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Concentrations of Risks

6 Months Ended

Jun. 30, 2017

NOTE 19 - CONCENTRATIONS OF RISKS

(a) Major customers

For service income:

For the three months ended June 30, 2017, only one customer accounted for 10% or more of the service income presented as follows:

	For the three months ended June 30, 2017					June 30, 2017
	Revenues		Percentage of revenues			Trade accounts receivable

Customer A	$	291,000		28	%		290,000
Total:	$	291,000		28	%	$	290,000

For the three months ended June 30, 2016, two customers accounted for 10% or more of the service income presented as follows:

	For the three months ended June 30, 2016					June 30, 2016
	Revenues		Percentage of revenues			Trade accounts receivable

Customer B	$	200,000		27	%	$	-
Customer C, related party		98,106		13	%		-
Total:	$	298,106		40	%	$	-

For the six months ended June 30, 2017, only one customer accounted for 10% or more of the service income presented as follows:

	For the six months ended June 30, 2017					June 30, 2017
	Revenues		Percentage of revenues			Trade accounts receivable

Customer A		291,000		16	%		290,000
Total:	$	291,000		16	%	$	290,000

For the six months ended June 30, 2016, two customers accounted for 10% or more of the service income presented as follows:

	For the six months ended June 30, 2016					June 30, 2016
	Revenues		Percentage of revenues			Trade accounts receivable

Customer B	$	200,000		17	%	$	-
Customer C, related party		131,079		11	%		-
Total:	$	331,079		28	%	$	-

(b) Major vendors

For the three months ended June 30, 2017 and 2016, no vendor accounted for 10% or more of the Company’s cost of revenues, with no accounts payable balance at year-end.

For the six months ended June 30, 2017 and 2016, no vendor accounted for 10% or more of the Company’s cost of revenues, with no accounts payable balance at year-end.

Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

(d) Interest rate risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates. The Company’s interest-rate risk arises from bank loans. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates.

(e) Exchange rate risk

The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in MYR and RMB and a significant portion of the assets and liabilities are denominated in MYR and RMB. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$, MYR and RMB. If MYR and RMB depreciates against US$, the value of MYR and RMB revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose it to substantial market risk.

(f) Economic and political risks

Substantially all of the Company’s services are conducted in Malaysia, the PRC and Asian region. The Company’s operations are subject to various political, economic, and other risks and uncertainties inherent in Malaysia. Among other risks, the Company’s operations are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.