2017 - Malaysiastock.biz...Nov 24, 2017 · construction and related machinery and equipment 100%...

CONTENTS

VISION• Tobetheleadingsteelcompanyintheregion

MISSION• Buildvalueforshareholders• Participateinthedevelopmentofthecountry• Totalcustomersatisfaction• Enhancementofexistingcorebusinesstopositionforgrowth• Onestopsteelcentre• Continuouslydevelophumanasset

OUR

Corporate Structure

Corporate Information

Directors’ Profile

Key Management Profile

Chairman’s Statement

Management Discussion And Analysis

Statement on Corporate Governance

Statement of Directors’ Responsibility in Relation to the Financial Statements

Statement on Risk Management and Internal Control

Audit Committee Report

Sustainability and Corporate Responsibility

Financial Statements for FYE 31 July 2017

Properties of the Group

Analysis of Shareholdings

Analysis of RCUIDS Holdings

Analysis of Warrant Holdings

Notice of Twenty-First Annual General Meeting

Form of Proxy

002003004009010012018029033036039041126128131134137

2 HIAP TECK VENTURE BERHAD . ANNUAL REPORT 2017

100%Hiap Teck Hardware

Sdn. Bhd.(276336-A)

Importer,exporterandgeneraldealerof

steelproducts,hardwareandbuildingmaterials

55%Vista Mining Sdn. Bhd.

(1036773-K)Exploring,contractingandactivitiesrelatedtothemining,processingand

saleofironore.

100%Nexus Pacific Property

Sdn. Bhd.(Formerly known as

Hiap Teck Property Sdn. Bhd.)

(313284-V)Dormant

100%Huatraco Singapore Pte.

Ltd.(201103457N)

Scaffoldingworksandwholesaleofindustrial,constructionandrelatedmachineryandequipment

100%Tiek Hong Hardware (B’worth) Sdn. Bhd.

(278478-T)

Dormant

100% Huatraco Scaffold

Sdn. Bhd.(240510-T)

Manufacturing,sellingandrentingof

scaffoldingequipmentandrangeofsteelproducts

100%Alpine Pipe

Manufacturing Sdn. Bhd.(267844-V)

Manufacturingandsellingofpipes,hollow

sectionsandothersteelproducts

100%Huatraco Contracts

Sdn. Bhd.(282720-D)

Dormant

100%Huatraco Investment

Pte. Ltd.(201102260E)

InvestmentHoldings

55%Eastern Steel Sdn. Bhd.

(557033-V)Manufacturing,sellinganddealinginarangeofsteelproductsusingblastfurnaceplant

CORPORATE STRUCTURE

100%Briliant Decade Transport

Agency Sdn. Bhd.(270261-D)

Provisionoftransportationservices

100%Hiap Teck Resources

Sdn. Bhd.(409923-P)

InvestmentHoldings

3HIAP TECK VENTURE BERHAD . ANNUAL REPORT 2017

BOARD OF DIRECTORS

CHAIRMAN TanSriAbdRahmanBinMamat

EXECUTIVE DEPUTY CHAIRMAN TanSriDato’LawTienSeng INDEPENDENT NON-EXECUTIVE DIRECTORS Mr.NgSoonLai@NgSiekChuan Mr.LeowHoiLoong@LiowHoiLoong Mr.LeeChingKion NON-INDEPENDENT NON-EXECUTIVE DIRECTOR Mr.WangShenghua(Resignedw.e.f.from 15December2016) EXECUTIVE DIRECTORS Mr.FooKokSiew Mr.TanShauMing Mr.LawWaiCheong(Appointedw.e.f.from 03January2017)

SENIOR INDEPENDENT DIRECTOR Mr.NgSoonLai@NgSiekChuan

AUDIT COMMITTEE

CHAIRMAN Mr.NgSoonLai@NgSiekChuan MEMBERS TanSriAbdRahmanBinMamat Mr.LeowHoiLoong@LiowHoiLoong Mr.LeeChingKion

REMUNERATION COMMITTEE

CHAIRMAN TanSriAbdRahmanBinMamat

MEMBERS Mr.LeowHoiLoong@LiowHoiLoong Mr.FooKokSiew

NOMINATING COMMITTEE

CHAIRMAN TanSriAbdRahmanBinMamat MEMBERS Mr.LeowHoiLoong@LiowHoiLoong Mr.LeeChingKion RISK MANAGEMENT COMMITTEECHAIRMAN Mr.LeowHoiLoong@LiowHoiLoong MEMBERS Mr.LeeChingKion Mr.FooKokSiew

ESOS COMMITTEECHAIRMAN TanSriAbdRahmanBinMamat MEMBERS Mr.LeowHoiLoong@LiowHoiLoong Mr.FooKokSiew

COMPANY SECRETARY NgYimKong(LS0009297) c/oStrategyCorporateSecretariatSdn.Bhd. Unit07-02,Level7,PersoftTower 6B,PersiaranTropicana 47410PetalingJaya SelangorDarulEhsan,Malaysia TelNo.:(6)03-78045929 FaxNo.:(6)03-78052559

REGISTRAR SymphonyShareRegistrarsSdn.Bhd.(378993-D) Level6,SymphonyHouse BlockD13,PusatDaganganDana1 JalanPJU1A/46 47301PetalingJaya SelangorDarulEhsan,Malaysia TelNo.:(6)03-78418000 FaxNo.:(6)03-78418008

AUDITORS KPMGPLT(LLP0010081-LCA&AF:0758) CharteredAccountants Level10,KPMGTower 8,FirstAvenue,BandarUtama 47800PetalingJaya SelangorDarulEhsan,Malaysia

HEAD OFFICE & REGISTERED OFFICE Lot6096,JalanHajiAbdulManan Batu5-1/2,OffJalanMeru 41050Klang SelangorDarulEhsan,Malaysia TelNo.:(6)03-33778888 FaxNo.:(6)03-33929198 Website:www.htgrp.com.my

PRINCIPAL BANKERS AllianceBankMalaysiaBerhad(88103-W) AmBank(M)Berhad(8515-D) HongLeongBankBerhad(97141-X) KuwaitFinanceHouse(Malaysia)Berhad(672174-T) MalayanBankingBerhad(3813-K) IndustrialandCommercialBankofChina(Malaysia) Berhad(839839-M)STOCK EXCHANGE BursaMalaysiaSecuritiesBerhad (MainMarket) Stockcode:5072

CORPORATE INFORMATION


Y.BHG. TAN SRI ABD RAHMAN BIN MAMATChairman / Independent Non-Executive DirectorMalaysian, age 65Chairman of the Remuneration CommitteeChairman of the Nominating CommitteeChairman of the ESOS CommitteeMember of the Audit Committee

Y. Bhg. Tan Sri Abd Rahman Bin Mamat was appointedto our Board as Independent Non-Executive Director on28January2011.Hewas thenappointedasChairmanoftheCompanyon12December2012.

He joined MITI as Assistant Director in April 1975 andserved in various capacities in MITI for 35 years beforeretiringinDecember2010whichincluded(a)DeputyTradeCommissioner, Malaysian Trade Office, New York, theUSA;(b)DirectorofTrade,MalaysianTradeCentre,Taipei,Taiwan; (c)EconomicCounsellor/TradeCommissionerandDeputy Permanent Representative to the United NationsEconomicandSocialCommission,MalaysianTradeOffice,Bangkok,Thailand;(d)SpecialAssistanttotheMinisterofMITI,TanSriRafidahAziz;(e)BoardofDirector,MalaysianIndustry-GovernmentGroupforHighTechnology(MIGHT);(f) Director of Industries; (g) Senior Director, Policy andIndustry, Services Division; (h) Chairman of MalaysiaExternal Trade Development Corporation (“MATRADE”);(i) Deputy Secretary-General (Industry); and (j) SecretaryGeneralofMITI.

During his tenure in MITI, he also served as MITI’srepresentative on theboard of variousgovernment-linkedcompaniesandcorporationsincludingMalaysianInvestmentDevelopmentAuthority(MIDA),JohorCorporation,RegionalEconomicDevelopmentAuthority(RECODA),SarawakandSmall and Medium Corporation Malaysia, Pahang State

EconomicDevelopmentCorporation,MalaysianTechnologyDevelopmentCorporationandMATRADE.

He had represented Malaysia in numerous internationalmeetings,negotiations,conferencesandsymposiumsandhad involved in formulating, implementingandmonitoringpoliciesandstrategiesoninternationaltradeandindustriesaswellasentrepreneurshipdevelopment.

HewasanhonorarymemberoftheASEANFederationofEngineeringOrganisations,aMalaysianLeaderfortheHighLevel Task Force on ASEAN Economic Integration and isthe Chairman of the Advisory Board of the InternationalCouncil forSME&EntrepreneurshipMalaysia, andBoardof Trustees of EnactusMalaysia Foundation, a non-profitorganisation aimed at grooming university students intofuturebusinessleaders.

He sits on the board of directors of several public listedcompanies in Malaysia including Lotte Chemical TitanHolding Berhad, BioAlpha Holdings Berhad, MalaysianIndustrialDevelopmentFinanceBerhad,DagangNeXchangeBerhad and Parkson Holdings Berhad as well as severalprivatelimitedcompaniesinMalaysiawhichareinvolvedinfinance,manufacturing,retailandservicessectorscoveringgloballogistics,healthcareandoil,gasandenergy.

Tan Sri Abd Rahman has no family relationship with anyDirectors and/or Major Shareholders of the Company,noranyconflictof interestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.

He has attended all the 4 boardmeetings of HTVB heldduringthefinancialyearended31July2017.

DIRECTORS’ PROFILE


Y. BHG. TAN SRI DATO’ LAW TIEN SENG Executive Deputy Chairman Malaysian, age 64

NG SOON LAI @ NG SIEK CHUAN Independent Non-Executive DirectorMalaysian, age 63Chairman of the Audit Committee

TanSriDato’LawTienSengwasappointedtoourBoardastheDeputyChairmanandNon-IndependentNon-ExecutiveDirectoron1June2010.Hewasre-designatedasExecutiveDeputyChairmanon3August2011.

Heisabusinessmanandownsagroupofcompanieswhichare diversified in various industries engaged in mining,manufacturingofsteelproducts,propertydevelopmentandinvestment. He currently serves on the board of severalprivatelimitedcompaniesinMalaysia.

Tan Sri Dato’ Law is the father ofMr. LawWai Cheong,an Executive Director of Hiap Teck Venture Berhad. TanSriDato’Law isdeemedtohave interest inHTVBviahisindirect interest in TS Law Investments Limited, amajorshareholderofHTVB.HehasnoconflictofinterestwiththeCompanyandhasnoconvictionsforanyoffencesoverthepasttenyears.


Mr.NgSoonLaiwasappointedtoourBoardasIndependentNon-ExecutiveDirectoron18August2009.

He is a fellow member of the Institute of CharteredAccountantsinEngland&Wales.HehashadseveralyearsofexperienceintheaccountingprofessionwithCoopers&Lybrand in London& Kuala Lumpur beforemoving on tothefinancialsectorin1980.PriortojoiningAllianceBankinJuly1991asGeneralManagerofCredit,hehadservedinvariouspositionsinaleadinglocalmerchantbank&financecompany.HewasappointedastheChiefExecutiveDirectorofAllianceBankMalaysiaBerhadin1994andtotheBoardofAllianceMerchantBankBerhadin2002untilhisresignationin2005.Sincethen,hehasheld thepostof IndependentDirectorinseveralpubliclistedcompanies.

Mr.Ng ispresentlyaDirectorofChinaConstructionBank(Malaysia) Berhad, Tune Protect Group Berhad (formerlyknown as Tune Ins Holdings Berhad) and ELK DesaResourcesBerhadandWTCHoldingsBerhad.

He has no family relationship with any Directors and/orMajor Shareholders of the Company, nor any conflict ofinterestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.


DIRECTORS’ PROFILE (Cont’d)


LEOW HOI LOONG @ LIOW HOI LOONG Independent Non-Executive DirectorMalaysian, age 63Chairman of the Risk Management CommitteeMember of the Audit CommitteeMember of the Remuneration CommitteeMember of the Nominating CommitteeMember of the ESOS Committee

Mr. Leow Hoi Loong @ Liow Hoi Loong was appointedto our Board as Independent Non-Executive Director on13December2012.

He is a FellowMember of the Chartered Association ofCertified Accountants, United Kingdom. He started hiscareer with American International Assurance Co. Ltd.in 1977 asMarketing Executive in marketing of financialservices.In1979,hejoinedPacificBankBerhadasRegionalCreditOfficer andwas latermade theAccountant at theBank’sHeadOfficeuntil1982.HethenjoinedtheLowYatGroupandAPLandBhdasGroupFinancialControllerandCompany Secretary and served the position for six years(1982–1988).HewasaCorporateandInstitutionalDealerwithTASecuritiesBerhadfrom1988to2002.

Mr. Leow owns andmanages several private companiesinvolved in property investment, retailing business andindustrial property development. He is holding a dealer’srepresentativelicensefromM&ASecuritiesBerhad.

Mr.LeowhasnofamilyrelationshipwithanyDirectorsand/orMajorShareholdersoftheCompany,noranyconflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.


LEE CHING KION Independent Non-Executive DirectorMalaysian, age 63Member of the Audit CommitteeMember of the Risk Management CommitteeMember of the Nominating Committee

Mr. LeeChingKionwas appointed to ourBoard as theExecutiveDirectorandGroupChiefOperatingOfficeron1 June 2010.Mr. Leewas then re-designated as Non-IndependentNon-ExecutiveDirector on 29March 2012and on 26 September 2014, he was re-designated asIndependentNon-ExecutiveDirector.

Mr Leeobtained hisBachelor of SciencewithHonoursdegree in Metallurgy and Materials Science fromUniversityofNottingham,England.HewaswithYodoshiMalleble(M)Sdn.Bhd.from1979to1981.HethenjoinedJebsen-JessenEngineeringSdn.Bhd.asDegussaSalesEngineer in1981. In1983,he left to joinAmsteelMillsSdn.Bhd.asSalesEngineerandlaterasHeadofResearch&DevelopmentandQualityControlDepartment.Hewasthere for seven (7) years. He joinedWuthelamHolding(M)GroupofCompaniesasGeneralManagerin1990andwaslaterappointedasaDirectorin1991untilheleft in1997.

Subsequently, he was with DNP Holdings Berhad asHeadofProperty/BusinessDivision from1997 to2001.From2001 to2003,hewasconcurrently theManagingDirectorofPosimBerhad,theChiefExecutiveOfficerofBright Steel Sdn. Bhd. and the Commercial Director ofSteelDivision,allwithintheLionGroup.HeresignedfromallhispositionswithintheLionGroupinJune2003.HewasalsotheDirectorofMalayawataSteelBerhad,MagnaPrimaBerhad,MelewarIndustrialGroupBerhad,HuaJooSengEnterpriseBerhadandMidWestLtd,anAustraliancompany.

Hecurrentlyservesontheboardofseveralprivatelimitedcompanies.

Mr.LeehasnofamilyrelationshipwithanyDirectorsand/orMajorShareholdersoftheCompany,noranyconflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.

Hehasattendedall the4boardmeetingsofHTVBheldduringthefinancialyearended31July2017.



FOO KOK SIEW Executive DirectorMalaysian, age 56Member of the Risk Management CommitteeMember of the Remuneration CommitteeMember of the ESOS Committee

Mr. Foo Kok Siew was appointed to our Board asIndependentNon-ExecutiveDirectoron24February2010.Hewas re-designatedasExecutiveDirectoron1January2013.

Mr. Foo holds a Bachelor of Economics Degree fromMonashUniversity,Melbourne.HestartedhiscareerattheChaseManhattanBank, Kuala Lumpur in 1985 and sincethen,hehasheldseniorpositionswithvariouscorporationsincluding Carr Indosuez Asia Limited, Hong Kong, InsasBerhad,HLGCapitalBerhadandKejoraHartaBerhad.Hewas the Chief Executive Director of Alliance InvestmentBankBerhad(2004to2006).

He is currently an Independent Non-Executive Directorof InariAmertronBerhadandhealsositsontheboardofseveralotherprivatelimitedcompanies.

Mr.FoohasnofamilyrelationshipwithanyDirectorsand/orMajorShareholdersoftheCompany,noranyconflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.



TAN SHAU MINGExecutive DirectorMalaysian, age 54

Mr.TanShauMingjoinedAlpinePipeManufacturingSdnBhd,awholly-ownedsubsidiaryofourCompany,asChiefProductionOfficerinMarch2012andwassubsequentlyappointed to our Board as Executive Director on26September2014.

Prior to that,Mr. Tanworked at theHSBCGroup uponcompletionofhis“A”levelexaminationsin1982.DuringhiscareeratHSBC,hehasbeenhonoredwiththe“TopMarketingandRetainerAchieverforPersonalBanking”andalsothe“TopSalesPerformer”awardsuntilhisresignationfromHSBCin1999.

Mr. Tan was an Executive Director of TAP ResourcesBerhadfrom1999until2004,andhewasalsoamemberof its Remuneration Committee. His responsibilities inthe company included Property Development, HumanResources and Administration. Thereafter, he joinedJi Kang Dimensi Sdn. Bhd., a Hot Rolled Steel Platesmanufacturing company based in Gebeng, Kuantan asExecutive Director until 2012. His responsibilities inthe company included Factory Operations, Logistic andTransportations.

Mr.TanhasnofamilyrelationshipwithanyDirectorsand/orMajorShareholdersoftheCompanynoranyconflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.

Hehasattendedall the4boardmeetingsofHTVBheldduringthefinancialyearended31July2017.


LAW WAI CHEONGExecutive DirectorMalaysian, age 31


Mr.LawWaiCheongwasappointedasExecutiveDirectorofHiapTeckVentureBerhad(“HTVB”)on3January2017.

Mr. Lawholds a LLB (Hons)Cardiff,U.K;Barrister-at-law,Lincoln’sInn;andMscinManagement(Merit)London,U.K.Havingcompletedhisstudies,Mr.LawreturnedtoMalaysiain 2010. To gain local industry and finance experience,Mr. Law opted to seek employment with Hong LeongInvestmentBankBerhad(HLIB).WhileinHLIB,hefocusedonareasofcorporatefinanceandcorporateadvisory.AfterHLIB,Mr.LawchamberedattheLawOfficeofKKChongfor9months.

Mr.LawisaDirectorofTSLawGroup,adiversifiedgroupofcompaniesengagedinsteelproductionanddistribution,

mining of iron ore, bauxite, tungsten, gold andmolybdenumandpropertydevelopmentandinvestmentsinMalaysia,China,AustraliaandtheUnitedKingdom.

Mr.LawisasonofTanSriDato’LawTienSeng,amajorshareholderandtheExecutiveDeputyChairmanofHiapTeck Venture Berhad. He has no convictions for anyoffencesoverthepasttenyears.

Hehasattended2outofthe4boardmeetingsofHTVBheld during the financial year ended 31 July 2017. The2meetingsthathedidnotattendwereheldpriortohisappointment.


KEY MANAGEMENT PROFILE

PHANG CHIN KHIONGChief Operating OfficerMalaysian, age 48

YEO BEE HWANGroup Chief Financial OfficerMalaysian, age 49

TAN YUEN HONG, ALEXChief Commercial OfficerMalaysian, age 51

SEH KWANG WEOI, MICHAELChief Commercial Officer Malaysian, age 49

Mr. Phang Chin Khiong was appointed as the Group’sChiefOperatingOfficer inAugust2017.Priortothat,Mr.Phang was the Chief Commercial Officer of Alpine PipeManufacturingSdn.Bhd.andHiapTeckHardwareSdn.Bhd.

Mr. PhangwaswithWing Tiek Steel Pipes Sdn. Bhd. asAssistantSalesManagerbeforehelefttopursueacareerinthesteelindustrywithAlpinePipeManufacturingSdn.Bhd.Withmorethan20yearsofexperienceintheindustry,hehas accumulated invaluable experience and knowledge inthesaleandmarketingofironandsteelproducts.

Mr.PhanghasnofamilyrelationshipwithanyDirectorsand/orMajorShareholdersoftheCompany,noranyconflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.

Ms. Yeo Bee Hwan was appointed as Acting CFO on10August2016andwasconfirmedand re-designatedasGroupCFOinJanuary2017.

Ms.YeoisanassociatememberoftheCharteredInstituteofManagementAccountants(CIMA),UK;CharteredGlobalManagement Accountant (CGMA), powered by CIMA &AmericanInstituteofCharteredPublicAccountants(AICPA)andamemberofMIA.

She started her career as external auditor before joiningHumeIndustriesDivisionunderHongLeongGroupin1994.Shethen joinedTuanSingHoldingLimitedGroup in2000andsincethen,shehasheldseniorpositionswithvariouscorporations including Wah Seong Corporation BerhadGroup; Bumi Armada Berhad Group and Oriental SheetPiling Group (JV with Steel Division under Arcelor MittalGroup).

Ms.YeohasnofamilyrelationshipwithanyDirectorsand/orMajorShareholdersoftheCompany,noranyconflictofinterestwiththeCompany.Shehasnoconvictionsforanyoffencesoverthepasttenyears.

Mr. Tan YuenHong,was appointed as Chief CommercialOfficer ofHiap TeckHardwareSdn.Bhd. (HTH) –ProjectDivision in 2011. In August 2017, his role as ChiefCommercial Officer was expanded to include HuatracoScaffoldSdn.Bhd.

Mr.Tanstartedhiscareerin1985whenhejoinedthesalesdepartmentofWingTiekHoldingsBhd.Hespent8yearsinWing Tiek Holdings Bhd. before joining HTH, awhollyownedsubsidiaryofHTVBin1993.Hismorethan20yearsofexperienceinmarketinghasaccordedhimfamiliaritywiththehardwaretradingbusiness.

Mr.TanhasnofamilyrelationshipwithanyDirectorsand/orMajorShareholdersoftheCompany,noranyconflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.

Mr.SehKwangWeoiwasappointedasChiefProcurementOfficerforboththeManufacturingandTradingdivisionsoftheGroupin2011.InAugust2017,hisrolewasexpandedtoincludethepositionofChiefCommercialOfficerforHiapTeckHardwareSdn.Bhd.

Mr.SehholdsaBachelorofCommerceDegree from thePittsburghStateUniversity,UnitedStatesofAmericaandaMasterofBusinessAdministrationfromPittsburghStateUniversity,UnitedStatesofAmerica.

He started his career in 1994 as Personal Assistant toGeneral Manager of Bright Steel Sdn. Bhd., a companyunderLionGroupactingassteelservicecentresupplyinghot-rolled and cold rolled steel sheets and other relatedsteel products. Mr. Seh was delegated to be in chargeof purchasing steel material as well as marketing of thecompany’ssteelproducts. In1998,hewas transferred toMegasteelSdn.Bhd.,asitsSeniorMarketingOfficer.

In2001,hejoinedSolidHopeSdn.Bhd.astheMarketingManageroverseeingtheoperationofthecompanyaswellas the marketing of the company’s steel products. HewaswithSolidHopeSdn.Bhd. from2001 to2004.Withmore than20yearsofexperience in the industry,hehasaccumulated invaluableexperienceandknowledge in ironandsteelproducts.

Mr.SehhasnofamilyrelationshipwithanyDirectorsand/orMajorShareholdersoftheCompany,noranyconflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffencesoverthepasttenyears.


CHAIRMAN’S STATEMENT

CORPORATE DEVELOPMENT

Eastern Steel Sdn. Bhd. (“ESSB”), a 55%-owned jointventure(“JV”)ofHTVBandaproducerofsteelslabsusingblast furnace,had inOctober2015suspendedoperationsduetothethendifficultmarketconditions.

On 15 June 2016, ESSBentered into aMemorandumofUnderstanding (MOU) with Angang Group Hong KongCompany Limited (“Angang-HK), to explore, discuss andnegotiateareasofcooperationbetweenESSBandAngang-HKincludingtheresumptionofproductionofESSB,futureexpansionofESSB’sproductioncapacityandproductrange,andAngang-HK’sparticipationintheequityofESSB.

FollowingtheMOU,HTVBhadon31October2016enteredinto a corresponding Cooperation Agreement (“COOPAgreement”)with(1)AnSteelInternationalCo.,Limited;(2)OrientSteel InvestmentPte.Ltd.; (3)Chinaco InvestmentPte.Ltd.;and(4)ESSB(collectivelyreferredtoas“Parties”)whereby the Parties shall use their best endeavorsto negotiate and finalize the details of the ProposedTransactions therein such that the definitive agreements

shall be entered into by 31 December 2016 and theconditions precedent as set out therein to be fulfilledbefore28February2017.

TheCOOPAgreementwas extendedon 30December2016,andfurtherextendedon28February2017.On 3 April 2017, HTVB announced that the extendedperiodending31March2017willnotbeextendedandaddedon6April2017,thatthedecisionbytheBoardofDirectorsofESSBnottoextendthedeadlinewasbecausethePartiesfailedtoagree,finalizeandenterintodefinitiveagreements for the Proposed Transactions despite theextended period of up to 31March 2017, and that thenegotiationsweretoolongandthecontinuedsuspensionofESSB’soperationswasnotinthebestinterestofthecompany.

ESSB has since commenced planning to resumeproduction taking into account market conditions andrelatedfactors.

Dear Shareholders,

On behalf of the Board of Directors, I present to you the AnnualReportandAuditedFinancialStatementsofHiapTeckVentureBerhad(“HTVB”) and its Subsidiaries (“the Group”) for the financial yearended31July2017.

FY2017wasaneventfulyearfortheGroup.AsChina,thelargeststeelproducingcountryintheworld,progresseswithitsplannedreductioninsteelproductioncapacityandtheclosuresofitsinductionfurnaces,steelpriceshavesurgedacrosstheworld.Thishaslargelybenefittedthesteelplayersandisamarkedimprovementfromtheearlieryearsofdepressedpricesduetotheinfluxofcheapimports.

Onthedomesticfront,theMalaysianeconomygrewat4.2%in2016whilemaintainingamodeststeelconsumptiongrowthof2.6%.Forthefirsthalfof2017,theMalaysianeconomygrewatafasterpaceof5.7%andinviewofthestrongerfirsthalf,theeconomyis set to expand atmore than 4.8% for the full year, supported by strong domesticdemand in theservices,manufacturingandconstructionsectors. This togetherwithexpectedconstructioninvestmentgrowthoutlinedinthe11thMasterPlan(2016-2020),whereRM260billionhasbeenallocatedfordevelopmentexpenditurethrough2020,willaugurwellforthesteelsectorinMalaysia.TheGovernmenthasalsobeensupportiveofthesectorandwherejustified,hasundertakentrademeasurestohelptheaffecteddomesticplayers.


CHAIRMAN’S STATEMENT (Cont’d)

FINANCIAL PERFORMANCE

ForFY2017,theGrouprecordedlowerrevenueofRM1.07billioncomparedtoRM1.14billionintheprecedingfinancialyear due to lower sales volume as a result of cautiousdemand brought about by increased price volatility andtheGroup’s pricing strategy to take advantage ofmarketconditions.

Despitethelowerrevenue,theGrouprecordedoneof itsbest performances in years with profit from operationsat RM170.76 million for FY 2017, a 61% increase overthe RM106.33 million recorded in the previous financialyear.ProfitbeforetaxandbeforeshareoflossofJVwasRM140.50 million (FY 2016: RM74.61 million). Theseremarkableresultswereattributedtohigheraveragesellingprices on top of timely procurement, effective pricingstrategiesanddisciplinedcostcontroltooptimisemargins.

However, during the year, as its operations remainssuspended, the Group’s 55%-owned JV took a non-cash impairment of RM266.15 million on its assets andas a result, theGroup’s share of loss of JV increased to(RM215.32) million in FY 2017 compared to (RM99.22)millioninthepreviousfinancialyear.Intotality,theGroupregisteredalossbeforetaxof(RM74.82)millionfortheFY2017. Excluding the impairment, the Group would haveregisteredaprofitbeforetaxofRM71.56million.

The Group’s total borrowing as at end of FY 2017were reduced by 26.5% to RM453.67 million fromRM616.90 million in the previous financial year. Thereduction was mainly due to the full redemption ofthe 7-year redeemable convertible secured bonds on4 April 2017. The redemption will result in an interestsavings of RM6.61 million per annum and the Group’scurrentborrowingscompriseprincipallyofshorttermtradefacilitiestosupportitsworkingcapitalrequirements.

Moving forward, the Group will focus on the plans toresumeproduction at JVwhilst continuing to improveonmanufacturingcosts,procurementandsalesstrategies,andworkingcapitalmanagementofthewholly-ownedoperatingsubsidiariestostaycompetitiveinthechallengingmarket.

DIVIDENDS

TheBoardofDirectorsdoesnotrecommendanydividendforthefinancialyearended31July2017.

ACKNOWLEDGEMENT

On behalf of the Board of the Directors, I would like towelcomeMr.LawWaiCheongwhojoinedusasExecutiveDirectorinJanuary2017.Iwouldalsoliketoexpressmyappreciation toallouremployees for theirdedicationandcontributiontotheGroupandtomyfellowBoardmembersfortheirguidance,perspectiveandcommitmentincarryingout their roles over the year. My sincere gratitude toour valued customers, suppliers, business associates,financiers and relevant regulatory authorities for theircontinuous support, invaluable guidance and cooperationovertheyears.

Finally,Iliketothankyou,ourshareholdersforyoursupportandconfidenceinusasweworktotaketheGroupforward.

TAN SRI ABD RAHMAN BIN MAMATChairman


MANAGEMENT DISCUSSION AND ANALYSIS

THE OUTLOOK OF THE MALAYSIAN ECONOMY IN 2017

TheMalaysianeconomygrewatafasterpaceof5.8%inthesecondquarterof2017underpinnedbytheservices,manufacturingandconstructionsectors.Giventhestrongfirsthalfgrowthof5.7%,theeconomyisexpectedtoexpandatmorethan4.8%forthefullyearof2017.

Theconstructionsectorrecordedmoderategrowthof7.4%in2016(2015:8.2%).Forthesecondquarterof2017,theconstructionsectorgrew8.3%.Growthwasmainlyledbycivilengineeringsub-sectordrivenbytheexistingmulti-yearprojectsparticularlyinoilandgas(O&G),transportationandutilitiessegments.Theresidentialsub-sectoralsoregisteredastrongmomentumduetoconstructionofserviceapartmentsandaffordablehousingprojects.

Movingforward,growthintheeconomywillcontinuetobesupportedbystrongdomesticdemandandstrongerthanexpectedglobalgrowth.

REVIEW OF BUSINESS OPERATION

TheHiapTeckGroupisprimarilyengagedinthemanufacturingandtradingofsteelandsteelrelatedproductswithatransportationarmthatsolelysupportsinternalrequirements.TheHoldingCompanyisprincipallyengagedininvestmentandpropertyholdings,andprovisionofmanagementservices.

TheGroup isadynamicand leadingsteelprovider inMalaysiawithover twentyyearsofextensivesteel industryexperienceofferingsteelproductsolutionforsteelapplicationstoadiversecustomerbaseinbothdomesticandinternationalmarketsandformultiplesectorsincludingbuilding&construction,manufacturing,engineeringandoil&gas.

Themanufacturingsegmentisengagedinthemanufacturinganddistributionofsteelpipes,hollowsections,scaffoldingequipmentand accessories, steel slabs andother steel products. Its pipemanufacturing entity,AlpinePipeManufacturingSdn.Bhd., isregardedasthelargeststructuralpipeandhollowsectionsmanufacturerinMalaysiaandSoutheastAsia,withanannualcapacityof550,000MT.Anewlyinstalledpipemillwillincreaseproductrangetoincludepipesofdiameterofupto1600mm.Itsscaffoldmanufacturingentity,HuatracoScaffoldSdn.Bhd.,hasbeenengaged inthescaffoldingbusinessformorethantwentyyears.Itswealthofexperienceandexpertisehas led to itsexistingpositionasoneof themost reliableandbestqualityscaffoldingequipmentprovider inboth thedomesticand regionalmarkets.Huatraco’sproductsare in full compliancewith theMS1462standards.TheGroup’sjointventure(“JV”),EasternSteelSdn.Bhd.,currentlywithoperationssuspended,hasa600m3blastfurnaceandaninitialslab-makingcapacityof700,000tonnesperannum.

ThetradingbusinessisoneofthelargestinMalaysiaandisinvolvedintheimportationandsalesofvarioustypesofsteelproductstobothhardwarecompaniesandprojectendusersinmultiplesectors.Ithasalsosynergisticallycombinedwiththemanufacturingsegmenttobecomeaone-stopsteelsolutionproviderformajorinfrastructureprojects.

TheinvestmentandpropertysegmentsolelysupportstheGroup’swhollyownedsubsidiaries,whilstthetransportationsegmentisengagedintheprovisionoftransportservicesbytrucksortrailersfortheGroup.

Theminingandexplorationsegmentisengagedinexploring,contractingandactivitiesrelatedtomining,processingandsaleofironore.Thissegmentisinthemidstofpreparingforcommencementofactivities.

TheGroupsegments’contributionaresummarisedbelow.ThedetailedsegmentalperformanceisdisclosedinNote25ofthefinancialstatements.


MANAGEMENT DISCUSSION AND ANALYSIS (Cont’d)

SEGMENTS’ PERFORMANCE

FY 2017 Property & MiningSegmental Analysis Trading Manufacturing Investment Transportation exploration Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 SALES Externalsales 500,011 573,472 172 2 - 1,073,657Intersegmentsales - 19,822 17,362 3,161 - -

Totalsales 500,011 593,294 17,534 3,163 - 1,073,657

RESULTS

Segmentprofit/(loss)beforetax&shareoflossofJV 29,201 102,992 8,678 38 (408) 140,502

PERFORMANCE REVIEW

FY 2017was an eventful year for the Group. Thewholly-owned operating subsidiaries of the Group under its Trading andManufacturing segments recorded one of its best performances. Thismarked improvement can be attributable to improvingmarketconditionsandtheGroup’sswiftandproactiveresponsetotakeadvantageoftheopportunitiespresentedinthemarketthroughdecisiveprocurementandsellingstrategiestooptimisemargins.

Fortheyearunderreview,theGroupregisteredlowerrevenueofRM1.074billion,a5.6%decreasecomparedtoRM1.138billionreportedintheprecedingyearduetolowersalesvolumeattributedtocautiousdemandbroughtaboutbyincreasedpricevolatility.Despitelowerrevenue,theGroupachievedprofitfromoperationsofRM170.76millioninFY2017,a60.6%increaseovertheRM106.33millionrecordedinthepreviousyear.ProfitbeforetaxandbeforeshareoflossofJVwasRM140.50million(FY2016:RM74.61million).TheManufacturingsegmentwithrevenueofRM593.29millioncontributed55.3%oftheGroup’srevenueandcontinuedtobetheGroup’smaindriverwithan82.2%increaseinprofitbeforetaxtoRM102.99millionfortheyear.Thisremarkableachievementwasattributabletoacombinationofdisciplinedcostcontrol,continuousqualityimprovements,strategicprocurementandsalesdecisions.

TheTradingsegmentregisteredrevenueofRM500.01millioninFY2017,representingadecreaseof15.1%fromthepreviousyear.Profitbeforetax,however,increasedby218.4%toRM29.20millioncomparedtoRM9.17millionpreviously.Thesubstantialimprovement inprofitwasprincipallyduetoManagement’sswiftandproactiveresponsetotakeadvantageofthechangesinmarketconditions.

Despite the remarkableachievementof thekeywholly-ownedoperatingsubsidiaries, theGroup registereda lossafter taxofRM103.16millioninFY2017.ThiswasduetotheshareoflossofJVofRM215.32millionfortheyear,anincreaseof117.0%overtheshareoflossinJVofRM99.22millioninFY2016.ThissubstantialincreaseinlosseswasbecausetheJVtookanon-cashimpairmentlossofRM266.15milliononitsassetsinthecurrentyear.

AsattheendofFY2017,inventorieswereatRM323.85million,a27.0%increaseoverthepreviousyearduetolumpypurchasesfrom importsandtimingofshipmentarrivals. Tradereceivablesarestrictlymonitoredanddecreasedby10.5%toRM212.17millionasatthefinancialyearend.

TheGroup’stotalborrowingsasatendofFY2017reducedby26.5%toRM453.67millionfromRM616.90millioninthepreviousfinancialyear.Thereductionwasmainlyduetothefullredemptionofthe7-yearredeemableconvertiblebondson4April2017.TheredemptionwillresultinaninterestsavingofRM6.61millionperannum.TheGroup’scurrentborrowingscompriseprincipallyshorttermtradefacilitiestosupportitsworkingcapitalrequirements.Movingforward,theGroupwillremainfocusinitseffortstoincreaseefficiencybycontinuouslyimprovingonmanufacturingcosts,procurementstrategies,salesandworkingcapitalmanagementtostaycompetitiveinthechallengingmarket.Additionally,theJVhasalsocommencedplanningtoresumeproductioninviewofimprovedmarketconditions.

2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

1,000,000

950,000

100,000

50,000

1,050,000

150,000

1,100,000

200,000

1,150,000

1,200,000

1,250,000

1,300,000

REVENUE (RM’000)

PROFIT/(LOSS) FROM OPERATION(RM’000)

2013 2014 2015 2016 2017700,000

750,000

800,000

850,000

900,000

950,000

1,000,000

SHAREHOLDERS’ FUNDS (RM’000)

2013 2014 2015 2016 2017

(60,000)

(80,000)

(40,000)

(20,000)

-

20,000

40,000

60,000

PROFIT/(LOSS) BEFORE TAXATION (RM’000)

2013 2014 2015 2016 2017

(20,000)

(40,000)

-

20,000

40,000

60,000

80,000

100,000

EBITDA(RM’000)

2013 2014 2015 2016 2017

(60,000)

(80,000)

(100,000)(120,000)

(40,000)

(20,000)

-

20,000

40,000

60,000

PROFIT/(LOSS) AFTER TAXATION (RM’000)


MANAGEMENT DISCUSSION AND ANALYSIS(Cont’d)

FIVE YEAR GROUP FINANCIAL HIGHLIGHTS

2013 2014 2015 2016 2017

2013 2014 2015 2016 2017

NTA PER SHARE * (RM)

DIVIDEND(SEN)

EARNINGS PER SHARE * (SEN)

2013 2014 2015 2016 2017100,000

200,000

300,000

400,000

500,000

600,000

700,000

BORROWING (RM’000)

2013 2014 2015 2016 2017

(4.00)

(6.00)

(8.00)

(2.00)

-

2.00

4.00

0.20

0.10

-

0.30

0.40

0.50

0.60

0.70

0.10

-

0.20

0.30

0.40

0.50

0.60

0.80


MANAGEMENT DISCUSSION AND ANALYSIS (Cont’d)


*Notes:

ThecomparativefiguresforNetTangibleAssetspershare(NTA)andEarningspershare(EPS)havebeenrestatedtoreflecttheadjustmentsarisingfromthebonusissuecompletedduringthefinancialyear2016.

2013 2014 2015 2016 2017

Revenue(RM’000) 1,107,318 1,110,490 1,257,619 1,138,061 1,073,657

ProfitFromOperation(RM’000) 62,792 75,755 25,315 106,328 170,756

Profit/(Loss)BeforeTaxation(RM’000) 34,228 49,851 (66,460) (24,617) (74,821)

EBITDA(RM’000) 80,924 99,234 (10,358) 28,970 (29,817)

Profit/(Loss)AfterTaxation(RM’000) 24,292 45,565 (76,806) (42,173) (103,161)

Shareholders’Funds(RM’000) 909,013 952,633 872,941 913,044 807,371

NTAPerShare(sen)* 0.71 0.74 0.67 0.70 0.60

EarningsPerShare(sen)* 1.90 3.56 (6.03) (3.24) (8.00)

Dividend(sen) 0.60 0.60 0.30 0.30 -

Borrowing 633,891 577,732 526,726 616,897 453,672

453,672


MANAGEMENT DISCUSSION AND ANALYSIS(Cont’d)



MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)

MARKET REVIEW

GlobalSteelOutlook

Worldcrudesteelproductionreached1,630milliontonnesfortheyear2016,upby1.0%comparedto2015.Chinaistheworld’slargeststeelproducingcountryandaccountedfornearlyhalfofglobalproductionin2016at49.6%-atotalof808.4milliontonnes.Japanrankedsecondat6.4%ofglobalproductionor104.8milliontonnesfollowedbyIndia(5.9%or95.6milliontonnes)andUnitedStates(4.8%or78.5milliontonnes).

In2016,steeldemandrecoverywasstrongerthanexpectedwiththeupsidemostlycomingfromChina.In2017,acyclicalupturninsteeldemandisforecastedwithcontinuingrecoveryinthedevelopedeconomiesandanacceleratinggrowthmomentumintheemerginganddevelopingeconomiessuchasBrazil,IranandMexico.However,China,whichaccountsforabouthalfofglobalsteeldemand,isexpectedtoreturntoamoresubduedgrowthrateafteritsrecentshortuplift.Forthisreason,overallgrowthmomentumwillremainmodest.

ASEAN-6SteelOutlook

SteelconsumptioninASEAN-6expandedstronglyin2016,comparedwithmuchoftherestoftheworld.AccordingtothedatafromSEAISI,totalapparentsteelconsumptioninthesixASEANmembercountriesofSEAISIi.e.Indonesia,Malaysia,Vietnam,Philippines,ThailandandSingaporesurgedbyabout12%year-on-yeartoreach77milliontonnes.Inthesameyear,globalsteelconsumptiongrowthwasalow1.0%.InAsia,China’ssteelconsumptiongrowthratewasonly1.3%,India4.1%,SouthKorea2.3%whileJapanregisteredanegativegrowthrateof1.3%.

Vietnam, thebiggest steel consumingcountry inASEAN, continued to lead the region in steel consumptiongrowth in2016,registeringathirdconsecutiveannualgrowthrateofmorethan20%.Vietnam’stotalsteeldemandintheyearwas22.3milliontonnes,up22.4%year-on-year.In2014and2015,Vietnam’ssteelconsumptiongrowthrateswere22.7%and26.4%,respectively.Malaysiamaintaineditsmoderatesingledigitsteelconsumptiongrowthrateof2.6%year-on-yearto10.30milliontonnesin2016.

BUSINESS OUTLOOK

TheoutlookforsteelindustryinMalaysiaremainspositiveasconstructioninvestmentisexpectedtogrowsupportedbythe11thMasterPlan(2016-2020)whereRM260billionhasbeenallocatedfordevelopmentexpenditurethrough2020.ChallengesAhead

Therewasa15.5%surgeinimportsofironandsteelproductsintoMalaysiaof9.13milliontonnesin2016comparedtopreviousyear.TheweakeningoftheRinggit,shrinkingmarketshareandgrowingcapacitiesinASEANcountriesmainlyVietnamwillfurtheraggravatetheconcerntothelocalsteelproducers.TheconcernoverexcesscapacityandtheinfluxofcheapimportsfromChinaalthoughstillaconcernhassomewhatalleviatedwithChina’splannedreductioninexcesssteelcapacity.

Onthedomesticfront,steeldemandwillcontinuetobesupportedbytheMalaysianGovernmentplanstoincreaseinvestmentininfrastructurethroughmegaprojectssuchasGreaterKL,HighSpeedRailTransit,MassRapidTransit,EastCoastRailwayLineaswellasnewhighways,includingPanBorneoHighway.AlltheseprojectswouldboostdemandforsteelproductsandsustainapositiveoutlookfortheMalaysiansteelindustry.

Movingforward,theGroupwillremainfocusandcontinuetoundertakeprudentmeasurestoimproveefficienciesonmanufacturingcosts,procurementstrategies,salesandworkingcapitalmanagement.TheGroupwillfurtherenhanceitstechnicalcapabilitiesforhighervalueaddedproductsandcontinuouslyexpandproductsrangetoremainintheforefrontofthesteelindustryinMalaysiaaswellasSoutheastAsia.


TheBoard of Hiap Teck Venture Berhad (“HTVB”) fully supports the recommendations of theMalaysian Code on CorporateGovernance2012(“Code”)issuedbytheSecuritiesCommissionandBursaMalaysiaSecuritiesBerhad(“BMSB”)whichsetsoutthebroadprinciplesandrecommendationsforgoodcorporategovernanceandbestpracticesforlistedcompanies.

TheBoardiscommittedtoapplytherecommendationsoftheCodeinensuringandmaintainingthatgoodcorporategovernanceispractisedthroughouttheGrouptoeffectivelydischargeitsresponsibilitiestoprotectandenhanceshareholders’valueandthoseoftheotherstakeholders.

TheBoardofDirectorsis,therefore,pleasedtoreportthatthisstatementsetsouttheextentoftheGroup’scompliancewiththerecommendationsoftheCodeforthefinancialyearended31July2017.

A. BOARD OF DIRECTORS

Board Charter and Board Responsibilities

EmphasisingitscommitmenttogoodcorporategovernancepracticesoftheCode,theBoardhadinthefinancialyear2014formalisedandadopted:-

(a) aBoardCharterthatsetsout,amongstothers,theresponsibilities,authorities,procedures,evaluationsandstructuresoftheBoardandBoardCommittees,therelationshipbetweentheBoardwithmanagementandtheshareholdersoftheCompanyaswellasissuesanddecisionsreservedfortheBoard;and

(b) aCodeofEthicsandConductforDirectorsinlinewiththerecommendationoftheCode.

TheBoardCharterandtheCodeofEthicsandConductforDirectorswhicharereviewedannuallymaybeviewedattheCompany’swebsiteatwww.htgrp.com.my.

TheBoard is primarily responsible for determining the strategic direction of theGroup,monitoring and overseeing theperformance of the Group’s business. The Boardmembersmeet regularly to review corporate strategies budget, riskmanagement,operationsandtheperformanceofbusinesssegmentsandbringtobearindependentjudgmentonissuesofstrategy,riskmanagement,performance,resources,governanceandcodeofconductandethicstoensurethatdecisionsmade and actions takenwill promote sustainability of theGroup. The Board as awhole is dedicated to practise cleardemarcationofduties,responsibilitiesandauthoritywithintheCompany.

Sustainability

TheBoardrecognisestheimportanceofsustainabilityanditsincreasingsignificanceinthebusiness.TheBoardiscommittedtounderstandingandimplementingsustainablepracticesandtoexploringthebenefitstothebusinesswhilstattemptingtoachievetherightbalancebetweentheneedsofthewidercommunity,therequirementsofshareholdersandstakeholdersandeconomicsuccess.

TheCompanywillformalizeaSustainabilityPolicywhichaimstointegratetheprinciplesofsustainabilityintotheCompany’sstrategies,policiesandproceduresandensurethattheBoardandseniormanagementareinvolvedintheimplementationof this policy, review the sustainability performance and create a culture of sustainabilitywithin theCompany, and thecommunity,withanemphasisonintegratingenvironmental,socialandgovernanceconsiderationsintodecisionmakingandthedeliveryofoutcomes.

STATEMENT ON CORPORATE GOVERNANCE


Board Balance

Thereareeight (8)Directorson theBoard;comprisingone (1) IndependentNon-ExecutiveChairman,one (1)ExecutiveDeputyChairman,three(3)ExecutiveDirectors,andthree(3)IndependentNon-ExecutiveDirectors.Therefore,theBoardis incompliancewithParagraph15.02of theMMLRofBMSB,which requires thatat leastone-third (1/3)of theBoardcomprisesIndependentDirectors.AbriefprofileoftheBoardmembersaresetoutinpages4to8ofthisAnnualReport.

TheCompanyisledandmanagedbyanexperiencedBoardcomprisingmemberswithadiversityinqualification,knowledgeand experience in the relevant fields such as finance, banking, accounting,metallurgy,material science,management,economics,corporateaffairs,entrepreneurshipandmanagement.Collectively,theDirectorsbringabroadrangeofskills,expertise,knowledgeandindependentjudgmenttosuccessfullydirectandsupervisetheattainmentoftheGroup’scorporatestrategy,businessandfinancialoversight.

Separation of positions of Independent Non-Executive Chairman and Executive Deputy Chairman

ThereisacleardemarcationofresponsibilityandrolesbetweentheIndependentNon-ExecutiveChairmanandtheExecutiveDeputyChairmantoensurethebalanceofpowerandauthority.ThepositionsofIndependentNon-ExecutiveChairmanandExecutiveDeputyChairmanareheldbydifferentindividuals.TheChairman’smainresponsibilityistoensureeffectiveconductoftheBoardandBoardmeetingsandunrestrictedandtimelyaccessbyallDirectorstoallrelevantinformationnecessaryfordecisionmaking.TheChairmanleadsthediscussiononstrategiesandpoliciesrecommendedbytheManagement.TheExecutiveDeputyChairmanassistedbythethree(3)ExecutiveDirectorswhoareresponsiblefortheimplementationoftheBoard’spoliciesanddecisionsaswellassupervisingtheoperationoftheGroupandthedevelopmentandimplementationofbusinessstrategies.

Annual Assessment of Independent Directors

TheIndependentDirectorsasdefinedunderParagraph1.01ofBMSB’sMMLRareindependentofmanagementandarefreefromanybusinessorotherrelationshipsthatcouldinterferewiththeexerciseoftheirindependentjudgmentortheabilitytoactinthebestinterestsoftheCompany.TherolesofIndependentDirectorsareparticularlyimportantinbringingindependentjudgmenttobearonissuesofstrategy,performance,resourcesandstandardsofconduct.

TheIndependentDirectorsplayakeyrole incorporateaccountabilityandprovideunbiasedviewsand impartialitytotheBoard’sdeliberationanddecisionmakingprocess.Inaddition,theIndependentDirectorsensurethatmattersandissuesbrought to theBoard aregivendue consideration, fully discussed andexamined, taking into account the interest of allstakeholdersintheGroup.

The assessment of independence of theDirectors based on the provisions of theMMLR covers a series of objectivetestsandiscarriedoutbeforetheappointmentoftheIndependentDirectors.Further,theBoardwithassistancefromtheNominatingCommitteewillcarryoutannualassessmentoftheeffectivenessoftheBoardasawhole,includingIndependentNon-ExecutiveDirectorsandconsiderwhethertheIndependentDirectorcancontinuetobringindependentandobjectivejudgmenttotheBoarddeliberations.

AnyDirectorwhoconsidersthathehasormayhaveaconflictofinterestoramaterialpersonalinterestoradirectorindirectinterestor relationship thatcould reasonablybeconsideredto influence inamaterialwaytheDirector’sdecision inanymatterconcerningtheCompanyisrequiredtoimmediatelydisclosetotheBoardofsuchaninterestandtoabstainfromparticipatinginanydiscussionorvotingonthematterconcerned.

Forthefinancialyearended31July2017,theBoardassessedtheindependenceofitsIndependentNonExecutiveDirectorsbased on the criteria set out in theMMLR of Bursa Securities. TheBoard is satisfiedwith the level of independencedemonstratedbyalltheIndependentDirectorsandtheirabilitytoactinthebestinterestoftheCompany.AlltheIndependentDirectorshavegivenwrittenconfirmationdeclaringtheirindependencetotheBoard.

STATEMENT ON CORPORATE GOVERNANCE(Cont’d)



Tenure of Independent Directors

TheBoardinitsBoardCharterprovidedthatthetenureofanIndependentDirectorshouldnotexceedacumulativetermofnine(9)years.Uponcompletionofthenine(9)years,anIndependentDirectormaycontinuetoserveontheBoardsubjecttothedirector’sre-designationasanon-independentdirector.However,theBoardmay,inexceptionalcasesandsubjecttotheassessmentoftheNominatingCommitteeonanannualbasis,recommendforanIndependentDirectorwhohasservedforaconsecutiveorcumulativetermofnine(9)yearstoremainasanIndependentDirectorsubjecttoShareholders’approvalwithjustificationgiven.

NoneoftheIndependentDirectorshaveservedforacumulativetermofmorethannine(9)yearsduringthefinancialyearended31July2017.

Board Meetings

TheBoardofDirectorsmeetsonaquarterlybasiswithadditionalmeetingsconvenedasandwhennecessary,tointer-aliaapprovequarterlyfinancialresults,businessplans,budgets,governancemattersandotherbusinessdevelopmentactivities.SpecialBoardmeetingsmaybeconvened toconsiderurgentproposalormatterswhich require theexpeditious revieworconsiderationbytheBoard.SeniorManagementisinvitedtoattendtheBoardmeetingstoadviseonrelevantagendaitemstoenabletheBoardtoarriveataconsidereddecision.StrategicissuessuchasacquisitionanddisposaloftheGroup’sinvestmentsorassets;announcementstoregulators;corporateandrestructuringexercisesarepresentedtotheBoardforitsdecisiontoensurethatthedirectionandcontroloftheGroupisfirmlyintheBoard’scontrol.BesidesBoardMeetings,theBoardalsoexercisescontrolonmattersthatrequireBoard’sapprovalthroughcirculationofDirectors’resolutions.

BoardmeetingsfortheensuingfinancialyeararescheduledinadvancetofacilitatetheDirectorstoplanahead.AllmeetingsarefurnishedwithproperagendawithduenoticeissuedandboardpapersandreportspreparedbytheManagementwhichprovideupdatesonfinancial,operational,legalmattersandcirculatedpriortothemeetingstoallDirectorswithsufficienttimetoreviewthemtoensureforeffectivediscussionsanddecisionmakingduringthemeetings.

Duringthefinancialyearended31July2017,four(4)Boardmeetingswereheld.DetailsoftheBoardofDirectors’Meetingsandtheirattendancesatthesemeetingsaresetoutbelow.AllDirectorsinofficeduringthesaidperiodhaveattendedalltheBoardMeetingsheldandtherefore,havecompliedwiththeminimum50%meetingattendance’srequirementundertheMMLRofBMSB.



Name of Directors

TanSriAbdRahmanBinMamat(IndependentNon-ExecutiveDirector)

TanSriDato’LawTienSeng(ExecutiveDeputyChairman)

Mr.FooKokSiew(ExecutiveDirector)

Mr.TanShauMing(ExecutiveDirector)

Mr.LawWaiCheong(ExecutiveDirector)(Appointedon3January2017)

Mr.NgSoonLai@NgSiekChuan(IndependentNon-ExecutiveDirector)

Mr.LeowHoiLoong@LiowHoiLoong(IndependentNon-ExecutiveDirector)

Mr.LeeChingKion(IndependentNon-ExecutiveDirector)

Mr.WangShenghua(Non-IndependentNon-ExecutiveDirector)(Resignedon15December2016)

Date of Board Meeting Total Meetings Attended by

Directors

4/4

4/4

4/4

4/4

2/2

4/4

4/4

4/4

0/1

Percentage of Attendance

100%

100%

100%

100%

100%

100%

100%

100%

0

Note:N/AmeansNotApplicable

15.12.2016

N/A

N/A

29.09.2016

X

N/A

23.03.2017

N/A

29.06.2017

N/A


Level of Time Commitment

TheBoardissatisfiedwiththeleveloftimecommitmentgivenbytheDirectorstowardsfulfillingtheirrolesandresponsibilitiesasDirectorsoftheCompany.ThisisevidencedbytheattendancerecordoftheDirectorsatBoardMeetingsassetoutinthetableabove.

Appointment to the Board

ThereisaformalandtransparentprocedurewhichhasbeenendorsedbytheBoardfortheappointmentofnewDirectors.TofacilitateappointmentstotheBoard,theCompanyhadsetuptheNominatingCommitteetoprovideaformalandtransparentprocedureforappointmentofnewDirectorstotheBoard.

TheNominatingCommitteeshallbeprimarilyresponsibleforidentifyingandrecommendingtotheBoardnewcandidatestobeappointedasDirectorstotheBoardandalsorecommendingDirectorstofilltheseatsonBoardCommittees.

Forthefinancialyearended31July2017,theBoardthroughtheNominatingCommittee,hadassessedtheeffectivenessoftheBoardasawholeandtheBoardCommittees;contributionandperformanceofeachindividualDirector;independenceofIndependentDirectorsandtrainingcoursesrequiredbytheDirectorsonanongoingbasis.TheBoardalsoreviewedtherequiredmixofskills,experiencesandotherqualitiesincludingcorecompetencies,whichNon-ExecutiveDirectorsshouldbringtotheBoard.

TheBoardagreeswiththeimportanceofagenderdiversityintheGroup’sworkforceandontheBoard.However,itisoftheviewthattheBoardmembershipisdependentoneachcandidate’sskills,experience,corecompetenciesandotherqualitiesregardlessofgender,ageandethnicity.

Retirement and Re-election

InaccordancewiththeCompany’sArticlesofAssociation,one-third(1/3)oftheDirectorsoriftheirnumberisnotthree(3)oramultipleofthree(3),thenthenumbernearestone-third(1/3)shallretirefromofficeandbeeligibleforre-electionprovidedalwaysthatallDirectorsshallretirefromofficeonceatleastineverythree(3)years,butshallbeeligibleforre-election.AnypersonappointedbytheBoardeithertofillacasualvacancyorasanadditiontotheexistingDirectors,shallholdofficeuntilthenextAnnualGeneralMeetingandshallthenbeeligibleforre-election.

AnyDirectorwhoisretiring,andiseligibleforre-election, isrequiredtoconfirminwritingtotheBoardifheisor isnotoffering himself for re-election at theAnnualGeneralMeetingwherehe is due for retirement. The followingDirectorswhoareretiringatthisAnnualGeneralMeetinghaveindividuallyconfirminwritingtotheBoardofferingthemselvesforre-election:- ArticleNo. • TanSriAbdRahmanBinMamat 79 • Mr.NgSoonLai@NgSiekChuan 79 • Mr.LeeChingKion 79

Detailsof theDirectorswhosubmittedthemselvesfor re-electionthisyearareavailableonpages4to8of thisAnnualReport.

Ontheotherhand,Mr.LawWaiCheongwhowasappointedExecutiveDirectoron3January2017retiresinaccordancewithArticle84oftheCompany’sArticlesofAssociationattheforthcomingAnnualGeneralMeeting.

Company Secretary

TheCompanySecretaryprovidessupporttotheChairmanoftheCompanytoensuretheeffectivefunctioningoftheBoard.TheCompanySecretaryand/orhisrepresentativesalsoorganisesandattendsallBoardMeetingsandBoardCommittees’Meetingsensuringthataccurateandproperrecordofissuesdiscussed,decisionsmadeandconclusionstaken.

TheCompanySecretarymaintainsallsecretarialandstatutoryrecordsoftheCompany.

TheBoardhasunrestrictedaccesstotheadviceandserviceoftheCompanySecretarywhoisresponsibleforprovidingDirectorswiththeBoardpapersandrelatedmatters.



TheCompanySecretaryalsoupdatestheBoardofDirectorsregularlyonamendmentstotheMMLR,practiceandguidancenotesorcircularsissuedbyBMSBfromtimetotimeandonthedevelopmentoforamendmentstotheCompaniesAct2016.Inaddition,theCompanySecretaryservesnoticestotheDirectorsandPrincipalOfficerstonotifythemofclosedperiodsfortradingintheCompany’sshares,inaccordancewithChapter14oftheMMLR.HealsoensuresthatallappointmentsandresignationofdirectorsareinaccordancewiththerelevantlegislationandtheBoardPerformanceAssessmentareproperlyexecuted.

TheCompanySecretaryisappointedandcanberemovedbytheBoardofDirectors.

Supply and Access to Information

TheDirectorsaresuppliedwithandhaveunrestrictedaccesstoinformationpertainingtotheGroup’sbusinessandaffairstoenablethemtodischargetheirdutieseffectively.Thisinformationincludesbothverbalandwrittendetails.

All scheduledmeetings held during the yearwere preceded by a formal agenda issued by the Company Secretary inconsultationwiththeChairman.Priortothemeetings,appropriatedocumentswhichincludetheagendaandreportsrelevanttotheissuesofthemeetingsarecirculatedtoallmembers.AllDirectorshavefullandtimelyaccesstoinformationwithBoardpapers distributed in advanceofmeetings. This ensures thatDirectors have sufficient time to appreciate issuesdeliberatedatmeetingswhichinturnenhancesthedecision-makingprocess.

All Directors have access to further information which they may require in discharging their duties including seekingindependentprofessionaladvice,ifnecessary,attheCompany’sexpense.TheyalsohaveaccesstotheadviceandservicesoftheCompanySecretary,whoseappointmentandremovalmayonlybemadewiththeapprovaloftheBoard.

Directors’ Training

Directorsareencouraged toattendseminarsand/orconferences tokeepabreastwithdevelopment in the industryandmarketplace.AllmembersoftheBoardhaveattendedtheMandatoryAccreditationProgrammeasrequiredbyBMSB.

TheDirectorshadduringthefinancialyearended31July2017,evaluatedtheirowntrainingneedsandattendedseminars,conferencesandforumswhichtheyconsideredasrelevantandusefulandwouldstrengthentheircontributiontotheGroup.Appendbelowaresomeofthetraining/seminarsattendedbytheDirectors:-

1. TheVelocityofGlobalChange&Sustainability–TheNewBusinessModel2. DirectorsTraining–FinanceforNonFinance–LanguageintheBoardRoom3. B20TaskforceforG20MeetingChina–MemberTrade&InvestmentTaskforceandSMEDevelopmentTaskforce4. B20ChinaFirstJoint–MemberTrade&InvestmentTaskforceandSMEDevelopmentTaskforce,WashingtonDC5. B20OECDPARIS–BIAC–B20RoundtableonFinancingSMEsinGlobalValueChains6. 12thINSMEAnnualMeetingatDoha/QatarincollaborationwithQatarDevelopmentBank“EnablingSmartSMEsas KeytoSuccess”7. CorporateGovernance–HowtoLeverageonAGMsforBetterEngagementwithShareholders8. WhyDirectors&Managementneedtoaskhardquestions9. FinancialInstitutionsDirector’sEducationCoreProgramme10. ShareBuyback–impactofnewCompaniesAct201611. GovernanceCulture–What’sPossible?12. Directors’LiabilityandEffectiveness13. AseanStockMarketsandTrends14. NominationCommitteeGuidelines15. BriefingonRiskManagement16. BriefingonTransferPricing17. BriefingonCorporateSustainabilityReporting18. DisclosureandCorporateGovernanceRequirements19. FutureFinancialInformationConsequentialtotheRevisedProspectusGuidelines20. BriefingonAmendmentstoBursaMalaysiaSecuritiesBerhadMainMarketListingRequirements21. TheSecuritiesCommission(Amendment)Act2015andCapitalMarketsandServices(Amendment)Act201522. Cryptocurrency,Bitcoinandblockchaintechnology



Inadditiontotheabove,theCompanySecretarycirculatestherelevantguidelinesonstatutoryandregulatoryrequirementsfromtimetotimefor theBoard’s referenceandbrief theBoardquarterlyontheseupdates,whereapplicable,atBoardMeetings.TheExternalAuditorsalsobriefed theBoardmembersonanychanges to theMalaysianFinancialReportingStandards that affect the Group’s financial statements during the financial year and the new Audit Report particularlyregardingthedisclosureofKeyAuditMattersor“KAMs”.Throughouttheirperiodinoffice,theDirectorsarecontinuallyupdatedontheGroup’sbusinessandtheregulatoryrequirements.TalkswerealsogivenbytheCompanySecretaryonthefollowingtopics:-

• SalientchangesoftheCompaniesAct2016. Board Committees

TheBoarddelegatescertainresponsibilitiestotherespectivecommitteesoftheBoardwhichoperatewithclearlydefinedtermsofreference.ThesecommitteeshavetheauthoritytoexamineparticularissuesandreporttotheBoardwiththeirproceedingsanddeliberations.

ThefollowingBoardCommitteeshaveactedwithintheframeworkoftheremitspecifiedbytheBoard.ThesecommitteeshavesporadicallymadeproposalstoimproveandenhancetheroleoftheBoardingovernanceprocesses.

The Company has five (5) principal Board committees; namely the Audit Committee, Nominating Committee, RiskManagementCommittee,RemunerationCommitteeandtheEmployees’ShareOptionScheme(“ESOS”)Committee.

a. Audit Committee

The Audit Committee which comprises exclusively of Independent Non-Executive Directors, is responsible forreviewingandmonitoringtheGroup’sinternalauditprocesses,itsexternalauditorsandoftheintegrityoftheGroup’sfinancialstatements.Itisalsoresponsibleforreviewingtheeffectivenessofinternalcontrolssystem.FurtherdetailsoftheAuditCommitteearecontainedintheAuditCommittee’sReportonpages36to38ofthisAnnualReport.

b. Nominating Committee

TheNominatingCommittee comprisesexclusively of IndependentNon-ExecutiveDirectors and is responsible tooverseetheselectionandassessmentofDirectorsforappointment,re-electionandre-appointmenttotheBoardandBoardCommittees.TheMembersoftheNominatingCommitteeare:

The Terms of Reference of the Nominating Committee may be viewed at the Company’s website atwww.htgrp.com.my

Name Designation Directorship

TanSriAbdRahmanBinMamat Chairman IndependentNon-ExecutiveDirector

Mr.LeowHoiLoong@LiowHoiLoong Member IndependentNon-ExecutiveDirector

Mr.LeeChingKion Member IndependentNon-ExecutiveDirector



During the financial year, there were three (3) Nominating Committee meeting held on 29 September 2016,15December2016and29June2017andwereattendedbyallmembersofNominatingCommittee.Indischargingtheirduties, theNominatingCommitteehadcarriedout the followingfunctionsandreportedthe followingto theBoard:

(i) TheeffectivenessofthepresentsizeoftheBoardandBoardCommittees.(ii) Theeffectivenessof thecompositionof theBoard in relation to themixofskills,experience,age,gender, ethnicityandotherqualities.(iii) ThecontributionofindividualDirectorsinrelationtotheirtimecommitment,participationintheBoarddecision- makingprocessandinBoardCommittees.(iv) TheindependenceoftheIndependentDirectorswhohavedeclaredthattheyareindependentinaccordance withtheRecommendations3.3setoutintheMalaysianCodeonCorporateGovernance2012.(v) The continuing education of Directors and the need for each Director to evaluate his own training and/or professionaldevelopmentrequirementthatwillenhancehiscontributiontotheGroup.(vi) ThesuccessionplanningoftheExecutiveDirectorsandSeniorManagementinorderfortheBoardandCompany tomaintainappropriateexperience,expertiseanddiversity.(vii) The consideration and recommendation to the Board to accept the resignation and appointment of Non- IndependentNon-ExecutiveDirector.(viii) TheeffectivenessoftheChiefFinancialOfficeroftheCompany.

c. Remuneration Committee

ThemembersoftheRemunerationCommitteeare:

Forthefinancialyearended31July2017,theRemunerationCommitteerecommendedtotheBoardtheremunerationpackagesoftheExecutiveDirectorsandSeniorManagement,whilsttheBoardasawholedeterminestheremunerationoftheNon-ExecutiveDirectors.TheindividualDirectorsconcernedabstainfromdecisioninrespectoftheirindividualremuneration.

TheremunerationofDirectorsisdeterminedbasedontheresponsibility,contributionandperformanceofeachDirector.ItistheCompany’spolicytolinktheExecutiveDirectors’rewardstoindividualandcorporateperformancewhilsttheremunerationoftheNon-ExecutiveDirectorsincludingtheNon-ExecutiveChairmanisdeterminedinaccordancewiththeirexperienceandthelevelofresponsibilitiesassumed.FeespayabletoallNon-ExecutiveDirectorsareproposedattheAnnualGeneralMeetingfortheshareholders’approval.

Thereweretwo(2)RemunerationCommitteeMeetingsheldduringthefinancialyeari.e.on15December2016and29June2017andwereattendedbyalltheRemunerationCommitteemembers.

The Terms of Reference of the Remuneration Committee may be viewed at the Company’s website atwww.htgrp.com.my




Mr.FooKokSiew Member ExecutiveDirector



d. Risk Management Committee

TheRiskManagementCommittee(“RMC”)wasformedon30March2010andhasbeendelegatedbytheBoardtoassumeresponsibilityfor theGroup’sriskoversight.TheRMCprovidesoversight,directionandcounsel totheGroupriskmanagementprocessandconsidersanymatterrelatingtotheidentification,assessment,monitoringandmanagementofanyriskassociatedwiththeGroupthatitdeemsappropriate.

TheRMCmeetsquarterlywithadditionalmeetingsconvenedtoattendtourgentmattersthatrequireitsdeliberation.Therewerefour(4)RMCMeetingsheldduringthefinancialyearended31July2017,i.e.on29September2016,15December2016,23March2017and29June2017andwereattendedbyallthemembersofRMC.

ThemembersoftheRMCareasfollows:

e. Employees’ Share Option Scheme (“ESOS”) Committee

On10 January 2017, theCompany has extended its existing ESOSwhich expired on 11April 2017 for another(5)yearsfrom12April2017to11April2022pursuanttothetermsoftheESOSBy-Laws.

AnESOSCommitteewassetuptoadministertheESOSSchemewhich isgovernedbytheESOSBy-Laws.ThemembersoftheESOSCommitteeare:-

TheESOSCommitteemetonce(1)duringthefinancialyearended31July2017i.e.on15December2016forthefollowingpurposesandattendedbyallthemembers:-

• todiscussandifappropriate,torecommendtheextensionoftheESOSforanotherfive(5)yearstotheBoard ofDirectorsforapproval.

B. DIRECTORS’ REMUNERATION

TheremunerationpolicyoftheCompanyfortheExecutiveDirectorsarestructuredtolinkrewardstocorporateandindividualperformanceinordertoretainDirectorswiththerelevantskillsandexperiencetomeetthechallengesoftheGroup.

TheNon-ExecutiveDirectors’remunerationcomprisesonlyannualfeesandmeetingallowancesthatreflecttheirexpectedrolesandlevelofresponsibilities,includinganyadditionalworkandcontributionsrequired.



Mr.LeowHoiLoong@LiowHoiLoong Chairman IndependentNon-ExecutiveDirector

Mr.LeeChingKion Member IndependentNon-ExecutiveDirector







B. DIRECTORS’ REMUNERATION

ThefollowingaretheremunerationbandsoftheDirectors:

Remarks:-*Remuneration was paid by the joint venture, Eastern Steel Sdn. Bhd (“ESSB”).

The aggregate remuneration paid/payable to all Directors of the Company are further categorized into the followingcomponents:

C. SHAREHOLDERS COMMUNICATION AND INVESTORS RELATIONS

TheBoardrecognisestheimportanceofeffectivecommunicationwithshareholdersandinvestors.

InformationisdisseminatedthroughvariousdisclosuresandannouncementsmadetoBMSBwhichincludesfinancialresultsand corporate developments. The Company’s website at www.htgrp.com.my provides shareholders and investors theoverviewinformationoftheGroup’sbusiness,thelatestupdatesoftheCompanyandtheannouncementandthequarterlyfinancial resultsmade viaBursaLink.Shareholders and investorsmay contact thepersons identified in thewebsite toenquiremoreabouttheCompanyandtheGroup.

TheCompanymeetsfinancialanalysts,asandwhenrequested,togivethemanoverviewoftheGroup’sperformanceandoperations.Through thesechannels, theCompanyhas theopportunity todirectlyaddress,explainorclarify issues thatinvestorsandanalystsmayhaveregardingthebusiness,operationsandprospectsoftheGroup.

TheAnnual GeneralMeeting is the principal forum for dialoguewith all shareholders. Shareholders are notified of themeetingandprovidedwithacopyoftheCompany’sAnnualReportbeforethemeeting.TheNoticeoftheAnnualGeneralMeetingwillbecirculatedatleasttwenty-one(21)daysbeforethedateofthemeetingtoenableshareholderssufficienttimetoperusetheAnnualReportandpaperssupportingtheresolutionsproposed.


Remuneration Bands Executive Directors Non-Executive Directors

RM50,001-RM100,000 - 4 RM200,001–RM300,000 - 1* RM450,001–RM500,000 1 - RM500,001–RM600,000 1 - RM1,000,001–RM1,500,000 1 - RM2,000,001–RM3,100,000 1 -

*SalariesandotheremolumentspaidbyESSBwasRM287,025.

The Group The Company

Executive Non-Executive Executive Non-Executive Directors Directors Directors Directors RM RM RM RM

Salaries&otheremoluments 3,180,305 *287,025 2,743,936 *287,025 Bonus 2,220,500 - 2,105,000 - Allowances 326,000 16,000 284,000 16,000 Fees - 360,000 - 360,000

Total 5,726,805 663,025 5,132,936 663,025


C. SHAREHOLDERS COMMUNICATION AND INVESTORS RELATIONS

AttheGeneralMeetings,theBoardencouragesshareholders’participationbyprovidingopportunitiesforshareholderstoraisequestionsonthebusinessactivitiesoftheGroup,agendaofthemeetingsanditsproposedresolutions.TheChairmanofthemeetingwillfacilitatethediscussionwiththeshareholdersandprovidefurtherinformationinresponsetoshareholders’queries.Onorafter1July2016andinlinewiththeamendmentstoBursaMalaysiaSecuritiesBerhad’sMainMarketListingRequirementson24March2016,anyresolutionsetoutinthenoticeofgeneralmeetingsoftheCompanyornoticeofresolutionsanditsrelatedamendments,ifany,willberequiredtobepollvoted.

TheBoard isavailableat theAnnualGeneralMeeting toanswerquestionsandconsidersuggestions.TheExternalAuditorsarealsopresenttoprovidetheirprofessionalandindependentclarificationonissuesofconcernraisedbytheshareholders,ifany.

Atthestartofthelastyear’sAnnualGeneralMeetingheldon15December2016,theBoard’sreplytotheMinorityShareholders’WatchdogGroup’s(“MSWG”)queryLetterdated15December2016wasreadouttotheShareholderspresentattheMeeting.AcopyofthisreplytoMSWGcanbefoundattheCompany’swebsiteatwww.htgrp.com.my.

TheBoardhas identifiedMr.NgSoonLai@NgSiekChuan as theSenior IndependentNon-ExecutiveDirector towhomconcernsmaybeconveyed.TheSeniorIndependentNon-ExecutiveDirectorprovidesasecureandconfidentialchannel to address any concerns conveyed to him directly on matters relating to the Company through e-mail([email protected]).

D. ACCOUNTABILITY AND AUDIT

i. Financial Reporting

The Board upholds integrity in financial reporting by ensuring that shareholders are provided with reliableinformationof theCompany’sfinancialperformance, itspositionandfutureprospects, in theAnnualAuditedFinancialStatementsandquarterlyfinancialreports.

TheBoardisalsoresponsibleforensuringthatthefinancialstatementsoftheCompanyandoftheGrouparemadeout inaccordancewithapplicableapprovedaccountingstandardsinMalaysiaandtheprovisionsoftheCompaniesAct2016.TheBoardalsoensuresthatthefinancialstatementsoftheGroupgiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasattheendoftheaccountingperiod.TheBoardthroughthereviewbytheAuditCommitteeandinconsultationwiththeExternalAuditors,presentsabalancedandunderstandableassessmentoftheGroup’sfinancialpositionandprospecttotheshareholders,investorsandregulatoryauthorities.

Suitability and Independence of External Auditors

TheAuditCommitteeisresponsibleforapprovingauditandnon-auditservicesprovidedbytheExternalAuditors.Intheprocess,theACwillensurethattheindependenceandobjectivityoftheExternalAuditorsarenotcompromised.

Moreover,theEngagementPartneroftheExternalAuditorswillretireeveryfive(5)yearsasamatteroftheExternalAuditors’ internal policy. For thefinancial year ended31 July 2017, thenewKPMGEngagementPartnerwhowillreplaceMr.LamShuhSiangisMr.ChinShoonChong.

TheExternalAuditorshavealsoconfirmedthattheyare,andhavebeen,independentthroughouttheconductoftheauditengagementinaccordancewiththeindependencecriteriasetoutbytheMalaysianInstituteofAccountants.



ii. Statement of Directors’ Responsibility in relation to the Financial Statements

TheBoardofDirectorsisrequiredunderParagraph15.26(a)ofBMSB’sMMLRtoissueastatementexplainingtheirresponsibilityinthepreparationoftheannualfinancialstatements.TheDirectorsarealsorequiredbytheCompaniesAct2016topreparefinancialstatementsforeachfinancialyear,whichhavebeenmadeoutinaccordancewiththeapprovedaccountingstandardsandtogiveatrueandfairviewofthestateofaffairsoftheCompanyandoftheGroupasattheendofthefinancialyear.

TheDirectorsareresponsibleforkeepingproperaccountingrecords,whichdisclosedwithreasonableaccuracyatanytimethefinancialpositionoftheCompanyandtheGrouptoenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct2016andapplicableapprovedaccountingstandardsinMalaysia.

Inpreparingthesefinancialstatements,theDirectorshave:-

• selectedappropriateaccountingpoliciesandappliedthemconsistently; • madejudgmentsandestimatesthatarereasonableandprudent; • ensuredthatallapplicableaccountingstandardshavebeenfollowed,subjecttoanymaterialdepartures disclosedandexplainedinthefinancialstatements;and • prepared financial statements on the going concern basis as theDirectors have a reasonable expectation,

havingmadeenquiries that theGrouphasadequate resources tocontinue inoperationalexistence for theforeseeablefuture.

iii. Internal Control

TheBoardacknowledgestheimportanceofmaintainingasoundsystemofinternalcontroltosafeguardshareholders’interestandtheGroup’sassets.AnoutsourcedinternalauditfunctionwasestablishedtoassisttheAuditCommitteeinreviewingthestateofriskmanagementandinternalcontroloftheGroupandtohighlightareasforManagement’simprovement.ThestateofinternalcontroloftheGroupisexplainedingreaterdetailintheenclosedStatementonRiskManagementandInternalControl.

iv. Relationship with External Auditors

TheGrouphasestablishedaformal,transparentandprofessionalrelationshipwithitsExternalAuditors.TheAuditCommitteereviewstheauditplans,scopeofauditandauditreportaswellastheirprofessionalfees,performanceandappointment.TheappointmentoftheExternalAuditorsissubjecttotheapprovaloftheshareholdersattheGeneralMeetingsoftheCompany.

TheExternalAuditorsareinvitedtoattendAuditCommitteemeetingswhennecessary.TheExternalAuditorspresenttheirauditplans,reporttheirfindingstotheAuditCommitteeanddiscusswiththeBoardofDirectorsonmattersthatnecessitatetheBoard’sattention.

TheAuditCommitteehadmetwith theExternalAuditorson29September2016and29June2017without thepresenceoftheExecutiveDirectorsandtheManagement.



ADDITIONAL INFORMATION

1. SHARE BUY-BACK

Atotalnumberofsharespurchasedandretainedastreasurysharesduringthefinancialyearended31July2017was10,000.

Asatendofthefinancialyear:

a.Atotalof5,492,000buy-backshareswereheldastreasurysharesandcarriedatcost;and

b.Noshareshadbeencancelled.

2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

Otherthanasdisclosedbelow,therewerenooptions,warrantsorconvertiblesecuritiesexercisedduringthefinancialyearended31July2017.

3. DEPOSITORY RECEIPT PROGRAMME

TheCompanydidnotsponsoranyDepositoryReceiptProgrammeduringthefinancialyearended31July2017.

4. IMPOSITION OF SANCTIONS/PENALTIES

Therewerenopublicsanctionsand/orpublicpenalties imposedon theCompanyand itssubsidiaries,DirectorsorManagementbyrelevantregulatorybodiesduringthefinancialyearended31July2017.

5. NON-AUDIT FEES

Anon-auditfeesofRM20,000wereincurredforservicesrenderedtoHTVBoritssubsidiariesforthefinancialyearended31July2017bytheExternalAuditorsorafirmorcompanyaffiliatedtotheExternalAuditors.

6. VARIATION IN RESULTS

Therewasnomaterialvariancebetweentheresultsforthefinancialyearended31July2017andtheunauditedquarterly resultspreviouslyannounced.

7. PROFIT GUARANTEE

TherewasnoprofitguaranteegivenbytheCompanyduringthefinancialyear.

No. of Shares RM

Asat1August2016 1,288,717,434 644,358,717

(+)Ordinarysharesissuedpursuanttothe

conversionofRCUIDS 21,011,000 10,505,500

Asat31July2017 1,309,728,434 654,864,217



8. UTILISATION OF PROCEEDS

Asat31July2017,thestatusofutilisationofproceedsraisedfromthecorporateexercisesareasfollows:

Corporate Exercise Purpose Approved Amount Amount Utilisation Utilised Unutilised RM’000 RM’000 RM’000

RightsIssue a)Workingcapitalrequirement 140,082140,082 -

b)Expensesincidentaltotherightsissue 2,500 2,500 -

Total 142,582 142,582 -

9. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

TherewerenomaterialcontractsbytheCompanyand/oritssubsidiariesinvolvingDirectors’andmajorshareholders’interest.

10. REVALUATON POLICY

TheGroup’srevaluationpolicyisstatedinthesummaryofsignificantaccountingpoliciesinthefinancialstatements.


JKJiSengSdn.Bhd.(“JKJS”)

ShougangGroup

SalesofsteelProductbyESSBtoJKJS

PurchaseofEquipment,ProductsandServices

Mr.QiuLiuZhongisdeemedinterestedinShougangGroupbyvirtueofhimbeingtheDirectorofESSB,Shougang International (Singapore) Pte. Ltd. andShougangInternational(Malaysia)Sdn.Bhd.

-

-

TanSriDato’LawTienSengisdeemedinterestedin JKJS by virtue of him being a Director andShareholder of T.S. LawHoldings Sdn. Bhd. (“TSLaw”) which in turn is the major shareholder ofJKJS.

11. RECURRENT RELATED PARTY TRANSACTIONS OF REVENUE OR TRADING NATURE

TheCompanyhasonitsAnnualGeneralMeetingheldon15December2016soughtapprovalforashareholders’mandatefortheGrouptoenterintorecurrentrelatedpartytransactionsofrevenueortradingnature.

The aggregate value of recurrent related party transactions conducted during the financial year ended 31 July 2017 inaccordancewiththeshareholders’mandateobtainedinthelastAnnualGeneralMeetingwereasfollows:

Nature of Transaction

Valueof

Transactions(RM’000)

Relationship and Nature of Interest

Related Parties involved withHTVB and/or itsSubsidiaries

JKJiSengSdn.Bhd.(“JKJS”)

EasternSteelSdn.Bhd.(“ESSB”)

PurchaseofprimeHotRolledSteelPlates

Salesofsteelproducts

TanSriDato’LawTienSengisdeemedinterestedinJKJSbyvirtueofhimbeingaDirectorandShareholderofT.S.LawHoldingsSdn.Bhd.(“TSLaw”)whichinturnisthemajorshareholderofJKJS.

231,486

-HTVB owned 55% of ESSB, a joint venturewithOrient Steel Investment Pte. Ltd. and ChinacoInvestmentPte.Ltd.

TanSriDato’LawTienSengisdeemedinterestedinESSBbyvirtueofhimbeingaDirectorofESSB,majorShareholderandDirectorofHTVB.

Mr.WangShenghuaisdeemedinterestedinESSBbyvirtueofhimbeingaDirectorofHTVB,aDirectorandChiefExecutiveDirectorofESSB.

Shougang International (Singapore) Pte. Ltd., asubstantial shareholder of HTVB, is deemedinterested in ESSB by virtue of it being a majorshareholderofOrientSteelInvestmentPte.Ltd.

This statement was approved by the Board on 28 September 2017




TheMalaysian Code on CorporateGovernance 2012 specifies that the Board of Directors of public listed companies shouldestablishasoundriskmanagementframeworkandinternalcontrolsystemtosafeguardshareholders’investmentandGroup’sassets.TheBoardofDirectors(“theBoard’) ispleasedtopresent itsStatementonRiskManagementandInternalControlforthefinancialyearended31July2017. ThisStatement ispreparedpursuanttoparagraph15.26(b)of theMainMarketListingRequirements and guided by the “Statement on RiskManagement and Internal Control – Guidelines for Directors of ListedIssuers”(“theGuidelines”)endorsedbytheBursaMalaysiaSecuritiesBerhad(“BMSB”).

BOARD’S COMMITMENT AND RESPONSIBILITY

AstheGroupoperatesinadynamicbusinessenvironment,asoundriskmanagementandinternalcontrolsystemmustbeinplacetohelptheGrouptoachieveitsbusinessobjectives.Therefore,theBoardremainscommittedtowardsmaintainingasoundsystemof riskmanagement and internal control andbelieves that abalancedachievementof itsbusinessobjectivesandoperationalefficiencycanbeattained.

Principally,theresponsibilitiesoftheBoardforthegovernanceofrisksandcontrolsasprovidedintheGuidelinesinclude:

• Embeding riskmanagement in all aspects of theGroup’s activities,which also encompasses subsidiaries of the Company;and

• Reviewingriskmanagementframework,processes,responsibilitiesandassessingwhetherthepresentpoliciesandsystemsprovidereasonableassurancethatrisksaremanagedappropriately.

TheBoardunderstandstheprincipalrisksofthebusinessthattheGroupisengagedinandacceptsthatbusinessdecisionsrequirethebalancingofriskandreturninordertorewardtheshareholders.

TheBoarddelegatedtheresponsibilityofreviewingtheeffectivenessofriskmanagementtotheRiskManagementCommittee(“RMC”).ThekeyfunctionofRMCistoreviewandreporttotheBoardtherisksfacedbytheGroupandtheeffectivenessofmanagementmeasuresinidentificationandassessmentofrisksaswellasthedesign,managementandmonitoringofinternalcontrolstomitigaterisks.

ThepresentcompositionoftheRMCisasfollows:

(i) Mr.LeowHoiLoong@LiowHoiLoong -IndependentNon-ExecutiveDirector(Chairman) (ii) Mr.FooKokSiew -ExecutiveDirector (iii) Mr.LeeChingKion -IndependentNon-ExecutiveDirector

TheRMCmeetsatleastonceeveryquarterandonotheroccasions,asandwhennecessary.

RISK MANAGEMENT AND INTERNAL CONTROL

The Board acknowledges its overall responsibility for reviewing the adequacy and integrity of the Group’s systems of riskmanagementandinternalcontrol,identifyingprincipalrisksandestablishinganappropriatecontrolenvironmentandframeworktomanagerisks.ThekeyriskcategoriesoftheGrouparefinancialriskassociatedtocorporatefundingandgearing,foreignexchangerisk,supplychainrisk,regulatoryrisk,marketrisk,creditriskandinventoryrisk.

TheRMCisassistedbytheRiskManagementWorkingCommittee(“RMWC”),whichisrepresentedbytheheadsofthevariousdepartmentsof theGroup. The rolesofRMWC is to identify,measure, prioritize and re-assess the risks and toensure thatadequateattentionandfocusforriskmanagementareplacedinatimelyandappropriatemannerinaccordancewiththeperceivedandanticipatedriskmagnitude.Quarterly,theRMWCre-assesses,summarizesandreportstheemergingrisksandtheirprofilestotheRMCforreviewanddeliberation.ThestatusofkeyrisksandmanagementactionsarefurtherpresentedbyRMCtotheBoardforreviewanddeliberation.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


Intermofthekeycontrols,theGrouphaspresentlyimplementedthefollowingcontrolmeasuresandproceduresinitsoperations:

i. ThePurchasingCommitteethatreviews,monitorsandapprovespurchases;

ii. Budgetarycontrolinvolvingthereviewandapprovalofannualbudgetforeachfinancialyear;

iii. Organisationstructurethatdefinesthemanagementhierarchystructureofreportinglinesandaccountability;

iv. Authoritylimitsandapprovalprocessesthatfacilitatethedelegationofauthority;

v. Centralized enterprise resource planning information system that provides on-line information and produces periodic performancereportstomanagementformonitoringpurposes;

vi. ISO 9001:2008 QualityManagement System, EC Certification on Factory Production Control and American PetroleumInstitute(“API”)manufacturingprocedures inthemanufacturingoperationsoftheGroup.AnnualsurveillanceauditsareconductedbyexternalcertificationbodytoprovideassuranceofcompliancewiththeISOrequirements.

BOARD AND MANAGEMENT REVIEW MECHANISM

WhilsttheRMCoverseesriskmanagementandisassistedbytheRMWCattheoperationallevel,variousmanagementreviewmeetings areheld throughout the year.Presently, themanagementorganisesweeklySeniorManagementMeetings,weeklyCollectionsMeetings,monthlyGroupManagementCommitteeMeetingsandmonthlyOperationMeetingsattherespectivekeysubsidiaries.Theobjectiveofthesemeetingsistoensurepolicies,decisionsandexpectedoperationalperformancetargetsandobjectivessetbythetopexecutivesarecommunicated,understoodandexecutedbylinemanagement.Atthesametime,thesemeetingsre-enforcethemonitoringandsupervisioncontrolsatthelinemanagementlevels.

InordertoensuretheobjectivityofthereviewofthesystemofinternalcontrolintheGroup,theAuditCommitteeisinstitutedbytheBoardtoundertakethisrole.Inconductingitsreview,theAuditCommitteeisassistedbytheInternalAuditorswhoreporttotheAuditCommitteequarterlyonthestateofcontroloftheauditedfunctions.TheInternalauditshaveidentifiedindividuallapsesininternalcontrolduringthecourseofitsworkforthefinancialyearunderreview,whichwereaddressedbytheManagement.Additionally,theAuditCommitteeobtainsfeedbackfromtheExternalAuditorsontheriskandcontrolissueshighlightedbytheminthecourseoftheirstatutoryaudit.

ManagementsupplementstheAuditCommitteereviewonriskissueswhenpresentingtheirquarterlyfinancialperformanceandresultstotheAuditCommittee.Inaddition,withthemanagementconsultation,theAuditCommitteedeliberatestheintegrityofthequarterlyfinancialresults,annualreportandauditedfinancialstatementsbeforerecommendingtotheBoardtobepresentedtotheshareholdersandpublicinvestors.

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


MANAGEMENT RESPONSIBILITIES AND ASSURANCE

InaccordancetotheGuidelines,managementisresponsibletotheBoardfor:

• continuously identifying,evaluatingandmanagingrisks relevant to thebusiness inachievingtheGroup’sobjectivesand strategiesimplementation;

• designing,implementingandmonitoringtheriskmanagementframeworkinaccordancewiththeGroup’sstrategicvision andoverallriskappetite;and

• identifyingchangestoriskoremergingrisks,takingactionasappropriateandpromptlybringingthesetotheattentionofthe Board.

TheBoardhasreceivedassurancefromtheExecutiveDirectorandChiefFinancialOfficerthattheGroup’sriskmanagementandinternalcontrolsystemisoperatingadequatelyandeffectively,inallmaterialaspects,basedontheriskmanagementandinternalcontrolsystemoftheGroup.

BOARD ASSURANCE AND LIMITATION

TheBoardconfirmsthatthereisanongoingprocessforidentifying,evaluatingandmanagingsignificantrisksfacedbytheGroup.For thefinancialyearunder review, theBoard issatisfiedthat theexistingsystemof internalcontroland riskmanagement iseffectivetoenabletheGrouptoachieveitsbusinessobjectivesandtherewerenomateriallossesresultedfromsignificantcontrolweaknesses.

WhiletheBoardwishestoreiteratethatriskmanagementandinternalcontrolsystemwouldbecontinuouslyimprovedinlinewiththeevolvingbusinessenvironment,itshouldbenotedthatthesystemofriskmanagementandinternalcontrolcouldonlymitigateratherthaneliminaterisksoffailuretoachievebusinessobjectives.Therefore,thesystemofinternalcontrolandriskmanagementintheGroupcanonlyprovidereasonablebutnotabsoluteassuranceagainstmaterialmisstatements,fraudsandlosses.

REVIEW OF STATEMENT ON INTERNAL CONTROL BY EXTERNAL AUDITORS

Pursuanttoparagraph15.23oftheMainMarketListingRequirements,theExternalAuditorshavereviewedthisStatementonRiskManagementandInternalControlforinclusionintheannualreportforthefinancialyearended31July2017.TheirreviewwasperformedinaccordancewithRecommendedPracticeGuide5(RPG5)issuedbytheMalaysianInstituteofAccountantsandtheyhavereportedtotheBoardthatnothinghascometotheirattentionthatcausethemtobelievethattheStatementintendedtobeincludedintheannualreportoftheGroup,inallmaterialrespects:

(a) hasnotbeenpreparedinaccordancewiththedisclosurerequiredbyparagraphs41and42oftheGuidelines,or

(b) isfactuallyinaccurate.

RPG5doesnot require theExternalAuditors toconsiderwhether thisStatementcoversall risksandcontrolsor to formanopinionontheadequacyandeffectivenessoftheGroup’sriskmanagementandinternalcontrolsystemincludingtheassessmentandopinionbytheBoardofDirectorsandmanagementthereon.Theauditorsarealsonotrecognisedtoconsiderwhethertheprocessesdescribedtodealwithmaterialinternalcontrolaspectsofanysignificantproblemsdisclosedintheannualreportwill,infact,remedytheproblems.

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


TheBoardofDirectorsofHiapTeckVentureBerhadispleasedtopresenttheAuditCommitteereportforthefinancialyearended31July2017incompliancewithParagraph15.15oftheMainMarketListingRequirements.

COMPOSITION OF AUDIT COMMITTEE

TheAudit Committeewas established on 17 July 2003 to fulfill the principles of accountability, integrity and good corporategovernanceinassistingtheBoardindischargingitsresponsibilitiesofreviewingandmonitoringtheGroup’sfinancialprocess,auditprocess,statutoryandregulatorycompliance.

AllmembersoftheAuditCommitteeareIndependentNon-ExecutiveDirectors.

TheTermsofReferenceoftheAuditCommitteemaybeviewedattheCompany’swebsiteatwww.htgrp.com.my

MEETING AND ATTENDANCE

Duringthefinancialyearended31July2017,theAuditCommitteeconvenedatotaloffour(4)meetings.

Thedetailsoftheattendanceofthemeetingsareasfollows:-

AUDIT COMMITTEE REPORT

Members of the Audit Committee Designation Directorship

Mr.NgSoonLai@NgSiekChuan Chairman Independent Non-ExecutiveDirectorTanSriAbdRahmanBinMamat Member Independent Non-ExecutiveChairman

Mr.LeeChingKion Member Independent Non-ExecutiveDirector Mr.LeowHoiLoong@LiowHoiLoong Member Independent Non-ExecutiveDirector

Members

Mr.NgSoonLai@NgSiekChuanTanSriAbdRahmanBinMamat

Mr.LeeChingKionMr.LeowHoiLoong@LiowHoiLoong

Date of Meeting

29.09.2016 15.12.2016 23.03.2017 29.06.2017

Total Meetings Attended

4/4

4/4

4/4

4/4

Percentage of Attendance

100%

100%

100%

100%


SUMMARY OF ACTIVITIES

TheAuditCommitteecarriedoutitsdutiesinaccordancewithitstermsofreferenceduringthefinancialyear.

TheExecutiveDirector,Mr.FooKokSiewandtheGroupChiefFinancialOfficer,MissYeoBeeHwanattendedtheAuditCommitteemeetingsbyinvitationduringthefinancialyearended31July2017.TheInternalAuditorsattendedallthescheduledquarterlyAuditCommitteemeetings.Representativesof theExternalAuditorsattendedmeetingswherematters relating to theauditof thestatutoryaccountswerediscussed.OtherBoardmembersmayattendmeetingupontheinvitationoftheAuditCommittee.TheCompanySecretaryand/orhisrepresentativesattendedalltheAuditCommitteemeetings.

ThemainactivitiesundertakenbytheAuditCommitteeduringthefinancialyearwereasfollows:

• Reviewed and recommended the unaudited quarterly financial results of theGroup to the Board of Directors for their considerationandapprovalpriortoitsreleasetoBursaSecuritiesandtheSecuritiesCommission.

• Reviewed and recommended to the Board for approval, theGroup’s audited financial statements and the audit report onthefinancialstatements.

• Reviewedandapprovedtheinternalauditplan,strategyandscopeofwork.

• Reviewed the internal audit reports and consideration of the findings and recommendations and management’s responsesthereto.

• ReviewedtheRecurrentRelatedPartyTransactionsoftheGroup.

• Reviewed the external audit planningmemorandumwhich covers the scope of the statutory audit and the audit plan priortothecommencementofauditoftheGroup’sfinancialstatements.

• Reviewed and discussed with External Auditors the issues arising from the statutory audit, the audit report and the managementlettersincludingmanagement’sresponses.

• ReviewedtheStatementonRiskManagementandInternalControlpriortoitsinclusionintheAnnualReport.

• Met with the External Auditors on 29 September 2016 and 29 June 2017 without the presence of the Executive DirectorsandManagement.

REVIEW OF ALLOCIATION OF OPTIONS

• The Audit Committee had reviewed the allocation of the options pursuant to the Employees’ Share Option Scheme‘ESOS”whichwasextendedforanother5yearsfrom12April2017to11April2022.TheallocationoftheoptionswasincompliancewiththeBy-LawsofTheESOS.

INTERNAL AUDIT FUNCTION

TheGroup’sinternalauditfunctionisoutsourcedtoanindependentprofessionalservicesfirmwithanannualfeesofRM178,100.Independenceisessentialtotheeffectivenessoftheinternalauditfunction.TheoutsourcedInternalAuditorsreportdirectlytotheAuditCommitteeandtheAuditCommitteehasfullanddirectaccesstotheInternalAuditors.

TheinternalauditfunctionisestablishedtoassisttheAuditCommitteeindischargingitsdutiesandresponsibilities.TheprincipalroleoftheinternalauditfunctionistoreviewtheGroup’soperations,evaluatingtheirefficiency,effectivenessandcompliancewithcorporatepolicies,procedures,lawsandregulations.

Theinternalauditfunctioniscarriedoutwithimpartiality,proficientlyanddueprofessionalcare.ItprovidestheAuditCommitteewith information,appraisals,recommendationsandcounselregardingtheactivitiesexaminedandothersignificant issues.TheinternalauditreportsarereviewedbytheAuditCommitteeandtheManagementisresponsibleforensuringthatcorrectiveactionsonreportedweaknessesaretakenwithintherequiredtimeframe.

Duringthefinancialyear,theinternalauditorsexecutedtheapprovedauditplanandperformedthefollowingtasksinaccordancewithitsoverallstrategy:

AUDIT COMMITTEE REPORT (Cont’d)


INTERNAL AUDIT FUNCTION

• PerformedinternalauditreviewontheGroup’soperatingunitsforthefunctionofFinance–GSTAccounting,SupplyChain ProcurementFunction,InformationTechnologyGeneralControl,FinanceFunction,andInventoryQuantityManagement.• Evaluatedtheeffectivenessandadequacyofmanagementcontrolsproceduresinmanagingforeigncurrencyexposure.• Reviewedthecontrolprocedurestakenbythemanagementonrecurrentrelatedpartytransactions.• Issued reports on the results of the internal review, identifying weaknesses with suggested recommendations for improvementstomanagementforfurtheractiontoimprovethesystemofinternalcontrol.• Followed-upontheimplementationofcorrectiveactionplansagreedbymanagement.• AttendedAuditCommitteemeetingstotableanddiscusstheinternalauditfindingsandissues.Duringtheyear,theAuditCommitteehasmettheInternalAuditorsfour(4)timestocarryoutitsresponsibilityinreviewingtheinternalauditfunctionandtoassureitselfonthesoundnessofinternalcontrolsystem.

ThisstatementwasapprovedbytheBoardon28September2017.

AUDIT COMMITTEE REPORT (Cont’d)


SUSTAINABILITY AND CORPORATE RESPONSIBILITY

The Group acknowledges the importance of practising and managing Sustainability and we believe in building sustainablebusinessesthatdeliverlong-termvalueandgrowthtoallourstakeholders.Inoursustainabilitystrategy,westrivetobeasociallyresponsiblecorporatecitizenbyaddressingtheeconomic,environmentalandsocialissuesthatarerelevantandimportanttoourbusinessandstakeholders.

OurthreeareasoffocusareOurPeople,OurCommunityandOurMarketPlacetoprovidesustainablevalueasawhole.

Our People

ThegreatestassetoftheGroupisourpeople–theemployees.Webelievethatemployeesarethekeyresourcesthatdrivelongtermandsustainableorganizationalsuccesses.Wearecommittedtonurturinganddevelopingouremployeesthroughcontinuoustraininganddevelopment.

TheGroupplacespriorityoncultivatingarespectfulandharmoniousworkingenvironmentandwepromotetalentbyprovidingtrainingandcareerdevelopmentopportunitiesandenablingouremployeestoactwith integrityandhighmorale.Westrivetocontinuouslygroomandretainadiversetalentpooltoensureouremployeesarereadyforthefuturesuccessionplanninganddevelopmentaswellasbeingadaptabletochange.TheGroupisalsocommittedtoensuringahealthyandsafeworkingenvironmentforouremployees.Westrivetoachieveanaccident-freeworkplacethroughcontinuouseducationandtrainingtoimprovesafetyperformance.TheOccupationalSafetyandHealthCommitteeplaysacriticalroletopromoteanaccidentfreemindsettoalllevelsofemployeeswithsafetymeasuresbriefing,trainingandroadshowtohelpaccomplishthegoalofazeroaccidentworkingenvironment.

GotongRoyongisoneoftheGroup’sannualeventsthatfostersacleanenvironmentforworkplaceandsurroundingareasandcommunity.Topromoterespectfulandfriendshipamongouremployees,theGrouporganizessocialgatheringsforallfestivals,annualdinner,birthdayparties,etc.

TheGroupplacesgreatattentiononthewell-beingandbenefitsoftheemployees.Inordertodevelopabalancedworkinglifeandcreateacaring,harmoniousandcohesiveworkingenvironment,employeesareencouragedtoparticipateinvarioussportsandrecreationalactivities.

Our Community

Asagoodcorporatecitizen,wearedeterminedtoservingandcontributingtothecommunityinwhichweliveandworkthroughourvolunteerism.Wetrustthevalueofvolunteerismtocommunitywillhelpdevelopcaringcharacterandempathyamongouremployees.

TheGroupviewseducationandlife-longlearningasanimportantpillarofhumanresourcesandcommunitydevelopment.Ouremployeesandtheirfamilymembersareencouragedtoimproveandupliftthemselvesthroughcontinuingeducation.Employees’childrenaregivenayearlyallowancetoenablethemtobuybooksandothereducationalaids.

TheannualblooddonationeventprovidesaremindertotheimportanceofacaringcommunityandalsohelpstostockupthebloodbankforNationalBloodCentre.Theeventhasalwaysreceivedawarmresponsefromouremployeesandlocalcommunities.

Overtheyears,theGroupalsoprovideddonationsandsponsorshipstoanumberofcommunityservicesandorganizations.Thisyear,wehaveorganizedandfundedvariousseminarsthatenhancedknowledgeforengineersduringtheirprojectdesignstagerightuptocompletion.

On23February2017,theGrouporganizedanIndustrialSteelSeminarfor100civil&structuralengineersfromSarawakonthefollowingtopics:

i) SteelMaterialSelectionandCompliancewithStructuralEurocodesii) DesignIssueswithSelectionofSteelMaterialsiii) DifferencebetweenHot-FormedandHotFinishedStructuralHollowSections. Speaker:Dr.ChiewSingPingiv) Design,installationandsafetymeasuresofscaffoldingstoMS1462. Speaker:IRKSNG


SUSTAINABILITY AND CORPORATE RESPONSIBILITY

TheGroupalsoorganisedtwoSteelIndustryrelatedseminarstohelpeducateandinformcontractorsonlatestcodeofpracticeonthefollowingdates:

• 29March2017atSetiaCityConventionCentreShahAlamwhichreceivedoverwhelmingresponsewith360contractors participated.• 17May2017atBayuMarinaResort,JohorBaru,attendedby250contractors.

Thetopicsofdiscussionandspeakerswereasfollows:

1)EurocodeApplicationsfortheMalaysianBuildingIndustry-byDr.ChiewSingPing2)Thehandling,welding,fabricationandinspectionofsteelpipes-byIr.Ghazali3)Safetypractice,installationanddesignofscaffolding-byIr.KSNg4)ComplianceofCIDBcodeofpracticeforthecontractors-byCIDB

Toacknowledgethatweareanintegralpartofthecommunitiesinwhichweoperate,theGroupiscommittedtobeanactivememberandsupporterofthesecommunitiesineverywaywecanstrategically,financiallyandsocially.

Our Market Place

TheGroupemphasizesonanethicalbusinesscultureamongstourpeopleforthebenefitofourstakeholders.Honestyandintegrityinallourbusinessdealings,andrespectfortheinterestsoftherelevantstakeholdersareessentialbusinesspracticesthroughouttheGroup.

TheGroup’s corporatewebsite,www.htgrp.com.my, provides up-to-date and reliable information about theGroup’s businessactivities.ThelatestinformationanddevelopmentoftheGroupwillbeupdatedregularlytothewebsite.

Movingforward,theGroupwillcontinuetoboostoureffortstoensuresustainablegrowthandperformancewhilemaintainingahighstandardofcorporategovernance.

Directors’Report

StatementsofFinancialPosition

StatementsofProfitorLossandOtherComprehensiveIncome

ConsolidatedStatementsofChangesinEquity

CompanyStatementsofChangesinEquity

StatementsofCashFlows

NotestotheFinancialStatements

SupplementaryFinancialInformation-DisclosureofRealisedandUnrealisedProfitsorLosses

StatementbyDirectors

StatutoryDeclaration

IndependentAuditors’Report

042048049050052053055119120120121

STATEMENTSFINANCIAL

VISION• Tobetheleadingsteelcompanyintheregion

MISSION• Buildvalueforshareholders• Participateinthedevelopmentofthecountry• Totalcustomersatisfaction• Enhancementofexistingcorebusinesstopositionforgrowth• Onestopsteelcentre• Continuouslydevelophumanasset

OUR


DIRECTORS’ REPORT

TheDirectorsherebysubmittheirreportandtheauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31July2017.

Principal activities

TheCompanyisprincipallyengagedininvestmentandpropertyholdingsandtheprovisionofmanagementservices,whilsttheprincipalactivitiesofthesubsidiariesareasstatedinNote6tothefinancialstatements.Therehasbeennosignificantchangeinthenatureoftheseactivitiesduringthefinancialyear.

Subsidiaries

ThedetailsoftheCompany’ssubsidiariesaredisclosedinNote6tothefinancialstatements.

Results Group Company RM’000 RM’000

Lossfortheyearattributableto:OwnersoftheCompany (102,977) (288,277)Non-controllinginterests (184) - (103,161) (288,277)

Reserves and provisions

Therewerenomaterialtransferstoorfromreservesandprovisionsduringthefinancialyearunderreviewexceptasdisclosedinthefinancialstatements.

Dividends

Sincetheendofthepreviousfinancialyear,theCompanypaidasingletierfinaldividendof0.30senperordinarysharetotallingRM3,854,140inrespectoffinancialyearended31July2016on25January2017.

TheDirectorsdonotrecommendanydividendsforthecurrentfinancialyear.

Directors of the Company

Directorswhoservedduringthefinancialyearuntilthedateofthisreportare:

TanSriAbdRahmanBinMamatTanSriDato’LawTienSengNgSoonLai@NgSiekChuanFooKokSiewLeowHoiLoong@LiowHoiLoongLeeChingKionTanShauMingLawWaiCheong(appointedon03January2017)WangShenghua(resignedon15December2016)


Directors’ interests in shares

Theinterestsanddeemedinterests intheordinarysharesandoptionsoverordinarysharesoftheCompanyandof itsrelatedcorporations (other than wholly-owned subsidiaries) of those who were Directors at year end (including the interest of thespousesorchildrenoftheDirectorswhothemselvesarenotDirectorsoftheCompany)asrecordedintheRegisterofDirectors’Shareholdingsareasfollows:

Number of ordinary shares At 1.8.2016/ Date of At appointment Bought Sold 31.7.2017

DeemedinterestsintheCompany: TanSriDato’LawTienSeng 337,647,686 - - 337,647,686LawWaiCheong 337,647,686 - - 337,647,686LeeChingKion 75,354 - (30,000) 45,354TanShauMing 792,000 - - 792,000

Number of options over ordinary shares At At 1.8.2016 Granted Exercised 31.7.2017

InterestsintheCompany: TanSriAbdRahmanBinMamat -own 1,439,999 - - 1,439,999

TanSriDato’LawTienSeng -own 12,599,995 - - 12,599,995

NgSoonLai@NgSiekChuan -own 899,999 - - 899,999

LeeChingKion -own 899,999 - - 899,999

FooKokSiew -own 7,199,997 - - 7,199,997 LeowHoiLoong@LiowHoiLoong -own 899,999 - - 899,999 TanShauMing -own 3,599,997 - - 3,599,997

Number of Warrants 2012/2017 At At 1.8.2016 Bought Expired 31.7.2017

DeemedinterestsintheCompany: TanSriDato’LawTienSeng 44,362,418 - (44,362,418) - TanShauMing 99,000 - (99,000) -

DIRECTORS’ REPORT (Cont’d)


Directors’ interests in shares (Cont’d)

Number of Warrants 2016 At 1.8.2016/ Date of At appointment Bought Sold 31.7.2017

DeemedinterestsintheCompany: TanSriDato’LawTienSeng 75,032,819 - - 75,032,819LawWaiCheong 75,032,819 - - 75,032,819TanShauMing 176,000 - - 176,000

Number of RCUIDS At 1.8.2016/ Date of At appointment Bought Sold 31.7.2017

DeemedinterestsintheCompany: TanSriDato’LawTienSeng 75,032,819 - - 75,032,819LawWaiCheong 75,032,819 - - 75,032,819TanShauMing 176,000 - - 176,000

ByvirtueofhisshareholdingsintheCompany,TanSriDato’LawTienSengisalsodeemedtobeinterestedinsharesinallthesubsidiariesoftheCompany.

NoneoftheotherDirectorsholdingofficeat31July2017hadanyinterestintheordinarysharesoftheCompanyandofitsrelatedcorporationsduringthefinancialyear.

Directors’ benefits

Sincetheendofthepreviousfinancialyear,noDirectoroftheCompanyhasreceivednorbecomeentitledtoreceiveanybenefit(otherthanabenefitincludedintheaggregateamountofremunerationreceivedordueandreceivablebyDirectorsasdisclosedinNote22tothefinancialstatementsorthefixedsalaryofafulltimeemployeeoftheCompanyoroftherelatedcorporations)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththeDirectororwithafirmofwhichtheDirectorisamember,orwithacompanyinwhichtheDirectorhasasubstantialfinancialinterestexceptasdisclosedinNote31tothefinancialstatements.

TherewerenoarrangementsduringandattheendofthefinancialyearwhichhadtheobjectofenablingDirectorsoftheCompanytoacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporateapartfromtheoptionspursuanttotheEmployeesShareOptionScheme(“ESOS”).

Issue of shares and debentures

During the financial year, there were conversion of 5-year 5% Redeemable Convertible Unsecured Islamic Debt Securities(“RCUIDS”)to21,011,000ordinaryshares.

Therewerenootherchangesintheauthorised,issuedandpaid-upcapitaloftheCompanyduringthefinancialyear.

Treasury shares

Asat31July2017,atotalof5,492,000buy-backshareswereheldastreasurysharesandcarriedatcosts.

ThesharesrepurchasedarebeingheldastreasurysharesinaccordancewithSection127(4)(b)oftheCompaniesAct2016andfurtherrelevantdetailsaredisclosedinNote14tothefinancialstatements.



Options granted over unissued shares

NooptionsweregrantedtoanypersontotakeupunissuedsharesoftheCompanyduringthefinancialyearapartfromtheissueofoptionspursuanttotheEmployeesShareOptionScheme(“ESOS”)whicharegovernedbyESOSBy-LawsandRCUIDSwithfreedetachablewarrants.

Employees Share Option Scheme (“ESOS”)

Atanextraordinarygeneralmeetingheldon23November2011,theCompany’sshareholdersapprovedtheestablishmentofESOStoeligibleDirectorsandemployeesoftheGroup.On10January2017,theBoardofDirectorsextendedtheESOSwhichisexpiringon11April2017foranotherfiveyearsfrom11April2017to11April2022.

ThesalienttermsoftheESOSaredisclosedinNote32tothefinancialstatements.

TheoptionsofferedeligibleDirectorsandemployeesoftheGrouptotakeupunissuedordinarysharesandtheexercisepricesareasfollows:

No. of share options over ordinary shares Date of offer Exercise At At price 1.8.2016 Granted Exercised Forfeited 31.7.2017

19April2013 RM0.50 66,769,897 - - (10,395,983) 56,373,914 10January2014 RM0.67 15,893,961 - - (3,383,992) 12,509,969 12January2015 RM0.53 14,565,932 - - (4,359,994) 10,205,938 97,229,790 - - (18,139,969) 79,089,821

Indemnity and insurance costs

Duringthefinancialyear,DirectorsandOfficersofHiapTeckVentureBerhad,togetherwithitssubsidiariesarecoveredundertheDirectors’andOfficers’Liability Insurance inrespectof liabilitiesarisingfromactscommitted intheir respectivecapacityas,interalia,DirectorsandOfficersoftheGroupsubjecttothetermsofthepolicy.ThetotalamountofDirectors’andOfficers’LiabilityInsuranceeffectedfortheDirectorsandOfficersoftheGroupwasRM20million.ThetotalamountofpremiumpaidfortheDirectors’andOfficers’LiabilityInsurancebytheGroupandtheCompanywasRM19,000.

Other statutory information

Before the financial statements of theGroup and of the Companyweremade out, theDirectors took reasonable steps toascertainthat:

i) allknownbaddebtshavebeenwrittenoffandadequateprovisionmadefordoubtfuldebts,and

ii) anycurrentassetswhichwereunlikely tobe realised in theordinarycourseofbusinesshavebeenwrittendown toan amountwhichtheymightbeexpectedsotorealise.

Atthedateofthisreport,theDirectorsarenotawareofanycircumstances:

i) thatwouldrendertheamountwrittenoffforbaddebts,ortheamountoftheprovisionfordoubtfuldebts,intheGroupand intheCompanyinadequatetoanysubstantialextent,or

ii) thatwouldrenderthevalueattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompany misleading,or

iii) whichhavearisenwhichrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandofthe Companymisleadingorinappropriate,or

iv) nototherwisedealtwith in this reportor thefinancial statements, thatwould renderanyamountstated in thefinancial statementsoftheGroupandoftheCompanymisleading.



Other statutory information (Cont’d)

Atthedateofthisreport,theredoesnotexist:

i) anychargeontheassetsoftheGrouporoftheCompanythathasarisensincetheendofthefinancialyearandwhich securestheliabilitiesofanyotherperson,or

ii) anycontingentliabilityinrespectoftheGrouporoftheCompanythathasarisensincetheendofthefinancialyear.

NocontingentliabilityorotherliabilityofanycompanyintheGrouphasbecomeenforceable,orislikelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,intheopinionoftheDirectors,willormaysubstantiallyaffecttheabilityoftheGroupandoftheCompanytomeettheirobligationsasandwhentheyfalldue.

IntheopinionoftheDirectors,exceptforthosedisclosedinthefinancialstatements,thefinancialperformanceoftheGroupandoftheCompanyforthefinancialyearended31July2017havenotbeensubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnaturenorhasanysuchitem,transactionoreventoccurredintheintervalbetweentheendofthatfinancialyearandthedateofthisreport.

Significant events

SignificanteventsduringtheyeararedisclosedinNote33tothefinancialstatements.

Subsequent events

SubsequenteventsaredisclosedinNote34tothefinancialstatements.




Auditors

Theauditors,KPMGPLT(convertedfromaconventionalpartnership,KPMG,on27December2016),haveindicatedtheirwillingnesstoacceptre-appointment.

Theauditors’remunerationisdisclosedinNote21tothefinancialstatements.

SignedonbehalfoftheBoardofDirectorsinaccordancewitharesolutionoftheDirectors:

………………………………………………………..Tan Sri Dato’ Law Tien SengDirector

………………………………………………………..Foo Kok SiewDirector

Date:25October2017


Group Company

Note 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Assets Property,plantandequipment 3 252,358 256,486 92 202 Miningexplorationandevaluationassets 4 20,484 19,597 - - Investmentproperties 5 7,318 7,476 98,105 99,420 Investmentinsubsidiaries 6 - - 94,070 93,970 Investmentinjointventure 7 - 55,157 - 220,798 Investmentinassociate 8 - 475 - - Available-for-salefinancialassets 9 1,507 909 - - Deferredtaxassets 10 554 302 - - Tradeandotherreceivables 11 90,935 279,612 167,526 303,646

Total non-current assets 373,156 620,014 359,793 718,036 Inventories 12 323,847 254,993 - - Tradeandotherreceivables 11 564,402 528,071 352,879 247,587 Taxrecoverable 2,348 2,235 - - Available-for-salefinancialassets 9 4,691 5,189 - - Cashandcashequivalents 13 83,350 241,492 4,476 127,199

Total current assets 978,638 1,031,980 357,355 374,786

Total assets 1,351,794 1,651,994 717,148 1,092,822

Equity Sharecapital 654,864 644,358 654,864 644,358 Reserves 152,511 268,506 (173,244) 128,594

Total equity attributable to owners of the Company 14 807,375 912,864 481,620 772,952Non-controllinginterests (4) 180 - -

Total equity 807,371 913,044 481,620 772,952

Liabilities Deferredtaxliabilities 10 36,527 41,080 25,195 29,883 Loansandborrowings 15 25,245 165,537 25,245 165,537

Total non-current liabilities 61,772 206,617 50,440 195,420 Loansandborrowings 15 428,427 451,360 47,110 93,249Tradeandotherpayables 16 40,607 75,883 136,229 30,728 Currenttaxpayable 13,617 5,090 1,749 473

Total current liabilities 482,651 532,333 185,088 124,450

Total liabilities 544,423 738,950 235,528 319,870

Total equity and liabilities 1,351,794 1,651,994 717,148 1,092,822

Thenotessetoutonpages55to119areanintegralpartofthesefinancialstatements.

asat31July2017STATEMENTS OF FINANCIAL POSITION


Group Company

Note 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Revenue 17 1,073,657 1,138,061 17,534 188,258Costofsales 18 (895,420) (1,013,680) - -

Gross profit 178,237 124,381 17,534 188,258Otheroperatingincome 55,419 39,810 34,364 28,063Operatingcostsinrespectofincomegeneratinginvestmentproperties (392) (158) (1,315) (1,315)Administrativeexpenses (22,011) (21,230) (11,053) (9,796)Sellingandmarketingexpenses (28,253) (32,664) - -Otheroperatingexpenses (12,244) (3,811) (314,351) (3,384)

Results from operating activities 170,756 106,328 (274,821) 201,826Financecost 19 (30,255) (31,722) (12,868) (13,676)Shareoflossofequityaccountedinvestees,netoftax (215,322) (99,223) - -

(Loss)/Profit before tax (74,821) (24,617) (287,689) 188,150Taxexpense 20 (28,340) (17,556) (588) (1,735)

(Loss)/Profit for the year 21 (103,161) (42,173) (288,277) 186,415 Other comprehensive expense, net of taxItems that are or maybe reclassified subsequently to profit or loss: Foreigncurrencytranslationdifferencesforforeignoperation (55) (142) - -Fairvalueofavailable-for-salefinancialassets 598 (1,197) - - Other comprehensive income/(expense) for the year, net of tax 543 (1,339) - -

Total comprehensive (expense)/ income for the year (102,618) (43,512) (288,277) 186,415

(Loss)/Profit attributable to: Owners of the Company (102,977) (41,561) (288,277) 186,415 Non-controlling interests (184) (612) - -

(Loss)/Profit for the year (103,161) (42,173) (288,277) 186,415 Total comprehensive (expense)/ income attributable to: Owners of the Company (102,434) (42,900) (288,277) 186,415Non-controlling interests (184) (612) - -

Total comprehensive (expense)/income for the year (102,618) (43,512) (288,277) 186,415 Loss per ordinary share (sen): Basic 23 (8.00) (3.24)

fortheyearended31July2017STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME



fortheyearended31July2017

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359,195

38,160

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18,459

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3,742

461,086

872,149

792

872,941

Foreigncurrencytranslationdifferences

forforeignoperations

-

--

-(142)

--

(142)

-(142)

Netchangeinfairvalueofavailable-

for-salefinancialassets

-

--

-(1,197)

--

(1,197)

-(1,197)

Totalothercom

prehensiveexpense

-

--

-(1,339)

--

(1,339)

-(1,339)

Lossfortheyear

--

--

--

(41,561)(41,561)

(612)

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Issuanceofbonusshares

285,163

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--

--(247,003)

--

-IssuanceofRedeemableConvertible

UnsecuredIslamicDebtSecurities

(“RCUIDS”)(netoftax)

15.2

--

-30,341

54,965

--

85,306

-85,306

Equity-settledsharebasedpayments

-

--

--

448

-448

-448

DividendstoownersoftheCom

pany

24

--

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201

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644,358

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48,800

52,629

4,190

170,383

912,864

180

913,044


A

ttrib

utab

le t

o sh

areh

olde

rs o

f th

e G

roup

N

on d

istr

ibut

able

D

istrib

utab

le

Sha

re

Non

-

Sha

re

Sha

re

Trea

sury

W

arra

nt

Oth

er

optio

n Ret

aine

d

cont

rollin

g To

tal

Not

e ca

pita

l pr

emiu

m

shar

es

rese

rves

re

serv

es

rese

rves

ea

rnin

gs

Tota

l in

tere

sts

equi

ty

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

At

1 A

ugus

t 201

6

644,358

-(7,496)

48,800

52,629

4,190

170,383

912,864

180

913,044

Foreigncurrencytranslationdifferences

forforeignoperations

-

--

-(55)

--

(55)

-(55)

Netchangeinfairvalueofavailable-for-

salefinancialassets

--

--

598

--

598

-598

Totalothercom

prehensiveincome

-

--

-543

--

543

-543

Lossfortheyear

--

--

--(102,977)(102,977)

(184)(103,161)

Tota

l com

preh

ensi

ve e

xpen

se f

or t

he y

ear

-

--

-543

-(102,977)(102,434)

(184)(102,618)

Purchaseoftreasuryshares

-

-(3)

--

--

(3)

-(3)

Shareoptionsexercised

10,506

--

-(10,506)

--

--

-Equity-settledsharebasedpayments

-

--

--

449

-449

-449

Redem

ptionofconvertiblebonds

-

--

-353

--

353

-353

ExpiryofWarrants2012/2017

-

--

(18,459)

--

18,459

--

-DividendstoownersoftheCom

pany

24

--

--

--

(3,854)

(3,854)

-(3,854)

Tota

l con

trib

utio

n fr

om/(

dist

ribut

ion

to)

ow

ners

10,506

-(3)

(18,459)(10,153)

449

14,605

(3,055)

-(3,055)

At

31 J

uly

201

7

654,864

-(7,499)

30,341

43,019

4,639

82,011807,375

(4)

807,371


CO

NSO

LIDAT

ED S

TATEM

ENTS

OF

CH

AN

GES

IN

EQ

UIT

Y(C

ont’

d)


Note14


Att

ribut

able

to

shar

ehol

ders

of

the

Com

pany

N

on d

istr

ibut

able

D

istr

ibut

able

Sha

re

Sha

re

Sha

re

Trea

sury

W

arra

nt

Oth

er

optio

n Ret

aine

d To

tal

Not

e ca

pita

l pr

emiu

m

shar

es

rese

rves

re

serv

es

rese

rves

ea

rnin

gs

equi

ty

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

At

1 A

ugus

t 201

5

359,195

38,160

(7,496)

18,459

(353)

3,742

91,215

502,922

Profitandtotalcom

prehensiveincomefor

theyear

--

--

--

186,415

186,415

Issuanceofbonusshares

285,163

(38,160)

--

--(247,003)

-IssuanceofRCUIDS(netoftax)

15.2

--

-30,341

54,965

--

85,306

Equity-settledsharebasedpayments

-

--

--

448

-448

DividendstoownersoftheCom

pany

24

--

--

--

(2,139)

(2,139)

Tota

l con

trib

utio

n fr

om/(

dist

ribut

ion

to)

ow

ners

285,163

(38,160)

-30,341

54,965

448

(249,142)

83,615

At

31 J

uly

201

6

644,358

-(7,496)

48,800

54,612

4,190

28,488

772,952

Lossandtotalcom

prehensiveexpensefor

theyear

--

--

--(288,277)(288,277)

Purchaseoftreasuryshares

-

-(3)

--

--

(3)

Shareoptionsexercised

10,506

--

-(10,506)

--

-Equity-settledsharebasedpayments

-

--

--

449

-449

Redem

ptionofconvertiblebonds

-

--

-353

--

353

ExpiryofWarrants2012/2017

-

--

(18,459)

--

18,459

-DividendstoownersoftheCom

pany

24

--

--

--

(3,854)

(3,854)

Tota

l con

trib

utio

n fr

om/(

dist

ribut

ion

to)

ow

ners

10,506

-(3)

(18,459)(10,153)

449

14,605

(3,055)

At

31 J

uly

201

7

654,864

-(7,499)

30,341

44,459

4,639

(245,184)

481,620



CO

MPA

NY S

TATE

MEN

TS O

F CH

AN

GES

IN E

QU

ITY

Note14


Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Cash flows from operating activities (Loss)/Profit before tax (74,821) (24,617) (287,689) 188,150 Adjustments for: Netunrealisedforeignexchangeloss/(gain) (1,744) 1,400 (1,558) 226 Allowancefordoubtfuldebts 2,194 634 - - Depreciationofproperty,plantandequipment 14,590 21,706 110 126 Depreciationofinvestmentproperties 158 159 1,315 1,315 Property,plantandequipmentwrittenoff 47 20 - - Financecost 30,255 31,722 12,868 13,676 Financeincome: Deposits (2,939) (1,988) (2,335) (1,636) Available-for-salefinancialassets (1,084) (787) - (10) Jointventure (28,997) (24,245) (28,997) (24,245) Subsidiary - - (1,205) (1,606) Netoverdueinterestincome (485) (355) - - Dividendsincome (33) (33) (6,360) (176,360) Gainondisposalofproperty,plantandequipment (6,803) (3,868) - - Chargearisingfromearlyredemptionofconvertiblesecuredbonds 9,457 - 9,457 - Lossondisposalofanassociate 2 - - - Loss/(Gain)ondisposalsofavailable-for-salefinancialassets 2 (103) - - Equity-settledsharebasedpayments 449 448 449 448 Reversalofprovisionfordiminutioninvalueofinventories - (4,835) - - Inventorieswrittenoff - 3,885 - - Write-downonslowmovinginventories 7,483 14,485 - - Impairmentlossoninvestmentinjointventure - - 304,372 - Shareoflossofequityaccountedinvestees,netoftax 215,322 99,223 - -

Operating profit before changes in working capital 163,053 112,851 427 84

Changesinworkingcapital: Inventories (76,337) 24,629 - - Tradeandotherreceivables 44,740 21,236 (434) (27) Tradeandotherpayables (34,971) (22,674) 1,292 25,753

Cash generated from operations 96,485 136,042 1,285 25,810 Interestpaid (34,867) (27,542) (17,962) (9,822) Netoverdueinterestincome 485 355 - - Incometaxpaid (24,731) (9,293) (4,000) (2,765)

Net cash generated from/(used in) operating activities 37,372 99,562 (20,677) 13,223

fortheyearended31July2017STATEMENTS OF CASH FLOWS


Group Company Note 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Cash flows from investing activities Proceedsfromwithdrawalofavailable-for-salefinancialassets 498 103 - 73 Dividendreceived 33 33 6,360 6,360 Proceedsfromdisposalofproperty,plantandequipment 10,940 4,539 - -Proceedsfromdisposalofanassociate 473 - - - Financeincome: Deposits 2,939 1,988 2,335 1,636Available-for-salefinancialassets 1,084 787 - 10Subsidiary - - 1,205 1,606 Purchaseofproperty,plantandequipment (14,419) (2,432) - - Additionstominingexplorationandevaluationassets (887) (893) - - Advancestojointventure–netofrepayment (25,659) (122,029) (25,705) (122,103)Advancesfromsubsidiaries - - 106,608 -Investmentinasubsidiary - - (100) -Investmentinavailable-for-salefinancialassets - (3,955) - -

Net cash (used in)/generated from investing activities (24,998) (121,859) 90,703 (112,418) Cash flows from financing activities Redemptionofconvertiblesecuredbonds (147,000) - (147,000) - (Repayment)/Drawdownofborrowings (19,413) 58,824 (41,892) 63,895 ProceedfromissuanceofRCUIDS - 142,582 - 142,582 Purchaseoftreasuryshares (3) - (3) - DividendspaidtoownersoftheCompany (3,854) (2,139) (3,854) (2,139)

Net cash (used in)/generated from financing activities (170,270) 199,267 (192,749) 204,338

Net (decrease)/increase in cash and cash equivalents (157,896) 176,970 (122,723) 105,143Effectofexchangeratechanges (246) (962) - -Cash and cash equivalents at beginning of year 241,492 65,484 127,199 22,056

Cash and cash equivalents at end of year 83,350 241,492 4,476 127,199

Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial positionamounts: Group Company Note 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Depositsplacedwithlicensedbanks 13 34,319 59,375 3,651 59,375Cashandbankbalances 13 49,031 182,117 825 67,824 83,350 241,492 4,476 127,199

Dividend income from subsidiaries

During the previous financial year, the dividend income from subsidiaries amounting toRM170,000,000were settled againstbalancesduetothesubsidiaries.

fortheyearended31July2017STATEMENTS OF CASH FLOWS(Cont’d)



HiapTeckVentureBerhadisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandislistedontheMainMarketofBursaMalaysiaSecuritiesBerhad.TheaddressoftheprincipalplaceofbusinessandregisteredofficeoftheCompanyisasfollows:

Registered office and principal place of businessLot6096,JalanHajiAbdulMananBatu5½,OffJalanMeru41050KlangSelangorDarulEhsan

TheconsolidatedfinancialstatementsoftheCompanyasatandforthefinancialyearended31July2017comprisetheCompanyanditssubsidiaries(togetherreferredtoasthe“Group”andindividuallyreferredtoas“Groupentities”)andtheGroup’sinterestinjointventureandassociate.ThefinancialstatementsoftheCompanyasatandforthefinancialyearended31July2017donotincludeotherentities.

TheCompanyisprincipallyengagedininvestmentandpropertyholdingsandtheprovisionofmanagementservices,whilsttheprincipalactivitiesofthesubsidiariesareasstatedinNote6tothefinancialstatements.Therehasbeennosignificantchangeinthenatureoftheseactivitiesduringthefinancialyear.

ThesefinancialstatementswereauthorisedforissuebytheBoardofDirectorson25October2017.

1. Basis of preparation

(a) Statement of compliance

ThefinancialstatementsoftheGroupandtheCompanyhavebeenpreparedinaccordancewithMalaysianFinancialReportingStandards(“MFRSs”),InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.

Thefollowingareaccountingstandards,amendmentsandinterpretationsoftheMFRSsthathavebeenissuedbytheMalaysianAccountingStandardsBoard(“MASB”)buthavenotbeenadoptedbytheGroupandtheCompany:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017 • AmendmentstoMFRS12,Disclosure of Interests in Other Entities (Annual Improvements to MFRS Standards 2014-2016 Cycle) • AmendmentstoMFRS107,Statement of Cash Flows – Disclosure Initiative • AmendmentstoMFRS112,Income Taxes – Recognition of Deferred Tax Assets for Unrealised Losses

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018 • MFRS9, Financial Instruments (2014) • MFRS15, Revenue from Contracts with Customers • ClarificationstoMFRS15,Revenue from Contracts with Customers • ICInterpretation22,Foreign Currency Transactions and Advance Consideration • AmendmentstoMFRS1,First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements to MFRS Standards 2014-2016 Cycle) • AmendmentstoMFRS2,Share-basedPayment– Classification and Measurement of Share-based Payment Transactions • AmendmentstoMFRS4,InsuranceContracts–Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts • AmendmentstoMFRS128, Investments in Associates and Joint Ventures (Annual Improvements to MFRS Standards 2014-2016 Cycle) • AmendmentstoMFRS140, Investment Property – Transfers of Investment Property

NOTES TO THE FINANCIAL STATEMENTS


NOTES TO THE FINANCIAL STATEMENTS (Cont’d)

1. Basis of preparation (Cont’d)

(a) Statement of compliance (Cont’d)

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2019 • MFRS16,Leases • ICInterpretation23, Uncertainty over Income Tax Treatments

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2021 • MFRS17,Insurance Contracts MFRSs, Interpretations and amendments effective for annual periods beginning on or after a date yet to be confirmed • Amendments toMFRS 10,Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The Group and the Company plan to apply the above mentioned accounting standards, amendments andinterpretations,whereapplicable:

• fromtheannualperiodbeginningon1August2017forthoseamendmentsthatareeffectiveforannualperiods beginningonorafter1January2017;

• from the annual period beginning on 1 August 2018 for those accounting standards, amendments and interpretationthatareeffectiveforannualperiodsbeginningonorafter1January2018;and

• fromtheannualperiodbeginningon1August2019 for theaccountingstandardand interpretation thatare effectiveforannualperiodsbeginningonorafter1January2019.

The initial application of the accounting standards, amendments or interpretations are not expected to have anymaterialfinancialimpactstothecurrentperiodandpriorperiodfinancialstatementsoftheGroupandtheCompanyexceptasmentionedbelow:

(i) MFRS 15, Revenue from Contracts with Customers

MFRS15replacestheguidanceinMFRS111,Construction Contracts, MFRS 118, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfers of Assets from Customers and IC Interpretation 131, Revenue - Barter Transactions Involving Advertising Services.

TheGroupandtheCompanyarecurrentlyassessingthefinancialimpactthatmayarisefromtheadoptionofMFRS15.

(ii) MFRS 9, Financial Instruments

MFRS9 replaces theguidance inMFRS139,Financial Instruments: Recognition and Measurementon theclassificationandmeasurementoffinancialassetsandfinancialliabilities,andonhedgeaccounting.


(iii) MFRS 16, Leases

MFRS16replacestheguidanceinMFRS117,Leases,ICInterpretation4,Determining whether an Arrangement contains a Lease, IC Interpretation 115, Operating Leases – Incentives and IC Interpretation 127, Evaluating the Substance of Transactions Involving the Legal Form of a Lease.


NOTES TO ThE fiNaNcial STaTEmENTS (cont’d)


1. Basis of preparation (Cont’d)

(a) Statement of compliance (Cont’d)

(iv) Amendments to MFRS 128, Investments in Associates and Joint Ventures (Annual Improvements to MFRS Standards 2014-2016 Cycle)

Theamendmentsclarifythatanentity,whichisaventurecapitalorganisation,oramutualfund,unittrustorsimilarentities,hasan investment-by-investmentchoicetomeasure its investments inassociatesand jointventuresatfairvalue.

TheGroupandtheCompanyarecurrentlyassessingthefinancialimpactthatmayarisefromtheadoptionoftheamendments.

(b) Basis of measurement

ThefinancialstatementshavebeenpreparedonthehistoricalcostbasisotherthanasdisclosedinNote2.

(c) Functional and presentation currency

ThesefinancialstatementsarepresentedinRinggitMalaysia(“RM”),whichistheCompany’sfunctionalcurrency.AllfinancialinformationispresentedinRMandhasbeenroundedtothenearestthousand,unlessotherwisestated.

(d) Use of estimates and judgements

ThepreparationofthefinancialstatementsinconformitywithMFRSsrequiresmanagementtomakejudgements,estimatesandassumptionsthataffect theapplicationofaccountingpoliciesandthereportedamountsofassets,liabilities,incomeandexpenses.Actualresultsmaydifferfromtheseestimates.

Estimatesandunderlyingassumptionsare reviewedonanongoingbasis.Revisions to accountingestimatesarerecognisedintheperiodinwhichtheestimatesarerevisedandinanyfutureperiodsaffected.

Therearenosignificantareasofestimationuncertaintyandcriticaljudgementsinapplyingaccountingpoliciesthathave significant effect on the amounts recognised in the financial statements other than those disclosed in thefollowingnotes:

• Note7-Investmentinjointventure• Note10-Recognitionofdeferredtaxassets• Note11-Tradeandotherreceivables• Note30-Contingentliabilities



2. Significant accounting policies

TheaccountingpoliciessetoutbelowhavebeenappliedconsistentlytotheperiodspresentedinthesefinancialstatementsandhavebeenappliedconsistentlybyGroupentities,unlessotherwisestated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiariesareentities,includingstructuredentities,controlledbytheCompany.Thefinancialstatementsofsubsidiariesareincludedintheconsolidatedfinancialstatementsfromthedatethatcontrolcommencesuntilthedatethatcontrolceases.

TheGroupcontrolsanentitywhenitisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspowerovertheentity.Potentialvotingrightsareconsideredwhenassessingcontrolonlywhensuchrightsaresubstantive.TheGroupalsoconsidersdefactopoweroveraninvesteewhen,despitenothavingthemajorityofvotingrights,ithasthecurrentabilitytodirecttheactivitiesoftheinvesteethatsignificantlyaffecttheinvestee’sreturn.

Investment in subsidiaries aremeasured in theCompany’s statementof financial position at cost less anyimpairmentlosses,unlesstheinvestmentisclassifiedasheldforsaleordistribution.Thecostofinvestmentincludestransactioncosts.

(ii) Business combinations

Businesscombinationsareaccountedforusingtheacquisitionmethodfromtheacquisitiondate,whichisthedateonwhichcontrolistransferredtotheGroup.

Fornewacquisitions,theGroupmeasuresthecostofgoodwillattheacquisitiondateas:

• thefairvalueoftheconsiderationtransferred;plus • therecognisedamountofanynon-controllinginterestsintheacquiree;plus • if thebusinesscombination isachieved instages, the fairvalueof theexistingequity interest in the acquiree;less • thenetrecognisedamount(generallyfairvalue)oftheidentifiableassetsacquiredandliabilitiesassumed.

Whentheexcessisnegative,abargainpurchasegainisrecognisedimmediatelyinprofitorloss.

For each business combination, theGroup electswhether itmeasures the non-controlling interests in theacquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at theacquisitiondate.

Transactioncosts,otherthanthoseassociatedwiththeissueofdebtorequitysecurities,thattheGroupincursinconnectionwithabusinesscombinationareexpensedasincurred.

(iii) Acquisition of non-controlling interests

TheGroupaccountsforallchangesinitsownershipinterestinasubsidiarythatdonotresultinalossofcontrolasequitytransactionsbetweentheGroupanditsnon-controllinginterestholders.AnydifferencebetweentheGroup’sshareofnetassetsbeforeandafterthechange,andanyconsiderationreceivedorpaid,isadjustedtooragainstGroupreserves.



2. Significant accounting policies (Cont’d)

(a) Basis of consolidation (Cont’d) (iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the formersubsidiary,anynon-controllinginterestsandtheothercomponentsofequityrelatedtotheformersubsidiaryfromtheconsolidatedstatementoffinancialposition.Anysurplusordeficitarisingonthe lossofcontrol isrecognised inprofitor loss. If theGroupretainsany interest in the formersubsidiary, thensuch interest ismeasuredatfairvalueatthedatethatcontrolislost.Subsequently,itisaccountedforasanequityaccountedinvesteeorasanavailable-for-salefinancialassetdependingonthelevelofinfluenceretained.

(v) Associates

Associatesareentities,includingunincorporatedentities,inwhichtheGrouphassignificantinfluence,butnotcontrol,overthefinancialandoperatingpolicies.

Investmentinassociateisaccountedforintheconsolidatedfinancialstatementsusingtheequitymethodlessanyimpairmentlosses,unlessitisclassifiedasheldforsaleordistribution.Thecostoftheinvestmentincludestransactioncosts.Theconsolidatedfinancialstatements include theGroup’sshareof theprofitor lossandothercomprehensiveincomeoftheassociate,afteradjustmentsifany,toaligntheaccountingpolicieswiththoseoftheGroup,fromthedatethatsignificantinfluencecommencesuntilthedatethatsignificantinfluencesceases.

WhentheGroup’sshareof lossesexceedsits interest inanassociate,thecarryingamountofthat interestincludinganylong-terminvestmentsisreducedtozero,andtherecognitionoffurtherlossesisdiscontinuedexcepttotheextentthattheGrouphasanobligationorhasmadepaymentsonbehalfoftheassociate.

WhentheGroupceasestohavesignificant influenceoveranassociate,anyretained interest intheformerassociateatthedatewhensignificantinfluenceislostismeasuredatfairvalueandthisamountisregardedastheinitialcarryingamountofafinancialasset.Thedifferencebetweenthefairvalueofanyretainedinterestplusproceedsfromtheinterestdisposedofandthecarryingamountoftheinvestmentatthedatewhenequitymethodisdiscontinuedisrecognisedinprofitorloss.

WhentheGroup’sinterestinanassociatedecreasesbutdoesnotresultinalossofsignificantinfluence,anyretained interest isnot remeasured.Anygainor lossarising fromthedecrease in interest is recognised inprofitorloss.Anygainsorlossespreviouslyrecognisedinothercomprehensiveincomearealsoreclassifiedproportionatelytoprofitorlossifthatgainorlosswouldberequiredtobereclassifiedtoprofitorlossonthedisposaloftherelatedassetsorliabilities.

InvestmentsinanassociatearemeasuredintheCompany’sstatementoffinancialpositionatcostlessanyimpairmentlosses,unlesstheinvestmentisclassifiedasheldforsaleordistribution.Thecostofinvestmentincludestransactioncosts.

(vi) Joint arrangements

JointarrangementsarearrangementsofwhichtheGrouphasjointcontrol,establishedbycontractsrequiringunanimousconsentfordecisionsabouttheactivitiesthatsignificantlyaffectthearrangements’returns.




(a) Basis of consolidation (Cont’d)

(vi) Joint arrangements (Cont’d)

Jointarrangementsareclassifiedandaccountedforasfollows:

• Ajointarrangementisclassifiedas“jointoperation”whentheGrouportheCompanyhasrightstotheassetsandobligationsforthe liabilitiesrelatingtoanarrangement.TheGroupandtheCompanyaccountforeachofitsshareoftheassets,liabilitiesandtransactions,includingitsshareofthoseheldorincurredjointlywiththeotherinvestors,inrelationtothejointoperation.

• A joint arrangement is classified as “joint venture” when the Group has rights only to the netassetsof thearrangements.TheGroupaccounts for its interest in the jointventureusing theequitymethod.InvestmentinjointventureismeasuredintheCompany’sstatementoffinancialpositionatcostlessanyimpairmentlosses,unlesstheinvestmentisclassifiedasheldforsaleordistribution.Thecostofinvestmentincludestransactioncosts.

(vii) Non-controlling interests

Non-controlling interestsat theendof thereportingperiod,beingtheequity inasubsidiarynotattributabledirectlyorindirectlytotheownersoftheCompany,arepresentedintheconsolidatedstatementoffinancialpositionandstatementofchangesinequitywithinequity,separatelyfromequityattributabletotheownersoftheCompany.Non-controllinginterestsintheresultsoftheGroupispresentedintheconsolidatedstatementofprofitorlossandothercomprehensiveincomeasanallocationoftheprofitorlossandtotalcomprehensiveincomefortheyearbetweennon-controllinginterestsandownersoftheCompany.

Lossesapplicable to thenon-controlling interests insubsidiaryareallocated to thenon-controlling interestsevenifdoingsocausesthenon-controllingintereststohaveadeficitbalance.

(viii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-grouptransactions,areeliminatedinpreparingtheconsolidatedfinancialstatements.

Unrealised gains arising from transactions with equity-accounted investees are eliminated against theinvestmenttotheextentoftheGroup’sinterestintheinvestees.Unrealisedlossesareeliminatedinthesamewayasunrealisedgains,butonlytotheextentthatthereisnoevidenceofimpairment.

(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreigncurrenciesaretranslatedtotherespectivefunctionalcurrenciesofGroupentitiesatexchangeratesatthedatesofthetransactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period areretranslatedtothefunctionalcurrencyattheexchangerateatthatdate.

Non-monetaryassetsandliabilitiesdenominatedinforeigncurrenciesthataremeasuredathistoricalcostaretranslatedusingtheexchangerateasatthedatesoftheinitialtransactions.Non-monetaryitemsdenominatedinforeigncurrenciesmeasuredatfairvaluearetranslatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.

Foreigncurrencydifferencesarisingon retranslationare recognised inprofitor loss,except fordifferencesarisingontheretranslationofavailable-for-saleequity instrumentsorafinancial instrumentdesignatedasahedgeofcurrencyrisk,whicharerecognisedinothercomprehensiveincome.




(b) Foreign currency (Cont’d) (i) Foreign currency transactions (Cont’d)

Intheconsolidatedfinancialstatements,whensettlementofamonetaryitemreceivablefromorpayabletoaforeignoperationisneitherplannednorlikelytooccurintheforeseeablefuture,foreignexchangegainsandlossesarisingfromsuchamonetaryitemareconsideredtoformpartofanetinvestmentinaforeignoperationand are recognised in other comprehensive income, and are presented in the foreign currency translationreserve(“FCTR”)inequity.

(ii) Operations denominated in functional currencies other than Ringgit Malaysia

TheassetsandliabilitiesofoperationsdenominatedinfunctionalcurrenciesotherthanRMaretranslatedtoRMatexchange ratesat theendof the reportingperiod.The incomeandexpensesof foreignoperations,excluding foreignoperations inhyperinflationaryeconomies,are translated toRMatexchange ratesat thedatesofthetransactions.

ForeigncurrencydifferencesarerecognisedinothercomprehensiveincomeandaccumulatedintheFCTRinequity.However, iftheoperationisanon-wholly-ownedsubsidiary,thentherelevantproportionateshareofthetranslationdifferenceisallocatedtothenon-controllinginterests.Whenaforeignoperationisdisposedofsuchthatcontrol,significantinfluenceorjointcontrolislost,thecumulativeamountintheFCTRrelatedtothatforeignoperationisreclassifiedtoprofitorlossaspartofthegainorlossondisposal.

When theGroupdisposes of only part of its interest in a subsidiary that includes a foreign operation, therelevant proportion of the cumulative amount is reattributed to non-controlling interests.When theGroupdisposesofonlypartof its investment inassociateor jointventure that includesa foreignoperationwhileretainingsignificantinfluenceorjointcontrol,therelevantproportionofthecumulativeamountisreclassifiedtoprofitorloss.

(c) Financial instruments

(i) Initial recognition and measurement

Afinancialassetorafinancialliabilityisrecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGrouportheCompanybecomesapartytothecontractualprovisionsoftheinstrument.

Afinancialinstrumentisrecognisedinitially,atitsfairvalueplus,inthecaseofafinancialinstrumentnotatfairvaluethroughprofitorloss,transactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialinstrument.

Anembeddedderivativeisrecognisedseparatelyfromthehostcontractandaccountedforasaderivativeif,andonlyif,itisnotcloselyrelatedtotheeconomiccharacteristicsandrisksofthehostcontractandthehostcontractisnotcategorisedatfairvaluethroughprofitorloss.Thehostcontract, intheeventanembeddedderivativeisrecognisedseparately,isaccountedforinaccordancewithpolicyapplicabletothenatureofthehostcontract.

(ii) Financial instrument categories and subsequent measurement

TheGroupandtheCompanycategorisefinancialinstrumentsasfollows:




(c) Financial instruments (Cont’d)

(ii) Financial instrument categories and subsequent measurement (Cont’d)

Financial assets

(a) Financial assets at fair value through profit or loss

Fairvaluethroughprofitorlosscategorycomprisesfinancialassetsthatareheldfortrading,includingderivatives(exceptforaderivativethat isafinancialguaranteecontractoradesignatedandeffectivehedging instrument) or financial assets that are specifically designated into this category upon initialrecognition.

Derivativesthatarelinkedtoandmustbesettledbydeliveryofunquotedequityinstrumentswhosefairvaluescannotbereliablymeasuredaremeasuredatcost.

Otherfinancialassetscategorisedasfairvaluethroughprofitorlossaresubsequentlymeasuredattheirfairvalueswiththegainorlossrecognisedinprofitorloss.

(b) Loans and receivables

Loansand receivablescategorycomprisesdebt instruments thatarenotquoted inanactivemarket.

Financial assets categorised as loans and receivables are subsequentlymeasured at amortised costusingtheeffectiveinterestmethod.

(c) Available-for-sale financial assets

Available-for-salecategorycomprisesinvestmentinequityanddebtsecuritiesinstrumentsthatarenotheldfortrading.

Investments in equity instruments that do not have a quotedmarket price in an activemarket andwhosefairvaluecannotbereliablymeasuredaremeasuredatcost.Otherfinancialassetscategorisedasavailable-for-salearesubsequentlymeasuredattheirfairvalueswiththegainorlossrecognisedinothercomprehensiveincome,exceptforimpairmentlosses,foreignexchangegainsandlossesarisingfrommonetary items and gains and losses of hedged items attributable to hedge risks of fair valuehedgeswhicharerecognisedinprofitorloss.Onderecognition,thecumulativegainorlossrecognisedinothercomprehensiveincomeisreclassifiedfromequityintoprofitorloss.Interestcalculatedforadebtinstrumentusingtheeffectiveinterestmethodisrecognisedinprofitorloss.

Allfinancialassets,exceptfor thosemeasuredat fairvaluethroughprofitor loss,aresubjecttoreviewforimpairment(seeNote2(j)(i)).

Financial liabilities

Allfinancialliabilitiesaresubsequentlymeasuredatamortisedcostotherthanthosecategorisedasfairvaluethroughprofitorloss.

Fair value throughprofit or loss category comprises financial liabilities that are held for trading, derivatives(exceptforaderivativethatisafinancialguaranteecontractoradesignatedandeffectivehedginginstrument)orfinancialliabilitiesthatarespecificallydesignatedintothiscategoryuponinitialrecognition.

Derivativesthatarelinkedtoandmustbesettledbydeliveryofequityinstrumentsthatdonothaveaquotedpriceinanactivemarketforidenticalinstrumentswhosefairvaluesotherwisecannotbereliablymeasuredaremeasuredatcost.




(c) Financial instruments (Cont’d)

(ii) Financial instrument categories and subsequent measurement (Cont’d)

Financial liabilities (Cont’d)

Otherfinancialliabilitiescategorisedasfairvaluethroughprofitorlossaresubsequentlymeasuredattheirfairvalueswiththegainorlossrecognisedinprofitorloss.

(iii) Financial guarantee contracts

Afinancialguaranteecontractisacontractthatrequirestheissuertomakespecifiedpaymentstoreimbursetheholderforalossitincursbecauseaspecifieddebtorfailstomakepaymentwhendueinaccordancewiththeoriginalormodifiedtermsofadebtinstrument.

Fairvaluearisingfromfinancialguaranteecontractsareclassifiedasdeferredincomeandisamortisedtoprofitorlossusingastraight-linemethodoverthecontractualperiodor,whenthereisnospecificcontractualperiod,recognisedinprofitorlossupondischargeoftheguarantee.Whensettlementofafinancialguaranteecontractbecomes probable, an estimate of the obligation ismade. If the carrying value of the financial guaranteecontractislowerthantheobligation,thecarryingvalueisadjustedtotheobligationamountandaccountedforasaprovision.

(iv) Derecognition

Afinancialassetorpartof it isderecognisedwhen,andonlywhenthecontractualrightstothecashflowsfromthefinancialassetexpireorcontroloftheassetisnotretainedorsubstantiallyalloftherisksandrewardsofownershipofthefinancialassetaretransferredtoanotherparty.Onderecognitionofafinancialasset,thedifferencebetweenthecarryingamountandthesumoftheconsiderationreceived(includinganynewassetobtainedlessanynewliabilityassumed)andanycumulativegainorlossthathadbeenrecognisedinequityisrecognisedinprofitorloss.

Afinancialliabilityorapartofitisderecognisedwhen,andonlywhen,theobligationspecifiedinthecontractisdischarged,cancelledorexpires.Onderecognitionofafinancialliability,thedifferencebetweenthecarryingamountofthefinancialliabilityextinguishedortransferredtoanotherpartyandtheconsiderationpaid,includinganynon-cashassetstransferredorliabilitiesassumed,isrecognisedinprofitorloss.

(d) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment aremeasured at cost less any accumulated depreciation and anyaccumulatedimpairmentlosses.

Cost includesexpenditures thataredirectlyattributable to theacquisitionof theassetandanyothercostsdirectlyattributabletobringingtheassettoworkingconditionforitsintendeduse,andthecostsofdismantlingandremovingtheitemsandrestoringthesiteonwhichtheyarelocated.Thecostofself-constructedassetsalsoincludesthecostofmaterialsanddirectlabour.Forqualifyingassets,borrowingcostsarecapitalisedinaccordancewiththeaccountingpolicyonborrowingcosts.

Thecostofproperty,plantandequipmentrecognisedasaresultofabusinesscombinationisbasedonfairvalueatacquisitiondate.Thefairvalueofpropertyistheestimatedamountforwhichapropertycouldbeexchangedbetween knowledgeablewilling parties in an arm’s length transaction after propermarketingwherein thepartieshadeachactedknowledgeably,prudentlyandwithoutcompulsion.Thefairvalueofotheritemsofplantandequipmentisbasedonthequotedmarketpricesforsimilaritemswhenavailableandreplacementcostwhenappropriate.




(d) Property, plant and equipment (Cont’d)

(i) Recognition and measurement (Cont’d)

Whensignificantpartsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyareaccountedforasseparateitems(majorcomponents)ofproperty,plantandequipment.

The gain or loss on disposal of an itemof property, plant and equipment is determined by comparing theproceedsfromdisposalwiththecarryingamountofproperty,plantandequipmentandisrecognisednetwithin“otheroperatingincome”and“otheroperatingexpenses”respectivelyinprofitorloss.

(ii) Subsequent costs

Thecostofreplacingacomponentofanitemofproperty,plantandequipmentisrecognisedinthecarryingamountoftheitemifitisprobablethatthefutureeconomicbenefitsembodiedwithinthepartwillflowtotheGrouportheCompany,anditscostcanbemeasuredreliably.Thecarryingamountofthereplacedcomponentisderecognisedtoprofitor loss.Thecostsoftheday-to-dayservicingofproperty,plantandequipmentarerecognisedinprofitorlossasincurred.

(iii) Depreciation

Depreciationisbasedonthecostofanassetlessitsresidualvalue.Significantcomponentsofindividualassetsareassessed,andifacomponenthasausefullifethatisdifferentfromtheremainderoftheasset,thenthatcomponentisdepreciatedseparately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of eachcomponentofanitemofproperty,plantandequipmentfromthedatethattheyareavailabletouse.LeasedassetsaredepreciatedovertheshorteroftheleasetermandtheirusefullivesunlessitisreasonablycertainthattheGroupwillobtainownershipbytheendoftheleaseterm.Freeholdlandisnotdepreciated.Property,plantandequipmentunderconstructionarenotdepreciateduntiltheassetsarereadyfortheirintendeduse.

Theestimatedusefullivesforthecurrentandcomparativeperiodsareasfollows:

• Leaseholdland 60years • Buildings 50years • Plantandmachinery 5-12years • Motorvehicles 5years • Otherassets 3-10years

Depreciationmethods,useful livesandresidualvaluesarereviewedattheendofthereportingperiod,andadjustedasappropriate.

(e) Leased assets

(i) Finance lease

Leases in terms of which the Group or the Company assumes substantially all the risks and rewards ofownershipareclassifiedasfinanceleases.Uponinitialrecognition,theleasedassetismeasuredatanamountequaltothelowerofitsfairvalueandthepresentvalueoftheminimumleasepayments.Subsequenttoinitialrecognition,theassetisaccountedforinaccordancewiththeaccountingpolicyapplicabletothatasset.




(e) Leased assets (Cont’d)

(i) Finance lease (Cont’d)

Minimumleasepaymentsmadeunderfinanceleasesareapportionedbetweenthefinanceexpenseandthereductionoftheoutstandingliability.Thefinanceexpenseisallocatedtoeachperiodduringtheleasetermsoastoproduceaconstantperiodicrateof interestontheremainingbalanceofthe liability.Contingent leasepaymentsareaccountedforbyrevisingtheminimumleasepaymentsovertheremainingtermoftheleasewhentheleaseadjustmentisconfirmed.

Leasehold landwhich in substance is a finance lease is classified asproperty, plant andequipment, or asinvestmentpropertyifheldtoearnrentalincomeorforcapitalappreciationorforboth.

(ii) Operating lease

Leases,wheretheGrouportheCompanydoesnotassumesubstantiallyalltherisksandrewardsofownershipareclassifiedasoperatingleasesand,exceptforpropertyinterestheldunderoperatinglease,theleasedassetsarenot recognisedon the statementof financial position.Property interestheldunder anoperating lease,whichisheldtoearnrentalincomeorforcapitalappreciationorforboth,isclassifiedasinvestmentpropertyandmeasuredusingfairvaluemodel.

Paymentsmadeunderoperatingleasesarerecognisedinprofitorlossonastraight-linebasisoverthetermofthe leaseunlessanothersystematicbasis ismorerepresentativeofthetimepattern inwhicheconomicbenefitsfromtheleasedassetareconsumed.Leaseincentivesreceivedarerecognisedinprofitorlossasanintegralpartofthetotalleaseexpense,overthetermofthelease.Contingentrentalsarechargedtoprofitorlossinthereportingperiodinwhichtheyareincurred.

Leaseholdlandwhichinsubstanceisanoperatingleaseisclassifiedasprepaidleasepayments.

(f) Exploration and evaluation of mineral resources

Exploration and evaluation costs, including the costs of acquiring licenses, are initially capitalised as intangibleexploration and evaluation assets (“E&E assets”) according to the nature of the assets acquired. The costs areaccumulatedincostcentresbyfieldorexplorationareapendingdeterminationoftechnicalfeasibilityandcommercialviability.

E&Eassetsthatareavailableforuseareamortisedovertheirestimatedusefullivesbasedontheunitofproductionmethodandrecognisedinprofitorlossuponthecommencementofcommercialproduction.

E&Eassetsareassessedfor impairmentifsufficientdataexiststodeterminetechnicalfeasibilityandcommercialviability,andfactsandcircumstancessuggestthatthecarryingamountexceedstherecoverableamount.

Thetechnicalfeasibilityandcommercialviabilityofextractingamineralresourceisconsideredtobedeterminablewhenprovenreservesaredeterminedtoexist.Areviewofeachexplorationlicenseorfieldiscarriedout,toascertainwhether proven reserves have been discovered. Upon determination of proven reserves, intangible E&E assetsattributabletothosereservesaretestedforimpairmentandthenreclassifiedfromE&Eassetstoaseparatecategorywithintangibleassets.

Expendituredeemedtobeunsuccessfulisrecognisedinprofitorlossimmediately.




(g) Investment properties

Investment properties at cost

Investmentpropertiesarepropertieswhichareownedtoearnrentalincomeorforcapitalappreciationorforboth,but not for sale in the ordinary course of business, use in the production or supply of goods or services or foradministrativepurposes.

Investmentpropertiesaremeasuredatcostlessaccumulateddepreciationandanyaccumulatedimpairmentlosses.Costincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheinvestmentproperty.

Freeholdlandhasanunlimitedusefullifeandthereforeisnotdepreciated.Leaseholdlandisdepreciatedovertheleasetermof60years.

Depreciationofbuildingsisprovidedforonastraight-linebasistowriteoffthecostofeachassettoitsresidualvalueovertheestimatedusefullifeof50years.

Aninvestmentpropertyisderecognisedonitsdisposal,orwhenitispermanentlywithdrawnfromuseandnofutureeconomicbenefitsareexpectedfromitsdisposal.Thedifferencebetweenthenetdisposalproceedsandthecarryingamountisrecognisedinprofitorlossintheperiodinwhichtheitemisderecognised.

(h) Inventories

Inventoriesaremeasuredatthelowerofcostandnetrealisablevalue.

The cost of inventories is calculated using the weighted averagemethod, and includes expenditure incurred inacquiringtheinventories,productionorconversioncostsandothercostsincurredinbringingthemtotheirexistinglocationandcondition. In thecaseofwork-in-progressandfinishedgoods, cost includesanappropriateshareofproductionoverheadsbasedonnormaloperatingcapacity.

Net realisablevalue is theestimatedsellingprice in theordinarycourseofbusiness, less theestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.

(i) Cash and cash equivalents

Cashandcashequivalentsconsistofcashonhand,balancesanddepositswithbanksandhighlyliquidinvestmentswhichhaveaninsignificantriskofchangesinvaluewithoriginalmaturitiesofthreemonthsorless,andareusedbytheGroupandtheCompanyinthemanagementoftheirshorttermcommitments.Forthepurposeofthestatementofcashflows,cashandcashequivalentsarepresentednetofbankoverdraftsandpledgeddeposits.

(j) Impairment

(i) Financial assets

All financial assets (except for investment in subsidiaries, investment in joint venture and investment inassociate) are assessed at each reporting datewhether there is any objective evidence of impairment asa resultofoneormoreeventshavingan impacton theestimated futurecashflowsof theasset.Lossesexpectedasaresultoffutureevents,nomatterhowlikely,arenotrecognised.

Foraninvestmentinanequityinstrument,asignificantorprolongeddeclineinthefairvaluebelowitscostisanobjectiveevidenceofimpairment.Ifanysuchobjectiveevidenceexists,thentheimpairmentlossofthefinancialassetisestimated.

An impairment loss in respect of loans and receivables is recognised in profit or loss and ismeasured asthedifferencebetween theasset’s carryingamount and thepresent valueofestimated future cashflowsdiscountedattheasset’soriginaleffectiveinterestrate.Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount.




(j) Impairment (Cont’d)

(i) Financial assets (Cont’d)

Animpairmentlossinrespectofavailable-for-salefinancialassetsisrecognisedinprofitorlossandismeasuredasthedifferencebetweentheasset’sacquisitioncost(netofanyprincipalrepaymentandamortisation)andtheasset’scurrentfairvalue,lessanyimpairmentlosspreviouslyrecognised.Whereadeclineinthefairvalueofanavailable-for-salefinancialassethasbeenrecognisedinothercomprehensiveincome,thecumulativelossinothercomprehensiveincomeisreclassifiedfromequitytoprofitorloss.

Animpairmentlossinrespectofunquotedequityinstrumentthatiscarriedatcostisrecognisedinprofitorlossandismeasuredasthedifferencebetweenthefinancialasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthecurrentmarketrateofreturnforasimilarfinancialasset.

Impairmentlossesrecognisedinprofitorlossforaninvestmentinanequityinstrumentclassifiedasavailable-for-saleisnotreversedthroughprofitorloss.

If, inasubsequentperiod,thefairvalueofadebtinstrumentincreasesandtheincreasecanbeobjectivelyrelatedtoaneventoccurringaftertheimpairmentlosswasrecognisedinprofitorloss,theimpairmentlossisreversed,totheextentthattheasset’scarryingamountdoesnotexceedwhatthecarryingamountwouldhavebeenhadtheimpairmentnotbeenrecognisedatthedatetheimpairmentisreversed.Theamountofthereversalisrecognisedinprofitorloss.

(ii) Other assets

Thecarryingamountsofotherassets(exceptforinventoriesanddeferredtaxassets)arereviewedattheendofeach reportingperiod todeterminewhether there isany indicationof impairment. Ifanysuch indicationexists,thentheasset’srecoverableamountisestimated.Forgoodwill,therecoverableamountisestimatedeachperiodatthesametime.

For thepurposeof impairment testing,assetsaregrouped together into thesmallestgroupofassets thatgeneratescashinflowsfromcontinuingusethatarelargelyindependentofthecashinflowsofotherassets(knownascash-generatingunit).Thegoodwillacquiredinabusinesscombination,forthepurposeofimpairmenttesting,isallocatedtoacash-generatingunitoragroupofcash-generatingunitsthatareexpectedtobenefitfromthesynergiesofthecombination.

Therecoverableamountofanassetorcash-generatingunitisthegreaterofitsvalueinuseanditsfairvalueless costs of disposal. In assessing value in use, the estimated future cash flows are discounted to theirpresentvalueusingadiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetorcash-generatingunit.

Animpairmentlossisrecognisedifthecarryingamountofanassetoritsrelatedcash-generatingunitexceedsitsestimatedrecoverableamount.

Impairmentlossesarerecognisedinprofitorloss.Impairmentlossesrecognisedinrespectofcash-generatingunitsareallocatedfirst toreducethecarryingamountofanygoodwillallocatedtothecash-generatingunit(oragroupofcash-generatingunits)andthentoreducethecarryingamountsoftheotherassetsinthecash-generatingunit(oragroupofcash-generatingunits)onaproratabasis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment lossesrecognisedinpriorperiodsareassessedattheendofeachreportingperiodforanyindicationsthatthelosshasdecreasedornolongerexists.Animpairmentlossisreversediftherehasbeenachangeintheestimatesused todetermine the recoverableamountsince the last impairment losswas recognised.An impairmentlossisreversedonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortisation,ifnoimpairmentlosshadbeenrecognised.Reversalsof impairment lossesarecreditedtoprofitor loss inthefinancialyear inwhichthereversalsarerecognised.




(k) Equity instruments

Instrumentsclassifiedasequityaremeasuredatcostoninitialrecognitionandarenotremeasuredsubsequently.

(i) Issue expenses

Costsdirectlyattributabletoissueofinstrumentsclassifiedasequityarerecognisedasadeductionfromequity.

(ii) Ordinary shares

Ordinarysharesareclassifiedasequity.

(iii) Repurchase, disposal and reissue of share capital

Whensharecapitalrecognisedasequityisrepurchased,theamountoftheconsiderationpaid,includingdirectlyattributablecosts,netofanytaxeffects,isrecognisedasadeductionfromequity.Repurchasedsharesthatarenotsubsequentlycancelledareclassifiedastreasurysharesinthestatementofchangesinequity.

Whentreasurysharesaresoldorreissuedsubsequently,thedifferencebetweenthesalesconsiderationnetofdirectlyattributablecostsandthecarryingamountofthetreasurysharesisrecognisedinequity.

(l) Compound financial instruments

Acompoundfinancialinstrumentisanon-derivativefinancialinstrumentthatcontainsbothaliabilityandanequitycomponent.

CompoundfinancialinstrumentsissuedbytheGroupcompriseredeemableconvertiblesecuredbondsandRCUIDSthatcanbeconvertedtosharecapitalattheoptionoftheholder,whenthenumberofsharestobeissueddoesnotvarywithchangesintheirfairvalue.

Theproceedsarefirstallocatedtotheliabilitycomponent,determinedbasedonthefairvalueofasimilarliabilitythatdoesnothaveaconversionfeatureorsimilarassociatedequitycomponent.Theresidualamountisallocatedastheequitycomponent.Anydirectlyattributabletransactioncostsareallocatedtotheliabilityandequitycomponentsinproportiontotheirinitialcarryingamounts.

Subsequenttoinitialrecognition,theliabilitycomponentofacompoundfinancialinstrumentismeasuredatamortisedcostusingtheeffectiveinterestmethod.Theequitycomponentofacompoundfinancialinstrumentisnotremeasuredsubsequenttoinitialrecognition.

Interest and lossesandgains relating to thefinancial liability are recognised inprofitor loss.Onconversion, thefinancialliabilityisreclassifiedtoequity,nogainorlossisrecognisedonconversion.

(m) Employee benefits

(i) Short-term employee benefits

Short-termemployeebenefitobligationsinrespectofsalaries,annualbonuses,paidannualleaveandsickleavearemeasuredonanundiscountedbasisandareexpensedastherelatedserviceisprovided.

AliabilityisrecognisedfortheamountexpectedtobepaidundershorttermcashbonusiftheGrouphasapresentlegalorconstructiveobligationtopaythisamountasaresultofpastserviceprovidedbytheemployeeandtheobligationcanbeestimatedreliably.

(ii) Defined contribution plans

TheGroup’scontributionstostatutorypensionfundsarechargedtoprofitorlossinthefinancialyeartowhichthey relate.Once thecontributionshavebeenpaid, theGrouphasno furtherpaymentobligations.Prepaidcontributionsarerecognisedasanassettotheextentthatacashrefundorareductioninfuturepaymentsisavailable.




(m) Employee benefits (Cont’d)

(iii) Share-based payment transactions

Thegrantdatefairvalueofshare-basedpaymentgrantedtoemployeesisrecognisedasanemployeeexpense,withcorrespondingincreaseinequity,overtheperiodthattheemployeesunconditionallybecomeentitledtotheawards.Theamountrecognisedasanexpenseisadjustedtoreflectthenumberofawardsforwhichtherelatedserviceandnon-marketvestingconditionsareexpectedtobemet,suchthattheamountultimatelyrecognisedasanexpenseisbasedonthenumberofawardsthatmeettherelatedserviceandnon-marketperformanceconditionsatthevestingdate.

For share-basedpayment awardswithnon-vestingconditions, thegrantdate fair valueof theshare-basedpaymentismeasuredtoreflectsuchconditionsandthereisnotrue-upfordifferencesbetweenexpectedandactualoutcomes.

The fair value of the employee share options is measured using a binomial lattice model. Measurementinputsincludesharepriceonmeasurementdate,exercisepriceoftheinstrument,expectedvolatility(basedonweightedaveragehistoricvolatilityadjustedforchangesexpectedduetopubliclyavailable information),weightedaverageexpectedlifeoftheinstruments(basedonhistoricalexperienceandgeneraloptionholderbehaviour),expecteddividends,andtherisk-freeinterestrate(basedongovernmentbonds).Serviceandnon-market performance conditions attached to the transactions are not taken into account in determining fairvalue.

(n) Provisions

Aprovision is recognised if, as a result of apastevent, theGrouphasapresent legal or constructiveobligationthatcanbeestimatedreliably,anditisprobablethatanoutflowofeconomicbenefitswillberequiredtosettletheobligation.Provisionsaredeterminedbydiscountingtheexpectedfuturecashflowsatapre-taxratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheliability.Theunwindingofthediscountisrecognisedasfinancecost.

Contingent liabilities

Whereitisnotprobablethatanoutflowofeconomicbenefitswillberequired,ortheamountcannotbeestimatedreliably,theobligationisdisclosedasacontingentliability,unlesstheprobabilityofoutflowofeconomicbenefitsisremote.Possibleobligations,whoseexistencewillonlybeconfirmedbytheoccurrenceornon-occurrenceofoneormorefutureevents,arealsodisclosedascontingentliabilitiesunlesstheprobabilityofoutflowofeconomicbenefitsisremote.

(o) Revenue and other income

(i) Goods sold

Revenuefromthesaleofgoodsinthecourseofordinaryactivitiesismeasuredatfairvalueoftheconsiderationreceivedorreceivable,netofreturnsandallowances,tradediscount,volumerebatesandsalestaxes.

Revenueisrecognisedwhenpersuasiveevidenceexists,thatthesignificantrisksandrewardsofownershiphavebeentransferredtothecustomer, recoveryoftheconsideration isprobable, theassociatedcostsandpossiblereturnofgoodscanbeestimatedreliably,andthereisnocontinuingmanagementinvolvementwiththegoods,andtheamountofrevenuecanbemeasuredreliably.Ifitisprobablethatdiscountswillbegrantedandtheamountcanbemeasuredreliably,thenthediscountisrecognisedasareductionofrevenueasthesalesarerecognised.




(o) Revenue and other income (Cont’d)

(ii) Service income

Revenueisrecognisedwhentheserviceshavebeenperformed.

(iii) Dividend income

DividendincomeisrecognisedinprofitorlossonthedatethattheGroup’sortheCompany’srighttoreceivepaymentisestablished.

(iv) Interest income

Interest income is recognisedas it accruesusing theeffective interestmethod inprofitor lossexcept forinterestincomearisingfromtemporaryinvestmentofborrowingstakenspecificallyforthepurposeofobtainingaqualifyingassetwhichisaccountedforinaccordancewiththeaccountingpolicyonborrowingcosts.

(v) Rental income

Rental incomerelated to rentalofpropertiesandscaffoldingsare recognisedover theperiodof tenancyorusage,asappropriate.Rentalincomefrominvestmentpropertyisrecognisedinprofitorlossonastraight-linebasisoverthetermofthelease.

(vi) Management fees

Managementfeesarerecognisedwhenservicesarerendered.

(p) Borrowing costs

Borrowingcoststhatarenotdirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetarerecognisedinprofitorlossusingtheeffectiveinterestmethod.

Borrowingcostsdirectlyattributable to theacquisition, constructionorproductionofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,arecapitalisedaspartofthecostofthoseassets.

Thecapitalisationofborrowingcostsaspartofthecostofaqualifyingassetcommenceswhenexpenditurefortheassetisbeingincurred,borrowingcostsarebeingincurredandactivitiesthatarenecessarytopreparetheassetforitsintendeduseorsaleareinprogress.Capitalisationofborrowingcostsissuspendedorceaseswhensubstantiallyalltheactivitiesnecessarytopreparethequalifyingassetforitsintendeduseorsaleareinterruptedorcompleted.

Investmentincomeearnedonthetemporaryinvestmentofspecificborrowingspendingtheirexpenditureonqualifyingassetsisdeductedfromtheborrowingcostseligibleforcapitalisation.

(q) Income tax

Income taxexpensecomprisescurrentanddeferred tax.Current taxanddeferred taxare recognised inprofitorlossexcept to theextent that it relates toabusinesscombinationor itemsrecogniseddirectly inequityorothercomprehensiveincome.

Current tax is theexpected taxpayableor receivableon the taxable incomeor loss for theyear, using tax ratesenactedorsubstantivelyenactedbytheendofthereportingperiod,andanyadjustmenttotaxpayableinrespectofpreviousfinancialyears.




(q) Income tax (Cont’d)

Deferredtaxisrecognisedusingtheliabilitymethod,providingfortemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesinthestatementoffinancialpositionandtheirtaxbases.Deferredtaxisnotrecognisedforthefollowingtemporarydifferences:theinitialrecognitionofgoodwill,theinitialrecognitionofassetsandliabilitiesinatransactionthatisnotabusinesscombinationandthataffectsneitheraccountingnortaxableprofitorloss.Deferredtaxismeasuredatthetaxratesthatareexpectedtobeappliedtothetemporarydifferenceswhentheyreverse,basedonthelawsthathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.

Deferredtaxassetsandliabilitiesareoffsetifthereisalegallyenforceablerighttooffsetcurrenttaxassetsandliabilities,andtheyrelatetoincometaxesleviedbythesametaxauthorityonthesametaxableentity,orondifferenttaxentities,buttheyintendtosettlecurrenttaxassetsandliabilitiesonanetbasisortheirtaxassetsandliabilitieswillberealisedsimultaneously.

Adeferredtaxassetisrecognisedtotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichthetemporarydifferencecanbeutilised.Deferredtaxassetsarereviewedattheendofeachreportingperiodandarereducedtotheextentthatitisnolongerprobablethattherelatedtaxbenefitwillberealised.

Unutilisedreinvestmentallowanceandinvestmenttaxallowance,beingtaxincentivethatisnotataxbaseofanasset,isrecognisedasadeferredtaxassettotheextentthatitisprobablethatthefuturetaxableprofitswillbeavailableagainstwhichtheunutilisedtaxincentivecanbeutilised.

(r) Earnings per ordinary share

TheGrouppresentsbasicanddilutedearningspersharedataforitsordinaryshares(“EPS”).

BasicEPSiscalculatedbydividingtheprofitorlossattributabletoordinaryshareholdersoftheCompanybytheweightedaveragenumberofordinarysharesoutstandingduringtheperiod,adjustedforownsharesheld.

DilutedEPSisdeterminedbyadjustingtheprofitorlossattributabletoordinaryshareholdersandtheweightedaveragenumberofordinarysharesoutstanding,adjusted forownsharesheld, for theeffectsofalldilutivepotentialordinaryshares,whichcomprisewarrants,ESOS,redeemableconvertiblesecuredbondsandRCUIDS.

(s) Operating segments

Anoperatingsegment is acomponentof theGroup thatengages inbusinessactivities fromwhich itmayearn revenues and incur expenses, including revenues and expenses that relate to transactions with anyof theGroup’sothercomponents.Operatingsegment resultsare reviewed regularlyby thechiefoperatingdecisionmaker,whichinthiscaseistheExecutiveDirectorandGroupOperationDirectoroftheGroup,tomakedecisionsaboutresourcestobeallocatedtothesegmentandtoassessitsperformance,andforwhichdiscretefinancialinformationisavailable.

(t) Fair value measurement

Fairvalueofanassetoraliability,exceptforshare-basedpaymentandleasetransactions,isdeterminedasthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Themeasurementassumesthatthetransactiontoselltheassetortransfertheliabilitytakesplaceeitherintheprincipalmarketorintheabsenceofaprincipalmarket,inthemostadvantageousmarket.

Fornon-financialasset,thefairvaluemeasurementtakesintoaccountamarketparticipant’sabilitytogenerateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanothermarketparticipantthatwouldusetheassetinitshighestandbestuse.




(t) Fair value measurement (Cont’d)

(t) Fair value measurement (cont’d)

Whenmeasuringthefairvalueofanassetorliability,theGroupusesobservablemarketdataasfaraspossible.Fairvaluesarecategorisedintodifferentlevelsinafairvaluehierarchybasedontheinputsusedinthevaluationtechniqueasfollows:

Level1: quotedprices (unadjusted) inactivemarkets for identicalassetsor liabilities that theGroupcanaccessatthemeasurementdate.

Level2: inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectlyorindirectly.

Level3: unobservableinputsfortheassetsorliability.

TheGrouprecognisestransfersbetweenlevelsofthefairvaluehierarchyasofthedateoftheeventorchangeincircumstancesthatcausedthetransfers.


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Cos

t

At1August2015

76,417139,496

1,070

206,134

4,267

6,709

61,089495,182

Additions

-

--

1,103

761

-568

2,432

Disposals

--

--

-(321)

(3,826)

(4,147)

Writtenoff

--

-(1,430)

--

(291)

(1,721)

Transfers

-

361

-2,352

(2,808)

--

(95)

Effectofmovem

entinexchangerates

--

-10

-10

1,484

1,504

At31July2016/1August2016

76,417139,857

1,070

208,169

2,220

6,398

59,024493,155

Additions

-

784

-6,699

2,155

-4,781

14,419

Disposals

--

--

-(199)

(18,931)(19,130)

Writtenoff

--

--

--

(306)

(306)

Transfers

-

420

-1,143

(1,573)

--

(10)

Effectofmovem

entinexchangerates

--

-8

-6

591

605

At31July2017

76,417141,061

1,070

216,019

2,802

6,205

45,159488,733

3.

Prop

erty

, pl

ant

and

equi

pmen

t

NO

TES

TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS(C

ont’

d)


3.

Prop

erty

, pl

ant

and

equi

pmen

t (C

ont’

d)

Free

hold

Leas

ehol

d Pl

ant an

d C

apita

l-in

Mot

or

Oth

er

G

roup

land

B

uild

ings

la

nd

mac

hine

ry

pro

gres

s ve

hicl

es

asse

ts

Tota

l

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

Acc

umul

ated

dep

reci

atio

n

At1August2015

-

26,885

277

147,299

-4,748

40,259219,468

Chargefortheyear

-

2,847

18

10,550

-690

7,601

21,706

Disposals

--

--

-(321)

(3,155)

(3,476)

Writtenoff

--

-(1,430)

--

(271)

(1,701)

Effectofmovem

entinexchangerates

--

-6

-8

658

672


-29,732

295

156,425

-5,125

45,092236,669

Chargefortheyear

-

2,853

18

5,417

-577

5,725

14,590

Disposals

--

--

-(199)

(14,794)(14,993)

Writtenoff

--

--

--

(259)

(259)

Effectofmovem

entinexchangerates

--

-5

-6

357

368

At31July2017

-32,585

313

161,847

-5,509

36,121236,375

Car

ryin

g am

ount

s

At1August2015

76,417112,611

793

58,835

4,267

1,961

20,830275,714


76,417110,125

775

51,744

2,220

1,273

13,932256,486

At31July2017

76,417108,476

757

54,172

2,802

696

9,038

252,358

OtherassetsoftheGroupcom

priseequipm

entforhire,officerenovations,furnitureandfittings,heavyequipm

ent,officeequipment,tools,computer

software,electricalinstallation,forklift,diesandjigsandcontainers.

NO

TES

TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS(C

ont’

d)



3. Property, plant and equipment (Cont’d)

Motor Office vehicles Renovation equipment Total Company RM’000 RM’000 RM’000 RM’000

Cost At1August2015/31July2016/31July2017 424 657 134 1,215 Accumulated depreciation At1August2015 424 398 65 887Chargefortheyear - 99 27 126

At31July2016/1August2016 424 497 92 1,013Chargefortheyear - 83 27 110

At31July2017 424 580 119 1,123 Carrying amounts At1August2015 - 259 69 328

At31July2016/1August2016 - 160 42 202

At31July2017 - 77 15 92

Security

At31July2016,theredeemableconvertiblesecuredbonds(“theBonds”)weresecuredbyafirstlegalchargeoverpropertyofasubsidiarywithcarryingamountofRM65,697,000andthelandandbuildingsoftheCompanywithcarryingamountofRM99,420,000havebeenfullydischargedin2017(seeNote5).TheBondswerefullyredeemedduringthefinancialyear(seeNote15.1).

4. Mining exploration and evaluation assets

Group RM’000

At1August2015 18,704Additions 893

At31July2016/1August2016 19,597Additions 887

At31July2017 20,484



5. Investment properties

Leasehold Freehold land land Buildings Total Group RM’000 RM’000 RM’000 RM’000

Cost At1August2015/31July2016/31July2017 3,950 485 6,429 10,864

Accumulated depreciation At1August2015 1,540 - 1,689 3,229 Chargefortheyear 54 - 105 159

At31July2016/1August2016 1,594 - 1,794 3,388 Chargefortheyear 54 - 104 158 At31July2017 1,648 - 1,898 3,546 Carrying amounts At1August2015 2,410 485 4,740 7,635

At31July2016/1August2016 2,356 485 4,635 7,476

At31July2017 2,302 485 4,531 7,318

Freehold land Buildings Total Company RM’000 RM’000 RM’000

Cost At1August2015/31July2016/31July2017 48,062 65,740 113,802 Accumulated depreciation At1August2015 - 13,067 13,067 Chargefortheyear - 1,315 1,315

At31July2016/1August2016 - 14,382 14,382 Chargefortheyear - 1,315 1,315

At31July2017 - 15,697 15,697

Carrying amounts At1August2015 48,062 52,673 100,735

At31July2016/1August2016 48,062 51,358 99,420

At31July2017 48,062 50,043 98,105

InvestmentpropertiesoftheGroupcomprisealeaseholdlandwhichisbeingleasedtothirdparty.TheestimatedfairvalueofinvestmentpropertiesoftheGroupandoftheCompanyareRM14,150,000andRM196,500,000(2016:RM10,600,000andRM144,240,000)respectively.Investmentpropertiesarestatedatcostandarenotrevalued.



5. Investment properties (Cont’d) Thefollowingarerecognisedinprofitorlossinrespectofinvestmentproperties:


Rentalincome 774 998 7,268 7,992 Directoperatingexpenses: - incomegenerating investmentproperties (158) (159) (1,315) (1,315)

Fairvalueofinvestmentpropertiesarecategorisedasfollows:

Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000

2017 Group Land - 7,600 - 7,600 Buildings - 6,550 - 6,550

- 14,150 - 14,150 Company Land - 121,500 - 121,500 Buildings - 75,000 - 75,000

- 196,500 - 196,500

Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000

2016 Group Land - - 2,880 2,880 Buildings - - 7,720 7,720

- - 10,600 10,600 Company Land - - 68,870 68,870 Buildings - - 75,370 75,370

- - 144,240 144,240



5. Investment properties (Cont’d)

Policy on transfer between levels

Thefairvalueofanassettobetransferredbetweenlevelsisdeterminedasofthedateoftheeventorchangeincircumstancesthatcausedthetransfer.

Level 1 fair value

Level1fairvalueisderivedfromquotedprices(unadjusted)inactivemarketsforidenticalinvestmentpropertiesthattheentitycanaccessatthemeasurementdate.

Level 2 fair value

Level2fairvalue isestimatedusing inputsotherthanquotedprices includedwithinLevel1thatareobservablefortheinvestmentproperty,eitherdirectlyorindirectly.

Level2fairvaluesoflandandbuildingshavebeengenerallyderivedusingthesalescomparisonapproach.Salespriceofcomparableproperties in closeproximity areadjusted fordifferences in keyattributessuchasproperty size.Themostsignificantinputintothisvaluationapproachispricepersquarefootofcomparableproperties.

Transfer between Level 1 and 2 fair values

TherehasbeennotransferbetweenLevel1and2fairvaluesduringthefinancialyear(2016:notransferineitherdirections).

Level 3 fair value

Level3fairvalueisestimatedusingunobservableinputsfortheinvestmentproperty.

6. Investment in subsidiaries

Company 2017 2016 RM’000 RM’000 Atcost: UnquotedsharesinMalaysia 94,070 93,970

Detailsofthesubsidiariesareasfollows:

Effective Country of ownership Name of subsidiary incorporation Principal activities interest 2017 2016 % %

HiapTeckHardware Malaysia Importer,exporterandgeneraldealerofsteel 100 100 Sdn.Bhd. products,hardwareandbuildingmaterials TiekHongHardware Malaysia Dormant 100 100 (B’worth)Sdn.Bhd. AlpinePipeManufacturing Malaysia Manufacturingandsellingofpipes,hollow 100 100 Sdn.Bhd. sectionsandothersteelproducts



6. Investment in subsidiaries (Cont’d)

Detailsofthesubsidiariesareasfollows:(Cont’d)

Effective Country of ownership Name of subsidiary incorporation Principal activities interest 2017 2016 % %

BriliantDecadeTransport Malaysia Provisionoftransportationservices 100 100 AgencySdn.Bhd. HuatracoScaffold Malaysia Manufacturing,sellingandrentingof 100 100 Sdn.Bhd. scaffoldingequipmentandrangeof steelproducts HiapTeckResources Malaysia Dormant 100 100 Sdn.Bhd. NexusPacificProperty Malaysia Dormant 100 - Sdn.Bhd.

Subsidiary of Hiap Teck Hardware Sdn. Bhd.

NexusPacificProperty Malaysia Dormant - 100 Sdn.Bhd. Subsidiary of Hiap Teck Resources Sdn. Bhd. VistaMining Malaysia Exploring,contractingandactivitiesrelatedto 55 55 Sdn.Bhd. themining,processingandsaleofironore Subsidiaries of Huatraco Scaffold Sdn. Bhd. HuatracoContracts Malaysia Dormant 100 100 Sdn.Bhd. HuatracoInvestment Singapore Investmentholding 100 100 Pte.Ltd.# Subsidiary of Huatraco Investment Pte. Ltd. HuatracoSingapore Singapore Scaffoldingworksandwholesaleofindustrial, 100 100 Pte.Ltd.# constructionandrelatedmachineryand equipment

#AuditedbyafirmotherthanKPMGPLT



7. Investment in joint venture

Group Company 2017 2016 2017 2016 Note RM’000 RM’000 RM’000 RM’000

UnquotedsharesinMalaysia atcost 275,798 275,798 275,798 275,798 Shareofpost-acquisitionreserves (220,798) (165,641) - - Less:Impairmentloss 7.1 (55,000) (55,000) (275,798) (55,000) - 55,157 - 220,798

Detailsofthejointventureareasfollows:

Effective Country of ownership Name of entity incorporation Principal activities interest 2017 2016 % %

EasternSteel Malaysia Manufacturing,sellinganddealing 55 55 Sdn.Bhd. inarangeofsteelproducts usingblastfurnaceplant

On 15March 2012, theCompany entered into the Shareholders’ Agreementwith the shareholders of a joint venture,EasternSteelSdn.Bhd.(“ESSB”),namelyOrientSteelInvestmentPte.Ltd.(“OrientSteel”)andChinacoInvestmentPte.Ltd.(“Chinaco”).Theagreementsetouttherightsandobligationsandtoregulatetheshareholders’relationshipofthethreepartiesinrespectofdealingwithESSB.

TheagreementgivestheCompanyandOrientSteeljointcontroloverESSBandhence,ESSBisconsideredasajointventureoftheCompany.

ThefollowingtablessummarisethefinancialinformationofEasternSteelSdn.Bhd.ThetablesalsoreconcilethesummarisedfinancialinformationtothecarryingamountoftheGroup’sinterestinEasternSteelSdn.Bhd.,whichisaccountedforusingtheequitymethod.

2017 2016 RM’000 RM’000 Group Summarised financial information As at 31 July Non-currentassets 1,049,066 1,314,703 Currentassets 48,662 66,653 Non-currentliabilities (668,628) (593,594) Currentliabilities (710,686) (677,853) Net(liabilities)/assets (281,586) 109,909 Year ended 31 July Loss and total comprehensive expense for the year (391,494) (180,399)



7. Investment in joint venture (Cont’d)

2017 2016 RM’000 RM’000

Summarised financial information As at 31 July (Cont’d) Includedinthetotalcomprehensiveincome/(expense): Interestincome 48 107 Interestexpense (64,894) (59,091) Incometaxcredit 410 52 Reconciliation of net assets to carrying amount As at 31 July Group’sshareofnetassets(netofimpairmentloss) - 55,157 Group’s share of results Year ended 31 July Group’sshareoflossandtotalcomprehensive expensefortheyear (215,322) (99,223)

7.1 Impairment loss

Impairment loss recognised by the joint venture

Inviewofthedepressedmarketpricesandsoftdemandofsteelslabsandtheincreasedvolatilityofforeignexchangerates,thejointventurehasceaseditstrialoperationinthepreviousfinancialyeartominimiselosses.Accordingly,themanagementofthejointventurehasprepareddiscountedcashflowprojectionstoassesstherecoverableamountofthecapitalinprogress.

Therecoverableamountwasbasedonthevalue inuseofthecapital inprogress,determinedbydiscountingthefuturecashflowsexpectedtobegeneratedfromthecapitalinprogress.ThecarryingamountofthecapitalinprogressamountingtoRM1,310.26millionwasdeterminedtobehigherthanitsrecoverableamountofRM1,044.11millionandanimpairmentlossofRM266.15million(2016:nil)wasrecognisedinthecapitalinprogressofthejointventure.

Cashflowprojectionsused in thiscalculationwerebasedon twoyearprojectionsapprovedby themanagementofthejointventure.Themanagementplanstocommenceproductioninthenextfinancialyearwiththeestimatedproductionvolumeat65%ofthecapacityinthefirstyearand100%inthesecondyearuntiltheendoftheplant’sestimatedusefullifeof25years.

Keyassumptionsusedinthevalueinusecalculationforthecapitalinprogressduringthecurrentfinancialyearincludepost-taxdiscountrateof9.0%(2016:7.5%)basedonanindustryaverageweightedaveragecostofcapitalandnochangesinthestructureofsharecapitalandshareholders’loansinthejointventure.

TheimpairmentlosswassubsequentlyrecognisedintheGroupthroughtheshareoflossinthejointventureusingtheequitymethodandrecognisedintheinvestmentinthejointventureandamountduefromthejointventure(seeNote11).

The values assigned to the key assumptions representmanagement’s assessment of future trends in the steelindustryandarebasedonbothexternalandinternalsources(historicaldata).Followinganimpairmentinthecapitalinprogressinthejointventure,anyadversechangeinakeyassumptionmayresultinafurtherimpairmentloss.



7. Investment in joint venture (Cont’d)

7.1 Impairment loss (Cont’d)

Impairment loss recognised by the joint venture (Cont’d)

Theaboveestimatesareparticularlysensitiveinthefollowingareas:

• Anincreaseof0.5percentagepointinthediscountratewouldhaveincreasedtheshareoflossrecognisedby RM25.9million;and• ResumptionofproductiondeferredbyayearwouldhaveincreasedtheshareoflossrecognisedbyRM50.6 million,underthebasecasescenariowhichappliesapost-taxdiscountrateof8.5%.

Impairment loss recognised at Group level

AstherecoverableamountoftheinvestmentinandamountduefromthejointventurebasedonthefairvaluelesscostsofdisposalestimatedusingtheincomeapproachishigherthantheircarryingamountintheGrouplevelafterapplyingtheequitymethod,additionalimpairmentlossisthereforenotnecessary.

Impairment loss recognised at Company level Therecoverableamountwasbasedonthefairvaluelesscostsofdisposalestimatedusingtheincomeapproach.ThecarryingamountofthelongterminterestsinthejointventureamountingtoRM802.51millionwasdeterminedtobehigherthanitsrecoverableamountofRM498.14million,andanimpairmentlossofRM304.37million(2016:nil)wasrecognisedintheinvestmentinthejointventureandamountduefromthejointventure(seeNote11)intheseparatefinancialstatementsoftheCompany.

8. Investment in associate Group 2017 2016 RM’000 RM’000 UnquotedsharesinMalaysiaatcost - 480 Shareofpost-acquisitionreserves - (5)

- 475

Detailsoftheassociateareasfollows:

Effective Country of ownership Name of entity incorporation Principal activities interest 2017 2016 % %

PowerbexScaffold Malaysia Dormant - 48 Sdn.Bhd. (formerlyknownas HuatracoGESScaffold Sdn.Bhd.)(“PSSB”)

TheGroup,viaitswholly-ownedsubsidiary,HuatracoScaffoldSdn.Bhd.,hadon23December2014subscribedfor480,000newordinarysharesofRM1.00eachatparinPSSBrepresenting48%oftheenlargedissuedandpaidupsharecapitalofPSSB.



8. Investment in associate (Cont’d)

Thefollowingarethesummarisedfinancialinformationoftheassociate. 2017 2016 RM’000 RM’000 As at 31 July

Totalassets - 996Totalliabilities - (6)

Netassets - 990

Group’sshareofnetassets - 475 As at 31 July

Netloss - (8)

Group’sshareofnetloss - (4)

On 10 October 2016, Huatraco Scaffold Sdn. Bhd. has entered into an agreement with Optimal Credential HoldingsSdn.Bhd.inrelationtothedisposalof480,000ordinarysharesofRM1.00each,representing48%equityinterestinPSSBforacashconsiderationofRM472,800,resultedinalossofRM2,185whichwasrecognisedinprofitorloss(refertoNote21).Subsequenttothedisposal,PSSBceasedtobeanassociateoftheGroup.

9. Available-for-sale financial assets

2017 2016 Market Market value of value of Carrying quoted Carrying quoted amount investments amount investments RM’000 RM’000 RM’000 RM’000

Group Non-current Clubmembership,unquoted 140 - 140 - Equityinstruments,quotedin Malaysia 1,367 1,367 769 769 1,507 909

Current Unittrustfundoflicensed financialinstitutionwithin Malaysia 4,691 4,691 5,189 5,189 6,198 6,098



10. Deferred tax assets/(liabilities)

Recognised deferred tax assets/(liabilities)

Deferredtaxassetsandliabilitiesareattributabletothefollowing:

Assets Liabilities Net 2017 2016 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group Property,plantand equipment - - (18,763) (19,179) (18,763) (19,179)Investmentproperties - - (131) (133) (131) (133)Otherborrowings - 3,817 - (6,644) - (2,827)Otherpayables 8,116 6,770 - - 8,116 6,770Reinvestmentallowance - 1,530 - - - 1,530RCUIDS - - (25,195) (26,939) (25,195) (26,939)

Taxassets/(liabilities) 8,116 12,117 (44,089) (52,895) (35,973) (40,778)Set-offoftax (7,562) (11,815) 7,562 11,815 - -

Nettaxassets/(liabilities) 554 302 (36,527) (41,080) (35,973) (40,778)

Company Otherborrowings - 3,700 - (6,644) - (2,944) RCUIDS - - (25,195) (26,939) (25,195) (26,939) Nettaxassets/(liabilities) - 3,700 (25,195) (33,583) (25,195) (29,883)

Unrecognised deferred tax assets

Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems(statedatgross):


Unabsorbedcapitalallowances 6,163 6,163 - - Taxlosscarry-forwards 2,213 781 - - Otherdeductibletemporary differences (1,649) (290) - - 6,727 6,654 - -

Deferredtaxassetisrecognisedtotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichthetemporarydifferencecanbeutilised.Thedeductibletemporarydifferencesdonotexpireunderthecurrenttaxlegislation.


Reco

gnis

ed

Reco

gnis

ed

in

pro

fit

Reco

gnis

ed

At

in p

rofit

A

t or

loss

or

loss

A

t

1.8.

2015

(N

ote

20)

equi

ty

1.8.

2016

(N

ote

20)

31.7

.201

7

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

RM’0

00

Gro

up

Property,plantandequipment

(22,180)

3,001

-(19,179)

416

(18,763)

Investmentproperties

(111)

(22)

-(133)

2(131)

Otherborrowings

(3,909)

1,082

-(2,827)

2,827

-Otherpayables

7,270

(500)

-6,770

1,346

8,116

Reinvestmentallowance

3,482

(1,952)

-1,530

(1,530)

-Allowanceforincreasedexport

5,448

(5,448)

--

--

RCUIDS

--

(26,939)

(26,939)

1,744

(25,195)

(10,000)

(3,839)

(26,939)

(40,778)

4,805

(35,973)

Com

pany

RCUIDS

--

(26,939)

(26,939)

1,744

(25,195)

Otherborrowings

(3,909)

965

-(2,944)

2,944

-

(3,909)

965

(26,939)

(29,883)

4,688

(25,195)

10.

Def

erre

d ta

x as

sets

/(lia

bilit

ies)

(C

ont’

d)

Recogniseddeferredtaxassets/(liabilities)(Cont’d)

Movem

entintem

porarydifferencesduringtheyear

ThedeferredtaxportionoftheRCUIDSamountingtoRM26,939,000waschargedtotheequitycom

ponentoftheRCUIDSandrecognisedinequityin

previousfinancialyear(seeNote15.2).

NO

TES

TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS(C

ont’

d)

dire

ctly

in31

.7.2

016/



11. Trade and other receivables


Non-current Non-trade Amountduefromasubsidiary - - - 24,034 Amountduefromjointventure 251,100 279,612 251,100 279,612 Less:Shareofpost-acquisitionreserves (160,165) - - - Less:Allowanceforimpairmentloss - - (83,574) - 90,935 279,612 167,526 303,646 Current Trade Tradereceivables 214,707 237,343 - - Less:Allowanceforimpairmentloss (2,828) (634) - - 211,879 236,709 - - Amountduefromjointventure 295 341 - - 212,174 237,050 - -

Non-trade Otherreceivables 17,363 39,774 28 52 Amountduefromjointventure 330,614 247,392 330,614 247,392 Amountduefromanassociate - 2 - - Amountduefromsubsidiaries - - 21,668 32 347,977 287,168 352,310 247,476 Deposits 1,043 768 437 35 Prepayments 3,208 3,085 132 76 352,228 291,021 352,879 247,587 564,402 528,071 352,879 247,587 655,337 807,683 520,405 551,233

TheGroup’snormaltradecredit termrangesfrom14to90(2016:14to90)days.Othercredit termsareassessedandapprovedonacase-by-casebasis.

Amount due from subsidiaries

Thenon-tradeamountduefromsubsidiariesisunsecured,subjecttointerestat5%perannumandrepayableondemand(2016:subjecttointerestat5%perannumandrepayablein2018).

Amount due from joint venture

Thetradeamountduefromjointventureissubjecttonormaltradeterms.

Thenon-tradeamountduefromjointventureisunsecuredandsubjecttointerestratesof4.6%to9.2%(2016:4.6%to9.2%)perannum.Thenon-currentbalanceisrepayablein2019.

ShareoflossrecognisedusingtheequitymethodinexcessoftheGroup’sinvestmentinjointventurewasappliedtotheamountduefromjointventurewhichinsubstance,formpartoftheGroup’slongterminvestmentinthejointventure.



12. Inventories

Group 2017 2016 RM’000 RM’000

Rawmaterials 105,583 67,369 Work-in-progress 18,443 14,355 Finishedgoods 106,261 85,970 Merchandisegoods 90,985 84,955 Spareparts 2,575 2,344 At31July 323,847 254,993 Recognisedinprofitorloss: Inventoriesrecognisedascostofsales 887,629 976,941 Write-downtonetrealisablevalue 7,483 14,485 Inventorywrittenoff - 3,885 Reversalofprovisionfordiminutionvalue ofinventories - (4,835)

13. Cash and cash equivalents


Depositsplacedwithlicensedbanks 34,319 59,375 3,651 59,375 Cashandbankbalances 49,031 182,117 825 67,824 83,350 241,492 4,476 127,199

14. Capital and reserves

Share capital Group and Company Number Number Amount of shares Amount of shares 2017 2017 2016 2016 RM’000 RM‘000 RM’000 RM‘000

Authorised: Ordinaryshares At1August 2,000,000 4,000,000 1,000,000 2,000,000 Additions - - 1,000,000 2,000,000 At31July 2,000,000 4,000,000 2,000,000 4,000,000 Issuedandfullypaid: Ordinaryshares At1August 644,358 1,288,717 359,195 718,390 ConversionofRCUIDS 10,506 21,011 - - Bonusissue - - 285,163 570,327

At31July 654,864 1,309,728 644,358 1,288,717



14. Capital and reserves (Cont’d)

Share capital (Cont’d)

Ordinary shares

Theholdersofordinarysharesareentitled to receivedividendsasdeclared from time to time,andareentitled toonevotepershareatmeetingsoftheCompanyandrankequallywithregardtotheCompany’sresidualassets.InrespectoftheCompany’streasurysharesthatareheldbytheGroup(seeNote14.4),allrightsaresuspendeduntilthosesharesarereissued.

ThesharesissuedduringthefinancialyearwererelatedtotheRCUIDSwhichwereconvertedintoordinarysharesbytheholders.

Reserves


Non-distributable: Warrantreserves Warrants2012/2017 14.1.1 - 18,459 - 18,459 Warrants2016 14.1.2 30,341 30,341 30,341 30,341Otherreserves Translationreserves 14.2.1 (337) (282) - - Fairvaluereserves 14.2.2 (1,103) (1,701) - - Capitalreserves 14.2.3 - (353) - (353) RCUIDSreserves 14.2.4 44,459 54,965 44,459 54,965Shareoptionreserves 14.3 4,639 4,190 4,639 4,190Treasuryshares 14.4 (7,499) (7,496) (7,499) (7,496) 70,500 98,123 71,940 100,106Distributable:

Retainedearnings/(Accumulatedlosses) 82,011 170,383 (245,184) 28,488 152,511 268,506 (173,244) 128,594

14.1 Warrant reserves

14.1.1 Warrants 2012/2017

Thewarrant reserves arose from the allocation of the proceeds received from the issuance of thewarrants byreferencetothefairvalueofthewarrantsandnetofexpensesincurredinrelationtotherightsissueinthepreviousfinancialyear.Thenumberofwarrantsoutstandingasat31July2016was159,360,628.

ThesalienttermsoftheWarrants2012/2017areasfollows:

(a) Thewarrantscanbeexercisedanytimeduringthetenureof5yearscommencingfromthedateofissueof10January2012to9January2017(“ExercisePeriod”).WarrantsnotexercisedduringtheExercisePeriodwilllapseandceasetobevalid;and

(b) EachwarrantentitlesholdertosubscribeforonenewordinaryshareintheCompanyattheexercisepriceofRM0.69atanytimeduringtheExercisePeriod.

Nowarrantswereexercisedduringthefinancialyear(2016:nil)andthewarrantssubsequentlyexpiredandceasedtobeexercisableon10January2017(seeNote33.2).



14. Capital and reserves (Cont’d)

14.1 Warrant reserves (Cont’d)

14.1.2 Warrants 2016

ThewarrantswereissuedfreetothesubscribersfortheRCUIDSinthepreviousfinancialyear.

ThewarrantreservesarosefromtheallocationoftheproceedsreceivedfromtheissuanceoftheRCUIDSbyreferencetothefairvalueofthewarrantsandnetofexpensesincurredinthepreviousfinancialyear.

Issuanceof285,163,313warrants2016arosefromthesubscriptionoftheRCUIDSinthepreviousfinancialyear.Nowarrantswereexercisedduringthefinancialyear(2016:nil)andthenumberofwarrantsoutstandingasat31July2017was285,163,313(2016:285,163,313).

Thesalienttermsofthewarrants2016areasfollows:

(a) Thewarrantscanbeexercisedanytimeduringthetenureof5yearscommencingfromthedateofissueof24June2016to23June2021(“ExercisePeriod”).WarrantsnotexercisedduringtheExercisePeriodwilllapseandceasetobevalid;and

(b) EachwarrantentitlesholdertosubscribeforonenewordinaryshareintheCompanyattheexercisepriceof RM0.50atanytimeduringtheExercisePeriod.

14.2 Other reserves

14.2.1 Translation reserves

The translation reserves comprise all foreign currency differences arising from the translation of the financialstatementsofforeignoperations.

14.2.2 Fair value reserves

Thefairvaluereservescomprisethecumulativenetchangeinthefairvalueofavailable-for-salefinancialassetsuntiltheinvestmentsarederecognisedorimpaired.

14.2.3 Capital reserves

Thecapital reservescomprise theequitycomponentof redeemableconvertiblesecuredbonds. It represents theresidualamountof theconvertiblebondsafterdeducting the fair valueof the liabilitycomponent.Theamount ispresentednetoftransactioncostsanddeferredtaxliabilities.

Duringtheyear,theCompanyhadredeemedtheredeemableconvertiblesecuredbondsaftertheholderoftheBondsexercisedtheputoption(seeNote15.1andNote33.1).

14.2.4 RCUIDS reserves

The RCUIDS reserves comprise the equity component of the Redeemable Convertible Unsecured Islamic DebtSecurities(“RCUIDS”).ItrepresentstheresidualamountoftheRCUIDSafterdeductingthefairvalueoftheliabilitycomponent.Theamountispresentednetoftransactioncostsanddeferredtaxliabilities.

Duringtheyear,21,011,000ofRCUIDS(2016:nil)wereconvertedintoordinarysharesresultedinthedecreaseinthereserves.ThenumberofRCUIDSoutstandingasat31July2017was264,152,313(2016:285,163,313).

14.3 Share option reserves

Theshareoptionreservecomprisesthecumulativevalueofemployeeservicesreceivedfortheissueofshareoptions.Whentheoptionisexercised,theamountfromtheshareoptionreserveistransferredtosharepremium.Whentheshareoptionsexpire,theamountfromtheshareoptionreserveistransferredtoretainedearnings.Noshareoptionswereexercisedbytheemployeesduringtheyear(2016:nil).

14.4 Treasury shares

Duringthefinancialyear,theCompanyrepurchased10,000ofitsissuedsharecapitalfromtheopenmarketatanaveragepriceofRM0.30pershare includingtransactioncostsfinancedby internallygeneratedfunds.Thesharesrepurchasedwereheldastreasuryshares.

Asat31July2017,atotalof5,492,000(2016:5,482,000)buy-backshareswereheldastreasurysharesandcarriedatcost.



15. Loans and borrowings


Non-current Secured:

Redeemableconvertible 15.1 securedbonds 15.3 - 135,200 - 135,200

Unsecured:

RCUIDS 15.2 25,245 30,337 25,245 30,337 25,245 165,537 25,245 165,537 Current Secured:

Redeemableconvertible 15.1 securedbonds 15.3 - 2,199 - 2,199 Bankers’acceptances 15.3 351,317 328,111 - - Revolvingcredit 15.3 60,000 60,000 30,000 30,000

Unsecured: Termloan 17,110 61,050 17,110 61,050 428,427 451,360 47,110 93,249 453,672 616,897 72,355 258,786

15.1 Redeemable convertible secured bonds (“the Bonds”)

On5April 2012 (“Issuedate”), theCompany issueda7-yearRM147millionnominal valueof4.5% redeemableconvertiblesecuredbonds.TheliabilitycomponentoftheBondsisrecognisedinthestatementsoffinancialpositionasfollows:

Group and Company 2017 2016 RM’000 RM’000

At1August 137,399 133,545Accretedinterest 497 3,854Redemption (137,896) - At31July - 137,399

TheBondsareconvertibleintoordinarysharesattheoptionoftheholderatconversionpriceofRM0.50atanytimebetweenissuanceuptothematuritydateon5April2019.

TheBondscarryacouponrateof4.5%perannumonthenominalvaluepayablesemi-annuallyinarrears.

During the year, theholder of theBondsexercised theput optionon5April 2017, being the5th anniversary ofthe Issue date, and the Company had subsequently redeemed the redeemable convertible secured bonds(seeNote33.1).



15. Loans and borrowings (Cont’d)

15.2 RCUIDS

On24June2016(“Issuedate”),theCompanyissueda5-yearRCUIDSwithfreedetachablewarrantsforcashconsiderationofRM142,581,656.50.TheRCUIDSandwarrantsareconvertibleintoordinarysharesattheconversionratioofoneshareforeachRCUIDSandforeachwarrantfromtheissuedateoftheRCUIDSupto23June2021attheoptionoftheholder,unconvertedRCUIDSwillbeentitledtoreceiveacouponof5%perannumbasedonthenominalvalueofRCUIDSheld.

TheliabilitycomponentoftheRCUIDSisrecognisedinthestatementsoffinancialpositionasfollows: Group and Company 2017 2016 RM’000 RM’000 Carryingamountasat1August 30,337 - Proceedsfromissuanceof285,163,313RCUIDSandfreewarrants - 142,582 Amountclassifiedasequity: Otherreserves - (54,965) Warrantreserves - (30,341) Amountclassifiedasdeferredtaxliabilities - (26,939) Amortisationofpremium (5,092) -

Carryingamountasat31July 25,245 30,337

15.3 Security

(a) TheredeemableconvertiblebondsaresecuredbyafirstlegalchargeoverpropertyofasubsidiarywithcarryingamountofRMnil(2016:RM65,697,000)andthelandandbuildingsoftheCompanywithcarryingamountofRMnil(2016:RM99,420,000)(seeNote5).

(b) TheCompanyhasextendedcorporateguaranteesamountingtoRM411,317,000(2016:RM388,111,000)asatthereportingdatetofinancial institutionsforbankingfacilitiesgrantedtocertainsubsidiaries.TheDirectorshaveassessedthefinancialguaranteecontractsandconcludedthatthefinancialimpactoftheguaranteesisnotmaterialasthesubsidiariesconcernedareinpositivefinancialstandingstomeettheirobligationsasandwhentheyfalldue.

16. Trade and other payables


Current Trade Tradepayables 4,713 28,127 - - Amountduetoarelatedparty 5,718 744 - - 10,431 28,871 - - Non-trade Otherpayables 9,365 22,170 218 175 Accruals 18,938 19,214 4,068 2,833 Depositsreceived 1,873 2,097 23 12 Amountduetosubsidiaries - - 131,920 27,708 Amountduetoarelatedparty - 3,531 - - 30,176 47,012 136,229 30,728 40,607 75,883 136,229 30,728



16. Trade and other payables (Cont’d)

Amount due to a related party

Thetradeamountduetoarelatedpartyissubjecttonormaltradeterms.

Thenon-tradeamountduetoarelatedpartyisunsecured,non-interestbearingandrepayableupondemand.

Amount due to subsidiaries

Theamountduetosubsidiariesisnon-tradeinnature,unsecured,non-interestbearingandrepayableupondemand.Theamountduetosubsidiarieswillbeoffsetagainstfuturedividendsandrentalreceivablefromthesesubsidiaries.

17. Revenue


Saleofgoodsandservices 1,065,352 1,125,810 - -Servicesrendered 2 2 - -Rentalofscaffoldingequipment 8,101 12,057 - -Dividendsincome - - 6,360 176,360Rentalofproperties 202 192 7,268 7,992Managementfees - - 3,906 3,906 1,073,657 1,138,061 17,534 188,258

18. Cost of sales

Group 2017 2016 RM’000 RM’000

Costofinventoriessold 890,394 1,007,194 Costofservicesrendered 3 3 Depreciationofscaffoldingequipmentforhire 5,023 6,483 895,420 1,013,680 Includedinthecostofinventoriessoldarethefollowing: Directandindirectlabourcosts 24,624 21,679 Upkeepofproperty,plantandequipment 8,743 6,532 Depreciationofproperty,plantandequipment 11,597 12,014



19. Finance costs


Interestexpenseon: Bankoverdrafts 76 83 - - Bankers’acceptances 15,881 16,480 - - Termloan 2,252 1,544 2,252 1,544 Revolvingcredit 3,018 3,145 1,588 1,662 Redeemableconvertiblesecuredbonds 7,112 10,470 7,112 10,470 RCUIDS 1,916 - 1,916 - 30,255 31,722 12,868 13,676

20. Income tax expense

Recognised in profit or loss


Current tax Malaysian -current 34,463 13,940 5,364 3,546 -prioryears (1,318) (223) (88) (846)

33,145 13,717 5,276 2,700 Deferred tax Originationandreversaloftemporarydifferences (5,260) 4,071 (5,084) (965) Under/(Over)provisioninprioryears 455 (232) 396 - (4,805) 3,839 (4,688) (965)

Totalincometaxexpense 28,340 17,556 588 1,735

Reconciliation of tax expense


(Loss)/Profitbeforetax (74,821) (24,617) (287,689) 188,150 Shareoflossaftertaxofequity accountedinvestees 215,322 99,223 - - 140,501 74,606 (287,689) 188,150



20. Income tax expense (Cont’d)

Reconciliation of tax expense (Cont’d)


IncometaxcalculatedusingMalaysiantaxrateof24% 33,720 17,905 (69,045) 45,156 Effectoftaxrateinforeignjurisdictions - (84) - - Incomenotsubjecttotax (5,441) (103) (2,511) (42,329) Non-deductibleexpenses 906 337 71,836 (246) Temporarydifferenceforwhichnodeferredtaxassetswasrecognised 18 (44) - - Under/(Over)provisionofdeferredtaxinprioryears 455 (232) 396 - Overprovisionofcurrenttaxinprioryears (1,318) (223) (88) (846)

Incometaxexpense 28,340 17,556 588 1,735

21. (Loss)/Profit for the year


(Loss)/Profit for the year is arrived after charging/(crediting): Personnelexpenses: Salaries,wagesandothers 42,485 40,399 7,180 4,920 Definedcontributionplan 4,079 3,915 889 632 Auditors’remuneration: -Auditfees KPMGPLT 334 326 100 90 Otherauditors 20 20 - - -Nonauditfees KPMGPLT 20 205 20 205 Allowancefordoubtfuldebts 2,194 634 - -Depreciationofproperty,plantandequipment 14,590 21,706 110 126 Depreciationofinvestmentproperties 158 159 1,315 1,315 Equity-settledsharebasedpayments 449 448 449 448 Minimumleasepaymentsrecognisedasoperatingleaseexpensefor: -Landandbuildings 718 1,343 - - -Officeequipment 23 19 - - -Gastank 10 11 - - Property,plantandequipmentwrittenoff 47 20 - -

Impairmentloss-investmentinandamountduefromjointventure - - 304,272 - Gainondisposalsofproperty,plantandequipment (6,803) (3,868) - - Lossondisposalofanassociate 2 - - - Loss/(Gain)ondisposalsofavailable-for-salefinancialassets 2 (103) - - Chargearisingfromearlyredemptionofconvertiblesecuredbonds 9,457 - 9,457 -



21. (Loss)/Profit for the year (Cont’d)


(Loss)/Profit for this year is arrived after charging/(crediting) : Rentalincomefrominvestmentproperties (774) (998) (7,268) (7,992) Dividendsincome (33) (33) (6,360) (176,360) Netforeignexchange(gain)/loss -Realised (3,173) (3,772) - - -Unrealised (1,744) 1,400 (1,558) 226 Netoverdueinterestincome (485) (355) - - Financeincome: -Deposits (2,939) (1,988) (2,335) (1,636) -Available-for-salefinancialassets (1,084) (787) - (10) -Jointventure (28,997) (24,245) (28,997) (24,245) -Subsidiary - - (1,205) (1,606) Reversalofprovisionfordiminutioninvalueofinventories - (4,835) - - Inventorieswrittenoff - 3,885 - - Write-downonslowmovinginventories 7,483 14,485 - -

22. Key management personnel compensation


Executivedirectors -Remuneration 5,727 2,675 5,133 2,081

5,727 2,675 5,133 2,081

Non-executivedirectors: -Fees 427 358 360 315-Otheremoluments 16 24 16 24

443 382 376 339

6,170 3,057 5,509 2,420



23. Loss per ordinary share

Basic loss per ordinary share

Thecalculationofbasiclossperordinaryshareat31July2017wasbasedonthelossattributabletoordinaryshareholdersandaweightedaveragenumberofordinarysharesoutstanding,calculatedasfollows:

Group 2017 2016 Lossattributabletoordinaryshareholders(RM’000) (102,977) (41,561) Weightedaveragenumberofordinaryshares(‘000) Issuedordinarysharesat1August 1,288,717 718,390 Effectoftreasurysharesheld (5,492) (5,482) Effectofordinarysharesissued 4,423 570,327

Weightedaveragenumberofordinarysharesat31July 1,287,648 1,283,235 Basiclossperordinaryshare(sen) (8.00)(3.24)

Diluted loss per ordinary share

Thecalculationofdilutedlossperordinaryshareat31July2017wasbasedonlossattributabletoordinaryshareholdersandtheweightedaveragenumberofordinarysharesoutstandingafteradjustmentfortheeffectsofalldilutivepotentialordinaryshares.

Nodilutedlossperordinaryshareisdisclosedastherearenodilutivepotentialordinaryshares.

24. Dividends

DividendsrecognisedbytheCompany:

Sen Total per share amount Date of RM’000 payment 2017 Final2016ordinary(singletier) 0.30 3,854 25January2017 2016 Final2015ordinary(singletier) 0.30 2,139 26January2016



25. Operating segments

(a) Business Segments

Formanagementpurposes,theGroupisorganisedintobusinessunitsbasedontheirproductsandservices,andhasfivereportableoperatingsegmentsasfollows:

(i) The trading segment is importers, exporters and general dealers in steel products, hardware and buildingmaterials;

(ii) Themanufacturingsegmentinvolvedinmanufacturing,rentinganddistributingofsteelpipes,hollowsections,scaffoldingequipment,accessoriesandothersteelproducts;

(iii) The property and investment segment involved in investment in and renting out property and investmentholding;

(iv) Thetransportationsegmentinvolvedinprovisionoftransportationofgoodsbylorries;and

(v) Theminingexplorationsegmentinvolvedinexploring,contractingandactivitiesrelatedtothemining,processing andsaleofironore.

Except as indicated above, no operating segment has been aggregated to form the above reportable operatingsegments.

Groupincometaxesaremanagedonagroupbasisandarenotallocatedtooperatingsegments.

(b) Geographical Segments

NosegmentalinformationisprovidedonageographicalbasisastheactivitiesoftheGrouparecarriedoutpredominantlyinMalaysia.

TheDirectorsareoftheopinionthatallinter-segmenttransactionshavebeenenteredintointhenormalcourseofbusinessandhavebeenestablishedontermsandconditionsthatarenotmateriallydifferentfromthoseobtainableintransactionswithunrelatedparties.

Performance is measured based on segment profit before tax, interest and depreciation as included in the internalmanagementreportsthatarereviewedbytheExecutiveDirectorandChiefOperatingOfficer.Segmentprofitisusedtomeasureperformanceasmanagementbelievesthatsuchinformationisthemostrelevantinevaluatingtheresultsofcertainsegmentsrelativetootherentitiesthatoperatewithintheseindustries.

Segment assets

Thetotalofsegmentassetsismeasuredbasedonallassets(includinggoodwill)ofasegment,asincludedintheinternalmanagementreportsthatarereviewedbytheExecutiveDirectorandChiefOperatingOfficer.Segmenttotalassetsisusedtomeasurethereturnofassetsofeachsegment.

Segment liabilities

Segment liabilities information is included in the internalmanagement reports and provided regularly to the ExecutiveDirectorandChiefOperatingOfficer.Hencedisclosureismadeonsegmentliabilities.

Segment capital expenditure

Segmentcapitalexpenditureisthetotalcostincurredduringthefinancialyeartoacquireproperty,plantandequipment.



25. Operating segments (Cont’d)

Property and Mining Trading Manufacturing investment Transportation exploration Eliminations Total 2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue Externalcustomers 500,011 573,472 172 2 - - 1,073,657 Inter-segment - 19,822 17,362 3,161 - (40,345) -

Totalsegmentrevenue 500,011 593,294 17,534 3,163 - (40,345) 1,073,657

Results Segmentprofit 29,201 102,992 8,678 38 (408) (215,322) (74,821) Includedinthemeasureofsegmentprofitare: Financeincome 697 954 31,332 37 - - 33,020 Dividendsincome - - 33 - - - 33 Financecost (7,955) (9,431) (12,869) - - - (30,255) Depreciation (2,080) (8,882) (3,145) (411) (230) - (14,748) Shareoflossofjointventure - - - - - - (215,322)

Assets Segmentassets 316,377 630,829 624,382 3,257 21,798 (249,259) 1,347,384 Unallocatedassets - - - - - - 4,410

Totalassets 316,377 630,829 624,382 3,257 21,798 (249,259) 1,351,794

Liabilities Segmentliabilities 210,284 235,182 209,513 384 21,806 (182,891) 494,278 Unallocatedliabilities - - - - - - 50,145

Totalliabilities 210,284 235,182 209,513 384 21,806 (182,891) 544,423

Other information Additiontonon-currentassets otherthanfinancialinstruments anddeferredtaxassets 841 13,571 - 4 3 - 14,419 Property,plantandequipment writtenoff - (47) - - - - (47) Allowancefordoubtfuldebts (1,437) (757) - - - - (2,194)



25. Operating segments (Cont’d)

Property and Mining Trading Manufacturing investment Transportation exploration Eliminations Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue Externalcustomers 589,033 548,834 192 2 - - 1,138,061 Inter-segment - 4,955 188,066 3,938 - (196,959) -

Totalsegmentrevenue 589,033 553,789 188,258 3,940 - (196,959) 1,138,061

Results Segmentprofit 9,171 56,507 9,853 423 (1,352) (99,219) (24,617) Includedinthemeasureofsegmentprofitare: Financeincome 568 534 25,892 26 - - 27,020 Dividendsincome - - 33 - - - 33 Financecost (9,370) (8,676) (13,676) - - - (31,722) Depreciation (2,927) (15,105) (3,162) (441) (230) - (21,865) Shareoflossofjointventure - - - - - - (99,223) Shareoflossofassociate - - - - - - (4) Assets Segmentassets 300,520 558,266 845,145 3,659 20,800 (79,842) 1,648,548 Unallocatedassets - - - - - - 3,446

Totalassets 300,520 558,266 845,145 3,659 20,800 (79,842) 1,651,994

Liabilities Segmentliabilities 217,602 243,877 290,392 382 20,394 (79,868) 692,779 Unallocatedliabilities - - - - - - 46,171

Totalliabilities 217,602 243,877 290,392 382 20,394 (79,868) 738,950

Other information Additiontonon-currentassets otherthanfinancialinstruments anddeferredtaxassets 320 2,112 - - - - 2,432 Property,plantandequipment writtenoff (20) - - - - - (20) Reversalofprovisionfordiminution invalueofinventories - 4,835 - - - - 4,835 Allowancefordoubtfuldebts (634) - - - - - (634)



26. Financial instruments

26.1 Categories of financial instruments

Thetablebelowprovidesananalysisoffinancialinstrumentscategorisedasfollows:

(a) Loansandreceivables(“L&R”); (b) Available-for-salefinancialassets(“AFS”);and (c) Financialliabilitiesmeasuredatamortisedcost(“FL”).

Carrying L&R/ amount (FL) AFS 2017 RM’000 RM’000 RM’000

Financial assets Group Available-for-salefinancialassets 6,198 - 6,198 Tradeandotherreceivables(excludingprepayments) 652,129 652,129 - Cashandcashequivalents 83,350 83,350 - 741,677 735,479 6,198

Company Tradeandotherreceivables(excludingprepayments) 520,273 520,273 - Cashandcashequivalents 4,476 4,476 -

527,749 527,749 -

Financial liabilities Group Loansandborrowings (453,672) (453,672) - Tradeandotherpayables (40,607) (40,607) - (494,279) (494,279) - Company Loansandborrowings (72,355) (72,355) - Tradeandotherpayables (136,229) (136,229) -

(208,584) (208,584) -



26. Financial instruments (Cont’d)

26.1 Categories of financial instruments (Cont’d)

Carrying L&R/ amount (FL) AFS 2016 RM’000 RM’000 RM’000

Financial assets

Group Available-for-salefinancialassets 6,098 - 6,098 Tradeandotherreceivables(excludingprepayments) 804,598 804,598 - Cashandcashequivalents 241,492 241,492 - 1,052,188 1,046,090 6,098

Company Tradeandotherreceivables(excludingprepayments) 551,157 551,157 - Cashandcashequivalents 127,199 127,199 - 678,356 678,356 -

Financial liabilities Group Loansandborrowings (616,897) (616,897) - Tradeandotherpayables (75,883) (75,883) - (692,780) (692,780) -

Company Loansandborrowings (258,786) (258,786) - Tradeandotherpayables (30,728) (30,728) - (289,514) (289,514) -

26.2 Net gains and losses arising from financial instruments


Netgains/(losses)on: Available-for-salefinancialassets 4,654 1,713 2,335 1,646 Loansandreceivables 32,204 26,339 (272,613) 25,903 Financialliabilitiesmeasuredatamortisedcost (39,711) (31,722) (22,325) (13,676)

(2,853) (3,670) (292,603) 13,873




26.3 Financial risk management

TheGrouphasexposuretothefollowingrisksfromitsuseoffinancialinstruments:

•Creditrisk •Liquidityrisk •Marketrisk

26.4 Credit risk

CreditriskistheriskofafinanciallosstotheGroupifacustomerorcounterpartytoafinancialinstrumentfailstomeetitscontractualobligations.TheGroup’sexposuretocreditriskarisesprincipallyfromitsreceivablesfromcustomersandadvancestojointventure.TheCompany’sexposuretocreditriskarisesprincipallyfromloansandadvancestojointventureandasubsidiaryandcorporateguaranteesgiventobanksforcreditfacilitiesgrantedtosubsidiariesandjointventure.

Receivables

Risk management objectives, policies and processes for managing the risk.

TheGroup’sobjectiveistoseekcontinualrevenuegrowthwhileminimisinglossesincurredduetoincreasedcreditriskexposure.TheGrouptradesonlywithrecognisedandcreditworthythirdparties.ItistheGroup’spolicythatallcustomerswhowish to tradeoncredit termsaresubject tocreditverificationprocedures. Inaddition, receivablebalancesaremonitoredonanongoingbasiswiththeresultthattheGroup’sexposuretobaddebtsisnotsignificant.

Exposure to credit risk, credit quality and collateral.

Asattheendofthereportingperiod,themaximumexposuretocreditriskarisingfromreceivablesisrepresentedbythecarryingamountsinthestatementoffinancialposition.

Managementhastakenreasonablestepstoensurethatreceivablesthatareneitherpastduenorimpairedarestatedattheirrealisablevalues.Asignificantportionofthesereceivablesareregularcustomersthathavebeentransactingwith theGroup.TheGroupusesageinganalysis tomonitor thecreditqualityof the receivables.Any receivableshavingsignificantbalancespastduemorethan90days,whicharedeemedtohavehighercreditrisk,aremonitoredindividually.

Theexposureofcreditriskfortradereceivablesasattheendofthereportingperiodbygeographicregionwas:

Group 2017 2016 RM’000 RM’000

Domestic 184,777 209,665 Asia 27,057 26,674 Australia/NewZealand 340 711 212,174 237,050




26.4 Credit risk (Cont’d)

Impairment losses Theageingoftradereceivablesasattheendofthereportingperiodwas:

Individual Gross impairment Net RM’000 RM’000 RM’000

2017 Notpastdue 81,511 - 81,511 Pastdue1-30days 38,727 - 38,727 Pastdue31-60days 45,541 - 45,541 Pastdue61-90days 34,396 - 34,396 Pastduemorethan90days 14,827 (2,828) 11,999 215,002 (2,828) 212,174

2016 Notpastdue 143,018 - 143,018 Pastdue1-30days 80,589 - 80,589 Pastdue31-60days 1,796 - 1,796 Pastdue61-90days 3,799 - 3,799 Pastduemorethan90days 8,482 (634) 7,848 237,684 (634) 237,050

Themovementsintheallowanceforimpairmentlossesoftradereceivablesduringthefinancialyearwere:

Group 2017 2016 RM’000 RM’000

At1August 634 32 Impairmentloss 2,194 634 Impairmentlosswrittenoff - (32)

At31July 2,828 634

Theallowanceaccountinrespectofreceivablesisusedtorecordimpairmentlosses.UnlesstheGroupissatisfiedthatrecoveryoftheamount ispossible, theamountconsidered irrecoverable iswrittenoffagainstthereceivabledirectly.

Available-for-sale financial assets

Risk management objectives, policies and processes for managing the risk

Investmentsinavailable-for-salefinancialassetsareallowedonlyinliquidsecuritiesandonlywithcounterpartiesthathaveacreditratingequaltoorbetterthantheGroup.Transactionsinvolvingderivativefinancialinstrumentsarewithapprovedfinancialinstitutions.




26.4 Credit risk (cont’d)

Available-for-sale financial assets (Cont’d)

Exposure to credit risk, credit quality and collateral

Themaximumexposuretocreditriskisrepresentedbythecarryingamountsinthestatementoffinancialposition.

Inviewofthesoundcreditratingofcounterparties,managementdoesnotexpectanycounterpartytofailtomeetitsobligations.TheGroupdoesnothaveoverdueinvestmentsthathavenotbeenimpaired.

Theavailable-for-salefinancialassetsareunsecured.

Impairment losses

Asattheendofthereportingperiod,therewasnoindicationthattheinvestmentsandotherfinancialassetsarenotrecoverable.

Financial guarantees


TheCompanyprovidesunsecuredcorporateguaranteestobanksinrespectofbankingfacilitiesgrantedtocertainsubsidiaries.TheCompanymonitorsonanongoingbasistheresultsandrepaymentsmadebythesubsidiaries.


The maximum exposure to credit risk amounts to RM411,317,000 (2016: RM388,111,000) representing theoutstandingbankingfacilitiesofthesubsidiariesasattheendofthereportingperiod.

Asattheendofthereportingperiod,therewasnoindicationthatanysubsidiarywoulddefaultonrepayment.

Thefinancialguaranteeshavenotbeenrecognisedsincethefairvalueoninitialrecognitionwasnotmaterial.

Inter company balances


TheCompanyprovidesunsecuredloansandadvancestoitssubsidiaryandjointventure.TheCompanymonitorstheresultsoftheseentitiesregularly.


Asattheendofthereportingperiod,themaximumexposuretocreditriskisrepresentedbytheircarryingamountsinthestatementoffinancialposition.

Impairment losses

Asattheendofthereportingperiod,therewasnoindicationthattheloansandadvancestothesubsidiaryarenotrecoverable.

An impairment loss in respectof theadvances to the jointventureof theCompanyamounted toRM83,574,000(2016:nil)wasrecognisedduringthefinancialyearbasedonthediscountedcashflowprojectionspreparedbythemanagementofthejointventure.




26.4 Credit risk (cont’d)

Themovementsintheallowanceforimpairmentlossoftheamountduefromjointventureduringthefinancialyear were:

Group 2017 2016 RM’000 RM’000

At1August - - Impairmentloss 83,574 - At31July 83,574 -

26.5 Liquidity risk

LiquidityriskistheriskthattheGroupwillnotbeabletomeetitsfinancialobligationsastheyfalldue.TheGroup’sexposuretoliquidityriskarisesprincipallyfromitsvariouspayables,loansandborrowings.

TheGroupmaintainsalevelofcashandcashequivalentsandbankfacilitiesdeemedadequatebythemanagementtoensure,asfaraspossible,thatitwillhavesufficientliquiditytomeetitsliabilitieswhentheyfalldue.

Maturity analysis

ThetablebelowsummarisesthematurityprofileoftheGroup’sandtheCompany’sfinancialliabilitiesasattheendofthereportingperiodbasedonundiscountedcontractualpayments:

Contractual Contractual More Carrying interest cash Under 1 1-2 2-5 than amount rate flows year years years 5 years Group RM’000 coupon RM’000 RM’000 RM’000 RM’000 RM’000

2017 Non-derivative financial liabilities Securedbankloans andfacilities 411,317 4.05%-5.30% 411,317 411,317 - - -Termloan 17,110 5.40% 17,110 17,110 - - -Tradeandotherpayables* 40,607 - 40,607 40,607 - - -RCUIDS 25,245 5.00% 28,516 7,129 7,129 14,258 -Financialguarantees - - 16,829 16,829 - - -

494,279 514,379 492,992 7,129 14,258 -

2016 Non-derivative financial liabilities Securedbankloansandfacilities 388,1114.22%-5.60% 388,111 388,111 - - -Termloan 61,050 5.40% 61,050 61,050 - - -Redeemableconvertiblesecuredbonds 137,399 4.50% 166,845 6,615 6,615 153,615 -Tradeandotherpayables* 75,883 - 75,883 75,883 - - -RCUIDS 30,337 5.00% 35,645 7,129 7,129 21,387 -Financialguarantees - - 23,017 23,017 - -

692,780 750,551 561,805 13,744 175,002 -




26.5 Liquidity risk (Cont’d)

Maturity analysis (Cont’d)

Contractual Contractual More Carrying interest cash Under 1 1-2 2-5 than amount rate flows year years years 5 years RM’000 coupon RM’000 RM’000 RM’000 RM’000 RM’000 Company

2017 Non-derivative financial liabilities Revolvingcredit 30,000 5.30% 30,000 30,000 - - -Termloan 17,110 5.40% 17,110 17,110 - - -Tradeandotherpayables* 136,229 - 136,229 136,229 - - -RCUIDS 25,245 5.00% 28,516 7,129 7,129 14,258 -Financialguarantees - - 421,636 421,636 - - - 208,584 633,491 612,104 7,129 14,258 -

2016 Non-derivative financial liabilities Redeemableconvertible securedbonds 137,399 4.50% 166,845 6,615 6,615 153,615 -Revolvingcredit 30,000 5.30%-5.60% 30,000 30,000 - - -Termloan 61,050 5.40% 61,050 61,050 - - -Tradeandotherpayables* 30,728 - 30,728 30,728 - - -RCUIDS 30,337 5.00% 35,645 7,129 7,129 21,387 -Financialguarantees - - 404,608 404,608 - - - 289,514 728,876 540,130 13,744 175,002 -

* The contractual cash flows of trade and other payables exclude derivatives, and where applicable, accruals for interest on borrowings have been included in the contractual cash flows of the respective financial liabilities.




26.6 Market risk

Marketriskistheriskthatchangesinmarketprices,suchasforeignexchangerates,interestratesandotherpricesthatwillaffecttheGroup’sfinancialpositionorcashflows.

26.6.1 Currency risk

TheGroupisexposedtoforeigncurrencyriskonsalesandcashandcashequivalentsthataredenominatedinacurrencyotherthantherespectivefunctionalcurrenciesofGroupentities.ThecurrenciesgivingrisetothisriskareprimarilyU.S.Dollar(USD)andSingaporeDollar(SGD).


Foreignexchangeexposuresintransactionalcurrenciesotherthanfunctionalcurrenciesoftheoperatingentitiesarekepttoanacceptablelevel.TheGroupandtheCompanydidnotenterintoanyforwardforeignexchangecontracts inthecurrentandpreviousfinancialyears.However,thispolicy issubjecttoreviewfromtimetotime.

Exposure to foreign currency risk

TheGroup’sexposuretoforeigncurrency(acurrencywhich isotherthanthefunctionalcurrencyoftheGroupentities)risk,basedoncarryingamountsasattheendofthereportingperiodwas:

Denominated inGroup USD SGD

2017 RM’000 RM’000 Tradereceivables 5,672 19,092 Cashandcashequivalents 31,667 5,832 Totalexposure 37,339 24,924

2016 Tradereceivables 2,388 23,715 Cashandcashequivalents 13,431 20,967

Totalexposure 15,819 44,682

Currency risk sensitivity analysis

ForeigncurrencyriskoftheGroupentitiesmainlyarisesfromtransactionsdealinginSGDandUSD.Theexposure to other currencies is not material and hence sensitivity analysis is not presented for othercurrencies.

A10%and10%(2016:10%and10%)strengtheningoftheSGDandUSDrespectivelyagainstthefunctionalcurrencyoftheGroupentitiesattheendofthereportingperiodwouldhaveincreased/(decreased)post-taxprofitorlossbytheamountsshownbelow.Thisanalysisassumesthatallothervariables,inparticularinterestrates,remainedconstantandignoresanyimpactofforecastedsalesandpurchases.

Profit or loss 2017 2016 Group RM’000 RM’000

SGD 1,894 3,396 USD 2,837 1,202




26.6 Market risk (Cont’d)

26.6.1 Currency risk (Cont’d)

Currency risk sensitivity analysis (Cont’d)

A10%and10%(2016:10%and10%)weakeningoftheSGDandUSDrespectivelyagainsttheabovecurrencyattheendofthereportingperiodwouldhavehadequalbutoppositeeffectontheabovecurrencytotheamountsshownabove,onthebasisthatallothervariablesremainedconstant.

26.6.2 Interest rate risk

TheGroup’sfixed rateborrowingsareexposed toa riskofchange in their fairvaluedue tochanges ininterestrates.TheGroup’svariablerateborrowingsareexposedtoariskofchangeincashflowsduetochangesininterestrates.Investmentsinequitysecurities,available-for-salefinancialassetsandshorttermreceivablesandpayablesarenotsignificantlyexposedtointerestraterisk.


TheGroupmanagesitsinterestrateexposurebymaintainingfixedandfloatingrateborrowings.TheGroupreviewsitsdebtsportfolio,takingintoaccounttheinvestmentholdingperiodandnatureofitsassets.

Exposure to interest rate risk

TheinterestrateprofileoftheGroup’sandtheCompany’ssignificantinterest-bearingfinancialinstruments,basedoncarryingamountsasattheendofthereportingperiodwas:


Fixed rate instruments Financial liabilities Revolvingcredit 60,000 60,000 30,000 30,000 Bankers’acceptances 351,317 328,111 - - Termloan 17,110 61,050 17,110 61,050 Redeemableconvertible securedbonds - 137,399 - 137,399 RCUIDS 25,245 30,337 25,245 30,337 453,672 616,897 72,355 258,786

Interest rate risk sensitivity analysis

Fair value sensitivity analysis for fixed rate instruments

TheGroupandtheCompanydonotaccountforanyfixedratefinancialassetsandliabilitiesatfairvaluethroughprofitorloss,andtheGroupandtheCompanydonotdesignatederivativesashedginginstrumentsunderafairvaluehedgeaccountingmodel.Therefore,achangeininterestratesattheendofthereportingperiodwouldnotaffectprofitorloss.

Cash flow sensitivity analysis for variable rate instruments

Theexposuretointerestrateriskarisingfromfloatingrateinstrumentsisnotmaterial,andhence,sensitivityanalysisisnotpresented.




26.6 Market risk (Cont’d)

26.6.3 Other price risk

Equity price risk arises from the Group’s investments in quoted equity securities. The quoted equitysecuritiesislistedontheBursaMalaysiaSecuritiesBerhad.Theinstrumentsareclassifiedasavailable-for-saleinvestments.


Management of theGroupmonitors the equity investments on an individual basis and all buy and selldecisionsareapprovedbythemanagement.

Equity price risk sensitivity analysis

Atthereportingdate,ifthesharepricehadbeen5%(2016:5%)higher/lower,withallothervariablesheldconstant,theGroup’sotherreserveinequitywouldhavebeenRM68,353(2016:RM38,091)higher/lower,arisingasaresultofanincrease/decreaseinthefairvalueofequityinstrumentsclassifiedasavailable-for-sale.

Investment in unit trust funds

TheGroup’sinvestmentinunittrustfundsoflicensedfinancialinstitutionswithinMalaysiaisafixedincomefundwhichprovidesregularincomestreamandstableinvestmentreturns.TheGroupinvestedinthefundsforcashmanagementpurpose.Theexposuretotheequityriskisnotmaterialandhencesensitivityanalysisisnotpresented.

26.7 Fair value information

Thecarryingamountsofcashandcashequivalents,shorttermreceivablesandpayablesandshorttermborrowingsapproximatefairvaluesduetotherelativelyshorttermnatureofthesefinancialinstruments.

ItwasnotpracticabletoestimatethefairvalueoftheGroup’sandtheCompany’sinvestmentinunquotedsharesduetothelackofcomparablequotedmarketpricesandtheinabilitytoestimatefairvaluewithoutincurringexcessivecosts.


F

air

valu

e of

fin

anci

al in

stru

men

ts c

arrie

d

F

air va

lue

of fin

anci

al in

stru

men

ts n

ot

at

fai

r va

lue

ca

rrie

d at

fai

r va

lue

To

tal f

air

Car

ryin

g

2017

Leve

l 1

Leve

l 2

Leve

l 3

Tota

l Le

vel 1

Le

vel 2

Le

vel 3

To

tal

Valu

e A

mou

nt

Gro

up

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

Fina

ncia

l ass

ets

Investmentinquotedshares

1,367

--

1,367

--

--

1,367

1,367

Investmentinunittrustfunds

-

4,691

-4,691

--

--

4,691

4,691

Amountduefromjointventure

-

--

--

-421,844

421,844

421,844

421,844

1,367

4,691

-6,058

--

421,844

421,844

427,902

427,902

Fina

ncia

l lia

bilit

ies

RCUIDS

-

--

--

-25,245

25,245

25,245

25,245

Com

pany

Fina

ncia

l ass

ets


-

--

--

-498,140

498,140

498,140

498,140

Fina

ncia

l lia

bilit

ies

RCUIDS

-

--

--

-25,245

25,245

25,245

25,245

26.

Fina

ncia

l ins

trum

ents

(C

ont’

d)

26.7

Fa

ir va

lue

info

rmat

ion

(con

t’d)

Thetablebelowanalysesfinancialinstrumentscarriedatfairvalueandthosenotcarriedatfairvalueforwhichfairvalueisdisclosed,togetherwiththeirfair

valuesandcarryingamountsshowninthestatementoffinancialposition.

NO

TES

TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS(C

ont’

d)


Fai

r va

lue

of f

inan

cial

inst

rum

ents

car

ried

F

air va

lue

of fin

anci

al in

stru

men

ts n

ot

at

fai

r va

lue

ca

rrie

d at

fai

r va

lue

To

tal f

air

Car

ryin

g

2016

Leve

l 1

Leve

l 2

Leve

l 3

Tota

l Le

vel 1

Le

vel 2

Le

vel 3

To

tal

Valu

e A

mou

nt

Gro

up

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

RM

’000

Fina

ncia

l ass

ets

Investmentinquotedshares

769

--

769

--

--

769

769

Investmentinunittrustfunds

-

5,189

-5,189

--

--

5,189

5,189


-

--

--

-527,345

527,345

527,345

527,345

769

5,189

-5,958

--

527,345

527,345

533,303

533,303

Fina

ncia

l lia

bilit

ies

Redeemableconvertiblesecuredbonds

-

--

--

-137,399

137,399

137,399

137,399

RCUIDS

-

--

--

-30,337

30,337

30,337

30,337

-

--

--

-167,736

167,736

167,736

167,736

Com

pany

Fina

ncia

l ass

ets

Amountduefromasubsidiary

-

--

--

-24,034

24,034

24,034

24,034


-

--

--

-527,004

527,004

527,004

527,004

-

--

--

-551,038

551,038

551,038

551,038

Fina

ncia

l lia

bilit

ies

Redeemableconvertiblesecuredbonds

-

--

--

-137,399

137,399

137,399

137,399

RCUIDS

-

--

--

-30,337

30,337

30,337

30,337

-

--

--

-167,736

167,736

167,736

167,736

26.

Fina

ncia

l ins

trum

ents

(C

ont’

d)

26.7

Fa

ir va

lue

info

rmat

ion

(con

t’d)

Thetablebelowanalysesfinancialinstrumentscarriedatfairvalueandthosenotcarriedatfairvalueforwhichfairvalueisdisclosed,togetherwiththeirfair

valuesandcarryingamountsshowninthestatementoffinancialposition.

NO

TES

TO

TH

E FI

NA

NC

IAL

STA

TEM

ENTS(C

ont’

d)




26.7 Fair value information (Cont’d)

Policy on transfer between levels

Thefairvalueofanassettobetransferredbetweenlevelsisdeterminedasofthedateoftheeventorchangeincircumstancesthatcausedthetransfer.

Level 1 fair value

Level1fairvalueisderivedfromquotedprice(unadjusted)inactivemarketsforidenticalfinancialassetsorliabilitiesthattheentitycanaccessatthemeasurementdate.

Level 2 fair value

Level2fairvalueisestimatedusinginputsotherthanquotedpricesincludedwithinLevel1thatareobservableforthefinancialassetsorliabilities,eitherdirectlyorindirectly.

Transfers between Level 1 and Level 2 fair values

TherehasbeennotransferbetweenLevel1and2fairvaluesduringthefinancialyear(2016:notransferineitherdirections).

Level 3 fair value

Level3fairvalueisestimatedusingunobservableinputsforthefinancialassetsandliabilities.

ThefollowingtableshowsthevaluationtechniquesusedinthedeterminationoffairvalueswithinLevel3,aswellasthekeyunobservableinputsusedinthevaluationmodels.

Financial instruments not carried at fair value

Type Description of valuation technique and inputs used

Amountduefromsubsidiariesandjoint venture,redeemableconvertible Discountedcashflowsusingaratebasedonthecurrent securedbondsandRCUIDS marketrateofbowingoftheCompanyatthereportingdate.

Non-derivativefinancialliabilities

Fairvalue,whichisdeterminedfordisclosurepurposes,iscalculatedbasedonthepresentvalueoffutureprincipalandinterestcashflows,discountedatthemarketrateofinterestattheendofthereportingperiod.Inrespectoftheliabilitycomponentofconvertiblenotes,themarketrateofinterestisdeterminedbyreferencetosimilarliabilitiesthatdonothaveaconversionoption.

27. Capital management

TheGroup’sobjectiveswhenmanagingcapital is tomaintainastrongcapitalbaseandsafeguard theGroup’sability tocontinueasagoingconcern,soastomaintaininvestor,creditorandmarketconfidenceandtosustainfuturedevelopmentofthebusiness.TheDirectorsmonitorandaredeterminedtomaintainanoptimaldebt-to-equityratiothatcomplieswithbondcovenantsandregulatoryrequirements.



27. Capital management (Cont’d)

During2017,theGroup’sstrategy,whichwasunchangedfrom2016,wastomaintainthedebt-to-equityratiooflessthan1.0.Thedebt-to-equityratioswereasfollows:

Group Note 2017 2016 RM’000 RM’000

Loansandborrowings 15 453,672 616,897 Less:Cashandcashequivalents 13 (83,350) (241,492) Less:Available-for-salefinancialassets-current 9 (4,691) (5,189)

Netdebt 365,631 370,216

Totalequity 807,371 913,044

Debt-to-equityratios 0.45 0.41

TherewerenochangesintheGroup’sapproachtocapitalmanagementduringthefinancialyear.

UndertherequirementofBursaMalaysiaPracticeNoteNo.17/2005,theCompanyisrequiredtomaintainaconsolidatedshareholders’equityequaltoornotlessthanthe25percentoftheissuedandpaid-upcapital(excludingtreasuryshares)andsuchshareholders’equityisnotlessthanRM40million.TheCompanyhascompliedwiththisrequirement.

28. Operating leases

Leases as lessee

Non-cancellableoperatingleaserentalarepayableasfollows:

Group 2017 2016 RM’000 RM’000

Lessthanoneyear 391 463 Betweenoneandfiveyears 1,016 177

1,407 640

OperatingleasepaymentsrepresentrentalpayablebytheGroupforuseofbuildingsandgastank.

Leases as lessor

TheGroupleasesouttheirinvestmentpropertiesunderoperatingleases(seeNote5).Thefutureminimumleasereceivablesundernon-cancellableleasesareasfollows:

Group 2017 2016 RM’000 RM’000

Lessthanoneyear 219 742 Betweenoneandfiveyears 870 - 1,089 742



29. Capital commitment

Group 2017 2016 RM’000 RM’000

Share of capital commitments of joint venture: Approvedandcontractedfor 20,018 22,530

30. Contingent liabilities


Unsecured Inrespectofcorporateguaranteesissuedforsubsidiaries - - 411,317 388,111 Inrespectofindemnityprovidedforbankguaranteesissued 6,510 6,520 - - Inrespectofcorporateguaranteesissuedforajointventure 10,319 16,497 10,319 16,497

31. Related parties

Identity of related parties

Forthepurposesofthesefinancialstatements,partiesareconsideredtoberelatedtotheGrouportheCompanyiftheGroupor theCompanyhas the ability, directly or indirectly, to control or jointly control thepartyor exercise significantinfluenceoverthepartyinmakingfinancialandoperatingdecisions,orviceversa,orwheretheGrouportheCompanyandthepartyaresubjecttocommoncontrol.Relatedpartiesmaybeindividualsorotherentities.

Keymanagementpersonnelaredefinedas thosepersonshavingauthorityand responsibility forplanning,directingandcontrollingtheactivitiesoftheGroupeitherdirectlyorindirectly.KeymanagementpersonnelincludesalltheDirectorsoftheGroup,andcertainmembersofseniormanagementoftheGroup.

ThesignificantrelatedpartytransactionsoftheGroupandtheCompany,otherthankeymanagementpersonnelcompensation(seeNote22),areasfollows:

Transaction with related parties

2017 2016 RM’000 RM’000

Group Purchasesofsteelproductsfromacompanyinwhich certaindirectorsoftheCompanyhavesignificantinterests: JKJiSengSdn.Bhd. 231,486 181,092 Salesofsteelproductstojointventure EasternSteelSdn.Bhd. - (33)



31. Related parties (Cont’d)

Transaction with related parties (Cont’d)

2017 2016 Company RM’000 RM’000

Rentalincomefromsubsidiaries: AlpinePipeManufacturingSdn.Bhd. (3,900) (3,120) HuatracoScaffoldSdn.Bhd. (1,560) (1,560) HiapTeckHardwareSdn.Bhd. (1,488) (3,120) Managementfeesfromsubsidiaries: HiapTeckHardwareSdn.Bhd. (1,260) (1,260) AlpinePipeManufacturingSdn.Bhd. (1,260) (1,260) HuatracoScaffoldSdn.Bhd. (1,260) (1,260) BriliantDecadeTransportAgencySdn.Bhd. (126) (126) Grossdividendsincomefromsubsidiaries: HiapTeckHardwareSdn.Bhd. (1,800) (89,267) AlpinePipeManufacturingSdn.Bhd. (3,000) (73,783) HuatracoScaffoldSdn.Bhd. (1,200) (12,950) BriliantDecadeTransportAgencySdn.Bhd. (360) (360) Rentalincomefromjointventure: EasternSteelSdn.Bhd. (100) (120)

TheDirectorsoftheGroupandtheCompanyareoftheopinionthattheabovetransactionshavebeenenteredintointhenormalcourseofbusinessandthetermshavebeenestablishedontermsandconditionsthatarenotmateriallydifferentfromthoseobtainableintransactionswithunrelatedparties.

Intercompany balances with the related parties

2017 2016 Group RM’000 RM’000

Amount due to a related party JKJiSengSdn.Bhd. (5,718) (744) WongChinDong(shareholderofVistaMiningSdn.Bhd.) - (3,531) Amount due from joint venture EasternSteelSdn.Bhd. 421,844 527,345 Company Amount due from/(to) subsidiaries (net) AlpinePipeManufacturingSdn.Bhd. (44,319) 24,046 VistaMiningSdn.Bhd. 21,575 - HuatracoScaffoldSdn.Bhd. 14 (3,220) HiapTeckHardwareSdn.Bhd. (86,441) (24,175) BriliantDecadeTransportAgencySdn.Bhd. 12 (295) HiapTeckResourcesSdn.Bhd. (1,025) - TiekHongHardware(B’worth)Sdn.Bhd. (68) - Amount due from joint venture EasternSteelSdn.Bhd. 498,140 527,004



32. Employee benefit

Share option programme (equity-settled)

On 19 April 2013, the Company granted 48,800,000 of share options to eligible Directors and employees under theEmployeesShareOptionScheme(“ESOS”),approvedby theshareholdersof theCompanyon23November2011.On10January2014,theCompanyfurthergranted11,020,000ofshareoptionsonsimilarterms(exceptforexerciseprice)toeligibleDirectorsandemployees.On12January2015,additional8,950,000ofshareoptionsweregrantedonsimilarterms(exceptforexerciseprice)toeligibleDirectorsandemployees.On24June2016,therewereadditional43,718,783shareoptionsgrantedarisingfromadjustmentstotheoutstandingnumberofshareoptionspursuanttotherightsissue.On10January2017,theCompanyextendeditsexistingESOSwhichexpiredon11April2017foranotherfive(5)yearsfrom11April2017to11April2022.

ThesalienttermsoftheESOSareasfollows:

(i) EligibleDirectornamedintheregisterofdirectorsoftheGrouporanemployeewhoisaconfirmedfulltimeemployee oftheGroupandmusthaveattainedtheageofeighteen(18)years;

(ii) ForemployeeotherthanDirectors,hemusthavebeenconfirmedandmusthaveservedtheGrouponacontinuousbasisforaperiodofnotlessthanoneyearon12April2012(“EffectiveDate”).

(iii) TheaggregatenumberofsharestobeissuedundertheESOSshallnotexceed10%ofthetotalissuedandpaid-up ordinarysharecapitaloftheCompany;

(iv) TheSchemeshallbeinforceforaperiodoffive(5)yearsfromtheEffectiveDateandmaybeextendedorrenewed(as thecasemaybe) fora furtherperiodoffiveyears,at thesoleandabsolutediscretionof theBoardupontherecommendationbytheESOSCommittee,providedalwaysthattheinitialSchemeperiodstipulatedaboveandsuchextensionoftheSchememadepursuanttotheseESOSBy-lawsshallnotinaggregateexceedadurationoften(10)yearsfromtheEffectiveDate;

(v) Theoptionpriceshallnotbeatadiscountofmorethan10%(orsuchdiscountastherelevantauthoritiesshallpermit)fromthe5-dayweightedaveragemarketpriceofthesharesoftheCompanyprecedingthedateofofferandshallinnoeventbelessthanparvalueofthesharesoftheCompanyofRM0.50;

(vi) Anoptionholdermay,inaparticularyear,exerciseuptosuchmaximumnumberofsharesintheofferletteratvestingdateat2January2015,2016and2017subjecttotheyearlyperformancetargetssetbytheBoardofDirectorsoftheCompany;

(vii) TheoptionsgrantedtoeligibleDirector/employeewilllapsewhentheyarenolongerinemploymentoftheGroup.

Thenumberandweightedaverageexercisepricesofshareoptionsareasfollows:

Weighted Weighted average Number average Number exercise of options exercise of options price (‘000) price (‘000) 2017 2017 2016 2016

Outstandingat1August RM0.53 97,230 RM0.53 56,231 Grantedduringtheyear* - - RM0.53 43,719 Forfeitedduringtheyear RM0.54 (18,140) RM0.57 (2,720) Rejectedduringtheyear - - Exercisedduringtheyear - - Outstandingat31July RM0.53 79,090 RM0.53 97,230 Exercisableat31July RM0.53 79,090 RM0.53 97,230

*Issuanceof43,718,783shareoptionsarisingfromadjustmentstotheoutstandingnumberofshareoptionspursuanttotherightsissueinthepreviousyear.



32. Employee benefit (Cont’d)

Theoptionsoutstandingat31July2017haveanexercisepriceinrangeofRM0.50toRM0.67(2016:RM0.50toRM0.67)andaweightedaveragecontractuallifeof5years(2016:1year).

Duringthecurrentandpreviousfinancialyears,noshareoptionswereexercised.

Thefairvalueofservicesreceivedinreturnforshareoptionsgrantedisbasedonthefairvalueofshareoptionsgranted,measuredusingabinomiallatticemodel,withthefollowinginputs:

2017 2016

Fair value of share options and assumptions Fairvalueatgrantdate RM0.07 RM0.07 Weightedaverageshareprice RM0.74 RM0.74 Sharepriceatgrantdate RM0.64 RM0.64 Optionlife(expectedweightedaveragelife) 5years 1year Risk-freeinterestrate 3.8% 3.8%

Value of employee services received for issue of share options

2017 2016 RM’000 RM’000

Shareoptionsgrantedinfinancialyearended31July2013 192 192 Shareoptionsgrantedinfinancialyearended31July2014 182 182 Shareoptionsgrantedinfinancialyearended31July2016 75 74

Totalexpenserecognisedassharebasedpayments 449 448

Theshareoptionsexpenseisrecognisedinprofitorloss.

33. Significant events

33.1 Redemption of redeemable convertible secured bonds

On5April 2012 (“Issuedate”), theCompany issueda7-yearRM147millionnominal valueof4.5% redeemableconvertiblesecuredbonds.

TheholderoftheBondsmayonthe5thanniversaryoftheIssuedate(ie.5April2017)requiretheCompanytoredeemallorpartoftheBondsbygivingnolessthan90daysirrevocablepriorwrittennoticetotheCompany.

Unlesspreviouslyredeemed,converted,purchasedandcancelled,theBondsshallberedeemedbytheCompanyatitsnominalvalueonthe7thanniversaryoftheIssuedate(5April2019)(“Maturitydate”).

On5April2017,theCompanyhasredeemedtheBondsaftertheholderoftheBondsexercisedtheputoptionbywrittennotice.The redemption resulted inapre-tax lossofRM9,457,000whichwas recognised inprofitor loss(refertoNote21).TheCompanyceasedtohaveanyliabilitiespertainingtotheconvertiblesecuredbondsaftertheredemption.

33.2 Expiry of Warrants 2012/2017

On9January2017,the159,360,628ofoutstandingwarrantswithexercisepriceofRM0.69expiredandceasedtobeexercisablethereafter.Nowarrantshavebeenexercisedbytheregisteredholdersduringtheyear.

Group and Company



34. Subsequent events

Subsequenttoyearend,therewereconversionsofRCUIDStoordinarysharesasfollows:

i. On8August2017,therewasconversionofRCUIDSbytheregisteredholdersto420,800ordinaryshares;

ii. On16August2017,therewasconversionofRCUIDSbytheregisteredholdersto4,548,000ordinaryshares;

iii. On30August2017,therewasconversionofRCUIDSbytheregisteredholdersto358,400ordinaryshares;and

iv. On18September2017,therewasconversionofRCUIDSbytheregisteredholdersto815,000ordinaryshares.

ThelatestissuedsharecapitalaftertheaboveconversionswasRM657,935,000.



35. Supplementary financial information on the breakdown of realised and unrealised profits or losses

ThebreakdownoftheretainedearningsoftheGroupandoftheCompanyasat31July,intorealisedandunrealisedprofitsorlosses,pursuanttoParagraphs2.06and2.23ofBursaMalaysiaMainMarketListingRequirements,areasfollows:


TotalretainedearningsoftheCompanyanditssubsidiaries -realised 204,291 383,441 (246,516) 28,714 -unrealised (820) (2,674) 1,332 (226) 203,471 380,767 (245,184) 28,488

Totalshareofaccumulatedlossesofequityaccountedinvestees -realised (321,895) (124,001) - - -unrealised (59,068) (41,640) - - Less:Consolidationadjustments 259,503 (44,743) - -

Totalretainedearnings 82,011 170,383 (245,184) 28,488

ThedeterminationofrealisedandunrealisedprofitsorlossesisbasedontheGuidanceonSpecialMatterNo.1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements,issuedbytheMalaysianInstituteofAccountantson20December2010.


IntheopinionoftheDirectors,thefinancialstatementssetoutonpages48to118aredrawnupinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31July2017andoftheirfinancialperformanceandcashflowsforthefinancialyearthenended.

IntheopinionoftheDirectors,theinformationsetoutinNote35onpage119tothefinancialstatementshasbeencompiledin accordancewith theGuidance on SpecialMatterNo.1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements,issuedbytheMalaysianInstituteofAccountants,andpresentedbasedontheformatprescribedbyBursaMalaysiaSecuritiesBerhad.

SignedonbehalfoftheBoardofDirectorsinaccordancewitharesolutionoftheDirectors:

………………………………………………………..TanSriDato’LawTienSengDirector

………………………………………………………..FooKokSiewDirector

Date:25October2017

I,Foo Kok Siew,theDirectorprimarilyresponsibleforthefinancialmanagementofHiapTeckVentureBerhad,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages48to119are,tothebestofmyknowledgeandbelief,correctandImakethissolemndeclarationconscientiouslybelievingthedeclarationtobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

Subscribedandsolemnlydeclaredby theabovenamedFooKokSiew,NRIC:610523-10-6663,atKualaLumpur in theFederalTerritoryon25October2017.

…………………………..………..FooKokSiewDirector

Beforeme:

D.SelvarajCommissionerforOaths(No.W320)

STATEMENT BY DIRECTORS

STATUTORY DECLARATION

pursuanttoSection251(2)oftheCompaniesAct2016

pursuanttoSection251(1)(b)oftheCompaniesAct2016


Report on the Audit of the Financial Statements

Opinion

WehaveauditedthefinancialstatementsofHiapTeckVentureBerhad,whichcomprisethestatementsoffinancialpositionasat31July2017oftheGroupandoftheCompany,andthestatementsofprofitorlossandothercomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyfortheyearthenended,andnotestothefinancialstatements,includingasummaryofsignificantaccountingpolicies,assetoutonpages48to118.

Inouropinion,theaccompanyingfinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31July2017andoftheirfinancialperformanceandtheircashflowsfortheyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.

Basis for Opinion

WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing.Our responsibilitiesunder thosestandardsare furtherdescribed in theAuditors’ Responsibilities for the Audit of the Financial Statementssectionofourauditors’report.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

Independence and Other Ethical Responsibilities

Weare independentof theGroupandof theCompany inaccordancewith theBy-Laws (on Professional Ethics, Conduct and Practice)of theMalaysian InstituteofAccountants (“By-Laws”)andthe InternationalEthicsStandardsBoardforAccountants’Code of Ethics for Professional Accountants(“IESBACode”),andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeBy-LawsandtheIESBACode.

Key Audit Matters

Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditofthefinancialstatementsoftheGroupandoftheCompanyforthecurrentyear.ThesematterswereaddressedinthecontextofourauditofthefinancialstatementsoftheGroupandoftheCompanyasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.

INDEPENDENT AUDITORS’ REPORT tothemembersofHiapTeckVentureBerhad


Key Audit Matters (cont’d)

1. Revenue recognition

Refer to Note 2(o) – significant accounting policy: Revenue and other income – Goods sold and Note 17 – Revenue.

The key audit matter

RevenueoftheGroupmainlycomprisesincomegeneratedfrom manufacturing and selling of steel pipes, hollowsections,scaffoldingequipmentandaccessoriesandothersteelproducts.Revenuefromsaleofgoodsisrecognisedwhenthesignificantrisksandrewardsofownershiphavebeen transferred to thecustomer,usually in the formofan executed sales agreement and when the goods aredeliveredtocustomers.

Revenue recognition is identified as a key audit matterastheGroup’srevenuetransactionsarevoluminouswithvarietyofgoodssoldandservicesrendered,withdifferenttermsandpricing,fordifferentcustomers.Thereisariskthat revenue may be recognised before the significantrisks and rewards of ownership of the goods sold havebeentransferredtothecustomers.

How the matter was addressed in our audit

Weperformed the following audit procedures, amongothers:

• We evaluated the design and implementation ofcontrols over the accuracy and timing of revenuerecognition,andtestedtheiroperatingeffectiveness.

• From samples selected, we verified revenuetransactions to respective sales invoices andacknowledged delivery orders that evidenced thetransfer of risks and rewards of ownership of thegoodstocustomersandperformanceofservices.

• We analysed the trend of credit notes and salesreturnsaftertheyear-enddatetodetermineiftherewas evidence that revenue was recognised in theincorrectfinancialperiod.

• We selected revenue transactions prior andsubsequent to the year-end date and inspectedthe respective sales invoices and acknowledgeddelivery orders that evidenced the transfer of risksand rewards of ownership of goods and servicesrenderedandcheckedthatthesetransactionswererecognisedintheappropriatefinancialperiods.

INDEPENDENT AUDITORS’ REPORT (Cont’d)

tothemembersofHiapTeckVentureBerhad


Key Audit Matters (cont’d)

2. Recoverability of investment in and amount due from joint venture

Refer to Note 2(a)(vi) – significant accounting policy: Basis of consolidation - Joint arrangements, Note 7 – Investment in joint venture and Note 11 - Trade and other receivables - Amount due from joint venture.

The key audit matter

TheGroupinvestedina jointventurewhichisprincipallyengagedinmanufacturing,sellinganddealinginarangeofsteelproductsusingblastfurnaceplant.

Inviewofthedepressedmarketpricesandsoftdemandofsteelslabsandtheincreasedvolatilityofforeignexchangerates,thejointventurehasceaseditstrialoperationinthepreviousfinancialyeartominimiselosses.

Asat31July2017,thegrossamountsoftheinvestmentcost and amount due from the joint venture wereRM275.80 million and RM581.71 million respectively,andthecarryingamountswerenilandRM421.55millionrespectivelyafternettingofftheshareofpost-acquisitionreservesandimpairmentloss.

The recoverability of amount due from the joint ventureisidentifiedasakeyauditmatterinviewofthecessationofoperation andunfavorablemarket conditions inwhichthe jointventureoperates.Themanagementof the jointventurehasprepareddiscountedcashflowprojectionstoassess the recoverableamountof theamountdue fromthejointventure.

How the matter was addressed in our audit

Weperformed the following audit procedures, amongothers:

• We engaged corporate finance specialists inassessing the reasonablenessof the jointventure’sdiscounted cash flow projections and challengedthe key assumptions used. We compared the keyassumptionstoexternallyderiveddataaswellasourownassessmentswhichtookintoaccounthistoricaltrend,futurebusinessplansandbudgets.

• We performed sensitivity analysis on the keyassumptions used which include sale prices, salesvolume, operating capacity, contribution margins,otheroperatingcostsandpost-taxdiscountrate.

• We discussed with management of the jointventureontheplannedresumptionofproduction,andreviewedminutesofBoards’meetingstocorroboratethemanagement’sactionplans.

•Wecheckedtheappropriatenessofthedisclosuresmade in the financial statements prepared by themanagement



RecoverabilityofinvestmentinandamountduefromjointventureisalsoakeyauditmatterintheauditoftheseparatefinancialstatementsoftheCompany.Wehavedeterminedthattherearenootherkeyauditmatters intheauditof theseparatefinancialstatementsoftheCompanytocommunicateinourauditors’report.

Information Other than the Financial Statements and Auditors’ Report Thereon

TheDirectorsoftheCompanyareresponsiblefortheotherinformation.Theotherinformationcomprisestheinformationincluded in theannual report, butdoesnot include thefinancial statementsof theGroupandof theCompanyandourauditors’reportthereon.

OuropiniononthefinancialstatementsoftheGroupandoftheCompanydoesnotcovertheannualreportandwedonotexpressanyformofassuranceconclusionthereon.

InconnectionwithourauditofthefinancialstatementsoftheGroupandoftheCompany,ourresponsibilityistoreadtheannualreportand,indoingso,considerwhethertheannualreportismateriallyinconsistentwiththefinancialstatementsoftheGroupandoftheCompanyorourknowledgeobtainedintheaudit,orotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementoftheannualreport,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.




Responsibilities of the Directors for the Financial Statements

TheDirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementsoftheGroupandoftheCompanythatgiveatrueandfairviewinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.TheDirectorsarealsoresponsibleforsuchinternalcontrolastheDirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsoftheGroupandoftheCompanythatarefreefrommaterialmisstatement,whetherduetofraudorerror.

InpreparingthefinancialstatementsoftheGroupandoftheCompany,theDirectorsareresponsibleforassessingtheabilityoftheGroupandoftheCompanytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlesstheDirectorseitherintendtoliquidatetheGrouportheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.

Auditors’ Responsibilities for the Audit of the Financial Statements

OurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsoftheGroupandoftheCompanyasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditors’reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithapprovedstandardsonauditing inMalaysiaand InternationalStandardsonAuditingwillalwaysdetectamaterialmisstatementwhen itexists.Misstatementscanarise fromfraudorerrorandareconsideredmaterial if, individuallyor in theaggregate, theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

Aspart of an audit conducted in accordancewith approved standardson auditing inMalaysia and InternationalStandardsonAuditing,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:

• IdentifyandassesstherisksofmaterialmisstatementofthefinancialstatementsoftheGroupandoftheCompany,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessofinternalcontroloftheGroupandoftheCompany.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosuresmadebytheDirectors.

• ConcludeontheappropriatenessoftheDirectors’useofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheabilityoftheGrouporoftheCompanytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditors’reporttotherelateddisclosuresinthefinancialstatementsoftheGroupandoftheCompanyor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditors’report.However,futureeventsorconditionsmaycausetheGrouportheCompanytoceasetocontinueasagoingconcern.

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatementsoftheGroupandoftheCompany,includingthedisclosures,andwhetherthefinancialstatementsoftheGroupandoftheCompanyrepresenttheunderlyingtransactionsandeventsinamannerthatgivesatrueandfairview.

• Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithin

theGrouptoexpressanopiniononthefinancialstatementsoftheGroup.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.




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

WecommunicatewiththeDirectorsregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.

WealsoprovidetheDirectorswithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.

FromthematterscommunicatedwiththeDirectors,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsoftheGroupandoftheCompanyforthecurrentfinancialyearandarethereforethekeyauditmatters.Wedescribethesemattersinourauditors’reportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicated inour reportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.

Report on Other Legal and Regulatory Requirements

InaccordancewiththerequirementsoftheCompaniesAct2016inMalaysia,wereportthatthesubsidiariesofwhichwehavenotactedasauditorsaredisclosedinNote6tothefinancialstatements.

Other Reporting Responsibilities

Thesupplementary informationsetout inNote35 isdisclosed tomeet the requirementofBursaMalaysiaSecuritiesBerhadandisnotpartofthefinancialstatements.TheDirectorsareresponsibleforthepreparationofthesupplementaryinformationinaccordancewithGuidanceonSpecialMatterNo.1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements,asissuedbytheMalaysianInstituteofAccountants(“MIAGuidance”)andthedirectiveofBursaMalaysiaSecuritiesBerhad.Inouropinion,thesupplementaryinformationisprepared,inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.

Other Matter

ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection266oftheCompaniesAct2016inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

KPMG PLT Chin Shoon Chong(LLP0010081-LCA&AF0758) ApprovalNumber:02823/04/2019JCharteredAccountants CharteredAccountant

PetalingJaya,Selangor

Date:25October2017


Net Carrying Approximate Amount Age of Approximate Build Up as at Date of Description and Building Land Area Area 31 July 2017 Date of LastLocation Extisting Usage Tenure (years) (acres) (sq. metres) (RM) Acquisition Revaluation

Company and its subsidiaries

Lot6085,

MukimofKapar Singlestoreyfactory Freehold 19.5 9 19,005 17,809,030 29-May-03 28-Dec-16

DistrictofKlang witha2storeyoffice

SelangorDarulEhsan

Lot6088,

MukimofKapar Singlestoreyfactory Freehold 19.5 9 18,732 16,872,230 29-May-03 28-Dec-16

DistrictofKlang witha2storeyoffice

SelangorDarulEhsan

Lot6089,

MukimofKapar Singlestoreyfactory/ Freehold 18.5 9 18,516 18,550,694 29-May-03 28-Dec-16

DistrictofKlang warehouse

SelangorDarulEhsan

Lot6095,

MukimofKapar Singlestoreyfactory/ Freehold 18 10.013 22,341 25,704,000 05-Jul-96 28-Dec-16

DistrictofKlang warehouse

SelangorDarulEhsan

Lot6096,

MukimofKapar Singlestoreyfactory/ Freehold 18 9.483 12,179 19,170,000 05-Jan-95 28-Dec-16

DistrictofKlang warehousewith4

SelangorDarulEhsan storeyofficebuilding

Lot6097,

MukimofKapar AgriculturalLand Freehold - 5.0 - 6,858,961 14-Jan-12 28-Dec-16

DistrictofKlang

SelangorDarulEhsan

Lot54959

(formerlyPT40530), Singlestorey Freehold 11 18.0 53,243 64,643,632 23-Oct-08 28-Dec-16

MukimofKapar, detachedfactory

DistrictofKlang, withadoublestorey

Selangor officebuilding

51-C,TingkatDua Shopoffice Freehold 17 - 144,929 157,288 20-Aug-99 05-Jan-17

JalanBRP6/10

BukitRahmanPutra

SeksyenU20

40160ShahAlam

PROPERTIES OF THE GROUPAsat31July2017


PROPERTIES OF THE GROUP (Cont’d)

Asat31July2017

Net Carrying Approximate Amount Age of Approximate Build Up as at Date of Description and Building Land Area Area 31 July 2017 Date of LastLocation Extisting Usage Tenure (years) (acres) (sq. metres) (RM) Acquisition Revaluation

Company and its subsidiaries (cont’d)

4727-01,

JalanSriPutri5/7 Shopoffice Freehold 19 - 143.07 101,226 02-Aug-99 22-Dec-16

TamanPutriKulai apartment

81000Kulai

JohorDarulTakzim

No.8,JalanFirma3, Singlestorey Leasehold 14 1 2,536.30 2,055,715 27-Feb-07 28-Dec-16

TebrauIV detachedfactory (60years)

IndustrialEstate building expiring

81100JohorBahru 31/01/2060

JohorDarulTakzim

No.6,JalanFirma3, Singlestoreyfactory Leasehold 15 1.554 3,995.76 4,518,912 06-Jun-07 28-Dec-16

TebrauIV witha2storeyoffice (60years)

IndustrialEstate expiring

81100JohorBahru 31/01/2060

JohorDarulTakzim

Lot169,

MukimofPlentong Vacantagricultural Freehold - 5.1 - 670,000 09-Jun-95 28-Dec-16

DistrictofJohorBahru land

JohorDarulTakzim

Lot296,Mukim13 Singlestorey Leasehold 11 2.241 2,453 2,051,979 06-Jul-96 28-Dec-16

Districtof warehousewith (60years)

SeberangPerai 2storeyoffice expiring

Tengah,PulauPinang 10/03/2058

Joint Venture

Lot6293&Lot6294 Blast Leasehold - 608.62 - 123,886,709 02-Apr-08 20-Oct-11

MukimTelukKalung furnance (60years)

Kemaman,Terengganu plant expiring

01/04/2068

Lot60129,60130, Vacant Leasehold - 600 - 4,960,334 03-Apr-13 -

60131 industrial (60years)

MukimTelukKalung land expiring

Kemaman,Terengganu 14/04/2073

Lot50497 Staff Leasehold - 50 - 499,434 28-May-12 -

MukimTelukKalung housing (99years)

Kemaman,Terengganu expiring

29/07/2111


ANALYSIS OF SHAREHOLDINGSAsat19October2017

AuthorisedShareCapital :RM2,000,000,000.00 IssuedandFullyPaid-UpShareCapital :RM655,189,317.00(1,310,378,634OrdinaryShares)* Classofshares :OrdinarysharesVotingright :OnevoteperOrdinaryShareheld *Includestreasurysharesof5,492,000OrdinaryShares Analysis By Size Of Shareholdings As At 19 October 2017

Size of shareholdings No. of Shareholders % No. of Shares %

1-99 155 2.15 5,214 0.00100-1,000 493 6.83 387,064 0.031,001-10,000 2,792 38.68 17,154,972 1.3110,001-100,000 2,998 41.52 111,814,292 8.53100,001tolessthan5%ofissuedshares 777 10.76 747,493,234 57.055%andaboveofissuedshares 4 0.06 433,523,858 33.08

Total 7,219 100.00 1,310,378,634 100.00

LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 19 OCTOBER 2017

No. Names No. of Shares Percentage (%)1. CARTABANNOMINEES(ASING)SDNBHD EXEMPTANFORSTANDARDCHARTEREDBANKSINGAPOREBRANCH (SGPVBCLAC) 157,647,686 12.03

2. HSBCNOMINEES(ASING)SDNBHD EXEMPTANFORCREDITSUISSE(SGBR-TST-ASING) 119,876,172 9.15

3. CIMSECNOMINEES(ASING)SDNBHD CIMBBANKFORTSLAWINVESTMENTSLIMITED(PBCL-0G0069) 90,000,000 6.87

4. MAYBANKNOMINEES(ASING)SDNBHD PLEDGEDSECURITIESACCOUNT-MAYBANKINTERNATIONALLABUAN BRANCHFORTSLAWINVESTMENTLTD(414886) 66,000,000 5.04

5. HLIBNOMINEES(ASING)SDNBHD SHOUGANGINTERNATIONAL(SINGAPORE)PTELTD 64,392,000 4.91

6. LEMBAGATABUNGHAJI 61,400,000 4.69

7. KENANGANOMINEES(ASING)SDNBHD LAVINGTONINTERNATIONALLIMITED 43,308,000 3.30

8. CITIGROUPNOMINEES(ASING)SDNBHD EXEMPTANFORCITIBANKNEWYORK(NORGESBANK14) 36,000,000 2.75

9. K.H.L.SDNBHD 35,300,000 2.69

10. SHENGHSIAHWEI 20,104,600 1.53


ANALYSIS OF SHAREHOLDINGS (Cont’d)

Asat19October2017

No. Names No. of Shares Percentage (%)11. MAYBANKNOMINEES(TEMPATAN)SDNBHD MAYBANKTRUSTEESBERHADFORAPEXDANAAL-SOFI-I (ADAS-I)(410325) 14,567,700 1.11

12. DUSHYANTHIPERERA 13,000,000 0.99

13. SIMAHSENG 10,303,020 0.79

14. MAYBANKNOMINEES(TEMPATAN)SDNBHD MAYBANKTRUSTEESBERHADFORAPEXDANAAL-FAIZ-I (ADAF-I)(410324) 9,583,200 0.73

15. LIMWANLOO 9,530,300 0.73

16. YAPKIMFOONG 8,974,800 0.68

17. UOBKAYHIANNOMINEES(TEMPATAN)SDNBHD EXEMPTANFORUOBKAYHIANPTELTD(A/CCLIENTS) 7,702,000 0.59

18. CIMSECNOMINEES(TEMPATAN)SDNBHD CIMBBANKFORAHNYUKLEN(MQ0340) 6,258,600 0.48

19. CITIGROUPNOMINEES(ASING)SDNBHD CBNYFORDIMENSIONALEMERGINGMARKETSVALUEFUND 6,113,800 0.47

20. WONGAHWAH 5,400,000 0.41

21. LIMSINSEONG 5,000,000 0.3822. CITIGROUPNOMINEES(ASING)SDNBHD CBNYFORDFAEMERGINGMARKETSSMALLCAPSERIES 4,749,700 0.36

23. ALLIANCEGROUPNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORLIMCHAIBENG(7002516) 4,500,000 0.3424. PHUAHGUKSHUE@PUAGUKSHUE 4,400,000 0.34

25. CIMBISLAMICNOMINEES(TEMPATAN)SDNBHD CIMBISLAMICTRUSTEEBERHAD-AMBSHARIAHVALUEPLUSFUND 4,143,000 0.32

26. CITIGROUPNOMINEES(TEMPATAN)SDNBHD KUMPULANWANGPERSARAAN(DIPERBADANKAN)(MYBKAMSCE) 4,000,000 0.3127. TANHOCKHUAT 3,800,000 0.29

28. LIMSOONGUAN 3,750,600 0.29

29. UOBMNOMINEES(TEMPATAN)SDNBHD UOBMFORLEEKIMTIONG@LEEKIMYEW(PBM) 3,700,000 0.28

30. TANSOONCHONG 3,600,000 0.27 Total: 827,105,178 63.12

LIST OF THIRTY (30) LARGEST SHAREHOLDERS AS AT 19 OCTOBER 2017 (Cont’d)


ANALYSIS OF SHAREHOLDINGS (Cont’d)

Asat19October2017

Directors’ Shareholdings as at 19 October 2017(As per the Register of Directors’ Shareholdings of the Company)

Direct IndirectNames No. of Shares % No. of Shares % 1. TanSriAbdRahmanBinMamat - - - -2. TanSriDato’LawTienSeng - - 337,647,686(a) 25.773. LeeChingKion - - 45,354(b) 0.004. NgSoonLai@NgSiekChuan - - - -5. LeowHoiLoong@LiowHoiLong - - - -6. FooKokSiew - - - -7. TanShauMing - - 792,000(c) 0.068.LawWaiCheong - - 337,647,686(d) 25.77

Notes:

(a) DeemedinterestpursuanttoSection8oftheCompaniesAct2016byvirtueofhisshareholdingsinAmardaleOffshoreInc.whichhasacontrollinginterestinTSLawInvestmentsLimited,asubstantialshareholderintheCompany.

(b) Deemed interest interest pursuant to Sections 59(11)(c) and 197 of theCompaniesAct 2016 by virtue of his spouse, MadamMokQueeHwa’sdirectshareholdingsintheCompany.(c) Deemed interest interest pursuant to Sections 59(11)(c) and 197 of theCompaniesAct 2016 by virtue of his spouse, MadamNgSiewCho’sdirectshareholdingsintheCompany.(d) DeemedinterestpursuanttoSections8and197oftheCompaniesAct2016byvirtueofhisfather,TanSriDato’LawTien

Seng’sshareholdingsinAmardaleOffshoreInc.whichhasacontrollinginterestinTSLawInvestmentLimited,asubstantialshareholderoftheCompany.

Substantial Shareholdings as at 19 October 2017(As per the Register of Substantial Shareholders of the Company)

Direct IndirectNames No. of Shares % No. of Shares %

TanSriDato’LawTienSeng - - 337,647,686(a) 25.77PuanSriDatinSawGeokNgor - - 337,647,686(b) 25.77LawWaiCheong - - 337,647,686(c) 25.77TSLawInvestmentsLimited - - 337,647,686 25.77AmardaleOffshoreInc. - - 337,647,686(d) 25.77CIMSECNominees(Asing)SdnBhd 90,000,000(e) 6.87 - -HSBCNominees(Asing)SdnBhd 24,000,000(e) 1.83 - -CartabanNominees(Asing)SdnBhd 157,647,686(e) 12.03 - -MaybankNominees(Asing)SdnBhd 66,000,000(e) 5.04

Notes:

(a) Deemed interest pursuant to Section 8 of theCompaniesAct 2016 by virtue of his shareholdings inAmardaleOffshoreInc.whichhasacontrollinginterestinTSLawInvestmentsLimited,asubstantialshareholderHTVB.

(b) Deemed interest pursuant to Sections 197 of the Companies Act 2016 by virtue of her spouse, Tan Sri Dato’ Law TienSeng’sindirectshareholdingsinHTVBvidehisshareholdingsinAmardaleOffshoreInc.whichhasacontrollinginterestinTSLawInvestmentsLimited,asubstantialshareholderofHTVB.

(c) Deemed interest pursuant to Sections 8 and 197 of the Companies Act 2016 by virtue of his father, Tan Sri Dato’ LawTienSeng’sShareholdings inAmardaleOffshore Inc.whichhasacontrolling investment inTSLawInvestmentLimited,asubstantialshareholderofHTVB.

(d) DeemedinterestbyvirtueofitsshareholdingsinTSLawInvestmentsLimitedwhichisasubstantialshareholderofHTVB.(e) Deemed interest pursuant to Section 8 of the Companies Act 2016 by virtue of TS Law Investments Limited being the beneficialownersoftheHTVB’sshares.


ANALYSIS OF RCUIDS HOLDINGSAsat19October2017

Five (5)-year 5% RM0.50 Nominal value of Redeemable Convertible Unsecured Islamic Debt Securities (“RCUIDS”) As At19October2017 IssueDate : 24June,2016 MaturityDate : 23June,2021 ConversionPrice : RM0.50 Analysis By Size of RCUIDS Holdings As At 19 October 2017 Size of RCUIDS holdings No. of RCUIDS holders % No. of RCUIDS %

1-99 13 0.76 678 0.00100-1,000 171 10.05 112,060 0.041,001-10,000 824 48.44 3,690,383 1.4310,001-100,000 546 32.10 19,528,126 7.57100,001tolessthan5%ofissuedRCUIDS 143 8.41 89,455,201 34.675%andaboveofissuedRCUIDS 4 0.24 145,223,665 56.29

Total 1,701 100.00 258,010,113 100.00

LIST OF THIRTY (30) LARGEST OF RCUIDS HOLDERS AS AT 19 OCTOBER 2017

No. Names No. of RCUIDS Percentage (%)1. HSBCNOMINEES(ASING)SDNBHD EXEMPTANFORCREDITSUISSE(SGBR-TST-ASING) 65,607,586 25.43

2. CARTABANNOMINEES(ASING)SDNBHD EXEMPTANFORSTANDARDCHARTEREDBANKSINGAPOREBRANCH (SGPVBCLAC) 35,032,819 13.58

3. LEMBAGATABUNGHAJI 24,583,260 9.53


5. AFFINHWANGNOMINEES(TEMPATAN)SDN.BHD. PLEDGEDSECURITIESACCOUNTFOR LIMCHAIBENG(M02) 12,533,100 4.86


7. ALLIANCEGROUPNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORLIMCHAIBENG(7002516) 6,000,000 2.33

8. OOICHIENGSIM 4,604,100 1.78

9. CITIGROUPNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORLIMCHAIBENG(007158456) 4,381,900 1.70

10. ALLIANCEGROUPNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORPWBIOTECHENGINEERING SDNBHD(7002561) 2,660,000 1.03


No. Names No. of RCUIDS Percentage (%)11. LIMWANLOO 2,508,600 0.97

12. K.H.L.SDNBHD 2,400,000 0.93

13. YAPKIMFOONG 1,994,400 0.77

14. KAFTRUSTEEBERHAD KIFBFORALTIMA,INC 1,759,800 0.68

15. KAFTRUSTEEBERHAD KIFBFORLAGMUIRHOLDINGSLTD 1,397,700 0.54

16. WONGAHWAH 1,200,000 0.47

17. CIMSECNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORKHORKIMHOCK (BBKLANG-CL) 1,172,000 0.45

18. NGHOFATT 1,116,500 0.43

19. LIMWANKEONG 1,098,400 0.43

20. NGHOFATT 1,086,400 0.42

21. CIMSECNOMINEES(TEMPATAN)SDNBHD CIMBBANKFORHUEYUENKEONG(MY0589) 1,010,500 0.39

22. TEOSIEWLAI 1,000,000 0.39

23. CIMSECNOMINEES(TEMPATAN)SDNBHD CIMBBANKFORNGWAIYUAN(MY0867) 798,401 0.31

24. LOOCHEELAIN 724,000 0.28

25. LOWYANSEONG 713,600 0.28

26. CHONGCHINGYEE 700,000 0.27

27. PACIFICSTRIKESDNBHD 669,100 0.26

28. TANWOEIKEAK 624,000 0.24

29. TANSIEWONG 612,800 0.24

30. TANHUNGCHEW 600,000 0.23 Total: 208,212,966 80.70

LIST OF THIRTY (30) LARGEST OF RCUIDS HOLDERS AS AT 19 OCTOBER 2017

ANALYSIS OF RCUIDS HOLDINGS (Cont’d)

Asat19October2017


ANALYSIS OF RCUIDS HOLDINGS (Cont’d)

Asat19October2017

Directors’ RCUIDS Holdings as at 19 October 2017(As per the Register of Directors’ RCUIDS Holdings of the Company)

Direct IndirectNames No. of RCUIDS % No. of RCUIDS %

1. TanSriAbdRahmanBinMamat - - - -2. TanSriDato’LawTienSeng - - 75,032,819(a) 29.083. LeeChingKion - - - -4. NgSoonLai@NgSiekChuan - - - -5. LeowHoiLoong@LiowHoiLoong - - - -6. FooKokSiew - - - -7. TanShauMing - - 176,000(b) 0.078. LawWaiCheong - - 75,032,819(c) 29.08

Notes:

(a) DeemedinterestpursuanttoSection8oftheCompaniesAct2016byvirtueofhisRCUIDSholdingsinAmardaleOffshore Inc.whichhasacontrollinginterestinTSLawInvestmentsLimited,asubstantialshareholderintheCompany.(b) DeemedinterestpursuanttoSections59(11)(c)and197oftheCompaniesAct2016byvirtueofhisspouse,MadamNg SiewCho’sdirectshareholdingsintheCompany.(c) Deemed interestpursuant toSections8and197of theCompaniesAct2016byvirtueofhis father,TanSriDato’Law

TienSeng’sRCUIDSholdingsinAmardaleOffshoreInc.whichhasacontrollinginterestinTSLawInvestmentLimited,asubstantialshareholderintheCompany.


ANALYSIS OF WARRANT HOLDINGSAsat19October2017

No.ofWarrantsinIssue :285,163,313 No.ofWarrantHolders :2,282 ExercisePriceofWarrants :RM0.50pershare VotingRights :One(1)Voteperwarrantholderonshowofhands }inthemeeting :One(1)Voteperwarrantholderonapollofwarrant }ofwarrant holders }holders Analysis By Size Of Warrant Holdings As At 19 October 2017

Size of Warrant Holdings No. of Warrant Holders % No. of Warrants %

1-99 24 1.05 1,113 0.00100-1,000 176 7.71 113,720 0.041,001-10,000 862 37.77 4,228,505 1.4810,001-100,000 923 40.46 37,652,770 13.20100,001tolessthan5%ofissuedwarrant 294 12.88 142,691,400 50.055%andaboveofissuedwarrant 3 0.13 100,475,805 35.23

Total 2,282 100.00 285,163,313 100.00

LIST OF THIRTY (30) LARGEST WARRANT HOLDERS AS AT 19 OCTOBER 2017

No. Names No. of Warrants Percentage (%)1. HSBCNOMINEES(ASING)SDNBHD EXEMPTANFORCREDITSUISSE(SGBR-TST-ASING) 45,442,986 15.94

2. CARTABANNOMINEES(ASING)SDNBHD EXEMPTANFORSTANDARDCHARTEREDBANKSINGAPOREBRANCH (SGPVBCLAC) 35,032,819 12.29


4. TANCHINTEONG 12,000,000 4.21


6. LIMSOONGUAN 6,000,000 2.10

7. MAYBANKSECURITIESNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORRONIETANCHOOSENG (MARGIN) 3,000,000 1.05

8. SITHOYOKEMENG 3,000,000 1.05

9. PUBLICNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORTANEELIANG(E-SS2/KDA) 2,800,000 0.98

10. MAYBANKSECURITIESNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORCHAIYENGSUN(MARGIN) 2,488,000 0.87

11. NGYINGZHI 2,298,800 0.81

Warrant B


ANALYSIS OF WARRANT HOLDINGS (Cont’d)

Asat19October2017

LIST OF THIRTY (30) LARGEST WARRANT HOLDERS AS AT 19 OCTOBER 2017 (Cont’d)

No. Names No. of Warrants Percentage (%)12. HOOWANFATT 2,172,400 0.76

13. YAPKIMFOONG 1,994,400 0.70

14. TANBOONHAR 1,623,000 0.57

15. AFFINHWANGNOMINEES(TEMPATAN)SDN.BHD. PLEDGEDSECURITIESACCOUNTFORTANBOONHAR(TAN8642C) 1,564,800 0.55

16. ALLIANCEGROUPNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORRONIETANCHOOSENG (8058147) 1,500,000 0.53

17. KENANGANOMINEES(ASING)SDNBHD EXEMPTANFORPHILLIPSECURITIESPTELTD(CLIENTACCOUNT) 1,500,000 0.53

18. LOHLEEHUA 1,450,000 0.51

19. KONGBEEYEE 1,400,000 0.49

20. TANKIMPIAU 1,400,000 0.49

21. TAICHANGENG@TEHCHANGYING 1,350,000 0.47

22. PUBLICNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORCHONGCHOOFON(E-TMR) 1,324,800 0.46

23. WONGAHWAH 1,200,000 0.42

24. LIMWANKEONG 1,098,400 0.39

25. PUBLICNOMINEES(TEMPATAN)SDNBHD PLEDGEDSECURITIESACCOUNTFORQUAHLIANHUAT(E-KTU) 1,086,500 0.38

26. THAMKOKWING 1,010,000 0.35

27. AFFINHWANGNOMINEES(TEMPATAN)SDN.BHD PLEDGEDSECURITIESACCOUNTFORCHONGMEEFAH@FEDERICK CHONG 1,000,000 0.35

28. AFFINHWANGNOMINEES(TEMPATAN)SDN.BHD PLEDGEDSECURITIESACCOUNT FORCHANYINPENG 1,000,000 0.35

29. JASONYAWCHEUKHING 1,000,000 0.35

30. MINGKEECHOY 1,000,000 0.35

Total: 167,360,905 58.68


ANALYSIS OF WARRANT HOLDINGS (Cont’d)

Asat19October2017

Directors’ Warrant Holdings as at 19 October 2017(As per the Register of Directors’ Warrant Holdings of the Company)

Direct IndirectNames No. of Warrants % No. of Warrants %

1. TanSriAbdRahmanBinMamat - - - -2. TanSriDato’LawTienSeng - - 75,032,819(a) 26.313. LeeChingKion - - - -4. NgSoonLai@NgSiekChuan - - - -5. LeowHoiLoong@LiowHoiLoong - - - -6. FooKokSiew - - - -7. TanShauMing - - 176,000(b) 0.068. LawWaiCheong - - 75,032,819(c) 26.31

Notes:

(a) DeemedinterestpursuanttoSections59(11)(c),8and197oftheCompaniesAct2016byvirtueofhiswarrantholdingsin AmardaleOffshoreInc.whichhasacontrollinginterest inTSLawInvestmentsLimited,asubstantialshareholder inthe Company.(b) DeemedinterestpursuanttoSections59(11)(c)and197oftheCompaniesAct2016byvirtueofhisspouse,MadamNg SiewCho’sdirectshareholdingsintheCompany.(c) DeemedinterestpursuanttoSections8and197oftheCompaniesAct2016byvirtueofhisfather,TanSriDato’Law

TienSeng’swarrantholdingsinAmardaleOffshoreInc.whichhasacontrolinginterestinTSLawInvestmentsLimited,asubstantialShareholderintheCompany.


NOTICEISHEREBYGIVENTHATtheTwenty-FirstAnnualGeneralMeetingoftheCompanywillbeheldatSetiaCityConventionCentre,FunctionRoom8,1stFloor,No.1,JalanSetiaDagangAGU13/AG,SetiaAlam,SeksyenU13,40170ShahAlam,SelangorDarulEhsanonMonday,18December2017at10.00a.m.forthefollowingpurposes:-

A G E N D A

ORDINARY BUSINESS:-

1. ToreceivetheAuditedFinancialStatementsoftheCompanyfortheyearended31July2017togetherwiththeDirectors’andAuditors’Reportsattachedthereon.

2. To approve the Directors’ fees of RM360,000 for the financial year ended 31 July 2017.

3. To re-elect the following Directors who are retiring in accordance with Article 79 of theCompany’sArticlesofAssociation:-

3.1 TanSriAbdRahmanBinMamat

3.2 Mr.NgSoonLai@NgSiekChuan

3.3 Mr.LeeChingKion

4. Tore-electMr.LawWaiCheongwhoisretiringinaccordancewithArticle84oftheCompany’s ArticlesofAssociation.

5. Tore-appointMessrsKPMGPLTastheCompany’sAuditorsfortheensuingyearandtoauthorise theDirectorstofixtheirremuneration.6. AS SPECIAL BUSINESS:-

Toconsiderand,ifthoughtfit,topasswithorwithoutmodifications,thefollowingResolutions:-

6.1 Authority to Allot Shares Pursuant to Sections 75 and 76 of the Companies Act 2016

“THAT subject always to the approvals of the relevant authorities, theDirectors beherebyauthorisedpursuanttoSections75and76oftheCompaniesAct2016toallotandissuesharesintheCompanyatanytimeanduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmayintheirabsolutediscretion,deemfit,providedthattheaggregatenumberofsharestobeissuedpursuanttothisresolutiondoesnotexceed10%ofthetotalissuedcapitaloftheCompany(excludingtreasuryshares)atthetimeofissueAND THATtheDirectorsbeherebyalsoempoweredtoobtaintheapprovalforthelistingofandquotationfortheadditionalsharestobeissuedonBursaMalaysiaSecuritiesBerhadAND FURTHER THATsuchauthorityshallcontinuetobeinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany

Ordinary Resolution 1







Please refer to Note B on this Agenda

NOTICE OF TWENTY-FIRST ANNUAL GENERAL MEETING


6.2 Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (“Proposed Renewal of Shareholders’ Mandate”)

“THATtheCompanyand/oritssubsidiariesbeherebyauthorisedtoenterintorecurrentrelated party transactions of a revenue or trading nature as specified in Section2.3.2 of the Circular to Shareholders dated 24 November 2017, provided that sucharrangements and/or transactions which are necessary for the Group’s day-to-dayoperationsareundertakenintheordinarycourseofbusiness,atarm’slengthbasis,onnormalcommercial termswhicharenotmorefavourabletotheRelatedPartiesthanthosegenerallyavailabletothepublicandnotdetrimentaltotheminorityshareholdersoftheCompany.

AND THAT theDirectorsoftheCompanybeherebyauthorisedtocompleteanddoallsuchactsandthings(includingexecutingsuchdocumentsasmayberequired)astheymayconsiderexpedientornecessaryor in thebest interestof theCompanytogiveeffecttotheProposedRenewalofShareholders’Mandate.

AND FURTHER THATsuchauthorityshallcontinuetobeinforceuntil:-

(i) the conclusionof thenextAnnualGeneralMeeting (“AGM”)of theCompanyfollowingthegeneralmeetingatwhichsuchProposedRenewalofShareholders’Mandatewaspassed,atwhichtimeitwill lapse,unlessbyordinaryresolutionpassedatthemeeting,theauthorityisrenewedeitherunconditionallyorsubjecttoconditions;

(ii) theexpirationoftheperiodwithinwhichthenextAGMafterthedateitisrequiredtobeheldpursuanttoSection340(2)oftheCompaniesAct2016(“theAct”)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection340(4)oftheAct);or

(iii) revoked or varied by ordinary resolution passed by the shareholders of the Companyingeneralmeeting,

whicheveristheearlier.”

7. TotransactanyotherbusinessoftheCompanyofwhichduenoticeshallbegiveninaccordance withtheCompany’sArticlesofAssociationandtheCompaniesAct2016.

BYORDEROFTHEBOARD HIAP TECK VENTURE BERHAD

_____________________________ NG YIM KONG (LS 0009297) CompanySecretary

SelangorDarulEhsan

Date:24November2017

NOTICE OF TWENTY-FIRST ANNUAL GENERAL MEETING(Cont’d)



Notes:

A. Appointment of Proxy

1. AmemberentitledtoattendandvoteattheMeetingisentitledtoappointaProxyorProxiestoattendandvoteon his(her)behalf.AProxymaybutneednotbeamemberoftheCompany.

2. Whereamemberappointstwo(2)ormoreProxies,theappointmentshallbeinvalidunlesshe(she)specifiesthe proportionofhis(her)holdingstoberepresentedbyeachProxy.

3. TheFormofProxyshallbesignedbytheappointerorofhis(her)attorneydulyauthorisedinwritingor,iftheappointer isacorporation,mustbeexecutedunderitscommonsealorbyitsdulyauthorisedattorneyorofficer.

4. TheinstrumentappointingaProxymustbedepositedattheRegisteredOfficeoftheCompanyatLot6096,JalanHajiAbdulManan,Batu5½,OffJalanMeru,41050Klang,SelangorDarulEhsannotlessthanforty-eight(48)hoursbeforethetimefortheMeetingoratanyadjournmentthereof.

5. AproxyappointedtoattendandvoteatameetingoftheCompanyshallhavethesamerightasthemembertospeak atthemeeting.

6. WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.

B. Audited Financial Statements for the Financial Year ended 31 July 2017

TheseAudited Financial Statements inAgenda 1 aremeant for discussion only as the approval of shareholders is notrequiredpursuanttotheprovisionofSection340(1)oftheCompaniesAct2016.Hence,thisAgendaisnotputforwardforvotingbytheshareholdersoftheCompany.

EXPLANATORY NOTES ON SPECIAL BUSINESS OF THE AGENDA

(a) Resolution pursuant to the Authority to Allot Shares pursuant to Sections 75 and 76 of the Companies Act 2016

TheproposedResolution7underitem6.1oftheAgenda,ifpassed,willempowertheDirectorsoftheCompany,fromthedateoftheaboveAnnualGeneralMeeting,withtheauthoritytoallotandissuesharesintheCompanyuptoanamountnotexceedingintotal10%oftheissuedcapitaloftheCompany(excludingtreasuryshares)forsuchpurposesastheDirectorsconsiderwouldbeinthebestinterestoftheCompany.Thisauthority,unlessrevokedorvariedatageneralmeeting,willexpireatthenextAnnualGeneralMeeting.

ThegeneralmandatewhichseekstograntauthoritytoDirectorstoallotandissuesharesisarenewalofthemandatethatwasapprovedbytheshareholdersat theTwentiethAnnualGeneralMeeting (“AGM”)heldon15December2016.TherenewalofthegeneralmandateistoprovideflexibilitytotheCompanytoissuenewshareswithouttheneedtoconveneaseparategeneralmeetingtoobtainshareholders’approvalsoastoavoidincurringadditionalcostandtime.Thepurposeofthisgeneralmandateisforpossiblefundraisingexercisesincludingbutnotlimitedtoplacementofsharesforpurposeoffundingcurrentand/orfutureinvestmentprojects,workingcapitaland/oracquisitions.

TheCompanyhasnotissuedanynewsharepursuanttoSection75and76oftheCompaniesAct2016underthegeneralmandatewhichwasapprovedattheTwentiethAnnualGeneralMeeting.



(b) Resolution pursuant to the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

TheProposedOrdinaryResolution8underitem6.2above,ifpassed,willenabletheCompanyanditssubsidiaries(“theGroup”)tocontinueenteringintothespecifiedRecurrentRelatedPartyTransactionsassetoutinSection2.3.2oftheCirculartoShareholdersdated24November2017withthespecifiedclassesoftheRelatedPartiesmentionedthereinwhicharenecessaryfortheGroup’sday-to-dayoperations.ForfurtherinformationontheProposedRenewalofShareholders’MandateforRecurrentRelatedPartyTransactionsofaRevenueorTradingNature,pleaserefertotheCirculartoShareholdersdated24November2017enclosedtogetherwiththeCompany’s2017AnnualReport.

GENERAL MEETING RECORD OF DEPOSITORS

Forthepurposeofdeterminingamemberwhoshallbeentitledtoattendthismeeting,theCompanyshallberequestingtheBursaMalaysiaDepositorySdnBhdinaccordancewithArticle55(2)oftheCompany’sArticlesofAssociationandSection34(1)oftheSecuritiesIndustry(CentralDepositories)Act1991,toissueaGeneralMeetingRecordofDepositorsasat8December2017.OnlyadepositorwhosenameappearsontheRecordofDepositorsasat8December2017shallbeentitledtoattendthismeetingorappointproxy/proxiestoattendand/orvoteinhisstead.


TWENTY FIRST ANNUAL GENERAL MEETINGFORM OF PROXY

I/We, (NRICNo./CompanyNo. ) (FULLNAMEINCAPITALLETTERS)

of(FULLADDRESS)

being a member of HIAP TECK VENTURE BERHAD hereby appoint * the Chairman of the meeting or

(NRICNo. )of (FULLNAME)

or

(FULLADDRESS)

failingwhom (NRICNo. )of (FULLNAME)

as(FULLADDRESS)

*my/*ourProxy(ies) tovote for*me/*usandon*my/*ourbehalfat theTwenty-FirstAnnualGeneralMeetingof theCompany tobeheldattheSetiaCityConventionCentre,FunctionRoom8,1stFloor,No.1,JalanSetiaDagangAGU13/AG,SetiaAlam,SeksyenU13,40170ShahAlam,SelangorDarulEhsanonMonday,18December2017at10.00a.m.andatanyadjournmentthereoffororagainsttheresolution(s)tobeproposedthereat.

*My/*Ourproxy(ies)*is/*aretovoteontheResolutionsasindicatedbelow:-

FORM OF PROXY

[Pleaseindicatewith(X)inthespacesprovidedaboveastohowyouwishyourvotetobecasted.Ifnospecificdirectionastovotingisgiven,theProxywillvoteorabstainathis(her)discretion]

Datedthisdayof2017

[Signature/CommonSealofMember]* Delete if not applicable

NumberofOrdinarysharesheld:

NO. RESOLUTIONS FOR AGAINST

1 ToapprovetheDirectors’feesofRM360,000fortheyearended31July2017. 2 Tore-electTanSriAbdRahmanBinMamatwhoisretiringinaccordancewithArticle79ofthe Company’sArticlesofAssociation: 3 Tore-electMr.NgSoonLai@NgSiekChuanwhoisretiringinaccordancewithArticle79ofthe Company’sArticlesofAssociation: 4 Tore-electMr.LeeChingKionwhoisretiringinaccordancewithArticle79oftheCompany’sArticles ofAssociation: 5 Tore-electMr.LawWaiCheongwhoisretiringinaccordancewithArticle84oftheCompany’sArticles ofAssociation.

6 Tore-appointMessrsKPMGPLTastheCompany’sAuditorsfortheensuringyearandtoauthorisethe Directorstofixtheirremuneration. 7 TogranttheauthoritytoallotandissuesharespursuanttoSections75and76oftheCompaniesAct, 2016 8 ToapprovetheproposedRenewalofShareholders’MandateforRecurrentRelatedPartyTransactions ofaRevenueorTradingNature.

HIAP TECK VENTURE BERHAD(CompanyNo.421340-U)

Notes :

1. A member entitled to attend and vote at the Meeting is entitled to appoint a Proxy or Proxies to attend and vote on his (her) behalf. A Proxy may but need not be a member of the Company.

2. Where a member appoints two (2) or more Proxies, the appointment shall be invalid unless he (she) specifies the proportion of his (her) holdings to be represented by each Proxy.

3. The Proxy Form shall be signed by the appointer or of his (her) attorney duly authorised in writing or, if the appointer is a corporation, must be executed under its common seal or by its duly authorised attorney or officer.

4. The instrument appointing a Proxy must be deposited at the Registered Office of the Company at Lot 6096, Jalan Haji Abdul Manan, Batu 5 ½, Off Jalan Meru, 41050 Klang, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for the Meeting or at any adjournment thereof.

5. A proxy appointed to attend and vote at a meeting of a company shall have the same right as the member to speak at the meeting.

6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

Foldhere

Foldhere

TheCompanySecretaryHIAP TECK VENTURE BERHAD (421340-U)

Lot6096,JalanHajiAbdulMananBatu5½,OffJalanMeru

41050KlangSelangorDarulEhsan

AffixSTAMP

HIAP TECK VENTURE BERHAD(421340-U)

Lot 6096, Jalan Haji Abdul MananBatu 5 ½, Off Jalan Meru

41050 KlangSelangor Darul Ehsan

Tel : 03-3377 8888www.htgrp.com.my

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