445 - 10,445 -

The non-trade balances represent unsecured payments made on behalf. The amounts owing are interest-free, repayable on demand and are to be settled in cash.

17. AMOUNT OWING BY AN ASSOCIATE

The non-trade balance represents unsecured payments made on behalf. The amounts owing are interest-free, repayable on demand and are to be settled in cash.





18. FIXED DEPOSITS WITH LICENSED BANKS The fixed deposits with licensed banks of the Group and of the Company at the end of the reporting period bore effective interest rates ranging from 2.80% to 3.45% (2018 - 3.05% to 3.45%) per annum. The fixed deposits have maturity periods of 30 (2018 - 30) days for the Group and the Company.

19. SHARE CAPITAL

The Group/The Company 2019 2018 2019 2018 Number Of Shares RM RM

Issued and Fully Paid-Up Ordinary Shares At 1 January 445,413,600 333,559,880 52,022,658 38,240,006Conversion of irredeemable convertible preference shares to ordinary shares 12,305,150 69,826,526 1,230,515 6,982,652New shares issuance for acquisition of a subsidiary - 42,027,194 - 6,800,000 At 31 December 457,718,750 445,413,600 53,253,173 52,022,658 Irredeemable Convertible Preference Shares At 1 January 244,442,053 333,559,880 12,222,103 16,677,994Conversion of irredeemable convertible preference shares to ordinary shares (24,610,300) (89,117,827) (1,230,515) (4,455,891)

At 31 December 219,831,753 244,442,053 10,991,588 12,222,103 Total 677,550,503 689,855,653 64,244,761 64,244,761

(a) The holders of ordinary shares are entitled to receive dividends as and when declared by the Company, and are entitled to one vote per ordinary share at meetings of the Company. The ordinary shares have no par value.

(b) The irredeemable convertible preference shares are equity instruments and have no par value.



19. SHARE CAPITAL (Cont’d)

In the financial year 2017, the Company issued 333,559,880 ICPS (up to 390,023,853 ICPS) at a nominal value of RM0.05 each at an issue price of RM0.05 each.

The salient terms of ICPS are as follows:-

(a) Dividend rate No dividend shall be paid during the tenure of the ICPS, unless otherwise declared by the Company.The Company shall have the discretion to decide whether to declare any dividend as well as the quantum of such dividend. Dividend declared and payable annually in arrears are non-cumulative and shall be in priority over the ordinary shares of the Company.

(b) Tenure Five (5) years commencing from and inclusive of the date of issue of the ICPS.

(c) Maturity date The day immediately preceding the fifth (5th) anniversary from the date of issue of the ICPS. If such a day falls on a non-market day, then the maturity date would be the preceding market day.

(d) Redemption No redeemable for cash

(e) Conversion right • Each ICPS carries the entitlement to be converted into new ordinary share of the Company (“Asia Poly Shares”) at the Conversion Ratio through the surrender of the ICPS.

• No adjustment to the Conversion Price shall be made for any declared and unpaid dividends on the ICPS surrendered for conversion.

• If the conversion results in a fractional entitlement to ordinary shares of the Company, such fractional entitlement shall be disregarded and no refund or credit, whether in the form of the ICPS, cash or otherwise, shall be given in respect of the disregarded fractional entitlement.

(f) Conversion period • The ICPS may be converted at any time within 5 years commencing on and including the date of issue of the ICPS up to and including the maturity date, as determined by the Conversion Ratio and Conversion Price.

• Any remaining ICPS that are not converted by the maturity date shall be automatically converted into new Asia Poly Shares at the conversion ratio of 2 ICPS for 1 Asia Poly Share.

(g) Conversion ratio and conversion price

The Conversion Ratio and Conversion Price have been fixed at either 2 ICPS to be converted into 1 new Asia Poly Share or a combination of 1 ICPS and RM0.05 in cash for 1 new Asia Poly Share.

20. RESERVES

The Group The Company 2019 2018 2019 2018 Note RM RM RM RM

Warrant reserve (a) 12,018,393 12,018,393 12,018,393 12,018,393Other reserve (a) (12,018,393) (12,018,393) (12,018,393) (12,018,393)Share option reserve (b) - 762,528 - 762,528Revaluation reserve (c) 13,932,000 14,569,000 - -Foreign exchange translation reserve (d) 26,570 (585) - -Retained profits/(Accumulated losses) 913,760 4,769,811 (4,307,943) (891,523)

14,872,330 20,100,754 (4,307,943) (128,995)




20. RESERVES (Cont’d)

(a) Warrant Reserve and Other Reserve

The warrant reserve relates to the portion of proceeds from the rights shares issue ascribed to the attached warrants. As and when the warrants are exercised, the related balance in the warrant reserve will be transferred to the share capital account. Each warrant carries the right to subscribe for one (1) new ordinary share in the capital of the Company at an exercise price of RM0.10. The warrants will expire on 13 December 2020 and 12 December 2022 respectively. At the expiry of the warrants, the balance in the warrant reserve will be transferred to retained profits. The other reserve is a reserve created to preserve the par value of ordinary shares.

(b) Share Option Reserve

The share option reserve represents the equity-settled share options granted to employees. The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of the share options.

The Share Issuance Scheme of the Company (“SIS”) is governed by the By-Laws and was approved by shareholders at an Extraordinary General Meeting on 28 October 2015. The SIS is to be in force for a period of 4 years from the effective date.

The maximum number of the Company’s share under SIS should not exceed 30% of the issued and paid-up share capital of the Company at any point of time during the duration of the scheme.

The salient features of the SIS are as follows:-

(a) The employee eligible to participate in the SIS must have attained the age of 18 years, is not an undischarged bankrupt or subject to any bankruptcy proceedings, is an employee in a company within the Group.

(b) An offer shall be accepted by an eligible employee within the offer period by written notice to the Group. The offer shall automatically lapse upon the expiry of the offer period and be null and void and be of no further force and effect.

(c) The offer shall not be transferred, assigned or otherwise disposed of by the grantee upon granting to them except in the event of death of the grantee.

(d) The option granted to a grantee under the SIS is exercisable only by that grantee during his lifetime and whilst he is in the employment of the Group and within the option period.

(e) Subject to any adjustments in accordance with the By-Laws and pursuant to the listing requirements, the option price shall be fixed based on the higher of the following:

(i) A price to be determined by the Board based on the weighted average market price of the shares for five market days immediately preceding the date of offer with a discount of not more than 10% or such other percentage of discount as may be permitted by Bursa Securities or any other relevant authorities from time to time during the duration of the scheme; and

(ii) The par value of the shares.

(f) There are no performance targets which the eligible employees must achieve, but the options will be vested firstly upon the completion of the Proposed Right Issue of ICPS with warrants and secondly on five tranches over four years.





(b) Share Option Reserve (Cont’d)

The salient features of the SIS are as follows (Cont’d):-

(g) The shares to be allotted and issued upon exercise of any options granted will rank pari passu in all respects with the existing issued and paid-up shares of the Company, save and except that the new shares allotted and issued will not be entitled to any dividends, rights, allotments or other distributions which may be declared, made or paid, the entitlement date of which precedes the date of allotment and issuance of such new shares.

(h) The options offered to an eligible person may subject to the compliance or fulfilment by the eligible person of the vesting conditions, be vested in the eligible person in such number of tranche or tranches and in such number of options in each tranche as shall be determined by the option committee.

The option prices and the details in the movement of the options granted are as follows:-

Number of Options over Ordinary Shares

Date of OfferExercise

Price

Remaining Contractual Life

of Options

At1 January

2019 Granted Forfeited Terminated

At 31 December

2019‘000 ‘000 ‘000 ‘000 ‘000

28 March 2017 RM0.165 1.25 years 7,308 3,850 (490) (10,668) -

Number of Options over Ordinary Shares

Date of OfferExercise

Price

Remaining Contractual Life

of Options

At1 January

2018 Granted Exercised Forfeited

At 31 December

2018‘000 ‘000 ‘000 ‘000 ‘000

28 March 2017 RM0.165 2.25 years 3,686 3,782 - (160) 7,308

No person to whom the share option has been granted above has any right to participate by virtue of the option in any share issue of the any other company.

The fair values of the share options granted were estimated using a binomial model, taking into account the terms and conditions upon which the options were granted. The fair value of the share options measured at grant date and the assumptions used are as follows:-


Fair value per share option granted (RM) 0.008 0.04Share price at grant date (RM) 0.075 0.128Exercise price (RM) 0.165 0.165Expected volatility (%) 73.37 72.66Expected life (years) 1.25 2.25Dividend yield (%) - 3.70Risk-free interest rate (%) 3.35 3.37

On 26 December 2019, the Group have terminated the SIS with effect from 27 December 2019.





(c) Revaluation Reserve

The revaluation reserve represents the increase in the fair value of freehold land of the Group (net of deferred tax, where applicable) presented under property, plant and equipment.

(d) Foreign Exchange Translation Reserve

The foreign exchange translation reserve arose from the translation of the financial statements of a foreign subsidiary and the Group’s share of an associate’s foreign translation differences whose functional currency is different from the Group’s presentation currency.

21. LEASE LIABILITIES

The Group 2019 RM

At 1 January - As previously reported -- Initial application of MFRS 16 246,588 - As restated 246,588Addition during the year 485,248Interest expense recognised in profit or loss 22,485Repayment of principal (209,567)Repayment of interest expense (22,485) At 31 December 522,269

Analysed by:- Current liabilities 177,617Non-current liabilities 344,652 522,269

The comparative information is not presented as the Group has applied MFRS 16 using the modified retrospective approach.




22. HIRE PURCHASE PAYABLES (SECURED)

The Group 2018 RM

Minimum hire purchase payments: - not later than 1 year 51,852- later than 1 year and not later than 5 years 102,600 154,452Less: Future finance charges (17,343) Present value of hire purchase payables 137,109

Analysed by:- Current liabilities 45,898Non-current liabilities 91,211 137,109

(a) The hire purchase payables have been represented as ‘lease liabilities’ as shown in Note 20 to the financial statement following the application of MFRS 16 by the Group using the modified retrospective approach.

(b) In the last financial year, the hire purchase payables of the Group were secured by the Group’s motor vehicles under finance leases as disclosed in Note 8 to the financial statements. The hire purchase arrangements were expiring from 1 to 3.5 years.

(c) In the last financial year, the hire purchase payables of the Group at the end of the reporting period bore effective interest rate ranging from 4.20% to 4.46%. The interest rate was fixed at the inception of the hire purchase arrangements.

23. DEFERRED TAX LIABILITIES

Recognised in Recognised Other in Profit Comprehensive At or Loss Income At 1.1.2019 (Note 30) (Note 31) 31.12.2019 RM RM RM RM

The Group 2019 Deferred Tax Liabilities Property, plant and equipment (2,257,000) 38,000 - (2,219,000) Right-of-use assets - 24,000 - 24,000Surplus from revaluation of freehold land (911,000) - (637,000) (1,548,000)Trade payables 7,000 12,000 - 19,000 (3,161,000) 74,000 (637,000) (3,724,000)




23. DEFERRED TAX LIABILITIES (Cont’d)

Recognised Recognised in Other in Profit Comprehensive At or Loss Income At 1.1.2019 (Note 30) (Note 31) 31.12.2019 RM RM RM RM

The Group 2019

Deferred Tax Assets Inventories 192,000 (21,000) - 171,000Cash and bank balances 7,000 - - 7,000Trade receivables 58,000 (52,000) - 6,000Lease liabilities - (3,000) - (3,000)Other payables and accruals - 60,000 - 60,000Unabsorbed capital allowances 58,000 (58,000) - -Unabsorbed investment allowances - 107,000 - 107,000 315,000 33,000 - 348,000 (2,846,000) 107,000 (637,000) (3,376,000)

Recognised in At Profit or Loss At 1.1.2018 (Note 30) 31.12.2018

The Group RM RM RM2018

Deferred Tax Liabilities Property, plant and equipment (2,393,000) 136,000 (2,257,000)Surplus from revaluation of freehold land (911,000) - (911,000)Trade payables (27,000) 34,000 7,000 (3,331,000) 170,000 (3,161,000) Deferred Tax Assets Inventories 166,000 26,000 192,000Cash and bank balances 146,000 (139,000) 7,000Trade receivables 9,000 49,000 58,000Other payables and accruals 87,000 (87,000) -Unabsorbed capital allowances - 58,000 58,000 408,000 (93,000) 315,000 (2,923,000) 77,000 (2,846,000)




24. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 7 to 90 (2018 - 7 to 90) days.

25. OTHER PAYABLES AND ACCRUALS


Other payables:- Third parties 354,093 757,320 20,503 -Goods and services tax payable - 129,956 - -Sales and services tax payable 196,484 - - - 550,577 887,276 20,503 - Accruals 854,023 1,024,605 99,550 297,141 1,404,600 1,911,881 120,053 297,141

26. SHORT TERM BORROWINGS


Bankers’ acceptances 8,318,104 6,150,974

The bankers’ acceptances bore effective interest rates ranging from 3.49% to 4.20% (2018 - 4.45% to 4.67%) per annum at the end of the reporting period and secured by corporate guarantee from the Company.

27. REVENUE


Revenue recognised at a point in time Sales of finished goods 70,653,960 68,387,031 - -Sales of chemical related material 2,457,555 4,631,128 - -Dividend income - - - 2,500,001 73,111,515 73,018,159 - 2,500,001




28. NET IMPAIRMENT LOSS ON FINANCIAL ASSETS


Impairment losses during the financial year: - Additions under MFRS 9 (Note 15) - - - 870,700

29. (LOSS)/PROFIT BEFORE TAXATION


(Loss)/Profit before taxation is arrived at after charging/(crediting):- Auditors’ remuneration: - audit fees: - current financial year 102,000 124,942 27,000 25,000 - (over)/underprovision in prior year (3,000) 5,000 (3,000) 1,000- non-audit fees: - auditors of the Company 5,000 5,000 5,000 5,000 - other auditors 9,434 21,200 9,434 21,200Depreciation: - property, plant and equipment 1,448,838 1,928,612 - -- right-of-use assets 223,310 - - -Directors’ fees 255,000 248,360 255,000 248,360Directors’ non-fee emoluments: - salaries, bonuses and allowances 1,196,170 980,884 51,400 42,350- defined contribution benefits 132,840 109,096 - -- share option expenses - 208,000 - 208,000Equipment written off 10,178 7,744 - -(Gain)/Loss on foreign exchange: - realised (20,053) 5,395 - -- unrealised 134,531 268,765 - -Inventories written off 86,431 255,371 - -Inventories written down - 433,525 - -Interest expense on lease liabilities 22,485 - - -




29. (LOSS)/PROFIT BEFORE TAXATION (Cont’d)


(Loss)/Profit before taxation is arrived at after charging/(crediting) (Cont’d):-

Lease expense: - short-term leases 82,554 206,815 90,000 - Loss on disposal of other investment 3,010,048 - 3,010,048 - Staff costs: - short term employee benefits 5,404,399 4,795,529 219,630 - - defined contribution benefit 330,881 323,291 24,523 - - share option expenses - 355,265 - - Total interest expenses on financial liabilities that are not at fair value through profit or loss: - bankers’ acceptances 271,520 180,902 - - - bank overdrafts 459,573 - 459,573 - - hire purchase - 5,015 - - Reversal of inventories previously written down (89,147) - - - Dividend income from subsidiary - - - (2,500,001) Gain on disposal of property, plant and equipment (15,000) (1,000) - - Fair value gain on financial assets measured at fair value through profit or loss mandatorily: - other investment (161,551) - (161,551) - Total interest income on financial assets measured at amortised cost (543,964) (576,740) (543,964) (574,126)

30. INCOME TAX EXPENSE

(a) Income tax expenses recognised in profit or loss


Current tax: - for the financial year 661,417 118,284 74,042 68,284 - underprovision in the previous financial year 44,438 8,640 60,971 8,640 705,855 126,924 135,013 76,924 Deferred tax: (Note 23) - for the financial year (128,000) (178,000) - - - underprovision in the previous financial year 21,000 101,000 - -

(107,000) (77,000) - - 598,855 49,924 135,013 76,924




30. INCOME TAX EXPENSE (Cont’d)

(a) Income tax expenses recognised in profit or loss (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:-


(Loss)/Profit before taxation (4,027,495) (3,007,608) (4,043,935) 1,259,719 Tax at statutory tax rate of 24% (2018 - 24%) (966,599) (721,826) (970,544) 302,333 Tax effects of: Non-deductible expenses 1,500,016 666,245 1,044,586 365,951 Non-taxable income - - - (600,000) Underprovision of income tax in the previous financial year 44,438 8,640 60,971 8,640 Underprovision of deferred taxation in the previous financial year 21,000 101,000 - -Effects of differential in tax rates of a subsidiary - (4,135) - -

Income tax expense for the financial year 598,855 49,924 135,013 76,924

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2018 - 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.

(b) Income tax expenses recognised in other comprehensive income


Revaluation of property, plant and equipment - remeasurement of deferred tax arising from the change in the tax rates of real property gains tax (Note 31) 637,000 -

In accordance with the provision in the Finance Act 2018, the real property gains tax rate on disposal of properties held for more than 5 years has been revised from 5% to 10% with effect from 1 January 2019.




31. OTHER COMPREHENSIVE INCOME


Items that Will Not be Reclassifed Subsequently to Profit or Loss Revaluation of property, plant and equipment – remeasurement of deferred tax arising from change in the tax rates of real property gains tax (Notes 23 and 30) 637,000 - Items that Will be Reclassifed Subsequently to Profit or Loss Foreign currency translation: - changes during the financial year - 138,111 Share of an associate’s foreign currency translation reserve 26,570 -

32. LOSS PER SHARE


Basic Loss attributable to owners of the Company (RM) (4,616,695) (2,854,943) Weighted average number of ordinary shares in issue Number of shares issued at beginning of the year 445,413,600 333,559,880Effects of weighted average number of ordinary shares in respect of shares issued pursuant to the new ordinary shares issued and conversion of ICPS. 7,188,250 97,315,843 452,601,850 430,875,723 Basic loss per ordinary share (Sen) (1.02) (0.66)

Diluted Loss attributable to owners of the Company (RM) (4,616,695) (2,854,943) Weighted average of number of ordinary shares 452,601,850 430,875,723Effect of conversion of ICPS 122,221,026 192,047,553 574,822,876 622,923,276 Diluted loss per ordinary share (Sen) (0.80) (0.46)

For financial year ended 31 December 2019, the potential conversion of warrants is anti-dilutive as its exercise prices are higher than the average market price of the Company’s ordinary shares during the current financial year. Accordingly, the exercise of warrants has been ignored in the calculation of dilutive earnings per share.




33. DISPOSAL OF SUBSIDIARIES

(a) PT Rimba Tripa (“PTRT”)

PTRT had issued additional 750,000 ordinary shares and the Company had subscribed for 362,500 ordinary shares for a total cash consideration of RM1,011,375. These have resulted in PTRT ceasing to be a subsidiary and becoming a 49% owned associate of the Group.

The financial effect of the deemed disposal of the date of deemed disposal are summarised below:-

The Group 2019 RM

Property, plant and equipment 40,816Other receivables 3,106,423Cash and cash equivalents 624Trade payables (56,736)Other payables (2,841,074)Amount owing to shareholders (103,497)Non-controlling interests (74,374) Carrying amount of net assets disposed of 72,182Foreign exchange translation reserve (1,149)Gain on disposal of a subsidiary 42,548Fair value of equity interest retained (113,581) Consideration received, satisfied in cash -Less: Cash and bank balances of a subsidiary disposed of (624) Net cash outflow from the disposal of a subsidiary (624)

(b) Asia Poly Food and Beverage Sdn. Bhd. (“APFB”)

APFB had issued additional 1,999,998 ordinary shares and the Company had subscribed for 979,998 ordinary shares for a total cash consideration of RM979,998. These have resulted in APFB ceasing to be a subsidiary and becoming a 49% owned joint venture of the Group.

The financial effect of the deemed disposal of the date of deemed disposal are summarised below:-

The Group 2019 RM

Cash and cash equivalents 2Other payables (4,500)Amount owing to holding company (13,085)Amount owing to a related company (2,652) Carrying amount of net liabilities disposed of (20,235)Gain on disposal of a subsidiary 10,321Fair value of equity interest retained 9,914 Consideration received, satisfied in cash -Less: Cash and bank balances of a subsidiary disposed of (2) Net cash outflow from the disposal of a subsidiary (2)

There were no disposal of subsidiaries in the last financial year.




34. DIVIDENDS


First single tier dividend of 0.50 sen per ordinary share in respect of the financial year ended 31 December 2018 - 2,206,066

35. CASH FLOW INFORMATION

(a) The cash disbursed for the purchase of property, plant and equipment is as follows:-


Cost of property, plant and equipment purchased (Note 8) 2,141,210 1,618,552Amount financed through hire purchase - (127,000) Cash disbursed for purchase of property, plant and equipment 2,141,210 1,491,552

(b) The reconciliations of liabilities arising from financing activities are as follows:-

Bankers’ Hire Lease Acceptances Purchase Liabilities Total

The Group RM RM RM RM

2019 At 1 January 6,150,974 137,109 - 6,288,083Effects of adoption of MFRS 16 - (137,109) 246,588 109,479 At 1 January, as restated 6,150,974 - 246,588 6,397,562 Changes in Financing Cash Flows Proceeds from drawdown 19,240,307 - - 19,240,307Repayment of borrowing principal (17,073,177) - (209,567) (17,282,744)Repayment of borrowing interests (271,520) - (22,485) (294,005) Non-cash Changes Finance charges recognised in profit or loss 271,520 - 22,485 294,005Acquisition of new leases - - 485,248 485,248 At 31 December 8,318,104 - 522,269 8,840,373




35. CASH FLOW INFORMATION (Cont’d)

(b) The reconciliations of liabilities arising from financing activities are as follows (Cont’d):-

Bankers’ Hire Acceptances Purchase Total

The Group RM RM RM

2018 At 1 January 3,569,923 48,368 3,618,291 Changes in Financing Cash Flows Proceeds from drawdown 10,908,890 - 10,908,890Repayment of borrowing principal (8,327,839) (38,259) (8,366,098)Repayment of borrowing interests (180,902) (5,015) (185,917) Non-cash Changes Finance charges recognised in profit or loss 180,902 5,015 185,917New hire purchase - 127,000 127,000 At 31 December 6,150,974 137,109 6,288,083

(c) The total cash outflows for leases as a leasee are as follow:-


Payment of short-term leases 82,554 - 90,000 -Interest paid on lease liabilities 22,485 - - -Payment of lease liabilities 209,567 - - - 314,606 - 90,000 -

(d) The cash and cash equivalents comprise the following:-


Fixed deposits with licensed banks 15,483,493 20,112,027 15,483,493 20,112,027Cash and bank balances 9,719,900 6,891,265 2,799,895 2,610,774 25,203,393 27,003,292 18,283,388 22,722,801




36. KEY MANAGEMENT PERSONNEL COMPENSATION

The key management personnel of the Group and of the Company include executive directors and non-executive directors of the Group and of the Company.

The key management personnel compensation during the financial year are as follows:-


Directors Directors of the Company Short-term employee benefits: - fee 255,000 248,360 255,000 248,360- salaries, bonuses and other benefits 740,324 538,274 51,400 42,350 995,324 786,634 306,400 290,710Defined contribution benefits 79,560 57,600 - -Share option expenses - 208,000 - 208,000 1,074,884 1,052,234 306,400 498,710 Directors of the Subsidiaries Short-term employee benefits: - salaries, bonuses and other benefits 455,846 442,610 - -Defined contribution benefits 53,280 51,496 - -

509,126 494,106 - -

Total directors’ remunerations (Note 28) 1,584,010 1,546,340 306,400 498,710

The estimated monetary value of benefits-in-kind provided by the Company to the directors of the Company were RM5,000 (2018 - RM5,000).

37. INTEREST IN JOINT OPERATION

Asia Poly Green Energy Sdn. Bhd., a wholly-owned subsidiary of the Company, has a 51% (2018 - nil) ownership interest in a joint operation, with Musteq Engineering Sdn. Bhd. for the purposes of exploring, securing, developing and executing renewable energy development projects jointly.




38. 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 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, holding company, key management personnel and entities within the same group of companies.

(b) Related Party Transactions and Balances

Other than those disclosed elsewhere in the financial statements, the Group also carried out the following transactions with the related party during the financial year:-


Rental of premises paid or payable to a director - 67,500Lease paid or payable to a director 90,000 -

39. 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 on a quarterly basis. For management purposes, the Group is organised into business units based on product and services provided.

The Group is organised into main reportable segments as follows:-

(a) Manufacturing - Manufacturing of cast acrylic product.

(b) Trading - Trading in chemical material.

(c) Property development - Property development.

(d) Others - Consist of investment holding company and subsidiaries which are dormant.

The management assesses the performance of the reportable segments based on operating profit or loss. The accounting policies of the reportable segments are the same as the Group’s accounting policies.

Borrowings and investment-related activities are managed on a group basis and are not allocated to reportable segments.

Each reportable segment assets is measured based on all assets (including goodwill) of the segment other than investments in associates and tax-related assets.

Each reportable segment liabilities is measured based on all liabilities of the segment other than borrowings and tax-related liabilities.




39. OPERATING SEGMENTS (Cont’d)

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the reportable segments are presented under unallocated items. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters) and head office expenses.

Transactions between reportable segments are carried out on agreed terms between both parties. The effects of such inter-segment transactions are eliminated on consolidation.

39.1 BUSINESS SEGMENTS

Property The Manufacturing Trading development Others Group RM RM RM RM RM

2019

Revenue

Revenue 70,653,960 2,457,555 - - 73,111,515 Consolidation adjustments - Consolidation revenue 73,111,515 Represented by:- Revenue recognised at a point of time - Sales of cast acrylic products 70,653,960 - - - 70,653,960- Sales of chemical related material - 2,457,555 - - 2,457,555 73,111,515Consolidation adjustments - 73,111,515 Results Segment profit/(loss) 1,381,900 146,637 (496,438) (3,636,694) (2,604,595) Finance costs (754,225) Consolidation adjustments (668,675) Consolidated loss before taxation (4,027,495)Income tax expense (598,855) Consolidated loss after taxation (4,626,350) Segment profit/(loss) includes the followings:- Interest income - - - 543,964 543,964Interest expenses (271,520) - - (459,573) (731,093)Depreciation of property, plant and equipment (1,421,301) - (6,216) (21,322) (1,448,839)Depreciation of right-of-use assets (144,389) - (3,552) (75,369) (223,310)Gain on disposal of equipment 15,000 - - - 15,000Inventories written off (86,431) - - - (86,431)Unrealised foreign exchange loss (134,531) - - - (134,531) Share of result in a joint venture - - - (274,306) (274,306)Share of results in an associate - - - (228,280) (228,280)Fair value gain on other investment - - - (161,551) (161,551)





39.1 BUSINESS SEGMENTS (Cont’d)


2019

Assets Segment assets 65,719,233 - 8,996,294 65,054,744 139,770,271Unallocated assets: - current tax assets 34,560Consolidated adjustments (35,291,206) Consolidated total assets 104,513,625 Additions to non-current assets other than financial instruments are:- Property, plant and equipment 2,001,863 - - 259,374 2,261,237Right-of-use assets 28,503 - 127,860 328,885 485,248Inventories - - 35,405 - 35,405Development costs - - - 439,504 439,504 Liabilities Segment liabilities 25,628,272 - 1,873,904 4,267,671 31,769,847Unallocated liabilities: - deferred tax liabilities 3,376,000- lease liabilities 138,852- short-term borrowings 8,318,104- current tax liabilities 320,635Consolidation adjustments (18,639,750) Consolidated total liabilities 25,283,688







2018 Revenue Revenue 68,387,031 4,631,128 - 2,500,001 75,518,160 Consolidation adjustments (2,500,001) Consolidation revenue 73,018,159 Represented by:- Revenue recognised at a point of time - Sales of cast acrylic products 68,387,031 - - - 68,387,031- Sales of chemical related material - 4,631,128 - - 4,631,128- Dividend income - - - 2,500,001 2,500,001 68,387,031 4,631,128 - 2,500,001 75,518,160

Consolidation adjustments (2,500,001) 73,018,159

Results Segment (loss)/profit (1,545,724) 265,917 (437,377) 789,186 (927,998) Finance costs (185,917)Consolidation adjustments (1,893,693) Consolidated loss before taxation (3,007,608)Income tax expense (49,924) Consolidated loss after taxation (3,057,532) Segment (loss)/profit includes the followings:- Interest income - - - 576,740 576,740Depreciation of property, plant and equipment (1,913,032) - (4,524) (11,056) (1,928,612)Inventories written down (326,114) - - - (326,114)Gain on disposal of equipment 1,000 - - - 1,000Unrealised foreign exchange loss (268,765) - - - (268,765)







2018

Assets Segment assets 66,679,872 - 8,717,427 70,427,956 145,825,255Unallocated assets: - current tax assets 658,271Consolidated adjustments (37,821,908) Consolidated total assets 108,661,618 Additions to non-current assets other than financial instruments are:- Property, plant and equipment 1,570,419 - 46,620 1,513 1,618,552Inventories - - 340,286 - 340,286 Liabilities Segment liabilities 37,366,142 - 1,098,113 6,318,996 44,783,251Unallocated liabilities: - deferred tax liabilities 2,846,000Consolidation adjustments (23,387,522) Consolidated total liabilities 24,241,729

39.2 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.

Revenue Non-current Assets 2019 2018 2019 2018 RM RM RM RM

The Group Malaysia 21,641,604 30,600,229 58,658,681 51,915,579Outside Malaysia 51,469,911 42,417,930 - 40,816 73,111,515 73,018,159 58,658,681 51,956,395





39.2 GEOGRAPHICAL INFORMATION (Cont’d)

At A Point in Time 2019 2018 RM RM

The Group Malaysia 21,641,604 30,600,229Outside Malaysia 51,469,911 42,417,930 73,111,515 73,018,159

39.3 MAJOR CUSTOMERS

The following are major customers with revenue equal to or more than 10% of the Group’s total revenue.

Revenue Segment 2019 2018 RM RM

Customer #1 20,569,585 17,319,243 ManufacturingCustomer #2 16,462,513 8,730,238 Manufacturing

40. CAPITAL COMMITMENTS


Purchase of equipment 98,500 98,500

41. FINANCIAL INSTRUMENTS

The Group’s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the un-predictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

41.1 FINANCIAL RISK MANAGEMENT POLICIES

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(a) Market Risk

(i) Foreign Currency Risk

The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than the respective functional currencies of entities within the Group. The currencies giving rise to this risk are primarily United States Dollar (“USD”) and Euro (“EUR”). Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level.




41. FINANCIAL INSTRUMENTS (Cont’d)

41.1 FINANCIAL RISK MANAGEMENT POLICIES (Cont’d)

(a) Market Risk (Cont’d)

(i) Foreign Currency Risk (Cont’d)

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 amount of the financial instruments of the end of the reporting period is summarised as below:

Foreign Currency Exposure

United States Ringgit Dollar Euro Malaysia Total RM RM RM RM

The Group 2019 Financial Assets Other investment - - 857,480 857,480Trade receivables 10,718,766 - 3,592,058 14,310,824Amount owing by a joint venture - - 11,619 11,619Amount owing by an associate - - 808,800 808,800Fixed deposits with licensed banks - - 15,483,493 15,483,493Cash and bank balances 3,531,205 1,772 6,186,923 9,719,900 14,249,971 1,772 26,940,373 41,192,116

Financial Liabilities Lease liabilities - - 522,269 522,269Short term borrowings - - 8,318,104 8,318,104Trade payables 10,102,135 - 1,239,945 11,342,080Other payables and accruals - - 1,208,116 1,208,116 10,102,135 - 11,288,434 21,390,569

Net financial assets 4,147,836 1,772 15,651,939 19,801,597Less: Net financial assets denominated in the respective entities’ functional currencies - - (15,651,939) (15,651,939) Currency exposure 4,147,836 1,772 - 4,149,608








Foreign Currency Exposure (Cont’d)

United States Indonesian Ringgit Dollar Euro Rupiah Malaysia Total RM RM RM RM RM

The Group

2018 Financial Assets Trade receivables 9,784,430 - - 4,095,177 13,879,607Other receivables - - 170,214 8,979 179,193Fixed deposits with licensed banks - - - 20,112,027 20,112,027Cash and bank balances 1,217,052 1,826 624 5,671,763 6,891,265 11,001,482 1,826 170,838 29,887,946 41,062,092

Financial Liabilities Hire purchase payables - - - 137,109 137,109Short term borrowings - - - 6,150,974 6,150,974Trade payables 12,651,694 86,268 56,736 401,067 13,195,765Other payables and accruals - - 802,386 979,539 1,781,925 12,651,694 86,268 859,122 7,668,689 21,265,773

Net financial (liabilities)/assets (1,650,212) (84,442) (688,284) 22,219,257 19,796,319Less: Net financial liabilities/(assets) denominated in the respective entities’ functional currencies - - 688,284 (22,219,257) (21,530,973) Currency exposure (1,650,212) (84,442) - - (1,734,654)








Foreign Currency Risk Sensitivity Analysis

The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies at the end of the reporting period, with all other variables held constant:-


Effects on Loss After Taxation USD/RM - strengthened by 5% (157,618) (62,708) - weakened by 5% 157,618 62,708 EUR/RM - strengthened by 5% (67) (3,209) - weakened by 5% 67 3,209

(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 borrowing with variables 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 rate borrowings and fixed deposits with licensed banks are carried at amortised costs. Therefore, they are not subject to interest rate risk as defined in MFRS 7 since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The Group does not have any floating rate borrowings and hence, no sensitivity analysis is presented.

(iii) Equity Price Risk

Any reasonably possible change in the prices of quoted investments at the end of the reporting period does not have a material impact on the profit after taxation and other comprehensive income of the Group and of the Company and hence, no sensitivity analysis is presented.






(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 cash and bank balances and fixed deposits with licensed banks), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Company’s exposure to credit risk arises principally from advance to subsidiaries and corporate guarantee given to financial institutions for credit facilities granted to certain subsidiary. The Company monitors the results of these subsidiaries regularly and repayments made by the subsidiaries.

(i) Credit Risk Concentration Profile

The Group’s major concentration of credit risk relates to the amounts owing by 3 customers which constituted approximately 67% of its trade receivables (including related parties) at the end of the reporting period.

(ii) Exposure to Credit Risk At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying

amount of each class of financial assets recognised in the statement of financial position of the Group and of the Company after deducting any allowance for impairment losses (where applicable).

(iii) Assessment of Impairment Losses At each reporting date, the Group assesses whether any of financial assets at amortised cost are credit

impaired.

The gross carrying amounts of financial assets are written off when there is no reasonable expectation of recovery (i.e. the debtor does not have assets or sources of income to generate sufficient cash flows to repay the debt) despite the fact that they are still subject to enforcement activities.

Trade Receivables

The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

For certain large customers or customers with a high risk of default, the Group assesses the risk of loss of each customer individually based on their financial information, past trends of payments an external credit rating, where applicable.

The Group considers any receivables having financial difficulty or with significant balances outstanding for more than 90 days are deemed credit impaired.

The expected loss rates are based on the payment profiles of sales over a period of 12 months from the measurement date and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle their debts.






(b) Credit Risk (Cont’d)

(iii) Assessment of Impairment Losses (Cont’d)

Trade Receivables (Cont’d)

Sales made are generally accompanied by letter of credit or advance payments and therefore, there is minimal exposure to credit risk. Furthermore, outstanding trade receivables are largely collected within the credit term.

The information about the exposure to credit risk and the loss allowances calculated under MFRS 9 for trade receivables are summarised below:-

Gross Individual Collective Carrying Amount Impairment Impairment Amount

RM RM RM RM

The Group 2019 Current (not past due) 13,184,907 - - 13,184,9071 to 30 days past due 1,107,549 - - 1,107,54931 to 60 days past due 18,368 - - 18,368 14,310,824 - - 14,310,824 Credit impaired: - individually impaired - - - - 14,310,824 - - 14,310,824

The Group 2018 Current (not past due) 10,933,567 - - 10,933,5671 to 30 days past due 2,755,604 - - 2,755,60461 to 90 days past due 518 - - 51891 to 120 days past due 189,918 - - 189,918 13,879,607 - - 13,879,607 Credit impaired: - individually impaired 33,870 (33,870) - - 13,913,477 (33,870) - 13,879,607








Trade Receivables (Cont’d)

The movement in the loss allowances in respect of trade receivables is disclosed in Note 13 to the financial statements.

Other Receivables

In the last financial year, the Group applied the 3-stage general approach to measuring expected credit losses for other receivables. No expected credit loss was recognised on these balances as it is negligible.

Amount Owing By A Joint Venture

The Group applies the 3-stage general approach to measuring expected credit losses for amount owing by a joint venture. At the end of the reporting period, there was no indication that the amount owing is not recoverable other than those which had already impaired in the last financial year.

Amount Owing By An Associate

The Group applies the 3-stage general approach to measuring expected credit losses for amount owing by an associate. Generally, the Group considers advances to associate have low credit risks. The Group assumes that there is a significant increase in credit risk when an associate’s financial position deteriorates significantly. As the Group is able to determine the timing of payments of the associate’s advances when they are payable, the Group considers the loans and advances to be in default when the associate is not able to pay when demanded. The Group considers an associate’s advance to be credit impaired when the associate is unlikely to repay its loan or advance in full or the subsidiary is continuously loss making or the subsidiary is having a deficit in its total equity.

The Group determines the probability of default for these advances individually using internal information available.

The information about the exposure to credit risk and the loss allowances calculated under MFRS 9 for amount owing by an associate is summarised below:-

12-month Lifetime Gross Loss Loss Carrying Amount Allowance Allowance Amount

RM RM RM RM

The Group 2019 Low credit risk 808,800 - - 808,800

Fixed Deposits with Licensed Banks, Cash and Bank Balances

The Group considers these banks and financial institutions have low credit risks. Therefore, the Group is of the view that the loss allowance is immaterial and hence, it is not provided for.








Amount Owing By Subsidiaries

The Company applies the 3-stage general approach to measuring expected credit losses for all inter-company balances. Generally, the Company considers advances to subsidiaries have low credit risks. The Company assumes that there is a significant increase in credit risk when a subsidiary’s financial position deteriorates significantly. As the Company is able to determine the timing of payments of the subsidiaries’ advances when they are payable, the Company considers the loans and advances to be in default when the subsidiaries are not able to pay when demanded. The Company considers a subsidiary’s advance to be credit impaired when the subsidiary is unlikely to repay its loan or advance in full or the subsidiary is continuously loss making or the subsidiary is having a deficit in its total equity.

The Company determines the probability of default for these advances individually using internal information available.

The information about the exposure to credit risk and the loss allowances calculated under MFRS 9 for amount owing by subsidiaries are summarised below:-

12-month Lifetime Gross Loss Loss Carrying Amount Allowance Allowance Amount

RM RM RM RM

The Company 2019 Low credit risk 16,305,436 (860,255) - 15,445,181

2018 Low credit risk 20,454,622 (870,700) - 19,583,922

The movement in the loss allowances are disclosed in Note 15 to the financial statements.

Financial Guarantee Contracts

All of the financial guarantee contracts are considered to be performing, have low risks of default and historically there were no instances where these financial guarantee contracts were called upon by the parties of which the financial guarantee contracts were issued to. Accordingly, no loss allowances were identified based on 12-month expected credit losses.






(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. In addition, the holding company has undertaken to provide continued financial support to meet the Group’s obligations as and when they fall due.

Maturity Analysis

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

Weighted Average Effective Contractual Interest Carrying Undiscounted Within 1- 5 Rate Amount Cash Flows 1 Year Years The Group % RM RM RM RM

2019

Non-derivatives Financial Liabilities Lease liabilities 4.46 522,269 562,900 198,007 364,893Short term borrowings 3.81 8,318,104 8,318,104 8,318,104 -Trade payables - 11,342,080 11,342,080 11,342,080 -Other payables and accruals - 1,208,116 1,208,116 1,208,116 - 21,390,569 21,431,200 21,066,307 364,893

2018

Non-derivatives Financial Liabilities Hire purchase payables 4.24 137,109 154,452 51,852 102,600 Short term borrowings 4.58 6,150,974 6,150,974 6,150,974 -Trade payables - 13,195,765 13,195,765 13,195,765 -Other payables and accruals - 1,781,925 1,781,925 1,781,925 - 21,265,773 21,283,116 21,180,516 102,600






(c) Liquidity Risk (Cont’d)

Maturity Analysis (Cont’d)

Contractual Carrying Undiscounted Within Amount Cash Flows 1 Year

The Company RM RM RM

2019 Non-derivatives Financial Liabilities Other payables and accruals 120,053 120,053 120,053Financial guarantee contracts in relation to corporate guarantee given to certain subsidiary - 8,870,958 8,870,958 120,053 8,991,011 8,991,011

2018 Non-derivatives Financial Liabilities Other payables and accruals 297,141 297,141 297,141Financial guarantee contracts in relation to corporate guarantee given to certain subsidiary - 14,810,338 14,810,338

297,141 15,107,479 15,107,479

41.2 CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.





41.2 CAPITAL RISK MANAGEMENT (Cont’d)

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 net debt divided by total equity. The Group includes within net debt, loans and borrowings from financial institutions less cash and cash equivalents. Capital includes equity attributable to the owners of the parent and non-controlling interests. The debt-to-equity ratio of the Group at the end of the reporting period was as follows:-


Lease liabilities 522,269 -Hire purchase payables - 137,109Short term borrowings 8,318,104 6,150,974 8,840,373 6,288,083Less: Fixed deposits with licensed banks (15,483,493) (20,112,027)Less: Cash and bank balances (9,719,900) (6,891,265) Net debt (16,363,020) (20,715,209) Total equity 79,229,937 84,419,889 Debt-to-equity ratio Not Not Applicable Applicable

The debt-to-equity ratio of the Group at the end of the reporting period is not presented as its cash and cash equivalents exceeded the total loans and borrowings from financial institutions.

There was no change in the Group’s approach to capital management during the financial year.





41.3 CLASSIFICATION OF FINANCIAL INSTRUMENTS

2019 The Group The Company RM RM

Financial Assets Mandatorily at Fair Value Through Profit or Loss Other investments 857,480 857,480 Amortised Cost Trade receivables 14,310,824 -Amount owing by subsidiaries - 15,445,181Amount owing by a joint venture 11,619 2,642Amount owing by an associate 808,800 -Fixed deposits with licensed banks 15,483,493 15,483,493Cash and bank balances 9,719,900 2,799,895

40,334,636 33,731,211 Financial Liability Amortised Cost Short term borrowings 8,318,104 -Lease liabilities 522,269 -Trade payables 11,342,080 -Other payables and accruals 1,208,116 120,053

21,390,569 120,053


Financial Asset Loans and Receivables Financial Assets Trade receivables 13,879,607 -Other receivables 179,193 -Amount owing by subsidiaries - 19,583,922 Fixed deposits with licensed banks 20,112,027 20,112,027 Cash and bank balances 6,891,265 2,610,774 41,062,092 42,306,723

Financial Liability Amortised Cost Hire purchase payables 137,109 -Short term borrowings 6,150,974 -Trade payables 13,195,765 -Other payables and accruals 1,781,925 297,141 21,265,773 297,141





41.4 GAINS OR LOSSES ARISING FROM FINANCIAL INSTRUMENTS


Financial Assets Fair Value Through Profit or Loss Net gain recognised in profit or loss by mandatorily required by MFRS 9 161,551 161,551 Amortised Cost Net gains recognised in profit or loss 543,964 543,964

Financial Liability Amortised Cost Net losses recognised in profit or loss (731,093) (459,573)


Financial Asset Amortised Cost Net gains/(losses) recognised in profit or loss 576,740 (296,574) Financial Liability Amortised Cost Net gains recognised in profit or loss (185,917) -




41.

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41.5 FAIR VALUE INFORMATION (Cont’d)

(a) The fair value at quoted equity investments is determined at their quoted closing bid prices at the end of the reporting period.

(b) The fair values of hire purchase payables and short term borrowings are determined by discounting the relevant future contractual cash flows using current market 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:-

The Group 2019 2018

Hire purchase payables - 2.35% - 2.70%Short term borrowings 3.49% - 4.20% 4.45% - 4.67%

42. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 15 January 2019, one of the wholly-owned subsidiaries, Asia Poly Green Energy Sdn. Bhd. (“APGE”) has entered into a Teaming Agreement with Musteq Engineering Sdn. Bhd. for the purposes of exploring, securing, developing and executing renewable energy development projects jointly and/or jointly with third party as partner.

(b) On 5 April 2019, its wholly-owned subsidiary, Asia Poly Industrial Sdn. Bhd. has appointed D’nonce (M) Sdn. Bhd. as distributor of A-Cast brand of Cell-Cast Acrylic Sheets in South East Asia Market (“the Contract”) to distribute 18 million acrylic sheets for a period of 12 months. The Contract is expected to commence immediately and subject to renewal.

(c) On 2 July 2019, the Company entered into a Shareholders’ Agreement with Uncle Don’s Holdings Sdn. Bhd. (“UDHSB”) whereby the Company and UDHSB participated in a joint venture for the purpose of working together in the food and beverage industry more particularly in establishing new Uncle Don’s outlets.

(d) On 7 October 2019, one of the subsidiaries, APBG has been granted and received Feed-in Approval by Sustainable Energy Development Authority Malaysia for the Bio Gas Project in Tapis, Kelantan.

(e) On 12 December 2019, APBG has entered into the Renewable Energy Power Purchase Agreement with Tenaga Nasional Berhad (“TNB”). The Agreement governs the obligations of APBG to sell and TNB to purchase and accept the renewable energy.




43. SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIOD

(a) On 3 January 2020, the Company has acquired quoted securities of Dolphin International Berhad (“DIB”) at the purchase consideration of RM5,920,236.33. The Company has acquired 26,862,000 ordinary shares of DIB which represents 11% of the total issued and paid-up capital of DIB.

(b) On 31 January 2020, one of the wholly-owned subsidiaries, APGE has entered into a conditional share sale agreement (“SSA”) with Dolphin International Berhad (“DIB” or “Vendor”) for the proposed acquisition of 4,500,000 ordinary shares in Dolphin Biogas Sdn. Bhd. (“DBSB”), representing 80% equity interest in DBSB for a purchase consideration of RM2,123,675 (“Purchase Consideration”) and the assumption of liabilities comprising RM341,271 owing by DBSB to Dolphin Applications Sdn Bhd (“DASB”), a wholly-owned subsidiary of DIB, as well as any advances by DIB to DBSB and its subsidiary from the date of SSA. The proposed diversification of the principal activities of the Company and its subsidiaries to include renewable energy business and related activities.

Subsequently, on 26 March 2020, the Purchase Consideration was revised and shall be satisfied entirely via cash in the following manner:-

(i) APGE shall pay to DIB the sum of RM212,367 upon execution of the SSA, which is deemed to be part payment of the Purchase Consideration of the DBSB shares;

(ii) APGE shall pay to DIB the balance of the deposit amounting to RM1,249,200, which is deemed to be part payment of the Purchase Consideration of the DBSB shares in the following order:-

Time period RM

• Upon the execution of the SSA 416,400• Upon the expiry of two months from the date of the SSA 416,400

• Upon the expiry of four months from the date of the SSA 416,400

(iii) APGE shall pay the balance purchase consideration of RM662,108 to DIB on Completion Date where DIB shall sell and APGE shall purchase the Sale Shares free from all claims, charges, liens, encumbrances and equities whatsoever together with all rights attached thereto and all dividends, rights and distributions declared paid or made.

(c) On 27 February 2020, the Company entered into a conditional sale of shares agreement with Uncle Don’s Holdings Sdn Bhd (formerly known as Frontier Touch Holdings Sdn. Bhd.) and Dolphin International Berhad (“DIB” or “Purchaser”) for the disposal by the Company of its entire 49% equity interest in Asia Poly Food and Beverage Sdn Bhd, a joint venture, to the Purchaser for a total disposal consideration of RM10.78 million to be satisfied via RM5.88 million in cash and issuance of 64,473,684 new ordinary shares in DIB at an issue price of RM 0.076 per DIB share.

(d) The outbreak of Coronavirus Disease 2019 (COVID-19) in early 2020 has affected the business and economic environments of the Group and hence, may impact its performance and financial position in the future. However, given the unpredictability associated with the COVID-19 outbreak and any further contingency measures that may be put in place by the governments and various private corporations, the potential financial impact of the COVID-19 outbreak on the Group’s 2020 financial statements could not be reasonably quantified at this juncture.





44. INITIAL APPLICATION OF MFRS 16 The Group has adopted MFRS 16 using the modified retrospective approach under which the cumulative effect of

initial application is recognised as an adjustment to the retained profits as at 1 January 2019 (date of initial application) without restating any comparative information.

The Group has applied MFRS 16 only to contracts that were previously identified as leases under MFRS 117 ‘Leases’ and IC Interpretation 4 ‘Determining Whether an Arrangement Contains a Lease’. Therefore, MFRS 16 has been applied only to contracts entered into or changed on or after 1 January 2019.

(a) Lessee Accounting

At 1 January 2019, for leases that were classified as operating leases under MFRS 117, the Group measured the lease liabilities at the present value of the remaining lease payments, discounted using the Group’s incremental borrowing rate at that date of 4.70%. The right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease.

The Group has used the following practical expedients in applying MFRS 16 for the first time:-

• Applied a single discount rate to a portfolio of leases with reasonably similar characteristics;

• Applied for the exemption not to recognise operating leases with a remaining lease term of less than 12 months as at 1 January 2019;

• Excluded initial direct costs for the measurement of the right-of-use asset at the date of initial application; and

• Used hindsight in determining the lease term where the lease contract contains options to extend or terminate the lease

For leases that were classified as finance leases, the Group has recognised the carrying amount of the leased

asset and lease liability immediately before 1 January 2019 as the carrying amount of the right-of-use asset and the lease liability as at the date of initial application.

The following table explains the difference between the operating lease commitments disclosed in the last financial year (determined under MFRS 117) and the lease liabilities recognised at 1 January 2019:-

The Group RM

Operating lease commitments as at 31 December 2018 111,250 Discounted using the incremental borrowing rate as at 1 January 2019 109,479Add: Finance lease liabilities recognised as at 31 December 2018 137,109 Lease liabilities recognised as at 1 January 2019 246,588



44. INITIAL APPLICATION OF MFRS 16 (Cont’d)

(b) Financial Impacts

The main impacts resulting from the adoption of MFRS 16 at 1 January 2019 are summarised below:-

1 January 2019 As Previously MFRS 16 As Reported Adjustments Restated RM RM RM

The Group Statements of Financial Position Property, plant and equipment (Note 8) 36,696,514 (162,631) 36,533,883Right-of-use assets (Note 9) - 270,226 270,226Lease liabilities (Note 21) - non-current liabilities - (113,623) (113,623)- current liabilities - (132,965) (132,965)Hire purchase payables (Note 22) - non-current liabilities (91,211) 91,211 -- current liabilities (45,898) 45,898 -Retained profits 4,769,811 (1,884) 4,767,927




LIST OF PROPERTIES OWNED BY THE COMPANY

None of the existing use on the abovementioned land is in breach of any land-use conditions or permissible land use. There is no restriction-in-interest for the abovementioned land.

Audited

net book

value as at

31.12.2019

RM’000

25,771

15,295

Tenure

Freehold

Freehold

Date of

issuance of

certificate

of fitness

19 August1997

-

Approximate

age of

building

(years)

Approximately28 years

-

Approximate

land area/

Built-up area

(sq.m.)

19,096/9,104

8,078

Description/

Existing use

Comprising of factory/warehouse buildingand a unit of doublestorey office building.

The land is designatedfor industrial use only.

Land held fordevelopment

Address

Lot 758, Jalan Haji Sirat,Mukim Kapar,42100 Klang,Selangor DarulEhsan

Mukim Semenyih,Daerah Ulu Langat,Selangor.

Title no./

Location

Title No.G.M.2277, Lot No.758, Mukim Kapar,District ofKlang, Stateof SelangorDarul Ehsan

H.S. (D) 183466 - 183479No. PT 46079 - 46092

Registered

owner/

Beneficial

1. Asia Poly Industrial

Sdn. Bhd.

2. High Reserve Land

Sdn. Bhd.



ANALYSIS OF SHAREHOLDINGSAS AT 10 JUNE 2020

Issued Share Capital : 462,309,750 ordinary shares Class of Shares : Ordinary sharesVoting Rights : One (1) vote per ordinary share Number of Shareholders : 2,170

DISTRIBUTION TABLE ACCORDING TO THE NUMBER OF SECURITIES HELD IN RESPECT OF ORDINARY SHARES

SIZE OF HOLDINGS NO. OF % NO. OF % HOLDERS SHARES

1 – 99 10 0.46 254 0.00100 - 1,000 194 8.94 63,717 0.011,001 - 10,000 397 18.29 2,837,500 0.6110,001 - 100,000 1,085 50.00 51,674,751 11.18100,001 to less than 5% of issued shares 483 22.26 306,963,872 66.405% and above of issued shares 1 0.05 100,769,656 21.80

TOTAL 2,170 100.00 462,309,750 100.00

DIRECTORS’ SHAREHOLDINGS AS PER REGISTER OF DIRECTORS’ SHAREHOLDINGS

NO. NAME OF DIRECTORS NO. OF % NO. OF % SHARES HELD SHARES HELD (DIRECT) (INDIRECT)

1 DATO’ YEO BOON LEONG 100,769,656 21.80 - 0.002 LIM TECK SENG 100,000 0.02 - 0.00 3 THOO SOON HUAT 682,300 0.15 - 0.004 TAN BAN TATT - 0.00 - 0.005 DATIN AZREEN BINTI ABU NOH - 0.00 - 0.00

SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEES)

NO. NAME OF SUBSTANTIAL NO. OF % NO. OF % SHAREHOLDERS SHARES HELD SHARES HELD (DIRECT) (INDIRECT)

1 DATO’ YEO BOON LEONG 100,769,656 21.80 - -



ANALYSIS OF SHAREHOLDINGSAS AT 10 JUNE 2020 (Cont’d)

THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS (Without aggregating the securities from different securities accounts belonging to the same Depositor)

NO. NAME OF SHAREHOLDERS NO. OF SHARES % CAPITAL

1. MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD - PLEDGED SECURITIES ACCOUNT FOR YEO BOON LEONG (MARGIN) 84,902,700 18.362. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN SOON HUI (E-SJA) 20,052,400 4.343. YEO BOON LEONG 15,866,956 3.434. YONG YEE WAN 11,638,900 2.525. LIAW KONG WAH 11,580,000 2.506. SOUTHERN REALTY RESOURCE SDN BHD 9,000,000 1.957. TAN GUEN HEOK 9,000,000 1.958. NGUI GIONG TECK 7,902,100 1.719. BOEY TZE NIN 7,805,800 1.6910. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LAI CHENG KUAN (8058893) 5,025,000 1.0911. YAP SING KHON 4,570,000 0.9912. HLIB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR KONG TIAM (CCTS) 4,560,450 0.9913. AFFIN HWANG NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LIAW JING QUAN (LIA0313C) 3,968,000 0.8614. YU KIM LUNG 3,785,000 0.8215. SAM KEAT KEONG 3,598,500 0.7816. LOH KENG ONG 3,430,000 0.7417. AFFIN HWANG NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LIAW JING XIAN (LIA0253C) 3,284,000 0.7118. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN LAY PENG (E-TAI) 3,000,000 0.6519. YEO BOON THAI 2,722,719 0.5920. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LAI CHENG KUAN (8070081) 2,500,000 0.5421. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LIM TECK SENG (7004977) 2,500,000 0.5422. CHIA SONG SWA 2,450,000 0.5323. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR YAP CHIN YU (E-PKG) 2,400,000 0.5224. CHUNG YOKE CHEN 2,300,000 0.5025. AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD. PLEDGED SECURITIES ACCOUNT FOR LIAU KO SAN (LIA0039C) 2,154,600 0.4726. HLB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR GOH ENG THYE 2,000,000 0.4327. LIM SENG LEE 2,000,000 0.4328. YU KIM LUNG 2,000,000 0.4329. NYEO HOCK KIAT 1,984,000 0.4330. LIAW CHEE HOW 1,800,000 0.39

TOTAL 239,781,125 51.88



ANALYSIS OF ICPS HOLDINGSAS AT 10 JUNE 2020

IRREDEEMABLE CONVERTIBLE PREFERENCE SHARES (“ICPS”)

Issued Share Capital : 210,649,753 ICPSClass of Shares : ICPSVoting Rights : The holders of ICPS are not entitled to any voting right except in circumstances set out in the Company’s ConstitutionNumber of ICPS Holders : 672

DISTRIBUTION TABLE ACCORDING TO THE NUMBER OF ICPS HELD IN RESPECT OF ISSUED HOLDINGS

SIZE OF HOLDINGS NO. OF % NO. OF % ICPS HOLDERS ICPS HELD

1 - 99 48 7.14 127 0.00100 - 1,000 16 2.38 6,503 0.001,001 - 10,000 77 11.46 589,918 0.2810,001 - 100,000 337 50.15 16,194,529 7.69100,001 to less than 5% of issued shares 191 28.42 114,858,076 54.535% and above of issued shares 3 0.45 79,000,600 37.50

TOTAL 672 100.00 210,649,753 100.00

DIRECTORS’ SHAREHOLDINGS AS PER REGISTER OF DIRECTORS’ SHAREHOLDINGS

NO. NAME OF DIRECTORS NO. OF ICPS % NO. OF ICPS % HELD (DIRECT) HELD (INDIRECT)

1. DATO’ YEO BOON LEONG 55,340,600 26.27 - 0.002. LIM TECK SENG - 0.00 - 0.003. THOO SOON HUAT 1 0.00 - 0.004. TAN BAN TATT - 0.00 - 0.005. DATIN AZREEN BINTI ABU NOH - 0.00 - 0.00



ANALYSIS OF ICPS HOLDINGSAS AT 10 JUNE 2020 (Cont’d)

THIRTY (30) LARGEST ICPS HOLDERS (Per Record of Depositors)

NO. NAME OF SHAREHOLDERS NO. OF SHARES % CAPITAL

1. MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR YEO BOON LEONG (MARGIN) 47,940,600 22.762. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN SOON HUI (E-SJA) 12,080,000 5.733. LIAW KONG WAH 11,580,000 5.504. YONG YEE WAN 9,298,500 4.415. YEO BOON LEONG 7,400,000 3.516. CIMSEC NOMINEES (TEMPATAN) SDN BHD CIMB FOR LEE SOI GEK (PB) 4,997,500 2.377. MAYBANK NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN CHIN HOOI 4,800,000 2.288. NGUI GIONG TECK 3,879,800 1.849. AFFIN HWANG NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LIAW JING QUAN (LIA0313C) 3,868,000 1.8410. ALLIANCE GROUP NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LAI CHENG KUAN (8058893) 3,725,000 1.7711. TA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN SUN PING 3,500,000 1.6612. YAP SING KHON 2,981,001 1.4213. CGS-CIMB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN CHIN HOOI (MP0137) 2,600,000 1.2314. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LIM KONG HWEE (E-KPG/SGK) 2,407,800 1.1415. YU KIM LUNG 2,200,000 1.0416. CHEAH CHEOW PHENG 2,000,100 0.9517. TAN KOK KEONG 1,800,000 0.8518. YEO BOON THAI 1,800,000 0.8519. SITI ZARWANIE BINTI ZAKARIA 1,600,000 0.7620. LER CHENG BOON 1,540,701 0.7321. ALBERT TAN YEAN HEONG 1,540,000 0.7322. NYEO HOCK KIAT 1,484,000 0.7023. CHEW HEE NGE 1,370,000 0.6524. TAN LAY CHONG 1,360,000 0.6525. KANAJAYA SDN BHD 1,290,601 0.6126. LIM LIAN KHAI 1,200,000 0.5727. LEE KOK HOONG 1,083,001 0.5128. LIM SENG KIAT 1,054,000 0.5029. ALLIANCE GROUP NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LEE HOCK LEYONG (8073178) 1,000,000 0.4730. CGS-CIMB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR ENG TECK KIEW (MELAKA R-CL) 1,000,000 0.47

TOTAL 144,380,604 68.50



ANALYSIS OF WARRANTS HOLDINGSAS AT 10 JUNE 2020

WARRANTS 2015/2020 (“WA”)

Class of Shares : Warrants 2015/2020 (“WA”)Number of warrants not exercised : 64,701,287 WANumber of Warrants Holders : 701

DISTRIBUTION TABLE ACCORDING TO THE NUMBER OF WARRANTS HELD IN RESPECT OF ISSUED HOLDINGS

SIZE OF HOLDINGS NO. OF % NO. OF % WARRANT WARRANT HOLDERS HELD

1 - 99 207 29.53 11,376 0.02100 - 1,000 44 6.28 22,312 0.031,001 - 10,000 65 9.27 327,600 0.5110,001 - 100,000 223 31.81 9,222,092 14.25100,001 to less than 5% of issued shares 162 23.11 55,117,907 85.195% and above of issued shares 0 0.00 0 0.00

TOTAL 701 100.00 64,701,287 100.00



ANALYSIS OF WARRANTS HOLDINGSAS AT 10 JUNE 2020 (Cont’d)

THIRTY (30) LARGEST WARRANTS HOLDERS (Per Record of Depositor)

NO. NAME WARRANT % HOLDINGS

1. MAIDEN ABDUL KADIR BIN MOHD ALI 2,500,000 3.862. GAN KENG MENG 1,972,238 3.053. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR WONG KOK HWA (E-TJJ) 1,500,000 2.324. GAN HOO SUN 1,480,836 2.295. HLIB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR KONG TIAM (CCTS) 1,367,919 2.116. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR NG YIH JING (E-KLG) 1,317,776 2.047. SUN, PAI-YIN 1,279,992 1.988. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR GOH SWEE KEAT (E-BPJ/JKA) 1,260,682 1.959. YU KIM LUNG 1,081,014 1.6710. YU KIM LUNG 966,941 1.4911. KENANGA NOMINEES (TEMPATAN) SDN. BHD. RAKUTEN TRADE SDN. BHD. FOR TAN EVON 900,700 1.3912. MAYBANK NOMINEES (TEMPATAN) SDN BHD LEE KIAN HUI 875,800 1.3513. LOW CHIN SIN 802,124 1.2414. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR NG KONG THIAM (E-SPG) 800,000 1.2415. LEE SOON SOO 782,186 1.2116. AFFIN HWANG NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LIAW JING QUAN (LIA0313C) 730,315 1.1317. HLIB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LIEW YOON KEONG 700,200 1.0818. JF APEX NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR KHOO YIK CHOU (STA 1) 658,888 1.0219. LIM BOON TI 602,918 0.9320. KENANGA NOMINEES (TEMPATAN) SDN. BHD. PLEDGED SECURITIES ACCOUNT FOR JULIAN CHEAH WAI MENG 600,000 0.9321. LIM ENG KOOI 600,000 0.9322. MAIDEN ABDUL KADIR BIN MOHD ALI 599,800 0.9323. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR SARJEET SINGH A/L H BACHAN SINGH (E-KLG/JTH) 589,826 0.9124. AMSEC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR CHIM FOONG MAY 572,946 0.8925. LOW QUEEN LAN @ LAU QUEEN LAN 572,946 0.8926. YAP SWEE YIN 572,946 0.8927. CHOK THIAM YEE 527,110 0.8128. LOO YOKE KENG 515,651 0.8029. YEOH PHEE SOON 515,651 0.8030. NG LAI HENG 500,000 0.77

TOTAL 27,747,405 42.90



ANALYSIS OF WARRANTS HOLDINGSAS AT 10 JUNE 2020

WARRANTS 2017/2022 (“WB”)

Class of Shares : Warrants 2017/2022 (“WB”)Number of warrants not exercised : 83,389,970 WBNumber of Warrants Holders : 779

DISTRIBUTION TABLE ACCORDING TO THE NUMBER OF WARRANTS HELD IN RESPECT OF ISSUED HOLDINGS

SIZE OF HOLDINGS NO. OF % NO. OF % WARRANT WARRANT HOLDERS HELD

1 - 99 65 8.34 3,253 0.00100 - 1,000 24 3.08 12,788 0.021,001 - 10,000 228 29.26 1,206,790 1.4410,001 - 100,000 317 40.69 12,240,213 14.68100,001 to less than 5% of issued shares 143 18.36 60,906,926 73.045 % and above of issued shares 2 0.26 9,020,000 10.82

TOTAL 779 100.00 83,389,970 100.00



ANALYSIS OF WARRANTS HOLDINGSAS AT 10 JUNE 2020 (Cont’d)

THIRTY (30) LARGEST WARRANTS HOLDERS (Per Record of Depositor)

NO. NAME WARRANT % HOLDINGS

1. PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN SOON HUI (E-SJA) 4,520,000 5.422. LOH TEIK HUAT 4,500,000 5.403. MAIDEN ABDUL KADIR BIN MOHD ALI 3,000,000 3.604. LER CHENG BOON 2,271,900 2.725. FRANCIS CHAI KIM LUNG 1,987,400 2.386. TEO AH SENG 1,800,000 2.167. LIM YEE YIK 1,700,000 2.048. BOEY GOON YORK 1,500,000 1.809. TA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN SUN PING 1,500,000 1.8010. ONG LOO CHOON 1,425,000 1.7111. CIMSEC NOMINEES (TEMPATAN) SDN BHD CIMB FOR LEE SOI GEK (PB) 1,320,700 1.5812. HLIB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR BOON KIM YU (CCTS) 1,100,000 1.3213. LIM YEN EE 1,020,900 1.2214. CHIN KIAN FONG 1,000,000 1.2015. MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD - PLEDGED SECURITIES ACCOUNT FOR VINCENT PHUA CHEE EE 1,000,000 1.2016. MUNIANDY A/L RAMSAMY 1,000,000 1.2017. TYE SOK CIN 995,650 1.1918. MAIDEN ABDUL KADIR BIN MOHD ALI 955,000 1.1519. TOK CHIN THIAM 938,000 1.1220. YU KIM LUNG 937,875 1.1221. CHIANG WAN KIN 900,000 1.0822. NG CHEE CHENG 900,000 1.0823. GOH CHAI SENG 800,000 0.9624. KENANGA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR JULIAN CHEAH WAI MENG 750,000 0.9025. HLIB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LIEW YOON KEONG 649,400 0.7826. CHIA SONG SWA 637,500 0.7627. TAN POH YON REALTY SDN. BHD. 632,500 0.7628. MOHAMAD FAUD BIN ABDUL RAHMAN 613,200 0.7429. KENANGA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TANG SANG SENG (010) 612,500 0.7330. CHEW HEE NGE 600,000 0.72

TOTAL 41,567,275 49.84



NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting of the Company will be conducted on a fully virtual basis at the Broadcast Venue at the Conference Room of Asia Poly Industrial Sdn. Bhd., Lot 758, Jalan Haji Sirat, Mukim Kapar, 42100 Klang, Selangor Darul Ehsan on Thursday, 6 August 2020 at 10.00 a.m., for the following purposes:

AS ORDINARY BUSINESS

1. To receive the audited Financial Statements of the Company for the financial year ended 31 December 2019 together with the Reports of the Directors and Auditors thereon. (Please refer Explanatory Note (a))

2. To approve the payment of Directors’ Fees of RM390,000 in respect of the financial year ending 31 December 2020. (Ordinary Resolution 1)

3. To approve the payment of Directors’ benefits to the Directors up to an amount of RM150,000 for the period commencing from 7 August 2020 until the next Annual General Meeting of the Company. (Ordinary Resolution 2)

4. To re-elect Mr. Lim Teck Seng, the Director who retires pursuant to Article 110 of the Company’s Constitution and being eligible, offers himself for re-election. (Ordinary Resolution 3)

5. To re-elect Mr. Tan Ban Tatt, the Director who retires pursuant to Article 110 of the Company’s Constitution and being eligible, offers himself for re-election. (Ordinary Resolution 4)

6. To re-elect Datin Azreen Binti Abu Noh, the Director who retires pursuant to Article 109 of the Company’s Constitution and being eligible, offers herself for re-election. (Ordinary Resolution 5)

7. To re-appoint Messrs. Crowe Malaysia PLT (LLP0018817-LCA & AF1018) as Auditors of the Company for the ensuring year and to authorise the Directors to fix their remuneration. (Ordinary Resolution 6)

AS SPECIAL BUSINESS

8. To consider and if thought fit, to pass the following resolutions:

(a) Authority To Directors To Issue Shares

“THAT subject always to the Constitution of the Company, the Companies Act 2016 (“Act”), the ACE Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the approvals of the relevant governmental/ regulatory authorities, where required, the Directors of the Company, be and are hereby authorised and empowered pursuant to Sections 75 and 76 of the Act, to issue and allot shares in the Company to such persons, at any time, and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued does not exceed 20% of the total number of issued shares of the Company at any point of time AND THAT the Directors be and also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Securities AND THAT such authority shall continue in force until the conclusion of the next Annual General Meeting.” (Ordinary Resolution 7)

b) Proposed Amendment to the Constitution of the Company

“THAT the proposed amendment to the Constitution of the Company as set out below, be and is hereby approved and adopted AND THAT the Directors and/or Secretary of the Company be authorised to take all steps as are necessary and expedient in order to implement, finalise and give full effect to the said proposed amendment for and on behalf of the Company:-

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING



8. To consider and if thought fit, to pass the following resolutions: (Cont’d)

b) Proposed Amendment to the Constitution of the Company (Cont’d)

Existing Article 101- Deposit of instrument of proxy

The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notary certified copy of that power or authority, shall be deposited at the Office or at such other place within Malaysia as is specified for that purpose in the notice convening the meeting, not less than forty eight (48) hours before the time appointed for holding the meeting or adjourned meeting, as the case may be, which the person named in the instrument proposes to vote, or, in the case of a poll, not less than twenty-four (24) hours before the time appointed for the taking of the poll, and in default, the instrument of proxy shall not be treated as valid.

Proposed Article 101- Deposit of instrument of proxy

The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notary certified copy of that power or authority, shall be deposited at the Office or at such other place within Malaysia or by way of electronic means or in such other manner as is specified for that purpose in the notice convening the meeting, not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting, as the case may be, which the person named in the instrument proposes to vote, or, in the case of a poll, not less than twenty-four (24) hours before the time appointed for the taking of the poll, and in default, the instrument of proxy shall not be treated as valid. (Special Resolution 1)

9. To transact any other business of which due notice shall have been given.

BY ORDER OF THE BOARD

-------------------------------------HO MENG CHAN (MACS 00574)SSM PC No. 202008003175WU SIEW HONG (MAICSA 7039647)SSM PC No. 202008002457Secretaries

Petaling Jaya,Selangor Darul Ehsan.25 June 2020

Notes: -

1) The Seventeenth Annual General Meeting will be conducted on a fully virtual basis through live streaming and online remote voting via Remote Participation and Voting (“RPV”) facilities which are available on Boardroom Smart Investor Portal at https://www.boardroomlimited.my. Please follow the procedures provided in the Administrative Notes for the Seventeenth Annual General Meeting in order to register, participate and vote remotely via the RPV facilities.

2) The Broadcast Venue is strictly for the purpose of complying with Section 327(2) of the Act which requires the Chairman of the meeting to be present at the main venue of the meeting. Members/proxies will not be allowed to be physically present at the Broadcast Venue on the day of the meeting.

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING(Cont’d)



3) A member of the Company entitled to participate, speak and vote at the meeting shall be entitled to appoint more than one (1) proxy to participate, speak and vote in his/her stead. Where a member appoints more than one (1) proxy, the appointments shall be invalid unless he/she specifies the proportions of his/her shareholdings to be represented by each proxy. A proxy may not be a member of the Company. A proxy appointed to participate and vote at the meeting shall have the same rights as the member to speak in the meeting.

4) The instrument appointing a proxy shall be in writing signed by the appointor or by his/her attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or signed by an officer or attorney duly authorised.

5) Where a member of a Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

6) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) , there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. The appointment of multiple proxies shall not be valid unless the proportion of the shareholdings represented by each proxy is specified.

7) The instrument appointing a proxy and the power of attorney or other authority duly authorised in writing or if such appointor is a Corporation, under its common seal or under the hand of an officer or attorney of the Corporation duly authorised, shall be deposited at the Share Registrar’s office of the Company, at 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time appointed for holding the meeting or adjourned meeting.

8) Depositors who appear in the Record of Depositors as at 30 July 2020 shall be regarded as Member of the Company entitled to attend the Seventeenth Annual General Meeting or appoint a proxy or proxies to attend and vote on his/her behalf.

EXPLANATORY NOTES

a) This Agenda item is meant for discussion only, as the provision of Section 340(1)(a) of the Act does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

b) Ordinary Resolution 1 – Directors’ Fees payable

The Directors’ Fees payable is computed based on the targeted Board size for the financial year ending 31 December 2020. In the event the proposed amount is insufficient, approval will be sought at the next Annual General Meeting for additional Directors’ Fees to meet the shortfall.

c) Ordinary Resolution 2 – Directors’ benefits payable

The proposed Directors’ benefit payable comprises allowances and other benefits.

The total estimated amount of Directors’ benefits payable is calculated based on the estimated number of Board’s and Board Committees’ meetings for the period from 7 August 2020 until the next Annual General Meeting and the provision for other benefits (if any).

In the event that the proposed Directors’ benefits payable is insufficient, approval will be sought at the next Annual General Meeting for additional Directors’ benefits to meet the shortfall.




d) Ordinary Resolution 7 – Authority To Directors To Issue Shares

The Company had at its Sixteenth Annual General Meeting held on 30 May 2019, obtained a general mandate pursuant to Sections 75 and 76 of the Act from its shareholders, to empower the Directors to issue and allot shares in the Company up to and not exceeding 10% of the issued share capital of the Company for such purposes as they consider would be in the interest of the Company. This 10% General Mandate will expire at the conclusion of the Seventeenth Annual General Meeting. As at the date of this Notice, no new shares in the Company were issued and allotted pursuant to this General Mandate.

The proposed Ordinary Resolution 7 under item 8 of the agenda is to seek a general mandate to empower the Directors of the Company pursuant to Sections 75 and 76 of the Act, to issue and allot ordinary shares at any time to such persons in their absolute discretion without convening a general meeting provided that the aggregate number of the shares issued does not exceed 20% of the total number of issued shares of the Company at any point of time (“20% General Mandate”).

This 20% General Mandate, unless revoked or varied at general meeting, will expire at the next Annual General Meeting.

In view of the challenging time due to the COVID-19 pandemic, Bursa Securities had on 16 April 2020 introduced this 20% General Mandate as an interim relief measure to allow a listed issuer to seek a higher general mandate under Rule 6.04 of the Listing Requirements of Bursa Securities of not more than 20% of the total number of issued shares for issue of new securities.

With this 20% General Mandate, the Company will be able to raise funds for the purpose of funding future investment, working capital and/or acquisitions. The Board, having considered the current and prospective financial position, needs and capacity of the Company, is of the opinion that the 20% General Mandate is in the best interest of the Company and its shareholders.

e) Special Resolution 1 - Proposed Amendment to the Constitution of the Company

The Special Resolution 1 under item 8, if passed, will enhance the administrative efficiency on handling the Proxy Form.




ASIA POLY HOLDINGS BERHAD(Registration No. 200301016756 (619176-A))

(Incorporated in Malaysia)

Administrative Notes for the Seventeenth Annual General Meeting

Date : Thursday, 6 August 2020Time : 10.00 a.m. Broadcast Venue : The Conference Room of Asia Poly Industrial Sdn Bhd Lot 758, Jalan Haji Sirat Mukim Kapar, 42100 Klang Selangor Darul Ehsan

Remote Participation and Voting at Full Virtual Meeting

The Company’s Seventeenth Annual General Meeting (“AGM”) will be conducted on a fully virtual basis through live streaming and online remote voting via Remote Participation and Voting (“RPV”) facilities which are available on Boardroom Smart Investor Portal at https://www.boardroomlimited.my.

The Chairman of the AGM will be at the Broadcast Venue in compliance with Section 327(2) of the Companies Act 2016. No member or proxy shall be physically present at the Broadcast Venue.

Entitlement to Participate and Vote

Only members whose names appear in the Record of Depositors on 30 July 2020 (General Meeting Record of Depositors) shall be eligible to participate in the AGM or appoint proxy(ies) to participate, speak and /or vote on his/her behalf.

As guided by the Securities Commission’s Guidance and FAQs on the Conduct of General Meetings for Listed Issuers that was issued on 18 April 2020 and subsequently revised on 14 May 2020 and 11 June 2020, the right to speak is not limited to verbal communication only but includes other modes of expression. Therefore, all members or proxies shall communicate with the main venue of the AGM via real time submission of typed texts through a text box within Boardroom Smart Investor Portal’s platform during the live streaming of the AGM or email questions to [email protected] prior to the AGM.

Appointment of Proxy

Members are encouraged to participate and vote at the AGM remotely via RPV facilities. If a member is not able to participate in the AGM via RPV facilities, he/she may appoint another person or the Chairman of the AGM as his/her proxy and indicate the voting instructions in the Proxy Form.

Please take note that you must complete the Proxy Form for the AGM should you wish to appoint a proxy(ies).

Your may download the Proxy Form for the AGM from the Group’s website at https://www.asiapoly.com.my.

ADMINISTRATIVE NOTES



Please ensure the original proxy form is deposited at the Share Registrar’s office of the Company, at 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan not later than Tuesday, 4 August 2020, 10.00 a.m., 48 hours before the time appointed for holding the AGM.

Corporate shareholders, authorised nominees and exempt authorised nominees are to refer to “Step 2 – Submit Request for Remote Participation User ID and Password” below.

Revocation of Proxy

If you decide to change your proxy or wish to participate in the AGM by yourself after you have deposited the Proxy Form, please write in to [email protected] to revoke the earlier appointed proxy not later than Tuesday, 4 August 2020, 10.00 a.m., 48 hours before the AGM.

Poll Voting

The voting will be conducted by poll in accordance with Rule 8.31A of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad. The Company has appointed Boardroom Share Registrars Sdn Bhd (“Boardroom”) as Poll Administrator to conduct the poll by way of electronic voting (e-Voting) and will appoint Scrutineers to verify the poll results.

E-Voting Procedure

1. During the AGM, the Chairman will invite the Poll Administrator to brief on the e-Voting housekeeping rules. The voting session will commence as soon as the Chairman calls for the poll to be opened and until such time when the Chairman announces the closure of the poll.

2. E-voting could be carried out via the following voting devices:-a. Personal smart mobile phones ; b. Tablets ; orc. Laptops ;

3. There are 3 methods for members and proxies to use either one of the above devices to vote:-

a. Download the free Lumi AGM from Apple App Store or Google Play Store prior to the meeting ORb. Using QR Scanner Code given in the email to you ORc. Using website URL: https://web.lumiagm.com

4. The polling will only commence after the announcement of poll being opened by the Chairman and until such time when the Chairman announces the closure of poll.

5. The Scrutineers will verify the poll result reports upon closing of the poll session by the Chairman. The Scrutineers will announce the results thereafter, and the Chairman will declare whether the resolutions put to vote were successfully carried or not.

ADMINISTRATIVE NOTES (Cont’d)



Registration for Remote Participation and Electronic Voting

Step-by-step procedure for registration:-

Step 1 – Register Online with Boardroom Smart Investor Portal (for first time registration only)

[Note: If you have already signed up with Boardroom Smart Investor Portal, you are not required to register again. You may proceed to Step 2. Submit request for Remote Participation user ID and Password.]

a. Access website https://boardroomlimited.myb. Click <<Login>> and click <<Register>> to sign up as a user. c. Complete registration and upload softcopy of MyKAD (front and back) or Passport. d. Please enter a valid email address and wait for Boardroom’s email verification. e. Your registration will be verified and approved within one business day and an email notification will be sent to you.

Step 2 – Submit Request for Remote Participation User ID and Password

[Note: The registration for remote access will be opened on 25 June 2020]

Individual Members

- Login to https://boardroomlimited.my using your User ID and Password above. - Select “Hybrid/Virtual Meeting” from the main menu and select the correct Corporate Event “Asia Poly Holdings

Berhad’s AGM”. - Enter your CDS Account. - Read and agree to the terms & condition and thereafter submit your request.

Corporate Shareholders

- Write in to [email protected] by providing the name of Member, CDS Account Number accompanied with the Certificate of Appointment of Corporate Representative or Proxy Form to submit the request; and

- Provide a photocopy of the corporate representative’s MyKAD (front and back) or passport together with his/her email address.

Authorised Nominee and Exempt Authorised Nominee

- Write in to [email protected] by providing the name of Member, CDS Account Number accompanied with the Proxy Form to submit the request; and

- Provide a photocopy of the proxy holder’s MyKAD (front and back) or passport together with his/her email address.

a. You will receive a notification from Boardroom that your request has been received and is being verified.b. Upon system verification against the General Meeting Record of Depositors, you will receive an email from

Boardroom either approving or rejecting your registration for remote participation. c. You will also receive your remote access User ID and Password along with the email from Boardroom if your

registration is approved.d. Please note that the closing time to submit your request is at 10.00 a.m. on 4 August 2020 (48 hours before the

commencement of AGM).




Step 3 – Login to Virtual Meeting Portal

[Please note that the quality of the connectivity to Virtual Meeting Portal for live web cast as well as for remote online voting is highly dependent on the bandwidth and the stability of the internet connectivity available at the location of the remote users.]

a. The Virtual Meeting portal will be open for login starting from 9.00 a.m. on 6 August 2020 (AGM to commence at 10.00 a.m.).

b. Follow the steps given to you in the email along with your remote access user ID and password to login to the Virtual Meeting portal. (Refer to Step 2(c) above)

c. The steps will also guide you how to view live web cast, ask questions and vote. d. The live web cast will end and the Messaging window will be disabled the moment the Chairman announces the

closure of the AGM.e. You can now logout from Virtual Meeting Portal.

Participation at AGM

The Chairman and the Directors will endeavour their best to respond to the questions submitted by members/proxies which are related to the resolutions to be tabled at the AGM.

Members/proxies may proceed to cast votes on each of the proposed resolutions, to be tabled at the AGM respectively after the Chairman has opened the poll on the resolutions. Members/proxies are reminded to cast their votes before the poll is closed.

Enquiry

Should you have any query, please contact Boardroom at 03-7890 4700 or email to [email protected].

Personal data privacy

By submitting an instrument appointing a proxy(ies) and/or representative(s) to participate, speak and vote at the AGM and/or any adjournment thereof, a member of the Company:

(i) consents to the collection, use and disclose of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agent) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”);

(ii) warrants that the member has obtained the prior consent of such proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies), and/or representative(s) for the Purposes; and

(iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses, and damages as a result of the member’s breach of warranty.


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ASIA POLY HOLDINGS BERHAD [Registration No. 200301016756 (619176-A)]

(Incorporated in Malaysia)

PROXY FORM

Notes: -

1) The Seventeenth Annual General Meeting will be conducted on a fully virtual basis through live streaming and online remote voting via Remote Participation and Voting (“RPV”) facilities which are available on Boardroom Smart Investor Portal at https://www.boardroomlimited.my. Please follow the procedures provided in the Administrative Notes for the Seventeenth Annual General Meeting in order to register, participate and vote remotely via the RPV facilities.

2) The Broadcast Venue is strictly for the purpose of complying with Section 327(2) of the Companies Act, 2016 which requires the Chairman of the meeting to be present at the main venue of the meeting. Members/proxies will not be allowed to be physically present at the Broadcast Venue on the day of the meeting.

3) A member of the Company entitled to participate, speak and vote at the meeting shall be entitled to appoint more than one (1) proxy to participate, speak and vote in his/her stead. Where a member appoints more than one (1) proxy, the appointments shall be invalid unless he/she specifies the proportions of his/her shareholdings to be represented by each proxy. A proxy may not be a member of the Company. A proxy appointed to participate and vote at the meeting shall have the same rights as the member to speak in the meeting.

4) The instrument appointing a proxy shall be in writing signed by the appointor or by his/her attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or signed by an officer or attorney duly authorised.

5) Where a member of a Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

6) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) , there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. The appointment of multiple proxies shall not be valid unless the proportion of the shareholdings represented by each proxy is specified.

7) The instrument appointing a proxy and the power of attorney or other authority duly authorised in writing or if such appointor is a Corporation, under its common seal or under the hand of an officer or attorney of the Corporation duly authorised, shall be deposited at the Share Registrar’s office of the Company, at 11th Floor, Menara Symphony, No. 5, Jalan Prof. Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time appointed for holding the meeting or adjourned meeting.

8) Depositors who appear in the Record of Depositors as at 30 July 2020 shall be regarded as Member of the Company entitled to attend the Seventeenth Annual General Meeting or appoint a proxy or proxies to attend and vote on his/her behalf.

I/We, NRIC No./Passport No./ Company No ( Full name in capital letters)Tel No. /HP No. Email Address of (full address)

being a member(s ) of the above Company, hereby appoint : Full Name (in capital letters as per NRIC/Passport) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Tel No. /HP No. : Email Address :

Address

*and / or failing him/herFull Name (in capital letters as per NRIC/Passport) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Tel No. /HP No. : Email Address :

Address

or failing him/her, the Chairman of the Meeting as *my/our proxy to vote for *me/us on *my/our behalf at the Seventeenth Annual General Meeting of the Company to be conducted on a fully virtual basis at the Broadcast Venue at the Conference Room of Asia Poly Industrial Sdn Bhd, Lot 758, Jalan Haji Sirat, Mukim Kapar, 42100 Klang, Selangor Darul Ehsan on Thursday, 6 August 2020 at 10.00 a.m. or at any adjournment thereof.* Delete whichever is inapplicablePlease indicate with an “X” in the spaces provided below how you wish your votes to be casted. If no specific direction as to voting is given, the proxy will vote or abstain at his/her discretion.

Item Agenda

1. To receive the audited Financial Statements of the Company for the year ended 31 December 2019 together with the Reports of the Directors and Auditors thereon

FOR AGAINST

2. Ordinary Resolution 1- To approve the payment of Directors’ Fees of RM390,000

3. Ordinary Resolution 2- To approve the payment of Directors’ benefits to the Directors up to an amount of RM150,000

4. Ordinary Resolution 3- To re-elect Lim Teck Seng as Director

5. Ordinary Resolution 4- To re-elect Tan Ban Tatt as Director

6. Ordinary Resolution 5- To re-elect Datin Azreen Binti Abu Noh as Director

7. Ordinary Resolution 6- To re-appoint Auditors and to authorise the Directors to fix their remuneration

8. Ordinary Resolution 7- To empower the Directors of the Company to issue shares pursuant to Sections 75 and 76 of the Companies Act,

20169. Special Resolution 1

- To approve the Proposed Amendment to the Constitution of the Company

Signature of Member / Common Seal

Dated this day of , 2020.

CDS account no.

No. of Shares held

FOLD THIS FLAP FOR SEALING

FOLD HERE

FOLD HERE

STAMP

Asia Poly Holdings Berhad[Registration No: 200301016756 (619176 - A)]

C/O Boardroom Share Registrars Sdn Bhd11th Floor, Menara Symphony,

No. 5, Jalan Prof. Khoo Kay Kim,Seksyen 13,

46200 Petaling Jaya, Selangor Darul Ehsan


Lot 758, Jalan Haji Sirat, Mukim Kapar,42100 Klang, Selangor Darul Ehsan, Malaysia.T | +603.3342 2567 / 3341 8604F | +603.3341 8320www.asiapoly.com.my

Asia Poly AR2019_CB - I3investor

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