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Always Growing

Like bamboo trees, we strive for commitment to achieve continuous growth. Our growth can be quite remarkable when we look back at what or where we used to be. Continuous improvement that is more steady and incremental is our aim and with sustained effort, we ensure we are always growing

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CONTENTSNotice of Annual General Meeting

Corporate Information

Corporate Structure

Pro�le of Directors

Pro�le of Key Senior Management

Group Financial Highlights

Management Discussion & Analysis

Corporate Governance Statement

Statement on Risk Management and Internal Control

Audit Committee Report

Corporate Social Responsibility

Financial Statements

List of Properties

Analysis of Shareholdings

Proxy Form

3SHL CONSOLIDATED BHD

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 23rd Annual General Meeting of SHL Consolidated Bhd (the Company) will be held at Ballroom 1, Level 1, Corus Hotel Kuala Lumpur, Jalan Ampang, 50450 Kuala Lumpur, on Thursday, 24 August 2017 at 11.00 a.m. for the purpose of transacting the following businesses :-

AS ORDINARY BUSINESS

1. ToreceivetheAuditedFinancialStatementsforthefinancialyearended31March2017 together with the Reports of the Directors and the Auditors thereon.

2. ToapproveaFinalSingle-TierDividendof6senpershareinrespectofthefinancialyearended31March2017.

3. ToapprovethepaymentofDirectors’feesforthefinancialyearended31March2017.

4. To re-elect the following Directors who retire in accordance with Article 88 of the Company’sArticlesofAssociation:

i. Mr. Souren Norendra ii. Mr. Ng Chin Hoo

5. Tore-appointMessrsKhooWong&ChanasAuditorsoftheCompanyforthefinancialyearending31March2018andtoauthorisetheDirectorstofixtheirremuneration.

AS SPECIAL BUSINESS

Toconsiderand,ifthoughtfit,topassthefollowingOrdinaryResolutions:

6. Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

“THAT subject always to Bursa Malaysia Securities Berhad’s Main Market ListingRequirements, approval be and is hereby given to the Company and its subsidiaries (SHL Group) to enter into recurrent related party transactions of a revenue or trading naturewiththoserelatedpartiesassetoutinSection2.3oftheCirculartoShareholdersdated 28 July 2017, which are necessary for the day to day operations in the ordinary courseofbusinessandarecarriedoutatarms’ lengthbasisonnormalcommercialterms of the SHL Group on terms not more favourable to the Related Parties than those generally available to the public and are not detrimental to minority shareholders of the Company and such approval shall continue to be in force until:

i. theconclusionofthenextAnnualGeneralMeetingoftheCompany(AGM)atwhich time it will lapse, unless by a resolution passed at the AGM the mandate is again renewed; or

ii. theexpirationoftheperiodwithinwhichthenextAGMafterthedateitisrequiredtobeheldpursuanttoSection340(2)oftheCompaniesAct,2016(theAct)(butshallnotextendtosuchextensionasmaybeallowedpursuanttoSection340(4)of the Act; or

iii. revokedorvariedbyresolutionpassedbytheshareholdersinageneralmeeting,

whichever is the earlier,

AND THAT the Directors of the Company be and are hereby authorised to complete anddoallsuchactsandthingsastheymayconsiderexpedientornecessarytogiveeffecttotheProposedShareholders’Mandate.”

(Please refer to Explanatory

Note 1)

Resolution 1

Resolution 2

Resolution 3Resolution 4

Resolution 5


Note 2)Resolution 6

4 ANNUAL REPORT 2017

7. Authority to Issue Shares Pursuant to Section 76 of the Companies Act, 2016

“THAT pursuant to Section 76 of the Companies Act 2016, the Articles of Association oftheCompany, theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad and the approvals of the relevant governmental/regulatory authorities, where such approval is required, the Directors be and are hereby authorised to issue and allot shares in the Company to such persons, at any time, and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deemfitprovidedthattheaggregatenumberofsharestobeissueddoesnotexceed10% of the total number of issued shares of the Company for the time being AND THAT the Directors be and also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad AND THATsuchauthorityshallcontinueinforceuntiltheconclusionofthenextAGMoftheCompany.”

8. To transact any other business of which due notice shall have been given.

NOTICE OF ANNUAL GENERAL MEETING (cont’d)

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN THAT the Final Single-Tier Dividend of 6 sen per share in respect of the financialyearended31March2017,ifapproved,willbepaidon5 October 2017 to depositors registered in the Record of Depositors of the Company on 18 September 2017.

A Depositor shall qualify for entitlement to the dividend only in respect of: -

i. SharestransferredintotheDepositor’sSecuritiesAccountbefore4.00p.m.on18September2017inrespect of transfers; and

ii. Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

By Order of the Board

CHOK KWEE WAH (MACS 00550)TAN KEAN WAI (MAICSA7056310)Secretary

Kuala Lumpur28 July 2017

EXPLANATORY NOTES:

1. Item 1 of the Agenda: Receipt of Audited Financial Statements and Report.

This agenda is meant for discussion only as the provision of Section 340(1)(a) of the Act does not require shareholders’ approval for the Audited Financial Statements. Hence, this Agenda is not put forward for voting.

2. Item 6 of the Agenda: Proposed Shareholders’ Mandate for recurrent related party transactions of a revenue or trading nature.

The Ordinary Resolution 6 is to seek a fresh shareholders’ mandate for the recurrent related party transactions comprising the shareholders’ mandate which has been obtained on 30 August 2016 as well as additional recurrent related party transactions. Further information on the Proposed Shareholders’ Mandate is set out in the Circular to Shareholders dated 28 July 2017, which is despatched together with this Annual Report 2017.


Note 3)Resolution 7


NOTICE OF ANNUAL GENERAL MEETING (cont’d)

3. Item 7 of the Agenda: Authority to issue shares pursuant to Section 76 of the Companies Act, 2016.

i. The Ordinary Resolution 7 is to seek a fresh general mandate which will empower the Directors to issue shares in the Company up to an amount not exceeding in total ten percent (10%) of the issued capital of the Company for such purposes as the Directors consider would be in the best interest of the Company in order to avoid any delay and cost involved in convening a general meeting to approve such issue of shares. This authority, unless revoked or varied by the Company at a General Meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

ii. ThisgeneralmandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,including but not limited to further placement of shares, for purpose of funding current and/or future investment project(s), working capital and/or acquisitions as well as any strategic opportunities involving equity deals which require the Company to allot and issue new shares on urgent basis.

iii. The Company has not issued any shares under the previous general mandate which has been obtained on 30 August 2016 and which will lapse at the conclusion of the 23rd AGM to be held on 24 August 2017.

NOTES:

1. Appointment of Proxy.

(a) Only depositors whose names appear in the Register of Depositors as at 17 August 2017 shall be entitled to attend in person or appoint proxies to attend and/or vote on their behalf at the 23rd Annual General Meeting.

(b) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A proxy may but does not need to be a member of the Company pursuant to Section 334 of the Act.

(c) Whereamemberappoints twoproxies, theappointments shall be invalid unless he specifies theproportions of his holdings to be represented by each proxy.

(d) In the event the member(s) duly executes the form of proxy but does not name any proxy, such member shall be deemed to have appointed the Chairman of the Meeting as his/their proxy, provided always that the rest of the form of proxy, other than the particulars of the proxy, have been duly completed by the member(s).

(e) In the case of a corporate member, the instrument appointing a proxy must be either executed underitscommonsealorunderthehandofitsofficerorattorneydulyauthorised.Thecorporationmayby its resolutionof itsBoardoracertificateofauthorisationby theCorporation toappointaperson or persons to act as its representative or representatives to attend and vote on their behalf.

(f) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in theCompanyformultiplebeneficialownersinonesecuritiesaccount(OmnibusAccount),thereisnolimit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account it holds.

(g) TheinstrumentappointingaproxymustbedepositedattheRegisteredOfficeoftheCompanyat6th Floor, Wisma Sin Heap Lee, 346, Jalan Tun Razak, 50400 Kuala Lumpur not less than forty-eight (48) hours before the time set for the Annual General Meeting or at any adjournment thereof.

2. Registration of Members/Proxies

(a) Registration will start at 9.30 a.m. on the day of the 23rd AGM.(b) Members/proxies are required to produce original identity cards (IC)/documents during registration

forverification.PleaseremembertocollectyourICthereafter.(c) Parking tickets can be validated at the registration counter for members/proxies who park their

vehicles in Corus Hotel Kuala Lumpur only. SHL will NOT validate nor reimburse members/proxies for parking charges using Touch’ N Go card, or the valet parking services at the podium.

(d) Each member/proxy will be given a wristband upon registration. No person will be allowed to enter the meeting room without wearing the wristband. There will be no replacement in the event members/proxies lose or misplace the wristband. Members/proxies are allowed to enter the meeting room at 11.00 a.m.

(e) Theregistrationcounterwillonlyprocessverificationofidentitiesandregistration.Forotherqueries/clarification,pleaseproceedtotheHelpDeskcounter.

(f) The registration counters will be closed at 11.45 a.m. Unregistered members/proxies are not allowed to enter the meeting room after the registration is closed.

(g) Each member and/or proxy attending the 23rd AGM in person will be entitled for one (1) lunch voucher only. Where a member and/or proxy is also appointed as proxy for other members to attend the 23rd AGM, he or she will only be entitled to one (1) lunch voucher only regardless of the number of members he or she is representing.

(h) If you are attending the meeting as shareholder as well as proxy, you will be registered once and will begivenonlyoneidentificationwristbandtoenterthemeetinghall.


CORPORATE INFORMATION

BOARD OF DIRECTORS

Non-Independent Non-Executive ChairmanY.A.M.TengkuAbdulSamadShahIbniAlmarhumSultanSalahuddinAbdulAzizShah

Executive DirectorsDato’SriYapTeiongChoonDato’SriIr.YapChongLee

Non-Independent Non-Executive DirectorsWongTiekFong

Au Lai Koong

Senior Independent Non-Executive DirectorSouren Norendra

Independent Non-Executive DirectorNg Chin Hoo

AUDIT COMMITTEE

Souren Norendra (Chairman) WongTiekFongNg Chin Hoo

REMUNERATION COMMITTEE

Souren Norendra (Chairman)Dato’SriYapTeiongChoonDato’SriIr.YapChongLeeNg Chin Hoo

NOMINATION COMMITTEE

Souren Norendra (Chairman)WongTiekFongNg Chin Hoo

REGISTERED OFFICE

6th Floor, Wisma Sin Heap Lee346,JalanTunRazak50400 Kuala LumpurTel:603-21637788Fax:603-21631391E-mail: [email protected]: www.shlcb.com.my

SHARE REGISTRAR

Bina Management (M) Sdn BhdLot 10, The Highway Centre, Jalan 51/205, 46050 Petaling Jaya, Selangor Darul EhsanTel:603-77843922Fax:603-77841988

AUDITORS

Khoo Wong & ChanChartered Accountants8.06-8.08, 8th Floor, PlazaFirstNationwide,161, Jalan Tun H. S. Lee50000 Kuala Lumpur

COMPANY SECRETARIES

ChokKweeWah(MACS00550)TanKeanWai(MAICSA7056310)

PRINCIPAL BANKERS

MalayanBankingBerhadHongLeongBankBerhadCIMBBankBerhadBangkokBankBerhadOCBCBank(Malaysia)BerhadUnitedOverseasBank(Malaysia)BhdPublicBankBerhadRHBBankBerhad

STOCK EXCHANGE LISTING

MainMarketofBursaMalaysiaSecuritiesBerhadStockName:SHLStockCode:6017


Continuous Growing


INVESTMENT AND SERVICES

100%

100%

100%

60%

Integrated Management Corporation Sdn. Bhd.

SHL Corporate Services Sdn. Bhd.

SHL Realty Sdn. Bhd.

Goodstock Land Sdn. Bhd.

SUPPLY AND LOGISTICS

100%

100%

100%

100%

Sin Heap Lee Company Sdn. Berhad

Sin Heap Lee Brickworks Sdn. Bhd.

Kajang Granite Quarry Sdn. Bhd.

Senick Sdn. Bhd.

CONSTRUCTION

100%

100%

100%

Sin Heap Lee Construction Sdn. Bhd.

* SHL Infra Sdn. Bhd.

* Soil-Mech Drillers Sdn. Bhd.

DEVELOPMENT

100%

100%

100% 100%

100%100%

Ho Sin & Son Enterprise Sdn. Bhd.

Goodstock (Tawau) Sdn. Bhd.

Sin Heap Lee Development Sdn. Bhd.

Mayang Kiara Sdn. Bhd.

100%

100%

Sukma Pesona Sdn. Bhd.

Wilayah Builders Sdn. Bhd.

* under the process of Members’ Voluntary Winding Up pursuant to Section 254(1) of the Companies Act, 1965

SHL-M Sdn. Bhd.

Sungai Long Golf Resort Berhad

30% OPT Ventures Sdn. Bhd.

67% SHL-M Ventures Sdn. Bhd.

CORPORATE STRUCTURE


INVESTMENT AND SERVICES

100%

100%

100%

60%

Integrated Management Corporation Sdn. Bhd.

SHL Corporate Services Sdn. Bhd.

SHL Realty Sdn. Bhd.

Goodstock Land Sdn. Bhd.

SUPPLY AND LOGISTICS

100%

100%

100%

100%

Sin Heap Lee Company Sdn. Berhad

Sin Heap Lee Brickworks Sdn. Bhd.

Kajang Granite Quarry Sdn. Bhd.

Senick Sdn. Bhd.

CONSTRUCTION

100%

100%

100%

Sin Heap Lee Construction Sdn. Bhd.

* SHL Infra Sdn. Bhd.

* Soil-Mech Drillers Sdn. Bhd.

DEVELOPMENT

100%

100%

100% 100%

100%100%

Ho Sin & Son Enterprise Sdn. Bhd.

Goodstock (Tawau) Sdn. Bhd.

Sin Heap Lee Development Sdn. Bhd.

Mayang Kiara Sdn. Bhd.

100%

100%

Sukma Pesona Sdn. Bhd.

Wilayah Builders Sdn. Bhd.

* under the process of Members’ Voluntary Winding Up pursuant to Section 254(1) of the Companies Act, 1965

SHL-M Sdn. Bhd.

Sungai Long Golf Resort Berhad

30% OPT Ventures Sdn. Bhd.

67% SHL-M Ventures Sdn. Bhd.

PROFILE OF DIRECTORS

Y.A.M. Tengku Abdul Samad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah(Non-Independent Non-Executive Chairman)(Age 64, Malaysian, Male)

TengkuAbdulSamadShahwasappointedtotheBoardon1March1995.HehadhisearlyeducationinVictoriaInstitution,KualaLumpurandattendedtheWolaroiCollegeNSW,Australiafrom1970to1972.

He is currently the Chairman of the Company and a Director of several subsidiaries of the Company. He is a director of a public company within the SHL Group, namely Sungai Long Golf Resort Berhad.

TengkuAbdulSamadShahattendedfour(4)outoffive(5)BoardMeetingsheldduringthefinancialyearended31March2017.

HedoesnothaveanyfamilyrelationshipwithanyDirectorand/ormajorshareholder,noranyconflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffenceswithinthepast5years(otherthantrafficoffences,ifany)noranypublicsanctionorpenaltyimposedbyregulatorybodiesduringthefinancialyear.

Dato’ Sri Yap Teiong Choon(Executive Director)(Age 64, Malaysian, Male)

Dato’SriYapwasappointedtotheBoardon1March1995.HehadhisearlyeducationinVictoriaInstitution,Kuala Lumpur. He obtained a Bachelor of Commerce with double majors in Economics and Accounting in1976andaMasterinCommercewithHonoursmajoringinAdvanceAccountingfromtheUniversityofCanterbury,NewZealandin1977.HeisaCharteredAccountantbyprofessionandisamemberoftheMalaysian Institute of Accountants, the New Zealand Society of Accountants, a Fellow of the Institute of CertifiedPublicAccountantsofSingaporeandtheAustralianSocietyofCertifiedPracticingAccountants.

He started his career withMessrs Hanafiah, Raslan andMohamad in 1977 and subsequently left theaccountingprofessionin1982andhassincebeenmanagingtheSinHeapLeeGroupofCompanies.HeispresentlyanExecutiveDirectorandaDirectorofallsubsidiariesoftheCompany.Heisadirectorofapublic company within the SHL Group, namely Sungai Long Golf Resort Berhad.

Dato’ Sri Yap is amemberof the RemunerationCommitteeof theCompany.Heattendedall BoardMeetingsheldduringthefinancialyearended31March2017.

HeisthebrotherofDato’SriIr.YapChongLee,anExecutiveDirectoroftheCompany.Saveasdisclosedherein, he does not have any family relationship with any Director and/or major shareholder, nor any conflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffenceswithinthepast5years(otherthantrafficoffences,ifany),noranypublicsanctionorpenaltyimposedbyregulatorybodiesduringthefinancialyear.


PROFILE OF DIRECTORS (cont’d)

Dato’ Sri Ir. Yap Chong Lee(Executive Director)(Age 63, Malaysian, Male)

Dato’Sri Ir.YapwasappointedtotheBoardon1March1995.HeobtainedaBachelorofTechnologymajoringinCivilandStructuralEngineeringfromBradfordUniversity,Englandin1978,aMasterofSciencemajoringinConstructionManagementfromBirminghamUniversity,Englandin1979andaPostgraduateCertifiedDiploma inAccountingandFinance,England in1979.He isaFellowofboththe InstitutionofEngineers, Malaysia and the Association of Consulting Engineers, Malaysia.

Hisworkingcareerbeganin1979,withaconsultingengineeringfirm,SepakatSetiaPerunding(Sendirian)BerhadandwassubsequentlyappointedasaDirectorofthefirmin1990.HehasbeeninvolvedinthemanagementofSinHeapLeeGroupofCompaniessinceMay1982.HeispresentlyanExecutiveDirectorand a Director of all subsidiaries of the Company. He is a director of a public company within the SHL Group, namely Sungai Long Golf Resort Berhad.

Dato’SriIr.YapisamemberoftheRemunerationCommitteeoftheCompany.Dato’SriIr.YapattendedallBoardMeetingsheldduringthefinancialyearended31March2017.

HeisthebrotherofDato’SriYapTeiongChoon,anExecutiveDirectoroftheCompany.Saveasdisclosedherein, he does not have any family relationship with any Director and/or major shareholder, nor any conflictofinterestwiththeCompany.Hehasnoconvictionsforanyoffenceswithinthepast5years(otherthantrafficoffences,ifany),noranypublicsanctionorpenaltyimposedbyregulatorybodiesduringthefinancialyear.

Wong Tiek Fong(Non-Independent Non-Executive Director)(Age 55, Malaysian, Male)

Mr. Wong was appointed to the Board on 1 April 2004. He obtained a Diploma in Commerce (Financial Accounting)fromTunkuAbdulRahmanCollege,KualaLumpur in1985.He isaCharteredAccountantbyprofessionandamemberof theMalaysian InstituteofAccountants, theChartered Tax InstituteofMalaysiaandafellowoftheAssociationofCharteredCertifiedAccountants,UnitedKingdom.

Hiscareerbeganin1985withafirmofCharteredAccountants,MessrsKhooWong&ChanasanAuditSeniorwherehegainedwideexperienceincorporateauditingandtaxationofdiverseindustries.PriortojoiningSHLGroup inMay1989asaFinancialAccountantresponsibleforthefinancialaccountingandmanagementofSHLGroup,hewasattachedtoKPMG,afirmofCharteredAccountants,asanAuditSenior.Subsequently,hewaspromotedastheFinancialControllerofSHLGroupinMay1995.Presently,heistheChiefFinancialOfficerofSHLGroupandaDirectorofseveralsubsidiariesoftheCompany.Heisadirector of a public company within the SHL Group, namely Sungai Long Golf Resort Berhad.

Mr.WongisamemberoftheAuditCommittee,NominationCommitteeandRiskManagementCommitteeoftheCompany.HeattendedallBoardMeetingsheldduringthefinancialyearended31March2017.



Souren Norendra(Senior Independent Non-Executive Director)(Age 47, Malaysian, Male)

Mr. Souren Norendra was appointed to the Board on 24 February 2010. He completed his secondary education at the Methodist Boys School, Kuala Lumpur and then proceeded to England where he read lawandattainedhis LLB (Hon) from theUniversityofHull in 1992.HeobtainedhisCertificateof LegalPractice(CLP)fromUniversityMalayaandwascalledtotheMalaysianBarin1995.

Hehasbeenpracticingasanadvocateandsolicitor inthefirmofMessrsNorendra&YapsincebeingcalledtotheBarandisnowaPartnerofthefirm.Hisareasofspecialtyareincorporateandconveyancinglaw.

Mr. Souren is the Chairman of the Audit Committee, Nomination Committee and Remuneration Committee oftheCompany.Heattendedfour(4)outoffive(5)BoardMeetingsheldduringthefinancialyearended31March2017.Hedoesnotholdanydirectorshipinanypubliccompaniesandlistedissuers.


Ng Chin Hoo(Independent Non-Executive Director)(Age 57, Malaysian, Male)

Mr. Ng was appointed to the Board on 2 December 2013. He obtained his Bachelor of Commerce(Commercial Law & Accounting) from University of Melbourne, Australia in 1983. He is a CharteredAccountant by profession and is a member of the Malaysian Institute of Accountants, a member of the InstituteofCertifiedPublicAccountantsoftheAustralianSocietyofCertifiedPracticingAccountantsanda member of the Institute Of Chartered Secretaries and Administrators.

Mr. Ng haswide experience inmanagement consulting and financialmanagement primarily gainedworkingforKPMGManagementConsultinginEnglandandMalaysia.Mr.NgwasanExecutiveDirectorof KPMG Management Consulting as well as Limited Partner with KPMG. Since leaving KPMG, Mr. Ng has held various senior positions in listed companies. He does not hold any directorship in any public companies and listed issuers.

Mr. Ng is a member of the Audit Committee, Nomination Committee and Remuneration Committee of the Company.HeattendedallBoardMeetingsheldduringthefinancialyearended31March2017.




Au Lai Koong(Non-Independent Non-Executive Director)(Age 52, Malaysian, Male)

Mr. Au was appointed to the Board on 26 May 2016. He obtained a Bachelor of Science degree in Civil andStructuralEngineeringfromBradfordUniversity,Englandin1988.

Hestartedhiscareerin1988asanEngineerandwaspromotedasaProjectManagerforSinHeapLeeConstruction Sdn Bhd in 1995. He has been involved in a wide range of development projects fromindustrial and housing to commercial buildings such as Wisma Sin Heap Lee, Clubhouse for Sungai Long Golf and Country Club, Menara Taipan, Taman Universiti Indah, Seri Kembangan, Taman Putra Indah, BandarSungaiLong,AlamBudiman,SungaiChohIndurtrialParkandKajangGoodviewHeights.Presently,he is the Senior Project Manager of SHL Group and a Director of several subsidiaries of the Company. He does not hold any directorship in any public companies and listed issuers.

Mr.AuisamemberofRiskManagementCommitteeoftheCompany.HeattendedallBoardMeetingsheldduringthefinancialyearended31March2017.




Wong Yew Mei(Project Budget Controller)(Age 59, Malaysian, Female)

MsWongwasappointedasProjectBudgetControllerofSHLGroupinDecember1988.SheobtainedaDiplomainTechnology(Building)fromTunkuAbdulRahmanCollege,KualaLumpurin1982andaMasterdegreeinBusinessAdministration,UniversityofEastAsia,Macauin1988.

In1982,shejoinedMessrsHashim&Lim,aquantitysurveyingconsultingfirminKualaLumpurinwhichshewasexposed toallaspectsofquantity surveyingworkson residential,hotelsandhigh-risebuildings. InOctober1986,shejoinedSHLGroupasanEstimatorandwasinvolvedinfeasibilitystudiesandestimatesfortheSHLGroup’spropertydevelopmentandconstructionprojects.

Ms.WongisamemberofRiskManagementCommitteeoftheCompany.

She does not hold any directorship in any public companies and listed issuers. She does not have any family relationshipwithanyDirectorand/ormajorshareholder,noranyconflictofinterestwiththeCompany.Shehasnoconvictionsforanyoffenceswithinthepast5years(otherthantrafficoffences, ifany)noranypublicsanctionorpenaltyimposedbyregulatorybodiesduringthefinancialyear.

Leong Chin Cheong(Senior Project Manager)(Age 57, Malaysian, Male)

MrLeongwasappointedasSeniorProjectManagerin1995.HeobtainedaBachelorofSciencedegreeinEngineeringmajoringinWaterResourcefromUniversityofGuelph,Guelph,Ontario,Canadain1984.

HejoinedSinHeapLeeConstructionSdnBhdasanEngineerinOctober1984andhasbeeninvolvedinthe project management of several housing development projects including Taman Sri Rawang, Rawang, Taman Hot Spring Jaya, Tawau, Wickham Residence, Ampang, Bandar Sungai Long, Cheras, AlamBudiman,ShahAlamandtwosmartschoolsatPutrajayaandCyberjaya,andGoodviewHeightsmixeddevelopment at Kajang.

Mr.LeongistheChairmanofRiskManagementCommitteeoftheCompany.

He does not hold any directorship in any public companies and listed issuers. He does not have any family relationshipwithanyDirectorand/ormajorshareholder,noranyconflictof interestwiththeCompany.Hehasnoconvictionsforanyoffenceswithinthepast5years(otherthantrafficoffences,ifany)noranypublicsanctionorpenaltyimposedbyregulatorybodiesduringthefinancialyear.

PROFILE OF KEY SENIOR MANAGEMENT


Revenue Profit before Tax

Equity attributable to Shareholders

(RM Million)

2013

2014

2015

2016

2017

Basic Earnings per Share

182.1

205.3

230.6

231.9

203.2

(RM Million)

2013

2014

2015

2016

2017

47.5

80.0

123.2

96.2

102.7

(RM Million)

2013

2014

2015

2016

2017

577.4

594.9

694.4

713.8

750.2

(Sen)

2013

2014

2015

2016

2017

14.40

24.09

42.73

32.90

33.99

GROUP FINANCIAL HIGHLIGHTS

FINANCIAL YEAR ENDED 2013 2014 2015 2016 2017

FINANCIAL RESULTS (RM Million)Revenue 182.1 205.3 230.6 231.9 203.2ProfitbeforeTax 47.5 80.0 123.2 96.2 102.7NetProfit 35.3 58.8 104.2 80.0 82.8NetProfitattributabletoShareholders 34.9 58.3 103.5 79.7 82.3 FINANCIAL POSITION (RM Million)TotalAssets 666.8 760.2 904.7 871.6 897.1Share Capital 242.1 242.1 242.1 242.1 242.1 EquityattributabletoShareholders 577.4 594.9 694.4 713.8 750.2 FINANCIAL RATIOS BasicEarningsperShare(sen) 14.40 24.09 42.73 32.90 33.99NetTangibleAssetsperShare(RM) 2.38 2.46 2.87 2.95 3.10ReturnonEquity(%) 6.04 9.81 14.90 11.17 10.97ReturnonTotalAssets(%) 5.30 7.74 11.52 9.18 9.23ReturnonInvestedCapital(%) 7.15 14.79 13.86 15.07 14.57GrossDividendperShare(sen) 12.00 19.00 25.00 20.00 18.00NetDividendperShare(sen) 9.00 17.25 25.00 20.00 18.00


StrENGth


Overview of Business Results and Operation

In2016,theMalaysianeconomyrecordedagrowthof4.2%(2015:5.0%)despiteconsiderableexternalanddomestic headwinds. The global economic landscape was challenging given the subdued global demand andlowcommodityprices.Internationalfinancialmarketswerealsosubjectedtoheighteneduncertaintywithsignificantreversalofcapitalflowsfromemergingeconomies.Domestically,theeconomycontinuedto face headwinds from the higher cost of living amid soft employment conditions. Concurrently, business andconsumersentimentswereaffectedbyaconfluenceofglobalanddomesticfactors,includingtheheightenedvolatilityinfinancialmarketsandthesignificantunderperformanceoftheringgit.

The principal activity of SHL Consolidated Bhd Group is effectively development of townships with different products to meet the affordability of different consumer groups. The property development projects are primarily located in Selangor Darul Ehsan. The property development segment is supported by an in-house construction arm, business segments of trading, investment, services, granite quarrying and manufacturing ofclay-bricktoenhancethedeliverysystemwithrespecttoefficiencyoftimemanagementandcost.ThebrickmanufacturingplantinSepang,SelangorDarulEhsanproducesclayfacingbricksforthecreationofvalue homes at competitive prices for the property development projects.

For the financial year under review, revenue is reported at RM203.16million, compared to RM231.94millionrecordedinthepreviousfinancialyear.Thedecrease inrevenuewasmainlyattributabletotherecognition of revenue in line with the build-then-sell concept under the property development segment. The encouraging demand for homes at the new township namely Goodview Heights, located at Sungai LongSouth,SelangorDarulEhsanandthecompletionofRumahSelangorkuaffordablehomesinAlamBudiman,ShahAlam,SelangorDarulEhsanhavecontributedsignificantlytothefinancialperformanceofthe company.

Profitbeforetaxincreasedby6.8%fromRM96.24millionreportedinthepreviousyeartoRM102.74millionfor the current year, mainly due to better margins recorded by the property development segment at completionstage.Theincreaseinnetprofitattributabletoshareholdersforthecurrentyearresultedinanincreaseinearningspersharefrom32.90sento33.99sen.

FINANCIAL YEAR ENDED 2013 2014 2015 2016 2017

FINANCIAL RESULTS (RM Million)Revenue 182.1 205.3 230.6 231.9 203.2ProfitbeforeTax 47.5 80.0 123.2 96.2 102.7NetProfit 35.3 58.8 104.2 80.0 82.8NetProfitattributabletoShareholders 34.9 58.3 103.5 79.7 82.3 FINANCIAL POSITION (RM Million)TotalAssets 666.8 760.2 904.7 871.6 897.1Share Capital 242.1 242.1 242.1 242.1 242.1 EquityattributabletoShareholders 577.4 594.9 694.4 713.8 750.2 FINANCIAL RATIOS BasicEarningsperShare(sen) 14.40 24.09 42.73 32.90 33.99NetTangibleAssetsperShare(RM) 2.38 2.46 2.87 2.95 3.10ReturnonEquity(%) 6.04 9.81 14.90 11.17 10.97ReturnonTotalAssets(%) 5.30 7.74 11.52 9.18 9.23ReturnonInvestedCapital(%) 7.15 14.79 13.86 15.07 14.57

TradeandotherreceivablesincreasedfromRM47.03millionattheendofthepreviousfinancialyeartoRM90.22millionattheendofthecurrentfinancialyear.Thiswasmainlyduetobillingsforsaleofpropertiesthatarecompletedattheendofthecurrentfinancialyear.TradeandotherpayablesdecreasedfromRM102.24millionat theendof thepreviousfinancialyear toRM91.38millionat theendof thecurrentfinancialyear,mainlyduetoincreaseinpaymentmadetothecreditorsfortheperiod.

MANAGEMENT DISCUSSION AND ANALYSISFinancialYearEnded31March2017


CashanddepositshavedecreasedfromRM305.81milliontoRM290.42millionprimarilyduetodividendspaid to shareholders. Nevertheless, a high level of liquidity is being maintained, mainly in the form of cash and deposits.

Onaconsolidatedbasis,thecurrentratioisabout620.6%asat31March2017,upfrom535.0%asatendofthepreviousfinancialyear,mainlyattributabletoanincreaseintradereceivables.

ThepropertydevelopmentsegmentcontinuestobethekeycontributorregisteringarevenueofRM188.96millionforthefinancialyearended31March2017,representingabout93.0%oftheconsolidatedrevenue.The property development segment will remain focused on building landed properties and affordable valuehomeswithreadilyavailablemortgagefinancingfacilitiesfrombanks.Thefollowingmajorpropertydevelopment projects located in Selangor Darul Ehsan are being developed in phases.

(a) Goodview Heights in Sungai Long South, Selangor Darul Ehsan

Goodview Heights is a premier billion dollar integrated township of a freehold land area of about 200 acres located in the southern part of Bandar Sungai Long with easy access from the SILK Highway. GoodviewHeightsisacontemporarymixeddevelopmentofapproximately2,500unitsofresidentialhomes,supportedbyacommercialhubatthetowncentrenexttoarecreationalpark.

(b) Alam Budiman in Shah Alam, Selangor Darul Ehsan

Alam Budiman is a matured township of about 150 acres comprising of approximately 2,000unitsdouble storey terracehomes,affordablehomesand shopofficeswith readyamenitiesandinfrastructure. Alam Budiman is located near the Guthrie Corridor, the new gateway into Shah Alam.

(c) Bandar Sungai Long, Selangor Darul Ehsan

BandarSungaiLongisathrivingRM2billiontownshipthathostsUniversitiTunkuAbdulRahman,SungaiLong Medical Centre and Sungai Long Golf & Country Club which offers its members a world class golfcoursedesignedbygolfmaster JackNicklaus, thefirst JackNicklaus signaturegolfcourse inMalaysia.Thereareabout38acresoflandtobedevelopedexcludingthegolfcourselandbank.

SHL Consolidated Bhd has on 3 May 2017 entered into a joint venture agreement with MarubeniCorporation, Japan, to develop 568 units of condominium in Bandar Sungai Long, Selangor Darul Ehsan, with the potential of engaging in development projects in the ASEAN region. This relationship will enhance theaccelerationofsupplyofhouses,generaterevenuegrowthandefficiency,improvementofdeliverysystem, recyclingof human resource,exchangeof informationandcomprehensiveevaluationof thedomesticandinternationalpropertymarket.

Risks

Thecurrent softeconomyandweakconsumer sentimentmaycauseuncertaintiesandapprehensionamongstbusinesses,resultinginfurtherpressureonsalesriskandfinancialperformance.

Thecompanyisexperiencingchallengesinthesalesofpropertiesduetostructuralpressureonthepropertyindustrysuchascompetitionfromcompetitors,deliveryriskandcostoverrunrisk.

Theprocessofmanagingsalesrisk,deliveryriskandcostoverrunriskissupportedbycontinuousinvestmentinthetraininganddevelopmentofstaff,productinnovationstofitcustomers’requirementsandapplicationof technology for improvement of construction techniques.

Thecompanyisabletomaintainahighlevelofliquidityresultinginaverylowriskofexposuretochangesininterestrateandfinancingcost.

MANAGEMENT DISCUSSION AND ANALYSIS (cont’d)FinancialYearEnded31March2017


Outlook

In2017,theMalaysianeconomyisprojectedtogrowby4.3%-4.8%.Domesticdemandwillcontinuetobethemaindriverofgrowth,underpinnedprimarilybyprivatesectoractivities.ReflectingtheGovernment’scommitmenttofiscalconsolidation,thecontributionofthepublicsectortogrowthisexpectedtoremainmoderate.Nevertheless,publicsectorexpenditurewillremainsupportiveofgrowthandmaintaininglowrate of unemployment.

ThehousingmarketinMalaysiahasnotbeenabletoprovideanadequatesupplyofaffordablehousingfor the masses at affordable prices in relation to the demography. This undersupply of affordable homes ataffordablepricesislikelytoworsengiventhecurrenttrendsinincomeanddemographicfactors.Goingforward,acarefully-designedstrategyofparticipationbytheprivatesectorforthehousingmarketwillensure that the supply of houses is able to accommodate households of all income groups. Meeting the demand of affordable housing units will require the commitment of both the Government on policies and theprivatesectorforefficiencyplanningtowardsthesupplysideofaffordablehomes.

Despite the current challenging and unpredictable Malaysian economic environment, SHL Consolidated Bhd will remain resilient and focused on building landed properties and affordable value homes at the new townships, namely Goodview Heights at Sungai Long South, Alam Budiman at Shah Alam and Bandar Sungai Long, all property development projects located in Selangor Darul Ehsan, the primary social and economic centre of Malaysia.

SHLConsolidatedBhdwillcontinuetheprocessofcreatingvalueforallstakeholders,improvingthedeliverysystemandenhancingitscompetitiveadvantage.Withmorethan30yearsofsustainabletrackrecordinthe property and construction business sectors, it is anticipated that the company will be able to navigate the current weak economic condition of Malaysia and with Marubeni Corporation’s participation inanother front, the company will be able to enhance growth.

Dividend

TheBoardofDirectorsaimtoachieveadividendpayoutpolicyofbetween50%to60%ofprofitaftertax.Theamountofdividendtobepaidwilltakeintoconsiderationoftheearningsandcapitalcommitmentof the company.

Thecompanyhaspaidafirstinterimsingle-tierdividendof6senpershareinJanuary2017andasecondinterimsingle-tierdividendof6senpershareinJuly2017forthefinancialyearended31March2017.

Subjecttotheapprovalbyourcompany’sshareholdersattheforthcomingAnnualGeneralMeeting,ourBoardofDirectorsispleasedtorecommendafinalsingle-tierdividendof6senpershareinrespectofthefinancialyearended31March2017.

MANAGEMENT DISCUSSION AND ANALYSIS (cont’d)FinancialYearEnded31March2017


CORPORATE GOVERNANCE STATEMENT

The Board of Directors of SHL Consolidated Bhd (SHL) recognises the importance of Corporate Governance which are essential to the stability and sustainability of the Group’s performance and to safeguard shareholders’ investments and to protect the interest of all stakeholders.

Set out below is a statement on how SHL Group has applied the Principles and Recommendations set out in the Malaysian Code on Corporate Governance 2012 (CG) during the financial year 2017.

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

1.1 Clear functions of the Board and Management

The Board is responsible for the overall performance of the Group by setting goals, policies and targetswhileManagementisresponsibleformanagingthedaytodayoperationoftheGroup’sbusiness activities in accordance with the direction and delegation of the Board.

In discharging its duties, the Board delegates certain of its responsibilities to Board Committees whichoperatewithinclearlydefinedtermsofreference.TheBoardisbriefedatboardmeetingsonmattersdeliberatedby theCommittees. TheBoardoversees theGroup’sbusinessand itsperformance and also the process of evaluating the adequacy and effectiveness of the internal controlsystemandriskmanagementprocesses.

Its primary functions are to:

i reviewandapprovethecorporatepolicies,strategies,budgetsandfinancialplansoftheGroup;

ii monitor financial performance including approval of the annual and interim financialreports;

iii approve major funding proposals, investments, acquisitions and divestment proposals;iv reviewtheGroup’sperformanceandtheadequacyandeffectivenessoftheframework

andprocessesforinternalcontrols,riskmanagement,financialreportingandcompliance;and

v assume responsibility for good corporate governance.

To facilitate effective management, certain functions of the Board have been delegated to variousboardcommittees,whichreviewandmakerecommendationstotheBoardonspecificareas. There are currently three standing board committees appointed by the Board, namely:

i Audit Committee; ii Nomination Committee; and iii Remuneration Committee.

The delegation of authority by the Board to the Committees enables the Board to achieve operational efficiency by empowering these Committees to decide onmatters within theirrespective written terms of reference and/or limits of delegated authority and yet allow the Board to maintain control over major policies and decisions.

1.2 Clear roles and responsibilities

The Board has discharged its responsibilities in the best interests of the Group in pursuit of its corporateobjective.ThefollowingareamongthekeyresponsibilitiesoftheBoard:

i. Reviewing and adopting the Group’s strategic plans

The Management presents the annual strategic plans and budget to the Board for reviewing andapproval.TheBoardchallengestheManagement’sassumptionsandviews,toensurethattheyareachievableandworkable.

The Board conducts mid-year review of the budget by comparing against the actual year-to-date performance.


CORPORATE GOVERNANCE STATEMENT (cont’d)

ii. Overseeing the conduct of the Group’s business

TheExecutiveDirectorsare responsible for theday-to-daymanagementof thebusinessand operations of the Group. They are supported by the Management Committees. The BoardiskeptinformedofkeystrategicinitiativesandsignificantoperationalissuesandtheGroup’sperformanceonregularbasis.

iii. Identifying principal risks and ensuring the implementation of appropriate systems to manage them

The Board has overall responsibility to ensure that the Group has the capability and necessaryframeworktomanagerisksinnewandexistingbusinesseswiththerisksappetitethattheGroupundertakestoachieveitscorporateobjectives.

TheRiskManagementCommitteeadvisestheAuditCommitteeandtheBoardonareasofhighriskfacedbytheGroupandtheadequacyofcomplianceandcontrolthroughoutthegroup.TheAuditCommitteereviewstheriskmanagementpoliciesformulatedbytheManagementandmakesrelevantrecommendationstotheBoardforapproval.DetailsontheRiskManagementCommitteeandtheGroup’sEnterpriseRiskManagementFrameworkaresetoutintheRiskManagementandInternalControlStatementofthisAnnualReport.

iv. Succession planning

The Board believes in carrying out succession planning for itself and the Chairman is to ensure continuity of leadership. Board renewal is a continuing process and in this regard, theNominationCommitteereviewsthecompositionoftheBoard,which includes itssizeandmixandrecommendstotheBoardtheselectionandappointmentofnewDirectors,whether inaddition to theexisting Boardmembers or as replacementof retiring Boardmembers,withaviewtoidentifyanygapsintheBoard’sskillssettakingintoaccounttheGroup’sbusinessoperations.TheBoardwillbeabletofunctionsmoothlynotwithstandingany resignation or retirement of any Director given the present number of members and mixofcompetenciesontheBoard.

TheBoardissatisfiedthattheNominationCommitteehasdischargeditsfunctionseffectivelyandefficiently.

v. Overseeing the development and implementation of a communication policy for the Group

The Group recognises the importance of being accountable to its investors and as such has maintained an active and constructive communication policy to enable the Board andManagementtocommunicateeffectivelywithitsshareholders,stakeholdersandthepublic generally.

ThetimelyreleaseofquarterlyfinancialresultsoftheGroupandtheissueoftheGroup’sAnnual Reports provide regular information on the state of affairs of the Group. These, together with the announcement to Bursa Malaysia Securities Berhad, circulars to shareholders and, where appropriate, ad-hoc press statements and interviews are the principalchannelsfordisseminationofinformationtoitsshareholders,stakeholdersandthepublic generally.

In addition, the Group has established a web site at www.shlcb.com.my, where shareholders can access for information.


vi. Reviewing the adequacy and integrity of management information and internal control system of the Group

TheBoardisultimatelyresponsiblefortheadequacyandintegrityoftheGroup’sinternalcontrolsystem.DetailspertainingtotheGroup’sinternalcontrolsystemandthereviewofitseffectivenessaresetoutintheStatementonRiskManagementandInternalControlofthis Annual Report.

1.3 Formalised ethical standards through Code of Ethics

The Group has adopted a Code of Ethics to regulate the standards and ethical conduct of the Group’semployeesandprovidesacommunicableandunderstandableframeworkforallstaffto observe these values and principles.

TheCodeofEthicscoversallaspectsoftheGroup’sbusinessoperations,suchasconfidentialityof information, dealings in securities, protection of assets and funds, compliance with Malaysian statutory laws and regulations, personal gifting, gratuities or bribes, health and safety, fair and courteousbehavior,dishonestconductandsexualharassment.

Whilst the Company does not have a formal whistleblowing policy, the Code contains provision whichencourageanyemployeewhoknowsof,orsuspects,aviolationoftheCode,towhistleblow or report the concern to the Management. No individual will be discriminated against or suffer any act of retaliation for reporting in good faith on violations or suspected violations of the Code.

TheBoardreviewsitsCodeofEthicsannuallyandpublishesitontheCompany’swebsite.

1.4 Strategies promoting sustainability

The Board is aware of the importance of business sustainability and ensures that there is a plan forpromotingsustainabilityembeddedinthedevelopmentoftheGroup’sstrategies inordertocreateenduringvalue,connectandcollaboratewithall stakeholdersandcreate thrivingcommunitiesthroughpropertydevelopment.Thesestrategiesseektomeettheexpectationsofstakeholderssuchascustomers,shareholders,bankers,regulatorsandthecommunitiesinwhichthe Group operates.

1.5 Access to information and advice

The relevant information or reports together with the agenda are circulated in a timely manner at least two (2) weeks prior to schedule board meetings. The Directors shall have full andunlimited access to any information pertaining to the Group. The Directors shall have direct communicationchannelswiththeinternalandexternalauditorsandwithseniormanagementof the Group. This enables the Directors to discuss the issues effectively at the board meetings.

Beside board meetings, the Directors are also provided with updates via email or physical copiesofreportsasandwhenthereareanynewdevelopmentsontheGroup’sbusinessoranychanges to the latest statutory and/or regulatory requirements.

The Chairman of the Audit Committee, Nomination Committee and Remuneration Committee brieftheBoardonmattersdiscussedaswellasdecisionstakenintheirrespectiveCommitteeMeetings.ARiskManagementReportwillbetabledintheAuditCommitteemeetingforreviewand subsequently the said Report is presented to the Board by the Chairman of the Audit Committee at least once a year.

TheDirectorscanobtain,at theexpenseof theGroup,external legalorother independentprofessional advice they consider necessary.



1.6 Qualified and competent Company Secretaries

The Company Secretaries attend all Board and Committee meetings and ensure that all Board procedures are followed. The Company Secretaries also ensure that the Company complies with all applicable statutory and regulatory rules. Together with the Management, the Company Secretaries also assist the Board Chairman, the Board and Committees to implement and strengthen corporate governance practices and processes, including facilitating orientation for newly appointed Directors and appointments to Committees, and continuing training and development for the Directors. The Directors have separate and independent access to the Company Secretaries at all times.

1.7 Board Charter

The Board’s Charter clearly sets out the roles and responsibilities of the Board and BoardCommittees and the processes and procedures for convening their meetings. It serves as a referenceandprimaryinductionliteratureprovidingprospectiveandexistingBoardmembersandManagementinsightintothefiduciaryandleadershipfunctionsoftheDirectorsofSHL.

TheBoardreviewsitscharteronceayearandpublishestheboardcharterontheCompany’swebsite at www.shlcb.com.my.

2. STRENGTHEN COMPOSITION

2.1 Nomination Committee

TheCommittee’sresponsibility,amongothers,istoidentifyandrecommendtherightcandidatewith the necessary skills, experienceandcompetencies tobe filled in the Boardand BoardCommittees. Recruitment matters are discussed in depth by the Committee before the entire Boardmakesthefinaldecisiononnewappointments.

TheNominationCommitteecomprisesoftwo(2)IndependentNon-ExecutiveDirectorsandone(1)Non-IndependentNon-ExecutiveDirector,asfollows:

Chairman:

Mr.SourenNorendra(SeniorIndependentNon-ExecutiveDirector)

Members:

Mr.NgChinHoo(IndependentNon-ExecutiveDirector);and Mr.WongTiekFong(Non-IndependentNon-ExecutiveDirector)

The duties and responsibilities of the Nomination Committee are as follows:

i. identifying, reviewing and recommending candidates for appointment as Directors of the Company;

ii. re-nominating retiring Directors for re-appointment at annual general meeting (AGM) and determining annually the independence of Directors;

iii. deciding the assessment process and implementing a set of objective performance criteria tobeappliedfromyeartoyearforevaluationoftheBoard’sperformance;

iv. evaluating the Board’s effectivenessasawholeandeachDirector’s contribution to itseffectiveness in accordance with the assessment process and performance criteria; and

v. ensuringanappropriateframeworkandsuccessionplansformembersoftheBoard.



2.2 Develop, maintain and review criteria for recruitment and annual assessment of Directors

i. Criteria and process for recruitment or appointment of Directors

Selection of candidates to be considered for appointment as Directors is facilitated through recommendationsfromtheDirectors,externalpartiesincludingtheCompany’scontactsinthefinance,legal,accounting,constructionandpropertydevelopmentprofessions.TheNomination Committee interviews the short listed candidates before formally considering and recommending them for appointment to the Board and where applicable, to the Committees.

In reviewing and recommending to the Board any new Director appointments, the Nomination Committee considers:

a. thecandidate’sindependence,inthecaseoftheappointmentofanIndependentNon-ExecutiveDirector;

b. the composition requirements for the Board and Committees (if the candidate is proposed to be appointed to any of the Committees);

c. the candidate’s age, track record, experience and capabilities and such otherrelevant factors as may be determined by the Nomination Committee which would contributetotheBoard’scollectiveskills;and

d. any competing time commitments if the candidate has multiple board representations.

Duringthefinancialyear,theNominationCommitteedidnotrecruitorappointanydirectorto the Board.

ii. Annual assessment

The Group has in place a formal process for assessment of the effectiveness of the Board as a whole and the contribution by each Director to the effectiveness of the Board. The Nomination Committee assesses the Board’s performance as a whole annually, usingobjective and appropriate quantitative and qualitative criteria which were recommended by the Nomination Committee and approved by the Board. When assessing the overall Boardperformance, theNominationCommittee takes intoconsideration the feedbackfromindividualDirectorsonareasrelatingtotheBoard’scompetenciesandeffectiveness.

The results of the overall evaluation of the Board by the Nomination Committee including its recommendation, if any, for improvements are presented to the Board.

TheannualevaluationprocessfortheindividualDirectors’performancecomprisesthreeparts:

a. backgroundinformationconcerningtheDirectorsincludingtheirattendancerecordsat Board and Committee meetings;

b. questionnaires for completion by all individual Board members; andc. NominationCommittee’sevaluationbasedoncertainassessmentparameters.

The questionnaires and the assessment parameters were recommended by the Nomination Committee and approved by the Board. The completed questionnaires are then reviewed by the Nomination Committee before the Nomination Committee completes its evaluation of the individual Directors. When deliberating on the performance of a particular Director who is also a member of the Nomination Committee, that member abstains from the discussionsinordertoavoidanyconflictofinterests.Theresultsoftheindividualevaluationof the Directors are also used by the Nomination Committee to review, where appropriate, the composition of the Board and Committees, and to support its proposals, if any, for appointment of new members and its recommendations for the re-appointment and re-election of retiring Directors. Comments from the Directors, if any, concerning the Board as a whole and the general performance of the Directors, are also presented to the Board.



iii. Boardroom diversity

TheBoardstronglyviews thatdiversityof theBoard’scomposition is important toensureoptimal decision-making by harnessing different insights and perspectives. The Boardis committed to provide fair and equal opportunities and promoting diversity with due consideration on skills, knowledge, experience, background, age, gender and otherqualities in determining the optimum composition of the Board.

Currently, the Board does not has any female director and may consider recruiting a female director in the future.

iv. Retirement of Directors

In accordance with the Listing Requirements of Bursa Securities and Article 88 of the Company’sArticlesofAssociation,atleast1/3orthenumbernearestto1/3oftheDirectorsshallretirefromofficeeachyear,suchthatalldirectorsretireatleastonceinevery3yearsattheAnnualGeneralMeeting(“AGM”).Theretiringdirectorsshallbeeligibleforre-electionat the AGM.

Upon the recommendation of Nomination Committee, the following Directors retire by rotationat the forthcoming23rdAGMof theCompanypursuant toArticle88of theCompany’s Articles of Association and being eligible, have offered themselves for re-election:

(a) Mr Souren Norendra; and (b) Mr Ng Chin Hoo.

2.3 Remuneration Committee

i. Remuneration policies and procedures

The Remuneration Committee consists of two (2) Independent Non-Executive Directorsandtwo(2)ExecutiveDirectors,asfollows:

Chairman:

SourenNorendra(SeniorIndependentNon-ExecutiveDirector)

Members:

NgChinHoo(IndependentNon-ExecutiveDirector); Dato’SriYapTeiongChoon(ExecutiveDirector); Dato’SriIr.YapChongLee(ExecutiveDirector)

The Duties and responsibilities of the Remuneration Committee are as follows:

i. torecommendtheremunerationframeworkforNon-ExecutiveDirectors;ii. to evaluate, deliberate and recommend the remuneration package of Executive

Directors; iii. toensureindividualdirectorsabstainfrommakingdecisionsinrespectoftheirindividual

remuneration; andiv. toensurethattheremunerationpackagesarecompetitiveinattractingandretaining

directorscapableofmeetingtheCompany’sneeds.



TheBoardasawholedeterminestheremunerationofNon-ExecutiveDirectorsandeachindividual Director abstains from the Board’s decision on his own remuneration. All theDirectorsarepaidannualDirectors’feesforBoardMeetingsthattheyhaveattended.

Duringthefinancialyearended31March2017, theRemunerationCommitteemetone(1) time during the year and was attended by all its members. They discuss and review the ExecutiveandNon-ExecutiveDirectors’Remuneration,whereuponrecommendationsaresubmittedtotheBoardforreview.SubsequentlytheBoardpresenttheproposeddirectors’fees to the shareholders for approval.

ii. Directors’ Remuneration

TherangeofremunerationreceivedbyDirectorswhoheldofficeattheendofthefinancialyear ended 31March 2017 is set out as below. TheCompanyopts not todisclose theremuneration of individual Directors as the Company believes that this information will not addsignificantlytotheunderstandingandevaluationoftheCompany’sgovernance.

Aggregate remuneration received by Directors are categorised into the following components:

Company Subsidiaries

Salary Director Directors’ and GROUP Fees Bonus Allowances EPF TOTAL TOTAL (RM) (RM) (RM) (RM) (RM) (RM)

Executive 60,000 1,524,000 50,000 91,440 1,665,440 1,725,440

Non-IndependentNon-Executive 85,000 604,720 22,000 54,593 681,313 766,313

IndependentNon-Executive 60,000 - - - 60,000

TOTAL 205,000 2,128,720 72,000 146,033 2,346,753 2,551,753

Number of Directors whose remuneration falls into the following bands:

Number of Directors Non - Executive Non- Range of remuneration Executive Independent Independent TOTAL

Below RM50,000 - 2 - 2 RM100,001 to RM150,000 - - - - RM150,001 to RM200,000 - - 1 1 RM200,001 to RM250,000 - - - - RM250,001toRM300,000 - - 1 1 RM300,001toRM350,000 - - 1 1 RM850,001toRM900,000 2 - - 2



3. REINFORCE INDEPENDENCE

3.1 Annual Assessment of Independence

TheNominationCommitteereviewstheindependenceofDirectorsbytakingintoaccountoftheindividualDirector’sabilitytoexerciseindependentjudgmentatalltimesandbasedonthecriteria set out in the Listing Requirements of Bursa Securities. When considering the independence of theDirectors, theNominationCommitteealso reviews the IndependenceDirectors’otherdirectorships,theannualdeclarationregardingtheirindependence,theDirectors’disclosuresofinterests in transactions, and any other relationships between the Group and the Directors which mayinterferewiththeDirectors’exerciseofobjectiveorindependentjudgment.

The IndependentNon-ExecutiveDirectorsarenotemployeesand theydonotparticipate intheday-to-daymanagementoftheGroup.Theybringanexternalperspective,constructivelychallenge and help develop proposals on strategy, scrutinise the performance of Management in meeting approved goals and objectives, and monitor the risk profile of the Company’sbusiness and the reporting of quarterly business performances.

Basedontheassessmentcarriedoutduringthefinancialyearended31March2017,theBoardissatisfiedwiththelevelofindependencedemonstratedbyalltheIndependentDirectorsandtheir ability to act in the best interest of the Company.

3.2 Tenure of Independent Directors

TheBoardhasadoptedanine-yearpolicyfor IndependentNon-ExecutiveDirectors,which isimplemented on a gradual basis to ensure the continued effective functioning of the Board.

AsatthedateofthisStatement,noneofthe IndependentDirectorshasservedmorethan9years on the Board.

3.3 Shareholders’ approval for the re-appointment of Independent Non-Executive Directors

AsatthedateofthisStatement,noneof IndependentNon-ExecutiveDirectorhasservedformorethan9years.Therefore,shareholders’approvalforthere-appointmentattheforthcomingAGM is not required.

3.4 Separation of positions of the Chairman and Executive Directors

ThefunctionsoftheChairmanandtheExecutiveDirectorsareseparatelyandclearlydefined.TheChairmanisresponsibleforrunningtheBoardandensuresthatallDirectorsreceivesufficientrelevantinformationonfinancialandnon-financialmatterstoenablethemtoparticipateactivelyin the Board decisions. The Chairman does not participate in the day-to-day management of the Group. The Executive Directors are responsible for the day-to-daymanagement of thebusinessaswellastheimplementationofBoard’spoliciesanddecisions.

3.5 Composition of the Board

Currently,TheBoardofDirectorscomprisesseven(7)memberswhichincludestwo(2)ExecutiveDirectors,three(3)Non-IndependentNon-ExecutiveDirectors(includingtheChairman)andtwo(2)IndependentNon-ExecutiveDirectors.

The Non-Independent Non-Executive Directors are to provide the Group unbiased andindependentviewandjudgement,aftertakingintoconsiderationtheinterestoftheshareholders,employees,suppliersandcustomers.ThepresenceofIndependentNon-ExecutiveDirectorsofthecalibernecessarytocarrysufficientweightinalldecisionsmadebytheBoardensuresthatthereispropercheckandbalanceintheBoard.AlthoughallDirectorshaveanequalresponsibilityfortheGroup’sbusinessandaffairs,theroleofIndependentNon-ExecutiveDirectorsisparticularlyimportantinensuringthatthestrategiesproposedbytheExecutiveDirectorsarefullydiscussedandexamined,withdueregardtoriskmanagement.



The Company recognises the contribution of Independent Directors as vital to the development oftheSHLGroup’sstrategiesandprovidingabalancedandindependentviewtotheBoard.All Independent Directors are independent of management and free from any relationship that could interfere with their independent judgement.

The Board meets at least five (5) times a year, with additional meetings convened whennecessarytoreviewmattersthatrequiretheBoard’surgentattentionanddecision.Meetingsare scheduled at the beginning of each calendar year to enable the Board members to plan theirschedulesaccordingly.Duringthefinancialyearended31March2017,theBoardmetonfive(5)occasions,whereaformalagendaareforwardedtoallDirectorsatleasttwo(2)weeksbefore the meetings.

All issues raised and discussed and decisions made at the Board Meetings are minuted, and arecirculatedtoallDirectorsfortheirperusalpriortotheconfirmationofsuchminutesatthefollowing Board Meetings.

Besides board meetings, the Directors also approved various matters requiring the sanction of theBoardbywayofcircularresolutionsduringthefinancialyear.

TheattendanceofeachDirectorattheBoardMeetingheldduringthefinancialyearended31March 2017 was as follows:

No. of meetings attended by directors during their Director tenure in office

Y.A.M.TengkuAbdulSamadShahIbniAlmarhum SultanSalahuddinAbdulAzizShah 4/5 Dato’SriYapTeiongChoon 5/5 Dato’SriIr.YapChongLee 5/5 WongTiekFong 5/5 Souren Norendra 4/5 Ng Chin Hoo 5/5 Au Lai Koong 5/5

All the Directors complied with the minimum 50% attendance requirement in respect of Board meetingsheldduringthefinancialyearended31March2017pursuanttoParagraph15.05ofthe Bursa Malaysia Listing Requirements.

4. FOSTER COMMITMENT

4.1 Time commitment

When considering the nomination of Directors for appointment or re-election/re-appointment, theNominationCommitteealsotakesintoaccountthecompetingtimecommitmentsfacedby Directors with multiple board representations. An analysis of the directorships held by the Directors is reviewed annually by the Nomination Committee.

BasedontheanalysisandtheDirectors’commitmentandcontributionstotheGroupwhicharealso evident in their level of attendance and participation at Board and Committee meetings, theNominationCommitteeissatisfiedthatallDirectorsareabletocarryoutandhavebeenadequately carrying out their duties as a Director of the Group.



4.2 Directors’ training

The Directors have participated and continue to undergo the relevant training programmes to furtherenhance their skillandknowledgeaswellas the latest statutoryand/or regulatoryrequirementsindischargingtheirfiduciarydutiestotheCompany.

TrainingprogrammesattendedbytheDirectorsduringthefinancialyearended31March2017are as follows:

Name of Directors Course Title Date

Dato’SriYapTeiongChoon MIAInternationalAccountantsConference2016 15&16 November 2016

Dato’SriIr.YapChongLee SeminarTransformasiIndustriPembinaan2016 29 September 2016

Essential Knowledge Of Concrete Flat Floor 20 April 2017

WongTiekFong FutureofAuditorReporting–TheGameChanger 27June for Boardroom 2016

ThevelocityofGlobalChange&Sustainability– 10January The New Business Model 2017

ACCA Malaysia sustainability Reporting Awards 10 January 2017

MIA International Accountants Conference 2016 15 & 16 November 2016

Souren Norendra The Impact of Competition Law on Malaysian 27 April Enterprises 2016 TheUpdatestotheCompaniesAct2016 3March 2017

Ng Chin Hoo How to Leverage on AGMs for Better Engagement 21 withShareholders’ November 2016

ThevelocityofGlobalChange&Sustainability– 10January The New Business Model 2017 ACCA Malaysia sustainability Reporting Awards 10 January 2017

AuLaiKoong MandatoryAccreditationProgrammeforDirectors 13&14July of Public Listed Companies 2016

SeminarPembangunanStrata&Stratum2017 13March 2017



PursuanttothePracticeNoteNo.5oftheMainMarketListingRequirementsofBursaMalaysiaSecurities Berhad, a director must complete a training programme on Mandatory Accreditation Programme(“MAP”)within4monthsfromthedateofhis/herappointment.MrAuLaiKoongwhowasappointedon26May2016hascompletedtheMAPon13&14July2016.

5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1 Compliance with applicable financial reporting standards

The Board presents to shareholders a balanced and clear assessment of the Company’sperformance, position and prospects.

The Audit Committee (AC) members reviewed the Company’s financial statements in thepresenceofExternalAuditorspriortorecommendingthefinancialstatementsfortheBoard’sapprovaland issuance to shareholders. The reviewwas toensure that theaudited financialstatements were drawn up in accordance with the provisions of the Companies Act, 2016, the Listing Requirements of Bursa Malaysia Securities Berhad and the applicable approved accounting standards approved by the Malaysian Accounting Standards Board. The Audit Committee members also reviewed the quarterly results of the Company prior to submission to the Board for approval and release to public.

Executives Directors and the Chief Financial Officer provide assurance to the Board thatadequateprocessesandcontrolsareinplaceforaneffectiveandefficientfinancialstatement,that appropriate accounting policies had been adopted and applied consistently and that therelevantfinancialstatementsgiveatrueandfairviewofthestateofaffairsoftheGroupincompliance with regulatory requirements.

TheDirectorsareresponsibletoensurethatthefinancialstatementsgiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasattheendofeachfinancialyear,andoftheresultsandcashflowsoftheGroupandoftheCompanyforthatyearthenended.

TheDirectorsconsiderthatinpreparingthefinancialstatements:

• the Group and the Company have used appropriate accounting policies that areconsistently applied;

• reasonableandprudentjudgmentsandestimateshavebeenmade;and• allapplicableapprovedaccountingstandardsinMalaysiahavebeenadheredto.

TheDirectorshavegeneral responsibility for taking such stepswhichare reasonablyopen tothem to safeguard the assets of the Group and of the Company and to prevent and detect fraud and other irregularities.

5.2 Assessment of suitability and independence of external auditors

TheAuditCommitteereviewstheindependenceandobjectivityoftheexternalauditorsandthe services provided, including quality of services, audit planning independence, objectivity andprofessionalskepticism,annualnon-auditservicesandissatisfiedthattheexternalauditorsiscompetentandwithauditindependence.TheExternalAuditorshasconfirmedinwritingthatthey are, and have been, independent throughout the conduct of the audit engagement with the Company in accordance with the independent criteria set out by the Malaysian Institute of Accountants.

TheAuditCommitteehaveaprivatedialoguewiththeexternalauditorsatleastonceayearandwhenevernecessary,withoutthepresenceoftheotherdirectorsorManagement,toexchangeindependentviewsonmatterswhichrequiretheAuditCommittee’sattention.

TheBoardagreedwiththeAC’srecommendationtoproposetoshareholdersattheforthcomingAGMforthereappointmentofMessrsKhooWong&Chanastheexternalauditorstoholdofficefor the ensuing year.



6. RECOGNISE AND MANAGE RISKS

6.1 Sound framework to manage risks

TheBoardisresponsiblefortheGroup’sriskmanagementframeworkandsystemofinternalcontroland for reviewing their adequacy and integrity. The Board has established an ongoing process for identifying,evaluatingandmanaging significant risks facedby theGroup. TheExecutiveDirectors and Management assist the Board on the implementation and maintenance of the riskmanagementprocessandcompliancewithBoard’spoliciesonriskandcontrol.Thisprocesshas been in place throughout the year and up to the date of approval of the annual report and financialstatements.TheBoardfullysupportsthecontentsoftheInternalControlGuidanceandthroughtheAuditCommittee,continuallyreviewstheadequacyandeffectivenessoftheriskmanagement process within the various operating business units.

The Audit Committee assists the Board in discharging these responsibilities by overseeing and reviewingtheRiskManagementFrameworkandtheeffectivenessofriskmanagementoftheCompany.TheRiskManagementCommitteeoftheCompanyreportstotheAuditCommitteeas least once a year.

DetailsontheGroup’sEnterpriseRiskManagementFrameworkaresetoutinthisStatementonRiskManagementandInternalControlofthisAnnualReport.

6.2 Internal audit function

The Board has established an internal audit function within the Group, which is led by the Head of InternalAuditwho reportsdirectly to theAuditCommittee.Detailsof theGroup’s internalcontrolsystemandframeworkaresetoutintheStatementonRiskManagementandInternalControl and Audit Committee Report of this Annual Report respectively.

The Board recognises the importance of an effective internal control system in improving risk management, enhancing controls and ensuring compliance with applicable laws andregulations.TheinternalcontrolsystemalsodesignedtosafeguardtheGroup’soperationsandassetsandhenceprotectshareholders’investmentintheGroup.Inthisregard,theinternalauditfunction of the Group is carry out by the internal audit department. The internal audit function isplacedunderthepreviewoftheAuditCommittee.TheHeadofInternalAuditpresenttheriskassessmentreportontheadequacy,efficiencyandeffectivenessoftheGroup’sinternalcontrolsystem to the Audit Committee.

7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

7.1 Corporate Disclosure Policy

To comply with the Bursa Malaysia Listing Requirements, corporate disclosure policies and procedures have been in place to guide all employees pertaining to corporate disclosure requirements. Clear roles and responsibilities of directors, management and employees are providedtogetherwithlevelsofauthority.Onlyauthorisedspokespersonsareallowedtohandleand disclose material information. Persons responsible for preparing the disclosure will conduct duediligenceandproperverificationbeforedisclosureismadetoinvestingpublic.

7.2 Leverage on information technology for effective dissemination of information

The Board is mindful of its obligation to provide timely and fair disclosure of material information toshareholders.Shareholdersarekeptabreastofthefinancialandothermaterialinformationconcerning the Group through regular and timely dissemination of information. The Group website at www.shlcb.com.my contains information about the Group including all publicly disclosedfinancial information,corporateannouncements,annual reportsandprofilesoftheGroup.



8. STRENGTHEN RELATIONSHIP BETWEEN THE GROUP AND ITS SHAREHOLDERS

8.1 Encourage shareholder participation at general meetings

SHL dispatches its notice of AGM to shareholders at least 21 days before the AGM by enclosing the notice of AGM, which provides information to the shareholders with regard to, details of theAGM, theirentitlement toattend theAGM, the right toappointaproxyandalso thequalificationsofaproxy.Since2013AGM,SHLhas removed the limitationon thenumberofproxies tobeappointedbyanexemptauthorisednomineewith shares in theCompany formultiplebeneficialownersinonesecuritiesaccounttoallowgreaterparticipationofbeneficialowners of shares at general meetings of the Group.

8.2 Encourage poll voting

InlinewiththerecentamendmentstotheMainMarketListingRequirementsofBursaSecurities,the Group implements poll voting for all the resolutions set out in the Notice of AGM and appoints a scrutineer to validate the votes cast at AGM.

8.3 Effective communication and proactive engagement

At the AGM, all Directors were present in person to engage directly with, and be accountable to the shareholders for their stewardship of the Group. The Chairman invited shareholders to raisequestionspertainingtotheGroup’saccountsandotheritemsforadoptionatthemeeting,beforeputtingaresolutiontovote.TheDirectors,ChiefFinancialOfficer(CFO),Managementandexternalauditorswereinattendancetorespondtotheshareholders’queries.TheExecutiveDirectors andCFO also sharedwith the shareholders in relation to theGroup’s response toenquiries submitted in advance of the AGM by the Minority Shareholders Watchdog Group.

COMPLIANCE STATEMENT

TheBoardissatisfiedthatin2017,theCompanyhascompliedwiththeprinciplesandrecommendationsoftheMalaysianCodeonCorporateGovernance2012.ThisStatementontheCompany’sCGpracticesismadepursuanttoParagraphs15.25and15.08AoftheMainMarketListingRequirements.

This Statement was approved by the Board on 5 July 2017.



TheBoardiscommittedtomaintainingasoundsystemofriskmanagement, internalcontrolandgoodcorporate governance practices of the Group in compliance with Paragraph 15.26(b) of the Listing RequirementsofBursaSecuritiesandguidedby theStatementonRiskManagement&InternalControlGuidelines for Directors of Listed Issuers.

Board’s Responsibility

TheDirectorsacknowledgetheirultimateresponsibilityfortheGroup’ssystemofinternalcontrolandriskmanagement and for reviewing the adequacy and integrity of the system but the purview does not cover its associated company where the Group does not have full management control. However, the Group’sinterestisservedthroughrepresentationontheboardoftheassociatedcompany.Thesystemofinternalcontrolcoversriskmanagement,operational,organisational,financialandcompliancecontrolstosafeguardtheGroup’sassetsandshareholders’investments.

The Board continually implements and reviews the adequacy and effectiveness of the Group’s riskmanagementandinternalcontrolsystemandensuresthatriskshavebeenmanagedwithintheGroup’sriskappetiteandtolerablerangesandthesystemisviableandrobust. Thesystemisdesignedtomanageratherthaneliminatetheriskoffailuretoachievebusinessobjectives,and can only provide reasonable and not absolute assurance against material misstatement or loss.

KEY FEATURES OF RISK MANAGEMENT AND INTERNAL CONTROL PROCESSES

The Group has established a clear line of accountability, authority and responsibility organizationalstructure for the Board, its committees and operating units. Key processes in reviewing the adequacy and effectivenessoftheriskmanagementandinternalcontrolareasfollows:-

• TheAuditCommitteeoftheGroup,withtheassistanceoftheRiskManagementCommittee(RMC),performs risk management assessments and through the Internal Audit Department, reviews theinternalcontrolprocesses,andevaluatestheadequacyandeffectivenessoftheriskmanagementand internal control system.

• The RMC was established to oversee and perform reviews on the Group’s risk managementprocesses.TheRMCischairedbyChiefRiskOfficerandincludesHeadofbusinessunitsoftheGroup.TheRMCreportstotheAuditCommitteewherekeyrisksandmitigatingactionsaredeliberatedandimplemented.

• TheNominationCommitteeassiststheBoardtoreviewandrecommendappropriateremunerationpolicies for Directors and to ensure their remuneration commensurate with their performance. The Nomination Committee also reviews and recommends candidates to the Board and evaluates the performance of Directors on an annual basis.

• TheInternalAuditDepartmentperformsinternalauditsonvariousoperatingunitswithintheGrouponariskbasedapproachandbasedontheannualauditplanapprovedbytheAuditCommittee.The Internal Audit Department checks and tests the effectiveness of the internal control systemperiodicallyandhighlightssignificantfindingstotheAuditCommittee.

KEY ELEMENTS OF THE RISK MANAGEMENT AND INTERNAL CONTROLS

ThekeyelementsoftheGroup’sriskmanagementandinternalcontrolsareasfollows:-

• Clearlydefinedauthorization,approvallimitsandcontrolprocedureswithintheBoardandtheSeniorManagement.

• TopdowncommunicationisconductedtoalllevelspertainingtoGroup’svalueandcodeofethics.• StandardOperating Policies and Procedures are systematically documented, revisedandmade

availabletoguidestaffintheirday-to-daywork.• SeniorManagementmeetonaperiodicbasiswithmanagersofbusinessunits toensure that the

processes for identifying, evaluating, monitoring and reporting of risks and internal control areimplemented adequately and effectively.

• PeriodicreportingtotheBoardanditscommitteesontheresultsofcontrolassurance,riskmanagementand audit activities of the Group.

• TheBoardreviewedtheeffectivenessofriskmanagementandinternalcontrolsannuallyandensuredthattheyareeffectiveandefficient.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


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

RISK MANAGEMENT FRAMEWORK

RiskmanagementcontinuestoplayanimportantpartintheGroup’sbusinessactivitiesandisanessentialcomponent of its planning process. The Board has overall responsibility to ensure that the Group has the capabilityandnecessaryframeworktomanagerisksinnewandexistingbusinesses.ToassisttheBoardin its riskmanagement oversight, theAuditCommittee has beenauthorizedby the Board to provideoversightandreviewonmattersrelatingtotheriskmanagementpoliciesandsystemsoftheGroup.

TheBoardhasestablishedanongoingprocessforidentifying,evaluatingandmanagingsignificantrisksfaced by the Group. This process has been in place throughout the year and up to the date of approval oftheannualreportandfinancialstatements.TheBoardfullysupportsthecontentsoftheInternalControlGuidance and through the Audit Committee, continually reviews the adequacy and effectiveness of the riskmanagementprocesswithinthevariousoperatingbusinessunits.

TheformalizationoftheEnterpriseRiskManagementFrameworkinvolvesthefollowinginitiatives:

1. A formal risk policy andguidelines havebeen establishedand communicated to all employeesthroughout the Group.

2. A riskmanagement structurewhichoutlines the linesof reportingand responsibilityat theBoard,AuditCommittee,RiskManagementCommitteeandmanagement levelshavebeenestablished.Theriskmanagementstructureenhancesriskoversightandmonitoringprocess.

3. TheAuditCommittee’s riskmanagementfunction isassistedbytheRiskManagementCommittee(RMC), whose members comprise of senior management. The Risk Management Committee isresponsible for ensuring the effectiveness of the risk management framework of the Group, theobjectiveofwhichistoprovideenterpriserisksinvolvedinpropertyinvestment,propertydevelopment,construction, manufacturing, recreation and management activities and a systematic process for identification,assessment,managementandreportingofsuchrisksonaconsistentandreliablebasis.TheRiskManagementCommitteeismandatedtofocusonkeystrategicriskswhilstalsotoensurethatthebusinessunitsareresponsiblefortheday-to-daytracking,monitoringandcontrolofriskswithintheir operations.

4. ChiefRiskOfficerscontinuouslycarryouttheirresponsibilitiestoidentify,assessandprioritizetherisksfacedbytheGroupbasedonthelikelihoodofoccurrenceandmagnitudeofimpactandalsotoassistmanagementinidentifyingproceduresorstepstobetakentomanageorcontroltheserisks.

5. TheGroupManagement’simplementationofagroup-wideriskassessmentprocessidentifiesthekeyrisks facingeachbusiness, thepotential impactand likelihoodof thoserisksoccurring, thecontroleffectivenessandtheactionplansbeingtakentomanagethoseriskstothedesiredlevel.TheriskprofilefortheGroupandindividualbusinessunitsisproducedbyanautomatedriskmanagementsystem,andtogetherwiththeriskregisters,arereportedbytheRiskManagementCommitteetotheAuditCommitteeonayearlybasis.TheChairmanoftheAuditCommitteereportsthesignificantrisksand control issues to the Board for its consideration.

6. Ongoingriskmanagementeducationandtrainingisprovidedatmanagementandstafflevels.



RISK ASSESSMENT REVIEWS

Duringthefinancialyear,alldivisionsconductedtheirriskmanagementandinternalcontrolsystemreviewswhich were assessed by the RMC and reported to Audit Committee.

TheGroupidentifiedmajorriskareasofconcernandimplementedappropriateactionstomitigatethoserisksasoutlinedbelow:- 1. Operational

OperationalRisksrelatetotheeffectivenessandefficiencyofpeople,theintegrityofinternalcontrolsystemandprocessesandexternalfactorsthataffectdaytodayoperations.TheGroupmanagesoperationalrisksbyfocusingonpreventionandcorrectivemanagementthroughcompliancewithoperating manuals, standard operating procedures, internal control and guidelines on limits of authority.AtGrouplevel,theresidualoperationalrisksare:

i. Project Management Risks

The Group has clearly defined procedures for monitoring, managing and controllingmajorprojects. The respective operating business heads review and report the progress of major projectsandsignificantbusinessactivitiestotheExecutiveDirectorsonaregularbasis.SignificantissuesarebroughttotheattentionoftheRiskManagementCommittee,theAuditCommitteeand the Board of Directors.

ii. Human Resources Risks

The Group believes in adopting competitive and attractive human resource practices, especially in the areas of staff recruitment, talent development and compensation. The Group believes in buildingatalent-pooltoincreasetheavailabilityofexperiencedandcapableemployeestofillkeybusinessleadershippositionsinthecompany.

iii. Crisis Risks

The Group has business continuity plans in place for responding to crises and emergencies in ways thatwillensurequick recoveryandresumptionofcriticalbusiness functions. TheGroupregularly reviews its emergency response and business continuity plans and conducts tests andexercises from time to time toensure itsworkabilityand relevance. TheGroup regularlyreviewsthetype,scopeandadequacyofinsurancecoveragethatitbuys,takingintoaccount,theavailabilityofsuchcover,itscostsandthelikelihoodofoccurrenceandmagnitudeofriskinvolved.

2. Competition

The Group is exposed to stiff competition from other construction and property developmentcompanies. Intense competition may result in highly competitive pricing in order to secure sales of the Group’spropertydevelopmentprojects,whichmayconsequentlyaffectthefinancialperformanceof the Group.

Inordertostaycompetitive,theGroupshallconstantlyupdateitselfonthelatestmarketconditions,sustaining Group’s track record and continue tomaintain its competitive edge in terms of costefficiency, service quality, reliability and innovativeness. Applying energy saving and othertechnologicallyadvancedgreenfeatureswillenhancetheGroup’snichepositionintheconstructionand property development industries.

3. Supply and Cost of Raw Materials

ThemainrawmaterialsusedbytheGroupincludesteelbars,pre-mixedandreadymixedconcrete,sand, aggregates, cement, plywood, timber and other building materials, which are sourced and procured locally and overseas. Any increase of building material prices will affect the property developmentcostandalsothesellingpriceofproperty.Tomitigatethepricerisk,detailedplanningand budgeting prior to calling for tendering of property development projects is put in place to ensure lowest tender price is awarded. However, there is no assurance that any future shortage in raw materials and/or increase in the cost of raw materials will not have a material adverse impact on the Group.


4. Cost Overruns

The implementation of the property development projects involves the Group carrying out internal costing and budgeting estimates of raw materials, sub-contracting costs and other related costs and overheads based on the indicative pricing or quotations given by our suppliers and sub-contractors as well as our own estimate of costs.

However, there are a number of circumstances that could lead to additional costs not previously factored into the contract value or selling price of the properties, which include, unforeseen circumstance such as adverse soil conditions, unfavorable weather conditions or unexpectedconstruction constraints at the worksite and fluctuations in the prices of rawmaterials and sub-contractors’servicesaswellasadditionalcosts incurredthatmaynothavebeenforeseenattheinitial stage of planning for the construction or property development project.

Tomitigatetheriskofcostoverruns,detailedplanningandbudgetingareimplementedintheGroup’sproperty development projects.

5. Government Regulations and Controls

TheoperationsoftheGroup’spropertydevelopmentdivisionaresubjecttogovernmentregulations,among others, the Environment, Health and Safety regulations and the requirements of local municipal councils.Theseregulations,actsandrequirementsaretocontrolandprotectworkersandconsumersas well as to set minimum standards for the construction and property development industries.

Typically,theselawsandregulationsprovideforsubstantialfinesandpotentialcriminalprosecutionfor any breach of the same. Any breach of these laws can result in permit revocation, cessation of or restrictioninoperationsrenderingremedialworkrequired.

The Group has strictly complied and will continue to comply with these laws and regulations, however, there can be no assurance that changes to the present laws, regulations or policies or the introduction ofnewoneswillnotadverselyaffecttheGroup’sbusiness.

The Board is satisfied that there is an ongoing process of identifying, evaluating andmanagingsignificantrisksthatmayaffecttheachievementoftheGroup’sbusinessobjectives.Thesystemofinternal control will continue to be reviewed and updated in line with changes in the operating environment.

6. Housing Loans Financing

Inviewoftheslowdowninthelocalandglobaleconomy,strictmortgagelendingpoliciesbybankinginstitutions resulting in lower loan approvals have affected the sale of properties and subsequently reduced the profitability of theGroup. Tomitigate such risk, theGroup carries out the followingmeasures:-

• Switchingproductfocustoaffordablehousingwheredemandisstillresilient. • Maintainingcloseworkingrelationshipwithfinancialinstitutionstocounterthecoolingpolicies. • Developinginnovativestrategiesandnegotiatingattractiveinterestrateforloans.

Review of this Statement

Pursuanttoparagraph15.23oftheMainMarketListingRequirements,theExternalAuditorshavereviewedthis Statement for inclusion in the 2017 Annual Report, and reported to the Board that nothing has come to their attention that causes them to believe that the Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control. The statement was approved by the Board on 5 July 2017.

Conclusion

TheBoard isof theview that the systemof internalcontroland riskmanagementare inplace for theyearunderreview,anduptothedateofapprovalofthisStatement,issoundandsufficienttosafeguardshareholders’investment,theinterestsofcustomers,regulators,employeesandotherstakeholders,andtheGroup’sassets.TheBoardhasreceivedassurancefromtheExecutiveDirectorsandtheCFOthattheGroup’s riskmanagementand internalcontrol systemareoperatingadequatelyandeffectively, inallmaterialaspects,basedontheriskmanagementmodeladoptedbytheGroup.



MEMBERSHIPS AND MEETINGS

TheAuditCommittee(AC)comprisesthefollowingDirectors,allofwhomareNon-ExecutiveDirectors.

Chairman:Mr.SourenNorendra(SeniorIndependentNon-ExecutiveDirector)

Members:Mr.NgChinHoo(IndependentNon-ExecutiveDirector);andMr.WongTiekFong(Non-IndependentNon-ExecutiveDirector)

TheAuditCommitteemetfive(5)timesduringthefinancialyearended31stMarch2017.Theattendancesof the Audit Committee Members were as follows:

No. of meetings attended by directors during their Name of Members tenure in office

Souren Norendra 5/5WongTiekFong 5/5Ng Chin Hoo 5/5

TheSecretarywaspresentinallthemeetings.RepresentativesoftheExternalAuditorsandtheHeadofInternal Audit also attended the meetings upon invitation.

SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR

ThemainactivitiesundertakenbytheCommitteewereasfollows:

i. Reviewed the External Auditors’ scope of work and audit plans for the year. Prior to the audit,representativesfromtheexternalauditorspresentedtheirauditstrategyandplan.

ii. Reviewed the independenceandobjectivity of the External Auditors and the services provided,including non-audit services. The Audit Committee undertook an annual assessment of theExternalAuditors including thequalityofaudit, sufficiencyof resourcesand theExternalAuditors’independence, objectivity and professionalism. The Audit Committee also considered the nature of the provision of the non-audit services and fees and is of the opinion that such non-audit services and fees did not impair or threaten the audit independence. Based on the assessment, the Audit Committee isof theopinion thatExternalAuditors is independent for thepurposeof theGroup’sstatutory audit.

iii. RecommendedtotheBoardforapprovaloftheauditandnon-auditfeespayabletotheExternalAuditorsasdisclosedinNote6tothefinancialstatements.

iv. Reviewedthe internalauditdepartment’s resources requirements,programmesandplans for thefinancialyearunderreview.

v. Reviewed the internal audit reports, which highlighted the audit issues, recommendations and management’s response. Discussed with management actions taken to improve the system ofinternalcontrolandensurethatitisefficientandadequate.

vi. Recommended to the Board improvement opportunities in internal control, procedures and riskmanagement.

vii. Assessedandreviewedthegoingconcernbasis forpreparingtheGroup’sconsolidatedfinancialstatements based on principal risks, uncertainties, capital expenditures, future performance andexistingfinancialpositionoftheGroup.

AUDIT COMMITTEE REPORT


viii. MetwiththeExternalAuditorsand InternalAuditorswithout thepresenceofanyexecutiveBoardmember.AtthemeetingtheACenquiredaboutsignificantandunusualevents,abnormaltransactionsandconflictofinterestonrelatedpartytransactions.However,therewerenoareasofconcernraisedduring the year under reviewed.

ix. Reviewedthechangesinorimplementationofmajoraccountingpolicy,significantfinancialreportingissues, judgements made by Management, unusual events in the quarterly and annual report prior to submissiontotheBoardfortheirconsiderationandapproval.TheAuditCommitteewassatisfiedthattherewerenosignificantchangesofmajoraccountingpolicy,financialreportingissues,judgementsmade by Management and unusual events during the year under reviewed.

x. ReviewedtheCompany’scompliance inparticular thequarterlyandannualfinancialstatementswith the Listing Requirements of Bursa Malaysia Securities Berhad, MASB and other relevant legal and regulatory requirements.

xi. ReviewedwiththeExternalAuditorstheresultsoftheauditandtheauditreportforyearended31March2017.At themeeting, theACdiscussedand reviewedkeyauditmatterswith theExternalAuditorsandissatisfiedwiththestepstakenbyExternalAuditorstoresolvethekeyauditmatters.

xii. ReviewedonaquarterlybasistherelatedpartytransactionsenteredintobytheGroupandensurethat the transactions are fair and reasonable, and are not to the detriment of the minority shareholders.

xiii. ReviewedtheGroupriskassessmentreportandensuredthatactionplanstakenareadequateandeffective.

AUDIT COMMITTEE REPORT (cont’d)


INTERNAL AUDIT FUNCTION

The internal audit department is independent of the activities or operations of other operating units. The principal role of the department is to undertake independent regular and systematic reviews ofthe systemsof internalcontrol, riskmanagementandgovernance frameworkswithin theGroup soasto provide reasonable assurance that such systems continue to operate satisfactorily and effectively. It is the responsibility of the internal audit department to provide the Audit Committee with independent and objective reports on the state of internal control of the various operating units within the Group and theextentofcomplianceoftheseunitswiththeGroup’sestablishedpoliciesandproceduresaswellasrelevant statutory requirements.

The internal audit activities carried out during the year are as follow:-• ExaminedandevaluatedtheeffectivenessandefficiencyoftheGroup’sinternalcontrolsystem

and risk management system based on risk based approach audit plan and recommendingimprovementstoexistingsystemofcontrols.

• RegularinternalauditvisitstoascertaintheextentofcompliancewithestablishedGrouppoliciesandprocedures and statutory requirements.

• Conducted follow-up audits to assess if appropriate actions have been taken to address issueshighlighted in previous audit reports.

• Conducted recurrent relatedparty transactions reviews toassessaccuracyandcompletenessofreporting and ensure compliance with Bursa Malaysia Listing Requirements.

• AttendedphysicalstockcountoftheGroup.

Duringthefinancialyear,thecostinvolvedinperformingin-houseinternalauditfunctionisapproximatelyRM214,000/-.

AUDIT COMMITTEE REPORT (cont’d)


CORPORATE SOCIAL RESPONSIBILITY

Aspartofourcommitment tobea responsiblecorporatecitizen, theGroupcontinues toplacegreatemphasisoncorporate social responsibilityandembarkedon itsmissionby focusingon threeprimaryareasnamelyWorkplace,EnvironmentandCommunity.

Workplace

Webelievethatemployeesareacrucialassetandmajorcontributortooursuccess.TheGroup’spoliciesonrecruitment,workinghours,remunerationandwelfareexceedtherequirementssetforthbytherelevantauthorities.Employeesandmanagerialstaffcontinuetoattendexternalseminars,occupationalsafetyandhealthtrainingaswellasmanagementandfinancialskillupgradingprogrammestostrengthentheircompetencies,skillsandknowledgewiththeaimtoembedthehighstandardrequiredtoenhanceworkqualityandachieveoptimaljobperformance.Duringthefinancialyear,theemployeeshaveattendedvarioustrainingprogrammestoenhancetheirskillsandknowledgetomaximizetheireffectivenessontheirjob performance.

Health and safety is given the highest priority within theGroup’s operations. Benefits extended to allemployees include accident and disability insurance, maternity/paternity leave and medical coverage foremployees’non-workingspouses.Atconstructionsites,allemployees,contractorsandsub-contractorsareproperlyattiredwithsafetydevicessoastocomplywithISO9001-2008requirements.

Toencourageunityand teamworkamongallemployees, sportsactivitiesand tripswereorganised toencourageemployeestomingleandinteractwithoneanothertofostergoodwillandbuildcloserworkingrelationships.

Environment

As a responsible property developer, the Group is committed to preserve the environment and minimise any harmful environmental impact by conforming to the regulations set by the Department of Environment. Before starting any major property development projects, the Group engages independent consultants to conduct environment impact assessments in accordance with the Environment Quality Act.

In order to conserve energy and prevent global warming, the Group has introduced ways of cutting electricityconsumptionbyturningofflightandairconditionersduringlunchbreakandtoreducewaste,the Group encourages the use of recycled papers.

Community

TheGroupcontributed incashand inkindtounderprivilegedanddisablegroups.Duringthefinancialyear, the Company has made a contribution to the Bursa Bull Charge Charity Run 2016.

Sport Club - Team Building at Skytrex, Shah Alam.


rESiliENt

42 Directors’ Report 46 Statement by Directors

46 Statutory Declaration

47 Independent Auditors’ Report

51 Statements of Comprehensive Income

52 Statements of Financial Position

54 Statements of Changes in Equity

56 Statements of Cash Flows

58 Notes to the Financial Statements

FinancialStatements


DIRECTORS’ REPORT for the year ended 31 March 2017

The Directors have pleasure in submitting the Directors’ report and the audited financial statements of the Group and of the Company for the year ended 31 March 2017.

Principal activities

SHL Consolidated Bhd. is an investment holding company and it provides strategic, financial and corporate planning services. SHL Consolidated Bhd. and its subsidiaries are an integrated commercial and residential property development group which are also involved in granite quarrying and manufacturing of aggregates, general building construction, earthworks, infrastructure works, renting out of plant and machineries, the ownership and operation of a golf resort, the manufacture of clay bricks, supply of finished brickworks of wall and other brick structures, the provision of professional construction management and geo-technical services, the marketing and distribution of building materials, rental of properties and money lending business.

Financial results

Group Company RM’000 RM’000 Profit before taxation 102,738 46,113 Malaysian taxation (19,936) (4)

Profit for the year 82,802 46,109 Other comprehensive income, net of tax 181 -

Total comprehensive income for the year 82,983 46,109 Total comprehensive income for the year attributable to: • equity holders of the Company 82,475 46,109 • non-controlling interests 508 -

82,983 46,109

Dividends

The amounts of dividends declared, paid and proposed since the end of the previous financial year were as follows:-

RM’000 Dividends paid: • Second interim single-tier dividend of 7 Sen per share in respect of financial year ended 2016 16,949 • Final single-tier dividend of 6 Sen per share in respect of financial year ended 2016 14,527 • First interim single-tier dividend of 6 Sen per share in respect of financial year ended 2017 14,528

46,004 Dividend declared: • Second interim single-tier dividend of 6 Sen per share in respect of financial year ended 2017 14,528 Dividend proposed: • Final single-tier dividend of 6 Sen per share in respect of financial year ended 2017 14,528


DIRECTORS’ REPORT (cont’d)for the year ended 31 March 2017

Movements of reserves and provisions

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

Share capital

There were no changes in the issued and paid-up capital of the Company during the financial year.

Share options

There were no share options granted during the financial year or unissued shares under option at the end of the financial year, in respect of shares in the Company.

Directors

The Directors in office during the financial year and during the period from the end of the financial year to the date of the report are:-

Y.A.M. Tengku Abdul Samad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz ShahDato’ Sri Yap Teiong ChoonDato’ Sri Ir. Yap Chong LeeWong Tiek FongSouren NorendraNg Chin HooAu Lai Koong (Appointed on 26.5.2016)

Directors’ interests

According to the Register of Directors’ Shareholdings, particulars of interests in the shares in the Company and its related corporations during the financial year of those Directors holding office at the end of the financial year are as follows:-

Ordinary shares of RM1/- each 1 April 31 MarchCompany 2016 Addition Disposal 2017

Direct

Dato’ Sri Yap Teiong Choon 4,283,869 - - 4,283,869Dato’ Sri Ir. Yap Chong Lee 3,235,519 - - 3,235,519Wong Tiek Fong 80,000 - - 80,000

Indirect

Y.A.M. Tengku Abdul Samad Shah Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah 21,222,437 - - 21,222,437Dato’ Sri Yap Teiong Choon 60,659,844 - - 60,659,844Dato’ Sri Ir. Yap Chong Lee 92,105,143 - - 92,105,143

By virtue of their interests in the Company, the following Directors are also deemed to be interested in the shares of all the subsidiaries to the extent of the shares held by the Company, and there were no changes in these interests.

Dato’ Sri Yap Teiong ChoonDato’ Sri Ir. Yap Chong Lee


Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than benefits shown under Directors’ Remuneration) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than those disclosed in the financial statements.

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

Other statutory information

Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps to:

(i) ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(ii) ensure that any current assets, which were unlikely to be realised in the ordinary course of business including the values of current assets as shown in the accounting records of the Group and of the Company had been written down to an amount which the current assets might be expected so to realise.

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

(i) would render the amounts written off for bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent; or

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

(iii) have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

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

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

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

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

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

In the opinion of the Directors:

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

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



Subsidiaries

(i) Details of subsidiaries:

Details of subsidiaries are disclosed in Note 11 to the financial statements.

(ii) Independent auditors’ reports on the financial statements of the subsidiaries:

Independent auditors’ reports on the financial statements of the subsidiaries did not contain any qualifications or any adverse comment made under Section 266(3) of the Companies Act 2016.

(iii) Subsidiaries’ holding of shares in the holding company and other related corporations:

None of the subsidiaries had any interest in shares in the holding company and other related corporations during the financial year.

Directors’ remuneration Group Company RM’000 RM’000 Directors’ fee 180 180 Directors’ emoluments 2,330 24 2,510 204

Indemnity given to or insurance effected for any Directors, officers or auditors

There was no indemnity given to or insurance effected for any Directors, officers or auditors of the Group and of the Company in accordance with Section 289 of the Companies Act 2016.

Ultimate holding company

The Company is not a subsidiary of another corporation at the end of the financial year.

Auditors

Details of auditors’ remuneration are disclosed in Note 6 to the financial statements.

Messrs. Khoo Wong & Chan have indicated their willingness to continue in office.

On behalf of the Board,

________________________________________Dato’ Sri Yap Teiong Choon

________________________________________Dato’ Sri Ir. Yap Chong Lee

Kuala Lumpur,5 July 2017



We, Dato’ Sri Yap Teiong Choon and Dato’ Sri Ir. Yap Chong Lee being the Directors of SHL Consolidated Bhd. do hereby state on behalf of the Board of Directors that in our opinion, the financial statements set out on pages 51 to 119 give a true and fair view of the financial position of the Group and of the Company as at 31 March 2017 and of their financial performance, changes in equity and cash flows for the year ended on that date in accordance with Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

The information set out in Note 38 to the financial statements has been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements as issued by the Malaysian Institute of Accountants.

On behalf of the Board,

Dato’ Sri Yap Teiong Choon Dato’ Sri Ir. Yap Chong Lee


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

I, Wong Tiek Fong, being the Director primarily responsible for the accounting records and financial management of SHL Consolidated Bhd. do solemnly and sincerely declare that the financial statements set out on pages 51 to 119 are to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by }Wong Tiek Fong }at Kuala Lumpur in the }Federal Territory }on 5 July 2017 } Wong Tiek Fong

Before me,

STATEMENT BY DIRECTORSPursuant to Section 251(2) of the Companies Act 2016


Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of SHL Consolidated Bhd., which comprise the statements of financial position as at 31 March 2017 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 51 to 119.

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

Basis for Opinion

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

Independence and Other Ethical Requirements

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysia Institute of Accountants (‘By-Laws’) and we have fulfilled our other ethical responsibilities in accordance with the By-Laws.

Key Audit Matters

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

INDEPENDENT AUDITORS’ REPORTTo The Members of SHL Consolidated Bhd.

Key audit matter

Recognition of property development revenue and costs, related receivables and payables

The Group has long-term contracts in property development of which revenue and cost of sales recognised during the financial year amounted to RM188.96 million and RM88.25 million respectively [Refer to Notes 5 and 6].

The Group recognises property development revenue and expenses in profit or loss by using the percentage of completion method determined by the proportion that property development and contract costs incurred for work performed to date bear to the estimated total property development and contract costs and survey of work performed.

In doing so, the Group is required to exercise significant judgment in their assessment of the valuation of contract variations, claims and liquidated damages for both current and future contract financial performance.

How our audit addressed the key audit matter

In assessing the appropriateness of the extent of costs incurred, total estimated development costs and total estimated revenue collectively, we have:

• Assessed reliability of management’s budgeting process by comparing the estimated development costs against actual outcomes.

• Checked the budgeted development costs against the letter of award issued to sub-contractors.

• Obtained an understanding of the process of deriving the stage of completion which includes verifying the certified work done to progress claims from contractors and architect certification.

• Performed analytical reviews including reasonableness test on the percentage of completion and profit recognition.

• Performed cut off test on contractor costs and progress billings.


Key audit matter

Recognition of property development revenue and costs, related receivables and payables (cont’d)

An error in the contract forecast could result in a material variance in the amount of profit or loss recognised to date and therefore also in the current year [Refer to Note 3.4 (g) for key sources of estimates and judgements].

Fair value of investment properties

The Group’s investment properties as at 31 March 2017 is RM69.88 million [Refer to Note 13]. These investment properties are measured at fair value.

The Group determines the fair value of its investment properties by reference to selling prices of recent transactions and asking prices of similar properties of nearby location and where necessary, adjusting for tenure, location and size.

The valuation of investment properties requires significant judgement and estimation [Refer to Note 3.4 (c) for key sources of estimates and judgements].

How our audit addressed the key audit matter

• Verified the gross development value to the signed sales and purchase agreement and estimated selling price of unsold units to latest transacted selling price.

• Observed the progress of a significant on-going project by performing site visit.

• Assessed recoverability of related receivables and payables that may arise.

As a result of review, assessment and substantive checking, we are satisfied with the recognition of the property development revenue and costs as well as the related receivables and payables.

Our audit procedures included, among others:

• Reviewed the basis of valuation adopted, considered and challenged the assumptions used in the valuation model.

• Validated the mathematical accuracy of the valuation model used.

• Sourced for available data independently.

We are satisfied with management’s valuation and the fair value being recognised is appropriate.

Key Audit Matters (cont’d)

INDEPENDENT AUDITORS’ REPORT (cont’d)To The Members of SHL Consolidated Bhd.

Information other than the Financial Statements and Auditors’ Report thereon

The Directors of the Company are responsible for the other information. The other information comprises the information included in the annual report but excludes the financial statements of the Group and of the Company and our auditors’ report thereon.

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

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

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



Responsibilities of the Directors for the Financial Statements

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

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


Auditors’ Responsibilities for the Audit of the Financial Statements (continued)

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

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

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

Other Reporting Responsibilities

The supplementary information set out in Note 38 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

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

Engagement Partner

The engagement partner on the audit resulting in this independent auditors’ report is Wong Fen Kong.

Khoo Wong & Chan Wong Fen KongChartered Accountants Partner(AF: 0736) 683/3/19(J/PH) Chartered Accountant




STATEMENTS OF COMPREHENSIVE INCOME for the year ended 31 March 2017

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

Revenue 5 203,159 231,936 46,524 51,079Cost of sales (96,501) (132,651) - -

Gross profit 106,658 99,285 46,524 51,079Other operating income 10,085 13,489 - - Distribution costs (4,860) (5,566) - - Administration expenses (9,873) (9,064) (411) (512)

Profit from operations 102,010 98,144 46,113 50,567Finance costs (52) (54) - - Profit/(loss) from associate 780 (1,854) - -

Profit before taxation 6 102,738 96,236 46,113 50,567 Taxation 7 (19,936) (16,261) (4) (7)

Profit for the year 82,802 79,975 46,109 50,560

Other comprehensive income: • effect of a change in imposition of tax rates - 71 - - • realisation of deferred tax liability upon disposal of revalued assets 181 145 - -

Total comprehensive income for the year 82,983 80,191 46,109 50,560 Profit for the year attributable to: • equity holders of the Company 82,294 79,668 46,109 50,560• non-controlling interests 508 307 - -

82,802 79,975 46,109 50,560

Total comprehensive income for the year attributable to: • equity holders of the Company 82,475 79,884 46,109 50,560• non-controlling interests 508 307 - - 82,983 80,191 46,109 50,560 Sen Sen Earnings per share 8 Basic and fully diluted 33.99 32.90

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


STATEMENTS OF FINANCIAL POSITIONas at 31 March 2017


ASSETS Non-current assets

Property, plant and equipment 9 214,471 215,735 - - Prepaid lease payments 10 685 695 - - Investment in subsidiaries 11 - - 422,024 422,024Investment in associate 12 15,437 14,657 - - Investment properties 13 69,880 69,880 - - Land held for property development 14 2,740 4,031 - - Investments 15 24 24 - - Trust account 2,399 2,411 - - Deferred tax assets 16 1,611 1,868 - - Trade receivables 17 2,322 2,346 - -

309,569 311,647 422,024 422,024 Current assets

Prepaid lease payments 10 10 10 - - Amounts due from subsidiaries 18 - - 82,211 88,811Property development costs 19 191,961 184,093 - - Inventories 20 15,210 16,648 - - Trade receivables 17 79,712 35,281 - - Other receivables 21 8,184 9,404 - 15Current tax assets 2,057 8,699 - - Cash and deposits 22 290,420 305,810 640 933

587,554 559,945 82,851 89,759

897,123 871,592 504,875 511,783



STATEMENTS OF FINANCIAL POSITIONas at 31 March 2017 (cont’d)


EQUITY AND LIABILITIES Equity attributable to equity holders of the Company

Share capital 23 242,124 242,124 242,124 242,124 Reserves 24 508,106 471,635 191,980 191,875 750,230 713,759 434,104 433,999Non-controlling interests 18,610 18,102 - -

TOTAL EQUITY 768,840 731,861 434,104 433,999 Non-current liabilities

Deferred tax liabilities 16 21,983 22,656 - - Finance lease liabilities 25 604 569 - - Club establishment fund 26 11,022 11,845 - -

33,609 35,070 - - Current liabilities

Amounts due to subsidiaries 18 - - 70,744 77,743Amounts due to Directors 18 - 2,000 - - Trade payables 27 82,505 90,016 - - Other payables 28 8,871 12,227 26 39Current tax liabilities 2,793 41 1 2Finance lease liabilities 25 505 377 - - 94,674 104,661 70,771 77,784

TOTAL LIABILITIES 128,283 139,731 70,771 77,784

TOTAL EQUITY AND LIABILITIES 897,123 871,592 504,875 511,783



STATEMENTS OF CHANGES IN EQUITYfor the year ended 31 March 2017

Total attributable to equity holders of Non- Group Note Share Share *Other Retained the controlling Total 2017 capital premium reserves profits Company interests equity RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 April 2016 242,124 1,225 (22,553) 492,963 713,759 18,102 731,861 Total comprehensive income for the year - - 181 82,294 82,475 508 82,983Transfer within reserves: • realisation of revaluation surplus - - (722) 722 - - - Transaction with owners: • dividends 29 - - - (46,004) (46,004) - (46,004)

At 31 March 2017 242,124 1,225 (23,094) 529,975 750,230 18,610 768,840 2016 At 1 April 2015 242,124 1,225 (22,189) 473,246 694,406 19,795 714,201 Total comprehensive income for the year - - 216 79,668 79,884 307 80,191 Transfer within reserves: • realisation of revaluation surplus - - (580) 580 - - - Transaction with owners: • dividends 29 - - - (60,531) (60,531) - (60,531)Transaction with non-controlling interests: • dividends - - - - - (2,000) (2,000)

At 31 March 2016 242,124 1,225 (22,553) 492,963 713,759 18,102 731,861

*Analysis of other reserves: Revaluation Capital Merger Group surplus reserves deficit Total 2017 RM’000 RM’000 RM’000 RM’000 At 1 April 2016 96,871 11,040 (130,464) (22,553)Total comprehensive income for the year 181 - - 181Transfer within reserves: • realisation of revaluation surplus (722) - - (722)

At 31 March 2017 96,330 11,040 (130,464) (23,094)

2016 At 1 April 2015 97,235 11,040 (130,464) (22,189)Total comprehensive income for the year 216 - - 216 Transfer within reserves: • realisation of revaluation surplus (580) - - (580)

At 31 March 2016 96,871 11,040 (130,464) (22,553)




STATEMENTS OF CHANGES IN EQUITYfor the year ended 31 March 2017 (cont’d)

Company Note Share Share *Other Retained Total 2017 capital premium reserves profits equity RM’000 RM’000 RM’000 RM’000 RM’000 At 1 April 2016 242,124 1,225 27,738 162,912 433,999Total comprehensive income for the year - - - 46,109 46,109Transaction with owners: • dividends 29 - - - (46,004) (46,004)

At 31 March 2017 242,124 1,225 27,738 163,017 434,104 2016 At 1 April 2015 242,124 1,225 27,738 172,883 443,970 Total comprehensive income for the year - - - 50,560 50,560 Transaction with owners: • dividends 29 - - - (60,531) (60,531)

At 31 March 2016 242,124 1,225 27,738 162,912 433,999

*Analysis of other reserves: Merger Capital Company reserve reserve Total2017 RM’000 RM’000 RM’000 At 1 April 2016 and 31 March 2017 4,377 23,361 27,738 2016 At 1 April 2015 and 31 March 2016 4,377 23,361 27,738


STATEMENTS OF CASH FLOWSfor the year ended 31 March 2017


Cash flows from operating activities Profit before taxation 102,738 96,236 46,113 50,567 Adjustments for: Depreciation and amortisation 5,764 8,005 - - Gain on disposal of: • property, plant and equipment (24) (99) - - • investment properties - (60) - - • investments - (385) - - Derecognition of: • property, plant and equipment 1 - - - • subsidiaries - 102 - 69 Interest expenses 52 54 - - Interest income (9,902) (10,831) (24) (32)Dividend income - - (46,500) (51,047)(Profit)/loss from associate (780) 1,854 - -

Operating profit/(loss) before working capital changes 97,849 94,876 (411) (443)(Increase)/decrease in inventories and property development costs (6,430) 25,468 - - (Increase)/decrease in receivables (43,187) 75,815 6,615 10,085Increase/(decrease) in payables (12,867) (41,707) (7,012) (4,196)

Cash generated from/(absorbed by) operations 35,365 154,452 (808) 5,446Tax paid (10,814) (27,791) (5) (7)Tax refunded 37 1,016 - -

Net cash from/(used in) operating activities 24,588 127,677 (813) 5,439



STATEMENTS OF CASH FLOWSfor the year ended 31 March 2017 (cont’d)


Cash flows from investing activities Claim received from trust account 279 - - - Payment to trust account (267) (277) - - Purchase of: • property, plant and equipment 30 (2,440) (1,221) - - • land held for property development (140) (122) - - Proceeds from disposal of: • property, plant and equipment 24 99 - - • investment properties - 580 - - • investments - 8,086 - - Capital repayment from derecognised subsidiaries - - - 4,200Cash flows from derecognised subsidiaries - (81) - - Interest received 9,902 10,831 24 32Dividends received from: • subsidiaries - - 46,500 51,047• associate - 8,287 - - Net cash from/(used in) investing activities 7,358 26,182 46,524 55,279 Cash flows from financing activities Proceeds/(Repayment) of club members’ deposits (823) 26 - - Payment of finance lease liabilities (457) (1,080) - - Interest paid (52) (54) - - Dividends paid to shareholders of the Company (46,004) (60,531) (46,004) (60,531)Dividends paid to non-controlling interests - (2,000) - -

Net cash from/(used in) financing activities (47,336) (63,639) (46,004) (60,531)

Net increase/(decrease) in cash and cash equivalents (15,390) 90,220 (293) 187Cash and cash equivalents at 1 April 305,810 215,590 933 746

Cash and cash equivalents at 31 March 290,420 305,810 640 933 Analysis of cash and cash equivalents Cash and deposits 290,420 305,810 640 933



NOTES TO THE FINANCIAL STATEMENTS31 March 2017

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. GENERAL INFORMATION

1.1 Principal activities

The Company is an investment holding company and it provides strategic, financial and corporate planning services.

The Group is an integrated commercial and residential property developer and is also involved in granite quarrying and manufacturing of aggregates, general building construction, earthworks, infrastructure works, renting out of plant and machineries, the ownership and operation of a golf resort, the manufacture of clay bricks, supply of finished brickworks of wall and other brick structures, the provision of professional construction management and geo-technical services, the marketing and distribution of building materials, rental of properties and money lending business.

1.2 Legal form and domicile

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

1.3 Registered office and principal place of business

The addresses of the registered office and principal place of business are as follows:-

Registered office 6th Floor, Wisma Sin Heap Lee, 346 Jalan Tun Razak, 50400 Kuala Lumpur.

Principal place of business 16th Floor, Wisma Sin Heap Lee, 346 Jalan Tun Razak, 50400 Kuala Lumpur.

1.4 Authorisation for issue

The financial statements were authorised for issue by the Directors on 5 July 2017.

2. FINANCIAL RISK MANAGEMENT POLICIES

The Group and the Company’s financial risk management policies seek to ensure that adequate financial resources are available for the development of the Group and of the Company’s businesses whilst managing their risks. The Group and the Company operate within clearly defined guidelines that are approved by the Board and the Group and the Company’s policies are to forbid speculative transactions.

The main areas of financial risks faced by the Group and by the Company and the policies in respect of the major areas of treasury activity are set out as follows:

NOTES TO THE FINANCIAL STATEMENTS31 March 2017 (cont’d)


2. FINANCIAL RISK MANAGEMENT POLICIES (CONTINUED)

2.1 Foreign currency risk

The Group and the Company are exposed to foreign currency risk as a result of their normal trading activities, where the currency denomination differs from the local currency, Ringgit Malaysia (RM). The Group and the Company’s policies are to keep their foreign currency risk exposure to an acceptable level.

2.2 Interest rate risk

The Group and the Company place surplus funds in the form of short-term deposits with reputable financial institutions to earn interest income based on prevailing market rates. The Group and the Company manage their interest rate risk by placing such funds for the maturity periods of 12 months or less.

The Group and the Company’s policies are to borrow principally on the floating rate basis but to retain a proportion of fixed rate debt. The objectives for the mix between floating and fixed rate borrowings are set to reduce the impact of an upward change in interest rates while enabling benefits to be enjoyed if interest rates fall.

2.3 Market risk

The Group and the Company’s principal exposure to market risk arises mainly from the changes in equity prices. The Group and the Company manage the risk of unfavourable changes by cautious review of the investments before investing and continuous monitoring of their performance and risk profiles.

2.4 Credit risk

The credit risk is controlled by the application of credit approvals, limits and monitoring procedures. This is done through reference to published credit ratings by prime financial institutions. In the absence of published ratings, an internal credit review is conducted if the credit risk is material.

2.5 Liquidity and cash flow risks

The Group and the Company seek to achieve a balance between certainty of funding even in difficult times for the markets or the Group and the Company and a flexible, cost-effective borrowing structure. This is to ensure that at the minimum, all projected net borrowing needs are covered by committed facilities. Also, the objective for debt maturity is to ensure that the amount of debt maturing in any one year is within the Group and the Company’s means to repay and refinance.

3. BASIS OF PREPARATION

3.1 Statement of compliance

The consolidated financial statements of the Group “Group” and separate financial statements of the Company “Company” comply with Financial Reporting Standards (FRSs) and the requirements of the Companies Act 2016 in Malaysia.

3.2 Basis of measurement

The financial statements of the Group and of the Company have been prepared under the historical cost basis, unless otherwise indicated in the following significant accounting policies.



3. BASIS OF PREPARATION (CONTINUED)

3.3 Functional and presentation currency

The financial statements are presented in Ringgit Malaysia (RM), which is the Group and the Company’s functional currency. All financial information presented in RM had been rounded to the nearest thousand.

3.4 Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Estimates and judgements

The following are the estimates and judgements made by management in the process of applying the Group and the Company’s accounting policies that have the most significant effect on the amounts recognised in the financial statements.

(a) Estimated useful lives and impairment assessment of property, plant and equipment

The Group reviews annually the estimated useful lives and assesses for indicators of impairment of property, plant and equipment based on factors such as business plan and strategies, historical sector and industry trends, general market and economic conditions, expected level of usage and future technological developments and other available information. Future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned. An impairment or a reduction in the estimated useful lives of property, plant and equipment increases recorded impairment or depreciation and decreases property, plant and equipment or vice versa.

The carrying amount of the Group’s property, plant and equipment as at the end of the financial year is disclosed in Note 9 to the financial statements.

(b) Classification between investment properties and property, plant and equipment

The Group has developed certain criteria based on FRS 140 in making judgement whether a property qualifies as an investment property. Investment property is a property held for earning rentals or capital appreciation or both. Judgement is made on an individual property basis to determine whether the property qualifies as an investment property.

(c) Fair values of investment properties and property, plant and equipment

Fair values of investment properties and land and buildings classified as property, plant and equipment are determined by the Directors by comparing their current value with recent sale of similar properties in the vicinity with appropriate adjustments made to differences in location, floor area and other relevant factors before arriving at the fair values of the properties. The determination of appropriate adjustments to the recent sale value involves a degree of judgement before arriving at the respective properties’ fair values.

The carrying amounts of the Group’s land and buildings and investment properties as at the end of the financial year are disclosed in Notes 9 and 13 to the financial statements.



3. BASIS OF PREPARATION (CONTINUED)

3.4 Use of estimates and judgements (continued)

Estimates and judgements (continued)

(d) Impairment of investment in subsidiaries and associate

The Group and the Company determine whether the carrying amounts of their investments are impaired at reporting date. This involves measuring the recoverable amount which includes fair value less costs to sell and valuation techniques. Valuation techniques include amongst others, discounted cash flows analysis and in some cases, based on current market indicators and estimates that provide reasonable approximations to the detailed computation or based on total equity of the subsidiaries and associates.

The carrying amounts of the Group and the Company’s subsidiaries and associate as at the end of the financial year are disclosed in Notes 11 and 12 to the financial statements.

(e) Valuation of property development costs and inventories

The Group assesses the expected selling price and costs to sell each of the plots or units that constitute the Group’s land bank and completed development units. Cost includes the cost of acquisition of land, the cost of infrastructure and construction works, and legal and professional fees incurred during development prior to sale. Estimation of the selling price is subject to significant inherent uncertainties, in particular the prediction of future trends in the market value of land.

Whilst the Group exercises due care and attention to make reasonable estimates, taking into account all available information in estimating the future selling price, the estimates will, in all likelihood, differ from the actual selling prices achieved in future periods and these differences may, in certain circumstances, be very significant.

The carrying amounts of the Group’s property development costs and inventories as at the end of the financial year are disclosed in Notes 19 and 20 to the financial statements.

(f) Allowance for impairment

The Group reviews the adequacy of allowance for impairment on all outstanding receivables as at the reporting date. In assessing the extent of uncollectible debts, management has given due consideration to all pertinent information relating to the ability of the debtors to settle the debts. The pertinent information is inherently uncertain and accordingly, the due consideration involves subjective judgements.

The carrying amount of the Group’s trade receivables as at the end of the financial year is disclosed in Note 17 to the financial statements.

(g) Property development and construction contracts

The Group recognises property development and contract revenue and costs in profit or loss by using the percentage of completion method. The percentage of completion is determined by reference to proportion of property development costs incurred for work performed to date bear to the total estimated property development costs and surveys of work performed.

Significant judgement is required in determining the percentage of completion, the extent of property development and contract costs incurred, the estimated total property development and contract revenue and costs, as well as the recoverability of the development and contract projects. In making the judgement, the Group evaluates it by relying on past experience and the work of specialists.



4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Financial Reporting Standards (FRSs)

(A) Amendments to FRSs and Annual Improvements to FRSs (‘Standards’) that are effective for current year

The following Standards are applicable to the Group and the Company, which are effective for the current year:-

Effective for financial periods beginning on or after 1 January 2016 • Amendments to FRS 10 Consolidated Financial Statements• Amendments to FRS 12 Disclosure of Interests in Other Entities• Amendments to FRS 101 Presentation of Financial Statements• Amendments to FRS 116 Property, Plant and Equipment• Amendments to FRS 127 Separate Financial Statements• Amendments to FRS 128 Investment in Associates and Joint Ventures• Amendments to FRS 138 Intangible Assets• Annual Improvements to FRSs 2012 – 2014 Cycle

The initial application of these Standards has no material impact on the Group and the Company’s financial statements.

(B) New FRSs, Amendments to FRSs and Annual Improvements to FRSs and IC Interpretation (‘Standards’) that are yet to be effective for current year

No early adoption is made by the Group and the Company on the following Standards that are expected to have application to the Group and the Company’s operations. These Standards have been issued by the MASB, but yet to be effective:-

Effective for financial periods beginning on or after 1 January 2017 • Amendments to FRS 107 Statement of Cash Flows• Amendments to FRS 112 Income Taxes• Annual Improvements to FRSs 2014 – 2016 Cycle Effective for financial periods beginning on or after 1 January 2018 • FRS 9 Financial Instruments• Amendments to FRS 140 Investment Properties• Annual Improvements to FRSs 2014 – 2016 Cycle• IC Interpretation 22 Foreign Currency Transactions and Advance Consideration

Effective date to be announced• Amendments to FRS 10 Consolidated Financial Statements• Amendments to FRS 128 Investment in Associates and Joint Ventures



4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

4.1 Financial Reporting Standards (FRSs) (continued)

(B) New FRSs, Amendments to FRSs, Annual Improvements to FRSs and IC Interpretation (‘Standards’) that are yet to be effective for current year (continued)

The initial application of these Standards is expected to have no material impact on the Group and the Company’s financial statements, other than those disclosed below:-

Standards Summary of key requirements and impact of initial application

FRS 9 FRS 9 replaces the existing guidance in FRS 139 Financial Instruments: Recognition and Measurement.

FRS 9 carries forward the guidance on recognition and derecognition of financial instruments from FRS 139, but it introduces:

• Revised guidance on the classification and measurement of financial instruments;

• New expected credit loss model for calculating impairment on financial assets; and

• New general hedge accounting requirements.

Except for hedge accounting, retrospective application is required but providing comparative information is non-compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.

The Directors anticipate that the application of FRS 9 may have a material impact on amounts reported in respect of the Group and the Company’s financial assets and financial liabilities. However, it is impracticable to provide a reasonable estimate of the effect until the Group and the Company undertake a detailed review.




4.2 Malaysian Financial Reporting Standards (MFRSs)

On 19 November 2011, the Malaysian Accounting Standards Board (MASB) issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (‘MFRSs’), which is mandatory for financial periods beginning on or after 1 January 2012, with the exception of transitioning entities.

Transitioning entities (TE) include:

(a) entities that are within the scope of:

• MFRS 141 Agriculture; and • IC Interpretation 15 Agreements for Construction of Real Estate

(b) the parent, significant investor and venture of entities as stated in (a) above.

TE will be allowed to defer adoption of the MFRS framework and continue to use the existing FRS Framework. The adoption of MFRS framework by TE will be mandatory for annual periods beginning on or after 1 January 2018.

The Group and the Company fall within the scope definition of TE and accordingly, will be required to prepare financial statements using the MFRS framework in their first MFRS financial statements for the year ending 31 March 2019.

In presenting the first MFRS financial statements, the Group and the Company will be required to restate the comparative financial statements to amounts reflecting the application of MFRS framework. The Group and the Company are making an assessment of the financial impact and effects on disclosures and measurement ensuing from the transition.

4.3 Consolidated financial statements

(i) Subsidiaries

Subsidiaries are those entities controlled by the Company. Control is achieved when the Company:-

• has power over the investee;• is exposed, or has rights, to variable returns from its involvement with the investee; and• has the ability to use its power to affect its returns.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Subsidiaries are consolidated using the acquisition method of accounting, except for those subsidiaries acquired under common control.

Under the acquisition method of accounting, the consideration transferred is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Contingent consideration is measured at fair value as part of the consideration transferred with subsequent adjustment resulting from events after the acquisition date recognised in profit or loss. Acquisition related costs are recognised as expenses in profit or loss in the period in which they are incurred.

If a business combination is achieved in stages, the previously held equity interest in the acquiree is remeasured to the acquisition-date fair value. Any resulting gain or loss is recognised in profit or loss.




4.3 Consolidated financial statements (continued)

(i) Subsidiaries (continued)

Non-controlling interests that are present ownership interests entitling their holders to a proportionate share of the acquiree’s net assets in the event of liquidation may be initially measured either:

• at fair value; or• at the non-controlling interests’ proportionate share of the recognised amounts of the

acquiree’s identifiable net assets.

The choice of measurement is made on a transaction-by-transaction basis. Other types of non-controlling interest are measured at fair value.

Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at acquisition-date fair value. Any excess of (a) over (b) below is recognised as goodwill in the statements of financial position:-

(a) the sum of:

• the fair value of consideration transferred;• the amount of non-controlling interests in the acquiree (if any); and• the fair value of Group’s previously held equity interests in the acquiree (if any).

(b) the Group’s share of the fair value of the identifiable net assets acquired at the acquisition date.

In instances where (b) exceeds (a), the excess is recognised as a gain on bargain purchase directly in profit or loss on the acquisition date.

All intragroup transactions, balances and unrealised gains and losses are eliminated in full. Intragroup unrealised losses may indicate an impairment that requires recognition in the consolidated financial statements.

Loss of controlUpon a loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any gain or loss arising from the loss of control of a subsidiary is recognised in profit or loss and measured as the difference between:

• aggregate of the fair value of the consideration received and the fair value of any retained interest and

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

If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.





(i) Subsidiaries (continued)

Transactions with non-controlling interests

Non-controlling interests represent that portion of the profit or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly by the Group. It is measured at:-

• the non-controlling interests’ share of the fair value of the subsidiary’s identifiable assets and liabilities at the acquisition date; and

• changes in the subsidiary’s equity since that date.

Total comprehensive income is attributed to the Group and the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interest in a subsidiary without loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests is adjusted and the fair value of consideration paid or received is recognised directly in equity and attributed to the Group.

(ii) Business combination under common control

Business combinations under common control are accounted for using the predecessor method of merger accounting. Under the predecessor method of merger accounting, the profit or loss and other comprehensive income include the results of each of the combining entities from the earliest date presented or from the date when these entities came under the control of the common controlling party (if later).

The assets and liabilities of the combining entities are recognised basing on the carrying amounts from the perspective of the common controlling party, or the combining entities if the common controlling party prepares no consolidated financial statements.

The difference in the cost of combination over the aggregate carrying amounts of the assets and liabilities of the combining entities as at the date of the combination is recognised directly in equity. Transaction costs for the combination are recognised as expenses in the profit or loss.





(iii) Associates Associates are entities in which the Group is in a position to exercise significant influence.

Significant influence is the power to participate in the financial and operating policy decisions, but has no control over those policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting and are initially measured at cost. The Group’s investment in associates includes goodwill identified on acquisition net of any accumulated impairment loss.

The Group assesses at each reporting date whether there is any objective evidence that an investment in the associate is impaired. If this is the case, the Group measures the amount of impairment as the difference between the recoverable amount of the associate and its carrying amount and recognises the amount in profit or loss.

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the profit or loss, and its share of post-acquisition movements in reserves is recognised in other comprehensive income. Where necessary, adjustments are made to the results and net assets of associates to ensure consistency of accounting policies with those of the Group. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

When significant influence ceases, the disposal proceeds, if any, and the fair value of any retained investment are compared to the carrying amount of the investment as at that date. The difference together with any accumulated exchange differences that relate to the associate is recognised in the profit or loss as gain or loss on disposal of the associate. The remaining investment retained in the previous associate is subsequently accounted for as an available-for-sale financial asset in accordance with FRS 139.




4.4 Revenue recognition

Revenue is recognised to the extent that:-

• it is probable that the economic benefits will flow to the Group and the Company; and• it can be reliably measured.

Revenue is measured at the fair value of consideration received or receivable.

The following specific recognition criteria must also be met before revenue is recognised:-

(i) Investment income Dividend income from investments is recognised in profit or loss when the right to receive is

established.

(ii) Income from property development and construction contracts The Group recognises property development and construction contracts revenues using

the percentage of completion method as described in Notes 4.17 and 4.18 respectively.

(iii) Interest income

Interest income is recognised in profit or loss as it accrues using the effective interest method.

(iv) Rental income Rental income is recognised in profit or loss on a straight-line basis over the relevant tenancy

agreements.

(v) Income from sales of goods and services

Sales of goods are recognised when a Group entity has delivered products to the customer; the customer has accepted the products and collectibility of the related receivables is reasonably assured.

Sales of services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.




4.5 Employee benefits

(i) Short-term benefits

Wages, salaries, bonuses and social security contributions are recognised as expenses in the period in which the associated services are rendered by employees of the Group and of the Company. Short-term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short-term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans

As required by law, the Group and the Company make contributions to the state pension scheme, the Employees Provident Fund (“EPF”). Such contributions are recognised as expenses in profit or loss as incurred.

4.6 Borrowing costs

Borrowing costs incurred to finance the construction of any qualifying assets are capitalised as part of the cost of the assets during the period of time that is required to complete and prepare the asset for its intended use.

All other borrowing costs are recognised as expenses in profit or loss in which they are incurred.

4.7 Income taxes

Income tax expense represents the sum of the current tax and deferred tax.

Current tax and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination or items recognised directly in equity or in other comprehensive income.

Current tax

The current tax is the amount of income taxes payable in respect of the taxable profit for a period. The Group and the Company’s liabilities for current tax are calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred taxDeferred tax is recognised in full, using the liability method, on temporary differences arising between the carrying amounts of assets and liabilities in the financial statements and their tax bases. No deferred tax is recognised for the temporary differences arising from:-

• the initial recognition of goodwill;• the initial recognition of assets or liabilities in a transaction other than a business combination

and that affects neither accounting or taxable profit or loss.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Where investment properties are carried at their fair value, the amount of deferred tax recognised is measured using the tax rates that would apply on sale of those assets at their carrying amount at the reporting date, unless the property is:




4.7 Income taxes (continued)

Deferred tax (continued)

• depreciation; and• held with the objective to consume substantially all of the economic benefits embodied in

the property over time, rather than through sale.

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

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax asset is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle their current tax assets and liabilities on a net basis.

4.8 Foreign currencies

The financial statements are presented in Ringgit Malaysia (RM).

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. At the reporting date, non-monetary items are translated at historical rates or rates prevailing when the fair value of the assets was determined. Monetary items are translated at the closing rate.

Foreign exchange gains and losses resulting from the settlement of such transactions and from there translation of monetary assets and liabilities at closing rate are recognised in profit or loss, except for foreign currency translation differences arising on the retranslation of available-for-sale equity instruments, which are recognised in other comprehensive income.

Foreign currency translation differences for non-monetary items such as investment properties held at fair value through profit or loss, are recognised in profit or loss as part of the fair value gain or loss. Foreign currency translation differences for non-monetary items such as property, plant and equipment at valuation are recognised directly in equity or profit or loss, where appropriate, as part of the revaluation surpluses or deficits.




4.9 Revaluations

The Group and the Company adopt the policy to revalue the land and/or buildings held as property, plant and equipment at least once in every 5 years or at such shorter period as may be considered to be appropriate based on the advice of external professional valuers and appraisers and / or Directors’ valuation.

A revaluation surplus is recognised in other comprehensive income and accumulated in equity under revaluation surplus, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss.

A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset carried in the revaluation surplus, in which case the decrease is recognised in other comprehensive income and it reduces the amount accumulated in equity under revaluation surplus.

On disposal of revalued asset, amount in revaluation surplus relating to that asset is transferred to retained profits.

4.10 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• in the principal market for the asset or liability, or• in the absence of a principal market, in the most advantageous market for the asset or

liability.

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

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

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 inputs are unadjusted quoted prices in active market for identical assets or liabilitiesLevel 2 inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities either directly or indirectlyLevel 3 Inputs that are unobservable for the asset or liability

For assets and liabilities that are recognised in the financial statements on a recurring basis,

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




4.11 Impairment of assets

(i) Non-financial assets

The carrying amounts of assets, except construction contracts, property development costs, inventories, deferred tax assets and financial assets, are assessed for impairment when there is an indication that the assets might be impaired. For goodwill and intangible assets with indefinite useful life, the recoverable amount is estimated at each reporting date.

Impairment is measured by comparing the carrying amounts of the assets with their recoverable amounts. The recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets, or if it is impossible, for the cash-generating unit (CGU). For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

An impairment loss is recognised in profit or loss immediately, unless the asset is measured at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of previously recognised revaluation surplus for the same asset.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

In respect of goodwill, no reversal is made for impairment loss previously recognised. In respect of other assets, subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss. It is recognised to the extent of the carrying amount of the asset that would have determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is measured at revalued amount. A reversal of an impairment loss on a revalued asset is recognised in other comprehensive income and it increases the amount accumulated in equity under revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in profit or loss, a reversal of that impairment loss is recognised as income in profit or loss.




4.11 Impairment of assets (continued)

(ii) Financial assets

The Group and the Company assess as at each reporting date whether there is any objective evidence that a financial asset is impaired.

Available-for-sale financial assets

(a) Quoted instruments:

Equity instruments:

In the case of equity investments classified as available-for-sale, objective evidence of impairment includes:

• significant financial difficulty of the issuer or obligor;

• information about significant changes with an adverse effect that has taken place in the technological, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in equity instrument may by impaired; and

• significant or prolonged decline in the fair value of the investment below its costs.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its acquisition cost and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from other comprehensive income and recognised in profit or loss.

No reversal of impairment losses in profit or loss on available-for-sale equity investments in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income.

Debt instruments:

In the case of debt instruments classified as available-for-sale, impairment is assessed basing on the same criteria as financial assets measured at amortised cost. However, the amount recognised for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss.

Further interest income continues to be accrued based on the reduced carrying

amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recognised as part of finance income.

If a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed in profit or loss.




4.11 Impairment of assets (continued)

(ii) Financial assets (continued)

(b) Unquoted instruments:

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets measured at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

No reversal is made for such impairment losses in subsequent periods.

Loans and receivables

To assess whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as:-

• probability of insolvency;• significant financial difficulties of the debtor; and• default or significant delay in payments

For certain categories of financial assets, such as trade receivables, assets that are assessed to be unimpaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables includes:-

• the Group and the Company’s past experience of collecting payments;• an increase in the number of delayed payments in the portfolio past the average credit period; and• observable changes in national or local economic conditions that correlate with default on receivables

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is derecognised from the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset is equal to or below its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.




4.12 Property, plant and equipment

Property, plant and equipment are measured at cost and valuation less accumulated depreciation and impairment losses.

Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of items of property, plant and equipment, except those leased under finance lease, where applicable. If there is no reasonable certainty that the ownership will be transferred to the Group by the end of the lease term, an item of property, plant and equipment is depreciated over the shorter of its useful life and the lease term.

The principal annual rates adopted are as follows:-

Long leasehold land - 87 yearsBuildings - 2%Plant & machinery - 9% to 13%Motor vehicles - 20%Furniture, fittings & equipment - 10% to 20%

On derecognition or disposal of an item of property, plant and equipment, the difference between net disposal proceeds, if any, and its carrying amount is recognised in profit or loss.

Expenditure incurred to replace a component of an item of property, plant and equipment that is recognised separately, including major inspection and overhaul expenditure, is capitalised. Other subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the item of property, plant and equipment. All other expenditure is recognised in profit or loss as an expense as incurred.

4.13 Investments in subsidiaries and associates

Investments in subsidiaries and associates are measured at cost less accumulated impairment losses.

On loss of control of a subsidiary or significant influence of an associate, the difference between the fair value of considerations received, if any, and its carrying amount is recognised as gain or loss on derecognition in profit or loss.

4.14 Investment properties

Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, investment properties are measured at fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the period which they arise.

Investment property is derecognised when either it has been disposed of or when investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the disposal or retirement of an investment property is recognised in profit or loss in the period of disposal or retirement.




4.14 Investment properties (continued)

Transfer is made to investment property when, and only when, there is a change in use, evidenced by ending of owner-occupation, commencement of an operating lease to another party or ending of construction or development. Transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale.

For a transfer from investment property to owner-occupied property or inventories, the deemed cost of property for subsequent accounting is its fair value at the date of change in use. If the property occupied by the Group and by the Company as an owner-occupied property becomes an investment property, the Group and the Company account for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use. For a transfer from inventories to investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in profit or loss. When the Group and the Company complete the construction or development of a self-constructed investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in profit or loss.

4.15 Goodwill

Goodwill is measured at cost less accumulated impairment losses.

Goodwill arising from a business combination represents the excess of (a) over (b):-

(a) the sum of:

• the fair value of consideration transferred; • the amount of non-controlling interests in the acquiree (if any); and • the fair value of the Group’s previously held equity interest in the acquiree

(b) the Group’s share of the fair value of the identifiable net assets acquired at the acquisition date.

Goodwill is allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination, for the purposes of impairment testing.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

4.16 Exploration cost

Exploration cost is recognised as an expense as incurred. When a decision is taken that a quarry property is economically feasible and should be developed for commercial production, all further directly attributable exploration cost is recognised as tangible assets to the extent that such expenditure is expected to generate future economic benefits. Exploration cost is derecognised to profit or loss when it is determined that:

• further exploration activities will yield no commercial quantities of reserves, or• no further exploration drilling is planned; or• the right to explore in the specific area has expired or is surrendered.

Capitalised exploration cost is measured at cost less accumulated impairment losses.




4.17 Property development activities

Property development revenue

The Group recognises property development revenue using the percentage of completion method, determined primarily by reference to the proportion of property development costs incurred for work performed to date bear to the total estimated property development costs and surveys of work performed. Where property development outcome is unable to be reliably determined, property development revenue is recognised only to the extent of the recoverable costs. Revenue recognition commences when legal binding sale and purchase agreement is signed on property unit.

Additional revenue due to variation in development work is recognised if it is probable that the customer will approve the variation and the amount can be reliably measured.

Land held for property development

Land held for property development is measured at cost less accumulated impairment losses. Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

Such asset is transferred to property development costs when development activities have commenced and when it can be demonstrated that the development activities can be completed within the normal operating cycle.

Property development costs

Property development costs are measured at lower of cost and net realisable value. Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities including borrowing costs.

Property development costs on property units sold are recognised as expenses in the period in which they are incurred to match the attributable revenue recognised. If estimates of costs to complete property development (including costs to be incurred over the defects liability period) indicate losses, the expected losses are recognised as expenses fully in profit or loss.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion inclusive of expected loss and selling expenses.

Property development costs expected to be incurred on property development are based on estimates of total property development costs at completion. These estimates are reviewed and revised periodically throughout the lives of the property development and adjustments to costs resulting from such revisions are recognised in the accounting period in which the revisions are made.

Accrued and progress billings

The excess of revenue recognised in profit or loss over the billings to purchasers is presented as an asset and classified as accrued billings.

The excess of billings to purchasers over revenue recognised in profit or loss is presented as a liability and classified as progress billings.

Completed property units

Completed property units that remain unsold are transferred to inventories.

The accounting policy in respect of inventories are set out in Note 4.19.




4.17 Property development activities (continued)

Transfer of land

Where a land classified as property, plant and equipment is measured at valuation, such land is transferred to land held for property development and/or property development costs at its carrying amount as surrogate cost.

4.18 Construction contracts

Contract revenue

The Group recognises contract revenue using the percentage of completion method, determined primarily by reference to surveys of work performed.

A prudent estimate of the profit attributable to work performed is recognised once the outcome of the contract work can be assessed with reasonably certainty. Where contract work outcome is unable to be reliably determined, revenue is recognised to the extent of the recoverable costs and no profit is recognised. In all cases, expected losses are recognised as expenses fully in profit or loss.

Profits expected to be realised on contract work are based on estimates of total revenues and cost at completion. These estimates are reviewed and revised periodically throughout the lives of the contract works and adjustments to profits resulting from such revisions are recognised in the accounting period in which the revisions are made.

Claim for additional contract revenue is recognised if it is probable that the claim will result in additional revenue and the amount can be reliably estimated.

Amount due from/to contract customers

Construction contracts measured at costs plus attributable profits less expected losses and progress billings are presented as an asset and classified as amount due from contract customers.

The excess of progress billings over costs plus attributable profits less expected losses is presented as a liability and classified as amount due to contract customers.

Costs consist of direct materials, direct labour, direct overhead, sub-contract charges and attributable expenses.

4.19 Inventories

Inventories are measured at the lower of cost and net realisable value. Cost is determined on the following bases:-

Category Basis

Completed property units Specific identification and/or relative sale valueBuilding materials, raw materials, FIFO (first-in-first-out) goods for resale and spare parts Work in progress and finished goods Weighted average

Cost of completed property units comprises direct cost of construction and proportionate land and development costs.




4.19 Inventories (continued)

Cost comprises materials, direct labour cost and an appropriate proportion of production overheads.

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

4.20 Financial instruments

Financial instruments are any contracts that give rise to both:-

• a financial asset of one entity; and• a financial liability or equity instrument of another entity

Financial instruments are offset when the Group and the Company have:-

• a legally enforceable right to set off the recognised amounts; and• an intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously

(i) Financial assets

The Group and the Company classify their financial assets at initial recognition into four categories, based on the nature and purpose of the financial assets:-

• Financial assets at fair value through profit or loss • Available-for-sale financial assets • Held-to-maturity investments • Loans and receivables

At the reporting date, the Group and the Company have only financial assets categorised as the following:-

Category Nature and purpose

(a) Available-for-sale Financial assets that are either: financial assets • designated as available-for-sale upon initial recognition; or • precluded from classifying into any of the other three categories.

Available-for-sale financial assets include equity and debt securities.

(b) Loans and receivables Financial assets with fixed or determinable payments that are unquoted in an active market.

Initial recognition and measurement

Financial assets are recognised when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value plus transactions costs.




4.20 Financial instruments (continued)

(i) Financial assets (continued)

Subsequent recognition and measurement

Category Recognition and measurement principle

(a) Available-for-sale These financial assets are subsequently measured at fair value. financial assets

Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except the following which are recognised in profit or loss:

• impairment losses;• foreign exchange gains and losses on debt instruments;• gains and losses of hedged items attributable to hedge risks of fair value hedges;• interest calculated for a debt instrument using the effective interest method.

The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised.

Investment in equity instruments that have no quoted market price in an active market and whose fair value are unable to be reliably determined are measured at cost less accumulated impairment losses.

(b) Loans and These financial assets are measured at amortised cost using receivables effective interest method, less impairment.

Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Derecognition

A financial asset is derecognised when, and only when:-

• the contractual rights to the cash flows from the financial asset expire; or• the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset.

On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in the profit or loss.




4.20 Financial instruments (continued)

(ii) Financial liabilities

The Group and the Company classify their financial liabilities at initial recognition into two categories, based on the nature and purpose for which they are issued:-

• Financial liabilities at fair value through profit or loss • Financial liabilities at amortised cost

At the reporting date, the Group and the Company have only financial liabilities categorised as financial liabilities at amortised cost.

Financial liabilities at amortised cost

Accounting principle Methodology

Classification These are financial liabilities other than those classified into financial liabilities at fair value through profit or loss.

Financial liabilities at amortised cost include amounts due to subsidiaries, amounts due to Directors, trade payables, other payables, finance lease liabilities and club establishment fund.

Initial recognition and Financial liabilities at amortised cost are recognised when, and Measurement only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial liabilities at amortised cost are recognised initially, they are measured at fair value plus transactions costs.

Subsequent recognition Financial liabilities at amortised cost are subsequently and measurement measured at amortised cost using the effective interest method.

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

Derecognition A financial liability is derecognised when, and only when, the obligation specified in the contract is discharged, cancelled or expires.

On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

(iii) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

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




4.21 Financial guarantee contracts

The Group and the Company have issued corporate guarantee to banks for borrowings of its subsidiaries. These guarantees are financial guarantees as they require the Group and the Company to reimburse the banks if the subsidiaries fail to make principal or interest payments when due in accordance with the terms of their borrowings.

Financial guarantees are initially measured at their fair values plus transaction costs in the statements of financial position. Subsequent to initial measurement, financial guarantees are amortised to profit or loss over the period of the subsidiaries’ borrowings, unless it is probable that the Group and the Company will reimburse the bank for an amount higher than the unamortised amount. In this case, an estimate of the obligation is made and recognised as a provision in the statements of financial position.

4.22 Leases

(i) Finance leases

Leases in which the Group and the Company assume substantially all the risks and rewards of ownership are classified as finance leases. An item of property, plant and equipment leased by way of finance lease is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments at the inception of the lease.

In calculating the present value of the minimum lease payments, the discount rate is the interest rate implicit in the lease, if this is practicable to determine; otherwise, the incremental borrowing rate of the Group and the Company is used.

(ii) Operating leases

(a) The Group as lessor

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

(b) The Group as lessee

Leases of the assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are recognised in profit or loss over the lease period.

(c) Prepaid lease payments

Leasehold land that has an indefinite economic life and title that is unexpected to be passed to the Group by the end of the lease period is classified as operating lease. The up-front payments for right to use the leasehold land over a predetermined period are accounted for as prepaid lease payments and are measured at cost less accumulated amortisation.

The up-front payments are recognised as expenses in profit or loss to match the inflow of benefits accrued.




4.23 Provisions

Provisions are recognised in the statements of financial position when the Group and the Company have a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount can be made.

4.24 Cash and cash equivalents

Cash and cash equivalents consist of bank balances, deposits repayable on demand and highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value, against which the bank overdrafts are deducted.

5. REVENUE Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Property development 188,958 214,794 - - Sales of goods 2,411 3,486 - - Services rendered 9,895 10,083 - - Dividend income - - 46,500 51,047Others 1,895 3,573 24 32

203,159 231,936 46,524 51,079

Revenue of the Group represents sales of goods and services derived from the principal activities, net of discounts, allowances, sales and government taxes.

Revenue of the Company represents dividend and interest income.



6. PROFIT BEFORE TAXATION

This is arrived at:- Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

After charging all expenses including: Directors’ fee 180 150 180 150Auditors’ remuneration:- Audit fees: • current year 134 119 20 20 • adjustments for prior years (8) - (5) - Other professional fees 55 87 - 5Staff costs: Directors’ emoluments:

• salaries and bonus - 708 - - • defined contribution plans - 49 - - • others 24 92 24 24

24 849 24 24

Other employees’ emoluments and benefits:

• salaries and bonus 9,686 11,497 - - • defined contribution plans 987 1,177 - - • others 1,469 1,313 - -

12,142 13,987 - -

Rent of land and buildings 159 107 - - Finance lease interest 52 54 - - Depreciation of property, plant and equipment 5,754 7,994 - - Amortisation of prepaid lease payments 10 11 - - Derecognition of subsidiaries - 102 - 69Allowance for impairment on receivables 18 16 - - Property development expenses: • property development costs 88,209 125,893 - - • adjustment for prior year 36 (1,749) - -

88,245 124,144 - - Direct operating expenses of investment properties which generated rental income 856 853 - - Direct operating expenses of investment properties which generated no rental income - 3 - - Derecognition of property, plant and equipment 1 - - -



6. PROFIT BEFORE TAXATION (CONTINUED) Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

And crediting all income including: Gross dividends from subsidiaries - - 46,500 51,047 Rent of land and buildings from investment properties 1,628 3,081 - - Rental income: • others 122 - - - Interest income:

• islamic financial instruments 4,714 2,285 - - • cash and deposits with licensed banks 5,074 6,841 24 32 • others 114 1,705 - -

9,902 10,831 24 32Gain on disposal of property, plant and equipment 24 99 - - Gain on disposal of investment properties - 60 - - Gain on disposal of investments - 385 - - Reversal of allowance for impairment on receivables 5 7 - - Derecognition of allowance for impairment on receivables 52 - - -

7. TAXATION Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Malaysian: Current tax expense/(income):

• current year 17,613 15,480 5 7 • adjustment for previous year 2,558 (2,378) (1) -

20,171 13,102 4 7 Deferred tax expense/(income): Origination and reversal of temporary differences:

• current year (199) 881 - - • adjustment for previous year (36) 2,278 - -

(235) 3,159 - -

19,936 16,261 4 7



7. TAXATION (CONTINUED)

The tax reconciliation is as follows:- Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Taxation based on Malaysian application statutory tax rate of 24% 24,657 23,097 11,067 12,136Disallowable expenses for tax purposes: • loss from associate - 445 - - • others 836 502 98 122 Non-taxable income for tax purposes: • profit from associate (187) - - - • tax-exempt dividend - - (11,160) (12,251)• others (7,208) (7,504) - - Taxes for previous year 2,522 (100) (1) - Effects of reduction in tax rates (*) (575) - - - Effects of differential real property gains tax rate - (39) - - Benefit from previously unrecognised deferred tax assets (125) (230) - - Others 16 90 - -

Taxation recognised in profit or loss 19,936 16,261 4 7

(*) In October 2016, the Government of Malaysia announced the reduction of income tax rate based on the percentage of increase in chargeable income.

Benefit from previously unrecognised deferred tax assets is used to reduce tax expenses as follows:-

Group 2017 2016 RM’000 RM’000

Current tax expense: • unabsorbed capital allowances - 113• unutilised tax losses 125 - Deferred tax expense: • unutilised tax losses - 117

125 230



8. EARNINGS PER SHARE

The calculation of basic earnings per share of the Group is based on the net profit attributable to ordinary shareholders amounting to approximately RM82,294,000/- (2016: RM79,668,000/-) and the number of ordinary shares outstanding during the financial year of 242,124,000 (2016: 242,124,000).

Diluted earnings per shareFully diluted earnings per share is the same as basic earnings per share as it is considered that there are no dilutive potential ordinary shares.

9. PROPERTY, PLANT AND EQUIPMENT

Freehold Long Furniture, land & leasehold Plant & Motor fittings & Group buildings land machinery vehicles equipment Total 2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost/valuation: At 1 April 2016 191,033 - 76,183 7,550 5,994 280,760 Additions 522 625 1,529 - 384 3,060 Disposals - - (95) - - (95) Derecognition - - (2,217) - (276) (2,493) Transfer from land held for property development - 1,431 - - - 1,431

At 31 March 2017 191,555 2,056 75,400 7,550 6,102 282,663

Accumulated depreciation: At 1 April 2016 1,200 - 39,295 6,454 3,934 50,883 Charge for the year 350 11 4,486 449 458 5,754 Disposals - - (95) - - (95) Derecognition - - (2,217) - (275) (2,492)

At 31 March 2017 1,550 11 41,469 6,903 4,117 54,050

Accumulated impairment losses: At 1 April 2016 - - 14,142 - - 14,142 Charge for the year - - - - - -

At 31 March 2017 - - 14,142 - - 14,142

Carrying amount: At 31 March 2017 190,005 2,045 19,789 647 1,985 214,471



9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Freehold Long Furniture, land & leasehold Plant & Motor fittings & Group buildings land machinery vehicles equipment Total 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost/valuation: At 1 April 2015 190,558 - 75,675 7,747 5,301 279,281 Additions 475 - 597 186 710 1,968 Disposals - - - (383) - (383) Derecognition - - (89) - (17) (106)

At 31 March 2016 191,033 - 76,183 7,550 5,994 280,760

Accumulated depreciation: At 1 April 2015 1,000 - 32,541 6,302 3,535 43,378 Charge for the year 200 - 6,843 535 416 7,994 Disposals - - - (383) - (383) Derecognition - - (89) - (17) (106)

At 31 March 2016 1,200 - 39,295 6,454 3,934 50,883

Accumulated impairment losses: At 1 April 2015 - - 14,142 - - 14,142 Charge for the year - - - - - -

At 31 March 2016 - - 14,142 - - 14,142

Carrying amount: At 31 March 2016 189,833 - 22,746 1,096 2,060 215,735




Analysis of valuation of land & buildings:

Group 2017 2016 RM’000 RM’000

At cost: • freehold land and buildings 997 475 • long leasehold land 2,056 -

3,053 475 At 2015 valuation: • freehold land and buildings 190,558 190,558

193,611 191,033

Fair value measurement of freehold land and buildings

The fair values of the freehold land and buildings of the Group at the reporting date analysed by the various levels within the fair value hierarchy are as follows:

Group 2017 2016 RM’000 RM’000

Fair value hierarchy: Level 1 - - Level 2 - - Level 3 190,558 190,558

190,558 190,558

Level 3 fair value

The Group’s freehold land and buildings are revalued by Directors on 31 March 2015 based on the valuation performed by an external independent professional valuer.

Estimation uncertainty and key assumptions

The following key assumptions are made by the Directors in arriving at the fair values of the Group’s freehold land and buildings:-

• comparison of the Group’s freehold land and buildings with similar properties that were listed for sale within the same locality or other comparable localities;

• consideration of the viability for future development; and• reference to the relevant property valuers and real estate agents on market conditions and

changing market trends.




Level 3 fair value is determined using unobservable inputs for the land and buildings, i.e. price per square foot.

Significant changes in the estimated market value per square foot in isolation, would result in a significant higher/(lower) fair value of the properties.

The reconciliation for level 3 of the fair value hierarchy is as follows:-

Group 2017 2016 RM’000 RM’000

At 1 April and 31 March 190,558 190,558

Policy on transfer between levels

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

There is no transfer of amount into or out of Level 3 fair value for both years under review.

If the freehold land and buildings had been carried under the cost model, they would have been recognised at the following amounts:-

Group 2017 2016 RM’000 RM’000

Freehold land and buildings: At cost 25,695 25,174 Accumulated depreciation 3,591 3,425

Carrying amount 22,104 21,749

The carrying amounts of assets leased under finance lease arrangements are as follows:-

Group 2017 2016 RM’000 RM’000

Plant and machinery 1,493 462 Motor vehicles 597 1,024

2,090 1,486



10. PREPAID LEASE PAYMENTS

Leasehold land

Group 2017 2016 RM’000 RM’000

Carrying amount: At 1 April 705 716 Amortisation for the year (10) (11)

At 31 March 695 705

Analysed between: Current 10 10 Non-current 685 695

At 31 March 695 705

11. INVESTMENT IN SUBSIDIARIES

Unquoted shares

Company 2017 2016 RM’000 RM’000

At cost: At 1 April 446,631 450,900 Derecognition - (4,269)

At 31 March 446,631 446,631

Accumulated impairment losses: At 1 April and 31 March 24,607 24,607

Carrying amount: At 31 March 422,024 422,024



11. INVESTMENT IN SUBSIDIARIES (CONTINUED)

Details of the subsidiaries, all of which are incorporated in Malaysia, are as follows:-

Issued Effective Name of company equity capital holding Principal activities RM 2017 2016 % %

§ Sin Heap Lee Development 90,000,000 100 100 Property development Sdn. Bhd.

§ Sin Heap Lee Construction 90,000,000 100 100 Building construction Sdn. Bhd. works, earthworks and infrastructure works, renting out of plant and machineries, construction management services and money lending business

§ Integrated Management 1,000,000 100 100 Provision of professional Corporation Sdn. Bhd. management services in commercial and industrial studies and planning, construction management and financial services

§ Sin Heap Lee Company 3,900,000 100 100 Rental of properties, Sdn. Berhad marketing agent of bricks and building materials

§ Sin Heap Lee Brickworks 30,000,000 100 100 Manufacturing of clay- Sdn. Bhd. bricks, supply of finished brickworks of wall and other brick structures

SHL Realty Sdn. Bhd. 3,000,000 100 100 Property investment

SHL Corporate Services 3,000,000 100 100 Providing strategic, Sdn. Bhd. financial and corporate planning services

Goodstock (Tawau) 2,000,002 100 100 Property development Sdn. Bhd.

Wilayah Builders Sdn. Bhd. 9,000,000 100 100 Property development Ho Sin & Son Enterprise 1,000,000 100 100 Property development Sdn. Bhd.

Mayang Kiara Sdn. Bhd. 50,000 100 100 Property development

Sukma Pesona Sdn. Bhd. 500,000 100 100 Property development




Issued Effective Name of company equity capital holding Principal activities RM 2017 2016 % %

Kajang Granite Quarry 5,000,000 100 100 Granite quarrying and Sdn. Bhd. manufacturing of aggregates

Senick Sdn. Bhd. 5 100 100 Granite quarrying and manufacturing of aggregates

Goodstock Land Sdn. Bhd. 1,500,000 60 60 Letting of properties

Subsidiary of Sin Heap Lee Development Sdn. Bhd.

SHL-M Sdn. Bhd. 45,000,000 100 100 Property development

Subsidiary of SHL-M Sdn. Bhd.

* Sungai Long Golf Resort 5,000,000 100 100 Golf resort operator Berhad

Notes:

§ Subsidiaries which are consolidated using merger method of accounting. * A wholly-owned subsidiary of SHL-M Sdn. Bhd.

Non-controlling interests in subsidiary

The Group’s subsidiary that has material non-controlling interests (‘NCI’) is as follows:-

* Name of subsidiary : Goodstock Land Sdn. Bhd.* NCI percentage of ownership interest and : 40% (2016: 40%) voting interest




Group 2017 2016 RM’000 RM’000

Carrying amount of NCI 18,610 18,102

Profits allocated to NCI 508 307

Dividends paid to NCI - (2,000)

Summarised financial information before intra-group elimination:

Group 2017 2016 RM’000 RM’000

Non-current assets 45,709 45,727 Current assets 4,604 8,288 Non-current liabilities (3,512) (3,512)Current liabilities (277) (5,247)

Net assets 46,524 45,256

Revenue 2,496 2,681 Profit for the year 1,268 769 Total comprehensive income for the year 1,268 769

Cash flows from operating activities (3,679) 5,681 Cash flows from investing activities 139 289 Cash flows from financing activities - (5,000)

12. INVESTMENT IN ASSOCIATE

Group 2017 2016 RM’000 RM’000

Unquoted shares, at cost 1,305 1,305 Share of post-acquisition profits 14,132 13,352

15,437 14,657

Share of net assets 15,437 14,657

There is no goodwill in the associate’s own financial statements and on the acquisition of the Group’s interest in the associate.



12. INVESTMENT IN ASSOCIATE (CONTINUED)

Details of associate are as follows:-

Name of company Effective holding Principal activities (Incorporated in Malaysia) 2017 2016 % %

Opt Ventures Sdn. Bhd. 30 30 Property development

Financial information of associate

The summarised financial information represents the amounts reported in the financial statements of associate:-

(i) Summarised statement of comprehensive income

OPT Ventures Sdn. Bhd. 2017 2016 RM’000 RM’000

Revenue 4,550 2,465 Profit/(loss) for the year 2,601 (6,180)Other comprehensive income, net of tax - - Total comprehensive income/(expense) 2,601 (6,180)Dividend paid - (27,625)

(ii) Summarised statement of financial position


Current assets 47,818 52,709 Non-current assets 24,670 25,398

72,488 78,107

Current liabilities (19,748) (27,968)Non-current liabilities (1,283) (1,284)

(21,031) (29,252)

Net assets 51,457 48,855



12. INVESTMENT IN ASSOCIATE (CONTINUED)

Financial information of associate (continued)

(iii) Reconciliation of the summarised financial information presented above to the carrying amounts of the Group’s interest in associate


Net assets at 1 April 48,856 82,661 Profit/(loss) for the year 2,601 (6,180)Other comprehensive income - - Dividend paid - (27,625)

Net assets at 31 March 51,457 48,856 Interest in associate as at year end 30% 30% Carrying amount of Group’s interest in associate 15,437 14,657

13. INVESTMENT PROPERTIES

Group 2017 2016 RM’000 RM’000

At 1 April 69,880 70,400 Disposal - (520)

At 31 March 69,880 69,880

Fair value measurement

The fair values of investment properties are determined by the Directors (2016: Directors) based on the sales comparable approach that reflects the recent transaction prices for the similar properties which have been sold or are being offered for sale.

The fair value measurement of investment properties are classified as level 3 in the fair value hierarchy.

Level 3 fair value of investment properties have been generally derived using the sales comparison approach. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property type, size, location, tenure, title restrictions and other relevant characteristics.

Significant increase/(decrease) in estimated market value per square foot in isolation, would result in a significant higher/(lower) fair value of properties.

There have been no transfer between levels during the financial year in the fair value hierarchy.

In estimating the fair value of the properties, the highest and best use of the properties is different from their current use as these properties are held for long-term investment purposes.



14. LAND HELD FOR PROPERTY DEVELOPMENT

Land DevelopmentGroup costs costs Total 2017 RM’000 RM’000 RM’000

At cost: At 1 April 2016 3,807 224 4,031 Additions 4 136 140 Transfer to property, plant and equipment (1,431) - (1,431)

At 31 March 2017 2,380 360 2,740

2016 At cost: At 1 April 2015 3,803 106 3,909 Additions 4 118 122

At 31 March 2016 3,807 224 4,031

15. INVESTMENTS

Group 2017 2016 RM’000 RM’000

Unquoted in Malaysia, at cost: • club membership 24 24

16. DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets and liabilities recognised in the statement of financial position after appropriate offsetting are as follows:-

Group 2017 2016 RM’000 RM’000

Deferred tax assets (1,611) (1,868)Deferred tax liabilities 21,983 22,656

20,372 20,788

The deferred tax assets and liabilities are offset as:- • the Group has a legally enforceable right to set off current tax assets against current tax liabilities;

and

• they relate to taxes levied by the same authority on the Group.



16. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)

Deferred tax assets of the Group are recognised when the realisation of the related tax benefits through the future taxable profits is probable based on recent history of results of the Group.

The movements and components of deferred tax assets and liabilities before appropriate offsetting are as follows:-

Revaluation Property, surplus on Unabsorbed Property plant and land and Unutilised capital Reinvestment Investment developmentGroup equipment buildings tax losses allowances allowances properties costs Total2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 April 2016 8,612 10,342 - - (1,102) 3,771 (835) 20,788 Amount recognised in: • profit or loss (928) (25) - - 718 - - (235)• other comprehensive income - (181) - - - - - (181)

At 31 March 2017 7,684 10,136 - - (384) 3,771 (835) 20,372

Group2016At 1 April 2015 10,000 10,582 (151) (44) (3,000) 3,639 (3,181) 17,845Amount recognised in: • profit or loss (1,317) (95) 151 44 1,898 132 2,346 3,159• other comprehensive income (71) (145) - - - - - (216)

At 31 March 2016 8,612 10,342 - - (1,102) 3,771 (835) 20,788

Unrecognised deductible temporary differences

The amounts of deductible temporary differences for which no deferred tax assets have been recognised in the statement of financial position are as follows:-

Group 2017 2016 RM’000 RM’000

Unabsorbed capital allowances 3,117 3,117 Unutilised tax losses 2,880 3,350

5,997 6,467

The above deductible temporary differences have no expiry date. No deferred tax assets have been recognised in respect of these deductible temporary differences because it is improbable that future profit will be available against which the Group can utilise the benefits therefrom.



17. TRADE RECEIVABLES

Group 2017 2016 RM’000 RM’000

Non-current: Interest-bearing advances 2,322 2,346 Current:

Amount due from contract customer 260 - Interest-bearing advances 774 813Others 78,775 34,604

79,809 35,417Less: Allowance for impairment (97) (136)

79,712 35,281

82,034 37,627

Trade receivables are non-interest-bearing and generally on 14 to 90-day (2016: 14 to 90-day) terms. The contractual terms of interest-bearing advances are as follows:-

Interest-bearing advances 1

Group 2017 2016

Principal amount RM50,000 RM50,000 Interest rate 4.00% per annum 4.00% per annum Repayment terms Monthly instalments Monthly instalments of RM921/- each of RM921/- each for 60 months for 60 months

Interest-bearing advances 2 Group 2017 2016

Principal amount RM75,000 RM75,000 Interest rate 4.00% per annum 4.00% per annum Repayment terms Monthly instalments Monthly instalments of RM1,381/- each of RM1,381/- each for 60 months for 60 months

Interest-bearing advances 3 Group 2017 2016

Principal amount RM3,000,000 RM3,000,000 Interest rate 5.00% per annum 5.00% per annum Repayment terms 8 quarterly principal 8 quarterly principal repayments ** repayments **



17. TRADE RECEIVABLES (CONTINUED)

Interest-bearing advances 3 (continued)

Group 2017 2016 ** PAYABLE ON RM’000 RM’000

14 August 2016 - 25014 November 2016 - 25014 February 2017 - 25014 May 2017 - 25014 August 2017 250 50014 November 2017 250 50014 February 2018 250 50014 May 2018 250 50014 August 2018 500 -14 November 2018 500 -14 February 2019 500 -14 May 2019 500 -

Interest is charged and payable on monthly basis.

The following tabulation shows the elements included in amount due from contract customer:

Group 2017 2016 RM’000 RM’000

Cost incurred 260 - Attributable profits less losses - -

260 - Less: Progress billings - -

Amount due from/(to) contract customer 260 -

Analysed as:- Amount due from contract customer 260 -

Ageing analysis of trade receivablesThe ageing analysis of trade receivables is as follows:-

Group 2017 2016 RM’000 RM’000

Neither past due nor impaired 70,167 25,422Past due unimpaired • 1 to 30 days past due 7,793 203 • over 30 days past due 3,814 12,002

11,607 12,205Impaired 97 136

81,871 37,763



17. TRADE RECEIVABLES (CONTINUED)

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

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

Receivables that are past due unimpaired

Trade receivables that are past due unimpaired relate to customers that have good track record with the Group. Based on past experiences and no adverse information to date, the Directors of the Group are of the opinion that no allowance for impairment is necessary in respect of these balances as there has been no significant change in the credit quality and the balances are still considered fully collectible.

Receivables that are impaired

These receivables are impaired individually at the reporting date. The movements of the allowance accounts used to record the impairment are as follows:-

Group 2017 2016 RM’000 RM’000

Movements in allowance accounts: At 1 April 136 127 Charge for the year 18 16 Derecognition (52) - Reversal (5) (7)

At 31 March 97 136

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that:

• are in significant financial difficulties and; • have defaulted on payments.

These receivables are unsecured by any collateral or credit enhancements.

18. AMOUNTS DUE FROM/(TO) SUBSIDIARIES AND DIRECTORS

The unsecured outstanding amounts are non-interest-bearing and repayable on demand.



19. PROPERTY DEVELOPMENT COSTS

Land Development Group costs costs Total 2017 RM’000 RM’000 RM’000

At cost: At 1 April 2016 57,027 565,147 622,174Additions 3,666 92,411 96,077

At 31 March 2017 60,693 657,558 718,251

Cost recognised in profit or loss: At 1 April 2016 14,216 423,865 438,081Charge for the year 3,253 84,956 88,209

At 31 March 2017 17,469 508,821 526,290

Carrying amount: At 31 March 2017 43,224 148,737 191,961

Group 2016

At cost: At 1 April 2015 57,027 468,367 525,394Additions - 96,780 96,780

At 31 March 2016 57,027 565,147 622,174

Cost recognised in profit or loss: At 1 April 2015 8,240 303,948 312,188Charge for the year 5,371 120,522 125,893Transfer 605 (605) -

At 31 March 2016 14,216 423,865 438,081

Carrying amount: At 31 March 2016 42,811 141,282 184,093

Included in the property development costs are:

Group 2017 2016 RM’000 RM’000

Staff costs capitalised: Directors’ emoluments:

• salary, allowance and bonus 2,146 1,470• defined contribution plans 146 96 • others 14 7 2,306 1,573 Other employees’ emoluments and benefits:

• salary, allowance and bonus 1,054 666 • defined contribution plans 97 61 • others 63 24

1,214 751

3,520 2,324



20. INVENTORIES

Group 2017 2016 RM’000 RM’000

At cost: Completed property units 9,006 9,006Building materials 957 1,218Raw materials 116 102Goods for resale 194 164Work in progress 106 214Finished goods 4,831 5,560Spare parts - 384

15,210 16,648

21. OTHER RECEIVABLES Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Advances 76 76 - - Deposits 5,432 6,536 - - Other debtors 1,494 1,834 - - 7,002 8,446 - - Prepayments 1,182 958 - 15

8,184 9,404 - 15

The unsecured advances are non-interest-bearing and repayable on demand.

22. CASH AND DEPOSITS Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Deposits with: • licensed banks 122,568 139,105 510 878 • other financial institutions under Islamic principles 149,995 100,013 - -

272,563 239,118 510 878

Cash and bank balances:

• housing development accounts 5,153 63,024 - - • others 12,704 3,668 130 55

17,857 66,692 130 55

290,420 305,810 640 933



22. CASH AND DEPOSITS (CONTINUED)

Deposits with financial institution under Islamic principles are placements made in management funds that invest in Islamic deposits and other Shariah-compliant investment instruments permitted by the Shariah Advisory Council of the Securities Commission Malaysia and/or Shariah Adviser. Short-term fund aims to provide a higher level of liquidity while providing better return from non-taxable income by predominantly investing its assets in Sukuk and short-term Islamic Money Market Instruments. The income is calculated daily and distributed at month end.

Housing Development Accounts are held and maintained pursuant to Section 7A of the Housing Development Act, 1966. These accounts are restricted from use in other operations.

23. SHARE CAPITAL

Number of ordinary shares Amount Amount 2017 2016 2017 2016 ‘000 ‘000 RM’000 RM’000

Authorised - 1,000,000 - 1,000,000

Issued and fully paid 242,124 242,124 242,124 242,124

The Companies Act 2016, which came into operation on 31 January 2017, abolished the concept of:-

• authorised share capital; and• par value of share capital• share premium and merger reserve accounts (Note 24)

The ordinary shares of RM1/- each have no par value upon enactment of the Companies Act 2016.

24. RESERVES Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Non-distributable: Share premium 1,225 1,225 1,225 1,225Revaluation surplus 96,330 96,871 - - Merger reserve - - 4,377 4,377Capital reserves 11,040 11,040 23,361 23,361Merger deficit (130,464) (130,464) - -

(21,869) (21,328) 28,963 28,963

Distributable: Retained profits 529,975 492,963 163,017 162,912

508,106 471,635 191,980 191,875

24.1 Share premium

Share premium represents premium on shares issued by the Company.



24. RESERVES (CONTINUED)

24.2 Revaluation surplus

Revaluation surplus represents the surpluses arising from the revaluation of land and buildings of the subsidiaries net of related tax effects, if any.

24.3 Merger reserve

The premium on the shares issued by the Company was credited to merger reserve. On consolidation, the merger reserve is dealt with as merger adjustment by elimination.

24.4 Capital reserves

Capital reserves of the Company represent gains arising from the disposal of investments in subsidiaries on Group restructuring.

Capital reserve of the Group represents share premium of the subsidiaries and reserve capitalised by a subsidiary for bonus issue of shares.

24.5 Merger deficit

Merger deficit represents the difference between the nominal value of shares issued by SHL Consolidated Bhd. to effect the merger and the nominal value of the shares acquired from the merged entities and is arrived at as follows:-

RM’000

Nominal value of 176,263,799 ordinary shares of RM1/- each issued by SHL Consolidated Bhd. 176,264Nominal value of 45,800,000 ordinary shares of RM1/- each acquired (45,800)

Merger deficit 130,464

24.6 Utilisation of credit standing in the share premium and merger reserve accounts

The amount standing in the share premium and merger reserve accounts will be:

(a) recognised as part of the Company’s share capital pursuant to the transitional provision set out in Section 618(2) of the Companies Act 2016 (the Act); or

(b) utilised for the purposes as set out in Section 618(3) of the Act, within 24 months from the commencement of the Act.

As at 31 March 2017, no adjustment is made to the share premium and merger reserve accounts as the Company has yet to decide on the transitional treatments.



25. FINANCE LEASE LIABILITIES

Group 2017 2016 RM’000 RM’000

Minimum lease payments: • 1 year or less 551 416 • 5 years or less but over 1 year 630 599

1,181 1,015 Future finance charge on finance leases (72) (69)

Present value of finance lease liabilities 1,109 946

Present value of finance lease liabilities: • 1 year or less 505 377• 5 years or less but over 1 year 604 569

1,109 946

The repayment periods of the finance lease liabilities range from 3 to 5 years (2016: 3 to 5 years) at the inception of the leases. Interest is levied at rates ranging from 4.18% to 6.83% (2016: 4.18% to 6.83%) per annum. The finance lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default.

26. CLUB ESTABLISHMENT FUND

Club establishment fund represents refundable deposits due to the members of the golf resort.

27. TRADE PAYABLES

Group 2017 2016 RM’000 RM’000

Trade payables 23,505 31,357Progress billings 59,000 58,659

82,505 90,016

Trade payables are non-interest-bearing and are normally on 30 to 75-day (2016: 30 to 75-day) terms.

28. Other payables Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Accrued expenses 1,933 3,712 23 22 Others 6,938 8,515 3 17

8,871 12,227 26 39



29. DIVIDENDS

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

Paid: In respect of financial year ended 31 March 2017: • First interim single-tier dividend of 6 Sen per share 14,528 - 14,528 - In respect of financial year ended 31 March 2016: • First interim single-tier dividend of 7 Sen per share - 16,949 - 16,949 • Second interim single-tier dividend of 7 Sen per share 16,949 - 16,949 - • Final single-tier dividend of 6 Sen per share 14,527 - 14,527 - In respect of financial year ended 31 March 2015: • Second interim single-tier dividend of 10 Sen per share - 24,212 - 24,212 • Final single-tier dividend of 8 Sen per share - 19,370 - 19,370

46,004 60,531 46,004 60,531

Declared: In respect of financial year ended 31 March 2017/2016: • Second interim single-tier dividend of 6 Sen (2016: 7 Sen) per share 14,528 16,949 14,528 16,949

Proposed: In respect of financial year ended 31 March 2017: • Final single-tier dividend of 6 Sen per share 14,528 - 14,528 -

In respect of financial year ended 31 March 2016: • Final single-tier dividend of 6 Sen per share - 14,527 - 14,527

No recognition is made on the dividend proposed until it has been approved at the Annual General Meeting. The amount will be recognised as an appropriation of retained profits in the year in which it is approved.



30. ANALYSIS OF PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

Group 2017 2016 RM’000 RM’000

Cash payment 2,440 1,221Finance lease arrangement 620 747

3,060 1,968

31. CAPITAL MANAGEMENT

The primary objective of the management of the Group and the Company’s capital structure is to maintain an efficient mix of debt and equity in order to achieve a low cost of capital, while taking into account the desirability of retaining financial flexibility to pursue business opportunities and adequate access to liquidity to mitigate the effect of unforeseen events on cash flows.

The Directors regularly review the Group and the Company’s capital structure and make adjustments to reflect economic conditions, business strategies and future commitments.

The Group and the Company monitor capital using a gearing ratio, which is total debt divided by total capital.

The Group and the Company are in no breach of any gearing covenants during the financial years ended 31 March 2017 and 31 March 2016. In the same period, no significant changes were made in the objectives, policies and processes relating to the management of the Group and the Company’s capital structure.


Finance lease liabilities 1,109 946 - -

Total debts 1,109 946 - -

Share capital 242,124 242,124 242,124 242,124 Reserves 508,106 471,635 191,980 191,875

Total capital 750,230 713,759 434,104 433,999

Gearing ratio (times) 0.001 0.001 - -



32. FINANCIAL INSTRUMENTS

32.1 Liquidity risk

Liquidity risk refers to the risk that the Group and the Company will encounter difficulty in meeting financial obligations when they fall due.

The table below summarises the maturity profile of the Group and the Company’s financial liabilities as at the reporting date based on contractual undiscounted repayment obligations:-

Within One to More than Group one year five years five years Total 2017 RM’000 RM’000 RM’000 RM’000

Financial liabilities: Non-interest-bearing: • Trade payables 23,505 - - 23,505 • Other payables 8,871 - - 8,871 • Club establishment fund - - 11,022 11,022

32,376 - 11,022 43,398

Interest-bearing: • Finance lease liabilities: • principal 505 604 - 1,109 • interest 46 26 - 72

551 630 - 1,181

2016

Financial liabilities: Non-interest-bearing: • Amounts due to Directors 2,000 - - 2,000• Trade payables 31,357 - - 31,357• Other payables 12,227 - - 12,227• Club establishment fund - - 11,845 11,845

45,584 - 11,845 57,429

Interest-bearing: • Finance lease liabilities: • principal 377 569 - 946 • interest 38 31 - 69

415 600 - 1,015



32. FINANCIAL INSTRUMENTS (CONTINUED)

32.1 Liquidity risk (continued)

Within One to More than Company one year five years five years Total 2017 RM’000 RM’000 RM’000 RM’000

Financial liabilities: Non-interest-bearing: • Amount due to subsidiaries 70,744 - - 70,744 • Other payables 26 - - 26

70,770 - - 70,770

2016 Financial liabilities: Non-interest-bearing: • Amount due to subsidiaries 77,743 - - 77,743 • Other payables 39 - - 39

77,782 - - 77,782

32.2 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market interest rates.

Sensitivity analysis for interest rate risk

No sensitivity analysis has been presented as the Group and the Company’s exposure to interest rate risk on the following interest-bearing instruments is insignificant:-

# Fixed rate instruments

These comprise interest-bearing trade receivables, short-term deposits and finance lease liabilities. The effective interest rates during the year are as follows:-

Group Company 2017 2016 2017 2016 % % % %

Trade receivables: • Interest-bearing advances 4.00 – 5.00 4.00 – 5.00 - - Short-term deposits 2.95 – 4.30 2.95 – 5.20 2.95 – 3.70 2.95 – 3.60 Finance lease liabilities 4.18 – 6.83 4.18 – 6.83 - -




32.3 Credit risk

Credit risk is the potential loss from a transaction in the event of default by the counterparty.

At the reporting date, the Group and the Company’s maximum exposure to credit risk is represented by:-

• the carrying amount of each class of financial assets recognised in the statements of financial position; and

• utilised amounts of RM1,945,000/- (2016: RM1,730,000/-) relating to a corporate guarantee given by the Company to banks for credit facilities granted to subsidiaries, as disclosed in Note 34 to the financial statements.

Credit risk is controlled by the application of credit approvals, setting of counterparty limits and monitoring procedures. Credit risk is minimised given the Group and the Company’s policies of selecting only counterparties with high credit worthiness.

The Group has no significant concentrations of credit risk with any single counterparty.

32.4 Fair values of financial instruments

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As at the reporting date, the fair values of the Group and the Company’s financial instruments approximate their carrying amounts except as disclosed below:-

Non-current financial assets

Group 2017 2016

Carrying Fair Carrying Fair amount value amount value RM’000 RM’000 RM’000 RM’000

Trade receivables: • Non-current portion 2,322 2,120 2,346 2,156

Unquoted equity securities

No fair value information has been disclosed for investment in unquoted securities of the Group as it is impracticable to estimate their fair values of the unquoted securities of the Group in the absence of quoted market prices in an active market. The Group believes that the carrying amounts represent recoverable amounts and the Group has no intention to dispose of the unquoted securities at the reporting date.




32.4 Fair values of financial instruments (continued)

Methods and assumptions used to estimate fair values

The following methods and assumptions are used to estimate the fair value of each class of financial instruments:

Financial instruments Fair values determination

• Trade and other receivables The carrying amounts of these financial instruments (current) approximate fair values due to the relatively • Cash and deposits short-term maturity of these instruments.• Trade and other payables• Amounts due from/(to) Subsidiaries/Directors

• Trade receivables The fair value of the non-current trade receivables are (non-current) estimated by discounting the future contractual cash flows at the current market rate.

The carrying amounts of the non-current trade receivables are reasonable approximation of fair value due to insignificant impact of discounting.

• Finance lease liabilities The carrying amounts of short-term finance lease liabilities approximate fair values because of the short period to maturity of these instruments.

The fair values of long-term finance lease liabilities are estimated based on the current rates available for finance lease liabilities with the same maturity profile. The carrying amount of the long-term finance lease liabilities are reasonable approximations of fair values due to the insignificant impact of discounting.

• Trust account The carrying amounts of these financial instruments• Club establishment fund approximate fair values, which represent the estimated amounts of the Group would receive or refund to members upon termination of investment contract.

32.5 Fair value hierarchy No fair value hierarchy is presented as the Group and the Company have no financial instruments

that are measured at fair value subsequent to initial measurement.




32.6 Financial instruments by category

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

Available- Financial for-sale liabilities at Total financial Loans and amortised carrying Group Note assets receivables cost amount 2017 RM’000 RM’000 RM’000 RM’000

Financial assets: • Investments 15 24 - - 24• Trust account - 2,399 - 2,399• Trade receivables 17 - 81,774 - 81,774• Other receivables 21 - 7,002 - 7,002• Cash and deposits 22 - 290,420 - 290,420

24 381,595 - 381,619

Financial liabilities: • Finance lease liabilities 25 - - 1,109 1,109• Club establishment fund 26 - - 11,022 11,022• Trade payables 27 - - 23,505 23,505• Other payables 28 - - 8,871 8,871

- - 44,507 44,507

2016

Financial assets: • Investments 15 24 - - 24• Trust account - 2,411 - 2,411• Trade receivables 17 - 37,627 - 37,627 • Other receivables 21 - 8,446 - 8,446• Cash and deposits 22 - 305,810 - 305,810

24 354,294 - 354,318

Financial liabilities: • Finance lease liabilities 25 - - 946 946• Club establishment fund 26 - - 11,845 11,845• Amounts due to Directors 18 - - 2,000 2,000• Trade payables 27 - - 31,357 31,357• Other payables 28 - - 12,227 12,227

- - 58,375 58,375




32.6 Financial instruments by category (continued)

Available- Financial for-sale liabilities at Total financial Loans and amortised carrying Company Note assets receivables cost amount 2017 RM’000 RM’000 RM’000 RM’000

Financial assets: • Amounts due from subsidiaries 18 - 82,211 - 82,211• Cash and deposits 22 - 640 - 640

- 82,851 - 82,851

Financial liabilities: • Amounts due to subsidiaries 18 - - 70,744 70,744• Other payables 28 - - 26 26

- - 70,770 70,770

2016

Financial assets: • Amounts due from subsidiaries 18 - 88,811 - 88,811• Cash and deposits 22 - 933 - 933

- 89,744 - 89,744

Financial liabilities: • Amounts due to subsidiaries 18 - - 77,743 77,743• Other payables 28 - - 39 39

- - 77,782 77,782

33. COMMITMENTS

Non-cancellable operating lease commitments - Group as lessor:

Group 2017 2016 RM’000 RM’000

Future minimum rental receivable: • 1 year or less 1,146 2,872 • 5 years or less but over 1 year 242 802

1,388 3,674

The Group entered into commercial property leases on its portfolio of investment properties consisting of commercial buildings. These leases have non-cancellable lease terms of 3 years (2016: 3 years).



34. CONTINGENT LIABILITIES Group Company 2017 2016 2017 2016 RM’000 RM’000 RM’000 RM’000

Unsecured: Corporate guarantees given to bankers for banking facilities granted to subsidiaries - - 1,945 1,730

35. SEGMENT REPORTING

Management has determined the operating segments based on reports reviewed by the Board of Directors and the working group that makes strategic decisions.

Segment information is presented in respect of Group’s business. No segment reporting by geographical segments has been provided as the Group is primarily involved in business operations in Malaysia. Inter-segment pricing is determined according to the normal course of business and has been established under the terms that are no less favourable than those arranged with external customers. Segment revenue, results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Investment and Property Group services development Construction Trading Manufacturing Quarrying Consolidated2017 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue Total revenue 17,791 188,958 92,645 25,799 18,554 2,112 345,859Inter segment revenue (6,001) - (92,645) (25,799) (18,255) - (142,700)

11,790 188,958 - - 299 2,112 203,159

Results Segment results 3,371 81,134 5,273 (31) 466 2,099 92,312Unallocated income 183Unallocated expenses (387)

Operating profit 92,108Interest income 9,902Finance costs (52)Profit from associate 780Taxation (19,936)

Profit after taxation 82,802Non-controlling interests (508)

Profit for the year 82,294

Assets Segment assets 234,092 314,741 10,823 2,228 41,710 1,837 605,431Investment in associate - 15,437 - - - - 15,437Unallocated assets 276,255

Total assets 897,123

Liabilities Segment liabilities 2,417 67,109 16,977 3,647 670 530 91,350Unallocated liabilities 36,933

Total liabilities 128,283

Others Capital expenditure 1,741 1,459 - - - - 3,200

Non-cash expenses: • depreciation and amortisation 1,134 466 147 - 4,017 - 5,764



35. SEGMENT REPORTING (CONTINUED)

Investment and Property Group services development Construction Trading Manufacturing Quarrying Consolidated2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue Total revenue 22,995 214,994 75,447 40,253 17,278 3,158 374,125 Inter segment revenue (9,339) (200) (75,447) (40,253) (16,950) - (142,189)

13,656 214,794 - - 328 3,158 231,936

Results Segment results 5,322 67,062 4,686 9 4,907 3,149 85,135 Unallocated income 2,658 Unallocated expenses (480)

Operating profit 87,313 Interest income 10,831 Finance costs (54)Loss from associate (1,854)Taxation (16,261)

Profit after taxation 79,975 Non-controlling interests (307)

Profit for the year 79,668

Assets Segment assets 238,777 312,018 6,115 2,030 46,124 2,147 607,211 Investment in associate - 14,657 - - - - 14,657 Unallocated assets 249,724

Total assets 871,592

Liabilities Segment liabilities 2,995 80,922 11,088 5,612 1,044 543 102,204 Unallocated liabilities 37,527

Total liabilities 139,731

Others Capital expenditure 782 1,152 156 - - - 2,090

Non-cash expenses: • depreciation and amortisation 945 454 207 - 6,399 - 8,005



36. RELATED PARTY DISCLOSURES

36.1 Related party transactions

Transactions with subsidiaries:


Dividend income: Kajang Granite Quarry Sdn. Bhd. - - 30,000 16,000Sin Heap Lee Brickworks Sdn. Bhd. - - - 15,000Soil-Mech Drillers Sdn. Bhd. - - - 310SHL Infra Sdn. Bhd. - - - 737Goodstock Land Sdn. Bhd. - - - 3,000Integrated Management Corporation Sdn. Bhd. - - 1,500 - Sin Heap Lee Development Sdn. Bhd. - - 6,000 16,000Sin Heap Lee Construction Sdn. Bhd. - - 7,000 - SHL Realty Sdn. Bhd. - - 2,000 -

- - 46,500 51,047

Unsecured corporate guarantees: Maximum principal amount of corporate guarantees given to bankers for banking facilities granted to: • Sin Heap Lee Company Sdn. Bhd. - - 8,900 8,900 • Sin Heap Lee Brickworks Sdn. Bhd. - - 1,000 1,000 • Sin Heap Lee Construction Sdn. Bhd. - - 57,000 57,000 • Sin Heap Lee Development Sdn. Bhd. - - 6,000 6,000

- - 72,900 72,900

Transactions with entities over which certain Directors have substantial financial interests:


Expenses: Engineering consultancy services: SSP Housing Sdn. Bhd. formerly known as Integrated Perunding Sdn. Bhd.) 3,968 2,867 - - Sepakat Setia Perunding (Sendirian) Bhd. 198 323 - -



36. RELATED PARTY DISCLOSURES (CONTINUED)

36.2 Related party balances


Amounts due from subsidiaries: Sin Heap Lee Development Sdn. Bhd. - - 55,995 73,595Sin Heap Lee Brickworks Sdn. Bhd. - - - 5,000SHL Corporate Services Sdn. Bhd. - - 1,216 1,216Kajang Granite Quarry Sdn. Bhd. - - 23,000 6,000Goodstock Land Sdn. Bhd. - - - 3,000SHL Realty Sdn. Bhd. - - 2,000 -

- - 82,211 88,811

Amount due to subsidiary: Sin Heap Lee Construction Sdn. Bhd. - - 70,743 77,743SHL Corporate Services Sdn. Bhd. - - 1 -

70,744 77,743

Amounts due to Directors: Dato’ Sri Yap Teiong Choon - 1,000 - - Dato’ Sri Ir. Yap Chong Lee - 1,000 - -

- 2,000 - -

36.3 Directors’ remunerations

The aggregate amounts of remunerations received by the Directors of the Company during the financial year were as follows:-


Non-executive Directors 120 100 120 100 Executive Directors 60 50 60 50

Total Directors’ fees 180 150 180 150 Non-executive Directors 714 826 24 24 Executive Directors 1,616 1,596 - -

Total Directors’ other emoluments 2,330 2,422 24 24

Total Directors’ remunerations 2,510 2,572 204 174

Analysed as amounts: • capitalised in property development costs (Note 19) 2,306 1,573 - - • recognised directly in profit or loss 204 999 204 174

2,510 2,572 204 174



37. SUBSEQUENT EVENT

The Company (‘SHL’) has on 3 May 2017 entered into a Joint Venture Agreement (‘the JV Agreement’) with Marubeni Corporation (‘Marubeni’) to:

• Carry on the business of undertaking the development of a land held under Geran 331496, Lot 27762 Seksyen 5, Bandar Cheras, Daerah Ulu Langat, Selangor Darul Ehsan comprising a land area of approximately 9.557 acres (‘the Land’); and

• Engage in all such activities as may be incidental thereto.

Pursuant to the JV Agreement, Sin Heap Lee Development Sdn. Bhd., a wholly-owned subsidiary of SHL and MC Chance Malaysia Sdn. Bhd., a wholly-owned subsidiary of Marubeni will incorporate a new company as a joint venture company to carry out the joint venture activities of developing the Land.

38. DISCLOSURE OF REALISED AND UNREALISED PROFITS The breakdown of the retained profits of the Group and the Company as at 31 March 2017 and

31 March 2016, into realised and unrealised profits, pursuant to Bursa Malaysia Securities Berhad’s Directive Ref: LD26/10 dated 20 December 2010 is tabulated below:-


Total retained profits of the Company and subsidiaries:

• realised 544,274 507,197 163,017 162,912• unrealised 175,500 199,927 - -

719,774 707,124 163,017 162,912Total shares of retained profits from associate:

• realised 12,644 11,908 - - • unrealised 1,488 1,444 - -

14,132 13,352 - - Less: Consolidated adjustments (203,931) (227,513) - -

Total retained profits 529,975 492,963 163,017 162,912

The determination of realised and unrealised profits is compiled based on Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.


LIST OF PROPERTIESAs at 31 March 2017

Location

Selangor Darul Ehsan

Lot 27762 & Lot 27871 Mukim of CherasDistrict of Hulu Langat

P.T. 21147Mukim of CherasDistrict of Hulu Langat

P.T. 21062 Mukim of CherasDistrict of Hulu Langat

2½ Miles, Sungai Pelek43900 Sepang

Lot 1731, 1737, P.T. 9519 & 63/2 Mukim and District of Sepang

P.T. 721Mukim and District of Sepang

Lot 64, 207, 208, 730Mukim and District of Sepang

Lot 1465, 1467, 1468 & 1471, P.T. 720 Mukim and District of Sepang

Lot 1117, Mukim of SemenyihDistrict of Hulu Langat

Lot 2116 & 3489Mukim of CherasDistrict of Hulu Langat

P.T. 21023, 21226, 21911,39753 & 39754Mukim of CherasDistrict of Hulu Langat

Description &/or

Usage

Golf Course, Club Houses and Driving Range

Medical Centre

Food Court

Land and factory building

Agriculture land

Agriculture land

Clay reserve land

Clay reserve land

Agriculture land

Land held for future housing development

Land held for future development

Tenure/Age of Building

(Years)

Freehold24

Freehold7

Freehold7

Freehold20 & 27

Freehold

99 years lease expiring in 2083

Freehold

99 years lease expiring in 2084/2087

Freehold

Freehold

Freehold

Land Area(Acres)

159.10

0.52

0.46

10.09

14.15

1.27

16.75

6.07

3.54

5.18

7.48

Net Book Value

RM’000

159,517

22,000

2,180

13,878

2,217

161

2,941

535

931

173

7,821

Date of Acquisition/

Date of Revaluation

31-3-2015

31-3-2015

31-3-2015

31-3-2015

31-3-2015

31-3-2015

31-3-2015

31-3-2015

23-6-2009

24-9-19927-5-1990

31-3-200019-12-1989

31-3-2015


LIST OF PROPERTIES (cont’d)As at 31 March 2017

Location

Lot 4137Mukim of CherasDistrict of Hulu Langat

P.T. 1-491Mukim of Batang KaliDistrict of Hulu Selangor

Lot 3954 & 3955Mukim Batang KaliDistrict of Hulu Selangor

P.T. 405, 412, 413, 1586, 2053, 2302, 2305, 2349-2357, 2403 & 2404, Mukim of RawangDistrict of Gombak

P.T. 368-369, 392-395,1673-1674 & 34019-34040 Mukim and District of Petaling

P.T. 6595, 6596 & 6933Mukim Bukit RajahDistrict of Petaling

Lot 30571 & 30572Mukim of CherasDistrict of Hulu Langat

Lot 7989 & 7990, PT 10503, Lot 1340, Mukim of SemenyihDistrict of Hulu Langat

Lot 27902 & P.T. 55131Mukim of CherasDistrict of Hulu Langat

Lot 58761-58790Mukim of CherasDistrict of Hulu Langat

Description &/or

Usage






Commercial land held for future housing development


Ongoing development of housing scheme




(Years)




Freehold

Freehold


Freehold

Freehold


Freehold

Land Area(Acres)

0.37

87.90

0.37

10.69

2.98

4.87

3.00

129.60

9.62

4.52

Net Book Value

RM’000

1

9,547

500

1

86

1,546

2,699

89,198

14,323

18,432


Date of Revaluation

15-1-1991

10-2-1999

4-8-2016

4-4-197918-12-1986

31-3-1987

31-3-1994

19-2-2003

31-3-2015

1-12-19979-8-1997

31-3-2000

7-5-1998

19-12-1989

Selangor Darul Ehsan (cont’d)


LIST OF PROPERTIES (cont’d)As at 31 March 2017

Location

Wilayah Persekutuan

Lot 251, Section 43Wilayah PersekutuanKuala Lumpur

Negeri Sembilan

Lot 493, 497, 499, 502, 503, 504, 505, 506, 507, 510, 580, 697, 698 & 699, Mukim of Parit TinggiDistrict of Kuala Pilah

Description &/or

Usage

Commercial building

Agriculture land held for future development


(Years)

Freehold23

Freehold

Land Area(Acres)

0.23

101.49

Net Book Value

RM’000

45,700

2,480


Date of Revaluation

31-3-2015

31-3-2000


ANALYSIS OF SHAREHOLDINGSAs at 30 June 2017

SHARE CAPITAL Issued and Fully Paid-up Capital - RM242,123,725.00 Class of Shares - Ordinary Shares Voting Right - One Vote Per Ordinary Share No. of Shareholders - 3,613

DISTRIBUTION OF SHAREHOLDINGS

No. of No. ofSize of Shareholdings Shareholders % Shares % Less than 100 366 10.13 14,697 0.01100 - 1,000 515 14.25 369,672 0.161,001 - 10,000 2,317 64.13 7,546,352 3.1210,001 - 100,000 347 9.60 9,598,600 3.96100,001 and below 5% 64 1.77 101,183,485 41.795% and above 4 0.11 123,410,919 50.97

TOTAL 3,613 100.00 242,123,725 100.00

SUBSTANTIAL SHAREHOLDERS

Name of NRIC No./ Direct Holdings Indirect HoldingsSubstantial Shareholders Registration No. No. of Shares % No. of Shares % 1 Y.A.M. Tengku Abdul Samad Shah 530927-10-5667 - - 21,222,437 8.77 Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah 2 Dato’ Sri Yap Teiong Choon 530218-10-5955 4,283,869 1.77 60,659,844 25.05 3 Dato’ Sri Ir. Yap Chong Lee 540921-10-5761 3,235,519 1.34 92,105,143 38.04 4 Yap Teiong Choon Holdings Sdn Bhd 67870-U 3,411,944 1.41 54,247,900 22.41 5 Sin Heap Lee Holdings Sdn Bhd 67869-D 51,519,703 21.28 - - 6 Sin Heap Lee Capital Sdn Bhd 73421-H 43,976,500 18.16 - - 7 Taipan Equity Sdn Bhd 292562-W 21,222,437 8.77 - - 8 Unikburan Sdn Bhd 336994-X 13,581,716 5.61 - - 9 Yap Chong Lee Holdings Sdn Bhd 146380-A 15,490,388 6.40 - -

DIRECTORS’ SHAREHOLDINGS

Direct Holdings Indirect HoldingsName of Directors NRIC No. No. of Shares % No. of Shares % 1 Y.A.M. Tengku Abdul Samad Shah 530927-10-5667 - - 21,222,437 8.77 Ibni Almarhum Sultan Salahuddin Abdul Aziz Shah 2 Dato’ Sri Yap Teiong Choon 530218-10-5955 4,283,869 1.77 60,659,844 25.05 3 Dato’ Sri Ir. Yap Chong Lee 540921-10-5761 3,235,519 1.34 92,105,143 38.04 4 Wong Tiek Fong 620620-06-5161 80,000 0.03 - - 5 Au Lai Koong 650726-10-5149 5,000 0.00 - - 6 Souren Norendra 701228-10-5119 - - - - 7 Ng Chin Hoo 590514-08-5391 - - - -


ANALYSIS OF SHAREHOLDINGS (cont’d)As at 30 June 2017

LIST OF THE THIRTY (30) LARGEST SHAREHOLDERSAS AT 30 JUNE 2017

NRIC No./ Names Registration No. No. of Shares % 1 SIN HEAP LEE HOLDINGS SDN BHD 67869-D 51,519,703 21.282 SIN HEAP LEE CAPITAL SDN BHD 73421-H 43,976,500 18.163 AMSEC NOMINEES (TEMPATAN) SDN BHD 102918-T 14,333,000 5.92 Pledged Securities Account - Ambank (M) Berhad for Taipan Equity Sdn Bhd 4 UNIKBURAN SDN BHD 336994-X 13,581,716 5.615 HSBC NOMINEES (ASING) SDN BHD 4381-U 11,947,000 4.93 Exempt AN for J.P. Morgan Chase Bank, National Association (SINGAPOREJPMPB) 6 STEENSTED ENTERPRISE SDN BHD 118559-D 10,037,600 4.157 YAP CHONG LEE HOLDINGS SDN BHD 146380-A 9,246,150 3.828 YAP SIN YAN & SONS SDN BHD 4555-W 8,403,939 3.479 SSP PROFESSIONAL SERVICES SDN BHD 93332-T 7,997,200 3.3010 TAIPAN EQUITY SDN BHD 292562-W 6,889,437 2.8511 YAP CHONG LEE HOLDINGS SDN BHD 146380-A 6,244,238 2.5812 KMB-WAJAR SERI SDN BHD 621146-W 5,469,400 2.2613 YAP TEIONG CHOON HOLDINGS SDN BHD 67870-U 3,411,944 1.4114 YTC GLOBAL SDN BHD 49941-A 2,728,197 1.1315 DATO’ SRI IR. YAP CHONG LEE 540921-10-5761 2,463,019 1.0216 YAP TEONG SUAN 440427-10-5493 2,303,142 0.9517 DATO’ SRI YAP TEIONG CHOON 530218-10-5955 2,223,650 0.9218 ENVIMATIC SDN BHD 251931-X 2,072,250 0.8619 DATO’ SRI YAP TEIONG CHOON 530218-10-5955 2,060,219 0.8520 DATIN SRI PHAN FOO BEAM 530301-08-6986 2,000,000 0.8321 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD 284597-P 1,896,750 0.78 Pledged Securities Account for Ng Peck Chin 22 LIM KHUAN ENG 420329-08-5697 1,255,000 0.5223 GOH THONG BENG 401020-07-5219 900,000 0.3724 DATO’ SRI IR. YAP CHONG LEE 540921-10-5761 772,500 0.3225 KHER PEK CHOO 520301-10-5578 640,000 0.2626 YAP BOON HUNG 600704-10-5863 566,500 0.2327 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD 284597-P 510,000 0.21 Pledged Securities Account for Lim Bee Ying 28 YAP WENG YAU 831028-14-6261 500,000 0.2129 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 317329-W 400,000 0.17 Deutsche Bank AG Singapore for Yeoman 3-Rights Value Asia Fund (PTSL) 30 YAP HONG ENG 351206-10-5014 375,000 0.15

I/We NRIC / Passport / Company No.

of

being a member of SHL CONSOLIDATED BHD. hereby appoint

NRIC / Passport No.

(Proportion: %) of

and/or failing him/her,

NRIC / Passport No. (Proportion: %) of

or failing him/her,the Chairman of the Meeting as my/our proxy to attend and vote on my/our behalf at the 23rd Annual General Meeting of the Company to be held on Thursday, 24 August 2017 at 11.00 a.m. and at any adjournment thereof, and to vote as indicated below: -

PROXY FORM

Ordinary Resolutions For Against

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Signature of Member / Common Seal

As witness my/our hand(s) this day of , 2017

Notes:

SHL CONSOLIDATED BHD.(Company No: 293565-W)(Incorporated in Malaysia)

To approve the Final Single-Tier Dividend

To approve the payment of Directors’ fees

To re-elect Mr. Souren Norendra as Director of the Company

To re-elect Mr. Ng Chin Hoo as Director of the Company

CDS Account No. No. of shares held Contact No.

To re-appoint Messrs Khoo Wong & Chan as Auditors of the Company and authorise the Directors to fix their remuneration

To approve the proposed Shareholders’ Mandate for SHL Group to enter into recurrent related party transactions of a revenue or trading nature

Authority to issue and allot shares pursuant to Section 76 of the Companies Act, 2016

(Please indicate your vote by marking (X) in the space provided above on how you wish your vote to be cast. Unless voting instructions are indicated in the space above, the proxy will vote or abstain from voting as he/she thinks fit.)

(a) Only depositors whose names appear in the Register of Depositors as at 17 August 2017 shall be entitled to attend in person or appoint proxies to attend and/or vote on their behalf at the 23rd Annual General Meeting.

(b) A member entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A proxy may but does not need to be a member of the Company pursuant to Section 334 of the Act.

(c) Where a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

(d) In the event the member(s) duly executes the form of proxy but does not name any proxy, such member(s) shall be deemed to have appointed the Chairman of the Meeting as his/their proxy, provided always that the rest of the form of proxy, other than the particulars of the proxy, have been duly completed by the member(s).

(e) In the case of a corporate member, the instrument appointing a proxy must be either executed under its common seal or under the hand of its officer or attorney duly authorised. The corporation may by its resolution of its Board or a certificate of authorisation by the Corporation to appoint a person or persons to act as its representative or representatives to attend and vote on their behalf.

(f) 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.

(g) The instrument appointing a proxy must be deposited at the Registered Office of the Company at 6th Floor, Wisma Sin Heap Lee, 346, Jalan Tun Razak, 50400 Kuala Lumpur not less than forty-eight (48) hours before the time set for the Annual General Meeting or at any adjournment thereof.

Fold here

Fold here

SHL Consolidated Bhd. (293565-W)

Please affix Stamp

6th Floor, Wisma Sin Heap Lee346, Jalan Tun Razak50400 Kuala Lumpur