Nextgreen Global Berhad Annual Report 2018

(Formerly known as BHS Industr ies Berhad) ( Incorporated in Malays ia)

O U R C O R E BUS I N E S S

P r i n t i n g•

G r e e n Te c h n o l o g y•

D e v e l o p m e n t•

I n d u s t r i a l P a r k M a n a g e m e n t

Tel: +603 9076 3399 (HL) Fax: +603 9074 7573E-mail: [email protected]: www.bhs.my

Tel : +603 7725 2088 (HL) Fax : +603 7725 2099E-mail : [email protected] : www.nextgreenglobal.com

Contact usC O R P O R AT E O F F I C E :Lot 6-02, Menara LGBNo.1, Jalan Wan Kadir,Taman Tun Dr. Ismail,60000 Kuala Lumpur, Malaysia

P R I N T I N G F A C T O R YLot 4, Lorong CJ 1/1B,Kawasan Perindustrian Cheras Jaya,43200 Cheras, SelangorMalaysia

11

ANNUAL REPORT2 0 1 8

NEX

TGR

EEN G

LOB

AL B

ERH

AD

2018

FinancialStatements

for the year ended 30 June 2018

02 Notice of 13th Annual General Meeting

06 Corporate Information

07 Corporate Structure

08 Financial Highlights

10 Board of Directors and Profi les

16 Profi les of Key Management team

18 Management Discussion & Analysis

24 Statement on Corporate Governance

31 Sustainability Statement Responsibility

32 Statement of Risk Management & Internal Control

34 Audit Committee Report

36 Nominating Committee’s Statement

40 Directors’ Report 45 Independent Auditors’s Report

50 Statements of Comprehensive Income

51 Statements of Financial Position

52 Statements of Changes in Equity

54 Statements of Cash Flows

57 Notes to the Financial Statements

104 List of Group’s Properties

105 Analysis of Shareholdings

108 Analysis of Warrant Holdings

111 Form of Proxy

A N N U A L R E P O R T 2 0 1 8

AGENDA

Ordinar y Resolution

2

3

4

5

6

7

8

9

1

NEXTGREEN GLOBAL BERHAD(Formerly known as BHS Industries Berhad)

(Company No. 719660-W)(Incorporated in Malaysia)

NOTICE IS HEREBY GIVEN THAT the 13th Annual General Meeting of the Company will be held at Tioman Room, Bukit Jalil Golf and Country Resort, Jalan Jalil Perkasa 3, Bukit Jalil, 57000 Kuala Lumpur on Monday, 3 December 2018 at 10.00 a.m. to transact the following businesses:-

1. ToreceivetheAuditedFinancialStatementsforthefinancialyearended30June2018andtheReports of Directors and Auditors thereon.

2. Toapprovethepaymentof Directors’feesandbenefitstotheNon-ExecutiveDirectorsof RM26,533.30fortheirservicesfrom1July2017until3December2018inexcessof thecurrentapproved limit.

3. Toapprovethepaymentof Directors’feesandbenefitstotheNon-ExecutiveDirectorsuptoanamountof RM350,000.00fortheirservicesfrom4December2018untilthenextannualgeneral meeting of the Company.

4. To re-elect the following Directors who retire by rotation in accordance with the Company’s Constitution:-

(i) Dato’ Lim Thiam Huat (Article 84)

(ii) Thiang Chew Lan (Article 84)

(iii) Koo Thiam Yoong (Article 84)

(iv) Nor’Azamin Bin Salleh (Article 91)

(v) Dr.HidayahBintiAriffin(Article91)

5. To appoint Messrs Russell Bedford LC & Company as Auditors of the Company and to authorisetheDirectorstofixtheirremuneration.

6. Toconsiderandif thoughtfit,topassthefollowingOrdinaryResolutions,withorwithoutmodifications:-

(A) PROPOSED RETENTION OF INDEPENDENT NON-EXECUTIVE DIRECTOR

“THATMadamChewYuitYoowhohasservedtheBoardasIndependentNon-ExecutiveDirector of the Company for a cumulative term of more than nine (9) years be and is herebyretainedasSeniorIndependentNon-ExecutiveDirectorof theCompany.”

2 Annual General Meeting

A N N U A L R E P O R T 2 0 1 8

Ordinar y Resolution

10

11

12

13

(B) PROPOSED RETENTION OF INDEPENDENT NON EXECUTIVE DIRECTOR

“THAT subject to the passing of Ordinary Resolution 4,Ms ThiangChewLanwhohas served theBoard as IndependentNon-ExecutiveDirector of theCompany for acumulative term of more than nine (9) years be and is hereby retained as Independent Non-ExecutiveDirectorof theCompany.”

(C) AUTHORITY TO ALLOT SHARES

“THAT subject always to the Companies Act 2016 (“Act”) and the approvals of therelevant authorities, the Directors be and are hereby authorised pursuant to the Act, to allotsharesintheCompanyatanytimeuntiltheconclusionof thenextAnnualGeneralMeeting upon such terms and conditions and for such purposes as the Directors may in their absolutediscretiondeemfitprovided that the aggregatenumberof shares tobeissuedpursuanttothisResolutiondoesnotexceed10%of thetotalnumberof issuedsharesof theCompanyforthetimebeing.”

(D) PROPOSED ALLOCATION OF EMPLOYEES’ SHARE OPTION SCHEME OPTIONS TO NOR’AZAMIN BIN SALLEH

“THAT approval be and is hereby given to the Board, at any time and from time to time during the duration of the employees’ share option scheme (“ESOS”), to offer and/orgranttoNor’AzaminBinSalleh,theExecutiveDirectorof theCompany,optionstosubscribe for such number of ordinary shares in the Company (“NGGB Shares”)tobeissuedundertheESOSprovidedthatnotmorethantenpercent(10%)of theNGGBShares available under theESOS at the point in timewhen the offer ismade, shouldbe allocated to any individual eligible person who, either singly or collectively through personsconnected(asdefinedintheMainMarketListingRequirementsof BursaMalaysiaSecuritiesBerhad)totheeligibleperson,holdstwentypercent(20%)ormoreof thetotalissuedsharesof theCompany;andsubjectalwaystosuchtermsandconditionsand/orany adjustments which may be made in accordance with the provision of By-Laws of the ESOS.”

(E) PROPOSED ALLOCATION OF EMPLOYEES’ SHARE OPTION SCHEME OPTIONS TO DR. HIDAYAH BINTI ARIFFIN

“THAT approval be and is hereby given to the Board, at any time and from time to time during the duration of the employees’ share option scheme (“ESOS”), to offer and/orgranttoDr.HidayahBintiAriffin,theIndependentNon-ExecutiveDirectorof theCompany, options to subscribe for such number of ordinary shares in the Company (“NGGB Shares”)tobeissuedundertheESOSprovidedthatnotmorethantenpercent(10%)of theNGGBSharesavailableundertheESOSatthepointintimewhentheofferismade, should be allocated to any individual eligible person who, either singly or collectively throughpersonsconnected(asdefinedintheMainMarketListingRequirementsof BursaMalaysiaSecuritiesBerhad)totheeligibleperson,holdstwentypercent(20%)ormoreof the total issued shares of the Company; and subject always to such terms and conditions and/oranyadjustmentswhichmaybemadeinaccordancewiththeprovisionof By-Lawsof theESOS.”

A N N U A L R E P O R T 2 0 1 8

7. To transact any other business of which due notice shall have been received.

BYORDEROFTHEBOARD

KANGSHEWMENGSEOWFEISANSecretaries

Petaling Jaya31October2018

Notes:

1. Proxy 1.1 OnlydepositorswhosenamesappearintheRecordof Depositorsasat26November2018shallberegardedas

members and entitled to attend, speak and vote at the Meeting.

1.2 Amemberentitledtoattendandvoteatthemeetingisentitledtoappointaproxytoattendandvoteinhisstead.AproxyneednotbeaMemberof theCompanyandamembermayappointanypersonstobehisproxy.

1.3 Amembershallbeentitledtoappointnotmorethantwo(2)proxiestoattendandvoteattheAnnualGeneralMeeting. Where a member appoints two (2) proxies, the appointment shall be invalid unless the memberspecifiestheproportionsof hisholdingtoberepresentedbyeachproxy.

1.4 Where a member of the Company is an authorised nominee as defined under the Central Depositories Act, it may appointatleastoneproxyinrespectof eachSecuritiesAccountitholdswithordinarysharesof theCompanystanding to the credit of the said Securities Account.

1.5 Whereamemberof theCompanyisanExemptAuthorisedNomineewhichholdsordinarysharesintheCompanyfor multiple beneficial owners in one securities account known as an omnibus account, there is no limit to the numberof proxieswhichtheExemptAuthorisedNomineemayappointinrespectof eachomnibusaccountit holds.

1.6 The instrumentappointingaproxy shallbe inwritingunder thehandof theappointerorhis attorneydulyauthorised in writing, or if the appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised.

1.7 TheinstrumentappointingaproxymustbedepositedattheRegisteredOfficeof theCompanyat802,8thFloor,BlockC,KelanaSquare,17JalanSS7/26,47301PetalingJaya,SelangorDarulEhsanat leastfortyeight(48)hours before the time for holding the meeting or any adjournment thereof.

2. Audited Financial Statements for the Financial Year Ended 30 June 2018

The shareholders’ approval on the Audited Financial Statements are not required pursuant to the provisions of Section 340(1) of the Companies Act 2016 (“Act”),hence,thematterwillnotbeputforvoting.

3. Ordinary Resolutions 1 & 2: Directors’ fees and benefits payable to the Non-Executive Directors

Pursuant to Section 230(1) of the Act, the fees of the directors and any benefits payable to the directors of a listed company and its subsidiaries shall be approved at a general meeting. In this respect, the Board agreed that the

4 Annual General Meeting

(continued)

A N N U A L R E P O R T 2 0 1 8

shareholders’ approval shall be sought at the 13th Annual General Meeting (“AGM”)on theDirectors’ fees andbenefits.

The shareholders, at the 12th AGM held on 28 November 2017 approved the payment of Directors’ fees and benefitsof uptoRM380,000.00from1July2017untiltheCompany’snextAGM(“2017 Approved Limit”).Dueto the increase in Board size, the total amount of Directors’ fees and benefits from 1 July 2017 until the date of thisAGMisamountingtoRM406,533.30of whichRM26,533.30isinexcessof the2017ApprovedLimit(“Excess Amount”). Accordingly, specific shareholder approval will be sought at the 13th AGM for the payment of theExcessAmount(Note:OrdinaryResolution1).

TheDirectors’feesandbenefitspayabletotheNon-ExecutiveDirectorsfrom4December2018untiltheconclusionof the nextAGM is estimated not to exceedRM350,000. TheDirectors’ benefits payable to theNon-ExecutiveDirectors are essentially themeeting allowance for attendance of Board/BoardCommitteemeetings.TheBoardwill seek shareholders’ approval at thenextAGM in the event the amountof theDirectors’ fees andbenefits isinsufficientduetoanincreaseinBoard/BoardCommitteemeetingsand/orincreaseinBoardsize.

4. Ordinary Resolutions 9 and 10: Proposed Retention of Independent Non-Executive Director

TheproposedOrdinaryResolutions9and10areproposedpursuanttorecommendationof theMalaysianCodeof Corporate Governance and if passed, will allow Madam Chew Yuit Yoo and Ms Thiang Chew Lan to be retained andcontinuetoactasIndependentNon-ExecutiveDirectorof theCompany.

The full details of the Board’s justifications for the retention of Madam Chew Yuit Yoo and Ms Thiang Chew Lan asIndependentNon-ExecutiveDirectorissetoutintheNominatingCommittee’sStatementascontainedin2018Annual Report.

5. Ordinary Resolution 11: Authority to Allot Shares

TheproposedOrdinaryResolution11,if passed,willempowertheDirectorsof theCompanytoallotnotmorethan10%of the totalnumberof issuedsharesof theCompanysubject toapprovalsof all therelevantgovernmentaland/or other regulatory bodies and for such purposes as theDirectors considerwould be in the interest of theCompany.Thisauthorisationwill,unlessrevokedorvariedbytheCompanyingeneralmeeting,expireatthenextAnnual General Meeting of the Company.

As at the date of printing of this Annual Report, no new shares in the Company were issued pursuant to the authority granted to the Directors at the 12th Annual General Meeting held on 28 November 2017 and which will lapse at the conclusion of the 13th Annual General Meeting.

The authority will provide flexibility to the Company for any possible fund raising activities, including but notlimited to further placing of shares, for purpose of funding future investment project(s), working capital, repayment of bankborrowingand/oracquisitions.

6. Ordinary Resolution 12 & 13: Proposed Allocation of Employees’ Share Option Scheme Options

The proposed Ordinary Resolutions No. 12 and 13, if passed, will empower the Directors of the Company tooffer and grant to Nor’Azamin Bin Salleh and Dr. Hidayah Binti Ariffin, who were appointed as Directors of the Company after the implementation of the employee’ share option scheme (“ESOS”)therighttosubscribeforsuchnumberof newordinarysharesintheCompanypursuanttotheESOSinthemannerprovidedintheBy-Lawsof ESOS.Theresolutions12and13werestructuredinasimilarmannerbasedonthepreviousresolutionspassedbythe shareholdersrelatingtograntingof ESOSoptionstoothersmembersof theBoard.

A N N U A L R E P O R T 2 0 1 8

6 Corporate Information

Board of directors

dato’ dr. Haji sohaimi Bin shahadanchairman, independent Non-execut ive director

dato’ L im thiam HuatManaging director

Koo thiam Yoongexecut ive director

datuk Lee Hwa chengexecut ive directordatuk Lawrence Yeo chua Pohexecut ive directorNor azamin Bin sal lehexecut ive director

chew Yuit Yoosenior independent Non-execut ive director

thiang chew Lanindependent Non-execut ive director

dato’ dr. Koe seng Khengindependent Non-execut ive director

dr. Hidayah ar i f f inindependent Non-execut ive director

aUdit coMMittee

chew Yuit Yoo - chairpersonsenior independent Non-execut ive director



reMUNeratioN coMMittee

thiang chew Lan - chairpersonindependent Non-execut ive director

chew Yuit Yoosenior independent Non-execut ive director


dr. Hidayah ar i f f inindependent Non-execut ive director

NoMiNatiNG coMMittee

chew Yuit Yoo - chairpersonsenior independent Non-execut ive director



coMPaNY secretaries

Kang shew Meng (Maicsa 0778565)seow fei san (Maicsa 7009732)

reGistered office

802, 8th floor, Block c, Kelana square17 Jalan ss7/26,47301 Petaling Jayaselangor darul ehsantelephone No : (03) 7803 1126facsimile No : (03) 7806 1387

sHare reGistrar

tricor investor services sdn Bhd (118401-V)

Unit 32-01, Level 32, tower a,Ver tical Business suite, avenue 3, Bangsar south,No. 8, Jalan Kerinchi, 59200 Kuala Lumpurtelephone No : (03) 2783 9299facsimile No : (03) 2783 9222e-mail: [email protected]

PriNciPaL BaNKers

Public Bank Berhad (6463-H)Menara Public BankNo. 146, Jalan ampang, 50450 Kuala Lumpurtelephone No : (03) 2176 6000facsimile No : (03) 2163 9917

amBank (M) Berhad (8515-d)Menara amBank8 Jalan Yap Kwan seng, 50450 Kuala Lumpurtelephone No : (03) 2167 3040facsimile No : (03) 2161 2110

aUditors

russell Bedford Lc & companychartered accountants10th floor, Bangunan Yee seng15, Jalan raja chulan50200 Kuala Lumpurtelephone No : (03) 2031 8223facsimile No : (03) 2031 4223

stocK eXcHaNGe ListiNG

Main Market of Bursa Malaysia securities Berhadstock code: 7241

mailto:[email protected]

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7 Corporate

Structureas at 30 June 2018

NEXTGREEN GLOBAL BERHAD

Nextgreen Group Structure

100% 100% 100% 100%

100%

100% 100%

100% 100% 100% 100% 100% 100% 100%

Green Technology Park Pekan,

Pahang

Construction & PMC

InvestmentHolding

Publishing Property Investment& Development

Leasing of rightsProperty Development Publishing & provisionof on-line education

Property Development

Processing & Manufacturingof Fertilizers

Processing & Manufacturing of Pulps and Papers

Producing & Supplyingof Biomass Energy.

BHS LandDevelopment

Sdn. Bhd.

SystemMultimedia& InternetSdn. Bhd.

ULTIMATE IVORY

Sdn. Bhd.

Pustaka SystemPelajaranSdn. Bhd.

SystemPublishing House

Sdn. Bhd.

(Holder of Master Licence Agreement)

Firasat PrimaSdn. Bhd.

BHS E EDUCATIONSdn. Bhd.

NEXTGREEN energySDN. bhd.

NEXTGREEN (SARAWAK) SDN BHD

SDN. bhd.

Printing

BHS Book PrintingSdn. Bhd.

Pulp and Paper Sdn. Bhd.

Processing & Manufacturing

of Pulps and Papers

NEXTGREEN

2014RM65.6

2015RM31.7

2016RM28.3

2017RM25.2

2018RM29.8

Mill

ion

(RM

)

5

0

10

15

20

25

30

35

40

45

50

44.3

21.3

17.6

14.116.1

12.2

6.7

18.5 19.5

10.3

3268

4456

4357

57

2018

Local

Overseas

2014 2015 2016 2017

26.673.4

65.4Local

34.6Overseas

G

N

GROUP REVENUE

ET ASSETS PER SHARE

ROSS PROFIT

attributable to Ordinary Equity Holders

(LOSS)/PROFIT BEFORE TAX (RM million)

(RM million) (RM million)

(LOSS)/PROFIT AFTER TAX(RM million)

(LOSS)/EARNINGS PER SHARE

65.52014

2015

2016

2017

2018

31.7

28.3

25.2

29.8

17.22014

2015

2016

2017

2018

1.2

3.0

(1.1)

1.7

232014

2015

2016

2017

2018

27

27

27

27

3.182014

2015

2016

2017

2018

0.81

(0.84)

(2.39)

(0.41)

8.62014

2015

2016

2017

2018

2.6

(2.8)

(12.6)

(2.0)

10.22014

2015

2016

2017

2018

2.8

(3.2)

(10.1)

(1.8)

8 Financial Highlights

A N N U A L R E P O R T 2 0 1 8

2014RM65.6

2015RM31.7

2016RM28.3

2017RM25.2

2018RM29.8

Mill

ion

(RM

)

5

0

10

15

20

25

30

35

40

45

50

44.3

21.3

17.6

14.116.1

12.2

6.7

18.5 19.5

10.3

3268

4456

4357

57

2018

Local

Overseas

2014 2015 2016 2017

26.673.4

65.4Local

34.6Overseas

A N N U A L R E P O R T 2 0 1 8

Revenue Analysis by location

10 Board of Directors & Profiles

Dato’ Dr. Haji Sohaimi Bin ShahadanChairman, Independent Non-Executive Director

Director

Dato’ Haji Sohaimi Bin Shahadan, Male, Malaysian, aged 49, was appointed as the Non-Independent Non-Executive Chairman of the Company on 8 August 2014. On 6 October 2016, Dato’ Haji Sohaimi had been redesignated as Independent Non-Executive Chairman.

He graduated with a Bachelor Degree in Business Administration from Universiti Kebangsaan Malaysia in 2000 and obtained a Master Degree in Business Administration from West Coast Institute of Technology & Management, Perth, Australia in 2002. He also holds a Master Degree in Corporate Communication from University Pertanian Malaysia in 2004. He has been awarded Honorary Ph.D. from Geomatika University College for Entrepreneur achievement and works for Malaysia in 2015.

Dato’ Hj. Sohaimi is Independent Non-Executive Director for Trive Property Group Berhad since 2018, Executive Director of Quantum Solar Park, Malaysia, the Group Chairman of LeBlanc Berhad, the Chairman of Consolidated Fertiliser Corporation Sdn Bhd and the Chairman of Hitech Construction Sdn Bhd.

Dato’ Hj. Sohaimi was the Independent Non-Executive Chairman of PDZ Holdings Berhad from 2014 to 2017, EKA Noodles Berhad from 2014 to 2017, the Independent Non-Executive Director of KUB Malaysia Berhad from 2014 to 2015 and the Independent Non-Executive Director of Damansara Realty Berhad from 2014 to 2015. He was also the Chairman of Pelaburan MARA Berhad (PMB) from 2014 to 2015, an investment entity for Majlis Amanah Rakyat (MARA) Pelaburan MARA Berhad (PMB) 2013 to 2015, an investment entity for Majlis Amanah Rakyat (MARA) and the former Chairman of Kraftangan Malaysia from 2011 to 2014.

From 1998 to 2010, he was the Director of Institute of Bumiputra Entrepreneurs and from 2013 to 2015 he was entrusted by the Ministry of Rural and Regional Development (KKLW) to lead the investment entity for Majlis Amanah Rakyat, Pelaburan MARA Berhad from 2013 to 2015. He served as the Chairman of Kraftangan Malaysia form 2011 to 2014. He was also the Chairman of Kolej Poly-Tech MAEA (KPTM) from 2010 until 2013.While engaging in his business, Dato’

Haji Sohaimi is also passionate in entrepreneurship arena, he also served as the Chairman of Asean Young Entrepreneurs Secretariat (1998 – 2000), the Chairman of PERDASAMA MUDA Malaysia before appointed as Vice President IV of PERDASAMA, the Committee Member of Selangor Malay Chamber of Commerce Malaysia (DPMM) (2009 – 2010), the Patron of Consortium Cartoonist at Work (CaW), the Entrepreneurs Speaker for Institute Keusahawan Negara (INSKEN) and the Entrepreneur Speaker for Pusat Pembangunan Usahawan Malaysia (MEDEC).

Despite his busy schedule engaging in business, Dato’ Haji Sohaimi also working closely with charity organization and founded an orphanage shelter, “Teratak Che Dah” in Kuang, Selangor. The orphanage house set to provide better education, protection and housing to the unfortunates. Dato’ Haji Sohaimi also founded Yayasan Jamin as Non-Government Organisation aimed at social services regardless of religion, ethnicity and political affiliation. Yayasan Jamin has carried out hundreds of welfare activities by helping people in need around Malaysia.

Dato’ Lim Thiam HuatManaging Director

Director

pulp and paper. In 2008, Dato’ Lim

and his partner incorporated Green

Patent Technologies Sdn Bhd to patent

the technology in Malaysia, China,

Indonesia and Thailand.

This technolog y is ca l led Pre

Conditioning Refiner Chemical

Recycled Bleached Mechanised

Pulp (“PRC RBMP”). Dato’ Lim ‘s

experience and involvement in PRC

RBMP technology started from the

incubation stage of the technology.

PRC RBMP was specially researched

and developed to solve the palm oil

industry and paper industry problems

without harming the ecological system.

Dato’ Lim Thiam Huat, Male,

Malaysian, aged 54, is our Managing

Director. He was appointed to the

Board on 17 December 2014. Dato’

Lim has vast experience in managing

construction and development projects

for more than 28 years. He had

successfully completed projects like

commercial high rise cum shopping

complexes, industrial buildings, housing

projects, hotel/resorts, hospital and

luxurious apartments. In 2003, Dato

Lim diversified his business focus

to environmental friendly business

and entered into a partnership with

a Chinese partner to research into

using Empty Fruit Bunches (“EFB”)

from palm oil waste to manufacture

The design of PRC RBMP uniquely

allow for the creation of multiple

business ventures that are “green” in

nature and groundbreaking. Dato’

Lim drives the business direction of

the Group and sets the missions and

objectives for the Group to achieve.

Dato’ Lim was appointed as Economic

Consultant to the Republic of Palau

in Malaysia on 28 August 2015 and

he was also appointed as Honorary

Consul of the Republic of Palau to

Malaysia on 5 November 2015.

A N N U A L R E P O R T 2 0 1 8 A N N U A L R E P O R T 2 0 1 8


Executive DirectorKoo Thiam Yoong

Executive DirectorDatuk Lawrence Yeo

Executive DirectorDatuk Lee Hwa Cheng

Aged 54, Male, Malaysian, is our Executive Director. He was appointed to the Board on 10 March 2016. Datuk Lawrence holds Bachelor of Laws Degree (LL.B) from the Monash University School of Laws, Melbourne, Australia and also Bachelor of Economics Degree (B.Ec.) from the Monash University School of Economics, Melbourne, Australia. Datuk Lawrence Yeo is a practising lawyer, notary public, corporate advisor and company secretary. He also appointed as a CEO to several companies such as Amechanus Holdings Sdn Bhd, Green Symphony Technology Sdn Bhd, Sara-Ed Trading Sdn Bhd and Set Construction Sdn Bhd. Datuk Lawrence Yeo is a member of Kelab Golf Sarawak (KGS) since 1999 and the Sarawak Club since May 2012. He is the Treasury of One Belt One Road Association (Persatuan Muafakat One Belt One Road).

Aged 65, Male, Malaysian, is our Executive Director. He was appointed to the Board of our Company on 28 April 2014. He obtained his LCC Higher Diploma in Accounting in 1973 and has about 40 years of working experience. Mr Koo started his career as an Audit Clerk with Robert Lim Kwong & Company (Now known as E & Y). Following that he worked for a subsidiary of United Motor Works Berhad as Accounts/Administration Officer. After a two year’s stint there, he joined a 100% Foreign owned Dutch Company named Anglo American Corporation Sdn Bhd as an Accountant/ Secretary. Mr Koo was promoted to Finance Director after 3 years. Through a management buy-out, Mr Koo and three of his colleagues jointly owned the Company. In 1990, he sold his shares in the Company to join TA Securities Bhd as a Business Development Manager. At the same time, he also acted as a Business Consultant for investment in China, particularly, Shanghai. Mr Koo has also involved in the investments of properties and foreign currencies. At present, Mr Koo is responsible for the overall operation and management of printing business.

Aged 57, Male, Malaysian, is our Executive Director. He was appointed to the Board on 10 September 2015. Datuk Lee started his career with Sinma Jewellery Sdn Bhd (“Sinma”) in 1986 and grew it to become the largest costume jewellery retail chain in Malaysia with outlets spanning across the Asian region. During his tenure as a Chief Executive Officer of Sinma, Datuk Lee was appointed as a President of Malaysia Retailers Chain Association (“MRCA”). In recognition of his contribution and vast experience, Datuk Lee was made a Life Time Honorary President of MRCA. He exited the costume jewellery business in 2011 to venture into the construction and property developments industry. Datuk Lee entered into joint venture businesses with the China’s State owned Enterprise, China Engineering Group set up Zhonghe Huaxing Development (M) Sdn Bhd as the Executive Chairman.


Executive DirectorNor’ Azamin Bin Salleh

Aged 59, Female, Malaysian, is our Senior Independent Non-Executive Director. She was appointed to the Board of our Company on 7 August 2007. She is Member of the Malaysian Institute of Accountants. She brings with her over 30 years of fi nance, accounting and stock broking experience. After obtaining her professional accounting qualifi cation from ACCA in 1983, she was trained in several accounting fi rms, namely Keyse, Poulter Partners & Co, Lawrence Fink & Co and Maliney Wilkins & Co in London for three years. She subsequently joined Bolton Finance Bhd as an Assistant Accountant after returning from London in 1985 and was holding the post of an Accountant before she left the company in 1990. Thereafter, she joined Prime Credit Leasing Sdn Bhd (a subsidiary of Berjaya Group) in 1990 as an Accountant. She then left to join her present employer, Maybank Investment Bank Bhd (formerly known as Aseambankers Malaysia Berhad) as a Remisier in 1993. Madam Chew is the Chairperson of the Audit Committee and Nominating Committee and also a member of Remuneration Committee.

Executive Director Senior Independent Non-Executive Director

Chew Yuit Yoo

Independent Non-Executive DirectorThiang Chew Lan

Independent

Aged 66, Female, Malaysian, she was appointed on 30 January 2009. She started her career as a Bank teller in Hock Hua Bank Berhad in 1971. She obtained her certifi cate in Book-Keeping (Intermediate) accredited by the London Chamber of Commerce (LCCI) and Pitman Examinations Institute London in Book-Keeping (Intermediate and Advanced) in 1970. She was promoted to head the department for General Ledger/Statistics in 1974 until 1979. There she moved on to head the department for Fixed Deposits and Remittances and was given authority to authenticate test-keys for 3 years. Between 1983-1991, she was transferred to take charge of the Savings/Fixed Deposits, Current Account and Clearing. She was given the task Branch Audit from 1992 to 1993. When Hock Hua Bank merged with Public Bank in 2001, she had experiences in taking charged of the ATM/Safe Deposit Box as a Frontline offi cer. Over the years, she had accumulated more than 36 years of experience in Banking Industry until her retirement in September 2007. Madam Thiang is the Chairperson of Remuneration Committee and the member of the Audit Committee and Nominating Committee.

Aged 52, Male, Malaysian is our Executive Director. He was appointed to the board on 19 July 2018. A chartered accountant and certifi ed fi nancial planner, Azamin holds a Bachelor of Commerce from Australian National University and Master of Business Administration from OU Business School, United Kingdom. He has a t t ended Executive Management Program by the reputable Wharton Business School and Tsinghua University. Azamin started his career with Hanafi ah Raslan and Mohammad as Audit assistant. He has over 25 years of experience in the fund management and fi nancial services industry and has held key positions in leading fund management companies namely Maybank Asset Management Group, Asian Islamic Investment Management (subsidiary of DBS Asset Management Pte Ltd) and Commerce Asset Fund Managers. Azamin is also the co-owner and advisor to WeInvest Robo Advisory Solution, Asia’s fi rst digital wealth management solution provider. In addition to this, he is the chairman and co-founder of Ficus Venture Capital Sdn Bhd, a venture capital company registered with Securities Commissions.


Independent Non-Executive Director

Dato’ Dr. Koe Seng Kheng

Independent Non-Executive Director

Dr. Hidayah Ariffin

Aged 47, Male, Malaysian, is our Independent Non-Executive Director. He was appointed to the Board of our Company on 28 April 2014. He started his career as a teacher in Confucian Private Secondary School and part-time lecturer for College for the past 15 years. While he was working, he has successfully pursued a Bachelor Degree of Business Admistration in Year 1993, Master Degree in Business Admistration in Year 1998, and also successfully obtained a PhD in Business Administration in Year 2011, accredited by the Infrastructure University Kuala Lumpur. After a long service in education fi eld, he started to focus and manage businesses in property investment and management in Malaysia. At present, he sits on the Board of Director of several other private limited companies that involve in different industries such as Trading, Food and Beverage industries. In 2012, Dr. Koe was awarded DIMP which carries the title Dato’ with Sultan of Pahang. Dato’ Dr. Koe is a member of the Audit Committee, Nominating Commitee and also Remuneration Committee.

Independent

Notes: 1. None of the directors has any family relationship with each other and/or major shareholders of the Company.2. None of the directors has any conviction for offences other than traffi c offences in the past 5 years and none of them has any public sanction or penalty imposed by the relevant regulatory bodies during the fi nancial year. 3. The directors’ holdings in shares of the company are disclosed in the analysis of shareholdings of the Annual Report.4. None of the directors has any confl ict of interest with the company.


(continued)

Assoc. Professor Dr Hidayah Ariffi n, aged 37, Female is our Independent Non-Executive Director. She was appointed to the Board on 6 September 2018. Dr Hidayah obtained her Bachelor of Process and Food Engineering degree from Universiti Putra Malaysia (UPM) in 2004, followed by MSc in Bioprocess Engineering from UPM in 2006, and PhD in Environmental Engineering from Kyushu Institute of Technology (Kyutech), Japan in 2009. She started her career as a tutor in UPM in 2006, and was later promoted to Senior Lecturer position in 2009. At present, Dr Hidayah is an Associate Professor at the Faculty of Biotechnology and Biomolecular Sciences (FBBS), UPM. She also holds management position at the Institute of Tropical Forestry and Forest Products (INTROP), UPM as a Deputy Director; and also an Innovation

Independent

Coordinator at FBBS. Her areas of specialization include biopolymer, b ioprocess engineering and environmental biotechnology. She is actively involved in research, particularly related to the utilization of oil palm biomass for value-added products. She has invented multiple research products with intellectual property (IP) protection, and won several research awards. Her research fi ndings have been published in numerous high impact journal articles, book chapters, and conference proceedings; with a total number of publications of more than 80 articles . Her current research interest is in development, modifi cation and utilization of cellulosic material, particularly for nanocellulose, biopolymers and its derivatives. Assoc. Professor Dr Hidayah is a member of Remuneration Committee.


(95134 K)(Wholly owned by NEXTGREEN GLOBAL BERHAD)

(formerly known as BHS Industries Berhad)

Our Company, BHS, was founded in 1982. It specialises in the printing of magazines and books. Today, BHS is one of the leading printing companies in Malaysia.

We have both sheet-fed and web-o�set for printing of books and magazines. We also have in-house DTP, CTP, book binding and UV facilities. We import paper directly from paper mills overseas and order directly from local paper mills for book printing paper of good quality.

At BHS, we have the experience and performance track record in delivering very large volume orders to overseas as well as to meet local demands of established magazine publishers. We deliver over 30 magazine titles every month.

BHS BOOK PRINTING SDN BHD

Title: In Trend Sept 2010

(719660-W)

Lot 4, Lorong CJ 1/1 B, Kawasan Perindustrian Cheras Jaya, 43200 Cheras, Selangor. Malaysia.Tel: (+603) 9076 3399 (Hunting line) Fax: (+603) 9074 7573

Email: [email protected] Website: www.bhs.my

tel:+603) 9076 3399

tel:+603) 9074 7573


http://www.bhs.my/


Age 54, Female, Malaysian, is the Personal Assistant to Koo Thiam Yoong, our Executive Director. She has been with our Group for more than 33 years. She joined our Group after her STPM in 1983 as a Layout Artist for a year. She was then transferred to work as an Editorial Assistant. She remained in the job for the next seven years until she was promoted as Personal Assistant to the former Managing Director. She assisted the former Managing Director in the implementation of the management plans of our Group. She is responsible for the management of all overseas tenders and overseas customer correspondences as well as liaising with our overseas suppliers. She is also the Human Resource Manager who manages our staff payroll and recruitment of our Group. In addition, as a Prepress Manager, she monitors and oversee our Prepress work flow using CTP (Computer to Plate) technology to prepare the materials for printing.

16 Profiles of Key Management Team

Group Accountant

Personal Assistant to Executive DirectorHuman Resource ManagerPrepress Manager

Senior Sales Manager

Koo Thiam Yen

Liew Yew Foong

Age 62, Male, Malaysian, is our Group Accountant since 2007. He has been a Member of the Malaysian Institute of Accountants since 1992 and a Member of the Association of Chartered Certified Accountants since 1985. He started his professional career in Chelepis & Co, London in 1982 as an Accounts and Audit Clerk. He then joined Bright Grahamme Murray & Co, London as an Audit Senior in 1983 prior to joining KPMG, London in 1985 as a Tax Senior. He was then promoted to the position of Tax Manager in 1988. He subsequently returned to Malaysia in 1992 and was attached to E & Y as a Tax Manager. He then joined TA Securities Berhad in 1994 as a Dealer’s Representative. In 2001, he moved to Shanghai, China and was attached to Shanghai Jilong Consulting Co Ltd and Wujiang Hongdu Copper Co Ltd before returning to Malaysia to work as a freelance consultant in 2004. He brings with him more than 22 years of experience in consulting, financial accounting, taxation and corporate finance. His area of responsibilities includes overseeing the financial, and accounting taxation aspects of our group. Koo Thiam Yen is a brother of our Executive Director, Koo Thiam Yoong.

Aged 69, Male, Malaysian, is our Senior Sales Manager and has been with our Group for more than 41 years. He began his career as a Sales Representative in 1969 for Book Distributors Sdn Bhd. He then left to join our Group in 1975 to assume the same position and was subsequently promoted as a Sales Supervisor in 1980. He was then promoted to his present position in 1990 and his current responsibilities include managing the sales and marketing team and ensuring that sales targets are achieved. He is also responsible for the marketing and sales of our Group’s printing services overseas especially in the African market which he has vast knowledge and experience. He attends the annual Frankfurt Book Fair as part of the marketing and sales activity.

Thirugnana Sambatham


(continued)

Aged 55, Female, Malaysian, is our Senior Manager of Operations. She is in charge of the

day to day operations of the Printing business. She has been with our Group for more than

32 years. She joined our Group in 1985 as a Clerk in Sistem and steadily moved up the ranks

to Manager in our Group in 1991. Prior to joining our Group, she was previously attached

to Jemco Sdn Bhd as a Clerk from 1980 to 1985. She now manages the printing production

with the assistance of the Production Manager, Production Executive and Senior Operators.

In addition, she manages the sourcing of paper as well as monitors our Group’s paper stock

level. She is also responsible in liaising with the printing business’s suppliers and customers.

Notes: 1. None of the above personnel has any family relationship with any director and/or major shareholders of the Company

except as disclosed above for Koo Thiam Yen.

2. None of the above personnel has any conviction for offences other than traffic offences in the past 5 years and none of them has any public sanction or penalty imposed by the relevant regulatory bodies during the financial year.

3. None of the above personnel has any conflict of interest with the Company.

Senior Manager

Project Director

Vivian Yat

Oh Kim Heng

Age 52, Male, Malaysian, is our Project Director who joined our Group in 2014. He

holds a Diploma in Building Technology (TARC). He has been involved with the project

undertaken by Nextgreen Pulp and Paper Sdn Bhd in setting up a Pulp and Paper mill.

Before joining us, Mr Oh was actively involved in the construction industry over the past

26 years; he was overall in charge of the contracts management and administration and

procurement of materials for the projects undertaken which included the preparation of

feasibility study, preliminary costs estimates, cost planning and analysis, tender pricing,

projects budgeting, cashflow projection, main and sub-contract agreements, cost control,

monitoring of variation claims, client’s payment certifications and finalisation of accounts.

In addition, he was also involved in sourcing and procurement of the right materials for

the projects and all necessary forwarding arrangements and assist in the bank financing

applications of the projects undertaken. The projects which he was involved included

hospital, industrial buildings, residential developments, shopping complexes and colleges

and universities.



A. Overview of Group’s Business and Operation

Nextgreen Global Berhad (“NGGB”) (formerly known as BHS Industries Bhd) through its subsidiary companies have been involved in the printing and publishing business since it was listed in Bursa Malaysia in 2007. However,

in 2014 there was a change of major shareholder who brought the green technology into the Group. This technology is a breakthrough and it is able to convert the empty fruit bunches (“EFB”) of palm oil tree into pulp and paper.

In 2015, the Group obtained the approval of the shareholders to diversify its business activities to include the manufacturing of renewable pulp and paper products. Initially, the Company intended to build a plant with a production capacity of 10,000 metric ton. This fits well with the existing business of the Group as the imported paper which would otherwise be used by the printing business would be replaced with the paper produced by its mill. Any excess can be sold in the market.

In 2016, the Pahang State Government approved and granted Ultimate Ivory Sdn Bhd, a wholly owned subsidiary of NGGB, 410 acres of land in Kg. Paloh Hinai, Mukim Lepar, Daerah Pekan, Pahang for development into Green Technology

Park, Pekan (“GTP”). In the same year, the shareholders of NGGB approved the diversification of NGGB’s core business to include the construction, development

and management of Green Technology Park and other construction and property development activities.

Principal activities of our Group

The Group has three core business activities. First the printing business. Second,

the developer for industrial park and third, the


manufacturer of renewable pulp and paper products. During 2018, only first and second businesses are operational and the third business’s factory is at an advanced stage of construction. Part of the pulp making machinery has been delivered to the factory site and it is expected that the factory and the plant will be ready for production in April 2019.

Printing business

The printing factory is located at Lot 4, Lorong CJ 1/1B, Kawasan Perindustrian Cheras Jaya, 43200 Cheras, Selangor. The factory was bought in Dec 2014 and it was extensively renovated to house the printing business. Sales amounted to RM26.81 mi l l ion made-up of RM16.81 million (62.7%) local and RM10 million (37.3%) overseas were generated in the financial year ended (“FYE”) 30 June 2018.

Local sales comprised mainly magazines, leaflets and educational books whereas overseas sales were primarily educational books. In 2018, the print

orders from the overseas’ Government started to resume and the local sales also picked up mainly for the educational books printing. These help increased the sales revenue to RM26.8 million from RM19.7 million.

Industrial Park Developer and Manager

In 2016, the Pahang State Government approved and granted 410 acres of land in Pekan to Ultimate Ivory Sdn Bhd, a wholly owned subsidiary of NGGB. The entire areas have been earmarked as GTP. The Company planned to develop the industrial park in five phases over a period of 5 years. First phase is for the construction and development of two plants and these are being constructed. Initially, under a Memorandum of Agreement dated 1 November 2016 entered into between China Nuclear Industry Huaxing Construction Co Ltd (“CNIHCC”) and the



(continued)

Company, Second and Third phases were planned for cooperation and development with CNIHCC. However, on 24 July 2018, the Company announced the termination of the Memorandum of Agreement with CNIHCC. On 16 October 2018, the Company secured a new investor, Asia Capital Investment Fund (“ACIF”) who had agreed to invest RM400 million into several special purpose vehicle companies wholly owned by NGGB ultimately. The invested funds are for projects based in Green Technology Park (“GTP”) in Pekan as well as in GTP Johor and GTP Sarawak. These funds will provide working capital for the projects and also cover other operational costs for the projects.

During the year, the Company had developed a piece of land measuring 6.88 acres for disposal to Dawei Fertilizer Sdn Bhd for a sale value of RM3 million for the construction and building of a fertilizer plant.

B. Review of Financial Results and Financial Condition

Printing Activity

For FYE 30 June 2018 the printing activity generated sales of RM 26.81 million compared with the preceding year of RM19.84 million. It had increased its revenue on both local and overseas sales from RM13.1 million to RM16.7 and from RM6.75 million to RM10.12 million respectively. Although the increase of RM6.97 million representing 35% increase over last year, it still incurred a loss after tax of RM0.5 million compared with a loss of RM8.7 million in FYE2017.

The Group incurred Loss After Tax of RM1.77 million compared with the preceding year loss of RM10.1 million. A higher revenue from printing activity, the recovery of debts of RM3.1 million and the profits arising from the disposal of a subsidiary of RM0.77 million have contributed to a lower loss in the year. The other businesses’ pre-operating expenses of RM1.2 million were incurred.

The finance costs incurred for the current year were RM0.34 million compared with the preceding year of RM0.41 million. The improvement was due to a lower term loan interest.

Park Development and Management Activities

For the FYE 30 June 2018, the Group was able to dispose of a piece of developed land measuring 6.876 acres to Dawei Fertilizer Sdn Bhd for a revenue of RM3 million. This contributed a profit of RM0.87 million to the Group. In addition, Ultimate Ivory Sdn Bhd enjoys a 10 year 100% tax exemption on the profits arising from the sales of the developed land subject to certain conditions.

Land Held for Property Development

For the FYE 30 June 2018, the accounts show that the Group has a piece of 99 year leasehold land measuring 16.225 square metres at a cost of RM6.78 million in the Republic of Palau. This land is earmarked for development in the near future.


Property Development Costs

During the year a long term leasehold land of RM1.23 million and development costs of RM10.29 million were reclassified to Property Development Costs from Land Held for Property Development. The development cost incurred in the year was RM11.39 million and the cost of land and development expenses related to the property disposed of were RM0.99 million leaving the carrying amount of property development costs of RM21.92 million. At the year end, the construction was at an advanced stage of construction and it is expected that the pulp and paper factory will be ready for production in April 2019.

Inventories

The inventories comprised mainly of paper of RM5.8 million, printed books of RM1.4 million and partly printed books of RM1.5 million. Compared the inventories with FYE 30.6.2017, it had remained stable at RM8.7 million despite 35% higher sales in the year.

Trade receivable

The trade receivable for FYE 30.6.2018 was RM15.3 million compared with FYE 2017 of RM18.3 million, a reduction of RM3 million despite increased revenue of RM6.98 million. This would mean that the Group was able to improve on the collectability of the debts and also to recover the RM3.1 million debts which were provided in the previous year.

During the year, our main export market remained a tough market for collection. However, the Group only dealt with established publishers which have a long relationship with the Group with proven reliability for payments. Other receivables, deposits and prepayments

There was a decrease of RM1.85 million other receivables, deposits and prepayment in the FYE 30.6.2018 over that of FYE 30.6.2017. The deposit of RM4.1 million paid for the construction and development cost had been expended and included on the property development costs. In addition, a deposit of RM2.1 million for the acquisition of land together with the disposal proceeds of an associate of RM1 million were included under this heading. There was no movement in the year on the deposit paid for the purchase of plant and equipment of RM28.4 million.

Cash and Bank Balances

Cash and bank balances have further been reduced from RM1.49 million in 2017 to RM0.6 million in 2018. Part of the cash was spent on development of land and deposits for the plant and machinery. There is a risk that the Group may encounter cash flow difficulty if the situation persists.

To improve the cash flow, the Group continues to lure potential buyers and sell developed land at GTP, monitor the collection of old and new debts from overseas and local customers to ensure that the credit periods allowed have been adhered to, manage and reduce the stock holding to a level to ensure production is smooth and make full use of the credit period extended by trade creditors. As the Group had a low gearing of 0.045 times in 2018 compared with 0.052 times in 2017, it is acceptable for the Group to increase bank borrowings without any undue risk.

During the year the Group had realised proceeds of RM3.9 million from the resale of treasury shares in the open market. It may also consider releasing the balance of the treasury shares to the market as and when it deems appropriate.



(continued)

C. Review of Operating Activities

Printing Business

As noted above, the sales of printing business had increased from RM19.84 million in FYE 2017 to RM26.81 in FYE 2018. The increased sales of RM6.97 million were insufficient to bring about an economy of scale in production and the printing activity made a loss of RM0.5 million.

For the first time in 3 years, the print orders resumed by the overseas’ government in 2018 were not substantial as expected, nevertheless it had contributed to an increased revenue of RM3.37 million together with increased local sales of RM3.6 million giving a total increase of RM6.97 million.

It is expected that the orders from overseas will improve further in FYE 2019 because of higher government orders and also the positive enquiries arising from the other overseas markets’ orders. In addition, the Group has also aimed to improving its presence at local market to boost sales.

Industrial Park Developer and Manager

The Pahang State Government approved and granted 410 acres of land in Pekan to NGGB Group. The land is designated as Green Technology Park Pekan. During the year, the Group developed a piece of land measuring 6.876 acres and sold it to Dawei Fertilizer Sdn Bhd for a profit of RM0.87 million. The Group is also developing a piece of land measuring about 14 acres for use by its Paper and Pulp factory.

Following the termination of the Memorandum of Agreement with CNIHCC, the Company had on 16 October 2018 entered into an Investment Agreement with ACIF to develop Phase 2 development in GTP Pekan which entailed the construction and development of pulp and paper mill with production capacity of 100,000 metric tons of box liner paper and pulp and paper mill with production capacity of 120,000 metric tons of corrugated paper using our licensed green technology. The investments by ACIF will also cover GTP Johor project and GTP Sarawak project which are currently in negotiation stage.

D. Anticipated or Known Risks

The Group like any other businesses is subject to prevailing economic conditions and uncertain market forces. A number of these potential risks and uncertainties that could materially and adversely impact on the Group’s performance and financial results are as follows:

Foreign exchange risk

As the Group operates internationally and is exposed to the risks of fluctuations of the foreign currency. The foreign denominated assets and liabilities together with the expected cash flow from purchases and sales, give rise to foreign exchange exposures. Any significant fluctuations in the exchange rate may have a material impact on the Group’s performance.

However, the risk of exchange fluctuation has to a certain extent been mitigated by the natural hedge where import of purchases using foreign currency trade loans are settled in foreign currency derived from export proceeds. In addition, our management is constantly monitoring our Group’s foreign exchange exposure and will take the necessary measures to minimise the exposure.


Single country risk

The Group’s exports are mainly to a single country. As we had experienced, when a country‘s economy was affected, the sales revenue dropped substantially and it was not possible to immediately replace the lost sales with sales from other sources. This gave rise to a material adverse impact on the Group’s results.

The Group is taking the following steps to overcome the risks of reliance on a single country’s sales:

- diversifying sales to other countries and continue to explore new markets;- strategize to increase local sales;- increase the Group’s revenue base by increasing other sales products.

Retention of Key Personnel and Experienced Workforce

Any successful company would rely on its key personnel and experienced workforce to attain its goal. Without an exception, our Group also rely on key personnel and experienced staff to drive its operations into profitability and also to drive its newly diversified businesses to succeed. A loss of certain key personnel may have an adverse impact on the performance of the Group.

The Group has in place competitive remuneration packages, training, conducive working environment, ESOS for its employees and also has available career advancements within the Group.

E. Forward-Looking Statement

Possible Trend and Outlook

Printing business has always been very competitive and the Group relied on export sales to boost its revenue. The overseas’ Government’s orders resumed in 2018 after an absence of 3 years were not substantial as expected.

The Group had taken steps to improve its sales locally and also to explore other overseas markets to reduce over reliance on a single country for orders. For these, it has achieved some measure of success. It will continue its effort to further diversify its customer base.

For FYE 2018 the Group made a profit of RM0.87 million on the disposal of a piece of developed land to Dawei Fertilizer Sdn Bhd. The Group will continue to seek investors who are interested to pursue green projects to be located in GTP Pekan.

The third business activity of the Group, pulp and paper manufacturing is expected to come into production in April 2019. The pulp and paper supply chain in Malaysia comprised both domestic and international elements. However, despite a large forest resource, the majority of virgin fibre inputs in the form of pulp are imported (BAC Report 2017). The consumption of paper in Malaysia remained higher than the production, therefore, the Group’s product will first start with the local market.

The Phase 2 projects for the production of 100,000 metric tons of box liner paper and 120,000 metric tons of corrugated paper have attracted overseas potential customers to visit our factory site to learn more of our products. The Group had rounds of discussion recently with potential customers from Japan and China. It is the first pulp and paper plant the Group will install and commission in April 2019. It is possible that the Group will take longer than expected to undertake the testing to achieve a prescribed standard and quality as required by its potential customers. Moreover, the potential customers may not result in eventual sales.

Dividend Policy

As the Group is at the stage of developing new business sources and the cash generated from the existing business is ploughed back into the business. Therefore, for FYE 2018 the Group will unlikely be able to declare and pay any dividend. However, the Group will review its dividend policy as and when the circumstances permit.

A N N U A L R E P O R T 2 0 1 8

as at 30 June 2018


This Corporate Governance Overview Statement is presented pursuant to Paragraph 15.25(1) of the Main

Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”). The objective of this statement is to provide an overview of the application of the corporate governance practices of the Group during the financial year ended 30 June 2018 with reference to the principles of Board Leadership and Effectiveness, Effective Audit and Risk Management and Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders set out in the latest Malaysian Code on Corporate Governance (“MCCG”).

The Board has also provided specific disclosures on the application of each Practices in its Corporate Governance Report (“CG Report”). The CG Report was announced together with this Annual Report of the Company which could be obtained by accessing this link www.nextgreenglobal.com. Shareholders are advised to read this overview statement together with the CG Report.

Overall the Board is of the view that the Company has, in all material aspect, complied with the Principles and Practices as set out in the MCCG. The explanation for the departure of the MCCG practices, if any are reported in the announced CG Report.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

(I) BOARD RESPONSIBILITIES

The Board assumes full responsibilities of the overall performance of the Group. In discharging their fiduciary responsibilities, the Board sets the business direction and overseeing the conduct of the Group based on the periodic performance of the Group reported by management in the quarterly financial results.

Executive Directors are responsible to the Board for implementing operational and corporate decisions while the Non-Executive Directors are responsible for providing independent views, advice and judgment in consideration of the interests of

shareholders at large in order to effectively check and balance the Board’s decision-making process.

The Chairman provides leadership at Board level, chairing the meetings of the Company and the Board, represents the Board to shareholders and together with the Board, reviews and approves the strategic objectives and policies of the Group. The position of the Chairman is held by an Independent Director.

The Board has formalised and adopted its Board Charter (“Charter”) and has done a review of its Charter before issuing of this Statement. The Charter is available for reference at the Company’s website at www.nextgreenglobal.com

Key matters reserved for the Board’s approval include business plan, annual budget, dividend policy, business continuity plan, new issues of securities, business restructuring and disposal and acquisition of assets/ investments.

The Board Committees, namely Audit Committee, Nominating Committee and Remunerat ion Committee are entrusted with specific responsibilities to oversee the Group’s affairs with authority to act on behalf of the Board and operate within their respective Terms of Reference. Accordingly, the ultimate responsibility for the final decision on all Board Committees’ matters lie with the Board.

The Board is provided with and has access to all Company’s information to enable it to discharge its duties. The management is invited to attend the Board and Board Committees’ meetings and to brief and provide explanation to the directors on the operations in the Group. The Board is also briefed by the Company Secretary, External Auditors and the Internal Auditors on the changes in corporate regulatory requirements. In addition, the Board collectively could engage independent professionals when necessary to seek their advices in furtherance of their duties.

Procedurally, when external advices are necessary, the director who intends to seek such consultation or

http://nextgreenglobal.com/

http://www.nextgreenglobal.com/

A N N U A L R E P O R T 2 0 1 8

advice shall notify the management or Secretary of such request. Upon obtaining the Board Chairman’s or Managing Director’s approval, the director can engage the services of the adviser and the fee for the independent professional advice shall be borne by the Company. All advices and opinions from the advisers shall then be reported to the Board.

The Board is assisted by two (2) qualified and competent Company Secretaries. Both Company Secretaries are members of Malaysian Institute of Chartered Secretaries and Administrators. All Directors have unrestricted access to the advice and services of the Company Secretaries. The appointment and removal of Company Secretaries or Secretaries of the Board Committees can only be made by the Board.

Further information of the roles and responsibilities carried out by the Company Secretaries are set out in Practice 1.4 of the Company’s CG Report.

The Company has defined its Code of Conduct and Ethics (which is included in its Board Charter) and whistleblowing policy addressing, inter-alia, the following subjects:

• Fraud;

• Conflict of interest; • Insider trading; • Sexual harassment; • Misuse of confidential information; • Non-compliance of regulatory requirements; and • Concealment of any or a combination of the

above.

For internal whistle blowing, the whistle blower can refer his/ her matters to the immediate superiors, Managing Director, Audit Committee Chairperson and Board Chairman. For external whistle blowing, the external whistle blower is advised to refer the matters to same parties except for the immediate superior.

The Board meets at least every quarter and on other occasions, as and when necessary, to approve quarterly financial results, statutory financial statements, the Annual Report as well as to review the performance of the company and its operating subsidiaries, governance matters, related party transactions, major acquisition or disposal of assets and other business development matters.

During the financial year ended 30 June 2018, five (5) Board meetings were held. The details of attendance by the Board members during their tenure of office are as follows:

Directors No. of meetings attended by Directors

Dato’ Sohaimi Bin Shahadan [Independent Non-Executive Chairman] 5 out of 5

Dato’ Lim Thiam Huat [Managing Director] 5 out of 5

Mr. Koo Thiam Yoong [Executive Director] 5 out of 5

Datuk Lee Hwa Cheng [Executive Director] 4 out of 5

Datuk Lawrence Yeo Chua Poh [Executive Director] 4 out of 5

Madam Chew Yuit Yoo [Senior Independent Non-Executive Director] 5 out of 5

Madam Thiang Chew Lan [Independent Non-Executive Director] 5 out of 5

Dato’ Dr. Koe Seng Kheng [Independent Non-Executive Director] 5 out of 5

A N N U A L R E P O R T 2 0 1 8


(continued)

Board papers are circulated to the Board members prior to the Board meetings so as to provide the Directors with relevant and timely information to enable them to deliberate issues raised during Board meetings more effectively. The Company Secretary had attended all the Board and Board Committees meetings.

The Directors recognise the needs to attend training to enable them to discharge their duties effectively. During the financial year and up to the printing time, the Directors have participated in relevant training programmes to enhance their skills and knowledge and to keep abreast with the relevant change in laws, regulations and business environment. The trainings attended by the Directors are listed below:

Director Training Attended Date

Dato’ Sohaimi Bin Shahadan 1. MFRS 9 Financial Instruments 14 July 2018

Dato’ Lim Thiam Huat 1. Wood and biofiber international conference 21-22 November 2017 2. Industrial Park forum 8 March 2018 3. Malaysia International Agriculture 29 September 2018 Technology Exhibition 4. Tokyo International Packaging exhibition 2-5 October 2018 2018 5. South China Morning Post’s China 10 October 2018 Conference 6. MFRS 9 Financial Instruments 14 July 2018

Koo Thiam Yoong 1. MFRS 9 Financial Instruments 14 July 2018

Datuk Lee Hwa Cheng 1. MFRS 9 Financial Instruments 14 July 2018

Datuk Lawrence Yeo Chua Poh 1. MFRS 9 Financial Instruments 14 July 2018

Chew Yuit Yoo 1. Market Professional Enrichment Program 14 April 2018 2. MFRS 9 Financial Instruments 14 July 2018 3. Battling Money Laundering & Terrorism 19 May 2018 Financing in Malaysia

Thiang Chew Lan 1. MFRS 9 Financial Instruments 14 July 2018

Dato’ Dr. Koe Seng Kheng 1. MFRS 9 Financial Instruments 14 July 2018

The training needs of each Director would be assessed and proposed by the individual Director. Each Director determines the areas of training that he may require for personal development as a Director or as a member of the Board Committees.

A N N U A L R E P O R T 2 0 1 8

(II) BOARD COMPOSITION

As of the date of this Statement, the Board consists of ten (10) members, comprising five (5) independent directors and five (5) executive directors. The Board composition complied with the MMLR that requires at least two (2) or one-third (1/3) of the Board members to the independent directors. The Company also complied with the practice recommended in the MCCG having at least 50% independent directors on Board. The Board Chairman is an independent director.

Nonetheless, all board members are mindful of ensuring the objectivity and fairness in board’s decision making. The Board also has identified Madam Chew Yuit Yoo to act as the Senior Independent Non-Executive Director, serving as an alternative for shareholders to convey their concerns and seek clarifications from the Board through an independent director.

The Nominating Committee is established and maintained to ensure that there are transparent procedures for selection and appointment of new directors to the Board and assessment of Board’s, Board Committees’ and individual directors’ performance. The Nominating Committee is chaired by an Independent Non-Executive Director. The Nominating Committee considers recommendations from existing board members, management, major shareholders and third-party sources to identify suitably qualified candidates, when necessary before recommending to the Board for further deliberation.

During the financial year, the Nominating Committee conducted a meeting. The results of the evaluation of the Board’s and individual board members’ performances; the Board’s assessment of the Board Committees; the independence of the Independent Directors and explanation for retaining an Independent Director serving more than nine (9) years are reported in the Nominating Committee Statement of this Annual Report.

The appointment of Board is based on objective criteria, merit and with due regard for diversity in skills, experience, age, cultural background and gender.

(III) REMUNERATION

The present members of the Remuneration Committee are:

Chairperson : Thiang Chew Lan (Independent NonExecutive

Director)

Members : Chew Yuit Yoo (Senior Independent

NonExecutive Director)

: Dato’ Dr. Koe Seng Kheng (Independent Non-Executive

Director)

: Dr. Hidayah Binti Ariffin (Independent Non-Executive

Director) (appointed as member on 17

October 2018)

During the financial year ended 30 June 2018, one (1) Remuneration Committee meeting was held and attended by all members.

The main function of the Remuneration Committee is to recommend to the Board, the remuneration packages of Managing Director and Executive Directors of the Group. The remuneration packages of Non-Executive Directors are determined by the Board as a whole.

The Remuneration Committee considers the principles recommended by the Code in determining the directors’ remuneration, whereby, the remuneration of the executive directors is designed to link rewards to the Group’s performance whilst the remuneration of the non-executive directors is determined based on their experience and the level of responsibilities assumed.

The amount of Directors’ fee and benefits payable to the non-executive directors proposed for the shareholders’ approval at the forthcoming 13th AGM is RM350,000. The foregoing mandate is for payment of fees for the period from the 13th AGM to the date of the next AGM to be held in 2019. In addition,

A N N U A L R E P O R T 2 0 1 8


(continued)

shareholders’ approval will also be sought at the 13th AGM for the payment of fees in excess of the current approved limit approved by the shareholders

at the 12th AGM held last year. Explanation for the proposed resolutions were set out in the Notice of 13th AGM enclosed in this Annual Report.

The details of Directors’ remuneration for the financial year ended 30 June 2018 are as follows:

RECEIVED FROM THE COMPANy

Director Directors’ Meeting Salaries Bonus Benefitsin- Other fee Allowances kind Emoluments

Dato’ Dr. Haji Sohaimi 120,000 - - - 7,200 - Bin Shahadan

Dato’ Lim Thiam Huat* - - 336,000 - 35,200 -

Koo Thiam Yoong* - - 201,600 - 9,900 -

Datuk Lee Hwa Cheng - - 107,520 - - -

Datuk Lawrence Yeo - - 134,400 - - - Chua Poh

Dato’ Dr. Koe 42,000 5,000 - - - - Seng Kheng

Chew Yuit Yoo 47,460 5,000 - - - -

Thiang Chew Lan 42,000 5,000 - - - -

RECEIVED FROM THE GROUP

Director Directors’ Meeting Salaries Bonus Benefitsin- Other fee Allowances kind Emoluments

Dato’ Dr. Haji Sohaimi - - - - - - Bin Shahadan

Dato’ Lim Thiam Huat* - - - - - -

Koo Thiam Yoong* - - - - - -

Datuk Lee Hwa Cheng - - - - - -

Datuk Lawrence Yeo - - - - - - Chua Poh

Dato’ Dr. Koe - - - - - - Seng Kheng

Chew Yuit Yoo - - - - - -

Thiang Chew Lan - - - - - -

* The Directors are also the key Senior Management of the Company.

A N N U A L R E P O R T 2 0 1 8

(continue)PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

I. AUDIT COMMITTEE

The Audit Committee members are financially literate and are able to understand matters under the purview of the Audit Committee including the financial reporting process. Presently, the members of Audit Committee comprising fully Independent Non-Executive Directors and the Chairman of the Audit Committee is not the Chairman of the board.

The Audit Committee take cognizance of its responsibility to review the adequacy and integrity of financial information by considering the results of both the Internal and External Auditors’ findings and reports as well as management actions to improve its systems of internal control. The summary of work of Audit Committee is reported in the Audit Committee Report of this Annual Report.

II. RISK MANAGEMENT AND INTERNAL CONTROL

The Board as a whole responsible for the overall and oversight of risk management in the Group covering the system of risk management and internal control for financial, operational and compliance while the Executive Directors together with the senior management team are primary responsible for managing risks in the Group.

Further details of the Group’s systems of risk management and internal control are reported in the Statement on Risk Management and Internal Control of this Annual Report. The Board has also commented in the said statement that they are satisfied with the effectiveness and adequacy the existing level of systems of risk management and internal control. Going forward, the Board will review, adopt, implement and disclose an internationally recognised risk management framework; and define its risk policy and risk appetite.

The Internal Audit Function is carried out by IA Essential Sdn. Bhd. an internal audit consulting firm. The internal audit function is headed by a Director who is assisted by a manager and supported by an audit executive. Further details of Internal Audit Function are reported in the CG Report.

PRINCIPLE C: INTEGRITy IN CORPORATE R E P O R T I N G A N D M E A N I N G F U L RELATIONSHIP WITH STAKEHOLDERS

I. COMMUNICATION WITH STAKEHOLDERS

The Board places importance in ensuring disclosures made to shareholders and investors are accurate, clear, timely and comprehensive as they are critical towards building and maintaining corporate credibility and investor confidence. It is believed that clear and consistent communication with investors promotes better appreciation of the Company’s business and activities, reduces share price volatility, and allows the Company’s business and prospects to be evaluated fairly.

The Group has also leveraged on its corporate website to communicate, disseminate and add depth to its communication with the public.

II. CONDUCT OF GENERAL MEETINGS

General meetings are an important avenue for Board Members to engage with shareholders. Shareholders are provided with the opportunity to seek clarification on the Group’s strategy, performance and major developments during the general meetings. Shareholders’ right relating to general meeting is also published on the Company’s website at www.nextgreenglobal.com

The Board has adopted the recommendation of the MCCG for the Notice of the 13th AGM to be given to the shareholders at least twenty-eight (28) days prior to the meeting. The Board encourages shareholders to participate in the questions and answers session and to interact and feedback to the Chairman for opinions or concerns during the AGM. The Chairman and the respective Chairmen of the Board Committees as appropriate will respond to questions raised by the shareholders during the AGM. The Board had also identified Madam Chew Yuit Yoo to act as the Senior Independent Non-Executive Director to provide shareholders and investors an alternative way to convey their concerns and seek independent view.

The Company may respond to meetings with institutional shareholders, analysts and members of the press to convey information regarding the Group’s performance and strategic direction as and when requested.

Shareholders who are unable to attend the AGM are advised that they can appoint proxies to attend and vote on their behalf.


A N N U A L R E P O R T 2 0 1 8


(continued)

The utilisation of proceeds as at 10 October 2018 was as follows:

Proposed Balance Actual Intended to be Timeframe Utilisation Utilisation Utilised for Utilisation (RM’000) (RM’000) (RM’000)

Acquitsition of Land 7,000 7,000 – Within 24 months

Purchase of plant & machinery 33,641 27,404 5,237 Within 24 months & other ancillary facilities Estimated expenses in relation to 1,000 1,000 – Immediate the Corporate Exercise

Total 41,641 35,404 5,237

DIRECTORS’ RESPONSIBILITy STATEMENT

The Directors are responsible for ensuring that:

(i) The annual audited financial statements of the Group and of the Company are drawn up in accordance with applicable Financial Reporting Standards, the provisions of the Companies Act 2016 and the MMLR so as to give a true and fair view of the state of affairs of the Group and of the Company for the financial year, and

(ii) Proper accounting and other records are kept which enable the preparation of the financial statements with reasonable accuracy and taking reasonable steps to ensure that appropriate systems are in place to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

In the preparation of the financial statements for the financial year ended 30 June 2018, the Directors have adopted appropriate accounting policies and have applied them consistently in the financial statements with reasonable and prudent judgments and estimates. The Directors are also satisfied that all relevant approved accounting standards have been followed in the preparation of the financial statements.

OTHER COMPLIANCE INFORMATION

1. AuditandNon-AuditFees The amount of audit fees incurred for statutory

audit services rendered to the Group by the audit

external auditors for the financial year ended 30 June 2018 amounted to RM155,409 which RM40,000 was incurred by NGGB.

The amount of the non-audit fees incurred for services rended to Nextgreen Global Berhad by the external auditors for the financial year ended 30 June 2018 amounted to RM14,109.

2. Material contracts

There is no material contract entered into by the Company or its subsidiaries involving directors’ and major shareholders’ interest which was entered into since the end of the previous financial year and/or still subsisting at the end of the financial year.

UTILISATION OF PROCEEDS FROM RIGHTS ISSUE

The Company raised a total g ross proceeds of RM41,640,984 from the Rights Issue exercise with the allotment and issuance of 99,145,199 ordinary shares of RM0.25 each at an issue price of RM0.42 on 19 October 2015. The Company had on 17 October 2018 announced that the timeline to utilisation of the remaining proceeds raised from the Right Issue exercise allocated for purchase of plant & machinery and other ancillary facilities be extended for another year till 22 October 2019.

A N N U A L R E P O R T 2 0 1 8


The Group presents its first Sustainability Statement in accordance with the requirements as set out in Practice Note 9 of the Main Market Listing Requirements. The Board acknowledges the evolving trend of stakeholders

reviewing not merely the financial performance of the Group but also the impacts the businesses have on the Economic, Environmental and Social (“EES”) risks and opportunities. In light of the wider focus, the Board when formulating policies and business strategies have leveraged and embedded sustainability in its decision making process so that it will bring long term benefits and business continuity.

1. GOVERNANCE STRUCTURE

The Board has the overall responsibility to ensure that it supports and integrates the recommended sustainability considerations in its decision. To achieve this, the Board has put in place a governance structure to identify, assess, manage and recommend

for adoption the sustainability matters as presented by the business. Therefore, it has delegated the task to an executive director who will head the Group’s Sustainability Drive. The executive director is assisted by a Risk and Sustainability Committee which comprised of the heads of various departments as follows:

Printing Business

2. SCOPE

This Sustainability Statement focuses on the printing business of the Group as the other businesses have yet to be in production and operation.

3. MATERIAL SUSTAINABILITY MATTERS

The objective of the Group is to focus on the sustainability matters that is most important to achieving the long term goal of the company. The Committee has identified through an assessment process the issues on EES affecting the business and

prioritise the materiality these have on the company and also the stakeholders. Once these have been identified, a list is submitted to the executive director for further deliberation.

The following sustainability matters are considered material both by the management and the stakeholders.

4. ECONOMIC ISSUES

4.1 Export Proceeds The Company has been exporting its products for

many years. It has contributed to the positive inflow

Board of Directors

Executive Director

Accounts (Head)Production (Head) Human Resource (Head)

Risk & Sustainbility Committee

A N N U A L R E P O R T 2 0 1 8

(continued)

of foreign currency and helped the country achieved a balanced of payment surplus.

4.2 Business Ethics and Transparency The Company cultivates a code of high ethics, integrity

and transparency in the conduct of its employees in discharging their duties and responsibility. It has always adopted zero tolerance policy towards corrupt practices which prohibit all employees directly or indirectly soliciting from and offering to any parties bribe or reward in relation to the dealings in the business of the Company.

The Company also provides a level playing field for its suppliers and business partners where they are selected solely based on merit of their products and services to promote fair competition and equal opportunity.

5. ENVIRONMENTAL ISSUES

The company has complied with the legal and regulatory requirements of the Department of Environment in respect of the disposal of waste generated from the production processes. Waste is separated into hazardous and non-hazardous, packed and stored away in a room and collected by a licensed agent under the Environment Quality Act 1974. Solid wastes are segregated into their respective categories before they are collected by the approved company for disposal or recycling.

The Company has also contracted with agents to collect waste paper, paper core, used plates for recycling.

6. SOCIAL ISSUES

The company pursues an employment policy of human rights and non-discrimination. It adheres to the minimum wage policy as implemented by the Government and complies with the Employment Act and Regulations. It also promotes workplace equality and diversity.

6.1 Safety and Health The Occupational Safety and Health Committee

continue to monitor the safety and health procedures are appropriately adhered to by all employees in the work place. During the year a 2-day course on safety was conducted for the benefits of its employees by an external company specialized in industrial safety and management. The training is titled “ Emergency Response Plan & Preparedness Combined Drill”.

6.2 Training and Skill Development The Company continues to upgrade its machinery

and software. This has provided on going personal improvement opportunities to our employees. The suppliers would organise and provide training to member of staff who have been selected to run the machine. Some staff were sent for external courses.

In addition, the production meetings are conducted regularly to deliberate and brief the employees on the job training to improve on the quality of the print products.

6.3 Staff Gathering and Lucky Draws The gathering is intended to promote staff mingling

and communication to provide a friendly workplace and conducive work environment.

7. OTHER SUSTAINABILITY ISSUES -DIVERSIfICATION Of CORE BUSINESS

The Group started off as a printing business and now has ventured into the production of renewable paper using oil palm biomass like empty fruit bunches. It has 410 acres land designated as Green Technology Park (“GTP”) Pekan. The masterplan of GTP is driven by the natural topography of the land. We maximise the usage of land, plan according to the land contour, design water flows with gravity from high level of wetlands to low level of lake and plan to put in mini hydro. During site cleaning, trees chopped are kept for producing fertilizer, large trees are still remained for landscaping. This green project with 410 acres of land will contribute in the reduction of deforestation, promote renewable energy in industrial use and reduce carbon emissions.

The factory is located on the 14 acres land and will commence production in April 2019. The project will contribute to a reduction of:

- deforestation; - green house effects on gas and carbon emission; - waste by using by-product to produce valuable

products; - reliance on fossil fuel for energy generation;

The project will reduce the import of paper for use locally and thereby save on the foreign currency and when the scale of the project gets bigger, it may even generate substantial foreign currency for the country in future in addition to providing many employment opportunities to Malaysian.


A N N U A L R E P O R T 2 0 1 8

33 Statement of Risk Management and Internal Control

as at 30 June 2018

This Statement of Risk Management and Internal Control is made in pursuant to Paragraph 15.26 (b) of

the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) with regard to the disclosure of the Group’s state of risk management and internal control. In making this Statement, the Board is guided by the “Statement on Risk Management and Internal Control – Guidelines for Directors of Listed Issuers” (“Guidelines”) issued by the Task Force on Internal Control with the endorsement of the Bursa Securities.

RISK MANAGEMENT

The Board acknowledges its overall responsibility for reviewing the adequacy and integrity of the Group’s systems of risk management and internal control, identifying principal risks and establishing an appropriate control environment and framework to manage risks.

Presently, the Group’s risk management continues to be driven by all Executive Directors and assisted by management. The Executive Directors and management are accountable to the Board for identifying, evaluating, managing, monitoring risks, and providing assurance to the Board that the processes thereof have been carried out as part of the Group’s operating and business management processes. External and relevant professionals would be drawn on to assist and provide advices to the management team when necessary. The Board will also deliberate the options for the international risk management framework and adopt a suitable framework for the Group going forward.

The key risk focus of the management in the forthcoming year is to improve the cash flows positions of the Group by[1]:

• Strengthening the credit control; • Exploring and securing new printing orders; • Generating profits from the disposal of developed

land at Pekan Green Technology Park; • Leveraging on its low gear position to seek financing

from financial institutions; • Releasing its treasury shares as and when appropriate

in the market; and • Seeking the shareholders’ approval for private

placement of shares.

INTERNAL CONTROLS

Apart from the above, the present key internal controls and review processes in the Group are as follows:

i. Management organization structure defining the management responsibilities and hierarchical structure of reporting lines and accountability;

ii. Limit of authority and approval facilitating delegation of authority;

iii. Periodic performance reports for the management monitoring and ensuring that the business operations are progressed in accordance with the objectives and targets;

iv. Preparation of annual sales forecast, budgeted profit or loss and cash flow projection for monthly monitoring and tracking of performance;

v. Provision of on-job training to employees in order to strengthen our controls on the business competitiveness and capability of our organisation; and.

vi. Financial exposure arising from burglary, consequential loss and fire are covered by appropriate insurance policies.

BOARD REVIEW MECHANISM

In order to ensure the objectivity of the review of the systems of risk management and internal control framework in the Group, the Audit Committee (“AC”) is instituted by the Board to undertake this oversight role.

The AC assesses the adequacy and effectiveness of internal controls based on the internal audit findings presented by the Internal Auditors. These reviews were done quarterly where the Internal Auditors will present their internal audit report to the AC and audit issues and action taken by management to address control deficiencies will be deliberated.

Management also supplements the Audit Committee review on control and risk assessment when presenting their quarterly financial performance and results to the

A N N U A L R E P O R T 2 0 1 8

Audit Committee. In this process, the Audit Committee will review and analyse the interim financial results in corroboration with management representations on operations, the performance of its subsidiaries vis-à-vis the risks and challenges in the business. As part of this process, AC also deliberates the integrity of the financial results, annual report and audited financial statements before recommending to the Board to be presented to the shareholders and public investors.

Annually, upon completion of audit, the External Auditors will report to the AC on their audit findings. As part of this review, AC will obtain feedback from the External Auditors on control deficiencies noted by them in the course of their statutory audit.

MANAGEMENT RESPONSIBILITIES AND ASSURANCE

In accordance to the Bursa’s Guidelines, management is responsible to the Board for identifying risks; implementing and maintaining sound systems of risk management and internal control and monitoring and reporting to the Board of significant control deficiencies and changes in risks that could significantly affect the Group achievement of its objective and performance.

Before producing this Statement, the Board has received assurance from Managing Director that, to the best of his knowledge that the Group’s risk management and internal control systems are operating adequately and effectively, in all material aspects.

BOARD ASSURANCE AND LIMITATION

The Board derives its comfort of the state of internal control and risk management of the Group from the following processes and information:

• Periodic review of financial information covering financial performance, quarterly financial results and key business indicators;

• Audit Committee’s review and consultation with the management on the integrity of the financial results, annual report and audited financial statements;

• Audit findings and reports on the review of the systems of internal control from the Internal Auditors; and

• Management assurance that the Group’s risk management and internal control systems have been operating adequately and effectively, in all material respects.

For the financial year under review, the Board is satisfied that the existing level of systems of risk management and internal control are effective to enable the Group to achieve its business objectives and there were no material losses resulted from significant control weaknesses.

The Board wishes to reiterate that risk management and internal control would be continuously improved in line with the evolving business development. However, it should also be noted that systems of risk management and internal control are only designed to manage rather than eliminate risks of failure to achieve business objectives. Therefore, these systems can only provide reasonable but not absolute assurance against material misstatements, frauds and losses.

R E V I E W O F S TA T E M E N T O N R I S K M A N A G E M E N T A N D I N T E R N A L CONTROL BY EXTERNAL AUDITORS

As required by Paragraph 15.23 of the MMLR, the External Auditors have reviewed this Statement. As set out in their terms of engagement, the procedures were performed in accordance with the Audit and Assurance Practice Guide 3 (“AAPG3”) [Previously known as “RPG5 (Revised) 2015”] issued by Malaysian Institute of Accountants. The External Auditors’ procedures have been conducted to assess whether the Statement on Risk Management and Internal Control is both supported by the documentation prepared by or for the Directors and appropriately reflects the process the Directors have adopted in reviewing the adequacy and integrity of the system of internal control for the Group. However, AAPG3 does not require the External Auditors to consider whether this Statement covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk and control procedures.

Based on their procedures performed, the External Auditors have reported to the Board that nothing has come to their attention which causes them to believe that this Statement is not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Guidelines, nor is it factually inaccurate.

This Statement on Risk Management and Internal Control was made in accordance with the approval of the Board on 17 October 2018.

34 Statement of Risk Management and Internal Control

(continued)

A N N U A L R E P O R T 2 0 1 8

The Board of Directors is pleased to present the Audit Committee Report for the financial year ended 30

June 2018.

COMPOSITION OF AUDIT COMMITTEE

Name of Director

Chairman: Chew Yuit Yoo Senior Independent Non-Executive Director

Members: Thiang Chew Lan Independent Non-Executive Director

Dato’ Dr. Koe Seng Kheng Independent Non-Executive Director

The Audit Committee (‘AC”) composition is in line with Para 15.09 of Main Market Listing Requirement (“MMLR”). As at the date of this Annual Report, the AC comprises three (3) members who are wholly independent and non-executive directors and the Chairperson of the AC is a fellow member of the Malaysian Institute of Accountants. Details of the members of the AC are contained in the Profile of Directors as set out on pages 12 to 15 of this Annual Report.

The AC conducted five (5) meetings during the financial year and these meetings were attended by all members of the AC.

TERMS OF REFERENCE

The Terms of Reference of AC are published on the corporate website of the Company at http://bhs.listedcompany.com/. for shareholders’ reference pursuant to Paragraph 9.25 of MMLR. These terms of reference were updated in accordance with the latest practices in the MCCG on the provisions of the composition requirements of AC members as well as the roles of AC Chair and members [1].

On 17 October 2018, the Nominating Committee had reviewed the performance of the AC and reported that

the performance of the AC and its members displayed commendable efforts and satisfactory. Accordingly, the terms of office of its members remained.

SUMMARY OF WORK

The work carried out by the AC in discharging its duties and functions with respect to their responsibilities during the financial periods were summarized as follows:

(a) Reviewed the unaudited quarterly financial results, cash flows and financial positions for each financial quarter by considering any significant transactions or changes in accounting that may impact the Group’s financial position and performance before submitting these interim financial statements to the Board for review and approval and announcement to the public;

(b) Reviewed the annual audited financial statement, auditors’ report and accounting issues arising from the audit of the financial year ended 30 June 2017 and discussed with Management and the External Auditors on the accounting principles and standards that were applied in the annual audited financial statements;

(c) Considered changes in and implementation of major accounting policies and practices to the Group; significant matters and unusual events or transaction highlighted by the External Auditors and how these significant matters were addressed including the basis for the exercise of judgement arising from the audit;(c)

(d) Reviewed the External Auditors’ Audit Progress Memorandum and deliberated the key audit observations and risks as well as key audit matters brought up by the External Auditors;

(e) Reviewed the External Auditors’ audit strategy and audit approach via Audit Planning Memorandum for 2018;

(f) Reviewed the control deficiencies noted and reported by the External Auditors in their management letter;

(g) Conducted private meeting session with the External Auditors without the presence of executive board members and management personnel to further discuss matters arising from audit and assess the assistance given by the Management to the External Auditors;


http://listedcompany.com/

A N N U A L R E P O R T 2 0 1 8

(h) Reviewed the performance, effectiveness and independence of the External Auditors and made recommendations to the Board on the appointment and remuneration of auditors including the position of non-audit services;

(i) Reviewed the progress of internal audit plan to ensure that the direction of the audit and risk assessment is appropriate to the environment in which the Group is operating;

(j) Reviewed the impact of the audit findings and the recommendations for improvement highlighted in Internal Audit Report presented by the Internal Auditors;

(k) Followed-up the status of past audit findings raised by the Internal Auditors to ensure the proposed action plans are implemented by the management; and

(l) Reviewed the Corporate Governance Statement, Audit Committee Report, and Statement on Risk Management and Internal Control for Board’s consideration and approval for inclusion in the annual report;

(m) Updated the quarterly status of related party transactions to ensure these transactions were transacted on an arm’s length basis and are not detrimental to the interests of minority shareholders; and

(n) Reported to the Board on matters addressed in the AC meetings.

(o) Reviewed and approved the Terms of Reference of AC aligned with the developments of MMLR and MCCG.

INTERNAL AUDIT FUNCTION

The MMLR provides that a listed company must establish an internal audit function which is independent of the activities it audits and reports directly to the AC.

The Group had established an internal audit function. This function is outsourced to IA Essential Sdn Bhd, an independent internal audit professional services firm. The primary responsibility of this internal audit function

is to assist the Board and the AC in reviewing the systems of internal control and providing recommendations to strengthen these systems.

The Internal Auditors have organized their work with reference to the principles of the international professional practice framework on internal auditing covering the conduct of the audit planning, execution, documentations, communication of findings and consultation with key stakeholders on the audit concerns. In order to ensure that the audit focus is on relevant and appropriate risk areas, the internal audit plan is developed in consultation with management taking into consideration the Group’s structure, concerns and the challenges faced. The proposed internal audit plan is presented to the AC for deliberation and approval before internal audit reviews are carried out.

Internal audit reviews are carried out quarterly in accordance with the internal audit plan approved by the AC. Prior to the presentation of report to the AC, comments from the management are obtained and incorporated into the internal audit findings and reports. The summary of work conducted and reported by the Internal Auditors to the AC during the AC’s meetings in the current financial year are as follows:

i. Evaluated the effectiveness of management control procedures and adherence to the operating instructions in property development of Perumahan Makmur Karak Setia Jaya;

ii. Conducted follow-up audits to ascertain status of management implementation of audit recommendations; and

iii. Identified, analysed and reported to the AC of the new corporate governance (“CG”) practices and the disclosure requirements in accordance with the latest Malaysian Code of Corporate Governance (“the new MCCG”).

iv. Identified and reported to AC the proposed internal audit plan for approval.

The Internal Auditors attended five (5) AC meetings during the financial year under review. The total cost incurred during the current financial year for the internal audit function of the Group is RM57,434.


(continued)

A N N U A L R E P O R T 2 0 1 8


The current members of the Nominating Committee are:

Chairperson : Chew Yuit Yoo (Senior Independent Non-Executive Director)

Member : Dato’ Dr. Koe Seng Kheng (Independent Non-Executive Director)

: Thiang Chew Lan (Independent Non-Executive Director)

The Terms of Reference of the Nominating Committee are available at the Company’s website at www.nextgreenglobal.com

The Nominating Committee assists the Board in reviewing the new candidate in terms of the candidates’ skill, knowledge, expertise and experience before recommending to the Board for decision. For assessment and selection of director candidate, consideration would be taken on the need to meet the regulatory requirements such as Companies Act 2016, the Bursa Malaysia Securities Berhad Main Market Listing Requirements (“Listing Requirements”) and other criteria such as:

• Age • Industrial experience, skillsets and knowledge • Academic qualification • Expected contributions to the existing and new

businesses • Expected enhancement to the board’s strength and

network

For appointment of Independent Directors, the Nominating Committee would also assess whether the candidate meets the requirements for independence based on criteria prescribed in the Listing Requirements.

The Nominating Committee is empowered to identify and recommend new appointments to the Board. The potential candidates may be proposed by existing directors, senior management staff, shareholders or third-party referral. Under normal circumstances, the Nominating Committee would review new board candidates proposed by the Executive Directors to fill vacancy arises from

resignation, retirement or any other reasons and make the recommendation to the Board thereon for decision. Based on the recommendation of the Nominating Committee, the Board would evaluate and decide on the appointment of the proposed candidate.

The Malaysian Code of Corporate Governance (“MCCG”) emphasises the importance of right board composition in bringing value to the Board deliberation and transparency of policies and procedures in selection and evaluation of board members. Upon receipt of the proposal, the Nominating Committee is responsible to conduct as assessment and evaluation on the proposed candidate. The assessment/evaluation process may include, at the Nominating Committee’s discretion, reviewing the candidate’s resume, biographical information, candidate’s qualifications and conducting background searches, etc.

The Board is supportive of gender diversity and encourages female participation in the board. Presently, out of the ten (10) board members, three (3) of the board members are female (i.e. 30% women directors).

In accordance with the constitution of the Company, all newly appointed Directors are subject to retirement by rotation and are entitled for re-election at the first annual general meeting after their appointment. Pursuant to Article 84 of the Company’s Constitution, at each annual general meeting one-third (1/3) of the Directors for the time being or if their number is not three (3) or a multiple of three (3), the number nearest to one-third (1/3) shall retire from office at least once in every (3) years but shall be eligible for re-election.

In recommending the Directors for re-election to the Board, the Nominating Committee would also refer to the individual Directors’ annual assessment result to ensure that feedback given and scoring achieved by the relevant directors who are retiring by rotation are satisfactory.

The Nominating Committee undertakes annual assessment to evaluate the performance of each individual Directors, the effectiveness of the Board and the Board Committees.

The effectiveness of the Board and Board Committees are assessed in the areas of board structure/mix, decision making and boardroom participation and activities, meeting

A N N U A L R E P O R T 2 0 1 8

administration and conducts, skill and competencies and role and responsibilities whilst the performance of the individual Directors is assessed in the areas of contribution and interaction with peer, quality of the input of the Director, understanding of role, etc.

Directors are given a performance assessment sheets (“PA Sheet”) for self and peer evaluation on Individual Director, Board, Audit Committee, Nomination Committee and Remuneration Committee to complete. Respective Directors will abstain from deliberation of his/her own appraisal.

Directors who are members of the Board Committees are given additional performance evaluation sheets for the respective Board Committees to complete. Sufficient time is given to the Directors to complete the forms and upon completion, the forms are submitted to the Chairperson for tabling to the Nominating Committee for review in due course.

An annual assessment exercised had also been carried out on the members of Nominating Committee. For good corporate governance, the Nominating Committee did not review its own effectiveness and the performances of the Nominating Committee members. Instead, such review was carried out by the Board as a whole with the members of the Nominating Committee abstained from deliberation. In view that the Nominating Committee members are also members of the Remuneration Committee and the Audit Committee, the assessment of the effectiveness and performances of the Remuneration Committee and the Audit Committee were also carried out by the Board.

The Director who is subject to re-election and/or reappointment at next Annual General Meeting are assessed by the Nominating Committee (with the relevant Nominating Committee member abstaining on his/her own re-election) before recommendation is made to the Board and shareholders for the re-election and/ or re-appointment. Outcome of the assessment and recommendation would be reported to the Board for information and decision on areas for improvement.

During the financial year, the Nominating Committee conducted one (1) meeting to review the:-

(a) performance assessment sheets received in relation to the annual assessment on the performance and effectiveness of the Board of Directors and Board Committees, the performance of each Director and the terms of office and performance of the Audit Committee and each of its member (“Board Annual Evaluation on Effectiveness”) for the financial year ended 30 June 2017;

(b) annual assessment on the board independence under the MCCG (“Annual Assessment on Board Independence” for year 2017); and

(c) list of Directors standing for re-election at the 12th Annual General Meeting and proposed to the Board the name of retiring Directors for re-election.

Based on these assessments, it was noted that:

(a) The performance of all Directors was good and above average and therefore all retiring directors be recommended to shareholders for re-election;

(b) The Company has an effective board and its composition was well balanced after taking into account the Board members’ wide experience and exposure in various areas as well as their diverse skills and qualities;

(c) The performance of the Board Committees is satisfactory;

(d) Independent Directors were free from influence which could interfere with their ability to exercise impartial judgment on key deliberations and decisions;

(e) The current composition of the Board their and experience are effective for Board’s functions; and

(f) Ms. Chew Yuit Yoo who has served more than nine (9) years as Independent Director in the Board had:

- Fulfilled the definition of independent director in Listing Requirements;


(continued)

A N N U A L R E P O R T 2 0 1 8

- Continuer to exercise independent judgment and act in the best interest of the Company and shareholders during her tenure of service; and

- Shown great integrity and independence and had no transactions with the Group.

The Board also concluded that the Group has benefited from her long serving experience and commitment and therefore agreed to put forth a resolution to retain Ms Chew Yuit Yoo as Senior Independent Non-Executive Director to the shareholders for approval in the forthcoming meeting.

Subsequent to the financial year, the Nominating Committee met two (2) times to:

(a) review the Board Annual Evaluation on Effectiveness for the financial year ended 30 June 2018 and Annual Assessment on Board Independence for year 2018 in respect of Ms. Chew Yuit Yoo and Ms. Thiang Chew Lan (who have served more than nine (9) years as Independent Director in the Board), where the outcome of the assessment were similar to those reported in 2017; and the list of Directors standing for re-election at the 13th Annual General Meeting and

proposed to the Board the name of retiring Directors for re-election; and

(b) consider the appointment of two (2) new directors, namely, En. Nor’Azamin Bin Salleh and Dr. Hidayah Binti Ariffin, which appointment were approved by the Board and announced on 19 July 2018 and 6 September 2018, respectively.

The Board does not have term limit for its Independent Directors and is of the view that the independence of the Independent Directors should not be determined solely or arbitrary by their tenure of service. However, the Board embraces the MCCG practice for retaining an independent director beyond nine (9) years and shall provide justification for doing so and seek shareholders’ approval annually in that respect. If the Board continues to retain the Independent Directors after year 12th, in addition to providing justification as explained above, the Board will seek shareholders’ approval through a two tier voting process, unless the said Independent Director wishes to be re-designated as non-independent non-executive Director which shall be decided by the Board.

(continued)

A N N U A L R E P O R T 2 0 1 8

The directors submit their report and the audited financial statements of the Group and the

Company for the financial year ended 30 June 2018.

Change of name

The Company changed its name from BHS Industries Berhad to Nextgreen Global Berhad with effect from 4 December 2017.

Principal activities

The principal activities of the Company are that of investment holding and the provision of management services. The details of the subsidiaries, including their principal activities, are disclosed in Note 15 to the financial statements.

Financial results

Group Company RM RMNet loss for the financial year attributable to owners of the Company 1,771,248 1,200,361

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

Dividend

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

Reserves and provisions

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

Issue of shares and debentures

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

Warrants 2015/2020

The Company had in October 2015 issued 198,290,398 warrants in conjunction with its rights issue exercise. The warrants are constituted by a deed poll dated 13 October 2015 (“Deed Poll”).

The salient features of the warrants are as follows:

(a) The issue date of the warrants is 19 October 2015 and the expiry date is on 18 October 2020. Any warrants not exercised at the expiry date will lapse and cease to be valid for any purpose;

(b) Each warrant entitles the registered holder the right to subscribe for one (1) new ordinary share in the Company at an exercise price of RM0.60 per ordinary share until the expiry of the exercise period;

(c) The exercise price and the number of warrants are subject to adjustment in the event of alteration to the share capital of the Company in accordance with the provisions in the Deed Poll;

(d) The warrant holders are not entitled to participate in any distribution and/or offer of further securities in the Company (except for the issue of new warrants pursuant to adjustment as mentioned in item (c) above), unless and until such warrant holders exercise their rights to subscribe for new ordinary shares; and

(e) The new ordinary shares to be issued upon exercise of the warrants, shall upon issuance and allotment, rank pari passu with the then existing ordinary shares, except that they will not be entitled to dividends, rights, allotments and/or other distributions, declared by the Company which entitlement thereof precedes the allotment date of the new ordinary shares allotted pursuant to the exercise of the warrants.

as at 30 June 2018

40 Directors’ Report


The movement in the Company’s warrants during the financial year are as follows:

Entitlement for ordinary shares

Balance at Balance at 1.7.2017 Exercised Expired 30.6.2018

Number of unexercised warrants 198,290,398 – – 198,290,398

Treasury shares During the financial year, the Company disposed of 10,574,900 treasury shares for a total cash consideration of RM3,912,063 to the open market.

As at 30 June 2018, the Company held a total of 16,365,100 treasury shares of its 458,366,718 issued ordinary shares. The treasury shares are held at a carrying amount of RM8,194,763. The shares repurchased are being held as treasury shares in accordance with Section 127(4)(b) of the Companies Act 2016. Further relevant details on treasury shares are disclosed in Note 25.2 to the financial statements.

Share optionsNo options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

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

DirectorsThe directors of the Company in office since the end of the previous financial year to the date of this report are:

Dato’ Lim Thiam Huat Datuk Lee Hwa Cheng Dato’ Sohaimi Bin Shahadan Datuk Lawrance Yeo Chua Poh Dato’ Dr. Koe Seng Kheng Koo Thiam Yoong Chew Yuit YooThiang Chew Lan Nor’ Azamin Bin Salleh - appointed on 19 July 2018Dr Hidayah Binti Ariffin - appointed on 6 September 2018

Directors’ interests in sharesThe shareholdings in the Company and its related companies of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept under Section 59 of the Companies Act 2016, are as follows:

Balance as at Balance as at 1.7.2017 Bought Sold 30.6.2018

Shareholdings registered in the name of director:In the CompanyDirect interest

Dato’ Lim Thiam Huat 79,075,998 3,309,290 – 82,385,288

Dato’ Dr. Koe Seng Kheng 6,250,602 – (5,800,000) 450,602

Koo Thiam Yoong 5,570,368 100,000 – 5,670,368

Thiang Chew Lan 554,805 – – 554,805

Datuk Lee Hwa Cheng 4,177,776 2,184,300 – 6,362,076

Other shareholdings in which directors are deemed to have interests:

Thiang Chew Lan * 280,186 – – 280,186

Chew Yuit Yoo * 261,248 – – 261,248

Datuk Lee Hwa Cheng # 4,177,776 – - 4,177,776

Datuk Lawrance Yeo Chua Poh # 30,000,000 – – 30,000,000

Dato’ Lim Thiam Huat * – 4,810,000 – 4,810,000

Number of ordinary shares

A N N U A L R E P O R T 2 0 1 8

Directors’ interests in shares (continued)

Number of warrants over ordinary shares

Balance as at Balance as at 1.7.2017 Bought Sold 30.6.2018

Warrants registered in the name of director:In the Company

Direct interest

Dato’ Lim Thiam Huat 76,432,004 – – 76,432,004

Dato’ Dr. Koe Seng Kheng 3,125,300 – – 3,125,300

Koo Thiam Yoong 2,785,184 – – 2,785,184

Thiang Chew Lan 277,402 – – 277,402

Other holdings in which directors are deemed to have interests:

Thiang Chew Lan * 140,092 – – 140,092

Chew Yuit Yoo * 130,624 – – 130,624

* Deemed interested by virtue of Section 59(11)(c) of the Companies Act 2016# Deemed interested by virtue of Section 8(4) of the Companies Act 2016

Other than as stated, none of the other directors in office at the end of the financial year had any interest in the shares of the Company and its related companies during the financial year, according to the register required to be kept under Section 59 of the Companies Act 2016.

Directors’ benefits

Since the end of previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by the directors shown in the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefit which may be deemed to have arisen by virtue of the transactions as disclosed in Note 31.1 to the financial statements.

The amount of remuneration paid to and receivable by the directors for their services to the Company and its subsidiaries during the financial year is as follows:

RMFees 266,460Remuneration other than fees 779,520Estimated money value of benefits other than in cash 52,300

There were no arrangements during or at the end of the financial year, which had the object of enabling 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 the Company were prepared, the directors took reasonable steps:

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision


(continued)


for doubtful debts and had satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

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

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

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

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

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

In the interval between the end of the financial year and the date of this report:

(a) no item, transaction or event of a material and unusual nature has arisen which, in the opinion of the directors, would substantially affect the results of the operations of the Group and the Company for the financial year in which this report is made; and

(b) no charge has arisen on the assets of the Group and the Company which secures the liability of any other person nor have any contingent liabilities arisen in the Group and the Company.

No contingent or other liability of the Group and 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 the Company to meet their obligations as and 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, which would render any amount stated in the financial statements misleading.

Auditors’ remuneration

The total remuneration paid to or receivable by the statutory auditors for the financial year were RM155,409 for the Group and RM40,000 for the Company.

Signed on behalf of the Board

in accordance with a resolution of the directors,

________________________________

DATO’ LIM THIAM HUAT

________________________________KOO THIAM YOONG

Kuala LumpurDated: 17 October 2018

A N N U A L R E P O R T 2 0 1 8

))))

I, KOO THIAM YEN (MIA Membership Number: 6933), being the officer primarily responsible for the financial management of NEXTGREEN GLOBAL BERHAD (formerly known as BHS Industries Berhad), do solemnly and sincerely declare that to the best of my knowledge and belief, the accompanying financial statements are correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by the above named KOO THIAM YEN at Kuala Lumpur in Wilayah Persekutuan on 17 October 2018.

KOO THIAM YEN

Before me,

COMMISSIONER FOR OATHS


(continued)

Statutory Declaration

The directors of NEXTGREEN GLOBAL BERHAD (formerly known as BHS Industries Berhad) state that, in the opinion of the directors, the accompanying financial statements are drawn up in accordance with the provisions of the Companies Act 2016 and the Malaysian Financial Reporting Standards, so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June 2018, and of their financial performance and their cash flows for the year ended on that date.

Signed on behalf of the Boardin accordance with a resolution of the directors,

DATO’ LIM THIAM HUAT KOO THIAM YOONG Kuala LumpurDated: 17 October 2018

Statement by Directors


45 Independent Auditors’ Report to the members of Nextgreen

Global Berhad (Formerly known asBHS Industries Berhad)

1. Report on the audit of the financial statements

1.1 Opinion

We have audited the accompanying financial statements which comprise the statements of financial position of the Group and the Company as at 30 June 2018, and the related statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements give a true and fair view of the financial position of the Group and the Company as at 30 June 2018, and of their financial performance and their cash flows for the year then ended in accordance with the Companies Act 2016 (“Act”) and the Malaysian Financial Reporting Standards.

1.2 Basis for opinion

We conducted our audit in accordance with the Approved Standards on Auditing in Malaysia and the International Standards on Auditing. Our responsibilities under those standards are further described in paragraph 1.6.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

1.3 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 current year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined that there are no key audit matters to report with respect to our audit of the financial statements of the Company.

1.3.1 Recoverability of trade receivables

The recoverability of trade receivables is a key audit matter in our audit as this involves management’s estimates in relation to credit risk exposure. The Group also has a significant number of receivable balances that are overdue, leading to the risk that the Group’s impairment for trade receivables is insufficient if the amounts are not recoverable.

How the matter was addressed in the audit

• We reviewed and verified the collections received during the reporting period and collections subsequent to the reporting period to bank records;

• On overdue balances where no allowance for impairment was made, we obtained evidence in the form of subsequent receipts, historical payment trend and customer’s correspondence to support the recoverability of the balances; and

• We tested the adequacy of the amount of impairment made by management by challenging the relevant assumptions and also taking into account historical data from the Group’s previous collections experience. We also considered the adequacy of the amount

A N N U A L R E P O R T 2 0 1 8

(continued)

of impairment in the light of available evidence including the aging profile of receivables at year end and at the time of audit, the history of bad debt exposure and recent changes in payment profile.

Based on the procedures performed, we did not note any significant exceptions.

1.3.2 Risk of impairment of plant and equipment

A subsidiary of the Comapny, BHS Book Printing Sdn Bhd (“BPP”) has incurred a gross loss during the year. This is an indication that an impairment might have occurred on the carrying amount of the plant and equipment of RM17,092,236 as at 30 June 2018. Management has performed an impairment review and concluded that there is no impairment in respect of the plant and equipment as the recoverable amount was higher than the carrying amount.

The assessment of recoverable amount requires significant judgement and assumptions used in the calculation, in particular relating to estimation of future sales volume, cash flow projections and discount rates.

We focused on this area due to the significance of the value involved and the nature of judgements and assumptions made by management in determining whether there is any impairment that has occurred.


We tested management’s impairment review by performing the following work:

• comparing the assumptions used within the impairment review model to approved budgets and business plans and other evidence of future intentions;

• benchmarking of key assumptions including prices of papers, exchange rates, discount rates and inflation against our own internal research data;

• reviewed available qualitative information, supporting the projection of printing orders; and

• performed sensitivity analysis and stress-test over key assumptions in the model in order to assess the potential impact of a range of possible outcomes.

We found the assumptions to be materially consistent with the comparison and benchmarking procedures that we have carried out.

1.3.3 Non refundable deposits for purchase of plant and equipment

We focused on the non refundable deposits paid since the financial year 2016 of RM27,404,406 for purchase of plant and equipment for manufacturing of pulps and papers during the business diversification exercise. As at the date of our report, the construction of the pulps and papers factory is in progress and the delivery of the plant and equipment is ongoing. Due to the delayed in the construction of the factory, management has revised its business plan and cash flows projections and also performed impairment assessment on the plant and equipment concerned.


We performed the following audit procedures:

• obtained suppliers’ confirmation on the total deposits paid as at the reporting date;

• performed site visit in Pekan, Pahang and discussed on the status of the progress of the construction of factory and plant and equipment with contractor and project managers;

• performed site visit and physical sighting of plant and equipment in China and discussed the delivery schedule with the suppliers;

• reviewed approved business plan and cash flows projections with committed timeline by board of directors;

46 Independent Auditors’ Report


• checked reasonableness of key assumptions of the cash flows projections used to determine the recoverable amount by benchmarking the discount rates, papers prices and inflation to externally available data and checked future development plans including capital expenditure plans and funding requirement as appropriate; and

• Performed sensitivity analysis and stress-test over the key assumptions in the model used in deriving on the recoverable amount.

No significant exception was noted from our work.

1.4 Other information

Management is responsible for the other information. The other information comprises the information included in the Company’s directors’ report and annual report, but does not include the financial statements and our auditors’ report thereon. The annual report is expected to be made available to us after the date of this auditors’ report.

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

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements 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 material misstatement of this other information, we are required to report the fact. We have nothing to report in this regard.

1.5 Responsibilities of management and those charged with governance for the financial statements

The directors are responsible for the preparation of financial statements that give a true and fair view in

accordance with the Act and the Malaysian Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is 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 management either intends to liquidate the Company and/or its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

1.6 Auditors’ responsibilities for the audit of the financial statements

It is our responsibility to form an independent opinion, based on our audit, on these financial statements and to report our opinion solely to you, as a body, in accordance with Section 266 of the Act, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the content of this report.

Our objectives are to obtain reasonable assurance about whether the financial statements 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 the Approved Standards on Auditing in Malaysia and the International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A N N U A L R E P O R T 2 0 1 8

(continued)

1.6 Auditors’ responsibilities for the audit of the financial statements (continued)

As part of an audit in accordance with the Approved Standards on Auditing in Malaysia and the International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, 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 internal control.

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

• Conclude on the appropriateness of management’s 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 and/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 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 and/or the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, 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 Group’s financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance 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 those charged with governance 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 those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of 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.

48 Independent Auditors’ Report


RUSSELL BEDFORD LC & COMPANY AF 1237CHARTERED ACCOUNTANTS

Kuala LumpurDated: 17 October 2018

2. Report on other legal and regulatory requirements

In accordance with the requirements of the Act, we report that the subsidiary of which we have not acted as auditors, is disclosed in Note 15 to the financial statements.

CHIN KIM CHUNG02006/09/2020 J CHARTERED ACCOUNTANT

3. Engagement partner

The engagement partner on the audit resulting in this independent auditors’ report is Chin Kim Chung.

A N N U A L R E P O R T 2 0 1 8

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

50 Statements of Comprehensive Income


Note 2018 2017 2018 2017 RM RM RM RM

Group Company

Revenue 4 29,848,582 25,200,483 543,348 400,653

Cost of sales 5 (28,105,478) (25,957,976) - -

Gross profit/(loss) 1,743,104 (757,493) 543,348 400,653

Other operating income 4,327,939 1,397,773 942,000 24,528

Other operating expenses (8,103,715) (12,845,794) (2,685,713) (2,965,786)

Loss from operations 7 (2,032,672) (12,205,514) (1,200,365) (2,540,605)

Finance income 8 5,234 42,224 4 10,753 Finance costs 9 (340,054) (406,541) - -

Net finance (costs)/income (334,820) (364,317) 4 10,753

Share in profit of associate, net of tax 352,335 - - -

Loss before tax (2,015,157) (12,569,831) (1,200,361) (2,529,852)

Income tax expense 10 243,909 2,509,557 - -

Net loss for the year (1,771,248) (10,060,274) (1,200,361) (2,529,852)

Other comprehensive (loss)/income: Items that may be reclassified subsequently to profit or loss

Foreign currency translation (438,690) 122,344 - -

Other comprehensive (loss)/income for the year, net of tax (438,690) 122,344 - -

Total comprehensive loss for the year (2,209,938) (9,937,930) (1,200,361) (2,529,852)

Basic loss per shares (sen) 11 (0.41) (2.39)

A N N U A L R E P O R T 2 0 1 8

51 Statements of Financial Position

as at 30 June 2018

Group Company

Non current assets Property, plant and equipment 12 41,399,778 42,591,370 308,148 395,705 Land held for property development 13 6,372,143 18,298,979 - - Intangible asset 14 500,000 500,000 - - Investment in subsidiaries 15 - - 64,914,754 60,582,684 Other investments 16 12,689 12,689 - - Other receivables 21 250,000 - 72,807,818 - Deferred tax assets 17 1,471,774 1,226,089 - -

50,006,384 62,629,127 138,030,720 60,978,389 Current assets Inventories 18 8,708,054 8,762,252 - - Property development costs 19 21,923,050 - - - Trade receivables 20 15,302,410 18,261,210 - - Other receivables, deposits

and prepayments 21 36,314,772 38,160,863 690,398 74,996,706 Tax recoverable 1,853,233 1,798,983 84,380 148,718 Short term investments 22 - - - - Cash and bank balances 23 585,558 1,487,520 769 1,776

84,687,077 68,470,828 775,547 75,147,200

Total assets 134,693,461 131,099,955 138,806,267 136,125,589 Equity Share capital 24 114,591,680 114,591,680 114,591,680 114,591,680 Reserves 25 3,895,580 2,193,455 22,951,265 20,239,563

Equity attributable to owners of the Company

118,487,260

116,785,135

137,542,945

134,831,243

Non-controlling interest 30 - - -

Total equity 118,487,290 116,785,135 137,542,945 134,831,243 Non current liabilities Hire purchase liabilities 26 150,251 169,637 - - Term loan 27 5,147,417 5,859,384 - -

5,297,668 6,029,021 - -

Current liabilities Trade payables 28 5,162,377 2,668,915 - - Other payables and accruals 29 4,791,352 4,441,498 1,263,322 1,294,346 Tax payable 317 317 - - Short term borrowings 30 750,722 982,931 - - Hire purchase liabilities 26 203,735 192,138 - -

10,908,503 8,285,799 1,263,322 1,294,346

Total liabilities 16,206,171 14,314,820 1,263,322 1,294,346

Total equity and liabilities 134,693,461 131,099,955 138,806,267 136,125,589


Note 2018 2017 2018 2017 RM RM RM RM

AN

NU

AL

R

EP

OR

T

20

18

52 Statements of

Changes in

Equity

The accompanying notes form an integral part of the financial statements. 16

Share capital

Share premium

Foreign currency

translation reserve

Merger reserve

Treasury shares

Warrant reserve

Retained profits

Equity attributable to owners of the

Company

Non-

controlling interest

Total equity Group RM RM RM RM RM RM RM RM RM RM

At 1 July 2017 114,591,680 4,963,826 123,459 (16,832,846) (14,272,720) 16,854,684 11,357,052 116,785,135 - 116,785,135

Transactions with owners:

Disposal of treasury shares - (2,165,894) - - 6,077,957 - - 3,912,063 - 3,912,063

Acquisition of non- controlling interest - - - - - - - - 30 30

- (2,165,894) - - 6,077,957 - - 3,912,063 30 3,912,093

Net loss for the year - - - - - - (1,771,248) (1,771,248) - (1,771,248)

Other comprehensive loss for the year:

Foreign currency translation - - (438,690) - - - - (438,690) - (438,690)

At 30 June 2018 114,591,680 2,797,932 (315,231) (16,832,846) (8,194,763) 16,854,684 9,585,804 118,487,260 30 118,487,290



Share capital

Share premium

Foreign currency

translation reserve

Merger reserve

Treasury

shares

Warrant reserve

Retained

profits

Total equity Group RM RM RM RM RM RM RM RM

At 1 July 2016 104,786,300 - 1,115 (16,832,846) (14,268,574) 16,854,684 21,417,326 111,958,005

Transactions with

owners: Issue of shares

pursuant to private placement 9,805,380 4,963,826 - - - - - 14,769,206

Purchase of treasury shares - - - - (4,146) - - (4,146)

9,805,380 4,963,826 - - (4,146) - - 14,765,060

Net loss for the year - - - - - - (10,060,274) (10,060,274)

Other comprehensive income for the year:

Foreign currency translation - - 122,344 - - - - 122,344

At 30 June 2017 114,591,680 4,963,826 123,459 (16,832,846) (14,272,720) 16,854,684 11,357,052 116,785,135

AN

NU

AL

R

EP

OR

T

20

18


The accompanying notes form an integral part of the financial statements. 18

Share capital

Share premium

Treasury shares

Warrant reserve

Retained profits

Total

Company RM RM RM RM RM RM

At 1 July 2016 104,786,300 - (14,268,574) 16,854,684 15,223,625 122,596,035

Transactions with owners: Issue of shares pursuant to private placement 9,805,380 4,963,826 - - - 14,769,206 Purchase of treasury shares - - (4,146) - - (4,146)

9,805,380 4,963,826 (4,146) - - 14,765,060

Net loss/Total comprehensive loss for the year - - - - (2,529,852) (2,529,852)

At 30 June 2017 114,591,680 4,963,826 (14,272,720) 16,854,684 12,693,773 134,831,243

Transactions with owners: Disposal of treasury shares - (2,165,894) 6,077,957 - - 3,912,063

Net loss/Total comprehensive loss for the year - - - - (1,200,361) (1,200,361)

At 30 June 2018 114,591,680 2,797,932 (8,194,763) 16,854,684 11,493,412 137,542,945

A N N U A L R E P O R T 2 0 1 8

2018 2017 2018 2017 RM RM RM RM

Group Company




Cash flows from/(used in) operating

activities Loss before tax (2,015,157) (12,569,831) (1,200,361) (2,529,852) Adjustments for: Allowance for doubtful debts 282,283 4,055,198 - - Depreciation 3,185,250 2,811,017 87,557 41,369 Deposit written off - 500 - 500 Impairment loss on investment

in subsidiaries - - - 618,000 Reversal of impairment loss on

investment in subsidiaries - - (332,000) - Interest expense 340,054 406,541 - - Unrealised gain on foreign exchange (128,937) (849,560) - - Allowance for doubtful debts no longer

required (3,052,081) (1,499) - - Plant and equipment written off - 145,330 - - Dividend income from financial assets

at fair value through profit or loss (1,890) (945) - - Fair value gain on financial assets at fair

value through profit or loss - (24,528) - (24,528) Gain on disposal of a subsidiary (20,680) - - -

Gain on disposal of plant and equipment (39,999) - - - Income distributed from financial

assets at fair value through profit or loss - (21,880) - (10,570)

Interest income (5,234) (20,344) (4) (183) Operating loss before working capital

changes (2,207,341) (6,070,001) (1,444,808) (1,905,264) Decrease in inventories 54,198 5,123,678 - - (Increase)/Decrease in

development costs (10,399,355) 1,046,008 - - Decrease/(Increase) in trade and other

receivables 10,235,519 (5,592,894) (440) 18,566 Increase/(Decrease) in trade and other

payables 1,874,168 (1,602,488) 107,683 193,539

Cash used in operations (442,811) (7,095,697) (1,337,565) (1,693,159) Income tax refunded 93,050 - 90,000 - Income tax paid (149,076) (242,041) (25,662) (39,750)

Net cash used in operating activities (498,837) (7,337,738) (1,273,227) (1,732,909)

Gain on disposal of an associate (750,950) - - -

A N N U A L R E P O R T 2 0 1 8


2018 2017 2018 2017 RM RM RM RM

Group Company

Cash flows from/(used in) investing activities

Purchase of property, plant and equipment (803,925) (2,476,647) - (15,131)

Additions in development costs - (9,670,674) - - Acquisition and subscription of shares

-

Income received from financial assets at fair value through profit or loss - 21,880 - 10,570

Investment in financial assets at fair value through profit or loss - (2,000,000) - (2,000,000)

Proceeds from disposal of - financial assets at fair value through

profit or loss - 11,504,389 - 10,598,796 - plant and equipment 40,000 - - - - a subsidiary 115,336 - - - Repayments from/(Advances to)

subsidiaries - - 1,498,930 (20,068,244) Dividends received 1,890 718 - - Deposits paid for purchase of - plant and equipment - (6,245,200) - - - land held for development (2,120,000) (200,000) - - Interest received 5,234 20,344 4 183

Net cash used in investing activities (2,761,435) (9,045,190) (2,501,136) (13,974,830) Cash flows from/(used in) financing

activities

Proceeds from - foreign currency trade loan 2,720,854 2,840,951 - - - private placement - 14,769,206 - 14,769,206 - disposal of treasury shares 3,912,063 - 3,912,063 - Repayments of - foreign currency trade loan (2,984,470) (5,375,582) - - - hire purchase liabilities (217,789) (177,086) - - - term loan (680,560) (690,023) - - Payments for purchase of

treasury shares - (4,146) - (4,146) Repayments to a director (51,621) - - - Advances from a subsidiary - - 161,293 496,019 Repayments to a former subsidiary - - (300,000) - Interest paid (340,054) (406,541) - -

Net cash from financing activities 2,358,423 10,956,779 3,773,356 15,261,079

in subsidiaries

Net cash in flow on acquisition of a subsidiary(4,000,070)

30-

- - -(2,501,004)

A N N U A L R E P O R T 2 0 1 8


2018 2017 2018 2017 RM RM RM RM

Group Company

Net decrease in cash and cash equivalents (901,849) (5,426,149) (1,007) (446,660) Cash and cash equivalents at beginning of year 1,487,520 7,226,164 1,776 448,436 Effect of exchange rate changes on the balance of cash and cash equivalents of foreign subsidiary (113) (312,495) - - Cash and cash equivalents at end of

year 585,558 1,487,520 769 1,776 Cash and cash equivalents are

represented by cash and bank balances

585,558

1,487,520

769

1,776

Reconciliation of liabilities arising from financing activities

Non-cash hire

Cash purchase 2017 flows additions 2018

RM RM RM RM Group Amount due to a director 157,371 (51,621) - 105,750 Short term borrowings 263,616 (263,616) - - Term loan 6,578,699 (680,560) - 5,898,139 Hire purchase liabilities 361,775 (217,789) 210,000 353,986

2017 Cash flows 2018

RM RM RM Company Amount due to a subsidiary 721,794 161,293 883,087 Amount due to a former subsidiary 300,000 (300,000) -


(continued)

A N N U A L R E P O R T 2 0 1 8


Notes to the Financial

Statements

A N N U A L R E P O R T 2 0 1 8

A N N U A L R E P O R T 2 0 1 8



1. General information

The principal activities of the Company are that of investment holding and the provision of management services. The principal activities of the subsidiaries are disclosed in Note 15.

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

TheCompany’sregisteredofficeislocatedat802,8thFloor,BlockC,Kelana Square, 17 Jalan SS7/26, 47301PetalingJaya, Selangor Darul Ehsan.

The Company changed its name from BHS Industries Berhad to Nextgreen Global Berhad with effect from 4December2017.

The principal place of business of the Company is located atLot4,LorongCJ1/1B,KawasanPerindustrianCherasJaya,43200Cheras,SelangorDarulEhsan.

Thefinancialstatementswereapprovedandauthorisedforissuebytheboardof directorson17October2018.

2. Principal accounting policies

2.1 Statement of compliance

Thefinancialstatementsof theGroupandtheCompanyhave been prepared and presented in accordance with the provisionsof theCompaniesAct2016andtheMalaysianFinancialReportingStandards.

ThefinancialstatementsalsocomplywiththeInternationalFinancialReportingStandardsasissuedbytheInternationalAccounting Standards Board.

2.2 Basisofpreparationofthefinancialstatements

2.2.1 Basis of accounting

The financial statements have been prepared under thehistorical cost convention and any other bases described in thesignificantaccountingpoliciesassummarised inNote2.2.2.

The Group has adopted the new and revised Malaysian FinancialReportingStandards(“MFRSs”)andamendments

to published standards and IC interpretations that become mandatory for the current reporting period. The adoption of these new and revisedMFRSs and IC interpretationsdoes not result in significant changes in the accountingpolicies of the Group.

The Group has not adopted the new standards, amendments to published standards and interpretations that have been issued but not yet effective. These new standards, amendments to published standards and interpretations donotresult insignificantchanges inaccountingpoliciesof the Group upon their initial application other than the following:

(i) MFRS 9 Financial Instruments (effective forfinancial periods beginning on or after 1 January2018)

MFRS 9 retains but simplifies the mixedmeasurementmodel inMFRS139 and establishesthreeprimarymeasurementcategoriesforfinancialassets:amortisedcost,fairvaluethroughprofitorlossand fair value through other comprehensive income (“OCI”).Thebasisof classificationdependsontheentity’sbusinessmodelandthecontractualcashflowcharacteristicsof thefinancialassets.Investmentsinequity instruments are always measured at fair value throughprofitorlosswithanirrevocableoptionatthe inception to present changes in fair value in OCI (providedtheinstrumentisnotheldfortrading).Adebt instrument is measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal andinterest.

For financial liabilities, there were no changes toclassification and measurement except for therecognition of changes in own credit risk in other comprehensive income, for liabilities designated at fairvaluethroughprofitorloss,unlessthiscreatesan accounting mismatch.

There is now a new expected credit losses model on impairmentforallfinancialassetsthatreplacestheincurredlossimpairmentmodelusedinMFRS139.The expected credit losses model is forward looking and eliminates the need for a trigger event to have occurred before credit losses are recognised.

(ii) MFRS15RevenuefromContractswithCustomers(effectiveforfinancialperiodsbeginningonorafter1January2018)

MFRS 15 supersedes MFRS 118 Revenue andintroduces a new principle of revenue recognition. Thecoreprincipleof MFRS15isthatanentity

A N N U A L R E P O R T 2 0 1 8

2.2 Basisofpreparationofthefinancial statements (continued)

2.2.1 Basis of accounting (continued)

recognises revenue to depict the transfer of promised goods or services to customers in an amountthatreflectstheconsiderationtowhichtheentity expects to be entitled in exchange for those goods or services. MFRS 15 have established thecore principle of revenue recognition by applying thefollowingfive(5)steps:

1) Identifythecontract(s)withacustomer 2) Identify the performance obligations in the

contract 3) Determinethetransactionprice 4) Allocate the transaction price to the

performance obligations in the contract 5) Recognise revenue when (or as) the entity

satisfiesaperformanceobligation

MFRS15alsoincludesacohesivesetof disclosurerequirements that would result in an entity providing users of financial statements with comprehensiveinformation about the nature, amount, timing and uncertaintyof revenueandcashflowsarisingfromthe Company’s contracts with customers.

(iii) MFRS 16 Leases (effective for financial periodsbeginningonorafter1January2019)

Thescopeof MFRS16includesleasesof allassets,with certain exceptions. A lease is defined as acontract, or part of a contract, that conveys the right touseanasset(theunderlyingasset)foraperiodof time in exchange for consideration.

MFRS16 requires lessees to account for all leasesunder a single on-balance sheet model in a similar waytofinanceleaseunderMFRS117.Thestandardincludes two recognition exemptions for lessees – leases of low value assets and short term leases (i.e.leaseswithaleasetermof 12monthsorless).At the commencement date of a lease, a lessee will recognisealiabilitytomakeleasepayments(i.e.theleaseliability)andanassetrepresentingtherighttouse theunderlyingassetduring the lease term (i.e.therightof useasset).

Lessees will be required to separately recognise

the interest expense on the lease liability and the depreciation expense on the right of use asset. Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g. a change of lease term, a change in futurelease payments resulting from a change in an index or rate used to determine those payments). Thelessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right of use asset.

Lessor accounting is substantially unchanged. Lessors will continue to classify all leases using the same classification principle as inMFRS 117 anddistinguish between two types of leases which is operatingandfinanceleases.

Eitherafullormodifiedretrospectiveapplicationisrequired for annual periods beginning on or after 1 January2019withearlyadoptionpermittedbutnotbefore the entity appliesMFRS 15 Revenue fromContracts with Customers.

The Group is in the process of making an assessment where the impact of the above new standards is expected to be in the period of initial application.

2.2.2 Significantaccountingpolicies

Functional and presentation currency

Theindividualfinancialstatementsof eachentity intheGroup are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financialstatements are presented in Ringgit Malaysia (“RM”),which is also the Company’s functional currency.

Basis of consolidation

The consolidated financial statements comprise thefinancialstatementsof theCompanyanditssubsidiaries

asatthereportingdate.Thefinancialstatementsof thesubsidiaries used in the preparation of the consolidated financialstatementsarepreparedforthesamereportingdate as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

The formation of the Group during restructuring exercise on8August2007hasbeenaccountedforasabusinesscombination under common control in which all of


(continued)

A N N U A L R E P O R T 2 0 1 8

2.2.2 Significantaccountingpolicies(continued)

Basis of consolidation (continued)

the combining entities are ultimately controlled by the same party or parties, both before and after the business combination, and that control is not transitory.

When the merger method of accounting is used, the cost of investment in the Company’s book is recorded at the nominal value of shares issued and the difference between the cost of the investment and the nominal value of shares acquired is treated as a merger reserve or merger deficit.Mergerdeficitisadjustedagainstsuitablereservesof the subsidiaries acquired to the extent that the laws and statues do not prohibit the use of such reserves. The results and financial positions of the companies beingmerged are included as if the merger had been effected throughout the current and previous reporting periods.

The consolidated financial statements incorporate thefinancial statements of the combining entities inwhichthe common control combination occurs as if they had been combined from the date when combining entities first came under the control of the controlling partiesuntil the date that such control ceases.

Subsequent acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assetsacquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition related costs are recognised as expenses in the reporting periods in which the costs are incurred and the services are received.

Any excess of the sum of their fair value of the consideration transferred in the business combination, theamountof non-controllinginterestintheacquiree(if any), and the fair value of theGroup’s previously heldequity interest in the acquiree (if any),over thenet fairvalue of the acquiree’s identifiable assets and liabilitiesis recorded as goodwill in the consolidated statement of financial position. In instanceswhere the latter amountexceeds the former, the excess is recognised as a gain on bargainpurchaseinprofitorlossontheacquisitiondate.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented within equity

in the consolidated statement of financial position,separately from equity attributable to owners of the Company. Non-controlling interests in the results of the Group is presented in the statement of comprehensive income as an allocation of the profit or loss and thecomprehensive income for the reporting period between non-controlling interests and the owners of the Company. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to haveadeficitbalance.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a 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 reflectthe changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributable to owners of the parent.

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equityrelatedtothesubsidiary.Anysurplusordeficitarisingon the lossof control is recognised inprofitorloss. 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 equity accounted investee or as an available-for-sale financial asset depending on the level of influenceretained.

Revenue and income recognition

Revenuefromsaleof goodsismeasuredatthefairvalueof the consideration receivable and is recognised upon the delivery of goods and risks and rewards of ownership have passed to the customers.

Revenuefrommanagementservicesrenderedisrecognisedinprofitorlosswhentheservicesarerendered.

Dividend income is recognised when the shareholder’s right to receive payment is established.

Interest income is recognised as it accrues (using theeffective interest ratemethod) unless collectability is indoubt.

Foreign currencies

(i) Foreigncurrencytransactions Transactions in foreign currencies are measured

in the respective functional currencies of the Company and its subsidiaries and are recorded

A N N U A L R E P O R T 2 0 1 8

2.2.2 Significantaccountingpolicies (continued)

Foreign currencies (continued)

on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions.

Exchange differences arising on the settlement of monetary items or on translating monetary items at thereportingdatearerecognisedinprofitorloss.

(ii) Foreignoperations

The assets and liabilities of foreign operations are translated into RinggitMalaysia at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognisedinprofitorloss.

The principal exchange rates for every unit of foreign currency ruling at reporting date used are as follows:

2018 2017 RM RM UnitedStatesDollar 4.0385 4.2900 NigerianNaira N/A 0.0133

Employeebenefits

(i) Shorttermbenefits

Wages, salaries, bonuses and social security contributions are recognised as an expenses in the reporting period in which the associated services are rendered by employees of the Group. 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. Short term non accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Definedcontributionplans

Obligationsforcontributiontodefinedcontributionplans such as Employees Provident Fund arerecognisedinprofitorlossasincurred.

Income tax

Incometaxontheprofitor loss for thereportingperiodcomprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of thetaxableprofitforthereportingperiodandismeasuredusing the tax rates that have been enacted at the reporting date.

Deferred tax is provided for, using the ‘liability’ method, on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in thefinancialstatements.Inprinciple,deferredtaxliabilitiesare recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to theextent that it isprobable that taxableprofitwill be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the reporting period when the asset is realised or the liability settled, based on tax rates that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in profit or loss, except tothe extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised in equity or other comprehensive income respectively.

Deferred tax assets and liabilities are offset if there is legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Impairmentofnonfinancialassets

The carrying amount of nonfinancial assets subject to accounting for impairment is reviewed at each reporting


(continued)

A N N U A L R E P O R T 2 0 1 8


Impairmentofnonfinancialassets(continued)

date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or the cash generating unit to which it belongs exceeds its recoverable amount. Impairment losses are recognised in profitorlossinthereportingperiodinwhichitarises.

The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value in use, estimated future cashflows arediscounted to theirpresent value using a pre-tax discount rate that reflectscurrent market assessments of the time value of money and the risks specific to the asset. For an asset thatdoesnot generate largely independent cash inflows, therecoverable amount is determined for the cash generating unit to which the asset belongs.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. The reversal is recognisedinprofitorloss.

Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost lessaccumulated depreciation and impairment losses, if any.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefitsassociatedwiththeitemwillflowtotheGroupandthecost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or lossduring the reporting period in which they are incurred.

Gain or loss arising from the disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognisedinprofitorloss.

No depreciation is provided on leasehold building and renovation under construction until the asset is ready for its intended use.

Depreciation on property, plant and equipment is calculated to write off the cost of the assets to its residual values on a straight line basis at the following annual rates based on their estimated useful lives:

Leasehold land over the unexpired lease period of 83to99years Leaseholdbuilding 2% Factoryequipment,plantandmachinery 5%-20% Renovations 10%-20% Officeequipment,furnitureandfittings 10% Computers 25% Motorvehicles 20%

The residual values, useful life and depreciation method are reviewed at each reporting date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumptionof thefutureeconomicbenefitsembodiedin the items of property, plant and equipment.

Development property and costs

(i) Landheldforpropertydevelopment Land held for property development consists of land

onwhichnosignificantdevelopmentworkhasbeenundertaken other than earthwork, infrastructure work and professional fees incurred to put the land ready for development or where development activities are not expected to be completed within thenormaloperatingcycle.Suchlandisclassifiedasnon-current assets and is stated at the lower of cost and net realisable value.

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

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

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

(ii) Propertydevelopmentcosts Propertydevelopmentcostsaredeterminedbasedon

aspecificidentificationbasis.Propertydevelopmentcosts comprising costs of land, direct materials, direct labour, other direct costs, attributable overheads and payments to subcontractors that meetthedefinitionof inventoriesarerecognisedasan asset and are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and applicable selling expenses.

A N N U A L R E P O R T 2 0 1 8


Intangible asset

Intangible asset comprising a master license acquired separately is measured on initial recognition at cost. Followinginitialrecognition,intangibleassetsarecarriedat cost less accumulated amortisation and impairment losses, if any. Intangible assets are amortised on a straight line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.

Gain or loss arising from derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the asset and is recognised in profit or loss when the asset isderecognised.

The costs of the master license is amortised on a straight linebasisoveritslicenseperiodof fifteen(15)years.

Investment in subsidiaries

Subsidiaries are those companies controlled by the Company. Control exists when the Company is exposed or has rights to variable return from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The Company’s investment in subsidiaries is stated at cost less impairment losses, if any.

Investment in associates

An associate is a company in which the Group has significantinfluenceandwhichisneitherasubsidiarynora joint venture.

The Group’s investment in associates is accounted for under the equity method of accounting based on the audited or management financial statements of theassociates made up to the reporting date. Under this method of accounting, the investment in an associate is measured in the consolidated statement of financialposition at cost plus the Group’s post acquisition share of theassociate’sprofitorlossandothercomprehensiveincomewhiledividendreceivedisreflectedasareductionof the investment.

Goodwill relating to an associate is included in the carrying amount of the investment. Any excess of the Group’s

shareof thenet fairvalueof theassociate’s identifiableassets and liabilities over the cost of the investment is included as income in the determination of the Group’s share of the associates’ profit or loss in the reportingperiod in which the investment is acquired.

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 on impairment of the asset transferred. Where necessary, in applying the equity method, adjustments have been made to the financial statements of the associates to ensureconsistency of accounting policies with the Group.

When the Group ceases to have significant influenceover an associate, any retained interest in the former associateat thedatewhensignificant influence is lost ismeasured at fair value and this amount is regarded as the initialcarryingamountof afinancialasset.Thedifferencebetween the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method isdiscontinuedisrecognisedinprofitorloss.

When the Group’s interest in an associate decreases but the decreasedoesnotresultinalossof significantinfluence,any retained interest is not remeasured. Any gains or losses previously recognised in other comprehensive income are also reclassifiedproportionately toprofitor loss if thatgainorlosswouldberequiredtobereclassifiedtoprofitor loss on the disposal of the related assets or liabilities.

Inventories

Inventories comprising raw materials, work in progress, tradingmerchandiseandfinishedgoodsarestatedatthelower of cost and net realisable value. Cost of inventories isdeterminedonafirstinfirstoutbasis,Netrealisablevalue represents the estimated selling prices less all estimated costs to completion and costs to be incurred in selling and distribution.

Cost of raw materials and trading merchandise comprises the cost of purchase plus the cost of bringing the inventories to their present location and condition. Cost of work in progress and finished goods comprises thecost of raw materials used, direct labour and appropriate production overheads.

Leases

Assets acquired under leases or hire purchase which transfers substantially all the risks and rewards incidental to ownership of the assets are capitalised under property, plant and equipment. The assets and the corresponding lease obligations are recorded at their fair values or, if


(continued)

A N N U A L R E P O R T 2 0 1 8


Leases (continued)

lower, at the present value of the minimum lease payments of the leased assets at the inception of the respective leases.

Finance costs, which represent the difference between the total lease commitments and the fair values of the assets acquired, are charged to profit or loss over the terms of the relevant lease periods so as to give a constant periodic rate of charge on the remaining balance of the obligations for each reporting period.

All other leases which do not meet such criteria are classified as operating lease. Lease payments under operating leases are recognised as an expense in profit or loss on a straight line basis over the terms of the relevant lease.

Segmentinformation

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Financialinstruments

Financial instruments are recognised in the statement of financial position when the Group has become a party to the contractual provisions of the instrument.

A financial instrument is recognised initially at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income.

Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial

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

Financial assets are classified as either at fair value through profit or loss, loans and receivables, held to maturity investments, or available-for-sale, as appropriate. Financial liabilities are classified as either at fair value through profit or loss (derivative financial liabilities) or at amortised cost (borrowings and trade and other payables), as appropriate.

(i) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

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

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

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current.

A N N U A L R E P O R T 2 0 1 8


Financialinstruments (continued)

(ii) Financial assets at fair value through profit or loss (continued)

Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement dates.

(iii) Payables

Payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. Payables are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(iv) Interest bearing borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(v) Equity instruments

Equity instruments issued by the Company are recorded at the fair value of the proceeds received net of direct issue costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the reporting period in which they are approved.

(vi) Treasury shares

When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is recognised directly

in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity.

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

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

Impairmentoffinancialassets

The Group assesses at each reporting date whether there is any objective evidence that a financial assets, other than classified as fair value through profit or loss is impaired.

(i) Loans and receivables

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers factors such as the probability of insolvency or 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 not to be impaired individually are subsequently assessed for impairment on a collective basis on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increased in the number of delayed payments in the portfolio


(continued)

A N N U A L R E P O R T 2 0 1 8


Impairmentoffinancialassets (continued)

(i) Loans and receivables (continued)

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 through the use of an allowance account. When a debtor becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

Statementsofcashflows

Statements of cash flows are prepared using the indirect method.

Cash equivalents comprise cash balances and short term deposits with maturities of three months or less, highly liquid investments that are readily convertible to known amount of cash and which are subject to insignificant risk of changes in value.

3. Critical accounting estimates and judgements

In the preparation of the financial statements, the directors are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the reporting date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Estimates and judgements are continually evaluated by the directors and are based on historical experience and other

factors, including expectations of future events that are believed to be reasonable under the circumstances.

In the process of applying the Group’s accounting policies, which are described above, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.

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

(i) Impairment of non financial assets The Group assesses impairment of plant and

equipment and non refundable deposits when events or changes in circumstances indicate that the carrying amounts of these assets may not be recoverable. In assessing such impairment, the recoverable amount of the assets is estimated using the latest available fair value (after taking into account the costs to sell) or the value in use of the relevant assets.

The Group assesses for indicators of impairment of plant and equipment and non refundable deposits based on key assumptions made in the approved budgets and business plans such as prices of papers, exchange rates, discount rates, inflation and other available information. Significant variations to these assumptions and estimates could result in changes to the assessment of the recoverability of these non financial assets. To the extent of any future determination that these non financial assets are not recoverable, future financial results in the reporting period in which this determination is made will be affected.

(ii) Deferred tax assets The Group’s deferred tax assets are recognised for

the unabsorbed capital allowances, unutilised tax losses and other deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deferred tax assets can be utilised. Significant management judgement is required to determine the amount of these deferred tax assets that can be recognised based upon the likely timing and level of future taxable profits together with future tax planning strategies.

A N N U A L R E P O R T 2 0 1 8

3. Critical accounting estimates andjudgements(continued)

(iii) Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers

factors such as the probability of insolvency or significant financial difficulties of the trade and other receivables and default or significant delay in payments.

Where there is objective evidence of impairment, the impairment loss is determined based on the estimated future cash flows discounted at the financial asset’s original effective interest rate.

4. Revenue


(continued)

2018 2017 2018 2017 RM RM RM RM

2018 2017 2018 2017 RM RM RM RM

Group Company

Group Company

5. Cost of sales

Management fees - - 543,348 400,653 Printing services 26,756,234 19,746,296 - - Sales of books 97,162 187,783 - - Sales of land 2,995,186 5,266,404 - -

29,848,582 25,200,483 543,348 400,653

Printing services 27,028,550 24,792,230 - - Sales of books 82,320 119,738 - - Sales of land 994,608 1,046,008 - -

28,105,478 25,957,976 - -

A N N U A L R E P O R T 2 0 1 8

6. Staff costs

2018 2017 2018 2017 RM RM RM RM

Group Company

Group Company

The key management personnel of the Company whose remuneration is analysed as follows:

Defined contribution plan 546,141 528,902 101,294 107,428 Salaries, bonus, allowances and

overtime 5,719,355 6,027,089 1,057,351 1,107,483 Other employee related expenses 108,235 152,307 4,759 4,497

6,373,731 6,708,298 1,163,404 1,219,408 Staff costs recognised as property

development costs (Note 19) (748,299) - - -

5,625,432 6,708,298 1,163,404 1,219,408

Staff costs comprise: - directors of the Company - remuneration other than fees 779,520 842,613 779,520 842,613 - fees 266,460 253,680 266,460 253,680 - remuneration other than fees of a director of subsidiaries - 197,120 - - - other staff costs 4,579,452 5,414,885 117,424 123,115

5,625,432 6,708,298 1,163,404 1,219,408

Executive directors: - remuneration other than fees 779,520 842,613 779,520 842,613 Non executive directors: - fees 266,460 253,680 266,460 253,680

Total directors’ remuneration 1,045,980 1,096,293 1,045,980 1,096,293

Estimated money value of benefits other than in cash - Executive directors 45,100 42,700 45,100 42,700 - Non executive directors 7,200 3,600 7,200 3,600

52,300 46,300 52,300 46,300

Total directors’ remuneration including benefits other

than in cash 1,098,280 1,142,593 1,098,280 1,142,593

2018 2017 2018 2017 RM RM RM RM

A N N U A L R E P O R T 2 0 1 8

6. Staff costs (continued)

7. Loss from operations


(continued)

Group Company

The number of directors of the Company where total remuneration during the reporting period falls within the following bands is analysed as follows:The number of directors of the Company where total remuneration during the reporting period falls within the following bands is analysed as follows: 2018 2017 Executive directors: RM100,001 – RM150,000 2 2 RM200,001 – RM250,000 1 1 RM350,001 – RM400,000 1 1

Non executive directors: Below RM50,000 2 3 RM50,001 – RM100,000 1 - RM100,001 – RM150,000 1 1

2018 2017 2018 2017 RM RM RM RM

Loss from operations is arrived at after charging: Auditors’ remuneration - statutory audit 141,300 126,200 36,000 33,000 - under provision in prior year 3,710 - - - - other services 14,109 9,000 4,000 4,000 Operating lease expense on - machinery and equipment 331,313 342,727 - - - premises 674,626 805,999 - - Realised loss on foreign exchange 558,215 - - - And crediting: Dividend income from financial assets at fair value through profit or loss (quoted) 1,890 945 - - Fair value gain on financial assets

at fair value through profit or loss - 24,528 - 24,528 Gain on disposal of

Gain on foreign exchange -

- a- an associate

realised - 249,894 - - - unrealised 128,937 849,560 - - Gain on disposal of plant and

equipment 39,999 - - -

subsidiary 20,680750,950

--

--

--

A N N U A L R E P O R T 2 0 1 8

2018 2017 2018 2017 RM RM RM RM

2018 2017 2018 2017 RM RM RM RM

2018 2017 2018 2017 RM RM RM RM

Group Company

Group Company

Group Company

8. Finance income

9. Finance costs

10. Income tax expense

Interest income from - bank account 5,234 13,434 4 183 - fixed deposits - 6,910 - - Income distributed from financial assets at fair value through profit or loss - 21,880 - 10,570

5,234 42,224 4 10,753

Interest expense - bank guarantees 4,477 - - - - foreign currency trade loan 30,215 74,064 - - - hire purchase 19,454 20,608 - - - term loan 285,908 311,869 - -

340,054 406,541 - -

Estimated Malaysia income tax payable - current year - - - - - (under)/over provision in prior years (1,776) 13,809 - -

(1,776) 13,809 - -

Deferred tax (Note 17) - current year 245,685 2,448,748 - - - overprovision in prior years - 47,000 - -

245,685 2,495,748 - -

243,909 2,509,557 - -

A N N U A L R E P O R T 2 0 1 8


(continued)

10. Income tax expense (continued)

2018 2017 2018 2017 RM RM RM RM

Group Company

A reconciliation of income tax expense applicable to loss before tax at the statutory income tax rate to income tax expense at the effective income tax rate is as follows:

Loss before tax (2,015,157) (12,569,831) (1,200,361) (2,529,852) Less: Share in profit of associate,

net of tax (352,335) - - -

Adjusted loss before tax (2,367,492) (12,569,831) (1,200,361) (2,529,852)

Taxation at statutory tax rate of 24% (2017: 24%) 568,000 3,017,000 288,000 607,000 Expenses not deductible for

tax purposes (547,679) (486,252) (85,000) (289,000) Income not subject to tax 193,464 75,000 80,000 8,000 Income exempted from tax 238,600 725,600 - - Utilisation of previously unrecognised deferred tax assets 147,800 15,400 - - Deferred tax assets not recognised (354,500) (898,000) (283,000) (326,000) (Under)/Over provision in prior years - income tax (1,776) 13,809 - - - deferred tax - 47,000 - - Income tax expense 243,909 2,509,557 - -

A subsidiary of the Company, Ultimate Ivory Sdn Bhd (“Ultimate Ivory”) was granted East Coast Economic Region incentives by Malaysian Investment Development Authority. By virtue of this East Coast Economic Region incentives, the statutory income of Ultimate Ivory from property development activities under Income Tax (Exemption) (No. 8) Order 2016/P.U. (A) 161/2016, Income Tax Act 1967 are exempted from income tax for a period of 10 years commencing from first year of assessment of 2017.

A N N U A L R E P O R T 2 0 1 8

11. Loss per share

2018 2017 RM RM

Group

Net loss attributable to owners of the Company (1,771,248) (10,060,274) Weighted average number of ordinary shares in issue (net of

treasury shares held) 433,654,836 420,269,134 Basic loss per ordinary share (sen) (0.41) (2.39)

Basic

Basic loss per ordinary share is calculated based on the net loss attributable to owners of the Company and the weighted average number of ordinary shares in issue as follows:

Diluted

Diluted loss per share are not presented in the financial statements as at 30 June 2018 as the fair value of the ordinary shares of the Company during the reporting period is below the exercise price of the warrants. These potential ordinary shares have a diluted effect only if the fair value of the ordinary shares during the reporting period exceeds the exercise price of these potential ordinary shares.

As at 30 June 2017, diluted loss per share is not presented in the financial statements as there is an anti dilutive effect on loss per share.

AN

NU

AL

R

EP

OR

T

20

18

74 Notes to the

Financial

Statements(continued)

12. Property, plant and equipment

Accumulated depreciation

At 1 July 2016 200,331 16,459,070 44,118 393,862 525,425 1,021,262 - 18,644,068 Charge for the year 271,455 2,090,040 29,670 28,815 75,404 315,633 - 2,811,017 Disposals - - - - - (165,559) - (165,559) Write offs - (848,231) - (258,789) (356,528) - - (1,463,548) Exchange differences - 92 - - - - - 92

At 30 June 2017 471,786 17,700,971 73,788 163,888 244,301 1,171,336 - 19,826,070 Charge for the year 314,926 2,297,381 57,150 39,795 92,122 383,876 - 3,185,250 Disposals - - - - - (259,999) - (259,999) Exchange differences - (5,251) - - - - - (5,251)

At 30 June 2018 786,712 19,993,101 130,938 203,683 336,423 1,295,213 - 22,746,070

Carrying amount

At 30 June 2018 19,532,473 17,364,009 325,452 356,205 177,052 1,228,425 2,416,162 41,399,778

At 30 June 2017 19,844,293 19,621,892 74,551 222,516 148,714 1,360,022 1,319,382 42,591,370

Group

Leasehold land and building

Factory

equipment, plant and

machinery Renovations

Office equipment,

furniture and fittings Computers

Motor vehicles

Leasehold building and

renovation under

construction Total RM RM RM RM RM RM RM RM

Cost

At 1 July 2016 16,133,850 32,749,113 148,339 617,907 741,413 2,244,461 7,174,421 59,809,504 Additions - 1,160,038 - 69,796 8,131 871,224 1,560,654 3,669,843 Transfer from land held for property development (Note 13) - - - - - - 1,084,810 1,084,810 Reclassification 4,182,229 4,318,274 - - - - (8,500,503) - Disposals - - - - - (584,327) - (584,327) Write offs - (951,050) - (301,299) (356,529) - - (1,608,878) Exchange differences - 46,488 - - - - - 46,488

At 30 June 2017 20,316,079 37,322,863 148,339 386,404 393,015 2,531,358 1,319,382 62,417,440 Additions 3,106 80,525 73,479 173,484 120,460 252,280 1,331,352 2,034,686 Disposals - - - - - (260,000) - (260,000) Reclassifications - - 234,572 - - - (234,572) - Exchange differences - (46,278) - - - - - (46,278)

At 30 June 2018 20,319,185 37,357,110 456,390 559,888 513,475 2,523,638 2,416,162 64,145,848

A N N U A L R E P O R T 2 0 1 8

12. Property, plant and equipment (continued)

2018 2017 RM RM

Group Group

(i) property, plant and equipment of the Group have been charged as collaterals to secure the term loan referred to in Note 27 are as follows:

(ii) the title deeds of the leasehold land of a subsidiary, Ultimate Ivory Sdn Bhd (“UI”) of RM195,113 (2017: RM195,113) have yet to be transferred to UI by the Pahang State Government; and

(iii) motor vehicles of the Group with carrying amount of RM641,216 (2017: RM615,050) are acquired under hire purchase arrangements.

12.1 At the reporting date:


Company Computers

Motor vehicles

Total

RM RM RM

Cost At 1 July 2016 7,087 714,031 721,118 Additions - 433,898 433,898 Disposals - (584,326) (584,326)

As at 30 June 2017/2018 7,087 563,603 570,690

Accumulated depreciation At 1 July 2016 3,912 295,263 299,175 Charge for the year 778 40,591 41,369 Disposals - (165,559) (165,559)

At 30 June 2017 4,690 170,295 174,985 Charge for the year 778 86,779 87,557

At 30 June 2018 5,468 257,074 262,542

Carrying amount

At 30 June 2018 1,619 306,529 308,148

At 30 June 2017 2,397 393,308 395,705

At carrying amount Leasehold land 10,617,621 10,751,175 Leasehold building 8,914,852 9,093,118

19,532,473 19,844,293

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

Group Group


(continued)

13. Land held for property development


2018 2017 2018 2017 RM RM RM RM

Group Company

12.2 During the reporting period, cash payments made to purchase property, plant and equipment are as follows:12.2 During the reporting period, cash payments made to purchase property, plant and equipment are

as follows:

Total additions 2,034,686 3,669,843 - 433,898 Additions through - hire purchase (210,000) (280,000) - - - other payables (1,054,463) (913,196) - (418,767)

770,223 2,476,647 - 15,131 Payments made for previous

year acquisition 33,702 - - -

Total cash payments 803,925 2,476,647 - 15,131

13. Land held for property development

At beginning of year - long term leasehold land 6,385,046 6,552,579 - development costs 11,913,933 3,817,534

18,298,979 10,370,113 Costs incurred during the reporting period: - development costs - 9,670,674 Transferred to property, plant and equipment (Note 12) - long term leasehold land - (195,113) - development costs - (889,697)

- (1,084,810) Transferred to property development costs (Note 19)

- long term leasehold land (1,232,246) - - development costs (10,291,449) -

(11,523,695) - Costs recognised in profit or loss during the year - long term leasehold land - (298,220) - development costs - (747,788)

- (1,046,008) Exchange differences (403,141) 389,010 At end of year - long term leasehold land 4,846,200 6,385,046 - development costs 1,525,943 11,913,933

6,372,143 18,298,979

The unexpired lease period of the long term leasehold land is 47 years (2017: 48 to 98 years). The unexpired lease period of the long term leasehold land is 97 years (2017: 98 years).

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

Group Company

14. Intangible asset

15. Investment in subsidiaries

Group License RM

Cost

At 1 July 2016/30 June 2017/30 June 2018 500,000

The Group had entered into a Master License Agreement with Green Patent Technologies Sdn Bhd (“GPTSB”), a company which is 65% owned by Dato’ Lim Thiam Huat, a major shareholder and a director of the Company for the grant of a master licence at purchase consideration of RM500,000 to use the inventions and designs owned by GPTSB as licensor upon the terms and conditions contained in the agreement. The licence is granted for an initial period of fifteen (15) years commencing the date when the intended factory or plant for manufacturing of pulps and papers is constructed and commissioned.

15. Investment in subsidiaries

Unquoted shares at cost At beginning of year 74,704,019 72,203,015 Subscription of additional shares in existing subsidiaries 3,999,998 2,499,998 Acquisition of subsidiaries 72 1,006

At end of year 78,704,089 74,704,019

Accumulated impairment losses At beginning year 14,121,335 13,503,335 Impairment loss for the year 610,000 618,000 Reversal of impairment loss (942,000) -

At end of year 13,789,335 14,121,335

Carrying amount 64,914,754 60,582,684

The details of the subsidiaries are as follows:

Group’s effective Country of interest and voting incorporation 2018 2017 Principal activities % %

Subsidiaries of the Company BHS Book Printing Sdn Bhd Malaysia 100 100 Printing of books and magazines Pustaka Sistem Pelajaran Malaysia 100 100 Book publisher Sdn Bhd

System Multimedia and Malaysia 100 100 Dormant Internet Sdn Bhd BHS DS Solution Sdn Bhd Malaysia 100 100 Construction and renovation works Nextgreen Pulp & Paper Malaysia 100 100 Processing and Sdn Bhd manufacturing of pulps and papers and related products Ultimate Ivory Sdn Bhd Malaysia 100 100 Industrial park developer and manager BHS Palau Incorporated* Republic of Palau 100 100 Property development and management Firasat Prima Sdn Bhd Malaysia 100 100 Property developer BHS Land Development Malaysia 100 100 Dormant Sdn Bhd BHS E Education Sdn Bhd Malaysia 100 100 Dormant Nextgreen Fertilizer Sdn Bhd Malaysia 100 100 Manufacture, import, export, and trading of fertilizers Nextgreen Energy Sdn Bhd Malaysia 100 - Dormant Nextgreen (Sarawak)

Sdn Bhd Malaysia 70 - Dormant

A N N U A L R E P O R T 2 0 1 8


(continued)

15. Investment in subsidiaries (continued)

Group’s effective Country of interest and voting incorporation 2018 2017 Principal activities

%

%

Subsidiaries of the Company

System Multimedia and Malaysia 100 100 Dormant Internet Sdn Bhd BHS DS Solution Sdn Bhd Malaysia 100 100 Construction and renovation works Nextgreen Pulp & Paper Malaysia 100 100 Processing and Sdn Bhd manufacturing of pulps and papers and related products Ultimate Ivory Sdn Bhd Malaysia 100 100 Industrial park developer and manager BHS Palau Incorporated* Republic of Palau 100 100 Property development and management Firasat Prima Sdn Bhd Malaysia 100 100 Property developer BHS Land Development Malaysia 100 100 Dormant Sdn Bhd BHS E Education Sdn Bhd Malaysia 100 100 Dormant Nextgreen Fertilizer Sdn Bhd Malaysia 100 100 Manufacture, import, export, and trading of fertilizers Nextgreen Energy Sdn Bhd Malaysia 100 - Dormant Nextgreen (Sarawak)

Sdn Bhd Malaysia 70 - Dormant

Subsidiary of Pustaka Sistem Pelajaran Sdn Bhd Pustaka Yakin Pelajar Malaysia - 100 Dormant Sdn Bhd Subsidiary of System Multimedia and Internet Sdn Bhd System Publishing House Malaysia 100 100 Dormant Sdn Bhd

* No statutory audit requirement

A N N U A L R E P O R T 2 0 1 8


During the reporting period:

(a) On 11 September 2017. The Company subscribed for 2 ordinary shares for RM2 representing 100% of the issued and paid up share capital of Nextgreen Energy Sdn Bhd (“NESB”). With the subscription, NESB became a subsidiary of the Company. The intended principal activity of NESB is produce and supply of biomass power and energy;

(b) On 25 September 2017, the Company subscribed 70 ordinary shares of Nextgreen (Sarawak) Sdn Bhd (“NSSB”), for RM70 representing 70% of the issued and paid up share capital of NSSB. With the acquisition and subscription, NSSB became a subsidiary of the Company. The intended principal activity of NSSB is manufacturing, trading and selling of pulp, paper and its related products and development of Integrated Green Technology Park;

The acquisition did not have a significant impact to the financial results of the Group.

(c) On 11 October 2017, Pustaka Sistem Pelajaran Sdn Bhd, a wholly owned subsidiary of the Company disposed of 50% equity interest in Pustaka Yakin Pelajar Sdn Bhd (“Yakin”) for a total consideration of RM146,717. Yakin became an associate of the Group. Subsequently, on 29 December 2017, the remaining 50% equity interest was disposed of for a total consideration of RM1,250,000. Following the disposal, Yakin ceased to be an associate of the Group;

(d) On 29 June 2018, the Company further subscribed for additional 999,998 ordinary shares in Nextgreen Fertilizer Sdn Bhd (“NFSB”) by way of capitalisation of amount due from NFSB of RM999,998; and

(e) On 29 June 2018, the Company further subscribed for additional 3,000,000 ordinary shares in Ultimate Ivory Sdn Bhd (“UISB”) by way of capitalisation of amount due from UISB of RM3,000,000.

In the previous reporting period:

(a) the Company has further subscribed for additional 1,500,000 new ordinary shares in Ultimate Ivory Sdn Bhd for a total cash consideration of RM1,500,000;

(b) the Company acquired 2 ordinary shares for a total consideration of RM2 representing 100% of the issued and paid up share capital of Firasat Prima Sdn Bhd (“Firasat Prima”). Subsequently, the Company has further subscribed for additional 999,998 new ordinary shares in the share capital of Firasat Prima for a total consideration of RM999,998. The reason for the acquisition is to expand into property development;

(c) the Company incorporated a wholly-owned subsidiary namely BHS Land Development Sdn Bhd (“BHS Land”). The Company has subscribed for 1,000 ordinary shares for a total consideration of RM1,000 representing 100% of the issued and paid up share capital of BHS Land. BHS Land’s intended activity is to expand into property development business;

(d) the Company incorporated a wholly-owned subsidiary namely BHS E Education Sdn Bhd (“BHS Education”). The Company has subscribed for 2 ordinary shares for a total consideration of RM2 representing 100% of the issued and paid up share capital of BHS Education. BHS Education’s intended activity is to expand into electronic based education book business; and

(e) the Company incorporated a wholly-owned subsidiary namely Nextgreen Fertilizer Sdn Bhd (“Nextgreen Fertilizer”). The Company has subscribed for 2 ordinary shares for a total consideration of RM2 representing 100% of the issued and paid up share capital of Nextgreen Fertilizer. Nextgreen Fertilizer’s intended activity is to expand into manufacture, import and export and trading of fertilizer business.

A N N U A L R E P O R T 2 0 1 8

Group Company

2018 2017 RM RM

Group Company

Disposalofsubsidiary

The disposals of Yakin had the following financial effects on the Group financial statements:


(continued)


The disposal did not have a significant impact to the financial results of the Group.

The gain on disposal of a subsidiary has been recognised in the Group’s profit or loss under “Other operating income” line item.

Impairmentofinvestmentinsubsidiaries During the reporting period, the directors performed an impairment test on the investment in the following

subsidiaries. Reversal of impairment loss and impairment loss have been recognised to write back and down respectively the investments to their recoverable amounts:

Reversal of impairment loss recognised Pustaka Sistem Pelajaran Sdn Bhd (942,000) - Impairment loss recognised BHS DS Solution Sdn Bhd - 618,000 Firasat Prima Sdn Bhd 350,000 - Nextgreen Fertilizer Sdn Bhd 260,000 -

Net (332,000) 618,000

The recoverable amount is determined based on the respective fair value less costs of disposal (arrived at based on the audited net assets) of these subsidiaries.

The amount of reversal of impairment loss recognised has been included in the Company’s profit or loss under “Other operating income” line item.

The amount of impairment loss recognised has been included in the Company’s profit or loss under “Other operating expenses” line item.

Group 2018 RM

Plant and equipment Other receivables, deposits and prepayments

Cash and cash equivalents Other payables and accruals

Less: Cash consideration received and receivable Fair value of investment in associate retained

Gain on disposal of a subsidiary

Cash consideration received and receivable Less: Cash and cash equivalents disposed of

Net cash inflow on disposal of a subsidiary

3,078 373,395 31,381 (135,100)

272,754(146,717) (146,717)

(20,680)

146,717 (31,381)

115,336

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

2018 2017 2018 2017 RM RM RM RM

2018 2017 2018 2017 RM RM RM RM

Group

Group Company

Group Company

2018 2017 RM RM

Group Group 16. Other investments

17. Deferred tax assets/(liabilities)

16. Other investments

Designated as at fair value through profit or loss - equity shares quoted in Malaysia at fair value 12,689 12,689

17. Deferred tax assets/(liabilities)

At beginning of year 1,226,089 (1,269,659) Recognised in profit or loss (Note 10) - current year 245,685 2,448,748 - overprovision in prior years - 47,000

245,685 2,495,748

At end of year 1,471,774 1,226,089

Presented after appropriate offsetting as follows: Deferred tax assets 4,175,874 3,850,089 3,000 3,000 Deferred tax liabilities (2,704,100) (2,624,000) (3,000) (3,000)

1,471,774 1,226,089 - -

Deferred tax liabilities are in respect of the following:

Tax effects of: Unrealised gain on foreign exchange (31,000) (143,000) - - Excess of tax capital allowances over related depreciation of plant and equipment (2,673,100) (2,481,000) (3,000) (3,000)

(2,704,100) (2,624,000) (3,000) (3,000)

A N N U A L R E P O R T 2 0 1 8

2018 2017 2018 2017 RM RM RM RM

2018 2017 2018 2017 RM RM RM RM

Group Gross Tax effects

Company Gross Tax effects


(continued)

17. Deferred tax assets/(liabilities) (continued)

The analysis of unrecognised deductible temporary differences, unused tax losses and unused tax credits is as follows:

17. Deferred tax assets/(liabilities) (continued)

Unabsorbed capital allowances 8,806,000 5,211,000 2,114,000 1,251,000 Unutilised business losses 14,587,000 13,405,000 3,500,000 3,217,000 Allowance for doubtful debts 3,220,000 5,990,000 773,000 1,438,000 Sales commission payable 465,000 1,097,000 112,000 263,000

27,078,000 25,703,000 6,499,000 6,169,000 Less: Deferred tax assets recognised (17,399,000) (16,042,000) (4,175,874) (3,850,089) Deferred tax assets not recognised 9,679,000 9,661,000 2,323,126 2,318,911

Unabsorbed capital allowances 25,000 15,000 6,000 4,000 Unutilised business losses 3,530,000 2,394,000 847,000 574,000

3,555,000 2,409,000 853,000 578,000 Less: Deferred tax assets recognised (13,000) (13,000) (3,000) (3,000) Deferred tax assets not recognised 3,542,000 2,396,000 850,000 575,000

Portion of the deferred tax assets of the Group and the Company have not been recognised as it is not probable that taxable profit will be available in the foreseeable future to utilise these unused tax benefits.

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

2018 2017 RM RM

Group Group

Group Group

18. Inventories

19. Property development costs

During the reporting period, the amount of inventories recognised as an expense in cost of sales of the Group was RM28,105,478 (2017: RM24,874,631).

18. Inventories

Raw materials 5,751,553 8,344,511 Work in progress 1,516,125 - Trading merchandise 6,265 4,818 Finished goods 1,434,111 412,923

8,708,054 8,762,252

51

19. Property development costs

At beginning of year - -

Transferred from land held for property development (Note 13)

- long term leasehold land 1,232,246 - - development costs 10,291,449 -

11,523,695 - Cost incurred during the reporting period

- development costs 11,393,963 -

Costs recognised in income statement - long term leasehold land (169,608) - - development costs (825,000) -

(994,608) - At end of the year

- long term leasehold land 1,062,638 - - development costs 20,860,412 -

Carrying amount of property development costs 21,923,050 -

Included in development costs of the Group during the reporting period is other staff costs of RM748,299 (2017: RM Nil).

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

2018 2017 RM RM

2018 2017 RM RM

Group Group

Group Group

Group Group

20. Trade receivables


(continued)

The Group’s normal trade credit terms is range from 30 to 120 days (2017: 30 to 120 days). Other credit terms are determined on a case to case basis.

The following table provides information on the trade receivables’ credit risk exposure.

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

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 not secured by any collateral or credit enhancements.

The movements in the allowances account for trade receivables that are individually impaired at reporting date are as follows:

The allowance no longer required and allowance for doubtful debts amounts have been included in the “Other operating income” and “Other operating expenses” line item respectively in the Group’s profit or loss.

20. Trade receivables

Trade receivables 18,522,329 24,250,927 Less: Allowance for doubtful debts (3,219,919) (5,989,717)

15,302,410 18,261,210

Not impaired or past due 8,579,201 7,762,505 1 - 30 days past due not impaired 4,902,003 981,983 31 - 60 days past due not impaired 1,125,664 549,050 61 - 90 days past due not impaired 45,936 674,590 91 - 120 days past due not impaired 472,934 281,534 More than 120 days past due not impaired 176,672 8,011,548

15,302,410 18,261,210 Impaired 3,219,919 5,989,717

18,522,329 24,250,927

At beginning of year 5,989,717 1,936,018 Allowance for the year 282,283 4,055,198 Allowance no longer required (3,052,081) (1,499)

At end of year 3,219,919 5,989,717

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

Group Group

2018 2017 2018 2017 RM RM RM RM

Group Company

21. Other receivables, deposits and prepayments

21. Other receivables, deposits and prepayments

Amount due from subsidiaries - - 73,494,802 74,993,732 Advance payment to suppliers 87,081 749,081 - - Advance payment for

development costs

2,578,843

-

-

- Sundry deposits 333,257 461,714 500 - Other receivables 218,477 460,805 2,914 2,974 Disposal proceeds receivable

arising from disposal of an associate 1,250,000 - - -

Goods and services tax recoverable 192,364 138,355 - - Prepayments 492,322 493,851 - - Commitment fee and earnest deposits for: - purchase of raw materials 388,333 388,333 - - - PRIMA housing development project - 861,288 - - Deposit paid for acquisition of land - refundable

2,120,000

-

-

-

Deposits paid for purchase of land held for development - non refundable 400,000 400,000 - - Deposits paid for purchase of plant and equipment and construction of factory building: - refundable 99,689 5,803,030 - - - non refundable 28,404,406 28,404,406 - -

36,564,772 38,160,863 73,498,216 74,996,706

Less: non current portion Disposal proceeds receivable

arising from disposal of an associate (250,000) - - -

Amount due from subsidiaries - - (72,807,818) -

36,314,772 38,160,863 690,398 74,996,706

The non current portion of the disposal proceeds receivable arising from disposal of an associate is as follows: Later than 1 year and not later than 2 years 250,000 -

The amount due from subsidiaries represents unsecured interest free advances receivable on demand.

Following the issuance of the Financial Reporting Standards Implementation Committee (“FRSIC”), FRSIC Consensus 31 – Classification of Amount Due from Subsidiaries and Amount Due to Holding Company that is Repayable on Demand by The Malaysian Institute of Accountants on 4 July 2018, the directors of the Company have reassessed the amount due from subsidiaries and determined that RM72,807,818 shall be classified as non current as the amounts are unlikely to be realised within twelve months after the reporting date.

A N N U A L R E P O R T 2 0 1 8

2018 2017 2018 2017 RM RM RM RM

Group Company

2018 2017 2018 2017 RM RM RM RM

Group Company

23. Cash and bank balances

22. Short term investments


(continued)

Short term investments relate to portfolio of money market fund investments placed with licensed banks/fund management companies. These funds aim to provide a regular stream of monthly income through direct investment portfolio investing in short term money market instruments and other fixed income instruments.

22. Short term investments

Designated as at fair value through profit or loss Quoted funds in Malaysia at fair value upon initial recognition At beginning of year - 9,413,112 - 8,571,104 Additions - 2,010,570 - 2,010,570 Disposals - (11,423,682) - (10,581,674)

At end of year - - - -

Fair value adjustments: At beginning of year - 66,749 - 3,164 Changes recognised in profit or loss - 24,528 - 24,528 Disposals - (91,277) - (27,692)

At end of year - - - -

Carrying amount - - - -

23. Cash and bank balances

Cash in hand 31,000 1,000 - - Cash at banks - interest bearing 297,083 802,089 769 1,776 - non interest bearing 257,475 684,431 - -

585,558 1,487,520 769 1,776

A N N U A L R E P O R T 2 0 1 8

2018 2017 2018 2017 RM RM No. of No. of ordinary ordinary shares shares RM RM

Group and Company

24. Share capital

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions.

Warrants 2015/2020

The Company had in October 2015 issued 198,290,398 warrants in conjunction with its rights issue exercise. The warrants are constituted by a deed poll dated 13 October 2015 (“Deed Poll”).

The salient features of the warrants are as follows:

(a) The issue date of the warrants is 19 October 2015 and the expiry date is on 18 October 2020. Any warrants not exercised at the expiry date will lapse and cease to be valid for any purpose;

(b) Each warrant entitles the registered holder the right to subscribe for one (1) new ordinary share in the Company at an exercise price of RM0.60 per ordinary share until the expiry of the exercise period;

(c) The exercise price and the number of warrants are subject to adjustment in the event of alteration to the share capital of the Company in accordance with the provisions in the Deed Poll;

(d) The warrant holders are not entitled to participate in any distribution and/or offer of further securities in the Company (except for the issue of new warrants pursuant to adjustment as mentioned in item (c) above), unless and until such warrant holders exercise their rights to subscribe for new ordinary shares; and

(e) The new ordinary shares to be issued upon exercise of the warrants, shall upon issuance and allotment, rank pari passu with the then existing ordinary shares, except that they will not be entitled to dividends, rights, allotments and/or other distributions, declared by the Company which entitlement thereof precedes the allotment date of the new ordinary shares allotted pursuant to the exercise of the warrants.

The movement in the Company’s warrants during the reporting period are as follows:

24. Share capital

No. of ordinary

No. of ordinary

shares shares RM RM

Issued and fully paid: At beginning of Issue of shares pursuant to

year 458,366,718 419,145,199 114,591,680 104,786,300

private placement - 39,221,519 - 9,805,380

At end of year 458,366,718 458,366,718 114,591,680 114,591,680

Number of unexercised warrants 198,290,398 - - 198,290,398

Entitlement for ordinary shares

Balance at Balance at 1.7.2017 Exercised Expired 30.6.2018

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

Group Group and Company

2018 2017 2018 2017 RM RM RM RM

Group Company


(continued)

25. Reserves

25. Reserves

Distributable : Retained profits 9,585,804 11,357,052 11,493,412 12,693,773 Non distributable: Share premium (Note 25.1) 2,797,932 4,963,826 2,797,932 4,963,826 Foreign currency translation reserve (315,231) 123,459 - - Merger reserve (16,832,846) (16,832,846) - - Treasury shares (Note 25.2) (8,194,763) (14,272,720) (8,194,763) (14,272,720) Warrant reserve 16,854,684 16,854,684 16,854,684 16,854,684

(5,690,224) (9,163,597) 11,457,853 7,545,790

3,895,580 2,193,455 22,951,265 20,239,563

25.1 Share premium

The movements in the share premium account at reporting date are as follows:

At beginning of year 4,963,826 - Issue of shares pursuant to private placement - 4,963,826 Disposals of treasury shares (2,165,894) -

At end of year 2,797,932 4,963,826

Share premium represents the excess of the consideration received over the nominal value of the shares issued by the Company.

The Group’s foreign exchange translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

Merger reserve represents the difference between the nominal value of shares issued by the Company over the nominal value of shares acquired in exchange for those shares, accounted for using the merger method of accounting.

Warrant reserve represents the reserves arising from the rights issue with free detachable warrants effected in October 2015. This reserve is determined based on the estimated fair value of the warrants immediately upon the listing and quotation thereof.

25.1 Share premium

The movements in the share premium account at reporting date are as follows: 25.1 Share premium

The movements in the share premium account at reporting date are as follows:

At beginning of year 4,963,826 - Issue of shares pursuant to private placement - 4,963,826 Disposals of treasury shares (2,165,894) -

At end of year 2,797,932 4,963,826

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

Group Company

2018 2017 2018 2017 RM RM No. of No. of treasury treasury shares shares RM RM

Group and Company

26. Hire purchase liabilities

25.2 Treasury shares

25. Reserves (continued)

25.1 Share Premium (continued)

Share premium represents the excess of the consideration received over the nominal value of the shares issued by the Company. Section 618(2) of the Companies Act 2016 states that upon the commencement of Section 74, the share premium account shall become part of the share capital. The share premium account is currently maintained pursuant to the transitional provisions set out in Section 618(3) and shall become part of the share capital within twenty-for months upon commencement of Section 74.

25.2 Treasury shares

At beginning of year 26,940,000 26,930,000 (14,272,720) (14,268,574) Shares repurchased - 10,000 - (4,146) Shares disposed (10,574,900) - 6,077,957 -

At end of year 16,365,100 26,940,000 (8,194,763) (14,272,720)


Amount outstanding 389,276 379,869 Less: Interest in suspense (35,290) (18,094)

Principal portion 353,986 361,775 Less: Portion due within one year (203,735) (192,138)

Non current portion 150,251 169,637

The non current portion of the hire purchase obligations is payable as follows: Later than 1 year and not later than 2 years 58,642 153,027 Later than 2 years and not later than 5 years 91,609 16,610

150,251 169,637

Treasury shares relate to ordinary shares of the Company that are held by the Company in accordance with Section 127(4)(b) of the Companies Act 2016 and are presented as a deduction from shareholders’ equity.

Of the total 458,366,718 (2017: 458,366,718) issued and fully paid ordinary shares as at 30 June 2018, 16,365,100 (2017: 26,940,000) are held as treasury shares by the Company. As at 30 June 2018, the number of outstanding ordinary shares in issue after the setoff is therefore 442,001,618 (2017: 431,426,718) ordinary shares.


Amount outstanding 389,276 379,869 Less: Interest in suspense (35,290) (18,094)

Principal portion 353,986 361,775 Less: Portion due within one year (203,735) (192,138)

Non current portion 150,251 169,637

The non current portion of the hire purchase obligations is payable as follows: Later than 1 year and not later than 2 years 58,642 153,027 Later than 2 years and not later than 5 years 91,609 16,610

150,251 169,637

The weighted average effective interest rate of the hire purchase obligations is 5.61% (2017: 4.82%).

A N N U A L R E P O R T 2 0 1 8

2018 2017 2018 2017 RM RM RM RM

Group Company

2018 2017 RM RM

Group Group


(continued)

27. Term loan

28. Trade payables

29. Other payables and accruals

The term loan is secured by way of:

(i) A registered open all monies first party charge stamped nominally over the leasehold land and building as disclosed in Note 12; and

(ii) Corporate guarantee given by the Company.

27.

Amount outstanding 5,898,139 6,578,699 Less: Portion due within one year (Note 30) (750,722) (719,315)

Non current portion 5,147,417 5,859,384 The non current portion of the term loan is payable as follows: Later than 1 year and not later than 2 years 785,366 752,510 Later than 2 years and not later than 5 years 2,580,326 2,472,378 Later than 5 years 1,781,725 2,634,496

5,147,417 5,859,384


Amount due to - A subsidiary - - 883,087 721,794 - A former subsidiary - - - 300,000 Amount due to a director of the Company 105,750 157,371 - - Overpayments from customers 122,797 127,768 - - Factory construction and renovation costs payable to suppliers 1,054,463 494,429 - - Goods and services tax payable 5,993 6,135 5,993 6,135 Accruals - sales commission 465,042 1,096,944 - - - others 293,444 299,606 131,126 60,370 Rental related expenses payable 1,588,247 1,562,712 - - Other payables 1,155,616 696,533 243,116 206,047

4,791,352 4,441,498 1,263,322 1,294,346

The normal trade credit terms granted to the Group range from 30 to 120 days (2017: 30 to 120 days).


Amount due to - A subsidiary - - 883,087 721,794 - A former subsidiary - - - 300,000 Amount due to a director of the Company 105,750 157,371 - - Overpayments from customers 122,797 127,768 - - Factory construction and renovation costs payable to suppliers 1,054,463 494,429 - - Goods and services tax payable 5,993 6,135 5,993 6,135 Accruals - sales commission 465,042 1,096,944 - - - others 293,444 299,606 131,126 60,370 Rental related expenses payable 1,588,247 1,562,712 - - Other payables 1,155,616 696,533 243,116 206,047

4,791,352 4,441,498 1,263,322 1,294,346

The amounts due to a subsidiary, a former subsidiary and a director of the Company represent unsecured interest free advances repayable on demand.

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

Group Group

30. Short term borrowings

31. Significantrelatedpartydisclosures

31.1 Related party transactions

Significant transactions with related parties are as follows:

30. Short term borrowings

Foreign currency trade loan - unsecured - 263,616 Term loan – current portion (Note 27) 750,722 719,315

750,722 982,931

The average effective interest rates are as follows: 2018 2017

% % Foreign currency trade loan - 3.46 Term loan 4.77 4.52

31. Significant related party disclosures

31.1 Related party transactions Significant transactions with related parties are as follows:

Group Company Type of 2018 2017 2018 2017 transactions RM RM RM RM

With subsidiaries: - BHS Book Printing Management

Sdn Bhd fee income - - 541,405 396,898 Printing

expenses - - 23,975 24,160 - Pustaka Sistem Management Pelajaran Sdn Bhd fee income - - 1,943 3,755 With persons connected to a director of the Company

- Loke Lai Wah Rental expense 144,000 132,000 - - - Lim Kean Kiat Rental expense 36,000 33,000 - -

Group Company

31. Significant related party disclosures

31.1 Related party transactions Significant transactions with related parties are as follows:

Group Company Type of 2018 2017 2018 2017

transactions RM RM RM RM

With subsidiaries: - BHS Book Printing Management

Sdn Bhd fee income - - 541,405 396,898 Printing

expenses - - 23,975 24,160 - Pustaka Sistem Management Pelajaran Sdn Bhd fee income - - 1,943 3,755 With persons connected to a director of the Company

- Loke Lai Wah Rental expense 144,000 132,000 - - - Lim Kean Kiat Rental expense 36,000 33,000 - -

A N N U A L R E P O R T 2 0 1 8

Group

Company


(continued)

31. Significantrelatedpartydisclosures(continued)

31.2 Related party balances

Individually significant outstanding balances arising from transactions other than trade transactions are as

31.2 Related party balances Individually significant outstanding balances arising from transactions other than trade transactions are as follows:

Group Type of 2018 2017 transactions RM RM

Financial liability With a director of the Company

- Dato’ Lim Thiam Huat Advances 105,750 157,371

Type of 2018 2017

transactions RM RM

Financial assets With subsidiaries:

- BHS Book Printing Sdn Bhd Advances 32,223,228 34,655,340 - Sistem Multimedia and Internet Sdn Bhd Advances 30,000 30,000 - System Publishing House Sdn Bhd Advances 520,000 510,000 - Nextgreen Pulp & Paper Sdn Bhd Advances 25,743,746 25,743,746 - Ultimate Ivory Sdn Bhd Advances 10,025,579 9,325,579 - BHS Palau Incorporated Advances 4,815,265 4,720,354 - Firasat Prima Sdn Bhd Advances 2 2 - BHS E Education Sdn Bhd Advances 6,151 6,151 - BHS Land Development Sdn Bhd Advances 7,402 2,560 - Nextgreen (Sarawak) Sdn Bhd Advances 12,211 - - Nextgreen Energy Sdn Bhd Advances 5,266 - - Nextgreen Fertilizer Sdn Bhd Advances 105,952 - Financial liabilities With a subsidiary: - Pustaka Sistem Pelajaran Sdn Bhd Advances 883,087 721,794 With a former subsidiary: - Pustaka Yakin Pelajar Sdn Bhd Advances - 300,000

31.3 Compensation of key management personnel

Key management personnel are those personnel having authority and responsibility for planning, directing and controlling the activities of the entity either directly or indirectly.

The key management personnel comprises mainly executive directors of the Company whose remuneration is disclosed in Note 6.

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

Group Group

2018 2017 RM RM

Group Group

32. Commitments

32.1 Capital commitments

Capital expenditures not provided for in the financial statements are as follows:

32. Commitments 32.1 Capital commitments

Capital expenditures not provided for in the financial statements are as follows:

Authorised and contracted for 29,986,831 7,222,094

Analysed as follows: Property, plant and equipment 29,986,831 7,222,094

The future minimum lease payments under non cancellable

operating lease are as follows: Not later than 1 year 32,000 32,000

32.2 Operating lease commitments

33. Segment information

33.1 Business segment

For management purposes, the Group is now organised into five reportable segments comprising printing and publishing, manufacturing using green technology, property development and management, general construction and investment holding.

Management monitors the operating results of its reportable segments as well as relying on the segment information as disclosed below for the purpose of making decision about resource allocation and performance assessment.

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33. Segment information (continued)

33.1 Business segment (continued)

The following table provides an analysis of Group’s revenue, results, assets, liabilities and other information by reportable segments.

94 Notes to the

Financial

Statements(continued)

Property Manufacturing development Printing and using green and General Investment 2018 publishing technology management construction holding Eliminations Consolidated RM RM RM RM RM RM RM Revenue External sales 26,853,396 - 2,995,186 - - - 29,848,582 Inter-segment sales 51,292 - - - 543,348 (594,640) -

26,904,688 - 2,995,186 - 543,348 (594,640) 29,848,582

Results (Loss)/Profit from

operations (61,877) (706,704) 389,379 (142,873) (1,225,743) (284,854) (2,032,672) Finance (costs)/income (321,570) (4,165) (7,944) (1,145) 4 - (334,820) Share in profit of

associate 352,335 - - - - - 352,335

(Loss)/Profit before tax (31,112) (710,869) 381,435 (144,018) (1,225,739) (284,854) (2,015,157) Income tax expense 257,000 (1,776) - - - (11,315) 243,909

Net profit/(loss) for the year 225,888 (712,645) 381,435 (144,018) (1,225,739) (296,169) (1,771,248)

Assets Segment assets 78,542,734 38,759,971 40,957,003 3,498,433 74,749,990 (101,814,670) 134,693,461

Liabilities Segment liabilities 49,844,380 29,125,840 30,820,817 5,537,065 1,838,952 (100,960,883) 16,206,171

Other information

Additions to non current assets 456,373 1,573,438 4,875 - - - 2,034,686 Depreciation 2,837,367 92,031 187,594 27,312 87,557 (46,611) 3,185,250 Non-cash items other than depreciation and amortisation: Allowance for doubtful

debts 282,283 - - - - - 282,283 Allowance for doubtful debts no longer required (3,052,081) - - - - - (3,052,081) Gain on foreign exchange - unrealised (128,937) - - - - - (128,937)

Reversal of impairment loss on investments in

subsidiaries - - - - (942,000) 942,000 -

Impairment loss on investment in subsidiaries - - - - -610,000 (610,000)

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Property Manufacturing development Printing and using green and General Investment

publishing technology management construction holding Eliminations Consolidated RM RM RM RM RM RM RM

2017 Revenue External sales 19,934,079 - 5,266,404 - - - 25,200,483 Inter-segment sales 98,595 - - 384,340 400,653 (883,588) -

20,032,674 - 5,266,404 384,340 400,653 (883,588) 25,200,483

Results (Loss)/Profit from

operations (11,297,972) (599,872) 2,946,032 (2,202,376) (2,559,473) 1,508,147 (12,205,514) Finance (costs)/income (361,189) (140) (10,099) (3,642) 10,753 - (364,317)

(Loss)/Profit before tax (11,659,161) (600,012) 2,935,933 (2,206,018) (2,548,720) 1,508,147 (12,569,831) Income tax expense 2,375,380 - - (41,784) - 175,961 2,509,557

Net (loss)/profit for the year (9,283,781) (600,012) 2,935,933 (2,247,802) (2,548,720) 1,684,108 (10,060,274)

Assets Segment assets 79,469,970 37,719,583 33,566,262 3,548,307 78,945,882 (102,150,049) 131,099,955

Liabilities Segment liabilities 51,270,664 28,372,907 26,372,821 5,442,921 4,448,346 (101,592,839) 14,314,820

Other information

Additions to non current assets 1,618,922 234,572 10,176,179 2,000 433,898 874,946 13,340,517 Depreciation 2,547,008 49,935 160,694 27,212 41,369 (15,201) 2,811,017 Non-cash items other than depreciation and amortisation:

Allowance for doubtful debts 4,055,198 - - - - - 4,055,198 Fair value gain on financial assets at fair value through profit or loss - - - - (24,528) - (24,528) Gain on foreign exchange - unrealised (589,093) - (260,467) - - - (849,560) Impairment loss on investment in a subsidiary - - - - 618,000 (618,000) - Plant and equipment written off 145,330 - - - - - 145,330

33.1 Business segment (continued)

A N N U A L R E P O R T 2 0 1 8


(continued)

33 Segment information (continued)

33.2 Geographical segments

In presenting information on the basis of geographical segments, segment revenue is based on geographical location of customers. Segment assets are based on the geographical location of the assets.

Malaysia 19,588,713 18,451,356 43,048,049 55,152,775 Nigeria 9,034,487 5,416,634 - - Kenya 1,225,382 1,332,493 - - Republic of Palau - - 6,958,335 7,476,352

29,848,582 25,200,483 50,006,384 62,629,127

Customer A - 5,266,404 Customer B 3,452,324 - Customer C 2,995,186 -

6,447,510 5,266,404

2018 2017 2018 2017 RM RM RM RM

Revenue Non-current assets

2018 2017 RM RM

33.3 Customers segment information

Revenue from transactions with major customers that individually accounted for 10 percent or more of the Group’s revenue are summarised below:

Malaysia 19,588,713 18,451,356 43,048,049 55,152,775 Nigeria 9,034,487 5,416,634 - - Kenya 1,225,382 1,332,493 - - Republic of Palau - - 6,958,335 7,476,352

29,848,582 25,200,483 50,006,384 62,629,127

Customer A - 5,266,404 Customer B 3,452,324 - Customer C 2,995,186 -

6,447,510 5,266,404

A N N U A L R E P O R T 2 0 1 8

2018 2017 2018 2017 RM RM RM RM

Group Company

34. Financialinstrumentsandfinancialrisks

34.1 Categories of financial instruments

The following table sets out the financial instruments as at the reporting date:

Financial assets Loans and receivables: - trade and other receivables excluding prepayments 19,323,833 25,066,759 73,498,216 74,996,706 - cash and bank balances 585,558 1,487,520 769 1,776

19,909,391 26,554,279 73,498,985 74,998,482 Financial assets at fair value through profit or loss: - other investments 12,689 12,689 - -

19,922,080 26,566,968 73,498,985 74,998,482

Financial liabilities Amortised cost: - term loan (floating rate) 5,898,139 6,578,699 - - - hire purchase liabilities (fixed rate) 353,986 361,775 - - - short term borrowings (floating rate) - 263,616 - - - trade and other payables 9,947,736 7,104,281 1,257,329 1,288,211

16,199,861 14,308,371 1,257,329 1,288,211

34.2 Financial risk management objectives and policies

The Group’s overall financial risk management programme seeks to minimise potential adverse effects on financial performance of the Group.

The Group does not hold or issue derivative financial instruments for speculative purposes.

There has been no change in the Group’s exposure to these financial risks or the manner in which it manages and measures the risk.

Credit risk management

Credit risk refers to the risk that a counterparty will default on its obligations resulting in financial loss to the Group. The Group’s credit risk is primarily attributable to its trade and other receivables. Credit risks are minimised and monitored via strictly limiting the Group’s associations to business partners with high creditworthiness. For other financial assets including cash and bank balances and other investments, the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group’s exposure and the credit ratings of its counterparties are continuously monitored on an ongoing basis via the Group’s management reporting procedures.

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

2018 2017 RM RM

Group Group

Group Company

34.2 Financial risk management objectives and policies (continued)

Credit risk management (continued)

Atreportingdate,therewerenosignificantconcentrationsofcreditriskotherthanthefollowing:

Amount due from two customers as at 30 June 2017 - 12,175,296 Refundable deposits paid for purchase of plant and equipment and construction of factory building - 5,803,030

Amount due from two (2017: two) subsidiaries 57,966,974 60,399,086


(continued)

The Company provides unsecured financial guarantee to a licensed bank in respect of banking facilities granted to a subsidiary. Accordingly, the Company is contingently liable to the extent of credit facilities utilised by the subsidiary. The Company monitors on an ongoing basis the results of the subsidiary and repayments made by it. The maximum exposure to credit risk amounts to RM5,898,139 (2017: RM6,578,699) representing the outstanding banking facilities of the subsidiary as at reporting date.

The Company has evaluated the fair value of the corporate guarantee and is of the view that the consequential liabilities derived from its guarantee to the bank with regard to the subsidiary are minimal. The subsidiary for which the guarantee was provided is in favourable equity position, with no default in the payment of borrowing and credit facilities.

Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in the market interest rates.

The Group’s primary interest rate risk relates to interest bearing debts. The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. The information on maturity dates and effective interest rates of financial liabilities are disclosed in their respective notes.

The sensitivity analysis below has been determined based on the exposure to interest rates for the banking facilities at the reporting date. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis point higher/lower and all other variables were held constant, the Group’s loss before tax would increase/decrease by RM29,000 (2017: RM32,000).

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Liquidity risk management

The Group maintains sufficient cash and bank balances, and internally generated cash flows to finance its activities. The Group finances its operations by a combination of equity and bank borrowings.

The following tables detail the remaining contractual maturity for non derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay.

Group Contractual cash flows (including interest payments)

Carrying amount Total

On demand or within 1

year Within 1 to 2

years Within 2 to

5 years More than 5

years 2018 RM RM RM RM RM RM

Non interest bearing debts 9,947,736 9,947,736 9,947,736 - - - Interest bearing debts 5,898,139 6,929,753 1,001,892 1,001,892 3,005,676 1,920,293 Hire purchases liabilities 353,986 389,276 212,287 66,046 110,943 -

16,199,861 17,266,765 11,161,915 1,067,938 3,116,619 1,920,293

2017 Non interest bearing debts 7,104,281 7,104,281 7,104,281 - - - Interest bearing debts 6,842,315 8,084,124 1,266,648 1,001,982 3,005,946 2,809,548 Hire purchases liabilities 361,775 379,869 200,152 162,979 16,738 -

14,308,371 15,568,274 8,571,081 1,164,961 3,022,684 2,809,548

A N N U A L R E P O R T 2 0 1 8


Liquidity risk management (continued)


(continued)

Foreign exchange risk management

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group operates internationally and is exposed to foreign exchange risk. Foreign currency denominated assets and liabilities together with expected cash flows from highly probable sales and purchases give rise to foreign exchange exposures.

The net unhedged financial assets and financial liabilities of the Group companies that are not denominated in their functional currencies are as follows:

There is no such exposure for the Company.

The following table details the sensitivity to a 10% increase and decrease in the relevant foreign currencies against the respective functional currencies of the Group. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items adjusted at the period end for a 10% change in foreign currency rates. If the relevant foreign currencies strengthen by 10% against the respective functional currencies of the Group, loss before tax will decrease by:

Liquidity risk management (continued)

Company

Contractual cash flows (including interest payments)

Carrying amount Total

On demand or within 1

year 2018 RM RM RM

Non interest bearing debts 1,257,329 1,257,329 1,257,329 2017 Non interest bearing debts 1,288,211 1,288,211 1,288,211

Net Financial Assets Held in Non-functional Currencies

Functional currency of the Group

United States Dollar

RM

Nigerian Naira

RM

Net RM

2018

Ringgit Malaysia 7,778,000 - 7,778,000 Net Financial Assets Held in

Non-functional Currencies Functional currency of the Group

United States Dollar

RM

Nigerian Naira

RM

Net RM

2017 Ringgit Malaysia 8,489,000 75,000 8,564,000

A N N U A L R E P O R T 2 0 1 8

2018 2017 RM RM

Group Group


Foreign exchange risk management (continued)Foreign exchange risk management (continued)

United States Dollar 777,800 848,900 Nigerian Naira - 7,500

35. Fairvalueof assetsandliabilities

35.1 Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices); and

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

35.2 Assets measured at fair value35.2 Assets measured at fair value

Group Fair value measurements at the end of the reporting

period using Level 1 Level 2 Level 3 Total

2018 RM RM RM RM

Recurring fair value measurements Financial assets Other investments - quoted equity shares 12,689 - - 12,689

2017 Recurring fair value measurements Financial assets Other investments - quoted equity shares 12,689 - - 12,689

Company Fair value measurements at the end of the reporting


2018 RM RM RM RM

Non recurring fair value measurements Non financial assets: Investment in subsidiaries - impaired subsidiaries carried at fair value less cost of disposal - - 10,189,434 -

2017 Non recurring fair value measurements Non financial assets: Investment in subsidiaries - impaired subsidiaries carried at fair value less cost of disposal - - 7,830,000 7,830,000

The opposite applies if the relevant foreign currencies weaken by 10% against the functional currency of the Group.

Market price risk

Market price is the risk that the fair value of future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group is exposed to market price risk arising from its investment in quoted equity shares. The quoted equity shares in Malaysia are classified as held for trading financial assets.

Management monitors the equity instruments on a portfolio basis. Management believes that the changes of market price of its investment in quoted equity instruments would not lead to significant changes to the performance of the Group as the carrying amount of the quoted equity instruments is not material.

A N N U A L R E P O R T 2 0 1 8

35.2 Assets measured at fair value (continued)


(continued)35.2 Assets measured at fair value



2018 RM RM RM RM





2018 RM RM RM RM



35.2 Assets measured at fair value



2018 RM RM RM RM





2018 RM RM RM RM



There were no transfers between these levels in the current and previous reporting periods.

35.3 Financial assets and financial liabilities not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The carrying amounts of cash and cash equivalents, receivables and payables approximate their respective fair values due to the relatively short-term maturity of these financial instruments.

The fair value of the Group’s borrowings approximates their carrying amounts as these instruments were entered with interest rates which are reasonable approximation of the market interest rates on or near the reporting date.

A N N U A L R E P O R T 2 0 1 8

36. Capitalstructureandcapitalriskmanagement

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholder, return capital to shareholder, issue new shares, or sell assets to reduce debt. No changes were made in the objectives, policies or processes during the reporting period ended 30 June 2018 and 30 June 2017.

The Group is not subject to any externally imposed capital requirements.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital. The Group includes within net debt, loans and borrowings less cash and bank balances. Capital includes equity attributable to the owners of the Company. There were no changes in the Group’s approach to capital management during the

2018 2017 2018 2017 RM RM RM RM

Group Company

37. Comparativefigures

Certain comparative figures of the Group have been reclassified to conform with current year’s presentation.

Loans and borrowings 6,252,125 7,204,090 - - Less: cash and bank

balances (585,558) (1,487,520) (769) (1,776)

Net debt/(cash) 5,666,567 5,716,570 (769) (1,776)

Total equity 118,487,290 116,785,135 137,542,945 134,831,243 Gearing ratio (%) 4.8 4.9 N/A N/A

As previously reported Reclassification As restated

RM RM RM Group Statement of comprehensive income

For the year ended 30 June 2017

Cost of sales (26,313,993) 356,017 (25,957,976) Other operating expenses (12,489,777) (356,017) (12,845,794)

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104 List of

Group’s

PropertiesDescription/Existinguse

Approximateageofbuilding

Leaseholdexpirydate

Netbookvalueasat30.6.2018(RM)

Dateofacquisition

Landarea

H.S.(M): 13154 Lot PT 23675

in the Mukim of Ceras, of Hulu Langat,

Selangor.

Ngetkib HamletAirai State Palau

Cadastral LotNo. 037N06

Kg. Paloh HinaiMukim Lepar,Daerah Pekan,

Pahang Darul Makmur

Factory 18 years 7,356 30.12.2098 19,532,473 31.12.2014 square metr

Land held – 16,225 30.09.2114 6,372,143 23.06.2016 for square development metres

Land held – 13.91 Pending 21,923,950 10.03.2016 for issuance of development land title from Pejabat Tanah Pahang

Location/address

A N N U A L R E P O R T 2 0 1 8


as at 28 September 2018

Issued Share Capital : RM114,591,679.50 represented by 458,366,718 ordinary sharesClass of shares : Ordinary shares Voting rights : One vote per shareholder on a show of hands or one vote per

ordinary share on a poll

Distribution of Shareholdings

Size of holding No. of % of No. of % of Issued Shareholders Shareholders Shares Share Capital

Less than 100 147 8.06 5,508 0.00

100 to 1,000 227 12.45 99,811 0.02

1,001 to 10,000 461 25.27 2,935,698 0.65

10,001 to 100,000 697 38.21 25,869,187 5.76

100,001 – 21,571,334 (*) 288 15.79 272,935,413 60.79

21,571,335 and above (**) 4 0.22 147,156,001 32.77

Total 1,824 100.00 449,001.618** 100.00

Remarks: * Less than 5% of issued shares ** 5% and above of issued shares *** Excluding 9.365,100 treasury shares

Directors’ Shareholdings as Per Register of Directors’ Shareholdings

Directors

Direct Indirect

No. of Shares % of Issued No. of Shares % of Issued Share Capital Share Capital

Dato’Dr.HajiSohaimiBinShahadan - - - -

Dato’LimThiamHuat 74,452,564 16.582 4,810,000 1.07

KooThiamYoong 5,670,368 1.26 - -

DatukLeeHwaCheng 6,362,076 1.42 4,177,776* 0.93

DatukLawrenceYeoChuaPoh - - 30,000,000@ 6.68

ChewYuitYoo - - 261,248# 0.06

ThiangChewLan 554,805 0.12 280,186# 0.06

Dato’Dr.KoeSengKheng 450,602 0.10 - -

Nor’AzaminBinSalleh - - - -

HidayahBintiAriffin - - - -

Notes: * Deemed interested by virtue of his interest in Hebat Koordinasi (Asia) Sdn. Bhd. pursuant to Section 8 of the Companies Act 2016@ Deemed interested by virtues of his interest in Amechanus Ventures Sdn. Bhd. pursuant to section 8 of the Companies Act 2016# Deemed interested by virtue of her spouse’s interest pursuant to Section 59 (9) of the Companies Act 2016.

A N N U A L R E P O R T 2 0 1 8


(continued)

Substantial Shareholders as Per Register of Substantial Shareholders

Direct Indirect

Substatial No. of Shares % of Issued No. of Shares % of Issued Shareholders Share Capital Share Capital

Dato’ Lim Thiam Huat 74,452,564 16.582 4,810,000 1.07

Federal Land Development 44,423,701 9.89 - - Authority

Ling Siew Luan 39,774,399 8.86 - -

Amechanus Ventures 30,000,000 6.68 - - Sdn. Bhd.

Multiway Trading 45,000,000 10.02 - -

List of Top 30 Holders

(WithoutAggregatingSecuritiesFromDifferentSecuritiesAccountsBelongingToTheSameRegisteredHolder)

No. Name Holdings Name

1 CARTABAN NOMINEES (ASING) SDN BHD 45,000,000 10.022 EXEMPT AN FOR BOCI SECURITIES LTD

2 LEMBAGA KEMAJUAN TANAH PERSEKUTUAN (FELDA) 44,423,701 9.893

3 AMECHANUS VENTURES SDN.BHD. 30,000,000 6.681

4 MAYBANK NOMINEES (TEMPATAN) SDN BHD 27,732,300 6.176 PLEDGED SECURITIES ACCOUNT FOR LIM THIAM HUAT

5 RHB NOMINEES (TEMPATAN) SDN BHD 16,500,000 3.674 PLEDGED SECURITIES ACCOUNT FOR LIM THIAM HUAT

6 AMSEC NOMINEES (TEMPATAN) SDN BHD 15,400,000 3.429 PLEDGED SECURITIES ACCOUNT – AMBANK (M) BERHAD FOR LIM THIAM HUAT (SMART)

7 AMSEC NOMINEES (TEMPATAN) SDN BHD 14,936,700 3.326 PLEDGED SECURITIES ACCOUNT – AMBANK (M) BERHAD FOR LING SIEW LUAN (SMART)

8 MAYBANK NOMINEES (TEMPATAN) SDN BHD 13,300,000 2.962 PLEDGED SECURITIES ACCOUNT FOR ESA BIN MOHAMED

9 JF APEX NOMINEES (TEMPATAN) SDN BHD 12,796,440 2.849 PLEDGED SECURITIES ACCOUNT FOR LING SIEW LUAN (MARGIN)

10 LING LEE JOU CHRISTOPHER 9,951,000 2.216

11 CIMSEC NOMINEES (TEMPATAN) SDN BHD 9,507,104 2.117 PLEDGED SECURITIES ACCOUNT FOR LING PIEN HUOI @ LING BENG HUI (GLENEAGLES-CL)

A N N U A L R E P O R T 2 0 1 8

List of Top 30 Holders (continued)

(WithoutAggregatingSecuritiesFromDifferentSecuritiesAccountsBelongingToTheSameRegisteredHolder)


12 KENANGA NOMINEES (TEMPATAN) SDN BHD 9,287,276 2.068 PLEDGED SECURITIES ACCOUNT FOR LIM THIAM HUAT (008)

13 TENG SWEE LAN @ FONG SWEE LAN 9,238,700 2.057

14 TA NOMINEES (TEMPATAN) SDN BHD 9,040,497 2.013 PLEDGED SECURITIES ACCOUNT FOR LING SIEW LUAN

15 TA NOMINEES (TEMPATAN) SDN BHD 6,362,076 1.416 PLEDGED SECURITIES ACCOUNT FOR LEE HWA CHENG

16 TA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES 4,177,776 0.930 ACCOUNT FOR HEBAT KOORDINASI (ASIA) SDN. BHD.

17 TAN KIM CHAI 3,944,500 0.878

18 AMSEC NOMINEES (TEMPATAN) SDN BHD 3,900,000 0.868 PLEDGED SECURITIES ACCOUNT FOR NG WAI HAN

19 TA NOMINEES (TEMPATAN) SDN PLEDGED SECURITIES ACCOUNT 3,444,100 0.767 BHD FOR LIM THIAM HUAT

20 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD 3,142,210 0.699 PLEDGED SECURITIES ACCOUNT FOR LING SWEE HOI (MARGIN)

21 CIMSEC NOMINEES (TEMPATAN) SDN BHD 3,140,000 0.699 CIMB FOR CHEAH KING FUI (PB)

22 AMSEC NOMINEES (TEMPATAN) SDN BHD 3,100,000 0.690 PLEDGED SECURITIES ACCOUNT – AMBANK (M) BERHAD FOR KOO THIAM YOONG (SMART)

23 TA NOMINEES (TEMPATAN) SDN BHD 3,090,000 0.688 PLEDGED SECURITIES ACCOUNT FOR ONG CHIEW KEE

24 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD PLEDGED 3,000,000 0.668 SECURITIES ACCOUNT FOR LING SIEW LUAN

25 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 2,800,000 0.623 PLEDGED SECURITIES ACCOUNT FOR BOO KUANG LOON

26 KOO THIAM YOONG 2,570,368 0.572

27 RHB NOMINEES (TEMPATAN) SDN BHD 2,564,559 0.571 PLEDGED SECURITIES ACCOUNT FOR WEE SIEW HENG

28 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD 2,500,000 0.556 PLEDGED SECURITIES ACCOUNT FOR LOK JEAN HUI

29 TAN CHUEN YONG 2,500,000 0.556

30 JF APEX NOMINEES (TEMPATAN) SDN BHD 2,494,000 0.555 PLEDGED SECURITIES ACCOUNT FOR LIM KAH YEN (MARGIN)

TOTAL 319,843,307 71.234

A N N U A L R E P O R T 2 0 1 8

108 Analysis of Warrant holdings

as at 25 September 2018

Distribution of Warrant holdings Size of holding No. of % of No. of % of Issued Warrant Holders Warrant Holders Warrants Warrants

Less than 100 51 6.96 2,335 0.00

100 to 1,000 39 5.32 16,439 0.01

1,001 to 10,000 123 16.79 780,614 0.39

10,001 to 100,000 330 45.02 16,594,700 0.37

100,001 – 9,914,518 (*) 189 25.78 109,464,306 55.20

9,914,519 and above (**) 1 0.14 71,432,004 36.02

Total 733 100.00 198,290,398** 100.00

Remarks: * Less than 5% of issued warrants ** 5% and above of issued warrants

Directors’ Warrant Holdings as Per Register of Directors’ Warrant holdings

Directors

Direct Indirect

No. of Warrant % of Issued No. of % of Issued Warrants* Warrants Warrants*

Dato’ Dr. Haji Sohaimi Bin Shahadan - - - -

Dato’ Lim Thiam Huat 76,432,004 38.55 - -

Koo Thiam Yoong 2,785,184 1.40 - -

Datuk Lee Hwa Cheng - - - -

Datuk Lawrence Yeo Chua Poh - - - -

Chew Yuit Yoo - - 130,624# 0.07

Thiang Chew Lan 277,402 0.14 140,092# 0.07

Dato’ Dr. Koe Seng Kheng 3,125,300 1.58 - -

Nor’ Azamin Bin Salleh - - - -

Hidayah Binti Ariffin - - - -

Notes: @ Deemed interested by virtues of her spouse’s interest pursuant to section 59 of the Companies Act 2016# Based on percentage of outstanding securities as at 28 September 2018.

No. of 2015/2020 Warrants Issued : 198,290,398

No. of 2015/2020 Warrants Outstanding : 198,290,398

A N N U A L R E P O R T 2 0 1 8

List of Top 30 Holders

(Without Aggregating Securities From Different Securities Accounts Belonging To The Same Registered Holder)


1 MAYBANK NOMINEES (TEMPATAN) SDN BHD 71,432,004 36.023 PLEDGED SECURITIES ACCOUNT FOR LIM THIAM HUAT

2 AMSEC NOMINEES (TEMPATAN) SDN BHD 5,000,000 2.521 PLEDGED SECURITIES ACCOUNT - AMBANK (M) BERHAD FOR LIM THIAM HUAT (SMART)

3 NG TIOW MIN 4,730,000 2.385

4 TA NOMINEES (TEMPATAN) SDN BHD 3,612,898 1.822 PLEDGED SECURITIES ACCOUNT FOR LING SIEW LUAN

5 CIMSEC NOMINEES (TEMPATAN) SDN BHD 3,241,600 1.634 PLEDGED SECURITIES ACCOUNT FOR LING PIEN HUOI @ LING BENG HUI (GLENEAGLES-CL)

6 JF APEX NOMINEES (TEMPATAN) SDN BHD 3,125,300 1.576 PLEDGED SECURITIES ACCOUNT FOR KOE SENG KHENG (MARGIN)

7 TAN KIM CHAI 2,970,000 1.497

8 MAYBANK NOMINEES (TEMPATAN) SDN BHD 2,674,536 1.348 LEE KOK TAH

9 TEE SO GUAT 2,400,000 1.210

10 CIMSEC NOMINEES (TEMPATAN) SDN BHD 2,300,100 1.159 PLEDGED SECURITIES ACCOUNT FOR YAP CHOW PENG (D J KEPONG-CL)

11 TAN CHUEN YONG 1,950,000 0.983

12 LING SIEW LUAN 1,918,400 0.967

13 LEE HEE HWAK 1,890,000 0.953

14 KOO THIAM YOONG 1,785,184 0.900

15 TAN CHIN HUI 1,725,300 0.870

16 CIMSEC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LEE YUET NGOH (KAJANG-CL) 1,700,000 0.857

17 LEE KOK MING 1,595,100 0.804

18 PUBLIC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TANG CHEE KONG (E-KTN/JRT) 1,340,000 0.675

19 EE SHEAU SHENG 1,300,000 0.655

20 RHB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TAN BEE CHU 1,200,000 0.605

21 LIM KAH YEE 1,196,000 0.603

22 NIGEL LOH KWONG WENG 1,170,000 0.590

23 PAIK KIM @ KOAY PAIK KIM 1,103,600 0.556

A N N U A L R E P O R T 2 0 1 8

List of Top 30 Holders (continued)

(Without Aggregating Securities From Different Securities Accounts Belonging To The Same Registered Holder)


24 LEE KOK WEI 1,086,000 0.547

25 HLIB NOMINEES (TEMPATAN) SDN BHD 1,075,300 0.542 HONG LEONG BANK BHD FOR WEI JUI FUNG

26 KENANGA NOMINEES (TEMPATAN) SDN BHD 1,050,100 0.529 PLEDGED SECURITIES ACCOUNT FOR LEOW TEIK HENG

27 JF APEX NOMINEES (TEMPATAN) SDN BHD 1,020,500 0.514 PLEDGED SECURITIES ACCOUNT FOR YAP JUN WAH (MARGIN)

28 LEE KOK PENG 1,013,000 0.510

29 AMSEC NOMINEES (TEMPATAN) SDN BHD 1,000,000 0.504 PLEDGED SECURITIES ACCOUNT - AMBANK (M) BERHAD FOR KOO THIAM YOONG (SMART)

30 CHONG SIU FANG 1,000,000 0.504

TOTAL 128,604,922 64.856

110 Analysis of Warrant holdings

(continued)

Signature of Shareholder or Common SealSigned this ........................ day of ..........................,

2018

Notes:

FORM OF PROXY Number of shares held

CDS No.

I/W e

of

being a member/members of NEXTGREEN GLOBAL BERHAD (“Company”) hereby appoint

or failing him/her,

of

of

(ADDRESS)

(ADDRESS)

(ADDRESS)

X

(FULL NAME IN CAPITAL LETTERS AND I/C NO.)



or failing him/her, the CHAIRMAN OF THE MEETING as *my/our proxy, to vote for *me/us and on *my/our behalf at the 13th Annual General Meeting of the Company to be held at Tioman Room, Bukit Jalil Golf and Country Resort, Jalan Jalil Perkasa 3, Bukit Jalil, 57000 Kuala Lumpur on Monday, 3 December 2018 at 10.00 a.m. and at any adjournment thereof and to vote as indicated below:-

NEXTGREEN GLOBAL BERHAD(formerly known as BHS Industries Berhad)

(Company No. 719660-W)(Incorporated in Malaysia)

NO. ORDINARY RESOLUTIONS FOR AGAINST 1 To approve the payment of Directors’ fees and benefits from 1 July 2017 until

3 December 2018 in excess of the current approved limit 2 To approve the payment of Directors’ fees and benefits for the period from

4 December 2018 until the next annual general meeting 3 To re-elect Dato’ Lim Thiam Huat as a Director of the Company 4 To re-elect Thiang Chew Lan as a Director of the Company 5 To re-elect Koo Thiam Yoong as a Director of the Company 6 To re-elect Nor’Azamin Bin Salleh as a Director of the Company 7 To re-elect Dr. Hidayah Binti Ariffin as a Director of the Company 8 To appoint Russell Bedford LC & Company as Auditors of the Company 9 To approve the proposed retention of Madam Chew Yuit Yoo as Independent

Non-Executive Director of the Company 10 To approve the proposed retention of Ms Thiang Chew Lan as Independent

Non-Executive Director of the Company 11 To approve authority to allot shares 12 To approve allocation of Employees’ Share Option Scheme options to

Nor’Azamin Bin Salleh 13 To approve allocation of Employees’ Share Option Scheme options to

Dr. Hidayah Binti Ariffin

1. Only depositors whose names appear in the Record of Depositors as at 26 November 2018 shall be regarded as members and entitled to attend, speak and vote at the Meeting.

2. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a Member of the Company and a member may appoint any persons to be his proxy.

3. A member shall be entitled to appoint not more than two (2) proxies to attend and vote at the Annual General Meeting. Where a member appoints two (2) proxies, the appointment shall be invalid unless the member specifies the proportions of his holding to be represented by each proxy.

4. Where a member of the Company is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

5. 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 known as an 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.

6. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or if the appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised.

7. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 802, 8th Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya, Selangor Darul Ehsan at least forty eight (48) hours before the time for holding the meeting or any adjournment thereof.

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The Company SecretaryNEXTGREEN GLOBAL BERHAD

(formerly known as BHS Industries Berhad)802, 8th Floor, Block CKelana Square, 17 Jalan SS7/2647301 Petaling JayaSelangor Darul EhsanMalaysia

(Formerly known as BHS Industr ies Berhad) ( Incorporated in Malays ia)

O U R C O R E B U S I N E S S

P r i n t i n g•

G r e e n Te c h n o l o g y•

D e v e l o p m e n t•

I n d u s t r i a l P a r k M a n a g e m e n t

Tel: +603 9076 3399 (HL) Fax: +603 9074 7573E-mail: [email protected]: www.bhs.my

Tel : +603 7725 2088 (HL) Fax : +603 7725 2099E-mail : [email protected] : www.nextgreenglobal.com

Contact usC O R P O R AT E O F F I C E :Lot 6-02, Menara LGBNo.1, Jalan Wan Kadir,Taman Tun Dr. Ismail,60000 Kuala Lumpur, Malaysia

P R I N T I N G F A C T O R YLot 4, Lorong CJ 1/1B,Kawasan Perindustrian Cheras Jaya,43200 Cheras, SelangorMalaysia

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Tel: +603 9076 3399

tel:+603 9074 7573


http://www.bhs.my/

tel:+603 7725 2088

tel:+603 7725 2099



Nextgreen Global Berhad Annual Report 2018

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Transcript of Nextgreen Global Berhad Annual Report 2018