Pharmaniaga Ar2017

c o n t e n t s
3 About Us 83 Statement on Risk Management and Internal

4 At a Glance Control
5 2017 Key Developments 91 Audit Committee Report
6 Five-Year Financial Highlights 95 Statement of Directors’ Responsibility for
8 Corporate Information Preparation of Financial Statements
10 Financial Calendar 96 Financial Statements
12 Awards & Recognitions 218 Other Compliance Information
14 Board of Directors 219 Analysis of Shareholdings
16 Profile of Directors 219 Distribution of Shareholdings
22 Senior Management Team 219 30 Largest Shareholders
24 Profile of Senior Management Team
221 Substantial Shareholders
32 Nurturing Leaders
221 Directors’ Shareholdings
34 Chairman’s Statement
42 Managing Director’s Review 222 Group Property List
48 Operations Review 228 Group Corporate Directory
62 Corporate Values 230 Notice of Annual General Meeting
70 Corporate Governance Overview Statement Proxy Form
r a t i o n a l e
Continuously delivering on our promises,
Pharmaniaga Berhad will consistently achieve
new heights of excellence as a provider of
quality products and services. Leveraging on
the synergistic strengths of our diversed business
solutions, we are focused on ensuring sustainable
growth into the future.
vision
the
PREFERRED PHARMACEUTICAL
brand in regional markets
mission
provide
QUALITY PRODUCTS and superior services
byprofessional, committed and
caring employees
core values
•RESPECTŲŗŲINTEGRITY
•TEAMWORKŲŗŲEXCELLENCE
2
ABOUT US
As the largest integrated pharmaceutical group in Malaysia, Pharmaniaga Berhad
has blazed a trail within the healthcare industry as a provider of quality products and
services. Listed on the Main Board of Bursa Malaysia and having established itself as a
leader in the local market, Pharmaniaga also has a growing global presence.
Our core businesses span across a wide spectrum of the industry. This includes logistics
and distribution, manufacturing of generic pharmaceuticals and medical devices, sales
and marketing as well as distribution of medical products and hospital equipment.
Drawing upon the synergies of these activities, Pharmaniaga has expanded its reach
to Malaysians through the establishment of community pharmacy.
The heart of our corporate philosophy is driven by our motto, Passion for Patients.
Above all, we emphasise on delivering our promises to our clients with the highest
standards of excellence, as we seek to create a lasting legacy of doing business with
a conscience.
Ann uA l Re poRt 2 01 7 3
At A Glance
REVENUE EBITDA
RM2.3 DIVIDEND RM148
BILLION 19 SEN MILLION
PROFIT PROFIT
AFTER TAXATION CAPEX BEFORE TAXATION
RM55 RM39 RM73
MILLION MILLION MILLION
4
2017
Key Developments
49% 2017 51% 2016
51% 49%
Concession Non-Concession
32%
CONTRIBUTION
30
NEW PRODUCTS
FROM OVERSEAS REGISTERED
TOTAL OPERATIONS TO
ASSETS GROUP’S REVENUE
RM1.6 19%
BILLION 60
PRODUCTS
CONTRIBUTION
FROM PRIVATE
SECURED HALAL BUSINESS SECTOR TO
CERTIFICATION GROUP’S REVENUE
IMPLEMENTATION
EMPLOYEES OF SAP S4/HANA
3,322 (HIGH PERFORMANCE ANALYTIC APPLIANCE)
ACROSS ALL MANUFACTURING SITES IN MALAYSIA
5 -Year
Financial Highlights
All figures are in RM Million unless

otherwise stated 2017 2016 2015 2014 2013
FINANCIAL PERFORMANCE
Revenue 2,324.0 2,189.0 2,189.3 2,122.9 1,946.6
Profit before taxation 73.1 72.0 112.7 125.6 93.0
Profit after taxation 55.1 45.9 84.6 94.2 56.8
Net attributable profit 53.8 45.6 84.0 93.8 55.2
Earnings per share sen 20.7 17.6 32.5 36.2 21.3
Return on equity % 10.2 8.6 15.9 18.5 11.5
Return on assets % 6.1 6.6 9.3 12.0 9.2
Return on revenue % 4.4 4.8 5.8 6.6 5.5
DIVIDENDS
Dividend payout % 91.6 90.9 92.4 77.2 75.1
Dividend payment 49.3 41.5 77.7 72.5 41.5
Net dividend per share sen 19.0 16.0 30.0 28.0 16.0
Dividend yield % 4.1 3.0 4.7 6.1 3.6
Dividend cover times 1.1 1.1 1.1 1.3 1.3
GEARING
Borrowings 444.3 616.9 400.2 201.1 199.9
Gearing times 0.8 1.2 0.8 0.4 0.4
Interest cover times 3.5 3.1 5.9 8.4 7.3
OTHER FINANCIAL STATISTICS

Net assets per share sen 203 205 204 203 188
Price earning ratio times 22.2 30.1 19.6 12.6 20.9
Paid up share capital 146.2 129.7 129.4 129.4 129.4
Shareholders’ equity 528.0 530.6 529.4 526.5 487.6
Total equity 547.1 559.4 560.0 552.0 503.3
Total assets 1,607.8 1,683.1 1,495.6 1,242.7 1,111.1
6
REVENUE PROFIT BEFORE TAXATION
(RM) Billion (RM) Million
125.6
112.7
2.3
2.2
2.2
2.1
1.9
93.0
73.1
72.0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
SHAREHOLDERS’ EQUITY EARNINGS PER SHARE

(RM) Million (sen)
36.2
529.4
530.6
528.0
526.5
487.6
32.5
21.3
20.7
17.6
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
NET DIVIDEND PER SHARE NET ASSETS PER SHARE

(sen) (sen)
205
204
203
203
30.0
188
28.0
19.0
16.0
16.0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
CORPORATE
INFORMATION
BOARD OF DIRECTORS
TAN SRI DATO’ SERI LODIN WOK KAMARUDDIN
Non-Independent Non-Executive Chairman
DATO’ FARSHILA EMRAN

Managing Director
MOHD SUFFIAN HAJI HARON

Senior Independent Non-Executive Director
DANIEL EBINESAN
Non-Independent Non-Executive Director
IZZAT OTHMAN
Independent Non-Executive Director
LIEUTENANT GENERAL DATO’ SERI PANGLIMA DR SULAIMAN ABDULLAH (RETIRED)

8
COMPANY SECRETARY PRINCIPAL BANKERS AUDIT COMMITTEE
Tasneem Mohd Dahalan (LS 0006966) Standard Chartered Bank Malaysia Berhad Chairman
Tel : +603-2141 9044 Bank Islam Malaysia Berhad Mohd Suffian Haji Haron
Fax : +603-2144 3016 Hong Leong Islamic Bank Berhad Members
Affin Islamic Bank Berhad Izzat Othman
STOCK EXCHANGE LISTING Daniel Ebinesan
Main Market of Bursa Malaysia AUDITORS Lieutenant General Dato’ Seri Panglima
Securities Berhad Messrs. PricewaterhouseCoopers PLT Dr Sulaiman Abdullah (Retired)
Sector : Trading/Services (LLP0014401-LCA & AF 1146)
Stock Code : 7081 Chartered Accountants NOMINATION COMMITTEE
Level 10, 1 Sentral, Jalan Rakyat Chairman
REGISTERED ADDRESS Kuala Lumpur Sentral Mohd Suffian Haji Haron
28th Floor, Menara Boustead P.O. Box 10192
Members
No. 69 Jalan Raja Chulan 50706 Kuala Lumpur
Tan Sri Dato’ Seri Lodin Wok Kamaruddin
50200 Kuala Lumpur
Izzat Othman
Tel : +603-2141 9044 SHARE REGISTRAR
Fax : +603-2141 9750 Tricor Investor & Issuing House Services
Sdn Bhd (11324-H)
REMUNERATION COMMITTEE
Chairman
BUSINESS ADDRESS Unit 32-01, Level 32, Tower A
Mohd Suffian Haji Haron
No. 7, Lorong Keluli 1B Vertical Business Suite, Avenue 3
Kawasan Perindustrian Bangsar South Members
Bukit Raja Selatan No. 8, Jalan Kerinchi Tan Sri Dato’ Seri Lodin Wok Kamaruddin
Seksyen 7, 40000 Shah Alam 59200 Kuala Lumpur Izzat Othman
Selangor Darul Ehsan Tel : +603-2783 9299
Tel : +603-3342 9999 Fax : +603-2783 9222 SUSTAINABILITY COMMITTEE
Fax : +603-3341 7777 Chairman
Website: www.pharmaniaga.com Daniel Ebinesan
Emails: Members
i) info@pharmaniaga.com Mohd Suffian Haji Haron
ii) customercare@pharmaniaga.com Lieutenant General Dato’ Seri Panglima
iii) alert@pharmaniaga.com Dr Sulaiman Abdullah (Retired)
FINANCIAL YEAR
1 JANUARY
to
31 DECEMBER
2017
FINANCIAL ANNUAL REPORT
CALENDAR
Issued
13 March 2018
ANNUAL GENERAL MEETING
To be held
11 April 2018
10
DIVIDENDS
RESULTS
First Quarter First Interim Third Interim

Announced 16 May 2017 Announced Announced
16 May 2017 15 November 2017
Entitlement date Entitlement date
31 May 2017 4 December 2017
Second Quarter Payment date Payment date
Announced 16 August 2017
7 June 2017 15 December 2017
Third Quarter Second Interim Fourth Interim

Announced 15 November 2017 Announced Announced
16 August 2017 27 February 2018
Entitlement date Entitlement date
5 September 2017 15 March 2018
Fourth Quarter
Announced 27 February 2018 Payment date Payment date
18 September 2017 28 March 2018
Awards &
Recognitions
1 2
AWARDS
1. Anugerah Majikan Berdaya Saing Glokal 2. Anugerah Majikan 1Malaysia (Syarikat Besar/GLC)
Kementerian Sumber Manusia Kementerian Sumber Manusia
12
6
5
3 4 8 9
AWARDS
3. The BrandLaureate Best Brands Award 6. AON Best Employers Malaysia Awards 2017
Most Sustainable Brand-Integrated Healthcare Solutions Commitment to Employer Brand
2016-2017 (Pharmaniaga Research Centre Sdn Bhd)
The BrandLaureate AON
4. Malaysia’s 100 Leading Graduate Employers 2017 7. Frost & Sullivan Malaysia Excellence Awards 2017
Pharmaceutical Sector Pharmaceutical Company of the Year
GTI Media Frost & Sullivan
5. AON Best Employers Malaysia Awards 2017 8. Asia Corporate Excellence & Sustainability Awards 2017
Commitment to High Performance Culture Woman Entrepreneur of the Year
(Pharmaniaga Logistics Sdn Bhd) MORS Group
AON
9. Asia Corporate Excellence & Sustainability Awards 2017
Top Companies in Asia
MORS Group
Board of
Directors
Dato’ Farshila Emran
14
Daniel Ebinesan Izzat Othman Lieutenant General Dato’ Seri Panglima
Dr Sulaiman Abdullah (Retired)
Profile of
Directors Tan Sri Dato’ Seri Lodin Wok Kamaruddin
Chairman
Age : 68
Gender : Male
Nationality : Malaysian
Date of first appointment to the Board: 29 April 2011

Date of last re-election: 29 March 2016
Board Committee(s)
• Member of Nomination Committee
• Member of Remuneration Committee
Board Meeting attended in the financial year: 4/4
Qualification(s)
• Bachelor of Business Administration and Master of Business
Administration, University of Toledo, Ohio, United States of America
• Member of Asian Institute of Chartered Bankers (AICB)
Directorship in other public listed companies

• Boustead Holdings Berhad
• Boustead Plantations Berhad
• Boustead Heavy Industries Corporation Berhad
Directorship in public companies

• UAC Berhad
• MHS Aviation Berhad
• Boustead Properties Berhad
• Badan Pengawas Pemegang Saham Minoriti Berhad
• Affin Hwang Asset Management Berhad
Any family relationship with Director and/or major shareholder of

Pharmaniaga Berhad or any companies that have entered into any
transactions with Pharmaniaga Berhad or its subsidiaries: None
List of convictions for offences within the past 10 years other than
traffic offences, if any: None
Working experience and occupations

Tan Sri Dato’ Seri Lodin is Chief Executive of Lembaga Tabung Angkatan
Tentera and Deputy Chairman/Group Managing Director of Boustead
Holdings Berhad. He is also Chairman of Boustead Heavy Industries
Corporation Berhad. In addition, he is Vice Chairman of Boustead
Plantations Berhad.
He has extensive experience in not only managing a provident fund but also
in the establishment, restructuring and management of various business
interests ranging from banking, plantation, trading, financial services,
property development to oil and gas, pharmaceuticals and shipbuilding.
16
Managing Director
Age : 51
Gender : Female
Date of first appointment to the Board: 25 March 2011

Board Committee(s): None
Board meeting attended in the financial year: 4/4
Qualification(s)
• Master of Business Administration (C) Universiti Utara Malaysia (UUM)
• Diploma in Office Management, Universiti Teknologi MARA (UiTM)
Directorship in other public listed companies: None
Directorship in public companies: None

List of convictions for offences within the past 10 years other than traffic
offences, if any: None

Dato’ Farshila Emran began her career as a tutor in UiTM before she became
the Assistant Representative of SEVES Sediver France, a French public listed
high voltage transmission equipment company in Malaysia, in 1990. Then,
she was promoted as the Malaysian Representative of the successful company
until 2001. Within the same year, she established Idaman Pharma Sdn Bhd and
started her venture in the highly regulated pharmaceutical industry.
In 2005, she took the bold step by taking over a pharmaceutical plant in
Sungai Petani, Kedah and established Idaman Pharma Manufacturing Sdn Bhd
(IPMSB). Subsequently, she acquired another plant in Seri Iskandar, Perak. Under
her leadership, IPMSB developed a synergistic partnership with Boustead Holdings
Berhad (Boustead) and facilitated the acquisition of Pharmaniaga Berhad by
Boustead in 2011. Dato’ Farshila was subsequently appointed as the Managing
Director of Pharmaniaga Berhad and since then, she has successfully enhanced
the value of the Company.
She has won several awards including Woman Entrepreneur of the Year 2017
by Aces Corporate Excellence & Sustainability Awards, Masterclass Excellence
Award for Woman CEO of the Year at Utusan Business Awards 2015; MBA
Industry Excellence Award - Health Services by The ASEAN Business Advisory
Council Malaysia in 2013 and Anugerah Kesatria Puteri Korporat, an initiative
by the Ministry of Women, Family and Community Development, Malaysia
in 2012. She was also conferred with Honorary Mastership by Cyberjaya
University College of Medical Sciences in 2016. Dato’ Farshila sits on Universiti
Kuala Lumpur’s Industrial Advisory Board and also a member of Global Science &
Innovation Advisory Council Steering Committee for Malaysia.
Profile of
Directors
Age : 72
Gender : Male
Date of first appointment to the Board: 29 April 2011

Date of last re-appointment: 6 April 2017
Board Committee(s)
• Chairman of Audit Committee
• Chairman of Nomination Committee
• Chairman of Remuneration Committee
• Member of Sustainability Committee
Qualification(s)
• Bachelor of Economics, University of Malaya
• Master Business Administration, University of Oregon, United States of America

• Affin Bank Berhad
• Affin Islamic Bank Berhad
• Lonpac Insurance Berhad
Any family relationship with Director and/or major shareholder of Pharmaniaga

Berhad or any companies that have entered into any transactions with
Pharmaniaga Berhad or its subsidiaries: None

Encik Suffian has had a distinguished career in the Malaysian Civil Service, starting
as a Diplomatic and Administrative Officer, attached to the Implementation and
Coordination Unit of the Prime Minister (PM) Department and subsequently to
the Ministry of Public Enterprises. Whilst at the PM Department, he was assigned
as the special assistant to the Special Economic Adviser to the Government. He
served the Board of Directors of Fraser’s Hill Development Corporation, the State
Development Corporations of Perak, Pahang and Terengganu as well as the Board
of Directors of Bank Pembangunan Malaysia, Kompleks Kewangan Malaysia, HICOM
and the Council of MARA.
After 13 years of service, he left the Government Service to serve a Government

Linked Company involved in international business, after which he ventured on his
own to be the Managing Director of an Insurance Broking Company. Amongst his
other involvements after that were in the securities industry and asset management
sectors. He has also served as a Director of Hitachi Sales Malaysia, Meiden Electric
Engineering Malaysia (Japan), Far East Computer (India) and Affin Discount Berhad.
He also brings with him vast experience in general trading, power generation and
transmission, aircraft maintenance as well as the oil and gas services industries.
18
Daniel Ebinesan
Non-Independent Non-Executive Director
Age : 72
Gender : Male

Date of last re-appointment: 6 April 2017
Board Committee(s)
• Chairman of Sustainability Committee
• Member of Audit Committee
Qualification(s)
• Fellow of the Chartered Institute of Management Accountants (CIMA)
• Life Member of the Malaysian Institute of Certified Public Accountants (MICPA)
• Member of Malaysian Institute of Accountants (MIA)

• MHS Aviation Berhad


Daniel joined Boustead Holdings Berhad in April 1974 as the Group Accountant.
In January 1982, he was promoted to Group Chief Accountant and subsequently
in January 1993, he was promoted as the General Manager, Finance &
Administration. In July 1996, he assumed the role of Chief Financial Officer
and subsequently appointed as Group Finance Director until October 2017.
He is now the Advisor, Group Finance of Boustead Holdings Berhad. He is
responsible for all financial matters including acquisition of strategic businesses,
treasury, risk management strategies and formulation of the Boustead Group’s
financial policies and tax planning.
He is a member of the Board of Trustees of Kumpulan Wang Simpanan

Kakitangan Estet Malaysia since 1996.
Profile of
Directors
Izzat Othman
Age : 56
Gender : Male

Board Committee(s)
• Member of Nomination Committee
• Member of Remuneration Committee
Qualification(s)
• LLB (Hons), University of Malaya


Izzat is a lawyer by profession. He was formerly a director of Affin Securities
Sdn Bhd and BH Insurance Berhad and has vast experience relating to
litigation, conveyancing and corporate matters.
He is a partner in Messrs. Azzat & Izzat Advocates & Solicitors and

currently is a practising lawyer with more than 32 years of experience.
20
Lieutenant General Dato’ Seri Panglima
Dr Sulaiman Abdullah (Retired)
Age : 62
Gender : Male
Date of first appointment to the Board: 29 December 2011

Date of last re-election: 6 April 2017
Board Committee(s)
• Member of Sustainability Committee
Qualification(s)
• Masters of Health Planning, University of New South Wales, Sydney,
Australia
• Diploma in Tropical Medicine and Hygiene, Mahidol University, Thailand
• Masters of Public Health, University of Philippines System, Manila,
Philippines
• Diploma in Principle of Military Medicine, Academy of Health Sciences,
Fort Sam Houston, Texas, United States of America
• Doctor of Medicine (M.D), Universiti Kebangsaan Malaysia (UKM)


Lieutenant General Dato’ Seri Panglima Dr Sulaiman started his career as
Medical Officer with Ministry of Defence and served the Malaysian Armed
Forces for more than 29 years. His last appointment with the Malaysian
Armed Forces was as the Director General of Malaysian Armed Forces
Health Services.
He has vast experience in the management and supervision of Malaysian

Armed Forces Health Services across Malaysia. He was also involved
in the development of Hospital Angkatan Tentera Tuanku Mizan Zainal
Abidin. Throughout his stint with the Malaysian Armed Forces, he built
good relationships with local and foreign governments as well as private
sectors in the medical industry.
Senior Management Team
22
Profile of

Managing Director
Age : 51
Gender : Female
As expressed on page 17 of the Profile of Directors.
24
MOHAMED IQBAL ABDUL RAHMAN
Chief Operating Officer
Age : 54
Gender : Male
Date of appointment to present position

1 June 2012
Working experience
Mohamed Iqbal was appointed as the Information Technology
Director of Pharmaniaga in 2011 and later promoted as the
Chief Operating Officer in 2012. Prior to that, he was the
Head of Operations in a large facility management company
in Malaysia. He has over 26 years of experience in the field of
System Improvement & Operations Management in various
industries. He spearheaded Pharmaniaga’s implementation
of business automations leading to an improved and efficient
operations and customer experience.
Qualification(s)
Bachelor of Computer Science from Universiti Putra Malaysia
(UPM)
Any directorship in public companies and public listed

companies
None
Any family relationship with any director and/ major

shareholder of the Company
None
Any conflict of interests with the Company

None
Other than traffic offences, any convictions for offences

within the past 5 years and other particulars of any
public sanction or penalty imposed by the relevant
regulatory bodies during the financial year, if any
None
Profile of
NORAI’NI MOHAMED ALI

Chief Financial Officer
Age : 51
Gender : Female

1 June 2012
Working experience
Norai’ni joined Pharmaniaga in 2001 as the Deputy
General Manager of Group Finance and later promoted
to Procurement Director in 2011, subsequently she was
promoted as the Group Chief Financial Officer in 2012. She
also sits on the Boards of local and overseas subsidiaries of
Pharmaniaga Group. Prior to joining the Company, Norai’ni
was attached to Opus Group Berhad, a subsidiary of UEM
Group Berhad for 8 years. She is responsible for all financial
matters including acquisition of strategic business, treasury
and risk management strategies of Pharmaniaga Group. She
has vast experience for more than 26 years in accounting
and finance.
Qualification(s)
• Member of the Association of Chartered Certified
Accountants (ACCA)
• Bachelor of Arts (Honours) Accounting and Finance from
Liverpool John Moores University, United Kingdom

companies
None

None

None
Other than traffic offences, any convictions for

offences within the past 5 years and other
particulars of any public sanction or penalty imposed
by the relevant regulatory bodies during the financial
year, if any
None
26
DATIN SHAMSINAR HJ SHAARI
Technical Director
Age : 64
Gender : Female

1 April 2011
Working experience
Datin Shamsinar was appointed as the Technical Director for
Pharmaniaga in 2011 to manage the research facilities and
manufacturing plants. Previously she was the Technical Advisor
for Idaman Pharma Sdn Bhd and prior to that, she was the Site
Director at GlaxoSmithKline Malaysia. She has over 40 years
of experience under her belt in the pharmaceutical industry.
Qualification(s)
Bachelor of Science Majoring in Pharmacology from University
of London (Chelsea College), United Kingdom

companies
None

None

None

within the past 5 years and other particulars of any public
sanction or penalty imposed by the relevant regulatory
bodies during the financial year, if any
None
Profile of
ABDUL MALIK MOHAMED

Logistics & Distribution Director
Age : 52
Gender : Male

1 April 2011
Working experience
Abdul Malik joined Pharmaniaga in 2003 as the Senior
Manager of Information Technology (IT) and later promoted
as Logistics and Distribution Director in 2011. Before he
joined Pharmaniaga, he had worked for 13 years in IT related
companies and undertook various professional segments
namely healthcare, distribution and logistics systems. He has
vast experience in logistics operations for more than 25 years.
Qualification(s)
Bachelor of Science (Honours) in Computer Science and
Management from Universiti Sains Malaysia (USM)
Any directorship in public companies and public list

None
Any family relationship with any director and/ major of

the Company
None

None
Other than traffic offences, any convictions for of the

past 5 years and other particulars of any p or penalty
imposed by the relevant regulatory bodies during the
financial year, if any
None
28
SHARIFAH FAUZIYAH SYED MOHTHAR
Regulatory Affairs Director
Age : 47
Gender : Female

1 April 2011
Working experience
Sharifah Fauziyah was appointed as the Regulatory Affairs Director
of Pharmaniaga in 2011, oversees regulatory affairs, clinical
affairs, regulatory compliance and customer care. She started
her career in 1995 with Procter & Gamble before joining Idaman
Pharma Sdn Bhd in 2001 and became the Site Director of Idaman
Pharma Manufacturing Sdn Bhd in 2005. She has more than 20
years of experience in the pharmaceutical industry.
Qualification(s)
Bachelor of Pharmacy (Honours) from Universiti Sains Malaysia
(USM)

None
Any family relationship with any director and/ major of the

Company
None

None
Other than traffic offences, any convictions for of the past

5 years and other particulars of any public sanction or
penalty imposed by the relevant regulatory bodies during
the financial year, if any
None
Profile of
ZULHAZRI RAZALI
Commercial Director
Age : 50
Gender : Male

1 June 2014
Working experience
Zulhazri joined Pharmaniaga in 1994 as an Assistant Manager
of Customer Care. He continued expanding his career in
the Company by developing his skills and knowledge in
warehouse management, supply chain and international
business and sales marketing. He was promoted as the
Commercial Director in 2014, oversees sales and marketing
for local and international markets, including operations of
PT Millennium Pharmacon International TBK in Indonesia.
Qualification(s)
• Bachelor of Science (Honours) Pharmacy from University
of Manchester, United Kingdom
• Master of Business Administration from Manchester
Business School, United Kingdom

companies
None

None

None

within the past 5 years and other particulars of any
public sanction or penalty imposed by the relevant
regulatory bodies during the financial year, if any
None
30
YANG FAIRUZ ABDUL AZIZ
Corporate Services Director
Age : 45
Gender : Female

1 September 2017
Working experience
Yang Fairuz was appointed as the Corporate Services Director
in September 2017. Prior to this appointment, she was the
Head of Community Pharmacy for Pharmaniaga Pristine
Sdn Bhd, managing RoyalePharma Pharmacy and Vendor
Development Programme. Before joining Pharmaniaga, she
was attached to Schlumberger’s Geosciences and Petroleum
Engineering segment. Yang Fairuz has vast experience in
sales, business development, operations, human resource
and project management.
Qualification(s)
Bachelor of Applied Science (Honours) Majoring in Geophysics
from Universiti Sains Malaysia

None
Any family relationship with any director and/ major of

the Company
None

None
Other than traffic offences, any convictions for of the

past 5 years and other particulars of any p or penalty
imposed by the relevant regulatory bodies during the
financial year, if any
None
Nurturing Leaders
32
Leadership is not about glorious crowning acts. It’s about keeping
your team focused on a goal and motivated to do their best to
achieve it, especially when the stakes are high and the consequences
really matter. It is about laying the groundwork for others’ success,
and then standing back and letting them shine.
CHAIRMAN’S
Chairman’s
Statement
STATEMENT
A Year of
Solid Progress
DEAR SHAREHOLDER,
2017 WAS A YEAR OF PROGRESS FOR PHARMANIAGA BERHAD. ONCE AGAIN, WE PROVED OUR
CAPACITY FOR BUSINESS SUSTAINABILITY, MARCHING AHEAD IN THE FACE OF CHALLENGING
EXTERNAL CONDITIONS.
Guided by our motto, Passion for Patients, we ensured our business grew in line with our vision
to become the preferred integrated healthcare solutions provider and ultimately, a platform for
bringing quality, affordable healthcare to patients. During the year, we reinforced our business
streams, advanced our Halal agenda and launched multiple products into the market to address
patient needs. We also strengthened research and development (R&D) and invested our capital
to drive growth, as well as achieved a significant first for our lyophilisation capabilities.
As a result, we were able to record stable earnings supported by improved contribution particularly
from our overseas operations, while staying true to our purpose.
ECONOMIC LANDSCAPE
Malaysia’s economy grew by 5.9% in 2017, bolstered by improvements in domestic demand and
exports while the Ringgit delivered a total return of 10.1% for the 2017 fiscal year, as reported by
Bank Negara Malaysia (BNM). This improvement is testament to the effectiveness of BNM’s strategic
measures during the year including the introduction of BNM Interbank Bills and additional foreign
exchange hedging flexibilities.
34
CHAIRMAN
Chairman’s
Statement Revenue of
RM2.3 billion
for the year ended
31 December 2017
During the year, we undertook a

concerted effort to develop and
empower high-potential employees
while drawing in quality talent DIVIDEND
In line with our commitment to enhance shareholder value,

the Board of Directors declared a fourth interim dividend
of 6 sen per share which will be paid on 28 March 2018 to
shareholders on the register as at 15 March 2018.
FINANCIAL PERFORMANCE
This brings 2017’s total dividend per share to 19 sen, with
Against a challenging operating environment, we are pleased a total dividend payout of RM49.3 million. This reflects a
to report that the Group recorded a sustained revenue of dividend yield of 4.1% based on the closing share price for
RM2.3 billion for the year ended 31 December 2017, while the year under review.
profit before taxation stood at RM73 million.
HUMAN CAPITAL
In line with our long-term strategy to grow our non-concession
business, the segment’s contribution to the Group’s revenue Pharmaniaga is committed to nurture a safe and inspiring
expanded to 51%, while the concession business contributed workplace where employees can actualise their potential
49%. while contributing to the Group’s growth as we capitalise on
local and global prospects.
Cost optimisation across the board was improved during
the year through profitability enhancing initiatives that had a During the year, we undertook a concerted effort to develop
positive impact on our liquidity position, which strengthened and empower high-potential employees while drawing in
shareholder value. quality talent. We boosted our employees’ capacity to quickly
adapt to the evolving demands of a constantly changing
The Group recorded a market capitalisation of RM1.2 billion market through results-focused in-house and external training
while shareholders’ funds stood at RM528 million as at 31 initiatives. In addition, we introduced several enhanced
December 2017. Our gearing ratio was 0.8 times while benefits to further incentivise our talent pool such as increased
earnings per share was 21 sen and net assets were RM2.03 medical benefits, optical benefits and meal subsidies for
per share. selected groups of employees.
36
As the nation’s largest listed SUSTAINABILITY
pharmaceutical group, we aim to play
a role in developing the next generation Pharmaniaga is committed to achieving
of Malaysian talents. We undertook the triple bottom line of a sustainable
multiple engagement programmes business – economic, environmental
with local universities and continued and social. We strive to ensure that our
to provide on-the-job training for operations create a positive impact to
fresh graduates under Skim Latihan the community, environment, and that
1Malaysia (SL1M), the Provisional we conduct our business with integrity to
Registered Pharmacists (PRP) initiative ensure its long-term sustainability. Since
as well as internship programmes at our 2016, we have undertaken strategic
subsidiaries. steps to strengthen and broaden our
sustainability initiatives.
We are also proud that Pharmaniaga
maintains its reputation as an in-demand We formalised a Sustainability
employer, acknowledged both by the Committee comprising a Board
industry and our own employees. Our Sustainability Committee and a
continuous employee engagement Sustainability Management Committee
initiatives, driven by our objective that set clear benchmarks for sustainable
to create alignment throughout the development. We also took the initiative
Company, has garnered us multiple to launch our Sustainability Report,
industry awards, including the Anugerah which was embedded in last year’s
Majikan 1Malaysia and Anugerah Annual Report.
Majikan Berdaya Saing Glokal in
conjunction with the National Labour
Day celebration.
Pharmaniaga is
committed to
achieving the
triple bottom line
of a sustainable
business –
economic,
environmental and
social
Chairman’s
Statement
CLOSE TO
RM3 million
was invested for Pharmaniaga’s corporate
responsibility efforts during the year
Close to RM3 million was invested for Pharmaniaga’s corporate

responsibility efforts during the year. Key highlights included
our flood relief efforts in Penang, Kedah, Kelantan and Sabah,
where we mobilised resources and volunteers to assist victims,
conduct health checks and clean homes in addition to donating
food and household items.
As part of our effort to contribute towards the development

of a healthier Malaysia, our Skuad Operasi Sihat Negaraku
conducted 48 programmes nationwide to provide greater
healthcare accessibility to the public.
We are passionate to ensure that our growth is reflected in

the progress of the industry we operate within, which is in line
with the Government’s Corporate Entrepreneur Responsibility
initiative. To empower Malaysian entrepreneurs, we have
entered into strategic partnerships with Paradigm Industry Sdn
Bhd and Bio-Collagen Technologies Sdn Bhd, facilitating the
transfer of industry know-how and management expertise to
nascent small businesses.
38
Our Bumiputera Pharmacy Development Programme
enables pharmacists to improve their entrepreneurial
skills and expand their business network, creating more
opportunities for success.
Through our RoyalePharma Alliance Programme, more

than 130 members across the nation are offered a wider
range of products through central procurement at
competitive prices.
Our vendors are integral to the Group’s growth and

we make it a priority to ensure that we build a strong
partnership with our vendors through various initiatives
throughout the year. We are glad to note that four of
our vendors were honoured with Regional and National
Champions 2017 Awards by Ministry of International
Trade and Industry (MITI).
Pharmaniaga is proud with the progress made, while at

the same time we are conscious that there is more to
be done. We will continue to improve our sustainability
efforts in demonstration of our long-term commitment to
the society, environment and our economic ecosystem.
This year, we are pleased to announce our inaugural

stand-alone Sustainability Report where we have further
outlined our efforts in the three key areas of economic,
environment and social impact, over the past year.
OUTLOOK
The outlook for the global economy is projected to remain

steady at 3% in 2018 and 2019 according to the United
Nations World Economic Situation and Prospects 2018,
stemming primarily from firmer growth in some developed
economies with East and South Asia remaining the world’s
most vibrant regions for growth. The challenge for the
year ahead would be to channel this upturn into sustained
growth.
Chairman’s
Statement
The Malaysian economy is projected to grow between 5% We enhanced our arsenal of tools to expand our footprint
and 5.5% in 2018 according to the International Monetary in the European Union (EU), by implementing the SAP
Fund, with momentum in activity expected to continue to S/4HANA (High Performance Analytic Appliance) Software
be strong in the first half of 2018, reinforced by domestic across our manufacturing operations. This is a first for a
demand and the sustained strength of global trade. Malaysian pharmaceutical company, as this state-of-the-art
performance system facilitates best practices in enterprise
Under the 2018 National Budget, the Government allocated resource management, ensuring we comfortably meet EU
RM26.6 billion for the Ministry of Health, of which RM2.5 market requirements.
billion has been apportioned for medical supplies and RM1.6
billion for consumable and medical support items (Reference: Our plant in Puchong is the first pharmaceutical plant in the
Item 186 of Budget Speech). country to install and commission freeze drying technology for
the lyophilisation of small volume injectable pharmaceutical
The 2018 National Budget demonstrates the Government’s products. We look to further expand our small volume
clear emphasis on the development of the healthcare injectable business in the coming year.
sector. As a leading pharmaceutical manufacturer in
generic pharmaceutical products and medical devices in Our progress in 2017 is testament to the long-term investments
the marketplace, Pharmaniaga is well positioned to capitalise we have made over the last few years to improve scale,
on these opportunities to drive sustained growth. sustainability as well as develop new products. Driven by
our research and development efforts, we are on track to
deliver new product offerings to both local and overseas
markets for the coming years ahead. This should further
strengthen our earnings potential as we scale new heights
in the pharmaceutical arena.
40
ACKNOWLEDGEMENT
Pharmaniaga’s progress would not have been possible without the effort of so many. As we embark on
another year of strong prospects, I would like to thank all who have been an integral part of our success.
My heartfelt thanks to our Board members for their support and invaluable guidance. On behalf of the
Board, I would like to convey our deep appreciation for the hard work and dedication of the management
and staff for their outstanding efforts during the year. I would also like to take this opportunity to
congratulate our Managing Director, Dato’ Farshila Emran for her Woman Entrepreneur of the Year
Award 2017 as part of the Asia Corporate Excellence & Sustainability Awards (ACES). Pharmaniaga
was recognised as well at the ACES, as one of only two organisations to receive the Top Companies
in Asia Award.
To our shareholders, we are grateful for the immense support, which we are committed to reciprocate
with enhanced shareholder value.
We would also like to thank our key client, Ministry of Health, other customers, suppliers, partners,
bankers along with the relevant authorities in Malaysia and internationally, who have played an
instrumental part in our achievements over the years.

Chairman
MANAGING DIRECTOR
MANAGING DIRECTOR’S
REVIEW New Heights of
Excellence
42
Dear Shareholder,
We are pleased to report that 2017 was another
exceptional year for Pharmaniaga Berhad – a year
where we worked as a team to navigate the vagaries of
uncertain market conditions while remaining focused
on rallying the Group to greater heights of operational
excellence. Our efforts during the year allowed us to
further reinforce our position as a leader in the Malaysian
pharmaceutical industry while strengthening our presence
in the international marketplace.
Achieved
FINANCIAL PERFORMANCE OPERATIONAL HIGHLIGHTS 99%
Against an economic landscape that Our vision, distilled in our motto Passion
order
was largely unpredictable, we were able for Patients, guides every aspect of fulfilment for
to build on our strong foundations to
deliver a healthy financial performance
our business and drives our quest for
operational excellence. Keeping this
MOH
in 2017. Pharmaniaga registered a people-oriented philosophy in mind
solid revenue of RM2.3 billion while has helped us deliver a seamless
profit before taxation improved to experience to our customers through
RM73 million. These results were enhanced service levels and improved
achieved on the back of disciplined cost delivery time. Our performance metrics
management, strengthened operational speak for themselves: we achieved
efficiencies as well as solid teamwork
within our highly capable talent pool.
99% order fulfilment for the Ministry of
Health (MOH) for the year under review
REVENUE
and our customer satisfaction survey STOOD AT
In keeping with Pharmaniaga’s long-term amongst key clientele saw majority
strategy and as part of our commitment
to our shareholders, our gearing
of the respondents rating our service
‘Good’ and ‘Excellent’.
RM2.3B
improved to 0.8 times from 1.2 times
in previous year. We are now poised to Additionally, we fulfilled a key
leverage on our ever-improving balance requirement of the concession
sheet to invest in opportunities that agreement through the delivery of the
will contribute to the enhancement of Pharmacy Information System (PhIS) to
shareholder value. all government facilities equipped with
the requisite infrastructure. The PhIS
During the year, we invested a total provides greater operational efficiency
of RM39 million in capital expenditure and improves the end-user experience. PROFIT
mainly to upgrade our manufacturing
equipment and facilities. While the concession business BEFORE
contributed 49%, Pharmaniaga’s
non-concession business has grown,
TAXATION
contributing 51% to our total revenue.
This is consistent with our efforts to
RM73M
develop our non-concession business.
Managing
Director’s Review
Our non-concession business saw stable To improve efficiency levels, we 2017 saw a key achievement for
growth during the year, particularly in commenced the implementation Pharmaniaga, when Pharmaniaga
our international operations. As a result of the SAP S/4HANA system, which LifeScience Sdn Bhd became the first
of our improved operational efficiency allowed us to standardise and automate facility in the country to install and
as well as strengthened negotiations our financial processes and reporting commmission freeze drying technology
with principals, we were able to functions. The new system, installed at for the lyophilisation of small volume
gain favourable cost savings for our Bangi manufacturing plant, has elevated injectable pharmaceutical products,
Indonesian manufacturing operations. our capacity and efficiency in managing following the successful completion of
production planning and orders, quality a rigorous qualification procedure.
Pharmaniaga’s Indonesian listed management, delivery and product
subsidiary, PT Millennium Pharmacon costing. We target to install this system Diversifying our business streams
International Tbk (MPI) recorded an at all our manufacturing sites in Malaysia has always been part of our strategic
increase in net sales during the year with by 2018. We also upgraded our IT long-term plan for the growth of our
MPI’s ethical products category. At the infrastructure to improve processes business. To this end and in support
same time, our manufacturing facility and enhance efficiencies in our logistics of the Government’s Corporate
in Indonesia led by PT Errita Pharma division. Entrepreneur Responsibility initiative to
(Errita) saw a turnaround in its results provide opportunities to entrepreneurs,
this year. As a Group whose business is to help in 2017 we embarked on a partnership
patients, it is critical that we adhere with Paradigm Industry Sdn Bhd.
With the completion of MPI’s rights issue, to strict quality and safety standards. This enabled us to venture into the
MPI was able to utilise the proceeds to Reflecting this commitment, we have manufacturing of Stevia-based products,
acquire a 15% equity interest in Errita. put in place numerous measures to a natural sweetener, as part of our
As a result, MPI leveraged on business ensure that the safety and quality of commitment to provide consumers with
synergies between our two investments our products are upheld throughout the beneficial products.
to venture into the upstream market. supply chain. This includes ensuring that
This has allowed us to penetrate the our transportation vehicles are equipped
Indonesian government and private with temperature control systems, and
hospital markets in line with the specifying stringent standards on our
implementation of the National Health vendors so that all deliveries meet the
Insurance Scheme. requirements of Good Distribution
Practice.
44
One of the key market differentiators for
Pharmaniaga is our position as a global
provider of Halal pharmaceuticals and
medical devices. To leverage on this
unique advantage, we have ramped
up our production of Halal certified
products, adding more than 60 new
products in 2017 alone, bringing the total
number of Halal products to over 90. NURTURING TALENT
With a view to strengthen Malaysia’s role Our Do It Right First Time (DIRFT) Forging ahead as part of a pharmaceutical
in the global pharmaceutical sector, in campaign has successfully educated sector that is changing at an exponential
collaboration with Jabatan Kemajuan our employees on the importance of speed and growing in its complexity, we
Islam Malaysia (JAKIM) and Department regulatory compliance and ensured recognise the necessity of cultivating a
of Standards Malaysia, we are assisting Company-wide adherence. A mindful highly skilled, passionate and motivated
in the development of the Malaysian compliance culture also helps talent pool.
Standard for Halal Medical Devices - advance our corporate culture while
General Requirements. This bodes well inculcating a sense of responsibility and With a workforce of more than 3,000
for Pharmaniaga as it has a direct impact proprietorship amongst our employees. people in both Malaysia and Indonesia,
on our medical device products which will we offer a safe working environment,
be certified Halal once the Standard is Through the DIRFT campaign, we competitive compensation and benefits
enforced, giving us yet another platform launched the Kenali Saya programme as well as ample opportunities for
to expand our Halal reach globally. to foster esprit de corps amongst learning and development. Attracting,
employees while improving the work motivating and retaining talented
COMPLIANCE CULTURE environment. Our objective is to make and high-performing individuals are a
Pharmaniaga an enjoyable place to work, priority for us.
As Malaysia’s leading pharmaceutical and various internal events including
company with a Passion for Patients, we social gatherings, outdoor activities, People are our most valuable asset,
are uncompromising when it comes to workshops, webinars, briefings as well and we constantly strive to create
complying with rules and regulations. as site audits, kept our team engaged. alignment and productive engagement
with our employees. We believe that
an engaged workforce directly impacts
an organisation’s bottom-line and this
belief is reflected in our comprehensive
employee engagement plan. Our
efforts gained national recognition
and we were honoured to receive
the Anugerah Majikan 1Malaysia and
Anugerah Majikan Berdaya Saing Glokal
in conjunction with the National Labour
Day celebration. In addition, we bagged
two AON Best Employer Awards,
namely Best Employer for Commitment
to High Performance Culture and Best
Employer for Commitment to Employer
Brand Award.
Managing
Director’s Review
PROMISING FUTURE
CLOSE TO
While tough market conditions are
expected to persist in the year ahead,
As a leading generics manufacturer,
research and development initiatives are 20%
there are vast opportunities in the an integral driver of growth. We remain expansion of
pharmaceutical sector, especially focused on driving product innovation
with the initiatives introduced by the as we strive to develop new, high quality
the APPL
Government in the 2018 National products that meet the needs of the product list
Budget. Given our market position, healthcare sector.
Pharmaniaga is well-poised to capitalise
on these prospects over the long term. Our newly signed collaboration
agreement for the supply of a new
We are encouraged by the price revision Hepatitis C treatment provides us Tapping on the rapidly growing
to our concession agreement with the with distribution rights for the region. Halal sector, we expect to receive
Ministry of Health, resulting in an almost Through this collaboration, Pharmaniaga Halal certification for more than 150
20% expansion of the product list. We will not only gain from the transfer of pharmaceutical products by the end
expect the revision to the Approved technology, but more importantly play of 2019.
Products Purchase List 2017-2019 in a key role in developing a Hepatitis
December 2017 to positively impact C treatment regime that is expected Further leveraging on the prospects
the Company’s growth in 2018. to cost less than US$1 per day. This of the Halal industry, we signed a
is Passion for Patients at its best: the Memorandum of Collaboration with
A total of RM75 million has been collaboration will provide immeasurable Technology Depository Agency under
allocated for capital expenditure benefit to Hepatitis C patients in the Ministry of Finance Malaysia and
in 2018, a testament to the Group’s Malaysia and the region, who will have Hilleman Laboratories, a Merck &
commitment to investing for our future. access to safe, effective, and affordable Co and Wellcome Trust Foundation
treatment. joint venture. As a result of this
partnership, we aim to develop and
manufacture Halal and cost-effective
vaccines that can be incorporated
into Malaysia’s National Immunisation
Programmes.
These strategic partnerships with

global pharmaceutical leaders not
only allow us to grow by leaps and
bounds, it facilitates the improvement
of Malaysia’s healthcare services for
the benefit of all.
46
As we develop our operations, we are mindful of the need to expand our infrastructure to match our
future needs. In line with this, we are constantly on the lookout to expand storage capacity at our
warehouses.
In the following pages, we have elaborated on the key highlights of our business during the year. The
measures undertaken are a clear demonstration of our plans for the future and our positive outlook
on improving our earnings potential.
Embarking on a new fiscal year, we are focused on our ongoing quest to strengthen business
sustainability and improve operational efficiencies while unlocking strategic prospects domestically,
regionally and globally in line with our commitment to deliver shareholder value.
I would like to express my appreciation to the Board of Directors for providing strong support and
guidance throughout the year. On the same note, our dedicated management team and employees
have been key contributors to the growth of the Group. Our sincere gratitude also goes to our
customers, suppliers, business partners, shareholders and relevant approving authorities for their
continued support.

Managing Director
Operations
Review
MANUFACTURING
48
KEY DEVELOPMENTS
RM4 MILLION
COST SAVINGS
EIGHT
NEW PRODUCTS
REGISTERED
INSTALLED AND
COMMISSIONED
LYOPHILISATION FACILITY
AT PHARMANIAGA LIFESCIENCE SDN BHD
49
Operations Review:
Manufacturing
250
PRODUCTS
BY 2024
The Manufacturing Division is the custodian of our commitment Due to our latest technological advancement, we will be
to quality, ensuring our products meet or exceed local and adding more than five products including anti-ulcer, anti-
international standards set by regulators. bacterial, anti-fungal and analgesic products which will
enhance our current therapeutic range.
The year under review saw the Division undertake sustainable
profitability enhancing initiatives that had a positive impact on To add to this, we have submitted the dossiers of key products
cost optimisation across the board. As a result, the Division was to the National Pharmaceutical Regulatory Agency (NPRA)
able to record a profit before taxation of RM75 million amidst a and expect the commercialisation of these products to be
challenging operating environment. concluded in the year ahead.
OUR OPERATIONS According to recent findings by the National Health and

Morbidity Survey 2017, 3.5 million Malaysians suffer from
To consolidate our position as a leading Malaysian diabetes. In support of the fight against diabetes in Malaysia
pharmaceutical company, we are conscious of the need to and as part of our long-term plan to diversify our business
continuously improve our capabilities. We undertook the streams, we decided to enter the natural sweetener market
commissioning of three new machines during the year, enabling and provide Malaysians with an alternative to sugar.
us to improve our production output as well as reduce our
changeover time, resulting in significant cost and time savings. SweetRoyale Stevia is now part of our product range and is an
anchor product for our community pharmacy. We are currently
We achieved further cost savings through improved undertaking marketing and promotional activities including
procurement methods. As a direct result of strategic advertisements across various media platforms. SweetRoyale
negotiations with vendors, we were able to attain favourable Stevia is also easily available online through e-Commerce sites
cost savings in the region of RM4 million. including Lazada, www.royalepharma.com, Shopee and 11street.
Our efforts in operational efficiency and cost savings allowed We have marketed our bio-collagen wound care management
us to manufacture products of superior quality at competitive products locally through education sessions with doctors as
pricing, staying true to our motto of Passion for Patients. well as via exhibition booths at medical conferences.
The Manufacturing Division marked a significant milestone

for the Group, as our plant in Puchong became the first
pharmaceutical plant in the country to install and commission
freeze drying technology for the lyophilisation of small
volume injectable pharmaceutical products. We successfully
completed a rigorous qualification process, which saw us Please Scan
comply with stringent requirements for water distribution,
nitrogen and compressed air distribution lines as well as a
heating, ventilation and air conditioning (HVAC) system for
the lyophilisation clean room.
50
We value local traditional remedies and has applied this
expertise into developing phytomedicines with specific
health benefits. Potential herbs are screened, identified,
selected and only then developed into products. Our
collaboration with local and international partners to
develop our phytomedicines focuses on expert capabilities
to produce safe, high quality and efficacious products.
We have invested in the development of two products

utilising local herbs - Kacip Fatimah (KF) and Patawali in
line with our efforts to advance herbal biotechnology.
Our trademark and patent applications in Malaysia and the

United States of America for the branding of KF finished
products were successful. As part of the patent, our KF
extraction method has been trademarked as unique and
Given our expansion plans for the European Union market, capable of producing high quality extracts.
we undertook the implementation of the Enterprise
Quality Management Software and the SAP S/4HANA Moving forward, we aim to patent other aspects of the KF
(High Performance Analytic Appliance) Software across all project including the formulation of the finished product,
manufacturing sites in Malaysia to be completed by 2018. the manufacturing process, as well as other key steps.
We expect to fully equip all our manufacturing facilities
with state of the art software that will allow us to effectively Our patented KF extract has been tested pre-clinically in
manage confidential content as well as gain timely access an accredited OECD GLP certified research laboratory in
to data and analytics. Australia for safety, quality and efficacy. The pre-clinical
data demonstrates that our extract is of high quality and
RESEARCH AND DEVELOPMENT conforms to international regulatory standards.
Our focus on technological innovation sets us apart in Moving forward, we aim to develop the formulation,
the ever-competitive pharmaceutical industry. Continuous manufacture the KF finished product and proceed into
investment in research and development (R&D) enables us clinical trials. We look forward to establishing the KF
to provide quality affordable solutions to some of the most finished product as a safe, high quality and effective
pressing medical issues in Malaysia and the region. We further phytomedicine that improves the health and vitality of
strengthened our product development line-up by more than women.
eight new products approved by the NPRA.
The Group is on track to develop in excess of 250 products

by 2024 including new therapeutic categories.
As part of our commitment to ensuring the quality, safety

and efficacy of all our products, we undertake bioequivalence
studies for all our generic products. These studies work
to ensure that our generic products are bio-equivalent to
the innovator products and are clinically interchangeable.
Testament to our strong adherence to quality, there are more
than 65 Pharmaniaga products that meet the required bio-
equivalent status with several more in progress across all sites.
This adherence to quality standards is augmented by stringent

clinical investigations, clinical reviews on product quality and
pharmacovigilance initiatives. We are currently updating
our pharmacovigilance system to be aligned with the latest
Malaysian Pharmacovigilance Guidelines.
Kacip Fatimah Plantlets
52
LOGISTICS &
Review
Operations
DISTRIBUTION
KEY DEVELOPMENTS
96% GOOD AND
EXCELLENT RATING
FROM DIALOGUE RESPONDENTS
CLOSE TO 20%
NEW PRODUCTS FOR APPL 2017-2019
10
NEW PRODUCTS REGISTERED
53
Operations Review:
Logistics & Distribution
Responsible for the seamless delivery of pharmaceutical We understand the need for quick responses to queries about our
products to customers, the Logistics and Distribution Division healthcare services. Our Customer Care Call Centre recorded a
continues to grow the concession and private sector business 93% success rate for incoming calls answered within three rings.
of the Group.
At the same time, it is important for us to continuously improve
The satisfaction of our customers, in particular the Ministry of our performance and this begins by seeking customer feedback.
Health (MOH), is paramount to our success. Our operations We carried out Customer Satisfaction Survey on a six-monthly
embody our motto of Passion for Patients, as we once basis for MOH and testament to our efforts to improve service
again sustained the exceptional service levels that have levels, 95% of respondents rated us as ‘Excellent’ and ‘Good’ in
become the trademark of our company. We achieved 99% the second survey, compared with 94% in the first survey. We
order fulfilment for MOH health facilities across the nation also conducted six surveys for the Ministry of Higher Education
and successfully reduced delivery time, with 95% of orders Malaysia (MOHE) which includes Hospital Universiti Sains Malaysia,
delivered within a shorter time frame. Additionally, our Pusat Perubatan Universiti Malaysia and Pusat Perubatan Universiti
2017-2019 Approved Product Purchase List (APPL), which Kebangsaan Malaysia, where the overall respondents rated our
commenced in December, features almost 20% new products. services as ‘Good’.
Through dialogue sessions with the various State Health

Departments, we were able to gauge their appraisal of our
service levels. We are pleased to note that 96% of respondents
rated us as ‘Excellent’ and ‘Good’.
54
ŗŲ ŲęĐĐđĝĒĐđĕ
In line with our focus on efficiency optimisation and cost savings, our stock
availability was sustained at an optimum level at all our Distribution Centres. ŗŲ ŲđĔĐĐđĝĒĐđĕ
upgraded during
We take pride in our drive to provide the best for our customers. During the year, the year
we embarked on numerous measures to maintain the quality of our products
throughout the supply chain.
We are also conscious that this effort must be reflected in the service delivery of
our vendors who are integral to our success. We impose stringent standards on
our vendors to ensure all deliveries meet the requirements of Good Distribution
Practice (GDP). As a demonstration of our commitment to GDP requirements,
we have installed temperature control systems on all our transportation vehicles.
We continued our endeavour to obtain Halal certification for our storage facilities
and transportation methods.
Our ISO certification was also upgraded during the year. Pharmaniaga was audited
and accredited ISO 9001:2015 and ISO 14001:2015 certifications, demonstrating
our strict compliance with these international standards.
The latest revisions to ISO 9001:2015 and ISO 14001:2015 adopt a more active
approach to risk management, which assists companies to better understand
risks and opportunities.
Operations Review:
Logistics & Distribution
Building on the confidence placed in us by our biggest client, of prescription volume with a sizeable total generic market
the Government of Malaysia, we were able to expand our share of 50% and 55% respectively. In 2017, more than 10
market reach to the MOHE, the Ministry of Home Affairs and new products have been registered.
Institut Jantung Negara through the distribution of products
as part of the APPL. In the near future, we will be adding more products from
key therapeutic areas such as anti-infectives, cardiovascular,
As the nation’s market leader in generic pharmaceuticals, analgesics and diabetes in addition to our hospital specific
the Group benefited from the growth of the local generic injectable range. Our new offerings are projected to further
pharmaceutical segment, which recorded a five-year increase our overall revenue growth and boost our presence
compounded annual growth rate of close to 2%. in the market.
Our strategy to dominate the pharmaceutical generic segment Our collaboration with leading global manufacturers allows
through robust pricing bore fruit when our homegrown us to introduce new high-quality products into the local
brands such as Aspira and Iqnyde under the therapeutic market for both public and private segments. In addition,
portfolios of respiratory and urology, led the market in terms our participation in key initiatives has strengthened our
reputation as one of the key players in the medical device
industry in Malaysia.
56
Fuelled by an established central procurement hub, our community pharmacy segment recorded sustained growth with
more than 130 bumiputera independent pharmacies throughout Malaysia under its alliance network. These member
pharmacies are able to offer customers attractive choices, as they now stock more than 300 different products from 200
products previously.
In line with this programme, we provide value-added services to our members by offering exclusive Pharmaniaga Purchase
EzyPay cards, which we structured via a reputable financial institution. This allows them to enjoy interest-free instalments
for purchases.
58
INDONESIA
Review
Operations
OPERATIONS
KEY DEVELOPMENTS
32%
CONTRIBUTION
TO THE GROUP’S REVENUE
10
NEW PRODUCTS REGISTERED
NEW BRANCH IN
MANADO, NORTH SULAWESI
59
Operations Review:
Indonesia Division
15%
SALES GROWTH
Pharmaniaga has grown from strength to strength YEAR ON YEAR
on the global stage, as we continue our journey
to becoming a major player in the international
pharmaceutical market. Our Indonesian operations
were a strong contributor to the Group’s results,
delivering 32% of the Group’s revenue. MPI’s ethical products category remains the main
contributor to total sales while sales of over-the-
LOGISTICS counter medications and medical consumable
products continue to be promising. We expanded
Our Indonesian listed subsidiary PT Millennium our reach to major cities across Indonesia with
Pharmacon International Tbk (MPI), recorded an the opening of our new branch in Manado, North
increase in net sales to RM690 million. The 15% Sulawesi.
growth was mainly due to the sales of medical
disposable products via the Indonesian Universal With MPI’s acquisition of 15% equity interest in PT
Health Coverage programme. Errita Pharma (Errita) during the year, MPI is now able
to access high quality affordable medicines to add
to its generic drugs portfolio. We look to leverage
on this advantage to make our mark in Indonesia.
Further fortifying MPI’s market position, we were

able to procure distribution rights from three new
principals during the year.
60
Our commitment to compliance saw eight MPI branches We introduced a new sales incentive programme in addition
attaining Good Distribution Practice (GDP) certification, bringing to appointing new distributors in key markets including
total certified branches to 20. As part of our compliance Kalimantan Barat, Kalimantan Timur, Maluku, Bali, Pekan
enhancement initiative, MPI is now ISO 9001:2015 certified. Baru and Batam. These efforts proved fruitful in improving
revenue contribution from branded generic products.
We also wanted to ensure that our expansion in Indonesia
included operational excellence from the very beginning. Expanding our product range is a major thrust in our strategy
We enhanced our service levels at our Indonesian operations to grow in the region. We executed this plan by launching
through information technology improvements such as more than eight new products at our Indonesian plant in 2017,
Qlik Sense (Dashboard), Colek Bayar (Mobile Collection with more than 20 new products submitted for registration.
Application) and web-based operational reports for principals,
and we aim to continuosly improve in the coming years. In 2018, we aim to invest further in upgrading production
capacity at our Indonesian plant. We will acquire machinery
MPI will explore prospects in the Indonesian market in line to improve automation of the blistering, strip packing
with our strategy to continuously grow in Indonesia. and packaging process, which is expected to enhance
manufacturing efficiencies.
MANUFACTURING
Keeping to our strategy of increasing our presence in
We have made steady progress to establish ourselves as a Indonesia, we also submitted registration for our bio-collagen
manufacturer of generic pharmaceuticals in the international wound care management.
arena. Errita marked a key milestone this year with a
turnaround in its results, a first since its acquisition in 2014. The Indonesian market is a key component in our strategy
This achievement is testament to the success of our strategic to grow internationally, and we are eager to further progress
long-term plan for our Indonesian operations as part of our our business in a country abound with opportunities for the
overall growth blueprint. pharmaceutical industry.
62
CORPORATE
VALUES
AT PHARMANIAGA,
WE HAVE TAKEN
OUR PASSION
FOR PATIENTS
TO NEW HEIGHTS
OF EXCELLENCE
AND RELIABILITY.
CREATING A
RESILIENT
BUSINESS AND
BUILDING A
BETTER WORLD
COME HAND IN
HAND. BOTH
ARE ESSENTIAL
FOR LONG-TERM
SUCCESS.
CORPORATE
VALUES
Contribution to Tabung Pahlawan
As part of Pharmaniaga philanthropy
initiatives, the Company has
contributed a total of RM100,000
for the Tabung Pahlawan 2017.
Pharmaniaga promotes healthy lifestyle activities Blood donation programme at manufacturing plants
Through Komuniti Sihat Perkasa Negara (KOSPEN In conjunction with Minggu Persekitaran, Keselamatan
PLUS) aspiration, Pharmaniaga conducted several dan Kesihatan, Pharmaniaga collaborated with Pusat
activities with the aim to promote healthy lifestyle for its Darah Negara to organise Blood Donation programme
employees. Amongst the activities were brisk walking, at several of its manufacturing plants.
basic health check, yoga, biggest loser challenge
programme and many others.
64
Iftar Pharmaniaga
Through Pharmaniaga’s Surau
Committee, the Group organised a
break-fast programme with selected
orphanages and Tahfiz schools within
Klang Valley.
Hero Ramadan
Pharmaniaga organised Hero
Ramadan by distributing break-fast
meals to the Trauma and Emergency
Unit staff of six hospitals around
Klang Valley as an appreciation
for their dedication having to work
during the break-fast period.
Bubur lambuk distribution Jom Bantu Asnaf

In conjunction with the holy month of Ramadan, Pharmaniaga contributed brand new and pre-loved
Pharmaniaga distributed bubur lambuk for break-fast clothes to Pertubuhan Kebajikan Baitul Hasan Kuala
to all of its employees. Lumpur.
CORPORATE
VALUES
Contribution to ATM for Aidilfitri

Pharmaniaga donated RM100,000
to the Angkatan Tentera Malaysia
for the supply of Raya cookies and
goodies for the servicemen who
would be on duty during the festive
season.
PharmaRaya (Raya Open House) Halal Bihalal Idulfitri Celebration At PT. Millenium
In conjunction with Hari Raya Aidilfitri, Pharmaniaga Pharmacon International Tbk, Jakarta
celebrated the joy of the festivity by organising Raya It was a simple but meaningful Halal Bihalal Idulfitri
Open House for its employees. celebration at T PT. Millenium Pharmacon International
Tbk, Jakarta. The employees feted themselves with
delicious meals specially prepared for the occasion.
Halal Bihalal Idulfitri Celebration At

PT Errita Pharma, Bandung
The celebration of the Halal Bihalal
Idulfitri at PT Errita Pharma was a
made special with the presence of
Pharmaniaga’s Managing Director,
Dato’ Farshila Emran. It was a joyous
event with delicious delicacies and
fun performances by the employees,
that further bonded the team spirit.
66
House refurbishment for a single mother Program Jalinan Kasih
In the light of celebrating the joy of Aidilfitri, volunteers In conjunction with Hari Raya celebration, Pharmaniaga
from Pharmaniaga visited Puan Saniah bt Bonjani, a less with Jabatan Kemajuan Orang Asli contributed food
fortunate single mother and refurbished her home in supplies for the community in Kampung Orang Asli
Batu Pahat, Johor. Sungai Gapoi, Bentong, Pahang.
Majlis Ibadah Qurban Pharmaniaga

Pharmaniaga celebrated Hari Raya Aidiladha with the orphans from various orphanages in Klang Valley. Pharmaniaga
employees contributed 12 cows for the event.
CORPORATE
VALUES
Contribution to Tahfiz Ittifaqiyah Dato’ Keramat Spiritual well-being

Pharmaniaga contributed a total of RM10,000 to the Pharmaniaga is mindful of the importance of spiritual
fire victims of Tahfiz Ittifaqiyah Dato’ Keramat, Kuala wellness. Major events such as Maal Hijrah were
Lumpur. Pharmaniaga employees also chipped in celebrated with inspiration talks by esteemed speakers
towards the fund. including Ustaz Don Daniyal Don Biyajid and many
more.
Examination and Motivational Seminar

Pharmaniaga organised examination
and motivational seminar for its
employees’ children. The programme
was aimed at providing the students
with study and examination tips.
68
Orange Run Road to World Pharmacist Day
A total of 153 runners from Pharmaniaga participated in the In conjunction with World Pharmacist Day, Pharmaniaga
11th Orange Run 2017 organised by BH Petrol. Pharmaniaga took the opportunity to mobilise its SOSN volunteers
also mobilised its Skuad Operasi Sihat Negaraku (SOSN) by providing free health check for the general public
team for a free basic health screening during the event. at the event.
Contribution of Van Jenazah

Pharmaniaga assisted the local
community by contributing Van
Jenazah to Surau Al-Mustaqimah,
Seksyen 7, Shah Alam.
Fire drill exercise

Pharmaniaga organised annual fire safety and
evacuation plans which outline staff duties
and responsibilities in time of emergency.
Fire drills serve as an opportunity for staff
members to demonstrate, under simulated
fire conditions, that they can perform
those duties and responsibilities safely and
efficiently.
Corporate Governance
Overview Statement
This Corporate Governance Overview Statement sets CORPORATE GOVERNANCE APPROACH
out the principal features of Pharmaniaga Berhad
(Pharmaniaga) and its subsidiaries’ (collectively referred to The Board of Directors (Board) of Pharmaniaga is committed
as the Group) corporate governance approach, summary of towards reinforcing its market position in the pharmaceutical
corporate governance practices during the year as well as sector, whilst remaining true to the Group’s well-established
key focus areas and future priorities in relation to corporate corporate governance philosophies which are ingrained
governance. The Corporate Governance Overview in the Group’s core values, namely, Respect, Integrity,
Statement is made pursuant to Paragraph 15.25(1) of the Teamwork and Excellence. The Board believes that a
Main Market Listing Requirements (MMLR)of Bursa Malaysia robust and dynamic corporate governance framework is
Securities Berhad (Bursa Malaysia) and guidance was drawn essential to form the bedrock of responsible and responsive
from Practice Note 9 of the MMLR and the Corporate decision making in the Group.
Governance Guide (3rd edition) issued by Bursa Malaysia.
The Group’s overall approach to corporate governance is
The Corporate Governance Overview Statement is to:
augmented with a Corporate Governance Report, based on
a prescribed format as enumerated in Paragraph 15.25(2) of • promote heightened accountability at the leadership
the MMLR so as to provide a detailed articulation on the level (Board and Senior Management);
application of the Group’s corporate governance practices • adopt the substance behind corporate governance
vis-à-vis the Malaysian Code on Corporate Governance enumerations and not merely in form;
(MCCG). The Corporate Governance Report is available on • conduct a thorough debate and rigorous enquiry process
the Group’s website, www.pharmaniaga.com as well as via before establishing corporate governance systems,
an announcement on the website of Bursa Malaysia. policies and procedures;
• identify opportunities to drive the synergistic
This Corporate Governance Overview Statement should implementation of corporate governance systems,
also be read in tandem with the other statements in the policies and procedures for improved strategic and
Annual Report, namely Statement on Risk Management and operational decision making; and
Internal Control, Audit Committee Report and Sustainability • find a fine balance in meeting the expectations of the
Report. different groups of stakeholders of the Group.
70
Given that the Board forms the pivot of good corporate Pharmaniaga has applied all the Practices encapsulated
governance, the Board steers efforts to promote meaningful in MCCG for the financial year ended 31 December 2017
and thoughtful application of good corporate governance except:
practices. The Group regularly reviews its corporate
governance arrangements and practices to ascertain if • Practice 4.5 Policy on gender diversity;
they reflect prevailing norms, market dynamics, emerging • Practice 6.1 Remuneration Policy for Directors and
trends, developments in the regulatory tapestry and Senior Management; and
evolving stakeholder expectations. Such efforts turned out • Practice 7.2 Disclosure of the top five Senior
to be quintessential in the year 2017 given that regulatory Management personnel’s remuneration
authorities introduced a slew of reform measures including on a named basis in bands of RM50,000
the operationalisation of Companies Act 2016, incarnation
of the new MCCG by Securities Commission Malaysia and In line with the latitude accorded in the application
amendments to the MMLR. mechanism of MCCG, the Company has provided
forthcoming and appreciable explanations for the
Against the backdrop of the aforementioned regulatory departures from the said practices. The explanations on
developments, the Group undertook a recalibration of its the departures are supplemented with a description on
corporate governance framework and meted out measures the alternative measures that seek to achieve the Intended
to adhere to these enumerations in substance. Premised Outcome of the departed Practices, measures that the
on the notion that improving corporate governance is Company has taken or intends to take to adopt the
aspirational in nature and ultimate in abstraction, the Group departed Practices as well as the timeframe for adoption of
will continue to enhance its daily business activities to ensure the departed Practices. Further details on the application
that they are guided by the hallmarks of accountability, of each individual Practice of MCCG are available in the
objectivity and transparency. Corporate Governance Report.
SUMMARY OF CORPORATE GOVERNANCE PRACTICES A summary of the Group’s corporate governance practices
with reference to MCCG is described below.
In manifesting the Group’s commitment towards sound
corporate governance, the Group has benchmarked its BOARD’S ROLES AND RESPONSIBILITIES
practices against the relevant promulgations as well as
other best practices. The Board is responsible for the corporate governance
practices of the Group. Being at the helm of the Group,
the Board governs the affairs of the Group on behalf of the
shareholders and retains full and effective control over the
Group.
Overview Statement
Board
Responsible for providing stewardship and oversight of the Group’s business affairs
Audit Committee Nomination Committee Remuneration Committee Sustainability Committee

(AC) (NC) (RC) (SC)
Review of financial Review candidatures for Review and oversee Monitor

reporting, internal Board appointment and administration of implementation of
controls, related party re-appointment as well remuneration policies sustainability-related
transactions and as annual assessment and procedures of policies, measures and
conflict of interest, of the Board, Board Directors and Senior actions in achieving
internal audit as well Committees and Management Group’s sustainability
as external audit Directors milestones and goals
processes
Managing Director (MD)

Responsible for the overall business and implementation of Board policies, decisions and power within delegated
limits for all matters except those reserved for the Board or delegated to Board Committee
Risk Management Workgroup Committee

(RMWC)
Head of Internal Audit
As depicted in the illustration above, Board Committees have been established to assist the Board in its oversight function
with reference to specific responsibility areas. It should however be noted that at all times, the Board retains collective
oversight over the Board Committees. These Board Committees have been constituted with clear terms of reference and
they are actively engaged to ensure that the Group is in adherence with good corporate governance.
The Board has formalised a Board Charter which sets out the ethos of the Group, structure and authority of the Board. The
Board Charter is the primary document that elucidates on the governance of the Board, Board Committees and individual
Directors. The Board Charter was recently reviewed on 27 February 2018 and is made available on Pharmaniaga’s website.
72
The Directors allocate sufficient time to discharge their responsibilities effectively and attend Board and Board Committee
meetings with sufficient regularity to deliberate on matters under their purview. Board meetings are held at quarterly intervals
with additional meetings convened for particular matters, when necessary. During the year, the Board has deliberated on
business strategies and critical issues concerning Pharmaniaga Group, including business plan, annual budget, significant
acquisitions and disposals, financial results as well as key performance indicators. The attendance of individual Directors at
Board and Board Committees meetings during the financial year ended 31 December 2017 is outlined below:
Directors Board AC NC RC SC
Managing Director
Dato’ Farshila Emran 4/4
Non-Independent Non-Executive Directors
Tan Sri Dato’ Seri Lodin Wok Kamaruddin 4/4 1/1 2/2
Daniel Ebinesan 4/4 4/4 2/2
Mohd Suffian Haji Haron 4/4 4/4 1/1 2/2 2/2
Independent Non-Executive Directors
Izzat Othman 4/4 4/4 1/1 2/2
Liutenant General Dato’ Seri Panglima

4/4 4/4 2/2
Dr. Sulaiman Abdullah (Retired)
Board/Board Committee Chairman Member
Overview Statement
There is clear delineation of roles of the Board and As Integrity is a core value of the Group, the Board is
Management. The MD is the conduit between the Board cognisant of its responsibility to set the ethical tone for the
and the Management in driving the success of the Group’s Group. A Code of Conduct and the Whistleblowing Policy
governance and management function. have been put in place to foster an ethical culture and allow
legitimate ethical concerns to be escalated in confidence
In performing their duties, all Directors have access to advice without risk of reprisal. The Code of Conduct and the
and services of a suitably qualified Company Secretary. Whistleblowing Policy are reviewed periodically by the
The Company Secretary acts as a corporate governance Board. The Code of Conduct is published on Pharmaniaga’s
counsel and ensures good information flow within the website.
Board, Board Committees and Senior Management. The
Company Secretary attends all meetings of the Board BOARD COMPOSITION
and Board Committees and advises the Directors on the
requirements encapsulated in the Company’s Constitution The Board of the Company comprises six members, three
and legislative promulgations such as the Companies Act of which are Independent Non-Executive Directors. The
2016, Capital Markets and Services Act 2007 (Amendment Company is headed by a female Managing Director.
2012) and the MMLR. Management provides Directors
with complete, adequate and timely information prior to The composition of the Independent Directors on the
meetings and on an ongoing basis to enable them to make Board is in excess of the MMLR one third. The Board
informed decisions. strives to ensure that it has an appropriate mix of skills,
qualifications and experience to discharge its roles and
responsibilities effectively based on the Group’s nature of
business. The Board, from time to time undertakes a review
of its composition to determine areas of strengths and
improvement opportunities.
BOARD COMPOSITION
34% 33%
33% 50%
INDEPENDENT
NON-EXECUTIVE
33%
17%
AGE
COMPOSITION
DIRECTORS
17%
33%
Managing Director

50-59 60-69 70-79
74
The Board reviews its performance, and that of Board
BOARD SKILLS Committees and individual Directors on annual
& EXPERIENCES basis based on a set of predetermined criteria in a
Legal process that is facilitated by the NC. For the year
under review, the NC’s key activity was to assess the
Pharmaniaga Military overall Board and Board Committees’ performances
Accounting
Group’s and effectiveness as a whole. The NC was satisfied
Core Businesses that the Board and Board Committees’ composition
had fulfilled the criteria required, possess a right
Manufacturing Tax
blend of knowledge, experiences and mix of skills.
Corporate
Governance
In addition, the NC also recommended for the Board

to endorse the re-election of the relevant Directors at
the forthcoming AGM.
Pharmaceutical Commerce In reviewing the independence of Independent

Directors, the NC and Board adopt a qualitative
approach in assessing if Independent Directors
Finance & Economic
Business
Administration possess the intellectual honesty and moral courage
to advocate professional views without fear or favour.
The Board is cognisant of the rebuttable presumption
that extended tenure leads to entrenchment and as
such, the Board remains watchful for such indicators
Appointments to the Board are made via a formal, rigorous of entrenchment amongst long serving Independent
and transparent process, premised on meritocracy and Directors.
taking into account objective criteria such as qualifications,
skills, experiences, professionalism, integrity and diversity REMUNERATION
needed on the Board in the context of the Group’s strategic
direction. In the case of Independent Directors, the NC Pharmaniaga aims to set remuneration at levels
assesses the candidate’s ability to bring the element of which are sufficient to attract and retain high calibre
detached impartiality and objective judgment to the Directors and Senior Management needed to run
boardroom deliberations. the business successfully, taking into consideration
all relevant factors including the function, workload
The Board, with the assistance of the NC, regularly assesses and responsibilities involved.
the skills, experiences, independence and diversity required
collectively for the Board to effectively fulfill its roles. The As for oversight on remuneration matters, the
Board was satisfied that there was mutual respect amongst Board has established a specialised Committee,
Directors which contributed to a democratic environment namely RC which comprises a majority of Non-
so as to constructively deliberate and undertake a robust Executive Directors. The RC implements policies and
decision-making process. procedures on remuneration including reviewing and
recommending matters relating to the remuneration
of the Board and Senior Management.
Overview Statement
A review on the quantum and composition of Executive Director and Senior Management’s remuneration is undertaken
once every three years, and once in every four years for Non-Executive Directors.
The details for the remuneration of Directors for the financial year ended 31 December 2017 for the Group are as follows:
Fees
Benefit Meeting Total
Directors Company Group Salaries Bonuses EPF
in Kind Allowances Group
RM RM RM RM RM RM RM RM
Managing Director
Dato’ Farshila Emran - 30,000 945,000 652,500 248,625 37,200 1,000 1,914,325
Non-Executive Directors
Tan Sri Dato’ Seri Lodin Wok 135,000 135,000 - - - - 5,000 140,000
Kamaruddin (Chairman)
Mohd Suffian Hj Haron 115,000 115,000 - - - - 9,000 124,000
(Senior Independent)
Daniel Ebinesan 90,000 90,000 - - - - 6,750 96,750
Izzat Othman 102,000 216,000 - - - - 21,250 237,250
Lieutenant General Dato’ Seri 90,000 90,000 - - - - 6,500 96,500
Panglima Dr Sulaiman Abdullah
(Retired)
Total 532,000 676,000 945,000 652,500 248,625 37,200 49,500 2,608,825
AUDIT COMMITTEE access to both the internal and external auditors who, in
turn, have access at all times to the Chairman of the AC.
The AC is relied upon by the Board to, amongst others, The role of the AC and the number of meetings held during
provide advice in the areas of financial reporting, external the financial year as well as the attendance record of each
audit, internal control environment and internal audit member are set out in the AC Report of the Annual Report.
process, review of related party transactions as well as
conflict of interest situations. The AC also undertakes to RISK MANAGEMENT AND INTERNAL CONTROL
provide oversight on the risk management framework of FRAMEWORK
the Group.
The Board is cognisant that a robust risk management and
The AC is chaired by an Independent Director who is distinct internal control framework helps the Group to achieve
from the Chairman of the Board. All members of the AC are its value-creation targets by providing risk information to
financially literate. One of the AC members is a member enable better formulation of the Group’s strategies and
of the Malaysian Institute of Accountants. The AC has full decision making. The Group has established policies and
76
framework for the oversight and management of material The Group’s investor relations activities are aimed at
business risks and has adopted a formal Risk Management developing and maintaining a positive relationship with all
Policy. The Group, through the RMWC (a Management- the stakeholders through active two-way communication.
level Committee), maintains detailed risk registers which are Stakeholders can also direct their queries to:
reviewed and updated on quarterly basis. Key focus areas
a. Chief Financial Officer, Norai’ni Mohamed Ali
of risks are reported and deliberated at the AC meetings.
Tel : +603-3342 9999
E-mail: noraini.aliani@pharmaniaga.com; or
The internal audit function is carried out by an in-house
Group Internal Audit (GIA) from Boustead Holdings Berhad b. Company Secretary, Tasneem Mohd Dahalan
(the immediate Holding Company of Pharmaniaga). The Tel : +603-2141 9044
GIA’s function reports directly to the AC, and is independent E-mail: tasneem.gsec@boustead.com.my
of the activities it audits. GIA’s authority, scope and
responsibilities are governed by an Internal Audit Charter
which is approved by the AC.
NOTICE OF AGM
Further information on the Group’s risk management Date : 11 April 2018
and internal control framework is made available on the Venue: Royale Chulan Damansara, Petaling Jaya
Statement of Risk Management and Internal Control of the
Annual Report. • 28 days notice
April
• Ample parking space
COMMUNICATION WITH STAKEHOLDERS 11
2018
• Walking distance from Mutiara
Damansara Mass Rapid Transit
The Group is fully committed to maintain a high standard (MRT) Station
for the dissemination of relevant and material information
on the development of the Group. The Group also
places strong emphasis on the importance of timely and CONDUCT OF GENERAL MEETINGS
equitable dissemination of information to stakeholders.
Key stakeholder communication modes include Annual The Group is of the view that General Meetings are
Report, unaudited quarterly results, analyst briefings, important platforms to engage with its shareholders as
announcement to Bursa Malaysia, Sustainability Report, well as to address their concerns. During the immediate
corporate website and investor relation activities. preceding five years, all Directors were present at the
Annual General Meetings (AGM) to answer questions raised
by shareholders. The Chairman, MD and Chairmen of Board
Committees will provide written answers to any significant
question that cannot be readily answered. The Group
encourage shareholders to attend and participate in the
AGM by providing adequate advance notice and holding
the AGM at a readily accessible location. The location
of the AGM is customarily nestled in Klang Valley, which
is generally reflective of the shareholders’ geographical
dispersion.
Overview Statement
FOCUS AREAS ON CORPORATE GOVERNANCE Review of Board Charter and Board Committees’ Terms of
Reference
Corporate governance was clearly imperative for the Group
in the year 2017 against the backdrop of regulatory changes The Board undertook to review and update its Board
in the domestic corporate governance realm and a relatively Charter alongside the Terms of Reference for each of the
challenging economic environment that is characterised by Board Committees. Changes were made to reflect the
volatile market conditions and commodity prices. revised regulatory expectations as well as the expectations
of stakeholders for Directors to exercise greater vigilance
Against the aforementioned setting, during the year under and scepticism in understanding and shaping the direction
review, the Board directed its focus on the core duties of of the Group. These authoritative documents serve to
the Board which is grounded on the creation of long-term guide the governance and conduct of the Board and Board
value for stakeholders. Committees.
Corporate governance areas which gained heightened Professional Development of Directors

attention from the Board during the financial year ended 31
December 2017 are as follows: During the year under review, Directors were accorded
with a host of opportunities to develop and maintain their
Independence of the Board skills and knowledge. Directors attended various training
programmes to keep themselves abreast of changes in
It is recognised that having objectivity in the boardroom legislative promulgations and industry practices. The Board,
extends beyond quantitative measures such as number through the Nomination Committee was satisfied with the
of independent directors and their respective tenures. type of programmes attended by each Director during the
In order to harness the collective wisdom from greater year to enhance their knowledge and performance.
participation of Independent Directors, they have access to
key gatekeepers of the Group such as external and internal
auditors to discuss or share concerns about the Group and
exchange views on potential improvements in governance.
78
The list of training programmes that were attended by the Board members are outlined below:
Name Programme Title and Organiser Date
Managing Director
Dato’ Farshila Emran Key Changes and Directors’ Duties and 13 April 2017
Responsibilities’ under Companies Act 2016
Organised by MAICSA
Tan Sri Dato’ Seri Lodin Wok Kamaruddin Seminar Pelabur Global 2017 18 February 2017
Organised by Vega Hermosa International
Sdn Bhd
Breakfast Talk with Asian Corporate 7 March 2017

Governance Association (“ACGA”):
Corporate Governance (“CG”) Watch 2016
– Ecosystems Matter
Organised by ICLIF-MINDA
Performance Management System 25 April 2017

Training for Estates & Mills Management
Organised by Boustead Estates Agency
Sdn Bhd
FIDE Forum 1st Distinguished Board 4 May 2017

Leadership Series – “Efficient Inefficiency:
Making Boards Effective in a Changing
World”Organised by FIDE Forum
FIDE Forum Invitation – 2nd Distribution 8 June 2017

Board Leadership Series “Risk and Reward:
What Must Board Know About A Sustainable
Financial Institution Remuneration System for
Senior Management and Material Risk Takers”
Organised by FIDE Forum
Presentation on Companies Act 2016 by 17 July 2017

Messrs. Azmi & Associates
Organised by Affin Hwang Investment
Bank Berhad
Overview Statement
Tan Sri Dato’ Seri Lodin Wok Kamaruddin Global Banking Conference – China’s 1 – 2 August 2017
Banking Industry: Opportunities
for Growth Organised by Asian Institute
of Chartered Bankers (AICB)
Half-Day Talk on Companies Act 2016 and 5 October 2017

Malaysian Code on Corporate Governance
Organised by Boardroom Corporate
Services (KL) Sdn Bhd
Affin Hwang Capital Conference Series 5 October 2017

2017 – Opportunities Amidst Geo-Political
Shifts Organised by Affin Hwang Investment
Bank Berhad
Daniel Ebinesan Half Day Talk on:

i. Code of Corporate Governance 2016; and 14 September 2017
ii. The Companies Act 2016
Bursa Fraud Risk Management Workshop 26 September 2017
Khazanah Megatrends Forum 2017 2 October 2017
MFRS Training by Ernst & Young (EY) 4 October 2017
Half-Day Talk on Companies Act 2016 and 5 October 2017

Malaysian Code on Corporate Governance
Organised by Boardroom Corporate Services
(KL) Sdn Bhd
Mohd Suffian Hj Haron Sustainability Engagement Series for 13 March 2017

Directors/Chief Executive Officers 2017
Half Day Talk on:

i. Code of Corporate Governance 2016; and 14 September 2017
ii. The Companies Act 2016
CG Breakfast Series: Integrating an Innovation 7 November 2017

Mindset with Effective Governance
Name Half Day Talk on:

i. The Implications of MFRS 9 on the business 28 November 2017
strategy; and
ii. Cybersecurity Risk Implications
80
Izzat Othman 2017 Audit Committee Institute Breakfast 28 April 2017

Roundtable
CG Breakfast Series with Directors: 17 July 2017

“Board Excellence – How to Engage and
Enthuse Beyond Compliance with
Sustainability”
Lieutenant General Dato’ Seri Panglima National Seminar on The Malaysian Code 19 April 2017
Dr Sulaiman Abdullah (Retired) on Corporate Government (New) –
An Overview
A Seminar on Implementing a 26 July 2017

Risk Management & Internal Control
Framework Based on The Malaysian Code
of Corporate Governance 2017
CG Breakfast Series for Directors: 13 October 2017

“Leading in a Volatile, Uncertain,
Complex, Ambiguous (VUCA) World.
Seminar on Interpreting, Analysing and 25 October 2017

Probing Financial Statements 2017
CDOP: Updates on Companies Act 2016 26 October 2017

and Its Implications to Directors & the
New Malaysian Code on Corporate
Governance
CDOP: Updates on the roles and 21 – 22 November

responsibilities of Company Directors 2017
Overview Statement
CORPORATE GOVERNANCE PRIORITIES (2018 AND BEYOND)
The Board recognises that there are always opportunities for improvement in its corporate governance activities in order
for the Group to continue to engender trust and confidence amongst stakeholders. The Board has identified the following
set pieces on its horizon that will help it to achieve its corporate governance objectives.
BOARDROOM DIVERSITY
YEAR The Board recognises the importance of diversity in averting “groupthink”
2019 and “blindspots” in the deliberation and decision making process.

Recognising gender as a key facet of the various diversity dimensions, the
Board endeavours to establish and formalise a diversity policy, set targets,
measures and annually assess both the targets and the progress in achieving
them.
The Board is already committed to developing a corporate culture that also

embraces the aspect of gender diversity. This is reflected by the present
2021 composition of Senior Management of the Group, more than 60% of which
are women.
SUSTAINABILITY REPORTING
Pharmaniaga aims to leverage on its existing qualitative sustainability indices and adopt a more mature form
of sustainability reporting. The Board will set the direction for management to establish necessary systems and
controls with the presence of quality non-financial data that will support the development of such forms of reporting.
Pharmaniaga will also actively engage stakeholders to formalise a better understanding of what is expected and
desired from its sustainability reporting.
82
Statement on Risk Management
and Internal Control
RESPONSIBILITY A formal Management Control Policy (MCP) spells out
the internal control responsibilities of the managers, at all
THE BOARD OF DIRECTORS levels of the organisation to ensure that they are at all times
fully aware of their internal control’s responsibilities. The
The Board of Directors (the Board) is responsible for the MCP also clarifies the responsibilities of the Internal Audit
review of the adequacy and effectiveness of the Pharmaniaga function and the Audit Committee to complement the
Group’s (the Group) risk management framework and Terms of Reference of the Audit Committee, the Internal
internal control systems. Audit Charter and this Statement on Risk Management and
Internal Control.
The Board is of the view that the risk management
framework and internal control systems are designed to KEY ELEMENTS OF RISK MANAGEMENT FRAMEWORK
manage the Group’s key areas of risk within an acceptable
risk profile, rather than to totally eliminate the risk of Risk management is firmly embedded in the Group’s
failure, to achieve the policies, business goals and strategic management system and is every employee’s responsibility
objectives of the Group. The framework and systems can as the Group strongly believes that risk management is
therefore only provide reasonable, rather than absolute critical for the Group’s continued profitability and the
assurance of effectiveness against material misstatement of enhancement of shareholder value.
financial information and records or against financial losses
or frauds. The management, through the RMWC, is entrusted with the
responsibility of implementing and maintaining the Group’s
The Board has established an ongoing process for Risk Management Framework. The RMWC is headed by the
identifying, evaluating and managing the significant risks Managing Director and assisted by the Division Directors to
faced by the Group and this process includes updating the drive the Risk Management of the Group. The Group’s Risk
internal control systems when there are changes in business Management Framework has the following key attributes:
environment or amendments in regulatory guidelines. The
process is regularly reviewed by the Board via the Audit • Risk Governance and Strategy
Committee and accords with the guidelines for directors on
internal control, the Statement on Risk Management and The risk governance and strategy are established
Internal Control: Guidelines for Directors of Public Listed within the Group in three levels:
Issuers.
i. Day-to-day risk management residing at the
THE MANAGEMENT business units and divisions through practical
controlling processes that require and encourage
The management, within the Risk Management Framework is the management and employees to carry out
responsible for implementing the process of identifying and their duties in an ethically compliant manner.
assessing the risks faced by the Group, and then designing, ii. As outlined in the MCP, the Division Directors are
implementing and monitoring suitable internal controls to entrusted to:
mitigate and control these risks. The Board, through the
Audit Committee ensures that the management undertakes • Evaluate the risk exposures which relate to
such actions as may be necessary in the implementation of their particular spheres of operations;
the policies and procedures on risk and control approved
by the Board.
• Coordinate the development of appropriate Consistent with the Group’s commitment to manage
risk mitigation action plans; risk in a proactive and effective manner, all project
investment papers outline the risks involved with
• Update the Business Continuity Plan for key ratings on the probability and impact to the Group.
business risks; The papers also propose steps or factors to mitigate
the identified risks.
• Monitor the results of key performance
indicators; and • Risk Reporting
• Ensure good corporate governance. The Group’s Risk Management Framework provides
for regular review and reporting. For the financial
iii. The Audit Committee via the Internal Audit year 2017, the RMWC met twice, on 12 May 2017
function is responsible for monitoring the and 10 November 2017. At the meetings, the
responsibilities of the management and RMWC assessed the overall risk profile and appetite
reporting to the Board matters deemed critical of the Group, identified the significant risks, updated
to the organisation’s risk management activities the Risk Register and prepared the action plans for
including the implementation of the appropriate mitigation. Risk assessment reports comprising the
systems to manage risks at an appropriate level. Action Plans on Significant Risk and Risk Register
were tabled to the Board on 16 May 2017 and 15
• Risk Analysis and Measurement November 2017. In addition, the reports were
submitted to the Group Internal Auditors for an
In line with the Group’s focus on expanding its business independent assessment on the adequacy and
activities, the RMWC had undertaken a more detailed reliability of the risk management processes within
approach towards assessing risks relating to doing the Group.
business locally and internationally. The Group’s Risk
Register has been established and updated regularly The Group will continue to focus on the key risks and
to align the risk appetites of the Group to the business corresponding controls to ensure that they are able
plan and to fit them into the Risk Management to respond effectively to the changing business and
Framework. The Risk Register analyses the different competitive environment to enhance shareholder
risk exposures and appetites across different divisions value. Where necessary and feasible, additional
within the Group and examines the root cause and controls will be promulgated for implementation.
potential consequences of the identified risks to
the operations of the divisions. The Risk Register
also documents the ratings of risks to facilitate the
development of the appropriate and optimal action
plans by the management. Action plans to mitigate
and manage risks will be included in the register
to ensure clear commitments and responsibilities
are agreed at all levels in the organisation. During
the year, the Risk Register was reviewed in the Risk
Management meetings, and RMWC concluded that
the Group’s Risk Management provides reasonable
control to mitigate the exposure to significant risks.
84
KEY ELEMENTS OF INTERNAL CONTROL FRAMEWORK Areas of improvements have been identified as a result of
the review, improvement measures are recommended to
Audit Committee strengthen controls and follow up audits are conducted by
the GIA to assess the status of implementation thereof by
The Audit Committee is responsible for overseeing, the management.
monitoring and evaluating the duties and responsibilities
of the Internal and External Auditors as those duties and CONTROL SYSTEMS AND PRACTICES
responsibilities relate to the organisation’s processes for
controlling its operations. The internal control system of the Group is supported
by the control systems and practices which provide the
The Audit Committee is also responsible for determining discipline and structure, to sustain organisational support
that all major issues reported by the Internal Auditors, the of the management and employees. The control systems
External Auditors and other outside advisors have been and practices that encompass organisation structure,
satisfactorily resolved by the management. Finally, the governance activities and practices include:
Audit Committee is responsible for assisting and reporting
to the Board, matters which are deemed critical to the • Operating structure with clearly defined lines of
organisation’s controlling processes and risk management responsibility and delegated authority
activities including the implementation of the appropriate
systems to manage risks. The Board, through the Audit An organisation structure with clearly defined lines of
Committee maintains risk oversight for the Group. responsibility, limits of authority and accountability is
aligned to business and operation requirements in
Group Internal Audit order to support the maintenance of a strong control
environment. The Group has seven divisions with
The Group Internal Auditors from Boustead Holdings each division been given clear responsibilities in
Berhad’s principal responsibility is to provide independent, terms of achieving the Group’s objectives. Notably,
objective assurance and consulting activity designed the following divisions or units strengthen the Group’s
to add value and improve an organisation’s operations. internal control framework:
It helps an organisation to accomplish its objectives by
bringing a systematic and disciplined approach to evaluate i. Procurement
and enhance the effectiveness of risk management, control The Procurement unit is entrusted with internal
and governance processes. Group Internal Audit (GIA) control responsibilities for prices and contract
carries out audit based on the plan approved by the Audit negotiations for products and services. The
Committee annually. GIA adopts a risk based methodology Standard Procurement Policies and Procedures
in planning and conducting audit by focusing on key risk have also been put in place across the Group. The
areas. team envisions best procurement practices that
emphasise minimising cost, ensuring competitive
The terms of reference for GIA are clearly spelt out in cycle times, eradicating leakages, enhancing
the GIA Charter approved by the Audit Committee. GIA transparency and developing an extensive
operates and performs in accordance to the principles of supplier base.
the Charter, reports directly to the Audit Committee and is
independent of the activities it audits.
ii. Regulatory Affairs and Corporate Governance Compliance audits are regularly conducted by various
Regulatory Affairs and Corporate Governance independent bodies for the various certifications
Divisions establish compliance at all levels of the and licences obtained from SIRIM, the National
Group’s operations and ensure they operate in Pharmaceutical Regulatory Agency, JAKIM and certain
accordance with relevant legislations. Ensuring multinational companies’ evaluation committees.
strict compliance to Government regulations is
of profound importance to the Group and these The Board, either directly or through the Audit
divisions will continue to monitor and refine the Committee, has been regularly briefed on any major
protocols and systems to ensure total conformity findings arising from these independent audits.
to legislation.
• Code of Conduct
• Written policies and procedures on the limits of
delegated authority The Senior Management and the Board set the tone
at the top for corporate behaviour and corporate
The Group has put in place a Limits of Authority governance. The Group has in place a Code of
(LOA) that sets out the appropriate authorisation Conduct for employees to govern the standard
limits of respective levels of management to ensure of ethics and good conducts. All employees are
all transactions are properly authorised before they subjected to the Company Policy on Confidentiality
are undertaken. During the year, the LOA has been Agreement, Information Security Policies and
reviewed to ensure that they continue to be relevant Standards, Conflict of Interest Declaration, Statement
and effective. The revised LOA has been distributed of Integrity and Personal Data Protection Act 2010.
to the respective levels of management. Appropriate remedial and disciplinary measures such
as warning letters and dismissal are also in place to
• Clearly documented standard operating procedures deal with any breach of the above policies.
manuals
• Strategic Business Planning, Budgeting and Reporting
Policies and procedures for all key processes
are clearly documented and reviewed at regular The Board plays an active role in strategic planning
intervals. Certain subsidiary companies are certified sessions held with management to discuss and review
under the various international standards such as ISO the plans, strategies, performance and risks faced by the
9001:2015, ISO 14001:2015, ISO/IEC 17025:2005, Group. Strategic concerns were deliberated. Strategies
OHSAS 18001:2007 and ISO/IEC 27001:2013. and action plans were then reviewed and mandates were
given to the management by the Board to carry out the
The business operations of the Group are also agreed strategies and action plans.
governed by various regulations and laws applicable
to the pharmaceutical and healthcare industry.
86
Based on strategies identified, the Annual Operating • Human Resources Policies and Procedures
and Three-Year Business Plan together with Key
Performance Indicators (KPIs) were drawn up and Documented internal policies, standards and
approved by the Board in November 2017. This is procedures are in place to ensure compliance with
to ensure accountability and achievement of the internal controls and relevant laws and regulations.
Group’s objectives and strategies. Strategies are Key policies and procedures, and advice and support
also revised based on changes in the business and provided include: performance management, annual
operating environments. Inputs from the Board in the performance review, disciplinary matters, recruitment
Strategic Planning Sessions are used to develop the and selection, learning and development, leave and
Annual Operating and Three-Year Business Plan. grievance matters.
Business plans, budgets and KPIs are aligned to An employee satisfaction survey is conducted
the Group’s Three-Year Strategic Plan, to guide periodically to gauge feedback on the effectiveness
the Group in achieving its vision of becoming the and efficiency of employee engagement for
preferred brand in healthcare in the markets we continuous improvement.
choose to serve. Measured actual achievements of
financial and non-financial indicators against the Training and development programmes are identified
approved budget and explanations for significant and established to ensure that employees are
variances are tabled at monthly operations meetings continually trained and developed in order to be well
and quarterly Board meetings. Effective utilisation of equipped with enhanced skills and competencies to
the budget is attained through regular monitoring by carry out their responsibilities toward achieving the
the management. Group’s objectives.
The Group has also established processes and Manpower planning exercise is conducted on an
procedures to ensure the unaudited quarterly results annual basis within the Group with the allocated
and annual audited financial statements, which budget. The planning exercise enables the
covers the Company’s performance, are submitted to management to determine and to identify present
Bursa Malaysia Securities Berhad (Bursa Malaysia) for and prospective needs of human capital resource and
release to stakeholders, on timely basis. All unaudited recruit the required number of suitable personnel.
quarterly results are reviewed and approved by the In addition, the management will also promote
Board prior to announcement. or transfer the employees as per the Group’s
requirements.
The annual report of the Company that includes the
annual audited financial statements together with Policies and procedures are issued to all Heads of
the auditors’ and directors’ reports are issued to the Departments and reviews are conducted periodically
shareholders within the stipulated time prescribed to ensure all policies and procedures remain current
under the Main Market Listing Requirement (MMLR) and relevant. The relevant parts of the terms and
of Bursa Malaysia. conditions of employment and appropriate policies
and procedures are included in the Employee
Handbook which is accessible to all employees.
The policies and procedures are meant to provide • Regular Monthly Reporting
consistent management of resources transactions
across the Group. It is aimed to set out obligations, Operational review meetings are conducted on a monthly
standards of behaviours and support in building the basis to review and monitor matters pertaining to the
organisational culture. business operations. The review is based on performance
reports that provide comprehensive information on
• Tender Award System financial performance and other key non-financial
indicators. Monthly performance is also reviewed against
As part of the Group’s continuous efforts to the targets allowing for timely response and corrective
enhance transparency, coordination and control action to be taken to mitigate risk.
on procurement of goods and services for projects
above a determined threshold, a Tender Committee, • Performance Management
led by the Head of Procurement has been set up to
increase efficiency and ensures the effectiveness of A structured Performance Management System (PMS)
the system of internal controls are embedded in the which is linked to and guided by the established Key
process of awarding tenders. Performance Indicators (KPIs) and Key Result Areas
(KRAs) parameters has been implemented. The Group
• Insurance adopts the following Balance Scorecard quadrants
(FCIO) to measure KPI achievements through the PMS:
Adequate insurance and physical safeguards on major
assets; buildings and machineries in all operating • Financial (F)
divisions and subsidiary companies are in place to • Customer (C)
ensure the Group’s assets are sufficiently covered • Internal Business Process (I)
against any calamity that could result in material losses • Organisational Learning & Growth (O)
to the Group and/or its subsidiary companies.
FCIO provides a framework to translate and align the
• Credit Management Group’s strategy into measurable operational terms
and is being used as a business unit and corporate
The Group’s credit management policy aims to performance measurement tool. The Group adopts the
minimise credit and payment risk by providing a set of 360-degree appraisal into PMS, which aims to further
rigorous criteria to identify the high risk customers in enhance the evaluation of individual as well as team
the private market, so the appropriate credit control performance. This system has been implemented for all
can be duly executed and the identified customers executives and managerial levels.
can be closely monitored.
• Internal Audit Function
MONITORING
The Internal Audit function provides an independent,
Relevant processes adopted to monitor the adequacy and objective assurance on the areas of operations reviewed,
integrity of the systems of internal control include: and advise on the best practices that will improve and
add value to the Group’s internal control. The Group
Internal Auditors from Boustead Holdings Berhad adopts
a risk based methodology in planning and conducting
audits by focusing on significant risks as identified by
the management.
88
COMMUNICATION and in confidence. The identity of the whistleblower
is kept confidential and protection is accorded to the
A sound communication channel ensures important whistleblower against any form of reprisal or retribution.
information to be identified, documented and shared in a Any concerns raised will be investigated and reported to
form and timeframe that enable people to carry out their the Board.
responsibilities effectively and efficiently. Platforms available
to enhance transparent and effective communication • Do It Right First Time (DIRFT) Campaign
include:
The DIRFT campaign was launched to inculcate a
• Assembly and session with the Management Quality Culture where each individual takes ownership of
quality outcomes and always do things right first time.
The management is committed to a transparent and This campaign is a quality management concept which
effective communication and values the feedback from emphasises that defect prevention is more advantageous
employees in order to motivate them to deliver high and cost effective than defect detection and associated
quality and efficient services to the customers and other work. In other words, prevention is better than cure. The
stakeholders. During the year, half-yearly employees’ DIRFT campaign aimed to convey three main themes:
briefings were conducted as the platform of a two-way
communication between the management and the • Compliance is everyone’s responsibility;
employees, to bring up matters ranging from operations • Coaching and mentoring; and
to welfare, and to celebrate company’s achievements. • Assessment and recognition
The briefings were attended by all employees, within the
Group, including the branches based in other locations Throughout 2017, various activities have been organised
via web conferencing. for the employees at all branches in Malaysia in order
to build and maintain the culture of compliance. The
• Whistleblower Policy activities include:
The Whistleblower Policy provides a platform and acts i. compliance messages that were communicated
as a mechanism for parties to channel their complaints routinely to all employees via emails and
or to provide information on fraud, wrongdoings or announcements;
non-compliance to any rules or procedures by an
employee or the management of the Group. The policy ii. dialogue session with Regulatory Director to
outlines when, how and to whom a concern may be promote interactive discussion on compliance
properly raised, distinguishes a concern from a personal awareness;
grievance and allows the whistleblower the opportunity
to raise a concern outside their management line
iii. trainings to enhance the knowledge on internal ASSURANCE FROM MANAGEMENT

control amongst staff;
For the financial year under review, based on inquiry,
iv. Environmental Conservation campaign; and information and assurances provided by the Managing
Director and Chief Financial Officer, the Board is satisfied
v. Healthy Living programme. that the system of internal control was generally satisfactory.
Measures are in place and continually being taken to ensure
ADEQUACY AND EFFECTIVENESS OF THE RISK the ongoing adequacy and effectiveness of internal controls
MANAGEMENT AND INTERNAL CONTROL SYSTEMS to safeguard the Group’s assets and hence shareholders’
investment.
All audit findings, recommendations and management
actions are rigorously deliberated upon at Audit Committee REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
meetings before being reported to the Board. Quarterly
reports to the Audit Committee track the progress towards As required by Paragraph 15.23 of the Bursa Malaysia
completion of all corrective actions taken on issues MMLR, the external auditors have reviewed this Statement
highlighted by the Group Internal Auditors. on Risk Management and Internal Control. Their limited
assurance review was performed in accordance with
The monitoring, review and reporting arrangements in Recommended Practice Guide (RPG) 5 (Revised) issued
place provide reasonable assurance that the structure of by the Malaysian Institute of Accountants. RPG 5 (Revised)
controls and their implementation are appropriate to the does not require the external auditors to form an opinion
Group’s operations and that risks are at an acceptable level on the adequacy and effectiveness of the risk management
throughout the Group’s businesses. and internal control systems of the Group.
Such arrangements, however, do not eliminate the This statement has been approved by the Board of Directors
possibility of human error or deliberate circumvention of on 27 February 2018.
control procedures by employees and others. The Board
is of the view that the system of internal controls in place
for the year under review and up to the date of issuance of
the financial statements is sound and sufficient to safeguard
the shareholders’ investment, the interest of customers,
regulators, employees and the Group’s assets.
90
Audit
Committee Report
The Board of Directors of Pharmaniaga Berhad is pleased to present the report of the Audit Committee for the financial
year 2017.
MEETINGS
During the financial year 2017, the Audit Committee has convened four meetings, whereby the attendance at all meetings
met the requisite quorum in which the majority of the members present were Independent Non-Executive Directors. The
Company Secretary is responsible for ensuring meetings are arranged and held accordingly at least four times annually
and duly minuted. The meetings were appropriately structured through the use of agendas, which were distributed to
members with sufficient notification. The details of attendance of each member at the Audit Committee meetings held
during the financial year are set out below:
Meetings
Audit Committee Members Status of Directorship Independent Attended
Mohd Suffian Haji Haron Senior Independent Yes 4/4

Non-Executive Director
(Chairman of the Committee)
Daniel Ebinesan Non-Independent No 4/4

Izzat Othman Independent Yes 4/4

Lieutenant General Dato’ Seri Panglima Independent Yes 4/4

Dr Sulaiman Abdullah (Retired) Non-Executive Director
The Managing Director, Chief Financial Officer, Head ACTIVITIES DURING THE FINANCIAL YEAR
of Group Internal Audit and other Senior Management
attended these meetings by invitation. The Audit During the financial year 2017, the Audit Committee in the
Committee also invited the representatives of the External discharge of its functions and duties had carried out the
Auditors, Messrs. PricewaterhouseCoopers PLT to attend following activities to meet its responsibilities:
the meetings twice during the year at which private
sessions, independent of the Managing Director and Senior Financial Reporting
Management, were held.
• Reviewed the quarterly unaudited financial statements of
TERMS OF REFERENCE the Company and the Group including announcements,
before recommending them for approval by the Board
The information on the Terms of Reference of the Audit of Directors. The Audit Committee concluded that the
Committee is available on Pharmaniaga’s corporate report presented a true and fair view of the Group’s
website, www.pharmaniaga.com. financial performance.
Audit Committee Report
• Reviewed the annual audited financial statements of the External Audit

Company and the Group with the external auditors prior
to submission to the Board of Directors for approval. • Reviewed with the external auditors:
- their audit plan and scope of works for the year;
The review was to ensure that the financial reporting and - the results of the annual audit, their audit report for
disclosures are in compliance with: the financial year ended 31 December 2017 and
management letter together with the management’s
- provisions of the Companies Act 2016; response to the findings of the external auditors; and
- Main Market Listing Requirement of Bursa Malaysia - significant audit and accounting matters noted during
Securities Berhad; audit for the financial year ended 31 December
- applicable approved accounting standards in Malaysia; 2017 in particular areas which involve significant
and accounting estimates and judgement:
- other relevant legal and regulatory requirements. i) impairment assessment of goodwill;
ii) impairment assessment of property, plant and
In the review of the annual audited financial statements, equipment and intangible asset of the Group’s
the Audit Committee discussed with management and the small volume injectable plant;
external auditors the accounting principles and standards iii) recognition of deferred tax assets by the Group’s
that were applied and their judgment of the items that may small volume injectable subsidiary; and
affect the financial statements. iv) recoverability of cost of investment in a small
volume injectable subsidiary.
Internal Audit
• Assessed the independence and objectivity of the
• Reviewed the Group Internal Audit’s (GIA) annual audit external auditors during the year and prior to the
plan and budget for 2017 to ensure the adequacy of appointment of the external auditors for ad-hoc non-
scope and comprehensiveness of the activities and audit services. This includes monitoring the fees of total
coverage on auditable entities with significant and high non-audit work by the external auditors. The non-audit
risks. fees are disclosed in the Other Compliance Information
in this annual report.
• Reviewed the sufficiency of resources required and
competencies of staff within the internal audit function • Reviewed the audit fees, the number and experience of
to execute the annual audit plan. audit staff assigned to the audit engagement, resources
and effectiveness of the external auditors.
• Reviewed and deliberated the internal audit
reports issued by GIA and thereafter discussed the • Received reports from the external auditors on their
management’s actions taken to improve and strengthen own policies regarding independence and the measures
the control environment and prevent recurrence. taken to control the quality of their works.
• Reviewed the adequacy and effectiveness of corrective • Met with the external auditors twice during the year
actions taken by the management on all significant in the absence of the Managing Director and Senior
matters raised and monitored the corrective actions on Management.
the outstanding issues to ensure that all the key risks
and control lapses have been addressed.
92
Related Party Transactions INTERNAL AUDIT FUNCTION
• Reviewed the quarterly updates on the related party The internal audit function of the Group is carried out by
transactions entered into by the Group, to ensure the GIA of Boustead Holdings Berhad. GIA function reports
transactions were at arm’s length. directly to the Audit Committee, and is independent
of the activities it audits. GIA’s authority, scope and
• Reviewed the Circular to Shareholders relating to responsibilities are governed by an Internal Audit Charter
shareholders’ mandate for recurrent related party which is approved by the Audit Committee and aligned
transactions of revenue or trading nature prior to with the International Professional Practice Framework on
recommending it for Board’s approval. Internal Auditing issued by the Institute of Internal Auditors.
The Company has an adequately resourced internal audit
Annual Reporting function to assist the Audit Committee and the Board in
maintaining an effective system of internal control, risk
• Reviewed and recommended the Corporate management and overall governance practices within the
Governance Overview Statement, Corporate Group.
Governance Report, Statement on Risk Management
and Internal Control, Audit Committee Report for the Mission
financial year ended 31 December 2017 and Circular to
shareholders on Recurrent Related Party Transactions GIA’s mission is to provide independent and objective
to the Board for approval for disclosures in the Annual assurance on governance, risk management and control
Report. systems of operations reviewed and make recommendations
that will improve or add value to the Group.
Risk Management
During the financial year, GIA had undertaken the following
The Audit Committee reviewed the overall risk profile of the activities to achieve the mission:
Group’s risk, the significant risks and provided guidance on
the action plans to address the identified risks and further • Prepared the annual audit plans for approval by the
reported to the Board thereon. Audit Committee;
During the year, two risk management meetings were • Performed risk-based audits based on the annual audit
held on 16 May 2017 and 15 November 2017 by the plan, including follow-up of matters from previous
Risk Management Workgroup Committee with the Audit internal audit reports;
Committee. In the meeting, action plans on significant risks
and the updated Risk Register were presented. • Issued internal audit reports to the management on
risk management, control and governance issues
identified from the risk-based audits together with
recommendations for improvements for these processes;
Audit Committee Report
• Obtained updates from operating management on the • Project Management

agreed courses of action to rectify weaknesses identified • Environmental, Safety and Health
and perform follow up audits to confirm if agreed • Human Resource Management
recommendations have been correctly implemented, • Statutory Compliance
and are adhered to consistently;
GIA present audit reports that contain improvement
• Reported on a quarterly basis to the Audit Committee opportunities, audit findings, management response and
the achievement of the audit plan and status of resources corrective actions in areas with significant risks, governance
of GIA; and internal control deficiencies to the Audit Committee on
a quarterly basis to enable an evaluation of the adequacy
• Reviewed the procedures relating to related party and integrity of the Group’s risk management, control and
transactions; and governance systems.
• Liaised with the external auditors to optimise the use of Resources and Continuous Development
resources and for effective coverage of the audit risks.
There are a total of 37 internal auditors in Boustead Holdings
Scope and Coverage Berhad in which they are teamed based on the various
divisions within the Boustead Group. For the financial year
GIA adopts a risk-based methodology in planning and ended 31 December 2017, 9 internal auditors carried out
conducting audits by focusing on key risks areas. During the audit in the Group and the total costs incurred for GIA
the year, GIA carried out audits based on the plan approved amounted to RM320,889 inclusive of Goods and Services
by the Audit Committee. The coverage of auditable areas Tax (GST).
takes into consideration the strategic and operational risks,
audit history and request by Senior Management/Audit GIA continues its commitment to equip our internal auditors
Committee that is aligned to the organisation’s strategic with adequate knowledge and proficiency. GIA staff had
objectives. attended various relevant training and courses to enhance
knowledge and proficiency. GIA staff also encouraged to
During the year, GIA has completed and issued 8 internal take Certified Internal Auditor (CIA) and other professional
audit reports based on approved annual audit plan and certification. As at 31 December 2017, six had obtained
request from the management. The audit conducted in CIAs. Meanwhile, 15 are pursuing the CIA qualification.
2017 covered a wide range of operational areas within the
Group. Amongst the key areas covered during the financial
year are:
• Inventory Management
• Financial Management
• Sales and Marketing
• Procurement Management
• Retail Pharmacy
94
Statement of Directors’
Responsibility for Preparation
of Financial Statements
The financial statements of the Group and of the Company The Directors are responsible to ensure that the Group
have been drawn up in accordance with Malaysian Financial and the Company keep proper accounting records, which
Reporting Standards, International Financial Reporting disclose with reasonable accuracy at any time the financial
Standards and the requirements of the Companies Act 2016 position of the Group and of the Company and which
in Malaysia. The Directors take responsibility in ensuring enable them to ensure that the financial statements comply
that the financial statements give a true and fair view of the with the requirements of Companies Act 2016.
financial position of the Group and of the Company as at
31 December 2017 and of the results and the cash flows The Directors have overall responsibility for taking such
of the Group and of the Company for the financial year steps that are reasonably open to them to safeguard the
then ended. assets of the Group and of the Company to prevent and
detect fraud and other irregularities.
In preparing the financial statements, the Directors have:
This statement has been approved by the Board of Directors
• Applied the appropriate and relevant accounting on 1 March 2018.
policies on a consistent basis;
• Made judgements and estimates that are prudent and

reasonable; and
• Prepared the financial statements on the going concern

basis.
AnnuA l Re poRt 2 01 7 95
FINANcIAL
STATEmENTS
Directors’ Report 098
Statement by Directors 108
Statutory Declaration 109
Independent Auditors’ Report 110
Income Statements 117
Statements of Comprehensive Income 118
Statements of Financial Position 119
Statements of Changes in Equity 122
Statements of Cash Flows 125
Notes to the Financial Statements 127
Directors’
Report
The Directors are pleased to present their report together with the audited financial statements of the Group and of the
Company for the financial year ended 31 December 2017.
PRINCIPAL ACTIVITIES
The Company is an investment holding company. The principal activities of its subsidiaries are disclosed in Note 14 to the
financial statements.
There have been no significant changes in the nature of these activities during the financial year.
FINANCIAL RESULTS
Group Company
RM’000 RM’000
Net profit for the financial year 55,087 91,421
Attributable to:
Owners of the parent 53,823 91,421
Non-controlling interests 1,264 -
55,087 91,421
DIVIDENDS
Since the end of the previous financial year, the Directors have declared the following dividends in respect of the financial
year ended 31 December 2017:
Dividend
Sen per share RM’000 Payment Date
First interim single tier dividend 4.0 10,375 7 June 2017

Second interim single tier dividend 4.0 10,393 18 September 2017
Third interim single tier dividend 5.0 12,991 15 December 2017
Fourth interim single tier dividend 6.0 15,589 28 March 2018
19.0 49,348
The fourth interim single tier dividend of 6.0 sen per share amounting to RM15,589,000 mentioned above in respect of the
financial year ended 31 December 2017 will be paid on 28 March 2018 and will be accounted for in equity as an appropriation
of retained earnings in the financial year ending 31 December 2018.
The Directors do not recommend any final dividend in respect of the financial year ended 31 December 2017.
98
Directors’
Report
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the
ISSUE OF SHARES AND DEBENTURES
During the financial year, the Company increased its issued and paid-up share capital from RM129,688,566 to RM146,213,301
via the following:
(a) transfer of RM14,266,259 from the share premium account pursuant to the Companies Act 2016, which came into
effect on 31 January 2017; and
(b) issuance of 443,900 ordinary shares pursuant to the Long Term Incentive Plan at no consideration.
The new ordinary shares issued during the financial year ranked pari passu in all respect with the existing ordinary shares of
the Company.
SHARE SCHEME
On 13 May 2016, the Company implemented the Share Scheme comprising Option Plan and Long Term Incentive Plan (“LTIP”)
after approval was obtained from Bursa Malaysia Securities Berhad (“Bursa Securities”). The Share Scheme is governed by
By-Laws approved by the Company’s shareholders at the Extraordinary General Meeting held on 29 March 2016.
Option Plan
The principal features of the Option Plan are as follows:
(a) Directors and selected Senior Management Officers (“Eligible Employees”) can subscribe under the Option Plan for
new ordinary share in the Company. The number of options granted is subject to the seniority of the respective Eligible
Employees as provided under the Option Plan By-Laws.
(b) Options granted under the Option Plan shall expire on 14 May 2021. Any extension of time of the Option Plan would
have to be approved by the relevant authorities and shareholders of the Company in a general meeting. The Company
in a general meeting may terminate the Option Plan prior to the expiry date.
(c) The option price under the Option Plan shall be based on the weighted average market price of the shares as shown in
the daily official list issued by the Bursa Securities for the five (5) Market Days immediately preceding the date of offer
subject to a discount not more than ten percent (10%) at the Scheme Committee’s discretion.
(d) The new ordinary shares shall rank pari passu in all respect with the existing ordinary shares of the Company.
Directors’
Report
SHARE SCHEME (CONTINUED)
Option Plan (continued)
As at 31 December 2017, particulars of the outstanding options granted under the Option Plan were as follows:
Number of options over ordinary shares

Option At At
Date of grant price 1.1.2017 Granted Exercised 31.12.2017
13 May 2016 RM5.04 15,640,000 - - 15,640,000
Details of the persons who were granted options to subscribe shares under the Option Plan during the financial year, other
than Directors, are as follows:

At At
1.1.2017 Granted Exercised 31.12.2017
Datin Shamsinar Haji Shaari 375,000 - - 375,000

Sharifah Fauziyah Syed Mohthar 375,000 - - 375,000
Mohamed Iqbal Abdul Rahman 350,000 - - 350,000
Norai’ni Mohamed Ali 350,000 - - 350,000
Abdul Malik Mohamed 300,000 - - 300,000
Zulhazri Razali 290,000 - - 290,000
Details of options granted to Directors under the Option Plan are disclosed in the section on Directors’ Interests in Shares of
this report.
The other details of Share Scheme are disclosed in Note 29 to the financial statements.
Long Term Incentive Plan
The principal features of the LTIP are as follows:
(a) Subject always to the eligibility criteria set out below, the Executive Director and Eligible Employees of the Group are
awarded with new ordinary shares in the Company for nil consideration:
- if he has attained the age of 18 years, is not an undischarged bankrupt and is not subject to any bankruptcy
proceedings;
- if he entered into a full-time or fixed term contract with, and is on the payroll of the Group, and whose service
has been confirmed;
- if he is serving in a specific designation under an employment contract, whether on a permanent contract or for
a fixed duration (or any other contract as may be determined by the Scheme Committee); and
- if he fulfils any other criteria and/or falls within such category as may be determined by the Scheme Committee
from time to time.
100
Directors’
Report
SHARE SCHEME (CONTINUED)
Long Term Incentive Plan (continued)
(b) Shares granted are vested to the Executive Director and Eligible Employees in tranches over a period of up to 3 years,
the vesting conditions of which are to be determined by the Scheme Committee.
(c) Executive Director and Eligible Employees are awarded with new ordinary shares in the Company for nil consideration.
(d) The value of the allocation per year to the Executive Director and Eligible Employees under the LTIP shall not exceed
6% of the audited profit after tax of the Group for the preceding financial year.
(e) The new ordinary shares shall rank pari passu in all respect with the existing ordinary shares of the Company.
As at 31 December 2017, particulars of the shares granted under the LTIP were as follows:
Number of ordinary shares

At At
Date of grant 1.1.2017 Granted Vested Lapsed 31.12.2017
13 May 2016 581,600 - (283,600) (12,700) 285,300

18 May 2017 - 481,000 (160,300) - 320,700
The total number of shares to be offered under the Share Scheme shall not in aggregate exceed 10% of the total issued and
paid-up share capital of the Company at any point in time during the duration of the scheme. During the financial year, all
shares under the LTIP were granted to selected Senior Management Officers.
SIGNIFICANT EVENT
Significant event during the financial year is disclosed in Note 38 to the financial statements.
DIRECTORS
The Directors who have held office during the financial year and during the period from the end of the financial year to the
date of the report are as follows:

Daniel Ebinesan
Izzat Othman
Lieutenant General Dato’ Seri Panglima Dr Sulaiman Abdullah (Retired)

Directors’
Report
DIRECTORS (CONTINUED)
The names of the Directors of the Company’s subsidiaries since the beginning of the financial year to the date of this report,
excluding those who are already listed above are as follows:
Mohamed Iqbal Abdul Rahman

Norai’ni Mohamed Ali
Datin Shamsinar Haji Shaari
Sharifah Fauziyah Syed Mohthar
Abdul Malik Mohamed
Zulhazri Razali
Yang Fairuz binti Abdul Aziz
Mohd Saharuddin bin Othman
Shahanaz bin Sulaiman
Badarulhisam bin Abdul Rahman
Yusni Rizal bin Khairul Anuar
Norhana binti Nawawi Suri
Muhammad Fauzi bin Abdul Hamid
Suzana binti Yahya
Mohd Izwan bin Ishak
Azleena binti Al Jeffri
Ahmad Nasir bin Che Hassan
Norman bin Ismail
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements
with the object or objects of enabling Directors of the Company to acquire benefits by means 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 has received or become entitled to receive a benefit (other than
benefits included in the aggregate emoluments received or due and receivable by the Directors as shown in Notes 7 and 8
to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with
a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.
The Directors and Officers of the Company are covered by Directors and Officers liability insurance for any liability incurred
in the discharge of their duties, provided that they have not acted fraudulently or dishonestly or derived any personal
profit or advantage. The insurance is maintained on a group basis by Pharmaniaga Berhad and the total premium paid by
Pharmaniaga Berhad during the financial year amounted to RM65,000.
REMUNERATION COMMITTEE
The Remuneration Committee reviews the remuneration packages, reward structure and fringe benefits applicable to the
Managing Director and senior management in the Company on an annual basis and makes recommendation to the Board of
Directors. The members of the Remuneration Committee are as follows:
Mohd Suffian Haji Haron (Chairman)

Izzat Othman
102
Directors’
Report
DIRECTORS’ INTERESTS IN SHARES
According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act 2016,
particulars of interests of Directors who held office at the end of the financial year in shares in the Company or its subsidiaries
or its holding company or subsidiaries of the holding company were as follows:

At At
1.1.2017 Acquired Sold 31.12.2017
The Company
Direct interest
Tan Sri Dato’ Seri Lodin

Wok Kamaruddin 12,500,148 - - 12,500,148
Dato’ Farshila Emran 129,000 117,300 - 246,300
Mohd Suffian Haji Haron - 60,000 - 60,000
Daniel Ebinesan 600,000 - - 600,000
Immediate holding company
Boustead Holdings Berhad

Wok Kamaruddin 52,257,805 - - 52,257,805
Related corporations
Boustead Heavy Industries

Corporation Berhad

Wok Kamaruddin 2,000,000 - - 2,000,000
Mohd Suffian Haji Haron 20,000 - - 20,000
Daniel Ebinesan 20 - - 20
Boustead Petroleum Sdn. Bhd.

Wok Kamaruddin 5,916,465 - - 5,916,465

Directors’
Report
DIRECTORS’ INTERESTS IN SHARES (CONTINUED)

At At
1.1.2017 Acquired Sold 31.12.2017
Related corporations (continued)
Boustead Plantations Berhad

Wok Kamaruddin 27,836,800 - - 27,836,800
Dato’ Farshila Emran 450,000 - (450,000) -
Mohd Suffian Haji Haron 30,000 - - 30,000
Daniel Ebinesan 1,295,500 - - 1,295,500
Izzat Othman 250,000 - - 250,000
Affin Holdings Berhad

Wok Kamaruddin 1,051,328 - - 1,051,328
The number of options granted to the Directors pursuant to the Company’s Option Plan are set out below:
At At
1.1.2017 Granted Exercised 31.12.2017
The Company

Wok Kamaruddin 3,800,000 - - 3,800,000
Dato’ Farshila Emran 2,000,000 - - 2,000,000
Mohd Suffian Haji Haron 2,000,000 - - 2,000,000
Daniel Ebinesan 1,800,000 - - 1,800,000
Izzat Othman 2,000,000 - - 2,000,000
Lieutenant General Dato’ Seri
Panglima Dr Sulaiman Abdullah
(Retired) 2,000,000 - - 2,000,000
104
Directors’
Report
DIRECTORS’ INTERESTS IN SHARES (CONTINUED)
The shares granted to a Director pursuant to the Company’s Long Term Incentive Plan is set out below:
At At
1.1.2017 Granted Vested 31.12.2017
The Company
Dato’ Farshila Emran 84,000 76,000 (67,300) 92,700
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
CURRENT ASSETS VALUATION
Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance
for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance
had been made for doubtful debts; and
(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business
including the value of current assets as shown in the accounting records of the Group and of the Company had been
written down to an amount which the current assets might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the
financial statements of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company
misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and
of the Company misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve
months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group or
of the Company to meet their obligations when they fall due.

Directors’
Report
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED)
CONTINGENT AND OTHER LIABILITIES (CONTINUED)
At the date of this report, there does not exist:
(a) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which
secures the liability of any other person; or
(b) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
CHANGING CIRCUMSTANCES
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the
financial statements that would render any amount stated in the financial statements misleading.
ITEMS OF AN UNUSUAL NATURE
In the opinion of the Directors:
(a) the results of the Group’s and of the Company’s operations during the financial year were not substantially affected by
any item, transaction or event of a material and unusual nature; and
(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction
or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or of
the Company for the year in which this report is made.
HOLDING CORPORATIONS
The Directors regard Boustead Holdings Berhad, a company incorporated in Malaysia, and Lembaga Tabung Angkatan
Tentera (“LTAT”), a local statutory body established under the Tabung Angkatan Tentera Act, 1973, as the immediate
holding company and ultimate holding corporation respectively.
SUBSIDIARIES
Details of subsidiaries are set out in Note 14 to the financial statements.
106
Directors’
Report
AUDITORS’ REMUNERATION
Details of auditors’ remuneration are set out in Note 7 to the financial statements.
AUDITORS
The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to accept re-
appointment as auditors.
PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146) was registered on 2 January 2018 and with effect from that date,
PricewaterhouseCoopers (AF 1146), a conventional partnership was converted to a limited liability partnership.
This report was approved by the Board of Directors on 1 March 2018. Signed on behalf of the Board of Directors:
TAN SRI DATO’ SERI LODIN WOK KAMARUDDIN DATO’ FARSHILA EMRAN
CHAIRMAN MANAGING DIRECTOR

Statement by
Directors
PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016
We, Tan Sri Dato’ Seri Lodin Wok Kamaruddin and Dato’ Farshila Emran, being two of the Directors of Pharmaniaga Berhad,
state that, in the opinion of the Directors, the financial statements set out on pages 117 to 217 are drawn up so as to
give a true and fair view of the financial position of the Group and of the Company as at 31 December 2017 and financial
performance of the Group and of the Company for the financial year ended on 31 December 2017 in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies
Act 2016 in Malaysia.
Signed on behalf of the Board of Directors in accordance with a resolution dated 1 March 2018.
TAN SRI DATO’ SERI LODIN WOK KAMARUDDIN DATO’ FARSHILA EMRAN
CHAIRMAN MANAGING DIRECTOR
108
Statutory
Declaration
PURSUANT TO SECTION 251(1) OF THE COMPANIES ACT 2016
I, Norai’ni Mohamed Ali, being the officer primarily responsible for the financial management of Pharmaniaga Berhad, do
solemnly and sincerely declare that the financial statements set out on pages 117 to 217 are, in my opinion, correct and I
make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory
Declarations Act 1960.
NORAI’NI MOHAMED ALI
Subscribed and solemnly declared by the abovenamed Norai’ni Mohamed Ali at Kuala Lumpur on 1 March 2018, before me.
COMMISSIONER FOR OATHS

Independent Auditors’
Report
to the members of Pharmaniaga Berhad
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Our opinion
In our opinion, the financial statements of Pharmaniaga Berhad (“the Company”) and its subsidiaries (“the Group”) give
a true and fair view of the financial position of the Group and of the Company as at 31 December 2017, and of their
financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting
Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
What we have audited
We have audited the financial statements of the Group and of the Company, which comprise the statements of financial
position as at 31 December 2017 of the Group and of the Company, and the income statements, statements of comprehensive
income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial
year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on
pages 117 to 217.
Basis for opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of
the financial statements” section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence and other ethical responsibilities
We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and
Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in
accordance with the By-Laws and the IESBA Code.
Our audit approach
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements of the Group and the Company. In particular, we considered where the Directors made subjective judgements;
for example, in respect of significant accounting estimates that involved making assumptions and considering future events
that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls,
including among other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
110
Report
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)
Our audit approach (Continued)
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial
statements as a whole, taking into account the structure of the Group and of the Company, the accounting processes and
controls, and the industry in which the Group and the Company operate.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit
of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit matters How our audit addressed the key audit matters
Impairment assessment of goodwill
Refer to Note 2(j) (Significant Accounting Policies), Note 3 Our procedures performed in relation to management’s
(Critical Accounting Estimates and Judgements) and Note 16 impairment assessment and testing included the following:
(Impairment tests for goodwill).
• Assessed the reliability of management’s forecast through
The Group’s goodwill of RM133.3 million as at 31 December the review of past trends of actual financial performances
2017 were allocated to 4 cash-generating units (“CGUs”), against previous forecasted results;
namely, Trading and distribution and Manufacturing CGUs in • Checked the key assumptions used by management,
Malaysia and Indonesia. in particular, sales volume growth rate and margins by
product comparing to business plans, historical results and
Goodwill is subject to annual impairment testing. We focused market data;
on this area as the determination of recoverable amounts of • Checked the discount rate used by comparing the rate
the assets in these 4 CGUs based on value-in-use calculations used by comparable companies;
by management involved a significant degree of judgement • Checked that the outcome of the related sensitivity
and assumptions on sales volume growth rate and margins. analysis based on range of possible changes determined
by management is consistent with our independent
expectations; and
• Assessed the adequacy of the disclosures in the financial
statements.
Based on the procedures performed, we noted no significant

exceptions.

Report
Impairment assessment of property, plant and equipment

and intangible asset of the Group’s small volume injectable
plant
Refer to Note 2(j) (Significant Accounting Policies), Note 3 We examined the impairment assessment prepared by the
(Critical Accounting Estimates and Judgements) and Note 12 management and our procedures included the following:
(Impairment assessment for property, plant and equipment and
capitalised development costs included within intangible asset). • Assessed the reliability of management’s forecast through
the review of past trends of actual financial performances
The carrying values of property, plant and equipment (“PPE”) against previous forecasted results;
and intangible asset of the Group’s small volume injectable • Evaluated the methodology and reasonableness of the
plant as at 31 December 2017 are RM136.0 million and RM7.6 key assumptions used in determining the terminal value of
million respectively. land;
• Checked the key assumptions used by management in the
The intangible asset relates to capitalised development costs value-in-use calculations, in particular, sales volume growth
work-in-progress and subject to annual impairment testing. rate and margins by product comparing to business plans,
historical results and market data;
An impairment assessment was perform by management on • Checked the discount rate used by comparing the rate
the small volume injectable plant because the plant has not used by comparable companies;
been utilised at its maximum capacity as most of the products • Checked that the outcome of the related sensitivity
are still at development stage. analysis based on range of possible changes determined
by management is consistent with our independent
Management assessed the impairment of intangible asset expectations; and
together with the PPE as one cash generating unit (“CGU”). • Assessed the adequacy of the disclosures in the financial
The recoverable amount of the CGU is determined based on statements.
value-in-use calculations.
Based on the above procedures performed, we noted no
No impairment was required as the recoverable amount of the significant exceptions.
CGU was in excess of the carrying amount of the assets within
the CGU.
We focused on this area as the impairment assessment performed

by management requires significant judgement as the timing
and quantum of the cash flows are dependent on sales volume
growth rate, margin and terminal value of the land.
112
Report
Recognition of deferred tax assets by the Group’s small

volume injectable subsidiary
Refer to Note 2(t) (Significant Accounting Policies), Note 3 We evaluated management’s assessment of the probability
(Critical Accounting Estimates and Judgements) and Note 31 of utilisation of tax losses and capital allowances against
(Deferred Taxation). future taxable profits, which have been used as the basis to
recognise the deferred tax assets. Our procedures included
As at 31 December 2017, the Group has recognised deferred the following:
tax assets of RM13.5 million relating to the small volume
injectable subsidiary. The deferred tax assets arose from • Checked the key assumptions used in the future taxable
unutilised tax losses and unabsorbed capital allowances. profit projections, in particular, sales volume growth rate
and margins by product comparing to business plans,
We focused on this area due to the continued losses recorded historical results and market data; and
by the small volume injectable subsidiary and significant • Assessed the reliability of management’s forecasted future
management judgement involved in determining the taxable profits through the review of past trends of actual
amount of deferred tax assets to be recognised based on the financial performances against previous forecasted results.
probability that future taxable profits will be available.
Based on our procedures, we noted no significant exceptions.
Recoverability of cost of investment in a small volume

injectable subsidiary in the financial statements of the
Company
Our procedures in relation to management’s impairment
Refer to Note 2(j) (Significant Accounting Policies), Note 3 assessment included the following:
(Critical Accounting Estimates and Judgements) and Note 14
(Subsidiaries). • Assessed the reliability of management’s forecast through
the review of past trends of actual financial performances
As at 31 December 2017, the carrying value of the cost of against previous forecasted results;
investment in the small volume injectable subsidiary is • Checked the key assumptions used by management in the
RM200.0 million. value-in-use calculations on sales volume growth rate and
margins by product comparing to business plans, historical
An impairment assessment was performed by management results and market data;
because the subsidiary’s small volume injectable plant has not • Checked that the outcome of the related sensitivity
been utilised at its maximum capacity as most of the products analysis based on range of possible changes determined
are still at development stage. by management is consistent with our independent
expectations; and
The recoverable amount of the investment is determined • Assessed the adequacy of the disclosures in the financial
based on discounted future cash flows adjusted for tax and statements.
repayment of intercompany balances.
Based on the above procedures performed, we did not note
No impairment was required as the recoverable amount was in any significant exceptions.
excess of its carrying amount.
We focused on this area as the recoverable amount of the

investment is determined based on value-in-use method,
which requires judgement on the part of management on the
future financial performance of the subsidiary.
Report
Information other than the financial statements and auditors’ report thereon
The Directors of the Company are responsible for the other information. The other information comprises Chairman’s
Statement, Managing Director’s Review, Operations Review, Corporate Governance Overview Statement, Statement on Risk
Management and Internal Control, Audit Committee Report, Directors’ Report and other sections of the 2017 Annual Report,
but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read
the other information and, in doing so, consider whether the other information is materially inconsistent with the financial
statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial statements
The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the
Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial
Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for
such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group
and of the Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the
Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
114
Report
Auditors’ responsibilities for the audit of the financial statements (Continued)
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing,
we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the
Company’s internal control.
(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Directors.
(d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements
of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may
cause the Group or the Company to cease to continue as a going concern.
(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company,
including the disclosures, and whether the financial statements of the Group and of the Company represent the
underlying transactions and events in a manner that achieves fair presentation.
(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit
of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We
describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have
not acted as auditors, are disclosed in Note 14 to the financial statements.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act
2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS PLT AZIZAN BIN ZAKARIA

LLP0014401-LCA & AF 1146 2930/05/18 (J)
Chartered Accountants Chartered Accountant
Kuala Lumpur
1 March 2018
116
Income
Statements
for the financial year ended 31 December 2017
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Revenue 4 2,323,960 2,189,022 119,394 105,076

Cost of sales 5 (1,988,798) (1,845,775) - -
Gross profit 335,162 343,247 119,394 105,076

Other income 7(b) 9,006 1,312 39 222
Administrative expenses (243,057) (239,877) (25,414) (22,580)
Finance costs 6 (28,774) (33,703) (2,681) (4,117)
Interest income 727 1,038 85 -
Profit before zakat and taxation 7 73,064 72,017 91,423 78,601

Zakat (600) (250) - -
Taxation 9 (17,377) (25,908) (2) -
Net profit for the financial year 55,087 45,859 91,421 78,601
Attributable to:
Owners of the parent 53,823 45,599 91,421 78,601
Non-controlling interests 1,264 260 - -
Earnings per share (sen):

- Basic 10(a) 20.74 17.60
- Diluted 10(b) 20.69 17.54
The accompanying notes form an integral part of these financial statements.

Statements of
Comprehensive Income
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Other comprehensive (loss)/income,

net of tax:
Items that will be subsequently

reclassified to profit or loss
Foreign currency translation
differences for foreign operations (16,900) 9,137 - -
Items that will not be reclassified

to profit or loss
Recognition of actuarial losses 32 (224) (74) - -
Other comprehensive (loss)/income,

net of tax for the financial year (17,124) 9,063 - -
Total comprehensive income,

net of tax for the financial year 37,963 54,922 91,421 78,601
Attributable to:
Owners of the parent 41,627 53,009 91,421 78,601
Non-controlling interests (3,664) 1,913 - -
37,963 54,922 91,421 78,601
118
Statements of
Financial Position
as at 31 December 2017
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
ASSETS
Non-current assets
Property, plant and equipment 12 410,854 420,465 - -

Prepaid lease payments 13 2,281 2,616 - -
Subsidiaries 14 - - 589,786 437,751
Investment in an associate 15 - - - -
Intangible assets 16 365,394 342,796 - -
Trade receivables 18 9,472 12,236 - -
Other receivables 19 5,674 - 5,674 -
Amounts due from subsidiaries 20 - - 22,336 139,046
Deferred tax assets 31 35,437 28,298 - -
829,112 806,411 617,796 576,797
Current assets
Inventories 17 484,993 532,211 - -

Trade receivables 18 165,481 161,276 - -
Other receivables 19 81,222 95,013 160 8,668
Amounts due from subsidiaries 20 - - 34,932 97,218
Tax recoverable 19,049 17,743 - -
Deposits, cash and bank balances 22 27,893 70,456 177 377
778,638 876,699 35,269 106,263
TOTAL ASSETS 1,607,750 1,683,110 653,065 683,060

Statements of
Financial Position
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
EQUITY AND LIABILITIES
Capital and reserves attributable to

equity holders of the Company
Share capital 28 146,213 129,688 146,213 129,688

Share premium - 14,266 - 14,266
Exchange reserve 3,239 15,319 - -
Share reserve 29 10,527 5,821 8,676 4,521
Retained earnings 30 368,067 365,537 241,333 191,452
528,046 530,631 396,222 339,927

Non-controlling interests 19,081 28,776 - -
Total equity 547,127 559,407 396,222 339,927
Non-current liabilities
Other payables 24 457 547 457 547

Deferred income 26 4,864 4,190 - -
Borrowings 27 401 248 - -
Deferred tax liabilities 31 52,999 48,105 - -
Provision for defined benefit plan 32 8,977 8,593 - -
67,698 61,683 457 547
120
Statements of
Financial Position
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Current liabilities
Amounts due to subsidiaries 20 - - 194,310 209,019

Amounts due to related companies 21 2,670 853 - -
Trade payables 23 499,426 378,116 - -
Other payables 24 44,123 63,788 2,975 3,493
Amount due to immediate
holding company 25 725 472 101 74
Deferred income 26 571 424 - -
Borrowings 27 443,916 616,664 59,000 130,000
Current tax liabilities 1,494 1,703 - -
992,925 1,062,020 256,386 342,586
Total liabilities 1,060,623 1,123,703 256,843 343,133
TOTAL EQUITY AND LIABILITIES 1,607,750 1,683,110 653,065 683,060

Statements of
Changes in Equity
Equity attributable to equity holders of the Company

Non-
Share Share Exchange Share Retained controlling Total
Group Note capital premium reserve reserve earnings Total interests equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2017 129,688 14,266 15,319 5,821 365,537 530,631 28,776 559,407
Adjustments for
effects of
Companies
Act 2016 28 14,266 (14,266) - - - - - -
Net profit for the
financial year - - - - 53,823 53,823 1,264 55,087
Other comprehensive loss - - (12,080) - (116) (12,196) (4,928) (17,124)
Total comprehensive
(loss)/income for the
financial year - - (12,080) - 53,707 41,627 (3,664) 37,963
Transactions with owners:
Accretion of interests
in subsidiaries - - - - (9,637) (9,637) (6,455) (16,092)
Issuance of shares
by a subsidiary 14 - - - - - - 398 398
Adjustments arising
from the finalisation
of purchase
price allocation 14 - - - - - - 282 282
Issuance of new shares:
- Long Term
Incentive Plan 28 2,259 - - (2,259) - - - -
Share options
granted under
Option Plan 29 - - - 4,331 - 4,331 - 4,331
Shares granted
under Long Term
Incentive Plan 29 - - - 2,634 - 2,634 - 2,634
Dividends:
- owner of the
Company 11 - - - - (41,540) (41,540) - (41,540)
- non-controlling
interests of a
subsidiary - - - - - - (256) (256)
Total transaction
with owners for the
financial year 2,259 - - 4,706 (51,177) (44,212) (6,031) (50,243)
At 31 December 2017 146,213 - 3,239 10,527 368,067 528,046 19,081 547,127
122
Statements of
Changes in Equity
Equity attributable to equity holders of the Company

Non-
Share Share Exchange Share Retained controlling Total
Group Note capital premium reserve reserve earnings Total interests equity
At 1 January 2016 129,441 11,751 7,842 - 380,375 529,409 30,585 559,994
Net profit for the

financial year - - - - 45,599 45,599 260 45,859
Other comprehensive
income/(loss) - - 7,477 - (67) 7,410 1,653 9,063
Total comprehensive
income for the
financial year - - 7,477 - 45,532 53,009 1,913 54,922
Accretion of interest
in a subsidiary 14 - - - - (8,549) (8,549) (3,425) (11,974)
Acquisition of
a subsidiary 14 - - - - - - 41 41
- Option Plan 28 100 1,014 - (106) - 1,008 - 1,008
- Long Term
Incentive Plan 28 147 1,501 - - - 1,648 - 1,648
Share options
granted under
Option Plan 29 - - - 4,278 - 4,278 - 4,278
Shares granted
under Long Term
Incentive Plan 29 - - - 1,649 - 1,649 - 1,649
Dividends:
- owner of the
Company 11 - - - - (51,821) (51,821) - (51,821)
- non-controlling
interests of a
subsidiary - - - - - - (338) (338)
Total transaction
with owners for
the financial year 247 2,515 - 5,821 (60,370) (51,787) (3,722) (55,509)
At 31 December 2016 129,688 14,266 15,319 5,821 365,537 530,631 28,776 559,407

Statements of
Changes in Equity
Non-distributable Distributable
Share Share Share Retained
Note capital premium reserve earnings Total
RM’000 RM’000 RM’000 RM’000 RM’000
Company
At 1 January 2017 129,688 14,266 4,521 191,452 339,927

Adjustment for effects of
Companies Act 2016 28 14,266 (14,266) - - -
Total comprehensive income
for the financial year - - - 91,421 91,421

- Long Term Incentive Plan 28 2,259 - (341) - 1,918
Share options granted under
Option Plan 29 - - 4,331 - 4,331
Shares granted under
Long Term Incentive Plan 29 - - 165 - 165
Dividends 11 - - - (41,540) (41,540)
Total transactions with owners
for the financial year 2,259 - 4,155 (41,540) (35,126)
At 31 December 2017 146,213 - 8,676 241,333 396,222
At 1 January 2016 129,441 11,751 - 164,672 305,864

Total comprehensive income
for the financial year - - - 78,601 78,601

- Option Plan 28 100 1,014 (106) - 1,008
- Long Term Incentive Plan 28 147 1,501 - - 1,648
Share options granted under
Option Plan 29 - - 4,278 - 4,278
Shares granted under
Long Term Incentive Plan 29 - - 349 - 349
Dividends 11 - - - (51,821) (51,821)
Total transactions with owners
for the financial year 247 2,515 4,521 (51,821) (44,538)
At 31 December 2016 129,688 14,266 4,521 191,452 339,927

124
Statements of
Cash Flows
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM OPERATING

ACTIVITIES
Cash receipts from customers 2,332,061 2,201,462 - -

Cash payments to suppliers and
employees (2,044,399) (2,108,947) (15,680) (23,106)
Cash generated from/(used in)

operations 287,662 92,515 (15,680) (23,106)
Interest paid (29,338) (31,856) - -

Tax paid (18,953) (25,958) - -
Zakat paid (600) (250) - -
Interest received 642 985 - -
Net cash generated from/(used in)

operating activities 239,413 35,436 (15,680) (23,106)
CASH FLOWS FROM INVESTING

ACTIVITIES
Acquisition of subsidiaries (net of

cash acquired) 14 - (2,947) - (2,953)
Repayment of advance from/
(Advance to) a corporate shareholder
of a subsidiary 16,092 (17,960) - -
Proceeds from disposal of property,
plant and equipment 79 164 - -
Purchase of property, plant and
equipment 12 (29,430) (43,639) - -
Purchase of intangible assets 16 (49,164) (69,825) - -
Gross advances to subsidiaries - - (51,790) (58,342)
Gross repayments from subsidiaries - - 29,100 303
Net cash used in investing activities (62,423) (134,207) (22,690) (60,992)

Statements of
Cash Flows
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM FINANCING

ACTIVITIES
Acquisition of interest in a
subsidiary from non-controlling
interest 14 (16,092) (11,974) - -
Issuance of shares - 1,008 - 1,008
Proceed from issuance of shares in
a subsidiary 378 - - -
Dividends paid to:
- owners of the Company 11 (41,540) (51,821) (41,540) (51,821)
- non-controlling interests
of a subsidiary (256) (338) - -
Drawdown of short term borrowings 955,730 1,192,035 191,000 85,000
Interest paid - - (2,681) (4,117)
Repayment of short term borrowings (1,114,966) (983,480) (262,000) (35,000)
Gross advances received from
subsidiaries - - 374,492 190,921
Gross repayments to subsidiaries - - (221,101) (101,705)
Net cash (used in)/generated from

financing activities (216,746) 145,430 38,170 84,286
NET CHANGES IN CASH AND

CASH EQUIVALENTS (39,756) 46,659 (200) 188
Foreign exchange differences (2,807) 1,279 - -
CASH AND CASH EQUIVALENTS

AT BEGINNING OF FINANCIAL
YEAR 70,456 22,518 377 189
CASH AND CASH EQUIVALENTS

AT END OF FINANCIAL YEAR 22 27,893 70,456 177 377
126
Notes to the
Financial Statements
31 December 2017
1. GENERAL INFORMATION
The Company is an investment holding company. The principal activities of its subsidiaries are disclosed in Note 14.
There have been no significant changes in the nature of these activities during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main
Market of Bursa Malaysia Securities Berhad.
The addresses of the registered office and principal place of business of the Company are as follows:
Registered office:
28th Floor, Menara Boustead

69 Jalan Raja Chulan
50200 Kuala Lumpur
Principal place of business:
7, Lorong Keluli 1B
Kawasan Perindustrian Bukit Raja Selatan
Seksyen 7
40000 Shah Alam
Selangor Darul Ehsan
The Directors regard Boustead Holdings Berhad, a company incorporated in Malaysia, and Lembaga Tabung Angkatan
Tentera (“LTAT”), a local statutory body established under the Tabung Angkatan Tentera Act, 1973, as the immediate
holding company and ultimate holding corporation respectively.
The financial statements are presented in Ringgit Malaysia and rounded to the nearest thousand, unless otherwise
stated.

Notes to the
2. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items that are considered material
in relation to the financial statements. These policies have been consistently applied to all the years presented, unless
otherwise stated.
(a) Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian
Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of
the Companies Act 2016 in Malaysia.
The financial statements of the Group and of the Company have been prepared under the historical cost
convention, unless otherwise indicated in this summary of significant accounting policies.
The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses
during the reported period. It also requires Directors to exercise their judgement in the process of applying the
Group and the Company’s accounting policies. Although these estimates and judgements are based on the
Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 3.
Standards, amendments to published standards and interpretations that are effective
On 1 January 2017, the Group and the Company has applied the following improvements and amendments to
published standards:
Amendments to MFRS 107 Disclosure Initiative

“Statement of Cash Flows”
Amendments to MFRS 112 Recognition of Deferred Tax Assets

“Income Taxes“ for Unrealised Losses
The adoption of the Amendments to MFRS 107 has required additional disclosure of changes in liabilities arising
from financing activities. Other than that, the adoption of these amendments did not have any impact on the
current period or any prior period and is not likely to affect future periods.
128
Notes to the
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Basis of preparation (continued)
Standards and amendments that have been issued but not yet effective
At the date of authorisation of the financial statements, the following standards and amendments have been
issued and are effective for financial year beginning after 1 January 2017 and have not been applied by the
Group:
(i) Financial year beginning on/after 1 January 2018
• MFRS 15 “Revenue from Contracts with Customers“
MFRS 15 “Revenue from Contracts with Customers“ (effective from 1 January 2018) replaces MFRS
118 “Revenue“ and MFRS 111 “Construction Contract“ and related interpretations. The core
principle in MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods
or services to the customer in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services.
Revenue is recognised when a customer obtains control of goods or services, that is, when the
customer has the ability to direct the use and obtain the benefits from the goods or services.
A new five-step process is applied before revenue can be recognised:

- Identify contracts with customers;
- Identify the separate performance obligations;
- Determine the transaction price of the contract;
- Allocate the transaction price to each of the separate performance obligation; and
- Recognise the revenue as each performance obligation is satisfied.
Key provisions of the new standard are as follows:

- Any bundled goods or services that are distinct must be separately recognised and any
discounts or rebates on the contract price must generally be allocated to the separate
elements.
- If the consideration varies (such as for incentives, rebates, performance fees, royalties,
success fees of an outcome etc), minimum amounts of revenue must be recognised if they
are not at significant risk of reversal.
- The point of revenue recognition may shift: some revenue which recognised at a point in
time at the end of a contract may have to be recognised over the contract term and vice
versa.
- There are new specific rules on licenses, warranties, non-refundable upfront fees, and
consignment arrangements, to name a few.
- As with any new standard, there are also increased disclosures.

Notes to the
Standards and amendments that have been issued but not yet effective (continued)
(i) Financial year beginning on/after 1 January 2018 (continued)
• MFRS 15 “Revenue from Contracts with Customers“(continued)
The Group has assessed the effects of applying the new standard on the Group’s financial
statements and has identified the following areas that will be affected:
- Revenue relating to sales of good will be recognised when control of the products has
transferred, being the point when the products are delivered to the customer. As the transfer
of risks and rewards generally coincides with the transfer of control at a point in time, the
timing and amount of revenue recognised for the sale of good under MFRS 15 is unlikely to
be materially different from its current practice.
- Revenue relating to services will be recognised in the accounting period in which the
services are rendered. Revenue from contracts include multiple deliverables, such as system
and equipment design, planning, installation and commissioning contracts. It is therefore
accounted for as a separate performance obligation under MFRS 15. The transaction price
will be allocated to each performance obligation based on the stand-alone selling price.
Revenue relating to revenue from contract will be recognised over time based on the entity’s
progress towards complete satisfaction of that performance obligation. If contracts include
the installation of equipment, revenue for the equipment is recognised at a point in time
when the equipment is delivered, the legal title has passed and the customer has accepted
the equipment. The Group does not expect the revenue recognition for services under
MFRS 15 to be materially different from its current practice.
- Presentation of contract assets and contract liabilities in the balance sheet – MFRS 15
requires separate presentation of contract assets and contract liabilities in the Statements of
Financial Position. This will result in some reclassifications as of 1 January 2018 in relation to
contracts assets and contract liabilities.
The Group intends to adopt the standard using the modified retrospective approach which means
that the cumulative impact of the adoption will be recognised in retained earnings as of 1 January
2018 and that comparatives will not be restated.
130
Notes to the
• MFRS 9 “Financial Instruments“
MFRS 9 “Financial Instruments“ (effective from 1 January 2018) will replace MFRS 139 “Financial
Instruments: Recognition and Measurement”.
MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three
primary measurement categories for financial assets: amortised cost, fair value through profit or loss
and fair value through other comprehensive income (“OCI“). The basis of classification depends
on the entity’s business model and the contractual cash flow characteristics of the financial asset.
Investments in equity instruments are always measured at fair value through profit or loss with an
irrevocable option at inception to present changes in fair value in OCI (provided the instrument is
not held for trading). A debt instrument is measured at amortised cost only if the entity is holding
it to collect contractual cash flows and the cash flows represent principal and interest.
For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised
cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main
change is that, in cases where the fair value option is taken for financial liabilities, the part of fair
value change due to an entity’s own credit risk is recorded in other comprehensive income rather
than the income statement, unless this creates an accounting mismatch.
MFRS 9 introduces an expected credit loss model on impairment for all financial assets that
replaces the incurred loss impairment model used in MFRS 139. The expected credit loss model is
forward-looking and eliminates the need for a trigger event to have occurred before credit losses
are recognised.
The Group has reviewed its financial assets and liabilities and is expecting the following impact
from the adoption of the new standard on 1 January 2018:
- The financial assets held by the Group are debt instruments currently classified as loans
and receivables and measured at amortised cost which meet the conditions for classification
at amortised cost under MFRS 9.
Accordingly, the Group does not expect the new guidance to affect the classification and
measurement of these financial assets.

Notes to the
• MFRS 9 “Financial Instruments“ (continued)
- There will be no impact on the Group’s accounting for financial liabilities, as the new requirements
only affect the accounting for financial liabilities that are designated at fair value through profit
or loss and the Group does not have any such liabilities. The derecognition rules have been
transferred from MFRS 139 “Financial Instruments: Recognition and Measurement“ and have not
been changed.
- The new impairment model requires the recognition of impairment provisions based on
expected credit losses rather than incurred credit losses as is the case under MFRS 139. It applies
to financial assets classified at amortised cost, debt instruments measured at fair value after
other comprehensive income, contract assets under MFRS 15 “Revenue from Contracts with
Customers”, lease receivables, loan commitments and certain financial guarantee contracts.
This new impairment model may have an impact on Group’s financial results given the Group’s
significant financial assets balances at each reporting date.
- The new standard also introduces expanded disclosure requirements and changes in
presentation. These are expected to change the nature and extent of the Group’s disclosures
about its financial instruments particularly in the year of the adoption of the new standard.
The Group will apply the new rules retrospectively from 1 January 2018, with the practical
expedients permitted under the standard. Comparatives for 2017 will not be restated.
• Amendments to MFRS 2 “Share-based Payment“ (effective from 1 January 2018) deal with
classification and measurement of share-based payment transactions. The amendments provides
specific guidance on how to account for the following situations:
(a) The effect of vesting and non-vesting conditions on the measurement of cash-settled share-
based payments;
(b) Share-based payment transactions with a net settlement feature for withholding tax
obligations; and
(c) A modification to the terms and conditions of a share-based payment that changes the
classification of the transaction from cash-settled to equity-settled.
The Group and the Company is assessing the impact of the above amendments to published
standard on the financial statements of the Group and of the Company in the year of initial
adoption.
132
Notes to the
• IC Interpretation 22 “Foreign Currency Transactions and Advance Consideration“ (effective from

1 January 2018) applies when an entity recognises a non-monetary asset or non-monetary liability
arising from the payment or receipt of advance consideration. MFRS 121 requires an entity to use
the exchange rate at the “date of the transaction“ to record foreign currency transactions.
IC Interpretation 22 provides guidance how to determine “the date of transaction“ when a single
payment/receipt is made, as well as for situations where multiple payments/receipts are made.
The date of transaction is the date when the payment or receipt of advance consideration gives
rise to the non-monetary asset or non-monetary liability when the entity is no longer exposed to
foreign exchange risk. If there are multiple payments or receipts in advance, the entity should
determine the date of the transaction for each payment or receipt.
An entity has the option to apply IC Interpretation 22 retrospectively or prospectively.
The Group and the Company is assessing the impact of the above IC Interpretation to published
standard on the financial statements of the Group and of the Company in the year of initial
adoption.
(ii) Financial year beginning on/after 1 January 2019
• MFRS 16 “Leases“ (effective from 1 January 2019) supersedes MFRS 117 “Leases“ and the related
interpretations. Under MFRS 16, a lease is a contract (or part of a contract) that conveys the right
to control the use of an identified asset for a period of time in exchange for consideration.
MFRS 16 eliminates the classification of leases by the lessee as either finance leases (on balance
sheet) or operating leases (off balance sheet). MFRS 16 requires a lessee to recognise a “right-of-
use” of the underlying asset and a lease liability reflecting future lease payments for most leases.
The right-of-use asset is depreciated in accordance with the principle in MFRS 116 “Property, Plant
and Equipment“ and the lease liability is accreted over time with interest expense recognised in
the income statement.
For lessors, MFRS 16 retains most of the requirement in MFRS 117. Lessors continue to classify all
leases as either operating leases or finance leases and account for them differently.
The Group and the Company is assessing the impact of the above new standard on the financial
statements of the Group and of the Company in the year of initial adoption.

Notes to the
(ii) Financial year beginning on/after 1 January 2019 (continued)
• Annual improvements to MFRSs 2015 - 2017 Cycle (amendments to MFRS 3 “Business

Combinations“, MFRS 112 “Income Taxes“ and MFRS 123 “Borrowing Costs“) effective from 1
January 2019.
The Group and the Company is assessing the impact of the above amendments to published
standards on the financial statements of the Group and of the Company in the year of initial
adoption.
(b) Consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the relevant activities
of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity interests issued by the Group. The
consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement and fair value of any pre-existing equity interest in the subsidiary. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises
any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or
at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable
net assets.
The Group applies the acquisition method to account for business combination under common control.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the carrying value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date, any gains or losses
arising from such remeasurement are recognised in profit or loss.
134
Notes to the
(b) Consolidation (continued)
(i) Subsidiaries (continued)
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset
or liability is recognised in accordance with MFRS 139 in profit or loss. Contingent consideration that is
classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair
value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this
consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is
recognised in the profit or loss.
Inter-company transactions, balances and unrealised gains on transactions between group companies
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
(ii) Changes in ownership interests in subsidiaries without change of control
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
income statement, statement of comprehensive income, statement of changes in equity and statement
of financial position respectively.
Transactions with non-controlling interests that do not result in loss of control are accounted for as
transactions with equity owners of the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative
interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling
interests and any consideration paid or received is recognised in equity attributable to owners of the
Group.
(iii) Disposal of subsidiaries
When the Group ceases to consolidate because of loss of control, any retained interest in the entity is
remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised
in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for
the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit or loss.

Notes to the
(iii) Disposal of subsidiaries (continued)
Gain or loss on the disposal of subsidiaries includes the carrying amount of goodwill relating to the
subsidiaries sold.
(iv) Associates
Associates are all entities in which the Group has significant influence but not control or joint control,
generally accompanying a shareholding of between 20% and 50% of the voting rights. Significant
influence is the power to participate in the financial and operating policy decisions of the associates but
not the power to exercise control over those policies. Investments in associates are accounted for using
the equity method of accounting. Under the equity method, the investment in an associate is initially
recognised at cost, and adjusted thereafter to recognise the Group’s share of the post-acquisition profits
or losses of the associate in profit or loss, and the Group’s share of movements in other comprehensive
income of the associate in other comprehensive income. Dividend received or receivable from an
associate are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an associate equals or exceeds its interests in the associate, including
any long-term interests that, in substance, form part of the Group’s net investment in the associate, the
Group does not recognise further losses, unless it has incurred legal or constructive obligations or made
payments on behalf of the associate. The Group’s investment in associate includes goodwill identified on
acquisition.
The Group determines at each reporting date whether there is any objective evidence that the investment
in associates is impaired. If this is the case, the Group calculates the amount of impairment as the
difference between the recoverable amount of the associate and its carrying value and recognises the
amount adjacent to ‘share of profit/(loss) of an associate’ in the income statement.
Profit and losses resulting from upstream and downstream transactions of the Group and its associate
are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests
in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of
an impairment of the asset transferred. Accounting policies of associates have been changed where
necessary to ensure consistency with the policies adopted by the Group.
When the Group ceases to equity account its associate because of a loss of significant influence, any
retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised
in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently
accounting for the retained interest as a financial asset. In addition, any amount previously recognised
in other comprehensive income in respect of the entity is accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
136
Notes to the
(iv) Associates (continued)
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss
where appropriate.
Dilution gains and losses arising in investments in associates are recognised in the income statement.
(c) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board of Directors that makes
strategic decisions.
(d) Foreign currencies
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (“the functional currency”). The financial
statements are presented in Ringgit Malaysia, which is the Company’s functional and presentation
currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
(iii) Group companies
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
- assets and liabilities for each statement of financial position presented are translated at the closing
rate at the date of that statement of financial position;

Notes to the
(d) Foreign currencies (continued)
(iii) Group companies (continued)
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows: (continued)
- income and expenses for each income statement and statement of comprehensive income
presented are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rate prevailing on the transaction dates, in which
case income and expenses are translated at the rate on the dates of the transactions); and
- all resulting exchange differences are recognised as a separate component of other comprehensive
income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets
and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are
recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign
entities are recognised in other comprehensive income.
On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation,
or a disposal involving loss of significant influence over an associate that includes a foreign operation),
all of the exchange differences relating to that foreign operation recognised in other comprehensive
income and accumulated in the separate component of equity are reclassified to profit or loss, as part
of the gain and loss on disposal. In the case of a partial disposal that does not result in the Group
losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulated
exchange differences are re-attributed to non-controlling interests and are not recognised in profit or
loss. For all other partial disposals (that is, reductions in the Group’s ownership interest in associates), the
proportionate share of the accumulated exchange difference is reclassified to profit or loss.
(e) Property, plant and equipment
All property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment
losses except for freehold land and capital work-in-progress which are not depreciated. The cost of an item
of property, plant and equipment initially recognised includes its purchase price and any cost that is directly
attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the
manner intended by the management, net of the amount of goods and services tax (“GST”), except where the
amount of GST incurred is not recoverable from the government.
When the amount of GST incurred is not recoverable from the government, the GST is recognised as part of the
cost of acquisition of the property, plant and equipment. Cost also includes borrowing costs that are directly
attributable to the acquisition, construction or production of a qualifying asset (see accounting policy Note 2(o)
on borrowings and borrowing costs).
138
Notes to the
(e) Property, plant and equipment (continued)
Subsequent costs are included in the assets’ carrying amounts or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying amount of the replaced part is de-recognised. All other
repairs and maintenance are recognised as expenses in profit or loss during the financial period in which they
are incurred.
Gains or losses on disposals are determined by comparing proceeds with carrying amounts and are included in
profit or loss.
Freehold land is not depreciated as it has an infinite life. Leasehold land is amortised in equal instalments over
the period of the respective leases that ranges from 32 to 99 years. Depreciation on other property, plant and
equipment is calculated using the straight-line method to allocate the cost of the assets to their residual values
over their estimated useful lives, summarised as follows:
Freehold buildings 2% - 5%
Leasehold buildings 2% - 5%
Motor vehicles 20% - 25%
Plant and machinery 5% - 20%
Furniture and fittings 10% - 25%
Renovation 5% - 25%
Equipment 5% - 25%
Depreciation on capital work-in-progress commences when the assets are ready for their intended use.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting date. The effects of any revision of the residual values and useful lives are included in profit or loss for
the financial year in which the changes arise.
At the end of the reporting period, the Group assesses whether there is any indication of impairment. If such
indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable.
A write down is made if the carrying amount exceeds the recoverable amount. See accounting policy Note 2(j)
on impairment of non-financial assets.
(f) Prepaid lease payments
Payment for rights to use land over a predetermined period is classified as prepaid lease payments that is
accounted for as an operating lease and is stated at cost less accumulated amortisation and accumulated
impairment losses.
Prepaid lease payments are amortised on a straight-line basis over the lease period ranging from 20 to 33 years.

Notes to the
(g) Investments in subsidiaries and associate in separate financial statements
In the Company’s separate financial statements, investments in subsidiaries and associate are carried at cost
less accumulated impairment losses. Where an indication of impairment exists, the carrying amount of the
investment is assessed and written down immediately to its recoverable amount. See accounting policy Note
2(j) on impairment of non-financial assets.
On disposal of an investment, the difference between disposal proceed and its carrying amount of the investment
is recognised in profit or loss.
The amounts due from subsidiaries of which the Company does not expect repayment in the foreseeable future
are considered as part of the Company’s investments in the subsidiaries.
(h) Intangible assets
(i) Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and business combination and represents
the excess of the consideration transferred over the Group’s interest in net fair value of the net identifiable
assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest
in the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each
of the cash generating units (“CGUs”), or groups of CGUs that is expected to benefit from the synergies
of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest
level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is
monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate that it might be impaired, and carried at cost less accumulated impairment losses.
The carrying value of goodwill is compared to the recoverable amount, which is the higher of value-in-use
and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is
not subsequently reversed. See accounting policy Note 2(j) on impairment of non-financial assets.
(ii) Software
Acquired software is capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. This cost is amortised over its estimated useful life of 10 to 15 years.
140
Notes to the
(h) Intangible assets (continued)
(iii) Rights to supply
Expenses incurred in providing and supplying to the Government of Malaysia certain hardware and
software, being part and parcel of the ordinary contractual obligations under the Concession Agreement,
are capitalised and carried at cost less accumulated amortisation and any accumulated impairment losses.
The expenses are amortised over the concession period of 20 years. The title of the said hardware and
software vests with the Government of Malaysia.
(iv) Manufacturing licences
Manufacturing licences acquired in a business combination is recognised at fair value at the acquisition
date. The manufacturing licences represent the rights to manufacture pharmaceutical products in
Indonesia and Malaysia. The licences have a finite useful life and are carried at cost less accumulated
amortisation and accumulated impairment losses. Amortisation is calculated using the straight-line
method to allocate the cost of pharmacy manufacturing licence over a period ranging from 6 years to 9
years.
(v) Trade name
Trade name acquired in a business combination is recognised at fair value at the acquisition date. Trade
name represents the in-house branded generic products and has a finite useful life and is carried at cost
less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the
straight-line method to allocate the cost of trade name over a period of 15 years.
(vi) Intellectual property
Intellectual property acquired in a business combination is recognised at fair value at the acquisition
date. Intellectual property represents the patent rights for stevia formula and has a finite useful life and
is carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is
calculated using the straight-line method to allocate the cost over a period of 15 years.
(i) Research and development
Research expenditure is recognised as an expense when incurred. Costs incurred on development projects
(relating to the design and testing of new and improved products) are recognised as intangible assets when the
following criteria are fulfilled:
(i) it is technically feasible to complete the intangible asset so that it will be available for use or sale;
(ii) management intends to complete the intangible asset and use or sell it;
(iii) there is an ability to use or sell the intangible asset;
(iv) it can be demonstrated how the intangible asset will generate probable future economic benefits;
(v) adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset are available; and
(vi) the expenditure attributable to the intangible asset during its development can be reliably measured.

Notes to the
(i) Research and development (continued)
Other development expenditures that do not meet these criteria are recognised as an expense when incurred.
Development costs previously recognised as an expense are not recognised as an asset in subsequent period.
Capitalised development costs recognised as intangible assets are amortised from the point at which the asset
is ready for use on a straight-line basis over its useful life, not exceeding 15 years.
Development costs work-in-progress is tested for impairment annually, in accordance with MFRS 136 “Impairment
of Assets“. See accounting policy Note 2(j) on impairment of non-financial assets.
(j) Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill or intangible assets not ready to use, are not
subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the
asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs
of disposal and value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows which are largely independent of the cash inflows from
other assets or group of assets (cash generating units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at each reporting date.
The impairment loss is charged to profit or loss. Impairment losses on goodwill are not reversed. In respect of
other assets, any subsequent increase in recoverable amount is recognised in profit or loss.
(k) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted
average method.
Cost includes the actual cost of materials and incidental cost incurred in bringing the inventories to store. As
for in-house manufactured finished goods and work-in-progress, labour and appropriate production overheads
(based on normal operating capacity) are also included.
Net realisable value is the estimated selling price in the ordinary course of business, less the cost of completion
and the estimated costs necessary to make the sale.
142
Notes to the
(l) Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course
of business. Other receivables generally arise from transactions outside the usual operating activities of the
Group. If collection is expected in one year or less (or in the normal operating cycle of the business, if longer),
they are classified as current assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value, with the amount of goods and services tax
(“GST”) included. The net amount of GST recoverable from the government is presented as GST receivables in
Note 19.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
which are recoverable from, or payable to, the government are classified as operating cash flows.
After recognition, trade and other receivables are subsequently measured at amortised cost using the effective
interest method, less provision for impairment. See accounting policy Note 2(w) on impairment of financial
assets.
(m) Cash and cash equivalents
For the purpose of the statements of cash flows, cash and cash equivalents comprise cash in hand, deposits
held at call with financial institutions, other short-term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of cash which are subject to an insignificant risk of
changes in value, and bank overdrafts. Bank overdrafts are included within borrowings in current liabilities in the
statement of financial position.
(n) Share capital
(i) Classification
Ordinary shares are classified as equity.
(ii) Share issue costs
Incremental costs directly attributable to the issue of new shares or options are deducted against equity.
(iii) Dividends distribution
Liability is recognised for the amount of any dividend declared, being appropriately authorised and no
longer at the discretion of the Group, on or before the end of the reporting period but not distributed at
the end of the reporting period.

Notes to the
(n) Share capital (continued)
(iv) Basic earnings per share
Basic earnings per share is calculated by dividing:

- the profit attributable to owners of the Company, excluding any costs of servicing equity other
than ordinary shares
- by the weighted average number of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued during the year and excluding treasury shares.
(v) Diluted earnings per share
Diluted earnings per share adjust the figures in the determination of basic earnings per share to take into
account:
- the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares; and
- the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
(o) Borrowings and borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
carried at amortised cost; any difference between initial recognised amount and the redemption value is
recognised in profit or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-
down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn
down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility
to which it relates.
Borrowings are removed from the statement of financial position when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has
been extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in profit or loss.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the end of the reporting period.
General and specific borrowing costs directly attributable to the acquisition, construction or production
of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready
for their intended use or sale.
144
Notes to the
(o) Borrowings and borrowing costs (continued)
Investment income earned on temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(p) Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Trade payables are classified as current liabilities if payment is due within one year
or less (or in the normal operating cycle of the business, if longer). If not, they are presented as non-current
liabilities.
Trade payables are recognised initially at fair value, with the amount of goods and services tax (“GST”) included.
The net amount of GST payable to the government is presented in other payables.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
which are recoverable from, or payable to, the government are classified as operating cash flows.
Trade payables are subsequently measured at amortised cost using the effective interest method.
(q) Employee benefits
(i) Short term employee benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the period
in which the associated services are rendered by employees of the Group and the Company. Short
term accumulating compensated absences such as paid annual leave are recognised when services are
rendered by employees that increase their entitlement to future compensated absences, and short term
non-accumulating compensated absences such as sick leave are recognised when the absences occur.
(ii) Defined contribution plan
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a
separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if
the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the
current and prior years.
The Group’s contributions to defined contribution plans, the national defined contribution plan, the
Employees’ Provident Fund are charged to profit or loss in the financial year to which they relate. Once
the contributions have been paid, the Group has no further payment obligations.

Notes to the
(q) Employee benefits (continued)
(iii) Defined benefit plan
The defined benefit liability recognised in the statement of financial position is the present value of the
defined benefit obligation at the end of the reporting period, together with adjustments for actuarial
gains/losses. The Group determines the present value of the defined benefit obligation with sufficient
regularity such that the amounts recognised in the financial statements do not differ materially from the
amounts that would be determined at the reporting period.
The defined benefit obligation, calculated using the projected credit unit method, is determined by
independent actuaries, by discounting the estimated future cash outflows using market yields at the
reporting date on government securities which have currency and term to maturity approximating the
terms of the related liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions
are charged or credited to equity in other comprehensive income in the period in which they arise. The
actuarial gains and losses are not subsequently reclassified to profit or loss in subsequent period.
The current service cost of the defined benefit plan reflects the increase in the defined benefit obligation
resulting from employee service in the current year. It is recognised in the profit or loss in employee
benefit expense, except where included in the cost of an asset.
(iv) Option Plan
The Group and the Company operates an equity-settled, share-based compensation plan under which
the entity receives services from employees as consideration for equity instruments (options) of the Group.
The fair value of the options granted in exchange for the services of the employees are recognised as
employee benefit expense with a corresponding increase to share reserve within equity. The total amount
to be expensed is determined by reference to the fair value of the options granted:
- including any market performance conditions (for example, an entity’s share price);
- excluding the impact of any service and non-market performance vesting conditions (for example,
profitability, sales growth targets and remaining an employee of the entity over a specified time
period); and
- including the impact of any non-vesting conditions (for example, the requirement for the employees
to hold shares for a specific period of time).
Non-market vesting conditions and service conditions are included in assumptions about the number of
options that are expected to vest.
The total expenses is recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of the reporting period, the Group revises its
estimates of the number of options that are expected to vest based on the non-market vesting conditions
and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or
loss, with a corresponding adjustment to share reserve in equity.
146
Notes to the
(q) Employee benefits (continued)
(iv) Option Plan (continued)
In circumstances where employees provide services in advanced of the grant date fair value is estimated
for the purposes of recognising the expense during the period between service commencement period
and grant date.
When the options are exercised, the Company issues new shares. The proceeds receives net of any
directly attributable transaction costs are credited to share capital when the options are exercised. When
options are not exercised and lapsed, the share option reserve is transferred to retained earnings.
(v) Deferred shares – Long Term Incentive Plan
The fair value of deferred shares granted to employees for nil consideration under the Long Term Incentive
Plan is recognised as an expense over the relevant service period, being the year to which the bonus
relates and the vesting period of the shares. The fair value is measured at the grant date of the shares and
is recognised in equity in the share reserve. The number of share expected to vest is estimated based
on the non-market vesting conditions. The estimates are revised at the end of each reporting period and
adjustment are recognised in profit and loss and the share reserve.
When share are forfeited due to a failure by the employee to satisfy the service conditions, any expenses
previously recognised in relation to such shares are reversed effective from the date of the forfeiture.
In its separate financial statements of the Company, the shares granted by the Company over its equity
instruments to the employees of subsidiary in the Group is treated as a capital contribution to the
subsidiary. The fair value of shares granted to employees of the subsidiary in exchange for the services of
the employees to the subsidiary are recognised as investment in subsidiary, with a corresponding credit
to equity of the Company.
(r) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past
events, when it is probable that an outflow of resources will be required to settle the obligation; and the amount
can be reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood
of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditures expected to
be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the obligation. The increase in the provision due to passage of time is
recognised as finance cost.

Notes to the
(s) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and
services in the ordinary course of the Group’s activities. Revenue is shown net of goods and services tax, returns,
rebates and discounts and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities
as described below. The Group bases its estimates on historical results, taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement.
(i) Sale of goods and services
Revenue relating to sale of goods is recognised upon the transfer of risks and rewards of ownership of the
goods net of returns and discounts. Revenue from services is recognised upon services rendered.
(ii) Contracts
Revenue from system and equipment design, planning, installation and commissioning contracts is
recognised based on the percentage of completion method; the stage of completion is measured on the
proportion of contract costs incurred for work performed to date over the estimated total contract costs.
When the outcome of a contract cannot be estimated reliably, contract revenue is recognised to the
extent of contract costs incurred that is probable of recovery. Contract costs are recognised as expenses
in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenues, the expected loss is
recognised as an expense immediately. Where costs incurred on such contracts plus recognised profits
(less recognised losses) exceed progress billings, the balance is shown as amounts due from customers
on contracts. Where progress billings exceed costs incurred plus recognised profits (less recognised
losses), the balance is shown as amounts due to customers on contracts.
(iii) Interest income
Interest income is recognised using the effective interest method. When a loan and receivable is impaired,
the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow
discounted at the original effective interest rate of the instrument, and continues unwinding the discount
as interest income. Interest income on impaired loan and receivables are recognised using the original
effective interest rate.
148
Notes to the
(s) Revenue recognition (continued)
(iv) Dividend income
Dividend income is included in the income statement when the right to receive payment is established
and no significant uncertainty exists as regards to its receipt. Interim dividends from subsidiaries are
recognised when they are declared and final dividends when they are approved by shareholders in
general meeting.
(t) Current and deferred income taxes
The tax expense for the period comprises current and deferred income tax. Tax is recognised in profit or loss,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In
this case, the tax is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the reporting date in the countries where the Group’s subsidiaries and associate operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities. This liability is measured using the single best estimate of
the most likely outcome.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the
amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements.
However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting nor
taxable profit or loss.
Deferred income tax is determined using tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, unused tax losses or unused tax credits can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associate,
except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled
by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Generally, the Group is unable to control the reversal of the temporary difference for associate. Only where
there is an agreement in place that gives the Group the ability to control the reversal of the temporary difference
a deferred tax liability is not recognised.

Notes to the
(t) Current and deferred income taxes (continued)
Deferred and income tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where
there is an intention to settle the balances on a net basis.
(u) Financial assets
Classification
The Group classifies its financial assets as loans and receivables. The classification depends on the purpose for
which the financial assets were acquired. Management determines the classification of its financial assets at
initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They are included in current assets, except for maturities greater than 12 months
after the end of the reporting date. These are classified as non-current assets.
Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Group
and the Company commits to purchase or sell the asset.
Financial assets are initially recognised at fair value plus transaction costs that are directly attributable to the
acquisition of the financial asset for all financial assets not carried at fair value through profit or loss. Loans and
receivables are subsequently carried at amortised cost using the effective interest method.
De-recognition
Financial assets are de-recognised when the rights to receive cash flows from the investments have expired or
have been transferred and the Group has transferred substantially all risks and rewards of ownership.
(v) Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial
position when there is a legally enforceable right to offset the recognised amounts and there is an intention to
settle on a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right must
not be contingent on future events and must be enforceable in the normal course of business and in the event
of default, insolvency or bankruptcy.
150
Notes to the
(w) Impairment of financial assets
Assets carried at amortised cost
The Group and the Company assesses at the end of each reporting period whether there is objective evidence
that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is
impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one
or more events that occurred after the initial recognition of the asset (a “loss event“) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that
can be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant
financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter
bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable
decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate
with defaults.
The amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at
the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount
of the loss is recognised in profit or loss. If ‘loans and receivables’ has a variable interest rate, the discount rate
for measuring any impairment loss is the current effective interest rate determined under the contract. As a
practical expedient, the Group and the Company may measure impairment on the basis of an instrument’s fair
value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s
credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss.
When an asset is uncollectible, it is written off against the related allowance account. Such assets are written off
after all the necessary procedures have been completed and the amount of the loss has been determined.
(x) Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into and
meet the definition of a financial liability.
Financial liabilities are recognised in the statement of financial position when, and only when, the Group
becomes a party to the contractual provisions of the financial instrument. Financial liabilities are classified as
either financial liabilities at fair value through profit or loss or other financial liabilities.
The Group has not designated any financial liabilities at fair value through profit or loss.

Notes to the
(x) Financial liabilities (continued)
Other financial liabilities are recognised initially at fair value, net of directly attributable transaction costs and
subsequently measured at amortised cost using the effective interest method.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liabilities for at least twelve months after the reporting date.
A financial liability is derecognised when the obligation under the liability is extinguished and the resulting gains
or losses are recognised in profit or loss.
(y) Deferred income
(i) RoyalePharma cash vouchers
RoyalePharma cash vouchers issued are recognised at their fair values and presented as deferred income
within current liabilities. It is credited to the profit or loss upon redemption or expiry of the vouchers.
(ii) Government grants
Grants from government are recognised at their fair value where there is a reasonable assurance that the
grant will be received and the Group will comply with all attached conditions. Government grants relating
to costs are recognised in the profit or loss over the period necessary to match the related costs for which
the grants are intended to compensate.
(z) Contingent assets and liabilities
The Group does not recognise contingent assets and liabilities, but discloses its existence in the financial
statements. A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of
the Group and the Company or a present obligation that is not recognised because it is not probable that an
outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely
rare case where there is a liability that cannot be recognised because it cannot be measured reliably. However,
contingent liabilities do not include financial guarantee contracts. A contingent asset is a possible asset that
arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but
discloses its existence where inflows of economic benefits are probable, but not virtually certain.
(aa) Leases
A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments,
the right to use an asset for an agreed period of time.
152
Notes to the
(aa) Leases (continued)
Accounting by lessee
(i) Finance leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at
the lower of the fair value of the leased property and the present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate
of interest on the remaining balance of the liability. The corresponding rental obligations, net of finance
charges, are included in other long-term payables. The interest element of the finance cost is charged to
profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The property, plant and equipment acquired under finance leases
is depreciated over the shorter of the useful life of the asset and the lease term if there is no reasonable
certainty that the Group will obtain ownership at the end of the lease term.
Initial direct costs incurred by the Group in negotiating and arranging finance leases are added to the
carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term
on the same basis as the lease expense.
(ii) Operating leases
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to profit or loss on the straight-line basis over the lease period.
(ab) Zakat
The Group recognised its obligations towards the payment of zakat on business in the profit or loss. Zakat
payment is an option and recognised as and when the Group has a zakat obligation as a result of a zakat
assessment. The amount of zakat expense shall be assessed when a company has been in operation for at least
12 months, i.e. for the period known as “haul”.
Zakat rates enacted or substantively enacted by the reporting date are used to determine the zakat expense.
The rate of zakat on business, as determined by National Fatwa Council for is 2.5% of the zakat base. The zakat
base of the Group is determined based on the profit after tax of eligible companies within the Group after
deducting certain non-operating income and expenses. Zakat on business is calculated by multiplying the zakat
rate with zakat base. The amount of zakat assessed is recognised as an expense in the year in which it is incurred.

Notes to the
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continuously evaluated by the Directors and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
Impairment of property, plant and equipment and capitalised development costs
The Group assesses whether there is any indication that property, plant and equipment and capitalised development
costs are impaired at the end of each reporting date. Impairment is measured by comparing the carrying amount of
an asset with its recoverable amount. Recoverable amount is measured at the higher of the fair value less cost to sell
for that asset and its value-in-use. The value-in-use is the net present value of the projected future cash flows derived
from that asset discounted at an appropriate discount rate.
The value-in-use calculations apply a discounted cash flow model using cash flow projections covering a fifteen-
year period that reflects the industry and product lifecycle from development, stability testing, product registration
and commercialisation. The sales volume used in the value-in-use calculations is based on the respective product
lifecycle and new products under development. The key assumptions used, results and conclusion of the impairment
assessment are stated in Note 12.
Impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy in
Note 2(j) on impairment of non-financial assets. The recoverable amount of cash-generating unit has been determined
based on value-in-use calculations. These calculations require use of estimates as set out in Note 16.
Recognition of deferred tax assets by the Group’s small volume injectable subsidiary
As at 31 December 2017, the Group has deferred tax assets amounted to RM13.5 million relating to the small volume
injectable subsidiary. The deferred tax assets arose from unutilised tax losses, unabsorbed capital allowances and
deductible temporary differences. Deferred tax assets was recognised to the extent that it is probable that future
taxable profits will be available against which the deductible temporary differences, unutilised tax losses or unabsorbed
capital allowances can be utilised.
The future taxable profit projections are determined based on the Group’s estimated future financial performance.
The key assumptions such as sales volume growth rates and margins used in determining the future taxable profit
projections of the small volume injectable subsidiary are set out in Note 12.
154
Notes to the
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
Recoverability of cost of investment in a small volume injectable subsidiary
The Group assesses whether there is any indication that the cost of investment in a small volume injectable subsidiary
is impaired at the end of each reporting date. Impairment is measured by comparing the carrying amount of an asset
with its recoverable amount. Recoverable amount is measured at the higher of the fair value less cost to sell for that
asset and its value-in-use. The value-in-use is the net present value of the projected future cash flows derived from the
subsidiary discounted at an appropriate discount rate.
Projected future cash flows are based on the Company’s estimates calculated based on the operating results, approved
business plans, sector and industry trends as well as future economic conditions, changes in technology and other available
information. The key assumptions used, results and conclusion of the impairment assessment are stated in Note 14.
4. REVENUE
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Revenue consists of:
Contracts 33 28,258 63,248 - -

Sale of goods 2,295,702 2,125,774 - -
Dividend income - - 104,000 94,500
Management fees - - 15,394 10,576
2,323,960 2,189,022 119,394 105,076
5. COST OF SALES
Group
Note 2017 2016
RM’000 RM’000
Cost of sales consists of:

Amortisation of intangible assets 16 14,880 11,773
Depreciation of property, plant and equipment 12 15,743 17,962
Employee benefit expenses 8 35,993 38,553
Changes in inventories of finished goods 1,720,952 1,517,233
Impairment of slow moving and obsolete inventories 1,518 1,806
Inventories written off 1,598 534
Inventories written (back)/down (784) 1,043
Raw materials and consumables used 125,967 150,028
Selling and distribution costs 41,330 35,269
Others 7,658 8,930
Cost of inventories sold 1,964,855 1,783,131

Contracts costs 33 23,943 62,644
1,988,798 1,845,775

Notes to the
6. FINANCE COSTS
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Interest expenses on:
- bankers’ acceptances 10,037 9,336 - -

- revolving credits 10,595 13,927 2,681 4,117
- foreign time loan 8,142 10,440 - -
28,774 33,703 2,681 4,117
7. PROFIT BEFORE ZAKAT AND TAXATION
(a) The following expenses (excluding finance costs) have been charged in arriving at profit before zakat and
taxation:
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Amortisation of intangible
assets 16 17,928 14,508 - -
Amortisation of prepaid
lease payments 13 140 133 - -
Auditors’ remuneration:
(i) statutory audit fees
- PricewaterhouseCoopers PLT,
Malaysia 539 528 181 192
- firms other than member
firms of
PricewaterhouseCoopers
International Limited 242 192 - -
(ii) other non-audit fees 274 6 210 -
Bad debts written off 16 284 - -
Directors’ fees:
- Executive 8 30 30 - -
- Non-executive 646 646 532 532
Directors’ other allowances
and emoluments 49 183 37 122
Employee benefit expenses 169,046 168,350 16,296 12,614
Foreign exchange losses 2,627 968 - -
Impairment loss on:
- amounts due from
subsidiaries 20(a) - - - 2,993
- trade receivables 18 570 760 - -
Impact of discounting effect
on financial instruments 2,955 - 2,955 -
156
Notes to the
7. PROFIT BEFORE ZAKAT AND TAXATION (CONTINUED)
(a) The following expenses (excluding finance costs) have been charged in arriving at profit before zakat and
taxation: (continued)
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Property, plant and

equipment:
- depreciation 12 28,454 31,291 - -
- written off 12 300 56 - -
Loss on disposal of property,
plant and equipment 73 - - -
Impairment of slow moving
and obsolete inventories 5,255 6,782 - -
Management fees
paid/payable to immediate
holding company 289 306 127 161
Rental of premises 8,810 10,403 5 6
Rental of equipment 3,337 3,803 58 64
Research and development
expenses 1,797 1,697 - -
(b) Other income
Compensation awarded 8,010 - - -

Gain on disposal of property,
plant and equipment 26 116 - -
Rental income 14 18 - -
Utilisation of government grant - 154 - -
Foreign exchange gains 570 843 17 218
Others 386 181 22 4
9,006 1,312 39 222

Notes to the
8. EMPLOYEE BENEFIT EXPENSES
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Salaries and bonuses 113,011 111,888 8,032 4,510

Defined contribution plan 13,265 12,496 1,210 634
Defined benefit plan 32 1,693 1,422 - -
Share-based expenses:
- Option plan 3,785 3,743 3,785 3,743
- Long term incentive plan 2,224 2,826 (225) 113
Other short-term employee benefits 32,224 33,065 651 707
166,202 165,440 13,453 9,707
Executive Director’s remuneration:

- Salaries and bonuses 1,598 1,625 1,598 1,625
- Fee 30 30 - -
- Defined contribution plan 249 216 249 216
- Share-based expenses:
• Option plan 546 535 546 535
• Long term incentive plan 390 471 390 471
- Other short-term employee benefits 61 63 60 60
2,874 2,940 2,843 2,907
Total 169,076 168,380 16,296 12,614
Employee benefit expenses

included in:
- cost of sales 5 35,993 38,553 - -
- administrative expenses 133,053 129,797 16,296 12,614
Executive Director’s fee 7(a) 30 30 - -
169,076 168,380 16,296 12,614
The estimated monetary value of benefits provided to a Director of the Company during the financial year amounted
to RM37,200 (2016: RM37,200).
158
Notes to the
9. TAXATION
Group Company
Note 2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Current tax:
- Malaysian income tax 10,577 16,905 1 -
- foreign income tax 1,882 1,134 - -
- under/(over) provision in prior years 5,012 (3,064) 1 -
17,471 14,975 2 -
Deferred taxation:
- origination and reversal of
temporary differences 31 (94) 10,933 - -
Tax expense 17,377 25,908 2 -
A reconciliation of income tax expense applicable to profit before taxation after zakat at the statutory income tax rate
to income tax expense at the effective income tax rate of the Group and of the Company is as follows:
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Profit before taxation after zakat 72,464 71,767 91,423 78,601
Statutory income tax at rate of 24%

(2016: 24%) 17,391 17,224 21,941 18,864
Different tax rates in other country (1,021) - - -
Tax effects of:

Expenses not deductible for tax purpose 8,458 10,454 2,494 3,833
Expenses subject to double deduction (4,504) (4,052) - -
Income not subject to tax (82) (269) (24,991) (22,680)
Origination of deductible temporary
differences not recognised in current
year - 5,615 557 -
Utilisation of previously unrecognised
deductible temporary differences (7,877) - - (17)
Under/(over) provision of tax in prior years 5,012 (3,064) 1 -
Tax expense 17,377 25,908 2 -

Notes to the
10. EARNINGS PER SHARE
(a) Basic earnings per share
Basic earnings per share of the Group is calculated by dividing the profit attributable to ordinary equity holders
of the Company for the financial year by the average number of ordinary shares in issue during the financial year.
Group
2017 2016
Net profit attributable to owners of the Company (RM’000) 53,823 45,599
Weighted average number of ordinary shares in issue (’000) 259,551 259,107

Basic earnings per share (sen) 20.74 17.60
(b) Diluted earnings per share
For the diluted earnings per share calculation, the average number of ordinary shares in issue is adjusted to
assume the full conversion of all dilutive potential ordinary shares. The dilutive potential ordinary shares for the
Group are Option Plan and Long Term Incentive Plan (“LTIP”).
For the shares granted under the Option Plan, a calculation is done to determine the number of shares that
could have been acquired at fair value (determined as the average share price of the Company’s shares) based
on the monetary value of the subscription rights attached to the outstanding shares under the Option Plan.
The number of share calculated as above is compared with the number of shares that would have been issued
assuming the exercise of the share under the Option Plan. The difference is added to the denominator as an
issue of ordinary shares for no consideration. This calculation serves to determine the “bonus” element in the
ordinary share outstanding for the purpose of computing the dilution. No adjustment is made to profit for the
financial year for the shares granted under the Option Plan calculation.
For the shares granted under the LTIP, the outstanding number of shares granted to eligible employees is
added to the denominator as an issue of ordinary shares for no consideration. No adjustment is made to profit
for the financial year for the shares granted under LTIP calculation.
160
Notes to the
10. EARNINGS PER SHARE (CONTINUED)
(b) Diluted earnings per share (continued)

Group
2017 2016
Net profit attributable to owners of the Company (RM’000) 53,823 45,599

Assumed shares issued from the exercise of Option
Plan (‘000) - 209
Assumed shares issued under Long Term Incentive Plan (’000) 606 582
Diluted earnings per share (sen) 20.69 17.54
11. DIVIDENDS
Dividends recognised in respect of the current financial year are as follows:
Company
2017 2016
Dividend Amount of Dividend Amount of
per share dividend per share dividend
sen RM’000 sen RM’000
In respect of the financial year

ended 31 December 2017:
- First interim single tier dividend 4.00 10,375 - -
- Second interim single tier dividend 4.00 10,393 - -
- Third interim single tier dividend 5.00 12,991 - -

- First interim single tier dividend - - 4.00 10,355
- Second interim single tier dividend - - 5.00 12,969
- Third interim single tier dividend - - 4.00 10,375
- Fourth interim single tier dividend 3.00 7,781 - -

- Fourth interim single tier dividend - - 7.00 18,122
16.00 41,540 20.00 51,821

Notes to the
11. DIVIDENDS (CONTINUED)
Subsequent to the end of the current financial year, the Directors have declared a fourth interim single tier dividend of
6.0 sen per share amounting to RM15,589,000 in respect of the financial year ended 31 December 2017. The dividend
will be paid on 28 March 2018 and will be accounted for in equity as an appropriation of retained earnings in the
financial year ending 31 December 2018.
The Directors do not recommend any final dividend in respect of the financial year ended 31 December 2017.
12. PROPERTY, PLANT AND EQUIPMENT
Furniture,
fittings,
renovation Plant Capital
Land and and Motor and work-in-
buildings equipment vehicles machinery progress Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
At 31 December 2017
Cost 302,234 121,921 12,251 262,523 41,958 740,887

Accumulated depreciation (96,315) (89,089) (8,695) (135,934) - (330,033)
Net book value 205,919 32,832 3,556 126,589 41,958 410,854
At 31 December 2016
Cost 302,474 118,538 12,013 246,040 48,593 727,658

Accumulated depreciation (91,690) (81,318) (7,645) (126,540) - (307,193)
Net book value 210,784 37,220 4,368 119,500 48,593 420,465
162
Notes to the
12. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Furniture,
fittings,
renovation Plant Capital
Land and and Motor and work-in-
Note buildings equipment vehicles machinery progress Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Movements in net book value
At 1 January 2017 210,784 37,220 4,368 119,500 48,593 420,465

Additions 1,085 6,877 825 6,203 13,823 28,813
Disposals (14) (26) - (86) - (126)
Written off 7(a) - (292) - (4) (4) (300)
Transfer to intangible assets 16 - (7,014) - (14) - (7,028)
Reclassification 73 6,230 - 14,151 (20,454) -
Depreciation charged 7(a) (5,429) (9,352) (1,539) (12,134) - (28,454)
Foreign exchange adjustments (580) (811) (98) (1,027) - (2,516)
At 31 December 2017 205,919 32,832 3,556 126,589 41,958 410,854
At 1 January 2016 215,561 36,705 4,441 123,763 25,714 406,184

Acquisition of a subsidiary 14 - 645 - - - 645
Additions 2,124 7,762 1,412 7,765 25,870 44,933
Disposals - (13) (1) (34) - (48)
Written off 7(a) - (54) - (2) - (56)
Transfer to intangible assets 16 - (117) - (176) - (293)
Reclassification (292) 1,982 - 1,302 (2,992) -
Depreciation charged 7(a) (6,931) (9,747) (1,495) (13,118) - (31,291)
Foreign exchange adjustments 322 57 11 - 1 391
At 31 December 2016 210,784 37,220 4,368 119,500 48,593 420,465

Notes to the
Buildings Buildings
on on
Freehold Leasehold freehold leasehold
land land land land Total
RM’000 RM’000 RM’000 RM’000 RM’000
Group
Analysis of land and buildings:
At 31 December 2017
Cost 25,571 26,878 120,333 129,452 302,234

Accumulated depreciation - (3,431) (34,625) (58,259) (96,315)
Net book value 25,571 23,447 85,708 71,193 205,919
At 31 December 2016
Cost 25,581 26,878 119,753 130,262 302,474

Accumulated depreciation - (2,964) (32,623) (56,103) (91,690)
Net book value 25,581 23,914 87,130 74,159 210,784
At 1 January 2017 25,581 23,914 87,130 74,159 210,784

Additions 47 - 701 337 1,085
Disposal - - - (14) (14)
Reclassification - - - 73 73
Depreciation charged - (467) (2,078) (2,884) (5,429)
Foreign exchange adjustments (57) - (45) (478) (580)
At 31 December 2017 25,571 23,447 85,708 71,193 205,919
At 1 January 2016 25,175 24,381 88,632 77,373 215,561

Additions 343 - 523 1,258 2,124
Reclassification - - 18 (310) (292)
Depreciation charged - (467) (2,052) (4,412) (6,931)
Foreign exchange adjustments 63 - 9 250 322
At 31 December 2016 25,581 23,914 87,130 74,159 210,784
164
Notes to the
Furniture
and fittings Renovation Equipment Total
RM’000 RM’000 RM’000 RM’000
Group
Analysis of furniture, fittings, renovation

and equipment:
At 31 December 2017
Cost 26,939 38,155 56,827 121,921

Accumulated depreciation (21,235) (24,161) (43,693) (89,089)
Net book value 5,704 13,994 13,134 32,832
At 31 December 2016
Cost 26,224 33,909 58,405 118,538

Accumulated depreciation (20,333) (21,677) (39,308) (81,318)
Net book value 5,891 12,232 19,097 37,220
At 1 January 2017 5,891 12,232 19,097 37,220

Additions 1,133 2,531 3,213 6,877
Disposals (21) - (5) (26)
Written off (49) (242) (1) (292)
Transfer to intangible assets (23) (105) (6,886) (7,014)
Reclassification 436 2,564 3,230 6,230
Depreciation charged (1,140) (2,967) (5,245) (9,352)
Foreign exchange adjustments (523) (19) (269) (811)
At 31 December 2017 5,704 13,994 13,134 32,832
At 1 January 2016 5,634 10,986 20,085 36,705

Acquisition of a subsidiary (Note 14) - - 645 645
Additions 860 3,021 3,881 7,762
Disposals - - (13) (13)
Written off (38) (5) (11) (54)
Transfer to intangible assets (6) (21) (90) (117)
Reclassification 522 987 473 1,982
Depreciation charged (1,085) (2,749) (5,913) (9,747)
Foreign exchange adjustments 4 13 40 57
At 31 December 2016 5,891 12,232 19,097 37,220

Notes to the
Depreciation expense of the Group of RM15,743,000 (2016: RM17,962,000) has been charged in ‘cost of sales’ and
RM12,711,000 (2016: RM13,329,000) in ‘administrative expenses’.
Property, plant and equipment under hire purchase arrangements
Net book values of property, plant and equipment held under hire purchase arrangements are as follows:
Group
2017 2016
RM’000 RM’000
Plant and machinery 267 830

Motor vehicles 36 113
Equipment 1,527 681
1,830 1,624
The net cash outflows for the acquisition of property, plant and equipment during the financial year are as follows:
Group
2017 2016
RM’000 RM’000
Acquisition of property, plant and equipment during the financial year 28,813 44,933
Less: Accrual of property, plant and equipment (491) (1,561)
Less: Acquired through hire purchase arrangement (453) (184)
Add: Payments for property, plant and equipment purchased in prior year 1,561 451
Net cash outflows for the acquisition of property, plant and equipment 29,430 43,639
Impairment assessment for property, plant and equipment and capitalised development costs of work-in-progress
included within intangible assets in relation to small volume injectable production plant
An impairment assessment was undertaken in the current financial year for the Group’s small volume injectable
production plant as the plant has not been utilised at its maximum capacity as most of the products are still at
developing stage.
The carrying amount of assets totalling RM143.6 million (2016: RM147.6 million) comprising property, plant and
equipment and capitalised development costs of work-in-progress included in intangible assets as disclosed in Note
16 to the financial statements of RM136.0 million and RM7.6 million (2016: RM140.9 million and RM6.7 million)
respectively within the manufacturing segment were tested for impairment.
The impairment test was performed by comparing the cash-generating unit’s carrying amount with its recoverable
amount. The recoverable amount is determined using value-in-use calculations.
166
Notes to the
Impairment assessment for property, plant and equipment and capitalised development costs of work-in-progress
included within intangible assets in relation to small volume injectable production plant (continued)
year period that reflects the industry and product lifecycle from development, stability testing, product registration
and commercialisation. The sales volume used in the value-in-use calculations is based on the respective product
lifecycle and new products under development. The fifteen-year projections were based on approved business plan.
The business plan reflects the cash-generating unit’s expectation of plant capacity and utilisation, revenue growth,
operating costs and margins based on past experience, current assessment of market share and expectations of
market growth.
The key assumptions used in the value-in-use calculations are set out below:
• Business analysis – The cash-generating unit makes assumptions about the demand for its existing products
and new products under development in the market place. These assumptions are used to drive the planning
assumptions for sales volume taking into consideration the projected timing for development, testing, registration
and commercialisation. The cash-generating unit also makes assumptions about cost levels determined based
on the average inflation rate in Malaysia. The projected sales volume growth rates and margins by product
ranges between -6% to 21% (2016: 1% to 20%) and -2% to 28% (2016: 3% to 52%) respectively.
• Values of land and buildings – The estimated value of the land of RM42.3 million (2016: RM42.3 million) is based
on an independent external valuation. The value for the building and other property, plant and equipment is
expected to be nil as these assets would be fully depreciated and scrapped at the end of the useful life with
minimal terminal value.
• Discount rate – In measuring the recoverable amount based on the value-in-use calculations, discount rate of
9.5% (2016: 10.5%) per annum has been applied. The discount rate reflects the prevailing market rate applicable
to the industry adjusted for the risk of the assets.
No impairment loss was required for property, plant and equipment and capitalised development costs included
within intangible assets as at 31 December 2017 as the recoverable amount of the small value injectable production
plant cash generating units is in excess of its carrying amounts.
There are no reasonably possible changes in any of the key assumptions used that would cause the carrying amount of
the property, plant and equipment and capitalised development costs included within intangible assets to materially
exceed the recoverable amount.

Notes to the
13. PREPAID LEASE PAYMENTS

Group
Note 2017 2016
RM’000 RM’000
Cost 3,348 3,543

Accumulated amortisation (1,067) (927)
Net book value 2,281 2,616
At 1 January 2,616 2,628

Amortisation during the financial year 7(a) (140) (133)
Foreign exchange adjustments (195) 121
At 31 December 2,281 2,616
14. SUBSIDIARIES
Company
2017 2016
RM’000 RM’000
Investments in subsidiaries:
Unquoted shares, at cost 586,954 361,054
Less: Accumulated impairment (378) (378)
586,576 360,676
Capital contribution to subsidiaries 3,210 1,414
Amount due from a subsidiary - 79,434

Less: Accumulated impairment - (3,773)
- 75,661
589,786 437,751
Capital contribution to subsidiaries
The fair value of deferred shares granted to selected Senior Management Officers of subsidiaries of the Company in
respect of the Company’s share scheme is treated as capital contributions to the subsidiaries.
168
Notes to the
14. SUBSIDIARIES (CONTINUED)
Amount due from a subsidiary
The amount due from a subsidiary of which the Company does not expect repayment in the foreseeable future is
considered as part of the Company’s investment in the subsidiary.
Details of the subsidiaries incorporated in Malaysia, unless otherwise stated, are as follows:
Effective
equity interest (%)
Name of Company Principal activities Paid-up capital 2017 2016
Subsidiaries of the Company
Idaman Pharma Manufacturing Manufacture and sale RM25,000,000 100 100

Sdn. Bhd. of pharmaceutical
products
Pharmaniaga Manufacturing Manufacture and sale of RM10,000,000 100 100

Berhad pharmaceutical products
Pharmaniaga LifeScience Manufacture and sale of RM200,000,000 100 100

Sdn. Bhd. pharmaceutical products
Pharmaniaga Logistics Distribution of RM40,000,000 100 100

Sdn. Bhd. pharmaceutical and
medical products
Pharmaniaga Marketing Trading and marketing RM3,000,000 100 100

Sdn. Bhd. of pharmaceutical
and medical products
Pharmaniaga Research Conduct research and RM10,000,000 100 100

Centre Sdn. Bhd. development of
pharmaceutical products
Pharmaniaga Pristine Trading and RM20,000,050 100 100

Sdn. Bhd. wholesaling of
consumer products
Bio-Collagen Technologies Research and RM2,000,000 70 70

Sdn. Bhd. manufacture of collagen
medical devices (dressings)
for wound management
application

Notes to the
Details of the subsidiaries incorporated in Malaysia, unless otherwise stated, are as follows: (continued)
Effective
equity interest (%)
Subsidiaries of the Company

(continued)
Pharmaniaga International Investment holding RM103,000,000 100 100

Corporation Sdn. Bhd.
Pharmaniaga Pegasus Dormant USD100,000 100 100

(Seychelles) Co. Ltd. @
Subsidiary of Pharmaniaga
Logistics Sdn. Bhd.
Pharmaniaga Biomedical Supply, trading and RM8,000,000 100 100

Sdn. Bhd. installation of medical
and hospital equipment
Subsidiary of Pharmaniaga
Pristine Sdn. Bhd.
Paradigm Industry Manufacture and RM100,000 80 -

Sdn. Bhd. sale of food supplements
Subsidiaries of Pharmaniaga
International Corporation
Sdn. Bhd.
PT Millennium Pharmacon Distribution and IDR127,400,000,000 73 55

International Tbk *# trading of
(“PT MPI”) pharmaceutical
products, food
supplements and
diagnostic products
in Indonesia
PT Mega Pharmaniaga *# Dormant IDR11,372,400,000 95 95

(“PT MegPha”)
170
Notes to the
Details of the subsidiaries incorporated in Malaysia, unless otherwise stated, are as follows: (continued)
Effective
equity interest (%)
Subsidiaries of Pharmaniaga
International Corporation
Sdn. Bhd. (continued)
PT Errita Pharma *# Manufacture IDR95,832,000,000 96 85

(“PT Errita”) and sale of
pharmaceutical
products in
Indonesia
* Audited by firms other than member firms of PricewaterhouseCoopers International Limited and
PricewaterhouseCoopers PLT, Malaysia
@ Incorporated in Republic of Seychelles
# Incorporated in Indonesia
Impairment assessment for cost of investment in Pharmaniaga LifeScience Sdn. Bhd.
As described in Note 12 to the financial statements, the Company has undertaken an impairment assessment in the
current financial year for its investment in a subsidiary that operates the Group’s small volume injectable production
plant using the same discounted future cash flows, adjusted for tax and repayment of intercompany balances. In
measuring the recoverable amount determined based on value-in-use calculations, discount rate of 11.45% (2016:
11.42%) per annum, representing the cost of equity has been applied. Refer to Note 12 to the financial statements for
the other key assumptions used in the projections.
No impairment loss was required for the investment in the subsidiary as at 31 December 2017 as the recoverable
amount was in excess of its carrying amount.
There are no reasonably possible changes in any of the key assumptions used that would cause the carrying amount
of the cost of investment to materially exceed the recoverable amount.
Incorporation of a subsidiary during the financial year
On 13 January 2017, the Group had via its wholly owned subsidiary, Pharmaniaga Pristine Sdn. Bhd. (“PPSB”),
subscribed to the total issued and paid-up capital of Paradigm Industry Sdn. Bhd. (“PISB”) of RM2.00. On 29 March
2017, PISB increased its paid-up capital to RM100,000 through the issuance of 99,998 ordinary shares by way of
capitalisation of amount owing to PPSB (80%) and Sweetleaves Health Sdn. Bhd. (20%).

Notes to the
Subscription of additional ordinary shares in subsidiaries
During the financial year, the Company has:
(i) subscribed to additional 125,000,000 ordinary shares in Pharmaniaga LifeScience Sdn. Bhd., for a total
consideration of RM125,000,000 by way of capitalisation of amount due from the subsidiary company; and
(ii) subscribed to additional 9,900,000 ordinary shares in Pharmaniaga Research Centre Sdn. Bhd., for a total
consideration of RM9,900,000 by way of capitalisation of amount due from the subsidiary company; and
(iii) subscribed to additional 91,000,000 ordinary shares in Pharmaniaga International Corporation Sdn. Bhd., for a
total consideration of RM91,000,000 by way of capitalisation of amount due from the subsidiary company.
Step-up acquisition in a subsidiary during the financial year
On 15 December 2017, the Group, through its wholly-owned subsidiary, Pharmaniaga International Corporation Sdn.
Bhd. (“Pharmaniaga Corp”), completed the subscription of 535,137,534 ordinary shares representing 18% of the
enlarged issued and paid-up capital in PT Pharmacon Millenium Tbk (“PT MPI”) for a total cash consideration of
IDR58,865,128,740 or equivalent to RM18,634,000 pursuant to PT MPI’s rights issue exercise. Consequently, the
Group’s effective interest in PT MPI increased from 55% to 73% and this subscription is regarded as a transaction with
owners of the Group. The gain of RM3,290,000 arising from the accretion of equity interest has been recognised in
retained earnings of the Group during the financial year.
With the utilisation of proceeds from the rights issue exercise, on 20 December 2017, PT MPI has acquired 574,992
ordinary shares representing 15% equity interest of the issued and paid-up capital of PT Errita Pharma (“PT Errita”) for a
total cash consideration of USD3,600,000 and IDR10,024,531,778, which collectively amounted to IDR54,000,000,000
or equivalent to RM16,092,000. Consequently, the Group’s effective interest in PT Errita increased from 85% to 96%
and the increase is regarded as transaction with non-controlling interest. The loss of RM12,927,000 arising from the
accretion of equity interest has been recognised in retained earnings of the Group during the financial year.
Acquisition of a subsidiary in the previous financial year
On 23 May 2016, the Company had completed the acquisition of 70% equity interest in Bio-Collagen Technologies Sdn.
Bhd. (“Bio-Collagen”), a manufacturer of collagen medical devices (dressings) for wound management application, for
a total cash consideration of RM3.5 million.
The Group had completed the final Purchase Price Allocation exercise on the above acquisition during the current
financial year and the fair value of the identifiable net assets of Bio-Collagen attributable to the Group at acquisition
date was increased from RM96,000 to RM752,000 with a corresponding decrease in goodwill of the same amount.
172
Notes to the
Acquisition of a subsidiary in the previous financial year (continued)
The final fair value of the net assets acquired and cash flow arising from the acquisition are as follows:
Final
Provisional fair fair values
values at date of at date of
acquisition acquisition
RM’000 RM’000
Property, plant and equipment 645 645

Intangible asset 150 714
Inventories 46 46
Other receivables 51 51
Cash and cash equivalents 6 6
Current tax liabilities (139) (106)
Deferred tax liabilities (110) (282)
Deferred income (512) -
Fair value of total identifiable net assets acquired 137 1,074
Less: Total fair value of net assets held by

non-controlling interest (41) (322)
Identifiable net assets acquired 96 752
Goodwill on acquisition 2,748
Total purchase consideration 3,500

Less: Cash and cash equivalents of subsidiary acquired (6)
Less: Remaining purchase consideration to be payable after 24 months
from the date of completion (547)
Cash outflow of the Group on acquisition of a subsidiary 2,947
The goodwill is attributable to Bio-Collagen’s synergies expected to arise following the Group’s acquisition of the new
subsidiary.
On completion of the purchase price allocation, the goodwill on acquisition has been revised from RM3,404,000 to
RM2,748,000. The difference of RM656,000 is not material and accordingly, the amount has been adjusted in the
current financial year as disclosed in Note 16 to the financial statements.
In prior financial year, the acquisition-related costs of RM46,700 had been charged to administrative expenses in the
consolidated income statement.

Notes to the
Summarised financial information of subsidiaries with material non-controlling interests
Set out below are the summarised financial information for the Group’s subsidiaries, PT Errita Pharma (“PT Errita”)
and PT Millennium Pharmacon International TbK (“PT MPI”) that have non-controlling interests that are material to the
Group.
Summarised statements of financial position
PT Errita PT MPI
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Current
Assets 29,139 27,879 256,700 239,863
Liabilities (31,118) (29,454) (203,145) (189,410)
Total current net (liabilities)/assets (1,979) (1,575) 53,555 50,453
Non-current
Assets 30,806 42,411 22,908 7,842
Liabilities (57) (1,214) (7,694) (7,356)
Total non-current net assets 30,749 41,197 15,214 486
Net assets 28,770 39,622 68,769 50,939
Net assets attributable to non-controlling

interest at the end of the financial year 1,148 5,943 18,293 22,923
Proportion of effective equity interests

held by non-controlling interests (%) 4 15 27 45
174
Notes to the
Summarised financial information of subsidiaries with material non-controlling interests (continued)
Summarised income statements and statements of comprehensive income
PT Errita PT MPI
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Revenue 47,904 44,154 690,156 600,419
(Loss)/Profit before taxation (2,621) (6,990) 7,484 4,277

Taxation 680 824 (2,684) (921)
Net (loss)/profit for the financial year (1,941) (6,166) 4,800 3,356
Other comprehensive (loss)/income (8,927) 5,601 (7,948) 2,842
Total comprehensive (loss)/income,

net of tax for the financial year (10,868) (565) (3,148) 6,198
Net (loss)/profit for the financial year

allocated to non-controlling interests (291) (925) 2,160 1,510
Total comprehensive (loss)/income

allocated to non-controlling interests (1,630) (677) (1,417) 2,789
Dividend paid to non-controlling interests - - 256 338
Summarised statements of cash flows

PT Errita PT MPI
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Cash (used in)/generated from operations (609) (2,615) 2,564 (10,661)

Interest paid (1,678) (885) (8,154) (9,793)
Tax (paid)/refund - - (2,072) 912
Net cash used in operating activities (2,287) (3,500) (7,662) (19,542)

Net cash used in investing activities (2,385) (1,812) (17,995) (2,625)
Net cash generated from financing activities 2,039 8,149 30,616 24,427
Net changes in cash and cash equivalents (2,633) 2,837 4,959 2,260
Cash and cash equivalents at beginning of
financial year 4,776 1,646 14,399 11,180
Foreign exchange differences (255) 293 (2,457) 959
Cash and cash equivalents at end of financial year 1,888 4,776 16,901 14,399

Notes to the
15. INVESTMENT IN AN ASSOCIATE
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost 19 19 19 19

Less: Accumulated impairment (19) (19) (19) (19)
- - - -
Details of the associate are as follows:
Effective
equity interest (%)
Pharmacare Asia Holdings Dormant, pending USD4,900 49 49

(Cayman) Limited + strike off
+ Incorporated in Cayman Island
There are no commitments or contingent liabilities relating to the Group’s interest in the associate.
176
Notes to the
16. INTANGIBLE ASSETS
Capitalised
development Manu-
Rights to cost of work- facturing Trade Intellectual
Goodwill Software to supply in-progress licences name property Total
Group
Cost
At 1 January 2017 153,176 4,289 234,658 13,073 18,667 4,429 - 428,292
Acquisition of a
subsidiary
(Note 14) (656) - - - 564 - - (92)
Additions - 7,280 24,322 7,957 - - 3,063 42,622
Transfer from
property, plant
and equipment
(Note 12) - 6,678 - 350 - - - 7,028
Foreign exchange
adjustments (6,525) (516) - (2) (1,946) (466) - (9,455)
Written off - - - (783) - - - (783)
At 31 December
2017 145,995 17,731 258,980 20,595 17,285 3,963 3,063 467,612
Less: Accumulated
amortisation
At 1 January 2017 - 4,065 62,121 7 5,817 833 - 72,843
Amortisation
charged (Note 7(a)) - 320 14,869 11 2,251 290 187 17,928
Foreign exchange
adjustments - (512) - - (606) (88) - (1,206)
At 31 December
2017 - 3,873 76,990 18 7,462 1,035 187 89,565
Less: Accumulated
impairment
At 1 January 2017/
31 December 2017 12,653 - - - - - - 12,653
Net book value

At 31 December
2017 133,342 13,858 181,990 20,577 9,823 2,928 2,876 365,394

Notes to the
16. INTANGIBLE ASSETS (CONTINUED)
Capitalised
development Manu-
Rights to cost of work- facturing Trade Intellectual
Goodwill Software to supply in-progress licences name property Total
Group
Cost
At 1 January 2016 145,671 3,965 177,157 6,101 17,292 4,136 - 354,322
Acquisition of a
subsidiary (Note 14) 3,404 - - - 150 - - 3,554
Additions - - 57,501 6,679 - - - 64,180
Transfer from
property, plant
and equipment
(Note 12) - - - 293 - - - 293
Foreign exchange
adjustments 4,101 324 - - 1,225 293 - 5,943
At 31 December
2016 153,176 4,289 234,658 13,073 18,667 4,429 - 428,292
Less: Accumulated
amortisation
At 1 January 2016 - 3,183 50,355 - 3,517 506 - 57,561
Amortisation
charged (Note 7(a)) - 561 11,766 7 1,904 270 - 14,508
Foreign exchange
adjustment - 321 - - 396 57 - 774
At 31 December
2016 - 4,065 62,121 7 5,817 833 - 72,843
Less: Accumulated
impairment
At 1 January 2016/
31 December 2016 12,653 - - - - - - 12,653
Net book value

At 31 December
2016 140,523 224 172,537 13,066 12,850 3,596 - 342,796
178
Notes to the
Included in capitalised development cost of work-in-progress is development costs amounting to RMnil (2016:
RM166,500) in respect of a product that has been commercialised during the financial year.
During the financial year, amortisation of RM14,880,000 (2016: RM11,773,000) is included in ‘cost of sales’ and
RM3,048,000 (2016: RM2,735,000) in ‘administrative expenses’ in profit or loss.
The net cash outflows for the acquisition of intangible assets during the financial year are as follows:
Group
2017 2016
RM’000 RM’000
Additions during the financial year 42,622 64,180

Less: Accrual of intangible assets (6,023) (12,565)
Add: Payment for intangible assets acquired in prior year 12,565 18,210
Net cash outflows on the acquisition of intangible assets 49,164 69,825
Impairment assessment for goodwill
The carrying amounts of goodwill allocated to the Group’s cash-generating units (“CGUs”) are as follows:
2017 2016
RM’000 RM’000
Malaysia
Trading and distribution 16,839 16,839
Manufacturing 60,953 61,609
Indonesia
Trading and distribution 2,424 2,709
Manufacturing 53,126 59,366
Total 133,342 140,523
No impairment loss was required for the carrying amounts of goodwill assessed as at 31 December 2017 as the
recoverable amounts of the CGUs were in excess of their carrying amounts.
The recoverable amounts of the CGUs are determined based on value-in-use (“VIU”) calculations. Cash flows are
derived from financial budgets approved by the Directors covering a range of five-year period to ten-year period that
reflects the product lifecycle. The projections reflect management’s expectation of sales volume growth and product
margins for the CGUs based on current assessment of market share and expectations of market growth.

Notes to the
The key assumptions used in VIU calculations are as follows:
Malaysia Indonesia
Trading and Trading and
distribution Manufacturing distribution Manufacturing
2017
Sales volume growth rate by

product 1.7% to 5.5% -2.2% to 54.3% 14.3% to 15.4% 10.0% to 47.2%
Product margins 7.7% to 8.2% 36.2% to 94.0% 8.0% 11.4% to 33.3%
Discount rate 9.08% 9.46% 13.19% 16.64%
2016
Sales volume growth rate by

product 2.4% to 7.9% -5.7% to 28.6% 15.1% to 15.7% 10.0% to 35.0%
Product margins 8.0% to 8.3% 49.9% to 71.3% 7.0% 21.6% to 34.1%
Discount rate 10.08% 10.50% 13.34% 15.76%
(i) Sales volume growth rate is the average growth rate by product over the forecast period based on past
performance and management’s expectation of market development.
(ii) Product margins are projected based on the industry trends, together with the trends observed by the Group.
(iii) Terminal growth rate of 0% (2016: 0%) that reflects long term growth forecast is applied in the VIU calculations.
(iv) Discount rates used are pre-tax and reflect specific risks relating to the CGUs.
The Group’s review includes an impact assessment of changes in key assumptions. Based on the sensitivity analysis
performed, the Directors concluded that no reasonable possible change in the base case assumptions would cause
the carrying amounts of the CGUs to exceed their recoverable amounts.
180
Notes to the
Impairment assessment for capitalised development costs of work in-progress
(a) Capitalised development costs of work in-progress in relation to the small volume injectable production plant
within the manufacturing segment
As at 31 December 2017, the capitalised development costs of work-in-progress in relation to the small volume
injectable production plant RM7.6 million (2016: RM6.7 million) had been assessed together with the related
property, plant and equipment as disclosed in Note 12 to the financial statements. The capitalised development
costs of work-in-progress is subject to annual impairment testing.
(b) Capitalised development costs of work in-progress in relation to other cash-generating units within the
manufacturing segment
As at 31 December 2017, the capitalised development costs of work in-progress of RM13.0 million (2016:
RM6.3 million) together with related property, plant and equipment of RM163.3 million (2016: RM157.4 million)
in relation to other cash-generating units was tested for impairment. The impairment test was performed by
comparing the cash-generating unit’s carrying amount with its recoverable amount. The recoverable amount is
determined using value-in-use calculations.
year period that reflects the industry, product lifecycle from development, stability testing, product registration
and commercialisation. The sales volume used in the value-in-use calculations is based on the respective
product lifecycle and new products under development. The business plan reflects the cash-generating unit’s
expectation of plant capacity and utilisation, revenue growth, operating costs and margins based on past
experience, current assessment of market share, expectations of market growth and industry growth.
The key assumptions used in the value-in-use calculations are set out below:
• Business analysis – The cash-generating unit makes assumptions about the demand for these new
products under development in the market place. These assumptions are used to drive the planning
assumptions for sales volume taking into consideration the projected timing for development, testing,
registration and commercialisation using a projected long-term average growth rate of 3% to 5% (2016:
3% to 5%).
• Discount rate – In measuring the recoverable amount based on the value-in-use calculations, discount
rate of 9.46% (2016: 10.50%) has been applied. The discount rate reflects the prevailing market rate
applicable to the industry adjusted for the risk of the assets.
No impairment was required as at 31 December 2017 as their recoverable amounts were in excess of their
carrying amounts.

Notes to the
17. INVENTORIES
Group
2017 2016
RM’000 RM’000
Raw materials 42,755 42,805

Packaging materials 23,242 20,643
Work-in-progress 6,841 5,270
Finished goods 412,155 463,493
484,993 532,211
18. TRADE RECEIVABLES
Group
Note 2017 2016
RM’000 RM’000
Current
Trade receivables 173,572 169,204

Less: Provision for impairment of trade receivables (8,095) (7,936)
165,477 161,268
Amounts due from customers on contracts 33 4 8
165,481 161,276
Non-current
Trade receivables 10,817 13,838

9,472 12,236
The credit terms of trade receivables range from 30 days to 120 days (2016: 30 days to 120 days).
182
Notes to the
18. TRADE RECEIVABLES (CONTINUED)
Ageing analysis of trade receivables
The ageing analysis of trade receivables is as follows:
Group
2017 2016
RM’000 RM’000
Neither past due nor impaired 9,487 12,836
Past due but not impaired:

- Less than three months 109,682 130,146
- Between three to six months 15,389 8,878
- Between six months and one year 30,177 3,452
- Greater than one year 742 2,114
155,990 144,590
Impaired 18,912 25,616
184,389 183,042
Trade receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are substantially government-related entities and companies
with no history of default with the Group.
Trade receivables that are past due but not impaired
As at 31 December 2017, trade receivables of RM156.0 million (2016: RM144.6 million) were past due their contractual
payment date but not impaired. These relate to a number of external parties where there is no expectation of default
based on historical dealings.

Notes to the
18. TRADE RECEIVABLES (CONTINUED)
Trade receivables that are impaired
The Group’s trade receivables that are impaired at the reporting date are as follows:
Group
2017 2016
RM’000 RM’000
Gross trade receivables 18,912 25,616

9,472 16,078
(a) Receivables amounting to RM8,096,000 (2016: RM7,753,000) relate to private customers, which are in
unexpectedly difficult economic situation.
(b) Receivables amounting to RM10,816,000 (2016: RM17,863,000) are expected to be settled by instalment plan.
Movements of the provision for impairment of trade receivables during the financial year are as follows:
Group
Note 2017 2016
RM’000 RM’000
At 1 January 9,538 10,423

Provision for impairment during the financial year 7(a) 570 760
Written off (430) (1,795)
Foreign exchange differences (238) 150
At 31 December 9,440 9,538
The creation and release of provision for impaired receivables have been included in ‘administrative expenses’ in the
income statement. Amounts charged to the provision account are generally written off, when there is no expectation
of recovering additional cash.
The maximum exposure of credit risk at the reporting date is the carrying value of each class of receivable mentioned
above. The Company does not hold any collateral as security.
184
Notes to the
19. OTHER RECEIVABLES
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Current
Other receivables 17,546 17,318 - 8,648

Less: Provision for impairment of
other receivables (108) (108) - -
17,438 17,210 - 8,648

Advance to a corporate shareholder
of a subsidiary - 17,960 - -
Prepayments 11,635 15,585 160 20
Deposits 2,628 3,376 - -
GST/VAT recoverable 49,521 40,882 - -
81,222 95,013 160 8,668
Non-current
Other receivables 5,674 - 5,674 -
In the previous financial year, the advance to a corporate shareholder of a subsidiary was unsecured, interest free and
repayable on demand. The advance was fully repaid during the financial year.

Notes to the
19. OTHER RECEIVABLES (CONTINUED)
Ageing analysis of other receivables
The ageing analysis of other receivables is as follows:
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Neither past due nor impaired 10,538 11,561 - 8,648
Past due but not impaired:

- Less than three months 1,572 3,584 - -
- Between three to six months 5,247 202 - -
- Between six months and one year 4 901 - -
- Greater than one year 5,751 962 5,674 -
12,574 5,649 5,674 -

Impaired:
- Greater than one year 108 108 - -
23,220 17,318 5,674 8,648
Other receivables that are neither past due nor impaired
Other receivables that are neither past due nor impaired are substantially companies with no history of default with the
Group and the Company.
Other receivables that are past due but not impaired
As at 31 December 2017, other receivables of the Group amounting to RM12.6 million (2016: RM5.6 million) were past
due their contractual payment date but not impaired. These relate to a number of external parties where there is no
expectation of default based on historical dealings.
The creation and release of provision for impaired receivables have been included in ‘administrative expenses’ in the
income statement. Amounts charged to the provision account are generally written off, when there is no expectation
of recovery.
186
Notes to the
20. AMOUNTS DUE FROM/(TO) SUBSIDIARIES
(a) Amounts due from subsidiaries
Company
2017 2016
RM’000 RM’000
Current
Amounts due from subsidiaries 59,067 121,353

Less: Provision for impairment (24,135) (24,135)
Amounts due from subsidiaries - net 34,932 97,218
Non-current
Amounts due from subsidiaries 58,938 175,648

Less: Provision for impairment (36,602) (36,602)
Amount due from subsidiaries - net 22,336 139,046
The amounts due from subsidiaries are unsecured, interest free and are repayable on demand.
During the financial year, a total amount of RM225,900,000 was settled by way of capitalisation of amounts due
from subsidiaries as disclosed in Note 14 to the financial statements.
During the financial year, amount due from subsidiaries of RM56,366,000 was settled by way of offsetting with
the same amounts due to subsidiaries.
Movements of the provision for impairment of amounts due from subsidiaries during the financial year are as
follows:
Company
2017 2016
RM’000 RM’000
At 1 January 60,737 57,744

Provision for impairment during the financial year - 2,993
At 31 December 60,737 60,737
(b) Amounts due to subsidiaries
The amounts due to subsidiaries are unsecured, interest free and are repayable on demand.
Dividend income from subsidiaries totalling RM104.0 million (2016: RM94.5 million) during the financial year was
set off against amounts due to subsidiaries.

Notes to the
21. AMOUNTS DUE TO RELATED COMPANIES
The amounts due to related companies are unsecured, interest free and are repayable on demand.
22. DEPOSITS, CASH AND BANK BALANCES
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 27,893 70,456 177 377
Cash and bank balances are deposits held at call with banks and earn no interest except for bank balances amounting
to RM1.8 million (2016: RM1.0 million) that earn interest at 2.53% (2016: 2.60%) per annum.
23. TRADE PAYABLES
The credit terms of trade payables granted to the Group range from 30 days to 120 days (2016: 30 days to 120 days).
24. OTHER PAYABLES
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Non-current
Other payables 457 547 457 547
Current
Other payables 27,939 54,431 1,903 3,071

Accruals 16,184 9,357 1,072 422
44,123 63,788 2,975 3,493
Included in other payables of the Group and of the Company is the remaining balance of the purchase consideration of
RM457,000 (2016: RM547,000) in respect of the acquisition of 70% equity interest in Bio-Collagen Technologies Sdn.
Bhd.
188
Notes to the
25. AMOUNT DUE TO IMMEDIATE HOLDING COMPANY
The amount due to immediate holding company arose from management fees and payments made on behalf. This
amount is unsecured, interest free and repayable on demand.
26. DEFERRED INCOME
Government RoyalePharma
grants voucher Total
RM’000 RM’000 RM’000
Group
At 1 January 2017 4,454 160 4,614

Adjustment arising from finalisation of
purchase price allocation on acquisition
of a subsidiary (Note 14) (512) - (512)
Additions during the financial year 1,114 1,316 2,430
Recognition of income during the financial year 122 (1,219) (1,097)
At 31 December 2017 5,178 257 5,435
Analysed as:
- Current 314 257 571
- Non-current 4,864 - 4,864
5,178 257 5,435
At 1 January 2016 - 196 196

Acquisition of a subsidiary (Note 14) 512 - 512
Additions during the financial year 4,096 1,198 5,294
Recognition of income during the financial year (154) (1,234) (1,388)
At 31 December 2016 4,454 160 4,614
Analysed as:
- Current 264 160 424
- Non-current 4,190 - 4,190
4,454 160 4,614
Government grants relate to monies received from certain government agencies to fund the purchase of certain
intangible assets and property, plant and equipment of the Group.

Notes to the
27. BORROWINGS
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Current
Unsecured:
- Bankers’ acceptances 181,499 284,277 - -
- Revolving credits 159,000 230,000 59,000 130,000
- Foreign time loan 102,651 101,921 - -
443,150 616,198 59,000 130,000

Secured:
- Hire purchase 766 466 - -
443,916 616,664 59,000 130,000
Non-current
Secured:
- Hire purchase 401 248 - -
444,317 616,912 59,000 130,000
Total
Bankers’ acceptances 181,499 284,277 - -

Revolving credits 159,000 230,000 59,000 130,000
Foreign time loan 102,651 101,921 - -
Hire purchase 1,167 714 - -
444,317 616,912 59,000 130,000
Foreign time loan
The foreign time loan was drawn down to finance the working capital and procurement of vehicle and building. The
foreign time loan is denominated in Indonesian Rupiah.
Hire purchase liabilities

Group
2017 2016
RM’000 RM’000
Minimum payments:
- Payable within 1 year 799 499
- Payable between 1 and 5 years 433 261
1,232 760
Less: Future finance charges (65) (46)
Present value of liabilities 1,167 714
190
Notes to the
27. BORROWINGS (CONTINUED)
Hire purchase liabilities (continued)
Hire purchase liabilities are effectively secured on the rights to the leased assets which reverts to the lessors in the
event of default.
Borrowings’ maturity and interest rate analysis
The net exposure of borrowings of the Group and of the Company to interest rate changes and the periods in which
the borrowings mature are as follows:
Effective Floating Repayment terms Total

interest rate interest carrying
at year end rate <1 year >1 year amount
% per annum RM’000 RM’000 RM’000 RM’000
Group
At 31.12.2017
Bankers’ acceptances 5.09 181,499 181,499 - 181,499

Revolving credits 4.45 159,000 159,000 - 159,000
Foreign time loan 7.96 102,651 102,651 - 102,651
Hire purchase 1.24 1,167 766 401 1,167
444,317 443,916 401 444,317
At 31.12.2016
Bankers’ acceptances 4.47 284,277 284,277 - 284,277

Foreign time loan 11.46 101,921 101,921 - 101,921
Hire purchase 3.66 714 466 248 714
616,912 616,664 248 616,912
Company
At 31.12.2017
At 31.12.2016

Notes to the
Reconciliation of liabilities arising from financing activities
The following table illustrates the changes in liabilities arising from financing activities, including both changes arising
from cash flows and non-cash changes during the financial year:
At Foreign At
1 January Net Acquisition exchange 31 December
2017 cash flows of PPE movement 2017
RM’000 RM’000 RM’000 RM’000 RM’000
Group
Borrowings 616,198 (159,236) - (13,812) 443,150
Hire purchase liabilities 714 - 453 - 1,167
Total liabilities from

financing activities 616,912 (159,236) 453 (13,812) 444,317
At At
1 January Net Non-cash 31 December
2017 cash flows Transactions 2017
RM’000 RM’000 RM’000 RM’000
Company
Borrowings 130,000 (71,000) - 59,000
Amount due to subsidiaries 209,019 153,391 (168,100) 194,310
Total liabilities from financing activities 330,019 82,391 (168,100) 253,310
Fair value
The fair values of current and non-current borrowings approximate their carrying amounts, as the impact of discounting
is not significant.
Currency profile
The carrying amounts of the Group and of the Company’s borrowings are denominated in the following currencies:
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Ringgit Malaysia 326,617 500,349 59,000 130,000

Indonesian Rupiah 117,700 116,563 - -
444,317 616,912 59,000 130,000
192
Notes to the
Undrawn borrowing facilities
The Group and the Company have the following undrawn borrowing facilities:
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Bankers’ acceptances 174,891 74,038 - -

Revolving credits 241,000 170,000 141,000 70,000
Foreign time loan 56,779 76,234 - -
472,670 320,272 141,000 70,000
28. SHARE CAPITAL
Group and Company

2017 2016
RM’000 RM’000
Issued and fully paid ordinary shares:

At 1 January 129,688 129,441
Adjustments arising from Companies Act 2016
coming into effect on 31 January 2017 14,266 -
Issuance during the financial year arising from:
- Option Plan - 100
- Long Term Incentive Plan 2,259 147
At 31 December 146,213 129,688
With the Companies Act 2016 (“New Act”) came into effect on 31 January 2017, the credit standing in the share
premium account of RM14,266,000 has been transferred to the share capital account. The New Act has abolished the
concept of par or nominal value of shares and hence, the share premium of RM14,266,000 and authorised capital are
abolished. In accordance with subsection 618(2) of the New Act, the amount standing to the credit of the Company’s
share premium become part of the Company’s share capital upon commencement of the New Act. Pursuant to
subsection 618(3) of the New Act, the Company may exercise its right to use the credit amounts being transferred
from share premium within 24 months after the commencement of the New Act.

Notes to the
29. SHARE RESERVES
(a) Option Plan
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Option Plan 8,503 4,172 8,503 4,172

Long Term Incentive Plan 2,024 1,649 173 349
10,527 5,821 8,676 4,521
An Option Plan was implemented on 13 May 2016 for the benefit of Directors and selected Senior Management
Officers (“Eligible Employees”) of the Group. The Option Plan shall be in force for a period of 5 years. The fair
value of each share option on the grant date was RM0.71. The options are to be settled only by the issuance
and allocation of new ordinary shares of the Company. There are no cash settlement alternatives.
The exercise price of the share options granted under the Option Plan is RM5.04 each. The options granted
are divided into 5 equal tranches which vest on 16 May 2016, 16 May 2017, 16 May 2018, 16 May 2019 and 16
May 2020. The vesting condition is that the offeree must be an employee or Director, as the case may be, of the
Company or its subsidiaries on the respective vesting and exercise dates. The options shall expire on 14 May 2021.
Movements of share options during the financial year
The following table illustrates the number of, and movements in, share options of the Company during the
financial year:
Number of share options

2017 2016
’000 ’000
At 1 January 15,640 -
Movements during the financial year:
- Granted - 15,840
- Exercised - (200)
At 31 December 15,640 15,640
Exercisable at 31 December 6,236 3,018
194
Notes to the
29. SHARE RESERVES (CONTINUED)
(a) Option Plan (continued)
The fair value of the Option granted during the financial year was accounted for in accordance with MFRS 2 Share-
based Payments, were determined using the Binomial valuation model. The significant inputs in the model are as
follows:
Fair value per option RM0.71

Exercise price RM5.04
Option life 5 years
Weighted average share price at grant date RM5.60
Expected dividend yield 5.38%
Risk free rate 3.49%
Expected volatility 15.00%
The volatility measured at the standard deviation of continuously compounded share returns is based on statistical
analysis of share prices over the last 3 (2016: 2) years.
The amounts recognised in the financial statements as disclosed in Notes 8 and 37(e) to the financial statements
arose from the Option Plan granted to Directors and Eligible Employees.
(b) Long Term Incentive Plan
A Long Term Incentive Plan (“LTIP”) was implemented on 13 May 2016 for the benefit of the Executive Director
and Eligible Employees of the Group. The value of the allocation per year to the Executive Director and Eligible
Employees under the LTIP shall not exceed 6% of the audited profit after tax of the Group for the preceding
financial year.
Under the LTIP, the Executive Director and Eligible Employees are awarded with new ordinary share in the
Company for nil consideration and the shares granted are vested to the Executive Director and Eligible
Employees in tranches over a period of up to 3 years. There are no cash settlement alternatives.
As at 31 December 2017, particulars of the shares granted under the LTIP were as follows:
At grant date
Fair Market At At
Date of grant value price 1.1.2017 Granted Vested Lapsed 31.12.2017
13 May 2016 RM5.36 RM5.60 581,600 - (283,600) (12,700) 285,300

18 May 2017 RM4.60 RM4.76 - 481,000 (160,300) - 320,700
The fair value of the shares granted is determined using the Monte Carlo Simulation model, taking into account
the terms and conditions under which the shares were granted. The significant inputs in the model are as follows:
Closing market price at grant date RM4.76 and RM5.60

Expected volatility 17.49% to 26.23%
Expected dividend yield 3.94% to 4.20%
Risk free rate 2.92% to 3.34%
The expected volatility is based on 1 month, 1 year and 2 years average daily volatility.
Notes to the
30. RETAINED EARNINGS
Subject to the agreement by the Inland Revenue Board, the Company has tax exempt income to frank the payment of
tax exempt dividends up to RM1,666,574 (2016: RM1,666,574).
31. DEFERRED TAXATION
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined
after appropriate offsetting, are shown in the statements of financial position:
Group
Note 2017 2016
RM’000 RM’000
Deferred tax assets:

- Deferred tax assets to be recovered after more
than 12 months 32,720 25,002
- Deferred tax assets to be recovered within
12 months 2,717 3,296
35,437 28,298
Deferred tax liabilities:

- Deferred tax liabilities to be recovered after more
than 12 months (50,505) (45,771)
- Deferred tax liabilities to be recovered within
12 months (2,494) (2,334)
(52,999) (48,105)
Deferred tax liabilities (net) (17,562) (19,807)
At beginning of financial year (19,807) (9,158)

Acquisition of a subsidiary 14 (172) (110)
(Charged)/credited to income statement:
- property, plant and equipment (6,457) (732)
- provisions (7,028) 995
- unutilised tax losses 15,851 1,763
- intangible assets (2,272) (12,959)
9 94 (10,933)
Foreign exchange adjustments 2,323 394
At end of financial year (17,562) (19,807)
196
Notes to the
31. DEFERRED TAXATION (CONTINUED)
Group
2017 2016
RM’000 RM’000
Subject to income tax
Deferred tax assets (before offsetting):

- property, plant and equipment 4,161 5,222
- provisions 11,422 18,450
- unutilised tax losses 29,521 13,670
45,104 37,342
Offsetting (9,667) (9,044)
Deferred tax assets (after offsetting) 35,437 28,298
Deferred tax liabilities (before offsetting):

- property, plant and equipment (18,985) (15,740)
- intangible assets (43,681) (41,409)
(62,666) (57,149)
Offsetting 9,667 9,044
Deferred tax liabilities (after offsetting) (52,999) (48,105)
Deferred tax assets are recognised for deductible temporary differences to the extent that it is probable that future
taxable profits will be available against which temporary differences can be utilised. The deductible temporary
differences are available indefinitely for offset against future taxable profits of the Group and of the Company, subject
to agreement with the Inland Revenue Board. These tax benefits will only be obtained if the Group and Company
derive future assessable income of a nature and amount sufficient for the tax benefits to be utilised. Estimating the
future taxable profits involve significant assumptions, especially in respect of sales volume growth rate and product
margins and new outlets. These assumptions used are consistent with those prepared and used for impairment testing
purposes. All available convincing evidences were considered, including approved budgets, business plan and analysis
of historical operating results. Based on the available convincing evidences, management believes that the current
non-time restricted temporary differences will be utilised and has recognised the deferred tax assets as at the end of
the reporting date.

Notes to the
31. DEFERRED TAXATION (CONTINUED)
The amount of deductible temporary differences (all of which have no expiry) for which no deferred tax asset is
recognised in the Group and in the Company’s financial statements are as follows:
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Unutilised tax losses 56,743 87,804 37,365 35,034

Unabsorbed capital allowances 3,606 5,336 - 13
Deductible temporary differences - 31 - -
60,349 93,171 37,365 35,047
Deferred tax assets not recognised

at 24% (2016: 24%) 14,484 22,361 8,968 8,411
32. PROVISION FOR DEFINED BENEFIT PLAN
The subsidiaries in Indonesia operate an unfunded defined benefit scheme for its employees based on the provisions
of Labour Law No. 13/2003. The latest actuarial valuations of the plans were signed on 4 January 2018 and 17 January
2018.
The amounts of unfunded defined benefit recognised in the statements of financial position of the Group are
determined as follows:
Group
2017 2016
RM’000 RM’000
Present value of unfunded defined benefit obligations 8,977 8,593
Analysed as:
Non-current 8,977 8,593
Actuarial losses recognised in the statements

of comprehensive income (224) (74)
Cumulative actuarial losses recognised in the statements

of comprehensive income (647) (423)
198
Notes to the
32. PROVISION FOR DEFINED BENEFIT PLAN (CONTINUED)
The movements during the financial year in the amounts recognised in the statements of financial position of the
Group are as follows:
Group
2017 2016
RM’000 RM’000
At 1 January 8,593 7,501

Charged to income statement (Note 8) 1,693 1,422
Contributions paid during the financial year (565) (1,062)
Recognition of actuarial loss 224 74
Foreign exchange adjustments (968) 658
At 31 December 8,977 8,593
The amounts recognised in the income statements are as follows:
Current service cost 1,052 792

Interest cost 641 630
Total, included in employee benefit expenses (Note 8) 1,693 1,422
The principal actuarial assumptions used in respect of the Group’s unfunded defined benefit plan are as follows:
Group
2017 2016
% %
Discount rate 7.3 8.0 to 8.5

Expected rate of salary increase 6.0 6.0 to 7.0

Notes to the
32. PROVISION FOR DEFINED BENEFIT PLAN (CONTINUED)
The sensitivity of the defined benefit obligation to changes in the principal actuarial assumptions are as follows:
Impact on defined benefit obligation
Change in Increase in Decrease in

assumption assumption assumption
2017
Discount rate 1.0% Decrease by 8.8% Increase by 10.1%

Expected rate of salary increase 1.0% Increase by 10.1% Decrease by 8.9%
2016
Discount rate 1.0% Decrease by 8.5% Increase by 9.8%

Expected rate of salary increase 1.0% Increase by 9.8% Decrease by 8.7%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to changes in the principal actuarial assumptions the same method (present
value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting
period) has been applied as when calculating the pension liability recognised within the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the
previous financial year.
33. AMOUNTS DUE FROM CUSTOMERS ON CONTRACTS
Group
Note 2017 2016
RM’000 RM’000
Aggregate costs incurred to-date 10,726 5,133

Add: Attributable profits 2,873 658
13,599 5,791
Less: Progress billings (13,595) (5,783)
Amounts due from customers on contracts 18 4 8
200
Notes to the
33. AMOUNTS DUE FROM CUSTOMERS ON CONTRACTS (CONTINUED)
Group
Note 2017 2016
RM’000 RM’000
Contract revenue recognised during the

financial year 4 28,258 63,248
Contract costs recognised as expense
during the financial year 5 23,943 62,644
34. SEGMENTAL REPORTING
The Board of Directors is the Group’s chief operating decision maker. Performance is measured based on identified
reportable segments’ profit before interest and tax as management believes that such information is most relevant in
evaluating the results of the segments.
Effective 1 January 2017, the Group’s segmental reporting discloses Indonesia Division, comprising all Indonesian
subsidiaries, as a separate segment, whose operating results are now regularly reviewed by the Group for better
allocation of resources and performance assessment. Other than the reclassification of all Indonesian subsidiaries that
were previously reported under Logistics and Distribution and Manufacturing divisions respectively, the segmental
information is consistent with those of the audited financial statements for the year ended 31 December 2016.
Accordingly, the corresponding prior period amounts have been restated following the change in reporting segments.
For management purposes, the Group’s business is organised into the following three reportable segments according
to the internal reporting structure:
(a) Logistics and distribution - Distribution, trading and wholesaling of pharmaceutical and medical products as well
as supply and installation of medical and hospital equipment in Malaysia.
(b) Manufacturing - Manufacturing of pharmaceutical products in Malaysia.
(c) Indonesia - Manufacturing and distribution of pharmaceutical and medical products in Indonesia have been
aggregated into one reportable segment as it is reflective of the Group’s business synergy in Indonesia, it is
closely monitored as a potential growth region and is expected to materially contribute to the Group’s revenue
in the future.
Inter-segment revenues are eliminated on consolidation.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.

Notes to the
34. SEGMENTAL REPORTING (CONTINUED)
(a) Analysis by business segments
Logistics
and distribution Manufacturing Indonesia Elimination Total
RM’000 RM’000 RM’000 RM’000 RM’000
Group
2017
Revenue
External sales 1,586,839 3,110 734,011 - 2,323,960
Inter-segment sales - 274,137 - (274,137) -
Total revenue 1,586,839 277,247 734,011 (274,137) 2,323,960
Results
Segment results 19,581 76,530 14,321 - 110,432
Finance costs (16,877) (2,461) (10,312) 876 (28,774)
Interest income 755 810 38 (876) 727
3,459 74,879 4,047 - 82,385
Unallocated
corporate expenses (9,321)
Profit before zakat

and taxation 73,064
Zakat (600)
Taxation 5,860 (14,872) (2,648) (5,717) (17,377)
Net profit for the

financial year 55,087
202
Notes to the
(a) Analysis by business segments (continued)
Logistics
RM’000 RM’000 RM’000 RM’000 RM’000
Group
2017
Other information
Segment assets 1,743,680 596,436 328,474 (1,060,840) 1,607,750
Segment liabilities 1,140,761 195,443 251,171 (526,752) 1,060,623
Capital expenditure on
property, plant and
equipment and
intangible assets 39,889 34,233 4,341 - 78,463
Depreciation of property,
plant and equipment 9,658 16,003 2,793 - 28,454
lease payments 51 - 89 - 140
Amortisation of
intangible assets 15,056 361 2,511 - 17,928
and obsolete inventories 3,423 1,518 314 - 5,255
Share-based expenses 6,069 876 - - 6,945
Non-cash expenses 4,827 1,245 3,094 - 9,166

Notes to the
Logistics
RM’000 RM’000 RM’000 RM’000 RM’000
Group
2016 (Restated)
Revenue
External sales 1,551,444 3,152 634,426 - 2,189,022
Inter-segment sales - 375,167 - (375,167) -
Total revenue 1,551,444 378,319 634,426 (375,167) 2,189,022
Results
Segment results 11,599 93,305 8,681 - 113,585
Finance costs (18,749) (2,506) (13,500) 1,052 (33,703)
Interest income 1,349 689 52 (1,052) 1,038
(5,801) 91,488 (4,767) - 80,920
Unallocated
corporate expenses (8,903)
Profit before zakat

and taxation 72,017
Zakat (250)
Taxation (11,921) (14,913) (698) 1,624 (25,908)
Net profit for the

financial year 45,859
204
Notes to the
Logistics
RM’000 RM’000 RM’000 RM’000 RM’000
Group
2016 (Restated)
Other information
Segment assets 1,956,208 751,381 296,425 (1,320,904) 1,683,110
Segment liabilities 1,134,515 406,037 233,177 (650,026) 1,123,703
Capital expenditure on
property, plant and equipment
and intangible assets 66,007 37,962 5,437 - 109,406
Depreciation of property,
plant and equipment 10,582 18,362 2,347 - 31,291
lease payments 51 - 82 - 133
Amortisation of
intangible assets 11,766 29 2,713 - 14,508
and obsolete inventories 4,648 1,806 328 - 6,782
Share-based expenses 6,811 764 - 7,575
Non-cash expenses 238 1,211 1,581 - 3,030

Notes to the
(b) Geographical information
Revenue
from Total
external non-current
customers assets
RM’000 RM’000
Geographical markets
2017
Malaysia 1,569,569 745,827

Indonesia 739,024 32,702
Other countries 15,367 -
2,323,960 778,529
2016
Malaysia 1,530,263 745,084

Indonesia 647,220 20,793
Other countries 11,539 -
2,189,022 765,877
Revenue is based on the country in which the customer is located.
Non-current assets information presented above consist of non-current assets other than financial instruments
and deferred tax assets as presented in the consolidated statement of financial position.
Revenues of approximately RM1.5 billion (2016: RM1.5 billion) are mainly derived from a single external
customer. These revenues are attributable to Logistics and Distribution segment. The single external customer
with revenue equal or more than 10% of the Group’s total revenue is disclosed in Note 37(f).
206
Notes to the
35. CAPITAL COMMITMENTS
Capital expenditure in respect of the following has not been provided for in the financial statements:
Group
2017 2016
RM’000 RM’000
Authorised and contracted for:

- acquisition of property, plant and equipment 12,145 39,199
- acquisition of intangible assets 4,131 532
Authorised but not contracted for:

- acquisition of property, plant and equipment 10,842 2,190
36. OPERATING LEASE OBLIGATION
Group as a lessee
The Group has several non-cancellable operating lease agreements for the use of equipment, land and buildings.
These leases have an average lease period of between 2 years to 5 years with renewal option included in the contracts.
Group
2017 2016
RM’000 RM’000
Within 1 year 5,822 5,003

Later than 1 year but not later than 5 years 4,857 5,651
10,679 10,654
37. SIGNIFICANT RELATED PARTY TRANSACTIONS
For the purpose of these financial statements, parties are considered to be related to the Group and the Company, if
the Group and the Company has the ability, directly or indirectly, to control the party or exercise significant influence
over the party in making any financial and operating decisions, or vice versa, or where the Group or the Company and
the party are subject to common control or common significant influence. Related parties may be individuals or other
entities.

Notes to the
37. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONTINUED)
In addition to related party disclosures elsewhere in the financial statements, set out below are other related party
transactions and balances.
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
(a) Immediate holding company

Expenses
• Management fees (289) (306) (127) (161)
• Corporate and administrative
support services (1,085) (1,140) - -
Group
2017 2016
RM’000 RM’000
(b) Subsidiaries of the immediate holding company

Expenses
• Travelling and accommodation (1,439) (1,883)
• Provision of insurance (560) (668)
• Freight forwarding and transportation services (5,005) (5,621)
• Rental of premises (585) (4)
Company
2017 2016
RM’000 RM’000
(c) Subsidiaries
Income
• Interest income on advances to a subsidiary 82 -
• Dividend income from subsidiaries 104,000 94,500
• Management fees charged to subsidiaries 15,394 10,576
(d) Payment of expenses made on behalf:

• by subsidiaries 2,715 19,871
• for subsidiaries (19,127) (8,291)
208
Notes to the
(e) Remuneration of key management personnel
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Salaries, bonuses and allowances 7,336 7,283 7,299 2,980

Social contribution costs 6 5 6 1
Defined contribution plan 1,089 1,074 1,089 385
Estimated monetary value of benefits
by way of usage of Group assets 290 288 290 37
Share-based expenses 5,985 3,112 5,985 1,006
Fee 826 812 532 532
15,532 12,574 15,201 4,941
Key management personnel comprise the Board of Directors and Senior Management personnel of the Group,
having authority and responsibility for planning, directing and controlling the activities of the Group entities
directly or indirectly.
(f) Government-related entities
The Government of Malaysia and bodies controlled or jointly controlled by the Government of Malaysia are
related parties of the Group by virtue of LTAT being a body controlled by the Government of Malaysia.
On 16 March 2011, Pharmaniaga Logistics Sdn. Bhd. (“PLSB”), a wholly-owned subsidiary has entered into
a Concession Agreement with the Government of Malaysia represented by the Ministry of Health, Malaysia
(“MOH”) for a period of ten (10) years expiring on 30 November 2019, for the right and authority to purchase,
store, supply and distribute the Approved Products (i.e. drugs and non-drugs approved by MOH) to the Public
Sector Customers (i.e. government hospital, health office, health clinic, dental clinic, or any health institution or
other similar facility within Malaysia which is operated and controlled by the MOH and as determined by the
MOH from time to time) and also for the development of Pharmacy Information System and Clinic Pharmacy
Systems in government hospitals and clinics.

Notes to the
(f) Government-related entities (continued)
In prior financial year, PLSB entered into Supply Agreements with three (3) teaching hospitals under Ministry of
Higher Education (“MOHE”), namely Universiti Sains Malaysia, Universiti Kebangsaan Malaysia and University
Malaya for the services of purchasing, storing, supplying and delivering to drugs and non-drugs. The Supply
Agreement shall expire on 30 November 2019.
Group
2017 2016
RM’000 RM’000
Sale of goods to MOH/MOHE 1,481,726 1,450,126
Amount due from MOH 3,198 3,257
Amount due from MOHE 4,481 7,756
(g) Significant outstanding balances
Significant outstanding balances arising from the above transactions are as follows:
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Amounts due from

Subsidiaries - - 57,268 236,264
Amounts due to
Immediate holding company 725 472 101 74
Subsidiaries - - 194,310 209,019
Related companies* 2,670 853 - -
* The related companies are subsidiaries of the immediate holding company.
38. SIGNIFICANT EVENT
On 13 January 2017, the Group had via its wholly owned subsidiary, Pharmaniaga Pristine Sdn. Bhd. (“PPSB”),
subscribed to the total issued and paid-up capital of Paradigm Industry Sdn. Bhd. (“PISB”) of RM2.00. On 29 March
2017, PISB increased its paid-up capital to RM100,000 through the issuance of 99,998 ordinary shares by way of
capitalisation of amount owing to PPSB (80%) and Sweetleaves Health Sdn. Bhd. (20%).
210
Notes to the
39. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency exchange risk and
cash flow interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial
performance.
The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the
development of the Group’s businesses whilst managing its risks. The Group has a written risk management framework
which sets out their overall business strategies, their tolerance to risk and has established processes to monitor and
control the risks. Such framework is approved by the Board of Directors and quarterly reviews are undertaken as
required.
Financial risk factors
(a) Market risk
(i) Foreign currency exchange risk
The Group operates internationally and is exposed to foreign currency exchange risk arising from various
currency exposures, primarily with respect to the US Dollar, Euro and IDR. Foreign currency exchange risk
arises from current commercial transactions, recognised assets and liabilities.
To manage the foreign exchange risk arising from future commercial transactions and recognised assets
and liabilities, the Group enters into contracts in Ringgit Malaysia denomination, where possible. Foreign
currency exchange risk arises when current commercial transactions or recognised assets or liabilities are
denominated in a currency that is not the entity’s functional currency.
As at 31 December 2017, if the functional currency had weakened/strengthened by 5% (2016: 5%) against
US Dollar with all other variables held constant, post tax profit for the financial year would have been
lower/ higher by RM405,000 (2016: higher/ lower by RM257,000) mainly as a result of foreign exchange
gains/losses on translation of US Dollar - denominated trade payables, other payables, trade receivables,
other receivables and deposits, cash and bank balances.
As at 31 December 2017, if the functional currency had weakened/strengthened by 5% (2016: 5%) against
Euro with all other variables held constant, post tax profit for the financial year would have been lower/
higher by RM13,000 (2016: lower/ higher by RM142,000) mainly as a result of foreign exchange losses/
gains on translation of Euro - denominated trade and other payables.
The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency
translation risk. As at 31 December 2017, if the functional currency had weakened/strengthened by 5%
(2016: 5%) against the IDR with all other variables held constant, the impact on equity would have been
approximately higher/lower by RM2,937,000 (2016: RM2,404,000) on translation upon consolidation.
No impact to income statement as the financial assets and liabilities denominated in IDR are in respect of
foreign subsidiaries where trade is conducted in the entity’s functional currency.

Notes to the
39. FINANCIAL RISK MANAGEMENT (CONTINUED)
Financial risk factors (continued)
(a) Market risk (continued)
(i) Foreign currency exchange risk (continued)
The financial assets and financial liabilities of the Group that are not denominated in its functional currency
are set out below:
31.12.2017
US Dollar Euro
RM’000 RM’000
Trade receivables 3,269 -

Other receivables 26 -
Deposits, cash and bank balances 5 -
Trade payables (13,616) -
Other payables (350) (331)
(10,666) (331)
31.12.2016
US Dollar Euro
RM’000 RM’000
Trade receivables 3,173 -

Other receivables 14,742 -
Deposits, cash and bank balances 43 -
Trade payables (11,151) (3,414)
Other payables (45) (330)
6,762 (3,744)
(ii) Cash flow interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
The Group’s interest bearing assets are primarily short term bank deposits with financial institutions. The
interest rates on these deposits are monitored closely to ensure they are maintained at favourable rates.
The Group considers the risk of significant changes to interest rates on deposits to be unlikely.
Interest rate exposure arises from the Group’s borrowings. The Group manages its interest rate exposure
by maintaining a prudent mix of fixed and floating rate borrowings.
212
Notes to the
(a) Market risk (continued)
(ii) Cash flow interest rate risk (continued)
As at 31 December 2017, if interest rates on Ringgit Malaysia - denominated borrowings of the Group
and the Company had been 50 (2016: 50) basis points lower/higher with all other variables held constant,
post tax profit for the financial year of the Group and of the Company would have been RM1,567,000
(2016: RM1,974,000) and RM234,000 (2016: RM340,000) higher/lower respectively, mainly as a result
of lower/higher interest expense.
As at 31 December 2017, if interest rates on Indonesian Rupiah - denominated borrowings of the Group
had been 50 (2016: 50) basis points lower/higher with all other variables held constant, post tax profit for
the financial year of the Group would have been RM444,000 (2016: RM383,000) higher/lower respectively,
mainly as a result of lower/higher interest expense.
(b) Credit risk
Credit risk is managed on Group basis, except for credit risk relating to accounts receivable balances. Each local
entity is responsible for managing and analysing the credit risk for each of their new clients before standard
payment and delivery terms and conditions are offered.
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss
to the Group. Credit risk arises from credit exposures to customers, including outstanding receivables, as well
as deposits, cash and bank balances.
For trade and other receivables, individual risk limits are set based on internal or external ratings in accordance with
limits set by the Board. The utilisation of credit limits is regularly monitored. No credit limits were exceeded during
the reporting period, and management does not expect any losses from non-performance by these counterparties.
The maximum exposure to credit risk is represented by the carrying amount of each financial assets in the
statement of financial position after deducting any impairment allowance. See Notes 18 and 19 for further
disclosure on credit risk.
Credit quality of financial assets
Information regarding credit quality of trade and other receivables is disclosed in Notes 18 and 19 respectively.
Deposits with licensed banks that are neither past due nor impaired are placed with or entered into with
reputable financial institutions with high credit ratings and no history of default.
(c) Liquidity risk
Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury.
Group treasury monitors rolling forecasts of the Group’s and the Company’s liquidity requirements to ensure it
has sufficient cash to meet operational needs at all times. Such forecasting takes into consideration the Group’s
and the Company’s debt financing plans, covenant compliance, compliance with internal statement of financial
position ratio targets and, if applicable external regulatory or legal requirements.

Notes to the
(c) Liquidity risk (continued)
Whilst the Group’s and the Company’s current liabilities exceeded their current assets by RM214,287,000 (2016:
RM185,321,000) and RM221,117,000 (2016: RM236,323,000) respectively, the Directors are of the view that
the Group and the Company will have sufficient cash flows for the next 12 months from the reporting date to
meet their cash flows requirements based on the undrawn committed borrowing facilities available to the Group
and the Company as disclosed in Note 27 to the financial statements. In addition, should the need arise, the
profitable subsidiaries can distribute dividends to the Company to enable the Company to meet its immediate
commitments as and when they fall due.
The table below analyses the Group and the Company’s financial liabilities into relevant maturity groupings
based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed
in the table are the contractual undiscounted cash flows and will not reconcile to the amounts disclosed on the
statements of financial position.
Between 3 Between
Less than months and 1 and More than
3 months 1 year 2 years 2 years
RM’000 RM’000 RM’000 RM’000
Group
At 31 December 2017
Financial liabilities
Borrowings 440,219 10,044 433 -
Trade payables 499,426 - - -
Other payables 44,123 - 457 -
holding company 725 - - -
Amounts due to related companies 2,670 - - -
At 31 December 2016
Borrowings 547,756 78,076 261 -
Trade payables 378,116 - - -
Amounts due to related companies 853 - - -
214
Notes to the
(c) Liquidity risk (continued)
Between 3 Between
Less than months and 1 and More than
3 months 1 year 2 years 2 years
RM’000 RM’000 RM’000 RM’000
Company
At 31 December 2017
Borrowings 59,248 - - -
Amounts due to subsidiaries 194,310 - - -
At 31 December 2016
Borrowings 130,525 - - -
Amounts due to subsidiaries 209,019 - - -
(d) Financial instruments by category
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Financial assets
Loans and receivables

Trade receivables 174,953 173,512 - -
Other receivables (net of GST/
VAT receivables and prepayments) 25,740 38,546 5,674 8,648
Deposits, cash and bank balances 27,893 70,456 177 377
Amounts due from subsidiaries - - 57,268 236,264

Notes to the
(d) Financial instruments by category (continued)
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Liabilities at amortised cost

Borrowings 444,317 616,912 59,000 130,000
Trade payables 499,426 378,116 - -
Other payables 44,580 64,335 3,432 4,040
holding company 725 472 101 74
Amounts due to related companies 2,670 853 - -
Amounts due to subsidiaries - - 194,310 209,019
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as total loans and borrowings
divided by total capital.
The gearing ratios are as follows:
Group Company
2017 2016 2017 2016
RM’000 RM’000 RM’000 RM’000
Total borrowings (Note 27) 444,317 616,912 59,000 130,000

Total equity attributable to equity
holders of the Company 528,046 530,631 396,222 339,927
Gearing ratio (times) 0.8 1.2 0.1 0.4
216
Notes to the
Capital risk management (continued)
Under the terms of its borrowing facilities undertaken by the Group and the Company during the financial year, the
Group and the Company are required to comply with the following financial covenants:
• The ratio of debt to earnings before interest, tax, depreciation and amortisation (“EBITDA”) is to be no more
than 3 to 1;
• The ratio of EBITDA to interest expense is to be no less than 5 to 1;
• Current ratio of a minimum of 1.1;
• The interest-bearing debt over equity ratio of not more than 3; and
• The ratio of Debt Service Coverage is to be a minimum of 1.25.
Included within bankers’ acceptances (unsecured) of the Group as disclosed in Note 27 to the financial statements
is RM15 million in respect of borrowings drawdown by PT Errita Pharma. The borrowings subject the subsidiary to
financial covenants such as current ratio, interest-bearing debt over equity ratio and Debt Service Coverage ratio which
require the subsidiary to have positive EBITDA. However, as at 31 December 2017, the subsidiary was in a negative
EBITDA position. The subsidiary has since obtained the waiver from the bank for compliance with the debt covenants
for the financial year ended 31 December 2017.
Other than the above, there is no non-compliance of financial covenants for borrowings of the Group and of the
Company during the financial year.
Fair value estimation
The carrying values of financial assets and financial liabilities of the Group and of the Company at the reporting date
approximated their fair values.
40. APPROVAL OF FINANCIAL STATEMENTS
The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on 1
March 2018.

Other Compliance UTILISATION OF PROCEEDS
CORPORATE PROPOSAL
RAISED FROM
Information There were no corporate proposals during the financial year

ended 31 December 2017.
CONTRACTS RELATING TO LOANS

RECURRENT RELATED PARTY TRANSACTIONS There were no material contracts relating to loans entered into by
At the 19th Annual General Meeting held on 6 April 2017, the the Company involving Directors and/or substantial shareholders.
Company obtained Shareholders’ Mandate to allow the Group
to enter into recurrent related party transactions of a revenue OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
or trading nature. The information disclosed in accordance with Pharmaniaga did not issue any Options, Warrants and
Section 3.1.5 of Practice Note 12 of Bursa Malaysia Securities Convertible Securities during the financial year ended 31
Berhad Listing Requirements are as follows: December 2017 except for the following:
Related party Nature of transactions Actual transactions Share Scheme

RM’000 The Share Scheme was approved by Company’s shareholders at
Boustead Provision of corporate and 1,374 the Extraordinary General Meeting held on 29 March 2016 and
Holdings administrative support subsequently implemented on 13 May 2016. The Share Scheme
Berhad services, internal audit comprises the Option Plan and Long Term Incentive Plan (“LTIP”).
function and training Option Plan
Boustead Provision of travelling 1,439 Option Price of Grand Total of Option to
Travel services RM5.04 Option Directors
Services
Granted 15,840,000 13,800,000
Sdn. Bhd.
Exercised (200,000) (200,000)
Tan Sri Dato’ Seri Lodin Wok Kamaruddin, Dato’ Farshila
Emran, Mohd Suffian Haji Haron and Daniel Ebinesan are Outstanding 15,640,000 13,600,000
deemed interested Directors/connected persons.
LTIP
AUDIT AND NON-AUDIT FEES Ordinary Share Grand Total of Shares to Executive
The audit and non-audit fees below are also disclosed in the Shares Director
Audited Financial Statements set out under Note 7 to the Granted 1,375,000 202,000
Financial Statements on page 156 of this Annual Report.
Vested (738,300) (109,300)
Audit Fees Company Group
RM’000 RM’000 Lapsed (30,700) -
Audit fees paid to the External 181 781 During the financial year, all shares under the LTIP were granted
Auditors for the financial year to selected Senior Management Officers.
ended 31 December 2017
Non-Executive Directors were granted options under the
Option Plan only.
Non-Audit Fees Company Group
RM’000 RM’000 Non-Executive Directors Amount of Amount of
options granted option exercised
Non-audit fees paid to the External 210 274
Auditors for the financial year Tan Sri Dato’ Seri Lodin 3,800,000 -
ended 31 December 2017 Wok Kamaruddin
Mohd Suffian Haji Haron 2,000,000 -

MATERIAL CONTRACT (Senior Independent)
During the financial year, there was no material contract
entered into by the Company and its subsidiaries involving Daniel Ebinesan 2,000,000 200,000
Directors’ and/or substantial shareholders’ interests.
Izzat Othman 2,000,000 -
Lieutenant General Dato’ 2,000,000 -

Seri Panglima Dr Sulaiman
Abdullah (Retired)
218
Analysis of
Shareholdings
As at 15 February 2018
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings No. of holders % No. of shares %
Less Than 100 727 13.18 14,900 0.00

100 to 1,000 2,261 40.97 1,066,117 0.41
1,001 to 10,000 2,070 37.51 7,115,243 2.74
10,001 to 100,000 398 7.21 9,660,327 3.72
100,001 to less than 5% of issued shares 60 1.09 68,274,746 26.28
5% and above of issued shares 2 0.04 173,689,699 66.85
TOTAL 5,518 100.00 259,821,032 100.00
30 LARGEST SHAREHOLDERS (as per the Register of Depositors)
No. Name of Shareholders No. of Shares Held % of Issued Capital
1 Boustead Holding Berhad 146,110,415 56.24

Account Non-Trading
2 Lembaga Tabung Angkatan Tentera 27,579,284 10.61
3 Lembaga Tabung Haji 11,586,700 4.46
4 Valuecap Sdn Bhd 9,340,500 3.59
5 Cimsec Nominees (Tempatan) Sdn Bhd 6,334,883 2.44

CIMB Bank for Che Lodin Bin Wok Kamaruddin (PBCL-0G0052)
6 Che Lodin Bin Wok Kamaruddin 6,165,265 2.37
7 Citigroup Nominees (Tempatan) Sdn Bhd 5,047,600 1.94

Employees Provident Fund Board
8 Kumpulan Wang Persaraan (Diperbadankan) 3,707,600 1.43
9 CIMB Group Nominees (Tempatan) Sdn Bhd 3,010,200 1.16

Yayasan Hasanah (AUR-VCAM)
10 Citigroup Nominees (Tempatan) Sdn Bhd 2,500,000 0.96

Kumpulan Wang Persaraan (Diperbadankan) (VCAM EQUITY FD)
11 Dasar Technologies Sdn Bhd 2,000,000 0.77
12 Maybank Nominees (Tempatan) Sdn Bhd 1,805,800 0.70

Pledged Securities Account for Au Kwan Seng
13 Amanahraya Trustees Berhad 1,774,700 0.68

Public Islamic Treasures Growth Fund

Analysis of
Shareholdings
30 LARGEST SHAREHOLDERS (as per the Register of Depositors) (continued)
No. Name of Shareholders No. of Shares Held % of Issued Capital
14 Chinchoo Investment Sdn Berhad 913,149 0.35
15 Yong Siew Yoon 811,364 0.31
16 Gan Teng Siew Realty Sdn Berhad 657,564 0.25
17 Citigroup Nominees (Asing) Sdn Bhd 649,060 0.25

CBNY for DFA Emerging Markets Small Cap Series
18 Affin Hwang Nominees (Tempatan) Sdn Bhd 596,200 0.23

Yayasan Warisan Perajurit
19 Public Nominees (Tempatan) Sdn Bhd 569,800 0.22

Pledged Securities Account for Au Kwan Seng (E-KLC)
20 Citigroup Nominees (Asing) Sdn Bhd 541,580 0.21

CBNY for Emerging Market Core Equity Portfolio
DFA Investment Dimensions Group Inc
21 Key Development Sdn Berhad 531,759 0.20
22 UOB Kay Hian Nominees (Asing) Sdn Bhd 527,697 0.20

Exempt an for UOB Kay Hian Pte Ltd (A/C Clients)
23 Amanahraya Trustees Berhad 470,100 0.18

Public Islamic Opportunities Fund
24 Citigroup Nominees (Tempatan) Sdn Bhd 465,500 0.18

Employees Provident Fund Board (Asianislamic)
25 Gemas Bahru Estates Sdn Bhd 432,588 0.17
26 CIMB Group Nominees (Tempatan) Sdn Bhd 415,000 0.16

Aiiman Asset Management Sdn Bhd for Lembaga Tabung Haji
27 Bidor Tahan Estates Sdn Bhd 400,600 0.15
28 Maybank nominees (Tempatan) Sdn Bhd 367,000 0.14

Etiqa Family Takaful Berhad (Family)
29 Mikdavid Sdn Bhd 366,058 0.14
30 Wong Wai Kuan 346,100 0.13
TOTAL 236,024,066 90.82
220
Analysis of
Shareholdings
SUBSTANTIAL SHAREHOLDERS ( as per the Register of Substantial Shareholders)
No. of Shares Held
No Name of Substantial Shareholders Direct % Indirect %
1 Boustead Holdings Berhad 146,110,415 56.24 - -

Account Non-Trading
2 Lembaga Tabung Angkatan Tentera 27,579,284 10.61 146,110,415 56.24
Directors’ Shareholding (as per register of Directors’ Shareholding)
No. of Shares Held in Pharmaniaga Berhad
No Name of Directors Direct % Indirect %
1 Che Lodin Bin Wok Kamaruddin 6,165,265 2.37 - -
2 Cimsec nominees (Tempatan) Sdn Bhd 6,334,883 2.44 - -

CIMB Bank for Che Lodin Bin Wok Kamaruddin
(PBCL-0G0052)
3 Cimsec Nominees (Tempatan) Sdn Bhd 300,000 0.12 - -

CIMB Bank for Ebinesan @ Daniel A/L Gnanakkan
(PBCL-0G0268)
4 Cimsec Nominees (Tempatan) Sdn Bhd 300,000 0.12 - -

(PB-PTS0017333)
5 Maybank Securities Nominees (Tempatan) Sdn Bhd 246,300 0.09 - -

Pledged Securities Account for Farshila Binti Emran
(Margin)
6 Mohd Suffian Bin Haron 60,000 0.02 - -

Group
Property List
No. Location and address of Brief description and Area Tenure and Age of Net Book Date of Revaluation
property existing use Building / Year of Building Value as at / Acquisition
Land (sq Expiry / Land 31/12/2017
meters) (Years) (RM’000)
1 Lot PT 46016, HS (D) 87359 A parcel of industrial 23,594 Freehold 23 24,868 14 March 2005
Mukim of Kapar, land with a detached
Klang, industrial building
Selangor Darul Ehsan comprising a 3-storey
office annexed at
Industrial Premises: the front, a single
No. 7, Lorong Keluli 1B, storey office building,
Kawasan Perindustrian automated storage
Bukit Raja Selatan, retrieval system (ASRS)
Seksyen 7, warehouse, a surau, a
40000 Shah Alam, guard house and an
Selangor Darul Ehsan inflammable store
2 Lot PT 46016, HS (D) 87359 A parcel of industrial 17,414 Freehold 20 14,039 14 March 2005
Mukim of Kapar, land with a single storey
Klang, laboratory building,
Selangor Darul Ehsan chiller and a guard
house
Industrial Premises:
No 7, Lorong Keluli 1B,
Kawasan Perindustrian
Bukit Raja Selatan,
Seksyen 7,
40000 Shah Alam,
3 HS (D) 145264, PT 70920, 3-storey shoplot 277 Freehold 3 3,356 3 October 2014
Mukim of Kapar,
Klang,
Shoplot:
No. 25, Jalan Keluli 7/109,
Bukit Raja Selatan,
Seksyen 7,
40000 Shah Alam,
222
4 HS (D) 145263, PT 70919, 3-storey shoplot 183 Freehold 3 1,945 3 October 2014
Mukim of Kapar,
Klang,
Shoplot:
No. 23, Jalan Keluli 7/109,
Bukit Raja Selatan,
Seksyen 7,
40000 Shah Alam,
5 HS (D) 22385 PT49, A parcel of Industrial 11,762 Leasehold 2 21,801 9 September 2015
Seksyen 15, land presently built of 99 years
Bandar Shah Alam, upon with a single expiring on
Daerah Petaling, storey warehouse with 12 January
Selangor Darul Ehsan 2 storey office annexed 2086
and a guard house
No. 11, Jalan Ragum 15/17,
Seksyen 15,
40200 Shah Alam,
6 Geran 44309 of An industrial land with 28,041 Freehold 17 55,267 21 August 2001
Lot 7, Mukim Pekan a main 2-storey
Puchong Perdana, detached factory
Daerah Petaling, industrial building
Selangor Darul Ehsan with a 3-storey office/
laboratory section at
Factory: the back and a single
No 7, Jalan PPU 3, storey warehouse
Taman Perindustrian section at the front,
Puchong Utama, a cafeteria/surau
47100 Puchong, building, a fire pump
Selangor Darul Ehsan room/cold water pump
room, an inflammable
store/refuse chamber,
chiller, boiler house,
waste water treatment
and a guard house

Group
Property List
7 Lot PT 1157, HS (M) 9726, A parcel of industrial 12,141 Leasehold 32 13,369 28 August 1991
Mukim of Kajang, land with 3 industrial of 99 years,
Hulu Langat, buildings, an office/ expiring
Selangor Darul Ehsan workshop, a canteen, on 29
chiller, boiler house, September
Factory: waste water treatment, 2086
No. 11A, Jalan P/1, a TNB sub-station and a
Kawasan Perusahaan Bangi, guard house
43650 Bandar Baru Bangi,
8 Lot 1024, Block 7, A parcel of industrial 6,560 Leasehold 21 6,125 3 November 2004
Muara Tebas Land, land with a 2-storey of 60 years,
District of Kuching, office, a warehouse expiring on
Sarawak and a guard house 15 August
2056
Lot 1024, Block 7,
Muara Tebas Land District,
Demak Laut Industrial Park,
93050 Kuching,
Sarawak
9 Country Lease 015377554, A parcel of industrial 7,851 Leasehold 15 3,188 21 January 2002
Kota Kinabalu, Sabah land with a 2-storey of 66 years,
office, warehouse and a expiring
Industrial Premises: guard house on 21
Lorong Kurma, December
Kolombong Industrial 2033
Centre,
KM 9, Off Jalan Tuaran
88450 Kolombong
Kota Kinabalu,
Sabah
224
10 HS (M) 1479, HS (M) 1480 3 contiguous 11/2 semi- 2,175 Freehold 20 985 11 November 1998
and HS (M) 1481, detached warehouses
Lot No. 3806, 3807 and with office
3808,
Mukim 13,
Daerah Seberang Perai
Tengah, Pulau Pinang
No. 1,3 & 5,
Lorong IKS Juru 8,
Taman Perindustrian Ringan
Juru, 14100 Simpang
Ampat, Seberang Perai,
Pulau Pinang
11 Flat No. 401-405, 5 units of 2–bedroom 296 Leasehold 24 *0 10 June 1993 and
3rd Floor, Block 5, flat for staff lodging of 99 years, 19 July 1995
Jalan 1/9, Section 1, expiring on
43650 Bandar Baru Bangi, 31 March
Selangor Darul Ehsan 2095
12 Flat No. 501, 503, 505 and 4 units of 2-bedroom 262 Leasehold 24 *0 11 June 1993
507, 4th Floor, Block 10, flat for staff lodging of 99 years,
Jalan 6C/11, Section 16, expiring on
43650 Bandar Baru Bangi, 31 March
Selangor Darul Ehsan 2095
13 Lot PT 10908, HS (M) 9124, 2-storey intermediate 128 Leasehold 31 *0 4 September

Mukim of Kajang, house for staff lodging of 99 years, 1987
Hulu Langat, expiring
Selangor Darul Ehsan on 3
September
House: 2086
No. 5, Jalan 4/4E,
Section 4

Group
Property List
14 Lot PR 10911, HS (M) 9127, 2-storey intermediate 128 Leasehold 31 *0 4 September 1987
Mukim of Kajang, house for staff lodging of 99 years,
Hulu Langat, expiring
Selangor Darul Ehsan on 3
September
House: 2086
No 11, Jalan 4/4E,
Section 4,
15 Lot 0111111, No. A parcel of industrial 40,469 Leasehold 40 14,827 6 March 2005
HM 144/1977 & Lot land with a 2-storey of 99 years,
PT 0000102, No. HM office, guard house, expiring on
237/1984, Mukim Sungai manufacturing block, 1 January
Pasir, Sungai Petani, warehouse block, 2083
Kedah Darul Aman flammable store, chiller,
boiler house, purified
Factory: water system and waste
Lot 24 & 25, Jalan water treatment
Perusahaan 8, Bakar Arang
Industrial Estate, 08000
Sungai Petani, Kedah Darul
Aman
16 Lot 276, 277 & 278, A parcel of building 60,737 Leasehold 21 27,741 1 June 2009
District of Mukim of land built upon a of 99 years,
Bandar Seri Iskandar, defected industrial expiring on
Perak Tengah, building with a 2– 13 March
Perak Darul Ridzuan storey office building, 2100
prayer room, canteen,
Factory: warehouse, penicillin
Lot 120, Taman and non penicillin
Farmaseutikal, 32610 production plant
Bandar Seri Iskandar, buildings, laboratory
Perak Darul Ridzuan building, chiller, boiler
house, TNB sub-station,
waste water treatment
and a guard house
17 Blok D, 20 & 21, Ruko Shop lots 453 Freehold 23 15 76 13 October 2003
Grand Mal, Bekasi, Jakarta, years to 2
Indonesia June 2036
226
18 Blok D 19, Ruko Grand Mal, Shop lots 204 Freehold 0 511 14 November
Bekasi, Jakarta, 2017
Indonesia
19 Jalan Depsos, Office and warehouse 1,860 Freehold 30 18 854 14 January 1999
67 – 70 Bintaro, Jaksel, years to 7 Revaluation 2001
Jakarta, Indonesia July 2028
20 Jalan Kalibokor Selatan, Office and warehouse 1,133 Leasehold 5 36 35 4 November 1971
152 Surabaya, years to 24 Revaluation 2001
Indonesia July 2021
21 Jalan Hayam Wuruk I Office and warehouse 1,072 Freehold 20 1 1,042 10 November 2016
No.45, Bandar Lampung, years to 17
Indonesia November
2036
22 Jalan Peundeuy, An industrial land with 16,492 Leasehold 33 8,237 8 May 1994
RT/RW 04/07, office, warehouse, of 30 years
Desa Bojongsalam guard house and to 01
Kecamatan Rancaekek, electricity sub-station October
Kabupaten Bandung, 2043
Indonesia
* Below RM500

Group Corporate
Directory
List of Companies Address
Pharmaniaga Berhad No. 7, Lorong Keluli 1B,
Pharmaniaga Logistics Sdn Bhd Kawasan Perindustrian Bukit Raja Selatan,
Pharmaniaga Marketing Sdn Bhd Seksyen 7,
Pharmaniaga Research Centre Sdn Bhd 40000 Shah Alam,
Pharmaniaga Pristine Sdn Bhd Selangor Darul Ehsan
Pharmaniaga Biomedical Sdn Bhd Tel : +603-3342 9999
Pharmaniaga International Corporation Sdn Bhd Fax : +603-3341 7777
Mailing Address:
P.O. Box 2030,
Pusat Bisnes Bukit Raja,
40800 Shah Alam,
Pharmaniaga Manufacturing Berhad No. 11A, Jalan P/1,
Kawasan Perusahaan Bangi,
Tel : +603-8925 7880
Fax : +603-8925 6177
Idaman Pharma Manufacturing Sdn Bhd Lot No. 24 & 25, Jalan Perusahaan 8,
(Sungai Petani Branch) Bakar Arang Industrial Estate,
08000 Sungai Petani,
Kedah Darul Aman
Tel : +604-4213 011
Fax : +604-4215 731
Idaman Pharma Manufacturing Sdn Bhd Lot 120, Taman Farmaseutikal,
(Seri Iskandar Branch) 32610 Bandar Seri Iskandar,
Perak Darul Ridzuan
Tel : +605-371 2020
Fax : +605-371 1940/1950
Pharmaniaga LifeScience Sdn Bhd Lot 7, Jalan PPU 3,
Taman Perindustrian Puchong Utama,
47100 Puchong,
Tel : +603-8061 2006
Fax : +603-8061 2875
Bio-Collagen Technologies Sdn Bhd No. 11, Jalan Perindustrian Balakong Jaya 2/3,
Taman Perindustrian Balakong Jaya 2,
43300 Seri Kembangan, Selangor Darul Ehsan
Tel : +603-8959 9710
Fax : +603-8945 9910
228
List of Companies Address
Pharmaniaga Logistics Sdn Bhd 1, 3 & 5, Lorong IKS Juru 8,
(Juru Branch) Taman Perindustrian Ringan Juru,
14100 Simpang Ampat,
Seberang Prai, Pulau Pinang
Tel : +604-508 3330/1/2
Fax : +604-508 3111
Pharmaniaga Logistics Sdn Bhd Lot 1024, Block 7,
(Kuching Branch) Muara Tebas Land District,
Demak Laut Industrial Park,
93050 Kuching, Sarawak
Tel : +6082-432 800
Fax : +6082-432 806
Pharmaniaga Logistics Sdn Bhd Lorong Kurma,
(Kota Kinabalu Branch) Kolombong Industrial Centre,
KM 9 Off Jalan Tuaran,
88450 Kolombong,
Kota Kinabalu, Sabah
Tel : +6088-439 188
Fax : +6088-437 288
Paradigm Industry Sdn Bhd No. 36-G Jalan Klang Sentral 2/KU5,
Klang Sentral,
41050 Klang, Selangor
Tel : +603-3358 6760
Fax : +603-3362 6761
PT Millennium Pharmacon International Tbk Panin Bank Centre,
(HQ) 9th Floor, Jl. Jenderal Sudirman,
Senayan, Jakarta,
10270 Indonesia
Tel : +62-21 727 88906/7
Fax : +62-21 722 8090
PT Errita Pharma Jalan Peundeuy,
(Bandung) RT/RW 04/07,
Desa Bojongsalam,
Kecamatan Rancaekek,
Kabupaten Bandung,
Indonesia
Tel : +62-22 794 9062/4
Fax : +62-22 794 9063
PT Mega Pharmaniaga (Dormant) Komplek Perkantoran Graha Elok Mas,
(Jakarta) Blok HH, No. 83,
Jl. Panjang, Kebon Jeruk,
Jakarta, 11510 Indonesia
Tel : +62-21 295 08987
Fax : +62-21 295 08988

Notice of
Annual General Meeting
NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting of Pharmaniaga Berhad will
be held at Mutiara Ballroom, Ground Floor, Royale Chulan Damansara, No. 2, Jalan PJU 7/3, Mutiara
Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 11 April 2018 at 9.00 a.m. for
the purpose of transacting the following business:
AS ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 December 2017 together (Please refer to
with the Reports of the Directors and Auditors. Note 1)
2. To re-elect the following Directors who retire as Directors of the Company by rotation in accordance
with Article 88 of the Company’s Constitution, and being eligible, offer themselves for re-election.
i) Dato’ Farshila Emran Resolution 1
ii) Encik Izzat Othman Resolution 2
3. To approve payment of Directors’ fees of RM676,000 for Pharmaniaga Berhad and its subsidiaries in
respect of the financial year ended 31 December 2017. Resolution 3
4. To approve Directors’ meeting allowances of RM49,500 for Pharmaniaga Berhad and its subsidiaries for
the financial year ended 31 December 2017. Resolution 4
5. To approve payment of Directors’ fees and meeting allowances for Pharmaniaga Berhad and its
subsidiaries from 1 January 2018 until the conclusion of the next Annual General Meeting of the
Company. Resolution 5
6. To re-appoint Messrs. PricewaterhouseCoopers PLT as auditors of the Company and to hold office
until the conclusion of the next Annual General Meeting, at a remuneration to be determined by the
Directors. Resolution 6
230
AS SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolutions:
7. ORDINARY RESOLUTION
AUTHORITY TO ALLOT AND ISSUE SHARES IN GENERAL PURSUANT TO SECTIONS 75 AND 76
OF THE COMPANIES ACT 2016 Resolution 7
“THAT pursuant to Sections 75 and 76 of the Companies Act 2016 and subject to the approvals of the
relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue
shares in the capital of the Company from time to time and upon such terms and conditions and for
such purposes as the Directors, may in their absolute discretion deem fit, provided that the aggregate
number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of
the Company for the time being and that the Directors be and are hereby also empowered to obtain
approval from the Bursa Malaysia Securities Berhad for the listing and quotation of the additional shares
so issued and that such authority shall continue to be in force until the conclusion of the next Annual
General Meeting of the Company.”
8. ORDINARY RESOLUTION
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY
TRANSACTIONS Resolution 8
“THAT, subject always to the Companies Act 2016 (“Act”), the Company’s Constitution and the Main
Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given for
the renewal of the mandate granted by the shareholders of the Company on 6 April 2017, authorising
the Company and/or its subsidiaries to enter into recurrent transactions of a revenue or trading nature
with the Related Parties as specified in Section 2.2 of the Circular to Shareholders dated 13 March
2018, provided that the transactions are:
i) necessary for the day to day operations;
ii) carried out in the ordinary course of business and on normal commercial terms which are not more
favourable to the Related Parties than those generally available to the public; and
iii) are not to the detriment of the minority shareholders.
AND THAT such approval shall continue to be in force until:
i) the conclusion of the next Annual General Meeting (“AGM”) of the Company, at which time it will
lapse, unless by a resolution passed at the said AGM, such authority is renewed;
ii) the expiration of the period within which the next AGM of the Company is required to be held
pursuant to Section 340(2) of the Act (but shall not extend to such extension as may be allowed
pursuant to Section 340(4) of the Act); or
iii) revoked or varied by a resolution passed by the Shareholders in a General Meeting;
whichever is the earlier.

Notice of
AND FURTHER THAT the Directors of the Company be authorised to complete and do all such acts and things (including
executing all such documents as may be required) as they may consider expedient or necessary to give effect to this Shareholders’
Mandate.”
9. To transact any other business of the Company of which due notice shall have been received.
By Order of the Board
TASNEEM MOHD DAHALAN

Secretary
Kuala Lumpur
13 March 2018
232
Notes
1. Audited Financial Statements
The Audited Financial Statements laid at this meeting pursuant to Section 340(1)(a) of the Companies Act 2016 are meant for
discussion only. It does not require shareholders’ approval, and therefore, shall not be put forward for voting.
2. Ordinary Resolutions 1 and 2 – Proposed Re-election of Directors in accordance with Article 88 of the Company’s Constitution
Article 88 of the Company’s Constitution provides amongst others that at least one-third of the Directors who are subject to
retirement by rotation or, if their number is not three (3) or multiple of three (3), the number nearest to one-third shall retire
from office provided always that all Directors shall retire from office once at least in every three (3) years and shall be eligible
for re-election.
Directors who are standing for re-election pursuant to Article 88 of the Company’s Articles of Association are as follows:
i) Dato’ Farshila Emran
ii) Encik Izzat Othman
The Nomination Committee (“NC”) of the Company has assessed the criteria and contribution of Dato’ Farshila Emran
and Encik Izzat Othman and recommended for their re-election. The Board endorsed the NC’s recommendation that Dato’
Farshila Emran and Encik Izzat Othman be re-elected as Directors of the Company. The profiles of the Directors who are
standing for re-election are set out on page 17 and 20 of the Annual Report; while details of their interests in securities are
set out on pages 103 to 104 of the Annual Report.
3. Ordinary Resolutions 3, 4, and 5 – Directors’ Remuneration
Section 230(1) of the Companies Act 2016 provides amongst others that the fees of the Directors and any benefits payable
to the Directors of a listed company and its subsidiaries shall be approved at a general meeting.
In this respect, the Board wishes to seek shareholders’ approval for the following payments to the Directors of Pharmaniaga
Berhad at the Twentieth Annual General Meeting in three (3) separate resolutions as below:
Ordinary Resolution 3 seeks approval for payment of Directors’ fees in respect of the financial year ended 31 December
2017:
i) RM532,000 for Pharmaniaga Berhad.
ii) RM144,000 for subsidiaries of Pharmaniaga Berhad.
Ordinary Resolution 4 seeks approval for payment of Directors’ meeting allowances in respect of the financial year ended
31 December 2017:
i) RM37,250 for Pharmaniaga Berhad.
ii) RM12,250 for subsidiaries of Pharmaniaga Berhad.

Notice of
Ordinary Resolution 5 seeks approval for payment of Directors’ fees and meeting allowances from 1 January 2018
until the conclusion of the next Annual General Meeting of the Company comprises the following, with or without
modifications:
Pharmaniaga Berhad
Annual Fees
No Directors
(RM)
1 Tan Sri Dato’ Seri Lodin Wok Kamaruddin 175,000
2 Mohd Suffian Haji Haron 150,000
3 Izzat Othman 130,000
4 Daniel Ebinesan 110,000
5 Lieutenant General Dato’ Seri Panglima Dr Sulaiman Abdullah (Retired) 110,000
Meeting Allowance (per meeting)

(RM)
Board of Directors Chairman 1,000
Member 1,000
Board Committees Chairman 750
Member 500
Subsidiaries of Pharmaniaga Berhad

Amount
Name Position Held Type
(RM)
PT Errita Pharma
Dato’ Farshila Emran Directors’ Fee (annual) 30,000
Director
Meeting allowance – per meeting 1,000
PT Millennium Pharmacon International Tbk
Directors’ Fee (annual) 30,000

Meeting allowance – per meeting
Director
• Board 1,000
• Board Committees 750
Izzat Othman PT Errita Pharma
Directors’ Fee (annual) 48,000

Director
Meeting allowance – per meeting 1,000
Pharmaniaga Logistics Sdn Bhd
Director Directors’ Fee (annual) 36,000
4. Ordinary Resolution 6 – Re-appointment of Auditors
The Board and Audit Committee of the Company are satisfied with the quality of service, adequacy of resources provided,
communication, interaction skills and independence, objectivity and professionalism demonstrated by the External Auditors,
Messrs. PricewaterhouseCoopers PLT in carrying out their functions. Being satisfied with the External Auditors’ performance,
the Board recommends their re-appointment for shareholders’ approval at the Twentieth Annual General Meeting.
PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146) was registered on 2 January 2018 and with effect from that date,
PricewaterhouseCoopers (AF 1146), a conventional partnership was converted to a limited liability partnership.
234
5. Explanatory Notes to Special Business
a) Ordinary Resolution 7 - Authority for Directors to Allot and Issue Shares
Ordinary Resolution 7, if passed, will give powers to the Directors to issue up to a maximum of 10% of the issued share capital
of the Company for the time being for such purposes as the Directors consider would be in the interest of the Company.
This authority will, unless revoked or varied by the Company at a general meeting, expire at the conclusion of the next
Annual General Meeting.
The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to
further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.
As at the date of this Notice, no new shares were issued pursuant to the authority granted to the Directors at the Nineteenth
Annual General Meeting held on 6 April 2017, the mandate of which will lapse at the conclusion of the Twentieth Annual
General Meeting to be held on 11 April 2018.
b) Ordinary Resolution 8 - Recurrent Related Party Transactions
Ordinary Resolution 8, if passed, will enable the Company and/or its Subsidiaries to enter into recurrent transactions
involving the interests of Related Parties, which are of a revenue or trading nature and necessary for the Group’s day-to-
day operations, subject to the transactions being carried out in the ordinary course of business and on terms not to the
detriment of the minority shareholders of the Company (“Mandate”).
Further information on the Mandate is set out in the Circular to Shareholders dated 13 March 2018.
6. Appointment of Proxy
a) A member of the Company entitled to attend and vote at the meeting is entitled to appoint any person to be his proxy to
attend and vote in his stead. A proxy may but need not be a member of the Company.
b) In the case of a Corporation, the proxy should be executed under the hand of a duly authorised officer.
c) A member of the Company is entitled to appoint more than one proxy to attend and vote at the same meeting in his
stead, provided that the member specifies the proportion of his shareholdings to be represented by each proxy.
d) Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central
Depositories) Act 1991, which holds ordinary shares in the Company for multiple beneficial owners in one securities
account (omnibus account), there is no limit to the number of proxies which the exempt authorised nominee may appoint
in respect of each omnibus account it holds.
e) The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, should be
deposited at the office of the Company’s Share Registrar, Tricor Investor & Issuing House Services Sdn Bhd, located at Unit
32-01, Level 32, Tower A, Vertical Business Suite Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur or
its Customer Service Centre at Unit G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi,
59200 Kuala Lumpur, no later than Monday, 9 April 2018 at 9.00 a.m.
f) Only members registered in the Record of Depositors as at 2 April 2018 shall be eligible to attend the meeting or appoint
a proxy to attend and vote on his/her behalf.
g) Pursuant to Paragraph 8.29A of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all the
resolutions set out in this Notice will be put to vote by poll.

This page is intentionally left blank.
Proxy (467709-M)
Form Annual Report 2017 (Incorporated in Malaysia)
I/We NRIC (New)/Company No.:

(INSERT FULL NAME IN BLOCK CAPITAL)
of
(FULL ADDRESS)
being a member of PHARMANIAGA BERHAD, hereby appoint*
NRIC (New) No.:

of
(FULL ADDRESS)
and or NRIC (New) No.:

of
(FULL ADDRESS)
*or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to attend and vote for *me/us on *my/our behalf, at the
Twentieth Annual General Meeting of the Company to be held at Mutiara Ballroom, Ground Floor, Royale Chulan Damansara,
No. 2 Jalan PJU 7/3, Mutiara Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 11 April 2018 at 9.00 a.m.
or any adjournment thereof, to vote as indicated below:
No Resolution For Against

1 Re-election of Dato’ Farshila Emran
2 Re-election of Encik Izzat Othman
3 Approval of Directors’ fees for the financial year ended 31 December 2017
4 Approval of Directors’ meeting allowances for the financial year ended 31 December 2017
Approval of Directors’ fees and meeting allowances for Pharmaniaga Berhad and its
5
subsidiaries from 1 January 2018
6 Re-appointment of Messrs. PricewaterhouseCoopers PLT as Auditors
7 Approval for Directors to allot and issue shares
8 Renewal of Shareholders’ Mandate for recurrent related party transactions
Dated this day of 2018
No. of ordinary shares held:

CDS account no. of authorised nominee:
Proportion of shareholdings First Proxy: %
to be represented by proxies
Second Proxy: %
Signature of Member
Contact No.:
NOTES
(a) If you wish to appoint as a proxy some person other account (omnibus account), there is no limit to the number
than the Chairman of the Meeting, please insert in block of proxies which the exempt authorised nominee may
letters the full name and address of the person of your appoint in respect of each omnibus account it holds.
choice and initial the insertion at the same time deleting
the words “the Chairman of the Meeting”. A proxy need (e) The instrument appointing a proxy and the power of
not be a member of the Company but must attend the attorney or other authority (if any) under which it is signed,
Meeting in person to vote. Please indicate with an “X” in should be deposited at the office of the Company’s Share
the appropriate box how you wish your vote to be cast in Registrar, Tricor Investor & Issuing House Services Sdn Bhd,
respect of each Resolution. located at Unit 32-01, Level 32, Tower A, Vertical Business
Suite, Avenue 3, Bangsar South, No. 8 Jalan Kerinchi,
(b) In the case of a Corporation, the proxy should be executed 59200 Kuala Lumpur or its Customer Service Centre at Unit
under the hand of a duly authorised officer. G-3, Ground Floor, Vertical Podium, Avenue 3, Bangsar
South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, no later
(c) A member of the Company is entitled to appoint more than than Monday, 9 April 2018 at 9.00 a.m.
one proxy to attend and vote at the same meeting in his
stead, provided that the member specifies the proportion (f) Only members registered in the Record of Depositors as
of his shareholdings to be represented by each proxy. at 2 April 2018 shall be eligible to attend the meeting or
appoint a proxy to attend and vote on his/her behalf.
(d) Where a member of the Company is an exempt authorised
nominee as defined under the Securities Industry (Central (g) Pursuant to Paragraph 8.29A of the Main Market Listing
Depositories) Act 1991, which holds ordinary shares in the Requirements of Bursa Malaysia Securities Berhad, all the
Company for multiple beneficial owners in one securities resolutions will be put to vote by poll.
Fold here
STAMP
Share Registrar of Pharmaniaga Berhad
Tricor Investor & Issuing House Services Sdn Bhd (11324-H)

Unit 32-01,
Level 32, Tower A,
Vertical Business Suite, Avenue 3,
Bangsar South,
No. 8, Jalan Kerinchi,
59200 Kuala Lumpur
Fold here

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c o n t e n t s

3 About Us 83 Statement on Risk Management and Internal

All figures are in RM Million unless

OTHER FINANCIAL STATISTICS

SHAREHOLDERS’ EQUITY EARNINGS PER SHARE

NET DIVIDEND PER SHARE NET ASSETS PER SHARE

DATO’ FARSHILA EMRAN

MOHD SUFFIAN HAJI HARON

LIEUTENANT GENERAL DATO’ SERI PANGLIMA DR SULAIMAN ABDULLAH (RETIRED)

FINANCIAL ANNUAL REPORT

First Quarter First Interim Third Interim

Third Quarter Second Interim Fourth Interim

Mohd Suffian Haji Haron

Dato’ Farshila Emran

Tan Sri Dato’ Seri Lodin Wok Kamaruddin

Date of first appointment to the Board: 29 April 2011

Board Meeting attended in the financial year: 4/4

Directorship in other public listed companies

Directorship in public companies

Any family relationship with Director and/or major shareholder of

Working experience and occupations

Date of first appointment to the Board: 25 March 2011

Board Committee(s): None

Board meeting attended in the financial year: 4/4

Directorship in other public listed companies: None

Directorship in public companies: None

Any family relationship with Director and/or major shareholder of

Working experience and occupations

Date of first appointment to the Board: 29 April 2011

Board Meeting attended in the financial year: 4/4

Directorship in other public listed companies: None

Directorship in public companies

Any family relationship with Director and/or major shareholder of Pharmaniaga

Working experience and occupations

After 13 years of service, he left the Government Service to serve a Government

Date of first appointment to the Board: 25 March 2011

Board Meeting attended in the financial year: 4/4

Directorship in other public listed companies: None

Directorship in public companies

Any family relationship with Director and/or major shareholder of

Working experience and occupations

He is a member of the Board of Trustees of Kumpulan Wang Simpanan

Date of first appointment to the Board: 25 March 2011

Board Meeting attended in the financial year: 4/4

Directorship in other public listed companies: None

Directorship in public companies: None

Any family relationship with Director and/or major shareholder of

Working experience and occupations

He is a partner in Messrs. Azzat & Izzat Advocates & Solicitors and

Date of first appointment to the Board: 29 December 2011

Board Meeting attended in the financial year: 4/4

Directorship in other public listed companies: None

Directorship in public companies: None

Any family relationship with Director and/or major shareholder of

Working experience and occupations

He has vast experience in the management and supervision of Malaysian

Dato’ Farshila Emran

As expressed on page 17 of the Profile of Directors.