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www.m3tech.com.my

M3 Technologies (Asia) Berhad (482772-D)

HoldingSteadfast

ANNUAL REPORT 2013

Unit 708, Block APusat Dagangan Phileo Damansara 2Jalan 16/1146350 Petaling JayaSelangor Darul EhsanMalaysiaTel: +603 7955 0018Fax: +603 7955 8017

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Corporate Information

Corporate Structure

5 Years Financial Highlights

Directors’ Profile

Chairman’s Statement

Statement on Corporate Governance

Statement on Risk Management and Internal Control

Audit Committee Report

Statement of Directors’ Responsibilities

Additional Compliance Information

Financial Statements

Supplementary Information

List of Properties

Analysis of Shareholdings

Notice of Annual General Meeting

Proxy Form

Contents

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BOARD OF DIRECTORS

CHEW SHIN YONG, MARKExecutive Chairman

LIM SENG BOONManaging Director

LESTER RATNAKUMAR NEIL FRANCISExecutive Director cum Group Chief Operations Officer

MUHAMMAD NAGIB GOPAL BIN ABDULLAHIndependent Non-Executive Director

CHIN CHEE WINGIndependent Non-Executive Director

MARK WING KONG Independent Non-Executive Director

AUDIT COMMITTEE

MARK WING KONGChairman

MUHAMMAD NAGIB GOPAL BIN ABDULLAH

CHIN CHEE WING

NOMINATION COMMITTEE

MUHAMMAD NAGIB GOPAL BIN ABDULLAHChairman

MARK WING KONG

CHIN CHEE WING

REMUNERATION COMMITTEE

CHIN CHEE WINGChairman

LIM SENG BOON

MARK WING KONG

COMPANY SECRETARIES

Tea Sor Hua (MACS 01324)

Yong Yen Ling (MAICSA 7044771)

PRINCIPAL BANKER

Malayan Banking Berhad

AUDITORS

ECOVIS AHLChartered Accountants

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CORPORATE OFFICE

Unit 608, 707 & 1007, Block A, Pusat Dagangan Phileo Damansara II, Jalan 16/11, 46350 Petaling Jaya,

Selangor Darul Ehsan,Malaysia.

Tel : 603-7955 1101Fax : 603-7955 1103

HEAD OFFICE

Unit 708, Block A,Pusat Dagangan Phileo Damansara II,

Jalan 16/11,46350 Petaling Jaya,

Selangor Darul Ehsan,Malaysia.

Tel : 603-7955 0018Fax : 603-7955 8017

REGISTERED OFFICE

Third Floor, No.79 (Room A)Jalan SS 21/60, Damansara Utama,

47400 Petaling Jaya,Selangor Darul Ehsan,

Malaysia.Tel : 603-7728 4778Fax : 603-7722 3668

SHARE REGISTRAR

Securities Services (Holdings) Sdn. Bhd.Suite 18.05 MWE Plaza,No.8 Lebuh Farquhar,10200 Penang, Malaysia.Tel : 604-263 1966Fax : 604-262 8544

STOCK EXCHANGE

Bursa Malaysia Securities Berhad(ACE Market)

LISTINGStock Name: M3TECHStock Code: 0017

WEBSITEwww.m3tech.com.my

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Corporate Information Corporate Information (cont’d)

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Corporate Structure

100%M3 Mobile Technologies (S) Pte.Ltd.(Singapore)

M3 Technologies (Thailand) Co., Ltd.

Messaging Technologies (Hong Kong) Ltd.

M3 Technologies (Xiamen) Co., Ltd.(formerly known as AKN MessagingTechnologies (Xiamen) Co., Ltd.)

M3 Technologies(ShenZhen) Co., Ltd.

Way Way Innovation Co., Ltd.

M3 Technologies Middle East FZE

M3 Technologies Pakistan (Private) Limited

PT Surya Genta Perkasa (Indonesia)

M3 ASIA Sdn. Bhd.

M3 ONLINE Sdn. Bhd.

M3 Asia Distribution (S) Pte. Ltd.(Singapore)

M3 Interactive (S) Pte. Ltd.(Singapore)

70%

25%

100%

60%

80%

100%

M3Shoppe (Asia) Sdn. Bhd.100%

100%

60%

20%

95%

100%

M3 Interactive(ShenZhen) Co., Ltd.

100%

100%

100%

Virtue Partners International Limited(British Virgin Island)

100%

Corporate Structure

Revenue

2009 2010 2011

YEAR

2012 2013 2009 2010 2011

YEAR

2012 2013

2009 2010 2011 2012 2013

YEAR

2009 2010 2011 2012 2013

YEAR

Profit / (Loss) Before Tax

Paid-Up Share Capital Net Tangible Asset (NTA)

34,984

8,67

6

4,06

3

7,44

1

7,56

6

16,352

16,352

16,352

33,560

32,307

35,239

37,436

16,352 17,961

39,847

50,902 56,285

49,869

(6,250

)

(8000)

(6000)

(4000)

(2000)

0

2000

4000

6000

8000

10000

0

5000

10000

15000

20000

25000

30000

35000

40000

0

5000

10000

15000

20000

0

10000

20000

30000

40000

50000

60000

39,641

2009 2010 2011 2012 2013 RM’000 RM’000 RM’000 RM’000 RM’000

Turnover 34,984 39,847 50,902 56,285 49,869 Profit / (Loss) Before Tax 8,676 4,063 7,441 7,566 (6,250)Paid-up Share Capital 16,352 16,352 16,352 16,352 17,961 Net Tangible Asset (NTA) 33,560 32,307 35,239 37,436 39,641

5 Years Financial Highlights

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Lim Seng Boon, a Malaysian aged 56, is the Managing Director and founder of the Company. He was appointed to the Board on 11 June 1999. He is a member of the Remuneration Committee of the Company. He is also a major shareholder of the Company.

He possesses over 20 years of the experience in the computer/information technology industry, both locally and abroad. His experience ranges from computers to system integration, network implementation and the development of the business applications. In 1984, he established World Value Sdn. Bhd., a company dealing with computer hardware and systems integration.

He was also the key person responsible for the establishment of Multisoft Business Systems Sdn. Bhd., a company which has developed numerous business applications software focusing on the concept of messaging through the internet. He has established numerous ties with local and foreign corporations, namely Advox of Sweden, Infinite Technology of the USA, Microsoft Malaysia, EasyCall Malaysia and Celcom Berhad. He was solely responsible for the successful alliance between Advox’s technology in messaging and EasyCall pagers in January 1999.

Lim Seng BoonManaging Director

Chew Shin Yong, Mark Executive Chairman

From left to right: Chew Shin Yong, Mark | Lim Seng Boon

Directors’ Profile

Chew Shin Yong, Mark, a Singaporean aged 45, was appointed to the Board on 27 February 2008 as an Executive Director of the Company. On 26 August 2010, he was re-designated from an Executive Director to an Executive Chairman of the Company.

He graduated from Kingston University in the UK with a Bachelor of Science Degree in Computer Information Systems Design in 1996. He then obtained a Master’s Degree in Business Administration from the University of Surrey, also in the UK. In 1997, he joined Malahon Group of Companies in their stock-broking division as the Managing Director, and is a registered dealer with the Hong Kong Exchanges and the Securities and Futures Commission of Hong Kong. He currently sits on the Board of Malahon Group of Companies and is actively involved in the all aspects of the Group’s businesses, comprising mainly of stock-broking, finance, property and general investments.

He was also responsible for setting up the subsidiary, Messaging Technologies (H.K.) Limited and is involved in the daily operations.

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Lester Ratnakumar Neil Francis, a Malaysian aged 43, was appointed to the Board on 27 May 2008 as an Executive Director cum Group Chief Operations Officer. He graduated with a Bachelor of Applied Science Degree from Victoria University of Technology, Australia in 1992. Upon his return to Malaysia, he has been actively involved in the development of the local fitness industry and the management of health and fitness facilities.

He was previously the General Manager of Dataco (M) Sdn. Bhd., a leading, licensed Service Provider for Premium Rate Audiotex/Interactive Voice Response services. He was also actively involved in the TV production arm of Dataco, and acted as the Production Manager for all the company’s production efforts. He was at Dataco from 1997 - 1999 before he moved to M3 Technologies (Asia) Berhad upon its incorporation.

His main responsibilities as the Group Chief Operations Officer and Executive Director are to maximise the shareholder’s wealth, focusing on improving the Group’s operational efficiency, performance & business development strategies and charting the future growth and direction of the Group regionally.

His experience in the industry for the past 10 years has proven invaluable in the Group’s growth locally and regionally.

Mohammad Nagib Gopal Bin Abdullah, a Malaysian age 57, was appointed to the Board on 23 November 2011 an an Independent Non-Executive Director of the Company. He is the Chairman of the Nomination Committee and a member of the Audit Committee of the Company.

He is currently a General Partner of Ethos Capital Sdn Bhd and also responsible for all back office operations including governance, compliance and reporting.

From 2001 to 2006, he was a senior vice-president at Malaysian Venture Capital Management Bhd. He started his career in 1976 and has been attached with various companies including Ericsson Business Consulting Sdn. Bhd., TeamWorkz Technologies Sdn. Bhd., MCSB Systems Bhd. amongst others.

Lester Ratnakumar Neil Francis Executive Director cum Group Chief Operations Officer

Muhammad Nagib Gopal Bin AbdullahIndependent Non-Executive Director

From left to right: Lester Ratnakumar Neil Francis | Muhammad Nagib Gopal Bin Abdullah

Directors’ Profile Directors’ Profile (cont’d)

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Directors’ Profile (cont’d)

From left to right: Chin Chee Wing | Mark Wing Kong

Chin Chee WingIndependent Non-Executive Director

Mark Wing KongIndependent Non-Executive Director

Chin Chee Wing, a Malaysian age 57, was appointed to the Board on 2 February 2012 as an Independent Non-Executive Director of the Company. He is the Chairman of the Remuneration Committee and a member of both the Audit Committee and Nomination Committee of the Company.

He has more than 25 years in the ICT Industry, as Senior Manager of Acer Sales & Services, CEO/Managing Director of Wearnes Thakral Group and Chief Executive Officer/Managing Director of Epson Trading Malaysia. He has gained vast experience in the overall management and financial aspect of companies involved in the design, manufacturing, sales and distribution of IT related products.

During his working career, he has contributed significantly to the progress and achievement of the companies he have managed and in the process won many management awards. Notably, the most prestigious President Award from the President of Seiko Epson Inc., Japan.

He has also served a short stint as Chief Executive Officer in M-Mode Bhd. Prior to his retirement in 2011, he was the Group Chief Operating Officer in Pradonet Technology Sdn. Bhd., a company involved in the design and development of security, identification, payment and authentication devices.

Mark Wing Kong, a Malaysian age 54, was appointed to the Board on 2 February 2012 as an Independent Non-Executive Director of the Company. He is the Chairman of the Audit Committee and a member of both the Remuneration Committee and Nomination Committee of the Company. He is a member of the Malaysian Institute of Certified Public Accountants.

He was with Kassim Chan & Co. from 1980 to 1986 and subsequently as Operations Manager with Arab-Malaysian Securities Sdn Berhad from 1986 to 1988. From 1988 to 1997, he was with Arab-Malaysian Merchant Bank Berhad (now known as AmInvestment Bank Berhad) where he was General Manager, Corporate Finance at the time of resignation. Mr Mark is presently the Chief Executive Officer of LB Aluminium Berhad and an Independent Non-Executive Director of Oldtown Berhad.

Notes:

1. None of the Directors have family relationships with any other Directors and / or major shareholders of our Company except for Mr. Lim Seng Boon who is the spouse of Madam Goh Lee Lang, a major shareholder of the Company.

2. None of the above Directors have any personal interest in any business arrangement involving the Company except as disclosed in Note 27 of the Financial Statements on page 83 & 84 of this Annual Report.

3. None of our Directors have been convicted of any offences other than traffic offences in the past 10 years.

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Directors’ Profile (cont’d)

Dear Valued Stakeholders,

On behalf of the Board, I am pleased to present to you the Annual Report of the Group and Company for the financial

year ended 30 June, 2013.

“ “Chairman’s Statement

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REVIEW OF OPERATIONS AND FINANCIAL HIGHLIGHTS

For the financial year ended 30 June, 2013, the Group recorded revenue of RM50 million and a net loss after tax of RM7 million as compared to a revenue of RM56 million and a net profit after tax of RM5 million recorded in the previous financial year.

This financial year has indeed seen a lot of developments for the Group, as we further advance and refine the building blocks required to see our growth and evolution for years to come. The landscape within which we operate is changing quickly, and we are in the process of restructuring the Group so as to be able to navigate this terrain.

Part of this process involved the writing-off of goodwill amassed in the various acquisitions and mergers that we have made over the years, amounting to RM7 Million. This has not affected our cash flow, and operational results remain promising. In addition to the cleaning up of our balance sheet, numerous operational tools and controls have been devised, adapted, and introduced. The expected result is a return to profitability for the financial year ending 30 June 2014.

CORPORATE DEVELOPMENTS

Overall, the Group has worked hard in the past year to introduce more effective and detailed management skills and methodologies, beginning with a strategic alignment workshop that culminated in the formulation and adoption of a Vision Statement and detailed Mission Statements, which are:

Vision Statement

“To inspire and empower people through innovative lifestyle technology worldwide.”

Mission Statements

• Stay ahead by continuously enhancing and innovating lifestyle technology products, services, and solutions.

• Delight customers by providing exceptional quality and services at optimum value.

• Inspire passion for excellence by providing a fun, rewarding and transparent work environment.

• Actively explore and develop new geographical markets for growth

• Achieve maximum cost efficiency via prudent management of resources.

Apart from the above strategic alignment, the Group has also gone through a major restructuring of several of its subsidiaries, beginning with the segregation of different functions and responsibilities to dedicated staff, either from existing business unit, or to new hires. This increases the value of our human capital as each member of staff is more

focused on their individual tasks, as opposed to having their skills diluted to the point of inefficiency. Finally, we have adopted corporate tools such as the Google Groups to facilitate community communications resulting in more current and timely sharing of information.

The same trio of core businesses that we had previously identified, which is mobile value-added-services, online commerce, and distribution, remain the foundation of the Group.

M3 Technologies (Asia) Berhad (“M3TECH”) continues to develops and market services and solutions for clients ranging from corporations to small-and-medium enterprises. Our established name and familiarity in our industry serves to assist in both customer retention and acquisition. We continue to build on our programming teams’ experience to create applications for the growing Google Android and Apple iOS operating systems, and with such a large and diversified range of offerings, this broadens our reach and appeal in the marketplace to both old and new users alike.

M3 Online continues to maintain its online shopping websites and services, offering ever-increasing products into the market. However, the adoption of online shopping has been slower than expected, but this is countered in the interim by participation in industry fairs and exhibitions, which has also helped us to increase our visibility to focus inthe market that we are targeting. Established merchandising techniques nurtured by the Group allows us to follow market trends and project future trends with increasing accuracy.

M3 Asia continues to preserve and maintain close relationships with distributors and suppliers, whilst at the same time increasing their numbers within our umbrella. This is partly possible due to our strong relationships with manufacturers, such as our long-standing relationship with Maction Technologies of Taiwan (“Papago!” and “WayGo” brand of personal navigation devices and driving video recorders) and Sanho Corporation of the USA (“Hyper” brand of consumer electronic accessories), and newcomers such as Arkon Industries, also of the USA. Established in 1988, Arkon has been the dominant force in the OEM mobile mounting industry, and we hope to increase their strength worldwide by carrying their own-brand product line. Closer collaboration with distributors have also increased our sales and presence, the most notable of which is our combined sales and marketing efforts with Fotokem in Malaysia, an established retailer with over 40 outlets strategically spread throughout the country.

M3TECH had made the announcements on 20 April 2012, 30 April 2012, 2 May 2012, 21 May 2012, 29 June 2012, 2 November 2012 and 9 November 2012 in relation to the Proposed Private Placement of 16,096,000 new M3 Technologies (Asia) berhad’s shares issued pursuant to the Private Placement have been listed on the ACE Market of Bursa Malaysia Securities Berhad on 12 November 2012 and the Private Placement is deemed completed on the same date.

Chairman’s Statement (cont’d)

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During the financial year, M3TECH had proposed an acquisition of 23.993% equity interest in Fotokem Sdn Bhd for a total cash consideration of RM 5,998,438. M3TECH is satisfied with the outcome of the due diligence results and is in the progress of finalising the details terms and conditions of the agreements.

INDUSTRY TRENDS AND DEVELOPMENT

The mobile phone industry in which the Group has always been involved continues to grow, the result of which are consistent revenues from this area of the Group’s business. Increasingly intensive competition between handset makers provides explosive fuel for the continuing increase in mobile phone penetration. Google’s Android system currently dominates the marketplace with close to an 80% share of the global smartphone marketplace. The remaining 20% belongs of course to Apple and their iOS software. This benefits the Group as the persistent supply only serves to create its own associated demand, with the global mobile phone expanding at an average rate of 6% per annum, with high growth countries such as China and India in double-digit territory.

The consumer electronics industry is still relatively new in the Group’s history, but we are learning at a very fast and accelerative pace. In fact we have made significant inroads into the smartphone aftermarket accessory hemisphere, which in the year 2012 was worth an estimated US$20 billion worldwide, and expected to reach US$38 billion by the year 2017. Not only do we source and sell these types of accessories from third party vendors, but we also sell them under our own “WayWay” brand.

In the market for personal navigation devices (“PNDs”), the global PND industry has been reporting declines in sales, with a 15% drop in the year 2012 as compared to the previous year, due to free mapping services on smartphones and factory-installed vehicle systems. However, the Group remains competitive because the software provided by the above-mentioned competitive systems currently still do not have the detail that dedicated PNDs have. We still maintain higher map accuracy and currency due to our relationships with local and global mapping bodies, such as Maction Technologies of Taiwan and NNG of Hungary. We understand that this advantage will be short-lived, and therefore we have already moved into the next growth area, which has been driving video recorders (“DVRs”). We market a complete array of solutions at varying price points, from the middle to high end with our “Papago!” and “WayWay” brand DVRs.

FUTURE OUTLOOK

The overall global consumer electronics market is projected to continue its 7% per annum growth rate, and the Group fully intends to be an integral part of this market.

Having identified and established in the previous financial year the core business within which we operate, this past

financial year we have further identified and tuned each business unit to be more effective. We strongly believe that the bulk of the foundation work has indeed been completed, and with each business unit strategically aligned, communicating in a timely and efficient manner, with appropriate monitoring and controls in place, we will easily be able to accomplish the tasks that lie ahead of us.

Our retail presence throughout the South East Asian region is growing steadily, and this pace has increased after our restructuring efforts. With a combined population of over 310 million people, our efforts in Thailand and Indonesia will be enhanced, and we are confident that these two countries will provide significant input to our sales revenue.

CORPORATE SOCIAL RESPONSIBILITY

The Group views Corporate Social Responsibility as a continuing commitment by business to behave ethically and contribute to economic and social development while improving the quality of workforce, stakeholder’s value and the local community at large.

The Group has participated in various corporate events in support of various charities throughout the year and will continue to do so in the future.

DIVIDEND

There were no dividend payments during the year.

BOARD CHANGES

There were no changes to the Board of Directors for the financial year ended 30th June 2013.

APPRECIATION

On behalf of the Board of Directors, I wish to take this opportunity to extend my sincere gratitude and appreciation to members of our management team, as well as the staff for their hard work, commitment, and loyalty.

I also wish to record our gratitude and thanks to our customers, suppliers, business associates, bankers, government authorities, and most importantly, our shareholders for their continued support and confidence in the Company.

Chew Shin Yong, MarkExecutive Chairman

Chairman’s Statement (cont’d) Chairman’s Statement (cont’d)

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Statement on Corporate Governance

The Board of Directors (“Board”) of M3 Technologies (Asia) Berhad (“the Company”) is committed towards ensuring good corporate governance practices are implemented and maintained throughout the Company and its subsidiaries (“Group”) as a fundamental part of discharging its duties to enhance shareholders’ values consistent with the principles and best practices set out in the Malaysian Code on Corporate Governance 2012 (“the Code”). The Board supports the highest standards of corporate governance and the development of best practices for the Group

The Board recognizes that the practice of good corporate governance is fundamental in this era of globalization where corporate climate calls for enhancement of shareholders’ value, alongside safeguarding the interest of shareholders and stakeholders of the Company.

The Board is pleased to state and affirm the means and manner which the Group has applied the principles, and state the extent to which the Group has complied with the Best Practices of the Code during the financial year under the review.

A. THEBOARD

The Board is entrusted with the proper stewardship of the Company’s resources for the best interest of its shareholders and also to steer the Group towards achieving the maximum economic value possible. The members of the Board have extensive experience and expertise in a wide range of related and unrelated industries and have been selected based on their skills, knowledge and their ability to add strength to the leadership.

The Directors are equally accountable for the Company’s activities, strategy and financial performance. Particular attention is given to ensure that the strategies proposed by the Management of the Company are discussed and reviewed by the Board.

The Board has delegated certain responsibilities to other Board level committees to assist the Board in carrying out its duties and responsibilities. The Board delegates certain functions to the following Committees to assist in the execution of its responsibilities:

a. Audit Committee b. Nomination Committee c. Remuneration Committee

The role of the Board Committees is to advise and make recommendations to the Board. The Chairman of various committees provide a verbal report on the outcome of their committee meetings to the Board, and any further deliberation is made at the Board level, if required.

Each committee operates in accordance with written terms of reference approved by the Board. The Board appoints the members and Chairman of each Committee.

i. BoardCharter

A Board Charter was formalised on 27 May 2013 to set out the composition and balance, roles and responsibilities, operation and processes of the Board and is to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members.

A copy of the Board Charter is published in the corporate website of the Company at www.m3tech.com.my.

ii. CompositionandBalanceoftheBoard

The strength of the Board lies in the composition of its members, who has a wide range of expertise, extensive experience and diverse background in business, finance and technical knowledge.

The current Board has six (6) members comprising three (3) Executive Directors (including Mr. Chew Shin Yong, Mark who is the Executive Chairman) and three (3) Independent Non-Executive Directors. This composition complies with Rule 15.02 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) wherein it states that at least two (2) or one third (1/3) of the Board of Directors of a listed company, whichever is higher, are Independent Directors.

The profiles of the members of the Board are presented on Directors’ Profile section as set out in this Annual Report.

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Statement on Corporate Governance (cont’d)

A. THEBOARD(CONT’D)

iii. BoardResponsibilities

There is a clear separation of functions between the Board and management. The Managing Director and the Executive Directors have the responsibility to manage the day-to-day operations of the business, implementation of Board policies and making strategic decisions for the expansion of the business. The Non-Executive Directors contribute their expertise and experiences to give independent judgment to the Board on issues of strategy, performance and standards of conduct.

Mr. Chew Shin Yong, Mark is the Executive Chairman while Mr. Lim Seng Boon is the Managing Director (“MD”). There is a proper balance of power and authority on the Board, with clear division of responsibility between the Chairman and the MD. This delineation provides a good check and balance, with the Chairman being responsible for leadership of the Board, while the MD leads the management of the Group and has overall responsibility for the operating units and the implementation of the Board’s policies and decisions.

No individual or group of individuals dominates the Board’s decision-making. Together, the Directors possess the wide range of business, commercial and financial knowledge, expertise and skills essential in the management and direction of a corporation with regional presence.

The Board provides overall strategic direction and effective control of the Company. The Board has reserved appropriate strategic, financial and operational matters for its collective decision. Key matters, such as approval of annual financial budgets, acquisitions and disposals of material investment, material agreements, major capital expenditures, reviewing the adequacy and integrity of the Group’s internal control systems are reserved for the Board.

The presence of Non-Executive Directors ensures that views, consideration, judgment and discretion exercised by the Board in decision making remains objective and independent whilst assuring the interest of other parties such as minority shareholders are fully addressed and adequately protected as well as being accorded with due consideration.

iv. TheBoardMeetings

The Board meets at least four (4) times a year, with additional meetings to be convened whenever necessary.

The proceedings and resolutions passed at each Board Meeting are minuted and kept in the statutory minutes book at the registered office of the Company.

The Board met six (6) times during the financial year ended 30 June 2013.

Details of the Directors’ attendance at Board meetings are set out as follows:

Directors MeetingAttendance

Chew Shin Yong, Mark 6/6 Lim Seng Boon 6/6 Lester Ratnakumar Neil Francis 6/6 Muhammad Nagib Gopal Bin Abdullah 5/6 Chin Chee Wing 6/6 Mark Wing Kong 5/6

The Board is satisfied with the level of time commitment given by the Directors of the Company towards fulfilling their duties and responsibilities. This is evidenced by the attendance record of the Directors as set out herein above.

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Statement on Corporate Governance (cont’d)

A. THEBOARD(CONT’D)

v. SupplyofInformationtotheBoard

Prior to each Board meeting, notice of meetings, setting out the agenda and accompanied by the relevant Board reports and documents are provided to the Directors on a timely manner to allow the Directors to peruse, obtain additional information and where applicable, seek further clarification on the matters to be tabled at the meeting.

Directors have access to all information within the Company whether as full board or in their individual capacity, in furtherance of their duties. In addition, whenever independent professional advice is required by the Directors, outside experts may be engaged at the Company’s expense. Before incurring such professional fees, the Director concerned must consult with the Chairman, or with two (2) other Directors (one who is a Non-Executive Director). Such advice was not sought by any of the Directors for the financial year under review.

The Directors have unrestricted access to information from the management, the Company Secretary, the outsourced Internal Auditors as well as the External Auditors of the Group in furtherance of their duties.

vi. BoardCommittees

As appropriate or whenever required as provided by the Articles of Association, the Board has delegated certain responsibilities to the Board Committees, which operate within clearly defined terms of reference. The Board Committees are:-

a. AuditCommittee

The composition, terms of reference and a summary of the activities of the Audit Committee are set out separately in the Audit Committee Report as laid out in this Annual Report.

b. NominationCommittee

The Nomination Committee of the Company is responsible to oversee the selection and assessment of Directors. The committee’s responsibilities include assessing and making recommendations to the Board who will thereon assess the shortlisted candidates and arrive at a decision on the appointment of the Director.

In arriving at these recommendations, due consideration is given to the competencies, required mix of skills, expertise, experience and contribution that the proposed Director(s) shall bring to complement the Board.

The Nomination Committee of the Company comprises the following members:-

• Muhammad Nagib Gopal Bin Abdullah Chairman, Independent Non-Executive Director

• Mark Wing Kong Member, Independent Non-Executive Director

• Chin Chee Wing Member, Independent Non-Executive Director

The Nomination Committee meets as and when required. The Nomination Committee met once during the financial period under review.

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Statement on Corporate Governance (cont’d)

A. THEBOARD(CONT’D)

vi. BoardCommittees(cont’d)

b. NominationCommittee(cont’d)

During the meeting held in November 2012, the Nomination Committee had undertaken the following activities:

• The Nomination Committee evaluated the balance of skills, knowledge and experience of the Board and, in the light of this evaluation, reviewed the role of the Executive Chairman and MD respectively, to ensure balance of power and authority, and a clear division of responsibilities as the head of the Company.

• The Nomination Committee, collectively carried out the assessment and rating of each Director’s performances against the criteria as set out in the annual assessment form. The performance of Non-Executive Directors was also carefully considered, including whether he could devote sufficient time to the role.

c. RemunerationCommittee

The Remuneration Committee is principally responsible for assessing and reviewing the remuneration packages of the MD and Executive Directors and subsequently furnishes their recommendations to the Board for adoption.

The members of the Remuneration Committee comprise the followings:-

• Chin Chee Wing Chairman, Independent Non-Executive Director

• Mark Wing Kong Member, Independent Non-Executive Director

• Lim Seng Boon Member, Managing Director

vii. AppointmentsoftheBoardandRe-election

The members of the Board are appointed in a formal and transparent practice as endorsed by the Code. The Nomination Committee is responsible for making recommendation for appointments to the Board. In discharging this duty, the Nomination Committee will assess the suitability of an individual to be appointed to the Board by taking into account the individual’s skill, knowledge, expertise, experience, professionalism, integrity and/or other commitments.

In accordance with the Company’s Articles of Association, at least one third of the Directors shall retire at the Annual General Meeting (“AGM”), and be eligible for re-election provided that all Directors shall retire at least once in every three (3) years.

Directors who are appointed by the Board in the course of the year shall be subject to re-election at the next AGM to be held following their appointment.

Directors who are over seventy (70) years of age are required to submit themselves for annual re-appointment in accordance with Section 129(6) of the Companies Act, 1966.

viii. TenureofIndependentDirector

The tenure of an Independent Director shall not exceed a cumulative term of nine years. However, upon completion of the nine years, the Independent Director may continue to serve the Board subject to the Director’s re-designation as a Non-Independent Director. In the event the Director is to remain designated as an Independent Director, the Board shall first justify and obtain shareholders’ approval on a year to year basis.

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Statement on Corporate Governance (cont’d)

A. THEBOARD(CONT’D)

ix. EvaluationoftheDirectorsandtheBoard’sasawhole

The Board recognises the importance of assessing the effectiveness of individual Directors, the Board as a whole and its Board Committees. The Nomination Committee is given the task to review and evaluate the individual Director’s performance and the effectiveness of the Board and the Board Committees on an annual basis. In assessing suitability of candidates, considerations will be given to the competencies, commitment, contribution and performance.

The Nomination Committee is required to report annually to the Board an assessment of the Board’s and the Board Committees’ performance. This will be discussed with the full Board. Every year, the Nomination Committee will evaluate each individual Director’s contributions to the effectiveness of the Board and the relevant Board Committees.

x. BoardDiversityPolicy

The Board acknowledges the need for gender diversity for good governance practices and to enhance the efficient functioning of the Board. The Board believes the appointment of a new member is guided by the skills, experiences, competency and knowledge of the individual candidate and it shall review any potential candidate wherever reasonably possible.

xi. Directors’Training

All Directors of the Company have attended and successfully completed the Mandatory Accreditation Programme (“MAP”) as required by Bursa Securities.

In addition to the MAP, the Directors are encouraged to attend relevant seminars and training programmes to equip themselves with the knowledge to effectively discharge their duties as Directors. The Board will assess the training needs of the Directors and ensure Directors have access to continuing education programme.

Seminars and conference attended by the Directors during the financial year ended 30 June 2013 are as follows:

Directors Programmesattended

Chew Shin Yong, Mark Creating Strategic Focus & Alignment

Lim Seng Boon Creating Strategic Focus & Alignment

Lester Ratnakumar Neil Francis Creating Strategic Focus & Alignment

Mark Wing Kong Listing requirements of Bursa Malaysia Securities Bhd- Malaysian Code on Corporate Governance 2012 and Improving Financial Governance:synergizing to accelerate corporate performance and business success.

Mark Wing Kong Maybank Global Markets Economic Talk – Currency war at our doorstep?

Mark Wing Kong Ambank KL Economic Seminar- Managing Change- Poised for a turnaround

Mark Wing Kong Bursa Malaysia- Advocacy Session on Corporate Disclosure for Directors.

Save as disclosed above, other Directors were not able to attend any trainings during this financial year due to busy schedule and overseas travelling. However, they have kept themselves abreast on financial and business matters through readings to enable them to contribute to the Board.

The Directors will continue to attend other relevant training programmes as appropriate to enhance their skills and knowledge.

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Statement on Corporate Governance (cont’d)

B. DIRECTORS’REMUNERATION

i. RemunerationPolicyandProcedures

The Remuneration Committee recommends to the Board the remuneration framework and remuneration package of the Managing Director and Executive Directors of the Company. The level of remuneration reflects the experience, responsibilities, contribution and performance by each individual Director.

The Board recognises that levels of remuneration must be sufficient to attract, retain and motivate the Directors of the quality required to manage the business of the Company and to align the interest of the Directors with those of the shareholders.

The determination of the fees of the Non-Executive Directors is decided by the Board as a whole. Non-executive Directors will be paid a basic fee as ordinary remuneration and will be paid a sum based on their responsibilities in committees and the Board, their attendance and/or special skills and expertise they bring to the Board. The fee shall be fixed in sum and not by a commission on or percentage of profits or turnover.

Each individual Director shall abstain from the deliberation and voting on his own remuneration/fee.

ii. Directors’Remuneration

The Board is of the view that the disclosure of remuneration by appropriate components and bands are sufficient to meet the objectives set out in the ACE Market Listing Requirements of Bursa Securities.

The remuneration of the Directors for the financial year under review is as follows:

Defined contribution planand Salaryand social other security emoluments Fee contributions Total RM’000 RM’000 RM’000 RM’000

Executive Directors 932 - 108 1,040 Non-Executive Directors - 151 * - 151

Total 932 151 108 1,191

The Directors, whose remuneration falls within the following bands are as follows:

Range Executive Non-Executive

Below RM 50,000 - 5* RM 50,001 - RM100,000 1 RM400,001- RM450,000 1 RM500,001- RM550,000 1

* Include 2 Directors who have resigned.

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Statement on Corporate Governance (cont’d)

C. SHAREHOLDERSANDINVESTORSRELATIONS

The Group values the importance of dialogue between the Group and its investors in order to provide them with the clearest and most complete picture of the Group’s performance and financial position. The Group communicates with its shareholders and investors primarily through its AGM, Annual Report, Quarterly Financial Statements, Research Reports and the various announcements made to Bursa Securities. The Company’s corporate website at www.m3tech.com.my serves as one of the most convenient ways for shareholders and members of the public to gain access to corporate information, news and events relating to the Group.

The Board will ensure that the general meetings of the Company are conducted in an efficient manner and serve as a mode in shareholders communications. These include the supply of comprehensive and timely information to shareholders and the encouragement of active participation at the General Meetings.

The AGM remains as a principal forum used by the Company for communication with its shareholders. At the AGM, the shareholders are encouraged to participate and to raise questions on the resolutions proposed and the Group’s operations in general.

D. ACCOUNTABILITYANDAUDIT

i. FinancialReporting

The Board has overall responsibility for the quality and completeness of the financial statements of the Company and the Group, both quarterly and year-end, and has a duty to ensure that those financial statements are prepared based on appropriate and consistently applied accounting policies, supported by reasonably prudent judgment and estimates and in accordance to the applicable financial reporting standards.

In presenting the annual financial statements and quarterly unaudited results, the Board aims to present a fair assessment of the Group’s position and prospects to the shareholders. The Audit Committee assists the Board in scrutinizing information for disclosure to ensure accuracy, adequacy and completeness.

ii. InternalControlandRiskManagement

The Board acknowledges their responsibility in maintaining an internal control system that provides reasonable assurance of effective and efficient operations, and compliance with laws and regulations as well as internal procedures and guidelines.

Management is responsible for implementing the processes for identifying, evaluating, monitoring and reporting of risks and internal control, taking appropriate and timely corrective actions as needed, and for providing assurance to the board that the processes have been carried out.

The Audit Committee has been entrusted by the Board to ensure effectiveness of the Group’s internal control systems. The activities of the outsourced Internal Auditors are reported regularly to the Audit Committee which provides the Board with the required assurance in relation to the adequacy and integrity of the Group’s system of internal controls.

iii. RelationshipwithAuditors

The Group has established a transparent and appropriate relationship with the Internal Auditors and External Auditors. Such relationship allows the Group to seek professional advice on matters relating to compliance and corporate governance. The internal audit function of the Group is outsourced to a third party. Similar to the External Auditors, Internal Auditors too have direct reporting access to the Audit Committee to ensure that issues highlighted are addressed independently, objectively and impartially without any undue influence of the management.

The Audit Committee of the Company undertakes an annual review of the independence of the External Auditors. Having assessed their performance, the Audit Committee will make its recommendation to the Board, upon which the shareholders’ approval will be sought at the AGM of the Company.

E. STATEMENTOFCOMPLIANCEWITHTHEBESTPRACTICESOFTHECODE

The Company is committed to achieving high standards of corporate governance throughout the Group and to the highest level of integrity and ethical standards in all its business dealings. Apart from the above disclosure, the Board considers that it has complied throughout the financial year with the Best Practices as set out in the Code.

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Statement on Risk Management and Internal Control

Introduction

This Statement on Risk Management and Internal control is made pursuant to Rule 15.26(b) of ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“Listing Requirements”). The Board of Directors (“the Board”) is pleased to provide this statement which has been prepared in accordance with the “Statement on Risk Management & Internal Control: Guidelines for Directors of Public Listed Companies”. It outlines the key elements of the risk management and internal control systems within the Group for the current financial year.

BoardofDirector’sResponsibility

The Board acknowledges its responsibility for the Group’s systems of risk management and internal control and the need to review its adequacy and integrity regularly. The Group planned to establish a risk management framework to enhance its internal control by identifying, evaluating and managing significant risks faced by the Group. However, such a system is designed to manage rather than eliminate the risk of failure to achieve the Group’s objectives and the system by its nature can only provide reasonable but not absolute assurance against material misstatement, fraud or loss.

InternalAudit

The Group has outsourced its internal audit function to CGRM Infocomm Sdn Bhd (“CGRM”). CGRM is an independent professional firm which supports the Audit Committee, and by extension, the Board, by providing an independent assurance on the effectiveness of the Group’s systems of internal control.

During the year under review, CGRM assessed the adequacy and effectiveness of the Group’s key business areas in terms of risk assessment and system of internal control. CGRM reports to the Audit Committee who in turn reports to the Board on its activities, significant audit results or findings and the necessary recommendations or actions needed to be taken by the Management to rectify highlighted issues.

In the planning and throughout the course of their audit work, CGRM made reference to the guidelines of The International Professional Practices Framework; International Standards for the Professional Practice of Internal Auditing and Code of Ethics as well as the Group’s policies.

KeyElementsofInternalControl

In order to achieve a sound control environment, the key elements of the Group’s internal control systems are identified as follows:-

1. Control Environment

• There are clear organization structure, reporting lines and responsibilities with adequate segregation of duties to ensure smooth day-to-day operations.

• The Group Financial Controller is supported by the Corporate Planning Manager and Group Finance Manager. The Group Financial Controller had a direct reporting line to the Executive Director cum Group Chief Operations Officer.

• The Accounting and Finance and functions of all subsidiaries are sufficiently resourced to provide proper accounting and financial reporting support to the holding company.

• During the financial year, the Finance Department has continuously update the Standard Operating Policies and Procedures (“SOPP”).

• The Front End Business System (“FEBS”) is being used to track and record all transactions and movements relating to inventory whereas a separate accounting system is used to record all accounting transactions, to generate invoices / billings and accounting and financial reports.

2. Risk Assessment

• The Group adopted the practice of having two separate bank accounts with different authorised signatories for receiving and disbursing funds across the subsidiaries of the Group.

• Agreements are executed between subsidiaries of the Group with vendors and customers to ensure all agreed terms and conditions are documented for reference.

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Statement on Risk Management and Internal Control (cont’d)

KeyElementsofInternalControl(cont’d)

3. Control Activities

• Individual subsidiaries submit cash flow projections for the following month’s budgeted expenses for review by the Corporate Planning Manager and Group Financial Controller and Managing Director approval prior to effecting fund transfers to the designated bank account for expenditure disbursements.

• Documented procedures exist for procurement and purchasing of fixed assets and consumables. • Approved price lists are provided to sales personnel with a copy to Finance for record. This ensured that pricing

cannot be changed without Management’s approval. • Periodic, independent stock checks are conducted to verify physical stock to stock records. • Segregation of duties is in place between ordering and receiving function performed by different personnel. • In September 2012, the Group Finance Manager introduced the Financial Report Package (“FRP”) for Monthly

Management Reporting and required a declaration by the Head of Subsidiary or General Manager to confirm that the reports in the FRP have been reviewed by them to achieve accuracy, completeness and timeliness in the Group Financial Reporting

4. Information and Communication

• Management meetings are held on a weekly basis. All issues discussed will be uploaded to the Task Management software which is equivalent to meeting minutes. Persons in charge of their respective issues are required to update the status of action taken or followed through upon rectification or resolution.

• The Executive Director cum Group Chief Operations Officer held weekly video-conference with Heads of Subsidiary or General Manager for operational updates.

• Subsidiaries are required to submit (via email) weekly and monthly updates on sales and revenue performance such as Global Positioning System sales status against target and provision of mobile solution services forecasted monthly profit-after-tax to the Executive Director cum Group Chief Operations Officer.

5. Monitoring

• The M3 Budgetary Panel which was developed by M3 Tech is an online monitoring system for cash flow budget, as well as performance review for subsidiaries by comparing actual performance against budget.

• The Executive Director cum Group Chief Operations Officer updated the Board of Directors on the Group’s financial results by comparing the current quarter results against the corresponding budgeted quarter; and to actual results of previous year’s quarter.

Conclusion

Several internal control improvements and risk areas were identified by internal auditors during the financial year ended 30 June 2013. These were reviewed by the Audit Committee and Board and then were closely monitored by Management to ensure the integrity of internal controls and minimisation of risks. The Management will continue to take adequate measures to strengthen the control environment in which the Group operates.

The Board is committed to an effective internal control system and is of the view that there is a continuous process in evaluating and managing significant risks faced by the Group and the underlying controls to mitigate these risks. The Board will take cognizance of the continuous process for identifying, evaluating and managing the significant risks face by the Company.

The Board has received assurances from the Managing Director and Group Financial Controller that the Group’s risk management and internal control systems are operating adequately and effectively in all material aspects for the financial year under review.

Based on the foregoing, the Board is of the opinion that the system of internal control and risk management processes are adequate to provide reasonable assurance in safeguarding shareholders’ investments, the Group’s assets and other stakeholders’ interest. There was no major internal control weaknesses identified that may result in any material loss or uncertainties for the financial year 30 June 2013 that would require disclosure in this annual report.

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Statement on Risk Management and Internal Control (cont’d)

ReviewbyExternalAuditors

As required under Rule 15.23 of the Listing Requirements, the External Auditors have reviewed this Statement on Risk Management and Internal Control. Their review was performed in accordance with the Recommended Practice Guide (“RPG”) 5 issued by the Malaysian Institute of Accountants. RPG 5 does not require the External Auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control systems of the Group. Based on their review, the External Auditor have reported to the Board that nothing has come to their attention that causes them to believe that the Statement is inconsistent with their understanding of the process adopted by the Board in the review of the adequacy and integrity of internal control of the Group.

This Statement on Risk Management and Internal Control is made in accordance with the resolution of the Board dated 28 October 2013.

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Audit Committee Report

The Audit Committee (“the Committee”) of the Company was established by the Board of Directors (“Board”) of M3 Technologies (Asia) Berhad (“the Company”) with the primary objective to assist the Board in fulfilling its fiduciary responsibilities relating to corporate governance, system of internal controls, risk management processes and management and financial reporting practices of the Group.

COMPOSITION

The current members of the Committee are as follows:

Chairman DesignationMark Wing Kong Independent Non-Executive Director

MembersMuhammad Nagib Gopal Bin Abdullah Independent Non-Executive DirectorChin Chee Wing Independent Non-Executive Director

SUMMARYOFTERMSOFREFERENCE

Composition

1. The Committee shall be appointed by the Board from among its members and shall comprise not less than three (3) members, whereby all members must be Non-Executive Directors, with a majority of them being Independent Directors and at least one (1) member of the Committee:-

a. must be a member of the Malaysian Institute of Accountants; or

b. if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and:-

(i) he must have passed the examinations 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. fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad (“Bursa Securities”).

2. Alternate Director shall not be appointed as a member of the Committee.

3. If a member of the Audit Committee resigns, retires, dies or for any other reason ceases to be a member which resulting in the non-compliance with point 1 above, the Board shall fill the vacancy within three (3) months.

4. The Board shall review the term of office and performance of the Committee and each member at least once every three (3) years.

Meetingsandattendance

1. Meetings shall be held not less than four (4) times a year. However, additional meetings may be called at anytime depending on the scope of activities of the Committee. In the event issues requiring the Committee’s decision arise between meetings, such issues may be resolved through circular resolutions of the Committee. Such circular resolution in writing shall be valid and effectual if it is signed or approved by letter, facsimile or any electronic means by all members of the Committee.

2. Other Board members, senior management, internal and external auditors may be invited to attend meetings.

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Audit Committee Report (cont’d)

SUMMARYOFTERMSOFREFERENCE(CONT’D)

Functions

The functions of the Committee are as follows:-

1. To consider any matters concerning the appointment and re-appointment, the audit fee and any questions of resignation or dismissal of external auditors; and further ensure the suitability and independence of external auditors.

2. To review with the external auditors:-

a. Their audit plan, scope and nature of the audit of the Group;

b. Their evaluation and findings of the system of internal controls; and the audit reports on the financial statements;

c. The management letter and management’s response with regard to problems and reservations arising from their audits;

d. The assistance given by the management and staff of the Group to the external auditors; and

e. Any other matters that the external auditors may wish to discuss (in the absence of management where necessary).

3. To review and assess the adequacy of the scope, functions, competency and performance of the internal audit functions of which the internal auditors should report directly to the Committee. The internal auditors must be independent, objective assurance and must have the relevant qualification and be responsible for providing assurance to the Committee that the internal control is operating effectively.

In addition, the role of the internal auditors, amongst others, shall cover the following areas:

a. To evaluate the effectiveness of the governance, risk management and internal control framework and facilitates enhancement, where appropriate;

b. To conduct regular reviews and appraisals of the effectiveness of the governance, risk management and internal control processes within the Group;

c. To assess and report to the Committee as to whether risks, which may hinder the Group from achieving its objectives, are being adequately evaluated, managed and controlled; and

d. To carry out their functions according to the standards set by recognized professional bodies.

4. To review the adequacy and effectiveness of the Group’s internal control systems and risk management framework as evaluated, identified and reported by the management, internal or external auditors as well as to review the appropriate and timely corrective actions undertaken to rectify the same.

The responsibilities of management in respect of risk management should include:

a. To identify the risks relevant to the businesses of the Group and the achievement of objectives and strategies;

b. To design, implement and monitor the risk management framework in accordance with the Group’s strategic vision and overall risk appetite; and

c. To identify changes to risk or emerging risks, take actions as appropriate, and promptly bring these to the attention of the Committee/Board.

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Audit Committee Report (cont’d)

SUMMARYOFTERMSOFREFERENCE(CONT’D)

Functions(cont’d)

5. To review the quarterly and year end financial statements of the Group, focusing particularly on any changes in or implementation of major accounting policies and practices, significant adjustments arising from the audit, the going concern assumption and compliance with applicable approved accounting standards and other legal and regulatory requirements.

6. To review any related party transactions and conflicts of interest situations that may arise within the Company or Group including any transactions, procedures or course of conduct that raises questions of management integrity.

7. To carry out such other functions or assignments as may be delegated by the Board from time to time.

Authority

The Committee is authorised by the Board to investigate any activity within its term of reference at the cost of the Company:-

1. To secure full and unrestricted access to any information pertaining to the Company and its subsidiaries;

2. To communicate directly with the external and internal auditors and all employees of the Group;

3. To seek and obtain independent professional advice and to secure the attendance of outsiders with relevant experience and expertise as it considers necessary; and

4. To convene meetings with the external and internal auditors or both excluding the attendance of other directors and employees of the company, whenever deemed necessary.

CommunicationtotheBoard

1. The minutes of each Committee meeting shall be tabled to the Board for notation.

2. The Committee may from time to time submit to the Board its recommendation on matters within its purview, for the Board’s decision.

3. Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Securities, the Committee must promptly report such matter to Bursa Securities.

MEETINGSANDATTEDANCE

During the financial year under review, the Committee held a total of five (5) meetings. Details of attendance of the Committee members are as follows:-

CommitteeMembers MeetingAttendance

Mark Wing Kong 4/5Muhammad Nagib Gopal Bin Abdullah 4/5Chin Chee Wing 5/5

The Company’s other Board members, internal auditor, external auditors, and certain senior management staff had attended the meetings at the invitation of the Chairman of the Committee.

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Audit Committee Report (cont’d)

SUMMARYOFACTIVITIESDURINGTHEFINANCIALYEAR

The Committee had carried out the following activities during the meetings in discharging their duties and responsibilities:

1. Reviewed the quarterly financial results and annual audited financial statements of the Company including the announcements pertaining thereto, before recommending to the Board for their approval and release of the Group’s results to Bursa Securities.

2. Reviewed with external auditors on their audit planning memorandum on the statutory audit of the Group for the financial year ended 30 June 2013.

3. Reviewed with external auditors on the results and issues arising from their audit of the financial year end statements and their resolutions of such issues highlighted in their report to the Committee.

4. Reviewed with the outsourced internal auditors, the internal audit plan to ensure principal risk areas are adequately covered in the audit plan.

5. Reviewed the results of the internal audit process to ensure that the recommendations made by the outsourced internal auditors and corrective actions taken by management are adequately addressed on a timely basis.

6. Reviewed related party transactions, if any, for compliance with the ACE Market Listing Requirements of Bursa Securities.

7. Reviewed the proposed new auditor Ecovis AHL by the management and recommended to The Board for appointment

8. Approved the Audit fee for financial year ended 30 June 2012.

9. Meeting with external auditors twice during the financial year without the presence of the management and Executive Directors.

INTERNALAUDITFUNCTION

The Group’s internal audit function is outsourced to an independent professional firm, which is independent of the activities and operations of the Group. The outsourced internal auditors are empowered by the Committee to provide objective evaluation of risk and controls in the auditable activities to ensure a sound system of internal controls.

The internal audits were undertaken to provide independent assessments on the adequacy, efficiency and effectiveness of the Group’s internal control systems in anticipating potential risks exposures over key business processes within the Group. The Committee has full access to internal auditors and received reports on all audits performed.

The resulting reports from the audits undertaken were forwarded to the Management for its attention and to take the necessary corrective actions as recommended. The Management is responsible for ensuring that corrective actions on reported weaknesses are taken within the required time frame.

During the financial year under review, the internal audit activities have been carried out in accordance to the internal audit plan, which have been approved by the Committee.

The costs incurred for the internal audit function in respect of the financial year ended 30 June 2013 was RM 60,015.00

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Statement of Directors’ Responsibility

This statement is prepared pursuant to the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad.

The Directors are required to prepare audited financial statements that give a true and fair view of the state of affairs, including the cash flow and results, of the Group and the Company as at the end of each financial year.

In preparing the financial statements for the financial year ended 30 June 2013, the Directors have considered the following:

• the Group and the Company have used appropriate accounting policies, and are consistently applied;

• that reasonable and prudent judgements and estimates were made;

• that the approved accounting standards in Malaysia have been applied; and

• ensure the financial statements have been prepared on a going concern basis.

The Directors are responsible for ensuring that the Company maintains proper accounting records which disclose with reasonable accuracy the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with the Companies Act 1965.

The Directors have general responsibility for taking such steps that are reasonably available to them to safeguard the assets of the Group and the Company, and to prevent and detect fraud and other irregularities.

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Additional Compliance Information

ShareBuyBack

There were no share buy back during the financial year. None of the treasury shares held was resold or cancelled during the financial year under review.

UtilisationofProceedsfromCorporateExercises

Total proceeds raised by the Company from the private placement exercise amounted to RM3,650,572.80 with the issuance of 16,096,000 new ordinary shares of RM0.10 each on 7 November 2012. The proceeds raised have been fully utilised for working capital purposes.

Options,WarrantsandConvertibleSecurities

There were no options, warrants or convertible securities issued by the Company during the financial year.

DepositoryReceiptProgramme

The Company did not sponsor any Depository Receipt Programme during the financial year.

ImpositionofSanctionsandPenalties

There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year.

Non-AuditFees

The amount of non-audit fees paid to the external auditors by the Group for the financial year ended 30 June 2013 was RM 68,500.00

VariationInResults,ProfitEstimate,ForecastorProjection

There were no material variance between the audited results for the financial year ended 30 June 2013 and the unaudited results previously announced by the Company. The Company did not release any profit estimate, forecast or projection for the financial year under review.

ProfitGuarantee

The Company did not give any form of profit guarantee to any parties during the financial year.

MaterialContractsInvolvingDirectors’andMajorShareholders’Interest

There were no material contracts entered into by the Company or its subsidiaries, involving directors’ and major shareholders’ interest during the financial year under review.

RecurrentRelatedPartyTransactionsofaRevenueorTradingNature

The list of recurrent related party transactions of a revenue or trading nature entered into by the Group is disclosed in Note 27 to the financial statements. For the financial year ended 30 June 2013, no shareholders mandate was required for the recurrent related party transactions of a revenue or trading nature entered into by the Group pursuant to Rule 10.09 of the ACE Market Listing Requirements of Bursa Securities.

Financial Statements

29 Directors’ Report

33 Statement by Directors

33 Statutory Declaration

34 Independent Auditors’ Report

36 Statements of Comprehensive Income

37 Statements of Financial Position

39 Statements of Changes in Equity

41 Statements of Cash Flows

43 Notes to the Financial Statements

97 Supplementary Information

- Breakdown of Retained Profits into Realised and Unrealised

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Directors’ Report (cont’d)

The directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 30 June 2013.

PRINCIPALACTIVITIES

The Company is principally engaged in the provision of mobile solutions.

The principal activities of the subsidiaries are set out in Note 15 to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

RESULTS

Group Company RM RM Loss net of tax (7,456,031) (10,975,331) Attributable to: Owners of the parent (8,062,568) (10,975,331)Non-controlling interests 606,537 - (7,456,031) (10,975,331)

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

In the opinion of the directors, the results of the 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 other than the impairment of goodwill of the Group amounting to RM7,258,717 and the impairment of investment in subsidiaries of the Company amounting to RM9,318,636 as disclosed in Note 14 and Note 15 respectively to the financial statements.

DIVIDENDS

The amounts of dividends paid by the Company since 30 June 2012 were as follows:

RM

In respect of the financial year ended 30 June 2012: First interim tax exempt dividend of 5%, on 161,894,240 ordinary shares, declared on 22 November 2011 and paid on 6 January 2012 809,471

The directors do not recommend the payment of a final dividend for the financial year ended 30 June 2013.

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Directors’ Report (cont’d)

DIRECTORS

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Chew Shin Yong, MarkLim Seng BoonLester Ratnakumar Neil FrancisMuhammad Nagib Gopal bin Abdullah Chin Chee Wing Mark Wing Kong

DIRECTORS’BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate. Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or fixed salary of a full-time employee of the Company as shown in Note 10 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, except as disclosed in Note 27 to the financial statements.

DIRECTORS’INTERESTS

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Company during the financial year were as follows:

NumberofordinarysharesofRM0.10each 1July 30JuneNameofdirector 2012 Acquired Sold 2013

Directinterest:Lim Seng Boon 13,505,000 100,000 - 13,605,000Chew Shin Yong, Mark 2,130,600 - - 2,130,600Lester Ratnakumar Neil Francis 808,016 - - 808,016Muhammad Nagib Gopal Bin Abdullah 80,000 - - 80,000Chin Chee Wing 590,000 - - 590,000 Deemedinterest: Lim Seng Boon* 24,186,840 - - 24,186,840Chin Chee Wing** 2,634,900 - - 2,634,900Chew Shin Yong, Mark*** - 945,600 - 945,600

* Deemed interested by virtue of his spouse, Madam Goh Lee Lang’s shareholdings in M3 Technologies (Asia) Berhad** Deemed interested by virtue of his spouse, Madam Cha Lee Pin’s shareholdings in M3 Technologies (Asia) Berhad*** Deemed interested by virtue of his interest in Marmark (BVI) Limited (MBVIL)

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

Lim Seng Boon, by virtue of his interest in shares of the Company is also deemed interested in shares of all the Company’s subsidiaries to the extent that the Company has an interest.

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Directors’ Report (cont’d)

SHARESANDDEBENTURES

On 7 November 2012, the issued and paid-up share capital of the Company has increased from RM16,351,874 to RM17,961,474 by issuing 16,096,000 new ordinary shares of RM0.10 each at an issue price of RM0.2268 each pursuant to the private placement. The share premium of RM2,040,971 arising from the issuance of ordinary share has been included in share premium account.

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

There were no issue of debentures by the Company during the financial year.

TREASURYSHARES

There was no repurchased or resale of shares held as treasury shares by the Company during the financial year. Relevant details on the treasury shares are disclosed in Note 20 to the financial statements.

OTHERSTATUTORYINFORMATION

(a) Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

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

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

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

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

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

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Directors’ Report (cont’d)

OTHERSTATUTORYINFORMATION(CONT’D)

(f) In the opinion of the directors:

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

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

SIGNIFICANTEVENTS

Significant events are disclosed in Notes 14, 15, 16 and 33 to the financial statements.

AUDITORS

The auditors, ECOVIS AHL, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 17 October 2013.

LimSengBoon LesterRatnakumarNeilFrancis

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Statement by DirectorsPursuant to Section 169(15) of the Companies Act, 1965

Statutory DeclarationPursuant to Section 169(16) of the Companies Act, 1965

We, Lim Seng Boon and Lester Ratnakumar Neil Francis, being two of the directors of M3 Technologies (Asia) Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 36 to 96 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 30 June 2013 and of their financial performance and cash flows for the year then ended.

The information set out in Note 36 to the financial statements have been prepared in accordance with 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.

Signed on behalf of the Board in accordance with a resolution of the directors dated 17 October 2013.

LimSengBoon LesterRatnakumarNeilFrancis

I, Lim Seng Boon, being the director primarily responsible for the financial management of M3 Technologies (Asia) Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 36 to 96, are to the best of my knowledge and belief 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 Lim Seng Boon at Puchong in the State of Selangor Darul Ehsan on 17 October 2013 LimSengBoon

Before me,

Cheong Lak HoongNo: B-232Commissioner for Oaths

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Independent Auditors’ Reportto the members of M3 Technologies (Asia) Berhad (Incorporated in Malaysia) Company No: 482772 - D

REPORTONTHEFINANCIALSTATEMENTS

We have audited the financial statements of M3 Technologies (Asia) Berhad, which comprise the statements of financial position as at 30 June 2013 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 36 to 96.

Directors’ responsibility for the financial statements

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

Auditors’ responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation 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 control.

An audit also includes evaluating the appropriateness of the 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 have been properly 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 30 June 2013 and of their financial performance and cash flows for the year then ended.

REPORTONOTHERLEGALANDREGULATORYREQUIREMENTS

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 subsidiaries for which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 15 to the financial statements, being financial statements that have been included in the consolidated financial statements.

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Independent Auditors’ Report (cont’d)to the members of M3 Technologies (Asia) Berhad (Incorporated in Malaysia)

Company No: 482772 - D

REPORTONOTHERLEGALANDREGULATORYREQUIREMENTS(CONT’D)

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

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.

(e) Other than those subsidiaries with emphasis of matter paragraphs in the auditors’ reports disclosed in Note 15 to the financial statements, the auditors’ reports on the financial statements of the remaining subsidiaries did not contain any qualification or any adverse comments made under Section 174(3) of the Companies Act, 1965 in Malaysia.

OTHERREPORTINGRESPONSIBILITIES

The supplementary information set out in Note 36 on page 97 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. 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 Disclosure 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.

OTHERMATTERS

As stated in Note 2.1 to the financial statements, the Group and the Company adopted Malaysian Financial Reporting Standards on 1 July 2012 with a transition date of 1 July 2011. These standards were applied retrospectively by Directors to the comparative information in these financial statements, including the statements of financial position as at 30 June 2012 and 1 July 2011, and the statements of comprehensive income, changes in equity and cash flows for the year ended 30 June 2012 and related disclosures. We were not engaged to report on the restated comparative information that is prepared in according with MFRS and hence it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the Company for the year ended 30 June 2013 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1 July 2012 do not contain misstatements that materially affect the financial position as of 30 June 2013 and financial performance and cash flows for the year then ended.

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.

The financial statements as at 1 July 2011 and 30 June 2012, and for the two year then ended were audited by other auditors.

ECOVISAHL CHUAKAHCHUNFirm No: AF 001825 Approval No: 2696/09/15 (J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia

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Statements of Comprehensive Income For the financial year ended 30 June 2013

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

Group Company Note 2013 2012 2013 2012 Restated RM RM RM RM

Revenue 4 49,868,935 56,284,822 12,498,105 13,589,509Cost of sales 5 (27,237,627) (27,543,969) (8,267,380) (8,389,492)

Grossprofit 22,631,308 28,740,853 4,230,725 5,200,017 Otheritemsofincome Other income 6 537,513 264,435 422,211 1,672,713 Otheritemsofexpense Administrative expenses (17,442,696) (16,113,174) (6,108,125) (5,911,734) Selling and marketing expenses (4,271,226) (4,853,254) (18,535) (667,309) Other expenses (378,418) (310,217) (124,995) (50,620) Finance costs 7 (33,025) (6,712) (20,174) - Impairment loss on goodwill 14 (7,258,717) - - - Impairment loss on investments in subsidiaries 15 - - (9,318,636) - Share of results of a jointly controlled entity (34,833) (155,412) - -

(Loss)/Profitbeforetax 8 (6,250,094) 7,566,519 (10,937,529) 243,067 Income tax expense 11 (1,205,937) (2,468,591) (37,802) (35,644)

(Loss)/Profitnetoftax (7,456,031) 5,097,928 (10,975,331) 207,423 Othercomprehensiveexpense,netoftax: Foreign currency translation (216,939) (5,392) - -

Totalcomprehensive(expense)/income fortheyear (7,672,970) 5,092,536 (10,975,331) 207,423 (Loss)/Profitattributableto: Owners of the parent (8,062,568) 3,865,495 (10,975,331) 207,423Non-controlling interests 606,537 1,232,433 - -

(7,456,031) 5,097,928 (10,975,331) 207,423 Totalcomprehensive(expense)/income attributableto: Owners of the parent (8,123,863) 3,974,813 (10,975,331) 207,423Non-controlling interests 450,893 1,117,723 - -

(7,672,970) 5,092,536 (10,975,331) 207,423

Earningspershareattributabletoowners oftheparent(sen) Basic/Diluted 12 (4.70) 2.39

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Note 30.06.2013 30.06.2012 01.07.2011Group Restated RestatedAssets RM RM RM Non-currentassets Property, plant and equipment 13 4,817,913 3,640,756 3,798,973 Intangible assets 14 8,822,271 15,304,209 14,469,047 Interest in a jointly controlled entity 16 738,190 891,805 430,568 Deferred tax asset 24 - - 107,954 14,378,374 19,836,770 18,806,542 Currentassets Inventories 17 10,724,694 8,458,121 6,951,503 Trade and other receivables 18 16,951,496 16,471,397 15,054,540 Tax refundable 638,545 266,203 78,216 Cash and bank balances 19 18,006,085 19,239,687 20,168,574 46,320,820 44,435,408 42,252,833 Totalassets 60,699,194 64,272,178 61,059,375 Equityandliabilities Equityattributabletoownersoftheparent Share capital 20 17,961,474 16,351,874 16,351,874 Share premium 20 4,392,702 2,351,731 2,351,731 Treasury shares 20 (565,639) (565,639) (315,637) Other reserves 21 48,023 109,318 - Retained earnings 22 22,496,428 30,534,116 28,287,613 44,332,988 48,781,400 46,675,581Non-controllinginterests 4,130,122 3,959,082 3,032,925 Totalequity 48,463,110 52,740,482 49,708,506 Non-currentliabilities Loans and borrowings 23 997,858 152,075 34,933 Deferred tax liabilities 24 154,485 158,005 289,556 1,152,343 310,080 324,489 Currentliabilities Loans and borrowings 23 2,817,460 793,165 26,909 Trade and other payables 25 8,226,034 9,590,097 9,495,872 Dividends payable - - 809,521 Income tax payable 40,247 838,354 694,078 11,083,741 11,221,616 11,026,380 Totalliabilities 12,236,084 11,531,696 11,350,869 Totalequityandliabilities 60,699,194 64,272,178 61,059,375

Statements of Financial PositionAs at 30 June 2013

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

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Statements of Financial Position (cont’d)As at 30 June 2013

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

Note 30.06.2013 30.06.2012 01.07.2011Company RM RM RMAssets Non-currentassets Property, plant and equipment 13 2,294,903 1,195,430 1,356,140 Intangible assets 14 1,254,332 1,214,889 1,190,101 Investments in subsidiaries 15 27,513,509 36,832,145 36,980,045 Interest in a jointly controlled entity 16 940,519 1,064,269 444,036 32,003,263 40,306,733 39,970,322 Currentassets Trade and other receivables 18 14,162,237 12,236,992 11,063,112 Tax refundable 66,922 95,545 68,423 Cash and bank balances 19 4,141,762 2,561,689 6,665,353 18,370,921 14,894,226 17,796,888 Totalassets 50,374,184 55,200,959 57,767,210 Equityandliabilities Equityattributabletoownersoftheparent Share capital 20 17,961,474 16,351,874 16,351,874 Share premium 20 4,392,702 2,351,731 2,351,731 Treasury shares 20 (565,639) (565,639) (315,637) Other reserves 21 16,074,240 16,074,240 16,074,240 Retained earnings 22 6,356,052 17,331,383 18,742,952 Totalequity 44,218,829 51,543,589 53,205,160 Non-currentliabilities Loans and borrowings 23 800,469 - - Deferred tax liabilities 24 - - 104,642 800,469 - 104,642 Currentliabilities Loans and borrowings 23 2,750,174 744,579 - Trade and other payables 25 2,604,712 2,912,791 3,647,887 Dividends payable - - 809,521 5,354,886 3,657,370 4,457,408Totalliabilities 6,155,355 3,657,370 4,562,050 Totalequityandliabilities 50,374,184 55,200,959 57,767,210

39

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40

M3

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IES

(ASI

A) B

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Statements of Changes in Equity (cont’d) For the financial year ended 30 June 2013

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Statements of Cash FlowsFor the financial year ended 30 June 2013

Group Company Note 2013 2012 2013 2012 Restated RM RM RM RMOperatingactivities (Loss)/Profit before tax (6,250,094) 7,566,519 (10,937,529) 243,067Adjustments for: Allowance for doubtful debts 8 534,402 - 29,077 - Amortisation of intangible assets 8 1,671,520 1,314,504 1,292,134 1,206,356 Bad debts recovered 8 (330,690) - - - Bad debts written off 8 2,631 505,065 - 72,845 Depreciation of property, plant and equipment 8 1,044,217 1,086,666 268,906 356,903 Dividend income 6 - - (378,019) (1,668,412) Impairment loss on goodwill 8 7,258,717 - - - Impairment loss on investments in subsidiaries 8 - - 9,318,636 147,900 Interest expense 7 33,025 6,712 20,174 - Interest income 6 (130,840) (264,435) (19,092) (4,301) Inventory written off 8 14,040 - - - Loss/(gain) on disposal of plant and equipment 8 7,689 (2,352) 7,814 - Plant and equipment written off 8 21,900 - - - Reversal of allowance for doubtful debts 8 - - (24,950) - Share of results in a jointly controlled entity 34,833 155,412 - - Short-term accumulating absences 9 (165,529) 775 (148,843) (7,348) Unrealised loss/(gain) on foreign exchange 182,617 (51,886) 26,763 45,533

Operatingprofit/(loss)beforeworking capitalchanges 3,928,438 10,316,980 (544,929) 392,543 Increase in inventories (2,280,613) (1,506,618) - - (Increase)/decrease in trade and other receivables (686,442) (1,921,922) 142,214 324,410 (Decrease)/increase in trade and other payables (1,381,151) 145,336 (185,999) (727,748)

Cashflows(usedin)/generatedfrom operations (419,768) 7,033,776 (588,714) (10,795) Interest paid (33,025) (6,712) (20,174) - Income tax refunded 30,734 - 30,734 - Income tax paid (2,410,640) (2,528,357) (39,913) (167,408)

Netcash(usedin)/generatedfromoperating activitiescarriedforward (2,832,699) 4,498,707 (618,067) (178,203)

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Statements of Cash Flows (cont’d) For the financial year ended 30 June 2013

Group Company Note 2013 2012 2013 2012 Restated RM RM RM RMInvestingactivities Acquisition of and advances to a jointly controlled entity - (620,233) - (620,233) Dividends received from subsidiaries - - 378,019 1,668,412 Interest received 130,840 264,435 19,092 4,301 Net change in amounts due from subsidiaries - - (2,071,586) (1,571,135) Proceeds from disposal of of intangible assets and product development expenditure paid 382,270 - - - Proceeds from disposal of plant and equipment 73,452 18,866 20,000 - Acquisition of intangible assets and product development expenditure paid (2,753,635) (2,108,774) (1,331,577) (1,231,144) Purchase of property, plant and equipment (1,949,093) (795,724) (1,084,193) (196,193) Repayment of advance to a jointly controlled entity 123,750 - 123,750 -

Netcashusedininvestingactivities (3,992,416) (3,241,430) (3,946,495) (1,945,992) Financingactivities Dividends paid - (2,428,513) - (2,428,513) Dividends paid by subsidiaries to non-controlling interests (254,973) (191,566) - - Purchase of treasury shares - (250,002) - (250,002) Proceeds from issue of share capital 3,650,571 - 3,650,571 - Drawdown of loans and borrowings 3,298,290 744,579 3,298,290 744,579 Repayment of loans and borrowings (851,002) (34,854) (804,226) -

Netcashgeneratedfrom/(usedin) financingactivities 5,842,886 (2,160,356) 6,144,635 (1,933,936) Net(decrease)/increaseincashandcash equivalents (982,229) (903,079) 1,580,073 (4,058,131)Effectsofforeignexchangeratechanges (251,373) (25,808) - (45,533)Cashandcashequivalentsasat1July 19,239,687 20,168,574 2,561,689 6,665,353

Cashandcashequivalentsasat30June 19 18,006,085 19,239,687 4,141,762 2,561,689

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Notes to the Financial Statementsfor the financial year ended 30 June 2013

1. Corporateinformation

The Company is a public limited liability company incorporated and domiciled in Malaysia, and is listed on the ACE Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Third Floor, No. 79 (Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan. The principal place of business of the Company is located at Unit 608, 707 & 1007, Block A, Pusat Dagangan Phileo II, 15, Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan.

The Company is principally engaged in the provision of mobile solutions.

The principal activities of the subsidiaries are set out in Note 15.

There have been no significant changes in the nature of these activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 17 October 2013.

2. Summaryofsignificantaccountingpolicies

2.1 Basisofpreparation

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 and the requirements of the Companies Act, 1965 in Malaysia.

These are the Group’s and the Company’s first financial statements prepared in accordance with MFRSs, which are also in line with International Financial Reporting Standards as issued by the International Accounting Standards Board. In the previous financial years, the financial statements of the Group and of the Company were prepared in accordance with Financial Reporting Standards (“FRSs”) in Malaysia.

The transition to MFRSs is accounted for in accordance with MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards, with 1 July 2011 as the date of transition. The financial impacts on the transition from FRSs to MFRSs to the financial statements are presented in Note 35.

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (“RM”) except when otherwise indicated.

The following are accounting standards, amendments and interpretations of the MFRS that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective and have not been adopted by the Group and the Company:

Effective for financial periods beginning on or after 1 January 2013• MFRS 10, Consolidated Financial Statements• MFRS 11, Joint Arrangements• MFRS 12, Disclosure of Interests in Other Entities• MFRS 13, Fair Value Measurement• MFRS 119, Employee Benefits (revised)• MFRS 127, Consolidated and Separate Financial Statements (revised)• MFRS 128, Investments in Associates and Joint Ventures (revised)• Amendments to MFRS 7, Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities• Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance• Amendments to MFRS 11, Joint Arrangements: Transition Guidance• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Transition Guidance• Annual Improvements to IC Interpretations and MFRSs 2009 – 2011 Cycle

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.1 Basisofpreparation(cont’d)

Effective for financial periods beginning on or after 1 January 2014• Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities• Amendments to MFRS 10, Consolidation Financial Statements: Investment Entities• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities• Amendments to MFRS 127, Consolidated and Separate Financial Statements: Investment Entities• Amendments to MFRS 136, Recoverable Amount Disclosures for Non-financialAssets• Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting• IC Interpretation 21, Levies

Effective for financial periods beginning on or after 1 January 2015• MFRS 9, Financial Instruments• Amendments to MFRS 9 and MFRS 7, Mandatory Effective Date of MFRS 9 and Transition Disclosures

Material impacts of initial application of a standard, an amendment or an interpretation are discussed below:

MFRS9,Financial Instruments MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the

classification and measurement of financial assets. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost.

MFRS10,Consolidated Financial Statements MFRS 10, Consolidated Financial Statements introduces a new single control model to determine which investees

should be consolidated. MFRS 10 supersedes MFRS 127, Consolidated and Separate Financial Statements and IC Interpretation 112, Consolidation - Special Purpose Entities. There are three elements to the definition of control in MFRS 10: (i) power by investor over an investee, (ii) exposure, or rights, to variable returns from investor’s involvement with the investee, and (iii) investor’s ability to affect those returns through its power over the investee.

MFRS11,Joint Arrangements MFRS 11, Joint Arrangements establishes the principles for classification and accounting for joint arrangements

and supersedes MFRS 131, Interest in Joint Ventures. Under MFRS 11, a joint arrangement may be classified as joint venture or joint operation. Interest in joint venture will be accounted for using the equity method whilst interest in joint operation will be accounted for using the applicable MFRSs relating to the underlying assets, liabilities, income and expense items arising from the joint operations.

MFRS13,Fair Value Measurement MFRS13, Fair Value Measurement establishes the principles for fair value measurement and replaces the existing

guidance in different MFRSs. The enhance disclosure requirements are similar to those MFRS 7 “Financial Instruments: Disclosures” but apply to all assets and liabilities measured at fair value and not only financial assets and liabilities.

MFRS119,Employee Benefits (2011) The amendments to MFRS 119, Employee Benefits change the accounting for defined benefit plans and

termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the ‘corridor method’ permitted under the previous version of MFRS 119 and accelerate the recognition of past service costs.

The amendments require all actuarial gains and losses to be recognised immediately through other comprehensive income in order for the net pension asset or liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus. The amendments to MFRS 119 require retrospective application.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.1 Basisofpreparation(cont’d)

AmendmentstoMFRS101,Presentation of Items of Other Comprehensive Income The amendments to MFRS 101 requires entities to separate items presented in “other comprehensive income”

(“OCI”) in the statement of comprehensive income into two groups, based on whether or not they may be recycled to profit or loss in the future. The amendments do not address which items are presented in OCI.

The Company will adopt the above pronouncements when they become effective in the respective financial periods. These pronouncements are not expected to have any significant impact on the financial statements of the Company upon their initial application.

2.2 Basisofconsolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

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

Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree net identifiable assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. The accounting policy for goodwill is set out in Note 2.6. In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.

As part of its transition to MFRSs, the Group elected not to restate those business combinations that occurred before the date of transition, 1 July 2011. Such business combinations and the related goodwill and fair value adjustments have been carried forward from the previous FRS framework as at the date of transition.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.3 Transactionswithnon-controllinginterest

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary 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 parent.

2.4 Foreigncurrency

i. Functionalandpresentationcurrency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.

ii. Foreigncurrencytransactions Transactions in foreign currencies are measured in the respective functional currencies of the Company

and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

iii. Foreignoperations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.5 Property,plantandequipment

All items of property, plant and equipment are initially recorded at cost. 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.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, at the following annual rates:

Buildings 2% Computers and software 10% - 33% Furniture, fixtures, fittings, and office equipment 15% - 33% Motor vehicles 10% Renovation 10% - 33%

Assets under construction included in property, plant and equipment are not depreciated as these assets are not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.6 Intangibleassets

i. Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.6 Intangibleassets(cont’d)

i. Goodwill(cont’d)

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating 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 fair values of the operations disposed of and the portion of the cash-generating unit retained.

Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date in line with the accounting policy set out in Note 2.4(iii).

Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2006 are deemed to be assets and liabilities of the Company and are recorded in RM at the rates prevailing at the date of acquisition.

ii. Productdevelopmentexpenditure All research costs are recognised in the profit or loss as incurred.

Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditures which do not meet these criteria are expensed when incurred.

Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised using the straight-line basis over the commercial lives of the underlying products not exceeding 2 years. Impairment is assessed whenever there is an indication of impairment and the amortisation period and method are also reviewed at least at each statement of financial position date.

iii. Intellectualproperty Intellectual property comprises digital content rights and licenses acquired and is considered to have finite

useful life due to the technological risks and advancement inherent in the industry. Intellectual property of the Group is amortised on a straight line basis over its estimated useful lives ranging between 3 and 10 years.

2.7 Impairmentofnon-financialassets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.7 Impairmentofnon-financialassets(cont’d)

In assessing value in use, the estimated future cash flows expected to be generated by the asset 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. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

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. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a subsequent period.

2.8 Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activities.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses.

2.9 Jointlycontrolledentity

A jointly controlled entity is an entity that is subject to joint control, where the strategic financial and operating decisions relating to the entity require the unanimous consent of the parties sharing control. A jointly controlled entity is equity accounted for from the date the Group obtains joint control until the date the Group ceases to have joint control or significant influence over the entity.

The Group’s investment in jointly controlled entity is accounted for using the equity method. Under the equity method, the investment in jointly controlled entity is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the jointly controlled entity. Goodwill relating to the jointly controlled entity is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the jointly controlled entity’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the jointly controlled entity’s profit or loss for the period in which the investments are acquired.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its jointly controlled entity. The Group determines at each reporting date whether there is any objective evidence that the investment in the jointly controlled entity is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the jointly controlled entity and their carrying value and recognises the amount in profit or loss.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.9 Jointlycontrolledentity(cont’d)

The financial statements of the jointly controlled entity are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

In the Company’s separate financial statements, investment in jointly controlled entity is stated at cost less impairment losses. On disposal of such investment, the difference between net disposal proceeds and its carrying amount is included in profit or loss.

2.10 Financialassets

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

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

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

i. Financialassetsatfairvaluethroughprofitorloss Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading

or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair

value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

ii. Loansandreceivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

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

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.10 Financialassets(cont’d)

iii. Held-to-maturityinvestments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current.

The Group and the Company have not designated any financial assets as held-to-maturity investments.

iv. Available-for-salefinancialassets

Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group’s and the Company’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

The Group and the Company have not designated any financial assets as available-for-sale financial assets.

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

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.

2.11 Impairmentoffinancialassets

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

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.11 Impairmentoffinancialassets(cont’d)

i. Tradeandotherreceivablesandotherfinancialassetscarriedatamortisedcost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, 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. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

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

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets

with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

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

2.12 Cashandcashequivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.

2.13 Inventories

Inventories comprise merchandise held for resale and are stated at the lower of cost and net realisable value.

Cost is determined using the first in, first out method. The cost includes cost of purchase and other incidental expenses in bringing the items into its present location and condition.

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

2.14 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

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. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.15 Financialliabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

i. Financialliabilitiesatfairvaluethroughprofitorloss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.

ii. Otherfinancialliabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and 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 reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.16 Financialguaranteecontracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.17 Borrowingcosts

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

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

2.18 Employeebenefits

i. Shorttermbenefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

ii. Definedcontributionplans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the Employee Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

2.19 Leases

Aslessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the 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 charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Leased assets are depreciated over the estimated 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 and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.20 Revenue

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

i. Saleofgoods

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

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.20 Revenue(cont’d)

ii. Revenuefromservices

Revenue from services rendered is recognised net of service taxes and discounts as and when the services are performed.

iii. Interestincome

Interest income is recognised using the effective interest method.

iv. Dividendincome

Dividend income is recognised when the Group’s right to receive payment is established.

2.21 Incometaxes

i. Currenttax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

ii. Deferredtax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

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

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.21 Incometaxes(cont’d)

ii. Deferredtax(cont’d)

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

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

iii. Salestax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

- Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of financial position.

2.22 Segmentreporting

For management purposes, the Group is organised into operating segments based on business segments which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in the financial statements, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.23 Sharecapitalandshareissuanceexpenses

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.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

2. Summaryofsignificantaccountingpolicies(cont’d)

2.24 Treasuryshares

When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity.

2.25 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised but disclosed in the notes to the financial statements when a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as provision.

2.26 Relatedparties

A party is related to an entity if:

(i) directly, or indirectly through one or more intermediaries, the party:- control, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries

and fellow subsidiaries);- has an interest in the entity that gives it significant influence over the entity; or - has joint control over the entity;

(ii) the party is an associated of the entity;

(iii) the party is a joint venture in which the entity is a venturer;

(iv) the party is a member of the key management personnel of the entity or its parent;

(v) the party is a close member of the family of any individual referred to in (i) or (iv);

(vi) the party is an entity that is controlled, joint controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or

(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that

is a related party of the entity.

Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.

3. Significantaccountingestimatesandjudgements

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Judgementsmadeinapplyingaccountingpolicies

There are no critical judgements made by management in the process of applying the Group’s accounting policies that has significant effect on the amounts recognised in the financial statements.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

3. Significantaccountingestimatesandjudgements(cont’d)

3.2 Keysourcesofestimationuncertainty

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

(a) Impairmentofgoodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires an estimation of the value in use of the cash-generating units to which goodwill is allocated.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value and the key assumptions applied in the impairment assessment of goodwill are disclosed in Note 14.

(b) Impairmentofinvestmentsinsubsidiariesandinterestinajointlycontrolledentity

Investments in subsidiaries and the interest in a jointly controlled entity are tested for impairment when such indicators exist. This requires an estimation of the value in use of these investments.

When value in use calculations are undertaken, management must estimate the expected future cash flows from these investments and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value and the key assumptions applied in the impairment assessment of these investments are disclosed in Notes 15 and 16 respectively.

(c) Impairmentanddepreciationofproperty,plantandequipment

Property, plant and equipment are tested for impairment when such indicators exist. This requires an estimation of the value in use of the cash-generating units to which the property, plant and equipment are allocated.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

The cost of property, plant and machinery is depreciated on a straight-line basis over the assets’ useful lives. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

The carrying amount of property plant and equipment and the related depreciation expense are disclosed in Note 13.

(d) Amortisationofproductdevelopmentexpenditureandintellectualproperty

Changes in the expected level of usage and technological development could impact the economic useful lives and therefore, future amortization charges could be revised.

(e) Impairmentofloansandreceivables

The Group assesses 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 considers 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 for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 18.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

3. Significantaccountingestimatesandjudgements(cont’d)

3.2 Keysourcesofestimationuncertainty(cont’d)

(f) Deferredtax

Deferred tax assets are recognised for all unused tax losses, unabsorbed capital allowances, unused reinvestment allowances and unused allowance for increased exports to the extent that it is probable that taxable profit will be available against which the losses, capital allowances, unused reinvestment allowances and unused allowance for increased exports can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The carrying amount of deferred tax assets of the Group as at 30 June 2013 is disclosed in Note 24.

At the reporting date, no deferred tax liability has been recognised for taxes that would be payable on the undistributed earnings of certain foreign subsidiaries. The Group has determined that these undistributed earnings of the subsidiaries will not be distributed in the foreseeable future, as disclosed in Note 24.

(g) Inventorieswrittendown

Inventories of the Group are written down to net realisable value based on an analysis of the aging profile and taking into account the expected sales patterns of individual items held in inventory. Changes in the inventory aging and the expected sales profiles may have an impact on the amount of written down recorded. The carrying amount of inventories of the Group is disclosed in Note 17.

4. Revenue

Revenue of the Group represents the invoiced value of goods sold and services, net of sales tax or service tax, trade discounts and returns. Revenue of the Company represents the invoiced value of services, net of service tax and trade discounts. Further analysis of the revenue of the Group is presented in Note 31.

5. Costofsales

Cost of sales consists mainly of SMS and leased-line charges, royalty expenses, amortisation of product development expenditure, other incidental costs incurred for the provision of mobile solutions and cost of inventories (Note 17).

6. Otherincome

Group Company 2013 2012 2013 2012 RM RM RM RM Bad debts recovered 330,690 - - - Interest income 130,840 264,435 19,092 4,301 Dividend income - - 378,019 1,668,412 Gain on foreign exchange, net 34,104 - - - Other income 41,879 - 150 - Reversal of allowance for doubtful debts - - 24,950 - 537,513 264,435 422,211 1,672,713

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

7. Financecosts

Group Company 2013 2012 2013 2012 RM RM RM RM

Interest expense: - Finance lease obligations 23,224 6,712 10,373 - - Term loan 9,801 - 9,801 - 33,025 6,712 20,174 -

8. (Loss)/Profitbeforetax

The following items have been included in arriving at (loss)/profit before tax:

Group Company 2013 2012 2013 2012 RM RM RM RM Allowance for doubtful debts 534,402 - 29,077 - Amortisation of intangible assets (Note 14) 1,671,520 1,314,504 1,292,134 1,206,356 Auditors’ remuneration: Statutory audits - auditors of the Company 98,000 146,000 81,000 126,000 - other auditors 78,013 78,211 - - - underprovision in previous financial year 20,349 6,089 14,066 - Other services - auditors of the Company 9,240 6,500 3,500 6,500 Bad debts recovered (330,690) - - - Bad debts written off 2,631 505,065 - 72,845 Depreciation of property, plant and equipment (Note 13) 1,044,217 1,086,666 268,906 356,903 Employee benefits expense (Note 9) 13,245,015 13,000,936 3,933,065 3,964,409 Impairment loss on investments in subsidiaries (Note 15) - - 9,318,636 147,900 Impairment loss on goodwill (Note 14) 7,258,717 - - - Inventory written off 14,040 - - - Minimum lease payments for premises 1,014,028 881,926 183,249 190,077 Non-executive directors’ remuneration (Note 10) 173,697 138,497 150,835 121,113 Loss/(gain) on disposal of plant and equipment 7,689 (2,352) 7,814 - Net loss/(gain) on foreign exchange 344,313 302,880 124,995 50,620 Plant and equipment written off 21,900 - - - Reversal of allowance for doubtful debts - - (24,950) -

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

9. Employeebenefitsexpense

Group Company 2013 2012 2013 2012 RM RM RM RM Wages and salaries 13,630,329 13,083,601 4,739,677 4,462,540 Social security contributions 307,909 210,639 38,025 26,517 Contribution to defined contribution plan 1,193,936 921,121 454,327 515,846 Short term accumulating compensated absences (165,529) 775 (148,843) (7,348) Other staff related expenses 439,553 445,525 181,456 197,998 15,406,198 14,661,661 5,264,642 5,195,553

Less: Capitalised in product development expenditure (2,161,183) (1,660,725) (1,331,577) (1,231,144) 13,245,015 13,000,936 3,933,065 3,964,409

Included in employee benefits expense of the Group and the Company are executive directors’ remuneration amounting to RM1,335,917 (2012: RM1,406,825) and RM964,844 (2012: RM929,029) respectively.

10. Directors’remuneration

Group Company 2013 2012 2013 2012 RM RM RM RM

DirectorsoftheCompany Executive: Salaries and other emoluments 932,083 899,709 860,360 828,164 Defined contribution plan and social security contributions 108,070 104,442 104,484 100,865 1,040,153 1,004,151 964,844 929,029 Non-executive: Fees 150,835 121,113 150,835 121,113 1,190,988 1,125,264 1,115,679 1,050,142 Directorsofsubsidiaries Executive: Salaries and other emoluments 289,960 384,260 - - Defined contribution plan 5,804 18,414 - - 295,764 402,674 - - Non-executive: Fees 22,862 17,384 - - 318,626 420,058 - -

1,509,614 1,545,322 1,115,679 1,050,142

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

10. Directors’remuneration(cont’d)

The number of directors of the Company whose total remuneration during the financial year fall within the following bands is analysed below:

Numberofdirectors 2013 2012

Executive: RM50,001 - RM100,000 1 1 RM400,001 - RM450,000 1 1 RM450,001 - RM500,000 - 1 Above RM500,000 1 - Non-executive: Below RM50,000 5* 6*

* Including 2 (2012: 3) directors who have resigned.

11. Incometaxexpense

Majorcomponentsofincometaxexpense

The major components of income tax expense are:

Group Company 2013 2012 2013 2012 RM RM RM RM Current income tax: Malaysian income tax 328,881 585,498 - - Foreign income tax 810,820 1,720,161 - - Withholding tax 40,792 190,941 37,802 141,751 1,180,493 2,496,600 37,802 141,751 (Over)/underprovision in prior year: Malaysian income tax 29,147 (21,146) - (1,465) Foreign income tax (3,703) 12,419 - - 25,444 (8,727) - (1,465) 1,205,937 2,487,873 37,802 140,286 Deferred tax (Note 24): Relating to origination and reversal of temporary differences - (48,229) - (123,967) Underprovision in prior year - 28,947 - 19,325 - (19,282) - (104,642) Income tax expense recognised in profit or loss 1,205,937 2,468,591 37,802 35,644

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

11. Incometaxexpense(cont’d)

Reconciliationbetweentaxexpenseandaccountingprofit

The reconciliation between tax expense and the product of accounting (loss)/profit multiplied by the applicable corporate tax rate for the years ended 30 June 2013 and 2012 are as follows:

Group Company 2013 2012 2013 2012 RM RM RM RM (Loss)/Profit before tax (6,250,094) 7,566,519 (10,937,529) 243,067 Taxation at Malaysian statutory tax rate of 25% (2012: 25%) (1,562,524) 1,891,630 (2,734,382) 60,767 Adjustments: Different tax rates in other countries (564,906) (261,761) - - Income not subject to tax (82,944) - (99,278) (417,103) Expenses not deductible for tax purposes 3,142,566 385,603 2,833,660 162,711 Deferred tax assets not recognised/ derecognised during the year 207,509 314,607 - 69,658 Utilisation of previously unrecognised tax losses and unabsorbed capital allowances - (72,649) - - Under/(over)provision of income tax in prior year 25,444 (8,727) - (1,465) Underprovision of deferred tax in prior year - 28,947 - 19,325 Withholding tax on dividend and other income received 40,792 190,941 37,802 141,751

Income tax expense recognised in profit or loss 1,205,937 2,468,591 37,802 35,644

Domestic current income tax is calculated at the Malaysian statutory tax rate of 25% (2012: 25%) of the estimated assessable (loss)/profit for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. The above reconciliation is prepared by aggregating separate reconciliation for each national jurisdiction.

12. Earningspershare

Basic earnings per share is calculated by dividing the (loss)/profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year, excluding treasury shares held by the Company.

The following table reflects the profit and share data used in the computation of basic earnings per share for the years ended 30 June:

Group 2013 2012

(Loss)/profit attributable to ordinary equity holders of the Company (RM) (8,062,568) 3,865,495 Weighted average number of ordinary shares in issue* 171,691,907 161,426,917 Basic earnings per share (sen) (4.70) 2.39

* The weighted average number of ordinary shares takes into account the weighted average effect of changes in treasury shares transactions during the year.

The Company does not have any outstanding convertible instruments. Accordingly, the diluted earnings per share is presented as equal to the basic earnings per share.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

13. Property,plantandequipment

Furniture fixture Computers fittings and andoffice Motor Group Buildings software equipment vehicles Renovation Total RM RM RM RM RM RM Cost At 1 July 2011 580,000 14,656,127 2,208,340 284,239 691,543 18,420,249 Additions - 557,133 178,340 176,171 57,753 969,397 Disposals - (18,716) (20,602) - - (39,318) Exchange differences - (58,931) 22,572 11,415 4,376 (20,568) At 30 June 2012 and 1 July 2012 580,000 15,135,613 2,388,650 471,825 753,672 19,329,760 Additions 660,000 764,145 294,911 606,294 46,532 2,371,882 Disposals - (71,312) (21,444) (70,229) - (162,985) Write off - (916,049) (51,425) - (79,530) (1,047,004) Exchange differences - (134,337) (32,622) 7,908 (6,151) (165,202) At 30 June 2013 1,240,000 14,778,060 2,578,070 1,015,798 714,523 20,326,451 Accumulateddepreciation At 1 July 2011 63,306 12,802,486 1,392,116 47,277 316,091 14,621,276 Depreciation charge for the year (Note 8) 11,600 757,998 192,976 51,117 72,975 1,086,666 Disposals - (17,781) (5,023) - - (22,804) Write off - - - - - - Exchange differences - (35,568) 33,513 698 5,223 3,866 At 30 June 2012 and 1 July 2012 74,906 13,507,135 1,613,582 99,092 394,289 15,689,004 Depreciation charge for the year (Note 8) 17,100 634,424 209,317 115,423 67,953 1,044,217 Disposals - (30,070) (9,359) (42,415) - (81,844) Write off - (915,443) (30,131) - (79,530) (1,025,104) Exchange differences - (100,076) (16,426) 1,168 (2,401) (117,735) At 30 June 2013 92,006 13,095,970 1,766,983 173,268 380,311 15,508,538 Netcarryingamount At 1 July 2011 516,694 1,853,641 816,224 236,962 375,452 3,798,973 At 30 June 2012 505,094 1,628,478 775,068 372,733 359,383 3,640,756 At 30 June 2013 1,147,994 1,682,090 811,087 842,530 334,212 4,817,913

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

13. Property,plantandequipment(cont’d)

Furniture fixture Computers fittings and andoffice Motor Company Buildings software equipment vehicles Renovation Total RM RM RM RM RM RM Cost At 1 July 2011 580,000 10,978,791 469,186 70,229 329,630 12,427,836 Additions - 194,818 1,375 - - 196,193 At 30 June 2012 and 1 July 2012 580,000 11,173,609 470,561 70,229 329,630 12,624,029 Additions 660,000 302,579 53,298 368,449 11,867 1,396,193 Disposals - - - (70,229) - (70,229) Write off - (516,290) - - - (516,290) At 30 June 2013 1,240,000 10,959,898 523,859 368,449 341,497 13,433,703 Accumulateddepreciation At 1 July 2011 63,306 10,379,097 394,844 34,807 199,642 11,071,696 Depreciation charge for the year (Note 8) 11,600 291,112 20,439 7,023 26,729 356,903 At 30 June 2012 and 1 July 2012 74,906 10,670,209 415,283 41,830 226,371 11,428,599 Depreciation charge for the year (Note 8) 17,100 173,635 17,851 34,360 25,960 268,906 Disposals - - - (42,415) - (42,415) Write off - (516,290) - - - (516,290) At 30 June 2013 92,006 10,327,554 433,134 33,775 252,331 11,138,800 Netcarryingamount At 1 July 2011 516,694 599,694 74,342 35,422 129,988 1,356,140 At 30 June 2012 505,094 503,400 55,278 28,399 103,259 1,195,430 At 30 June 2013 1,147,994 632,344 90,725 334,674 89,166 2,294,903

During the financial year, the Group acquired a motor vehicle with an aggregate cost of RM606,294 (2012: RM174,690) of which RM422,789 (2012: RM173,673) is financed through a finance lease. The carrying amount of the motor vehicles held under finance lease at the reporting date is RM801,755 (2012: RM226,845).

The Company’s building with a carrying amount of RM654,500 is pledged to secure the Company’s term loan borrowings as disclosed in Note 23 to the financial statements.

The cash outflow on acquisition of property, plant and equipment amounted to RM1,949,093 (2012: RM795,724) and RM1,084,193 (2012: RM196,193) for the Group and the Company respectively.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

14. Intangibleassets

Product development Intellectual Goodwill expenditure property Total RM RM RM RM Group Cost At1July2011 14,623,627 8,276,017 352,047 23,251,691 Additions - 1,660,725 448,049 2,108,774 Exchange differences 47,669 13,555 (23,095) 38,129

At30June2012and1July2012 14,671,296 9,950,297 777,001 25,398,594 Additions - 2,739,548 14,087 2,753,635 Disposal - (382,270) - (382,270) Exchange differences 73,337 51,104 (43,664) 80,777

At30June2013 14,744,633 12,358,679 747,424 27,850,736

Accumulatedamortisationandimpairment At1July2011 1,641,838 7,085,916 54,890 8,782,644 Amortisation (Note 8) - 1,237,252 77,252 1,314,504 Exchange differences - 975 (3,738) (2,763)

At30June2012and1July2012 1,641,838 8,324,143 128,404 10,094,385 Amortisation (Note 8) - 1,554,634 116,886 1,671,520 Impairment during the financial year (Note 8) 7,258,717 - - 7,258,717 Exchange differences - 10,950 (7,107) 3,843

At30June2013 8,900,555 9,889,727 238,183 19,028,465

Netcarryingamount At 1 July 2011 12,981,789 1,190,101 297,157 14,469,047 At 30 June 2012 13,029,458 1,626,154 648,597 15,304,209 At 30 June 2013 5,844,078 2,468,952 509,241 8,822,271

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

14. Intangibleassets(cont’d)

Product development expenditure RM Company Cost At1July2011 8,276,017 Additions 1,231,144

At30June2012and1July2012 9,507,161 Additions 1,331,577

At30June2013 10,838,738 Accumulatedamortisationandimpairment At1July2011 7,085,916 Amortisation (Note 8) 1,206,356 At30June2012and1July2012 8,292,272 Amortisation (Note 8) 1,292,134 At30June2013 9,584,406 Netcarryingamount At 1 July 2011 1,190,101 At 30 June 2012 1,214,889 At 30 June 2013 1,254,332

(a) Amortisationofproductdevelopmentexpenditureandintellectualproperty

The amortisation of the product development expenditure and intellectual property (consisting of digital content rights and licenses acquired) of the Group and the Company have been included in the cost of sales.

(b) Goodwill-Impairmentlossrecognised

The management of the Group carries out a review of the recoverable amounts of the goodwill on an annual basis. Additional impairment loss of RM7,258,717 was recognised in the current year. The recoverable amount was based on value-in-use and was determined at the cash-generating unit (CGU). In determining value-in-use for the CGU, the discount rate applied to cash flow projections is the Group’s internal rate of return.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

14. Intangibleassets(cont’d)

(c) Impairmenttestsforgoodwill

Allocationofgoodwill

Goodwill has been allocated to the Group’s cash generating unit (“CGU”) identified according to the mobile solutions operations of the respective countries as follows:

30.06.2013 30.06.2012 01.07.2011 RM RM RM Indonesia 1,172,597 8,431,314 8,431,314 Thailand 4,671,481 4,598,144 4,550,475 5,844,078 13,029,458 12,981,789

Keyassumptionsusedinvalue-in-usecalculations

The recoverable amount of the CGU is determined based on value-in-use calculations using cash flow projections based on financial forecasts approved by management covering a 5-year period. The cash flows beyond the 5-year period are extrapolated using growth rates which are consistent with the long-term average growth rate for the industry in the respective countries the entity operates.

Key assumptions and management’s approach to determine the values assigned to each key assumption are as follows:

(i) Sales growth and selling prices

The sales growth and the selling prices used to calculate the cash inflows from operations were determined after taking into consideration price trends of the geographical locations which the CGUs are exposed. Values assigned are consistent with the external sources of information.

The mobile solutions operations in Indonesia had been affected by the directive issued by the authorities since October 2011, requiring all telecommunications companies in Indonesia to de-activate premium SMS services and to provide users with an option to re-subscribe to the services.

We remain positive in Thailand’s operation and the increase of goodwill as compared to last financial year was due to currency fluctuation.

(ii) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margins is the average gross margin achieved in the year immediately before the budgeted year increased for expected efficiency improvements.

(iii) Exchange rate

The exchange rate used to translate foreign currencies transactions into the CGUs’ functional currency is based on the exchange rates obtained immediately before the forecast year. Values assigned are consistent with external sources of information.

(iv) Discount rate

The discount rate used of 10.0% to 18.9% per annum (2012: 15% per annum) is pre-tax and reflect the specific risks relating to the operations in the respective countries.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

14. Intangibleassets(cont’d)

Sensitivitytochangesinassumptions

The management believes that no reasonable change in any of the above key assumptions would cause the carrying value of the CGU in Indonesia to materially exceed its recoverable amount.

With regard to the assessment of the value-in-use of the CGU in Thailand, with all other variables held constant except for a sensitivity test on the annual discount rate increasing from 12.25% to 17.25% the incremental impairment of goodwill would have been approximately RM0.7 million.

15. Investmentsinsubsidiaries Company 30.06.2013 30.06.2012 01.07.2011 RM RM RM Unquoted shares at cost 38,621,883 38,621,883 38,621,883 Less: Accumulated impairment losses (11,108,374) (1,789,738) (1,641,838) 27,513,509 36,832,145 36,980,045

Details of the subsidiaries are as follows:

Countryof Effectiveequity incorporation interestheld Nameofsubsidiaries 30.06.2013 30.06.2012 % % M3 Asia Sdn. Bhd. (“M3Asia”) ++ Malaysia 100 100 M3 Online Sdn. Bhd.# Malaysia 100 100 M3 Mobile Technologies (S) Pte. Ltd. *,+,∞ Singapore 100 100 M3Asia Distribution (S) Pte. Ltd.*,++, ∞ Singapore 60 60 Messaging Technologies (H.K.) Limited (“M3Tech HK”) *,+,++,∞ Hong Kong, 100 100 SAR

M3 Technologies (Thailand) Co., Ltd. *,+,++ Thailand 95 95 M3 Technologies Pakistan (Private) Limited (“M3Tech Pakistan”) *,+ Pakistan 60 60 PT Surya Genta Perkasa*, +,++ Indonesia 80 80 Virtue Partners International Limited*,+++ British Virgin 100 100 Islands

HeldunderM3Asia M3Shoppe (Asia) Sdn. Bhd. (“M3Shoppe”) ++++ Malaysia 100 -

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

15. Investmentsinsubsidiaries(cont’d)

Countryof Effectiveequity incorporation interestheld Nameofsubsidiaries 30.06.2013 30.06.2012 % %

HeldunderM3TechHK M3 Technologies (Xiamen) Co., Ltd The People’s 95 93.02 (formerly known as AKN Messaging Technologies Republic of China (Xiamen) Co., Ltd) (“M3Tech Xiamen”) *,+ M3 Technologies (ShenZhen) Company Limited*,++ The People’s 100 100 Republic of China Way Way Innovations Company Limited*,#,∞ Hong Kong, 100 100 SAR

HeldunderM3TechPakistan M3 Technologies Middle East FZE*,+ United Arab 60 60 Emirates

HeldunderM3TechXiamen M3 Interactive (Shen Zhen) Co., Ltd *,+++++ The People’s 95 - Republic of China

* Audited by firms of auditors other than ECOVIS AHL+ Involved in provision of mobile solutions++ Involved in distribution and retailing of fast-moving electronic goods and related products+++ Investment holding company++++ Involved in e-Commerce+++++ Involved in provision of e-Educational services# Dormant∞ The auditors’ report of these subsidiaries contain an emphasis of matter relating to the appropriateness of

the going concern basis of accounting used in the preparation of their financial statements.

(a) Incorporationofsubsidiaries

On 3 December 2012, M3Asia incorporated a wholly-owned subsidiary under the name of M3Shoppe (Asia) Sdn Bhd (“M3Shoppe”) in Malaysia. The intended principal activity of this subsidiary is e-Commerce. This subsidiary has commenced operations during the financial year.

On 21 December 2013, M3Tech Xiamen incorporated a wholly-owned subsidiary under the name of M3 Interactive (Shen Zhen) Pte. Ltd. in The People’s Republic of China. The intended principal activity of this subsidiary is providing e-Educational services. This subsidiary has commenced operations during the financial year.

(b) Impairmentassessmentofinvestmentsinsubsidiaries

Investments in subsidiaries are tested for impairment when such indicators exist. This requires an estimation of the value in use of these investments.

In making this assessment, amongst others, the management has taken into consideration the projected long term growth in both the provision for mobile solutions activities as well as the distribution and retailing activities of the respective subsidiaries of the Group.

Based on the impairment assessment performed, an incremental provision for impairment of subsidiaries of RM9,318,636 has been made in the current year in respect of the investment in M3 Mobile Technologies (S) Pte. Ltd., Messaging Technologies (H.K.) Limited. and PT Surya Genta Perkasa as the estimated recoverable amount of the investments are lower than the carrying amount.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

16. Interestinajointlycontrolledentity

Group 30.06.2013 30.06.2012 01.07.2011 Restated Restated RM RM RM

Unquoted shares, at cost 46 46 46 Advances to a jointly controlled entity 940,473 1,064,223 443,990 Share of post acquisition reserves (203,333) (168,500) (13,088) 737,186 895,769 430,948 Exchange differences 1,004 (3,964) (380) 738,190 891,805 430,568

Company 30.06.2013 30.06.2012 01.07.2011 RM RM RM

Unquoted shares, at cost 46 46 46 Advances to a jointly controlled entity 940,473 1,064,223 443,990 940,519 1,064,269 444,036

On 24 December 2010, the Company entered into an agreement with Lim Cheng Mong (“LCM”) and Nexgen Studio Pte Ltd (“Nexgen”) (“JV agreement”) with the intention of incorporating a company for the provision of e-Educational services.

On 31 January 2011, the above-mentioned parties incorporated M3 Interactive (S) Pte Ltd (“M3 Interactive”), which has an issued and paid up share capital of SGD100. The Company has a 20% equity interest in this investment, which has been equity accounted for as a jointly controlled entity of the Group.

In addition, in last financial year, the Company has provided additional advances to M3 Interactive amounting to SGD252,000 (RM620,233) [2011: SGD168,000 (RM443,990)]. During the current financial year, M3 Interactive has made repayment to the Company amounting to SGD50,000 (RM123,750). Thus, the total advances as at the current date is RM940,473. The advances are unsecured, interest-free, and are to fund the working capital requirements of the application and software development project being undertaken by M3 Interactive.

The Company is entitled to demand the full payment of these advances or to convert the advances due from M3 Interactive into equity, in the event certain milestones of the project as stipulated in the JV agreement are not completed. In addition, under the JV agreement, the Company is required to capitalise the advances to M3 Interactive upon the completion of the project.

The management has assessed and concluded that the fair value of this option to convert the advances into equity is remains unchanged and decided that no provision for impairment of the advances would be required as the advances are expected to be recoverable.

In the last financial year, M3 Interactive has filed a statement of claim in the High Court of Singapore against an ex-director of M3 Interactive and Nexgen (“the defendants”). Subsequently, in September 2012, M3 Interactive, the defendants and the Company, which is also a party to the JV agreement, have entered into a settlement agreement on 11 September 2012, in which the parties involved have agreed a settlement amount of SGD120,000 to be paid by the defendants.

On the terms of the settlement was that M3 Interactive would buy over Nexgen’s share in M3 Interactive. The value of the share is to be determined by a valuer agreed upon by the parties and the parties subsequently appointed an independent valuer, BDO Pte Ltd, (“BDO”) to carry out the valuation.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

16. Interestinajointlycontrolledentity(cont’d)

As at the date of report, BDO has not completed their valuation of M3 Interactive.

The aggregate amounts of the non-current assets, current assets, current liabilities, non-current liabilities, income and expenses related to the Group’s 20% equity interest in the jointly controlled entity are as follows:

Group 30.06.2013 30.06.2012 01.07.2011 Restated Restated RM RM RM AssetsandLiabilities: Non-current assets 5,470 6,928 39,036 Current assets 36,326 68,084 54,377 Current liabilities (244,074) (242,446) (101,952) Incomeandexpenses Income - - - Expenses (34,833) (155,412) (13,088)

17. Inventories

Group 30.06.2013 30.06.2012 01.07.2011 RM RM RM Cost Trading inventories 10,724,694 8,458,121 6,951,503

During the year, the amount of inventories recognised as an expense in cost of sales of the Group was RM17,164,857 (2012: RM15,286,013).

18. Tradeandotherreceivables

Group 30.06.2013 30.06.2012 01.07.2011 RM RM RM Current Tradereceivables Third parties 12,951,883 13,913,048 12,785,209 Less: Allowance for impairment (507,176) - - 12,444,707 13,913,048 12,785,209 Otherreceivables Prepayments 2,399,774 944,937 1,594,960 Sundry receivables 769,139 498,765 252,563 Deposits 1,282,191 1,070,086 409,828 Advances due from staff 55,685 44,561 11,980 4,506,789 2,558,349 2,269,331 Trade and other receivables 16,951,496 16,471,397 15,054,540

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

18. Tradeandotherreceivables(cont’d)

Group 30.06.2013 30.06.2012 01.07.2011 RM RM RM

Allowanceforimpairment At 1 July - - - Addition during the financial year (534,402) - - Exchange differences 27,226 - -

At 30 June (507,176) - -

Trade and other receivables 16,951,496 16,471,397 15,054,540 Less: Prepayments (2,399,774) (944,937) (1,594,960)

14,551,722 15,526,460 13,459,580 Add: Cash and bank balances (Note 19) 18,006,085 19,239,687 20,168,574

Total financial assets classified as loans and receivables 32,557,807 34,766,147 33,628,154

Company 30.06.2013 30.06.2012 01.07.2011 RM RM RM Current Tradereceivables Third parties 2,848,559 3,182,419 3,548,039 Less: Allowance for impairment (29,077) - -

2,819,482 3,182,419 3,548,039

Otherreceivables Due from subsidiaries 11,602,105 9,530,519 7,959,384 Prepayments 218,540 41,042 91,661 Sundry receivables 17,600 33,268 18,814 Deposits 257,293 227,477 222,947

12,095,538 9,832,306 8,292,806 Less: Allowance for impairment (752,783) (777,733) (777,733)

11,342,755 9,054,573 7,515,073

Trade and other receivables 14,162,237 12,236,992 11,063,112

Allowanceforimpairment At 1 July (777,733) (777,733) (777,733) Addition during the financial year (29,077) - - Reversal during the financial year 24,950 - -

At 30 June (781,860) (777,733) (777,733)

Trade and other receivables 14,162,237 12,236,992 11,063,112 Less: Prepayments (218,540) (41,042) (91,661)

13,943,697 12,195,950 10,971,451 Add: Cash and bank balances (Note 19) 4,141,762 2,561,689 6,665,353

Total financial assets classified as loans and receivables 18,085,459 14,757,639 17,636,804

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

18. Tradeandotherreceivables(cont’d)

The amounts due from subsidiaries are mainly in respect of advances. These balances are unsecured and are repayable on demand. The amounts which have been impaired in the prior year relates mainly to the amount due from a subsidiary, which operations have been scaled down.

Trade receivables are non-interest bearing and normal credit term range from 30 to 90 days (2012: 30 to 90 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

The Group has no significant concentration of credit risk that may arise from exposures to a single customer or to groups of customers, other than as disclosed in Note 28(a).

Aging analysis of trade receivables

The aging analysis of the Group’s and Company’s trade receivables is as follows:

Group Company 30.06.2013 30.06.2012 01.07.2011 30.06.2013 30.06.2012 01.07.2011 RM RM RM RM RM RM Neither past due nor impaired 5,461,877 7,978,718 8,257,575 857,933 1,917,169 1,986,306 1 to 30 days past due not impaired 2,317,382 1,937,848 1,679,906 438,983 561,439 794,170 31 to 60 days past due not impaired 2,028,725 1,629,340 745,345 387,783 406,603 153,195 61 to 90 days past due not impaired 659,359 506,163 873,693 303,675 49,101 290,979 More than 91 days past due not impaired 1,977,364 1,860,979 1,228,690 831,108 248,107 323,389 6,982,830 5,934,330 4,527,634 1,961,549 1,265,250 1,561,733

12,444,707 13,913,048 12,785,209 2,819,482 3,182,419 3,548,039

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group and the Company.

None of the Group’s and the Company’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group and the Company have trade receivables amounting to RM6,982,830 (2012: RM5,934,330) and RM1,961,549 (2012: RM1,265,250) respectively that are past due at the reporting date but not impaired. These receivables are unsecured.

Receivables that are impaired

As at the reporting date, there are no third party debtors’ balances which have been individually or collectively impaired.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

19. Cashandbankbalances

Group Company 30.06.2013 30.06.2012 01.07.2011 30.06.2013 30.06.2012 01.07.2011 RM RM RM RM RM RM Cash on hand and at banks 15,745,109 14,447,142 14,700,904 4,056,614 2,478,777 6,395,307 Deposits with licensed banks 2,260,976 4,792,545 5,467,670 85,148 82,912 270,046

18,006,085 19,239,687 20,168,574 4,141,762 2,561,689 6,665,353

The deposits with licensed banks bore interest ranging from to 1.63% to 5.75% (2012: 1.35% to 5.5%) per annum and have maturity periods ranging from 1 to 180 days (2012: 1 to 180 days).

20. Sharecapital,sharepremiumandtreasuryshares

Numberofordinaryshares ofRM0.10each Amount Totalshare Sharecapital Sharecapital capitaland (Issuedand Treasury (Issuedand Share share Treasury fullypaid) shares fullypaid) Premium premium shares RM RM RM RM GroupandCompany At 1 July 2012 163,518,740 (2,557,500) 16,351,874 2,351,731 18,703,605 (565,639) Issue of shares 16,096,000 - 1,609,600 2,040,971 3,650,571 -

At 30 June 2013 179,614,740 (2,557,500) 17,961,474 4,392,702 22,354,176 (565,639)

At 1 July 2011 163,518,740 (1,614,500) 16,351,874 2,351,731 18,703,605 (315,637) Purchase of treasury shares - (943,000) - - - (250,002)

At 30 June 2012 163,518,740 (2,557,500) 16,351,874 2,351,731 18,703,605 (565,639)

NumberofordinarysharesofRM0.10each Amount 30.06.2013 30.06.2012 01.07.2011 30.06.2013 30.06.2012 01.07.2011 RM RM RM RM RM RM Authorisedshare capital At 1 July 2011 and at 30 June 2012 and 30 June 2013 250,000,000 250,000,000 250,000,000 25,000,000 25,000,000 25,000,000

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

20. Sharecapital,sharepremiumandtreasuryshares(cont’d)

(a) Sharecapital

The holders of ordinary shares (except treasury 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.

On 7 November 2012, the issued and paid-up share capital of the Company has increased from RM16,351,874 to RM17,961,474 by issuing 16,096,000 new ordinary shares of RM0.10 each at an issue price of RM0.2268 each pursuant to the private placement.

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

(b) Treasuryshares

This amount relates to the acquisition cost of treasury shares.

The shareholders of the Company, by an ordinary resolution passed in the Annual General Meeting held on 22 November 2011 approved the renewal of the Company’s plan to repurchase its own ordinary shares. The directors of the Company believe that the repurchase plan can be applied in the best interest of the Company and its shareholders.

In last financial year, the Company repurchased 943,000 of its issued ordinary shares from the open market at an average price of RM0.27 per share. The total consideration paid for the repurchase was RM250,002. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

21. Otherreserves(non-distributable)

Group 30.06.2013 30.06.2012 01.07.2011 Restated Restated RM RM RM Foreign currency translation reserve 48,023 109,318 -

Company 30.06.2013 30.06.2012 01.07.2011 RM RM RM Special reserve 16,074,240 16,074,240 16,074,240

(a) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

21. Otherreserves(non-distributable)(cont’d)

(b) Special reserve

In the financial year ended 30 June 2005, the Company had obtained approval from the High Court of Malaya, pursuant to Section 64 of the Companies Act, 1965, to reduce the share premium account of the Company by RM16,074,240 and for such amount to be transferred to a Special Reserve Account and thereon to set off the goodwill arising from the acquisition of a wholly owned subsidiary, Messaging Technologies (H.K.) Limited against the Special Reserve Account.

22. Retainedearnings

Prior to the year of assessment 2008, Malaysian companies adopt the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system.

The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act 2007.

The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the transitional period, the Company may utilise the credit in the 108 balance as at 30 June 2013 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Act 2007.

As at 30 June 2013, the Company has sufficient tax exempt profits and credit in the 108 balance to pay franked dividends out of its entire retained earnings.

23. Loansandborrowings Group 30.06.2013 30.06.2012 01.07.2011 RM RM RM Current Secured: Bank borrowings 2,638,290 744,579 - Term loan 53,172 - - Obligation under finance leases (Note 26(b)) 125,998 48,586 26,909 2,817,460 793,165 26,909 Non-current Secured: Term loan 589,270 - - Obligation under finance leases (Note 26(b)) 408,588 152,075 34,933 997,858 152,075 34,933 Totalloansandborrowings Bank borrowings 2,638,290 744,579 - Term loan 642,442 - - Obligation under finance leases (Note 26(b)) 534,586 200,661 61,842 3,815,318 945,240 61,842

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

23. Loansandborrowings(cont’d)

Company 30.06.2013 30.06.2012 01.07.2011 RM RM RM Current Secured: Bank borrowings 2,638,290 744,579 - Term loan 53,172 - - Obligation under finance leases (Note 26(b)) 58,712 - - 2,750,174 744,579 - Non-current Secured: Term loan 589,269 - - Obligation under finance leases (Note 26(b)) 211,200 - - 800,469 - - Totalloansandborrowings Bank borrowings 2,638,290 744,579 - Term loan 642,441 - - Obligation under finance leases (Note 26(b)) 269,912 - - 3,550,643 744,579 -

The bank borrowings of the Group and the Company relate to trade facilities for the purchases of inventories by subsidiaries of the Group. The borrowings are secured via a guarantee from a subsidiary, M3 Asia Sdn Bhd.

The Group and the Company is required to comply with certain terms and conditions, including maintaining the debt service ratio prescribed by the bank. The debt service ratio is computed based on the earnings before tax, interest, depreciation and amortisation (EBITDA) against the current portion of all term debts and interest expense.

The term loan of the Company which is obtained from banking institution is secured by First Party First Legal Deed of Assignment over a building of the Company as disclosed in Note 13 to the financial statements.

The remaining maturities of the loans and borrowings as at 30 June 2013 are as follows:

Group Company 30.06.2013 30.06.2012 01.07.2011 30.06.2013 30.06.2012 01.07.2011 RM RM RM RM RM RM On demand or within 1 year 2,817,460 793,165 26,909 2,750,174 744,579 - More than 1 year and less than 2 years 172,645 33,096 24,674 117,239 - - More than 2 years and less than 5 years 825,213 118,979 10,259 683,230 - -

3,815,318 945,240 61,842 3,550,643 744,579 -

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

23. Loansandborrowings(cont’d)

At the reporting date, the applicable effective interest rates are as follows:

Group Company 30.06.2013 30.06.2012 01.07.2011 30.06.2013 30.06.2012 01.07.2011 % % % % % % Bank borrowings 1.20 1.42 - 1.20 1.42 - Term loan 4.50 - - 4.50 - - Obligation under finance leases 2.38 – 5.35 4.30 – 5.35 4.30 2.38 – 2.51 - -

24. Deferredtax

Group 30.06.2013 30.06.2012 01.07.2011 RM RM RM At 1 July 158,005 181,602 95,563 Recognised in the profit or loss (Note 11) - (19,282) 93,849 Exchange differences (3,520) (4,315) (7,810)

At 30 June 154,485 158,005 181,602

Company 30.06.2013 30.06.2012 01.07.2011 RM RM RM At 1 July - 104,642 91,000 Recognised in the profit or loss (Note 11) - (104,642) 13,642

At 30 June - - 104,642

Presented after appropriate offsetting as follows:

Group Company 30.06.2013 30.06.2012 01.07.2011 30.06.2013 30.06.2012 01.07.2011 RM RM RM RM RM RM Deferred tax assets - - (107,954) - - - Deferred tax liabilities 154,486 158,005 289,556 - - 104,642

154,486 158,005 181,602 - - 104,642

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

24. Deferredtax(cont’d)

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Group

Property Product plantand development Unutilised equipment expenditure Others taxlosses Total RM RM RM RM RM As at 1 July 2012 168,625 - (10,620) - 158,005 Recognised in profit or loss - - - - - Exchange differences (3,520) - - - (3,520)

As at 30 June 2013 165,105 - (10,620) - 154,485

As at 1 July 2011 309,091 297,525 (128,529) (296,485) 181,602 Recognised in profit or loss (136,091) (297,525) 117,909 296,425 (19,282) Exchange differences (4,375) - - 60 (4,315)

As at 30 June 2012 168,625 - (10,620) - 158,005

Company As at 1 July 2012 - - - - - Recognised in profit or loss - - - - -

As at 30 June 2013 - - - - -

As at 1 July 2011 88,838 297,525 (93,190) (188,531) 104,642 Recognised in profit or loss (88,838) (297,525) 93,190 188,531 (104,642)

As at 30 June 2012 - - - - -

Deferred tax assets have not been recognised in respect of the following items:

Group 30.06.2013 30.06.2012 01.07.2011 RM RM RM Unused tax losses and capital allowances 2,391,279 3,445,183 747,485 Other (taxable)/deductible temporary differences, net (992,926) (1,020,034) 52,279

Amounts not recognised, net 1,398,353 2,425,149 799,764

Company 30.06.2013 30.06.2012 01.07.2011 RM RM RM Unused tax losses and capital allowances 1,954,434 1,319,098 - Other taxable temporary differences, net (992,926) (1,040,466) -

Amounts not recognised, net 961,508 278,632 -

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

24. Deferredtax(cont’d)

The deferred tax assets arising from the unutilised tax losses and capital allowances have only been recognised to the extent that the Group and the Company have sufficient taxable temporary differences available, as these arose from the Company and certain subsidiaries with a recent history of losses and it is not probable that future taxable profit will be available against which the unused tax losses, unabsorbed capital allowances can be utilised.

The unused tax losses and unabsorbed capital allowances of the Company are available indefinitely for offsetting against future taxable profits, subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.

At the reporting date, no deferred tax liability (2012: Nil) has been recognised for taxes that would be payable on the undistributed earnings of certain foreign subsidiaries. The Group has determined that these undistributed earnings of the subsidiaries will not be distributed in the foreseeable future. Such temporary differences for which no deferred tax liability has been recognised aggregate to RM14,835,657 (2012: RM15,108,968). The deferred tax liability relating to such temporary differences which is not recognised is estimated to be RM1,590,306 (2012: RM1,644,415).

25. Tradeandotherpayables

Group 30.06.2013 30.06.2012 01.07.2011 RM RM RM Tradepayables Third parties 4,988,655 6,496,011 6,040,251 Otherpayables Accruals of other expenses 1,051,037 1,181,909 1,395,441 Accruals of employee related expenses 1,336,151 1,254,217 1,262,304 Sundry payables 353,176 287,300 509,829 Other statutory payables 497,015 362,596 288,047 Amount due to director - 8,064 - 3,237,379 3,094,086 3,455,621 Trade and other payables 8,226,034 9,590,097 9,495,872

Trade and other payables 8,226,034 9,590,097 9,495,872 Less: Accruals of employee related expenses and other statutory payables (1,833,166) (1,616,813) (1,550,351) Add: Loans and borrowings (Note 23) 3,815,318 945,240 61,842 Total financial liabilities carried at amortised cost 10,208,186 8,918,524 8,007,363

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

25. Tradeandotherpayables(cont’d)

Company 30.06.2013 30.06.2012 01.07.2011 RM RM RM Tradepayables Third parties 1,712,862 1,846,227 2,039,503 Otherpayables Accruals of other expenses 85,790 316,732 773,315 Accruals of employee related expenses 465,192 529,601 589,075 Sundry payables 121,895 17,954 25,563 Other statutory payables 218,973 202,277 220,431 891,850 1,066,564 1,608,384 Trade and other payables 2,604,712 2,912,791 3,647,887 Trade and other payables 2,604,712 2,912,791 3,647,887 Less: Accruals of employee related expenses and other statutory payables (684,165) (731,878) (809,506) Add: Loans and borrowings (Note 23) 3,550,643 744,579 - Total financial liabilities carried at amortised cost 5,471,190 2,925,492 2,838,381

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group ranged from 30 to 90 days (2012: 30 to 90 days).

26. Commitments

(a) Operatingleasearrangements-aslessee

The Group and the Company lease various properties under cancellable operating lease agreements. The Group and the Company are required to give appropriate notice for the termination of those agreements.

Certain subsidiaries of the Group have commitments for future minimum lease payments under non-cancellable operating lease rentals as follows:

Group 2013 2012 RM RM Less than one year 348,747 - Between one and five years 234,897 -

583,644 -

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

26. Commitments(cont’d)

(b) Financeleasecommitments

The Group has finance leases for certain motor vehicles (See Note 13). Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Group Company 30.06.2013 30.06.2012 30.06.2013 30.06.2012 RM RM RM RM Minimumleasepayments: Not later than 1 year 144,288 58,746 69,949 - Later than 1 year and not later than 2 years 130,901 40,844 69,948 - Later than 2 years and not later than 5 years 308,617 133,487 157,304 - Total minimum lease payments 583,806 233,077 297,201 - Amounts representing finance charges (49,220) (32,416) (27,289) -

Present value of minimum lease payments (Note 23) 534,586 200,661 269,912 - Presentvalueofpayments: Not later than 1 year 125,998 48,586 58,712 - Later than 1 year and not later than 2 years 117,081 33,096 61,675 - Later than 2 years and not later than 5 years 291,507 118,979 149,525 -

Present value of minimum lease payments 534,586 200,661 269,912 - Less: Amount due within 12 months (Note 23) (125,998) (48,586) (58,712) -

Amount due after 12 months (Note 23) 408,588 152,075 211,200 -

Other information on financial risks of finance lease obligations is disclosed in Note 28.

27. Relatedpartydisclosures

(a) In addition to the transactions detailed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place at terms agreed between the parties during the financial year:

2013 2012 RM RM Group Rental expenses charged by Adventurous Limited, a company in which a director, i.e. Chew Shin Yong, Mark has interest - 60,813 Administration and service fee charged by Malahon Credit Company Limited, a company in which a director, i.e. Chew Shin Yong, Mark has interest 39,518 22,656

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

27. Relatedpartydisclosures(cont’d)

(b) Compensationofkeymanagementpersonnel

The remuneration of directors and other members of key management during the year was as follows:

Group Company 2013 2012 2013 2012 RM RM RM RM Short-term employee benefits 2,657,659 2,683,178 1,372,310 1,315,787 Defined contribution plans and social security contributions 303,365 230,129 167,482 160,821 Others 173,698 138,497 150,835 121,113 3,134,722 3,051,804 1,690,627 1,597,721

Included in the total remuneration of key management personnel are:

Group Company 2013 2012 2013 2012 RM RM RM RM

Directors’ remuneration - salaries and other emoluments (Note 10) 1,335,917 1,406,825 964,844 929,029 Directors’ fees (Note 10) 173,697 138,497 150,835 121,113

1,509,614 1,545,322 1,115,679 1,050,142

28. Financialriskmanagementobjectivesandpolicies

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

The Board of Directors reviews and agrees policies and procedures for the management of these risks. The audit committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(a) Creditrisk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and bank balances), the Group and the Company minimise credit risk by limiting the Group’s associations to business partners with high creditworthiness. Trade receivables are monitored on an ongoing basis via the Group’s management reports.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

28. Financialriskmanagementobjectivesandpolicies(cont’d)

(a) Creditrisk(cont’d)

Exposure to credit risk

Information regarding credit enhancements for trade and other receivables is disclosed in Note 18.

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the country and industry sector profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

2013 2012 RM % RM %

Bycountry: Malaysia 5,717,841 46 6,399,600 46 Pakistan 4,148,051 33 3,732,514 27 Thailand 646,317 5 1,380,420 10 Singapore 298,513 3 930,437 7 China 914,681 7 658,175 5 Indonesia 618,020 5 577,134 4 Other countries 101,284 1 234,768 1 12,444,707 100 13,913,048 100

The Group and the Company have approximately 38% (2012: 59%) and 41% (2012: 51%) of the outstanding trade receivables as at 30 June 2013 due from various major telecommunication companies for the provision of SMS content and services.

In addition, approximately 10% (2012: 10%) of the outstanding trade receivables of the Group are due from certain key distributors and wholesalers for the sales of electronic goods and related products.

Financial assets that are neither past due nor impaired

Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 18. Deposits with banks and other financial institutions, investment securities and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 18.

(b) Liquidityrisk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

28. Financialriskmanagementobjectivesandpolicies(cont’d)

(b) Liquidityrisk(cont’d)

Analysisoffinancialinstrumentsbyremainingcontractualmaturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

Ondemand orwithin 1to Over 1year 5years 5years Total 2013 RM RM RM RM Group Financialliabilities: Trade and other payables* 6,392,868 - - 6,392,868 Loans and borrowings^ 2,864,660 767,843 367,374 3,999,877

Total undiscounted financial liabilities 9,257,528 767,843 367,374 10,392,745 Company Financialliabilities: Trade and other payables* 1,920,547 - - 1,920,547 Loans and borrowings^ 2,790,320 555,578 367,374 3,713,272

Total undiscounted financial liabilities 4,710,867 555,578 367,374 5,633,819

2012 Group Financialliabilities: Trade and other payables* (Restated) 7,973,284 - - 7,973,284 Loans and borrowings^ 805,087 174,331 - 979,418

Total undiscounted financial liabilities 8,778,371 174,331 - 8,952,702 Company Financialliabilities: Trade and other payables* 2,180,913 - - 2,180,913 Loans and borrowings^ 746,341 - - 746,341

Total undiscounted financial liabilities 2,927,254 - - 2,927,254

* Excludes items which are not within the scope of MFRS 139 ^ Includes the interest portion of the finance lease obligations

(c) Interestraterisk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates. The Group and the Company’s exposure to interest rate risk is minimised, as the Group and the Company does not have any significant loans and borrowings, other than finance lease obligations, term loans and bank borrowings which bear interest at fixed rates.

The investment in financial assets are mainly short term in nature and they are not held for speculative purposes but have been mostly placed in fixed deposits which yield better returns than cash at bank.

As such, no sensitivity analysis of interest risk has been disclosed in the financial statements.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

28. Financialriskmanagementobjectivesandpolicies(cont’d)

(d) Foreigncurrencyrisk

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 subsidiaries of the Group transact mainly in their respective functional currencies. As such, the transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of Group entities (primarily RM, Hong Kong Dollar (“HKD”), Pakistan Rupees (“PKR”), United States Dollar (“USD”), RenMinBi (“RMB”), United Arab Emirates Dirham (“AED”) and Euro Dollar (“EUR”)) is minimal.

The Group and the Company hold cash and cash equivalents denominated in foreign currencies (other than the respective functional currencies of the Group entities) for working capital purposes. At the reporting date, the RM equivalent of such foreign currency balances (mainly in USD) amounted to RM31,339 (2012: RM444,602) and RM95 (2012: RM1,198,662) (in PKR) for the Group and the Company respectively. The Group and the Company also has bank borrowings denominated in USD amounting to RM2,638,290. Certain subsidiaries of the Group have trade payables denominated in USD amounting to RM1,997,484 (2012: RM2,817,749).

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the USD exchange rates against the respective functional currencies of the Group entities and an analysis of the effects of a change in the functional currencies of the Group entities against the RM, with all other variables held constant.

Group 2013 2012 Impacton Profitnet Impacton Profitnet equity oftax equity oftax RM RM RM RM USD/MYR - strengthened 5% 169,302 (224,202) 132,950 (106,561) - weakened 5% (169,302) 224,202 (132,950) 106,561 IDR/MYR - strengthened 5% 121,527 - 129,935 (23,910) - weakened 5% (121,527) - (129,935) 23,910 RMB/MYR - strengthened 5% 275,173 1,288 187,886 (76,787) - weakened 5% (275,173) (1,288) (187,886) 76,787 PKR/MYR - strengthened 5% 439,929 - 220,803 41,338 - weakened 5% (439,929) - (220,803) (41,338) THB/MYR - strengthened 5% 397,364 - 309,631 30,458 - weakened 5% (397,364) - (309,631) (30,458) HKD/MYR - strengthened 5% 11,216 - (68,899) (88,252) - weakened 5% (11,216) - 68,899 88,252 SGD/MYR - strengthened 5% (101,279) - (57,239) (219,088) - weakened 5% 101,279 - 57,239 219,088 AED/MYR - strengthened 5% 83,178 - - - - weakened 5% (83,178) - - - EUR/MYR - strengthened 5% - 5,418 - - - weakened 5% - (5,418) - - USD/HKD - strengthened 5% - - - 8,536 - weakened 5% - - - (8,536) USD/IDR - strengthened 5% - - - 4,348 - weakened 5% - - - (4,348) USD/SGD - strengthened 5% - - - (16,193) - weakened 5% - - - 16,193

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

28. Financialriskmanagementobjectivesandpolicies(cont’d)

(d) Foreigncurrencyrisk(cont’d)

Company 2013 2012 Profitnet Profitnet oftax oftax RM RM USD/MYR - strengthened 5% (132,052) (118,742) - weakened 5% 132,052 118,742 PKR/MYR - strengthened 5% 2,406 59,933 - weakened 5% (2,406) (59,933)

(e) Marketpricerisk

Market price 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 prices (other than interest or exchange rates).

The Group is not exposed to market price risk as it does not have any investment in quoted equity instrument.

29. Fairvalueoffinancialinstruments

Determinationoffairvalue

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are

reasonable approximation of fair value: Note Trade and other receivables (current) 18 Trade and other payables (current) 25 Loans and borrowings (current and non-current) 23

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either 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.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

Amounts due from subsidiaries and a jointly controlled entity and finance lease obligations

The fair values of these financial instruments are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

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29. Fairvalueoffinancialinstruments(cont’d)

Determinationoffairvalue(cont’d)

Option to convert advances to a jointly controlled entity into equity

The fair value of the option to convert the advances to a jointly controlled entity into equity as disclosed in Note 16 is valued using a valuation technique, incorporating various inputs including the expected conversion rate and the estimated current fair value of the investment in the jointly controlled entity.

Fair value of financial instruments by classes that are carried at fair value

Fair value hierarchy

The Group and the Company classify fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The option to convert the advances given by the Company to a jointly controlled entity (Note 16), which the fair value has been assessed as minimal in 2013 and 2012 is determined based on the Level 2 hierarchy.

There are no other financial assets or liabilities of the Group and the Company which are carried at fair value. There are no transfers between the different fair value hierarchies during the financial years ended 30 June 2013 and 2012.

30. Capitalmanagement

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To

maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 30 June 2013 and 30 June 2012.

The Group and the Company are not subject to any externally imposed capital requirements, other than certain debt covenants relating to the bank borrowings (Note 23).

In addition to the covenants on the bank borrowings, the Group monitors capital using net gearing ratio, which is net debt (or net cash) divided by equity attributable to the owners of the parent. The Group’s policy is to keep the Group net gearing ratio at a level deemed appropriate considering business, economic and investment conditions.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

30. Capitalmanagement(cont’d)

Group Company Note 2013 2012 2013 2012 RM RM RM RM Loans and borrowings 23 3,815,318 945,240 3,550,643 744,579 Less: Cash and bank balances 19 (18,006,085) (19,239,687) (4,141,762) (2,561,689) Net cash (14,190,767) (18,294,447) (591,119) (1,817,110) Equity attributable to the owners of the parent 44,332,988 48,781,400 44,218,829 51,543,589 Netgearing/Netcash Net cash Net cash Net cash Net cash

31. Segmentalinformation

(a) Reportingformat

For management purpose, the Group is organised into business segments on the geographical areas in which the business unit operates, and has four main reportable operating segments as follows:

i. Malaysia; ii. Thailand; iii. Pakistan; and iv. Other Asian Countries.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. The comparative segmental information has been restated to be comparable to the segment presentation in the current year, due to the increased significance of certain operating segments.

(b) Allocationbasisandtransferpricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and expenses.

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.

Interest income

Interest income is separately reported from interest expense and excluded from calculation of segment results. Interest revenue is classified under unallocated income while interest expense remains in finance costs.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

31. Segmentalinformation(cont’d)

Geographicalsegments

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by geographical segments:

OtherAsian 2013 Malaysia Thailand Pakistan Countries Elimination Consolidated RM RM RM RM RM RM Revenue External sales 30,549,863 6,244,900 8,058,955 5,015,217 - 49,868,935 Inter-segment revenue - 1,411,912 78,078 1,666,307 (3,156,297) -

Total revenue 30,549,863 7,656,812 8,137,033 6,681,524 (3,156,297) 49,868,935

Results Segment results (6,313,076) Interest expense (33,025) Interest income 130,840 Share of loss of a jointly controlled entity (34,833)

Loss before tax (6,250,094) Income tax expense (1,205,937)

Loss for the year (7,456,031)

Assets Segment assets 67,991,510 9,227,323 10,780,386 25,376,815 (54,053,575) 59,322,459 Interest in a jointly controlled entity 738,190 Tax assets 638,545

Total assets 60,699,194

Liabilities Segment liabilities 21,325,080 1,239,803 1,992,584 14,342,578 (26,858,693) 12,041,352 Tax liabilities 194,732

Total liabilities 12,236,084

Othersegment information Capital expenditure 1,590,045 269,400 277,298 235,139 - 2,371,882 Additions of intangible assets 1,331,577 - 14,088 1,407,970 - 2,753,635 Depreciation 370,697 122,852 266,645 284,023 - 1,044,217 Amortisation 1,292,134 - 116,886 262,500 - 1,671,520 Impairment loss of goodwill 7,258,717 - - - - 7,258,717 Unrealised loss/(gain) on foreign exchange 105,140 57,125 (39,834) (8,259) 68,445 182,617 Non-cash expenses other than depreciation, amortisation and unrealised exchange differences 6,758 29,348 145,287 - 24,950 206,343

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

31. Segmentalinformation(cont’d)

Geographicalsegments(cont’d)

OtherAsian 2012 Malaysia Thailand Pakistan Countries Elimination Consolidated Restated RM RM RM RM RM RM Revenue External sales 32,602,837 6,993,521 8,396,617 8,291,847 - 56,284,822 Inter-segment revenue 8,389 701,024 - 640,377 (1,349,790) -

Total revenue 32,611,226 7,694,545 8,396,617 8,932,224 (1,349,790) 56,284,822

Results Segment results 7,464,208 Interest expense (6,712) Interest income 264,435 Share of loss of a jointly controlled entity (155,412)

Profit before tax 7,566,519 Income tax expense (2,468,591)

Profit for the year 5,097,928

Assets Segment assets 25,108,264 12,948,550 8,941,866 25,634,859 (9,519,369) 63,114,170 Interest in a jointly controlled entity 891,805 Tax assets 266,203

Total assets 64,272,178

Liabilities Segment liabilities 8,314,372 1,116,721 1,786,566 9,531,739 (10,214,061) 10,535,337 Tax liabilities 996,359

Total liabilities 11,531,696

Othersegment information Capital expenditure 270,746 53,648 336,095 308,908 - 969,397 Additions of intangible assets 1,231,144 - 448,049 429,581 - 2,108,774 Depreciation 444,544 105,543 241,339 295,240 - 1,086,666 Amortisation 1,206,356 - 77,252 30,896 - 1,314,504 Unrealised gain on foreign exchange 269,536 27,324 5,030 (353,776) - (51,886) Non-cash expenses other than depreciation, amortisation and unrealised exchange differences 73,579 - 431,486 - - 505,065

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

31. Segmentalinformation(cont’d)

Non-current assets information, other than deferred tax asset, based on the geographical location of assets is as follows:

Group 2013 2012 RM RM Malaysia 10,651,857 3,892,843 Thailand** 421,655 4,868,740 Pakistan 1,049,132 1,209,909 Other Asian countries** 2,255,730 9,865,278 14,378,374 19,836,770

** Includes the goodwill on consolidation allocated to the respective CGUs

The concentration of revenue from external customers is at the following countries:

Group 2013 2012 RM RM Malaysia 30,549,863 32,602,837 Pakistan 8,058,955 8,396,617 Thailand 6,244,900 6,993,521 Indonesia 2,274,736 2,804,147

Revenue from external customers classified by service and product is as follows:

Group 2013 2012 RM RM Provision of mobile solutions 26,776,557 31,407,655 Sales of fast-moving electronic goods and related products 23,092,378 24,877,167 49,868,935 56,284,822

The revenue derived from various telecommunication companies in different countries constitute 54% (2012: 56%) of the Group’s total revenue.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

32. Dividends GroupandCompany 2013 2012 RM RM Recognisedduringthefinancialyear: Third interim tax exempt dividend for 2011: 5% on 161,904,240 ordinary shares (0.5 sen per ordinary share) - 809,521 First interim tax exempt dividend for 2012: 5% on 161,894,240 ordinary shares (0.5 sen per ordinary share) - 809,471 - 1,618,992

The directors do not recommend the payment of a final dividend for the financial year ended 30 June 2013.

33. Significanteventduringthefinancialyear

On 4 March 2013 the Company offered to acquire 383,900 ordinary shares of RM1.00 each in Fotokem Sdn. Bhd. (“Fotokem”), representing 23.993% equity interest in Fotokem from Ngui Woon Kong and Wong Lim Patt @ Wong Lim Fatt (collectively referred to as the “Vendors”) for a total cash consideration of RM5,998,438, subject to the following:

i) Satisfactory outcome of the financial, tax and legal due diligence of the Fotokem and its subsidiary companies (“Fotokem Group”); and

ii) Terms and conditions in the shares sale agreement (“SSA”), shareholders agreement and profit guarantee agreement (collectively referred to as the “Agreements”) to be negotiated between the Company and the Vendors.

The Vendors have acknowledged and accepted the abovementioned offer by the Company on 4 March 2013.

As at the date of this report, the financial, tax and legal due diligence of the Fotokem and its subsidiary companies were completed. Subject to the shares sale agreement, shareholders agreement and profit guarantee agreement to be negotiated.

34. Priorperiodadjustments

There were two errors in prior years were discovered during the financial year.

The details of the two errors in prior years are as follows:

(i) M3 Technologies Pakistan (Private) Limited (“M3Tech Pakistan”)

In previous years, M3Tech Pakistan made purchases from international content vendors and accounted for royalty expense and related payable net of income tax instead of at the gross amounts in a view that withholding tax was to be booked while making remittances. While making payments during the current year, the management identified that royalty expense was understated in previous years by an amount of Rupees 5,837,330 owing to aforesaid reason. As a result, M3Tech Pakistan recorded this remaining amount of royalty expense and related payable on account creditors / income tax deducted at source in the financial statements retrospectively as prior period error.

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

34. Priorperiodadjustments(cont’d)

(i) M3 Technologies Pakistan (Private) Limited (“M3Tech Pakistan”) (cont’d)

The effect of retrospective restatement on the statements of financial position as at 30 June 2012 and 30 June 2011 are as below:

30June2012 30June2011 RM RM Decrease in retained earnings 124,610 89,269 Increase in foreign currency translation reserve (6,229) (1,907) Decrease in non-controlling interests 78,921 58,242 Increase in trade payables (197,302) (145,604)

(ii) M3 Interactive (S) Pte. Ltd

The correction made in the jointly controlled entity due to the previous years’ financial statements was unaudited.

The effect of retrospective restatement on the statements of financial position as at 30 June 2012 and 30 June 2011 are as below:

30June2012 30June2011 RM RM (Decrease)/increase in interest in jointly controlled entity (124,594) 24 Decrease/(increase) in retained earnings 121,999 (24) Decrease in foreign currency translation reserve 2,595 -

The reconciliations of the statements of financial position on the total effects are as below:

(i) Reconciliation as at 30 June 2011

Effectsof Asat Retrospective Asat 30.06.2011 restatement 30.06.2011 Restated RM RM RM Interest in jointly controlled entity 430,544 24 430,568 Retained earnings (29,512,105) 89,245 (29,422,860) Foreign currency translation reserve 1,137,154 (1,907) 1,135,247 Non-controlling interests (3,091,167) 58,242 (3,032,925) Trade payables (9,350,268) (145,604) (9,495,872)

(ii) Reconciliation as at 30 June 2012

Effectsof Asat Retrospective Asat 30.06.2012 restatement 30.06.2012 Restated RM RM RM Interest in jointly controlled entity 1,016,399 (124,594) 891,805 Retained earnings (31,915,972) 246,609 (31,669,363) Foreign currency translation reserve 1,029,563 (3,634) 1,025,929 Non-controlling interests (4,038,003) 78,921 (3,959,082) Trade payables (9,392,795) (197,302) (9,590,097)

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Notes to the Financial Statements (cont’d)For the financial year ended 30 June 2013

35. ExplanationoftransitiontoMFRS

As stated in Note 2, these are the first financial statements of the Group prepared in accordance with MFRSs.

The accounting policies set out in Note 2.1 have been applied in preparing the financial statements of the Group for the year ended 30 June 2013, the comparative information presented in these financial statements for the year ended 30 June 2012 and in the preparation of the opening MFRS statement of financial position at 1 July 2011 (the Group’s date of transition to MFRSs).

The transition to MFRSs does not have financial impact to the separate financial statements of the Company.

In preparing the opening MFRS statements of financial position at 1 July 2011, the Group have adjusted amounts reported previously in financial statements prepared in accordance with FRSs. An explanation of how the transition from FRSs to MFRSs has affected the Group’s financial position is set out as follows:

a) Foreign currency translation reserve

Under FRSs, the Group recognised foreign currency translation differences in other comprehensive income and accumulated the amount in the foreign currency translation reserve in equity.

Upon transition to MFRSs, the Group have elected to deem all foreign currency translation differences that arose prior to the date of transition in respect of all foreign operations to be nil at the date of transition.

(i) Reconciliation of equity as at 1 July 2011

Effectsof FRSasat transitionto MFRSsasat 01.07.2011 MFRSs 01.07.2011 RM RM RM Restated Restated

Group Retained earnings 29,422,860 (1,135,247) 28,287,613 Foreign currency translation reserve (1,135,247) 1,135,247 -

(ii) Reconciliation of equity as at 30 June 2012

Effectsof FRSasat transitionto MFRSsasat 30.06.2012 MFRSs 30.06.2012 RM RM RM Restated Restated

Group Retained earnings 31,669,363 (1,135,247) 30,534,116 Foreign currency translation reserve (1,025,929) 1,135,247 109,318

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Supplementary Information

36. Supplementaryinformation–breakdownofretainedprofitsintorealisedandunrealised

The breakdown of the retained profits of the Group and of the Company as at 30 June 2013 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with 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.

The retained earnings as at reporting date may be analysed as follows:

Group 30.06.2013 30.06.2012 RM RM Restated Total retained profits of the Company and its subsidiaries - Realised 20,750,318 30,180,548 - Unrealised (337,102) (106,119) Total share of retained profits from a jointly controlled entity - Realised (203,333) (168,500) Consolidation adjustments 2,286,545 628,187 22,496,428 30,534,116

Company 30.06.2013 30.06.2012 RM RM

Total retained profits - Realised 6,382,815 17,376,916 - Unrealised (26,763) (45,533) 6,356,052 17,331,383

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List of Properties

Location Description Landarea/ Tenure Approximate NetBookValue (Built-uparea) AgeofBuilding RM

Unit1007, Block A, Pusat Office Lot 2,506 sq.ft. Freehold 16 years 493,494.00Dagangan Phileo Damansara 2 Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan,Malaysia.

Unit 708, Block A Pusat Office Lot 2,506 sq.ft. Freehold 16 years 654,500.00Dagangan Phileo Damansara 2 Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan,Malaysia.

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Analysis of ShareholdingsAs at 8 October 2013

Authorised Capital : RM25,000,000Issued and Fully Paid-Up Capital : RM17,961,474 comprising 179,614,740 Ordinary Shares of RM0.10 eachClass of Equity Securities : Ordinary Shares of RM0.10 each (“Shares”)Voting Rights : One vote per shareholder on a show of hands or one vote per Share on a poll

DistributionScheduleofShareholders

No.ofHolders SizeofHoldings No.ofShares** %#

31 Less than 100 shares 1,490 *427 100 - 1,000 shares 353,714 0.201,292 1,001 - 10,000 shares 6,741,800 3.81774 10,001 - 100,000 shares 26,292,540 14.85149 100,001 - less than 5% of issued shares 86,027,196 48.594 5% and above of issued shares 57,640,500 32.55

2,677 Total 177,057,240 100.00

* Negligible** Excluding a total of 2,557,500 Shares bought back and retained as treasury shares

SUBSTANTIALSHAREHOLDERS’SHAREHOLDINGS(AspertheRegisterofSubstantialShareholders)

DirectInterest IndirectInterestNameofSubstantialShareholders No.ofShares %# No.ofShares %#

Lim Seng Boon 13,605,000 7.68 24,186,840 (1) 13.66 Goh Lee Lang 24,186,840 13.66 13,605,000 (2) 7.68 Lim Keong Yew - - 12,548,000 (3) 7.09Exodius Holdings Sdn Bhd 12,548,000 7.09 - -Papago (H.K) Limited 17,637,500 9.96 - -

Notes:(1) Deemed interested by virtue of his spouse, Madam Goh Lee Lang’s shareholdings in M3 Technologies (Asia) Berhad(2) Deemed interested by virtue of her spouse, Mr. Lim Seng Boon’s shareholdings in M3 Technologies (Asia) Berhad(3) Deemed interested by virtue of his interest in Exodius Holdings Sdn Bhd

DIRECTORS’SHAREHOLDINGS(AspertheRegisterofDirectors’Shareholdings)

DirectInterest IndirectInterestNameofDirectors No.ofShares %# No.ofShares %#

Chew Shin Yong, Mark 2,130,600 1.20 945,600 (1) 0.53Lim Seng Boon 13,605,000 7.68 24,186,840 (2) 13.66Lester Ratnakumar Neil Francis 808,016 0.46 - -Muhammad Nagib Gopal Bin Abdullah 80,000 0.05 - -Chin Chee Wing 590,000 0.33 2,634,900 (3) 1.49

Notes:(1) Deemed interested by virtue of his beneficial interest in Marmark (BVI) Limited pursuant to Section 6A of the Companies

Act, 1965(2) Deemed interested by virtue of his spouse, Madam Goh Lee Lang’s shareholdings in M3 Technologies (Asia) Berhad(3) Deemed interested by virtue of his spouse, Madam Cha Lee Pin’s shareholdings in M3 Technologies (Asia) Berhad.

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Analysis of Shareholdings (cont’d)As at 8 October 2013

30LargestSecuritiesAccountHolders(without aggregating the securities from different securities accounts belonging to the same person)

No. NameofShareholders No.ofSharesheld %#

1 PAPAGO (H.K.) LIMITED 17,637,500 9.96

2 GOH LEE LANG 15,100,000 8.53

3 EXODIUS HOLDINGS SDN BHD 12,548,000 7.09

4 LIM SENG BOON 12,355,000 6.98

5 KOEK SEAM CHENG 7,673,800 4.33

6 GOH LEE LANG 6,872,600 3.88

7 CHOONG YEAN YAW 6,238,600 3.52

8 CITIGROUP NOMINEES (ASING) SDN BHD 5,775,600 3.26 GOLDMAN SACHS INTERNATIONAL

9 GOH CHEANG HUANG 4,233,300 2.39

10 CIMSEC NOMINEES (TEMPATAN) SDN BHD 3,500,000 1.98

CIMB BANK FOR MAK TIAN MENG

11 CHA LEE PIN 2,634,900 1.49

12 GOH LEE LANG 2,214,240 1.25

13 CHEW SHIN YONG, MARK 2,130,600 1.20

14 MALAHON CREDIT COMPANY LIMITED 1,891,200 1.07

15 ALLIANCE GROUP NOMINEES (TEMPATAN) SDN BHD 1,630,000 0.92 PLEDGED SECURITIES ACCOUNT FOR KOEK TIANG KUNG

16 ONG PEH HOON 1,350,000 0.76

17 MARMARK (BVI) LIMITED 1,333,400 0.75

18 CITIGROUP NOMINEES (ASING) SDN BHD 1,332,100 0.75 EXEMPT AN FOR OCBC SECURITIES PRIVATE LIMITED

19 JF APEX NOMINEES (TEMPATAN) SDN BHD 1,301,700 0.74 HUATAI FINANCIAL HOLDINGS (HK) LIMITED FOR HUATAI HK SPC-HUATAI VON

MALAYSIA FUND SEGREGATED PORTFOLIO

20 LIM SENG BOON 1,250,000 0.71

21 SENG YAN CHUAN 1,208,000 0.68

22 GOH THONG BENG 1,100,000 0.62

23 HSBC NOMINEES (TEMPATAN) SDN BHD 1,000,000 0.56 HSBC (MALAYSIA) TRUSTEE BERHAD FOR AMANAH SAHAM SARAWAK

24 TAN CHOO JIN 1,000,000 0.56

25 LESTER RATNAKUMAR NEIL FRANCIS 808,016 0.46

26 ANG LEONG CHAI 757,300 0.43

27 ONG LIANG CHING 669,000 0.38

28 TEE YEOW 650,000 0.37

29 LEE CHE WENG 642,700 0.36

30 NGUI WOON KONG 637,500 0.36

# All percentage shareholding computations are based on the issued and paid-up capital of the Company less 2,557,500 treasury shares arising from the share buy back exercise.

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Notice of Annual General Meeting

NOTICEISHEREBYGIVEN that the Fourteenth Annual General Meeting of M3 TECHNOLOGIES (ASIA) BERHAD (“M3Tech” or “the Company”) will be held at Eugenia Room, Ground Floor, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 28 November 2013 at 2.30 p.m. to transact the following business:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 30 June 2013 together with the reports of the directors and auditors thereon.

2. To approve the payment of directors’ fees for the financial year ended 30 June 2013.

3. To re-elect the following Directors who retire in accordance with Article 104 of the Company’s Articles of Association :

i. Mr. Lester Ratnakumar Neil Francis ii. Mr. Chew Shin Yong, Mark

4. To re-appoint Messrs. Ecovis AHL as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

AsSpecialBusiness: To consider and if thought fit, to pass the following Resolutions, with or without modifications :-

5. ORDINARYRESOLUTION1 GENERAL AUTHORITY FOR THE DIRECTORS TO ISSUE SHARES PURSUANT TO SECTION

132DOFTHECOMPANIESACT,1965

“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to allot and issue shares in the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person or persons whomsoever 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 share capital of the Company for the time being AND THAT the Directors be and are also empowered to obtain approval from the Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued AND THAT such authority shall continue in force until the conclusion of the next annual general meeting of the Company.”

6. ORDINARYRESOLUTION2 PROPOSEDRENEWALOFTHEAUTHORITYFORTHECOMPANYTOPURCHASE ITSOWN

SHARES OF UP TO TEN PERCENT (10%) OF ITS ISSUED AND PAID-UP SHARE CAPITAL(“PROPOSEDRENEWAL”)

“THAT, subject always to the Companies Act, 1965 (“theAct”), rules, regulations and orders made pursuant to the Act, provisions of the Memorandum and Articles of Association of the Company, the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“ListingRequirements”) and the approvals of any other relevant governmental and/or regulatory authorities, the Company be and is hereby authorised to purchase and/or hold such amount of ordinary shares of RM0.10 each in the Company’s issued and paid-up share capital (“M3Tech Shares”) through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that:

(i) the aggregate number of M3Tech Shares bought-back and/or held as treasury shares does not exceed ten percent (10%) of the total issued and paid up share capital of the Company subject to a restriction that the issued and paid up share capital of the Company does not fall below the public shareholding spread requirement of the Listing Requirements;

PleaserefertoNotei

Resolution1

Resolution2Resolution3

Resolution4

Resolution5

Resolution6

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Notice of Annual General Meeting(cont’d)

(ii) the maximum funds to be allocated for the share buy-back shall not exceed the aggregate of the retained earnings and the share premium accounts of the Company; and

(iii) the M3Tech Shares purchased pursuant to the Proposed Renewal are to be treated in any of the following manner:

(a) cancel the purchased M3Tech Shares;

(b) retain the purchased M3Tech Shares as treasury shares for distribution as share dividends to the shareholders of the Company and/or be resold through Bursa Securities in accordance with the relevant rules of Bursa Securities and/or be cancelled subsequently; or

(c) retain part of the purchased M3Tech Shares as treasury shares and cancel the remainder,

ANDTHAT such authority shall commence immediately upon the passing of this resolution until:

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the general meeting at which this resolution is passed, at which time it shall lapse, unless the authority is renewed by a resolution passed at the next AGM; or

(ii) the expiration of the period within which the next AGM after that date it is required by law to be held; or

(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company at a general meeting of the Company,

whichever occurs first, but not so as to prejudice the completion of the purchase(s) by the Company of the M3Tech Shares before the aforesaid expiry date and made in any event, in accordance with the provisions of the guidelines issued by Bursa Securities and any prevailing laws, rules, regulations, orders, guidelines and requirements issued by any other relevant government and/or regulatory authorities;

ANDFURTHERTHAT, the Directors of the Company be and are hereby authorised to take all such steps as are necessary or expedient to implement, finalise, complete or to effect the Proposed Renewal with full powers to assent to any conditions, modifications, resolutions, variations and/or amendments (if any) as may be imposed by the relevant authorities and to do all such acts and things as they may deem fit and expedient in the best interest of the Company to give effect to and to complete the purchase of the M3Tech Shares.”

7. To transact any other business of which due notice shall have been given in accordance with the Companies Act, 1965.

By order of the Board

TEASORHUA(MACS01324)YONGYENLING(MAICSA7044771)Company Secretaries

Petaling Jaya, Selangor Darul Ehsan4 November 2013

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Notice of Annual General Meeting (cont’d)

Notes:

i. The Agenda No. 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of shareholders and hence, is not put forward for voting.

ii. A member entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote in his instead. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

iii. A member shall be entitled to appoint up to two (2) proxies to attend and vote at the same meeting. Where a shareholder appoints two (2) proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.

iv. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company.

v. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, under the seal.

vi. 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.

vii. The instrument appointing a proxy must be deposited at the Registered office of the Company at Third Floor, No. 79 (Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

viii. The depositors whose names appear in the Record of Depositors as at 21 November 2013 shall be regarded as members and entitled to attend, speak and vote at the Fourteenth AGM.

EXPLANATORYNOTESTOSPECIALBUSINESS

1. The Ordinary Resolution 1 proposed under item 5 of the Agenda is a renewal of the general mandate for issuance of shares by the Company under Section 132D of the Companies Act, 1965. The Ordinary Resolution, if passed, will give the Directors of the Company from the date of the above meeting, authority to allot and issue ordinary shares from the unissued capital of the Company for such purposes as the Directors consider would be in the interest of the Company. The authority will, unless revoked or varied by the Company in General Meeting, expire at the next AGM.

This general mandate will provide flexibility to the Company for allotment of shares for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment project(s), working capital and/or acquisition(s).

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the Thirteenth AGM held on 17 December 2012 which will lapse at the conclusion of the Fourteenth AGM.

2. The Ordinary Resolution 2 proposed under item 6 of the Agenda is to renew the shareholders’ mandate for the share buy-back by the Company. The said proposed renewal of shareholders’ mandate will empower the Directors to buy-back and/or hold up to a maximum of 10% of the Company’s issued and paid-up share capital at any point of time, by utilizing the amount allocated which shall not exceed the total retained profits and/or share premium account of the Company. This authority unless revoked or varied by the Company at a general meeting, will expire at the conclusion of the next AGM of the Company, or the expiration of period within which the next AGM is required by law to be held, whichever is earlier.

Please refer to the Share Buy Back Statement to Shareholders dated 4 November 2013 for further details.

This page has been intentionally left blank.

Proxy Form M3TECHNOLOGIES(ASIA)BERHAD(482772-D)(IncorporatedinMalaysia)

Dated this day of 2013

Signature of Member(s)/Common Seal

NOTES:

i. A member entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote in his instead. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

ii. A member shall be entitled to appoint up to two (2) proxies to attend and vote at the same meeting. Where a shareholder appoints two (2) proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.

iii. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company.

iv. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, under the seal.

v. 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.

vi. The instrument appointing a proxy must be deposited at the Registered office of the Company at Third Floor, No. 79 (Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

vii. The depositors whose names appear in the Record of Depositors as at 21 November 2013 shall be regarded as members and entitled to attend, speak and vote at the Fourteenth Annual General Meeting.

I/We NRIC No./Company No.(full name in capital letters)

of (full address)

being (a) member(s) of M3 TECHNOLOGIES (ASIA) BERHAD hereby appoint

NRIC No (full name in capital letters)

of (full address)

or failing him/her NRIC No. (full name in capital letters)

of (full address)

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Fourteenth Annual General Meeting of the Company to be held at Eugenia Room, Ground Floor, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 28 November 2013 at 2.30 p.m. and at any adjournment thereof.

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. If no specific direction as to vote is given, the Proxy will vote or abstain from voting at his/her discretion.

No. Resolutions For Against1. To approve the payment of directors’ fees for the financial year ended 30 June

2013. 2. To re-elect Mr. Lester Ratnakumar Neil Francis as Director who retires pursuant to

Article 104 of the Company’s Articles of Association. 3. To re-elect Mr. Chew Shin Yong, Mark as Director who retires pursuant to Article 104

of the Company’s Articles of Association. 4. To re-appoint Messrs. Ecovis AHL as Auditors of the Company until the conclusion

of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

5. To approve the authority for Directors to issue shares pursuant to Section 132D of the Companies Act, 1965.

6. Proposed renewal of the authority for the Share buy-back by the Company.

CDSACCOUNT NO.OFSHARESHELD

To:

M3Technologies(Asia)Berhad(482772-D)

The Company Secretaries

Third Floor, No. 79 (Room A)

Jalan SS21/60, Damansara Utama

47400 Petaling Jaya

Selangor Darul Ehsan, Malaysia

Please fold across the line and close

Please fold across the line and close

STAMP

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(482772-D)

www.m3tech.com.my

M3 Technologies (Asia) Berhad (482772-D)

HoldingSteadfast

ANNUAL REPORT 2013

Unit 708, Block APusat Dagangan Phileo Damansara 2Jalan 16/1146350 Petaling JayaSelangor Darul EhsanMalaysiaTel: +603 7955 0018Fax: +603 7955 8017