TRANSFORMING HEALTHCARE DELIVERY AND BEYOND · Country Resort Berhad, Jalan Kelab Tropicana,...

Annual Report 2017

TRANSFORMINGHEALTHCARE DELIVERYAND BEYOND

15th Annual General Meeting of the Companywill be held at Greens III, Tropicana Golf &Country Resort Berhad, Jalan Kelab Tropicana,Tropicana Golf & Country Resort, 47410Petaling Jaya, Selangor Darul Ehsan onMonday, 23 January 2018 at 10.30 a.m.

To be the premier provider ofoutstanding value-basedmedical services in South East Asia

To provide exceptional medical services andcompassionate care to our patients andpatrons through continuous effort, dedication,commitment and the application of world classstandards in all of our endeavours

MISSION

VISION

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02 Corporate Information04 Corporate Structure05 Corporate Profile10 Chairman’s Statement13 Management Discussion and Analysis

21 Corporate Social Responsibility25 Board of Directors26 Directors’ Profile33 Profile of Key Senior Management Team36 Corporate Directory37 Statement on Corporate Governance47 Audit and Risk Management Committee Report

49 Statement on Risk Management and Internal Control52 Other Corporate Disclosure53 Financial Statements128 List of Properties129 Analysis of Shareholdings

132 Analysis of Warrant Holdings135 Notice to Shareholders

Proxy Form

CONTENTS

2 TMC LIFE SCIENCES BERHAD (624409-A)

Professor Emeritus Dato’ Dr. Khalid Bin Abdul KadirNon-IndependentNon-Executive Chairman

Roy Quek Hong Sheng Executive Director andGroup Chief Executive Officer

Dato’ Dr. Tan Kee KwongIndependentNon-Executive Director

Gary Ho Kuat FoongIndependentNon-Executive Director

Claire Lee Suk LengIndependentNon-Executive Director

Kan Kheong NgNon-IndependentNon-Executive Director

Freddie Heng Kim Chuan Non-IndependentNon-Executive Director

CORPORATEINFORMATION

AUDIT AND RISK MANAGEMENTCOMMITTEE

Chairman : Gary Ho Kuat Foong Members : Dato’ Dr. Tan Kee Kwong Claire Lee Suk Leng Freddie Heng Kim Chuan

NOMINATING COMMITTEE

Chairman : Gary Ho Kuat FoongMembers : Dato’ Dr. Tan Kee Kwong Claire Lee Suk Leng Kan Kheong Ng Freddie Heng Kim Chuan

REMUNERATION COMMITTEE

Chairperson : Claire Lee Suk LengMembers : Dato’ Dr. Tan Kee Kwong Gary Ho Kuat Foong Kan Kheong Ng Freddie Heng Kim Chuan

COMPANY SECRETARIES

Teo Mee Hui (MAICSA 7050642)Ng Sally (MAICSA 7060343)

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annual report 2017 3

AUDITORS

Ernst & Young (AF0039)Level 23A, Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala Lumpur

Tel : 603-7495 8000Fax : 603-2095 9076

SHARE REGISTRAR

Tricor Investor & Issuing HouseServices Sdn BhdUnit 32-01, Level 32Tower A, Vertical Business SuiteAvenue 3, Bangsar South No. 8, Jalan Kerinchi59200 Kuala Lumpur

Tel : 603-2783 9299Fax : 603-2783 9222

REGISTERED OFFICE

10th Floor, Menara Hap SengNo. 1 & 3, Jalan P. Ramlee50250 Kuala Lumpur

Tel : 603-2382 4288Fax : 603-2382 4170

HEAD OFFICE

C-13-09 Sunway NexisNo.1, Jalan PJU 5/1Dataran SunwayKota Damansara47810 Petaling JayaSelangor Darul Ehsan

Tel : 603-6287 1111Fax : 603-6287 1212

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Stock code : 0101

WEBSITE

www.tmclife.com


AS AT 31 AUGUST 2017

TropicanaMedical Centre

(M) Sdn Bhd

100%IVF

TechnologiesSdn Bhd

100%TMC Biotech

Sdn Bhd

100%BB Waterfront

Sdn Bhd

100%

TMC LifestyleSdn Bhd

100%TMC

PropertiesSdn Bhd

100%

PT TropicanaHealthcareIndonesia

65%TMC Women’s

SpecialistHoldingsSdn Bhd

100%

TMC Women’sSpecialist(Kuantan)Sdn Bhd

100%TMC CareSdn Bhd

100%

CORPORATESTRUCTURE


CORPORATEPROFILE

TMC Life Sciences Berhad

TMC Life Sciences Berhad (“TMCLS”) is one of the fastestgrowing healthcare groups in Malaysia. It has been listedon the Main Market of Bursa Malaysia Securities Berhad

since 2005. TMCLS has embarked on a major expansionprogramme, with significant additional capacity and

capabilities projected to come on stream by 2020. Theplans include expanding its flagship hospital, Tropicana

Medical Centre to a 600-bed hospital with additionalcritical care units, operating theatres and specialistcentres. A new integrated medical hub – Thomson

Iskandar – will be developed in the proposed VantageBay Healthcare City in bustling Johor Bahru. Located justoff the Causeway linking Johor and Singapore, ThomsonIskandar will house a 500-bed tertiary hospital, specialistmedical suites and related health and wellness facilities.

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CORPORATEPROFILE

TROPICANA MEDICAL CENTRE

“ Dedicated to Healing, Committed to Care ”

TMCLS’s flagship hospital, Tropicana Medical Centre, KotaDamansara (“TMCKD”) is located in the golden triangle of PetalingJaya. It is a multi-disciplinary tertiary care centre equipped withadvanced medical technology and modern infrastructure to deliverquality, affordable healthcare solutions and a superior serviceexperience for our local, regional and international patients. TMCKDhandles over 19,000 admissions a year.

The 200-bedded medical centre is served by a panel of over 100Consultant Specialists – highly trained with commendable trackrecord in their represented medical and surgical disciplines. Thecore disciplines of the hospital include Fertility & ReproductiveHealth; Cardiac Care, Neurology & Neurosurgery, Diabetic &Kidney Care; ENT, Head & Neck Laser Surgery; Breast Care,Orthopaedic and Trauma Surgery, Spine & Sports Injury, LungCare; Gastroenterology & Liver Care; General, Cancer & Minimally-invasive Surgery; Hand & Microsurgery; Urology & Man’s health,Aesthetic & Plastic Reconstructive; Ophthalmology & eye care, aswell as the full range of Woman & Paediatric services.

The medical/surgical specialties and sub-specialties available atTMCKD:

• Anaesthesiology • Breast & Endocrine Surgery • Breast & Oncoplastic Surgery • Cancer Surgery • Cardiology • Cardiology – Electrophysiology • Cardiology – Interventional • Colorectal Surgery • Dermatology • ENT, Head & Neck Laser Surgery • Endocrinology • Fertility (Reproductive Medicine) • Gastroenterology• General & Minimally-invasive Surgery • Hand & Microsurgery • Hepatology • Internal Medicine • Nephrology • Neurology • Neurosurgery • Obstetrics & Gynaecology • Ophthalmology • Orthopaedic • Orthopaedic – Arthroplasty • Orthopaedic – Foot & Ankle• Orthopaedic – Spine • Orthopaedic – Sports Injuries • Orthopaedic – Surgery • Paediatric

• Paediatric – Cardiology • Paediatric – Neonatology • Paediatric – Neurology • Paediatric – Opthalmology • Paediatric – Orthopaedic • Paediatric – Surgery • Paediatric – Urology • Plastic & Reconstructive Surgery • Psychiatry • Psychiatry – Child & Adolescent • Radiology & Interventional Radiology • Respiratory Medicine • Upper Gastrointestinal Surgery • Urology • Vascular & Endovascular Surgery


CORPORATEPROFILE

Centres of Excellence:

• Women Centre • Children Centre • ENT Head & Neck Laser • Diabetes & Metabolic Centre • Orthopedic & Trauma Centre

In the beginning of 2017, TMCKD opened its fifth (5th) outpatient clinic cluster and inaugurated TMCKD’s ownlaboratory to provide more variety of services to its patients. The extension also serves to accommodate the growingnumber of both consultants and patients. In the next financial year, TMCKD is looking forward to launch more Centresof Excellence in areas such as Gastroenterology, Neurology, Cardiology and many more.

Recently on 18 August 2017, TMCKD broke the ground for its new expansion of building and with constructionexpected to commence before end of the year. The building is envisaged to be completed by 2020.

Over the years, TMCKD has successfully established relationships with leading insurance companies - in bothdomestic and international arenas - to offer greater convenience and value-added services to our patients. TMCKDis a Platinum Hospital of AIA Berhad and the preferred hospital of PruBSN Takaful Berhad since 2014. With ourcommitment and dedication, TMCKD is also one of the trusted partners for many corporate companies, serving thehealthcare needs of their employees.

TMC Fertility Centre

“ From Hope to Joy ”

TMC Fertility Centre (“TMCFC”) was established in January 1994 at Damansara Utama, Selangor. From its humblebeginnings, TMCFC is now a full-fledged fertility centre with a wide network of centres nationwide. Located withinTropicana Medical Centre, the centre’s network of branches range from Penang, Ipoh, Kepong, Puchong and all theway south to Johor Bahru. TMCFC Ipoh, which was officially launched in February 2017, is the latest addition to thisnetwork of branches. The opening of this centre is to better serve patients in Ipoh and neighbouring areas, makingworld-class fertility treatment more accessible to couples in these areas.

To provide patients with a wider range of options and higher service quality, TMCFC has been increasing its pool ofspecialists. To date, the centre has 12 fertility specialists and this number continues to grow. TMCFC’s team ofembryologists consists of 13 highly qualified scientists and geneticist, with postgraduate qualifications in ClinicalEmbryology and other relevant fields. The team also consists of Malaysia’s only two embryologists with a SeniorEmbryologist Certification by the European Society of Human Reproduction and Embryology (ESHRE), and 3 ESHREcertified Clinical Embryologists. TMCFC also places a strong emphasis on continuing education. All clinical staffundergo constant training to increase their skills and widen their knowledge to stay up-to-date with the latest medicalupdates and technology.


TMCFC offers a complete range of technologically advanced fertility treatments,and has been keeping up with the latest in cutting edge technology. The centrehas been offering patients Pre-Implantation Genetic Screening/Diagnosis(PGS/PGD) services since 2003. Initially using the Comparative GenomicHybridisation (CGH) technology, the centre has moved on to the NextGeneration Sequencing (NGS) technology. The NGS technology tests all 24chromosomes, and contains information that indicates the condition of theembryo and the potential health risks of the child decades down the line. NGSis expected to change the world of genetics in time to come, offering accuratepredictions of a person’s health conditions even before birth, fully embodyingits name as a screening of the ‘next generation’. In 2017, TMCFC also markedanother ‘first’ by making available the PGS/PGD service in the Johor Bahru, Ipohand Penang branches.

In line with its rapid expansion plans, TMCFC has been moving towards aborderless global outreach. In 2017, the centre collaborated with VictoriaHospital, Myanmar. Under this collaboration, TMCFC’s specialist has beenproviding monthly consultation sessions in Victoria Hospital and subsequentlyreferring patients to the centre to commence fertility treatment. This collaborationhas resulted in one successful pregnancy, and an increase in fertility patientsfrom Myanmar.

Since its inception, TMCFC has successfully helped couples to conceive morethan 5,000 IVF babies through various assisted reproductive techniques. Thecentre’s pioneer branch, Johor Bahru, recently celebrated 1,000 IVF babies in2017. To mark this milestone, the centre organised a huge celebration with thebabies, their parents, friends, families and staff.

CORPORATEPROFILE


Providing patients with the highest quality of care by a top notch clinical team and elevatingservice levels while upholding their privacy has always been of importance to the centre. TheFertility Society of Australia (FSA), the peak body for reproductive medicine in Australia andNew Zealand has certified TMCFC for having achieved its international benchmark inreproductive medicine. RTAC, the accreditation arm of FSA, certified the centre in 2015 andrecently renewed the certification for another year to 2018.

All the efforts put forth has resulted in TMCFC being awarded accolades over the years,making it a multi award-winning and internationally renowned Centre of Excellence. In 2016,TMCFC was named the “Best Fertility Centre” by Frost & Sullivan Malaysia; “Fertility ServiceProvider of the Year” by Global Health & Travel (GHT); and “International Fertility Clinic of TheYear” by International Medical Travel Journal (IMTJ). In 2017, the centre was again namedthe “Fertility Service Provider of the Year” by GHT; and “International Fertility Clinic of TheYear” by IMTJ.

TMC Care Pharmacy

TMC Care Pharmacy (“TMCCP”) opened for business in July 2016 and officially launched on10 December 2016 at Vantage Bay, Stulang Laut in the bustling city of Johor Bahru. It wasthe first retail pharmacy under the wing of TMCLS and is envisioned to serve the ThomsonIskandar Medical Hub such as the 500-bed Hospital Iskandariah, medical suites, health andwellness facilities and the proposed medical and allied-health school.

CORPORATEPROFILE


CHAIRMAN’SSTATEMENT

Dear Shareholders,

On behalf of the Board ofDirectors, I am pleased topresent the Annual Report ofTMC Life Sciences Berhadfor the financial year ended31 August 2017.


Performance Review

2017 is another sterling year for TMC LifeSciences. Our Group’s revenue rose by 15% toRM151.7 million for the financial year ended 31August 2017, compared to the preceding 12months financial year. This was achieved throughrecruitment of additional consultants, higherpatient load and higher intensity of caseshandled. With the higher revenue achieved, theGroup has recorded an impressive profit beforetax of RM27.1 million for the financial year ended 31 August 2017, an increase of 26% compared toprevious corresponding 12 months period. Higher growth in profit before tax compared to revenuewas mainly due to lower fair value charges for the Employee Share Option Scheme (ESOS) andresource optimisation.

Net profit for the financial year was RM26.0 million, recording a significant increase of 46% comparedto the previous corresponding 12 months period.

The Group continues to be prudent in spending and managing the operating cash flows. The cashand bank balances built up has reached RM207.0 million as compared to RM204.6 million at end ofthe last financial period, after having spent in total RM16.5 million on capital expenditure, includingRM0.8 million on expansion projects.

Dividends

In recognition of the Group’s continued strong performance, we intend to reward our shareholders bypaying out dividends so that we can share the Group’s profits with our shareholders. The Board hasproposed a single-tier final dividend of 0.167 sen for the financial year ended 31 August 2017, subjectto the approval of the shareholders at the forthcoming Annual General Meeting. In deciding on thequantum, the Board was mindful of the need to balance rewarding our shareholders with maintaininga suitable cash reserve position to support our two major expansion projects in Kota Damansara andJohor Bahru.

Compliance with Corporate Governance

At TMCLS, we are committed to upholding the highest standards of corporate governance practicethroughout the Group. This is fundamental to the discharging of our responsibilities to safeguardshareholders' investment and ultimately enhance shareholders' value and the financial performanceof the Group.

The Standards of practice and policy that we adhere to in accordance with the Malaysian Code onCorporate Governance 2012 was highlighted in the Statement on Corporate Governance stated onpages 37 to 46 of this Annual Report.


EBITDA

RM30.9

EBITDA Margin

20%

PAT

RM26.0

Moving forward

Global economic trends suggest that 2018 will be a challenging year forthe Malaysian economy. Despite market expectation that Ringgit againstother foreign currency may rise in 2018, volatility in Ringgit may posecertain risk to our cost of running business, especially when our medicaland healthcare equipment, medicines and disposables are mostlyimported and priced in US dollars.

We will continue to be prudent in our spending as we seek to continue togrow our range of services whilst maintaining the highest level of medicalcare and patient safety, focusing on our growing clientele of patients fromthe Klang Valley as efforts are made to increase our share of internationalpatients, and developing a larger footprint in the Malaysian healthcaresector. In this regard, our expansion plans in Kota Damansara and JohorBahru remain key priorities. We shall be commencing the construction ofexpansion project to the present Hospital in Kota Damansara which willeffectively more than double our present capacity while we eagerly awaitthe final regulatory approvals on our Johor Bahru Hospital project. At thesame time, we are building up our capacity for infertility treatment byexpanding and upgrading our satellite Fertility Centre in Johor, Puchong,Ipoh, Kepong and Penang.

At TMCLS, we believe fully in our vision to build an integrated privatehealthcare service platform whilst maintaining our position as the numberone center for infertility. Notwithstanding potential economic headwinds,we seek to continue to grow our business through good planning, prudentmanagement of resources and upholding the highest standards of healthand medical care.

A Word of Appreciation

First, I would like to acknowledge and thank our patients and their familiesfor the confidence they have put in our hospital and Fertility Centre.Secondly, I wish to thank the management, specialists and staff for theirdedication, hard work and loyalty to the Group, without which, our currentachievements and growth would not have been achievable. Thirdly, Iwould also like to extend my sincere gratitude to our suppliers, businessassociates and Health Insurance providers for their continuing supportand business partnership over the years.

I would also like to express my gratitude to my fellow board members fortheir invaluable contribution and commitment. Last but not least, mysincere appreciation to all shareholders for the lasting support to theGroup.

PROFESSOR EMERITUS DATO’ DR. KHALID BIN ABDUL KADIRCHAIRMAN

CHAIRMAN’SSTATEMENT

(million)

(million)

MANAGEMENT DISCUSSIONAND ANALYSIS


Overview of TMC Life Sciences BerhadTMC Life Sciences Berhad operate under three business segment, namely Hospital Division, TMC Fertility Centreand TMC Care Pharmacy, as described in Corporate Profile on pages 5 to 9 of this Annual Report.

Financial Review

Our Group recorded revenue and profit before tax of RM151.7 million, and RM27.1 million respectively for the financialyear ended 31 August 2017, an increase of 15% and 26% compared to the preceding 12 months. The increase inrevenue was mainly due to higher patient load and higher intensity of cases handled. Higher growth in profit beforetax compared to revenue was mainly due to lower fair value charges for the Employee Share Option Scheme (ESOS)and resource optimisation.

Net profit for the financial year was RM26.0 million, recording a significant increase of 46% compared to the preceding12 months. Higher growth in net profit as compared to profit before tax was mainly due to the recognition of deferredtax assets and utilisation of tax incentives for the financial year.

Statement of Financial Position

Higher inventory by 20% compared to last financial period mainly due to higher inventory maintained to meet expectedhigher demand at year end.

Share option reserves increased by 47% compared to the end of last financial period due to the scheduled fair valuecharges on share options granted under ESOS.

Higher trade payable was mainly because of the higher amounts owing to consultants driven by better performanceat year end.

Statement of Cash Flows

Operating activities

Net cash generated from operating activities was RM9.9 million during the financial year ended 31 August 2017compared to RM30 million for the 12 months ended 31 August 2016. Lower cash generated from operating activitieswas mainly due to tax payment of RM2.6 million during the financial year.

Investing activities

The Group used RM0.6 million in investing activities during the financial year ended 31 August 2017 compared toRM119 million for the 12 months ended 31 August 2016. Lower amount used compared to 12 months ended 31August 2016 mainly due to higher deposits placed with financial institutions with original maturity of more than 3months.

Financing activities

Our net cash used in financing activities during the financial year ended 31 August 2017 was RM0.28 millioncompared to RM3.8 million for the 12 months ended 31 August 2016. Lower amount used was mainly due to proceedsreceived from ESOS exercised of RM2.4 million during the financial year.

The consequent net increase in cash and cash equivalents was RM9 million, with total cash and cash equivalent at31 August 2017 of RM58.8 million.


HOSPITAL DIVISION

2017 KEY MILESTONE

Commencement of Tropicana Medical Centre Expansion

On 18 of August 2017, Tropicana Medical Centre Kota Damansara (“TMCKD”)held the groundbreaking ceremony for its new 400-bed expansion that will housemore than 100 specialist outpatient clinics and 1,100 carpark bays. The totalbuilt-up area, including carpark, is 76,731 metre2 and covers an area of 2.37acres - conveniently located right next to the Kota Damansara MRT station. Withthis expansion, TMCKD will have additional Centres of Excellence and specialistmedical services such as an Oncology Centre, Breast & Endocrine Centre,Urology & Men’s Health Centre, Hand & Microsurgery Centre, RespiratoryMedicine Centre, a one-stop Health & Wellness Centre as well as a total of 10operating theatres and 11 delivery suites. The project is expected to beoperational by the first half of 2021.

Developing Comprehensive Tertiary Healthcare Services

To support our vision of providing outstanding value-based healthcare in theregion and to further develop the range and quality of our services, TMCKDrecruited 14 new consultants during the financial year in review. These newconsultants cover 11 new areas of specialty ranging from Neurosurgery andNeuro-radiology to Paediatric Ophthalmology, Hepatobiliary surgery, infectiousdiseases and breast and onco-plastic surgery. With this, the number ofconsultants in practice in TMCKD rose to 104, covering more than 35 areas ofmedical specialty and sub-specialty.

In addition, the hospital invested in upgrading its facilities and services in orderto provide the latest technology and treatment options to our patients. A full suiteof neurosurgical instruments were acquired, enabling us to perform a variety ofneurosurgical procedures. In conjunction with this, the hospital also invested ininstalling the latest Phillips Allura Xper FD20 system, allowing our consultants toperform a full spectrum of cardiac and vascular interventional procedures


Newly installed Phillips Allura Xper FD20 system for cardiac andvascular interventional procedures



including neuro-embolisations and cerebral angiograms. In addition, we were one of the first hospitalsin Malaysia to upgrade to the latest Siemens Magnetom Avanto MRI system, enabling us to deliver betterquality images at a faster speed. In the effort to develop our Cardiac and Vascular Centre, we acquiredthe latest Boston Scientific Bard Labsystem Pro EP Recording System, becoming one of the few privatehospitals in Malaysia to provide cardiac electrophysiology services to our patients. We also started ourAudiometry and Tympanometry services, complementing the advanced procedures offered at our ENT,Head and Neck Laser Centre, where we have built a track record as the only private hospital in theregion to offer ENT Laser surgery with more than 300 laser ENT procedures conducted in this year alone.

Throughout the year, TMCKD set new milestones in improving safety, efficacy and service standards.In February 2017, we established the hospital’s in-house laboratory services offering blood banking,haematology, immunology, chemistry and microbiology services to our patients. We also implementedthe filmless Picture Archiving and Communication System, providing patients with digital copies of theirradiological images.

Innovating to offer better customer service for our patients, TMCKD launched its Whatsapp appointmentsystem and the One-Stop Appointment Call Centre to facilitate appointments at our Outpatient Clinics.We also launched our Vaxin Centre, in conjunction with our Health & Wellness Centre, to promote adultvaccinations and centralise patient vaccination data.

New laboratory was commissioned in February 2017

Vaxin Center located at our Health & Wellness Centre


CHALLENGES

The healthcare industry in Malaysia is growing rapidly, with the establishment or expansionboth many private and public hospitals, diagnostic centres, ambulatory care centres andprimary care clinics. This is in response to higher domestic and foreign demand for highquality healthcare and medical services.

With the growth in the number and size of healthcare facilities, the demand for health andmedical talent has risen significantly. Human capital recruitment and retention continuesto be a key challenge for the healthcare industry. With the increase in medical institutionsin public and private sector, consultants and other medical professionals have a varietyof career options to choose from. Coupled with the very real threat of talent drain fromcompeting medical centres in countries in the Middle East, Singapore and Australia, thereis an urgent need to review the quality and number of local healthcare and medicalprofessionals available to support the domestic institutions.

The volatility of the local currency in the past year has also contributed to higher costs ofimported drugs and equipment, as well as make the stronger currencies in countries likeSingapore and Australia a very attractive factor in inducing Malaysian healthcare andmedical talent to ply their skills in these countries.

STRATEGIES

To address the challenges in the healthcare sector, TMCKD is focused on improvingquality of care and expanding its customer base through local and international marketinginitiatives. We were the first hospital to undergo the 5th cycle of accreditation by theMalaysian Society for Quality in Health (“MSQH”) and participated in the MalaysianHealthcare Travel Council (“MHTC”) Programme for Health Travel Excellence inOrthopedics. As an MHTC Elite Partner, we are recognised as key provider of healthcareservices to international patients, providing care to patients from more than 140 countries.With the development of new services, we are able to provide more comprehensive careto our local communities, attracting patients from surrounding neighbourhoods andoutside of Klang Valley.


PROSPECTS

With the expansion of TMCKD, the hospital is on track to be one of the leading privatehospitals in region, with an expected workforce of 200 specialist consultants and morethan 1,500 staff. The expansion of the hospital is timely, with other developments in theKota Damansara area contributing to an increase in population including the completionof Sungai Buloh-Kajang MRT line, the construction of the Damansara-Shah Alam ElevatedExpressway (DASH) as well as the development of the 64.3 acre Kwasa Damansaratownship.

The group is also working closely with authorities to obtain approval for its planneddevelopment of Thomson Iskandar Medical Hub in Vantage Bay, Johor.


In order to overcome the talent shortage, TMCKD is partnering with TalentCorp Malaysiato attract Malaysian medical professionals to return to Malaysia. In addition, we offerincentives, sponsorships and training programmes to attract nurses and specialisedhealthcare personnel to grow their career with us. In the future, we are exploringcollaborations with renowned educational institutions and research organisations toupgrade the skills of our personnel and further improve the quality of care at our hospital.We are also putting in place group-wide initiatives to optimise resources and manage costs.


Artist impression : Illustration of Thomson Iskandar Medical Hub.

Roadshow with Director General of Health together withTalentCorp Malaysia in Sydney, Australia


TMC FERTILITY CENTRE

2017 KEY MILESTONES

Opening of Ipoh branch

TMC Fertility Centre (TMCFC), Ipoh which was officially launched in February 2017, isthe latest addition to a wide network of TMCFC branches nationwide. The opening ofthis centre is to better serve patients in Ipoh and neighbouring areas, making world-class fertility treatment more accessible to couples in these areas.

International collaboration

In line with its rapid expansion plans, TMCFC has been moving towards a borderlessglobal outreach. In 2017, TMCFC collaborates with Victoria Hospital, Myanmar. Underthis collaboration, TMCFC’s specialist has been providing monthly consultationsessions in Victoria Hospital and subsequently referring patients to the centre tocommence fertility treatment. This collaboration has resulted in successful pregnancies,and an increase in fertility patients from Myanmar.

International Certification

Providing patients with the highest quality of care by a high quality clinical team andelevating service levels while upholding their privacy has always been of importanceto the centre. The Fertility Society of Australia (FSA); the foremost body for reproductivemedicine in Australia and New Zealand has certified TMCFC for having achieved itsinternational benchmark in reproductive medicine. Reproductive TechnologyAccreditation Committee (RTAC), the accreditation arm of FSA, certified the centre in2015 and recently renewed the certification to 2018.

Awards and Accolades

All the efforts put forth has resulted in TMCFC being awarded numerous accoladesover the years, making it a multi award-winning and internationally renowned Centre ofExcellence. In 2017, the centre was again named the “Fertility Service Provider of theYear” by Global Health and Travel; “International Fertility Clinic of the Year” byInternational Medical Travel Journal, Frost & Sullivan award for 2017 Frost & SullivanMalaysia Fertility Centre of the Year.

1,000 IVF Babies Celebration

Since its inception, TMCFC has successfully helped couples to conceive more than5,000 IVF babies through various assisted reproductive techniques. The centre’spioneer branch, Johor Bahru, recently celebrated 1,000 IVF babies in 2017. To markthis milestone, the centre organised a special celebration with the babies, their parents,friends, families and staff.



CHALLENGES

Demand for fertility services is dependent on the general economic environment and demographic trends.At the same time, there is strong competition for the niche talent in the field of fertility medicine. The keychallenges are thus to maintain the highest quality of work and outcomes in TMCFC and to continually trainand retain the best-in-class in fertility medicine professionals.

STRATEGIES

Having the largest network of fertility centres across Malaysia serves as a key differentiator and a platformfor medical tourism growth by attracting international patients. To provide patients with a wider range ofoptions and higher service quality, TMCFC has been increasing its pool of specialists and scientists. Thecentre continues to work closely with local and international hospitals and healthcare associations toincrease its brand awareness and expand the patient base. Various public and professional educationalinitiatives have been undertaken to educate and increase awareness on fertility.

PROSPECT

As one of the pioneers and leaders in Malaysia’s fertility industry, TMCFC continuously strives to be at thecutting edge of fertility medicine and enhance patient experience and outcomes through value-addedservices and top-notch facilities. Well-recognised as an innovation driver, TMCFC aims to reach out tounexplored markets in the Asian region and beyond where there is rising demand for quality fertility services.The centre also aims to sustain healthy growth, tap markets in unexplored regions and strengthen existingmarket share.


1,000 IVF babies celebration at TMCFC Johor Bahru


TMC CARE PHARMACY

KEY MILESTONE

TMC Care Pharmacy (“TMC Care”), located in Vantage Bay Healthcare City beganoperations on 19 July 2016. The grand launch ceremony was held on 10 December2016. TMC Care offers a comprehensive range of healthcare products, medical supportproducts to personal care products.

CHALLENGES

The retail pharmacy industry faces various challenges such as price competition andshortage of quality manpower. TMC Care’s value proposition is its link to the largerhealthcare and medical group. This ensures the highest quality control over ourproducts and enables our customers to be referred seamlessly to our associatedhealthcare and medical institutions such as TMCKD and TMCFC.

STRATEGIES

TMC Care has strategic plans in place to boost our value proposition to meet customers’expectations.

To cater to the demands of specialised services, the in-house pharmacist is trained invarious fields such as smoking cessation, family planning, home blood pressure andblood glucose monitoring, medication review and weight management.

As a relatively new player in the community, we strive to make our presence known byenhancing marketing activities to boost our foothold. Promotions and events were heldto surrounding community and even to neighbouring Singapore to raise brandawareness.

Expansion to the digital space has also been actively pursued. Currently TMC Carehas active listings on Lelong.my, Lazada Malaysia and 11Street Malaysia.

PROSPECT

With the 500-bed Hospital Iskandariah in Thomson Iskandar and other developmentsin the proposed Vantage Bay Healthcare City, TMC Care will be able to leverage onthe bigger integrated healthcare platform to grow in tandem with the other associatedfacilities. TMC Care’s proximity to neighbouring Singapore continues to createsignificant opportunities to fulfill Singaporeans’ demand for high quality and cost-effective products.



TMC Life Sciences Berhad is exceedingly dedicated towards the well-being of our society.We place great importance in healthcare awareness and prevention as well as socialenvironmental sustainability in all our corporate social responsibly approach.

For the financial year ended 31 August 2017, the Group has engaged several initiatives as listed below:

CORPORATE SOCIALRESPONSIBILITY

1) Charitable Projects for Communities

As a community based healthcare provider, TMCKD has partaken inseveral charitable projects in support of various good causes.

Pink Power Charity Bowling Extravaganza

Aimed to create awareness and educate the public regarding theimportance of early breast screening, TMCKD alongside Breast CancerWelfare Association (“BCWA”) successfully conducted a charity bowlingtournament. The event has successfully raised RM48,250.00 and gatheredgreat support from distinguished Malaysian artists such as Farawahida,Hasnol, Harun Hashim, Rizal Ahmad, Salima Mahmud and Mirza Ahmad.The fund raised was donated to BCWA in support of the organisation’s aimto provide emotional, social and material support to improve the welfare ofindividuals diagnosed with breast cancer.

Pink Power Charity Bowling Extravaganza 2016 at Sunway Megalanes


2) Outreach Health Programme

Health Clinic to Orang Asli Settlement at Royal Belom, Perak

Just like last year, TMCKD embarked on a 3-day outreach mission to OrangAsli settlement in Kampung Sungai Kejar, Royal Belom, Perak. The missionwas championed by none other than the Chairman of TMCLS himself,Professor Emeritus Dato' Dr. Khalid Bin Abdul Kadir along with El Putra(Alumni of Royal Military College). The villagers were given basic healthcheck-ups including Blood Glucose, Blood Pressure and BMI test as wellas prescriptions by Professor Dato' Dr. Khalid as needed. The team alsodistributed essential medical supplies among the villagers. On top of that,TMCKD contributed 150 bags of fortified rice, kain batik for the ladies andstationery for the kids in conjunction with Hari Raya celebration.


Health check-ups and distribution of rice and medical supplies to the Royal Belom villagers


3) Health Programmes/ Events for Local Communities, Associations and Societies

In our continuous effort to give back to our local communities, associations and societies throughout the financialyear 2017, TMCKD organised various health programmes and events offering basic health screenings, health talksas well as ambulance services.

Focus Group Discussion, TMC Ambulance onstandby and basic health screenings for thecommunity

Focus Group Discussion

Every month, focus group discussion are held on common medical matters suchas Headaches, Cataracts, Breast Lumps, Alzheimer’s disease and many more.Public and patients who experience similar symptoms to these topics wereinvited for the talks, followed by a closed-door discussion with our ConsultantSpecialists. These sessions provide beneficial facts on how to manage theirillnesses and recommended treatments.




Health & Motivational Talks in Schools

A series of interactive health and motivational talks were also conducted by ourConsultant Specialist for students of all ages. Interactive subjects such as “Howto be Good Bosses”, “Stress Management during Examination”, “Sex Education”and “Hand Hygiene” were emphasised during the talks to equip the childrenwith crucial knowledge as they grow up.

Students were full of enthusiasm and energy to learn more


BOARD OFDIRECTORS

From left to right (Front)

Freddie Heng Kim Chuan, Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir, Roy Quek Hong Sheng

From left to right (Behind)

Gary Ho Kuat Foong, Dato’ Dr. Tan Kee Kwong, Kan Kheong Ng, Claire Lee Suk Leng


Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir wasappointed to the Board on 7 October 2004. He graduatedwith first-class honours in B.Med. Sc. (1973) and a first classhonours in MBBS from Monash University, Australia in 1975and PhD in 1982. He was awarded the FRACP (Australia)and FRCP’s from Edinburgh, Glasgow, Ireland and Londonand the Honorary Fellowship of the American College ofPhysician in June 2008 and is a Fellow of the Academy ofScience Malaysia.

Professor Emeritus Dato’ Dr. Khalid started his career as alecturer at Universiti Kebangsaan Malaysia (“UKM”) in 1982,promoted to Associate Professor in 1984, Head ofDepartment of Medicine in 1985, Dean of the MedicalFaculty and Professor in 1990. In 1997-2000, he wasDirector of the new Hospital Universiti KebangsaanMalaysia (“HUKM”) with the task of building up HUKM.Upon his retirement in 2004, he was awarded the title ofProfessor Emeritus.

He then joined Monash University as Professor of Medicineand started the Tan Sri Jeffery Cheah Clinical School inJohor.

He was one of the pioneers of the Company and TropicanaMedical Centre and is currently the consultantEndocrinologist.

He was in the Malaysia Medical Council from 1986 to 2001,President of the Persatuan Diabetes Malaysia from 1985 to1990, President of the Malaysia Endocrine Society from1995 to 2001, Member of Council, International DiabetesFederation from 2001 to 2002, and Master of The Academyof Medicine of Malaysia from 2006 to 2008.

He is active in research and has published more than 310papers in international and national peer reviewed journals.Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir wasconferred The National Science Award in 1997, The AsiaPacific Nutrition Award in 1996 and The Merdeka Award in2008, and delivered The Tunku Abdul Rahman Oration,Academy Medicine Malaysia 2010, and the Gold Medal foroutstanding services to Malaysian Medical Association inMay 2016.

Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir has nofamily relationship with any Director and/or majorshareholder of the Company. He has no convictions of anyoffences within the past five (5) years and has no publicsanctions and/or penalties imposed by the relevantregulatory bodies during the financial year. He has noconflict of interest with the Company. He does not hold anydirectorship in other public companies and listed issuers inMalaysia.

Details of Directors’ interest in shares of the Company andits subsidiaries as at 22 November 2017 are disclosed inthe page 131 and 134 of this Annual Report.

PROFESSOR EMERITUS DATO’ DR.KHALID BIN ABDUL KADIRAged 69, Male, MalaysianNon-Independent Non-Executive Chairman

DIRECTORS’PROFILE


DIRECTORS’PROFILE

Mr. Roy Quek was appointed to the Board on 2 June 2015and assumed the role of Group Chief Executive Officer on2 September 2015. Mr. Roy Quek is an economist bytraining and received his undergraduate degree from theLondon School of Economics & Political Science, and hispost graduate degree from Peking University. Hecompleted both degrees on scholarships awarded by theSingapore Government. His immediate past appointmentwas Deputy Secretary in the Ministry of Home Affairs,Singapore.

Mr. Roy Quek joined the Singapore Civil Service in 1994and was a member of the elite Administrative Services. Priorto joining the private sector, he had served in the Ministryof Defence, Ministry of Education, Ministry of CommunityDevelopment, Youth and Sports, Ministry of Health, Ministryof Home Affairs and the Prime Minister’s Office.

Among his key achievements during his distinguishedcareer in the public sector, he set up and was the FoundingDirector of the National Population Secretariat in the PrimeMinister’s Office, Singapore. While in the Ministry ofEducation, he spearheaded efforts to develop a more

holistic education system and in the Ministry of Health,Singapore, he played a key role in rolling out the SingaporeHealthcare 2020 Masterplan.

For his work in the Singapore public sector, he wasawarded the Public Administration Medal (Silver) in 2008.An avid sportsman, he represented Singapore in squashand was also a member of his school teams in athletics andfootball.

Mr. Roy Quek has no family relationship with any Directorand/or major shareholder of the Company. He has noconvictions of any offences within the past five (5) years andhas no public sanctions and/or penalties imposed by therelevant regulatory bodies during the financial year. He hasno conflict of interest with the Company. He does not holdany directorship in other public companies and listedissuers in Malaysia.


ROY QUEK HONG SHENGAged 47, Male, SingaporeanExecutive Director Group Chief Executive Officer


Mr. Freddie Heng Kim Chuan ("Freddie") was appointed tothe Board on 2 November 2016. He is currently anindependent director of Noel Gifts International Ltd (listedin Singapore) and a non-executive director of SMLCorporation Limited (listed in Australia) and ThomsonMedical Pte Ltd.

TMC Life Sciences Berhad and Thomson Medical Pte Ltdare related companies by virtue of Sasteria Pte Ltd beingthe major shareholder of both companies.

Freddie graduated from the London School of Economicsand Political Science with a BSc (Economics) degree. Hejoined Arthur Andersen & Co (London) in 1977 and latertransferred to the Singapore office in 1981, where heremained until 1984. Freddie had previously served as amember of the board of directors in a number of Singaporepublic-listed companies including several years as anExecutive Director in Van Der Horst Limited. Freddie is alsoan independent financial and management consultant,covering mainly areas of general business and financialconsulting, and mergers and acquisitions.

Freddie has no family relationship with any Director and/ormajor shareholder of the Company. He has no convictionsof any offences within the past five (5) years and has nopublic sanctions and/or penalties imposed by the relevantregulatory bodies during the financial year. He has noconflict of interest with the Company. He does not hold anydirectorship in other public companies and listed issuers inMalaysia.


FREDDIE HENG KIM CHUAN Aged 64, Male, SingaporeanNon-Independent Non-Executive DirectorMember of Nominating CommitteeMember of Audit and Risk Management CommitteeMember of Remuneration Committee

DIRECTORS’PROFILE


Dato’ Dr. Tan was appointed to the Board on 3 June 2005.Dato’ Dr. Tan graduated with an MBBS from the Faculty ofMedicine, University of Malaya in 1973 and joined theGovernment service as a medical officer until 1977.Thereafter, he served as a medical officer with the BritishNational Health Service until 1980. Dato’ Dr. Tan was avolunteer rural health officer in Southern Sudan, Africa from1981-1983. In 1985, he commenced private medicalgeneral practice until 1999, when he was made a DeputyMinister in the Ministry of Land and CooperativeDevelopment, a post he held until 2004. He had previouslyserved as a Member of Parliament for Segambut, KualaLumpur from 1995 until 2008. Presently, Dato’ Dr. Tan is amember of Parliament for Wangsa Maju, Kuala Lumpur.

Dato’ Dr. Tan is currently the Chairman of the Board ofGovernors of Sekolah Menengah Laki-Laki Methodist,Sentul; Chairman of Pusat Bantuan Sentul, Member of theManagement Committee of Wesley Methodist School andChairman of the Board of Management of Methodist CollegeKuala Lumpur. He is also a Director of Malayan UnitedIndustries Berhad.

Dato’ Dr. Tan has no family relationship with any Directorand/or major shareholder of the Company. He has noconvictions of any offences within the past five (5) yearsand has no public sanctions and/or penalties imposed bythe relevant regulatory bodies during the financial year. Hehas no conflict of interest with the Company.


DATO’ DR. TAN KEE KWONGAged 70, Male, MalaysianIndependent Non-Executive DirectorMember of Nominating CommitteeMember of Remuneration CommitteeMember of Audit and Risk Management Committee

DIRECTORS’PROFILE


Mr. Gary Ho Kuat Foong was appointed to the Board on 12January 2011.

Mr. Ho has over 36 years’ experience in corporatemanagement and finance. He currently sits on the Board ofseveral private and public listed companies in Australia andSingapore respectively.

Mr. Ho holds Bachelor degrees in Commerce and Sciencefrom the University of Western Australia. He is a member ofCPA Australia and the Institute of Singapore CharteredAccountants.

Mr. Ho has no family relationship with any Director and/ormajor shareholder of the Company. He has no convictionsof any offences within the past five (5) years and has nopublic sanctions and/or penalties imposed by the relevantregulatory bodies during the financial year. He has noconflict of interest with the Company. He does not hold anydirectorship in other public companies and listed issuers inMalaysia.


GARY HO KUAT FOONGAged 62, Male, AustralianIndependent Non-Executive DirectorChairman of Audit and Risk Management CommitteeChairman of Nominating CommitteeMember of Remuneration Committee

DIRECTORS’PROFILE


Ms. Claire Lee Suk Leng was appointed to the Board on18 October 2012.

Ms. Claire Lee holds Bachelor of Business Administration(Distinction) in Finance from the University of Hawaii atManoa. Ms. Claire Lee has over 10 years of experience inthe areas of corporate finance and advisory, and privatewealth management. She started her career with themerchant banking arm of the Union Bank of Switzerland,UBS (East Asia) Ltd and later joined HSBC Investment Bankplc and Salomon Smith Barney (Singapore) Pte Ltd.

Ms. Claire Lee has no family relationship with any Directorand/or major shareholder of the Company. She has noconviction of any offences within the past five (5) years andhas no public sanctions and/or penalties imposed by therelevant regulatory bodies during the financial year. She hasno conflict of interest with the Company. She does not holdany directorship in other public companies and listedissuers in Malaysia.


CLAIRE LEE SUK LENGAged 45, Female, MalaysianIndependent Non-Executive Director Chairperson of Remuneration CommitteeMember of Nominating CommitteeMember of Audit and Risk Management Committee

DIRECTORS’PROFILE


Mr. Barry Kan was appointed to the Board on 2 June 2015.He is a veteran of almost 30 years in the automotive industrywith rich and vast experience in managing various illustriousglobal brands during his career with renowned regionaldealership, Wearnes Automotive, headquartered inSingapore. Prior to that, he was with the Port Authority ofSingapore for 7 years.

As General Manager at Malayan Motors (a division then ofWearnes Automotive Pte Ltd), his portfolio included theRolls-Royce, Bentley, Jaguar and Volvo Trucks franchisesin Singapore. He was also responsible for the introductionof some of the brands into new territories such as Brunei,Indonesia, Taiwan and Thailand. In addition to the strategicmanagement of the business, he took personal interest inCustomer Relationship Management and Aftersalesoperations, which resulted in a high level of clienteleretention for the luxury automotive brands.

Promoted to Managing Director of the Prestige Division ofWearnes Automotive, he was instrumental in the acquisitionof new brands which included Bugatti, Land Rover andMcLaren. He was also the key representative of thecompany for the high-society clientele which included theCaptains of Industry as well as esteemed members of Royalfamilies within the region.

To nurture the passion for driving and motorsports for theentire Corporate Group, he led a team to spearhead theinaugural motorsports division. Activities included track andinstructional driving days as well as distance drivingweekends in Malaysia where participants had the chanceto learn more about their cars and improve their drivingskills whilst the company had the chance to showcase theirproduct range and services.

When the exciting opportunity arose to develop theintegrated automotive hub in Nusajaya, Iskandar Malaysia,he joined Fastrack Autosports (Iskandar) Pte Ltd toconceptualise and execute the project, in partnership withUEW Sunrise Berhad. Mr. Kan leads the joint venturecompany, Fastrack Iskandar Sdn Bhd as its Chief ExecutiveOfficer.

Mr. Kan has no family relationship with any Director and/ormajor shareholder of the Company. He has no convictionsof any offences within the past five (5) years and has nopublic sanctions and/or penalties imposed by the relevantregulatory bodies during the financial year. He has noconflict of interest with the Company. He does not hold anydirectorship in other public companies and listed issuers inMalaysia.


KAN KHEONG NGAged 62, Male, MalaysianNon-Independent Non-Executive DirectorMember of Nominating CommitteeMember of Remuneration Committee

DIRECTORS’PROFILE


PROFILE OF KEY SENIORMANAGEMENT TEAM

Mr. Wong Yu Chee has over 20 years’ experience infinance, audit, accounting and tax compliance services inMalaysia and Shanghai. Mr. Wong started his career in1996 joining a local audit firm as auditor. He then joinedCoopers & Lybrand in 1997, now known asPricewaterhouseCoopers (PwC). Mr. Wong spent almost 8years in PwC specialised in assurance assignment of largemultinational company, public listed companies in variousindustries, IPO and corporate exercise. Mr. Wong joinedGlaxoSmithKline then as Finance Manager before he leftMalaysia joining Ernst & Young Shanghai end 2005. Mr.Wong spent 3 years in Ernest & Young Shanghai focusingon statutory audit assignment, IPO assurance assignment,corporate exercise and US audit assignment until he joinedTMF Shanghai end 2008, leading the accounting and taxcompliance services in TMF Shanghai for 2 years.

Mr. Wong relocated back to Malaysia in 2010, as Directorof Accounting & Tax Compliance Services in TMF Malaysiawhere he spent 5 years helping businesses on accountingand tax compliance including GST advisory andcompliance services in TMF Malaysia. Mr. Wong then joinedPCA Corporate Services Sdn Bhd in 2015 as Group ChiefOperating Officer before joining TMC Life Sciences Berhadas Group Chief Financial Officer on 3 August 2015.

Mr. Wong is a Fellow Member of Association of CharteredCertified Accountants (FCCA), member of MalaysianInstitute of Accountants (MIA)-Chartered Accountant (M)and Associate Member of Chartered Tax Institute ofMalaysia (ACTIM).

Mr. Wong does not hold any directorship in other publiccompanies and listed issuer in Malaysia. He has no familyrelationship with any Director and/or major shareholder ofthe Company. He has no convictions of any offences withinthe past five (5) years and has no public sanctions and/orpenalties imposed by the relevant regulatory bodies duringthe financial year. Also, he has no conflict of interest withthe Company.

WONG YU CHEEAged 45, Male, MalaysianGroup Chief Financial Officer TMC Life Sciences Berhad



Ms. Nadiah Wan, aged 33, was appointed as ChiefExecutive Officer of Tropicana Medical Centre (M) Sdn Bhd(“TMCM”) and Group Chief Corporate Officer of TMC LifeSciences Berhad on 19 June 2017.

Prior to joining TMCM and the Company, Ms. Nadiah Wanworked in Sunway Medical Centre as Chief OperatingOfficer (Clinical Services) after being promoted fromDirector of Business Development and CorporateCommunications in October 2016. She started her careerat The Boston Consulting Group in 2007 as an AssociateConsultant before joining Sunway Group as Manager,Strategy and Corporate Development in 2010.

Ms. Nadiah Wan holds an MSc in Public Health Nutritiondegree qualification from the London School of Hygieneand Tropical Medicine, UK and an AB cum Laude inBiochemical Sciences from Harvard College. She alsoserves as an Interviewer for Harvard College admissionsand is an Exco member of the Harvard Club of Malaysia.

Ms. Nadiah Wan does not hold any directorship in otherpublic companies and listed issuer in Malaysia. She has nofamily relationship with any Director and/or majorshareholder of the Company. She has no convictions of anyoffences within the past five (5) years and has no publicsanctions and/or penalties imposed by the relevantregulatory bodies during the financial year. Also, she hasno conflict of interest with the Company.

WAN NADIAH BINTI WAN MOHDABDULLAH YAAKOBAged 33, Female, MalaysianGroup Chief Corporate Officer, TMC Life Sciences Berhad Chief Executive Officer, Tropicana Medical Centre (M) Sdn Bhd


Ms. Woon serves as the Chief Executive Officer of TMCBiotech Sdn Bhd, TMC Women’s Specialist Holdings SdnBhd, TMC Care Sdn Bhd and IVF Technologies Sdn Bhd.Ms. Woon has over 20 years’ experience in the healthcareindustry, with vast experience ranging from operations tobusiness management. Her experience in hospitals hasexposed her to the many facets of healthcare, especiallyfertility treatment, where couples look forward to emotionaland mental support. 'From Hope to Joy’ is something sheholds close to her heart. Seeing the joy in every couplewhen they are successfully pregnant makes her job morefulfilling. Ms. Woon is a firm believer of perseverance,especially when faced with adversity.

Ms. Woon was invited to join TMC Fertility and Women’sSpecialist Centre in 2014 as the General Manager. She wassubsequently promoted to Chief Executive Officer on 1March 2017 for the aforesaid subsidiaries of the Company.

Her areas of expertise include business development andbranding. Ms. Woon, who holds a MBA majoring inMarketing, oversaw the expansion of the TMC Fertility andWomen’s Specialist Centre brand to the Asia Pacific region.Under her leadership, TMC Fertility and Women’s SpecialistCentre has been certified by the Reproductive TechnologyAccreditation Committee (RTAC) and has won multipleinternational awards including the International MedicalTravel Journal’s Fertility Clinic of the Year 2016 & 2017,Global Health and Travel’s Fertility Service Provider of theYear 2016 & 2017 and the Frost & Sullivan’s Fertility Centreof the Year 2016.

Ms. Woon does not hold any directorship in other publiccompanies and listed issuer in Malaysia. She has no familyrelationship with any Director and/or major shareholder ofthe Company. She has no convictions of any offences withinthe past five (5) years and has no public sanctions and/orpenalties imposed by the relevant regulatory bodies duringthe financial year. Also, she has no conflict of interest withthe Company.

WOON MING MINGAged 48, Female, MalaysianChief Executive Officer of IVF Technologies Sdn Bhd TMC Biotech Sdn Bhd TMC Women’s Specialist Holdings Sdn Bhd and TMC Care Sdn Bhd



TMC FERTILITY AND WOMEN’S SPECIALIST CENTRES

Headquarter:

TMC Fertility & Women’s Specialist Centre2nd Floor, Tropicana Medical Centre

11, Jalan TeknologiTaman Sains Selangor 1PJU 5, Kota Damansara

47810 Petaling JayaSelangor Darul EhsanTel: 603-6287 1000Fax: 603-6287 1001www.tmcfertility.com

Branches:

TMC Fertility & Women’s Specialist Centre,Johor Bahru

02-03, Medical SuitesLevel 4, Menara Landmark

12, Jalan Ngee Heng80000 Johor BahruJohor Darul TakzimTel: 607-278 0088Fax: 607-278 0808

TMC Fertility & Women’s Specialist Centre, Penang3E-1-1, Straits Quay

Jalan Seri Tanjung PinangTanjung Tokong

10470 Pulau PinangTel: 604-890 9118Fax: 604-890 9448

TMC Fertility & Women’s Specialist Centre, Puchong5, Jalan Merbah 3

Bandar Puchong Jaya47800 Puchong

Selangor Darul EhsanTel: 603-8076 7111Fax: 603-8071 7281

TMC Fertility & Women’s Specialist Centre, Kepong8, Jalan Prima

Metro Prima, Kepong52100 Kuala LumpurTel: 603-6258 0000Fax: 603-6241 5809

TMC Fertility & Women’s Specialist Centre, Ipoh33, Persiaran Pearl, Fair Park

31400, IpohPerak Darul RidzuanTel: 605-548 8118Fax: 605-548 7118

HOSPITAL

TROPICANA MEDICAL CENTRE (M) SDN BHD11, Jalan Teknologi

Taman Sains Selangor 1PJU 5, Kota Damansara

47810 Petaling JayaSelangor Darul EhsanTel: 603-6287 1111Fax: 603-6287 1212

www.tropicanamedicalcentre.com

RETAIL PHARMACY

TMC CARE SDN BHDVantage Bay

Lot 6376 & 9236Jalan Ibrahim Sultan80300 Johor BahruJohor Darul TakzimTel: 607-223 0088Fax: 607-221 0200

CORPORATEDIRECTORY

STATEMENT ONCORPORATE GOVERNANCE


The Board of Directors of TMC Life Sciences Berhad recognises the importance of safeguarding and promoting theinterest of its stakeholders. The Board is committed to uphold high standards of corporate governance throughtransparency, accountability, integrity and corporate performance.

TMC Life Sciences Berhad adopts the following requirements and guidelines on corporate governance best practices:

• Malaysian Code on Corporate Governance 2012 (“MCCG” or “Code”); • Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”); and • Corporate Governance Guide: Towards Boardroom Excellence by Bursa Securities (“CG Guide”)

The Board is pleased to disclose below the manner in which it has applied the principles and best practices set out in theabove requirements and guidelines, which provide the Group with the appropriate guidance to discharge its disclosureobligations, and the extent to which it has complied with MCCG.

(A) BOARD OF DIRECTORS

The Company is helmed by an experienced Board comprising members of calibre and credibility with necessaryskills, expertise and experience ranging from medical practitioners, to entrepreneurs and accountants.

The Board is primarily responsible for oversight and the overall governance of the Group. It carries out its mandateby providing strategic guidance, implementing succession planning, effectively monitoring management goals andensuring overall accountability for the business growth of the Group. In addition, the Board is responsible for ensuringthat the Group’s internal controls, risk management processes and reporting procedures are in place. In dischargingtheir fiduciary responsibilities, the Board develops the business strategies and the day-to-day management of theCompany is further cascaded to the senior management team. The Board is monitoring the performance of the Groupbased on periodic performance of the Group reported by the management in the quarterly financial results and hasfull access to all operational information and explanation provided by the management.

Key matters reserved for the Board’s approval include the annual business plan and budget, dividend policy, businesscontinuity plan, new issue of securities, business restructuring, expenditure above a certain pre-determined limit,new business venture, expansion plan, funding plan, acquisition or disposal of companies within the Group and anyother strategic matters requiring Board’s decision. Also, the functions of the Board and Management are clearlydemarcated to ensure the effectiveness of the Company’s operations and are guided by the Limit of Authority (“LA”).The purpose of the LA is to define the limits of authority designated to specified positions within the Group and toestablish the types and maximum amount of obligations that may be approved by individuals or groups of individuals.The LA will be reviewed from time to time to ensure that it remains relevant to the Company’s objectives. The lastrevision of the LA was made in August 2017.

The Board is committed to act in the best interest of the Group and its shareholders by exercising due diligence andcare in discharging its duties and responsibilities to ensure that high ethical standards are applied at all times.

Board Charter The Board Charter, which was adopted by the Board in July 2013 and had been reviewed by the Board on 15December 2016, sets out the composition, roles and responsibilities and processes of the Board.

The objectives of the Board Charter are to ensure that all Board members are aware of their duties and responsibilitiesas Board members, the various legislations and regulations affecting their conduct and that the highest standards ofCorporate Governance are applied in all dealings by the Board Members individually and/or on behalf of theCompany. It serves as a strategic guidance and effective oversight of management.

The details of the Board Charter are available for reference at the Company’s website www.tmclife.com


Composition of the Board and Board Balance

The Board comprises one (1) Non-Independent Non-Executive Chairman, one (1) Executive Director, two (2) Non-Independent Non-Executive Directors and three (3) Independent Non-Executive Directors. This is in line with therequirements of Paragraph 15.02 of the MMLR of Bursa Securities that requires one-third (1/3) of the Board membersto be independent directors.

All the Independent Directors fulfil the criteria of independence as defined in the MMLR and act independently ofManagement and do not participate in any business dealings. Neither are they involved in any other relationship withthe Group that may impair their independent judgement and decision-making. The Board performed yearlyassessment of its Independent Directors and received confirmation of independence from the respective IndependentDirectors.

Save for Dato’ Dr. Tan Kee Kwong, all the Independent Directors’ term of service with the Company are less than nine(9) years. The Board recognises the Code’s recommendation on the service tenure of an independent director, whichshould not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an independent directormay continue to serve on the board subject to the director’s re-designation as a non-independent director or seekshareholders’ approval in the event it retains as an Independent Director.

Dato’ Dr. Tan Kee Kwong, an Independent Non-Executive Director who is also a member of Nominating Committee,Remuneration Committee and Audit and Risk Management Committee, was appointed to the Board of TMC LifeSciences Berhad on 3 June 2005 and as such his tenure of service has exceeded a cumulative term of nine (9) yearsand more than twelve (12) years. The Board has reviewed and recommended that Dato’ Dr. Tan Kee Kwong shallcontinue to act as an Independent Non-Executive Director.

In order to adhere the Recommendation 4.2 of Malaysian Code of Corporate Governance 2012, the Board will seekapproval from the shareholders of the Company through a two-tier voting process at the forthcoming 15th AnnualGeneral Meeting (“AGM”) to retain Dato’ Dr. Tan Kee Kwong as Independent Non-Executive Director based on thefollowing justifications:

• He has fulfilled the criteria under the definition of Independent Director as stated in the MMLR and thus he wouldbe able to bring an element of objectivity to the Board;

• He has been with the Company for more than 9 years and was familiar with the Company’s business operations;• He has vast and diverse range of experiences and therefore would be able to provide constructive opinion,

independent judgment and to act in the best interest of the Company and shareholders;• He has devoted sufficient time and attention to his professional obligations for informed and balanced decision

making;• He has shown great integrity and independence, and had not entered into any related party transactions with the

Group; and• He has continued to exercise his due care during his tenure as Independent Non-Executive Director of the

Company and carried out his professional duties in the interest of the Company and shareholders.

The Nominating Committee and the Board had at their respective meetings held on 19 December 2017 decided toalso recommend Dato’ Dr. Tan Kee Kwong and Mr. Roy Quek Hong Sheng who are due for re-election at theforthcoming 15th AGM to be re-elected as Directors of the Company.

Our Chairman, Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir is a Non-Independent Non-Executive Director ofthe Company by virtue of his position as Person-in-Charge (License Holder) of Tropicana Medical Centre, KotaDamansara. The MCCG recommends that where the chairman of the Board is not an independent director, the boardmust comprises a majority of independent directors. The Board acknowledges the recommendation of the Code butis of the view that although the present Board does not have a majority of independent directors, its current size andcomposition of the Board are able to ensure the balance of power and authority on the Board with its strong presenceof six (6) non-executive directors. Also, the current size of the Board (i.e 7 directors) is sufficiently adequate for thecurrent operations of the Group and there is no immediate need to increase the number of independent directors forthe time being after taking into account Board’s decision are made objectively in the best interests of the Companydue to the Board members’ wide experience and exposure in various areas as well as their diverse background andskill.



The Board committed to ensure the effective leadership and is satisfied by having Professor Emeritus Dato’ Dr. KhalidBin Abdul Kadir as its Non-Independent Non-Executive Chairman due to his vast experience in the medical industryand is able to provide the Board with a clear direction to the strategy decision, contributing significantly to the longterm growth of the Group. Further, he also demonstrates his objectivity in deliberating and making decision aligningwith the shareholders’ interest at large to ensure balance of power and authority on the Board during his tenure asChairman of the Company.

The role of Chairman and the Executive Director cum Group Chief Executive Officer are separated. The Chairmanprovides leadership at Board level and represents the Board to the shareholders and other stakeholders and isresponsible for ensuring integrity and effectiveness of the Board and its committees.

The Executive Director cum Group Chief Executive Officer provides executive leadership and is accountable to theBoard for implementation of the strategies, objectives and decisions of the Board within the framework of delegatedauthorities, values and policies of the Company.

The Non-Executive Directors have a responsibility to bring independence and objective judgement to Board’sdecisions after taking into consideration the interest of the shareholders, employees and business associates. The profile of the individual Directors are set out on pages 25 to 32 of this Annual Report.

Board Meeting

The Board meetings are scheduled to be held regularly with sufficient notice being issued for meetings conducted inaccordance with a structured agenda. The Board is supplied with information in a timely manner and appropriatequality to enable them to discharge their duties. The Board has a formal schedule of matters specifically reserved forthe Board’s discussion and/or approval and has received notice and meeting materials in advance of the meeting.All issues and decisions made during the Board Meetings are properly recorded and thereafter circulated to theChairman for comments before minutes of proceedings are finalised and tabled to the Board for confirmation. TheCompany Secretary organises and attends all Board meetings to ensure proper recording of the proceedings. Ad-hoc meetings may be called as and when significant issues arise which requires the Board’s decisions.

In exercising their duties, the Directors have direct access to the senior management executives. In addition, theDirectors may seek advice from the Company Secretary to assist them in furtherance of their duties. Where necessary,the Board may engage Independent Advisors at the Group’s expense on specialised issues to enable them todischarge their duties proficiently.

During the financial year ended 31 August 2017, five (5) meetings were held in which the Board deliberated uponand considered various issues including the Group’s financial results, corporate exercises, business plans and annualbudgets, performance of the Group’s business, material agreements, major capital expenditures and strategic issuesaffecting the Group’s business.

Attendance of the Directors at the Board meetings held during the financial year ended 31 August 2017 are as follows:-

Director Attendance Professor Emeritus Dato’ Dr. Khalid bin Abdul Kadir 5/5Roy Quek Hong Sheng 5/5Dr. Chan Boon Kheng (Retired on 23/1/2017) 2/2*Dato’ Dr. Tan Kee Kwong 5/5Gary Ho Kuat Foong 5/5Claire Lee Suk Leng 3/5Kan Kheong Ng 5/5Freddie Heng Kim Chuan 3/4#

* Reflects the number of Board meetings attended during the financial year up to the date of retirement. # Reflects the number of Board meetings attended during the financial year after he became a Director on 2 November 2016.



Appointment to the Board

The Nominating Committee has been entrusted with the responsibility to identify, evaluate, select and recommend tothe Board suitable candidate with the required credentials to be appointed as a Director of the Company, either to fillcasual vacancies or as additions to meet the changing needs of the Group. That being said, the potential candidatesmay be proposed by existing directors, shareholders or their party referral. The Board does not set specific criteriafor assessment and selection of director candidate. However, consideration would be taken on the need of the mixof skills, experiences, other qualities and diversity in gender, ethnicity and age within board composition. Also, forappointment of independent director, the Nominating Committee would also assess whether the candidate meets therequirements for independence based on the criteria prescribed in the MMLR.

There was no new appointment of Director to the Board during the financial year ended 31 August 2017, other thanFreddie Heng Kim Chuan appointment on 2 November 2016.

Re-appointment and Re-election of Directors

In accordance with the Company’s Constitution (previously Articles of Association) (hereinafter known as“Constitution”), at every AGM, one-third (1/3) of the Directors for the time being or, if the number is not three (3) or amultiple of three (3), the number nearest to one third shall retire from office such that each Director shall retire fromoffice once in every three (3) years and all Directors who retire from office shall be eligible for re-election. Proposalsfor re-appointment and re-election of Directors are recommended by the Nominating Committee to the Board prior tothe shareholders’ approval at the AGM, based on the annual assessment conducted.

Based on the recent annual assessment and evaluation, the Nominating Committee is satisfied with the performanceof the directors who are standing for election, recommended to the Board their proposed re-election in accordancewith Constitution. The Board supported the Nominating Committee’s recommendations to re-elect the eligible directorsstanding for re-election by rotation at the forthcoming 15th AGM.

Assessment on Board Independence

The Board recognises the importance of independence and objectivity in the decision-making process. The Boardand its Nominating Committee have upon their annual assessment, concluded that each of the three IndependentNon-Executive Directors continue to demonstrate conduct and behaviour that are essential indicators ofindependence, and that each of them continues to fulfil the definition and criteria of independence as set out in MMLR.

Based on the independent assessment, the Board is also concluded that the independence of Dato’ Dr. Tan KeeKwong, whose tenure of service has exceeded a cumulative term of nine (9) years, details of which are set out onpage 38 of this annual report, is not impaired or affected by the length of his service.

Boardroom Diversity

With regard to boardroom diversity, the Board is supportive of the diversity in gender, ethnicity and age. In October2012, the Company appointed Ms. Claire Lee Suk Leng as an Independent Non-Executive Director of the Company.She is also the Chairperson of Remuneration Committee and member of Audit and Risk Management Committee andNominating Committee.

Annual Assessment of Directors and Board Committees

The Nominating Committee undertakes annual evaluation to review the performance of each individual Directors, theeffectiveness of the Board and the Board Committees.

The assessment of the Board and Board Committees covers areas such as the Board structure/mix, operation,decision making and boardroom participation and activities, meeting administration and conducts, skills, knowledge,experience and competencies and role and responsibilities. For the performance of the individual Directors, theassessment criteria has included the areas of contribution and interaction with peer, quality of input of the Director,understanding of role, etc.



During the annual assessment exercise, the Directors are given a performance evaluation sheet for individual DirectorSelf/Peer Evaluation and Board Evaluation to complete. In addition, Directors who are members of the BoardCommittees are given additional performance evaluation sheets for the respective Board Committees to complete.Sufficient time is given to the Directors to complete the forms and upon completion, the forms are submitted to theCompany Secretary for compilation of rating and scores and summary of which would then be presented to theNominating Committee for further review and assessment.

During the financial year, an annual assessment exercised had been carried out by the Nominating Committee. Forgood corporate governance, the Nomination Committee did not review its own effectiveness and the performancesof the Nomination Committee members. Instead, such review was carried out by the Board as a whole with themembers of the Nomination Committee abstained from deliberation. In view that the Nomination Committee membersare also members of Remuneration Committee and the Audit and Risk Management Committee, the review of theeffectiveness and performances of the Remuneration Committee and the Audit and Risk Management Committeewere also carried out by the Board.

The Director who is subject to re-election and/or retention in office as Independent Non-Executive Director at nextAGM are assessed by the Nomination Committee (with the relevant Nomination Committee member abstaining onhis/her own re-election) before recommendation is made to the Board and shareholders for the re-election and/orretention in office as Independent Non-Executive Director. Outcome of the assessment and recommendation wouldbe reported to the Board for information and decision on areas for improvement.

Directors’ Training

The Directors keep themselves abreast on the latest industry developments as well as new statutory and regulatoryrequirements by attending various training programmes, seminars and/or conferences to enable them to dischargetheir duties effectively.

The training needs of Directors would be assessed and proposed by the individual Director. Each Director determinesthe areas of training that he or she may require for personal development as a Director or as a member of a BoardCommittee. During the financial year under review, the Directors have also attended the following training programmes,seminars and/or conferences:-

Name of Seminars/Director Training programmes attended

Professor Emeritus Dato’ Dr. Comprehending Financial Statements for Directors and Khalid Bin Abdul Kadir Senior Management

Roy Quek Hong Sheng APHM International Healthcare Conference and Exhibition 2017

Dato’ Dr. Tan Kee Kwong What Directors need to know on reporting & disclosure obligations to prevent public reprimand & fines by the Regulators

Gary Ho Kuat Foong Congress on Demand 2016

Kan Kheong Ng Malaysia As An Investment and Intermediating Hub: Key Legal & Tax Insights

Claire Lee Suk Leng Are We Heading for Another Global Recession or Do We Care? Remuneration Committee: Attracting and Retaining the best Talents

Freddie Heng Kim Chuan Mandatory Accreditation Programme (MAP)

Directors’ Remuneration

The Remuneration Committee is responsible for reviewing and recommending to the Board, the remuneration packagefor the Executive Directors. It is the ultimate responsibility of the Board to approve the remuneration of the ExecutiveDirectors.



The remuneration of Non-Executive Directors, which made up of Directors’ fee, meeting allowance and other benefits,if any, is determined by the Board. The Directors’ fee is determined and recommended by the Board and subject tothe approval of the shareholders at general meeting.

The Directors’ remuneration paid or payable to all the Directors of the Company for the financial year ended 31 August2017 are as follows:-

Salaries, EPF Meeting and other Benefit-Received from TMC Life Fees Allowances emoluments in-kind Total Sciences Berhad (RM) (RM) (RM) (RM) (RM)

Executive Directors - - - - -Non-Executive Directors 350,000 72,500 - - 422,500

Salaries, EPF Meeting and other Benefit- Fees Allowances emoluments in-kind TotalReceived on Group Basis (RM) (RM) (RM) (RM) (RM)

Executive Directors - - 1,265,000# - 1,265,000Non-Executive Directors 350,000 72,500 48,000 - 470,500

The number of Directors who served during the financial year whose remuneration falls into the following bands:-

Received from TMC Life Sciences Berhad Number of DirectorsRemuneration Bands Executive Non-Executive Below RM50,000 0 2RM50,001 – RM100,000 0 5RM100,001 – RM150,000 0 0 Total 0 7#

Received on Group Basis Number of DirectorsRemuneration Bands Executive Non-Executive Below RM50,000 1 2RM50,001 – RM100,000 0 5RM100,001 – RM150,000 0 0RM500,001 – RM550,000 0 0RM1,250,001 – RM1,300,000 1 0 Total 2# 7#

# Dr. Chan Boon Kheng has been included as Executive Director from 1 September 2016 to 30 September 2016 and as Non-Executive Non-Independent Director from 1 October 2016 to 23 January 2017.

(B) BOARD AS COMMITTEES

The Board has set up different Board Committees with different functions to assist the Board in discharging its fiduciaryduties. These committees do not make decision on behalf of the Board and the Company. It is each committee’s dutyto review matters under its purview and make the necessary recommendation to the Board for its consideration anddecision making.



The Board has to-date established the following principal Board Committees:-

Audit and Risk Management Committee

The Audit and Risk Management Committee (“ARMC”) comprises four (4) members who are Non-Executive Directorsand three (3) of them are independent and ARMC’s responsibilities include reviewing management and financialstatements, related party transactions, internal control and risk management processes.

The summary of activities of the ARMC are set out separately in the ARMC Report on pages 47 to 48 of this AnnualReport.

Nominating Committee

The Nominating Committee (“NC”) established by the Board consists of the following members:

Chairman : Gary Ho Kuat FoongMembers : Dato’ Dr. Tan Kee Kwong Claire Lee Suk Leng Kan Kheong Ng Freddie Heng Kim Chuan

The NC comprises five (5) members who are Non-Executive Directors and three (3) of them are Independent. Therole of the NC is to assist the Board to evaluate candidates for nomination to the Board and to assess the effectivenessof the Board and each individual Director on an ongoing basis in terms of contribution, skills, experience and otherqualities.

In addition, the NC also has the function of assessing the effectiveness of the Board, reviewing the skills andcompetencies of individual Directors and the composition of the various Committees of the Board. The objective is toimprove the Board’s effectiveness, identify gaps, maximise strengths and address weaknesses of the Board.

Summary of activities

During the financial year ended 31 August 2017, the NC conducted two (2) meetings. At the said meeting, the NC:

(a) Reviewed and assessed the performance and effectiveness of the Board of Directors, the Committees of theBoard and the performance of each Director for financial period ended 31 August 2016.

(b) Reviewed and recommended the re-election of directors at the Thirteenth and Fourteenth Annual General Meetingheld on 23 January 2017 (“13th AGM and 14th AGM”).

(c) Reviewed and assessed the board independence under the MCCG in relation to:

(i) retention of Dato’ Dr. Tan Kee Kwong as Independent Director notwithstanding his service for a cumulativeyear of nine (9) years after the 13th AGM and 14th AGM; and

(ii) recommendation of the MCCG on the requirement to have a majority independent directors on the boardwhere the chairman of the board is not an independent director.

(d) Reviewed and recommended to the Board on nomination of new director and change of composition of the BoardCommittees.

(e) Reviewed and recommended to the Board on appointment of Group Chief Corporate Officer and Chief Executive

Officer – Designate, of Tropicana Medical Centre (M) Sdn. Bhd., a wholly owned subsidiary of the Company.

(f) Reviewed and recommended to the Board on the extension of service contract of Group Chief Executive Officerof the Company.



Remuneration Committee

The Remuneration Committee (“RC”) established by the Board consists of the following members:

Chairperson : Claire Lee Suk LengMembers : Dato’ Dr. Tan Kee Kwong Gary Ho Kuat Foong Kan Kheong Ng Freddie Heng Kim Chuan

The RC comprises five (5) members who are Non-Executive Directors. The role of the RC is to recommend to theBoard, the remuneration packages of Executive Directors and Senior Management personnel of the Group, in additionto any increment/incentive to be awarded.

Summary of activities

During the financial year ended 31 August 2017, the RC conducted four (4) meetings. At the said meetings, the RC:

(a) Discussed and recommended to the Board for approval, bonus and salary increment/adjustment for SeniorManagement and employees upon assessing the performance of the Company and employees.

(b) Discussed and recommended to the Board for approval, the proposed increase of Directors’ fees.

(c) Discussed and recommended to the Board for approval, the proposed remuneration for the new Directors.

(d) Discussed and recommended to the Board for recommendation to shareholders for approval, the Allocation ofshares option to new directors and eligible employees under the Employees’ Share Option Scheme.

(e) Discussed and recommended to the Board for approval on cash bonus system for key senior management.

(f) Discussed and recommended to the Board for approval on Remuneration Package of the Group Chief ExecutiveOfficer.

(C) SHAREHOLDERS

Relationship with Shareholders

The Board acknowledges the need for the Company’s shareholders and investors to be informed of all materialbusiness and corporate developments concerning the Group in a timely manner. Shareholders and investors are keptinformed of financial performance, major corporate proposals and pertinent issues of the Group via announcementsmade through Bursa Securities.

Annual General Meeting

The AGM is the principal forum for dialogue and interaction with the shareholders and the shareholders areencouraged to raise any questions relating to the proposed resolutions as well as the Group’s business operationsand affairs. The Notice and agenda of AGM together with Form of Proxy are given to shareholders at least twenty-eight (28) days before the AGM, which gives shareholders sufficient time to prepare themselves to attend the AGMor to appoint a proxy to attend and vote on their behalf. Each item of special business included in the Notice of theAGM is accompanied by an explanatory statement for the proposed resolution to facilitate the full understanding andevaluation of issues involved.

The Chairman and the Board will respond to shareholders’ questions during the meeting. The External Auditors arealso present to provide their professional and independent clarification, if required, on issues highlighted by theshareholders.

Corporate and financial information of the Group are also made available to the public through the Group’s websiteat www.tmclife.com.



(D) ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is responsible for the quality and completeness of publicly disclosed financial reports. The Board with theassistance of the ARMC has to ensure that the financial statements are drawn up in accordance with the MalaysianFinancial Reporting Standards, International Financial Reporting Standards and the requirements of the CompaniesAct 2016 in Malaysia, that the appropriate accounting policies have been used, consistently applied and supportedby reasonable judgements and estimates, and the financial reports present a balanced, clear and comprehensiveassessment of the Group’s financial performance.

Relationship with the Auditors

The Company, through its ARMC, has established a transparent and appropriate relationship with the Group’s auditors,both internal and external. It is the policy of the ARMC to meet the external auditors to discuss their audit plan, auditfindings and financial statements.

The Company’s internal audit function is outsourced to a professional service firm and the internal auditors are freefrom relationships or conflicts of interest, which could impair their objectivity and independence, and the internal auditfunction is carried out in accordance with recognised framework.

Internal Control

The Board acknowledges its overall responsibility for maintaining an internal control system that provides reasonableassurance of effective and efficient operations, compliance with laws and regulations as well as internal proceduresand guidelines. The system, by its nature, can only provide reasonable but not absolute assurance against risk ofmaterial errors, fraud or loss.

The Statement of Risk Management and Internal Control which provides an overview of the state of internal controlswithin the Company and the Group is set out on pages 49 to 51 of this Annual Report.

(E) RESPONSIBILITY STATEMENT BY DIRECTORS

The Directors are required by the Companies Act 2016 to prepare financial statements for each financial year whichgive a true and fair view of the state of affairs of the Group and Company and of the results and cash flow of theGroup and the Company for the financial year then ended.

In preparing the financial statements, the Directors have:-

(i) Adopted the appropriate accounting policies and applied them consistently; (ii) Made judgements and estimates that are reasonable and prudent;(iii) Ensure applicable approved accounting standards have been followed, and any material departures have been

disclosed and explained in the financial statements; and(iv) Ensure the financial statements have been prepared on a going concern basis.

The Directors have the responsibility to ensure that the Group and the Company keeps proper accounting records,which disclose with reasonable accuracy the financial position of the Group and the Company, and which will enablethem to ensure the financial statements have complied with Malaysian Financial Reporting Standards, InternationalFinancial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

The Directors are also responsible for taking reasonable steps to safeguard the assets of the Group and the Companyto prevent and detect fraud and other irregularities.

(F) CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

The Board places great importance on corporate social responsibility (“CSR”) and business sustainability andembraces CSR as an integral part of the Group’s business philosophy and corporate culture.

The CSR activities of the Group during the financial year are set out on pages 21 to 24 of this Annual Report.



(G) QUALIFIED AND COMPETENT COMPANY SECRETARIES

The Company Secretaries of the Group are experienced, competent and knowledgeable, play an important role inadvising the Board on issues relating to corporate compliance with the relevant laws, rules, procedures and regulationsaffecting the Board and the Group, as well as best practices of governance. The Directors have ready and unrestrictedaccess to the advice and services of the Company Secretaries. The Board is regularly kept up to date on and apprisedof any regulations and guidelines.

The Company Secretaries are responsible for advising the Directors of their obligations and duties to disclose theirinterest in securities, disclosure of any conflict of interest in a transaction involving the Group, prohibition on dealingin securities and restrictions on disclosure of price-sensitive information.

The Company Secretaries also safeguard all statutory books and records of the Company and maintain the statutoryregisters of the Company. Company Secretaries also ensure all Board meetings are properly convened, and thataccurate and proper records of the proceedings and resolutions passed are recorded. In addition, the CompanySecretaries also ensure that any change in the Group’s statutory information should be duly completed in the relevantprescribed forms and lodged with the Registrar of Companies within the required year of time.

(H) CODES AND POLICIES

1. Code of Conduct and Ethics

The Board has made a commitment to create a corporate culture within the Group to operate the businesses inan ethical manner and to uphold the highest standards of professionalism and exemplary corporate conduct inrelation to interactions with shareholders, employees, suppliers and customers. The Group has implemented aCode of Conduct and Ethics which dictates the ethics and standard of good conduct expected of every Director.The Code of Conduct and Ethics, which forms part of the Board Charter, is available for reference atwww.tmclife.com

2. Whistleblowing Policy and Procedure

The Board allows employees and associates to report suspected and/or known misconduct, wrongdoings,corruption, fraud, waste and/or abuse involving resources of the Company. The Whistleblowing Policy andProcedure (adopted by the Company in July 2013 and had been reviewed by the Board on 15 December 2016)provides and facilitates a mechanism for any employee and associate to report concerns about any suspectedand/or known misconduct, wrongdoings, corruption, fraud, waste and/or abuse.

The Whistleblowing Policy and Procedure is available at Company’s website at www.tmclife.com

3. Corporate Disclosure Policy & Procedures

The Board places importance in ensuring disclosures made to shareholders and investors are accurate, clear,timely and comprehensive as they are critical towards building and maintaining corporate credibility and investorconfidence. As such, the Board has adopted a Corporate Disclosure Policy & Procedures in July 2013 settingout the policies and procedures for disclosure of material information of the Group. The said Policy applies to allDirectors, management, officers and employees of the Group.

(I) COMPLIANCE WITH MCCG

Save for recommendation 3.5 of Code, the Board is satisfied that during the financial year, the Company has compliedwith the Best Practices in MCCG on the application of the principles and best practices in corporate governance.

The Statement on Corporate Governance is made in accordance with a resolution of the Board of Directors dated 19December 2017.


AUDIT AND RISK MANAGEMENTCOMMITTEE REPORT


During the financial year, the Audit and Risk Management Committee (“ARMC”) of TMC Life Sciences Berhad carried outits duties and responsibilities in accordance with its terms of reference and held discussions with the internal auditors,external auditors, outsourced risk management consultants and relevant members of management. The ARMC is of theview that no material misstatements or losses, contingencies or uncertainties have arisen, based on the reviews madeand discussions held.

MEMBERS AND ATTENDANCE

The ARMC comprises the following members and details of attendance of each member at the five (5) meetings heldduring the financial year ended 31 August 2017 were as follows:

Director Designation Attendance

Gary Ho Kuat Foong Independent Non-Executive Director 5/5(Chairman)

Claire Lee Suk Leng Independent Non-Executive Director 4/5(Member)

Dato’ Dr. Tan Kee Kwong Independent Non-Executive Director 5/5(Member)

Freddie Heng Kim Chuan Non-Independent Non-Executive Director 3/4*(Member)

* Reflects the number of meetings attended during the financial year ended 31 August 2017 after his appointment as a Director on 2 November 2016.

TERMS OF REFERENCE

Primary Purposes

The ARMC had discharged its function and carried out its duties as set out in the terms of reference.

The terms of reference of the ARMC is accessible through the Group’s website www.tmclife.com.

SUMMARY OF THE ACTIVITIES OF ARMC

The main activities carried out by the ARMC during the financial year ended 31 August 2017 included the following:

Financial reporting and appointment of external auditors

(i) Reviewed the quarterly financial results of the Group including the draft announcements pertaining thereto, and made recommendations to the Board for approval. The reviews, served to ensure that the Group’s financial reporting and disclosures are in compliance with the MMLR and applicable accounting standards in Malaysia;

(ii) Reviewed with the External Auditors, the Audit Plan for the financial year ended 31 August 2017 on both the audit strategy and audit approach, the adequacy of existing external audit arrangements, with emphasis on the scope and quality of the audit and proposed fees for the statutory audit;

(iii) Reviewed with the External Auditors, the status of their audit for the financial period ended 31 August 2016, the audit report and internal control recommendations in respect of improvements in internal control procedures noted in the course of their audit;

(iv) Reviewed and recommended to the Board for approval, the fees for the audit and non-audit services for the financial year ended 31 August 2017;

(v) Reviewed and recommended to the Board for approval and recommendation on the appointment of External Auditors,Messrs Ernst & Young for the financial year ended 31 August 2017;

(vi) Reviewed the annual audited financial statements of the Company and the Group for the financial period ended 31 August 2016 and made recommendations to the Board for approval;

Internal audit

(vii) Reviewed with the Internal Auditors the Internal Audit Plan to ensure the adequacy of the scope and coverage of work;

(viii) Reviewed the audit reports presented by the Internal Auditors on their findings and recommendations with respect to system and control weaknesses;

(ix) Reviewed the effectiveness of the audit process and the performance of the overall Internal Audit function;

Enterprise risk management

(x) Reviewed the updates and reports from the outsourced risk management consultant on the implementation of the Enterprise Risk Management (ERM) Framework and the development of Enterprise Risk Scorecard, assessed the adequacy and effectiveness of the risk management framework and the appropriateness of management’s responses to key risk areas;

Related party transactions

(xi) Reviewed the related party transactions and ensured that they were not more favourable to the related parties than those generally available to the public and complied with the MMLR;

(xii) Monitored the thresholds of the related party transactions to ensure compliance with the MMLR;

(xiii) Reviewed the related party transaction transacted during the financial year ended 31 August 2017 and made statement of its view whether the transaction is in the best interest of the Company, fair, reasonable and on commercial terms and not detrimental to the interests of the non-interested shareholders of the Company.

Other activities

(xiv) Reviewed and recommended to the Board for approval, the ARMC report and Statement on Risk Management andInternal Control for inclusion in the 2016 Annual Report; and

(xv) Reviewed, approved and/or recommended to the Board for approval, new policies or amendments to the existing policiesof the Company within the purview of the ARMC to ensure that the polices adopted are aligned with the developmentsof the rules, regulations, guidelines, best practices issued and recommended by the relevant regulatory authorities.

INTERNAL AUDIT FUNCTION

The Group‘s internal audit function is outsourced to a professional services firm, which was tasked with the aim of assistingthe ARMC to discharge its duties and responsibilities. The main role of the Internal Auditors is to provide the ARMC withindependent and objective reports on the effectiveness of the system of internal controls within the Group. The ARMCdiscusses the internal audit reports with the Internal Auditors to ensure recommendations from the reports are duly actedupon by management. 2 internal audit reviews were carried out during the financial year ended 31 August 2017. Thereviews were on the following areas:

a) Business processes review of TMC Fertility Centre at Penang Branch; andb) Revenue and accounts receivable and inventory management of Tropicana Medical Centre (M) Sdn Bhd.

The cost incurred in relation to the internal audit function during the financial year ended 31 August 2017 was RM54,000.

The Statement on Risk Management and Internal Control can be found on pages 49 to 51 of the Annual Report, and thisprovides an overview of the risk management and internal controls system within the Group.


AUDIT AND RISK MANAGEMENTCOMMITTEE REPORT

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


Introduction

The Malaysian Code on Corporate Governance requires the Board of Directors of public listed companies to establish asound risk management framework and system of internal control to safeguard shareholders’ investments and the Group’sassets.

Pursuant to paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“ListingRequirements”) which requires the Board of public listed companies to include in the Annual Report a “statement aboutthe state of risk management and internal control of the listed issuer as a group”, the Board of Directors of TMC LifeSciences Berhad is pleased to provide the following Statement on Risk Management and Internal Control in accordancewith the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers and Practice Note9 of the Listing Requirements.

Board Responsibility

The Board of TMC Life Sciences Berhad acknowledges the importance of maintaining a sound system of risk managementand internal control to safeguard the shareholders’ investments and the Group’s assets. The Board is assisted by theAudit and Risk Management Committee and management to implement the policies and procedures on risk and control.These include identifying the risks and assessing the potential impacts of the risks, and to have the necessary internalcontrol to mitigate the risks. The profiles of the risks are reviewed by the Board on annual basis.

The Board also acknowledges that whilst the Group’s system of risk management and internal control is designed toidentify, manage and attempt to lower the risk threatening the achievement of business objectives, some risks may not betotally eliminated. As such, the system of risk management and internal control can only provide reasonable but notabsolute assurance against material misstatement of financial and management information and records, and/or againstany financial losses or fraud.

The Group’s Risk Management and Internal Control System

Risk Management Framework

The Group recognises that risk is an integral and unavoidable component of its business and is characterised by threatsand opportunities. The Group works on fostering a risk-aware corporate culture and is committed to managing the risksin a proactive and effective manner to enhance opportunity, reduce threats and sustain its competitive advantage.

The Board has taken necessary measures to ensure that risk management is embedded in the Group’s managementsystem with the assistance of the Management, Audit and Risk Management Committee (“ARMC”) and the outsourcedInternal Auditors. In addition, the Group has established a Group-wide Strategic Enterprise Risk Management (“ERM”)Framework leveraging on the best practices of existing frameworks within the Group and has been updating the riskprofiles annually.

The Group recognises the importance of quality and caliber of its employees and a variety of training and developmentopportunities are actively explored. Relevant training and continuing development programmes are provided for staff toimprove their various areas of knowledge, technical skills and personal development. These had directly and indirectlyenhanced their level of risk awareness in their operating environment. With this understanding, risks can be identified ordetected, and preventive/corrective measures can be applied to mitigate any losses that may occur.

The Group’s risk management framework is consistent with the ISO 31000 Risk Management Principles and Guidelines,which is designed to establish the context for an embedded ERM into key departments and business processes of theGroup.

The key elements of the Group’s Internal Control System

The Group’s internal control system consists of the policies, processes, activities and control environment that facilitatesan effective and efficient operation by enabling it to respond appropriately to significant business, operational, financial,compliance and other risks in order to achieve the Group’s strategy and objectives.


The key elements of the Group’s internal control system, that are regularly reviewed by the Board, are as follows:

i. the Group has in place an established organisational structure with clearly defined lines of key responsibilities and appropriate levels of delegation and authority.

ii. the Group has in place internal procedures covering significant areas of operations, such as purchasing of assets required for the operations of the Group, recruitment and selection of employees, training and development of employees and has a clear definition of authorisation procedures for purchasing, payment and capital expenditure.

iii. regular executive committee meetings are held to review and monitor the business developments, to discuss and resolve operational and management issues and to review the financial performance of the Group against the budget and business plans.

iv. the ARMC reviews the quarterly financial reports, annual financial statements and reports to the Board on its review and findings thereon to ensure effectiveness of the internal financial control environment of the Group.

v. the corporate head office coordinates the budgetary process for the Group wherein the budgets are discussed and prepared at the operating unit level, reviewed and recommended by executive committee and finally approved by the Board of Directors.

vi. significant corporate matters and its status discussed at the executive committee meetings are brought to the Board meetings for further deliberation and review by the Board members.

vii. the Board, the ARMC and Management monitor the effectiveness of the Group’s risk management and internal control system.

Management of Risks

The Group is principally involved in providing healthcare services. The Group undertake periodic exercise of identifyingkey external and operational risks faced by all business and functional units. Key risk exposure faced by the Group duringthe financial year have been identified by all business and functional unit heads and with the appropriate risk mitigationplan being developed accordingly.

The key external risks of the Group include escalating costs resulting in lower operational profits due to inflation, foreignexchange fluctuation impact on the purchase of medical equipment, increasing competition from existing establishedmedical and specialist centre, cyber risk from hacker attack and data breach. The Group manages the risk throughimplementing cost control awareness and initiatives, monitoring the market and pricing trends and periodic review ofcosting and pricing strategy to stay competitive in the market. As for increasing competition from existing establishedmedical and specialist centres, the Group is actively monitoring market development, trends and pricing of competitors.The Group manages cyber risk by enhancing the Group IT policies with continuous education of measures and ways toprevent hacker attack to minimise the possibilities of data breach and network downtime.

The key operational risks of the Group include talent retention, limitation of core system capability. The Group managestalent retention risk through constantly benchmarking the compensation and rewards to industry standards, implementationof performance based remuneration and establishing clear career development programs to develop human capital. Asfor the core system capability risk, the Group established Steering Committee to execute strategic information technologyplan which align the information technology requirement with the continuous change in business and operationalrequirements.

The execution of risk mitigation plan are being monitored and managed by the respective business and functional unitowners. Significant deviation from the risk mitigation plan will be reported to the Executive Committee accordingly.



Assurance Mechanisms

The ARMC is tasked by the Board to carry out the duty to review and monitor the effectiveness of the Group’s internalcontrol system. To discharge its responsibilities, the ARMC relies significantly on the support of independent internalauditors to review the effectiveness of risk identification procedures and control processes implemented by management,and to report directly to the ARMC during the quarterly ARMC meetings. The independent internal auditors provideassurance over the operation and validity of the internal control system in relation to the level of risk involved.

Based on these audits, the internal auditors provide the ARMC with yearly report highlighting observations andmanagement action plans to improve the internal control system within the Group. In addition, the ARMC also reviewsand deliberates on any matters relating to internal control highlighted by the External Auditors in the course of their statutoryaudit of the financial statements of the Group.

The Board’s Commitment

As the Group operates in a dynamic business environment, a sound risk management and internal control system mustbe in place in order to be able to support its business objectives. Therefore, the Board remains committed towardsmaintaining a sound system of risk management and internal control and believes that a balanced achievement of itsbusiness objectives and operational efficiency can be attained.

The Board’s Conclusion

The Board has received assurance from the Group Chief Executive Officer and the Group Chief Financial Officer thatbased on the risk management and internal control of the Group as well as inquiry and information provided, the Group’srisk management and internal control system is operating adequately and effectively in all material aspects.

The Board is of the view that the risk management and internal control system in place for the financial year under reviewand up to the date of issuance of the financial statements, is adequate and effective to safeguard the shareholders’investments and the Group’s assets.

Moving forward, the Group will continue to improve and enhance the existing systems of risk management and internalcontrols, taking into consideration the changing business environment.

Review of Statement by External Auditors

As required by paragraph 15.23 of the Listing Requirements, the external auditors have reviewed this Statement on RiskManagement and Internal Control. As set out in their terms of engagement, the said review procedures were performedin accordance with the Recommended Practice Guide 5 (Revised): Guidance for Auditors On Engagements To ReportOn The Statement On Risk Management and Internal Control Included in the Annual Report (“RPG 5”) issued by theMalaysian Institute of Accountants.

RPG 5 does not require the external auditors to consider whether this Statement covers all risks and controls, or to forman opinion on the adequacy and effectiveness of the Group’s risk management and internal control system. RPG 5 alsodoes not require the external auditors to consider whether the processes described to deal with material internal controlaspects of any significant problems disclosed in this Annual Report will, in fact, remedy the problems.

Based on their procedures performed, the external auditors have reported to the Board that nothing has come to theirattention that causes them to believe that this Statement is not prepared in all material respects, in accordance with thedisclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines forDirectors of Listed Issuers, nor is factually inaccurate.



(a) Audit and Non-Audit Fees

The audit fees and non-audit fees incurred for services rendered by the external auditors for the financial year ended31 August 2017 are set out below:

COMPANY (RM) GROUP (RM)

Audit Fees 40,000 150,500 Non-Audit Fees 5,000 10,000 Total 45,000 160,500

(b) Material Contracts During the financial year ended 31 August 2017, there were no material contracts entered into by the Company andits subsidiaries involving Directors’, chief executive’s and/or major shareholders’ interests.

(c) Utilisation of Proceeds The Company did not raise funds through any corporate proposal during the financial year under review.

(d) Employees’ Share Option Scheme (‘ESOS’)

The Company implemented an ESOS, which is in force for a period of five (5) years until 28 May 2020 (‘’the optionperiod’’).

The number of ESOS options of the Company during the financial year are as follow:

[--Number of options over ordinary shares--] Balance Movement during the Balance as at [-------financial year-------] as at 1.9.2016 Granted Exercised Lapsed 31.8.2017

Directors - Executive Directors* 3,500,000 3,500,000 (1,400,000) (2,100,000) 3,500,000 - Non-Executive Directors 9,500,000 2,000,000 - - 11,500,000

13,000,000 5,500,000 (1,400,000) (2,100,000) 15,000,000 Senior Management 2,000,000 1,000,000 (1,200,000) (800,000) 1,000,000 Employees 7,824,750 900,000 (623,400) (443,850) 7,657,500 Total 22,824,750 7,400,000 (3,223,400) (3,343,850) 23,657,500

* Number of options as at 1 September 2016 inclusive options held by Dr. Chan Boon Kheng, a former ExecutiveDirector who re-designated as Non-Independent Non-Executive Director on 1 October 2016 and retired asDirector at Annual General Meeting held on 23 January 2017.

Options granted to Directors and Senior Management

During the financial Since commencement year ended of the ESOS

31 August 2017 on 28 May 2015

Aggregate maximum allocation in percentage 50% 50%Actual percentage granted 5% 12%

The breakdown of option offered to Non-Executive Directors pursuant to ESOS is detailed in page 131 and none ofthe Directors had exercised options during the financial year ended 31 August 2017.

OTHER CORPORATEDISCLOSURE


54 Directors’ Report59 Statement by Directors59 Statutory Declaration60 Independent Auditors’ Report64 Statements of Comprehensive Income65 Statements of Financial Position66 Consolidated Statement of Changes in Equity68 Company Statement of Changes in Equity70 Statements of Cash Flows72 Notes to the Financial Statements127 Supplementary information - breakdown of retained profits into realised and unrealised

FINANCIAL STATEMENTS


The Directors have pleasure in presenting their report together with the audited financial statements of the Group and ofthe Company for the financial year ended 31 August 2017.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding.

The principal activities of the subsidiaries are disclosed in Note 16 to the financial statements.

ULTIMATE HOLDING COMPANY

The ultimate holding company is Sasteria Pte. Ltd., a company incorporated in The Republic of Singapore.

RESULTS

Group Company RM’000 RM’000

Profit for the financial year, attributable to owners of the parent 26,034 5,730

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

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

DIVIDEND

Dividend paid by the Company since 31 August 2016 was as follows:

RM’000In respect of the financial period ended 31 August 2016 as reported in the Directors' report of that period:

First and final single-tier dividend of 0.154 sen per ordinary share paid on 13 February 2017 2,673

At the forthcoming Annual General Meeting, a first and final single-tier dividend of 0.167 sen per ordinary share in respectof the financial year ended 31 August 2017 will be proposed for shareholders' approval. The financial statements for thecurrent financial year do not reflect the proposed dividend. Such dividend, if approved by the shareholders, will beaccounted for in equity as an appropriate of retained profits for the financial year ending 31 August 2018.

DIRECTORS

The names of the Directors of the Company in office since the beginning of the financial year to the date of this report are:

Professor Emeritus Dato’ Dr. Khalid Bin Abdul KadirDato’ Dr. Tan Kee KwongGary Ho Kuat FoongClaire Lee Suk LengRoy Quek Hong ShengKan Kheong NgFreddie Heng Kim ChuanDr. Chan Boon Kheng (resigned on 23 January 2017)

DIRECTORS'REPORT


DIRECTORS (cont’d)

Other than Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir and Roy Quek Hong Sheng, the names of the Directors ofthe Company's subsidiaries since the beginning of the financial year to the date of this report are:

Wong Yu CheeWoon Ming Ming (appointed on 30 June 2017)Wan Nadiah Binti Wan Mohd Abdullah Yaakob (appointed on 30 June 2017)Lam Sook Mui (resigned on 30 June 2017)

DIRECTORS' BENEFITS

Neither at the end of the financial year, nor at any time during the financial year, did there subsist any arrangement towhich the Company was a party, whereby the Directors might acquire benefits by means of the acquisition of shares inor debentures of the Company or any other body corporate, other than those arising from the share options granted underthe Company's Employees' Share Option Scheme ("ESOS").

Since the end of the previous financial period, no Director has received or become entitled to receive a benefit (other thanbenefits included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in Note10 to the financial statements) by reason of a contract made by the Company or a related corporation with any Director orwith a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

INDEMNITY AND INSURANCE COSTS

During the current financial year, the total amount of indemnity coverage and insurance premium paid for Directors andOfficers of the Company are RM15,000,000 and RM25,450 respectively.

DIRECTORS' INTERESTS

According to the register of Directors' shareholdings, the interests of Directors in office at the end of the financial year inordinary shares, warrants and options over ordinary shares in the Company during the financial year were as follows:

Interest in the Company Number of ordinary shares Balance at Balance at 1.9.2016 Bought Sold 31.8.2017

Direct interests:Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir 500,000 - - 500,000

Deemed interests:Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir 200,000 - - 200,000

Number of warrants Balance at Bonus Balance at 1.9.2016 issue Sold 31.8.2017

Direct interests: Professor Emeritus Dato’Dr. Khalid Bin Abdul Kadir 250,000 - - 250,000

Deemed interests:Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir 100,000 - - 100,000

DIRECTORS'REPORT


DIRECTORS' INTERESTS (cont’d)

Number of options over ordinary shares Option price RM 1.9.2016 Granted Exercised Lapsed 31.8.2017

Professor Emeritus Dato’ Dr. Khalid Bin Abdul Kadir 0.75 3,500,000 - - - 3,500,000 Dato’ Dr. Tan Kee Kwong 0.75 2,000,000 - - - 2,000,000 Gary Ho Kuat Foong 0.75 2,000,000 - - - 2,000,000 Claire Lee Suk Leng 0.75 2,000,000 - - - 2,000,000 Roy Quek Hong Sheng 0.94 - 3,500,000 - - 3,500,000 Kan Kheong Ng 0.94 - 2,000,000 - - 2,000,000

None of the other Directors in office at the end of the financial year had any interest in the ordinary shares, warrants andoptions over ordinary shares in the Company or its related corporations during the financial year.

ISSUES OF SHARES AND DEBENTURES

During the financial year, the issued and paid-up ordinary share capital of the Company was increased by RM836,220from RM173,289,976 to RM174,126,196 by way of issuance of 3,306,000 new ordinary shares pursuant to the following:

(a) issuance of 2,578,000 new ordinary shares pursuant to exercise of the ESOS at par value of RM0.10 each at anexercise price of RM0.75 per ordinary share prior to implementation of the Companies Act 2016;

(b) issuance of 72,850 new ordinary shares pursuant to the exercise of warrants at par value of RM0.10 each at theexercise price of RM0.75 per ordinary share prior to the implementation of the Companies Act 2016;

(c) issuance of 645,400 new ordinary shares pursuant to exercise of the ESOS at the exercise price of RM0.75 per ordinaryshare since the implementation of the Companies Act 2016; and

(d) issuance of 9,750 new ordinary shares pursuant to the exercise of warrants at the exercise price of RM0.75 perordinary share since the implementation of the Companies Act 2016.

The new ordinary shares issued during the financial year rank pari passu in all respects with the existing ordinary sharesof the Company.

EMPLOYEES' SHARE OPTION SCHEME (‘ESOS’)

The Company has an ESOS plan for the granting of non-transferable options that are to be settled by physical delivery ofthe ordinary shares of the Company to eligible Directors and employees.

The salient features and other terms of the ESOS plan are disclosed in Note 23(b) to the financial statements.

During the financial year:

• The Company granted 5,500,000 share options to the two Directors. These options expire on 28 May 2020 and areexercisable over the vesting periods of 3.34 years; and

• The Company granted 1,900,000 share options to eligible employees. These options expire on 28 May 2020 and areexercisable over the vesting periods of 3.34 years.

DIRECTORS'REPORT


EMPLOYEES' SHARE OPTION SCHEME (‘ESOS’) (cont’d)

Details of all the options over the ordinary shares of the Company are as follows:

Number of options over ordinary shares Exercisable Option price 1.9.2016 Granted Exercised Lapsed 31.8.2017 31.8.2017 RM ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 Grant date

11 June 2015 0.75 13,000 - (1,400) (2,100) 9,500 5,140 28 August 2015 0.75 9,825 - (1,823) (1,189) 6,813 3,820 25 January 2017 0.94 - 7,400 - (55) 7,345 1,313

22,825 7,400 (3,223) (3,344) 23,658 10,273

WARRANTS 2015/2019

The salient features and other terms of the warrants are disclosed in Note 23(c) to the financial statements.

Details of the warrants exercised/lapsed during the financial year/period are as follow:

Number of warrants 2017 2016 ‘000 ‘000

At the beginning of financial year/period 866,427 - Issuance of warrants pursuant to acquisition of subsidiary - 866,427 Less: Exercised (83) -

At the end of financial year/period 866,344 866,427

OTHER STATUTORY INFORMATION

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Companywere 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 ofallowance for doubtful debts and satisfied themselves there all known bad debts had been written off and thatadequate allowance has been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting recordsin the ordinary course of business had been written down to an amount which they might be expected so torealise.

(b) At the date of this report, the Directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the allowance for doubtful debts inadequate to anysubstantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the Directors are not aware of any circumstances which have arisen which would renderadherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading orinappropriate.

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

DIRECTORS'REPORT

DIRECTORS'REPORT


OTHER STATUTORY INFORMATION (cont’d)

(e) As at the date of this report, there does not exist:

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

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

(f) In the opinion of the Directors:

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

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

AUDITORS AND AUDITORS' REMUNERATION

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Auditors' remuneration are disclosed in Note 8 to the financial statements.

INDEMNIFICATION OF AUDITORS

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms ofits audit engagement against claims by third parties arising from the audit (for an unspecified amount). No payment hasbeen paid to indemnify Ernst & Young during or since the financial year.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 19 December 2017.

Gary Ho Kuat Foong Roy Quek Hong Sheng

STATUTORYDECLARATION


We, Gary Ho Kuat Foong and Roy Quek Hong Sheng, being two of the Directors of TMC Life Sciences Berhad, do herebystate that, in the opinion of the Directors, the accompanying financial statements set out on pages 64 to 126 are drawnup in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and therequirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Groupand of the Company as at 31 August 2017 and of their financial performance and cash flows for the financial year thenended.

The information set out in Note 33 on page 127 to the financial statements have been prepared in accordance with theGuidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of DisclosurePursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 19 December 2017.

Gary Ho Kuat Foong Roy Quek Hong Sheng

I, Wong Yu Chee, being the Officer primarily responsible for the financial management of TMC Life Sciences Berhad, dosolemnly and sincerely declare that the accompanying financial statements and supplementary information set out onpages 64 to 127 are to the best of my knowledge and belief, correct and I make this solemn declaration conscientiouslybelieving the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by the abovenamed Wong Yu Cheeat Petaling Jayaon 19 December 2017 Wong Yu Chee

Before me,

STATEMENT BYDIRECTORS

PURSUANT TO SECTION 251(1)(B) OF THE COMPANIES ACT 2016

PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016


Report on the audit of the financial statements

Opinion

We have audited the financial statements of TMC Life Sciences Berhad, which comprise the statements of financial positionas at 31 August 2017 of the Group and of the Company, and the statements of comprehensive income, statements ofchanges in equity and statements of cash flows of the Group and of the Company for the financial year then ended, andnotes to the financial statements, including a summary of significant accounting policies, as set out on pages 64 to 127.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group andof the Company as at 31 August 2017, and of their financial performance and cash flows for the financial year then endedin accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and therequirements of the Companies Act 2016 in Malaysia.

Basis for opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards onAuditing. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit ofthe financial statements section of our report. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit 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, Conductand Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board forAccountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethicalresponsibilities in accordance with the By-Laws and the IESBA Code.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of thefinancial statements of the Group and of the Company for the current year. These matters were addressed in the contextof 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. For each matter below, our description of how our auditaddressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the financial statementssection of our report, including in relation to these matters. Accordingly, our audit included the performance of proceduresdesigned to respond to our assessment of the risks of material misstatement of the financial statements. The results of ouraudit procedures, including the procedures performed to address the matters below, provide the basis of our audit opinionon the accompanying financial statements.

INDEPENDENTAUDITORS’ REPORTTO THE MEMBERS OF TMC LIFE SCIENCES BERHAD

INDEPENDENTAUDITORS’ REPORT


Key risk

Revenue recognition

Refer to Notes 2.20 and 4 to the financial statements.

Revenue recognised in respect of hospital operationsand sales of pharmaceutical products for the year ended31 August 2017 which amounted to approximatelyRM150 million, represented about 98% of total revenueof the Group. The Group relies heavily on informationtechnology system in accounting for its revenue fromhospital operations and sales of pharmaceuticalproducts. Such information system processes largevolumes of data with combination of different productsand services, which consist of individually low valuetransactions.

We identified revenue recognition in respect of hospitaloperations and sales of pharmaceutical products to beas an area of focus as we consider the high volume oftransactions for numerous types of products andservices to be a possible cause of higher risk of materialmisstatement. Specifically, we focused our audit effortsto determine the possibility of overstatement of revenue.

Impairment assessment of goodwill

Refer to Notes 3.2(b) and 15(a) to the financialstatements.

As at 31 August 2017, the carrying amount of goodwillrecognised by the Group amounted to RM193 million,representing 37% and 25% of the Group's total noncurrent asset and total assets respectively. This goodwillrelates to a subsidiary principally engaged in healthcareservices. The Group is required to perform annualimpairment assessment of the cash generating units("CGU") or groups of CGUs to which this goodwill hasbeen allocated.

The Group estimated the recoverable amount of its CGUto which the goodwill is allocated based on value-in-use("VIU"). Estimating the VIU involves estimating the futurecash inflows and outflows to be derived from the CGUand discounting it at an appropriate discount rate.

We identified this as our area of audit focus as theimpairment assessment involves determining therecoverable amount of the CGU using a discountedcash flow approach which is complex and highlyjudgemental. Specifically, we focused on the assumptionsin respect of revenue growth rate (including long-termgrowth rate), gross profit margin and discount rate.

Our audit response

In addressing this area of focus, we performed, amongstothers, the following procedures:

• We obtained an understanding of the management'sinternal controls over the timing and amount of revenuerecognised;

• We tested the relevant internal controls in place to addresscompleteness and accuracy of revenue recognisedincluding timely updating of approved billing rate changesin the system. We also involved our information technologyspecialist to test the operating effectiveness of automatedcontrols over the billing system;

• We tested the accuracy of the data interface between thebilling system and the general ledger;

• We inspected documents which evidenced the renderingof services to customers; and

• We tested the documentary evidence to establish whethertransactions were recorded in the correct accountingperiod.

In addressing this area of focus, we performed, amongstothers, the following procedures:

• We obtained an understanding of the relevant internalcontrols over estimating the recoverable amount of theCGUs;

• We evaluated management’s key assumptions on revenuegrowth rate (including long-term growth rate) and grossprofit margin, by taking into consideration the current andexpected future economic conditions. We also comparedthese key assumptions against past actual outcomes of asubsidiary of the Group operating in similar activity; and

• We assessed the reasonableness of the discount rate usedand whether the rate used reflects the current marketassessments of the time value of money and the risksspecific to the asset is the return that investors wouldrequire if they were to choose an investment that wouldgenerate cash flows of amounts, timing and risk profileequivalent to those that the entity expects to derive fromthe CGU.

We also evaluated the adequacy of the Group’s disclosuresof each key assumption on which the Group has based itscash flow projections. Key assumptions are those to which therecoverable amount is most sensitive, as disclosed in Note15(a) to the financial statements.

Report on the audit of the financial statements (cont’d)

Key audit matters (cont’d)

There are no key audit matters for the company for the financial year. The key audit matters for the Group for the financialyear are described below are as follow:

TO THE MEMBERS OF TMC LIFE SCIENCES BERHAD



Information other than the financial statements and auditors’ report thereon

The Directors of the Company are responsible for the other information. The other information comprises the informationincluded in the Group's Annual Report, but does not include the financial statements of the Group and of the Company andour auditors’ report thereon, which we obtained prior to the date of this auditors' report.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we donot 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 otherinformation and, in doing so, consider whether the other information is materially inconsistent with the financial statements ofthe 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 on the other information that we obtained prior to the date of this auditors' report,we conclude that there is a material misstatement of this other information, we are required to report that fact. We havenothing 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 Companythat give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial ReportingStandards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internalcontrol as the Directors determine is necessary to enable the preparation of financial statements of the Group and of theCompany 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 theGroup's and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Companyor 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 Companyas a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includesour opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordancewith approved standards on auditing in Malaysia and International Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of thesefinancial 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 evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, 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 appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and of theCompany’s internal control.

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

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





Auditors’ responsibilities for the audit of the financial statements (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 theunderlying 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 withinthe Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervisionand 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 significantaudit findings, including any significant deficiencies in internal control that we identify during our audit.

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

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

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which wehave not acted as auditors, are disclosed in Note 16 to the financial statements.

Other reporting responsibilities

The supplementary information set out in Note 33 to the financial statements on page 127 is disclosed to meet the requirementof Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for thepreparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realisedand Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad ListingRequirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa MalaysiaSecurities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance withthe MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Ng Kim LingAF: 0039 No. 3236/04/18 (J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia19 December 2017




Group Company 1.9.2016 1.6.2015 1.9.2016 1.6.2015 to to to to Note 31.8.2017 31.8.2016 31.8.2017 31.8.2016 RM'000 RM'000 RM'000 RM'000

Revenue 4 151,712 161,507 5,000 2,500 Cost of sales 5 (52,208) (55,740) - -

Gross profit 99,504 105,767 5,000 2,500 Other income 6 8,455 10,919 6,467 8,783 Administrative expenses (77,717) (87,733) (2,731) (3,719)Selling and marketing expenses (1,710) (1,822) (57) (12)Other expenses (1,308) (1,064) (1,609) - Finance costs 7 (85) (126) - -

Profit before tax 8 27,139 25,941 7,070 7,552 Income tax expense 11 (1,105) (5,176) (1,340) (1,841)

Profit for the financial year/period 26,034 20,765 5,730 5,711

Other comprehensive loss that may reclassify to profit or loss in subsequent periods (net of tax):

Foreign currency translation (34) (46) - -

Total comprehensive income for the financial year/period 26,000 20,719 5,730 5,711

Profit attributable to owners of the parent 26,034 20,765 5,730 5,711

Total comprehensive income for the financial year/period attributable to owners of the parent 26,000 20,719 5,730 5,711

Earnings per share unit attributable to owners of the parent (sen):

Basic 12 1.50 1.22 Diluted 12 1.38 1.22

STATEMENTS OFCOMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 AUGUST 2017

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


Group Company Note 2017 2016 2017 2016 RM'000 RM'000 RM'000 RM'000 Restated

Assets

Non-current assetsProperty, plant and equipment 14 326,361 321,487 - - Intangible assets 15 194,410 194,095 - - Investment in subsidiaries 16 - - 483,978 483,687

520,771 515,582 483,978 483,687

Current assetsInventories 17 8,247 6,867 - - Trade and other receivables 18 33,463 30,644 26,180 14,721 Tax recoverable 52 47 2 - Cash and bank balances 19 206,989 204,558 165,868 171,051

248,751 242,116 192,050 185,772

Total assets 769,522 757,698 676,028 669,459

Current liabilitiesTrade and other payables 20 42,603 56,316 2,350 1,619 Borrowings 21 93 85 - - Income tax payable 57 1,070 - 989

42,753 57,471 2,350 2,608

Net current assets 205,998 184,645 189,700 183,164

Non-current liabilitiesBorrowings 21 1,709 1,804 - - Deferred tax liabilities 22 10,636 11,096 - -

12,345 12,900 - -

Total liabilities 55,098 70,371 2,350 2,608

Net assets 714,424 687,327 673,678 666,851

Represented by:

Equity attributable to owners of the parentShare capital 23 621,699 173,290 621,699 173,290 Reserves 24 49,456 494,129 49,451 494,090 Retained profits/ (accumulated loss) 25 43,269 19,908 2,528 (529)

Total equity 714,424 687,327 673,678 666,851

STATEMENTS OFFINANCIAL POSITION

AS AT 31 AUGUST 2017



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CONSOLIDATED STATEMENT OFCHANGES IN EQUITY


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COMPANY STATEMENT OFCHANGES IN EQUITY

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COMPANY STATEMENT OFCHANGES IN EQUITY



STATEMENTS OFCASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 AUGUST 2017

Group Company 1.9.2016 1.6.2015 1.9.2016 1.6.2015 to to to to 31.8.2017 31.8.2016 31.8.2017 31.8.2016 RM'000 RM'000 RM'000 RM'000

Operating activities

Profit before tax 27,139 25,941 7,070 7,552 Adjustments for: Impairment loss on investment in a subsidiary - - 1 - Impairment losses on:

- trade receivables 1,294 1,062 - - - other receivables - - 1,608 -

Reversal of impairment losses on:- trade receivables - (3) - - - other receivables - - - (45)

Amortisation of intangible assets 225 - - - Depreciation of property, plant and equipment 11,022 11,739 - - Property, plant and equipment written off 4 2 - - Net loss/(gain) on disposal of

property, plant and equipment 10 (20) - - Interest expense 85 126 - - Interest income (7,550) (9,526) (6,465) (8,738) Net unrealised loss/(gain) on foreign exchange 47 (159) - - Dividend income - - (5,000) (2,500) Fair value charges on share options granted under ESOS 1,290 1,694 998 1,271

Operating profit/(loss) before changes in working capital carried forward 33,566 30,856 (1,788) (2,460)

Changes in working capital: Inventories (1,380) (355) - - Receivables (4,113) (3,579) (13,067) (6,927) Payables (15,506) 5,374 731 351 Cash flows from/(used in) operations 12,567 32,296 (14,124) (9,036)Interest paid (85) (126) - - Income taxes paid (2,583) (899) (2,331) (825)

Net cash flows from/(used in) operating activities 9,899 31,271 (16,455) (9,861)

Investing activities

Acquisition of a subsidiary, net of cash acquired - 1,149 - - Uplift/(deposit) placed with financial institutions with original maturity of more than three months 6,525 (104,654) 6,749 (100,580)Withdrawal/(placement) of deposits with licensed banks 1 (4) - - Interest received 7,550 9,526 6,465 8,738 Proceeds from disposals of property, plant and equipment - 25 - - Purchase of property, plant and equipment (14,142) (25,157) - - Purchase of intangible assets (540) - - - Dividend from a subsidiary - - 5,000 2,500 Subscription for ordinary shares in a subsidiary - - - (1)

Net cash flows (used in)/from investing activities (606) (119,115) 18,214 (89,343)



Financing activities

Dividends paid (2,673) (2,425) (2,673) (2,425)Proceeds from ordinary shares issued pursuant to: - warrants exercised 62 - 62 - - ESOS exercised 2,418 34 2,418 34 Share issuance expenses - (1,364) - (1,364)Repayments of: - obligations under finance lease (21) (25) - - - term loan (66) (66) - -

Net cash flows used in financing activities (280) (3,846) (193) (3,755)

Net increase/(decrease) in cash and cash equivalents 9,013 (91,690) 1,566 (102,959)

Effects of exchange rate changes (56) (44) - -

Cash and cash equivalents at the beginning of financial year/period 49,871 141,605 22,271 125,230

Cash and cash equivalents at the end of financial year/period (Note 19) 58,828 49,871 23,837 22,271


STATEMENTS OFCASH FLOWS



1. Corporate information

TMC Life Sciences Berhad ("the Company") is a public limited liability company, incorporated and domiciled inMalaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad ("Bursa Securities"). The registeredoffice of the Company is located at 10th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee 50250 Kuala Lumpur.The principal place of business of the Company is located at C-13-09 Sunway Nexis, No.1, Jalan PJU 5/1, DataranSunway, Kota Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan.

The immediate and ultimate holding companies are Sasteria (M) Pte. Ltd. and Sasteria Pte. Ltd. respectively, both ofwhich are incorporated in The Republic of Singapore.

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosedin Note 16 to the financial statements.

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

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of theDirectors on 19 December 2017.

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with MalaysianFinancial Reporting Standards ("MFRS"), International Financial Reporting Standards ("IFRS") and the requirementsof the Companies Act 2016 (the "Act") in Malaysia. At the beginning of the current financial year, the Group andthe Company adopted new and amended MFRSs which are mandatory for annual financial periods beginningon or after 1 January 2016 as described fully in Note 2.2.

The financial statements have been prepared on the historical cost basis except otherwise disclosed in theaccounting policies below.

The financial statements are presented in Ringgit Malaysia ("RM"), and all values are rounded to the nearestthousand (RM'000) except when otherwise indicated.

2.2 Changes in accounting policies

On 1 September 2016, the Group and the Company adopted the following new and amended MFRSs which areeffective for annual financial periods beginning on or after 1 January 2016.

Description

• Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation• Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operation• Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the Consolidation Exception• Amendments to MFRS 127: Equity Method in Separate Financial Statements• MFRS 14: Regulatory Deferral Accounts• Amendments to MFRS 107: Disclosures Initiatives• Amendments to MFRS 112: Recognition of Deferred Tax for Unrealised Losses• Annual Improvements to MFRSs 2014 - 2016 Cycle

Adoption of the above standards did not have any material effect on the financial performance or position of theGroup and of the Company.

NOTES TO THEFINANCIAL STATEMENTS31 AUGUST 2017


2. Summary of significant accounting policies (cont’d)

2.3 Standards and interpretation issued but not yet effective

The standards and interpretation that are issued but not yet effective up to the date of issuance of the Group’sand of the Company’s financial statements are disclosed below. The Group and the Company intend to adoptthese standards and interpretation, if applicable, when they become effective.

Effective for annual periods beginning

Description on or after

• MFRS 107: Disclosures Initiatives (Amendments to MFRS 107) 1 January 2017• MFRS 112: Recognition of Deferred Tax for Unrealised Losses (Amendments to MFRS 112) 1 January 2017• Annual Improvements to MFRSs 2014 - 2016 Cycle (Amendments to MFRS 12) 1 January 2017• Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018• MFRS 9: Financial Instruments 1 January 2018• MFRS 15: Revenue from Contracts with Customers 1 January 2018• Amendments to MFRS 140: Transfers of Investment Property 1 January 2018• IC Interpretation 22: Foreign Currency Transactions and Advance Consideration 1 January 2018• Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018• Annual Improvements to MFRSs 2014 - 2016 Cycle (MFRS 128: Investments in Associates and Joint Ventures) 1 January 2018• MFRS 16: Leases 1 January 2019• IC Interpretation 23: Uncertainty over Income Tax Treatments 1 January 2019• MFRS 17: Insurance Contracts 1 January 2021• Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

The Directors expect that the adoption of the above standards and interpretation will have no material impact onthe financial statements in the period of initial application except as discussed below:

MFRS 9: Financial Instruments

In November 2014, Malaysian Accounting Standards Board ("MASB") issued the final version of MFRS 9: FinancialInstruments which reflects all phases of the financial instruments project and replaces MFRS 139: FinancialInstruments: Recognition and Measurement and all previous versions of MFRS 9. The standard introduces newrequirements for classification and measurement, impairment and hedge accounting. MFRS 9 is effective forannual periods beginning on or after 1 January 2018, with early application permitted. Retrospective applicationis required, but comparative information is not compulsory. The adoption of MFRS 9 will have an effect on theclassification and measurement of the Group’s and of the Company's financial assets, but no impact on theclassification and measurement of the Group’s and of the Company's financial liabilities.

MFRS 15: Revenue from Contracts with Customers

MFRS 15 establishes a new five-step models that will apply to revenue arising from contracts with customers.MFRS 15 will supersede the current revenue recognition guidance including MFRS 118: Revenue, MFRS 111:Construction Contracts and the related interpretations when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of promisedgoods or services to customers in an amount that reflects the consideration to which the entity expects to beentitled in exchange for those goods or services.

31 AUGUST 2017

NOTES TO THEFINANCIAL STATEMENTS



2.3 Standards and interpretation issued but not yet effective (cont’d)

MFRS 15: Revenue from Contracts with Customers (cont’d)

Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when "control"of the goods or services underlying the particular performance obligation is transferred to the customer.

Either a full or modified retrospective application is required for annual periods beginning on or after 1 January2018 with early adoption permitted. The Group and the Company are currently assessing the impact of adoptingMFRS 15 and plan to adopt the new standard on the required effective date.

MFRS 16: Leases

MFRS 16 will replace MFRS 117: Leases, IC Interpretation 4: Determining Whether an Arrangement contains aLease, IC Interpretation 115: Operating Lease-Incentives and IC Interpretation 127: Evaluating the Substance ofTransactions Involving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition,measurement, presentation and disclosure of leases and requires lessees to account for all leases under a singleon-balance sheet model similar to the accounting for finance leases under MFRS 117.

At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an assetrepresenting the right to use the underlying asset during the lease term. Lessees will be required to recogniseinterest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors willcontinue to classify all leases using the same classification principle as in MFRS 117 and distinguish betweentwo types of leases: operating and finance leases.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted butnot before an entity applies MFRS 15. A lessee can choose to apply the standard using either a full retrospectiveor a modified retrospective approach. The Group and the Company are currently assessing the impact of adoptingMFRS 16 and plan to adopt the new standard on the required effective date.

2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries.Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with theinvestee and has the ability to affect those returns through its power over the investee.

Specifically, the Group controls an investee if, and only if, the Group has:

(i) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of theinvestee);

(ii) exposure, or rights, to variable returns from its investment with the investee; and

(iii) the ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption andwhen the Group has less than a majority of the voting or similar rights of an investee, the Group considers allrelevant facts and circumstances in assessing whether it has power over an investee, including:

(i) the contractual arrangement with the other vote holders of the investee;

(ii) rights arising from other contractual arrangements; and

(iii) the Group’s voting rights and potential voting rights.


31 AUGUST 2017



2.4 Basis of consolidation (cont’d)

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there arechanges to one or more of the three elements of control. Consolidation of a subsidiary begins when the Groupobtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,income and expenses of a subsidiary acquired or disposed of during the financial year are included in theconsolidated financial statements from the date the Group gains control until the date the Group ceases to controlthe subsidiary.

Profit or loss and each component of other comprehensive income ("OCI") are attributed to the owners of theparent of the Group and to the non-controlling interests, even if this results in the non-controlling interests havinga deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring theiraccounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity,income, expenses and cash flows relating to transactions between members of the Group are eliminated in fullon consolidation except for unrealised losses which are not eliminated if there are indications of impairment.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equitytransaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit orloss. Any investment retained is recognised at fair value.

Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measuredas the aggregate of the consideration transferred measured at acquisition date's fair value and the amount ofany non-controlling interests in the acquiree. Acquisition-related costs are expensed as incurred and included inadministrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriateclassification and designation in accordance with the contractual terms, economic circumstances and pertinentconditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts bythe acquiree.

If the business combination is achieved in stages, any previously held equity interest is remeasured at itsacquisition date's fair value and any resulting gain or loss is recognised in profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisitiondate. Contingent consideration classified as an asset or liability that is a financial instrument and within the scopeof MFRS 139: Financial Instruments: Recognition and Measurement, is measured at fair value with changes infair value recognised either in profit or loss or as a charge to OCI. If the contingent consideration is not within thescope of MFRS 139, it is measured in accordance with the appropriate MFRS. Contingent consideration that isclassified as equity is not remeasured and subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the fair value of the considerationtransferred and the amount recognised for non-controlling interests, and any previous interest held, over the fairvalue of the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired isin excess of the aggregate fair value of the consideration transferred, the Group re-assesses whether it hascorrectly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures usedto measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess ofthe fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised inprofit or loss on acquisition date.


31 AUGUST 2017



2.5 Transactions with non-controlling interest

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of theparent of the Group, and is presented separately in the consolidated statement of comprehensive income and withinequity in the consolidated statement of financial position, separately from equity attributable to owners of the parent.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control areaccounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any differencebetween the amount by which the non-controlling interest is adjusted and the fair value of the consideration paidor received is recognised directly in equity and attributed to owners of the parent.

Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if it results in adeficit balance.

2.6 Subsidiaries

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost lessimpairment losses. On disposal of such investments, the difference between net disposal proceeds and theircarrying amounts is included in profit or loss.

2.7 Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairmentlosses, if any. Such cost includes the cost of replacing part of the property, plant and equipment. When significantparts of plant and equipment are required to be replaced at intervals, the Group and the Company depreciatethem separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost isrecognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria aresatisfied. All other repair and maintenance costs are recognised in profit or loss as incurred. The present valueof the expected cost for the decommissioning of an asset after its use is included in the cost of the respectiveasset if the recognition criteria for a provision are met.

Freehold land has an unlimited useful life and is not depreciated. Capital work-in-progress are also notdepreciated as these assets are not available for use. Depreciation of buildings constructed on leasehold landis provided for on a straight-line basis to write off the cost of the asset to its residual value over the shorter of theestimated useful life of 50 years or the respective remaining lease periods of the leasehold land.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:

Long term leasehold land 99 yearsBuildings 2%Electrical and mechanical equipment 10%Motor vehicles 20%Medical equipment 10% - 20%Furniture and fittings 10% - 15%Renovation 10% - 15%Office equipment and computers 10% - 33 1/3%

The carrying values of property, plant and equipment are reviewed for impairment when events or changes incircumstances indicate that the carrying value may not be recoverable.

An item of property, plant and equipment and any significant part initially recognised is derecognised upondisposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposalon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carryingamount of the asset) is included in the profit or loss when the asset is derecognised.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed ateach financial year end, and adjusted prospectively, if appropriate.


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2.8 Intangible assets

(a) Goodwill

Goodwill recognised in a business combination is an asset at the acquisition date and is initially measuredat cost being the excess of the sum of the consideration transferred, the amount of any non-controlling interestin the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity over netof the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, afterreassessment, the interest of the Group in the fair value of the acquiree’s identifiable net assets exceeds thesum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fairvalue of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognisedimmediately in profit or loss as a bargain purchase gain.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit isdisposed of, the goodwill associated with the disposed operation is included in the carrying amount of theoperation when determining the gain or loss on disposal. Goodwill disposed in these circumstances ismeasured based on the relative values of the disposed operation and the portion of the cash-generating unitretained.

(b) Other intangible assets

Intangible assets other than goodwill acquired separately are measured on initial recognition at cost. Thecost of intangible assets acquired in a business combination is represent fair value at the date of acquisition.Following initial recognition, intangible assets are carried at cost less any accumulated amortisation andaccumulated impairment losses. Internally generated intangibles, excluding capitalised development costs,are not capitalised and the related expenditure is reflected in profit or loss in the period in which theexpenditure is incurred.

The useful life of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the expected useful life and assessed for impairmentwhenever there is an indication that the intangible asset may be impaired. The amortisation period and theamortisation method for an intangible asset with a finite useful life are reviewed at least at the end of eachreporting period. Changes in the expected useful life or the expected pattern of consumption of futureeconomic benefits embodied in the asset are considered to modify the amortisation period or method, asappropriate, and are treated as changes in accounting estimates. The amortisation expense on intangibleassets with finite lives is recognised in the statement of comprehensive income in the expense category thatis consistent with the function of the intangible assets.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, eitherindividually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually todetermine whether the indefinite life continues to be supportable. If not, the change in useful life from indefiniteto finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference betweenthe net disposal proceeds and the carrying amount of the asset and are recognised in the statement ofcomprehensive income when the asset is derecognised.


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2.8 Intangible assets (cont’d)

(b) Other intangible assets (cont’d)

Computer software

Computer software is measured initially at cost. Following initial acquisition, computer software is measuredat cost less any accumulated amortisation and accumulated impairment losses.

The useful life of computer software is assessed to be finite. Computer software is amortised on a straight-line basis over the estimated useful life at an annual rate of 10% and assessed for impairment wheneverthere is an indication that it may be impaired. The amortisation period and the amortisation method forcomputer software with finite useful life is reviewed at least at each financial year end. Changes in theexpected useful life or the expected pattern of consumption of future economic benefits embodied in theasset is accounted for by changing the amortisation period or method, as appropriate, and is treated aschanges in accounting estimates. The amortisation expense on computer software with finite life isrecognised in profit or loss.

Gains or losses arising from derecognition of computer software are measured as the difference betweenthe net disposal proceeds and the carrying amount of the asset and is recognised in profit or loss when theasset is derecognised.

2.9 Inventories

Inventories are stated at the lower of cost, which is determined on the weighted average basis, and net realisablevalue. Cost includes expenditure incurred in bringing inventories to their present location and condition. Netrealisable value is based on estimated selling price less any further costs expected to be incurred to completionand disposal.

2.10 Impairment of non-financial assets

The Group and the Company assess, at each reporting date, whether there is an indication that an asset maybe impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group andthe Company estimate the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’sor cash generating unit's ("CGU") fair value less costs of disposal and its value in use. The recoverable amountis determined for an individual asset, unless the asset does not generate cash inflows that are largelyindependent of those from other assets or groups of assets. When the carrying amount of an asset or CGUexceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-taxdiscount rate that reflects current market assessments of the time value of money and the risks specific to theasset. In determining fair value less costs of disposal, recent market transactions are taken into account. If nosuch transactions can be identified, an appropriate valuation model is used. These calculations are corroboratedby valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

The Group and the Company base their impairment calculation on detailed budgets and forecast calculations,which are prepared separately for each of the Group’s and of the Company's CGUs to which the individualassets are allocated. These budgets and forecast calculations generally cover a period of five years. For longerperiods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the statementof comprehensive income in expense categories consistent with the function of the impaired asset, except forproperties previously revalued with the revaluation taken to OCI. For such properties, the impairment isrecognised in OCI up to the amount of any previous revaluation.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is anindication that previously recognised impairment losses no longer exist or have decreased. If such indication


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

exists, the Group and the Company estimate the asset’s or CGU’s recoverable amount. A previously recognisedimpairment loss is reversed only if there has been a change in the assumptions used to determine the asset’srecoverable amount since the last impairment loss was recognised. The reversal is limited so that the carryingamount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would havebeen determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.Such reversal is recognised in the statement of comprehensive income unless the asset is carried at a revaluedamount, in which case, the reversal is treated as a revaluation increase.

Goodwill is tested for impairment annually or when circumstances indicate that the carrying value may beimpaired.

Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs)to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, animpairment loss is recognised. Impairment loss relating to goodwill cannot be reversed in future periods.

Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level, as appropriate,and when circumstances indicate that the carrying value may be impaired.

2.11 Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loansand receivables, held-to-maturity investments, available-for-sale ("AFS") financial assets, or as derivativesdesignated as hedging instruments in an effective hedge, as appropriate. All financial assets are recognisedinitially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transactioncosts that are attributable to the acquisition of the financial asset.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulationor convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that theGroup and the Company commit to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement financial assets are classified in four categories:

- Financial assets at fair value through profit or loss;- Loans and receivables;- Held-to-maturity investments; and- AFS financial assets.

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

Financial assets at fair value through profit or loss include financial assets held for trading and financialassets designated upon initial recognition at fair value through profit or loss. Financial assets are classifiedas held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives,including separated embedded derivatives, are also classified as held for trading unless they are designatedas effective hedging instruments as defined by MFRS 139. Financial assets at fair value through profit orloss are carried in the statement of financial position at fair value with net changes in fair value presentedas finance costs (negative net changes in fair value) or finance income (positive net changes in fair value)in the statement of comprehensive income.


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2.11 Financial assets (cont’d)

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. After initial measurement, such financial assets are subsequently measured atamortised cost using the effective interest rate ("EIR") method, less impairment. Amortised cost is calculatedby taking into account any discount or premium on acquisition and fees or costs that are an integral part ofthe EIR. The EIR amortisation is included in finance income in the statement of comprehensive income. Thelosses arising from impairment are recognised in the statement of comprehensive income in finance costsfor loans and in other operating expenses for receivables.

This category generally applies to trade and other receivables.

(c) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified asheld to maturity when the Group and the Company have the positive intention and ability to hold them tomaturity. After initial measurement, held to maturity investments are measured at amortised cost using theEIR, less impairment. Amortised cost is calculated by taking into account any discount or premium onacquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as financeincome in the statement of comprehensive income. The losses arising from impairment are recognised inthe statement of comprehensive income as finance costs.

(d) AFS financial assets

AFS financial assets include equity investments and debt securities. Equity investments classified as AFSare those that are neither classified as held for trading nor designated at fair value through profit or loss.Debt securities in this category are those that are intended to be held for an indefinite period of time andthat may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, AFS financial assets are subsequently measured at fair value with unrealisedgains or losses recognised in OCI and credited in the AFS reserve until the investment is derecognised, atwhich time the cumulative gain or loss is recognised in other operating income, or the investment isdetermined to be impaired, when the cumulative loss is reclassified from the AFS reserve to the statementof comprehensive income in finance costs. Interest earned whilst holding AFS financial assets is reportedas interest income using the EIR method.

The Group and the Company evaluate whether the ability and intention to sell their AFS financial assets inthe near term is still appropriate. When, in rare circumstances, the Group and the Company are unable totrade these financial assets due to inactive markets, the Group and the Company may elect to reclassifythese financial assets if the management has the ability and intention to hold the assets for foreseeablefuture or until maturity.

For a financial asset reclassified from the AFS category, the fair value carrying amount at the date ofreclassification becomes its new amortised cost and any previous gain or loss on the asset that has beenrecognised in equity is amortised to profit or loss over the remaining life of the investment using the EIR.Any difference between the new amortised cost and the maturity amount is also amortised over theremaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then theamount recorded in equity is reclassified to the statement of comprehensive income.


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2.11 Financial assets (cont’d)

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)is primarily derecognised (i.e., removed from the Group’s and the Company's statements of financial position)when:

- the rights to receive cash flows from the asset have expired; or

- the Group and the Company have transferred its rights to receive cash flows from the asset or has assumedan obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group and the Company have transferred substantially all the risksand rewards of the asset, or (b) the Group and the Company have neither transferred nor retainedsubstantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group and the Company have transferred its rights to receive cash flows from an asset or has enteredinto a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards ofownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset,nor transferred control of the asset, the Group and the Company continue to recognise the transferred asset tothe extent of the Group’s and of the Company's continuing involvement. In that case, the Group and theCompany also recognise an associated liability. The transferred asset and the associated liability are measuredon a basis that reflects the rights and obligations that the Group and the Company have retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lowerof the original carrying amount of the asset and the maximum amount of consideration that the Group and theCompany could be required to repay.

2.12 Impairment of financial assets

The Group and the Company assess, at each reporting date, whether there is objective evidence that a financialasset or a group of financial assets is impaired. An impairment exists if one or more events that has occurredsince the initial recognition of the asset (an incurred ‘loss event’), has an impact on the estimated future cashflows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairmentmay include indications that the debtor or a group of debtors is experiencing significant financial difficulty,default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or otherfinancial reorganisation and observable data indicating that there is a measurable decrease in the estimatedfuture cash flows, such as changes in arrears or economic conditions that correlate with defaults.

(a) Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group and the Company first assess whether impairmentexists individually for financial assets that are individually significant, or collectively for financial assets thatare not individually significant. If the Group and the Company determine that no objective evidence ofimpairment exists for an individually assessed financial asset, whether significant or not, it includes the assetin a group of financial assets with similar credit risk characteristics and collectively assesses them forimpairment. Assets that are individually assessed for impairment and for which an impairment loss is, orcontinues to be, recognised are not included in a collective assessment of impairment.

The amount of any impairment loss identified is measured as the difference between the asset’s carryingamount and the present value of estimated future cash flows (excluding future expected credit losses thathave not yet been incurred). The present value of the estimated future cash flows is discounted at thefinancial asset’s original effective interest rate.


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2.12 Impairment of financial assets (cont’d)

(a) Financial assets carried at amortised cost (cont’d)

The carrying amount of the asset is reduced through the use of an allowance account and the loss isrecognised in the statement of comprehensive income. Receivables together with the associated allowanceare written off when there is no realistic prospect of future recovery and all collateral has been realised orhas been transferred to the Group and the Company. If, in a subsequent year, the amount of the estimatedimpairment loss increases or decreases because of an event occurring after the impairment was recognised,the previously recognised impairment loss is increased or reduced by adjusting the allowance account. Ifa write-off is later recovered, the recovery is credited to finance costs in the statement of comprehensiveincome.

(b) AFS financial assets

For AFS financial assets, the Group and the Company assess at each reporting date whether there isobjective evidence that an investment or a group of investments is impaired.

In the case of equity investments classified as AFS, objective evidence would include a significant orprolonged decline in the fair value of the investment below its cost. ‘Significant’ is evaluated against theoriginal cost of the investment and ‘prolonged’ against the period in which the fair value has been below itsoriginal cost. When there is evidence of impairment, the cumulative loss – measured as the differencebetween the acquisition cost and the current fair value, less any impairment loss on that investmentpreviously recognised in the statement of comprehensive income – is recycled from OCI and recognisedin the statement of comprehensive income. Impairment losses on equity investments are not reversedthrough profit or loss; increases in their fair value after impairment are recognised in OCI.

The determination of what is ‘significant’ or ‘prolonged’ requires judgement. In making this judgement, theGroup and the Company evaluate, among other factors, the duration or extent to which the fair value of aninvestment is less than its cost.

In the case of debt instruments classified as AFS, the impairment is assessed based on the same criteriaas financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulativeloss measured as the difference between the amortised cost and the current fair value, less any impairmentloss on that investment previously recognised in the statement of comprehensive income.

2.13 Cash and cash equivalents

Cash and bank balances comprise cash at banks and on hand and short-term deposits with a maturity of threemonths or less, which are subject to an insignificant risk of changes in value.

2.14 Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, asappropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,net of directly attributable transaction costs.

The Group’s and the Company's financial liabilities include trade and other payables, loans and borrowingsincluding financial guarantee contracts, if any.


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2.14 Financial liabilities (cont’d)

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

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

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financialliabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing inthe near term. This category also includes derivative financial instruments entered into by the Group or theCompany that are not designated as hedging instruments in hedge relationships as defined by MFRS 139.Separated embedded derivatives are also classified as held for trading unless they are designated aseffective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the statement of comprehensive income.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated atthe initial date of recognition, and only if the criteria in MFRS 139 are satisfied. The Group and the Companyhave not designated any financial liability as at fair value through profit or loss.

(b) Loans and borrowings

This is the category most relevant to the Group and the Company. After initial recognition, interest-bearingloans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and lossesare recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisationprocess.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees orcosts that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statementof comprehensive income.

This category generally applies to interest-bearing loans and borrowings.

(c) Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to bemade to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment whendue in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initiallyas a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of theguarantee. When it is probable that an outflow of resources embodying economic benefits would be requiredto settle the obligation and a reliable estimate can be made of the amount of the obligation. Subsequently,the liability is measured at the higher of the best estimate of the expenditure required to settle the presentobligation at the reporting date and the amount recognised less cumulative amortisation.

(d) Other financial liabilities

Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that areneither held for trading nor initially designated as at fair value through profit or loss.

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effectiveinterest method. Gains or losses on other financial liabilities are recognised in profit or loss when the financialliabilities are derecognised and through the amortisation process.


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2.14 Financial liabilities (cont’d)

(d) Other financial liabilities (cont’d)

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired.When an existing financial liability is replaced by another from the same lender on substantially different terms,or the terms of an existing liability are substantially modified, such an exchange or modification is treated as thederecognition of the original liability and the recognition of a new liability. The difference in the respective carryingamounts is recognised in the statement of comprehensive income.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statements of financialposition if there is a currently enforceable legal right to offset the recognised amounts and there is an intentionto settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.15 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarilytakes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost ofthe asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist ofinterest and other costs that the Group incur in connection with the borrowing of funds.

2.16 Provisions

Provisions are recognised when the Group and the Company have a present obligation (legal or constructive)as a result of a past event, it is probable that an outflow of resources embodying economic benefits will berequired to settle the obligation and a reliable estimate can be made of the amount of the obligation. When theGroup and the Company expect some or all of a provision to be reimbursed, for example, under an insurancecontract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtuallycertain. The expense relating to a provision is presented in the statement of comprehensive income net of anyreimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate thatreflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in theprovision due to the passage of time is recognised as a finance cost.

Provision for restoration costs are in respect of management's best estimate of the costs necessary to be incurredto restore rented premises. The initial estimated amount is capitalised as part of the cost for property, plant andequipment.

2.17 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of theCompany after deducting all of their liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs.Dividends on ordinary shares are recognised in equity in the period in which they are declared.


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2.18 Warrants

Warrants are classified as equity.

The issue of ordinary shares upon exercise of the warrants are treated as new subscription of ordinary sharesfor the consideration equivalent to the exercise price of the warrants.

Amount allocated in relation to the issuance of free warrants are credited to a warrants reserve which is non-distributable. Warrants reserve is transferred to the share premium account upon the exercise of warrants andthe warrants reserve in relation to the unexercised warrants at the expiry of the warrants period will be transferredto retained earnings.

2.19 Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of thearrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangementis dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset orassets, even if that right is not explicitly specified in an arrangement.

(a) As lessee

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transferssubstantially all the risks and rewards incidental to ownership to the Group are classified as a finance lease.

Finance leases are capitalised at the commencement of the lease at the inception date fair value of theleased asset or, if lower, at the present value of the minimum lease payments. Lease payments areapportioned between finance charges and reduction of the lease liability so as to achieve a constant rateof interest on the remaining balance of the liability. Finance charges are recognised in finance costs in thestatement of comprehensive income.

A leased asset is depreciated over the expected useful life of the asset. However, if there is no reasonablecertainty that the Group and the Company will obtain ownership by the end of the lease term, the asset isdepreciated over the shorter of the estimated useful life of the asset and the lease term.

An operating lease is a lease other than a finance lease. Operating lease payments are recognised as anoperating expense in the statement of comprehensive income on a straight-line basis over the lease term.

(b) As lessor

Leases in which the Group do not transfer substantially all the risks and rewards of ownership of the assetare classified as operating leases. Initial direct costs incurred in negotiating an operating lease are addedto the carrying amount of the leased asset and recognised over the lease term on the same bases as rentalincome. Contingent rents are recognised as revenue in the period in which they are earned.

2.20 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and tothe Company and the revenue can be reliably measured, regardless of when the payment is received. Revenueis measured fair value of the consideration received or receivable, taking into account contractually definedterms payment and excluding taxes or duty. The Group and the Company have concluded that it is the principalin all of its revenue arrangements since it is the primary obligor in all the revenue arrangements, has pricinglatitude, and exposed to inventory and credit risks.

The specific recognition criteria described below must also be met before revenue is recognised.


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2.20 Revenue recognition (cont’d)

(a) Sale of goods and rendering of services

Revenue from hospital operations comprises inpatient and outpatient hospital charges and sales ofpharmaceutical products, medical and consumable supplies. These are recognised when services arerendered and goods are delivered, net of discounts, rebates and returns.

Other hospital revenue mainly consists of clinic rental from consultants. These are recognised on an accrualbasis in accordance with the substance of the relevant agreements.

(b) Dividend income

Dividend income is recognised when the Group's and the Company's right to receive payment isestablished.

(c) Interest income

Interest income is recognised using the effective interest method.

(d) Membership fees

Membership fees are recognised upon their registration with the Group.

(e) Rental income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs ofincentives provided to lessees are recognised as a reduction of rental income over the lease term on astraight-line basis.

2.21 Taxes

(a) Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from orpaid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantively enacted, at the reporting date in the countries where the Group operates andgenerates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in thestatement of comprehensive income. Management periodically evaluates positions taken in the tax returnswith respect to situations in which applicable tax regulations are subject to interpretation and establishesprovisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assetsand liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

- when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in atransaction that is not a business combination and, at the time of the transaction, affects neither theaccounting profit nor taxable profit; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associate andjoint ventures, when the timing of the reversal of the temporary differences can be controlled and it isprobable that the temporary differences will not reverse in the foreseeable future.


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2.21 Taxes (cont’d)

(b) Deferred tax (cont’d)Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused taxcredits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable thattaxable profit will be available against which the deductible temporary differences, and the carry forward ofunused tax credits and unused tax losses can be utilised, except:

- when the deferred tax asset relating to the deductible temporary difference arises from the initialrecognition of an asset or liability in a transaction that is not a business combination and, at the time ofthe transaction, affects neither the accounting profit nor taxable profit; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associateand joint ventures, deferred tax assets are recognised only to the extent that it is probable that thetemporary differences will reverse in the foreseeable future and taxable profit will be available againstwhich the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extentthat is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred taxasset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and arerecognised to the extent that it has become probable that future taxable profit will allow the deferred taxassets to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year whenthe asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted orsubstantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferredtax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off currenttax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and thesame taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separaterecognition at that date, are recognised subsequently if new information about facts and circumstanceschange. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill)if it was incurred during the measurement period or recognised in profit or loss.

(c) Goods and services tax ("GST")

Revenues, expenses and assets are recognised net of the amount of GST except:

- where the amount of GST incurred on a purchase of assets or services is not recoverable from thetaxation authority, in which case, the GST is recognised as part of the cost of acquisition of the assetor as part of the expense item as applicable; and

- when receivables and payables are stated with the amount of GST included.

The net amount of GST being the difference output and input of GST, payable to or receivable from taxationauthority at the reporting date, is included in payables or receivables in the statements of financial position.


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2.22 Foreign currencies

The Group’s consolidated financial statements are presented in RM, which is also the Company's functionalcurrency. For each entity, the Group determines the functional currency and items included in the financialstatements of each entity are measured using that functional currency. The Group uses the direct method ofconsolidation and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflectsthe amount that arises from using this method.

(a) Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functionalcurrency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currencyspot rates of exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss with theexception of monetary items that are designated as part of the hedge of the Group’s net investment of aforeign operation. These are recognised in OCI until the net investment is disposed of, at which time, thecumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchangedifferences on those monetary items are also recorded in OCI.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated usingthe exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in aforeign currency are translated using the exchange rates at the date when the fair value is determined. Thegain or loss arising on translation of non-monetary items measured at fair value is treated in line with therecognition of the gain or loss on the change in fair value of the item (i.e., translation differences on itemswhose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit orloss, respectively).

(b) Group companies

On consolidation, the assets and liabilities of foreign operations are translated into RM at the rate ofexchange prevailing at the reporting date and their statements of comprehensive income are translated atexchange rates prevailing at the dates of the transactions. The exchange differences arising on translationfor consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relatingto that particular foreign operation is recognised in profit or loss.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carryingamounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreignoperation and translated at the spot rate of exchange at the reporting date.

2.23 Cash dividend and non-cash distribution to equity holders of the parent

The Company recognises a liability to make cash or non-cash distributions to equity holders of the parent whenthe distribution is authorised and the distribution is no longer at the discretion of the Company. As per the Acta distribution is authorised when it is approved by the shareholders.

A corresponding amount is recognised directly in equity.

Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.

Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carryingamount of the assets distributed is recognised in the statement of comprehensive income.


31 AUGUST 2017


2. Summary of significant accounting policies (cont’d) 2.24 Employee benefits

(a) Short term employee benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the financialyear in which the associated services are rendered by employees. Short term accumulating compensatedabsences such as paid annual leave are recognised when services are rendered by employees thatincrease their entitlement to future compensated absences. Short term non-accumulating compensatedabsences such as sick leave, maternity and paternity leave are recognised when the absences occur.

(b) Defined contribution plan

The Group and the Company participate in the national pension schemes as defined by the laws of thecountries in which it has operations. The Malaysian companies in the Group make contributions to theEmployees Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to definedcontribution pension schemes are recognised as an expense in the period in which the related service isperformed.

(c) Share-based payments

Employees' share option scheme

The Company operates an equity-settled, share-based compensation plan, allowing the employees of theGroup to acquire ordinary shares of the Company at predetermined prices. The total fair value of shareoptions granted to employees is recognised as an expense with a corresponding increase in the shareoptions reserve within equity over the vesting period and taking into account the probability that the optionswill be vested.

The fair value of share options is measured at grant date, taking into account, if any, the market vestingconditions upon which the options were granted but excluding the impact of any non-market vestingconditions. Non-market vesting conditions are included in assumptions about the number of options thatare expected to become exercisable on vesting date.

At the end of each reporting period, the Company revises its estimates of the number of options that areexpected to become exercisable on vesting date. The Company recognises the impact of the revision oforiginal estimates, if any, in profit or loss, with a corresponding adjustment to equity over the remainingvesting period.

2.25 Segment reporting

Operating segments are defined as components of the Group that:

(a) Engages in business activities from which it could earn revenues and incur expenses (including revenuesand expenses relating to transactions with other components of the Group);

(b) Whose operating results are regularly reviewed by the chief operating decision maker of the Group (i.e. theGroup’s Chief Executive Officer) in making decisions about resources to be allocated to the segment andassessing its performance; and

(c) For which discrete financial information is available.


31 AUGUST 2017



2.25 Segment reporting (cont’d)

An operating segment may engage in business activities for which it has yet to earn revenues.

The Group reports separately information about each operating segment that meets any of the followingquantitative thresholds:

(a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is tenper cent (10%) or more of the combined revenue, internal and external, of all operating segments.

(b) The absolute amount of its reported profit or loss is ten per cent (10%) or more of the greater, in absoluteamount of:

(i) the combined reported profit of all operating segments that did not report a loss; and

(ii) the combined reported loss of all operating segments that reported a loss.

(c) Its assets are ten per cent (10%) or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, andseparately disclosed, if the management believes that information about the segment would be useful to usersof the financial statements.

Total external revenue reported by operating segments shall constitute at least seventy five percent (75%) ofthe revenue of the Group. Operating segments identified as reportable segments in the current financial year inaccordance with the quantitative thresholds would result in a restatement of prior period segment data forcomparative purposes.

2.26 Contingencies

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

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

2.27 Current versus non-current classification

The Group and the Company present assets and liabilities in the statements of financial position based oncurrent/non-current classification. An asset is current when it is:

- expected to be realised or intended to be sold or consumed in normal operating cycle;

- held primarily for the purpose of trading;

- expected to be realised within 12 months after the reporting period; or

- cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.


31 AUGUST 2017



2.27 Current versus non-current classification (cont’d)

All other assets are classified as non-current.

A liability is current when:

- it is expected to be settled in normal operating cycle;

- it is held primarily for the purpose of trading;

- it is due to be settled within 12 months after the reporting period; or

- there is no unconditional right to defer the settlement of the liability for at least 12 months after the reportingperiod.

The Group and the Company classify all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

3. Significant accounting judgements and estimates

The preparation of the Group's and of the Company's financial statements requires management to make judgements,estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and thedisclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimatescould result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affectedin the future periods.

3.1 Critical judgements made in applying accounting policies

There are no critical judgements made by management in the process of applying the Company's accountingpolicies which may have significant effect on the amounts recognised in the financial statements.

3.2 Key sources of estimation uncertainties

The key assumptions concerning the future and other key sources of estimation and uncertainty at the reportingdate, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilitieswithin the next financial year are discussed below:

(a) Useful life of property, plant and equipment

The cost of property, plant and equipment are depreciated on a straight-line basis over the assets’ estimatedeconomic useful lives.

Management estimates the useful lives of these plant and equipment to be within 5 to 10 years. Changesin the expected level of usage and technological developments could impact the economic useful lives andthe residual values of these assets, therefore, future depreciation charges could be revised.

(b) Impairment of goodwill

Goodwill is tested for impairment annually and other times when such indicators exist. This requiresmanagement to estimate the expected future cash flows of the cash-generating unit to which goodwill isallocated and to apply a suitable discount rate in order to determine the present value of those cash flows.The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discountrate used. If the expectation is different from estimation, such difference will impact the carrying value ofgoodwill. The carrying amount of goodwill as at 31 August 2017 was RM193,045,000 (2016:RM193,045,000). Further details are disclosed in Note 15(a).


31 AUGUST 2017


3. Significant accounting judgements and estimates (cont’d)

3.2 Key sources of estimation uncertainties (cont’d)

(c) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default or significantdelay in payments.

The Group recognises an allowance for doubtful debts when there is objective evidence that the Group willnot be able to collect all amounts due according to the original term of receivables.

Significant judgement is required in the assessment of the recoverability of receivables. To the extent thatactual recoveries deviate from management’s estimates, such variances may have a material impact onprofit or loss. The carrying amounts of the Group's and of the Company's loans and receivables at thereporting date are disclose in Note 18.

(d) Taxes

Significant estimation is involved in determining the provision for income taxes. There are certain transactionsand computations for which the ultimate tax determination is uncertain during the ordinary course of business.The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes willbe due. Where the final tax outcome of these matters is different from the amounts that were initiallyrecognised, such differences will impact the income tax and deferred tax provisions in the period in whichsuch determination is made.

Deferred tax assets are recognised for all deductible temporary differences, unused tax credits and unusedtax losses to the extent that it is probable that taxable profit will be available against which the losses can beutilised.

Significant management judgement is required to determine the amount of deferred tax assets that can berecognised, based upon the likely timing and the level of future taxable profits together with future tax planningstrategies. Further details are disclosed in Note 22.

(e) Impairment assessment of investment in subsidiaries

The Company determines whether investment in subsidiaries is impaired when there is an indication ofimpairment. This requires an estimation of the value in use of the CGU to which the investment in subsidiariesis allocated. Estimating a value in use amount requires management to make an estimate of the expectedfuture cash flows from the CGU and also to determine suitable discount and growth rates in order to calculatethe present value of those cash flows. The carrying amount of investment in subsidiaries at 31 August 2017was RM483,978,000 (2016: RM483,687,000). Further details are disclosed in Note 16.


31 AUGUST 2017


4. Revenue

Group Company 1.9.2016 1.6.2015 1.9.2016 1.6.2015 to to to to 31.8.2017 31.8.2016 31.8.2017 31.8.2016 RM’000 RM’000 RM’000 RM’000

Hospital and ancillary services 135,682 144,459 - - Clinic services 12,135 12,679 - - Clinic rental income 1,435 1,730 - - Hospital administration fee 1,709 1,930 - - Membership fees 93 133 - - Dividend income from a subsidiary - - 5,000 2,500 Others 658 576 - -

151,712 161,507 5,000 2,500

5. Cost of sales

Cost of sales represents cost of pharmaceutical products, medical and consumable supplies, laboratory, professionalfees, food and beverages and others.

6. Other income


Interest income from: - deposits with licensed banks 7,545 9,493 6,465 8,706 - others 5 33 - 32 Rental income 446 600 - - Gain on disposal of of property, plant and equipment - 20 - - Gain on foreign exchange: - realised 2 - 2 - - unrealised 6 159 - - Reversal of impairment losses on: - trade receivables (Note 18(a)) - 3 - - - other receivables (Note 18(c)) - - - 45 Others 451 611 - -

8,455 10,919 6,467 8,783


31 AUGUST 2017


7. Finance costs

Group 1.9.2016 1.6.2015 to to 31.8.2017 31.8.2016 RM’000 RM’000

Interest expense on: - term loan 82 120 - obligations under finance lease 3 6

85 126

8. Profit before tax

In addition to the other items disclosed elsewhere in the financial statements, the following items have been includedin arriving at profit before tax:


Auditors’ remuneration: - statutory audit (EY Malaysia) 145 - 40 - - statutory audit (other than EY) 6 142 - 48 - other services (EY Malaysia) 10 4 5 4 Employee benefits expense (Note 9) 44,200 49,136 - - Executive Directors' remuneration (Note 10) 1,265 1,940 - - Non-Executive Directors' remuneration (Note 10) 350 384 350 384 Depreciation of property, plant and equipment (Note 14) 11,022 11,739 - - Property, plant and equipment written off 4 2 - - Loss on disposal of property, plant and equipment 10 - - - Amortisation of intangible assets (Note 15) 225 - - - Impairment loss on investment in a subsidiary (Note 16) - - 1 - Rental expense: - equipment 154 215 - - - premises 1,020 949 - - Impairment losses on: - trade receivables (Note 18(a)) 1,294 1,062 - - - other receivables (Note 18(c)) - - 1,608 - Loss on foreign exchange: - realised 261 6 - 1 - unrealised 53 - - -


31 AUGUST 2017


9. Employee benefits expense

Group 1.9.2016 1.6.2015 to to 31.8.2017 31.8.2016 RM’000 RM’000

Salaries, wages and bonuses 32,862 36,296 Social security contributions 444 432 Contributions to defined contribution plans 4,209 4,629 Fair value charges on share option granted under ESOS 292 423 Allowances 3,651 4,185 Other benefits 2,742 3,171

44,200 49,136

The Directors' remuneration of the Group and of the Company are disclosed in Note 10.

10. Directors' remuneration


Executive Directors' remuneration: Salaries and bonuses 1,265 1,940 - - Estimated money value of benefits-in-kind: - ESOS expense 309 270 309 270 - other emoluments 6 4 6 4

1,580 2,214 315 274

Non-Executive Directors' Director fees 350 384 350 384 Estimated money value of - ESOS expense 689 1,001 689 1,001 - other emoluments 121 116 73 56

1,160 1,501 1,112 1,441

Total Directors' remuneration including benefits-in-kind 2,740 3,715 1,427 1,715


31 AUGUST 2017


10. Directors' remuneration (cont’d)

The number of Directors of the Company whose total remuneration during the financial year/period fell within thefollowing bands (excluding the award of ESOS) is analysed below:

Numbers of Directors 1.9.2016 1.6.2015 to to 31.8.2017 31.8.2016 RM’000 RM’000

Executive Directors: Below RM50,000 1 - RM50,001 - RM100,000 - 1 RM500,001 - RM550,000 - 1 RM1,250,001 - RM1,300,000 1 - RM1,300,001 - RM1,350,000 - 1

Non-Executive Directors: Below RM50,000 2 1 RM50,001 - RM100,000 5 4 RM100,001 - RM150,000 - 1

For financial year ended 31 August 2017, Dr. Chan Boon Kheng has been included as Executive Director from 1September 2016 to 30 September 2016, and as Non-Executive Non-Independent Director from 1 October 2016 to 23January 2017.

For financial period ended 31 August 2016, Dr. Wong Chiang Yin has been included as Executive Director up to hisresignation on 31 December 2015.

11. Income tax expense


Statements of comprehensive income:Current income tax:Malaysian income tax 1,565 2,035 1,340 1,831 Underprovision in prior years - 26 - 10

1,565 2,061 1,340 1,841

Deferred income tax (Note 22):Relating to origination and reversal of temporary differences (437) 3,115 - - Overprovision in prior years (23) - - -

(460) 3,115 - -

1,105 5,176 1,340 1,841


31 AUGUST 2017


11. Income tax expense (cont’d)

Domestic current income tax is calculated at the Malaysian statutory tax rate of 24% (2016: 24%) of the estimatedassessable profit for the financial year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

A subsidiary of the Company, TMC Biotech Sdn. Bhd. (“TMC Biotech”), is not subject to tax as it has been grantedthe BioNexus Status, by the Malaysian Biotechnology Corporation Sdn. Bhd. which qualified TMC Biotech for theBioNexus incentive. TMC Biotech will enjoy full exemption from income tax on its statutory income for a period of 10years commencing from March 2008.

A subsidiary of the Company, Tropicana Medical Centre (M) Sdn. Bhd. (“TMCM”), has obtained approval for theInvestment Tax Allowance, granted by the Malaysian Investment Development Authority. TMCM will enjoy fullexemption on the qualifying expenditures spent for a period of 5 years commencing from 16 December 2014 andthis can be used to deduct against its statutory income.

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporatetax rate for the respective financial year/period are as follows: Group Company 1.9.2016 1.6.2015 1.9.2016 1.6.2015 to to to to 31.8.2017 31.8.2016 31.8.2017 31.8.2016 RM’000 RM’000 RM’000 RM’000

Profit before tax 27,139 25,941 7,070 7,552

Taxation at Malaysian statutory tax rate of 24% (2016: 24%) 6,513 6,226 1,697 1,812 Effect of expenses not deductible for tax purposes 1,249 1,369 829 619 Income not subject to tax (55) (58) (1,200) (600)Effect of tax exempt income due to BioNexus status (266) (460) - - Effect of utilisation of current year investment tax allowance (6,036) - - - Effect of utilisation of previously unrecognised unabsorbed capital allowances (170) (2,104) - - Deferred tax assets not recognised during the financial year/period 344 177 14 - Deferred tax assets recognised on investment tax allowance (451) - - - Underprovision of income tax in prior year - 26 - 10 Overprovision of deferred tax in prior period (23) - - -

1,105 5,176 1,340 1,841


31 AUGUST 2017


12. Earnings per ordinary share

(a) Basic

Basic earnings per ordinary share is calculated by dividing the profit for the financial year/period, net of tax,attributable to owners of the parent by the weighted average number of ordinary shares in issue during thefinancial year/period.

Group 1.9.2016 1.6.2015 to to 31.8.2017 31.8.2016 RM’000 RM’000

Profit attributable to owners of the parent (RM’000) 26,034 20,765

Weighted average number of ordinary shares in issue (’000) 1,734,862 1,707,184

Basic earnings per share (sen) 1.50 1.22

(b) Diluted

For the purpose of calculating diluted earnings per share, the profit for the financial year/period attributable toowners of the parent and the weighted average number of ordinary shares in issue during the financial year/periodhave been adjusted for the dilutive effects of all potential ordinary shares.

Group 1.9.2016 1.6.2015 to to 31.8.2017 31.8.2016 RM’000 RM’000

Profit attributable to owners of the parent (RM'000) 26,034 20,765

Weighted average number of ordinary shares in issue (’000) 1,734,862 1,707,184 Effect of dilution on conversion of warrants and ESOS (’000) 150,517 -

Adjusted weighted average number of ordinary share units in issue and issuable (’000) 1,885,379 1,707,184

Diluted earnings per share (sen) 1.38 1.22

In the previous financial period, there was no dilution in the earning per share of the Group as the market valuesof warrants and ESOS were lower than the exercise prices. The effect of assumed conversion of warrants andESOS outstanding will be anti-dilutive and as such, the diluted earning per share is the same as the basic earningper share.


31 AUGUST 2017


13. Dividends

Group/Company 2017 2016 RM'000 RM'000

Recognised during the financial year/period

First and final single-tier dividend in respect of financial year ended 31 May 2015 of 0.140 sen per ordinary share paid on 9 November 2015 - 2,425

First and final single-tier dividend in respect of financial period ended 31 August 2016 of 0.154 sen ordinary share paid on 13 February 2017 2,673 -

A final single tier dividend in respect of the financial year ended 31 August 2017 of 0.167 sen per ordinary share hasbeen proposed by the Directors after the reporting period for shareholders’ approval at the forthcoming AnnualGeneral Meeting. The financial statements for the current financial year do not reflect this proposed dividend. Thisdividend, if approved by the shareholders, would be accounted for as an appropriation of retained earnings in thefinancial year ending 31 August 2018.


31 AUGUST 2017


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31 AUGUST 2017


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31 AUGUST 2017


14. Property, plant and equipment (cont’d)

During the financial year/period, the Group made the following cash payments to purchase property, plant andequipment:

Group 2017 2016 RM'000 RM'000

Purchase of property, plant and equipment 15,910 39,991 Unsettled and remained as other payables (1,768) (14,834)

Cash payments on purchase of property, plant and equipment 14,142 25,157

15. Intangible assets

Intangible assets represent computer software and goodwill arising from acquisition of a subsidiary.

Computer Assets under Goodwill software development Total Group RM'000 RM'000 RM'000 RM'000 (a) (b)

At 31 August 2017

CostAt 1 September 2016 193,045 - 1,050 194,095 Additions - 540 - 540 Reclassification - 1,050 (1,050) -

At 31 August 2017 193,045 1,590 - 194,635

Accumulated amortisation and impairmentAt 1 September 2016 - - - - Amortisation charge for the financial year (Note 8) - 225 - 225

At 31 August 2017 - 225 - 225

Net carrying amount 193,045 1,365 - 194,410

At 31 August 2016 (Restated)

CostAt 1 June 2015 - - - - Additions (Note 16) 193,045 - 1,050 194,095

At 31 August 2016 193,045 - 1,050 194,095

Accumulated amortisation and impairmentAt 1 June 2015 - - - - Amortisation charge for the financial period (Note 8) - - - -

At 31 August 2016 - - - -

Net carrying amount 193,045 - 1,050 194,095


31 AUGUST 2017


15. Intangible assets (cont’d)

During the financial year/period, the Group made the following cash payments to purchase computer software:

Group 2017 2016 RM'000 RM'000

Purchase of computer software 540 1,050 Unsettled and remained as other payables - (1,050)

Cash payments on purchase of computer software 540 -

(a) Goodwill

Goodwill has been allocated to the operating division of the Group, which represent the lowest level within theGroup at which the goodwill is monitored for internal management purposes. The carrying amount of goodwillallocated to the CGU of the Group is as follow:

Group 2017 2016 RM'000 RM'000

Healthcare services segment 193,045 193,045

Healthcare services segment represent a subsidiary, BB Waterfront Sdn. Bhd., which was acquired by theCompany on 23 June 2015.

For the purpose of impairment testing, the recoverable amount of a CGU is determined based on its value-in-use. The value-in-use is determined by discounting the pre-tax cash flows based on financial forecast and financialprojections approved by the management covering a thirteen-year period based on the following key assumptions:

2017 2016 % %

Terminal growth rates 3.5 3.7 Pre-tax discount rate 8.8 10.2

(i) Terminal growth rates

Rate is based on management expectation of the terminal growth rate used to extrapolate cash flows beyond the budget period.

(ii) Pre-tax discount rate

The pre-tax discount rate reflects the market assessment of the risks specific to the CGU. This reflected themanagement's best estimate of return on capital employed in the Group.

The management believes that there is no reasonably possible change in the key assumptions on whichmanagement has based its determination of the CGU’s recoverable amount, which would cause the CGU’scarrying amount to materially exceed its recoverable amount.

Based on the annual impairment testing undertaken by the Group, no impairment loss is required for the carryingamount of the goodwill as at 31 August 2017.

(b) Computer software

Computer software represents license, professional services, data migration and integration of PMO software that arenot an integral part of property, plant and equipment. Software assets are recorded at cost and have finite useful lifebased on the term of the license or other contractual basis. The cost is amortised over the asset's expected useful life.


31 AUGUST 2017


16. Investment in subsidiaries

Company 2017 2016 RM'000 RM'000

Unquoted shares at cost - ordinary shares 381,564 381,564 - redeemable preference shares 102,000 102,000 Less: Accumulated impairment losses (301) (300)

483,263 483,264Add: Equity contribution to subsidiaries pursuant to ESOS 715 423

483,978 483,687

At the reporting date, the Company conducted an impairment review of its investments in certain subsidiarycompanies, principally based on the Company’s share of net assets in these subsidiary companies, which representsthe Directors’ estimation of fair value less costs to sell of these subsidiary companies.

The review gave rise to the recognition of net impairment loss of investment in subsidiary companies of RM1,000(2016: RM Nil) as disclosed in Note 8.

Details of the subsidiaries are as follows:

Name of Country of Proportion Non-subsidiaries incorporation Principal activities of ownership controlling interest interests 2017 2016 2017 2016 % % % %

Tropicana Medical Malaysia Multi-disciplinary tertiary 100 100 - - Centre (M) Sdn. Bhd. care services

IVF Technologies Malaysia Provision of fertility 100 100 - - Sdn. Bhd. services and operation of women’s clinic

TMC Biotech Sdn. Bhd. Malaysia Provision of fertility 100 100 - - consultancy, laboratory and embryology services and research and development

TMC Lifestyle Sdn. Bhd. Malaysia Development, marketing 100 100 - - and management of healthcare programmes

TMC Properties Sdn. Bhd. Malaysia Property investment 100 100 - -

TMC Women’s Specialist Malaysia Dormant 100 100 - - (Kuantan) Sdn. Bhd.

BB Waterfront Sdn. Bhd.* Malaysia Provision of healthcare 100 100 - - services

TMC Care Sdn. Bhd. Malaysia Provision of pharmacy 100 100 - - services and products


31 AUGUST 2017


16. Investment in subsidiaries (cont’d)

i) Subsidiaries of Tropicana Medical Centre (M) Sdn. Bhd.

Name of Country of Proportion Non-subsidiaries incorporation Principal activities of ownership controlling interest interests 2017 2016 2017 2016 % % % %

TMC Women’s Malaysia Business of operating 100 100 - - Specialist fertility centres and Holdings providing related Sdn. Bhd. services

PT Tropicana Indonesia Marketing and promoting 65 65 35 35 Healthcare of healthcare products Indonesia*#

* Audited by firms of auditors other than Ernst & Young# The non-controlling interest of the subsidiary is deemed to be immaterial to the Group. Accordingly, the

disclosures required by MFRS 12 are not presented.

Acquisition and incorporation of subsidiaries

2016

i) On 23 June 2015, the Company completed the acquisition of the entire equity interest in BB Waterfront Sdn. Bhd.(“BB Waterfront”) for a purchase consideration of RM366,960,000 satisfied via the issuance of 533,333,333 newordinary shares of RM0.10 each in the Company ("Consideration Shares") at an issue price of RM0.60 per share,together with 266,666,666 free detachable warrants ("Consideration Warrants") on the basis of one (1)consideration warrant for every two (2) consideration shares. The shares consideration was based on the fairvalue of RM0.60 per ordinary share of the Company, which represents the last traded market price at AcquisitionDate and also the fair value of RM0.1761 per warrant of the Company.

The fair value of the identifiable assets and liabilities of BB Waterfront as at the date of acquisition are as follows:

RM'000

Property, plant and equipment (Note 14) 180,000Other receivables 1 Cash and bank balances 1,149 Deferred tax liabilities (Note 22) (7,176)Other payables (59)

Total identifiable net assets 173,915 Goodwill arising from acquisition (Note 15) 193,045

366,960

The effects of the acquisition on cash flows are as follows:

Total consideration for equity interest acquired 366,960 Less: Consideration in shares and warrants (366,960)

Consideration settled in cash - Less: Cash and cash equivalents of subsidiaries acquired (1,149)

Net cash inflow of the Group on acquisition (1,149)


31 AUGUST 2017


16. Investment in subsidiaries (cont’d)

ii) On 18 March 2016, a wholly-owned subsidiary of the Company, TMC Care Sdn. Bhd. ("TMC Care") wasincorporated. The authorised share capital of TMC Care is RM400,000 divided into 400,000 ordinary shares ofRM1.00 each with a total issued and paid-up share capital of RM1,000 comprising 1,000 ordinary shares ofRM1.00 each. The business activities of TMC Care are carrying on retail business of healthcare products underthe business name, TMC Care Pharmacy. TMC Care Pharmacy was opened in Johor Bahru on 19 July 2016.

17. Inventories

At cost:

Group 2017 2016 RM'000 RM'000

Pharmaceutical products 4,728 4,357 Medical and consumable supplies 3,519 2,510

8,247 6,867

During the financial year/period, the amount of inventories recognised as an expense in cost of sales of the Groupwas RM43,844,000 (2016: RM50,617,000).

18. Trade and other receivables

Group Company Note 2017 2016 2017 2016 RM'000 RM'000 RM'000 RM'000

Trade receivables Third parties 37,252 33,944 - - Less: Impairment losses (9,042) (7,751) - -

Trade receivables, net (a) 28,210 26,193 - - Other receivables Other receivables 3,121 3,086 1,632 2,106 Amounts due from subsidiaries (b) - - 26,644 13,424 Deposits 893 728 2 1 Prepayments 1,491 889 345 25 5,505 4,703 28,623 15,556

Less: Impairment losses - Other receivables (252) (252) - - - Amounts due from subsidiaries - - (2,443) (835)

(252) (252) (2,443) (835)

Other receivables, net (c) 5,253 4,451 26,180 14,721

Total trade and other receivables 33,463 30,644 26,180 14,721 Less: Prepayments (1,491) (889) (345) (25)Less: GST receivable (338) (173) - - Add: Cash and bank balances (Note 19) 206,989 204,558 165,868 171,051

Total loans and receivables 238,623 234,140 191,703 185,747


31 AUGUST 2017


18. Trade and other receivables (cont’d)

(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 60 (2016: 30 to 60) days terms. Other creditterms are assessed and approved on a case-by-case basis. Trade receivables are recognised at their originalinvoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables

The ageing analysis of the Group's total trade receivables is as follows:

Group 2017 2016 RM'000 RM'000

Neither past due nor impaired 15,019 14,695

1 to 30 days past due not impaired 5,398 2,816 31 to 60 days past due not impaired 1,130 1,397 61 to 90 days past due not impaired 1,202 803 91 to 120 days past due not impaired 1,151 2,142 More than 121 days past due not impaired 4,310 4,340

Past due but not impaired 13,191 11,498 Impaired 9,042 7,751

37,252 33,944

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment recordswith the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables. Anyreceivables having significant balances past due or more than 90 days, which are deemed to have higher creditrisk, are monitored individually.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM13,191,000 (2016: RM11,498,000) that are past due at thereporting date but not impaired.

These receivables are unsecured. Management is confident that these receivables are recoverable as theseaccounts are still active.


31 AUGUST 2017



(a) Trade receivables (cont’d)

Receivables that are past due and impaired

The Group's trade receivables that are impaired at the reporting date and the movement of the allowance accountsused to record the impairment are as follows:

Group 2017 2016 RM'000 RM'000

Trade receivables - nominal amount 13,932 11,943 Less: Allowance for impairment (9,042) (7,751)

4,890 4,192

Movement in allowance accounts:

Group 2017 2016 RM'000 RM'000

At the beginning of financial year/period 7,751 6,725 Charge for the financial year/period (Note 8) 1,294 1,062 Reversal of impairment loss (Note 6) - (3)Written off (3) (33)


Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that arein significant financial difficulties and have defaulted on payments. These receivables are not secured by anycollateral or credit enhancements.

(b) Amounts due from subsidiaries

The amounts due from subsidiaries are unsecured, non-interest bearing and are repayable upon demand.


31 AUGUST 2017



(c) Other receivables

Other receivables that are impaired

The Group's and the Company's other receivables that are impaired at the reporting date and the movement ofthe allowance accounts used to record the impairment are as follows:

Group Company 2017 2016 2017 2016 RM'000 RM'000 RM'000 RM'000

Other receivables- nominal amount 252 252 2,443 835 Less: Allowance for impairment (252) (252) (2,443) (835)

- - - -

Movement in allowances accounts:

At the beginning of financial year/period 252 252 835 880 Charge for the financial year/period (Note 8) - amount due from subsidiaries - - 1,608 - Reversal of impairment loss (Note 6) - - - (45)

At the end of financial year/period 252 252 2,443 835

19. Cash and bank balances


Cash at bank and on hand 16,723 21,515 1,116 3,796 Deposits with licensed banks 190,266 183,043 164,752 167,255

206,989 204,558 165,868 171,051

(a) Included in deposits with licensed banks of the Group is an amount of RM510,000 (2016: RM511,000) which ispledged as securities for facilities granted to the Group.


31 AUGUST 2017


19. Cash and bank balances (cont’d)

(b) The weighted average effective interest rates and average maturity of deposits of the Group and of the Companyat the reporting date were as follows:

Group Company 2017 2016 2017 2016

Weighted average effective fixed interest rates (%) 3.90 4.20 3.88 4.21 Range of maturities (months) 1-12 1-12 1-12 1-12

For the purpose of statements of cash flows, cash and cash equivalents comprise the following:


Cash at banks and on hand 16,723 21,515 1,116 3,796 Deposits with licensed banks 190,266 183,043 164,752 167,255

206,989 204,558 165,868 171,051 Less: Deposits with licensed banks (for more than 3 months) (147,651) (154,176) (142,031) (148,780) Deposit pledged to a licensed bank (510) (511) - -

Total cash and cash equivalents 58,828 49,871 23,837 22,271

20. Trade and other payables

Group Company Note 2017 2016 2017 2016 RM'000 RM'000 RM'000 RM'000

Current

Trade payables Third parties (a) 27,782 24,299 - -

Other payables Amounts due to subsidiaries (b) - - 910 262 Amount due to a related company 981 5,994 - - Amount due to an affiliated company - 2 - - Other payables 2,881 4,147 85 134 Deposits received 2,237 1,662 - - Accruals 8,722 20,212 1,355 1,223

14,821 32,017 2,350 1,619

Total trade and other payables 42,603 56,316 2,350 1,619 Less: GST payable (131) (72) - - Add: Borrowings (Note 21) 1,802 1,889 - -

Total financial liabilities carried at amortised cost 44,274 58,133 2,350 1,619


31 AUGUST 2017


20. Trade and other payables (cont’d)

(a) Trade payables

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group ranged from 30to 90 (2016: 30 to 90) days.

(b) Amounts due to subsidiaries

The amounts due to subsidiaries are unsecured, non-interest bearing and are repayable upon demand.

(c) Amount due to a related company

Amount due to a related company are unsecured, non-interest bearing and are repayable upon demand.

(d) Amount due to an affiliated company

Amount due to an affiliated company in the previous financial period was unsecured, non-interest bearing andwas repayable upon demand.

(e) Other payables

These amounts are non-interest bearing. Other payables are normally settled on an average term of two months(2016: average term of two months).

21. Borrowings

Group 2017 2016 Maturity RM'000 RM'000

CurrentSecured Term loan 2018 71 64 Obligations under finance lease 2018 22 21

93 85

Non-currentSecured Term loan 2030 1,673 1,746 Obligations under finance lease 2020 36 58

1,709 1,804

Total borrowingsSecured Term loan 1,744 1,810 Obligations under finance lease 58 79

1,802 1,889


31 AUGUST 2017


21. Borrowings (cont’d)

As at reporting date, the weighted average effective interest rates for the borrowings were as follows:

Group 2017 2016

Floating rate Term loan 4.92 5.05

Fixed rate Obligations under finance lease 4.61 5.89

The remaining maturities of the borrowings as at 31 August 2017 are as follows:

Group 2017 2016 RM'000 RM'000

On demand or within one year 93 85 More than 1 year and less than 2 years 97 92 More than 2 years and less than 5 years 254 255 5 years or more 1,358 1,457

1,802 1,889

The term loan is secured by corporate guarantee from the Company as disclosed in Note 28 and charges over thefreehold building of the Group as disclosed in Note 14.

22. Deferred tax assets/(liabilities)

Group 2017 2016 RM'000 RM'000

At the beginning of financial year/period (11,096) (805)Acquisition of a subsidiary (Note 16) - (7,176)Recognised in profit or loss (Note 11) 460 (3,115)

At the end of financial year/period (10,636) (11,096)

The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assetsand current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by thesame tax authority.


31 AUGUST 2017


22. Deferred tax assets/(liabilities) (cont’d)

The components and movements of deferred tax assets and liabilities during the financial year/period prior to offsettingare as follows:

Deferred tax assets of the Group

Unabsorbed Investment Unused tax capital tax losses allowances allowance Provisions Total RM’000 RM’000 RM’000 RM'000 RM’000

At 1 June 2015 2,483 7,408 - - 9,891 Recognised in profit or loss (119) (7,169) - 2,124 (5,164)

At 31 August 2016 2,364 239 - 2,124 4,727

At 1 September 2016 2,364 239 - 2,124 4,727 Recognised in profit or loss - (239) 451 81 293

At 31 August 2017 2,364 - 451 2,205 5,020

Deferred tax liabilities of the Group

Fair value adjustment Property, on business plant and combination equipment Total RM'000 RM'000 RM’000

At 1 June 2015 (2,803) (7,893) (10,696)Acquisition of a subsidiary (Note 16) (7,176) - (7,176)Recognised in profit or loss 583 1,466 2,049

At 31 August 2016 (9,396) (6,427) (15,823)

At 1 September 2016 (9,396) (6,427) (15,823)Recognised in profit or loss - 167 167

At 31 August 2017 (9,396) (6,260) (15,656)


31 AUGUST 2017


22. Deferred tax assets/(liabilities) (cont’d)

Deferred tax assets have not been recognised in respect of the following items:


Unused tax losses 4,999 4,235 - - Unabsorbed capital allowances 1,306 1,406 - - Other temporary differences 227 166 226 166

6,532 5,807 226 166

Deferred tax benefit at 24% (2016: 24%), if recognised 1,568 1,394 54 40

The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profitsof the respective subsidiaries are subject to no substantial changes in shareholdings of the respective subsidiariesunder Income Tax Act 1967 and guidelines issued by tax authority. Deferred tax assets of certain subsidiaries havenot been recognised as it is not probable that their future taxable profits will be available against which they may beutilised.

23. Share capital

Group/Company Number of ordinary shares Amount 2017 2016 2017 2016 ‘000 ‘000 RM'000 RM'000

Authorised: -* 5,000,000 -* 500,000

Issued and fully paid:At beginning of the financial year/period 1,732,899 1,199,521 173,290 119,952 Ordinary shares issued during the year/period, pursuant to: - acquisition of a subsidiary - 533,333 - 53,333 - ESOS 3,223 45 821 5 - conversion of warrants 83 - 15 - Effect of implementation of the Companies Act 2016 - - 447,573 -

At end of the financial year/period 1,736,205 1,732,899 621,699 173,290

* The Act which came into operation on 31 January 2017, abolished the concept of authorised share capital andpar value of share capital.


31 AUGUST 2017


23. Share capital (cont’d)

(a) Issue of shares

During the financial year, the Company increased its issued and paid-up ordinary share capital fromRM173,289,976 to RM174,126,196 by way of issuance of 3,306,000 new ordinary shares pursuant to the following:

(a) issuance of 2,578,000 new ordinary shares pursuant to exercise of the ESOS at par value of RM0.10 each atan exercise price of RM0.75 per ordinary share prior to implementation of the Companies Act 2016;

(b) issuance of 72,850 new ordinary shares pursuant to the exercise of warrants at par value of RM0.10 each atthe exercise price of RM0.75 per ordinary share prior to the implementation of the Companies Act 2016;

(c) issuance of 645,400 new ordinary shares pursuant to exercise of the ESOS at the exercise price of RM0.75and per ordinary share since the implementation of the Companies Act 2016; and

(d) issuance of 9,750 new ordinary shares pursuant to the exercise of warrants at the exercise price of RM0.75per ordinary share since the implementation of the Companies Act 2016.

The new ordinary shares issued during the financial year rank pari passu in all respects with the existing ordinaryshares of the Company.

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. Allordinary share units carry one vote per share unit without restrictions and rank equally with regard to theCompany's residual assets.

(b) Employees' share option scheme

The Company implemented an ESOS, which is in force for a period of five (5) years until 28 May 2020 ("the optionperiod"). The main features of the ESOS are as follows:

(i) Eligible Directors and employees must be at least eighteen (18) years of age on the Date of Offer, who areconfirmed on the Date of Offer (in respect of Employee only) and have served full time for at least a periodof one (1) year of continuous services before the date of offer;

(ii) The total number of shares offered under the ESOS shall not, in aggregate, exceed 15% of the issued andpaid-up ordinary share capital (excluding treasury shares) of the Company at any time during the existenceof the ESOS;

(iii) The option price per ordinary share under ESOS granted in 2015 and 2017 were RM0.75 and RM0.94respectively;

(iv) The option granted to an Eligible Person shall be subject to a minimum of one hundred (100) Options and inmultiples of one hundred (100) Options and is subject to the following:

- Not more than 10% of the shares available under the ESOS shall be allocated to an eligible person, whoeither singly or collectively through persons connected with eligible persons, holds 20% or more of theissued and paid-up ordinary share capital (excluding treasury shares of the Company).

(v) An option granted under ESOS in 2015 and 2017 may be exercised by the grantee upon achieving the vestingconditions set by the ESOS Committee and is subject to the allotment of shares over the vesting periods of5 years and 3.34 years, respectively; and

(vi) The shares shall on issue and allotment rank pari passu in all respect with the then existing issued shares ofthe Company.


31 AUGUST 2017



(b) Employees' share option scheme (cont’d)

The details of the options over the ordinary shares of the Company are as follows:

Number of options over ordinary shares Exercisable Option price 1.9.2016 Granted Exercised Lapsed 31.8.2017 31.8.2017 RM ‘000 ‘000 ‘000 ‘000 ‘000 ‘000

Grant date

11 June 2015 0.75 13,000 - (1,400) (2,100) 9,500 5,140 28 August 2015 0.75 9,825 - (1,823) (1,189) 6,813 3,820 25 Jan 2017 0.94 - 7,400 - (55) 7,345 1,313

22,825 7,400 (3,223) (3,344) 23,658 10,273

Share options exercised during the financial year resulted in the issuance of 3,223,400 ordinary shares at anissue price of RM0.75.

Grant dates 25.1.2017 11.6.2015 28.8.2015

ESOS expiry date 28.5.2020 28.5.2020 28.5.2020Share price at issue date (per share) RM0.940 RM0.635 RM0.520 Potentially dilutive share price (per share) RM0.940 RM0.625 RM0.512Exercise price per share at issue date RM0.940 RM0.75 RM0.75Historical volatility 17.79% 36.73% 36.73%Risk free rate of return at issue date 3.40% 3.63% 3.91%Dividend yield 0.16% 0.57% 0.57%

(c) Warrants 2015/2019

On 25 June 2015, the Company listed and quoted 266,666,666 Consideration Warrants pursuant to the acquisitionof BB Waterfront Sdn. Bhd. and 599,760,718 Bonus Warrants on the following basis:

- One Consideration Warrant for every two Consideration Shares issued for the acquisition of BB WaterfrontSdn. Bhd.; and

- One Bonus Warrant for every two existing ordinary shares held.

The warrants are constituted by the Deed Poll dated 28 May 2015 (‘Deed Poll’).


31 AUGUST 2017



(c) Warrants 2015/2019 (cont’d)

Salient features of the warrants were as follows:

(i) Each warrant entitled the registered holder thereof (“Warrant holder(s)”) to subscribe for one new ordinaryshare of RM0.10 each in the Company at the exercise price of RM0.75, which may be exercised at any timefrom the date of issuance to the close of business on the market day immediately preceding the date whichwas the fourth anniversary from the date of the issuance of warrants (“Exercise Period”);

(ii) Any warrants not exercised during the Exercise Period would thereafter lapse and ceased to be valid for anypurpose;

(iii) Warrant holders must exercise the warrants in accordance with the procedures set out in the Deed Poll as of28 May 2015 and shares allotted and issued upon such exercise shall rank pari passu in all respects withthe then existing shares of the Company, and shall be entitled for any dividends, rights, allotments and/orother distributions after the issue and allotment thereof;

(iv) The warrant holders were not entitled to any voting rights or to participate in any distribution and/or offer offurther securities in the Company until and unless such warrant holders exercise their warrants for new sharesin the Company; and

(v) The Deed Poll and accordingly the warrants, were governed by and shall be construed in accordance withthe laws of Malaysia.

Details of the warrants exercised/lapsed during the financial year/period are as follow:

Number of warrants 2017 2016 '000 '000

At the beginning of financial year/period 866,427 - Issuance of warrants pursuant to acquisition of subsidiary - 866,427 Less: Exercised (83) -


24. Reserves


Distributable: Retained profits/ (accumulated loss) 43,269 19,908 2,528 (529)

Non distributable: Share premium - 445,441 - 445,441 Warrants reserve 46,960 46,960 46,960 46,960 Share options reserve 2,491 1,689 2,491 1,689 Foreign exchange translation reserve 5 39 - -

49,456 494,129 49,451 494,090


31 AUGUST 2017


24. Reserves (cont’d)

(a) Share premium

Share premium relates to the amount that shareholders have paid for the shares in excess of the nominal value.With the Act coming into effect on 31 January 2017, the credit standing in the share premium account ofRM447,573,000 has been transferred to the share capital account. Pursuant to subsection 618(3) of the Act theCompany may exercise its right to use the credit amount being transferred from share premium within 24 monthsafter the commencement of the Act.

Group/Company 2017 2016 RM'000 RM'000

Issued and fully paid:At the beginning of financial year/period 445,441 180,104 Ordinary shares issued during the year/period: - acquisition of subsidiary - 266,667 - pursuant to ESOS 2,085 (1,364) - warrants 47 34 Effect of implementation of the Companies Act 2016 (447,573) -

At the end of financial year/period - 445,441

(b) Warrants reserve

The warrants reserve arose from the acquisition of entire equity interest in BB Waterfront Sdn. Bhd. for a purchaseconsideration of RM366,960,000 to be satisfied via the issuance of 533,333,333 new ordinary shares of RM0.10each together with 266,666,666 free new detachable warrants during the financial year. The fair value of RM0.1761per warrant was determined using the Black Scholes pricing model based on the following key assumptions:

Interest rate 3.99%Expected volatility of the Company’s share price 42.29%

(c) Share options reserve

The share options reserve represents the effect of equity-settled share options granted to employees. This reserveis made up of the cumulative value of services received from employees recorded on the grant date of shareoptions. When options are exercised, the amount from the share options reserve is transferred to share premium.The share option reserve in relation to the unexercised option at the expiry of the share option scheme will betransferred to retained earnings.

(d) Foreign exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising from thetranslation of the financial statements of foreign operations whose functional currency are different from that ofthe Group’s presentation currency. It is also used to record the exchange differences arising from monetary itemswhich form part of the Group’s net investment in foreign operations, where the monetary item is denominated ineither the functional currency of the reporting entity or the foreign operation.

25. Retained profits

The Company may distribute dividends out of its entire retained profits as of 31 August 2017 and 31 August 2016under the single-tier system.


31 AUGUST 2017


26. Related party transactions

(a) In addition to the related party information disclosed elsewhere in the financial statements, the following significanttransactions between the Group and the Company with related parties took place at terms agreed between theparties during the financial year/period:

Group Company (Income)/expense (Income)/expense

1.9.2016 1.6.2015 1.9.2016 1.6.2015 to to to to 31.8.2017 31.8.2016 31.8.2017 31.8.2016 RM'000 RM'000 RM'000 RM'000

Administration service charges payable to a subsidiary - - 742 668

Dividend income from a subsidiary - - (5,000) (2,500)

Procurement of consultancy services from: - a related company 280 6,132 - - - an affiliated company 3,408 10,049 - -

An affiliated company is an entity, not being a subsidiary or an associate, in which the shareholder of the ultimateholding company or a Director of the Company has significant equity interest or exercise significant influence inthe affiliated company.

A related company is an entity, not being a subsidiary or an associate, in which a Director of the Company alsoholds directorship in the related company.

The transactions between related parties are set on terms mutually agreed between the parties.

Information regarding outstanding balances arising from related party transactions as at 31 August 2017 and2016 are disclosed in Notes 18 and 20.

(b) Compensation of key management personnel

Key management personnel is defined as those persons having authority and responsibility for planning, directingand controlling the activities of the Group and of the Company, directly or indirectly including any Directors.


Short term employee benefits 2,551 1,944 6 4 Share options granted under ESOS 366 271 365 270

2,917 2,215 371 274


31 AUGUST 2017


27. Commitments

(a) Capital commitments

Capital expenditure as at 31 August 2017 and 2016 are as follows:

Group 2017 2016 RM'000 RM'000

Capital expenditure in respect of purchase of property, plant and equipment: - approved and contracted for 37,078 46,013 - approved but not contracted for 1,370 1,748

38,448 47,761

(b) Operating lease commitments - the Group as lessee

The Group had entered into commercial leases on business premises and equipment. These leases have a tenureranging from one to three years, with options to renew for one to three years. Certain contracts include escalationclauses or contingent rental computed based on revenue achieved. There are no restriction placed upon theGroup and the Company by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases at the reporting date are as follows:

Group 2017 2016 RM'000 RM'000

Not later than 1 year 1,024 994 Later than 1 year and not later than 5 years 856 1,010

1,880 2,004

(c) Operating lease commitments - the Group as lessor

The Group has entered into commercial property leases on its property. The leases have remaining non-cancellable lease terms of between one to six years. Certain leases include a clause to enable upward revisionof the rental charge upon renewal of tenancy based on prevailing market conditions.

Future minimum rentals receivable under non-cancellable operating leases at the reporting date are as follows:

Group 2017 2016 RM'000 RM'000

Not later than 1 year 403 408 Later than 1 year and not later than 5 years 951 644 More than 5 years 248 466

1,602 1,518


31 AUGUST 2017


28. Guarantees and contingencies

(a) Financial guarantees

The Directors are of the opinion that provisions are not required in respect of the following guarantees, as it is notprobable that a future outflow of economic benefits will be required or the amount is not capable of reliablemeasurement.

Company 2017 2016 RM'000 RM'000

Unsecured

Corporate guarantee given to licensed bank for banking facility granted to a subsidiary of the Company 1,744 1,810 Letter of guarantee given to suppliers 2,638 2,044

4,382 3,854

(b) Contingent liabilities

The Group is subject to litigations in the ordinary course of business, mainly arising from its subsidiary’s hospitaloperations. The Directors are of the opinion, based on legal advice, management assessment and sufficiency ofmedical malpractice insurance, that no significant exposure will arise that requires recognition.

29. Financial instruments

(a) Financial risk management objectives and policies

The Group’s and the Company's financial risk management policy seeks to ensure that adequate financialresources are available for the development of the Group’s and of the Company's businesses whilst managingtheir interest rate risks (both fair value and cash flow), foreign currency risk, liquidity risk and credit risk. TheBoard reviews and agrees policies for managing each of these risks and they are summarised below.

(b) Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because ofchanges in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument willfluctuate due to changes in market interest rates. The Group’s and the Company's income and operating cashflows are substantially independent of changes in market interest rates.

The Group’s and the Company's interest rate risk arises primarily from loans and receivables and interest-bearingborrowings. Borrowings at floating rates expose the Group and the Company to cash flow interest rate risk.Deposits with licensed banks at fixed rates expose the Group and the Company to fair value interest rate risk.The Group and the Company manage their interest rate exposure by maintaining a mix of fixed and floating rateof interest.


31 AUGUST 2017


29. Financial instruments (cont’d)

(b) Interest rate risk (cont’d)

Sensitivity analysis for variable rate instruments

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portionof deposits with licensed banks and borrowing affected. With all other variables held constant, the Group’s andthe Company's profit before tax are affected through the impact on floating rate borrowings, as follows:

Increase/ (decrease) (Decrease)/increase in basis points in profit before tax 2017 2016 RM'000 RM'000

GroupFloating rate borrowing 25 (21) (23) (25) 21 23

Deposit with licensed bank 25 1,855 1,922 (25) (1,855) (1,922)

CompanyDeposit with licensed bank 25 1,598 1,760 (25) (1,598) (1,760)

(c) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because ofchanges in foreign exchange rates.

The Group is not significantly exposed to foreign currency risk as the majority of the Group's transactions, assetsand liabilities are denominated in Ringgit Malaysia except for foreign currency risk arising from countries in whicha foreign subsidiary operate and amount payable to related company and affiliated company. The currenciesgiving rise to this risk are primarily Singapore Dollar ("SGD") and Rupiah Dollar ("IRD").

Included in the following statements of financial position captions of the Group as at the reporting date arebalances denominated in the following major foreign currencies:

IRD SGD Total RM'000 RM'000 RM'000

Group

At 31 August 2017

Cash and bank balances 19 - 19 Trade and other receivables 12 - 12 Trade and other payables (272) (981) (1,253)

At 31 August 2016

Cash and bank balances 19 - 19 Trade and other receivables 11 - 11 Trade and other payables (440) (5,994) (6,434)


31 AUGUST 2017



(c) Foreign currency risk (cont’d)

In relation to its investment in foreign subsidiary whose net assets are exposed to currency translation risks andwhich are held for long term investment purposes, the differences arising from such translation are recordedunder the foreign currency translation reserve. These translation differences are reviewed and monitored on aregular basis.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity to a reasonably possible change in IRD exchange rate, with allother variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value ofmonetary assets and liabilities. The Group’s exposure to foreign currency changes for all other currencies is notmaterial.

Group Increase/(decrease) in profit before tax

2017 2016 RM'000 RM'000

IRD/RM - strengthened 5% (12) (21) - weakened 5% 12 21

SGD/RM - strengthened 5% (49) (233) - weakened 5% 49 233

(d) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligationsdue to shortage of funds. The Group's and the Company's exposure to liquidity risk arises primarily frommismatches of the maturities of financial assets and liabilities. The Group’s and the Company's objective is tomaintain a balance between continuity of funding and flexibility by keeping committed credit lines available.

The Group and the Company actively manage their debt maturity profile, operating cash flows and the availabilityof funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudentliquidity management, the Group and the Company maintain sufficient levels of cash or cash equivalents to meettheir working capital requirements.


31 AUGUST 2017



(d) Liquidity risk (cont’d)

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group's and of the Company's liabilities at the reportingdate based on contractual undiscounted repayment obligations.

On demand or within One to Over five one year five years years Total RM'000 RM'000 RM'000 RM'000

2017

Group

Financial liabilities:Trade and other payables 42,603 - - 42,603 Borrowings 178 652 1,732 2,562

Total undiscounted financial liabilities 42,781 652 1,732 45,165

Company

Financial liabilities:Trade and other payables 2,350 - - 2,350

2016

Group

Financial liabilities:Trade and other payables 56,316 - - 56,316 Borrowings 178 677 1,886 2,741

Total undiscounted financial liabilities 56,494 677 1,886 59,057

Company

Financial liabilities:Trade and other payables 1,619 - - 1,619

(e) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument, leading to afinancial loss. The Group is exposed to credit risk from its operating activities (primarily trade and otherreceivables) and from its financing activities, including deposits with banks and financial institutions.

The Group's objective is to seek continual revenue growth while minimising losses incurred due to increasedcredit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group's policythat all customers who wish to trade on credit terms are subject to credit verification procedures. In addition,receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debtsis not significant.


31 AUGUST 2017



(e) Credit risk (cont’d)

Exposure to credit risk

At the reporting date, the Group's maximum exposure to credit risk is represented by the carrying amount of eachclass of financial assets recognised in the statements of financial position.

Information regarding credit enhancements for trade and other receivables is disclosed in Note 18.

Credit risk concentration profile

The Group’s major concentration of credit risk relates to the amounts owing by 8 (2016: 5) customers, whichconstituted approximately 52% (2016: 43%) of its trade receivables as at the end of the reporting period.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 18.Deposits with banks and other financial institutions that are neither past due nor impaired are placed withreputable financial institutions.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 18.

(f) Fair values

Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximationof fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amountsare reasonable approximation of fair value:

NoteTrade and other receivables 18Trade and other payables 20Borrowings - with floating rate 21

30. Capital management

The primary objective of the Group’s capital management is to safeguard the Group’s ability to continue in operationsas a going concern in order to provide fair returns for shareholders and benefits for other stakeholders and to maintainan optimal capital structure to reduce the cost of capital. In order to maintain the optimal capital structure, the Groupmay, from time to time, adjust the dividend payout to shareholders, return capital to shareholders, issue new shares,redeem debts or sell assets to reduce debts, where necessary.

The Group considers its capital to comprise its ordinary share capital, retained earnings, share premium, share optionsreserve, warrants reserve and its foreign exchange translation reserve which are classified as equity in the statementsof financial position.

Pursuant to the requirements of Practice Note No.17/2005 of the Bursa Malaysia Securities, the Group is required tomaintain a consolidated shareholders’ equity equal to or not less than the 25% of the issued and paid-up share capital(excluding treasury shares) and such shareholders’ equity is not less than RM40.0 million. The Group has compliedwith this requirement for the financial year ended 31 August 2017.


31 AUGUST 2017


31. Segment information

No segmental information is provided as the Group is primarily involved in the healthcare industry and the Group’sactivities are predominantly in Malaysia. The overseas segment does not contribute more than 10% of the consolidatedrevenue and assets.

Financial information is presented to management in accordance with the measurement policies of MFRS and IFRS.There are no adjustments or eliminations made in preparing the Group's financial statements from the reportablesegment revenues, profit or loss, assets and liabilities.

Major customers

The Group does not have significant reliance on a single major customer, with whom the Group transacted ten percent(10%) or more of its revenue during the financial year.

32. Comparatives

(a) The comparatives covered a period of 15-months from 1 June 2015 to 31 August 2016. Accordingly, thecomparative amounts for statements of comprehensive income, statements of changes in equity, statements ofcash flow and the related notes are not comparable.

(b) The following comparative figures have been restated for the reclassification for computer software underdevelopment as at end of last financial period.

As previously stated Adjustment As restated RM'000 RM'000 RM'000

Statement of financial position as at 31 August 2016

Group

Property, plant and equipment 322,537 (1,050) 321,487

Intangible assets 193,045 1,050 194,095

This reclassification does not affect the statement of financial position of the Group as at 1 June 2015.


31 AUGUST 2017


33. Supplementary information

The breakdown of the retained profits of the Group and of the Company as at 31 August 2017 and 31 August 2016into realised and unrealised profits/(losses) are presented in accordance with the directive issued by Bursa MalaysiaSecurities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa MalaysiaSecurities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.


Total retained profits/(accumulated loss) of the Company and its subsidiaries: - Realised 53,952 30,845 2,528 (529) - Unrealised (10,683) (10,937) - -

Total retained profits/(accumulated loss) as per financial statements 43,269 19,908 2,528 (529)


31 AUGUST 2017

LIST OFPROPERTIES


Approximate Net book Description/ age of Gross value atLocation Existing use building Land area floor area Tenure 31.08.2017 (years) (square feet) (square feet) RM'000

Land and building at Private 9.75 261,369 235,256 Leasehold 79,002Lot No. 11, Jalan Teknologi hospital for 99 Taman Sains Selangor 1 yearsPJU 5, Kota Damansara expiring47810 Petaling Jaya 17 April Selangor Darul Ehsan 2108

Shoplot at Ground Floor - 8.75 1,873 6,625 Freehold 2,506No. 5, Jalan Merbah 3 Fertility Centre Bandar Puchong Jaya 1st Floor - Vacant47800 Puchong 2nd Floor - VacantSelangor Darul Ehsan 3rd Floor - For staff usage

PTB No.24436, Title No. Vacant - 180,292 - Freehold 180,000H.S (D) 566005 A parcel ofTown District of development landJohor Bahru approved forState of Johor Darul develomentTakzim of private (Located along Jalan medical centreStulang Darat, in thevicinity of Stulang Darat,Johor Bahru)

ANALYSIS OFSHAREHOLDINGS

AS AT 22 NOVEMBER 2017


NUMBER OF ISSUED SHARE CAPITAL : 1,736,240,769 ORDINARY SHARESCLASS OF SHARES : ORDINARY SHARESVOTING RIGHTS : ONE VOTE PER SHAREHOLDER ON A SHOW OF HANDS OR ONE VOTE PER ORDINARY SHARE ON A POLLNUMBER OF SHAREHOLDERS : 3,754

DISTRIBUTION OF SHAREHOLDINGS

No. of % of No. of % of IssuedSize of Holding Shareholders Shareholders Shares Share Capital

LESS THAN 100 165 4.40 6,139 0.00100 TO 1,000 249 6.63 170,135 0.011,001 TO 10,000 1,569 41.79 9,994,258 0.5710,001 TO 100,000 1,456 38.79 52,551,770 3.03100,001 TO LESS THAN 5% OF ISSUED SHARES 311 8.28 399,213,645 22.995% AND ABOVE OF ISSUED SHARES 4 0.11 1,274,304,822 73.40

TOTAL 3,754 100.00 1,736,240,769 100.00

THIRTY LARGEST SHAREHOLDERS(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE SAMEREGISTERED HOLDER)

No. of % of IssuedNo. Name Shares Share Capital

1. MAYBANK NOMINEES (ASING) SDN. BHD. 821,304,822 47.30 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR SASTERIA (M) PTE LTD (307715)]

2. UOB KAY HIAN NOMINEES (ASING) SDN. BHD. 230,000,000 13.25 [QUALIFIER: EXEMPT AN FOR UOB KAY HIAN (HONG KONG) LIMITED (A/C CLIENTS)]

3. DYAM TUNKU ISMAIL IBNI SULTAN IBRAHIM 133,000,000 7.66

4. BEST BLEND SDN. BHD. 90,000,000 5.18

5. UOB KAY HIAN NOMINEES (ASING) SDN. BHD. 80,333,333 4.63 [QUALIFIER: UOB KAY HIAN PTE LTD FOR SASTERIA (M) PTE LTD]

6. HSBC NOMINEES (ASING) SDN. BHD. 78,641,300 4.53 [QUALIFIER: EXEMPT AN FOR CREDIT SUISSE (HK BR-TST-ASING)]

7. UOB KAY HIAN NOMINEES (ASING) SDN. BHD. 29,467,400 1.70 [QUALIFIER: EXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS)]

8. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 26,293,000 1.51 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR SIOW WONG YEN @ SIOW KWANG HWA]

9. CIMSEC NOMINEES (ASING) SDN. BHD. 14,812,800 0.85 [QUALIFIER: EXEMPT AN FOR CIMB SECURITIES (SINGAPORE) PTE LTD (RETAIL CLIENTS)]

10. AFFIN HWANG NOMINEES (ASING) SDN. BHD. 11,742,333 0.68 [QUALIFIER: EXEMPT AN FOR DBS VICKERS SECURITIES (SINGAPORE) PTE LTD (CLIENTS)]


THIRTY LARGEST SHAREHOLDERS(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE SAMEREGISTERED HOLDER) (continued)

No. of % of IssuedNo. Name Shares Share Capital

11. UOB KAY HIAN NOMINEES (TEMPATAN) SDN. BHD. 9,989,700 0.58 [QUALIFIER: EXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS)]

12. ANASTASIA AMANDA BEH GAIK SIM 9,759,400 0.56

13. HSBC NOMINEES (ASING) SDN. BHD. 6,227,000 0.36 [QUALIFIER: EXEMPT AN FOR CREDIT SUISEE (SG BR-TST-ASING)]

14. LIM GAIK BWAY @ LIM CHIEW AH 5,260,700 0.30

15. SURINDER SINGH A/L RANBIR SINGH 4,533,333 0.26

16. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 4,200,100 0.24 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR HO LIH MENG]

17. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 4,190,000 0.24 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR WONG FUEI BOON]

18. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. 3,788,800 0.22 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR LIM ZHONG YONG]

19. WONG CHOON KEIT 3,511,900 0.20

20. JOO & LAM SENDIRIAN BERHAD 2,939,400 0.17

21. LAI WEI CHAI 2,490,000 0.14

22. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN. BHD. 2,300,000 0.13 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR HENG AH MOI (8060540)]

23. KOH PEE BOON 2,000,000 0.12

24. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 2,000,000 0.12 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR NG AIK SERN]

25. LIM ZHONG YONG 1,788,800 0.10

26. CARTABAN NOMINEES (ASING) SDN. BHD. 1,622,000 0.09 [QUALIFIER: EXEMPT AN FOR BOCI SECURITIES LTD (CLIENTS A/C)]

27. SIO TAT HIANG 1,611,200 0.09

28. CITIGROUP NOMINEES (ASING) SDN. BHD. 1,545,000 0.09 [QUALIFIER: EXEMPT AN FOR OCBC SECURITIES PRIVATE LIMITED (CLIENT A/C-NR)]

29. HOOI THIEN ENG 1,519,466 0.09

30. RHB NOMINEES (TEMPATAN) SDN. BHD. 1,400,000 0.08 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR HENG AH MOI]

1,588,271,787 91.47




SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS ASAT 22 NOVEMBER 2017

Direct Indirect No. of Shares % of Issued No. of Shares % of IssuedName Held Share Capital Held Share Capital

SASTERIA (M) PTE. LTD. 901,638,155 51.93 - -SASTERIA PTE. LTD. - - 901,638,155(1) 51.93LIM ENG HOCK - - 1,221,638,155(2) 70.36INCANTO INVESTMENTS LIMITED 230,000,000 13.25 90,000,000(3) 5.18BEST BLEND SDN. BHD. 90,000,000 5.18 - -DYAM TUNKU ISMAIL IBNI 133,000,000 7.66 - - SULTAN IBRAHIM

Notes:

(1) Deemed interested through its 100% shares in Sasteria (M) Pte. Ltd., pursuant to Section 8 of the Companies Act 2016.

(2) Deemed interested by virtue of his ultimate shareholdings in Sasteria (M) Pte. Ltd., Incanto Investments Limited and Best Blend Sdn. Bhd. pursuant to Section 8 of the Companies Act 2016.

(3) Deemed interested through its shareholding in Best Blend Sdn. Bhd., pursuant to Section 8 of the Companies Act 2016.

DIRECTORS’ SHAREHOLDINGS AS PER REGISTER OF DIRECTORS’ SHAREHOLDING AS AT 22 NOVEMBER 2017

Ordinary Shares Esos Direct Indirect No. of % of Issued No. of % of Issued No. of Shares Share Shares Share Option % of OptionName Held Capital Held Capital Granted granted#

PROFESSOR EMERITUS 500,000 0.03 200,000(1) 0.01 3,500,000 14.87 DATO’ DR. KHALID BIN ABDUL KADIRDATO’ DR. TAN KEE KWONG - - - - 2,000,000 8.49GARY HO KUAT FOONG - - - - 2,000,000 8.49CLAIRE LEE SUK LENG - - - - 2,000,000 8.49ROY QUEK HONG SHENG - - - - 3,500,000 14.87KAN KHEONG NG - - - - 2,000,000 8.49FREDDIE HENG KIM CHUAN - - - - - -

Notes:

(1) Deemed interested by virtue of his spouse’s interest pursuant to Section 59 of the Companies Act 2016.

# Based on the options granted as at 22 November 2017 under Employees’ Share Option Scheme (“ESOS”)




ANALYSIS OFWARRANT HOLDINGS AS AT 22 NOVEMBER 2017

NO. OF 2015/2019 WARRANTS ISSUED : 866,427,384NO. OF 2015/2019 WARRANTS OUTSTANDING : 866,344,784

DISTRIBUTION OF WARRANT HOLDINGS

No. of % of Warrant Warrant No. of % of IssuedSize of Holding Holders Holders Warrants Warrants

LESS THAN 100 283 12.24 9,814 0.00100 TO 1,000 184 7.96 108,240 0.011,001 TO 10,000 740 31.99 3,751,123 0.4310,001 TO 100,000 820 35.45 32,063,367 3.70100,001 TO LESS THAN 5% OF ISSUED 283 12.23 152,343,100 17.58 WARRANTS5% AND ABOVE OF ISSUED WARRANTS 3 0.13 678,069,140 78.27

TOTAL 2,313 100.00 866,344,784 100.00

THIRTY LARGEST WARRANT HOLDERS(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE SAMEREGISTERED HOLDER)

No. of % of IssuedNo. Name Warrants Warrants

1. MAYBANK NOMINEES (ASING) SDN. BHD. 410,652,474 47.40 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR SASTERIA (M) PTE LTD (307715)]

2. UOB KAY HIAN NOMINEES (ASING) SDN. BHD. 187,416,666 21.63 [QUALIFIER: EXEMPT AN FOR UOB KAY HIAN (HONG KONG) LIMITED (A/C CLIENTS)]

3. DYAM TUNKU ISMAIL IBNI SULTAN IBRAHIM 80,000,000 9.23

4. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR LIM ZHONG YONG] 12,888,800 1.49

5. UOB KAY HIAN NOMINEES (TEMPATAN) SDN. BHD. 7,898,800 0.91 [QUALIFIER: EXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS)]

6. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 6,099,900 0.70 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR SIOW WONG YEN @ SIOW KWANG HWA]

7. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. 3,000,000 0.35 [QUALIFIER: CHOOI HEONG YENG]

8. HLB NOMINEES (TEMPATAN) SDN.BHD. 2,924,700 0.34 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR WONG TAK KEONG]

9. PUA LAY TEE 2,730,000 0.32

10. BEH ENG PAR 2,620,950 0.30


THIRTY LARGEST WARRANT HOLDERS(WITHOUT AGGREGATING SECURITIES FROM DIFFERENT SECURITIES ACCOUNTS BELONGING TO THE SAMEREGISTERED HOLDER) (continued)

No. of % of IssuedNo. Name Warrants Warrants

11. JF APEX NOMINEES (TEMPATAN) SDN. BHD. 2,500,000 0.29 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR LEE YEOW TENG (MARGIN)]

12. MERCSEC NOMINEES (TEMPATAN) SDN. BHD. 2,500,000 0.29 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR WONG FUEI BOON]

13. LEE WEE LIAN 2,270,000 0.26

14. SURINDER SINGH A/L RANBIR SINGH 2,241,666 0.26

15. YIELDFORCE SDN. BHD. 1,950,000 0.23

16. SIO TAT HIANG 1,863,900 0.22

17. AFFIN HWANG NOMINEES (ASING) SDN. BHD. 1,750,000 0.20 [QUALIFIER: EXEMPT AN FOR DBS VICKERS SECURITIES (SINGAPORE) PTE LTD (CLIENTS)]

18. KEE CHENG HOON 1,720,000 0.20

19. PUA LAI HWA 1,535,000 0.18

20. YONG KWEE LIAN 1,500,000 0.17

21. TEE MING HOCK 1,440,000 0.17

22. YEO ANN SECK 1,400,000 0.16

23. AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD. 1,330,000 0.15 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR YEW BOON HEAN (YEW0048C)]

24. BALACHANDRAN A/L APPOO 1,326,000 0.15

25. KEE CHENG CHOOI 1,300,000 0.15

26. GAN SENG KEE 1,210,000 0.14

27. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. 1,150,000 0.13 [QUALIFIER: PLEDGED SECURITIES ACCOUNT FOR CHOY CHUN LIM]

28. MAYBANK NOMINEES (TEMPATAN) SDN. BHD. 1,100,000 0.13 [QUALIFIER: LEE CHIANG SHING]

29. KENANGA NOMINEES (TEMPATAN) SDN. BHD. [QUALIFIER: CHONG MEI] 1,068,800 0.12

30. JONATHAN LEE SZE SENG 1,050,000 0.12

748,437,656 86.39


ANALYSIS OFWARRANT HOLDINGS


DIRECTORS’ WARRANT HOLDINGS AS PER REGISTER OF DIRECTORS’ WARRANT HOLDINGS AS AT 22 NOVEMBER 2017

Direct Indirect No. of No. of Warrants % of Issued Warrants % of IssuedName Held Warrant Held Warrant

PROFESSOR EMERITUS DATO’ 250,000 0.03 100,000(1) 0.01 DR. KHALID BIN ABDUL KADIRDATO’ DR. TAN KEE KWONG - - - -GARY HO KUAT FOONG - - - -CLAIRE LEE SUK LENG - - - -ROY QUEK HONG SHENG - - - -KAN KHEONG NG - - - -FREDDIE HENG KIM CHUAN - - - -

Notes:

(1) Deemed interested by virtue of his spouse’s interest pursuant to Section 59 of the Companies Act 2016.


ANALYSIS OFWARRANT HOLDINGS


NOTICE IS HEREBY GIVEN that the Fifteenth Annual General Meeting of TMC LIFE SCIENCES BERHAD will be held atGreens III, Sport Wings, Tropicana Golf & Country Resort Berhad, Jalan Kelab Tropicana, Tropicana Golf & Country Resort,47410 Petaling Jaya, Selangor Darul Ehsan on Monday, 29 January 2018 at 10.00 a.m. for the following purposes:-

AGENDA

1. To lay before the meeting the Audited Financial Statements for the financial yearended 31 August 2017 together with the Reports of the Directors and Auditorsthereon.

2. To approve a final single tier dividend of 0.167 sen per ordinary share in respect ofthe financial year ended 31 August 2017.

3. To approve the payment of Directors’ Remuneration (excluding Directors’ fees)payable to the Board of the Company and its subsidiaries up to an amount ofRM240,500 for the financial year ended 31 August 2017 and financial years ending31 August 2018 and 31 August 2019.

4. To approve the payment of Directors’ Fees amounting to RM732,000 for the financialyears ending 31 August 2018 and 31 August 2019.

5. To re-elect the following Directors who retire in accordance with Article 96(1) of theConstitution of the Company and being eligible, offer themselves for re-election:

(a) Dato’ Dr. Tan Kee Kwong(b) Roy Quek Hong Sheng

6. To re-appoint Messrs. Ernst & Young as the Auditors of the Company and toauthorise the Directors to fix their remuneration.

AS SPECIAL BUSINESSES

To consider and if thought fit, to pass the following Ordinary Resolutions with or withoutmodifications:- 7. AUTHORITY TO ISSUE AND ALLOT SHARES

“THAT subject always to the Companies Act 2016, Constitution of the Companyand approvals from Bursa Malaysia Securities Berhad and any othergovernmental/regulatory bodies, where such approval is necessary, authority beand is hereby given to the Directors pursuant to Section 75 of the Companies Act2016 to issue and allot not more than ten percent (10%) of the issued capital(excluding treasury shares) of the Company at any time upon any such terms andconditions and for such purposes as the Directors may in their absolute discretiondeem fit or in pursuance of offers, agreements or options to be made or granted bythe Directors while this approval is in force until the conclusion of the next AnnualGeneral Meeting of the Company pursuant to Section 76 of the Companies Act2016 and that the Directors be and are hereby further authorised to make or grantoffers, agreements or options which would or might require shares to be issuedafter the expiration of the approval hereof.”

8. CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTOR –DATO’ DR. TAN KEE KWONG

“THAT subject to the passing of Ordinary Resolution 4, authority be and is herebygiven to Dato’ Dr. Tan Kee Kwong who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years,to continue act as an Independent Non-Executive Director of the Company.”

9. To transact any other business of which due notice shall have been given inaccordance with the Companies Act 2016.

(Please refer to Explanatory Note 1)

Ordinary Resolution 1



Ordinary Resolution 4Ordinary Resolution 5




NOTICE TOSHAREHOLDERS


NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN that a final single-tier dividend of 0.167 sen per ordinary share in respect of the financialyear ended 31 August 2017, if approved by shareholders, will be payable on 28 February 2018 to shareholders whosenames appear in the Record of Depositors on 14 February 2018.

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

a) Securities transferred into the Depositor’s Securities Account before 4.00 p.m. on 14 February 2018 in respect of transfers; and

b) Securities bought on the Bursa Malaysia Securities Berhad (“Bursa Securities”) on a cum entitlement basis according to the Rules of the Bursa Securities.

By Order of the Board

TEO MEE HUI (MAICSA 7050642)NG SALLY (MAICSA 7060343)Company Secretaries

Selangor Darul Ehsan29 December 2017

Notes:-

i) A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attendand vote in his stead. A proxy need not be a member of the Company and a member may appoint any person to behis proxy without limitation.

ii) A member shall be entitled to appoint more than one (1) proxy (subject always to a maximum of two (2) proxies) toattend and vote at the same meeting. Where a member appoints two (2) proxies, the appointment shall be invalidunless the member specifies the proportions of his shareholdings to be represented by each proxy.

iii) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991,such member may appoint at least one (1) proxy but not more than two (2) proxies in respect of each securitiesaccount it holds with ordinary shares of the Company standing to the credit of the said securities account.

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

v) If no name is inserted in the space provided for the name of your proxy, the Chairman of the meeting will act as yourproxy.

vi) The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or anotarially certified copy thereof, must be deposited at the registered office of the Company at 10th Floor, Menara HapSeng, No. 1 & 3, Jalan P.Ramlee, 50250 Kuala Lumpur not less than forty-eight (48) hours before the time for holdingthe meeting or any adjournment thereof.

vii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorisedin writing or, if the appointor is a corporation, either under its common seal or under the hand of an officer or attorneyduly authorised.

viii) For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting theBursa Malaysia Depository Sdn. Bhd. to make available to the Company pursuant to Article 61 of the Constitution theCompany, a Record of Depositors as at 22 January 2018 and only a Depositor whose name appear on such Recordof Depositors shall be entitled to attend this meeting.

ix) Explanatory notes on Ordinary and Special Business



Item 1 of the AgendaAudited Financial Statements for the financial year ended 31 August 2017.

This Agenda is meant for discussion only as the provision of Section 248 and Section 340(1)(a) of the Companies Act2016 does not require a formal approval of the shareholders and hence, is not put forward for voting.

Ordinary Resolution 2 Directors’ Remuneration (excluding Directors’ fees) of the Company

Pursuant to Section 230(1) of the Companies Act 2016, the fee of the Directors, and any benefits payable to theDirectors including any compensation for loss of employment of a director or former director of a public company ora listed company and its subsidiaries, shall be approved at a general meeting.

In this respect, the Company will seek the shareholders’ approval at the Fifteenth Annual General Meeting (“AGM”)on the payment of Directors’ remuneration (excluding Directors’ fees) for the financial year ended 31 August 2017and financial years ending 31 August 2018 and 31 August 2019.

The Directors’ remuneration shall comprise meeting allowances of RM240,500 payable to the Directors of the Companyas follows:

*Benefit-In-Kind (RM)

Non-Executive Directors 240,500

Total 240,500

In determining the estimated total amount of the Directors’ remuneration, the Board considered various factors including thenumber of scheduled meetings for the Board and Board Committees as well as the number of Directors involved in thesemeetings.

Payment of Directors’ remuneration will be made by the Company on a monthly basis and/or as and when incurred if theproposed Resolution 2 has been passed at the Fifteenth AGM. The Board is of the view that it is just and equitable for theDirectors to be paid such payment on a monthly basis and/or as and when incurred, particularly after they have dischargedtheir responsibilities and rendered their services to the Company and its subsidiaries (if any) throughout the period as statedherein.

Ordinary Resolution 3 Directors’ Fees

The shareholders of the Company had on 23 January 2017 approved the payment of Directors’ Fees for the year ended 31August 2016 at the Thirteenth AGM and a shareholders’ mandate had been obtained thereat in relation to the payment ofthe following Directors’ Fees to Non-Executive Directors effective from financial year commencing 1 September 2016 untilresolved otherwise:

i) Directors’ fee of RM90,000 per annum for the Non-Executive Chairman;ii) Directors’ fee of RM60,000 per annum for the Non-Executive Director cum Chairman of the Audit Risk and Management Committee; andiii) Directors’ fee of RM48,000 per annum for each other Non-Executive Directors.

As the aforesaid shareholders’ mandate had been obtained and there was no increase in Directors’ fee for the financial yearended 31 August 2017, approval for payment of Directors’ fee for the financial year ended 31 August 2017 would not besought at the Fifteenth AGM.

In view of the recent amendment to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad to be effectivefrom 2 January 2018, the fees of directors, and any benefits payable to directors shall be subject to annual shareholders’approval at a general meeting.

In this respect, the Board agreed that the shareholders’ approval shall be sought at the Fifteenth AGM on the payment ofDirectors’ Fees for the financial years ending 31 August 2018 and 31 August 2019.



Ordinary Resolution 7Authority to Issue and Allot Shares

The proposed resolution is primarily to give flexibility to the Board of Directors to issue and allot shares to such persons atany time in their absolute discretion without convening a general meeting. This authorisation will expire at the conclusion ofthe next Annual General Meeting of the Company.

This is the renewal of the mandate obtained from the members at the last Annual General Meeting (“the previous mandate”).The purpose of this general mandate is for possible fund raising exercises including but not limited to further placement ofshares, for purpose of funding current and/or future investment projects, working capital, repayment of borrowings and/oracquisitions.

The previous mandate was not utilised and accordingly no proceeds were raised.

Ordinary Resolution 8Continuing in Office as Independent Non-Executive Director

The Nominating Committee has assessed the independence of Dato’ Dr. Tan Kee Kwong, who has served as IndependentNon-Executive Director of the Company for a cumulative term of more than nine years, and recommended him to continueact as an Independent Non-Executive Director of the Company based on the following justifications:-

a. he has fulfilled the criteria under the definition of Independent Director as stated in the Main Market Listing Requirementsof Bursa Malaysia Securities Berhad, and thus, he would be able to bring an element of objectivity to the Board;

b. he has been with the Company for more than 9 years and was familiar with the Company’s business operations;c. he has vast and diverse range of experiences and therefore would be able to provide constructive opinion, independent

judgment and to act in the best interest of the Company and shareholders;d. he has devoted sufficient time and attention to his professional obligations for informed and balanced decision making;e. he has shown great integrity and independence, and had not entered into any related party transactions with the Group;

andf. he has continued to exercise his due care during his tenure as Independent Non-Executive Director of the Company

and carried out his professional duties in the interest of the Company and shareholders.


*I/We *NRIC/ Passport/ Company No

of

being a member(s) of TMC LIFE SCIENCES BERHAD (624409-A) hereby appoints

Name Address NRIC/ Passport No. Proportion of Shareholdings (%)

*And/or (delete as appropriate)

or failing *him/her, THE CHAIRMAN OF THE MEETING, as *my/our *proxy/proxies, to vote for *me/us on *my/our behalf at theFIFTEENTH ANNUAL GENERAL MEETING of the Company to be held at Greens III, Sport Wings, Tropicana Golf & CountryResort Berhad, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Monday,29 January 2018 at 10.00 a.m. and at any adjournment thereof.

# If you wish to appoint other person / persons to be your proxy / proxies, kindly delete the words “or failing him / her, THECHAIRMAN OF THE MEETING” and insert the name / names of the person / persons desired.

Please indicate with an “X” in the space provided, how you wish your vote to be cast in respect of the following resolutions. Inthe absence of specific directions, your proxy may vote or abstain at his/her discretion. If you appoint two (2) proxies, pleasespecify the proportions of holdings to be represented by each proxy.

My/our proxy/proxies is/are to vote as indicated below:

Ordinary Resolutions For Against

* Delete if not applicable

Dated this ......... day of………………………..… 2018

Signature/Common Seal of Shareholder

PROXY FORM

1 To approve a final single tier dividend

2 To approve the payment of Directors’ Remuneration (excluding Directors’ fees) payable to the Board of the Company and its subsidiaries of the

Company

3 To approve the payment of Directors’ Fees

4 To re-elect Dato’ Dr. Tan Kee Kwong as Director

5 To re-elect Roy Quek Hong Sheng as Director

6 To re-appoint Messrs Ernst & Young as Auditors of the Company

7 To approve the Authority to Issue and Allot Shares

8 To approve the continuing in office for Dato’ Dr Tan Kee Kwong as an Independent Non-Executive Director.

Number of shares held:-

CDS account no.:-

Telephone no.:-

Notes:-

i) A member of the Company entitled to attend and vote at the meetingis entitled to appoint a proxy or proxies to attend and vote in his stead.A proxy need not be a member of the Company and a member mayappoint any person to be his proxy without limitation.

ii) A member shall be entitled to appoint more than one (1) proxy (subjectalways to a maximum of two (2) proxies) to attend and vote at the samemeeting. Where a member appoints two (2) proxies, the appointmentshall be invalid unless the member specifies the proportions of hisshareholdings to be represented by each proxy.

iii) Where a member is an authorised nominee as defined under theSecurities Industry (Central Depositories) Act 1991, such member mayappoint at least one (1) proxy but not more than two (2) proxies inrespect of each securities account it holds with ordinary shares of theCompany standing to the credit of the said securities account.

iv) Where a member of the Company is an exempt authorised nomineewhich holds ordinary shares in the Company for multiple beneficialowners in one securities account (“omnibus account”), there is no limitto the number of proxies which the exempt authorised nominee mayappoint in respect of each omnibus account it holds.

v) If no name is inserted in the space provided for the name of your proxy,the Chairman of the meeting will act as your proxy.

vi) The instrument appointing a proxy and the power of attorney or otherauthority (if any), under which it is signed or a notarially certified copythereof, must be deposited at the registered office of the Company at10th Floor, Menara Hap Seng, No. 1 & 3, Jalan P.Ramlee, 50250 KualaLumpur not less than forty-eight (48) hours before the time for holdingthe meeting or any adjournment thereof.

vii) The instrument appointing a proxy shall be in writing under the hand ofthe appointor or of his attorney duly authorised in writing or, if theappointor is a corporation, either under its common seal or under thehand of an officer or attorney duly authorised.

viii) For the purpose of determining who shall be entitled to attend thismeeting, the Company shall be requesting the Bursa MalaysiaDepository Sdn. Bhd. to make available to the Company pursuant toArticle 61 of the Constitution the Company, a Record of Depositors asat 22 January 2018 and only a Depositor whose name appear on suchRecord of Depositors shall be entitled to attend this meeting.

The Company SecretaryTMC Life Sciences Berhad802, 8th Floor, Block C, Kelana Square17 Jalan SS7/2647301 Petaling JayaSelangor Darul Ehsan

AffixStampHere

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