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1Annual Report 2017 Asdion Berhad (590812-D)

Solutions for Growing Businesses

contentsNotice of Annual General Meeting ............ ... 2

Group Corporate Structure ....................... ... 4

Corporate Information ............................... ... 5

Directors’ Profile ........................................ ... 6

Key Management Profile ........................... ... 9

Management Discussion and Analysis .... ... 11

Audit Committee Report ......................... ... 15

Statement of Corporate Governance ...... ... 19

Statement on Risk Management and Internal Control ................................... ... 33

Additional Compliance Information ......... ... 37

Statement of Directors’ Responsibility .... ... 39

Financial Statements ............................... ... 40

List of Properties ................................... ... 137

Analysis of Shareholdings ..................... ... 138

Form of Proxy ... ................................ Enclosed

2 Asdion Berhad Annual Report 2017 (590812-D)

notice of AnnuAl GenerAl MeetinG

NOTICE IS HEREBY GIVEN THAT the Fifteenth Annual General Meeting of the Company will be held at Kenanga Room, Sri Damansara Club, Lot 23304, Persiaran Perdana, Bandar Sri Damansara, 52200 Kuala Lumpur on Tuesday, 29 August 2017 at 10:00 a.m. to transact the following business:-

A G E N D A

As Ordinary Business: 1. To receive the Audited Financial Statements for the financial year ended

31 March 2017 together with the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ fees amounting to RM302,500/- for

the financial year ended 31 March 2017. 4. To re-elect Mr. See Poh Yee, who is retiring by rotation pursuant to Article

81 of the Company’s Articles of Association. 5. To re-elect Encik Razmi bin Alias, who is retiring pursuant to Article 88

of the Company’s Articles of Association.

6. To re-appoint Messrs. SJ Grant Thornton as Auditors of the Company until the conclusion of the next Annual General Meeting and authorise the Directors to fix their remuneration.

As Special Business :To consider and, if thought fit, pass with or without any modification, the following ordinary and special resolutions:-

7. ORDINARY RESOLUTION 1- AUTHORITY TO ISSUE SHARES PURSUANT TO SECTIONS 75

AND 76 OF THE COMPANIES ACT, 2016

“THAT pursuant to Sections 75 and 76 of the Companies Act, 2016 and subject always to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to allot and issue shares in the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person or persons whomsoever as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being; AND THAT the Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND THAT such authority shall commence immediately upon passing of this resolution and continue in force until the conclusion of the next Annual General Meeting of the Company.”

8. To transact any other business of which due notice shall have been given in accordance with the Companies Act, 2016.

By order of the Board

WONG YOUN KIM (MAICSA 7018778)Company Secretary

Kuala LumpurDated: 31 July 2017

Please refer toExplanatory

Note 1

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)



EXPLANATORY NOTES

1. Item 1 of the Agenda

This agenda item is meant for discussion only, as the provision of Section 340(1) of the Companies Act, 2016 does not require a formal approval of the shareholders for the Audited Financial Statements and hence, this agenda item will not be put forward for voting.

2. Item 7 of the Agenda

The Ordinary Resolution proposed under item 6 of the Agenda is a renewal of the general mandate (“General Mandate”) for issuance of shares by the Company under Sections 75 and 76 of the Companies Act, 2016. The Ordinary Resolution, if passed, will give the Directors of the Company, from the date of the above meeting, authority to allot and issue ordinary shares from the unissued capital of the Company, from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does not exceed 10% of the issued and paid-up share capital of the Company, for such purposes as the Directors consider would be in the best interest of the Company. The authority, unless revoked or varied by the Company in a general meeting, will expire at the next Annual General Meeting.

This General Mandate will provide flexibility to the Company for allotment of shares for any possible fund raising activities, including but not limited to further placing of shares for the purpose of funding future investment project(s), working capital and/or acquisition(s).

As at the date of this Notice, no new shares of the Company were issued pursuant to the mandate granted to the Directors at the Fourteenth Annual General Meeting held on 9 September 2016 which will lapse at the conclusion of the Fifteenth Annual General Meeting.

Notes:

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 21 August 2017 (“General Meeting Record of Depositors”) shall be eligible to attend the Meeting.

(ii) A member entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend and vote instead of him. Where a member appoints two (2) proxies, the appointments shall be invalid unless the member specifies the proportion of his holdings to be represented by each proxy.

(iii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing. In the case of a corporate member, the instrument appointing a proxy must be either under its common seal or under the hand of an officer or attorney duly authorised.

(iv) The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur, Wilayah Persekutuan not less than 48 hours before the time for holding the Meeting or any adjournment thereof, at which the person named in such proxy proposes to vote and in default the proxy shall not be treated as valid. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointor.

(v) Pursuant to Rule 8.31A of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, all the resolutions set out in this Notice will be put to vote by way of poll. Independent Scrutineers will be appointed to validate the votes cast at the Fifteenth Annual General Meeting of the Company or any adjournment thereof.

Notice of Annual General Meeting

(Cont’d)


Group corporAte structure

ASDION BERHAD (590812-D)

Asdion Logistics sdn Bhd

Venice sAnctuAry sdn Bhd

Asdion digitAL AdVAnce system sdn Bhd

Asdion mAteriAL suppLy mArketing sdn Bhd

Asdion project synergy sdn Bhd

Asdion property mAnAgement sdn Bhd

tAz Logistics sdn Bhd

100%

100%

100%

100%

100%

100%

51%

SubsidiariesWholly-owned Subsidiaries




BOARD OF DIRECTORS Datuk Seri Maglin Dennis D’Cruz Selva Rasan A/L Dato’ Puspa DasChairman, Independent Non-Executive Director Independent Non-Executive Director Razmi Bin Alias See Poh YeeExecutive Director Independent Non-Executive Director Dato’ Hj. Zulkifli Bin Hj. Alias Non-Independent Non-Executive Director

corporAte inforMAtion

AUDIT COMMITTEESelva Rasan A/L Dato’ Puspa DasChairman

See Poh Yee

Dato’ Hj. Zulkifli Bin Hj. Alias

NOMINATION COMMITTEESee Poh YeeChairman

Selva Rasan A/L Dato’ Puspa Das

REMUNERATION COMMITTEEDato’ Hj. Zulkifli Bin Hj. AliasChairman

Selva Rasan A/L Dato’ Puspa Das

See Poh Yee

COMPANY SECRETARYWong Youn Kim (MAICSA 7018778)

AUDITORSSJ Grant Thornton (AF: 0737)Chartered Accountants

REGISTERED OFFICELevel 2, Tower 1, Avenue 5Bangsar South City59200 Kuala LumpurTel: 03-2241 5800Fax: 03-2282 5022

PRINCIPAL OFFICELevel 6-1, Tower 7, Avenue 3The Horizon Phase 1, Bangsar South, No. 8, Jalan Kerinchi59200 Kuala LumpurTel: 03-2242 3885 Fax: 03-2247 0677

SHARE REGISTRARSecurities Services (Holdings) Sdn. Bhd.Level 7, Menara MileniumJalan Damanlela, Pusat Bandar Damansara, DamansaraHeights, 50490 Kuala LumpurTel: 03-2084 9000Fax: 03-2094 9940

STOCK EXCHANGE LISTINGACE Market of the BursaMalaysia Securities BerhadSector: TechnologyStock Name: ASDIONStock Code: 0068

WEBSITEwww.asdiongroup.com


Directors’profile

DATUK SERI MAGLIN DENNIS D’CRUZ, aged 61, Malaysian, MaleChairman, Independent Non-Executive Director

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

Datuk Seri Maglin was in politics since 1996 where he started out as the Taman Gembira, Klang branch Chairman. Datuk Seri Maglin is currently the senior vice-president of myPPP Malaysia, representing myPPP in the governing Barisan Nasional coalition. He was also appointed as the Deputy Minister of Information, Communication & Culture in July 2010 and served one term.

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

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

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

RAZMI BIN ALIAS, aged 60, Malaysian, MaleExecutive Director

Encik Razmi Bin Alias was appointed as Executive Director of Asdion Berhad on 1 March 2017 with the designation Business Development Executive Director, who is primarily responsible for rationalisation and expansion of business in Asdion. He also in charge of overseeing the corporate functions of the Company.

Encik Razmi holds a Diploma in Business Studies from UiTM, a Degree in Business Administration from Western Michigan University, USA and a Master in Business Administration (Finance) from Central Michigan University, Michigan, USA.

His experience covers finance and corporate functions, business development and trading. He owns and serves as Director in several private limited companies which are involved in trading, manufacturing, agro-based products, logistics, and investment holding. Prior to that, he was a senior management staff in a local financial institution for fifteen (15) years.

Encik Razmi is currently the Independent Non-Executive Director for the Board of Can-One Berhad and Chee Wah Corporation Berhad, both were listed on the Main Market of Bursa Malaysia Securities Berhad.



SEE POH YEE, aged 41, Malaysian, MaleIndependent Non-Executive Director

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

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

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

SELVA RASAN A/L DATO’ PUSPA DAS, aged 45, Malaysian, MaleIndependent Non-Executive Director

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

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

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

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

Directors’Profile (Cont’d)


DATO’ HJ. ZULKIFLI BIN HJ. ALIAS, aged 61, Malaysian, MaleNon-Independent Non-Executive Director

Dato’ Hj. Zulkifli Bin Hj. Alias was appointed as an Independent Non-Executive Director of Asdion Berhad on 25 July 2016 and was subsequently re-designated as Non-Independent Non-Executive Director on 11 November 2016. Currently, Dato’ Hj. Zulkifli is a Director in all Asdion Berhad’s subsidiaries. He is also the Chairman of the Remuneration Committee and a member of Audit Committee.

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

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

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

Notes:

1. None of the Directors have family relationship with any Directors or major shareholders of Asdion Berhad.

2. None of the Directors have any conflict of interest in any business arrangement involving the Company.

3. All the Directors have had no convictions for any offenses within the past five (5) Years (other than traffic offenses (if any), nor any public sanction or penalty imposed by regulatory bodies during the financial year.

Directors’Profile (Cont’d)



KeY MAnAGeMent profile

RAZMI BIN ALIASAged 60, Malaysian, MaleBusiness Development Executive Director

The profile of Encik Razmi Bin Alias is provided under the Directors’ Profile on page 6 of this Annual Report.

ANG CHIN POOAged 50, Malaysian, MaleManaging Director of Asdion Logistics Sdn Bhd

Mr. Ang Chin Poo was appointed as Executive Director of Asdion Berhad on 18 May 2016. On 1 August 2016, he resigned from the Board of Asdion Berhad citing the reason to focus on Asdion Berhad’s logistics business.

On 1 June 2016, Mr. Ang was appointed as the Managing Director of Asdion Logistics Sdn Bhd, a wholly-owned subsidiary of the Company, which is principally involved in the business of logistics and shipping.

Mr. Ang graduated from Pittsburgh State University with a Bachelor of Business Administration majoring in Finance in 1992. He continued on in the University and earned a Master of Business Administration in 1993 and Master of Science majoring in Human Resource Development in 1994.

Mr. Ang began his career with Trans World Airlines in Kansas, United States of America as an Auditor in 1994 and was promoted to Senior Auditor a year later. In 1997, he returned to Malaysia and joined TA Asset Management Sdn Bhd as an Assistant Fund Manager. He then became a Manager in TA Unit Trust Management Berhad in 1998.

In 2000, he left TA Unit Trust Management Berhad and co-founded a company principally involved in logistics and shipping business. Mr. Ang has since accumulated more than 15 years of experience in the shipping and logistics industry.

Mr. Ang does not sit on the Board of other public companies. He does not have any family relationship with any directors and/or major shareholder of Asdion Berhad, nor any conflict of interest in any business arrangement involving the Company. He has had no convictions for any offences within the past five (5) years (other than traffic offences, if any), nor any public sanction or penalty imposed by regulatory bodies during the financial year.


YEOH SENG TEEAged 46, Malaysian, MaleGeneral Manager of Asdion Logistics Sdn Bhd

On 1 June 2017, Mr. Yeoh was appointed as the General Manager of Asdion Logistics Sdn Bhd which is principally involved in shipping and logistics business.

Mr. Yeoh graduated from Pittsburg State University with a Bachelor of Business Administration majoring in Finance in 1994. He continued on in the University and earn Master of Science majoring in Human Resource Development in 1996.

Mr. Yeoh began his career with his own family shipping business as a warehouse clerk and a forklift driver right after his completion of secondary school in 1988. He also worked as a vessel boarding officer and a supervisor for loading/discharging operation in Kuantan port. In 1990, he left to United States of America to further studies.

In 1997, Mr. Yeoh came back Malaysia and continued with his family business. Mr. Yeoh have extensive experience in shipping and logistics business.

Mr. Yeoh does not sit on the Board of other public companies. He does not have any family relationship with any directors and/or major shareholder of Asdion Berhad, nor any conflict of interest in any business arrangement involving the Company. He has had no convictions for any offences within the past five (5) years (other than traffic offences, if any), nor any public sanction or penalty imposed by regulatory bodies during the financial year.

KEY MANAGEMENT PROFILE(Cont’d)



MAnAGeMent Discussion AnD AnAlYsis

OVERVIEW OF GROUP’S BUSINESS

Asdion Berhad is an investment holding company with its subsidiaries involved in the logistics businesses, commodity trading and property development. The logistics businesses primarily involving freight forwarding , trucking services, stevedoring related services (in Kuantan Port) and civil earthwork with logistics related.

For Group geographical expansion plans, the Group has setup operation office in Klang and Penang on June 2016 and October 2016 respectively for the expansion of freight forwarding businesses and trucking services businesses. Freight forwarding cover the activities from port and customs clearance to procurements of raw materials, international freight forwarding, inventory management and distribution.

In the course of the group strategic planning and sheer determination, Asdion Berhad has disposed its loss making Singapore subsidiary during the financial year and targeting enhance its core logistics related businesses in domestics market. The Group strike to continues its efforts to improve and enhance its range of logistics services and continue its conservative approach to build the market locally and with expansion plans for the Company’s services.

Financial Highlights

Financial Year ended 31 March 2017 2016 2015 2014 2013

Revenue RM’000 7,546 19,844 4,324 4,369 6,071

Loss before taxation RM’000 (8,036) (2,469) (2,347) (3,385) (2,563)

Loss attributable toequity holders of the Company

RM’000 (7,796) (1,742) (2,810) (3,097) (2,326)

Shareholders’ fund RM’000 11,850 20,246 23,533 26,333 9,235

Total Assets RM’000 17,526 35,455 35,271 34,894 17,651

Total Borrowings RM’000 – 1,815 3,121 4,069 4,297

Loss per share Sen (6.71) (1.51) (2.49) (3.98) (3.50)

Net assets per share RM (0.10) (0.17) (0.21) (0.34) (0.14)

Return on total assets % (0.44) (0.05) (0.08) (0.12) (0.13)

Return on capital employed

% (0.65) (0.08) (0.11) (0.11) (0.25)


MANAGEMENT DISCUSSION AND ANALYSIS(Cont’d)

Share Performance

Ordinary Share Financial Year2017RM

Financial Year2016RM

Financial Year2015RM

Historical highest closing market price 0.365 1.560 0.625

Historical lowest closing market price 0.155 0.320 0.380

Closing market price 0.320 0.345 0.590

Trading Volume 26,219,500 93,290,300 2,311,000

Market Capitalisation 116,269,900 116,269,900 112,734,600

FINANCIAL REVIEW

For the financial year ended 31 March 2017, the Group recorded a consolidated revenue of RM7.5 million and a loss after taxation and non-controlling interests of RM8.05 million compare to RM19.84 million and RM2.63 million reported in previous year. The lead of drop in revenue was mainly the arose from the drop of stevedoring related activities in Kuantan Port which caused by the implementation of the moratorium on mining of commodity. Besides, the increased in loss after taxation and non controlling interests was due to the provision of impairment of RM7.35 million is provided during the financial year compare to RM0.58 million last year.

Other income of the group during financial year mainly has achieved RM3.28 million mainly resulted from the gain of disposed of subsidiaries which amounted to RM3.05 million. In last financial year, the Group was recorded other income of RM5.19 million which mainly comprised of gain from disposal of asset held-for-sale and disposal of subsidiaries with RM4.43 million and RM71 thousand respectively.

The Group’s administration expenses decreased to RM6.97 million compare to RM10.68 million, decrease mainly due to the implementation of costs monitoring and the improvement in controlling of the operational expenses. Other expenses was increased from RM1.91 to RM7.36. The higher other expenses was due to the provision of impairment of loss RM6 million was made on the interest in joint venture property development project.

The Group’s capital expenditure and working capital requirements are mainly financed by internal resources generated from operation and financing liabilities from the financial institutions. The Group’s borrowings (including finance lease liabilities) has decreased from RM4.45 million to RM1.78 million via disposed off the loss making Singapore subsidiaries (with remaining RM1.60 million outstanding borrowings as at disposal date) and the repayment of loan and financial lease liabilities during the financial year ended.

ASDION is committed to sound system of risk management which has highlighted in the Statement on Risk Management and Internal Control. The Group is exposed to the risk of recoverability of trade and other liabilities. The Group has closely monitored by the Group amongst other more stringent criteria to assess the creditworthiness of customers, vigilant monitoring of collection pursuit of overdue debts.



MANAGEMENT DISCUSSION AND ANALYSIS

(Cont’d)

OPERATION REVIEW

Logistics and civil earthworkDuring the financial year under review, the Group is recorded a revenue of RM2.1 million from the engineering segment of business. The Group is being appointed as subcontractor of civil earthwork and logistics services provider in the Refinery and Petrochemicals Integrated Development (RAPID) in Pengerang, Johor. The Group is continue secured the civil earthwork in RAPID in the upcoming financial year.

With the Group expansion plan by setup of new operation office in Klang and Penang, it has contributed approximately RM1.56 million revenue (which consist of freight forwarding and trucking services) to the Group during the financial year.

After stages of operation restructuring plan, Asdion Berhad’s subsidiary which involving stevedoring related activities in Kuantan Port is back on track (which lead to a y-o-y fall in revenue). The Group is strive to grow the market share of Stevedoring activities in Kuantan Port in order to return to profitability soonest possible.

In addition, the Group is focus in improving the efficiency of the utilisation of the Group resources (motor vehicles and plant and machinery) and producing a direct and ample impact on the bottom line and even conferring a competitive advantage.

Property developmentA subsidiary of Asdion Berhad has acquired a piece of land which located in Kemasik Terengganu. Refer to the preferred route alignment for Malaysia East Coast Railway Link (“ECRL”) revealed on March 2017, Kemasik in one of the serving stations for ECRL project.

The Group will conduct the necessary study and market research to discover the suitable proposal in the development of Kemasik Land. ASDION will continue divest into the property related activities but with cautions and selected property development focussing with low marketing risks.

Above and beyond, Asdion Berhad’s joint venture property project which involves a 3-years mix development project in Sepang Selangor has been grant an extension of time of six(6) months with effect from 1 June 2017 to fulfill the criteria of the Off-Take Agreement . Due to slow progress of the project; after the due consideration and in the view of potential accounting compliance, the Company has provided a provision of impairment on the investment in this joint venture project during the financial year. The Company will cautiously follow up on the development/progress of the project to ensure the benefit of the company is being safeguard and recoverable.

CORPORATE SOCIAL RESPONSIBILITY

Asdion is committed towards adopting and engaging in Corporate Social Responsibility (“CSR”) for the interest of all the stakeholders. The Group is committed to providing for the wellbeing of its employees and contractors at the workplace and sites through increased awareness, accountability and continued training to ensure that all activities are conducted in an ethical, environmentally responsible, safe and healthy manner.


MANAGEMENT DISCUSSION AND ANALYSIS(Cont’d)

OUTLOOK

The Group will continue focus its primarily placed on growing its business segment of logistics related services, commodity trading and property development. Despite headwinds from uncertain economic environment and weak commodity price , the management and the Board will be prudent and cautious in drawing up the Group’s business plans for the coming financial year 2018.

With the Government’s continued emphasis on infrastructure development and spending in Malaysia, The Group will ride on the momentum of the infrastructure and residential development bolster growth and secure more potential civil earthwork and logistics businesses.

The construction industry makes up an important part of the Malaysian economy due to the amount of industry linked to it and the number of people it employs. It is considered one of the most substantial economic drivers for Malaysia. The value of the construction industry is estimated at RM66.34 billion (US$15.01 billion using exchange rate of 4.4) with a forecasted growth of 6.6 percent year-on-year for 2017 and driven mainly by the civil engineering sub-sector (33.2 percent).

(Source: National Resources BMI)

Moreover, the development of ECRL will make Kuantan Port become a strategic area for Malaysia-China trade. Kuantan port is expected to received huge ships by middle of year 2018, when all industries at its hinterland in the Malaysia-China Kuantan Industrial Park are up and running, cargo volume will be boosted. It shall benefit the Group stevedoring related activities and logistics businesses in Kuantan.

In view of the increasingly competitive landscape, apart from the enhance on the current existing core business, the Group will pursue for the suitable merger and acquisition targets that complements to the Group’s overall business activities including not limited to the complements of revenue, market reach to provide and offer more complete set of solutions to the customers of the Group.



AuDit coMMittee report

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

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

Chairman:Selva Rasan A/L Dato’ Puspa Das Independent Non-Executive Director

Members:See Poh Yee Independent Non-Executive DirectorDato’ Hj. Zulkifli Bin Hj. Alias Non-Independent Non-Executive Director

The composition of the Audit Committee is in compliance with Rule 15.09 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, which requires all members of the Audit Committee to be Non-Executive Directors with a majority of them being Independent Directors whilst the Chairman of the Audit Committee, Selva Rasan A/L Dato’ Puspa Das, is a member of the Malaysian Institute of Accountants.

ROLE OF AUDIT COMMITTEE

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

• assessing the risks and control environment;• overseeing financial reporting;• evaluating the internal and external audit processes; and• reviewing conflict of interest situations and related party transactions.

TERMS OF REFERENCE

The Terms of Reference of the Audit Committee are available for reference on the Company’s website at www.asdiongroup.com.


MEETINGS AND ATTENDANCE

During the financial year ended 31 March 2017, the Audit Committee convened six (6) meetings and the attendance of each Committee member at the meetings is set out as follows:

Name of Member No. of Meetings Attended

Selva Rasan A/L Dato’ Puspa Das 6 of 6

See Poh Yee 6 of 6

Dato’ Hj. Zulkifli Bin Hj. Alias(appointed on 29 August 2016)

3 of 3

Syed Amir Syakib Arsalan Bin Syed Ibrahim(ceased office on 28 July 2016)

3 of 3

The Company Secretary who is also the Secretary to the Audit Committee attended all the Audit Committee meetings held during the financial year under review. The internal and external auditors are also invited to attend the Audit Committee meetings to present their audit plan and audit findings.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR

During the financial year ended 31 March 2017, the Audit Committee carried out the following activities in discharging their duties and responsibilities in accordance with its terms of reference:-

1. Financial reporting

(i) Reviewed the Company’s unaudited quarterly results and the annual audited financial results.

(ii) Reviewed the quarterly announcement on interim financial results and annual report of the Group before recommending the same to the Board for consideration and approval.

(iii) Reviewed the changes in and implementation of major accounting policies and practices to ensure the compliance with approved accounting standards and adherence to other legal regulatory requirements.

(iv) Kept abreast of changes in financial reporting requirements, in particular the Key Audit Matters and the Going Concern requirements under the revised auditor reporting standards, so as to ensure that the disclosure requirements were fully complied by the Group.

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

2. Matters relating to the external audit

(i) Reviewed the external auditors’ audit planning memorandum for the financial year including the adequacy of the audit team and their proposed audit fees.

(ii) Reviewed with the external auditors on the results and issues arising from their statutory audit conducted on the Group in respect of the year-end financial statements.

(iii) Had a private discussion with the external auditors on 14 February 2017 without the presence of Executive Director and the management personnel to discuss any issues or observations which require the Audit Committee’s attention. There were no areas of concern that warranted escalation to the Board.

AUDIT COMMITTEE REPORT(Cont’d)



AUDIT COMMITTEE REPORT

(Cont’d)

2. Matters relating to the external audit (cont’d)

(iv) Reviewed the performance of the external auditors, in particular on their suitability and independence. The areas of performance review including the quality of service rendered, sufficiency of resources, independency and objectivity as well as the professionalism of the audit team.

Upon the conclusion of the audit, the external auditors have given their confirmation to the Audit Committee that they are and have been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

(v) Recommended to the Board to propose to shareholders on the re-appointment of the external auditors at the Annual General Meeting of the Company.

3. Matters relating to the internal audit

(i) Approved the internal audit plan for the financial year.

(ii) Reviewed with the internal auditors in respect of their internal audit reports, including their findings of internal audit investigations, recommendations and management’s responses thereto, and ensure that appropriate actions were taken in addressing the issues reported by the internal auditors.

(iii) Reviewed the performance of the internal auditors in terms of their technical competencies and the manpower resources sufficiency.

(iv) Reviewed the adequacy of the internal audit function of the Group.

4. Related party transactions

(i) Reviewed the related party transactions and/or recurrent related party transactions that transpired within the Group and to ensure that these transactions were:-

• at arm’s length basis and in the ordinary course of business;• on terms not more favourable than those generally available to the public; and• in accordance with the mandate approved by the shareholders.

(ii) Reviewed the procedures for recurrent related party transactions to ensure that the process and controls were in place.


AUDIT COMMITTEE REPORT(Cont’d)

INTERNAL AUDIT FUNCTION

Internal audit function of the Group is outsourced to an independent professional services firm to carry out internal audit services for the Group. The internal audit performs the role of promoting an efficient and effective control environment through independent and objective internal control reviews, which helps the Group to accomplish its objectives by bringing a systematic and disciplined approach to evaluate and improve the effectiveness of the risk management, internal control and governance process.

A risk-based methodology is adopted in the planning and conduct of audits which is consistent with the Group’s established risk-based framework in identifying, designing, implementing and monitoring of risks process and control systems. The Audit Committee reviews the scope of the intended audit and approved the internal audit plan before the actual audit takes place.

The risk-based audit plans covers the review of the key operational and financial activities including the efficacy of risk management practices, efficiency and effectiveness of operational controls and compliance with relevant laws and regulations. The areas to be covered by the audit are selected on a rotational basis, with core risk areas being subject to more regular audit than those outside the defined core risk areas.

Upon the completion of the audit, key observations, management’s response and the opportunities for improvements to the system of internal control identified will be reported directly to the Audit Committee. A follow-up procedures will also be conducted to determine the status of implementation of issues highlighted in previous audit reports and ensured the management actions had been effectively implemented.

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

The fee incurred during the financial year ended 31 March 2017 in relation to the internal audit function is RM12,000.00 (FY2016: RM7,500.00).



stAteMent of corporAte GovernAnce

INTRODUCTION

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

This Statement is prepared pursuant to Rule 15.25 of the ACE Market Listing Requirements (“AMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the following describes how the Group has applied the principles set out in the Malaysian Code on Corporate Governance 2012 (“the Code”) and the extend of compliance with the principles and recommendations of the Code, except where stated otherwise, throughout the financial year ended 31 March 2017.

BOARD OF DIRECTORS

1. Board Balance

The Company is led by a Board comprising members of high caliber, which is made up of Directors who are qualified and experience in various fields. Each director comes from different professional backgrounds bringing depth and diverse areas of expertise, a wide range of experience and knowledge for effective management of the Group.

The Board presently has five (5) members, comprising of one (1) Executive Director, three (3) Independent Non-Executive Directors (including the Chairman) and one (1) Non-Independent Non-Executive Director. The composition of the members of the Board reflects a good mix of experience, background, skills and qualifications. This composition also fulfills the requirement prescribed under Rule 15.02 of the AMLR of Bursa Securities which stipulates that at least two (2) Directors or one-third (1/3) of the Board, whichever is higher, must be independent. The profile of each Director is set out in this Annual Report.

The Board does not have a specific policy on gender, ethnicity and age group for candidates to be appointed to the Board and does not have policy on setting target for female candidates in the workforce. The Board believes that candidature to the Board should be based on a candidate’s merits, capability, experience, skill-sets and integrity. There is no detriment to the Company in not adopting a formal gender, ethnicity and age group diversity policy as the Company is committed to provide a fair and equal opportunities and nurturing diversity within the Company. Hence, female representation will be considered when vacancies arise and suitable candidates identified, underpinned by the overriding primary aim of selecting the best candidate to support the achievement of the Group’s objectives.

2. Clear Roles and Responsibilities of the Board

The Board is responsible for the overall governance of the Group and plays an active role in determining the long-term direction and strategy of the Group in order to enhance shareholder value.


Statement of Corporate Governance(Cont’d)

BOARD OF DIRECTORS (CONT’D)

2. Clear Roles and Responsibilities of the Board (cont’d)

The roles and responsibilities of the Board are clearly outlined in the Board Charter, which is available on the Company’s website. The Board Charter further defines the roles and responsibilities of the Chairman, Executive Director as well as the Non-Executive Directors.

The Executive Director who leads the management team is responsible for overseeing the business development, making and implementing day-to-day operational decisions of the Company, implementation of corporate strategies and business plans and is also responsible to implement decisions approved by the Board and to communicate relevant business matters to the Board.

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

The Non-Executive Directors do not participate in the day-to-day management of the Group and do not engage in any business dealing or other relationship with the Group. This allow them to exercise their judgment objectively whilst acting in the best interest of the Group, its stakeholders, shareholders, and minority shareholders.

The Board directs the Company’s risk assessment, strategic planning, succession planning and financial and operational management to ensure that obligations to shareholders and other stakeholders are understood and met. The Board retains full and effective control of the management of the Company and its overall responsibilities which includes strategic formulations, planning, succession planning and execution of the Group’s objectives as well as monitoring management’s implementation of its decisions.

There is a schedule of matters reserved specifically for the Board’s decision which includes, among others, the approval of annual business plans and budgets, material acquisitions and disposals of assets, financial results, fund raising exercise and appointment of directors to the Board. The stewardship responsibilities and duties of the Board focuses principally on strategies, financial performance and critical business decisions that may include the following:-

i. Reviewing and adopting a strategic plan for the Group to ensure sustainability of its business and Group operations.

ii. Overseeing and evaluating the conduct of the Group to ensure the business is being properly managed.

iii. Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures.

iv. Establishing key performance indicators and monitoring the performance and competency of senior management positions and ensuring that they are of sufficient caliber.

v. Identify potential candidates from time to time to ensure suitability of the candidates as part of the succession planning process.

vi. Overseeing the development and implementation of the shareholder communications policy for the Company.

vii. Reviewing the adequacy and the integrity of the management information and internal controls system of the Company.



Statement of Corporate Governance

(Cont’d)


2. Clear Roles and Responsibilities of the Board (cont’d)

The Board also delegates the authority and responsibility of managing the day-to-day operations of the Group to the Executive Director and senior management team, whom shall at all times adhere to the direction and control of the Board. There is a clear separation of functions between the Board and the management.

The authority and responsibility delegated to the management team includes, among others, authorisation for expenditure, approval for credit facilities and other corporate actions, which will depend upon the operating requirements of the Group. The overall management responsibilities comprises the following:-

i. Execute the policies and corporate objectives set by the Board.ii. Recommend the Company’s corporate strategy to the Board for approval and upon approval,

implement the corporate strategy.iii. Assume day-to-day responsibilities for the Company’s conforming to relevant laws and

regulations and its compliance framework.iv. Manage the Company’s human, physical and financial resources to achieve the Company’s

objectives.v. Act as a conduit between the Board and the Company.

The Board ensures management is of the highest caliber and has in place programmes to train and develop management and also to provide for the orderly succession of management.

3. Responsibilities of the Chairman and the Executive Director

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

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

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

The responsibilities of the Executive Director, amongst others, are as follows:

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

contributing to the success of the Group.iv. To oversee the day-to-day management of the Group with all powers, discretions and

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




4. Independent Directors

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

The Board had conducted an evaluation of the level of independence of the three (3) Independent Directors of the Company in respect of the financial year ended 31 March 2017. The Board is satisfied that all Independent Directors have satisfactorily demonstrated that they are independent from the Management and free from any business or other relationships with the Group that could materially affect or interfere with the exercise of objective, unfettered or independent judgment to act in the best interests of the Group.

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

The Board is fully aware that the tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. As at the date of this Statement, none of the Independent Directors have served more than nine (9) years on the Board. In the event an Independent Director serves beyond a cumulative term of nine (9) years, the Independent Director may continue to serve on the Board subject to the Director’s re-designation as a Non-Independent Director or upon approval being obtained from the shareholders on a yearly basis.

5. Board Charter, Code of Ethics and Conduct and Whistleblowing Policy

The Board has adopted a Board Charter which outlines the composition and balance, roles and responsibilities, operation and processes of the Board.

The Board will review the Board Charter regularly to ensure it remains consistent with the Board’s objectives and responsibilities. The Board Charter was last reviewed in May 2016.

The Company has in place a Code of Ethics and Conduct to actively promote and establish a corporate culture which promotes ethical conduct that permeates throughout the Group. The Code of Ethics and Conduct outlines the standards of business conduct and ethical behavior which the Directors and employees should possess in discharging their duties and responsibilities and to enhance the high standards of personal integrity and professionalism of the Directors.

In adhering to good corporate governance practices, the Board has also put in place a Whistle Blowing Policy as an avenue for all employees and members of the public to report genuine concerns about unethical behavior, malpractices and illegal acts on failure to comply with regulatory requirements without fear of reprisal. The whistleblowers are assured that their identity is kept confidential and their concern will be acted upon.

A copy of the aforementioned Board Charter, Code of Ethics and Conduct and Whistle Blowing Policy are available for access on the Company’s corporate website at www.asdiongroup.com.




(Cont’d)


6. Promote Sustainability

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

The Board promotes good corporate governance in the application of sustainability practices throughout the Company, the benefits of which are believed to translate into better corporate performance. Accordingly, the Company take cognizance of the global environment, social, governance and sustainability agenda. The Group also embraces sustainability in its operations and throughout its value chain and in partnership with its stakeholders, including suppliers, customers and other organisation.

BOARD PROCESSES

1. Board Meeting

The Board meets on scheduled basis at least four (4) times a year at quarterly intervals, with additional meetings to be convened as and when necessary to consider urgent proposals or matters that require the Board’s attention. In the intervals between Board meetings, for any matters requiring Board’s sanction, the Board’s approvals will be obtained through circular resolutions.

There were eight (8) Board meetings held during the financial year ended 31 March 2017. The attendance of each Director at the Board meetings who held office during the financial year is set out below:

Name of Director Number of meetingsattended

Datuk Seri Maglin Dennis D’Cruz 7 of 8Razmi Bin Alias(appointed on 1 March 2017)

Not Applicable

Selva Rasan A/L Dato’ Puspa Das 8 of 8See Poh Yee 8 of 8Dato’ Hj. Zulkifli Bin Hj. Alias(appointed on 25 July 2016)

5 of 5

Lye Siang Long(appointed on 25 July 2016, resigned on 31 January 2017)

4 of 4

Datuk Raime Bin Unggi(resigned on 1 November 2016)

1 of 6

Low Jyh Sing(resigned on 13 September 2016)

4 of 5

Jason Minos Anak Peter(retired on 9 September 2016)

5 of 5

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

2 of 4

Ang Chin Poo(resigned on 1 August 2016)

3 of 4

Syed Amir Syakib Arsalan Bin Syed Ibrahim(resigned on 28 July 2016)

3 of 3



BOARD PROCESSES (CONT’D)

1. Board Meeting (cont’d) The Directors receive notices of meetings, typically at least three (3) days prior to the date of the

meeting, highlighting the agenda complete with relevant meeting papers via emails, which provide sufficient details on the matters to be deliberated during the meeting. Information provided is not confined to financial data but also other non-financial information, both quantitative and qualitative, which are deemed to be critical in arriving at a sound and informed decision. This will facilitates the Directors to have an informed and effective discussion at the meetings. All pertinent issues discussed at the meetings in arriving at decisions and conclusions are properly recorded and minuted.

All Directors are expected to devote sufficient time and commitment in carry out their roles and responsibilities. The Board Charter also sets out a policy where a Director is required to notify the Chairman of the Board before accepting any new directorship in other companies. Such notification is expected to include an indication of time that will be spent on the new appointment. The Chairman shall also notify the Board if he has any new directorship or significant commitments outside the Company.

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

2. Access to Information and Advice The Directors are entitled to, whether as a Board member or in their individual capacity, to take

independent professional advices at the Company’s expense in the furtherance of their duties and enables them to better understand and assess to the Company’s business and operations.

The Board has unrestricted access to and interaction with the senior management on issues under their respective purview. Where necessary, the senior management will be invited to attend Board meetings to report and update on areas of business within their responsibility so as to provide Board members insights to the business and to clarify issues raised by Board members in relation to the Group’s operations. In addition, the Board members are encouraged to share their views and insights in the course of deliberations and discussions.

Apart from Board meetings, the Directors are also provided with updates via emails as and when there are any new developments on the Group’s business or on any new statutory and regulatory requirements.

3. Company Secretary

The Company Secretary of the Company, which is also the secretary to the Board Committees, is a qualified company secretary pursuant to Section 235 of the Companies Act 2016 and a member of the Malaysian Institute of Chartered Secretaries and Administrators.

All Board members have direct and unrestricted access to the advices and services of the Company Secretary who is qualified, experienced, competent and knowledgeable on the laws and regulations, as well as directives issued by the regulatory authorities. The Directors are regularly updated and advised by the Company Secretary on new statutory and regulatory requirements and the implication on the Company and the Directors in carrying out their fiduciary duties and responsibilities.




(Cont’d)


3. Company Secretary (cont’d)

The Company Secretary also responsible to organise and attend all Board and Board Committees meetings and ensures meetings are properly convened while accurate and proper records of the proceedings and resolutions passed are maintained accordingly at the registered office of the Company and produced for inspection, if required.

4. Appointment and re-election to the Board

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

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

5. Directors’ Training

The Board acknowledges the importance of continuous education and training to enable the Directors to effective discharge their duties and responsibilities. The Directors are encouraged to attend training programmes and seminars to keep them abreast with the latest developments in the business environment and regulatory framework. In this respect, the Board continues to evaluate and determine the training needs of its Directors to ensure they are equipped with relevant knowledge and skills to discharge their duties more effectively.

All the Directors have attended and successfully completed the Mandatory Accreditation Programme as prescribed by Bursa Securities within stipulated period. The Directors will continue to undergo relevant training programmes and seminars from time to time to update themselves with the required knowledge and to keep abreast with the developments in the marketplace for further enhancement on their business acumen and professionalism in discharging their duties to the Group.

During the financial year ended 31 March 2017, the Directors attended various programmes and forums facilitated by external professionals in accordance with their respective needs in discharging their duties as Directors, details of which is set out below:




5. Directors’ Training (cont’d)

Name of Director Training / Seminar attended Date

Datuk Seri Maglin Dennis D’Cruz

- Mandatory Accreditation Programme 6 & 7 April 2016

Razmi Bin Alias - Post 2017 Budget Tax Seminar 10 November 2016

Selva Rasan A/L Dato’Puspa Das

- Pe rs idangan Cuka i Ba rang & Perkhidmatan (GST) Kebangsaan 2016

27 & 28 April 2016

- National Tax Conference 2016 9 & 10 August 2016

- SSM National Conference 2016

6 & 7 September 2016

- Seminar Percukaian Kebangsaan 2016

27 October 2016

- 2017 Budget Seminar 22 November 2016

- National GST Conference 2017 28 February 2017 & 1 March 2017

- Mastering MPERS Fully Illustrated – Translation of the Standard into Practical Examples, and Impact of 2015 Updates

23 & 24 May 2017

See Poh Yee - TM SME BIZFEST 2017: Business, Information Technology and Networking

15 March 2017

Dato’ Hj. Zulkifli Bin Hj. Alias

- Mandatory Accreditation Programme 7 & 8 September 2016

BOARD COMMITTEES

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

(i) Audit Committee

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




(Cont’d)

BOARD COMMITTEES (CONT’D)

(ii) Nomination Committee

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

Name of Committee Members Designation

See Poh Yee, Chairman Independent Non-Executive Director

Selva Rasan A/L Dato’ Puspa Das,Member

Independent Non-Executive Director

Pursuant to the terms of reference of the Nomination Committee, a copy of which is available at the Company’s website at www.asdiongroup.com, the main responsibilities of the Nomination Committee are as follows:-

• Nominate new candidates to the Board as well as Board Committees for the Board’s consideration;

• Annually review the Board’s required mix of skills, expertise, experience and other qualities including core competencies of the Directors, which every individual Directors should bring to the Board; and

• Annually assess the effectiveness of the Board as a whole, the Committees of the Board and the performance of the Directors of the Company both individually and collectively.

The Nomination Committee is empowered to identify and recommend candidates for new appointments to the Board. In evaluating the suitability of candidates, the Nomination Committee will review the profile of candidates, consider the background and experience of candidates, taking care that the candidates have sufficient time available to devote to the position, as well as to evaluate the balance of skills, knowledge and experience of the Board, before recommending the appointment to the Board for final selection.

During the financial year ended 31 March 2017, the Nomination Committee had reviewed the curriculum vitae Encik Razmi Bin Alias as Executive Director of the Company to fill the vacancy arising from the resignation of Mr. Lye Siang Long, being the sole Executive Director of the Company, on 31 January 2017. After having considered the qualification, experience and skills, the Nomination Committee recommended the said appointment to the Board. The Board concurred with the recommendation of the Nomination Committee and resolved to appoint Encik Razmi Bin Alias as the Executive Director of the Company with the designation Business Development Executive Director on 1 March 2017.

The Nomination Committee has developed certain criteria to be used in the recruitment process and annual assessment of Directors, including Independent Directors. Due consideration is given to the competencies, required mix of skills, expertise, experience and contribution that the proposed director(s) shall bring to complement the Board. The Nomination Committee has also reviewed and adopted the criteria for assessing the independence of the Independent Directors.

The Nomination Committee has conducted various assessments in respect of the Board for the financial year ended 31 March 2017, such as the assessment on the Board as a whole, the assessment on Board Committees as well as the assessment on individual Directors in relation to their performance and contribution towards meeting the needs of the Company. The annual assessments enable the Board to ensure that each of the Board members have the competency, experience, character, integrity and time availability, including the right mix of skills to effectively discharge their respective roles.




(ii) Nomination Committee (cont’d)

The assessment on the Board and the Board Committees were based on the criteria as recommended by the Code, which includes, among others, the Board structure and operations, roles and responsibilities, overall quality input to Board effectiveness, succession planning and Board governance.

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

On an overall basis, the Board is generally satisfied with the results of the assessment, whereby the size of the Board is optimum, well-balanced with the appropriate mixture of skills and experience in the composition of the Board.

(iii) Remuneration Committee

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

The members of the Remuneration Committee are as follows:-

Name of Committee Members Designation

Dato’ Hj. Zulkifli Bin Hj. Alias, Chairman Non-Independent Non-Executive Director

See Poh Yee, Member Independent Non-Executive Director

Selva Rasan A/L Dato’ Puspa Das, Member Independent Non-Executive Director

The Board will determine the level of remuneration of executive Board members, after taking into consideration the recommendations of the Remuneration Committee, which will be reward and performance based and is sufficient to attract and retain the Directors needed to run the Company successfully. The remuneration paid to the Executive Directors in respect of the financial year ended 31 March 2017 had been duly reviewed by Remuneration Committee and proposed to the Board for consideration.

Subject to the shareholders’ approval at AGM, Non-Executive Directors of the Company will be paid a basic fee as ordinary remuneration based on their experience and level of responsibilities in Committees and the Board. The fee has been fixed in sum and not by a commission or percentage of profits or turnover.

Each Director shall abstain from the deliberation and voting on matters pertaining to their own remuneration. The Board is of the view that the disclosure of remuneration by appropriate components and bands are sufficient to meet the objectives as set out in the AMLR of Bursa Securities.




(Cont’d)


(iii) Remuneration Committee (cont’d)

Directors’ remuneration to be paid for the financial year ended 31 March 2017, in aggregate, with categorisation into appropriate components, distinguishing between Executive and Non-Executive Directors, is as follows:

Category

Company Group

Executive Director

Non-Executive Directors

Total

Executive Director

Non-Executive Directors

Total

(RM) (RM) (RM) (RM) (RM) (RM)

Directors’ Fees 33,400 280,200 313,600 33,400 280,200 313,600

Salaries andBonus

102,593 – 102,593 192,201 – 192,201

Other emoluments *

21,937 – 21,937 32,677 – 32,677

Benefits-in-kind – – – – – –

Total 157,930 280,200 438,130 258,278 280,200 538,478

Notes: * Other emoluments includes employees’ provident fund and performance awards.

The number of Directors of the Company who served during the financial year ended 31 March 2017 whose remuneration falls within the following bands:

Range of Remuneration (RM)Number of Directors

Executive Non-Executive

RM50,000 and below 3 5

RM50,001 to RM100,000 1 1

RM100,001 to RM150,000 1 1

INVESTOR RELATIONS

1. Corporate Disclosure Policy

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

A Corporate Disclosure Policy has been formalised to promote comprehensive, accurate and timely disclosures of Group’s information to the regulators, shareholders and stakeholders. The Corporate Disclosure Policy is accessible at Company’s corporate website www.asdiongroup.com.



INVESTOR RELATIONS (CONT’D)

1. Corporate Disclosure Policy (cont’d) While the Board endeavours to keep all its shareholders as much informed as possible, the Company always complies with the legal and regulatory framework governing the release of material and

price-sensitive information.

2. Leverage on Information Technology for Effective Dissemination of Information

The Company’s website www.asdiongroup.com which is accessible by the general public facilitates effective dissemination of latest and up-to-date information to the investors and general public, such as corporate announcements, financial results, annual reports and etc.

3. Communications with Shareholders and Relationship with Investors

The Group recognises and practices transparency and accountability to its shareholders and investors. As such, the Group ensures timely dissemination of information through appropriate channels of communication to shareholders and investors to ensure that they are properly informed of major developments of the Group. Such information is also communicated to them through the annual reports and the various disclosures and announcements made to Bursa Securities from time to time, including the quarterly results and annual audited financial statements.

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

4. General meetings

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

In compliance with Rule 8.31A of the AMLR of Bursa Securities, all resolutions put forward to a general meeting for voting are to be decided on a poll. An independent scrutineer will be appointed to monitor the conduct of polling for each general meeting. The outcome of all resolutions proposed in general meeting, including the total number of votes cast on the poll (together with percentage) in favour of and against of each resolution, will be announced to Bursa Securities at the end of the meeting day.

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




(Cont’d)

ACCOUNTABILITY AND AUDIT

1. Financial Reporting

The Board aims to present a balanced, clear and comprehensive assessment of the Company’s and the Group’s financial positions and prospects in presenting the annual audited financial statements and the interim financial results to the shareholders, investors and regulatory authorities.

In preparing the financial statements, the Directors ensure that applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 2016 (and Companies Act, 1965 for the period before the commencement of the Companies Act, 2016) are complied with and reasonable and prudent judgments and estimates have been made.

The Directors’ overall responsibilities also include taking such steps that are reasonably open to them to safeguard the assets of the Group and for the implementation and continued operation of adequate risk management and internal control systems for the prevention of fraud and other irregularities.

The Statement of Directors’ Responsibility pursuant to Rule 15.26(a) of the AMLR of Bursa Securities is set out in page 39 of this Annual Report.

2. Risk Management and Internal Control

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

An overview of the internal control framework adopted by the Group for the financial year ended 31 March 2017 is set out on pages 33 to 36 under the Statement on Risk Management and Internal Control in this Annual Report.

3. Internal Audit

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

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



ACCOUNTABILITY AND AUDIT (CONT’D)

4. External Auditors

The external auditors play an important role in ensuring the reliability of the Company’s financial statements and providing the assurance of accuracy to shareholders. The external auditors are also invited to the AGM of the Company and are available to answer shareholders queries on the conduct of the statutory audit.

The Board, through the Audit Committee, has always maintained a formal and transparent relationship with the external auditors. The Audit Committee discusses the nature and scope of audit and reporting obligations with the external auditors before the commencement of audit engagement. During the year, the Audit Committee had a private session with the external auditors without the presence of the Executive Director and the management personnel to discuss the audit findings and any other observations which require the Audit Committee’s attention.

The Audit Committee is empowered by the Board to review any matters concerning the appointment, re-appointment, resignation and/or dismissal of external auditors and review and evaluate factors relating to the independence of the external auditors.

The Audit Committee works closely with the external auditors in establishing procedures in assessing the suitability and independence of the external auditors. A performance review on the external auditors will be conducted by the Audit Committee on an annual basis to assess the suitability and independence of the external auditors.

The Audit Committee, having reviewed all the non-audit services provided by the external auditors to the Group, is satisfied that the nature and extent of such services did not compromise the independence and objectivity of the external auditors. The terms of engagement for services provided by the external auditors had also reviewed by the Audit Committee prior to submission to the Board for approval.

The external auditors have provided a written assurance to the Audit Committee confirming that they are and have been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

Based on the recommendation from the Audit Committee after having assessed on the suitability and independence of the external auditors, the Board is of the opinion that the external auditors of the Company, Messrs. SJ Grant Thornton are suitable and independent to hold office for the ensuing year. Hence, the Board is proposing to the shareholders at the forthcoming AGM the re-appointment of Messrs. SJ Grant Thornton as the external auditors of the Company for the ensuing year.

A summary of the activities of the Audit Committee for the financial year ended 31 March 2017 is set out in the Audit Committee Report on pages 15 to 18 of this Annual Report.

STATEMENT BY THE BOARD ON CORPORATE GOVERNANCE STATEMENT

The Board has deliberated, reviewed and approved this Statement. The Board considers and is satisfied that to the best of its knowledge, the Company has fulfilled its obligations under the Code, the relevant chapters of the AMLR of Bursa Securities on corporate governance and all applicable laws and regulations throughout the financial year ended 31 March 2017.



stAteMent on risK MAnAGeMent AnD internAl control

INTRODUCTION

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

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

The Group’s risk management framework and its state of internal control for the financial year ended 31 March 2017 is outlined in ensuring section.

BOARD’S RESPONSIBILITY

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

The Board ensures that the adequacy, effectiveness and integrity of the internal control systems through regular reviews, accompanied by ongoing risk management process. To achieve this, the Board has delegated the responsibility for overseeing the adequacy and effectiveness of risk management and internal control systems to the Audit Committee.

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

RISK MANAGEMENT FRAMEWORK

An effective risk management process would help the Company to achieve its performance and profitability targets by providing risk information to enable better decisions, both in the setting of the Company’s strategy and in daily decision making.

The Board has an ongoing process for identifying, evaluating and managing significant risks faced by the Group throughout the year. The process of identifying, evaluating and managing the significant risks are embedded in the various work processes and procedures in the Group. The Group’s risk management framework establishes the context in relation to the Group’s business and sets out the process for risk identification, measurement and treatment with continuous monitoring, review and communication.


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

RISK MANAGEMENT FRAMEWORK (CONT’D)

The monitoring of the system of risk management by the Board is enhanced by the internal audits carried out with specific audit objectives and business risks identified during each internal audit cycle based on the internal audit plan approved by the Audit Committee. In addition, the internal auditors, using a risk-based approach, annually review the operational procedures and processes to ensure the integrity of the system of internal control. The internal audits carried out also in cognizance with the Group’s objectives and policies in the context of its evolving business and regularity environment, taking into consideration inputs from the Board and senior management. Opportunity for improvements to the system of internal control are identified and presented to the Audit Committee via internal audit reports.

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

KEY ELEMENTS OF INTERNAL CONTROL

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

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

• Company’s value statement, Code of Ethics and Conducts, policies and procedures are set out the principles to guide Directors’ and employees’ conduct to the highest standards of personal and corporate integrity.

• Whistleblowing Policy that promotes a culture of honesty, openness and transparency within the Group outlines the Group’s commitment towards enabling the employees to raise concerns in a responsible manner regarding any wrongdoings or malpractices without being subject to victimization or discriminatory treatment, and to have such concerns properly investigated. All complaint made will be handled with strict confidential.

• Establishment of Board’s Committees, namely Audit Committee, Nomination Committee and Remuneration Committee with formal terms of reference outlining functions and duties delegated by the Board.

• An organisational structure that is aligned to business and operational requirements, with defined lines of reporting as well as clear responsibility and accountability is in place for all business operating units.

• Systematic performance appraisal for all employees of the Group.• Experienced and competent staff are placed to support and continuously monitor the effectiveness

of the Group’s system of internal control.• The Board meets regularly and is kept updated on the Group’s activities and operations and

significant changes in the business and external environment, if any, which may results in significant risks.

• Quarterly monitoring of results and financial position by the Board.• Executive Director is closely involved in the daily operations and responsible for the business

performance of the respective business. Regular management meetings are also held to discuss on the Group’s operational, corporate, financial and other related matters whilst significant issues are brought up to the Board for further deliberation.

• Regular internal audit reviews are carried out to identify any area of improvement.



INTERNAL AUDIT FUNCTION

Internal audit is an integral and important part of the governance process. For the financial year under review, the internal audit function of the Group is outsourced to an independent professional services firm to carry out the internal audit services for the Group. The internal audit team reported directly to the Audit Committee.

The internal audit team provides an independent assessment on the efficiency and effectiveness of the Group’s internal control systems and thereafter proposes solutions to eliminate shortcomings or deficiencies. The internal audit focuses on regular and systematic reviews of the systems of financial and operational internal control in anticipating potential risk exposures over key business processes and controlling proper conduct of business of the Group.

The internal audit function adopts a risk-based approach and prepares its audit plan based on the risk assessment and evaluation framework of the Group. The internal audit plan is reviewed and approved by the Audit Committee.

The internal audit reports were forwarded to the management concerned for their attention and necessary action and will be presented to the Audit Committee. The management is responsible to implement the recommended corrective actions. Internal audit team also established follow up audits and reviews to monitor and ensure that the internal audit recommendation have been effectively implemented. During the financial year under review, the internal audit team had carried out internal audit reviews on the key operational areas of the Group, mainly focus on sales and collection functions. The scope of audit conducted was based upon the examination of policies, manuals and standards that govern the activities, processes, systems and on analysis of the data contained in the accounting and management information systems, where applicable.

The objectives of the audit were to ensure that the sales processes are consistent with the authorised and documented policies and procedures, and there are controls in place to maintain the integrity of the accounts receivable system. The review was also conducted to ensure that the processes and controls are comply with the Group’s policies and procedures, thereafter to effectively and efficiently meet the Group’s business objectives and mitigate risks in this area.

The internal audit report, including the recommended corrective action plans were circulated to the management and the same be tabled to the Audit Committee for their attention. The internal audit team reported to the Audit Committee that during the course of their audit assignment for the year, despite there were certain lapses in internal control, they had not identified any circumstances which suggest any fundamental deficiencies in the Group internal control and risk management system.

The cost incurred for the internal audit function for the financial year ended 31 March 2017 was RM12,000.00 (FY2016: RM7,500.00).

Statement on Risk Management and Internal Control

(Cont’d)


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

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

The external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the Company’s 2017 Annual Report.

Based on their review, the external auditors have reported to the Board that nothing had come to their attention that causes them to believe that this Statement on Risk Management and Internal Control is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the Group’s risk management and internal control system.

ASSURANCE TO THE BOARD

Management of the Group is accountable for providing assurance to the Board that risk management policies and internal control system are implemented and monitored.

The Executive Director and the Finance Manager have given their assurance to the Board that the Group’s risk management and internal control systems are operating adequately and effectively, in all material aspects, based on the risk management and internal control system put in place.

CONCLUSION

Based on the assurances provided and with the implementation of a risk management framework as well as the adoption of an internal control system, the Board is of the view that the risk management and internal control system of the Group for the year under review, up to the date of the issuance of the Group’s financial statements, are adequate and effective to achieve its business objectives, as well as to safeguard shareholders’ investments and all stakeholders’ interests. There were no material control failures or adverse compliance events that has resulted in any material loss to the Group.

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

This statement is made in accordance with a resolution passed by the Board of Directors on 27 July 2017.



ADDitionAl coMpliAnce inforMAtion

1. UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS

On 5 January 2017, the Company announced the proposed variation to the utilisation of proceeds of RM9.2 million derived from the disposal of a six (6) storey individually designed office cum factory building with a covered rooftop level and a single storey guard house bearing postal address at No. 9, Persiaran Industri, Bandar Sri Damansara, 52200 Kuala Lumpur.

The unutilised funds of RM1.649 million, which was initially earmarked to fund future property development project(s) of the Group have been fully utilised to defray as the working capital requirements of the Group, as below:-

Proposed utilisation

Actualutilisation

Balanceunutilised

Expectedtimeframe

forutilisation

Status

(RM’000) (RM’000) (RM’000)

Operating expenses 1,300 (1,300) – Within12 months

Fully utilised

Wages and staff benefits 349 (349) – Within12 months

Fully utilised

Total 1,649 (1,649) –

2. AUDIT AND NON-AUDIT FEES

The amount of audit fees and non-audit fees paid or payable to the Company’s external auditors and their affiliated companies by the Company and the Group in respect of the audit carried out for the financial year ended 31 March 2017 are as follows:-

Company Group (RM) (RM)Audit fees 70,000 104,000Non-audit fees 30,800 30,800

Total 100,800 134,800

3. MATERIAL CONTRACTS INVOLVING DIRECTORS, CHIEF EXECUTIVE WHO IS NOT A DIRECTOR OR MAJOR SHAREHOLDERS’ INTEREST

There were no material contracts entered into by the Company and its subsidiaries involving Directors, chief executive who is not a director or major shareholders’ interest during the financial year ended 31 March 2017.


ADDITIONAL COMPLIANCE INFORMATION(Cont’d)

4. RECURRENT RELATED PARTY TRANSACTIONS

At an Extraordinary General Meeting of the Company held on 7 March 2017, the Company had obtained the approval from the shareholders’ to allow the Company and its subsidiary to enter into recurrent related party transactions of a revenue or trading nature, which were necessary for the day-to-day operations of the Group and in the ordinary course of business, with related parties.

Pursuant to Rule 10.09 (2)(b) and Paragraph 3.1.5 of the Guidance Note 8 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, details of the recurrent related party transactions of a revenue or trading nature entered into during the financial year ended 31 March 2017 are as follows:

Transactingparty withinAsdion Group Related Parties

Nature of transaction

InterestedDirector/MajorShareholder/PersonConnected to Director or Major Shareholder

Amounttransacted

during financial

year ended 31 March

2017 (RM)

AsdionLogistics Sdn Bhd

Ire-Tex(Malaysia) Sdn Bhd(1)

Provision of trucking services by Asdion Logistics Sdn Bhd toIre-Tex (Malaysia) Sdn Bhd

Dato’ Hj. Zulkifli Bin Hj. Alias, a Director of the Company and Famous Bluechip Sdn Bhd (“FBSB”) and has a controlling interest of more than 20% in FBSB pursuant to Section 8 of the Companies Act, 2016. FBSB is a substantial shareholder of Ire-Tex Corporation Berhad.

1,273,185.74

Renting of lorries from Ire-Tex (Malaysia) Sdn Bhd by Asdion Logistics Sdn Bhd

35,000

Asdion LogisticsSdn Bhd

Jumbo Universe Sdn Bhd(1)

Provision of trucking services by Asdion Logistics Sdn Bhd to Jumbo Universe Sdn Bhd

9,820

Asdion Logistics Sdn Bhd

ZoomicAutomation (M) Sdn Bhd(1)

Provision of trucking services by Asdion Logistics Sdn Bhd to Zoomic Automation (M) Sdn Bhd

200

Notes:(1) Ire-Tex (Malaysia) Sdn Bhd, Jumbo Universe Sdn Bhd and Zoomic Automation (M) Sdn Bhd

are wholly-owned subsidiaries of Ire-Tex Corporation Berhad.

The aforesaid mandate will lapse at the conclusion of the forthcoming Fifteenth Annual General Meeting (“AGM”) of the Company.



stAteMent of Directors’ responsibilitY

The Board of Directors of Asdion Berhad is fully accountable to ensure that the financial statements are drawn up in accordance with the Companies Act, 2016 (and Companies Act, 1965 for the period before the commencement of the Companies Act, 2016) (“the Act”) and the applicable approved accounting standards prescribed by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Company and its subsidiaries (“the Group”) as at 31 March 2017 and of the results and cash flows of the Company and the Group for the financial year then ended.

In the preparation of the financial statements for the financial year ended 31 March 2017, the Directors have:-

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

b. made judgments and estimates that are prudent and reasonable; and

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

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

This statement is made in accordance with a resolution of the Board of Directors dated 27 July 2017.


finAnciAl stAteMents

Director’s Report ..................................... ... 41

Statement by Directors ........................... ... 47

Statutory Declaration ............................... ... 47

Independents’ Auditors Report ............... ... 48

Statements of Financial Position ............. ... 53

Statements of Profit or Loss and Other Comprehensive Income ........... ... 55

Statements of Changes in Equity ............ ... 57

Statements of Cash Flows ...................... ... 61

Notes to the Financial Statements .......... ... 64



Directors’ report

The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2017.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the businesses of investment holding, software development, information communication technology and related services. The principal activities of its subsidiaries are disclosed in Note 6 to the financial statements.

FINANCIAL RESULTS

The results of the Group and of the Company for the financial year ended 31 March 2017 were as follows:-

Group Company RM RM Loss for the financial year (8,048,696) (15,543,675)

Attributable to:- Owners of the Company (7,796,187) (15,543,675) Non-controlling interests (252,509) – (8,048,696) (15,543,675)

DIVIDENDS

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

RESERVES AND PROVISIONS

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

SHARE CAPITAL AND DEBENTURES

There were no changes in the issued and paid-up capital of the Company during the financial year except for transfer of share premium account pursuant to Section 618(2) of the Companies Act, 2016 amounting to RM19,672,584 to become part of the Company’s share capital.

There were no debentures issued during the financial year.


DIRECTORS’REPORT(Cont’d)

WARRANTS

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

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

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

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

During the previous financial year, 3,535,300 Free Warrants were exercised. There are 4,815,460 Free Warrants and 43,840,500 Placement Warrants of 2014/2019 remained unexercised as at 31 March 2016. There are no movement of both Free Warrants and Placement Warrants as at 31 March 2017.

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

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

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

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

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

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




DIRECTORS

The Directors who held office during the financial year end and up to the date of this report are as follows:-

See Poh Yee Selva Rasan A/L Dato’ Puspa Das Datuk Seri Maglin Dennis D’CruzDato’ Hj Zulkifli Bin Hj AliasRazmi Bin Alias (Appointed on 1.3.2017)Mohamad Farid Bin Mohd Yusof (Resigned on 15.8.2016)Jason Minos Anak Peter (Retired on 9.9.2016)Low Jyh Sing (Resigned on 13.9.2016)Datuk Raime Bin Unggi (Resigned on 1.11.2016)Lye Siang Long (Resigned on 31.1.2017)

The Director of subsidiary who held office during the financial year end and up to the date of this report as follow:-

Ang Chin Poo

DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act, 2016, the interest and deemed interests in the shares and options over shares of the Company or its subsidiaries or its holding company or subsidiaries of the holding company of these who were Directors at year end (including their spouses or children) are as follows:-

Number of ordinary shares At At 1.4.2016 Bought Sold 31.3.2017 Direct interest See Poh Yee 21,000 – – 21,000

None of the other Directors in office at the end of the financial year had any direct interest in shares in the Company or its related corporation during the financial year.

DIRECTORS’ FEES AND BENEFITS

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

Since the end of the previous financial year, no Director has received or become entitled to receive any benefits (other than as disclosed in Note 31 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.


AUDIT COMMITTEE

The Audit Committee comprises the following members:-

• Selva Rasan A/L Dato’ Puspa Das (Chairman/Independent Non-Executive Director)• See Poh Yee (Member/Independent Non-Executive Director)• Dato’ Hj Zulkifli Bin Hj Alias (Member/Non-Independent Non-Executive Director)

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

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

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

OTHER STATUTORY INFORMATION

Before the statements of financial position and statements of profit or loss and other comprehensive income of the Group and of the Company were made out, the Directors took reasonable steps:-

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there were no bad debts to be written off and that adequate provision had been made for doubtful debts; and

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

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

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

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

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

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





OTHER STATUTORY INFORMATION (CONT’D)

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

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

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

In the opinion of the Directors:-

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

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

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

These was no indemnity given to or insurance effected for the Directors and officers of the Company.

SIGNIFICANT EVENT

The significant event during the financial year is disclosed as Note 37 to the financial statements.


AUDITORS

The total amount of fees paid to or receivable by the auditors, SJ Grant Thornton, as remuneration for their services as auditors of the Company and of its subsidiaries for the financial year ended 31 March 2017 amounted to RM100,800 and RM34,000 respectively.

There was no indemnity given to or insurance effected for the auditors of the Company.

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

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

)RAZMI BIN ALIAS ) ) ) ) ) DIRECTORS ) ) ) ) ) ) )DATUK SERI MAGLIN DENNIS D’CRUZ )

Kuala Lumpur27 July 2017




In the opinion of the Directors, the financial statements set out on pages 53 to 135 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2017 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the supplementary information set out on page 136 had been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

RAZMI BIN ALIAS DATUK SERI MAGLIN DENNIS D’CRUZ


I, Razmi Bin Alias, being the Director primarily responsible for the financial management of Asdion Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 53 to 135 and supplementary information set out on page 136 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed at Kuala Lumpur in )the Federal Territory this day of )27 July 2017 ) RAZMI BIN ALIAS

Before me:

Commissioner for Oaths

stAteMent bY Directors

stAtutorY DeclArAtion


inDepenDent AuDitors’ report to tHe MeMbers of AsDion berHAD

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Asdion Berhad, which comprise the statements of financial position as at 31 March 2017 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 53 to 135.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 March 2017, and of their financial performance and of their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the requirements of the Companies Act, 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significant in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Goodwill

The riskThe Group holds a goodwill of RM4,280,351 on the statements of financial position, as detailed in Note 11 to the financial statements.

The determination of the recoverable amount of goodwill is a key judgement area as small changes in assumptions made, notably in respect of the future performance of the business and the discount rates applied to future cash flows projections can result in material different outcomes.



Report on the Audit of the Financial Statements (cont’d)

Key Audit Matters (cont’d)

Our proceduresWe evaluated the Directors’ future cash flows projections, and the process which they were drawn up, including testing the underlying calculations and comparing them to the latest Directors’ approved budgets. We challenged the Directors’ key assumptions for long term growth rates in the projections by comparing them to historical results, and economic and industry forecasts, and the discount rate used by assessing the cost of capital for the Group.

Recoverability of trade and other receivables

The riskThe Group holds trade and other receivables amounted to RM4,618,496 in the statements of financial position, as detailed in Note 13 and 14 to the financial statements.

Due to the inherent subjectivity that is involved in making judgments in relation to credit risk exposures to determine the recoverability of trade and other receivables, recoverability of trade and other receivables is considered to be significant audit risk.

Our proceduresWe evaluated and tested the controls relating to credit control and approval process and assessing the recoverability of overdue receivables by comparing management’s views of recoverability of overdue receivables to historical patterns of receipts, in conjunction with reviewing receipts subsequent to the financial year end for its effect in reducing overdue receivables as the financial year end. Also holding discussions with management personnel to challenge the management’s view on justification on the sufficiency of provision for doubtful debts, and assessing the adequacy of the disclosures in respect of credit risk.

The Group’s accounting policies in respect of receivables is outlined in Group significant accounting policies, the management’s judgement in the Group’s significant accounting estimates and judgements and disclosures in Notes 13, 14 and 34.2(a) to the financial statements.

Ability to continue as going concern

The riskAs at 31 March 2017, the Group has accumulated losses for more than 2 consecutive years. The Group’s financial statements are prepared on a going concern basis. The management assessment of the Group’s ability to continue as a going concern can be highly judgemental. We have identified going concern as a significant risk requiring special audit consideration.

Our proceduresWe have evaluated the management assessment of the Group’s ability to continue as a going concern by reviewing the profit and cash flow forecasts of the Group for the financial year ending 31 March 2018. We also evaluated and challenged the appropriateness of the key assumptions used in the profit and cash flow forecasts, especially on the forecasted revenue. We have also reviewed the supporting documents especially the letter of offer and acceptances between the Group and the customers.

INDEPENDENT AUDITORS’ REPORT

(Cont’d)


INDEPENDENT AUDITORS’ REPORT(Cont’d)

Information Other than the Financial Statements and Auditors’ Report Thereon

The Directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this auditors’ report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with MFRSs, IFRSs and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.



INDEPENDENT AUDITORS’ REPORT

(Cont’d)

Auditors’ Responsibilities for the Audit of the Financial Statements (cont’d)

As part of an audit is in accordance with approved standards on auditing in Malaysia and ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:-

- Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and of the Company’s internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.

- Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicated with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identified during our audit.

We also provided the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determined those matters that were of most significant in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We described these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.


INDEPENDENT AUDITORS’ REPORT(Cont’d)

Other Reporting Responsibilities

The supplementary information set out in page 136 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act, 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

SJ GRANT THORNTON OOI POH LIM(NO. AF: 0737) (NO: 3087/10/17(J))CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT




stAteMents offinAnciAl position

For the financial year ended 31 March 2017

Group Company Note 2017 2016 2017 2016 RM RM RM RMASSETS

Non-current assets Property, plant and equipment 4 5,755,019 10,949,243 389,647 493 Investment property 5 2,381,819 – – – Investment in subsidiaries 6 – – 5,250,008 8,053,138 Investment in associates 7 – – – 360,000 Development costs 8 – – – – Other investment 9 – – – – Interest in a joint venture 10 – 6,000,000 – 6,000,000 Goodwill 11 4,280,351 5,480,351 – – Total non-current assets 12,417,189 22,429,594 5,639,655 14,413,631

Current assets Inventories 12 – 124,867 – – Trade receivables 13 2,985,097 1,955,767 – – Other receivables 14 1,633,399 6,302,122 207,039 4,964,419 Amount due from subsidiaries 15 – – 2,398,372 3,013,508 Tax recoverable 6,725 6,692 4,694 4,694 Fixed deposit with a licensed bank 16 133,000 – 133,000 – Cash and bank balances 350,915 4,636,725 139,342 4,021,226

Total current assets 5,109,136 13,026,173 2,882,447 12,003,847

Total assets 17,526,325 35,455,767 8,522,102 26,417,478

EQUITY AND LIABILITIES EQUITY Equity attributable to owners of the Company Share capital 17 31,299,574 11,626,990 31,299,574 11,626,990 Reserves 18 (19,449,498) 8,619,759 (25,291,703) 9,924,556

11,850,076 20,246,749 6,007,871 21,551,546

Non-controlling interests 6 (303,916) (51,407) – –

Total equity 11,546,160 20,195,342 6,007,871 21,551,546


Statements ofFinancial Position (Cont’d)

Group Company Note 2017 2016 2017 2016 RM RM RM RM LIABILITIES

Non-current liabilities Deferred tax liabilities 19 251,000 230,000 – – Finance lease liabilities 20 96,544 756,881 – – Borrowings 21 – 1,441,365 – – Other payable 22 648,999 – – – Total non-current liabilities 996,543 2,428,246 – –

Current liabilities Trade payables 23 2,009,847 2,138,897 – – Other payables 22 1,214,783 5,036,560 442,402 2,665,681 Amount due to Directors 24 70,973 3,390,558 – – Amount due to subsidiaries 25 – – 2,071,829 2,200,201 Finance lease liabilities 20 1,688,019 1,883,827 – – Borrowings 21 – 373,707 – 50 Tax payable – 8,630 – –

Total current liabilities 4,983,622 12,832,179 2,514,231 4,865,932

Total liabilities 5,980,165 15,260,425 2,514,231 4,865,932

Total equity and liabilities 17,526,325 35,455,767 8,522,102 26,417,478

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



stAteMents of profit or loss AnD otHer coMpreHensive incoMe


Group Company Note 2017 2016 2017 2016 RM RM RM RM

Revenue 26 7,546,436 19,844,025 – –

Cost of sales (4,038,150) (14,075,671) – –

Gross profit 3,508,286 5,768,354 – –

Other income 3,281,762 5,193,835 367,114 5,047,814

Administration expenses (6,965,619) (10,684,316) (1,092,275) (3,852,660)

Other expenses (7,357,014) (1,906,624) (14,522,167) (8,834)

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

Finance costs (503,433) (480,538) (296,347) (263,082)

(Loss)/Profit before tax 27 (8,036,018) (2,469,289) (15,543,675) 923,238

Tax expense 28 (12,678) (164,022) – –

(Loss)/Profit for the financial year (8,048,696) (2,633,311) (15,543,675) 923,238 Other comprehensive income, net of tax:-

Items that will be reclassified subsequently to profit or loss - Foreign currency translation 37,761 9,018 – – - Loss on fair value changes of available-for-sale financial asset – (73,119) – – - Deferred taxation liability arising from revaluation – 79,772 – –

Other comprehensive income for the financial year 37,761 15,671 – –

Total comprehensive (loss)/income for the financial year (8,010,935) (2,617,640) (15,543,675) 923,238


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

Statements of Profit or Loss and Other Comprehensive Income (Cont’d)


(Loss)/Profit for the financial year attributable to:- Owners of the Company (7,796,187) (1,742,103) (15,543,675) 923,238 Non-controlling interests (252,509) (891,208) – –

(8,048,696) (2,633,311) (15,543,675) 923,238

Total comprehensive (loss)/income for the financial year attributable to:- Owners of the Company (7,758,426) (1,726,432) (15,543,675) 923,238 Non-controlling interests (252,509) (891,208) – –

(8,010,935) (2,617,640) (15,543,675) 923,238

Losses per share attributable to owners of the Company:- Losses per share (sen) - Basic 29 (6.71) (1.51)

- Diluted 29 N/A N/A



stAteMents ofcHAnGes in equitY


At

tribu

tabl

e to

owne

rs o

f the

Com

pany

No

n-di

strib

utab

le Di

strib

utab

le

Fo

reig

n

Fair

curre

ncy

va

lue

No

n

Shar

e Sh

are

War

rant

tr

ansla

tion

Capi

tal

adju

stm

ent

Reva

luatio

n Ac

cum

ulate

d

cont

rollin

g To

tal

Grou

p ca

pita

l pr

emium

re

serv

e re

serv

e re

serv

e re

serv

e re

serv

e lo

sses

Su

b-to

tal

inter

ests

eq

uity

(N

ote 1

7) (N

ote 1

8(a))

(Not

e 18(b

)) (N

ote 1

8(c))

(Not

e 18(d

)) (N

ote 1

8(e))

(Not

e 18(f

))

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

Balan

ce at

1 Ap

ril 20

15

11,

273,

460

1

8,25

8,46

4

4,5

67,9

77

71,

254

1

5,42

9

65,

807

4

,460

,295

(1

5,17

9,59

7) 2

3,53

3,08

9

979

,020

2

4,51

2,10

9

Tr

ansa

ctio

ns w

ith o

wner

s:-

Di

spos

al of

asse

t

held-

for-s

ale

–

– –

– –

– (4

,044

,780

) –

(4,0

44,7

80)

– (4

,044

,780

)Di

spos

al of

subs

idiar

ies

– –

– 5

2,01

7

– –

– 2

2,35

1

74,

368

7

9,88

5

154

,253

W

arra

nt ex

ercis

e 3

53,5

30

1,4

14,1

20

– –

– –

– –

1,7

67,6

50

– 1

,767

,650

W

aiver

of d

ebts

– –

– –

420

,860

–

–

– 4

20,8

60

– 4

20,8

60

Appr

opria

tion

of n

on-

co

ntro

lling

inter

est o

n

liquid

ation

of s

ubsid

iaries

–

– –

– –

– –

(57,

102)

(57,

102)

– (5

7,10

2)Ap

prop

riatio

n of

capit

al

rese

rve o

n liq

uidat

ion o

f

subs

idiar

ies

–

– –

–

(420

,860

) –

– 4

20,8

60

– –

–Ap

prop

riatio

n of

reva

luatio

n

rese

rve o

n liq

uidat

ion o

f

subs

idiar

ies

–

–

– –

(15,

429)

– –

15,

429

–

– –

Reali

satio

n of

reva

luatio

n

rese

rve

– –

–

– –

-

5

9,99

4

– 5

9,99

4

– 5

9,99

4 Ad

dition

al ac

quisi

tion

of

sh

ares

in su

bsidi

aries

–

–

– –

– –

– 2

19,1

02

219

,102

(2

19,1

04)

(2)

Tota

l tra

nsac

tions

with

own

ers

353

,530

1

,414

,120

–

52,

017

(1

5,42

9) –

(3,9

84,7

86)

620

,640

(1

,559

,908

) (1

39,2

19)

(1,6

99,1

27)


Statements ofChanges in Equity (Cont’d)

At

tribu

tabl

e to

owne

rs o

f the

Com

pany

No

n-di

strib

utab

le Di

strib

utab

le

Fo

reig

n

Fair

curre

ncy

va

lue

No

n

Shar

e Sh

are

War

rant

tr

ansla

tion

Capi

tal

adju

stm

ent

Reva

luatio

n Ac

cum

ulate

d

cont

rollin

g To

tal

Grou

p (c

ont’d

) ca

pita

l pr

emium

re

serv

e re

serv

e re

serv

e re

serv

e re

serv

e lo

sses

Su

b-to

tal

inter

ests

eq

uity

(N

ote 1

7) (N

ote 1

8(a))

(Not

e 18(b

)) (N

ote 1

8(c))

(Not

e 18(d

)) (N

ote 1

8(e))

(Not

e 18(f

))

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

Othe

r com

preh

ensiv

e inc

ome

fo

r the

fina

ncial

year

, net

of ta

x:-

-

Loss

on

fair

value

chan

ges

of

avail

able-

for-s

ale

fin

ancia

l ass

et

–

– –

– –

(73,

119)

– –

(73,

119)

– (7

3,11

9) -

Reve

rsal

of d

efer

red

tax

lia

bilitie

s on

reva

luatio

n –

–

– –

– –

– 7

9,77

2

79,

772

–

79,

772

- Fo

reign

curre

ncy t

rans

lation

–

– –

9,0

18

– –

– –

9,0

18

– 9

,018

Othe

r com

preh

ensiv

e inc

ome

fo

r the

finan

cial y

ear

– –

– 9

,018

–

(73,

119)

– 7

9,77

2

15,

671

–

15,

671

Loss

for t

he fin

ancia

l yea

r –

– –

– –

– –

(1,7

42,1

03)

(1,7

42,1

03)

(891

,208

) (2

,633

,311

)

To

tal c

ompr

ehen

sive l

oss

fo

r the

fina

ncial

year

–

– –

9,0

18

– (7

3,11

9) –

(1,6

62,3

31)

(1,7

26,4

32)

(891

,208

) (2

,617

,640

)

Balan

ce at

31 M

arch

2016

1

1,62

6,99

0

19,

672,

584

4

,567

,977

1

32,2

89

– (7

,312

) 4

75,5

09

(16,

221,

288)

20,

246,

749

(5

1,40

7) 2

0,19

5,34

2



At

tribu

tabl

e to

owne

rs o

f the

Com

pany

No

n-di

strib

utab

le Di

strib

utab

le

Fo

reig

n

Fair

curre

ncy

va

lue

No

n

Shar

e Sh

are

War

rant

tr

ansla

tion

Capi

tal

adju

stm

ent

Reva

luatio

n Ac

cum

ulate

d

cont

rollin

g To

tal

Grou

p (c

ont’d

) ca

pita

l pr

emium

re

serv

e re

serv

e re

serv

e re

serv

e re

serv

e lo

sses

Su

b-to

tal

inter

ests

eq

uity

(N

ote 1

7) (N

ote 1

8(a))

(Not

e 18(b

)) (N

ote 1

8(c))

(Not

e 18(d

)) (N

ote 1

8(e))

(Not

e 18(f

))

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

RM

Ba

lance

at 1

April

2016

1

1,62

6,99

0

19,

672,

584

4

,567

,977

1

32,2

89

–

(7,3

12)

475

,509

(1

6,22

1,28

8) 2

0,24

6,74

9

(51,

407)

20,

195,

342

Tran

sact

ions

with

own

ers:-

Disp

osal

of su

bsidi

aries

–

–

– (1

70,0

50)

– 7

,312

(4

75,5

09)

– (6

38,2

47)

– (6

38,2

47)

Trans

ition

to n

o-pa

r valu

e

regim

e in

31 Ja

nuar

y 201

7ˆ 1

9,67

2,58

4

(19,

672,

584)

– –

– –

–

– –

– –

Tota

l tra

nsac

tions

with

owne

rs

19,

672,

584

(1

9,67

2,58

4) –

(170

,050

) –

7,3

12

(475

,509

) –

(638

,247

) –

(638

,247

)

Othe

r com

preh

ensiv

e inc

ome

fo

r the

fina

ncial

year

, net

of ta

x:-- F

oreig

n cu

rrenc

y tra

nslat

ion

– –

–

37,

761

–

– –

– 3

7,76

1

– 3

7,76

1

Othe

r com

preh

ensiv

e inc

ome

fo

r the

finan

cial y

ear

– –

– 3

7,76

1

– –

– –

3

7,76

1

–

37,

761

Loss

for t

he fin

ancia

l yea

r –

–

– –

– –

– (7

,796

,187

) (7

,796

,187

) (2

52,5

09)

(8,0

48,6

96)

Tota

l com

preh

ensiv

e los

s

for t

he fi

nanc

ial ye

ar

– –

– 3

7,76

1

– –

– (7

,796

,187

) (7

,758

,426

) (2

52,5

09)

(8,0

10,9

35)

Balan

ce at

31 M

arch

2017

3

1,29

9,57

4

– 4

,567

,977

–

–

– –

(24,

017,

475)

11,

850,

076

(3

03,9

16)

11,

546,

160

ˆThe

new

Com

pan

ies

Act

, 20

16 (

“the

Act

”),

whi

ch c

ame

into

op

erat

ion

on 3

1 Ja

nuar

y 20

17,

abol

ishe

d t

he c

once

pt

of a

utho

rised

sha

re

cap

ital a

nd p

ar v

alue

of s

hare

cap

ital.

Con

seq

uent

ly, t

he a

mou

nts

stan

din

g to

the

cred

it of

the

shar

e p

rem

ium

acc

ount

bec

ome

par

t of t

he

Com

pan

y’s

shar

e ca

pita

l pur

suan

t to

the

tra

nsiti

onal

pro

visi

ons

set

put

in S

ectio

n 61

8(2)

of

the

Act

. N

otw

ithst

and

ing

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Statements ofChanges in Equity

(Cont’d)


Statements ofChanges in Equity (Cont’d)

Attributable to owners of the Company Non-distributable Distributable Share Share Warrant Revaluation Accumulated TotalCompany capital premium reserve reserve losses equity (Note 17) (Note 18(a)) (Note 18(b)) (Note 18(f) RM RM RM RM RM RM

Balance at 1 April 2015 11,273,460 18,258,464 4,567,977 4,044,780 (15,239,243) 22,905,438

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

Transactions with owners:-- Disposal of asset held-for-sale – – – (4,044,780) – (4,044,780)- Exercise of warrants 353,530 1,414,120 – – – 1,767,650

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

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

Loss for the financial year/ Total comprehensive loss for the financial year – – – – (15,543,675) (15,543,675)

Transition to no-par value regime on 31 January 2017ˆ 19,672,584 (19,672,584) – – – –

Balance at 31 March 2017 31,299,574 – 4,567,977 – (29,859,680) 6,007,871

ˆThe new Companies Act, 2016 (“the Act”), which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value of share capital. Consequently, the amounts standing to the credit of the share premium account become part of the Company’s share capital pursuant to the transitional provisions set put in Section 618(2) of the Act. Notwithstanding this provision, the Company may within 24 months from the commencement of the Act, use the amount standing to the credit of its share premium account of RM19,672,584 for purposes as set out in Sections 618(3) of the Act. There is no impact on the numbers of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition.

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



stAteMents ofcAsH floWs



OPERATING ACTIVITIES(Loss)/Profit before tax (8,036,018) (2,469,289) (15,543,675) 923,238

Adjustments for:- Amortisation of development costs – 8,073 – 8,073 Depreciation of property, plant and equipment 2,299,880 1,849,983 105,141 761 Impairment loss on:- - Investment in subsidiaries – – 1,350,000 – - Interest in a joint venture 6,000,000 – 6,000,000 – - Other investment – 31,525 – – - Trade receivables – 549,886 – – - Other receivables 157,014 – 125,540 – - Amount due from subsidiaries – – 5,116,813 – - Goodwill 1,200,000 – – – Interest expense 503,433 480,538 296,347 263,082 (Gain)/Loss on disposal of:- - Asset held-for-sale – (4,437,899) – (4,437,899) - Property, plant and equipment (15,280) (19,768) – – - Subsidiaries (3,054,131) (71,200) 1,353,134 – - Associate (1) – 359,999 – Interest income (6,634) (110,384) (6,294) (106,845) Share of loss of an equity accounted associate – 360,000 – – Reversal of impairment of doubtful debts (159,846) – – – Written off of bad debts – 2,000 – – Written off of deposit – 9,220 – 7,500 Written off of property, plant and equipment – 168,276 – –

Operating loss before working capital changes (1,111,583) (3,649,039) (842,995) (3,342,090)

Changes in working capital:- Inventories (26,493) 115,652 – – Receivables 3,400,263 (1,694,549) 4,731,840 79,280 Payables (1,359,807) 3,803,866 (2,223,279) 260,477 Directors (392,151) 99,769 – (106,892)

Cash generated from/(used in) operations 510,229 (1,324,301) 1,665,566 (3,109,225)

Tax paid (341) – – – Tax refunded – 8,811 – –

Net cash from/(used in) operating activities 509,888 (1,315,490) 1,665,566 (3,109,225)



INVESTING ACTIVITIES Interest received 6,634 110,384 6,294 106,845 Investment in subsidiaries – – (4) (150,002) Proceed from disposal of:- - Asset held-for-sale – 9,200,000 – 9,200,000 - Property, plant and equipment 77,872 19,771 – – - Associate, net of proceeds 1 – 1 – Net cash outflow from disposal of subsidiaries 6.1 (25,288) – – – Purchase of property, plant and equipment A (619,908) (3,927,101) (494,295) (538) Acquisition of an investment property (2,381,819) – – – Advances to subsidiaries – – (4,630,049) (3,396,106) Additional investment in an associate – (359,964) – (359,964)

Net cash (used in)/from investing activities (2,942,508) 5,043,090 (5,118,053) 5,400,235

FINANCING ACTIVITIESInterest paid (449,632) (480,538) (296,347) (263,082)Net proceeds from warrants exercised – 1,767,650 – 1,767,650 Placement of fixed deposit pledged (133,000) – (133,000) – Repayment of finance lease liabilities (841,593) (825,535) – – Repayment of borrowings (354,894) (1,305,482) (50) (1,259,197)

Net cash (used in)/from financing activities (1,779,119) (843,905) (429,397) 245,371

CASH AND CASH EQUIVALENTSNet changes (4,211,739) 2,883,695 (3,881,884) 2,536,381 Exchange differences (74,071) (114,769) – – At beginning of the financial year 4,636,725 1,867,799 4,021,226 1,484,845

At end of the financial year B 350,915 4,636,725 139,342 4,021,226

Statements ofCash Flows (Cont’d)



NOTES TO THE STATEMENT OF CASH FLOWS

A. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

Group

The Group acquired property, plant and equipment with an aggregrate costs of RM619,908 (2016: RM7,302,701) of which RMNil (2016: RM3,375,600) was acquired by means of finance lease. Cash payment of RM619,908 (2016: RM3,927,101) was made to purchase property, plant and equipment.

B. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the Statements of Cash Flows comprise the following:-

Group Company 2017 2016 2017 2016 RM RM RM RM

Cash and bank balances 350,915 4,636,725 139,342 4,021,226 Fixed deposit with a licensed bank 133,000 – 133,000 –

483,915 4,636,725 272,342 4,021,226 Less: Fixed deposit with a licensed bank (133,000) – (133,000) –

350,915 4,636,725 139,342 4,021,226

Statements ofCash Flows

(Cont’d)

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


1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on ACE Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur. The principal place of business of the Company is located at Level 6-1, Tower 7, Avenue 3, The Horizon Phase 1, Bangsar South, No.8, Jalan Kerinchi, 59200 Kuala Lumpur.

The Company is principally engaged in the businesses of investment holding, software development, information communication technology and related services. The principal activities of its subsidiaries are set out in Note 6 to the financial statements.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors passed on 27 July 2017.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

2.1 Statement of Compliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act, 2016 in Malaysia.

2.2 Basis of Measurement

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

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

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

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

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

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

notes to tHe finAnciAl stAteMents- 31 March 2017


NOTES TO THE FINANCIAL STATEMENTS

(Cont’d)


2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)

2.2 Basis of Measurement (cont’d)

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

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.Level 2 - Valuation techniques for which the lowest level input that is significant to their fair value measurement is directly or indirectly observable.Level 3 - Valuation techniques for which the lowest level input that is significant to their fair value measurement is unobservable.

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

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

2.3 Functional and Presentation Currency

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

2.4 MFRSs

2.4.1 Standards Issued and Effective

Initial application of the relevant new and revised MFRSs did not have material impact to the financial statements of the Group and of the Company.

2.4.2 Standards Issued But Not Yet Effective

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the Malaysian Accounting Standards Board but are not yet effective, and has adopted by the Group and the Company.

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


NOTES TO THE FINANCIAL STATEMENTS (Cont’d)


2.4 MFRSs (cont’d)

2.4.2 Standards Issued But Not Yet Effective (cont’d)

MFRS 9 Financial instruments

The MASB recently released MFRS 9 ‘Financial Instruments’ (2014), representing the completion of its project to replace MFRS 139 ‘Financial Instruments: Recognition and Measurement’. The new standard introduces extensive changes to MFRS 139’s guidance on the classification and measurement of financial assets and introduces a new ‘expected credit loss’ model for the impairment of financial assets. MFRS 9 also provides new guidance on the application of hedge accounting.

The standard will come into effect on or after 1 January 2018 with early adoption permitted and the management is currently assessing the financial impact of adopting MFRS 9.

MFRS 15 Revenue from contracts customers

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


MFRS 16 Leases

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




(Cont’d)



2.5 Significant Accounting Estimates and Judgements

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

2.5.1 Estimation Uncertainty

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

Useful lives of depreciable assets

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

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

A 1% difference in the expected useful lives of the property, plant and equipment

from the management’s estimates would result in approximately 0.12% (2016: 0.45%) variance in the Group’s and the Company’s profit for the financial year.

Fair value measurement and valuation processes

Some of the Group’s assets and liabilities are measured at fair value for financial reporting. Significant judgement is involved in determining the appropriate valuation techniques and inputs for fair value measurements where active market quotes are not available.

In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. Management makes maximum use of market inputs, and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in measuring the assets and liabilities. Where Level 1 inputs are not available, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm’s length transaction at the end of the reporting date. For the valuation of land and buildings, the Group engages third party qualified valuers to perform the valuation.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in the Note 3 to the financial statements.




2.5 Significant Accounting Estimates and Judgements (cont’d)

2.5.1 Estimation Uncertainty (cont’d)

Impairment of intangible assets

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

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

Further details of the carrying values, key assumptions applied in the impairment assessment of intangible assets and the assumptions are disclosed in Note 11 to the financial statements.

A 1% increase of the discount rate applied in the impairment test would result in approximately 9.53% (2016: 1.15%) variance in the Group’s impairment test’s net present value.

Impairment of joint venture

The carrying amount of joint venture is reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of the impairment loss. For the purpose of impairment testing of non-financial assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit to which the asset belongs to.

A non-financial asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset.



(Cont’d)



2.5 Significant Accounting Estimates and Judgements (cont’d)

2.5.1 Estimation Uncertainty (cont’d)

Impairment of loans and receivables

The Group assesses at end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience of assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

2.5.2 Significant Management Judgement

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

Classification between investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. The Group accounts for the portions separately if the portions could be sold separately (or leased out separately under a finance lease). If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.

Leases

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

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



3. SIGNIFICANT ACCOUNTING POLICIES

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

3.1 Consolidation

3.1.1 Subsidiaries

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

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

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

3.1.2 Basis of Consolidation

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

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

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

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



(Cont’d)


3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

3.1 Consolidation (cont’d)

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

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

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

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

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

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

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

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





3.1.4 Loss of Control

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

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

3.1.5 Non-controlling Interests

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

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

3.1.6 Associates and Joint Arrangements

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

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

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



(Cont’d)




3.1.6 Associates and Joint Arrangements (cont’d)

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

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

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

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

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

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

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





3.1.6 Associates and Joint Arrangements (cont’d)

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

3.2 Foreign Currency Translation

Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the measurement of monetary items at year-end exchange rates, whether realised or unrealised, are recognised in profit or loss except for exchange differences arising from monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

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

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

3.3 Tax Expense

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



(Cont’d)



3.3 Tax Expense (cont’d)

3.3.1 Current Tax

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

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

3.3.2 Deferred Tax

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

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

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

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

3.3.3 Goods and Services Tax

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




3.3 Tax Expense (cont’d)

3.3.3 Goods and Services Tax (cont’d)

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

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

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

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

3.4 Property, Plant and Equipment

Property, plant and equipment are initially stated at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

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

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

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

Depreciation is recognised on the straight-line method in order to write off the cost of each asset over its estimated useful life as follows:-

Leasehold properties Over the unexpired lease period or 2% whichever is shorterRenovations 20 to 33.3%Computers 33.3%Motor vehicles 20%Plant and machinery 10%Office equipment, furniture and fittings 10% to 20%



(Cont’d)



3.4 Property, Plant and Equipment (cont’d)

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

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

3.5 Investment Property

Investment property is property held either to earn rental income or for capital appreciation or both, but not for sale in the ordinary cost of business, use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition and subsequently at fair value with any change therein recognised in profit or loss.

Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials, direct labour, and other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. It excludes costs of day-to-day servicing of an investment property.

Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. Valuations are performed as of the financial position date by professional valuers who hold recognised and relevant professional qualifications and have recent experience in the location and category of the investment property being valued. Where the fair value of the investment property under construction is not reliably determinable, it is measured at cost until either its fair value becomes reliably determinable or construction is complete, whichever is earlier.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from its use and no future economic benefits are expected from the disposal. Any gain or loss arising from derecognition of investment property is recognised in profit or loss. However, when an investment property that was previously classified as property, plant and equipment is sold, any related amount in the revaluation reserve is transferred to unappropriated profits.

When an item of property, plant and equipment is transferred to investment property following a change in its use, any difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised directly in equity as a revaluation of property, plant and equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in profit or loss. Upon disposal of an investment property, any surplus previously recorded in equity is transferred to unappropriated profits; the transfer is not made through profit or loss.




3.5 Investment Property (cont’d)

When the use of an investment property changes and resulted in it being reclassified as property, plant and equipment, the fair value at the date of reclassification becomes its cost for subsequent accounting.

3.6 Intangible Assets

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

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

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

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

3.6.1 Research and Development Expenditure

Research expenditure are expensed as incurred.

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

(a) its ability to measure reliably the expenditure attributable to the asset under development;

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

the asset under development.



(Cont’d)



3.6 Intangible Assets (cont’d)

3.6.1 Research and Development Expenditure (cont’d)

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

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

3.7 Financial Instruments

3.7.1 Initial recognition and measurement

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

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

3.7.2 Financial Assets – Categorisation and Subsequent Measurement

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

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

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

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




3.7 Financial Instruments (cont’d)

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

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

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

Loans and receivables

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

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

Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either

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

Available-for-sale financial assets are measured at fair value subsequent to the initial

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

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



(Cont’d)



3.7 Financial Instruments (cont’d)

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

Available-for-sale financial assets (cont’d) Investment in equity instruments that do not have a quoted market price in an active

market and whose fair value cannot be reliably measured are measured at cost less impairment loss.

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

3.7.3 Financial Liabilities - Categorisation and Subsequent Measurement

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

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

and (c) financial guarantee contracts.

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

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

Other liabilities measured at amortised cost

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

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

Financial guarantee contracts

Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specific debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation.




3.8 Impairment of Assets

3.8.1 Non-Financial Assets

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

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

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

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

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



(Cont’d)



3.8 Impairment of Assets (cont’d)

3.8.2 Financial Assets

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

Financial assets carried at amortised cost

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

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

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

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




3.8 Impairment of Assets (cont’d)

3.8.2 Financial Assets (cont’d)

Available-for-sale financial assets

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

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

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

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

3.9 Inventories

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

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



(Cont’d)



3.10 Cash and Cash Equivalents

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

For the purpose of the statements of cash flows, cash and cash equivalents are presented net of fixed deposit pledged.

3.11 Borrowing Costs

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

3.12 Leases

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

3.12.1 Finance Lease

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

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

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

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

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




3.12 Leases (cont’d)

3.12.2 Operating Lease

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

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

3.13 Revenue Recognition

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

(a) Sale of Goods

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

(b) Services

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

(c) Interest Income

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

(d) Management fee

Management fee is recognised when services are rendered.



(Cont’d)



3.14 Employee Benefits

3.14.1 Short-term Employee Benefits

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

3.14.2 Defined Contribution Plan

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

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

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

3.15 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified to make strategic decisions. Additional disclosure on each of these segments is shown in Note 33 to the financial statements.

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




3.16 Equity and Reserves

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

Prior to Companies Act, 2016 which came into operation on 31 January 2017, incremental external costs directly attributable to the issuance of new shares are deducted against the share premium account. Effective on 31 January 2017 and subsequent period, incremental external costs directly attributable to the issuance of new shares are deducted against equity.

Accumulated losses include all current and prior financial year accumulated losses.

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

3.17 Earnings per Ordinary Share

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

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

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

3.18 Related Parties

A related party is a person or entity that is related to the entity that is preparing its financial statements (“the reporting entity”). A related party transaction is a transfer of resources, services or obligations between the reporting entity and its related party, regardless of whether a price is charged.

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

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



(Cont’d)



3.18 Related Parties (cont’d)

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

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

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

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

member of the key management personnel of the reporting entity.(viii) the entity, or any member of a group of which it is a party, provides key management

personnel services to the reporting entity or to the parent of the reporting entity.

3.19 Provisions

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

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed.

3.20 Contingencies

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



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(Cont’d)


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

Office equipment, Motor furniture Renovations Computers vehicles and fittings TotalCompany RM RM RM RM RM At cost At 1 April 2015 121,043 629,477 335,350 661,287 1,747,157Additions – 538 – – 538

At 31 March 2016 121,043 630,015 335,350 661,287 1,747,695Additions 423,576 4,961 – 65,758 494,295

At 31 March 2017 544,619 634,976 335,350 727,045 2,241,990

Accumulated depreciation At 1 April 2015 121,043 629,459 335,350 660,589 1,746,441Charge for the financial year – 63 – 698 761

At 31 March 2016 121,043 629,522 335,350 661,287 1,747,202Charge for the financial year 92,955 1,364 – 10,822 105,141

At 31 March 2017 213,998 630,886 335,350 672,109 1,852,343

Net carrying amount At 31 March 2017 330,621 4,090 – 54,936 389,647

At 31 March 2016 – 493 – – 493

At the end of the reporting period, the plant and equipment acquired under finance lease

arrangement are as follows:-

Group 2017 2016 RM RMAt net carrying amount :- Motor vehicles 1,786,169 2,355,463Office equipment – 11,858Plant and machinery 1,150,501 1,788,201

2,936,670 4,155,522



(Cont’d)


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

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

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

Included in the property, plant and equipment of the Group are motor vehicles and plant and machinery with net carrying amount of RM68,000 (2016: RM92,000) and RM444,837 (2016: RM601,833) respectively held in trust by a third party.

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

Group 2017 2016 RM RM

At net carrying amount:-Leasehold properties – 2,319,119

As at the end of the reporting period, the leasehold properties of the Group with carrying amount of RMNil (2016: RM3,001,496) have been pledged to licensed banks as security for banking facilities granted to the Group.

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

5. INVESTMENT PROPERTY

Group 2017 2016 RM RMFair value:-At 1 April – –Addition 2,381,819 –

At 31 March 2,381,819 –

Investment property comprises of a freehold land which is intentionly held for future development.

Investment property is initially measured at cost and subsequently at fair value. At 31 March 2017, the estimated fair value of the investment property is approximately the carrying amount of the investment property. The fair value of investment property is determined by external independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued.



5. INVESTMENT PROPERTY (CONT’D)

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

6. INVESTMENT IN SUBSIDIARIES

Company 2017 2016 RM RM

Unquoted shares, at cost- In Malaysia 6,750,008 6,750,004- Outside Malaysia – 1,453,134

6,750,008 8,203,138Less: Accumulated impairment losses At 1 April (150,000) (150,000) Impairment loss recognised during the financial year (1,350,000) –

At 31 March (1,500,000) (150,000)

5,250,008 8,053,138

Impairment loss on investment in subsidiaries have been recognised due to net assets of the subsidiaries are lower than the cost of investment.

The details of the subsidiaries are as follows:-

Name of Companies Country of Effective Incorporation Equity Interest Principal Activities 2017 2016Direct Subsidiaries % %

Asdion Digital Advance Malaysia 100 100 Adviser on solutions System Sdn. Bhd. relating to information (“ADASSB”) technology

Asdion Project Synergy Malaysia 100 100 Logistics business Sdn. Bhd. (“APSSB”)

Asdion Logistics Sdn. Bhd. Malaysia 100 100 Logistics business (“ALSB”)

Techtron Integrated Systems The Republic – 100 Software development, (S) Pte Ltd (“TIS”) ^ of Singapore information communication technology and related services



(Cont’d)


6. INVESTMENT IN SUBSIDIARIES (CONT’D)

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

Name of Companies Country of Effective Incorporation Equity Interest Principal Activities 2017 2016Direct Subsidiaries % %

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

Venice Sanctuary Malaysia 100 100 Subcontractor of civil work Sdn. Bhd. (“VSSB”)

Asdion Property Management Malaysia 100 – Dormant Sdn. Bhd. (“APMSB”) #

Asdion Material Supply Malaysia 100 – Dormant Marketing Sdn. Bhd. (“AMSMSB”) #

Subsidiaries of TIS

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

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

The above mentioned subsidiaries were audited by SJ Grant Thornton.

# On 25 May 2016, the Company acquired 2 ordinary shares of RM1 each fully paid-up capital in AMSMSB and APMSB respectively, making them wholly owned subsidiaries of the Company.

^ On 22 March 2017, the Company had entered into a Share Sale Agreement with Vaughan Litho (Singapore) Pte. Ltd. (“the Purchaser”), a company incorporated in the Republic of Singapore, to dispose the Company’s investment in TIS comprising 600,000 ordinary shares for a total cash consideration of RM100,000.

Upon completion of the disposal, TIS and its subsidiaries shall also cease to be wholly-owned subsidiaries of the Group.




6.1 Disposal of subsidiaries

2017 TIS RM

Net assets/(liabilities) Property, plant and equipment 3,705,685Inventories 162,652Trade and other receivables 383,002Cash and bank balances 25,288Tax recoverable 270Trade payables (322,175)Other payables (1,838,278)Amount due to Directors (3,159,441)Borrowings (1,595,899)Finance lease liabilities (17,088)

(2,655,984)

Gain on disposal of subsidiaries - Attributed to gain of disposed interest 2,755,984 - Realisation of foreign currency translation reserve (170,050) - Realisation of revaluation reserve 475,509 - Realisation of fair value adjustment (7,312)

3,054,131

Cash consideration on disposal 100,000Less: Cash and bank balances disposed (25,288)

74,712Less: Cash consideration included in other receivables (100,000)

Net cash outflow from disposal (25,288)

6.2 Details of non-wholly owned subsidiary with material non-controlling interest

Non-wholly owned subsidiary of the Group with material non-controlling interest (“NCI”) are as follows:-

TAZ 2017 2016 RM RM

Effective interest equity (%) 49% 49%Carrying amount of NCI (303,916) (51,407)Loss allocated to NCI (252,509) (891,208)



(Cont’d)



6.2 Details of non-wholly owned subsidiary with material non-controlling interest (cont’d)

Non-wholly owned subsidiary of the Group with material non-controlling interest (“NCI”) are as follows:- (cont’d)

TAZ RM

2017At 31 March Non-current assets 848,444Current assets 359,019Non-current liabilities (96,544)Current liabilities (1,731,155)

Net liabilities (620,236)

Financial year ended 31 MarchRevenue 266,436

Loss/Total comprehensive loss for the financial year (515,325)

Net cash outflow from operating activities (719,034)Net cash inflow from financing activities 562,920

TAZ RM

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

Net liabilities (104,911)

Financial year ended 31 MarchRevenue 9,416,957

Loss/Total comprehensive loss for the financial year (1,818,791)

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



7. INVESTMENT IN ASSOCIATES


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

- - - 360,000

The details of the associate is as follows:-

Name of companyCountry of

incorporationEffective equity

interest Principal activities

2017 %

2016 %

Sun Rock Development Sdn Bhd (“SRD”)*

Malaysia – 36 Property development

* Not audited by SJ Grant Thornton

During the financial year, the Company had entered into a Share Sale Agreement with Protasco Development Sdn. Bhd. for the disposal of 360,000 ordinary shares in the capital of SRD for a total cash consideration of RM1.

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

2016 RM

At 31 MarchNon-current assets 29,654,424Current assets 491,634Current liabilities (32,047,335)

Net liabilities (1,901,277)

For the financial year ended 31 MarchLoss/Total comprehensive loss for the financial year (391,453)

Group’s share of loss/total comprehensive loss for the financial year (360,000)



(Cont’d)


8. DEVELOPMENT COSTS

Group and Company 2017 2016 RM RM

At cost:-At 1 April 3,542,746 3,542,746Accumulated amortisation (2,284,038) (2,284,038)Accumulated impairment losses (1,258,708) (1,258,708)

At 31 March – –

Accumulated amortisationAt 1 April (2,284,038) (2,275,965)Amortisation for the financial year – (8,073)

At 31 March (2,284,038) (2,284,038)

Impairment loss is recognised for the development costs due to recoverable amount is less than its carrying amount.

9. OTHER INVESTMENT

Group 2017 2016 RM RM Quoted shares outside Malaysia, at fair value:-At 1 April 104,644 104,644Fair value adjustment (73,119) (73,119)Accumulated impairment loss (31,525) (31,525)

At 31 March – -

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

Impairment loss is recognised due to the future cash flows from the other investment are not recoverable.



10. INTEREST IN A JOINT VENTURE

Group and Company 2017 2016 RM RM

Investment in a joint venture project, at cost 6,000,000 6,000,000Less: Impairment loss during the financial year (6,000,000) –

– 6,000,000

Impairment loss is recognised due to the rejection of Development Order in relation to a property development project and that the future cash flows are not recoverable.

11. GOODWILL


At 1 April 5,480,351 5,480,351Less: Impairment loss during the financial year (1,200,000) –

At 31 March 4,280,351 5,480,351

The recoverable amount of the cash generating unit (“CGU”) is determined based on value in use calculation using cash flow projections based on financial budgets approved by the management covering a five-year period. The key assumptions used for value in use calculation are average of 25% (2016: 15%) for gross profit margin, 1% (2016: 4%) for growth rate and 12.05% (2016: 11.44%) for discount rate. With regards to the assessments of value-in-use of these CGU, management believes that no reasonably possible changes in any of the key assumptions would cause the carrying values of these units to differ materially from their recoverable amounts except for the changes in prevailing operating environment which is not ascertainable.

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

The impairment loss is recognised due to recoverable amount of the cash-generating unit is less than its carrying amount.



(Cont’d)


12. INVENTORIES


Raw materials – 123,314Finished goods – 1,553

– 124,867

Recognised in profit or lossInventories recognised as cost of sales 1,358,936 2,276,849

The Group’s inventories were derived from a wholly owned subsidiary named “TIS” which has been disposed during the financial year.

None of the inventories is carried at net realisable value.

13. TRADE RECEIVABLES


Trade receivables 3,218,180 2,507,662Less: Impairment losses (233,083) (551,895)

At 31 March 2,985,097 1,955,767

Impairment lossesAt 1 April (551,895) (4,700)Addition during the financial year – (549,886)Reversal during the financial year 159,846 –Disposal of subsidiaries 173,328 –Written off during the financial year – 2,000Translation differences (14,362) 691

At 31 March (233,083) (551,895)

The Group’s normal trade credit terms range from 30 to 90 (2016: 30 to 60) days.

Impairment loss recognised due to probability of insolvency or significant financial difficulties of the trade receivables and default or significant delay in payments.

Included in trade receivables of the Group is an amount due from companies in which a Director has interest amounting to RM1,159,286 (2016: RMNil), which is unsecured, interest free and repayable on demand.



14. OTHER RECEIVABLES


Non-trade receivables 1,319,671 5,902,634 225,606 4,634,085Less: Impairment loss recognised during the financial year (157,014) – (125,540) –

1,162,657 5,902,634 100,066 4,634,085

Deposits 396,005 342,131 59,760 285,760Prepayments 74,737 57,357 47,213 44,574

1,633,399 6,302,122 207,039 4,964,419

Included in other receivables of the Group and of the Company is an amount owing by an associate amounting to RMNil (2016: RM4,508,480) and RMNil (2016: RM4,508,480) respectively. The amount due from associate is non-trade in nature, unsecured, interest free and repayable on demand.

Included in other receivables of the Group and of the Company is an amount owing by a third party amounting to RM100,000 (2016: RMNil) for the disposal of subsidiaries.

Impairment loss recognised due to probability of insolvency or significant financial difficulties of the non-trade receivables and default or significant delay in payments.

15. AMOUNT DUE FROM SUBSIDIARIES


Amount due from subsidiariesNon-trade balances 8,611,028 4,109,351Less: Accumulated impairment losses At 1 April (1,095,843) (1,095,843) Impairment loss recognised during the financial year (5,116,813) –

At 31 March (6,212,656) (1,095,843)

2,398,372 3,013,508

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

Impairment loss recognised due to probability of insolvency or significant financial difficulties of

the subsidiaries and default or significant delay in payments.



(Cont’d)


16. FIXED DEPOSIT WITH A LICENSED BANK

The entire deposit with a licensed bank of the Group and of the Company are pledged as a security for bank guarantee facility granted to a subsidiary.

The interest rate per annum for fixed deposit with a licensed bank of the Group and of the Company is 2.95% (2016: Nil%) per annum.

17. SHARE CAPITAL

Group and Company 2017 2016 2017 2016 Number of ordinary shares RM RM

Issued and fully paid-up:-

At 1 April 116,269,900 112,734,600 11,626,990 11,273,460Issued during the financial year:- - Warrant exercise – 3,535,300 – 353,530 - Transition to no-par value regime on 31 January 2017 (Note 18(a)) – – 19,672,584 –

At 31 March 116,269,900 116,269,900 31,299,574 11,626,990

18. RESERVES


Share premium (a) – 19,672,584 – 19,672,584Warrant reserve (b) 4,567,977 4,567,977 4,567,977 4,567,977Foreign exchange translation reserve (c) – 132,289 – –Capital reserve (d) – – – –Fair value adjustment reserve (e) – (7,312) – –Revaluation reserve (f) – 475,509 – –Accumulated losses (24,017,475) (16,221,288) (29,859,680) (14,316,005)

(19,449,498) 8,619,759 (25,291,703) 9,924,556



18. RESERVES (CONT’D)

(a) Share premium

The share premium is not distributable by way of dividends and may be utilised in the manner set out in Section 618(3) of the Companies Act, 2016.

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

2017 2016 RM RM

At 1 April 19,672,584 18,258,464Movement during the financial year:-- Issuance of share capital – 1,414,120- Transition to no-par value regime on 31 January 2017* (19,672,584) –

At 31 March – 19,672,584

* The new Companies Act, 2016 (“the Act”), which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value of share capital. Consequently, the amounts standing to the credit of the share premium account become part of the Company’s share capital pursuant to the transitional provisions set out in Section 618(2) of the Act. Notwithstanding this provision, the Company may within 24 months from the commencement of the Act, use the amount standing to the credit of its share premium account of RM19,672,584 for purchase as set out in Sections 618(3) of the Act. There is no impact on the numbers of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition.

(b) Warrant reserve

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

Number of Units At At 1.4.2015 Addition Exercised 31.3.2016

Free Warrants 8,350,760 – (3,535,300) 4,815,460Placement Warrants 43,840,500 – – 43,840,500

52,191,260 – (3,535,300) 48,655,960

There are no movement of both Free Warrants and Placement Warrants as at 31 March 2017.

The warrant reserve arose from Placement Warrants on the allocation of proceeds received for private placement by reference to the fair value of the warrants, amounting to RM0.1065 per warrant and net of share issuance costs of RM101,036 incurred in relation to the private placement exercise. There is no fair value allocated to Free Warrants.



(Cont’d)



(b) Warrant reserve (cont’d)

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

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

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

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

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

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

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

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

The main features of the Warrants 2014/2019 are as follows (cont’d):-

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

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




(c) Foreign exchange translation reserve


At 1 April 132,289 71,254Foreign exchange translation during the financial year 37,761 9,018Disposal of subsidiaries (170,050) 52,017

At 31 March – 132,289

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

(d) Capital reserve

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

(e) Fair value adjustment reserve

The fair value adjustment reserve represents surplus arising from the revaluation of quoted share investment as disclosed in Note 9 to the financial statements. This reserve is not distributable as cash dividends.

(f) Revaluation reserve

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

19. DEFERRED TAX LIABILITIES


At 1 April (230,000) (141,964)Recognised in profit or loss (Note 28) (20,000) (143,000)Under provision in prior financial year (Note 28) (1,000) (19,000)Disposal of assets held-for-sale – 73,964

(251,000) (230,000)



(Cont’d)


19. DEFERRED TAX LIABILITIES (CONT’D)

The above deferred tax liabilities are made up of tax effect on temporary differences arising from:-


Carrying amount of qualifying property, plant and equipment in excess of its tax base (479,000) (230,000)Unutilised capital allowances 228,000 –

(251,000) (230,000)

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


Unabsorbed business losses 11,533,000 9,480,000 5,566,000 5,566,000Unabsorbed capital allowance 4,694,000 5,113,000 3,078,000 3,078,000Carrying amount of qualifying property, plant and equipment in excess of its tax base (400,000) (410,000) (8,000) –

15,827,000 14,183,000 8,636,000 8,644,000

20. FINANCE LEASE LIABILITIES


Minimum finance lease liabilities payments:-- not later than one year 1,764,926 2,038,323- later than one year and not later than five years 89,184 748,376- more than five years 7,360 29,658

1,861,470 2,861,357

Less: Future finance charges (76,907) (175,649)Present value of finance lease liabilities 1,784,563 2,640,708



20. FINANCE LEASE LIABILITIES (CONT’D)

The finance lease liabilities are repayable as follows:-


Current:-- not later than one year 1,688,019 1,883,827

Non-current:-- later than one year and not later than five years 89,184 727,223- more than five years 7,360 29,658

96,544 756,881

Total finance lease liabilities 1,784,563 2,640,708

The finance lease liabilities bear interest rates ranging from 0% to 5% (2016: 0% to 5%).

21. BORROWINGS


CurrentSecuredTerm loan (1) – 50 – 50Term loan (2) – 142,356 – –Bills payable – 231,301 – –

– 373,707 – 50

Non–currentSecuredTerm loan (2) – 1,441,365 – –

Total borrowings – 1,815,072 – 50

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

(a) Term loan 1

(i) legal charges over the leasehold property of the Group; and(ii) corporate guarantees issued by certain present and former subsidiaries of the

Company.



(Cont’d)


21. BORROWINGS (CONT’D)

(b) Term loan 2

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

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

The bank borrowings bears interest at rates ranging from 2.28% to 6.25% (2016: 2.5% to 6.25%) per annum.

22. OTHER PAYABLES


Current:-Non-trade payables 665,076 3,810,874 281,291 2,648,689Accrual of expenses 382,319 360,430 161,111 16,992Deposits 151,000 510,141 – –GST payable 16,388 355,115 – –

1,214,783 5,036,560 442,402 2,665,681

Non-current:-Non-trade payable 648,999 – – –

Total other payables 1,863,782 5,036,560 442,402 2,665,681

Non-trade payable amounted to RM648,999 (2016: RMNil) is related to advances from a former Director where expected to be paid later than 12 months after the end of the reporting period which are classified as non-current.

23. TRADE PAYABLES

The normal trade credit terms granted to the Group ranges from 30 to 90 (2016: 30 to 90) days.

Included in trade payables is an amount due to a company in which a Director has interest amounting to RM36,680 (2016: RMNil), which is unsecured, interest free and repayable on demand.

24. AMOUNT DUE TO DIRECTORS

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



25. AMOUNT DUE TO SUBSIDIARIES

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

26. REVENUE


Trading of goods 863,471 6,295,677Services rendered 6,682,965 13,548,348

7,546,436 19,844,025



(Cont’d)


27. (LOSS)/PROFIT BEFORE TAX

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


Amortisation of development costs – 8,073 – 8,073Written off of bad debts – 2,000 – –Director fees 313,600 901,772 313,600 893,774Reversal of non-approved Director fees (106,905) – (106,905) –Directors’ non-fee emoluments:- - Salaries, allowances and bonuses 192,201 966,857 102,593 125,726 - Defined contribution plan 32,677 91,624 21,937 18,247Depreciation of property, plant and equipment 2,299,880 1,849,983 105,141 761Impairment loss on:-- Trade receivables – 549,886 – –- Other receivables 157,014 – 125,540 –- Amount due from subsidiaries – – 5,116,813 –- Goodwill 1,200,000 – – –- Interest in a joint venture 6,000,000 – 6,000,000 –- Other investment – 31,525 – –- Investment in subsidiaries – – 1,350,000 –Interest expense:-- Finance lease 98,651 169,156 – –- Term loans 31,432 87,788 (50) 79,082- Others 373,350 223,594 296,397 184,000Rental expenses 1,379,388 914,147 169,811 –(Gain)/Loss on disposal of:-- Asset held-for-sale – (4,437,899) – (4,437,899)- Property, plant and equipment (15,280) (19,768) – –- Subsidiaries (3,054,131) (71,200) 1,353,134 –- Associate (1) – 359,999 –Realised (gain)/loss on foreign exchange (1,763) 138,326 – –Reversal of impairment loss on trade receivables (159,846) – – –Written off of deposit – 9,220 – 7,500Written off of property, plant and equipment – 168,276 – –Interest income (6,634) (110,384) (6,294) (106,845)



28. TAX EXPENSE


Current tax:-Current financial year – 8,630 Over provision in prior financial year (8,322) (6,608) (8,322) 2,022Deferred tax (Note 19):-Current financial year 20,000 143,000Under provision in prior financial year 1,000 19,000

21,000 162,000

12,678 164,022

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


(Loss)/Profit before tax (8,036,018) (2,469,289) (15,543,675) 923,238

Tax at the statutory tax rate 24% (1,928,644) (592,629) (3,730,482) 221,577

Tax effects in respect of:-Expenses not deductible for tax purposes 2,325,222 1,008,576 3,732,402 618,898Income not subject to tax (671,551) (1,094,835) – (1,091,475)Movement of deferred tax assets not recognised 394,560 776,020 (1,920) 251,000(Over)/Under provision in prior financial year - Current tax (8,322) (6,608) – – - Deferred tax 1,000 19,000 – –Effects of tax rates in different jurisdiction (99,587) 54,498 – –

12,678 164,022 – –

(a) The Company’s unabsorbed business losses and unabsorbed capital allowances which can be carried forward to offset against future taxable profit amounted to approximately RM5,566,000 (2016: RM5,566,000) and RM3,078,000 (2016: RM3,078,000) respectively.

(b) The Group’s unabsorbed business losses and unabsorbed capital allowances which can be carried forward to offset against future taxable profit amounted to approximately RM11,533,000 (2016: RM9,480,000) and RM5,644,000 (2016: RM5,113,000) respectively.



(Cont’d)


29. LOSSES PER SHARE


Loss after tax attributable to owners of the Company (7,796,187) (1,742,103)

Weighted average number of ordinary shares 116,269,900 115,271,665

Basic losses per share (sen) (6.71) (1.51)

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

30. EMPLOYEE BENEFITS EXPENSE


Salaries, wages and other emoluments 2,321,918 2,772,104 – 5,640Defined contribution plans 210,762 233,225 – –Other benefits 14,725 74,050 – –

2,547,405 3,079,379 – 5,640

31. DIRECTORS’ REMUNERATION

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


Executive Directors:-- Salaries, allowances and bonuses 192,201 966,857 102,593 125,726- Defined contribution plan 32,677 91,624 21,937 18,247

224,878 1,058,481 124,530 143,973



32. RELATED PARTY DISCLOSURES

(a) Identities of related parties

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

The outstanding balances arising from related party transaction as at the reporting date are disclosed in Note 13, 14, 15, 22, 23, 24, and 25.

(b) Significant related party transactions during the financial year are as follows:-


Sales to companies in which a Director has interest 1,283,206 –Purchases from a company in which a Director has interest 35,000 –


Management fee charge to a subsidiary 350,000 500,000

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


Key management personnel compensation:- - Salaries, allowances and bonuses 584,271 966,857 102,593 125,726 - Defined contribution plan 88,061 91,624 21,937 18,247 - Director fees 313,600 901,772 313,600 893,774

Key management personnel are defined as those persons having authority and responsibility

for planning, directing and controlling the activities of the Group and of the Company either directly or indirectly. The key management personnel include all Directors of the Group and certain members of senior management of the Group.



(Cont’d)


33. OPERATING SEGMENTS

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

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

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

Malaysia Singapore Group2017 RM RM RM

RevenueExternal revenue 4,808,365 2,738,071 7,546,436Inter-segment revenue 977,868 – 977,868

5,786,233 2,738,071 8,524,304

Adjustments and eliminations (977,868)

Consolidated revenue 7,546,436

ResultsSegment results (766,833) (346,513) (1,113,346)

Interest income 6,407 227 6,634Finance costs (447,684) (55,749) (503,433)Depreciation of property, plant and equipment (1,745,539) (554,341) (2,299,880)Other material income 3,098,317 132,704 3,231,021Other non-cash and material items of expenses (7,357,014) – (7,357,014)

(7,212,346) (823,672) (8,036,018)

Tax expense (12,678)

Consolidated loss after tax (8,048,696)



33. OPERATING SEGMENTS (CONT’D)

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments are presented under unallocated items, if any (cont’d):-


RevenueExternal revenue 18,425,852 1,418,173 19,844,025Inter-segment revenue 1,834,252 1,948,034 3,782,286 20,260,104 3,366,207 23,626,311

Adjustments and eliminations (3,782,286) Consolidated revenue 19,844,025

ResultsSegment results (4,606,235) 735,522 (3,870,713) Interest income 109,915 469 110,384Finance costs (392,477) (88,061) (480,538)Depreciation of property, plant and equipment (1,177,517) (672,466) (1,849,983)Amortisation of development costs (8,073) – (8,073)Other material income 4,437,899 90,968 4,528,867Other non-cash and material items of expenses (656,331) (242,902) (899,233) (2,292,819) (176,470) (2,469,289) Tax expense (164,022) Consolidated loss after tax (2,633,311)



(Cont’d)





AssetsSegment assets 17,519,600 – 17,519,600

Tax recoverable 6,725

Consolidated total assets 17,526,325

LiabilitiesSegment liabilities 5,729,165 – 5,729,165

Deferred tax liabilities 251,000 Consolidated total liabilities 5,980,165

Other segment itemsAdditional to non-current assets other than financial instruments:- - Property, plant and equipment 557,230 62,678 619,908 - Investment property 2,381,819 – 2,381,819

2,939,049 62,678 3,001,727






Assets Segment assets 30,591,525 4,857,550 35,449,075 Tax recoverable 6,692

Consolidated total assets 35,455,767

LiabilitiesSegment liabilities 9,902,251 5,119,544 15,021,795

Deferred tax liabilities 230,000Tax payable 8,630 Consolidated total liabilities 15,260,425

Other segment items Additional to non-current assets other than financial instruments:- - Property, plant and equipment 7,302,701 – 7,302,701



(Cont’d)



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


Gain on disposal of asset held-for-sale – 4,437,899Gain on disposal of property, plant and equipment 15,280 19,768Gain on disposal of subsidiaries 3,054,131 71,200Gain on disposal of an associate 1 –Realised gain on foreign exchange 1,763 –Reversal of impairment loss on trade receivables 159,846 –

3,231,021 4,528,867

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


Impairment loss on interest in a joint venture 6,000,000 –Impairment loss on goodwill 1,200,000 –Impairment loss on other receivables 157,014 –Impairment loss on other investment – 31,525Impairment loss on trade receivables – 549,886Realised loss on foreign exchange – 138,326Written off of bad debts – 2,000Written off of deposit – 9,220Written off of property, plant and equipment – 168,276

7,357,014 899,233




(c) Business segments

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

Revenue Non-current assets 2017 2016 2017 2016 RM RM RM RM

Commodity trading – 4,946,330 – –Engineering 2,063,907 – 1,648 –Information, communication and technology 2,738,071 3,977,208 – 15,486,759Logistics 2,744,458 10,920,487 10,033,722 6,942,835Property developer – – 2,381,819 –

7,546,436 19,844,025 12,417,189 22,429,594

The non-current assets include property, plant, and equipment, investment property, goodwill, and interest in a joint venture.

Major customers

The following are major customers with revenue equal or more than 10% of the Group’s total revenue:-

Segment Revenue 2017 2016 RM RM

Customer A Engineering 1,375,340 –Customer B Logistics 1,273,186 –

2,648,526 –



(Cont’d)


34. FINANCIAL INSTRUMENTS

34.1 Categories of Financial Instruments

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

Carrying amount L&R AC

RM RM RM

Group 2017 Financial assetsTrade receivables 2,985,097 2,985,097 –Other receivables 1,558,662 1,558,662 –Fixed deposit with a licensed bank 133,000 133,000 –Cash and bank balances 350,915 350,915 –

5,027,674 5,027,674 –

Financial liabilities Trade payables 2,009,847 – 2,009,847Other payables 1,847,394 – 1,847,394Amount due to Directors 70,973 – 70,973Finance lease liabilities 1,784,563 – 1,784,563

5,712,777 – 5,712,777

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

12,837,257 12,837,257 –

Financial liabilities Trade payables 2,138,897 – 2,138,897Other payables 4,681,445 – 4,681,445Amount due to Directors 3,390,558 – 3,390,558Finance lease liabilities 2,640,708 – 2,640,708Borrowings 1,815,072 – 1,815,072

14,666,680 – 14,666,680



34. FINANCIAL INSTRUMENTS (CONT’D)

34.1 Categories of Financial Instruments (cont’d)

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

Carrying amount L&R AC

RM RM RM

Company

2017

Financial assets Other receivables 159,826 159,826 –Amount due from subsidiaries 2,398,372 2,398,372 –Fixed deposit with a licensed bank 133,000 133,000 –Cash and bank balances 139,342 139,342 –

2,830,540 2,830,540 –

Financial liabilities Other payables 442,402 – 442,402Amount due to a subsidiary 2,071,829 – 2,071,829

2,514,231 – 2,514,231

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

11,954,579 11,954,579 –

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

4,865,932 – 4,865,932



(Cont’d)



34.2 Financial Risk Management Objectives and Policies

Financial Risk

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

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

(a) Credit risk

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

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

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

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

(i) Receivables

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

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




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

Financial Risk (cont’d)

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

(a) Credit risk (cont’d)

Following are the areas where the Group and the Company are exposed to credit risk (cont’d):-

(i) Receivables (cont’d)

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

Group Individually Gross impaired Net RM RM RM

2017 Not past due 399,824 – 399,824Past due 1-30 days 849,857 – 849,857Past due 31-60 days 362,141 – 362,141More than 60 days 1,606,358 (233,083) 1,373,275

3,218,180 (233,083) 2,985,097

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

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

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

As at reporting date, trade receivables of RM2,585,273 (2016: RM1,634,349) that are past due but not impaired. These relate to a number of independent customers from whom there is no recent history of default.



(Cont’d)







(i) Receivables (cont’d)

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


By country:- Malaysia 2,985,097 1,677,281 Singapore – 278,486

2,985,097 1,955,767

As at the reporting date, approximately 39% (2016: 44%) of trade receivables was due from one major customer.

As at the reporting date, approximately none (2016: 77%) of the other receivables was due from an other debtor.

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

(ii) Corporate guarantees

The maximum exposure to credit risk is represented by the outstanding banking facilities of the subsidiary and third party as disclosed in Note 35 as at the end of the reporting period.

The Company provides financial guarantees to banks in respect of banking facilities granted to a subsidiary. The Company monitors on an ongoing basis the results of the borrowers and their repayments to the banks. As at the end of the reporting period, there was no indication that any of the subsidiary would default on repayment.








(iii) Intercompany balances

The maximum exposure to credit risk is represented by their carrying amount in the statements of financial position.

The Company provides unsecured advance to subsidiaries and monitors the results of the subsidiaries regularly. As at the end of the reporting period, there was no indication that the advances to the subsidiaries are not recoverable.

(b) Liquidity risk

Liquidity risk is the risk that the Group and the Company will not be able to meet their financial obligations as they fall due.

In managing its exposures to liquidity risk arises principally from its various payables, loans and borrowings, the Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.

The Group aims at maintaining a balance of sufficient cash and deposits and flexibility in funding by keeping diverse sources of committed and uncommitted credit facilities from various banks.

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

Carrying Contractual Within 2 to More than amount cash flow 1 year 5 years 5 yearsGroup RM RM RM RM RM

2017

Trade payables 2,009,847 2,009,847 2,009,847 – –Other payables 1,847,394 1,847,394 1,198,395 648,999 –Amount due to Directors 70,973 70,973 70,973 – –Finance lease liabilities 1,784,563 1,861,470 1,764,926 89,184 7,360

5,712,777 5,789,684 5,044,141 738,183 7,360



(Cont’d)





(b) Liquidity risk (cont’d)

Carrying Contractual Within 2 to More than amount cash flow 1 year 5 years 5 yearsGroup RM RM RM RM RM

2016 Trade payables 2,138,897 2,138,897 2,138,897 – –Other payables 4,681,445 4,681,445 4,681,445 – –Amount due to Directors 3,390,558 3,390,558 3,390,558 – –Finance lease liabilities 2,640,708 2,861,357 2,038,323 748,376 29,658Borrowings 1,815,072 2,034,419 410,143 1,335,491 288,785 14,666,680 15,061,676 12,659,366 2,083,867 318,443

Company

2017 Other payables 442,402 442,402 442,402 – –Amount due to a subsidiary 2,071,829 2,071,829 2,071,829 – –

2,514,231 2,514,231 2,514,231 – – Financial guarantee* 1,796,905 1,796,905 – – –






(b) Liquidity risk (cont’d)

Carrying Contractual Within 2 to More than amount cash flow 1 year 5 years 5 yearsCompany RM RM RM RM RM

2016 Other payables 2,665,681 2,665,681 2,665,681 – –Borrowings 50 50 50 – –Amount due to subsidiaries 2,200,201 2,200,201 2,200,201 – –

4,865,932 4,865,932 4,865,932 – –

Financial guarantee* 2,675,189 2,675,189 – – –

* This exposure is included in liquidity risk for illustration only. No financial guarantee was called upon by the holders as at the end of the reporting period.

The above amounts reflected the contractual undiscounted cash flows of the financial liabilities, which may differ from carrying values of the liabilities at the end of the financial year.

(c) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

To mitigate the Group’s exposure to foreign currency risk, the Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the respective functional currencies of the Group entities. The currency giving rise to this risk is primarily United States Dollar (“USD”), Euro Dollar (“EURO”), and Renminbi (“RMB”).



(Cont’d)





(c) Foreign currency risk (cont’d)

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

Group Denominated in EURO RMB USD2016 RM RM RM

Trade payables (141,747) (1,266) (54,851)Borrowings (231,301) – –Cash and bank balances – – 3,180Trade receivables – – 34,442

(373,048) (1,266) (17,229)

The management deemed the risk to be negligible as the said balances are immaterial.

There will be no foreign currency risk arises for the current financial year as the subsidiary which had foreign currency risk in the prior financial year has been disposed during the financial year 2017.

(d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s interest rate management objective is to manage the interest expenses consistent with maintaining an acceptable level of exposure to interest rate fluctuation.

In order to achieve this objective, the Group’s targets a mix of fixed and floating debt based on assessment of its existing exposure and desired interest rate profile.






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

(d) Interest rate risk (cont’d)

The interest rate profile of the Group’s significant interest bearing financial instruments, based on the carrying amounts as at the end of the reporting period were:-

2017 2016 RM RM

GroupFixed rate instruments Financial asset Fixed deposit with a licensed bank 133,000 –

Financial liability Finance lease liabilities (1,784,563) (2,640,708)

Net financial liability (1,651,563) (2,640,708)

Floating rate instrument Financial liability Borrowings – (1,815,072)

2017 2016Company RM RMFixed rate instruments Financial asset Fixed deposit with a licensed bank 133,000 –

Floating rate instrument Financial liability Borrowings – (50)



(Cont’d)





(d) Interest rate risk (cont’d)

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

The following table illustrates the sensitivity of profit and equity to a reasonable possible change in interest rates of +/- 50 basis point (“bp”). These changes considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

Group Company Profit for Profit for the year Equity the year Equity RM RM RM RM ± 50 bp ± 50 bp ± 50 bp ± 50 bp

2017 – – – –

2016 ± 9,075 ± 9,075 ± 1 ± 1

34.3 Fair value of financial instruments

The carrying amounts of financial assets and liabilities of the Group and of the Company at the reporting date approximate their fair values due to their short term nature or that they are floating rate instruments re-priced to market interest rates on or near reporting date.

The fair value of financial assets that are quoted in an active market are determined by reference to their quoted closing bid price at the end of the reporting date.




34.4 Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table summaries the methods used in determining the fair value of financial assets on a recurring basis as at 31 March 2017 and 31 March 2016:-

Group

Financial assets/Financial liabilities

Fair value as atFair value hierarchy Valuation techniques and key inputs

2017RM

2016RM

1) Quoted shares

Assets–

Assets–

Level 1 Quoted share prices in an active market.

There were no transfers between Level 1, Level 2 and Level 3 in 2017 and 2016.



(Cont’d)



34.4 Fair value hierarchy (cont’d)

The following table summarises the methods used in determining the fair value of non-financial assets on a recurring basis as at 31 March 2017 and 31 March 2016:-

Non-financial assets

Fair value as at

Fair value hierarchy

Valuationtechniques and keyinputs

Significant unobservable inputs

Relationship ofunobservableinputs to fairvalue

2017RM

2016RM

1) Property, plant and equipment

Building–

Building3,001,496

Level 3 BuildingDepreciated replacement cost andcomparison approach reflectingthe cost toa marketparticipant toconstructassets ofcomparableutility and age,adjusted forobsolescence.

BuildingAdjustment forfactors such as physicaldeterioration,functional andeconomicobsolescence.

BuildingDepreciationis deducted to reflect thecurrent condition of the buildings and structures.

2) Investment property

Land2,381,819

Land–

Level 3 LandComparison approachwhich reflects recent market transactionsfor similar properties.

LandAdjustmentfor factorssuch as plot size, location,encumbrances and current use.

LandThe extent anddirection ofthis adjustmentdepends on thenumber andcharacteristics of the observable market transactionsin similarproperties that re used as starting point for valuation.




34.4 Fair value hierarchy (cont’d)

The reconciliation of the carrying amount of non-financial assets classified within Level 3 is as follows:-

Group Property, plant and equipment Investment property 2017 2016 2017 2016 RM RM RM RM Brought forward 3,001,496 2,850,884 – –Addition – – 2,381,819 –Depreciation (61,019) (64,057) – –Disposal of subsidiaries (3,185,159) – – –Translation differences 244,682 214,669 – –

Carried forward – 3,001,496 2,381,819 –

35. CONTINGENT LIABILITY-UNSECURED


Corporate guarantee given to licensed leasing house for leasing facility granted to a subsidiary 1,019,273 1,815,804Corporate guarantee given to a licensed bank for banking facility granted to a subsidiary 133,000 44,368Corporate guarantee given to a third party for rental of machineries facility granted to a subsidiary 644,632 815,017

1,796,905 2,675,189



(Cont’d)


36. CAPITAL MANAGEMENT

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

The Group and the Company manage its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group and the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new share capital. No changes were made in the objectives, policies or processes during the financial years ended 31 March 2017 and 31 March 2016.

37. SIGNIFICANT EVENT

During the financial year

On 22 March 2017, the Company had entered into a Share Sale Agreement with Vaughan Litho (Singapore) Pte. Ltd. (“the Purchaser”), a company incorporated in the Republic of Singapore, to dispose the Company’s investment in TIS comprising 600,000 ordinary shares for a total cash consideration of RM100,000.

Upon completion of the disposal, TIS and its subsidiaries shall also cease to be wholly-owned subsidiaries of the Group.



SUPPLEMENTARY INFORMATION

Bursa Malaysia Securities Berhad had on 25 March 2010 and 20 December 2010, issued directives requiring all listed corporations to disclose the breakdown of unappropriated profits or accumulated losses into realised and unrealised on Group and Company basis, as the case may be, in quarterly reports and annual audited financial statements.

The breakdown of unappropriated losses as at the reporting date that has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and Guidance on Special Matter No. 1 issued on 20 December 2010 by the Malaysian Institute of Accountants are as follows:-

2017 2016 RM RMGroup

Total accumulated losses of the Group:- - Realised (12,057,119) (14,305,685) - Unrealised (251,000) (230,000)

(12,308,119) (14,535,685)

Total accumulated losses from associate:- - Realised – (360,000)

(12,308,119) (14,895,685)Less: Consolidation adjustment (11,709,356) (1,325,603)

Total accumulated losses as per consolidated financial statements (24,017,475) (16,221,288)

2017 2016 RM RMCompany

Total accumulated losses of the Company:- - Realised (29,859,680) (14,316,005)

The disclosure of realised and unrealised above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia Securities Berhad and should not be applied for any other purposes.



list of properties

RegisteredOwner &Address

Description &

Existing Use

Date of Acquisition/

Valuation

Land/BuildUp Area

Tenure (ExpiryDate)

Net BookValue (RM)

Asdion PropertyManagement Sdn Bhd

No. 3906,Lot No. 22 inthe PekanKemasik,District of Kemamanand State ofTerengganu.

Vacant land 9 March 2017 4608.3573square metres

Freehold 2,381,821


AnAlYsis of sHAreHolDinGs

Authorised Capital : RM50,000,00.00Issued and Fully Paid-Up Capital : RM11,626,990.00 No. of shares issued and paid-up : 116,269,900Class of Equity Securities : Ordinary shares Voting rights by show of hand : One vote for every memberVoting rights by poll : One vote for every share held

Distribution Schedule of Shareholders

Size of Holdings No. of Holders % No. of Shares %

Less than 100 12 1.27 358 *

100 - 1,000 502 53.35 101,842 0.09

1,001 - 10,000 183 19.45 1,166,600 1.00

10,001 - 100,000 195 20.72 6,047,500 5.2

100,001 - less than 5% ofissued shares

46 4.89 48,010,700 41.29

5% and above of issued shares 3 0.32 60,942,900 52.42

Total 941 100.00 116,269,900 100.00

* Negligible

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS (As per the Register of Substantial Shareholders)

Name of Substantial ShareholdersDirect Interest Indirect Interest

No. of Shares

% No. of Shares

%

Tey Por Chen 24,815,300 21.34 – –

Na Chiang Seng 20,244,400 17.41 – –

Goodunited Limited 15,883,200 13.66 – –



DIRECTORS’ SHAREHOLDINGS (As per the Register of Directors’ Shareholdings)

Name of DirectorsDirect Interest Indirect Interest

No. of Shares

% No. of Shares

%

Datuk Seri Maglin Dennis D’Cruz – – – –

Razmi bin Alias – – – –

See Poh Yee 21,000 0.02 – –

Selva Rasan A/L Dato’ Puspa Das – – – –

Dato’ Hj. Zulkifli Bin Hj. Alias – – – –

30 Largest Securities Account Holders as at 4 July 2017(without aggregating the securities from different securities accounts belonging to the same registered holder)

No. of No. Name Shares held %

1 JF Apex Nominees (Tempatan) Sdn Bhd - Pledged securities 24,815,300 21.34 account for Tey Por Chen

2 Na Chiang Seng 20,244,400 17.41

3 Goodunited Limited 15,883,200 13.66

4 Public Invest Nominees (Tempatan) Sdn Bhd - Exempt An for 5,786,600 4.98 Phillip Securities Pte Ltd

5 Eastbay Harvest Sdn Bhd 4,876,000 4.19

6 Pt Nusantara Rising Rich 4,222,000 3.63

7 Maybank Securities Nominees (Asing) Sdn Bhd - Maybank Kim 3,953,300 3.40 Eng Securities Pte Ltd for Teo Ee Seng

8 Telecity Investments Limited 3,845,800 3.31

9 Maybank Securities Nominees (Tempatan) Sdn Bhd - Maybank 3,146,900 2.71 Kim Eng Securities Pte Ltd For Tan Yeang Tze

10 DB (Malaysia) Nominee (Tempatan) Sendirian Berhad - Exempt 2,380,500 2.05 An for Deutsche Bank AG Singapore (PWM Tempatan) Berhad

11 RHB Nominees (Tempatan) Sdn Bhd - Pledged securities account 2,307,600 1.98 for Megat D. Shahriman Bin Zaharuddin

12 HSBC Nominees (Asing) Sdn Bhd - Exempt An for BSI SA 2,200,000 1.89

ANALYSIS OF SHAREHOLDINGS

(Cont’d)


30 Largest Securities Account Holders as at 4 July 2017 (Cont’d)(without aggregating the securities from different securities accounts belonging to the same registered holder) (Cont’d)

No. of No. Name Shares held %

13 Yap Tai Tee 2,200,000 1.89

14 Cartaban Nominees (Asing) Sdn Bhd - Exempt An for LGT Bank AG 2,068,000 1.78

15 Yee Yit Yang 1,762,300 1.52

16 Kenanga Nominees (Tempatan) Sdn Bhd - Pledged securities 808,000 0.69 account for Ong King Seng

17 Cimsec Nominees (Tempatan) Sdn Bhd - CIMB Bank for Tan Lee Kau 513,800 0.44

18 Teo Ee Seng 495,000 0.43 19 Tay Hock Soon 486,100 0.42

20 Low Chee Kwong 480,000 0.41

21 Lim Boon Hong 475,000 0.41 22 Wai Chong Ming 405,800 0.35

23 Maybank Kim Eng Securities Pte Ltd for Teo Ee Phiow 400,000 0.34

24 Lee Kuiek Kee 399,900 0.34

25 Maybank Securities Nominees (Asing) Sdn Bhd - Maybank 385,000 0.33 Kim Eng Securities Pte Ltd for Low Siew Yam

26 Lee Kuiek Kee 360,000 0.31

27 M & A Nominee (Tempatan) Sdn Bhd - For Chew Hun Seng 303,500 0.26

28 HLIB Nominees (Tempatan) Sdn Bhd - Pledged securities account 300,000 0.26 for Lim Leong Tian

29 Ng Elhow 300,000 0.26

30 Alliancegroup Nominees (Tempatan) Sdn Bhd - Pledged securities 243,200 0.21 account for Lee Kam Fong

ANALYSIS OF SHAREHOLDINGS(Cont’d)



No. of Warrant in issue : 48,655,960Voting rights by show of hand : One vote for every memberVoting rights by poll : One vote for every Warrant held

Distribution Schedule of Warrant

Size of Holdings No. of Holders % No. of Shares %

Less than 100 640 65.91 7,514 0.02

100 - 1,000 105 10.82 31,237 0.06

1,001 - 10,000 74 7.62 505,240 1.04

10,001 - 100,000 125 12.87 5,276,635 10.84

100,001 - less than 5% of issued warrants

23 2.37 5,448,960 11.20

5% and above of issuedwarrants

4 0.41 37,386,374 76.84

Total 971 100.00 48,655,960 100.00

DIRECTORS’ WARRANT HOLDINGS(As per the Register of Directors’ Warrant holdings)

There were no Directors holding warrants in the Company.

30 Largest Securities Account Holders as at 3 July 2017(without aggregating the securities from different securities accounts belonging to the same registered holder)

No. of No. Name Warrants held %

1 PT Nusantara Rising Rich 20,205,600 41.53

2 JF Apex Nominees (Tempatan) Sdn Bhd - Pledged securities 8,358,740 17.18 account for Tey Por Chen

3 Toh Pik Chai 6,340,500 13.03

4 Karimah Binti Ngah 2,481,534 5.10

5 Telecity Investments Limited 1,063,900 2.19

6 Wong Kam Sang 400,000 0.82

7 Liew Kwok Ming 359,160 0.74

AnAlYsis of WArrAntHolDinGs


30 Largest Securities Account Holders as at 3 July 2017 (Cont’d)(without aggregating the securities from different securities accounts belonging to the same registered holder) (Cont’d)

No. of No. Name Warrants held %

8 Yap Tai Tee 348,600 0.72

9 RHB Capital Nominees (Tempatan) Sdn Bhd - Azman Bin 343,500 0.71 Mohd Yusoff

10 Azman Bin Mohd Yusoff 340,000 0.70

11 Lim Hwee Hoon 260,000 0.53

12 Lee Wei Ling 241,900 0.50

13 Norammar Bin Ab Samah 200,000 0.41

14 Lim Jing Jing 183,000 0.38

15 Ang Sally 180,500 0.37

16 Irmawati Binti Norazman 165,700 0.34

17 Mercsec Nominees (Tempatan) Sdn Bhd - Pledged securities 163,100 0.34 account for Tey Hock Lai

18 Woo Cheang Sim 154,300 0.32

19 Public Nominees (Tempatan) Sdn Bhd - Pledged securities account 152,300 0.31 for Lim Jit Soon

20 Azizi Bin Alias 125,000 0.26

21 Chang Soon 116,000 0.24

22 Wong Weng Chuan 115,000 0.24

23 Muhammad Ikram Bin Ramli 114,900 0.24

24 Eng Hock Tuan 110,000 0.23

25 Tay Ah Hock @ Tee Tiam Hock 107,100 0.22

26 Azidi Bin Sarudin 104,900 0.22

27 Chong Kok Boon 100,100 0.21

28 Cimsec Nominees (Tempatan) Sdn Bhd - Pledged securities account 100,000 0.21 for Lim Phee Lin

29 PT Nusantara Rising Rich 100,000 0.21

30 JF Apex Nominees (Tempatan) Sdn Bhd - Pledged securities account 100,000 0.21 for Tey Por Chen

ANALYSIS OF WARRANTHOLDINGS(Cont’d)

✄

ASDION BERHAD (590812-D)

(Incorporated in Malaysia)

PROXY FORM

I/We ___________________________________NRIC No./Passport No./Company No.________________________________________ (full name in capital letters)of________________________________________________________________________________________________________________

(full address)_______________________________________________________________being (a) member(s) of ASDION BERHAD hereby appoint

___________________________________________(Proxy 1)NRIC No./Passport No.__________________________________________ (full name in capital letters)of________________________________________________________________________________________________________________

(full address)and/or* _____________________________________ (Proxy 2)NRIC No. /Passport No.________________________________________ (full name in capital letter)of _______________________________________________________________________________________________________________

(full address)or failing him/her, the Chairman of the Meeting as *my/our proxy to vote for *me/us on *my/our behalf at the Fifteenth Annual General Meeting of the Company to be held at Kenanga Room, Sri Damansara Club, Lot 23304, Persiaran Perdana, Bandar Sri Damansara, 52200 Kuala Lumpur on Tuesday, 29 August 2017 at 10:00 a.m. and at any adjournment thereof.

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. If no specific direction as to vote is given, the Proxy will vote or abstain from voting at his/her discretion.

Item Agenda

1. To receive the Audited Financial Statements for the financial year ended 31 March 2017 together with the Reports of the Directors and the Auditors thereon.

Ordinary Business Resolution For Against

2. To approve the payment of Directors’ fees amounting to RM302,500/- for the financial year ended 31 March 2017. 1

3. To re-elect Mr. See Poh Yee, who is retiring by rotation pursuant to Article 81 of the Company’s Articles of Association. 2

4. To re-elect Encik Razmi bin Alias, who is retiring pursuant to Article 88 of the Company’s Articles of Association. 3

5. To re-appoint Messrs. SJ Grant Thornton as Auditors of the Company until the conclusion of the next Annual General Meeting of the Company and authorise the Directors to fix their remuneration.

4

Special Business

6. Ordinary Resolution - Authority to Issue Shares Pursuant to Sections 75 and 76 of the Companies Act, 2016 5

*delete whichever not applicable

Dated this ________ day of___________ 2017.

___________________________________

Signature of Member(s)/Common Seal

NOTES:

(i) In respect of deposited securities, only members whose names appear in the Record of Depositors on 21 August 2017 (“General Meeting Record of Depositors”) shall be eligible to attend the Meeting.

(ii) A member entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies to attend and vote instead of him. Where a member appoints two (2) proxies, the appointments shall be invalid unless the member specifies the proportion of his holdings to be represented by each proxy.

(iii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing. In the case of a corporate member, the instrument appointing a proxy must be either under its common seal or under the hand of an officer or attorney duly authorised.

(iv) The instrument appointing a proxy must be deposited at the Company’s Registered Office at Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur, Wilayah Persekutuan not less than 48 hours before the time for holding the Meeting or any adjournment thereof, at which the person named in such proxy proposes to vote and in default the proxy shall not be treated as valid. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointor.

(v) Pursuant to Rule 8.31A of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, all the resolutions set out in this Notice will be put to vote by way of poll. Independent Scrutineers will be appointed to validate the votes cast at the Fifteenth Annual General Meeting of the Company or any adjournment thereof.


CDS Account No.

Number of Ordinary Shares Held

For appointment of more than one (1) proxy, percentage of shareholdings to be represented by the proxies

No. of shares %

Proxy 1

Proxy 2

TOTAL 100

Then fold here

1st fold here

AFFIXSTAMP

The Company Secretary.

Asdion Berhad (590812-D)Level 2, Tower 1, Avenue 5,Bangsar South City,59200 Kuala Lumpur.

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