SPEARHEADING E-COMMERCE SOLUTIONS · 2019-01-25 · Bank Muamalat Malaysia Berhad Bank Kerjasama Rakyat Malaysia Berhad CIMB Bank Berhad Public Bank Berhad Malayan Banking Berhad

SPEARHEADING E-COMMERCE SOLUTIONS

Annual Report 2013

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CONTENTS

02 Corporate Information

04 Corporate Profile

07 Corporate Structure

08 Board of Directors

10 Profile of the Board of Directors

16 Chairman’s Statement

20 Financial Diary / Corporate Announcements

23 Corporate Governance Statement

31 Corporate Social Responsibility

32 Audit Committee Report

36 Statement on Risk Management and Internal Control

39 Share Performance Chart

41 5-Year Financial Highlights

43 Financial Statements

101 Analysis of Shareholdings

103 Notice of Forty Fourth Annual General Meeting

107 Annexure A

108 Administrative Details

Form of Proxy

44ANNUAL GENERAL MEETING

Monday, 12 May 2014 at 10.00 a.m. Ballroom 1, Level 1

Sime Darby Convention Centre 1A, Jalan Bukit Kiara 1 60000 Kuala Lumpur

th

CORPORATEINFORMATION

TIME Engineering Berhad | Annual Report 2013

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BOARD OF DIRECTORS

Tan Sri Abd Rahman MamatChairman/Independent Non-Executive Director

Datuk Samsul HusinExecutive Deputy Chairman

Wong Kam YinExecutive Director

Rosli Abdullah Independent Non-Executive Director

Norlila HassanIndependent Non-Executive Director

Dato’ Arif Ambrose Leonard NgIndependent Non-Executive Director

Dato’ Zainul Azman Dato’ Zainul AzizNon-Independent Non-Executive Director

Ang Hsin HsienNon-Independent Non-Executive Director

Note: Non-Independent Non-Executive Directors are nominees of Censof Holdings Berhad

SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR

Rosli Abdullah T : (03) 2730 0300F : (03) 2713 3131E : [email protected]

BOARD COMMITTEES

Audit CommitteeRosli Abdullah Chairman/Independent Non-Executive Director

Norlila HassanIndependent Non-Executive Director


Nomination and Remuneration CommitteeNorlila HassanChairperson/Independent Non-Executive Director

Rosli Abdullah Independent Non-Executive Director

Dato’ Zainul Azman Dato’ Zainul AzizNon-Independent Non-Executive Director

Board Procurement and Tender CommitteeDato’ Zainul Azman Dato’ Zainul AzizChairman/Non-Independent Non-Executive Director

Datuk Samsul HusinExecutive Deputy Chairman


Dato’ Arif Ambrose Leonard NgIndependent Non-Executive Director(Alternate Chairman to Dato’ Zainul Azman Dato’Zainul Aziz)

CORPORATEINFORMATION

TIME Engineering Berhad | Annual Report 2013

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COMPANY SECRETARY

Keh Ching Tyng MAICSA 7050134

T : (03) 2730 0300 / 2730 0433F : (03) 2713 3131 E : [email protected]

REGISTERED OFFICE & HEAD OFFICE

Tower 3, Avenue 5The Horizon, Bangsar SouthNo. 8 Jalan Kerinchi59200 Kuala LumpurT : (03) 2730 0300F : (03) 2713 3131E : [email protected] : www.teb.com.my

SHARE REGISTRAR

Mega Corporate Services Sdn BhdLevel 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail50250 Kuala LumpurT : (03) 2692 4271F : (03) 2732 5388 / 2732 5399

AUDITORS

MESSRS KPMG (AF0758)(Chartered Accountants)Level 10, KPMG TowerNo. 8, First Avenue, Bandar Utama47800 Petaling Jaya, SelangorT : (03) 7721 3388F : (03) 7721 3399

STOCK EXCHANGE LISTING

Main Market of theBursa Malaysia Securities Berhad[Listed since 12 September 1983]

Stock Name : TIMEStock Code : 4456Sector : Technology

PRINCIPAL BANKERS

AmBank (M) BerhadBank Muamalat Malaysia BerhadBank Kerjasama Rakyat Malaysia BerhadCIMB Bank BerhadPublic Bank BerhadMalayan Banking Berhad

HEAD OFFICE OF SUBSIDIARIES

Dagang Net Technologies Sdn BhdTower 3, Avenue 5The Horizon, Bangsar SouthNo. 8 Jalan Kerinchi59200 Kuala LumpurT : (03) 2730 0200F : (03) 2713 2121E : [email protected] : www.dagangnet.com

TEB Systems Integrators Sdn BhdTower 3, Avenue 5The Horizon, Bangsar SouthNo. 8 Jalan Kerinchi59200 Kuala LumpurT : (03) 2730 0300F : (03) 2713 3131E : [email protected] : www.teb.com.my

TEB Quantum Technology Sdn BhdTower 3, Avenue 5The Horizon, Bangsar SouthNo. 8 Jalan Kerinchi59200 Kuala LumpurT : (03) 2730 0300F : (03) 2713 3131E : [email protected] : www.teb.com.my

CORPORATEPROFILE

AT TEB,CUSTOMERS

IS OUR FOCUSAnd this focus takes us to explore ways to offer the best

services for our customers through leveraging on ourexpertise and experience in developing and delivering IT

solutions.

Whilst our services are based on IT solutions, we strive tooffer services that go beyond technology to facilitate tradethus enabling our customers conduct their business and

operations in the best way possible.4

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SPEARHEADING E-COMMERCE SOLUTIONS

Our goal is to nurture business connectivity withworld-class eCommerce services and expertisethat make a difference for sustainable growth.

eCOMMERCE SERVICESThrough subsidiary Dagang Net Technologies Sdn Bhd (DagangNet), TEB is positioned as Malaysia’s leading e-commerceservice provider, and is pioneer in the spearheading of initiativesaimed at creating paper-less, electronic Customs-relatedservices to ease the facilitation and streamlining of internationaltrading processes for the import and export, trade and logisticsindustries.

• ePCO is a web-basedPreferential Certificate ofOrigin application andapproval system, whichallows manufacturersor exporters who needcertification of thecountry of origin for aparticular product to obtainthe Preferential Certificate ofOrigin in the form of an officialonline document.

• ePermit is a web-basedimport and export permitapplication and approvalsystem that enablesimporters, exportersand forwarding agentsto apply for permit fromPermit Issuing Agencies(PIAs) and obtain theapproval online.

• ePermit STA is a web-based permit application andapproval system for sensitive trade items under the purviewof Strategic Trade Act 2010 (STA Act 2010), which is alegislation that controls the export, transhipment, transitand brokering of strategic items as well as activities relatedto the design, development, production and delivery ofweapons of mass destruction.

• eManifest is a web-basedsystem that allows portusers such as PrincipalShipping Agents (PSA),Shipping Agents (SA),Freight Forwarders (FF)submit cargo manifestsand vessel information tothe respective authorities forvalidation and approval online.

• eDeclare is a web-basedCustoms declarationservice that facilitates the preparation andsubmission of tradedeclarations and manifestvia the Internet.

• ePayment allows usersprepare, submit and settlepayments with onlineconvenience, beyondbanking hours andanytime, anywhere.

ePCO, ePermit, ePermit STA, eManifest, eDeclare andePayment are also services offered via Malaysia’s National SingleWindow that Dagang Net was entrusted by the Government ofMalaysia to plan, design, implement and operate.

eSijil 3P is a collaboration between Dagang Net and the FederalAgricultural Marketing Authority (FAMA) where Dagang Net wasappointed to plan, design, implement and operate this onlineportal, which expedites the process of product compliance andclearance for the agro-based business community. It wasdeveloped to ensure all agricultural products are given propergrading, labelling and packaging in line with the requirements ofthe 3P system (Penggredan, Pelabelan, Pembungkusan).

CORPORATEPROFILE

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TEB13(corp)_Layout 1 4/11/14 2:27 PM Page 5

CORPORATEPROFILE

IT CONSULTANCY SERVICES

TEB, via subsidiary TEB Systems Integrators Sdn Bhd (TSI), providesexpertise in the management of large IT projects, specifically to advise clientson computing and networking solutions, developing maintenance andapplication services for the public sector.

TSI advises and delivers project management services within the fullspectrum of an IT assignment, from design and build right through toinstallation and commissioning. With a cumulative experience spanning morethan a decade, our solutions encompass enterprise network, including WAN& LAN implementation, and designing and deployment of highly reliablewireless solutions to keep people and businesses seamlessly connected.

For secure, reliable, cost-effective solutions, we are able to undertakeinstallation and maintenance of structured cabling system, retrofitting existingnetworks or implementing new networks to meet latest standards andspecifications. Our IT management and consultation approach emphasisesa Standard Operation Procedure (SOP) that includes designing, developing,improving, adopting and maintaining infrastructure to suit our clients’ needs.

TSI also provides a range of services in the procurement, delivery, installation,testing and commissioning of IT equipment in large and nationwide IT rolloutwhile our maintenance coverage encompasses technical support via on-sitesupport from our technicians. TSI’s technicians are authorised and certifiedby multinational vendors and our strategic partners.

CYBERSECURITY SERVICES

Our cybersecurity solution - FORTRESS - is acomprehensive suite of enterprise securitysolution that is dedicated to protectingclients’ information assets safe addressingtheir security concerns 24 hours a day, 365days a year.

Over the years, our highly qualified andexperienced team of security consultantsand analysts has helped many businessesbuild reliable yet resilient security defencesfor reduced costs and operational efficiencyby streamlining complex securitymanagement into a cohesive, unified system.

Through FORTRESS, TEB QuantumTechnology Sdn Bhd (TQT) SecurityOperations Centre provides monitoring,management and integration as well asidentity access management. TQT is alsoqualified to serve our clients in an advisorycapacity on areas such as security andresiliency management, cyber-forensics andIT governance & compliance.

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PUTTING OUR

IMAGINATION TO TEST

FOR OUR CUSTOMERS,

PEOPLE AND

COMMUNITIES


CORPORATE STRUCTURE

As at 31 March 2014

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TIME ENGINEERING BERHAD TEB Systems Integrators Sdn Bhd

100%

TEB Quantum Technology Sdn Bhd

100%

71.25%

Dagang Net Technologies Sdn Bhd

Principal Activity Development, management and provision of B2B e-commerce and computerised transaction facilitation services.

Principal Activity Providing expertise in IT project management and consultancy, supply of ICT hardware equipment, maintenance and asset management.

Principal Activity Providing IT solutions, cybersecurity, managed services and supply of computer hardware, software and peripherals.

BOARD OF DIRECTORS

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DATO’ ZAINUL AZMAN DATO’ ZAINUL AZIZNon-Independent Non-Executive Director

NORLILA HASSANIndependent Non-Executive Director

ROSLI ABDULLAHIndependent Non-Executive Director

TAN SRI ABD RAHMAN MAMATChairman/Independent Non-Executive Director


BOARD OF DIRECTORS

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WONG KAM YINExecutive Director

DATUK SAMSUL HUSINExecutive Deputy Chairman

DATO’ ARIF AMBROSELEONARD NGIndependent Non-Executive Director

ANG HSIN HSIENNon-Independent Non-Executive Director



Tan Sri Abd Rahman Mamat, aged 61, Malaysian, was appointed asChairman of the Company on 16 December 2013 following hisappointment as an Independent Non-Executive Director on 12 December 2013.

He graduated with a Bachelor of Economics (Honours) fromUniversity of Malaya and has an Advanced Management Programmequalification from Harvard Business School, Boston, the United Statesof America.

He was previously Secretary-General of the Ministry of InternationalTrade and Industry (MITI), a position which he served fromSeptember 2006 until his retirement in December 2010. Tan Sri AbdRahman joined MITI as an Assistant Director on 18 April 1975 andserved in various capacities in the ministry for 35 years whichincluded Deputy Trade Commissioner, Malaysian Trade Office, NewYork, the United States of America; Director of Trade, Malaysian TradeCentre, Taipei, Taiwan; Economic Counsellor/Trade Commissioner andDeputy Permanent Representative to the United Nations Economicand Social Commission (ESCAP), Malaysian Trade Office, Bangkok,Thailand; Special Assistant to Minister of International Trade andIndustry, Tan Sri Rafidah Abdul Aziz; Director, Export PromotionBureau, Malaysia External Trade Development Corporation(MATRADE); Director of Industries; Senior Director, Policy andIndustry Services Division; and Deputy Secretary-General (Industry).

During his tenure in MITI, he also served as MITI’s representative onthe board of various companies and corporations including MalaysianIndustrial Development Authority (MIDA), MATRADE, Johor

Corporation, Regional Economic Development Authority (RECODA),Sarawak and Small and Medium Corporation Malaysia (SME CORP).

Tan Sri Abd Rahman has represented Malaysia in numerousinternational meetings, negotiations, conferences and symposiumsand has also contributed towards formulating, implementing andmonitoring policies and programmes on international trade andindustrial growth as well as entrepreneurship development. He was anhonorary member of the ASEAN Federation of EngineeringOrganisations and a Malaysian Leader for the High Level Task Forceon ASEAN Economic Integration.

He also sits on Boards of various companies and organisationsincluding serving as Chairman of Asia Logistics Council Sdn Bhd,Hiap Teck Venture Berhad, Malaysian Mining Corporation Petroleum& Resources Sdn Bhd, Green River Hospital Sdn Bhd, Eastern SteelIntegrated Steel Mill Sdn Bhd, BioAlpha Holdings Sdn Bhd, andOcean Might Sdn Bhd, as well as Executive Chairman of BroadgateEngineering, and Director of Parkson Holdings Berhad and MalaysianTechnology Development Corporation Sdn Bhd.

He has no family relationship with any Director and/or majorshareholder of the Company, has never been convicted of any offencewithin the past ten (10) years other than traffic offences, if any, anddoes not have any conflict of interest with the Company.

Tan Sri Abd Rahman attended one (1) Board Meeting of the Companyduring the financial year ended 31 December 2013 since hisappointment on 12 December 2013.

PROFILE OF THE BOARD OF DIRECTORS

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DATUK SAMSUL HUSINExecutive Deputy Chairman

Datuk Samsul Husin, aged 51, Malaysian, was appointed as a Non-Independent Non-Executive Director of the Company on 12 November 2013. He was named Acting Group ManagingDirector/Group Chief Executive Officer on 28 November 2013 andthereafter re-designated and appointed as Executive DeputyChairman effective 16 December 2013. He is also member of theBoard Procurement and Tender Committee of the Company.

Datuk Samsul graduated with a Bachelor of Accounting fromUniversiti Kebangsaan Malaysia and is a Chartered Accountant andCertified Financial Planner. He has more than 20 years of experiencein accounting and ICT, specialising in financial systems, systemplanning and designing. He started his career in 1986 with SelangorState Secretary Housing Division. Thereafter, he joined MalaysianEntrepreneur Development Centre (MEDEC), Universiti TeknologiMARA (UiTM) as a lecturer.

In 1987, Datuk Samsul joined the Accountant General’s office andheld various positions and spearheaded projects such as theenforcement of accounting procedures to the designing of newsystems for the enhancement of existing financial managementreporting. He then joined the private sector to hold positions infinancial-cum-portfolio management arena before joining CenturySoftware (Malaysia) Sdn Bhd, a wholly owned subsidiary of CensofHoldings Berhad. Datuk Samsul sits on the Board of Censof HoldingsBerhad.

Datuk Samsul has no family relationship with any Director and/ormajor shareholder of the Company, has never been convicted of anyoffence within the past ten (10) years other than traffic offences, ifany, and does not have any conflict of interest with the Company.

Datuk Samsul attended two (2) Board Meetings of the Companyduring the financial year ended 31 December 2013 since hisappointment on 12 November 2013.

WONG KAM YINExecutive Director

Wong Kam Yin, aged 44, Malaysian, was appointed as an ExecutiveDirector of TIME Engineering Berhad on 12 December 2013. Hegraduated from Monash University, Melbourne, Australia with aBachelor of Economics (Accounting and Computer Science).

He started his career with Arthur Andersen Tax Services, aninternational accounting firm in the area of taxation before moving onto investment banking and securities, where he served as InvestmentAnalyst. In 2002, seeing vast opportunities in the IT industry, heventured into the business as a technopreneur and eventually via amerger, his company became part of Main Market-listed CensofHoldings Berhad.

His broad, in-depth and diversified business knowledge has providedhim with sound understanding of both large public-listed companiesand small and medium enterprises. He also has business ventures inJapan in the area of building maintenance, and tax consulting/trainingbusiness in Malaysia.


Wong attended one (1) Board Meeting of the Company during thefinancial year ended 31 December 2013 since his appointment on12 December 2013.


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ROSLI ABDULLAH Independent Non-Executive Director

Rosli Abdullah, aged 60, Malaysian, was appointed as anIndependent Non-Executive Director of TIME Engineering Berhad on12 December 2013. He is also Chairman of the Audit Committee andmember of the Nomination and Remuneration Committee of theCompany.

He holds a Master’s degree in Business Administration from UniversitiKebangsaan Malaysia, and Post-Graduate Diploma in Accounting andBachelor in Economics (Honours) from University of Malaya. He isalso a Chartered Accountant and Member of Malaysian Institute ofAccountants (MIA).

He was the Registrar of MIA for 5 years until 2012, where he alsoserved as Chief Executive Officer. He has served in various capacitiesin the public sector as Chief Accountant of the Ministry of Works,Chief Accountant of the Ministry of Education, Chief Accountant ofthe Public Services Department (Pension Division), Secretary to theTeachers Provident Fund, the Bursar of Universiti Putra Malaysia andDirector of Corporate Services, Accountant General Department,Ministry of Finance Malaysia.

His experience in the private sector, meanwhile, includes his tenureas Financial Controller/General Manager Finance of Kuala LumpurInternational Airport Berhad and Senior General Manager of PutrajayaHoldings Sdn Bhd (a company under the Petronas group). He alsoserved as Adviser to the Economic Planning Unit of the PrimeMinister’s Department upon his retirement in 2008/2009.

He sits on the Boards of I-VCAP Management Sdn Bhd, BankPembangunan Malaysia Berhad, Keretapi Tanah Melayu Berhad,Malaysia Airports Holdings Berhad and CapitalMall REITManagement Sdn Bhd, the Manager of CapitaMalls MalaysiaRealEstate Trust.


Rosli attended one (1) Board Meeting of the Company during thefinancial year ended 31 December 2013 since his appointment on12 December 2013.

NORLILA HASSANIndependent Non-Executive Director

Norlila Hassan, aged 51, Malaysian, was appointed as IndependentNon-Executive Director of TIME Engineering Berhad on 12 December 2013 and is Chairperson of the Nomination andRemuneration Committee and member of the Audit Committee of theCompany.

She has a Master in Accounting from St. Louis University, Missouri,and holds a Bachelor of Science in Accounting from Indiana StateUniversity, Indiana, the United States of America.

She has more than 25 years of experience in Accounting and FinancialManagement and Operations. She had served as Financial Controllerwith ON Semiconductor Malaysia Sdn Bhd and ON SemiconductorThailand Co. Ltd. where she was responsible for Corporate Finance,General Accounting, Financial Analysis and Internal Controls. She wasalso responsible in managing ON Semiconductor Global CostAccounting team and the Asian External Manufacturing Finance Team,in charge of the Subcontract houses in Asia.

During her tenure with ON Semiconductor, she served in variouspositions in the company including the Malaysian Compliance andEthics Liaison for ON Semiconductor where the major focus wasensuring Compliance Code of Business Conduct and Ethics, and SOX(Sarbanes-Oxley Act) Compliance for the Malaysian and Thailandentities.

Norlila is also author of several white papers for the company on costcompetitiveness: Possibility of setting up GDC in Malaysia vsSingapore, Night Trucking for product shipment to improve cycle timeand the study on cost effectiveness through 4Crew3shift vs3Crew2shifts.

She has no family relationship with any Director and/or majorshareholder of the Company, has never been convicted of any offencewithin the past ten (10) years other than traffic offences, if any, anddoes not have any conflict of interest with the Company.

Norlila attended one (1) Board Meeting of the Company during thefinancial year ended 31 December 2013 since her appointment on 12 December 2013.

PROFILE OF THE BOARD OF DIRECTORS(continued)

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DATO’ ARIF AMBROSE LEONARD NGIndependent Non-Executive Director

Dato’ Arif Ambrose Leonard Ng, aged 45, Malaysian, was appointedas an Independent Non-Executive Director of TIME EngineeringBerhad on 12 December 2013 and he is Alternate Chairman of theBoard Procurement and Tender Committee.

He holds a Bachelor of Commerce from University of WesternAustralia. He is a Chartered Accountant, Fellow Member of CertifiedPractising Accountants (CPA) Australia and Member of the MalaysianInstitute of Accountants (MIA).

He is currently Managing Director of the Dalta Group of Companieswith diversified businesses in such sectors as property development,construction, hotel management, manufacturing of precision plasticparts and plastic injection moulding, plantations and agriculture, golfclub management and manufacturing and distribution of automotiveparts. The Dalta Group has two (2) Main-Market listed companiesnamely, A & M Realty Berhad and Hil Industries Berhad.

Dato’ Arif Ambrose is also Managing Director of A & M Realty Berhad,and has a wealth of experience in the property and constructionindustry, having hands-on involvement in management, operationsas well as financial and project management. He also serves as ChiefExecutive Officer of the Hospitality (Hotel & Golf) Division comprisingthe Bukit Kemuning Golf & Country Resort, Puteri Resort Ayer KerohMelaka, Puteri Garden Hotel, Klang and the newly acclaimedAmverton Cove Golf & Island Resort, Pulau Carey; and ManagingDirector of Kekal Pahlawan Sdn Bhd, a security protection servicesprovider. He also sits on the Boards of various companies.


Dato’ Arif Ambrose attended one (1) Board Meeting of the Companyduring the financial year ended 31 December 2013 since hisappointment on 12 December 2013.

DATO’ ZAINUL AZMAN DATO’ ZAINUL AZIZNon-Independent Non-Executive Director

Dato’ Zainul Azman Dato’ Zainul Aziz, aged 60, Malaysian, wasappointed as a Non-Independent Non-Executive Director of theCompany on 18 November 2013. He is also Chairman of the BoardProcurement and Tender Committee of the Company and member ofthe Nomination and Remuneration Committee.

Dato’ Zainul Azman graduated with a Degree in Mass Communicationfrom Universiti Teknologi MARA and he has also completed variousmanagement courses locally and abroad including the ManagementDevelopment Programme at the Asian Institute of Management inManila.

He had earlier served a foreign multinational organisation dealing withthe importation and distribution of various consumer goods rangingfrom automobiles, electrical, software and other consumer durablegoods. During this tenure, he was General Manager in one of itssubsidiaries.

After 16 years with the multinational organisation, Dato’ Zainul Azmanresigned from the private sector to become an entrepreneur dealingin consumer durables. He is currently the Chairman of Tabung HajiTravel & Services Sdn Bhd and a member of the Board of Directorsof Tabung Haji Hotel & Residence Sdn Bhd.


Dato’ Zainul Azman attended two (2) Board Meetings of the Companyduring the financial year ended 31 December 2013 since hisappointment on 18 November 2013.


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ANG HSIN HSIENNon-Independent Non-Executive Director

Ang Hsin Hsien, aged 46, Malaysian, was appointed as a Non-Independent Non-Executive Director of TIME EngineeringBerhad on 12 December 2013 and is member of the Audit Committeeand the Board Procurement and Tender Committee of the Company.

She holds a Bachelor of Business (Finance) from Curtin University ofTechnology, Western Australia and has more than 20 years ofexperience in business and the IT industry. She plays a role in theformulation and implementation of the Company’s goals which in linewith resource and assessment of the market situation. Her experiencebrings significant foresight to the Company’s strategic direction.

Ang currently heads the Group Business Development of CensofHoldings Berhad where she serves as Executive Director. She isresponsible in developing new business opportunities and identifyingpotential markets, developing policies and plans designed to achievethe Company’s objectives. Ang is hands-on in her undertaking andbelieves that strategic management is dynamic in nature, where sheplays the mentor to the Management team.

She has no family relationship with any Director and/or majorshareholder of the Company, has never been convicted of any offencewithin the past ten (10) years other than traffic offences, if any, anddoes not have any conflict of interest with the Company.

Ang attended one (1) Board Meeting of the Company during thefinancial year ended 31 December 2013 since her appointment on 12 December 2013.

PROFILE OF THE BOARD OF DIRECTORS(continued)

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CHAIRMAN’S STATEMENT

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“2013 was a year with

major milestones for TEB,

with performance records

set in several key areas.

Strategic repositioning

efforts are delivering value

to our customers and

shareholders.”

TO OUR SHAREHOLDERS,

On behalf of the Board of Directors, it is my pleasure to present the Annual Reportand Audited Financial Statements of TIME Engineering Berhad (“TEB”) and itsGroup of Companies for the financial year ended 31 December 2013.


2013 IN REVIEWFor the year 2013, the Company’s revenue stood at RM85.8 million,down from RM144.6 million recorded in the preceding year. Thisdecrease is mainly attributed to the completion of deployment worksrelated to the supply, delivery, installation, testing, commission ofICT equipment and their subsequent usage support to localpolytechnics and community colleges.

On the same front, sales in 2013 is significantly credited to therecurring revenue from operations of the National Single Window(“NSW”) services. Just on its own, the NSW services recorded 12 percent growth in sales compared with 2012 sales of RM62.7 million, in reflection of higher trade volume as well as themandated use of the electronic Preferential Certificate of Originservice by the Ministry of International Trade and Industry.

2013 was also a year of major milestones for TEB, with performancerecords set in several key areas. Strategic repositioning efforts aredelivering value to our customers and shareholders. Our operatingprofit margin improved significantly in 2013, recording earningsbefore interests, taxes, depreciation and amortisation (EBITDA) andlegal provisions and impairment loss of plant and equipment atRM33.1 million compared to RM15.0 million in the preceding year.Prudent spending and doing more with less continues to be amongour highest priorities. In our pursuit to increase the organisationalefficiency, we have also improved the overall operationaleffectiveness resulting in cost savings of RM12.2 million. With suchsavings, we invested in internal growth and developmentprogrammes to provide long-term, consistent, value creating returnsto shareholders.

With this, the Company improved its loss-making position atRM3.17 million in the preceding year, recording net loss ofRM21,000 for the year under review. Notwithstanding this, theimprovement is significant in substance. Despite its considerableEBITDA improvements, the Company had accommodated nonoperations-related costs comprising RM12.8 million from assetimpairment at its Integrated Enterprise Centre, and settlementresulting from a legal claim made against a subsidiary company.

In view of the Company’s net loss position and bearing in mind thatthe Company would need to conserve cash for its future growth,and in anticipation of the expiry of the exclusive agreement tooperate the National Single Window (“NSW”), the Board does notrecommend the payment of any dividend for the financial yearended 31 December 2013.

CORPORATEDEVELOPMENTS

Khazanah Nasional Berhad (“Khazanah”), previously the largestinstitutional shareholder of TEB with a 45.03% stakehold,completed its plan to divest its entire interest in the Company to aqualified Bumiputera entrepreneur.

Censof Holdings Berhad (“Censof”) emerged as the successfulbuyer of Khazanah’s shares in TEB, which was purchased at a priceof RM69.82 million or 20 sen a share. The sale and purchasetransaction completed on 27 November 2013 and Censof is nowthe new controlling shareholder in TEB.

Resulting from this, the Board composition was transformed andthe Company welcomed Datuk Samsul Husin as Executive DeputyChairman. In this capacity, Datuk Samsul leads the day-to-dayoperations of the Company, particularly, to navigate businessdirection and organisational excellence.

BUSINESS OUTLOOKTo achieve year-after-year success, TEB’s long-term strategic focusis driven by our pursuit to broaden current offerings of Customs-related e-commerce services for Trade Facilitation to cover the entirespectrum of the trade facilitation sector as an end-to-end e-commerce solutionist to the sector’s business requirements,covering the B2B value chain.

TEB’s measurements of success in creating and delivering valuewill be based on three fundamental pillars:

Maintaining our edge throughtechnology leadership is at thecore of how TEB does business.We work to develop business-efficient products, and we plan

to do this consistently. We shall invest in new product developmentand technological innovation to drive growth and deliver solutions toour customers. We look for big opportunities, and we do it with asense of purpose. We don't do it alone; we listen to the challengesof our customers and develop solutions that add value to theirbusinesses.

CHAIRMAN’S STATEMENT

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TECHNOLOGYLEADERSHIP

CHAIRMAN’S STATEMENT(continued)

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Strong business platforms helpus accelerate growth and createvalue for our shareholders. Thestrategic process through whichwe shape our portfolio ofbusinesses is vital to ourcompetitive longevity. We shall

strategically invest in businesses with high rates of return andgrowth profiles to provide superior long-term returns for ourshareholders. We will maintain a dynamic process for augmentingexisting businesses through acquisitions of strategic technologiesand market positions, which shall enable us to offer a morecomprehensive range of solutions to our customers – while at thesame time generating attractive returns.

Discipline and provenmanagement processes willimprove how we operate. We willcontinuously challengeourselves in all areas of thebusiness to execute moreefficiently and exceedexpectations of our customersand shareholders. Whether it is

investing in growth and technology or repositioning assets morecompetitively, we shall manage the business in a dynamic way todrive higher levels of return on total capital.

At TEB, business efficiency means consistently improving tradeworking capital through optimised asset utilisation, generatingstrong operating cash flow and managing capital expendituresopportunistically. Our goal is to maintain a healthy, strong balancesheet and the flexibility to invest in growth throughout economiccycles.

In 2014 we will be working towards securing an extension of thecurrent exclusive agreement with the Malaysian Government asservice provider of the National Single Window, which expires inSeptember 2014.

We are also optimistic of the synergistic opportunities that Censofand its group of companies present; the acquisition of TEB isexpected to further augment our market leadership within the TradeFacilitation sector in the country and soon, in the region. It isenvisaged that our customers are set to benefit from serviceofferings built on Censof’s capabilities, particularly, its paymentgateway services, and Censof’s pure-play financial managementsoftware solutions; and shall in turn, diversify and expand TEB’srevenue stream.

We will also continue to efficiently restructure and reposition TEB,as we identify value-creating opportunities. The Board and theLeadership Team is focused on both the near and long term,ensuring that TEB is an even stronger and better company whenwe turn it over to the next generation.

Operating with high ethical standards and uncompromised integrityis core to our values. We aim not to just deliver improving results –we want to do it the right way, which is in the best interests of ourcustomers, employees, communities and shareholders.

ACKNOWLEDGEMENTSOn behalf of the Company, I would like to thank our shareholders,customers, business associates, financiers, the SecuritiesCommission, the Malaysian Government, particularly the Ministryof Finance, Ministry of International Trade & Industry, the RoyalMalaysian Customs and other regulatory bodies and agencies fortheir continued support. Special thanks go to the ExecutiveCommittee which was in place and previous Members of the Boardfor their leadership and guidance to implement continued measuresfor the Company’s improvements.

Remarkable talent continues to be the hallmark of the Company.My appreciation also goes to my fellow Directors, and especially tothe Management and staff of TEB Group for their commitment anddedication throughout the year.

Thank you.

TAN SRI ABD RAHMAN MAMATChairman31 March 2014

STRENGTHENBUSINESSPLATFORMS

DRIVEBUSINESSEFFICIENCY

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FINANCIAL RESULTSAND ITS RELATED

MATTERS

Announcement of the Quarterly FinancialResults of TEB Group for the fourth quarterand year ended 31 December 2012 andrecommendation of Final Gross Dividend of 4 sen less 25% tax (net dividend of 3 sen) perordinary share of RM0.20 each for thefinancial year ended 31 December 2012.

Submission of the Audited Financial Resultsof the Company and the Group for the yearended 31 December 2012.

Announcement of the Unaudited FinancialResults of TEB Group for the first quarterended 31 March 2013.

Announcement of the Unaudited FinancialResults of TEB Group for the second quarterended 30 June 2013.

Announcement of the Unaudited FinancialResults of TEB Group for the third quarterended 30 September 2013.

Announcement of the Quarterly FinancialResults of TEB Group for the fourth quarterand year ended 31 December 2013.

Submission of the Audited Financial Resultsof the Company and the Group for the yearended 31 December 2013.

28FEBRUARY

2013

06MARCH2013

23MAY2013

12JULY2013

26NOVEMBER

2013

GENERALANNOUNCEMENT

Announcement of Notice of 43rd AnnualGeneral Meeting (“AGM”) of the Companyand Notice of Dividend Entitlement andPayment. The Final Dividend was paid on 12 July 2013.

Announcement on outcome of the 43rd AGMheld on 19 June 2013. All the resolutions asset out in the Notice of 43rd AGM of TEB dated23 May 2013 were duly passed by theshareholders at the 43rd AGM.

Announcement on proposed acquisition byCensof Holdings Berhad (“Censof”) of349,112,731 ordinary shares of RM0.20 eachin TEB, representing 45.03% equity interestin TEB from Khazanah Nasional Berhad(“Proposed Acquisition”); and (ii) ProposedMandatory Take-Over Offer by Censof for theentire equity interest in TEB not already ownedby Censof and persons acting in concert withit subsequent to the Proposed Acquisition.

Announcement on the receipt of the Notice of Conditional Take-Over Offer dated 9 October 2013 from RHB Investment BankBerhad on behalf of Censof.

Announcement on the receipt of the PressNotice dated 20 November 2013 from RHBInvestment Bank Berhad, on behalf ofCensof, in relation to the level of acceptancesof the Conditional Take-Over Offer as at theclosing date at 5.00 p.m. (Malaysian time) onWednesday, 20 November 2013.

Announcement on the proposed change ofcompany name from TIME EngineeringBerhad to Dagang NeXchange Berhad,subject to the approval of the shareholders ofthe Company at the 44th AGM.

07MARCH2014

22MAY2013

19JUNE2013

21NOVEMBER

2013

26MARCH2014

25FEBRUARY

2014

12SEPTEMBER

2013

10OCTOBER

2013

FINANCIAL DIARY/CORPORATE ANNOUNCEMENTSDuring the Financial Year 2013 and up to 31 March 2014

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CHANGES IN CORPORATEINFORMATION

Announcement on the Notice of Interest ofSubstantial Shareholder pursuant to the Form29A dated 19 September 2013 received fromCensof.

Announcement on the change in substantialshareholder’s interest of Khazanah NasionalBerhad (“Khazanah”) following the disposalof 178,956,773 ordinary shares of RM0.20each in TEB by Khazanah to Censof on 11 October 2013.

Announcement on the change in substantialshareholder’s interest of Censof following theacquisition of 178,956,773 ordinary shares ofRM0.20 each in TEB from Khazanah on 11 October 2013.

Announcement on the appointment of DatukSamsul Husin as Non-Independent Non-Executive Director of the Companyeffective 12 November 2013.

Announcement on the appointment of DatukSamsul Husin as member of the ExecutiveCommittee (“EXCO”) on 12 November 2013and that Dato’ Mohd Izzaddin Idris hadrelinquished his role as a member of theEXCO due to his other work relatedcommitments and responsibilities.

Announcement on the appointment of Dato’Zainul Azman Dato’ Zainul Aziz as Non-Independent Non-Executive Director ofthe Company effective 18 November 2013.

Announcement on Khazanah ceasing to be asubstantial shareholder of the Companyeffective 27 November 2013.

Announcement on the changes in thecomposition of the Board of Directors andBoard Committees of TEB following thechange in the registered substantialshareholder of TEB, as follows:-

(i) Re-designation of Datuk Samsul Husinfrom Non-Independent Non-ExecutiveDirector to Acting Group ManagingDirector/Group Chief Executive Officer ofTEB effective 28 November 2013;

(ii) Resignations of Khazanah NomineeDirectors, namely, Zaiviji Ismail Abdullah,Dato’ Mohd Izzaddin Idris and ElakumariKantilal as Non-Independent Non-Executive Directors of TEB effective 28 November 2013. Consequent thereto,Zaiviji Ismail Abdullah resigned asChairman of the EXCO and member ofthe Nomination and RemunerationCommittee (“NRC”) of TEB whilstElakumari Kantilal resigned as member ofthe EXCO and the Audit Committee ofTEB effective 28 November 2013; and

(iii) Dissolution of EXCO effective 28 November 2013.

Announcement on the change in substantialshareholder’s interest of Censof following theacquisition of 170,155,958 ordinary shares ofRM0.20 each in TEB from Khazanah on 27 November 2013.

13NOVEMBER

2013

13NOVEMBER

2013

19SEPTEMBER

2013

11OCTOBER

2013

18OCTOBER

2013

FINANCIAL DIARY/CORPORATE ANNOUNCEMENTS

During the Financial Year 2013 and up to 31 March 2014 (continued)

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18NOVEMBER

2013

28NOVEMBER

2013

28NOVEMBER

2013

29NOVEMBER

2013

Announcements on the following:-

(i) Change in substantial shareholder’sinterest of Datuk Samsul Husin pursuantto the Form 29B dated 4 December2013; and

(ii) Change in director’s interest of DatukSamsul Husin pursuant to the notice inwriting under Section 135 of theCompanies Act 1965.

Announcements on the followingappointments to the Board of TEB effective12 December 2013:-

(i) Appointments of Tan Sri Abd RahmanMamat, Dato’ Arif Ambrose Leonard Ng,Rosli Abdullah and Norlila Hassan as Independent Non-Executive Directors;

(ii) Appointment of Ang Hsin Hsien as Non-Independent Non-ExecutiveDirector; and

(iii) Appointment of Wong Kam Yin asExecutive Director.

Announcements on the following changes inthe composition of the Board of Directors andBoard Committees of TEB effective 16 December 2013:-

(i) Resignations of Datuk Haji Mohd KhalilDato’ Haji Mohd Noor, Abdullah Yusofand Rosnah Kamarul Zaman from theBoard and Board Committees of TEB;

(ii) Appointment of Tan Sri Abd RahmanMamat as Chairman of TEB;

(iii) Re-designation of Datuk Samsul Husinfrom Acting Group ManagingDirector/Group Chief Executive Officer toExecutive Deputy Chairman of TEB; and

(iv) Formation of Board Procurement andTender Committee comprising Dato’Zainul Azman Dato’ Zainul Aziz asChairman and his alternate, Dato’ ArifAmbrose Leonard Ng; and Datuk SamsulHusin and Ang Hsin Hsien as members.

Announcements on the following changes inthe Audit Committee effective 16 December2013:-

(i) Appointment of Rosli Abdullah asChairman;

(ii) Norlila Hassan as member; and

(iii) Ang Hsin Hsien as member.

Announcement on the resignation of SapiahJamaludin as Joint Secretary of the Companyeffective 23 December 2013.

Announcement on the re-designation of LimKek Siang from Head of Finance of TEB to Chief Financial Officer effective 1 February 2014.

06DECEMBER

2013

16DECEMBER

2013

12DECEMBER

2013

23DECEMBER

2013

16DECEMBER

2013

30JANUARY

2014

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FINANCIAL DIARY/CORPORATE ANNOUNCEMENTSDuring the Financial Year 2013 and up to 31 March 2014 (continued)

The Board of Directors of the Company (“the Board”) is pleased to report on the manner the Group has applied the principles of corporategovernance and the extent of compliance with the relevant Principles and Recommendations by the Malaysian Code on Corporate Governance2012 (“MCCG 2012”) and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) during the financialyear ended 31 December 2013 and up to the date of this Statement:-

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

Clear Functions of the Board and Management

The Board is responsible for oversight and overall management of the Group. To ensure the effective discharge of its functions andresponsibilities, the Board has established a Discretionary Authority Limits (“DAL”) Model for the Group where specific functions are delegatedto the relevant Board Committees and the Management. In this regard, the Management is guided by the approved limits of authority as setout in the DAL in carrying out its duties.

Clear Roles and Responsibilities

The Board reserves a formal schedule of matters for its decision which are set out in the Board Charter to ensure that the direction and controlof the Group is firmly adhered to. The principal responsibilities of the Board include amongst others, strategic and oversight responsibilities,identification of risks, implementation of appropriate internal control systems, succession planning and effective communication withstakeholders.

The Board practices a clear division of responsibilities between the Chairman, Executive Deputy Chairman, Executive Director and Non-Executive Directors. The Chairman is responsible for ensuring the effectiveness and conduct of the Board as well as assuming the formalrole as the leader in chairing all Board meetings and shareholders’ meetings. The Executive Deputy Chairman’s role is to assist the Chairmanin carrying out his responsibilities whilst the Executive Director has overall responsibility over the business units and day-to-day managementof the Company, organisational effectiveness and implementation of Board policies, strategies and decisions.

Non-Executive Directors play a key supporting role, contributing their skills, expertise and knowledge towards the formulation of the Group’sstrategic and corporate objectives, policies and decisions.

Strategies Promoting Sustainability

Sustainability has long been a key driving force in the Group’s corporate agenda, ever since the emergence of corporate responsibility in theearly 2000s. It is the foundation of the Group’s commitment as a responsible corporate citizen in ensuring the sustainable growth of itsprofits (a commitment to its shareholders), the sustenance of the planet (a commitment to the environment and community), and thesustainable development of its people (a commitment to nurture TEB’s talented employees and those within the community it operates).

Through its subsidiary, Dagang Net Technologies Sdn Bhd, TEB is a corporate contributor to the Lembaga Zakat Wilayah Persekutuan. Thealms-giving Zakat is intended to assist eligible recipients with financial assistance to help cope with unfortunate situations such as naturaldisasters; and poverty, especially one that hinders access to formal education and health service. When donating money is not an option,the Management encourages employees to donate their time, which in turn entrenches the spirit of volunteerism within the organisationalculture.

Access to Information and Advice

The Directors are familiar and aware of their duties and responsibilities as well as the implementation of good corporate governance andcompliance practices in the Group.

The Board Members are supplied with the relevant information on a timely basis to enable them to effectively discharge their duties andresponsibilities. Board papers were circulated to the Board Members at least three (3) working days prior to the date of the meeting tofacilitate the Directors to peruse the board papers and to review the issues to be deliberated at the Board Meeting. Where necessary, relevantsenior management and personnel are invited to attend Board meetings to furnish details or clarifications on matters tabled for the Board’sconsideration.

CORPORATE GOVERNANCESTATEMENT

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CORPORATE GOVERNANCESTATEMENT (continued)

All Directors have unrestricted access to the Group and Company’s senior management and the services of a qualified company secretaryto enable them to discharge their duties effectively. The Directors were kept informed on a quarterly basis on the restriction in dealing withthe securities of the Company during the closed period and the internal process for compliance when dealing in securities within and outsidethe closed period as set out in Chapter 14 of the Main Market Listing Requirements. In addition, the Directors were given the updates issuedby the various regulatory bodies and authorities which may affect the Group and the Company.

In furtherance of their duties, the Directors may, whether collectively as a Board or in their individual capacities, seek independentprofessional advice on specific matters, at the Company’s expense.

Board Charter

A revised Board Charter was formalised on 25 March 2014. The Board Charter sets out amongst others, the roles and responsibilities of theBoard. The Board Charter shall be periodically reviewed and published on the Company’s corporate website www.teb.com.my.

2. STRENGTHEN COMPOSITION

The Board currently has eight (8) members comprising four (4) Independent Non-Executive Directors including the Chairman, two (2) Non-Independent Non-Executive Directors, one (1) Executive Deputy Chairman and one (1) Executive Director. The Company has complied withParagraph 15.02(1) of the Main Market Listing Requirements of Bursa Securities whereby at least two (2) directors or one-third (1/3) of theBoard, whichever is higher, are Independent Directors. The profile of each Director is set out on pages 10 to 14 of this Annual Report.

The Board has delegated specific responsibilities to the Board Committees namely the Nomination and Remuneration Committee, the AuditCommittee and recently the Board Procurement and Tender Committee. Each committee operates under their respective approved termsof reference. The Board Committees will observe the same rules of conduct and procedures as the Board, unless otherwise determined bythe Board.

On 28 November 2013, the Company announced the re-designation of Datuk Samsul Husin from Non-Independent Non-Executive Directorto Acting Group Managing Director/Group Chief Executive Officer of TEB. With that, the interim Executive Committee which was establishedon 28 November 2012 to oversee the day-to-day operations and management of the Company was dissolved effective 28 November 2013.Subsequently, Datuk Samsul Husin was re-designated and appointed as Executive Deputy Chairman effective 16 December 2013.

Nomination and Remuneration Committee (“NRC”)

All Board appointments were approved by the Board upon recommendation by the NRC. The Board, through the NRC, has established aformal and transparent procedure in relation to the assessment of candidates for Board appointments as well as assessing the effectivenessof the Board as a whole, the Committees of the Board and the contributions of each individual Director.

The NRC’s responsibilities include, amongst others, reviewing the Board composition and making recommendations to the Board forappointments of new Directors by evaluating and assessing the suitability of candidates as Board members and Board Committee members.In making these recommendations, due consideration is given to the required mix of skills, knowledge, expertise and experience,professionalism and integrity that the proposed Directors shall bring to the Board as well as gender diversity.

The NRC meets as and when required. There were five (5) meetings held during the financial year 2013. During the financial year, the NRChad undertaken the following activities:-

(i) Annual performance evaluation of the Board and the Board Committees;(ii) Review of candidates proposed for appointment as Directors following the change in the registered substantial shareholder of TEB; and(iii) Review of candidates proposed for appointment as Executive Director and Independent Non-Executive Directors of the Company.

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Currently, the NRC comprises entirely of Non-Executive Directors with the majority being Independent Non-Executive Directors. Thecomposition of the NRC is as follows:-

Chairperson : Norlila Hassan(Independent Non-Executive Director)

Members : Rosli Abdullah(Independent Non-Executive Director)

: Dato’ Zainul Azman Dato’ Zainul Aziz(Non-Independent Non-Executive Director)

Audit Committee

The Audit Committee Report is set out on pages 32 to 35 of this Annual Report.

Board Procurement and Tender Committee (“BPTC”)

The BPTC was established on 16 December 2013 to oversee the procurement process and contract management of the Group. No meetingwas held during the financial year.

The composition of the BPTC is as follows:-

Chairman : Dato’ Zainul Azman Dato’ Zainul Aziz(Non-Independent Non-Executive Director)

Alternate Chairman : Dato’ Arif Ambrose Leonard Ng(Independent Non-Executive Director)

Members : Datuk Samsul Husin(Executive Deputy Chairman)Ang Hsin Hsien(Non-Independent Non-Executive Director)

Directors’ Remuneration

Non-Executive Directors are paid annual fees in consideration of their service as members of the Board and the Audit Committee. In addition,the Non-Executive Directors are paid attendance allowance for each Board meeting and Board Committee meeting. The Non-ExecutiveDirectors including the Non-Executive Chairman are also entitled to medical and hospitalisation coverage.

At last year’s Annual General Meeting, the shareholders approved that the Directors’ Fees at the existing fees structure for the financial yearending 31 December 2013 be paid on a quarterly basis after the end of each quarter. The Directors’ Fees which amounted to RM904,415.47were paid to the Non-Executive Directors who served on the Board according to their tenure of office during the financial year 2013. Detailsare shown in the table below.

Directors’ Fees Other Emoluments Benefits in kind Total Remuneration(RM) (RM) (RM) (RM)

Non-Executive Directors 363,415.47 541,000.00 - 904,415.47


(continued)

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The number of Directors of the Company who served during the financial year ended 31 December 2013 and whose remuneration falls ineach successive band of RM50,000 are as follows:-

Range of Remuneration Executive Non-Executive

RM50,000 and below 2 7

RM50,001 to RM100,000 - 3

RM100,001 to RM150,000 - 1

RM150,001 to RM200,000 - -

RM200,001 to RM250,000 - -

RM250,001 to RM300,000 - -

RM300,001 to RM350,000 - -

RM350,001 to RM400,000 - -

RM400,001 to RM450,000 - -

RM450,001 to RM500,000 - -

Above RM500,000 - 1

3. REINFORCE INDEPENDENCE

Annual Assessment of Independent Directors

The Board carries out an annual assessment of the independent directors with the aim of strengthening the role of independent directorsto facilitate independent and objective decision making in the Company, free from undue influence and bias.

Tenure of Independent Director

MCCG 2012 recommends that the tenure of an independent director should not exceed a cumulative term of nine (9) years. Upon completionof the nine (9) years, an independent director may continue to serve on the Board subject to his re-designation as a non-independentdirector.

During the financial year 2013, four (4) new Independent Non-Executive Directors were appointed to the Board.

As at the date of this Annual Report, none of the Independent Directors of the Company has served the Board for a cumulative term of nine(9) years.

Chairman to be a Non-Executive Director

MCCG 2012 recommends that the Chairman of the Board to be a non-executive member of the Board and in the event, the Chairman isnot an independent director, the Board must comprise a majority of independent directors. The Chairman of the Board is an IndependentNon-Executive Director.

(continued)

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4. FOSTER COMMITMENT

Time commitment

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directorsof the Company. The Board meets at least four (4) times a year. During the financial year, the Board met ten (10) times (including oneemergency board meeting and two special board meetings), all at the Boardroom on Level 9, Tower 3, Avenue 5, The Horizon, Bangsar South,No. 8 Jalan Kerinchi, Kuala Lumpur. The Board Committees also convened their respective meetings in accordance with their terms ofreference.

Details of the Board meetings and Board Committee meetings convened during the year and the attendance of the members were asfollows:-

Meeting ofName of Director Board Meeting Audit Committee Meeting of NRC Meeting of BPTC

Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor 10/10 5/5 5/5 N/A

Abdullah Yusof 8/10 5/5 3/5 N/A

Rosnah Kamarul Zaman 9/10 4/5 5/5 N/A

Dato’ Mohd Izzaddin Idris 8/9 N/A N/A N/A

Elakumari Kantilal 9/9 5/5 N/A N/A

Zaiviji Ismail Abdullah 9/9 N/A 3/3 N/A

Tan Sri Abd Rahman Mamat 1/1 N/A N/A N/A

Datuk Samsul Husin 2/2 N/A N/A -

Dato’ Zainul Azman Dato’ Zainul Aziz 2/2 N/A N/A -

Dato’ Arif Ambrose Leonard Ng 1/1 N/A N/A -

Rosli Abdullah 1/1 N/A N/A N/A

Norlila Hassan 1/1 N/A N/A N/A

Ang Hsin Hsien 1/1 N/A N/A -

Wong Kam Yin 1/1 N/A N/A N/A

Notes:-

• Attendance of Dato’ Mohd Izzaddin Idris at the Board meetings was until the date of his resignation on 28 November 2013.

• Attendance of Elakumari Kantilal at the meetings was until the date of her resignation on 28 November 2013.

• Attendance of Zaiviji Ismail Abdullah at the meetings was until the date of his resignation on 28 November 2013.

• Attendance of Tan Sri Abd Rahman Mamat at the Board Meeting was from the date of his appointment on 12 December 2013.

• Attendance of Datuk Samsul Husin at the Board Meetings was from the date of his appointment on 12 November 2013.

• Attendance of Dato’ Zainul Azman Dato’ Zainul Aziz at the Board Meetings was from the date of his appointment on 18 November 2013.

• Attendance of Dato’ Arif Ambrose Leonard Ng at the Board Meeting was from the date of his appointment on 12 December 2013.

• Attendance of Rosli Abdullah at the Board Meeting was from the date of his appointment on 12 December 2013.

• Attendance of Norlila Hassan at the Board Meeting was from the date of her appointment on 12 December 2013.

• Attendance of Ang Hsin Hsien at the Board Meeting was from the date of her appointment on 12 December 2013.

• Attendance of Wong Kam Yin at the Board Meeting was from the date of his appointment on 12 December 2013.

In between Board Meetings, approvals on matters requiring the sanction of the Board are sought by way of circular resolutions which containall relevant information to enable the Board to make informed decisions. All circular resolutions that are approved by the Board are tabledfor notation and confirmation at the subsequent Board Meetings.


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Directors’ Training

Directors keep themselves abreast with the latest regulatory and corporate governance developments, besides enhancing professionalismand knowledge to enable them to discharge their duties effectively.

All Directors had attended and completed the Mandatory Accreditation Programme (MAP) as required by the Main Market ListingRequirements of Bursa Securities.

For the financial year ended 31 December 2013, the Directors had attended training programmes, seminars and conferences organised bythe various training providers. The training programmes attended by the Directors are as follows:-

• Dialogue session on “The Revised Shariah Screening Methodology of Securities Commission” • Understanding the Governance Framework for Boardroom Excellence - MCCG 2012 & Amended Listing Requirements• Bursa Malaysia - Sustainability Training for Directors & Practitioners• National Conference on Services Sector - An Ecosystem Approach to Transforming the Malaysian Services Sector• Banking on ASEAN : Leveraging The Growth Potential• Global Trade Facilitation Conference 2013• The Malaysian Code on Corporate Governance 2012 and Statement on Risk Management• FIDE Elective Program - The Nomination/Remuneration Committee Program• Audit Committee Seminar 2013 organised by Malaysia Institute of Corporate Governance• 2013 Biz+ Seminar titled “Pursuing Quality Service, Innovation & Creativity”• Advocacy Session on Corporate Disclosure for Directors of Listed Issuers• Financial Literacy & Retirement Savings Seminar - Towards Securing a Comfortable Retirement• Personal Data Protection Act 2010• Top Ten Skills of The Super Sales Person and Climb Above The Competition• Forbes Forum – Asia’s Power Business Women; Workshop on Social Media for Investor Relations• Women’s Business Forum Networking Session with IBM• Strategic Enterprise Architecture and Transformation 2013• 4th Global Entrepreneurship Summit 2013 “Empowering and Connecting Entrepreneurs”

5. UPHOLD INTEGRITY IN FINANCIAL REPORTING

Compliance with Applicable Financial Reporting Standards

The financial statements of the Company and the Group were prepared in accordance with the Malaysian Financial Reporting Standards,International Financial Reporting Standards and the requirements of the Companies Act 1965.

The Board is responsible for the quality and completeness of publicly disclosed financial reports. This ensures that shareholders are providedwith a balanced and meaningful evaluation of the Company’s financial performance, its position and its future prospects, through theissuance of Annual Audited Financial Statements and quarterly financial reports and corporate announcements on significant developmentsaffecting the Company in accordance with the Main Market Listing Requirements of Bursa Securities.

The Board is committed to continuously provide and present a clear, balanced and comprehensive assessment of the Group’s financialperformance and prospects. In order to fulfill the commitments to stakeholders, the Company ensures that the recording and reporting offinancial and business information is as fair and accurate as determinable.

(continued)

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Statement of Directors’ Responsibility in respect of the preparation of the Audited Financial Statements

The Directors are responsible in ensuring that the Company and its subsidiaries maintain and properly keep their accounting records, theregister books and other statutory documents to enable the preparation of the Audited Financial Statements with reasonable accuracy incompliance with the provisions of the Companies Act, 1965.

The Directors also have a general responsibility to take steps to safeguard the assets of the Group and to prevent and detect fraud and otherirregularities.

The Statement of Directors’ Responsibility in respect of the preparation of the Annual Audited Financial Statements of the Group pursuantto Section 169 of the Companies Act, 1965 is set out on pages 44 to 47 of this Annual Report.

Relationship with Auditors

The Board maintains a transparent and professional relationship with the Company’s Auditors, both external and internal. The externalauditors, Messrs KPMG, provide an independent opinion, based on audit performed on the financial statements of the Group and reportthe same to the shareholders of the Company in accordance with Section 174 of the Companies Act 1965. The external auditors also attendeach AGM in order to assist in giving clarifications to shareholders on the audited financial statements.

The internal auditors attended the Audit Committee meetings of the Company held during the financial year.

6. RECOGNISE AND MANAGE RISKS

Statement on Risk Management and Internal Control

The Board acknowledges its responsibility for maintaining a sound system of internal control which provides reasonable assurance inensuring the effectiveness and efficiency of the Group’s operations and to safeguard shareholders’ investment and its assets and interestsin compliance with the relevant law and regulations as well as the Group’s internal financial administration procedures and guidelines.

The Statement on Risk Management and Internal Control furnished on pages 36 to 38 of this Annual Report provides an overview on thestate of internal controls and level of risks and the effectiveness of risk mitigation plans within TEB Group.

Internal Audit Function

The internal audit function is carried out by the Group Internal Audit of UEM Group Management Sdn Bhd (“UEM Group Internal Audit”)since 1 October 2008. UEM Group Internal Audit reports directly to the Audit Committee and assists the Audit Committee in discharging itsduties and responsibilities. Further details of the activities of the internal audit function are set out on page 35 of this Annual Report.

7. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

The Board is committed to use its best endeavour to provide accurate and complete information on a timely and even basis to enableshareholders to make informed investment decision.

The Company’s website is regularly updated and provides relevant information on the Company which is accessible to the public.


(continued)

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8. STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

The Board acknowledges the need for the Company’s shareholders and investors to be informed of all material business and corporatedevelopments concerning the Group in a timely manner. In accordance with the Policy on Investor Relations and Communication withShareholders, the Company publishes all material information as required by the regulators via the Bursa Malaysia link as well as otherpublications such as the annual report, quarterly financial reports and press announcements. In addition, the Company maintains regularand effective communication with its shareholders and stakeholders through attending to shareholders’ and investors’ emails and phone callsenquiries, Company General Meetings and other Company events. Another communication tool to reach shareholders and investors is viaour corporate website www.teb.com.my and with a direct link to a subsidiary’s website, Dagang Net Technologies Sdn Bhd atwww.dagangnet.com.

Pursuant to the amendments to the Company’s Articles of Association as approved by the shareholders at the 42nd AGM held on 2 May 2012,the Company had removed the limit on the number of proxies to be appointed by an exempt authorised nominee with shares in the Companyfor multiple beneficial owners in one securities account to allow greater participation of the beneficial owners of shares at general meetingsof the Company. To further promote participation through proxy(ies), a new Article 69A had been included in the Company’s Articles ofAssociation that confers a proxy the same rights as an individual member to speak at the meeting.

9. OTHER INFORMATION OF COMPLIANCE

Non-Audit Fees

Non-Audit fees of RM22,000.00 paid to the external auditors, Messrs. KPMG relate to the review of the Statement on Risk Management andInternal Control and the Supplementary Information on the breakdown of realised and unrealised profits or losses of the Group and theCompany as of 31 December 2013 pursuant to the directive issued by Bursa Securities on 25 March 2010 and 20 December 2010.

Sanctions and/or Penalties

The Company and its subsidiaries, Directors and the Management have not been imposed with any sanctions and/or penalties by therelevant regulatory bodies during the financial year ended 31 December 2013.

Recurrent Related Party Transactions

During the financial year 2013, the Company did not enter into any recurrent related party transaction that requires the shareholders’mandate.

Material Contracts involving Directors and Major Shareholders

Save as disclosed in the Audited Financial Statements for the year ended 31 December 2013, none of the Directors and major shareholdershas any material contract with the Company and/or its subsidiaries during the financial year under review.

Dealing in Securities

The Company has in place the Guidelines for Dealings in Securities for Directors and Principal Officers which sets out the internal processfor compliance by Directors and Principal Officers when dealing in securities during and outside the closed periods, in accordance with therelevant provisions of the Main Market Listing Requirements of Bursa Securities.

COMPLIANCE STATEMENT

The Board is committed to achieving a high standard of Corporate Governance throughout the organisation and would endeavour to apply therecommendations of the MCCG 2012.

This Statement on Corporate Governance has been approved by the Board of TEB on 25 March 2014.

(continued)

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To be exemplary corporate citizens, we strive for leadership byaddressing the areas most critical to our stakeholders and our business.

ENVIRONMENTAL SUSTAINABILITY

At TEB, we are committed to environmental sustainability with carefullyconsidered goals, programmes and partners. We respond to pressingissues, such as mitigating climate change by pioneering paperless tradefacilitation in Malaysia. Our efforts in promoting e-commerce since1995 has not only impacted organisations operationally, but alsomaking them function in an environmental-friendly manner.

We manage our facilities and conduct our business activities tominimise environmental impacts and promote the welfare and safety ofour employees and clients. Along this line, green initiatives are adoptedto increase energy efficiencies and in the long-run reduce operationalburden.

In the year under review, we continue to run internal campaigns toencourage environmental sensitivity– small steps, which go a long wayin our commitment to decrease our carbon footprint and save money.

NURTURING TALENT

TEB believes in inspiring employees who feel that their work is morethan just a job. We depend on the ideas, energy, and commitment ofour people, and we continue to focus our efforts on building anengaged, talented, and motivated workforce that will contribute to ourongoing success.

From diverse backgrounds, our employees bring with them a richvariety of skills and experiences encompassing engineering, sales andbusiness support. We support their safety, health, and wellbeing, andprovide programmes to help them balance work and personalcommitments. By doing this, we change the way our business works,and connect communities to transform how they live, play and learn.

In 2013, to sustain our competitive advantage, we strengthened ourculture and organisational capabilities with effective performancemanagement, which forms as basis of an objective and optimalremuneration mechanism. This is indeed an important pull factor forthe Group to retain and attract the right talent to achieve its businessobjectives.

In addition to that, human capital is a key area where we are able tocare, share and reach future generations. We believe nurturing talentedindividuals is equally as important as empowering young Malaysiansby providing the right tools and opportunities to soar to realise theirpotential. In the year under review, the Group extended contributionsfrom its business zakat in the sum of RM66,504 to nine educationalinstitutions to enable underprivileged children to gain fair access toeducation and maximise their growth potential.

Waste ReductionReduced stationery consumption; defaultprinting configuration to reduce tonnage ofpaper use and toner wastages

Operational MigrationUtilisation of electronic cards for festivegreetings; minimising travel for meetings andleveraging on email and teleconfecencing asmode of communication; utilising green bagsand recycling bins

Reduce, Reuse and RecycleRecycling non-hazardous waste like paper,newspaper and magazines. When disposal isnecessary, waste is managed in anenvironmentally responsible manner, atconvenient recyling points within our buildings

CORPORATE SOCIAL RESPONSIBILITY

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Working TogetherEmbedding a collaborative

working culture

An Open and Diverse CultureEngaging our employees and

promoting diversity and inclusion

Learning & GrowthRealising the potential of our

employees through developmentand training opportunities

Rewarding Our PeopleRewarding employees through

competitive, performance-basedcompensation and benefits

AUDIT COMMITTEE REPORT

The Audit Committee is pleased to present its report for the financial year ended 31 December 2013.

1. MEMBERS OF THE AUDIT COMMITTTEE

The current members of the Audit Committee are as follows:-

Chairman : Rosli AbdullahIndependent Non-Executive Director(member of the Malaysian Institute of Accountants)

Members : Norlila HassanIndependent Non-Executive DirectorAng Hsin HsienNon-Independent Non-Executive Director

2. MEETINGS AND ATTENDANCE

There were five (5) meetings held during the financial year 2013. The details of attendance of each member at the Audit Committee Meetingsare as follows:-

20 Feb 4 Mar 16 May 11 July 26 Nov Total

Abdullah Yusof √ √ √ √ √ 5/5(Resigned on 16 December 2013)

Datuk Haji Mohd Khalil Dato’ Haji Mohd Noor √ √ √ √ √ 5/5(Resigned on 16 December 2013)

Rosnah Kamarul Zaman √ √ √ √ 4/5(Resigned on 16 December 2013)

Elakumari Kantilal √ √ √ √ √ 5/5(Resigned on 28 November 2013)

Rosli Abdullah N/A N/A N/A N/A N/A N/A(Appointed on 16 December 2013)

Norlila Hassan N/A N/A N/A N/A N/A N/A(Appointed on 16 December 2013)

Ang Hsin Hsien N/A N/A N/A N/A N/A N/A(Appointed on 16 December 2013)

3. TERMS OF REFERENCE

In performing its duties and discharging its responsibilities, the Audit Committee is guided by the Terms of Reference as follows:-

1. Composition of the Audit Committee

The Audit Committee shall have a minimum of three (3) members, of which a majority must be independent directors. All members ofthe Audit Committee shall be non-executive directors and at least one (1) member of the Audit Committee must be a member of theMalaysian Institute of Accountants (MIA) or have equivalent qualifications recognised by the MIA. The Chairman of the Audit Committeemust be an independent director. 32

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The Chairman of the Audit Committee will maintain continuous engagement with the Board Members and Senior Management of theCompany and external auditors in order to keep abreast of matters affecting the Company.

All members of the Audit Committee, including the Chairman, shall hold office only so long as they serve as Directors of the Company.Should any member of the Audit Committee cease to be a Director of the Company, his or her membership in the Audit Committee wouldcease forthwith. Alternate directors are not eligible to become members of the Audit Committee.

2. Powers of the Audit Committee

The Audit Committee is vested with the following authority in carrying out its duties and responsibilities:-

(i) Have explicit authority to investigate any matter within its Terms of Reference. (ii) Have the resources required to perform its duties. (iii) Have full, free and unrestricted access to any information, records, personnel and properties of the Company and any other

companies in the Group. (iv) Have direct communication channels with the external auditors and persons carrying out the internal audit function or activity. Head

of Internal Audit should report directly to the Audit Committee. (v) Have authority to obtain external professional advice and secure the attendance of outside parties with relevant experience and

expertise, if deemed necessary. (vi) Have authority to convene meetings with external auditors, internal auditors or both without the presence of the Management,

whenever deemed necessary.

3. Functions of the Audit Committee

The following are the main functions of the Audit Committee:-

(i) To review the quarterly, half yearly and year-end financial statements of the Company and its subsidiaries (“the Group”) forrecommendation to the Board for approval, focusing on compliance with accounting standards and legal requirements, changesin accounting policies and practices and major potential risk issues.

(ii) Assist the Board of Directors in ensuring that there exists adequate and effective systems of governance, control and riskmanagement.

(iii) To consider the appointment of the external auditors, the audit fee and any questions of their resignation or dismissal. (iv) To review the external auditors’ nature and scope of the audit before commencement of the audit, review the external auditors’ audit

report, management letter and responses thereto. (v) To review with the external auditors their evaluation of the systems and control and any comments they may have with respect to

improving the system for internal control. (vi) To review the adequacy of the scope, functions and resources of the internal audit department, and ascertain that it has the

necessary authority to carry out its work. (vii) To review the internal audit plan and results of the internal audit process and ensure that appropriate action is taken on the

recommendations of the internal audit department. (viii) To consider any related party transactions that may arise within the Group. (ix) To consider the major findings of internal investigations and the Management’s responses, and direct the Management to take

appropriate actions.

4. Frequency and Attendance at Audit Committee Meetings

The Audit Committee shall convene meetings as and when required. The quorum for each meeting shall be a majority of IndependentDirectors.

The Head of Finance, the Head of Internal Audit and or his/her representatives and representatives of the external auditors, the Headsof subsidiary companies and their Management teams are to be in attendance at meetings, if their presence is required.

The Chairman of the Audit Committee shall report on each meeting to the Board. The Secretary to the Audit Committee shall be theCompany Secretary.

AUDIT COMMITTEE REPORT(continued)

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AUDIT COMMITTEE REPORT

4. SUMMARY OF ACTIVITIES

The Audit Committee carried out its duties in accordance with its terms of reference and the following were the activities carried out duringthe financial year 2013:-

(i) Financial Reporting

(a) Reviewed the TEB Group’s quarterly unaudited financial results prior to recommending for approval by the Board of Directors forrelease to Bursa Malaysia Securities Berhad.

(b) Reviewed the annual audited financial statements of the Group and of the Company and the significant risk audit areas highlightedby the external auditors. In the review of the annual audited financial statements, the Audit Committee discussed with theManagement the accounting principles and standards that were applied and the impact of the items to the financial statements.

(ii) External Audit

(a) Reviewed the external auditors’ Audit Plan, Audit Strategy and Scope of Audit Work for the year.

(b) Met with the external auditors without the presence of the Management to discuss issues on strengthening internal control andprocess improvement.

(iii) Internal Audit

(a) Reviewed and approved the Internal Audit Plan to ensure adequate scope and comprehensiveness of the activities and coverageon auditable entities with significant high risks.

(b) Reviewed the progress of audit assignments carried out in accordance with the Internal Audit Plan for the year 2013.

(c) Reviewed the Internal Audit Reports issued during the year 2013 as follows:- 1. IT Outsourcing and Contract & Vendor Management of TEB Group dated 11 January 2013. 2. Billings and Collection of Dagang Net Technologies Sdn Bhd dated 4 February 2013. 3. Corporate Governance of TIME Engineering Berhad dated 15 February 2013.4. Human Resources (Staff Claims) of TEB Group dated 21 May 2013.

(d) Reviewed the assessment of Internal Audit Function performed by the Internal Audit Division of UEM Group Management Sdn Bhd(“UEM Group Internal Audit”) by completing the Audit Committee Satisfaction Survey. The UEM Group Internal Audit took note ofthe survey results and feedback from the members of the Audit Committee and aim for improvement and better rating in comingyears.

(iv) Risk Management

Reviewed the Risk Register of the Company and the Group and the risks mitigation action plans on a quarterly basis.

(v) Related Party Transactions

Reviewed the related party transactions and recurrent related party transactions entered into by the Company and its subsidiaries ona quarterly basis.

(vi) Others

Reviewed the Discretionary Authority Limits of TEB Group to accommodate business and operations needs of the Group and facilitateempowered decision making for business growth.

(continued)

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5. INTERNAL AUDIT FUNCTION

The internal audit function is carried out by the Group Internal Audit of UEM Group Management Sdn Bhd (“UEM Group Internal Audit”)since 1 October 2008. UEM Group Management Sdn Bhd is a wholly-owned subsidiary of UEM Group Berhad which in turn is a wholly ownedsubsidiary of Khazanah Nasional Berhad, a major shareholder of the Company. Based on this shareholding relationship, UEM Group InternalAudit is a party related to the Company.

UEM Group Internal Audit reports directly to the Audit Committee and assists the Audit Committee in discharging its duties andresponsibilities.

The UEM Group Internal Audit undertakes the internal audit activities in conformance with the International Standards for the ProfessionalPractice of Internal Auditing issued by the Institute of Internal Auditors.

As set out in Section 4 above, the Audit Committee deliberated on the internal audit reports and ensured that all recommendations wereduly acted upon by the Management.

As at 31 December 2013, the total cost incurred for the internal audit function was RM130,092.52 which relates to personnel cost on auditassignments (excluding out-of-pocket expenses).

AUDIT COMMITTEE REPORT(continued)

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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION

Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) requires the Board ofDirectors (“the Board”) of public listed companies to include in its Annual Report a “statement about the state of risk management and internalcontrol of the listed issuer as a group”.

Accordingly, the Board is pleased to provide the statement on Risk Management and Internal Control (“Statement”) that was prepared inaccordance with the “Guidance for Directors of Public Listed Company” issued by Bursa Malaysia Securities Berhad which outlines the processesto be adopted by the Board in reviewing the adequacy and integrity of the system of internal control of the Group.

BOARD RESPONSIBILITIES

The Board acknowledges its overall responsibilities for maintaining a sustainable risk management and internal control systems to safeguardshareholders’ interests and the Group’s assets; and for reviewing the adequacy and effectiveness of these systems. In view of the inherentlimitations in any system of risk management and internal control, these systems are designed to manage, rather than to eliminate, the risk offailure to achieve business objectives. Therefore, the systems can only provide reasonable, but not absolute, assurance against materialmisstatement or financial loss. The process to identify, evaluate and manage the significant risks is a concerted and continuing effort by the Boardand Management.

The Audit Committee has approved a formal Group risk management policy that has been adopted by all its subsidiaries. It sets out therequirements for consistent reporting when identifying risk and management actions.

MANAGEMENT PROCESSES AND CONTROL FRAMEWORK

As in any business, TEB faces risk and uncertainty in everything it does. The corporate strategy, which is reviewed on a bi-annual basis, seeksto capitalise on identified opportunities while mitigating known downside risks. Where material risks have been identified within our business,we implemented an appropriate internal control environment to protect shareholders’ interests. The Board is ultimately responsible for the Group’ssystem of risk management and internal control, and it discharges its duties in this area by:

• Determining TEB’s risk appetite (risk exposure strategy requires us to consider in the expectation of an economic return) and risk tolerance(the risk we are prepared to face in achieving our strategic goals);

• Overseeing the risk management strategy; and• Ensuring management implement effective systems of risk identification, assessment, mitigation and internal control. These systems are

designed to manage, rather than eliminate the risk of failure to achieve business objectives and cannot provide absolute assurance againstmaterial misstatement or loss.

An interim Executive Committee (“EXCO”) was formed on 28 November 2012, immediately after the resignation of the TEB Group Chief ExecutiveOfficer, to oversee the day-to-day operations and management of the Company. The EXCO was entrusted by the Board to report on the operations,financial performance and progress of key projects.

INTERNAL CONTROL

Responsibility for reviewing the effectiveness of the internal control has been delegated to the Audit Committee of the Board (“Audit Committee”).The Audit Committee uses information drawn from a number of different sources to carry out this review:

• Internal Audit provides objective assurance – their annual work plan is developed in conjunction with management and focuses on key risksand internal controls. In the light of Internal Audit’s recommendations, management develops and implements corrective action plans,which are tracked to completion by Internal Audit, with the results reported to executive management and the Audit Committee; and36

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• During 2013, internal audit have reviewed the application of the following guidelines:

i) Chapter 15 of the Main Market Listing Requirements issued by Bursa Securities;ii) The Green Book – Enhancing Board Effectiveness issued by PLCs to Putrajaya Committee on GLC High Performance; iii) Malaysian Code on Corporate Governance 2012 issued by Securities Commission of Malaysia; andiv) The application of the Statement on Risk Management and Internal Control – Guidance for directors of Public Listed Companies issued

by the Institute of Internal Auditors Malaysia.

The internal audit concluded that the Company has generally complied with the above mentioned Corporate Governance guidelines.

FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal controls over financial reporting and the Group’s consolidationprocess. A strategic planning, budgeting and forecasting system is in place. Quarterly financial information including operating results and cashflow statements are reported to the Board. The Audit Committee reviews the performance against budget and forecast on a quarterly basis.

Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external reporting purposes.

RISK MANAGEMENT

TEB has an approach to risk management and internal control to ensure that its results are incorporated into the internal audit process and thedesign of internal controls. The risk management process, which has been in place throughout the year has identified, evaluated, managed andmonitored the risks facing the business. Risks which have been identified as significant and high were reviewed together with their associatedmitigating controls by the EXCO and are later reported to the Audit Committee on quarterly basis. In line with the guidance appended to the listingrequirements, the Audit Committee reviews on a quarterly basis the effectiveness of the risk identification process and the methodology used toevaluate and quantify risks.

A prerequisite to effective risk assessment is the cascading of annual business and operational objectives via the Divisional Scorecard that isderived directly from the Corporate Scorecard of TEB Group. Every unit has identified the relevant risks that may hamper the accomplishmentsof its objective and the action required to manage such risks.

“Top-down” and “bottom-up” risk reviews were carried out in each area of the business by the Board, EXCO, operational and middle managersrespectively. All senior managers are responsible for managing and monitoring risks in their area of responsibility and recording these risks inthe risk register. The Company co-ordinates risk management activities and ensures that mitigating actions are implemented appropriately. It ismandatory for this process to take place at least once a year but in practice, the reviews often take place on a quarterly basis. For each riskidentified, management assesses the root causes, probability of risk occurring, impact and mitigating controls. Each of the business areas aresupported by an Operational Risk Champion who co-ordinates risk management activities and ensures that actions are implemented appropriately.This process ensures risks are measured, monitored and reported on a consistent basis.

Risk tolerance is an indication of the amount of risk a company is willing to accept in order to meet its strategic objectives. This is reflected in acompany’s capacity to sustain losses and its ability to continue to meet its obligations under different trading conditions. TEB has a matrix scoringsystem which takes into consideration financial, stakeholder and legal criteria. Risks are then rated based on their likelihood and potential severity.These scores are then used to escalate risks within the organisation for prompt mitigating actions to be taken.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

(continued)

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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL(continued)

ORGANISATIONAL STRUCTURE AND AUTHORISATION PROCEDURES

Apart from the internal audit and risk management, the Board has put in place an organisational structure with formally defined lines ofresponsibility and discretionary authority limit (“DAL”). The procedures include establishing limits of authority and publication of EmployeesCode of Conduct Handbook, highlighting amongst others, policies and procedures on health and safety, training and development, staffperformance and handling of misconduct. There are also procedures and DAL for human resource planning, capital and operational spendingand monitoring of the Group’s business and operational performance. A Board Procurement and Tender Committee comprising three (3) of theBoard members of the Company had been established effective 16 December 2013 to independently review, approve and providerecommendations on capital and operational spending to the Board.

These procedures are relevant across Group operations and provide assurance to Senior Management and the Board. The processes are reviewedby internal audit, which provides a degree of assurance on the operations and effectiveness of the system of internal control. Planned correctiveactions are independently monitored to ensure timely completion.

The EXCO reported to the Board on significant changes to the Group’s business, if any. Performance information is presented to the Board usingthe balanced scorecard approach. The EXCO provided the Board with quarterly financial information, which includes key financial indicators.This includes inter-alia the monitoring of results against budget and prior years and management actions taken on unfavourable variances noted.Where areas of improvement in the system are identified, the Board considers the recommendations made by both the Audit Committee andthe Management.

Apart from the risk management and internal audit, the Board has put in place an organisational structure with formally defined lines ofresponsibility and discretionary authority.

On 28 November 2013, the Company announced the re-designation of position of Datuk Samsul Husin from Non-Independent Non-ExecutiveDirector to Acting Group Managing Director/Group Chief Executive Officer of TEB and with immediate effect. With that, the EXCO was dissolvedeffective 28 November 2013.

Thereafter, Datuk Samsul Husin was re-designed and appointed as Executive Deputy Chairman effective 16 December 2013.

THE MANAGEMENT’S COMMITMENT

The Board received reasonable assurance from the Executive Deputy Chairman and Chief Financial Officer that the Group’s risk managementand internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal controlsystem in place.

REVIEW OF STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL BY EXTERNAL AUDITORS

The external auditors have reviewed this Statement on Risk Management and Internal Control pursuant to the scope set out in the RecommendedPractice Guide (“RPG”) 5 (Revised), Guidance for Auditors on Engagements to Report on the Statement on Risk Management and InternalControl included in the Annual Report issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Groupfor the year ended 31 December 2013, and reported to the Board that nothing has come to their attention that cause them to believe that thestatement intended to be included in the annual report of the Group, in all material respects:

(a) has not been prepared in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management andInternal Control: Guidelines for Directors of Listed Issuers, or

(b) is factually inaccurate.

RPG 5 (Revised) does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Controlcovers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal controlsystem including the assessment and opinion by the Board of Directors and management thereon. The auditors are also not required to considerwhether the processes described to deal with material internal control aspects of any significant problems disclosed in the annual report will, infact, remedy the problems.

This statement is made in accordance with a resolution of the Board dated 25 March 2014.

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SHARE PERFORMANCE CHART

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0.38

0.37

0.36

0.35

0.34

0.33

0.32

0.31

0.30

0.28

0.27

0.26

0.25

0.24

400K

300K

200K

100K

2013 Feb Mar 18 Apr 15 May 20 Jun 17 Jul 15 Aug 19 Sep 17 Oct 14 Nov 18 Dec 16 2014 20 Feb 17 Mar 17 31

0.245

2300

TIME [1DAY] [O:0.250 H:0.250 L:0.245 C:0.245]

VOL(5) VOLUME : 2300.000


SHARE PERFORMANCE CHART

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85

,80

0

14

4,5

94

2009 2010 2011 2012 2013

65

,34

0

87

,69

3

12

4,1

09

3,9

04

11

4

95

,90

9

20

,99

8

30

,49

0

(1.0

0)

(0.7

7)

11

.29

1.0

63.0

5

0.1

0

0.1

30.1

7

0.4

3

0.1

8

REVENUE(RM’000)

PROFIT/(LOSS)BEFORE TAXATION

(RM’000)

NET ASSETSPER SHARE

(RM)

NET EARNINGS/(LOSS) PER SHARE

(SEN)

6

1

5-YEARFINANCIAL HIGHLIGHTS

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5-YEARFINANCIAL HIGHLIGHTS(continued)

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2009 2010 2011 2012 2013

Consolidated Statements of Financial Position (RM’000)

Investments 348,599 497,846 - - - Other Assets 148,292 136,777 185,681 241,916 182,207

Total Assets 496,891 634,623 185,681 241,916 182,207

Share Capital 155,049 155,049 155,049 155,049 155,049 Reserves (12,862) 174,822 (20,810) (51,846) (81,074)

Equity Attributable to shareholders of the company 142,187 329,871 134,239 103,203 73,975 Non-controlling interests 21,457 18,239 18,396 11,845 17,795 Borrowing 303,561 263,334 - 67,386 57,024 Other Liabilities 29,686 23,179 33,046 59,482 33,413

Total Equity and Liabilities 496,891 634,623 185,681 241,916 182,207

Consolidated Statements of Profit or Loss and Other Comprehensive Income (RM’000)

Revenue 124,109 87,693 65,340 144,594 85,800

Results from operating activities 34,063 19,963 2,343 2,494 18,320 Finance costs (5,499) (20,481) (1,517) (538) (3,442)Gain on disposal of investment - 19,637 91,927 - - Impairment loss in plant and equipment - - - - (9,781)Finance income 1,926 1,879 3,156 2,658 1,851 Provision for legal claim - - - (4,500) (3,044)

Profit Before Taxation 30,490 20,998 95,909 114 3,904 Zakat (335) (269) (295) (281) (266)Taxation 147 (7,064) (4,488) (2,999) (3,659)

Profit/(Loss) For the Year 30,302 13,665 91,126 (3,166) (21)

Attributable to:Owners of the Company 23,625 8,189 87,490 (7,779) (5,971)Non-controlling interests 6,677 5,476 3,636 4,613 5,950

Profit/(Loss) For the Year 30,302 13,665 91,126 (3,166) (21)

Financial Highlights (RM’000)

Revenue 124,109 87,693 65,340 144,594 85,800 Profit Before Taxation 30,490 20,998 95,909 114 3,904 Profit/(Loss) For The Year After Taxation 30,302 13,665 91,126 (3,166) (21)Profit/(Loss) Attributable To owners of the Company 23,625 8,189 87,490 (7,779) (5,971)

Financial RatiosRevenue Growth % (17.8) (29.3) (25.5) 121.3 (40.7)Debt/Equity ratio times 1.9 0.8 - 0.6 0.6

Net Earnings/(Loss) per Share sen 3.05 1.06 11.29 (1.00) (0.77)Gross Dividend per Share sen 1.33 1.33 6.67 4.00 - Net Assets per Share RM 0.18 0.43 0.17 0.13 0.10

Closing Price sen 43.0 45.0 26.0 30.0 25.5 Price Earnings Ratio times 14.1 42.6 2.3 NA NA

FINANCIALSTATEMENTS

44 Directors’ Report

48 Statements of Financial Position

49 Statements of Profit or Loss and Other Comprehensive Income

50 Statements of Changes In Equity

52 Statements of Cash Flows

54 Notes to the Financial Statements

97 Statement by Directors

98 Statutory Declaration

99 Independent Auditors’ Report

DIRECTORS’REPORT

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financialyear ended 31 December 2013.

PRINCIPAL ACTIVITIES

The principal activity of the Company is that of investment holding whilst the principal activities of the subsidiaries are as stated in Note 5 to thefinancial statements. There has been no significant change in the nature of these activities during the financial year.

RESULTS

Group CompanyRM’000 RM’000

Loss for the year attributable to:Owners of the Company (5,971) (48,912)Non-controlling interests 5,950 -

(21) (48,912)

RESERVES AND PROVISIONS

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

DIVIDENDS

Since the end of the previous financial year, the Company paid a final dividend of 4.0 sen per ordinary share less tax at 25% totallingRM23,257,340 (3.0 sen net per ordinary share) in respect of the financial year ended 31 December 2012 on 12 July 2013.

The Directors do not recommend the payment of any final dividend for the financial year ended 31 December 2013.

DIRECTORS OF THE COMPANY

Directors who served since the date of the last report are:

Datuk Samsul Husin (appointed on 12 November 2013)Dato’ Zainul Azman Dato’ Zainul Aziz (appointed on 18 November 2013)Tan Sri Abdul Rahman Mamat (Chairman) (appointed on 12 December 2013) Wong Kam Yin (appointed on 12 December 2013)Dato’ Arif Ambrose Leonard Ng (appointed on 12 December 2013)Rosli Abdullah (appointed on 12 December 2013)Norlila Hassan (appointed on 12 December 2013)Ang Hsin Hsien (appointed on 12 December 2013)Elakumari Kantilal (resigned on 28 November 2013)Dato’ Mohd Izzaddin Idris (resigned on 28 November 2013)Hj Zaiviji Ismail Abdullah (resigned on 28 November 2013)Datuk Hj Mohd Khalil Dato’ Hj Mohd Noor (resigned on 16 December 2013)Hj Abdullah Yusof (resigned on 16 December 2013)Rosnah Kamarul Zaman (resigned on 16 December 2013)

for the year ended 31 December 2013

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DIRECTORS’ INTERESTS

The interests and deemed interests in the ordinary shares and options over shares of the Company and of its related corporations (other thanwholly-owned subsidiaries) of those who were Directors at year end (including the interests of the spouses or children of the Directors whothemselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM0.20 eachAt date of At

appointment Bought Sold 31.12.2013Interests in the Company:Datuk Samsul Husin*

Interest in the Company:- Indirect 178,956,773 170,155,958 - 349,112,731

Dato’ Arif Ambrose Leonard NgInterest in the Company:- own 900,000 - - 900,000

* Deemed interest through Censof Holdings Berhad pursuant to Section 6A of the Companies Act, 1965.

None of the other Directors holding office at 31 December 2013 had any interest in the ordinary shares and options over shares of the Companyand of its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than abenefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or thefixed salary of a full time employee of the Company or of related corporations) by reason of a contract made by the Company or a relatedcorporation 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 financialinterest.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquirebenefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

ISSUE OF SHARES AND DEBENTURES

There were no changes in the authorised, issued and paid-up capital of the Company during the financial year. There were no debentures issuedduring the financial year.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year.

DIRECTORS’REPORT

for the year ended 31 December 2013 (continued)

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DIRECTORS’REPORT

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate allowance made for doubtful debts, and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which theymight be expected so to realise.

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

i) that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts in the Group and in the Companyinadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Companymisleading or inappropriate, or

iv) not otherwise dealt with in this report or in the financial statements, that would render any amount stated in the financial statements of theGroup and of the Company misleading.

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

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilitiesof any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the periodof twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Groupand of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, except for the impairment loss of plant and equipment and the waiver of debts owed by subsidiaries as disclosedin the financial statements of the Group and of the Company respectively, the financial performance of the operations of the Group and of theCompany for the financial year ended 31 December 2013 have not been substantially affected by any item, transaction or event of a materialand unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date ofthis report.


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AUDITORS

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

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

Datuk Samsul Husin

Rosli Abdullah

Kuala Lumpur,

Date: 25 February 2014

DIRECTORS’REPORT


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STATEMENTS OF FINANCIAL POSITION

Group CompanyNote 2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

AssetsPlant and equipment 3 15,639 34,606 12 23Intangible assets 4 2,889 3,313 2 5Investments in subsidiaries 5 - - 70,045 70,045Trade and other receivables 6 52,713 73,157 - -

Total non-current assets 71,241 111,076 70,059 70,073

Trade and other receivables 6 43,633 48,548 1,494 1,494Amount due from subsidiaries 7 - - 4,501 62,251Inventories 8 65 1,808 - -Tax recoverable 2,867 1,723 1,727 -Cash and bank balances 9 64,401 78,761 5,220 21,715

Total current assets 110,966 130,840 12,942 85,460

Total assets 182,207 241,916 83,001 155,533

EquityShare capital 10 155,049 155,049 155,049 155,049Reserves (81,074) (51,846) (73,923) (1,754)

Total equity attributable to shareholders of the Company 73,975 103,203 81,126 153,295Non-controlling interests 11 17,795 11,845 - -

Total equity 91,770 115,048 81,126 153,295

LiabilitiesDeferred tax liabilities 12 3,388 2,598 - -Borrowing 13 38,530 48,886 - -Deferred income 14 8,112 12,169 - -

Total non-current liabilities 50,030 63,653 - -

Trade and other payables 15 21,908 44,710 1,845 1,927Borrowing 13 18,494 18,500 - -Amount due to subsidiaries 7 - - 30 311Tax payable 5 5 - -

Total current liabilities 40,407 63,215 1,875 2,238

Total liabilities 90,437 126,868 1,875 2,238

Total equity and liabilities 182,207 241,916 83,001 155,533

at 31 December 2013

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The notes on pages 54 to 95 are an integral part of these financial statements.


RM’000 RM’000 RM’000 RM’000

Continuing operationsRevenue 16 85,800 144,594 7,170 32,768Cost of goods sold (24,324) (90,393) (163) (81)

Gross profit 61,476 54,201 7,007 32,687Sales and marketing expenses (1,640) (3,631) - -Administrative expenses (8,056) (10,763) (1,930) (2,210)Other operating expenses (47,431) (43,569) (60,730) (11,359)Other operating income 17 1,146 1,756 6,336 7,410

Results from operating activities 5,495 (2,006) (49,317) 26,528Finance costs 18 (3,442) (538) - -Finance income 1,851 2,658 405 861

Profit/(Loss) before tax 19 3,904 114 (48,912) 27,389Zakat (266) (281) - -Tax expense 20 (3,659) (2,999) - -

(Loss)/Profit for the year/Total comprehensive (loss)/income for the year (21) (3,166) (48,912) 27,389

(Loss)/Profit for the year /Total comprehensive income/(loss) attributable to:Owners of the Company (5,971) (7,779) (48,912) 27,389Non-controlling interests 5,950 4,613 - -

(Loss)/Profit for the year/Total comprehensive income/(loss) for the year (21) (3,166) (48,912) 27,389

Basic loss per ordinary share (sen) 21 (0.77) (1.00)

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


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STATEMENTS OF CHANGES IN EQUITY

Attributable to the owners of the CompanyNon-distributable

Non-Share Accumulated controlling Total

capital losses Total interests equityGroup Note RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2012 155,049 (20,810) 134,239 18,396 152,635

Loss for the year - (7,779) (7,779) 4,613 (3,166)

Total comprehensive (loss)/income for the year - (7,779) (7,779) 4,613 (3,166)

Dividends to owners of the Company 22 - (23,257) (23,257) - (23,257)Dividend paid/payable by a subsidiary to

non-controlling interests - - - (11,164) (11,164)

Total distribution to owners - (23,257) (23,257) (11,164) (34,421)

At 31 December 2012/1 January 2013 155,049 (51,846) 103,203 11,845 115,048

Loss for the year - (5,971) (5,971) 5,950 (21)

Total comprehensive (loss)/income for the year - (5,971) (5,971) 5,950 (21)

Dividends to owners of the Company 22 - (23,257) (23,257) - (23,257)

Total distribution to owners - (23,257) (23,257) - (23,257)

At 31 December 2013 155,049 (81,074) 73,975 17,795 91,770

Note 10 Note 11


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Attributable to the owners of the CompanyNon-distributable

Share Accumulatedcapital losses Total

Company Note RM’000 RM’000 RM’000

At 1 January 2012 155,049 (5,886) 149,163

Profit for the year - 27,389 27,389

Total comprehensive income for the year - 27,389 27,389

Dividends to owners of the Company 22 - (23,257) (23,257)

Total distribution to owners - (23,257) (23,257)

At 31 December 2012/1 January 2013 155,049 (1,754) 153,295

Loss for the year - (48,912) (48,912)

Total comprehensive loss for the year - (48,912) (48,912)

Dividends to owners of the Company 22 - (23,257) (23,257)

Total distribution to owners - (23,257) (23,257)

At 31 December 2013 155,049 (73,923) 81,126

Note 10

STATEMENTS OF CHANGES IN EQUITY


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STATEMENTS OF CASH FLOWS


RM’000 RM’000 RM’000 RM’000

Cash flows from operating activitiesDividends received from investees - - 26,341 11,510Cash receipts from customers 110,600 76,481 191 244Cash payments to suppliers (22,786) (101,550) (121) -Cash payments to employees and for expenses (51,394) (40,194) (6,281) (6,750)

Cash flows generated from/(used in) operating activities 36,420 (65,263) 20,130 5,004Taxation (paid)/refunded (4,013) (3,559) - 150Interest and other income received - - 405 861Zakat paid (266) (281) - -

Net cash generated from/(used in) operating activities 32,141 (69,103) 20,535 6,015

Cash flows from investing activitiesAdvances to subsidiaries - - (14,640) (16,568)Interest received 1,851 2,658 - -Proceeds from disposal of plant and equipment - 2 - 2Purchase of plant and equipment and intangible assets (2,883) (16,093) (3) (9)

Net cash used in investing activities (1,032) (13,433) (14,643) (16,575)Cash flows from financing activities

Dividend paid by a subsidiary to non-controlling interests (8,539) (2,625) - -Dividend paid to owners of the Company (23,257) (38,762) (23,257) (38,762)Interest paid (3,311) (84) - -Decrease/(Increase) in pledged deposits and restricted cash 1,386 (1,177) - -Payment from subsidiary companies - - 870 1,679Repayment of borrowing (16,954) - - -Drawdown of term loan 6,592 67,386 - -

Net cash (used in)/generated from financing activities (44,083) 24,738 (22,387) (37,083)

Net change in cash and cash equivalents (12,974) (57,798) (16,495) (47,643)

Cash and cash equivalents at 1 January 75,707 133,505 21,715 69,358

Cash and cash equivalents at 31 December (i) 62,733 75,707 5,220 21,715


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Notes to the statements of cash flows

i) Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts:

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

CurrentRestricted and pledged - Cash and bank balances 1,668 1,247 - -- Deposits with licensed banks - 1,807 - -

1,668 3,054 - -Unrestricted- Cash and bank balances 4,195 4,791 713 1,228- Deposits with licensed banks 58,538 70,916 4,507 20,487

62,733 75,707 5,220 21,715

64,401 78,761 5,220 21,715Less: Cash and cash equivalents pledged as security (1,668) (3,054) - -

62,733 75,707 5,220 21,715

STATEMENTS OF CASH FLOWS


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NOTES TO THE FINANCIAL STATEMENTS

TIME Engineering Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of theBursa Malaysia Securities Berhad. The address of its registered office and principal place of business is as follows:

Registered office and principal place of businessTower 3, Avenue 5The Horizon, Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala Lumpur

The consolidated financial statements of the Company as at and for the financial year ended 31 December 2013 comprise the Company and itssubsidiaries (together referred to as the “Group” and individually referred to as “Group entities”).

The Company is principally engaged in investment holding whilst the principal activities of the subsidiaries are as stated in Note 5 to the financialstatements.

These financial statements were authorised for issue by the Board of Directors on 25 February 2014.

1. BASIS OF PREPARATION

(a) Statement of compliance

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

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

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014• Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities• Amendments to MFRS 12, Disclosure of Interest in Other Entities: Investment Entities• Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities• Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities• Amendments to MFRS 136, Impairment of Assets – Recoverable Amount Disclosures for Non-Financial Assets• Amendments to MFRS 139, Financial Instruments: Recognition and Measurement – Novation of Derivatives and Continuation of

Hedge Accounting• IC Interpretation 21, Levies

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2014• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2011-2013

Cycle)• Amendments to MFRS 2, Share-based Payment (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 3, Business Combinations (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)• Amendments to MFRS 8, Operating Segments (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 13, Fair Value Measurement (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 119, Employee Benefits – Defined Benefit Plans: Employee Contributions• Amendments to MFRS 138, Intangible Assets (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 140, Investment Properties (Annual Improvements 2011-2013 Cycle)

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1. BASIS OF PREPARATION (CONTINUED)

(a) Statement of compliance (continued)

MFRSs, Interpretations and amendments effective for a date yet to be confirmed• MFRS 9, Financial Instruments (2009)• MFRS 9, Financial Instruments (2010)• MFRS 9, Financial Instruments – Hedge Accounting and Amendments to MFRS 9, MFRS 7 and MFRS 139• Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and Transition Disclosures

The Group plans to apply the abovementioned accounting standards, amendments and interpretations:

• from the annual period beginning on 1 January 2014 for those accounting standards, amendments or interpretations that areeffective for annual periods beginning on or after 1 January 2014, except for MFRS 12, MFRS 127 and IC Interpretation 21 whichare not applicable to the Group.

• from the annual period beginning on 1 January 2015 for those accounting standards, amendments or interpretations that areeffective for annual periods beginning on or after 1 July 2014, except for MFRS 2 and MFRS 140 which are not applicable to theGroup.

The initial application of the accounting standards, amendments or interpretations are not expected to have any material financialimpacts to the current period and prior period financial statements of the Group except as mentioned below:

(i) MFRS 9, Financial Instruments

MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification andmeasurement of financial assets and financial liabilities, and on hedge accounting.

The Group is currently assessing the financial impact that may arise from the adoption of MFRS 9.

(ii) MFRS 132, Financial Instruments: Presentation

The amendments to MFRS 132 clarify the criteria for offsetting financial assets and financial liabilities.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. All financialinformation presented in RM and has been rounded to the nearest thousand, unless otherwise stated.

(d) Use of estimates and judgements

The preparation of the financial statements in conformity with MFRSs requires management to make judgements, estimates andassumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.Actual results may differ from these estimates.


(continued)

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1. BASIS OF PREPARATION (CONTINUED)

(d) Use of estimates and judgements (continued)

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in theperiod in which the estimates are revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effecton the amounts recognised in the financial statements, other than the Group’s contract for the implementation of National SingleWindow (“NSW”) which will be ending in September 2014. Thus, there can be no assurance that the Group will be able to continue toenjoy the similar level of revenue in the event that the NSW contract is not successfully renewed. The management is in the processof negotiating for an extension for the said contract.

2. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to the periods presented in these financial statements and have beenapplied consistently by Group entities, unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries areincluded in the consolidated financial statements from the date that control commences until the date that control ceases.

The Group adopted MFRS 10, Consolidated Financial Statements in the current financial year. This resulted in changes in thefollowing policies:

• Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has theability to affect those returns through its power over the entity. In the previous financial years, control exists when the Grouphas the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from itsactivities.

• Potential voting rights are considered when assessing control only when such rights are substantive. In the previous financialyears, potential voting rights are considered when assessing control when such rights are presently exercisable.

• The Group considers its de facto power over an investee when, despite not having the majority of voting rights, it has the currentability to direct the activities of the investee that significantly affect the investee’s return. In the previous financial years, theGroup did not consider de facto power in its assessment of control.

The change in accounting policy has been made retrospectively and in accordance with the transitional provision of MFRS 10. Theadoption of MFRS 10 has no significant impact to the financial statements of the Group.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses, unlessthe investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on whichcontrol is transferred to the Group.

(continued)

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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(a) Basis of consolidation (continued)

(ii) Business combinations (continued)

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus • the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fairvalue or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction cost, other than those associated with the issue of debt or equity securities, that the Group incurs in connection witha business combination are expensed as incurred.

(iii) Acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactionsbetween the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and afterthe change, and any consideration received or paid, is adjusted to or against Group reserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financialposition. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in theformer subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for asan equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

(v) Non-controlling interests

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

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing socauses the non-controlling interests to have a deficit balance.

(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, areeliminated in preparing the consolidated financial statements.


(continued)

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(b) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the datesof the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functionalcurrency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date, except forthose that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value wasdetermined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslationof available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk, which are recognised in othercomprehensive income.

(c) Financial instruments

(i) Initial recognition and measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or theCompany becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profitor loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is notclosely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair valuethrough profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for inaccordance with policy applicable to the nature of the host contract.

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

Financial assets

Loans and receivables

Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interestmethod.

All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see Note2(i)(i)).

(continued)

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(c) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement (continued)

Financial liabilities

All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss.

Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financialguarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into thiscategory upon initial recognition.

Derivatives that are linked to and must be settled by delivery of equity instruments that do not have a quoted price in an activemarket for identical instruments whose fair values otherwise cannot be reliably measured are measured at cost.

Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gainor loss recognised in profit or loss.

(iii) Derecognition

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

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

(d) Plant and equipment

(i) Recognition and measurement

Items of plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable tobringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring thesite on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifyingassets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Purchased software that isintegral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (majorcomponents) of plant and equipment.

The gain or loss on disposal of an item of plant and equipment is determined by comparing the proceeds from disposal with thecarrying amount of plant and equipment and is recognised net within “other operating income” or “other operating expenses”respectively in profit or loss.


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(d) Plant and equipment (continued)

(ii) Subsequent costs

The cost of replacing a component of an item of plant and equipment is recognised in the carrying amount of the item if it isprobable that the future economic benefits embodied within the component will flow to the Group or the Company, and its costcan be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, andif a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item ofplant and equipment. Plant and equipment under construction are not depreciated until the assets are ready for their intendeduse.

The estimated useful lives for the current and comparative periods are as follows:

• Office renovations 5 years• Plant and machinery 3 - 5 years• Office equipment, furniture and fittings 5 - 10 years• Computer equipment 3 years

Depreciation methods, useful lives and residual values are reviewed at end of the reporting period, and adjusted as appropriate.

(e) Leased assets

Operating lease

Leases, where the Group or the Company does not assume substantially all the risks and rewards of ownership are classified as operatingleases and, except for property interest held under operating lease, the leased assets are not recognised in the statement of financialposition. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, isclassified as investment property and measured using fair value model.

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

(f) Intangible assets

(i) Goodwill

Goodwill arises on business combinations and is measured at cost less any accumulated impairment losses.

(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge andunderstanding, is recognised in profit or loss as incurred.

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(f) Intangible assets (continued)

(ii) Research and development (continued)

Expenditure on development activities, whereby the application of research findings are applied to a plan or design for theproduction of new or substantially improved products and processes, is capitalised only if development costs can be measuredreliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Groupintends to and has sufficient resources to complete development and to use or sell the asset.

The expenditure capitalised includes the cost of materials, direct labour and overheads costs that are directly attributable topreparing the asset for its intended use. For qualifying assets, borrowing costs are capitalised in accordance with the accountingpolicy on borrowing costs. Other development expenditure is recognised in profit or loss as incurred.

Capitalised development expenditure is measured at cost less any accumulated amortisation and any accumulated impairmentlosses.

(iii) Other intangible assets

Intangible assets, other than goodwill, that are acquired by the Group, which have finite useful lives, are measured at cost less anyaccumulated amortisation and any accumulated impairment losses.

(iv) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to whichit relates. All other expenditure is recognised in profit or loss as incurred.

(v) Amortisation

Amortisation is based on the cost of an asset less its residual value.

Goodwill and intangible assets with indefinite useful lives are not amortised but are tested for impairment annually and wheneverthere is an indication that they may be impaired.

Other intangible assets are amortised from the date that they are available for use.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the datethat they are available for use.

The estimated useful live of capitalised development costs and software is 3 years respectively.

(g) Inventories

Inventories are measured at the lower of cost and net realisable value.

The cost of inventories is measured based on weighted average cost formula, and includes expenditure incurred in acquiring theinventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.

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


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(h) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have aninsignificant risk of changes in fair value. For the purpose of the statement of cash flows, cash and cash equivalents are presented netof pledged deposits and restricted cash.

(i) Impairment

(i) Financial assets

All financial assets (except for investments in subsidiaries) are assessed at each reporting date whether there is any objectiveevidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Lossesexpected as a result of future events, no matter how likely, are not recognised. For an investment in equity instrument, a significantor prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists,then the financial asset’s recoverable amount is estimated.

An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference betweenthe asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interestrate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measuredas the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at thecurrent market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available for sale is notreversed through profit or loss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an eventoccurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’scarrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the datethe impairment is reversed. The amount of the reversal is recognised in profit or loss.

(ii) Other assets

The carrying amounts of other assets (except for inventories) are reviewed at the end of each reporting period to determine whetherthere is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwilland intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated ateach period at the same time.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflowsfrom continuing use that are largely independent of the cash inflows of other assets or cash-generating units. Subject to an operatingsegment ceiling test, for the purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocatedare aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitoredfor internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocatedto group of cash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. Inassessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate thatreflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

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(i) Impairment (continued)

(ii) Other assets (continued)

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimatedrecoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocatedfirst to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cash-generating units) and thento reduce the carrying amounts of the other assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periodsare assessed at the end of each reporting date for any indications that the loss has decreased or no longer exists. An impairmentloss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairmentloss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carryingamount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversalsof impairment losses are credited to profit or loss in the year in which the reversals are recognised.

(j) Equity instruments

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

(k) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured onan undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group hasa present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligationcan be estimated reliably.

(ii) State plans

The Group’s contributions to the statutory pension funds are charged to profit or loss in the financial year to which they relate. Oncethe contributions have been paid, the Group has no further payment obligations.

(l) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimatedreliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined bydiscounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money andthe risks specific to the liability. The unwinding of the discount is recognised as finance cost.


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(m) Revenue and other income

(i) Goods sold

Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received orreceivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when pursuasive evidenceexists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferredto the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimatedreliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as areduction of revenue as the sales are recognised.

(ii) Services

Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the endof the reporting period. The stage of completion is assessed by reference to surveys of work performed.

(iii) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established,which in the case of quoted securities is the ex-dividend date.

(iv) Interest income

Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income arisingfrom temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted forin accordance with the accounting policy on borrowing costs.

(n) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised inprofit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarilytake a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

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

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets isdeducted from the borrowing costs eligible for capitalisation.

(o) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extentthat it relates to items recognised directly in equity or other comprehensive income.

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(o) Income tax (continued)

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

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets andliabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences:the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and thataffects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to apply to the temporarydifferences 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 amountof the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities arenot discounted.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and theyrelate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settlecurrent 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 temporarydifference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it isno longer probable that the related tax benefit will be realised.

(p) Earnings per share

The Group presents basic 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 averagenumber of ordinary shares outstanding during the period, adjusted for own shares held.

(q) Operating segments

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

(r) Contingent liabilities

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


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(s) Fair value measurements

From 1 January 2013, the Group adopted MFRS 13, Fair Value Measurement which prescribed that the fair value of an asset or a liability,except for share-based payment and lease transactions, is determined as the price that would be received to sell an asset or paid totransfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that thetransaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, inthe most advantageous market.

For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits byusing 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 bestuse.

In accordance with the transitional provision of MFRS 13, the Group applied the new fair value measurement guidance prospectively,and has not provided any comparative fair value information for new disclosures. The adoption of MFRS 13 has not significantly affectedthe measurements of the Group’s assets or liabilities.

3. PLANT AND EQUIPMENT

Officeequipment, Capital

Office Plant and furniture Computer work-in-renovations machinery and fittings equipment progress Total

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

CostAt 1 January 2012 4,042 25,380 2,422 31,171 983 63,998Additions 77 96 159 1,549 13,404 15,285Disposals - - (7) (49) - (56)Written off - - (11) - - (11)Reclassifications 23 - 58 8,436 (8,517) -

At 31 December 2012/1 January 2013 4,142 25,476 2,621 41,107 5,870 79,216Additions 126 51 46 936 1,194 2,353Disposals - - - (3,370) - (3,370)Written off (110) - (280) (6,207) - (6,597)Reclassifications 52 - 7 6,226 (6,285) -

At 31 December 2013 4,210 25,527 2,394 38,692 779 71,602

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3. PLANT AND EQUIPMENT (CONTINUED)

Officeequipment, Capital

Office Plant and furniture Computer work-in-renovations machinery and fittings equipment progress Total

Group (continued) RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation and impairment loss

At 1 January 2012Accumulated depreciation 2,234 3,002 1,502 28,018 - 34,756Accumulated impairment loss - 1,702 - - - 1,702

2,234 4,704 1,502 28,018 - 36,458Depreciation charge 911 4,257 191 2,846 - 8,205Disposals - - (8) (45) - (53)At 31 December 2012/1 January 2013

Accumulated depreciation 3,145 7,259 1,685 30,819 - 42,908Accumulated impairment loss - 1,702 - - - 1,702

3,145 8,961 1,685 30,819 - 44,610Depreciation charge 858 4,270 188 6,221 - 11,537Disposals - - - (3,370) - (3,370)Written off (108) - (280) (6,207) - (6,595)Impairment loss - 9,781 - - - 9,781At 31 December 2013

Accumulated depreciation 3,895 11,529 1,593 27,463 - 44,480Accumulated impairment loss - 11,483 - - - 11,483

3,895 23,012 1,593 27,463 - 55,963

Carrying amountsAt 1 January 2012 1,808 20,676 920 3,153 983 27,540

At 31 December 2012/1 January 2013 997 16,515 936 10,288 5,870 34,606

At 31 December 2013 315 2,515 801 11,229 779 15,639


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3. PLANT AND EQUIPMENT (CONTINUED)

Officeequipment,

Office furniture Computerrenovations and fittings equipment Total

Company RM’000 RM’000 RM’000 RM’000

CostAt 1 January 2012 13 115 306 434Additions - 3 - 3Disposals - (7) (5) (12)

At 31 December 2012/1 January 2013 13 111 301 425Additions - 3 - 3

At 31 December 2013 13 114 301 428

Accumulated depreciationAt 1 January 2012 6 86 293 385Depreciation charge 7 11 5 23Disposals - (5) (1) (6)

At 31 December 2012/1 January 2013 13 92 297 402Depreciation charge - 10 4 14

At 31 December 2013 13 102 301 416

Carrying amountsAt 1 January 2012 7 29 13 49

At 31 December 2012/1 January 2013 - 19 4 23

At 31 December 2013 - 12 - 12

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4. INTANGIBLE ASSETS

Software Developmentin progress Software expenditure Total

Group RM’000 RM’000 RM’000 RM’000

CostAt 1 January 2012 3,583 17,745 315 21,643Additions 508 300 - 808Reclassifications (2,289) 2,289 - -Written off (530) - - (530)

At 31 December 2012/1 January 2013 1,272 20,334 315 21,921Additions 555 162 - 717Transfer from other receivables - 728 - 728Reclassifications (1,099) 1,099 - -

At 31 December 2013 728 22,323 315 23,366

Accumulated amortisation and impairment lossAt 1 January 2012

Accumulated amortisation - 16,439 315 16,754Accumulated impairment loss - 192 - 192

- 16,631 315 16,946Amortisation for the year - 1,662 - 1,662At 31 December 2012/1 January 2013

Accumulated amortisation - 18,101 315 18,416Accumulated impairment loss - 192 - 192

- 18,293 315 18,608Amortisation for the year - 1,383 - 1,383Transfer from other receivables - 486 - 486

At 31 December 2013Accumulated amortisation - 19,970 315 20,285Accumulated impairment loss - 192 - 192

At 31 December 2013 - 20,162 315 20,477

Carrying amountsAt 1 January 2012 3,583 1,114 - 4,697

At 31 December 2012/1 January 2013 1,272 2,041 - 3,313

At 31 December 2013 728 2,161 - 2,889


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4. INTANGIBLE ASSETS (CONTINUED)

SoftwareCompany RM’000

CostAt 1 January 2012 442Additions 6

At 31 December 2012/1 January 2013/31 December 2013 448

Accumulated amortisationAt 1 January 2012 440Amortisation for the year 3

At 31 December 2012/1 January 2013 443Amortisation for the year 3

At 31 December 2013 446

Carrying amountAt 1 January 2012 2

At 31 December 2012/1 January 2013 5

At 31 December 2013 2

5. INVESTMENTS IN SUBSIDIARIES

Company2013 2012

RM’000 RM’000At cost

Unquoted shares 110,045 110,045Less: Impairment loss (40,000) (40,000)

70,045 70,045

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5. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

The principal activities of the companies in the Group, all incorporated in Malaysia and the interests of TIME Engineering Berhad are shownbelow:

EffectiveOwnership Interest

Name of subsidiary Principal activities 2013 2012% %

Information Communication Technology

Dagang Net Technologies Sdn. Bhd. Development, management and provision of business 71.25 71.25to business (B2B) e-commerce and computerised transaction facilitation services.

TEB Systems Integrators Sdn. Bhd. Providing expertise in IT project management and consultancy, 100 100supply of (ICT) hardware equipment, maintenance and assetmanagement.

TEB Quantum Technology Sdn. Bhd. Providing IT solutions, cyber security, managed services andsupply of computer hardware, software and peripherals. 100 100

Non-controlling interests in subsidiary

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

2013 2012RM’000 RM’000

NCI percentage of ownership interest and votingInterest - Dagang Net Technologies Sdn. Bhd. 28.75% 28.75%

Carrying amount of NCI 17,795 11,845

Profit allocated to NCI 5,950 4,613

Summarised financial information before intra-group elimination

2013 2012RM’000 RM’000

As at 31 DecemberNon-current assets 15,899 21,243Current assets 66,877 66,705Non-current liabilities (3,388) (2,598)Current liabilities (17,491) (44,147)

Net assets 61,897 41,203


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5. INVESTMENTS IN SUBSIDIARIES (CONTINUED)

Summarised financial information before intra-group elimination (continued)

2013 2012RM’000 RM’000

Year end 31 DecemberRevenue 73,488 64,358Profit for the year 20,694 16,046Total comprehensive income 20,694 16,046

Cash flows from operating activities 31,192 21,917Cash flows from investing activities (1,491) (14,212)Cash flows from financing activities (29,700) (9,129)

Dividends paid to NCI - 11,164

6. TRADE AND OTHER RECEIVABLES


RM’000 RM’000 RM’000 RM’000

Non-currentTradeTrade receivables 6.1 48,426 67,228 - -Less: Fair value adjustment (3,199) (5,300) - -

45,227 61,928 - -Prepayments 6.2 7,486 11,229 - -

52,713 73,157 - -

Current TradeTrade receivables 6.1 33,547 39,071 - -Less: Impairment loss (669) (1,173) - -

32,878 37,898 - -Prepayments 6.2 3,743 3,743 - -

36,621 41,641 - -

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6. TRADE AND OTHER RECEIVABLES (CONTINUED)


RM’000 RM’000 RM’000 RM’000

Non-tradeOther receivables 4,921 5,775 1,957 1,895Less: Impairment loss (769) (1,293) (670) (623)Transfer to intangible assets 4 (242) - - -

3,910 4,482 1,287 1,272Prepayments 6.2 3,102 2,425 207 222

7,012 6,907 1,494 1,494

43,633 48,548 1,494 1,494

96,346 121,705 1,494 1,494

6.1 Included in trade receivables of the Group is an amount of RM71,394,663 (2012: RM92,206,904) owing by a receivable that will becollected over 36 months (2012: 48 months).

During the year, the Group and the Company have written off receivables of RM1,045,000 (2012: RM1,993,000) and RM45,000(2012: RM Nil) respectively against impairment loss.

6.2 Included in prepayments is an amount of RM11,228,972 (2012: RM14,971,963) for future services that was billed in advance by asupplier. The current portion and non-current portion is RM3,742,991 (2012: RM3,742,991) and RM7,485,981 (2012: RM11,228,972)respectively.

7. AMOUNT DUE FROM/(TO) SUBSIDIARIES

The amount due from/(to) subsidiaries consist of the following:

Company2013 2012

RM’000 RM’000

Amount due from subsidiaries- Non-trade 4,501 62,251

Amount due to subsidiaries- Trade (30) (311)

Certain inter-company advances bear interest at 4% (2012: 4%) per annum and repayable on demand.


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8. INVENTORIES

Group2013 2012

RM’000 RM’000

At cost:Finished goods - prepaid stock 65 270Finished goods - computer equipment - 1,538

65 1,808

9. CASH AND BANK BALANCES

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

CurrentDeposits with licensed banks 58,538 72,723 4,507 20,487Cash and bank balances 5,863 6,038 713 1,228

64,401 78,761 5,220 21,715

Included in cash and bank balances of the Group are:i) Bank balance of RM1,668,000 (2012: RM1,247,000) which is restricted and held in an Escrow Account whereby part of the proceeds

from a receivable will be used to repay to lenders that have granted credit facilities to a subsidiary; ii) Deposits with licensed banks of RM Nil (2012: RM956,594) which have been pledged to a vendor as security for lease of equipment.

The charges have been lifted during the financial year; andiii) Deposits with licensed banks of RM Nil (2012: RM850,552) pledged to banks as security for credit facilities granted to a subsidiary.

10. SHARE CAPITAL

Group and CompanyNumber Number

Amount of shares Amount of shares2013 2013 2012 2012

RM’000 ‘000 RM’000 ‘000

Authorised:Ordinary shares of RM0.20 each 2,000,000 10,000,000 2,000,000 10,000,000

Issued and fully paid:Ordinary shares of RM0.20 each 155,049 775,245 155,049 775,245

Ordinary shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share atmeetings of the Company.

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11. NON-CONTROLLING SHAREHOLDERS’ INTERESTS

This consists of the non-controlling shareholders’ proportion of share capital and reserves in a subsidiary.

12. DEFERRED TAX LIABILITIES

Recognised deferred tax assets/(liabilities)

Deferred tax assets/(liabilities) of the Group are attributable to the following:

Assets Liabilities Net2013 2012 2013 2012 2013 2012

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Plant and equipment - - (3,439) (2,837) (3,439) (2,837)Provisions 51 239 - - 51 239

Net deferred tax assets/(liabilities) 51 239 (3,439) (2,837) (3,388) (2,598)

Movement in temporary differences during the year

Recognised Recognisedin profit in profit

At or loss At or loss At1.1.2012 (Note 20) 31.12.2012 (Note 20) 31.12.2013

Group RM’000 RM’000 RM’000 RM’000 RM’000

Plant and equipment (1,579) (1,258) (2,837) (602) (3,439)Provisions 245 (6) 239 (188) 51

(1,334) (1,264) (2,598) (790) (3,388)

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

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Unutilised tax losses 62,346 64,603 39,039 43,149Unabsorbed capital allowances 21,360 20,517 212 204Plant and equipment (805) (9,884) - 3Provisions 150 240 150 240

83,051 75,476 39,401 43,596

Unrecognised deferred tax assets 20,763 18,869 9,850 10,899


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12. DEFERRED TAX LIABILITIES (CONTINUED)

The unabsorbed capital allowances and unutilised tax losses do not expire under current tax legislation. Deferred tax assets have not beenrecognised in respect of these items because it is not probable that future taxable profits will be available against which the Group and theCompany can utilise the benefits. The unabsorbed capital allowances and unutilised tax losses are subject to the agreement of the taxauthorities.

13. BORROWING

Group2013 2012

RM’000 RM’000

Non-currentTerm loan 38,530 48,886

CurrentTerm loan 18,494 18,500

57,024 67,386

The term loan is secured, repayable in equal installments over a period of 36 months (2012: 48 months) and subject to interest rate of 1%(2012: 1%) per annum above cost of fund.

The term loan is secured by way of a charge over all monies in a designated Escrow Account maintained by a receivable and a corporateguarantee issued by the Company.

14. DEFERRED INCOME

Group Note 2013 2012

RM’000 RM’000Non-current

Deferred income 8,112 12,169

CurrentDeferred income 15 4,056 4,097

12,168 16,266

The contract pursuant to the supply, delivery, installation, testing, commissioning, maintenance and support of ICT equipment to the localpolytechnics and community colleges undertaken by the Group in 2012 included the maintenance of equipment for a period of four yearsfrom the date of commissioning. A certain portion of the contract value in relation to the maintenance service is recognised as deferred incomeand amortised over the contractual period of 48 months which will end by 2016.

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15. TRADE AND OTHER PAYABLES


RM’000 RM’000 RM’000 RM’000

TradeTrade payables 741 9,755 - -

Non-tradeOther payables and accrued expenses 15.1 20,356 21,728 1,845 1,927Interest payable

- Borrowing 246 188 - -Provision 15.2 565 4,500 - -Amount due to non-controlling Interest - 8,539 - -

21,167 34,955 1,845 1,927

21,908 44,710 1,845 1,927

15.1 Included in other payables is a deferred income of RM4,056,243 (Note 14) (2012: RM4,097,043) that was billed in advance to acustomer.

15.2 The provision relates to an estimated cost of legal claim arising from an action brought by a sub-contractor. The legal claim has beensettled during the financial year.

16. REVENUE

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Continuing operationsSale of goods 11,625 76,367 - -Rendering of services 74,175 68,227 263 97Gross dividend income from:

- Subsidiary company - - 6,907 32,671

85,800 144,594 7,170 32,768


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17. OTHER OPERATING INCOME

Included in other operating income are the following:

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Bad debts recovered - 193 - -Gain on disposal of plant and equipment 120 - - -Management fee - - 5,772 2,223Waiver of debts on liquidation of subsidiaries - - - 4,840Reversal of impairment loss on investment in subsidiaries - - - 100Reversal of impairment loss:

- Trade receivables 910 109 - -- Other receivables 39 70 39 70

18. FINANCE COSTS

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Finance charges/interest expense on:Interest on borrowing 3,369 275 - -Others 73 263 - -

3,442 538 - -

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19. PROFIT/(LOSS) BEFORE TAX

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Profit/(Loss) before tax is arrived at after charging:

Amortisation of intangible assets 1,383 1,662 3 3Auditors’ remuneration:-

- Audit fees 175 166 65 58- Non-audit fees 22 33 22 33

Depreciation of plant and equipment 11,537 8,205 14 23Directors’ remuneration 1,048 570 904 413Gain on liquidation of subsidiaries - - - 468Impairment loss of:-

- Plant and equipment 9,781 - - -- Trade receivables 739 540 - -- Other receivables 227 550 131 584

Intangible assets written off - 530 - -Investments in subsidiaries written off (net of impairment) - - - 5,000Loss on disposal of plant and equipment - 1 - 4Personnel expenses:-

- Contributions to Employees Provident Fund 2,128 2,237 253 283- Wages, salaries and others 16,083 19,030 2,011 2,740

Plant and equipment written off 2 - - -Provision for legal claim 3,044 4,500 - -Rental of premises payable to:

- Related company - - 632 636- Others 2,888 3,494 - -

Rental of site and equipment 106 958 412 449Rental of storage and others 103 75 48 48Waiver of debts owed by subsidiaries - - 55,701 -

20. TAX EXPENSE

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Recognised in profit or loss

Current tax expense- Current year 2,383 2,439 - -- Under/(Over) provision in prior year 486 (704) - -

Total current tax expense 2,869 1,735 - -

Deferred tax expense- Current year 243 1,195 - -- Under provision in prior year 547 69 - -

Total deferred tax expense 790 1,264 - -

Total tax expense 3,659 2,999 - -


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20. TAX EXPENSE (CONTINUED)

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Reconciliation of tax expense

Net (loss)/profit after tax (21) (3,166) (48,912) 27,389Total tax expense 3,659 2,999 - -Zakat payment 266 281 - -

Net profit/(loss) excluding tax and zakat 3,904 114 (48,912) 27,389

Income tax using Malaysian tax rate of 25% (2012: 25%) 976 29 (12,228) 6,847Income not subject to tax (16,575) (59) (140) (9,453)Expenses not deductible for tax purposes 16,331 2,202 13,417 2,049Effect of unrecognised deferred tax assets 1,894 1,462 - 557Recognition of previously unrecognised deferred tax assets - - (1,049) -

2,626 3,634 - -Under/(Over) provision of tax expense in prior year 486 (704) - -Under provision of deferred tax expense in prior year 547 69 - -

Total tax expense 3,659 2,999 - -

21. BASIC LOSS PER ORDINARY SHARE

The calculation of basic earnings per share at 31 December 2013 was based on the profit/(loss) attributable to ordinary shareholders andthe weighted average number of ordinary shares outstanding calculated as follows:

Group2013 2012

RM’000 RM’000

Loss for the year attributable to shareholders (5,971) (7,779)

Group2013 2012’000 ’000

Weighted average number ordinary shares at 31 December 775,245 775,245

Group2013 2012

Sen Sen

Basic loss per ordinary share from continuing operations (0.77) (1.00)

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22. DIVIDENDS

Sen Totalper share amount Date of payment

(net of tax) RM’000

2013Final 2012 ordinary 3.0 23,257 12 July 2013

2012Final 2011 ordinary 3.0 23,257 1 June 2012

23. OPERATING SEGMENTS

The Group has two reportable segments, as described below, which represent the Group’s strategic business units. The strategic businessunits offer different services and are managed separately because they require different technical expertise and marketing strategies. Foreach of the strategic business unit, the Executive Deputy Chairman of the Group reviews internal management report on at least a quarterlybasis. The following summary describes the operations in each of the Group’s reportable segments:

Corporate

The Company is an investment holding company. The segment is in provision of corporate services to the entities within the Group.

Information communication technology

Supply, delivery, installation, testing, commissioning and maintenance of IT hardware, development, management and provision of businessto business (B2B) e-commerce and computerised transaction facilitation services, providing of cyber security solutions, managed services,project fulfilment, assets maintenance and contact centres.

Segment assets

The total of segment assets is measured based on all assets (including goodwill) of a segment, as included in the internal management reportsthat are reviewed by the Executive Deputy Chairman of the Group. Segment total assets is used to measure the return of assets of eachsegment.

Segment liabilities

The total of segment liabilities is measured based on all liabilities of a segment, as included in the internal management reports that arereviewed by the Executive Deputy Chairman of the Group.

Segment capital expenditure

Segment capital expenditure is the total cost incurred during the financial year to acquire plant and equipment and intangible assets otherthan goodwill.


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23. OPERATING SEGMENTS (CONTINUED)

InformationCommunication

Technology Corporate Eliminations ConsolidatedBusiness segment RM’000 RM’000 RM’000 RM’000

2013Business segmentsRevenue from external customers 85,537 263 - 85,800Inter-segment revenue 1,950 6,907 (8,857) -

Total revenue 87,487 7,170 (8,857) 85,800

Segment resultProfit/(Loss) from operations 11,483 (5,988) - 5,495

Finance costs (3,442)Interest income 1,851

Profit before tax 3,904Zakat (266)Tax expense (3,659)

Net loss after tax (21)

Attributable to:Shareholders of the Company (5,971)Non-controlling interests 5,950

Net loss for the year (21)

Segment assets 175,182 83,000 (75,975) 182,207

Segment liabilities 94,492 1,875 (5,930) 90,437

Capital expenditure 3,067 3 - 3,070Depreciation and amortisation 12,903 17 - 12,920Impairment loss on plant and equipment 9,781 - - 9,781

Geographical segment

No geographical segment information has been prepared as all the business operations of the Group are located in Malaysia.

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23. OPERATING SEGMENTS (CONTINUED)

InformationCommunication

Technology Corporate Eliminations ConsolidatedBusiness segment RM’000 RM’000 RM’000 RM’000

2012Business segmentsRevenue from external customers 144,497 97 - 144,594Inter-segment revenue 10,825 32,671 (43,496) -

Total revenue 155,322 32,768 (43,496) 144,594

Segment resultProfit/(Loss) from operations 6,154 (8,160) - (2,006)

Finance costs (538)Interest income 2,658

Profit before tax 114Zakat (281)Tax expense (2,999)

Net loss after tax (3,166)

Attributable to:Shareholders of the Company (7,779)Non-controlling interests 4,613

Net loss for the year (3,166)

Segment assets 232,126 155,533 (145,743) 241,916

Segment liabilities 200,328 2,238 (75,698) 126,868

Capital expenditure 16,084 9 - 16,093Depreciation and amortisation 9,841 26 - 9,867

Geographical segment

No geographical segment information has been prepared as all the business operations of the Group are located in Malaysia.


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24. FINANCIAL INSTRUMENTS

24.1 Categories of financial instruments

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

(a) Loans and receivables (“L&R”); and(b) Other liabilities (“OL”).

Carryingamount L&R

RM’000 RM’000

Financial assetsGroup2013Trade and other receivables (excluding prepayment) 82,015 82,015Cash and bank balances 64,401 64,401

146,416 146,416

2012Trade and other receivables (excluding prepayment) 104,308 104,308Cash and bank balances 78,761 78,761

183,069 183,069

Company2013Trade and other receivables (excluding prepayment) 1,287 1,287Amount due from subsidiaries 4,501 4,501Cash and bank balances 5,220 5,220

11,008 11,008

2012Trade and other receivables (excluding prepayment) 1,272 1,272Amount due from subsidiaries 62,251 62,251Cash and bank balances 21,715 21,715

85,238 85,238

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24. FINANCIAL INSTRUMENTS (CONTINUED)

24.1 Categories of financial instruments (continued)

Carryingamount OL

RM’000 RM’000

Financial liabilitiesGroup2013Trade and other payables 17,852 17,852Borrowing 57,024 57,024

74,876 74,876

2012Trade and other payables 40,613 40,613Borrowing 67,386 67,386

107,999 107,999

Company2013Trade and other payables 1,845 1,845Amount due to subsidiaries 30 30

1,875 1,875

2012Trade and other payables 1,927 1,927Amount due to subsidiaries 311 311

2,238 2,238

24.2 Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

• Credit risk• Liquidity risk• Market risk

24.3 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 contractualobligations. The Group’s exposure to credit risk arises principally from its receivables from customers. The Company’s exposure tocredit risk arises principally from loans and advances to subsidiaries and financial guarantees given to banks for credit facilitiesgranted to subsidiaries.


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24.3 Credit risk (continued)

Receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Normally financialguarantees given by banks, shareholders or directors of customers are obtained, and credit evaluations are performed on customersrequiring credit over a certain amount.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carryingamounts in the statement of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are measured at theirrealisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. TheGroup uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due morethan 120 days, which are deemed to have higher credit risk, are monitored individually.

Impairment losses

The ageing of receivables (excluding prepayments) as at the end of the reporting period was:

Net2013 2012

Group RM’000 RM’000

Not past due 77,503 99,919Past due 0 - 30 days 1,842 2,092Past due 31 - 120 days 660 995Past due more than 121 days 2,010 1,302

82,015 104,308

CompanyNot past due 1,287 1,272

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24.3 Credit risk (continued)

Receivables (continued)

Impairment losses (continued)

The movements in the allowance for impairment losses of receivables during the financial year were:

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

At 1 January 2,466 3,548 623 109Impairment loss recognised 966 1,090 131 584Impairment loss reversed (949) (179) (39) (70)Impairment loss written off (1,045) (1,993) (45) -

At 31 December 1,438 2,466 670 623

Inter company balances


The Company provides unsecured loans and advances to subsidiaries. The Company monitors the results of the subsidiariesregularly.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statementof financial position.

Loans and advances are only provided to subsidiaries which are wholly owned by the Company.

Impairment losses

As at the end of the reporting period, there was no indication that the loans and advances to the subsidiaries are not recoverable.The Company does not specifically monitor the ageing of the advances to the subsidiaries. Nevertheless, these advances have beenoverdue for less than a year. Non-current loans to subsidiaries are not overdue.

24.4 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s exposure toliquidity 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, asfar as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.


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24.4 Liquidity risk (continued)

Maturity analysis

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reportingperiod based on undiscounted contractual payments:

Carrying Contractual Contractual Under 1 1 – 2 2 - 5amount interest rate cash flows year Years years

Group RM’000 % RM’000 RM’000 RM’000 RM’000

2013Trade and other payables 17,852 - 17,852 17,852 - -Borrowing 57,024 5.08 57,024 18,494 18,494 20,036

74,876 74,876 36,346 18,494 20,036

2012Trade and other payables 40,613 - 40,613 40,613 - -Borrowing 67,386 4.70 - 5.08 67,386 18,500 18,500 30,386

107,999 107,999 59,113 18,500 30,386

Company2013Trade and other payables 1,845 - 1,845 1,845 - -Amount due to subsidiaries 30 - 30 30 - -

1,875 1,875 1,875 - -

2012Trade and other payables 1,927 - 1,927 1,927 - -Amount due to subsidiaries 311 - 311 311 - -

2,238 2,238 2,238 - -

24.5 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices will affect theGroup’s financial position or cash flows.

24.5.1 Foreign currency risk

The Group is exposed to foreign currency risk on bank balance that is denominated in the currency other than the functionalcurrency, Ringgit Malaysia (RM). The currency giving rise to this risk is primarily US Dollar (USD).

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24.5 Market risk (continued)

24.5.1 Foreign currency risk (continued)


The Group does not have a fixed policy to hedge its sales and purchases via forward contracts. However, the exposure toforeign currency risk is monitored from time to time by management.

Exposure to foreign currency risk

The Group’s exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period was:

Denominated in USD2013 2012

Group RM’000 RM’000

Bank balances 72 202

Currency risk sensitivity analysis

A 10% (2012: 10%) strengthening of Ringgit Malaysia against the following currency at the end of the reporting periodwould have decreased post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables,in particular interest rates, remained constant and ignores any impact of forecasted sales and purchases.

Profit or loss2013 2012

RM’000 RM’000

USD (5) (15)

A 10% (2012: 10%) weakening of Ringgit Malaysia against the above currency at the end of the reporting period wouldhave had equal but opposite effect on the above currency to the amounts shown above, on the basis that all other variablesremained constant.

24.5.2 Interest rate risk

The Group’s and the Company’s significant interest-bearing financial assets and financial liabilities are mainly its depositplacements and borrowing.

The deposit placements as of financial position date are short term and therefore exposure to the effects of future changesin prevailing level of interest rates is limited.

Effective interest rates and repricing analysis

In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates theireffective interest rates as at the end of the reporting period and the periods in which they reprice or mature, whichever isearlier.


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24.5.2 Interest rate risk (continued)

EffectiveInterest Within 1 – 5

rate per annum Total 1 year years% RM’000 RM’000 RM’000

Group2013Fixed rate instrumentsDeposits placed with licensed banks 2.40 - 3.17 58,538 58,538 -

Floating rate instrumentsBorrowing 5.08 (57,024) (18,494) (38,530)

1,514 40,044 (38,530)

2012Fixed rate instrumentsDeposits placed with licensed banks 2.40 - 3.30 72,723 72,723 -

Floating rate instrumentsBorrowing 4.70 - 5.08 (67,386) (18,500) (48,886)

5,337 54,223 (48,886)

Company2013Fixed rate instrumentsDeposits placed with licensed banks 2.50 - 3.15 4,507 4,507 -

2012Fixed rate instrumentsDeposits placed with licensed banks 2.50 - 3.30 20,487 20,487 -

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Groupdoes not designate derivatives as hedging instruments under a fair value hedged accounting model. Therefore, a changein interest rates at the end of the reporting period would not affect profit or loss.

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24.5.3 Other price risk

Equity price risk arises from the Group’s investments in equity securities.


Management of the Group monitors the equity investments on a portfolio basis. Material investments within the portfolioare managed on an individual basis and all buy and sell decisions are approved by the Board of Directors.

Equity price risk sensitivity analysis

Arising from the disposal of the Group’s equity instruments in 2012 the Group does not have investments in equity securitiesat the end of the reporting date.

24.6 Fair value of financial instruments

The carrying amounts of cash and cash equivalents, short-term receivables and payables approximate fair values due to the relativelyshort term nature of these financial instruments.

The fair values of other non-current financial assets and borrowing, together with the carrying amounts shown in the statement offinancial position, are as follows:

2013 2012Carrying Fair Carrying Fairamount value amount value

Group Note RM’000 RM’000 RM’000 RM’000

Trade receivables 6 48,426 45,227 67,228 61,928 Borrowing 13 (38,530) (38,530) (48,886) (48,886)

For non-current financial assets of RM48,426,000 (2012: RM67,228,000), due to the lack of comparable quoted market prices andthe inability to estimate fair value without incurring excessive costs, the Directors estimate the market interest rate for a comparableinstrument to be approximately 3% to 4% per annum to arrive at the fair value.


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24.7 Fair value information

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 fair values and carrying amounts shown in the statement of financial position.

Fair value of financial instruments Fair value of financial instruments Total Carryingcarried at fair value not carried at fair value fair value amount

Group Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsTrade receivables - - 45,227 45,227 - - - - 45,227 48,426

Financial liabilitiesBorrowing - (38,530) - (38,530) - - - - (38,530) (38,530)

2012Financial assetsTrade receivables - - 61,928 61,928 - - - - 61,928 67,228

Financial liabilitiesBorrowing - (48,886) - (48,886) - - - - (48,886) (48,886)

Policy on transfer between levels

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined asfollows:

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 entitycan access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the financial assetsor liabilities, either directly or indirectly.

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cashflows, discounted at the market rate of interest at the end of the reporting period.

Transfers between Level 1 and Level 2 fair values

There has been no transfer between Level 1 and 2 fair values during the financial year. (2012: no transfer in either directions)

Level 3 fair value

Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.

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25. CAPITAL MANAGEMENT

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a goingconcern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitorand are determined to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

The debt-to-equity ratios are as follows:

Group 2013 2012

RM’000 RM’000

Total borrowing 57,024 67,386Less: Cash and cash equivalents (Page 53) (62,733) (75,707)

Net cash (5,709) (8,321)

Total equity 91,770 115,048

Debt-to-equity ratio - -

There were no changes in the Group’s approach to capital management during the financial year.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares) and such shareholders’ equityis not less than RM40 million. The Company has complied with this requirement.

26. COMMITMENTS

Group 2013 2012

RM’000 RM’000

Capital commitments:Plant and equipment

Authorised and contracted for within one year 604 138


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27. RELATED PARTIES

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company has the ability,directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or viceversa, or where the Group or the Company and the party are subject to common control or common significant influence. Related partiesmay be individuals or other entities.

Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling theactivities of the Group either directly or indirectly. The key management personnel include all the Directors of the Group, and certain membersof senior management of the Group.

The significant related party transactions of the Group and the Company are as follows:

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Subsidiary companiesManagement fee income - - 5,772 2,223Dividend income - - 6,907 32,671Rental of premises - - (632) (636)Facilities services - - (412) (369)Purchase of IT products and services - - (44) (288)

Related companiesSale of IT products & services 113 1,442 - -Management fee - (264) (119) (264)

Other related parties*Lease line, phone and utilities charges (2,133) (2,337) (116) (154)Maintenance and facility charges (931) (1,072) - -Insurance (218) (327) (108) (75)

* The related parties and the Group are subject to common significant influence.

The terms and conditions for the above transactions are based on negotiated basis. Significant related party balances of the Group and theCompany are disclosed in Note 7.

Other key management personnel comprise persons other than the Directors of Group entities, having authority and responsibility forplanning, directing and controlling the activities of the entity either directly or indirectly.

In addition to their salaries, the Group also voluntarily provided additional Employees Provident Fund (EPF) contributions over the statutoryrequirement for a significant number of employees.

(continued)

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27. RELATED PARTIES (CONTINUED)

Identity of related parties (continued)

There are no significant related party transactions of the Group and the Company and its key management personnel of the Group andholding company, other than key management personnel compensation as disclosed below:

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Key management personnel compensation

Non-executive Directors- Fees 489 494 363 365- Remuneration 559 76 541 48

Total short-term employee benefits 1,048 570 904 413

Other key management personnel- Remuneration 3,118 3,682 845 1,330- Short-term employee benefits

- EPF 454 535 121 189- Others 578 479 116 137

Total short-term employee benefits 4,150 4,696 1,082 1,656

5,198 5,266 1,986 2,069

28. CONTINGENT LIABILITY

The Company provided a corporate guarantee to a bank in relation to a term loan obtained by a subsidiary company.


(continued)

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29. SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS OR LOSSES

On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of theunappropriated profits or accumulated losses as at the end of the reporting period, into realised and unrealised profits or losses.

On 20 December 2010, Bursa Malaysia further issued another directive on the disclosure and the prescribed format of presentation.

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2013, into realised and unrealised profits,pursuant to the directive, is as follows:

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Total retained earnings of the Company and its subsidiaries:- realised (47,831) (21,131) (73,923) (1,754)- unrealised (3,953) (7,374) - -

(51,784) (28,505) (73,923) (1,754)Less: Consolidation adjustments (29,290) (23,341) - -

Total accumulated losses (81,074) (51,846) (73,923) (1,754)

The determination of realised and unrealised profits is based on the Guidance of Special Matter No.1, Determination of Realised andUnrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued byMalaysian Institute of Accountants on 20 December 2010.

(continued)

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In the opinion of the Directors, the financial statements set out on pages 48 to 95 are drawn up in accordance with Malaysian Financial ReportingStandards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true andfair view of the financial position of the Group and of the Company as of 31 December 2013 and of their financial performance and cash flowsfor the year then ended.

In the opinion of the Directors, the information set out in Note 29 on page 96 to the financial statements has been compiled in accordance withthe Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to BursaMalaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribedby Bursa Malaysia Securities Berhad.

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

Datuk Samsul Husin

Rosli Abdullah

Kuala Lumpur,


STATEMENT BY DIRECTORS

pursuant to Section 169(15) of the Companies Act, 1965

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STATUTORY DECLARATION

I, Lim Kek Siang, the Officer primarily responsible for the financial management of TIME Engineering Berhad, do solemnly and sincerely declarethat the financial statements set out on pages 48 to 96 are, to the best of my knowledge and belief, correct and I make this solemn declarationconscientiously 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 in Kuala Lumpur on 25 February 2014

Lim Kek Siang

Before me:

Fauzilawati Binti IshakLicense No.: W 561Commissioner of OathsKuala Lumpur

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

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Report on the Financial Statements

We have audited the financial statements of TIME Engineering Berhad, which comprise the statements of financial position as at 31 December2013 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, changes in equity and cash flowsof the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information,as set out on pages 48 to 95.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance withMalaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 inMalaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financialstatements 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 approvedstandards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable 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 proceduresselected depend on our judgement, including the assessment of the risks of material misstatement of the financial statements, whether due tofraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Malaysian Financial Reporting Standards, InternationalFinancial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financialposition of the Group and of the Company as of 31 December 2013 and of their financial performance and cash flows for the year then ended.

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 havebeen properly kept in accordance with the provisions of the Act.

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

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

INDEPENDENT AUDITORS’ REPORT

to the members of TIME Engineering Berhad

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INDEPENDENT AUDITORS’ REPORT

Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set out in Note 29 onpage 96 to the financial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirementsand is not required by the Malaysian Financial Reporting Standards or International Financial Reporting Standards. We have extended our auditprocedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all materialrespects, in accordance with the Guidance of Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context ofDisclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presentedbased on the format prescribed by 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 Malaysiaand for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG Chan Kam ChiewFirm Number: AF 0758 Approval Number: 2055/06/14(J)Chartered Accountants Chartered Accountant

Petaling Jaya,


to the members of TIME Engineering Berhad (continued)

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Authorised Share Capital : RM2,000,000,000.00Issued and Fully Paid : RM155,048,937Class of Shares : Ordinary Shares of RM0.20 eachNo. of Shareholders : 21,325Voting Right : 1 vote per Ordinary Share

ANALYSIS BY SIZES

Category No. of Shareholders No. of Shares Percentage (%)Malaysian Foreign Malaysian Foreign Malaysian Foreign

Less than 100 shares 490 3 7,660 20 0.00 0.00

100 to 1,000 shares 4,616 65 4,337,900 61,436 0.56 0.01

1,001 to 10,000 shares 10,442 187 51,173,720 975,333 6.60 0.13

10,001 to 100,000 shares 4,779 134 165,768,276 5,344,600 21.38 0.69

100,001 to less than 5% of issued shares 570 37 183,334,400 15,128,607 23.65 1.95

5% and above of issued shares 2 0 349,112,731 0 45.03 0.00

TOTAL 20,899 426 753,734,687 21,509,996 97.22 2.78

CLASSIFICATION OF SHAREHOLDERS

Category Percentage No. of PercentageNo. of Shares (%) Shareholders (%)

Individuals 323,748,129 41.76 18,526 86.88Nominee Companies 438,555,078 56.57 2,640 12.38Industrial & Commercial Companies 11,777,976 1.52 138 0.65Government Agencies 114,000 0.01 3 0.01Banks/ Finance Companies 123,500 0.02 11 0.05Foundation/ Investment Trusts/ Charities 926,000 0.12 7 0.03

TOTAL 775,244,683 100.00 21,325 100.00

DIRECTORS’ INTERESTS IN SHARES IN THE COMPANY

Direct Interest Indirect InterestName of Directors No. of Shares Percentage (%) No. of Shares Percentage (%)

Dato’ Arif Ambrose Leonard Ng 900,000 0.12 0 0.00Datuk Samsul Husin 0 0.00 349,112,731* 45.03

Notes:-* Deemed interest through SAAS Global Sdn Bhd and Censof Holdings Berhad pursuant to Section 6A of the Companies Act 1965.

ANALYSIS OF SHAREHOLDINGS

as at 31 March 2014

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ANALYSIS OF SHAREHOLDINGS

30 LARGEST SHAREHOLDERS AS AT 31 MARCH 2014

No. Name of Shareholders No. of Shares Percentage (%)

1. RHB Nominees (Tempatan) Sdn Bhd 178,956,773 23.08- Pledged Securities Account For Censof Holdings Berhad (1st Party)

2. Kenanga Nominees (Tempatan) Sdn Bhd 170,155,958 21.95- Pledged Securities Account For Censof Holdings Berhad

3. Yap Sook Chin 4,288,000 0.554. Tan Tiam Yee 4,000,000 0.525. Yeo Ann Seck 2,300,000 0.306. Wong Ah Chai 2,150,000 0.287. Lim Kooi Fui 2,033,300 0.268. SJ Sec Nominees (Tempatan) Sdn Bhd 2,000,000 0.26

- Pledged Securities Account For Seo Cheng Gaok (SMT)9. Leow Hong Yen 1,800,000 0.2310. Lim Siang Hee 1,783,300 0.2311. RHB Capital Nominees (Tempatan) Sdn Bhd 1,650,000 0.21

- Pledged Securities Account For Sor Ah Kee (CEB)12. Cimsec Nominees (Tempatan) Sdn Bhd 1,620,000 0.21

- CIMB Bank For Ng Chai Hock (MY0972)13. Rescom International Limited 1,583,000 0.2014. Ng Teng Song 1,532,000 0.2015. Apollo Food Holdings Berhad 1,500,000 0.1916. Tan Siok Hoay @ Chen Chuan Liang 1,500,000 0.1917. Liang Chiang Heng 1,443,700 0.1918. Lai Weng Chee @ Lai Kok Chye 1,424,400 0.1819. Tiong Ngee Min 1,398,000 0.1820. Public Nominees (Tempatan) Sdn Bhd 1,300,700 0.17

- Pledged Securities Account For Tung Ah Kiong (E-KLG)21. Cartaban Nominees (Tempatan) Sdn Bhd 1,300,000 0.17

- DBS Vickers (Hong Kong) Limited For Teh Hong Eng22. Yap Soo Yuet 1,250,000 0.1623. Lim Lee Khen 1,218,000 0.1624. Cheah Song Kang @ Chiah Jee Ba 1,140,000 0.1525. Lew Tin Yang @ Leu Ting Yeang 1,130,000 0.1526. Lew Yuen Kee @ Lew Ah Kee 1,115,000 0.1427. Lew Tin Yang @ Leu Ting Yeang 1,050,000 0.1428. Maybank Nominees (Tempatan) Sdn Bhd 1,010,000 0.13

- Pledged Securities Account For Siti Azrina Binti Adanan29. TA Nominees (Tempatan) Sdn Bhd 1,000,000 0.13

- Pledged Securities Account For Oh Kim Sun30. Lee Chee Kiong 1,000,000 0.13

TOTAL 395,632,131 51.04

SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS, EXCLUDING BARE TRUSTEES AS AT 31MARCH 2014

No. Name of Shareholders No. of Shares Percentage (%)

1. RHB Nominees (Tempatan) Sdn Bhd 178,956,773 23.08- Pledged Securities Account For Censof Holdings Berhad (1st Party)

2. Kenanga Nominees (Tempatan) Sdn Bhd 170,155,958 21.95- Pledged Securities Account For Censof Holdings Berhad

as at 31 March 2014 (continued)

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NOTICE IS HEREBY GIVEN that the Forty Fourth Annual General Meeting (“44th AGM”) of TIME Engineering Berhad (“the Company”) will beheld at the Ballroom 1, Level 1, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Monday, 12 May 2014at 10.00 a.m. for the following purposes:-

AGENDA

1. To receive the Audited Financial Statements for the financial year ended 31 December 2013 together with the reportsof the Directors and Auditors thereon.

AS ORDINARY BUSINESS

2. To re-elect the following Directors who retire pursuant to Article 99 of the Company’s Articles of Association andwho being eligible offer themselves for re-election:

(a) Tan Sri Abd Rahman Mamat(b) Datuk Samsul Husin(c) Dato’ Zainul Azman Dato’ Zainul Aziz(d) Dato’ Arif Ambrose Leonard Ng(e) Rosli Abdullah(f) Norlila Hassan(g) Ang Hsin Hsien(h) Wong Kam Yin

3. To approve the payment of Directors’ Fees for the financial year ending 31 December 2014 on a quarterly basis afterthe end of each quarter.

4. To appoint Messrs. Crowe Horwath as auditors of the Company until the conclusion of the next Annual GeneralMeeting and to authorise the Directors to determine their remuneration.

Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965, a copy of which is annexed heretoand marked ‘Annexure A’ in the Annual Report had been received by the Company for the nomination of Messrs.Crowe Horwath for appointment as auditors of the Company and the intention to propose the following ordinaryresolution:-

“THAT Messrs. Crowe Horwath, having consent to act, be and are hereby appointed as auditors of the Company inplace of the retiring auditors, Messrs. KPMG, and to hold office until the conclusion of the next Annual GeneralMeeting and that the directors of the Company be authorised to determine their remuneration.”

NOTICE OF FORTY FOURTH ANNUAL GENERAL MEETING

Resolution 1Resolution 2Resolution 3Resolution 4Resolution 5Resolution 6Resolution 7Resolution 8

Resolution 9

Resolution 10

TIME ENGINEERING BERHAD (10039-P)(Incorporated in Malaysia under the Companies Act, 1965)

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AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions, with or without modifications:

5. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act 1965, the Articles of Association of the Company and theapprovals from the relevant governmental and/or regulatory authorities, the Directors be and are hereby empoweredto issue shares in the Company from time to time and upon such terms and conditions and for such purposes asthe Directors may in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuantto this resolution does not exceed ten (10) per cent of the issued share capital of the Company for the time beingAND THAT the Directors be and are also hereby empowered to obtain the approval from Bursa Malaysia SecuritiesBerhad for the listing and quotation of the additional shares so issued AND THAT such authority shall continue inforce until the conclusion of the next Annual General Meeting of the Company.”

6. PROPOSED CHANGE OF NAME OF THE COMPANY TO DAGANG NEXCHANGE BERHAD

“THAT the name of the Company be changed from TIME Engineering Berhad to Dagang NeXchange Berhad witheffect from the date of Certificate of Incorporation on Change of Name of Company to be issued by the CompaniesCommission of Malaysia and that the Memorandum and Articles of Association of the Company be amendedaccordingly, wherever the name of the Company appears AND THAT the Directors and/or the Company Secretarybe and are hereby authorised to give effect to the Proposed Change of Company Name with full power to assent toany condition, modification, variations and/or amendments as may be required by the relevant authorities.

7. To transact any other business of which due notice shall have been given in accordance with the Companies Act1965 and the Company’s Articles of Association.

FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member who shall be entitled to attend this 44th AGM, theCompany shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with Article 55(b) of the Company’s Articles of Association andSection 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 5 May 2014.Only a depositor whose name appears on the Record of Depositors as at 5 May 2014 shall be entitled to attend the said meeting or appoint proxiesto attend and/or vote on his/her behalf.

By Order of the Board

KEH CHING TYNG, MAICSA 7050134Company Secretary

Kuala Lumpur18 April 2014

(continued)

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Resolution 11

Special Resolution 1

NOTES RELATING TO PROXY

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act 1965 shall not applyto the Company.

2. The Form of Proxy must be signed by the appointer or his attorney duly authorised in writing; and in the case of a corporation shall be eitherunder its common seal or signed by its attorney or by an officer on behalf of the corporation.

3. A member of the Company holding 1,000 shares or less in the Company shall be entitled to appoint one (1) proxy to attend and vote at thesame meeting. A member holding more than 1,000 shares in the Company shall be entitled to appoint a maximum of two (2) proxies to attendand vote at the same meeting and such appointment shall be invalid unless the member specifies the proportion of his/her shareholding tobe represented by each proxy.

4. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it mayappoint at least one (1) proxy but not more than two (2) proxies in respect of each securities account it holds which is credited with ordinaryshares of the Company. The appointment of two (2) proxies in respect of any particular securities account shall be invalid unless theauthorised nominee specifies the proportion of its shareholding to be represented by each proxy.

5. Where a member is an Exempt Authorised Nominee (“EAN”) as defined under the Securities Industry (Central Depositories) Act 1991 whichholds ordinary shares in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to thenumber of proxies which the EAN may appoint in respect of each omnibus account it holds.

6. In the event the Member duly executes the Form of Proxy but does not name any proxy, such Member shall be deemed to have appointedthe Chairman of the meeting as his proxy.

7. Any alterations in the Form of Proxy must be initialed. The Form of Proxy duly completed must be deposited at the Company’s ShareRegistrar’s Office, Mega Corporate Services Sdn Bhd at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 KualaLumpur not less than twenty four (24) hours before the time fixed for holding the Meeting or any adjournment thereof in the followingmanner:-• By hand and post; and• By facsimile at 03-27325388 and to follow-up with the original Form of Proxy, which the original form must also be deposited at the

said Company’s Share Registrar’s Office not less than the said 24 hours.

NOTES TO THE AGENDA

Agenda 1 This agenda item is meant for discussion only as the provisions of Section 169(1) of the Companies Act 1965 do not require shareholders toapprove annual audited financial statements and hence it is not put forward for voting.

Agenda 3The proposed Resolution 9 is intended to seek mandate from the shareholders to allow the Company to pay Directors’ Fees to the Non-ExecutiveDirectors on a quarterly basis after the end of each quarter. The Directors’ Fees for the Non-Executive Directors are based on the existing ratesas approved by the shareholders during the 38th AGM held on 18 June 2008.


(continued)

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EXPLANATORY NOTES ON SPECIAL BUSINESS

1. Resolution 11 : Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965

The proposed Resolution 11 is intended to seek a general mandate for the Directors of the Company to issue and allot shares in the Companyup to an amount not exceeding in total 10% of the issued share capital of the Company for the time being, for such purposes as the Directorsconsider will be in the best interest of the Company without convening a general meeting. This authority, unless revoked or varied by theshareholders of the Company in general meeting will expire at the conclusion of the next Annual General Meeting.

The general mandate for issue of shares will provide flexibility to the Company for any possible fund raising activities, including but notlimited to further placing of shares for the purpose of funding future investment, working capital and/or acquisition.

2. Special Resolution 1 : Proposed Change of Name of the Company to Dagang NeXchange Berhad

The proposed Special Resolution 1 above on the Proposed Change of Name of the Company to Dagang NeXchange Berhad is to better reflectthe new corporate identity of the Company and its Group under its intended re-branding exercise.

EXPLANATORY NOTES ON VOTING PROCEDURES

1. Pursuant to Article 63 of the Company’s Articles of Association, voting in respect of Resolutions 1 to 11 and Special Resolution 1 will be ona show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by either:• the Chairman (being a person entitled to vote); or• not less than two (2) members present in person or by proxy and entitled to vote; or• a member present in person or by proxy and representing not less than one-tenth (1/10) of the total voting rights of all the members

having the right to vote at the meeting; or• a member present in person or by proxy and 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 (1/10) of the total sum paid up on all the shares conferringthat right.

2. In accordance with Article 69 of the Company’s Articles of Association, the votes of members are calculated based on the voting methodwhere on a show of hands every person present who is a member or proxy of a member shall have one (1) vote, and on a poll every memberwho is present or by proxy shall have one (1) vote for every share of which he is a holder.

3. Special Resolution 1 shall be passed with a majority vote of not less than three-fourth (3/4) of such members as being entitled to vote inperson or by proxy.

4. A declaration by the Chairman of the Meeting that a resolution has on a show of hands or on a poll been carried either unanimously or bya particular majority shall be conclusive evidence of the passing of the resolution. In the case of an equality of votes, whether on a show ofhands or on a poll, Article 66 of the Company’s Articles of Association provides that the Chairman of the Meeting at which the show of handstakes place or at which the poll is demanded shall be entitled to a second or casting vote.

ABSTENTION FROM VOTING

1. Any Director referred to in Resolutions 1, 2, 3, 4, 5, 6, 7 and 8, who is a shareholder of the Company will abstain from voting on the resolutionin respect of his or her re-election at the 44th AGM.

2. All the Non-Executive Directors of the Company who are shareholders of the Company will abstain from voting on Resolution 9 concerningremuneration to the Non-Executive Directors at the 44th AGM.

(continued)

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ANNEXURE A

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ADMINISTRATIVE DETAILS

REGISTRATION

1. Registration starts from 8.30 a.m. to 10.00 a.m.

2. Please read the signage to ascertain where you should registeryourself for the meeting and join the queue accordingly.

3. Please produce your original Identity Card (IC) to the registrationstaff for verification.

4. After the verification, you are required to write your name and signon the Attendance List placed on the Registration table.

5. You will also be given an identification tag. No person will beallowed to enter the meeting room without the identification tag.There will be no replacement in the event that you lose or misplacethe identification tag.

6. No person will be allowed to register on behalf of another personeven with the original IC of that other person.

7. The registration counter will handle only verification of identity andregistration. If you have any clarification or enquiry, please proceedto the Help Desk.

HELP DESK

1. Please proceed to Help Desk for any clarification or enquiry.

2. The Help Desk will also handle revocation of proxy’s appointment.

GENERAL MEETING RECORD OF DEPOSITORS

For the purpose of determining a member who shall be entitled toattend the 44th AGM, the Company shall be requesting Bursa MalaysiaDepository Sdn. Bhd. in accordance with Article 55(b) of theCompany’s Articles of Association and Section 34(1) of the SecuritiesIndustry (Central Depositories) Act, 1991 to issue a General MeetingRecord of Depositors as at 5 May 2014. Only the depositor whose nameappears in the Record of Depositors as at 5 May 2014 shall be entitledto attend the said meeting or appoint proxies to attend and/or vote onhis/her behalf.

PROXY

1. A member entitled to attend and vote is entitled to appointproxy/proxies, to attend and vote instead of him. If you are unableto attend the meeting and wish to appoint a proxy to vote on yourbehalf, please submit your Form of Proxy in accordance with thenotes and instructions printed therein.

2. If you have submitted your Form of Proxy prior to the meeting andsubsequently decided to attend the meeting yourself, pleaseproceed to the Help Desk to revoke the appointment of your proxy.

3. If you wish to submit your Form of Proxy by fax, please fax to theCompany’s Share Registrar’s office, Mega Corporate Services SdnBhd at Fax No. 03-2732 5388/03-2732 5399. Please also ensurethat the original Form of Proxy is deposited at the Company’sShare Registrar’s office not less than 24 hours before the timeappointed for holding the meeting.

ANNUAL REPORT 2013

1. The Annual Report 2013 is available on the Company’s website atwww.teb.com.my under Investor Relations and Bursa Malaysia’swebsite at www.bursamalaysia.com under CompanyAnnouncements.

2. If you wish to request for printed copy of the Annual Report 2013,please forward your request by completing the Request Formprovided by us. We will send to you by ordinary post within four (4)market days from the date of receipt of the Request Form.

ENQUIRY

If you have any enquiry prior to the meeting, please contact thefollowing persons during office hours or e-mail us [email protected]:

1. TIME Engineering BerhadTower 3, Avenue 5The Horizon, Bangsar SouthNo. 8 Jalan Kerinchi59200 Kuala Lumpur

Telephone Number 03-2730 0300Fax Number 03-2713 3131

(i) Noryusnaidah Yusof 03-2730 0432

2. Mega Corporate Services Sdn BhdLevel 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail50250 Kuala Lumpur

Telephone Number 03-2692 4271Fax Number 03-2732 5388 / 03-2732 5399

(i) Zakaria Ali(ii) Alfred John

Date 12 May 2014Time 10.00 a.m.Venue Ballroom 1, Level 1, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur

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I / We .............……………………………………………………..….................................................................................................................................(Full name as per NRIC/Certificate of incorporation in CAPITAL letters)

of ................…………………………………………………………………………………………………………………...........................………………….(full address)

....…………………………………………………………………………………………………………………………………………………………... (full address)

being a member of TIME ENGINEERING BERHAD hereby appoint: ……………….………………………………………………………............…

NRIC No. (new) ……………………..................................(old)…………...................................... or failing him/her .........................................................

………………….................……............……… NRIC No. (new) …………….......…………………. (old)…………………........……...............…………...or failing him/her, the Chairman of the Meeting as my/our proxy, to vote for me/us on my/our behalf at the Forty Fourth Annual General Meeting of theCompany to be held at Ballroom 1, Level 1, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Monday, 12 May 2014at 10.00 a.m. and at any adjournment thereof, in the manner indicated below. Please indicate with an “X” in the boxes provided below how you wishyour vote to be cast. If you do not do so, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.

AS ORDINARY BUSINESS FOR AGAINST

1. To re-elect Tan Sri Abd Rahman Mamat who retires in accordance with Article 99 of theCompany’s Articles of Association and who being eligible offers himself for re-election.

2. To re-elect Datuk Samsul Husin who retires in accordance with Article 99 of the Company’sArticles of Association and who being eligible offers himself for re-election.

3. To re-elect Dato’ Zainul Azman Dato’ Zainul Aziz who retires in accordance with Article 99 ofthe Company’s Articles of Association and who being eligible offers himself for re-election.

4. To re-elect Dato’ Arif Ambrose Leonard Ng who retires in accordance with Article 99 of theCompany’s Articles of Association and who being eligible offers himself for re-election.

5. To re-elect Rosli Abdullah who retires in accordance with Article 99 of the Company’s Articlesof Association and who being eligible offers himself for re-election.

6. To re-elect Norlila Hassan who retires in accordance with Article 99 of the Company’s Articlesof Association and who being eligible offers herself for re-election.

7. To re-elect Ang Hsin Hsien who retires in accordance with Article 99 of the Company’s Articlesof Association and who being eligible offers herself for re-election.

8. To re-elect Wong Kam Yin who retires in accordance with Article 99 of the Company’s Articlesof Association and who being eligible offers himself for re-election.

9. To approve the payment of Directors’ Fees for the financial year ending 31 December 2014 ona quarterly basis after the end of each quarter.

10. Appointment of Auditors.

Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965, a copy ofwhich is annexed hereto and marked ‘Annexure A’ in the Annual Report had been received bythe Company for the nomination of Messrs. Crowe Horwath for appointment as auditors of theCompany and the intention to propose the following ordinary resolution:-

“THAT Messrs. Crowe Horwath, having consent to act, be and are hereby appointed as auditorsof the Company in place of the retiring auditors, Messrs. KPMG, and to hold office until theconclusion of the next Annual General Meeting and that the directors of the Company beauthorised to determine their remuneration.”

AS SPECIAL BUSINESS

1. Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965.

2. Proposed Change of Name of the Company

Dated this ……….. day of …………………….. 2014

…………………………………………………………Signature(s) of Shareholder(s) / Seal

FORM OF PROXY

(Before completing this form please refer to the notes below)

No. of shares held

CDS Account No.

Telephone No.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

Resolution 10

Resolution 11

Special Resolution 1

For appointment of two proxies, percentage ofshareholdings to be represented by the proxies:

No. of shares Percentage

Proxy 1

Proxy 2

Total 100 %

NOTES ON PROXY

i. Applicable to shares held through a nominee account.ii. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act 1965 shall not apply to the Company.iii. In the case of corporate member, the instrument appointing a proxy shall be (a) under its Common Seal or (b) under the hand of duly authorised officer or attorney and in the case of (b), be supported

by a certified true copy of the resolution appointing such officer or certified true copy of the power of attorney.iv. A member of the Company holding 1,000 shares or less in the Company shall be entitled to appoint one (1) proxy to attend and vote at the same meeting. A member holding more than 1,000 shares

in the Company shall be entitled to appoint a maximum of two (2) proxies to attend and vote at the same meeting and such appointment shall be invalid unless the member specifies the proportionof his/her shareholding to be represented by each proxy.

v. Where a member is an authorised nominee, as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy but not more than two (2) proxies in respectof each securities account it holds which is credited with ordinary shares of the Company. The appointment of two (2) proxies in respect of any particular securities account shall be invalid unless theauthorised nominee specifies the proportion of its shareholding to be represented by each proxy.

vi. Where a member is an exempt authorised nominee (EAN) as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficialowners in one securities account (omnibus account), there is no limit to the number of proxies which the EAN may appoint in respect of each omnibus account it holds. EAN is advised to list downthe name of proxies and the particulars of their NRIC No. (both new and old) and attach it to this Form of Proxy.

vii. Any alteration to the instrument appointing a proxy must be initialised. The instrument appointing a proxy must be deposited at the office of the Share Registrar, Mega Corporate Services Sdn Bhd atLevel 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 24 hours before the time appointed for holding the meeting.

viii. For the purpose of determining a member who shall be entitled to attend this 44th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd in accordance with Article 55(b) of theCompany’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 5 May 2014. Only a depositorwhose name appears on the Record of Depositors as at 5 May 2014 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf.

Then fold here

1st Fold here

AffixStamp

Mega Corporate Services Sdn BhdLevel 15-2, Bangunan Faber Imperial Court

Jalan Sultan Ismail

50250 Kuala Lumpur

Fold this flap for sealing

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SPEARHEADING E-COMMERCE SOLUTIONS · 2019-01-25 · Bank Muamalat Malaysia Berhad Bank Kerjasama Rakyat Malaysia Berhad CIMB Bank Berhad Public Bank Berhad Malayan Banking Berhad