directors’ report and audited financial statements 31 ... · 410591-t merchantrade asia sdn. bhd....

M E R C H A N T R A D E A S I A S D N . B H D . (410591-T)

(Incorporated in Malaysia)

Directors’ Report and Audited Financial Statements

31 December 2017

410591-T

Merchantrade Asia Sdn. Bhd. (Incorporated in Malaysia)

Contents Page

Directors' report 1 - 5

Statement by directors 6

Statutory declaration 6

Independent auditors' report 7 - 10

Statements of comprehensive income 11 - 12

Statements of financial position 13 - 14

Statements of changes in equity 15 - 16

Statements of cash flows 17 - 19

Notes to the financial statements 20 - 96

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Directors' report

Principal activities

Results

Group CompanyRM'000 RM'000

Net profit for the year 7,395 8,523

Attributable to:Equity holders of the parent 8,009 8,523Non-controlling interests (614) -

7,395 8,523

Dividend

The directors have pleasure in presenting their report together with the audited financialstatements of the Group and of the Company for the financial year ended 31 December 2017.

The principal activities of the Company is principally engaged in the money services business,namely remittance and currency business, payment business and communication business.

The principal activities and other information of the subsidiaries and the associate are disclosedin Note 14 and Note 15, respectively.

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

No dividend has been paid or declared by the Company since the end of the previous financialyear.

In the opinion of the directors, the results of the operations of the Group and of the Companyduring the financial year were not substantially affected by any item, transaction or event of amaterial and unusual nature.

The directors do not recommend the payment of any dividend in respect of the current financialyear.

During the financial year, there were no indemnity coverage and insurance premium paid for thedirectors and the officers of the Company.

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Directors

Directors of the Company:

Dato' Mohzani Bin Datuk Dr Abdul WahabRamasamy a/l K. Veeran*Ravindra a/l Vamathevan*Wong Chui Fen (Alternate director to Dato' Mohzani Bin Datuk Dr Abdul Wahab)Brian Wong Wye PongDato' Abdul Aziz bin Abu BakarTetsu FukuokaRyo Kawaguchi (Alternate director to Tetsu Fukuoka)

*These directors are also directors of the Company's subsidiaries.

Directors of the subsidiaries:

Kwon Min KuenMilan TamangSarveswaran a/l Raja Gopal (Alternate director to Amarjeet Kaur a/p Ranjit Singh)Shin Yoon Chul (Alternate director to Kwon Min Keun) (Appointed on 09 February 2018)Jin Sanghyup (Alternate director to Oh Taeseok) (Appointed on 09 February 2018)Oh Taeseok (Appointed on 31 May 2017)Lee Jin Woo (Appointed on 31 May 2017 and resigned on 25 July 2017)Mohit Davar (Appointed on 3 August 2017)Amarjeet Kaur a/p Ranjit Singh (Appointed on 29 August 2017)S Narayanan a/l Subbarayan (Appointed on 6 October 2017)An Hongeun (Alternate director to Kwon Min Kuen) (Resigned on 09 February 2018)Sheetal Maya a/p Suk Bahdur Gurung (Resigned on 29 August 2017)Woo Youngho (Alternate director to Bang Jaegyu) (Resigned on 31 May 2017)Bang Jaegyu (Resigned on 31 May 2017)

Directors' benefits

The names of the directors of the Company and its subsidiaries in office since the beginning ofthe financial year to the date of this report are:

Neither at the end of the financial year, nor at any time during that year, did there subsist anyarrangement to which the Company was a party, whereby the directors might acquire benefits bymeans of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director of the Company has received or becomeentitled to receive a benefit (other than benefits included in the aggregate amount of emolumentsreceived or due and receivable by a director or the fixed salary of a full time employee of theCompany as shown in Note 7 to the financial statements) by reason of a contract made by theCompany or a related corporation with any director or with a firm of which any director is amember, or with a company in which the director has a substantial financial interest other than asdisclosed in Note 29 to the financial statements.

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Directors' interests

Balance as Balance asCompany at 01.01.2017 Bought Sold at 31.12.2017

Direct interestRamasamy a/l K. Veeran 2,539,435 - - 2,539,435Ravindra a/l Vamathevan 1,349,065 - - 1,349,065

Issue of shares

Other statutory information

(a)

(i)

(ii)

(b)

(i)

(ii)

it necessary to write off any bad debts or the amount of the allowance for doubtful debtsinadequate to any substantial extent; and

the values attributed to the current assets in the financial statements of the Group andof the Company misleading.

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

to ascertain that proper action had been taken in relation to the writing off of bad debtsand the making of allowance for doubtful debts and satisfied themselves that there wereno known bad debts and that adequate allowance had been made for doubtful debts;and

to ensure that any current assets which were unlikely to realise their value as shown inthe accounting records in the ordinary course of business had been written down to anamount which they might be expected so to realise.

According to the register of directors' shareholdings, the interests of directors in office at the endof the financial year in shares and options over shares in the Company and its relatedcorporations during the financial year were as follows:

Number of ordinary shares

None of the other directors in office at the end of the financial year had any interest in shares inthe Company or its related corporations during the financial year.

Before the statements of comprehensive income and statements of financial position of theGroup and of the Company were made out, the directors took reasonable steps:

The Group and the Company have not issued any new shares during the financial year.

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Other statutory information (cont'd.)

(c)

(d)

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

(i)

(ii)

(f) In the opinion of the directors:

(i)

(ii)

Significant and subsequent events

any contingent liability of the Group or of the Company which has arisen since the endof the financial year.

At the date of this report, the directors are not aware of any circumstances which havearisen which would render adherence to the existing method of valuation of assets orliabilities of the Group and of the Company misleading or inappropriate.

no item, transaction or event of a material and unusual nature has arisen in the intervalbetween the end of the financial year and the date of this report which is likely to affectsubstantially the results of the operations of the Group or of the Company for thefinancial year in which this report is made.

any charge on the assets of the Group or of the Company which has arisen since theend of the financial year which secures the liabilities of any other person; or

At the date of this report, the directors are not aware of any circumstances not otherwisedealt with in this report or financial statements of the Group and of the Company whichwould render any amount stated in the financial statements misleading.

no contingent or other liability has become enforceable or is likely to becomeenforceable within the period of twelve months after the end of the financial year whichwill or may affect the ability of the Group or of the Company to meet their obligationswhen they fall due; and

Significant events during and subsequent events after the financial year end are as disclosed inNote 37 to the financial statements.

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Statements of comprehensive incomeFor the financial year ended 31 December 2017

Note 2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Revenue 3 148,213 160,812 147,038 160,473Cost of sales 4 (43,177) (72,936) (43,425) (72,633)Gross profit 105,036 87,876 103,613 87,840Other income 5 627 7,489 896 7,639Other expenses 6 (1,275) (321) (1,277) (313)Administrative expenses (27,721) (27,148) (26,803) (26,692)Personnel expenses (47,981) (40,482) (47,511) (40,192)Depreciation and amortisation (6,211) (5,268) (5,613) (4,770)Selling and marketing expenses (8,583) (10,044) (8,371) (10,018)Operating profit 7 13,892 12,102 14,934 13,494Finance costs 8 (2,440) (484) (2,440) (484)Profit before taxation 11,452 11,618 12,494 13,010Taxation 9 (4,057) (4,529) (3,971) (4,529)Net profit for the year 7,395 7,089 8,523 8,481

Other comprehensive income:

Other comprehensive income not reclassified to profit or loss in subsequent periods: Revaluation of properties 10 246 - 246 - Deferred tax effects in relation to revaluation of properties 19 (59) - (59) -

Other comprehensive income not reclassified to profit or loss in subsequent periods, net of tax 187 - 187 -

Total comprehensive income for the year, net of tax 7,582 7,089 8,710 8,481

CompanyGroup

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Statements of comprehensive incomeFor the financial year ended 31 December 2017 (cont'd.)

Note 2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Profit/(loss) attributable to:Equity holders of the parent 8,009 7,763 8,523 8,481Non-controlling interests (614) (674) - -

7,395 7,089 8,523 8,481

Other comprehensive income attributable to:Equity holders of the parent 187 - 187 -Non-controlling interests - - - -

187 - 187 -

Total comprehensive income/(loss) attributable to:Equity holders of the parent 8,196 7,763 8,710 8,481Non-controlling interests (614) (674) - -

7,582 7,089 8,710 8,481

Earnings per share attributable to equity holders of the parent (RM per share)Basic and diluted 28 0.92 0.89 0.98 0.98

Group Company

The accompanying accounting policies and explanatory information form an integral part of thefinancial statements.

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Statements of financial positionAs at 31 December 2017

Note 2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

AssetsNon-current assetsProperty and equipment 10 18,501 18,095 17,702 17,191Intangible assets 11 7,997 6,299 6,787 4,712Goodwill 12 10,482 - 9,898 -Investments in subsidiaries 14 - - 4,630 3,060Investment in an associate 15 1 - 1 -Total non-current assets 36,981 24,394 39,018 24,963

Current assetsInventories 16 1,278 1,993 1,269 1,846Trade receivables 17 42,455 41,217 41,892 41,195Non-trade receivables, deposits and prepayments 18 9,857 10,220 9,931 10,153Tax recoverable 110 404 110 404Financial assets at fair value through profit or loss 20 22,565 18,468 22,272 17,449Deposits and placements with a licensed bank 21 - 8,937 - 8,937Cash and short-term funds 22 112,980 86,133 111,670 85,866Total current assets 189,245 167,372 187,144 165,850

Total assets 226,226 191,766 226,162 190,813

Equity and liabilitiesShare capital 23 55,555 8,680 55,555 8,680Share premium 23 - 46,875 - 46,875Revaluation reserve 24 1,178 991 1,178 991Retained profits 62,246 54,237 63,772 55,249Equity attributable to equity holders of the parent 118,979 110,783 120,505 111,795Non-controlling interests 1,708 1,969 - -Total equity 120,687 112,752 120,505 111,795

Group Company

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Statements of financial positionAs at 31 December 2017 (cont'd.)

Note 2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Non-current liabilitiesBorrowings 25 33,800 19,903 33,800 19,903Deferred tax liability 19 992 749 992 749Total non-current liabilities 34,792 20,652 34,792 20,652

Current liabilitiesSettlement obligations 26 48,444 35,238 48,429 35,238Tax payable 108 - - -Non-trade payables and accruals 27 11,895 14,066 12,136 14,070Borrowings 25 10,300 9,058 10,300 9,058Total current liabilities 70,747 58,362 70,865 58,366Total liabilities 105,539 79,014 105,657 79,018

Total equity and liabilities 226,226 191,766 226,162 190,813


Group Company

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Statements of changes in equityFor the financial year ended 31 December 2017

Distributable Total Non-Share Share Revaluation/ Retained shareholders' controlling Total

capital premium reserve profits equity interests equityRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Group (Note 23) (Note 23) (Note 24)

At 1 January 2017 8,680 46,875 991 54,237 110,783 1,969 112,752Profit for the year - - - 8,009 8,009 (614) 7,395Other comprehensive income - - 187 - 187 - 187Total comprehensive income for the year - - 187 8,009 8,196 (614) 7,582Acquisition during the year (Note 13(i)) - - - - - 306 306Investment in a subsidiary - - - - - 47 47Transfer to share capital (Note 23) 46,875 (46,875) - - - - -At 31 December 2017 55,555 - 1,178 62,246 118,979 1,708 120,687

At 1 January 2016 8,680 46,875 991 46,474 103,020 2,643 105,663Total comprehensive income for the year - - - 7,763 7,763 (674) 7,089At 31 December 2016 8,680 46,875 991 54,237 110,783 1,969 112,752

<--- Non-distributable --->

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Statements of changes in equityFor the financial year ended 31 December 2017 (cont'd.)

DistributableShare Share Revaluation Retained Total

capital premium reserve profits equityRM'000 RM'000 RM'000 RM'000 RM'000

(Note 23) (Note 23) (Note 24)Company

At 1 January 2017 8,680 46,875 991 55,249 111,795Profit for the year - - - 8,523 8,523Other comprehensive income - - 187 - 187Total comprehensive income for the year - - 187 8,523 8,710Transfer to share capital (Note 23) 46,875 (46,875) - - -At 31 December 2017 55,555 - 1,178 63,772 120,505

At 1 January 2016 8,680 46,875 991 46,768 103,314Total comprehensive income for the year - - - 8,481 8,481At 31 December 2016 8,680 46,875 991 55,249 111,795

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

<--- Non-distributable --->

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Statements of cash flowsFor the financial year ended 31 December 2017

Note 2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Cash flows from operating activitiesProfit before taxation 11,452 11,618 12,494 13,010Adjustments for: Depreciation of property

and equipment 7,10 4,497 4,127 4,280 3,947 Amortisation of intangible

assets 7,11 1,714 1,141 1,333 823 Property and equipment

written off 7,10 - 73 - -Inventories written down 4,16 243 - 243 -

Interest income 5 (307) (267) (307) (267) Finance costs 8 2,440 484 2,440 484

Income from investmentsin unit trust funds 5 (53) (89) (29) (41)

Unrealised foreignexchange loss/(gain) 5,6 1,193 (7,110) 1,195 (7,110)

Operating profit before changes in working capital 21,179 9,977 21,649 10,846Changes in working capital: Decrease in inventories 472 4,391 333 4,539 Increase in trade and

non-trade receivables,deposits and prepayments (1,929) (27,615) (3,489) (26,531)

Increase in settlementobligations, non-tradepayables and accruals 10,882 18,727 13,117 20,485

Cash generated from operations 30,604 5,480 31,610 9,339Interest paid on bank overdraft 8 (197) (197) (197) (197)Income taxes paid (3,471) (3,765) (3,493) (3,765)Net cash generated from operating activities 26,936 1,518 27,920 5,377

Group Company

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Statements of cash flowsFor the financial year ended 31 December 2017 (cont'd.)

Note 2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Cash flows from investing activitiesDecrease/(increase) in deposits and placements with a licensed bank 8,937 (1,052) 8,937 (1,052)Purchase of property and equipment 10 (2,863) (4,796) (2,848) (4,707)Purchase of intangible assets 11 (3,380) (3,565) (3,376) (3,011)Disposal of/(investment in) unit trust funds 1,885 (970) 1,159 -Acquisition of a subsidiary 13(i) (250) - (1,500) -Incorporation of a subsidiary 14 - - (70) -Investment in an associate 15 (1) - (1) -Acquisition of money changing business 13(ii) (11,790) - (11,790) -Interest received 384 254 384 254Net cash used in investing activities (7,078) (10,129) (9,105) (8,516)

Cash flows from financing activitiesDrawdown of term loans 25 25,000 20,000 25,000 20,000Repayment of hire-purchase payables - (120) - (120)Placement in Debt Service Reserve Account ("DSRA") with a licensed bank 22,25 (318) (962) (318) (962)Repayment of term loans (2,878) (1,130) (2,878) (1,130)Finance cost paid (2,168) (180) (2,168) (180)Net cash generated from financing activities 19,636 17,608 19,636 17,608

Net increase in cash and cash equivalents 39,494 8,997 38,451 14,469Cash and cash equivalents at 1 January 94,478 85,481 94,211 79,742Cash and cash equivalents at 31 December 133,972 94,478 132,662 94,211

Group Company

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Statements of cash flowsFor the financial year ended 31 December 2017 (cont'd.)

Note 2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Cash and cash equivalents comprise:Cash and bank balances 22 41,814 23,095 40,504 22,828Fixed deposits with licensed banks with original maturity of less than 3 months 22 - 67 - 67Short-term money market deposits 22 3,654 - 3,654 -

Pre-funding to disbursement partner banks 22 66,232 62,009 66,232 62,009

Bank overdrafts 25 - (6,983) - (6,983)Foreign currencies held for trading 20 22,272 16,290 22,272 16,290

133,972 94,478 132,662 94,211


Group Company

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Notes to the financial statementsFor the financial year ended 31 December 2017

1. Corporate information

2. Significant accounting policies

2.1 Basis of preparation

2.2 Presentation of financial statements

The Company is a private limited liability company, incorporated and domiciled in Malaysia.The Company commenced business in February 2002.

The registered office of the Company is located at Menara UOA Bangsar, A-33-1, Level 33,Tower A, No.5, Jalan Bangsar Utama 1, Bangsar, 59000 Kuala Lumpur.

The principal place of business is located at Suite 513, 5th Floor, Block A, Damansara Intan,No 1, Jalan SS20/27, 47400 Petaling Jaya, Selangor Darul Ehsan.

The principal activities of the Company is principally engaged in the money servicesbusiness, namely remittance and currency business, payment business and communicationbusiness.

The principal activities and other information of the subsidiaries and the associate aredisclosed in Note 14 and Note 15, respectively.

The financial statements of the Group and the Company have been prepared inaccordance with Malaysian Financial Reporting Standards ("MFRS"), InternationalFinancial Reporting Standards ("IFRS") and the requirements of the Companies Act,2016 in Malaysia.

The financial statements of the Group and the Company have been prepared under thehistorical cost convention, unless otherwise stated in the significant accounting policies.

The financial statements are presented in Ringgit Malaysia ("RM") and all values arerounded to the nearest thousand ("RM'000") except where otherwise indicated.

The financial statements for the year ended 31 December 2017 were approved andauthorised by the Board of Directors on 21 March 2018.

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2. Significant accounting policies (cont'd.)

2.3 Changes in accounting policies

Annual Improvements to MFRS Standards 2014-2016 CycleAmendments to MFRS 107 Disclosure InitiativeAmendments to MFRS 112 Recognition of Deferred Tax for Unrealised Losses

2.4 Standards issued but not yet effective

Effective for financial periods beginning on or after 1 January 2018

Annual Improvements to MFRS Standards 2014-2016 CycleAmendments to MFRS 2 Classification and Measurement of Share-based Payment TransactionsMFRS 9 Financial InstrumentsMFRS 15 Revenue from Contracts with CustomersClarifications to MFRS 15Amendments to MFRS 4 Applying MFRS 9 Financial Instruments with MFRS 4 Insurance ContractsAmendments to MFRS 140 Transfers of Investment PropertyIC Interpretation 22 Foreign Currency Transactions and Advance Consideration


Annual Improvements to MFRS Standards 2015-2017 CycleAmendments to MFRS 9 Prepayment Features with Negative CompensationAmendments to MFRS 11 Annual Improvements to MFRS Standards 2015-2017 CycleMFRS 16 LeasesAmendments to MFRS 119 Plan Amendment, Curtailment or SettlementAmendments to MFRS 128 Long-term Interests in Associates and Joint VenturesIC Interpretation 23 Uncertainty over Income Tax Treatments

As at the date of authorisation of these financial statements, the following MFRS,amendments to MFRS and Interpretation Committee ("IC") Interpretations have beenissued by the Malaysian Accounting Standards Board ("MASB") but are not yet effectiveand have not been adopted by the Group and the Company.

The accounting policies adopted by the Group and the Company are consistent withthose of the previous financial year except as follows:

The Group and the Company adopted the following amendments and annualimprovements to MFRS beginning on or after 1 January 2017

The adoption of the amendments to MFRS above did not have any material impact onthe financial statements of the Group and the Company in the current financial year.

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2.4 Standards issued but not yet effective (cont'd.)


MFRS 17 Insurance Contracts

Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

MFRS 15 Revenue from Contracts with Customers

MFRS 16 Leases

Effective for financial periods to be determined by the MASB

The Group and the Company plan to adopt the above pronouncements, if applicablewhen they become effective in the respective financial periods. These pronouncementsare expected to have no significant impact to the financial statements of the Group andthe Company upon their initial application except as described below:

MFRS 15 establishes a five-step model to account for revenue arising from contractswith customers. Under MFRS 15, revenue is recognised at an amount that reflects theconsideration to which an entity expects to be entitled in exchange for transferringgoods or services to a customer.

MFRS 16 replaces MFRS 117 Leases and its related interpretations when it becomeseffective. MFRS 16 sets out the principles for the recognition, measurement,presentation and disclosure of leases and requires lessees to account for all leasesunder a single on-balance sheet model similar to the accounting for finance leasesunder MFRS 117. The standard includes two recognition exemptions for lessees –leases of 'low-value’ assets (e.g., personal computers) and short-term leases (i.e.,leases with a lease term of 12 months or less). At the commencement date of a lease, alessee will recognise a liability to make lease payments (i.e., the lease liability) and anasset representing the right to use the underlying asset during the lease term (i.e., theright of use asset).

The new revenue standard will supersede all current revenue recognition requirementsunder MFRS. Either a full retrospective application or a modified retrospectiveapplication is required for annual periods beginning on or after 1 January 2018. Earlyadoption is permitted. The Group and the Company are currently assessing the impactof MFRS 15 and plan to adopt the new standard on the required effective date.

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2.4 Standards issued but not yet effective (cont'd.)

MFRS 16 Leases (cont'd.)

2.5 Summary of significant accounting policies

(a) Basis of consolidation

-

--

Power over the investee (i.e. existing rights that give it the current ability todirect the relevant activities of the investee);Exposure, or rights, to variable returns from its involvement with the investee;

Lessor accounting under MFRS 16 is substantially unchanged from today’s accountingunder MFRS 117. Lessors will continue to classify all leases using the sameclassification principle as in MFRS 117 and distinguish between two types of leases:operating and finance leases.

MFRS 16 also requires lessees and lessors to make more extensive disclosures thanunder MFRS 117.

The ability to use its power over the investee to affect its returns.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Earlyapplication is permitted, but not before an entity applies MFRS 15. A lessee can chooseto apply the standard using either a full retrospective or a modified retrospectiveapproach. The standard’s transition provisions permit certain reliefs. The Group and theCompany are currently assessing the impact of MFRS 16 and plan to adopt the newstandard on the required effective date.

The consolidated financial statements comprise the financial statements of theCompany and its subsidiaries as at 31 December 2017. Control is achieved whenthe Group is exposed, or has rights, to variable returns from its involvement withthe investee and has the ability to affect those returns through its power over theinvestee. Specifically, the Group controls an investee if and only if the Group has:

Lessees will be required to separately recognise the interest expense on the leaseliability and the depreciation expense on the right-of-use asset. Lessees will be alsorequired to remeasure the lease liability upon the occurrence of certain events (e.g., achange in the lease term, a change in future lease payments resulting from a change inan index or rate used to determine those payments). The lessee will generallyrecognise the amount of the remeasurement of the lease liability as an adjustment tothe right-of-use asset.

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2.5 Summary of significant accounting policies (cont'd.)

(a) Basis of consolidation (cont'd.)

- The contractual arrangement(s) with the other vote holders of the investee;- Rights arising from other contractual arrangements; and- The Group’s voting rights and potential voting rights.

Profit or loss and each component of other comprehensive income ("OCI") areattributed to the equity holders of the Group and to the non-controlling interests,even if this results in the non-controlling interests having a deficit balance. Whennecessary, adjustments are made to the financial statements of the subsidiary tobring its accounting policies in line with the Company’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating totransactions between the Company and its subsidiary are eliminated in full onconsolidation.

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

A change in the ownership interest of a subsidiary, without a loss of control, isaccounted for as an equity transaction.

Generally, there is a presumption that a majority of voting rights results in control.To support this presumption and when the Group has less than a majority of thevoting or similar rights of an investee, the Group considers all relevant facts andcircumstances in assessing whether it has power over an investee, including:

The Group re-assesses whether or not it controls an investee if facts andcircumstances indicate that there are changes to one or more of the threeelements of control. Consolidation of a subsidiary begins when the Group obtainscontrol over the subsidiary and ceases when the Group loses control of thesubsidiary. Assets, liabilities, income and expenses of a subsidiary acquired ordisposed of during the year are included in the statement of comprehensiveincome from the date the Company gains control until the date the Companyceases to control the subsidiary.

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(b) Investments in subsidiaries

A subsidiary is an entity over which the Group has all the following:

(i)

(ii)

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

(c) Investment in an associate

(d) Income taxes

(i) Current income tax

Power over the investee (i.e. existing rights that give it the current ability todirect the relevant activities of the investee);

In the Company's separate financial statements, investments in subsidiaries arecarried at cost less impairment losses. The policy for impairment losses isdisclosed in Note 2.6(ii). On disposal of such investment, the difference betweenthe net disposal proceeds and the carrying amount is included in profit or loss.

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

Current income tax relating to items recognised directly in equity isrecognised in equity and not in the statement of profit or loss. Managementperiodically evaluates positions taken in the tax returns with respect tosituations in which applicable tax regulations are subject to interpretation andestablishes provisions where appropriate.

Under the equity method, the investment in an associate is initially recognised atcost. The carrying amount of the investment is adjusted to recognise changes inthe Group's share of net assets of the associate since the acquisition date.

In the Group's financial statements, investment in an associate is accounted forusing the equity method. In the Company's separate financial statements,investment in an associate is stated at cost less impairment loss. The policy forimpairment losses is disclosed in Note 2.6(ii).

Current income tax assets and liabilities are measured at the amountexpected to be recovered from or paid to the taxation authorities. The taxrates and tax laws used to compute the amount are those that are enacted orsubstantively enacted at the reporting date in the countries where the Groupand the Company operates and generates taxable income.

Exposure, or rights, to variable returns from its investment with the investee;and

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(d) Income taxes (cont'd.)

(ii) Deferred tax

-

-

-

-

Deferred tax is provided using the liability method on temporary differencesbetween the tax bases of assets and liabilities and their carrying amounts forfinancial reporting purposes at the reporting date. Deferred tax liabilities arerecognised for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of goodwillor an asset or liability in a transaction that is not a business combinationand, at the time of the transaction, affects neither the accounting profit nortaxable profit or loss.

In respect of taxable temporary differences associated with investments insubsidiaries, associates and interests in joint arrangements, when thetiming of the reversal of the temporary differences can be controlled and itis probable that the temporary differences will not reverse in theforeseeable future.

Deferred tax assets are recognised for all deductible temporary differences,the carry forward of unused tax credits and any unused tax losses. Deferredtax assets are recognised to the extent that it is probable that taxable profitwill be available against which the deductible temporary differences, and thecarry forward of unused tax credits and unused tax losses can be utilised,except:

When the deferred tax asset relating to the deductible temporary differencearises from the initial recognition of an asset or liability in a transaction thatis not a business combination and, at the time of the transaction, affectsneither the accounting profit nor taxable profit or loss.

In respect of deductible temporary differences associated with investmentsin subsidiaries, associates and interests in joint arrangements, deferred taxassets are recognised only to the extent that it is probable that thetemporary differences will reverse in the foreseeable future and taxableprofit will be available against which the temporary differences can beutilised.

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(d) Income taxes (cont'd.)

(ii) Deferred tax (cont'd.)

(e) Revenue

(i)

The carrying amount of deferred tax assets is reviewed at each reportingdate and reduced to the extent that it is no longer probable that sufficienttaxable profit will be available to allow all or part of the deferred tax asset tobe utilised. Unrecognised deferred tax assets are re-assessed at eachreporting date and are recognised to the extent that it has become probablethat future taxable profits will allow the deferred tax asset to be recovered.

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

Sale of starter packs, recharge vouchers and international airtimetransfer services

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

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

Revenue is recognised to the extent that it is probable that the economic benefitswill flow to the Group and to the Company and the revenue can be reliablymeasured.

Activities relating to the Group's and the Company's Application ServicesProviders Licence comprise particular functions such as voice services, dataservices, content-based services and other transmission services. ApplicationServices are essentially the functions or capabilities, which are delivered toend-users via the mobile network of a third-party telecommunicationsservices provider.

Revenue from sale of starter packs and recharge vouchers are recognisedwhen services are rendered.

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(e) Revenue (cont'd.)

(i)

(ii) Income from remittance activities

(iii) Income from money changing/wholesale currency activities

(iv) Sale of mobile coupons

(v) Income from technology solutions

(vi) Interest income

(vii) Payment business

Service charges and gain/loss on foreign exchange arising from remittanceactivities are recognised as remittance services are rendered.

Revenue from sale of foreign currencies are measured at the differencesbetween the cost and selling price of the currency (foreign currency margin).Revenue is recognised in profit or loss when the money changing/wholesalecurrency services are rendered.

Revenue from the sale of mobile coupons are recognised when thesignificant risks and rewards of ownership of the mobile coupons havepassed to the buyer and measured at the fair value of the considerationreceived or receivable.

Sale of starter packs, recharge vouchers and international airtimetransfer services (cont'd.)

Revenue from the sale of international airtime transfer services arerecognised when services are rendered. Revenue from services that havebeen sold to customers but where services have not been rendered at thereporting date is deferred.

Revenue from technology solutions are recognised in proportion to the stageof completion of the project at the reporting date.

Interest income is recognised in profit or loss based on the effective interestmethod.

Revenue from the payment services comprises service fees and transactionfees from the cards issuing and merchant acquisition business. Revenue isrecognised when payment services are rendered.

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(f) Property and equipment

All items of property and equipment are initially recorded at cost. The cost of anitem of property and equipment is recognised as an asset, if and only if, it isprobable that future economic benefits accociated with the item will flow to theGroup and the Company and the cost of the item can be measured reliably.

Subsequent to initial recognition, equipments are measured at cost lessaccumulated depreciation and accumulated impairment losses. When significantparts of equipment are required to be replaced in intervals, the Group and theCompany recognise such parts as individual assets with specific useful lives anddepreciation, respectively. Likewise, when a major inspection is performed, its costis recognised in the carrying amount of the equipment as a replacement if therecognition criteria are satisfied. All other repair and maintenance costs arerecognised in profit or loss as incurred.

Commercial buildings and shop lots are stated at revalued amounts, which is thefair value at the date of the revaluation less any accumulated depreciation and anyaccumulated impairment losses. Fair value is determined from market-basedevidence by appraisals that are undertaken by professionally qualified valuers.Revaluations are performed with sufficient frequency to ensure that the carryingamount of a revalued asset does not differ materially from its fair value.

Any revaluation surplus is credited to other comprehensive income andaccumulated in equity under revaluation reserve, except to the extent that itreverses a revaluation decrease for the same asset previously recognised in profitor loss, in which case, the increase is recognised in profit or loss to the extent ofthe decrease previously recognised. A revaluation deficit is first offset againstunutilised previously recognised revaluation surplus in respect of the same assetand the balance is thereafter recognised in profit or loss. Any accumulateddepreciation as at the revaluation date is eliminated against the gross carryingamount of the asset and the net amount is restated to the revalued amount of theasset. Upon disposal or retirement of an asset, any remaining revaluation reserverelating to the particular asset is transferred directly to retained profits.

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(f) Property and equipment (cont'd.)

Commercial buildings Over 50 years ^Shop lots Over 50 years ^Renovations 10%Computer and office equipment 20%Furniture and fittings 10%Motor vehicles 20%Telecommunication equipment 20%

^

(g) Inventories

Depreciation is computed on a straight-line basis over the estimated useful lives ofthe assets as follows:

Subsequent to revaluation, the revalued amounts are depreciated over theremaining useful lives following the date of the latest valuation.

The residual values, useful lives and depreciation method are reviewed at eachfinancial year end to ensure that the amounts, method and period of depreciationare consistent with previous estimates and the expected pattern of consumption ofthe future economic benefits embodied in the items of property and equipment.

An item of property and equipment is derecognised upon disposal or when nofuture economic benefits are expected from its use or disposal. The differencebetween the net disposal proceeds, if any, and the net carrying amount isrecognised in profit or loss.

Inventories are stated at the lower of cost and net realisable value ("NRV"). Cost isdetermined on a first-in-first-out basis. Where net realisable value is lower than thecost of inventories, the difference is recognised as an expense in profit or loss.

NRV is the estimated selling price in the ordinary course of business, lessestimated costs necessary to make the sale.

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(h) Foreign currencies

(i) Functional and presentation currency

(ii) Foreign currency transactions

The individual financial statements of each entity in the Group are measuredusing the currency of the primary economic environment in which the entityoperates ("the functional currency"). The financial statements are presentedin Ringgit Malaysia ("RM"), which is also the Company's functional currencyas described in Note 2.2.

Monetary assets and liabilities denominated in foreign currencies aretranslated at the functional currency spot rates of exchange at the reportingdate.

Differences arising on settlement or translation of monetary items arerecognised in profit or loss with the exception of monetary items that aredesignated as part of the hedge of the Group’s net investment in a foreignoperation. These are recognised in OCI until the net investment is disposedof, at which time, the cumulative amount is reclassified to profit or loss. Taxcharges and credits attributable to exchange differences on those monetaryitems are also recorded in OCI.

Non-monetary items that are measured in terms of historical cost in a foreigncurrency are translated using the exchange rates at the dates of the initialtransactions. Non-monetary items measured at fair value in a foreigncurrency are translated using the exchange rates at the date when the fairvalue is determined. The gain or loss arising on translation of non-monetaryitems measured at fair value is treated in line with the recognition of the gainor loss on the change in fair value of the item (i.e., translation differences onitems whose fair value gain or loss is recognised in OCI or profit or loss arealso recognised in OCI or profit or loss, respectively).

Transactions in foreign currencies are initially recorded by the Group’sentities at their respective functional currency spot rates at the date thetransaction first qualifies for recognition.

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(h) Foreign currencies (cont'd.)

(ii) Foreign currency transactions (cont'd.)

2017 2016RM RM

1 United States Dollar ("USD") 4.0465 4.48401 Bangladeshi Taka ("BDT") 0.0489 0.0567100 Indian Rupee ("INR") 6.3379 6.6063100 Indonesian Rupiah ("IDR") 0.0298 0.03331 Singapore Dollar ("SGD") 3.0277 3.1055

(i) Impairment of non-financial assets

The main foreign currencies at the functional currency spot rates of exchangeat reporting date used are as follows:

The Group and the Company assess at each reporting date whether there is anindication that an asset may be impaired. If any such indication exists, or when anannual impaiment assessment for an asset is required, the Group and theCompany make an estimate of the asset's recoverable amount.

An asset's recoverable amount is the higher of an asset's fair value less costs tosell and its value in use. For the purpose of assessing impairment, assets aregrouped at the lowest level for which there are separately identifiable cash flows(cash-generating units ("CGU")).

In assessing value in use, the estimated future cash flows expected to begenerated by the asset are discounted to their present value using a pre-taxdiscount rate that reflects current market assessment of the time value of moneyand the risks specific to the asset. Where the carrying amount of an asset exceedsits recoverable amount, the asset is written down to its recoverable amount.Impairment losses recognised in respect of a CGU or groups of CGUs areallocated first to reduce the carrying amount of any goodwill allocated to thoseunits or groups of units and then, to reduce the carrying amount of the otherassets in the unit or groups of units on a pro-rata basis.

In determining fair value less costs of disposal, recent market transactions aretaken into account. If no such transactions can be identified, an appropriatevaluation model is used. These calculations are corroborated by valuationmultiples, quoted share prices for publicly traded companies or other available fairvalue indicators.

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(i) Impairment of non-financial assets (cont'd.)

(j) Employee benefits expense

(i) Short-term benefits

(ii) Defined contribution plans

Impaiment losses are recognised in profit or loss except for assets that werepreviously revalued where the revaluation was taken to other comprehensiveincome. In this case the impairment is also recognised in other comprehensiveincome up to the amount of any previous revaluation surplus recognised.

An assessment is made at each reporting date as to whether there is anyindication that previously recognised impairment losses may no longer exist or mayhave decreased. A previously recognised impairment loss is reversed only if therehas been a change in the estimates used to determine the asset's recoverableamount since the last impairment loss was recognised. If that is the case, thecarrying amount is increased to its recoverable amount. That increase cannotexceed the carrying amount that would have been determined, net of depreciation,had no impairment loss been recognised previously. Such reversal is recognised inprofit or loss unless the asset is measured at revalued amount, in which case thereversal is treated as a revaluation increase. Impairment loss on goodwill is notreversed in a subsequent period.

Wages, salaries, bonuses and social security contributions are recognised asan expense in the financial year in which the associated services arerendered by employees of the Group and of the Company. Short-termaccumulating compensated absences such as paid annual leave arerecognised when services are rendered by employees that increase theirentitlement to future compensated absences and short-term non-accumulating compensated absences such as sick leave are recognisedwhen the absences occur.

The Group's and the Company's contributions to defined contribution plansare charged to profit or loss in the period in which the related service isperformed. Once the contributions have been paid, the Group and theCompany have no further liability in respect of the defined contribution plans.As required by law, the Group and the Company make such contributions tothe Employees' Provident Fund.

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(k) Financial assets and financial liabilities

(i) Financial assets

- Financial assets at FVTPL

- Loans and receivables

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

When financial assets are recognised initially, they are measured at fairvalue, plus, in the case of financial assets not at fair value through profit andloss, directly attributable transaction costs.

The Group and the Company determine the classification of financial assetsat initial recognition and the categories include financial assets at fair valuethrough profit or loss ("FVTPL") and loans and receivables.

Financial assets are classified as financial assets at FVTPL if they are heldfor trading or are designated as such upon initial recognition. Financialassets held for trading are those acquired principally for the purpose ofselling in the near term. Subsequent to initial recognition, financial assets atFVTPL are measured at fair value. Changes in the fair value of thosefinancial assets are recorded as fair value gain or loss in profit or loss.Financial assets at FVTPL of the Group and the Company include foreigncurrencies held for trading and investments in unit trust funds.

Financial assets with fixed or determinable payments that are not quoted inan active market are classified as receivables. The Group and theCompany include in this category trade and non-trade receivables anddeposits and placements with licensed banks. Subsequent to initialrecognition, these are measured at amortised cost using effective interestmethod. Gains and losses are recognised in proft or loss when the loansand receivables are derecognised or impaired, and through amortisationprocess.

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(k) Financial assets and financial liabilities (cont'd.)

(i) Financial assets (cont'd.)

- Loans and receivables (cont'd.)

(ii) Financial liabilities

Financial liabilities are classified according to the substance of the contractualarrangements entered into and the definitions of a financial liability. TheGroup and the Company include in this category settlement obligations,borrowings and non-trade payables. Financial liabilities are recognisedinitially at fair value and subsequently stated at amortised cost using theeffective interest method.

A financial liability is derecognised when the obligation under the liability isextinguished. When an existing financial liability is replaced by another fromthe same lender on substantially different terms, or the terms of an existingliability are substantially modified, such an exchange or modification istreated as a derecognition of the original liability and the recognition of a newliability, and the difference in the respective carrying amounts is recognised inprofit or loss.

A financial asset is derecognised when the contractual right to receive cashflows from the asset has expired. On derecognition of a financial asset inits entirety, the difference between the carrying amount and the sum of theconsideration received and any cumulative gain or loss that had beenrecognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assetsthat require delivery of assets within the period generally established byregulation or convention in the marketplace concerned. All regular waypurchases and sales of financial assets are recognised or derecognised onthe trade date i.e., the date that the Group and the Company commit topurchase or sell the assets.

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(l) Fair value measurement

- Properties under revaluation model Note 10- Investment in unit trust funds in Malaysia Note 20- Foreign currencies held for trading Note 20

- In the principal market for the asset or liability, or-

The principal or the most advantageous market must be accessible to by theGroup and the Company.

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

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

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

The Group and the Company measure non-financial assets such as properties andfinancial assets at FVTPL, at fair value at each reporting date. Fair value relateddisclosures for non-financial assets and financial assets that are measured at fairvalue or where fair values are disclosed, are summarised in the following notes:

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

In the absence of a principal market, in the most advantageous market forthe asset or liability.

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(l) Fair value measurement (cont'd.)

-

-

-

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

For foreign currencies held for trading, fair value is determined by reference toReuters's middle rate.

External valuers are involved for valuation of the properties of the Group and of theCompany. Involvement of external valuers is decided upon annually bymanagement. Selection criteria includes market knowledge, reputation,independence and whether professional standards are maintained. Revaluationsare performed with sufficient frequency to ensure that the carrying amount of arevalued asset does not differ materially from its fair value.

Level 1 - Quoted (unadjusted) market prices in active markets for identicalassets or liabilities

Level 2 - Valuation techniques for which the lowest level input that issignificant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that issignificant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements at fairvalue on a recurring basis, the Group and the Company determine whethertransfers have occurred between levels in the hierarchy by re-assessingcategorisation (based on the lowest level input that is significant to the fair valuemeasurement as a whole) at the end of each reporting period.

The fair value of financial instruments that are actively traded in organised financialmarkets is determined by reference to quoted market bid prices for assets at theclose of business on the reporting date.

For investments in unit trust funds, fair value is determined by reference topublished net asset values.

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(l) Fair value measurement (cont'd.)

(m) Impairment of financial assets

Financial assets carried at amortised cost

For the purpose of fair value disclosures, the Group and the Company havedetermined classes of assets and liabilities on the basis of the nature,characteristics and risks of the asset or liability and the level of the fair valuehierarchy as explained above.

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

To determine whether there is objective evidence that an impairment loss onfinancial assets has been incurred, the Group and the Company consider factorssuch as the probability of insolvency or significant financial difficulties of the debtorand default or significant delay in payments. For certain categories of financialassets, such as trade receivables, assets that are assessed not to be impairedindividually are subsequently assessed for impairment on a collective basis basedon similar risk characteristics.

Objective evidence of impairment for a portfolio of receivables could include theGroup's and the Company's past experience of collecting payments, an increase inthe number of delayed payments in the portfolio past the average credit period andobservable changes in national or local economic conditions that correlate withdefault on receivables.

At each reporting date, management analyses the movements in the values ofproperties which are required to be re-measured or re-assessed. Management andthe Company’s external valuers also compare the changes in the fair value of eachproperty with relevant external sources to determine whether the change isreasonable. Changes in fair value of propeties are tabled to the Board of Diretorsfor approval.

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(m) Impairment of financial assets (cont'd.)

(n) Cash and cash equivalents

(o) Share capital

The carrying amount of the financial asset is reduced by the impairment lossdirectly for all financial assets with the exception of trade receivables, where thecarrying amount is reduced through the use of an allowance account. When atrade receivable becomes uncollectible, it is written off against the allowanceaccount.

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

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

Cash and cash equivalents comprise cash and bank balances, short-term depositswith banks, pre-funding to disbursement partner banks and foreign currencies heldfor trading, net of bank overdrafts, which are subject to an insignificant risk ofchanges in value and which have original maturity periods of 3 months or less atacquisition.

For the purpose of the statements of cash flows, cash and cash equivalentsexclude deposits with original maturities of more than 3 months.

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

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(p) Intangible assets

(q) Business combinations and goodwill

Gains or losses arising from derecognition of an intangible asset are measured asthe difference between the net disposal proceeds and the carrying amount of theasset and are recognised in profit or loss when the asset is derecognised.

Intangible assets acquired separately are measured on initial recognition at cost.The cost of intangible assets acquired in a business combination is the fair valueas at the date of acquisition. Following initial recognition, intangible assets arecarried at cost less any accumulated amortisation and any accumulatedimpairment losses. The useful life of intangible assets is assessed to be eitherfinite or indefinite. Intangible assets with finite life are amortised on a straight-linebasis over the estimated economic useful life and assessed for impairmentwhenever there is an indication that the intangible asset may be impaired. Theamortisation period and the amortisation method for an intangible asset with afinite useful life are reviewed at each reporting date. The Group and the Companydo not have any indefinite useful life intangible assets as at the reporting date.

The useful life of computer software is assessed to be finite. Computer software isamortised on a straight-line basis over 5 years. Work-in-progress is not amortiseduntil such time the asset is ready for its intended use.

The Group's and the Company's intangible assets consist of computer software.

Business combinations are accounted for using the acquisition method. The costof an acquisition is measured as the aggregate of the consideration transferred,which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Groupelects whether to measure the non-controlling interests in the acquiree at fair valueor at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets andliabilities assumed for appropriate classification and designation in accordance withthe contractual terms, economic circumstances and pertinent conditions as at theacquisition date.

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(q) Business combinations and goodwill (cont'd.)

(r) Borrowing costs

After initial recognition, goodwill is measured at cost less any accumulatedimpairment losses. For the purpose of impairment testing, goodwill acquired in abusiness combination is, from the acquisition date, allocated to each of theGroup’s cash-generating units ("CGU") that are expected to benefit from thecombination, irrespective of whether other assets or liabilities of the acquiree areassigned to those units.

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

Where goodwill has been allocated to a CGU and part of the operation within thatunit is disposed of, the goodwill associated with the disposed operation is includedin the carrying amount of the operation when determining the gain or loss ondisposal. Goodwill disposed in these circumstances is measured based on therelative values of the disposed operation and the portion of the CGU retained.

Borrowing costs are capitalised as part of the cost of a qualifying asset if they aredirectly attributable to the acquisition, construction or production of that asset.Capitalisation of borrowing costs commences when the activities to prepare theasset for its intended use or sale are in progress and the expenditures andborrowing costs are incurred. Borrowing costs are capitalised until the assets aresubstantially completed for their intended use or sale.

Goodwill is initially measured at cost (being the excess of the aggregate of theconsideration transferred and the amount recognised for non-controlling interestsand any previous interest held over the net identifiable assets acquired andliabilities assumed). If the fair value of the net assets acquired is in excess of theaggregate consideration transferred, the Group re-assesses whether it hascorrectly identified all of the assets acquired and all of the liabilities assumed andreviews the procedures used to measure the amounts to be recognised at theacquisition date. If the reassessment still results in an excess of the fair value ofnet assets acquired over the aggregate consideration transferred, then the gain isrecognised in profit or loss.

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(s) Segment reporting

2.6 Significant accounting estimates and judgments

(i)

(ii)

Impairment exists when the carrying value of an asset or cash generating unitexceeds its recoverable amount, which is the higher of its fair value less costs ofdisposal and its value in use. The value in use calculation is based on a discountedcash flow ("DCF") model. The cash flows are derived from the budgets for the nextfive years including a terminal value, and do not include restructuring activities thatthe Group and the Company are not yet committed to or significant futureinvestments that will enhance the performance of the assets of the CashGenerating Units ("CGU") being tested. The recoverable amounts are sensitive tothe discount rate used for the DCF model, gross margins as well as the expectedfuture cash-inflows and the growth rate used for extrapolation purposes.

Impairment of non-financial assets

The Group and the Company carry properties at revalued amounts. Themeasurement of fair value for commercial buildings and shop lots is arrived at byreference to market evidence of transaction prices for similar commercial buildingsand shop lots and is performed by a firm of qualified professional independentproperty valuers. The valuation techniques and significant unobservable inputsused to assess fair value of such properties are described in Note 10 and Note 34.

Revaluation of comercial buildings and shop lots

The preparation of financial statements in accordance with MFRS and IFRS requiresthe use of certain accounting estimates and exercise of judgments. Estimates andjudgments are continually evaluated and are based on past experience, reasonableexpectations of future events and other factors. The most significant uses of judgmentsand estimates for the Group and the Company are as follows:

Operating segments are reported in a manner consistent with the internal reportingprovided to the chief operating decision-maker. The chief operating decision-maker is a person or a group of people that is responsible to allocate resourcesand assess the performance of the operating segments of an entity. The Grouphas determined the Board of Directors as its chief operating decision-maker.

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2.6 Significant accounting estimates and judgments (cont'd.)

(ii)

The carrying amount of goodwill of the Group and of the Company and keyassumptions used to determine the recoverable amount for the different CGUs,including a sensitivity analysis, are disclosed and further explained in Note 12.

The carrying amount of investments in subsidiaries of the Company at the financialyear end including other relevant financial information is disclosed in Note 14.

Impairment of non-financial assets (cont'd.)

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3. Revenue

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Remittance business Remittance activities: Service charge 52,905 47,570 52,905 47,570 Foreign exchange revenue 49,799 39,638 49,799 39,638 Others 689 39 689 39

103,393 87,247 103,393 87,247

Currency business Money changing activities 7,446 3,161 7,446 3,161 Wholesale currency activities 9,670 3,410 9,670 3,410

17,116 6,571 17,116 6,571

Communication business Mobile virtual network operator ("MVNO") 26,482 66,655 26,482 66,655

Payment business Payment services 47 - 47 -

Other business Sale of mobile coupons 558 339 - - Technology solutions 617 - - -

148,213 160,812 147,038 160,473

Group Company

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4. Cost of sales

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Remittance business Remittance activities: Commission payable to agents and partner banks 29,376 24,229 30,160 24,229 Others 11 58 11 58

29,387 24,287 30,171 24,287

Currency business Wholesale currency activities 605 223 605 223

Communication business MVNO: Cost of recharge vouchers, starter packs and airtime 29,324 67,428 29,324 67,428 Inventories written down (Note 16) 243 - 243 - Less: Rebate earned (16,957) (19,305) (16,957) (19,305)

12,610 48,123 12,610 48,123

Payment business Payment services 39 - 39 -

Other business Cost of mobile coupons 381 303 - - Cost for technology solutions provided 155 - - -

43,177 72,936 43,425 72,633

Group Company

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5. Other income

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Interest income 307 267 307 267Unrealised foreign exchange gain, net - 7,110 - 7,110Income from investments in unit trust funds 53 89 29 41Management fees from - subsidiaries - - 293 198 - third party 239 - 239 -Others 28 23 28 23

627 7,489 896 7,639

6. Other expenses

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Unrealised foreign exchange loss, net 1,193 - 1,195 -Realised foreign exchange loss, net 82 38 82 30Obsolete currency - 283 - 283

1,275 321 1,277 313

Group Company

Group Company

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7. Operating profit

The following items have been included in arriving at operating profit:

Note 2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Employee benefits expense:

- Salaries, wages,allowances andovertime 37,665 31,000 37,271 30,751

- Contributions todefined contributionplan 4,526 3,885 4,495 3,854

- Social securitycontributions 443 376 440 372

- Other benefits 3,770 4,026 3,745 4,01946,404 39,287 45,951 38,996

Non-executive directors' fees 245 156 240 156Executive directors' remuneration (a) 2,079 1,637 2,079 1,637Auditors' remuneration:

- Statutory audit 529 177 470 136- Other professional services 72 56 72 56

Depreciation of property and equipment 10 4,497 4,127 4,280 3,947Amortisation of intangible assets 11 1,714 1,141 1,333 823Property and equipment written off 10 - 73 - -Utilities charges 1,524 1,440 1,518 1,430Legal and other

professional fees 2,604 1,607 2,560 1,569Rental of premises 7,050 5,317 6,952 5,273Rental of equipment 112 308 112 279

Company

The total number of employees, inclusive of the executive directors of the Group at the endof the financial year was 855 (2016: 765).

Group

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7. Operating profit (cont'd.)

(a) Executive directors' remuneration and non-executive directors' fees

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Executive directors:Salaries and other emoluments 1,700 1,320 1,700 1,320Contributions to defined contribution plan 379 317 379 317Total executive directors' remuneration (excluding benefits-in-kind) 2,079 1,637 2,079 1,637Estimated money value of benefits-in-kind 16 25 16 25Total executive directors' remuneration (including benefits-in-kind) 2,095 1,662 2,095 1,662

2017 2016

Executive directors:RM200,001 – RM300,000 1 -RM1,650,001 – RM1,700,000 - 1RM1,800,001 – RM1,900,000 1 -

Non-executive directors:RM1 - RM100,000 - 3RM100,001 - RM200,000 2 -

The details of remuneration receivable by directors of the Company during the year areas follows:

Group

The number of directors of the Company whose total remuneration during the financialyear fell within the following bands is analysed below:

Number of directors

Company

Company

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8. Finance costs

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Interest on: Bank overdrafts 197 197 197 197 Term loans 2,243 285 2,243 285 Others - 2 - 2

2,440 484 2,440 484

9. Taxation

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Tax expense for the year: - Malaysian income tax 4,028 2,183 3,942 2,183 - (Over)/under provision of income tax expense in prior years (155) 1,174 (155) 1,174

3,873 3,357 3,787 3,357

Deferred tax (Note 19): - Relating to origination and

reversal of temporary differences 316 1,419 316 1,419 - Over provision of deferred tax in prior years (132) (247) (132) (247)

184 1,172 184 1,172

Income tax expense reported in profit or loss 4,057 4,529 3,971 4,529

Other comprehensiveincome ("OCI"):

Deferred tax related to items recognised in OCI during the year (Note 19): Deferred tax effects in relation to revaluation of properties 59 - 59 -Deferred tax charged to OCI 59 - 59 -

Company

Group Company

Group

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9. Taxation (cont'd.)

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Profit before taxation 11,452 11,618 12,494 13,010

Income tax at Malaysian statutory tax rate of

24% (2016: 24%) 2,748 2,788 2,999 3,122Expenses not deductible for tax purposes 1,291 528 1,266 490Income not subject to tax (13) (21) (7) (10)(Over)/under provision of income tax expense in prior years (155) 1,174 (155) 1,174Effect of deferred tax assets not recognised 318 307 - -Over provision of deferred tax in prior year (132) (247) (132) (247)Tax expense for the year 4,057 4,529 3,971 4,529

Group Company

Reconciliation of income tax expense and the accounting profit multiplied by the statutorytax rate for the Group and Company are as follows:

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10. Property and equipment

Computer Furniture Telecom-Commercial Shop and office and Motor munication

buildings lots Renovations equipment fittings vehicles equipment TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Group <--- At valuation --->

At 31 December 2017

Cost/ValuationAt beginning of the financial year 1,720 500 11,687 20,165 1,456 2,179 2,186 39,893Revaluation surplus 176 70 - - - - - 246Transfer* (66) (20) - - - - - (86)Acquisition of a subsidiary

(Note 13(i)) - - - 43 54 - - 97Acquisition of a business

(Note 13(ii)) - - 1,370 164 163 - - 1,697Additions - - 892 1,648 323 - - 2,863At end of the financial year 1,830 550 13,949 22,020 1,996 2,179 2,186 44,710

Accumulated depreciationAt beginning of the financial year 47 14 6,238 10,953 454 1,910 2,182 21,798Charge during the year 48 14 1,236 2,949 155 95 - 4,497Transfer* (66) (20) - - - - - (86)At end of the financial year 29 8 7,474 13,902 609 2,005 2,182 26,209

Net carrying amountAt end of the financial year 1,801 542 6,475 8,118 1,387 174 4 18,501

<------------------------------------- At cost ------------------------------------>

*Transfer relates to the accumulated depreciation as at the revaluation date that was eliminated against the gross carrying amount ofcommercial buildings and shop lots.

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10. Property and equipment (cont'd.)

Computer Furniture Telecom-Commercial Shop Reno- and office and Motor munication Work-in-

buildings lots vations equipment fittings vehicles equipment progress TotalRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Group <--- At valuation--->

At 31 December 2016

Cost/ValuationAt beginning of the financial year 1,720 500 10,468 15,775 1,305 2,179 2,186 2,388 36,521Reclassification - - - 1,037 - - - (1,037) -Reclassification to - intangible assets (Note 11) - - - - - - - (1,351) (1,351)Additions - - 1,219 3,426 151 - - - 4,796Written off (Note 7) - - - (73) - - - - (73)At end of the financial year 1,720 500 11,687 20,165 1,456 2,179 2,186 - 39,893

Accumulated depreciationAt beginning of the financial year - - 5,150 8,312 332 1,695 2,182 - 17,671Charge during the year 47 14 1,088 2,641 122 215 - - 4,127At end of the financial year 47 14 6,238 10,953 454 1,910 2,182 - 21,798

Net carrying amountAt end of the financial year 1,673 486 5,449 9,212 1,002 269 4 - 18,095

<------------------------------------------ At cost ------------------------------------------>

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Company <--- At valuation ---> <-------------------------------------- At cost -------------------------------------->

At 31 December 2017

Cost/ValuationAt beginning of the financial year 1,720 500 11,677 19,104 1,440 2,179 2,186 38,806Revaluation surplus 176 70 - - - - - 246Transfer* (66) (20) - - - - - (86)Acquisition of a business (Note 13(ii)) 1,370 164 163 1,697Additions - - 892 1,633 323 - - 2,848At end of the financial year 1,830 550 13,939 20,901 1,926 2,179 2,186 43,511

Accumulated depreciationAt beginning of the financial year 47 14 6,236 10,774 452 1,910 2,182 21,615Charge during the year 48 14 1,235 2,735 153 95 - 4,280Transfer* (66) (20) - - - - - (86)At end of the financial year 29 8 7,471 13,509 605 2,005 2,182 25,809

Net carrying amountAt end of the financial year 1,801 542 6,468 7,392 1,321 174 4 17,702

*Transfer relates to the accumulated depreciation as at the revaluation date that was eliminated against the gross carrying amount ofcommercial buildings and shop lots.

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Company <--- At valuation ---> <-------------------------------------- At cost -------------------------------------->

At 31 December 2016

Cost/ValuationAt beginning of the financial year 1,720 500 10,468 15,743 1,303 2,179 2,186 34,099Additions - - 1,209 3,361 137 - - 4,707At end of the financial year 1,720 500 11,677 19,104 1,440 2,179 2,186 38,806

Accumulated depreciationAt beginning of the financial year - - 5,150 8,310 331 1,695 2,182 17,668Charge during the year 47 14 1,086 2,464 121 215 - 3,947At end of the financial year 47 14 6,236 10,774 452 1,910 2,182 21,615

Net carrying amountAt end of the financial year 1,673 486 5,441 8,330 988 269 4 17,191

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(i)

(ii)

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Renovations 639 639 639 639Computer and office equipment 6,575 6,036 6,575 6,036Furniture and fittings 149 149 149 149Motor vehicles 1,649 994 1,649 994Telecommunication equipment 2,186 2,186 2,186 2,186

11,198 10,004 11,198 10,004

(iii)

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Commercial buildings 633 650 633 650Shop lots 244 251 244 251

877 901 877 901

(iv) The commercial buildings and shop lots were last revalued during the year in May 2017by Messrs. JB Jurunilai Bersekutu (Selangor) Sdn Bhd, a firm of qualified independentproperty valuers. The valuation method used was the comparison method and the keyinputs included price per square foot of comparable properties.

Fair value measurement disclosures for the revalued commercial buildings and shoplots are as disclosed in Note 34.

The strata titles of the commercial buildings have yet to be issued by the relevantauthorities in the name of the Company.

Group Company

The net book value of the revalued commercial buildings and shop lots had they beencarried at cost less accumulated depreciation are as follows:

Group Company

The costs of fully depreciated property and equipment that are still in use are as follows:

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11. Intangible assets

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Computer software:

Cost

At beginning of the financial year 9,815 5,099 7,910 5,099Reclassification from work-in-progress 1,310 208 1,310 208Reclassification from property and equipment (Note 10) - 1,351 - -Acquisition of a business (Note 13(ii)) 32 - 32 -Additions 1,188 3,157 1,184 2,603At end of the financial year 12,345 9,815 10,436 7,910

Accumulated amortisation

At beginning of the financial year 4,226 3,085 3,908 3,085Charge for the year 1,714 1,141 1,333 823At end of the financial year 5,940 4,226 5,241 3,908

Net carrying amount 6,405 5,589 5,195 4,002

Work-in-progress:

Cost/Net carrying amount

At beginning of the financial year 710 510 710 510Additions 2,192 408 2,192 408Reclassification to computer software (1,310) (208) (1,310) (208)At end of the financial year 1,592 710 1,592 710

Total intangible assets 7,997 6,299 6,787 4,712

Group Company

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12. Goodwill

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Group

At beginning of the financial year - - - -Arising from acquisition of:- money changing business (Note 13(ii)) 9,898 - 9,898 -- a subsidiary (provisional) (Note 13(i)) 584 - - -At end of the financial year 10,482 - 9,898 -

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Currency business:Retail money changing and wholesale currency business

("Currency business CGU") 9,898 - 9,898 -9,898 - 9,898 -

Currency business CGU

Goodwill arising from acquisition of a subsidiary has been recognised on a provisional basisin accordance with the requirements of MFRS 3 Business Combinations .

Goodwill is reviewed for impairment annually or when there are indications of impairment.Goodwill of the money changing business is allocated to the Group's and Company's CGUfor impairment testing purposes, identified according to business segment expected tobenefit from the synergies as follows:

CompanyGroup

CompanyGroup

The recoverable amount of the currency business CGU, was estimated to be RM53,733,000as at 31 December 2017. This has been determined based on a value in use calculationusing cash flow projections from financial budgets approved by senior managementcovering a one year period. It takes into account a projected annual growth rate of 17%based on an average growth rate of turnover forecast by an external market researchanalyst company. Estimated cash flows beyond the period covered by the financial budgetsare extrapolated using a terminal growth rate of 1%. The discount rates applied ranged from12% to 13%. As a result of the analysis, there was sufficient headroom and managementdid not identify any indicators of impairment for this CGU.

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12. Goodwill (cont'd.)

Currency business CGU (cont'd.)

Gross marginsDiscount ratesGrowth rates used to extrapolate cash flows beyond the forecast period

13. Business combinations

(i)

Assets acquired and liabilities assumed

Fair value recognisedon acquisition

RM'000

Cash and short-term funds 1,250Property and equipment (Note 10) 97Total assets 1,347

Other payable 100Tax payable 25Total liabilities 125Total identifiable net assets at fair value 1,222

The Group has elected to measure the non-controlling interests in the Eightsquare atthe proportionate share of its interest in the acquiree's identifiable net assets.

The fair value of the identifiable assets and liabilities of Eightsquare as at the date ofacquisition were as follows:

Management believes that any reasonably possible change in the key assumptions wouldnot cause the carrying amount of the goodwill and intangible assets to exceed therecoverable amount of the CGU.

(i)

Key assumptions used in value in use calculations and sensitivity to changes inassumptions

The calculation of value in use for the currency business is most sensitive to the followingassumptions:

(ii)

Acquisition of 75% shareholding interest in Eightsquare Infotrans Sdn. Bhd.(formerly known as TG Solutions Sdn. Bhd. ) ("Eightsquare").

(iii)

On 30 October 2017, the Group completed the acquisition of a 75% shareholdinginterest in Eightsquare, an unlisted company based in Malaysia and which isspecialised in providing information technology services, for a purchase consideration ofRM1,500,000. The Group acquired Eightsquare because of its expertise in softwaredevelopment.

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13. Business combinations (cont'd.)

(i)

Assets acquired and liabilities assumed (cont'd.)


RM'000

Total identifiable net assets at fair value 1,222Non-controlling interest measured at fair value (306)Provisional goodwill arising on acquisition (Note 12) 584Purchase consideration transferred 1,500

Analysis of cash flows on acquisition:Cash flows

on acquisitionRM'000

Net cash acquired with the subsidiary (1,250)Cash and short-term funds paid on acquisition 1,500Net cash outflow on acquisition 250

(ii) Acquisition of business from Vital Rate Sdn. Bhd. ("VRSB")

Acquisition of 75% shareholding interests in Eightsquare Infotrans Sdn. Bhd.(formerly known as TG Solutions Sdn. Bhd. ) ("Eightsquare") (cont'd.)

On 1 March 2017, the Company completed the acquisition of the entire assets of VRSB,an unlisted company licensed by Bank Negara Malaysia under the Money ServicesBusiness Act, 2011 to conduct money services business namely, money changing andremittance business, for a total consideration of RM13,807,000. The Company acquiredVRSB to expand its presence in the money changing industry.

The net assets recognised in the 31 December 2017 financial statements were basedon a provisional assessment of their fair values as the Group is in the midst of obtainingthe information necessary to identify and measure the values of the net assetsacquired. The assessment had not been completed by the date the 2017 financialstatements were approved for issue by the Board of Directors and will need to befinalised within the period 12 months from the date of acquisition on 30 October 2017.

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13. Business combinations (cont'd.)

(ii) Acquisition of business from Vital Rate Sdn. Bhd. ("VRSB") (cont'd.)

Assets acquired and liabilities assumed


RM'000

Foreign currencies held for trading 2,017Other receivables 163Property and equipment (Note 10) 1,697Intangible assets (Note 11) 32Total identifiable assets at fair value 3,909

Total identifiable assets at fair value 3,909Goodwill arising on acquisition (Note 12) 9,898Purchase consideration transferred 13,807

Analysis of cash flows on acquisition:Cash flows

on acquisitionRM'000

Net cash acquired on acquisition (2,017)Cash and short-term funds paid on acquisition 13,807Net cash outflow on acquisition 11,790

From the date of acquisition, the business of VRSB has been operating as an intergralpart of the Company's business operations. Hence, their results thereon are notseparable from the Company's financial performance.

The goodwill of RM9,898,000 comprises the value of expected synergies arising fromthe integration of business operations and customers of VRSB, which are notseparately recognised. Therefore, it does not meet the criteria for recognition as anintangible asset under MFRS 138 Intangible Assets. None of the goodwill recognised isexpected to be deductible for income tax purposes.

The fair values of the identifiable assets of VRSB as at the date of acquisition were asfollows:

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14. Investments in subsidiaries

2017 2016RM'000 RM'000

Unquoted shares, at cost

Balance at 1 January 3,060 3,060Acquisition of 75% interest in Eightsquare on 30 October 2017 1,500 -Subscription of 60% interest in Jetixa FZCO on 1 August 2017 70 -Balance at 31 December 4,630 3,060

Paid-up Country of Principal proportion of ownershipcapital incorporation activities 2017 2016

'000 % %

Celcopon RM6,000 Malaysia Provision of 51% 51% Sdn. Bhd.^ digital mobile ("Celcopon") coupons

Jetixa **AED100 United Arab Marketing and 60% - FZCO* Emirates computer

("UAE") software trading

Eightsquare RM1,500 Malaysia System 75% - Infotrans solutions Sdn. Bhd.^

Eightsquare ***NPR5,000 Nepal System 75% - Pvt. Ltd.^ solutions

(Held directlyby EightsquareInfotrans Sdn. Bhd.)

^ Audited by a firm of accountants other than Ernst & Young.* Commenced operations effective from 1 August 2017 and no mandatory audit is

required under the laws of Dubai Airport Freezone.** United Arab Emirates Dirham ("AED")*** Nepalese Rupee ("NPR")

Company

The details of the subsidiaries are as follows:

Group's

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14. Investments in subsidiaries (cont'd.)

Material partly owned subsidiary

Proportion of equity interest held by non-controlling interests:

Name of Company Country of incorporation 2017 2016

Celcopon Malaysia 49% 49%

2017 2016RM'000 RM'000

Accumulated balances of material non-controlling interests:Celcopon 1,299 1,969

Loss allocated to non-controlling interests:Celcopon (669) (674)

2017 2016RM'000 RM'000

Summarised statement of financial position

Equipment 691 905Intangible assets 1,207 1,588Inventories 8 147Trade and other receivables 311 202Investments in unit trust funds in Malaysia 293 1,018Cash and cash equivalents 265 267Trade and other payables (124) (111)Net assets 2,651 4,016

Attributable to: Equity holder of parent 1,352 2,048 Non-controlling interests 1,299 1,968

2,651 4,016

The summarised financial information of Celcopon is provided below. This information isbased on amounts before eliminations of inter-company transactions.

Financial information of subsidiaries that have material non-controlling interests areprovided below:

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14. Investments in subsidiaries (cont'd.)

2017 2016RM'000 RM'000

Summarised statement of comprehensive income

Revenue 627 429Cost of sales (450) (385)Gross profit 177 44Other income 23 48Other expenses (9) (9)Administrative expenses (1,496) (1,426)Selling and marketing expenses (60) (34)Loss for the year, representing total comprehensive loss (1,365) (1,377)

Attributable to non-controlling interests (669) (674)

2017 2016RM'000 RM'000

Summarised statement of cash flows

Net cash used in operating activities (783) (1,257)Net cash generated from/(used in) investing activities 22 (595)Net cash generated from/(used in) financing activities 34 (2,601)Net decrease in cash and cash equivalents (727) (4,453)

15. Investment in an associate

On 13 September 2017, the Company acquired a 49% interest in Merchantrade DigitalServices Sdn. Bhd., a company incorporated in Malaysia, for a consideration of RM490. Asat the reporting date, the associate is dormant.

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16. Inventories

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

At cost: Recharge vouchers 417 1,418 417 1,418 Starter packs 95 216 95 216 Miscellaneous cards 8 19 8 19 Prepaid cards 269 - 269 - Mobile coupons 9 147 - -

798 1,800 789 1,653

At net realisable value: Recharge vouchers 392 - 392 - Starter packs 88 193 88 193

480 193 480 193Total inventories at the lower of cost and net realisable value 1,278 1,993 1,269 1,846

17. Trade receivables

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Communication business receivables 4,800 4,689 4,800 4,689Remittance business receivables 906 - 906 -Money changing receivables 141 131 141 131Wholesale currency receivables 32,474 35,219 32,474 35,219Advances to disbursement partner agents 1,106 231 1,106 231Receivables from remittance partners 1,194 925 1,194 925Payment services receivable 1,224 - 1,224 -Others 619 22 47 -

42,464 41,217 41,892 41,195

Less: Allowance for impairment (9) - - -42,455 41,217 41,892 41,195

During the financial year, RM243,000 (2016: RM Nil) was recognised as an expense forinventories carried at net realisable value. This is recognised in cost of sales (Note 4).

Group Company

CompanyGroup

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17. Trade receivables (cont'd.)

Ageing analysis of trade receivables

The ageing analysis of the Group's and Company's trade receivables is as follows:

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Neither past due nor impaired 41,429 40,630 40,973 40,617Past due but not impaired: 1 to 30 days 43 453 34 450 31 to 60 days 163 87 75 81 Less than 60 days 820 47 810 47

1,026 587 919 578Impaired 9 - - -

42,464 41,217 41,892 41,195

Receivables that are neither past due nor impaired

Receivables that are past due but not impaired

None of the Group's and the Company's trade receivables which are neither past due norimpaired have been renegotiated during the year.

The Group's and the Company's wholesale currency receivables of RM32,474,000 (2016:RM35,219,000) has been received subsequent to year end.

At the reporting date, trade receivables of the Group and the Company that are past due butnot impaired amounted to RM1,026,000 (2016: RM587,000) and RM919,000 (2016:RM578,000) respectively. These receivables are unsecured in nature.

Trade receivables are non-interest bearing and are generally given credit terms of 1 to 30days (2016: 1 to 30 days).

Group Company

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17. Trade receivables (cont'd.)

Receivable that is impaired

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

- - - -Allowance for impairment 9 - 9 -Balance at 31 December 9 - 9 -

18. Non-trade receivables, deposits and prepayments

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Financial assets:Deposits with disbursement partner banks 3,525 5,620 3,525 5,620Prefund with telecommunication service providers 26 - 26 -Rental deposits 2,040 1,386 2,030 1,376Amount due from subsidiaries - - 444 26Other receivables 1,643 790 1,476 737

7,234 7,796 7,501 7,759

Non-financial assets:Prepayments 2,199 2,028 2,007 1,999Utilities deposits 424 396 423 395

2,623 2,424 2,430 2,3949,857 10,220 9,931 10,153

Company

Group Company

Individually impaired

Balance at 1 January

The above receivable that is individually determined to be impaired at the reporting daterelates to a debtor that is in significant financial difficulties and have defaulted on payments.The receivable is not secured by any collateral or credit enhancements.

Other receivables of the Company are neither past due nor impaired at the financial yearend.

The movements in the allowance for impairment of receivables is as follows:

GroupIndividually impaired

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19. Deferred tax liabilities/(assets)

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

At beginning of the financial year 749 (423) 749 (423)Recognised in profit or loss (Note 9) 184 1,172 184 1,172Recognised in other comprehensive income (Note 9) 59 - 59 -At end of the financial year 992 749 992 749

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Presented after appropriate offsetting as follows:

Deferred tax assets (1,067) (1,242) (1,067) (1,242)Deferred tax liabilities 2,059 1,991 2,059 1,991

992 749 992 749

Group Company

Group Company

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19. Deferred tax liabilities/(assets) (cont'd.)

Deferred tax assets:

Unabsorbedcapital

Provisions allowances TotalRM'000 RM'000 RM'000

Group

At 1 January 2016 (1,174) (308) (1,482)Recognised in profit or loss 143 97 240At 31 December 2016 (1,031) (211) (1,242)

At 1 January 2017 (1,031) (211) (1,242)Recognised in profit or loss 370 (195) 175At 31 December 2017 (661) (406) (1,067)

Company

At 1 January 2016 (1,174) (308) (1,482)Recognised in profit or loss 143 97 240At 31 December 2016 (1,031) (211) (1,242)

At 1 January 2017 (1,031) (211) (1,242)Recognised in profit or loss 370 (195) 175At 31 December 2017 (661) (406) (1,067)

The components and movements of deferred tax assets and liabilities prior to offsetting areas follows:

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19. Deferred tax liabilities/(assets) (cont'd.)

Deferred tax liabilities:

Propertyand Revaluation

equipment surplus TotalRM'000 RM'000 RM'000

Group

At 1 January 2016 781 278 1,059Recognised in profit or loss 898 34 932At 31 December 2016 1,679 312 1,991

At 1 January 2017 1,679 312 1,991Recognised in profit or loss 9 - 9Recognised in other comprehensive income - 59 59At 31 December 2017 1,688 371 2,059

Company

At 1 January 2016 781 278 1,059Recognised in profit or loss 898 34 932At 31 December 2016 1,679 312 1,991

At 1 January 2017 1,679 312 1,991Recognised in profit or loss 9 - 9Recognised in other comprehensive income - 59 59At 31 December 2017 1,688 371 2,059

2017 2016RM'000 RM'000

Unutilised tax losses 1,627 898Unabsorbed capital allowances 1,094 499

2,721 1,397

The unutilised tax losses and unabsorbed capital allowances of the Group are availableindefinitely for offsetting against future taxable profits of the subsidiary in which it arose,subject to no substantial change in shareholdings of the subsidiary under the Income TaxAct, 1967 and guidelines issued by the tax authority.

Deferred tax assets of subsidiaries have not been recognised in the financial statements inrespect of the following items due to uncertainty of its realisation:

Group

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20. Financial assets at fair value through profit or loss ("FVTPL")

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Investments in unit trust funds in Malaysia 293 2,178 - 1,159Foreign currencies held for trading 22,272 16,290 22,272 16,290

22,565 18,468 22,272 17,449

21. Deposits and placements with a licensed bank

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Fixed deposits with a licensed bank with original maturity of more than 3 months - 8,937 - 8,937

22. Cash and short-term funds

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Cash and bank balances 41,814 23,095 40,504 22,828Fixed deposits with licensed banks with original maturity of less than 3 months - 67 - 67Short-term money market deposits 3,654 - 3,654 -Pre-funding to disbursement partner banks 66,232 62,009 66,232 62,009DSRA with a licensed bank (Note 25(b)) 1,280 962 1,280 962

112,980 86,133 111,670 85,866

Group Company

Company

The investments in unit trust funds in Malaysia are carried at the published net asset valueof the funds at reporting date.

Foreign currencies held for trading relate to stock of foreign currency denominated notes,which are carried at the foreign exchange rate ruling as at the reporting date.

In the previous financial year, the fixed deposits were placed with a licensed bank, whichbore effective interest rates of 3.20% per annum and had a maturity of 1 year as at thereporting date. The fixed deposits of the Group and the Company have been uplifted duringthe year.

Group Company

Group

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22. Cash and short-term funds (cont'd.)

23. Share capital and share premium

Share capital

Number of Number ofordinary ordinary

shares Amount shares Amount'000 RM'000 '000 RM'000

Issued and fully paid:Ordinary shares

Balance at 1 January 8,680 8,680 8,680 8,680Transfer due to non-par value regime under Companies Act, 2016 - 46,875 - -Balance, at 31 December 8,680 55,555 8,680 8,680

Share premium2017 2016

RM'000 RM'000Balance at 1 January 46,875 46,875Transfer due to non-par value regime under Companies Act, 2016 (46,875) -Balance, at 31 December - 46,875

Group and Company

Group and Company

Pursuant to Section 74 of the Companies Act, 2016 ("the Act"), the Group's and theCompany's ordinary shares no longer have a par or nominal value with effect from 31January 2017. In accordance with the transitional provision set out in Section 618 of the Act,any amount standing to the credit of the share premium account becomes part of theGroup's and the Company's share capital. Companies have 24 months upon thecommencement of the Act to utilise the said credit.

Pre-funding to disbursement partner banks relate to monies placed in the bank accounts ofthe Group and the Company maintained with the disbursement partner banks for thepurpose of remittance services. The pre-funding to disbursement partner banks are non-interest bearing.

DSRA with a licensed bank is maintained in accordance with the terms and conditionsstipulated in the term loan as disclosed in Note 25.

20162017

Short term money market deposits are placed with licensed banks, which bear effectiveinterest rates of between 1.86% to 2.60% per annum and which have a maturity of 4 daysas at the reporting date.

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23. Share capital and share premium (cont'd.)

24. Revaluation reserve

25. Borrowings

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Bank overdrafts - 6,983 - 6,983Term loans 44,100 21,978 44,100 21,978

44,100 28,961 44,100 28,961

The maturity structure of the borrowings can be analysed as follows:

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

On demand - 6,983 - 6,983Repayable within one year 10,300 2,075 10,300 2,075

10,300 9,058 10,300 9,058Repayable between one

to two years 17,700 7,283 17,700 7,283Repayable between two

to five years 16,100 12,620 16,100 12,62033,800 19,903 33,800 19,90344,100 28,961 44,100 28,961

There is no impact on the number of the shares in issue or the relative entitlement of any ofthe members as a result of the transition. During the year, the Group and the Companyhave not utilised any credit in the share premium account which is now part of share capital.

Group Company

Group Company

The revaluation reserve relates to the increase in the fair value of the Group's andCompany's commercial buildings and shop lots, net of deferred taxation. Any decrease infair value to the extent that such decrease relates to an increase on the same assetpreviously recognised in other comprehensive income is recognised in other comprehensiveincome.

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25. Borrowings (cont'd.)

2017 2016 2017 2016Note RM'000 RM'000 RM'000 RM'000

Short-term borrowingsBank overdrafts (a) - 6,983 - 6,983

Term loans: (b) 10-year term loan - 3 - 3 15-year term loan - 51 - 51 5-year term loan - 1,121 - 1,121 Less than 5-year term loan 10,300 900 10,300 900

10,300 2,075 10,300 2,07510,300 9,058 10,300 9,058

Long-term borrowingsTerm loans: (b) 15-year term loan - 175 - 175 5-year term loan - 628 - 628 Less than 5-year term loan 33,800 19,100 33,800 19,100

33,800 19,903 33,800 19,903

(a) Bank overdrafts

(b) Term loans

The Group and the Company have two term loans:

During the year, the Group and Company have fully settled its overdraft facilities.

(ii)

Group Company

A term loan of RM10,000,000 which is repayable by 24 monthly instalments hasbeen fully drawndown during the year. The term loan is secured by way of DSRA(Note 22) and personal guarantee by the Company's executive director.

The bank overdrafts and term loans of the Group and of the Company are denominated inRM.

A term loan of RM35,000,000 which is repayable in two years from the date of firstdrawdown with the option to extend by another two years. The term loan is securedby way of DSRA (Note 22) and personal guarantee by the Company's executivedirector. The Company has fully drawdown the term loan during the year.

(i)

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25. Borrowings (cont'd.)

26. Settlement obligations

2017 2016 2017 2016Note RM'000 RM'000 RM'000 RM'000

International partner agents (a) 6,462 2,745 6,462 2,745Agent prefund (a) 7,828 8,169 7,828 8,169Disbursement partner agents (b) 4,343 953 4,343 953Unpaid remittances (c) 25,379 16,285 25,379 16,285Wholesale payables (d) 2,306 7,086 2,306 7,086Payment services payables (e) 1,578 - 1,578 -Others 548 - 533 -

48,444 35,238 48,429 35,238

(a)

(b)

(c)

(d)

(e)

These amounts are unsecured, non-interest bearing and are repayable on demand.

Company

The weighted average effective interest rates of the bank overdrafts and term loans are6.60% and 5.66% (2016: 6.60% and 5.56%) per annum respectively.

Group

Unpaid remittances represent the amounts that have yet to be collected by payees atthe reporting date.

Wholesale payables represent the amounts payable to wholesale agents that have yetto be settled at the reporting date.

Payment services payables represent the amounts deposited by customers in a trustaccount with a bank that have yet to be utilised at the reporting date.

International partner agents and agent prefund represent the amounts that have yet tobe transferred to the disbursement partners at the reporting date.

Disbursement partner agents represent post funding amounts that have yet to besettled at the reporting date.

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27. Non-trade payables and accruals

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Financial liabilities:Accrued operating expenses 3,930 7,952 3,659 7,890Other payables 7,872 5,939 8,280 5,903

11,802 13,891 11,939 13,793Non-financial liabilities:Net goods and services tax payable 93 175 197 277

11,895 14,066 12,136 14,070

The financial liabilities are unsecured, non-interest bearing and are repayable on demand.

28. Earnings per share

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Profit attributable to ordinary equity holders 8,009 7,763 8,523 8,481Number of ordinary shares in issue during the year 8,680 8,680 8,680 8,680Basic and diluted earnings per share 0.92 0.89 0.98 0.98

Group Company

Basic earnings per share ("EPS") is calculated by dividing the net profit for the yearattributable to ordinary equity holders of the parent by the weighted average number ofordinary shares outstanding during the year.

Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of theparent by the weighted average number of ordinary shares outstanding during the year plusthe weighted average number of ordinary shares that would be issued on conversion of allthe dilutive potential ordinary shares into ordinary shares.

Group Company

There were no dilutive potential ordinary shares as at the end of the relevant reportingdates. There have been no other transactions involving ordinary shares between thereporting date and the date of these financial statements.

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29. Related party disclosures

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

(a) Related party transactions

(Expenses paid and payable)/ Income received and receivable

Sumitomo Corporation Asia Pte Ltd, a corporate shareholder- Management fee (198) (360) (198) (360)

Celcom Mobile Sdn. Bhd., a subsidiary of a corporate shareholder:- Purchase of starter packs and recharge vouchers (24,423) (64,289) (24,423) (64,289)- Rebates 16,957 19,305 16,957 19,305- Management fee - (65) - (65)

Eightsquare Infotrans Sdn.Bhd., a subsidiary ofthe Company

- Purchase of Mobile Application Development 143 - 143 -

Celcopon Sdn. Bhd., a subsidiary of the Company- Purchase of mobile coupon - - (204) (90)- Management fee income - - 238 198

Jetixa FZCO, a subsidiary of the Company- Purchase of services - - (784) -- Management fee income - - 55 -

Group Company

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29. Related party disclosures (cont'd.)

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Ramasamy K a/l Veeran, the executive director of the Company:- Rental of premises (136) (136) (136) (136)

(b) Related party balances

Celcom Mobile Sdn. Bhd.- Trade receivables 4,021 4,209 4,021 4,209

Celcopon Sdn. Bhd.- Non-trade receivables - - 74 27

Jetixa FZCO- Trade receivables - - 784 -- Non-trade receivables - - 370 -

Eightsquare Infotrans Sdn.Bhd.

- Non-trade payables (164) - (164) -

(c) Compensation of key management personnel

The remuneration of key management personnel during the year was as follows:

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Key management personnel: Short-term employee benefits 4,931 3,802 4,841 3,802 Post-employment benefits 788 446 788 446

5,719 4,248 5,629 4,248

The directors of the Company are of the view that the above transactions have beenentered into in the normal course of business and at terms agreed between the partiesduring the year.

Group Company

Group Company

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29. Related party disclosures (cont'd.)

(c) Compensation of key management personnel (cont'd.)

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Non-executivedirectors' fees (Note 7) 245 156 240 156

Executive directors' remuneration (Note 7(a)) 2,079 1,637 2,079 1,637

8,043 6,041 7,948 6,041

30. Operating lease arrangements

The Group as lessee

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Future minimum rental payments:

Rental of office premises:Not later than 1 year 7,391 5,643 7,275 5,619Later than 1 year and not later than 5 years 5,561 5,763 5,561 5,763

12,952 11,406 12,836 11,382

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Rental of equipment:

Not later than 1 year 750 555 750 555Later than 1 year and not later than 5 years 1,259 1,369 1,259 1,369

2,009 1,924 2,009 1,924

Group Company

Key management personnel are those persons having authority and responsibility forplanning, directing and controlling the activities of the Company. The key managementpersonnel of the Company includes directors and senior management.

Group Company

The Group has entered into lease agreements for rental of equipment and office premises.The future aggregrate minimum lease payments under operating leases contracted for as atthe reporting date but not recognised as liabilities are as follows:

Group Company

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31. Capital commitments

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Capital expenditure

Approved but not contracted for:

Property and equipment 169 5,893 169 5,893Intangible assets 1,810 3,507 1,530 3,507Proposed acquisition of a business operation (Note 13 and Note 37(i)) - 13,807 - 13,807Proposed acquisition of interest in an associate (Note 37(ii)) 7,624 - 7,624 -

9,603 23,207 9,323 23,207

Group Company

The capital commitments of the Group and of the Company as at the financial year end areas follows:

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32. Financial instruments by category

2017 2016 2017 2016Note RM'000 RM'000 RM'000 RM'000

Financial assets - FVTPL

Financial assets at fair value through profit or loss 20 22,565 18,468 22,272 17,449

22,565 18,468 22,272 17,449

Financial assets - Loans and receivables

Trade receivables 17 42,455 41,217 41,892 41,195Non-trade receivables 18 7,234 7,796 7,501 7,759Deposits and placements

with licensed bank 21 - 8,937 - 8,937Cash and short-term funds 22 112,980 86,133 111,670 85,866

162,669 144,083 161,063 143,757

Financial liabilities - amortised costs

Settlement obligations 26 48,444 35,238 48,429 35,238Non-trade payables and accruals 27 11,802 13,891 11,939 13,793Borrowings 25 44,100 28,961 44,100 28,961

104,346 78,090 104,468 77,992

Company

The carrying amounts of the financial assets and liabilities in the statements of financialposition by the class of financial instrument are as disclosed below:

Group

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33. Financial risk management objectives and policies

Credit risk

Credit risk concentration profile

At reporting date, approximately:

-

-

The maximum credit risk exposure in respect of trade receivables is limited to the carryingamount of the receivables less allowance for impairment, whereas the maximum exposurefor other receivables, cash and short-term funds and deposits and placements with alicensed bank are the reported carrying values in financial statements. Information regardingtrade and non-trade receivables that are neither past due nor impaired are disclosed in Notes17 and 18.

10% (2016: 10%) of the Group's and the Company's trade receivables were due fromCelcom Mobile Sdn. Bhd., a subsidiary of a listed telecommunications company locatedin Malaysia, and which is a corporate shareholder of the Company.

The Group and the Company are exposed to financial risks arising from their operations andthe use of financial instruments. The key financial risks include credit risk, liquidity risk, cashflow risk, interest rate risk, foreign currency risk and equity price risk.

It is, and has been throughout the current and previous financial years, the Group's and theCompany's policy that no derivatives shall be undertaken except for use as hedginginstruments where appropriate and cost-efficient. The Group and the Company do not applyhedge accounting. The following sections provide details regarding the Group's andCompany's exposure to the above-mentioned financial risks and the objectives, policies andprocesses for the management of these risks.

Credit risk is the risk of loss that may arise on outstanding financial instruments should acounterparty default on its obligations. The Group's and the Company’s exposure to creditrisk arises primarily from trade and non-trade receivables. For other financial assets such ascash and short-term funds and deposits and placements with a licensed bank, the Group andthe Company minimise credit risk by dealing with reputable financial institutions with soundcredit ratings and no history of default.

78% (2016: 52%) of the Group's and the Company's trade receivables were due from alicensed bank in Malaysia; and

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33. Financial risk management objectives and policies (cont'd.)

Liquidity risk

Analysis of financial liabilities by remaining contractual maturities

On demandor within One toone year five years Total

Group RM'000 RM'000 RM'000

At 31 December 2017

Financial liabilitiesSettlement obligations 48,444 - 48,444Non-trade payables and accruals (excluding non-financial liabilities) 11,802 - 11,802Borrowings 10,300 35,643 45,943Total undiscounted financial liabilities 70,546 35,643 106,189

At 31 December 2016


Liquidity risk is the risk that the Group and the Company will encounter difficulty in meetingfinancial obligations due to shortage of funds. The Group's and the Company's exposure toliquidity risk arises primarily from mismatches of the maturities of financial assets andliabilities. The Group's and the Company's objective is to maintain a balance betweencontinuity of funding and flexibility through the use of stand-by credit facilities.

The table below summarises the maturity profile of the Group’s and the Company's financialliabilities based on contractual undiscounted payments:

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Liquidity risk (cont'd.)

Analysis of financial liabilities by remaining contractual maturities (cont'd.)

On demandor within One toone year five years Total

RM'000 RM'000 RM'000Company

At 31 December 2017


At 31 December 2016


Cash flow risk

Cash flow risk is the risk of fluctuation in the amounts of future cash flows associated withmonetary financial instruments. Cash flow forecasts are prepared incorporating all majortransactions. Any temporary excess funds, as and when available, from operating cashcycles, are invested in short-term placements and fixed deposits with a wide array of licensedfinancial institutions at the most competitive interest rates obtainable.

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Interest rate risk

Group and Company

Effectiveinterest Betweenrate per Less than one andannum one year five years Total

% RM'000 RM'000 RM'000At 31 December 2017

Financial assets:Short-term money market deposits 1.86 - 2.60 3,654 - 3,654

Financial liabilities:Term loans 5.66 10,300 33,800 44,100

At December 2016

Financial assets:Deposits and placements

with a licensed bank 3.20 9,004 - 9,004

Financial liabilities:Bank overdraft 6.60 6,983 - 6,983Term loans 5.56 2,075 19,903 21,978

9,058 19,903 28,961

Interest rate risk is the risk that the fair value or future cash flows of the Group's and theCompany's financial instruments will fluctuate because of changes in market interest rates.

The Group's and the Company's exposure to interest rate risk arises primarily from itsfloating rate borrowings. In respect of interest-bearing financial assets and financialliabilities, the following table indicates their effective interest rates at the reporting date andthe periods in which they reprice or mature, whichever is earlier:

At the reporting date, if interest rates had been 50 basis points lower/higher, with all othervariables held constant, the Group's and Company's profit before taxation would have beenRM220,000 (2016: RM99,791) higher/lower, arising mainly as a result of lower/higher interestexpense on borrowings. The assumed movement in basis point for interest rate sensitivityanalysis is based on the currently observable market environment.

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Foreign currency risk

Change in 2017 2016 2017 2016variables RM'000 RM'000 RM'000 RM'000

USD +3% 360 430 360 430USD -3% (360) (430) (360) (430)

BDT +3% 660 490 660 490BDT -3% (660) (490) (660) (490)

IDR +3% 380 639 380 639IDR -3% (380) (639) (380) (639)

INR +3% 478 73 478 73INR -3% (478) (73) (478) (73)

SGD +3% 84 106 84 106SGD -3% (84) (106) (84) (106)

Foreign currency risk is the risk that the fair value or future cash flows of a financialinstrument will fluctuate because of changes in foreign exchange rates.

The Group and the Company are exposed to foreign currency exchange risk arising fromcurrency exposures primarily to USD, BDT, IDR, INR and SGD. These currency risks aregenerally not hedged, as such risks may be naturally hedged through the planned course ofbusiness and by matching income and expenditure to minimise currency exchange.

The following tables demonstrate the sensitivity to a reasonably possible change in USD,BDT, IDR, INR and SGD exchange rates, with all other variables held constant. The impacton the Group’s and the Company’s profit before taxation is due to changes in the fair value ofmonetary assets and liabilities. The Group’s and the Company's exposure to foreign currencychanges for all other currencies is not material.

Effect on profit before taxationGroup

The method used for deriving sensitivity information and significant variables has notchanged from the previous year.

Company

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Equity price risk

34. Fair values

The increase/(decrease) in the Group's and the Company's profit before taxation as atreporting date, assuming net asset value of the investment in unit trust funds fluctuate by+/(-) 5% (2016: +/(-) 5%) with all other variables held constant, is +/(-) RM14,600 (2016:RM109,000) for the Group and RM Nil (2016: RM58,000) for the Company.

The Group and the Company are exposed to price risk arising from investments in unit trustfunds in Malaysia, which are carried at the published net asset value of the funds at reportingdate.

The fair value of long term borrowings has been determined using discounted cash flowtechniques. The discount rates used are based on the effective interest rates of the Group'sand Company's borrowings as disclosed in Note 25. The fair value of long-term borrowingsapproximate their carrying amounts as at 31 December 2017 and 31 December 2016.

Management assessed that the fair values of trade receivables, non-trade receivables,deposits and placements with a licensed bank, cash and short-term funds, settlementobligations, non-trade payables and short-term borrowings approximate their carryingamounts due to the relatively short-term nature of these financial instruments.

Equity price risk relates to risk of fluctuations in fair value of the investment in unit trust fundsor future cash flows of investment in unit trust funds arising from a change of or volatility innet asset value.

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34. Fair values (cont'd.)

Significantunobervable Range Range

Valuation technique input 2017 2016

Commercial Market approach - Estimated building Comparison method value per

square foot

Shop lots Market approach - EstimatedComparison method value per

square foot

Level 1 Level 2 Level 3 TotalRM'000 RM'000 RM'000 RM'000

At 31 December 2017

Assets measured at fair value:Financial assets at FVTPL:Investments in unit trust funds 293 - - 293Foreign currencies held for

trading 22,272 - - 22,272 22,565 - - 22,565

Revalued properties:Commercial buildings

and shop lots - - 2,343 2,343

Liabilities for which fairvalue is disclosed:Long-term borrowings - 33,800 - 33,800

- 33,800 - 33,800

The following table provides the fair value measurement hierarchy of the Group's and theCompany's assets and liabilities.

RM508 -RM510

RM334

An increase or decrease in the estimated value per square foot in isolation used in thevaluation will result in a correspondingly higher or lower fair value of the properties.

Description of valuation techniques and the significant unobservable inputs used in thevaluation of the properties are as set out below:

Group

RM486 -RM505

RM256 -RM354

The fair value measurement for the Group's and the Company's properties of RM2,380,000(2016: RM2,220,000), has been categorised under Level 3 of the fair value hierarchy.

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At 31 December 2017

Assets measured at fair value:Financial assets at FVTPL:Foreign currencies held for

trading 22,272 - - 22,272 22,272 - - 22,272


and shop lots - - 2,343 2,343


- 33,800 - 33,800


At 31 December 2016

Assets measured at fair value:Financial assets at FVTPL:Investments in unit trust funds 2,178 - - 2,178Foreign currencies held for

trading 16,290 - - 16,290 18,468 - - 18,468


and shop lots - - 2,159 2,159


- 19,903 - 19,903

Group

Company

The following table provides the fair value measurement hierarchy of the Group's and theCompany's assets and liabilities. (cont'd.)

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At 31 December 2016

Assets measured at fair value:Financial assets at FVTPL:Investments in unit trust funds 1,159 - - 1,159Foreign currencies held for

trading 16,290 - - 16,290 17,449 - - 17,449


and shop lots - - 2,159 2,159


- 19,903 - 19,903

35. Capital management

Company

The following table provides the fair value measurement hierarchy of the Group's and theCompany's assets and liabilities. (cont'd.)

The primary objective of the Group's and of the Company's capital management is to ensurethat it maintains sufficient capital in order to support its business, with minimum capital fundsof RM30,000,000 (2016: RM12,000,000) as required by Bank Negara Malaysia, and tomaximise shareholders' value. The Company is a licensee under Class A and D under theMoney Services Business Act, 2011 of the money services business. As at 31 December2017 and 31 December 2016, the Company has complied with the minimum capitalrequirement stipulated by Bank Negara Malaysia.

The directors monitor capital using a gearing ratio, represented as total debt divided by totalequity plus total debt.

The movement from beginning to ending balances for assets carried under the Level 3hierarchy of the Group and the Company in the previous and current financial years isdisclosed in Note 10. There were no transfers between Level 1 and Level 2 during 2017 and2016.

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35. Capital management (cont'd.)

2017 2016 2017 2016RM'000 RM'000 RM'000 RM'000

Borrowings 44,100 28,961 44,100 28,961Settlement obligations and

non-trade payables and accruals 60,339 49,304 60,565 49,308Total debt (a) 104,439 78,265 104,665 78,269

Total equity (b) 120,687 112,752 120,505 111,795

Capital and total debt (c) = (a) + (b) 225,126 191,017 225,170 190,064

Gearing ratio (d) = (a)/(c) 0.46 0.41 0.46 0.41

36. Segment information

(a) Money services business

(b) Communication business

The communication business segment covers provision of prepaid services for voice,data, international direct dialing to individual customers and international airtime transferservices.

The money services business segment covers remittance activities, money changingactivities and wholesale currency activities.

Group Company

The following segment information has been prepared in accordance with MFRS 8 OperatingSegments , which defines the requirements for the disclosure of financial information of anentity’s operating segments. It is prepared on the basis of the "management approach",which requires presentation of the segments on the basis of internal reports about thecomponents of the entity which are regularly reviewed by the chief operating decision makerin order to allocate resources to a segment and assess its performance. The Group’sbusinesses are organised into the following four segments based on the types of productsand services that the segment provides:

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36. Segment information (cont'd.)

(c) Payment business

(d) Other business

The other business includes selling of mobile coupons, providing system developmentand solutions, and marketing services on remittance business.

The payment business comprises the issue of the electronic wallet and multi-currencyVisa prepaid card, as well as the merchant acquisition business.

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Money Communi- Adjustmentsservices cation Payment Others Total and

Group business business business business segments eliminations Consolidated2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Revenue 120,509 26,482 47 2,030 149,068 (855) 148,213Cost of sales (30,776) (12,610) (39) (605) (44,030) 853 (43,177)Gross profit 89,733 13,872 8 1,425 105,038 (2) 105,036Other income 562 317 17 24 920 (293) 627Other operating expenses (71,230) (17,134) (1,211) (2,493) (92,068) 297 (91,771)Finance costs (2,398) (42) - - (2,440) - (2,440)Profit before taxation 16,667 (2,987) (1,186) (1,044) 11,450 2 11,452Taxation (4,057)Net profit for the year 7,395

Other disclosuresDepreciation of property and equipment 3,327 932 21 217 4,497 4,497Amortisation of intangible assets 881 389 63 381 1,714 1,714

Reconciliation of profit before taxation

Segment profit 11,450EliminationsInter-segment sales elimination from subsidiaries (855)Inter-segment purchases elimination from subsidiaries 853Inter-segment management fee income charged to subsidiaries (293)Inter-segment management fee expense charged to subsidiaries 297

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Money Communi- Adjustmentsservices cation Payment Others Total and

Group business business business business segments eliminations Consolidated2017 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Segment assetsProperty and equipment 11,803 5,635 265 798 18,501 - 18,501Intangible assets 3,487 1,141 2158 1,211 7,997 - 7,997Inventories - 1,000 269 9 1,278 - 1,278Trade receivables 35,868 4,800 1,224 1,322 43,214 (759) 42,455Unallocated assets 155,281 714 155,995Total assets 226,271 (45) 226,226

Segment liabilitiesSettlement obligations 46,463 388 1,578 15 48,444 - 48,444Unallocated liabilites 57,322 (227) 57,095Total liabilities 105,766 (227) 105,539

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Money Communi- Adjustmentsservices cation Payment Total and

Group business business business segments eliminations Consolidated2016 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Revenue 93,818 66,655 429 160,902 (90) 160,812Cost of sales (24,518) (48,123) (385) (73,026) 90 (72,936)Gross profit 69,300 18,532 44 87,876 - 87,876Other income 7,332 307 48 7,687 (198) 7,489Other operating expenses (58,846) (23,146) (1,469) (83,461) 198 (83,263)Finance costs (350) (134) - (484) - (484)Profit before taxation 17,436 (4,441) (1,377) 11,618 - 11,618Taxation (4,529)Net profit for the year 7,089

Other disclosuresDepreciation of property and equipment 2,869 1,077 181 4,127 - 4,127Amortisation of intangible assets 499 324 318 1,141 - 1,141

Reconciliation of profit before taxation

Segment profit 11,618EliminationsInter-segment sales elimination from a subsidiary (90)Inter-segment purchases elimination from a subsidiary 90Inter-segment management fee income charged to a subsidiary (198)Inter-segment management fee expense charged to a subsidiary 198

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Money Communi- Adjustmentsservices cation Payment Total and

Group business business business segments eliminations Consolidated2016 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Segment assetsProperty and equipment 14,728 2,462 905 18,095 - 18,095Intangible assets 3,799 912 1,588 6,299 - 6,299Inventories - 1,846 147 1,993 - 1,993Trade receivables 36,506 4,703 8 41,217 - 41,217Unallocated assets 127,248 (3,086) 124,162Total assets 194,852 (3,086) 191,766

Segment liabilitiesSettlement obligations 35,238 - - 35,238 - 35,238Unallocated liabilites 43,802 (26) 43,776Total liabilities 79,040 (26) 79,014

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37. Significant and subsequent events

(i) Acquisition of the money changing business operations of Vital Rate Sdn. Bhd.

(ii) Acquisition of shareholding interests in KLIQ Pte. Ltd., Singapore

(iii) Non-settlement of trade transaction for Wholesale Currency Business

The Company has issued a Letter of Demand to the licensed money changer and itsguarantors for the recovery of the outstanding debt, and has taken out a Writ ofSummons, which is currently fixed for case management on 23 April 2018.

The lawyers are of the opinion that the Company has a good chance of recovery.

Pursuant to the acquisition, the money changing business operations of VRSB hasbeen incorporated into the business operations of the Company.

On 28 Febuary 2017, the Company completed the acquisition of the money changingbusiness operations of VRSB for a total purchase consideration of RM13,807,000.

On 26 February 2018, the Company has completed the above subscription at a totalcost of RM7,624,000.

On 24 October 2017, the Company had entered into a conditional Share SubscriptionAgreement to subscribe for 2,450,000 ordinary shares of SGD1.00 to acquire a 49%shareholding in KLIQ Pte. Ltd., the operator of M1 digital remittance services for a totalinvestment of SGD2,550,000.

On 25 February 2018, one of the wholesale currency business trading counterparties, alicensed money changer, had not settled outstanding trade transactions amounting inaggregate to RM8,334,820.

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