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Annual R

eport 2015IFCA MSC Berhad (Co. No.453392-T)

Annual Report2015

IFCA MSC Berhad(453392-T)

Wisma IFCA, No 19, Jalan PJU 1/42A, Dataran Prima, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia

Tel: +603 7805 3838 Fax: +603 7804 0206 Email: [email protected] URL: www.ifcasoftware.com

Asia | Africa

1

Annual Report 2015

`

Contents Page Corporate Profile

2

Corporate Information

3

Chairman’s Statement

4 - 5

Financial Highlights

6

Directors’ Profile

7 – 9

Corporate Presence

10

Notice of Annual General Meeting

11 – 13

Corporate Governance Statement

14 – 18

Additional Compliance Information

19 – 20

Audit Committee Report

21 – 24

Statement of Risk Management & Internal Control

25 – 26

Corporate Social Responsibility Disclosure

27 – 28

Audited Financial Statements

30 – 131

List of Properties

132

Shareholding Statistics

133 – 135

Proxy Form 137 – 138

2

IFCA MSC BERHAD (Co. No. 453392-T)

IFCA is a business software solution company specializing in the Property industry for 29 years. Established in 1987, the

company has a talent pool of over 500 staff across all IFCA offices in Asia and South Africa.

IFCA, an acronym for Information for Competitive Advantage is the motto to provide innovative and strategic software solution

for the Property industry. Over the years, it has developed its software to meet the needs of property developers and property

managers. These properties cover shopping malls, chain stores, residential, industrials, commercials, resorts, hotels and

recreational sport clubs.

Our Technology Excellence Centers are located in Malaysia and China, providing best of breed technology and industry

domain expertise to deliver competitive solutions for our customers. These customers include our iconic industry leaders and

titans, to mid-range, and to boutique property developers and property managers.

With decades of staff dedication and commitment, IFCA property software has served over a thousand satisfied customers.

IFCA the company and the software have gained multiple industry awards and recognitions. These include Technology Fast

500 Asia Pacific, APICTA Award, IBM, Microsoft, PIKOM-Computimes Technopreneur of The Year to name a few.

Today, IFCA is public listed as IFCA MSC Berhad in the Bursa Malaysia. IFCA has a strong balance sheet and zero

borrowing to meet its long term objective - To be a Global Business Software Organization in the Property industry.

To deliver world-class Products and services

To exceed expectation on customer service and satisfaction

To empower, retain and reward competent employees

To enhance shareholders’ value

To be a Global Business Software Organization in the Property industry.

3

Annual Report 2015

Executive Directors

• Yong Keang Cheun (Executive Chairman cum Chief Executive Officer)

• Yong Kian Keong (Deputy Chairman)

• Chow Chee Keng (Finance Director)

Non Executive Independent Directors • Chew See Chiew • Hoe Kah Soon • Ooi Bee Bee • Ngian Siew Siong

Company Secretaries Yap Kim Sing (LS0001376) Wong Kam Khan (MIA No.3153) Audit Committee Chew See Chiew (Chairman) Hoe Kah Soon Ooi Bee Bee Auditors UHY, Kuala Lumpur Office Suite 11.05, Level 11 The Gardens South Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur Principal Bankers Hong Leong Bank Berhad OCBC Bank (Malaysia) Berhad

Registrar Insurban Corporate Services Sdn Bhd 149, Jalan Aminuddin Baki Taman Tun Dr. Ismail 60000 Kuala Lumpur T 603 7729 5529 F 603 7728 5948 Registered Office 24B, Persiaran Zaaba Taman Tun Dr. Ismail 60000 Kuala Lumpur T 603 7727 0321 F 603 7727 0326 Business Office Wisma IFCA, 19 Jalan PJU 1/42A Dataran Prima, 47301 Petaling Jaya Selangor Darul Ehsan Malaysia T 603 7805 3838 F 603 7804 0206 Stock Exchange Listing Bursa Malaysia Securities – ACE Market Stock Codes Bursa Malaysia:0023 Reuters:IFCA.KL Bloomberg:IFCA MK Website www.ifcasoftware.com

4


Dear Valued Shareholders, On behalf of the Board of Directors, it gives me great pleasure to present IFCA MSC Berhad’s (“IFCA” or the “Company”) and its group of companies (“the Group”) Annual Report and audited financial statements for the financial year ended 31 December 2015. In spite of the persistently challenging operating environment, I am pleased to announce that the Group continues to deliver modest growth in FY2015. Riding the Waves Malaysia grappled with severe headwinds on economic front last year, following unanticipated global commodity price drop, currency depreciation as well as declining oil prices. The Malaysian economy achieved moderated Gross Domestic Products (“GDP”) of 5.0 percent in 2015, moderating from a 6.0 percent growth reported in 2014. Despite the challenging operating environment, Malaysia’s information technology investments managed to persevere and recorded positive growth in 2015. For 2016, analysts believe that the sector will be driven by positive new enhancements, with one of the key drivers for change being asset enhancement activities undertaken in 2015. The Group managed to record positive revenue and earnings growth in 2015, even in the challenging operating environment due to the GST and weak consumer sentiment. Our customers remain at the forefront of our focus. Meeting the challenges of value-creation in this digital era requires new approaches to business. At IFCA, we are continuously innovating and identifying new business models, products and services within the connected digital economy to empower our customers to deliver business excellence. Leveraging on our digital solutions capabilities in Property and E-Commerce, we are creating new business models for our customers to help them achieve inclusive and sustainable growth with the set-up of Property365 Sdn Bhd. This Company will transform the E-Commerce industry in the property segment. Financial Performance The Group total revenue increased to RM101.6 million in FY2015, an increase of 13.9% as compared to RM89.2 million in FY2014. Consequently, the Group recorded profit after tax and non-controlling interest of RM21.6 million compared to RM20.8 million last year. The growth in revenue and profit after tax and non-controlling interest were mainly contributed by yearly increase in our software as a service (“SaaS”) business segment. Building on these positive results, the Group’s financial position has been augmented with shareholders’ funds registering an increase of 32.8% to RM94.5 million. At the end of the financial year, the Group’s cash reserve stood at RM67.4 million, an increase of 35.3% compared to RM49.8 million in the prior year. For 29 years, our core business of providing enterprise software solutions for the property industry, have truly made us a property software maven. Future Prospects The Group continues to see challenges with the current economic environment and modest opportunities for FY2015. Our unbilled projects in hand, total almost RM25.3 million as at year end 2015. Our strong and active presence in China has been felt by the local market which now spanned 8 major Chinese cities covering each geographical location. With local expertise and resources together with close supervision, we are making sure the groups interest are being harness fully in this land of Billion. In addition, we have acquired PT IFCA Consulting Indonesia and have incorporated a new Company, PT IFCA Property365 Indonesia to further enhance our roadmap in Indonesia. While market conditions are increasingly more challenging in Asia, we remain cautiously optimistic that our resilient business model will enable us to effectively address the business opportunities in our core markets. We have a comprehensive suite of mission critical software and services to deliver end-to-end solutions in facilitating transformational changes for our customers in property development and many other industries in a digital economy. In the near term, we will focus our resources on existing as well as potential new customers within ASEAN and adjacent markets to capitalise on our strong track record here. At the same time, we are developing newer markets with the potential to contribute significantly over the longer term, such as North Asia and the Australia and New Zealand markets.

5

Annual Report 2015

IFCA has set-up Property365 Sdn Bhd to enter the e-commerce business with an electronic property portal named “Property365.my”, and have launched it in early Quarter 1 2016 to gain visibility and foothold. Property365.my is a digital platform that serves as a marketplace for all new residential properties. It is designed with an online booking feature to help property developers market and sell their projects smarter and faster. Potential property buyers can register their interest and access all the information on their preferred projects as well as register and proceed to book their preferred units through this platform.

To fulfil that mission and to help property developers sell faster, better, and smarter, we also created a unique Agent e-marketplace to enable property developers to empower and equip thousands of professional real-estate agents nationwide and internationally to market and sell their projects, anytime, anywhere, on any device. Corporate Exercise At the beginning of 2016, the Group has completed the acquisition of 100% equity interest in PT IFCA Consulting Indonesia. This acquisition came with an average profit guarantee of RM4 million per annum from calendar year 2016 to 2018. The purchase consideration of RM32.0 million was satisfied through a combination of cash amounting to RM16.0 million and the issuance of 16,000,000 new ordinary shares of RM0.10 each in IFCA shares at an issue price of RM1.00 per IFCA share. Taking consideration of the market size and our market leadership in Indonesia, the completion of this exercise will contribute positively to the Group. Dividend The Group has for the second time adopted the dividend policy. With effect from this financial year, the Group will distribute at least 20% of the consolidated profit after taxation and non-controlling interests in respect of any financial year to its shareholders. The Group has proposed a dividend of 1 sen per share to the shareholders. This represents a pay-out of 28% of its profit after taxation. Board Changes I would like to welcome our newly appointed Independent & Non-Executive Director, Mr. Ngian Siew Siong who joined the Board on 27 July 2015. Similar welcome is extended to our former Chief Financial Officer, Mr. Chow Chee Keng (Daniel) who was appointed as Finance Director with effect from 1 January 2016. The profile of both new directors are displayed on page 9 of this annual report. I look forward to a long and fruitful working relationship with our new Directors, and am confident that their experience will be of great value to the Company. Appreciation On behalf of the Board, I would like to take this opportunity to extend our appreciation to the entire management and staff of IFCA. Their splendid efforts and contributions throughout the year, has contributed to the significant achievement for the Group. A sincere thank you also goes out to our valued shareholders for their continued trust and confidence in us. Last but not least, our highest appreciation to all our business partners and cherished customers, for extending your invaluable support to us as your trusted solution provider.

Yong Keang Cheun Executive Chairman 19 April 2016

6


FINANCIAL HIGHLIGHTS

Summarised Statement of Comprehensive Income ~ Year Ended 31 December (RM'000) 2011 2012 2013 2014 2015Revenue 37,665 45,931 52,007 89,241 101,624 Profit/(Loss) Before Tax (2,345) 3,527 1,897 25,384 25,753 Profit/(Loss) After Tax & Non-Controlling Interest (2,676) 3,479 1,728 20,770 21,603

Summarised Statement of Financial Position As at 31 December (RM'000) 2011 2012 2013 2014 2015

Property, Plant & Equipment 8,391 9,061 9,303 9,169 9,412 Investment Properties 430 434 278 287 293 Deferred Development Costs 4,488 3,967 5,206 13,257 19,560 Other Non-Current Assets 1,279 427 300 202 276 Total Non-Current Assets 14,588 13,889 15,087 22,915 29,541

Current Assets 42,812 44,395 46,925 69,707 91,263 TOTAL ASSETS 57,400 58,284 62,012 92,622 120,804

Shareholders' Equity 40,634 46,659 47,495 71,118 94,474 Minority Interest (41) (276) (350) 440 370 Total Equity 40,593 46,383 47,145 71,558 94,844

Non-Current Liabilities 942 625 444 1,870 3,782 Current Liabilities 15,865 11,276 14,423 19,194 22,178 Total Liabilities 16,807 11,901 14,867 21,064 25,960 TOTAL EQUITY AND LIABILITIES 57,400 58,284 62,012 92,622 120,804

sen sen sen sen senBasic earnings/(loss) per share (0.66) 0.80 0.38 4.58 3.97 Net assets per share 9 10 11 15 17

- 50,000 100,000 150,000

2011

2012

2013

2014

2015

37,665

45,931

52,007

89,241

101,624

Total Revenue (RM'000)

(5,000)

-

5,000

10,000

15,000

20,000

25,000

2011 2012 2013 2014 2015(2,676)

3,479

1,728

20,770 21,603

Profit/(Loss) After Tax & Non-Controlling Interest (RM'000)

- 20,000 40,000 60,000 80,000 100,000

2011

2012

2013

2014

2015

40,634

46,659

47,495

71,118

94,474

Shareholders' Equity (RM'000)

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2011 2012 2013 2014 2015

25,870

32,368 34,288

49,796

67,396

Cash & Bank Balance (RM'000)

- 50,000 100,000 150,000

2011

2012

2013

2014

2015

57,400

58,284

62,012

92,622

120,804

Total Assets (RM'000)

7

Annual Report 2015

Appointed to the Board on 20 November 1997, Mr. Yong Keang Cheun is the founder of the IFCA Group. He also co-founded of the Group’s current major shareholder - IFCA Software (Asia) Sdn Bhd (“IFCA Software”) in 1987. He obtained his Master Degree in Computer Science from the University of Manitoba, Canada, and started his career as an IT consultant with Arthur Andersen in Malaysia. With more than 27 years of experience in the ICT industry, he has been involved in many aspects of the software business, including product development, business development and project implementation. He is responsible for developing the overall strategies and policies for the IFCA Group, and has been involved in the research and development of the Groups products. He assumed his current position in 1997, following an internal restructuring exercise that resulted in the transfer of IFCA Software’s business operations to the Company. His visionary and entrepreneurial acumen has won him a series of personal and corporate accolades, including PIKOM’s Technopreneur of the Year and “Key Industry Leader”, Ernst & Young’s ‘Entrepreneur of the Year’, and Deloittes “Technology Fast Track 500”. He is the brother of Mr. Yong Kian Keong, an Executive Deputy Chairman and a substantial shareholder of the Company. He does not hold any other directorship in any public listed company. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any.

Appointed to the Board on 20 November 1997, Yong Kian Keong is the Group Managing Director of the IFCA Group. He is responsible for the overall day-to-day management of the Group's business operations, particularly in the sales and marketing areas. He joined IFCA Software (Asia) Sdn Bhd (“IFCA Software”), the current major shareholder of the Company, in 1990 and was involved in its business operations. In 1997, he assumed his present position following an internal restructuring exercise, which resulted in the transfer of IFCA Software's business operations to the Company. He was instrumental in assisting the Group in achieving its current customer base and market share. He also played a major role in developing the Group’s expansion in the overseas markets and its international business partnership program. He is the brother of Mr. Yong Keang Cheun, the Executive Chief Officer of the Company and a substantial shareholder of the Company. He does not hold any other directorship in any public listed company. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any.

8


-

Mr. Chew See Chiew was appointed to the Board on 3 February 2010. He also serves as Chairman of the Audit Committee and as a member of the Remuneration Committee of the Company. He holds a Bachelor Degree in Accountancy from the University of Technology, Australia and is a Chartered Accountant. He obtained his professional CPA accreditation in Australia. He has extensive experience in finance, accountancy, corporate planning and the property development industry in private companies as well as public listed companies. He has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. He does not hold any other directorship in any public listed company. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any.

OOI BEE BEE, 56, Malaysian Independent Non-Executive Director

Mr. Hoe Kah Soon was appointed to the Board on 22 January 2009. He also sits on the Audit Committee of the Company. He holds a Bachelor of Accounting Degree from University Malaya, with a first class honours. After graduation in 1982, he joined Arthur Andersen (Audit Division) where he successfully completed his MACPA examinations. In 1984, he transferred to its Consulting Division (which eventually became Accenture) and was admitted to global partnership in 1995. At Accenture (until 2005), he specializes in program managing large scale business systems integration projects. He also assumed several leadership positions including Country Managing Partner Taiwan, Accenture Global People Matters (HR) advisory committee and Head of Malaysia Resources Operating Group. He is currently a free-lance business advisor. Currently he also serves as an independent non-executive director of Diversified Gateway Solutions Berhad and Ireka Corporation Berhad. He has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any.

Ms. Ooi Bee Bee was appointed to the Board on 3 February 2010. She also sits on the Audit Committee of the Company and is a member of the Remuneration Committee of the Company. She holds a Bachelor of Arts Degree and Postgraduate Diploma in Computer Science from University of Malaya. She also has The London Chamber of Commerce and Industry Intermediate Stage Certificate for book-keeping. She served in IFCA Group from 1987 to 2007. During her tenure in IFCA, she was involved in research and development, customer services, project management and overseas offices operations in Thailand, Indonesia, Philippines and China. She has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. She does not hold any other directorship in any public listed company. Within the last 10 years, she has not been convicted for any offences other than traffic offences, if any.

-

9

Annual Report 2015

Ngian Siew Siong was appointed to the Board on 27 July 2015. He hold a BSc in Civil Engineering from the University of Leeds, UK.

He started his career with the Civil Service of the Malaysia Government in 1976. In 1979 he moved to the private sector in the Property Development industry by joining the MBF property Group. In 1985 he joined the Sunway Group to set up the property development division. Under his leadership, the property development division known as Sunway City Berhad became a leading and award winning property developer in Malaysia. He retired in 2012 as its Managing Director. He was the past Chairman of Real Estate & Housing Developer Association, Selangor and currently a Council Member of Real Estate & Housing Developer Association Malaysia. He is currently an independent and non-executive director of Nam Long Investment Corporation, a Vietnamese property development company listed in the Hanoi Stock Exchange. He has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any.

-

Mr. Chow joined IFCA MSC Berhad since 2007 and was appointed to the Board on 1 January 2016. Prior to the appointment, he served as Chief Financial Officer of IFCA MSC Berhad. Currently, he oversees the financial and treasury functions of the Group. He is a fellow member of the Association of Chartered Certified Accountants (ACCA), United Kingdom and a member of Malaysian Institute of Accountants (MIA). Mr. Chow is also a certified professional trainer and facilitator (CPTF) accredited by the University Malaya Centre for Continuing Education and conducts seminars and trainings at public events on a regular basis. He has extensive working experience in financial reporting, taxation and corporate planning in several public listed companies across various industries including information technology, property and construction. He has no family relationship with any other Directors or major shareholders of the Company and has no conflict of interest with the Group. Within the last 10 years, he has not been convicted for any offences other than traffic offences, if any.

10


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11

Annual Report 2015

Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting of IFCA MSC Berhad (“the Company”) will be held at the Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Thursday, 26 May 2016 at 2.30 p.m. to transact the following business:- As Ordinary Business 1. To receive the Audited Financial Statements for the financial year ended 31 December 2015

together with the Reports of the Directors and Auditors thereon. 2. To declare a final single-tier dividend of 1.0 sen per ordinary share for the financial year ended 31

December 2015. 3. To re-elect the following Directors who retire pursuant to Article 85 of the Company’s Articles of

Association: (i) Chew See Chiew (ii) Ooi Bee Bee (iii) Yong Kian Keong 4. To re-elect the following Directors who retire pursuant to Article 90 of the Company’s Articles of

Association: (i) Chow Chee Keng (ii) Ngian Siew Siong 5. To approve the payment of Directors’ fees of RM139,500.00 for the financial year ended 31

December 2015. 6. To re-appoint Messrs UHY as Auditors of the Company and to authorise the Directors to fix their

remuneration.

As Special Business To consider and, if thought fit, to pass the following Ordinary Resolutions, with or without modifications:- 7. Proposed Share Buy-Back Renewal

Proposed Renewal of Shareholders’ Mandate to Enable the Company to Purchase up to Ten Percent (10%) of its Issued and Paid-up Share Capital (“Proposed Renewal of the Share Buy-Back Authority”) “THAT subject to the Companies Act, 1965 (the “Act”), rules, regulations and orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles of Association and the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“Listing Requirements”) and any other relevant authority, the Company be and is hereby authorised to purchase and/or hold such amount of ordinary shares of RM0.10 each in the issued and fully paid-up share capital of the Company through Bursa Securities upon such terms and conditions as the Directors may deem fit and in the best interest of the Company provided that:-

(a) the aggregate number of shares so purchased and/or held pursuant to this ordinary resolution

(“Purchased Shares”) does not exceed ten percent (10%) of the total issued and fully paid-up capital of the Company at any point in time; and

(b) the maximum amount of funds to be allocated for the Purchased Shares shall not exceed the

aggregate of the retained profits and/or share premium of the Company;

Please refer to Note 2 Resolution 1 Resolution 2 Resolution 3 Resolution 4 Resolution 5 Resolution 6 Resolution 7 Resolution 8 Resolution 9

12


AND THAT the Directors be and are hereby authorised to decide at their discretion either to retain the Purchased Shares as treasury shares (as defined in Section 67A of the Act) and/or to cancel the Purchased Shares and/or to retain the Purchased Shares as treasury shares for distribution as share dividends to the shareholders of the Company and/or be resold through Bursa Securities in accordance with the relevant rules of Bursa Securities and/or cancelled subsequently and/or to retain part of the Purchased Shares as treasury shares and/or cancel the remainder and to deal with the Purchased Shares in such other manner as may be permitted by the Act, rules, regulations, guidelines, requirements and/or orders of Bursa Securities and any other relevant authorities for the time being in force AND THAT the Directors be and are hereby empowered to do all acts and things (including the opening and maintaining of a central depositories account(s) under the Securities Industry (Central Depositories) Act, 1991 and to take all such steps and to enter into and execute all commitments, transactions, deeds, agreements, arrangements, undertakings, indemnities, transfers, assignments and/or guarantees as they may deem fit, necessary, expedient and/or appropriate in the best interest of the Company in order to implement, finalise and give full effect to the Proposed Share Buy-Back Authority with full powers to assent to any conditions, modifications, variations (if any) as may be imposed by the relevant authorities; AND FURTHER THAT the authority conferred by this ordinary resolution shall be effective immediately upon passing of this ordinary resolution and shall continue in force until the conclusion of the next annual general meeting (“AGM”) of the Company or the expiry of the period within which the next AGM of the Company is required by law to be held (whichever is earlier), unless earlier revoked or varied by ordinary resolution passed by the shareholders of the Company at a general meeting, but shall not prejudice the completion of purchase(s) by the Company before that aforesaid expiry date and in any event in accordance with the provisions of the Listing Requirements and other relevant authorities.”

8. To transact any other ordinary business of which due notice has been duly given in accordance with the Companies Act, 1965.

NOTICE OF DIVIDEND ENTITLEMENT NOTICE IS ALSO HEREBY GIVEN THAT subject to the approval of the shareholders at the Eighteenth Annual General Meeting to be held on 26 May 2016, a single-tier final dividend of 1.0 sen per ordinary share for the financial year ended 31 December 2015 will be paid on 15 July 2016 to Depositors registered in the Record of Depositors at the close of business on 31 May 2016. A Depositor shall qualify for entitlement to the dividend only in respect of: (a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 31 May 2016 in respect of transfers; and (b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad. By Order Of The Board Wong Kam Khan (MIA 3153) Yap Kim Sing (LS 01376) Company Secretaries 29 APRIL 2016

13

Annual Report 2015

Notes:

1. Notes on Appointment of Proxy.

a) A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote on his stead. A proxy need not be a member of the Company. There shall be no restriction as to the qualification of a proxy and the provisions of Section 149(1) (a), (b) and (c) of the Companies Act, 1965 shall not apply to the Company.

b) The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation, either under the corporation’s Seal or under the hand of an officer or attorney duly authorised.

c) Where a member appoints more than one (1) proxy to attend the same meeting, such appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

d) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”), it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said securities account.

e) Where a member of the Company is an exempt authorised nominee as defined under the SICDA, which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

f) Where the authorised nominee or an exempt authorised nominee appoints two (2) or more proxies, the proportion of the shareholdings to be represented must be specified in the instrument appointing the proxies.

g) The instrument appointing a proxy or proxies duly completed must be deposited at the Registered Office of the Company situated at 24B, Persiaran Zaaba, Taman Tun Dr. Ismail, 60000 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting i.e. on or before 02.30 p.m., Tuesday, 24 May 2016.

h) A depositor whose name appears in the Record of Depositors as at 18 May 2016 shall be regarded as a Member of the Company and be entitled to attend this Annual General Meeting or appoint a proxy to attend and vote on his behalf.

2. Audited Financial Statement for the financial year ended 31 December 2015

The Audited Financial Statement in Agenda item no. 1 is meant for discussion only as the provision of Section 169(1) of the Companies Acts 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this item on the Agenda is not put forward for voting.

Explanatory Notes on Special Business:

1. Ordinary Resolution 9 – Proposed Renewal of the Share Buy-Back Authority

Ordinary Resolution 9, if passed will enable the Company to utilise any of its surplus financial resources to purchase its own shares through Bursa Securities up to ten percent (10%) of the issued and paid-up capital of the Company. This authority will, unless revoked or varied at a General Meeting, expire at the conclusion of the next AGM of the Company.

Further information on the Proposed Renewal of the Share Buy-Back Authority are set out in the Statement to Shareholders of the Company which is dispatched together with the Company’s Annual Report for the year ended 2015.

Statement Accompanying Notice of Annual General Meeting

Pursuant to Rule 8.29 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad

1. Details of individuals who are standing for election as Directors

No individual is seeking election as a Director at the forthcoming Eighteenth Annual General Meeting of the Company (“18th AGM”)

14


Statement On Corporate Governance The Board of Directors (“the Board”) of IFCA MSC Bhd (“IFCA” or the “Company”) recognises the importance of upholding good corporate governance in the discharge of its duties and responsibilities to uphold shareholders’ confidence and enhance shareholders’ value consistent with the principles and best practices set out in the Malaysian Code on Corporate Governance 2012 (“the Code”). The Board will continuously evaluate the Group’s corporate governance practices and procedures, and where appropriate will adopt and implement the best practices as enshrined in the Code to the best interest of the shareholders of the Company.

The statement below sets out the manner in which the Group has applied the key principles and the extent of its compliance with the best practices set out in the Code throughout the financial year under review pursuant to Rule 15.25 of the ACE Market Listing Requirements of Bursa Securities (“Listing Requirements”).

THE BOARD OF DIRECTORS

The Board assumes responsibility for leading and controlling the Group. The Board has the overall responsibilities for corporate governance, risk management, internal controls, strategic direction, succession planning, formulation of policies and overseeing the investment and business of the Group. In carrying out its functions, the Board has delegated specific responsibilities to three Board Committees, namely Audit Committee, Nomination Committee and Remuneration Committee. These committees have the authority for their own specific issues and their recommendations are reported back to the Board.

A.1 Board Balance

The current Board of Directors consists of seven (7) members, comprising three (3) Executive Directors who is the Executive Chairman, the Deputy Chairman and the Finance Director and four (4) Independent Non-Executive Directors. The Company thus complies with Rule 15.02 of the Listing Requirements whereby at least two (2) or one-third (1/3) of the Board of Directors, whichever is higher, are independent directors. The Chairman and Chief Executive Officer is responsible for running the Board and ensuring that all Directors receive sufficient and reliable information on financial and non-financial matters to enable them to participate actively in Board decisions whilst the Chief Executive Officer is responsible over the operating units, organisation effectiveness and implementation of the Board’s policies and decisions.

The Company is led by a Board comprising members with a wide range of business, financial, technical and consulting experience. This depth and diversity in expertise and perspectives as reflected in the Directors’ Profile on pages 7 to 9 of this Annual Report bring vital ingredients necessary for the Company’s strategic direction and guidance in the Management of the various business activities undertaken by the Group.

The Board shares a common goal of providing the best total integrated software solutions for our clients in various industries. With the overall responsibility for the Company’s strategic direction, the Board always strives to give due attention to matters pertaining to corporate strategy development and alignment, business operational execution and performance monitoring within the context of both internal and external factors in the marketplace.

The size and composition of the Board reflects a balance of executive and non-executive directors who are reputable and professional person of caliber in the business environment to provide leadership and exercise control of the Group. The independent non-executive directors provide an unbiased and independent judgment to ensure a balanced an impartial Board decision making process.

Mr. Chew See Chiew, who is also the chairman of the Audit Committee, is identified as a senior Independent Non-Executive Director to whom concerns may be conveyed.

15

Annual Report 2015

Corporate Governance Statement (cont’d) A.2 Board Meeting and Supply of Information to the Board

The Board meets on a quarterly interval, at least four (4) times a year with additional meetings convened as and when required. During the financial year ended 31 December 2015, five (5) Board meetings were held and the attendance of Board members is as follows:-

Directors Number of Meetings Attended

Percentage of Attendance

Yong Keang Cheun 5/5 100%Yong Kian Keong 5/5 100%Chew See Chiew 5/5 100%Hoe Kah Soon 5/5 100%Ooi Bee Bee 5/5 100%Ngian Siew Siong (appointed on 27 Jul 2015) 2/2 100% Chow Chee Keng (appointed on 1 Jan 2016) n/a n/a

The Directors have full and timely access to all information pertaining to the Group’s business and affairs to enable them to discharge their duties. Senior management are invited to attend the Board meetings to explain and clarify matters as required.

The agenda for every meeting together with a full set of Board papers containing information relevant to the business of the meetings are circulated to the Directors for their perusal in advance usually 7 days before the meeting date. This is to allow the Directors to have sufficient time to review and consider the agenda items before the Board meeting and to obtain further explanations or clarifications, where necessary.

The proceedings and resolutions reached at each Board meeting are documented in the minutes and signed by the Deputy Chairman of the next Board meeting. Besides Board meetings, the Board exercises control on matters that require Board’s approval through circulation of Directors’ Resolutions. These documents are kept at the registered office.

All Directors have access to all information within the Company as well as the advice and services of the Company Secretaries who are qualified professionals, whether as a full Board or in their individual capacity to assist them in their decision making. When necessary, Directors may also obtain independent professional advice at the Company’s expense to enable the directors to discharge their duties with adequate knowledge on the matters being deliberated.

A.3 Directors’ Training and Continuing Education

All the Directors appointed to the Board have completed the Mandatory Accreditation Program as prescribed by the Listing Requirements of Bursa Malaysia Securities Berhad. The Directors remain committed to undergoing further continuing education training programs to upgrade and enhance their business acumen and professionalism in discharging their duties to the Group.

At every Board meeting, all Directors were briefed on the latest developments of the Group’s business and operations to enhance and ensure that they have a comprehensive understanding on the Group’s operations to enable them to discharge their responsibilities effectively and to keep abreast with developments in the market place. For any new appointees to the board, a familiarization program on operations of the Group will be arranged for.

16


Corporate Governance Statement (cont’d) The following Board members have attended relevant courses/seminars during the financial year ended 31 December 2015 as detailed below:

Name of Directors Courses Attended

Yong Keang Cheun• Bank of Singapore Market Outlook • Regional Corporate Outlook 2015 • Property 365 e-market place

Yong Kian Keong • Property 365 e-market place Chew See Chiew • Property 365 e-market place

Hoe Kah Soon • Bank of Singapore Market Outlook • Credit Suisse Funds Seminar • Property 365 e-market place

Ooi Bee Bee • Property 365 e-market placeNgian Siew Siong • Mandatory Accreditation Programme for Directors of PLCs

Chow Chee Keng

• Regional Corporate Outlook 2015 • GST Health Check – Detecting and Preventing Unintentional Error • Malaysia GST Compliance Conference: Unraveling Post-Implementation

Complexities

A.4 Re-election of Directors

In accordance with the Company’s Articles of Association, an election of directors shall take place each year. All Directors shall retire from office once at least in each three (3) years, but shall be eligible for re-election.

Any Director appointed during the year is required to retire and seek re-election by shareholders at the first AGM following his appointment. Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with the Section 129 (6) of the Companies Act, 1965.

A.5 Reinforce Independence

The Non-Executive Directors are not employees of the Group and do not participate in the day to day management of the Group. The Non-Executive Directors are independent directors and are able to express their views without any constraint. This strengthens the Board which benefits from the independent views expressed before any decisions are taken.

None of the current independent board members had served the company for more than nine (9) years as per the recommendations of the Code. Should the tenure of an independent director exceed nine (9) years, shareholders’ approval will be sought at a General Meeting or if the services of the director concerned are still required, the director concerned will be re-designated as a non-independent director.

B. Directors’ Remuneration

The determination of the remuneration for Non-executive Directors is decided by the Board as a whole. The remuneration of Executive Directors is the purview of the Remuneration Committee who will evaluate and recommend to the Board. Individual directors concerned have abstained from discussing and deciding on their own remuneration.

The Directors’ fee including Non-Executive Directors if any, have to be endorsed by the Board and would seek approval from the shareholders of the Company at the Annual General Meeting. The compensations for Non-Executive Directors are linked to their experience and level of responsibility taken.

B.1 Remuneration Committee

In line with the Best Practices of the Code, the Board has established a Remuneration Committee with a majority of them being independent non-executive directors.

17

Annual Report 2015

Corporate Governance Statement (cont’d) Directors’ Remuneration (cont’d)

The present members of the Remuneration Committee of the Company are:

Chairman

Chew See Chiew (Independent Non-Executive Director)

Members

Ooi Bee Bee (Independent Non-Executive Director) Yong Keang Cheun (Non Independent Executive Director)

The Remuneration Committee is principally responsible for assessing and reviewing the remuneration packages of the Executive Directors including their fees and subsequently furnishes recommendations to the Board on specific adjustments in remuneration to commensurate with the respective contributions of the Directors.

The functions of the Remuneration Committee are:

a) Recommend to the board the framework of executive remuneration and its cost, and the remuneration package for each executive director, taking into account the performance of the individual, the inflation price index and information from independent sources on the rates of salary for similar jobs in selected group of comparable companies.

b) To reimburse reasonable expenses incurred by the directors in course of their duties as directors.

c) To review and determine the bonus scheme for executive directors depending on various performance measurements of the Group.

d) To review and determine the other benefits in kind for the executive directors.

e) To review annually the executive directors’ service contracts.

B.2 Details of Directors’ Remuneration

The details of directors’ remuneration for the financial year ended 31 December 2015 are as follows:

Category Fee RM

Salaries & other emoluments

RM

Total RM

Executive Directors

28,000 2,066,400 2,094,400

Non-executive Directors

111,500 - 111,500

Total 139,500 2,066,400 2,205,900

The Directors’ remuneration within the following bands is as follows:

Range of Remuneration Number of Executive Directors Number of Non-Executive Directors

Below RM50,000 - 4

RM700,001 – RM750,000 1 -

RM1,550,001 – RM1,650,000 1 -

The Board is of the view that the detailed remuneration disclosure of each director is not disclosed as the information will not add significantly to the understanding and evaluation of the Group’s corporate governance.

18


Corporate Governance Statement (cont’d) C. Communication with Shareholders and Investors

C.1 Relationship with Shareholders

The Board recognises the need for transparency and accountability to the Company’s shareholders as well as regular communication with its shareholders, stakeholders and investors on the performance and major developments in the Company. The Company ensures that timely releases of the quarterly financial results, press releases and corporate announcements are made to its shareholders and investors, which are clear, unambiguous, succinct, accurate and contains sufficient and relevant information.

Chairman shall inform shareholders of their right to demand a poll vote at each general meeting.

The Group also maintains a website www.ifcasoftware.com whereby information can be obtained.

C.2 Annual General Meeting

The Annual General Meeting (“AGM”) represents the principal forum for dialogue and interaction with all the shareholders of the Company. At the AGM, the Board provides opportunities for shareholders to participate in the question and answer session where all Directors as well as the external auditors are present to respond to the shareholders’ questions during the AGM. The Company values feedback from its shareholders and encourages them to actively participate in discussion and deliberations.

D. Accountability and Audit

D.1 Financial Reporting

The Board has a responsibility and aims to provide and present a fair and balanced assessment of the Group’s financial performance and its prospects. The financial statements of the Company are drawn up in accordance with the requirements of the applicable accounting standards in Malaysia and provision of the Companies Act, 1965.

With assistance from the Audit Committee, the Board oversees the Group’s financial reporting processes and the quality of its financial reporting.

D.2 Internal Control

The Board is overall responsible for maintaining a sound system of internal controls and risk management practises to safeguard shareholders’ investment and Group’s assets. The Statement on Risk Management and Internal Control as set out on page 25-26 of the Annual Report provides an overview of the state of internal controls within the Group.

D.3 Relationship with Auditors

Through the Audit Committee, the Group has established a transparent and appropriate relationship with the Group’s auditors, in seeking professional advice and ensuring compliance with the applicable accounting standards and statutory requirements in Malaysia. From time to time, the auditors will highlight to the Audit Committee and the Board of Directors on matters that require the Audit Committee’s and Board’s attention and action. The Audit Committee has been explicitly accorded the power to communicate directly with both the External Auditors and Internal Auditors. Annual appointment or reappointment of the external auditor is via shareholders’ resolution at the AGM on the recommendation of the Board.

E. Statement of Compliance with the Code

The Board is committed to ensure high standards of corporate governance and to their best ability and knowledge complied with the Best Practices set out in the Code.

19

Annual Report 2015

Additional Compliance Information (Pursuant to Bursa Malaysia ACE Market Listing Requirements)

1. Share Buy-Back

During the financial year 2015, the Company bought back 10,000 shares from the open market as follows:

Month No. of Shares Consideration Highest Price Lowest Price Weighted Average

(RM) (RM) (RM) Price (RM)

November 10,000 9,825 0.975 0.975 0.975

All the shares purchased by the Company were retained as treasury shares. There were no treasury shares resold or cancelled during the financial year. As at 31 December 2015, a total of 10,000 shares were held as treasury shares.

2. Options, Warrants or Convertible Securities

During the financial year, there were total 90,812,400 units of warrants converted into ordinary shares.

3. Depository Receipt Programme

There were no Depository Receipt Programme sponsored by the Company during the financial year.

4. Imposition of Sanctions and/or Penalties

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

5. Non-Audit Fee

There was non-audit fees amounting to RM 30,000.00 paid to the External Auditors, Messrs UHY during the financial year ended 31 December 2015.

6. Variation in Results

There were no variances of 10% or more between the audited results for the financial year and the unaudited results announced.

7. Profit Guarantee

There was no profit guarantee given by the Company during the financial year.

8. Material Contract

During the financial year under review, there was no material contract other than those in the ordinary course of business entered into by the Company and/or its subsidiaries involving Directors and/or major shareholders’ interest.

9. Revaluation Policy of Landed Properties

The revaluation policy in relation to landed and investment properties is set out in Note 3(e) of the notes to the Financial Statements on page 66 to 67 of this Annual Report.

10. Recurrent Related Party Disclosures (“RRPTS”) of a Revenue or Trading Nature

Disclosure to this effect was set out in Note 35 of the Financial Statements on Page 111 to 112 of thisAnnual Report.

11. Share Options Offered To Non-executive Directors

There were no share options granted to non-executive directors during the year ended 31 December 2015.

20


Additional Compliance Information (Cont’d) (Pursuant to Bursa Malaysia ACE Market Listing Requirements)

12. Corporate Social Responsibility (“CSR”)

The CSR Disclosure statement was set out on Page 27 to 28 of this Annual Report.

13. Utilisation of Rights Issue Proceeds

There were no rights issue proceeds during the year ended 31 December 2015.

21

Annual Report 2015

AUDIT COMMITTEE REPORT 1. Membership and Attendance

During the financial year ended 31 December 2015, the Audit Committee met five (5) times and the details of attendance of each member are as follows:-

Name of Director No. of meetings attended Chew See Chiew (Chairman / Independent Non-Executive Director) 5/5 Hoe Kah Soon (Member / Independent Non-Executive Director) 5/5 Ooi Bee Bee (Member / Independent Non-Executive Director) 5/5

2. Summary of Activities

The Audit Committee carried out its duties as set out in the terms of reference below for the year 2015. The principal activities undertaken by the Audit Committee during the financial period were as follows:- • Reviewed the unaudited quarterly financial results, cash flows and financial positions and recommended

to the Board for consideration and approval for announcement to the public.

• Reviewed the annual audited financial statement, Directors’ and Auditors’ Reports and other significant accounting issues arising from the financial year ended 31 December 2015 audit.

• Reviewed the external auditors’ plan for the year ended 31 December 2015.

• Reviewed the internal audit reports and audit status presented by the Internal Auditors.

• Reviewed the Corporate Governance Statement, Audit Committee Report and Statement on Risk Management and Internal Control and recommended to the Board for consideration and approval for inclusion in the 2015 annual report.

• Conducted two (2) meetings with the External Auditors without the presence of executive directors and management.

3. Internal Audit Function The Group’s internal audit function are outsourced to an independent professional firm, Crowe Horwath Governance Sdn Bhd, which reports to the Audit Committee and assists the Audit Committee in discharging its duties and functions by providing an independent and objective assessment on the organisation’s management, operations records, accounting policies and internal controls. The Audit Committee adopted a risk based approach to identify any major deficiency in the internal controls and aligned the year’s Internal Audit Plan to this approach. During the year under review, the Internal auditor: I. Reviewed the adequacy and effectiveness of internal controls over the business operations of the

subsidiaries located in Johor Bahru and Penang. II. Followed up on findings and ensure that management action plans from previous reviews are carried out.

The costs incurred on the outsourced internal audit function for the financial year ended 31 December 2015 was RM30,000.00. (2014 : RM 30,000.00)

TERMS OF REFERENCE 1. Objective

The principal objective of the Committee (as a committee of the Board) is to assist the Board in the effective discharge of its fiduciary responsibilities for corporate governance, financial reporting and internal control.

2. Reporting Responsibility The Committee will report to the Board on the nature and extent of the functions performed by it and may make such recommendations to the Board on any audit and financial reporting matters as it may think fit.

22


AUDIT COMMITTEE REPORT (Cont’d)

3. Composition of Audit Committee

The Audit Committee (“Committee”) shall be appointed by the Board of Directors (“Board”), and shall fulfill the following requirements:

I. The Committee shall consist of no fewer than three (3) members;

II. All members of the Committee shall be non-executive director, with a majority of them being independent directors;

III. All members of the Committee should be financially literate;

IV. No alternate director shall be appointed as a member of the Committee;

V. The appointment of a Committee member terminates when the member ceases to be a Director;

VI. In the event that a member of the Committee resigns, dies 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 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;

VII. The Chairman of the Committee shall be an Independent Non-Executive Director appointed by the Board and shall report on each meeting of the Committee to the Board;

VIII. The Board shall review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.

4. Authority of the Committee

The Committee in the course of discharging its duties, is authorised to:

I. investigate any matter within its terms of reference;

II. have the Internal Audit Function report directly to the Committee;

III. have the resources which are required, at the Company’s expense to perform its duties including appointing an internal audit outsourcing party;

IV. have full and unrestricted access to any information pertaining to the Company and its subsidiary companies for the purpose of discharging its functions and responsibilities;

V. have direct communication channels with the external auditors, person(s) carrying out the internal audit function of activity and any employee(s) of the Group;

VI. obtain outside legal or other independent professional advice it considers necessary and reasonable for the performance of its duties;

VII. convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary;

VIII. have the right to pass resolutions by a simple majority of vote from the Committee and that the Chairman shall have the casting vote should a tie arise;

IX. The Chairman of the Audit Committee shall have access on a continuous basis to senior management, such as the Chairman, the Chief Executive Officer, the Head of Finance, the Head of Internal Audit and the external auditors in order to be keep informed of matters affecting the Company.

23

Annual Report 2015


5. Duties and Responsibilities

The duties and responsibilities of the Committee shall be:

I. To consider the nomination or appointment of the external auditors, the terms of engagement, the audit fee and any questions of resignation or dismissal;

II. To review the external auditors’ audit plan and scope of the annual audit or other examinations for the Company and the Group;

III. To review the external auditors and/or internal auditors’ audit report, management letter and management’s response;

IV. To review with the external auditors with regard to problems and reservations arising from interim and final audits and any matter the external auditors may wish to discuss (in the absence of management where necessary);

V. To determine the extent of cooperation and assistance given by the employees to the external auditors;

VI. To review any financial information for publication, including the quarterly and annual financial statements before submission to the Board, focusing on:

a. Any changes in or implementation of major accounting policies changes and practices

b. Significant and unusual events

c. Significant adjustments and issues arising from the audit

d. The going concern assumption

e. Compliance with approved accounting standards and other legal requirements

VII. To review the adequacy of independence, competency, scope, functions and resources of the internal audit function and that it has the necessary authority to carry out its work;

VIII. To review the internal audit program, processes, scope, and results of the audit program, processes or investigation undertaken and ensure that appropriate action is taken on the recommendations of the internal audit function;

IX. To review the assessment of the performance of members of the internal audit function, approve the appointment or termination of Head of the internal audit function and provide resigning member an opportunity to submit his/her reasons for doing so and /or the performance of the outsource internal audit service provider;

X. To review any related party transaction entered by the Group to ensure it is within normal commercial terms and any potential conflict of interest situations that may arise within the Company or Group including any transactions, procedure or course of conduct that raises questions of Management integrity;

XI. To consider the major findings of internal investigations authorised by the Board and Management’s response;

XII. To report to the Bursa Malaysia Securities Berhad where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements;

XIII. To review the adequacy of the Risk Management policies and procedures;

XIV. To undertake any other activities as may be agreed to by the Committee and the Board.

24



6. Meetings and Quorum

The Committee shall meet at least four (4) times a year or more frequently as circumstances dictate.

The Committee shall convene a meeting if requested to do so by any member, the Board or the internal orexternal auditors to consider any matter within the scope and responsibilities of the Committee.

The members of the Committee may participate in a meeting by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting.

All decisions shall be decided on a show of hands or by a majority of votes.

A resolution in writing signed and approved by a majority of the Committee and who are sufficient to form a quorum shall be valid and effective as if it had been passed at a meeting of the Committee duly called and constituted.

The Head of Finance and Head of Internal Audit Function and representatives of the external auditors shall normally be invited to attend the meetings. The Committee may also invite non-member directors and employees to attend any of its’ meeting to assist in resolving and clarifying matters, where necessary.

The Committee shall meet with the external auditors at least twice a year, without executive board members present.

The majority of members present must be independent non-executive directors to form a Quorum and the number of independent non-executive directors shall not be less than two (2).

25

Annual Report 2015

Statement of Risk Management & Internal Control

The Code requires listed companies to maintain a sound system of internal controls to safeguard shareholders’ investments and the Group’s assets. The Board is pleased to include a statement on the state of the Group’s risk management and internal control during the financial year under review. The statement is prepared in accordance with Paragraph 15.26(b) of the Listing Requirements, Paragraph 15.26(b) and released Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers.

Board Responsibility

The Board acknowledges its overall responsibility for reviewing the adequacy and integrity of the Group’s system of internal controls, identifying principal risks and establishing an appropriate control environment and framework to manage risks. However, the effectiveness of the Group’s system of internal control is designed to manage rather than to eliminate the risk of failure to achieve business objectives. Accordingly, the Group’s system of internal control can only provide reasonable but not absolute assurance against material misstatement or loss.

The Board either directly or via the Audit Committee, have an on-going process for identifying, evaluating and managing the significant risks of the Group with the management.

The Board has received assurance from the Managing Director and Chief Executive Officer that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group.

The Board is of the view that the risk management and internal control system in place for the year under review and up to the date of issuance of the financial statements is adequate and effective to safeguard the shareholders’ investment, the interests of customers, regulators, employees and the Group’s assets.

Audit Committee

The Audit Committee reviews the adequacy and effectiveness of the Group’s systems of internal control as well as reviewing issues identified by the internal auditors. The Audit Committee also ensures that there is continuous effort by management to address and resolve areas where control weaknesses exist.

All audit findings, recommendations and management actions are rigorously deliberated upon during Audit Committee meetings before reporting to the Board. Quarterly reports to the Audit Committee track the progress towards completion of all corrective actions taken on issues highlighted by the Group Internal Audit.

The Audit Committee reviews the quarterly results of the Group and if satisfied recommends adoption of such results to the Board.

Internal Audit

The Group outsources the internal audit function to an independent professional firm. The firm is appointed by Audit Committee and reports directly to the Audit Committee. Its role is to provide the Audit Committee with regular assurance on the continuity, integrity and effectiveness of the internal control system through regular monitoring and review of the internal control framework and management processes.

The internal audit firm prepares audit plans for presentation to the Audit Committee for approval wherein the scope of work encompasses management and operational audit of functions in the Group.

During the financial year under review, an internal audit and a follow-up review were performed on Human Resources Department and the area of Information Technology General Control. Recommendations were made to improve the system of internal controls to the Audit Committee on the mentioned areas.

26


Statement of Risk Management & Internal Control (cont’d)

Other Key Internal Control Elements

• The Group has in place an organisational structure that is aligned to business and operational requirements, with clearly defined lines of accountability.

• Clear delegation of authority through well-defined limit of authority and approval.

• The Board meets on a regular basis to review the performance and operations of the Group.

• Active involvement by the Chief Executive Officer and Executive Director in the day-to-day business operations of the Group including weekly operational and management meetings to identify, discuss and resolve business and operational issues.

• Monthly review of management accounts by key personnel including the Chief Executive Officer and Executive Director. The management accounts are also presented to the Board and Audit Committee during the respective meetings on quarterly basis.

• Provision of training and development to enhance the competitiveness and capability of our staff members.

Board Assurance and Limitation

For the financial year under review, there were no significant internal control deficiencies or material weaknesses resulting in material losses or contingencies requiring disclosure in the Annual Report. The Board is of the view that the existing system of the internal control is adequate. Nevertheless, the Board recognises that the development of internal control system is an ongoing process. Therefore, in striving for continuous improvement, the Board will continue to take appropriate action plans to further enhance the Group’s system of internal control.

Review of the Statement by External Auditors

The external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the annual report of the Group for the year ended 31 December 2015 and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and effectiveness of the risk management and internal control system.

This statement is made in accordance with the resolution of the Board of Directors dated 19 April 2016.

27

Annual Report 2015

Corporate Social Responsibility IFCA Group believes that effective corporate social responsibility can deliver benefits to its business and, in turn, to its shareholders, by enhancing reputation and business trust, relationship with regulators, staff motivation and attraction to talent, customer preference and loyalty, the goodwill of local communities and long term shareholder value.

The Group will always endeavor to discharge its corporate social responsibility diligently to the environment, the marketplace, its employees, the shareholders, the community and other stakeholders alike.

BUSINESS ENVIRONMENT

Although the Group does not operate in an environmentally sensitive business, we recognize its duty to minimize its impact on the environment. The Group has identified opportunities to reuse and recycle or minimize the resources it consumes as the Group believes in caring for the environment through efficient utilization and recycling of resources.

During the financial year, the management encourages staff to recycle paper and reduce the storage of paper and documents. We also encourage paperless meetings. We educated the staff on the importance of energy conservation such as instilling good habits of switching off lights and air-conditioning during lunch time or when they are out from office. To maximize the benefits of ICT and to reduce papers consumption, the Group had been practicing e-leave and e-claims in its human resources administration.

MARKETPLACE

IFCA Group employees is expected to maintain the highest standards of propriety, integrity and conduct in all their business relationships and the Group is held to the same standard in its compliance with all applicable legal and regulatory requirements.

We ensure that stakeholders are kept informed of the Group’s performance and have open channels for dialogues during our annual general meetings and feedback on our corporate website.

The Group will also support the market with good products, engaging in ethical procurement practices, and maintaining quality of its service and business offerings.

WORKPLACE

The Group considers it’s dedicate and hardworking employees as the most valuable asset. We believe training and development is important in developing and upgrading skills, knowledge and attitudes to ensure optimal performance. We constantly provide in-house and external training programs to enhance and increase employees’ job-related skills, knowledge and experience.

We also continually reward and recognize employees for their outstanding efforts and performance during the year.

We strive to maintain a safe and healthy working environment for all the employees.

28


DIVERSITY The Group currently does not have a policy on diversity of the workforce in terms of gender, age and ethnicity. However, the Board provides equal opportunity to suitable candidates who has the skills, experience, competency and other qualities regardless of gender. The profile of the Group’s workforce as at 31 December 2015 are as follows:

Age Group 20 to 29 30 to 39 40 to 49 50 and above Grand TotalFemale 117 69 28 10 224Top Management - - 1 1 2Senior Management - 5 2 1 8

Others 117 64 25 8 214Male 167 138 48 21 374Top Management - 2 4 8 14Senior Management - 12 16 4 32

Others 167 124 28 9 328Grand Total 284 207 76 31 598

37.46%

62.54%

GENDER DIVERSITY

Female

Male

38.29%

45.48%

1.51%

11.37% 3.34%ETHNIC DIVERSITY

Chinese

Foreigner

Indian

Malay

Other

29

Annual Report 2015

Financial Statements Page

Director’s Report 30 – 37

Statement by Directors 38

Statutory Declaration 39

Independent Auditors’ Report to the Members 40 – 42

Statements of Financial Position 43 – 44

Statements of Profit or Loss and Other Comprehensive Income 45 – 46

Statements of Changes in Equity 47 – 50

Statements of Cash Flows 51 – 53

Notes to the Financial Statements 54 – 130

Supplementary Information – Breakdown of Retained Profits into Realised and Unrealised

131

30


Company No. 453392 T

- 1 -

IFCA MSC BERHAD (Incorporated in Malaysia)

DIRECTORS’ REPORT

The Directors have pleasure in submitting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2015.

Principal Activities

The Company principal activities of the Company are the research and development of enterprise-wide business solutions.

The principal activities of the subsidiary companies are disclosed in Note 7 to the financial statements.

There have been no significant changes in the nature of these principal activities of the Company and its subsidiary companies during the financial year.

Financial Results

Group CompanyRM RM

Net profit for the financial year 21,532,961 2,086,484

Profit attributable to:Owners of the parent 21,603,167 2,086,484 Non-controlling interests (70,206) -

21,532,961 2,086,484

Reserves and Provisions

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

31

Annual Report 2015


- 2 -

Dividends

Since the end of the last financial year, the Company paid:

RM

A final single-tier dividend of RM0.01 per ordinary share in respect of the financial year ended 31 December 2014 on 30 July 2015 5,569,793

The Directors recommend the payment of a final single tier dividend of RM0.01 per ordinary share in respect of the current financial year ended 31 December 2015, subject to the approval of the shareholders at the forthcoming Annual General Meeting. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2016.

Issue of Shares and Debentures

During the financial year, the Company increased its issued and paid-up share capital from 479,741,700to 570,554,100 through the creation of 90,812,400 ordinary shares of RM0.10 each for cash arising from the exercise of warrants.

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

There was no issuance of debentures during the financial year.

Treasury Shares

During the financial year, the Company repurchased 10,000 ordinary shares of RM0.10 each of its issued share capital from the open market. The average price paid for the shares repurchased was RM0.9821 per share. The total consideration paid for the repurchase, including transaction costs, was RM9,821. The repurchased transactions were financed by internal generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

As at 31 December 2015, the Company held 10,000 treasury shares out of the total 570,554,100 issued ordinary shares. Further relevant details are disclosed in Note 16 to the financial statements.

32



- 3 -

Warrant Reserves

The warrants entitle the registered holder, at any time within a period of 5 years commencing on and including the issue date and expiring on 15 February 2016 to subscribe for one new ordinary share of RM0.10 each in the Company at the exercise price of RM0.10 per ordinary share for every warrant held.

As at 31 December 2015, the total numbers of Warrants that remain unexercised were 22,849,900 (2014: 113,662,300).

Options Granted Over Unissued Shares

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

Directors

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

Yong Keang Cheun Yong Kian Keong Hoe Kah Soon Chew See Chiew Ooi Bee Bee Ngian Siew Siong (appointed on 27.7.2015) Chow Chee Keng (appointed on 1.1.2016)

Directors’ Interests

Details of holdings and deemed interests in the shares and warrants of the Company and of its related corporations (other than wholly-owned subsidiary companies) of those who were directors at the end of the financial year, according to the register of directors’ shareholdings required to be kept under Section 134 of the Companies Act, 1965, are as follows:

At 1.1.2015 Addition Disposed At 31.12.2015

Interests in the Company Direct Interests Yong Keang Cheun 45 3,650,000 - 3,650,045 Yong Kian Keong 1,000,365 - - 1,000,365 Ooi Bee Bee 4,998,648 191,900 800,000 4,390,548 Ngian Siew Siong - 130,000 - 130,000

Number of Ordinary Shares of RM 0.10 each

33

Annual Report 2015


- 4 -

Directors’ Interests (Cont’d)

Details of holdings and deemed interests in the shares and warrants of the Company and of its related corporations (other than wholly-owned subsidiary companies) of those who were directors at the end of the financial year, according to the register of directors’ shareholdings required to be kept under Section 134 of the Companies Act, 1965, are as follows: (Cont’d)


Interests in the Company


Indirect Interests Yong Keang Cheun (a) 209,605,008 - - 209,605,008 Yong Kian Keong (b) 208,604,688 3,650,000 - 212,254,688


Interests in Subsidiary Companies Property365 Sdn Bhd Direct Interests Yong Keang Cheun 70,000 - - 70,000 Yong Kian Keong 30,000 - - 30,000


IFCA Solutions Sdn Bhd Direct Interests Yong Keang Cheun 70,000 - - 70,000 Yong Kian Keong 30,000 - - 30,000

IFCA Systems (JB) Sdn Bhd Direct Interests Yong Keang Cheun 1 - - 1 Yong Kian Keong 1 - - 1

IFCA Consulting (Sarawak) Sdn Bhd Direct Interests Yong Keang Cheun 8 - - 8 Yong Kian Keong 2 - - 2

34



- 5 -


Details of holdings and deemed interests in the shares and warrants of the Company and of its related corporations (other than wholly-owned subsidiary companies) of those who were directors at the end of the financial year, according to the register of directors’ shareholdings required to be kept under Section 134 of the Companies Act, 1965, are as follows: (Cont’d)


Interests in Subsidiary Companies (Cont'd)


IFCA Systems (Penang) Sdn Bhd Direct Interests Yong Keang Cheun 8 - - 8 Yong Kian Keong 2 - - 2

Network Online Sdn Bhd Direct Interests Yong Keang Cheun 70,000 - - 70,000 Yong Kian Keong 30,000 - - 30,000


Interests in the CompanyDirect InterestsYong Keang Cheun 2,000,015 - 2,000,000 15 Yong Kian Keong 55 - - 55 Ooi Bee Bee 191,950 - 191,900 50

Indirect InterestsYong Keang Cheun (a) 55 - - 55 Yong Kian Keong (b) 2,000,015 - 2,000,000 15

Number of Warrants of RM 0.10 each

Note:

(a) By virtue of his substantial shareholdings in IFCA Software (Asia) Sdn Bhd and the shareholdings of his brother, Yong Kian Keong, Yong Keang Cheun is deemed to have an interest in the shares in the Company to the extent that IFCA Software (Asia) Sdn Bhd and Yong Kian Keong have an interest.

(b) By virtue of his substantial shareholdings in IFCA Software (Asia) Sdn Bhd and the shareholdings of his brother, Yong Keang Cheun, Yong Kian Keong is deemed to have an interest in the shares in the Company to the extent that IFCA Software (Asia) Sdn Bhd and Yong Keang Cheun have an interest.

35

Annual Report 2015


- 6 -


By virtue of their interests in shares in the Company, Yong Keang Cheun and Yong Kian Keong are also deemed interested in shares in all the subsidiary companies to the extent of the Company's interests in the respective subsidiary companies.

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

Directors’ Benefits

Since the end of the previous financial year, no Director of the Company has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in 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.

Neither during nor at the end of the financial year, was the Company a party to any arrangement whose object was to enable the Directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate other than those arising from the warrants.

Other Statutory Information

(a) 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:

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

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

36



- 7 -

Other Statutory Information (Cont’d)

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

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

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

(iii) not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading; or

(iv) 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.

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

(i) 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 liabilities of any other person; or

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

(d) In the opinion of the Directors:

(i) 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 will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due;

(ii) the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature, except as disclosed in the notes to the financial statements; and

(iii) 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 financial year in which this report is made.

Subsequent Events

The subsequent events are disclosed in Note 39 to the financial statements.

37

Annual Report 2015


- 8 -

Auditors

The Auditors, Messrs UHY, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors dated 19 April 2016.

YONG KEANG CHEUN YONG KIAN KEONG

KUALA LUMPUR

38



- 9 -


STATEMENT BY DIRECTORS Pursuant to Section 169(15) of the Companies Act, 1965

We, the undersigned, being two of the Directors of the Company, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 43 to 130 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 December 2015 and of their financial performance and the cash flows for the financial year then ended.

The supplementary information set out in Note 41 to the financial statements on page 131 have been compiled in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors dated 19 April 2016.

YONG KEANG CHEUN YONG KIAN KEONG

KUALA LUMPUR

39

Annual Report 2015


- 10 -


STATUTORY DECLARATION Pursuant To Section 169(16) Of The Companies Act, 1965

I, Chow Chee Keng, being the Director primarily responsible for the financial management of IFCA MSC Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 43 to 131 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 19 April 2016

) ) )

CHOW CHEE KENG

Before me,

No. W 521 MOHAN A.S. MANIAM

COMMISSIONER FOR OATHS

40

IFCA MSC BERHAD (Co. No. 453392-T)- 11 -

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF IFCA MSC BERHAD (Company No.: 453392-T) (Incorporated in Malaysia)

Report on the Financial Statements

We have audited the financial statements of IFCA MSC Berhad, which comprise statements of financial position as at 31 December 2015 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 43 to 130.

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 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.

41

Annual Report 2015- 12 -

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF IFCA MSC BERHAD (CONT’D) (Company No.: 453392-T) (Incorporated in Malaysia)

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 December 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.

Report on Other Legal and Regulatory Requirements

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

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

(b) We have considered the financial statements and the auditors’ reports of all the subsidiary companies of which we have not acted as auditors, which are indicated in Note 7 to the financial statements.

(c) We are satisfied that the financial statements of the subsidiary companies 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 audit reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

42

IFCA MSC BERHAD (Co. No. 453392-T)- 13 -

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF IFCA MSC BERHAD (CONT’D) (Company No.: 453392-T) (Incorporated in Malaysia)

Other Reporting Responsibilities

The supplementary information set out in Note 41 on page 131 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures 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.

UHY Firm Number: AF 1411 Chartered Accountants

CHONG HOU NIAN Approved Number: 3105/11/16 (J) Chartered Accountant

KUALA LUMPUR 19 April 2016

43

Annual Report 2015

Company No. 453392 T - 14 -


STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2015

2015 2014 2015 2014Note RM RM RM RM

Non-Current AssetsProperty, plant and equipment 4 9,412,139 9,169,459 5,361,728 5,101,102 Investment properties 5 293,100 287,100 210,000 204,000 Deferred development costs 6 19,559,761 13,256,866 - - Investment in subsidiaries 7 - - 8,255,289 8,255,289 Other investments 8 275,674 201,674 165,000 91,000 Amount due from subsidiaries 9 - - 13,903,367 6,494,667

29,540,674 22,915,099 27,895,384 20,146,058

Current AssetsTrade receivables 10 21,493,036 16,912,452 231,268 901,488 Other receivables 11 951,934 1,521,402 92,489 187,246 Other current assets 12 522,118 1,476,347 280,040 138,215 Amount due from subsidiaries 9 - - 1,536,576 8,600,602 Tax recoverable 900,681 - 24,874 - Fixed deposits with licensed banks 13 26,008,548 6,770,052 23,008,548 6,748,102 Cash and bank balances 41,387,267 43,026,299 7,229,611 18,908,564

91,263,584 69,706,552 32,403,406 35,484,217

Total Assets 120,804,258 92,621,651 60,298,790 55,630,275

Group Company

44


Company No. 453392 T - 15 -

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


STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2015 (CONT’D)

2015 2014 2015 2014Note RM RM RM RM

EquityShare capital 14 57,055,410 47,974,170 57,055,410 47,974,170 Share premium 15 9,590,868 7,221,849 9,590,868 7,221,849 Treasury shares 16 (9,821) - (9,821) - Share application monies 17 - 343,020 - 343,020 Warrant reserves 18 596,084 2,965,103 596,084 2,965,103 Other reserves 19 (1,687,475) (282,353) - -

Retained earnings/ (Accumulated losses) 28,929,058 12,895,684 (8,166,438) (4,683,129) Equity attributable to owners of the parent 94,474,124 71,117,473 59,066,103 53,821,013 Non-controlling interests 369,932 440,138 - -

94,844,056 71,557,611 59,066,103 53,821,013

Non-Current LiabilitiesOther liabilities 20 255,177 85,972 - - Finance lease payables 21 643,468 45,110 322,269 4,935 Deferred taxation 22 2,883,299 1,738,721 99,447 108,154

3,781,944 1,869,803 421,716 113,089

Current LiabilitiesTrade payables 23 1,194,195 1,856,453 - - Other payables 24 9,261,694 9,395,998 711,143 1,393,889 Other liabilities 20 10,807,407 7,347,550 - - Amounts due to subsidiaries 9 - - - 255,360 Finance lease payables 21 201,565 145,309 99,828 13,686 Tax payable 713,397 448,927 - 33,238

22,178,258 19,194,237 810,971 1,696,173 Total Liabilities 25,960,202 21,064,040 1,232,687 1,809,262

Total Equity and Liabilities 120,804,258 92,621,651 60,298,790 55,630,275

Group Company

45

Annual Report 2015

Company No. 453392 T - 16 -


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

2015 2014 2015 2014Note RM RM RM RM

Revenue 25 101,623,281 89,241,015 7,375,203 7,477,439 Other income 26 3,803,133 2,129,231 6,295,720 2,935,469 Employee benefits expense 27 (44,427,862) (32,665,395) (5,169,476) (4,956,730) Changes in inventories (7,203,064) (7,786,003) (506,531) (592,805) Depreciation of property, plant and equipment (1,284,337) (1,084,831) (415,603) (281,865) Amortisation of development costs (1,807,464) (1,003,510) - - Other expenses (24,920,629) (23,430,496) (4,649,008) (3,038,361) Profit from operations 25,783,058 25,400,011 2,930,305 1,543,147 Finance costs 29 (29,818) (16,326) (20,472) (1,423) Profit before taxation 30 25,753,240 25,383,685 2,909,833 1,541,724 Taxation 31 (4,220,279) (3,823,920) (823,349) (310,400) Profit for the financial year 21,532,961 21,559,765 2,086,484 1,231,324

Other comprehensive income:Profit for the financial year 21,532,961 21,559,765 2,086,484 1,231,324 Exchange translation difference for foreign operation (1,405,122) (459,126) - - Total comprehensive income for the financial year

Group Company

20,127,839 21,100,639 2,086,484 1,231,324

46


Company No. 453392 T - 17 -



STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)

2015 2014 2015 2014Note RM RM RM RM

Profit for the financial year attributable to:Owners of the parent 21,603,167 20,769,693 2,086,484 1,231,324 Non-controlling interests (70,206) 790,072 - -

21,532,961 21,559,765 2,086,484 1,231,324

Total comprehensive income attributable to: Owners of the parent 20,198,045 20,310,567 2,086,484 1,231,324 Non-controlling interests (70,206) 790,072 - -

20,127,839 21,100,639 2,086,484 1,231,324

Earnings per share attributable to owners of the parent (sen per share) 32 - Basic 3.97 4.58 - Diluted 3.67 3.77

Group Company

47

Annual Report 2015

Com

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No.

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48


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49

Annual Report 2015

Com

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51

Annual Report 2015

Company No. 453392 T - 22 -

IFCA MSC BERHAD(Incorporated in Malaysia)

STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

2015 2014 2015 2014RM RM RM RM

Cash flows from operating activitiesProfit before taxation 25,753,240 25,383,685 2,909,833 1,541,724

Adjustments for:Depreciation of property, plant and equipment 1,284,337 1,084,831 415,603 281,865 Amortisation of development costs 1,807,464 1,003,510 - - Bad debts written off 121,400 46,380 - - Fair value gain of investment properties (6,000) (9,000) (6,000) (9,000) Impairment loss on: - trade receivables 412,490 1,250,072 - - - other investments - 97,975 - 97,975 Loss/(Gain) on disposal of property, plant and equipment 26,235 (110,678) - (115,000) Property, plant and equipment written off 75,535 107 42,067 107 Reversal of impairment loss on trade receivables (125,537) (12,962) - - Unrealised (gain)/loss on foreign exchange (264,526) 26,405 121,404 (25,898) Interest expense 29,818 16,326 20,472 1,423 Interest income (823,003) (455,195) (1,354,585) (1,024,675) Operating profit before working capital changes 28,291,453 28,321,456 2,148,794 748,521

CompanyGroup

52


Company No. 453392 T - 23 -


STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)

2015 2014 2015 2014Note RM RM RM RM

Changes in working capital: Receivables (3,729,766) (9,031,251) 572,314 (430,041) Payables 2,663,295 4,479,626 (682,745) 651,446 Subsidiaries - - (2,461) 5,774,277

(1,066,471) (4,551,625) (112,892) 5,995,682 Net cash generated from operations 27,224,982 23,769,831 2,035,902 6,744,203 Tax paid (3,963,170) (1,389,513) (890,168) (360,142) Tax refund 159,561 - - -

(3,803,609) (1,389,513) (890,168) (360,142) Net cash generated from operating activities 23,421,373 22,380,318 1,145,734 6,384,061

Cash flows from investing activitiesAcquisition of other investments (74,000) - (74,000) - Development costs incurred (7,452,422) (9,004,991) - - Increase in fixed deposit pledged to a licensed bank (45,810) (64,610) (67,760) (69,110) Interest received 823,003 455,195 686,445 391,667 Purchase of property, plant and equipment 4(b) (944,338) (974,976) (218,296) (182,851) Proceeds from disposal of property, plant and equipment 240,954 118,682 - 115,000

Placement of fixed deposits not for short-term funding requirements (2,124,236) (109,547) (124,236) (109,547) Net cash (used in)/generated from investing activities (9,576,849) (9,580,247) 202,153 145,159

Group Company

53

Annual Report 2015

Company No. 453392 T - 24 -



STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)

2015 2014 2015 2014RM RM RM RM

Cash flows from financing activitiesDividends paid (5,569,793) - (5,569,793) - Interest paid (29,818) (16,326) (20,472) (1,423) Share application moneies received - 343,020 - 343,020 Payments of finance lease payables (245,386) (259,874) (96,524) (33,873) Proceeds from issue of share capital 8,738,220 2,968,870 8,738,220 2,968,870 Purchase of treasury shares (9,821) - (9,821) - Net cash generated from financing activities 2,883,402 3,035,690 3,041,610 3,276,594

Net increase in cash and cash equivalents 16,727,926 15,835,761 4,389,497 9,805,814 Effects on foreign exchange rate changes (1,298,508) (501,988) - - Cash and cash equivalents at beginning of financial year 46,352,845 31,019,072 22,235,110 12,429,296 Cash and cash equivalents at end of financial year 61,782,263 46,352,845 26,624,607 22,235,110

Cash and cash equivalents comprises the following:Fixed deposits with licensed banks 26,008,548 6,770,052 23,008,548 6,748,102 Cash and bank balances 41,387,267 43,026,299 7,229,611 18,908,564

67,395,815 49,796,351 30,238,159 25,656,666 Less: Fixed deposit pledged to a licensed bank (136,870) (91,060) (136,870) (69,110) Less: Fixed deposit not for short- term funding requirements (5,476,682) (3,352,446) (3,476,682) (3,352,446)

61,782,263 46,352,845 26,624,607 22,235,110

Group Company

54


Company No. 453392 T - 25 -


NOTES TO THE FINANCIAL STATEMENTS

1. Corporate Information

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

The Company's principal place of business is located at Wisma IFCA, 19, Jalan PJU 1/42A, Dataran Prima, 47301 Petaling Jaya, Selangor Darul Ehsan whilst its registered office is located at 24B, Persiaran Zaaba, Taman Tun Dr. Ismail, 60000 Kuala Lumpur.

The principal activities of the Company are the research and development of enterprise-wide business solutions. The principal activities of its subsidiary companies are described in Note 7.

There have been no significant changes in the nature of these principal activities of the Company and its subsidiary companies during the financial year.

2. Basis of Preparation

(a) Statement of Compliance

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

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

Adoption of new and amended standards

During the financial year, the Group and the Company have adopted the following amendments to MFRSs issued by the Malaysian Accounting Standards Board (“MASB”) that are mandatory for current financial year:

Amendments to MFRS 119 Defined Benefits Plans: Employee Contributions Annual Improvements to MFRSs 2010 – 2012 Cycle Annual Improvements to MFRSs 2011 – 2013 Cycle

Adoption of above amendments to MFRSs did not have any significant impact on the financial statements of the Group and of the Company.

55

Annual Report 2015

Company No. 453392 T - 26 -

2. Basis of Preparation (Cont’d)

(a) Statement of Compliance (Cont’d)

Standards issued but not yet effective

The Group and the Company have not applied the following new MFRSs and amendments to MFRSs that have been issued by the MASB but are not yet effective for the Group and for the Company:

Effective date for financial periods

beginning on or after MFRS 14 Regulatory Deferral Accounts 1 January 2016 Amendments to MFRS 11 Accounting for Acquisitions of 1 January 2016 Interests in Joint Operations Amendments to MFRS 101 Disclosure Initiative 1 January 2016 Amendments to MFRS 116 Clarification of Acceptable 1 January 2016 and MFRS 138 Methods of Depreciation and Amortisation Amendments to MFRS 116 Agriculture: Bearer Plants 1 January 2016 and MFRS 141 Amendments to MFRS 127 Equity Method in Separate 1 January 2016 Financial Statements

Annual Improvements to MFRSs 2012–2014 Cycle 1 January 2016 Amendments to MFRS 10, Investment Entities: Applying 1 January 2016 MFRS 12 and MFRS 128 the Consolidation Exception Amendments to MFRS 112 Recognition of Deferred Tax

Assets for Unrealised Losses 1 January 2017

Amendments to MFRS 107 Disclosure Initiative 1 January 2017 MFRS 9 Financial Instruments (IFRS 9 1 January 2018

issued by IASB in July 2014) MFRS 15 Revenue from Contracts with 1 January 2018

Customers MFRS 16 Leases 1 January 2019 Amendments to MFRS 10 Sale or Contribution of Assets To be announced and MFRS 128 between an Investor and its

Associate or Joint Venture

The Group and the Company intend to adopt the above MFRSs when they become effective.

56


Company No. 453392 T - 27 -



Standards issued but not yet effective (Cont’d)

The initial applications of the abovementioned MFRSs are not expected to have any significant impacts on the financial statements of the Group and of the Company except as mentioned below:

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014)

MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces earlier versions of MFRS 9 and introduces a package of improvements which includes a classification and measurement model, a single forward looking ‘expected loss’ impairment model and a substantially reformed approach to hedge accounting. MFRS 9 when effective will replace MFRS 139 Financial Instruments: Recognition and Measurement.

MFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income and fair value through profit or loss. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in other comprehensive income without subsequent recycling to profit or loss. There is now a new expected credit losses model that replaces the incurred loss impairment model used in MFRS 139. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. MFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under MFRS 139.

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

MFRS 15 Revenue from Contracts with Customers

MFRS 15 replaces MFRS 118 Revenue, MFRS 111 Construction Contracts and related IC Interpretations. The Group is in the process of assessing the impact of this Standard. The Standard deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.

57

Annual Report 2015

Company No. 453392 T - 28 -



Standards issued but not yet effective (Cont’d)

MFRS 15 Revenue from Contracts with Customers (Cont’d)

Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The core principle in MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to the customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

MFRS 16 Leases

MFRS 16, which upon the effective date will supersede MFRS 117 Leases, introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Specifically, under MFRS 16, a lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Accordingly, a lessee should recognise depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows. Also, the right-of-use asset and the lease liability are initially measured on a present value basis. The measurement includes non-cancellable lease payments and also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option to terminate the lease. This accounting treatment is significantly different from the lessee accounting for leases that are classified as operating leases under the predecessor standard, MFRS 117.

In respect of the lessor accounting, MFRS 16 substantially carries forward the lessor accounting requirements in MFRS 117. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.

The directors of the Company will assess the impact of the application of MFRS 16. For the moment, it is not practicable to provide a reasonable estimate of the effect of the application of MFRS 16 until the Group performs a detailed review.

(b) Functional and presentation currency

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

58


Company No. 453392 T - 29 -


(c) Significant accounting judgments, estimates and assumptions

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

Judgments

There are no significant areas of critical judgement in applying accounting policies that have significant effect on the amounts recognised in the financial statements.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation or uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below.

Useful lives of property, plant and equipment

The Group and the Company regularly review the estimated useful lives of property, plant and equipment based on factors such as business plan and strategies, expected level of usage and future technological developments. Future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned above. A reduction in the estimated useful lives of property, plant and equipment would increase the recorded depreciation and decrease the value of property, plant and equipment. The carrying amount at the reporting date for property, plant and equipment is disclosed in Note 4.

Capitalisation and amortisation of deferred development costs

The Group capitalised costs relating to the development and enhancement of its new and existing products respectively, upon meeting all the criteria for capitalisation as described in Note 3(f). Amortisation, which commences upon commercialisation or sale of products, is recognised in the profit or loss based on a straight-line basis over the products' estimated economic lives of 5 years. The Group review the amortisation period and amortisation method at least once a year.

However, if there are indications that the products are unable to meet expected future cash flow, immediate impairment loss would be recognised. The carrying amount at the reporting date for deferred development costs is disclosed in Note 6.

59

Annual Report 2015

Company No. 453392 T - 30 -


(c) Significant accounting judgments, estimates and assumptions (Cont’d)

Key sources of estimation uncertainty (Cont’d)

Recoverability of development costs

During the year, the Directors considered the recoverability of the Group’s development cost arising from its innovative software system development.

The project continues to progress in a satisfactory manner, and customer reaction has reconfirmed the Directors’ previous estimates of anticipated revenues from the project. However, increased competitor activity has caused the Directors to reconsider their assumptions regarding future market share and anticipated margins of this product. Detailed sensitivity analysis has been carried out and the Directors are confident that the carrying amount of the asset will be recovered in full, even if returns are reduced. This situation will be closely monitored, and adjustments made in future periods, if market activity indicates that such adjustments are appropriate. The carrying amount at the reporting date for development costs is disclosed in Note 6.

Impairment of loans and receivables

The Group assesses at end of each reporting period whether there is any objective evidence that a receivable is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the receivable and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amounts at the reporting date for loans and receivables are disclosed in Notes 9, 10 and 11 respectively.

Income taxes

Judgment is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business.

The Group recognises liabilities for tax based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

60


Company No. 453392 T - 31 -

3. Significant Accounting Policies

The Group and the Company apply the significant accounting policies set out below, consistently throughout all periods presented in the financial statements unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiary companies

Subsidiary companies are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, 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. Subsidiary companies are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary company is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed off in profit or loss as incurred.

If the business combination is achieved in stages, previously held equity interest in the acquiree is re-measured at its acquisition date fair value and the resulting gain or loss is recognised in profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instruments and within the scope of MFRS 139 Financial Instruments: Recognition and Measurement, is measured at fair value with the changes in fair value recognised in profit or loss. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Inter-company transactions, balances and unrealised gains or losses on transactions between Group companies are eliminated. Unrealised losses are eliminated only if there is no indication of impairment. Where necessary, accounting policies of subsidiary companies have been changed to ensure consistency with the policies adopted by the Group.

61

Annual Report 2015

Company No. 453392 T - 32 -

3. Significant Accounting Policies (Cont’d)

(a) Basis of consolidation (Cont’d)

(i) Subsidiary companies (Cont’d)

In the Company’s separate financial statements, investments in subsidiary companies are stated at cost less accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts are recognised in profit or loss. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. See accounting policy Note 3(k) to the financial statements on impairment of non-financial assets.

(ii) Changes in ownership interests in subsidiary companies without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary company is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(iii) Disposal of subsidiary companies

If the Group loses control of a subsidiary company, the assets and liabilities of the subsidiary company, including any goodwill, and non-controlling interests are derecognised at their carrying value on the date that control is lost. Any remaining investment in the entity is recognised at fair value. The difference between the fair value of consideration received and the amounts derecognised and the remaining fair value of the investment is recognised as a gain or loss on disposal in profit or loss. Any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities.

(iv) Goodwill on consolidation

The excess of the aggregate of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total consideration transferred, non-controlling interest recognised and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary company acquired (ie. a bargain purchase), the gain is recognised in profit or loss.

62


Company No. 453392 T - 33 -


(a) Basis of consolidation (Cont’d)

(iv) Goodwill on consolidation (Cont’d)

Following the initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment annually or more frequent when there is objective evidence that the carrying value may be impaired. See accounting policy Note 3(k) to the financial statements on impairment of non-financial assets.

(b) Foreign currency

(i) Foreign currency transactions and balances

Transactions in foreign currency are recorded in the functional currency of the respective Group entities using the exchange rates prevailing at the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are included in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation. These are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences arising on monetary items that form part of the Company’s net investment in foreign operation are recognised in profit or loss in the Company’s financial statements or the individual financial statements of the foreign operation, as appropriate.

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

63

Annual Report 2015

Company No. 453392 T - 34 -


(b) Foreign currency (Cont’d)

(ii) Foreign operations

The assets and liabilities of foreign operations denominated in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at the rate of exchange prevailing at the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to RM at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign currency translation reserve (“FCTR”) in equity. However, if the operation is a non-wholly owned subsidiary company, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed off such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.

When the Group disposes of only part of its interest in a subsidiary company that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(c) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The policy of recognition and measurement of impairment losses is in accordance with Note 3(k).

(i) Recognition and measurement

Cost includes expenditures that are directly attributable to the acquisition of the assets and any other costs directly attributable to bringing the asset to working condition for its intended use, cost of replacing component parts of the assets, and the present value of the expected cost for the decommissioning of the assets after their use. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. All other repair and maintenance costs are recognised in profit or loss as incurred.

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Company No. 453392 T - 35 -


(c) Property, plant and equipment (Cont’d)

(i) Recognition and measurement (Cont’d)

The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar items.

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

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the profit or loss as incurred.

(iii) Depreciation

Depreciation is recognised in the profit or loss on straight line basis to write off the cost of each asset to its residual value over its estimated useful life. Freehold land has an unlimited useful life and therefore is not depreciated.

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

Buildings 1-2%Motor vehicles 20%Office and computer equipment 10-20%Renovations, furniture and fittings 10-20%

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Annual Report 2015

Company No. 453392 T - 36 -


(c) Property, plant and equipment (Cont’d)

(iii) Depreciation (Cont’d)

The residual values, useful lives and depreciation method are reviewed at each financial period end 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 motor vehicle and other property, plant and equipment.

(d) Leases

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

As lessee

(i) Finance Lease

Leases in terms of which the Group 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. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

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.

Leasehold land which in substance is a finance lease is classified as a property, plant and equipment or an investment property if held to earn rental income or capital appreciation or both.

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Company No. 453392 T - 37 -


(d) Leases (Cont’d)

As lessee (Cont’d)

(ii) Operating Lease

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

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

Leasehold land which in substance is an operating lease is classified as prepaid land lease payments.

As lessor

Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

(e) Investment properties

Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are measured initially at cost and subsequently at fair value with any changes therein recognised in profit or loss for the period in which they arise. Where the fair value of the investment property under construction is not reliably determinable, the investment property under construction is measured at cost until either its fair value becomes reliably determinable or construction is complete, whichever is earlier.

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Annual Report 2015

Company No. 453392 T - 38 -


(e) Investment properties (Cont’d)

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

Investment properties are derecognised when either they are disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in the profit or loss in the year of retirement or disposal.

Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner-occupied property becomes an investment property, the Group accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use.

(f) Internally-generated intangible assets - research and development costs

Research costs are expensed as incurred

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

Development costs, on an individual project are recognised when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete and the ability to measure reliably the expenditures during development.

The capitalised development costs is measured at cost less any accumulated amortisation and impairment losses. Subsequent expenditure is capitalised when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.

Amortisation of the capitalised development costs is recognised in profit or loss, begins when development is complete and the specific asset is available for use. It is amortised over the 5 years period of expected future benefit on a straight-line basis.

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Company No. 453392 T - 39 -


(f) Internally-generated intangible assets - research and development costs (Cont’d)

The residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each reporting date.

Gain or losses arising from derecognition of the capitalised development costs 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.

(g) Financial assets

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

Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately in profit or loss.

The Group and the Company classify their financial assets depends on the purpose for which the financial assets were acquired at initial recognition, into the following categories:

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in as current assets, except for those maturing later than 12 months after the end of the reporting period which are classified as non-current assets.

After initial recognition, financial assets categorised as loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

(ii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the assets within 12 months after the end of the reporting period.

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Annual Report 2015

Company No. 453392 T - 40 -


(g) Financial assets (Cont’d)

(ii) Available-for-sale financial assets (Cont’d)

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

Investment in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less impairment loss.

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

A financial asset is derecognised when the contractual rights to receive cash flows from the financial asset has expired or has been transferred and the Group and the Company have transferred substantially all risks and rewards of ownership. On derecognition of a financial asset, the difference between the carrying amount and the sum of consideration received and any cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

(h) Financial Liabilities

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

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

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Company No. 453392 T - 41 -


(h) Financial Liabilities (Cont’d)

The Group and the Company classify their financial liabilities at initial recognition into:

Financial liabilities measured at amortised cost

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

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

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Gains and losses on financial liabilities measured at amortised cost are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specific payment to reimburse the holder for a loss it incurs because a specific debtor fails to make payment when due in accordance with the original or modified 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.

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

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Annual Report 2015

Company No. 453392 T - 42 -


(i) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statements of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

(j) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, bank balances and deposits with banks and highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. For the purpose of statements of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

(k) Impairment of Assets

(i) Non-financial assets

The carrying amounts of non-financial assets (except for investment properties measured at fair value and deferred tax assets are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives, or that are not yet available for use, the recoverable amount is estimated each period at the same time.

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

The recoverable amount of an asset or cash-generating unit is the greater of its value-in-use and its fair value less costs of disposal. 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 or cash-generating unit.

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Company No. 453392 T - 43 -


(k) Impairment of Assets (Cont’d)

(i) Non-financial assets (Cont’d)

An impairment loss is recognised if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. Impairment loss is recognised in profit or loss, unless the asset is carried at a revalued amount, in which such impairment loss is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cash-generating units) and then to reduce the carrying amounts of the other assets in the cash-generating unit (group of cash-generating units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed only if there has been a change in the estimates used to determine the 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 or amortisation, had no impairment loss been recognised for asset in prior years. Such reversal is recognised in the profit or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

(ii) Financial assets

All financial assets, other than investments in subsidiary companies are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset.

Financial assets carried at amortised cost

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

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Annual Report 2015

Company No. 453392 T - 44 -



(ii) Financial assets (Cont’d)

Financial assets carried at amortised cost (Cont’d)

If any such evidence exists, the amount of impairment 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) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of impairment loss is recognised in profit or loss. Receivables together with the associated allowance are written off when there is no realistic prospect of future recovery.

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

Available-for-sale financial assets

Significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired. A significant or prolonged decline in the fair value of investments in equity instruments below its cost is also an objective evidence of impairment.

If an available-for-sale financial asset is impaired, the amount of impairment loss is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss. When a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value of equity instrument, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

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Company No. 453392 T - 45 -



(ii) Financial assets (Cont’d)

Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial asset carried at cost has been incurred, the amount of the loss is measured as the difference between the carrying amount of the financial asset and the Group’s share of net assets or the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(l) Share capital

(i) Ordinary shares

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

Dividend distribution to the Company’s shareholders is recognised as a liability in the period they are approved by the Board of Directors except for the final dividend which is subject to approval by the Company’s shareholders.

(ii) Treasury shares

When issued share of the Company are repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares in the statement of changes in equity. No gain or loss is recognised in profit or loss on the sale, re-issuance or cancellation of the treasury shares.

When treasury shares are distributed as share dividends, the cost of the treasury shares is applied as a reduction of the share premium account or the distributable retained earnings or both.

When treasury shares are sold or reissued subsequently, the difference between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity.

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Annual Report 2015

Company No. 453392 T - 46 -


(m) Provisions

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

Provisions are reviewed at each end of the reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision. The relating expense relating to any provision is presented in the statements of profit or loss and other comprehensive income net of any reimbursement.

(n) Employee benefits

(i) Short term employee benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the 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. Short-term non-accumulating compensated absences such as sick and medical leave are recognised when the absences occur.

The expected cost of accumulating compensated absences is measured as additional amount expected to be paid as a result of the unused entitlement that has accumulated at the end of the reporting period.

(ii) Defined contribution plans

As required by law, companies in Malaysia contribute to the state pension scheme, the Employee Provident Fund (“EPF”). Some of the Group’s foreign subsidiary companies also make contributions to their respective countries’ statutory pension schemes. Such contributions are recognised as an expense in the profit or loss as incurred. Once the contributions have been paid, the Group has no further payment obligations.

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Company No. 453392 T - 47 -


(o) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the assets, which are assets that necessarily take a substantial period of time to get ready for theirs intended use or sale, are capitalised as part of the cost of those assets. All other borrowing costs are recognised in profit or loss 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.

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

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

(p) Revenue recognition

Revenue is recognised when it is probable that the economic benefits will flow to the Group and the Company and when the revenue can be measured reliably, on the following bases:

(i) Sale of goods

Revenue is measured at the fair value of consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue from sale of goods is recognised when the significant risk and rewards of ownership of the goods have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.

(ii) Rendering of services

Revenue from rendering of services is recognised in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to the proportion that costs incurred to date that reflect services performed bear to the total estimated costs of the transaction. Where the outcome of the transaction cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

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Annual Report 2015

Company No. 453392 T - 48 -


(p) Revenue recognition (Cont’d)

(iii) Interest income

Interest income is recognised on accruals basis using the effective interest method.

(iv) Rental income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

(v) Royalty income

Royalty income is recognised on an accrual basis in accordance with the licensing agreements.

(q) Income taxes

Tax expense in profit or loss 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.

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.

Deferred tax is recognised using the liability method for all 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 which 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 measurement of deferred tax is based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, at the end of the reporting period, except for investment properties carried at fair value model. Where investment properties measured using fair value model, the amount of deferred tax recognised is measured using the tax rates that would apply on sale of those assets at their carrying amounts at the reporting date unless the property is depreciable and is held with the objective to consume substantially all of the economic benefits embodied in the property over time, rather than through sale. Deferred tax assets and liabilities are not discounted.

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Company No. 453392 T - 49 -


(q) Income taxes (Cont’d)

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.

Unutilised investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against the unutilised tax incentive can be utilised.

(r) 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-makers are responsible for allocating resources and assessing performance of the operating segments and make overall strategic decisions. The Group’s operating segments are organised and managed separately according to geographical location, with each segment representing a strategic business unit that offers different products.

(s) 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 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.

79

Annual Report 2015

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337

D

ispo

sals

-

-

(625

,575

)

-

-

(6

25,5

75)

Writ

ten

off

-

-

-

(165

,571

)

(8

8,08

1)

(253

,652

)

Ex

chan

ge d

iffer

ence

s-

-

18

,847

24

3,56

4

20

,059

28

2,47

0

At

31

Dec

embe

r-

1,

532,

292

1,

625,

244

4,

020,

100

99

5,37

4

8,

173,

010

Impa

irmen

t los

ses

At 1

Jan

uary

/31

Dec

embe

r-

21

,224

-

-

-

21

,224

Car

ryin

g am

ount

633,

000

4,53

9,41

7

1,50

9,99

3

1,98

0,36

2

749,

367

9,41

2,13

9

80


Com

pany

No.

45

3392

T

- 51

-

4.

Prop

erty

, Pla

nt a

nd E

quip

men

t (C

ont’d

)

Offi

ce a

ndR

enov

atio

ns,

Free

hold

Fr

eeho

ld

Mot

orco

mpu

ter

furn

iture

and

land

build

ings

vehi

cles

equi

pmen

tfit

tings

Tota

lR

MR

MR

MR

MR

MR

MG

roup

2014

Cos

tAt

1 J

anua

ry63

3,00

0

6,

209,

994

3,

112,

762

4,

743,

799

1,

373,

042

16

,072

,597

Ad

ditio

ns-

-

-

66

3,64

0

31

1,33

6

97

4,97

6

D

ispo

sals

-

-

(375

,810

)

(4

2,24

1)

(2,3

80)

(4

20,4

31)

Writ

ten

off

-

-

-

(280

)

-

(2

80)

Exch

ange

diff

eren

ces

-

(38,

294)

9,

102

72,7

37

5,70

6

49

,251

At

31

Dec

embe

r63

3,00

0

6,

171,

700

2,

746,

054

5,

437,

655

1,

687,

704

16

,676

,113

Accu

mul

ated

dep

reci

atio

nAt

1 J

anua

ry-

1,

297,

650

1,

384,

477

3,

174,

298

89

1,42

7

6,

747,

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harg

e fo

r the

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l yea

r-

11

7,32

1

77

3,72

9

15

2,67

1

41

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1,

084,

831

D

ispo

sals

-

-

(375

,810

)

(3

4,23

7)

(2,3

80)

(4

12,4

27)

Writ

ten

off

-

-

-

(173

)

-

(1

73)

Exch

ange

diff

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ces

-

-

5,72

3

54

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4,

695

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47

At 3

1 D

ecem

ber

-

1,41

4,97

1

1,78

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9

3,34

7,48

8

934,

852

7,48

5,43

0

Impa

irmen

t los

ses

At 1

Jan

uary

/31

Dec

embe

r-

21

,224

-

-

-

21

,224

Car

ryin

g am

ount

633,

000

4,73

5,50

5

957,

935

2,09

0,16

7

752,

852

9,16

9,45

9

81

Annual Report 2015

Com

pany

No.

45

3392

T

- 52

-

4.

Prop

erty

, Pla

nt a

nd E

quip

men

t (C

ont’d

)

Offi

ce a

ndR

enov

atio

ns,

Free

hold

Fr

eeho

ld

Mot

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ter

furn

iture

and

land

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cles

equi

pmen

tfit

tings

Tota

lR

MR

MR

MR

MR

MR

MC

ompa

ny20

15C

ost

At 1

Jan

uary

633,

000

5,23

3,03

0

93,8

53

1,59

2,66

8

835,

657

8,38

8,20

8

Addi

tions

-

-

596,

450

61,7

31

60,1

15

718,

296

Writ

ten

off

-

-

-

(85,

630)

(1

0,08

0)

(95,

710)

At

31

Dec

embe

r63

3,00

0

5,

233,

030

69

0,30

3

1,

568,

769

88

5,69

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9,

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794

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mul

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dep

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atio

nAt

1 J

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1,

414,

972

50

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1,

231,

831

56

8,68

2

3,

265,

882

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harg

e fo

r the

fina

ncia

l yea

r-

11

7,32

1

13

8,06

1

11

5,17

7

45

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41

5,60

3

W

ritte

n of

f-

-

-

(4

6,12

9)

(7,5

14)

(5

3,64

3)

At 3

1 D

ecem

ber

-

1,53

2,29

3

188,

458

1,30

0,87

9

606,

212

3,62

7,84

2

Impa

irmen

t los

ses

At 1

Jan

uary

/31

Dec

embe

r-

21

,224

-

-

-

21

,224

Car

ryin

g am

ount

633,

000

3,67

9,51

3

501,

845

267,

890

279,

480

5,36

1,72

8

82


Com

pany

No.

45

3392

T

- 53

-

4.

Prop

erty

, Pla

nt a

nd E

quip

men

t (C

ont’d

)

Offi

ce a

ndR

enov

atio

ns,

Free

hold

Fr

eeho

ld

Mot

orco

mpu

ter

furn

iture

and

land

build

ings

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cles

equi

pmen

tfit

tings

Tota

lR

MR

MR

MR

MR

MR

MC

ompa

ny20

14C

ost

At 1

Jan

uary

633,

000

5,23

3,03

0

469,

663

1,47

3,49

5

772,

259

8,58

1,44

7

Addi

tions

-

-

-

119,

453

63,3

98

182,

851

Dis

posa

l-

-

(3

75,8

10)

-

(375

,810

)

W

ritte

n of

f-

-

-

(2

80)

-

(280

)

At

31

Dec

embe

r63

3,00

0

5,

233,

030

93

,853

1,

592,

668

83

5,65

7

8,

388,

208

Accu

mul

ated

dep

reci

atio

nAt

1 J

anua

ry-

1,

297,

651

40

7,43

6

1,

124,

644

53

0,26

9

3,

360,

000

C

harg

e fo

r the

fina

ncia

l yea

r-

11

7,32

1

18

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10

7,36

0

38

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28

1,86

5

D

ispo

sal

-

-

(375

,810

)

-

-

(3

75,8

10)

Writ

ten

off

-

-

-

(173

)

-

(1

73)

At 3

1 D

ecem

ber

-

1,41

4,97

2

50,3

97

1,23

1,83

1

568,

682

3,26

5,88

2

Impa

irmen

t los

ses

At 1

Jan

uary

/31

Dec

embe

r-

21

,224

-

-

-

21

,224

Car

ryin

g am

ount

633,

000

3,79

6,83

4

43,4

56

360,

837

266,

975

5,10

1,10

2

83

Annual Report 2015

Company No. 453392 T - 54 -

4. Property, Plant and Equipment (Cont’d)

(a) The carrying amounts of property, plant and equipment of the Group and of the Company acquired under finance lease arrangement are as follow:

2015 2014 2015 2014RM RM RM RM

Motor vehicles 1,435,275 897,850 481,969 16,352 Office equipment - 38,226 - 12,563

1,435,275 936,076 481,969 28,915

CompanyGroup

(b) The aggregate additional cost for the property, plant and equipment of the Group and of the Company during the financial year acquired under finance lease arrangement and cash payment are as follows:

2015 2014 2015 2014RM RM RM RM

Aggregate costs 1,844,338 974,976 718,296 182,851 Less: Finance lease payment (900,000) - (500,000) - Cash payments 944,338 974,976 218,296 182,851

CompanyGroup

(c) The strata titles of certain property of the Group and of the Company with carrying amounts of RM37,536 (2014: RM39,316) have yet to be issued by the relevant authorities.

84


Company No. 453392 T - 55 -

5. Investment Properties

2015 2014 2015 2014RM RM RM RM

At fair value At 1 January 287,100 278,100 204,000 195,000 Change in fair value recognised in profit or loss 6,000 9,000 6,000 9,000 At 31 December 293,100 287,100 210,000 204,000

Included in the above are: At fair value Commercial properties 210,000 204,000 210,000 204,000 Freehold land 83,100 83,100 - -

293,100 287,100 210,000 204,000

Group Company

(a) The investment properties are valued annually at fair value based on market values determined by independent qualified valuers. The fair values are within level 2 of the fair value hierarchy. The fair values have been derived using the sales comparison approach. Sales prices of comparable land and buildings in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties. The fair value of the investment properties was valued by an independent valuer, IM Global Property Consultants Sdn Bhd based on comparable available market data.

The increase in the fair values of the Group and of the Company of RM6,000 and RM6,000 (2014: RM9,000 and RM9,000) has been recognised in the profit or loss during the financial year.

(b) The strata title of an investment property of the Company with carrying amount RM210,000 (2014: RM204,000) had been issued by the relevant authority during the financial year 2015.

(c) The land title of an investment property of the Group with carrying amount of RM83,100 (2014: RM83,100) has yet to be transferred by the vendor.

85

Annual Report 2015

Company No. 453392 T - 56 -

6. Deferred Development Costs

2015 2014RM RM

CostAt 1 January 29,692,050 21,160,758 Additions for the financial year 7,452,422 9,004,991 Exchange differences 3,129,269 (473,699) At 31 December 40,273,741 29,692,050

Accumulated amortisationAt 1 January 16,435,184 15,954,546 Amortisation 1,807,464 1,003,510 Exchange differences 2,471,332 (522,872) At 31 December 20,713,980 16,435,184

Carrying amountAt 31 December 19,559,761 13,256,866

Additions for the year include the following:Employee benefits expense (Note 27) 7,670,867 7,611,721

Group

The Group capitalises costs on development work on enhancement of existing as well as development of new software. These products are assessed to have a finite life of 5 years upon commercialisation. The amortisation period and amortisation method are reviewed at least annually for appropriateness.

86


Company No. 453392 T - 57 -

7. Investment in Subsidiaries

2015 2014RM RM

Unquoted shares, at cost- Malaysia 5,249,978 5,249,978 - Outside Malaysia 8,679,327 8,679,327

13,929,305 13,929,305 Less: Accumulated impairment losses (9,423,923) (9,423,923)

4,505,382 4,505,382 Discount on amounts due from subsidiaries 3,749,907 3,749,907

8,255,289 8,255,289

Company

Movement in impairment on investment in subsidiaries are as follows:

2015 2014RM RM

At 1 January/ 31 December 9,423,923 9,423,923

Company

Details of the subsidiaries are as follows:

Country of Name of subsidiaries incorporation 2015 2014 Principal activities

% %Direct holding:IFCA Solutions Sdn Bhd Malaysia 85.71 85.71 Turnkey solutions providerIFCA Systems (JB) Malaysia 99.99 99.99 Turnkey solutions provider

Sdn Bhd IFCA Systems (Penang) Malaysia 99.99 99.99 Turnkey solutions provider

Sdn Bhd IFCA Consulting Malaysia 99.99 99.99 Turnkey solutions provider (Sarawak) Sdn BhdProperty365 Sdn Bhd Malaysia 85.71 85.71 Property online (formerly known as marketplace and research IFCA Web Sdn Bhd and development and IFCA E-Commerce Sdn Bhd)

Effective equity interest

87

Annual Report 2015

Company No. 453392 T - 58 -

7. Investment in Subsidiaries (Cont’d)

Details of the subsidiaries are as follows (Cont’d):

Country of Name of subsidiaries incorporation 2015 2014 Principal activities

% %Direct holding:Network Online Malaysia 85.71 85.71 Installation and servicing Sdn Bhd of computer hardware

and networksIFCA Consulting (Sabah) Malaysia 60 60 Turnkey solutions provider Sdn BhdPush Technology Malaysia 100 100 Turnkey solutions provider, Sdn Bhd and research and

developmentIFCA International Republic of 100 100 Turnkey solutions provider Limited SeychellesSmartHR Sdn Bhd Malaysia 100 100 Turnkey solutions provider

Jingyou Information China 100 100 Turnkey solutions provider Technology (Shanghai) Co. Ltd* IFCA (Guangzhou) China 100 100 Research and development

Technology Company Limited* EFFICA Technology South Affica 100 100 Turnkey solutions provider

(Pty) Ltd

Indirect holding:Subsidiaries of IFCA (Guangzhou) Technology Company LimitedIFCA (Wuhan) China 100 100 Research and development Technology Company Limited*

Effective equity interest

* Subsidiary companies not audited by UHY

88


Company No. 453392 T - 59 -


(a) Material partly owned subsidiary company

Set out below are the Group’s subsidiary companies that have material non-controlling interests:

Name of company2015 2014 2015 2014 2015 2014

% % RM RM RM RM

IFCA Solutions 14.29 14.29 185,128 660,002 507,813 322,685 Sdn BhdNetwork Online 14.29 14.29 (79,641) 38,273 33,197 112,838 Sdn Bhd

Individually immaterial subsidiaries with non-controlling (171,078) 4,615 interestsTotal non-controlling interests 369,932 440,138

Proportion of ownership

interests and voting rights held by non-controlling interests

Profit/(Loss) allocated to non-

controlling interestsAccumulated non-

controlling interests

Summarised financial information for each subsidiary company that has non-controlling interests that are material to the Group is set out below. The summarised financial information below represents amounts before inter-company eliminations.

(i) Summarised statements of financial position

2015 2014 2015 2014RM RM RM RM

Non-current assets 1,289,969 834,636 420,956 535,287 Current assets 15,610,845 16,029,273 2,732,346 3,792,587 Current liabilities (12,699,643) (14,483,450) (2,952,403) (3,515,671) Net assets 4,201,171 2,380,459 200,899 812,203

IFCA Solutions Sdn Bhd

Network Online Sdn Bhd

89

Annual Report 2015

Company No. 453392 T - 60 -


(a) Material partly owned subsidiary company (Cont’d)

(ii) Summarised statements of profit or loss and other comprehensive income

2015 2014 2015 2014RM RM RM RM

Revenue 35,022,492 36,572,505 10,286,407 11,143,018 Profit/(Loss) for the financial year 1,295,893 4,620,016 (557,487) 267,907 Total comprehensive income/(loss) for the financial year 1,295,893 4,620,016 (557,487) 267,907

IFCA Solutions Network Online Sdn Bhd Sdn Bhd

(iii) Summarised statements of cash flows

2015 2014 2015 2014RM RM RM RM

Net cash (used in)/ generated from operating activities (1,113,335) 3,727,284 (1,478,090) 296,997 Net cash (used in)/ generated from investing activities (278,322) (181,710) 29,847 (30,485) Net cash used in financing activities (24,047) (96,579) (64,630) (94,885) Net (decrease)/ increase in cash and cash equivalents (1,415,704) 3,448,995 (1,512,873) 171,627

IFCA Solutions Network Online Sdn Bhd Sdn Bhd

(b) There are no significant restrictions on the ability of the subsidiary companies to transfer funds to the Group in the form of cash dividends or repayment of loans and advances. Generally, for all subsidiary companies which are not wholly-owned by the Company, non-controlling shareholders hold protective rights restricting the Company’s ability to use the assets of the subsidiary companies and settle the liabilities of the Group, unless approval is obtained from non-controlling shareholders.

90


Company No. 453392 T - 61 -

8. Other Investments

2015 2014 2015 2014RM RM RM RM

Available-for-sale financial assets At fair value

Investment in foreign unquoted shares - - - -

Other investmentAt costInvestment in club memberships 275,674 201,674 165,000 91,000

275,674 201,674 165,000 91,000

Group Company

The investment in club memberships is unquoted and the management are of the view that under such circumstances, it is not possible to disclose the range estimates within which a fair value is likely to lie.

9. Amounts Due From/(To) Subsidiaries

2015 2014RM RM

Non-Current AssetsAmounts due from subsidiaries (non-trade) 13,903,367 6,494,667

Current AssetsAmounts due from subsidiaries (trade) 2,820,203 9,884,229 Less: Accumulated impairment losses (1,283,627) (1,283,627)

1,536,576 8,600,602

Current LiabilitiesAmounts due to subsidiaries (non-trade) - (255,360)

Company

These amounts represent unsecured, interest free and are collectable or payable on demand, except for the non-current portion are not expected to be repaid within the next 12 months.

91

Annual Report 2015

Company No. 453392 T - 62 -

10. Trade Receivables

2015 2014 2015 2014RM RM RM RM

Third parties 23,923,601 18,946,013 260,177 930,397 Less: Accumulated impairment losses (2,430,565) (2,033,561) (28,909) (28,909)

21,493,036 16,912,452 231,268 901,488

Group Company

Trade receivables are non-interest bearing and are generally on 30 to 90 days (2014: 30 to 90 days) term. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Movement in the allowance for impairment losses of trade receivables are as follows:

2015 2014 2015 2014RM RM RM RM

At 1 January 2,033,561 3,009,137 28,909 420,605 Charge for the year 412,490 1,250,072 - - Written off (7,065) (2,252,358) - (391,696) Reversal of impairment losses (125,537) (12,962) - - Exchange differences 117,116 39,672 - - At 31 December 2,430,565 2,033,561 28,909 28,909

Group Company

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

92


Company No. 453392 T - 63 -

10. Trade Receivables (Cont’d)

Analysis of the trade receivables ageing as at the end of the financial year is as follows:

2015 2014 2015 2014RM RM RM RM

Neither past due nor impaired 8,675,415 7,083,468 175,472 79,801

Past due not impaired:Less than 30 days 2,357,156 2,847,046 51,930 70,945 31 to 60 days 1,122,573 1,435,129 38 63,245 61 to 90 days 1,033,939 1,588,692 - 88,694 91 to 120 days 1,448,563 1,007,207 3,816 130,332 More than 120 days 6,855,390 2,950,910 12 468,471

12,817,621 9,828,984 55,796 821,687 21,493,036 16,912,452 231,268 901,488

Impaired 2,430,565 2,033,561 28,909 28,909 23,923,601 18,946,013 260,177 930,397

Group Company

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. More than 66% (2014: 57%) of the Group's trade receivables arises from customers with more than 5 years of experience with the Group and losses have occurred infrequently.

Receivables that are past due but not impaired

The Group and the Company have trade receivables amounting to RM12,817,621 and RM55,796 (2014: RM9,828,984 and RM821,687) respectively that are past due at the reporting date but not impaired. The total amounts that are past due but not impaired are unsecured in nature.

Although these receivables have exceeded the credit terms granted to them, the Directors are reasonably confident that all debts can be recovered within the next 12 months.

93

Annual Report 2015

Company No. 453392 T - 64 -

11. Other Receivables

2015 2014 2015 2014RM RM RM RM

Sundry receivables 1,377,245 1,722,500 19 170,664

Deposits 742,845 967,058 92,470 16,582 2,120,090 2,689,558 92,489 187,246

Less: Accumulated impairment losses (1,168,156) (1,168,156) - -

951,934 1,521,402 92,489 187,246

Group Company

Movement in impairment on other receivables are as follows:

2015 2014RM RM

At 1 January/31 December 1,168,156 1,168,156

Group

12. Other Current Assets

2015 2014 2015 2014RM RM RM RM

Prepayment 522,118 1,476,347 280,040 138,215

Group Company

94


Company No. 453392 T - 65 -

13. Fixed Deposits with Licensed Banks

2015 2014 2015 2014RM RM RM RM

Fixed deposits for short term funding - Due within 3 months 20,394,996 3,326,546 19,394,996 3,326,546

Fixed deposits not for short term funding - Due more than 3 months 5,613,552 3,443,506 3,613,552 3,421,556

26,008,548 6,770,052 23,008,548 6,748,102

Group Company

The fixed deposits with licensed banks of the Group and of the Company amounting to RM136,870 and RM136,870 (2014: RM91,060 and RM69,110) are pledged as securities for bank guarantee granted to a subsidiary company.

The interest rate of the fixed deposits of the Group and of the Company are range from 3.05% to 3.35% (2014: 3.05% to 3.35%) and 3.05% to 3.35% (2014: 3.05% to 3.35%) respectively and mature within 12 months period.

95

Annual Report 2015

Company No. 453392 T - 66 -

14. Share Capital

2015 2014 2015 2014Unit Unit RM RM

Ordinary Shares of RM0.10 eachAuthorised:At 1 January/ 31 December 750,000,000 750,000,000 75,000,000 75,000,000

Issued and fully paid:At 1 January 479,741,700 450,053,000 47,974,170 45,005,300

Issuance of shares:

- Exercise of warrants 90,812,400 29,688,700 9,081,240 2,968,870 At 31 December 570,554,100 479,741,700 57,055,410 47,974,170

Group/CompanyNumber of Shares Amount

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company’s residual assets. In respect of the Company’s treasury shares that are held by the Group, all rights are suspended until those shares are reissued.

During the financial year, the Company increased its issued and paid-up share capital from 479,741,700 to 570,554,100 through the creation of 90,812,400 ordinary shares of RM0.10 each for cash arising from the exercise of warrants.

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

15. Share Premium

2015 2014RM RM

Non-distributableAt 1 January 7,221,849 6,447,361 Exercise of warrants 2,369,019 774,488 At 31 December 9,590,868 7,221,849

Group/Company

Share premium comprises the premium paid on subscription of shares in the Company over and above the par value of the shares.

96


Company No. 453392 T - 67 -

16. Treasury Shares

The shareholders of the Company, by a resolution passed in the Extraordinary General Meeting held on 30 October 2015, renewed their approval for the Company’s plan to repurchase its own shares. The Directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the repurchase plan can be applied in the best interest of the Company and its shareholders.

2015 2014 2015 2014Unit Unit RM RM

At 1 January - - - - Share repurchased 10,000 - 9,821 - At 31 December 10,000 - 9,821 -

Group/CompanyNumber of shares Amount

During the financial year, the Company repurchased 10,000 (2014: Nil) of its issued share capital from the open market at an average price of RM0.9821 (2014: RMNil) per share including transaction costs. The purchase transactions were financed by internally generated funds. The shares repurchased are held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

17. Share Application Monies

This represents applications received from warrant holders on exercise of warrants pending allotment of shares.

18. Warrant Reserves

2015 2014 2015 2014Unit Unit RM RM

Non-distributableAt 1 January 113,662,300 143,351,000 2,965,103 3,739,591 Exercise of warrants (90,812,400) (29,688,700) (2,369,019) (774,488) At 31 December 22,849,900 113,662,300 596,084 2,965,103

Group/CompanyNumber of warrants Amount

The Company issued 143,351,000 free detachable warrants for every two existing ordinary shares of RM0.10 each held in the Company on 13 January 2011.

97

Annual Report 2015

Company No. 453392 T - 68 -

18. Warrant Reserves (Cont’d)

The salient terms of the warrants are as follows:

(i) Each warrant entitles the holder to subscribe for one new ordinary share of RM0.10 each in the Company at the exercise price of RM0.10 per ordinary share;

(ii) The warrants may be exercised at any time up to 15 February 2016; and

(iii) The shares arising from the exercise of warrants shall rank pari passu in all respect with the existing ordinary shares of the Company, save and except that the new shares shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the allotment date of the new shares.

As at 31 December 2015, the total numbers of warrants that remain unexercised were 22,849,900 (2014: 113,662,300).

19. Other Reserves

2015 2014RM RM

At 1 January (282,353) 176,773 Foreign exchange translation (1,405,122) (459,126)At 31 December (1,687,475) (282,353)

Group

The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

20. Other Liabilities

2015 2014RM RM

Current Deferred revenue 5,093,465 3,599,819

Deposits and advance maintenance fees 5,713,942 3,747,731 10,807,407 7,347,550

Non-currentDeposits and advance maintenance fees 255,177 85,972

Group

98


Company No. 453392 T - 69 -

20. Other Liabilities (Cont’d)

Deferred revenue represents software applications income received, in advance from customers. Revenue from software application is recognised in profit or loss on a time progressive basis over the contract period.

Deposits and maintenance fees received in advance from customers are recognised over the respective periods to correlate with the delivery of goods or service obligations, as applicable.

21. Finance Lease Payables

2015 2014 2015 2014RM RM RM RM

Minimum lease payments:Within one year 235,916 150,642 117,012 14,322 Later than 1 year and not later that 2 years 214,203 46,438 112,008 5,004 Later than 2 year and not later that 5 years 479,582 - 233,310 -

929,701 197,080 462,330 19,326 Less: Future finance charges (84,668) (6,661) (40,233) (705) Present value of minimum lease payment 845,033 190,419 422,097 18,621

Group Company

Present value of minimum lease payments: Within one year 201,565 145,309 99,828 13,686

Later than 1 year and not later that 2 years 189,195 45,110 99,615 4,935

Later than 2 year and not later that 5 years 454,273 - 222,654 -

845,033 190,419 422,097 18,621

Analysed as:Payable within 12 months 201,565 145,309 99,828 13,686 Payable after 12 months 643,468 45,110 322,269 4,935

845,033 190,419 422,097 18,621

The finance lease liabilities of the Group and of the Company bear interest at rates between 2.23% and 8.29% (2014: 2.23% and 8.29%) per annum and at an average interest rate of 5.63% (2014: 5.63%) per annum respectively.

99

Annual Report 2015

Company No. 453392 T - 70 -

21. Finance Lease Payables (Cont’d)

The Group leases motor vehicles under finance lease (Note 4). At the end of the lease term, the Group has the option to acquire the assets at a nominal price deemed to be a bargain purchase option. There are no restrictive covenants imposed by the lease agreement and no arrangements have been entered into for contingent rental payments.

22. Deferred Taxation

2015 2014 2015 2014RM RM RM RM

At 1 January 1,738,721 175,746 108,154 112,736 Recognised in profit or loss (Note 31) 1,144,578 1,562,975 (8,707) (4,582) At 31 December 2,883,299 1,738,721 99,447 108,154

Group Company

The net deferred tax assets and liabilities shown on the statements of financial position after appropriate offsetting are as follows:

Group2015 2014 2015 2014RM RM RM RM

Deferred tax assets (895,516) (675,585) - - Deferred tax liabilities 3,778,815 2,414,306 99,447 108,154

2,883,299 1,738,721 99,447 108,154

Company

100


Company No. 453392 T - 71 -

22. Deferred Taxation (Cont’d)

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

2015 2014RM RM

Deferred tax assetsUnabsorbed capital allowances (15,898) - Unutilised tax losses (879,618) (675,585)

(895,516) (675,585)

Deferred tax liabilitiesDifferences between the carrying amounts of property, plant and equipment and their income tax base 393,531 371,906 Deferred development costs 3,385,284 2,042,400

3,778,815 2,414,306

Group

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

2015 2014RM RM

Deferred tax liabilitiesDifferences between the carrying amounts of property, plant and equipment and their income tax base 99,447 108,154

Company

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following temporary differences due to uncertainty of its recoverability:

2015 2014RM RM

Unabsorbed capital allowances 43,871 39,889 Unutilised tax losses 15,495,040 11,138,831

15,538,911 11,178,720

Group

101

Annual Report 2015

Company No. 453392 T - 72 -

22. Deferred Taxation (Cont’d)

The availability of the unutilised tax losses and unabsorbed capital allowances of offsetting against future taxable profits of the Group and of the Company. Dormant subsidiary companies are subject to no substantial changes in shareholding of the Company and of these subsidiary companies under Section 44(5A) and (5B) of Income Tax Act, 1967.

Deferred tax assets have not been recognised in respect of these items as they may not have sufficient taxable profits to be used to offset or they have arisen in subsidiary companies that have a recent history of losses.

23. Trade Payables

The trade credit terms granted to the Group and to the Company vary between 30 and 60 days (2014: 30 and 60 days) although in practice it is customary for certain suppliers to extend credit terms to exceed 60 days but generally not more than 120 days.

24. Other Payables

2015 2014 2015 2014RM RM RM RM

Sundry payables 1,116,595 1,018,320 573,823 66,360 Accruals 8,145,099 8,377,678 137,320 1,327,529

9,261,694 9,395,998 711,143 1,393,889

Group Company

25. Revenue

2015 2014 2015 2014RM RM RM RM

Software applications 49,777,855 44,026,560 - - Maintenance, support system, training and implementation 38,657,988 30,486,705 3,550,115 2,469,745 Hardware, networking and operating systems 12,085,917 13,232,416 638,705 736,699 Royalty income 601,401 689,423 2,786,789 3,886,105 Academy income 500,120 805,911 399,594 384,890

101,623,281 89,241,015 7,375,203 7,477,439

Group Company

102


Company No. 453392 T - 73 -

26. Other Income

2015 2014 2015 2014RM RM RM RM

Bad debts recovered 29,223 - - - Interest income from: - Due from subsidiaries arising from unwinding of discount - - 668,140 633,008 - Others 823,003 455,195 686,445 391,667 Rental income 23,062 20,160 3,780 5,800 Reversal of impairment loss on trade receivables 125,537 12,962 - - Fair value gain of

investment properties 6,000 9,000 6,000 9,000 Gain on disposal of property, plant and

equipments 18,159 115,036 - 115,000 Gain on foreign exchange - Realised 426,492 95,723 302,114 10,852 - Unrealised 1,206,267 524,976 - 60,205 Reallocation of head quarter costs charged to subsidiaries - - 4,629,241 1,702,217 Miscellaneous 1,145,390 896,179 - 7,720

3,803,133 2,129,231 6,295,720 2,935,469

Group Company

103

Annual Report 2015

Company No. 453392 T - 74 -

27. Employee Benefits Expenses

2015 2014 2015 2014RM RM RM RM

Salaries and wages 43,420,354 33,861,125 4,423,972 4,410,046 Social security contributions 3,423,505 2,478,616 56,328 19,625 Contributions to defined contribution plans 5,067,320 3,874,230 645,833 486,909 Other staff related expenses 187,550 63,145 43,343 40,150 Total employee benefits expense 52,098,729 40,277,116 5,169,476 4,956,730 Less: Amount capitalised under deferred development costs (7,670,867) (7,611,721) - -

44,427,862 32,665,395 5,169,476 4,956,730

Group Company

28. Directors’ Remuneration

2015 2014 2015 2014RM RM RM RM

Directors of the CompanyExecutive: Salaries and other emoluments 1,560,000 1,888,000 1,560,000 1,888,000 Fees 28,000 24,000 28,000 24,000 Defined contribution plan 296,400 217,260 296,400 217,260 Total executive directors’ remuneration (excluding benefits-in-kind) 1,884,400 2,129,260 1,884,400 2,129,260 Estimated money value of benefits-in-kind 210,000 169,225 210,000 169,225 Total executive directors’ remuneration (including benefits-in-kind) 2,094,400 2,298,485 2,094,400 2,298,485 Non-executive: Fees 111,500 82,200 111,500 82,200 Total Directors' emoluments 2,205,900 2,380,685 2,205,900 2,380,685

Group Company

104


Company No. 453392 T - 75 -

28. Directors’ Remuneration (Cont’d)

2015 2014 2015 2014RM RM RM RM

Other Directors of the Group:Executive: Salaries and other emoluments 73,800 122,600 - - Contributions to defined contribution plan 8,856 17,592 - - Benefits-in-kind 12,000 24,000 - -

94,656 164,192 - -

Total directors' remuneration 2,300,556 2,544,877 2,205,900 2,380,685 Non-monetary benefits-in-kind paid to executive directors 56,000 41,325 - - Total Directors' remuneration 2,356,556 2,586,202 2,205,900 2,380,685

Represented by:Directors' remuneration 2,078,556 2,351,652 1,995,900 2,211,460 Non-monetary benefits-in-kind 278,000 234,550 210,000 169,225

2,356,556 2,586,202 2,205,900 2,380,685

Group Company

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

2015 2014

Executive directors:RM200,000 and below - - RM450,001 - RM550,000 - RM550,001 - RM650,000 - - RM700,001 - RM750,000 1 1 RM850,001 - RM950,000 - - RM1,550,001 - RM1,650,000 1 1

Non-Executive directors:Less than RM50,000 4 3

Number of Directors

105

Annual Report 2015

Company No. 453392 T - 76 -

29. Finance Costs

2015 2014 2015 2014RM RM RM RM

Interest expense on:Finance lease 29,818 16,326 20,472 1,423

Group Company

30. Profit before Taxation

Profit before taxation is derived at after charging:

2015 2014 2015 2014RM RM RM RM

Auditors' remuneration - statutory audit 152,224 112,044 15,000 15,000 - non-statutory audit 30,000 45,000 30,000 45,000 Bad debts written off 121,400 46,380 - - Impairment loss on : - trade receivables 412,490 1,250,072 - - - other investment - 97,975 - 97,975 Loss on disposal of property,

plant and equipment 44,394 4,358 - - Loss on foreign exchage - Realised 119,922 3,040 - - - Unrealised 941,741 551,381 121,404 34,307 Property, plant and equipment written off 75,535 107 42,067 107 Rental of premises 2,317,084 1,817,958 36,000 115,000

Group Company

106


Company No. 453392 T - 77 -

31. Taxation

2015 2014 2015 2014RM RM RM RM

Current tax- Malaysian income tax 2,736,900 1,981,500 721,300 246,300 - Foreign tax 247,738 212,296 - - Underprovision taxation in prior years 91,063 67,149 110,756 68,682

3,075,701 2,260,945 832,056 314,982

Deferred taxation (Note 22):Relating to origination and reversal of temporary differences 1,324,477 1,574,339 (8,244) 7,054 Overprovision in prior years (179,899) (11,364) (463) (11,636)

1,144,578 1,562,975 (8,707) (4,582) 4,220,279 3,823,920 823,349 310,400

Group Company

Malaysian income tax is calculated at the statutory tax rate of 25% (2014: 25%) of the estimated assessable profits for the financial year. The statutory tax rate will be reduced to 24% from the current year’s rate 25% effective year of assessment 2016. The computation of deferred tax as at 31 December 2015 has reflected the change. Taxation for other jurisdiction is calculated at the rates prevailing in the respective jurisdictions.

107

Annual Report 2015

Company No. 453392 T - 78 -

31. Taxation (Cont’d)

A reconciliation of income tax expenses applicable to profit before taxation at the statutory tax rate to income tax expenses at the effective income tax of the Group and of the Company are as follows:

2015 2014RM RM

Profit before taxation 25,753,240 25,383,685

At Malaysian statutory tax rate of 25% (2014: 25%) 6,438,310 6,345,921 Effect of change in tax rate (63,505) - Effect of different tax rates in other countries 107,360 302,372 Effect of income not subject to tax (2,878,705) (3,260,951) Effect of expenses not deductible for tax purpose 479,631 1,422,854 Deferred tax assets not recognised 1,099,919 591,281 Effect of utilisation of deferred tax assets not recognised in prior year (9,870) (1,633,342) Income exempted under pioneer status (864,025) - Underprovision of income tax expense in prior years 91,063 67,149 Overprovision of deferred tax in prior years (179,899) (11,364) Income tax expense for the financial year 4,220,279 3,823,920

Tax savings during the financial year arising from: - utilisation of tax losses brought forward from previous years 7,936 2,287,473

2015 2014RM RM

Profit before taxation 2,909,833 1,541,724

At Malaysian statutory tax rate of 25% (2014: 25%) 727,458 385,431 Effect of change in tax rate (4,144) - Effect of income not subject to tax (244,064) (204,766) Effect of expenses not deductible for tax purpose 233,806 72,689 Underprovision of income tax expense in prior years 110,756 68,682 Overprovision of deferred tax in prior years (463) (11,636) Income tax expense for the financial year 823,349 310,400

Group

Company

108


Company No. 453392 T - 79 -

31. Taxation (Cont’d)

The Group has unabsorbed capital allowances and unutilised tax losses carry forward, available to off-set against future taxable profits as follows:

2015 2014RM RM

Unutilised tax losses 19,160,115 13,841,172 Unabsorbed capital allowances 110,110 39,889

19,270,225 13,881,061

Group

32. Earnings Per Share

(a) Basic earnings per share

The basic earnings per share has been calculated based on the consolidated profit for the financial year attributable to owners of the parent and the weighted average number of ordinary shares in issue during the financial year as follows:

2015 2014RM RM

Profit attributable to owners of the parent for basic earnings 21,603,167 20,769,693

Weighted average number of ordinary shares in issue Issued ordinary shares at 1 January 479,741,700 450,053,000 Effect of ordinary shares issued during the year 64,551,804 3,577,906 Effect of treasury shares held (1,014) - Weighted average number of ordinary shares as at 31 December 544,292,490 453,630,906

Basic earnings per share (in sen) 3.97 4.58

Group

109

Annual Report 2015

Company No. 453392 T - 80 -

32. Earnings Per Share (Cont’d)

(b) Diluted earnings per share

Diluted earnings per share are calculated based on the adjusted consolidated profit for the financial year attributable to the owners of the parent and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares as follows:

2015 2014RM RM

Profit attributable to owners of the parent for basic earnings 21,603,167 20,769,693

Weighted average number of ordinary shares used in the calculation of basic earnings per share 544,292,490 453,630,906 Adjusted for: Assumed conversion of warrants 44,563,228 97,736,073

Weighted average number of ordinary shares as at 31 December (Diluted) 588,855,718 551,366,979

Diluted earnings per share (in sen) 3.67 3.77

Group

There have been no other transactions involving ordinary shares or potential ordinary shares since the end of the financial year end and before the authorisation of these financial statements except as disclose in Note 39.

33. Dividends

2015 2014RM RM

Final single-tier dividend of RM0.01 on 556,979,300 ordinary shares of RM0.10 each, in respect of the financial year ended 31 December 2014 paid on 30 July 2015 5,569,793 -

Group/Company

110


Company No. 453392 T - 81 -

33. Dividends (Cont’d) The Directors recommend the payment of a final single tier dividend of RM0.01 per ordinary share in respect of the current financial year ended 31 December 2015, subject to the approval of the shareholders at the forthcoming Annual General Meeting. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2016.

34. Commitments

2015 2014RM RM

Capital expenditureApproved and contracted for:Proposed acquisition of business from PT IFCA Consulting Indonesia 32,000,000 -

Group

Non-cancellable operating lease commitment

Group as lessors

2015 2014RM RM

Future minimum rental receivable:Not later than 1 year 18,336 17,160 Later than 1 year but not later than 3 years 12,439 23,400

30,775 40,560

Group

The Group entered into commercial property leases on its properties portfolio consisting of commercial and office space. These leases have remaining non-cancellable lease terms of between 1 and 3 years.

111

Annual Report 2015

Company No. 453392 T - 82 -

34. Commitments (Cont’d)

Non-cancellable operating lease commitment (Cont’d)

Group as lessees

2015 2014RM RM

Future minimum rental payable:Not later than 1 year 1,565,213 1,152,039 Later than 1 year but not later than 3 years 146,100 555,189

1,711,313 1,707,228

Group

Operating lease payments represent rental payable by the Group for the use of its business operations. The tenure of the lease is between 1 and 3 years and the monthly rental consideration for the lease of these properties have been pre-determined over the same period.

35. Related Parties Disclosures

(a) Identity of related parties

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

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel comprise the Directors and management personnel of the Group, having authority and responsibility for planning, directing and controlling the activities of the Group entities directly or indirectly.

112


Company No. 453392 T - 83 -

35. Related Parties Disclosures (Cont’d)

(b) Significant related party transactions

Related party transactions have been entered into in the normal course of business under negotiated terms. In addition to the related party balances disclosed in Note 9 of the financial statements, the significant related party transactions of the Company are as follows:

2015 2014RM RM

Reallocation head quarter costs charged to subsidiaries (4,629,241) (1,702,217) Rental receivable from a subsidiary - (2,200) Interest receivable from subsidiaries (668,140) (633,008) Royalty receivable from subsidiaries (5,220,386) (5,238,636) Sales to subsidiaries (632,305) (734,699)

Company

(c) The remuneration of key management personnel is same with the Directors’ remuneration as disclosed in Note 28. The Group and the Company have no other members of key management personnel apart from the Board of Directors.

36. Segmental Reporting

(a) Geographical segments

For the management purposes, the Group is organised into two geographical areas of the world, and has two reportable geographical segments as follows:

(i) Malaysia - the areas of operation are principally a turnkey e-business application provider focused on customised functionality on in-house industry specific software.

(ii) Foreign - the main activities are focused on the Group’s research and development centre, as the central domain for all customised projects and undertake marketing activities that cater for China market.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements.

Transactions between segments are carried out on agreed terms between both parties. The effects of such inter-segment transactions are eliminated on consolidation. The measurement basis and classification are consistent with those adopted in the previous financial year.

113

Annual Report 2015

Com

pany

No.

45

3392

T

- 84

-

36.

Segm

enta

l Rep

ortin

g (C

ont’d

)

(a)

Geo

grap

hica

l seg

men

ts (C

ont’d

)

Mal

aysi

aFo

reig

nEl

imin

atio

nsN

ote

2015

2014

2015

2014

2015

2014

2015

2014

RM

RM

RM

RM

RM

RM

RM

RM

Rev

enue

:Ex

tern

al re

venu

e67

,338

,824

65,5

01,8

06

34

,284

,457

23

,739

,209

-

-

10

1,62

3,28

1

89,2

41,0

15

Inte

r-se

gmen

t rev

enue

12,4

06,8

17

15

,199

,500

7,73

6,13

6

-

(2

0,14

2,95

3)

(15,

199,

500)

A-

-

Tota

l rev

enue

79,7

45,6

41

80

,701

,306

42,0

20,5

93

23,7

39,2

09

(20,

142,

953)

(1

5,19

9,50

0)

101,

623,

281

89

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Res

ults

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23,7

60,9

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27

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15

1,03

8,28

6

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91,4

53

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9,71

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(261

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fin

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ts

114


Company No. 453392 T - 85 -

36. Segmental Reporting (Cont’d)

(a) Geographical segments (Cont'd)

A Inter-segment revenues are eliminated on consolidation

B Other material non-cash expenses consist of the following items as presented in the respective notes to financial statements:

2015 2014RM RM

Bad debts written off 121,400 46,380 Fair value gain of investment properties (6,000) (9,000) Impairment loss on: - trade receivables 412,490 1,250,072 - other investments - 97,975 Loss/(Gain) on disposal of property, plant and equipment 26,235 (110,678) Property, plant and equipment written off 75,535 107 Reversal of impairment loss on trade receivables (125,537) (12,962) Unrealised (gain)/loss on foreign exchange (264,526) 26,405

239,597 1,288,299

C Additions to non-current assets consist of:

2015 2014RM RM

Property, plant and equipment 1,844,338 974,976 Development costs 7,452,422 9,004,991

9,296,760 9,979,967

115

Annual Report 2015

Company No. 453392 T - 86 -

36. Segmental Reporting (Cont’d)

(a) Geographical segments (Cont'd)

D The following item is deducted from segment assets to arrive at total assets reported in the statements of financial position:

2015 2014RM RM

Inter-segment assets (40,831,563) (37,463,646)

E The following item is deducted from segment liabilities to arrive at total liabilities reported in the statements of financial position:

2015 2014RM RM

Inter-segment liabilities (71,853,881) (58,850,683)

Information about major customers

Revenue from two (2014: two) major customers amount to RM6,438,870 (2014: RM6,357,227), arising from sales by the Foreign segment.

Non-current assets information based on the geographical location of assets is as follow:

2015 2014RM RM

Malaysia 16,988,769 16,137,292 Foreign 12,551,905 6,777,807

29,540,674 22,915,099

Non-current assets

116


Com

pany

No.

45

3392

T

- 87

-

36.

Segm

enta

l Rep

ortin

g (C

ont’d

)

(b)

Busi

ness

seg

men

ts

The

Gro

up is

als

o or

gani

sed

on a

wor

ldw

ide

basi

s in

to th

ree

maj

or b

usin

ess

segm

ents

:

(i) S

oftw

are

appl

icat

ion

and

roya

lty in

com

e (ii

) H

ardw

are,

net

wor

king

and

ope

ratin

g sy

stem

s (ii

i) M

aint

enan

ce, s

uppo

rt sy

stem

, tra

inin

g an

d im

plem

enta

tion

2015

2014

2015

2014

2015

2014

2015

2014

RM

RM

RM

RM

RM

RM

RM

RM

Tota

l rev

enue

from

exte

rnal

cus

tom

ers

50,3

79,2

56

44

,715

,983

12,0

85,9

17

13

,232

,416

39,1

58,1

08

31

,292

,616

101,

623,

281

89

,241

,015

Segm

ent a

sset

s69

,400

,757

63,9

30,6

70

3,

013,

145

4,36

7,21

7

48

,390

,356

24,3

23,7

64

12

0,80

4,25

8

92,6

21,6

51

Addi

tions

to

no

n-cu

rren

t ass

ets

3,07

1,53

2

3,

802,

104

17,6

71

53

,655

6,20

7,55

7

6,

124,

208

9,29

6,76

0

9,

979,

967

Mai

nten

ance

, sup

port

syst

em, t

rain

ing

and

impl

emen

tatio

n P

er c

onso

lidat

ed

f

inan

cial

sta

tem

ents

So

ftwar

e ap

plic

atio

nsan

d ro

yalty

inco

me

Har

dwar

e, n

etw

orki

ngan

d op

erat

ing

syst

ems

117

Annual Report 2015

Company No. 453392 T - 88 -

37. Financial Instruments

(a) Classification of financial instruments

Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The principal accounting policies in Note 3 describe how the classes of the financial instruments are measured and how income and expenses including fair values gain or loss are recognised.

The following table analyses the financial assets and liabilities in the statements of financial position by the class of financial instruments to which they are assigned and therefore by the measurement basis:

Financialliabilities

Loans and measured atreceivables amortised cost Total

RM RM RM

Group2015Financial AssetsTrade receivables 21,493,036 - 21,493,036 Other receivables 951,934 - 951,934

Fixed deposits with licensed banks 26,008,548 - 26,008,548 Cash and bank balances 41,387,267 - 41,387,267 Total financial assets 89,840,785 - 89,840,785

Financial LiabilitiesTrade payables - 1,194,195 1,194,195 Other payables - 9,261,694 9,261,694 Finance lease payables - 845,033 845,033 Total financial liabilities - 11,300,922 11,300,922

Group2014Financial AssetsTrade receivables 16,912,452 - 16,912,452 Other receivables 1,521,402 - 1,521,402


118


Company No. 453392 T - 89 -

37. Financial Instruments (Cont’d)

(a) Classification of financial instruments (Cont’d)



RM RM RM

Group2014Financial LiabilitiesTrade payables - 1,856,453 1,856,453 Other payables - 9,395,998 9,395,998 Finance lease payables - 190,419 190,419 Total financial liabilities - 11,442,870 11,442,870

Company2015Financial AssetsTrade receivables 231,268 - 231,268 Other receivables 92,489 - 92,489 Amount due from subsidiaries 15,439,943 - 15,439,943


Financial LiabilitiesOther payables - 711,143 711,143 Finance lease payables - 422,097 422,097 Total financial liabilities - 1,133,240 1,133,240

Company2014Financial AssetsTrade receivables 901,488 - 901,488 Other receivables 187,246 - 187,246 Amount due from subsidiaries 15,095,269 - 15,095,269


119

Annual Report 2015

Company No. 453392 T - 90 -


(a) Classification of financial instruments (Cont’d)



RM RM RM

Company2014Financial LiabilitiesOther payables - 1,393,889 1,393,889 Amount due to subsidiaries - 255,360 255,360 Finance lease payables - 18,621 18,621 Total financial liabilities - 1,667,870 1,667,870

(b) Financial risk management objectives and policies

The Group’s financial risk management policy is to ensure that adequate financial resources are available for the development of the Group’s operations whilst managing its credit, liquidity, foreign currency, interest rate and market price risks. The Group operates within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions.

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

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

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

(i) 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. The Group’s exposure to credit risk arises principally from its receivables from customers and deposits with banks. The Company’s exposure to credit risk arises principally from loans and advances to subsidiary companies.

120


Company No. 453392 T - 91 -


(b) Financial risk management objectives and policies (Cont’d)

(i) Credit risk (Cont’d)

The Group has adopted a policy of only dealing with creditworthy counterparties. Management has a credit policy in place to control credit risk by dealing with creditworthy counterparties and deposit with banks with good credit rating. The exposure to credit risk is monitored on an ongoing basis and action will be taken for long outstanding debts.

The Company provides unsecured loans and advances to subsidiary companies. The Company monitors on an ongoing basis the results of the subsidiary companies and repayments made by the subsidiary companies.

The carrying amounts of the financial assets recorded on the statements of financial position at the end of the financial year represents the Group’s and the Company’s maximum exposure to credit risk.

Credit risk concentration profile

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

RM % of total RM

% of total

By Country:Malaysia 14,065,346 65% 12,352,949 73%People's Republic of China 6,188,664 29% 3,037,414 18%Singapore 25,160 0% 108,436 1%Indonesia 133,473 1% 738,634 4%Philippines 125,883 1% 255,371 2%South Africa 914,109 4% 374,705 2%Other countries 40,401 0% 44,943 0%

21,493,036 100% 16,912,452 100%

Group

20142015

121

Annual Report 2015

Company No. 453392 T - 92 -


(a) Financial risk management objectives and policies (Cont’d)

(i) Credit risk (Cont’d)

RM % of total RM

% of total

By Country:Malaysia 97,795 42% 162,854 18%Indonesia 133,473 58% 738,634 82%

231,268 100% 901,488 100%

Company 2015 2014

As at the end of the financial year 2015, the Group had approximately 66% (2014: 62%) of the Group's trade receivables were due from 26 (2014: 32) major customers who are reputable and located in Malaysia.

Information regarding trade receivables that are neither past due nor impaired and either past due or impaired, are disclosed in Note 10.

(ii) Liquidity risk

Liquidity risk refers to the risk that the Group or the Company will encounter difficulty in meeting its financial obligations as they fall due. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.

The Group’s and the Company’s funding requirements and liquidity risk are managed with the objective of meeting business obligations on a timely basis. The Group finances its liquidity through internally generated cash flows and minimises liquidity risk by keeping committed credit lines available.

The following table analyses the remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay.

122


Com

pany

No.

45

3392

T

- 93

-

37.

Fina

ncia

l Ins

trum

ents

(Con

t’d)

(b)

Fina

ncia

l ris

k m

anag

emen

t obj

ectiv

es a

nd p

olic

ies

(Con

t’d)

(ii)

Liqu

idity

risk

(Con

t’d)

On

dem

and

Car

ryin

gor

with

inam

ount

1 ye

ar1

- 2 y

ears

2 - 3

yea

rs3

- 4 y

ears

4 - 5

yea

rsTo

tal

RM

RM

RM

RM

RM

RM

RM

Gro

up20

15Fi

nanc

ial l

iabi

litie

sTr

ade

paya

bles

1,19

4,19

5

1,

194,

195

-

-

-

-

1,19

4,19

5

O

ther

pay

able

s9,

261,

694

9,26

1,69

4

-

-

-

-

9,

261,

694

Fin

ance

leas

e

paya

bles

84

5,03

3

235,

916

21

4,20

3

201,

576

20

1,57

6

76,4

30

92

9,70

1

11,3

00,9

2210

,691

,805

214,

203

201,

576

201,

576

76

,430

11

,385

,590

2014

Fina

ncia

l lia

bilit

ies

Trad

e pa

yabl

es1,

856,

453

1,85

6,45

3

-

-

-

-

1,

856,

453

Oth

er p

ayab

les

9,39

5,99

8

9,

395,

998

-

-

-

-

9,39

5,99

8

F

inan

ce le

ase

pa

yabl

es

190,

419

15

0,64

2

46,4

38

-

-

-

197,

080

11,4

42,8

7011

,403

,093

46,4

38

-

-

-

11,4

49,5

31

Tot

al u

ndis

coun

ted

fin

anci

al li

abilit

ies

Tot

al u

ndis

coun

ted

fin

anci

al li

abilit

ies

123

Annual Report 2015

Com

pany

No.

45

3392

T

- 94

-

37.

Fina

ncia

l Ins

trum

ents

(Con

t’d)

(c)

Fina

ncia

l ris

k m

anag

emen

t obj

ectiv

es a

nd p

olic

ies

(Con

t’d)

(ii)

Liqu

idity

risk

(Con

t’d)

On

dem

and

Car

ryin

gor

with

inam

ount

1 ye

ar1

- 2 y

ears

2 - 3

yea

rs3

- 4 y

ears

4 - 5

yea

rsTo

tal

RM

RM

RM

RM

RM

RM

RM

Com

pany

2015

Fina

ncia

l lia

bilit

ies

Oth

er p

ayab

les

711,

143

71

1,14

3

-

-

-

-

711,

143

F

inan

ce le

ase

pa

yabl

es

422,

097

11

7,01

2

112,

008

11

2,00

8

112,

008

9,

294

462,

330

1,13

3,24

0

828,

155

112,

008

112,

008

112,

008

9,

294

1,17

3,47

3

2014

Fina

ncia

l lia

bilit

ies

Oth

er p

ayab

les

1,39

3,88

9

1,

393,

889

-

-

-

-

1,39

3,88

9

Am

ount

due

to s

ubsi

diar

ies

255,

360

25

5,36

0

-

-

-

-

255,

360

F

inan

ce le

ase

pa

yabl

es

18,6

21

14,3

22

5,00

4

-

-

-

19

,326

1,66

7,87

0

1,66

3,57

1

5,00

4

-

-

-

1,

668,

575

Tot

al u

ndis

coun

ted

fin

anci

al li

abilit

ies

Tot

al u

ndis

coun

ted

fin

anci

al li

abilit

ies

124


Company No. 453392 T - 95 -



(iii) Interest rate risk

The Group’s exposure to interest rate risk arises primarily from its’ deposits placed with licensed banks and interest bearing financial liabilities. The Group manages its interest rate risk for the interest bearing deposits placements by placing such balances on varying maturities and interest rate returns. The Group’s policy in dealing with interest bearing financial liabilities is to obtain the financing with the most favourable interest rates in the market.

Fair value sensitivity analysis for fixed rate instruments

The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rate at the end of the reporting period would not affect profit or loss.

(iv) Foreign currency exchange risk

The Group is exposed to foreign currency risk on transactions that are denominated in foreign currencies other than the respective functional currencies of the Group’s entities. The currencies giving rise to this risk are primarily Brunei Dollar (BND), Australian Dollar (AUD), Thai Baht (THB). European (Euro) and United States Dollar (USD).

The Group has not entered into any derivative instruments for hedging or trading purposes as the net exposure to foreign currency risk is not significant. Where possible, the Group will apply natural hedging by selling and purchasing in the same currency. However, the exposure to foreign currency risk is monitored from time to time by management.

125

Annual Report 2015

Com

pany

No.

45

3392

T

- 96

-

37.

Fina

ncia

l Ins

trum

ents

(Con

t’d)

(b)

Fina

ncia

l ris

k m

anag

emen

t obj

ectiv

es a

nd p

olic

ies

(Con

t’d)

(iv)

Fore

ign

curr

ency

exc

hang

e ris

k (C

ont’d

)

The

carr

ying

am

ount

s of

the

Gro

up’s

for

eign

cur

renc

y de

nom

inat

ed f

inan

cial

ass

ets

and

finan

cial

liab

ilitie

s at

the

en

d of

the

repo

rting

per

iod

are

as fo

llow

s: TH

BB

ND

Euro

RM

Tota

lR

MR

MR

MR

MR

M

2015

Rin

ggit

Mal

aysi

aR

ecei

vabl

es-

74,8

02

-

-

74

,802

Uni

ted

Stat

es D

olla

rC

ash

at B

ank

-

-

-

2,

328,

537

2,

328,

537

R

ecei

vabl

es14

,189

-

-

-

14

,189

2014

Rin

ggit

Mal

aysi

aR

ecei

vabl

es-

62,3

11

-

-

62

,311

Uni

ted

Stat

es D

olla

rC

ash

at B

ank

-

-

1,20

4

100,

092

101,

296

Rec

eiva

bles

6,95

8

-

-

-

6,

958

<---

Fina

ncia

l Ass

ets

Hel

d in

Non

-Fun

ctio

nal C

urre

ncie

s--->

126


Company No. 453392 T - 97 -



(iv) Foreign currency exchange risk (Cont’d)

Foreign currency risk sensitivity analysis

The following table demonstrates the sensitivy of the Group’s Profit for the financial year to a reasonably possible change in the THB, BRN, AUD, Euro and USD exchange rates against the respective functional currencies of the Group’s entities, with all other variables held constant.

2015 2014RM RM

THB/USD - strenghten 5% 709 348 - weakened 5% (709) (348)

BRN/RM - strenghten 5% 3,740 3,116 - weakened 5% (3,740) (3,116)

AUD/USD - strenghten 5% - - - weakened 5% - -

RM/USD - strenghten 5% 116,427 5,005 - weakened 5% (116,427) (5,005)

EUR/USD - strenghten 5% - 60 - weakened 5% - (60)

Group

Decrease/(Increase) in Net profit of tax

127

Annual Report 2015

Company No. 453392 T - 98 -


(c) Fair values of financial assets and financial liabilities

The carrying amounts of receivables and payables, cash and bank balances, fixed deposits with licensed banks and short term borrowings approximate their fair value due to the relatively short term nature of these financial instruments and/or insignificant impact of discounting.

The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in the statements of financial position.

(i) 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.

There were no transfers between levels during current and previous financial years.

(ii) Level 1 fair value

Level 1 fair value is derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

(iii) Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Non-derivative financial instruments Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period.

(iv) Level 3 fair value

Level 3 fair values for the financial assets and liabilities are estimated using unobservable inputs.

128


Com

pany

No.

45

3392

T

- 99

-

37.

Fina

ncia

l Ins

trum

ents

(Con

t’d)

(c)

Fair

valu

es o

f fin

anci

al a

sset

s an

d fin

anci

al li

abilit

ies

(Con

t’d)

Lev

el 1

L

evel

2

Lev

el 3

T

otal

L

evel

1

Lev

el 2

L

evel

3

Tot

al

201

5 R

M

RM

R

M

RM

R

M

RM

R

M

RM

R

M

RM

G

roup

F

inan

cial

liab

ilitie

s Fi

nanc

e le

ase

paya

bles

- -

-

-

-

6

38,4

84

-

638

,484

638

,484

643

,468

Com

pany

F

inan

cial

liab

ilitie

s

Fina

nce

leas

e pa

yabl

es -

-

-

-

-

3

21,8

02

-

321

,802

321

,802

322

,269

201

4 G

roup

F

inan

cial

liab

ilitie

s Fi

nanc

e le

ase

paya

bles

-

- -

-

-

3

8,01

4

-

38,

014

38,0

14

45,1

10

Com

pany

F

inan

cial

liab

ilitie

s

Fina

nce

leas

e pa

yabl

es

-

-

-

-

-

4,0

32

-

4,03

2

4

,032

4

,935

Fai

r val

ue o

f fin

anci

al in

stru

men

ts

carr

ied

at fa

ir va

lue

Fai

r val

ue o

f fin

anci

al in

stru

men

ts

not c

arrie

d at

fair

valu

e

Tot

al fa

ir va

lue

Car

ryin

g am

ount

129

Annual Report 2015

Company No. 453392 T - 100 -

38. Capital Management Objectives and Policies

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

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions to ensure that the Group is able to continue as a going concern and maintains an optimal capital structure so as to maximise shareholder value. No changes were made in the objectives, policies or processes during the financial years ended 31 December 2015 and 31 December 2014.

The gearing ratios are as follows:

2015 2014 2015 2014RM RM RM RM

Total loans and borrowings (Note 21) 845,033 190,419 422,097 18,621 Less: Cash and cash

equivalent (61,782,263) (46,352,845) (26,624,607) (22,235,110) Total net debts (60,937,230) (46,162,426) (26,202,510) (22,216,489)

Total equity 94,474,124 71,117,473 59,066,103 53,821,013 Total equity and net debts 33,536,894 24,955,047 32,863,593 31,604,524

Gearing ratio N/A N/A N/A N/A

Group Company

The gearing ratio analysis is not applicable as the cash and cash equivalents are sufficient to repay all the borrowings.

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

130


Company No. 453392 T - 101 -

39. Subsequent Events

Subsequent to the financial year, the following subsequent events took place for the Company and its subsidiary companies:

(a) The Company increased its issued and paid-up ordinary share capital from RM57,055,410 to RM59,229,090 by issuance of 21,736,800 new ordinary shares of RM0.10 each for cash arising from exercise of warrants.

(b) On 6 January 2016, IFCA MSC Berhad (“IFCA”) acquired the business of PT IFCA Consulting Indonesia (“PICI”) for a total purchase consideration of RM32 million with the combination of cash amounting to RM16 million and the issuance of 16,000,000 new ordinary shares of RM0.10 each in IFCA.

The cash consideration amounting to RM4,000,000 has been paid to PICI in accordance to the terms of the BSA and 16,000,000 consideration Shares which were issued and allotted to PICI at the issue price of RM1.00 per IFCA Share pursuant to the acquisition were listed and quoted on the ACE Market of Bursa Securities 6 January 2016 marking the completion of the acquisition.

IFCA acquired the business of PICI is to have direct control over the strategic direction and management of the business in terms of new products offerings to a larger market segment as well as expand its business coverage geographically within Indonesia.

Except for the above, no further quantitative disclosures are made in respect of the abovementioned acquisition subsequent to the current financial year as the determination of the cost of business combination, which entails the determination of the fair values of assets obtained and liabilities incurred or assumed, has yet to be completed. Pending the finalisation of the determination of the cost of business combination for the abovementioned acquisition, the directors are of the opinion that it is impracticable at this juncture to obtain and disclose the required quantitative information.

40. Date of Authorisation For Issue

The financial statements of the Group and of the Company for the financial year ended 31 December 2015 were authorised for issue in accordance with a resolution of the Board of Directors on 19 April 2016.

131

Annual Report 2015Company No. 453392 T

41. Supplementary Information on the Disclosure of Realised and Unrealised Profits or Losses

The following analysis of realised and unrealised (accumulated losses)/retained profits of the Group and of the Company as at the reporting date is presented in accordance with the directive issued by Bursa Securities and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Securities Listing Requirements, as issued by the Malaysian Institute of Accountants.

2015 2014 2015 2014RM RM RM RM

Total retained profits/ (accumulated losses) - realised (16,722,385) (20,521,252) (7,405,420) (3,924,817) - unrealised 792,161 (2,089,498) (761,018) (758,312)

(15,930,224) (22,610,750) (8,166,438) (4,683,129) Less: Consolidation adjustments 44,859,282 35,506,434 - -

28,929,058 12,895,684 (8,166,438) (4,683,129)

Group Company

The disclosure of realised and unrealised profit or losses above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Securities and should not be applied for any other purposes.

132


List of Properties

Title / Location Description / Existing Use

Registered Owner

Age of Building (Years)

Land / Built-up

Area

Tenure Carrying Amount @ 31.12.2015

(RM)

Original Cost (RM)

Johor Property 4-storey shop office at 31, Jalan Permas 10/07, Taman Permas Jaya, 81750 Johor Bahru, Johor

Ground Floor & 1st -

JB Office 2nd & 3rd - Tenanted

IFCA MSC BHD

21 1,920 sq. feet

Freehold 555,000 750,000

Penang PropertyShop Office at 441-2-5, Pulau Tikus Plaza, Jalan Burmah, 10350 Penang

Penang Office

IFCA MSC Bhd

19 136.85 sq.

metres

Freehold 315,980 427,000

Selangor Properties2 units of shoplots & 10 units of office lots at 17 and 19, Jalan PJU 1/42A, Dataran Prima, 47301 Petaling Jaya, Selangor

Head Office

IFCA MSC BHD

17 20,311 sq. feet

Freehold 3,404,000 4,600,000

Apartment D-G-38 Block Rapis, Pangsapuri Las Palmas, Jalan Desa Ria, Bandar Country Homes, 48000 Rawang, Selangor

Rented Developer -

Tanco Development Sdn Bhd

16 755 sq. Feet

Freehold 37,536 88,800

Unit 1-1 in a 4-storey shop office at 2-1, Jalan Desa 9/5, Bandar Country Homes, 48000 Rawang, Selangor

Vacant IFCA MSC BHD

14 1,629 sq. feet

Freehold 210,000 291,800

Perak PropertyBukit Kinding Orchard Land, held under Green 31413, Lot 127202, Mukim of Hulu Kinta, Perak

Vacant Sunrise

Excelsior (M) Sdn

Bhd

- 0.4050 hectare

Freehold 83,100 198,000

List of Properties

Title / Location Description / Existing Use

Registered Owner

Age of Building (Years)

Land / Built-up

Area

Tenure Carrying Amount @ 31.12.2015

(RM)

Original Cost (RM)

Johor Property 4-storey shop office at 31, Jalan Permas 10/07, Taman Permas Jaya, 81750 Johor Bahru, Johor

Ground Floor & 1st -

JB Office 2nd & 3rd - Tenanted

IFCA MSC BHD

21 1,920 sq. feet

Freehold 555,000 750,000

Penang PropertyShop Office at 441-2-5, Pulau Tikus Plaza, Jalan Burmah, 10350 Penang

Penang Office

IFCA MSC Bhd

19 136.85 sq.

metres

Freehold 315,980 427,000

Selangor Properties2 units of shoplots & 10 units of office lots at 17 and 19, Jalan PJU 1/42A, Dataran Prima, 47301 Petaling Jaya, Selangor

Head Office

IFCA MSC BHD

17 20,311 sq. feet

Freehold 3,404,000 4,600,000

Apartment D-G-38 Block Rapis, Pangsapuri Las Palmas, Jalan Desa Ria, Bandar Country Homes, 48000 Rawang, Selangor

Rented Developer -

Tanco Development Sdn Bhd

16 755 sq. Feet

Freehold 37,536 88,800

Unit 1-1 in a 4-storey shop office at 2-1, Jalan Desa 9/5, Bandar Country Homes, 48000 Rawang, Selangor

Vacant IFCA MSC BHD

14 1,629 sq. feet

Freehold 210,000 291,800

Perak PropertyBukit Kinding Orchard Land, held under Green 31413, Lot 127202, Mukim of Hulu Kinta, Perak

Vacant Sunrise

Excelsior (M) Sdn

Bhd

- 0.4050 hectare

Freehold 83,100 198,000

133

Annual Report 2015

Analysis of Shareholding as at 19 April 2016

1. Analysis of Shareholdings

Authorised Capital : RM75,000,000 Issued And Fully Paid-up Capital : RM60,829,090 Class of Shares : Ordinary Shares of 10 sen each fully paid Voting Rights : One vote per shareholder on a show of hands One vote per share on a poll

Breakdown of Shareholdings

Size of Holdings No. ofHolders % No. of

Shares %

Less than 100 20 0.23 465 0.00100 - 1,000 582 6.69 450,958 0.071,001 - 10,000 4,423 50.87 27,061,500 4.4510,001 - 100,000 3,229 37.14 107,583,900 17.69100,001 and below 5% 440 5.06 272,589,434 44.815% and above 1 0.01 200,604,643 32.98TOTAL 8,695 100.00 608,290,900 100.00

Substantial Shareholders As At 19 April 2016

No. of Shares Held

Name of Shareholders Direct Interest % Indirect

Interest %

IFCA Software (Asia) Sdn Bhd 208,604,643 32.98 - -Yong Keang Cheun 3,650,045 0.46 *209,605,008 34.46Yong Kian Keong 1,000,365 0.18 #212,254,688 34.89

Directors’ Shareholdings As At 19 April 2016

No. of Shares Held

Name of Directors Direct Interest % Indirect

Interest %

Yong Keang Cheun 3,650,045 0.60 *209,605,008 34.46Yong Kian Keong 1,000,365 0.16 #212,254,688 34.89Ooi Bee Bee 4,400,598 0.72 - -Ngian Siew Siong 130,000 0.02 - -

*Deemed interest by virtue of his interest in IFCA Software (Asia) Sdn. Bhd and being the brother of Yong Kian Keong, a fellow director of IFCA Software (Asia) Sdn. Bhd. #Deemed interest by virtue of his interest in IFCA Software (Asia) Sdn. Bhd and being the brother of Yong Keang Chuen, a fellow director of IFCA Software (Asia) Sdn. Bhd.

134


Analysis of Shareholding & Warrantholdings (cont’d)as at 19 April 2016

1. Analysis of Shareholdings (cont’d)

List of Thirty (30) Largest Registered Shareholders as at 19 April 2016

No. Name of Shareholders No. of Shares

%

1. IFCA Software (Asia) Sdn Bhd 200,604,643 32.982. HSBC Nominees (Asing) Sdn Bhd

Beneficiary : HSBC-FS For Legg Mason Western Asset Southeast Asia Special Situations Trust (201061)

20,192,900 3.32

3. HSBC Nominees (Tempatan) Sdn Bhd Beneficiary : HSBC (M) Trustee Bhd for RHB Kidsave Trust

17,647,400 2.90

4. P.T. IFCA Consulting Indonesia 16,000,000 2.635. Citigroup Nominees (Asing) Sdn Bhd

Beneficiary: Exempt AN For Citibank New York (Norges Bank 14)

15,000,000 2.47

6. DB (Malaysia) Nominee (Asing) Sdn Bhd Beneficiary : SSBT Fund 62L2 For USAA Emerging Markets Fund

10,281,300 1.69

7. Citigroup Nominees (Tempatan) Sdn Bhd Beneficiary : Employees Provident Fund Board (RHB INV)

9,500,000 1.56

8. IFCA Software (Asia) Sdn Bhd 8,000,000 1.329. DB (Malaysia) Nominee (Asing) Sdn Bhd

Beneficiary : SSBT Fund 59DQ For Oregon Public Employees Retirement System

6,024,600 0.99

10. CIMB Investment Bank Berhad Beneficiary : Exempt AN CLR Account For RHB Asset Management Sdn Bhd

5,600,000 0.92

11. HSBC Nominees (Tempatan) Sdn Bhd Beneficiary : HSBC (M) Trustee Bhd For RHB-OSK Private Fund-Series 3

4,925,000 0.81

12. HSBC Nominees (Tempatan) Sdn Bhd Beneficiary : HSBC (M) Trustee Bhd for RHB Growth and Income Focus Trust

4,750,000 0.78

13. Lai Chie King 3,820,000 0.6314. HSBC Nominees (Tempatan) Sdn Bhd

Beneficiary : HSBC (M) Trustee Bhd For RHB Smart Treasure Fund

3,800,000 0.62

15. Yong Keang Cheun 3,650,000 0.6016. Citigroup Nominees (Tempatan) Sdn Bhd

Beneficiary: Universal Trustee (Malaysia) Berhad for CIMB Islamic Small Cap Fund

3,468,700 0.57

17. Ooi Sin Heng 3,150,000 0.5218. Citigroup Nominees (Asing) Sdn Bhd

Beneficiary : CBNY for DFA Emerging Markets Small Cap Series

3,143,100 0.52

19. Citigroup Nominees (Asing) Sdn Bhd Beneficiary : CBNY For Emerging Market Core Equity Portfolio DFA Investment Dimensions Group Inc.

3,132,300 0.51

20. Ooi Bee Bee 2,868,300 0.47

135

Annual Report 2015

Analysis of Shareholding & Warrantholdings (cont’d)as at 19 April 2016

1. Analysis of Shareholdings (cont’d)

List of Thirty (30) Largest Registered Shareholders as at 19 April 2016 (cont’d)

No. Name of Shareholders No. of Shares

%

21. Wong Boon Kee 2,035,000 0.3322. HSBC Nominees (Tempatan) Sdn Bhd

Beneficiary : HSBC (M) Trustee Bhd for RHB Equity Trust 2,000,000 0.33

23. HSBC Nominees (Tempatan) Sdn Bhd Beneficiary : HSBC (M) Trustee Bhd for RHB Dana Hazeem

1,970,000 0.32

24. HSBC Nominees (Asing) Sdn Bhd Beneficiary TNTC for Nuclear Electric Insurance Limited

1,692,400 0.28

25. Alliancegroup Nominees (Tempatan) Sdn Bhd Beneficiaary : Pledged Securities Account for Yeoh Poh Choo

1,600,000 0.26

26. UOB Kay Hian Nominees (Asing) Sdn Bhd Beneficiary : Exempt AN for UOB Kay Hian Pte Ltd (A/c Clients)

1,600,000 0.26

27. Wong Fooi 1,350,000 0.2228. Universal Trustee (Malaysia) Berhad

Beneficiary : KAF Dana Adib 1,290,000 0.21

29. Kenanga Nominees (Tempatan) Sdn Bhd Beneficiary : Pledged Securities Account for Kuek Eng Mong

1,227,000 0.20

30. CIMSEC Nominees (Tempatan) Sdn Bhd Beneficiary : CIMB Bank for Tan Chee Young (MY2263)

1,200,000 0.20

Total 361,522,643 59.42

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IFCA MSC BERHAD (Company No. 453392-T)

FORM OF PROXY I/We …………………………………………………………………………………………………………….……................ NRIC No./Passport No./Company No……………………………………………………………………….……................ of………………………………………………………………………………………………………………………............... being a member of IFCA MSC BERHAD (“the Company”) hereby appoint …………………………………………. NRIC No./Passport No.……………………………………………..….………………………….………………….............. of..………………………………………………………………………………………………………………….……............ or failing him/her the Chairman of the Meeting as my/our proxy to vote on my/our behalf at the 18th Annual General Meeting of the Company to be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Friday, 26 May 2016 at 2.30 p.m. and at any adjournment thereof. My/ our proxy is to vote as indicated below:-

Resolutions For Against

Resolution 1 To approve the Final Single-Tier Dividend

Resolution 2 Re-election of Chew See Chiew

Resolution 3 Re-election of Ooi Bee Bee

Resolution 4 Re-election of Yong Kian Keong

Resolution 5 Re-election of Chow Chee Keng

Resolution 6 Re-election of Ngian Siew Siong

Resolution 7 Approval of payment of Directors’ fees

Resolution 8 To re-appoint Messrs UHY as Auditors of the Company and authorise the Directors to fix their remuneration.

Resolution 9 Proposed Renewal of Authority for the Company to Purchase Its Own Shares

Please indicate with an “X” in the appropriate space against each resolution how you wish your votes to be cast. In the absence of specific directions, the proxy may vote or abstain from voting on the resolutions as he/she may think fit. No. of Shares Held ___________________________________________ Signature of Member(s)/Common Seal of the Corporation Date _______________________

Where a member appoints 2 proxies (refer Note c), please specify the proportions of the member’s holdings to be represented by each proxy. Proxy No. of Shares %

First Proxy

Second Proxy

Notes: a) A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote on his stead. A proxy need not be a

member of the Company. There shall be no restriction as to the qualification of a proxy and the provisions of Section 149(1) (a), (b) and (c) of the Companies Act, 1965 shall not apply to the Company.

b) The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation, either under the corporation’s Seal or under the hand of an officer or attorney duly authorised.

c) Where a member appoints more than one (1) proxy to attend the same meeting, such appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

d) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”), it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said securities account.

e) Where a member of the Company is an exempt authorised nominee as defined under the SICDA, which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

f) Where the authorised nominee or an exempt authorised nominee appoints two (2) or more proxies, the proportion of the shareholdings to be represented must be specified in the instrument appointing the proxies.

g) The instrument appointing a proxy or proxies duly completed must be deposited at the Registered Office of the Company situated at 24B, Persiaran Zaaba, Taman Tun Dr. Ismail, 60000 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting i.e. on or before 2.30 p.m., Tuesday, 24 May 2016.

h) A depositor whose name appears in the Record of Depositors as at 18 May 2016 shall be regarded as a Member of the Company and be entitled to attend this Annual General Meeting or appoint a proxy to attend and vote on his behalf.

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AFFIXSTAMP

1st fold here

Fold this flap for sealing

Then fold here

Please Affix Stamp Here

The Company Secretary 24B, Persiaran Zaaba, Taman Tun Dr. Ismail, 60000 Kuala Lumpur

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