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INGENUITY CONSOLIDATED BERHAD (609423 V)

(Formerly known as Ingenuity Solutions Berhad)

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Ingenuity Consolidated Berhad (609423-V)(Formerly known as Ingenuity Solutions Berhad)

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

Annual Report

2013

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 ValuesCo

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

Co

nte

nts

0204 05 0711

162326 3032

98101103

Ingenuity Today

Notice Of Annual General MeetingAnnexure A106Proxy Form

Analysis Of ShareholdingsAnalysis Of Warrant Holdings

Financial Statements97 List Of Property

Statement On Risk Management & Internal ControlAudit Committee ReportAdditional Compliance InformationStatement Of Corporate Governance

14 Financial HighlightsChairman’s StatementDirectors’ ProfileCorporate InformationCorporate Structure

Change never comes easy. It requires a lot of commitment and effort, courage and sacrifice. It is, however, necessary for a better future. Ingenuity views change as an evolution that helps us overcome challenges and place us on track to achieve our goals and ambitions.

Cover Rationale

www.ingenuity.com.my annual report 2013

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EMBARKING ON TRANSFORMATION FOR SUSTAINABLE GROWTHIngenuity Consolidated Berhad (Formerly known as Ingenuity Solutions Berhad) 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.

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.

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

www.ingenuity.com.myIngenuity Consolidated Berhad (609423-V)

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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

BUSINESS SOFTWARE SOLUTIONS

(CRM) Software

IT HARDWARE & SOFTWARE DISTRIBUTIONAND SERVICES

Toshiba, Samsung, Seagate, BenQ, etc.

vendor till end-user

TELECOMMUNICATION PRODUCTS &DISTRIBUTION SERVICES

from vendor till end-user

Ingenuity Todaycont’d


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AustralDiversifiedSdn Bhd(100%)

Development Solution -Government/GLC Projects

Ingens CommerceSdn Bhd(100%)

Trading of Information Technology and

Telecommunication Products

Ingens Sdn Bhd(100%)

IT Hardware & SoftwareDistribution

InconnecxionCommunication

Sdn Bhd(100%)

Telecommunication Products & Services

Ingens DSSSdn Bhd(100%)

(Formerly known as DSSDistribution Sdn Bhd)

IT Accessories Distribution

DSS IkhlasSdn Bhd

(60%)Consumable Products

Ingens DirectSdn Bhd(100%)

ICT Products & ServicesDistribution

Unified SynergySdn Bhd

(51%)Broadband and Related

Products Distribution

INGENUITY MICROSYSTEMS

SDN BHD(100%)

Software Products & EnterpriseSolutions

RELIANCE COMPUTER

CENTRE SDN BHD(100%)

Enterprise Solutions - Hotel/Hospitality Solutions

Management

UPTOWN EXCELSDN BHD

(100%)System Integration &

Services

INGENUITY CARESDN BHD

(100%)Extended Warranty

Services

HALLMARK AVENUESDN BHD

(100%)IT Distribution

DPEG SERVICESSDN BHD

(100%)Courier & Delivery Services

VISTAVISION RESOURCES

SDN BHD(100%)

Investment Holdings

INGENUITYCONSOLIDATED

BERHAD(Formerly known as Ingenuity Solutions

Berhad)Investment Holdings,

Consultancy &Management Services

Corporate Structure


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BOARD OF DIRECTORS

Chin Boon Long Executive Chairman (Appointed on 24.9.2012)Wong Hun Liang Executive DirectorLow Gah Luen Executive DirectorNg Kok Hok Independent Non-Executive DirectorTham Kah Yong Independent Non-Executive DirectorLim Boon Hong Independent Non-Executive Director (Appointed on 4.6.2012)Dato’ Feroz Bin A S Moidunny Chairman, Non-Independent Non-Executive (Resigned on 7.9.2012)

AUDIT COMMITTEE

ChairmanNg Kok Hok

MemberTham Kah YongLim Boon Hong

REMUNERATION COMMITTEE

ChairmanNg Kok Hok

MemberTham Kah YongLim Boon HongLow Gah Luen

NOMINATION COMMITTEE

ChairmanTham Kah Yong

MemberNg Kok HokLim Boon Hong

COMPANY SECRETARY

Lim Seck Wah(MAICSA 0799845)

LEGAL COUNSEL

Cheang & Ariff39 Court @ Loke Mansion273A Jalan Medan Tuanku50300 Kuala Lumpur, MalaysiaTel : + (603) 2691 0803Fax : + (603) 2693 4475Email : [email protected] : www.cheangariff.com

Mah-Kamariyah & Philip Koh3A07, Phileo Damansara IIJalan 16/11, Off Jalan Damansara46350 Petaling JayaSelangor Darul Ehsan, MalaysiaTel : + (603) 7956 8686Fax : + (603) 7956 2208Email : [email protected] : www.mkp.com.my

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 Faber 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 SHAREREGISTRAR

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

Corporate Information


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www.iinggeng uityy.ccoom.myy annnuuaal repoporrt t 2t 0133

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Evolution is the means to achieve Ingenuity’s goal to be Malaysia’s leading ICT solutions provider

Evolution with a motive


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Directors’ Profile

CHIN BOON LONGExecutive Chairman

Chin Boon Long, aged 45, Malaysian, was appointed as an Executive Chairman of the Company since 24 September 2012.

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 as 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 neither has any family relationship with any director and/or substantial shareholder of the Company, nor any conflict of interest in any business arrangement involving the Company. He has had no convictions for any offences other than traffic offences (if any) within the past 10 years.

WONG HUN LIANGExecutive Director

Wong Hun Liang, a Malaysian aged 47, was appointed to the Board of the Company on 21 October 2003.

Mr. Wong graduated from University Putra Malaysia with a Bachelor of Engineering Degree in Electronics and Computer Engineering in 1991.

As the Executive Director of the Group, Mr. Wong plays a crucial role in strategising the Company’s development in the areas of Business Software Solutions and System Integration & Services, leading the Group to greater heights.

He has 23 years of experience in software engineering, ICT project management, consulting, development and training. Prior to joining the Company, he was with NCR Malaysia and AC Nielsen, where he lead a technical team in developing software solution for work process improvements, market research and CRM operations for the Asia-Pacific region. He was also appointed as the Software Quality Assurance Auditor for ISO 9001 for the company. His passion for software engineering and development led him to the Asia-Pacific Institute of Information Technology (APIIT), a leading Malaysian Institute of higher learning for ICT, where he became a Specialist Trainer and Senior Lecturer on software engineering, operating systems, networking, and database management systems. He is also a certified Microsoft Trainer and Systems Engineer for Internet. He was also involved in the planning and training for Malaysia Government Smart School project.

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.


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Directors’ Profilecont’d

LOW GAH LUENExecutive DirectorMember of Remuneration Committee

Low Gah Luen, a Malaysian aged 43, was appointed as an Executive Director of the Company on 27 February 2012.

Mr. Low obtained his Chartered Institute of Marketing – Advanced Certificate & Diploma from Segi College in 1996.

As the Executive Director of the Group, Mr.Low has successfully built a strong foothold in the IT Hardware and Software Distribution apart from Telecommunications division.

Prior to joining the Company, Mr. Low worked in Acer as the Head of Product Development, which equipped him with a vast knowledge and experience in product portfolios ranging from imaging devices, commercial PCs to consumer PCs.

With his high competency and capabilities, he was promoted to head of Mobile PC and Peripherals department, where he also served as a Sales Manager for the central region. His greatest achievement was his contribution to the consumer desktops segment, which led Acer to the No.1 market share in the region. Acer continued to achieve even greater heights during his fifteen years tenure. Mr. Low was instrumental in Acer’s notebook revenue surge and market share. The company’s success over the years further proved his ability, commitment and expertise in the ICT industry, bringing the company to where it is today.


NG KOK HOKIndependent Non-Executive DirectorChairman of Audit CommitteeChairman of Remuneration CommitteeMember of Nomination Committee

Ng Kok Hok, a Malaysian aged 52, 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.

He currently runs an engineering company which he founded. He also sits on the board of 1 Utopia Berhad and Globaltec Formation Berhad as an Independent Non-Executive Director.

He held the position of an Accountant in several private limited companies, which involve 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 was involved in several businesses which included international trade, e-commerce and travel agencies.



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Directors’ Profilecont’d

THAM KAH YONGIndependent Non-Executive DirectorMember of Audit CommitteeMember of Remuneration CommitteeChairman of Nomination Committee

Tham Kah Yong, a Malaysian aged 58, 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.


LIM BOON HONGIndependent Non-Executive DirectorMember of Audit CommitteeMember of Remuneration CommitteeMember of Nomination Committee

Lim Boon Hong, a Malaysian, aged 43, was appointed as an Independent Non-Executive Director of the Company on 4 June 2012.

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

At present, he serves as the Special Assistant to the Group Managing Director/CEO of Green Packet Berhad, a position which he held since 2006.

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. He was then 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.

Mr. Lim also sits on the Board of The Media Shoppe Berhad as an Independent Non-Executive Director and member of the Audit Committee of the company.



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annual report 2013

Committed to achievement

We are committed to expanding existing businesses, establishing new markets

and exploring greater opportunities


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wwwww.ingenuuity.coommm.myyIngenuity Consolidated Berhad (609423-V)

111111111

Chairman’sStatement


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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 2013.

www.ingenuity.com.my

d of DOn behalf of the BoardReporpresent the Annual RnuityStatements of Ingensubs(“Ingenuity”) and its s013.year ended 31 March 2

Chairman’s Statementcont’d

FINANCIAL HIGHLIGHTS

For the financial year ended 31 March 2013, the Group’s revenue rose 765.9% to RM553.59 million compared to RM63.93 million achieved in the previous year. This increase follows a full year of consolidation of the ICT distribution business carried out by our subsidiary VistaVision Resources Sdn Bhd (“VVR”). VVR, through its wholly owned subsidiaries, Ingens Sdn Bhd, Inconnecxion Communication Sdn Bhd, Ingens DSS Sdn Bhd (formerly known as DSS Distribution Sdn Bhd), has performed well during its first year within the Group, and has been instrumental in enabling the Group to achieve a positive growth.

The Group is pleased to announce that we registered a pre-tax profit of RM6.88 million this financial year, a marked contrast compared to the pre-tax loss of RM3.13 million in the preceding year. This marks a turnaround for the Group, and is an indication that the consolidation of VVR and its subsidiaries into the Group has been implemented well.

COMMITTED TO ACHIEVEMENT

The Group has completed its internal reorganizational plan in 2012 and in line with the reorganization has changed its name from Ingenuity Solutions Berhad to Ingenuity Consolidated Berhad effective 26 September 2012. This change reflects the Group’s new business

direction and strategy to emerge stronger and bigger in the ICT market under the guidance of the Board of Directors. The Group remains committed and will strive to synergize our businesses and uphold our vision in being the one-stop ICT solutions provider in Malaysia.

The Group’s four core businesses – Business Software Solutions, System Integration & Service, ICT Hardware and Software Distribution & Services, and Telecommunication Products & Distribution Services – have been streamlined under the consolidation process that began last year, and has resulted in a financial turnaround as projected by the Group the year before. Progress and achievements within the core businesses include the development of the Military


13

Chairman’s Statementcont’d

Lifetime Healthcare Database for the Malaysian military and the promotion of OpenERP solutions to Malaysian small medium enterprises by Ingenuity Microsystems Sdn Bhd. 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 Bhd and Inconnecxion Communication Sdn Bhd. These achievements represent milestones as the Group makes steady progress towards continued success.

EVOLUTION OF OPPORTUNITIES

It is undeniable that this past year, the business landscape of the local IT industry still remains in doubt. The rapid pace of recent technological advances and global economic changes has had a tremendous impact on everyone in the value chain – vendors, distributors, retailers and consumers. According to a recent report by International Data Corporation (IDC), PC sales in Malaysia for the first quarter of 2013 was 898,000 units, an 18 percent decline compared to the same quarter the year before.

While this downward trend is expected to continue with the competition from tablets and smartphones, various efforts by the government such as the nationwide distribution of mini notebooks by the Malaysian Communications and Multimedia Commission (MCMC) have provided some welcomed news to the industry. The Group has always viewed such uncertainties of the ICT industry as a way to improve our business and services, a challenge that we rise above and overcome. There comes a time, however, when merely overcoming a challenge is not enough, a time when we must go beyond the ordinary – to evolve to better suit the changing business landscape.

In line with this evolution, Ingenuity has successfully set up Ingens Commerce, a buyers’ consortium dedicated specifically to the IT industry. The consortium provides

various ICT dealers with an additional avenue to our products, one without the constraints associated with traditional distribution channels. Dealers will not only enjoy cost savings, but enable them to have a stronger voice within the local ICT industry, thereby helping to streamline industry processes. The Group projects that this endeavour will bring about a good change in the ICT ecosystem in terms of product and service improvement as well as reduction in unnecessary losses.

Many analysts predict that the local IT industry is quick approaching a crossroad, with e-commerce and its promise of a virtual marketplace against the time tested traditional sales channels. The Group believes that a combination of careful consolidation in its traditional businesses and the exploration of new opportunities such as e-Commerce will only serve to strengthen our position in the years to come.

ACKNOWLEDGEMENT AND APPRECIATION

On behalf of the Board of Directors, I would like to thank and express my heartfelt appreciation to both the management and all the employees for their unwavering support, dedication and commitment to the Group. The challenges of the ICT industry are great, but those who are able to rise up and overcome them will reap even greater rewards.

Finally, I would like to express my gratitude to all shareholders, stakeholders, business partners, media members as well as relevant governing authorities and regulatory bodies for their continuous support in the Group.

CHIN BOON LONGExecutive Chairman


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Revenue(RM’000)

1312111009

11,536

5,34

6

6,22

1

63,930

553,58

5

1312111009

(2,326

)

(3,431

)

(1,417

)

(3,131

)

6,87

9Profit/(Loss) Before Tax

(RM’000)

1312111009

(2,332

)

(3,221

)

(1,411

)

(3,205

)

5,71

6

Profit/(Loss) After Tax(RM’000)

1312111009

16,250

12,470

12,283

88,304

125,76

6

Total Assets(RM’000)

1312111009

979

520

271

40,437

68,527

Total Liabilities(RM’000)

Financial Highlights

(RM’000) 2009 2010 2011 2012 2013

Revenue 11,536 5,346 6,221 63,930 553,585

Profit/(Loss) Before Tax (2,326) (3,431) (1,417) (3,131) 6,879

Profit/(Loss) After Tax (2,332) (3,221) (1,411) (3,205) 5,716

Total Assets 16,250 12,470 12,283 88,304 125,766

Total Liabilities 979 520 271 40,437 68,527


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Adaptation through consolidationConsolidation of knowledge and experience produces ingenioussolutions adaptable to any situation


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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, whether 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

As in any organisation, the Board of Directors is at all the pinnacle of that organisation’s hierarchy structure. Members of the Board with the relevant experience and expertise are entrusted with the Group’s stewardship, strategic business direction and vigilance over the business operations and control. While the Executive Directors involved in the day-to-day affairs and operations of the Group, the Executive Chairman discharges his duties and responsibilities mainly by concentrating its decision making process on vital business strategies, key investments, financial performance whilst the Non-Executive Directors assist the Group to check and balance, to ensure compliance towards regulatory frameworks.

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 six (6) members, comprising the Executive Chairman, two (2) Executive Directors and three (3) 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 one-third of the Board to be independent.

(ii) Board Function

The Executive Chairman is responsible for ensuring the adequacy and effectiveness of the Board’s governance process and acts as a facilitator at Board meetings to ensure all Directors participate and deliberate at all Board meetings and that no Board member dominates discussion. The Executive Chairman who supported by fellow Executive Directors, he implements the Group’s strategies, policies and decision adopted by the Board and oversees the operations and business development of the Group.

The Executive Directors together with the Chief Financial Officer will have the overall responsibility to brief the Board at each Board meeting on the Group’s general state of affair, financial and operational activities, and progress of any previous Board’s policies and decisions. They will be responsible to highlight and provide a resolution (whenever possible, for the Board to decide) on any material subject in regards to the management, operation and performance of the Group’s business.

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.

Statement Of Corporate Governance

1717


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 of 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

(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 Group’s 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 Executive Chairman, Executive Directors, Secretary, 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.

(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.

(vii) Board Charter

Whilst Directors and Management of the Company are aware of their respective roles and responsibilities, including limits of authority accorded, the Board recognizes the need to formalize such demarcation of duties to provide clarity and guidance to Directors and Management. The Board will adopt a Board Charter at an appropriate time.


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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 whom are Independent Non-Executive Directors:-

Chairman: Tham Kah Yong (Independent Non-Executive Director) Members: Ng Kok Hok (Independent Non-Executive Director) Lim Boon Hong (Independent Non-Executive Director)

(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.

(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 four (4) 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 (Independent Non-Executive Director) Low Gah Luen (Executive Director)


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B. STRENGTHEN COMPOSITION OF THE BOARD cont’d

(iv) 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.

(v) Directors’ Remuneration Package

The Directors’ remuneration for the financial year ended 31 March 2013 is as follows:-

Executive Directors Non-Executive Directors

(RM) (RM)

Salaries and other emoluments 662,866 -

Fees 15,000 23,000

Range of Remuneration Executive Directors Non-Executive Directors

Below RM50,000 1 5

RMRM50,001 to RM100,000 2 -

RMRM100,001 to RM150,000 - -

RMRM150,001 to RM200,000 - -

RMRM200,001 to RM250,000 2 -

C. BOARD INDEPENDENCE

The Code recommends that the Chairman of the Board is a Non-Executive Director and the Board must comprise a majority of independent directors where the Chairman of the Board is not an independent director.

The Company maintains an Executive Chairman, two Executive Directors and three Independent Directors. Though the Company deviates from the recommendations 3.4 & 3.5 of the Code, the Board believes that the interests of shareholders are best served by the Executive Chairman who is sanctioned by the shareholders and who will act and safeguard in the best interests of shareholders as a whole. As the Executive Chairman represents major shareholder with a substantial interest in the Company, he is well placed to act on behalf of the shareholders and in their best interests. The Board will continuously to identify for suitable candidates as Independent Directors to form majority of the Board. However, the process will be executed with due care and careful assessment to ensure a meaningful contribution to the effectiveness of the Board as a whole.

The Board recognizes the importance of establishing criteria on independence to be used 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.


20

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 at 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.

(i) Board Meetings

The Board met (7) times during the financial year ended 31 March 2013 The attendance of the Board members at the meetings were as follows:-

Board of DirectorsNo. of meetings

attended

Chin Boon Long (appointed on 24.9.2012) 3/3

Wong Hun Liang 7/7

Low Gah Luen 7/7

Ng Kok Hok 7/7

Tham Kah Yong 7/7

Lim Boon Hong (appointed on 4.6.2012) 6/6

(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 2012

Wong Hun Liang - Bursa Malaysia Bhd: Advocacy Sessions On Disclosure for Chief Executive Officers (“CEOs”) And Chief Financial Officers (“CFOs”)

Low Gah Luen - Meridian Communications: Handling Press Conferences, Media Interviews & Tricky Media Questions

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

Tham Kah Yong - Corporate Fraud Seminar

Lim Boon Hong - Malaysia Communication & Multimedia Commission Event: Telecommunication, The Next Wave

All the Directors have attended the Mandatory Accreditation Programme (MAP) prescribed by Bursa Malaysia Securiries Berhad.



21

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 flow will give a comprehensive and fair view of the Group’s financial position at the end of the relevant financial year.

The Directors need to ensure that the financial statements are prepared in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards in Malaysia, the provisions of the Companies Act, 1965 and the Listing Requirements of Bursa Malaysia Securities Berhad. The Board has responsibility for ensuring that proper accounting records are kept with reasonable accuracy, the disclosure of financial position of the Group, and to ensure that the financial statements comply with the Malaysian Financial Reporting Standards, International Financial Reporting Standards in Malaysia and Listing Requirements. 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 2013 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 the Malaysian Financial Reporting Standards, International Financial Reporting Standards in Malaysia and Listing Requirements. 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 external and internal 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.



22

F. RECOGNISE AND MANAGE RISKS OF THE GROUP

Internal Control

The Board recognises the important 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 on Risk Management and Internal Control provides an overview of internal control activities during the year.)

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 in as soon as practicable through Bursa, the media and the Company’s website.

H. RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS

The Board recognises the important 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.



23

Additional Compliance Information

(i) Utilisation of proceeds raised from rights issue

On 22 July 2011, the Company successfully raised RM 24.319 million through a rights issue exercise. The proceeds had been fully utilized as follows:-

PurposesRight issue Proceeds

Actual Utilisation as at 31 March 2013 Balance

Estimated Timeframe for utilisation

RM’000 RM’000 RM’000

Business expansion 23,319 23,624 - Within two (2) years from listing of the Right

Issue shares

Rights issue expenses 1,000 695 305* Within three (3) months from listing of the Right

Issue shares

Total 24,319 24,319

* For any decrease in the right issue expenses, utilization for the business expansion will increase correspondingly.

(ii) Share Buybacks

For the financial year ended 31 March 2013, the Group did not enter into any share buyback transactions.

(iii) Options, Warrants or Convertible Securities

The Shareholders of the Company had on 17 January 2013 during the Extraordinary General Meeting of the Company approved an Employees’ Share Option Scheme (“ESOS”) for the eligible employees and Directors of the Company and its subsidiaries. The ESOS was implemented on 20 May 2013.

During the financial year ended 31 March 2013, 36,551,600 Warrants were exercised and converted into ordinary

shares as at 31 March 2013, 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 2013.

(v) Sanctions Imposed and/or Penalties

There were no sanctions or penalties imposed on the Group and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year ended 31 March 2013.

(vi) Non-audit fees

Non-audit fee paid or payable to the external auditors by the Company for the financial year ended 31 March 2013 was RM32,000.00 (2012 : RM 129,500.00).

(vii) Profit Guarantee

The Company entered into profit guarantee agreement with Landasan Simfoni Sdn Bhd and Titanium Hallmark Sdn Bhd on 20 October 2011 in relation to the guarantee to the Company on the audited profit after tax of Vistavision Resources Sdn Bhd. There was no shortfall in the profit guarantee received by the Company for the financial year ended 31 March 2013.


24

(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 2013 as previously announced and the audited financial statements of the Group for the financial year ended 31 March 2013.

(ix) Material Contract

For the financial year ended 31 March 2013, 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) Recurrent Related Party Transactions of a Revenue or Trading Nature

Nature of Relationship

(a) Mr. Chin Boon Long (“CBL”), the Executive Chairman of Ingenuity Consolidated Berhad (“ICB”). He is the spouse of Ms. Chan Swee Ying (“CSY”). He is a major shareholder of ICB with his direct interest and indirect interest via his and his spouse’s interest in Firstwide Success Sdn Bhd (“Firstwide”). CBL also the Managing Director and major shareholder of 1 Utopia Berhad.

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

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

(d) PC3 Technology Sdn Bhd (“PC3”), PDA Expert Mobility Sdn Bhd (“PDA”) and Essential Action Sdn Bhd (‘EASB”) are subsidiaries of 1 Utopia Berhad with respective equity participation of 51%, 100% and 51%.

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

(f) Takaso Trading Sdn Bhd (“TTSB”) is a wholly owned subsidiary of Takaso Resources Berhad. CBL has ceased as substantial shareholder in Takaso Resources Berhad since 14.1.2013 and his brother, Mr. Chin Boon Kim, has resigned from the Board of Takaso Resources Berhad on 7.3.2013. Hence, the transactions between ICB Group and TTSB are not regarded as RRPT after six months from 14.1.2013.

Additional Compliance Informationcont’d


25

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

The breakdowns of aggregate value of the recurrent related party transactions carried out by ICB Group during the financial year ended 31 March 2013 pursuant to the shareholders’ mandated obtained on 17 January 2013 are as follows:

ICB GroupTransacting

Party Nature of TransactionInterested

Related Party

Actual Value for financial year ended 31.3.2013

(RM)

Ingens Sdn Bhd (“ISB”)

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

CBL, CSY Firstwide

161,001,757

ISB PC3 Purchase of IT notebooks and computers from PC3.

CBL, CSY Firstwide

62,989,919

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

CBL, CSY Firstwide

20,371,057

ISB PDA Purchase of IT notebooks and computers from PDA.

CBL, CSY Firstwide

3,026,113

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

CBL, CSY Firstwide

3,210,780

Inconnecxion CommunicationsSdn Bhd (“IncCSB”)

PDA IncCSB supplies telecommunication devices & other peripherals to PDA.

CBL, CSY Firstwide

2,086,107

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

CBL, CSY Firstwide

1,917,518

Ingenuity Microsystems Sdn Bhd (“IMSB”)

FGRSB Letting of premises located at 12 & 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

ISB EASB Purchase of IT notebooks and computers from Essential Action Sdn Bhd

CBL, CSY Firstwide

4,991,191

ISB TTSB TTSB supplies imported computer accessories to ISB.

CBL, CSY Firstwide

1,454,392

Ingens DSS Sdn Bhd (formerly known as DSS Distribution Sdn Bhd) (“IDSS”)

TTSB TTSB supplies imported computer accessories to IDSS.

CBL, CSY Firstwide

0

Ingens Commerce Sdn Bhd (“IComm”)

PDA Purchase of telecommunication products from PDA.

CBL, CSY Firstwide

871,703

IComm PC3 Purchase of IT notebooks and computers from PC3.

CBL, CSY Firstwide

1,432,719

IComm EASB Purchase of IT notebooks and computers from EASB.

CBL, CSY Firstwide

186,472

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 6 August 2013.

Additional Compliance Informationcont’d


26

Audit Committee Report

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 - Tham Kah Yong (Independent Non-Executive Director) - Lim Boon Hong (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, production 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.


2727

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, statement of comprehensive income, statement of cash flows and notes to the financial report.

(b) To review and make necessary recommendations on the Group’s quarterly management announcements to ensure adherence to the Malaysian Financial Reporting Standards, International Financial Reporting Standards in Malaysia, 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 during the 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.


28

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 six (6) Audit Committee meetings held and were duly attended by the members as shown below:

Audit Committee members Attendance

Ng Kok Hok 6/6

Tham Kah Yong 6/6

Lim Boon Hong (appointed on 4.6.2012) 5/5

SUMMARY OF ACTIVITIES

Activities carried out by the Audit Committee during the financial year ended 31 March 2013 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, Companies Act 1965 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 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.

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

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



29


INTERNAL AUDIT FUNCTION

The Board is responsible for the fair presentation of the financial statements in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Malaysian Companies Act, 1965 in Malaysia. As the Non-Executive Directors are not involved in the operations of the Company, it will need to rely on the information provided, and the information must be fair, reliable and as accurate as possible. 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 2013 amount to RM 18,000.00

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.


30

Statement On Risk Management & Internal Control

INTRODUCTION

The Board is pleased to provide the following Statement on Risk Management & Internal Control for the financial year ended 31 March 2013. This statement is made in compliance with Paragraph 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.

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 Executive Directors 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 Committee 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 Committee on their performance, compliance, strategic plans and highlight major issues that need attention.


31

Statement On Risk Management & Internal Controlcont’d

INTERNAL CONTROL STRUCTURE, ELEMENTS AND PORCESSES cont’d

• Management, Audit, Nomination and Remuneration Committees cont’d

The Executive Directors and Chief Financial Officer will report material findings and/or variances highlighted by the Management Committee 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, was 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 RM18,000 during the year. In addition, the internal audit function is responsible for conducting consistent 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.

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.

REVIEW OF STATEMENT BY EXTERNAL AUDITORS

As required by Bursa Malaysia Securities Berhad ACE Market Listing Requirements, the External Auditors, Messrs SJ Grant Thornton have reviewed this Statement on Risk Management and Internal Control. The External Auditors review scope does not extend to the adequacy and effectiveness of the internal controls.

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.

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

Fina

ncia

l Sta

tem

ents

343838394143

4649

Statement By DirectorsDirectors’ Report

Notes To The Financial StatementsStatements Of Cash Flows

44 Statements Of Changes in EquityStatement Of Comprehensive IncomeStatements Of Financial PositionIndependent Auditors’ ReportStatutory Declaration


34

DIRECTORS’ REPORT

The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2013.

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 Company

RM RM

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

Attributable to:-

Owners of the parent 5,900,088

Non-controlling interests (184,229)

5,715,859

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year except for those disclosed in the financial statements.

DIVIDENDS

There were no dividends paid or declared 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 as follows:-

Chin Boon Long (Chairman, Executive Director, appointed on 24.9.2012)Wong Hun Liang (Executive Director)Low Gah Luen (Executive Director)Ng Kok Hok (Independent Non-Executive Director)Tham Kah Yong (Independent Non-Executive Director)Lim Boon Hong (Independent Non-Executive Director)Dato’ Feroz Bin A S Moidunny (Chairman, Non-Independent Non-Executive Director, resigned on 7.9.2012)

Directors’ Report


35

DIRECTORS’ INTEREST

According to the Register of Directors’ Shareholdings, the beneficial interests of those who were Directors at the end of the financial year in the shares of the Company and its related corporations were as follows:-

Number of ordinary shares of RM0.10 each

Interest in the CompanyAt

1.4.2012 Bought SoldAt

31.3.2013

Direct interest

Chin Boon Long - 81,920,732 (13,120,000) 68,800,732

Indirect/deemed interest

Wong Hun Liang* 98,496,924 - (98,496,924) -

Low Gah Luen^ 25,500,000 - - 25,500,000

Chin Boon Long# - 103,616,924 - 103,616,924

* by virtue of his shareholdings in Firstwide Success Sdn. Bhd.^ by virtue of his shareholdings in Landasan Simfoni Sdn. Bhd.# by virtue of his spouse and his shareholdings in Firstwide Success Sdn Bhd.

By virtue of Mr. Chin Boon Long’s direct and indirect/deemed 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 holding office at the end of the financial year had any interest or beneficial interest in the shares of the 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.

Since the end of the previous financial year, no Directors have received or become entitled to receive any benefits (other than as disclosed in Notes 21 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 he is a member, or with a company in which he has a substantial financial interest.

AUDIT COMMITTEE

The members of the Audit Committee are:-

Ng Kok Hok (Chairman)Tham Kah Yong Lim Boon Hong

The functions of the Audit Committee are to review accounting policies, internal controls, financial results and annual financial statements of the Group and of the Company on behalf of the Board of Directors.

Directors’ Reportcont’d


36

ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company issued 36,551,600 new ordinary shares of RM0.10 each for cash arising from the exercise of Warrants 2011/2016 at the exercise price of RM0.10 per ordinary share.

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

There were no debentures issued during the financial year.

WARRANT 2011/2016

In the previous financial year, the Company had on 19 July 2011 allotted and issued 243,189,716 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 (“Warrant 2011/2016”). Each Warrant 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 the 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 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.

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 action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets 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 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.



37

OTHER STATUTORY INFORMATION cont’d

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 its 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; 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 operations of the Group and of the Company for the current financial year in which this report is made.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The significant events during the financial year are disclosed in Note 28 to the Financial Statements.

SIGNIFICANT EVENTS AFTER THE FINANCIAL YEAR

The significant events after the financial year are disclosed in Note 29 to the Financial Statements.

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,

WONG HUN LIANG ) ) ) ) DIRECTORS ) ) )LOW GAH LUEN )

Kuala Lumpur25 July 2013



38

I, Kenny Khow Chuan Wah, being the officer primarily responsible for the financial management of Ingenuity Consolidated Berhad (formerly known as Ingenuity Solutions Berhad), do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 41 to 95 and the information set out on page 96 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed at Kuala Lumpur in )the Federal Territory this day of )25 July 2013 ) KENNY KHOW CHUAN WAH

Before me:

Commissioner for OathsS. ARULSAMY W490

Statement by Directors

Statutory Declaration

In the opinion of the Directors, the financial statements set out on pages 41 to 95 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 2013 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 96 has been compiled 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,

WONG HUN LIANG LOW GAH LUEN Kuala Lumpur25 July 2013


39

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Ingenuity Consolidated Berhad (formerly known as Ingenuity Solutions Berhad), which comprise the statements of financial position of the Group and of the Company as at 31 March 2013, the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes enumerated in Notes 1 to 33 as set out on pages 41 to 95.

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 responsible for such internal controls as the Directors determine are 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 2013 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.

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) Our auditors’ reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.

Independent Auditors’ Reportto the Members of Ingenuity Consolidated Berhad

(Incorporated in Malaysia) Company No. 609423 V


40

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out on page 96 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

1. As stated in Note 2.4 to the Financial Statements, the Company adopted Malaysian Financial Reporting Standards on 1 April 2012 with a transition date of 1 April 2011. These standards were applied retrospectively by the Directors to the comparative information in these financial statements, including the statements of financial position as at 31 March 2012 and 1 April 2011, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the financial year ended 31 March 2012 and related disclosures. We were not engaged to report on the MFRS transition comparative information, and it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the financial year ended 31 March 2013 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1 April 2012 do not contain misstatements that materially affect the financial position as at 31 March 2013 and financial performance and cash flows for the financial year then ended.

2. 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 HOOI KOK MUN(NO. AF: 0737) (NO: 2207/01/14(J))CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT

Kuala Lumpur25 July 2013

Independent Auditors’ Reportto the Members of Ingenuity Consolidated Berhad(Incorporated in Malaysia) Company No. 609423 Vcont’d


41

Statements Of Financial Positionas at 31 March 2013

Group Company

Note 31.3.2013 31.3.2012 1.4.2011 31.3.2013 31.3.2012 1.4.2011

RM RM RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 4 17,642,966 2,968,885 832,035 302 - -

Investment in subsidiary companies 5 - - - 21,875,828 21,875,826 6,423,814

Intangible assets 6 5,349,662 6,148,835 7,166,507 - - -

Goodwill on consolidation 7 9,781,233 9,781,233 - - - -

Total non-current assets 32,773,861 18,898,953 7,998,542 21,876,130 21,875,826 6,423,814

Current assets

Inventories 8 15,240,155 7,839,799 48,751 - - -

Trade receivables 9 67,047,049 38,615,911 3,132,767 - - -

Other receivables 10 4,507,417 4,649,313 102,594 5,278 - -

Amount due from subsidiary companies 5 - - - 39,551,715 34,569,542 13,452,437

Fixed deposits with a licensed bank 11 1,066,500 2,800,000 500,000 - 1,800,000 500,000

Cash and bank balances 5,131,050 15,500,237 499,920 80,596 223,215 32,315

Total current assets 92,992,171 69,405,260 4,284,032 39,637,589 36,592,757 13,984,752

Total assets 125,766,032 88,304,213 12,282,574 61,513,719 58,468,583 20,408,566

EQUITY AND LIABILITIES

EQUITY

Share capital 12 57,984,884 54,329,724 14,558,752 57,984,884 54,329,724 14,558,752

Reserves 13 (562,634) (6,462,722) (2,547,186) 3,000,224 4,102,256 5,838,674

57,422,250 47,867,002 12,011,566 60,985,108 58,431,980 20,397,426

Non-controlling interests (183,707) - - - - -

Total equity 57,238,543 47,867,002 12,011,566 60,985,108 58,431,980 20,397,426

LIABILITIES

Non-current liabilities

Borrowings 14 5,306,683 - - - - -

Hire purchase creditors 15 72,702 108,409 - - - -

Deferred taxation 16 267,000 233,000 - - - -

Total non-current liabilities 5,646,385 341,409 - - - -


42

Statements Of Financial Positionas at 31 March 2013cont’d

Group Company

Note 31.3.2013 31.3.2012 1.4.2011 31.3.2013 31.3.2012 1.4.2011

RM RM RM RM RM RM

Current liabilities

Trade payables 17 56,209,994 33,152,157 187,246 - - -

Other payables 18 3,943,159 6,667,688 83,762 107,175 36,603 11,140

Amount due to a subsidiary company 5 - - - 400,100 - -

Amount due to Directors 19 21,336 - - 21,336 - -

Borrowings 14 2,446,210 - - - - -

Hire purchase creditors 15 35,490 42,711 - - - -

Tax payable 224,915 233,246 - - - -

Total current liabilities 62,881,104 40,095,802 271,008 528,611 36,603 11,140

Total liabilities 68,527,489 40,437,211 271,008 528,611 36,603 11,140

Total equity and liabilities 125,766,032 88,304,213 12,282,574 61,513,719 58,468,583 20,408,566

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


43

Statement Of Comprehensive Incomefor the Financial Year Ended 31 March 2013


Group Company

Note 2013 2012 2013 2012

RM RM RM RM

Revenue 20 553,585,047 63,929,710 - -

Cost of sales 20 (530,494,489) (61,567,973) - -

Gross profit 23,090,558 2,361,737 - -

Other income 1,860,971 244,331 17,657 38,779

Selling and promotion expenses (4,346,024) (402,969) - (12,240)

Administration expenses (13,275,419) (5,208,216) (1,119,689) (1,052,812)

Other expenses (100,744) (105,137) - -

Finance cost (350,364) (21,137) - -

Profit/(Loss) before tax 21 6,878,978 (3,131,391) (1,102,032) (1,026,273)

Tax expense 22 (1,163,119) (74,000) - -

Net profit/(loss) for the financial year/total comprehensive income/(loss) for the financial year 5,715,859 (3,205,391) (1,102,032) (1,026,273)

Profit/(Loss) for the financial year attributable to:

Owners of the parent 5,900,088 (3,205,391)

Non-controlling interests (184,229) -

5,715,859 (3,205,391)

Profit/(Loss) per share

- Basic (sen) 23 1.05 (0.96)

- Diluted (sen) 23 0.99 (0.70)


44

Attributable to equity holders of the Company

Non-distributable

Sharecapital

Share premium

Merger deficit

Warrant reserve

Accumulated losses Total

Non-controlling

interestsTotal

equity

RM RM RM RM RM RM RM RM

Group

Balance as at 1 April 2011 14,558,752 12,863,396 (7,900,000) - (7,510,582) 12,011,566 - 12,011,566

Transactions with owners:

Issuance of shares arising from rights issue 24,318,972 - - - - 24,318,972 - 24,318,972

Share issuance expenses

relating to rights issue - (695,145) - - - (695,145) - (695,145)

Warrant reserve arising from rights issue - - - 8,207,653 (8,207,653) - - -

Issuance of shares arising from acquisition of subsidiary companies 15,452,000 - - - - 15,452,000 - 15,452,000

Share issuance expenses relating to acquisition of subsidiary companies - (15,000) - - - (15,000) - (15,000)

Total transactions with owners 39,770,972 (710,145) - 8,207,653 (8,207,653) 39,060,827 - 39,060,827

Total comprehensive loss for the financial year - - - - (3,205,391) (3,205,391) - (3,205,391)

Balance as at 31 March

2012 54,329,724 12,153,251 (7,900,000) 8,207,653 (18,923,626) 47,867,002 - 47,867,002


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

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

Arising from subscription of shares in subsidiary companies - - - - - - 102 102

Realisation upon disposal of subsidiary company - - - - - - 420 420

Total transactions with owners 3,655,160 - - (1,644,822) 1,644,822 3,655,160 522 3,655,682

Total comprehensive income for the financial year - - - - 5,900,088 5,900,088 (184,229) 5,715,859

Balance as at 31 March 2013 57,984,884 12,153,251 (7,900,000) 6,562,831 (11,378,716) 57,422,250 (183,707) 57,238,543

Statements Of Changes in Equityfor the Financial Year Ended 31 March 2013


45

Statements Of Changes in Equityfor the Financial Year Ended 31 March 2013

cont’d

Attributable to equity holders of the Company

Non-distributable

Sharecapital

Share premium

Merger deficit

Warrant reserve

Accumulated losses Total

Non-controlling

interestsTotal

equity

RM RM RM RM RM RM RM RM

Company

Balance as at 1 April 2011 14,558,752 12,863,396 - - (7,024,722) 20,397,426 - 20,397,426


Issuance of shares arising from rights issue 24,318,972 - - - - 24,318,972 - 24,318,972

Share issuance expenses

relating to rights issue - (695,145) - - - (695,145) - (695,145)

Warrant reserve arising from rights issue - - - 8,207,653 (8,207,653) - - -

Issuance of shares arising from acquisition of subsidiary companies 15,452,000 - - - - 15,452,000 - 15,452,000

Share issuance expenses relating to acquisition of subsidiary companies - (15,000) - - - (15,000) - (15,000)

Total transactions with owners 39,770,972 (710,145) - 8,207,653 (8,207,653) 39,060,827 - 39,060,827


Balance as at 31 March 2012 54,329,724 12,153,251 - 8,207,653 (16,258,648) 58,431,980 - 58,431,980


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


Balance as at 31 March

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



46

Statements Of Cash Flowsfor the Financial Year Ended 31 March 2013

Group Company

Note 2013 2012 2013 2012

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profit/(Loss) before tax 6,878,978 (3,131,391) (1,102,032) (1,026,273)

Adjustments for:-

Allowance for impairment loss on receivables 77,059 102,588 - -

Allowance for impairment loss on receivables no longer required (102,588) (97,349) - -

Allowance for slow moving inventories no longer required - (32,033) - -

Amortisation of intangible assets 799,173 1,017,672 - -

Bad debts written off 114,690 70,503 - -

Depreciation 1,255,174 340,939 38 -

Gain on disposal of property, plant and equipment (1,096) (398) - -

Gain on disposal of a subsidiary company (438) - - -

Property, plant and equipment written off 45,069 6,233 - -

Inventories written off - 31,354 - -

Inventories written down 84,504 - - -

Interest expenses 347,107 21,117 - -

Interest income (49,207) (38,787) (17,657) (38,779)

Operating profit/(loss) before working capital changes 9,448,425 (1,709,552) (1,119,651) (1,065,052)

Changes in working capital:-

Inventories (7,484,860) 479,827 - -

Receivables (28,163,088) (8,156,701) (5,278) -

Payables 20,334,266 (2,219,110) 70,572 25,463

Directors 21,336 - 21,336 -

Cash used in operations (5,843,921) (11,605,536) (1,033,021) (1,039,589)

Tax paid (1,137,450) (13,558) - -

Interest paid (347,107) (21,117) - -

Interest received 49,207 38,787 17,657 38,779

Net cash used in operating activities (7,279,271) (11,601,424) (1,015,364) (1,000,810)


47

Statements Of Cash Flowsfor the Financial Year Ended 31 March 2013

cont’d

Group CompanyNote 2013 2012 2013 2012

RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (16,195,817) (1,258,017) (340) -

Proceeds from disposal of property, plant and equipment 7,173 398 - -

Proceed from disposal of a subsidiary company A 1 - - -

Discharge of fixed deposits pledged with a licensed bank 1,000,000 - - -

Acquisition of subsidiary companies B - 5,554,607 (2) (12)

Net cash (used in)/from investing activities (15,188,643) 4,296,988 (342) (12)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of shares, net of share

issuance expenses 3,655,160 23,608,827 3,655,160 23,608,827

Drawndown of borrowings 8,030,000 - - -

Repayment of borrowings (277,107) - - -

Repayment of hire purchase creditors (42,928) (4,074) - -

Subscription of shares by non-controlling interests 102 - - -

Advances to subsidiary companies - - (4,582,073) (21,117,105)

Net cash from/(used in) financing activities 11,365,227 23,604,753 (926,913) 2,491,722

CASH AND CASH EQUIVALENTSNet (decrease)/increase (11,102,687) 16,300,317 (1,942,619) 1,490,900

Brought forward 17,300,237 999,920 2,023,215 532,315

Carried forward C 6,197,550 17,300,237 80,596 2,023,215

NOTES TO THE STATEMENTS OF CASH FLOWS

A. GAIN ON DISPOSAL OF A SUBSIDIARY COMPANY

Group 2013

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


48

B. ACQUISITION OF SUBSIDIARY COMPANIES

Group

2012

RM

Property, plant and equipment 1,226,005

Goodwill on consolidation 393,743

Inventories 8,270,196

Trade receivables 28,378,702

Other receivables 3,570,202

Fixed deposits with a licensed bank 1,000,000

Cash and bank balances 5,554,619

Hire purchase creditors (155,194)

Deferred taxation (233,000)

Trade payables (39,487,139)

Other payables (2,280,808)

Tax payable (172,804)

Net assets acquired 6,064,522

Goodwill on acquisition 9,387,490

Cost of acquisition 15,452,012

Less: Settlement through issuance of shares (15,452,000)

Net cost of acquisition 12

Less: Cash and cash equivalents acquired (5,554,619)

Net cash inflows from acquisition (5,554,607)

C. CASH AND CASH EQUIVALENTS

Group Company

2013 2012 2013 2012

RM RM RM RM

Cash and bank balances 5,131,050 15,500,237 80,596 223,215

Fixed deposits with a licensed bank 1,066,500 1,800,000 - 1,800,000

6,197,550 17,300,237 80,596 2,023,215

Statements Of Cash Flowsfor the Financial Year Ended 31 March 2013cont’d



49

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 is located at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur. The principal place of business is located at 12th Floor, Persoft Tower, 6B Persiaran Tropicana, Tropicana Golf & Country Resort, 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 Directors passed on 25 July 2013.

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.

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 First-time adoption of MFRSs

In the previous years, the financial statements of the Group and of the Company were prepared in accordance with Financial Reporting Standards (“FRSs”). These are the Group’s and the Company’s first financial statements prepared in accordance with MFRSs and MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards has been applied.

The accounting policies set out in Note 3 have been applied in preparing the financial statements of the Group and of the Company for the financial year ended 31 March 2013, the comparative information presented in these financial statements for the financial year ended 31 March 2012 and in the preparation of the opening MFRS statement of financial position at 1 April 2011 (the Group’s date of transition to MFRSs).

The transition to MFRSs does not have financial impact to the opening consolidated statement of financial position of the Group and the opening statement of financial position of the Company as at 1 April 2011.

Notes To The Financial Statements31 March 2013


50

Notes To The Financial Statements31 March 2013cont’d

2. BASIS OF PREPARATION cont’d

2.5 Standards issued but not yet effective

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

Amendments to MFRS effective 1 July 2012

(a) Amendments to MFRS 101 - Presentation of Financial Statement - Presentation of Items of Other Comprehensive Income

MFRS effective 1 January 2013

(a) MFRS 10 - Consolidated Financial Statements

(b) MFRS 11 - Joint Arrangement

(c) MFRS 12 - Disclosure of Interests in Other Entities

(d) MFRS 13 - Fair Value Measurement

(e) MFRS 119 - Employee Benefits (International Accounting Standard (“IAS”) 19 as amended by International Accounting Standards Board (“IASB”) in June 2011)

(f) MFRS 127 - Separate Financial Statements (IAS 27 as amended by IASB in May 2011)

(g) MFRS 128 - Investments in Associates and Joint Ventures (IAS 28 as amended by IASB in May 2011)

(h) IC Interpretation 20 - Stripping Costs in the Production Phase of a Surface Mine

Amendments to MFRS effective 1 January 2013

(a) MFRS 1 - First-time Adoption of Malaysian Financial Reporting Standards – Government Loans

(b) MFRS 7 - Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities

(c) MFRS 10,11 and 12 - Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance

(d) Annual Improvements 2009 – 2011 Cycle issued in July 2012

Amendments to MFRS effective 1 January 2014

(a) MFRS 10,12 and 127 - Consolidated Financial Statements, Disclosure of Interests in Other Entities and Separate Financial Statements: Investment Entities

(b) MFRS 132 - Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities

MFRS effective 1 January 2015

(a) MFRS 7 - Financial Instruments: Disclosures – Mandatory Date of MFRS 9 and Transition Disclosures

(b) MFRS 9 - Financial Instruments (IFRS 9 issued by IASB in November 2009)

(c) MFRS 9 - Financial Instruments (IFRS 9 issued by IASB in October 2010)


51


cont’d


2.5 Standards issued but not yet effective cont’d

MFRS 11, 12, 13, 127, 128 and IC Interpretation 20 are not applicable to the Group’s operations.

MFRS 10, 11, 12, 13, 128 and IC Interpretation 20 are not applicable to the Company’s operations.

The initial application of the above standards are not expected to have any financial impacts to the financial statements upon the first adoption, 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 adoption of MFRS 9 will result in a change in accounting policy. The Group and the Company are currently examining the financial impact of adopting MFRS 9.

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. They 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

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

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 2013, management assesses that the useful lives represent the expected utility of the assets to the Group. The carrying amount of the Group’s property, plant and equipment at the reporting date is disclosed in Note 4 to the Financial Statements. 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.

A 3% difference in the expected useful lives of the property, plant and equipment from the management’s estimates would result in approximately 2% (31.3.2012: 2%, 1.4.2011: 4%) variance in the Group’s profit/loss for the financial year.


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2.6 Significant accounting estimates and judgements cont’d

2.6.1 Estimation uncertainty cont’d

Impairment of goodwill

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. These assumptions relate to future events and circumstances.

Further details of the carrying values, 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.

Impairment of non-financial assets

The Directors assess whether the carrying amount of its non-financial assets are impaired at each reporting date. This involves measuring the recoverable amounts based on the fair value less costs to sell or value in use of these assets.

Fair value less costs to sell is determined based on available published third party information or contractual value in agreements entered into by the Group or the Company.

The carrying amounts of the Group’s and of the Company’s non-financial assets at the reporting date are summarised in Note 4, 5, 6 and 7 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.

Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, unabsorbed tax 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 tax 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.


53


cont’d


2.6 Significant accounting estimates and judgements cont’d

2.6.1 Estimation uncertainty cont’d

Income taxes

Significant judgement is involved in determining the Group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise tax liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.

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 3% difference in the projected revenue of the development costs from the management’ estimates would result in approximately 3% (31.3.2012: 4%, 1.4.2011: 3%) variance in the Group’s profit/ loss for the financial year.

Amortisation of other intangible asset

The other intangible asset is amortised over the estimated life span of the developed asset which is estimated to be within 2.5 years. Changes in the technological developments could impact the economic useful life and the residual values of this asset, therefore future amortisation charges could be revised.

Allowance for slow moving 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.

An 3% difference in the management’s estimation of net realisable values of the inventories would result in approximately 8% (31.3.2012: 7%, 1.4.2011: 1%) variance in the Group’s profit/loss for the financial year.

2.6.2 Significant management judgements

The following is significant management judgement in applying the accounting policy of the Group that has the most significant effect on the financial statements:-

Leases

In applying the classification of leases in MFRS 117, management considers the lease transaction is not always conclusive, and management uses judgement in determining whether the lease is a finance lease arrangement that transfers substantially all the risks and rewards incidental to ownership, whether the lease term is for the major part of the economic life of the asset even if title is not transferred and others in accordance with MFRS 117, Leases.


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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 and in preparing their opening MFRS statements of financial position at 1 April 2011 (the transition date to MFRS framework), unless otherwise stated.

3.1 Consolidation

Subsidiary companies

A subsidiary company is a company in which the Group or the Company has the power to exercise control over its financial and operating policies so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

Investment in subsidiary companies is stated at cost less any impairment losses in the statement of financial position, unless the investment is held for sale or distribution. The cost of investment includes transaction costs.

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.

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 year.

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.

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.


55


cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d

3.1 Consolidation cont’d

Business combinations and goodwill cont’d

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.

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.

As part of its transition to MFRS framework, the Group elected not to restate those business combinations that occurred before the date of transition to MFRS. Goodwill arising from acquisitions before 1 April 2011 has been carried forward from the previous FRS framework as at the date of transition.

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.


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3.1 Consolidation cont’d

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.

3.2 Foreign currency translation

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

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.

3.3 Property, plant and equipment

All property, plant and equipment 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.

Depreciation is recognised on the straight line method in order to write off the cost of each asset over its estimated useful life. Property, plant and equipment are depreciated based on the estimated useful lives of the assets as follows:-

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

2%10% - 50%10% - 20%

20%10%

10% - 20%


57


cont’d


3.3 Property, plant and equipment cont’d

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.

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.

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.


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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 dateProjected total revenue of the developed assets

x Cumulative actualdevelopment expenditure

- Accumulated amortisation at beginning of year

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 statements of comprehensive income 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 the statements of comprehensive income 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.

3.7 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.


59


cont’d


3.8 Financial instruments cont’d

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.

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each reporting date.

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, trade and most of the other receivables fall into this category of financial instruments.

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.

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 liabilities measured at amortised cost on their statements of financial position.


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3.8 Financial instruments cont’d

Financial liabilities - categorisation and subsequent measurement cont’d

Other liabilities measured at amortised cost

The Group’s and the Company’s other liabilities include amount due to a Director, borrowings, 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.

3.9 Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first-in-first-

out/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.

3.10 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, bank balances, short term demand 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

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.


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cont’d


3.11 Impairment of assets cont’d

Non-financial assets cont’d

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.

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.


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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.

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

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.

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.

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 provision is reversed.

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.

3.15 Revenue recognition

Revenue from sale of goods and performance of services are recognised as income, net of discount and goods return in the statements of comprehensive income upon delivery of goods and when services are rendered.

Interest income is recognised on time proportion basis, taking into account the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the Group or the Company.


63


cont’d


3.16 Employee benefits

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 employees of the Group and the Company. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occured.

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”).

3.17 Tax expenses

Tax expenses comprise 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.

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).

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.

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.


64



3.18 Segmental results

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.

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 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.

(b) An entity is related to the Company 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 Group or is a member of the

key management personnel of the Group.


65


cont’d

4. PROPERTY, PLANT AND EQUIPMENT

Group

Freehold land and building

Computer and office

equipment

Furniture, fittings and

officerenovation

Motor vehicles Signboards

Data processingequipment

and applications Total

RM RM RM RM RM RM RM

Cost

Balance as at 1 April 2011 - 1,920,050 1,406,836 182,775 - 2,185,361 5,695,022

Additions through acquisition of subsidiary companies - 1,090,089 93,181 293,819 6,400 - 1,483,489

Additions - 230,025 936,626 91,366 - - 1,258,017

Disposals - (178,818) - (56,776) - - (235,594)

Written off - (1,698,796) (1,008,486) - - (219,460) (2,926,742)

Balance as at 31 March 2012 - 1,362,550 1,428,157 511,184 6,400 1,965,901 5,274,192

Additions 10,467,353 1,032,612 4,399,944 94,801 26,550 174,557 16,195,817

Disposals - (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 5,249,445 605,985 32,950 2,140,458 20,798,575


66


4. PROPERTY, PLANT AND EQUIPMENT cont’d

Group

Freehold land and building

Computer and office

equipment

Furniture, fittings

and officerenovation

Motor vehicles Signboards

Data processingequipment

and applications Total

RM RM RM RM RM RM RM

Accumulated depreciation

Balance as at 1 April 2011 - 1,910,823 1,280,299 182,283 - 1,489,582 4,862,987

Additions through acquisition of subsidiary companies - 170,469 14,533 71,506 976 - 257,484

Charge for the year - 50,959 104,171 5,494 53 180,262 340,939

Disposals - (178,818) - (56,776) - - (235,594)

Written off - (1,696,266) (1,004,784) - - (219,459) (2,920,509)

Balance as at 31 March 2012 - 257,167 394,219 202,507 1,029 1,450,385 2,305,307

Charge for the year 140,264 464,782 367,001 86,301 2,032 194,794 1,255,174

Disposals - (12,602) (13,871) - - - (26,473)

Written off - (13,246) (365,153) - - - (378,399)

Balance as at 31 March 2013 140,264 696,101 382,196 288,808 3,061 1,645,179 3,155,609

Net carrying amount

31 March 2013 10,327,089 1,606,283 4,867,249 317,177 29,889 495,279 17,642,966

31 March 2012 - 1,105,383 1,033,938 308,677 5,371 515,516 2,968,885

1 April 2011 - 9,227 126,537 492 - 695,779 832,035

Motor vehicles with net carrying amount of RM144,270 (31.3.2012: RM194,002, 1.4.2011: Nil) are financed under hire purchase arrangements.


67


cont’d

4. PROPERTY, PLANT AND EQUIPMENT cont’d

Freehold land and building with net carrying amount of RM10,327,089 (31.3.2012: Nil, 1.4.2011: Nil) are pledged to a licensed bank for banking facility granted to a subsidiary company.

CompanyOffice

equipment

RM

Cost

Additions / balance as at 31 March 2013 340

Accumulated depreciation

Charge for the financial year / balance as at 31 March 2013 38

Net carrying amount

31 March 2013 302

31 March 2012 -

1 April 2011 -

5. SUBSIDIARY COMPANIES

Company

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Unquoted shares, at cost 25,337,246 25,337,244 9,885,232

Less: Allowance for impairment (3,461,418) (3,461,418) (3,461,418)

21,875,828 21,875,826 6,423,814


68


5. SUBSIDIARY COMPANIES cont’d

Details of the subsidiary companies which are incorporated in Malaysia are as follows:-

Name of company Effective interest Principal activities

31.3.2013 31.3.2012 1.4.2011

% % %

Ingenuity Microsystems Sdn. Bhd. 100 100 100 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

Reliance Computer Centre Sdn. Bhd.

100 100 100 Marketing of computer hardware and software for business solutions

Uptown Excel Sdn. Bhd. 100 100 100 Dormant

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

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

Vistavision Resources Sdn. Bhd. 100 100 - Investment holding

DPEG Services Sdn. Bhd. 100 - - Dormant

Subsidiary company of Ingenuity Microsystems Sdn. Bhd.

Austral Diversified Sdn. Bhd. 100 100 - Dormant

Subsidiary companies of Vistavision Resources Sdn. Bhd.

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

Inconnecxion Communication Sdn. Bhd.

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

Unified Synergy Sdn. Bhd. 51 - - Dormant

Ingens Commerce Sdn. Bhd. 100 - - Trading, reselling, retailing, marketing and promoting of all types of information technology and telecommunication and multimedia products, software, accessories and services

Subsidiary company of Ingens Sdn. Bhd.

Ingens DSS Sdn. Bhd. (formerly known as DSS Distribution Sdn. Bhd.)

100 100 - Distributor of computer hardware and accessories

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


69


cont’d

5. SUBSIDIARY COMPANIES cont’d

Details of the subsidiary companies which are incorporated in Malaysia are as follows:- cont’d

Name of company Effective interest Principal activities

31.3.2013 31.3.2012 1.4.2011

% % %

Subsidiary company of Ingens DSS Sdn. Bhd. (formerly known as DSS Distribution Sdn. Bhd.)

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

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

6. INTANGIBLE ASSETS

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Development costs 5,349,662 6,148,835 6,998,507

Other intangible asset – Hotel application software - - 168,000

Net carrying amount 5,349,662 6,148,835 7,166,507

i) Development costs

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Development costs 17,370,496 17,370,496 17,370,496

Less: Multimedia Super Corridor grants Received (1,686,985) (1,686,985) (1,686,985)

15,683,511 15,683,511 15,683,511

Less: Accumulated amortisation

At 1 April (6,492,719) (5,643,047) (5,185,180)

Addition (799,173) (849,672) (457,867)

At 31 March (7,291,892) (6,492,719) (5,643,047)

Less: Accumulated impairment loss (3,041,957) (3,041,957) (3,041,957)

Net carrying amount 5,349,662 6,148,835 6,998,507


70


6. INTANGIBLE ASSETS cont’d

i) Development costs cont’d

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 cash generating units and is based on the following key assumptions:-

i) cash flows are projected based on 3 (31.3.2012: 4, 1.4.2011: 5) years business plan; ii) revenue is projected at anticipated annual average revenue growth rate of 18% (31.3.2012: 46%,

1.4.2011: 62%) per annum; iii) expenses are projected at annual increase of approximately 10% (31.3.2012: 10%, 1.4.2011: 10%)

per annum; and iv) a pre-tax discount rate of 8% (31.3.2012: 8%, 1.4.2011: 8%) is applied in determining the recoverable

amount of the unit.

The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on both external sources and internal sources (historical data).

ii) Hotel application software

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Software cost 420,000 420,000 420,000

Less: Accumulated amortisation (420,000) (420,000) (252,000)

Net carrying amount - - 168,000

7. GOODWILL ON CONSOLIDATION

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

At beginning of financial year 9,781,233 - -

Arising from acquisition of subsidiary companies - 9,781,233 -

At 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 (31.3.2012: 5, 1.4.2011: Nil) years business plan;

ii) revenue was projected at anticipated annual revenue growth of approximately 5% (31.3.2012: 1% to 11%, 1.4.2011: Nil) per annum;

iii) expenses were projected at annual increase of approximately 5% (31.3.2012: 1% to 11%, 1.4.2011: Nil) per annum; and

iv) a pre-tax discount rate of 6.6% (31.3.2012: 8%, 1.4.2011: Nil) 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.


71


cont’d

8. INVENTORIES

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Trading goods 15,240,155 7,839,799 48,751

9. TRADE RECEIVABLES

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Trade receivables 67,124,108 38,718,499 3,238,276

Less: Allowance for impairment At 1 April (102,588) (105,509) (229,030)

Arising from acquisition of subsidiary companies - (94,428) -

Impairment loss recognised (77,059) - (105,509)

Impairment loss reversed 102,588 97,349 229,030

At 31 March (77,059) (102,588) (105,509)

67,047,049 38,615,911 3,132,767

Included in trade receivables is an amount of RM17,532,629 (31.3.2012: RM76,796, 1.4.2011: RM166,661) 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 (31.3.2012: 7 to 120 days, 1.4.2011: 30 to 90 days).

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables are as follows:-

Group GrossIndividually

impaired Net

31.3.2013 RM RM RM

Not past due 41,230,354 - 41,230,354

Past due 0 - 30 days 4,979,077 - 4,979,077

Past due 31 - 60 days 6,627,682 - 6,627,682

Past due more than 61 days 14,286,995 (77,059) 14,209,936

67,124,108 (77,059) 67,047,049


72


9. TRADE RECEIVABLES cont’d

Ageing analysis of trade receivables cont’d

GrossIndividually

impaired Net

31.3.2012 RM RM RM

Not past due 33,965,300 - 33,965,300

Past due 0 - 30 days 3,158,821 - 3,158,821

Past due 31 - 60 days 415,856 - 415,856

Past due more than 61 days 1,178,522 (102,588) 1,075,934

38,718,499 (102,588) 38,615,911

GrossIndividually

impaired Net

1.4.2011 RM RM RM

Not past due 2,077,357 - 2,077,357

Past due 0 - 30 days 70,381 - 70,381

Past due 31 - 60 days 119,867 - 119,867

Past due more than 61 days 970,671 (105,509) 865,162

3,238,276 (105,509) 3,132,767

The Group has trade receivables amounting to RM25,816,695 (31.3.2012: RM4,650,611, 1.4.2011: RM1,055,410) that are past due at the reporting date but not impaired. These relate to a number of independent customers for whom there is no record history to 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.


73


cont’d

10. OTHER RECEIVABLES

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Deposits 515,656 1,403,692 65,660

Prepayments 322,784 350,975 3,316

Tax recoverable - 20,000 20,000

Non-trade receivables 3,668,977 2,874,646 13,618

4,507,417 4,649,313 102,594

Company

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Deposits 578 - -

Prepayments 4,700 - -

5,278 - -

11. FIXED DEPOSITS WITH A LICENSED BANK

Group

The Group’s fixed deposits amounting to RM66,500 (31.3.2012: RM1,000,000, 1.4.2011: Nil) had been pledged to a licensed bank for a banking facility granted and earned interest at 3.20% (31.3.2012: 2.25%, 1.4.2011: Nil).

Company

Fixed deposits with a licensed bank earned interest at Nil (31.3.2012: 2.75% - 3.20%, 1.4.2011: 2.75%) per annum.


74


12. SHARE CAPITAL

Group and Company

Number of shares

31.3.2013 31.3.2012 1.4.2011

Authorised:-Ordinary shares of RM0.10 each

At beginning of financial year 1,000,000,000 250,000,000 250,000,000

Created during the financial year 1,000,000,000 750,000,000 -

At the end of financial year 2,000,000,000 1,000,000,000 250,000,000

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

At beginning of financial year 543,297,236 145,587,520 132,352,320

Issued during the financial year 36,551,600 397,709,716 13,235,200

At the end of financial year 579,848,836 543,297,236 145,587,520

Group and Company

Amount

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Authorised:-Ordinary shares of RM0.10 each


Created during the financial year 100,000,000 75,000,000 -


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


Issued during the financial year 3,655,160 39,770,972 1,323,520


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.


75


cont’d

13. RESERVES

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Non-distributable

Share premium 12,153,251 12,153,251 12,863,396

Merger deficit (7,900,000) (7,900,000) (7,900,000)

Warrant reserve 6,562,831 8,207,653 -

10,816,082 12,460,904 4,963,396

Distributable

Accumulated losses (11,378,716) (18,923,626) (7,510,582)

(562,634) (6,462,722) (2,547,186)

Company

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Non-distributable

Share premium 12,153,251 12,153,251 12,863,396

Warrant reserve 6,562,831 8,207,653 -

18,716,082 20,360,904 12,863,396

Distributable

Accumulated losses (15,715,858) (16,258,648) (7,024,722)

3,000,224 4,102,256 5,838,674

On 19 July 2011, the Company allotted and issued 243,189,716 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 (“Warrant 2011/2016”). Each Warrant 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 the 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 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 right 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 right issue which was completed on 22 July 2011.


76


14. BORROWINGS

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Current

Secured

Term loan 446,210 - -

Invoice financing 2,000,000 - -

2,446,210 - -

Non-current

Secured

Term loan 5,306,683 - -

7,752,893 - -

Repayment terms:

- not later than 1 year 2,446,210 - -

- between 1 to 2 years 481,329 - -

- between 2 to 5 years 1,683,364 - -

- later than 5 years 3,141,990 - -

7,752,893 - -

Term loan and invoice financing obtained bear interest at 7.60% and 10.10% per annum respectively (31.3.2012: Nil, 1.4.2011: Nil).

Term loan and invoice financing are secured by:

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.

The repayment terms of the term loan are over 120 monthly installment, by way of 120 equal monthly principal and interest installments of RM71,893 each upon full drawndown or 16 January 2013 whichever is earlier.


77


cont’d

15. HIRE PURCHASE CREDITORS

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Minimum lease payments

- within 1 year 42,312 48,934 -

- after 1 year but not later than 5 years 78,416 124,210 -

120,728 173,144 -

Less : Interest-in-suspense (12,536) (22,024) -

Present value of minimum lease payments 108,192 151,120 -

Present value of minimum lease payments

- within 1 year 35,490 42,711 -

- after 1 year but not later than 5 years 72,702 108,409 -

108,192 151,120 -

Hire purchase creditors bear interest ranging from 4.00% to 4.40% (31.3.2012: 4.00% to 4.40%, 1.4.2011: Nil) per annum.

16. DEFERRED TAXATION

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

At beginning of year 233,000 - 7,084

Transferred from/(to) statements of comprehensive income (Note 22) 34,000 - (7,084)

Arising from acquisition of subsidiary companies - 233,000 -

At end of year 267,000 233,000 -

The component of deferred tax liabilities is as follow:-

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Temporary differences in respect of carrying amount of property, plant and equipment in excess of their tax base 267,000 233,000 -


78


17. TRADE PAYABLES

Included in trade payables is an amount of RM3,093,379 (31.3.2012: Nil, 1.4.2011: Nil) due to companies in which a Director of the Company has interest.

The normal trade credit terms granted by the trade payables range from 30 to 90 days (31.3.2012: 30 to 90 days, 1.4.2011: 30 to 90 days).

18. OTHER PAYABLES

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Non-trade payables 1,500,254 2,008,724 31,711

Accrual of expenses 1,204,772 349,995 52,051

Advances received 1,238,133 4,308,969 -

3,943,159 6,667,688 83,762

Company

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Non-trade payables 81,425 15,103 1,140

Accrual of expenses 25,750 21,500 10,000

107,175 36,603 11,140

19. AMOUNT DUE TO DIRECTORS

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

20. REVENUE AND COST OF SALES

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 and returns.

Included in cost of sales of the Group is the amortisation of development cost during the financial year which amounted to RM799,173 (2012: RM1,017,672).


79


cont’d

21. PROFIT/(LOSS) BEFORE TAX

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

Group Company

2013 2012 2013 2012

RM RM RM RM

Allowance for impairment loss on receivables 77,059 102,588 - -

Inventories written down 84,504 - - -

Amortisation of intangible assets 799,173 1,017,672 - -

Auditors’ remuneration

- auditors of the Company 123,500 64,000 23,000 20,000

- other fees charged by auditors of the Company 32,000 125,500 - 121,500

Bad debts written off 114,690 70,503 - -

Depreciation 1,255,174 340,939 38 -

Directors’ remuneration

- fees 38,000 50,000 38,000 50,000

- other emoluments 662,866 528,529 41,000 64,900

Inventories written off - 31,354 - -

Property, plant and equipment written off 45,069 6,233 - -

Rental of premises 1,326,356 229,673 116,374 36,380

Rental of equipment 2,259 - - -

Realised foreign exchange (gain)/loss (125,706) 10,895 832 158

Interest expenses

- term loan 298,037 - - -

- invoice financing 39,582 - - -

- hire purchase 9,488 1,117 - -

- others - 20,000 - -

Allowance for impairment loss on receivables no longer required (102,588) (97,349) - -

Allowance for slow moving inventories no longer required - (32,033) - -

Bad debts recovered - (8,200) - -

Interest income (49,207) (38,787) (17,657) (38,779)

Gain on disposal of a subsidiary company (438) - - -

Gain on disposal of property, plant and equipment (1,096) (398) - -


80


21. PROFIT/(LOSS) BEFORE TAX cont’d

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

Group Company

2013 2012 2013 2012

RM RM RM RM

Executive:-

Fees 38,000 50,000 38,000 50,000

Salaries and other emoluments 596,370 483,251 41,000 64,900

Defined contribution plan 66,496 45,278 - -

700,866 578,529 79,000 114,900

22. TAX EXPENSE

Group Company

2013 2012 2013 2012

RM RM RM RM

Provision for the financial year 1,101,255 74,000 - -

Underprovision in prior financial year 27,864 - - -

Transferred to deferred taxation (Note 16) 34,000 - - -

1,163,119 74,000 - -

Malaysian income tax rate is calculated at the statutory tax rate of 25% (2012: 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 RM349,000 (2012: RM2,606,000) and RM8,883,000 (2012: RM11,677,000) respectively.

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


81


cont’d

22. TAX EXPENSE cont’d

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 Company

2013 2012 2013 2012

RM RM RM RM

Profit/(Loss) before tax 6,878,978 (3,131,391) (1,102,032) (1,026,273)

Taxation at Malaysian statutory tax rate 1,719,745 (782,848) (275,508) (256,569)

Tax effects in respect of:-

Expenses not deductible for tax purposes 550,700 453,348 275,508 256,569

Utilisation of capital allowances and tax losses not recognised in prior years (1,263,000) - - -

Underprovision in prior financial year

- tax expense 27,864 - - -

Underprovision in current financial year not recognised

- tax expense (25,190) - - -

- deferred tax (57,000) - - -

Deferred tax assets not recognised during the year 210,000 403,500 - -

Effective tax expense 1,163,119 74,000 - -

23. PROFIT/(LOSS) PER SHARE

23.1 Basic profit/(loss) per share

Basic profit/(loss) per share is calculated by dividing net profit/(loss) for the year attributable to ordinary shareholders of the Company over the weighted average number of ordinary shares in issue during the financial year as follows:-

Group

2013 2012

RM RM

Net profit/(loss) for the year attributable to ordinary shareholders of the Company 5,900,088 (3,205,391)

Weighted average number of ordinary shares in issue 563,437,775 335,350,244

Basic profit/(loss) per share (sen) 1.05 (0.96)


82


23. PROFIT/(LOSS) PER SHARE cont’d

23.2 Diluted profit/(loss) per share

For the purpose of calculating diluted profit/(loss) per share, 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.

Group

2013 2012

RM RM

Net profit/(loss) for the year attributable to ordinary shareholders of the Company 5,900,088 (3,205,391)

Weighted average number of ordinary shares in issue 563,437,775 335,350,244

Effect of potential warrants on issue 35,203,071 123,147,377

598,640,846 458,497,621

Diluted profit/(loss) per share (sen) 0.99 (0.70)

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. As at 31 March, the temporary differences for which no deferred tax assets have been recognised in the financial statements are as follows:-

Group

2013 2012

RM RM

Carrying amount of property, plant and equipment in excess of their tax base 747,000 754,000

Unabsorbed capital allowances (349,000) (2,606,000)

Unutilised tax losses (8,883,000) (11,677,000)

Development costs and others 5,307,000 6,140,000

(3,178,000) (7,389,000)

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.


83


cont’d

25. EMPLOYEES BENEFITS EXPENSES

Group Company

2013 2012 2013 2012

RM RM RM RM

Salaries 6,750,486 2,067,611 257,275 -

Defined contribution plans 844,358 271,380 31,312 -

Social security contributions 70,061 21,545 5,218 -

Other staff related expenses 900,531 409,645 92,574 24,186

8,565,436 2,770,181 386,379 24,186

26. RELATED PARTY DISCLOSURES

(a) The transactions of the Group and of the Company with the related parties which was entered into on a negotiated basis were as follows:-

Group Company

2013 2012 2013 2012

RM RM RM RM

Management fees charged by subsidiary company - - 20,520 114,000

Rental expenses paid to a companies in which a Director has interest 1,084,928 23,673 - -

Sales to companies in which a Director has interest 191,219,849 198,920 - -

Purchases from companies in which a Director has interest 72,461,615 - - -

Purchases of property, plant and equipment from companies in which a Director has interest 40,275 - - -

Services charged by companies in which a Director has interest 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 Notes 5, 9 and 17 to the Financial Statements.

27. CONTINGENT LIABILITIES

Company

As at 31 March 2013, the Company is contingently liable to the extent of RM65,030,000 (2012: RM54,000,000) in respect of corporate guarantees given to certain suppliers and a financial institution of a subsidiary company.


84


28. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(i) On 4 April 2012, the Company announced that Ingens Sdn Bhd, a wholly-owned subsidiary company of Vistavision Resources Sdn Bhd had entered into a Memorandum of Sales to acquire a freehold 3-storey warehouse building for a cash consideration of RM10,050,000.

The acquisition of the said building was completed on 30 April 2012.

(ii) On 13 June 2012, Ingens Sdn Bhd, a wholly-owned subsidiary company of Vistavision Resources Sdn Bhd, incorporated a 100% owned subsidiary company, Ingens Direct Sdn Bhd for a total cash subscription of RM2.

(iii) On 14 June 2012, DSS Distribution Sdn Bhd, a wholly-owned subsidiary company of Ingens Sdn Bhd,

incorporated a 60% owned subsidiary company, DSS Ikhlas Sdn Bhd for a total cash subscription of RM6.

(iv) On 1 August 2012, Ingens Sdn Bhd, a wholly-owned subsidiary company of Vistavision Resources Sdn Bhd, incorporated a 51% owned subsidiary company, Ninezte Sdn Bhd for a total cash subscription of RM51.

On 8 January 2013, Ingens Sdn Bhd disposed its entire shareholding of 51 ordinary shares of RM1 each to existing shareholder, Ninetology Marketing Sdn Bhd for a total cash consideration of RM1.

(v) On 16 August 2012, Vistavision Resources Sdn Bhd, a wholly-owned subsidiary company incorporated a 51% owned subsidiary company, Unified Synergy Sdn Bhd for a total cash subscription of RM51.

(vi) On 2 November 2012, Vistavision Resources Sdn Bhd, a wholly-owned subsidiary company increased its investment in its wholly-owned subsidiary company, Inconnecxion Communication Sdn Bhd from RM2 to RM1,000,000.

(vii) On 26 November 2012, Vistavision Resources Sdn Bhd, a wholly-owned subsidiary company incorporated a 100% owned subsidiary company, Ingens Commerce Sdn Bhd for a total cash subscription of RM2.

(viii) On 21 January 2013, Ingenuity Consolidated Berhad, incorporated a wholly-owned subsidiary company, DPEG Services Sdn Bhd for a total cash subscription of RM2.

29. SIGNIFICANT EVENTS AFTER THE FINANCIAL YEAR

(i) On 10 April 2013, the Company had issued 100,000,000 new ordinary shares of RM0.10 each via private placement at an issue price of RM0.10 per share for a total cash consideration of RM10,000,000 fully paid and that the new ordinary shares shall rank pari passu in all respects with the existing ordinary shares of the Company.

(ii) On 13 May 2013, the Company had issued 30,000,000 new ordinary shares of RM0.10 each via private placement at an issue price of RM0.10 per share for a total cash consideration of RM3,000,000 fully paid and that the new ordinary shares shall rank pari passu in all respects with the existing ordinary shares of the Company.

(iii) On 7 June 2013, the Company had issued 43,950,000 new ordinary shares of RM0.10 each via private placement at an issue price of RM0.11 per share for a total cash consideration of RM4,834,500 fully paid and that the new ordinary shares shall rank pari passu in all respects with the existing ordinary shares of the Company.


85


cont’d

30. SEGMENTAL REPORTING – GROUP

Management currently identifies the Group’s 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 retailers

Business Software Solutions - Enterprise and Hotel Management Solutions

Others - Investment holding and dormant

Transfer pricing between operating segments are on a negotiated basis and all other transactions with third parties are on an arm’s length basis.

Business segments

2013 NoteICT

distribution

Business Software

Solutions Others Elimination Consolidated

RM RM RM RM RM

Revenue:

External customers 541,253,911 12,331,136 - - 553,585,047

Inter company 9,829,228 - - (9,829,228) -

551,083,139 12,331,136 - (9,829,228) 553,585,047

Results:

Interest income 31,550 - 17,657 - 49,207

Finance cost (347,107) - - - (347,107)

Depreciation (865,131) (389,620) (423) - (1,255,174)

Tax expense (1,163,119) - - - (1,163,119)

Other non-cash expenses i (118,433) (899,474) - - (1,017,907)

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


86


30. SEGMENTAL REPORTING – GROUP cont’d

Business segments cont’d

2012 NoteICT

distribution

Business Software

Solutions Others Elimination Consolidated

RM RM RM RM RM

Revenue:

External customers 55,163,414 8,766,296 - - 63,929,710

Results:

Interest income 8 - 38,779 - 38,787

Finance cost (21,117) - - - (21,117)

Depreciation (23,756) (307,397) (9,786) - (340,939)

Tax expense (74,000) - - - (74,000)

Other non-cash expenses i - (1,098,968) - - (1,098,968)

Segment profit/ (loss) 120,682 (2,255,694) (1,070,379) - (3,205,391)

Assets:

Additions to non-current assets ii 91,366 745,891 420,760 - 1,258,017

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:-

2013 2012

RM RM

Allowance for impairment loss on receivables (77,059) (102,588)

Amortisation of intangible assets (799,173) (1,017,672)

Bad debts written off (114,690) (70,503)

Inventories written off - (31,354)

Inventories written down (84,504) -

Property, plant and equipment written off (45,069) (6,233)

Allowance for impairment loss on receivables no longer required 102,588 97,349

Allowance for slow moving inventories no longer required - 32,033

(1,017,907) 1,098,968

ii. Additions to non-current assets consist of:-

2013 2012

RM RM

Property, plant and equipment 16,195,817 1,258,017


87


cont’d

30. SEGMENTAL REPORTING – GROUP cont’d

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:-

2013 2012

RM RM

2 (2012: 3) customers 245,639,215 38,083,198

31. FINANCIAL INSTRUMENTS

Categories of Financial Instruments

The table below provides an analysis of financial instruments categorised as follows:

- Loans and receivables (L&R); and - Other liabilities measured at amortised cost (AC)

Group

Carrying amount L&R AC

RM RM RM

31.3.2013

Financial assets

Trade and other receivables 71,231,682 71,231,682 -

Fixed deposits with licensed banks 1,066,500 1,066,500 -

Cash and bank balances 5,131,050 5,131,050 -

77,429,232 77,429,232 -

Financial liabilities

Trade and other payables 58,915,020 - 58,915,020

Amount due to Directors 21,336 - 21,336

Borrowings 7,752,893 - 7,752,893

Hire purchase creditors 108,192 - 108,192

66,797,441 - 66,797,441


88


31. FINANCIAL INSTRUMENTS cont’d

Categories of Financial Instruments cont’d

Group cont’d


RM RM RM

31.3.2012

Financial assets


Fixed deposits with licensed banks 2,800,000 2,800,000 -

Cash and bank balances 15,500,237 15,500,237 -

61,214,486 61,214,486 -


Trade and other payables 35,510,876 - 35,510,876

Hire purchase creditors 151,120 - 151,120

35,661,996 - 35,661,996

1.4.2011

Financial assets


Fixed deposits with licensed banks 500,000 500,000 -

Cash and bank balances 499,920 499,920 -

4,231,965 4,231,965 -

Financial liability

Trade and other payables 271,008 - 271,008


89


cont’d


Categories of Financial Instruments cont’d

Company


RM RM RM

31.3.2013

Financial assets

Other receivables 578 578 -

Amount due from subsidiary companies 39,551,715 39,551,715 -


39,632,889 39,632,889 -


Other payables 107,175 - 107,175

Amount due to a subsidiary company 400,100 - 400,100

Amount due to Directors 21,336 - 21,336

528,611 - 528,611

31.3.2012

Financial assets


Fixed deposits with a licensed bank 1,800,000 1,800,000 -


36,592,757 36,592,757 -

Financial liability


1.4.2011

Financial assets


Fixed deposits with a licensed bank 500,000 500,000 -


13,984,752 13,984,752 -

Financial liability



90



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:-

31.1 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.

Financial assets that are neither past due nor impaired and either past due or impaired are disclosed in Note 9 to the Financial Statements.

In respect of trade receivables, the Group is exposed to significant credit risk exposure to a single counterparty in which 74% (31.3.2012: 64%, 1.4.2011: 89%) of trade receivables consists of 4 (31.3.2012: 1, 1.4.2011: 3) 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.


91


cont’d


Financial risk management cont’d

31.1 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 RM65,030,000 (31.3.2012: RM54,000,000, 1.4.2011: Nil) in respect of corporate guarantees given to certain suppliers and a financial institution 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 and hire purchase facility 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 a subsidiary company would default on repayment.

31.2 Liquidity and cash flow risks

Liquidity and cash flow risks are the risks that the Group and the Company will not be able to meet their financial obligations as they fall due, due to shortage of funds.

In managing their exposures to liquidity and cash flow risks 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.

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.


92




31.2 Liquidity and cash flow risks cont’d

The summary of the maturity profile based on the contractual undiscounted repayment obligations is as follow:

Group

Current Non-current

31.3.2013Less than 1

yearBetween 1 to 2 years

Between 2 to 5 years

Later than 5 years

RM RM RM RM

Non-derivative financial liabilities

Secured:

Borrowings 2,862,716 862,716 2,588,148 3,663,234

Hire purchase creditors 42,312 78,416 - -

2,905,028 941,132 2,588,148 3,663,234

Unsecured:

Trade payables 56,209,994 - - -

Other payables 3,943,159 - - -

Amount due to Directors 21,336 - - -

60,174,489 - - -

Total undiscounted financial liabilities 63,079,517 941,132 2,588,148 3,663,234

31.3.2012 1.4.2011

Current Non-current Current Non-current

Less than 1 year

After 1 year but not later than 5 years

Less than 1 year

After 1 year but not later than 5 years

RM RM RM RM


Secured:

Hire purchase creditors 48,934 124,210 - -

Unsecured:

Trade payables 33,152,157 - 187,246 -

Other payables 6,667,688 - 83,762 -

39,819,845 - 271,008 -

Total 39,868,779 124,210 271,008 -


93


cont’d



31.2 Liquidity and cash flow risks cont’d

Company

31.3.2013 31.3.2012 1.4.2011

Current

Less than 1 year

RM RM RM


Unsecured:

Other payables 107,175 36,603 11,140

Amount due to a subsidiary company 400,100 - -

Amount due to Directors 21,336 - -

528,611 36,603 11,140

31.3 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:-

Group

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Fixed rate instruments

Fixed deposits with a licensed bank 1,066,500 2,800,000 500,000

Hire purchase creditors 108,192 151,120 -

Floating rate instrument

Bank borrowings 7,752,893 - -


94




31.3 Interest rate risk cont’d

Company

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Fixed rate instrument

Fixed deposits with a licensed bank - 1,800,000 500,000

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.

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.

Profit for the year

RM RM

+0.5% -0.5%

Floating rate instrument

31.3.2013 (38,764) 38,764

31.4 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 currencies giving rise to this are primarily US Dollar (USD) and Chinese Yuan (CNY).

The Group’s exposures to foreign currency risk, based on carrying amounts as at the end of the reporting date were as follows:

31.3.2013 31.3.2012 1.4.2011

RM RM RM

Denominated in USD

Trade receivables - 266,884 -

Cash and bank balances 4,231 10,104 21,438

Trade payables (2,103,097) (792,114) -

Denominated in CNY

Trade payables - 33,706 -


95


cont’d



31.4 Foreign currency risk cont’d

Foreign currency sensitivity analysis:

The following table demonstrates the sensitivity of the Group’s profit/(loss) for the financial year to a reasonably possible changes in USD and CNY against the functional currency of the Group, with all other variables held constant:-

Profit/(Loss) for the year

31.3.2013 31.3.2012 1.4.2011

RM RM RM

USD/RM

- Strengthened 2% (31.3.2012: 2%, 1.4.2011: Nil) (41,977) (10,303) -

- Weakened 2% (31.3.2012: 2%, 1.4.2011: Nil) 41,977 10,303 -

CNY/RM

- Strengthened Nil (31.3.2012: 1%, 1.4.2011: Nil) - (674) -

- Weakened Nil (31.3.2012: 1% 1.4.2011: Nil) - 674 -

32. FAIR VALUES 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.

Fair value hierarchy

No fair value hierarchy is disclosed as the Group and the Company do not have financial instruments measured at fair value.

33. 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.

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.

96

Notes To The Financial Statements31 March 2013cont’d3131 MMararchch 2201013


96

34. 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 Company

2013 2012 2013 2012

RM RM RM RM

Accumulated losses of the Group and of the Company

- Realised loss (13,701,854) (21,402,304) (15,715,858) (16,258,648)

- Unrealised loss (267,000) (233,000) - -

(13,968,854) (21,635,304) (15,715,858) (16,258,648)

Consolidation adjustments 2,590,138 2,711,678 - -

(11,378,716) (18,923,626) (15,715,858) (16,258,648)

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.

The above disclosures were reviewed and approved by the Board of Directors in accordance with a resolution of the Directors passed on 25 July 2013.


97

List Of Property

Location Tenure Existing useDate of

AcquisitionApproximate

Land Area

ApproximateAge of

Building(Years)

Net Book Valueas at

31.3.2013(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

3.4.2012 51,419 sq ft 8 10,327,089


98

Analysis Of Shareholdingsas at 8th July 2013

Authorised Share Capital : RM200,000,000 divided into 2,000,000,000 ordinary shares of RM0.10 each.

Paid-up Share Capital : RM75,379,883.60 divided into 753,798,836 ordinary shares of RM0.10 each.

Class of Shares : Ordinary Shares of RM0.10 each fully paid

Voting Right : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS as per record of depositors as at 8th July 2013

Size of ShareholdingsNo. of

Shareholders Holdings Total Holdings

%

Less than 100 shares 9 473 0.00

100 to 1,000 shares 125 82,007 0.01

1,001 to 10,000 shares 821 5,653,900 0.75

10,001 to 100,000 shares 2,327 118,051,500 15.66

100,001 to less than 5% of issued shares 906 542,039,032 71.91

5% and above of issued shares 1 87,971,924 11.67

Total 4,189 753,798,836 100.00

SUBSTANTIAL SHAREHOLDERS as at 8th July 2013

Direct Interest Indirect Interest

Shareholders No. of Shares % No. of Shares %

Firstwide Success Sdn. Bhd. 87,971,924 11.67 - -

Chin Boon Long 25,476,232 3.38 87,971,924 (1) 11.67

Chan Swee Ying - - 113,448,156 (2) 15.05

Notes:-

(1) Deemed interested by virtue of his spouse (Chan Swee Ying) and his equity interests in Firstwide Success Sdn. Bhd. pursuant to section 6A of the Companies Act, 1965.

(2) Deemed interested by virtue of her spouse, Chin Boon Long’s substantial interest in the Company and her direct interest in

Firstwide Success Sdn. Bhd. pursuant to section 6A of the Companies Act, 1965.


99

Analysis Of Shareholdingsas at 8th July 2013

cont’d

DIRECTORS’ SHAREHOLDINGS as at 8th July 2013


Director No. of Shares % No. of Shares %

Chin Boon Long 25,476,232 3.38 87,971,924 (1) 11.67

Note:-


THIRTY (30) LARGEST SHAREHOLDERS as per record of depositors as at 8th July 2013

No. Shareholders No. of Shares %

1 JF APEX NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR FIRSTWIDE SUCCESS SDN BHD (MARGIN)

87,971,924 11.67

2 MALAYSIAN TRUSTEES BERHADLANDASAN SIMFONI SDN BHD

25,500,000 3.38

3 MAYBANK NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHIN BOON LONG

25,476,200 3.38

4 MALAYSIAN TRUSTEES BERHADTITANIUM HALLMARK SDN BHD

24,500,000 3.25

5 BU YAW SENG 20,490,000 2.72

6 JF APEX NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHIN BOON LONG (MARGIN)

14,000,000 1.86

7 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHIN BOON LONG (8099990)

11,965,232 1.59

8 CIMSEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR BONG SOO MAY (PENANG-CL)

9,652,000 1.28

9 ECML NOMINEES (TEMPATAN) SDN. BHDPLEDGED SECURITIES ACCOUNT FOR CHOW YING CHOON (001)

8,000,000 1.06

10 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR SMB RESOURCES SDN BHD

7,600,000 1.01

11 SONNY GEH SIM CHONG 6,580,000 0.87

12 TAN HOCK HUAT 6,000,000 0.80

13 CHEAH YIT WOON 5,100,000 0.68

14 LOH CHIEW HEOON 4,300,000 0.57

15 SIAH GIM SIEW 4,040,000 0.54


100

Analysis Of Shareholdingsas at 8th July 2013cont’d

THIRTY (30) LARGEST SHAREHOLDERS cont’d as per record of depositors as at 8th July 2013


16 KWONG SIEW HUAT 4,000,000 0.53

17 BU YAW SENG 3,900,000 0.52

18 SO TIAM HOK 3,380,000 0.45

19 LOH CHIEW HEOON 3,200,000 0.42

20 LEE CHAI ENG 3,100,000 0.41

21 TU YUEH FENG 3,000,000 0.40

22 HONG HUEI LENG 3,000,000 0.40

23 PUBLIC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR LEE YUEN HON (SRB/PMS)

3,000,000 0.40

24 MAYBANK SECURITIES NOMINEES (ASING) SDN BHDMAYBANK KIM ENG SECURITIES PTE LTD FOR AAB CAPITAL PTE LTD

3,000,000 0.40

25 WONG NGIE TIEN 2,680,000 0.36

26 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR LEE WAI SUM (CEB)

2,600,000 0.34

27 CIMSEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TAN PEY LING (PENANG-CL)

2,600,000 0.34

28 SOO KAU MOI 2,500,000 0.33

29 CHEW JEE SHENG 2,500,000 0.33

30 LING LU KUANG 2,460,000 0.33


101

Analysis Of Warrant Holdingsas at 8th July 2013

Issued Size : 182,392,287 warrantsExercise Period : 19 July 2011 to 18 July 2016Exercise Price : RM0.10 eachNo. of Warrant Holders : 1,172Warrants Exercised : 36,551,600

DISTRIBUTION OF WARRANT HOLDINGSas at 8th July 2013

Size of Warrant HoldingsNo. of

Warrantholders Holdings Total Holdings

%

Less than 100 warrant 4 237 Negligible

100 to 1,000 warrant 27 9,150 0.01

1,001 to 10,000 warrant 162 1,334,600 0.92

10,001 to 100,000 warrant 691 36,141,300 24.78

100,001 to less than 5% of issued warrant 288 108,355,400 74.30

5% and above of issued warrant 0 0 0.00

Total 1,172 145,840,687 100.00

SUBSTANTIAL WARRANTHOLDERS as at 8th July 2013 (Not applicable)

DIRECTORS’ WARRANTHOLDINGS as at 8th July 2013


Director No. of Warrants % No. of Warrants %

Chin Boon Long - - 62 Negligible

Note:-



102

Analysis Of Warrant Holdingsas at 8th July 2013cont’d

THIRTY (30) LARGEST WARRANTHOLDERS as at 8th July 2013


1 JOHARI BIN MOHAMED 4,300,000 2.95

2 ABDUL HANIFF BIN SULAIMAN 3,493,100 2.40

3 ADZIAN BIN ABU BAKAR 2,443,500 1.68

4 ANG WOUN-ENG 2,160,000 1.48

5 GOH KOK SIANG 2,000,000 1.37

6 BU YAW SENG 2,000,000 1.37

7 OOI YING HONG 1,700,000 1.17

8 TAN KIAN PING 1,500,000 1.03

9 SIM MUI KHEE 1,500,000 1.03

10 TAN SUN DE 1,500,000 1.03

11 YEAP EE HOON 1,500,000 1.03

12 LIM BOON SAN 1,500,000 1.03

13 CIMSEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TAN WA KONG (TAMING JAYA-CL)

1,400,000 0.96

14 KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TING HUA KIONG (ET)

1,280,400 0.88

15 LING LU KUANG 1,230,000 0.84

16 YEOH CHOO IMM 1,220,000 0.84

17 CHENG SWEE WAH 1,100,000 0.75

18 FOONG CHENG KEAT 1,025,000 0.70

19 MERVYN YAP HSIEN LEUNG 1,000,000 0.69

20 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR NG POH HWA (STF)

900,000 0.62

21 MICHAEL YAP CHEE SHEN 864,000 0.59

22 GOH TOH SOON 800,000 0.55

23 TAN SAY LING 800,000 0.55

24 HLIB NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHOW AH MING (CCTS)

800,000 0.55

25 TAN JEE KEAN 800,000 0.55

26 AMSEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHAN LAM SANG @ CHAN LAM

731,100 0.50

27 GARY TAN YOW HOO 700,000 0.48

28 TAN LI LI 700,000 0.48

29 CHAI YEW HIN 657,000 0.45

30 PUBLIC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR HII PUO ANN (E-BTL)

650,000 0.45


103

Notice Of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of the Company will be held at the Greens II, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 28th day of August 2013 at 9.30 a.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31st March 2013 together with the Reports of the Directors and Auditors thereon.

(Please refer to Note 1) 2. To approve the payment of Directors’ fees for the financial year ended 31st March

2013.

3. To re-elect the following Directors retiring in accordance with the Company’s Articles of Association:

i) Ng Kok Hok [Article 76(2)]ii) Tham Kah Yong [Article 76(2)]iii) Chin Boon Long [Article 76(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 as at the date of this Annual General Meting excluding and not limited to additional shares arising from the exercise of Warrants/Employees Share Option Scheme, 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.

(Ordinary Resolution 1)

(Ordinary Resolution 2)(Ordinary Resolution 3)(Ordinary Resolution 4)




104

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 6 August 2013 (“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.”

7. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE

COMPANY

“THAT the proposed amendments to the Articles of Association of the Company as set out in the Annexure A attached, be and is hereby approved and adopted AND THAT the Directors and the Secretary of the Company be and are hereby authorised to give effect to the said amendments.”

By Order of the Board

LIM SECK WAH (MAICSA 0799845)Company Secretary

Dated this 6th day of August 2013.Kuala Lumpur


(Special Resolution 1)


105

Notes:

1. The Agenda No.1 is meant for discussion only as the Company’s Articles of Association provides that the audited financial statements are to be laid in the general meeting and do not require a formal approval of shareholders. Hence, it is not put forward for voting.

2. For the purpose of determining a member who shall be entitled to attend, speak and vote at the Annual General Meeting, the Company shall be requesting the Record of Depositors as at 22 August 2013. Only a depositor whose name appears on the Record of Depositors as at 22 August 2013 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

3. A member entitled to attend and vote at the meeting is entitled to appoint up to two (2) proxies to attend and vote in his/her stead. A proxy needs not be a member of the Company.

4. Where a member appoints two (2) proxies to attend at the same meeting, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

5. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account.

6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

7. If the appointer is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of its attorney duly authorized.

8. The Form of Proxy must be deposited at the Company’s Registered Office at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

9. Explanatory notes on Special Business

9.1 Ordinary Resolution 6 - Authority under Section 132D of the Companies Act, 1965 for the Directors to issue shares

The Company wishes to renew the mandate on the authority to issue shares pursuant to Section 132D of the Companies Act 1965 at the Tenth AGM of the Company. A general mandate had been granted by the shareholders of the Company at the Ninth AGM of the Company held on 20 September 2012.

The previous mandate granted by the shareholders had not been utilised and hence no proceed was raised therefrom.

The purpose to seek the general mandate is to enable the Directors of the Company to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting as it would be both time and cost-consuming to organise a general meeting. This authority unless revoked or varied by the Company in general meeting, will expire at the next AGM. The proceeds raised from the general mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), working capital and/or acquisitions.

9.2 Ordinary Resolution 7 - Proposed Shareholders’ Mandate

The explanatory notes on Ordinary Resolution 7 are set out in the Circular to Shareholders dated 6 August 2013.

9.3 Special Resolution 1 - Proposed Amendments to the Articles of Association

The Special Resolution 1, if passed, will render the Company’s Articles of Association to be in line with the amendments to the ACE Market Listing Requirements of Bursa Securities.

Notice Of Annual General Meetingcont’d

106


106

Annexure A

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

ARTICLE NO. EXISTING PROVISION AMENDED PROVISION

Article 1 (New definition) “Exempt Authorised Nominee” means an authorised nominee as defined under the Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of the Central Depositories Act.

Article 66 Subject to any rights or restrictions for the time being attached to any class or classes of shares, at meetings of members or classes of members, a member of the Company shall be entitled to be present and to vote at any general meeting in respect of any share or shares of which he is the registered holder and upon which all calls due to the Company have been paid.

Subject to any special rights or restrictions as to voting attached to any class or classes of shares by or in accordance with these Articles, on a resolution to be decided on a show of hands, every person present who is a member or a member’s representative or proxy or by attorney shall have one vote and in the case of a poll every member present in person or by proxy or by attorney or other duly authorised representative shall have one vote for every share held by him.A proxy shall be entitled to vote on a show of hands on any question at any general meeting and the provision of section 149(1)(a) of the Act shall not apply to the Company.A proxy appointed to attend and vote at the meeting of the Company shall have the same rights as the member to speak at the meeting and there shall be no restriction as to the qualification of the proxy.

Article 71 (iii) Where a member of the Company is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least 1 but not more than two proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

Where a member of the Company is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one but not more than two proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.The appointment of two proxies in respect of any particular securities account shall be invalid unless the authorised nominee specifies the proportion of its shareholding to be represented by each proxy.

Article 71 (iv) (New provision) Where a Member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds. The appointment of two (2) or more proxies in respect of any particular Omnibus Account shall be invalid unless the Exempt Authorised Nominee specifies the proportion of its shareholding to be presented by each proxy.

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 (Formerly known as “Ingenuity Solutions Berhad”) hereby appoint the following person(s):-

Name of proxy, NRIC No. & Address No. of shares to be represented

1.

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 Tenth Annual General Meeting of the Company to be held at the Greens II, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 28th day of August 2013 at 9.30 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 Ng Kok Hok

Ordinary Resolution 3 - Re-election of Mr Tham Kah Yong

Ordinary Resolution 4 - Re-election of Mr Chin Boon Long

Ordinary Resolution 5 - Re-appointment of auditors

Ordinary Resolution 6 - Authority to issue shares

Ordinary Resolution 7 - Proposed Shareholders’ Mandate

Special Resolution 1 - Proposed amendments to the Company’s Articles of Association

(Please indicate with an “x” in the space provided above on how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his/her discretion).

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……………………………2013.

Signature/Common Seal of Shareholders* Strike out whichever is not desired.

Notes:-

1. For the purpose of determining a member who shall be entitled to attend, speak and vote at the Annual General Meeting, the Company shall be requesting the Record of Depositors as at 22 August 2013. Only a depositor whose name appears on the Record of Depositors as at 22 August 2013 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

2. A member entitled to attend and vote at the meeting is entitled to appoint up to two(2) proxies to attend and vote in his/her stead. A proxy needs not be a member of the Company.

3. Where a member appoints two(2) proxies to attend at the same meeting, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

4. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. If the appointer is a corporation, the Form of Proxy must be executed under its Common Seal or under the hand of its attorney duly authorized.7. The Form of Proxy must be deposited at the Company’s Registered Office at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan

Ismail, 50250 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

No. of ordinary shares held

INGENUITY CONSOLIDATED BERHAD (609423 V)

(Formerly known as “Ingenuity Solutions Berhad”)

AFFIXSTAMP

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The Company Secretary

INGENUITY CONSOLIDATED BERHAD (609423 V)(Formerly known as “Ingenuity Solutions Berhad”)

Level 15-2, Bangunan Faber Imperial Court,Jalan Sultan Ismail,50250 Kuala Lumpur

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