th - malaysiastock.biz Non-Executive Director in Tradewinds Corporation Berhad and united Malayan Land Berhad. He is a director of Megaplace Sdn. Bhd., which is the substantial …

Notice of Annual General Meeting 2

Statement Accompanying Notice of AGM 4

Corporate Information 7

Directors’ Profile 8

Audit Committee Report 10

Chairman’s Statement 14

Management Discussion and Analysis 16

Statement on Corporate Governance 18

Statement on Directors’ Responsibility 26

Statement on Risk Management and Internal Control 27

Additional Compliance Information 29

Directors’ Report 30

Statement by Directors 34

Statutory Declaration 34

Independent Auditors’ Reports 35

Consolidated Statement of Financial Position 39

Consolidated Statement of Profit or Loss and Other Comprehensive Income 40

Consolidated Statement of Changes in Equity 41

Consolidated Statement of Cash Flows 42

Statement of Financial Position 44

Statement of Profit or Loss and Other Comprehensive Income 45

Statement of Changes in Equity 46

Statement of Cash Flows 47

Notes to the Financial Statements 48

Financial Highlights 87

Statistics of Shareholdings 88

Properties of the Group 90

Proxy Form

CON

TEN

TS

AMTEK HOLDINGS BERHAD

2

NOTiCE Of ANNuAl GENErAl MEETiNG

NOTiCE iS HErEBY GiVEN that the 34th Annual General Meeting of the Company will be held at Auditorium Room, Islamic Arts Muzium Malaysia, Jalan Perdana, 50480 Kuala Lumpur on Thursday, 22 November 2018 at 11.45 a.m. for the following purpose: -

AGENDA

(resolution 1)

(resolution 2)

(resolution 3)

(resolution 4)

(resolution 5)

(resolution 6)

As Ordinary resolutions:

1. To receive and adopt the Audited Financial Statements for the financial year ended 30 June 2018 and the Report of the Directors and Auditors thereon. Please refer to Note A.

2. To approve payment of Directors’ fees for the financial year ended 30 June 2018.

3. To re-elect the retiring Director, under Article 101 of the Company’s Articles of Association:

(a) Encik Ahmad bin Abu Bakar

(b) Mr. Thong Teong Bun

4. To re-appoint Messrs Peter Chong & Co. as Auditors and authorise the Directors to fix their remuneration.

As Special resolution:

To consider and, if thought fit, to pass the following Resolution, with or without modifications:

5. CONTiNuiNG iN OffiCE AS iNDEPENDENT NON-EXECuTiVE DirECTOrS

(a) THAT approval be and is hereby given for Mr. Thong Teong Bun, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting of the Company.

(b) THAT approval be and is hereby given for Encik Ahmad bin Abu Bakar, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting of the Company.

6. To transact any other business for which due notice has been given.

BY ORDER OF THE BOARD

MuHAMMAD BiN MOHD TAiB (lS 006194)Company Secretary

Kuala LumpurDated this 31 October 2018

ANNUAL REPORT 2018

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NOTICE OF ANNuAL GENERAL MEETING (cont’d)

Note A:

This Agenda item is meant for discussion only as under the provisions of Section 340(1)(a) of the Companies Act 2016, the Audited Financial Statements and the Report of the Directors and Auditors do not require the formal approval of shareholders and hence, the matter will not be put for voting.

Proxy:

1. In respect of deposited securities, only a depositor whose names appear in the Record of Depositors on 14 November 2018 shall be eligible to attend the meeting or appoint proxy(ies) to attend .and/or vote in his/her stead.

2. A member of the Company entitled to attend and vote at the AGM is entitled to appoint proxy(ies) to attend and vote in his stead. When a member appoints more than one (1) proxy, the appointments shall be invalid unless the proportion of the shareholdings to be represented by each proxy is specified. A proxy need not be a member of the Company and a member may appoint any person to be his/her proxy without limitation.

3. If the appointer is a corporation, this form must be executed under its Common Seal or hand of its attorney.

4. In the event the member duly executes the Form of Proxy but does not name any proxy, such member shall be deemed to have appointed the Chairman of the meeting as his proxy.

5. Where a member is an authorized nominee as defined under the Securities Account (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. To be valid this Form duly completed must be deposited at the registered office of the Company at 110 Jalan Maarof, Bangsar Baru, 59000 Kuala Lumpur not less than forty-eight (48) hours before the time set for holding the meeting or any adjourment thereof.

7. Pursuant to Paragraph 8.29A (1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all the resolutions set out in this Notice will be put to vote by way of a poll.


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STATEMENT ACCOMPANYiNGNOTiCE Of ANNuAl GENErAl MEETiNGPurSuANT TO PArAGrAPH 8.27 (2) Of THE MAiN MArkET liSTiNG rEquirEMENTS Of BurSA MAlAYSiA SECuriTiES BErHAD

1. Name of individuals who are standing for re-election

Directors retiring pursuant to Article 101 of the Company’s Articles of Association: -

(a) Ahmad bin Abu Bakar (Resolution 2) (b) Thong Teong Bun (Resolution 3)

2. Date, Time and Place of the Board Meetings

Type of Meeting Date Time Place

Board of Directors Meeting Thursday, 4.05 p.m. Boardroom 24 August 2017 Level 4, Wisma Commerce Dot Com No. 15, Jalan Tandang 46050 Petaling Jaya Selangor Darul Ehsan

Special Board of Directors Meeting Thursday, 3.45 p.m. Boardroom 12 October 2017 Level 4, Wisma Commerce Dot Com No. 15, Jalan Tandang 46050 Petaling Jaya Selangor Darul Ehsan

Board of Directors Meeting Wednesday, 12.50 p.m. Museum Restaurant & Café Sdn Bhd, 22 November 2017 Islamic Arts Museum Malaysia Jalan Lembah Perdana 50480 Kuala Lumpur

Board of Directors Meeting Thursday, 4.10 p.m. Boardroom 22 February 2018 Level 4, Wisma Commerce Dot Com No. 15, Jalan Tandang 46050 Petaling Jaya Selangor Darul Ehsan

Board of Directors Meeting Tuesday, 10.45 a.m. Museum Restaurant & Café Sdn Bhd, 15 May 2018 Islamic Arts Museum Malaysia Jalan Lembah Perdana 50480 Kuala Lumpur

ANNUAL REPORT 2018

5

STATEMENT ACCOMPANYINGNOTICE OF ANNuAL GENERAL MEETING (cont’d)

PuRSuANT TO PARAGRAPH 8.27 (2) OF THE MAIN MARKET LISTING REQuIREMENTS OF BuRSA MALAYSIA SECuRITIES BERHAD

3. further details of individual who are standing for re-election as Director

(A) Name : Ahmad bin Abu Bakar

Age : 63

Gender : Male

Nationality : Malaysian

Qualification : Chartered Accountant Malaysian Institute of Accountants

Position in the Company : Independent Non-Executive Director Date first appointed on The Board : 9 April 2008

Membership of Board Committees : Chairman of Audit Committee Member of : Remuneration Committee Nomination Committee

Working experience : Encik Ahmad is an Accountant by profession. He is a member of the Malaysian Institute of Accountants. He is a Director of several private limited companies.

Other directorships in public : None and listed companies

Securities holdings in the Company : None and its subsidiaries

Family relationship with any Director : None and/or major shareholder of the Company

Any conflict of interest that he has : None with the Company

List of convictions for offences within the : None past 5 years other than traffic offences and public sanction or penalty imposed by the relevant regulatory bodes, if any


6

STATEMENT ACCOMPANYINGNOTICE OF ANNuAL GENERAL MEETING (cont’d)PuRSuANT TO PARAGRAPH 8.27 (2) OF THE MAIN MARKET LISTING REQuIREMENTS OF BuRSA MALAYSIA SECuRITIES BERHAD

(B) Name : Thong Teong Bun

Age : 56

Gender : Male

Nationality : Malaysian

Qualification : MBA in Finance university of Hull Diploma in Banking and Finance

Position in the Company : Independent Non-Executive Director Date first appointed on the Board : 25 April 2006

Membership of Board Committees : Member of : Audit Committee Remuneration Committee Nomination Committee

Working experience : Mr. Thong Teong Bun graduated with an MBA in Finance from the university of Hull, united Kingdom in 1994 and a Diploma in Banking and Finance awarded by the Institut Bank-Bank Malaysia in 1989. He has wide exposures and experiences in business risk evaluations and management gather over the years working in the various senior positions in Affin Bank Berhad. Among the posts held by him are as Vice President, Head, Small and Medium Enterprise, Affin Bank Berhad (from September 2003 to September 2004), Head, Business Centre Manager, Sea Park Business Centre (from March 2004 to August 2004), Head, Business Center Manager, Port Klang Business Center (from January 2002 to February 2004), Senior Branch Manager, Port Klang Branch (from 1998 to year 2001), Branch Manager, Pandamaran Branch (from 1994 to Year 1998) and Head, Credit and Marketing, Port Klang Branch (from year 1990 to year 1994).

Other directorships in public and : None listed companies

Securities holdings In the Company and : None Its subsidiaries

Family relationship with any Director and/or : None major shareholder of the Company

Any conflict of interest that he has : None with the Company

List of convictions for offences within the : None past 5 years other than traffic offences and public sanction or penalty imposed by the relevant regulatory bodes, if any

ANNUAL REPORT 2018

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EXECuTiVE CHAirMAN

Syed Azmin bin Mohd Nursin @ Syed Nor

iNDEPENDENT NON-EXECuTiVE DirECTOrS

Ahmad bin Abu BakarDato’ Ng Tieh ChuanThong Teong Bun

COMPANY SECrETArY

Muhammad bin Mohd Taib(LS 006194)

AuDiTOrS

Peter Chong & Co.Chartered Accountants

PriNCiPAl BANkErS

CIMB Bank BerhadCIMB Islamic Bank Berhad

rEGiSTErED OffiCE

110, Jalan MaarofBangsar Baru59000 Kuala LumpurTel : 03 - 2093 2255Fax : 03 - 2095 8811

COrPOrATE iNfOrMATiON

PriNCiPAl PlACE Of BuSiNESS

Level 4, Wisma Commerce Dot ComNo. 15, Jalan Tandang46050 Petaling JayaSelangor Darul EhsanTel : 03 - 7985 5370Fax : 03 - 7782 6660

SHArE rEGiSTrAr

Plantation Agencies Sdn. Berhad3rd Floor, 2 Lebuh Pantai10300 GeorgetownPenangTel : 04 - 262 5333Fax : 04 - 262 2018

WEBSiTE

www.amtek.com.my

STOCk EXCHANGE liSTiNG

Main MarketBursa Malaysia Securities BerhadStock Name : AMTEkStock Code : 7051Sector : Consumer Products and Services


8

DirECTOrS’ PrOfilE

SYED AZMiN BiN MOHD NurSiN @ SYED NOrExecutive Chairman

Tuan Syed Azmin bin Mohd Nursin @ Syed Nor, a Malaysian, male, aged 55 and has been a Director of the Company since 15 August 1987. He is an Executive Chairman and also the member of Remuneration Committee of the Company.

He graduated with a Bachelor of Science, majoring in Business Management from university of Berkeley, united States of America. upon his graduation in 1984, he was involved in several private business ventures which included trading in commodities such as sugar, rice and palm oil. Apart from this, he was also involved in housing development, manufacturing and international trading.

In 1999, Tuan Syed Azmin incorporated Commerce Dot Com Sdn Bhd, an IT company undertaking Government Electronic Project, the largest E-Commerce project in Malaysia of which he is the Founder/Director. In 2002, he was appointed as Independent Non-Executive Director of Engtex Group Berhad. Also, in 2006, he was appointed as a Non-Independent Non-Executive Director in Tradewinds Corporation Berhad and united Malayan Land Berhad.

He is a director of Megaplace Sdn. Bhd., which is the substantial shareholder of the Company. He does not have any family relationship with any other Directors and/or a major shareholder of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past five years.

He attended all four Board Meetings and one Special Board Meeting of the Company held during the financial year ended June 2018.

AHMAD BiN ABu BAkArIndependent Non-Executive Director

Encik Ahmad bin Abu Bakar a Malaysian, male, aged 63 and is an Independent Non-Executive Director of the Company. He was appointed to the Board on 9 April 2008. He is the Chairman of the Audit Committee and the member of the Nomination and Remuneration Committee of the Company.

Encik Ahmad is an Accountant by profession. He is a member of the Malaysian Institute of Accountants. He is a Director of several private limited companies.

He does not have any family relationship with any other Directors and/or a major shareholder of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past five years.

He attended all four Board Meetings and one Special Board Meeting of the Company held during the financial year ended June 2018.

ANNUAL REPORT 2018

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DIRECTORS’ PROFILE (cont’d)

DATO’ NG TiEH CHuANIndependent Non-Executive Director

Dato’ Ng Tieh Chuan, a Malaysian, male, aged 61 and is an Independent Non-Executive Director of the Company. He was appointed to the Board on 28 June 2012. He is the Chairman of the Nomination and Remuneration Committee and the member of the Audit Committee of the Company.

Dato’ Ng is the Chief Executive Officer of the MPH Group of companies in Malaysia and Executive Director of TMR Media (Publisher of The Malaysia Reserve). He is also the Chairman of the Malaysian Institute of Management, a Member of the Emeritus Court of Fellows and a Council Member of the Outward Bound Trust of Malaysia.

In recognition of his achievements and contributions, he was conferred the Ahli Mangku Negara (AMN) by His Majesty the King of Malaysia in June 1992. In April 1999, he was conferred the Dato’ Paduka Mahkota Perak (DPMP) by His Royal Highness the Sultan of Perak, Sultan Azlan Shah in April 2001, he was appointed a Justice of the Peace (JP) by His Royal Highness the Sultan of Perak, Sultan Azlan Shah in April 2001.

In 2011, he was awarded The BrandLaureate Transformational Corporate Leader Brand ICON Leadership Award by the Asia Pacific Brands Foundation, Distinguished Personality in the National Book Industry 2011 by the National Book Foundation and conferred with the title “Confrere D’ Honneur” by Malaysia Institute of Management, presented by His Royal Highness the Sultan of Perak, Sultan Nazrin Muizzuddin Shah in 20 April 2016.

He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past five years.

He attended all four Board Meetings and absent on the Special Board Meeting of the Company held during the financial year ended June 2018. He had extended his apologies for not attending the Special Board Meeting.

THONG TEONG BuNIndependent Non-Executive Director

Mr. Thong Teong Bun, a Malaysian, male, aged 56 and is an Independent Non-Executive Director of the Company. He was appointed to the Board on 25 April 2006. He is the member of the Audit, Nomination and Remuneration Committee of the Company. He also sits on the board of several private companies involved in the international trading and logistic operations.

Mr. Thong Teong Bun graduated with an MBA in Finance from the university of Hull, united Kingdom in 1994 and a Diploma in Banking and Finance awarded by the Institut Bank-Bank Malaysia in 1989. He has wide exposures and experiences in business risk evaluations and management gather over the years working in the various senior positions in Affin Bank Berhad. Among the posts held by him are as Vice President, Head, Small and Medium Enterprise, Affin Bank Berhad (from September 2003 to September 2004), Head, Business Centre Manager, Sea Park Business Centre (from March 2004 to August 2004), Head, Business Center Manager, Port Klang Business Center (from January 2002 to February 2004), Senior Branch Manager, Port Klang Branch (from 1998 to year 2001), Branch Manager, Pandamaran Branch (from 1994 to Year 1998) and Head, Credit and Marketing, Port Klang Branch (from year 1990 to year 1994).

He does not have any family relationship with any other Directors and/or major shareholders of the Company and has no conflict of interest with the Company. He has had no convictions for offences within the past five years.

He attended three out of four Board Meetings and one Special Board Meeting of the Company held during the financial year ended June 2018. He had extended his apologies for not attending one of the Board Meeting.


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Audit Committee Members

Encik Ahmad bin Abu Bakar - Chairman, Independent Non-Executive DirectorMr. Thong Teong Bun - Independent Non-Executive DirectorDato’ Ng Tieh Chuan - Independent Non-Executive Director

Composition

The Audit Committee is appointed by the Board of Directors from amongst their members and shall comprise of not less than three (3) members of whom a majority shall be Independent Non-Executive Directors and at least one member of the Committee must be a member of the Malaysian Institute of Accountants. No alternate director shall be appointed as a member of the Committee.

The members of the Audit Committee shall then elect a Chairman from among themselves who shall be an Independent Non-Executive Director. The election of Chairman is subject to endorsement by the Board of Directors.

If a member of the Audit Committee resigns, dies or for any other reason ceases to be a member resulting in the number of members to be reduced to below three (3), the Board of Directors shall, within three (3) months of that event, appoint such members as may be required to make up the minimum number of three (3) members.

Terms of reference

The Audit Committee will have explicit authority to investigate any activities of the Group and of the Company within its terms of reference. All employees shall be directed to co-operate with any requests made by the Committee. The Committee shall be empowered to retain persons having special competence necessary to assist the Committee in fulfilling its responsibilities. The Committee shall also have the required resources to carry out its duties and also complete and unrestricted access to any information of the Company. It shall be able to convene meetings with external auditors, excluding the attendance of the executive members of the Committee, and also obtain independent professional advice.

The Primary Objectives of the Audit Committee are:

i. To provide assistance to the Board in fulfilling its fiduciary responsibilities with emphasis on best practice, policies and procedure and financial management and control, and corporate governance.

ii. To provide guidance and scope to the audit function by increasing the objectivity and independence of external and internal auditors, and providing a forum for discussion that is independent of the management.

iii. To maintain a direct line of communication between the Board with the external and internal auditors and the management.

iv. To ensure compliance with any such changes / amendments / updates / insertions / of the listing requirements and any other applicable laws and regulations, arising thereof from time to time.

The Board of Directors shall review the term of office and performance of the Audit Committee and each of its members at least once every three years to ensure that the Audit Committee and its members have carried out its duties in accordance with the terms of reference.

AuDiT COMMiTTEE rEPOrT

ANNUAL REPORT 2018

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AuDIT COMMITTEE REPORT (cont’d)

functions and Duties

The functions and duties of the Audit Committee include:

a. To consider the appointment and annual appointment of the external auditors and to determine their audit fees, after taking into consideration the independence and objectivity of the external auditors and the cost effectiveness of their audit;

b. Reviewing the quarterly interim results and annual financial statements of the Group before submission to the Board, focusing particularly on:

(i) Changes in accounting standards, policies and practices.(ii) Compliance with regulatory requirements and accounting standards.(iii) Significant adjustments resulting from the audit.(iv) The going concern assumptions.(v) Assessing the quality and effectiveness of the internal control system and the efficiency of the Group’s operations.(vi) Any significant transactions which are not a normal part of the Group’s business.(vii) The adequacy of the disclosure of information essential to a fair and full presentation of the financial affairs of the

Group.

c. Reviewing disposal and acquisition of assets;

d. Reviewing the adequacy of the scope, functions, competency and resources of the internal audit service provider and ensuring that it has the necessary authority to carry out their work;

e. Consider major findings of internal audit investigations and management’s response, and ensure that appropriate actions are taken on the recommendations of the internal audit service provider;

f. To appraise or assess the performance of the internal audit service provider;

g. Reviewing with the external auditors (in the absence of the management where necessary);

(i) The audit plans.(ii) The evaluation and effectiveness of the system of internal control and in particular the external auditors’

Management Letter and Management’s response.(iii) The audit report on the financial statements.

h. Reviewing the extent of assistance and co-operation given by the Group’s officer to the external auditors and the internal audit service provider;

i. Consider any related party transaction and conflict of interest situation that may arise within the Group or the Company including any transaction, procedure or course of conduct that raises questions of management integrity;

j. Reviewing and approve the annual report prior to presentation to the Board of Directors for approval and subsequent dispatch to the shareholders;

And together with such other functions as may be agreed to by the Audit Committee and the Board.


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Summary of Activities

For the financial year under review, the Audit Committee met for Four (4) meetings and One (1) Special Meeting and all Members of the Committee were present. The activities of the Committee were summarized below: -

financial reporting

a. Reviewed and proposed the unaudited interim results and annual financial statements of the Group to the Board of Directors for approval for announcement to Bursa Malaysia Securities Berhad.

External Auditors

a. Reviewed and discussed with the external auditors various significant and pertinent audit matters, their evaluation of the systems of internal controls and the audit reports for the Group; and

b. Reviewed and recommended to the Board the re-appointment of external auditors and their audit fees.

internal Auditors

a. Reviewed, commented and approved the Internal Audit Plan presented by the internal audit service provider; and

b. Reviewed, commented and approved the Internal Audit Report presented by the internal audit service provider on their findings as reported in the internal audit report.

risk Management

a. Reviewed the Group’s Corporate Risk Assessment update by the management and internal audit service provider and presented it to the Board of Directors.

Other Matters

a. Reviewed the Audit Committee Statement, Risk Management and Internal Control Statement, Corporate Governance Statement, Directors’ Responsibility Statement, Chairman’s Statement and Management Discussion and Analysis for approval by the Board for inclusion in the annual report;

b. Reviewed related party transactions entered into by the Group;

c. Reviewed and considered the acquisition and disposal of assets, businesses and subsidiaries as recommended by management; and

d. Discussed any other matters raised during the meeting.

The Audit Committee does not have executive power and shall report to the Board of Directors on matters considered and its recommendations thereon, pertaining to the Company and the Group. As such, at the conclusion of each Audit Committee meeting, recommendations were made to the Board of Directors for their approval. Details of the Attendance of the Audit Committee Members

Attendance Total Number Of Meetings Number Of Meetings Attended

Encik Ahmad bin Abu Bakar 5 5(Chairman, Independent Non-Executive Director)

Mr. Thong Teong Bun 5 4(Independent Non-Executive Director)

Dato’ Ng Tieh Chuan 5 4(Independent Non-Executive Director)

ANNUAL REPORT 2018

13


Date Time Place

Thursday, 3.00 p.m. Boardroom24 August 2017 Level 4, Wisma Commerce Dot Com No. 15, Jalan Tandang 46050 Petaling Jaya Selangor Darul Ehsan

Thursday, 3.15 p.m. Boardroom12 October 2017 Level 4, Wisma Commerce Dot Com No. 15, Jalan Tandang 46050 Petaling Jaya Selangor Darul Ehsan

Wednesday, 12.24 p.m. Museum Restaurant & Café Sdn Bhd22 November 2017 Islamic Arts Museum Malaysia Jalan Lembah Perdana 50480 Kuala Lumpur

Thursday, 3.00 p.m. Boardroom22 February 2018 Level 4, Wisma Commerce Dot Com No. 15, Jalan Tandang 46050 Petaling Jaya Selangor Darul Ehsan

Tuesday, 10.00 a.m. Museum Restaurant & Café Sdn Bhd15 May 2018 Islamic Arts Museum Malaysia Jalan Lembah Perdana 50480 Kuala Lumpur

Notice of Meeting and Attendance

The agenda with its supporting papers, wherever possible, for the Audit Committee meetings will be circulated before each meeting to the members of the Committee. The senior management and representative of the external auditors and internal audit service provider shall normally be invited to attend the meeting.

The Company Secretary of the Company has been the Secretary of the Committee, and the Secretary would circulate the minutes of the Audit Committee to all the members of the Audit Committee.

The quorum for a meeting is two (2) independent members.

internal Audit function

An external professional firm was appointed to provide the Internal Audit service for the Group in order to assist the Audit Committee to establish its Internal Audit function in discharging its duties in regards to the adequacy and integrity of the system of internal control.

Functions of the Internal Audit include the following major areas:

Perform regular audit activities in accordance to the annual audit plan; To review the adequacy and integrity of the internal control system; Review and comment on the effectiveness and adequacy of the existing control policies and procedures; Provide recommendation, if any, for the improvement of the control policies and procedures; and The scope and results of the Group’s Corporate Risk Assessment.

The Internal Audit Plan for the Group was presented to the Audit Committee for approval. All adverse findings and weaknesses noted during the audit visits are forwarded to the management for its attention and remedial action. In this regard, the Audit Committee is pleased to report that there were no significant adverse findings during the financial year ended 30 June 2018 that adversely affected the Group’s reputation or financial position.

There total cost incurred the financial year ended 30 June 2018 for the internal audit function is minimal (2017: RM20,000) as the Group has ceased its major retail business operation and currently focusing its effort to formulate a regularisation plan to regularise its financial condition pursuant to Paragraph 2.1(a) of Practice Note 17 of the MMLR of Bursa Securities.

The Audit Committee Report was approved by the Board of Directors on 8 October 2018.


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CHAirMAN’S STATEMENT

Dear Shareholders,

On behalf of the Board of Directors of Amtek Holdings Berhad (“Amtek”), I am pleased to present the Annual Report, incorporating the financial statements of the Group and the Company for the financial year ended 30 June 2018.

ECONOMY, iNDuSTrY TrEND AND DEVElOPMENT

The financial year ended 30 June 2018, was another challenging year for the Malaysian economy. On the external front, the unsettled political issues i.e. the Brexit continue to affect the growth of the united Kingdom economy and political instability and security issues affecting the other European economies, the emergence of protectionism - “American First” policy under the President Trump’s administration, the trade conflict between uS-China seems to be escalating into a trade war and the reported slower economic growth in a number of emerging markets were a few major events that were adding uncertainties to the world economy.

On the domestic economy, it is expected to grow at a moderate pace for 2018/2019 as the newly elected government has committed to reduce the high public debt amid a reduction in revenues caused by the abolishment of goods and services tax (“GST”) and with the re-introduction of sales and service tax (“SST 2.0”). Cost cutting measures like reviewing few selected big-ticket projects, implementation of new domestics’ policies and impending “Sacrifice” budget provided the much-needed optimism to mitigate the dampening impact arising from the continuous tightening of consumer credit by the Bank Negara Malaysia (“BNM”). Such austerity measures, though were necessary in order to reduce the budget deficit, it may result in a dampening effect on both the private consumption and investment. Against this backdrop, the Government projected a slightly better GDP growth for 2018 from estimated 4.4% in 2017 to 4.9%.

According to the 2nd quarter survey conducted by Malaysia Institute of Economic Research (“MIER”), both the Business Conditions Index (“BCI”) and Consumer Sentiments Index (“CSI”) supported by stronger external demand for cheaper Malaysian products as a result of weaker Ringgit and improved consumer income with favourable employment outlook, rebounded above the optimum level (100 index points). Although sentiments are good with optimistic disposable income and employment prospects, consumers are widely exposed to the downside risk of weaker Ringgit and the bloated household debts.

With that in view, Amtek Group will have to remain prudent and expedite it pursue of viable corporate exercise to enhance the sustainability of the Group.

fiNANCiAl rEViEW

On the back of challenging operating environments, the financial year under review reported revenue of RM15.9 million from its discontinued operation with combine net loss of RM5.2 million from its continuing operations of RM1.4 million and discontinued operation of RM3.8 million compared to RM25.8 million revenue and RM3.3 million net loss in 2016/2017. The revenue was solely derived from the Apparel & Garment Division which remains the only contributor of revenue to the Group. The weak financial performance of Apparel & Garment Division was mainly due to cessation of its apparel retail operation effective 1 February 2018 due to prolonged loss position and sluggish retail market. Despite managing to lower the consolidated net operating expenses, the significant drop in revenue and shrinking gross profit margin of its discontinued operation has resulted in a higher consolidated loss.

The announcement on the cessation of its apparel retail operation was made on the 10 January 2018 pursuant to Chapter 8, Paragraph 8.03(2)(a) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) whereby a listed issuer has suspended or ceased its major operations as a result of the disposal of the listed issuer’s major business.

On the operating expenses, the consolidated operating expenses as mentioned earlier were generally lower compared to last year (RM9.5 million in 2017/2018 from its continuing operations of RM1.5 million and discontinued operation of RM8.0 million versus RM14.5 million in 2016/2017). The decrease was mainly due to stringent and better control of operating expenses in view of the cessation of its apparel retail business.

In term of liquidity, the Group’s cash reserve was lower at RM5.2 million compared to RM7.6 million in 2016/2017. Whereas, the Group’s overall gearing and the banking facilities utilisation has gone down from RM9.0 million in 2016/2017 to RM3.1 million in 2017/2018 principally due to cessation of its apparel retail business.

ANNUAL REPORT 2018

15

CHAIRMAN’S STATEMENT (cont’d)

COrPOrATE DEVElOPMENT

On 8 January 2018, Apparel International Sdn Bhd (“AISB”), an indirect wholly-owned subsidiary of Amtek entered into a sale and purchase agreement with Crocodile International Sdn Bhd (“CISB”) (“Original SPA”) to terminate both the licence agreements for distributing and retailing the “Crocodile” brand men’s apparels and small leather goods in Malaysia and disposal of its entire Crocodile’s brand inventories and accessories for a tentative sale consideration of RM8.0 million (“Proposed Disposal”). The tentative sale consideration represented 49% of the gross value of inventories and accessories as at 31 August 2017 of approximately RM16.40 million. However, the final sale consideration will be determined based on the same percentage of the gross value of the inventories as at the cut-off date of 31 January 2018.

On 13 March 2018, AISB entered into an amended and restated sale and purchase agreement with CISB to restate the Original SPA in its entirety and clarify certain terms in the Original SPA as well as to include additional terms and conditions in relation to Proposed Disposal (“Restated SPA”). Pursuant thereto, the Original SPA shall be superseded by the Restated SPA. The final consideration in accordance with the terms and conditions of the Restated SPA was revised and agreed at RM5.60 million, being 49% of the final inventory count as at 31 January 2018. The Proposed Disposal has been approved by the shareholders vide an EGM convened on 15 May 2018 and completed on 18 May 2018 upon fulfilling all the conditions precedents as stated in the Restated SPA.

rEGulAriSATiON AND rESTruCTuriNG PlANS

On 15 January 2018, the Company made an announcement that it has triggered the prescribes criteria under Paragraph 2.1(a) of Practice Note 17 (“PN 17”) of the MMLR of Bursa Securities based on its unaudited financial statements of the Group for the financial period ended 30 November 2017 as the shareholder equity of the Group is less than RM40.0 million and is 25% or less of the issued and paid-up capital.

The Board wishes to inform all the members that we still endeavor in exploring other alternative source of business that shall bring the Group a stable and sustainable income in the future. We are fully aware of the challenges which we are facing in reviving the Company, and we shall intensify our efforts and remain committed to ensure the successful implementation of any identified viable business in enhancing the financial earnings of the Group.

fuTurE OuTlOOk

Amidst the uncertainties in the global and domestic business environment, I believe the year ahead will be another challenging year for the Group. Indeed, the Group’s main preoccupation for 2018/2019 will be focusing its effort to formulate a regularisation and restructuring plan to uplift its PN 17 status.

DiViDENDS

The Board of Directors did not recommend any dividends for the financial year ended 30 June 2018.

iN APPrECiATiON

On behalf of the Board, I would like to thank our shareholders, valued customers, bankers and business partners for their continued support and confidence in the Company.

My appreciation also goes to our management team and staff for their dedication and efforts. Last but not least, my heartfelt thanks to my fellow Board members for their support and valuable advice.

Syed Azmin bin Mohd Nursin @ Syed NorExecutive Chairman8 October 2018


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Dear Shareholders,

The Board of Directors and Management of Amtek Holdings Berhad are pleased to present the Management Discussion and Analysis to provide shareholders with an overview of the financial performance and business operations of the Group for the financial year ended 30 June 2018.

fiNANCiAl PErfOrMANCE

revenue

On the back of challenging operating environments, which led to the Board’s decision to cease the apparel operation, the Group reported a lower revenue of RM15.9 million for the financial year ended 30 June 2018 from its discontinued operation, a decrease of 38% compared to RM25.8 million in previous financial year.

This was reflected in the weaker financial performance which was mainly due to the cessation of its apparel retail operation effective 1 February 2018 upon disposal of its entire “Crocodile” brand apparel and accessories to Crocodile International Sdn Bhd coupled with sluggish retail market which was affected by unfavourable consumer market sentiments such as the tightening of consumer credit and Government austerity measures which continues to drag down the revenue of the Group.

loss for the financial Year

In view of the cessation of its apparel retail operation and weaker than expected consumer spending during the financial year, the Management has aggressively pursued its cost control measures and these measures were yielding positive results as the combine overall operating costs went down further by RM5.0 million or 34% to RM9.5 million from its continuing operations of RM1.5 million and discontinued operation of RM8.0 million compared to RM14.5 million in previous financial year. However, the savings in operating expenses were unable to improve the Group’s results due to the shrinking gross profit margin and substantial drop in revenue of RM9.9 million or 38% of its discontinued operation against the revenue of the previous financial year. Thus, the Group incurred a higher consolidated loss of RM5.2 million versus RM3.3 million in 2016/2017 and higher loss per share of 10.48 sen versus 6.52 sen in last financial year.

Shareholders’ Equity

The Group’s equity stood at RM9.4 million as at 30 June 2018, representing a decrease of RM5.3 million from RM14.7 million as recorded in last financial year. This had translated into RM0.19 net asset per share versus RM0.29 net asset per share in last financial year.

Proposed regularisation Plan

On 15 January 2018, the Company made an announcement that it has become an affected listed issuer pursuant to Practice Note 17 (“PN 17”) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) whereby the Company has triggered the prescribes criteria pursuant to Paragraph 2.1(a) of PN 17 of the MMLR of Bursa Securities based on its unaudited financial statements of the Group for the financial period ended 30 November 2017 as the shareholder equity of the Group is less than RM40.0 million and is 25% or less of the issued and paid-up capital.

As an affected issuer pursuant to Paragraph 4.0 of the PN 17, the Company is required to submit a Regularisation Plan within 12 months from 15 January 2018 to Bursa Malaysia for approval. The Company is still actively identifying and exploring any added value strategic business that could strengthen the financial condition of the Group and to regularise its financial condition under PN 17 of the MMLR of Bursa Securities.

MANAGEMENT DiSCuSSiON AND ANAlYSiS

ANNUAL REPORT 2018

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BuSiNESS OPErATiONS rEViEW

On the operation level, the year under review proved to be another challenging year. Indeed, due to the prolonged loss in its core business – garment and apparel, the Company decided to cease its apparel retail operation from first quarter of 2018 onward while focuses its effort to address the PN 17 status and exploring all possible options to revive the Company and its business operation.

The detailed operation review for the core business is depicted as follows: -

Garment and Apparel

The Garment & Apparel Division which consist of Amtek Ventures Sdn Bhd and its only apparel retailing subsidiary – Apparel International Sdn Bhd (“AISB”), a licensee for “Crocodile” brand men’s apparels and small leather goods in Malaysia, is the only income contributor in Amtek Group. The apparel retail operation ceased its operation effective 1 February 2018 pursuant to the sale and purchase agreements entered into with Crocodile International Sdn Bhd on 8 January 2018 and 13 March 2018.

In term of financial performance, AISB reported a revenue of RM15.9 million (2017: RM25.8 million) and a loss of RM7.1 million (2017: RM2.7 million). The RM5.5 million or 40% saving in operating cost from the implementation of cost control measures (RM8.3 million in 2017/2018 versus RM13.8 million in 2016/2017) were unable to improve AISB’s performance as a result of cessation of its apparel retailing operations and substantial drop in revenue of RM9.9 million and shrinking GP margin.

AISB’s trade receivables reduced to RM1.5 million in 2017/2018 compared to RM6.7 million in 2016/2017. Whilst trade payables stood at RM1.0 million in 2017/2018 compared to RM8.1 million in 2017/2016. The substantial decreased in trade receivables and payables were mainly due to the cessation of its apparel retail operation.

During the financial year under review, the value of the property, plant and equipment has been reduced to RM84,000 compared to RM6.6 million in 2017/2016. The reduction was due to the reclassification of its property which stood at RM6.0 million as at 30 June 2018 to investment property as the property has been rented to a third party for generating rental income purposes upon the cessation of its apparel retail operation. In addition, there was a plant and equipment written off of RM156,000 during the year in view of the cessation of its apparel retail operation.

Despite lower cash level, the overall cash balance which stood at RM5.0 million compared to RM7.0 million recorded in previous financial year should be adequate to cover its operational cost for a period of at least 12 months from the end of the current financial year.

MANAGEMENT DISCuSSION AND ANALYSIS (cont’d)


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STATEMENT ON COrPOrATE GOVErNANCE

The Board of Directors (“The Board”) of Amtek Holdings Berhad (“Amtek”) believes that good corporate governance is fundamental to the Group’s continued success. Therefore, the Board is committed to ensuring the highest standards of Corporate Governance are practiced throughout Amtek, as a fundamental part of discharging its responsibilities to protect and enhance the shareholders’ value and financial performance of the organization.

In line with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“MMLR”) and guided by the recommendations in the Corporate Governance Guide (2nd Edition) (“CG Guide”) issued by Bursa Securities, the Board wishes to report the manner in which the Group has maintained the standards of corporate governance by supporting and implementing the prescriptions of the principles and best practices as set out in the Malaysian Code of Corporate Governance 2012 (“CG Code”).

PriNCiPlE 1 – ESTABliSH ClEAr rOlES AND rESPONSiBiliTiES

1.1 Board Composition and Balance

Amtek is led and managed by an experienced Board, comprising members with wide range of experience in relevant fields such as commerce, accounting and management. Together, the Directors bring a broad range of skills, experiences and knowledge required to direct and supervise the Group’s business activities.

The Board currently has four (4) members comprising, one (1) Executive Chairman and three (3) Independent Non-Executive Directors. This is in compliance with paragraph 15.02 of the MMLR on board composition, which requires that one third or two; whichever is higher, of the total number of directors to be independent. The Board has a balanced composition of Executive and Non-Executive Directors so that no individuals or small group of individuals can dominate the Board’s decision making.

The Directors’ Profile is set out in pages 8 to 9 of this annual report.

1.2 Duties and responsibilities of the Board

Tuan Syed Azmin bin Mohd Nursin @ Syed Nor is the Executive Chairman of the Company, and assuming both the role of Board member as well as senior management. His role as senior management are more toward providing leadership to the managers who are tasked with performing the daily operations to ensure the objective and achievement of the corporate and business plans handed down by the Board.

More than two third of the Board comprises Non-Executive Directors and with the experience in their field of expertise, contribute in the development of the Company’s strategies, the importance of representing the interest of public shareholders and providing a balanced and independent view to the Board. All Non-Executive Directors are independent of management and free from any relationship, which could interfere with their independent judgment. As and when conflict of interest arises, the Director concerned would declare his interest and abstain from the decision-making process.

1.3 Board Charter

The Board Charter is established to provide guidance and clarity for the Board’s composition, roles and responsibilities as well as the powers and rights between the Board and the management. The Charter also contains the responsibilities of the different committees established by the Board. The Board will review the Charter and revised as and when necessary from time to time to reflect the needs of the Group and latest legal and regulatory requirements.

The core areas of duties and responsibilities of the Board and the key matters reserved for the Board are more specifically spelt out in the Charter which is available on the Company’s website at www.amtek.com.my.

1.4 Directors’ Code of Conduct

The Company’s Code of Business Conduct and Ethics (the “Code”) set forth the standard of conduct and culture of the Group is contained in the Group’s Employment Handbook. This Code requires all directors and employees to conform and observe an appropriate decorum and behavior that promote honesty and integrity when engage with both employees and stakeholders. In discharging its responsibilities, the Board is also guided by Code of Ethics for Directors issued by the Companies Commission of Malaysia.

ANNUAL REPORT 2018

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STATEMENT ON CORPORATE GOVERNANCE (cont’d)

1.5 Corporate Social responsibility and Sustainability Matters

Mindful of the need to being a corporately responsible organization, the Group undertook various steps to play its part in contributing to the welfare of the society and communities in the environment it operates. The Group recognises that for long term sustainability, its strategic orientation will need to look beyond the financial parameters in creating a competitive advantage in today’s market.

The Board and management will act as role models by incorporating Corporate Social Responsibility (“CSR”) and sustainability considerations and values into decision-making in all business activities and will ensure that appropriate organisational structures and system are in place to effectively identify, monitor and manage CSR and sustainability issues and performance relevant to the Group’s business.

The Group is aware that many activities surrounding the business operation within the Group have considerable impact on the environment and with original equipment manufacturer; we do not even take part and have little control in the massive manufacturing process of ready-made products which may contribute to the adverse impact on the environment. There is little that can be done in greening the environment without raising our costs considerably. Wherever possible, all our staffs are encouraged to recycle papers products and adopt energy saving measures.

Being a responsible corporate citizen, the Group has applied all matters relating to CSR and sustainability policies into the operations and administration of the Group and the policies implemented are consistent with Amtek’s stakeholder’s best interest. The Group is working towards demonstrating responsibility in our relationship with the communities, whether in business or socially. The management of Amtek recognizes that in doing so, it will add significant values for our shareholders. During the year, the Group supports and participates in several CSR related project such as cash donations and sponsoring of Company products to various organizations, associations, schools and community services for them to carry out their various activities.

Our employees are the valuable asset of the Group, apart from financial reward, on an ongoing basis, we also send our employees to attend various training programs to ensure they are equipped with appropriate skills and knowledge to grow and prosper together with the Company they work for.

The Group endeavours to broaden its scope of CSR initiatives and sustainability frameworks over time and will plan accordingly.

1.6 Supply of information

Each Board member receives regular reports, including a comprehensive review and analysis of the Group’s performance. Prior to each Board meeting, Directors are sent an agenda and a full set of Board papers for each agenda to be discussed at the meeting.

They are distributed within sufficient time to enable the Directors to obtain further explanations, where necessary, in order to be briefed properly before the meeting. Guidelines are in place concerning the content, presentation and delivery of papers to the Directors for each Board meeting, so that the Directors have enough information to be properly briefed. To a certain extent, the Board adopts a “Hands On” management style in which the Executive Chairman, is directly involved with the management and operations within the Group. All Directors have access to all information within the Company whether as a full Board or in their individual capacity, in furtherance of their duties.

1.7 QualifiedandCompetentCompanySecretary

The Directors also have direct access to the advice and the services of the Group’s Company Secretary who is responsible for ensuring the Board procedures are followed in discharging their duties and responsibilities with improve clarity of the regulatory environment. If necessary, the Directors may take independent professional advice at the Group’s expense, in furtherance of their duties.


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PriNCiPlE 2 – STrENGTHEN COMPOSiTiON

2.1 Board Committees

To assist the Board in discharging its duties and responsibilities, the Board has delegated specific responsibilities to three (3) Board committees namely, Audit, Nomination and Remuneration Committees. All of which are operating within their respective terms of reference which have been approved by the Board.

The Committees are authorized to examine particular issues and report back to the Board with their recommendation. The ultimate responsibility for the final decision on all matters, however, lies with the entire Board.

2.2 Audit Committee

The composition of membership, terms of reference, activities and other pertinent information about the Audit Committee is set out in pages 10 to 13 of this annual report.

2.3 Nomination Committee

The Nomination Committee was established by the Board on 26 February 2002. In compliance with the changes in the MMLR and recommendation in the CG Guide, the members in Nomination Committee comprise entirely of Independent Non-Executive Directors.

Members of the Nomination Committees are as follows: -

Chairman Dato’ Ng Tieh Chuan (Independent Non-Executive Director)

Members Encik Ahmad bin Abu Bakar (Independent Non-Executive Director)

Mr. Thong Teong Bun (Independent Non-Executive Director)

The Committee’s key functions are to nominate and recommend candidates to the Board, to consider candidates for directorship proposed by the Directors or Shareholders and recommend membership of the Board Committees. Its other responsibilities include the review of the structure, size and composition of the Board, including the effectiveness of the Board as a whole and the Board Committees and the contributions of each director towards the effective functioning of the Board.

Board Evaluation Criteria

There is a formal and transparent procedure for the appointment of new Directors to the Board, with the Nomination Committee making recommendations to the Board.

Following the appointment of new Directors to the Board, the Nomination Committee will ensure that induction programme is arranged, to enable them to get a full understanding of the nature of the businesses, current issues within the Group and the corporate strategies as well as the structure and management of the Group.

The Nomination Committee also reviews annually the required skills and experience including their core competencies which the Directors should bring to the Board. When deliberating the performance of a particular Director who is also a Nomination Committee, that member would abstained from the discussion in order to avoid any conflict of interest. Other yearly assessment includes time commitment, participation and contribution at Board meetings.

The Nomination Committee meeting held once annually and was attended by all members for the financial year ended 30 June 2018. Based on the annual review, the Nomination Committee concluded that other than the resignation of Executive Director, Encik Wan Rashid bin Dato’ Wan Mohamed during the year, there was no appointment of new member to the Board. And satisfied that each of its Directors has the character, experience, integrity, competence and time to effectively discharge their respective role.

ANNUAL REPORT 2018

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As regard to gender, ethnicity and age group diversity policies at Board, the Board does not set a specific policy on gender, ethnicity and age group diversity targets at this time.

The Board believes that there is no detriment to the Company in not adopting a formal gender, ethnicity and age group diversity policy as the Company is committed to provide fair and equal opportunities and nurturing diversity within the Company. In identifying suitable candidates for appointment to the Board, the Nomination Committee will consider candidates based on the candidates’ competency, skills, character, time commitment, knowledge, experience and other relevant qualities in meeting the needs of the Company and with due regard for the benefits of diversity on the Board.

2.4 remuneration Committee

To complement the activities of the Nomination Committee, a Remuneration Committee was established by the Board on 26 February 2002. The Committee comprises three Independent Non-Executive Directors and one Executive Chairman. The Committee’s primary responsibility is to recommend to the Board, the remuneration of Directors (Executive and Non-Executive) in all its forms, drawing from outside advice if necessary. Nevertheless, the determination of remuneration packages of the Directors is a matter for the Board as a whole and individuals are required to abstain from discussions on their own remuneration. The members are:

Chairman Dato’ Ng Tieh Chuan (Independent Non-Executive Director)

Members Encik Ahmad bin Abu Bakar (Independent Non-Executive Director)

Mr. Thong Teong Bun (Independent Non-Executive Director)

Tuan Syed Azmin bin Syed Nor (Executive Chairman)

During the financial year under review, the Remuneration Committee took note of the progress of the overhead cost reduction and staff rationalization exercise adopted Group wide.

2.5 re-election and re-appointment of Directors

In accordance with the Company’s Articles of Association on re-election and re-appointment matters, all Directors who are appointed by the Board are subject to re-election by shareholders at the first Annual General Meeting (“AGM”) after their appointment.

The Articles also provide that all Directors shall retire from office once in every three years but shall be eligible for re-election. At each AGM, one third of the remaining Directors are to offer themselves for re-election. In practice, over a number of years, this has meant that every Director has stood for re-election at least once every three years.

2.6 Directors’ remuneration

The Remuneration Committee has to consider the individual Directors’ level of executive responsibilities, involvement and contributions are commensurate with their remuneration packages, and ensure that the packages are fair and sufficient to attract and retain the Directors to pursue the long-term growth and success of the Company.

Aggregate remuneration of the Directors of the Company categorised into appropriate components for the financial year ended 30 June 2018 are as follows: -

Executive Director Non-Executive Directors rM rM

Salary and bonus 165,000 - Fees 24,000 72,000

Total 189,000 72,000


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Bands of remuneration Executive Director Non-Executive Directors rM rM RM100,000 – RM200,000 1 - RM1 – RM50,000 - 3

Total 1 3

The Directors’ fees are subject to shareholders’ approval at the Annual General Meeting.

PriNCiPlE 3 – rEiNfOrCE iNDEPENDENCE

3.1 Annual Assessment of independence

The Board currently has four (4) members comprising, one (1) Executive Chairman, and three (3) Independent Non-Executive Directors. This is in compliance with paragraph 15.02 of the MMLR on board composition, which requires that one third or two; whichever is higher, of the total number of directors to be independent.

The Nomination Committee had assessed and reviewed the annual declaration submitted by the Independence Directors and that all such directors have declared their independence and there were no reported incidents of conflict of interests.

3.2 Tenure of independent Director

The Board is mindful of the compliance of the Recommendation 3.2 and 3.3 of the CG Code on limiting the tenure of Independent Director to cumulatively or consecutively of 9 years. The Board does not set any term limit for Directors as the Board is of the opinion that the independence of a Director cannot be determined on the basis of his tenure of service, rather acknowledging the long-serving Directors valuable skills, knowledge and expertise in the Group’s business affairs and corporate development.

In this respect, the Board after considering the annual assessment conducted by the Nomination Committee, recommends that Mr. Thong Teong Bun and En. Ahmad bin Abu Bakar who has served in the capacity of Independent Director for more than 9 years, to continue to serve on the Board without re-designation as Non-Independent Directors. In line with the CG Code, a shareholders’ approval will be sought at the forthcoming 34th AGM for Mr. Thong Teong Bun and En. Ahmad bin Abu Bakar to continue serving the Company as an Independent Director.

PriNCiPlE 4 – fOSTEr COMMiTMENT

4.1 Time Commitment

The Board retains full and effective control of the Company and the Group. This includes responsibility for determining the Company’s overall strategic direction as well as, development, control and regulatory matters affecting the Group. Key matters, such as annual and interim results, acquisitions and disposals, material agreements, major capital expenditures, budgets, and long-range plans are approved by the Board.

The Board has regular scheduled meetings, at least four (4) times a year. Special Board Meetings for particular matters such as mergers, major acquisitions or disposals will be held as and when necessary. For the financial year ended 30 June 2018, the Board held Four (4) Board Meetings and One (1) Special Board Meeting. At each regularly scheduled meeting, there were full financial and business review and discussion, including updating of the performance against the annual budgets and financial plans previously approved by the Board.

ANNUAL REPORT 2018

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Four (4) Board Meetings and One (1) Special Board Meeting were held during the financial year from 1 July 2017 till 30 June 2018. The attendance of Directors at the Board Meetings is as follows:

Name Attendance

Tuan Syed Azmin bin Mohd Nursin @ Syed Nor 5/5 Encik Ahmad bin Abu Bakar 5/5 Dato’ Ng Tieh Chuah 4/5 Mr. Thong Teong Bun 4/5 Encik Wan Rashid bin Dato’ Wan Mohamed (Resigned on 28.02.2018) 4/4

4.2 Directors’ Training

Where training is concerned, all Directors appointed to the Board, apart from completed the Mandatory Accreditation Programme as required by MMLR, attended other relevant training programmes to further enhance their business acumen and professionalism in discharging their duties to the Group.

During the year, all the Directors have pursued relevant courses and seminars to keep abreast with industry, regulatory and compliance issues trends and best practices.

Particulars of training programmes attended by the Directors are as follows:

Directors Seminar / Conference Seminar / Conference Date

Tuan Syed Azmin bin MAICSA Annual Conference 2018 10 - 11 July 2018 Mohd Nursin @ Syed Nor

Dato’ Ng Tieh Chuan MAICSA Annual Conference 2018 10 - 11 July 2018

Mr. Thong Teong Bun MAICSA Annual Conference 2018 10 - 11 July 2018

Encik Ahmad bin Abu Bakar MIA International Accountants 07 - 08 November 2017 Conference 2017

PriNCiPlE 5 – uPHOlD iNTEGriTY iN fiNANCiAl rEPOrTiNG

5.1 financial reporting

The Directors have a responsibility to present a true and fair assessment of the Group’s position and prospects in the quarterly reports to Bursa Securities and the annual report to the shareholders. The Audit Committee assists the Board in scrutinizing the information contained therein to ensure accuracy, adequacy and completeness and released to Bursa Securities within the stipulated time frame and that the financial statements comply with regulatory reporting requirements. Not only does this enhance the reliability of the financial statements prepared by the management, it also promotes fruitful discourse whenever the Audit Committee engages with the internal and external auditors.

A statement outlining the activities of the Audit Committee can be found on pages 10 to 13 of this annual report.


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5.2 relationship with the Auditors

The Board maintains a transparent and professional relationship with the external auditors. During the financial year, the external auditors only provide the audit services to the Group, and the Audit Committee has requested and obtained a written assurance from the Company’s external auditors confirming their independence in accordance with existing regulatory requirements.

The external auditors, has continued to report to members of the Company on their findings which are included as part of the Company’s financial reports with respect to each year’s audit on the statutory financial statements. In doing so, the Company has established a transparent arrangement with the auditors to meet their professional requirements. From time to time, the auditors highlight to the Audit Committee and Board of Directors on matters that require the Board’s attention. Annual appointment or re-appointment of the external auditors is via shareholders’ resolution at the AGM on the recommendation of the Board.

The non-statutory audit fees incurred for services rendered to the Group by a firm affiliated to the external auditors for the financial year ended 30 June 2018 was RM9,211 (2017: RM8,800). The Board has considered and satisfied that the provision of these non-audit services during the year does not compromise the auditors’ independence.

PriNCiPlE 6 – rECOGNiSE AND MANAGE riSkS

risk Management and internal Control

The Board maintains a sound risk management framework and internal control system to safeguard shareholders’ investment and the Group’s assets. An overview of the state of risk management and internal controls of the Group is presented in the Statement on Risk Management and Internal Control on pages 27 to 28 of this annual report.

PriNCiPlE 7 – ENSurE TiMElY AND HiGH-quAliTY DiSClOSurE

7.1 Corporate Disclosure

The Company is committed to achieving high standards of corporate governance throughout the Group and to a high level of integrity and ethical standards in all its business dealings. The Board considers that it has complied throughout the financial year with the Best Practices as set out in the Code and CG Guide, and acting in the best interests of the Group and its shareholders.

7.2 Company Website

All information on the Company’s corporate profile, individual profiles of Board of Directors’, financial results, annual reports and various disclosures and announcements made to the Bursa Securities are available at the Company’s website at www.amtek.com.my.

PriNCiPlE 8 – STrENGTHEN rElATiONSHiP BETWEEN COMPANY AND SHArEHOlDErS

8.1 Dialogue between Company and investors

The Board believes that having an open, honest and on-going dialogue with investors will promote a better appreciation of the Company’s competitive strengths and allow the Company’s business and prospects to be evaluated properly, thereby enabling it to benefit from a lower cost of capital through access to the capital markets.

The Board also believes that communication must be a continual process to be accomplished in good times as well as bad times in order to be credible. Regular updates on the Company’s performance and corporate development are disseminated through media releases and announcement of the quarterly results and through the annual report. Stakeholders can access this information via the Company’s website at www.amtek.com.my.

The Company also maintains strict confidentiality and due care to ensure that no disclosure of material information is made to an individual or selective basis to any persons unless such information has previously been fully disclosed in an announcement to the relevant regulatory authorities.


ANNUAL REPORT 2018

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8.2 Annual General Meeting (“AGM”)

The Annual General Meeting is the principal forum for dialogue with shareholders. The Notice of the AGM and the annual report are sent out to shareholders at least twenty-one (21) days before the date of the meeting.

Besides the usual agenda for the AGM, the Board presents the progress and performance of the business as contained in the annual report and provides opportunities for shareholders to raise questions pertaining to the business activities of the Group. All Directors are available to provide responses to questions from the shareholders during the meetings.

Additionally, a press conference is held immediately after the AGM whereat the Chairman advises members of the media on the resolutions passed, and answer questions on the Group’s operations fielded by the reporters. The management is also present at the press conference to clarify and explain any issue raise.

8.3 Poll Voting

Pursuant to Paragraph 8.29A of the MMLR of Bursa Securities, the Company must ensure that any resolution set out in the notice of general meeting, is voted by poll. The Board will implement poll voting for all the resolutions set out in the Notice of AGM and appoint one scrutineer, who is independent of the Group to validate the votes cast at the AGM.



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The paragraph 15.27(a) of Main Market Listing Requirements of Bursa Malaysia Securities Berhad, requires the Directors to issue a statement explaining its responsibility for preparing the annual audited financial statements.

The Board acknowledges their responsibility to ensure that the financial statements of the Group and of the Company are properly drawn up in accordance with the Approved Accounting Standards and the provisions of the Companies Act 2016 in Malaysia, so as to give a true and fair view of the state of affairs of the Group and of the Company as at the end of each financial year, and of the results and cash flows of the Group and of the Company for the year then ended.

In preparing the financial statements for the year ended 30 June 2018, the Directors have ensured that:

• Appropriate accounting policies have been adopted and consistently applied;• Reasonable and prudent judgment and estimate have been made; • All applicable Financial Reporting Standard in Malaysia have been followed and complied with; and• Adequate accounting and other records required by the Act are properly kept.

The Directors have general responsibilities for taking such steps that reasonably available to them to safeguard the assets of the Group and of the Company, and to prevent and detect fraud and other irregularities and material misstatements in the Group and the Company. Such systems, by their nature, can only provide reasonable and not absolute assurance against material misstatements, loss and fraud.

The Statement of Directors’ Responsibility was approved by the Board of Directors on 8 October 2018.

STATEMENT ON DirECTOrS’ rESPONSiBiliTY

ANNUAL REPORT 2018

27

STATEMENT ON riSk MANAGEMENT AND iNTErNAl CONTrOl

iNTrODuCTiON

The Malaysian Code on Corporate Governance 2012 stipulates that the Board of Directors of listed companies maintains a sound system on risk management and internal control to safeguard shareholders’ investment and Group’s assets.

Pursuant to paragraph 15.26 (b) of the Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Main Market Listing Requirements (“MMLR”) and as guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers issued by the Task Force on Internal Control (“the Guidance”), the Board is pleased to present to the shareholders on the state of risk management and internal control of the Group during the year under review.

BOArD rESPONSiBiliTY

The Board recognises the importance of a sound system of internal controls and risk management practices towards implementation of good corporate governance. The Board acknowledges its overall responsibilities for maintaining and reviewing the adequacy and integrity of its Group’s system of internal control to ensure that the shareholders’ investment and Group’s assets are safeguarded.

The principal function of the internal control system is to identify and manage the significant risks faced by the Group’s business operations, which may impede the achievement of the Group’s objectives. However, in considering the inherent limitations of internal control system, the Board noted that the control established is designed to manage and control risk rather than to eliminate the risk of failure to achieve business objectives. Accordingly, it can only provide reasonable but not absolute assurance against material misstatements, fraud or loss.

iNTErNAl AuDiT

An external professional firm is appointed as internal auditor for the Group to assist the Audit Committee to establish its internal audit function in discharging its duties in regards to the adequacy and integrity of the system of risk management and internal control. Periodical internal audit reviews were carried out and the results of the reviews and action plans were co-developed with management and thereafter presented directly to the Audit Committee to further enhance the systems of internal control of the Group. For the financial year ended 30 June 2018, the total cost incurred for the internal audit function is minimal (2017: RM20,000) as the Group has ceased its major retail business operation and currently focusing its effort to formulate a regularisation plan to regularise its financial condition pursuant to Paragraph 2.1(a) of Practice Note 17 of the MMLR of Bursa Securities.

riSk MANAGEMENT frAMEWOrk

The Board is dedicated to strengthening the Group’s risk management processes for identifying, evaluating and managing significant risks faced by the Group. Risk management is emphasized by the Board to ensure that the Group’s key risk areas are periodically reviewed and significant risks that may affect the Group’s business objectives are continually monitored and any new significant risk is identified and managed accordingly.

The Board is ultimately responsible for identifying the Group’s risks, the implementation and improvement of the Group’s risk management systems and the establishment of the Group’s internal control framework. `

The Enterprise Risk Management (“ERM”) is reviewed periodically with the results presented to the Board through the Audit Committee to which the Board is responsible in monitoring and reviewing the results of identified risks and ensure that effective controls are in place in mitigating the risk identified.

During the financial year under review, the Board has reviewed the ERM framework for the Group in identifying and evaluating the nature and extent of certain principal risks which affecting the achievement of the Group’s business objective. Through the review, various control measures and necessary action have been implemented to monitor and tighten up the control over these risks and concluded that there were no material losses incurred as a result of weaknesses in the risk management framework and internal control systems. The Board is satisfied that on-going process of quarterly reviewing, evaluating and monitoring the ERM are reasonably effective and adequate within the Group.


28

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d)

iNTErNAl CONTrOl SYSTEM

The Board is committed in maintaining a sound internal control structure to govern the manner in which the Group and its employees conduct themselves. Broadly, the Group’s key elements of controls include the following:

The responsibilities of the Board and the management are clearly defined in the organization structure to ensure the effective discharge of the roles and responsibilities of the parties in overseeing the conduct of the Group’s business.

The Company has since its incorporation, embarked on an on-going exercise to review and adopt the Limits of Authority of the Group, which specifies the Lines of Authority to the Board and the management.

Policies and procedures are in place for major operating units within the Group. The Group is continuing reviewing the policies and procedures with a view of establishing Group wide standards. For accounting systems and financial processes, efforts are being taken to ensure consistency in the Group as a whole. In respect of operational procedures, focus has been placed to align the internal processes of the significant subsidiaries.

The Board receives and reviews quarterly reports on key financial and operating statistics and monitors the achievement of the Group’s performance by comparing with annual approved budget and prior years financial data.

Close involvement by the Directors and Heads of Department on operational, corporate, financial and key management issues.

Regular review of both financial and non-financial performance and key business indicators carried out by the management of the Group.

Review of material contracts and related party transaction, if any.

As part of continuing process, the Group will be reviewing and updating the internal control methodologies and documentation procedures through internal discussion as well as recommendations from internal and external auditors where applicable.

rEViEW Of STATEMENT BY EXTErNAl AuDiTOrS

Pursuant to Paragraph 15.23 of the MMLR of Bursa Securities, the external auditors have reviewed this statement for inclusion in the annual report of the Group for the year ended 30 June 2018. Their review was performed in accordance with Audit and Assurance Practice Guide (“AAPG”) 3 issued by Malaysian Institute of Accountant.

AAPG 3 does not require the external auditors to consider whether this Statement covers all risks and control, 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 Directors and Management thereon. Based on their procedures performed, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this statement is inconsistent with their understanding of the processes adopted by the Board in reviewing the adequacy and integrity of the system of risk management and internal control of the Group.

BOArD CONCluSiON

For the financial year under review, there was no significant risk management and internal control deficiencies or material weaknesses resulting in material losses or contingencies requiring mention in the annual report. The Board has received reasonable assurance from the Chief Financial Officer and are of the opinion that the existing system of risk management and internal control is adequate to achieve the objectives set by the Board and will continue to take measures to improve and strengthen the risk management process and internal control of the Group.

This Statement on Risk Management and Internal Control was approved by the Board of Directors on 8 October 2018.

ANNUAL REPORT 2018

29

ADDiTiONAl COMPliANCE iNfOrMATiON

STOCk EXCHANGE liSTiNGMain Market of Bursa Malaysia Securities Berhad

1. There was no utilization of proceeds raised from any corporate proposal announced at the date of this report.

2. The results for the financial year do not differ by 10% or more from the unaudited results previously released.

3. Non-audit fees incurred by the Group and the Company to an external professional firm and a firm affiliated to the external auditors of the Company during the financial year ended 30 June 2018 amounted to RM10,000 (2017: RM30,000) and RM9,211 (2017: RM8,800), respectively.

4. Except as disclosed in Note 23 (Significant Related Party Disclosures) to the financial statements, none of the Directors have any recurrent related party transactions of revenue nature for the financial year ended 30 June 2018.

5. None of the Directors and major shareholders has any material contract with the Company and/or its subsidiaries during the financial year under review.


30

DIRECTORS’ REPORT

The Directors hereby submit their report together with the audited financial statements of the Group and the Company for the financial year ended 30 June 2018.

PRINCIPAL ACTIVITIES

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

There have been no significant changes in the nature of these principal activities during the financial year.

SUBSIDIARY COMPANIES

The details of the subsidiary companies and their business activities are disclosed in Note 7 to the financial statements.

The auditors’ report on the financial statements of the subsidiary companies did not contain any qualification, except for the report of certain subsidiary companies which have been included material uncertainty related to going concern as disclosed in Note 7 to the financial statements.

There have been no significant changes in the nature of the subsidiary companies’ principal activities during the financial year.

FINANCIAL RESULTS Group Company RM RM Loss for the financial year (5,193,127) (1,072,303) Attributable to: Owners of the Company (5,242,555) (1,072,303) Non-controlling interest 49,428 -

(5,193,127) (1,072,303)

DIVIDENDS

No dividend has been paid, declared or proposed by the Company since the previous financial year. The Directors also do not recommend any dividend payment in respect of the current financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial year.

SHARE OPTIONS

No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. As at the end of the financial year, there were no unissued shares of the Company under options.

ANNUAL REPORT 2018

31

DIRECTORS’ REPORT (cont’d)

DIRECTORS IN OFFICE The Directors who served on the Board of the Company since the date of the last report are:

Syed Azmin bin Mohd Nursin @ Syed Nor *Dato’ Ng Tieh Chuan *Thong Teong Bun Ahmad bin Abu Bakar Wan Rashid bin Dato’ Wan Mohamed (Resigned on 28 February 2018)

In accordance with the Company’s Constitution, Mr. Thong Teong Bun and Encik Ahmad bin Abu Bakar retire by rotation, and being eligible, offer themselves for re-election.

* Directors of the Company and subsidiary companies

The Directors who served on the subsidiary companies of the Company since the date of the last report, not including those directors listed above are:

Mohd Yusoff bin M Daud (Resigned on 30 March 2018)Teh Tong San (Resigned on 2 May 2018)

DIRECTORS’ INTEREST

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

Number of ordinary shares Balance at Balance at 1.7.2017 Bought Sold 30.6.2018

Direct interest in shares of the Company Syed Azmin bin Mohd Nursin @ Syed Nor 12,500 - - 12,500 Indirect interest by virtue of shares held by Megaplace Sdn. Bhd. in which the Director has interest Syed Azmin bin Mohd Nursin @ Syed Nor 11,783,750 - - 11,783,750 By virtue of his interest in shares of the Company, Tuan Syed Azmin bin Mohd Nursin @ Syed Nor is deemed to be interested in shares of the subsidiary companies to the extent the Company has an interest.

None of the other Directors in office at the end of the financial year held or dealt in shares of the Company or its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than Directors’ remuneration as disclosed in Note 19 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest except for any deemed benefits which may arise from related party transactions as disclosed in Note 23 to the financial statements.

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


32

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and the Company were made out, the Directors took reasonable steps:

a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of impairment on debts, and have satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business have been written down to their estimated realisable values.

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

a) which would render the amount written off for bad debts or the amount of the impairment on debts in the financial statements of the Group and the Company inadequate to any substantial extent; or

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

c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and the Company misleading or inappropriate; or

d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and the Company misleading.

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

a) any charge on the assets of the Group and the Company which has arisen since the end of the financial year to secure the liability of any other person; or

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

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

In the opinion of the Directors,

a) the results of the Group’s and the Company’s operations during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature except for those disclosed in Note 20 and Note 27 to the financial statements; and

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

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(i) On 8 January 2018, an indirect wholly-owned subsidiary of the Company, Apparel International Sdn. Bhd. entered into a sale and purchase agreement with Crocodile International Sdn. Bhd. (“CISB”) for:

(a) the termination of both the license agreements for distributing and retailing the “Crocodile” brand men’s apparel and small leather goods in Malaysia; and

(b) the disposal of its entire Crocodile’s brand inventories and accessories to CISB for a tentative sale consideration of RM8,000,000 based on 49% of the gross value of inventories and accessories as at 31 August 2017. The final sales consideration will be determined based on the same percentage of the gross value of inventories as at cut-off date of 31 January 2018.


ANNUAL REPORT 2018

33

On 13 March 2018, the consideration was revised and agreed at RM5,587,000, being 49% of the final inventory count as at 31 January 2018.

(ii) On 15 January 2018, the Directors of the Company announced that the Company had triggered the prescribed criteria under Paragraph 2.1(a) of Practice Note 17 (“PN 17”) of the Main Market Listing Requirements of Bursa Securities and is classified as a PN 17 company.

The details are disclosed in Note 27 to the financial statements.

INDEMNITIES TO DIRECTORS OR OFFICERS

There has been no indemnity given to or insurance effected for any director or officer of the Company during the financial year.

AUDITORS

Auditors’ remuneration is set out in Note 18 to the financial statements. No payment has been made to indemnify auditors during or since the financial year.

The auditors, Messrs. Peter Chong & Co., Chartered Accountants, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directorsin accordance with a resolution,

…………………………………………………..………...SYED AZMIN BIN MOHD NURSIN @ SYED NORDirector

…………………………………………………..………...AHMAD BIN ABU BAKARDirector

Date: 8 October 2018

Kuala Lumpur



34

The Directors of AMTEK HOLDINGS BERHAD state that, in the opinion of the Directors, the financial statements set out on 39 to 86 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 the Company as at 30 June 2018 and of their financial performance and cash flows of the Group and the Company for the financial year ended on that date.

Signed on behalf of the Board of Directorsin accordance with a resolution,

…………………………………………………..………...SYED AZMIN BIN MOHD NURSIN @ SYED NORDirector

…………………………………………………..………...AHMAD BIN ABU BAKARDirector

Date : 8 October 2018

Kuala Lumpur

I, TAN HUEY HUEY, being the Officer primarily responsible for the financial management of AMTEK HOLDINGS BERHAD, do solemnly and sincerely declare that, to the best of my knowledge and belief, the financial statements set out on pages 39 to 86 are correct.

And I make this solemn declaration, conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed TAN HUEY HUEY )at KUALA LUMPUR in the )FEDERAL TERRITORY this ) …………………………..........................day of 8 October 2018 ) TAN HUEY HUEY

Before me

……………………………….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

ANNUAL REPORT 2018

35

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF AMTEK HOLDINGS BERHAD

Company No : 125863-KIncorporated in Malaysia

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of AMTEK HOLDINGS BERHAD, which comprise the statements of financial position as at 30 June 2018 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 year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 39 to 86.

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 30 June 2018, and of their financial performance and their cash flows for the 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.

Emphasis of Matter

As disclosed in Note 2.1 to the financial statements, the Directors of the Company on 15 January 2018 announced that the Company had triggered the prescribed criteria under Paragraph 2.1(a) of Practice Note 17 (“PN 17”) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), as the shareholders’ equity of the Group is less than RM40.0 million and is 25% or less of its issued and paid-up capital.

Paragraph 4.0 of the PN17 required the Company to regularise its financial condition by undertaking a regularisation plan to address the PN17 status. Non-compliance with the said requirement would result in the Company being suspended or delisted from the Main Market of Bursa Securities.

The regularisation plan is required to be submitted to Securities Commission Malaysia and Bursa Securities within a period of twelve months from the date of the first announcement on 15 January 2018. The Company is currently looking into formulating a plan to regularise its financial condition (“Regularisation Plan”) for submission to the relevant authorities for approval.

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 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.


36

Going concern

Refer to Note 2.1 - Significant accounting policies on basis of preparation; and Note 4(i) - Significant accounting estimates and judgements on going concern.

As at 30 June 2018, the Group has accumulated losses of RM59,701,376. The loss attributable to owners of the Company for the financial year ended 30 June 2018 amounted to RM5,242,555. The shareholders’ fund of the Group has accordingly been reduced to RM9,427,224.

Notwithstanding the above, the Directors have continued to adopt the going concern basis in preparing the financial statements. This is after having considered the cash flow forecast supporting the assertion that the Group will have sufficient resources to continue for a period of over the next 12 months.

The judgements and assumptions are subject to risks and uncertainties, hence there is a possibility that changes in circumstances will alter expectations. We view the bases and assumptions applied to support the Group’s ability to continue as a going concern as key audit matter.

Our response

- Reviewed management’s cash flow forecast on sufficient cash flow over the next twelve months to meet its operating and financing cash flow needs, the cash flow forecast of which has been approved by the Directors;

- Evaluated the management’s assessment on the recoverability of receivables against subsequent collections;- Checked the borrowing repayment terms of the Group against the loan agreements; - Performed sensitivity analysis on the assumptions used in the cash flow forecast to assess the possible changes to

key assumptions that would cause a deficit in the cash flow forecast; and- Discussed with the management on its strategies and plans to be undertaken for the Group’s continuation as a going

concern.

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 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 the Company, the Directors are responsible for assessing the Group’s and of 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 and the Company or to cease operations, or have no realistic alternative but to do so.

INDEPENDENT AuDITORS’ REPORT (cont’d)TO THE MEMBERS OF AMTEK HOLDINGS BERHAD Company No : 125863-KIncorporated in Malaysia

ANNUAL REPORT 2018

37

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

- 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 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 year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

INDEPENDENT AuDITORS’ REPORT (cont’d)TO THE MEMBERS OF AMTEK HOLDINGS BERHAD

Company No : 125863-KIncorporated in Malaysia


38

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.

………………………………………...Peter Chong & Co. No. AF 0165 Chartered Accountants

………………………………………...Chong Ton Nen @ Peter Chong No. 00394/03/2020 JChartered Accountant

Date: 8 October 2018

Kuala Lumpur

INDEPENDENT AuDITORS’ REPORT (cont’d)TO THE MEMBERS OF AMTEK HOLDINGS BERHAD Company No : 125863-KIncorporated in Malaysia

ANNUAL REPORT 2018

39

2018 2017 Note RM RMASSETS

Non-current assets

Property, plant and equipment 5 83,660 6,571,032 Investment properties 6 6,476,684 492,000 Deferred tax assets 8 - 5,000 Total non-current assets 6,560,344 7,068,032

Current assets Inventories 9 - 11,009,804 Receivables 10 2,141,751 9,276,412 Tax assets 11 1,532,386 1,429,028 Deposits, cash and bank balances 12 5,227,749 7,653,002 Total current assets 8,901,886 29,368,246 TOTAL ASSETS 15,462,230 36,436,278

EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital 13 69,128,600 69,128,600 Accumulated losses (59,701,376) (54,458,821)

9,427,224 14,669,779 Non-controlling interest 14 1,007,472 958,044 Total equity 10,434,696 15,627,823 LIABILITIES Non-current liability Borrowings 15 199,828 802,618 Total non-current liability 199,828 802,618 Current liabilities Payables 16 1,908,484 11,756,675 Borrowings 15 2,919,222 8,249,162 Total current liabilities 4,827,706 20,005,837 Total liabilities 5,027,534 20,808,455 TOTAL EQUITY AND LIABILITIES 15,462,230 36,436,278

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2018


40

2018 2017 Note RM RM

Continuing operations Revenue 17 79,875 47,085 Other operating income 4,867 9,924 Administrative expenses (1,467,007) (901,652) Loss before taxation 18 (1,382,265) (844,643) Taxation 11 - - Loss for the financial year from continuing operations (1,382,265) (844,643) Discontinued operation Loss from discontinued operation, net of tax 20 (3,810,862) (2,416,987) (5,193,127) (3,261,630)

Other comprehensive income for the financial year - - Total comprehensive expense for the financial year (5,193,127) (3,261,630)

(Loss)/ Profit attributable to: Owners of the Company - Continuing operations (1,431,693) (843,489) - Discontinued operation (3,810,862) (2,416,987) (5,242,555) (3,260,476)Non-controlling interest - Continuing operations 49,428 (1,154) (5,193,127) (3,261,630)

Total comprehensive (expense)/ income attributable to: Owners of the Company - Continuing operations (1,431,693) (843,489) - Discontinued operation (3,810,862) (2,416,987) (5,242,555) (3,260,476)Non-controlling interest - Continuing operations 49,428 (1,154) (5,193,127) (3,261,630)

Loss per share attributable to owners of the Company (sen) 21 - Continuing operations (2.86) (1.69) - Discontinued operation (7.62) (4.83)


CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

ANNUAL REPORT 2018

41The attached notes form an integral part of the financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

Attributable to owners of the Company Non- Share Share Accumulated controlling Total capital premium losses Total interest equity RM RM RM RM RM RM

At 1 July 2016 49,998,750 19,129,850 (51,198,345) 17,930,255 959,198 18,889,453 Total comprehensive expense - - (3,260,476) (3,260,476) (1,154) (3,261,630)

Transition to no par value regime 19,129,850 (19,129,850) - - - -

At 30 June/ 1 July 2017 69,128,600 - (54,458,821) 14,669,779 958,044 15,627,823 Total comprehensive (expense)/ income - - (5,242,555) (5,242,555) 49,428 (5,193,127)

At 30 June 2018 69,128,600 - (59,701,376) 9,427,224 1,007,472 10,434,696


42


CASH FLOW FROM OPERATING ACTIVITIES Loss before taxation - Continuing operations (1,382,265) (844,643)- Discontinued operation 20 (3,805,862) (2,416,987)

(5,188,127) (3,261,630)Adjustments for:- Allowance for inventory obsolescence - 600,000 Bad debts written off - 22,476 Deposit written off 39,884 - Depreciation of investment properties 33,757 12,000 Depreciation of property, plant and equipment 317,567 642,445 Impairment on debts - current year 400,000 6,000 - no longer required (32,298) - Interest expenses 369,774 424,057 Interest income (176,069) (275,440) (Gain)/ loss on disposal of property, plant and equipment (56,414) 1,334 Over provision of royalty fee in prior years (224,600) - Property, plant and equipment written off 156,203 24,856

Operating loss before working capital changes (4,360,323) (1,803,902) Inventories 11,009,804 (994,850) Receivables 6,727,075 416,616 Payables (9,623,591) (1,629,150)

Cash generated from/ (used in) operations 3,752,965 (4,011,286) Tax paid 11 (103,358) (192,331)

Net cash generated from/ (used in) operating activities 3,649,607 (4,203,617)

The above consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

ANNUAL REPORT 2018

43The above consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements.


CASH FLOW FROM INVESTING ACTIVITIES Changes to fixed deposit placement as security for credit facility 1,200,000 1,500,000 Interest received 176,069 275,440 Proceeds from disposal of property, plant and equipment 62,285 1,241 Purchase of property, plant and equipment (10,710) (102,872) Net cash generated from investing activities 1,427,644 1,673,809 CASH FLOW FROM FINANCING ACTIVITIES Changes to short term borrowings (5,938,568) 2,487,631 Interest paid (369,774) (424,057) Repayment of term loan (569,364) (538,435) Net cash (used in)/ generated from financing activities (6,877,706) 1,525,139

NET DECREASE IN CASH AND CASH EQUIVALENTS (1,800,455) (1,004,669) CASH AND CASH EQUIVALENTS BROUGHT FORWARD 2,813,668 3,818,337 CASH AND CASH EQUIVALENTS CARRIED FORWARD 22 1,013,213 2,813,668

CONSOLIDATED STATEMENT OF CASH FLOWS (cont’d)FOR THE FINANCIAL YEAR ENDED 30 JuNE 2018


44

2018 2017 Note RM RMASSETS

Non-current asset Investment properties 6 480,000 492,000

Total non-current asset 480,000 492,000

Current assets Receivables 10 2,926,483 3,861,485 Tax asset 11 65,225 65,225 Deposits, cash and bank balances 12 118,665 216,126

Total current assets 3,110,373 4,142,836

TOTAL ASSETS 3,590,373 4,634,836

EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital 13 69,128,600 69,128,600 Accumulated losses (65,994,693) (64,922,390)

Total equity 3,133,907 4,206,210

LIABILITIES Current liability Payables 16 456,466 428,626

Total current liability 456,466 428,626

Total liabilities 456,466 428,626

TOTAL EQUITY AND LIABILITIES 3,590,373 4,634,836


STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2018

ANNUAL REPORT 2018

45The attached notes form an integral part of the financial statements.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018


Revenue 17 49,875 47,085 Other operating income 867 9,924 Other operating expenses (1,123,045) (394,251) Loss before taxation 18 (1,072,303) (337,242) Taxation 11 - - Loss for the financial year (1,072,303) (337,242) Other comprehensive income for the financial year - - Total comprehensive expense attributable to the owners of the Company (1,072,303) (337,242)


46

STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

Share Share Accumulated capital premium losses Total RM RM RM RM

At 1 July 2016 49,998,750 19,129,850 (64,585,148) 4,543,452 Total comprehensive expense - - (337,242) (337,242) Transition to no par value regime 19,129,850 (19,129,850) - -

At 30 June/ 1 July 2017 69,128,600 - (64,922,390) 4,206,210 Total comprehensive expense - - (1,072,303) (1,072,303)

At 30 June 2018 69,128,600 - (65,994,693) 3,133,907


ANNUAL REPORT 2018

47

STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018


CASH FLOW FROM OPERATING ACTIVITIES Loss before taxation (1,072,303) (337,242) Adjustments for:- Depreciation of investment properties 12,000 12,000 Impairment on debts 400,000 - Interest income (867) (1,924)

Operating loss before working capital changes (661,170) (327,166) Receivables 1,475,931 75,000 Payables 27,840 25,580

Net cash generated from/ (used in) operating activities 842,601 (226,586)

CASH FLOW FROM INVESTING ACTIVITIES Interest received 867 1,924 (Advances to)/ Repayment from subsidiary company (940,929) 200,000

Net cash (used in)/ generated from investing activities (940,062) 201,924

NET DECREASE IN CASH AND CASH EQUIVALENTS (97,461) (24,662) CASH AND CASH EQUIVALENTS BROUGHT FORWARD 216,126 240,788

CASH AND CASH EQUIVALENTS CARRIED FORWARD 22 118,665 216,126

The above consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements.


48

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

1. GENERAL INFORMATION

The principal activities of the Company are investment holding and the provision of management services. The principal activities of the subsidiary companies are as disclosed in Note 7.

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

The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad.

The address of the registered office of the Company is 110, Jalan Maarof, Bangsar Baru, 59000 Kuala Lumpur.

The principal place of business of the Company is at Level 4, Wisma Commerce Dot Com, No. 15, Jalan Tandang, 46050 Petaling Jaya, Selangor Darul Ehsan.

The Board has authorised the issuance of the financial statements on 8 October 2018.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

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

The financial statements have been prepared under historical cost basis except as disclosed in the accounting policies.

The financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency, unless otherwise indicated.

On 15 January 2018, the Directors of the Company announced that the Company had triggered the prescribed criteria under Paragraph 2.1(a) of Practice Note 17 (“PN 17”) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), as the shareholders’ equity of the Group is less than RM40.0 million and is 25% or less of its issued and paid-up capital.

The regularisation plan is required to be submitted to Securities Commission Malaysia and Bursa Securities within a period of twelve months from the date of the first announcement on 15 January 2018. The Company is currently looking into formulating a plan to regularise its financial condition (“Regularisation Plan”) for submission to the relevant authorities for approval.

As at 30 June 2018, the Group has accumulated losses of RM59,701,376 and loss attributable to the owners of the Company of RM5,242,555. The shareholders’ fund of the Group has accordingly been reduced to RM9,427,224. Notwithstanding the above, the financial statements have been prepared on the assumption that the Group continue to operate as going concern as the Group has sufficient resources to continue for a period of at least 12 months.

2.2 Subsidiary companies and basis of consolidation (i) Subsidiary companies

Subsidiary companies are entities over which the Group has the ability to control the financial and operating policies so as to obtain benefits from their activities. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

ANNUAL REPORT 2018

49

Notes to the FiNaNcial statemeNts (cont’d)For the FiNaNcial Year eNded 30 JuNe 2018

These notes form part of the financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Subsidiary companies and basis of consolidation (cont’d)

(ii) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiary companies as at the reporting date. The financial statements of the subsidiary companies are prepared for the same reporting date as the Company.

Subsidiary companies are fully consolidated from the date on which control is transferred to the Group and de-consolidated from the date that control ceases. The cost of an acquisition is measured as the fair values of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the date of acquisition, irrespective of the extent of any non-controlling interest. The excess of the cost of the acquisition over the fair value of the Group’s share of the identifiable net assets acquired at the date of acquisition is reflected as goodwill.

If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the profit or loss.

In preparing consolidated financial statements, intra-group balances and transactions and the resulting unrealised profits are eliminated on consolidation. unrealised losses are eliminated on consolidation and the relevant assets are assessed for impairment. uniform accounting policies are adopted in the consolidated financial statements for transactions and events in similar circumstances.

The gain or loss on disposal of a subsidiary is the difference between the net disposal proceeds and the Group’s share of its net assets as at the date of disposal including the cumulative amount of any exchange differences that relate to the subsidiary. This amount is recognised in the consolidated profit or loss in the year of disposal.

(iii) 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 parent 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.

At the end of each reporting period, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.

Transactions with non-controlling interests that do not result in loss in control are accounted as equity transactions - that is, as transactions with the owners in their capacity as owners. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share of the carrying value of net assets of the subsidiary acquired is deducted from equity. For disposals to non-controlling interests, differences between any proceeds received and the relevant share of non-controlling interest are also recognised in equity.

2.3 Investment

In the separate financial statements of the Company, investment in subsidiary companies is shown at deemed cost less impairment losses, if any. Where an indication of impairment exists, the carrying amount of an investment is assessed and written down immediately to its recoverable amount. Refer Note 2.10 on impairment of non-financial assets.

On disposal of an investment, the difference between the net disposal proceeds and its carrying amount is charged

or credited to the profit or loss.


50



2. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 2.4 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and

any accumulated impairment losses.

Depreciation of property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the following estimated useful lives:

Number of years Leasehold land 99 Leasehold building 50 Motor vehicles 5 Furniture and fixtures 3 - 10 Other equipment - office equipment 3 - 10 - computers 3 Renovation 10

The residual values, useful lives and depreciation methods are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

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

2.5 Investment properties

Investment property is a property which is held either to earn rental income or for capital appreciation or both. Subsequent to initial recognition, investment properties are stated at cost/ deemed cost less accumulated depreciation and any accumulated impairment losses.

The land and buildings of the Group were valued based on the “comparison” method of valuation in year 2011 by Registered Valuer, Rahim & Co. (Sel) Sdn. Bhd. The Directors have not adopted a policy of regular revaluations of such assets and no later valuation has been recorded. upon the adoption of MFRS 1: First-Time Adoption of Malaysian Financial Reporting Standards, the Group elected to measure these assets at the date of transition to MFRSs at its fair value and use that fair value as its deemed cost at the date.

Investment properties are depreciated on the straight-line basis over its estimated useful lives:

Number of years Freehold buildings 50 Leasehold land 99 Leasehold buildings 50 Renovation 10

Freehold land has an unlimited useful life therefore is not depreciated.

ANNUAL REPORT 2018

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2.5 Investment properties (cont’d)

The residual values, useful lives and depreciation methods are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits of investment properties.

Investment properties are derecognised when it is permanently withdrawn from use and no further economic

benefit is expected from its disposal or when they have been disposed. Any gain or losses on the retirement or disposal of an investment property are recognised in the profit or loss in the financial year in which they arise.

Transfers are made to or from investment properties only when there is a change in use. All transfers do not change the carrying amount of the property reclassified.

2.6 Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined using the first-in, first-out basis. The cost of raw material comprises the original cost of purchase plus the cost of bringing the inventories to their intended location and condition. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and an appropriate proportion of production overheads.

Net realisable value is determined based on the estimated selling price in the ordinary course of business less the

costs of completion and selling expenses.

2.7 Financial instruments (i) Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group becomes a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in the profit or loss.

Loans and receivables

Loans and receivables are non-derivatives financial assets with fixed or determinable payments that are not quoted in an active market.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective

interest method. Gains and losses are recognised in the profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. Loans and receivables are classified as current assets, except for those having maturity date later than 12 months after the reporting date which are classified as non-current.


52




2.7 Financial instruments (cont’d)

(ii) Financial liabilities

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest related charges are recognised as an expense in “finance costs” in the profit or loss. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.

Borrowings are recognised initially at fair value of proceeds received less attributable transaction costs, if any. Borrowings are subsequently stated at amortised cost which is the initial fair value less any principal repayments. Any difference between the proceeds (net of transaction costs) and the redemption value is taken to the profit or loss over the period of the borrowings using the effective interest method. The interest expense is chargeable on the amortised cost over the period of the borrowings using the effective interest method.

Gains and losses are recognised in the profit or loss when the liabilities are derecognised as well as through the amortisation process.

Borrowings which are due to be settled within 12 months after the reporting date are included in current liabilities in the statement of financial position even though the original terms were for a period longer than 12 months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting date. Borrowings to be settled within the Group’s normal operating cycle are considered as current. Other borrowings due to be settled more than 12 months after the reporting date are included in non-current liabilities in the statement of financial position.

Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest method.

(iii) 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 incurred because a specified debtor failed to make payment when payment was due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due to the Group and the Company, as the issuer is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

(iv) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

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53




2.8 Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired and recognises the impairment loss when such evidence exists.

Financial assets carried at amortised cost

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. The carrying amount of the asset is reduced through the use of an allowance account. Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in the profit or loss.

2.9 Leases

As lessor

Leases where the Group and the Company retain substantially all the risks and rewards of ownership of the assets are reclassified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. The accounting policy for rental income is set out in Note 2.14.

As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.10 Impairment of non-financial assets

The carrying amounts of the Group’s assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.

For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each reporting date or more frequently when indicators of impairment are identified.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit (“CGu”) to which the asset belongs to. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s CGus, or groups of CGus, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.


54




2.10 Impairment of non-financial assets (cont’d)

An asset’s recoverable amount is the higher of an asset’s or CGu’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Impairment losses recognised in respect of a CGu or groups of CGus are allocated first, to reduce the carrying amount of any goodwill allocated to those units or groups of units, and then to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

An impairment loss is recognised in the profit or loss in the period in which it arises. Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in the profit or loss.

2.11 Taxation and deferred taxation

Income tax on the results for the financial year comprises current and deferred tax.

Current tax is the expected amount of income tax payable in respect of the taxable profits for the financial year and is measured using the tax rates that have been enacted at the reporting date.

Deferred tax liabilities and assets are provided using the liability method in respect of all temporary differences between the carrying amount of an asset or liability in the statement of financial position and its tax base including unused tax losses and capital allowances.

Deferred tax liabilities and assets are measured at the tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profit will be available

against which the deductible temporary differences can be utilised. The carrying amount of a deferred tax asset is reviewed at each reporting date. If it is no longer probable that sufficient future taxable profit will be available to allow the benefit of part or that entire deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly.

When it becomes probable that sufficient future taxable profit will be available, such reductions will be reversed.

2.12 Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.

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2.13 Employee benefits Short term employee benefits

Wages, salaries, bonuses and social contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leaves are recognised when services are rendered by employees that increase their entitlement. Absences such as sick leaves are recognised when the absences occur.

Defined contribution plans

As required by law, companies in Malaysia make contributions for the local employees to the state pension scheme, the Employees’ Provident Fund (“EPF”). Such contributions are recognised as an expense in the profit or loss as incurred.

2.14 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates, trade discounts and other similar allowances.

Sale of goods

Revenue from sale of goods is recognised when the following conditions are satisfied:

- the Group has transferred to the customer the significant risks and rewards of ownership of the goods; - the Group retains neither continuing managerial involvement to the degree usually associated with ownership

nor effective control over the goods sold; - the amount of revenue can be measured reliably; - it is probable that the economic benefits associated with the transaction will flow to the Group; and - the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Other revenues are recognised on the following bases:

Rental income - on an accrual basis in accordance with the substance of the relevant agreement unless collectability is in doubt. Interest income - on an accrual basis (taking into account the effective yield on the assets) unless collectability is in doubt. Concession income - measured at the fair value of the consideration receivable unless collectability is in doubt. Service income - recognised upon performance of services rendered. 2.15 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value.


56




2.16 Contingent liabilities and contingent assets

The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare circumstances where there is a liability that cannot be recognised because it cannot be measured reliably. However, contingent liabilities do not include financial guarantee contracts.

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

2.17 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’s 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.

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.

2.18 Non-current assets (or disposal groups) held for sale and discontinued operations

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary.

Immediately before classification as held for sale, the measurements of the non-current assets (or all the assets and liabilities in a disposal group) are brought up-to-date in accordance with applicable MFRSs. Then, on initial classification as held for sale, non-current assets or disposal groups (other than investment properties, deferred tax assets, employee benefits assets, financial assets and inventories) are measured in accordance with MFRS 5, that is, at the lower of carrying amount and fair value less costs to sell. Any differences are included in the profit or loss.

A component of the Group is classified as a discontinued operation when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations or is a subsidiary company acquired exclusively with a view to resale.

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3. MALAYSIAN FINANCIAL REPORTING STANDARDS (“MFRS”), AMENDMENTS TO MFRSs AND ISSUES COMMITTEE INTERPRETATIONS (“IC Interpretations”) AND AMENDMENTS TO IC INTERPRETATIONS

New and revised MFRSs, Amendments to MFRSs, IC Interpretations and Amendments to IC Interpretations which have been issued but not yet effective and relevant to the Company:

Effective dates

MFRS 9 Financial Instruments 1 January 2018 MFRS 15 Revenue from Contracts with Customers 1 January 2018 MFRS 16 Leases 1 January 2019 Amendments to MFRS 3 Business Combinations (Annual Improvements to MFRS 1 January 2019 Standards 2015-2017 Cycle) Amendments to MFRS 3 Business Combinations 1 January 2020 Amendments to MFRS 9 Prepayment Features with Negative Compensation 1 January 2019 Amendments to MFRS 101 Presentation of Financial Statements 1 January 2020 Amendments to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2020 Amendments to MFRS 112 Income Taxes (Annual Improvements to MFRS Standards 1 January 2019 2015-2017 Cycle) Amendments to MFRS 119 Plan Amendment, Curtailment or Settlement 1 January 2019 Amendments to MFRS 123 Borrowing Costs (Annual Improvements to MFRS Standards 1 January 2019 2015-2017 Cycle) Amendments to MFRS 134 Interim Financial Reporting 1 January 2020 Amendments to MFRS 137 Provisions, Contingent Liabilities and Contingent Assets 1 January 2020 Amendments to MFRS 140 Transfers of Investment Property 1 January 2018 IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1 January 2020 IC Interpretation 23 uncertainty over Income Tax Treatments 1 January 2019

It is anticipated that the adoption of the abovementioned Standards and Interpretation will not have significant impact on the financial statements of the Group and the Company.

4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

Preparation of the financial statements involved making certain estimates, judgements and assumptions concerning the future. They affect the accounting policies applied, amounts of assets, liabilities, income and expenses reported and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. Changes in these estimates and assumptions by management may have an effect on the balances as reported in the financial statements. Significant accounting estimates and judgements, where used, have been disclosed in the relevant notes to the financial statements.

The key assumptions 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 are discussed below:

(i) Going concern

The Group’s financial statements have been prepared on a going concern basis after having prepared a profit and cash flow forecasts and considering the available unutilised funding facilities available supporting the assertion that the Group will have sufficient resources to continue for a period of at least 12 months from the end of the financial year. Significant assumptions and judgements are used in the preparation of the profit and cash flow forecasts.


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4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d)

(ii) Depreciation of property, plant and equipment and investment properties

Property, plant and equipment and investment properties are depreciated on a straight-line basis over their estimated useful lives. The Group estimates the useful lives of these assets are as disclosed in Note 2.4 and Note 2.5 respectively. The carrying amounts of the Group’s and the Company’s property, plant and equipment and investment properties at 30 June 2018 were as disclosed in Note 5 and Note 6 respectively. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, and therefore, future depreciation charges could be revised.

(iii) Income taxes

Judgement is required in determining the capital allowances and deductibility of certain expenses when estimating the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax in the periods in which the outcome is known. Details of income taxes are disclosed in Note 11.

(iv) Provisions

The Group recognises a provision when it has a present legal or constructive obligation arising as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. The recording of provisions requires the application of judgement about the ultimate resolution of these obligations. As a result, provisions are reviewed at each reporting date and adjusted to reflect the Group’s current best estimate.

(v) Impairment on debts

The Group estimates impairment on debts based on the management’s assessment of the debts’ recoverability. Whilst the management’s estimate is guided by their past experiences, judgement is made about the future recovery of debts. Details of impairment on debts are disclosed in Note 10.

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60



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ANNUAL REPORT 2018

61



5. PROPERTY, PLANT AND EQUIPMENT (cont’d) Included in net carrying amounts of property, plant and equipment are:

Group 2018 2017 RM RM

Assets pledged as security for bank borrowings * - Leasehold land and building - 5,650,572

* Transferred to investment properties.

6. INVESTMENT PROPERTIES

Freehold Leasehold land and land and buildings building Renovation Total Group RM RM RM RM

At cost/ deemed cost At 1 July 2016, 30 June 2017, 1 July 2017 564,000 - - 564,000 Transfer from property, plant and equipment (Note 5) - 6,274,735 688,986 6,963,721

At 30 June 2018 564,000 6,274,735 688,986 7,527,721

Accumulated depreciation At 1 July 2016 60,000 - - 60,000 Depreciation charge 12,000 - - 12,000

At 30 June/ 1 July 2017 72,000 - - 72,000 Transfer from property, plant and equipment (Note 5) - 704,240 241,040 945,280 Depreciation charge 12,000 16,015 5,742 33,757

At 30 June 2018 84,000 720,255 246,782 1,051,037

Net carrying amounts At 30 June 2018 480,000 5,554,480 442,204 6,476,684

At 30 June 2017 492,000 - - 492,000


62



6. INVESTMENT PROPERTIES (cont’d)

The fair value of investment properties are as follows:


Freehold land and buildings 540,000 540,000 Leasehold land and building 7,000,000 -

Company 2018 2017 Freehold land and buildings RM RM

At deemed cost At 1 July 2016/ 30 June 2017/ 30 June 2018 564,000 564,000

Accumulated depreciation

At 1 July 72,000 60,000 Depreciation charge 12,000 12,000 At 30 June 84,000 72,000

Net carrying amounts 480,000 492,000

Fair value 540,000 540,000

(i) Investment properties represent:

(a) 3 units of freehold industrial lots in a commercial complex located at Georgetown, Penang.

(b) 1 unit of 2½ storey leasehold semi-detached factory located at Petaling Jaya, Selangor.

The fair value measurement of investment properties are disclosed in Note 26(d).

ANNUAL REPORT 2018

63



6. INVESTMENT PROPERTIES (cont’d)


(ii) Assets pledged as security for bank borrowings, as disclosed in Note 15(i) * - Leasehold land and building 5,554,480 -

*Previously classified as property, plant and equipment.

(iii) The rental income and operating expenses relating to the investment properties recognised for the financial year are as follows:

Group Company 2018 2017 2018 2017 RM RM RM RM

Rental income 79,875 47,085 49,875 47,085 Direct operating expenses of revenue- generating investment properties (26,630) (23,876) (20,695) (23,876)

7. INVESTMENT IN SUBSIDIARY COMPANIES

Company 2018 2017 RM RM

unquoted shares, at deemed cost - -

Details of the subsidiary companies, all of which were incorporated in Malaysia, are as follows:

Gross equity interest 2018 2017 Name of company % % Principal activities Subsidiary companies of the Company Amtek Ventures Sdn. Bhd.# 100 100 Investment holding. Amtek Management Sdn. Bhd. # 100 100 Provision of management services. Subsidiary companies of Amtek Ventures Sdn. Bhd. Power Wave Sdn. Bhd. 77.50 77.50 Inactive. Apparel International Sdn. Bhd. 100 100 Disposed its business in distributing and retailing of men’s apparel and small leather goods in Malaysia and since then became inactive.

# The auditors’ reports of these companies have been included material uncertainty related to going concern which are concerning their abilities to continue as a going concern in the foreseeable future.


64



8. DEFERRED TAXATION The deferred taxation represent temporary differences between accounting depreciation and related capital allowance.

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 tax authority. The following amounts, determined after appropriate offsetting, are shown in the consolidated statement of financial position:


Deferred tax assets at 1 July 5,000 5,000 Recognised in profit or loss (Note 20) (5,000) - Deferred tax assets at 30 June - 5,000

The Group has the following potential deferred tax assets which have not been recognised:


Temporary differences arising from: - Capital allowances claimed and accounting depreciation (89,000) (434,000) - unused capital allowances 1,744,000 1,737,000 - unused tax losses 16,013,000 5,291,000 - Allowance for inventory obsolescence - 3,139,000 - Provision for bonus - 693,000

17,668,000 10,426,000

Potential deferred tax asset not recognised at 24% 4,240,000 2,502,000

Deferred tax assets have not been recognised as it is not probable that sufficient future taxable profits will be available to offset against the above deferred tax assets.

ANNUAL REPORT 2018

65



9. INVENTORIES


Finished goods, at cost - Garment and accessories - 14,149,027 Less: Allowance for inventory obsolescence At 1 July 3,139,223 2,539,223 Addition - 600,000 Reversal to cost of sales upon disposal (3,139,223) -

At 30 June - (3,139,223)

- 11,009,804 Recognised in profit or loss and included in cost of sales: Inventories recognised as expenses 11,854,278 13,811,324 Allowance for inventory obsolescence - 600,000

The indirect subsidiary company, Apparel International Sdn. Bhd. (“AISB”) disposed its business in distributing and retailing of men’s apparel and small leather goods in Malaysia.

On 8 January 2018, AISB entered into a sale and purchase agreement with Crocodile International Sdn. Bhd. (“CISB”) for:



On 13 March 2018, the consideration was revised and agreed at RM5,587,000, being 49% of the final inventory count

as at 31 January 2018.

An upfront payment of RM3,000,000 was received on 31 January 2018 and the balance sum of RM2,587,000 are to be collected over equal monthly instalment payments commencing 1 March 2018.


66



10. RECEIVABLES


Trade receivables 1,609,792 6,819,575 - - Less: Impairment on debts At 1 July 129,298 123,298 - - Addition - 6,000 - - No longer required (32,298) - - - At 30 June (97,000) (129,298) - - 1,512,792 6,690,277 - -

Due from subsidiary companies - - 37,717,367 36,776,437 Less: Impairment on debts - - (35,143,584) (35,143,583)

- - 2,573,783 1,632,854

Other receivables, deposits and prepayments 2,028,959 3,586,135 1,151,594 2,627,525 Less: Impairment on debts At 1 July 1,000,000 1,000,000 398,894 398,894 Addition 400,000 - 400,000 - At 30 June (1,400,000) (1,000,000) (798,894) (398,894)

628,959 2,586,135 352,700 2,228,631 2,141,751 9,276,412 2,926,483 3,861,485

ANNUAL REPORT 2018

67



10. RECEIVABLES (cont’d)

(i) The Group normally grants credit terms ranging from 30 to 150 days (2017: 30 to 150 days) to its customers. Other credit terms are assessed and approved on a case-by-case basis.

(ii) Included in trade receivables are the remaining sum recoverable from the disposal of inventories as disclosed in Note 9. As at 30 June 2018, four monthly instalments amounting to RM1,293,500 remain unpaid.

(iii) The amount due from subsidiary companies is unsecured, interest-free and repayable upon demand. The related party transaction is disclosed in Note 23.

(iv) The Group is exposed to a significant concentration of credit risk, whereby significant outstanding balance of trade receivables is due from one (1) customer (2017: three (3) customers), representing approximately 94% (2017: 62%) of the net trade receivables as at the reporting date.

(v) The ageing analysis of the Group’s trade receivables is as follows:


Neither past due nor impaired 1,512,792 6,690,277 Impaired 97,000 129,298

1,609,792 6,819,575

The Group does not hold any collateral or other credit enhancement over the balances.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivable that are impaired Trade receivables that are individually determined to be impaired at the reporting date relate to those receivables

who have defaulted on payments and the management is in the opinion that the recoverability is in doubt. These receivables are not secured by any collateral or credit enhancements.


68



11. TAXATION Group Company 2018 2017 2018 2017 RM RM RM RM

Tax assets at 1 July 1,429,028 1,236,697 65,225 65,225 Payment made during the financial year 103,358 192,331 - - Tax assets at 30 June 1,532,386 1,429,028 65,225 65,225

Reconciliation of tax expenses with accounting loss of the Group:


Loss before taxation - Continuing operations (1,382,265) (844,643)

Tax at current income tax rate at 24% (331,744) (202,714) Tax effects in respect of: - Non-allowable expenses 265,117 145,114 - Income from discountined operation 57,600 57,600 - Over provision of royalty fee in prior years (53,904) - - Deferred tax asset not recognised 62,931 - - -

Reconciliation of tax expenses with accounting loss of the Company:


Loss before taxation (1,072,303) (337,242)

Tax at current income tax rate at 24% (257,353) (80,938) Tax effect in respect of non-allowable expenses 257,353 80,938 - -

ANNUAL REPORT 2018

69



12. DEPOSITS, CASH AND BANK BALANCES Group Company 2018 2017 2018 2017 RM RM RM RM

Fixed deposits with licensed banks 4,955,874 5,513,614 - - Cash and bank balances 271,875 2,139,388 118,665 216,126 5,227,749 7,653,002 118,665 216,126

The Group is exposed to a significant concentration risk, whereby 99% (2017: 97%) of the total deposits, cash and bank balances of the Group are placed in two (2) (2017: two (2)) financial institutions respectively.

The fixed deposits with licensed banks, amounting to RM3,400,000 (2017: RM4,600,000) are pledged as securities for banking facilities granted as disclosed in Note 15(i).

The effective yield of fixed deposits with licensed banks is 3.20% (2017: 2.90% to 3.15%) per annum. The maturity

periods on the fixed deposits range from 30 to 365 days (2017: 30 to 365 days).

13. SHARE CAPITAL

2018 2017 No. of No. of 2018 2017 shares shares RM RM Group/ Company Issued and fully paid: Ordinary shares with no par value At 1 July 49,998,750 49,998,750 69,128,600 49,998,750 Transition to no par value regime on 31 January 2017 under the Companies Act 2016 - - - 19,129,850

At 30 June 49,998,750 49,998,750 69,128,600 69,128,600

The new Companies Act 2016 which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value of share capital. Consequently, the amounts standing to the credit of the share premium account of RM19,129,850 become part of the Company’s share capital pursuant to the transitional provisions set out in Section 618(2) of the Companies Act 2016. There is no impact on the numbers of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition.

Capital management

The primary objective of the Group’s capital management is to ensure that the Group would be able to continue as a going concern while maximising the return to shareholders.

No changes were made in the objectives, policies or processes during the financial years ended 30 June 2018 and 30 June 2017.


70



14. NON-CONTROLLING INTEREST

The Group’s subsidiary companies that have material non-controlling interest (“NCI”) are as follows:

Power Wave Sdn. Bhd. 2018 2017 RM RM

NCI percentage of ownership interest and voting interest 22.50% 22.50% Carrying amount of NCI 1,007,472 958,044 Profit/ (Loss) allocated to NCI 49,428 (1,154)

The summarised financial statements before intra-group elimination of the Group’s subsidiary companies that have material non-controlling interests (“NCI”) are as follows:

Power Wave Sdn. Bhd. 2018 2017 RM RM

NCI percentage of ownership interest and voting interest 22.50% 22.50% Current assets 4,479,578 4,485,162 Current liabilities (1,922) (227,188) Net assets 4,477,656 4,257,974

Revenue - - Profit/ (loss) for the year 219,682 (5,132) Total comprehensive income/ (expense) 219,682 (5,132)

Cash flow used in operating activities (5,584) (5,391)

Net decrease in cash and cash equivalents (5,584) (5,391)

ANNUAL REPORT 2018

71



15. BORROWINGS

Group 2018 2017 RM RM Current Secured Bank overdrafts 814,536 239,334 Bills payable - 6,438,568 Revolving credits 1,500,000 1,000,000 Term loan 604,686 571,260 Total current portion 2,919,222 8,249,162

Non-current Secured Term loan 199,828 802,618

Total non-current portion 199,828 802,618 3,119,050 9,051,780

(i) Bank borrowings are secured as follows:

- fixed charge over certain property, plant and equipment and investment properties of a subsidiary company as disclosed in Note 5 and Note 6;

- “All Monies” debenture over all fixed and floating assets of a subsidiary company; and

- fixed deposits as disclosed in Note 12.


72



15. BORROWINGS (cont’d)

(ii) Interests are charged as follows:

Bank overdrafts - ranging from 7.22% to 8.25% (2017: 7.22% to 8.10%) per annum. Bills payable - ranging from 3.83% to 5.23% (2017: 3.83% to 5.10%) per annum. Revolving credits - ranging from 7.75% to 8% (2017: 7.75%) per annum. Term loan - at 5.95% (2017: 5.95%) per annum.

(iii) The bills payable have maturity periods of Nil day (2017: 120 days to 150 days).

(iv) The term loan at the end of the financial year is repayable as follows:


Not later than 1 year 604,686 571,260 Between 1 to 2 years 199,828 604,386 Between 2 to 5 years - 198,232

804,514 1,373,878

16. PAYABLES


Trade payables 966,830 8,086,353 - - Other payables and accruals 941,654 3,670,322 456,466 428,626 1,908,484 11,756,675 456,466 428,626

The normal trade credit periods granted to the Group range from 15 to 120 days (2017: 15 to 120 days) or such other period as negotiated with the suppliers.

17. REVENUE


Rental income 79,875 47,085 49,875 47,085

ANNUAL REPORT 2018

73



18. LOSS FROM OPERATIONS/ LOSS BEFORE TAXATION

The following items have been charged/ (credited) in arriving at loss from operations/ loss before taxation:


Auditors’ remuneration 39,000 36,000 30,000 30,000 Depreciation of investment properties 33,757 12,000 12,000 12,000 Directors’ remuneration (Note 19) 131,000 170,000 131,000 170,000 Impairment on debts - Current year 400,000 - 400,000 - - No longer required (32,298) - - - Interest income (867) (1,924) (867) (1,924) Rental of storage 6,048 3,180 6,048 3,180 Royalty fee - Over provision in prior year (224,600) - - - Staff costs - Salaries, allowances and bonuses 381,467 357,350 - - - Employees’ Provident Fund 39,480 33,840 - - - Other employee benefits 18,014 16,883 - -

19. DIRECTORS’ REMUNERATION


Directors of the Company Fees - Continuing operations 96,000 120,000 96,000 120,000 Other emoluments - Continuing operations 35,000 50,000 35,000 50,000 - Discontinued operation 130,000 320,000 - - 261,000 490,000 131,000 170,000 Director of a subsidiary company Other emoluments - Discontinued operation - Current year 12,500 30,000 - - - Over provision in prior year (15,000) - - - 258,500 520,000 131,000 170,000


74



19. DIRECTORS’ REMUNERATION (cont’d)

The Directors’ remuneration was received or receivable by the following Directors:

Directors of the Company Syed Azmin bin Mohd Nursin @ Syed Nor Dato’ Ng Tieh Chuan Thong Teong Bun Ahmad bin Abu Bakar Director of a subsidiary company Mohd Yusoff bin M Daud (Resigned on 30 March 2018) Non- Non- Executive executive Executive executive 2018 2018 2017 2017 Directors of the Company RM RM RM RM

Group Directors’ fees - Continuing operations 24,000 72,000 48,000 72,000 Directors’ other emoluments - Salaries and bonus - Continuing operations 35,000 - 50,000 - - Discontinued operation 130,000 - 350,000 - 189,000 72,000 448,000 72,000

Company Directors’ fees 24,000 72,000 48,000 72,000 Directors’ other emoluments - Salaries and bonus 35,000 - 50,000 - 59,000 72,000 98,000 72,000

The number of Directors of the Company whose total remuneration during the financial year fell within the following bands is as follows:

Number of Directors Non- Non- Executive executive Executive executive 2018 2018 2017 2017

Bands of remuneration RM400,000 - RM500,000 - - 1 - RM100,000- RM200,000 1 - - - RM1 - RM50,000 - 3 1 3

ANNUAL REPORT 2018

75



20. DISCONTINUED OPERATION

On 8 January 2018, a wholly-owned subsidiary of the Company, Apparel International Sdn. Bhd. entered into a sale and purchase agreement with Crocodile International Sdn. Bhd. (“CISB”) for:

(i) the termination of both the license agreements for distributing and retailing the “Crocodile” brand men’s apparel and small leather goods in Malaysia; and

(ii) the disposal of its entire Crocodile’s brand inventories and accessories to CISB.

The disposal was completed on 18 May 2018 as disclosed in Note 27(i). upon completion of the disposal, the Group had since ceased its major business operation in distributing and retailing of men’s apparel and small leather goods in Malaysia.

(a) The analysis of the results of the discontinued operation is as follows:

Group 2018 2017 RM RM Revenue 15,880,518 25,774,850 Cost of goods sold (11,854,278) (14,411,324) Gross profit 4,026,240 11,363,526 Other operating income 591,609 293,630 Expenses (8,053,937) (13,650,086) Loss from operations (3,436,088) (1,992,930) Finance costs (369,774) (424,057) Loss before taxation (3,805,862) (2,416,987) Taxation (Note 8) (5,000) - Loss from discontinued operation, net of tax (3,810,862) (2,416,987)


76



20. DISCONTINUED OPERATION (cont’d)

(b) The following amounts have been included in arriving at loss before taxation of discontinued operation: Group 2018 2017 RM RM

Allowance for inventory obsolescence - 600,000 Auditors’ remuneration 26,500 30,000 Bad debts written off - 22,476 Depreciation of property, plant and equipment 317,567 642,445 Deposit written off 39,884 - Directors’ remuneration (Note19) - Other emoluments 127,500 350,000 Impairment on debts - 6,000 Interest income (175,202) (273,516) (Gain)/ loss on disposal of property, plant and equipment (56,414) 1,334 Property, plant and equipment written off 156,203 24,856 Rental of boutique 40,472 161,524 Rental of office equipment 11,200 8,000 Royalty fees 882,419 1,763,276 Service income (336,000) - Staff costs: - Salaries, allowances and bonuses 2,852,565 6,177,355 - Employees’ Provident Fund 401,593 738,481 - Staff retrenchment benefits 1,091,071 - - Other employee benefits 48,663 390,280 Interests on: Bank overdrafts 46,535 3,392 Bills payable 181,909 232,358 Revolving credit 78,734 94,785 Term loan 62,596 93,522

(c) Reconciliation of tax expenses with accounting loss from discontinued operations:


Loss before taxation (3,805,862) (2,416,987)

Tax at current income tax rate of 24% (913,407) (580,077) Tax effects in respect of: - Depreciation of non-qualifying property, plant and equipment 35,478 27,884 - Non-allowable expenses 12,746 154,588 - Non-taxable income (14,400) - - Expenses from continuing operations (57,600) (57,600) - Deferred tax asset not recognised 937,183 455,205 Over provision of deferred tax asset in prior year 5,000 -

5,000 -

ANNUAL REPORT 2018

77



21. LOSS PER SHARE (i) Basic Loss Per Share

The loss per share of the Group for the financial year is calculated based on the loss for the financial year attributable to owners of the Company divided by the number of ordinary shares in issue during the financial year:

2018 2017 RM RM

Loss attributable to owners of the Company - Continuing operations (1,431,693) (843,489) - Discontinued operation (3,810,862) (2,416,987) (5,242,555) (3,260,476)

Number Number of shares of shares

Number of ordinary shares in issue 49,998,750 49,998,750

Sen Sen Loss per share - Continuing operations (2.86) (1.69) - Discontinued operation (7.62) (4.83) (10.48) (6.52)

(ii) Diluted Loss Per Share

During the current and previous financial years, there were no shares in issuance which would have a dilutive effect on the loss per share of the Group.

22. CASH AND CASH EQUIVALENTS


Represented by: Deposits, cash and bank balances 5,227,749 7,653,002 118,665 216,126 Less: Fixed deposit pledged for banking facilities (Note 12) (3,400,000) (4,600,000) - - Bank overdrafts (Note 15) (814,536) (239,334) - - 1,013,213 2,813,668 118,665 216,126


78



23. SIGNIFICANT RELATED PARTY DISCLOSURES

In addition to related party disclosure mentioned elsewhere in the financial statements, the other disclosures on related party relationships and significant transactions are as follows:-

(i) Related party relationships

Related parties are parties in which one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions. The Company has related party relationships with the following:-

(a) Subsidiary companies of the Company: Amtek Ventures Sdn. Bhd. (“Amtek Ventures”) Amtek Management Sdn. Bhd. (“Amtek Management”)

(b) Subsidiary companies of Amtek Ventures: Apparel International Sdn. Bhd. (“Apparel International”) Power Wave Sdn. Bhd. (“Power Wave”)

(c) Substantial shareholders of the Company: Rintitan Jaya Sdn. Bhd. Megaplace Sdn. Bhd.

(d) Tradewinds International Insurance Brokers Sdn. Bhd. (“Tradewinds”), insurance broker to the Group, whereby the Director of the Company, Tuan Syed Azmin bin Mohd Nursin @ Syed Nor, is also a Director of Tradewinds, is deemed to be a related party of the Group.

(ii) Significant related party transactions

In the normal course of business, the Group and the Company undertake on agreed terms and prices, the following transactions with its related parties:


Transactions entered into with subsidiary companies Assignment of balance to Power Wave on its balances

due from Amtek Ventures - 4,141,270 Repayment from Amtek Ventures 600,000 200,000 Assignment of balance to Amtek Ventures on its

balances due from other receivable 1,460,930 - Advances to Amtek Management 200,000 -


Transaction entered into with related party

Insurance premium paid to Tradewinds 166,954 189,461

Information regarding outstanding balances arising from related party transactions as at 30th June 2018 and 30th June 2017 are disclosed in Note 10.

ANNUAL REPORT 2018

79



23. SIGNIFICANT RELATED PARTY DISCLOSURES (cont’d)

(iii) Compensation of key management personnel

The key management’s remuneration includes fees, salary, bonus and other benefits computed based on the costs incurred by the Group and the Company. The Group and the Company define its Directors as key management and their compensations are as stated in Note 19.

24. SEGMENTAL INFORMATION

The Group is principally involved in the trading of garments in Malaysia, which it has become a discontinued operation during the year.

Accordingly, information analysing operating segment has not been presented.

The following are major customers with revenue equal or more than 10% of the Group’s total revenue (from discontinued operation (Note 20)):

Revenue from discontinued operation 2018 2017 Percentage RM Percentage RM % %

Customer #1 35 5,587,000 - - Customer #2 25 3,919,545 32 8,296,130 Customer #3 14 2,155,013 16 4,137,264 Customer #4 11 1,684,105 15 3,745,726 84 13,345,663 63 16,179,120 Others 16 2,534,855 37 9,595,730

Total 100 15,880,518 100 25,774,850

25. FINANCIAL GUARANTEE

During the financial year, the Company has fully discharged corporate guarantee totalling RM1,500,000 (2017: RM1,500,000) granted to a subsidiary company. The amount utilised under the corporate guarantee as at the reporting date was RMNil (2017: RM1,222,334).


80



26. FINANCIAL INSTRUMENTS

(a) Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(i) Loans and receivables (“L&R”) (ii) Financial liabilities measured at amortised cost (“FL”) Group Company Carrying Carrying 2018 amount L&R/ (FL) amount L&R/ (FL) RM RM RM RM

Financial assets Receivables 2,141,751 2,141,751 2,926,483 2,926,483 Deposit, cash and bank balances 5,227,749 5,227,749 118,665 118,665

7,369,500 7,369,500 3,045,148 3,045,148

Financial liabilities Borrowings (3,119,050) (3,119,050) - - Payables (1,908,484) (1,908,484) (456,466) (456,466)

(5,027,534) (5,027,534) (456,466) (456,466)

2017

Financial assets Receivables 9,276,412 9,276,412 3,861,485 3,861,485 Deposit, cash and bank balances 7,653,002 7,653,002 216,126 216,126

16,929,414 16,929,414 4,077,611 4,077,611

Financial liabilities Borrowings (9,051,780) (9,051,780) - - Payables (11,756,675) (11,756,675) (428,626) (428,626)

(20,808,455) (20,808,455) (428,626) (428,626)

ANNUAL REPORT 2018

81



26. FINANCIAL INSTRUMENTS (cont’d)

(b) Financial risk management

The Group’s financial risk management objective is to ensure that there are adequate financial resources available to meet its operating requirements and managing the associated risks effectively. The Group does not use derivative financial instruments to hedge its risks and trade in financial instruments during the financial year.

The main risks arising from the Group’s financial instruments are market risk, credit risk and liquidity risk.

(i) Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates, and other prices that will affect the Group financial position or cash flows.

Interest rate risk

The Group is exposed to interest rate risk mainly from borrowings and deposits with licensed banks.

The interest rate risk is monitored on an on-going basis and the Group endeavours to keep the exposure at an acceptable level. The Group mitigates its exposure to interest rate fluctuations by borrowing at both fixed and floating rates of interest. The Group considers interest rate risk exposure for its deposits as minimal as they are short term in nature and not held for speculative purposes.

The Group’s exposure to interest rate fluctuation is minimal.

(ii) Credit risk

Credit risk is the risk of financial loss to the Group and the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is exposed to credit risk mainly from trade receivables and cash maintained with financial institutions.

The Company’s exposure to credit risk arises principally from financial guarantee given to banks for credit facilities granted to subsidiaries and amount due from subsidiaries.

At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amounts of the respective class of assets in the statement of financial position.

Trade receivables

In respect of trade receivables, the Group trades only with recognised and creditworthy third parties. In addition, receivable balances are monitored on an ongoing basis and policies and procedures are in place to ensure that the Group’s exposure to bad debts is kept to a minimum.

Information regarding trade receivables that are neither past due nor impaired and concentration of risk are disclosed in Note 10.

Deposits, cash and bank balances

For deposits, cash and bank balances, the Group minimises credit risk by dealing exclusively with reputable financial institutions.

Information regarding the concentration of credit risk of cash and bank balances is disclosed in Note 12.

Financial guarantee contracts

The Company provides unsecured financial guarantee to banks in respect of banking facilities granted to subsidiary companies. The Company monitors on an ongoing basis the results of the subsidiary companies and the repayment made by the subsidiary companies. As at the reporting date, there is no indication that the subsidiary companies would default on repayment. The financial guarantees have not been recognised since the fair value on initial recognition is not material. The financial guarantee has been fully discharged during the financial year.


82




(b) Financial risk management (cont’d)

(ii) Credit risk (cont’d) Amount due from subsidiary companies

The credit risk arising from amount due from subsidiary companies are managed on a group basis by the management of the Company to ensure that risk of losses incurred by the Company due to non-repayment by subsidiary companies are minimal.

At the end of the reporting period, there was no indication that the balances due from subsidiary companies are not recoverable.

(iii) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its payables.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

Maturity analysis

The table below summarises the maturity profile of the Group’s financial liabilities at the reporting date based on contractual undiscounted repayment obligations.

Carrying Contractual Contractual amount rate cash flows Under 1 year 1-2 years Group RM % RM RM RM 2018 Financial liabilities Payables 1,908,484 - 1,908,484 1,908,484 - Borrowings 3,119,050 5.95 - 8.25 3,147,376 2,946,204 201,172

5,027,534 5,055,860 4,854,688 201,172

ANNUAL REPORT 2018

83



26.

FIN

AN

CIA

L IN

STR

UM

ENTS

(con

t’d)

(b

) Fi

nanc

ial r

isk

man

agem

ent (

cont

’d)

(iii)

Liqu

idity

risk

(con

t’d)

Mat

urity

ana

lysi

s (c

ont’d

)

The

tabl

e be

low

sum

mar

ises

the

mat

urity

pro

file

of th

e G

roup

’s fi

nanc

ial l

iabi

litie

s at

the

repo

rting

dat

e ba

sed

on c

ontra

ctua

l und

isco

unte

d re

paym

ent o

blig

atio

ns.

(con

t’d)

Car

ryin

g C

ontr

actu

al

Con

trac

tual

U

nder

G

roup

amou

nt

rate

ca

sh fl

ows

1 ye

ar

1-2

year

s 2

-5 y

ears

R

M

%

RM

R

M

RM

R

M

20

17

Fi

nanc

ial l

iabi

litie

s

P

ayab

les

1

1,75

6,67

5

-

11,

756,

675

1

1,75

6,67

5

-

-

Bor

row

ings

9,0

51,7

80

3.8

3 - 8

.10

9

,138

,502

8

,309

,086

6

31,1

83

198

,233

2

0,80

8,45

5

2

0,89

5,17

7

20,

065,

761

6

31,1

83

198

,233


84




(b) Financial risk management (cont’d)

(iii) Liquidity risk (cont’d) Maturity analysis (cont’d)

The table below summarises the maturity profile of the Company’s financial liabilities at the reporting date based on contractual undiscounted repayment obligations. (cont’d)

Company Carrying Contractual Contractual Under amount rate cash flows 1 year RM % RM RM Financial liabilities 2018 Payables 456,466 - 456,466 456,466

2017 Payables 428,626 - 428,626 428,626 Financial guarantee contracts - - 1,222,334 1,222,334

428,626 1,650,960 1,650,960

(iv) Cash flow risk

The Group carries out cash flow reviews for the next twelve (12) months to ensure that the business operations have sufficient funds available to operate as a going concern. In addition, the Group has credit lines in place to meet its operational requirements.

The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all operating, investing and financing needs are met. In liquidity risk management strategy, the Group measures and forecasts its cash commitments and maintains a level of cash and cash equivalents deemed adequate to finance the activities of the Group.

(c) Fair value information

The carrying amounts of the financial assets and liabilities of the Group and of the Company at the reporting date approximated or were at their fair values.

The following methods and assumptions are used to determine the fair value of financial instruments:

(i) In respect of amounts due from/to receivables, payables, subsidiary companies, cash and bank balance, the carrying amounts approximate fair value due to the relatively short term nature of these financial instruments.

(ii) The carrying amounts of the current portion of borrowings are reasonable approximations of fair value due to the impact of discounting being insignificant.

(iii) The fair value of borrowings which are long term financial liabilities are estimated based on future contractual cash flows discounted at current market assessments of the time value of money and the risks specific to the liabilities.

(iv) The Company provides financial guarantee to a bank for credit facilities extended to a subsidiary company. The fair value of such financial guarantee is not expected to be material as the probability of the subsidiary company defaulting on the credit lines is minimal.

At 30 June 2018 and 30 June 2017, no financial assets and liabilities were carried at fair value.

ANNUAL REPORT 2018

85



26. FINANCIAL INSTRUMENTS (cont’d) (d) Fair value hierarchy

The table below analyses the Group’s assets and liabilities not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in the consolidated statement of financial position.

Carrying Group Level 1 Level 2 Level 3 Total amount 2018 RM RM RM RM RM Assets not carried at fair value Investment properties - - 7,540,000 7,540,000 6,476,684

Liability not carried at fair value Term loan - 199,828 - 199,828 199,828

2017 Assets not carried at fair value Investment properties - - 540,000 540,000 492,000

Liability not carried at fair value Term loan - 802,618 - 802,618 802,618

There were no transfers between fair value measurements hierarchy during the financial year ended 30 June 2018 and 30 June 2017.

Valuation processes applied by the Group for Level 3 fair value

The fair valuation is primarily based on financial projections prepared by the management and is premised on the following assumptions:

(i) Comparison of the Group’s investment properties with similar properties that were listed for sale within the same locality or other comparable localities;

(ii) Information from relevant property valuers and real estate agents on market conditions and changing market trends; and

(iii) Market price of property in vicinity compared.

Sensitivity to changes in the assumptions applied

With regards to the assessment of the fair value of investment properties, the management believes that no reasonably possible movements in any of the above key assumptions would cause the fair value of the investment property to vary significantly from the fair value disclosure.


86



27. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(i) On 8 January 2018, an indirect wholly-owned subsidiary company of the Company, Apparel International Sdn. Bhd. entered into a sale and purchase agreement with Crocodile International Sdn. Bhd. (“CISB”) for:



On 13 March 2018, the consideration was revised and agreed at RM5,587,000, being 49% of the final inventory

count as at 31 January 2018.

An upfront payment of RM3,000,000 was received on 31 January 2018 and the balance sum of RM2,587,000 are to be collected over equal monthly instalment payments commencing 1 March 2018.

The disposal was completed on 18 May 2018.

(ii) On 15 January 2018, the Directors of the Company announced that the Company had triggered the prescribed criteria under Paragraph 2.1(a) of Practice Note 17 (“PN 17”) of the Main Market Listing Requirements of Bursa Securities, as the shareholders’ equity of the Group is less than RM40.0 million and is 25% or less of its total issued and paid-up capital.

The Company, in its monthly announcement through Bursa Malaysia, that it is formulating a plan to regularise its financial condition (“Regularisation Plan”) for Securities Commission Malaysia and Bursa Securities’ approval. The Company is required to comply and submit the Regularisation Plan to the relevant authorities within 12 months from 15 January 2018 (first announcement pursuant to PN 17) and will make the necessary announcement on the Regularisation Plan in accordance with the requirements under the PN 17.

ANNUAL REPORT 2018

87

2014 2015 2016 2017 2018 Revenue (RM’000) 45,344# 40,168 31,799 25,822 15,960#

Profit / (Loss) Before Tax (RM’000) 908# (3,333) (2,614) (3,261) (5,188)#

Loss After Tax (RM’000) (175)# (3,802) (2,620) (3,261) (5,193)#

Net Assets (RM’000) 24,349 20,549 17,930 14,670 9,427 Loss Per Share Attributable to The Owners of The Company (Sen) (0.35) (7.60) (5.24) (6.52) (10.48)

# Incorporated results classified as “Discontinued Operations and Disposal Group” which were reported separately as a line item.

FINANCIAL HIGHLIGHTSGROUP – YEAR ENDED 30 JUNE


88

STATISTIC OF SHAREHOLDINGSAS AT 28 SEPTEMBER 2018

DISTRIBUTION SCHEDULE OF SHAREHOLDINGS AS AT 28 SEPTEMBER 2018

NO. OF NO. OF % OF TOTAL HOLDERS SIZE OF HOLDINGS SHARES ISSUED CAPITAL

151 Less than 100 shares 6,497 0.01 70 100 to 1,000 shares 31,895 0.06 759 1,001 to 10,000 shares 1,952,658 4.57 90 10,001 to 100,000 shares 2,553,925 5.90 27 100,001 to less than 5% of issued shares 20,437,525 39.43 2 5% and above of issued shares 25,016,250 50.03

1,099 49,998,750 100.00

SHAREHOLDERS WITH HOLDINGS OF 5% AND ABOVE AS AT 28 SEPTEMBER 2018

NAME SHARE HOLDINGS %

1. Rintitan Jaya Sdn. Bhd. 15,132,500 30.272. Megaplace Sdn. Bhd. 11,783,750 23.573. Silauan Mentari Sdn. Bhd. 2,498,750 5.004. Tangkas Minda Sdn. Bhd. 2,498,750 5.005. Tugu Kristal Sdn. Bhd. 2,498,750 5.00

Total No. of Shareholders : 5Total Shareholdings : 34,412,500Total Percentage : 68.84

DISTRIBUTION SCHEDULE OF DIRECTORS’ SHAREHOLDINGS AS AT 28 SEPTEMBER 2018

NAME DIRECT % INDIRECT %

1. Syed Azmin bin Mohd Nursin @ Syed Nor 12,500 0.03 11,783,750 1 23.572. Dato’ Ng Tieh Chuan - - - -3. Thong Teong Bun - - - -4. Ahmad bin Abu Bakar - - - -5. Wan Rashid bin Dato’ Wan Mohamed - - - -

Notes:1 Deemed interest by virtue of his substantial shareholdings in Megaplace Sdn. Bhd. pursuant to Section 6A of the Act.

ANNUAL REPORT 2018

89

STATISTIC OF SHAREHOLDINGS (cont’d)AS AT 28 SEPTEMBER 2018

THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS AS AT 28 SEPTEMBER 2018

% OF TOTAL NAME SHAREHOLDINGS ISSUED CAPITAL

1. RINTITAN JAYA SDN.BHD 15,132,500 30.27

2. MEGAPLACE SDN BHD 9,883,750 19.77

3. SILAuAN MENTARI SDN BHD 2,498,750 5.00

4. TANGKAS MINDA SDN BHD 2,498,750 5.00

5. TuGu KRISTAL SDN BHD 2,498,750 5.00

6. NEW KOTA CREDIT SENDIRIAN BERHAD 2,154,650 4.31

7. MEGAPLACE SDN BHD 1,900,000 3.80

8. SEAPORT TERMINAL (JOHORE) SDN BHD 1,250,000 2.50

9. CIMSEC NOMINEES (TEMPATAN) SDN BHD 848,750 1.70 EXEMPT AND FOR CIMB TRuSTEE BERHAD (CO1046)

10. MERCu JuNJuNGAN SDN BHD 750,000 1.50

11. NORLIYAH BINTI JAAFAR 645,000 1.29

12. EFFECTIVE STRATEGY SDN BHD 633,750 1.26

13. MOHAMAD ASHRAF BIN ABDuL RAHIM 562,500 1.12

14. CHIN WAH YIN 558,600 1.12

15. LIM POH FONG 417,600 0.84

16. CITIGROuP NOMINEES (TEMPATAN) SDN BHD 375,000 0.75 PLEDGED SECuRITIES ACCOuNT FOR SuRIANI ABDuL AZIZ

17. ISMAIL BIN HAMZAH 343,750 0.69

18. SYED HuSSIN BIN SHAIKH ALJuNID 318,625 0.64

19. uOB KAY HIAN NOMINEES (ASING) SDN BHD 301,250 0.60

EXEMPT AND FOR uOB KAY HIAN PTE LTD

20. TAN AH LENG 296,250 0.59

21. MAYBANK SECuRITIES NOMINEES (TEMPATAN) SDN BHD 286,800 0.57 PLEDGED SECuRITIES ACCOuNT FOR WONG TIANG LIEN

22. CHYE KOK HOE 219,000 0.44

23. TAI POH CHOY 192,900 0.39

24. IDENTITI GELIGA SDN BHD 187,500 0.38

25. PuBLIC NOMINEES (TEMPATAN) SDN BHD 157,500 0.32

PLEDGED SECuRITIES ACCOuNT FOR TAN KING TAI @ TAN KHOON HAI

26. HLB NOMINEES (TEMPATAN) SDN BHD 155,600 0.31

PLEDGED SECuRITIES ACCOuNT FOR TAI POH CHOY

27. BuKHARY HOLDINGS SDN BHD 152,500 0.30

28. LEE FOOK KHEuN 123,750 0.24

29. NuR SuRIANA BINTI ABDuLLAH 110,000 0.22

30. ANG HuAT KEAT 100,000 0.19

45,553,775 91.11


90

PROPERTIES OF THE GROUP

NO.

1.

2.

ADDRESS

Kompleks Adorna Gold, Jalan Brick Klin, Lot No. 492, Section 10, Town of Georgetown, North East Penang.

12-K, Jalan Tandang,Seksyen 51,46050 Petaling Jaya,Selangor Darul Ehsan.

DATE OF ACQUISITION

07/07/1994

01/09/2009

TENURE

Freehold Land

99 yearsLeasehold Land(Expiring on 13/11/2068)

LAND AREA

(SQ. M)

433.77

28,328

DESCRIPTION AND EXISTING

USE

Industrial lot in Commercial ComplexTenant occupied

2 1/2 storeysemi-detached factoryTenant occupied

APPROXIMATE AGE OF

BUILDING (YEARS)

22

9

NET CARRYING AMOUNT @ 30.06.2018

RM’000

480

5,997

Notes:

Dated this day of 2018

Signature/Seal of Shareholder

No. Descriptions For Against

1

To approve payment of Directors’ fees for the year ended 30 June 2018.

2 To re-elect the retiring Directors, under Articles 101 of the Company’s Articles of Association:- Encik Ahmad bin Abu Bakar

3 To re-elect the retiring Directors, under Articles 101 of the Company’s Articles of Association:- Mr. Thong Tiong Bun

4

5

To re-appoint Messrs Peter Chong & Co. as Auditors and authorise the Directors to fix their remuneration.

No. of Shares Held

I/We(please use block letters)

of(full address)

being a Member/Members of AMTEK HOLDINGS BERHAD (Co. No. 125863-K), do hereby appoint

or failing him/her NRIC NO:

of

NRIC NO:

of

as my/our proxy to vote for me/us and on my/our behalf at the 34th Annual General Meeting to be held at Auditorium Room, Islamic Arts Museum Malaysia, Jalan Perdana, 50480 Kuala Lumpur on Thursday, 22 November 2018 at 11.45 a.m. or any adjournment thereof in the manner indicated below in respect of the following Resolution:

Please indicate with a () whether you wish your votes to be cast for or against the Resolutions. In the absence of specific directions, your proxy will vote or abstain as he/she thinks fit.

1. In respect of deposited securities, only a depositor whose names appear in the Record of Depositors on 14 November 2018 shall be eligible to attend the meeting or appoint proxy(ies) to attend .and/or vote in his/her stead.

2. A member of the Company entitled to attend and vote at the AGM is entitled to appoint proxy(ies) to attend and vote in his stead. When a member appoints more than one (1) proxy, the appointments shall be invalid unless the proportion of the shareholdings to be represented by each proxy is specified. A proxy need not be a member of the Company and a member may appoint any person to be his/her proxy without limitation.

3. If the appointer is a corporation, this form must be executed under its Common Seal or hand of its attorney.4. In the event the member duly executes the Form of Proxy but does not name any proxy, such member shall be deemed to have appointed the Chairman

of the meeting as his proxy.5. Where a member is an authorized nominee as defined under the Securities Account (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. To be valid this Form duly completed must be deposited at the registered office of the Company at 110 Jalan Maarof, Bangsar Baru, 59000 Kuala Lumpur

not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.7. Pursuant to Paragraph 8.29A (1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all the resolutions set out in this Notice

will be put to vote by way of a poll.

Amtek Holdings Berhad (125863-K)(Incorporated in Malaysia under the Companies Act. 1965)

PROXY FORM

Special Resolution

Ordinary Resolution

To approve Mr. Thong Teong Bun to continue in office as an Independent Non-Executive Director.

6 To approve Encik Ahmad bin Abu Bakar to continue in office as an Independent Non-Executive Director.

STAMP

To

The Company SecretaryAMTEK HOLDINGS BERHAD (125863-K)

110, Jalan Maarof,Bangsar Baru,59000 Kuala Lumpur.

First fold here

Then fold here

Amtek Holdings Berhad (125863-K)(Incorporated in Malaysia under the Companies Act. 2016)

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