Annual Report 2014 - malaysiastock.biz 6B Persiaran Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Tel : 03-7688 9888 Fax : 03-7688 9881 Email : [email protected]

INGENUITY CONSOLIDATED BERHAD (609423 V)

Annual Report 2014

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Ingenuity Consolidated Berhad (609423-V)

12th Floor, Persof t Tower, 6B Persiaran Tropicana,Tropicana Golf & Country Resor t ,47410 Petaling Jaya, SelangorTel : 03-7688 9888Fax : 03-7688 9881Email : [email protected] : www.ingenuity.com.my

Creating Revolution

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Excellent Service - Our customers are the reason we are in business. And customer satisfaction is our no.1 priority.

Pioneering Technology - We thrive on change and will constantly keep on top of today’s and tomorrow’s technology.

Value Driven - We deliver solutions aligned with our clients’ goals by being proactive, process oriented, and quality driven.

Integrity - We practice good corporate governance while maintaining the highest level of ethics in whatever we do.

Respect and Responsibility - We respect everybody we interact with and we are responsible in all our actions.

A Winning Teamspirit - Our people are our strength. We foster a winning team spirit and a caring attitude, earning loyalty and commitment.

Corporate Values

To be the leading one-stop ICT solutions provider in the nation.

Simplify - We simplify and humanise state of the art technology solutions to drive your business value.

Consumer Focused - We deliver flexible, efficient, reliable and cost-effective solutions for every industry in all sizes.

Optimisation - We optimise operational efficiency with consumer technology and best practices.

Transformation - We strive to integrate technology seamlessly to transform your business outcome.

Seamless Distribution - We distribute ICT hardware and software, while creating differentiating value for our business partners and customers.

Mission

Our Vision

0204 05 0711

28

16 24

3235

110113115

Ingenuity Today

Notice of Annual General MeetingProxy Form

Analysis of ShareholdingsAnalysis of Warrant Holdings

Financial Statements109 List of Property

Statement on Risk Management & Internal Control

Additional Compliance InformationStatement of Corporate Governance

Audit Committee Report

14 Financial HighlightsChairman’s StatementDirectors’ ProfileCorporate InformationCorporate Structure

Contents

The next revolution, like the first one, will be a response to changing patterns of inadequacy, it will create upheaval but more importantly, it will create opportunities and all businesses should adjust to these realities. Creating revolution is hard and changes are never easy but Ingenuity will never stop fighting. We will overcome every challenges, evolve and stand firmly to achieve our goals and ambitions.

Cover Rationale

Excellent Service - Our customers are the reason we are in business. And customer satisfaction is our no.1 priority.

Pioneering Technology - We thrive on change and will constantly keep on top of today’s and tomorrow’s technology.

Value Driven - We deliver solutions aligned with our clients’ goals by being proactive, process oriented, and quality driven.

Integrity - We practice good corporate governance while maintaining the highest level of ethics in whatever we do.

Respect and Responsibility - We respect everybody we interact with and we are responsible in all our actions.

A Winning Teamspirit - Our people are our strength. We foster a winning team spirit and a caring attitude, earning loyalty and commitment.

Corporate Values

To be the leading one-stop ICT solutions provider in the nation.

Simplify - We simplify and humanise state of the art technology solutions to drive your business value.

Consumer Focused - We deliver flexible, efficient, reliable and cost-effective solutions for every industry in all sizes.

Optimisation - We optimise operational efficiency with consumer technology and best practices.

Transformation - We strive to integrate technology seamlessly to transform your business outcome.

Seamless Distribution - We distribute ICT hardware and software, while creating differentiating value for our business partners and customers.

Mission

Our Vision

0204 05 0711

28

16 24

3235

110113115

Ingenuity Today

Notice of Annual General MeetingProxy Form

Analysis of ShareholdingsAnalysis of Warrant Holdings

Financial Statements109 List of Property


Additional Compliance InformationStatement of Corporate Governance


14 Financial HighlightsChairman’s StatementDirectors’ ProfileCorporate InformationCorporate Structure

Contents

The next revolution, like the first one, will be a response to changing patterns of inadequacy, it will create upheaval but more importantly, it will create opportunities and all businesses should adjust to these realities. Creating revolution is hard and changes are never easy but Ingenuity will never stop fighting. We will overcome every challenges, evolve and stand firmly to achieve our goals and ambitions.

Cover Rationale

2

Annual Report 2014

Ingenuity TodayEMBARKING ON TRANSFORMATION FOR SUSTAINABLE GROWTH

Ingenuity is a publicly traded diversified business Group on the Bursa Stock Exchange and made its first significant breakthrough with the launch of its FiRST Financial Management System (FMS) and FiRST Customer Relationship Management (CRM) software products. With over a decade of steady successes, the Group is now transforming beyond software solutions business into system integration & services, IT hardware & software distribution and services, and telecommunication products & distribution services.

As part of this transformation, the Group is embarking on an exciting new direction into new businesses and strategies. The Group has evolved into a new generation of organisation, further strengthened by a new management team that is passionate and committed to go the extra mile to serve our small and medium enterprises (SMEs) and multinational clients (MNCs) better. We continue to strive towards giving them better ways to capture, organise, protect and access business information.The redirection of business model and strategy therefore calls for necessary modifications in the company mission and vision. This also demands for the realignment of the overall values and practices. The Group’s on-going commitment to diversify its ICT businesses into software solutions, system integration & services, IT hardware & software distribution and services and telecommunication products & distribution services, brings Ingenuity closer to being the leading one-stop ICT solutions provider in the nation.

Ingenuity Consolidated Berhad (Ingenuity) is a “Total Business ICT Solutions Provider” in Malaysia that aims to simplify and humanise state of the art technology solutions to drive business value for our clients.

CORE BUSINESSES

Ingenuity is a key player in the Malaysian ICT arena, mainly in four major IT sectors – of Business Software Solutions, System Integration & Services, IT Hardware & Software Distribution and Services, and Telecommunication Products & Distribution Services.

SYSTEM INTEGRATION & SERVICES• Network Infrastructure Maintenance• Disaster Recovery Solution• Server Management Solutions

BUSINESS SOFTWARE SOLUTIONS• Hospital Information System (HIS)• OpenERP – OpenSource ERP Solution• FiRST Customer Relationship Management (CRM) Software• Hotel Management Solution

IT HARDWARE & SOFTWARE DISTRIBUTION AND SERVICES• Software/Desktop Applications• Hardware from world leading brands; Acer, ZTE, Toshiba, Samsung, Seagate, BenQ, etc.• Networking/Data Communication Peripherals• Extended Warranty Services• Payment gateway service provider• Warehousing solutions, delivery end-to-end from vendor till end-user• 1-stop solutions for e-Commerce

TELECOMMUNICATION PRODUCTS & DISTRIBUTION SERVICES• Hand phones• Modems• Accessories• Reload coupons• Prepaid/postpaid SIM cards• SIM cards• Payment gateway service provider• Warehousing solutions, delivery end-to-end from vendor till end-user• 1-stop solutions for e-Commerce

BRIDGING THE GAP

“Bridging the Gap” is our new corporate tagline that underlines our commitment to bridge the gap between our customers’ business needs and their goals with solutions that will transform their business outcome. Focusing on consumer technology convergence, the Group makes technology an asset to its customers. Ingenuity delivers flexible, efficient and cost-effective ICT solutions to drive customers’ business value and support their unique business strategy in this competitive market place. The Group is ready to connect the dots by helping your businesses react, adapt and thrive in this fast-evolving technology world, while keeping your business a step ahead.

The Company has long standing clients across various high growth industries such as logistics, oil and gas, manufacturing, consumer and retail services. In year 2000, Ingenuity was granted the Multimedia Super Corridor (MSC) status for its contributions to the borderless marketing, MSC Smart Schools flagship application, R&D into predictive CRM with financial data protocol and utilisation of knowledge workers and technology transfer.

3


Ingenuity TodayEMBARKING ON TRANSFORMATION FOR SUSTAINABLE GROWTH

Ingenuity is a publicly traded diversified business Group on the Bursa Stock Exchange and made its first significant breakthrough with the launch of its FiRST Financial Management System (FMS) and FiRST Customer Relationship Management (CRM) software products. With over a decade of steady successes, the Group is now transforming beyond software solutions business into system integration & services, IT hardware & software distribution and services, and telecommunication products & distribution services.

As part of this transformation, the Group is embarking on an exciting new direction into new businesses and strategies. The Group has evolved into a new generation of organisation, further strengthened by a new management team that is passionate and committed to go the extra mile to serve our small and medium enterprises (SMEs) and multinational clients (MNCs) better. We continue to strive towards giving them better ways to capture, organise, protect and access business information.The redirection of business model and strategy therefore calls for necessary modifications in the company mission and vision. This also demands for the realignment of the overall values and practices. The Group’s on-going commitment to diversify its ICT businesses into software solutions, system integration & services, IT hardware & software distribution and services and telecommunication products & distribution services, brings Ingenuity closer to being the leading one-stop ICT solutions provider in the nation.

Ingenuity Consolidated Berhad (Ingenuity) is a “Total Business ICT Solutions Provider” in Malaysia that aims to simplify and humanise state of the art technology solutions to drive business value for our clients.

CORE BUSINESSES

Ingenuity is a key player in the Malaysian ICT arena, mainly in four major IT sectors – of Business Software Solutions, System Integration & Services, IT Hardware & Software Distribution and Services, and Telecommunication Products & Distribution Services.

SYSTEM INTEGRATION & SERVICES• Network Infrastructure Maintenance• Disaster Recovery Solution• Server Management Solutions

BUSINESS SOFTWARE SOLUTIONS• Hospital Information System (HIS)• OpenERP – OpenSource ERP Solution• FiRST Customer Relationship Management (CRM) Software• Hotel Management Solution

IT HARDWARE & SOFTWARE DISTRIBUTION AND SERVICES• Software/Desktop Applications• Hardware from world leading brands; Acer, ZTE, Toshiba, Samsung, Seagate, BenQ, etc.• Networking/Data Communication Peripherals• Extended Warranty Services• Payment gateway service provider• Warehousing solutions, delivery end-to-end from vendor till end-user• 1-stop solutions for e-Commerce

TELECOMMUNICATION PRODUCTS & DISTRIBUTION SERVICES• Hand phones• Modems• Accessories• Reload coupons• Prepaid/postpaid SIM cards• SIM cards• Payment gateway service provider• Warehousing solutions, delivery end-to-end from vendor till end-user• 1-stop solutions for e-Commerce

BRIDGING THE GAP

“Bridging the Gap” is our new corporate tagline that underlines our commitment to bridge the gap between our customers’ business needs and their goals with solutions that will transform their business outcome. Focusing on consumer technology convergence, the Group makes technology an asset to its customers. Ingenuity delivers flexible, efficient and cost-effective ICT solutions to drive customers’ business value and support their unique business strategy in this competitive market place. The Group is ready to connect the dots by helping your businesses react, adapt and thrive in this fast-evolving technology world, while keeping your business a step ahead.

The Company has long standing clients across various high growth industries such as logistics, oil and gas, manufacturing, consumer and retail services. In year 2000, Ingenuity was granted the Multimedia Super Corridor (MSC) status for its contributions to the borderless marketing, MSC Smart Schools flagship application, R&D into predictive CRM with financial data protocol and utilisation of knowledge workers and technology transfer.

Ingenuity Today cont’d

4

Annual Report 2014

BOARD OF DIRECTORS

Dato’ Johari Bin Yahya Chairman, Independent Non-Executive (appointed on 29.5. 2014)Chin Boon Long Managing Director (redesignated from Executive Chairman to Managing Director on 29.5.2014)Lim Boon Hong Executive Director (redesignated from Independent Director to Executive Director on 1.5.2014)Ng Kok Hok Independent Non-Executive DirectorTham Kah Yong Independent Non-Executive DirectorLow Gah Luen Executive Director (resigned on 31.10.2013)Wong Hun Liang Executive Director (resigned on 29.5.2014)

AUDIT COMMITTEE

ChairmanNg Kok Hok

MemberDato’ Johari Bin YahyaTham Kah Yong

REMUNERATION COMMITTEE

ChairmanNg Kok Hok

MemberTham Kah YongLim Boon Hong

NOMINATION COMMITTEE

ChairmanTham Kah Yong

MemberNg Kok HokDato’ Johari Bin Yahya

COMPANY SECRETARY

Lim Seck Wah(MAICSA 0799845)

LEGAL COUNSEL

Lim.Chong.Phang & AmyD1-U5-15 & 16, Solaris DutamasNo.1, Jalan Dutamas 150480 Kuala LumpurTel : +(603) 6205 3408Fax : +(603) 6205 3409E-mail : [email protected]

BANKER

RHB Bank Berhad Malayan Banking Berhad Alliance Bank Malaysia BerhadAmIslamic Bank BerhadBank Islam (M) BerhadCIMB Bank BarhadCitibank BerhadHong Leong Bank BerhadHong Leong Islamic Bank BerhadHSBC Amanah Malaysia BerhadOCBC Al-Amin Bank BerhadPublic Bank BerhadStandard Chartered Bank Malaysia BerhadUnited Overseas Bank (Malaysia) Berhad

AUDITORS

SJ Grant Thornton (AF:0737)(Member of Grant Thornton International)Chartered AccountantsLevel 11, Bangunan Sheraton Imperial CourtJalan Sultan Ismail50250 Kuala LumpurTel : +(603) 2692 4022Fax : +(603) 2732 5119E-mail : [email protected] : www.gt.com.my

PRINCIPAL PLACE OF BUSINESS

12th Floor, Persoft Tower 6B Persiaran TropicanaTropicana Golf & Country Resorts47410 Petaling JayaSelangor Darul EhsanTel : +(603) 7688 9888Fax : +(603) 7688 9881E-mail : [email protected] : www.ingenuity.com.my

REGISTERED OFFICE AND SHARE REGISTRAR

Mega Corporate Services Sdn. Bhd. (187984-H)Level 15-2 , Bangunan Faber Imperial CourtJalan Sultan Ismail50250 Kuala LumpurTel : +(603) 2692 4271Fax : +(603) 2732 5388E-mail : [email protected] : www.megacorp.com.my

STOCK EXCHANGE LISTING

ACE Market of Bursa MalaysiaSecurities BerhadStock name : INGENCOStock code : 0034

Austral Diversified Sdn BhdDevelopment Solution - Government/GLC Projects Business Unit

Ingens Commerce Sdn BhdInformation Technology and Telecommunication Products Business Unit

Ingens Sdn BhdIT Hardware & Software Distribution Business Unit

Inconnecxion Communication Sdn BhdTelecommunication Products & Services Business Unit

Ingens DSS Sdn BhdIT Accessories Distribution Business Unit

DSS Ikhlas Sdn BhdConsumable Products Business Unit

Ingens Direct Sdn BhdICT Products & Services Distribution Business Unit

Fox Consortium Distribution Sdn Bhd(Formerly Known As Unified Synergy Sdn Bhd)Broadband and Related Products Distribution Business Unit

INGENUITY MICROSYSTEMS SDN BHDSoftware Products & Enterprise Solutions Business Unit

RELIANCE COMPUTER CENTRE SDN BHDEnterprise Solutions - Hotel/ Hospitality Solutions Management Business Unit

UPTOWN EXCEL SDN BHDSystem Integration & Services Business Unit

INGENUITY CARE SDN BHDExtended Warranty Services Business Unit

HALLMARK AVENUE SDN BHDIT Distribution Business Unit

LINE CLEAR EXPRESS & LOGISTICS SDN BHD(FORMERLY KNOWN AS DPEG SERVICES SDN BHD)Courier & Delivery Services Business Unit

VISTAVISION RESOURCES SDN BHDInvestment Holdings

INGENUITY CONSOLIDATED BERHADInvestment Holdings, Consultancy & Management Services

100%

100%

100%

51%

100%

100%

100%

100%

100%

100%

100%

51%

60%

100%

100%

Ingens (Indonesia) Pte LtdICT Products Distribution Business UnitIncorporated on 25.11.2013

51%

Ingens International LtdInformation Technology & Telecommunication Products (Asian Pacific) Business UnitIncorporated on 2.4.2014

100%

Corporate Structure

5


BOARD OF DIRECTORS

Dato’ Johari Bin Yahya Chairman, Independent Non-Executive (appointed on 29.5. 2014)Chin Boon Long Managing Director (redesignated from Executive Chairman to Managing Director on 29.5.2014)Lim Boon Hong Executive Director (redesignated from Independent Director to Executive Director on 1.5.2014)Ng Kok Hok Independent Non-Executive DirectorTham Kah Yong Independent Non-Executive DirectorLow Gah Luen Executive Director (resigned on 31.10.2013)Wong Hun Liang Executive Director (resigned on 29.5.2014)

AUDIT COMMITTEE

ChairmanNg Kok Hok

MemberDato’ Johari Bin YahyaTham Kah Yong

REMUNERATION COMMITTEE

ChairmanNg Kok Hok

MemberTham Kah YongLim Boon Hong

NOMINATION COMMITTEE

ChairmanTham Kah Yong

MemberNg Kok HokDato’ Johari Bin Yahya

COMPANY SECRETARY

Lim Seck Wah(MAICSA 0799845)

LEGAL COUNSEL

Lim.Chong.Phang & AmyD1-U5-15 & 16, Solaris DutamasNo.1, Jalan Dutamas 150480 Kuala LumpurTel : +(603) 6205 3408Fax : +(603) 6205 3409E-mail : [email protected]

BANKER

RHB Bank Berhad Malayan Banking Berhad Alliance Bank Malaysia BerhadAmIslamic Bank BerhadBank Islam (M) BerhadCIMB Bank BarhadCitibank BerhadHong Leong Bank BerhadHong Leong Islamic Bank BerhadHSBC Amanah Malaysia BerhadOCBC Al-Amin Bank BerhadPublic Bank BerhadStandard Chartered Bank Malaysia BerhadUnited Overseas Bank (Malaysia) Berhad

AUDITORS

SJ Grant Thornton (AF:0737)(Member of Grant Thornton International)Chartered AccountantsLevel 11, Bangunan Sheraton Imperial CourtJalan Sultan Ismail50250 Kuala LumpurTel : +(603) 2692 4022Fax : +(603) 2732 5119E-mail : [email protected] : www.gt.com.my

PRINCIPAL PLACE OF BUSINESS

12th Floor, Persoft Tower 6B Persiaran TropicanaTropicana Golf & Country Resorts47410 Petaling JayaSelangor Darul EhsanTel : +(603) 7688 9888Fax : +(603) 7688 9881E-mail : [email protected] : www.ingenuity.com.my

REGISTERED OFFICE AND SHARE REGISTRAR

Mega Corporate Services Sdn. Bhd. (187984-H)Level 15-2 , Bangunan Faber Imperial CourtJalan Sultan Ismail50250 Kuala LumpurTel : +(603) 2692 4271Fax : +(603) 2732 5388E-mail : [email protected] : www.megacorp.com.my

STOCK EXCHANGE LISTING

ACE Market of Bursa MalaysiaSecurities BerhadStock name : INGENCOStock code : 0034

Austral Diversified Sdn BhdDevelopment Solution - Government/GLC Projects Business Unit

Ingens Commerce Sdn BhdInformation Technology and Telecommunication Products Business Unit

Ingens Sdn BhdIT Hardware & Software Distribution Business Unit

Inconnecxion Communication Sdn BhdTelecommunication Products & Services Business Unit

Ingens DSS Sdn BhdIT Accessories Distribution Business Unit

DSS Ikhlas Sdn BhdConsumable Products Business Unit

Ingens Direct Sdn BhdICT Products & Services Distribution Business Unit

Fox Consortium Distribution Sdn Bhd(Formerly Known As Unified Synergy Sdn Bhd)Broadband and Related Products Distribution Business Unit

INGENUITY MICROSYSTEMS SDN BHDSoftware Products & Enterprise Solutions Business Unit

RELIANCE COMPUTER CENTRE SDN BHDEnterprise Solutions - Hotel/ Hospitality Solutions Management Business Unit

UPTOWN EXCEL SDN BHDSystem Integration & Services Business Unit

INGENUITY CARE SDN BHDExtended Warranty Services Business Unit

HALLMARK AVENUE SDN BHDIT Distribution Business Unit

LINE CLEAR EXPRESS & LOGISTICS SDN BHD(FORMERLY KNOWN AS DPEG SERVICES SDN BHD)Courier & Delivery Services Business Unit

VISTAVISION RESOURCES SDN BHDInvestment Holdings

INGENUITY CONSOLIDATED BERHADInvestment Holdings, Consultancy & Management Services

100%

100%

100%

51%

100%

100%

100%

100%

100%

100%

100%

51%

60%

100%

100%

Ingens (Indonesia) Pte LtdICT Products Distribution Business UnitIncorporated on 25.11.2013

51%

Ingens International LtdInformation Technology & Telecommunication Products (Asian Pacific) Business UnitIncorporated on 2.4.2014

100%

Corporate Information

6

Annual Report 2014

DATO’ JOHARI BIN YAHYA / Independent Non-Executive ChairmanMember of Audit Committee / Member of Nomination Committee

Dato’ Johari Bin Yahya, aged 61, Malaysian, was appointed as an Independent Non-Executive Chairman of the Company on 29 May 2014.

He holds a Diploma in Police Sciences from National University of Malaysia, graduated in 1997.

He has more than 33 years of working experience in the Royal Malaysia Police Force (RMPF). He currently heads DJ Protective Consultancy Services providing protection and security services after retirement from RMPF. His early years in the RMPF was in the Special Action Force (UTK - Unit Tindakhas) where he remained for nearly 18 years and rose up to the position of Deputy Commander. His specialized professional experience in Security and Policing was developed from his years in this Department where he performed various challenging roles ranging from Personal Security Officer to VVIPs, Team Leader in Security Details to VVIPs, Operational Duties, Ground Commander in Kidnapping and Rescue and Hostage Situations as well as Overall Commander in Assault and Other Police Operations. After obtaining the Diploma in Police Sciences in 1997 from the National University Of Malaysia, he was promoted to the Head, Serious Crimes Division, Kuala Lumpur Police where he successfully managed various highly publicized kidnapping and murder cases. He also attended an Australian Government sponsored Counter-terrorism Training Program in Jakarta. He was promoted to Assistant Commissioner of Police and was transferred to Johor Baru as OCPD in 2006 where he actively pursued the concept of Community Policing and forged better Community - Police cooperation. Soon after he was sent to manage the Police District of Central Malacca as OCPD and Community Policing was once again a priority as part of crime management.

In 2008 he returned to Bukit Aman Kuala Lumpur as Principal Assistant Director, Serious Crimes Division (D9) CID and retired since 11 July 2011.

Currently, as the CEO of DJ Protective Consultancy Services, Dato Johari brings a sound foundation of unique and extensive knowledge and experience together with specialist expertise in solution-based approaches.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.Bridging Businesses and Diversity

Ingenuity always stay ahead of the game to help customers set their foothold in the diversity of the businesses

7


DATO’ JOHARI BIN YAHYA / Independent Non-Executive ChairmanMember of Audit Committee / Member of Nomination Committee

Dato’ Johari Bin Yahya, aged 61, Malaysian, was appointed as an Independent Non-Executive Chairman of the Company on 29 May 2014.

He holds a Diploma in Police Sciences from National University of Malaysia, graduated in 1997.

He has more than 33 years of working experience in the Royal Malaysia Police Force (RMPF). He currently heads DJ Protective Consultancy Services providing protection and security services after retirement from RMPF. His early years in the RMPF was in the Special Action Force (UTK - Unit Tindakhas) where he remained for nearly 18 years and rose up to the position of Deputy Commander. His specialized professional experience in Security and Policing was developed from his years in this Department where he performed various challenging roles ranging from Personal Security Officer to VVIPs, Team Leader in Security Details to VVIPs, Operational Duties, Ground Commander in Kidnapping and Rescue and Hostage Situations as well as Overall Commander in Assault and Other Police Operations. After obtaining the Diploma in Police Sciences in 1997 from the National University Of Malaysia, he was promoted to the Head, Serious Crimes Division, Kuala Lumpur Police where he successfully managed various highly publicized kidnapping and murder cases. He also attended an Australian Government sponsored Counter-terrorism Training Program in Jakarta. He was promoted to Assistant Commissioner of Police and was transferred to Johor Baru as OCPD in 2006 where he actively pursued the concept of Community Policing and forged better Community - Police cooperation. Soon after he was sent to manage the Police District of Central Malacca as OCPD and Community Policing was once again a priority as part of crime management.

In 2008 he returned to Bukit Aman Kuala Lumpur as Principal Assistant Director, Serious Crimes Division (D9) CID and retired since 11 July 2011.

Currently, as the CEO of DJ Protective Consultancy Services, Dato Johari brings a sound foundation of unique and extensive knowledge and experience together with specialist expertise in solution-based approaches.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.Bridging Businesses and Diversity

Ingenuity always stay ahead of the game to help customers set their foothold in the diversity of the businesses

Directors’ Profile

8

Annual Report 2014

NG KOK HOK / Independent Non-Executive Director / Chairman of Audit Committee / Chairman of Remuneration Committee / Member of Nomination Committee

Ng Kok Hok, aged 53, Malaysian, was appointed as an Independent Non-Executive Director of the Company on 1 December 2010.

He is a Chartered Accountant (MIA No. CA 6226) with the Malaysian Institute of Accountants, an Associate Member of the Chartered Institute of Management Accountants and a Member of the Financial Planning Association of Malaysia.

Mr. Ng is the Chief Financial Officer of Minetech Resources Berhad. He also sits on the board of 1 Utopia Berhad as an Independent Non-Executive Director.

He held the position of an Accountant in several private limited companies in telecommunications and manufacturing of industrial plastic containers and the trading of industrial chemicals. He has also served as an Accountant and was later promoted to the position of Financial Controller of Public Mutual Berhad. He joined TA Unit Trust Management Berhad as General Manager and subsequently progressed to Chief Executive Officer of the company. Thereafter, he ventured into several businesses in international trade, e-commerce and travel agencies.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.

THAM KAH YONG / Independent Non-Executive Director / Member of Audit Committee / Member of Remuneration Committee / Chairman of Nomination Committee

Tham Kah Yong, a Malaysian aged 59, was appointed as an Independent Non-Executive Director of the Company on 15 April 2011.

Mr. Tham holds a Bachelor of Economics from the University of Malaya in 1979 majoring in business administration.

He joined a foreign bank as credit officer for more than 4 years before taking up another appointment with a leading local bank in 1983. He retired in May 2010 after 31 years of impeccable banking career serving in various capacities. He has wide experience in branch banking, credit evaluation, marketing, trade finance and credit administration.


CHIN BOON LONG / Managing Director

Chin Boon Long, aged 46, Malaysian, was appointed as an Executive Chairman of the Company since 24 September 2012. On 29 May 2014, he relinquished the office of Executive Chairman and was re-designated to Managing Director.

Mr. Chin holds a Second Upper Class Honours Bachelor of Engineering (Electronic Computers) from Universiti Pertanian Malaysia and a MBA from Universiti Kebangsaan Malaysia. He has more than 16 years vast experience in the ICT industry. He began his career in 1995 with an ICT company in Taiwan. He had held various positions in that company before he was promoted to the position of Sales Director in 2003. He acquired PC3 Technology Sdn. Bhd. together with a business partner in 2004. Since then, he assumed the role of Managing Director of PC3 Technology and has led the company to become one of the authorised dealers of Acer desktops in Malaysia. Mr. Chin also sits on the Board of 1 Utopia Berhad.

He is the spouse of the indirect major shareholder, Chan Swee Ying . He neither has any family relationship with any director, nor any conflict of interest in any business arrangement involving the Company. He has not been convicted for any offences other than traffic offences (if any) within the past 10 years.

LIM BOON HONG / Executive Director / Member of Remuneration Committee

Lim Boon Hong, aged 44, Malaysian, was appointed as an Independent Non-Executive Director of the Company on 4 June 2012. Subsequently, he was re-designated to Executive Director on 1 May 2014.

He graduated with a degree in Business Administration majoring in Actuarial Science from University of Nebraska-Lincoln, USA.

He started as a management trainee with AMInvestment Bank in 1992 and subsequently joined Cullis Reagert Brokers Sdn Bhd (part of Hong Leong Group) as broking executive and subsequently, was transferred to Hong Leong Investment Bank as research analyst. In 1998, he ventured into own business, which mainly involved in trading of technology and LCD products.


Directors’ Profilecont’d

9


NG KOK HOK / Independent Non-Executive Director / Chairman of Audit Committee / Chairman of Remuneration Committee / Member of Nomination Committee

Ng Kok Hok, aged 53, Malaysian, was appointed as an Independent Non-Executive Director of the Company on 1 December 2010.

He is a Chartered Accountant (MIA No. CA 6226) with the Malaysian Institute of Accountants, an Associate Member of the Chartered Institute of Management Accountants and a Member of the Financial Planning Association of Malaysia.

Mr. Ng is the Chief Financial Officer of Minetech Resources Berhad. He also sits on the board of 1 Utopia Berhad as an Independent Non-Executive Director.

He held the position of an Accountant in several private limited companies in telecommunications and manufacturing of industrial plastic containers and the trading of industrial chemicals. He has also served as an Accountant and was later promoted to the position of Financial Controller of Public Mutual Berhad. He joined TA Unit Trust Management Berhad as General Manager and subsequently progressed to Chief Executive Officer of the company. Thereafter, he ventured into several businesses in international trade, e-commerce and travel agencies.


THAM KAH YONG / Independent Non-Executive Director / Member of Audit Committee / Member of Remuneration Committee / Chairman of Nomination Committee

Tham Kah Yong, a Malaysian aged 59, was appointed as an Independent Non-Executive Director of the Company on 15 April 2011.

Mr. Tham holds a Bachelor of Economics from the University of Malaya in 1979 majoring in business administration.

He joined a foreign bank as credit officer for more than 4 years before taking up another appointment with a leading local bank in 1983. He retired in May 2010 after 31 years of impeccable banking career serving in various capacities. He has wide experience in branch banking, credit evaluation, marketing, trade finance and credit administration.


CHIN BOON LONG / Managing Director

Chin Boon Long, aged 46, Malaysian, was appointed as an Executive Chairman of the Company since 24 September 2012. On 29 May 2014, he relinquished the office of Executive Chairman and was re-designated to Managing Director.

Mr. Chin holds a Second Upper Class Honours Bachelor of Engineering (Electronic Computers) from Universiti Pertanian Malaysia and a MBA from Universiti Kebangsaan Malaysia. He has more than 16 years vast experience in the ICT industry. He began his career in 1995 with an ICT company in Taiwan. He had held various positions in that company before he was promoted to the position of Sales Director in 2003. He acquired PC3 Technology Sdn. Bhd. together with a business partner in 2004. Since then, he assumed the role of Managing Director of PC3 Technology and has led the company to become one of the authorised dealers of Acer desktops in Malaysia. Mr. Chin also sits on the Board of 1 Utopia Berhad.

He is the spouse of the indirect major shareholder, Chan Swee Ying . He neither has any family relationship with any director, nor any conflict of interest in any business arrangement involving the Company. He has not been convicted for any offences other than traffic offences (if any) within the past 10 years.

LIM BOON HONG / Executive Director / Member of Remuneration Committee

Lim Boon Hong, aged 44, Malaysian, was appointed as an Independent Non-Executive Director of the Company on 4 June 2012. Subsequently, he was re-designated to Executive Director on 1 May 2014.

He graduated with a degree in Business Administration majoring in Actuarial Science from University of Nebraska-Lincoln, USA.

He started as a management trainee with AMInvestment Bank in 1992 and subsequently joined Cullis Reagert Brokers Sdn Bhd (part of Hong Leong Group) as broking executive and subsequently, was transferred to Hong Leong Investment Bank as research analyst. In 1998, he ventured into own business, which mainly involved in trading of technology and LCD products.


Directors’ Profile cont’d

10

Annual Report 2014

Creating RevolutionOur products and services are designed with our customers in mind

to revolutionise the way businesses are managed

Chairman’s Statement

11


Creating RevolutionOur products and services are designed with our customers in mind

to revolutionise the way businesses are managed


12

Annual Report 2014

Dear Shareholders,On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of Ingenuity Consolidated Berhad (“Ingenuity”) and its subsidiaries for the financial year ended 31 March 2014.


Financial Highlights

For the financial year ended 31 March 2014, Ingenuity demonstrated outstanding performance with continued growth in revenue and profits. The group’s revenue rose from 553.59 to 613.21, a 10.8% growth from the year before. The group is encouraged with the consecutive positive results and will continue strive to achieve our targets and objectives despite the challenges ahead. This revenue growth was primarily due to a full year of consolidation of the ICT distribution business carried out by our subsidiary VistaVisionResources Sdn Bhd (“VVR”), through its wholly owned subsidiaries namely Ingens Sdn Bhd,Inconnecxion Communication Sdn Bhd and Ingens DSS Sdn Bhd.

(There will be more to add in on the financial highlights with some financial data)

Bridging businesses and diversity

Generally speaking, the global information and communications technology (“ICT”) industry has a significant influence on the economic growth in Malaysia. According to global market research firm Gartner, Malaysia’s total information technology (“IT”) spending is expected to grow 11% to reach RM67.9bil this year, more than double the 3% growth expected for the Asia-Pacific region where IT spending is forecast to reach US$746bil. Thus, we are of the view that ICT industry plays a vital role in this country and continues to show enormous growth and potential.

The Group’s four core businesses-BusinessSoftware Solutions, System Integration & Service, ICT Hardware and Software Distribution & Services, and Telecommunication Products & Distribution Services -have been streamlined under the consolidation process that began 2 years ago, and has resulted in

13


Dear Shareholders,On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of Ingenuity Consolidated Berhad (“Ingenuity”) and its subsidiaries for the financial year ended 31 March 2014.

Chairman’s Statementcont’d

a financial turnaround as projected by the Group on 2012. Progress and achievements within the core business include the development of Ingens Commerce, a B2b2C portal dedicated to ICT products, offering the widest range of branded notebooks and handphones is a service that is designed to provide customers with a convenient and problem free way of buying IT products through our partners. And also, our involvement in the telecommunications sector has developed well through VVR’s collaborative efforts with leading telecommunication providers and industry players in Malaysia through its subsidiaries Ingens Sdn Bhdand Inconnecxion Communication Sdn Bhd.

Creating Revolution

The group is keenly aware that the IT sector is attracting more and more entrants because of its promising potential and relatively few barriers to entry into this business sector. The overwhelming success of smartphones, tablets coupled with the convergence of smart mobile devices technology with computer technology has opened a whole new and exciting chapter and has injected tremendous appeal into the area of ICT for both the consumer and the service provider. In this virtual world in which we live today, one is connected with whatever and whoever one needs to be, wherever one may be.

This rapidly changing landscape brings real opportunities to provide more communications solutions, software based products and new services. Thus, we continue to innovate by creating new ideas and aim to be the leader in the market. One of our strategies is to build a new age online platform that will serve multitude of customers ranging from suppliers, distributors to end users and carries various products. On the other hand, the group has set up a logistics operation which provides end to end courier services that will complement our Genuine Care offerings. With these new services, we strongly believe that it will open new business opportunities locally or even to the overseas market. Undoubtedly a good business ICT solution should always come hand-in hand with high quality services. To this extend, the Group is strategizing its commitment to provide better quality services such as to building long term business relationships and providing quality maintenance.

With these in mind, we can safely say that the strategies and activities carried out are fully aligned to our Group’s business model and strategy, as well as ensuring that

our Group is adaptable to the industrial trends and business opportunities in the near future. To that end, Ingenuity will continue to expand its core competencies and leverage upon its firm footing in the Malaysian ICT industry and its advantage of being the one-stop ICT provider in the country.

Acknowledgement and Appreciation

On behalf of the Board, I would like to express appreciation to the management team for their invaluable guidance, and to our dedicated employees for their loyalty, effort, commitment and expertise contributions to the Group for over the year.

In addition, I would like to take this opportunity to extend my gratitude to our shareholders, business partners, media members as well as relevant governing authorities and regulatory bodies for their support and confidence in our Group during a year full of challenges. We believe, with our well-established goodwill built over the years, strong trust and confidence, we will be in a position to further grow the Group’s business and take it to a new level in the years to come.

DATO’ JOHARI BIN YAHYAIndependent Non-Executive Chairman

14

Annual Report 2014

Adaptation through consolidation Consolidation brings multitude of variables and changes,

however, Ingenuity steers stronger through adapting the new environment

Revenue(RM’000)

13121110

5,34

6

6,22

1

63,9

30

553,58

5

14 13121110 14 13121110 14

613,20

9

(3,4

31)

(1,4

17)

(3,1

31)

6,87

9

3,07

3Profit/(Loss) Before Tax

(RM’000)

(3,2

21)

(1,4

11)

(3,2

05)

5,71

6

1,68

4

Profit/(Loss) After Tax(RM’000)

13121110

12,4

70

12,2

83

88,3

04

125,76

6

14

164,39

2

Total Assets(RM’000)

13121110

520

271

40,4

37

68,527

14

66,254

Total Liabilities(RM’000)

Financial Highlights

(RM’000) 2010 2011 2012 2013 2014

Revenue 5,346 6,221 63,930 553,585 613,209

Profit/(Loss) before tax (3,431) (1,417) (3,131) 6,879 3,073

Profit/(Loss) after tax (3,221) (1,411) (3,205) 5,716 1,684

Total Assets 12,470 12,283 88,304 125,766 164,392

Total Liabilities 520 271 40,437 68,527 66,254

15


Adaptation through consolidation Consolidation brings multitude of variables and changes,

however, Ingenuity steers stronger through adapting the new environment

Revenue(RM’000)

13121110

5,34

6

6,22

1

63,9

30

553,58

5

14 13121110 14 13121110 14

613,20

9

(3,4

31)

(1,4

17)

(3,1

31)

6,87

9

3,07

3

Profit/(Loss) Before Tax(RM’000)

(3,2

21)

(1,4

11)

(3,2

05)

5,71

6

1,68

4

Profit/(Loss) After Tax(RM’000)

13121110

12,4

70

12,2

83

88,3

04

125,76

6

14

164,39

2

Total Assets(RM’000)

13121110

520

271

40,4

37

68,527

14

66,254

Total Liabilities(RM’000)

16

Annual Report 2014

Statement of Corporate Governance

STATEMENT OF CORPORATE GOVERNANCE

A Statement of Corporate Governance in essence highlights the Group and Company’s commitment towards adopting, upholding and complying with the best practices as set out in the Malaysian Code on Corporate Governance 2012 (“MCCG 2012” or “the Code”).

The Board of Directors (“the Board”) of the Company affirms its commitment in adopting and maintaining a high standard of accountability, responsibility and transparency in the Group’s daily business operations and affairs. The committees ensure that the best practices and principles set out in MCCG 2012 are adhered to, where possible, towards building and enhancing long term shareholders’ relationship and values.

This statement outlines the Group’s main corporate governance practices and policies in place, which is in line with the principles and recommendations laid out in the Code.

A. BOARD ROLES AND RESPONSIBILITIES

The Board provides leadership and vision to the Group that will enhance shareholders’ value and the Group’s long term business sustainability and growth. It has the overall responsibilities for corporate governance, strategic direction, formulation of policies and overseeing the investment and performance of the Group.

The profile of each Director is presented in the Directors’ Profile in this Annual Report.

(i) Board Composition

The Board is currently made up of five (5) members, comprising the Independent Non-Executive Chairman, the Managing Director, one (1) Executive Director and two (2) Independent Non-Executive Directors. This provides an effective check and balance in the functioning of the Board, and complies with the Listing Requirements which require at least one-third of the Board to be independent.

(ii) Board Function

The roles and fiduciary duties of the Chairman, the Managing Director are clearly delineated for better corporate governance. The Chairman of the Company has no executive function and he is responsible for orderly conduct and proceedings of meetings and ensuring all directors are properly briefed during the Board discussion and shareholders are informed of the subject matters requiring their approval.

The Managing Director is responsible for the overall operation and financial performance of the Group. The Managing Director is assisted by the Executive Director and management team in running the day-to-day operation of the Group.

The Independent Non-Executive Directors play an important role in providing a balanced voice and

independent view in the decision making process by the Board members. The Independent Non-Executive Directors bring to the board room a balanced, non-conflicting and objective judgment on any sensitive Board’s decisions to safeguard shareholders, investors and the minority interest.

In the opinion of the Board, the appointment of a Senior Independent Director to whom any concerns should be conveyed is not necessary. The Board operates in an open environment in which opinions and information are freely exchanged and in these circumstances any concerns need not be focused on a single director as all members of the Board fulfill this role individually and collectively.

17


Statement of Corporate Governancecont’d

A. BOARD ROLES AND RESPONSIBILITIES cont’d

(iii) Board Committees

The Board established three (3) Committees with specific key responsibilities and terms of reference in order to better assist the Board in deliberating issues on a detailed manner, resolve and propose recommendations to the Board members for their deliberation and resolution. The members of these Committees are selected from the Board members who are mostly Independent Non-Executive Directors.

These committees operate with clear defined terms of reference and function independently from the Board. An Independent Non-Executive Director is normally selected to Chair the respective Committee meeting and the majority of the Committee members are Independent Non-Executive Directors, to ensure a high standard of corporate governance is adopted by these committees. The respective Committee hold meetings independently from Board meetings and members of the Board and management can/may be invited by the Chairman of the respective Committees to be present during these Committee meetings.

The Committees in which the Board has delegated specific terms of reference and responsibilities are as

follows:

• Audit Committee (refer to Audit Committee Report in this Annual Report) • Nomination Committee • Remuneration Committee • Employees’ Share Option Scheme (“ESOS”) Committee

(iv) Supply of information

To effectively discharge its duties and responsibilities, Board members are supplied with full and timely access to information concerning the Group’s operations and financial status on a regular basis. At every financial quarter, the Board will meet at least once to approve the Group’s quarterly announcement to Bursa Malaysia Securities Berhad. The Management and the Company Secretary will be responsible to prepare, on a timely basis, all agendas and board papers containing the relevant information for the Board to deliberate on. The Board papers are circulated prior to each Board meetings to enable Board members to facilitate informed and timely decision making. The Board will normally request the presence of the Managing Director, Executive Director, Chief Financial Officer, Management, Internal and/or External Auditors to report on the Group’s financial, operational and corporate developments. If so required, the Board may also request for professional and independent advice before making any decision and resolution. The Company Secretary attends to all Board meetings and Board Committee meetings.

(v) Directors’ Code of Ethics

The Directors have always conducted themselves in an ethical manner while executing their duties and function.

(vi) Sustainability

The Board regularly reviews the strategic direction of the Group and the progress of the Group’s operations, taking into changes in the business and political environment and risk factors such as level of competition.

18

Annual Report 2014


A. BOARD ROLES AND RESPONSIBILITIES cont’d

(vii) Board Charter

The Board is guided by the Board Charter which set out, among others, the responsibilities, authorities, procedures, evaluations and structures of the Board and Board Committee, as well as the relationship between the Board with its management and shareholders.

The Board Charter is published at the Company’s website notwithstanding that the Board Charter is subject to periodic review to ensure their relevance and compliance.

(viii) Gender Diversity Policy

The Company has no policy on gender diversity or target set but believes in merits and commitment of its Board members.

B. STRENGTHEN COMPOSITION OF THE BOARD

(i) Nomination Committee

The Nomination Committee is responsible for ensuring that the Board has the appropriate balance composition and size, the required skills mix, experience, and other core competencies; and is also responsible for considering and recommending the appointment of new Directors to the Board. The Nomination Committee is also instrumental in recommending individuals for key positions within the Group. The final decision on the appointment of a candidate recommended by Nomination Committee rests with the whole Board.

The existing Nomination Committee comprises three (3) members, all of them are Independent Non-Executive Directors:-

Chairman: Tham Kah Yong (Independent Non-Executive Director) Members: Ng Kok Hok (Independent Non-Executive Director) Dato’ Johari Bin Yahya (Independent Non-Executive Director, appointed on 29.05.2014)

The Nomination Committee will source and meet to review the suitability of the proposed candidate when there is a vacancy during the year.

The Nomination Committee will review and assess the Board composition yearly to ensure that it has a balance mixed skills and business experience to contribute to the success of the Group. The assessment is on merit based.

(ii) Appointment and Re-election of Director

The Nomination Committee ensures that all appointments of new directors to the Board are properly made with an established and transparent procedure and in compliance with the rules of the relevant authorities. Any appointment of additional director will be made as and when it is deemed necessary by the existing Board with due consideration given to the mix skills, expertise and experience in the respective industry required regardless of gender diversity for an effective Board.

Pursuant to the Company’s Articles of Association, one-third (1/3) of the Directors including the Managing Director, shall retire from office, at least once in three (3) years. Retiring directors can offer themselves for re-election. Directors who are appointed by the Board during the financial year are subject to re-election by shareholders at the next Annual General Meeting held following their appointment. Directors over seventy (70) years of age are subject for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.

19



B. STRENGTHEN COMPOSITION OF THE BOARD cont’d

(iii) Remuneration Committee

The remuneration Committee has been entrusted by the Board to determine that the level of remuneration is sufficient to attract and retain Directors of quality required to manage the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst other, to recommend to the Board the remuneration of Executive Directors. In the case of Non-Executive Directors, the level of remuneration shall reflect the experience and level of responsibilities undertaken by the Non-Executive Directors concerned. In all instances, the deliberations are conducted, with the Directors concerned abstaining from discussions on their individual remuneration.

The current Remuneration Committee comprises three (3) members, the majority of whom are Independent Non-Executive Directors:-

Chairman: Ng Kok Hok (Independent Non-Executive Director) Members : Tham Kah Yong (Independent Non-Executive Director) Lim Boon Hong (Executive Director) (iv) Employees’ Share Option Scheme (“ESOS”) Committee

The ESOS Committee was set-up to ensure the ESOS is fairly and properly administered in accordance with its approved By-Law and other applicable rules and regulations.

The current ESOS Committee comprises the members as below:

(i) Ng Kok Hok (Independent Non-Executive Director) (ii) Tham Kah Yong (Independent Non-Executive Director) (iii) Kenny Khow Chuan Wah (Chief Financial Officer) (iv) Yeap Chee Keong (Human Resources Manager)

The duties and responsibilities of the ESOS Committee amongst others, are to determine the eligibility of the person for participation in the ESOS and to decide on the number of shares to be offered to eligible persons, the subscription price for the shares and such other terms in relation to the offer; subject to the provisions of the ESOS By-Laws.

(v) Directors’ Remuneration

Directors’ remuneration includes directors’ salary, other emoluments and fee received during the year. The fee of each Director is commensurate with that director’s responsibility, contribution and job scope. The fee received by the Directors of the Company is subsequently approved by shareholders at the Company’s Annual General Meeting.

The Remuneration and Nomination Committees further ensure the Group attracts and retains the right caliber Directors with the appropriate remuneration, necessary skills and experience.

20

Annual Report 2014


B. STRENGTHEN COMPOSITION OF THE BOARD cont’d

(v) Directors’ Remuneration

The Directors’ remuneration for the financial year ended 31 March 2014 is as follows:-

Executive Directors

Non-Executive Directors

(RM) (RM)

Salaries and other emoluments 402,870 -Fees 15,500 18,000

Range of RemunerationExecutive Directors

Non-Executive Directors

Below RM50,000 1 3 RM50,001 to RM100,000 - -RM100,001 to RM150,000 - -RM150,001 to RM200,000 - -RM200,001 to RM250,000 2 -

C. BOARD INDEPENDENCE

The Board recognized the importance of independence and objectivity in decision making process. The independent Non-Executive Directors play an important role in providing a balanced, non-conflicting and objective judgement in decision making process and act in the best interest of the Group, its stakeholders and shareholders, including minority shareholders.

The Board has established some criteria in the annual assessment of its Independent Directors. As at the date of this statement, all the Company’s Independent Directors have not reached the nine-year limit.

D. FOSTER COMMITMENT OF DIRECTORS

The Directors observe the recommendation of the Code that they are required to notify the Chairman before accepting any new directorship and to indicate the time expected to be spent on the new appointment.

To ensure that the Directors have the time to focus and fulfill their roles and responsibilities effectively, they must not hold directorships in more than five public listed companies and must be able to commit sufficient time to the Company.

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

21



D. FOSTER COMMITMENT OF DIRECTORS cont’d

(i) Board Meetings

The Board met five (5) times during the financial year ended 31 March 2014. The attendance of the Board members at the meetings were as follows:-

Board of Directors No. of meetings attended

Chin Boon Long 5/5Wong Hun Liang (resigned on 29.5.2014) 5/5Lim Boon Hong 5/5Ng Kok Hok 5/5Tham Kah Yong 5/5Low Gah Luen (resigned on 31.10.2013) 3/3Dato’ Johari Bin Yahya (appointed on 29.05.2014) N/A

(ii) Directors’ Training

In line with the constant changes in rules and regulations, information technology and business environment, all Directors are encouraged to attend continuous training to further equip themselves with the know-how to effectively discharge their duties. Directors’ training programmes and seminars are deemed individually or collectively useful towards keeping the Board abreast with current development and changes in laws and regulations.

During the financial year, members of the Board have attended training programmes as follows:

Name Training attended

Chin Boon Long - GO Mobile Exhibition 2013

Lim Boon Hong - Malaysian Communication & Multimedia Commission Event: Telecommunication, The Next Wave; and

- Advocacy Session on Corporate Disclosure for Directors

Ng Kok Hok - CSR Asia: The Case of Diversity in the Boardroom Bursa Malaysia’s Half Day Governance Programme Governance;

- Risk Management and Compliance: What Directors Should Know;- Advocacy Sessions on Corporate Disclosure- Enterprise Risk Management Training and Workshop

Tham Kah Yong - Corporate Fraud Seminar- CSR Asia: The Case of Diversity in the Boardroom Bursa Malaysia’s Half Day

Governance Programme Governance- Advocacy Sessions on Corporate Disclosure

Dato’ Johari Bin Yahya - N/A (appointed on 29.05.2014)

The newly appointed Director, Dato’ Johari Bin Yahya will attend the Mandatory Accreditation Programme (MAP) by 29 September 2014. All the rest of Directors have attended MAP prescribed by Bursa Malaysia Securities Berhad.

22

Annual Report 2014


E. UPHOLD INTEGRITY IN FINANCIAL REPORTING BY COMPANY

The Board takes reasonable steps to provide a balance and comprehensive assessment of the Group’s financial performance and prospects, primarily through the annual report and quarterly financial statements.

(i) Statement of Directors’ Responsibility for Preparing Financial Statements

The Board is collectively responsible to ensure that the financial statements, the results and cash flows will give a comprehensive and fair view of the Group’s financial position at the end of the relevant financial year.

The Directors are responsible for ensuring that proper accounting records are kept with reasonable accuracy, the disclosure of financial position of the Group, and the financial statements are prepared in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors also have overall responsibilities for taking such reasonable steps to safeguard the assets of the Group and to take measures to prevent and detect frauds and other irregularities.

The Board believes they have applied all appropriate accounting policies on a consistent and prudent basis, and made reasonable and necessary judgments and estimates to ensure that the financial statements for the financial year ended 31 March 2014 provide a true and fair view of the Company’s financial position and affairs.

(ii) Financial Reporting

Prior for Board’s recommendation, the Audit Committee, having better understanding of financial regulations and requirements, is empowered by the Board to review the Group’s financial statements to ensure conformance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Companies Act, 1965 in Malaysia. The Audit Committee report with its terms of reference (furnished in this Annual Report) provides a better understanding of the Audit Committee’s responsibilities and work scope during the year.

(iii) External Auditors

The Board is collectively responsible for the Group’s overall financial statement presentation. As the Board is not involved in the day to day operations, it needs to rely not only on Management for information, but also the internal and external auditors to ensure that the Board can present a balanced and meaningful assessment of the Group’s financial statements. External auditors are invited to brief the Board on the Group’s financial statement and position, while the internal auditors will present their report/findings on the Group’s internal controls mechanism highlighting areas of weaknesses and strength.

F. RECOGNISE AND MANAGE RISKS OF THE GROUP

Internal Control

The Board recognises the importance of maintaining a sound system of internal controls, including operational, compliance and risk assessment, to safeguard the shareholders’ investment and the Group’s assets. The Board is aware that the system, by its nature, can only provide reasonable but not absolute assurance against all material misstatement, loss or fraud. As total risks cannot be entirely eliminated, the Board strives to ensure that the Group’s process and procedures that are put in place will minimize and manage key risk areas with the assistance of the Management, Audit Committee and Auditors. This ensures that ongoing reviews are carried out continuously to safeguard the Group’s assets. (The Statement of Risk Management and Internal Control provides an overview of internal control activities during the year.)

23


G. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosure relating to the Group to be made to the regulators, shareholders and stakeholders.

On this basis, the Board exercises close monitoring of all price sensitive information potentially required to be released to Bursa Malaysia and makes material announcements to Bursa Malaysia in a timely manner as requested. In line with best practices, the Board strives to disclose price sensitive information to the public as soon as practicable through Bursa, the media and the Company’s website.

The Board has authorized the Group Chief Financial Officer to co-ordinate with the Company Secretary to verify and approve all announcements before releasing to the public.

H. RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS

The Board recognises the importance of effective communication with its investors and shareholders. Key investor relation activities include meeting with financial analysts and fund managers and participating in teleconferences with analysts as and when deemed necessary. Presentations are made to potential investors and shareholders, based on the guidelines of the Listing Requirements.

Group’s corporate proposals, quarterly and annual financial results and other required announcement are made on Bursa Malaysia Securities Berhad on a timely basis and are available for public access on the internet via Ingenuity’s website at http://www.ingenuity.com.my and Bursa Malaysia’s website at http://www.bursamalaysia.com.

The Annual General Meeting (“AGM”) provides a platform for both private and institutional shareholders to share viewpoints and acquire information on issues relevant to the Group. At the AGM, shareholders are encouraged to participate dialogue with the Board members on the Group’s business operations in general. The Notice of the AGM and related documents are issued to shareholders at least twenty-one (21) days before the meeting.

To keep the general public informed, the Group would disseminate copies of its annual report in either CD-ROM or hard copy format to all relevant media and/or press immediately following the AGM. Shareholders will be invited to raise any questions that they may have in relation to the Group’s performance and its business operations.

The Group’s website (www.ingenuity.com.my) provides a vital communications channel for investors, shareholders, business partners and clients to access corporate information and news and events related to the Group. The website is updated periodically to reflect the developments within the Group and it’s used as a marketing platform to reach out to the world at large.


24

Annual Report 2014

Additional Compliance Information

(i) Utilisation of proceeds raised from corporate proposal

During the financial year ended 31 March 2014, a total 173,950,000 Placement Shares were placed out to the identified investors in three (3) tranches, raising a total of RM 17,834,500 for the Company pursuant to the Private Placement. The proceeds were fully utilised for working capital and defray incidental expenses related to the issuance.

(ii) Share Buybacks

For the financial year ended 31 March 2014, the Group did not enter into any share buyback transactions.

(iii) Options, Warrants or Convertible Securities

During the financial year ended 31 March 2014, a total of 100,000,000 options were granted and exercised pursuant to the Employees’ Share Option Scheme.

There was no exercise of Warrants into ordinary shares during the financial year ended 31 March 2014. As at 31 March 2014, 145,840,687 Warrants remained unexercised.

(iv) Depository Receipts Programme

The Company did not sponsor any Depository receipt programme for the financial year ended 31 March 2014.

(v) Imposition of Sanctions/Penalties

Save as disclosed below, there were no public sanctions and/or penalties imposed on the Group and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year ended 31 March 2014.

On 11th June 2014, the Company was publicly reprimanded by Bursa Malaysia Securities Berhad for alleged breach of Rule 9.12(1), Rule 9.12(2)(d)&(e) and Rule 9.13(d)&(e) of the ACE Market Bursa Listing Requirements for the Company had engaged in promotional disclosure activity via issuance of a series of press release on 15th August 2012 and 16th August 2012 and an advertorial published in The StarBizWeek on 18th August 2012 which were, amongst others, overstated, one-sided and/or unbalanced and had/might have misled investors or caused unwarranted price movement and activity in the Company’s securities.

At the same time, the former Executive Directors of the Company, Mr Wong Hun Liang and Mr Low Gah Luen were publicly reprimanded by Bursa Malaysia Securities Berhad and fined a sum of RM100,000.00 each for alleged breach of Rule 16.13(b) of the ACE Market Bursa Listing Requirements for permitting knowingly, or where they had reasonable means of obtaining such knowledge, for the Company to breach the aforesaid ACE Market Bursa Listing Requirements.

(vi) Non-audit fees

Non-audit fee paid or payable to the external auditors by the Company for the financial year ended 31 March 2014 was RM19,000.00 (2013 : RM 32,000.00).

25


Additional Compliance Informationcont’d

(vii) Profit Guarantee

The Company has entered into a profit guarantee agreement with Landasan Simfoni Sdn Bhd and Titanium Hallmark Sdn Bhd (“Vendors”) on 20 October 2011 that the aggregate unqualified audited profit after tax (“PAT”) of Vistavision Resources Sdn Bhd.(“VVR”) for the financial year ended 31 December 2011, 31 December 2012 and 31 December 2013 shall not less than RM7.50 million and the PAT for each financial years will not be less than RM 2.50 million. For the financial year ended (“FYE”) 31 March 2014, VVR’s PAT with excluding the effect of the cost of options under Employees’ Share Option Scheme (“ESOS”) is fairly consistent of meeting the profit guarantee. The aggregate PAT profit guarantees for the three (3) financial years is consistently met with excluding ESOS on the PAT for FYE 31.3.2014 as stated above.

(viii) Variation in Results

There was no deviation of 10% or more between the profit after taxation stated in the unaudited fourth quarter ended 31 March 2014 as previously announced and the audited financial statements of the Group for the financial year ended 31 March 2014.

(ix) Material Contract

For the financial year ended 31 March 2014, there were no material contracts entered into by the Group and its subsidiaries, which involved Directors’ or major shareholders’ interests.

(x) Corporate Social Responsibility Activities or Practices

The Company did not undertake any corporate social responsibility activities or practices during the financial year under review.

(xi) Employees’ Share Option Scheme (“ESOS”)

The Company has granted options under the ESOS governed By-Laws thas was approved by the shareholders at the Extraordinary General Meeting held on 17 January 2013.

On 20 May 2013, the Company implemented ESOS after approvals were obtained from the relevant authorities and was in force for a period of 5 years from the date of implementation subject to any extension on or prior to the expire thereof, for a further period of up to five years at the discretion of the Board of Directors upon the recommendation of the ESOS Committee.

There were a total of 100,000,000 options granted/offered and fully exercised during the financial year ended 31 March 2014. No options were granted to the Directors of the Company during the financial year ended 31 March 2014.

(xii) Recurrent Related Party Transactions of a Revenue or Trading Nature

Nature of Relationship

(a) Mr. Chin Boon Long (“CBL”), the Managing Director of Ingenuity Consolidated Berhad (“ICB”), is the spouse of Ms. Chan Swee Ying (“CSY”). He is an indirect major shareholder of ICB via his and his spouse’s interest in Firstwide Success Sdn Bhd (“Firstwide”).

(b) CBL is also a Managing Director of 1 Utopia Bhd. He ceased as major shareholder in 1 Utopia Bhd on 21 May 2014.

(c) CSY, the spouse of CBL is an indirect major shareholder of ICB by virtue of Firstwide’s direct interest in ICB.

26

Annual Report 2014


(xii) Recurrent Related Party Transactions of a Revenue or Trading Nature cont’d

Nature of Relationship cont’d

(d) Firstwide is an investment holding company and major shareholder of ICB. CBL and CSY are the Directors and major shareholders of Firstwide.

(e) PC3 Technology Sdn Bhd (“PC3”), PDA Expert Mobility Sdn Bhd (“PDA”), Essential Action Sdn Bhd (‘EASB”), Prestige Atoz Sdn. Bhd. (“Prestige”) and 1 Utopia Sdn Bhd (“ICT”) are wholly owned by 1 Utopia Berhad.

(f) CBL and CSY are Directors and major shareholders of First Grace Realty Sdn Bhd (“FGRSB”).

(g) Takaso Trading Sdn Bhd (“TTSB”) is wholly owned by Takaso Resources Berhad. TTSB involves in trading of general products.

(h) CBL is a major shareholder of Takaso Resources Berhad since 21 November 2013.

(xii) Recurrent Related Party Transactions of a Revenue or Trading Nature (“RRPT”)

Details of RRPT carried out by ICB Group during the financial year ended 31 March 2014 pursuant to the shareholders’ mandate obtained on 28 August 2013 are as follows:

ICB GroupTransacting

Party Nature of TransactionInterested

Related Party

Actual Value for financial year ended

31.3.2014(RM)

Ingens Sdn Bhd (“ISB”)

PC3 ISB supplies desktops / laptops hardware & other peripherals to PC3.

CBL, CSY Firstwide

102,229,138

ISB PC3 Purchase of IT notebooks and computers from PC3.

CBL, CSY Firstwide

78,813,707

ISB PDA ISB supplies desktops / laptops hardware & other peripherals to PDA.

CBL, CSY Firstwide

14,907,116

ISB PDA Purchase of IT notebooks and computers from PDA.

CBL, CSY Firstwide

3,932,484

ISB EASB ISB supplies desktops / laptops hardware & other peripherals to EASB.

CBL, CSY Firstwide

2,787,008

Inconnecxion Communications Sdn Bhd (“IncCSB”)

PDA IncCSB supplies telecommunication devices & other peripherals to PDA.

CBL, CSY Firstwide

0

IncCSB EASB IncCSB supplies telecommunication devices & other peripherals to EASB.

CBL, CSY Firstwide

2,486,453

Ingenuity Microsystems Sdn Bhd (“IMSB”)

FGRSB Letting of premises located at 12th & 13th Floor, Persoft Tower, 6B Persiaran Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor to IMSB (20,311sq ft at RM81,244.00 per month).

CBL, CSY Firstwide

974,928

27



(xii) Recurrent Related Party Transactions of a Revenue or Trading Nature (“RRPT”) cont’d

ICB GroupTransacting

Party Nature of TransactionInterested

Related Party

Actual Value for financial year ended

31.3.2014(RM)

ISB EASB Purchase of IT notebooks and computers from EASB.

CBL, CSY Firstwide

32,600,787

Ingens Commerce Sdn Bhd (“IComm”)

PDA Purchase of telecommunication products from PDA.

CBL, CSY Firstwide

5,224,288

IComm PC3 Purchase of telecommunication products from PC3.

CBL, CSY Firstwide

15,472

IComm EASB Purchase of telecommunication products from EASB.

CBL, CSY Firstwide

27,743

ISB Prestige ISB supplies IT notebooks and computers to Prestige.

CBL, CSY Firstwide

26,335,561

ISB Prestige Purchase IT notebooks and computers from Prestige.

CBL, CSY Firstwide

34,481,050

ISB PC3 ISB provides warehousing services to PC3 for ISB’s warehouse at Glenmarie, Shah Alam.

CBL, CSY Firstwide

100,000

IComm Prestige IComm supplies IT notebooks and computers to Prestige.

CBL, CSY Firstwide

3,451,230

IComm Prestige Purchase of IT notebooks and computers from Prestige.

CBL, CSY Firstwide

30,465

IComm 1Utopia Sdn. Bhd.

(“ICT”)

Rental of office, store and concourse area at Plaza Low Yat, Kuala Lumpur from ICT.

CBL, CSY Firstwide

311,070

IComm PDA IComm supplies telecommunication products to PDA.

CBL, CSY Firstwide

3,639,842

IComm PC3 IComm supplies IT notebooks and computers to PC3.

CBL, CSY Firstwide

18,442,880

IComm EASB IComm supplies IT notebooks and computers to EASB.

CBL, CSY Firstwide

3,240,151

The Group will be seeking renewal of the mandate from the shareholders to enter into proposed recurrent related party transactions of revenue or trading nature at the forthcoming Annual General Meeting, details of which are set out in the Circular to Shareholders dated 6th August 2014.

28

Annual Report 2014


The Audit Committee was established to fulfill the principles of accountability, integrity and good corporate governance in assisting the Board independently in discharging its responsibilities of reviewing and monitoring the Group’s financial process, audit process, statutory and regulatory compliance, code of business conduct, and other matters that the Board or the relevant authorities may specially delegate to the Audit Committee.

The Audit Committee Report spells out the Audit Committee composition, terms of reference, summary of activities and/or any material findings that may have affected the Group’ performance, controls and operations during the year in review.

MEMBERSHIP & COMPOSITION

The Audit Committee members are appointed by the Board amongst the Board members. The Chairman of the Audit Committee shall be elected among its members who shall be an Independent Director. Alternate directors shall not be members of the Audit Committee.

In accordance with Rule 15.09 of the Ace Market Listing Requirement, the Audit Committee shall consist of a minimum of three (3) members, all of whom must be non-executive directors, with majority of them being independent directors and at least one (1) member of the Committee fulfilling the following conditions:-

a) Must be a member of the Malaysian Institute of Accountants; or

b) If he is not a member of the Malaysian Institute of Accountant, he must have at least three (3) years working experience in the accounting field, and

i) Must have passed the examination specified in Part I of the 1st Schedule of the Accountants Act 1967; or

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

c) Fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad

The current composition of Audit Committee is as follow:-

Chairman - Ng Kok Hok (Independent Non-Executive Director)Members - Dato’ Johari Bin Yahya (Independent Non-Executive Director) - Tham Kah Yong (Independent Non-Executive Director)

TERMS OF REFERENCE

The terms of reference of the Audit Committee is authorised by the Board and is intended to assist the Board independently in further fulfilling the Board’s duties and responsibilities which includes reviewing, monitoring and highlighting the Group’s financial reporting process, audit process, statutory and regulatory compliance and code of business conduct.

The Audit Committee functions independently within its charter from other directors and office of the Group or the Company and may regulate its own procedures including the calling of meetings, notices to be given of such meetings, voting and its proceedings, keeping of minutes and inspection of such minutes.

In implementing or carrying out its term of reference and duties, management, internal auditors and officers of the Company are required to give full co-operation in providing information and resources to the Audit Committee as and when required.

29


Audit Committee Reportcont’d

TERMS OF REFERENCE cont’d

The Audit Committee’s terms of reference are as follows:

(a) To review the Group’s quarterly and yearly statement of financial position, statements of profit and loss and other comprehensive income, statements of cash flows and notes to the financial statements.

(b) To review and make necessary recommendations on the Group’s quarterly report announcements to ensure adherence to the Malaysian Financial Reporting Standards, International Financial Reporting Standards, accounting policy, listing and other requirements.

(c) To ensure compliance to existing and new accounting standards as well as highlighting significant issues and any accounting judgments to the Board.

(d) To review the consistency and compliance of the Group and its subsidiaries overall accounting policies and regulatory reporting process.

(e) To evaluate and assess the adequacy and integrity of the Group’s processes in relation to the overall audit process and internal control environment during the year.

(f) To highlight significant capital commitments, contingent liabilities any litigations against or taken by the Group.

(g) To review all related party transactions to ensure the transactions are conducted on normal commercial terms within the Company or the Group.

(h) To review with the external auditors the audit work plan for the annual audit and review the work scope and results of the audit procedures.

(i) To nominate a person or persons as external and internal auditors.

(j) To review with the external and internal auditors, the evaluation of the system of internal controls, the audit process and audit reports.

(k) To ensure there is an adequate control system on check and balance.

(l) To verify the allocation of options to the eligible employees pursuant to the Company’s Share Option Scheme for each financial year.

(m) To carry out any other duties and rights assigned by the Board within its charter or as per Bursa Malaysia Listing Requirements.

(n) To call and convene meetings with external auditors, internal auditors and officers of the Company as and when required.

(o) To review, highlight and recommend solutions to the Board and Management on material internal control and internal audit matters highlighted by internal auditors.

30

Annual Report 2014


MEETINGS AND ATTENDANCES

The committee is scheduled to meet at least four (4) times in each financial year with at least two (2) members present and the Company Secretary as the secretary of the Committee. The Committee may invite designated directors, key senior management and the auditors (internal and external) to be present during the Audit Committee meetings. The minutes of each Audit Committee meeting will be circulated to all Board members at the subsequent Board meeting.

During the financial year, there were five (5) Audit Committee meetings held and were duly attended by the members as shown below:

Audit Committee members Attendance

Ng Kok Hok 5/5Tham Kah Yong 5/5Dato’ Johari Bin Yahya (appointed on 29.05.2014) N/ALim Boon Hong (re-designated as Executive Director on 1.5.2014) 5/5

SUMMARY OF ACTIVITIES

Activities carried out by the Audit Committee during the financial year ended 31 March 2014 include the following:

• Review the quarterly and year end unaudited financial results and make necessary recommendations to the Board prior release to the relevant authorities and public on:

- Compliance with existing and new accounting standards, policies and practices. - Highlight any significant adjustments or usual events. - Compliance with Listing Requirements of Bursa Malaysia Securities Berhad, the requirements of the

Companies Act 1965 in Malaysia and other regulatory requirements.

• Review the external auditors’ year end report on the statutory financial statements of Group’s statements of financial position and statements of profit and loss and other comprehensive income and its subsidiaries, and thereafter, recommend to the Board of Directors for their consideration.

• Ensure managements’ compliance and adherence to laws, regulations, established policies, plans and guidelines on operational and reporting procedures.

• Review management letter and/or material findings highlighted by the external and internal auditors in relation to the audit program and major accounting issues that may have arisen during the course of the statutory and internal audit, to ensure that management has taken all necessary, acceptable and reasonable steps to address the findings.

• Make enquiry if there are any Related Party Transactions and to review to ensure the Related Party Transactions, if any, are on ordinary commercial terms and are not favorable to the related party than is generally available to the public, and that the transactions are not detrimental to the minority party.

• Review recurrent related party transactions entered into by the Group to ensure they are not detrimental to the minority party.

• Review the internal audit scope of work and its finding and to highlight to the Board on any material findings.

31



SUMMARY OF ACTIVITIES cont’d

• Review when necessary any special assignments approved by the Board that were undertaken by Management, which includes staff reorganisation, accounting policy and credit control.

INTERNAL AUDIT FUNCTION

The establishment of the Internal Audit Function provides the Directors and the Audit Committee with an independent assessment and appraisal/review of the effectiveness and reliability of the Group’s internal controls and information system.

The internal audit function includes the review, assessment and provision of reasonable assurance that the Group’s internal control are functioning as planned and able to highlight all material deviation or findings to the Audit Committee immediately. To maintain impartiality and independence, the internal auditors report directly to the Audit Committee on the overall assessment of the Group’s internal control mechanism.

To further discharge its duties and responsibilities effectively, the internal auditors can obtain the assistance of the group’s senior management and staff in providing all the necessary information as and when required.

The Group’s internal audit was carried out by a professional and independent advisory firm appointed by the Board with the recommendation of the Audit Committee. The cost incurred for the internal audit function for the year ended 31 March 2014 amount to RM19,000.00

During the financial year, there were no material deviation or weakness in the internal control system that were highlighted by the Group’s internal or external auditors; and the internal control mechanism/ process has provided sufficient assurance and obtained a reliable and fair appraisal of the Group’s internal control mechanism.

EMPLOYEES’ SHARE OPTION SCHEME (‘ESOS”)

The allocation of ESOS were verified by the Audit Committee for each financial year to ensure compliance with the allocation criteria determined by the ESOS Committee and in accordance with the By-Laws of the ESOS.

32

Annual Report 2014


INTRODUCTION

The Board is pleased to provide the following Statement on Risk Management and Internal Control for the financial year ended 31 March 2014. This statement is made in compliance with Rule 15.26(b) of the Bursa Malaysia Securities Berhad ACE Market Listing Requirements and the Malaysian Code on Corporate Governance 2012 (“MCCG”).

BOARD’S RESPONSIBILITY

MCCG prescribes as a principle of Corporate Governance that the Board of Directors should establish a sound risk management framework and system of internal control to safeguard shareholders’ investment and the Company’s assets. The Board recognizes the importance of sound internal controls and risk management practices to ensure good corporate governance. The related principal responsibilities of the Board in relation to internal controls are set out below:

• Identifying principal risks and ensuring the implementation of appropriate control systems to manage these risks.

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

The Board affirms that its overall responsibility is maintaining and implementing an adequate and effective internal control system on an ongoing basis to identify, evaluate, monitor and manage significant business risks or internal control failures. The Board wishes to highlight that in any internal control system (which covers not only financial but operational and compliance controls as well), it does have inherent limitations; and the internal control system can only provide reasonable and not absolute assurance against all business and financial risk, human error or deliberate circumvention of the controls that were put in place.

The Board is assisted by the Management in the implementation of the Board’s policies and procedures on risk and control by identifying and assessing the risks faced, and in the design, operation and monitoring suitable internal controls to mitigate and control these risks.

RISK MANAGEMENT FRAMEWORE

The Board understands the importance of risk management framework in identifying and managing risks areas which impede the achievement of the Group business objectives. This process involves the establishment of a Risk Management Framework to identify, evaluate and manage the significant risks impacting by the Group.

The Group plans to put in place an Enterprise Risk Management (“ERM”) framework in the next financial year to provide a consistent approach towards facilitating an adequate risk assurance process in assessing risks within the Group.

The key features of the ERM framework are as follows:

• Outline the ERM methodology on the identification of key business risks through a structured approach and to determine if controls are in place in mitigating the risks identified.

• Establish guidelines to enable the Management to prioritise the risks and allocation of resources to manage the risks.

33


Statement on Risk Management & Internal Controlcont’d

INTERNAL CONTROL STRUCTURE, ELEMENTS AND PORCESSES

The Group’s internal control mechanism provides both an integral framework and effective monitoring tool in ensuring that the business operates without major disruptions; material losses are mitigated; and compliance to applicable laws and regulations adhered to during the year.

The Board ensures financial and operational review are conducted periodically by the Management and advisors in order to identify, manage and address current or future events that may affect the Group’s operations, controls and business plans, which includes the following:

• Organizational Structure

The organisational structure ensures that the roles and responsibilities of the Board and the Management are clearly defined in ensuring effective discharge of roles and responsibilities that will provide authority limits, terms of reference and functions with clear hierarchical reporting procedures within the Group. The Managing Director, Executive Director and Chief Financial Officer lead all board papers presentation with the assistance of the respective Heads of Divisions and reports to the Board on all pertinent issues that may affect the Group’s business and operations.

• Management, Audit, Nomination and Remuneration Committees

Management meetings are held and attended by senior personnel to address operational issues, budgets, performance, business review/planning and control management. Key personnel will be invited from the respective subsidiaries and divisions to provide quarterly reports to the Management on their performance, compliance, strategic plans and highlight major issues that need attention.

The Managing Director, Executive Director and Chief Financial Officer will report material findings and/or variances at the Audit Committee and thereafter tabled to the Board, and the Board will review its implication to the Group and provide recommended strategies to address them.

The Nomination Committee and Remuneration Committee, whose majority members consist of independent directors, were established to maintain a higher level of Corporate Governance and exercise independence judgment and decision in discharging the duties of nominating and remunerating directors, management and key personnel based on performance, skills and experience.

• Documentation and Procedures

To ensure subsidiaries, business units, divisions and employees are working coherently to achieve the Group’s overall business objectives, corporate policies and procedures of the Group are clearly documented and disseminated through internal memorandums, staff briefings and operational meetings.

INTERNAL AUDIT FUNCTION

The Group’s internal audit function is outsourced to an independent professional firm that specialises in the provision of internal audit services at a cost of RM19,000 during the year. In addition, the internal audit function is responsible for conducting con¬sistent and systematic reviews on the adequacy and integrity of internal control systems to provide reasonable assurance that risks are appropriately identified and mitigated. The Board and Audit Committee believe that this ensures a professional yet independent assessment is obtained on the Group’s internal control mechanism.

Statement on Risk Management & Internal Controlcont’d

INTERNAL CONTROL SUMMARY

During the year, the Board is of the opinion that the internal control system has been adequate and effective; and there were no major internal control failures that may have resulted in material losses or contingencies to the Group. To ensure the effectiveness, reliability and relevance of the internal controls, the Management under the supervision of the Board and with input from the internal auditors will continuously improve on the internal control systems that are in place so that shareholders’ investment and the Group’s assets are consistently safeguarded.

ASSURANCE PROVIDED BY THE MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER

The Board also received assurance from the Managing Director and the Chief Financial Officer that the Group’s risk management and internal control system is operating adequately and effectively.

CONCLUSION

The Board has reviewed the risk management and internal control systems and is of the view that the system of internal control and risk management in place for the year under review is adequate and effective to safeguard the shareholders’ interests and assets of the Group.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

The External Auditors have reviewed the Statement on Risk Management and Internal Control and reported to the Board that nothing has come to their attention that caused them to believe that the Statement of Risk Management and Internal Control is not prepared, in all material aspects, in accordance with the disclosure required by the Guidelines for Directors of Lister Issuers on the Statement on Risk Management and Internal Control.

This Statement is made in accordance with the resolution of the Board dated 24 July 2014.

34

Annual Report 2014

Financial StatementsDirectors’ ReportStatement by DirectorsStatutory DeclarationIndependent Auditors’ ReportStatements of Financial PositionStatements of Profit or Loss and Other Comprehensive IncomeStatements of Changes in EquityStatements of Cash FlowsNotes to the Financial Statements

364141424446474951

36

Annual Report 2014

The Directors have pleasure in submitting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2014.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding.

The principal activities of the subsidiary companies are disclosed in Note 5 to the financial statements.

There have been no significant changes in the nature of these activities of the Company and its subsidiary companies during the financial year.

FINANCIAL RESULTS

Group CompanyRM RM

Net profit/(loss) for the financial year 1,683,924 (411,319)

Attributable to:-Owners of the Company 1,711,327Non-controlling interests (27,403)

1,683,924

RESERVES AND PROVISIONS

All material transfers to or from reserves and provisions during the financial year are as disclosed in the financial statements.

DIVIDENDS

There were no dividends proposed, declared or paid by the Company since the end of the previous financial year.

The Directors did not recommend any dividend for the current financial year.

DIRECTORS

The Directors in office since the date of the last report are:-

Dato’ Johari Bin Yahya (Chairman,IndependentNon-ExecutiveDirector,appointedon29.5.2014)Chin Boon Long (ManagingDirector,redesignatedon29.5.2014)Lim Boon Hong (ExecutiveDirector,redesignatedon1.5.2014)Ng Kok Hok (IndependentNon-ExecutiveDirector)Tham Kah Yong (IndependentNon-ExecutiveDirector)Low Gah Luen (ExecutiveDirector,resignedon31.10.2013)Wong Hun Liang (ExecutiveDirector,resignedon29.5.2014)

Directors’ Report

37


Directors’ Reportcont’d

DIRECTORS’ INTERESTS

According to the Register of Directors’ Shareholdings, the direct interests and deemed interests in the shares of the Company and its related corporations other than wholly-owned subsidiary companies of those who were Directors at the end of the financial year (including their spouses or children) are as follows:-

Number of ordinary shares of RM0.10 each

Interest in the CompanyAt

1.4.2013 Bought SoldAt

31.3.2014

Direct interestChin Boon Long 68,800,732 8,000,000 (51,324,500) 25,476,232

Indirect/deemed interestChin Boon Long# 103,616,924 - (15,645,000) 87,971,924

# byvirtueofhisspouseandhisshareholdingsinFirstwideSuccessSdnBhd.

By virtue of Mr. Chin Boon Long interest in the shares of the Company, he is also deemed to have interest in the shares of all the subsidiary companies to the extent that the Company has an interest under Section 6A of the Companies Act, 1965.

Other than those disclosed above, none of the other Directors in office at the end of the financial year had any interests in the shares of Company or its related corporations during the financial year.

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling the 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, other than the share options granted pursuant to the Employee Share Option Scheme (“ESOS”).

Since the end of the previous financial year, no Director has received or become entitled to receive any benefits (other than as disclosed in Note 21, 25 and 26 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.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company issued:-

(a) 130,000,000 ordinary shares of RM0.10 each at RM0.10 for a total cash consideration of RM13,000,000 pursuant to the private placement;

(b) 43,950,000 ordinary shares of RM0.10 each at RM0.11 per share for a total consideration of RM4,834,500 pursuant to the private placement;

(c) 100,000,000 ordinary shares of RM0.10 each arising from the exercise of employee’s share options at exercise price of RM0.10 per ordinary share.

38

Annual Report 2014


ISSUE OF SHARES AND DEBENTURES cont’d

The new ordinary shares issued during the financial year rank pari passu in all respect with the existing ordinary shares of the Company and are for working capital purpose.

There was no issuance of debentures during the financial year.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year apart from the issuance of share options pursuant to the Employee Share Option Scheme (“ESOS”) and Warrants 2011/2016.

ESOS

The ESOS is governed by the by-laws which were approved by the Shareholders at the Extraordinary General Meeting held on 17 January 2013. On 20 May 2013, the Company implemented ESOS after approvals were obtained from the relevant authorities and was in force for a period of 5 years from the date of implementation subject to any extension on or prior to the expiry thereof, for a further period of up to five years at the discretion of the Board of Directors upon the recommendation of the ESOS Committee.

The salient features and other terms of the ESOS are as disclosed in Note 25 to the financial statements.

WARRANT 2011/2016

The Company had on 19 July 2011 allotted and issued 243,189,716 ordinary shares pursuant to rights issue (“rights shares”) together with 182,392,287 warrants at an issue price of RM0.10 each on the basis of 4 rights shares together with 3 free detachable warrants for every 2 existing ordinary shares held in the Company on 6 June 2011 (“Warrants 2011/2016”). Each Warrants 2011/2016 entitles the registered holder to subscribe for 1 new ordinary share in the Company at any time on or after 19 July 2011 to 18 July 2016, at an exercise price of RM0.10 in accordance with a Deed Poll. Any warrant not exercised by the date of maturity will lapse thereafter and cease to be valid for all purposes. As at the reporting date, 36,551,600 Warrants 2011/2016 have been exercised.

The ordinary shares issued from the exercise of Warrants 2011/2016 shall rank pari passu in all respects with the existing ordinary shares of the Company except that they shall not be entitled to any dividends, rights, allotments and/or other distributions declared, the entitlement date of which is prior to the date of allotment of the new shares arising from the exercise of Warrants 2011/2016.

The Warrants 2011/2016 are constituted by a Deed Poll dated 9 June 2011.

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were made out, 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 adequate allowance had been made for doubtful debts; and

39


OTHER STATUTORY INFORMATION cont’d

(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their value as shown in the accounting records of the Group and of the Company have been written down to an amount which they 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 amount 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 would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(d) not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.

At the date of this report, there does not exist:-

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

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

In the opinion of the Directors:-

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

(b) the results of operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature, except for those disclosed in Note 32(vii) to the financial statements; and

(c) 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 and of the Company for the financial year in which this report is made.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR AND AFTER THE REPORTING DATE

The significant events during the financial year and after the reporting date are disclosed in Note 32 to the financial statements.


40

Annual Report 2014

AUDITORS

The Auditors, Messrs SJ Grant Thornton have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

CHIN BOON LONG ) ) ) ) ) ) DIRECTORS ) )LIM BOON HONG )

Kuala Lumpur25 July 2014


41


In the opinion of the Directors, the financial statements set out on pages 44 to 107 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2014 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the information set out on page 108 has been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

CHIN BOON LONG LIM BOON HONG Kuala Lumpur25 July 2014

I, Kenny Khow Chuan Wah, being the Officer primarily responsible for the financial management of Ingenuity Consolidated Berhad do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 44 to 107 and the financial information set out on page 108 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed at Kuala Lumpur in )the Federal Territory this day of )25 July 2014 ) KENNY KHOW CHUAN WAH

Before me:

Commissioner for OathsS. ARULSAMY W.490

Statement by Directors

Statutory Declaration

42

Annual Report 2014

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Ingenuity Consolidated Berhad which comprise the statements of financial position of the Group and of the Company as at 31 March 2014, statements of profit or loss and other 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 a summary of significant accounting policies and other explanatory information as set out on pages 44 to 107.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal controls as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation of financial statements that give a true and fair view 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 entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 March 2014 and of their financial performance and 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, 1965 in Malaysia.

Independent Auditors’ Reportto the Members of Ingenuity Consolidated Berhad(Incorporated in Malaysia) Company No: 609423 V

43


REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:-

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiary companies have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(c) The audit reports on the accounts of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out on page 108 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

SJ GRANT THORNTON DATO’ N. K. JASANI(NO. AF: 0737) (NO: 708/03/16(J/PH))CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT Kuala Lumpur25 July 2014

Independent Auditors’ Reportto the Members of Ingenuity Consolidated Berhad

(Incorporated in Malaysia) Company No: 609423 Vcont’d

44

Annual Report 2014

Group CompanyNote 2014 2013 2014 2013

RM RM RM RM

ASSETSNon-current assets

Property, plant and equipment 4 31,896,446 17,642,966 3,045 302 Investment in subsidiary companies 5 - - 26,875,826 21,875,828 Intangible assets 6 2,535,974 5,349,662 - - Goodwill on consolidation 7 9,781,233 9,781,233 - -

Total non-current assets 44,213,653 32,773,861 26,878,871 21,876,130

Current assetsInventories 8 25,113,003 15,240,155 - - Trade receivables 9 64,188,184 67,047,049 - - Other receivables 10 15,961,279 4,507,417 26,799 5,278 Amount due from subsidiary companies 5 - - 65,594,595 39,551,715 Fixed deposits with a licensed bank 11 1,068,628 1,066,500 - - Cash and bank balances 13,847,399 5,131,050 391,149 80,596

Total current assets 120,178,493 92,992,171 66,012,543 39,637,589

Total assets 164,392,146 125,766,032 92,891,414 61,513,719

EqUITY AND LIABILITIESEqUITY

Equity attributable to the owners of theCompany

Share capital 12 85,379,884 57,984,884 85,379,884 57,984,884 Reserves 13 12,889,998 (562,634) 6,974,902 3,000,224

98,269,882 57,422,250 92,354,786 60,985,108 Non-controlling interests (132,085) (183,707) - -

Total equity 98,137,797 57,238,543 92,354,786 60,985,108

LIABILITIESNon-current liabilities

Borrowings 14 5,458,935 5,306,683 - - Hire purchase creditors 15 39,256 72,702 - - Deferred tax liabilities 16 764,009 267,000 - -

Total non-current liabilities 6,262,200 5,646,385 - -

Statements of Financial Positionfor the financial year ended 31 March 2014

45



RM RM RM RM

Current liabilitiesTrade payables 17 46,447,661 56,209,994 - - Other payables 18 5,395,465 3,943,159 97,128 107,175 Amount due to a subsidiary company 5 - - 400,000 400,100 Amount due to Directors 19 262,500 21,336 39,500 21,336 Borrowings 14 7,815,499 2,446,210 - - Hire purchase creditors 15 30,745 35,490 - - Tax payable 40,279 224,915 - -

Total current liabilities 59,992,149 62,881,104 536,628 528,611

Total liabilities 66,254,349 68,527,489 536,628 528,611

Total equity and liabilities 164,392,146 125,766,032 92,891,414 61,513,719

Statements of Financial Positionfor the financial year ended 31 March 2014

cont’d

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

46

Annual Report 2014

Statements of Profit or Loss and Other Comprehensive Incomefor the financial year ended 31 March 2014


RM RM RM RM

Revenue 20 613,208,725 553,585,047 - - Cost of sales 20 (595,120,893) (530,494,489) - -

Gross profit 18,087,832 23,090,558 - - Other income 15,308,969 1,860,971 - 17,657 Selling and promotion expenses (5,405,966) (4,346,024) - - Administration expenses (15,914,050) (13,275,419) (411,319) (1,119,689)ESOS expenses (4,000,000) - - - Other expenses (3,118,777) (100,744) - - Finance costs (1,884,860) (350,364) - -

Profit/(Loss) before tax 21 3,073,148 6,878,978 (411,319) (1,102,032)Tax expense 22 (1,389,224) (1,163,119) - -

Net profit/(loss) for the financial year 1,683,924 5,715,859 (411,319) (1,102,032)

Other comprehenisve income, net of taxItems that will not be recalssified subsequently

to profit or lossRevaluation of freehold land and building 7,353,158 - - -

Items that are or may be reclassified subsequently to profit or lossForeign currency translation difference arising

from a foreign subsidiary company 2,150 - - -

Total comprehensive income/(loss) for thefinancial year 9,039,232 5,715,859 (411,319) (1,102,032)

Profit/(Loss) for the financial year attributable to:Owners of the Company 1,711,327 5,900,088 (411,319) (1,102,032)Non-controlling interests (27,403) (184,229) - -

1,683,924 5,715,859 (411,319) (1,102,032)

Total comprehensive income attributable to:Owners of the Company 9,066,635 5,900,088 (411,319) (1,102,032)Non-controlling interests (27,403) (184,229) - -

9,039,232 5,715,859 (411,319) (1,102,032)

Earnings per share- Basic (sen) 23 0.22 1.05

- Diluted (sen) 23 * 0.99 * Therearenodilutivepotentialequity instruments incurrentyear thatwouldgiveadilutedeffect to thebasisearningsper

share.The accompanying notes form an integral part of the financial statements.

47


Statements of Changes in Equityfor the financial year ended 31 March 2014

Attr

ibut

able

to e

quity

hol

ders

of t

he C

ompa

ny

Non

-dist

ribut

able

Shar

eca

pita

lSh

are

prem

ium

Reva

luati

on

rese

rve

War

rant

rese

rve

ESOS

rese

rve

Mer

ger

defic

it

Exch

ange

tra

nsla

tion

rese

rve

Accu

mul

ated

loss

esTo

tal

Non-

cont

rolli

ngin

tere

sts

Tota

leq

uity

RMRM

RMRM

RMRM

RMRM

RMRM

RM

Grou

pBa

lanc

e as

at 1

Apr

il 20

12 5

4,32

9,72

4 1

2,15

3,25

1 -

8,2

07,6

53

- (7

,900

,000

) -

(18,

923,

626)

47,

867,

002

- 4

7,86

7,00

2

Tran

sacti

ons w

ith o

wne

rs:

Issua

nce

of sh

ares

aris

ing

from

ex

ercis

e of

war

rant

s 3

,655

,160

-

- -

- -

- -

3,6

55,1

60

- 3

,655

,160

Tr

ansfe

r of w

arra

nt re

serv

e to

ac

cum

ulat

ed lo

sses

- -

- (1

,644

,822

) -

- -

1,6

44,8

22

- -

- Re

alisa

tion

upon

disp

osal

of

subs

idia

ry co

mpa

ny -

- -

- -

- -

- -

420

4

20

Arisi

ng fr

om su

bscr

iptio

n of

shar

es

in su

bsid

iary

com

pani

es -

- -

- -

- -

- -

102

1

02

Tota

l tra

nsac

tions

with

ow

ners

3,6

55,1

60

- -

(1,6

44,8

22)

- -

- 1

,644

,822

3

,655

,160

5

22

3,6

55,6

82

Tota

l com

preh

ensiv

e in

com

e fo

r the

fin

ancia

l yea

r -

- -

- -

- -

5,9

00,0

88

5,9

00,0

88

(184

,229

) 5

,715

,859

Bala

nce

as a

t 31

Mar

ch 2

013

57,

984,

884

12,

153,

251

- 6

,562

,831

-

(7,9

00,0

00)

- (1

1,37

8,71

6) 5

7,42

2,25

0 (1

83,7

07)

57,

238,

543

Tran

sacti

ons w

ith o

wne

rs:

Issua

nce

of sh

ares

aris

ing

from

pr

ivate

pla

cem

ent

17,

395,

000

385

,997

-

- -

- -

- 1

7,78

0,99

7 -

17,

780,

997

ESOS

gra

nted

- -

- 4

,000

,000

-

- -

4,0

00,0

00

- 4

,000

,000

Ex

ercis

e of

ESO

S 1

0,00

0,00

0 -

- -

- -

- -

10,

000,

000

- 1

0,00

0,00

0 Ar

ising

from

acq

uisiti

on o

f a

subs

idia

ry co

mpa

ny -

- -

- -

- -

- -

79,

025

79,

025

Tota

l tra

nsac

tions

with

ow

ners

27,

395,

000

385

,997

-

- 4

,000

,000

-

- -

31,

780,

997

79,

025

31,

860,

022

Net p

rofit

for t

he fi

nanc

ial y

ear

- -

- -

- -

- 1

,711

,327

1

,711

,327

(2

7,40

3) 1

,683

,924

Re

valu

ation

of p

rope

rty, p

lant

and

eq

uipm

ent

- -

7,3

53,1

58

- -

- -

- 7

,353

,158

-

7,3

53,1

58

Fore

ign cu

rrenc

y tra

nslati

on

diffe

renc

es a

risin

g fro

m a

fore

ign

subs

idia

ry co

mpa

ny -

- -

- -

- 2

,150

-

2,1

50

- 2

,150

Tota

l com

preh

ensiv

e in

com

e fo

r the

fin

ancia

l yea

r -

- 7

,353

,158

-

- -

2,1

50

1,7

11,3

27

9,0

66,6

35

(27,

403)

9,0

39,2

32

Tran

sfer t

o sh

are

prem

ium

for E

SOS

exer

cised

- 4

,000

,000

-

- (4

,000

,000

) -

- -

- -

-

Bala

nce

as a

t 31

Mar

ch 2

014

85,

379,

884

16,

539,

248

7,3

53,1

58

6,5

62,8

31

- (7

,900

,000

) 2

,150

(9

,667

,389

) 9

8,26

9,88

2 (1

32,0

85)

98,

137,

797

48

Annual Report 2014

Statements of Changes in Equityfor the financial year ended 31 March 2014cont’d

Attributable to equity holders of the Company Non-distributable

Sharecapital

Sharepremium

Warrantreserve

ESOSreserve

Accumulatedlosses Total

RM RM RM RM RM RM

CompanyBalance as at 1 April 2012 54,329,724 12,153,251 8,207,653 - (16,258,648) 58,431,980

Transactions with owners:

Issuance of shares arising from excerise of warrants 3,655,160 - - - - 3,655,160

Transfer of warrant reserve to accumulated losses - - (1,644,822) - 1,644,822 -

Total transactions with owners 3,655,160 - (1,644,822) - 1,644,822 3,655,160 Total comprehensive loss for the

financial year - - - - (1,102,032) (1,102,032)

Balance as at 31 March 2013 57,984,884 12,153,251 6,562,831 - (15,715,858) 60,985,108

Transactions with owners:

Issuance of shares arising from private placement 17,395,000 385,997 - - - 17,780,997

ESOS granted - - - 4,000,000 - 4,000,000 Exercise of ESOS 10,000,000 - - - - 10,000,000

Total transactions with owners 27,395,000 385,997 - 4,000,000 - 31,780,997 Total comprehensive loss for the

financial year - - - - (411,319) (411,319)Transfer to share premium for ESOS

exercised - 4,000,000 - (4,000,000) - -

Balance as at 31 March 2014 85,379,884 16,539,248 6,562,831 - (16,127,177) 92,354,786


49


Statements of Cash Flowsfor the financial year ended 31 March 2014


RM RM RM RM

OPERATING ACTIVITIESProfit/(Loss) before tax 3,073,148 6,878,978 (411,319) (1,102,032)

Adjustments for:-Allowance for impairment loss on receivables 111,709 77,059 - - Allowance for impairment loss on receivables

no longer required (62,109) (102,588) - - Amortisation of intangible assets 1,019,366 799,173 - - Bad debts written off 92,737 114,690 - - Depreciation 1,835,295 1,255,174 546 38 ESOS expenses 4,000,000 - - - Gain on disposal of intangible assets (8,205,678) - - - Gain on disposal of property, plant and

equipment (427) (1,096) - - Gain on disposal of a subsidiary company - (438) - - Interest expenses 1,884,483 347,107 - - Interest income (1,199,164) (49,207) - (17,657)Insurance claims (1,734,234) - - - Inventories written off 1,836,775 - - - Inventories written down 3,195 84,504 - - Property, plant and equipment written off 144,123 45,069 - -

Operating profit/(loss) before working capitalchanges 2,799,219 9,448,425 (410,773) (1,119,651)

Changes in working capital:-Inventories (11,712,818) (7,484,860) - - Receivables (5,839,112) (28,378,504) (21,521) (5,278)Payables (9,209,467) 20,334,266 (10,047) 70,572

Cash used in operations (23,962,178) (6,080,673) (442,341) (1,054,357)Tax paid (1,463,860) (1,137,450) - - Interest paid (985,043) (347,107) - - Interest received 35,176 49,207 - 17,657

Net cash used in operating activities (26,375,905) (7,516,023) (442,341) (1,036,700)

INVESTING ACTIVITIESAcquisition of subsidiary companies - - (999,998) (2)Advances to subsidiary companies - - (26,042,980) (4,582,073)Purchase of property, plant and equipment (8,496,913) (16,195,817) (3,289) (340)Proceeds from disposal of intangible assets 10,000,000 - - - Proceeds from disposal of property, plant and

equipment 4,609 222,589 - - Proceed from disposal of a subsidiary

company A - 1 - - Discharge of fixed deposits pledged with a

licensed bank - 1,000,000 - - Net cash from/(used in) investing activities 1,507,696 (14,973,227) (27,046,267) (4,582,415)

50

Annual Report 2014


RM RM RM RM

FINANCING ACTIVITIESAdvances by Directors 241,164 21,336 18,164 21,336 Net drawdown of borrowings 5,521,541 7,752,893 - - Proceeds from issuance of shares, net of

share issuance expenses 27,780,997 3,655,160 27,780,997 3,655,160 Repayment of hire purchase creditors (38,191) (42,928) - - Subscription of shares by non-controlling

interests 79,025 102 - - Net cash from/(used in) financing activities 33,584,536 11,386,563 27,799,161 3,676,496

CASH AND CASH EqUIVALENTSNet increase/(decrease) 8,716,327 (11,102,687) 310,553 (1,942,619)Effect of forex translation differences 2,150 - - - At beginning of financial year 6,197,550 17,300,237 80,596 2,023,215 At end of financial year B 14,916,027 6,197,550 391,149 80,596

NOTES TO THE STATEMENTS OF CASH FLOWS:- A. GAIN ON DISPOSAL OF A SUBSIDIARY COMPANY

Group2013

RM

Amount due from Directors 100 Other payables (957)Net liabilities disposed (857)Less: Non-controlling interests 420 Share of net liabilities disposed (437)Gain on disposal of a subsidiary company 438 Sale proceed from disposal of a subsidiary company 1

B. CASH AND CASH EqUIVALENTS

Group Company2014 2013 2014 2013

RM RM RM RM

Cash and bank balances 13,847,399 5,131,050 391,149 80,596 Fixed deposits with a licensed bank 1,068,628 1,066,500 - -

14,916,027 6,197,550 391,149 80,596

* Asdisclosed inNote11tofinancialstatements,RM68,628(2013:RM66,500)hasbeenpledgedtoa licensedbankassecurityforguaranteeextendedtoathirdpartyforbusinesspurposesandhence,arenotavailableforgeneraluse.

Statements of Cash Flowsfor the financial year ended 31 March 2014cont’d


51


Notes to the Financial Statements31 March 2014

1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the ACE Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur. The principal place of business of the Company is located at 12th Floor, Persoft Tower, 6B Persiaran Tropicana, Tropicana Golf & Country Resorts, 47410 Petaling Jaya, Selangor Darul Ehsan.

The Company is principally engaged in investment holding.

The principal activities of the subsidiary companies are disclosed in Note 5 to the financial statements.

There have been no significant changes in the nature of these activities of the Company and its subsidiary companies during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Board of Directors passed on 25 July 2014.

2. BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the requirements of the Companies Act, 1965 in Malaysia.

2.2 Basis of measurement The financial statements of the Group and of the Company are prepared under the historical cost

convention, unless otherwise indicated in the summary of significant accounting policies.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to by the Group and the Company.

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

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

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

52

Annual Report 2014

Notes to the Financial Statements31 March 2014cont’d

2. BASIS OF PREPARATION cont’d

2.2 Basis of measurement cont’d

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

(a) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

(b) Level 2 - Valuation techniques for which the lowest level input that is significant to their fair value measurement is directly or indirectly observable.

(c) Level 3 - Valuation techniques for which the lowest level input that is significant to their fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to their fair value measurement as a whole) at the end of each reporting date.

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

2.3 Functional and presentation currency

The financial statements are presented in Ringgit Malaysia (“RM”) which is the Group’s and the Company’s functional currency and all values are rounded to the nearest RM except when otherwise stated.

2.4 Adoption of new and revised MFRSs, amendments/improvements to MFRSs, and IC Interpretations (“IC Int”)

The Group and the Company have consistently applied the accounting policies set out in Note 3 to the financial statements to all periods presented in these financial statements.

At the beginning of the current financial year, the Group and the Company adopted MFRSs and amendments to MFRSs which are mandatory for the financial periods beginning on or after 1 April 2013.

Initial application of the standards and amendments to the standards did not have material impact to the financial statements except for the following:

MFRS 13 Fair Value Measurement

The Group and the Company have applied MFRS 13 for the first time in the current financial period. MFRS 13 established a single source of guidance and disclosure for fair value measurements. The scope of MFRS 13 is broad.

53



cont’d


2.4 Adoption of new and revised MFRSs, amendments/improvements to MFRSs, and IC Interpretations (“IC Int”) cont’d

MFRS 13 Fair Value Measurement cont’d

The fair value measurement requirements of MFRS 13 apply to both financial instrument items and non-financial instrument items for which other MFRSs require or permit fair value measurements and disclosures about fair value measurements, except for share-based payment transactions that are within the scope of MFRS 2 Share-based Payment, leasing transaction that are within the scope of MFRS 117 Leases, and measurements that have some similarities to fair value but are not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes).

MFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under MFRS 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, MFRS 13 includes extensive disclosure requirements.

MFRS 13 requires prospective application from 1 April 2013. In addition, specific transition provisions were given to entities such that they need not apply the disclosure requirements set out in the MFRS 13 in comparative information provided for periods before the initial application of the MFRS 13. In accordance with these transitional provisions, the Group has not made any new disclosures required by MFRS 13 for the comparative period. Other than the additional disclosures, the application of MFRS 13 has not had any material impact on the amounts recognised in the consolidated financial statements.

2.5 Standards issued but not yet effective

The Group and the Company have not applied the following MFRSs that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the Group and the Company:

AmendmentstoMFRSsandInterpretationeffective1January2014:

MFRS 10 Consolidated Financial Statements: Investment EntitiesMFRS 12 Disclosure of Interests in Other Entities: Investment EntitiesMFRS 127 Separate Financial Statements: Investment EntitiesMFRS 132 Financial Instruments: Presentation - Offsetting Financial Assets and Financial

LiabilitiesMFRS 136 Recoverable Amount Disclosures for Non-Financial AssetsMFRS 139 Financial Instrument: Recognition and Measurement - Novation of Derivatives

and Continuation of Hedge AccountingIC Interpretation 21* Levies

54

Annual Report 2014



2.5 Standards issued but not yet effective cont’d

The Group and the Company have not applied the following MFRSs that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the Group and the Company: cont’d

AmendmentstoMFRSseffective1July2014:

MFRS 119 * Defined Benefit Plans: Employee ContributionsAnnual improvements to MFRSs 2010-2012 CycleAnnual improvements to MFRSs 2011-2013 Cycle

AmendmentstoMFRSseffective1July2016:

MFRS 11 * Accounting for Acquisition of Interests in Joint OperationsMFRS 116 Property, Plant and Equipment: Clarification of Acceptable Methods of

DepreciationMFRS 138 Intangible Assets: Clarification of Acceptable Methods of Amortisation

MFRSeffective1January2016:

MFRS 14 * Regulatory Deferral Accounts

MFRSseffectivedatetobedetermined:

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009)MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010)

* NotapplicabletotheGroup’sandtheCompany’soperations.

The initial application of the above standards, amendments and interpretation are not expected to have any financial impacts to the financial statements, except for:

MFRS 9 Financial Instruments

MFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities. It replaces the guidance in MFRS 139 Financial Instruments: Recognition and Measurement. MFRS 9 requires financial assets to be classified into two measurement categories: fair value and amortised cost, determined at initial recognition. The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. Most of the requirements for financial liabilities are retained, except for cases where the fair value option is taken, the part of a fair value change due to an entity’s own risk is recorded in other comprehensive income rather than profit or loss, unless this creates an accounting mismatch.

The Group’s and the Company’s management has yet to access the impact of this new standard on the Company’s financial statements. Management does not expect to implement MFRS 9 until it has been completed and its overall impact can be assessed.

55



cont’d


2.6 Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and of the Company’s accounting policies and reported amounts of assets, liabilities, income, expenses and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

2.6.1 Estimation uncertainty

Information about significant estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below:

Revaluation of property, plant and equipment

The Group measures its freehold land and building at revalued amount with changes in the fair value being recognised in other comprehensive income. The Group engaged independent valuation specialists to determine fair value as at 31 March 2014.

The carrying amount of the land and building at the reporting date and the relevant revaluation bases, are disclosed in Note 4 to the financial statements.

Useful lives of depreciable assets

Management estimates the useful lives of the property, plant and equipment to be within 2 to 50 years and reviews the useful lives of depreciable assets at each reporting date. As at 31 March 2014, management assesses that the useful lives represent the expected utility of the assets to the Group. Actual results, however, may vary due to change in the expected level of usage and technological developments, which resulting the adjustment to the Group’s assets.

The carrying amount of the Group’s property, plant and equipment at the reporting date is disclosed in Note 4 to the financial statements.

A 1% difference in the expected useful lives of the property, plant and equipment from the management’s estimates would result in approximately 2% (2013: Nil) variance in the Group’s profit for the financial year.

Impairment of non-financial assets

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. The actual results may vary, and may cause significant adjustments to the Group’s assets within the next financial year.

In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

Further details of the carrying values and key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 7 to the financial statements.

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2.6 Significant accounting estimates and judgements cont’d

2.6.1 Estimation uncertainty cont’d

Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, unabsorbed business losses, unutilised capital allowances and unused tax credits to the extent that it is probable that taxable profit will be available against which all the deductible temporary differences, unabsorbed business losses, unutilised capital allowances and unused tax credits can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The unrecognised deferred tax assets of the Group are disclosed in Note 24 to the financial statements.

Impairment of loans and receivables

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience of assets with similar credit risk characteristics.

The carrying amounts of the Group’s and of the Company’s loans and receivables at the reporting date are summarised in Note 5, 9 and 10 to the financial statements.

Amortisation of development costs

The development costs are amortised over the estimated life span of the developed assets which is estimated to be within 10 years. Changes in the technological developments could impact the economic useful life and the residual values of these assets, therefore future amortisation charges could be revised.

A 10% difference in the projected revenue of the development costs from the management’ estimates would result in approximately 14% (2013: 9%) variance in the Group’s profit for the financial year.

Inventories

Inventories are measured at the lower of cost and net realisable value. In estimating net realisable values, management takes into account the most reliable evidence available at the times the estimates are made. The Group’s core business is subject to economical and technology changes which may cause selling price to change rapidly, and the Group’s results to change.

The carrying amount of the Group’s inventories at the end of the reporting year is disclosed in Note 8 to the financial statements.

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2.6 Significant accounting estimates and judgements cont’d

2.6.1 Estimation uncertainty cont’d

Inventories cont’d

An 1% difference in the management’s estimation of net realisable values of the inventories would result in approximately 14% (2013: 3%) variance in the Group’s profit for the financial year.

Employee share options

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also require determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them.

The assumptions and model used for estimating fair value for share-based payment transactions, sensitivity analysis and the carrying amounts are disclosed in Note 25 to the financial statements.

3. SIGNIFICANT ACCOUNTING POLICIES

The Group and the Company apply the significant accounting policies, as summarised below, consistently throughout all periods presented in the financial statements.

3.1 Consolidation

3.1.1 Subsidiary companies

Subsidiaries are entities, including structured entities, controlled by the Company. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. Besides, the Group considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Investment in subsidiary companies is stated at cost less any impairment losses in the Company’s statement of financial position, unless the investment is held for sale or distribution.

Upon the disposal of investment in a subsidiary company, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.

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3. SIGNIFICANT ACCOUNTING POLICIES cont’d

3.1 Consolidation cont’d

3.1.2 Basis of consolidation

The Group’s financial statements consolidate the audited financial statements of the Company and all of its subsidiary companies, which have been prepared in accordance with the Group’s accounting policies. Amounts reported in the financial statements of the subsidiary companies have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. The financial statements of the Company and its subsidiary companies are all drawn up to the same reporting date.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

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

Under the merger method of accounting, the results of the subsidiary companies are presented as if the merger had been effected throughout the current and previous years. The assets and liabilities combined are accounted for based on the carrying amounts from the perspective of the common control shareholder at the date of transfer. On consolidation, the cost of the merger is cancelled with the values of the shares received. Any resulting credit differences is classified as equity and regarded as a non-distributable reserve. Any resulting debit difference is adjusted against any suitable reserve. Any share premium, capital redemption reserve and any other reserves which are attributable to share capital of the merged entities, to the extent that they have not been capitalised by a debit difference, are reclassified and presented as movement in other capital reserves.

3.1.3 Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.

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

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3.1.3 Business combinations and goodwill cont’d

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for 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 profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

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

3.1.4 Loss of control

Upon the loss of control of a subsidiary company, the Group derecognises the assets and liabilities of the subsidiary company, any non-controlling interests and the other components of equity related to the subsidiary company. Any surplus or deficit arising on the loss of control is recognised in profit or loss.

If the Group retains any interest in the previous subsidiary company, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

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3.1.5 Non-controlling interests

Non-controlling interests at the end of the reporting date, being the equity in a subsidiary company not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the financial year between non-controlling interests and the owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary company are allocated to the non-controlling interests even if that results in a deficit balance.

3.2 Foreign currency translation

The Group’s consolidated financial statements are presented in RM, which is also the Company’s functional currency.

3.2.1 Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rates prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date.

All differences are taken to the profit or loss with the exception of all monetary items that forms part of a net investment in a foreign operation. These are recognised in other comprehensive income until the disposal of the net investment, at which time they are reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.

3.2.2 Foreign operations

The assets and liabilities of operations denominated in functional currencies other than RM are translated to RM at exchange rates at the reporting date. The income and expenses of foreign operations are translated to RM at exchange rates at the date of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign currency translation reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the foreign currency translation reserve related to that foreign operation is reclassified to profit or loss as part of the profit or loss on disposal.

When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

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3.2 Foreign currency translation cont’d

3.2.2 Foreign operations cont’d

In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in foreign currency translation reserve in equity.

3.3 Property, plant and equipment

All property, plant and equipment except for freehold land and building are measured at cost less accumulated depreciation and impairment losses, if any. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, 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.

Cost includes expenditures that are directly attributable to the acquisition of the assets and any other costs directly attributable to bringing the asset to working condition for its intended use, cost of replacing component parts of the assets, and the present value of the expected cost for the decommissioning of the assets after their use. All other repair and maintenance costs are recognised in profit or loss as incurred.

Freehold land and building are initially measured at cost and subsequently measured at fair value less accumulated depreciation on building and impairment losses, if any, after the date of the revaluation. Valuations are performed with sufficient regularity, usually every five years, to ensure that the carrying amounts does not differ materially from the freehold land and building at the reporting date.

The Group changed its accounting policy for measuring its freehold land and building from cost model to revaluation model in the current financial year and the change of the accounting policy did not has any impact to the financial statements of prior financial year.

As at the date of revaluation, accumulated depreciation, if any, is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Any revaluation surplus arising upon appraisal of land and building is recognised in other comprehensive income and credited to the ‘revaluation reserve’ in equity. To the extent that any revaluation decrease or impairment loss has previously been recognised in profit or loss, a revaluation increase is credited to profit or loss with the remaining part of the increase recognised in other comprehensive income. Downward revaluations of land and building are recognised upon appraisal or impairment testing, with the decrease being charged to other comprehensive income to the extent of any revaluation surplus in equity relating to this asset and any remaining decrease recognised in profit or loss. Any revaluation surplus remaining in equity on disposal of the asset is transferred to other comprehensive income.

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3.3 Property, plant and equipment cont’d

Depreciation is recognised on the straight line method in order to write off the cost of each asset over its estimated useful life. Freehold land with an infinite life is not depreciated. Other property, plant and equipment are depreciated based on the estimated useful lives of the assets as follows:-

Freehold buildingComputer and office equipmentFurniture, fittings and office renovationMotor vehiclesSignboardsData processing equipment and applications

2%10% - 20%10% - 20%

20%10%

10% - 20%

Property, plant and equipment are written down to recoverable amount if, in the opinion of the Directors, it is less than their carrying value. Recoverable amount is the net selling price of the property, plant and equipment i.e. the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

The residual values, useful lives and depreciation method are reviewed at least annually to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

Property, plant and equipment are derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss.

3.4 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfillment of the arrangement is dependent on the use of a specific asset or asset or the arrangement conveys a right to use the asset, even if that right is not explicitly specific in an arrangement.

3.4.1 Finance lease

Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance lease. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.

Minimum lease payments made under finance leases are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the profit or loss. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

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

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3.4 Leases cont’d

3.4.2 Operating lease

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting year in which they incurred.

3.5 Research and development costs

Expenditure on research activities is recognised as an expense in the year in which it incurred.

Development cost are expensed in the year in which they incurred except when the cost incurred on development project are recognised as development assets to the extent that such expenditure is expected to generate future economic benefits.

Development cost initially recognised as an expense is not recognised as an asset in subsequent periods.

Capitalised development cost, considered to have finite useful life, is amortised over the estimated life span of the developed assets which is estimated to be within 10 years based on the following formula:-

Cumulative revenue to date x Cumulative actualdevelopment expenditure

- Accumulated amortisationat beginning of yearProjected total revenue of the

developed assets

The amortisation commences from the time when the product is available for sale and assessed for impairment whenever there is an indication that the development cost may be impaired. Should the product or project be aborted, the relative expenditure will be charged to the profit or loss in the year in which such decision is made.

The amortisation period and the amortisation method for the development cost with a finite useful life are reviewed at least at each financial year end.

The amortisation expense on development cost with finite useful life is recognised in profit or loss in the cost of sales category.

3.6 Other intangible assets

Other intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, other intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses, if any. Other intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives of 2.5 years and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year-end.

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3.7 Multimedia Super Corridor (“MSC”) research grant

The MSC research grant for the development of software and system design are treated as reimbursement to development costs incurred and deducted from the product development costs incurred.

3.8 Financial instruments

Financial assets and financial liabilities are recognised when the Group or the Company becomes a party to the contractual provisions of the financial instrument.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value. Financial assets and financial liabilities are measured subsequently as described below.

3.8.1 Financial assets - categorisation and subsequent measurement

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

(a) financial assets at fair value through profit or loss; (b) held-to-maturity investments; (c) loans and receivables; and (d) available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss in other comprehensive income.

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each end of the reporting period. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets.

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.

At the reporting date, the Group and the Company carry only loans and receivables on their statements of financial position.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. Gains or losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. The Group’s and the Company’s cash and cash equivalents, amount due from subsidiary companies, trade and most of the other receivables fall into this category of financial instruments.

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3.8 Financial instruments cont’d

3.8.1 Financial assets - categorisation and subsequent measurement cont’d

Loans and receivables cont’d

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the end of the reporting date which are classified as non-currents.

3.8.2 Financial liabilities - categorisation and subsequent measurement

After the initial recognition, financial liabilities are classified as:

(a) financial liabilities at fair value through profit or loss; (b) other financial liabilities measured at amortised cost; and (c) financial guarantee contracts.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

At the reporting date, the Group and the Company carry only other financial liabilities measured at amortised cost on their statements of financial position.

Other financial liabilities measured at amortised cost

The Group’s and the Company’s other financial liabilities include amount due to Directors, amount due to a subsidiary company, borrowings, hire purchase creditor, trade and other payables.

Other liabilities are subsequently measured at amortised cost using the effective interest method. 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 date.

3.8.3 Offseting of financial instruments

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

3.9 Inventories

Inventories consist of trading goods are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes all expenses incurred in bringing the inventories to their present location and condition which consist of cost of purchase and transportation cost.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale.

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3.10 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, bank balances, short term demand deposits, fixed deposits, bank overdraft and highly liquid investments which are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

For the purpose of the financial position, cash and cash equivalents restricted to be used to settle a liability of 12 months or more after the reporting date are classified as non-current assets.

3.11 Impairment of assets

3.11.1 Non-financial assets

The Group and the Company assess at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group and the Company estimate the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

The Group and the Company base its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group and the Company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses are recognised in the profit or loss in those expense categories consistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group and the Company estimate the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for asset in prior years. Such reversal is recognised in the profit or loss.

Goodwill is tested for impairment annually at each reporting date or more frequently, and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than their carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

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3.11 Impairment of assets cont’d

3.11.2 Financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the 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 date 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.

Financial assets carried at amortised cost

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

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets’ carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred).

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the profit or loss. Allowances are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to the profit or loss.

3.12 Equity

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

The revaluation reserve within equity comprises surplus arising from the revaluation of property, plant and equipment net of tax.

Share capital represents the nominal value of shares that have been issued.

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3.12 Equity cont’d

Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

The warrant reserve is valued based on the closing price of the first trading day of the warrant. The issuance of the ordinary shares upon exercise of the warrants is treated as new subscription of ordinary shares for the consideration equivalent to the exercise price of the warrants.

Accumulated losses includes all current and prior years accumulated losses.

Dividends on ordinary shares are recognised in equity in the year in which they are declared.

All transactions with owners of the Company are recorded separately within equity.

3.13 Provisions

Provisions are recognised when there is a present legal or constructive obligation that can be estimated reliably, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Any reimbursement that the Group or the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provisions are reversed. Where the effect of the time of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provisions due to the passage of time is recognised as a finance cost.

3.14 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the assets during the period of time that is necessary to complete and prepare the asset for its intended use or sale.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

All other borrowing costs are expensed in the year in which they incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

69



cont’d


3.15 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

3.15.1 Sales of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

3.15.2 Interest income

Interest income is recognised as it accrues using the effective interest method in profit or loss.

3.16 Employee benefits

3.16.1 Short-term employee benefits

Wages, salaries, bonuses and social security contributions are recognised as expenses in the financial year in which the associated services are rendered by the 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 occurred.

A provision is made for the estimated liability for unutilised leave as a result of services rendered by employees up to the end of the reporting year.

3.16.2 Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group and the Company pay fixed contributions into independent entities of funds and will have no legal or constructive obligation to pay further contribution if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years.

Such contributions are recognised as expenses in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).

3.16.3 Employees share option schemes

The Employees Share Options Scheme (“ESOS”) allows the Group’s and the Company’s employees to acquire shares of the Company. When the options are exercised, equity is increased by the amount of the proceeds received.

70

Annual Report 2014



3.16 Employee benefits cont’d

3.16.3 Employees share option schemes cont’d

The fair value of the employee services received in exchange for the grant of the share option is recognised as an expense in the profit or loss over the vesting periods of the grant with a corresponding increase in equity. The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on vesting date.

The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to share premium, or until the option expires, upon which it will be transferred directly to accumulated losses.

3.17 Tax expense

Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that they relates to a business combination or items recognised directly in equity or other comprehensive income.

3.17.1 Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the reporting date, and any adjustment to tax payable in respect of previous years.

Current tax is recognised in the statement of financial position as a liability (or an asset) to the extent that it is unpaid (or refundable).

3.17.2 Deferred tax

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the temporary differences arising from the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

71



cont’d


3.17 Tax expense cont’d

3.17.2 Deferred tax cont’d

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3.18 Segmental results

3.18.1 Operating segment

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

3.18.2 Intersegment transfer

Segment revenues, expenses and result include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties outside of the economic entity in negotiated term. These transfers are eliminated on consolidation.

3.19 Contingencies

Where it is not probable that an inflow or an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the asset or the obligation is not recognised in the statements of financial position and is disclosed as a contingent asset or contingent liability, unless the probability of inflow or outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent assets or contingent liabilities unless the probability of inflow or outflow of economic benefits is remote.

3.20 Related party

A related party is a person or entity that is related to the Group. A related party transaction is a transfer of resources, services or obligations between the Group and its related party, regardless of whether a price is charged.

(a) A person or a close member of that person’s family is related to the Group if that person:

(i) has control or joint control over the Group; or (ii) has significant influence over the Group; or (iii) is a member of the key management personnel of the Group.

72

Annual Report 2014



3.20 Related party cont’d

(b) An entity is related to the Group if any of the following conditions applies:

(i) the entity and the Group are members of the same group; or (ii) one entity is an associate or joint venture of the other entity; or (iii) both entities are joint ventures of the same third party; or (iv) one entity is a joint venture of a third entity and the other entity is an associate of the third

entity; or (v) the entity is a post-employment benefit plan for the benefits of employees of either the

Group or an entity related to the Group; or (vi) the entity is controlled or jointly-controlled by a person identified in (a) above; or (vii) a person identified in (a)(i) above has significant influence over the entity or is a member of

the key management personnel of the Group or the entity.

4. PROPERTY, PLANT AND EqUIPMENT

At Valuation At Cost

Group

Freehold land and building

Computer and office

equipment

Furniture, fittings,

signboard and office

renovationMotor

vehicles

Data processingequipment

and applications

Software under

development TotalRM RM RM RM RM RM RM

Cost or valuationBalance as at

1 April 2012 - 1,362,550 1,434,557 511,184 1,965,901 - 5,274,192Additions 10,467,353 1,032,612 4,426,494 94,801 174,557 - 16,195,817Disposals - (67,660) (180,306) - - - (247,966)Written off - (25,118) (398,350) - - - (423,468)

Balance as at 31 March 2013 10,467,353 2,302,384 5,282,395 605,985 2,140,458 - 20,798,575

Additions - 906,148 1,088,272 178,800 323,693 6,000,000 8,496,913Disposals - (4,640) - - - - (4,640)Written off - (124,036) (97,457) - - - (221,493)Revaluation 7,532,647 - - - - - 7,532,647

Balance as at 31 March 2014 18,000,000 3,079,856 6,273,210 784,785 2,464,151 6,000,000 36,602,002

73



cont’d

4. PROPERTY, PLANT AND EqUIPMENT cont’d

At Valuation At Cost

Group

Freehold land and building

Computer and office

equipment

Furniture, fittings,

signboard and office

renovationMotor

vehicles

Data processingequipment

and applications

Software under

development TotalRM RM RM RM RM RM RM

Accumulated depreciation

Balance as at 1 April 2012 - 257,167 395,248 202,507 1,450,385 - 2,305,307

Charge for thefinancial year 140,264 464,782 369,033 86,301 194,794 - 1,255,174

Disposals - (12,602) (13,871) - - - (26,473)Written off - (13,246) (365,153) - - - (378,399)

Balance as at 31 March 2013 140,264 696,101 385,257 288,808 1,645,179 - 3,155,609

Charge for thefinancial year 89,524 615,802 750,580 109,300 270,089 - 1,835,295

Disposals - (458) - - - - (458)Written off - (57,167) (20,203) - - - (77,370)Revaluation (207,520) - - - - - (207,520)

Balance as at 31 March 2014 22,268 1,254,278 1,115,634 398,108 1,915,268 - 4,705,556

Net carrying amount2014 17,977,732 1,825,578 5,157,576 386,677 548,883 6,000,000 31,896,446

2013 10,327,089 1,606,283 4,897,138 317,177 495,279 - 17,642,966

Motor vehicles with net carrying amount of RM79,346 (2013: RM144,720) are financed under hire purchase arrangements.

Freehold land and building with net carrying amount of RM17,977,732 (2013: RM10,327,089) are pledged to a licensed bank for banking facility granted to a subsidiary company.

74

Annual Report 2014



Analysis of freehold land and building:-

Freeholdland Building TotalRM RM RM

Group

ValuationBalance as at 1 April 2012 - - -Additions 6,432,000 4,035,353 10,467,353

Balance as at 31 March 2013 6,432,000 4,035,353 10,467,353Revaluation 5,088,000 2,444,647 7,532,647

Balance as at 31 March 2014 11,520,000 6,480,000 18,000,000

Accumulated depreciationBalance as at 1 April 2012 - - -Charge for the financial year - 140,264 140,264

Balance as at 31 March 2013 - 140,264 140,264Charge for the financial year - 89,524 89,524Revaluation - (207,520) (207,520)

Balance as at 31 March 2014 - 22,268 22,268

Net carrying amount2014 11,520,000 6,457,732 17,977,732

2013 6,432,000 3,895,089 10,327,089

Revaluation of freehold land and building

The Group’s freehold land and building are stated at their revalued amounts, being the fair value at the date of revaluation, less any subsequent depreciation and subsequent accumulated impairment losses.

Fair value measurement of the freehold land and building were categorised as follows:

2014Level 2

RM

Recurring fair value measurementsFreehold land 11,520,000Building 6,480,000

There were no transfers between Level 1 and Level 2 during the financial year.

75



cont’d


Revaluation of freehold land and building cont’d

Level 2 fair values of freehold land and building have been generally derived using Comparison Method of Valuation. Comparison Method of Valuation entails comparing the sales price of the properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties.

An external, independent and qualified valuer was appointed to determine the fair value of the freehold land and building on 15 November 2013. The revaluation surplus net of applicable deferred tax was credited to other comprehensive income and is shown in “Reserve” under the equity.

If freehold land and building were measured using the historical cost model, the carrying amount would be as follows:

Group2014 2013

RM RM

Freehold landCost 6,432,000 6,432,000Less: Accumulated depreciation - -

6,432,000 6,432,000

BuildingCost 4,035,353 4,035,353Less: Accumulated depreciation (220,971) (140,264)

3,814,382 3,895,089

Total net carrying amount 10,246,382 10,327,089

CompanyOffice

equipmentRM

CostAdditions / Balance as at 31 March 2013 340Additions 3,289

Balance as at 31 March 2014 3,629

Accumulated depreciationCharge for the financial year / Balance as at 31 March 2013 38Charge for the financial year 546

Balance as at 31 March 2014 584

Net carrying amount2014 3,045

2013 302

76

Annual Report 2014


5. SUBSIDIARY COMPANIES

(i) Investment in subsidiary companies

Company2014 2013

RM RM

Unquoted shares, at costAt beginning of financial year 25,337,246 25,337,246Additions 999,998 -Arising from Employee Share Option Scheme (“ESOS”) 4,000,000 -

At end of financial year 30,337,244 25,337,246

Less: Allowance for impairment At beginning/end of financial year (3,461,418) (3,461,418)

26,875,826 21,875,828

Details of the subsidiary companies are as follows:-

Name of company Effective interest Principal activitiesCountry of

incorporation2014 2013

% %

Ingenuity Microsystems Sdn. Bhd.

100 100 Consultant, adviser, manager, researcher, trainer and total solution provider in all aspect of information technology, including the business of marketing and distribution of multimedia products and accessories

Malaysia

Reliance Computer CentreSdn. Bhd.

100 100 Marketing of computer hardware and software for business solutions

Malaysia

Uptown Excel Sdn. Bhd. 100 100 Dormant Malaysia

Hallmark Avenue Sdn. Bhd. 100 100 Distributor of information technology products

Malaysia

Ingenuity Care Sdn. Bhd. 100 100 Provision of warranty management services

Malaysia

Vistavision Resources Sdn. Bhd.

100 100 Investment holding Malaysia

Line Clear Express & Logistics Sdn. Bhd. (formerly known as DPEG Services Sdn. Bhd.)

100 100 Dormant Malaysia

77



cont’d

5. SUBSIDIARY COMPANIES cont’d

(i) Investment in subsidiary companies cont’d

Details of the subsidiary companies are as follows:- cont’d



% %

Subsidiary company of Ingenuity Microsystems Sdn. Bhd.

Austral Diversified Sdn. Bhd.


Subsidiary companies of Vistavision Resources Sdn. Bhd.

Ingens Sdn. Bhd. 100 100 Distributor of information technology products and investment holding

Malaysia

InconnecxionCommunication Sdn. Bhd.

100 100 Distributor of telecommunication products, services, accessories and devices and other multimedia hardware and software

Malaysia

Fox Consortium Distribution Sdn. Bhd. (formerly known as Unified Synergy Sdn. Bhd.)


Ingens Commerce Sdn. Bhd.

100 100 Trading, reselling, retailing, marketing and promoting of all types of information technology and telecommunication and multimedia products, software, accessories and services

Malaysia

Subsidiary company of Ingens Sdn. Bhd.

Ingens DSS Sdn. Bhd. 100 100 Distributor of computer hardware and accessories

Malaysia

Ingens Direct Sdn. Bhd. 100 100 Manufacturing, assembling, refurbishment and installation of modem and other information communication technology (ICT) devices including logistics and distribution of ICT products and services

Malaysia

78

Annual Report 2014


5. SUBSIDIARY COMPANIES cont’d

(i) Investment in subsidiary companies cont’d

Details of the subsidiary companies are as follows:- cont’d



% %

Subsidiary company of Ingens Sdn. Bhd. cont’d

Ingens (Indonesia) Pte. Ltd. 51 - Dormant British Virgin Island

DSS Ikhlas Sdn. Bhd. 60 60 Import, export, retail, trading, marketing and promoting all types of consumable products including telecommunication, IT and multimedia accessories

Malaysia

(ii) Amount due from subsidiary companies

Amounts due from/to subsidiary companies are non-trade in nature, unsecured, bear no interest and repayable on demand.

6. INTANGIBLE ASSETS

Group2014 2013

RM RM

Development costs (i) 2,535,974 5,349,662Other intangible asset – Hotel application software (ii) - -

Net carrying amount 2,535,974 5,349,662

79



cont’d

6. INTANGIBLE ASSETS cont’d

Group2014 2013

RM RM

(i) Development costs

Balance as at 1 April 17,370,496 17,370,496Disposals (3,314,909) -Written off (7,431,009) -

6,624,578 17,370,496Less: Multimedia Super Corridor grants received (1,686,985) (1,686,985)

Balance as at 31 March 4,937,593 15,683,511

Less: Accumulated amortisationBalance as at 1 April 7,291,892 6,492,719Charged for the financial year 1,019,366 799,173Disposals (1,520,587) -Written off (4,585,867) -

Balance as at 31 March 2,204,804 7,291,892

Less: Accumulated impairment lossBalance as at 1 April 3,041,957 3,041,957Written off (2,845,142) -

Balance as at 31 March 196,815 3,041,957

Net carrying amount 2,535,974 5,349,662

The development costs represent softwares developed by the Group.

(ii) Hotel application software

Software cost 420,000 420,000Less: Accumulated amortisation (420,000) (420,000)

Net carrying amount - -

80

Annual Report 2014


7. GOODWILL ON CONSOLIDATION

Group2014 2013

RM RM

At beginning/end of financial year 9,781,233 9,781,233 For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent

the lowest level within the Group at which the goodwill is monitored for internal management purpose.

The recoverable amount for the above is based on its value in use and is determined by discounting the future cash flows generated from the continuing use of those units based on the following key assumptions:-

(i) cash flows were projected based on actual operating results and a 5 (2013: 5) years business plan; (ii) revenue was projected at anticipated annual revenue growth of approximately 5% (2013: 5%) per annum; (iii) expenses were projected at annual increase of approximately 5% (2013: 5%) per annum; and (iv) a pre-tax discount rate of 6.6% (2013: 6.6%) was applied in determining the recoverable amount of the

unit.

With regards to the assessments of value-in-use, management believes that no reasonably possible changes in any of the key assumptions would cause the carrying values of these units to differ materially from their recoverable amounts except for the changes in prevailing operating environment which is not ascertainable.

8. INVENTORIES

Group2014 2013

RM RM

Trading goods 25,113,003 15,240,155

Recognised in profit or loss

Group2014 2013

RM RM

Inventories recognised as cost of sales 591,238,717 527,033,894Inventories written down 3,195 84,504Inventories written off 1,836,775 -

81



cont’d

9. TRADE RECEIVABLES

Group2014 2013

RM RM

Trade receivables 64,227,963 67,124,108Less: Allowance for impairment

At beginning of financial year (77,059) (102,588) Impairment loss recognised (24,829) (77,059) Written off 62,109 102,588

At end of financial year (39,779) (77,059)

64,188,184 67,047,049

Included in trade receivables is an amount of RM16,043,649 (2013: RM17,532,629) due from companies in which a Director of the Company has interest.

The normal trade credit terms granted by the Group to the trade receivables range from 7 to 120 days (2013: 7 to 120 days) and are non-interest bearing except for an amount of RM9,442,084 (2013: Nil) bears interest at 8.60% (2013: Nil) per annum.

10. OTHER RECEIVABLES

Group2014 2013

RM RM

Non-trade receivables 11,025,417 3,668,977Less: Allowance for impairment

At beginning of financial year - - Impairment loss recognised (86,880) -

At end of financial year (86,880) -

10,938,537 3,668,977Insurance claim receivables (Note 32(v)) 1,734,234 -Advance payment to suppliers 390,715 -Deposits 1,474,388 515,656Prepayments 259,417 322,784Interest receivable 1,163,988 -

15,961,279 4,507,417

82

Annual Report 2014


10. OTHER RECEIVABLES cont’d

Company2014 2013

RM RM

Non-trade receivables 21,420 -Deposits 679 578Prepayments 4,700 4,700

26,799 5,278

Included in the deposits of the Group is an amount of RM979,858 (2013: RM Nil) which is deposits paid for purchasing of leasehold properties as disclosed in Note 32(i) & (iii) to the financial statements.

Included in non-trade receivables of the Group is an amount of RM236,129 (2013: RM236,129) due from companies in which a former Director of the Group and the Company has interest.

11. FIXED DEPOSITS WITH A LICENSED BANK

Group

The Group’s fixed deposits amounting to RM68,628 (2013: RM66,500) have been pledged to a licensed bank as a security for bank guarantee extended to a third party for business purposes and earned interest at 2.25% to 3.20% (2013: 2.25% to 3.20%) per annum.

12. SHARE CAPITAL

Group and Company

Number of shares Amounts

RM RM

Authorised:-Ordinary shares of RM0.10 each

Balance as at 1 April 2012 1,000,000,000 100,000,000Created during the financial year 1,000,000,000 100,000,000

Balance as at 31 March 2013/31 March 2014 2,000,000,000 200,000,000

Issued and fully paid:-Ordinary shares of RM0.10 each

Balance as at 1 April 2012 543,297,236 54,329,724Conversion of warrants 36,551,600 3,655,160

Balance as at 31 March 2013 579,848,836 57,984,884Private placement 173,950,000 17,395,000Exercise of ESOS 100,000,000 10,000,000

Balance as at 31 March 2014 853,798,836 85,379,884

83



cont’d

12. SHARE CAPITAL cont’d

Group and Company cont’d

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company’s residual assets.

13. RESERVES

Group Company2014 2013 2014 2013

RM RM RM RM

Non-distributable:-Share premiumBalance as at 1 April 12,153,251 12,153,251 12,153,251 12,153,251Arising from private placement at premium 439,500 - 439,500 -Share issuance expenses (53,503) - (53,503) -Transfer from ESOS reserve for share option

exercised 4,000,000 - 4,000,000 -

Balance as at 31 March 16,539,248 12,153,251 16,539,248 12,153,251

Revaluation reserveBalance as at 1 April - - - -Revaluation surplus from revaluation on

freehold land and building 7,353,158 - - -

Balance as at 31 March 7,353,158 - - -

Warrant reserveBalance as at 1 April 6,562,831 8,207,653 6,562,831 8,207,653Conversion of warrants - (1,644,822) - (1,644,822)

Balance as at 31 March 6,562,831 6,562,831 6,562,831 6,562,831

ESOS reserveBalance as at 1 April - - - -ESOS granted 4,000,000 - 4,000,000 -Transfer to share premium for share options

exercised (4,000,000) (4,000,000)

Balance as at 31 March - - - -

Merger deficitBalance as at 1 April/31 March (7,900,000) (7,900,000) - -

84

Annual Report 2014


13. RESERVES cont’d

Group Company2014 2013 2014 2013

RM RM RM RM

Non-distributable:- cont’dExchange translation reserveBalance as at 1 April - - - -Foreign currency translation differences arising

from a foreign subsidiary company 2,150 - - -

Balance as at 31 March 2,150 - - -

Total non-distributable reserves 22,557,387 10,816,082 23,102,079 18,716,082Accumulated losses (9,667,389) (11,378,716) (16,127,177) (15,715,858)

Total reserves 12,889,998 (562,634) 6,974,902 3,000,224

Share premium

Share premium represents the excess of the consideration received over the nominal value of shares issued by the Company. It is not to be distributed by way of cash dividends and its utilisation shall be in a manner as set out in Section 60 (3) of the Companies Act, 1965.

Revaluation reserve

The revaluation reserve represents the surplus on the revaluation of the freehold land and building of the Group net of applicable deferred tax.

Warrant reserve

On 19 July 2011, the Company allotted and issued 243,189,716 ordinary shares pursuant to rights issue (“rights shares”) together with 182,392,287 warrants at an issue price of RM0.10 each on the basis of 4 right shares together with 3 free detachable warrants for every 2 existing ordinary shares held in the Company on 6 June 2011 (“Warrants 2011/2016”). Each Warrants 2011/2016 entitles the registered holder to subscribe for 1 new ordinary share in the Company at any time on or after 19 July 2011 to 18 July 2016, at an exercise price of RM0.10 in accordance with a Deed Poll. Any warrant not exercised by the date of maturity will lapse thereafter and cease to be valid for all purposes.

The ordinary shares issued from the exercise of Warrants 2011/2016 shall rank pari passu in all respects with the existing issue ordinary shares of the Company except that they shall not be entitled to any dividends, rights, allotments and/or other distributions declared, the entitlement date of which is prior to the date of allotment of the new shares arising from the exercise of Warrants 2011/2016.

The Warrants 2011/2016 are constituted by a Deed Poll dated 9 June 2011.

The warrant reserve arose from the allocation of the proceeds received from the rights issue with free detachable warrants. This reserve is determined by reference to the fair value of the warrants amounting to RM8,207,653 immediately upon the listing and quotation of the rights issue which was completed on 22 July 2011.

As at the reporting date, 36,551,600 (2013: 36,551,600) warrants have been exercised and Nil (2013: 36,551,600) warrants were exercised during the financial year.

85



cont’d

13. RESERVES cont’d

ESOS reserve

ESOS reserve represents the equity-settled share options granted to employees. The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of the share options.

Merger deficit

Merger deficit represents the excess arising from the nominal value of the shares issued over the nominal value of shares acquired.

Exchange translation reserve

The translation reserve comprises foreign currency differences arising from the translation of the financial statements of foreign subsidiary company.

14. BORROWINGS

Group2014 2013

RM RM

Current:Secured Term loan (1) - 446,210Term loan (2) 271,117 -Term loan (3) 50,382 -Invoice financing - 2,000,000Bankers’ acceptance 6,160,000 -Short term loan 1,334,000 -

7,815,499 2,446,210

Non-current:Secured Term loan (1) - 5,306,683Term loan (2) 5,207,073 -Term loan (3) 251,862 -

5,458,935 5,306,683

13,274,434 7,752,893

Repayment terms:- not later than 1 year 7,815,499 2,446,210- between 1 to 2 years 334,483 481,329- between 2 to 5 years 1,102,355 1,683,364- later than 5 years 4,022,097 3,141,990

13,274,434 7,752,893

86

Annual Report 2014


14. BORROWINGS cont’d

Term loan (1) and invoice financing

The above facilities are secured by the following:-

a) A Facilities Agreement to secure repayment of the principal sum of RM8,030,000; and

b) First party legal charge over the freehold land and building of the Group.

The repayment terms for the term loan are over 120 monthly installments of RM71,893 each upon full drawdown or 16 January 2013 whichever is earlier. The term loan has been refinanced as term loan (2) during the financial year.

Term loan (2), bankers’ acceptance and short-term loan

The above facilities are secured by the following:-

(i) First party open charge over the freehold land and building of the Group;

(ii) Corporate guarantee by the Company; and

(iii) Personal guarantee by a Director of the Company.

The repayment terms for the term loan are over 180 monthly installments of RM43,126 upon full drawdown.

Term loan (3)

The above facility is secured by the following:-

(i) Facilities agreement to be stamped as principal instruments;

(ii) Asset sale agreement as subsidiary instruments;

(iii) All monies legal charge or all monies Deed of Assignment and Power Attorney over a leasehold property as disclosed in Note 32(i).

(iv) Personal guarantee by a Director of the Company; and

(v) Corporate guarantee by the Company.

The repayment terms for the term loan are over 180 monthly installments of RM7,751 upon drawdown.

The term loans and short term borrowings are bearing interest ranging from 4.4% to 4.86% (2013: 7.60% to 10.10%) per annum respectively.

87



cont’d

15. HIRE PURCHASE CREDITORS

Group2014 2013

RM RM

Minimum lease payments- within 1 year 34,199 42,312- after 1 year but not later than 5 years 41,108 78,416

75,307 120,728Less : Interest-in-suspense (5,306) (12,536)

Present value of minimum lease payments 70,001 108,192

Present value of minimum lease payments- within 1 year 30,745 35,490- after 1 year but not later than 5 years 39,256 72,702

70,001 108,192

Hire purchase creditors bear interest ranging from 4.00% to 4.40% (2013: 4.00% to 4.40%) per annum.

16. DEFERRED TAX LIABILITIES

Group2014 2013

RM RM

At beginning of financial year 267,000 233,000Transferred from profit or loss 110,000 34,000Arising from revaluation of property, plant and equipment 387,009 -

At end of financial year 764,009 267,000

The deferred tax liabilities as at the end of the reporting date is made up of tax effects on temporary differences arising from:

Group2014 2013

RM RM

The tax effect of the excess of property, plant and equipment’s carrying amount over its base 377,000 267,000

Arising from revaluation of property, plant and equipment 387,009 -

764,009 267,000

88

Annual Report 2014


17. TRADE PAYABLES

Group

Included in trade payables is an amount of RM268,742 (2013: RM3,093,379) due to companies in which a Director of the Company has interest.

The normal trade credit terms granted by the trade payables ranging from 30 to 90 days (2013: 30 to 90 days) and are non-interest bearing except for an amount of RM23,167,136 (2013: Nil) bears interest rate ranging from 5.19% to 8.60% (2013: Nil) per annum.

18. OTHER PAYABLES

Group2014 2013

RM RM

Non-trade payables 2,688,319 1,500,254Accrual of expenses 1,224,758 1,204,772Advances received from customers 582,948 1,238,133Interest payable 899,440 -

5,395,465 3,943,159

Amount due to related parties which is included in other payables are as follows:

2014 2013RM RM

Companies in which a Director of the Company has interest 1,233,824 -A person connected to a Director of Company 286,000 -

1,519,824 -

Company2014 2013

RM RM

Non-trade payables 67,137 81,425Accrual of expenses 29,991 25,750

97,128 107,175

19. AMOUNT DUE TO DIRECTORS

Group and Company

Amount due to Directors is non-trade in nature, unsecured, bears no interest and repayable on demand.

89



cont’d

20. REVENUE AND COST OF SALES

Group

Revenue of the Group consists of gross invoiced value of sales of information system development and system implementations, computer hardware and software and other related products, net of discounts, returns and rebate.

Included in cost of sales of the Group is the amortisation of development cost during the financial year which amounted to RM1,019,366 (2013: RM799,173).

21. PROFIT/(LOSS) BEFORE TAX

Profit/(Loss) before tax has been determined after charging/(crediting) amongst others, the following items:-

Group Company2014 2013 2014 2013

RM RM RM RM

Auditors’ remuneration- statutory audit fee 130,000 123,500 26,000 23,000- others 25,000 32,000 - -

Allowance for impairment loss on receivables 111,709 77,059 - -Allowance for impairment loss on receivables

no longer required (62,109) (102,588) - -Amortisation of intangible assets 1,019,366 799,173 - -Bad debts written off 92,737 114,690 - -Depreciation 1,835,295 1,255,174 546 38Directors’ remuneration- fee 33,500 38,000 33,500 38,000- other emoluments 641,070 662,866 36,000 41,000- ESOS expenses 200,000 - - -ESOS expenses 3,800,000 - - -Gain on disposal of intangible assets (8,205,678) - - -Gain on disposal of property, plant and equipment (427) (1,096) - -Gain on disposal of a subsidiary company - (438) - -Realised foreign exchange (gain)/loss 230,684 (125,706) - 832Rental of premises 1,412,521 1,326,356 - 116,374Rental of equipment - 2,259 - -Interest expenses- term loan 423,193 298,037 - -- short term loan 16,758 39,582 - -- hire purchase 7,230 9,488 - -- bankers’ acceptance 121,034 - - -- trade payable 416,828 - - -- late payment interest charged by trade payable 899,440 - - -

90

Annual Report 2014


21. PROFIT/(LOSS) BEFORE TAX cont’d

Profit/(Loss) before tax has been determined after charging/(crediting) amongst others, the following items:- cont’d

Group Company2014 2013 2014 2013

RM RM RM RM

Interest income- fixed deposits (34,628) (49,207) (17,657)- trade receivable (1,164,536) - - -Insurance claims (1,734,234) - - -Inventories written down 3,195 84,504 - -Inventories written off 1,836,775 - - -Property, plant and equipment written off 144,123 45,069 - -

The details of remuneration received/receivable by the Directors of the Group and of the Company during the financial year were as follows:-

Group Company2014 2013 2014 2013

RM RM RM RM

Executive:-Existing Directors

Fee 30,000 38,000 30,000 38,000Salaries and other emoluments 413,310 596,370 36,000 41,000Defined contribution plan 43,200 66,496 - -ESOS expenses 200,000 - - -

686,510 700,866 66,000 79,000

Ex Director Fee 3,500 - 3,500 -Salaries and other emoluments 164,824 - - -Defined contribution plan 19,736 - - -

188,060 - 3,500 -

874,570 700,866 69,500 79,000

91



cont’d

22. TAX EXPENSE

Group Company2014 2013 2014 2013

RM RM RM RM

Current year- current tax 1,327,209 1,101,255 - -- deferred tax 58,000 34,000 - -(Over)/Underprovision in previous financial year- current tax (47,985) 27,864 - -- deferred tax 52,000 - - -

1,389,224 1,163,119 - -

Malaysian income tax rate is calculated at the statutory tax rate of 25% (2013: 25%) of the estimated assessable profits for the financial year.

The Group’s unabsorbed capital allowances and unutilised tax losses which can be carried forward to offset against future taxable profit amounted to approximately RM7,205,000 (2013: RM515,000) and RM4,513,000 (2013: RM9,307,000) respectively.

However, the above amounts are subject to the approval of the Inland Revenue Board of Malaysia.

A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory income tax rate to income tax expense at the effective tax rate of the Group and of the Company are as follows:-

Group Company2014 2013 2014 2013

RM RM RM RM

Profit/(Loss) before tax 3,073,148 6,878,978 (411,319) (1,102,032)

Taxation at Malaysian statutory tax rate 768,287 1,719,745 (102,830) (275,508)

Tax effects in respect of:-Expenses not deductible for tax purposes 1,713,313 468,510 102,830 275,508Utilisation of capital allowances and tax losses

not recognised in prior years (1,515,641) (1,263,000) - -(Over)/Under provision in prior financial year- current tax (47,985) 27,864 - -- deferred tax 52,000 - - -Deferred tax assets not recognised during the year 419,250 210,000 - -

Effective tax expense 1,389,224 1,163,119 - -

92

Annual Report 2014


23. EARNINGS PER SHARE

23.1 Basic earnings per share

Basic earnings per share is calculated by dividing net profit for the year attributable to ordinary equity holders of the Company over the weighted average number of ordinary shares in issue during the financial year as follows:-

Group2014 2013

RM RM

Net profit for the year attributable to ordinary equity holders of the Company 1,711,327 5,900,088

Weighted average number of ordinary shares in issue 778,854,589 563,437,775

Basic earnings per share (sen) 0.22 1.05

23.2 Diluted earnings per share

For the purpose of calculating diluted earnings per share, the profit for the year attributable to equity holders of the Company and the weighted average number of shares in issue during the financial year has been adjusted for the dilutive effects of all potential ordinary shares, i.e. warrants.

Group2014 2013

RM RM

Net profit for the year attributable to ordinary equity holders of the Company 1,711,327 5,900,088

Weighted average number of ordinary shares in issue * 563,437,775Effect of potential warrants on issue * 35,203,071

* 598,640,846

Diluted earnings per share (sen) * 0.99

* Dilutedearningspershare isnotapplicableforthefinancialyearastheunexercisedconvertiblewarrantswereanti-dilution innature.This isdueto theaveragemarketsharepriceof theCompanybeingbelowtheexercisepriceofwarrants.

93



cont’d

24. DEFERRED TAX ASSETS

The tax effects of temporary differences that would give rise to future benefits are generally recognised only when there is a reasonable expectation of realisation. At the end of financial year, the temporary differences for which no deferred tax assets have been recognised in the financial statements are as follows:-

Group2014 2013

RM RM

Carrying amount of property, plant and equipment in excess of their tax base 7,718,000 1,434,000Unabsorbed capital allowances (7,205,000) (515,000)Unutilised tax losses (4,513,000) (9,307,000)Others (5,000) (2,500)

(4,005,000) (8,390,500)

The potential deferred tax assets are not recognised in the financial statements as the Directors opined that such amounts will not be able to be utilised in the near future.

25. EMPLOYEE BENEFITS EXPENSE

Group Company2014 2013 2014 2013

RM RM RM RM

Salaries and allowances 7,815,724 6,750,486 61,050 257,275Defined contribution plans 1,016,388 844,358 10,118 31,312Social security contributions 77,633 70,061 540 5,218Other staff related expenses 1,173,480 900,531 1,264 92,574ESOS expenses 3,800,000 - - -

13,883,225 8,565,436 72,972 386,379

Employee Share Option Scheme (“ESOS”)

The main features of the ESOS are as follows:-

(a) Only the Directors and employees of the Group who meets the following criteria will be eligible to participate in the ESOS:-

(i) must be at least eighteen (18) years of age on the Date of Offer; (ii) must be employed full-time by and on the payroll of a company within the Group on the Date of

Offer in respect of an employee; (iii) must served the Group on a continuous full-time basis for a period of not less than one (1) year on

the Date of Offer, or such period as may be determined by the Committee in respect of an employee; (iv) in the event an employee commences employment with a company prior to such company becoming

a subsidiary of the Group, such employee’s period of employment in the Group for the purposes of determining the minimum continuous period as stipulated above, shall be deemed to commence from the date the employee commenced employment with the said company.

94

Annual Report 2014


25. EMPLOYEE BENEFITS EXPENSE cont’d

Employee Share Option Scheme (“ESOS”) cont’d

The main features of the ESOS are as follows:- cont’d

(b) The eligibility of a Director or employee of the Group to participate in the ESOS shall be at the discretion of the ESOS Committee which appointed by the Board of Directors, who shall take into consideration, inter-alia, factors such as the position, ranking, performance, seniority and the rank of service of the Eligible persons or such other matter which the ESOS Committee may in its sole and absolute discretion deem fit;

(c) The total number of shares to be issued pursuant to the exercise of ESOS shall not exceed 30% of the total issued and paid up share capital of the Group at any point of time during the duration of the ESOS and out of which not more than 50% of the ESOS shares shall be allocated, in aggregate to the Directors and senior management of the Group. In addition, not more than 10% of the share available under the ESOS shall be allocated to any eligible person who either singly or collectively, through persons connected to him/her, holds 20% or more in the issued and paid-up capital (excluding treasury shares) of the Company;

(d) The option price shall not be at a discount of more than 10% from the 5-days weighted average market price of the shares of the Company preceding the date of offer and shall in no event be less than the par value of the share of the Company of RM0.10;

(e) The new shares allotted upon the exercise of share option shall rank pari passu in all respect with the existing ordinary shares of the Company except that the new shares so issued will not rank for any rights, dividends, allotments and/or other distributions, the entitlement date of which is prior to the date of allotment of the new ordinary shares.

As at 31 March 2014, the options offered to take up unissued ordinary shares of the Company of RM0.10 each and the option prices are as follows:-

Number of option over ordinary shares of RM0.10 eachOffer date Expiry date Exercise price At 1.4.2013 Granted Exercised At 31.3.2014

24.6.2013 19.5.2018 RM0.10 - 50,000,000 (50,000,000) -21.10.2013 19.5.2018 RM0.10 - 50,000,000 (50,000,000) -

Options under the ESOS granted to the Directors of the Group and of the Company are as disclosed in Note 21 to the financial statements.

Group

Number of share option

Weighted average exercise

priceRM RM

At 1 April 2013 - -Granted during the financial year 100,000,000 0.10Exercised during the financial year (100,000,000) 0.10

At 31 March 2014 -

95



cont’d

25. EMPLOYEE BENEFITS EXPENSE cont’d

Employee Share Option Scheme (“ESOS”) cont’d

The fair value of scheme options granted during the financial year was estimated using a Black-scholes model, taking into account the terms and conditions upon which the options were granted. The fair value of share options measured at grant date and the assumption are as follows:-

Granted on 24.6.2013 21.10.2013

Fair value of share option (RM) 0.04 0.04Weighted average share price (RM) 0.08 0.08Exercise price (RM) 0.10 0.10Expected volatility (%) 46.083 64.950Risk free rate (%) 3.675 3.612Expected average dividend yield (%) - -Expected life (year) 5 5

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumptions that the historical volatility over a period similar to the life of the options is indicative future trends, which may not necessarily be the actual outcome.

The ESOS expenses is not recognised in the profit or loss of the Company as it has been recharged to the subsidiary companies benefiting from the services of the employees.

26. RELATED PARTY DISCLOSURES

(a) The transactions of the Group and of the Company with related parties which were entered into on a negotiated basis were as follows:-

Group Company2014 2013 2014 2013

RM RM RM RM

Management fee charged by subsidiary company - - - 20,520

Rental expenses paid to a companies in which a Director of the Company has interest 1,285,998 1,084,928 - -

Sales to companies in which a Director of the Company has interest 177,519,379 191,219,849 - -

Purchases from companies in which a Director of the Company has interest 157,734,792 72,461,615 - -

96

Annual Report 2014


26. RELATED PARTY DISCLOSURES cont’d

(a) The transactions of the Group and of the Company with related parties which were entered into on a negotiated basis were as follows:- cont’d

Group Company2014 2013 2014 2013

RM RM RM RM

Purchase of reward points from a company in which a Director of the Company has interest 79,555 - - -

Purchases of property, plant and equipment from companies in which a Director of the Company has interest - 40,275 - -

Services charged by a company in which a Director of the Company has interest 100,000 83,941 - -

(b) The remuneration of key management personnel is the same with Directors’ remuneration as disclosed in Note 21 to the financial statements.

(c) The outstanding balances arising from related party transactions as at reporting date were disclosed in Note 5, 9, 10, 17, 18 and 19 to the financial statements.

27. CONTINGENT LIABILITIES

27.1 Corporate Guarantee

Company

As at 31 March 2014, the Company is contingently liable to the extent of RM125,116,128 (2013: RM65,030,000) in respect of corporate guarantees given to certain suppliers of a subsidiary company and certain financial institutions of a subsidiary company.

The corporate guarantees do not have a determinable effect on the terms of the credit facilities due to the financial institutions requiring parent guarantee as a pre-condition for approving the credit facilities granted to the subsidiary company. The actual terms of the credit facilities are likely to be the best indicator of “at market” terms and hence the fair value of the credit facilities are equal to the credit facilities amount received by the subsidiary. As such, there is no fair value on the corporate guarantees to be recognised in the financial statements as also mentioned in Note 30.1.1 to the financial statements.

27.2 Material Litigation

Group and Company

On 6 March 2014, a third party had filed a Writ and Statement of Claim against the Company and Ingens Sdn. Bhd. (“ISB”), a wholly-owned subsidiary company of Vistavision Resources Sdn. Bhd. which in turn is a wholly-owned subsidiary company of the Company for RM3,775,112 for alleged goods sold to ISB but not paid.

97



cont’d

27. CONTINGENT LIABILITIES cont’d

27.2 Material Litigation cont’d

Group and Company cont’d

On the same day, ISB had sought for substantiate documents for the different sum which the third party failed to produce and yet when ISB issued payment for the actual outstanding amount of RM2,495,410 according to ISB’s records, the third party refused acceptance of such payment and chose instead to institute a legal action.

The Company has filed a statement of defence against the claims and the quantum of damages that the Group will be seeking against the third party is expected to be RM10,440,470.

The legal suit is currently pending trial and the ultimate outcome of the case cannot presently be determined. The next case management is fixed on 8 August 2014.

28. CAPITAL COMMITMENT

Group2014 2013

RM RM

Authorised and contracted for- property, plant and equipment 1,756,709 -

29. SEGMENTAL REPORTING – GROUP

Management identifies the Group’s information and communication technologies (“ICT”) distribution and enterprise systems as operating segments. These operating segments are monitored and strategic decisions are made on the basis of adjusted segment operating results. The following summary describes the operations in each of the Group’s reportable segments:-

ICT distribution - Distribution of volume ICT products to resellers and retailersEnterprise systems - Enterprise and Hotel Management SolutionsOthers - Investment holding and dormant

Transfer pricing between operating segments are on a negotiated basis.

98

Annual Report 2014


29. SEGMENTAL REPORTING – GROUP cont’d

Business segments

NoteICT

distributionEnterprise

systems Others Elimination ConsolidatedRM RM RM RM RM

2014Revenue:External customers 608,467,526 4,731,748 9,451 - 613,208,725

Results:Interest income 1,197,036 2,128 - - 1,199,164Interest expenses (1,884,483) - - - (1,884,483)Depreciation and

amortisation (1,226,141) (1,467,275) (161,245) - (2,854,661)Tax expense (1,389,224) - - - (1,389,224)Other non-cash expenses i (4,855,894) 6,935,569 - - 2,079,675Segment profit/ (loss) (828,830) 3,357,559 (844,805) - 1,683,924

Assets:Additions to non-current

assets ii 8,010,681 365,143 121,089 - 8,496,913

2013Revenue:External customers 541,253,911 12,331,136 - - 553,585,047

Results:Interest income 31,550 - 17,657 - 49,207Interest expenses (347,107) - - - (347,107)Depreciation and

amortisation (865,131) (1,188,793) (423) - (2,054,347)Tax expense (1,163,119) - - - (1,163,119)Other non-cash expenses i (118,133) (99,067) - - (217,200)Segment profit/(loss) 2,294,295 4,574,885 (1,153,321) - 5,715,859

Assets:Additions to non-current

assets ii 15,947,914 247,563 340 - 16,195,817

99



cont’d

29. SEGMENTAL REPORTING – GROUP cont’d

Business segments cont’d

Notes to the nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements:-

i. Other material non-cash expenses consist of the following items:-

2014 2013RM RM

Allowance for impairment loss on receivables (111,709) (77,059)Allowance for impairment loss on receivables no longer required 62,109 102,588Bad debts written off (92,737) (114,690)ESOS expenses (4,000,000) -Gain on disposal of intangible assets 8,205,678 -Gain on disposal of property, plant and equipment 427 1,096Gain on disposal of a subsidiary company - 438Inventories written down (3,195) (84,504)Inventories written off (1,836,775) -Property, plant and equipment written off (144,123) (45,069)

2,079,675 (217,200)

ii. Additions to non-current assets consist of:-

2014 2013RM RM

Property, plant and equipment 8,496,913 16,195,817

Geographical segment

No geographical segment has been prepared as the Group operates principally in Malaysia.

Major customers

The following are the major customers with revenue equal or more than 10% of the Group’s revenue:-

2014 2013RM RM

2 (2013: 2) customers 170,663,015 245,639,215

100

Annual Report 2014


30. FINANCIAL INSTRUMENTS

30.1 Financial risk management

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The Group’s and the Company’s financial risk management policies seek to ensure that adequate financial resources are available for the development of the Group’s and the Company’s businesses whilst managing its risks. The Group and the Company operate within policies that are approved by the Board and the Group’s policies are not to engage in speculative transactions.

The main areas of financial risks faced by the Group and the Company and the policies in respect of the major areas of treasury activity are set out as follows:-

30.1.1 Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises primarily from receivables. It is the Group’s policy to enter into financial instrument with a diversity of creditworthy counterparties. The Group does not expect to incur material credit losses of its financial assets or other financial instruments.

Concentration of credit risk exists when changes in economic, industry and geographical factors similarly affect the group of counterparties whose aggregate credit exposure is significant in relation to the Group’s total credit exposure. The Group’s portfolio of financial instrument is broadly diversified along industry, products and geographical lines, and transactions are entered into with diverse creditworthy counterparties, thereby mitigate any significant concentration of credit risk.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. Following are the areas where the Group and the Company are exposed to credit risk:-

i. Receivables

As at the end of the reporting date, the maximum exposure to credit risk arising from receivables is limited to the carrying amounts in the statements of financial position.

With a credit policy in place to ensure the credit risk is monitored on an ongoing basis, management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. The Group uses aging analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than credit terms granted are deemed to have higher credit risk, and are monitored individually.

In respect of trade receivables, the Group is exposed to significant credit risk exposure to a single counterparty in which 77% (2013: 74%) of trade receivables consists of 7 (2013: 4) customers. Based on historical information about customer default rates, management considers the credit quality of trade receivables that are not past due or impaired to be good.

101



cont’d

30. FINANCIAL INSTRUMENTS cont’d

30.1 Financial risk management cont’d

The main areas of financial risks faced by the Group and the Company and the policies in respect of the major areas of treasury activity are set out as follows:- cont’d

30.1.1 Credit risk cont’d

i. Receivables cont’d

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables are as follows:-

Group GrossIndividually

impaired NetRM RM RM

2014Not past due 31,755,655 - 31,755,655Past due 0 to 30 days 19,637,453 - 19,637,453Past due 31 to 60 days 2,618,897 - 2,618,897Past due more than 61 days 10,215,958 (39,779) 10,176,179

64,227,963 (39,779) 64,188,184

2013Not past due 41,230,354 - 41,230,354Past due 0 to 30 days 4,979,077 - 4,979,077Past due 31 to 60 days 6,627,682 - 6,627,682Past due more than 61 days 14,286,995 (77,059) 14,209,936

67,124,108 (77,059) 67,047,049

The Group has trade receivables amounting to RM32,432,529 (2013: RM25,816,695) that are past due at the reporting date but not impaired. These relate to a number of independent customers for whom there is no recent history of defaults.

The Group’s policy is to make full impairment for all trade receivables that are in dispute, under legal action or where recoveries are considered to be doubtful.

The net carrying amount of trade receivables is considered a reasonable approximate of fair value. The maximum exposure to credit risk is the carrying value of each class of receivables mentioned above. Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

102

Annual Report 2014




The main areas of financial risks faced by the Group and the Company and the policies in respect of the major areas of treasury activity are set out as follows:- cont’d

30.1.1 Credit risk cont’d

ii. Intercompany balances

The maximum exposure to credit risk is represented by their carrying amounts in the statements of financial position.

The Company provides unsecured advances to subsidiary companies and monitors the results of the subsidiary companies regularly.

As at the end of the reporting date, there was no indication that the advances to the subsidiary companies are not recoverable.

iii. Cash and cash equivalents

The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

iv. Financial guarantees

The maximum exposure to credit risk is amounted to RM125,116,128 (2013: RM65,030,000) in respect of corporate guarantees given to certain suppliers of a subsidiary company and certain financial institutions of a subsidiary company as at the end of the reporting year.

The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to a subsidiary company. The Company monitors on an on-going basis the results of the subsidiary company and repayments made by the subsidiary company. As at the end of the reporting year, there was no indication that the subsidiary company would default on repayment.

30.1.2 Liquidity risk

Liquidity risk is the risk that the Group and the Company will not be able to meet their financial obligations as and when they fall due, due to shortage of funds.

In managing their exposures to liquidity risk arises principally from their various payables, loans and borrowings, the Group and the Company maintain a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities as and when they fall due.

In managing their exposures to liquidity risk arises principally from their various payables, loans and borrowings, the Group and the Company maintain a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities as and when they fall due.

103



cont’d



30.1.2 Liquidity risk cont’d

The Group and the Company aim at maintaining a balance of sufficient cash and deposits and flexibility in funding by keeping diverse sources of committed and uncommitted credit facilities from various banks.

The summary of the maturity profile of non-derivative financial liabilities of the Group based on the contractual undiscounted repayment obligations is as follow:

Group

Maturity Carrying amount

Contractual cash flows

Less than 1 year

Between 1 to 2 years

Between 2 to 5 years

More than 5 years

RM RM RM RM RM RM

2014Secured:Borrowings 13,274,434 15,531,450 8,104,523 610,523 1,831,568 4,984,836Hire purchase

creditors 70,001 75,307 34,199 29,405 11,703 -

13,344,435 15,606,757 8,138,722 639,928 1,843,271 4,984,836

Unsecured:Trade payables 46,447,661 46,447,661 46,447,661 - - -Other payables 5,395,465 5,395,465 5,395,465 - - -Amount due

to Directors 262,500 262,500 262,500 - - -

52,105,626 52,105,626 52,105,626 - - -

Total 65,450,061 67,712,383 60,244,348 639,928 1,843,271 4,984,836

2013Secured:Borrowings 7,752,893 9,976,814 2,862,716 862,716 2,588,148 3,663,234Hire purchase

creditors 108,192 120,728 42,312 37,308 41,108 -

7,861,085 10,097,542 2,905,028 900,024 2,629,256 3,663,234

Unsecured:Trade payables 56,209,994 56,209,994 56,209,994 - - -Other payables 3,943,159 3,943,159 3,943,159 - - -Amount due

to Directors 21,336 21,336 21,336 - - -

60,174,489 60,174,489 60,174,489 - - -

Total 68,035,574 70,272,031 63,079,517 900,024 2,629,256 3,663,234

104

Annual Report 2014




30.1.2 Liquidity risk cont’d

The maturity profile of non-derivative financial liabilities of the Company based on the contractual undiscounted repayment obligations is less than one year.

30.1.3 Interest rate risk

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

The Group’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates.

The Group’s interest rate management objective is to manage the interest expenses consistent with maintaining an acceptable level of exposure to interest rate fluctuation. In order to achieve this objective, the Group targets a mix of fixed and floating debts based on assessment of its existing exposure and desired interest rate profile.

The interest rate profile of the Group’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting year were as follows:-

Group2014 2013

RM RM

Fixed rate instrumentsTrade receivables 9,442,084 -Fixed deposits 1,068,628 1,066,500Hire purchase creditors (70,001) (108,192)Bankers’ acceptance (6,160,000) -Trade payables (23,167,136) -

(18,886,425) 958,308

Floating rate instrumentTerm loans (5,780,434) (5,752,893)Short term loan (1,334,000) -Invoice financing - (2,000,000)

(7,114,434) (7,752,893)

105



cont’d



30.1.3 Interest rate risk cont’d

Fairvaluessensitivityanalysisforfixedrateinstruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates as at reporting date would not affect profit or loss.

Cashflowsensitivityanalysisforvariablerateinstruments

The following table illustrates the sensitivity of profit to a reasonably possible change in interest rates of +/- 0.5%. These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each year, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

Group Profit for the year

RM RM+0.5% -0.5%

Floating rate instrument

2014 (35,572) 35,572

2013 (38,764) 38,764

30.1.4 Foreign currency risk

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

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the functional currency of the Group. The currency giving rise to this is primarily United States Dollar (“USD”).

The Group’s exposures to foreign currency risk, based on carrying amounts as at the end of the reporting date were as follows:

Group2014 2013

RM RM

DenominatedinUSDCash and bank balances 29,773 4,231Trade payables (19,117,545) (2,103,097)

(19,087,772) (2,098,866)

106

Annual Report 2014




30.1.4 Foreign currency risk cont’d

Exposures to foreign exchange rates vary during the financial year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group’s exposure to foreign currency risk.

Foreigncurrencysensitivityanalysis:

The following table demonstrates the sensitivity of the Group’s profit for the financial year to a reasonably possible changes in USD against the functional currency of the Group, with all other variables held constant:-

Group Profit for the year

2014 2013RM RM

USD/RM- Strengthened 1% (2013: 2%) (190,878) (41,977)- Weakened 1% (2013: 2%) 190,878 41,977

30.2 Fair value of financial instruments

The carrying amounts of financial assets and financial liabilities of the Group and the Company at the reporting date approximate their fair values due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date or immaterial discounting impact.

It is not practicable to estimate the fair value of the Company’s investment in unquoted shares due to the lack of comparable quoted prices in active market. In addition, it is impracticable to use valuation technique to estimate the fair value reliably as a result of significant variability in the inputs of the valuation technique. The Company does not intend to dispose of these investments in the near future.

30.3 Fair value hierarchy

No fair value hierarchy is disclosed as the Group and the Company do not have financial instruments measured at fair value.

31. CAPITAL MANAGEMENT

The Group’s objective when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and determine to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

107



cont’d

31. CAPITAL MANAGEMENT cont’d

The Group sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts.

There were no changes in the Group’s approach to capital management during the financial year.

32. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR AND AFTER THE REPORTING DATE

(i) On 20 November 2013, ISB entered into a sale and purchase agreement with a third party to purchase a leasehold property for a cash consideration of RM1,200,000. The transaction was completed on 14 May 2014.

(ii) On 25 November 2013, the Company via ISB incorporated a 51% owned subsidiary company, Ingens (Indonesia) Pte. Ltd. in British Virgin Island for a total cash consideration of USD25,500 (approximately RM82,250).

(iii) On 26 December 2013, ISB entered into a sale and purchase agreement with a third party to purchase a leasehold property for a cash consideration of RM1,446,360. The transaction was completed on 12 June 2014.

(iv) On 27 February 2014, the Company had increased its investment in its wholly-owned subsidiary company. Line Clear Express & Logistics Sdn. Bhd. (formerly known as DPEG Services Sdn. Bhd.) (“LCELSB”) from 2 ordinary shares of RM1 each (representing 100% equity) to 1,000,000 ordinary shares of RM1 each (representing 100% equity) by way of cash allotment of 999,998 ordinary shares of RM1 each at par.

(v) On 19 March 2014, there was fire destruction at the warehouse of ISB. Part of the inventories of the Group amounting to RM1,836,775 suffered damage from the fire incident. Insurance claim receivables amounting to RM1,734,234 have been recognised in respect of this matter and have subsequently received the claims on 24 July 2014.

(vi) On 2 April 2014, the Company via ISB incorporated a wholly-owned subsidiary company, Ingens International Pte. Ltd. in British Virgin Island for a total cash consideration of USD50,000 (approximately RM161,275).

(vii) On 7 July 2014, the Company had increased its investment in its wholly-owned subsidiary company, Uptown Excel Sdn Bhd (“UESB”) from 2 ordinary shares of RM1 each (representing 100% equity) to 51 ordinary shares of RM1 each (representing 51% equity) by way of cash allotment of 49 ordinary shares of RM1 each at par.

(viii) On 23 July 2014, the Company proposes to undertake a Private Placement of new ordinary shares of RM0.10 each, representing not more than ten percent (10%) of the enlarged issued and paid-up share capital of the Company. The actual number of shares to be issued pursuant to the Proposed Private Placement will depend on the total issued and paid-up share capital of the Company on a date to be determined later upon obtaining all relevant approvals.

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Annual Report 2014


33. DISCLOSURE OF REALISED AND UNREALISED LOSSES

With the purpose of improving transparency, Bursa Malaysia Securities Berhad had on 25 March 2010, and subsequently on 20 December 2010, issued directives which require all listed corporations to disclose the breakdown of unappropriated profits or accumulated losses into realised and unrealised on group and company basis in the annual audited financial statements.

The breakdown of accumulated losses as at the reporting date which has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and the Guidance on Special Matter No. 1 - Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants are as follows :

Group Company2014 2013 2014 2013

RM RM RM RM

Accumulated losses of the Group and of the Company

- Realised loss (11,519,964) (13,701,854) (16,127,177) (15,715,858)- Unrealised loss (764,009) (267,000) - -

(12,283,973) (13,968,854) (16,127,177) (15,715,858)Consolidation adjustments 2,616,584 2,590,138 - -

(9,667,389) (11,378,716) (16,127,177) (15,715,858)

The disclosure of realised and unrealised above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia Securities Berhad and should not be applied for any other purposes.

109


List of Property

Location Tenure Existing use

Date ofAcquisition / * revaluation

ApproximateLand Area

ApproximateAge of

Building(Years)

Net Book Value as at 31.3.2014

(RM)

No.6, Jalan Pemaju U1/15, Hicom Glenmarie Industrial Park, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan

Freehold 3-storey Office cum warehouse

*4.11.2013 51,419 sq ft 9 17,977,732

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Annual Report 2014

Analysis of ShareholdingsAs at 8th July 2014

Authorised Share Capital : RM200,000,000 divided into 2,000,000,000 ordinary shares of RM0.10 each. Paid-up Share Capital : RM85,379,883.60 divided into 853,798,836 ordinary shares of RM0.10 each.Class of Shares : Ordinary Shares of RM0.10 each fully paidVoting Right : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGSas per record of depositors as at 8th July 2014

Size of ShareholdingsNo. of

Shareholders Holdings Total Holdings

%

Less than 100 shares 10 506 0.00100 to 1,000 shares 147 94,007 0.011,001 to 10,000 shares 792 5,431,799 0.6410,001 to 100,000 shares 2,313 124,870,400 14.63100,001 to less than 5% of issued shares 1,128 635,430,200 74.425% and above of issued shares 1 87,971,924 10.30

Total 4,391 853,798,836 100.00

SUBSTANTIAL SHAREHOLDERS as at 8th July 2014

Direct Interest Indirect Interest

ShareholdersNo. of Shares %

No. of Shares %

Firstwide Success Sdn. Bhd. 87,971,924 10.30 - -Chin Boon Long - - 87,971,924(1) 10.30Chan Swee Ying - - 87,971,924(2) 10.30

Note:-

(1) DeemedinterestedbyvirtueofhisequityinterestinFirstwideSuccessSdn.Bhd.pursuanttosection6AoftheCompaniesAct,1965.

(2) Deemed interestedbyvirtueofherequity interest inFirstwideSuccessSdn.Bhd.pursuant to section6Aof theCompanies

Act,1965.

111


Analysis of ShareholdingsAs at 8th July 2014

cont’d

DIRECTORS’ SHAREHOLDINGSas at 8th July 2014


DirectorNo. of Shares %

No. of Shares %

Chin Boon Long - - 87,971,924(1) 10.30

Note:-

(1) Deemed interestedbyvirtueofhisequity interest inFirstwideSuccessSdn.Bhd.pursuant to section6Aof theCompaniesAct,1965.

THIRTY (30) LARGEST SHAREHOLDERS as per record of depositors as at 8th July 2014

No. Shareholders No. of Shares %

1 JF APEX NOMINEES (TEMPATAN) SDN BHDPLEDGEDSECURITIESACCOUNTFORFIRSTWIDESUCCESSSDNBHD(MARGIN)

87,971,924 10.30

2 MALAYSIAN TRUSTEES BERHADLANDASANSIMFONISDNBHD

25,500,000 2.99

3 MALAYSIAN TRUSTEES BERHADTITANIUMHALLMARKSDNBHD

24,500,000 2.87

4 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHDPLEDGEDSECURITIESACCOUNTFORCHOWYINGCHOON

16,578,400 1.94

5 BU YAW SENG 16,251,700 1.906 BU YAW SENG 14,000,000 1.647 TA NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORONGCHIEWKEE 10,180,000 1.19

8 NG HONG KIAW 8,300,000 0.979 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORSMBRESOURCESSDNBHD 7,600,000 0.89

10 WONG NGIE TIEN 7,510,000 0.8811 TAY PUAT KENG @ TEE PUAT KENG 6,200,000 0.7312 SIM KIAN SENG 6,000,000 0.7013 TAN HOCK HUAT 6,000,000 0.7014 MAYBANK NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORDONGSUMING 5,800,000 0.68

15 VOO SUK CHING 5,200,000 0.61

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Annual Report 2014

THIRTY (30) LARGEST SHAREHOLDERS cont’d as per record of depositors as at 8th July 2014


16 SO TIAM HOK 4,750,000 0.5617 LEE CHAI ENG 4,700,000 0.5518 TEO TIEN HUAN 4,500,000 0.5319 SOO KAU MOI 4,100,000 0.4820 CIMSEC NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORBONGSOOMAY(PENANG-CL) 4,028,000 0.47

21 HSBC NOMINEES (ASING) SDN BHDEXEMPTANFORCREDITSUISSE(SGBR-TST-ASING)

4,000,000 0.47

22 PUBLIC NOMINEES (TEMPATAN) SDN BHDPLEDGEDSECURITIESACCOUNTFORLEEYUENHON(SRB/PMS)

4,000,000 0.47

23 TAY HOCK TIAM 4,000,000 0.4724 WONG KAR CHUAN 3,250,000 0.3825 CHEW SING CHOU 3,205,100 0.3826 TEOH HIN HENG 3,199,000 0.3727 MAYBANK SECURITIES NOMINEES (ASING) SDN BHD

MAYBANKKIMENGSECURITIESPTELTDFORAABCAPITALPTELTD 3,000,000 0.35

28 GAN BOON WE 2,900,000 0.3429 KENANGA NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORHELENPOON(023) 2,895,100 0.34

30 LEE AH YEW 2,851,000 0.33

Analysis of ShareholdingsAs at 8th July 2014cont’d

113


Analysis of Warrant HoldingsAs at 8th July 2014

Total Warrants : 145,840,687 warrants (2011/2016)No. of Warrant Holders : 1,043 WarrantholdersExercise Price of Warrants : RM0.10Expiry Date of Warrants : 18 July 2016

DISTRIBUTION OF WARRANT HOLDINGSas at 8th July 2014

Size of Warrant HoldingsNo. of

Warrantholders Holdings Total Holdings

%

Less than 100 warrant 4 237 Negligible100 to 1,000 warrant 26 8,150 0.011,001 to 10,000 warrant 129 1,039,700 0.7110,001 to 100,000 warrant 614 33,309,400 22.84100,001 to less than 5% of issued warrant 270 111,483,200 76.445% and above of issued warrant 0 0 0.00

Total 1,043 145,840,687 100.00

SUBSTANTIAL WARRANTHOLDERS as at 8th July 2014

(Not applicable)

DIRECTORS’ WARRANTHOLDINGS as at 8th July 2014


DirectorNo. of

Warrants %No. of

Warrants %

Chin Boon Long - - 62 Negligible

Note:-

(1) DeemedinterestedbyvirtueofhisequityinterestinFirstwideSuccessSdn.Bhd.pursuanttosection6AoftheCompaniesAct,1965.

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Annual Report 2014

THIRTY (30) LARGEST WARRANTHOLDERSas at 8th July 2014


1 ABDUL HANIFF BIN SULAIMAN 5,932,100 4.072 KENANGA NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORGANBOONGUAT(028) 3,498,800 2.40

3 TAN KIAN PING 3,000,000 2.064 TAN SAY LING 2,790,000 1.915 ANG WOUN-ENG 2,160,000 1.486 TAI TUNG HENG 1,900,000 1.307 OOI YING HONG 1,700,000 1.178 PUBLIC NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORHIIPUOANN(E-BTL) 1,650,000 1.13

9 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHDPLEDGEDSECURITIESACCOUNTFORFOONGCHENGKEAT(CEB)

1,625,000 1.11

10 SIM MUI KHEE 1,500,000 1.0311 TAN SUN DE 1,500,000 1.0312 YEAP EE HOON 1,500,000 1.0313 TAN LAY LAY 1,500,000 1.0314 CIMSEC NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORTANWAKONG(TAMINGJAYA-CL)1,400,000 0.96

15 TAM TUNG 1,293,400 0.8916 KENANGA NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORTINGHUAKIONG(ET) 1,280,400 0.88

17 LING LU KUANG 1,230,000 0.8418 TAN JEE KEAN 1,200,000 0.8219 CHONG ME HONG 1,135,000 0.7820 GOH TOH SOON 1,100,000 0.7521 CHENG SWEE WAH 1,100,000 0.7522 CHOO WENG SUN 1,000,000 0.6923 MICHAEL YAP CHEE SHEN 914,000 0.6324 NG WENG WAH 900,000 0.6225 OO SIEW CHIN 800,000 0.5526 TAN KIM ENG 800,000 0.5527 KUAN WAI MAN 800,000 0.5528 LOCK MAY WAN 750,000 0.5129 KENANGA NOMINEES (TEMPATAN) SDN BHD

PLEDGEDSECURITIESACCOUNTFORHELENPOON(023) 749,900 0.51

30 CHEN SHAN CHIK 730,000 0.50

Analysis of Warrant HoldingsAs at 8th July 2014cont’d

115


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of the Company will be held at the Greens I, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Thursday, 28th day of August 2014 at 10.00 a.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31st March 2014 together with the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ fees for the financial year ended 31st March 2014.

(Ordinary Resolution 1)

3. To re-elect the following Directors retiring in accordance with the Company’s Articles of Association:

i) Lim Boon Hong [Article 76(2)] (Ordinary Resolution 2) ii) Dato’ Johari Bin Yahya [Article 76(3)] (Ordinary Resolution 3)

4. To re-appoint Messrs SJ Grant Thornton as Auditors of the Company and to authorise the Board of Directors to fix their remuneration.


AS SPECIAL BUSINESS

5. AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT, subject always to the Companies Act, 1965 (“the Act”), the Articles of Association of the Company and the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Act, to issue shares in the Company from time to time at such price and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued capital of the Company at the time of issue and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.

AND THAT the Directors be and are also hereby empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued.”


116

Annual Report 2014

Notice of Annual General Meetingcont’d

6. PROPOSED SHAREHOLDERS’ MANDATE FOR EXISTING AND ADDITIONAL RECURRENT RELATED PARTY TRANSACTIONS (“PROPOSED SHAREHOLDERS’ MANDATE”)


“THAT approval be hereby given to the Company’s subsidiaries (“Group”) to enter into the recurrent related party transactions of a revenue or trading nature with those related parties as set out in Section 2.4 of the Circular to Shareholders dated 6th August 2014 (“Circular”) which are necessary for the Group’s day-to-day operations provided such transactions are in the ordinary course of business and are on terms not more favourable to the related parties than those generally available to the public and not detrimental to minority shareholders and such approval shall continue to be in force until:-

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following this AGM, at which time it will lapse, unless by a resolution passed at such AGM, such authority is renewed;

(ii) the expiration of the period within which the next AGM after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extension as may be allowed pursuant to section 143(2) of the Act); or

(iii) revoked or varied by the resolution passed by the shareholders in a general meeting; whichever is the earlier.

AND THAT the Directors of the Company be and are hereby authorised to complete and to 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 the Proposed Shareholders’ Mandate.”

By Order of the Board

LIM SECK WAH (MAICSA 0799845)Company Secretary

Dated this 6th day of August 2014.Kuala Lumpur

117


Notice of Annual General Meetingcont’d

Notes:

1. For thepurposeofdeterminingamemberwhoshallbeentitledtoattend,speakandvoteat theAnnualGeneralMeeting,theCompanyshallberequestingtheRecordofDepositorsasat22August2014.OnlyadepositorwhosenameappearsontheRecordofDepositorsasat22August2014shallbeentitledtoattendthesaidmeetingorappointproxiestoattend,speakandvoteonhis/herstead.

2. Amemberentitledtoattendandvoteatthemeetingisentitledtoappointuptotwo(2)proxiestoattendandvoteinhis/herstead.AproxyneedsnotbeamemberoftheCompany.

3. Whereamemberappoints two (2)proxies toattendat the samemeeting, theappointment shallbe invalidunlesshe/shespecifiestheproportionsofhis/herholdingstoberepresentedbyeachproxy.

4. Whereamember isanauthorisednomineeasdefinedundertheSecurities Industry(CentralDepositories)Act1991, itmayappointatleastone(1)proxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.

5. WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.

6. If the appointer is a corporation, the Form of Proxymust be executed under its Common Seal or under the hand of itsattorneydulyauthorized.

7. The FormofProxymustbedepositedat theCompany’sRegisteredOfficeat Level 15-2,BangunanFaber Imperial Court,JalanSultan Ismail, 50250Kuala Lumpurnot less than48hoursbefore thetimeappointed forholding themeetingoranyadjournmentthereof.

8. ExplanatorynotesonSpecialBusiness

8.1 OrdinaryResolution5-AuthorityunderSection132DoftheCompaniesAct,1965fortheDirectorstoissueshares

The Company wishes to renew the mandate on the authority to issue shares pursuant to Section 132D of theCompaniesAct1965attheEleventhAnnualGeneralMeetingoftheCompany.AgeneralmandatehadbeengrantedbytheshareholdersoftheCompanyattheTenthAnnualGeneralMeetingoftheCompanyheldon28thAugust2013.

Thepurposetoseekthegeneralmandate is toenable theDirectorsof theCompanyto issueandallotsharesatanytime to suchpersons in theirabsolutediscretionwithout conveningageneralmeetingas itwouldbebothtimeandcost-consuming toorganiseageneralmeeting. This authorityunless revokedor variedby theCompany ingeneralmeeting,willexpireatthenextAnnualGeneralMeeting.TheproposedgeneralmandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities, includingbutnot limitedtofurtherplacingofshares, forpurposeoffundingfutureinvestmentprojects,businessexpansion,workingcapitaland/oracquisitions.

TheCompanyhadon23rdJuly2014announceditsproposaltoundertakeaproposedprivateplacementwhichentailsthe issuanceofnewordinary sharesofRM0.10each in theCompany, representingnotmore than10%of the issuedandpaid-upsharecapitaloftheCompany,toplacee(s)tobeidentifiedlater,basedontheapprovalobtainedpursuanttoSection132DoftheActfromtheshareholdersintheTenthAnnualGeneralMeetingheldon28thAugust2013and/ortheapprovaltobeobtainedinEleventhAnnualGeneralMeeting.

The issuepriceandactualnumberofnewsharestobe issuedfortheproposedprivateplacementwillbedeterminedlater upon obtaining all relevant approvals. The proceeds are expected to be utilised by the Company and itssubsidiariesmainlyforbusinessexpansionandworkingcapitalpurposes.

8.2 OrdinaryResolution6-ProposedShareholders’Mandate TheexplanatorynotesonOrdinaryResolution6aresetoutintheCirculartoShareholdersdated6thAugust2014.

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Annual Report 2014

Thispagehasbeenintentionallyleftblank.

PROXY FORM

(Before completing this form please refer to the notes below)

*I/We NRIC No./Passport No./Company No.(Full name in Block Letters)

of(Full address)

being a member/members of INGENUITY CONSOLIDATED BERHAD hereby appoint the following person(s):-

Name of proxy, NRIC No. & address No. of shares to be represented1.2.

or failing him/her, the Chairman of the Meeting as *my/our proxy/proxies to attend and vote for *me/us and on my/our behalf at the Eleventh Annual General Meeting of the Company to be held at the Greens I, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Thursday, 28th day of August 2014 at 10.00 a.m. and at every adjournment thereof to vote as indicated below:-

FIRST PROXY SECOND PROXY

FOR AGAINST FOR AGAINST

Ordinary Resolution 1 - Directors’ fees

Ordinary Resolution 2 - Re-election of Mr Lim Boon Hong

Ordinary Resolution 3 - Re-election of Dato’ Johari Bin Yahya

Ordinary Resolution 4 - Re-appointment of auditors

Ordinary Resolution 5 - Authority to issue shares

Ordinary Resolution 6 - Proposed Shareholders’ Mandate

(Pleaseindicatewithan“x” inthespaceprovidedaboveonhowyouwishyourvotetobecast. Ifyoudonotdoso,theproxywillvoteorabstainfromvotingathis/herdiscretion).

In case of a vote taken by a show of hands, the First-named Proxy shall vote on *my/our behalf.

As witness my hand this day of 2014.

Signature/Common Seal of Shareholders* Strike out whichever is not desired.

Notes:-1. For thepurposeofdeterminingamemberwhoshallbeentitled toattend, speakandvoteat theAnnualGeneralMeeting, theCompany

shallberequestingtheRecordofDepositorsasat22nd August 2014.OnlyadepositorwhosenameappearsontheRecordofDepositorsasat 22nd August 2014shallbeentitledtoattendthesaidmeetingorappointproxiestoattend,speakandvoteonhis/herstead.

2. Amemberentitledtoattendandvoteatthemeetingisentitledtoappointuptotwo(2)proxiestoattendandvoteinhis/herstead.AproxyneedsnotbeamemberoftheCompany.

3. Whereamemberappoints two(2) proxies toattendat the samemeeting, theappointment shall be invalid unless he/she specifies theproportionsofhis/herholdingstoberepresentedbyeachproxy.

4. WhereamemberisanauthorisednomineeasdefinedundertheSecuritiesIndustry(CentralDepositories)Act1991,itmayappointatleastone(1)proxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.

5. Whereamemberof theCompany isanexemptauthorisednomineewhichholdsordinary shares in theCompany formultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.

6. If the appointer is a corporation, the Form of Proxymust be executed under its Common Seal or under the hand of its attorney dulyauthorized.

7. TheFormofProxymustbedepositedattheCompany’sRegisteredOfficeatLevel15-2,BangunanFaberImperialCourt,JalanSultanIsmail,50250KualaLumpurnotlessthan48hoursbeforethetimeappointedforholdingthemeetingoranyadjournmentthereof.


(Formerly known as “Ingenuity Solutions Berhad”)

No. of ordinary shares held

AFFIXSTAMP

1st Fold Here

Fold This Flap For Sealing

Then Fold Here

The Company Secretary


Level 15-2, Bangunan Faber Imperial Court,Jalan Sultan Ismail,50250 Kuala Lumpur

Documents

Annual Report 2014 - malaysiastock.biz 6B Persiaran Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Tel : 03-7688 9888 Fax : 03-7688 9881 Email : [email protected]