ASDION BERHAD
Solutions for Growing Businesses
ASDION BERHAD (Company No.: 590812-D) annual report 2015
ASDION BERHAD (590812-D) ANNUAL REPORT 2015 Oval Tower @ Damansara Unit 28-8, 28th Floor, No. 685 Jalan Damansara TTDI, 60000 Kuala Lumpur, Malaysia
T: +603 6272 7878 F: +603 6272 7373 www.asdion.com Asdion Berhad (590812-D) ANNUAL REPORT 2015
Contents
Notice of Annual General Meeting ... 2 Company’s Profile ... 4 Group Corporate Structure ... 5 Corporate Information ... 6 Profile of the Board of Directors ... 7 Audit Committee Report ... 12 Statement of Corporate Governance ... 17 Statement on Risk Management and Internal Control ... 25 Additional Compliance Information ... 28 Chairman’s Statement ... 33 Financial Statements ... 37 List of Properties ... 129 Analysis of Shareholdings ... 131 Form of Proxy ... Enclosed
1 Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Thirteenth Annual General Meeting of the Company will be held at Sri Damansara Club Berhad, Lot 23304, Persiaran Perdana, Bandar Sri Damansara, 52200 Kuala Lumpur on Monday, 28 September 2015 at 10.00 a.m. for the following purposes:
AGENDA As Ordinary Business
1. To receive the Audited Financial Statements of the Company for the financial Please refer to year ended 31 March 2015 together with the Reports of the Directors and explanatory Auditors thereon. note A 2. To re-elect the following Director who retire in accordance with Article 81 of the Company’s Articles of Association and, being eligible, offer himself for re-election:
(a) Mr. See Poh Yee Resolution 1 3. To re-elect the following Directors who retire in accordance with Article 88 of the Company’s Articles of Association and, being eligible, offer themselves for re-election:
(a) Mr. Selva Rasan A/L Dato’ Puspa Das Resolution 2 (b) Encik Mohamad Farid Bin Mohd Yusof Resolution 3 (c) Datuk Raime Bin Unggi Resolution 4 (d) Dato’ Yen Soon Ai Resolution 5 (e) Tengku Azlan Ibni Sultan Abu Bakar Resolution 6 (f) Dato’ Mohamed Ridzuan Bin Nor Md Resolution 7 4. To approve the payment of Directors’ Fees for the financial year ended 31 Resolution 8 March 2015.
5. To re-appoint Messrs. SJ Grant Thornton as the Auditors of the Company Resolution 9 and to authorise the Board of Directors to fix their remuneration.
AS SPECIAL BUSINESS
6. To consider and, if thought fit, to pass the following Ordinary Resolution with Resolution 10 or without modifications:-
ORDINARY RESOLUTION - AUTHORITY TO ISSUE AND ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965
THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approval of the relevant governmental and/or regulatory authorities, authority be and is hereby given to the Directors to issue shares in the Company, at any time and upon such terms and conditions for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution in any one financial year does not exceed 10% of the issued capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.
2 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notice of Annual General Meeting (Cont’d)
7. To transact any other ordinary business of the company for which due notice shall have been given.
By Order of the Board
Lee Wai Ngan (LS00184) Chan Toye Ying (LS00185) Company Secretaries Kuala Lumpur 26 August 2015
Notes: 1. In respect of deposited securities, only members whose name appear in the Record of Depositors as at 21 September 2015 (“General Meeting Record of Depositors”) shall be regarded as a member entitled to attend, speak and vote or to appoint a proxy or proxies to attend, speak and vote at the Thirteenth Annual General Meeting. 2. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A member may appoint more than one proxy to attend at the same meeting. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportion of his shareholding to be represented by each proxy. 3. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy must be deposited at the Company’s Registered Office situated at Plaza 138, Suite 18.03, 18th Floor, 138 Jalan Ampang, 50450 Kuala Lumpur not less than forty- eight (48) hours before the time for holding the meeting or at any adjournment thereof.
Explanatory Note A This Agenda item is meant for discussion only as the provisions of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the audited financial statements. As such, this item is not put forward for voting.
Explanatory Note on Special Business :
The Ordinary Resolution 10 proposed in Agenda 6, if passed, will empower the Directors to issue shares up to 10% of the issued and paid-up share capital of the Company from time to time for such purposes as the Directors consider would be in the best interest of the Company. This authorisation will expire at the conclusion of the next Annual General Meeting of the Company. The mandate sought is a renewal of the mandate given by the shareholders of the Company at the Twelfth Annual General Meeting held on 25 September 2014. As at the date of this Notice, no new shares in the Company were issued pursuant to the authority granted to the Directors and accordingly, no proceeds were raised therefrom. The purpose for the renewal of the general mandate is to avoid any delay and additional costs in convening a general meeting to approve such issue of shares in the event of any possible fund raising activities for the purpose of funding future projects, additional working capital, etc. which may require the allotment and issuance of new shares.
3 Company’s Profile
HISTORY AND PRINCIPAL ACTIVITIES
“ASDION” is an acronym for Application Solution Developed In Objects and Network.
Asdion Berhad (“Asdion”) was incorporated in Malaysia as a private limited company on 27 August 2002 under the Companies Act 1965 with the name of “Asdion Sdn Bhd”. On 16 December 2003, Asdion converted into a public limited company and adopted its present name. The principal activities of Asdion are investment holding and engaging in software development and Information Communication Technology and related activities.
The Asdion Group specialises in providing advanced integrated operations software solutions and products with particular focus on a broad service sectors from hospitality, membership, supply chain logistics to media related businesses.
Asdion seeks to position itself as a performance leader in the Asia Pacific market in the development, marketing and distribution of advanced integrated business solutions. Its vision is to develop superior and reliable software products to meet challenging demands in the market place.
VISION
ASDION is committed to be the performance leader in the global market in the development, marketing and distribution of advanced integrated business solution.
CORPORATE MISSION STATEMENT
In achieving this vision, ASDION will:
• Develop superior software products to meet the ever challenging demand in the market place;
• Provide reliable high quality products and services;
• Create a brand image for its products;
• Establish a network of end-users for its products and to develop strategic marketing alliances with Solution Providers;
• Develop a highly trained technical staff force to ensure continuous back-up and technical support for its products;
• Provide a safe, healthy and socially responsible workplace and exercising social responsibility in the wider community;
• Continually seek new opportunities for growth in related technologies; and
• Ensure it is a reliable, service and quality driven organisation responsive to customers and shareholders
4 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Group Corporate Structure
100%
Asdion Data Services Sdn Bhd
100% 100%
Techtron Integrated Asdion Hospitality Systems (S) P/L Solutions Sdn Bhd 97%
Asdion Software (Shanghai) Co., Ltd 97% 100% Asdion Software Pte Ltd 108 Talent Sdn Bhd 97%
Asdion Exim (Shanghai) Co., Ltd 100%
Venice Sanctuary Sdn Bhd
100% ASDION BERHAD (590812-D) Asdion Project Synergy Sdn Bhd
90%
Asdion Digital Advance System Sdn Bhd
51%
Taz Logistics Sdn Bhd
36%
Sun Rock Development Sdn Bhd
Wholly-owned Subsidiaries Subsidiaries Associate
5 Corporate Information
BOARD OF DIRECTORS REGISTERED OFFICE TENGKU AZLAN IBNI SULTAN ABU BAKAR Plaza 138, Suite 18.03, 18th Floor, 138, Chairman/ Independent Non-Executive Director Jalan Ampang, (Appointed on 8 April 2015) 50450 Kuala Lumpur. Telephone : 603-2161 5466 YAP TAI TEE Facsimile : 603-2163 6968 Group Managing Director / Chief Executive Email : [email protected] Officer
DATO’ MOHAMED RIDZUAN BIN NOR MD SHARE REGISTRAR Executive Director (Appointed on 8 April 2015) Systems & Securities Sdn Bhd (17394-P) Plaze 138, Suite 18.03, 18th Floor, 138, DATO’ YEN SOON AI Jalan Ampang, Executive Director 50450 Kuala Lumpur. (Appointed on 29 January 2015) Telephone : 603-2161 5466 Facsimile : 603-2163 6968 DATUK RAIME BIN UNGGI Independent Non-Executive Director (Appointed on 29 January 2015) CORPORATE OFFICE SELVA RASAN A/L DATO’ PUSPA DAS Oval Tower @ Damansara Independent Non-Executive Director Unit 28-8, 28th Floor (Appointed on 24 December 2014) No. 685 Jalan Damansara, TTDI 60000 Kuala Lumpur SEE POH YEE Independent Non-Executive Director PRINCIPAL BANKERS MOHAMAD FARID BIN MOHD YUSOF Non-Independent Non-Executive Director RHB Bank Berhad (Appointed as Independent Non-Executive CIMB Islamic Bank Berhad Director on 9 January 2015 and subsequently re-designated to Non-Independent Non-Executive Director on 10 June 2015) AUDITORS LT GEN (rtd) DATUK KHAIRUDDIN BIN SJ Grant Thornton (AF: 0737) MAT YUSOF Level 11, Sheraton Imperial Court Chairman / Independent Non-Executive Director Jalan Sultan Ismail (Resigned on 17 February 2015) 50250 Kuala Lumpur. Telephone : 603-2692 4022 NA CHIANG SENG Facsimile : 603-2691 5229 Executive Director (Resigned on 8 April 2015) STOCK EXCHANGE LISTING YAP TAI YEONG Non-Independent Non-Executive Director ACE Market of Bursa Malaysia Securities (Resigned on 29 January 2015) Berhad
LEOU THIAM LAI Stock Name : Asdion Independent Non-Executive Director Stock Code : 0068 (Retired on 25 September 2014)
COMPANY SECRETARIES Lee Wai Ngan (LS 00184) Chan Toye Ying (LS 00185)
6 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Profile of The Board of Directors
TENGKU AZLAN IBNI SULTAN ABU BAKAR (Chairman/ Independent Non-Executive Director)
Tengku Azlan Ibni Sultan Abu Bakar, aged 66, a Malaysian, was appointed as a Chairman/ Independent Non-Executive Director of the Company on 8 April 2015. Tengku Azlan is a member of the Royal family of the state of Pahang in Malaysia, where he is the younger brother of the Sultan of Pahang, Sultan Ahmad Shah. Tengku Azlan had been honored with several honorary title, such as Tan Sri, Dato’ Sri Paduka of the Grand Order of Tuanku Ja’afar (SPTJ, 1997) with title Dato’ Seri, Panglima Mangku Negara (PMN), Sri Sultan Ahmad Shah Pahang (SSAP) award and Darjah Sultan Ahmad Shah Pahang (DSAP) award.
Tengku Azlan was a former Malaysian politician and a Member of the Parliament of Malaysia for the Jerantut constituency in the state of Pahang from 1999 to 2013. Previously, he served as the Deputy Minister in the Prime Minister’s Department from 1999 to 2004. Tengku Azlan has also served as the Deputy Minister of Transportation from 2004 to 2008. Tengku Azlan is a member of the United Malays National Organisation (UMNO) party in the Barisan Nasional coalition government. He was the former Head of Division in UMNO (Jerantut District) from 1998 to 2013. As at to date, he is still holding his membership with UMNO.
In 2014, Tengku Azlan had been appointed as the Chairman of the Kuantan Port Authority, a position that he continues to hold till today. Currently, Tengku Azlan also serves as a corporate advisor in Tijaz Corporation Sdn Bhd. Apart from his role in the government sector and political segment, Tengku Azlan was also appointed as the Chairman of the Malaysian Association for the Blind in year 2013, for which he continues to serve the association until today.
YAP TAI TEE (Group Managing Director / Chief Executive Officer)
Yap Tai Tee, aged 48, a Malaysian, is the Group Managing Director/Chief Executive Officer of Asdion Berhad. He was appointed to the Board on 30 September 2004. In 1987, he was conferred a Diploma in Electrical Engineering from the Singapore Polytechnic, Singapore. Subsequently, he graduated from Lancaster University, United Kingdom, in 1989 with a Bachelor of Science (Honours) in Information Engineering with First Class Honours. He is currently the General Manager of Techtron Integrated Systems (S) Pte Ltd (“TIS”), a wholly-owned subsidiary of the Company, a position he has held since 1995. In this position, he is inter alia in charge of overseeing and managing the entire operations of TIS. Prior to joining TIS, he was a research associate with Koeneman Capital Management Pte Ltd. He was appointed as an Executive Director by Medilink-Global UK Limited (“MGL”), a listed company in Alternative Investment Market of London Stock Exchange on 12 November 2008. He resigned as an Executive Director of MGL on 6 of June 2012.
Recognising the potential of electronic access control for the hotel industry in the early 1990s, TIS distributed TESA Electronic Access Control System (now Onity products) to penetrate into this niche market, and made headway in this virtually unknown market. Mr Yap’s exposure to hotel operations helped him realise the strong demand and potential in business software applications, leading to software development at TIS. Under the leadership of Mr Yap and with his vision, ASDION products now comprise of advance and progressive integrated software solutions which have been successfully deployed to operations in various service industries.
7 Profile of The Board of Directors (Cont’d)
DATO’ MOHAMED RIDZUAN BIN NOR MD (Executive Director)
Dato’ Mohamed Ridzuan Bin Nor Md, aged 35, a Malaysian, was appointed as an Executive Director of the Company on 8 April 2015. Dato’ Mohamed Ridzuan graduated with Merit in Masters of Science in Finance, majoring Behavioural Finance from University of Portsmouth, United Kingdom in year 2005. He began his career with MISC Berhad as a Tax Executive in year 2005. In MISC, he had initiated and implemented a new tax structure and had led the Goods Services Tax (GST) Transformation program in MISC and its group of companies.
In 2006, he joined AmInvestment Bank Berhad as an Assistant Manager with Equity Capital Markets Department and was later promoted to Manager in year 2007. Subsequently, he left AmInvestment Bank and co-founded Petrol One Resources Berhad (PORB) where he was appointed as Executive Director of PORB. PORB is an oil and gas company specializing in offshore storage and was the first listed oil and gas storage provider in Malaysia. Dato’ Mohamed Ridzuan has been instrumental in setting up the company and bringing the company to its listed status. He also managed to raise over USD50 million for the funding of PORB’s maiden Floating Storage and Offloading project in Johor.
In 2011, he left PORB and appointed as Executive Director in CWorks Systems Berhad, a position that he continues to hold till today. He is also a director and shareholder with 340,000 ordinary shares of RM1.00 each or equivalent to shareholding of 34% in Taz Logistics Sdn Bhd, a subsidiary of Asdion Berhad.
DATO’ YEN SOON AI (Executive Director)
Dato’ Yen Soon Ai, aged 46, a Malaysian, was appointed as an Executive Director of the Company on 29 January 2015. Dato’ Yen attended Northwestern Business College, Chicago, Illinois, U.S.A. from 1989 to 1991. He has accumulated more than 20 years of working experience across various organization and corporations and his competency is particularly in the commercial sector specializing in marketing to corporate clients, business development and client relationship in diversified sectors.
He began his career as an Operations Manager in Malaysian Timber Trade Corporation Sdn. Bhd. (“MTTC”), a contracting company undertaking the extraction and harvesting of timber for forest concessionaires, concurrently involved in the production of rattan furniture. In 1996, he joined All Best Furniture (M) Sdn. Bhd. (“ABF”) as Executive Director in the Operations Division, a company with forest and timber concessions focused in logging and with its downstream activities being saw milling and the manufacture of molded parts for the furniture industries in Malaysia. ABF was also responsible for the harvesting of a forest totaling 10,000 acres in the state of Pahang. Subsequently he was promoted to the position of Chief Executive Officer in All Best Timber (M) Sdn. Bhd. (“ABT”), a subsidiary of ABF.
In 2006, Dato’ Yen was seconded to Yoke Tank Installations Pte. Ltd. (“YTI”) and its group of companies which he continues to hold until today. YTI is a company incorporated in the Republic of Singapore, with its group of companies incorporated throughout South East Asia and East Asia, which are primarily involved in the development of edible oil storage and bulking plants with an ancillary business of trading in edible oil and fats.
8 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Profile of The Board of Directors (Cont’d)
DATUK RAIME BIN UNGGI (Independent Non-Executive Director)
Datuk Raime Bin Unggi, aged 45, a Malaysian, was appointed as an Independent Non-Executive Director of the Company on 29 January 2015. Datuk Raime obtained a Master of Arts (Sociology) from Universiti Utara Malaysia in year 2014 and a Diploma of Business Studies from Institut Teknologi Mara Sabah in year 1993.
YB Datuk Raime is a Malaysian politician, where he is the Member of the Parliament of Malaysia for the Tenom constituency in Sabah, representing the United Malays National Organisation (UMNO) party in the governing Barisan Nasional coalition. Prior to that, Datuk Raime had joined the government sector as an Assistant Administrative Officer from year 1997 to 2004.
Apart from his active roles in the political segment, Datuk Raime also contributed to the community through his several positions in various statutory bodies, including but not limited to parties organisation, social and voluntarily community in Malaysia, for instances:-
(i) Deputy Chairman of the Corporation Baitulmal Sabah (2005 – 2007) (ii) Chairman of Desa Group of Companies, which is wholly-owned by the State Government of Sabah (2008 – current) (iii) Board Member of Oilcorp Berhad (2008 – September 2009) (iv) Colonel (Honorary) RELA, Tenom District (2007 – current) (v) Patron Scouts Association, Tenom District (2008 – current) (vi) Chairman of Parliamentary Consultative Council, Tenom (2014 – current) (vii) Secretary of Barisan Nasional Backbenchers Club (Sabah) (BNBBC) (2008 – current) (viii) Chairman of the Ministry Of Agriculture & Agro-Based Industry Malaysia, Tenom District (2009 – current) (ix) Chairman of Welfare and Social Development Council (Mayang) for the Region of P.181 Tenom (2009 – current) (x) Deputy Head of Division UMNO, Tenom (2013 – current)
In recognition of his contribution towards the community of Sabah, the Governor from the Government of Sabah had conferred Datuk Raime with Panglima Gemilang Darjah Kinabalu (“PGDK”), also known as the Commander of the Order of Kinabalu. PGDK ranked second class of order among the five classes of the Illustrious Order of Kinabalu, Sabah.
9 Profile of The Board of Directors (Cont’d)
Selva Rasan A/L DATO’ Puspa Das (Independent Non-Executive Director)
Selva Rasan a/l Dato’ Puspa Das, aged 43, a Malaysian, was appointed as an Independent Non-Executive Director of the Company on 24 December 2014. He is a fellow member of the Malaysian Institute of Accountants, the Chartered Tax Institute of Malaysia, Financial Planning Association of Malaysia, Institute of Public Accountants (Australia) and associate member of Certified Practising Accountants (CPA) Australia. He is also an affiliate member to the Chartered Institute of Company Secretaries and Administrators.
Mr. Selva has more than fifteen (15) years of audit and tax experience, starting his professional career with PricewaterhouseCoopers and subsequently, establishing his own practice, Selva & Associates, soon after he became a member of the Malaysian Institute of Accountants in year 2000. Mr. Selva is also the Managing Director of Cyrel Tax Care Sdn. Bhd., which provides taxation advisory, compliance and related services.
Mr. Selva is a Chairman of the Audit Committee, member of the Nomination Committee and Remuneration Committee of the Company. Apart from serving as an Independent Non-Executive Director of the Company, he is also a Director of Hytex Integrated Berhad.
SEE POH YEE (Independent Non-Executive Director)
See Poh Yee, aged 38, a Malaysian, is a Technology Investor, Co-Founder and the Executive Director of Nexgram Holdings Berhad since year 2005. He was appointed to the Board on 26 August 2013. He obtained his Bachelor of Engineering degree, majoring in Computer Science from the University of Manitoba, Canada in 1998.
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. Today, he oversees Nexgram group of companies’ core technology research and development, architect and product design. He also sits on the Investment Board for new technology startup, incubation and venture funding.
Mr See is a Director of Nexgram Holdings Berhad, a company listed on the ACE Market of Bursa Malaysia Securities Berhad. He also serves as Chairman of the Nomination Committee, member of Audit Committee and Remuneration Committee of the Company.
10 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Profile of The Board of Directors (Cont’d)
MOHAMAD FARID BIN MOHD YUSOF (Non-Independent Non-Executive Director)
Mohamad Farid Bin Mohd Yusof, aged 57, a Malaysian, was appointed as a Director of the Company on 9 January 2015. He holds a Master in Business Administration from University of Northern Colorado, USA. Encik Mohamad Farid began his career with Bank of Commerce Berhad (now known as CIMB Bank Berhad) in 1984. During his tenure with the Bank, he was exposed to areas encompassing customer services; business development & maintenance; analysis of business opportunities & risk; financial analysis; loan portfolio management; loan recovery & restructuring; legal documentation; and planning, organizing and control.
Encik Mohamad Farid left the commercial banking sector in 1995 to join KAF Discounts Berhad (now known as KAF Investment Bank Berhad) as the General Manager cum Head, Debt Capital Market Department. He was involved in assisting the management in formulating, implementing and monitoring effective and sound investment approval policies, guidelines and procedures, and overseeing the development and marketing of new businesses. He also assisted clients in project viability analysis and the arrangement of fund raising through the issuance of private debt securities such as bonds, medium-term notes and short-term commercial papers. He left KAF in early 2007 to set up his own corporate and business consultancy outfit to assist corporations in fund raising exercises and providing advisory services.
Mohamad Farid served as Chief Executive Officer of Primabaguz Sdn Bhd (“PSB”) from November 2009 until June 2012. During that period, he was also appointed as director in wholly-owned subsidiaries of PSB, namely PAP Cashnet (M) Sdn Bhd, PAP Marketing Sdn Bhd and Next Choice Sdn Bhd.
He is a Director of Wintoni Group Berhad, a company listed on the ACE Market of Bursa Malaysia Securities Berhad. He also serves as Chairman of the Remuneration Committee, member of the Audit Committee and Nomination Committee of the Company.
Notes:
(i) All the above-named Directors of the Company have not been convicted for any offences (other than traffic offences, if any) within the past ten (10) years and they do not have any conflict of interest with the Company. (ii) Details of attendance of the Directors at the Board Meetings and their shareholdings are set out respectively in this Annual Report.
11 Audit Committee Report
The objective of the Audit Committee is to assist the Board in discharging its statutory duties and responsibilities in relation to corporate governance, internal control systems, management and financial reporting practices of the Company and to ensure proper disclosure to the shareholders of the Company.
MEMBERS OF THE AUDIT COMMITTEE
The current members of the Audit Committee are as follows:
Chairman : SELVA RASAN A/L DATO’ PUSPA DAS* (Independent Non-Executive Director) (Appointed on 24 December 2014)
Members : SEE POH YEE (Independent Non-Executive Director) : MOHAMAD FARID BIN MOHD YUSOF (Non-Independent Non-Executive Director) (Appointed on 29 January 2015)
(*Member of MIA)
SUMMARY OF THE TERMS OF REFERENCE
1. COMPOSITION
The composition of the Audit Committee appointed by the Directors pursuant to a resolution of the Board of Directors must fulfil the following requirements:
(a) The Audit Committee must be comprised of no fewer than three (3) members;
(b) All Audit Committee members must be Non-Executive Directors, with a majority of them being Independent Directors as prescribed in the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”);
(c) The members of the Audit Committee shall elect a chairman, who shall be an independent director from among their members;
(d) At least one member of the Audit Committee:
i. must be a member of the Malaysian Institute of Accountants; or
ii. if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and he must have passed the examinations specified in part I of the 1st Schedule of the Accountants Act 1967 or he must be a member of one (1) of the associations of accountants specified in Part II of the said Schedule of the Accountants Act 1967; or
iii. a person who has fulfilled such other requirements as prescribed or approved by Bursa Securities.
12 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Audit Committee Report (Cont’d)
SUMMARY OF THE TERMS OF REFERENCE (CONT’D)
1. COMPOSITION (CONT’D)
(e) If a Member of the Audit Committee resigns or for any other reason ceases to be a Member with the result that the number of Members is reduced below three (3), the Board of Directors shall, within three (3) months of that event, appoint such number of new Members as may be required to make up the minimum of three (3) Members.
(f) The terms of office and performance of the Audit Committee and each of its Members shall be reviewed by the Board of Directors no less than once every three (3) years.
2. PROCEDURES OF MEETINGS
(a) Meetings shall be held not less than four (4) times in a financial year.
(b) The Committee may regulate its own procedures, in particular;
i. The calling of meetings; ii. The notice to be given of such meetings; iii. The voting and proceedings of such meetings; iv. The keeping of the minutes; and v. The custody, production and inspection of such minutes.
(c) Other Board members, senior management personnel, Internal and External Auditors may be invited to attend meetings.
(d) Upon the request of the External Auditors, the Chairman of the Audit Committee shall convene a meeting of the Committee to consider any matters the External Auditors believes should be brought to the attention of the Directors or Shareholders. The External Auditors has the right to appear and be heard at any meeting of the Audit Committee and shall appear before the Committee when required to do so by the Committee.
(e) Written notice of the meeting together with the agenda shall be given to the Members of the Audit Committee and the External Auditors, where applicable.
(f) The quorum for a meeting shall be two (2) provided always that the majority of Members present must be Independent Directors and any decision shall be by a simple majority. The Chairman shall not have a casting vote.
(g) The other Board Members, Financial Controller, the Head of Internal Audit (if any), any employee of the Company and a representative of the External Auditors may be invited to attend meetings. If necessary, the Audit Committee shall meet with the External Auditors without any Executive Board Member present.
(h) The Company Secretary shall be the secretary of the Audit Committee.
13 Audit Committee Report (Cont’d)
SUMMARY OF THE TERMS OF REFERENCE (CONT’D)
3. FUNCTIONS
The functions of the Committee are as follows:
(a) To recommend the nomination of a person or persons as External Auditors.
(b) To review the following and report the same to the Board of Directors:-
i. with the External Auditors, the audit plan; ii. with the External Auditors, his evaluation of the system of internal controls; iii. with the External Auditors, his audit report; iv. the assistance given by the employees of the Company to the External Auditors; v. the adequacy of the scope, functions and resources of the Internal Audit functions and that it has the necessary authority to carry out its work; vi. the Internal Audit programme and the results of the Internal Audit processes; vii. on investigation undertaken and whether or not appropriate action was taken on the recommendations of the Internal Audit function; viii. the quarterly results and year-end financial statements, prior to the approval by the Board of Directors, focusing particularly on:- 1. Changes in or implementation of major accounting policy changes; 2. Significant and unusual events; 3. Compliance with accounting standards and other legal requirements; 4. Any related party transaction and conflict of interest situation that may arise within the Company or group including any transaction, procedure or course of conduct that raises questions of management integrity; 5. Any letter of resignation from the External Auditors of the Company; and 6. Whether there is reason (supported by grounds) to believe that the Company’s External Auditors is not suitable for re-appointment.
(c) To discuss problems and reservations arising from the interim and final audits, and matters the External Auditors may wish to discuss (in the absence of management where necessary).
(d) To keep under review the effectiveness of internal control systems and in particular review the External Auditors’ management letter and management’s response.
(e) To consider other topics, as agreed to by the Audit Committee and the Board of Directors.
14 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Audit Committee Report (Cont’d)
4. AUTHORITY
The Committee shall, in accordance with the procedures determined by the Board and at the cost of the Company; (a) have explicit authority to investigate any matter within its term of reference; (b) have the resources which are required to perform its duties; (c) have full and unrestricted access to all information and documents relevant to its activities as well as direct communication channels with the external auditors, person(s) carrying out the internal audit function or activity and the senior management of the Group; (d) be able to obtain independent/external professional advice; and (e) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other executive directors and employees of the Company, whenever deemed necessary.
5. AUDIT COMMITTEE MEETING
During the financial period from 1 April 2014 to 31 March 2015, four (4) Audit Committee Meetings were held. Details of the attendance of each Committee Member are as follows:-
name of Audit Committee Member Attendance Attendance
Selva Rasan a/l Dato’ Puspa Das (Chairman) (Appointed on 24 December 2014) 0/1 Leou Thiam Lai (Chairman) (Retired on 25 September 2014) 3/3 Mohamad Farid Bin Mohd Yusof (Appointed on 29 January 2015) 1/1 See Poh Yee 5/5 Yap Tai Yeong (Resigned on 29 January 2015) 4/4
6. ACTIVITIES OF THE AUDIT COMMITTEE
During the financial year, the activities of the Audit Committee included the following:
(a) Reviewed and recommended for Board approval the quarterly financial results for public announcement;
(b) Reviewed the related party transactions that had arisen within the Company and Group;
(c) Reviewed and discussed the External Auditors’ findings during the course of their year end audit and the management’s response;
(d) Reviewed and recommended for Board approval the Group’s audited financial statements; and
(e) Reviewed the audit reports submitted by the Internal Auditor, if any.
15 Audit Committee Report (Cont’d)
7. inTERNAL AUDIT
(a) The Company has outsourced its internal audit function to a professional firm of consultants, which provides objective evaluation of risk management and control systems in the auditable services. All activities of the Internal Audit are reported to the Group’s Audit Committee on a half yearly basis.
(b) The audit committee reviewed periodic reports, provided by Group Internal Audit to the audit committee, reporting on the outcome of the operations and systems audits conducted, effectiveness of the system of risk management and internal controls implemented and highlighting key control issues impacting the operations of the Group. In discharging its role, Internal Auditors:
i. evaluates whether the Group is in compliance with internal policies and procedures, applicable laws, guidelines and directives issued by regulatory bodies, and statutory acts;
ii. evaluates the quality and appropriateness of management’s approach to risk and control in their framework objectives and effectiveness of risk management procedures;
iii. assesses the adequacy and effectiveness of internal controls systems implemented i.e. accounting, system and operational controls, by giving opinion on the effectiveness of the said controls, continuity and reliability of information systems and provide assurance that sufficient controls are in place to safeguard assets;
iv. assesses the adequacy of controls to ensure the reliability (including accuracy and completeness) of accounting records, financial reports and management information; and
v. assists the management to review and strengthen the controls features to prevent recurrence of fraud, errors, lapses and omissions and other significant control weaknesses.
8. risK MANAGEMENT
Audit Committee oversees the establishment of a robust risk management infrastructure, reviews the adequacy and integrity of internal control systems and ensures that Group Risk Management performs its duties independently of the risk taking activities. Group Risk Management provides the central resource for developing tools and methodologies for the identification, quantification, and management of the portfolio of risks taken by the Group as a whole.
16 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statement of Corporate Governance
1. BOARD OF DIRECTORS
The Board of Directors (“Board”) of Asdion Berhad (“ASDION”) recognises and subscribes to the importance of the principles and best practices set out in the Malaysian Code on Corporate Governance 2012 (“Code”) as a key factor towards achieving an optimal governance framework and processes in managing the business and operational activities of the Company.
The Board belief and supports the good corporate governance practices is the fundamental part of the Group’s responsibility to protect and enhance shareholders’ value. Thus, the Board is working towards ensuring full compliance with the principles and best practices of the Code. The Board’s commitment is reflected in the incorporation of various policies and the establishment of the relevant committees.
The Board is pleased to disclose below a description on how the Group has applied the principles of good governance and the extent to which it has complied with the best practices set out in the Code.
A. The Board
The Board is bestowed with the duty and responsibility for the performance of the Group and to ensure the interests of the shareholders are protected. The Board guides the Company on its short and long-term goals, provides advice and directions on management and business development issues while providing balance to the management of the Company.
The Board is responsible for the following:
• Reviewing and adopting a strategic plan for the Group; • Identify risks and ensure the implementation of appropriate systems to manage these risks; • Overseeing the conduct of the Group’s business to evaluate whether the business is being properly managed; • Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing senior management; • Developing and implementing an investor relations programme or shareholders communication policy for the Group; and • Reviewing the adequacy and the integrity of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
All Board committees report to the Board. The Board meets on a regular and scheduled basis, at least four (4) times a year.
For financial year ended 31 March 2015, all Directors attended the board meeting according to the time in office.
17 Statement of Corporate Governance (Cont’d)
1. BOARD OF DIRECTORS (CONT’D)
B. Composition and Board Balance
Presently, the Board comprises eight (8) members who are working closely as a team to safeguard the interest of the company, shareholders as well as stakeholders.
The Board is chaired by an Independent Non-Executive Director and the other members are made up of a Chief Executive Officer, who is also the Group Managing Director, two (2) Executive Directorss, three (3) Independent Non-Executive Directors and one (1) Non- Independent Non-Executive Director.
A brief profile of each Director is set out under the Profile of the Board of Directors of this Annual Report.
The Board composition represents a mix of knowledge, skills and expertise in business, financial, industrial and legal experience to effectively discharge its stewardship responsibilities in spearheading the Group’s growth and future direction. The Independent Non-Executive Chairman is responsible for the Board’s effectiveness and standard of conduct whilst the Group Managing Director/ Chief Executive Officer has the overall responsibility to oversee the business and operations. The clear division of responsibilities between these roles will ensure a balance of power and authority.
Where areas of conflict of interest arise, the Director concerned will have to declare his/her interest and abstain from participating in the decision making process.
The Company is in compliance with the Code as well as Rule 15.02 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad, which requires the Board to have at least two (2) directors or one-third (1/3) of the Board to be Independent Directors.
C. Appointments and Re-election of Directors
All appointments of directors to the Board are properly made with an established and transparent procedure and in compliance with the relevant rules of the relevant authorities. Any appointment of additional director will be made as and when it is deemed necessary by the existing Board with due consideration given to the mix and range of expertise and experience required for an effective Board.
In accordance with the Company’s Articles of Association, an election of Directors shall take place each year at an Annual General Meeting and all Directors shall retire from office once at least in every three (3) years. In addition, a Director who attains the age of seventy (70) retires at every Annual General Meeting pursuant to the Companies Act, 1965. Directors appointed by the Board are subject to retirement at the next Annual General Meeting held following their appointments in accordance with the Company’s Articles of Association. All retiring Directors are eligible for re-election.
18 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statement of Corporate Governance (Cont’d)
1. BOARD OF DIRECTORS (CONT’D)
D. Board Committees
In line with the Best Practices of the Code, the Company has established two (2) Board Committees to assist in the performance of certain duties of the Board. The Board Committees are made up of Non-Executive Directors, with the majority being Independent Directors. The Board considers that the mix of commercial experience from the Non-Executive Directors will complement the Executive Directors and create an effective Board.
(i) nominating Committee
The Nominating Committee (“NC”) currently comprises:
• See Poh Yee (Chairman) • Selva Rasan a/l Dato’ Puspa Das (Appointed on 29 January 2015) • Mohamad Farid Bin Mohd Yusof (Appointed on 29 January 2015) • Yap Tai Yeong (Resigned on 29 January 2015) • Leou Thiam Lai (Retired on 25 September 2014)
The NC is responsible for identifying and making recommendations of new nominees to the Board for consideration, who shall then collectively decide on the candidates to be appointed. The NC is reviewed on an annual basis, to ensure that the size of the Board is optimum and that there is an appropriate mix of skills and experience and other qualities, including core competencies in the composition of the Board.
(ii) remuneration Committee
The Remuneration Committee (“RC”) currently comprises:
• Mohamad Farid Bin Mohd Yusof (Chairman) (Appointed on 29 January 2015) • Yap Tai Yeong (Chairman) (Resigned on 29 January 2015) • See Poh Yee • Selva Rasan a/l Dato’ Puspa Das (Appointed on 29 January 2015) • Leou Thiam Lai (Retired on 25 September 2014)
The RC’s function is to recommend to the Board on the remuneration packages of CEO and Executive Directors of the Company in all its forms, drawing from outside advice as necessary. Executive Directors shall play no part in decisions on their own remuneration. The determination of the remuneration package for Non-Executive Directors shall be a matter for the Board as a whole. The Director concerned shall abstain from deliberations and voting on decisions in respect of his individual remuneration package.
19 Statement of Corporate Governance (Cont’d)
1. BOARD OF DIRECTORS (CONT’D)
E. Board Meeting and Supply of Information
The Board meets at least quarterly to control and monitor the development of the Group. Additional meetings will be convened as and when required. Comprehensive Board papers are prepared prior to the Board meeting and sufficient notice is given to the Directors to review the papers and agenda for the meeting. Generally, the Board papers provide information on the operating results, financial, corporate development, minutes of Board Committees and new proposals, if any. In furtherance of the Directors’ duties, all members, either as full Board or in their individual capacities, will have access to all information of the Group.
Directors are also free to seek independent advice should the need arise and have direct access to the advice and services of the Company Secretary.
The proceedings and resolutions reached at each Board meeting are recorded in the minutes of the meetings, which are kept in the Minutes Book at the Registered Office.
Besides Board meetings, the Board exercises control on matters that require its approval through circulation of Directors’ Resolutions.
The summary of attendance at the Board meetings held for the financial year ended 31 March 2015 is as follows:
Name of Directors Total No. of Meetings Attended
TENGKU AZLAN IBNI SULTAN ABU BAKAR N/A (Appointed on 8 April 2015)
YAP TAI TEE 10/11
DATO’ MOHAMED RIDZUAN BIN NOR MD N/A (Appointed on 8 April 2015)
DATO’ YEN SOON AI 2/4 (Appointed on 29 January 2015)
DATUK RAIME BIN UNGGI 1/4 (Appointed on 29 January 2015)
SELVA RASAN A/L DATO’ PUSPA DAS 3/4 (Appointed on 24 December 2014)
SEE POH YEE 11/11
MOHAMAD FARID BIN MOHD YUSOF 4/4 (Appointed on 9 January 2015)
LT GEN (rtd) DATUK KHAIRUDDIN BIN MAT YUSOF 7/10 (Resigned on 17 February 2015)
NA CHIANG SENG (Resigned on 8 April 2015) 11/11
YAP TAI YEONG (Resigned on 29 January 2015) 7/7
LEOU THIAM LAI (Retired on 25 September 2014) 4/5
20 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statement of Corporate Governance (Cont’d)
1. BOARD OF DIRECTORS (CONT’D)
F. directors’ Training
All Directors have at least quarterly briefings and updates on the Group businesses, operations, risk management, internal controls, finance and changes on the rules and regulations. In addition, the directors attended various conference, seminars and programmes to enhance their skills and knowledge to effectively discharge their duties as a director.
The Board encourages its Directors to attend talks, seminars, workshops and conferences to update and enhance their skills and knowledge to enable them to carry out their roles effectively as Directors in discharging their responsibilities towards corporate governance, operational and regulatory issues. The Directors are briefed by the Company Secretary on the letters and circulars issued by Bursa Securities, if any, at every Board meeting.
As at the end of the financial year under review, save and except for Tengku Azlan Ibni Sultan Abu Bakar and Dato’ Yen Soon Ai, all the Directors of the Company had completed the Mandatory Accreditation Programme as prescribed by the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad.
G. director’s Remuneration
The Board set up the Remuneration Committee on 2 December 2004 to review the policy and make recommendations to the Board on the remuneration package and benefits annually as accorded to the Executive Directors. The Executive Directors shall not participate in the decision makings relating to their own remunerations.
Fees payable to the Directors are recommended by the Board with the approval from shareholders at the Annual General Meeting. Generally, the remuneration package will be structured according to the skills, experience and performance of the Executive Directors to ensure the Group attracts and retains the Directors needed to run the Group successfully, whereby the remuneration package for the Non Executive Directors will hinge on their contribution to the Group in terms of their knowledge, and level of responsibilities undertaken by non Executive Directors experience.
The breakdown of the remuneration of the Directors, categorised into appropriate components for the financial year ended 31 March 2015 is as follows:-
Executive non-Executive Total (RM) Directors directors
Salaries, allowance and bonus 278,975 292,491 571,466 Benefits-in-kind 35,233 – 35,233
Total 314,208 292,491 606,699
21 Statement of Corporate Governance (Cont’d)
1. BOARD OF DIRECTORS (CONT’D)
G. director’s Remuneration (Cont’d)
The Directors’ remuneration are broadly categorised into the following bands:
Number of Directors E executive non-Executive Total (RM)
Below RM 50,000 – – – RM 100,001 to RM 150,000 1 – 1 RM 150,001 to RM 200,000 1 – 1 RM 400,001 to RM 500,000 – – –
Total 2 – 2
2. shAREHOLDERS AND INVESTORS RELATION
The Group recognises the importance of accountability to the shareholders and its investors, the Board is committed to ensure that the shareholders and other stakeholders are well informed of major development of the Company and the information is communicated timely to them through the following:
(i) Timely quarterly results announcements and various announcements made to Bursa Malaysia Securities Berhad which are available publicly on the internet via Bursa Malaysia Securities Berhad’s website at http://www.bursamalaysia.com
(ii) Annual Report
(iii) Annual general Meeting (“AGM”)
AGM is used as a primary mode of communication to report on the Group’s performance. Notice of Annual General Meeting is issued at least twenty-one (21) days before the date of meeting. At the Annual General Meeting, shareholders are encouraged to raise any questions pertaining to any issues regarding the Group. The Chief Executive Officer, assisted by the Directors are available to answer any queries and discuss matters pertaining to the business activities of the Group. The AGM remains as the principal forum for dialogue with shareholders who are encouraged to participate in the question and answer session. Executive Directors and Chairman are available to respond to shareholders’ questions raised during the meeting;
(iv) As part of the Board’s responsibility in developing and implementing an investor relations programme, regular discussions are held between the Company and analyst/investors throughout the year. Presentations based on permissible disclosures are made to explain the Group’s performance and major development programmes; and
(v) Other Channels of Communications
The Group’s website at www.asdion.com which shareholders as well as members of the public are invited to access for the latest information on the Group.
22 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statement of Corporate Governance (Cont’d)
3. ACCOUNTABILITY AND AUDIT
(a) Financial Reporting
In preparing the annual financial statements and quarterly announcements, the Directors took steps to ensure a clear, balanced and understandable assessment of the Group’s positions and prospects. The Statement by Directors pursuant to section 169 of the Companies Act, 1965 is set out on page 44 of this Annual Report.
(b) internal Controls
The Board recognises its responsibilities to maintain a sound system of internal controls to safeguard shareholders investment and Group’s assets. The Board has established an Audit Committee to oversee the financial reporting and effectiveness of the internal control of the Group. The review of the system of internal control is set out under the Statement on Internal Control on pages 25 to 27 of this Annual Report.
(c) Audit Committee / Relationship with Auditors
The Audit Committee works closely with the external auditors and maintains a transparent professional relationship with them. A summary of the activities of the Audit Committee during the year are set out in the Audit Committee Report on pages 12 to 16 of this Annual Report.
4. COMPLIANCE STATEMENT
The Company is committed to achieve high standards of corporate governance throughout the Group as well as the highest level of integrity and ethical standards in all of its business dealings. The Board will continue to strive for the full compliance with the Malaysian Code of Corporate Governance in the coming financial year.
5. CORPORATE SOCIAL RESPONSIBILITY
The Group believes that corporate organisations have a responsibility towards maintaining the highest level of integrity in their dealings with all their stakeholders, including the local communities where they operate. The Group corporate social responsibility (“CSR”) strategy goes along with the Bursa Malaysia CSR Framework in areas of community, environment, workplace and marketplace.
A. COMMUNITY
The Group participates in The Yellow Ribbon Project which offers ex-offenders employment opportunities.
23 Statement of Corporate Governance (Cont’d)
5. CORPORATE SOCIAL RESPONSIBILITY (CONT’D)
B. ENVIRONMENT
We continue to promote the responsible usage of resources and the importance of environment protection amongst our employees. The Group continue educating our staff on the importance of energy conservation such as instilling good habit of switching off the light, air-conditioning and switch the production machinery to standby mode during lunch time or when it is not required or out from the office.
The Group stress on the commitment to streamline all internal transactions and communications towards a paperless office to build the awareness of green environment. The Group also participate in the recycle program that arranged by the relevant organisation.
C. WORKPLACE
The Group strive to adhere to stringent occupational health and safety practices, providing a safer working environment for our workforce. The company encourage the employees participates in various Health, Safety and Environment programmes that arranged by the relevant organisation to instil awareness in our employee.
The Group believe training and development is very important in developing and upgrading skills, knowledge and attitudes to ensure optimal performance. Thus, we constantly provide in- house training programmes to enhance and increase employees job-related skills knowledge and experience. The Group also committed to career development of our management and support staff, by sponsoring key personnel for training and seminars.
The Group had organised throughout the year to create social balance and maintain harmony and build better rapport such as social gatherings, company trips, team building activities and yearly reviews. Staff gatherings, including open house for the major festivities, are also organised to encourage more interaction amongst our employees.
D. MARKET PLACE
Good business ethics should be a part of every business, therefore the Group belief that established behavioural standards and written codes of ethical conduct can help bolster virtuous values and promote ethical organisational behaviour.
24 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statement of Risk Management and Internal Control
INTRODUCTION
The Malaysian Code on Corporate Governance (“Code”) requires listed companies to establish a sound risk management framework and internal control system to safeguard shareholders’ investments and its assets. In this respect, the Board of Asdion Berhad is pleased to present the following Statement on Risk Management and Internal Control which was prepared pursuant to the Listing Requirements and after taking consideration of the guideline as guided by the Statement on Risk Management and Internal Control Guidelines for Directors of Listed Issuers.
BOARD RESPONSIBILITY
The Board of Directors recognises the importance of a sound risk management frame work and internal control system for good corporate governance practices covering financial and operation activities to safeguard shareholders’ investment, the Group’s assets and customers’ interest.
The Board also acknowledges its primary responsibility to ensure that the principal risks in the Group are identified, measured and managed with appropriate internal control system, and to ensure that the effectiveness, adequacy and integrity of the internal control system are reviewed on an ongoing basis. The system of internal control is designed to manage the Group’s risk within acceptable risk profile, rather than eliminate the risk of failure to achieve Group’s policies and business objectives, and provides reasonable assurance against material errors, misstatement or irregularities.
RISK MANAGEMENT
The Group consists of several companies, each of which has its own management and internal control structures based on the frameworks and guideline given by the Board. Operating management of each business unit bears responsibility for the identification and mitigate of major business risks and each maintains controls and procedures appropriate to its own business environment. Regular reports and meeting from the heads of the respective subsidiaries confirming their systems and procedures are in place to identify, control and report on the major risks such as credit risk, operational risk, market risk, IT risk, liquidity risk and etc. These are being escalated and reviewed by the Board.
KEY ELEMENTS OF THE SYSTEM OF INTERNAL CONTROL
The Managing Director and senior management team monitor the day-to-day affairs of the Group by attending scheduled meetings both at management and operational levels and review their performance and operation reports. These include technical and operations meetings and management review meetings for the subsidiaries.
The key control processes established in reviewing the adequacy and integrity of the system of internal control include the following:-
1. A formal organisation structure for the Group and subsidiaries have been established with defined reporting lines of authority, responsibility and accountability. Authority limits are also imposed on Executive Directors and management within the Group in respect of the day-to-day operations to ensure proper accountability and segregation of duties.
25 Statement of Risk Management and Internal Control (Cont’d)
KEY ELEMENTS OF THE SYSTEM OF INTERNAL CONTROL (cont’d)
The key control processes established in reviewing the adequacy and integrity of the system of internal control include the following (cont’d):-
2. There are clear definition of authorisation procedure for major operating functions including purchases, capital expenditures, payment, credit control and stock control. Authority of the Directors is required for key treasury matters including loan and trade financing, cheque signatories and opening of bank accounts.
3. There is a budgeting and business planning process each year to establish plans and targets for each operating unit. The performance of each operating unit is monitored through monthly reports.
4. The Group’s management team meets regularly to review the Group performance, monitors the business development, discusses and resolves key operational and management issues and reviews the financial performance against the business plan and budget for each operating unit within the Group. The management also regularly highlights the significant issues and changes in the business, major policy matters, external environment affecting the Group and financial performance of each operating unit to the Board.
5. The Audit Committee will also review the internal audit functions, internal audit reports and monitor the status of the implementation of corrective actions to address internal control weaknesses.
6. Management has established human resource policies and procedures, which encompasses a wide spectrum of human resource management, including recruitment, performance appraisal and promotion, resignation/termination of employment, training and development, benefits and disciplinary action. The policies and procedures are compiled into an Employee Handbook, and made readily available to staff at their convenience.
INTERNAL AUDIT FUNCTION
The Group outsources its internal audit function to a professional firm of consultants, which provides the Board with much of the assurance it requires regarding the effectiveness as well as the adequacy and integrity of the Group’s system of risk management and internal control.
Internal audits are carried out on-going review process of the operations to access the effectiveness of the control environment and to highlight significant risks as well as areas requiring improvements.
Based on the audits, the internal auditors will recommend on areas of improvement and at subsequent audits, they will conduct follow-up review to determine whether improvements have been made.
The cost incurred for the internal audit function for the year ended 31 March 2015 amounted to RM7,500.00.
26 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statement of Risk Management and Internal Control (Cont’d)
CONCLUSION
The Board is of the view that the state of the Group’s internal control system is generally adequate and effective in mitigating risks to achieve its business objective. Continuous review of its internal control system would be carried out in line with the changes in the business and relevant laws and regulations to ensure its effectiveness in safeguarding shareholders’ investment and the Group’s assets.
This statement is made in accordance with a resolution of the Board of Directors on 14 August 2015.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
The external auditors have reviewed this Statement on Risk Management & Internal Control for inclusion in the annual report of the Company for the year ended 31 March 2015 and reported to the Board that nothing has come to their attention that warrants them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of risk management and internal controls.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Director of the Company are required to ensure that the financial statements for each financial year are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved MASB accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year and of the results and cash flows of the Group and the Company for that period.
In the opinion of the Directors of Asdion Berhad, no circumstances have arisen since the last audited financial statements of Asdion Berhad and its subsidiaries which have adversely affected the trading or the value of the assets of Asdion Berhad or its subsidiary companies.
27 Additional Compliance Information
1. share Buy Back
No share buy back scheme was in place during the financial year ended 31 March 2015.
2. options, Warrants or Convertible Securities Exercised in the Financial Year Ended 31 March 2015
As at 31 March 2015, 52,191,260 Warrants 2014/2019 remained unexercised.
3. depository Receipt Programme
During the financial year under review, the Company did not sponsor any depository receipt programmes.
4. sanctions and/or Penalties
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies during the financial year.
5. non-Audit Fees
Non-audit fees paid out to external auditors by the Group for the financial year ended 31 March 2015 was RM5,000.
6. Profit Guarantee
The Company did not issue any profit guarantee during the financial year.
7. Utilisation of Proceeds
(a) Proceeds raised from Private Placement exercise completed on 31 March 2014
On 31 March 2014, Asdion had completed the private placement of 29,227,000 new ordinary shares of RM0.10 each in Asdion (“Placement Shares”) with 43,840,500 detachable warrants (“Private Placement”). The Company had raised a total of RM13.91 million from the Private Placement.
Since the completion of the Private Placement, the Company has yet to identify any potential land bank for its property investment and development business.
On 30 January 2015, Asdion announced that the Company had entered into a share sale agreement with Dato’ Mohamed Ridzuan bin Nor Md for the acquisition by Asdion of 510,000 ordinary shares of RM1.00 each in TAZ Logistics Sdn Bhd (“TAZ”), representing 51% of the issued and paid-up share capital of TAZ for a cash consideration of RM6 million (“Acquisition of TAZ”). The Acquisition of TAZ was completed on 6 February 2015.
28 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Additional Compliance Information (Cont’d)
7. Utilisation of Proceeds (Cont’d)
(a) Proceeds raised from Private Placement exercise completed on 31 March 2014 (Cont’d)
On 22 December 2014, Top Valley Properties Sdn Bhd (“Top Valley”) had entered into an Off Take Agreement cum Sale and Purchase Agreement with Nexgram Land Sdn Bhd (a wholly- owned subsidiary of Nexgram Holdings Berhad) (“Developer”) and MyAngkasa Bina Sdn Bhd (“Purchaser”) whereby Top Valley and the Developer have agreed to sell and the Purchaser has agreed to purchase the entire mixed property development project to be undertaken by the Developer on a parcel of land which is to be identified (“Selangor Project”). Subsequently, Top Valley has identified the development land for the Selangor Project.
On 12 February 2015, at the invitation of Top Valley, Asdion had entered into a Joint Venture Agreement with Top Valley to participate in the expected economic benefits of the development of the Selangor Project on a joint venture basis for a total cash consideration of RM6 million (“Participation Sum”) (“JV Arrangement”). The JV Arrangement was deemed completed following the payment of the Participation Sum by Asdion to Top Valley on the same date.
Arising from the acquisition of TAZ and JV Arrangement, the Company intends to vary the utilisation of proceeds raised from the Private Placement and to channel the funds raised to the following uses:-
Purpose of proceeds Original Actual Deviation Revised proposed proposed utilisation utilisation of proceeds utilisation as at of proceeds 24 July 2015 as set out in the circular dated 12 February 2014 Amount Amount Amount Amount Expected timeframe for utilisation RM’000 RM’000 RM’000 RM’000
(i) To finance the acquisition 13,362 – (3) (4) 13,362 – – and/or development of land
(ii) Estimated expenses in (1) 550 (1) 360 190 – – relation to the Private Placement
(iii) Working capital – (1) 190 (190) (4) 1,362 Within 24 months
(iv) Acquisition of TAZ – 6,000 (6,000) (4) 6,000 Utilised
(v) JV Arrangement – 6,000 (6,000) (4) 6,000 Utilised
Total (2) 13,912 13,362
29 Additional Compliance Information (Cont’d)
7. Utilisation of Proceeds (Cont’d)
(a) Proceeds raised from Private Placement exercise completed on 31 March 2014 (Cont’d)
Notes:- (1) The actual expenses for the corporate exercise in relation to the Private Placement was lower than the estimated expenses for the said exercise, hence the remaining amount has been allocated to working capital of Asdion and its subsidiaries (“Asdion Group” or the “Group”). (2) As disclosed in the circular to the Company’s shareholders dated 12 February 2014, the total amount of proceeds to be raised was up to RM16.1 million, based on the illustrative issue price of RM0.550 per Placement Share. The actual proceeds raised was approximately RM13.9 million, based on the actual issue price of RM0.476 per Placement Share. (3) This amount was initially earmarked to finance the acquisition and/or development of land. On 1 April 2014, the Company entered into an agreement with Premium Secretaries Sdn. Bhd. (“PSSB”) to appoint PSSB as a consultant to acquire land(s) in Johor (“Agreement”). Upon the execution of the Agreement, this amount was used as a refundable deposit and paid to PSSB (“Deposit”) in accordance with the terms and conditions of the Agreement. As at 12 September 2014, PSSB has not identified any potential land banks and has refunded the Deposit to the Company. (4) The amount that was originally earmarked to finance the acquisition and/or development of land has been utilised to fund the Acquisition of TAZ (“Proposed Variation 1”) and the JV Arrangement (“Proposed Variation 2”). The balance proceeds of approximately RM1.36 million is proposed to be allocated to fund the working capital of the Group (“Proposed Variation 3”). The Proposed Variation 1, Proposed Variation 2 and Proposed Variation 3 shall collectively be referred to as the “Proposed Variations”. (5) As per the announcement made by the company on 28 April 2015, the company shall seek the shareholders’ approval on the Proposed Variations at an EGM to be convened.
(b) Proceeds derived from Disposal of Property completed on 19 May 2015
On 1 December 2014, the Board announced that the Company had on the same day, entered into a Sale and Purchase Agreement with Environmental Science (M) Sdn Bhd (“ESSB”) for the proposed disposal of a property comprises a six (6) storey individually designed office cum factory building with a covered rooftop level and a single storey guard house bearing the postal address of No. 9, Persiaran Industri, Bandar Sri Damansara, 52200 Kuala Lumpur to ESSB for a total disposal consideration of RM9,200,000 (“Disposal Consideration”) (“Proposed Disposal”)
The Proposed Disposal has been completed on 19 May 2015 in accordance with the terms and conditions of the Sale and Purchase Agreement.
30 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Additional Compliance Information (Cont’d)
7. Utilisation of Proceeds (Cont’d)
(b) Proceeds derived from Disposal of Property completed on 19 May 2015 (Cont’d)
The details of the utilisation of the proceeds derived from the Proposed Disposal are as follows:-
Purpose of proceeds Original Actual Proposed utilisation of proposed utilisation the remaining Disposal utilisation as at Consideration of Disposal 24 July 2015 Consideration as set out in the circular dated 20 January 2015 Amount Amount Amount Expected timeframe for utilisation RM’000 RM’000 RM’000
(a) To fund future property (1) 4,000 – (1) 4,000 Within 24 development project(s) months
(b) Acquisition of assets(s) / (2) 1,500 (200) (2) 1,300 Within 24 business(es) months
(c) Repayment of bank 1,300 (1,300) – Utilised borrowing
(d) Working capital (3) 1,700 (550) (3) 1,150 Within 12 months
(e) Estimated expenses 700 (700) – Utilised in relation to the Proposed Disposal
Total 9,200 (2,750) 6,450
31 Additional Compliance Information (Cont’d)
7. Utilisation of Proceeds (Cont’d)
(b) Proceeds derived from Disposal of Property completed on 19 May 2015 (Cont’d)
Notes:- (1) The amount has not been earmarked for specific property development projects at this juncture as our Group is in the process of evaluating suitable property development projects to be carried out in Peninsular Malaysia. The utilisation shall include the initial/preliminary costs to be incurred in relation to property development projects such as land clearance cost, consultation fee, survey fee and piling cost of which the exact breakdown and quantum to be utilised for the specific purposes have not been determined. The Company will make the appropriate announcement, if required, in respect of the property development projects identified in due course. (2) Our Group is in the midst of identifying other business opportunities to expand our business in the property investment and development division, which include acquisition of potential land banks and/or equity interest in potential property investment and/or property development company(ies), of which the breakdown for the utilisation cannot be determined at this juncture. Our Group will make the appropriate announcement, if required, in respect of the acquisition of asset(s)/business(es) identified in due course. (3) Working capital for on-going operational activities of our Group primarily consists of operating and administrative expenses and payment to trade creditors of which the breakdown for the utilisation has yet to be determined at this juncture.
8. Material Contract Involving Directors and Substantial Shareholders
There were no material contracts entered into by the Company and its subsidiaries involving the interests of Directors’ and substantial shareholders’ during the financial year under review.
9. Material Contracts Relating to Loans
There were no material contracts relating to loan entered into by the Company and its subsidiaries involving Directors and major shareholders.
10. revaluation Policy on Landed Properties
The Group does not have a revaluation policy on landed properties.
11. recurrent Related Party Transactions Statement
During the financial year, the Company did not enter into any recurrent related party transactions of revenue or trading nature.
32 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Chairman’s Statement
Dear Valued Shareholders,
On behalf of the Board of Directors, I have great pleasure in presenting the Annual Report and the Financial Statements of the Group and the Company for the financial year ended (“FYE”) 31 March 2015.
Financial Performance
For the financial year under review, the Group’s revenue decreased by approximately 1% to RM4.32 million against previous financial year (“FYE 2014”) of RM4.37 million. However, the gross profit increased by approximately 54% to 3.15 million in FYE 2015 against FYE 2014 of RM2.04 million. The significant increase in the gross profit was contributed by the revenue generated from a newly acquired subsidiary involved in the logistics business.
Despite a decline in revenue, the Group managed to reduce its Loss Before Tax (“LBT”) by 30% from over RM3.38 million LBT as registered in FYE 2014 to RM2.37 million. The significant reduction in LBT was mainly attributed to the series of corporate and business reorganisations starting from 2010 aimed at strengthening and redefining the Group’s business direction, which contributed to the better operating performance by the various operating subsidiaries.
Corporate Development
Asdion has been incurring losses for the past few years, the Board has taken proactive measures to enhance the Group’s revenue and profitability in a bid to improve its financial condition.
Several strategies are highlighted as follows:
1. regional market expansion plan
Despite the global financial uncertainty in the Euro Zone and the U.S.A and with rising labour costs and high material prices in China, the Group remains confident on its targets which are the Indonesia and Myanmar markets. The Group shall intensify its marketing efforts in penetrating the targeted markets. With its past track records and credentials of delivering cost effective solutions for projects, the Group believes that these new markets will provide growth for the Group in terms of profitability in the coming years.
2. strengthen the range of products, services and solutions
In enhancing the revenue and profitability, the Group has to constantly improve and enhance its range of products, services and solutions through its continuous product improvement efforts.
The Group’s suite of solutions including the SYMPHONY hospitality solution suite, are undergoing a major shift to support cloud computing, in order to take full advantage of cloud computing’s benefits such as lower costs, higher speed and connectivity which allows solutions to be adopted on the go. This new development allows the Group to market SYMPHONY in innovative packages such as Software as a Service (SaaS), Pay As You Use or as a commission based model; serving guests who are increasingly gravitating towards self-service or do-it-yourself service methods using their mobile/internet connected devices.
33 Chairman Statement (Cont’d)
2. strengthen the range of products, services and solutions (Cont’d)
Going forward, in meeting the Group’s objective of enhancing its revenue and profitability, the Group will continue to explore and assess other viable business ventures in expanding and diversifying its range of products, services and solutions, within the same or in complementary sectors. The Group is also exploring the possibility of acquiring other businesses/assets in a different industry in order to diversify from the competitive nature of its existing software and information technology businesses. In such an event, the Group will carefully consider the risks involved and will recruit the relevant expertise if it eventually decides to invest in a new business.
3. Working capital
In fiscal year 2015, the Group has continued to embark on the following exercises to increase working capital to enable the Group to take on new projects and/or new investment opportunity should it arise.
On 3 June 2014, the Company announced that it is proposing to undertake a proposed private placement of up to 200 million new irredeemable convertible preference shares A (“ICPS A”) and new irredeemable convertible preference shares B (“ICPS B”) of RM0.01 per ICPS at an issue price of RM0.045 per ICPS in the Company.
On 5 August 2014, the Board has decided to revise the utilisation of proceeds to be raised from the Proposed Private Placements after taking into consideration the progress of the negotiations with the relevant parties on the potential property development project identified as follow:-
(I) Proposed Private Placement of up to 200.0 Million new IPCS A of RM0.01 per ICPS A at an issue price of RM 0.045 per ICPS A in the company (“Proposed Private Placement A”);
(II) Proposed Private Placement of up to 200.0 Million new ICPS B of RM0.01 per ICPS B at an issue price of RM 0.045 per ICPS B in the company (“Proposed Private Placement B”);
(The Proposed Private Placement A and Proposed Private Placement B are collectively referred to as “Proposed Private Placements”)
(III) Proposed increase in the authorised Share Capital of the company from RM 50.0 million comprising 500.0 million ordinary shares of RM0.10 each in AB (“AB Share” or “Shares”) to RM 1.0 billion comprising 9.96 billion AB Shares, 200.0 million ICPS A and 200.0 million ICPS B (“Proposed increase in authorised share capital”) and
(IV) Proposed Amendments to the Memorandum and Articles of Association (“M&A”) of AB (“Proposed amendments”)
4. investment in new business(es) or assets
In line with Asdion’s diversification into property investment and development, the Company entered into a Joint Venture Agreement with Top Valley Properties Sdn Bhd(1) upon their invitation on 12 February 2015 to participate in the expected economic benefit of a property development project on a joint venture basis which entails the construction and development of residential and commercial buildings. The Joint Venture Agreement serves as an initial foray of the Company into property investment and development segment.
34 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Chairman Statement (Cont’d)
4. investment in new business(es) or assets (Cont’d)
To further expand the Group’s business portfolio and diversify its revenue sources, the Company has also ventured into the logistics business by acquiring 51% of equity interest in TAZ Logistics Sdn Bhd(1) on 30 January 2015. The rationale for the acquisition was due to the attractive growth prospects of the logistics sector in Kuantan, details of which are as set out in the Company’s announcement dated 30 January 2015. The Board believes that the acquisition will potentially provide the Group with another profit avenue, thus improving the financial performance of the Group in the future.
The Board is constantly on the lookout for good business opportunities that will yield the greatest return for our shareholders and investors in the long term.
Notes:
(1) As per the announcements made by the company on 28 April 2015, the company shall seek the shareholders’ approval on the proposed diversification of the business of Asdion and its subsidiaries to include the business of logistics and the proposed ratification of the joint venture arrangement with Top Valley Properties Sdn Bhd at an EGM to be convened.
5. Dividends
The Board of Asdion does not recommend any dividend in respect of the financial year ended 31 March 2015.
6. Business Review and Outlook
Despite the global environment remaining challenging with the on-going European debt crisis and the slowdown of China’s economy growth, the Malaysian economy is expected to grow at a steady pace of 5% to 6% which continues to be supported by key driver of growth in domestic demand and gradual improvement in the external sector.
(Source: Malaysian Economy First Quarter 2015, Ministry of Finance, Malaysia)
The International Data Corporation (“IDC”) expects overall ICT growth in 2015 to be similar to 2014 at 7.6%, it expects Asia Pacific IT spending in 2015 to perform as well as it has in 2014, despite the ongoing world-wide economic risk environment. IDC expect the spending in the IT in Asia Pacific split between hardware, software, services and telecom services to remain quite stable through 2016.
7. research & Development
The Group’s R&D is essentially the key to ensure the continuity of the Asdion solution’s evolvement and competing in the market.
As mentioned on the Note (ii) on the strategy to enhance the Group’s revenue and profitability at the Corporate Development section, the Group’s suite of solutions are undergoing a major shift to support cloud computing.
The migration to cloud computing has started in 1st Quarter 2015 and the beta version is expected to be completed sometime in 3rd Quarter 2015. The new re-designed SYMPHONY hospitality solution will be optimised to take advantage of the flexibility and convenience provided by the internet, cloud-computing and the proliferation of mobile devices. Designed to be modular, it is intended to serve the needs of emerging budget/ boutique hotels and hotel chains which are getting the bulk of their bookings through the internet. The estimated costs of the cloud computing shift are estimated at RM250,000 to be financed by internally generated funds.
35 Chairman Statement (Cont’d)
7. Research & Development (Cont’d)
The Group’s other solutions include Sonata Food & Beverage POS Systems and Soprano CRM Systems which are currently under evaluation for a similar shift into cloud computing. Sonata Food & Beverage POS Systems is a Windows-based, touch-screen system that is designed to increase the operating efficiency of fast food, casual dining or fine dining restaurant and/or food and beverage operations. Further, Soprano CRM Systems is a Customer Loyalty and Retention Program that provides details of every customer such as sales history, loyalty features and redemption.
The Group is targeting to finalise the development specification of these aforesaid 2 solutions after the completion of the SYMPHONY migration, which is expected to be in 3rd Quarter this year. As the plan to shift the Sonata Food & Beverage POS Systems and Soprano CRM Systems to cloud computing is still in the preliminary stages, the estimated timeframe for completion and estimated costs are unavailable at this juncture.
Prospects
The Group believe that the performance of the company will improve in the coming years as the outlook for the emerging economies is more favourable and well supported by domestic and regional demand in spite of the vulnerable external environment.
Moving forward, the Group will continue pursuing cost cutting measures to keep the operating costs of the Group under control by redefining the way the Group carries out its business operations. Despite the cost control measure, the Group will continue to invest in human resource by employing capable people equipped with the right experience, knowledge and skills to fill up senior, middle management and technical positions to implement business rationalisation strategies, by focusing on effective marketing activities, penetrating new unsaturated overseas markets, developing new solutions and services. The measurements are intended to ultimately achieve the overall objective of turning around the financial performance of the Group.
Barring any unforeseen circumstances, the Board expects the Group to register positive growth and improve on its earnings and financial position.
Appreciation
On behalf of the Board, I would like to express our sincere appreciation to the management team and staff who are integral to the Group’s success for their unwavering commitment and dedication and to our valued customers, bankers, business associates, regulatory authorities and shareholders for their continuing support and confidence in the Group.
Last but not least, to all my fellow Board members, I thank you for your invaluable continuing guidance and support.
Thank you,
TENGKU AZLAN IBNI SULTAN ABU BAKAR CHAIRMAN
36 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Financial Statements
Directors’ Report ... 38
Statement by Directors ... 44
Statutory Declaration ... 44
Independent Auditors’ Report ... 45
Statements of Financial Position ... 47
Statements of Profit or Loss and Other Comprehensive Income ... 49
Statements of Changes in Equity ... 51
Statements of Cash Flows ... 54
Notes to the Financial Statements ... 57
37 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 2015.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the businesses of investment holding, software development, information communication technology and related services. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.
RESULTS
Group Company RM RM
Loss after taxation for the financial year (2,599,070) (1,849,474)
Attributable to: Owners of the Company (2,810,009) (1,849,474) Non-controlling interests 210,939 –
(2,599,070) (1,849,474)
DIVIDENDS
No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year.
ISSUE OF SHARES AND DEBENTURES
There was no issuance of shares or debentures during the financial year.
38 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Directors’ Report (Cont’d)
WARRANTS
The Company had on 25 March 2014, issued 52,191,260 warrants to all shareholders of the Company on the following basis:-
(a) Issuance of 8,350,760 free warrants (“Free Warrants”) on the basis of one (1) Free Warrant for every ten (10) existing ordinary shares of RM0.10 each in the Company; and
(b) Private placement of 29,227,000 new shares (“Placement Shares”), together with 43,840,500 detachable warrants (“Placement Warrants”) on the basis of three (3) Placement Warrants for every two (2) Placement Shares subscribed.
The Free Warrants and Placement Warrants (“Collectively defined as “Warrant 2014/2019”) were listed on the ACE Market of Bursa Malaysia Securities Berhad on 31 March 2014.
As at 31 March 2015, 52,191,260 Warrants 2014/2019 remained unexercised.
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 shares of par value of RM0.10 each in the Company at an exercise price of RM0.50 each subject to adjustments in accordance with the conditions stipulated in the Deed Poll;
(ii) The exercise price of the warrants shall be determined and fixed by our Board at a later date where in any event shall not be lower that the par value of Asdion Shares of RM0.10 each;
(iii) 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;
(iv) 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
(v) 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.
39 Directors’ Report (Cont’d)
DIRECTORS
The Directors in office since the date of the last report are as follows:-
Yap Tai Tee See Poh Yee Selva Rasan A/L Dato’ Puspa Das (appointed on 24.12.2014) Mohamad Farid Bin Mohd Yusof (appointed on 9.1.2015) Dato’ Yen Soon Ai (appointed on 29.1.2015) Datuk Raime Bin Unggi (appointed on 29.1.2015) Tengku Azlan Ibni Sultan Abu Bakar (appointed on 8.4.2015) Dato’ Mohamed Ridzuan Bin Nor Md (appointed on 8.4.2015) Leou Thiam Lai (retired on 25.9.2014) Yap Tai Yeong (resigned on 29.1.2015) Lt Gen (rtd) Datuk Khairuddin Bin Mat Yusof (resigned on 17.2.2015) Na Chiang Seng (resigned on 8.4.2015)
DIRECTORS’ INTEREST
According to the register of directors’ shareholdings the interest of directors holding office at the end of the financial year in shares and warrants in the Company and its related corporations during the financial year are as follows:-
Number of ordinary shares of RM0.10 each At At 1.4.2014 Allotment sold 31.3.2015
Direct interest Yap Tai Tee 3,400,542 – – 3,400,542 Na Chiang Seng 20,429,400 – – 20,429,400
Number of warrants (2014/2019) of RM0.10 each At exercised/ At 1.4.2014 Allotment sold 31.3.2015
Direct interest Yap Tai Tee 340,054 – – 340,054 Na Chiang Seng 2,042,940 – (2,042,940) –
By virtue of his shareholding in the Company, Na Chiang Seng is deemed to have interest in shares of its related corporations during the financial year to the extent of the Company’s interest, in accordance with Section 6A of the Companies Act 1965.
The other directors holding office at the end of the financial year had no interest in shares in the company or its related corporations during the financial year.
40 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Directors’ Report (Cont’d)
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Since the end of the previous financial year, no Director has received or become entitled to receive any benefits (other than as disclosed in Notes 28 and 32 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) • Mohamad Farid Bin Mohd Yusof (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 all known bad debts had been written off and adequate provision had been made for doubtful debts; and
(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise.
41 Directors’ Report (Cont’d)
OTHER STATUTORY INFORMATION (CONT’D)
At the date of this report, the Directors are not aware of any circumstances:-
(a) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or
(c) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or
(d) not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.
At the date of this report, there does not exist:-
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
In the opinion of the Directors:-
(a) no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet its obligations as and when they fall due;
(b) the results of operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and
(c) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the current financial year in which this report is made.
42 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Directors’ Report (Cont’d)
SIGNIFICANT EVENTS
The significant events during the financial year and after the reporting period are disclosed as Note 37 to the financial statements.
AUDITORS
The Auditors, Messrs SJ Grant Thornton have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.
YAP TAI TEE
DATO’ MOHAMED RIDZUAN BIN NOR MD
Kuala Lumpur 29 July 2015
43 Statement By Directors
In the opinion of the Directors, the financial statements set out on pages 47 to 127 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2015 and of their financial performance and cash flows for the financial year then ended.
In the opinion of the Directors, the information set out on page 128 to the financial statements had been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.
YAP TAI TEE DATO’ MOHAMED RIDZUAN BIN NOR MD
Kuala Lumpur 29 July 2015
Statutory Declaration
I, Yap Tai Tee, 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 47 to 127 and financial information set out on page 128 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 ) 29 July 2015 ) YAP TAI TEE
Before me:
Commissioner for Oaths S.Arulsamy (W 490)
44 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Independent Auditors’ Report To the members of Asdion Berhad (Incorporated in Malaysia) (Company No: 590812-D)
Report on the Financial Statements
We have audited the financial statements of Asdion Berhad, which comprise the Statements of Financial Position as at 31 March 2015 of the Group and of the Company, the Statements of Profit or Loss and Other Comprehensive Income, Statements of Changes in Equity and Statements of Cash Flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes set out on pages 47 to 127.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 March 2015 and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
45 Independent Auditors’ Report (Cont’d)
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:- a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 5 to the financial statements. c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. d) The auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.
Other Reporting Responsibilities
The supplementary information set out on page 128 is disclosed to meet the requirements of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
The financial statements of the Company as of 31 March 2014 were audited by another firm of Chartered Accountants whose report dated 31 July 2014, expressed an unqualified opinion on those financial statements.
SJ GRANT THORNTON DATO’ N.K. JASANI (NO. AF: 0737) (NO: 708/03/16(J/PH)) CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT
Kuala Lumpur 29 July 2015
46 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statements of Financial Position For the financial year ended 31 March 2015
Group Company Note 2015 2014 2015 2014 RM rM RM rM
ASSETS
Non-current assets Property, plant and equipment 4 5,437,285 14,822,930 716 9,061,797 Investments in subsidiaries 5 – – 7,903,136 1,903,134 Investment in associates 6 – – 36 36 Intangible assets 7 – 393,247 – – Development costs 8 8,073 18,837 8,073 18,837 Other investment 9 104,644 31,525 – – Interest in a joint venture 10 6,000,000 – 6,000,000 – Goodwill 11 5,480,351 33,000 – –
Total non-current assets 17,030,353 15,299,539 13,911,961 10,983,804
Current assets Inventories 12 240,519 152,140 – – Trade receivables 13 1,446,184 419,319 – – Other receivables 14 5,678,262 3,453,296 5,051,199 3,186,575 Amount due from subsidiaries 15 – – 227,523 – Tax refundable 6,692 22,803 4,694 4,694 Short-term deposit with licensed bank 16 – 7,132 – – Cash and bank balances 1,867,799 15,540,055 1,484,845 15,463,286
Total current assets 9,239,456 19,594,745 6,768,261 18,654,555
Assets classified as held-for-sale 17 9,000,834 – 9,000,834 –
Total assets 35,270,643 34,894,284 29,681,056 29,638,359
EQUITY AND LIABILITIES EQUITY Share capital 18 11,273,460 11,273,460 11,273,460 11,273,460 Reserves 19 12,259,629 15,059,300 11,631,978 13,481,452
Equity attributable to owners of the Company 23,533,089 26,332,760 22,905,438 24,754,912
Non-controlling interests 979,020 76,230 – –
Total equity 24,512,109 26,408,990 22,905,438 24,754,912
47 Statements of Financial Position (Cont’d)
Group Company Note 2015 2014 2015 2014 RM rM RM rM
LIABILITIES
Non-current liabilities Deferred tax liabilities 20 141,964 265,035 – 194,003 Finance lease liabilities 21 43,935 90,071 – – Borrowings 22 1,573,601 3,239,927 – 1,342,696
Total non-current liabilities 1,759,500 3,595,033 – 1,536,699
Current liabilities Trade payables 23 106,422 226,673 – – Other payables 24 3,650,159 1,245,126 2,405,204 386,657 Amount due to directors 25 3,290,789 2,474,118 106,892 6,575 Amount due to subsidiaries 26 – – 2,810,322 2,720,289 Finance lease liabilities 21 46,708 57,262 – – Tax payable 164,000 5,772 – – Borrowings 22 1,546,953 881,310 1,259,197 233,227
Total current liabilities 8,805,031 4,890,261 6,581,615 3,346,748
Liabilities classified as held-for-sale 17 194,003 – 194,003 –
Total liabilities 10,758,534 8,485,294 6,775,618 4,883,447
Total equity and liabilities 35,270,643 34,894,284 29,681,056 29,638,359
The accompanying notes form an integral part of the financial statements.
48 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statements of Profit or Loss and Other Comprehensive Income For the financial year ended 31 March 2015
Group Company Note 2015 2014 2015 2014 rM rM rM RM
Revenue 27 4,323,575 4,369,382 – –
Cost of sales (1,168,874) (2,330,871) – –
Gross profit 3,154,701 2,038,511 – –
Other income 718,572 83,907 163,938 8,343
Administration expenses (4,881,923) (3,973,460) (1,485,402) (861,858)
Other expenses (802,033) (1,084,650) (71,011) (502,899)
Share of losses in associates – (157,186) – –
Finance costs (563,983) (291,622) (456,999) (161,585)
Loss before taxation 28 (2,374,666) (3,384,500) (1,849,474) (1,517,999)
Tax (expense)/income 29 (224,404) 122,115 – –
Loss after taxation (2,599,070) (3,262,385) (1,849,474) (1,517,999)
Other comprehensive income - Foreign currency translation (59,516) (39,891) – – - Gain on fair value changes of available-for-sale financial asset 73,119 – – –
Total other comprehensive income/(loss) for the year 13,603 (39,891) – –
Total comprehensive loss for the financial year (2,585,467) (3,302,276) (1,849,474) (1,517,999)
49 Statements of Profit or Loss and Other Comprehensive Income (Cont’d)
Group Company Note 2015 2014 2015 2014 rM rM rM RM
Loss after taxation Attributable to:-
Owners of the Company (2,810,009) (3,097,792) (1,849,474) (1,517,999) Non-controlling interests 210,939 (164,593) – –
(2,599,070) (3,262,385) (1,849,474) (1,517,999)
Total comprehensive loss attributable to:-
Owners of the Company (2,799,671) (3,157,759) (1,849,474) (1,517,999) Non-controlling interests 214,204 (144,517) – –
(2,585,467) (3,302,276) (1,849,474) (1,517,999)
Loss per share (sen) - Basic/Diluted 30 (2.49) (3.98)
The accompanying notes form an integral part of the financial statements.
50 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statements of Changes in Equity For the financial year ended 31 March 2015
Total equity
(39,891) (396,407) 3,703,440 (3,302,276) (3,262,385) 9,455,541 26,408,990 20,255,725 16,948,692
– – – –
76,230 20,076 (144,517) (164,593) 220,747 interests controlling
(59,967) (396,407) 3,703,440 9,234,794 (3,157,759) (3,097,792) 26,332,760 20,255,725 16,948,692
– – – – – losses s ub-total
(3,097,792) (3,097,792) (9,511,774) (12,609,566) Accumulated
– – – – – – – reserve 4,700,273 4,700,273
– – – – – – – 15,429 15,429 Capital r evaluation
– – – – – (59,967) (59,967) reserve reserve 126,723 186,690 on N currency translation N on-distributable D istributable
– – – – – Attributable to owners of the Company reserve Warrant (101,036) 4,567,977 4,567,977 4,669,013
– – – S hare (295,371) premium 2,753,840 7,202,176 8,597,819 18,258,464 11,056,288
Foreign – – – – M R M M r M M R r M r M R r M R S hare capital 949,600 4,631,460 6,642,000 3,681,860 11,273,460 comprehensive financial year, net after tax: financial year, (loss)/profit for the (loss)/profit financial year to owners of the Company:
Balance at 31 March 2014 Balance at 31 March Total comprehensive loss comprehensive Total - foreign currency translation currency - foreign
Other Loss after taxation for the
Total transactions with owners Total - Share issue expenses - Share exercised - Warrant - Private placement
Contributions by and distribution Balance at 1 April 2013 Group
51 Statements of Changes in Equity (Cont’d) – Total 13,603 73,119
(59,516) 157,610 530,976 (2,599,070) 24,512,109 26,408,990
–
3,265 7,312 (4,047) 76,230 979,020 210,939 157,610 530,976 interests quity e controlling
– – – 10,338 65,807 (55,469) (2,810,009) 23,533,089 26,332,760
– – – – losses s ub-total 239,978 239,978
(2,810,009) (15,179,597) (12,609,566) Accumulated
– – – – – reserve (239,978) (239,978) 4,460,295 4,700,273
– – – – – – Fair n on value 65,807 65,807 65,807 adjustment r evaluation
– – – – – – – 15,429 15,429 Capital
– – – – – 71,254 (55,469) reserve reserve reserve (55,469) istributable N on-distributable D 126,723 currency Attributable to owners of the Company translation
– – – – – – – reserve Warrant 4,567,977 4,567,977
– – – – – – – The accompanying notes form an integral part of the financial statements. premium 18,258,464 18,258,464
Foreign
– – – – – – – M M r M M R r M R M R M R R M R S hare s hare capital 11,273,460 11,273,460 the for comprehensive the financial year (loss)/profit for the year (loss)/profit asset of available-for-sale financial of available-for-sale (loss)/profit (loss)/profit net after tax: year,
Balance at 31 March 2015 Balance at 31 March
(Loss)/Profit after taxation for (Loss)/Profit
Total other comprehensive other comprehensive Total - foreign currency translation currency - foreign reserve of revaluation - realisation
- gains on fair value changes Other
Acquisition of a subsidiary Disposal of subsidiaries
Balance at 1 April 2014
Group
52 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statements of Changes in Equity (Cont’d)
Non-distributable Distributable Share share Warrant revaluation Accumulated Total Company capital premium reserve reserve losses equity RM RM RM RM RM RM
Balance at 1 April 2013 6,642,000 7,202,176 – 4,044,780 (11,871,770) 6,017,186
Loss for the financial year/ Total comprehensive loss – – – – (1,517,999) (1,517,999)
Contribution beyond distributions to owners of the Company: - Private placement 3,681,860 8,597,819 4,669,013 – – 16,948,692 - Issuance of shares 949,600 2,753,840 – – – 3,703,440 - Shares issue expenses – (295,371) (101,036) – – (396,407)
Total transactions with owners 4,631,460 11,056,288 4,567,977 – – 20,255,725
Balance at 1 April 2014 11,273,460 18,258,464 4,567,977 4,044,780 (13,389,769) 24,754,912
Loss for the financial year/ Total comprehensive loss – – – – (1,849,474) (1,849,474)
Balance at 31 March 2015 11,273,460 18,258,464 4,567,977 4,044,780 (15,239,243) 22,905,438
53 Statements of Cash Flows For the financial year ended 31 March 2015
Group Company Note 2015 2014 2015 2014 RM rM rM rM
OPERATING ACTIVITIES Loss before taxation (2,374,666) (3,384,500) (1,849,474) (1,517,999)
Adjustments for: Amortisation of development costs 10,764 10,764 10,764 10,764 Bad debts written off 21,192 131,370 – – Depreciation of property,plant and equipment 857,209 869,209 60,247 86,944 Impairment loss on: - investment in subsidiaries – – – 210,000 - intangible assets 393,247 – – – - investment in associates – 135,518 – – - other investment – 15,404 – – - trade receivables 10,747 18,519 – – - amount due from subsidiaries – – – 182,137 Interest expense 563,983 291,622 456,999 161,585 Inventories written off – 61,484 – – Share of loss in associates – 157,186 – – Gain on disposal of: - property, plant and equipment (12,670) – – – - subsidiaries (487,838) – (24,000) – Interest income (141,131) (8,581) (139,784) (8,343) Writeback of impairment loss on amount due from a subsidiary – – – (41,427)
Operating loss before working capital changes (1,159,163) (1,702,005) (1,485,248) (916,339)
Changes in working capital:- Inventories (88,379) (7,940) – 12,219 Receivables (3,088,950) (77,631) (1,864,624) – Payables 2,869,751 (2,670,716) 2,018,547 (3,144,307) Subsidiaries – – (137,490) – Directors 1,105,234 – 100,317 –
Cash used in operations (361,507) (4,458,292) (1,368,498) (4,048,427)
Income tax refunded/(paid) 2,093 (6,099) – 2,549
Net cash used in operating activities (359,414) (4,464,391) (1,368,498) (4,045,878)
54 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Statements of Cash Flows (Cont’d)
Group Company Note 2015 2014 2015 2014 RM rM rM rM
INVESTING ACTIVITIES Investment in a joint venture (6,000,000) – (6,000,000) – Addition of intangible assets – (393,247) – – Interest received 141,131 8,581 139,784 8,343 Uplifted of deposits pledged with a licensed bank 7,132 7,819 – – Acquistion of an associate – (36) – (36) Acquisition of subsididaries, net of cash acquired (5,999,387) – (6,000,002) – Disposal of: - property, plant and equipment 24,854 – – – - subsidiaries, net of proceeds 5 (2,838) – 24,000 – Purchase of property, plant and equipment (159,151) (82,955) – – Advances to subsidiaries – – – (103,081)
Net cash used in investing activities (11,988,259) (459,838) (11,836,218) (94,774)
FINANCING ACTIVITIES
Interest expenses (563,983) (291,622) (456,999) (161,585) Net proceeds from warrant exercise – 3,703,440 – 3,703,440 Net proceeds from issuance of shares via private placement – 16,552,285 – 16,552,285 Advances from subsidiaries – – – 60,751 Net increase in bills payable – 187,607 – – Repayment of hire purchase obligations (49,047) (53,635) – – Repayment of term loans (433,998) (414,320) (316,726) (275,207) Advances from /(Repayment to) directors – 790,189 – (279,776)
Net cash (used in)/from financing activities (1,047,028) 20,473,944 (773,725) 19,599,908
55 Statements of Cash Flows (Cont’d)
Group Company Note 2015 2014 2015 2014 RM rM rM rM
CASH AND CASH EQUIVALENTS
Net changes (13,394,701) 15,549,715 (13,978,441) 15,459,256 Exchange differences (168,338) (155,643) – – At beginning of the financial year 15,430,838 36,766 15,463,286 4,030
At end of the financial year A 1,867,799 15,430,838 1,484,845 15,463,286
NOTE TO THE STATEMENTS OF CASH FLOWS
A. CASH AND CASH EQUIVALENTS
Cash and cash equivalent included in the statements of cash flows comprise the following:-
Group Company 2015 2014 2015 2014 RM rM rM rM
Bank overdrafts – (109,217) – – Short term deposits with licensed banks – 7,132 – – Cash and bank balance 1,867,799 15,540,055 1,484,845 15,463,286
1,867,799 15,437,970 1,484,845 15,463,286 Less: Short term deposits pledged to licensed banks – (7,132) – –
1,867,799 15,430,838 1,484,845 15,463,286
The accompanying notes form an integral part of the financial statements.
56 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements 31 March 2015
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 Plaza 138, Suite 18.03, 18th Floor, 138 Jalan Ampang, 50450 Kuala Lumpur. The principal place of business of the Company is located at Oval Tower @ Damansara, Unit 28-8, 28th Floor, No. 685, Jalan Damansara, Taman Tun Dr. Ismail, 60000 Kuala Lumpur.
The Company is principally engaged in the businesses of investment holding, software development, information communication technology and related services.
The principal activities of the subsidiaries are set out in Note 5 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors passed on 29 July 2015.
2. BASIS OF PREPARATION
2.1 statement of Compliance
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act, 1965 in Malaysia.
2.2 Basis of Measurement
The financial statements of the Group and the Company are prepared under the historical cost convention, unless otherwise indicated in the summary of significant accounting policies.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to by the Group and the Company.
57 Notes to the Financial Statements (Cont’d)
2. BASIS OF PREPARATION (CONT’D)
2.2 Basis of Measurement (Cont’d)
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.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to their fair value measurement as a whole:
Level 1 - Quoted (adjusted) market prices in active markets for identical assets 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.
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, unless otherwise stated.
2.4 Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, and IC Interpretations (“IC Int”)
Except for the changes below, the Group and the Company have consistently applied the accounting policies set out in Note 3 to all periods presented in these financial statements.
In the current financial year, the Group and the Company have applied a number of new and revised MFRS and amendments to MFRSs that are mandatorily effective for an accounting period that begins on or after 1 January 2014.
Initial application of the amendments to the standards and IC Int did not have material impact to the Financial Statements.
58 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
2. BASIS OF PREPARATION (CONT’D)
2.4 Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, and IC Interpretations (“IC Int”) (Cont’d)
Investment entities (Amendments to MFRS 10, MFRS 12 and MFRS 127
These amendment provide an exception to the consolidation requirement for entities that meet the definition of an investment entity under MFRS 10 Consolidated Financial Statements and must be applied retrospectively, subject to certain transition relief. The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss.
These amendments have no impact on the Group and the Company, since none of the entities in the Group and the Company qualifies to be an investment entity under MFRS 12.
Amendments to MFRS 132 offsetting Financial Assets and Financial Liabilities
The Group and the Company have applied the amendments to MFRS 132 Offsetting Financial Assets and Financial Liabilities for the first time in the current year. The amendments to IAS 32 clarify the requirements relating to the offset of financial assets and financial liabilities. Specifically, the amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’ and ‘simultaneous realisation and settlement’.
The amendments have been applied retrospectively. As the Group and the Company do not have any financial assets and financial liabilities that qualify for offset, the application of the amendments has had no impact on the disclosures or on the amounts recognised in the Group’s and the Company’s financial statements. The Group and the Company have assessed whether certain of its financial assets and financial liabilities qualify for offset based on the criteria set out in the amendments and concluded that the application of the amendments has had no impact on the amounts recognised in the Group’s and the Company’s financial statements.
Amendments to MFRS 136 Recoverable Amount Disclosures for Non-Financial Assets
The Group and the Company have applied the amendments to MFRS 136 Recoverable Amount Disclosures for Non-Financial Assets for the first time in the current year. The amendments to MFRS 136 remove the requirement to disclose the recoverable amount of a cash-generating unit (CGU) to which goodwill or other intangible assets with indefinite useful lives had been allocated when there has been no impairment or reversal of impairment of the related CGU. Furthermore, the amendments introduce additional disclosure requirements applicable to when the recoverable amount of an asset or a CGU is measured at fair value less costs of disposal. These new disclosures include the fair value hierarchy, key assumptions and valuation techniques used which are in line with the disclosure required by MFRS 13 Fair Value Measurements.
The application of these amendments has had no material impact on the disclosures in the Group’s and the Company’s financial statements.
59 Notes to the Financial Statements (Cont’d)
2. BASIS OF PREPARATION (CONT’D)
2.4 Adoption of New and Revised MFRSs, Amendments/Improvements to MFRSs, and IC Interpretations (“IC Int”) (Cont’d)
Amendments to MFRS 139 Novation of Derivatives and Continuation of Hedge Accounting
The Group and the Company have applied the amendments to MFRS 139 Novation of Derivatives and Continuation of Hedge Accounting for the first time in the current year. The amendments to MFRS 139 provide relief from the requirements to discontinue hedge accounting when a derivate designated as a hedging instrument is novated under certain circumstances. The amendments also clarify that any change to the fair value of the derivative designated as a hedging instrument arising from the novation should be included in the assessment and measurement of hedge effectiveness.
The amendments have been applied retrospectively. As the Group and the Company do not have any derivatives that are subject to novation, the application of these amendments has had no impact on the disclosures or on the amounts recognised in the Group’s and the Company’s financial statements.
The adoption of new/revised standards does not have material impact on the Group’s and the Company’s financial statements.
2.5 standards Issued But Not Yet Effective
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the Malaysian Accounting Standards Board but are not yet effective, and have not been adopted by the Group and the Company.
Management anticipates that all of these relevant pronouncements will be adopted in the Group’s and the Company’s accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s and the Company’s financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group’s and the Company’s financial statements.
MFRS 9 Financial Instruments – effective 1 January 2018
MFRS 9 is issued during the financial year, which reflects all phases of the financial instruments project and replaces MFRS 139 Financial Instruments: Recognition and Measurement and all previous version of MFRS 9. The new standard introduces extensive requirements and guidance for classification and measurement of financial assets and financial liabilities which fall under the scope of MFRS 9, new “expected credit loss model” under the impairment of financial assets and greater flexibility has been allowed in hedge accounting transactions.
The adoption of MFRS 9 will result in a change in accounting policy.
The Group and the Company are currently examining the financial impact of adopting MFRS 9.
60 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
2. BASIS OF PREPARATION (CONT’D)
2.5 standards Issued But Not Yet Effective (Cont’d)
MFRS 15 Revenue from Contracts with Customers – effective 1 January 2017
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 Programmers, IC Int 15 Agreements for Construction of Real Estate, IC Int 18 Transfer 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.
The Group is currently assessing the impact of MFRS 15 and plans to adopt the new standards on the required effective date.
2.6 significant Accounting Estimates and Judgements
Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and the Company’s accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual result may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.
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.
2.6.1 estimation Uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:-
Useful lives of depreciable assets
Property, plant and equipment are depreciated on a straight line basis over their estimated useful lives. 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 of each reporting period. At 31 March 2015, management assesses that the useful lives represent the expected utility of the assets to the Group. The carrying amounts are analysed in Note 4 to the Financial Statements. Actual results, however, may vary due to change in the expected level of usage and technological developments, which may result in the adjustment to the Group’s assets.
61 Notes to the Financial Statements (Cont’d)
2. BASIS OF PREPARATION (CONT’D)
2.6 significant Accounting Estimates and Judgements (Cont’d)
2.6.1 estimation Uncertainty (Cont’d)
Useful lives of depreciable assets (Cont’d)
A 1% difference in the expected useful lives of the property, plant and equipment from the management’ estimates would result in approximately 0.21% variance in the Group’s profit for the financial year.
Impairment of intangible assets
An impairment loss is recognised for the amount by which the asset’s or cash- generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group’s assets within the next financial year.
In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.
Further details of the carrying values, key assumptions applied in the impairment assessment of intangible assets and the assumptions are disclosed in Notes 11 to the financial statements.
An 1% increase of the discount rate applied in the impairment test would result in approximately 4% variance in the Group’s impairment test’s net present value.
Revaluation of properties
The Group’s properties which are reported at valuation are based on valuation performed by independent professional valuers.
The independent professional valuers have exercised judgement in determined discount rates, estimates of future cash flows, capitalisation rate, terminal year value, market rental and other factors used in the valuation process. Also, judgement has been applied in estimating prices for less readily observable external parameters. Other factors such as model assumptions, market dislocations and unexpected correlations can also materially affect these estimates and the resulting valuation estimates.
62 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
2. BASIS OF PREPARATION (CONT’D)
2.6 significant Accounting Estimates and Judgements (Cont’d)
2.6.2 significant Management Judgement
The significant management judgements in applying the accounting policies of the Group that have the most significant effect on the statements are as follows:-
Leases
In applying the classification of leases in MFRS 117, management considers some of its leasehold properties as finance lease arrangements.
The lease transaction is not always conclusive, and management uses judgement in determining whether the lease is a finance lease arrangement that transfers substantially all the risks and rewards incidental to ownership, whether the lease term is for the major part of the economic life of the asset even if title is not transferred and others in accordance with MFRS 117 Leases.
3. siGNIFICANT ACCOUNTING POLICIES
The Group and the Company apply the significant accounting policies, as summarised below, consistently throughout all periods presented in the financial statements.
3.1 Consolidation
3.1.1 Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. Besides, the Group considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.
Investment in subsidiaries is stated at cost less any impairment losses in the Company’s financial position, unless the investment is held for sale or distribution.
Upon the disposal of investment in a subsidiary, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.
63 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.1 Consolidation (Cont’d)
3.1.2 Basic of Consolidation
The Group financial statements consolidate the audited financial statements of the Company and all of its subsidiaries, which have been prepared in accordance with the Group’s accounting policies. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. The financial statements of the Company and its subsidiaries are all drawn up to the same reporting period.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.
Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.
3.1.3 Business Combinations and Goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.
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.
64 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.1 Consolidation (Cont’d)
3.1.3 Business Combinations and Goodwill (Cont’d)
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.
65 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.1 Consolidation (Cont’d)
3.1.5 non-controlling Interest
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group are presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and the owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if that results in a deficit balance.
3.1.6 Associates and Joint Arrangements
Associates are entities in which the Group has significant influence, but no control, over their financial and operating policies.
A joint venture is a type of joint arrangement whereby the parties have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
The Group’s investments in its associates and joint venture are accounted for using the equity method. Under the equity method, investment in an associate or a joint venture is carried in the statement of financial position at cost plus post acquisition changes in the Group’s share of net assets of the associate or joint venture since the acquisition date. Goodwill relating to the associate or joint venture is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.
The share of the result of an associate or a joint venture is reflected in profit or loss. Any change in other comprehensive income of those investees is presented as part of the Group’s other comprehensive income. In addition, where there has been a change recognised directly in the equity of an associate or a joint venture, the Group recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture.
The aggregate of the Group’s share of profit or loss of an associate and a joint venture is shown on the face of the statement of profit or loss and other comprehensive income outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate or joint venture.
66 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.1 Consolidation (Cont’d)
3.1.6 Associates and Joint Arrangements (Cont’d)
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 gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
In the Company’s separate financial statements, investments in associates and a joint venture are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.
67 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
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.
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).
68 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.3 Tax expense (Cont’d)
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 Value-added tax
The Group’s sale of good in PRC is subjected to value-added tax (“VAT”) at the applicable tax rate of 17% for PRC domestic sales. Input VAT on purchases can be deducted from output VAT.
The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of ‘other receivables” or “other payables” in the statement of financial position.
Revenues, expenses and assets are recognised net of the amount of VAT except when the VAT incurred on the purchase of assets or services is not recoverable from the taxation authority, in which case the VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable.
69 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
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.
Freehold land is stated at revalued amount less impairment losses and is not depreciated.
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. Freehold land with an infinite life is not depreciated. Other property, plant and equipment are depreciated based on the estimated useful lives of the assets as follows:-
Freehold buildings 2% Renovation 33.3% Computers 33.3% Office equipment, furniture and fittings 10% to 20% Motor vehicles 20% Machinery 10% Leasehold properties Over the unexpired lease period
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.
70 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5 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 research and development expenditure
Research expenditure is recognised as an expense when it is 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.
71 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.6 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
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group and 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:-
3.7.1 Financial assets
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 at end of each 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.
72 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.7 Financial instruments (Cont’d)
3.7.1 Financial assets (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 expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the considerate 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 reporting date 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 of 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.
73 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.7 Financial instruments (Cont’d)
3.7.1 Financial assets (Cont’d)
Interest calculated using the effective interest method and dividends are recognised in profit or loss. Dividends on an available-for-sale equity are recognised in profit or loss when the Group and the Company’s right to receive payment is established.
Investment in equity instruments 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.
3.7.2 Financial liabilities
After the initial recognition, financial liability is classified as:-
(a) financial liability at fair value through profit or loss; (b) other financial 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 financial liabilities measured at amortised cost
The Group’s and the Company’s other financial liabilities include trade payables, other payables, finance lease liabilities, amount due to directors, amount due to subsidiaries and borrowings.
Other financial 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.
74 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.7 Financial instruments (Cont’d)
3.7.2 Financial liabilities (Cont’d)
Financial guarantee contracts
Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specific debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation.
3.8 impairment of assets
3.8.1 non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the profit or loss in those expense categories consistent with the function of the impaired asset.
75 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8 impairment of assets (Cont’d)
3.8.1 non-financial assets (Cont’d)
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.
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 reorganisation and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
76 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8 impairment of assets (Cont’d)
3.8.2 Financial assets (Cont’d)
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant.
If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continue to be, recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in the profit or loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to finance costs in the profit or loss.
Available-for-sale financial assets
For available-for-sale financial assets, the Group assesses at each reporting period whether there is objective evidence that an investment or a group of investment is impaired.
77 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8 impairment of assets (Cont’d)
3.8.2 Financial assets (Cont’d)
Available-for-sale financial assets (Cont’d)
In the case of 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.
78 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.10 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, bank balances, short-term demand deposits, bank overdraft and highly liquid investments which are readily convertible to known amount of cash and which are subject to insignificant risk of changes in value.
Bank overdrafts are shown in current liabilities in the statements of financial position.
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.
79 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.13 non-current assets held for sale
Non-current assets are classified as held for sale if the carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary.
Immediately before classification as held for sale, the measurement of the non-current assets is brought up-to-date in accordance with applicable MFRSs. Then, on initial classification as held for sale, non-current assets are measured at the lower of carrying amount and fair value less costs to sell and are not depreciated. Any differences are recognised in the profit or loss.
3.14 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 and value added tax, 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.
3.15 employee benefits
3.15.1 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.
80 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.15 employee benefits (Cont’d)
3.15.2 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”).
Some of the Group’s foreign subsidiaries also make contributions to their respective countries’ statutory pension scheme.
3.16 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 are shown in Note 36 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.
3.17 equity and reserves
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Share capital represents the nominal value of shares that have been issued.
Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Accumulated losses include all current and prior period retained losses.
All transactions with owners of the Company are recorded separately within equity.
81 Notes to the Financial Statements (Cont’d)
3. siGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.18 related parties
A related party is a person or entity that is related to the Group. A related party transaction is a transfer of resources, services or obligations between the Group and its related party, regardless of whether a price is charged.
(a) a person or a close member of that person’s family is related to the Group if that person:
(i) has control or joint control over the Group; (ii) has significant influence over the Group; or (iii) is a member of the key management personnel of the ultimate holding company of the Group, or the Group.
(b) an entity is related to the Group if any of the following conditions applies:
(i) the entity and the Group are members of the same group. (ii) one entity is an associate or joint venture of the other entity. (iii) both entities are joint ventures of the same third party. (iv) on entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) the entity is a post-employment benefit plan for the benefits of employees of either the Group or an entity related to the Group. (vi) the entity is controlled or jointly-controlled by a person identified in (a) above. (vii) a person identified in (a)(i) above has significant influence over the Group or is a member of the key management personnel of the ultimate holding company or the Group.
3.19 Contingencies
Where it is not probable that an inflow or an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the asset or the obligation is not recognised in the statements of financial position and is disclosed as a contingent asset or contingent liability, unless the probability of inflow or outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent assets or contingent liabilities unless the probability of inflow or outflow of economic benefits is remote.
3.20 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.
82 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d) Total 82,955 86,004 (89,567) 946,074 (787,681) (1,445,345) (9,503,442) 23,214,746 12,669,507 23,041,887
4,024 2,314 159,151 (2,894) 12,821 179,471 23,074 fittings 980,131 (106,591) 1,148,394 1,175,599 furniture and
– (44,050) – (84,166) – 9,200 (5,853) 12,262 52,161 (43,600) 785,000 5,593,241 6,380,949 5,571,779 Machinery
– – – Motor 10,715 (58,092) (27,337) 971,761 120,000 807,459 909,780 At Cost (198,873) vehicles
– – 7,487 3,098 (6,210) 29,010 18,465 51,266 (611,010) (258,751) 1,954,558 1,095,382 1,913,293 Computers
equipment, – 2,835 1,290 97,189 18,000 (76,167) 430,016 435,915 466,488
– (39,307) – – – (34,413) – – 117,700 (761,363) 3,613,334 2,969,671 3,501,574 properties r enovations Leasehold
– – – – – – – – 68 111,760 Freehold buildings 3,903,442 3,903,374 At Valuation (3,903,442)
o ffice – – – – – – – – – M M R M r R M R r M r M R r M R land Freehold 5,600,000 5,600,000 (5,600,000) TY, PLA N T A ND E QU I PM EN TY, Valuation/Cost held-for-sale
off differences Written Translation 2014 At 31 March Additions Acquisition of a subsidiary Disposals Disposals of subsidiaries Transferred to assets Transferred differences Translation 2015 At 31 March P RO ER Group At At 1 April 2013 Additions 4.
83 Notes to the Financial Statements (Cont’d) Total 62,329 (89,567) (28,801) 869,209 857,209 (775,497) (709,897) (502,608) 7,549,845 8,391,816 7,232,222 5,437,285 14,822,930
(3,614) 41,584 11,599 15,034 46,539 37,109 fittings 933,592 (104,947) 1,102,152 1,111,285 furniture and
– (44,050) – (84,166) – (4,622) 12,008 (41,833) 556,691 582,266 3,182,683 3,751,382 4,287,193 2,093,756 1,841,859 Machinery
– – 6,921 Motor 74,578 78,475 (48,411) (30,103) 677,027 758,526 620,552 186,907 213,235 At Cost (137,935) vehicles
– 2,885 (6,210) 42,601 27,832 23,002 16,734 40,982 (608,507) (252,308) 1,849,353 1,913,576 1,078,648 Computers
equipment,
3,085 2,835 2,167 29,454 (76,167) 305,796 272,409 193,450 242,465 157,607
– (39,307) – (34,413) – 1,078 4,486 70,375 69,127 70,428 (96,707) 140,580 118,787 2,850,884 3,472,754 properties r enovations Leasehold
– – – – – – 56 81,543 58,550 362,459 444,058 (502,608) Freehold buildings 3,459,384 At Valuation o ffice
– – – – – – – – – – – – M M R M r R M R r M r M R r M R land Freehold 5,600,000
depreciation TY, PLA N T A ND E QU I PM EN (C ON T’ D ) TY, held-for-sale
P RO ER Group (Cont’d) Group Accumulated At 1 April 2013 off for the financial year Charge Written differences Translation 2014 At 31 March Charge for the financial year Charge Disposal Disposal of subsidiaries Transferred to assets Transferred differences Translation 2015 At 31 March At 31 March 2015 At 31 March N et carrying amount 2014 At 31 March 4.
84 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d) 716 Total 86,944 60,247 (502,608) 1,747,157 2,101,858 2,188,802 1,746,441 9,061,797 (9,503,442) 11,250,599
– – 698 8,169 1,167 1,865 fittings 661,287 651,253 659,422 660,589 661,287 furniture and
– – – – – – Motor 335,350 335,350 335,350 335,350 335,350
– – 18 At Cost 707 529 547 629,459 629,477 628,223 628,930 629,477 Computers vehicles
equipment, - – – – – – 121,043 121,043 121,043 121,043 121,043
– – – 78,068 58,551 365,989 444,057 (502,608) Freehold buildings r enovations 3,903,442 3,459,385 (3,903,442)
o ffice – – – – – – – – At Valuation R M r M r M r M M r r M r M land Freehold 5,600,000 5,600,000 (5,600,000) TY, PLA N T A ND E QU I PM EN (C ON T’ D ) TY,
2015 At 31 March At Valuation/Cost 2014 At 1 April 2013/31 March to assets held-for-sale Transferred 2015 At 31 March Accumulated depreciation At 1 April 2013 for the financial year Charge 2014 At 31 March for the financial year Charge to assets held-for-sale Transferred N ett carrying amount 2015 At 31 March 2014 At 31 March Company P RO ER 4.
85 Notes to the Financial Statements (Cont’d)
4. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
At the end of the reporting period, the plant and equipment acquired under finance lease arrangement are as follows:-
Group 2015 2014 RM RM
At net carrying value: Motor vehicle 70,908 129,294 Office equipment 17,994 23,970
88,902 153,264
The property was revalued based on a valuation carried out by an independent firm of professional valuers using the comparison method during the financial year ended 31 March 2013.
The surpluses arising from the above revaluation net of deferred tax liabilities have been credited to the other comprehensive income and accumulated in equity under the revaluation reserve.
Included in the property, plant and equipment of the Group are motor vehicles and plant and machinery with net carrying amount of RM116,000 and RM758,833 respectively held in trust by a third party.
Had the revalued properties been carried at cost less accumulated depreciation, the net book values of the properties that would have been included in the financial statements are as follows:-
Group Company 2015 2014 2015 2014 RM rM rM rM
At net carrying value:
Freehold land – 2,137,230 – 2,137,230 Freehold buildings – 2,839,023 – 2,683,371 Leasehold properties 2,254,841 2,550,348 – –
2,254,841 7,526,601 – 4,820,601
As at the end of the reporting period, the leasehold properties of the Group with carrying value of RM2,850,884 (2014: RM3,472,754) have been pledged to licensed banks as security for banking facilities granted to the Group.
The fair value of the freehold land, freehold building and 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.
86 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
5. inVESTMENTS IN SUBSIDIARIES
Company 2015 2014 RM rM
Unquoted shares, at cost - in Malaysia 6,600,002 2,190,004 - outside Malaysia 1,453,134 1,453,134
8,053,136 3,643,138 Accumulated impairment losses (150,000) (1,740,004)
7,903,136 1,903,134
Quasi loan
At 1 April 210,000 210,000 Impairment loss for the financial year (210,000) (210,000)
At 31 March – –
7,903,136 1,903,134
The details of the subsidiaries are as follows:-
Name of Companies Country of effective incorporation equity Interest Principal Activities 2015 2014 % %
Direct Subsidiaries
Asdion Digital Advance Malaysia 90 90 Investment holding System Sdn. Bhd. (“ADAS”)
Asdion International Malaysia – 80 Investment holding Sdn. Bhd. (“AI”)
Asdion Media Sdn. Bhd. Malaysia – 100 Investment holding (“AMS”)
Asdion Project Synergy Malaysia 100 100 Dormant Sdn. Bhd.
87 Notes to the Financial Statements (Cont’d)
5. inVESTMENTS IN SUBSIDIARIES (CONT’D)
Name of Companies Country of effective incorporation equity Interest Principal Activities 2015 2014 % %
Direct Subsidiaries
108 Talent Sdn. Bhd. Malaysia 100 100 Dormant
Techtron Integrated Republic of 100 100 Software development, Systems (S) Pte Ltd (“TIS”)* Singapore information communication technology and related services
TAZ Logistics Sdn. Bhd. Malaysia 51 – Dry bulk cargo (“TAZ”) stevedoring related services
Venice Sanctuary Malaysia 100 – Dormant Sdn. Bhd.
Subsidiaries of TIS
Asdion Data Services Malaysia 100 100 Advisers on solutions Sdn. Bhd. relating to information technology.
Asdion (B) Sdn. Bhd. *^ Brunei – 60 Dormant. Darussalam
Asdion Digital Instruments The Republic of – 60 Dormant. Pte Ltd (“ADI”)*# Singapore
Asdion Hospitality Solutions Malaysia 100 100 Advisers on solutions Sdn. Bhd. relating to information technology.
Asdion Software Pte Ltd The Republic of 97 97 Investment holding. (“ASPL”)* Singapore
88 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
5. inVESTMENTS IN SUBSIDIARIES (CONT’D)
Name of Companies Country of effective incorporation equity Interest Principal Activities 2015 2014 % %
Subsidiaries of ASPL
Asdion Software The People’s 97 97 Dormant. (Shanghai) Co Ltd* Republic of China
Asdion Exim (Shanghai) The People’s 97 97 General traders Co Ltd* Republic of China including imports and exports.
Subsidiaries of AMS
Quipmart Sdn. Bhd. Malaysia – 100 Business of traders (“QSB”) in audio video equipment and accessories
108 Media Holdings Malaysia – 50 Advertising production Sdn. Bhd. (“108 MH”) house.
Subsidiary of QSB
Hotscreen Sdn. Bhd. Malaysia – 100 Advertising production house.
* Subsidiaries not audited by SJ Grant Thornton
# In previous financial year, TIS, the holding company of ADI, applied to strike off ADI from the Accounting and Corporate Regulatory Authority of Singapore. The strike-off was completed during the financial year and it does not have a material financial impact on the Group.
^ During the financial year, Asdion (B) Sdn. Bhd., incorporated in Brunei Darussalam a direct subsidiary of TIS, had been voluntary winding-up on 9 June 2014. The voluntary winding-up has been completed on 9 September 2014 and the Company has been dissolved.
(a) Quasi loan represents advances and payments made on behalf of which the settlement is neither planned nor likely to occur in the foreseeable future. This amount is, in substance, a part of the Company’s net investment in the subsidiaries. The quasi loan is stated at cost less accumulated impairment losses, if any.
89 Notes to the Financial Statements (Cont’d)
5. inVESTMENTS IN SUBSIDIARIES (CONT’D)
Disposal of subsidiaries
On 30 March 2015, the Company disposed 100% of its equity interest in Asdion Media Sdn. Bhd. for cash consideration of RM14,000.
The disposal of Asdion Media Sdn. Bhd. gave rise to a gain of RM494,014 in the Group’s financial statements.
On 24 March 2015, the Company disposed of its entire shareholding in Asdion International Sdn. Bhd. (“AI”) representing 80% equity interest in AI for cash consideration of RM10,000.
The disposal of Asdion International Sdn. Bhd. gave rise to a loss of RM6,176 in the Group’s financial statements.
The value of assets and liabilities of Asdion Media Sdn. Bhd. and Asdion International Sdn. Bhd. recorded in the consolidated financial statements as at 31 March 2015 and the cash flow effects of the disposal was as follows:-
RM
Property, plant and equipment 735,448 Other receivables 5,600 Tax recoverables 15,842 Cash and bank balances 26,838 Trade and other payables (652,976) Amount due to a director (288,563) Finance lease liabilities (7,643) Borrowings (457,468) Non-controlling interest 159,084
Fair value of net liabilities disposed (463,838) Gain on disposal 487,838 Consideration received, satisfied in cash 24,000 Less: Cash and cash equivalents balances disposed (26,838)
Net cash outflows from disposal (2,838)
Acquisition of subsidiaries
On 26 August 2014, the Company incorporated a wholly-owned subsidiary of Venice Sanctuary Sdn. Bhd. with cash subscription of RM2.
On 6 February 2015, the Company acquired 51% equity interest in TAZ Logistics Sdn. Bhd. for a total consideration of RM6,000,000.
90 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
5. inVESTMENTS IN SUBSIDIARIES (CONT’D)
The fair value of the assets and liabilities acquired and the goodwill arising are as follows:-
Group At date of acquisition 2015 RM
Property, plant and equipment 946,074 Trade and other receivables 200,420 Cash and bank balances 613 Other payables (63,482)
Net asset acquired 1,083,625 Non-controlling interest (530,976)
Subtotal 552,649 Goodwill on consolidation 5,447,351
Total consideration paid 6,000,000 Cash and cash equivalent (613)
Net cash outflow arising on acquisition 5,999,387
The acquisition of new subsidiaries reduced the Group’s loss after tax for the financial year between the date of acquisition and the reporting date by RM321,430.
Non-controlling interest in subsidiaries
The Group’s subsidiaries that have material non-controlling interest (“NCI”) are as follows:-
2015 TAZ ADAs others Total RM rM rM rM
Effective interest equity (%) 49% 10% Carrying amount of NCI 839,801 219,104 (79,885) 979,020 Profit/(Loss) allocated to NCI 308,825 (662) (97,224) 210,939
91 Notes to the Financial Statements (Cont’d)
5. inVESTMENTS IN SUBSIDIARIES (CONT’D)
Non-controlling interest in subsidiaries (Cont’d)
The Group’s subsidiaries that have material non-controlling interest (“NCI”) are as follows (Cont’d):-
2014 AI ADAs others Total RM rM rM rM
Effective interest equity (%) 20% 10% Carrying amount of NCI (106,186) 212,454 (30,038) 76,230 Loss allocated to NCI – (92,058) (72,535) (164,593)
TAZ ADAS Total RM rM rM
2015
At 31 March Non-current assets 914,538 104,644 1,019,182 Current assets 1,349,273 2,096,012 3,445,285 Non-current liabilities (481,931) (9,606) (491,537) Current liabilities (68,000) – (68,000)
Net assets 1,713,880 2,191,050 3,904,930
Financial year ended 31 March Revenue 1,905,171 – 1,905,171
Profit/(Loss) for the financial year 713,880 (6,617) 707,263 Other comprehensive income – 73,119 73,119
Total comprehensive income 713,880 66,502 780,382
Net cash flows from operating activities 148,349 38,035 186,384 Net cash flows (for)/from investing activities (946,074) (31,123) (977,197) Net cash flows from/(for) financing activities 900,000 – 900,000
92 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
5. inVESTMENTS IN SUBSIDIARIES (CONT’D)
Non-controlling interest in subsidiaries (cont’d)
The Group’s subsidiaries that have material non-controlling interest (“NCI”) are as follows (cont’d):
AI ADAS Total RM rM rM
2014
At 31 March Non-current assets 32,866 31,525 64,391 Current assets 107,934 2,105,077 2,213,011 Current liabilities (671,766) (12,054) (683,820)
Net (liabilities)/assets (530,966) 2,124,548 1,593,582
Financial year ended 31 March Loss for the financial year/ Total comprehensive expenses for the financial year (517,724) (920,575) (1,438,299)
Net cash flows (for)/from operating activities (4,547) 6,108 1,561 Net cash flows (for)/from investing activities (14,187) 19,834 5,647 Net cash flows from/(for) financing activities 17,421 (26,156) (8,735)
6. inVESTMENT IN ASSOCIATES
Group Company 2015 2014 2015 2014 RM rM rM rM
Unquoted shares in Malaysia, at cost 500,036 500,036 36 36 Share of post-acquisition losses (364,518) (364,518) – –
135,518 135,518 36 36 Less: Impairment loss (135,518) (135,518) – –
– – 36 36
93 Notes to the Financial Statements (Cont’d)
6. inVESTMENT IN ASSOCIATES (CONT’D)
The details of the associates are as follows:-
Name of Companies Country of effective incorporation equity Interest Principal Activities 2015 2014 % %
Sun Rock Development Sdn Bhd (“SRD”) Malaysia 36 36 Property development
SH2 Plantations Sdn Bhd (“SH2”) Malaysia – 25.50 Agricultural activities
On 19 August 2013, the Company acquired 4 ordinary shares of RM1 each representing 100% of the total issued and paid-up share capital of SRD for a total cash consideration of RM4. On 30 August 2013, the Company subscribed for the additional 96 new ordinary shares of RM1 each issued by SRD.
On 30 August 2013, the Company entered into a Share Sale Agreement with Protasco Development Sdn. Bhd. (“PDSB”) to dispose of 64 ordinary shares of RM 1 each in SRD to PDSB for a total cash consideration of RM64. Following the completion of the partial disposal of SRD, the Company diluted its equity interest to 36% in SRD.
The summarised unaudited financial information of SRD and SH2 to the Group is as follows:-
SRD 2015 2014 RM rM
At 31 March
Non-current assets 29,654,424 28,691,624 Current assets 211,417 48,744 Current liabilities (30,468,454) (29,138,593)
Net liabilities (602,613) (398,225)
For the financial year ended 31 March
Loss for the financial year/Total comprehensive expenses for the financial year (1,204,278) (351,584)
Group’s share of loss for the financial year/ other comprehensive expenses for the financial year – (36)
94 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
6. inVESTMENT IN ASSOCIATES (CONT’D)
The details of the associates are as follows (Cont’d):-
SH2 2014 RM
At 31 March Non-current assets 267,712 Current assets 20,755 Current liabilities (930,782)
Net liabilities (642,315)
For the financial year ended 31 March Loss for the financial year/Total comprehensive expenses for the financial year (616,274)
Group’s share of loss for the financial year/ other comprehensive expenses for the financial year (157,150)
The Group has not recognised losses related to SRD and SH2, totaling RM548,606 in 2015 (2014:RM126,534) and cumulatively RM675,140 in 2015 (2014:RM126,534), since the Group has no obligation in respect of these losses.
On 30 March 2015, the investment in SH2 was disposed through the disposal of its equity interest in Asdion International Sdn. Bhd..
7. inTANGIBLE ASSETS
Group 2015 2014 RM rM
Programmes and film rights 393,247 393,247 Less: Impairment (393,247) –
– 393,247
Intangible assets comprise programmes and film rights produced by a subsidiary pending for commercial sales.
The impairment loss is recognised as a result of the carrying amount exceeded its recoverable amount.
95 Notes to the Financial Statements (Cont’d)
8. deVELOPMENT COSTS
Group/Company 2015 2014 RM rM
At cost:
At 1 April 3,542,746 3,542,746 Accumulated amortisation (2,275,965) (2,265,201) Accumulated impairment losses (1,258,708) (1,258,708)
At 31 March 8,073 18,837
Accumulated amortisation At 1 April (2,265,201) (2,254,437) Amortisation for the financial year (10,764) (10,764)
At 31 March (2,275,965) (2,265,201)
9. oTHER INVESTMENT
Group 2015 2014 RM rM
Quoted shares outside Malaysia, at fair value At 1 April 31,525 46,929 Fair value adjustment 73,119 – Impairment loss during the financial year – (15,404)
At 31 March 104,644 31,525
Investments in quoted shares of the Group are designated as available-for-sale financial assets and are measured at fair value.
96 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
10. inTEREST IN A JOINT VENTURE
Group/ Company 2015 RM
At cost: Investment in a joint venture project 6,000,000
The Company has entered a 80:20 joint venture project with a Malaysia incorporated entity, Top Valley Properties Sdn. Bhd.. The joint venture project involves a 3-year mix property development project. The principal place of business is located at PM8688, Lot 104160 (formerly known as H.S (M) 15921 PT32378), Mukim Dengkil, Kg. Limau Manis, Daerah Sepang, Negeri Selangor. There is no joint venture account available as at the reporting date as the joint venture agreement was just entered at the year end.
11. GOODWILL
Group 2015 2014 RM rM
At 1 April 33,000 33,000 Addition (Note 5) 5,447,351 –
At 31 March 5,480,351 33,000
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 51% for gross profit margin, 3% for growth rate and 11.54% 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.
97 Notes to the Financial Statements (Cont’d)
12. INVENTORIES
Group 2015 2014 RM RM
At cost:-
Raw materials 231,737 68,124 Finished goods 8,782 84,016
240,519 152,140
Recognised in profit or loss Inventories recognised as cost of sales 564,645 1,469,821 Inventories written off – 61,484
None of the inventories is carried at net realisable value.
13. TRADE RECEIVABLES
Group 2015 2014 RM RM
Trade receivables 1,450,884 439,228 Impairment losses (4,700) (19,909)
At 31 March 1,446,184 419,319
Impairment losses At 1 April (19,909) (130,335) Addition during the financial year (10,747) (18,519) Written off during the financial year 21,192 131,370 Translation differences 4,764 (2,425)
At 31 March (4,700) (19,909)
The Group’s normal trade credit terms range from 30 to 60 (2014: 30 to 60) days.
The impairment loss on trade receivable was due to the financial difficulty faced by the debtors.
98 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
14. oTHER RECEIVABLES
Group Company 2015 2014 2015 2014 RM rM rM rM
Other receivables 5,197,135 3,195,254 4,973,909 3,093,848 Deposits 218,976 40,995 32,716 21,680 Prepayments 262,151 217,047 44,574 71,047
5,678,262 3,453,296 5,051,199 3,186,575
Included in other receivables of the Group and the Company is an amount owing by an associate amounting to RM4,868,444 (2014: RM3,130,459) and RM4,868,444 (2014: 3,093,783) respectively. The amount due from associate is non-trade in nature, unsecured, interest-free and repayable on demand.
15. AMOUNT DUE FROM SUBSIDIARIES
Company 2015 2014 RM RM
Amount owing by:-
Non-trade balances 1,323,366 1,095,843 Impairment losses (1,095,843) (1,095,843)
At 31 March 227,523 –
Impairment losses At 1 April (1,095,843) (955,133) Addition – (182,137) Writeback during the financial year – 41,427
At 31 March (1,095,843) (1,095,843)
The amount due from subsidiaries are non-trade in nature, unsecured, interest-free and repayable on demand.
16. shorT-TERM DEPOSITS WITH LICENSED BANKS
The short-term deposits are placed with licensed banks. The interest earned from rate at 3.05% (2014: 3.05%) per annum with maturity periods ranging from 30 to 90 (2014: 30 to 365) days.
The short-term deposits with licensed banks were pledged to a licensed bank as security for banking facilities granted to the Group.
99 Notes to the Financial Statements (Cont’d)
17. ASSETS CLASSIFIED AS HELD-FOR-SALE
Group/Company 2015 RM
Assets classified as held-for-sale Property, plant and equipment 9,000,834 Liabilities classified as held-for-sale Deferred tax liabilities (194,003)
At 31 March 8,806,831
On 1 December 2014, an agreement is made with the contracted party to dispose the freehold land and building. The non-current assets held for sale with a carrying amount of RM9,000,834 were disposed at RM9,200,000, at a price higher than its net carrying amount. The disposed was completed on 19 May 2015.
The assets are pledged as securities for bank borrowings.
18. shARE CAPITAL
Company 2015 2014 2015 2014 N number of ordinary shares of RM0.10 each RM RM
Authorised:
At 1 April 500,000,000 100,000,000 50,000,000 10,000,000 Created during the financial year – 400,000,000 – 40,000,000
At 31 March 500,000,000 500,000,000 50,000,000 50,000,000
Issued and fully paid-up:- At 1 April 112,734,600 66,420,000 11,273,460 6,642,000 Issued during the financial year – 46,314,600 – 4,631,460
At 31 March 112,734,600 112,734,600 11,273,460 11,273,460
100 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
18. shARE CAPITAL (CONT’D)
In previous financial year,
(a) the authorised capital of the Company was increased from RM10,000,000 to RM50,000,000 by the creation of an additional 400,000,000 new ordinary shares of RM0.10 each; and
(b) the Company increased its issued and paid-up share capital from RM6,642,000 to RM11,273,460 by:-
(i) issuance of 9,496,000 new ordinary shares of RM0.10 each at an issue price of RM0.39 per share at par pursuant to warrants 2008/2013;
(ii) issuance of 7,591,600 new ordinary shares of RM0.10 each at an issue price of RM0.40 per share by way of private placement; and
(iii) private placement of 29,227,000 new ordinary shares of RM0.10 each at an issue price of RM0.476 per share by way of private placement.
The new shares were issued for cash consideration. The new shares issued rank pari passu in all respects with the existing shares of the Company.
19. RESERVES
Group Company 2015 2014 2015 2014 rM rM rM rM
Share premium (a) 18,258,464 18,258,464 18,258,464 18,258,464 Warrant reserve (b) 4,567,977 4,567,977 4,567,977 4,567,977 Foreign exchange translation reserve (c) 71,254 126,723 – – Capital reserve (d) 15,429 15,429 – – Fair value adjustment reserve (e) 65,807 – – – Revaluation reserve (f) 4,460,295 4,700,273 4,044,780 4,044,780 Accumulated losses (15,179,597) (12,609,566) (15,239,243) (13,389,769)
12,259,629 15,059,300 11,631,978 13,481,452
101 Notes to the Financial Statements (Cont’d)
19. 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 60(3) of the Companies Act 1965.
(b) Warrant reserve
The movements in the warrant reserve of the Group and of the Company are as follows:-
2015 2014 RM rM
Capitalisation of subscription from private placement 4,567,977 4,567,977
The warrant reserve arose from the allocation of proceeds received for private placement by reference to the fair value of the warrants, amounting to RM0.1065 per warrant and net of share issuance costs incurred in relation to the private placement exercise.
(c) Foreign exchange translation reserve
Group 2015 2014 RM rM
At 1 April 126,723 186,690 Foreign exchange translation during the financial year (55,469) (59,967)
At 31 March 71,254 126,723
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.
102 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
20. deFFERED TAX LIABILITIES
Group Company 2015 2014 2015 2014 RM rM rM rM
Deferred tax liabilities At 1 April (265,035) (431,238) (194,003) (194,003) Recognition in profit or loss (Note 29) (68,000) 111,092 – – Reclassified as held-for-sale 194,003 – 194,003 – Translation differences (2,932) 55,111 – –
(141,964) (265,035) – (194,003)
The components of the deferred tax asset and (liabilities) are as follows:-
Group Company 2015 2014 2015 2014 RM rM RM rM
Accelerated capital allowances on qualifying cost of property, plant and equipment (68,000) (456,665) – – Revaluation surplus (73,964) (295,370) – (194,003) Unabsorbed capital allowances and unutilized tax loses – 487,000 – –
(141,964) (265,035) – (194,003)
At the end of the reporting period, no deferred tax assets are recognised by the Group and the Company in respect of the following items as it is not probable that future taxable profits of the Group and the Company will be available for utilisation against the deductible temporary differences.
Group Company 2015 2014 2015 2014 RM rM RM rM
Unabsorbed capital allowance and unutilised tax losses 11,219,326 10,771,000 9,018,341 8,643,700 Accelerated depreciation over capital allowances on qualifying cost of assets (213,000) (296,000) (155,000) (205,000)
11,006,326 10,475,000 8,863,341 8,438,700
103 Notes to the Financial Statements (Cont’d)
21. FINANCE LEASE LIABILITIES
Group 2015 2014 RM RM
Minimum finance lease liabilities payments: - not later than one year 49,518 64,497 - later than one year and not later than two years 45,107 53,231 - later than one year and not later than five years – 41,009
94,625 158,737 Less: Future finance charges (3,982) (11,404)
Present value of finance lease liabilities 90,643 147,333
The finance lease liabilities are repayable as follows:-
Group 2015 2014 RM RM
Current: - not later than one year 46,708 57,262
Non-current: - later than one year and not later than two years 43,935 52,443 - later than one year and not later than five years – 37,628
43,935 90,071
90,643 147,333
The finance lease liabilities bear interest rates ranging from 2.76%-8% (2014 : 2.76%-8%)
104 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
22. BORROWINGS
Group Company 2015 2014 2015 2014 RM rM RM rM
Current
Secured Term loan (1) 989,951 159,878 989,951 159,878 Term loan (2) 269,246 73,349 269,246 73,349 Term loan (3) 11,031 103,324 – – Term loan (4) 5,308 4,557 – – Term loan (5) 77,371 93,647 – – Term loan (6) – 8,343 – – Term loan (7) – 6,564 – – Bank overdraft – 109,217 – – Bills payable 194,046 322,431 – –
1,546,953 881,310 1,259,197 233,227
Non-current
Secured Term loan (1) – 1,056,075 – 1,056,075 Term loan (2) – 286,621 – 286,621 Term loan (3) 127,217 136,490 – – Term loan (4) 840 9,802 – – Term loan (5) 1,445,544 1,458,893 – – Term loan (6) – 111,794 – – Term loan (7) – 180,252 – –
1,573,601 3,239,927 – 1,342,696
The term loan of the Group and of the Company are secured by:-
(a) Term loan 1 and 2
(i) legal charges over the Group and the Company’s freehold and leasehold land and building (ii) corporate guarantees issued by certain present and former subsidiaries of the Company
(b) Term loan 3 and 4
(i) personal guarantee from the director of the Company (ii) legal charges over the leasehold property of the Group
105 Notes to the Financial Statements (Cont’d)
22. BORROWINGS (CONT’D)
The term loan of the Group and of the Company are secured by (Cont’d):-
(c) Term loan 5
(i) A personal guarantee from the director of the Company (ii) legal charges over the leasehold property of the Group
(d) Term loan 6, 7 and bank overdraft
(i) a joint and several guarantee of certain present and former directors of a subsidiary (ii) a corporate guarantee from a subsidiary
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 9.35% (2014: 2.03% to 9.1%) per annum respectively.
23. TRADE PAYABLES
The normal trade credit terms granted to the Group ranges from 30 to 90 (2014: 30 to 90) days.
24. oTHER PAYABLES
Group Company 2015 2014 2015 2014 RM rM RM rM
Other payables 3,228,969 668,105 2,311,772 212,341 Accruals 421,190 577,021 93,432 174,316
3,650,159 1,245,126 2,405,204 386,657
25. AMOUNT DUE TO DIRECTORS
The amount due to directors is non-trade nature, unsecured, interest free and repayable on demand.
26. AMOUNT DUE TO SUBSIDIARIES
The amount due to subsidiaries is non-trade nature, unsecured, interest free and repayable on demand.
106 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
27. REVENUE
Group 2015 2014 RM RM
Trading of goods 1,156,232 2,300,023 Services rendered 3,167,343 2,069,359
4,323,575 4,369,382
28. LOSS BEFORE TAXATION
Group Company 2015 2014 2015 2014 RM rM RM rM
Loss before taxation is arrived at after charging/(crediting):- Amortisation of development costs 10,764 10,764 10,764 10,764 Audit fee - auditors 102,200 113,500 70,000 67,000 - other auditors 62,767 59,053 – – Other fees charged by auditors 5,800 5,000 5,800 – Bad debts written off 21,192 131,370 – – Director fees 292,491 46,000 172,811 46,000 Directors’ non-fee emoluments - salaries, allowances and bonuses 278,975 633,507 – 30,205 - defined contribution plan 35,233 42,879 – 3,960 Depreciation of property, plant and equipment 857,209 869,209 60,247 86,944 Impairment loss on:- - investment in associates – 135,518 – – - investment in subsidiaries – – – 210,000 - trade receivables 10,747 18,519 – – - other investment – 15,404 – – - amount due from subsidiaries – – – 182,137 - intangible assets 393,247 – – – Interest expense: - bank overdrafts 10,273 10,601 – – - finance lease 2,908 7,749 – – - bills payable 9,055 25,712 – – - term loans 204,899 227,432 130,599 153,636 - others 336,848 20,128 326,400 7,949
107 Notes to the Financial Statements (Cont’d)
28. LOSS BEFORE TAXATION (CONT’D)
Group Company 2015 2014 2015 2014 RM rM RM rM
Inventories written off – 61,484 – – Rental of premises 299,547 114,249 – – Bad debt recovered (23,571) – – – Gain on disposal of:- - property, plant and equipment (12,670) – – – - subsidiaries (487,838) – (24,000) – Reliased loss/(gain) on foreign exchange (4,136) (68,787) – – Writeback of impairment loss on amount due from a subsidiary – – – (41,427) Interest income (141,131) (8,581) (139,784) (8,343) Rental income (18,700) – – –
29. TAX EXPENSE/(INCOME)
Group 2015 2014 RM RM
Current tax:- Current financial year - Malaysia 156,400 – Under/(Over)provision in the previous financial year - Malaysia 4 (11,023)
156,404 (11,023) Deferred tax (Note 20):-
Current financial year 68,000 (51,832) Overprovision in the previous financial year – (59,260)
68,000 (111,092)
224,404 (122,115)
108 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
29. TAX EXPENSE/(INCOME) (CONT’D)
A reconciliation of income tax expense applicable to the loss before taxation at the statutory tax rate to income tax expense at the effective tax rate of the Group and the Company are as follows:-
Group Company 2015 2014 2015 2014 RM rM RM rM
Loss before taxation (2,374,666) (3,384,500) (1,849,474) (1,517,999)
Tax at the statutory tax rate (593,667) (846,125) (462,369) (379,500)
Tax effects of:- Non-allowable expense 717,400 584,403 366,369 374,825 Income not subject to tax (194,281) – (6,000) – Change in tax rate for the first tranche of chargeable income (25,000) – – – Deferred tax assets not recognised during the financial year 269,431 265,000 102,000 4,675 Under provision in previous year 4 – – – Overprovision in the previous financial year - current tax – (11,023) – – - deferred tax – (59,260) – – Effects of tax rates in different jurisdiction 50,517 (55,110) – –
Tax expense for the financial year 224,404 (122,115) – –
109 Notes to the Financial Statements (Cont’d)
30. LOSS PER SHARE
Group 2015 2014 RM RM
Loss after taxation attributable to owners of the Company (RM) (2,810,009) (3,097,792)
Weighted average number of ordinary shares 112,734,600 77,798,479
Basic loss per share (SEN) (2.49) (3.98)
There is no dilution in the loss per share as the average market value of the Company’s ordinary shares during both financial years were lower than the exercise price of the outstanding Warrants 2014/2019 and 2008/2014 respectively. Accordingly, there would be no conversion of these outstanding instruments for the purpose of calculating diluted loss per share.
31. eMPLOYEE BENEFITS EXPENSE
Group Company 2015 2014 2015 2014 RM rM RM rM
Salaries, wages and other emoluments 1,399,995 1,454,245 6,400 131,495 Defined contribution plans 120,355 123,484 – 9,432 Other benefits 194 38,073 – 2,824
1,520,544 1,615,802 6,400 143,751
110 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
32. direCTORS’ REMUNERATION
The aggregate amounts of remuneration payable to the directors of the Group and the Company during the financial year are as follows:-
Group Company 2015 2014 2015 2014 RM rM RM rM
Executive directors:- - salaries, allowances and bonuses 278,975 633,507 – 30,205 - defined contribution plan 35,233 42,879 – 3,960
314,208 676,386 – 34,165
33. reLATED PARTY DISCLOSURES
(a) Identities of related parties
The Group has related party relationships with its directors, key management personal and entities within the same group of companies.
(b) In addition to the information detailed elsewhere in the financial statements, the Group and the Company carried out the following transactions with the related parties during the financial year:-
Group Company 2015 2014 2015 2014 RM rM RM rM
Key management personal compensation:- - salaries, allowances and bonuses 278,975 633,507 – 30,205 - defined contribution plan 35,233 42,879 – 3,960 - director fees 292,491 46,000 172,811 46,000
111 Notes to the Financial Statements (Cont’d)
34. oPERATING SEGMENTS
Operating segments are prepared in a manner consistent with the internal reporting provided to the Board of Directors in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on its geographical locations, notably Malaysia, Singapore, Brunei and China. The Group operates within the information, communication and technology and related activities.
The Board of Directors assesses the performance of the operating segments based on operating profit or loss which is measured differently from those disclosed in the consolidated financial statements.
Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments are presented under unallocated items, if any.
Malaysia Singapore China Group 2015 RM rM rM RM
Revenue External revenue 3,468,807 787,816 66,952 4,323,575 Inter-segment revenue 130,856 417,653 – 548,509
3,599,663 1,205,469 66,952 4,872,084
Adjustments and eliminations (130,856) (417,653) – (548,509)
Consolidated revenue 4,323,575
Results Segment results (900,423) (291,155) (35,184) (1,226,762)
Interest income 141,131 – – 141,131 Finance costs (512,736) (51,247) – (563,983) Depreciation of property, plant and equipment (728,128) (127,493) (1,588) (857,209) Amortisation of development costs (10,764) – – (10,764) Other material income 509,717 37,198 – 546,915 Other non-cash and material items of expenses (403,994) – – (403,994)
(1,905,197) (432,697) (36,772) (2,374,666)
Tax expense (224,404)
Consolidated loss after taxation (2,599,070)
112 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
34. oPERATING SEGMENTS (CONT’D)
Malaysia Singapore China Group 2014 RM rM rM RM
Revenue External revenue 3,267,882 1,077,392 24,108 4,369,382 Inter-segment revenue 405,392 675,271 – 1,080,663
3,673,274 1,752,663 24,108 5,450,045
Adjustments and eliminations (1,080,663)
Consolidated revenue 4,369,382
Results Segment results (1,374,842) (306,036) (221,284) (1,902,162)
Interest income 8,531 – 50 8,581 Finance costs (225,361) (66,261) – (291,622) Depreciation of property, plant and equipment (743,964) (121,364) (3,881) (869,209) Amortisation of development costs (10,764) – – (10,764) Other material income 65,654 3,133 – 68,787 Other non-cash and material items of expenses (230,925) – – (230,925)
(2,511,671) (490,528) (225,115) (3,227,314)
Share of loss in associates (157,186) Tax income 122,115
Consolidated loss after taxation (3,262,385)
113 Notes to the Financial Statements (Cont’d)
34. oPERATING SEGMENTS (CONT’D)
Malaysia Singapore China Group 2015 RM rM RM rM
Assets Segment assets 31,652,968 3,605,538 5,445 35,263,951
Tax refundable 6,692
Consolidated total assets 35,270,643
Liabilities Segment liabilities 5,314,914 4,894,254 49,399 10,258,567
Deferred tax liabilities 335,967 Tax payable 164,000
Consolidated total liabilities 10,758,534
Other segment items Additional to non-current assets other than financial instruments: - property, plant and equipment 159,151 – – 159,151
Malaysia Singapore Brunei China Group 2014 R rM rM rM rM rM
Assets Segment assets 31,896,560 2,956,882 – 18,039 34,871,481
Tax refundable 22,803
Consolidated total assets 34,894,284
Liabilities Segment liabilities 4,376,473 3,768,909 1,551 67,554 8,214,487
Deferred tax liabilities 265,035 Tax payable 5,772
Consolidated total liabilities 8,485,294
Other segment items Additional to non-current assets other than financial instruments: - property, plant and equipment 82,955 – – – 82,955
114 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
34. oPERATING SEGMENTS (CONT’D)
(a) Other material items of income consists of the following:-
Group 2015 2014 RM rM
Bad debts recovered 23,571 – Rental income 18,700 – Gain on disposal of property, plant and equipment 12,670 – Gain on disposal of subsidiaries 487,838 – Realised gain on foreign exchange 4,136 68,787
546,915 68,787
(b) Other material non-cash items of expenses consists of the following:-
Group 2015 2014 RM rM
Impairment loss on intangible asset 393,247 – Impairment loss on trade receivables 10,747 18,519 Impairment loss in associates – 135,518 Impairment loss on other investment – 15,404 Inventories written off – 61,484
403,994 230,925
(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 2015 2014 2015 2014 RM rM rM rM
Information, communication and technology 2,497,634 3,338,177 16,006,462 14,386,752 Logistics 1,615,607 – 919,247 – Media 210,334 1,031,205 104,644 912,787
4,323,575 4,369,382 17,030,353 15,299,539
Major customers
Revenue from a major customer with revenue more than 10% of Group revenue, amounting to RM568,800 (2014: RM775,048) arose from logistics segment (2014: Sales of the information communication and technology segment).
115 Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS
35.1 Categories of Financial Instruments
The table below provides an analysis of financial instruments categorised as loans and receivables (“L&R”), available-for-sale financial assets (“AFS”) and financial liabilities categorised as other liabilities measured at amortised cost (“AC”) :-
Carrying amount L&R AFS AC RM rM rM rM Group
2015
Financial assets Trade receivables 1,446,184 1,446,184 – – Other receivables 5,416,111 5,416,111 – – Cash and bank balances 1,867,779 1,867,779 – – Other investment 104,644 – 104,644 –
8,834,718 8,730,074 104,644 –
Financial liabilities Trade payables 106,422 – – 106,422 Other payables 3,650,159 – – 3,650,159 Amount due to directors 3,290,789 – – 3,290,789 Finance lease liabilities 90,643 – – 90,643 Bank borrowings 3,120,554 – – 3,120,554
10,258,567 – – 10,258,567
2014
Financial assets Trade receivables 419,319 419,319 – – Other receivables 3,236,249 3,236,249 – – Short-term deposits with licenced bank 7,132 7,132 – – Cash and bank balances 15,540,055 15,540,055 – – Other investment 31,525 – 31,525 –
19,234,280 19,202,755 31,525 –
Financial liabilities Trade payables 226,673 – – 226,673 Other payables 1,245,126 – – 1,245,126 Finance lease liabilities 147,333 – – 147,333 Bank borrowings 4,121,237 – – 4,121,237 Amount due to directors 2,474,118 – – 2,474,118
8,214,487 – – 8,214,487
116 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.1 Categories of Financial Instruments (Cont’d)
The table below provides an analysis of financial instruments categorised as loans and receivables (“L&R”), available-for-sale financial assets (“AFS”) and financial liabilities categorised as other liabilities measured at amortised cost (“AC”) (cont’d) :-
Carrying amount L&R AFS AC RM rM rM rM Company
2015
Financial assets Other receivables 5,006,625 5,006,625 – – Amount due from subsidiaries 227,523 227,523 – – Cash and bank balances 1,484,845 1,484,845 – –
6,718,993 6,718,993 – –
Financial liabilities Other payables 2,405,204 – – 2,405,204 Amount due to subsidiaries 2,810,322 – – 2,810,322 Amount due to directors 106,892 – – 106,892 Borrowing 1,259,197 – – 1,259,197
6,581,615 – – 6,581,615
2014
Financial assets Other receivables 3,115,528 3,115,528 – – Cash and bank balances 15,463,286 15,463,286 – –
18,578,814 18,578,814 – –
Financial liabilities Other payables 386,657 – – 386,657 Amount due to subsidiaries 2,720,289 – – 2,720,289 Amount due to directors 6,575 – – 6,575 Bank borrowings 1,575,923 – – 1,575,923
4,689,444 – – 4,689,444
117 Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.2 Financial Risk Management Objectivities and Policies
Financial Risk
The Group and the Company are exposed to financial risks arising from its operations and the use of financial instruments. Financial risk management policy is established to ensure that adequate resources are available for the development of the Group’s and the Company’s business whilst managing its credit risk, liquidity risk, foreign currency risk and interest rate risk. The Group and the Company operate within clearly defined policies and procedures that are approved by the Board of Directors to ensure the effectiveness of the risk management process.
The main areas of financial risks faced by the Group and 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 date, the maximum exposure to credit risk arising from receivables is limited to the carrying amounts in the statements of financial position.
With a credit policy in place to ensure the credit risk is monitored on an ongoing basis, management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. 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.
118 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.2 Financial Risk Management Objectivities and Policies (Cont’d)
Financial Risk (Cont’d)
The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activity are set out as follows (cont’d):-
(a) Credit risk (cont’d)
(i) receivables (cont’d)
The ageing analysis of the trade receivables is as follows:
Group Individually Gross impaired net RM rM rM
2015
Not past due 1,037,454 – 1,037,454 Past due 1-30 days 186,056 – 186,056 Past due 31-60 days 189,616 – 189,616 More than 60 days 37,758 (4,700) 33,058
1,450,884 (4,700) 1,446,184
2014
Not past due 247,574 – 247,574 Past due 1-60 days 87,857 – 87,857 Past due 60-120 days 53,822 – 53,822 More than 120 days 49,975 (19,909) 30,066
439,228 (19,909) 419,319
Trade receivables that are neither past due nor impaired are credit worthy receivables with good payment records with the Group.
As at 31 March 2015, trade receivables of RM408,730 (2014: RM171,745) that are past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default.
119 Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.2 Financial Risk Management Objectivities and Policies (Cont’d)
Financial Risk (Cont’d)
The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activity are set out as follows (cont’d):-
(a) Credit risk (cont’d)
(i) receivables (cont’d)
The credit risk concentration profile of the Group as at the end of the reporting period is as follows:-
Group 2015 2014 RM RM By country:- Malaysia 1,284,626 298,433 Singapore 161,558 110,053 Others – 10,833
1,446,184 419,319
As at the reporting date, approximately 39% (2014: Nil) of trade receivables was due from one major customer.
As at the reporting date, approximately 96% (2014: 91%) of the other receivables was due from a other debtor.
The net carrying amount of trade and other receivables is considered a reasonable approximate of fair value. The maximum exposure to credit risk is the carrying value of each class of receivables mentioned above. Trade receivables that are individually determined to be impaired at the end of reporting period relate to receivables that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.
(ii) Corporate guarantees
The maximum exposure to credit risk is represented by the outstanding banking facilities of the subsidiary 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.
120 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.2 Financial Risk Management Objectivities and Policies (Cont’d)
Financial Risk (Cont’d)
The main areas of financial risks faced by the Group and 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)
(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:-
Group Carrying Contractual Within 1 to 2 to More than amount cash flow 1 year 2 years 5 years 5 years RM rM RM RM RM RM
2015
Trade payables 106,422 106,422 106,422 – – – Other payables 3,650,159 3,650,159 3,650,159 – – – Amount due to directors 3,290,789 3,290,789 3,290,789 – – – Finance lease liabilities 90,643 94,625 49,518 45,107 – – Borrowings 3,120,554 3,596,125 1,939,135 447,135 1,209,855 –
10,258,567 10,738,120 9,036,023 492,242 1,209,855 –
121 Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.2 Financial Risk Management Objectivities and Policies (Cont’d)
Financial Risk (Cont’d)
The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activity are set out as follows (cont’d):-
b) Liquidity risk (Cont’d)
Following are the areas where the Group and the Company are exposed to liquidity risk (cont’d):-
Group Carrying Contractual Within 1 to 2 to More than amount cash flow 1 year 2 years 5 years 5 years RM rM RM RM RM RM
2014
Trade payables 226,673 226,673 226,673 – – – Other payables 1,245,126 1,245,126 1,245,126 – – – Amount due to directors 2,474,118 2,474,118 2,474,118 – – – Finance lease liabilities 147,333 158,737 64,497 64,497 29,743 – Borrowings 4,121,237 4,804,966 1,070,973 639,325 1,744,003 1,380,408
8,214,487 8,909,620 5,081,387 703,822 1,773,746 1,380,408
Company Carrying Contractual Within 1 to 2 to More than amount cash flow 1 year 2 years 5 years 5 years RM rM RM RM RM RM
2015
Other payables 2,405,204 2,405,204 2,405,204 – – – Borrowings 1,259,197 1,492,000 1,492,000 – – – Amount due to directors 106,892 106,892 106,892 – – – Amount due to subsidiaries 2,810,322 2,810,322 2,810,322 – – –
6,581,615 6,814,418 6,814,418 – – –
2014 Other payables 386,657 386,657 386,657 – – – Borrowings 1,575,923 1,852,000 360,000 360,000 1,132,000 – Amount due to subsidiaries 2,720,289 2,720,289 2,720,289 – – – Amount due to directors 6,575 6,575 6,575 – – –
4,689,444 4,965,521 3,473,521 360,000 1,132,000 –
122 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.2 Financial Risk Management Objectivities and Policies (Cont’d)
Financial Risk (Cont’d)
The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activity are set out as follows (cont’d):-
(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. The currency giving rise to this risk is primarily United States Dollar (USD), Euro Dollar (EURO) and Singapore Dollar (SGD).
The Group’s exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period was:-
Group Company D denominated in denominated in EURO USD SGD 2015 RM rM RM
Amount due to a subsidiary – – (105,565) Trade payables – (70,441) – Borrowings (76,051) (117,996) – Cash at bank – 2,562 – Trade receivable – 2,716 –
(76,051) (183,159) (105,565)
Group Company D denominated in denominated in USD SGD 2014 RM RM
Cash at bank 4,874 – Amount due to a subsidiary – (105,565) Trade payables (61,807) – Borrowings (87,524) –
(144,457) (105,565)
The management deemed the risk to be negligible as the said balances are immaterial.
123 Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.2 Financial Risk Management Objectivities and Policies (Cont’d)
Financial Risk (Cont’d)
The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activity are set out as follows (cont’d):-
(d) interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates.
The Group’s 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 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 as follows:-
2015 2014 Group RM rM Fixed rate instruments
Financial asset Short-term deposits with licenced bank – 7,132
Financial liabilities Finance lease liabilities 90,643 147,333 Borrowings 194,285 1,047,789
284,928 1,195,122
Floating rate instrument Financial liability
Borrowings 2,926,269 3,073,448
2015 2014 Company RM rM Floating rate instrument
Financial liability Borrowings 1,259,197 1,575,923
124 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.2 Financial Risk Management Objectivities and Policies (Cont’d)
Financial Risk (Cont’d)
The main areas of financial risks faced by the Group and the Company and the policy in respect of the major areas of treasury activity are set out as follows (cont’d):-
(d) interest rate risk
The Group does not account for any fixed rate financial assets and liabilities 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 rate at the reporting date 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
2015 ± 14,631 ± 14,631 ± 6,296 ± 6,296
2014 ± 15,367 ± 15,367 ± 7,880 ± 7,880
125 Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.3 Fair value of financial instruments
The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their values and carrying amounts shown in the statement of financial position.
Fair value of financial Fair value of financial instruments instruments not Carrying amount carried at fair value carried at fair value Level 1 Level 3 RM rM RM
2015 Group Financial assets Quoted shares 104,122 – 104,122
Financial liabilities Finance lease liabilities – 119,590 90,643 Borrowings – 3,060,594 3,120,554
Company Financial liabilities Borrowings – 1,259,197 1,259,197
2014 Group Financial assets Quoted shares 31,525 – 31,525
Financial liabilities Finance lease liabilities – 147,409 147,333 Borrowings – 3,206,291 4,121,237
Company Financial liabilities Borrowings – 1,535,781 1,535,923
There were no transfers between Level 1 and Level 3 during the financial period (2014: no transfer in either direction).
126 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Notes to the Financial Statements (Cont’d)
35. FINANCIAL INSTRUMENTS (CONT’D)
35.3 Fair value of financial instruments (Cont’d)
Policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer.
Level 1 Fair Value
Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date.
Level 3 Fair Value
Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.
36. CONTINGENT LIABILITY-UNSECURED
Company 2015 2014 R rM RM
Corporate guarantee given to a licensed bank for banking facility granted to a subsidiary 144,404 254,173
37. siGNIFICANT EVENTS
During the financial year
(a) The significant event during the financial year relating to the acquisition and disposal of subsidiaries are disclosed in Note 5 to the Financial Statements.
(b) The significant event during the financial year relating to a Sale and Purchase Agreement with a third party for the disposal of the freehold land and building are disclosed in Note 17 to the Financial Statements.
(c) An agreement is entered with Top Valley Properties Sdn. Bhd. Which is undertaking a property project as disclosed in Note 10 to the Financial Statements.
After the reporting period
(a) A wholly-owned subsidiary of the Company, Venice Sanctuary Sdn. Bhd. (“VSSB”) had on 2 June 2015, extended into a Sourcing and Offer Take Agreement with Hong Kong International Mining Exchange Ltd (“HKIM”) for the supply of bauxite by VSSB to HKIM.
127 Notes to the Financial Statements (Cont’d)
DISCLOSURE OF REALISED AND UNREALISED PROFITS
Bursa Malaysia Securities Berhad had on 25 March 2010 and 20 December 2010, issued directives requiring all listed corporations to disclose the breakdown of unappropriated profits or accumulated losses into realised and unrealised on Group and Company basis, as the case may be, in quarterly reports and annual audited financial statements.
The breakdown of unappropriated losses as at the reporting date that has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and Guidance on Special Matter No. 1 issued on 20 December 2010 by the Malaysian Institute of Accountants are as follows:-
2015 2014 RM RM
Group
Total accumulated losses of the Group: - Realised (11,776,170) (8,254,758) - Unrealised (68,000) (30,335)
(11,844,170) (8,285,093)
Total accumulated losses from associate:- - Realised (364,518) (364,518)
(12,208,688) (8,649,611)
Less: Consolidation adjustment (2,970,909) (3,959,955)
Total accumulated losses as per consolidated financial statements (15,179,597) (12,609,566)
2015 2014 RM RM
Company
Total accumulated losses of the Company: - Realised (15,045,240) (13,195,766) - Unrealised (194,003) (194,003)
Total accumulated losses as per financial statements (15,239,243) (13,389,769)
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.
128 Asdion Berhad (590812-D) ANNUAL REPORT 2015
List of Properties
NBV as at S/N Beneficial Owner/ Description/ Land/ 31.3.2015 Location Encumbrance Built-Up Area (RM)
1. Asdion Berhad bearing the The Sales & Purchases Approximately 9,000,834 beneficial owner of this postal Agreement was completed 13,288 square feet address of No. 9, Persiaran on 13 April 2006. in area together Industri, Bandar Sri Damansara, with one (1) unit 52200 Kuala Lumpur, Malaysia. The purchase of this of a Six (6) storey property is financed by detached building All that piece of freehold land banking facilities from, and areacted held under H.S. (D) 85943, P.T. presently assigned to RHB No.23983 in the Mukim of Sungai Bank Berhad. Buloh, District of Petaling and state of Selangor.
The acquisition value for this property is RM3,570,000 dated 13 April 2006.
The Company did a revaluation on 12 March 2013. The valuation surplus of RM4,238,783 had been incorporation in the consolidated financial statements of company for the financial year ended 31 March 2013.
129 List of Properties (Cont’d)
NBV as at S/N Beneficial Owner/ Description/ Land/ 31.3.2015 Location Encumbrance Built-Up Area (RM)
2. TIS bearing the beneficial owner of A leasehold estate for a term Approximately 96 2,850,884* this postal address of 1 Pemimpin of 999 years commencing square meters. Drive, #05-07, Singapore 576151, from 6 July 1885. being a unit forming part of a building know as One Pemimpin The Sales & Purchases built on part of the land in the Agreement was completed District of Toh Payoh in the on 13 April 2011. Republic of Singapore, being part of Government Resurvey The property presently Lots 6322A and 16928T both of assigned to DBS Bank Ltd Mukim 18 forming part of the land for banking facility. contained in State Lease No. 2074 and 26920 respectively.
This property was acquired on 13 April 2013 at a value of SGD849,920. (Approximately RM2,117,236)
The Company did a revaluation on 15 March 2013. The valuation surplus of RM572,903 had been incorporation in the consolidated financial statements of company for the financial year ended 31 March 2013
Notes: * Based on exchange rate of RM2.6997 for every SGD$1
130 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Analysis of Shareholdings As at 24 July 2015
Authorised Share Capital : RM50,000,000 Issued & Paid-up Capital : RM11,320,890 Class of Shares : Ordinary Shares of RM0.10 each Voting Rights : One Vote per Ordinary Share
DISTRIBUTION OF SHAREHOLDINGS as at 24 July 2015
Size of Shareholdings no. of Shareholders % no. of Shares %
Less than 100 11 1.59 315 0.00 100 to 1,000 500 72.57 100,485 0.09 1,001 to 10,000 89 12.92 423,500 0.37 10,001 to 100,000 58 8.42 1,887,800 1.67 100,001 to 5,000,000* 27 3.92 40,222,200 35.53 5,000,001and above** 4 0.58 70,574,600 62.34
689 100.00 113,208,900 100.00
* Less than 5% of issued shares ** 5% and above of issued shares
SUBSTANTIAL SHAREHOLDERS as at 24 July 2015
No. of Shares held Name of Shareholdings Direct % indirect %
Tey Por Yee 24,815,300 21.92 – – Na Chiang Seng 20,429,400 18.05 – – Goodunited Limited 19,176,000 16.94 – – Nutox Limited 6,153,900 5.44 – –
DIRECTORS AND THEIR SHAREHOLDINGS as at 24 July 2015
No. of Shares held Name of Shareholdings Direct % indirect %
Yap Tai Tee 3,400,542 3.00 – –
131 Analysis of Shareholdings (Cont’d)
THIRTY LARGEST SHAREHOLDERS as at 24 July 2015
No. Name of Shareholders No. of Shares %
1 JF APEX NOMINEES (TEMPATAN) SDN BHD 24,815,300 21.92 - PLEDGED SECURITIES ACCOUNT FOR TEY POR YEE 2 JF APEX NOMINEES (TEMPATAN) SDN BHD 20,429,400 18.05 - PLEDGED SECURITIES ACCOUNT FOR NA CHIANG SENG 3 GOODUNITED LIMITED 19,176,000 16.94 4 NUTOX LIMITED 6,153,900 5.44 5 JF APEX NOMINEES (ASING) SDN BHD 5,000,000 4.42 - PLEDGED SECURITIES ACCOUNT FOR FAST GLOBAL INVESTMENTS LIMITED 6 RHB NOMINEES (TEMPATAN) SDN BHD 4,430,000 3.91 - PLEDGED SECURITIES ACCOUNT FOR MEGAT D.SHAHRIMAN BIN ZAHARUDIN 7 PT NUSANTARA RISING RICH 4,222,000 3.73 8 TELECITY INVESTMENTS LIMITED 3,845,800 3.40 9 YAP TAI TEE 3,400,000 3.00 10 LIOW ENG CHUAN 3,074,000 2.72 11 JF APEX NOMINEES (TEMPATAN) SDN BHD 2,093,000 1.85 - PLEDGED SECURITIES ACCOUNT FOR SERENA GOH FHEN FHEN 12 HSBC NOMINEES (ASING) SDN BHD 2,068,000 1.83 - AA NOMS SG FOR LINKSYS INVESTMENTS LIMITED 13 JF APEX NOMINEES (TEMPATAN) SDN BHD 1,765,300 1.56 - PLEDGED SECURITIES ACCOUNT FOR YEE YIT YANG 14 SJ SEC NOMINEES (TEMPATAN) SDN BHD 1,543,000 1.36 - PLEDGED SECURITIES ACCOUNT FOR OOI KOCK AUN 15 MAYBANK SECURITIES NOMINEES (ASING) SDN BHD 1,507,600 1.33 - MAYBANK KIM ENG SECURITIES PTE LTD FOR TEO EE SENG 16 KENANGA NOMINEES (TEMPATAN) SDN BHD 1,191,000 1.05 - PLEDGED SECURITIES ACCOUNT FOR KOH PEE SENG 17 TAN SOCK LUAN 1,000,000 0.88 18 HLIB NOMINEES (TEMPATAN) SDN BHD 879,500 0.78 - PLEDGED SECURITIES ACCOUNT FOR SOO TEE WEI 19 RHB NOMINEES (TEMPATAN) SDN BHD 790,000 0.70 - PLEDGED SECURITIES ACCOUNT FOR RAJA ABDULLAH BIN RAJA BAHARUDIN 20 ANG YIOK @ HONG CHIN PAU 694,800 0.61
132 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Analysis of Shareholdings (Cont’d)
No. Name of Shareholders No. of Shares %
21 LIM BOON HONG 475,000 0.42 22 TEO EE SENG 450,000 0.40 23 MAYBANK SECURITIES NOMINEES (ASING) SDN BHD 385,000 0.34 - MAYBANK KIM ENG SECURITIES PTE LTD FOR LOW SIEW YAM 24 JOAN YONG MUN CHING 245,600 0.22 25 AMSEC NOMINEES (TEMPATAN) SDN BHD 210,000 0.19 - LIM BOON YAW 26 DB (MALAYSIA) NOMINEE (TEMPATAN) SENDIRIAN BERHAD 200,000 0.18 - EXEMPT AN FOR DEUTSCHE BANK AG SINGAPOR 27 QUEK YONG WAH 200,000 0.18 28 MAYBANK NOMINEES (TEMPATAN) SDN BHD 152,600 0.13 - PLEDGED SECURITIES ACCOUNT FOR GOH BENG POH 29 KONG SEH KIANG 150,000 0.13 30 LOW CHEE KWONG 130,000 0.11
133 Analysis of Warrantholdings As at 24 July 2015
Total Warrants Issued : 51,189,960 Warrant holders : 892
DISTRIBUTION OF WARRANTHOLDINGS as at 24 July 2015
Size of Warrantholdings no. of Warrantholders % no. of Warrants %
Less than 100 641 71.86 7,511 0.01 100 to 1,000 104 11.66 31,710 0.06 1,001 to 10,000 58 6.50 330,330 0.65 10,001 to 100,000 67 7.51 2,190,735 4.28 100,001 to 1,000,000* 15 1.68 5,274,100 10.30 1,000,001and above** 7 0.75 43,355,574 84.70
892 100.00 51,189,960 100.00
* Less than 5% of issued warrants ** 5% and above of issued warrant
SUBSTANTIAL WARRANTHOLDERS as at 24 July 2015
No. of Warrant held Name of Warrantholdings Direct % indirect %
Goodunited Limited 22,205,600 43.38 – – JF Apex Nominees (Asing) Sdn Bhd 7,500,000 14.65 – – - Pledged securities account for Fast Global Investments Limited PT Nusantara Rising Rich 6,340,500 12.39 – –
DIRECTORS AND THEIR WARRANTHOLDINGS as at 24 July 2015
No. of Warrant held Name of Warrantholdings Direct % indirect %
Yap Tai Tee 340,054 0.66 – –
134 Asdion Berhad (590812-D) ANNUAL REPORT 2015
Analysis of Warrantholdings (Cont’d)
THIRTY LARGEST WARRANTHOLDERS as at 24 July 2015
No. of Warrant No. Name of Warrantholders % Held
1 GOODUNITED LIMITED 22,205,600 43.38 2 JF APEX NOMINEES (ASING) SDN BHD 7,500,000 14.65 - PLEDGED SECURITIES ACCOUNT FOR FAST GLOBAL INVESTMENTS LIMITED 3 PT NUSANTARA RISING RICH 6,340,500 12.39 4 JF APEX NOMINEES (TEMPATAN) SDN BHD 2,481,534 4.85 - PLEDGED SECURITIES ACCOUNT FOR TEY POR YEE 5 HLIB NOMINEES (TEMPATAN) SDN BHD 2,063,440 4.03 - PLEDGED SECURITIES ACCOUNT FOR SOO TEE WE 6 HLIB NOMINEES (TEMPATAN) SDN BHD 1,618,800 3.16 - PLEDGED SECURITIES ACCOUNT FOR SOO TEE WE 7 KENANGA NOMINEES (TEMPATAN) SDN BHD 1,145,700 2.24 - PLEDGED SECURITIES ACCOUNT FOR KOH PEE SENG 8 NUTOX LIMITED 858,740 1.68 9 LEE LAI YENG 688,200 1.34 10 CHAI CHAT LEONG 620,000 1.21 11 MAYBANK SECURITIES NOMINEES (ASING) SDN BHD 440,000 0.86 - MAYBANK KIM ENG SECURITIES PTE LTD FOR TEO EE SENG 12 NGIAM LI SIOK 400,000 0.78 13 TELECITY INVESTMENTS LIMITED 359,160 0.70 14 YAP TAI TEE 340,000 0.66 15 KHOO BOO LYE 300,000 0.59 16 TAN YEOW MENG 232,000 0.45 17 TAN GEK HONG 212,000 0.41 18 LOH KIN HENG 200,000 0.39 19 LEE WEI LING 183,000 0.36 20 LEONG WENG KEONG 171,000 0.33 21 LOCK SOI NGEN @ LOCK SOI NGIN 150,000 0.29 22 MERCSEC NOMINEES (TEMPATAN) SDN BHD 120,000 0.23 - PLEDGED SECURITIES ACCOUNT FOR TEY HOCK LAI 23 CHAI MING FATT 100,000 0.20 24 LOW LAI PENG 100,000 0.20 25 PUBLIC NOMINEES (TEMPATAN) SDN BHD 100,000 0.20 - PLEDGED SECURITIES ACCOUNT FOR HOO KE PING @ HOO KHI PING 26 TAN SOCK LUAN 100,000 0.20 27 MAYBANK NOMINEES (TEMPATAN) SDN BHD 93,590 0.18 - FAIZATUL IKMI BINTI ABD RAZAK 28 CHUAH KOOI LIN @ LIM KOOI LIN 80,000 0.16 29 JENNY CHUNG VUI LING 60,000 0.12 30 SUMI MATSUMURA 54,000 0.11
135 This page has been Intentionally left blank ✄ 5. 4. 3. 2. 1. Notes : As witnessmyhandthis...... dayof...... 2015 so, theProxy willvoteor abstain from votingathis/herdiscretion). Please indicatewithan“X”inthespacesprovided belowonhowyouwishyourvotestobecast.(Ifdonot thereof.adjournment Perdana, BandarSriDamansara, 52200KualaLumpuronMonday, 28September2015at10.00a.m.orany Thirteenth AnnualGeneralMeetingoftheCompanytobeheldatSriDamansaraClubBerhad,Lot23304,Persiaran or failinghim/her, theChairmanofMeeting,asmy/ourproxy tovoteforme/usandonmy/ourbehalfatthe ...... NRIC No...... and/or failinghim/her,...... NRIC No...... being amember/membersofASDIONBERHAD,hereby appoint...... of...... I/We...... Form ofProxy 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. RESOLUTIONS
...... the meeting or at any adjournment thereof. the meetingorat anyadjournment 18.03, 18thFloor, the time forholding 138JalanAmpang, 50450KualaLumpurnotless than forty-eight (48) hours before The instrumentappointing aproxymustbedeposited attheCompany’s Officesituated atPlaza138,Suite Registered 1965 shallnotapplytotheCompany. A proxymaybutneednotbeamember oftheCompanyandprovisionsSection149(1)(b) of theCompaniesAct, by eachproxy. than oneproxy, represented tobe theappointmentshallbeinvalidunless hespecifiestheproportionofhisshareholding his stead. than A one member proxy may to appoint attend a more at member the appoints same more meeting. Where A memberoftheCompanyentitledtoattendandvoteatmeeting isentitledtoappointaproxyattendandvotein a proxyorproxiestoattend,speakandvoteattheThirteenthAnnual GeneralMeeting. asamemberentitledtoattend,speakandvoteorappoint (“General MeetingRecordofDepositors”)shallberegarded ofdepositedsecurities,onlymemberswhosename appearintheRecordofDepositorsasat21September2015 In respect authorised. writing, or if the appointor is a corporation, either under its common seal or under the duly hand of an officer or attorney dulyauthorisedin The instrumentappointingaproxy shallbeinwritingunderthehandofappointororhisattorney and toauthorisetheDirectors tofixtheir remuneration To re-appoint as the Auditors of the Company Messrs. SJ Grant Thornton March 2015 To approve thepaymentofDirectors’ Feesforthefinancialyearended31 Re-election ofDirector : Dato’MohamedRidzuanBinNorMd Re-election ofDirector : Tengku AzlanIbniSultanAbuBakar Re-election ofDirector : Dato’Yen SoonAi Re-election ofDirector : DatukRaimeBinUnggi Re-election ofDirector : EncikMohamadFaridBinMohdYusof Re-election ofDirector : Mr. SelvaRasanA/LDato’PuspaDas Re-election ofDirector : Mr. SeePohYee - Ordinary Resolution Special Business Companies Act,1965 Authority toissueandallotshares pursuant to Section132Dofthe (full nameinblockletters)
(Incorporated inMalaysiaundertheCompaniesAct,1965)
by eachproxy No. of Ordinary Shares to be represented Total numberofordinary shares held CDS AccountNo. Solutions forGr of...... of...... ASDION BERHD Company No.590812-D (full address) NRIC No./CompanyNo...... owing Businesses (full nameinblockletters) (full address) (full address) Signature ofMember(s)/CommonSeal (full nameinblockletters) Proxy 1 FOR Proxy 2 AGAINST Then fold here
AFFIX STAMP
The Company Secretaries Asdion Berhad (590812-D) Plaza 138, Suite 18.03, 18th Floor, 138, Jalan Ampang, 50450 Kuala Lumpur.
1st fold here ASDION BERHAD
Solutions for Growing Businesses
ASDION BERHAD (Company No.: 590812-D) annual report 2015
ASDION BERHAD (590812-D) ANNUAL REPORT 2015 Oval Tower @ Damansara Unit 28-8, 28th Floor, No. 685 Jalan Damansara TTDI, 60000 Kuala Lumpur, Malaysia
T: +603 7733 1399 F: +603 2856 9889 www.asdion.com