ASDION BERHAD Petroliam Nasional Berhad, Proton Holdings Berhad and Sarawak Land Consolidation & Rehabilitation Authority. He had also served in the capacity of Executive Director

ASDION BERHAD 590812-D

Level 6-1, Tower 7, Avenue 3 The Horizon Phase 1Bangsar South No. 8, Jalan Kerinchi 59200 Kuala Lumpur

T : 03-2242 3885F : 03-2242 0677

www.asdiongroup.com

Annual R

eport 2016

Annual Report 2016

AS

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D 590812-D

ASDION BERHAD590812-D

2 Corporate Information3 Group Corporate Structure

4-6 Directors’ Profile7-8 Chairman’s Statement

9-18 Statement on Corporate Governance19-20 Audit Committee Report21-23 Statement on Risk Management and Internal Control24-25 Additional Compliance Information

26 Statement of Directors’ Responsibility27-97 Financial Statements

98 List of Properties99-102 Analysis of Shareholdings

103-105 Notice of Annual General Meeting106-108 Appendix I

• Proxy Form

CONTENT

ANNUAL REPORT 2016

ASDION BERHAD(590812-D)ANNUAL REPORT 2016

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Datuk Seri Maglin Dennis D’CruzChairman, Independent Non-Executive Director

Low Jyh SingChief Operating Officer

Jason Minos Anak PeterExecutive Director

Lye Siang LongExecutive Director

Selva Rasan a/l Dato’ Puspa DasIndependent Non-Executive Director

Datuk Raime Bin UnggiIndependent Non-Executive Director

See Poh YeeIndependent Non-Executive Director

Dato’ Hj. Zulkifli Bin Hj. AliasIndependent Non-Executive Director

BOARD OF DIRECTORS

AUDIT COMMITTEE

Selva Rasan a/l Dato’ Puspa Das - ChairmanSee Poh Yee

NOMINATION COMMITTEE

See Poh Yee - ChairmanSelva Rasan a/l Dato’ Puspa Das

REMUNERATION COMMITTEE

Datuk Raime Bin Unggi - ChairmanSelva Rasan a/l Dato’ Puspa DasSee Poh Yee

COMPANY SECRETARIES

Chua Siew Chuan(MAICSA 0777689)Mak Chooi Peng(MAICSA 7017931)

REGISTERED OFFICE

Level 7, Menara MileniumJalan Damanlela, Pusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : 03-2084 9000Fax : 03-2094 9940

PRINCIPAL OFFICE

Level 6-1, Tower 7, Avenue 3The Horizon Phase 1, Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala LumpurTel : 03-2242 3885Fax : 03-2242 0677

SHARE REGISTRAR

Securities Services (Holdings) Sdn. Bhd.Level 7, Menara MileniumJalan Damanlela, Pusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : 03-2084 9000Fax : 03-2094 9940

AUDITORS

SJ Grant Thornton (AF: 0737)Chartered Accountants

STOCK EXCHANGE LISTING

Ace Market of the Bursa MalaysiaSecurities BerhadSector: Technology ServicesStock Name: ASDIONStock Code: 0068

WEBSITEwww.asdiongroup.com

CORPORATEINFORMATION

ASDION BERHAD(590812-D)

ANNUAL REPORT 2016

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GROUP CORPORATE

as at 15 August 2016STRUCTURE

100%Techtron IntegratedS

100%

ystems (S) P/L

100%Asdion Logistics Sdn Bhd(Formerly known as Asdion Logistics (Penang) Sdn Bhd)

100% Venice Sanctuary Sdn Bhd

100% Asdion Project Synergy Sdn Bhd

100% Asdion Material SupplyMarketing Sdn Bhd

100% Asdion Property Management Sdn Bhd

100% Asdion Digital Advance System Sdn Bhd

51% Taz Logistics Sdn Bhd

36% Sun Rock DevelopmentSdn Bhd

Asdion Data Services Sdn Bhd

100%Asdion Hospitality Solutions Sdn Bhd

Wholly-ownedSubsidiaries

Subsidiaries Associate


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DATUK SERI MAGLIN DENNIS D’CRUZ, aged 60, MalaysianChairman, Independent Non-Executive Director

Datuk Seri Maglin Dennis D’Cruz was appointed as the Chairman of Asdion Berhad on 28 September 2015. He obtained his Master of Business Administration (Hons) in Management from University of Canterbury, Cheshire, United Kingdom.

Datuk Seri Maglin was in politics since 1996 where he started out as the Taman Gembira, Klang branch Chairman. Datuk Seri Maglin is currently the senior vice-president of Peoples Progressive Party (“PPP”) and is a Member of the Parliament of Malaysia for the Kota Alam Shah constituency in Selangor, representing PPP in the governing Barisan Nasional coalition. He was also appointed as the Deputy Minister of Information, Communications & Culture in July 2010 and served a full term.

Datuk Seri Maglin was also involved in the corporate world. He joined Baylloyds (M) Sdn. Bhd. as the Director of Operations from 1982 to 1987, later, in Global Freight & Removals Sdn. Bhd. for 11 years as the Director of Operations. In 1999, he joined Mag Wood Movers Sdn. Bhd. as Director of Operations until 2002. Between 2002 and 2004, he was the Executive Director of Mag Wood Industries (M) Sdn. Bhd., Mag Wood Removals (M) Sdn. Bhd., Waria Setia (M) Sdn. Bhd. and Kumpulan Syarikat Kannal as well as the Director of Bintang Idarat (M) Sdn. Bhd. and Wasiat Bumi (M) Sdn. Bhd. Before he resigned from the corporate world in 2010 due to his political obligations, he was the Chairman and Director of Corporate Affairs of Top Asian Container Line Sdn. Bhd. between 2006 and 2010.

Datuk Seri Maglin has been honoured with several honorary titles, such as Panglima Jasa Negara (PJN), Seri Mahkota Wilayah (SMW) and the Darjah Setia Sultan Salahuddin Abdul Aziz Shah (SSA) award.

Datuk Seri Maglin does not hold any directorship in any other public companies.

JASON MINOS ANAK PETER, aged 42, MalaysianExecutive Director

Mr. Jason Minos Anak Peter was appointed as Executive Director of the Company on 28 September 2015. He graduated with a Degree in Bachelors of Laws (LLB) from University of East London, United Kingdom. He is also a member of the Institute of Approved Company Secretaries and is a Licensed Company Secretary.

Mr. Jason had served as an in-house corporate legal advisor and licensed company secretary for various private corporations and public servant under Malaysian government agencies and statutory bodies, inclusive of subsidiary companies under Petroliam Nasional Berhad, Proton Holdings Berhad and Sarawak Land Consolidation & Rehabilitation Authority. He had also served in the capacity of Executive Director for PT. Petronas Lubricants Indonesia, PT. Inovisi Infracom Tbk, Petrol One Resources Berhad and has acted as Head of Legal at Global Capital Group prior to joining Asdion Berhad.

Mr. Jason does not sit on the Board of other public companies. He is currently a Director of Asdion Berhad’s subsidiaries.

DIRECTORS’PROFILE

LOW JYH SING, aged 42, MalaysianChief Operating Officer

Mr. Low Jyh Sing was appointed as the Chief Operating Officer of Asdion Berhad on 1 March 2016. He completed his high school from Sekolah Menengah Kebangsaan Tengku Temenggong Ahmad.

Mr. Low is an entrepreneur with 20 years’ experience in commodity trading, logistics and mining industries. Prior to joining Asdion Berhad, he was a director of a local logistics company with the principal activities of dealing in dry bulk and cargo handling in East Coast of Malaysia.

Mr. Low does not sit on the Board of other public companies. He is currently a Director of Asdion Berhad’s subsidiaries.


ANNUAL REPORT 2016

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LYE SIANG LONG, aged 46, MalaysianExecutive Director

Mr. Lye Siang Long was appointed as Executive Director of the Company on 25 July 2016.

Mr. Lye is a member of the Malaysian Institute of Certified Public Accountants (“MICPA”) and the Malaysian Institute of Accountants (“MIA”).

Mr. Lye served as Audit Supervisor with an international public accounting firm in the first five years of his career. In 1999, he joined a computer peripheral distributor as Finance and Administration Manager. He served there for three (3) years before joining an engineering services company in 2002 as a Accountant. Receiving various promotion, he eventually rose to the position of Finance Director cum General Manager of the group. Mr Lye also served on the Board of its holding company, a public listed company from 2006-2013. At present, Mr. Lye is a Director of a consultancy firm, a position he has held since 2014.

Mr. Lye does not sit on the Board of other public companies.

SEE POH YEE, aged 40, Malaysian Independent Non-Executive Director

Mr. See Poh Yee was appointed to the Board as an Independent Non-Executive Director on 26 August 2013. He is the Chairman of the Nomination Committee and member of Audit Committee and Remuneration Committee.

Mr. See obtained his Bachelor of Engineering degree, majoring in Computer Science from the University of Manitoba, Canada in 1998. He was a Technology Investor and Co-Founder of Nexgram Holdings Berhad (“Nexgram”). He began his career at Lilo Media as Chief Technology Officer and Technology Advisor for Microasia Group, an e-commerce consulting firm in early 2000’s. He and his core system engineers co-developed MINDCEP platform, which empowered SOHOMOBILE, mCommerce-Suit and SMSJET, some of the key component of mobile commerce software for Nextnation Network Sdn. Bhd., a subsidiary company of Nexgram.

Mr. See does not sit on the Board of other public companies.

SELVA RASAN A/L DATO’ PUSPA DAS, aged 44, MalaysianIndependent Non-Executive Director

Mr. Selva Rasan a/l Dato’ Puspa Das was appointed as an Independent Non-Executive Director of the Company on 24 December 2014. He is also the Chairman of the Audit Committee and member of the Nomination Committee and Remuneration Committee.

Mr. Selva is a fellow member of the Malaysian Institute of Accountants (MIA), the Chartered Tax Institute of Malaysia (CTIM), Financial Planning Association of Malaysia (FPAM), Institute of Public Accountants (IPA) (Australia), Chartered Institute of Public Finance and Accountancy (CIPFA) (United Kingdom), Institute of Finance Accountants (IFA) (United Kingdom) and associate member of Certified Practising Accountants (CPA) Australia. He is also an affiliate member to the Malaysian Institute of Chartered Secretaries and Administrators.

By virtue of his membership in MIA and CTIM, Mr. Selva carries with him the designate title as Chartered Accountant C.A. (M) and Chartered Tax Practitioner (CTP). He is an approved auditor, tax agent and GST tax agent, licensed by the Ministry of Finance. He is also an approved auditor licensed by the Labuan Financial Services Authority (LFSA).

Mr. Selva has more than 15 years of audit and tax experience, starting his professional career with PricewaterhouseCoopers and subsequently, establishing his own practice, Selva & Associates, soon after he became a member of MIA in year 2000. Mr. Selva is also the Managing Director of Cyrel Tax Care Sdn. Bhd., which provides taxation advisory, compliance and related services.

Mr. Selva is also a Director of Hytex Integrated Berhad and R&A Telecommunication Group Berhad.

DIRECTORS’PROFILE


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DATUK RAIME BIN UNGGI, aged 46, MalaysianIndependent Non-Executive Director

Datuk Raime Bin Unggi was appointed as an Independent Non-Executive Director of the Company on 29 January 2015. He is also the Chairman of the Remuneration Committee of the Company.

Datuk Raime obtained a Master of Arts (Sociology) from Universiti Utara Malaysia in year 2014 and a Diploma of Business Studies from Institut Teknologi Mara Sabah in year 1993.

Datuk Raime is a Malaysian politician, where he is the Member of the Parliament of Malaysia for the Tenom constituency in Sabah, representing the United Malays National Organisation (UMNO) party in the governing Barisan Nasional coalition. Prior to that, Datuk Raime had joined the government sector as an Assistant Administrative Officer from year 1997 to 2004.

Apart from his active roles in the political segment, Datuk Raime also contributed to the community through his several positions in various statutory bodies, including but not limited to parties organisation, social and voluntarily community in Malaysia, for instances:-

(i) Deputy Chairman of the Corporation Baitulmal Sabah (2005 – 2007)

(ii) Chairman of Desa Group of Companies, which is wholly-owned by the State Government of Sabah (2008 – current)

(iii) Board Member of Oilcorp Berhad (2008 – September 2009)

(iv) Colonel (Honorary) RELA, Tenom District (2007 – current)(v) Patron Scouts Association, Tenom District (2008 – current)(vi) Chairman of Parliamentary Consultative Council, Tenom

(2014 – current)(vii) Secretary of Barisan Nasional Backbenchers Club (Sabah)

(BNBBC) (2008 – current)(viii) Chairman of the Ministry Of Agriculture & Agro-Based

Industry Malaysia, Tenom District (2009 – current)(ix) Chairman of Welfare and Social Development Council

(Mayang) for the Region of P.181 Tenom (2009 – current)(x) Deputy Head of Division UMNO, Tenom (2013 – current)(xi) Chairman of Lembaga Perlesenan Kenderaan

Perdagangan Sabah (2015 – current)

In recognition of his contribution towards the community of Sabah, the Governor from the Government of Sabah had conferred Datuk Raime with Panglima Gemilang Darjah Kinabalu (“PGDK”), also known as the Commander of the Order of Kinabalu. PGDK ranked second class of order among the five classes of the Illustrious Order of Kinabalu, Sabah.

Datuk Raime does not hold any directorship in any other public companies.

DATO’ HJ ZULKIFLI BIN HJ ALIAS, Aged 60, MalaysianIndependent Non-Executive Director

Dato’ Hj. Zulkifli Bin Hj. Alias was appointed as an Independent Non-Executive Director of the Company on 25 July 2016.

Dato’ Hj. Zulkifli graduated from Universiti Putra Malaysia with a Master of Science in the field of Emergency Response and Planning.

Dato’ Hj. Zulkifli joined the Royal Malaysia Police Force as a Probationary Inspector in 1976 and retired in 2016 with the last position of Commander of the Northern Brigade (Ulu Kinta, Perak), General Operations Force with the rank of Senior Assistant Commissioner of Police (SAC). During his 40 years tenure of service, he had served various Branches and Formations of the Royal Malaysia Police and had assumed various posts such as Principal Assistant Director of Operations, Department of Internal Security and Public Order, District Police Chief (OCPD) of Northern Seberang Perai (Butterworth), Penang, Deputy Director (Training and Planning), Southeast Asia Regional Centre for Counter Terrorism, Ministry of Foreign Affairs, Head of Petaling Jaya District Police Narcotic Branch and Assistant Director (Investigations and Prosecutions), Registry of Societies, Ministry of Home Affairs, Putrajaya.

Dato’ Hj. Zulkifli does not sit on the Board of other public companies.

DIRECTORS’PROFILE

Note:-1. None of the Directors have family relationship with any

Directors or major shareholders of Asdion Berhad.2. None of the Directors have personal interest in any

business arrangement involving the Company and its subsidiaries.

3. All the Directors have had no convictions for offences other than traffic offences in the past ten (10) years.


ANNUAL REPORT 2016

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On behalf of the Board of Directors of Asdion Berhad (“Asdion”), I have great pleasure in presenting the Annual Report incorporating the Audited Financial Statements of the Company and its subsidiaries (“the Group”) for the financial year ended 31 March 2016 (“FYE 2016”).

CHAIRMAN’SSTATEMENT

Financial Performance

For the financial year under review, the Group recorded a consolidated revenue of RM19.84 million, representing an increase of more than 300% from RM4.32 million reported last year. This achievement was mainly due to contribution from the new business segments namely logistics and commodity trading. The higher revenue, in turn, generated an improved gross profit of RM5.77 million, representing an increase of 83% or RM2.62 million as compared with gross profit of RM3.15 million recorded in the previous year.

Notwithstanding the aforementioned, the Group recorded a consolidated net loss after tax and minority interest of RM1.74 million during the FYE 2016, as a result of non-recurring expenses related to a series of corporate and business restructuring and diversification of business. Nevertheless, the consolidated net loss after tax and minority interest incurred was 38% lower when compared to the consolidated loss after tax of RM2.81 million in the previous year.

Corporate Development

Throughout the year we have also made a number of significant changes to the management team. The core of these changes was a commitment to put customers at the heart of everything we do and deliver long-term value for shareholders.

In view of the increasingly competitive landscape, the Group had taken several steps highlighted as follows:-

1. Expansion of Businesses

Going forward, the Group is looking to expand the logistics business into freight forwarding which covers the activities from port and customs clearance to procurement of raw materials, international freight forwarding, inventory management and distribution. The Group anticipates that the revenue to be generated by the freight forwarding business would contribute some 10% to its consolidated revenue.

2. Incorporation of new Companies

Asdion has acquired 100% equity interest in Asdion Material Supply Marketing Sdn. Bhd. with the intended business of supplying, manufacturing, distributing and dealing in building materials and construction products. Asdion has also acquired 100% equity interest in Asdion Property Management Sdn. Bhd. for proposed business of property investment and management.

Business Review and Outlook

Global economic recovery continued at a slower pace in the first quarter of 2016 owing to a modest expansion across the advanced economies as well as emerging market and developing economies.

Malaysia's economy grew at a slower pace of 4.2% in the first quarter of 2016, due to slower growth in the manufacturing and services sectors, but the overall growth was still above economists' forecast of a subdued 4% growth.

(Source: Malaysian Economy First Quarter 2016, Ministry of Finance, Malaysia)


8

“Logistics services as one of “drivers of growth” to propel the country into high income economy”. The transportation and logistics industry forms the backbone of modern global supply chains. Airlines and airports, shipping companies, logistics service providers and other transportation companies are all part of the process to keep people and products on the move.

Logistics is a crucial contributor to Malaysia’s trade and economic growth. The importance of an efficient logistics system to facilitate cross border trade (growth) cannot be overemphasised. Malaysian Government has allocated RM3 billion to stimulate the development of the logistics industry under the Third Industrial Master Plan 2006-2020 (IMP3). The Plan has set a target of 36 million TEU or 751 million tonnes of cargo to be handled by Malaysian ports as the growing trade volumes and strong economic performance over the years. For as long as the nation’s economy remains robust and its trade volumes grow, the logistics sector continues to have a bright future.

Movement of goods will also become increasingly important as trade plays a significant role in Malaysia’s economic growth. The logistics industry will therefore be strengthened. By 2020, Malaysia is targeting an 8.5% annual growth rate of the transport and storage subsector, along with a place in the top 10 of the World Bank Logistics Performance Index.

(Source: 10th &11th Malaysian Plan, Economic Planning Unit ("EPU") Malaysia)

Prospect

FYE 2016 will be remembered as a year of significant change for Asdion as we expanded our business portfolio by venturing into logistics business. We had also embarked into commodity trading so as to generate sources of revenue from businesses other than our logistics, property and IT businesses.

For the financial year ending 31 March 2017, although the Group is expected to face challenges given the lacklustre business environment, the Group will continue its efforts to improve and enhance its range of logistics services, products and solution, and continue its conservative approach to build the market locally and with regional expansion plans for the Company’s services.

The management team will continue to focus on improving operational efficiencies and monitoring and controlling the operational expenses to achieve improved profitability and sustainable business growth. Steps will be taken to initiate further measures to reduce losses, and a viable and comprehensive business plan will be prepared to ensure that the set goals and objectives can be met.

Corporate Social Responsibilities

Asdion is committed towards adopting and engaging in Corporate Social Responsibility for the interest of all the stakeholders. The Group has participated in various corporate events in support of various charities (such as donation to Akademi Pendidikan Irsyad Balok Berhad and Pusat Jagaan Satu Warga Emas) throughout the year and will continue to do so in the future.

The Group is also committed to providing a safe working environment for all our employees and contractors at the workplace and sites through increased awareness, accountability and continued training to ensure that all activities are conducted in an ethical, environmentally responsible, safe and healthy manner.

Appreciation

On behalf of the Board, I would like to express our sincere appreciation to the management team and all employees for their commitment and contribution to the Group and to our valued shareholders, associates, clients, bankers, subcontractors and suppliers for their support to the Group. The Group values and looks forward to this continued support as we undertake new challenges and opportunities.

Last but not least, to all my fellow Board members, I thank you for your invaluable continuing guidance and support.

Thank you

DATUK SERI MAGLIN DENNIS D’CRUZChairman

CHAIRMAN’SSTATEMENT


ANNUAL REPORT 2016

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INTRODUCTION

The Board of Directors (“Board”) of Asdion Berhad (“Asdion” or “the Company”) remains steadfast in its commitment in maintaining high standards of corporate governance. The Board recognises the importance of practising good governance in its business conducts is a fundamental towards the protection and enhancement of shareholders’ value and the financial performance of the Company. Accordingly, the Board is committed to ensure that high standards of corporate governance are maintained throughout Asdion and its subsidiaries (“the Group”).

This Statement on Corporate Governance (“Statement”) is made pursuant to Rule 15.25 of the ACE Market Listing Requirements (“AMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”). This statement sets out the manner in which the Group has adopted the Malaysian Code on Corporate Governance 2012 (“the Code”) and the extent to which it has applied the principles and recommendations as set out in the Code throughout the financial year ended 31 March 2016. This Statement is aims to provide insights to the shareholders and investors on the corporate governance practices of the Company.

BOARD OF DIRECTORS

1. Board Balance

The Board presently has eight (8) members, comprising of one (1) Chief Operating Officer, two (2) Executive Directors and five (5) Independent Non-Executive Directors. This composition fulfills the requirement prescribed under Rule 15.02 of the AMLR of Bursa Securities which stipulates that at least two (2) Directors or one-third (1/3) of the Board, whichever is higher, must be independent.

The Board is made up of Directors who are qualified and experience in various fields. Each director comes from different professional backgrounds bringing depth and diverse areas of expertise, a wide range of experience and knowledge for effective management of the Group. The composition of the members of the Board reflects a good mix of experience, background, skills, qualifications and the members are all professionals of high caliber and integrity. The profile of each Director is provided on pages 4 to 6 of the Annual Report. All these different skills together enable the Board to effectively lead and control the Group.

Executive Directors and the Management team are responsible for making and implementing day-to-day operational decisions of the Company. Non-Executive Directors provide unbiased and independent views in ensuring that the strategies proposed by the Management are fully deliberated and examined objectively, taking into perspective of the long term interest of shareholders, other stakeholders and communities at large. They also provide the necessary check and balance in the Board’s exercise of its functions and decision making process to ensure that there is no individual or small group of individuals that can dominate the Board’s decision making process.

The Board does not have a specific policy on gender, ethnicity and age group for candidates to be appointed to the Board and does not have policy on setting target for female candidates in the workforce. The Board believes that candidature to the Board should be based on a candidate’s merits, capability, experience, skill-sets and integrity. In addition, there is no detriment to the Company for not adopting a formal gender, ethnicity and age group diversity policy as the Company is committed to provide fair and equal opportunities and nurturing diversity within the Company.

STATEMENT ON CORPORATE GOVERNANCE


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BOARD OF DIRECTORS (CONT’D)

2. Roles and Responsibilities of the Board

The Board has a collective responsibility for the management of the Group. The Non-Executive Directors are responsible for bringing independent judgment and scrutiny to decisions taken by the Board and providing objective challenges to the management.

The Non-Executive Directors do not participate in the day-to-day management of the Group and do not engage in any business dealing or other relationship with the Group to ensure that they are capable in exercising judgment objectively whilst acting in the best interest of the Group, its stakeholders and shareholders.

To enhance accountability, the Board has established clear functions reserved for the Board and those delegated to the Management. The Board directs the Company’s risk assessment, strategic planning, succession planning and financial and operational management to ensure that obligations to shareholders and other stakeholders are understood and met. The Board is also responsible for the overall corporate governance of the Group. The Board retains full and effective control of the management of the Company and its overall responsibilities which includes strategic formulations, planning, succession planning and execution of the Group’s objectives as well as monitoring Management’s implementation of its decisions. It is the responsibility of the Board to conscientiously weigh and balance the interests of its shareholders and stakeholders with its own objectives during its decision making process.

The stewardship responsibilities and duties of the Board focuses principally on strategies, financial performance and critical business decisions that may include the following:-

i. Reviewing and adopting a strategic plan for the Company.ii. Overseeing and evaluating the conduct and sustainability of the business of the Group.iii. Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures.iv. Establishing key performance indicators and succession plan and ensuring that all candidates appointed to senior

management positions are of sufficient caliber.v. Overseeing the development and implementation of the shareholders communication policy for the Company.vi. Reviewing the adequacy and the integrity of the management information and internal controls system of the Company.

3. Responsibilities of the Chairman and the Executive Directors (“EDs”)

There is a clear accepted division of responsibilities between the Chairman and the EDs such that no individual has an unrestricted amount of power in any Board’s decision.

The role of the Chairman and the EDs are distinct and separate to ensure there is balance of power and authority. The Chairman is responsible for the leadership, effectiveness, conduct and governance of the Board while the EDs have overall responsibility for the day-today management of the business and implementation of the Board’s policies and decisions. The EDs are accountable to the Board for the overall organisation, management and staffing of the Company and/or Group and for the procedures in financial and other matters, including conduct and discipline.

The EDs are involved in leadership roles overseeing the day-to-day operations and management within their specific areas of expertise or assigned responsibilities. They represent the Company at the highest level and are decision makers on matters within their scope.

The responsibilities of the EDs, amongst others, are as follows:-

i. To develop and implement strategic business direction, plans and policies of the Group.ii. To ensure the efficiency and effectiveness of the Group’s operations.iii. To supervise heads of divisions and departments who are responsible for all functions contributing to the success of the

Group.iv. To oversee the day-to-day management of the Group with all powers, discretions and delegations authorised, from time

to time, by the Board.v. To assess business opportunities which are of potential benefit to the Group.vi. To bring material matters to the attention of the Board in an accurate and timely manner.



ANNUAL REPORT 2016

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BOARD OF DIRECTORS (CONT’D)

4. Independent Directors

The presence of Independent 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.

The Board had conducted an evaluation of the level of independence of the Independent Directors of the Company in respect of the financial year ended 31 March 2016. The Board is satisfied that all Independent Directors have satisfactorily demonstrated that they are independent from the management and free from any business or other relationships with the Group that could materially affect or interfere with the exercise of objective, unfettered or independent judgment to act in the best interests of the Group.

In making a determination regarding a Director’s independence, the Board considers a minimum criteria for independence which is prescribed under Rule 1.01 of the AMLR. In addition, the Board also considers all relevant facts and circumstances, including the Director’s commercial and charitable relationship (financial dependency) and such other criteria as the Board may determine from time to time. There must be a conscious application of the test of whether the said Director is able to exercise independent judgment and act in the best interests of the Company.

The Board will continue, on an annual basis, to assess the independence of the Independent Directors.

The Board is fully aware that the tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. However, upon completion of the nine (9) 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.

5. Board Charter

A Board Charter was formalised to set out the composition and balance, roles and responsibilities, operations 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. A copy of the Board Charter is published at the corporate website of the Company at www.asdiongroup.com.

The Board has adopted a whistle blowing policy to provide avenue for all employees of the Group and members of the public to raise concerns and disclose any improper conduct within the Group and to take appropriate actions to resolve them effectively.

The Board has also adopted a Code of Ethics and Conduct that outlining the standards of business conduct and ethical behavior which the Directors and employees should possess in discharging their duties and responsibilities and to enhance the high standards of personal integrity and professionalism of the Directors.

6. Promote Sustainability

In conducting the Group’s business, the Board is cognizant of the important of business sustainability and the impact of the environmental, social and governance are taken into consideration in measuring the sustainability. The Group also embraces sustainability in its operations and throughout its value chain and partnership with its stakeholders, including suppliers, customers and other organisations.



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BOARD PROCESSES

1. Board Meeting

The Board meetings are scheduled in advance and are held at least once every quarter to deliberate on all matters relating to the overall control, business performance and strategy of the Company.

A total of sixteen (16) Board meetings were held during the financial year ended 31 March 2016. The attendance of each Director at the Board meetings held during the financial year is summarised as follows:

Name of DirectorsNumber of meetings attended

Datuk Seri Maglin Dennis D’Cruz (appointed on 28 September 2015) 9 of 9

Jason Minos Anak Peter (appointed on 28 September 2015) 9 of 9

Low Jyh Sing (appointed on 1 March 2016) 1 of 1

Ang Chin Poo (appointed on 18 May 2016, resigned on 1 August 2016) 0 of 0

Lye Siang Long (appointed on 25 July 2016) 0 of 0

See Poh Yee 14 of 16

Selva Rasan a/l Dato’ Puspa Das 14 of 16

Mohamad Farid Bin Mohd Yusof (resigned on 15 August 2016) 15 of 16

Datuk Raime Bin Unggi 11 of 16

Syed Amir Syakib Arsalan Bin Syed Ibrahim(appointed on 28 September 2015, resigned on 28 July 2016)

9 of 9

Dato’ Hj. Zulkifli Bin Hj. Alias (appointed on 25 July 2016) 0 of 0

Tengku Azlan Ibni Sultan Abu Bakar (appointed on 8 April 2015, resigned on 26 September 2015) 5 of 7

Yap Tai Tee (resigned on 11 November 2015) 9 of 11

Dato’ Mohamed Ridzuan Bin Nor Md (appointed on 8 April 2015, resigned on 26 September 2015) 6 of 7

Dato’ Yen Soon Ai (resigned on 26 September 2015) 7 of 7

The relevant reports and Board papers which contain management and financial information and other matters to be discussed will be distributed to all Directors in advance to allow the Directors to have sufficient time to peruse for effective discussion and decision making during the Board/Committee meetings. All pertinent issues discussed at the meetings in arriving at decisions and conclusions are properly recorded in the discharge of the Board’s duties and responsibilities.

All Directors have complied with the minimum 50% attendance requirement in respect of Board meeting as stipulated in the AMLR of Bursa Securities. In the intervals between Board meetings, for any matters requiring Board’s decisions, the Board’s approvals are obtained through circular resolutions.

The Board had through the Nomination Committee, reviewed the time commitment of the Directors and ensures that they are able to carry out their responsibilities and contributions to the Board. It is also the Board’s policy for Directors to notify the Chairman before accepting any new directorship. Such notification is expected to include an indication of time that will be spent on the new appointment.

Overall, 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.



ANNUAL REPORT 2016

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BOARD PROCESSES (CONT’D)

2. Supply of information

The Board acknowledges that it is essential for Directors, particularly the Non-Executive Directors who are not involved in the day-to-day operations of the Company, to have access to information, whether as a Board member or in their individual capacity, that enables them to better understand and assess the Company’s performance.

There are established procedures in place for any Director to obtain independent professional advice at the cost of the Group. The Directors also have unrestricted access to the information pertaining to the Group including the Group’s auditors and consultants. From time to time, whenever the Board requires relevant information updates from any members of the Management team, the relevant member of the Management team is invited to attend meetings of the Board to provide the Board with any such relevant information or updates.

3. Company Secretary

The Board appoints the Company Secretary, who plays an important advisory role, and ensures that the Company Secretary fulfills the functions for which she has been appointed. The Company Secretary, who is qualified, experienced and competent, is a central source of information and advice to the Board and its Committees on issues relating to compliance with laws, rules, procedures and regulations affecting the Company.

The Board and the Board Committees receive timely and up-to-date information and the Company Secretary ensures a balance flow of information is disseminated for decisions to be made on an informed basis and for the effective discharge of the Board’s responsibilities.

The Company Secretary attends all Board and Board Committee meetings and ensures meetings are properly convened while accurate and proper records of the proceedings and resolutions passed are maintained accordingly at the registered office of the Company and produced for inspection, if required. The Board may gain full access to the advice and services of the Company Secretary who is responsible for advising and ensuring that Board procedures are followed and that relevant rules and regulations are complied with.

The Board recognises that the Company Secretary should be suitably qualified and capable of carrying out the duties required. The Board is satisfied with the service and support rendered by the Company Secretary to the Board in the discharge of her functions. All Board members, particularly the Chairman, have unrestricted access to the advice and services of the Company Secretary for the purposes of the Board’s affairs and the business. The Company Secretary advises the Board on any updates relating to new statutory and regulatory requirements pertaining to the duties and responsibilities of Directors and their impact and implication to the Company and Directors in carrying out their fiduciary duties and responsibilities.

4. Appointment and re-election to the Board

The members of the Board are appointed in a formal and transparent practice as recommended by the Code. The Nomination Committee will assess and make recommendations to the Board who will thereon assess the shortlisted candidates and arrive at a decision on the appointment of the Director. In discharging this duty, the Nomination Committee will assess the suitability of an individual by taking into account the individual’s mix of skill, functional knowledge, expertise, experience, professionalism, integrity and other commitments that the candidate shall bring to complement the Board.

The Directors also observe the recommendation of the Code that they are required to notify the Chairman of the Board before accepting any new directorship in other companies and to indicate the time expected to be spent on the new appointment. All the Board members shall notify the Chairman of the Board prior to the acceptance of new Board appointment in other companies incorporated in Malaysia with similar businesses operating in the same jurisdiction.

In accordance with the Company’s Articles of Association (“Articles”), any Director(s) appointed by the Board either to fill a casual vacancy or as an addition to the existing Directors are subject to re-election by shareholders at the Annual General Meeting (“AGM”) following their appointment. The Articles also provide that one-third (1/3) of the Directors for the time being or, if their number is not a multiple of three (3), the number nearest to one-third (1/3) of the remaining Directors shall retire by rotation at each AGM provided always that all the Directors shall retire from their office at least once in every three (3) years. All retiring Directors are eligible for re-election at the AGM.



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BOARD PROCESSES (CONT’D)

5. Directors’ Training

The Board will assess the training needs of the Directors and ensure Directors have access to continuing education programme. In assessing the training needs of Directors, the Board will determine appropriate training programmes to be recommended for the Directors to attend, covering matters on corporate governance, finance, legal, risk management and statutory/regulatory compliance.

All the Directors (save and except for Dato’ Hj. Zulkifli Bin Hj. Alias who was appointed after the financial year) had attended the Mandatory Accreditation Programme prescribed by Bursa Securities within period stipulated. The Directors will continue to undergo relevant seminars and training programmes to equip themselves with the required knowledge and to keep abreast with the developments in the marketplace for further enhancement on their business acumen and professionalism in discharging their duties to the Group.

During the financial year ended 31 March 2016, the Directors of the Company have attended various programmes and forums facilitated by external professionals in accordance with their respective needs in discharging their duties as Directors. Seminars and conferences attended by Directors during the financial year ended 31 March 2016 include the following:-

Directors Programmes attendedDatuk Seri Maglin Dennis D’Cruz - Mandatory Accreditation ProgrammeLow Jyh Sing - Mandatory Accreditation ProgrammeSelva Rasan a/l Dato’ Puspa Das - National Tax Conference 2015 (English)

- Practical GST aspects for the manufacturing industry- National Tax Conference 2015 (BM)- 2016 Budget Seminar- Getting Your GST-03 Correct (From A Preparer’s Perspective)- Tax deductible expenses – principles and latest developments- New Framework and New Guidelines issued by Inland Revenue Board

Malaysia- Audit Opinion & Reporting – Proposed ISA 700 (Revised)- Accounting for construction contracts, property development activities

and borrowing costs (incorporating MFRS 15)See Poh Yee - AWS Submit Malaysia

- KDU Game Development Open Day- Kuala Lumpur VR Roadshow

Datuk Raime Bin Unggi - Mandatory Accreditation Programme

BOARD COMMITTEES

The Board has also delegated specific tasks to the Audit, Nomination and Remuneration Committees, all of which are operated within defined terms of reference. These Committees have the authority to examine particular issues and report to the Board on their proceedings and deliberations together with its recommendations. However, the ultimate responsibility for the final decision on all matters lies with the Board.

(i) Audit Committee

The Audit Committee assists and support the Board’s responsibility to oversee the Group’s operations by providing a means for review of the Group’s processes for producing financial data, its internal controls, risk management activities and independence of the Group’s external and internal auditors. The role of the Audit Committee and the number of meeting held during the financial year as well as the attendance record of each member are set out in the Audit Committee Report in this Annual Report.



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BOARD COMMITTEES (CONT’D)

(ii) Nomination Committee

The Nomination Committee of the Company comprises the following members, all being Independent Non-Executive Directors:-

Name of Committee Members DesignationSee Poh Yee, Chairman Independent Non-Executive DirectorSelva Rasan a/l Dato’ Puspa Das, Member Independent Non-Executive Director

Pursuant to the terms of reference of the Nomination Committee, the main responsibilities of the Nomination Committee are as follows:-

• NominatenewcandidatestotheBoardaswellasBoardCommitteesfortheBoard’sconsideration;• AnnuallyreviewtheBoard’srequiredmixofskills,expertise,experienceandotherqualitiesincludingcorecompetencies

oftheDirectors,whicheveryindividualDirectorsshouldbringtotheBoard;and• AnnuallyassesstheeffectivenessoftheBoardasawhole,theCommitteesoftheBoardandtheperformanceofthe

Directors of the Company both individually and collectively.

The Nomination Committee has developed certain criteria to be used in the recruitment process and annual assessment of Directors, including Independent Directors. 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 has also reviewed and adopted the criteria for assessing the independence of the Independent Directors.

The Nomination Committee has carried out an assessment of the Board as a whole, Board Committees and individual Directors in relation to their performance and contribution towards meeting the needs of the Company in respect of the financial year ended 31 March 2016. The assessment took into consideration the competency, experience, character, integrity and time availability, including the mix of skills of the Directors concerned.

The evaluation process of individual Directors involved a self-review assessment, where Directors assessed their own performance and was led by the Chairman of the Nomination Committee. The assessments and comments by all Directors were summarised and discussed at the Nomination Committee meeting and reported at a Board meeting by the Chairman of the Nomination Committee.

(iii) Remuneration Committee

The principal objectives of the Remuneration Committee are to assist the Board in developing a formal, transparent framework, structure or policy in determining the remuneration packages of Directors of the Company and to ensure that the reward and remuneration packages commensurate with the expected responsibilities and contribution by the Directors and subsequently furnishes their recommendations to the Board for approval.

The members of the Remuneration Committee are as follows:-

Name of Committee Members DesignationDatuk Raime Bin Unggi, Chairman Independent Non-Executive DirectorSee Poh Yee, Member Independent Non-Executive DirectorSelva Rasan a/l Dato’ Puspa Das, Member Independent Non-Executive Director

The Board will determine the level of remuneration of executive Board members, after taking into consideration the recommendations of the Remuneration Committee, which are reward and performance based and is sufficient to attract and retain the Directors needed to run the Company successfully.

Non-Executive Directors of the Company will be paid a basic fee as ordinary remuneration based on their responsibilities in Committees and the Board. The fee shall be fixed in sum and not by a commission or percentage of profits or turnover.



16

BOARD COMMITTEES (CONT’D)

(iii) Remuneration Committee (Cont’d) Each Director shall abstain from the deliberation and voting on matters pertaining to their own 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 AMLR of Bursa Securities.

Directors’ remuneration in respect of the financial year ended 31 March 2016 in aggregate, with categorisation into appropriate components, distinguishing between Executive and Non-Executive Directors, is as follows:-

Directors Fees(RM)

Salaries, Bonus &

allowance(RM)

Benefit in kind(RM)

Total(RM)

Executive Directors 527,774 755,343 - 1,283,117Non-Executive Directors 396,000 10,500 - 406,500TOTAL 923,774 765,843 - 1,689,617

The number of Directors of the Company whose remuneration band falls within the following successive bands of RM50,000 is as follows:

Range of Remuneration (RM) Executive Directors Non-Executive DirectorsRM50,000 and below 4 4RM50,001 – RM100,000 - 1RM100,001 – RM150,000 2 -RM150,001 – RM200,000 1 -RM200,001 – RM250,000 - 1

(the above disclosures include all Directors who held office during the financial year)

INVESTOR RELATIONS

1. Communications with Shareholders and Relationship with Investors

The Group recognises and practices transparency and accountability to its shareholders and investors. As such, the Group ensures timely dissemination of information through appropriate channels of communication to shareholders and investors to ensure that they are properly informed on major developments of the Group. Such information is also communicated to them through the Annual Report and the various disclosures and announcements made to Bursa Securities from time to time, including the Quarterly Results and Annual Audited Financial Statements.

In order to disseminate timely information across all external communications, the Company has made available the Quarterly Results and all other announcements made to Bursa Securities on the Company’s corporate website, where shareholders can access information under the ‘Investor Relations’ tab.

The Board places great importance in maintaining active dialogue and effective communication with shareholders and investors to enable them to make informed investment decisions. As part of the Company’s commitment towards this objective, experienced senior management personnel are directly involved in the Company’s investor relations activities. With the active involvement of the senior management personnel, the investment community is assured of views and information on the Group that is appropriate, accurate and timely.



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INVESTOR RELATIONS (CONT’D)

2. General meetings

The Company’s AGM is the principal forum for dialogue and interaction with its shareholders at which the shareholders will be informed and updated on current developments of the Group. The Board has taken steps to encourage shareholders’ participation at general meetings such as serving notices for meetings earlier than the minimum notice period, setting the time and location of the general meeting that is convenient to the shareholders, ensuring the participation and availability of the external auditors to answer questions from any shareholders, strongly encouraging participation through proxy voting should the shareholders be unable to attend in person.

All resolutions put forward to a general meeting for voting are to be decided on a poll. A scrutineer will be appointed to monitor the conduct of polling for each general meeting. The outcome of all resolutions proposed in general meeting, including the total number of votes cast on the poll (together with percentage) in favour of and against of each resolution, will be announced to Bursa Securities at the end of the meeting day.

Notices of general meetings of the Company and related papers are distributed to shareholders within a reasonable and sufficient time frame. Adequate time is given during the general meetings to allow shareholders to seek clarifications or ask questions on pertinent and relevant matters.

3. Corporate Disclosure Policy

The Board is committed to provide effective communication to its shareholders and general public regarding the business, operations and financial performance of the Group and where necessary, information filed with regulators is in accordance with all applicable legal and regulatory requirements.

A Corporate Disclosure Policy was formalised to promote comprehensive, accurate and timely disclosures pertaining to the Company and the Group to regulators, shareholders and stakeholders.

ACCOUNTABILITY AND AUDIT

1. Financial Reporting

The Board aims to present a balanced, clear and comprehensive assessment of the Company and Group’s financial positions and prospects in all their reports to the shareholders, investors and regulatory authorities. This assessment is primarily provided in the Annual Report through the Chairman’s Statement and the Audited Financial Statements.

In preparing the financial statements, the Directors ensure that accounting standards approved by the Malaysian Financial Reporting Standards (“MFRS”) in Malaysia and the provisions of the Companies Act, 1965 are complied with and reasonable and prudent judgments and estimates have been made. The Directors’ overall responsibilities also include taking such steps as are reasonably open to them to safeguard the assets of the Group and for the implementation and continued operation of adequate accounting and internal control systems for the prevention of fraud and other irregularities.

The quarterly results announcements reflect the Board’s commitment to give regular updated assessments on the Company and Group’s performances.

2. Risk Management and Internal Control

The Board acknowledges its overall responsibilities for maintaining a sound system of internal controls which includes financial controls, operational and compliance controls and risk management to safeguard shareholders’ interest and the Company’s assets. The Group’s system of internal control is regularly reviewed to ensure its effectiveness. While acknowledging its responsibility for the system of internal control, the Board is aware that such a system cannot totally eliminate risks and thus can never be an absolute assurance against the Group failing to achieve its objectives.

Details on the Statement on Risk Management and Internal Control for the financial year ended 31 March 2016 are furnished in the Annual Report.



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ACCOUNTABILITY AND AUDIT (CONT’D)

3. Internal Audit

The internal audit function of the Group was outsourced to an independent business and risk management consulting firm during the financial year. The Internal Auditors reports directly to the Audit Committee of the Company.

The Internal Auditors conducted independent reviews on the key activities within the Group’s operating units based on a detailed internal audit plan which was approved by the Audit Committee. Internal Auditors reported their findings on the Group’s internal control system to the Audit Committee. Internal Auditors would report any incidence of non-compliance of the internal control system and any other matters that would have a material effect on the Group’s financial results and its going-concern assumptions. Internal Auditors would also ensure that all non-compliance of internal control system and weaknesses in the system are rectified without delay.

4. External Auditors

The Board, through the Audit Committee, has always maintained a formal and transparent relationship with the External Auditors. The Audit Committee met up with the External Auditors during the financial year ended 31 March 2016 to discuss the audit planning memorandum, financial reporting standards, interim audit report, their audit findings and annual financial statements. The report by the Audit Committee for the financial year ended 31 March 2016 is set out in this Annual Report.

The Audit Committee is empowered by the Board to review any matters concerning the appointment, re-appointment, resignation and/or dismissal of External Auditors and review and evaluate factors relating to the independence of the External Auditors. The Audit Committee works closely with the External Auditors in establishing procedures in assessing the suitability and independence of the External Auditors, in confirming that they are, and have been, independent throughout the conduct of the audit engagement with the Group in accordance with the independence criteria set out by the International Federation of Accountants and the Malaysian Institute of Accountants. The terms of engagement for services provided by the External Auditors are reviewed by the Audit Committee prior to submission to the Board for approval.

STATEMENT BY THE BOARD ON STATEMENT ON CORPORATE GOVERNANCE

The Board has deliberated, reviewed and approved this Statement. The Board considers and is satisfied that to the best of its knowledge, the Company has fulfilled its obligations under the Code, the relevant provisions of the AMLR of Bursa Securities on corporate governance and all applicable laws and regulations throughout the financial year ended 31 March 2016.



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The primary objective of the Audit Committee (“the Committee”) is to assist the Board of Directors (“the Board”) in discharging its statutory duties and responsibilities, among others, providing an additional assurance to the Board by giving an objective and independent review of financial, operational and administrative controls and procedures, establishing and maintaining internal controls and reinforce the independence of the Company’s External Auditors, thereby ensuring that the Auditors have free reign in the audit process.

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

Chairman:Selva Rasan a/l Dato’ Puspa DasIndependent Non-Executive Director

Members:See Poh Yee Independent Non-Executive Director

The Company is not complied with Rule 15.09 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) as the Audit Committee presently comprises only two (2) members arising from the resignation of Syed Amir Syakib Arsalan Bin Syed Ibrahim as a Board member on 28 July 2016. The Company will fill the vacancy within three (3) months from the date of non-compliance.

ROLE OF AUDIT COMMITTEE

The role of the Audit Committee is to oversee the Company’s financial reporting process, corporate governance process and provide the Board with assurance of the quality and reliability of financial information used by the Board and of the financial information issued publicly by the Company. The Audit Committee assumes the following fundamental responsibilities in the Company:-

• assessingtherisksandcontrolenvironment;• overseeingfinancialreporting;• evaluatingtheinternalandexternalauditprocesses;and• reviewingconflictofinterestsituationsandrelatedpartytransactions.

The terms of reference of the Audit Committee are available at the Company’s website at www.asdiongroup.com.

During the financial year under review, the Committee convened seven (7) meetings and the attendance of Committee members at meetings is set out as follows:

Committee Members No. of Meetings Attended

Selva Rasan a/l Dato’ Puspa Das 7 of 7

See Poh Yee 7 of 7

Syed Amir Syakib Arsalan Bin Syed Ibrahim(appointed on 28 September 2015, resigned on 28 July 2016)

3 of 3

Mohamad Farid Bin Mohd Yusof(resigned on 28 September 2015)

3 of 4

Tengku Azlan Ibni Sultan Abu Bakar(appointed on 8 April 2015, resigned on 27 April 2015)

0 of 1

AUDIT COMMITTEE REPORT


20

SUMMARY OF ACTIVITIES OF THE COMMITTEE DURING THE FINANCIAL YEAR ENDED 31 MARCH 2016

The Committee had carried out the following activities in the meetings held during the financial year ended 31 March 2016 in discharging their duties and responsibilities:-

1. Reviewed the Company’s unaudited quarterly results and the annual audited financial results together with the relevant announcements thereon and ensure compliance with approved accounting standards and adherence to other legal regulatory requirements as well as making relevant recommendation to the Board for approval.

2. Reviewed with the 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.

3. Reviewed with the Internal Auditors, the Internal Audit Plan, work done and reports, for the internal audit function and considered the findings of internal audit investigations and management responses thereon, and ensure that appropriate actions were taken in addressing the issues reported by the Internal Auditors.

4. Reviewed the related party transactions and/or recurrent related party transactions that transpired within the Group to ensure that the transactions entered into were at arm’s length basis and on normal commercial terms.

5. Considered and recommended to the Board for approval the re-appointment and remuneration of the External Auditors.

6. Reviewed and approved the Statement on Corporate Governance, Audit Committee Report and Statement on Risk Management and Internal Control for inclusion in the Company’s Annual Report.

INTERNAL AUDIT FUNCTION

Internal Audit function of the Group is outsourced to an independent professional services firm to carry out internal audit services for the Group. Internal audit reports are presented, together with Management’s response and proposed action plans to the Committee.

The Internal Auditors undertake internal audit functions based on the operational, compliance and risk based audit plan approved by the Committee. The risk-based audit plans covers the review of the key operational and financial activities including the efficacy of risk management practices, efficiency and effectiveness of operational controls and compliance with relevant laws and regulations. Scheduled audits are carried out on various subsidiaries of the Company in accordance to the approved Internal Audit Plan. A risk-based methodology is adopted to evaluate the adequacy and effectiveness of the risk management, financial, operational and governance processes.

The fee incurred during the financial year in relation to the internal audit function is RM7,500.00.

The internal audits conducted did not reveal any weakness which would result in material losses, contingencies or uncertainties that would require disclosure in the Annual Report.

AUDIT COMMITTEE REPORT


ANNUAL REPORT 2016

21

INTRODUCTION

The Board of Directors of Asdion Berhad (“Board”) acknowledges its responsibilities in establishing a sound risk management framework and internal control system as well as reviewing its adequacy and effectiveness throughout Asdion Berhad (“Asdion”) and its subsidiaries (“the Group”).

This Statement on Risk Management and Internal Control (“the Statement”) is prepared pursuant to Rule 15.26(b) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad and is guided by the Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers.

The Group’s risk management framework and its state of internal control for the financial year ended 31 March 2016 is outlined in ensuring section.

BOARD’S RESPONSIBILITY

The Board recognises that a sound system of risk management and internal control is an integral part of good corporate governance. The Board is responsible and accountable for the Group’s system of internal control, including the establishment of an appropriate control environment and framework, which encompass financial, operational and compliance controls, and risk management. The Board is committed and affirms its overall responsibility to maintain both a sound system of risk management and internal control and the proper management of risks throughout the operations of the Group in order to safeguard shareholders’ investments and Group’s assets.

The Board ensures that the adequacy, effectiveness and integrity of the internal control systems through regular reviews, accompanied by ongoing risk management process. This process has been in place for the financial year under review and up to the date of approval of this Statement for inclusion in the Annual Report of the Company.

The Board believes the risk management and internal control system in place are adequate and effective to manage the risk of the Group. Nevertheless, it should be noted that due to the inherent limitations in any system, such system established by the Group is designed to manage, rather than eliminate, the risk of failure arising from non-achievement of the Group’s policies, goals and objectives. In addition, it should be noted that any system can provide only reasonable, but not absolute assurance against material misstatement or loss.

KEY ELEMENTS OF INTERNAL CONTROL

The Company has in place a system of internal control which encompasses all types of control including those of a financial, operational, environmental and compliance nature. The system of internal control is structured in such a manner that it provides reasonable assurance that the likelihood of a significant adverse impact on objectives arising from a future event is at a level acceptable to the business.

To achieve a sound system of risk management and internal control, the key elements of the Group’s internal control system include:-

• Company’svaluestatement,CodeofEthicsandConducts,policiesandproceduresareinplaceandmadeavailabletoallstaff.• EstablishmentofBoard’sCommittees,namelyAuditCommittee,NominationCommitteeandRemunerationCommittee, to

assist the Board in discharging its duties.• ClearlydefinedobjectivesandtermsofreferenceofthevariousCommitteesestablishedbytheBoard.• Anorganisationalstructurethatisalignedtobusinessandoperationalrequirements,withclearlydefinedlinesofresponsibility

is in place for all business operating units.• ExperiencedandcompetentstaffareplacedtosupportandcontinuouslymonitortheeffectivenessoftheGroup’ssystemof

internal control.• TheBoardmeetsregularlyandiskeptupdatedontheGroup’sactivitiesandoperations.• QuarterlymonitoringofresultsandfinancialpositionbytheBoard.• RegularmanagementmeetingsareheldtodiscussontheoverallGroup’soperationalmatters.• Regularinternalauditreviewsarecarriedouttoidentifyanyareaofimprovement.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


22

INTERNAL AUDIT FUNCTION

The Board delegates the responsibility of monitoring the system of risk management and internal control to the Audit Committee. The Audit Committee has appointed an outsourced independent professional services firm (“Outsourced Internal Auditors”) to discharge the internal audit function. The Internal Auditors assess and review the adequacy and effectiveness of its systems of internal control and highlight significant risks impacting the Group with recommendations for improvement to the Audit Committee.

Audit Committee reviewed the adequacy of the scope, functions, competency and resources of the internal audit function to ascertain its effectiveness in discharging duties assigned. The Outsourced Internal Auditors assist the Audit Committee to fulfill its responsibilities by conducting internal audits in accordance with the audit plans which had reviewed and approved by the Audit Committee. For the current financial year, the scope of work covered by the Outsourced Internal Auditors is determined by the Audit Committee after careful consideration and discussion of the audit plan with the Outsourced Internal Auditors.

The Internal Auditors reviews the internal control processes in the key activities of the Group’s business by adopting a risk-based internal audit approach, which include the development of internal audit policies, establishment of annual audit plans, audit work processes and audit work reporting. Observations from internal audits are presented to the Audit Committee with the management’s responses and proposed action plans for its review.

The Audit Committee has reviewed the Internal Audit Reports of the Group during the financial year. The results of the audits and recommendations for improvement were tabled at the Audit Committee meetings for discussion and assessment. Key and significant issues were reported to the Board by the Chairman of the Audit Committee for further deliberation.

The cost incurred for the internal audit function for the financial year ended 31 March 2016 was RM7,500.

RISK MANAGEMENT FRAMEWORK

An effective risk management process would help the Company to achieve its performance and profitability targets by providing risk information to enable better decisions, both in the setting of the Company’s strategy and in daily decision making. The Board has an ongoing process for identifying, evaluating and managing significant risks faced by the Group. The process of identifying, evaluating and managing the significant risks are embedded in the various work processes and procedures in the Group. The Board and the management have put in place certain risk management guidelines, control measures and processes for the Group to identify, evaluate and manage the significant risks.

The systems of risk management is subjected to regular evaluations on their adequacy and effectiveness by the Audit Committee and management. Any significant risks and mitigating responses are communicated to the Board through the Audit Committee to ensure their continuing relevance and compliance with current/applicable laws and regulations.

REVIEW BY EXTERNAL AUDITORS

The External Auditors have reviewed this Statement and 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 reviewing the adequacy and integrity of the Group risk management and internal control system.

ASSURANCE TO THE BOARD

Management of the Group is accountable for providing assurance to the Board that risk management policies and internal control system are implemented and monitored. The Board has received assurance from the Executive Directors that the Group’s risk management and internal control systems are operating adequately and effectively, in all material aspects, based on the risk management and internal control system put in place.

STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL


ANNUAL REPORT 2016

23

CONCLUSION

The Board is of the view that there was no weaknesses in the system of internal control that has resulted in any material losses, contingencies or uncertainties which would require disclosure in this Statement.

Based on the assurances provided and with the implementation of a risk management framework as well as the adoption of an internal control system, the Board is of the opinion that the risk management and internal control system of the Group for the year under review, up to the date of the issuance of the Group’s financial statements, are adequate and effective to achieve its business objectives, as well as to safeguard shareholders’ investments and all stakeholders’ interests.

Nevertheless, the Board is cognizant of the fact that the Group’s risk management practices and internal control system must continuously evolve to meet the changing and challenging business environment. Hence, the Board will continues to take appropriate measures to sustain and where required, to further enhance the Group’s risk management and internal control system.

This Statement is made in accordance with a resolution passed by the Board of Directors.

STATEMENT ON RISK MANAGEMENTAND INTERNAL CONTROL


24

1. UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS

No corporate exercise involving fund raising was carried out during the financial year ended 31 March 2016.

2. SHARE BUY-BACK

The Company did not carry out any share buy-back during the financial year ended 31 March 2016.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES EXERCISED

There were no options, warrants or convertible securities issued during the financial year ended 31 March 2016.

During the financial year ended 31 March 2016, there were 3,535,300 ordinary shares issued pursuant to the conversion of Warrants 2014/2019, details of which are as follows:-

Listing Date No. of ordinaryshares issued

01.07.2015 10,00007.07.2015 150,30010.07.2015 56,00021.07.2015 258,00028.07.2015 527,00030.07.2015 237,30006.08.2015 933,90010.08.2015 1,169,00013.08.2015 145,00018.08.2015 48,800Total 3,535,300

4. DEPOSITORY RECEIPT PROGRAMME

The Company did not sponsor any Depository Receipt Programme during the financial year ended 31 March 2016.

5. IMPOSITION OF SANCTIONS / PENALTIES

There were no public impositions of sanctions or penalties imposed on the Company and its subsidiaries, Directors or management by the regulatory bodies during the financial year ended 31 March 2016.

6. NON-AUDIT FEES

The payment of non-audit fees to the External Auditors by the Group for the financial year ended 31 March 2016 was RM5,800.00.

7. VARIATION IN RESULTS

There were material variation of 89% between the audited financial results for the financial year ended 31 March 2016 and the unaudited financial results for the fourth quarter ended 31 March 2016 of the Group, mainly due to wrong calculation of the gain resulting from disposal of subsidiaries.

ADDITIONALCOMPLIANCE INFORMATION


ANNUAL REPORT 2016

25

8. PROFIT GUARANTEE

The Company did not give any profit guarantee during the financial year under review.

9. MATERIAL CONTRACTS

There were no material contracts entered by the Company and its subsidiaries involving Directors and major shareholders’ interest during the financial year ended 31 March 2016.

10. RECURRENT RELATED PARTY TRANSACTIONS

The Company did not enter into any recurrent related party transactions of revenue or trading nature during the financial year ended 31 March 2016.

ADDITIONALCOMPLIANCE INFORMATION


26

The Board of Directors of the Company is fully accountable to ensure that the financial statements are drawn up in accordance with the Companies Act, 1965 (“the Act”) and the applicable approved accounting standards prescribed by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Company and its subsidiaries (“the Group”) as at 31 March 2016 and of the results and cash flows of the Company and the Group for the financial year then ended.

In the preparation of the financial statements for the financial year ended 31 March 2016, the Directors have:-

a. applied relevant and appropriate accounting policies consistently and in accordance with the applicable approved accounting standards;

b. madejudgmentsandestimatesthatareprudentandreasonable;and

c. used the going concern basis for the preparation of the financial statements.

The Directors are responsible for ensuring that proper accounting records are kept in accordance with the Act. The Directors also have the overall responsibility in taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

This statement is made in accordance with a resolution passed by the Board of Directors.

STATEMENT OF DIRECTORS’ RESPONSIBILITY

FINANCIALSTATEMENTS31 MARCH 2016

28-32 Directors’ Report33 Statement by Directors and Statutory Declaration

34-35 Independent Auditors’ Report36-37 Statements of Financial Position

38 Statements of Profit or Loss and Other Comprehensive Income

39-41 Statements of Changes in Equity42-43 Statements of Cash Flows44-96 Notes to the Financial Statements

97 Disclosure of Realised and Unrealised Profits


28

DIRECTORS’REPORT

The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2016.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the businesses of investment holding, software development, information communication technology and related services. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

Group CompanyRM RM

(Loss)/Profit after taxation for the financial year (2,633,311) 923,238

Attributable to: Owners of the Company (1,742,103) 923,238 Non-controlling interests (891,208) -

(2,633,311) 923,238

DIVIDENDS

No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.

ISSUE OF SHARES AND DEBENTURES

During the financial year, the Company had issued 3,535,300 ordinary shares of par value of RM0.10 each at an exercise price of RM0.50 from the conversion of free Warrants 2014/2019.

The Company did not issue any debenture during the financial year.

WARRANTS

The Company had on 25 March 2014, issued 52,191,260 warrants on the following basis:-

(a) Issuance of 8,350,760 free warrants (“Free Warrants”) on the basis of one (1) Free Warrant for every ten (10) existing ordinary shares of RM0.10 each in the Company; and

(b) Private placement of 29,227,000 new shares (“Placement Shares”), together with 43,840,500 detachable warrants (“Placement Warrants”) on the basis of three (3) Placement Warrants for every two (2) Placement Shares subscribed.

The Free Warrants and Placement Warrants (“Collectively defined as “Warrant 2014/2019”) were listed on the ACE Market of Bursa Malaysia Securities Berhad on 31 March 2014.

During the financial year, 3,535,300 Free Warrants were exercised. There are 4,815,460 Free Warrants and 43,840,500 Placement Warrants of 2014/2019 remained unexercised as at 31 March 2016.


ANNUAL REPORT 2016

29

WARRANTS (CONT’D)

The ordinary shares issued from the exercise of warrants shall rank pari passu in all respects with the existing issued ordinary shares of the Company except that they shall not be entitled to any dividends, distributions, rights, allotments and/or any other forms of distribution where the entitlement date precedes the relevant date of the allotments and issuance of the new share arising from the exercise of warrants.

The main features of the Warrants 2014/2019 are as follows:-

(i) Each warrant will entitle the registered holder to subscribe for one (1) new ordinary share of par value of RM0.10 each in the Company at an exercise price of RM0.50 each subject to adjustments in accordance with the conditions stipulated in the Deed Poll;

(ii) The warrants may be exercised at any time on or before the maturity date falling date five (5) years (2014/2019) from the date of issue of the warrants on 25 March 2014. Warrants not exercised after the exercise period will thereafter lapse and cease to be valid;

(iii) The new shares to be issued pursuant to the exercise of the warrants shall, upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company in issue except that they will not be entitled to any dividends, rights, allotments and/or any other form of distribution, the entitlement date of which is before the allotment and issuance of the new shares; and

(iv) The persons to whom the warrants have been granted have no rights to participate in any distributor and/or after of further securities in the Company until/and unless warrants holders exercise their warrants for new shares.

DIRECTORS

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

See Poh YeeSelva Rasan A/L Dato’ Puspa Das Mohamad Farid Bin Mohd Yusof Datuk Raime Bin Unggi Datuk Seri Maglin Dennis D’Cruz (appointed on 28.9.2015)Jason Minos Anak Peter (appointed on 28.9.2015)Low Jyh Sing (appointed on 1.3.2016)Lye Siang Long (appointed on 25.7.2016)Dato’ HJ. Zulkifli Bin HJ. Alias (appointed on 25.7.2016)Ang Chin Poo (appointed on 18.5.2016 and resigned on 1.8.2016)Syed Amir Syakib Arsalan Bin Syed Ibrahim (appointed on 28.9.2015 and resigned on 28.7.2016)Dato’ Yen Soon Ai (resigned on 26.9.2015)Tengku Azlan Ibni Sultan Abu Bakar (resigned on 26.9.2015)Dato’ Mohamed Ridzuan Bin Nor Md (resigned on 26.9.2015)Yap Tai Tee (resigned on 11.11.2015)

DIRECTORSREPORT


30

DIRECTORS’ INTEREST

According to the Register of Directors’ shareholdings, the interest of director holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:-

Number of ordinary shares of RM0.10 eachAt 1.4.2015 Acquired Sold At 31.3.2016

Direct InterestSee Poh Yee - 21,000 - 21,000

The other directors holding office at the end of the financial year had no interest in shares in the Company or its related corporations during the financial year.

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive any benefits (other than as disclosed in Notes 26 and 30 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

AUDIT COMMITTEE

The Audit Committee comprises the following members:-

• SelvaRasanA/LDato’PuspaDas (Chairman/Independent Non-Executive Director)• SeePohYee (Member/Independent Non-Executive Director)• SyedAmirSyakibArsalanBinSyed Ibrahim (Member/Independent Non-Executive Director) (appointed on 28.9.2015 and

resigned on 28.7.2016)• MohamadFaridBinMohdYusof (Member/Non-Independent Non-Executive Director) (resigned on 28.9.2015)

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

In performing its functions, the Audit Committee reviewed the overall scope of external audit. It met up with the Group’s auditors to discuss the results of their examinations and their evaluation of the system of internal accounting controls of the Group and of the Company. The Audit Committee also reviewed the assistance given by the Group’s and the Company’s officers to the auditors.

The Audit Committee reviewed the financial statements of the Group and of the Company as well as the auditors’ report thereon and recommended to the Board of Directors, the reappointment of Messrs SJ Grant Thornton as statutory auditors.

DIRECTORSREPORT


ANNUAL REPORT 2016

31

OTHER STATUTORY INFORMATION

Before the Statements of Financial Position and Statements of Profit or Loss and Other Comprehensive Income of the Group and of the Company were made out, the Directors took reasonable steps:-

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

(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:-

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

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

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

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

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

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

In the opinion of the Directors:-

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

(b) the results of operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(c) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the current financial year in which this report is made.

SIGNIFICANT EVENTS

The significant events during the financial year and after the reporting period are disclosed as Note 35 to the financial statements.

DIRECTORSREPORT


32

AUDITORS

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

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

JASON MINOS ANAK PETER

LOW JYH SING

DIRECTORS

Kuala Lumpur11 August 2016

DIRECTORSREPORT


ANNUAL REPORT 2016

33

In the opinion of the Directors, the 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 31 March 2016 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the information set out on page 97 to the financial statements had been compiled 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, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

JASON MINOS ANAK PETER LOW JYH SING


STATEMENT BY

STATUTORY

DIRECTORS

DECLARATION

I, Jason Minos Anak Peter, being the Director primarily responsible for the financial management of Asdion Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 36 to 96 and financial information set out on page 97 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed at Kuala Lumpur in )the Federal Territory this day of )11 August 2016 ) JASON MINOS ANAK PETER

Before me:

W.490S. ARULSAMYCommissioner for Oaths


34

INDEPENDENTAUDITORS’ REPORTTO THE MEMBERS OF ASDION BERHAD(Incorporated in Malaysia)Company No. 590812-D

Report on the Financial Statements

We have audited the financial statements of Asdion Berhad, which comprise the Statements of Financial Position as at 31 March 2016 of the Group and of the Company, the Statements of Profit or Loss and Other Comprehensive Income, Statements of Changes in Equity and Statements of Cash Flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes 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 so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal 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 of the 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 accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 March 2016 and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

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

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 5 to the financial statements.

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

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


ANNUAL REPORT 2016

35

Other Reporting Responsibilities

The supplementary information set out on page 97 is disclosed to meet the requirements of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of 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.

Other Matters

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

SJ GRANT THORNTON DATO’ N.K. JASANI(NO. AF: 0737) (NO: 708/03/18(J/PH))

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT


TO THE MEMBERS OF ASDION BERHAD(Incorporated in Malaysia)Company No. 590812-D

INDEPENDENTAUDITORS’ REPORT


36

STATEMENTS OFFINANCIAL POSITION FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016

Group CompanyNote 2016 2015 2016 2015

RM RM RM RM

ASSETSNon-current assets Property, plant and equipment 4 10,949,243 5,437,285 493 716 Investments in subsidiaries 5 - - 8,053,138 7,903,136 Investment in associates 6 - - 360,000 36 Development costs 7 - 8,073 - 8,073 Other investment 8 - 104,644 - - Interest in a joint venture 9 6,000,000 6,000,000 6,000,000 6,000,000 Goodwill 10 5,480,351 5,480,351 - -

Total non-current assets 22,429,594 17,030,353 14,413,631 13,911,961

Current assets Inventories 11 124,867 240,519 - - Trade receivables 12 1,955,767 1,446,184 - - Other receivables 13 6,302,122 5,678,262 4,964,419 5,051,199 Amount due from subsidiaries 14 - - 3,013,508 227,523 Tax refundable 6,692 6,692 4,694 4,694 Cash and bank balances 4,636,725 1,867,799 4,021,226 1,484,845

Total current assets 13,026,173 9,239,456 12,003,847 6,768,261

Assets classified as held-for-sale 15 - 9,000,834 - 9,000,834

Total assets 35,455,767 35,270,643 26,417,478 29,681,056

EQUITY AND LIABILITIESEQUITY Share capital 16 11,626,990 11,273,460 11,626,990 11,273,460 Reserves 17 8,619,759 12,259,629 9,924,556 11,631,978

Equity attributable to owners of the Company

20,246,749 23,533,089 21,551,546 22,905,438

Non-controlling interests 5 (51,407) 979,020 - -

Total equity 20,195,342 24,512,109 21,551,546 22,905,438


ANNUAL REPORT 2016

37

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

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2016

STATEMENTS OFFINANCIAL POSITION


RM RM RM RM

LIABILITIESNon-current liabilities Deferred tax liabilities 18 230,000 141,964 - - Finance lease liabilities 19 756,881 43,935 - - Borrowings 20 1,441,365 1,573,601 - -

Total non-current liabilities 2,428,246 1,759,500 - -

Current liabilities Trade payables 21 2,138,897 106,422 - - Other payables 22 5,036,560 3,650,159 2,665,681 2,405,204 Amount due to directors 23 3,390,558 3,290,789 - 106,892 Amount due to subsidiaries 24 - - 2,200,201 2,810,322 Finance lease liabilities 19 1,883,827 46,708 - - Tax payable 8,630 164,000 - - Borrowings 20 373,707 1,546,953 50 1,259,197

Total current liabilities 12,832,179 8,805,031 4,865,932 6,581,615

Liabilities classified as held-for-sale 15 - 194,003 - 194,003

Total liabilities 15,260,425 10,758,534 4,865,932 6,775,618

Total equity and liabilities 35,455,767 35,270,643 26,417,478 29,681,056


38

STATEMENTS OF PROFIT OR LOSS ANDOTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 MARCH 2016



RM RM RM RM

Revenue 25 19,844,025 4,323,575 - -

Cost of sales (14,075,671) (1,168,874) - -

Gross profit 5,768,354 3,154,701 - -

Other income 5,193,835 718,572 5,047,814 163,938

Administration expenses (10,684,316) (4,881,923) (3,852,660) (1,485,402)

Other expenses (1,906,624) (802,033) (8,834) (71,011)

Share of losses in associate (360,000) - - -

Finance costs (480,538) (563,983) (263,082) (456,999)

(Loss)/Profit before taxation 26 (2,469,289) (2,374,666) 923,238 (1,849,474)

Tax expense 27 (164,022) (224,404) - -

(Loss)/Profit after taxation (2,633,311) (2,599,070) 923,238 (1,849,474)

Other comprehensive income/(loss)- Foreign currency translation 9,018 (59,516) - - - (Loss)/Gain on fair value changes of

available-for-sale financial asset (73,119) 73,119 - - - Deferred taxation liability arising from

revaluation 79,772 - - -

Total other comprehensive income for the year 15,671 13,603 - -

Total comprehensive (loss)/income for the financial year (2,617,640) (2,585,467) 923,238 (1,849,474)

(Loss)/Profit after taxation attributable to:-Owners of the Company (1,742,103) (2,810,009) 923,238 (1,849,474)Non-controlling interests (891,208) 210,939 - -

(2,633,311) (2,599,070) 923,238 (1,849,474)

Total comprehensive (loss)/income attributable to:-

Owners of the Company (1,726,432) (2,799,671) 923,238 (1,849,474)Non-controlling interests (891,208) 214,204 - -

(2,617,640) (2,585,467) 923,238 (1,849,474)

Loss per share (sen)- Basic/Diluted 28 (1.51) (2.49)


ANNUAL REPORT 2016

39

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STATEMENTS OFCHANGES IN EQUITY



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18

- -

- -

9,0

18

- 9

,018

Tota

l oth

er c

ompr

ehen

sive

pro

fit/

(loss

) for

the

year

- -

- 9

,018

-

(73,

119)

- 7

9,77

2 1

5,67

1 -

15,

671

Loss

afte

r ta

xatio

n fo

r th

e fin

anci

al

year

- -

- -

- -

- (1

,742

,103

) (1

,742

,103

) (8

91,2

08)

(2,6

33,3

11)

Bal

ance

at 3

1 M

arch

201

6 1

1,62

6,99

0 1

9,67

2,58

4 4

,567

,977

1

32,2

89

- (7

,312

) 4

75,5

09

(16,

221,

288)

20,

246,

749

(51,

407)

20,

195,

342




ANNUAL REPORT 2016

41



Non-Distributable DistributableShare Share Warrant Revaluation Accumulated Total

Company capital premium reserve reserve losses equity RM RM RM RM RM RM

Balance at 1 April 2014 11,273,460 18,258,464 4,567,977 4,044,780 (13,389,769) 24,754,912

Loss for the financial year/ Total comprehensive loss for the financial year - - - - (1,849,474) (1,849,474)

Balance at 31 March 2015 11,273,460 18,258,464 4,567,977 4,044,780 (15,239,243) 22,905,438

Profit for the financial year/ Total comprehensive income for the financial year - - - - 923,238 923,238

Contribution beyond distributions to owners of the Company:

- Disposal of asset held for sale - - - (4,044,780) - (4,044,780)

- Issuance of shares 353,530 1,414,120 - - - 1,767,650

Total transactions with owners 353,530 1,414,120 - (4,044,780) - (2,277,130)

Balance at 31 March 2016 11,626,990 19,672,584 4,567,977 - (14,316,005) 21,551,546


42

STATEMENTS OFCASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2016


RM RM RM RM

OPERATING ACTIVITIES (Loss)/Profit before taxation (2,469,289) (2,374,666) 923,238 (1,849,474)

Adjustments for: Amortisation of development costs 8,073 10,764 8,073 10,764 Depreciation of property, plant and

equipment 1,849,983 857,209 761 60,247 Impairment loss on: - intangible assets - 393,247 - - - other investment 31,525 - - - - trade receivables 549,886 10,747 - - Interest expense 274,134 563,983 79,082 456,999 Gain on disposal of: - asset held for sale (4,437,899) - (4,437,899) - - property, plant and equipment (19,768) (12,670) - - - subsidiaries (71,200) (487,838) - (24,000) Interest income (110,384) (141,131) (106,845) (139,784) Share of loss of equity accounted

associate 360,000 - - - Written off of bad debts 2,000 21,192 - - Written off of deposit 9,220 - 7,500 - Written off of property, plant and

equipment 168,276 - - -

Operating loss before working capital changes (3,855,443) (1,159,163) (3,526,090) (1,485,248)

Changes in working capital:- Inventories 115,652 (88,379) - - Receivables (1,694,549) (3,088,950) 79,280 (1,864,624) Payables 3,803,866 2,869,751 260,477 2,018,547 Subsidiaries - - - (137,490) Directors 99,769 1,105,234 (106,892) 100,317

Cash used in operations (1,530,705) (361,507) (3,293,225) (1,368,498)

Income tax refunded 8,811 2,093 - -

Net cash used in operating activities (1,521,894) (359,414) (3,293,225) (1,368,498)


ANNUAL REPORT 2016

43


STATEMENTS OFCASH FLOWS



RM RM RM RM

INVESTING ACTIVITIES Investment in a joint venture - (6,000,000) - (6,000,000) Interest received 110,384 141,131 106,845 139,784 Uplifted of deposits pledged with a

licensed bank - 7,132 - - Acquisition of subsididaries, net of cash

acquired - (5,999,387) - (6,000,002) Investment in subsidiary - - (150,002) - Proceed from disposal of : - asset held for sale 9,200,000 - 9,200,000 - - property, plant and equipment 19,657 24,854 - - - subsidiaries, net of proceeds - (2,838) - 24,000 Purchase of property, plant and

equipmentA

(3,927,101) (159,151) (538) - Advances to subsidiaries - - (3,396,106) - Additional investment in associate (359,964) - (359,964) -

Net cash from/(used in) investing activities 5,042,976 (11,988,259) 5,400,235 (11,836,218)

FINANCING ACTIVITIESInterest expenses (274,134) (563,983) (79,082) (456,999)Net proceeds from warrant exercise 1,767,650 - 1,767,650 - Repayment of hire purchase obligations (825,535) (49,047) - - Repayment of term loans (1,305,482) (433,998) (1,259,197) (316,726)

Net cash (used in)/from financing

activities (637,501) (1,047,028) 429,371 (773,725)

CASH AND CASH EQUIVALENTS Net changes 2,883,581 (13,394,701) 2,536,381 (13,978,441)Exchange differences (114,655) (168,338) - - At beginning of the financial year 1,867,799 15,430,838 1,484,845 15,463,286

At end of the financial year 4,636,725 1,867,799 4,021,226 1,484,845

NOTE TO THE STATEMENT OF CASH FLOWS

A. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

GroupThe Group acquired property, plant and equipment with an aggregrate costs of RM7,302,701 (2015: RM159,151) of which RM3,375,600 (2015: RMNIL) was acquired by means of finance lease. Cash payment of RM3,927,101 (2015: RMNIL) was made to purchase property, plant and equipment.


44

1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on ACE Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur. The principal place of business of the Company is located at Level 6-1, Tower 7, Avenue 3, The Horizon Phase 1, Bangsar South, No.8, Jalan Kerinchi, 59200 Kuala Lumpur.

The Company is principally engaged in the businesses of investment holding, software development, information communication technology and related services.

The principal activities of the subsidiaries are set out in Note 5 to the financial statements.

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 passed on 11 August 2016.

2. BASIS OF PREPARATION

2.1 Statement of Compliance

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

2.2 Basis of Measurement

The financial statements of the Group and the Company are prepared under the historical cost convention, unless otherwise indicated in the summary of significant accounting policies.

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

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

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

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

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

NOTES TO THEFINANCIAL STATEMENTS31 MARCH 2016


ANNUAL REPORT 2016

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31 MARCH 2016

2. BASIS OF PREPARATION (CONT’D)

2.2 Basis of Measurement (cont’d)

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

Level 1 - Quoted (adjusted) market prices in active markets for identical assets or liabilities.Level 2 - Valuation techniques for which the lowest level input that is significant to their fair value measurement

is directly or indirectly observable.Level 3 - Valuation techniques for which the lowest level input that is significant to their fair value measurement

is unobservable.

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

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

2.3 Functional and Presentation Currency

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

2.4 Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, and IC Interpretations (“IC Int”)

Except for the changes below, the Group and the Company have consistently applied the accounting policies set out in Note 3 to all periods presented in these financial statements.

Initial application of the amendments to the standards and IC Int did not have material impact to the financial statements.

2.4.1 Annual Improvement to MFRS 2010-2012 Cycle

2.4.1.1 MFRS 13 Fair Value Measurement

It clarifies in the Basis of Conclusion that short-term receivables and payables with no stated interest rates can be measured at invoice amounts when the effect of discounting is immaterial.

2.4.2 Annual Improvement to MFRS 2011-2013 Cycle

2.4.2.1 MFRS 13 Fair Value Measurement

The amendment clarifies that the portfolio exception in MFRS 13 can be applied not only to the financial assets and financial liabilities, but also to other contracts within the scope of MFRS 9 (or MFRS 139, as applicable).

The adoption of amendments does not have material impact on the Group’s and the Company’s financial statements.

NOTES TO THEFINANCIAL STATEMENTS


46


2.5 Standards Issued But Not Yet Effective At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to

existing standards have been published by the Malaysian Accounting Standards Board but are not yet effective, and have not been adopted by the Group and the Company.

Management anticipates that all of these relevant pronouncements will be adopted in the Group’s and the Company’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s and the Company’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group’s and the Company’s financial statements.

MFRS 9 Financial Instruments - effective 1 January 2018 MFRS 9 replaces MFRS 139 Financial Instruments: Recognition and Measurement and all previous version of MFRS

9. The new standard introduces extensive requirements and guidance for classification and measurement of financial assets and financial liabilities which fall under the scope of MFRS 9, new “expected credit loss model” under the impairment of financial assets and greater flexibility has been allowed in hedge accounting transactions. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost. It is also expected that the Group’s investment in unquoted shares will be measured at fair value through other comprehensive income.

The adoption of MFRS 9 will result in a change in accounting policy. The Group and the Company are currently examining the financial impact of adopting MFRS 9.

MFRS 15 Revenue from Contracts with Customers - effective 1 January 2018

MFRS 15 presents new requirements for the recognition of revenue, replacing the guidance of MFRS 111 Construction Contracts, MFRS 118 Revenue, IC Int 13 Customer Loyalty Programmes, IC Int 15 Agreements for Construction of Real Estate, IC Int 18 Transfers of Assets from Customers and IC Int 131 Revenue – Barter Transactions Involving Advertising Services. The principles in MFRS 15 provide a more structured approach to measuring and recognising revenue. It establishes a new five-step model that will apply to revenue arising from contracts with customers. Under MFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The adoption of MFRS 15 will result in a change in accounting policy. The Group and the Company are currently assessing the impact of MFRS 15 and plan to adopt the new standards on the required effective date.

MFRS 16 Leases - effective 1 January 2019

MFRS 16 replaces MFRS 117 Leases. MFRS 16 eliminates the distinction between finance and operating leases for lessees. As off-balance sheet will no longer be allowed except for some limited practical exemptions, all leases will be brought onto the statement of financial position by recognising a ‘right-of-use’ asset and a lease liability. In other words, for a lessee that has material operating leases, the assets and liabilities reported on its statement of financial position are expected to increase substantially.

The Group and the Company are currently assessing the impact of MFRS 16 and plans to adopt the new standards on the required effective date.

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2.6 Significant Accounting Estimates and Judgements

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

2.6.1 Estimation Uncertainty

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

Useful lives of depreciable assets

Management estimates the useful lives of the property, plant and equipment to be within 3 to 50 years and reviews the useful lives of depreciable assets at end each of the reporting period. At 31 March 2016, management assesses that the useful lives represent the expected utility of the assets to the Group. Actual results, however, may vary due to change in the expected level of usage and technological developments, which resulting the adjustment to the Group’s assets.

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

A 1% difference in the expected useful lives of the property, plant and equipment from the management’ estimates would result in approximately 0.45% variance in the Group’s profit for the financial year.

Impairment of intangible assets

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

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

Further details of the carrying values, key assumptions applied in the impairment assessment of intangible assets and the assumptions are disclosed in Note 10 to the financial statements.

A 1% increase of the discount rate applied in the impairment test would result in approximately 1.15% variance in the Group’s impairment test’s net present value.

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48


2.6 Significant Accounting Estimates and Judgements (cont’d)

2.6.2 Significant Management Judgement

The significant management judgements in applying the accounting policies of the Group that have the most significant effect on the statements are as follows:-

Leases

In applying the classification of leases in MFRS 117, management considers some of its leasehold properties as finance lease arrangements.

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

3. SIGNIFICANT ACCOUNTING POLICIES

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

3.1 Consolidation

3.1.1 Subsidiaries

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

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

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

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ANNUAL REPORT 2016

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3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

3.1 Consolidation (cont’d)

3.1.2 Basis of Consolidation

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

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between entities of the Group are eliminated in full in preparing the consolidated financial statements. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. Temporary differences arising from the elimination of profits and losses resulting from intragroup transactions will be treated in accordance to Note 3.3 of the financial statements.

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

Changes in the 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.

3.1.3 Business Combinations and Goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured

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

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

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

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

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

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

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50



3.1.3 Business Combinations and Goodwill (cont’d)

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

3.1.4 Loss of Control

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

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

3.1.5 Non-controlling Interest

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

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

3.1.6 Associates and Joint Arrangements

Associates are entities in which the Group has significant influence, but no control, over their financial and operating policies.

A joint venture is a type of joint arrangement whereby the parties have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The Group’s investments in its associates and joint venture are accounted for using the equity method. Under the equity method, investment in an associate or a joint venture is carried in the statement of financial position at cost plus post acquisition changes in the Group’s share of net assets of the associate or joint venture since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.

The share of the result of an associate or a joint venture is reflected in profit or loss. Any change in other comprehensive income of those investees is presented as part of the Group’s other comprehensive income. In addition, where there has been a change recognised directly in the equity of an associate or a joint venture, the Group recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.

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3.1.6 Associates and Joint Arrangements (cont’d)

The aggregate of the Group’s share of profit or loss of an associate and a joint venture is shown on the face of the statement of profit or loss and other comprehensive income outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate or joint venture.

When the Group’s share of losses exceeds its interest in an associate or a joint venture, the carrying amount of that interest including any long-term investment is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate or the joint venture.

The financial statements of the associates and joint venture are prepared as of the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies of the associates or joint venture in line with those of the Group.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investments in its associates or joint venture. The Group determines at each end of the reporting period whether there is any objective evidence that the investments in the associates or joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associates or joint venture and their carrying value, then recognises the amount in the “share of profit of investments accounted for using the equity method” in profit or loss.

Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gain or loss previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

In the Company’s separate financial statements, investments in associates and a joint venture are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

3.2 Foreign Currency Translation

Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the measurement of monetary items at year-end exchange rates, whether realised or unrealised, are recognised in profit or loss except for exchange differences arising from 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.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined. 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.

31 MARCH 2016



52


3.2 Foreign Currency Translation (cont’d)

In the Group’s financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than the RM (the Group’s presentation currency) are translated into RM upon consolidation. The functional currency of the entities in the Group has remained unchanged during the reporting period.

On consolidation, assets and liabilities have been translated into RM at the closing rate at end of each reporting period. Income and expenses have been translated into the Group’s presentation currency at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into RM at the closing rate.

3.3 Tax Expense

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

3.3.1 Current Tax

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

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

3.3.2 Deferred Tax

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

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement

of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

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

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

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3.4 Goods and Services Tax

Goods and Services Tax (“GST”) is a consumption tax based on value-added concept. GST is imposed on goods and services at every production and distribution stage in the supply chain including importation of goods and services, at the applicable tax rate of 6%. Input GST that the Company paid on purchases of business inputs can be deducted from output GST.

Revenues, expenses and assets are recognised net of the amount of GST except:-

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

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

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

3.5 Property, Plant and Equipment

Property, plant and equipment are initially stated 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.

All property, plant and equipment are subsequently stated at cost less accumulated depreciation and less any impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such costs as individual assets with specific useful lives and depreciation, respectively. All other repair and maintenance costs are recognised in profit or loss as incurred.

Land and buildings that are leasehold property are also included in property, plant and equipment if they are held under a finance lease. Such assets are depreciated over their expected useful lives or over the term of the lease, if shorter.

Properties are revalued periodically, at least once in every 5 years. Surpluses arising from the revaluation are recognised in other comprehensive income and accumulated in equity under the revaluation reserve. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are recognised in profit or loss.

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

Leasehold properties Over the unexpired lease period or 2% whichever is shorter

Renovations 33.3%Computers 33.3%Motor vehicles 20%Plant and machinery 10%Office equipment, furniture and fittings 10% to 20%

The residual values, useful lives and depreciation method are reviewed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable, or at least annually to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

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

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3.6 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and any accumulated impairment loss.

The useful life of intangible assets is assessed to be either finite or indefinite. Intangible assets with finite life are amortised on straight-line basis over the estimated economic useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by charging the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite useful life is recognised in the profit or loss in the expense category consistent with the function of the intangible asset.

Intangible assets with indefinite useful life are tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gain or losses arising from derecognition of an intangible assets is measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the profit or loss when the asset is derecognised.

3.6.1 Research and Development Expenditure

Research expenditure are expensed as incurred.

Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as non-current assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an entity can demonstrate all of the following:-

(a) its ability to measure reliably the expenditure attributable to the asset under development;(b) the product or process is technically and commercially feasible;(c) its future economic benefits are probable;(d) its intention to complete and the ability to use or sell the developed asset; and(e) the availability of adequate technical, financial and other resources to complete the asset under

development.

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the subsequent period.

The development expenditure is amortised on a straight-line method over a period of 5 years when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its recoverable amount.

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3.7 Financial Instruments

3.7.1 Initial Recognition and Measurement

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

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

3.7.2 Financial Assets - Categorisation and Subsequent Measurement

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

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

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

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

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

As at the reporting date, the Group and the Company carry only loan and receivables and available-for-sales financial assets on their statements of financial position.

Loans and receivables

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

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

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3.7 Financial Instruments (Cont’d)

3.7.2 Financial Assets - Categorisation and Subsequent Measurement (cont’d)

Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either designated to this category

or do not qualify for inclusion in any of the other categories of financial assets. The Group’s and the Company’s available-for-sale financial assets include mainly listed securities.

Available-for-sale financial assets are measured at fair value subsequent to the initial recognition. Gains and losses are recognised in other comprehensive income and reported within the available-for-sale reserve within equity, except for impairment losses and foreign exchange differences on monetary assets, which are recognised in profit or loss. When the asset is disposed off or is determined to be impaired the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss and presented as a reclassification adjustment within other comprehensive income.

Interest calculated using the effective interest method and dividends are recognised in profit or loss. Dividends on an available-for-sale equity are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

Investment in equity instruments that do not have a quoted market price in an active market and 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 end of the reporting period.

3.7.3 Financial Liabilities - Categorisation and Subsequent Measurement

After the initial recognition, financial liability is classified as:-

(a) financial liability at fair value through profit or loss; (b) other liabilities measure at amortised cost using the effective interest method; and (c) financial guarantee contracts.

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

As at the reporting date, the Group and the Company carry only other financial liabilities and financial guarantee on their statements of financial position.

Other liabilities measured at amortised cost

The Group’s and the Company’s other liabilities include trade payables, other payables, finance lease liabilities, amount due to directors, amount due to subsidiaries and borrowings.

Other liabilities are subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

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3.7 Financial Instruments (Cont’d)

3.7.3 Financial Liabilities - Categorisation and Subsequent Measurement (cont’d)

Financial guarantee contracts

Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specific debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, 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 recognised less cumulative amortisation.

3.8 Impairment of Assets

3.8.1 Non-Financial Assets

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

Impairment losses of continuing operations, including impairment on inventories, are recognised in the profit or loss in those expense categories consistent with the function of the impaired asset.

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

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

Intangible assets with indefinite useful lives are tested for impairment annually as at the end of each reporting period, either individually or at the cash-generating unit level, as appropriate and when circumstances indicate that the carrying value may be impaired.

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3.8 Impairment of Assets (cont’d)

3.8.2 Financial Assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial fulfillment on and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant.

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

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in the profit or loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to finance costs in the profit or loss.

Available-for-sale financial assets

For available-for-sale financial assets, the Group assesses at each reporting period whether there is objective evidence that an investment or a group of investment is impaired.

In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. “Significant” is evaluated against the original cost of the investment and “prolonged” against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the profit or loss – is removed from other comprehensive income and recognised in the profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increases in their fair value after impairments are recognised directly in other comprehensive income.

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3.8 Impairment of Assets (cont’d)

3.8.2 Financial Assets (cont’d)

Available-for-sale financial assets (cont’d)

In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss.

Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the profit or loss, the impairment loss is reversed through profit or loss.

3.9 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less the estimated costs necessary to make the sale.

Where necessary, due allowance is made for all damaged, obsolete and slow-moving items. The Group writes down its obsolete or slow moving inventories based on assessment of the condition and the future demand for the inventories. These inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recovered.

3.10 Cash and Cash Equivalents

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

3.11 Borrowing Costs

All other borrowing costs are expensed in the period in which 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.

3.12 Leases

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

3.12.1 Finance Lease

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

Minimum lease payments made under finance leases are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

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3.12 Leases (cont’d)

3.12.1 Finance Lease (cont’d)

Finance charges are recognised in finance costs in the profit or loss. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

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

Leasehold land which in substance is a finance lease is classified as a property, plant and equipment.

3.12.2 Operating Lease

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operating leases. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classified as investment property.

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

3.13 Revenue Recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the Group’s activities. Revenue is recognised net of returns, discounts, where applicable.

(a) Sale of Goods

Revenue is recognised when the significant risk and rewards of ownership have been transferal to the customer and there is no continue management involvement with the goods, and the amount of revenue can be measured reliably.

(b) Services

Revenue from the services recognised when the services have been rendered and accepted by customer or on a periodic basis over the term of the maintenance contract whichever applicable.

(c) Interest Income

Interest income is recognised on an accrual basis, based on the effective yield on the investment.

(d) Management fee

Management fee is recognised when services are rendered.

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3.14 Employee Benefits

3.14.1 Short-Term Employee Benefits

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

3.14.2 Defined Contribution Plan

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

Such contributions are recognised as an expense in the profit or loss as incurred. As required by law,

companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).

The Group’s foreign subsidiary also makes contributions in accordance to their country’s statutory pension scheme.

3.15 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified to make strategic decisions. Additional disclosure on each of these segments is shown in Note 32 to the financial statements.

Segment revenues, expenses and result include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties outside of the Group in an arm’s length transaction. These transfers are eliminated on consolidation.

3.16 Equity and Reserves

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

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

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

Accumulated losses include all current and prior year accumulated losses.

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

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3.17 Related Parties

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

(a) A person or a close member of that person’s family is related to the Group if that person:-(i) has control or joint control over the Group;(ii) has significant influence over the Group; or(iii) is a member of the key management personnel of the ultimate holding company of the Group, or the

Group.

(b) An entity is related to the Group if any of the following conditions applies:-(i) the entity and the Group are members of the same group.(ii) one entity is an associate or joint venture of the other entity.(iii) both entities are joint ventures of the same third party.(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.(v) the entity is a post-employment benefit plan for the benefits of employees of either the Group or an entity

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

management personnel of the ultimate holding company or the Group.(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to

the Group or to the parent of the Group.

3.18 Contingencies

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

3.19 Earnings per Ordinary Share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employee, if any.

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31 MARCH 2016



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hel

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)-

--

--

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02,6

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Tran

slat

ion

diffe

renc

es-

-4,

486

2,16

72,

885

(30,

103)

(4,6

22)

(3,6

14)

(28,

801)

At 3

1 M

arch

201

5-

-11

8,78

719

3,45

01,

078,

648

620,

552

4,28

7,19

393

3,59

27,

232,

222

Cha

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the

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r-

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,057

39,3

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1,17

1,35

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1,84

9,98

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--

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(581

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atio

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--

8,74

11,

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(8,9

80)

16,7

963,

886

3,57

425

,732

At 3

1 M

arch

201

6-

-19

1,58

518

8,32

670

4,12

91,

027,

746

5,46

2,43

579

8,00

28,

372,

223

Net

car

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g a

mo

unt

A

t 31

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ch 2

016

--

3,00

1,49

657

,344

14,2

273,

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3,97

8,56

161

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10,9

49,2

43

At 3

1 M

arch

201

5-

-2,

850,

884

242,

465

16,7

3418

6,90

72,

093,

756

46,5

395,

437,

285

31 MARCH 2016



ANNUAL REPORT 2016

65

4. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

At Valuation At Cost

CompanyFreehold

landFreehold buildings Renovations Computers

Motor vehicles

Office equipment,

furniture and fittings Total

RM RM RM RM RM RM RM

At Valuation/CostAt 1 April 2014 5,600,000 3,903,442 121,043 629,477 335,350 661,287 11,250,599Transferred to assets held-for-sale (5,600,000) (3,903,442) - - - - (9,503,442)

At 31 March 2015 - - 121,043 629,477 335,350 661,287 1,747,157Additions - - - 538 - - 538At 31 March 2016 - - 121,043 630,015 335,350 661,287 1,747,695

Accumulated depreciation

At 1 April 2014 - 444,057 121,043 628,930 335,350 659,422 2,188,802Charge for the financial year - 58,551 - 529 - 1,167 60,247Transferred to assets held-for-sale - (502,608) - - - - (502,608)

At 31 March 2015 - - 121,043 629,459 335,350 660,589 1,746,441Charge for the financial year - - - 63 - 698 761At 31 March 2016 - - 121,043 629,522 335,350 661,287 1,747,202

Net carrying amountAt 31 March 2016 - - - 493 - - 493

At 31 March 2015 - - - 18 - 698 716

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66

4. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

At the end of the reporting period, the plant and equipment acquired under finance lease arrangement are as follows:-

Group 2016 2015

RM RMAt net carrying value:Motor vehicle 2,355,463 70,908Office equipment 11,858 17,994Plant and machinery 1,788,201 -

4,155,522 88,902

The property was revalued based on a valuation carried out by an independent firm of professional valuers using the comparison method during the financial year ended 31 March 2013.

The surpluses arising from the above revaluation net of deferred tax liabilities have been credited to the other comprehensive income and accumulated in equity under the revaluation reserve.

Included in the property, plant and equipment of the Group are motor vehicles and plant and machinery with net carrying amount of RM92,000 and RM601,833 respectively held in trust by a third party.

Had the revalued properties been carried at cost less accumulated depreciation, the net book values of the properties that would have been included in the financial statements are as follows:-

Group2016 2015

RM RMAt net carrying value:Leasehold properties 2,319,119 2,254,841

As at the end of the reporting period, the leasehold properties of the Group with carrying value of RM3,001,496 (2015: RM2,850,884) have been pledged to licensed banks as security for banking facilities granted to the Group.

The fair value of the leasehold properties are carried at fair value level 3. The level 3 fair values have been determined based on the sales comparison approach that reflects recent transaction prices for similar properties to reflect market value of existing use.

The net carrying amount of motor vehicle and plant and machinery which are acquired under financial lease agreement is RM2,322,885 (2015: RMNIL) and RM1,788,201 (2015: RMNIL) respectively.

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5. INVESTMENTS IN SUBSIDIARIES

Company 2016 2015

RM RMUnquoted shares, at cost- in Malaysia 6,750,004 6,600,002- outside Malaysia 1,453,134 1,453,134

8,203,138 8,053,136Accumulated impairment losses (150,000) (150,000)

8,053,138 7,903,136

Quasi loanAt 1 April - 210,000

Impairment loss for the financial year - (210,000)

At 31 March - -8,053,138 7,903,136

The details of the subsidiaries are as follows:-

Name of companiesCountry of

incorporationEffective equity

interest Principal activities2016 2015

Direct Subsidiaries % %

Asdion Digital Advance System Sdn. Bhd. (“ADAS”)^

Malaysia 100 90 Investment holding

Asdion Project Synergy Sdn. Bhd. @ Malaysia 100 100 Logistics business

Asdion Logistics Sdn. Bhd. (formerly known as 108 Talent Sdn. Bhd.)

Malaysia 100 100 Dormant

Techtron Integrated Systems (S) Pte Ltd (“TIS”)*

The Republicof Singapore

100 100 Software development, information communication technology and related services

TAZ Logistics Sdn. Bhd. (“TAZ”) Malaysia 51 51 Dry bulk cargo stevedoring related services

Venice Sanctuary Sdn. Bhd. Malaysia 100 100 Trading of bauxite and the installation of wireless hardware and connections

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68

5. INVESTMENTS IN SUBSIDIARIES (CONT’D)

The details of the subsidiaries are as follows (cont’d):-




Subsidiaries of TIS % %

Asdion Data Services Sdn. Bhd. Malaysia 100 100 Advisers on solutions relating to information technology

Asdion Hospitality Solutions Sdn. Bhd. Malaysia 100 100 Advisers on solutions relating to information technology

Asdion Software Pte Ltd (“ASPL”)*# The Republic of Singapore

- 97 Investment holding

Subsidiaries of ASPL

Asdion Software (Shanghai) Co Ltd*# The People’s Republic of China

- 97 Dormant

Asdion Exim (Shanghai) Co Ltd*# The People’s Republic of China

- 97 General traders including imports and exports

* Subsidiaries not audited by SJ Grant Thornton

# During the financial year, TIS, the holding company of ASPL, has applied to strike off the name of ASPL from the Accounting and Corporate Regulatory Authority of Singapore. The strike off was completed during the financial year and it does not have a material financial impact on the Group.

^ On 1 January 2016, the Company acquired additional 10% equity in ADAS, increasing its ownership from 90% to 100%. The shareholders’ approval of the additional acquisition has been obtained on the same date. The purchase consideration for the acquisition is RM2.

@ The share capital of the subsidiary has increased by 150,000 ordinary shares of RM1 each.

(a) Quasi loan represents advances and payments made on behalf of which the settlement is neither planned nor likely to occur in the foreseeable future. This amount is, in substance, a part of the Company’s net investment in the subsidiaries. The quasi loan is stated at cost less accumulated impairment losses, if any.

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Non-controlling interest in subsidiaries

The Group’s subsidiaries that have material non-controlling interest (“NCI”) are as follows:-

2016 TAZRM

Effective interest equity (%) 49%Carrying amount of NCI (51,407)Loss allocated to NCI (891,208)

2015 TAZ ADAS Others TotalRM RM RM RM

Effective interest equity (%) 49% 10%Carrying amount of NCI 839,801 219,104 (79,885) 979,020Profit/(Loss) allocated to NCI 308,825 (662) (97,224) 210,939

TAZ TotalRM RM

2016At 31 March Non-current assets 1,136,828 1,136,828Current assets 327,482 327,482Non-current liabilities (118,842) (118,842)Current liabilities (1,450,379) (1,450,379)Net liabilities (104,911) (104,911)

Financial year ended 31 MarchRevenue 9,416,957 9,416,957

Loss for the financial year (1,818,791) (1,818,791)Other comprehensive income - -Total comprehensive loss (1,818,791) (1,818,791)

Net cash flows from operating activities 49,204 49,204Net cash flows for investing activities (356,675) (356,675)Net cash flows from financing activities 313,107 313,107

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70


Non-controlling interest in subsidiaries (cont’d)

The Group’s subsidiaries that have material non-controlling interest (“NCI”) are as follows (cont’d):-

TAZ ADAS TotalRM RM RM

2015At 31 March Non-current assets 914,538 104,644 1,019,182Current assets 1,349,273 2,096,012 3,445,285Non-current liabilities (481,931) (9,606) (491,537)Current liabilities (68,000) - (68,000)Net assets 1,713,880 2,191,050 3,904,930

Financial year ended 31 MarchRevenue 1,905,171 - 1,905,171

Profit/(Loss) for the financial year 713,880 (6,617) 707,263Other comprehensive income - 73,119 73,119Total comprehensive income 713,880 66,502 780,382

Net cash flows from operating activities 148,349 38,035 186,384Net cash flows for investing activities (946,074) (31,123) (977,197)Net cash flows from financing activities 900,000 - 900,000

6. INVESTMENT IN ASSOCIATES

Group Company2016 2015 2016 2015

RM RM RM RM

Unquoted shares in Malaysia, at cost 360,000 36 360,000 36Share of post-acquisition losses (360,000) - - -

- 36 360,000 36Less: Impairment loss - (36) - -

- - 360,000 36

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6. INVESTMENT IN ASSOCIATES (CONT’D)

The details of the associate is as follows:-




% %

Sun Rock Development Sdn. Bhd. (“SRD”)*

Malaysia 36 36 Property development

* Not audited by SJ Grant Thornton

During the financial year, the Company acquired additional 359,964 ordinary shares of RM1 each of SRD to capitalise the debt owing by SRD. The equity interest remained as 36% following the acquisition of ordinary shares.

The summarised unaudited financial information of SRD to the Group is as follow:-

SRD2016 2015

RM RM

At 31 MarchNon-current assets 29,654,424 29,654,424Current assets 491,634 211,417Current liabilities (32,047,335) (30,468,454)Net liabilities (1,901,277) (602,613)

For the financial year ended 31 MarchLoss for the financial year/Total comprehensive expenses for the financial year (391,453) (1,204,278)Group’s share of loss for the financial year/other comprehensive expenses for the

financial year (360,000) -

7. DEVELOPMENT COSTS

Group/Company2016 2015

RM RM

At cost:-At 1 April 3,542,746 3,542,746Accumulated amortisation (2,284,038) (2,275,965)Accumulated impairment losses (1,258,708) (1,258,708)At 31 March - 8,073

Accumulated amortisationAt 1 April (2,275,965) (2,265,201)Amortisation for the financial year (8,073) (10,764)At 31 March (2,284,038) (2,275,965)

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72

8. OTHER INVESTMENT

Group2016 2015

RM RM

Quoted shares outside Malaysia, at fair valueAt 1 April 104,644 31,525Fair value adjustment (73,119) 73,119Impairment loss during the financial year (31,525) -At 31 March - 104,644

Investments in quoted shares of the Group are designated as available-for-sale financial assets and are measured at fair value.

During the financial year, the Group recognised the impairment loss of RM31,525 (2015: RMNIL) for quoted equity instruments classified as available-for-sale financial assets as there were significant decline in the fair value of the investments below their cost.

9. INTEREST IN A JOINT VENTURE

Group/Company2016/2015

RM

At cost: Investment in a joint venture project 6,000,000

The Company has entered a 80:20 joint venture project with a Malaysian incorporated entity, Top Valley Properties Sdn. Bhd.. The joint venture project involves a 3-year mix property development project which located at PM8688, Lot 104160 (formerly known as H.S (M) 15921 PT32378), Mukim Dengkil, Kg. Limau Manis, Daerah Sepang, Negeri Selangor.

On 8 March 2016, the Company has received letter from Top Valley Properties Sdn. Bhd. informing the rejection of Development Order (“DO”) in relation to the Selangor Project. Nevertheless, the Company is in the on-going process of re-negotiating terms and timelines for new DO submission. The Company has been given the timeline up to 21 October 2016 to source for an alternative suitable land, failing which, the investment cost will be refunded by Top Valley Properties Sdn. Bhd.

10. GOODWILL

Group2016 2015

RM RM

At 1 April 5,480,351 33,000Addition - 5,447,351At 31 March 5,480,351 5,480,351

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10. GOODWILL (CONT’D)

The recoverable amount of the cash generating unit (“CGU”) is determined based on value in use calculation using cash flow projections based on financial budgets approved by the management covering a five-year period. The key assumptions used for value in use calculation are average of 15% for gross profit margin, 4% for growth rate and 11.44% for discount rate. With regards to the assessments of value-in-use of these CGU, management believes that no reasonably possible changes in any of the key assumptions would cause the carrying values of these units to differ materially from their recoverable amounts except for the changes in prevailing operating environment which is not ascertainable.

The goodwill on consolidation mainly relates to the Logistic segment. The Group reviews goodwill for impairment annually in accordance with its accounting policy.

11. INVENTORIES

Group2016 2015

RM RM

At cost:-Raw materials 123,314 231,737Finished goods 1,553 8,782

124,867 240,519

Recognised in profit or lossInventories recognised as cost of sales 2,276,849 564,645

None of the inventories is carried at net realisable value.

12. TRADE RECEIVABLES

Group2016 2015

RM RM

Trade receivables 2,507,662 1,450,884Impairment losses (551,895) (4,700)At 31 March 1,955,767 1,446,184

Impairment lossesAt 1 April (4,700) (19,909)Addition during the financial year (549,886) (10,747)Written off during the financial year 2,000 21,192Translation differences 691 4,764At 31 March (551,895) (4,700)

The Group’s normal trade credit terms range from 30 to 90 (2015: 30 to 60) days.

The impairment loss on trade receivable was due to the financial difficulty faced by the debtors.

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74

13. OTHER RECEIVABLES

Group Company2016 2015 2016 2015

RM RM RM RM

Other receivables 5,902,634 5,197,135 4,634,085 4,973,909Deposits 342,131 218,976 285,760 32,716Prepayments 57,357 262,151 44,574 44,574

6,302,122 5,678,262 4,964,419 5,051,199

Included in other receivables of the Group and the Company is an amount owing by an associate amounting to RM4,508,480 (2015: RM4,868,444) and RM4,508,480 (2015: RM4,868,444) respectively. The amount due from associate is non-trade in nature, unsecured, interest-free and repayable on demand.

14. AMOUNT DUE FROM SUBSIDIARIES

Company2016 2015

RM RM

Amount owing by:-Non-trade balances 4,109,351 1,323,366Impairment losses (1,095,843) (1,095,843)At 31 March 3,013,508 227,523

The amount due from subsidiaries are non-trade in nature, unsecured, interest-free and repayable on demand.

15. ASSETS CLASSIFIED AS HELD-FOR-SALE

Group/ Company2016 2015

RM RM

Assets classified as held-for-sale Property, plant and equipment - 9,000,834Liabilities classified as held-for-sale Deferred tax liabilities - (194,003)At 31 March - 8,806,831

On 1 December 2014, an agreement is made with the contracted party to dispose the freehold land and building. The non-

current assets held for sale with a carrying amount of RM9,000,834 were disposed at RM9,200,000, at a price higher than its net carrying amount.

The assets are pledged as securities for bank borrowings.

The disposal was completed on 19 May 2015.

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16. SHARE CAPITAL

Company2016 2015 2016 2015

Number of ordinary shares of RM0.10 each RM RM

Authorised:-At 1 April/31 March 500,000,000 500,000,000 50,000,000 50,000,000

Issued and fully paid-up:-At 1 April 112,734,600 112,734,600 11,273,460 11,273,460Issued during the financial year -- warrant exercise 3,535,300 - 353,530 -At 31 March 116,269,900 112,734,600 11,626,990 11,273,460

During the financial year, the Company increased its issued and paid-up share capital from RM11,273,460 to RM11,626,990 by issuance of 3,535,300 new ordinary shares of RM0.10 each at an issue price of RM0.50 per share by conversion of free warrants.

The new shares were issued for cash consideration. The new shares issued rank pari passu in all respects with the existing shares of the Company.

17. RESERVES

Group Company2016 2015 2016 2015

RM RM RM RM

Share premium (a) 19,672,584 18,258,464 19,672,584 18,258,464Warrant reserve (b) 4,567,977 4,567,977 4,567,977 4,567,977Foreign exchange translation

reserve (c) 132,289 71,254 - -Capital reserve (d) - 15,429 - -Fair value adjustment reserve (e) (7,312) 65,807 - -Revaluation reserve (f) 475,509 4,460,295 - 4,044,780Accumulated losses (16,221,288) (15,179,597) (14,316,005) (15,239,243)

8,619,759 12,259,629 9,924,556 11,631,978

(a) Share Premium

The share premium is not distributable by way of dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act 1965.

The movements in the share premium of the Group and of the Company are as follows:-

2016 2015RM RM

At 1 April 18,258,464 18,258,464Increase on issuance of share capital 1,414,120 -At 31 March 19,672,584 18,258,464

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76

17. RESERVES (CONT’D)

(b) Warrant reserve

The movements in the warrant reserve of the Group and of the Company are as follows:-

2016 2015RM RM

Capitalisation of subscription from private placement 4,567,977 4,567,977

The warrant reserve arose from the allocation of proceeds received for private placement by reference to the fair value of the warrants, amounting to RM0.1065 per warrant and net of share issuance costs incurred in relation to the private placement exercise.

(c) Foreign exchange translation reserve

Group2016 2015

RM RM

At 1 April 71,254 126,723Foreign exchange translation during the financial year 61,035 (55,469)At 31 March 132,289 71,254

The foreign exchange translation reserve arose from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Company’s presentation currency and is not distributable by way of dividends.

(d) Capital reserve

The capital reserve arose from the Group’s proportionate share of capital reserve of the associate and is not distributable by way of dividends.

(e) Fair value adjustment reserve

The fair value adjustment reserve represents surplus arising from the revaluation of quoted share investment as disclosed in Note 8 to the financial statements. This reserve is not distributable as cash dividends.

(f) Revaluation reserve

The revaluation reserve represents surpluses arising from the revaluation of properties as disclosed in Note 4 to the financial statements. This reserve is not distributable as cash dividends.

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77

18. DEFERRED TAX LIABILITIES

Group Company2016 2015 2016 2015

RM RM RM RM

Deferred tax liabilitiesAt 1 April (141,964) (265,035) - (194,003)Recognition in profit or loss (Note 27) (143,000) (68,000) - -Underprovision in prior year (19,000) - - -Disposal of assets held-for-sale 73,964 - - -Reclassified as held-for-sale - 194,003 - 194,003Translation differences - (2,932) - -

(230,000) (141,964) - -

The components of the deferred tax liabilities are as follows:-

Group Company2016 2015 2016 2015

RM RM RM RM

Accelerated capital allowances on qualifying cost of property, plant and equipment (230,000) (68,000) - -

Revaluation surplus - (73,964) - -(230,000) (141,964) - -

At the end of the reporting period, no deferred tax assets are recognised by the Group and the Company in respect of the following items as it is not probable that future taxable profits of the Group and the Company will be available for utilisation against the deductible temporary differences.

Group Company2016 2015 2016 2015

RM RM RM RM

Unabsorbed capital allowance and unutilised tax losses 11,097,806 10,157,376 5,296,840 9,018,341

Accelerated depreciation over capital allowances on qualifying cost of assets (441,000) (2,733,937) - (2,675,937)

10,656,806 7,423,389 5,296,840 6,342,404

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78

19. FINANCE LEASE LIABILITIES

Group2016 2015

RM RM

Minimum finance lease liabilities payments:- not later than one year 2,038,323 49,518- later than one year and not later than two years 681,488 45,107- later than one year and not later than five years 108,426 -

2,828,237 94,625Less: Future finance charges (187,529) (3,982)Present value of finance lease liabilities 2,640,708 90,643

The finance lease liabilities are repayable as follows:-

Group2016 2015

RM RM

Current:- not later than one year 1,883,827 46,708

Non-current:- later than one year and not later than two years 660,335 43,935- later than one year and not later than five years 96,546 -

756,881 43,9352,640,708 90,643

The finance lease liabilities bear interest rates ranging from 2.5% - 5% (2015 : 2.76% to 8%).

20. BORROWINGS

Group Company2016 2015 2016 2015

RM RM RM RM

CurrentSecuredTerm loan (1) - 989,951 - 989,951Term loan (2) 50 269,246 50 269,246Term loan (3) - 11,031 - -Term loan (4) - 5,308 - -Term loan (5) 142,356 77,371 - -Bills payable 231,301 194,046 - -

373,707 1,546,953 50 1,259,197

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ANNUAL REPORT 2016

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20. BORROWINGS (CONT’D)

Group Company2016 2015 2016 2015

RM RM RM RM

Non-currentSecuredTerm loan (3) - 127,217 - -Term loan (4) - 840 - -Term loan (5) 1,441,365 1,445,544 - -

1,441,365 1,573,601 - -

The term loan of the Group and of the Company are secured by:-

(a) Term loan 1 and 2

(i) legal charges over the Group and the Company’s freehold and leasehold land and building; and(ii) corporate guarantees issued by certain present and former subsidiaries of the Company.

(b) Term loan 3 and 4

(i) personal guarantee from the director of the Company; and(ii) legal charges over the leasehold property of the Group.

(c) Term loan 5

(i) personal guarantee from the director of the Company; and(ii) legal charges over the leasehold property of the Group.

The bills payable are secured by a personal guarantee by a director of a subsidiary.

The bank borrowings bears interest at rate of 2.5% to 6.25% (2015: 2.28% to 9.35%) per annum respectively.

21. TRADE PAYABLES

The normal trade credit terms granted to the Group ranges from 30 to 90 (2015: 30 to 90) days.

22. OTHER PAYABLES

Group Company2016 2015 2016 2015

RM RM RM RM

Other payables 4,165,989 3,228,969 2,648,689 2,311,772Accruals 360,430 421,190 16,992 93,432Deposits 510,141 - - -

5,036,560 3,650,159 2,665,681 2,405,204

23. AMOUNT DUE TO DIRECTORS

The amount due to directors is non-trade nature, unsecured, interest free and repayable on demand.

24. AMOUNT DUE TO SUBSIDIARIES

The amount due to subsidiaries is non-trade nature, unsecured, interest free and repayable on demand.

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80

25. REVENUE

Group2016 2015

RM RM

Trading of goods 6,295,677 1,156,232Services rendered 13,548,348 3,167,343

19,844,025 4,323,575

26. (LOSS)/PROFIT BEFORE TAXATION

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

Group Company2016 2015 2016 2015

RM RM RM RM

Amortisation of development costs 8,073 10,764 8,073 10,764Audit fee:-- auditors

- current year 109,800 102,200 70,000 70,000- other auditors 37,852 62,767 - -Other fees charged by auditors 5,800 5,800 5,800 5,800Written off of bad debts 2,000 21,192 - -Bad debt recovered - (23,571) - -Director fees 901,772 292,491 893,774 172,811Directors’ non-fee emoluments:-- salaries, allowances and bonuses 966,857 278,975 125,726 -- defined contribution plan 91,624 35,233 18,247 -Depreciation of property, plant and

equipment 1,849,983 857,209 761 60,247Impairment loss on:-- trade receivables 549,886 10,747 - -- other investment 31,525 - - -- intangible assets - 393,247 - -Interest expense:- -- bank overdrafts - 10,273 - -- finance lease 149,417 2,908 - -- bills payable - 9,055 - -- term loans 87,788 204,899 79,082 130,599- others 36,929 336,848 - 326,400Rental expenses 914,147 299,547 - -Gain on disposal of:-- asset held-for-sale (4,437,899) - (4,437,899) -- property, plant and equipment (19,768) (12,670) - -- subsidiaries (71,200) (487,838) - (24,000)Realised loss/(gain) on foreign exchange 138,326 (4,136) - -Written off of deposit 9,220 - 7,500 -Written off of property, plant and equipment 168,276 - - -Interest income (110,384) (141,131) (106,845) (139,784)Rental income - (18,700) - -

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81

27. TAX EXPENSE

Group2016 2015

RM RMCurrent tax:-Current financial year- Malaysia 8,630 156,400(Over)/Underprovision in prior year- Malaysia (6,608) 4

2,022 156,404Deferred tax (Note 18):-Current financial year 143,000 68,000Underprovision in prior year 19,000 -

162,000 68,000164,022 224,404

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

Group Company2016 2015 2016 2015

RM RM RM RM

(Loss)/Profit before taxation (2,469,289) (2,374,666) 923,238 (1,849,474)

Tax at the statutory tax rate 24% (2015: 25%) (592,629) (593,667) 221,577 (462,369)

Tax effects of:-Non-allowable expense 1,008,576 717,400 618,898 366,369Income not subject to tax (1,094,835) (194,281) (1,091,475) (6,000)Change in tax rate for the first tranche of

chargeable income - (25,000) - -Deferred tax assets not recognised during

the financial year 776,020 269,431 251,000 102,000(Over)/Underprovision in previous year:-- current tax (6,608) 4 - -- deferred tax 19,000 - - -Effects of tax rates in different jurisdiction 54,498 50,517 - -

Tax expense for the financial year 164,022 224,404 - -

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82

28. LOSS PER SHARE

Group2016 2015

RM RM

Loss after taxation attributable to owners of the Company (RM) (1,742,103) (2,810,009)

Weighted average number of ordinary shares 115,271,665 112,734,600

Basic loss per share (sen) (1.51) (2.49)

There is no dilution in the loss per share as the average market value of the Company’s ordinary shares during both financial years were lower than the exercise price of the outstanding Warrants 2014/2019 and 2008/2014 respectively. Accordingly, there would be no conversion of these outstanding instruments for the purpose of calculating diluted loss per share.

29. EMPLOYEE BENEFITS EXPENSE

Group Company2016 2015 2016 2015

RM RM RM RM

Salaries, wages and other emoluments 2,772,104 1,399,995 5,640 6,400Defined contribution plans 233,225 120,355 - -Other benefits 74,050 194 - -

3,079,379 1,520,544 5,640 6,400

30. DIRECTORS’ REMUNERATION

The aggregate amounts of remuneration payable to the directors of the Group and the Company during the financial year are as follows:-

Group Company2016 2015 2016 2015

RM RM RM RM

Executive directors:-- salaries, allowances and bonuses 966,857 278,975 125,726 -- defined contribution plan 91,624 35,233 18,247 -

1,058,481 314,208 143,973 -

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31. RELATED PARTY DISCLOSURES

(a) Identities of related parties

The Group has related party relationships with its directors, key management personnel and entities within the same group of companies.

(b) In addition to the information detailed elsewhere in the financial statements, the Group and the Company carried out the following transactions with the related parties during the financial year:-

Group Company2016 2015 2016 2015

RM RM RM RM

Key management personnel compensation:-

- salaries, allowances and bonuses 966,857 278,975 125,726 -- defined contribution plan 91,624 35,233 18,247 -- director fees 901,772 292,491 893,774 172,811

(c) Significant related party transaction during the financial year is as follow:-

Company2016 2015

RM RM

Management fee charge to subsidiary 500,000 -

32. OPERATING SEGMENTS

Operating segments are prepared in a manner consistent with the internal reporting provided to the Board of Directors in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on its geographical locations, notably Malaysia, Singapore and China. The Group operates within the information, communication and technology, logistics, commodity trading and related activities.

The Board of Directors assesses the performance of the operating segments based on operating profit or loss which is measured differently from those disclosed in the consolidated financial statements.

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments are presented under unallocated items, if any.

Malaysia Singapore China Group2016 RM RM RM RM

RevenueExternal revenue 18,425,852 1,418,173 - 19,844,025Inter-segment revenue 1,834,252 1,948,034 - 3,782,286

20,260,104 3,366,207 - 23,626,311

Adjustments and eliminations (3,782,286)

Consolidated revenue 19,844,025

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32. OPERATING SEGMENTS (CONT’D)

Malaysia Singapore China Group2016 (cont’d) RM RM RM RM

ResultsSegment results (4,617,455) 735,522 - (3,881,933)

Interest income 109,915 469 - 110,384Finance costs (392,477) (88,061) - (480,538)Depreciation of property, plant and equipment (1,177,517) (672,466) - (1,849,983)Amortisation of development costs (8,073) - (8,073)Other material income 4,437,899 90,968 - 4,528,867Other non-cash and material items of expenses (645,111) (242,902) - (888,013)

(2,292,819) (176,470) - (2,469,289)Tax expense (164,022)Consolidated loss after taxation (2,633,311)

2015

RevenueExternal revenue 3,468,807 787,816 66,952 4,323,575Inter-segment revenue 130,856 417,653 - 548,509

3,599,663 1,205,469 66,952 4,872,084Adjustments and eliminations (548,509)Consolidated revenue 4,323,575

ResultsSegment results (900,423) (291,155) (35,184) (1,226,762)

Interest income 141,131 - - 141,131Finance costs (512,736) (51,247) - (563,983)Depreciation of property, plant and equipment (728,128) (127,493) (1,588) (857,209)Amortisation of development costs (10,764) - - (10,764)Other material income 509,717 37,198 - 546,915Other non-cash and material items of expenses (403,994) - - (403,994)

(1,905,197) (432,697) (36,772) (2,374,666)Tax expense (224,404)Consolidated loss after taxation (2,599,070)

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Malaysia Singapore China Group2016 RM RM RM RM

AssetsSegment assets 30,591,515 4,857,550 - 35,449,075Tax refundable 6,692Consolidated total assets 35,455,767

LiabilitiesSegment liabilities 9,902,251 5,119,544 - 15,021,795Deferred tax liabilities 230,000Tax payable 8,630Consolidated total liabilities 15,260,425

Other segment itemsAdditional to non-current assets other than

financial instruments:-- property, plant and equipment 7,302,701 - - 7,302,701

2015

AssetsSegment assets 31,652,968 3,605,538 5,445 35,263,951Tax refundable 6,692Consolidated total assets 35,270,643

LiabilitiesSegment liabilities 5,314,914 4,894,254 49,399 10,258,567Deferred tax liabilities 335,967Tax payable 164,000Consolidated total liabilities 10,758,534

Other segment itemsAdditional to non-current assets other than

financial instruments:- property, plant and equipment 159,151 - - 159,151

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(a) Other material items of income consists of the following:-

Group2016 2015

RM RM

Bad debts recovered - 23,571Rental income - 18,700Gain on disposal of property, plant and equipment 19,768 12,670Gain on disposal of subsidiaries 71,200 487,838Realised gain on foreign exchange - 4,136Gain on disposal of asset held-for-sale 4,437,899 -

4,528,867 546,915

(b) Other material non-cash items of expenses consists of the following:-

Group2016 2015

RM RM

Impairment loss on intangible asset - 393,247Impairment loss on trade receivables 549,886 10,747Impairment loss on other investment 31,525 -Written off of property, plant and equipment 168,276 -Realised loss on foreign exchange 138,326 -

888,013 403,994

(c) Business segments

Revenue and non-current assets information based on the business segments of the Company and its subsidiaries are as follows:-

Revenue Non-current assets2016 2015 2016 2015

RM RM RM RM

Information, communication and technology

3,977,208 2,497,634 15,486,759 16,006,462

Logistics 10,920,487 1,615,607 6,942,835 919,247Media - 210,334 - 104,644Commodity trading 4,946,330 - - -

19,844,025 4,323,575 22,429,594 17,030,353

Major customers

Revenue from a major customer with revenue more than 10% of Group revenue, amounting to RM1,803,239 (2015: RM568,800) arose from logistics segment (2015: Logistics segment).

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33. FINANCIAL INSTRUMENTS

33.1 Categories of Financial Instruments

The table below provides an analysis of financial instruments categorised as loans and receivables (“L&R”), available-for-sale financial assets (“AFS”) and financial liabilities categorised as other liabilities measured at amortised cost (“AC”):-

Carrying amount L&R AFS AC

RM RM RM RMGroup

2016Financial assets Trade receivables 1,955,767 1,955,767 - - Other receivables 6,244,765 6,244,765 - - Cash and bank balances 4,636,725 4,636,725 - -

12,837,257 12,837,257 - -

Financial liabilities Trade payables 2,138,897 - - 2,138,897 Other payables 5,036,560 - - 5,036,560 Amount due to directors 3,390,558 - - 3,390,558 Finance lease liabilities 2,640,708 - - 2,640,708 Bank borrowings 1,815,072 - - 1,815,072

15,021,795 - - 15,021,795

2015Financial assets Trade receivables 1,446,184 1,446,184 - - Other receivables 5,416,111 5,416,111 - - Cash and bank balances 1,867,779 1,867,779 - - Other investment 104,644 - 104,644 -

8,834,718 8,730,074 104,644 -

Financial liabilities Trade payables 106,422 - - 106,422 Other payables 3,650,159 - - 3,650,159 Amount due to directors 3,290,789 - - 3,290,789 Finance lease liabilities 90,643 - - 90,643 Bank borrowings 3,120,554 - - 3,120,554

10,258,567 - - 10,258,567

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33. FINANCIAL INSTRUMENTS (CONT’D)

33.1 Categories of FINANCIAL INSTRUMENTS (CONT’D)

The table below provides an analysis of financial instruments categorised as loans and receivables (“L&R”), available-for-sale financial assets (“AFS”) and financial liabilities categorised as other liabilities measured at amortised cost (“AC”) (cont’d) :-

Carryingamount L&R AFS AC

RM RM RM RMCompany

2016Financial assets Other receivables 4,919,845 4,919,845 - - Amount due from subsidiaries 3,013,508 3,013,508 - - Cash and bank balances 4,021,226 4,021,226 - -

11,954,579 11,954,579 - -

Financial liabilities Other payables 2,665,681 - - 2,665,681 Amount due to subsidiaries 2,200,201 - - 2,200,201 Borrowings 50 - - 50

4,865,932 - - 4,865,932

2015Financial assets Other receivables 5,006,625 5,006,625 - - Amount due from subsidiaries 227,523 227,523 - - Cash and bank balances 1,484,845 1,484,845 - -

6,718,993 6,718,993 - -

Financial liabilities Other payables 2,405,204 - - 2,405,204 Amount due to subsidiaries 2,810,322 - - 2,810,322 Amount due to directors 106,892 - - 106,892 Borrowings 1,259,197 - - 1,259,197

6,581,615 - - 6,581,615

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33.2 Financial Risk Management Objectives and Policies

Financial Risk

The Group and the Company are exposed to financial risks arising from its operations and the use of financial instruments. Financial risk management policy is established to ensure that adequate resources are available for the development of the Group’s and the Company’s business whilst managing its credit risk, liquidity risk, foreign currency risk and interest rate risk. The Group and the Company operate within clearly defined policies and procedures that are approved by the Board of Directors to ensure the effectiveness of the risk management process.

The main areas of financial risks faced by the Group, the Company and the policy in respect of the major areas of treasury activity are set out as follows:-

(a) Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. It is the Group’s policy to enter into financial instrument with a diversity of creditworthy counterparties. The Group does not expect to incur material credit losses of its financial assets or other financial instruments.

Concentration of credit risk exists when changes in economic, industry and geographical factors similarly affect the group of counterparties whose aggregate credit exposure is significant in relation to the Group’s total credit exposure. The Group’s portfolio of financial instrument is broadly diversified along industry, product and geographical lines, and transactions are entered into with diverse creditworthy counterparties, thereby mitigate any significant concentration of credit risk.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. The Group does not offer credit terms without the approval of the head of credit control.

Following are the areas where the Group and the Company are exposed to credit risk:-

(i) Receivables

At the end of the reporting period, the maximum exposure to credit risk arising from receivables is limited to the carrying amounts in the statement of financial position.

With a credit policy in place to ensure the credit risk is monitored on an ongoing basis, management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than credit terms granted are deemed to have higher credit risk and are monitored individually.

The ageing analysis of the trade receivables is as follows:-

Individually

Gross impaired NetGroup RM RM RM

2016Not past due 321,418 - 321,418Past due 1-30 days 977,715 - 977,715Past due 31-60 days 413,950 - 413,950More than 60 days 794,579 (551,895) 242,684

2,507,662 (551,895) 1,955,767

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33.2 Financial Risk Management Objectives and Policies (cont’d)

Financial Risk (cont’d)

The main areas of financial risks faced by the Group, the Company and the policy in respect of the major areas of treasury activity are set out as follows (cont’d):-

(a) Credit risk (cont’d)

(i) Receivables (cont’d)

The ageing analysis of the trade receivables is as follows (cont’d):-

Individually Gross impaired Net

Group RM RM RM

2015Not past due 1,037,454 - 1,037,454Past due 1-30 days 186,056 - 186,056Past due 31-60 days 189,616 - 189,616More than 60 days 37,758 (4,700) 33,058

1,450,884 (4,700) 1,446,184

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

As at 31 March 2016, trade receivables of RM1,634,349 (2015: RM408,730) that are past due but not impaired. These relate to a number of independent customers from whom there is no recent history of default.

The credit risk concentration profile of the Group as at the end of the reporting period is as follows:-

Group2016 2015 RM RM

By country:- Malaysia 1,677,281 1,284,626 Singapore 278,486 161,558

1,955,767 1,446,184

As at the reporting date, approximately 44% (2015: 39%) of trade receivables was due from one major customer.

As at the reporting date, approximately 77% (2015: 96%) of the other receivables was due from another debtor.

The net carrying amount of trade and other receivables is considered a reasonable approximate of fair value. The maximum exposure to credit risk is the carrying value of each class of receivables mentioned above. Trade receivables that are individually determined to be impaired at the end of reporting period relate to receivables that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

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(a) Credit risk (cont’d)

(ii) Corporate guarantees

The maximum exposure to credit risk is represented by the outstanding banking facilities of the subsidiary and third party as disclosed in Note 34 as at the end of the reporting period.

The Company provides financial guarantees to banks in respect of banking facilities granted to a subsidiary. The Company monitors on an ongoing basis the results of the borrowers and their repayments to the banks. As at the end of the reporting period, there was no indication that any of the subsidiary would default on repayment.

(iii) Intercompany balances

The maximum exposure to credit risk is represented by their carrying amount in the statements of financial position.

The Company provides unsecured advance to subsidiaries and monitors the results of the subsidiaries regularly. As at the end of the reporting period, there was no indication that the advances to the subsidiaries are not recoverable.

(b) Liquidity risk

Liquidity risk is the risk that the Group and the Company will not be able to meet their financial obligations as they fall due.

In managing its exposures to liquidity risk arises principally from its various payables, loans and borrowings, the Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

The Group aims at maintaining a balance of sufficient cash and deposits and flexibility in funding by keeping diverse sources of committed and uncommitted credit facilities from various banks.

Following are the areas where the Group and the Company are exposed to liquidity risk:-

Carryingamount

Contractualcash flow

Within 1 year

1 to2 years

2 to5 years

More than 5 years

Group RM RM RM RM RM RM

2016Trade payables 2,138,897 2,138,897 2,138,897 - - -Other payables 5,036,560 5,036,560 5,036,560 - - -Amount due to directors 3,390,558 3,390,558 3,390,558 - - -Finance lease liabilities 2,640,708 2,828,237 2,038,323 681,488 108,426 -Borrowings 1,815,072 2,034,419 410,143 267,098 1,068,393 288,785

15,021,795 15,428,671 13,014,481 948,586 1,176,819 288,785

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(b) Liquidity risk (cont’d)

Following are the areas where the Group and the Company are exposed to liquidity risk (cont’d):-

Carryingamount

Contractualcash flow

Within 1 year

1 to2 years

2 to5 years

More than 5 years

Group RM RM RM RM RM

2015Trade payables 106,422 106,422 106,422 - - -Other payables 3,650,159 3,650,159 3,650,159 - - -Amount due to directors 3,290,789 3,290,789 3,290,789 - - -Finance lease liabilities 90,643 94,625 49,518 45,107 - -Borrowings 3,120,554 3,596,125 1,939,135 447,135 1,209,855 -

10,258,567 10,738,120 9,036,023 492,242 1,209,855 -

Company

2016Other payables 2,665,681 2,665,681 2,665,681 - - -Borrowings 50 50 50 - - -Amount due to subsidiaries 2,200,201 2,200,201 2,200,201 - - -

4,865,932 4,865,932 4,865,932 - - -

2015Other payables 2,405,204 2,405,204 2,405,204 - - -Borrowings 1,259,197 1,492,000 1,492,000 - - -Amount due to directors 106,892 106,892 106,892 - - -Amount due to subsidiaries 2,810,322 2,810,322 2,810,322 - - -

6,581,615 6,814,418 6,814,418 - - -

(c) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

To mitigate the Group’s exposure to foreign currency risk, the Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of the Group entities. The currency giving rise to this risk is primarily United States Dollar (USD), Euro Dollar (EURO), Singapore Dollar (SGD) and Renminbi (RMB).

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(c) Foreign currency risk (cont’d)

The Group’s exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period was:-

Group CompanyDenominated in Denominated in

EURO RMB USD SGD2016 RM RM RM RM

Trade payables (141,747) (1,266) (54,851) -Borrowings (231,301) - - -Cash at bank - - 3,180 -Trade receivables - - 34,442 -

(373,048) (1,266) (17,229) -

Group CompanyDenominated in Denominated in

EURO USD SGD2015 RM RM RM

Amount due to a subsidiary - - (105,565)Trade payables - (70,441) -Borrowings (76,051) (117,996) -Cash at bank - 2,562 -Trade receivables - 2,716 -

(76,051) (183,159) (105,565)

The management deemed the risk to be negligible as the said balances are immaterial.

(d) Interest rate risk

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’s interest rate management objective is to manage the interest expenses consistent with maintaining an acceptable level of exposure to interest rate fluctuation.

In order to achieve this objective, the Group’s targets a mix of fixed and floating debt based on assessment of its existing exposure and desired interest rate profile.

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(d) Interest rate risk (cont’d)

The interest rate profile of the Group’s significant interest bearing financial instruments based on the carrying amounts as at the end of the reporting period were:-

2016 2015Group RM RM

Fixed rate instruments Financial liabilitiesFinance lease liabilities 2,640,708 90,643Borrowings - 194,285

2,640,708 284,928

Floating rate instrumentFinancial liabilityBorrowings 1,815,072 2,926,269

2016 2015Company RM RM

Floating rate instrument Financial liabilityBorrowings 50 1,259,197

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

The following table illustrates the sensitivity of profit and equity to a reasonable possible change in interest rates of +/- 50 basis point (“bp”). These changes considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

Group CompanyProfit for the year Equity

Profit for the year Equity

RM RM RM RM

± 50 bp ± 50 bp ± 50 bp ± 50 bp2016 ± 9,075 ± 9,075 ± 1 ± 1 2015 ± 14,631 ± 14,631 ± 6,296 ± 6,296

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33.3 Fair value of financial instruments

The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their values and carrying amounts shown in the statement of financial position.

Fair value of financial

instrumentscarried at fair value

Fair value of financial

instruments not carried at

fair valueCarrying amount

Level 1 Level 3RM RM RM

2016GroupFinancial assetQuoted shares 32,480 - 32,480

Financial liabilitiesFinance lease liabilities - 2,828,237 2,640,708Borrowings - 2,034,419 1,815,072

CompanyFinancial liabilityBorrowings - 50 50

2015GroupFinancial assetQuoted shares 104,122 - 104,122

Financial liabilitiesFinance lease liabilities - 119,590 90,643Borrowings - 3,060,594 3,120,554

CompanyFinancial liabilityBorrowings - 1,259,197 1,259,197

There were no transfers between Level 1 and Level 3 during the financial period (2015: no transfer in either direction).

Policy on transfer between levels

The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.

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33.3 Fair value of FINANCIAL INSTRUMENTS (CONT’D)

Level 1 Fair Value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date.

Level 3 Fair Value

Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.

34. CONTINGENT LIABILITY-UNSECURED

Company2016 2015

RM RM

Corporate guarantee given to licensed leasing house for leasing facility granted to a subsidiary 1,815,804 -

Corporate guarantee given to a licensed bank for banking facility granted to a subsidiary 44,368 144,404

Corporate guarantee given to a third party for rental of machineries facility granted to a subsidiary 815,017 -

35. SIGNIFICANT EVENTS

During the financial year

On 22 October 2015, the subsidiary of the Company, TAZ Logistics Sdn. Bhd. vide its Company’s solicitors, initiated legal action (“Legal Matter”) against TAZ Metals Sdn. Bhd. and four other Defendants. Whilst against the 1st Defendant, is knowingly receipt of trust properties, the claim against the 1st, 2nd and 3rd Defendants as knowingly assisting the 4th and 5th Defendants to breach their fiduciary duties to TAZ Logistics whilst the claim against the 4th and 5th Defendants is for breach of fiduciary duties towards TAZ Logistics.

The Company is unable at this juncture to determine the impact of this action on the financial position of the Company as the quantum that may be recovered is still unknown.

After the reporting period

(a) On 25 May 2016, the Company acquired 2 ordinary shares of RM1 each fully paid-up capital in Asdion Material Supply Marketing Sdn. Bhd. (“AMSM”) and Asdion Property Management Sdn. Bhd. (“APM”) respectively, making them wholly owned subsidiaries of the Company.

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DISCLOSURE OF REALISED AND UNREALISED PROFITS

Bursa Malaysia Securities Berhad had on 25 March 2010 and 20 December 2010, issued directives requiring all listed corporations to disclose the breakdown of unappropriated profits or accumulated losses into realised and unrealised on Group and Company basis, as the case may be, in quarterly reports and annual audited financial statements.

The breakdown of unappropriated losses as at the reporting date that has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and Guidance on Special Matter No. 1 issued on 20 December 2010 by the Malaysian Institute of Accountants are as follows:-

2016 2015RM RM

GroupTotal accumulated losses of the Group:-- Realised (14,373,685) (11,776,170)- Unrealised (162,000) (68,000)

(14,535,685) (11,844,170)

Total accumulated losses from associate:-- Realised (360,000) (364,518)

(14,895,685) (12,208,688)Less: Consolidation adjustment (1,325,603) (2,970,909)Total accumulated losses as per consolidated financial statements (16,221,288) (15,179,597)

2016 2015RM RM

CompanyTotal accumulated losses of the Company:-- Realised (14,316,005) (15,045,240)- Unrealised - (194,003)Total accumulated losses as per financial statements (14,316,005) (15,239,243)

The disclosure of realised and unrealised above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia Securities Berhad and should not be applied for any other purposes.

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Registered Owner / Location Description

Date of Acquisition/ *Valuation

Land/BuildUp Area

Tenure (Expiry Date)

Approximate Age of

Building (Years)

Cost / Revaluation

as at 31.03.2016

(RM)Techtron Integrated Systems (S) Pte Ltd1 Pemimpin Drive#05-07, Singapore 576151

Being a unit forming part of a building know as One Pemimpin built on part of the land in the District of Toh Payoh in the Republic of Singapore, being part of Government Resurvey Lots 6322A and 16928T both of Mukim 18 forming part of the land contained in State Lease No. 2074 and 26920 respectively.

This property was acquired on 13 April

2013.

The Company did a revaluation on 15

March 2013.

96 square metres

Leasehold 999 years

(6 July 2884)

4 years 3,001,495*

Notes:* Based on exchange rate of RM2.9028 for every SGD$1

LIST OFPROPERTIES


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Authorised Capital : RM50,000,00.00Issued and Fully Paid-Up Capital : RM11,626,990.00 No. of shares issued and paid-up : 116,269,900Class of Equity Securities : Ordinary shares of RM0.10 each Voting rights by show of hand : One vote for every memberVoting rights by poll : One vote for every share held

DISTRIBUTION SCHEDULE OF SHAREHOLDERS

Size of Holdings No. of Holders % No. of Shares % Less than 100 12 1.21 358 *100 - 1,000 510 51.46 108,242 0.091,001 - 10,000 221 22.30 1,407,600 1.2110,001 - 100,000 211 21.29 6,461,900 5.56100,001 - less than 5% of issued shares 33 3.33 31,832,200 27.385% and above of issued shares 4 0.40 76,459,600 65.76Total 991 100.00 116,269,900 100.00

* Negligible

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS (As per the Register of Substantial Shareholders)

Name of Substantial Shareholders Direct Interest Indirect InterestNo. of Shares % No. of Shares %

Tey Por Chen 24,815,300 21.34 - -Goodunited Limited 20,246,000 17.41 - -Na Chiang Seng 20,244,400 17.41 - -

DIRECTORS’ SHAREHOLDINGS (As per the Register of Directors’ Shareholdings)

Name of Directors Direct Interest Indirect InterestNo. of Shares % No. of Shares %

Datuk Seri Maglin Dennis D’Cruz - - - -Low Jyh Sing - - - -Jason Minos Anak Peter - - - -Lye Siang Long - - - -Selva Rasan a/l Dato’ Puspa Das - - - -Datuk Raime Bin Unggi - - - -See Poh Yee 21,000 0.02 - -Dato’ Hj. Zulkifli Bin Hj. Alias - - - -

ANALYSIS OFSHAREHOLDINGS

AS AT 15 AUGUST 2016


100

30 Largest Securities Account Holders as at 15 August 2016(without aggregating the securities from different securities accounts belonging to the same registered holder)

No. Name No. of Shares

held %

1 JF Apex Nominees (Tempatan) Sdn. Bhd. - Pledged securities account for Tey Por Chen 24,815,300 21.34

2 Goodunited Limited 20,246,000 17.41

3 Na Chiang Seng 20,244,400 17.41

4 HSBC Nominees (Asing) Sdn. Bhd. – Exempt An for BSI SA 11,153,900 9.59

5 PT Nusantara Rising Rich 4,222,000 3.63

6 Telecity Investments Limited 3,845,800 3.31

7 Maybank Securities Nominees (Asing) Sdn. Bhd. – Maybank Kim Eng Securities Pte. Ltd. for Teo Ee Seng 3,732,400 3.21

8 Yap Tai Tee 3,400,000 2.92

9 DB (Malaysia) Nominee (Tempatan) Sendirian Berhad – Exempt an for Deutsche Bank AG Singapore 3,130,500 2.69

10 RHB Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Megat D.Shahriman Bin Zaharudin 2,590,000 2.23

11 HSBC Nominees (Asing) Sdn. Bhd. – AA Noms SG for Linksys Investments Limited 2,068,000 1.78

12 Yee Yit Yang 1,762,300 1.52

13 Kenanga Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Koh Pee Seng 1,191,000 1.02

14 Maybank Nominees (Tempatan) Sdn. Bhd. – Chan Yoke Meng 498,400 0.43

15 Teo Ee Seng 495,000 0.43

16 Lim Boon Hong 475,000 0.41

17 Maybank Securities Nominees (Asing) Sdn. Bhd. – Maybank Kim Eng Securities Pte. Ltd. for Low Siew Yam

385,000 0.33

18 Wai Chong Ming 355,800 0.31

19 Law Chee Kheong 320,000 0.28

20 Low Chee Kwong 310,000 0.27

21 Ng Elhow 300,000 0.26

22 Mohamed Akhir Bin Yusoff 228,800 0.20

23 Md. Shah Bin Abu Hasan 224,500 0.19

24 Lee Lian Huat 203,000 0.17

25 Chai Chat Leong 200,000 0.17

26 Ng Kiat Cheong 200,000 0.17

27 Quek Yong Wah 200,000 0.17

28 Wai Chong Hong 200,000 0.17

29 Amsec Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Tiu Swee Seng

185,300 0.16

30 Lim Soo Hoon 174,800 0.15

ANALYSIS OFSHAREHOLDINGSAS AT 15 AUGUST 2016


ANNUAL REPORT 2016

101

ANALYSIS OF WARRANT 2014/2019 (“WARRANT”)

No. of Warrant in issue : 48,655,960Voting rights by show of hand : One vote for every member at any meeting of Warrant holdersVoting rights by poll : One vote for every Warrant held at any meeting of Warrant holders

Distribution Schedule of Warrant

Size of Holdings No. of Holders % No. of Warrants % Less than 100 637 73.64 7,384 0.02100 - 1,000 102 11.79 29,637 0.061,001 - 10,000 53 6.13 311,840 0.6410,001 - 100,000 55 6.36 1,980,825 4.07100,001 - less than 5% of issued warrants 14 1.62 8,939,900 18.375% and above of issued warrants 4 0.46 37,386,374 76.84Total 865 100.00 48,655,960 100.00

DIRECTORS’ WARRANT HOLDINGS(As per the Register of Directors’ Warrant holdings)

There were no Directors holding warrants in the Company.

30 Largest Securities Account Holders as at 15 August 2016(without aggregating the securities from different securities accounts belonging to the same registered holder)

No. Name No. of

Warrants held %

1 Goodunited Limited 20,205,600 41.53

2 HSBC Nominees (Asing) Sdn. Bhd. – Exempt An for BSI SA 8,358,740 17.18

3 PT Nusantara Rising Rich 6,340,500 13.03

4 JF Apex Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Tey Por Chen 2,481,534 5.10

5 HLIB Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Soo Tee Wei 2,061,440 4.24

6 HLIB Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Soo Tee Wei 1,453,800 2.99

7 Kenanga Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Koh Pee Seng 1,445,700 2.97

8 DB (Malaysia) Nominees (Tempatan) Sendirian Berhad – Exempt An for Deutsche Bank AG Singapore 1,046,100 2.15

9 Affin Hwang Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Toh Pik Chai 755,000 1.55

10 Chai Chat Leong 560,700 1.15

11 Telecity Investments Limited 359,160 0.74

12 Yap Tai Tee 340,000 0.70

13 Kenanga Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Toh Pik Chai 250,000 0.51

ANALYSIS OFSHAREHOLDINGS

AS AT 15 AUGUST 2016


102

No. Name No. of

Warrants held %

14 Lee Wei Ling 183,000 0.38

15 Mercsec Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Tey Hock Lai 152,300 0.31

16 Chang Soon 114,900 0.24

17 Seow Lian Soon 109,000 0.22

18 Chew Loi Sang 108,800 0.22

19 Low Lai Peng 100,000 0.21

20 Public Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Faizatul Ikmi Binti Abd Razak 93,590 0.19

21 Lee Chee Siong 92,600 0.19

22 Tan Sock Luan 91,000 0.19

23 Lok Wei Seong 82,000 0.17

24 Azidi Bin Sarudin 80,300 0.17

25 Chuah Kooi Lin @ Lim Kooi Lin 80,000 0.16

26 Then Liat Kuen 80,000 0.16

27 Lim Pui Hung 72,000 0.15

28 RHB Capital Nominees (Tempatan) Sdn. Bhd. – Azman Bin Mohd Yusoff 67,800 0.14

29 Maybank Securities Nominees (Tempatan) Sdn. Bhd. – Pledged securities account for Koay Chee Seng 60,000 0.12

30 Azman Bin Mohd Yusoff 51,000 0.10

30 Largest Securities Account Holders as at 15 August 2016 (cont’d)(without aggregating the securities from different securities accounts belonging to the same registered holder)

ANALYSIS OFSHAREHOLDINGSAS AT 15 AUGUST 2016


ANNUAL REPORT 2016

103

NOTICE IS HEREBY GIVEN that the Fourteenth Annual General Meeting of the Company will be held at Kenanga Room, Sri Damansara Club, Lot 23304, Persiaran Perdana, Bandar Sri Damansara, 52200 Kuala Lumpur on Friday, 9 September 2016 at 10:00 a.m. to transact the following business:-

A G E N D A

As Ordinary Business:

1. To receive the Audited Financial Statements for the financial year ended 31 March 2016 together with the Reports of the Directors and Auditors thereon.

Please refer toExplanatory Note 1

2. To approve the payment of Directors’ fees for the following Directors for the financial year ended 31 March 2016:-

i. Datuk Seri Maglin Dennis D’Cruz - Chairman, Independent Non-Executive Director ii. Jason Minos Anak Peter – Executive Directoriii. Low Jyh Sing – Chief Operating Officeriv. See Poh Yee – Independent Non-Executive Directorv. Selva Rasan a/l Dato’ Puspa Das – Independent Non-Executive Directorvi. Datuk Raime Bin Unggi – Independent Non-Executive Directorvii. Tengku Azlan Ibni Sultan Abu Bakar – Former Chairman, Independent Non-Executive Directorviii. Dato’ Mohamed Ridzuan Bin Nor Md – Former Executive Directorix. Dato’ Yen Soon Ai – Former Executive Directorx. Na Chiang Seng – Former Executive Directorxi. Yap Tai Tee – Former Group Managing Director/Chief Executive Officerxii. Syed Amir Syakib Arsalan Bin Syed Ibrahim – Former Independent Non-Executive Directorxiii. Mohamad Farid Bin Mohd Yusof – Former Vice Chairman, Non-Independent Non-Executive

Director

Please refer toExplanatory Note 2

(Resolution 1) (Resolution 2) (Resolution 3)(Resolution 4) (Resolution 5) (Resolution 6) (Resolution 7) (Resolution 8) (Resolution 9)

(Resolution 10) (Resolution 11) (Resolution 12) (Resolution 13)

3. To re-elect Selva Rasan a/l Dato’ Puspa Das, who is retiring by rotation pursuant to Article 81 of the Company’s Articles of Association.

(Resolution 14)

4. To re-elect the following Directors, who are retiring pursuant to Article 88 of the Company’s Articles of Association:-

i. Datuk Seri Maglin Dennis D’Cruzii. Jason Minos Anak Peteriii. Low Jyh Singiv. Lye Siang Longv. Dato’ Hj. Zulkifli Bin Hj. Alias

(Resolution 15)(Resolution 16)(Resolution 17)(Resolution 18)(Resolution 19)

5. To re-appoint Messrs. SJ Grant Thornton as Auditors of the Company until the conclusion of the next Annual General Meeting and authorise the Directors to fix their remuneration.

(Resolution 20)

As Special Business :To consider and, if thought fit, pass with or without any modification, the following ordinary and special resolutions:-

6. ORDINARY RESOLUTION - AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES

ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965 and 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, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being; AND THAT the Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND THAT such authority shall commence immediately upon passing of this resolution and continue in force until the conclusion of the next Annual General Meeting of the Company.”

(Resolution 21)

NOTICE OFANNUAL GENERAL MEETING


104

7. SPECIAL RESOLUTION- PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

“THAT the proposed amendments to the existing Articles of Association of the Company as set out in Appendix I attached to the Annual Report be and are hereby approved and adopted AND THAT the Directors be and are hereby authorised to do all acts, things and deeds which are necessary to give effect to the proposed amendments to the Articles of Association, for and on behalf of the Company.”

(Resolution 22)

8. 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

CHUA SIEW CHUAN (MAICSA 0777689)MAK CHOOI PENG (MAICSA 7017931)Company Secretaries

Kuala LumpurDated: 18 August 2016

EXPLANATORY NOTES

1. Item 1 of the Agenda

This agenda item is meant for discussion only, as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements and hence, this agenda item is not put forward for voting.


Details of Directors’ fees to the former Directors during the financial year ended 31 March 2016 (inclusive the fees paid to directors who held office during the financial year) are as follows:-

Name Serving period Amount (RM)Datuk Seri Maglin Dennis D’Cruz 28 September 2015 to 31 March 2016 60,000Jason Minos Anak Peter 28 September 2015 to 31 March 2016 25,000Low Jyh Sing 1 March 2016 to 31 March 2016 5,000See Poh Yee 1 April 2015 to 31 March 2016 30,000Selva Rasan a/l Dato’ Puspa Das 1 April 2015 to 31 March 2016 42,000Datuk Raime Bin Unggi 1 April 2015 to 31 March 2016 36,000Tengku Azlan Ibni Sultan Abu Bakar 8 April 2015 to 26 September 2015 210,000Dato’ Mohamed Ridzuan Bin Nor Md 8 April 2015 to 26 September 2015 150,000Dato’ Yen Soon Ai 1 April 2015 to 26 September 2015 150,000Na Chiang Seng 1 April 2015 to 8 April 2015 2,000Yap Tai Tee 1 April 2015 to 11 November 2015 152,000Syed Amir Syakib Arsalan Bin Syed Ibrahim 28 September 2015 to 31 March 2016 18,000Mohamad Farid Bin Mohd Yusof 1 April 2015 to 31 March 2016 43,774



ANNUAL REPORT 2016

105


The Ordinary Resolution proposed under item 6 of the Agenda is a renewal of the general mandate (“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, from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does not exceed 10% of the issued and paid-up share capital of the Company, for such purposes as the Directors consider would be in the best interest of the Company. The authority, unless revoked or varied by the Company in a general meeting, will expire at the next Annual General Meeting.

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 of the Company were issued pursuant to the mandate granted to the Directors at the Thirteenth Annual General Meeting held on 28 September 2015 which will lapse at the conclusion of the Fourteenth Annual General Meeting.


The Special Resolution proposed under Item 7 of the Agenda is to streamline the Articles of Association of the Company with the recent amendments to the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad.

Notes:

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 1 September 2016 (“General Meeting Record of Depositors”) shall be eligible to attend the Meeting.

(ii) A member entitled to attend and vote at the Meeting is entitled to appoint more than two (2) proxies to attend and vote instead of him. Where a member appoints two (2) or more proxies, the appointments shall be invalid unless the member specifies the proportion of his holdings to be represented by each proxy.

(iii) A proxy need not be a member of the Company and the provisions of Sections 149 (1)(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 authorized in writing. In the case of a corporate member, the instrument appointing a proxy must be either under its common seal or under the hand of an officer or attorney duly authorised.

(v) The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than 48 hours before the time for holding the Meeting or any adjournment thereof, at which the person named in such proxy process to vote and in default the proxy shall not be treated as valid. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointor.



106

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

Article No.

Existing Article Revised Article

3. The authorised share capital of the Company at the date of adoption of these Articles is RM5,000,000.00 divided into 50,000,000 ordinary shares of RM0.10 each.

-DELETED-

60. In every notice calling a meeting of the Company there shall appear with reasonable prominence, a statement that a Member entitled to attend and vote is entitled to appoint more than two (2) proxies to attend and vote instead of him, and that a proxy need not also be a Member. Where a Member appoints two (2) or more proxies, he shall specify the proportion of his holdings to be represented by each proxy, failing which the appointment shall be invalid.

In every notice calling a meeting of the Company there shall appear with reasonable prominence, a statement that a member entitled to attend and vote is entitled to appoint up to two (2) proxies to attend and vote instead of him. Where a Member appoints two (2) proxies, he shall specify the proportion of his shareholdings to be represented by each proxy, failing which the appointment shall be invalid. A proxy appointed to attend and vote at the meeting shall have the same rights as a member to speak at the meeting.

66. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:-

(a) by the Chairman of the meeting;(b) by any Member or Members present in person or by

proxy and representing not less than one-tenth of the total voting rights of all Members having the right to vote at the meeting; or

(c) by a Member or Members holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid on the shares conferring that right.

Unless a poll is so demanded, a declaration by the Chairman of the meeting that a resolution has on a show of hands been carried unanimously by a particular majority or lost, and an entry to that effect in the book containing the minutes of the proceedings of the Company, shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. The demand for a poll may be withdrawn. A proxy shall be entitled to vote on a show of hands on any question of any General Meeting.

At any general meeting all resolutions set out in the notice of such general meeting or a resolution put to the vote of the meeting shall be decided by poll. Every Member present in person or by proxy or attorney or representative shall have one vote for each share he holds.

The poll may be conducted manually using voting slips or electronically using various forms of electronic voting devices. Such votes shall be counted by the poll administrator, and verified by the scrutineers.

APPENDIX I


ANNUAL REPORT 2016

107

Article No.


67. If a poll is duly demanded it shall be taken in such manner and either at once or after an interval or adjournment or otherwise as the Chairman directs, and the result of the poll shall be the resolution of the meeting at which the poll was demanded, but a poll demanded on the election of Chairman or on a question of adjournment shall be taken forthwith. The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded. The Chairman of the meeting may (and if so directed by the meeting shall) appoint scrutineers and may in addition to the powers of adjourning meetings contained in Article 65 adjourn the meeting to some place and time fixed for the purpose of declaring the result of the poll.

A poll shall be taken in such manner as the Chairman directs, and the result of the poll shall be the resolution of the meeting. A scrutineer shall be appointed to validate the votes cast at the general meeting and shall fulfill the following requirements:-

i. must not be an officer of the Company or its related corporation;

ii. must be independent of the person undertaking the polling process; and

iii. must refrain from acting as scrutineers for a resolution where he is interested.

68. In the case of an equality of votes, whether on show of hands or on a poll, the Chairman of the meeting at which the show of hands takes place or at which the poll is demanded shall not be entitled to a second or casting votes.

In the case of an equality of votes, the Chairman shall be entitled to a second or casting vote.

74 (3) -NO PROVISION- Where a Member of the Company is an exempt authorized 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 authorized nominee may appoint in respect of each Omnibus Account it holds.

An exempt authorized nominee refers to an authorized nominee defined under the Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of the Central Depositories Act.

108. The Directors shall have full powers to appoint any person from time to time as and when necessary, as their proxies to represent them at Directors’ Meetings. An instrument appointing a proxy shall be in writing in any form approved by the Directors under the hand of the appointer or his attorney duly authorized in writing.

-DELETED-

APPENDIX I(CONT’D)


108

Article No.


135. The Directors shall from time to time in accordance with Section 169 of the Act cause to be prepared and laid before the Company in general meeting, such profit and loss accounts, balance sheets and reports as are referred to in the Section. The interval between the close of a financial year of the Company and the issue of the annual audited financial statements and the Directors’ and auditors’ report relating to it shall not exceed six (6) months, unless otherwise approved by the relevant authorities. A copy of each such document shall not less than twenty-one (21) days before the date of the meeting (or such shorter period as may be agreed) in any year of the receipt of notice of the meeting pursuant to Article 153, be sent to every Member of, and to every holder of debentures of the Company under the provisions of the Act or of these Articles.

The requisite number of copies of each such document as may be required by the Exchange upon which the Company’s shares may be listed, shall at the same time be likewise sent to the Exchange provided that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any Member to whom a copy of these documents has not been sent shall be entitled to receive a copy, free of charge on application at the Company’s Office.

The Directors shall from time to time in accordance with Section 169 of the Act cause to be prepared and laid before the company in general meeting, such profit and loss accounts, balance sheets and reports as are referred to in the Section. A copy of each such document shall not less than twenty-one (21) days before the date of the meeting (or such shorter period as may be agreed) in any year of the receipt of notice of the meeting pursuant to Article 153, be sent to every Member of, and to every holder of debentures of the Company under the provisions of the Act or of these Articles. The requisite number of copies of each such document as may be required by the Exchange upon which the Company’s shares may be listed, shall at the same time be likewise sent to the Exchange provided that this Article shall not require a copy of these documents to be sent to any person of whose address the Company is not aware but any Member to whom a copy of these documents has not been sent shall be entitled to receive a copy, free of charge on application at the Company’s Office.

Subject to compliance with the requirements of Exchange and any other relevant laws and regulations, if any, the Company may issue its Annual Report incorporating the audited financial statement in electronic format or if such other form of electronic media permitted under the Listing Requirements and if a Member requires a printed form of the Annual Report, the Company shall send such document to the Member within four (4) Market Days from the date of receipt of the Member’s verbal or written request.

146. Any dividend, interest or other money payable in cash in respect of shares maybe paid by cheque of warrant, sent through the post directed to the registered address of the holder. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent, and the payment of any such cheque or warrant shall operate as a good discharge to the Company in respect of the money represented thereby, notwithstanding that it may subsequently appear that the same has been stolen or that the endorsement thereon has been forged. Every such cheque or warrant shall be sent at the risk of the person entitled to the money thereby represented.

Subject to the provisions of the Act, the Central Depositories Act and the Rules, the Listing Requirements of the Exchange and/or regulatory authorities, payment of dividends may be made by direct transfer or such other mode of electronic means to the bank account of the holder whose name appear in the Record of Depositors or, if more than one (1) person is entitled thereto in consequence of the death or bankruptcy of the holder, payment in such manner to the bank account of any one of such persons to the bank account of such person as such persons may by writing direct. The payment of any dividends by such electronic means shall constitute a good and full discharge to the Company of the dividends to which it relates regardless of any discrepancy given by the holder in the details of bank account(s).

APPENDIX I(CONT’D)

I/We NRIC No./Passport No./Company No. (full name in capital letters)

of (full address)

being (a) member(s) of ASDION BERHAD hereby appoint

NRIC No./Passport No. (full name in capital letters)

of (full address)

and/or* NRIC No. /Passport No. (full name in capital letter)

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 Kenanga Room, Sri Damansara Club, Lot 23304, Persiaran Perdana, Bandar Sri Damansara, 52200 Kuala Lumpur on Friday, 9 September 2016 at 10:00 a.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.

Item Agenda1. To receive the Audited Financial Statements for the financial year ended 31 March 2016 together with the Reports of the

Directors and the Auditors thereon.Ordinary Business Resolution For Against

2. To approve the payment of Directors’ fees to the following directors for the financial year ended 31 March 2016:-2(i). Datuk Seri Maglin Dennis D’Cruz - Chairman, Independent Non-Executive

Director1

2(ii). Jason Minos Anak Peter – Executive Director 22(iii). Low Jyh Sing – Chief Operating Officer 32(iv). See Poh Yee – Independent Non-Executive Director 42(v). Selva Rasan a/l Dato’ Puspa Das – Independent Non-Executive Director 52(vi). Datuk Raime Bin Unggi – Independent Non-Executive Director 62(vii). Tengku Azlan Ibni Sultan Abu Bakar – Former Chairman, Independent Non-

Executive Director7

2(viii). Dato’ Mohamed Ridzuan Bin Nor Md – Former Executive Director 82(ix). Dato’ Yen Soon Ai – Former Executive Director 92(x). Na Chiang Seng – Former Executive Director 102(xi). Yap Tai Tee – Former Group Managing Director/Chief Executive Officer 112(xii). Syed Amir Syakib Arsalan Bin Syed Ibrahim – Former Independent Non-

Executive Director12

2(xiii). Mohamad Farid Bin Mohd Yusof - Former Vice Chairman, Non-Independent Non-Executive Director

13

3. To re-elect Selva Rasan a/l Dato’ Puspa Das, who is retiring by rotation pursuant to Article 81 of the Company’s Articles of Association.

14

4. 4(i). To re-elect Datuk Seri Maglin Dennis D’Cruz, who is retiring pursuant to Article 88 of the Company’s Articles of Association.

15

4(ii). To re-elect Jason Minos Anak Peter, who is retiring pursuant to Article 88 of the Company’s Articles of Association

16

4(iii). To re-elect Low Jyh Sing, who is retiring pursuant to Article 88 of the Company’s Articles of Association

17

4(iv). To re-elect Lye Siang Long, who is retiring pursuant to Article 88 of the Company’s Article of Association

18

4(v). To re-elect Dato’ Hj. Zulkifli Bin Hj. Alias, who is retiring pursuant to Article 88 of the Company’s Article of Association

19

ASDION BERHAD (590812-D)(Incorporated in Malaysia)

PROXY FORM

Ordinary Business Resolution For Against5. To re-appoint Messrs. SJ Grant Thornton as Auditors of the Company until the

conclusion of the next Annual General Meeting of the Company and authorise the Directors to fix their remuneration.

20

Special Business Resolution For Against

6. Ordinary Resolution - Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 21

7. Special Resolution- Proposed Amendments to the Articles of Association of the Company 22

*delete whichever not applicable

CDS Account No.

Number of Ordinary Shares Held

Dated this day of 2016.

For appointment of more than one (1) proxy, percentage of shareholdings to be represented by the proxies

No. of shares %

Proxy 1

Proxy 2

TOTAL 100

Signature of Member(s)/Common Seal

NOTES:

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 1 September 2016 (“General Meeting Record of Depositors”) shall be eligible to attend the Meeting.

(ii) A member entitled to attend and vote at the Meeting is entitled to appoint more than two (2) proxies to attend and vote instead of him. Where a member appoints two (2) or more proxies, the appointments shall be invalid unless the member specifies the proportion of his holdings to be represented by each proxy.

(iii) A proxy need not be a member of the Company and the provisions of Sections 149 (1)(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 authorized in writing. In the case of a corporate member, the instrument appointing a proxy must be either under its common seal or under the hand of an officer or attorney duly authorised.

(v) The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur, Wilayah Persekutuan not less than 48 hours before the time for holding the Meeting or any adjournment thereof, at which the person named in such proxy process to vote and in default the proxy shall not be treated as valid. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointor.

ASDION BERHAD (590812-D)(Incorporated in Malaysia)

PROXY FORM

The Company SecretariesASDION BERHAD (590812-D)

c/o Securities Services (Holdings) Sdn BhdLevel 7, Menara Milenium

Jalan Damanlela, Pusat Bandar DamansaraDamansara Heights

50490 Kuala LumpurWilayah Persekutuan

AFFIXSTAMP

Then fold here

1st fold here

Documents

ASDION BERHAD Petroliam Nasional Berhad, Proton Holdings Berhad and Sarawak Land Consolidation & Rehabilitation Authority. He had also served in the capacity of Executive Director