Powerwell Holdings Berhad · Subsequently in 2018, the Company was converted into a public limited...

Powerwell Holdings Berhad (“Powerwell” or the “Company”) was incorporated in 2001 as a private limited company under the name of Powerwell Holdings Sdn Bhd.

Powerwell and its subsidiaries (“Powerwell Group” or the “Group”) are principally involved in the design, manufacturing and trading of electricity distribution products which comprise low voltage (“LV”) switchboards, medium voltage (“MV”) switchgears and related products.

Subsequently in 2018, the Company was converted into a public limited company to facilitate its listing and assumed its present name of Powerwell Holdings Berhad.

At Powerwell, we believe in ‘Empowering Possibilities’ - the potential action and realization to create marvels that benefits our everyday life. Powerwell was successfully listed on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”) on 22 January 2020.

VISION

WORLD-CLASSTo be a world-class manufacturer of electricity distribution products with best-in-class international innovation

and benchmark standards.

MISSION

INNOVATION& SAFETYAchieve total customer satisfaction through innovation and safety.

CORPORATE OVERVIEW

001 About Us

004 Global Market Presence

005 Financial Highlights

006 Corporate Information

007 Corporate Structure

008 Corporate Milestone

009 Accreditations

LEADERSHIP PROFILE

010 Profile of Directors

015 Profile of Key Senior Management

STRATEGIC PERFORMANCE

018 Management Discussion and Analysis

028 Sustainability Statement

ACCOUNTABILITY

033 Corporate Governance Overview Statement

045 Statement on Risk Management and Internal Control

048 Audit and Risk Management Committee Report

051 Other Information

FINANCIAL STATEMENTS

054 Directors’ Report

059 Statement by Directors

059 Statutory Declaration

060 Consolidated Statement of Financial Position

062 Consolidated Statement of Profit or Loss and Other Comprehensive Income

064 Consolidated Statement of Changes in Equity

066 Consolidated Statement of Cash Flows

068 Statement of Financial Position

069 Statement of Profit or Loss and Other Comprehensive Income

070 Statement of Changes in Equity

071 Statement of Cash Flows

072 Notes to the Financial Statements

135 Independent Auditors’ Report

ADDITIONAL INFORMATION

139 List of Properties

141 Analysis of Shareholdings

143 Notice of Annual General Meeting

146 Administrative Details

*Proxy Form

CONTENTS

COVER RATIONALE

SCAN ME

This Annual Report can also be downloaded as a PDF file or viewed in an interactive format at www.powerwell.com.my or by scanning the QR code with your smart device.

POWERWELL has more than 25 years of extensive experience in manufacturing electricity distribution products. It enabled the team to empowering the possibilities of providing a complete experience for our customers. It is a great milestone for us to empowering the right opportunities for those who seek to expand or invest impactfully to our business in order to foster a mutual beneficial and lasting business relationship with both our customers and partners.

CORPORATE LEADERSHIP STRATEGIC ACCOUNTABILITY FINANCIAL ADDITIONAL OVERVIEW PROFILE PERFORMANCE STATEMENTS INFORMATION

| ANNUAL REPORT 2019004

GLOBAL MARKET PRESENCE

Representative Office• Powerwell International Sdn. Bhd., Jakarta, Indonesia

Distributors• PT Duta Fuji Electric, Indonesia• PT Duta Listrik Graha Prima, Indonesia• PT Teknik Budi Perkasa, Indonesia

Headquarters• Powerwell Holdings Berhad

Subsidiaries• Powerwell Sdn. Bhd.• Kejuruteraan Powerwell Sdn.

Bhd. (Selangor)• Powerwell International Sdn. Bhd.• Powerhouse Field Sdn. Bhd.• DB Power Sdn. Bhd.• TCS Switchgears Sdn. Bhd.• Powerwell Marketing Sdn. Bhd.

Branch• Kejuruteraan Powerwell Sdn.

Bhd. (Johor)

Distributors• First Pilipinas

Power & Automation Inc, Philippines

• Jervis Electric Corporation, Philippines

Subsidiary• Powerwell Vietnam

Company Limited, Vietnam

Distributor• Computer Marketing Co.

(PVT.) Ltd., Pakistan

Distributor• Industrial Engineering

Solution Ltd, Bangladesh

Distributor• IESL Energy

(S) Pte. Ltd., Singapore

Distributor• Worldwide

Procurement Technology Co. Ltd, Thailand


POWERWELL HOLDINGS BERHAD | 005

FINANCIAL HIGHLIGHTS

Financial Year Ended 31 December 2016 2017 2018 2019

Revenue (RM'000) 92,539 106,393 105,352 88,131

Profit After Tax (RM’000) 8,446 13,870 12,134 9,120

Total Equity (RM’000) 32,876 45,437 50,736 59,841

Net Assets Per Share (1) (Sen) 6.67 9.21 10.29 12.13

Basic Earnings Per Share (2) (Sen) 1.71 2.81 2.46 1.85

Notes:-(1) The net assets per share is computed based on the Company’s issued share capital of 493,152,000 ordinary

shares as at the end of FY2019(2) Basic earnings per share is computed based on the Company’s issued share capital of 493,152,000 ordinary

shares as at the end of FY2019

92,539

106,393

105,352

88,131

32,876

45,437

50,736

59,841

REVENUE(RM’000)

PROFIT AFTER TAX (RM’000)

NET ASSETS PER SHARE(Sen)

BASIC EARNINGS PER SHARE (Sen)

TOTAL EQUITY(RM’000)

2016

2017

2018

2019

2016

2017

2018

2019

2016 2017 2018 2019 2016 2017 2018 2019 2016 2017 2018 2019

8,44

6

13,8

70

12,1

34

9,12

0

6.67

9.21

10.2

9

12.1

3

1.71

2.81

2.46

1.85



CORPORATE INFORMATION

AUDIT AND RISK MANAGEMENT COMMITTEE

Selma Enolil Binti Mustapha Khalil (Chairman)Tang Yuen Kin (Member)Dr. Tou Teck Yong (Member)

NOMINATION COMMITTEE

Dr. Tou Teck Yong (Chairman)Tang Yuen Kin (Member)Selma Enolil Binti Mustapha Khalil (Member)

REMUNERATION COMMITTEE Dr. Tou Teck Yong (Chairman)Tang Yuen Kin (Member)Selma Enolil Binti Mustapha Khalil (Member)

COMPANY SECRETARIES

Lim Seck Wah (MAICSA 0799845)Kong Mei Kee (MAICSA 7039391)

REGISTERED OFFICE

Level 15-2, Bangunan Faber Imperial Court,Jalan Sultan Ismail, 50250 Kuala Lumpur.Tel: 03-2692 4271 Fax: 03-2732 5388

BUSINESS OFFICE

1B, Jalan Anggerik Mokara 31/48, Seksyen 31, Kota Kemuning, 40460 Shah Alam, Selangor.Tel: 03-5521 3333 Fax: 03-5122 2933Website: www.powerwell.com.my

SHARE REGISTRAR

Tricor Investor & Issuing House Services Sdn. Bhd. [Registration No. 197101000970 (11324-H)]Unit 32-01, Level 32, Tower A,Vertical Business Suite, Avenue 3, Bangsar South,No. 8, Jalan Kerinchi, 59200 Kuala Lumpur.Tel: 03-2783 9299 Fax: 03-2783 9222

AUDITORS

Folks DFK & Co. (AF 0502) 12th Floor, Wisma Tun Sambanthan,No. 2, Jalan Sultan Sulaiman, 50000 Kuala Lumpur.Tel: 03-2273 2688 Fax: 03-2274 2688

SPONSOR

Mercury Securities Sdn BhdL-7-2, No 2 Jalan Solaris, Solaris Mont’ Kiara50480 Kuala Lumpur, Malaysia.Tel: 03-6203 7559 Fax: 03-6203 7560

PRINCIPAL BANKERS

• UOB Bank Berhad 197-199, Jalan Imbi, 55100 Kuala Lumpur. Tel: 03-2143 5722

• OCBC Al-Amin Kota Kemuning 27, Jalan Anggerik Vanilla BF 31/BF, Business Park 3, Kota Kemuning, 40460 Shah Alam, Selangor. Tel: 03-5123 5204

STOCK EXCHANGE LISTING

ACE Market of Bursa Malaysia Securities BerhadStock Name: PWRWELL Stock Code: 0217

TANG YUEN KINIndependent Non-Executive Chairman

THAM KIEN WAIManaging Director

WONG YOKE YENExecutive Director - Administration

LEE CHEE MINGExecutive Director - Operations

DR. TOU TECK YONGSenior Independent Non-Executive Director

SELMA ENOLIL BINTI MUSTAPHA KHALILIndependent Non-Executive Director

BOARD OF DIRECTORS



CORPORATE STRUCTUREAS AT 18TH MAY 2020

POWERWELL HOLDINGS BERHAD200101009151 (544907-X)

Powerhouse Field

Sdn Bhd

Property investment and management

TCS Switchgears Sdn Bhd (1)(2)

KejuruteraanPowerwellSdn Bhd

Powerwell International

Sdn Bhd

Powerwell Sdn Bhd

Trading of electricity distribution products

100%

100%

80%100%

100%

100% 100%

100%

Powerwell Vietnam Company Limited

Notes:(1) The remaining 20% equity interest of the company is held by Ti Lian Yeah(2) TCS Switchgears Sdn Bhd has been dormant since 2018

DB PowerSdn Bhd

Assembly and trading of electricity distribution products

Powerwell Marketing Sdn Bhd


Design, manufacturing and trading of electricity distribution products.

Design, manufacturing and trading of electricity distribution products

Design, manufacturing and trading of electricity

distribution products



CORPORATE MILESTONE

Inception and commenced manufacturing and sale of

LV switchboards

Obtained first ASTA certification for our 3200A

main switchboards

Registered as a supplier with Jabatan Kerja Raya

(JKR)

Secured first overseas project in Singapore

Incorporation of Powerwell and restructuring of our Group

Established representative office in Vietnam

Collaboration with Siemens (SIVACON 8PT LV

switchboards)

Incorporation of Powerwell Vietnam Company Limited and set up

manufacturing facility in Vietnam

Collaboration with Schneider (Prisma iPM LV

switchboards)

Collaboration with Siemens (SIMOPRIME

MV switchgears)

Secured first project for supply of MV switchgears to be used for the industrial

development of a crude oil refinery in Kemaman, Terengganu

Established representative

office in Indonesia

1991

2005

2006

2017

2018

1994

2001

2007

2015

2019 2020

1999

2000

2011

2014

• Appointed distributor in Pakistan• Secured project for supply of LV

switchboards for elevated Mass Rapid Transit stations from Sungai Buloh to Putrajaya

• Secured our first data center building project in Cambodia for the supply of LV switchboards

• Secured international project for the supply of LV switchboards for international airports in Indonesia

• Secured our first offshore oil and gas project in Thailand for the supply of LV switchboards

• Secured first project for the supply of 33kV Gas-insulated Switchgear (GIS) and cast resin transformer in the Malaysia market

• On 22 January 2020, Powerwell Holdings Berhad was listed on the ACE Market of Bursa Securities

• Appointed distributor in Thailand



ACCREDITATIONS

• IEC 60529 (Outdoor Enclosure–IP55) (January 2002)

• IEC 60529 (Indoor Enclosure–IP 41) (August 2014)

• IEC 61000-6-4 & IEC 61000-6-2 (EMC Immunity & Emission Test) (December 2015)

• IEC 61439-3 (Consumer Distribution Board) (May 2018) • ISO 9001:2015

Kejuruteraan Powerwell Sdn Bhd (2017)

• ISO 9001:2015 Powerwell Sdn Bhd (2017)

• ISO 9001:2015 Powerwell International Sdn Bhd (2017)

• BS OHSAS 18001:2007 Kejuruteraan Powerwell Sdn Bhd (2017)

• BS OHSAS 18001:2007 Powerwell Sdn Bhd (2017)

• BS OHSAS 18001:2007 Powerwell International Sdn Bhd (2017)

ASTA Certificate of Short Circuit Rating• 3200A main switchboard (February 1994)

Certificate of Type Tests• Withdrawable motor control centre T1

(February 2001)• 630A main switchboard (June 2003)• 800A main switchboard (June 2003)• 1000A main switchboard (June 2003)• 1250A main switchboard (April 2002)• 1600A main switchboard (April 2002)• 2000A main switchboard (June 2003)• 2500A main switchboard (February 2001)• 3200A main switchboard (June 2003)• 4000A main switchboard (August 2001)• 5000A main switchboard (May 2002)• 6000A main switchboard (May 2002)

ASTA Certificate of Verification Tests• 1250A main switchboard/main distribution

board (June 2013)• 1600A main switchboard/main distribution

board (June 2013)• 2000A main switchboard/main distribution

board (April 2013)• 2500A main switchboard/main distribution

board (March 2013)• 3200A main switchboard/main distribution

board (February 2013)• 4000A main switchboard/main distribution

board (March 2013)• 5000A main switchboard (March 2012)• 6000A main switchboard/main distribution

board (April 2013)

ASTA Certificate of Internal Fault Tests• 5000A main switchboard (March 2012)

ASTACERTIFICATION

Visit Powerwell’s website, www.powerwell.com.my for more details



Tang Yuen Kin (“Mr. Tang”) is our Independent Non-Executive Chairman. He was appointed to the Board of Directors of Powerwell (“Board”) on 7 January 2019. Mr. Tang is a member of our Audit and Risk Management Committee, Nomination Committee as well as Remuneration Committee.

Mr. Tang graduated with a Bachelor of Accounting (First Class Honours) degree from the University of Malaya, Malaysia in 1995. He also holds a Master of Business Administration (Banking & Finance) from Nanyang Technological University, Singapore, which he obtained in 2000. In addition, he also obtained a Master of Law Executive (Business Law) from International Islamic University, Malaysia in 2006. He has been a member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants since 2000 and 2015 respectively.

Mr. Tang has more than 21 years of experience in the areas of audit, accounting and finance, corporate finance and corporate planning, having worked in, among others, Price Waterhouse (now known as PricewaterhouseCoopers), Securities Commission Malaysia, KPMG Corporate Advisory Sdn. Bhd., AmInvestment Bank Berhad, Alliance Investment Bank Berhad and Sasbadi Holdings Berhad. Mr. Tang is presently the group chief financial officer of Dancomech Holdings Berhad.

Currently, Mr. Tang does not hold directorship in any other public companies and listed corporations.

Mr. Tang has no family relationship with other directors or major shareholders of Powerwell.

TANG YUEN KIN Malaysian Aged 48 Male

PROFILE OF DIRECTORS

THAM KIEN WAI Malaysian Aged 56 Male

Tham Kien Wai (“Mr. Tham”) is our co-founder and Managing Director. He was appointed to the Board on 3 March 2003. Mr. Tham completed his secondary education up to form 2 in 1978. He has been a competent chargeman registered with the Energy Commission Malaysia to take charge of low voltage system (without aerial lines and power station) since 1998.

Mr. Tham started working as an operations manager in Canwell Engineering Works in 1986. The principal activity of Canwell Engineering Works was manufacturing of switchboards and Mr Tham was responsible for overseeing the overall operations of the business. In 1991, Mr. Tham co-founded our Group and assumed the position of operations director. As the operations director, he oversaw the operational aspects of the business, including the design, procurement, production and delivery of switchboards. Under Mr. Tham’s

leadership, our Group gradually expanded the product range to include LV switchboards, MV switchgears and related products.

In 2005, Mr. Tham assumed the position of executive director, in which he was responsible for our Group’s overall business planning and in particular, overseeing expansion plans for local and overseas markets and negotiating with overseas agents. Currently, he is the Managing Director where he continues to oversee the overall operations and strategic directions of our Group.

Currently, Mr. Tham does not hold any directorship in any other public companies and listed corporations.

Mr. Tham is the brother-in-law of our Executive Director, Ms. Wong Yoke Yen.



WONG YOKE YEN

Wong Yoke Yen (“Ms. Wong”) is our Executive Director (Administration). She was appointed to the Board on 30 August 2018. She obtained her London Chamber of Commerce & Industry (LCCI) qualification from the Regent School of Economics (associated with the Stamford Group of Colleges) in 1984.

Ms. Wong began her career in 1984 as a bank teller with Public Bank Berhad (Sri Petaling branch). She was responsible for attending to customers’ enquiries and financial transactions such as deposits, withdrawals, transfers and related administrative work. In 1990, she left Public Bank Berhad and joined NEC Sales (Malaysia) Sdn Bhd as an accounting clerk, where she was responsible for providing support to the accounting department by updating and maintaining accounting records, preparing reports and reconciling bank statements. She left NEC Sales (Malaysia) Sdn Bhd in 1992 as a senior accounts assistant.

Ms. Wong joined our Group as an account officer in 1993 where she was responsible for attending to tender enquiries and providing quotations to clients. In 1998, Ms. Wong assumed the position of administration manager, where she was responsible for activities relating to office administration, finance and human resources. Ms. Wong was the person in charge of the initial stage of our Group’s ISO 9001 certification application and till to-date she remains the key person that ensures the whole system is maintained in accordance with the standards imposed by the Department of Standards Malaysia.


Malaysian Aged 54 Female

In 2007, Ms. Wong assumed the position of finance director, in which she was responsible for monitoring our Group’s cash flows, accounts and other financial transactions as well as overseeing, reviewing and adhering to budgets for each business department. In 2018, Ms. Wong became our Group’s Executive Director (Administration) wherein she oversees all aspects of our Group’s administrative matters, including credit control, cash management, legal and company secretarial matters. In her current role, Ms. Wong carries out her management responsibilities, which include strategic financial planning, monitoring of financial results against plans and budgets, monitoring of collections from debtors, cost control, as well as product pricing control and management.

Currently, Ms. Wong does not hold any directorship in any other public companies and listed corporations.

Ms. Wong is the sister-in-law of our Managing Director, Mr. Tham.




LEE CHEE MING Malaysian Aged 59 Male

Lee Chee Ming (“Mr. Lee”) is our Executive Director (Operations). He was appointed to the Board on 30 August 2018. Mr. Lee obtained his Malaysia Certificate of Education in 1977.

Mr. Lee began his career in 1979 as a draftsman with Proton Trading Co. Sdn Bhd where he was responsible for electrical and switchboard drawings. He left Proton Trading Co. Sdn Bhd in 1983 and joined BBC Brown Boveri (M) Sdn Bhd as an electrical draftsman. At BBC Brown Boveri (M) Sdn Bhd, he was responsible for preparing technical drawings of electrical wiring systems. In 1983, he joined Proton Electrical Engineering Sdn Bhd, a company affiliated with Proton Trading Co. Sdn Bhd, as supervisor, where he oversaw electrical and switchboard drawings and also the general operations of the factory. In 1999, he left Proton Electrical Engineering Sdn Bhd as a general manager.

In 1999, Mr. Lee joined Powerwell as general manager, where he was responsible for overseeing the operations of the business including design, procurement, production and project work. He was also responsible for overseeing production efficiency, cost effectiveness, product quality and timely delivery of products.

In 2010, Mr. Lee assumed the position of Executive Director (Operations) and oversees various operational aspects of our Group as well as provides technical support to our Group. He also leads our Group’s Research and Development (“R&D”) efforts with the assistance of our engineers and technicians. Mr. Lee assists the Managing Director in overseeing our Group’s expansion plan into the overseas markets.

Currently, Mr. Lee does not hold any directorship in any other public companies and listed corporations.

Mr. Lee has no family relationship with other directors or major shareholders of Powerwell.




SELMA ENOLIL BINTI MUSTAPHA KHALIL

Selma Enolil Binti Mustapha Khalil (“Pn. Selma”) is our Independent Non-Executive Director. She was appointed to the Board on 7 January 2019. Pn. Selma is a Chairman of our Audit and Risk Management Committee. She is also a member of our Nomination Committee and Remuneration Committee. Pn. Selma graduated from University of Wales, Aberystwyth with a Bachelor of Laws in 1994 and obtained her certificate in legal practice in 1995. Pn. Selma was called to the Malaysian Bar as an advocate and solicitor in 1996.

Pn. Selma started her career as an advocate and solicitor with Messrs Abu Talib Shahrom & Zahari in 1997. In 1998, she joined TNB Remaco Sdn Bhd as a legal executive. Pn. Selma left TNB Remaco Sdn Bhd in 2000 and resumed practising law as an advocate and solicitor with Messrs Raslan Loong in 2000. She left Messrs Raslan Loong in 2003. In the same year, she cofounded Messrs Enolil Loo, of which she is currently a partner.

Malaysian Aged 48 Female

Pn. Selma presently sits on the board of directors of Selangor Dredging Berhad, Techbond Group Berhad and LKL International Berhad as an independent non-executive director. Both Selangor Dredging Berhad and Techbond Group Berhad are companies listed on the Main Market of Bursa Securities while LKL International Berhad is a company listed on the ACE Market of Bursa Securities.

Pn. Selma has no family relationship with other directors or major shareholders of Powerwell.




• None of the Directors has any conflict of interest with the Company.• None of the Directors has any:

» conviction for offences within the past five (5) years; and» public sanction or penalty imposed by the relevant regulatory bodies on him or her during the financial year

ended 31 December 2019 which require disclosure pursuant to paragraph 3(h) of Appendix 9C of the ACE Market Listing Requirements of

Bursa Malaysia Securities Berhad.• Save for Mr. Tham Kien Wai and Mr. Lee Chee Ming, the other Directors have attended all the three (3) Board

meetings held during the financial year ended 31 December 2019. Mr. Tham Kien Wai and Mr. Lee Chee Ming attended two (2) out of the three (3) Board meetings.


DR. TOU TECK YONG

Dr. Tou Teck Yong (“Dr. Tou”) is our Senior Independent Non-Executive Director. He was appointed to the Board on 7 January 2019. Dr. Tou is the Chairman of our Nomination Committee as well as Remuneration Committee. He is also a member of our Audit and Risk Management Committee. Dr. Tou obtained a Bachelor of Science (Physics) degree and a Doctor of Philosophy (“PhD”) in physics from the University of Malaya, Malaysia (“UM”) in 1982 and 1987 respectively. Dr. Tou has been a fellow of the Academy of Science Malaysia and the Institute of Physics Malaysia since 2005.

Upon completion of his PhD in 1987, Dr. Tou worked as a full-time physics researcher at the Australian National University, Canberra, Australia. In 1989, Dr. Tou returned to UM to work as a research fellow. Dr. Tou continued his career as a physics lecturer at UM in 1991. In 1999, he left UM and joined Multimedia University (“MMU”) as a professor in the Faculty of Engineering, where he taught at both undergraduate and postgraduate levels in the field of electronic engineering. Dr. Tou was also involved in the administration of the R&D division of MMU, where he acted as the director

Malaysian

between year 2001 to 2007 and vice president between year 2008 to 2013 respectively. Dr. Tou resigned as a professor in MMU in 2018.

Dr. Tou currently acts as an adjunct professor for TAR University College, Setapak, Kuala Lumpur and MMU. His role is to provide advice to students and act as student mentor.

Dr. Tou has been on board of trustees of Top Glove Foundation since 2008, where he has been involved in overseeing and monitoring the charity foundation’s activities. He has been the R&D advisor for Top Glove Corporation since 2013, where he provides advice and guidance in relation to the R&D plans of Top Glove Corporation and its group of companies.

Dr. Tou currently also sits on the board of directors of Mikro MSC Berhad, a company listed on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”) as a senior independent non-executive director.

Dr. Tou has no family relationship with other directors or major shareholders of Powerwell.

Aged 61 Male



PROFILE OF KEY SENIOR MANAGEMENT

Hoh Moon Heng (“Mr. Hoh”) is our Project Director. He graduated from Institut Teknologi Jaya with a part-time diploma course in electrical and electronic engineering in 1993.

Mr. Hoh has over 30 years of experience in supervising and overseeing switchboard manufacturing projects. He began his career in 1990 as a grade 4 electrical technician with Time-EPE Sdn Bhd where he was responsible for conducting tests, services and quality checks on LV to HV electrical switchboard panels. In 1991, he was promoted to a grade 3 electrical technician where his job scope was similar to the role as a grade 4 electrical technician. He left Time-EPE Sdn Bhd in 1992 and joined Tamco Cutler-Hammer Sdn Bhd as a quality control and test technician. He was responsible for conducting tests and quality checks on LV switchboards and MV switchgears. In 1993, he was promoted to the position of service technician, where he was responsible for testing and commissioning of switchboards and switchgears as well as attending to modification works and servicing at site. In 1996, he was promoted to the position of installation supervisor. His job scope was similar to the role he performed as a service technician. He also supervised the installation of LV switchboards and MV switchgears at TNB’s main distribution sub-stations.

In 1996, he co-founded Megapower Electrical Sdn Bhd (now known as Hing Loong Time (Malaysia) Sdn Bhd) and assumed the position of supervisor, where he was in charge of wiring work and testing of LV panels. He joined our Group in 1997 as a project manager where he was responsible for overseeing project execution and production of our Group. He also supervises switchboard manufacturing projects, including monitoring the design of LV switchboards to ensure that the products are in compliance with the ISO 9001.

In 2010, Mr. Hoh was promoted to the position of Project Director. As a Project Director, he is responsible for overseeing the project and production activities of our Group, including quality assurance, quality control, and achieving our Group’s objectives and targets. He also assists the Managing Director to monitor the standardisation of switchboards, ensuring project costs are within allocated budgets, dealing with customers’ complaints arising from any quality defects and monitoring work progress. He also assists the Managing Director to drive the expansion of our Group’s business in the local market.

Thong Kok Meng (“Mr. Thong”) is our Factory Manager. He completed his secondary education up to form 2 in 1989.

Mr. Thong has over 29 years of experience in supervising and overseeing factory operations. He began his career in 1991 as an operator with UA Automation Sdn Bhd, where he was responsible for the assembly of switchboards and analysing the number of copper busbar used inside switchboards.

Mr. Thong left UA Automation Sdn Bhd in 1995 and joined our Group in 1996 as a production supervisor, where he was responsible for handling all switchboard assembly work and to supervise the carrying out of assembly work by the workers. In 2006, he was promoted to the position of production manager, where he was entrusted with additional responsibilities of job planning for the fabrication department and also for upcoming projects. He was also responsible for supervising the workers and reviewing the costing for the fabrication department. In 2016, he was promoted to the position of Factory Manager, where he oversees the entire factory’s operations.

HOH MOON HENG THONG KOK MENG

Malaysian MalaysianAged 51 Aged 45Male Male



Ir. Leong Yek Loong (“Mr. Leong”) is our Regional Sales and Marketing Director. He graduated from Staffordshire University, United Kingdom with a Bachelor of Electrical Engineering in 1996. He then obtained his Master of Business Administration from the University of Southern Queensland, Australia in 2010. He has been the member of the Board of Engineers since 2004.

Mr. Leong has over 24 years of experience in the electrical engineering industry. He began his career in 1996 with HPS Consult as a project engineer where he was responsible for designing electrical services and telephone services, attending site and client consultant meetings, preparing tender documents and liaising with local authorities. At the same time, he also supervised and coordinated installation at site for electrical and telephone services, with cold water and sanitary plumbing. He left HPS Consult and joined PRIMETECH Engineers Sdn Bhd in 1997 as an electrical engineer, where he was responsible for designing electrical and telephone services, public address systems (PA), satellite master antenna television systems (SMATV) and closed-circuit television systems (CCTV). He was also responsible for attending site and client consultant meetings, preparing tender documents and reports, technical specifications, schedule of works and prices, and liaising with the relevant authorities. In 2003, Mr. Leong joined Perunding Unireka as a senior electrical engineer, where his job scope was similar to the role he performed at PRIMETECH Engineers Sdn Bhd.

He joined our Group in 2005 as a senior manager where he was responsible for the after-sales division of our Group, including upgrading, modifying and replacing existing LV switchboards and MV switchgears. He was also responsible for troubleshooting LV switchboard issues and conducts monthly maintenance on LV switchboards, MV switchgears, generator sets and transformers. In 2007, he assumed the position of sales and marketing director. In such role, he was responsible for marketing the products of our Group and conduct seminars pertaining to LV switchboard design. Mr. Leong has been invited to be a speaker for various seminars on IEC 61439, a LV switchgear and control gear assembly & type test certificate design verification assessment standard in countries like Indonesia, Philippines, Vietnam and others since 2014.

In 2014, Mr. Leong assumed the position of Regional Sales and Marketing Director, where he is currently overseeing the sales and marketing activities of our Group and assists our Managing Director to ensure that our Group’s sales in overseas markets continues to expand.

PROFILE OF KEYSENIOR MANAGEMENT

Soh Wei Wei (“Mr. Soh”) is our Sales and Marketing Director. He graduated from Sunway College with a Diploma in Computer Studies in 2005.

Mr. Soh has over 14 years of experience in sales and marketing. He began his career in 2006 as a marketing executive with our Group, where he was responsible for meeting consultants to follow up on the status of the projects that he was handling and to maintain relationships with the main contractors and developers. In 2008, he was promoted to the position of assistant marketing manager, where his job scope included securing projects, updating the main contractors and developers of the status of the projects and providing guidance to junior employees on sales and marketing matters. He was then promoted to the position of marketing manager in 2009, where he was entrusted with additional responsibilities of developing, implementing and executing strategic marketing plans for our Group, overseeing the marketing budget and ensuring a smooth flow of sales and marketing functions for all our Group’s projects. In 2012, he was further promoted to the position of senior sales and marketing manager, where his focus was, in particular, on local expansion of our Group’s activities to cover states such as Penang, Johor, Sabah and Sarawak. During the same year, he assisted the Managing Director to venture into the overseas markets.

In 2013, Mr. Soh was promoted to the position of Sales Director. His additional responsibilities as Sales Director included negotiating and securing projects on behalf of our Group, overseeing local and overseas sales and marketing initiatives and providing seminars to customers and consultants. In 2015, he assumed the position of Sales and Marketing Director and in this role, he is in charge of our Group’s sales and marketing efforts in the Indochina region, where he established and leads a marketing team based in Vietnam.

SOH WEI WEIIR. LEONG YEK LOONG

MalaysianMalaysian Aged 37Aged 46 MaleMale



Chai Jsung Kek (“Mr. Chai”) is our Group Accountant. He graduated from Universiti Putra Malaysia with a Bachelor of Accountancy in 2000. He has been a member of the Malaysian Institute of Accountants since 2003.

Mr. Chai has over 20 years of experience in accounting and tax. He began his career in 2000 with JMS Trade Services Sdn Bhd as a semi-senior auditor where he was responsible for providing audit, tax computation and tax compliance services for companies from various industries.

He left JMS Trade Services Sdn Bhd and joined UPECA Engineering Sdn Bhd in 2003 as an accounting executive. In UPECA Engineering Sdn Bhd, he was responsible for the company’s monthly financial reports, monitored the daily cash flows and prepared budgets for the company. In 2008, he was transferred internally to UPECA Technologies Berhad and assumed the position of senior executive in the group finance department. As a senior executive, he assisted the treasury manager in day-to-day operations which included managing the group’s funding needs.

Subsequently, in 2012, he left UPECA Technologies Berhad and joined I-Precision Sdn Bhd as an assistant finance manager. At I-Precision Sdn Bhd, he was responsible for the monthly management reports, cash flow reports, full set of accounts and all tax matters related to the company. He was also responsible for compliance matters. In 2013, he left I-Precision Sdn Bhd and joined Jebsen & Jessen Packaging Sdn Bhd as a finance manager. His job scope as a finance manager included, amongst others, carrying out financial and management accounting functions. He also worked closely with the management to improve operational


• None of the key senior management has any directorship in public companies and listed corporations.• None of the key senior management has any family relationship with any directors or major shareholders of the

Company.• None of the key senior management has any conflict of interest with the Company. • None of the key senior management has any:

» conviction for offences within the past five (5) years; and» public sanction or penalty imposed by the relevant regulatory bodies on him or her during the financial year

ended 31 December 2019 which require disclosure pursuant to paragraph 4A(g) of Appendix 9C of the ACE Market Listing Requirements

of Bursa Malaysia Securities Berhad.

PROFILE OF KEYSENIOR MANAGEMENT

CHAI JSUNG KEK

Malaysian Aged 43 Male

efficiency of the company from both financial and non-financial perspectives. He also managed and supervised the accounting team. In 2015, he joined Country Heights Resources Management (M) Sdn Bhd, one of the subsidiaries of Country Heights Holdings Berhad as the group finance manager where he was in charge of the group’s accounts. His job scope was similar to the role he performed in Jebsen & Jessen Packaging Sdn Bhd.

Mr. Chai joined Toi Toi Services Sdn Bhd as a management accountant in 2016, where he was responsible for the entire spectrum of financial functions including financial planning, treasury, credit control, accounting and tax matters of the company. He was also involved in maintaining good corporate governance and compliance matters.

In 2018, Mr. Chai joined our Group as Group Accountant. He is primarily responsible for the management of the financial affairs of our Group, which includes the preparation of our Group’s account, maintaining financial records and attending to financial reporting functions of our Group (including our monthly group consolidation reports) for the benefit of our Group and in particular, the Board and the management team of our Group. He is responsible for managing the accounts department’s day-to-day functions to ensure that the department fulfils both internal and external reporting requirements. He also reviews and improves the standard operating procedures and the internal control process of the accounts department. In his capacity as our Group Accountant, he also assists Ms. Catherine Wong, our Executive Director, to manage credit control, cash management, legal and company secretarial matters.



MANAGEMENT DISCUSSION AND ANALYSIS

OVERVIEW OF THE GROUP’S BUSINESSES AND OPERATIONS

A Remarkable Year

It was a remarkable year for Powerwell Holdings Berhad and its subsidiary companies (“Group”). Powerwell was successfully listed on the ACE Market of Bursa Malaysia Securities Berhad on 22 January 2020 with an issue price of RM0.25 per share. The IPO of 145,455,200 ordinary shares comprised of a public issue of 87,400,000 new shares and offer for sale of 58,055,200 existing shares by the offerors.

Today, the Company is a leading specialist in design, manufacturing and trading of electricity distribution products with over 25 years of experience in supplying its products for both local and international projects.

Dear Valued Shareholders,

It is our pleasure to present the Annual Report and Audited Financial

Statements of Powerwell Holdings Berhad (“Powerwell” or the

“Company”) for the financial year ended 31 December 2019 (“FY2019”).




Business Background

Powerwell started its business as a sole proprietorship, Canwell Engineering Works back in September 1985 in Sungai Besi, Kuala Lumpur. The business started with the manufacturing of LV switchboards. Over the years, the management decided to restructure the Group so that the subsidiaries can focus on their specific activities.

On 14 April 2001, the Company was incorporated in Malaysia as a private limited company and subsequently on 25 September 2018, the Company converted into a public limited company to facilitate the listing and since then, assumed our current name, Powerwell Holdings Berhad. The Company is an investment holding company whereas its subsidiaries are involved in the design, manufacturing and trading of electricity distribution products which comprise of LV switchboards, MV switchgears and related products. All the LV switchboards and MV switchgears are customised to the needs of a specific building or infrastructure.

Currently, the Company has a factory, with a 3-storey office which is also its headquarters, in Kota Kemuning, Shah Alam. The total headcount stood at 253 as at end 2019. In line with the Company’s expansion plans, the Company set up representative offices in Vietnam, Indonesia and Johor to undertake sales and marketing activities as well as after-sales services in southern Malaysia. The Company has 9 non-exclusive distributors outside Malaysia, namely Bangladesh, Singapore, Indonesia, Philippines, Thailand and Pakistan.




Products

Our products are mainly LV main switchboards, sub switchboards, distribution boards, MV switchgears and its related products which form an integral part of supporting a building and infrastructure system. Their primary functions are as follows:

We design and manufacture LV switchboards under our “Powerwell” brand. We are also authorised by Siemens to manufacture and sell its LV switchboards (i.e. SIVACON S8) and MV switchgears (i.e. SIMOPRIME MV Switchgears) as well as authorised by Schneider Malaysia to manufacture and sell its Prisma iPM switchboards.

The design, development and manufacture of the products are in accordance with one of the internationally recognised standards, namely the IEC standards. A range of our LV switchboards from 630A to 6000A have been type-tested and certified compliant to IEC standards through ASTA Certifications. Type-testing tests if the configuration of an electricity distribution product complies with the technical requirements of the IEC standards. This is to establish that a product is reliable and meets expectations in terms of performance, safety, efficiency and durability, amongst others.

Our products also have been tested and certified by SIRIM QAS International in which the tests conform to the IEC standards and the Energy Commission regulatory requirements. Additionally, our quality management and safety measures of our manufacturing processes are certified compliant to ISO 9001:2015 (Quality Management System) and BS OHSAS 18001:2007 Occupational Health and Safety Management System.

MV switchgearsuse in power networks as primary distribution system and functioning as centralize electrical distribution control. MV Switchgear provide protection for MV power equipment and circuits in various application involving generator, motors, feeder circuits and distribution lines.

Distribution boards to distribute electricity from a sub switchboard to various electrical circuits or loads within a building. Each circuit is controlled and protected by the fuses of the distribution board.

Sub switchboardsto distribute electricity from the main switchboard to multiple distribution switchboards.

LV main switchboardsfirst point of electricity distribution from the substation/transformer in an electricity distribution system. Main switchboards are typically installed at the master electrical chamber of a building or site.




FINANCIAL REVIEW

Revenue

The Group recorded revenue of RM88.1 million in FY2019 as compared to RM105.4 million in FY2018, representing a decrease in revenue of 16.3%., mainly due to the decrease in the LV segment’s average project value. The lower project sales from the Bangladesh and Indonesian operations were mainly due to political instability. As for Vietnam, the lower project sales value was due to the soften to economic downturn and surplus in commercial properties and condominium. For the other projects in Malaysia, the lower project sales value was mainly due to lesser projects launched by the public sector after the 14th general election in May 2018. However, for the private sector, some projects were launched in a selective manner due to political instability in the country.

Gross Profit and Gross Profit Margin

FY2019 FY2018 Variance±

RM’000 RM’000 RM’000 %

Revenue 88,131 105,352 (17,221) (16.3)

Cost of Sales (63,751) (76,540) 12,789 16.7

Gross Profit 24,380 28,812 (4,432) (15.4)

Gross Profit Margin (%) 27.7 27.3

Gross profit decreased by 15.4% from RM28.8 million in FY2018 to RM24.4 million in FY2019 due to decrease in average project value for LV segment.

2018 2019

2018 2019

2018 2019 2018 2019

Revenue(RM’000)

Cost of Sales(RM’000)

Gross Profit(RM’000)

Gross Profit Margin(%)

88,1

31

105,

352

(63,

751)

(76,

540)

24,3

80

28,8

12

27.7

27.3




FINANCIAL REVIEW (CONT’D)

Profit Before Tax

Profit before tax reduced by 19.1% from RM16.2 million in FY2018 to RM13.1 million in FY2019. The decrease in profit before tax was due to lower revenue but this was partly offset by lower administrative and distribution expenses due to lower staff costs.

Liquidity and Capital Resources

FY2019 FY2018

Net cash generated from/(used in) RM’000 RM’000

Operating Activities (4,124) 11,314

Investing Activities (301) 573

Financing Activities 3,081 (7,456)

Net (Decrease)/Increase in Cash and Cash Equivalents (1,344) 4,432

The Group recorded a net decrease in cash and cash equivalent of approximately RM1.3 million in FY2019 as compared to a net increase in cash and cash equivalent of approximately RM4.4 million in FY2018. The change in the Group’s cash and cash equivalent balances was mainly due to the following reasons:-

(i) operating activities recorded a net cash outflow of approximately RM4.1 million in FY2019 compared to a net cash inflow of approximately RM11.3 million in FY2018. This is mainly attributable to the following:-

(a) lower revenue (FY2019: RM88.1 million; FY2018: RM105.4 million) which led to lower profit before tax (FY2019: RM13.1 million; FY2018: RM16.2 million) recorded in the FY2019 as compared to FY2018;

(b) decrease in the Group’s trade payables in FY2019 of RM8.5 million as compared to an increase in the Group’s trade payables of RM7.8 million in FY2018. The Group’s nature of business is project-based. Upon receipt of the purchase order, the Group will order the materials based on the delivery schedule of the respective customers to lock in material costs. The Group had purchased the necessary materials in accordance to the respective project schedules and such payment had become due during the FY2019;

(c) increase in trade receivables (FY2019: RM8.7 million; FYE2018: RM8.6 million) relative to the Group’s revenue (FY2019: RM88.1 million; FY2018: RM105.4 million). This is contributed by the project-based nature of the Group as a portion of the Group’s revenue were recorded in the fourth quarter of FY2019 and remained outstanding as at 31 December 2019.

However, the above is partially mitigated by the decrease in inventories (including work-in-progress and finished goods) in FY2019 of RM0.9 million in view that the Group had delivered such orders to its customers. This is compared to an increase in inventories of RM0.6 million in FY2018.

(ii) net cash used in investing activities increased by RM0.9 million from FY2018 to FY2019. This is mainly due to acquisition of plant and equipment and right-of-use assets amounting to RM0.7 million during the year.





Liquidity and Capital Resources (cont’d)

The Group recorded a net decrease in cash and cash equivalent of approximately RM1.3 million in FY2019 as compared to a net increase in cash and cash equivalent of approximately RM4.4 million in FY2018. The change in the Group’s cash and cash equivalent balances was mainly due to the following reasons (cont’d):-

(iii) financing activities recorded a net cash inflow of approximately RM3.1 million in FY2019 compared to a net cash outflow of approximately RM7.5 million in FY2018. This is mainly attributable to the following:-

(a) drawdown of bankers’ acceptance of approximately RM4.2 million in FY2019 to pay certain suppliers and subcontractors in order to take advantage of rebates offered by them; and

(b) no dividends were paid to the shareholders in the FY2019 as compared to a RM5.0 million dividends paid to the shareholders in FY2018.

Gearing

FY2019 FY2018

RM’000 RM’000

Total Borrowings (1) 6,036 784

Total Equity 59,841 50,736

Gearing Ratio 0.10 0.02

Note:(1) The total borrowings in FYE2019 include lease liabilities arising from initial adoption of MFRS 16 Leases

beginning 1 January 2019.

The gearing ratio increased from 0.02 in FY2018 to 0.10 in FY2019 due to the drawdown of bankers acceptance of RM4.2 million and higher lease liabilities arising from initial adoption of MFRS 16 Leases beginning 1 January 2019.

Capital Management

On 22 January 2020, we completed our IPO and raised RM21.85 million, which is to be channelled towards capital expenditure, certification expenditure, working capital and for the listing expenses. As disclosed in the Prospectus dated 2 January 2020, we have earmarked RM10.3 million from our IPO proceeds for our capital expenditure requirements comprising purchases of machinery and equipment along with upgrades to our Group’s enterprise resource planning system. The planned capital expenditure is expected to be completed within 18 months from the date we received our IPO proceeds (i.e. 22 January 2020). As we continue to focus on growing our market share, the planned capital expenditure is envisioned to, amongst others, improve efficiency of manufacturing processes, boost production capacity and enhance our business processes.




Risk Management

We are cognisant that our core business operations can be affected by adverse changes in public policies. Any unexpected and unfavourable changes of laws and regulations that impacts the electricity distribution industry as well as the construction industry at large will likely affect our Company’s financial performance from a revenue as well as cost perspective.

In order to manage this risk, our board of directors and key senior management are ever-vigilant in monitoring relevant public policy discussions and developments. In addition, we are also mindful that our business is correlated to the construction sector, which is in turn reliant on the economy of Malaysia and the other countries in which we operates in and/or supplies our products to. Any economic downturn in the given country would adversely affect the demand for residential, commercial and industrial properties and public sector allocations for infrastructure developments and consequentially the demand for electrical works. In order to mitigate this risk, we will endeavour to continue our marketing efforts in both Malaysia and outside Malaysia to maintain and/or grow our market share as well as strengthen our brand awareness and brand loyalty.

A slowdown in the construction industry will also have a repercussion on our financial performance. In order to mitigate this risk, we intend to enhance our product offerings and range including the commercialisation of our own “Powerwell” branded MV switchgears. We will also augment our efforts in growing our replacement market business by leveraging on our existing contacts and business relationships with our customers to participate in more refurbishment projects.

The electricity distribution equipment industry is competitive and fragmented due to the large pool of industry players which include public listed companies, large private companies, small to medium enterprises and sole proprietorships that compete in this industry. We aim to stay ahead of the competition by expanding our range of certified lEC standards-compliant products and at the same time, continue to build our track record and leverage on our reputation to secure more projects in the domestic and overseas markets. Being a public listed company on the ACE Market of Bursa Securities also lends a competitive advantage as it accords us an additional level of visibility, esteem and credibility when tendering for jobs.


The recent COVID-19 outbreak had impacted our operations as the construction projects we are involved in were put on hold due to social distancing measures introduced by the various countries. In order to mitigate the impact, we stayed in close contact with our customers and suppliers to manage our project deliverables and timeline. We also have in place a business continuity management system, which enabled us to continue some of our operations such as tender submission, internal project preparation and marketing webinar with clients

Dividends

The Group adopted a prudent approach to capital management as the Group was of the view that its cash is needed to fund new capital investments and business expansions. Thus, no dividend was was declared during the year.




REVIEW OF OPERATING ENVIRONMENT

The Malaysian economy grew by 3.6% in the fourth quarter of 2019 (3Q 2019: 4.4%), supported by higher private sector spending of 7.4% (3Q 2019: 5.4%). However, the slow growth is contributed by the decline in net exports. Growth in the services and construction sectors were weighed down by supply disruptions in the commodities sector. Overall, the economy expanded by 4.3% (2018: 4.7%). The construction sector recovered by 1% during the quarter (3Q 2019: -1.5%). The recovery was mainly attributable to the turnaround in the residential sub-sector, supported by affordable housing activities.

Although the economy was confronted with several external and domestic challenges, growth was anchored bydomestic demand. The Malaysian economy is expected to continue expanding at a moderate pace, despite allthe uncertainties arising from unanticipated trade tensions, geopolitical tensions and policy uncertainties. This cancause a resurgence of the financial market’s volatility and dampened the global economic outlook.

LOOKING AHEAD

Malaysia’s annual gross domestic product growth moderated to 4.3% in 2019 (2018: 4.7%). The moderated growth rate is expected to persist in 2020, contributed by various factors including the recent COVID-19 pandemic outbreak, uncertainties from various trade negotiations, geopolitical risks and weaker-than-expected growth of major trade partners. The recent outbreak of the COVID-19 pandemic has caused much uncertainties across the global economy. Further, the International Monetary Fund has recently announced that the pandemic will cause a global recession this year, with the global growth rate projected at –3.0% in 2020. Some of the adverse consequences of the pandemic include the direct disruption to global supply chains, weaker demand for imported goods and services, and wider regional declines in international tourism and business travel.

Malaysia and Vietnam, the 2 countries which we operate in, were also not spared from the pandemic. To curb the pandemic, both the Malaysian Government and the Vietnamese Government implemented social distancing measures in March 2020 and April 2020 respectively, which restricts the movement of the public unless necessary and for industries categorised as essential services. As a result, our Malaysia and Vietnam factories were temporarily shut down for about 6 weeks and 4 weeks respectively. Consequentially, our operations were also affected during this period as we faced temporary suspension of factory operations leading to delays in our projects’ delivery schedule, disruptions in supply chain and delays in payment from our customers.




LOOKING AHEAD (CONT’D)

As most of the construction projects were put on hold during this period, we kept in close contact with both our customers and suppliers to plan ahead for the disruptions caused to the respective project schedules and to ensure availability of materials to our Group. This is to manage and ensure that we are able to meet all project timelines. Further, we negotiated payment terms with the respective suppliers during this period to allow more flexibility in our payment obligations and continued to monitor our collections with our customers. Notwithstanding the challenges faced during this period, we do not expect any material negative impact to our financial performance for the FY2020. As we supply our products to infrastructure projects, which are essential to the country’s continued development, we expect that most of these projects will resume work in the short-term.

We also have in place a business continuity management system, which enabled us to continue some of our operations such as tender submission, internal project preparation and marketing webinar with clients. Our employees from the sales, design and management department continued to work from home and we have even managed to secure four new projects from Indonesia worth about RM4.7 million during the lockdown period.

During the Movement Control Order implemented by the Malaysian Government, we obtained approval from the Ministry of International Trade and Industry (“MITI”) to operate on a reduced workforce basis of not more than 50%. Subsequently, our Malaysian operations resumed on 27 April 2020 in accordance with the standard of procedures imposed by the MITI. With the implementation of the conditional movement control order which allowed the re-opening of most economic sectors on 4 May 2020, our Malaysian operations fully resumed. Meanwhile, our operations in Vietnam fully resumed on 24 April 2020.

Our Group intends to accelerate the production process to minimise any delay in the respective project’s fulfilment timeline. At the moment, our suppliers still have sufficient stock for about 2 to 3 months depending on the material. In addition, most of the countries are gradually resuming business. However, if the lockdown is extended or reinstated, we may encounter issues along our supply chain.




LOOKING AHEAD (CONT’D)

Although we had a challenging start in 2020, we believe that our business will continue to sustain in Malaysia and Vietnam for the FY2020. This is because a number of our clients’ projects are infrastructure-related, including MRT, LRT and wastewater treatment facilities which are expected to continue. Further, relative to other parts of the world, the Malaysian and Vietnamese Government have been successful in controlling the spread of COVID-19.

Moving forward, we will continue to expand our market share and presence in the domestic and regional market by participating in more refurbishment, pharmaceutical, sewage and infrastructure projects. We will also continue our efforts in enhancing our product offerings and range including commercialisation of our own “Powerwell” branded MV switchgears as well as expanding our range of certified International Electronic Commission standards compliant products. Besides that, we have recently been authorised by SIEMENS AG as a value added reseller for the localised adaptation, assembly and sale of Siemens’ NXPlus C gas insulated switchgears which enables our Group to increase our product range. In addition, we are also looking to increase our presence in Indonesia to be better positioned to secure projects in that region.

ACKNOWLEDGEMENTS

On behalf of the Board of Directors and the management, I wish to convey our deepest appreciation to our shareholders, investors, clients, suppliers, business partners, bankers, government and regulatory bodies for their trust, patience and support in Powerwell Holdings Berhad. Our gratitude extends to our loyal employees who continue to put in their effort, hard work and commitment for the Company. In the coming years ahead, we will continue to explore more opportunities in order to conquer any shortcomings and difficulties to generate more value and growth for our shareholders.

Thank you.

THAM KIEN WAIManaging Director



SUSTAINABILITY STATEMENT

OUR APPROACH

Stakeholders’ engagement

Materiality assessment and identification of sustainability

risks and opportunities

Management of material sustainability risks and

opportunities

The sustainable goals of the Group form the blueprint to work towards a sustainable future for the generations to come. These goals are currently embedded into the Company’s culture, vision and mission statement for its continuing growth and sustainable environment.

The Group is committed to embark on its sustainability journey by developing strategies which incorporate timely action plans and policies that can mitigate any negative impact on the industry and contribute positively to the economy and environment.

We believe it is crucial to continuously engage with the stakeholders, including our customers, investors and vendors to ensure the successful implementation of our sustainability initiatives and growth. Thus, we need to identify, address and resolve any potential issues in the economy and environment with the stakeholders promptly to achieve the sustainable goals. This will promote us as a responsible corporate organization with high standards of governance.

SUSTAINABILITY GOVERNANCE

The Board of Directors (“Board”) has the overall responsibility for driving the sustainability governance for the Group. The management’s responsibility is to ensure that the following actions are properly carried out:



ECONOMIC

The Company positively contributes to the sustainable economic growth of the country. We provide equal employment opportunities and are committed to providing an inclusive environment in which all employees can thrive and reach their full potential which in return stimulate the economy.

Besides that, the shareholders are the ultimate key drivers in bringing the economic benefits to the Company. We ensure that the shareholders are timely informed of the Company’s financial performance and position besides attending the Company’s Annual General Meeting. The Group’s website, www.powerwell.com.my is easily accessible online and provides various information (i.e. annual reports, products range, corporate information and projects) to the public.

The Company also takes proactive action to value its customers and suppliers to sustain their profitability. In line to meet our customers’ satisfaction, the Company maintains a high standard of “Quality” products which meet the requirements of IEC standards, complies to ISO 9001:2015 (Quality Management System) and BS OHSAS 18001:2007 (Occupational Health and Safety Management System).

The Company also values its suppliers through building a long-term relationship with them and entrust them with values through its policies and positive engagement.


MATERIAL SUSTAINABILITY MATTERS

ECONOMIC

ENVIRONMENTAL

SOCIAL

MATERIAL SUSTAINABILITY

MATTERS




ENVIRONMENTAL

In line with our Company’s vision towards an environmentally friendly company, the Group takes proactive action to protect the environment and reduce carbon footprint. Generally, the Group’s production process does not release harmful emissions to the environment. The Company has a minimum quantity of schedule waste where it will be kept in a bin and disposed off properly.

The Company views environmental issues at utmost importance and thus the Company has incorporated the ISO 14001: 2015 objectives into the Company’s performance measurement. The Company regularly evaluates the impact its production and manufacturing processes have on the environment and make sure it complies with the Environment, Health and Safety Laws and Regulations. Besides, the Company also provides training programmes to its employees to educate them of any environmental issues and to promote awareness to protect the environment by ensuring zero case of fire incident, zero non-conformance of authority instruction and zero incident or accident at workplace.

To achieve the environmental objectives for a desirable targeted result, the Company’s HSE Management Programme covers the followings:

• Embeds safety briefing into the daily morning briefing to create awareness amongst staff. • To conduct Environmental Emergency Response Plan which includes fire & chemical drill yearly,

checking the fire system on a yearly basis to ensure the system is ready at all times and to ensure staff is well equipped with personal protective equipment to protect against one or more health and safety hazards.

• To conduct internal & external audit yearly on our operation, manufacturing and on-site project teams to assess whether our efforts are in line with our environmental objectives.

• To conduct the Hazard Identification, Risk Assessment & Determining Control (HIRADC) study at least once yearly to ensure the most important and critical element of the Occupational Safety and Health Management is achieved.

• Practices schedule waste management by reducing, reusing and recycling the waste at all times even when we have achieved waste production below the minimum level.

• Practices and implements the 5S workplace organizational and housekeeping methodology.

Overall, it is our responsibility to protect the environment by reducing energy consumption by saving on electricity, exploring other renewable energy sources such as solar power solutions and identification of product recyclable components. Our endless effort and commitment include ensuring the environment is always being protected, to comply with all the legal requirements on environmental as well as a continuous improvement on Environmental Management Systems and Performance.

In future, the Company will have a plan and roadmap to map and control electricity consumption, to introduce automation machines like robotics, to introduce innovative assembly systems in order to have smoother production output and a programme to reward the employees with creative cost saving ideas for the Company.

MATERIAL SUSTAINABILITY MATTERS (CONT’D)




SOCIAL

The Company views human capital as the pillars of the Group’s success. Hence, the Company values the importance of its employees’ safety and well-being by providing a safe working place and a well equipped environment for the workers to work in. The Company also invested in staff training programs to ensure that their staffs are equipped in their respective areas and fields of expertise. Thus, the Company had sent a few staff to attend the “Train the Trainer” programme certified by Human Resource Development Fund (HRDF) in 2019. With this training, the trained staff will be able to train other staff in the Company internally. The Company also views that staff motivation is vital for the growth of the Company, thus it had provided its staff with training on “Personal Effectiveness for Extraordinary Performance”.


Apart from that, the Company organised numerous social activities for the staff such as Chinese New Year dinner, Hari Raya gathering, staff appreciation gathering, sports tournaments i.e. bowling tournament, weekly yoga sessions, friendly t able tennis matches and so forth.

2019 Year End Party

Bowling Tournament Table Tennis Tournament

Fire Drill Exercise Powerwell Certified HRDF Training





SOCIAL (CONT’D)

Besides strengthening human capital management, the Company also complies with OHSAS 18001:2007, Occupational Safety and Health laws and regulations.

Through the years, the Company has embraced the core values of social responsibility by serving the community. A willing heart to give back to the community is the main driving factor to carry out the corporate social activities besides business activities as it believes in the importance of this core value to move them forward.

Our CSR activities include donation to the needy societies and charitable foundations such as special needs individuals and under privilege families in terms of medical aids. In years to come, the Company will carry out more CSR programmes and structured activities to cater for the needs of the community and contributing to the health and welfare of society, operating transparently and ethically.

Besides, the Company also plans to upgrade its current OHSAS 18001:2007 to ISO 45001 in 2020 to obtain the globally recognised standards for greater customers’ satisfaction. This can be seen through the years where the Company obtained various certifications by passing the external audits such as the Siemens Technology NXPlus Audit, Siemens Technology Sivacon S8 Audit and the Siemens Technology Simoprime Audit, conducted by Siemens AG in 2019. Not forgetting the Supply Audit by Emerson Network Power in 2016 Audit on Supply Chain & Logistic/Quality by Schneider Gutor in 2016 and also the Workplace Conditions Assessment by Siemens which is certified by Intertek in 2014.

OUR COMMITMENT

With this sustainability plan in place, the Company is optimistic and dedicated to practise, add value and continues to contribute positively towards the sustainable growth of the economy, environment and social benefits.



CORPORATE GOVERNANCEOVERVIEW STATEMENT

The Board of Directors (“Board”) of Powerwell Holdings Berhad acknowledges the importance of the principles and practices as set out in the Malaysian Code on Corporate Governance (“MCCG”) in managing the Group’s business towards its mission of sustainable growth.

Although the Company was listed on the ACE Market of Bursa Malaysia Securities Berhad on 22 January 2020, the Board nevertheless wishes to present this statement to its shareholders and stakeholders with an overview of the Company’s application of MCCG practices for the financial year ended 31 December 2019.

However, the Company was not able to apply all the principles and practices set out in MCCG pursuant to Rule 15.25 of the ACE Market Listing Requirements of the Bursa Malaysia Securities Berhad (“AMLR”) as certain practices and processes were not relevant or still being established during the financial year.

This statement should also be read together with the Corporate Governance Report 2019 which is available on the Company’s corporate website at www.powerwell.com.my.

PRINCIPLE A – BOARD LEADERSHIP AND EFFECTIVENESS

I BOARD RESPONSIBILITIES

The Board is responsible for formulating and reviewing the strategic plans and key policies of the Company, and charting the course of the Group’s business operations whilst providing effective oversight of Management’s performance, risk assessment and controls over business operations.

The Group is led and controlled by an effective Board which assumes, amongst others, the following principal responsibilities in discharging its stewardship role and fiduciary and leadership functions:

• promoting good corporate governance culture within the Group;• overseeing the conduct of the Company and the Group’s business to ensure it is being properly

managed;• identifying principal risks of the Company and the Group and ensuring the implementation of

appropriate risk management and internal control systems to address these risks;• succession planning of the Company;• reviewing and adopting a strategic plan for the Company and the Group, and subsequently monitoring

the implementation of the strategic plan by the Management to ensure sustainable growth of the Company and the Group;

• reviewing the adequacy and integrity of the Company and the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines; and

• monitoring the Group’s financial performance and operating results.

The Board delegates and confers some of its authorities and discretions to the Independent Non-Executive Chairman, Managing Director, Executive Directors and Management as well as the properly constituted Board Committees comprising exclusively Non-Executive Directors.

There is a clear division of responsibilities between the Chairman of the Board and the Managing Director. The Chairman leads strategic planning at the Board level, while the Managing Director is responsible for the implementation of the policies laid down and execute the decision-making.




PRINCIPLE A – BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D)

I BOARD RESPONSIBILITIES (CONT’D)

The role of Management is to support the Executive Directors including Managing Director and implements the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board.

In general, the Non-Executive Directors are independent from Management. Their roles are to constructively challenge Management and monitor the success of Management in delivering the approved targets and business plans within the risk appetite set by the Board. They have free and open contact with Management at all levels, and they engage with the external and internal auditors to address matters concerning Management and oversight of the Company’s business and operations.

Key matters reserved for the Board’s approval include the financial statements, annual budget, declaration of dividends, business continuity plan, issuance of new securities, corporate restructuring plan, material acquisition and disposal of assets.

The Board has established and delegated specific responsibilities to three (3) committees of the Board, which operate within clearly defined written terms of reference. The Board reviews the Board Committees’ authority and terms of reference from time to time to ensure their relevance. The Board Committees deliberate the issues on a broad and in-depth basis before putting up any recommendation to the Board for approval. The ultimate responsibility for decision making lies with the Board.

The Board Committees are:

(a) Audit and Risk Management Committee

• The Audit and Risk Management Committee plays an active role in assisting the Board in discharging its governance responsibilities, which include maintaining a sound risk management, internal control and governance system.

• The full details of the composition, terms of reference and summary of the activities of the Audit and Risk Management Committee during the year are set out in the Audit and Risk Management Committee Report in this Annual Report.

(b) Remuneration Committee

• The Remuneration Committee is primarily responsible for determining and recommending to the Board the remuneration packages of the Managing Director, Executive Directors and key senior management of the Company.

(c) Nomination Committee

• The Nomination Committee is primarily responsible for recommending suitable appointments to the Board, taking into consideration the Board structure, size, composition and the required mix of expertise and experience which the Director should bring to the Board. It assesses the effectiveness of the Board as a whole, the committees of the Board and the contribution of each Director, including non-executive directors, as well as the Managing Director.





Board Charter

The Board has established a Board Charter to provide clarity and guidance in the roles and responsibilities to the Board members and management.

The Board Charter addresses, among others, the following matters:-

• Objectives• Vision and Mission• Role of the Board• Independent Non-Executive Chairman and Managing Director • Board Committees• General Meetings• Investor Relations and Shareholder Communication• Relationship with Other Stakeholders• Company Secretary• Performance Appraisal

The Board Charter serves as a referencing point for Board’s activities to enable Directors to carry out their stewardship role and discharge their fiduciary duties towards the Company. The Board Charter is made publicly available on the Company’s website at www.powerwell.com.my in line with Practice 2.1 of the MCCG and is reviewed periodically.

Code of Conduct and Ethics

The Company’s Code of Conduct and Ethics encompasses transparency, integrity, accountability and corporate social responsibility. The Board, in discharging its duties and responsibilities, is guided by the Code of Conduct and Ethics.

The Code of Conduct and Ethics is formulated to enhance the implementation of corporate governance and behaviour with a view to achieve the following objectives:-

• To establish standard of ethical conduct for directors and employees based on acceptable belief and values that one upholds.

• To uphold the spirit of social responsibility and accountability of the Company and the Group in line with the legislations, regulations and guidelines governing it.

The Board is committed to adhering to best practices in corporate governance and observing the acceptable standards of integrity and behaviour in all activities conducted by the Company and the Group, including the interaction with its shareholders, employees, creditors, customers and within the community and environment in which the Company and the Group operate. The Code of Conduct and Ethics is made publicly available on the Company’s website at www.powerwell.com.my in line with Practice 3.1 of the MCCG. The Code of Conduct and Ethics is subject to annual review.






Whistleblowing Policy

The Group has formalised and established a Whistleblowing Policy. This is to provide an avenue for all employees and stakeholders to raise genuine concerns about unethical behaviour, malpractices, illegal acts or failure to comply with regulatory requirements without fear of reprisal should they act in good faith when reporting such concerns.

The Whistleblowing Policy is subject to periodic assessment and review to ensure that it remains relevant to the Group’s changing business circumstances.

Supply of, and Access to, Information

Every Director has full and unrestricted access to information within the Group. Where required, the Board and its Committees are provided with independent professional advice, the cost of which is borne by the Company. The Board may also seek advice from the Management or request further explanation, information or update on any aspect of the Group’s operations or business concerns. The Board is supplied with quality and timely information, which allows it to discharge its responsibilities effectively and efficiently.

The agenda for each meeting together with a set of comprehensive Board Papers for each agenda item are delivered to each Director in advance of meetings, to afford the Board sufficient time to review the matters to be deliberated for effective discussion and decision making during the meeting, and where necessary, to obtain supplementary information before the meeting.

All Board members have access to the advice and/or opinion of the Company Secretaries. They are also entitled to and may avail themselves of any further professional advice by requesting the Management to make the necessary arrangements at the expense of the Company.

Company Secretary

The Board is regularly updated and apprised by the Company Secretaries on new or changes in company and securities law, regulation and compliance requirements issued by the regulatory authorities. The Company Secretaries are MAICSA members, experienced and competent on statutory and regulatory requirements. The Company Secretaries are holding professional certificates as qualified Company Secretaries under Section 235(2) of the Companies Act 2016.

The Company Secretaries attend all Board and Board Committee meetings and ensures that all meetings are properly convened and that accurate and proper records of the proceedings and resolutions passed are taken and maintained in the statutory register of the Company. The Company Secretaries, together with the Directors, ensure that all governance matters and applicable laws and regulations of the Malaysian Code on Corporate Governance are complied with.

The Company Secretaries work closely with Management to ensure that there are timely and appropriate information flows within and to the Board and Board Committees.

The appointment and removal of Company Secretary is at the purview of the Board.






Reinforce Independence

The role of the Chairman of the Board (“the Chairman”) and the Managing Director are separated with each having a clear scope of duties and responsibilities. The distinct and separate roles of the Chairman and the Managing Director, with a clear division of functions and responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision making. This crucial partnership is essential for the long-term success of the Company and the Group.

The Chairman plays a crucial and pivotal leadership role in ensuring that the Board works effectively, whilst the Managing Director has the overall responsibility for the operational and business units, organisational effectiveness and implementation of Board policies, directives, strategies and decisions.

Board Meetings

There were three (3) Board meetings held during the financial year ended 31 December 2019, with details of Directors’ attendance set out below:

No. of meetings Directors Position attended

1. Tang Yuen Kin Chairman/Independent Non-Executive Director 3/32. Tham Kien Wai Managing Director 2/33. Wong Yoke Yen Executive Director 3/34. Lee Chee Ming Executive Director 2/35. Selma Enolil Binti Mustapha Khalil Independent Non-Executive Director 3/36. Dr. Tou Teck Yong Senior Independent Non-Executive Director 3/3

The Directors observe the recommendation of the MCCG that they are required to notify the Chairman before accepting any new directorship and to indicate the time expected to be spent on the new appointment. To ensure that the Directors have the time to focus and fulfil their roles and responsibilities effectively, the Directors must not hold directorships in more than five (5) public listed companies and must be able to commit sufficient time to the Company.

The Board complied with Rule 15.06 of the AMLR on the restriction on the number of directorships in listed companies held by the Directors. The Board is satisfied that the external directorships of the Board members have not impaired their ability to devote sufficient time in discharging their roles and responsibilities effectively as well as regularly updating and enhancing their knowledge and skills.

The Board is also satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company. This is evidenced by the attendance record of the Directors at Board meetings.






Directors’ Training

All the Directors of the Company have attended the Mandatory Accreditation Programme as prescribed in the Listing Requirements as well as the IPO Dialogue hosted by Securities Commission Malaysia.

The Board is mindful of the importance for its members to undergo continuous training to be apprised on changes to regulatory requirements and the impact such regulatory requirements have on the Group.

The Nomination Committee also assessed the training needs of the Board and remind the Board on the needs of continuous professional development and training to enhance their skills and knowledge to keep themselves abreast with the changes in the business environment, market condition, legislations and regulations affecting the Group. Uphold Integrity in Financial Reporting

It is the Board’s commitment to present a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of each reporting period and financial year, primarily through the quarterly announcement of Group’s results to Bursa, the annual financial statements of the Group and Company as well as the review of the Group’s operations in the Annual Report, where relevant. A statement by the Directors of their responsibilities in the preparation of financial statements is set out in the ensuing paragraph.

Statement of Directors’ Responsibility for Preparing Financial Statements

The Board is responsible to ensure that the financial statements are properly drawn up in accordance with the provisions of the Companies Act 2016 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the results and cash flows of the Group for the financial year then ended.

The Directors are satisfied that in preparing the financial statements of the Group for the year ended 31 December 2019, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The financial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies Act 2016.

In discharging its fiduciary responsibility, the Board is assisted by the Audit and Risk Management Committee to oversee the financial reporting processes and the quality of the Group’s financial statements.





II BOARD COMPOSITION

The success of the Board in fulfilling its oversight responsibility depends on its size, composition and leadership qualities of its members. Currently, the Board consists of six (6) members, comprising three (3) Executive Directors including the Managing Director and three (3) Independent Non-Executive Directors including the Chairman and Senior Independent Non-Executive Director. The profile of each Director is presented separately in the Annual Report.

The Company is in compliance with Rule 15.02 of AMLR and the recommendation of the MCCG whereby half of its Board members are independent directors.

The appointment of independent directors is to ensure that the Board includes directors who can effectively exercise their best judgment objectively for the exclusive benefit of the Company and the Group. Active participation of independent directors in Board deliberations also mitigate risks arising from conflict of interest or undue influence from major shareholders and other interested parties.

The composition of the Board reflects a diversity of backgrounds, skills and experiences in the areas of business, economics, finance, general management and strategy that contributes effectively in leading and directing the management and affairs of the Group. Given the calibre and integrity of its members and the objectivity and independent judgment brought by the Independent Directors, the Board is of the opinion that its current size and balanced mixed skills composition contribute to an effective Board.

As the Company was recently listed, none of the Independent Non-Executive Directors had served the Company for a cumulative term of nine (9) years. The Company also did not have a policy which limits the tenure of the Independent Non-Executive Directors to nine (9) years.

Notwithstanding the recommendation of MCCG, the Board is presently of the view that there is no necessity to fix a maximum tenure limit for directors as there are significant advantages to be gained from long service directors who possess in-depth insights to the Group’s business and affairs. The ability of a director to serve effectively as an Independent Non-Executive Director is very much dependent on his integrity and objectivity, and may not necessarily has a direct connection to his tenure as an Independent Non-Executive Director.

The Board is supportive of gender diversity in the boardroom as recommended by the Code. There are presently two female directors on the Board. The Executive Director, Ms. Wong Yoke Yen and Independent Non-Executive Director, Pn. Selma Enolil Binti Mustapha Khalil are both active participants of the Board. The Company has not, as yet, adopted a specific policy on boardroom gender diversity. Nomination Committee – Selection and Assessment of Directors

The Nomination Committee was established in 2019. The Nomination Committee chaired by the Senior Independent Director, has been established with specific terms of reference by the Board, comprising exclusively of Independent Non-Executive Directors, as follows:-

(a) Dr. Tou Teck Yong - Chairman (Senior Independent Non-Executive Director)(b) Tang Yuen Kin - Member (Independent Non-Executive Director)(c) Selma Enolil Binti Mustapha Khalil - Member (Independent Non-Executive Director)





II BOARD COMPOSITION (CONT’D)

Terms of Reference

The Terms of Reference of the Nomination Committee is made publicly available on the Company’s website at www.powerwell.com.my in line with Rule 15.08A(2) of AMLR.

The Nomination Committee is primarily responsible for recommending suitable appointments to the Board, taking into consideration the Board structure, size, composition and the required mix of expertise and experience which the Directors should bring to the Board. It assesses the effectiveness of the Board as a whole, the Board Committees and the contribution of each Director, including Non-Executive Directors.

In assessing and evaluating the suitability of candidates for recommendation to the Board for appointment, the Nomination Committee will consider, inter alia, the background, education, knowledge, integrity, competency, experience, commitment and potential contribution to the Group.

The final decision on the appointment of a candidate recommended by Nomination Committee rests with the Board or, on the recommendation of the Board, the shareholders in general meeting, as the case may be. The Board is entitled to the services of the Company Secretary who would ensure that all appointments are properly made upon obtaining all necessary information from the Directors.

Pursuant to the Company’s Constitution, one-third of the Directors including the Managing Director, shall retire from office each year, and all Directors shall retire from office at least once in three (3) years. Retiring directors can offer themselves for re-election. Directors who are appointed by the Board during the financial year are subject to re-election by shareholders at the next Annual General Meeting held following their appointment.

At the forthcoming Annual General Meeting, Mr. Tham Kien Wai and Dr. Tou Teck Yong will retire by rotation pursuant to Clause 131.1 of the Company’s Constitution. All of them, being eligible, offer themselves for re-election.

The Board undertakes an annual assessment and the Nomination Committee has reviewed the Independence of the Independence Non-Executive Directors for the financial year ended 31 December 2019 and is satisfied that they continue to bring independent and objective judgement to board deliberations.

The Board undertakes peer and self-assessment for the financial year ended 31 December 2019 and the Nomination Committee has assessed the balance composition of Board members, Directors’ contribution, Board effectiveness, Audit and Risk Management Committee and each of its members.





II BOARD COMPOSITION (CONT’D)

Terms of Reference (cont’d)

The Nomination Committee concluded that each Board member had been competent and committed in discharging his/her duties and responsibilities. All assessments and evaluations carried out by the Nomination Committee were properly documented and minuted by the Company Secretary.

The results of all assessment and comments by Directors are summarized and deliberated at the Nomination Committee Meeting and thereafter reported to the Board for deliberation.

The Board through the Nomination Committee’s annual appraisal believes that the current composition of the Board brings the required mix of skills and core competencies required for the Board to discharge its duties effectively.

III REMUNERATION COMMITTEE

Presently, there is no formal and transparent process for approving the remuneration of the Board and Board Committees, the Managing Director, Executive Directors, Non-Executive Directors and key senior management as the Company was only listed on 22 January 2020.

The Remuneration Committee was established in 2019. The present composition of the Remuneration Committee consists of three (3) members of the Board, all of whom are Independent Non-Executive Directors as follows:-

(a) Dr. Tou Teck Yong - Chairman (Senior Independent Non-Executive Director)(b) Tang Yuen Kin - Member (Independent Non-Executive Director)(c) Selma Enolil Binti Mustapha Khalil - Member (Independent Non-Executive Director)

The primary objective of the Remuneration Committee is set the policy framework and to make recommendations to the Board on all elements of the remuneration, terms of employment, reward structure and fringe benefits for Managing Director, Executive Directors and other key senior management with the aim to attract, retain and motivate individuals of the quality required to manage the Company’s business and to align the interests of the executive directors with those of the Company’s shareholders.

The Terms of Reference of the Remuneration Committee is made publicly available on the Company’s website at www.powerwell.com.my in line with Practice 6.2 of the MCCG.





III REMUNERATION COMMITTEE (CONT’D)

The remuneration of the Directors for the financial year ended 31 December 2019 is set out below:-

In RM’000 Group

Director Salaries* Fees BonusesBenefits-

in-kindAllow-

ances^ Total

Managing Director

Tham Kien Wai 605 - 160 28 - 793

Executive Directors

Wong Yoke Yen 524 - 105 24 - 653

Lee Chee Ming 486 - 96 28 - 610

Independent Non-Executive Directors

Tang Yuen Kin - 54 - - 1 55

Selma Enolil Binti Mustapha Khalil - 48 - - 1 49

Dr. Tou Teck Yong - 48 - - 1 49

Total 1,615 150 361 80 3 2,209

* The salaries includes contributions to the Employees Provident Fund (EPF), Social Security Organisation (SOCSO) and Employment Insurance System (EIS).

^ An allowance of RM800 are paid to the Non-Executive Directors for each of the Board and Board Committee meetings attended.

The number of top five (5) key senior management whose total remuneration falls within the following bands for the financial year ended 31 December 2019 are as follows:-

Remuneration Bands Number of Key Senior Management

RM250,001 – RM300,000 1

RM300,001 – RM350,000 1

RM350,001 – RM400,000 2

RM400,001 – RM450,000 1




PRINCIPLE B – EFFECTIVE AUDIT AND RISK MANAGEMENT

I AUDIT AND RISK MANAGEMENT COMMITTEE

The Audit and Risk Management Committee (“ARMC”) was established in 2019 in order to accurately reflect the powers of oversight over the risk management matters delegated to the ARMC.

The primary objective of the ARMC is to assist the Board to review the adequacy and integrity of the Group’s financial administration and reporting, internal control and risk management systems, including the management information system and systems for compliance with applicable laws, regulations, rules, directives and guidelines.

The ARMC consists of three (3) members of the Board, all of whom are Independent Non-Executive Directors.

During the financial year, the ARMC has assessed and reviewed the performance and independence of the external auditors, namely Messrs. Folks DFK & Co. and was satisfied that the external auditors have been independent throughout the conduct of the audit process and the audit services rendered have met the quality expected by the ARMC and the Group.

Report of the ARMC is set out in later part of this Annual Report.

II RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK

The Audit Committee was merged together with the Risk Management Committee to form the ARMC and the ARMC comprising exclusively of Independent Non-Executive Directors.

The Board has authorised the ARMC to review the effectiveness of the internal audit function and to provide oversight on the establishment and implementation of a risk management framework and reviewing the effectiveness of the risk management framework in identifying and managing risks and internal processes which include but not limited to ensuring the adequacy of risk management policy and infrastructure to facilitate the implementation of action plans of risk management.

The Statement on Risk Management and Internal Control is set out in later part of this Annual Report.

PRINCIPLE C - INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

I COMMUNICATION WITH STAKEHOLDERS

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries to be made to the regulators, shareholders and stakeholders. On this basis, the Board will not only comply with the disclosure requirements as stipulated in the AMLR, but is also responsible to disclose material information to regulators, shareholders and stakeholders.

The Group also maintains a corporate website, www.powerwell.com.my to disseminate information and enhance its investor relations. All timely disclosures, material information and announcements made to Bursa Malaysia are published on the website shortly after the same is released by the Company.





PRINCIPLE C - INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS (CONT’D)

II CONDUCT OF GENERAL MEETING

The Board recognises the importance of being transparent and accountable to the Company’s investors and, as such, has various channels to maintain communication with them. The various channels of communications are through the quarterly announcements on financial results to Bursa Malaysia, relevant announcements and circulars, when necessary, the Annual and Extraordinary General Meetings and through the Group’s website where shareholders can access pertinent information concerning the Group.

The Company’s Annual General Meeting (“AGM”) serves as a principal forum for dialogue with shareholders. Shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions.

The forthcoming AGM will be the first AGM of the Company as a public listed company. The Company will dispatch its notice of AGM and related papers to shareholders at least twenty-one (21) days before the meeting to enable shareholders to go through the Annual Report and papers supporting the resolutions proposed.

Pursuant to Rule 8.31A of the AMLR provides that all resolutions set out in the notice of any general meeting shall be vote by poll where every one share has one vote. It also provides that an independent scrutineer shall be appointed to validate the votes cast. The outcome of the AGM and any other general meetings are to be announced to Bursa Malaysia on the same day the meeting is held.

The Company will ensure that all Board members, Management team and External Auditors are available to respond to any enquiries from the shareholders during the AGM and any other general meetings.

COMPLIANCE STATEMENT

The Board is satisfied that the Company, though listed on 22 January 2020 has endeavor to comply with the spirit and objectives of the Code during the financial year with regard to the Practices supporting the Principles, except as otherwise stated.

This Statement on Corporate Governance has been approved by the Board of Powerwell on 21 May 2020.



STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION

The Board is pleased to present its Statement on Risk Management and Internal Control which outlines the nature and scope of the risk management and internal control of the Group for the financial year ended 31 December 2019. This Statement has been prepared in accordance with Bursa Malaysia Securities Berhad’s ACE Market Listing Requirements and guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“the Guidelines”).

BOARD RESPONSIBILITY

The Board recognises the importance of sound framework for risk management and internal control as a platform to good corporate governance. The Board acknowledges its responsibility and re-affirms its commitment in maintaining sound systems of risk management and internal control to safeguard shareholders’ investments and the Group’s assets as well as for reviewing its adequacy and effectiveness of these systems.

The Group has in place an on-going process to identify, evaluate, monitor and manage any significant risks through the internal controls set out in order to attain a reasonable assurance that business objectives have been met. These controls are regularly reviewed by the Board and subject to continuous improvement.

RISK MANAGEMENT

Risk Management is regarded by the Board to be an integral part of business operations. Key Management staff and Heads of Department are delegated with the responsibility of identifying and managing risks related to their functions/departments.

The Board has established and developed an Enterprise Risk Management (“ERM”) framework to achieve the following objectives:

• communicate and disseminate across the organisation the vision, role and direction of the Group;

• provision of a structured and a more consistent approach to identifying, rating, mitigating, managing and monitoring principal risks;

• creating an environment where staff understand and assume responsibility for managing the risks for which they are accountable for as well as to be aware of the controls in place to mitigate those risks; and

• formulate a systematic process of review, tracking and reporting on key risks identified and corresponding mitigation procedures.

Risk analysis of the Group are conducted on a regular basis, including constantly reviewing the process in identifying, evaluating and implementing appropriate actions to assess and monitor the impact of the risks on key business areas. Significant risks identified are brought to the attention of the Board at their scheduled meetings. The Audit and Risk Management Committee, chaired by an Independent Non-Executive Director, meets periodically to discuss the risks faced by the Group and ensure that existing mitigation actions are adequate. Risks identified were prioritised in terms of likelihood of occurrence and the impact of such on the Group upon crystallisation.



RISK MANAGEMENT (CONT’D)

In addition, external and relevant professionals would be drawn on to assist and provide advices to the management team when necessary. In order to ensure the objectivity of the review of the risk management and systems of internal controls in the Group, the Audit and Risk Management Committee is instituted by the Board to undertake this role.

The Audit and Risk Management Committee assists the Board to review the adequacy and integrity of the internal control system and its compliance with the Group’s policies and procedures.

KEY ELEMENTS OF THE GROUP’S RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS

To complement and enhance the risk management and internal control systems, the Group also has in place the following practices/structures:

• The Group maintains clearly defined and structured lines of reporting and responsibilities including proper segregation of duties, appropriate authority limits, adequate review and approval procedures;

Formal Standard Operating Policies and Procedures are in place and regularly reviewed and updated to ensure that it continues to support the Group’s business activities as the Group continues to grow; Certain subsidiaries within the Group adhered to and applied such ISO Quality Policies and Procedures. In addition, the Group also ensure compliance with the relevant Safety and Health procedures. With such certification, audits are conducted by external parties periodically to ensure compliance with the requirements of the certification.

• Regular and comprehensive information provided to the Board, covering financial performance and key business indicators;

• Monthly monitoring of operational results against the budget for the Management’s review and discussion;

• Active participation of executive members of the Board in the day-to-day running of the operations; and

• Regular management meeting with all key personnel of respective to address weaknesses and improve efficiency.

MANAGEMENT WITH RESPONSIBILITIES AND ASSURANCE

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

In producing this Statement, the Board has received assurance from the Managing Director and the Group Accountant and the Executive Directors to the best of their knowledge the Group’s risk management and internal control systems are in place for the financial year ended 31 December 2019 and are operating adequately and effectively, in all material aspects.




BOARD ASSURANCE AND LIMITATION

The Board confirms that the process for identifying, evaluating and managing significant risks in the Group is on-going. The Board is of the view that the Group’s risk management and internal control systems are satisfactory and has no significant internal control failures nor have any of the reported weaknesses that has resulted in material losses or contingencies during the financial year under review. The Board is satisfied that the existing level of systems of internal control and risk management are effective to enable the Group to achieve its business objectives.

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

CONCLUSION

The Board is aware and cognisant of the fact that the Group’s system of internal control and risk management practices must continuously evolve to meet the changing and challenging business environment. Therefore, the Group will continue to take measures to strengthen the risk management and internal control system with a view to further enhance their effectiveness and to ensure new and additional risk arising from changes in the business and operating environment are managed within tolerable limits and timely dealt with.

This Statement on Risk Management and Internal Control is made by the Board in accordance to its resolution dated 21 May 2020.

REVIEW OF THE STATEMENT BY THE EXTERNAL AUDITORS

As required by Rule 15.23 of the Bursa Malaysia Securities Berhad ACE Market Listing Requirements, the External Auditors have reviewed the Statement on Risk Management and Internal Control for inclusion in the annual report for the financial year ended 31 December 2019. Their limited assurance review was performed in accordance with the Audit and Assurance Practice Guide (“AAPG”) 3 included in the Annual Report, issued by the Malaysian Institute of Accountants. AAPG 3 does not require the External Auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group.




The Audit and Risk Management Committee (“ARMC”) was established in 2019 with the primary objective to assist the Board in the effective discharge of its fiduciary responsibilities for corporate governance, financial reporting to shareholders and the public and internal control.

The ARMC will adopt practices aimed at maintaining appropriate standards of responsibility, integrity and accountability to all the Company’s shareholders.

MEMBERSHIP

The ARMC is appointed by the Board and comprises the following members:-

Chairman Selma Enolil Binti Mustapha Khalil : Independent Non-Executive Director Members Tang Yuen Kin : Independent Non-Executive DirectorDr. Tou Teck Yong : Senior Independent Non-Executive Director

COMPOSITION

The composition of the ARMC is at least three (3) members, all of whom must be independent non-executive directors including the Chairman.

At least one (1) member of the Committee:-

a) must be a member of the Malaysian Institute of Accountants (“MIA”); orb) have at least 3 years’ working experience and:-

- must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or

- must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967; or

c) fulfils such other requirements as prescribed or approved by the Exchange, i.e. having:- either one of the following qualifications and at least 3 years’ post-qualification experience in

accounting or finance:(i) a degree/masters/doctorate in accounting or finance; or(ii) a member of any professional accounting organization which has been admitted as a full member

of the International Federation of Accountants; or- at least 7 years’ experience being a chief financial officer of a company or having the function of being

primarily responsible for the management of the financial affairs of a company.

No alternate director shall be appointed as a member of the Committee.

In the event that the ARMC is reduced to less than three (3) members, the vacancy shall be filled within three (3) months.

The review of the terms of office and performance of the ARMC and each of its members will be carried out by the Nomination Committee annually.

AUDIT AND RISK MANAGEMENTCOMMITTEE REPORT



TERMS OF REFERENCE

The Terms of Reference of the ARMC is made publicly available on the Company’s website at www.powerwell.com.my in line with Rule 15.11 of AMLR.

MEETINGS

The Chairman may call a meeting of the ARMC if a request is made by any committee member, any Director, or the external auditors.

A minimum of two members present shall form a quorum provided both of whom present are independent directors. The Committee shall meet with the external auditors and the internal auditors without executive board members, whenever deemed necessary. The Company Secretary shall act as Secretary of the ARMC or in her/his absence, another person authorized by the Chairman of the ARMC.

As at the date of this report, the ARMC met two (2) times on 26 December 2019 and 25 February 2020 since its establishment.

The details of attendance of Committee members are as follows:-

Name of Committee Members Attendance

Selma Enolil Binti Mustapha Khalil (Chairman) 2/2Tang Yuen Kin 2/2Dr. Tou Teck Yong 2/2

SUMMARY OF WORK OF THE AUDIT AND RISK MANAGEMENT COMMITTEE

As at the date of this report, the ARMC met two (2) times on 26 December 2019 and 25 February 2020, to carry out amongst others, the following activities:-

a) Reviewed with the external auditors the results of the audit, the audit report and the management letter, including management’s response.

b) Checked with the external auditors on any findings which may require the Committee’s attention.

c) Reviewed the quarterly unaudited financial results announcements before recommending them for the Board’s approval.

d) Reviewed the audited Financial Statements of the Group and the Company prior to their submission for consideration and approval by the Board. The review was to ensure that the audited Financial Statements were drawn up in accordance with the provisions of the Companies Act 2016 and the applicable Malaysian Financial Reporting Standards (“MFRS”).




SUMMARY OF WORK OF THE AUDIT AND RISK MANAGEMENT COMMITTEE (CONT’D)

As at the date of this report, the ARMC met two (2) times on 26 December 2019 and 25 February 2020, to carry out amongst others, the following activities (cont’d):-

e) Reviewed the Company’s compliance in particular the quarterly and year end financial statements with the Listing Requirements of the Bursa Securities, applicable approved accounting standards and other legal and regulatory requirements.

f) Reviewed recurrent related party transactions entered into by the Group to ensure they are not detrimental to the minority.

INTERNAL AUDIT FUNCTION

In preparation for the Company’s initial public offering, the Company had engaged Insight Advisory Services Sdn. Bhd., an independent internal audit consulting firm, as its Internal Control Consultant to review the adequacy and sufficiency of systems, procedures and controls of the Group. The details of internal audit function are stated in the Statement on Risk Management and Internal Control of this Annual Report.

The Company outsourced the internal audit function to an independent professional firm to assist the Board and ARMC in providing an independent assessment on the adequacy, efficiency and effectiveness of the Group’s internal control system. The Internal Auditors will report directly to the ARMC on its activities based on the approved internal audit plans.




OTHER INFORMATION

UTILISATION OF PROCEEDS FROM INITIAL PUBLIC OFFERING (“IPO”)

The Company was listed on the ACE Market of Bursa Malaysia Securities Berhad on 22 January 2020 (“Listing”). In conjunction with the Listing, the Company undertook a public issue of 87,400,000 new ordinary shares and offer for sale 58,055,200 of existing shares at an issue/offer price of RM0.25 per ordinary share, raising gross proceeds of RM21,850,000.00.

As at 31 December 2019, the public issue was pending completion. The gross proceeds from the public issue amounting to RM21,850,000.00 is intended to be utilised in the following manner:-

Details of utilisation

Proposed Utilisation

RM’000

Actual Utilisation (1)

RM’000

Estimated timeframe for

utilisation upon Listing

(i) Capital expenditure 10,270 - Within 18 months

(ii) Certification expenditure 3,865 - Within 24 months

(iii) Working capital 3,615 - Within 24 months

(iv) Estimated listing expenses 4,100 - Immediate

Total 21,850 -

Note: (1) As at 31 December 2019, the public issue was pending completion.

AUDIT FEE AND NON-AUDIT FEE

Details of statutory audit, audit-related and non-audit fees paid/payable in the financial year ended 31 December 2019 to the external auditors are set out below:-

Description

Fees paid/payable (RM)

Company Subsidiaries Total

Audit Fees 20,000 106,187 126,187

Non-Audit Fees 10,000 - 10,000

Services rendered as Reporting Accountants in relation to the Company’s initial public offering 189,000 - 189,000

Total 219,000 106,187 325,187 MATERIAL CONTRACTS

During the financial year ended 31 December 2019, there was no material contracts entered by the Company and its subsidiaries involving Directors’ and major shareholders.

RECURRENT RELATED PARTY TRANSACTIONS

During the financial year ended 31 December 2019, there was no recurrent related party transactions of a revenue or trading nature which requires shareholders’ mandate.

FINANCIALSTATEMENTS054 Directors’ Report

059 Statement by Directors

059 Statutory Declaration

060 Consolidated Statement of Financial Position

062 Consolidated Statement of Profit or Loss and Other Comprehensive Income

064 Consolidated Statement of Changes in Equity

066 Consolidated Statement of Cash Flows

068 Statement of Financial Position

069 Statement of Profit or Loss and Other Comprehensive Income

070 Statement of Changes in Equity

071 Statement of Cash Flows

072 Notes to the Financial Statements

135 Independent Auditors’ Report



DIRECTORS’ REPORT

The directors have pleasure in submitting their report and the audited financial statements of the Group and the Company for the financial year ended 31 December 2019.

PRINCIPAL ACTIVITIES

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are set out in Note 8 to the financial statements.

There have been no significant changes in the nature of the principal activities of the Company and those of the subsidiaries during the financial year.

RESULTS Group Company RM RM

Profit/(Loss) for the year 9,119,702 (366,636)

Attributable to:-- Owners of the Company 9,121,562 (366,636)- Non-controlling interests (1,860) -

9,119,702 (366,636)

RESERVES AND PROVISIONS

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

DIVIDEND

No dividend has been paid or declared since the end of the previous financial year.

The directors do not recommend the payment of any dividend in respect of the current financial year ended 31 December 2019.

SUBSIDIARIES

The details of the subsidiaries of the Group are disclosed in Note 8 to the financial statements.

SHARE CAPITAL

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



DIRECTORS’ REPORT

HOLDING COMPANY

The directors regard PW Synergy Sdn. Bhd., a company incorporated in Malaysia, as the immediate and ultimate holding company of the Company.

DIRECTORS

The names of the directors in office during the financial year and during the period from end of the financial year to the date of this report are as follows:-

Powerwell Holdings Berhad Tang Yuen Kin (Appointed on 07 January 2019)Tham Kien Wai Wong Yoke Yen Lee Chee Ming Dr. Tou Teck Yong (Appointed on 07 January 2019)Selma Enolil Binti Mustapha Khalil (Appointed on 07 January 2019)

Subsidiaries of Powerwell Holdings BerhadTham Kien Wai Lee Chee Ming Wong Yoke Yen Tang Yee Choy Thong Kok Meng Hoh Moon Heng Ti Lian Yeah Soh Wei Wei

DIRECTORS’ INTERESTS

According to the Register of Directors’ Shareholdings, the interests of the directors in office as at the end of financial year in shares in the Company and interests in shares of the holding company during the financial year were as follows:-

Shareholdings in the Company

Number of Ordinary Shares Balance at During the financial year Balance at 01.01.2019 Acquired Disposed 31.12.2019

Direct Tham Kien Wai 95,975,544 - - 95,975,544Lee Chee Ming 17,622,218 - - 17,622,218Wong Yoke Yen 43,175,544 - - 43,175,544



DIRECTORS’ INTERESTS (CONT’D)

Shareholdings in the Company (cont’d)

Number of Ordinary Shares Balance at During the financial year Balance at 01.01.2019 Acquired Disposed 31.12.2019

Indirect Tham Kien Wai 296,081,520 - - 296,081,520Wong Yoke Yen 296,081,520 - - 296,081,520

By virtue of their shareholdings in the Company, Tham Kien Wai and Wong Yoke Yen are deemed to be interested in shares of its subsidiary companies to the extent of the interests held by the holding company.

DIRECTORS’ REMUNERATION

The particulars of remuneration paid to the directors are disclosed in Note 21 to the financial statements.

INDEMNITY

No indemnity was given to nor were there any insurance effected for the directors, officers or auditors of the Group and the Company during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the directors of the Group and of the Company has received or become entitled to receive any benefits (other than those disclosed as directors’ remunerations in financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which a director is a member or with a company in which a director has a substantial financial interest other than by virtue of transactions entered into in the ordinary course of business and as disclosed in Note 24 to the financial statements.

As at the end of the financial year and during the year, there did not subsist any arrangement to which the Company was a party, whereby the directors or their nominees might acquire benefits by means of acquisition of shares in, or debentures of, the Company or any other body corporate.

AUDITORS’ REMUNERATION

The details of remuneration paid or payable to the auditors of the Group and the Company are disclosed in Note 21 to the financial statements.

DIRECTORS’ REPORT



OTHER STATUTORY INFORMATION

(a) Before the financial statements of the Group and the Company were made out, the directors took reasonable steps:-

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

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

(b) As of date of this report, the directors are not aware of any circumstances:-

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

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

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

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

(c) As of the date of this report, there does not exist:-

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

(ii) any contingent liabilities in respect of the Group and of the Company which have arisen since the end of the financial year.

(d) In the opinion of the directors:-

(i) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve months after the end of the financial year which will or may substantially affect the ability of the Group and of the Company to meet their obligations when they fall due;

(ii) the result of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature; and

(iii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made.

DIRECTORS’ REPORT



SUBSEQUENT EVENTS

The details of subsequent events are disclosed in Note 32 to the financial statements.

AUDITORS

The auditors, Messrs. Folks DFK & Co., have expressed their willingness to continue in office.

On behalf of the Board of Directors,

____________________________LEE CHEE MINGDirector

____________________________WONG YOKE YENDirector

This report is made pursuant to the directors’ resolution passed on 21 May 2020.

Date: 21 May 2020

DIRECTORS’ REPORT



STATEMENT BY DIRECTORS ANDSTATUTORY DECLARATION

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

We, Lee Chee Ming and Wong Yoke Yen, being two of the Directors of POWERWELL HOLDINGS BERHAD, do hereby state that in the opinion of the Directors, the accompanying financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2019 and of the financial performance and cash flows of the Group and of the Company for the financial year ended 31 December 2019.

Signed in accordance with a resolution of the Directors,

____________________________ ____________________________LEE CHEE MING WONG YOKE YENDirector Director

Date: 21 May 2020

STATUTORY DECLARATION(Pursuant to Section 251(1) of the Companies Act 2016)

I, Chai Jsung Kek, being the officer primarily responsible for the financial management of POWERWELL HOLDINGS 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 )abovenamed CHAI JSUNG KEK at Kuala )Lumpur in the Federal Territory this day of )21 May 2020 )

____________________________ CHAI JSUNG KEK MIA Membership No: 21790

Before me,

____________________________ Commissioner for Oath



CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2019

2019 2018 Note RM RM

ASSETS NON-CURRENT ASSETS Property, plant and equipment 5 11,834,527 13,754,674Right-of-use assets 6 2,477,675 -Intangible assets 7 - 51,493Goodwill 494,507 494,507Investments 9 7,927 13,726

14,814,636 14,314,400

CURRENT ASSETS Inventories 10 11,428,034 13,329,580Trade and other receivables 11 52,585,886 43,632,603Tax recoverable 297,295 1,181,173Deposits, cash and bank balances 13 16,456,157 17,861,299 80,767,372 76,004,655 TOTAL ASSETS 95,582,008 90,319,055

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



CONSOLIDATED STATEMENT OFFINANCIAL POSITIONAS AT 31 DECEMBER 2019


EQUITY AND LIABILITIES EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital 14 14,806,176 14,806,176Retained profits 45,000,839 35,879,277Translation reserve 33,880 48,564

59,840,895 50,734,017Non-controlling interests 470 2,330

TOTAL EQUITY 59,841,365 50,736,347

NON-CURRENT LIABILITIES Lease liabilities 15 941,390 233,742Deferred tax liabilities 16 982,702 1,041,591

1,924,092 1,275,333

CURRENT LIABILITIES Trade and other payables 17 28,192,887 36,563,573Amount due to directors 18 122,859 28,038Bank borrowings 19 4,200,000 207,089Lease liabilities 15 894,488 343,332Current tax liabilities 406,317 1,165,343

33,816,551 38,307,375

TOTAL LIABILITIES 35,740,643 39,582,708

TOTAL EQUITY AND LIABILITIES 95,582,008 90,319,055




CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019


Revenue 20 88,131,509 105,351,738

Cost of sales (63,750,944) (76,539,430)

Gross profit 24,380,565 28,812,308

Other income 3,415,349 3,069,992

Administrative and distribution expenses (13,754,238) (15,348,161)

Other operating expenses (147,328) (108,278)

Profit from operations 13,894,348 16,425,861

Finance costs (781,187) (227,082)

Profit before taxation 21 13,113,161 16,198,779

Taxation 22 (3,993,459) (4,064,754)

Profit for the financial year 9,119,702 12,134,025

Other comprehensive loss Items that will be reclassified subsequently to profit or loss, net of tax effects: Foreign currency translation loss (14,684) (12,599)

Total comprehensive income for the financial year attributable to owners of the Company 9,105,018 12,121,426




CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019


Profit for the financial year attributable to:- Owners of the Company 9,121,562 12,135,711Non-controlling interests (1,860) (1,686)

9,119,702 12,134,025

Total comprehensive income for the financial year attributable to:- Owners of the Company 9,106,878 12,123,112 Non-controlling interests (1,860) (1,686)

9,105,018 12,121,426

Earnings per share attributable to owners of the Company (RM) Basic 25.1 0.018 0.025 Diluted 25.2 0.018 0.025




CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

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the

finan

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- 9,

121,

562

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loss

fo

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- (1

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6,17

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39

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45

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of

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(1,8

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-

(1,8

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As

rest

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6,

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61

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37

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43

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The

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CONSOLIDATED STATEMENT OFCHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

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201

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6,01

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43

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4,

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43,6

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21

Pro

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or

the

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- 12

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26

Bo

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f sh

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(No

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8,63

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(5,0

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Bal

ance

at

31 D

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8 14

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48

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35

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50

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2,

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2019 2018 RM RM

Cash flows from operating activities Profit before taxation 13,113,161 16,198,779

Adjustments for:-

Impairment loss on trade and other receivables 1,924,651 1,624,569Impairment loss on inventories 948,001 -Amortisation of intangible assets 51,493 102,987Bad debts written off 19,334 -Depreciation of property, plant and equipment 1,178,913 1,490,030Depreciation of right-of-use assets 1,104,224 -Deposit written off 1,500 6,000Gain on derecognition of right-of-use assets (5,238) -Loss on changes in fair value of investments 5,799 1,113(Gain)/Loss on disposal of property, plant and equipment (80,000) 2,017Interest income (287,072) (386,563)Interest expenses 781,187 227,082Property, plant and equipment written off 263 10,419Reversal of impairment loss on trade and other receivables (2,213,193) (1,524,115)Unrealised loss/(gain) on foreign exchange - net 72,572 (54,192)

Operating profit before working capital changes 16,615,595 17,698,126

Decrease/(Increase) in inventories 938,110 (631,582)Increase in trade and other receivables (8,656,928) (8,556,616)(Decrease)/Increase in trade and other payables (8,476,152) 7,784,924Decrease in amount due to directors (32,777) (780,994)

Cash generated from operations 387,848 15,513,858

Interest paid (781,187) (227,082)Tax refunded 1,464,841 411,000Tax paid (5,195,836) (4,383,373)

Net cash (used in)/generated from operating activities (4,124,334) 11,314,403

CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019




2019 2018 RM RM

Cash flows from investing activities Interest received 284,510 386,563Proceeds from disposal of non-current assets held for sale - 463,000Proceeds from disposal of property, plant and equipment 80,000 15,220Purchases of property, plant and equipment (Note 27(a)) (229,795) (291,320)Purchase of right-of-use assets (Note 27(b)) (436,150) -

Net cash (used in)/generated from investing activities (301,435) 573,463

Cash flows from financing activitiesDividend paid by the Company (Note 23) - (5,000,000)Net bank borrowings obtained/(repaid) (Note 27(c)) 3,992,520 (2,309,875)Net lease liabilities repaid (Note 27(c)) (911,245) (145,644)

Net cash generated from/(used in) financing activities 3,081,275 (7,455,519)

Net (decrease)/increase in cash and cash equivalents (1,344,494) 4,432,347

Cash and cash equivalents at beginning of financial year 17,861,299 13,546,733

Net exchange differences (60,648) (117,781)

Cash and cash equivalents at end of financial year (Note 13) 16,456,157 17,861,299


CONSOLIDATED STATEMENT OF CASH FLOWS





ASSETS NON-CURRENT ASSETS Investment in subsidiaries 8 9,230,505 9,230,505

CURRENT ASSETS

Other receivables 11 3,448,586 1,394,635Amount due from subsidiaries 12 7,089,420 8,678,171Tax recoverable 1,200 2,400Bank balances 13 261,157 3,374

10,800,363 10,078,580 TOTAL ASSETS 20,030,868 19,309,085

EQUITY AND LIABILITIES EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY

Share capital 14 14,806,176 14,806,176Retained profits 3,984,882 4,351,518

TOTAL EQUITY 18,791,058 19,157,694

CURRENT LIABILITIES

Other payables and accruals 17 1,212,811 136,157Amount due to subsidiaries 12 26,999 15,234

TOTAL LIABILITIES 1,239,810 151,391

TOTAL EQUITY AND LIABILITIES 20,030,868 19,309,085

STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2019





Revenue 20 - 15,000,120

Other income - -

Administrative expenses (366,636) (27,938)

(Loss)/Profit before taxation 21 (366,636) 14,972,182

Taxation 22 - -

(Loss)/Profit for the financial year (366,636) 14,972,182

Other comprehensive income - -

Total comprehensive (loss)/income for the financial year (366,636) 14,972,182

(Loss)/Profit for the financial year and total comprehensive (loss)/income attributable to:-Owners of the Company (366,636) 14,972,182Non-controlling interests - -

(366,636) 14,972,182

STATEMENT OF PROFIT OR LOSS ANDOTHER COMPREHENSIVE INCOME





STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

Share Retained capital profits Total RM RM RM

Balance at 1 January 2019 14,806,176 4,351,518 19,157,694

Loss for the financial year representing total comprehensive loss for the financial year - (366,636) (366,636)

Balance at 31 December 2019 14,806,176 3,984,882 18,791,058

Balance at 1 January 2018 6,176,016 3,009,496 9,185,512

Profit for the financial year representing total comprehensive income for the financial year - 14,972,182 14,972,182

Bonus issue of shares (Note 14) 8,630,160 (8,630,160) -

Dividend (Note 23) - (5,000,000) (5,000,000)





STATEMENT OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

2019 2018 RM RM

Cash flows from operating activities

(Loss)/Profit before taxation (366,636) 14,972,182

Adjustments for:-

Dividend income from subsidiaries - (15,000,120)

Operating loss before working capital changes (366,636) (27,938)

Increase in other receivables (2,053,951) (1,394,635)Decrease/(Increase) in amount due from subsidiaries 1,588,751 (7,533,405)Increase/(Decrease) in other payables 1,076,654 (343,097)Increase in amount due to subsidiaries 11,765 15,234Decrease in amount due to directors - (724,536)

Cash generated from/(used in) operations 256,583 (10,008,377)

Tax refunded 2400 100Tax paid (1,200) -

Net cash generated from/(used in) operating activities 257,783 (10,008,277)

Cash flows from investing activity Dividend received - 15,000,120

Net cash generated from investing activity - 15,000,120

Cash flows from financing activity Dividend paid (Note 23) - (5,000,000)

Net cash used in financing activity - (5,000,000)

Net increase/(decrease) in cash and cash equivalents 257,783 (8,157)

Cash and cash equivalents at beginning of financial year 3,374 11,531

Cash and cash equivalents at end of financial year (Note 13) 261,157 3,374




NOTES TO THE FINANCIAL STATEMENTS AT 31 DECEMBER 2019

1. GENERAL INFORMATION

Powerwell Holdings Berhad is a public limited liability company, incorporated and domiciled in Malaysia.

Its registered office is located at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur and principal place of business is located at No. 1B, Jalan Anggerik Mokara, 31/48, Seksyen 31, Kota Kemuning, 40460 Shah Alam, Selangor.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are set out in Note 8 to the financial statements.

These financial statements comprise the consolidated financial statements and the financial statements of the Company and they are presented in Ringgit Malaysia (“RM”).

The financial statements of the Group and of the Company were approved and authorised for issue by the Board of directors on 21 May 2020.

2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

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

The financial statements of the Group and the Company are prepared under the historical cost convention unless otherwise indicated in the summary of significant accounting policies.

The accounting policies applied by the Group and the Company are consistent with those applied in the previous financial year other than the application of new MFRSs, IC Interpretations and the amendments to MFRSs as disclosed in Note 2.2.

2.2 Application of New MFRSs, IC Interpretation and Amendments to MFRSs

During the financial year, the Group and the Company have applied the following new MFRSs, IC Interpretation and amendments to MFRSs issued by the Malaysian Accounting Standards Board (“MASB”) which are effective for accounting period beginning on or after 1 January 2019:-

MFRS 16, Leases Amendments to MFRS 9 - Prepayment Features with Negative Compensation Amendments to MFRS 119 - Plan Amendment, Curtailment or Settlement Amendments to MFRS 128 - Long-term Interests in Associates and Joint Ventures Amendments to MFRSs Classified as “Annual Improvements to MFRS Standards 2015 - 2017 Cycle”:

- Amendments to MFRS 3, Business Combinations and MFRS 11, Joint Arrangements-Previously Held Interest in a Joint Operation- Amendments to MFRS 112, Income Taxes - Income Tax Consequences of Payments on Financial Instruments Classified as Equity- Amendments to MFRS 123, Borrowing Costs - Borrowing Costs Eligible for Capitalisation

IC Interpretation 23, Uncertainty over Income Tax Treatments



NOTES TO THE FINANCIAL STATEMENTS

AT 31 DECEMBER 2019

2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.2 Application of New MFRSs, IC Interpretation and Amendments to MFRSs (cont’d)

The application of the new MFRS 16 has resulted in changes in the Group’s accounting policies as further explained in Note 3. The adoption of the IC Interpretation and amendments to MFRSs that are effective for the current financial year did not have any significant impact on the Group’s and the Company’s financial statements.

2.3 New MFRSs and Amendments to MFRSs That Are Not Yet Effective and Have Not Been Early Adopted

The Group and the Company have not early adopted the following new MFRSs and amendments to

MFRSs that have been issued by the MASB but are not yet effective:-

Effective for annual periods beginning on or after 1 January 2020 Amendments to MFRS 3 - Definition of a Business Amendments to MFRS 101, Presentation of Financial Statements and MFRS 108, Accounting Policies, Change in Accounting Estimates and Error - Definition of Material Amendments to MFRS 9 Financial Instruments, MFRS 139 Financial Instruments: Recognition and Measurement and MFRS 7 Financial Instruments: Disclosure - Interest Rate Benchmark Reform

Effective for annual periods beginning on or after 1 January 2022 Amendments to MFRS 101, Presentation of Financial Statements - Classification of Liabilities as current and non-current

Effective for annual periods beginning on or after 1 January 2023 MFRS 17, Insurance Contracts

Effective for annual periods beginning on or after a date to be determined by the MASB Amendments to MFRS 10 and MFRS 128 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The Group and the Company will apply the above new MFRSs and amendments to MFRSs that are applicable once they become effective. Their main features are summarised below.

2.3.1 Effective for annual periods beginning on or after 1 January 2020

(a) Amendments to MFRS 3 - Definition of a Business

The amendments clarify the definition of a business with the objective of assisting entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. The distinction is important because an acquirer does not recognise goodwill in an asset acquisition.

The amendments, amongst others, clarify that to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The amendments also add an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business.




2.3 New MFRSs and Amendments to MFRSs That Are Not Yet Effective and Have Not Been Early Adopted (cont’d)

2.3.1 Effective for annual periods beginning on or after 1 January 2020 (cont’d)

(a) Amendments to MFRS 3 - Definition of a Business (cont’d)

An entity shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020 and to asset acquisitions that occur on or after the beginning of that period.

(b) Amendments to MFRS 101 and Amendments to MFRS 108 - Definition of Material

The amendments refine the definition by including ‘obscuring information’ in the definition of material to respond to concerns that the effect of including immaterial information should not reduce the understandability of an entity’s financial statements. The prior definition focuses only on information that cannot be omitted (material information) and does not consider the effect of including immaterial information.

Other refinements to the definition include incorporating some existing wording in MFRS 101 and the Conceptual Framework for Financial Reporting. Consequently, the amendments align the definition of material across MFRS Standards and other publications.

Entities are required to apply the amendments prospectively for annual periods beginning on or after 1 January 2020.

The initial application of the new MFRSs and amendments to MFRSs is not expected to have any significant impact on the Group’s and on the Company’s financial statements.

2.4 Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries. The financial statements of the subsidiaries are prepared for the same reporting date as the Company. The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances.

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group:-

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

The Group reassesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of controls listed above.





2.4 Basis of Consolidation (cont’d)

Subsidiaries are consolidated using the acquisition method as explained in Note 2.5 and consolidation of a subsidiary begins from the date the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.

In preparing consolidated financial statements, intra-group balances and transactions and the resulting unrealised profits are eliminated on consolidation. Unrealised losses are eliminated on consolidation and the relevant assets are assessed for impairment. The consolidated financial statements reflect external transactions and balances only. When necessary, adjustments are made to the financial statements of subsidiaries to ensure conformity with the Group’s accounting policies. The total comprehensive income of a subsidiary is attributed to the Group and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received by the Group is recognised directly in equity and attributed to owners of the Company. If the Group loses control of a subsidiary, the assets (including any goodwill) and liabilities of the subsidiary and non-controlling interests will be derecognised at their carrying amounts at the date when control is lost. Any investment retained in the former subsidiary is recognised at its fair value at the date when control is lost. The resulting difference between the amounts derecognised and the aggregate of the fair value of consideration received and investment retained is recognised as gain or loss in profit or loss attributable to the Group.

2.5 Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred for the acquisition of an acquiree is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred, equity interests issued and contingent consideration given. Acquisition-related costs are recognised as an expense in the periods in which the costs are incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their acquisition-date fair values, except for non- current assets (or disposal group) that are classified as held for sale which shall be measured at fair value less costs to sell.

Goodwill is measured as the excess of the aggregate of the consideration transferred, the amount of any non-controlling interests and the acquisition-date fair value of any previously held equity interest over the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed. The excess of the Group’s interest in the net amounts of the identifiable assets, liabilities and contingent liabilities over the aggregate of the consideration transferred, the amount of any non-controlling interests and the acquisition- date fair value of any previously held equity interest is recognised immediately in profit or loss.


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2.5 Business Combinations (cont’d)

Non-controlling interests represent that portion of profit or loss and net assets of a subsidiary not attributable, directly or indirectly, to the Group. For each business combination, non-controlling interests are measured either at their fair value at the acquisition date or at the non-controlling interests’ proportionate share of the subsidiary’s identifiable net assets. Non-controlling interests in the net assets of consolidated subsidiaries comprised the amount of non-controlling interests at the date of original combination and their share of changes in equity since the date of combination.

In a business combination achieved in stages, any previously held equity interest is remeasured at its acquisition-date fair value and the resulting gain or loss is recognised in profit or loss.

2.6 Goodwill

Goodwill arising on the acquisitions of subsidiaries is recognised as an asset and carried at cost as established at the acquisition date less any accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill from acquisition date is allocated to each of the Group’s cash- generating unit (“CGU”) or groups of CGUs that are expected to benefit from the synergies of the combination in which the goodwill arose. The test for impairment of goodwill on consolidation is in accordance with the Group’s accounting policy for impairment of non- financial assets. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Where goodwill forms part of a CGU or groups of CGUs and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation and the portion of the CGU retained.

2.7 Associates

An associate is an entity, including an unincorporated entity, over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method. Under the equity method, the investments in associates are initially recognised at cost and adjusted thereafter for the Group’s share of the profit or loss and changes in the associates’ other comprehensive income after the date of acquisition. Equity accounting is discontinued when the Group’s share of losses of an associate equals or exceeds its interest in the associate. Once the Group’s interest in such associate is reduced to zero, additional losses are provided for and a liability recognised, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.





AT 31 DECEMBER 2019


2.7 Associates (cont’d)

Unrealised gain on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are eliminated and the relevant assets are assessed for impairment.

On acquisition of an investment in an associate, any excess between the cost of the investment and the Group’s share of net fair value of the associate’s identifiable asset and liabilities is accounted for as goodwill and is included in the carrying amount of the investment and is not amortised. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets and liabilities over the cost of the investment is included as income in the determination of the Group’s share of the associate’s profit or loss in the period in which the investment is acquired.

After the application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the associate. The Group determines at the end of each reporting date whether there is any objective evidence that the investments in associates are impaired. If such evidence exists, the Group determines the amount of impairment by comparing the investment’s recoverable amount with its carrying amount (including goodwill) and the impairment loss is recognised to profit or loss as part of the Group’s share of results of associates.

In applying the equity method of accounting, the latest audited financial statements of the associate are used. Where the reporting dates of the Group and the associate are not coterminous, equity accounting is applied on the management accounts made to the financial year end of the Group. Uniform accounting policies are adopted for like transactions and events in similar circumstances.

When the Group reduces its equity interest in an associate but continues to apply the equity method, the Group reclassifies to profit or loss the proportion of gain or loss that had previously been recognised in other comprehensive income.

The Group discontinues the use of equity method from the date when its investment ceases to be an associate. If the Group retains interest in the former associate and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date. The Group recognises in profit or loss the difference between (i) the fair value of any retained interest and any proceeds from disposing of a part interest in the associate; and (ii) the carrying amount of the investment at the date the equity method was discontinued.

2.8 Investments in Subsidiaries and Associates

In the Company’s separate financial statements, investments in subsidiaries and associates are accounted for at cost less any accumulated impairment losses. The investments are reviewed for impairment in accordance with the Group’s accounting policy for impairment of non-financial assets as disclosed in Note 2.12.2. On disposal of such investments, the difference between the net disposal proceeds and the net carrying value of the investments is recognised as a gain or loss on disposal in the Company’s profit or loss.




2.9 Property, Plant and Equipment and Depreciation

Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.

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

Freehold land is not depreciated. Leasehold building is amortised on a straight-line basis over the period of its lease terms of 90 years. All other property, plant and equipment are depreciated on the straight-line basis so as to write off the cost of the assets to their residual values over their estimated useful lives. The estimated useful lives of the Group and of the Company’s property, plant and equipment are as follows:-

Leasehold building 90 years Freehold building 50 years Office renovation 10 years Furniture and fittings 10 years Office equipment 10 years Machinery 10 years Tools and equipment 10 years Motor vehicles 5 years

The residual values and useful lives of assets are reviewed at each financial year end and adjusted prospectively, if appropriate, where expectations differ from previous estimates. Property, plant and equipment are reviewed for impairment in accordance with the Company’s accounting policy for impairment of non-financial assets as disclosed in Note 2.12.2.

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

2.10 Intangible Assets Intangible assets include computer software and distribution rights. These intangible assets are carried

at costs less accumulated amortisation and any accumulated impairment losses. Costs include their purchase prices and any directly attributable costs of preparing the assets for their intended use. These costs are amortised on the straight-line basis over the period the assets are expected to generate economic benefits.





AT 31 DECEMBER 2019


2.10 Intangible Assets (cont’d)

The estimated useful lives are as follows:-

Computer software 5 years Distribution rights 5 years

The estimated useful life and amortisation method are reviewed at the end of each reporting period with the effect of any changes in estimates being accounted for on a prospective basis.

2.11 Financial Assets

The Group recognises all financial assets in its statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instruments.

All regular way purchases or sales of financial assets are recognised and derecognised using trade date accounting. A regular way purchase or sale is a purchase or sale of a financial asset that requires delivery of asset within the time frame established generally by regulation or convention in the marketplace concerned. Trade date accounting refers to:-

• the recognition of an asset to be received and the liability to pay for it on the trade date i.e. the date the Group commits itself to purchase or sell an asset; and

• derecognition of an asset that is sold, the recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment in the trade date.

2.11.1 Classification

The Group classifies its financial assets into the following measurement categories depending on the business models used for managing the financial assets and the contractual cash flow characteristics of the financial assets:-

(a) at amortised cost;(b) fair value through other comprehensive income; and(c) fair value through profit or loss.

Financial assets are reclassified when and only when the Group changes its business model for managing the financial assets and the reclassification of all affected financial assets is applied prospectively from the reclassification date i.e. on the first day of the first reporting period following the change in business model.

2.11.2 Measurement

At initial recognition, trade receivables without a significant financing component are measured at their transaction price when they are originated.




2.11 Financial Assets (cont’d)

2.11.2 Measurement (cont’d)

Other financial assets are initially measured at fair value plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. Transaction costs of financial assets at fair value through profit or loss are expensed to profit or loss when incurred.

(a) Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business models for managing the financial assets and the contractual cash flow characteristics of the financial assets. The Group’s debt instruments are categorised into the following measurement categories:-

(i) Amortised cost

A financial asset is measured at amortised cost if both of the following conditions are met and it is not designated as at fair value through profit or loss at initial recognition:-

• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.

These financial assets are measured at amortised cost using the effective interest method less any impairment losses. Interest income, gains or losses on derecognition, foreign exchange gains or losses and impairment are recognised in profit or loss. Impairment losses are presented as a separate line item in the statement of profit or loss and other comprehensive income.

(ii) Fair value through other comprehensive income (“FVOCI”)

A financial asset is measured at FVOCI if both of the following conditions are met and it is not designated as FVTPL at initial recognition:-

• the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.







(a) Debt instruments (cont’d)

(ii) Fair value through other comprehensive income (“FVOCI”) (cont’d)

Changes in fair value of these financial assets are recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gains or losses previously recognised in other comprehensive income is reclassified from equity to profit or loss. Interest income calculated using the effective interest method, foreign exchange gains or losses and impairment are recognised in profit or loss. Impairment losses are presented as a separate line item in the statement of profit or loss and other comprehensive income.

(iii) Fair value through profit or loss (“FVTPL”)

A financial asset is measured at FVTPL if it does not meet the criteria for amortised cost or FVOCI. This includes all derivative financial assets.

The Group may, at initial recognition, irrevocably designate a financial asset as measured at FVTPL that otherwise meets the criteria for amortised cost or FVOCI if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Changes in fair value of financial assets at FVTPL and interest or dividend income are recognised in profit or loss.

(b) Equity instruments

The Group subsequently measures all equity investments at fair value.

For equity investments at FVTPL, changes in fair value are recognised in profit or loss. Where the Group has elected to present the changes in fair value in other comprehensive income, the amounts presented are not subsequently transferred to profit or loss when the equity investments are derecognised. The cumulative gains or losses is transferred to retained profits instead. The election is made on an instrument-by-instrument basis and it is irrevocable. The amount presented in other comprehensive income includes the related foreign exchange gains or losses.

Dividend income from equity investments at FVTPL and FVOCI is recognised in profit or loss as other income when the Group’s right to receive payment has been established.


AT 31 DECEMBER 2019






(b) Equity instruments (cont’d)

Changes in the fair value of equity investments at FVTPL are recognised in other income or expenses, as applicable, in the profit or loss. Impairment losses or reversal of impairment losses on equity instruments measured at FVOCI are recognised in other comprehensive income and are not reported separately from other changes in fair value.

2.11.3 Derecognition of financial assets

The Group derecognises a financial asset when, and only when, the contractual rights to the cash flows from the financial asset expires or it transfers the financial asset without retaining control or transfers substantially all the risks and rewards of ownership of the financial asset to another party.

On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of derecognition and the sum of the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss.

2.12 Impairment

2.12.1 Financial assets

The Group recognises loss allowance for expected credit losses (“ECLs”) on:-

• financial assets measured at amortised cost;• debt instruments measured at fair value through other comprehensive income (“FVOCI”);• contract assets;• lease receivables; and• financial guarantee contracts.

The Group measure loss allowances at an amount equal to lifetime expected credit loss, except for debt securities that are determined to have low credit risk at the reporting date, cash and bank balance and other debt securities for which credit risk has not increased significantly since initial recognition, which are measured at 12- month expected credit loss. Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime expected credit loss.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit loss, the Group consider reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information, where available.





2.12 Impairment (cont’d)

2.12.1 Financial assets (cont’d)

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has assessed individual receivables by using a default risk model or by estimating the cash flow expected to be recovered.

At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at fair value through other comprehensive income are credit-impaired. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

The Group may consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flow in its entirety or a portion thereof.

An impairment loss in respect of financial assets measured at amortised cost is recognised in profit or loss and the carrying amount of the asset is reduced through the use of an allowance account.

2.12.2 Non-financial assets

The carrying amounts of non-financial assets (other than inventories, contract assets, lease receivables, deferred tax assets, assets arising from employee benefits, investment property that is measured at fair value and non-current assets or disposal groups held for sale) are reviewed for impairment at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss. For goodwill recognised in a business combination and that has an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated annually or more frequently when indicators of impairment are identified.

An impairment loss is recognised if the carrying amount of an asset or a cash generating unit (“CGU”) exceeds its recoverable amount. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment losses recognised in respect of CGUs (or groups of CGUs) are allocated first to reduce the carrying amount of any goodwill arising from a business combination allocated to the units (or groups of units) and then to reduce the carrying amount of the other assets in the units (or groups of units) on a pro rata basis.


AT 31 DECEMBER 2019




2.12 Impairment (cont’d)

2.12.2 Non-financial assets (cont’d)

The recoverable amount of an asset or CGU is the higher of its fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised in profit or loss in the period in which it arises.

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

2.13 Inventories

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

Cost of raw materials is determined on first in first out basis. For finished goods, cost consists of materials, direct labour and an appropriate proportion of production overhead. Net realisable value represents the estimated selling price in the ordinary course of business less all other estimated costs of completion.

2.14 Cash and Cash Equivalents

Cash and cash equivalents include cash and bank balances, deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, reduced by bank overdrafts. The statements of cash flows are prepared using the indirect method.

2.15 Non-current Assets (or Disposal Groups) Classified as Held for Sale

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

On initial classification as held for sale, non-current assets or disposal groups (other than deferred tax

assets, financial assets and inventories) are measured at the lower of their carrying amount and fair value less costs to sell. Any differences are included in profit or loss.





AT 31 DECEMBER 2019


2.16 Financial Liabilities

The Group recognises all financial liabilities in its statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instruments.

2.16.1 Classification and measurement

Financial liabilities are initially measured at fair value minus, in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs. Transaction costs of financial liabilities at fair value through profit or loss are expensed to profit or loss when incurred.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities measured at amortised cost.

(a) Fair value through profit or loss (“FVTPL”)

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL upon initial recognition or derivatives that are liabilities.

A financial liability is classified as held for trading if:-

• it has been incurred principally for the purpose of repurchasing it in the near term; or

• on initial recognition, it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short- term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

After initial recognition, financial liabilities at FVTPL are measured at fair value with any gains or losses arising from changes in fair value recognised in profit or loss. If a financial liability is designated as at FVTPL, the change in fair value that is attributable to changes in the credit risk of that liability is presented in other comprehensive income and the remaining change in fair value of the liability is presented in profit or loss. The net gains or losses recognised in profit or loss do not include any exchange differences or interest paid on the financial liability. Exchange differences and interest expense on financial liabilities at FVTPL are recognised separately in profit or loss as part of other income or other expenses.

(b) Amortised cost

All financial liabilities, other than those categorised as FVTPL are subsequently measured at amortised cost using the effective interest method.

A gain or loss on financial liabilities at amortised cost is recognised in profit or loss when the liabilities are derecognised and through the amortisation process.




2.16 Financial Liabilities (cont’d)

2.16.2 Derecognition of financial liabilities

A financial liability is derecognised when, and only when, the obligation specified in the contract is extinguished. When an existing financial liability is exchanged with the same lender on substantially different terms or the terms of an existing liability are substantially modified, they are accounted for as an extinguishment of the original financial liability and a new financial liability is recognised. The difference between the carrying amount of a 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.

2.17 Offsetting Financial Instruments

Financial assets and financial liabilities are offset when the Group has a legally enforceable right to offset and intends to either settle on a net basis, or to realise the asset and settle the liability simultaneously.

2.18 Financial Guarantee Contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are measured at the higher of (i) the amount determined in accordance with the expected credit loss model; and (ii) the amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance with the principles of MFRS 15 Revenue from Contracts with Customers .

2.19 Derivatives Financial Instruments

The Group enters into derivative financial instruments such as forward foreign currency contracts to manage its exposure to foreign currency risks.

Derivatives are initially recognised at fair value at the date the derivative contract is entered and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately.

A derivative with a positive fair value is recognised as a financial asset and derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non- current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

The Group has not designated any derivatives as hedging instruments.





AT 31 DECEMBER 2019


2.19 Derivatives Financial Instruments (cont’d)

Embedded derivatives

Embedded derivatives are separated from host contract and accounted for separately if the host contract is not a financial asset and when their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at fair value through profit or loss.

2.20 Share Capital

Ordinary shares are classified as equity. Distributions to holders of ordinary shares are debited directly to equity and dividends declared on or before the end of the reporting period are recognised as liabilities. Costs directly attributable to equity transactions are accounted for as a deduction, net of tax, from equity.

2.21 Employee Benefits

2.21.1 Short-term employee benefits

Wages, salaries, social security contributions, paid annual and sick leave, bonuses and non-monetary benefits are recognised as an expense, in the period in which the associated services are rendered by the employees of the Group.

2.21.2 Post-employment benefits

Defined contribution plans

The Group provides post-employment benefits by way of contribution to defined contribution plans operated by the relevant authorities at the prescribed rates.

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.

The Group’s contributions to defined contribution plans are recognised as an expense in the period to which they relate.

2.22 Contingencies

A contingent liability or asset is a possible obligation or benefit that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within control of the Group.

Contingent liabilities and assets are not recognised in the statement of financial position of the Group and of the Company.





2.23 Leases

Accounting policies applied from 1 January 2019

The Group as lessee

At the inception of the contract, the Group assesses if the contract contains a lease. A contract contains a lease if the contract convey the right to control the use of an asset for a period of time in exchange for consideration. Reassessment is only required when the terms and conditions of the contract are changed.

The Group recognises a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is initially measured at cost which comprise the corresponding lease liability adjusted for any lease payments made at or before the lease commencement date and initial direct costs. Whenever there is an obligation to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the agreed condition, a provision is recognised. These costs are also included in the related right-of-use assets.

Right-of-use assets are measured at cost less accumulated depreciation and impairment losses. They are depreciated over the shorter period of lease term and useful life of the underlying assets. The depreciation starts on the lease commencement date.

The lease liability is initially measured at the present value of the lease payments that are not paid at the lease commencement date, discounted using the rate implicit in the lease or incremental borrowing rate, where applicable. Lease payments included in the measurement of the lease liability comprise:

• fixed lease payments, less lease incentives; • variable lease payments based on an index or rate; and • payments of penalties for terminating the lease.

Variable lease payment (not based on an index or rate) is recognised as an expense in the period in which it is incurred.

The Group has elected not to recognise right-of-use assets and lease liabilities for short- term leases and leases of low value assets. For short-term leases (i.e. leases with a lease term of 12 months or less) and leases of low value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

Accounting policies applied until 31 December 2018

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership of the leased assets. All other leases are classified as operating leases.

Assets acquired under hire purchase arrangements are recognised and measured in a similar manner as finance leases.




AT 31 DECEMBER 2019


2.23 Leases (cont’d)

Accounting policies applied until 31 December 2018 (cont’d)

(i) Assets acquired under hire purchase and finance lease arrangements

Assets acquired under hire purchase and finance lease arrangements are stated at the amounts equal at the inception of the arrangement to the lower of the fair values and the present values of the minimum hire purchase or lease payments.

The corresponding obligations are taken up as hire purchase or finance lease liabilities. Hire purchase or lease payments are apportioned between the outstanding liabilities and finance charges which are recognised in profit or loss over the period of the hire purchase/lease term so as to produce a constant periodic rate of interest on the remaining balance of the liabilities for each period.

The depreciation policy of property, plant and equipment acquired under hire purchase and finance lease arrangements are consistent with the Group’s depreciation policy as set out in Note 2.9 above.

(ii) Operating lease Operating lease payments are recognised as expenses in profit or loss on a straight-line basis

over the period of the relevant leases.

2.24 Income Taxes

Taxation is the aggregate amount of current and deferred taxes. Current and deferred taxes are recognised as income or expense in profit or loss except to the extent that the taxes relate to items recognised outside profit or loss, either in other comprehensive income or directly in equity or a business combination.

Current tax assets and liabilities is the expected tax payable on the taxable profit for the year or tax recoverable from the taxation authorities and is calculated using tax rates enacted or substantially enacted at the end of the reporting period.

Deferred tax is recognised, using the liability method, on temporary differences at end of the reporting period between the carrying amounts of assets and liabilities in the financial statements and the amounts attributed to those assets and liabilities for taxation purposes.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences and unabsorbed tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the assets can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that the related tax benefits will be realised.




2.24 Income Taxes (cont’d)

Tax rates enacted or substantively enacted at the end of the reporting period are used to determine deferred tax.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

2.25 Revenue Recognition

The Group recognises revenue from a contract with customer when it satisfies a performance obligation by transferring control of a promised good or service to the customer. Performance obligations may be satisfied over time or at a point in time. Revenue is measured based on the consideration specified in the contract which the Group expects to be entitled in exchange for transferring the good or service, excluding the amounts collected on behalf of third parties.

The Group recognise revenue from the following business activities:-

(a) Sales of electricity distribution products and installation services

Revenue from sales of electricity distribution products is recognised at the point in time when control of the asset is transferred to the customer, generally on acceptance by customers of the individual contracts.

The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated (e.g., warranties). In determining the transaction price for the sale of electricity distribution products, the Group considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).

Installation services

The Group provides installation services that are either sold separately or bundled together with the sale of equipment to a customer. The installation services can be obtained from other providers and do not significantly customise or modify the electricity distribution products.

Contracts for bundled sales of equipment and installation services are comprised two performance obligations because the promises to transfer equipment and provide installation services are capable of being distinct and separately identifiable. Accordingly, the Group allocates the transaction price based on the relative stand- alone selling prices of the equipment and installation services.

The Group recognises revenue from installation services over time, using an input method to measure progress towards complete satisfaction of the service, because the customer simultaneously receives and consumes the benefits provided by the Group. Revenue from the sale of the electricity distribution products are recognised at a point in time, generally upon delivery of the equipment.





AT 31 DECEMBER 2019


2.26 Revenue from other sources and other income

(a) Dividend income

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

(b) Interest income

Interest income is recognised on a time proportion basis, taking into account the principal outstanding and the effective interest rate applicable.

2.27 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds.

2.28 Foreign Currency

(i) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.

(ii) Foreign currency transactions and translations

In preparing the financial statements of the individual entities, transactions in foreign currencies are measured in the respective functional currencies at the exchange rates approximating those ruling at the transaction dates. At each year end, monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the year end. 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. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are recognised in profit or loss.




2.28 Foreign Currency (cont’d)

(ii) Foreign currency transactions and translations (cont’d)

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income. Exchange differences arising from such non-monetary items are recognised to other comprehensive income.

2.29 Earnings per Share

The Group presents basic and diluted (where applicable) earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. No adjustment is made for anti-dilutive potential ordinary shares.

2.30 Operating Segments

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

2.31 Provisions

Provisions are recognised when the Group has a present legal and constructive obligation as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the effect of time value of money is material, the amount of provision is measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the amount of a provision due to passage of time is recognised as finance cost.





2.32 Fair Value Measurements

Fair value of an asset or a liability, except for share-based payment and leasing transactions, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial assets, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

When measuring fair value, the Group maximises the use of relevant observable inputs and minimises the use of unobservable inputs. Fair value measurements are categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:-

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); andLevel 3: Inputs for the asset or liability that are not based on observable market data (unobservable

inputs).

Transfer between levels of the fair value hierarchy are deemed to have occurred on the date of the event or change in circumstances that caused the transfer.

3. CHANGES IN ACCOUNTING POLICIES

The Group has adopted the new MFRS 16 Leases for the first time in the current period of financial statements commencing from 1 January 2019. The adoption has resulted in changes in the Group’s accounting policies as explained further in Notes 3.1.

Due to the transitional methods chosen by the Group in applying the new Standards, comparative information as presented throughout these financial statements has not been restated to the reflect the new requirements.

3.1 MFRS 16 Leases

MFRS 16 superseded the existing MFRS 117 Leases, IC Interpretation 4 Determining whether an Arrangement contains a Lease, IC Interpretation 115 Operating Leases – Incentives and IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease and it sets out the principles for the recognition, measurement, presentation and disclosures of leases.

MFRS 16 has been adopted without restating comparative information in accordance with the transitional provisions of the Standard and the reclassification and adjustments arising from the new requirements are therefore not reflected in the statement of financial position as at 31 December 2018. Instead, they are recognised in the opening balances as at 1 January 2019. The financial information presented up to 2018 do not reflect the requirements of MFRS 16 but rather those of MFRS 117.


AT 31 DECEMBER 2019



3. CHANGES IN ACCOUNTING POLICIES (CONT’D)

3.1 MFRS 16 Leases (cont’d) The following is a reconciliation of total operating lease commitments as at 31 December 2018 to the

lease liabilities recognised at 1 January 2019:- Group RM

Operating lease commitments disclosed at 31 December 2018 855,963 Discounted using incremental borrowing rate 5.36% Operating lease liabilities 1,503,213 Finance lease obligation 577,074

Total lease liabilities recognised under MFRS 16 at 1 January 2019 2,080,287

The impact of the initial application of MFRS 16 as at 1 January 2019 is as follows:-

(Restated) Carrying Effect of Carrying amount as at adoption of amount as at 01.01.2019 MFRS 16 01.01.2019 RM RM RM Group Non-current assets Property, plant and equipment 13,754,674 (994,828) 12,759,846 Right-of-use - 2,498,041 2,498,041

Non-current liabilities Lease liabilities 233,742 941,903 1,175,645

Current liabilities Lease liabilities 343,332 561,310 904,642

On transition to MFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under MFRS 16 was 5.36% per annum.

The Group’s tenancy of a building has a tenancy period of less than twelve months. The Group has elected not to recognised a lease liability for short-term leases (leases with an expected term of twelve months or less). Payments made under such leases are expensed on straight-line basis.

The expense relating to payments not included in the measurement of the lease liability during the financial year is as follows:-

Group RM

Expense relating to short-term leases (included in administrative expense) 72,761





AT 31 DECEMBER 2019

4. CRITICAL ACCOUNTING JUDGEMENT AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of financial statements in conformity with the MFRSs requires management to exercise their judgement in the process of applying the Group’s accounting policies and which may have significant effects on the amounts recognised in the financial statements. It also requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the results reported for the reporting period and that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Although these judgements and estimates are based on the management’s best knowledge of current events and actions, actual results may differ.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(a) Significant judgements in applying the Group’s accounting policies

In the process of applying the Group’s accounting policies, which are described in Note 2, the management are of the opinion that any instances of application of judgement are not expected to have a significant effect on the amounts recognised in the financial statements, apart from those involving estimations which are dealt with Note 4(b).

(b) Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

(i) Impairment of receivables

The Group recognises impairment losses using the expected credit loss model. Individual receivables are tested for impairment separately by using a default risk model or by estimating the cash flows expected be recovered. The actual credit losses may be different from allowance made and this may affect the Group’s financial position and results.

The amounts of allowances for ECL recognised as at 31 December 2019 in respect of trade and other receivables are disclosed in Note 11.

(ii) Depreciation

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The management estimates the useful lives of property, plant and equipment to be between 5 to 90 years. These are common life expectancies applied in the industry. The carrying amounts of the Group’s and the Company’s property, plant and equipment as at 31 December 2019 are stated in Note 5 to the financial statements. Changes in the expected level of usage and technological developments could impact the economic useful lives and residual values of these assets, therefore future depreciation charges could be revised.



4. CRITICAL ACCOUNTING JUDGEMENT AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONT’D)

(b) Key sources of estimation uncertainty (cont’d)

(iii) Lease liability

The lease term has been determined based on the non-cancellable period of lease in term and conditions of the arrangements together with both:-

• periods covered by an option to extend the lease; and• periods covered by an option to terminate the lease.

In determining whether it is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease, management has considered all relevant factors and circumstances that have created the economic incentives to exercise such options when exercising its judgement in the assessment.

The lease terms and discount rates have been determined using appropriate assumptions as necessary including management’s estimation of the application internet costs.

The carrying amount of lease liabilities are disclosed in Note 15.

(iv) Income taxes

Judgement is involved in determining the provision for income taxes. There are certain transactions and computations for which the estimation of the provision for income taxes is made and which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred income tax provisions, where applicable, in the period in which such determination is made.





AT 31 DECEMBER 2019

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AT 31 DECEMBER 2019



5. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

5.1 The following fixed assets which are acquired under finance lease as at 31 December 2018 are presented based on MFRS 117 as follows:-

Accumulated Net carrying Current Group Cost depreciation amount depreciation 2018 RM RM RM RM Motor vehicles 2,124,286 801,819 1,322,467 401,776

5.2 The freehold land and certain buildings have been pledged to licensed banks for banking facilities granted to the Group as disclosed in Note 19 to the financial statements.

5.3 The net book values of property, plant and equipment that are held in trust by a Director of a subsidiary is as follows:-

Group 2019 2018 RM RM

Motor vehicles 120,655 178,569

6. RIGHT-OF-USE ASSETS Motor Group Building vehicles Total 2019 RM RM RM Cost

Balance at 1 January 2019 - - - Adjustments on initial application of MFRS 16 1,503,213 1,487,432 2,990,645 Balance at 1 January 2019 under MFRS 16 1,503,213 1,487,432 2,990,645 Additions 35,252 1,096,150 1,131,402 Reduction (963) - (963) Derecognition of right-of-use assets (30,621) - (30,621) Reclassification to plant and equipment - (167,525) (167,525) Net exchange differences (1,236) 191 (1,045)





6. RIGHT-OF-USE ASSETS (CONT’D) Motor Group (cont’d) Building vehicles Total 2019 RM RM RM Accumulated depreciation Balance at 1 January 2019 - - - Adjustments on initial application of MFRS 16 - 492,604 492,604 Balance at 1 January 2019 under MFRS 16 - 492,604 492,604 Charge for the financial year 725,555 378,669 1,104,224 Derecognition of right-of-use assets (9,185) - (9,185) Reclassification to plant and equipment - (142,658) (142,658) Net exchange differences (938) 171 (767) Balance at 31 December 2019 715,432 728,786 1,444,218 Net carrying amount At 1 January 2019 (restated) 1,503,213 994,828 2,498,041

At 31 December 2019 790,213 1,687,462 2,477,675

7. INTANGIBLE ASSETS Distribution rights Computer Low voltage Middle voltage Group software power power Total 2019 RM RM RM RM Costs Balance at 1 January 2019 6,541 463,857 514,932 985,330 Net exchange differences (37) - - (37)

Balance at 31 December 2019 6,504 463,857 514,932 985,293


AT 31 DECEMBER 2019



7. INTANGIBLE ASSETS (CONT’D)

Distribution rights Computer Low voltage Middle voltage Group (cont’d) software power power Total 2019 RM RM RM RM Accumulated depreciation Balance at 1 January 2019 6,541 463,857 463,439 933,837 Amortisation for the financial year - - 51,493 51,493 Net exchange differences (37) - - (37)

Balance at 31 December 2019 6,504 463,857 514,932 985,293 Carrying amount as at 31 December 2019 - - - -

Distribution rights Computer Low voltage Middle voltage Group software power power Total 2018 RM RM RM RM Costs Balance at 1 January 2018 6,578 463,857 514,932 985,367 Net exchange differences (37) - - (37)

Balance at 31 December 2018 6,541 463,857 514,932 985,330 Accumulated depreciation Balance at 1 January 2018 6,578 463,857 360,452 830,887 Amortisation for the financial year - - 102,987 102,987 Net exchange differences (37) - - (37)

Balance at 31 December 2018 6,541 463,857 463,439 933,837 Carrying amount as at 31 December 2018 - - 51,493 51,493





AT 31 DECEMBER 2019

8. INVESTMENTS IN SUBSIDIARIES

Company 2019 2018 RM RM

Unquoted shares, at cost 17,848,601 17,848,601 Less: Accumulated impairment loss (8,618,096) (8,618,096)

Net carrying amount 9,230,505 9,230,505

(a) Details of the subsidiaries are as follows:-

Names ofcompanies

Principalactivities

Country ofincorporation

Effective interest in equity

2019 2018

KejuruteraanPowerwellSdn. Bhd.


Malaysia 100% 100%

PowerwellInternationalSdn. Bhd.


Malaysia 100% 100%

Powerhouse FieldSdn. Bhd.

Property investment and management

Malaysia 100% 100%

PowerwellSdn. Bhd.("PSB")


Malaysia 100% 100%

DB Power Sdn. Bhd.

Assembly and trading of electricity distribution products

Malaysia 100% 100%

TCS SwitchgearsSdn. Bhd.

Dormant Malaysia 80% 80%

Powerwell Marketing Sdn. Bhd.


Malaysia 100% 100%

Subsidiary of PSB

Powerwell VietnamCompany Limited *


Vietnam 100% 100%

* Not audited by Folks DFK & Co.




8. INVESTMENTS IN SUBSIDIARIES (CONT’D)

(b) Non-controlling interests in subsidiary

The summarised financial information for a subsidiary that has non-controlling interests (“NCI”) are set out below.

The summarised financial information is presented before inter-company eliminations. TCS Switchgears Sdn Bhd Summarised assets and liabilities 2019 2018 RM RM

Current assets 9,766 16,864 Current liabilities 7,415 5,213 Net assets 2,351 11,651

Summarised profit or loss and other comprehensive income 2019 2018 RM RM

Revenue - - Total comprehensive loss for the year (9,300) (8,429) Dividend paid to non-controlling interests - - Summarised cash flows 2019 2018 RM RM

Net cash used in operating activities (7,398) (5,270) Net cash generated from investing activity - 19 Net decrease in cash and cash equivalents (7,398) (5,251)




AT 31 DECEMBER 2019

9. INVESTMENTS


Investments in quoted shares, at fair value 7,927 13,726

10. INVENTORIES Group 2019 2018 RM RMAt cost:- Raw materials 5,831,761 5,262,572 Work-in-progress 3,980,481 5,010,580 Finished goods 116,949 3,056,428

9,929,191 13,329,580

At net realisable value:- Work-in-progress 395,457 - Finished goods 1,103,386 -

1,498,843 - 11,428,034 13,329,580

The amount of inventories recognised as an expense during the financial year was RM47,587,199 (2018: RM56,336,255) and this has been included in cost of sales in profit or loss.

11. TRADE AND OTHER RECEIVABLES

Group Company 2019 2018 2019 2018 RM RM RM RM

Trade receivables 48,774,997 43,271,244 - -Less: Allowance for impairment loss (2,371,937) (2,735,708) - -

46,403,060 40,535,536 - -

Other receivables 2,028,623 845,860 - -Less: Allowance for impairment loss (197,068) (122,711) - -

1,831,555 723,149 - -

Balance carried forward 48,234,615 41,258,685 - -



11. TRADE AND OTHER RECEIVABLES (CONT’D)


Balance brought forward 48,234,615 41,258,685 - -Refundable deposits 482,901 417,950 - -Prepayments 3,627,508 1,394,935 3,448,586 1,394,635GST recoverable 240,862 561,033 - -

52,585,886 43,632,603 3,448,586 1,394,635

(a) The Group’s normal trade credit periods allowed range from 0 to 120 days (2018: 0 to 120 days). Other credit periods are assessed and approved on a case by case basis.

(b) Trade receivables that are individually determined to be impaired comprised those customers who have defaulted on their payments and are considered to have financial difficulties in repaying their debts.

Trade receivables that are not impaired are considered to be creditworthy and are able to settle their debts.

During the financial year, the Group did not renegotiate the terms of any trade receivables. (c) The amount of collaterals hold by the Group as security for certain trade receivables as at the end of

the reporting period are as follows:- Group 2019 2018 RM RM

Secured by bank guarantees 220,798 490,228

(d) The movements in allowance for impairment loss of trade receivables during the financial year are as follows:-


At beginning of financial year under MFRS 9/MFRS 139 2,735,708 967,444 Restated through opening retained profits - 2,139,117

Opening loss allowance as at 1 January under MFRS 9 2,735,708 3,106,561 Additional impairment loss 1,795,341 1,518,547 Bad debt written off - (367,282) Reversal of impairment loss (2,158,706) (1,521,985) Net exchange differences (406) (133)

At end of financial year 2,371,937 2,735,708




11. TRADE AND OTHER RECEIVABLES (CONT’D)

(e) The movements in allowance for impairment loss of other receivables during the financial year are as follows:-

Group 2019 2018 RM RM At beginning of financial year under MFRS 9/MFRS 139 122,711 19,334 Restated through opening retained profits - 18,790 Opening loss allowance as at 1 January under MFRS 9 122,711 38,124 Additional allowance for impairment loss 129,310 106,022 Bad debt written off - (19,334) Reversal of allowance for impairment loss (54,487) (2,130) Net exchange differences (466) 29

At end of financial year 197,068 122,711 (f) The trade and other receivables are denominated in the following currencies:- Group 2019 2018 RM RM

Ringgit Malaysia 44,668,337 31,647,258 United States Dollar 1,600,834 6,941,746 Indonesian Rupiah 19,493 - Vietnamese Dong 2,428,852 3,087,631

48,717,516 41,676,635

12. AMOUNT DUE FROM/(TO) SUBSIDIARIES

The amount due from/(to) subsidiaries are interest free, unsecured and repayable on demand. Settlements is expected to be made in cash.


AT 31 DECEMBER 2019



13. DEPOSITS, CASH AND BANK BALANCES

Group Company 2019 2018 2019 2018 RM RM RM RM Placement in money market deposits 4,372,150 11,797,099 - -Fixed deposits with licensed banks 7,330,098 1,266,098 - -Cash and bank balances 4,753,909 4,798,102 261,157 3,374 16,456,157 17,861,299 261,157 3,374

(a) Deposits with a licensed bank of the Group amounting to RM719,505 (2018: RM723,570) have been pledged to a licensed bank for revolving credits as disclosed in Note 19 and hence, not available for general use.

(b) The effective interest rate of the placement in money market deposits and fixed deposits with licensed banks as at the end of reporting period per annum are as follows:-

Group 2019 2018 % % Placement in money market deposits 0.50 to 3.00 0.50 to 3.00 Fixed deposits with licensed banks 2.80 to 6.80 3.30 to 6.80

(c) The deposits, cash and bank balances are denominated in the following currencies:-

Group Company 2019 2018 2019 2018 RM RM RM RM Ringgit Malaysia 14,811,113 14,928,086 261,157 3,374 United States Dollar 346,829 1,810,708 - - Philippines Peso 596 1,165 - - Indonesian Rupiah 74,456 44,235 - - Vietnamese Dong 1,223,163 1,077,105 - - 16,456,157 17,861,299 261,157 3,374




14. SHARE CAPITAL 2019 2018 Number of Number of 2019 2018Company Shares Shares RM RM Issued and fully paid:- At beginning of financial year 493,152,000 1,232,880 14,806,176 6,176,016

Issued during the financial year:- - Issue of bonus share - 8,630,160 - 8,630,160- Subdivision of shares - 483,288,960 - -

At end of financial year 493,152,000 493,152,000 14,806,176 14,806,176

In the previous financial year, the issued and paid-up share capital of the Company was increased from RM6,176,016 to RM14,806,176 by way of:-

(a) Issued of 8,630,160 new ordinary shares in the Company at issue price of RM1.00 each by capitalising a sum of RM8,630,160 from the Company’s retained profits.

(b) Subdivision of the existing 9,863,040 ordinary shares of the Company into 493,152,000 ordinary shares.

All new ordinary shares issued in the previous financial year rank pari passu in respects with existing ordinary shares of the Company.

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 and rank equally with regard to the Company’s residual assets.

15. LEASE LIABILITIES


Lease liabilities (non-current) 941,390 233,742Lease liabilities (current) 894,488 343,332

1,835,878 577,074


AT 31 DECEMBER 2019



15. LEASE LIABILITIES (CONT’D)

The changes in lease obligations (fixed lease payments) are presented in accordance with MFRS 16 as follows:- Group 2019 RM

Balance at 1 January 2019 under MFRS 117 577,074Impact on initial application of MFRS 16 1,503,213

Balance at 1 January 2019 under MFRS 16 2,080,287Lease payment (1,522,651)Finance cost 611,406Addition 695,252Derecognition of lease (27,637)Net exchange differences (779)

Balance as at 31 December 2019 1,835,878

The lease liabilities of the Group are presented in accordance with MFRS 117 as follows:-

Group 2018 RMFuture minimum payments:-

Within 1 year 352,277Between 2 to 5 years 256,955More than 5 years -

609,232Future finance charges (32,158)

Present value 577,074Payable within 1 year (included under current liabilities) 343,332

Payable after 1 year (included under non-current liabilities) 233,742




16. DEFERRED TAX LIABILITIES


Balance at beginning of financial year 1,041,591 860,067Adjustments on initial application of MFRS 9 - (336,113)Recognised in profit or loss (58,889) 517,637

Balance at end of financial year 982,702 1,041,591 (a) The components and movements of deferred tax assets and liabilities during the financial year prior to

offsetting are as follows:-

Recognised Group As at in profit As at 01.01.2019 or loss 31.12.2019 2019 RM RM RM

Deferred tax assets Other deductible temporary differences (56,344) (170) (56,514) Unutilised capital allowances - (201) (201) Unabsorbed business losses - (850) (850)

(56,344) (1,221) (57,565)

Deferred tax liabilities Other taxable temporary differences 38,821 (38,821) - Excess of capital allowances over depreciation 963,143 (16,321) 946,822 Surplus from used of fair value as deemed cost of property, plant and equipment # 95,971 (2,526) 93,445 1,097,935 (57,668) 1,040,267

Net 1,041,591 (58,889) 982,702


AT 31 DECEMBER 2019



16. DEFERRED TAX LIABILITIES (CONT’D) (a) The components and movements of deferred tax assets and liabilities during the financial year prior to

offsetting are as follows (cont’d):- Adjustments on initial Recognised Group As at application of in profit As at 01.01.2018 MFRS 9 or loss 31.12.2018 2018 RM RM RM RM Deferred tax assets Other deductible temporary differences (186,009) (336,113) 465,778 (56,344)

(186,009) (336,113) 465,778 (56,344)

Deferred tax liabilities Other taxable temporary differences 17,438 - 21,383 38,821 Excess of capital allowances over depreciation 930,141 - 33,002 963,143 Surplus from used of fair value as deemed cost of property, plant and equipment # 98,497 - (2,526) 95,971

1,046,076 - 51,859 1,097,935 Net 860,067 (336,113) 517,637 1,041,591

# The Group elected to apply the optional exemption to use previous revaluation or valuation at the date of transition to MFRSs as deemed cost under MFRSs.

(b) Deferred tax assets have not been recognised in respect of the following temporary differences (stated at gross amounts) due to the uncertainty of their realisation in the foreseeable future:-

Group 2019 2018 RM RM Unutilised capital allowances 89,980 89,980 Unabsorbed tax losses 88,000 73,103





AT 31 DECEMBER 2019

17. TRADE AND OTHER PAYABLES


Trade payables 21,699,001 29,866,829 - -Other payables 3,863,365 3,786,496 1,187,967 112,657Customer deposits (Note 17(b)) 1,207,378 773,384 - -Accruals 1,423,143 2,136,864 24,844 23,500

28,192,887 36,563,573 1,212,811 136,157

(a) The normal trade credit terms granted to the Group range from 0 to 120 days (2018: 0 to 120 days).

(b) Customer deposits relate to deposits made by customers for the purchases of electricity distribution product which were partially delivered or have yet to be delivered by the Group at the reporting date. The Group applies the practical expedient in MFRS 15 “Revenue from Contracts with Customers” on not disclosing the aggregate amount of the revenue expected to be recognised in the future as the performance obligation is part of a contract that has an original expected duration of less than one year.

(c) The trade and other payables are denominated in the following currencies:-


Ringgit Malaysia 26,869,636 32,528,722 1,212,811 136,157 United States Dollar 176,244 2,546,644 - - Euro - 373,066 - - Philippine Peso 1,893 1,893 - - Singapore Dollar 440 541 - - Indonesian Rupiah 54,564 12,908 - - Vietnamese Dong 1,090,110 1,099,799 - -

28,192,887 36,563,573 1,212,811 136,157

18. AMOUNT DUE TO DIRECTORS

The amount due to directors are interest free, unsecured and repayable on demand. Settlement is expected to be made in cash.



19. BANK BORROWINGS


Revolving credits (secured) - 207,089Bankers’ acceptance (secured) 4,200,000 -

4,200,000 207,089

(a) The revolving credits facility of the Group was:-

(i) lien over certain fixed deposits of a subsidiary as disclosed in Note 13; and

(ii) secured by way of corporate guarantee by a subsidiary of the Group.

(b) The bankers’ acceptance facility obtained from a licensed bank are secured as follows:-

(i) First legal charge over a 3 storey factory cum warehouse of the Group; (ii) Corporate guarantee from the Company and related companies; and (iii) Jointly and severally guaranteed by certain directors of the Group.

(c) The currency profile of bank borrowings are as follows:-


Ringgit Malaysia 4,200,000 - Vietnamese Dong - 207,089

4,200,000 207,089




20. REVENUE


Sales of electricity distribution products 88,131,509 105,351,738 - -Dividend income - - - 15,000,120 88,131,509 105,351,738 - 15,000,120

The timing of revenue recognition is at a point in time.

Disaggregation of revenue by geographical location is as disclosed in Note 28.2.

21. PROFIT BEFORE TAXATION Group Company

2019 2018 2019 2018 RM RM RM RM

This has been arrived at after charging:- Auditors’ remunerations - Statutory audit - Current year 128,687 127,216 20,000 20,000 - Over provided in prior year (2,500) (13,290) - (9,290) - Other professional services 10,000 - 10,000 -Amortisation of intangible assets 51,493 102,987 - -Bad debts written off 19,334 - - -Depreciation of property, plant and equipment - Cost of sales 557,608 503,290 - - - Administrative expenses 621,305 986,740 - -Depreciation of right-of-use assets - Cost of sales 573,725 - - - - Administrative expenses 530,499 - - -Deposit written off 1,500 6,000 - -Directors’ fees 150,000 - 150,000 -Director’s remunerations - Directors of the Company 2,058,712 1,625,113 2,400 - - Directors of subsidiaries 906,888 598,978 - -Loss on changes in fair value of investments 5,799 1,113 - -


AT 31 DECEMBER 2019



21. PROFIT BEFORE TAXATION (CONT’D) Group Company

2019 2018 2019 2018 RM RM RM RM

This has been arrived at after charging (cont’d):-

Impairment loss on inventories 948,001 - - -Impairment loss on:- - Trade receivables 1,795,341 1,518,547 - -- Other receivables 129,310 106,022 - -Interest expenses 781,187 227,082 - -Loss on disposal of property, plant and equipment - 3,839 - -Property, plant and equipment written off 263 10,419 - -Realised loss on foreign exchange 14,187 402,979 142 704Rental of premises 72,761 855,963 - -Royalty fees - 95,002 - -Unrealised loss on foreign exchange 99,947 92,101 - -

and crediting:-

Dividend income - - - 15,000,120Gain on derecognition of right-of-use assets 5,238 - - -Gain on disposal of property, plant and equipment 80,000 1,822 - -Interest income 287,072 386,563 - -Late payment interest income 439,320 331,748 - -Reversal of allowance for impairment loss on:- - Trade receivables 2,158,706 1,521,985 - - - Other receivables 54,487 2,130 - -Realised gain on foreign exchange 63,422 - - -Unrealised gain on foreign exchange 27,375 146,293 - -





AT 31 DECEMBER 2019

22. TAXATION Group Company

2019 2018 2019 2018 RM RM RM RMCurrent year income tax:- - Malaysian 4,043,741 3,790,260 - -- Foreign - 28,416 - -Deferred taxation relating to origination and reversal of temporary differences (113,086) 390,999 - -

3,930,655 4,209,675 - -Under/(over) provided in prior financial year:- - Income tax 8,607 (271,559) - - - Deferred tax 54,197 126,638 - -

Total tax expense 3,993,459 4,064,754 - -

(a) The reconciliation of tax expense applicable to the profit before taxation at the applicable statutory tax rate to the tax expense at the effective tax rate of the Group and Company is as follows:-

Group Company 2019 2018 2019 2018 RM RM RM RM Profit/(Loss) before taxation 13,113,161 16,198,779 (366,636) 14,972,182 Tax at the Malaysian statutory rates of 24% (2018: 24%) 3,147,159 3,887,707 (87,993) 3,593,324

Tax effects in respect of:- Tax savings on profits taxable at reduced/ scale rates - (21,500) - - Expenses not deductible for tax purposes 993,284 4,218,968 87,993 6,705 Income not subject to tax (213,489) (3,843,980) - (3,600,029) Deferred tax asset not recognised 3,659 - - - Utilisation of deferred tax assets not previously recognised - (13,603) - -

Balance carried forward 3,930,613 4,227,592 - -




22. TAXATION (CONT’D) (a) The reconciliation of tax expense applicable to the profit before taxation at the applicable statutory

tax rate to the tax expense at the effective tax rate of the Group and Company is as follows (cont’d):-


Balance brought forward 3,930,613 4,227,592 - - Tax exemptions and differential tax rates in foreign jurisdiction 42 (17,917) - - Under/(over) provision in prior years:- - Income tax 8,607 (271,559) - - - Deferred tax 54,197 126,638 - -

Total tax expense 3,993,459 4,064,754 - -

(b) The general income tax rate in Malaysia for the financial year under review is 24% (2018: 24%) of taxable income. Taxation for other jurisdiction is calculated at the rates prevailing in the respective jurisdictions.

(c) In respect of year of assessment 2018, the tax rate of 24% for taxable income in excess of the first RM500,000 shall be reduced by 1% to 4% should there be an increase in chargeable income by 5% to 20% as compared to the immediate preceding year.

(d) Subject to agreement by the respective tax authorities, the Group has the following estimated unutilised capital allowances and unabsorbed tax losses which are available for set-off against future taxable income:-

Group

2019 2018 RM RM

Unutilised capital allowances 90,817 89,980 Unabsorbed tax losses 91,542 73,103

182,359 163,083

In accordance with the provision of the Finance Act 2018 and subject to the approval of the tax authorities, the Company’s unabsorbed tax losses up to the year of assessment 2018 shall be available for deduction against future taxable profits until the year of assessment 2025 and any amount not utilised by the end of 2025 will be disregarded. Unabsorbed tax losses for the year of assessment 2019 onwards shall be available for deduction for a maximum period of seven consecutive years of assessment immediately following that year of assessment and any amount which is not deducted at the aforementioned period of seven years shall be disregarded.




AT 31 DECEMBER 2019

23. DIVIDEND

Group/Company 2019 2018 RM RM

Single tier interim dividend of 1.013886185 sen per share in respect of the financial year ended 31 December 2018 - 5,000,000

24. RELATED PARTY DISCLOSURES For the purpose of these financial statements, parties are considered to be related to the Group and the

Company if the Group and the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Other than those already disclosed elsewhere in these financial statements, the transactions carried out with related parties during the financial year and balance at end of financial year are as follows:-

(a) Related party balances Balances at year end included in the statements of financial position are as follows:-

Receivables/(Payables) Group Company 2019 2018 2019 2018 RM RM RM RM

Amount due from subsidiaries - - 7,089,420 8,678,171 Amount due to subsidiaries - - (26,999) (15,234) Amount due to directors (122,859) (28,038) - -

(b) Related party transactions Income/(Expense) Group Company 2019 2018 2019 2018 RM RM RM RM

Consultancy fees paid to a Director of the Company (9,000) - - -



24. RELATED PARTY DISCLOSURES (CONT’D) (c) Key management personnel compensation Key management personnel are defined as those persons having authority and responsibility for

planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel of the Group are the directors of the Group, and certain members of senior management of the Group, and their remunerations for the financial year are as follows:-


Salaries, wages, bonus and allowances 3,380,955 3,180,462 2,400 - Directors’ fees 150,000 - 150,000 - Amount contributed under defined contribution plan:- - Employees Provident Fund (EPF) 450,999 431,580 - - Others 10,822 12,543 - -

3,992,776 3,624,585 152,400 - Benefits-in-kind 167,200 158,075 - -

4,159,976 3,782,660 152,400 -

The year-end balance of amount due from key management personnel are amounted to RM35,443 (2018: amount due to key management personnel RM19,228).

25. EARNINGS PER SHARE 25.1 Basic The basic earnings per share is calculated based on the profit for the financial year attributable to

owners of the Group and is based on the weighted average number of ordinary shares in issue during the financial year.


Profit attributable to owners of the Company 9,121,562 12,135,711




25. EARNINGS PER SHARE (CONT’D)

25.1 Basic (cont’d) Group 2019 2018 Number Number of shares of shares Weighted average number of ordinary shares in issue during the financial year 493,152,000 493,152,000


Basic earnings per share 0.018 0.025

25.2 Diluted

The diluted earnings per share for the current and previous financial year is equal to the basic earnings per share for the respective financial year as there were no outstanding dilutive potential ordinary shares at year end.

26. STAFF COSTS

Group Group 2019 2018 2019 2018 RM RM RM RM

Staff costs comprise:- Salaries, wages, bonus and allowances 12,149,017 13,672,332 2,400 -Directors’ fees 150,000 - 150,000 -Contribution to defined contribution plan: - Employees Provident Fund (EPF) 1,261,496 1,074,747 - -Others staff related expenses 154,969 96,742 - -

13,715,482 14,843,821 152,400 -

The staff costs are charged under:-

Cost of sales 7,723,891 7,885,757 - -Administrative expenses 5,991,591 6,958,064 152,400 -

13,715,482 14,843,821 152,400 -


AT 31 DECEMBER 2019



27. NOTES TO STATEMENT OF CASH FLOWS

(a) Purchases of property, plant and equipment

Property, plant and equipment of the Group are acquired by the following means:-


Cash payments 229,795 291,320 Lease liabilities - 160,000

229,795 451,320

(b) Purchases of right-of-use assets Right-of-use assets of the Group are acquired by the following means:-


Cash payments 436,150 - Lease liabilities 695,252 -

1,131,402 -




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AT 31 DECEMBER 2019




28. SEGMENTAL INFORMATION

28.1 Operating segments Information about operating segments has not been reported separately as the Group’s revenue,

profit or loss, assets and liabilities are mainly confined to a single operating segment, namely design, manufacturing and trading of electrical distribution products and other related engineering services.

28.2 Geographical segments

In determining geographical segments of the Group, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets. The amount of non-current assets do not include goodwill and intangible asset, investments and deferred tax assets.

Group 2019 2018 RM RM Sales made located:- - inside Malaysia 74,047,344 61,199,185 - outside Malaysia 14,084,165 44,152,553

88,131,509 105,351,738 Non-current assets located:- - inside Malaysia 14,045,570 13,518,534 - outside Malaysia 266,632 236,140

14,312,202 13,754,674

28.3 Major customers There were no revenue from transactions with a single customer that amount to 10% or more of the

Group’s revenue.

29. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

Financial assets of the Group and of the Company include deposits with licensed banks, cash and bank balances, trade and other receivables, amount due from subsidiaries and investments.

Financial liabilities of the Group and of the Company include trade and other payables, bank borrowings, finance lease payables, amount due to subsidiaries and amount due to directors.




AT 31 DECEMBER 2019

29. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONT’D)

29.1 Categories of financial instrument The Group’s and the Company’s financial instruments are categorised as follows:- Financial assets per statement of financial position Fair value Carrying Amortised through amount cost profit or loss Group RM RM RM 2019 Investments 7,927 - 7,927 Trade and other receivables 48,717,516 48,717,516 - Deposits, cash and bank balances 16,456,157 16,456,157 -

65,181,600 65,173,673 7,927 2018 Investments 13,726 - 13,726 Trade and other receivables 41,676,635 41,676,635 - Deposits, cash and bank balances 17,861,299 17,861,299 - 59,551,660 59,537,934 13,726 Financial liabilities as per statement of financial position Carrying Amortised amount cost Group RM RM 2019 Trade and other payables 28,192,887 28,192,887 Amount due to directors 122,859 122,859 Bank borrowings 4,200,000 4,200,000 Lease liabilities 1,835,878 1,835,878

34,351,624 34,351,624 2018 Trade and other payables 36,563,573 36,563,573 Amount due to directors 28,038 28,038 Bank borrowings 207,089 207,089 Lease liabilities 577,074 577,074

37,375,774 37,375,774





29.1 Categories of financial instrument (cont’d) Financial assets per statement of financial position Carrying Amortised amount cost Company RM RM 2019 Amount due from subsidiaries 7,089,420 7,089,420 Bank balances 261,157 261,157

7,350,577 7,350,577

Carrying Loan and amount receivables Company RM RM 2018 Amount due from subsidiaries 8,678,171 8,678,171 Bank balances 3,374 3,374

8,681,545 8,681,545

Financial liabilities as per statement of financial position Carrying Amortised amount cost Company RM RM 2019 Other payables and accruals 1,212,811 1,212,811 Amount due to subsidiaries 26,999 26,999

1,239,810 1,239,810 2018 Other payables and accruals 136,157 136,157 Amount due to subsidiaries 15,234 15,234 151,391 151,391




AT 31 DECEMBER 2019


29.2 Financial risk and management objectives and policies The Group and the Company’s financial risk management policies seek to ensure that adequate

financial resources are available for the development of the Group and the Company’s businesses whilst managing their interest rate, liquidity, credit and foreign exchange risks. The Group and the Company operate within clearly defined guidelines that are approved by the directors and the Group and the Company’s policies are not to engage in speculative transactions. There has been no change to the Group and the Company’s exposure to these financial risks or the manner in which it manages and measures the risks. The policies in respect of the major areas of treasury activity are set out as follows:-

(a) Credit risk Credit risk is the risk of financial loss that may arise on outstanding financial instruments should

a counterparty default on its obligations. The Group’s exposure to credit risk is represented by the carrying amounts of each class of financial assets recognised in the consolidated statement of financial position. The Company’s exposure to credit risk arises principally from receivables and corporate guarantees given to a bank for banking facility.

The Group’s and the Company’s maximum exposure to credit risk as at 31 December 2019 is represented by the carrying amount of each class of financial assets recognised in the statement of financial position.

Receivables As at the end of the reporting period, the Group has significant concentration of credit risk

arising from the exposure to the amounts due by 16 major customers (2018: 10) representing approximately 69% (2018: 54%) of the total trade receivables. The amounts due and repayment from these customers are closely monitored by the management to ensure that the credit limits and terms agreed with the customers are complied with.

Information on the impairment of trade and other receivables are disclosed in Note 11.

Financial guarantees

The Company provides unsecured financial guarantees to a bank in respect of banking facilities granted to a subsidiary. The Company monitors on an on-going basis the results of the related company and repayments made by the subsidiary.

The maximum exposure to credit risk amounts to RM4,318,853 (2018: RM439,916) representing the outstanding banking facilities of the subsidiary as at the end of the reporting period. The fair value of such financial guarantees is not expected to be material as the probability of the subsidiary defaulting on the credit facilities is remote.

As at the end of the reporting period, there was no indication that the subsidiary would default on repayment.

The financial guarantees have not been recognised since the fair value on initial recognition was not material.




29.2 Financial risk and management objectives and policies (cont’d)

(a) Credit risk (cont’d)

Impairment of financial assets

Trade receivables

In determining expected credit losses of trade receivables, individual receivables are tested for impairment separately by using a default risk model.

In using default risk model, the Group considers the loss given default (“LGD”) and the probability of default (“PD”) assigned to each counterparty customer. The PD is calculated using Merton distance-to-default measure. Wherever applicable, additional forward-looking information on macroeconomic factors that affects the ability of the customers to settle the receivables is considered when determining the PD. The Group has identified the unemployment rate, consumer price index and Gross Domestic Product (GDP) of respective countries in which it sells its goods and services to be most relevant factors. LGD is the proportion of financial asset that cannot be recovered by conversion of collateral and other credit enhancements to cash.

Trade receivables are written off when there is no reasonable expectation of recovery.

Other financial assets at amortised cost

Other financial assets at amortised cost of the Group and of the Company include other receivables, refundable deposits, amount due from subsidiaries and deposits, cash and bank balances

Impairment of other receivables is recognised based on the general approach within MFRS 9 using the forward-looking expected credit loss model. The methodology used to determine the amount of impairment is based on whether has been a significant increase in credit risk since initial recognition of the financial assets.

For those in which the credit risk has not increase significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised.

For those in which the credit risk has increase significantly, lifetime expected credit losses along with the gross interest income are recognised.

For those that are determined to be credit impaired, lifetime expected credit losses along with

interest income on a net basis are recognised. The Company determines the probability of default for the amount due from subsidiary

companies using internal information. No loss allowance has been recognised for these amounts as the Company considers the balances as low credit risk and the amount of loss allowance is immaterial.

Deposit, cash and bank balances are neither past due nor impaired as they are placed with reputable financial institutions with high credit ratings and no history of default.






(b) Liquidity risk and cash flow risk Liquidity or cash flow risk is the risk of inability to meet commitments associated with financial

instruments while cash flow risk is the risk of uncertainty of future cash flow amount associated with a monetary financial instrument.

The Group and the Company actively manages its operating cash flows and the availability of

funding so as to ensure that all repayment and funding needs are met. As part of its overall prudent liquidity management, the Group and the Company maintains sufficient levels of cash and cash equivalents to meet its working capital requirements and prudently balances its portfolio of short-term and long-term funding requirements.

Maturity analysis The summary of the maturity profile of the Group and the Company’s financial liabilities as at the

reporting date based on contractual undiscounted repayments obligations is as follows:-

Maturity Profile

More than 1 year and Effective Less than less than More than interest 1 year 5 years 5 years Total rate Group RM RM RM RM % 2019 Trade and other payables 28,192,887 - - 28,192,887 - Amount due to directors 122,859 - - 122,859 - Bank borrowings 4,200,000 - - 4,200,000 4.62 to 5.21 Lease liabilities 1,350,079 1,035,145 - 2,385,224 3.80 to 5.91 2018 Trade and other payables 36,563,573 - - 36,563,573 - Amount due to directors 28,038 - - 28,038 - Bank borrowings 207,089 - - 207,089 6.85 Lease liabilities 352,277 256,955 - 609,232 3.80 to 5.91


AT 31 DECEMBER 2019





(b) Liquidity risk and cash flow risk (cont’d) Maturity analysis (cont’d) The summary of the maturity profile of the Group and the Company’s financial liabilities as at the

reporting date based on contractual undiscounted repayments obligations is as follows (cont’d):-

Maturity Profile

More than 1 year and Effective Less than less than More than interest 1 year 5 years 5 years Total rate Company RM RM RM RM RM 2019 Other payables and accruals 1,212,811 - - 1,212,811 - Amount due to subsidiaries 26,999 - - 26,999 - 2018 Other payables and accruals 136,157 - - 136,157 - Amount due to subsidiaries 15,234 - - 15,234 -

(c) Currency risk The Group’s exposure to currency risk arises mainly from transactions entered into by individual

entities within the Group in currencies other than their functional currencies. The major functional currencies within the Group are Ringgit Malaysia (“RM’) and Vietnamese Dong (“VND”) whereas the major foreign currency transacted is primarily the United States Dollar (“USD”).

The Group observes the movements in exchange rates and acts accordingly to minimise its exposure to currency risk. Such exposure is also partly mitigated by maintaining part of its cash and cash equivalents in foreign currency account to meet future obligations in foreign currency.

Certain foreign exchange exposures in USD other than functional currencies of the operating

entities are managed by entering into forward foreign exchange contracts.






(c) Currency risk (cont’d)

The carrying amounts of the Group’s monetary assets that are denominated in USD as at the end of the reporting period are as follows:-


Financial assets Trade and other receivables 1,600,834 6,941,746 Deposits, cash and bank balances 346,829 1,810,708

1,947,663 8,752,454 Financial liabilities Trade and other payables 176,244 2,546,644 Currency risk sensitivity analysis A 10 per cent strengthening or weakening of USD against RM at the end of the reporting period

of the Group would have increased or decreased profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.


(Functional currency: RM) USD against RM 177,142 620,581

(d) Interest risk The Group is exposed to interest rate risk through the impact of rate changes of placement with

money market deposits, fixed deposits with licensed banks, bank borrowings and finance lease payables. The effective interest rates of the Group’s financial asset and financial liabilities are disclosed in following notes to the financial statements respectively:-

Financial assets/liabilities Note Placement with money market deposits 13 Fixed deposits with a licensed bank 13 Bank borrowings (secured) 19 Lease liabilities 15


AT 31 DECEMBER 2019





(d) Interest risk (cont’d)

The Group’s placement in money market deposits, fixed deposits with licensed banks, bank borrowings and lease liabilities are subject to interest based on fixed rates while the term loans are subject to interest based on floating rates.

Exposure to interest rate risk The interest rate profile of the Group’s interest-bearing financial instruments at the end of the

reporting period is as follows:-


Fixed rate instruments

Financial assets: - Fixed deposits with licensed banks 7,330,098 1,266,098 - Placement in money market deposits 4,372,150 11,797,099

Financial liabilities: - Bank borrowings 4,200,000 207,089 - Lease liabilities 1,835,878 577,074

Interest rate risk sensitivity analysis

As the fixed rate financial assets and financial liabilities are not accounted for at fair value through profit or loss, a change in interest rates at the end of the reporting period would not affect profit or loss.

In respect of the floating rate financial liabilities, a change in interest rate at the end of the reporting period would not have significant impact to the Group’s profit or loss for the year due to insignificant outstanding balances.





29.3 Fair value of financial instruments

a) Fair value of financial instruments that are carried at fair value

The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:-

Level 1 Level 2 Level 3 Total Group RM RM RM RM 2019 Financial assets Investments 7,927 - - 7,927 2018 Financial assets Investments 13,726 - - 13,726

The fair value of investments is determined by reference to the market price at end of reporting period.

b) Fair value of financial instruments that are not carried at fair value The carrying amounts of other financial assets and financial liabilities approximate their fair values

due to the relatively short-term nature of these instruments or insignificant effect of discounting.

31. CAPITAL MANAGEMENT POLICY

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue in operation as going concern while seeking to maximise benefits to shareholders and other stakeholders. Capital is the equity attributable to the owners of the Company as shown in the statement of financial position of the Group. In order to maintain the optimal capital structure, the Group may, from time to time, adjust the dividend pay out to shareholders, return capital to shareholders, issue new shares, redeem debts or sell assets to reduce debts, where necessary.


AT 31 DECEMBER 2019



31. CAPITAL MANAGEMENT POLICY (CONT’D)

In the management of capital risk, the Group monitors the return on capital of the Group as follows:-

Group 2019 2018 RM RMProfit for the financial year attributable to owners of the Company 9,121,562 12,135,711Total shareholders’ equity 59,840,895 50,734,017

Return on capital 15% 24%

There was no change in the Group’s approach to capital management during the financial year.

The Group is not subject to any externally imposed capital requirements.

32. SUBSEQUENT EVENTS

a) Initial Public Offering and Listing of Shares of the Company on the ACE Market of Bursa Malaysia Securities Berhad

The Company issued a prospectus in connection with the initial public offering (“IPO”) and the listing of shares (“The Listing“) of the Company on the ACE Market of Bursa Malaysia Securities Berhad on 2 January 2020. The IPO and The Listing involved the issuance of 87,400,000 new ordinary shares (“IPO Shares”) in the Company at an issue price of RM0.25 per share and the listing of the Company’s entire enlarged issued and paid-up share capital of RM36,656,176 comprising 580,552,000 ordinary shares on the ACE Market of Bursa Malaysia Securities Berhad. The IPO and The Listing was completed on 22 January 2020.

b) Coronavirus (Covid-19) pandemic

The outbreak of Covid-19 pandemic across the world including Malaysia has resulted disruption to businesses and economic impact.

The Group and Company consider that the effects related to this outbreak to be non- adjusting event as it happened after the end of the reporting period as at 31 December 2019. The current condition arising from this outbreak do not have significant impact on the financial results reported for the financial year ended 31 December 2019.

As at the date of the financial statements are authorised for issuance, the Covid-19 situation is still evolving and unpredictable. As a result, the Group and Company are unable estimate the financial impact of Covid-19 at this juncture. The Group and Company are actively monitoring and managing the Group’s and the Company’s operations to minimise any impacts that may arise from Covid-19.




INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF POWERWELL HOLDINGS BERHAD

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of POWERWELL HOLDINGS BERHAD, which comprise the statements of financial position as at 31 December 2019, and the statements of profit or loss and other comprehensive income, statements of changes in equity of the Group and of the Company and statement of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 60 to 134.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 December 2019, and of their financial performance and their cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis of Opinion

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

Independence and Other Ethical Responsibilities

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




Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current 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.

Key audit matters How our audit addressed the key audit matters

Impairment losses for trade receivables

Refer to Note 4b(i), Note 11 and Note 29.2(a)

The Group determines loss allowance on trade receivables based on expected credit loss (“ECL”) model. To measure ECL, the Group used a default risk model and made significant assumptions such as probability of default, expected future cash flows, future economic conditions and credit behaviour.

Our procedures included the following:

We have evaluated the procedures and internal controls over the assessment and monitoring of trade receivables.

We assessed the appropriateness of the ECL model used by the Group against the requirements of MFRS 9. We also assessed the appropriateness of probability of default calculation and the reasonableness of forward- looking adjustments included in the calculation of ECL.

With respect to ECL individually assessed for credit-impaired receivables, we tested a sample of such receivables to assess management’s assumptions on the expected future cash flows and the reasonableness of impairment loss recognised.

Information Other than the Financial Statements and Auditors’ Report Thereon

The directors of the Group and of the Company are responsible for the other information. The other information comprises the information contained in the Annual Report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

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

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

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




Responsibilities of the Directors for the Financial Statements

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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




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

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

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

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

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

Report On Other Legal and Regulatory Requirements

In accordance with the requirements of the Company Act 2016 in Malaysia, we report that the subsidiary company of which we have not acted as auditors of a subsidiary is disclosed in Note 8 to the financial statements.

Other Matters

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

FOLKS DFK & CO. WONG CHOONG MINGFirm No.: AF 0502 No.: 03289/10/2020 JChartered Accountants Chartered Accountant

Kuala Lumpur

Date: 21 May 2020



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LIST OF PROPERTIES



ANALYSIS OF SHAREHOLDINGSAS AT 18TH MAY 2020

Total Number of Shares : 580,552,000 ordinary shares Class of Shares : There is only one class of shares in the Company • Ordinary Shares Voting Rights : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGSas at 18th May 2020

Size of Holdings No. of Holders Total Holdings %

Less than 100 shares 2 100 0.00

100 – 1,000 shares 388 236,500 0.04

1,001 – 10,000 shares 1,691 10,472,000 1.80

10,001 – 100,000 shares 1,721 63,788,800 10.99

100,001 – below 5% of issued shares 236 127,504,303 21.96

5% and above of issued shares 3 378,550,297 65.21

Total 4,041 580,552,000 100.00

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGSas at 18th May 2020

No. Name

Direct Interest Deemed Interest

Shares % Shares %

1. PW Synergy Sdn. Bhd. 296,081,520 51.00 - -

2. Tham Kien Wai 41,704,567 7.18 296,081,520(a) 51.00

3. Wong Yoke Yen 40,764,210 7.02 296,081,520(a) 51.00

DIRECTORS’ SHAREHOLDINGS as at 18th May 2020

No. Name

Direct Interest Deemed Interest

Shares % Shares %

1. Tham Kien Wai 41,704,567 7.18 296,081,520(a) 51.00

2. Wong Yoke Yen 40,764,210 7.02 296,081,520(a) 51.00

3. Lee Chee Ming 17,622,218 3.04 - -

4. Tang Yuen Kin 100,000 0.02 - -

5. Selma Enolil Binti Mustapha Khalil 100,000 0.02 - -

6. Dr. Tou Teck Yong 100,000 0.02 - -

Note(a) Deemed interest by virtue of his/her interest in PW Synergy Sdn. Bhd. pursuant to Sections 8 of the

Companies Act, 2016.



ANALYSIS OF SHAREHOLDINGSAS AT 18TH MAY 2020

THIRTY (30) LARGEST SHAREHOLDERSas at 18th May 2020

No. Names No. of Shares Held %

1. PW Synergy Sdn. Bhd. 296,081,520 51.00

2. Tham Kien Wai 41,704,567 7.18

3. Wong Yoke Yen 40,764,210 7.02

4. Lee Chee Ming 17,622,218 3.04

5. Hoh Moon Heng 16,201,837 2.79

6. Thong Kok Meng 10,251,224 1.77

7. CGS-CIMB Nominees (Tempatan) Sdn. Bhd. – Pledged Securities Account for Tee Mui Kea (BT PAHAT-CL)

3,600,000 0.62

8. Leong You Tong 3,000,000 0.52

9. CGS-CIMB Nominees (Tempatan) Sdn. Bhd. – Pledged Securities Account for Yii Teck Sing (MK0161)

2,800,000 0.48

10. Tang Yee Choy 2,500,024 0.43

11. Public Nominees (Tempatan) Sdn. Bhd. – Pledged Securities Account for Young Chuan Kim (E-KTU)

2,350,000 0.40

12. Tan Kean Hock 2,000,000 0.34

13. Teoh Ken Suan 2,000,000 0.34

14. Tan Kim Sun 1,400,000 0.24

15. Tham Kin Kiong 1,130,000 0.19

16. Chieng Sie Yii 1,000,000 0.17

17. Leong Yek Loong 1,000,000 0.17

18. Maybank Nominees (Tempatan) Sdn. Bhd. for Lee Chong Gee 1,000,000 0.17

19. Ng Meng Kee 1,000,000 0.17

20. Teoh Lee Lee 1,000,000 0.17

21. Zulman Bin Shariff 899,800 0.15

22. Lim Yeng Chong 865,000 0.15

23. Lim Yeang Khang 840,000 0.14

24. Chew Chee Khai 800,000 0.14

25. Chew Lim Cheong @ Hong Thiam Soon 800,000 0.14

26. Low Khek Heng @ Low Choon Huat 800,000 0.14

27. Yee Choon Kiat 800,000 0.14

28. Lee Nan Kyoung 700,000 0.12

29. Ng Keng Huat 700,000 0.12

30. Kenanga Nominees (Tempatan) Sdn. Bhd. – Rakuten Trade Sdn. Bhd. for Ng Fock Yew

680,000 0.12



NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Fifteenth Annual General Meeting of the Company will be conducted fully virtual at the Broadcast Venue at No. 1B, Jalan Anggerik Mokara 31/48, Seksyen 31, Kota Kemuning, 40460 Shah Alam, Selangor on Friday, 26th June 2020 at 2:30 p.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company and its Group for the financial year ended 31st December 2019 and the Reports of the Directors and the Auditors thereon. (Please refer to Note 1)

2. To approve the payment of Directors’ fees and benefits payable up to RM275,000.00 for the period from 1 January 2020 until the conclusion of the next Annual General Meeting of the Company.

(ORDINARY RESOLUTION 1)

3. To re-elect the following Directors retiring in accordance with the Company’s Constitution:-i) Mr. Tham Kien Wai – Rule 131.1 (ORDINARY RESOLUTION 2)ii) Dr. Tou Teck Yong – Rule 131.1 (ORDINARY RESOLUTION 3)

4. To re-appoint Messrs. Folks DFK & Co. as Auditors and to authorise the Board of Directors to fix their remuneration.


AS SPECIAL BUSINESS

5. AUTHORITY TO ALLOT SHARES PURSUANT TO SECTIONS 75 AND 76 OF THE COMPANIES ACT, 2016


“THAT pursuant to Sections 75 and 76 of the Companies Act, 2016, and subject to the approvals from the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to allot shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares allotted pursuant to this resolution does not exceed 20% of the total number of issued shares of the Company (excluding treasury shares, if any) at the time of submission and that such authority shall continue in force until the conclusion of the next annual general meeting of the Company.”

6. To transact any other business which may properly be transacted at an Annual General Meeting for which due notice shall have been given.

By Order of the Board,

LIM SECK WAH (MAICSA 0799845)KONG MEI KEE (MAICSA 7039391)Company Secretaries

Dated this 5th June 2020Kuala Lumpur



Notes: 1. The broadcast venue is strictly for the purpose of complying with Section 327(2) of the Companies Act 2016

which requires the Chairman of the Meeting to be at the main venue. No shareholders/proxies from the public will be physically present at the meeting venue. Shareholders who wish to participate the Fifteenth Annual General Meeting will therefore have to register via the link https://shorturl.at/etxT0. Kindly refer to the annexure of the Administrative Details for further information.

2. The Audited Financial Statements are for discussion only as the Company’s Constitution provides that the audited financial statements are to be laid in the general meeting.

3. For the purpose of determining a member who shall be entitled to attend, speak and vote at the Annual General Meeting. The Company shall be requesting the Record of Depositors as at 17th June 2020. Only a depositor whose name appears on the Record of Depositors as at 17th June 2020 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

4. A member entitled to attend, speak and vote at the meeting is entitled to appoint up to two (2) proxies to attend, speak and vote in his/her stead. All voting will be conducted by way of poll pursuant to Rule 8.31A(1) of the ACE Market Listing Requirements of Bursa Securities.

5. Where a member appoints two (2) proxies to attend at the same meeting, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy.

6. (i) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

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

7. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorised in writing or, if the appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

8. The Form of Proxy or the instrument appointing a proxy and the power of attorney (if any) under which it is signed or authorised certified copy thereof must be deposited at the Registered Office of the Company at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur or email to [email protected] not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof. You also have the option to register directly at https://shorturl.at/etxT0 to submit the proxy appointment electronically not later than Wednesday, 24th June 2020 at 2:30 p.m. For further information on the electronic submission of proxy form, kindly refer to the annexure of the Administrative Details.




9. Explanatory Note on Special Business

The proposed Ordinary Resolution 5 seeks the shareholders’ approval of a general mandate for issuance of shares by the Company under Section 76 of the Act. Bursa Securities had vide its letter dated 16 April 2020, allowed a listed corporation to seek higher general mandate under Rule 6.04 of the ACE Market Listing Requirements of Bursa Securities from the existing 10% to not more than 20% of the total number of issued shares (excluding treasury shares, if any) (“20% General Mandate”) subject to compliance with applicable legal requirements and the Company’s Constitution.

This 20% General Mandate may be utilised by a listed corporation to issue new securities until 31 December 2021 and thereafter, the 10% general mandate will be reinstated. The Board of Directors of the Company (“Board”), having considered the current economic climate and future financial needs of the Company, is of the opinion that the 20% General Mandate is in the best interests of the Company and its shareholders.

This 20% General Mandate, if passed, will provide flexibility for the Company and empower the Board to allot and issue new shares speedily in the Company up to an amount not exceeding in total 20% of the total number of issued shares of the Company to meets its funding requirements for working capital, operational expenditure and for the purpose of the strategic development of the Company. This would eliminate any delay arising from and cost involved in convening a general meeting to obtain approval of the shareholders for such issuance of shares. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.




ADMINISTRATIVE DETAILSFOR THE FULLY VIRTUAL FIFTEENTH ANNUAL GENERAL MEETING (“15TH AGM”)

Date : Friday, 26 June 2020Time : 2:30 p.m.Broadcast Venue : No. 1B, Jalan Anggerik Mokara 31/48, Seksyen 31, Kota Kemuning, 40460 Shah Alam, Selangor.

Digital Ballot Form at a Fully Virtual 15th AGM

1. No shareholders should be physically present at the Broadcast Venue. Shareholders who wish to participate the 15th AGM will therefore have to do so remotely. Pre-registration of attendance is required via the link https://shorturl.at/etxT0 (refer to para 4 for further details). After the registration is validated and accepted, shareholders will be sent an email with a link to grant access to the Digital Ballot Form (“DBF”).

2. With the DBF, you may exercise your right as a shareholder of the Company to participate (including to pose questions to the Board/Management of the Company) and vote during the 15th AGM, at the comfort of your home or from any location.

3. Shareholders may use the Questions’ Pane facility (located at the bottom of the screen) to submit questions in real time during the meeting via the Webinar solution. Shareholders may also submit questions before the meeting to [email protected] in relation to the agenda items for the 15th AGM.

Procedure for DBF

4. Kindly follow the steps below to ensure that you are able to obtain your DBF and details to log in to the Webinar session to participate and remote voting at the 15th AGM online:

(a) Open this link https://shorturl.at/etxT0 and submit all details requested at least forty-eight (48) hours before the date of 15th AGM.

(b) Only shareholders are allowed to register their details online. Shareholders can also appoint proxies or Chairman of the meeting as proxy via online, as in step (a) above. Please ensure that your details are accurate as non-compliance would result in you not being able to receive your DBF.

(c) Alternatively, you may deposit your Proxy Form with the proxy’s email address and mobile phone number at the office of the Poll Administrator, Mega Corporate Services Sdn Bhd situated at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur, Wilayah Persekutuan or submit via email at [email protected].

(d) The Poll Administrator, Mega Corporate Services Sdn. Bhd., will email a copy of your DBF to you once they have verified your details entered in step (a) or (c) above.

(e) There will be explanatory notes in DBF, to guide you to register to Meeting. Voting and to post questions. Please read them for better understanding.

Record of Depositors (“ROD”) for the 15th AGM

5. The date of ROD for the 15th AGM is 17th June 2020. As such, only shareholders whose name appear in the ROD as at 17th June 2020 shall be entitled to attend the 15th AGM and to participate, speak and vote thereat.



Poll Voting

6. The voting of the 15th AGM will be conducted by poll in accordance with Rule 8.31A of Bursa Malaysia Securities Berhad ACE Market Listing Requirements. The Company has appointed Mega Corporate Services Sdn. Bhd. as Poll Administrator to conduct the poll by way of electronic voting and Cygnus IT Solutions PLT as Scrutineers to verify the poll results.

For the purpose of this AGM, e-voting will be carried out via your digital devices (e.g. Computer/Mobile Phone). The guide to e-voting will be contained in the same email that provides the shareholder/proxy/Corporate Representative with the link to the DBF. Please read the instructions carefully and familiarize yourself with the steps needed to exercise your rights at the AGM.

7. Shareholders can proceed to vote on the resolutions and submit your votes during the voting period as stipulated on the DBF. Upon completion of the voting session at the 15th AGM, the Scrutineers will verify the poll results after which the Chairman will announce the results of the resolutions.

Enquiry

If you have any general queries prior to the 15th AGM, please contact the Poll Administrator during office hours (Monday to Friday):

Mega Corporate Services Sdn BhdTel No.: +603 - 2692 4271Email: [email protected]

ADMINISTRATIVE DETAILSFOR THE FULLY VIRTUAL FIFTEENTH ANNUAL GENERAL MEETING (“15TH AGM”)

FORM OF PROXY(Before completing this form, please refer to the notes below)

No. of Shares Held

CDS Account No.

I/We* NRIC/Passport/Registration No.*

of

with email address mobile phone no.

being a member/members* of POWERWELL HOLDINGS BERHAD (“the Company”) hereby appoint(s):-

Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

Email Address

Mobile Phone No.

and/or*

Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

Email Address

Mobile Phone No.

or failing him/her, the Chairman of the Meeting as *my/our proxy/proxies to attend, speak and vote for *me/us and on my/our behalf at the Fifteenth Annual General Meeting of the Company to be conducted fully virtual at the Broadcast Venue at No. 1B, Jalan Anggerik Mokara 31/48, Seksyen 31, Kota Kemuning, 40460 Shah Alam, Selangor on Friday, 26th June 2020 at 2:30 p.m. or any adjournment thereof.

Please indicate with an “x” in the appropriate spaces how you wish your votes to be cast. If no specific direction as to vote is given, the proxy will vote or abstain from voting at his/her discretion.

ORDINARY RESOLUTIONS

FIRST PROXY SECOND PROXY

FOR AGAINST FOR AGAINST

1. To approve the payment of Directors’ fees and benefits

2. To re-elect the director, Mr. Tham Kien Wai

3. To re-elect the director, Dr. Tou Teck Yong

4. To re-appoint the retiring auditors, Messrs. Folks DFK & Co.

5. Authority to Allot Shares

* delete whichever is not applicable.

Dated this 2020 Signature of Member(s)/Common Seal

POWERWELL HOLDINGS BERHAD 200101009151 (544907-X) (Incorporated in Malaysia)

(Full name in block letters)

(Full address)

Notes:1. The broadcast venue is strictly for the purpose of complying

with Section 327(2) of the Companies Act 2016 which requires the Chairman of the Meeting to be at the main venue. No shareholders/proxies from the public will be physically present at the meeting venue. Shareholders who wish to participate the Fifteenth Annual General Meeting will therefore have to register via the link https://shorturl.at/etxT0. Kindly refer to the annexure of the Administrative Details for further information.

2. For the purpose of determining a member who shall be entitled to attend, speak and vote at the Annual General Meeting. The Company shall be requesting the Record of Depositors as at 17th

June 2020. Only a depositor whose name appears on the Record of Depositors as at 17th June 2020 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

3. A member entitled to attend, speak and vote at the meeting is entitled to appoint up to two (2) proxies to attend, speak and vote in his/her stead. All voting will be conducted by way of poll pursuant to Rule 8.31A(1) of the ACE Market Listing Requirements of Bursa Securities.

4. Where a member appoints two (2) proxies to attend at the same meeting, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy.

5. (i) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

AffixStamp

Please fold here

Please fold here

Notes (cont’d):5. (ii) Where a member of the Company is an exempt authorised

nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized 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/her attorney duly authorised in writing or, if the appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.

The Company SecretaryPOWERWELL HOLDINGS BERHAD200101009151 (544907-X)Level 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail50250 Kuala Lumpur

7. The Form of Proxy or the instrument appointing a proxy and the power of attorney (if any) under which it is signed or authorised certified copy thereof must be deposited at the Registered Office of the Company at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur or email to [email protected] not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof. You also have the option to register directly at https://shorturl.at/etxT0 to submit the proxy appointment electronically not later than Wednesday, 24th June 2020 at 2:30 p.m. For further information on the electronic submission of proxy form, kindly refer to the annexure of the Administrative Details.

Powerwell Holdings Berhad · Subsequently in 2018, the Company was converted into a public limited...

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Transcript of Powerwell Holdings Berhad · Subsequently in 2018, the Company was converted into a public limited...