(644800-X) · Given the prevailing market and industry conditions, the Board of Directors remain...

(644800-X)

The completion of the 425kW solar photovoltaic plant marked the Group’s first entry into power generation and renewable energy. Built on rooftop area of 2,760 sq. m. and equipped with 1,370 photovoltaic modules, the plant is expected to produce average 616MW of clean energy annually for the national grid using photovoltaic technology.

Over a period of21 years

425kW SOLAR PHOTOVOLTAIC PLANT

Plot 82, Bayan Lepas, Penang

Save 9,438 tonnescarbon dioxide (CO2)

Offset 3.6 mil KM driven in average car

Equivalent to planting 7.02 acres of trees

Corporate Information

Corporate Structure

Group Financial Highlights

Chairman’s Statement

Management Discussion and Analysis

Profile of Directors

Corporate Governance Statement

Audit Committee Report

Statement on Risk Management and Internal Control

Other Disclosure Requirements

Report and Financial Statements

List of Landed Properties

Analysis of Shareholdings

Analysis of Warrant Holdings

Notice of Annual General Meeting

Statement Accompanying Notice of Annual General Meeting

Proxy Form

CONTENTS

02

03

04

05-06

07-10

11-12

13-20

21-24

25-26

27-29

30-104

105

106-107

108-109

110-111

112

2 AT SySTemATizATion BerhAdAnnuAl reporT 2016

CORPORATE INFORMATION

BOARD OF DIRECTORS

Dato’ Nik Ismail Bin Dato’ Nik YusoffIndependent Non-Executive Chairman

Dato’ Ir. Auniah Binti AliExecutive Director

Dr. Ch’ng Huck KhoonIndependent Non-Executive Director

Chang Vun LungIndependent Non-Executive Director

Mak Siew WeiExecutive Director

AUDIT COMMITTEE

Dr. Ch’ng Huck Khoon (Chairman)Dato’ Nik Ismail Bin Dato’Nik YusoffChang Vun Lung

REMUNERATION COMMITTEE


NOMINATING COMMITTEE


COMPANY SECRETARIES

Angelina Cheah Gaik Suan (MAICSA 7035272)Lee Mei Mei (MAICSA 7062284)

REGISTERED OFFICE

Suite S-21-H, 21st Floor, Menara Northam,55, Jalan Sultan Ahmad Shah,10050 Penang.Tel : (604)-210 7118Fax : (604)-210 7111

CORPORATE OFFICE

Lot 11.2, Level 11, Menara Lien Hoe,No. 8, Persiaran Tropicana,Tropicana Golf & Country Resort,47410 Petaling Jaya, Selangor.Tel : (603) - 7887 8330Fax : (603) - 7887 8331

SHARE REGISTRAR

Tricor Investor & Issuing House Services Sdn BhdUnit 32-01, Level 32, Tower A,Vertical Business Suite,Avenue 3, Bangsar South,No.8, Jalan Kerinchi,59200 Kuala Lumpur.Tel : (603) - 2783 9299Fax : (603) - 2783 9222

AUDITORS

Baker Tilly Monteiro Heng (AF 0117)Chartered AccountantsBaker Tilly MH Tower, Level 10, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur, Malaysia.Tel : (603) - 2297 1000Fax : (603) - 2282 9980

PRINCIPAL BANKER

CIMB Bank Berhad

STOCK EXCHANGE LISTING

Bursa Malaysia Securities BerhadACE MarketStock Name : ATStock Code : 0072

3AT SySTemATizATion BerhAdAnnuAl reporT 2016

CORPORATE STRUCTUREAS AT 27 jUNE 2016

A T S Y S T E M A T I Z A T I O N B E R H A D( 6 4 4 8 0 0 - X )

• Design and manufacture of industrial automation systems and machinery • Renewable energy operator and producer

• Fabrication of industrial and engineering parts

100% 100% 100% 81%

• Dormant

AT EngineeringSolution Sdn Bhd

(631531-X)

AT Precision ToolingSdn Bhd

(627975-M)

75%

Fong’s & AT VentureSdn Bhd

(1125525-P)

Goodmatrix ResourcesSdn Bhd

(988408-D)

Yellow ChoiceSdn Bhd

(1027635-W)

• Dormant

• Manufacturing parts for the oil & gas, life science, electronics, aerospace and other industries operations


gROUP FINANCIAl hIghlIghTS

2016 2015 2014 2013 2012

Revenue (RM’000) 17,394 23,398 22,968 23,186 37,217

(Loss)/Profit before tax (RM’000) (2,624) 409 1,183 (4,194) 967

(Loss)/Profit for the year

attributable to owners of the Company (RM’000) (2,542) 713 1,112 (10,841) 231

Basic (loss)/earnings per share (sen) (0.61) 0.18 0.53 (5.84) 0.13

Total assets (RM’000) 59,579 53,966 53,751 34,634 45,026

Equity attributable to owners

of the Company (RM’000) 42,646 41,450 34,212 13,467 22,311

Weighted average number

of shares in issue (‘000) 415,958 393,692 209,040 185,613 178,951

Net asset per share attributable to

owners of the Company (sen) 9.85 10.53 8.69 7.02 11.64

-

10,000

20,000

30,000

40,000

2012 2013 2014 2015 2016 (8.00)

(6.00)

(4.00)

(2.00)

-

2.00

4.00

6.00

8.00

-

10,000

20,000

30,000

50,000

40,000

2012 2013 2014 2015 2016 -

2.00

4.00

6.00

8.00

10.00

12.00

2012 2013 2014 2015 2016

Net asset per share

17,3

94

(0.61)

9.85

(sen)

Equity attributable to owners of the Company

(RM'000)

Revenue(RM'000)

(Loss)/Earnings per share(sen)

2012 2013 2014 2015 2016

42,6

46


Dear Shareholders,

The financial year ended 29 February 2016 (“FY2016”) has been a tough year for AT Systematization Berhad (“ATS” or the “Group”). We encountered a challenging business environment this year commencing with the uncertainties in the region’s economy, led by the slowdown in China’s economy, plunging global oil prices and weakening Ringgit Malaysia. We also experienced the challenges post implementation of Goods & Services Tax (“GST”) while overall business sentiment & confidence remained weak which led to declining business investment spending.

The Malaysian economy grew at a slower pace of 5.0% in 2015 (2014: 6.0%) mainly supported by the continued expansion of domestic demand. The economic growth was however further moderated to 4.2% during the first quarter of 2016 (Q4 2015: 4.5%). Value-added of the manufacturing sector grew at a slower pace, reduced from 5.0% in Q4 2015 to 4.5% in Q1 2016. Meanwhile, sales of manufacturing products declined by 1.8% to RM164.7 billion (Q4 2015: 2.5%; RM169.8 billion). The capacity utilisation rate also eased from 78% in Q4 2015 to 76.6% in Q1 2016.

Financial Highlights

Amid a challenging economic climate, the Group registered a loss before tax of RM2.62 million on the back of a revenue of RM17.39 million, representing a decrease of RM3.00 million from the profit before tax of RM0.41 million and a decrease of 25.7% from the revenue of RM23.40 million recorded in the preceding financial year.

Key Corporate Developments

(i) Private Placement

The Group has successfully completed a private placement exercise and raised cash proceeds of RM3.94 million during FY2016. The said cash proceeds were mainly utilised for the construction of the Group’s maiden solar photovoltaic installation (“Solar PV Plant”) after the Group has been awarded the renewable energy quota allocation (“RE Quota”) from the Sustainable Energy Development Authority Malaysia (“SEDA”) under Feed-in Tariff (“FiT”) Programme to supply renewable energy to Tenaga Nasional Berhad (“TNB”) for a period of 21 years.

(ii) Share Issuance Scheme

The Group has also implemented a share issuance scheme of up to thirty percent (30%) of the Company’s issued and paid-up share capital (excluding any treasury shares) at any one time (“SIS”), for the eligible Directors and employees of ATS and its non-dormant wholly-owned subsidiaries (“Eligible Persons”). The implementation of SIS is aimed to recognise and reward the contributions and services of the Eligible Persons, to align the Eligible Persons’ interests with those of the shareholders of ATS to drive longer term shareholder value enhancement, as well as to attract and retain high-calibre Eligible Persons thus minimising the loss of key personnel.

ChAIRMAN’S STATEMENT


Key Corporate Developments (Cont’d)

(iii) Proposed Capital Reorganisation and Rights Issue with Warrants

In view of the funding requirements for the Group’s on-going businesses, especially for the Business Purchase Agreement and the Proposed Construction of Solar PV Plant of 300 kW as further detailed in Page 10, the Group has on 1 April 2016 proposed the following:-

(i) par value reduction involving the cancellation of RM0.07 from the par value of every existing ordinary share of RM0.10 each in the issued and paid-up share capital of the Company pursuant to Section 64 of the Companies Act, 1965 (“Act”) (“Proposed Par Value Reduction”) and the proposed reduction of the Company’s entire share premium account pursuant to Sections 60(2) and 64 of the Act (“Share Premium Reduction”);

(collectively, the “Capital Reorganisation”);

(ii) renounceable rights issue of up to 759,824,495 new ordinary shares of RM0.03 each in ATS (“ATS Shares” or “Shares”) (after the Par Value Reduction) (“Rights Shares”) together with up to 379,912,247 free detachable warrants in ATS (“Warrants B”) on the basis of two (2) Rights Shares together with one (1) free Warrant B for every two (2) existing ATS Shares held by entitled shareholders of ATS (“Entitled Shareholders”) on an entitlement date to be determined later (“Entitlement Date”) (“Rights Issue with Warrants”); and

(iii) amendment to the Memorandum of Association of the Company (“Amendment”).

Bursa Malaysia Securities Berhad had vide its letter dated 20 April 2016, approved the above proposals. Approval has also been granted by the shareholders via an Extraordinary General Meeting held on 3 June 2016. The Group expects to complete the proposals in the fourth quarter of 2016.

Outlook

Looking ahead, the Malaysian economy is expected to remain on its growth trajectory, with growth rate ranging between 4.0% to 4.5% in 2016. Domestic demand will continue to be the growth driver but the pace of expansion is expected to be more moderate amid ongoing adjustments by consumers and investors. Growth in the manufacturing sector is expected to moderate to 4.1% in 2016 mainly due to slower expansion in the export-oriented industries. Given the prevailing market and industry conditions, the Board of Directors remain cautiously optimistic on achieving satisfactory operational and financial performance for the financial year ending 28 February 2017.

Note of Appreciation

On behalf of the Board, I would like to extend our gratitude to our customers and business associates, for their continuous support to our business operations. I would also like to thank our valued shareholders, for their confidence in AT Systematization Berhad.

Last but not least, I would like to thank our committed management team and staff, without whom, we would not be able to remain resilient to face this challenging environment. Let us continue to bring the business forward and continue to seek out new growth opportunities.

Yours sincerely,Dato’ Nik Ismail bin Dato’ Nik YusoffChairman

27 June 2016

ChAIRMAN’S STATEMENT (CONT’d)


General Description of the Group’s Business

The Group is principally involved in the fabrication of industrial and engineering parts, as well as design and manufacturing of industrial automation systems and machinery. The Group owns and operates 3 manufacturing plants in Bayan Lepas, Penang, selling products and services to customers from various sub-sectors of the semiconductor and manufacturing industries.

The Group has recently tapped into renewable energy sources through successful bid for the renewable energy quota allocations from SEDA and accorded licences to construct Solar PV Plant under the FiT Programme at its manufacturing plants in Penang. During the financial year, the Group has successfully completed its maiden Solar PV Plant and expects to complete another Solar PV Plant by December 2016.

Revenue

The Group’s revenue for FY2016 reported at RM17.39 million, representing a decrease of 26% year-on-year mainly due to lower fabrication orders from hard disk drives (“HDD”) manufacturing industry. Global HDD market continued to experience declining of sales as a result of few factors, including tough competition from solid-state drives, shift of business and home users from local HDD to centralized cloud server, reduction in demand of desktop personal computers and notebooks following increased consumer preference towards smartphones and tablets. On an annual basis, sales to our customer in HDD market declined by nearly 42% in FY2016. The decrease in orders from HDD market, was however mitigated by higher orders from our Singapore-based partner, Fong’s Engineering & Manufacturing Pte Ltd, which increased by 28% in FY2016. The Group’s automation business, on the other hand has successfully maintained its growth momentum in FY2016 with an improved revenue of RM0.1 million, marking a 23% increase from previous FY2015.

Costs and Expenses

Total costs and expenses before finance cost was RM21.8 million in FY2016, a decrease of RM2.78 million as compared to RM24.58 million incurred in FY2015 on account of lower cost of sales notably arising from the lower production by the Group’s fabrication business, coupled with cost cutting measures and reduced marketing activities in line with the weak business sentiments.

Other Income

Other income of RM2.23 million was 13.4% higher year-on-year owing to the impact of foreign-exchange gains from Singapore Dollar along with higher rental income.

Finance Cost

The Group’s finance cost increased to RM0.45 million during the year from RM0.37 million in 2015 due to the higher interest on hire-purchase financing and business flexi loan in line with the investment in new machineries and machines replacement to support the expansion in fabrication business, as well as part funding the Solar PV Plant.

Taxation

The lower effective tax rate against the statutory tax rate for FY2016 was mainly due to losses suffered by subsidiaries and availability of group tax relief to the Company.

MANAgEMENT dISCUSSION ANd ANAlYSIS


(Loss)/Profit Attributable to Equity Holders of the Company

In view of weak performance in the Group’s fabrication business, the Group recorded loss attributable to equity holders of the Company of RM2.5 million as compared to profit attributable to equity holders of the Company of RM0.71 million in 2015. As a result, earnings per share was down from 0.18 sen to loss per share of 0.61 sen.

Liquidity and Capital Resources

As at 29 February 2016, the Group’s cash and cash equivalents stood at RM3.47 million, reduced slightly by RM0.1 million from RM3.59 million a year ago mainly due to net effects of the following:-

(a) Net cash used in operating activities of RM1.95 million mainly attributable to fabrication business;(b) Net cash used in investing activities of RM4.87 million, mainly for construction of Solar PV Plant and new

machineries purchase;(c) Net cash generated from financing activities of RM6.56 million, mainly from proceeds of private placement and

drawdown of term loan.

Gearing

The Group’s gearing ratio has increased from 10% a year ago to 25% this year due to higher borrowings to fund the machinery acquisition and Solar PV Plant. The gearing ratio is calculated as total external borrowings divided by total equity.

Operations Review

Basic Purchase Agreement (“BPA”) between Fong’s & AT Venture Sdn Bhd (“FATV”) and Fong’s Engineering & Manufacturing Pte Ltd (“FEM”)

The Group’s strategic partnership with Singapore-based FEM continues to deliver the desired results following the signing of BPA between the Group’s indirect 75%-owned FATV with FEM on 24 March 2016. The BPA is in relation to manufacture, supply and delivery of high-value precision machine components and parts to FEM’s customers, which is principally involved in the developing and manufacturing machinery, systems and components used to convert natural and man-made fibres and their blends into yarns. Pursuant to the BPA, FEM and FATV agreed that the machine components to be purchased by FEM from FATV shall not be lesser than SGD2.9 million (approximately RM8.3 million) of value per annum for the first two (2) years. The value of expected purchases in the subsequent years after the initial two (2) years period would depend on, amongst others, purchase orders to be placed by FEM’s customer and potential technological changes. The machine components will be supplied directly by FATV to FEM’s major customer at designated locations worldwide.

The BPA represents the opportunity for the Group to leverage on FEM’s good relationship with its multi-national customers to bring in more fabrication job orders from different industries to the Group.

MANAgEMENT dISCUSSION ANd ANAlYSIS (CONT’d)


Refurbishing Old Manufacturing Plant

Subsequent to the completion of the Group’s new extended manufacturing plant in last financial year, the Group has commenced the refurbishment of its old manufacturing plant with aim to scale up its operational capabilities, including strengthening the floor foundation to improve precision and accuracy as well as re-arranging machineries layout for better process flow. The refurbishment is expected to be completed in the third quarter of 2016.

Creating Greener Portfolio with Sustainable Capacity

(i) 425kW Solar PV Plant

In the last financial year, the Group has been awarded a renewable energy quota to construct a 425kW Grid-Connected Retrofitted System Solar PV Plant at its manufacturing plant located at Plot 82, Lintang Bayan Lepas, Phase IV, Bayan Lepas Industrial Park, 11900 Bayan Lepas, Penang. The construction of the 425kW Solar PV Plant has been completed during the year and has since connected to TNB’s grid system.

The Group has signed a Renewable Energy Power Purchase Agreement (“REPPA”) with TNB on 17 November 2015 for a concession period of 21 years. Throughout the concession period of 21 years, total estimated generation and value of renewable energy to be generated is approximately 616MWh and RM0.54 million per year.



(ii) Proposed 300kW Solar PV Plant

Further to the success of winning the renewable energy quota in 2015, the Group has entered in bidding for a fresh quota for its other manufacturing plant. On 1 March 2016, ATS has through its wholly-owned subsidiary, AT Precision Tooling Sdn. Bhd. was awarded another renewable energy quota to construct a 300kW Grid-Connected Retrofitted System Solar PV Plant at its manufacturing plant located at Plot 49, Hilir Sungai Keluang 2, Phase IV, Bayan Lepas Industrial Park, 11900 Bayan Lepas, Penang.

Arising from this, the Group is expected to sign a REPPA with TNB for the sale and delivery of renewable energy to TNB for a concession period of 21 years commencing from the first date of supply of renewable energy to TNB. SEDA has set an indicative fixed rate-tariff of RM0.5930/kWh and additional bonus rate-tariff ranging from RM0.05/kWh to RM0.155/kWh at which the Group can sell electricity to TNB during the concession period. Throughout the concession period of 21 years, the total estimated generation and value of renewable energy to be generated is approximately 414MWh and RM0.33 million per year based on the indicative rates above.

The above-mentioned two projects are part of the Group’s strategy to move into selective recurring income business for long term sustainability.

Moving Forward

The Group will continue to operate its existing businesses with main focus on fabrication of industrial and engineering parts. Global demand for HDD products continues to face a very challenging global economic environment and this certainly affect our major customer in HDD manufacturing business. We will continue to work towards reducing dependence on single major customer from HDD market and diversify into new customer base. The Group will leverage on its existing network of customers, while at the same time leverage on its strategic partnership with FEM via the joint venture arrangement in FATV. The strategic partnership with FEM is expected to bring in new business opportunities for the Group and open its doors to customers from other previously untapped sectors. Besides that, the strategic partnership with FEM allows the Group to have the opportunity to tap on the technical know-how and expertise of FEM which has prior experience in serving multi-national customers from an array of industries as well as to enhance the technical knowledge of the Group’s staff and research & development capabilities. This bodes well for the development of the Group’s business as we strive to be a market leader and pre-eminent supplier for engineering solutions to customers worldwide.

The Group will continue its ongoing efforts to improve the production efficiency, intensify its business development and sales initiatives to reach out different customer base. To further demonstrate the Group’s commitment to the safety and quality of the manufactured products, the Group has disembarked on a project to obtain Quality Management System (“QMS”) ISO 13485 Certification in the area of medical devices. The Group believes the ISO 13485 standard is an effective solution to meet the comprehensive requirements for a QMS, hence attract more business opportunity from medical related industries.

The Group has also been involved in the generation of solar energy via the FiT Programme conducted by SEDA to broaden the Group’s revenue base. The Group’s existing 425kW Solar PV Plant was constructed on the rooftop of one of the Group’s existing premises in Bayan Lepas, Penang while the proposed 300kW Solar PV Plant will also be constructed on the rooftop of another of the Group’s existing premises in Bayan Lepas, Penang. This initiative serves as the supplements to the Group’s revenue, thereby providing an alternative yet sustaining source of income.

Subject to the external market conditions and macroeconomic factors, the Group believes that its performance will continue to grow positively. The Board of Directors will continue to focus on improving production efficiency, productivity and processes to ensure a satisfactory financial results for the next financial year.



Dato’ Nik Ismail bin Dato’ Nik YusoffIndependent Non-Executive Chairman

Dato’ Nik Ismail bin Dato’ Nik Yusoff, a Malaysian aged 70, was appointed as Independent Non-Executive Director and Chairman on 24 April 2015. He is also a member of the Audit Committee, Nominating Committee and Remuneration Committee.

Dato’ Nik Ismail bin Dato’ Nik Yusoff joined the Police Force in 1965 and served the Force until his retirement on 2 September 2001 as Deputy Commissioner of Police. During his 36 years in service, he had served the Force well, with full commitments and professionalism.

Dato’ Nik Ismail had served in various positions in the Police Force, including Chief Police Officer (CPO) in the states of Terengganu (1997), Kedah (1997 - 1999), and Selangor (1999 - 2001). He was also the Deputy Director Special Branch in Bukit Aman in 1995 to 1997.

After his retirement, Dato’ Nik Ismail was appointed as director of several public listed companies and private limited companies. He sits on the Board as Independent Non-Executive Director of Lebtech Berhad.

He does not have any family relationship with any director and/or major shareholder of ATS, or any conflict of interest in any business arrangement involving the Company.

Dato’ Ir. Auniah Binti AliExecutive Director

Dato’ Ir. Auniah Binti Ali, aged 56, a Malaysian, is an Executive Director of ATS. She was appointed to the Board on 15 May 2012.

She graduated from Heriot-Watt University in Scotland, United Kingdom with a Master of Science in Drives and Power Engineering. She is also a member of the Institution of Engineers in Malaysia as well as a Professional Engineer registered with the Board of Engineers, and a member of Malaysian Grid Code (Department of Electricity Supply) 1994.

She has many years of working experience with the Malaysian government and is familiar with the formulation of Malaysia’s economic policies and economic planning process. She had worked as an Assistant Director in the Economic Planning Unit of the Prime Minister’s Department where she had prepared the demand and supply scenarios for planning and forecasting Malaysia’s electricity supply industry. During that time, she was also responsible for all power generations including Tenaga National and independent power producers. She also assisted in the evaluation and assessment of major privatization proposals like the Bakun Project, Prai Power Station and the Jiman Power Coal station, among others.

As an Assistant Director in the Department of Electricity and Gas Supply in the Ministry of Energy, Telecommunications and Posts, she acted as the secretariat for the Grid Code Committee and was in charge of licensing and monitoring of the independent power producers. She had also worked with the Malaysian Public Works Department where she was involved in the design and monitoring of government hospital projects.

She had received awards for Sijil Perkhidmatan Cemerlang JKR, Sijil Perkhidmatan Cemerlang Kementarian Tenaga, Telekom & Pos, and Sijil Penghargaan Bagi Penyediaan Buku Panduan Teknik JKR.

She does not have any family relationship with any director and/or major shareholder of ATS, or any conflict of interest in any business arrangement involving the Company.

PROFIlE OF dIRECTORS


Dr. Ch’ng Huck KhoonIndependent Non-Executive Director

Dr. Ch’ng Huck Khoon, aged 47, a Malaysian, is an Independent Non-Executive Director of ATS. He was appointed to the Board on 28 June 2012. He is also the Chairman of the Audit Committee, Nominating Committee and Remuneration Committee.

He pursued his PhD studies in Finance at the Universiti Sains Malaysia (USM) and also holds a Master of Business Administration (Finance) from University of Stirling, United Kingdom. He is an Associate Member of the Institute of Chartered Secretaries and Administrators (ICSA) and a Certified Financial Planner.

He was an Assistant Professor at Universiti Tunku Abdul Rahman (UTAR) and Wawasan Open University (WOU). He currently sits on the Board as Independent Non-Executive Director of CNI Holdings Berhad, YGL Convergence Berhad and MQ Technology Berhad. He is also the Chairman of the Audit Committee of CNI Holdings Berhad.


Chang Vun LungIndependent Non-Executive Director

Chang Vun Lung, aged 40, a Malaysian, is an Independent Non-Executive Director of ATS. He was appointed as an Independent Non-Executive Director of the Company on 8 January 2013. He is also a member of the Nominating, Remuneration and Audit Committees.

He received his early education at Tunku Abdul Rahman College. He became a member to the Association of Chartered Certified Accountants (ACCA, UK) since year 2004 and a member to the Malaysian Institute of Accountants (MIA) in year 2005. He has been admitted as fellowship member in ACCA in year 2009.

Mr. Chang had started his career by attaching himself to a Chartered Accountant firm, BDO Binder for approximately 4 years. He then spent another 4 years with Isyoda Corporation Bhd, a construction company listed on the Main Board of Bursa Malaysia. During his tenure with the company, he was appointed as a Group Accountant where he took charge of accounting and finance functions. Presently, he runs his own professional firm which specialises in consultancy and corporate services. He was appointed as the Independent Non-Executive Director in Focus Dynamics Technologies Berhad on 8 January 2013.


Mak Siew WeiExecutive Director

Mak Siew Wei, aged 41, a Malaysian, is an Executive Director of ATS. He was appointed to the Board on 1 March 2013. He is also the Chairman of the Risk Management Committee and Investment Committee.

He pursued his education in the United States and graduated with a Bachelor Degree in Management Information System and subsequently worked for Marvic International (NY) Ltd in New York as a Business Development Manager for 3 years.

He currently sits on the Board of Advance Information Marketing Berhad and Scan Associates Berhad as an Executive Director. He is also a Non–Executive Director of Nakamichi Berhad.


Other Information on Directors

(i) The securities in the Company held by Directors are as disclosed on page 107 of this Annual Report.(ii) None of the Directors have any directorship in other public companies in Malaysia, except for Dato’ Nik Ismail bin

Dato’ Nik Yusoff, Dr. Ch’ng Huck Khoon, Mr. Chang Vun Lung and Mr. Mak Siew Wei which have been disclosed in their respective profiles.

(iii) None of the Directors of the Company has been convicted of any offences within the past 10 years other than traffic offences, if any.

PROFIlE OF dIRECTORS (CONT’d)


The Board of Directors (“the Board”) is committed to achieve and maintain high standards of corporate governance within the Group as a fundamental part of its responsibilities in managing the business and affairs of the Group in order to protect and enhance shareholders’ value. This Statement sets out the manner in which the Group has applied and the extent of compliance with the principles and recommendations as set out in the Malaysian Code on Corporate Governance 2012 (“MCCG 2012” or “the Code”). These principles are practiced throughout the Group as the underlying principle in discharging the Board’s responsibility and to ensure transparency and corporate accountability.

A. BOARD OF DIRECTORS

Duties and Responsibilities of the Board

The Board of Directors recognizes its responsibility for corporate governance of the Group. The Board is collectively responsible in establishing the objectives, provides strategic direction to the Group in achieving its business plan and overseeing the conduct, performance and internal controls of the Group’s business activities as well as reviewing of financial and operating performance of the Group. These include determining some of the key strategies, financial and organizational matters such as approval of interim results and annual audited financial statements, significant acquisition and disposal, major capital expenditures and long term strategic planning for the Group.

In discharging its stewardship, the Board is constantly mindful of safeguarding the interests of the Group’s

stakeholders and is ultimately responsible for the performance of the Group. To ensure the effective discharge of its function and duties, the principal responsibilities of the Board include the following specific areas:- • Reviewing and adopting strategic plans for the Group; • Overseeing the conduct of the Group’s business to evaluate whether the business is being properly

managed; • Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks; • Succession planning including appointing, training, fixing the compensation of and, where appropriate,

replacing senior management; • Developing and implementing an investor relation programme or shareholder communication policy for the

Company; and • Reviewing the adequacy and the integrity of the Group’s internal control systems and management

information systems including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

Board Charter

The Board has formally adopted a Board Charter which provides guidance to the Board in the fulfilment of its roles, duties and responsibilities which are in line with relevant legislations, regulations and the principles of good corporate governance. The Board Charter outlines the composition and structure of the Board, the appointment of new Directors to the Board, the Board’s powers duties and responsibilities including the division of responsibilities between executive and non-executive directors and management, establishment of Board Committees, remuneration of Directors and processes and procedures for convening Board meetings. The Board Charter also underlines the Board’s commitment to compliance with laws, regulations and its internal code of ethics. The Board Charter is subject to periodic review and will be updated from time to time to reflect changes to the Company’s policies, procedures and processes as well as changes to legislations and regulations. The Board Charter is available on the Company’s website at http://www.atsys.com.my.

Board Balance

The Board currently consists of five (5) members, comprising two (2) Executive Directors and three (3) Independent Non-Executive Directors. The number of Independent Directors is in compliance with the Bursa Malaysia Listing Requirements for ACE Market (“Listing Requirements”) which requires that at least one third (1/3) of the Directors must be independent.

The Executive Directors have overall responsibilities over the development of corporate objectives, operational,

organizational, business units and implementation of Board decisions and policies. The Executive Directors are tasked to implement the Board’s decisions and policies whilst overseeing operations and coordinating business decisions. The decision made by the Board is done collectively without undue influence or dominance by any individual Director or group of Directors, whether Executive or Non-Executive. The role of management is to support the Executive Directors and implement the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board.

CORPORATE gOvERNANCE STATEMENT


The Independent Non-Executive Directors are independent of executive management. They provide balanced, effective and independent views, unbiased judgements, informed opinions to the deliberations and decision making of the Board thus fulfilling an essential and pivotal role in corporate accountability.

An effective and dynamic Board is essential towards enhancing long term shareholder value and the interests

of other shareholders. The Group maintains its current Board mix which has the necessary skills, expertise and experience in areas relevant to steering the growth of the Group’s businesses.

Due to the size of the Board, the Board has not appointed a senior independent director to whom shareholders

may voice their concerns. This task will be played by the Board as a whole. The Board is confident that its current size and composition is sufficient and effective in discharging the Board’s responsibilities and in meeting the Group’s current needs and requirements.

A brief profile of each Board member is presented in this Annual Report under Profile of Directors on pages 11

to 12.

Board Meeting

The Board meets at least once every quarter with additional meetings convened as and when necessary. The Board meets within 2 months from the end of every quarter of the financial period, where the Group’s financial results are deliberated and considered prior releasing them to Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and the Securities Commission.

There were five (5) Board Meetings held during the financial year ended 29 February 2016. The record of

attendance for each Director at those meetings are set out below:-

Directors Number of meetings attended

Dato’ Nik Ismail bin Dato’ Nik Yusoff 5 Dr. Ch’ng Huck Khoon 5 Dato’ Ir. Auniah Binti Ali 3 Chang Vun Lung 5 Mak Siew Wei 5

In the intervals between Board meetings, for exceptional matters requiring urgent Board decisions, Board approvals are sought via circular resolutions, which are attached with sufficient and relevant information required for an informed decision to be made. Where a potential conflict arises in any transactions involving any particular Director’s interest, such Director is required to declare his interest and abstain from discussion and the decision-making process.

Supply of Information

The Directors have full and timely access to information pertaining to the Group’s business and affairs to enable them to discharge their duties effectively. Prior to each Board meeting, a full set of Board papers together with the agenda were forwarded to the Board members to allow the Directors to study and evaluate the matters to be discussed and subsequently make effective decisions.

The Directors have unrestricted access to the advice and services of the Company Secretaries and senior

management staff of the Group. The Directors may obtain independent professional advice where necessary at the Company’s expense in the furtherance of their duties. The Directors are also regularly updated by the Company Secretaries on new statutory, corporate and regulatory developments relating to Directors’ duties and responsibilities in order to assist them in the discharge of their duties as Directors of the Company and ensuring the effective functioning of the Board.

The Directors may seek advice from the management on issues under their respective purview. The Directors

may also interact directly with the management, or request further explanation, information or updates on any aspect of the Company’s operations or business concerns from them. In addition, the Board may seek independent professional advice at the Company’s expense on specific issues to enable it to discharge its duties in relation to matters being deliberated.

CORPORATE gOvERNANCE STATEMENT (CONT’d)


Appointment to the Board

Any proposals for new appointments to the Board are reviewed by the Nominating Committee (“NC”) and presented to the Board for approval. The Company Secretaries will ensure that all appointments are properly made, and that regulatory obligations are met.

To ensure that the Directors have the time to focus and fulfill their roles and responsibilities effectively and

in line with the Rule 15.06 of the Listing Requirements, a Director of a public listed Company must not hold more than five (5) directorships in public listed Companies and must be able to commit sufficient time to the Company. The Directors are required to submit an update of their other directorships from time to time for monitoring of the number of directorships held by the Directors of the Company and to notify to the Companies Commission of Malaysia accordingly.

Re-election of the Directors

Pursuant to Section 129 of the Companies Act, 1965, Directors who are or over the age of seventy (70) shall retire at every Annual General Meeting and may offer themselves for re-appointment to hold office until the next Annual General Meeting (“AGM”).

In accordance with the Company’s Articles of Association (“the Articles”), one-third or nearest to one-third

(1/3) of the Board is subject to retirement by rotation at each AGM. The Directors to retire at each year are the Directors who have been longest in office since their appointment or re-election.

The Articles further provide that the Directors may from time to time appoint one or more of their body to the

office of Managing Director and if the appointment is for fixed term, that term shall not exceed three (3) years and such conditions as they think fit and, subject to the terms of any agreement entered into in any particular case, may revoke any such appointment. The said appointment shall be automatically terminated if the Director so appointed ceases from any cause to be a Director.

Any person appointed by the Board either to fill a casual vacancy or as an addition to the existing Directors,

shall hold office only until the next AGM and shall then be eligible for re-election. Notwithstanding the recommendation of the MCCG 2012, the Board is presently of the view that there is no

necessity to fix a maximum tenure limit for Directors as there are significant advantages to be gained from the long-serving Directors who possess tremendous insight and knowledge of the Company’s businesses and affairs. Similarly, the Board does not set a time-frame on how long an Independent Director should serve on the Board, mainly for the following reasons:-

• The ability of a Director to serve effectively as an Independent Director is very much dependent on his calibre, qualification, experience and personal qualities, particularly his integrity and objectivity, and has no real connection to his tenure as an Independent Director.

• NC conducts an annual assessment of Independent Directors in respect of inter alia their skills, experience and contributions, and whether the Independent Directors are able to discharge their duties with unbiased judgement. Furthermore, the NC also reviews the Directors’ Profile of Independent Directors and assess their family relationship, interest of shareholdings in the Company and related party transactions with the Group (if any).

Currently, all the Independent Directors of the Company served less than nine (9) years in the Company.



Directors’ Training

The Board acknowledges the importance of continuous education and training in order to broaden one’s perspective and to keep abreast with the current and future developments in the industry and global markets, regulatory updates as well as management strategies to enhance the Board’s skills and knowledge in discharging their duties. Orientation programme is initiated for the newly appointed Directors to familiarise them with the Group’s business and operations. All Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia.

During the financial year under review, the Company had organised in-house trainings for the Directors and

employees of the Group. The Directors are also encouraged to attend various external professional programmes which they individually considered as relevant and useful to further enhance their business acumen and professionalism in discharging their stewardship responsibilities.

The Company Secretary keeps Directors informed of relevant external training programmes and all of the

Directors have undergone training during the financial year. The external conferences/workshops and internally organized programmes attended by the Directors during the financial year ended 29 February 2016 emcompasses the following topics:-

Directors Topics

Dato’ Nik Ismail bin Dato’ Nik Yusoff • Investment Opportunities in 11th Malaysia Plan • Corporate Strategy and Strategy Choices

Dr. Ch’ng Huck Khoon • Technical Analysis as a Method of Investment Risk Management • ASEAN Economic Community 2015 (AEC) and Its Impact on Malaysia Economy • Trans-Pacific Partnership Agreement (TPPA): Enhancing Trade and Investment, Economic Growth and Development

Dato’ Ir. Auniah Binti Ali • Investment Opportunities in 11th Malaysia Plan • Corporate Strategy and Strategy Choices

Chang Vun Lung • Investment Opportunities in 11th Malaysia Plan • Corporate Strategy and Strategy Choices

Mak Siew Wei • Investment Opportunities in 11th Malaysia Plan • Corporate Strategy and Strategy Choices

The Nominating Committee and Remuneration Committee and the Board assess the training needs of each of its Directors on an on-going basis and are satisfied that the Directors have received the necessary trainings during the financial year under review which enhanced their effectiveness and contribution to the Board.



Directors’ Remuneration

The objective of the Group’s policy on Directors’ remuneration is to attract and retain Directors who possess the necessary skills and experience commensurate with their responsibilities for the effective management of the Group.

All Non-Executive Directors are paid Directors’ fees as approved by the shareholders at the AGM based on the

recommendation of the Board. The determination of the level of fees for the Non-Executive Directors is a matter decided by the Board as a whole to ensure that it is sufficient to attract and retain the services of the Non-Executive Directors which are vital to the Company. Meeting attendance allowances are paid to eligible Non-Executive Directors in accordance with the number of meetings attended during the financial year. Individual Directors will abstain from participating in the discussion and decision of their own remuneration.

For the Executive Directors, the Nominating Committee and Remuneration Committee review the remuneration

package annually and recommends to the Board on specific adjustments and/or reward payments that reflect their respective contributions throughout the year as well as corporate performance and achievement of key performance indicators, taking into consideration the market and industry practice. Long term incentives are implemented through share issuance scheme. The Company has in place Directors’ and Officers’ liability insurance (“D&O”) for all the Directors.

Details of the remuneration of the Directors of the Company for the financial year ended 29 February 2016 are

as follows:- • AggregateRemuneration

Executive Non-Executive Directors Directors Total (RM) (RM) (RM)

Fees - 137,000 137,000 Other emoluments 121,240 2,000 123,240 Defined contributions 15,600 - 15,600 Benefits in kind 14,400 - 14,400

• AnalysisofRemuneration

Range of Remuneration No. of No. of Executive Non-Executive Directors Directors Total

RM50,000 and below - 3 3 RM50,001 – RM100,000 2 - 2

The disclosure of Directors’ remuneration is made in accordance with item 12 of Appendix 9C, of the Listing Requirements.



B. WHISTLE BLOWING POLICY The Group in its effort to enhance corporate governance has put in place a whistle blowing policy to provide an

avenue for employees and stakeholders to report genuine concerns about malpractices, unethical behaviour, misconduct or failure to comply with regulatory requirements without fear of reprisal. Any concerns raised will be investigated and a report and update will be provided to the Audit Committee.

C. BOARD COMMITTEES The Board has established three (3) Board Committees, namely the Audit Committee (“AC”), Nominating

Committee (“NC”) and Remuneration Committee (“RC”) and two (2) Sub-Committees, namely Risk Management Committee (“RMC”) and Investment Committee (“IC”) as part of its efforts to ensure the effective discharge of its duties. All Committees operate within its respective clearly defined terms of reference approved by the Board and may update from time to time to keep abreast with the Best Practices in Corporate Governance. The Chairman of the relevant Board Committees also reports to the Board on key issues deliberated by the Board Committees at their respective meetings. In general, the Non-Executive Directors are independent of management. Their roles are to constructively challenge management and monitor the success of management in delivering the approved targets and business plans within the risk appetite set by the Board. They have free and open contact with management at all levels, and they engage with the external and internal auditors to address matters concerning management and the Company’s business and operations. Key matters reserved for the Board’s approval include the annual business plan and budget, capital management and investment policies, authority limits / levels, risk management policies, declaration of dividends, business continuity plan, issuance of new securities, business restructuring, expenditure above a certain limit, material acquisitions and disposition of assets.

Audit Committee

The terms of reference and the function of the AC are discussed on pages 21 to 23 of this Annual Report. Nominating Committee (“NC”)

Chairman : Dr. Ch’ng Huck Khoon (Independent Non-Executive Director) Members : Chang Vun Lung (Independent Non-Executive Director) : Dato’ Nik Ismail bin Dato’ Nik Yusoff (Independent Non-Executive Director) The NC was established on 24 January 2006 and comprises entirely of Independent Non-Executive Directors.

The primary function of the NC is to consider and propose new nominees on the Board by considering the required mix of skills, experience, expertise, knowledge, qualification and other core competencies required for the position. The NC also assist the Board to review the adequacy of the committee structures, size and composition of the Board, assess and recommend to the Board the terms of reference of the Board and Committees of the Board in order to establish an effective Board and make recommendations with regard to any adjustments that are deemed necessary.

The NC also assesses the performance of the director(s) who will be seeking re-election at the AGM(s) and to

recommend them for re-election. The NC meetings are held as and when required and at least once every year to assess the contribution of each

individual Director, the effectiveness of the Board as a whole and the Committees of the Board. The NC met twice during the financial year ended 29 February 2016.

Remuneration Committee (“RC”)

Chairman : Dr. Ch’ng Huck Khoon (Independent Non-Executive Director) Members : Chang Vun Lung (Independent Non-Executive Director) : Dato’ Nik Ismail bin Dato’ Nik Yusoff (Independent Non-Executive Director) The RC comprises entirely of Independent Non-Executive Directors. The primary function of the RC is to recommend

to the Board from time to time, the remuneration framework and remuneration package of the Executive Directors of the Group in all forms to commensurate with the respective contributions of the Executive Directors. The Directors concerned are to abstain from deliberations and voting on the decision in respect of their own remuneration package. The RC meetings are held as and when required and at least once every year to assess the contribution of each individual Director, the effectiveness of the Board as a whole and the Committees of the Board. The Remuneration Committee met once during the financial year ended 29 February 2016.




D. RELATIONSHIP AND COMMUNICATION WITH SHAREHOLDERS AND INVESTORS Communication with Shareholders and Investors The Board recognizes the importance of effective communication with its shareholders, investors and all other

stakeholders. As such, the Board has maintained a high level of disclosure by providing timely, clear and comprehensive information through readily accessible channels to explain the Group’s strategy, performance and major developments. Besides, all shareholders have an opportunity to participate in discussion with the Board on matters relating to the Company’s operation and performance at the Company’s General Meetings.

The Group’s corporate proposals, quarterly and annual financial results and other required announcements

are made on a timely basis and are available for public access on the internet via Bursa Malaysia’s website at http://www.bursamalaysia.com. In addition, the Company has also established a website, www.atsys.com.my to provide information on the Group’s business activities and in line with the recent corporate developments.

Leverage on Information Technology for Effective Dissemination of Information The Company’s website incorporates an Investor Relations (“IR”) section which provides all relevant

information on the Group and is accessible by the public. This section enhances the IR function by including all announcements made by the Company, annual reports and quarterly financial results. The Company will enhance the disclosures on its website for broader and effective dissemination of information to its stakeholders from time to time.

Annual General Meeting (“AGM”) The AGM is the principal forum or dialogue with shareholders. The shareholders are encouraged to participate

in the open question and answer sessions in the AGM pertaining to the resolutions being proposed at the meeting and the financial performance and business operation in general.

E. ACCOUNTABILITY AND AUDIT Financial Reporting The Directors are responsible to ensure that the financial statements have been properly drawn up in

accordance with the 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 their financial performance and cash flows for the financial year under review.

The Board takes responsibility for presenting a balanced and clear assessment of the Group’s operations and

prospects each time it releases its quarterly and annual audited financial statements to shareholders. The Audit Committee will review the Group’s financial reporting process and the quality of the financial reporting to ensure accuracy, adequacy and compliance with the appropriate accounting standards and approved by the Board prior to the release to the Bursa Malaysia and Securities Commission.

Directors’ Responsibility Statement The Directors are required by the Companies Act, 1965 to ensure that the financial statements prepared for

each financial year give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year, and of the results of their operations and cash flows for the financial year. The Directors consider that in preparing the financial statements, the Directors have consistently used and applied the appropriate and relevant accounting policies and made judgements and estimates that are reasonable and prudent. The Directors have a general responsibility in ensuring that the Company and the Group keep proper accounting records in accordance with the provisions of the Companies Act, 1965 to enable the preparation of the financial statements with reasonable accuracy. The Directors are also responsible for taking reasonable steps to safeguard the assets of the Company and the Group to prevent and detect fraud and other irregularities.


Internal Control The Board recognizes the importance of internal control systems whereby shareholders’ investment and the

Group’s assets can be safeguarded. The Statement on Risk Management and Internal Control on pages 25 to 26 in this Annual Report provides an overview of the state of internal control of the Group.

Relationship with the Auditors The Board has established a transparent relationship with the external auditors through the AC, which has been

accorded with the power to communicate directly with the external auditors towards ensuring compliance with the accounting standards and other related regulatory requirements.

The AC undertakes an annual assessment of the suitability and independence of the external auditors. It is

the policy of the AC to meet with the external auditors at least twice a year to discuss their audit plan, audit findings and the Company’s financial statements. At least one of these meetings is held without the presence of the Executive Directors and the management. The AC also meets with the external auditors additionally whenever it deems necessary. In addition, the external auditors are invited to attend the AGM of the Company and are available to answer shareholders’ questions on the conduct of the statutory audit and the preparation and contents of their audit report.

Compliance Statement Throughout the financial year ended 29 February 2016, the Board is satisfied and has to the best of ability

and knowledge that the Company has in material aspects and complied with the Best Practices in Corporate Governance set out in Part 2 of the Code.

This statement was made in accordance with a resolution of the Board of Directors dated 27 June 2016.



MEMBERS OF THE AUDIT COMMITTEE

The Audit Committee of AT Systematization Berhad consist of:-

Name Designation Directorship

Dr. Ch’ng Huck Khoon Chairman Independent Non-Executive Director

Chang Vun Lung * Member Independent Non-Executive Director

Dato’ Nik Ismail bin Dato’ Nik Yusoff Member Independent Non-Executive Director

Note: * Mr. Chang Vun Lung is a member of the Malaysian Institute of Accountants.

MEETINGS AND ATTENDANCE

During the financial year ended 29 February 2016, the Audit Committee held five (5) meetings. The details of attendance of the Audit Committee members are as follows:-

No. of Name Meetings Attended

Dr. Ch’ng Huck Khoon 5

Chang Vun Lung 5

Dato’ Nik Ismail bin Dato’ Nik Yusoff 5

SUMMARY OF TERMS OF REFERENCE

1. OBJECTIVES

The primary objective of the Audit Committee is to assist the Board in discharging its responsibilities relating to the management of principal risks, risk management and internal control, accounting and financial reporting practices of the Group. In addition, the Audit Committee shall:-• Evaluate the risk management, internal and external audit processes; • Ensure transparency, accountability and integrity of the Group’s activities; • Oversee compliance with the statutory and legal requirements and observance of a proper code of conduct;

and • Maintain regular scheduled meetings and direct communication among the Board, internal and external

auditors, and senior management.

AUdIT COMMITTEE REPORT


SUMMARY OF TERMS OF REFERENCE (CONT’D)

2. MEMBERSHIP AND COMPOSITION

The Audit Committee shall be appointed by the Board from amongst the Directors and must be composed of no fewer than three (3) members, all of whom must be Non-Executive Directors, with a majority of them being Independent Directors. No alternate director shall be appointed as a member of the Audit Committee. The Chairman of the Committee must be an Independent Non-Executive Director appointed by the Board. If membership for any reason falls below three (3) members, 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.

The Board shall at all times ensure that at least one (1) member of the Audit Committee:- • Must be a member of the Malaysian Institute of Accountants (“MIA”); or • If he or she is not a member of MIA, he or she must have at least three (3) years’ working experience and:-

- he or she must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or

- he or she must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

• Fulfils such other requirements as prescribed or approved by the Bursa Malaysia.

3. AUTHORITY

The Audit Committee is granted the authority by the Board to investigate any activity of the Group and the Company within its terms of reference, to obtain the resources which it needs, and to have full and unrestricted access to information and all employees are directed to co-operate with any request made by the Audit Committee.

Furthermore, the Audit Committee shall have direct communication channels with the internal and external

auditors as well as with senior management of the Group and shall be able to convene meetings with both the internal and external auditors whenever deemed necessary.

Where the Audit Committee is of the view that a matter reported to the Board has not been satisfactorily resolved

resulting in a breach of the Bursa Malaysia Listing Requirements for ACE Market, the Audit Committee shall promptly report such matter to Bursa Malaysia. The Audit Committee is also empowered to obtain independent professional to advice if considered necessary to assist the Audit Committee in fulfilling its responsibilities.

4. DUTIES AND RESPONSIBILITIES

The Audit Committee acts as the Board’s principal agent to ensure the independence of the Company’s external auditor, the integrity of management and the adequacy of disclosures to shareholders.

The terms of references including the duties and responsibilities of the Audit Committee are also listed in the

Company’s website.

5. MEETINGS

The Audit Committee is to meet at least four (4) times a year and as many times as the Audit Committee deems necessary with written notice of the meeting together with the agenda to be given to the members of the Audit Committee and the external auditors, where applicable. Executive Directors, members of senior management, internal and external auditors and other professionals may be invited by the Audit Committee to attend the Audit Committee Meeting to assist in its deliberations if deems necessary by the Audit Committee.

The Audit Committee shall meet with the external auditors without the presence of any Executive Directors or

senior management at least twice a year. The internal and external auditors may also request for a meeting when the need arises.

AUdIT COMMITTEE REPORT (CONT’d)


SUMMARY OF TERMS OF REFERENCE (CONT’D)

6. QUORUM AND REPORTING PROCEDURES

In order to form a quorum for the meeting, the majority of the members present must be Independent Directors. In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members present.

The Company Secretary shall be appointed as Secretary of the Committee (the “Secretary”). The Secretary, in

conjunction with the Audit Committee Chairman, shall draw up an agenda, which shall be circulated together with the relevant support papers, at least one week prior to each meeting to members of the Audit Committee. The minutes shall be circulated to members of the Audit Committee.

The Audit Committee Chairman shall be entitled, where deemed appropriate, to invite any person(s) to

meetings of the Audit Committee. In addition, the Audit Committee may invite the external auditors and senior management of the Group to be in attendance during meetings to assist in its deliberations.

SUMMARY OF ACTIVITIES

The main activities undertaken by the Audit Committee for the financial year ended 29 February 2016 were as follows:- • Reviewed the quarterly unaudited financial results before recommending for approval by the Board and

subsequent announcement to Bursa Malaysia; • Reviewed with the external auditors the results of annual audit, audit report and management letter together

with management’s response to the findings of the external auditors; • Reviewed with the internal auditors the internal audit report, which highlighted the audit issues and findings,

recommendations and management’s response. Thereafter, discussed with the management on the likely corrective actions to be taken in order to improve the system of internal control based on improvement opportunities identified;

• Reviewed with the internal and external auditors the scope of their work, audit plan and their evaluation on the system of internal controls of the Group;

• Reviewed and approved the proposal for engagement of internal and external auditors for the Group; • Convened meetings with external auditors, internal auditors or both, excluding the attendance of other Executive

Directors and senior management;• Reviewed on the compliance of the Listing Requirements, applicable approved accounting standards issued

by Malaysian Accounting Standards Board, Companies Act, 1965 and any other relevant and statutory requirements, in particular, on the quarterly and year-end financial statements of the Group;

• Reviewed the Statement on Risk Management and Internal Control to ensure that it is consistent with their understanding on the state of internal controls of the Group and recommended the same to the Board for inclusion in the Annual Report;

• Make enquiry if there are any related party transactions and to review to ensure the related party transactions, if any, are on ordinary commercial terms and are not favorable to the related party than is generally available to the public, and that the transactions are not detrimental to the minority party.



INTERNAL AUDIT FUNCTION The Board outsourced its internal audit function to an independent firm of consultants to carry out the internal audit of the Group in order to assist the Audit Committee in discharging its duties and responsibilities. The internal audit function is to add value and improve the Group’s operations by providing independent, objective, assurance and consulting activities through its audit of the Group’s key operations and also to ensure consistency in the control environment and the application of policies and procedures. The internal auditors report directly to the Audit Committee. During the financial year ended 29 February 2016, the internal audit activities have been carried out according to the internal audit plan that was reviewed and approved by the Audit Committee. The internal audit covers the review of adequacy of operational controls, risk management, compliance with established procedures, laws and regulations, quality of assets, management efficiency, amongst others. The findings and recommendations were highlighted to management for their comments and further action. Internal audit reports were presented to the Audit Committee, which in turn reported to the Board. The cost incurred for the internal audit function in respect of the financial year is RM16,492. Further details on the internal audit function in and its activities are set out in the Statement on Risk Management and Internal Control on pages 25 to 26 of this Annual Report. STATEMENT BY AUDIT COMMITTEE ON AT SHARE ISSUANCE SCHEME During the financial year, the Company has not granted any option under the Share Issuance Scheme to the eligible Directors and employees of the Group.



STATEMENT ON RISK MANAgEMENT ANd INTERNAl CONTROl

INTRODUCTION

The Board of Directors acknowledges the importance of maintaining a sound system of internal control and effective risk management as part of its ongoing efforts to practice good corporate governance. The Board is pleased to provide the following Statement on Risk Management and Internal Control for the financial year ended 29 February 2016. This statement is made in compliance with Paragraph 15.26(b) of the Bursa Malaysia Securities Berhad ACE Market Listing Requirements and the Malaysian Code on Corporate Governance 2012.

BOARD’S RESPONSIBILITIES

The Board recognizes that a sound framework of risk management and internal control is fundamental to good corporate governance. The Board affirms its overall responsibility for the Group’s system of risk management and internal control, which includes the establishment of appropriate risk management and control framework covering inter-alia, strategic, financial, operational and compliance aspect of the business as well as the review of its effectiveness, adequacy and integrity.

Whilst acknowledging its responsibilities, the Board is aware of the limitations that are inherent in any systems of internal controls and risk management, such systems being designed to manage, rather than eliminate the risk that may impede the achievement of the Group’s business objectives. Accordingly, it can only provide reasonable but not absolute assurance against material misstatement or loss.

The Board is assisted by the management in the implementation of the Board’s policies and procedures on risk and control by identifying and assessing the risks faced, and in the design, operation and monitoring suitable internal controls to mitigate and control these risks. The Board has received assurances from the Executive Directors and Chief Financial Officer that the Group’s risk management and internal control systems are operating adequately and effectively in all material aspects.

RISK MANAGEMENT FRAMEWORK

The Group has in place processes for the identification, evaluation, reporting, monitoring and reviewing of the major business units within the Group, covering both wholly and partially owned subsidiaries. The senior management, head of department and key personnel from the major business units in the Group are responsible for identifying, managing and reporting on significant risks on an ongoing basis. They have been entrusted to prepare action plans together with the implementation time-scaled to address the risk and control issues identified. The summary of key findings was discussed during the business review meetings and was brought to the attention of the Executive Directors. The key findings were also discussed at the Board meeting as and when necessary. During the financial year under review, the Board has engaged a firm of consultant to carry out an update to the Group’s Enterprise Risk Management.

SYSTEM OF INTERNAL CONTROL

The Group has an established internal control structure and is committed to maintaining the structure to ensure effective control over the Group’s business operations and to safeguard the value and security of the Group’s assets. There is a clearly defined operating structure with lines of responsibilities and delegation of authority in place to assist the Board to maintain a proper control environment, supported by the following activities:-(i) Accounting policies and operating procedures approved by the Board are applicable to the whole Group.

Revisions and additions are made when necessary;(ii) Adequate insurance is in place to ensure that the assets are sufficiently covered against any mishap that may

result in material losses to the Group and its subsidiaries;(iii) Business review meetings are conducted regularly to review the business development, operational and

financial performance of the Group and its subsidiaries;(iv) Quarterly financial results are reviewed by the Audit Committee before approval by the Board for public release,

and areas of concerns as well as exceptions or deviation to the Group’s policies and weaknesses on the internal control systems are highlighted and discussed during the meetings;

(v) Annual financial statements and annual report of the Group are reviewed by Audit Committee before approval by the Board for public release;

(vi) Annual budget and revised budget, if any for each area of business are reviewed and approved by the Board;


STATEMENT ON RISK MANAgEMENT ANd INTERNAl CONTROl (CONT’d)

(vii) Management accounts and reports are generated on a regular and consistent basis, covering financial and operational performance and key business indicators, for effective monitoring and decision making. A management reporting system is in place to carry out monthly monitoring and review of financial results and forecasts against budgets for all business units, with remedial action taken immediately for major variances and followed up, where necessary;

(viii) Limits of authorities are imposed for revenue and capital expenditure for all operating units to keep potential exposure under control. Capital and revenue expenditure, acquisition and disposal of investment interests are all properly approved before they are carried out;

(ix) The effectiveness of the system of internal control is also reviewed through the ISO 9001:2008 Quality Management System certification. The demanding documentation requirements of the certification further ensure a trail of accountability in the Group.

INTERNAL AUDIT FUNCTION

The Group outsourced its internal audit function to an independent professional firm of consultant, which provides the Board with much of the assurance it required regarding the effectiveness as well as the adequacy and integrity of the Group’s systems of internal control. The cost incurred for the internal audit function for the year ended 29 February 2016 amounted to RM12,720.

The responsibilities of the internal auditors include conducting audits, submitting findings and independent report to the Audit Committee on the Group’s systems of internal control. Being an independent function, the audit work is conducted with impartiality, proficiency and due professional care. Internal audit plans are reviewed and approved by the Audit Committee and the plans include independent appraisal on the compliance, adequacy and effectiveness of the Group’s internal controls and to assess and monitor the effectiveness and implementation of the Group’s risk management policies. The findings of the internal audit function, including its recommendations and management’s responses, were reported to the Audit Committee. In addition, the internal audit function followed up on the implementation of recommendations from previous cycles of internal audit and update the Audit Committee on the status of management agreed action plan implementation.

CONCLUSION

The Board has reviewed the risk management and internal control systems and is of the view that the system of internal control and risk management in place for the year under review is adequate and effective to safeguard the shareholders’ interests and assets of the Group. No material weaknesses have been identified which would result in any material losses, contingencies or uncertainties that would require disclosure in the Group’s annual report. This statement is also based on the consideration of the audit work performed by the external auditors on the financial records of the Group.

The Board continues to take appropriate measures and ongoing commitment to strengthen the Group’s control environment and processes. This is a continuous and on-going process and appropriate action plans will be put in place to enhance the Group’s system of internal control as and when necessary.

This statement is made in accordance with a resolution of the Board of Directors dated 27 June 2016.


1. UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS

1.1 Rights Issue with Warrants 2014

The Company has on 10 February 2014 completed its Rights Issue with Warrants (“Rights Issue Exercise”). Pursuant to the Rights Issue Exercise, additional 196,845,765 ordinary shares of RM0.10 each (“Rights Shares”) were issued at the issue price of RM0.10 per Rights Share and cash proceeds of RM19.685 million were raised. On 28 August 2014, the Company announced a variation to the utilisation of proceeds arising from the Rights Issue Exercise. Taking into consideration the variation of proceeds, the summary of the utilisation of proceeds are set out below:-

Proposed Revised Actual Balance as at Utilisation Utilisation Utilisation 29 February 2016 Utilisation (RM’000) (RM’000) (RM’000) (RM’000)

Repayment of bank borrowings 12,600 12,600 12,600 -

Working capital 3,785 285 285 -

Partially finance the construction 2,800 5,450 5,450 - of factory building extension

Goods and Services Tax compliance - 150 150 - and implementation

Capital expenditure and/or working - 700 700 - capital for the Group’s wholly-owned subsidiary, namely AT Precision Tooling Sdn Bhd

Estimated expenses 500 500 500 -

Total 19,685 19,685 19,685

OThER dISClOSURE REqUIREMENTS


OThER dISClOSURE REqUIREMENTS (CONT’d)

1. UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSALS (CONT’D)

1.2 Private Placement

On 5 August 2015, the Company completed a private placement exercise following the listing and quotation of 39,369,100 new ordinary shares of RM0.10 each in the Company. The Company raised cash proceeds of RM3.94 million and the summary of the utilisation of proceeds are as follows:-

Proposed Actual Balance as at Utilisation Utilisation 29 February 2016 Utilisation (RM’000) (RM’000) (RM’000)

Business expansion and/or investments: - Partially finance the construction of solar photovoltaic plant 3,500 3,500 -

Working capital 297 297 -

To defray expenses relating to private placement exercise 140 140 -

Total 3,937 3,937 -

2. SHARE BUY-BACKS

There was no share buy-back by the Company during the financial year.

3. WARRANTS, OPTIONS OR CONVERTIBLE SECURITIES

(i) Warrants Pursuant to the Rights Issue Exercise, the Company has issued 196,845,765 Warrants which were listed

on the ACE Market of Bursa Securities on 5 February 2014. As at 29 February 2016, 196,845,765 Warrants remained unexercised.

(ii) Share Issuance Scheme The Company implemented its Share Issuance Scheme on 29 October 2015. During the financial year,

the Company has not granted any option under the Share Issuance Scheme to the eligible Directors and employees of the Group.

Save as disclosed above, there were no other options or convertible securities issued by the Company during the financial year.

4. DEPOSITORY RECEIPT PROGRAMME

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

5. IMPOSITION OF SANCTIONS AND/OR PENALTIES

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

6. NON-AUDIT FEES

The amount of non-audit fee incurred for services rendered by the external auditors and their affiliated companies or firms to the Group for the financial year ended 29 February 2016 was RM17,400.


7. VARIATION IN RESULTS

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

8. PROFIT GUARANTEES

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

9. MATERIAL CONTRACTS

There were no material contracts entered into by the Company and/or its subsidiaries involving Directors’ and/or major shareholders’ interests, either still subsisting at the end of the financial year or entered into since the end of the previous financial year.

10. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE NATURE

The Company does not have any recurrent related party transactions of revenue or trading nature during the financial year ended 29 February 2016.

11. CORPORATE SOCIAL RESPONSIBILITIES

The Company and its subsidiaries believed that pursuit of business objectives needs to be balanced with the employees, environment and social welfare responsibilities. As such, the Group uses its best endeavour on an ongoing basis to integrate corporate social responsibilities practices into its business operations.

12. EMPLOYEES

There is no discrimination between genders or among races in the workplaces. The Company and its subsidiaries offer insurance benefits to its employees amongst others which include group hospitalization and surgical insurance and group personal accident insurance. Other staff appreciation and recognition efforts are inclusive of festive gathering and annual dinner.

The Group recognises the importance of ensuring a conducive and safe environment for employees to work in. The Group is actively concerned about the safety, health and welfare of all employees. The Group also believes that human capital development is very important to ensure that the Group has the right and relevant skill sets and knowledge essential for business sustainability and growth. As such, the Group constantly upgrades the employees’ skills, knowledge and experiences which would enhance the individual employee’s competency and further improve their quality of work and workplace.

13. ENVIRONMENT

Environment care is one of the Group’s key sustainability interests. We strive to achieve a sustainable balance between development and conservation. Our project developments and operations are carefully planned and designed to minimize and protect the impact on the ecosystem. Various eco-friendly initiatives have been implemented by our teams to address environmental issues and challenges. We advocate and encourage the 3R (Reduce, Reuse and Recycle) strategy among our employees.

Scrap metals and water mixed with coolants that have been used in the production process are disposed of through an authorized contractor.

14. COMMUNITY

The Group plays its role as a socially responsible corporate citizen in the community whenever the need arise. The Group is aware of the community welfare by supporting needy social objectives in the communities in which businesses operates and its employees live and work.

OThER dISClOSURE REqUIREMENTS (CONT’d)

Statement of Directors’Responsibilities

Directors’ Report

Statements of Profit or Loss andOther Comprehensive Income

Statements of Financial Position

Consolidated Statement of Changes in Equity

Statement of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Supplementary Informationon the Realised and Unrealised Profits or Losses

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

FINANCIAL STATEMENTSFor the Financial Year ended 29 FebruarY 2016

31

32-35

36

37

38-39

40

41-42

43-100

101

102

102

103-104


The Directors are required by the Companies Act, 1965 to prepare audited financial statements that give a true and fair view of the state of affairs, including the cash flows and results, of the Group and of the Company as at the end of each financial year.

The Directors have considered the following in preparing the financial statements for the financial year ended 29 February 2016 of the Group and of the Company:-

• That the Group and the Company have used appropriate accounting policies, and these are consistentlyapplied;

• Thatreasonableandprudentjudgmentsandestimatesweremade;• ThattheapprovedaccountingstandardsinMalaysiahavebeenadopted;and• Thatthefinancialstatementshavebeenpreparedonagoingconcernbasis.

The Directors are responsible for ensuring that the Company and subsidiary companies maintain proper accounting records which disclose with reasonable accuracy the financial positions of the Group and of the Company, and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors have general responsibility for taking such steps that are reasonably available to them to safeguard the assets of the Group and of the Company, and to prevent and detect fraud and other irregularities.

This statement was made in accordance with a resolution of the Board of Directors dated 27 June 2016.

StateMent oF directorS’ reSPonSibilitieS


directorS’ rePort

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 29 February 2016.

PRINCIPAL ACTIVITIES

The principal activities of the Company are those of investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are set out in Note 10 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year.

RESULTS

Group Company RM RM (Loss)/Profit for the financial year: (2,497,816) 155,262 Attributable to:- Owners of the Company (2,542,449) 155,262 Non-controlling interests 44,633 -

(2,497,816) 155,262

DIVIDEND

No dividend has been paid or declared by the Company since the end of the previous financial year. The directors do not recommend the payment of any dividend in respect of the current financial year.

RESERVES AND PROVISIONS

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

BAD AND DOUBTFUL DEBTS

Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps 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 have satisfied themselves that there were no known bad debts and that adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances which would render it necessary to write off any bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent.


directorS’ rePort (cont’d)

CURRENT ASSETS

Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets which were unlikely to realise in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company had been written down to an amount which they might be expected to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

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

(i) any charge on the assets of the Group or 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 liabilities in respect of the Group or of the Company which has arisen since the end of the financial year.

In the opinion of the directors, no contingent or other liability of the Group or of the Company 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 or of the Company to meet their obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances 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.

ITEMS OF AN UNUSUAL NATURE

In the opinion of the directors, except for as disclosed in the financial statements:-

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

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is 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.


ISSUE OF SHARES

Duringthefinancialyear,theCompanyincreaseditsissuedandpaid-upordinarysharecapitalfromRM39,369,153toRM43,306,063bywayofprivateplacementwiththelistingof39,369,100ordinarysharesofRM0.10eachatanissuepriceofRM0.10eachon5August2015.

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

WARRANTS

Details of the warrants are set out in Note 17(a) to the financial statements.

DIRECTORS OF THE COMPANY

The directors in office since the date of the last report are:-

Dato’ Nik Ismail Bin Dato’ Nik Yusoff Dato’ Ir. Auniah Binti AliDr. Ch’ng Huck KhoonChang Vun LungMakSiewWei

DIRECTORS’ INTERESTS

According to the Registers of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act,1965inMalaysia,theinterestsofdirectorsinofficeattheendofthefinancialyearintheordinarysharesoftheCompany and of its related corporations during the financial year were as follows:-

Number of Ordinary Shares of RM0.10 Each At At 1.3.2015 Acquired Disposed 29.2.2016

Direct Interest MakSiewWei 9,360,000 - (6,591,500) 2,768,500

Other than as stated above, none of the other directors in office at the end of the financial year had any interest in the ordinary shares of 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 any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as disclosed in Note 6 to the financial statements) by reason of a contract made by the Company or a related corporation with any 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.

Neitherduringnorattheendofthefinancialyear,wastheCompanyapartytoanyarrangementswhoseobjectisto enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.



SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Details of significant events during the financial year are disclosed in Note 26 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

Details of significant events subsequent to the end of the financial year are disclosed in Note 27 to the financial statements.

AUDITORS

Theauditors,Messrs.BakerTillyMonteiroHeng,haveexpressedtheirwillingnesstocontinueinoffice.

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

…………………………………….. ……………………………………..MAK SIEW WEI DATO’ IR. AUNIAH BINTI ALIDirector Director

Date: 27 June 2016



STATEMENTSOFPROFITORLOSSANDOTHERCOMPREHENSIVEINCOMEFOR THE FINANCIAL YEAR ENDED 29 FEBRUARY 2016

GROUP COMPANY 2016 2015 2016 2015 Note RM RM RM RM

Revenue 5 17,393,797 23,398,071 842,095 1,146,915 Cost of sales (15,765,168) (18,582,145) - -

Gross profit 1,628,629 4,815,926 842,095 1,146,915Other income 2,230,646 1,966,770 643,397 569,351 Administrative and general expenses (5,895,965) (5,834,032) (1,308,466) (1,379,828)Selling and distribution expenses (143,568) (168,286) (82,749) (78,216) (6,039,533) (6,002,318) (1,391,215) (1,458,044)

(Loss)/Profit from operations (2,180,258) 780,378 94,277 258,222 Finance costs (443,520) (371,064) - -

(Loss)/Profit before tax 6 (2,623,778) 409,314 94,277 258,222 Tax credit/(expense) 7 125,962 300,988 60,985 (135,071)

(Loss)/Profit for the financial year (2,497,816) 710,302 155,262 123,151

Attributable to:- Owners of the Company (2,542,449) 712,688 155,262 123,151 Non-controlling interests 10 44,633 (2,386) - -

(Loss)/Profit for the financial year (2,497,816) 710,302 155,262 123,151

Other comprehensive income Item that will not be reclassified subsequently to profit or loss Revaluation surplus from property plant and equipment - 6,550,720 - -

Total comprehensive (loss)/income for the financial year (2,497,816) 7,261,022 155,262 123,151

Attributable to:Owners of the Company (2,542,449) 7,263,408 155,262 123,151 Non-controlling interest 44,633 (2,386) - -

Total comprehensive (loss)/income for the financial year (2,497,816) 7,261,022 155,262 123,151

(Loss)/Earnings per share attributable to the owners of the Company (sen) Basic and diluted 8 (0.61) 0.18

Theannexednotesformanintegralpartof,andshouldbereadinconjunctionwith,thesefinancialstatements.


STATEMENTSOFFINANCIALPOSITIONAS AT 29 FEBRUARY 2016


ASSETS Non-current assets

Property, plant and equipment 9 44,143,553 37,976,219 76,638 87,028 Investment in subsidiaries 10 - - 2,681,003 2,681,003 Other investments 11 - 25,000 - 25,000

44,143,553 38,001,219 2,757,641 2,793,031

Current assets

Inventories 12 2,347,715 2,782,549 - - Receivables, deposits and prepayments 13 9,369,755 9,210,024 23,139,501 19,202,854 Tax assets 235,465 386,550 100,000 56,900 Cash and cash equivalents 14 3,472,429 3,585,689 562,423 577,876 Other investments 11 10,337 - 10,337 - 15,435,701 15,964,812 23,812,261 19,837,630

TOTAL ASSETS 59,579,254 53,966,031 26,569,902 22,630,661

EQUITY AND LIABILITIES Equity Share capital 15 43,306,063 39,369,153 43,306,063 39,369,153 Share premium 16 10,768,042 10,966,787 10,768,042 10,966,787 Other reserves 17 23,740,316 23,893,802 17,125,582 17,125,582 Accumulated losses (35,168,511) (32,779,548) (44,732,546) (44,887,808) Total equity attributable to owners of the Company 42,645,910 41,450,194 26,467,141 22,573,714 Non-controlling interests 10 84,534 39,901 - -

Total equity 42,730,444 41,490,095 26,467,141 22,573,714 Liabilities Non-current liabilities Loans and borrowings 18 8,694,369 2,886,304 - - Deferred tax liabilities 19 2,047,798 2,179,933 - -

10,742,167 5,066,237 - - Current liabilities Loans and borrowings 18 2,055,919 1,202,160 - - Payables, deposits and accruals 20 4,028,053 6,207,539 102,761 56,947 Tax liabilities 22,671 - - - 6,106,643 7,409,699 102,761 56,947 Total liabilities 16,848,810 12,475,936 102,761 56,947

TOTAL EQUITY AND LIABILITIES 59,579,254 53,966,031 26,569,902 22,630,661



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STATEMENTOFCHANGESINEquITyFOR THE FINANCIAL YEAR ENDED 29 FEBRUARY 2016

Non-Distributable Share Share Warrant Accumulated Total Capital Premium Reserve Losses Equity Note RM RM RM RM RM At 1 March 2014 39,369,153 10,966,787 17,125,582 (45,010,959) 22,450,563

Comprehensive income Profit for the financial year - - - 123,151 123,151 Total comprehensive income for the financial year - - - 123,151 123,151

At 28 February 2015 39,369,153 10,966,787 17,125,582 (44,887,808) 22,573,714 Comprehensive income Profit for the financial year - - - 155,262 155,262 Total comprehensive income for the financial year - - - 155,262 155,262 Transactions with owners Issue of shares pursuant to private placement 15 3,936,910 (198,745) - - 3,738,165

Total transactions with owners 3,936,910 (198,745) - - 3,738,165

At 29 February 2016 43,306,063 10,768,042 17,125,582 (44,732,546) 26,467,141




Cash flows from operating activities (Loss)/Profit before tax (2,623,778) 409,314 94,277 258,222 Adjustmentsfor:- Allowance for slow moving inventories 22,756 - - - Depreciation of property, plant and equipment 2,527,147 2,254,448 16,773 15,781 Impairment loss on receivables 58,164 59,775 - - Income distribution from fixed income fund (15,753) (180,128) (15,753) (180,128)Interest expense 443,520 371,064 - - Interest income (20,718) (18,865) (627,645) (389,222)Loss on disposal of property, plant and equipment 127,348 237,356 - - Reversal of impairment loss on receivables (71,920) (192) - - Unrealised gain on foreign exchange, net (136,077) (229,625) - -

Operating profit/(loss) before working capital changes 310,689 2,903,147 (532,348) (295,347)Inventories 412,078 (800,767) - - Receivables 282,504 (1,732,370) (3,310,189) (17,157,646)Payables (3,124,494) 1,777,747 45,814 (33,768)

Cash (used in)/generated from operations (2,119,223) 2,147,757 (3,796,723) (17,486,761)Tax refunded 508,998 447,111 160,385 - Tax paid (341,415) (552,471) (142,500) (131,221)

Net cash (used in)/from operating activities carried down (1,951,640) 2,042,397 (3,778,838) (17,617,982)

Cash flows from investing activities Income distribution received 15,753 180,128 15,753 180,128 Interest received 20,718 18,865 1,187 5,594 Investment in unquoted shares - (25,000) - (25,000)Placement of short term fund (10,337) - (10,337) - Proceeds from disposal of investment in unquoted shares 25,000 - 25,000 - Proceeds from disposal of property, plant and equipment 108,000 100,000 - - Purchase of property, plant and equipment 9 (5,026,958) (6,070,518) (6,383) (89,246) Net cash (used in)/from investing activities (4,867,824) (5,796,525) 25,220 71,476

STATEMENTSOFCASHFLOWSFOR THE FINANCIAL YEAR ENDED 29 FEBRUARY 2016



Cash flows from financing activities Proceeds from private placement 15 3,738,165 - 3,738,165 - Interest paid (443,520) (371,064) - - Repayment of finance lease payables (995,777) (1,396,554) - - Drawdown/(Repayments) of term loans 4,265,726 (10,935,499) - - Net cash from/(used in) financing activities 6,564,594 (12,703,117) 3,738,165 -

Net (decrease)/increase in cash and cash equivalents (254,870) (16,457,245) (15,453) (17,546,506)Effects of exchange rate changes on cash and cash equivalents 141,610 85,878 - - Cash and cash equivalents at beginning of the financial year 3,585,689 19,957,056 577,876 18,124,382

Cash and cash equivalents at end of the financial year 3,472,429 3,585,689 562,423 577,876


STATEMENTSOFCASHFLOWSFOR THE FINANCIAL YEAR ENDED 29 FEBRUARY 2016 (CONT’D)


1. CORPORATE INFORMATION

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andislistedontheACEMarketofBursaMalaysiaSecuritiesBerhad.

TheregisteredofficeoftheCompanyislocatedatSuiteS-21-H,21stFloor,MenaraNortham,55JalanSultanAhmad Shah, 10050 Penang.

TheprincipalplaceofbusinessislocatedatLot11.2,Level11,MenaraLienHoe,No.8,PersiaranTropicana,47410 Petaling Jaya, Selangor.

The principal activities of the Company are those of investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are disclosed in Note 10. There have been no significant changes in the nature of these principal activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 27 June 2016.

2. BASIS OF PREPARATION

2.1 Statement of compliance

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewiththeMalaysianFinancialReportingStandards(“MFRSs”),InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.

2.2 Adoption of amendments/improvements to MFRSs

The Group and the Company have adopted the following amendments/improvements to MFRSs that aremandatory for the current financial year:

Amendments/ImprovementstoMFRSs MFRS2 Share-basedPayment MFRS3 BusinessCombinations MFRS8 OperatingSegments MFRS13 FairValueMeasurement MFRS116 Property,PlantandEquipment MFRS119 EmployeeBenefits MFRS124 RelatedPartyDisclosures MFRS138 IntangibleAssets MFRS140 InvestmentProperty

Theadoptionof theaboveamendments/improvements toMFRSsdidnothaveanysignificanteffecton thefinancial statements of the Group and of the Company, and did not result in significant changes to the Group’s and the Company’s existing accounting policies.

Amendments to MFRS 2 Share-based Payment

Amendments to MFRS 2 clarify the definition of ‘vesting conditions’ by separately defining ‘performancecondition’and‘servicecondition’toensureconsistentclassificationofconditionsattachedtoashare-basedpayment.

noteS to the Financial StateMentSFor the Financial Year ended 29 FebruarY 2016

noteS to the Financial StateMentSFor the Financial Year ended 29 FebruarY 2016 (cont’d)


2. BASIS OF PREPARATION (cont’d)

2.2 Adoption of amendments/improvements to MFRSs (cont’d)

Amendments to MFRS 3 Business Combinations

AmendmentstoMFRS3clarifythatwhencontingentconsiderationmeetsthedefinitionoffinancialinstrument,itsclassificationasaliabilityorequityisdeterminedbyreferencetoMFRS132.Theyalsoclarifythatcontingentconsideration that is classified as an asset or a liability shall be subsequently measured at fair value at each reporting date and changes in fair value shall be recognised in profit or loss.

In addition, Amendments to MFRS 3 clarify that MFRS 3 excludes from its scope the accounting for theformationof all typesof joint arrangements (asdefined inMFRS11) in the financial statementsof the jointarrangement itself.

Amendments to MFRS 8 Operating Segments

Amendments toMFRS8requireanentity todisclosethe judgementsmadebymanagement inapplyingtheaggregation criteria to operating segments. This includes a brief description of the operating segments that have been aggregated and the economic indicators that have been assessed in determining that the aggregated operating segments share similar economic characteristics.

The amendments also clarify that an entity shall provide reconciliations of the total of the reportable segments’ assets to the entity’s assets if the segment assets are reported regularly to the chief operating decision maker.

Amendments to MFRS 13 Fair Value Measurement

Amendments to MFRS 13 relate to the IASB’s Basis for Conclusions which is not an integral part of theStandard. The Basis for Conclusions clarifies that when IASB issued IFRS 13, it did not remove the practical ability to measure short-term receivables and payables with no stated interest rate at invoice amounts without discounting, if the effect of discounting is immaterial.

The amendments also clarify that the scope of the portfolio exception of MFRS 13 includes all contractsaccounted forwithin thescopeofMFRS139orMFRS9, regardlessofwhether theymeet thedefinitionoffinancialassetsorfinancialliabilitiesasdefinedinMFRS132.

Amendments to MFRS 116 Property, Plant and Equipment

AmendmentstoMFRS116clarifytheaccountingtreatmentfortheaccumulateddepreciationwhenanassetisrevalued. They clarify that:• thegrosscarryingamount isadjusted inamannerthat isconsistentwiththerevaluationof thecarrying

amount of the asset; and• theaccumulateddepreciationiscalculatedasthedifferencebetweenthegrosscarryingamountandthe

carrying amount of the asset after taking into account accumulated impairment losses.

Amendments to MFRS 124 Related Party Disclosures

AmendmentstoMFRS124clarifythatanentityprovidingkeymanagementpersonnelservicestothereportingentity or to the parent of the reporting entity is a related party of the reporting entity.




2.3 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective

TheGroupandtheCompanyhavenotadoptedthefollowingnewMFRSsandamendments/improvementstoMFRSsthat have been issued, but yet to be effective:

Effective for financial periods beginning on or after NewMFRSs MFRS9 FinancialInstruments 1January2018 MFRS15 RevenuefromContractswithCustomers 1January2018 MFRS16 Leases 1January2019 Amendments/ImprovementstoMFRSs MFRS5 Non-currentAssetHeldforSaleandDiscontinuedOperations 1January2016 MFRS7 FinancialInstruments:Disclosures 1January2016 MFRS10 ConsolidatedFinancialStatements Deferred/ 1 January 2016 MFRS11 JointArrangements 1January2016 MFRS12 DisclosureofInterestinOtherEntities 1January2016 MFRS101 PresentationofFinancialStatements 1January2016 MFRS107 StatementofCashFlows 1January2017 MFRS112 IncomeTaxes 1January2017 MFRS116 Property,PlantandEquipment 1January2016 MFRS119 EmployeeBenefits 1January2016 MFRS127 SeparateFinancialStatements 1January2016 MFRS128 InvestmentsinAssociatesandJointVentures Deferred/ 1 January 2016 MFRS138 IntangibleAssets 1January2016 MFRS141 Agriculture 1January2016

AbriefdiscussionontheabovesignificantnewMFRSsandamendments/improvementstoMFRSsaresummarisedbelow.DuetothecomplexityofthesenewMFRSsandamendments/improvementstoMFRSs,thefinancialeffectsof their adoption are currently still being assessed by the Group and the Company.

MFRS 9 Financial Instruments

KeyrequirementsofMFRS9:-

• MFRS9introducesanapproachforclassificationoffinancialassetswhichisdrivenbycashflowcharacteristicsand the business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments.

Inessence,ifafinancialassetisasimpledebtinstrumentandtheobjectiveoftheentity’sbusinessmodelwithinwhich it isheld is tocollect itscontractualcashflows, thefinancialasset ismeasuredatamortisedcost. Incontrast,ifthatassetisheldinabusinessmodeltheobjectiveofwhichisachievedbybothcollectingcontractualcashflowsandsellingfinancialassets,thenthefinancialasset ismeasuredatfairvalue inthestatementsoffinancial position, and amortised cost information is provided through profit or loss. If the business model is neither of these, then fair value information is increasingly important, so it is provided both in the profit or loss and in the statements of financial position.

• MFRS9introducesanew,expected-lossimpairmentmodelthatwillrequiremoretimelyrecognitionofexpectedcredit losses. Specifically, this Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entity to recognise expected credit losses at all times and to update the amount of expected credit lossesrecognisedateachreportingdatetoreflectchangesinthecreditriskoffinancialinstruments.Thismodeleliminates the threshold for the recognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before credit losses are recognised.

• MFRS 9 introduces a substantially-reformedmodel for hedge accounting,with enhanced disclosures aboutrisk management activity. The new model represents a significant overhaul of hedge accounting that aligns the accountingtreatmentwithriskmanagementactivities,enablingentitiestobetterreflecttheseactivitiesintheirfinancial statements. In addition, as a result of these changes, users of the financial statements will be provided with better information about risk management and the effect of hedge accounting on the financial statements.



2. BASIS OF PREPARATION

2.3 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective (cont’d)

MFRS 15 Revenue from Contracts with Customers

ThecoreprincipleofMFRS15isthatanentityrecognisesrevenuetodepictthetransferofpromisedgoodsorservices to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with the core principle by applying the following steps:

(i) identify the contracts with a customer;(ii) identify the performance obligation in the contract;(iii) determine the transaction price;(iv) allocate the transaction price to the performance obligations in the contract;(v) recognise revenue when (or as) the entity satisfies a performance obligation.

MFRS15alsoincludesnewdisclosuresthatwouldresult inanentityprovidingusersoffinancialstatements

about the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers.

ThefollowingMFRSsandICInterpretationswillbewithdrawnontheapplicationofMFRS15:

MFRS111 ConstructionContracts MFRS118 Revenue IC Interpretation 13 Customer Loyalty Programmes IC Interpretation 15 Agreements for the Construction of Real Estate IC Interpretation 18 Transfers of Assets from Customers IC Interpretation 131 Revenue – Barter Transactions Involving Advertising Services

MFRS 16 Leases

CurrentlyunderMFRS117Leases,leasesareclassifiedeitherasfinanceleasesoroperatingleases.Alesseerecognises on its statement of financial position assets and liabilities arising from the finance leases.

MFRS16eliminatesthedistinctionbetweenfinanceandoperatingleasesforlessees.Allleaseswillbebroughtonto its statement of financial position except for short-term and low value asset leases.

Amendments to MFRS 7 Financial Instruments: Disclosures

AmendmentstoMFRS7provideadditionalguidancetoclarifywhetherservicingcontractsconstitutecontinuinginvolvementforthepurposesofapplyingthedisclosurerequirementsofMFRS7.

The amendments also clarify the applicability of Disclosure – Offsetting Financial Assets and Financial Liabilities (AmendmentstoMFRS7)tocondensedinterimfinancialstatements.

Amendments to MFRS 101 Presentation of Financial Statements

Amendments to MFRS 101 improve the effectiveness of disclosures. The amendments clarify guidanceon materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.

Amendments to MFRS 107 Statement of Cash Flows

AmendmentstoMFRS107requireentitiestoprovidedisclosuresthatenableusersoffinancialstatementstoevaluate changes in liabilities arising from financing activities, including changes from cash flows and non-cash changes. The disclosure requirement could be satisfied in various ways, and one method is by providing reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities.




2.3 New MFRSs and amendments/improvements to MFRSs that have been issued, but yet to be effective (cont’d)

Amendments to MFRS 112 Income Taxes

AmendmentstoMFRS112clarifythatdecreasesinvalueofdebtinstrumentmeasuredatfairvalueforwhichthe tax base remains at its original cost give rise to a deductible temporary difference. The estimate of probable future taxable profits may include recovery of some of an entity’s assets for more that their carrying amounts if sufficient evidence exists that it is probable the entity will achieve this.

The amendments also clarify that deductible temporary differences should be compared with the entity’s future taxable profits excluding tax deductions resulting from the reversal of those deductible temporary differences when an entity evaluates whether it has sufficient future taxable profits. In addition, when an entity assesses whether taxable profits will be available, it should consider tax law restrictions with regards to the utilisation of the deduction.

Amendments to MFRS 116 Property, Plant and Equipment

AmendmentstoMFRS116prohibitrevenue-baseddepreciationbecauserevenuedoesnotreflectthewayinwhich an item of property, plant and equipment is used or consumed.

Amendments to MFRS 119 Employee Benefits

AmendmentstoMFRS119clarifythatthehighqualitycorporatebondsusedtoestimatethediscountrateforpost-employment benefit obligations should be denominated in the same currency as the liability and the depth of the market for high quality corporate bonds should be assessed at a currency level.

Amendments to MFRS 127 Separate Financial Statements

Amendments toMFRS 127 allow a parent and investors to use the equitymethod in its separate financialstatementstoaccountforinvestmentsinsubsidiaries,jointventuresandassociates,inadditiontotheexistingoptions.

Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investments in Associates and Joint Ventures

TheseamendmentsaddressanacknowledgedinconsistencybetweentherequirementsinMFRS10andthoseinMFRS128,indealingwiththesaleorcontributionofassetsbetweenaninvestoranditsassociateorjointventure.

The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves abusiness,asdefinedinMFRS3.Apartialgainorlossisrecognisedwhenatransactioninvolvesassetsthatdo not constitute a business.

Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosures of Interests in Other

Entities and MFRS 128 Investments in Associates and Joint Ventures

These amendments address the following issues that have arisen in the application of the consolidation exception for investment entities:

• Exemptionfrompresentingconsolidatedfinancialstatements:theamendmentsclarifythattheexemptionfrom presenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value.

• Consolidationofintermediateinvestmententities:theamendmentsclarifythatonlyasubsidiaryisnotaninvestment entity itself and provides support services to the investment entity is consolidated. All other subsidiaries of an investment entity are measured at fair value.

• Policychoiceforequityaccountingforinvestmentsinassociatesandjointventures:theamendmentsallowanon-investmententity thathasan interest inanassociateor jointventure that isan investmententity,when applying the equity method, to retain the fair value measurement applied by the investment entity associateorjointventuretoitsinterestinsubsidiaries,ortounwindthefairvaluemeasurementandinsteadperformaconsolidationattheleveloftheinvestmententityassociateorjointventure.




2.4 Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economicenvironmentinwhichtheyoperates(“thefunctionalcurrency”).TheconsolidatedfinancialstatementsarepresentedinRinggitMalaysia(“RM”),whichisalsotheCompany’sfunctionalcurrency.

2.5 Basis of measurement

The financial statements of the Group and of the Company have been prepared on the historical cost basis, except as otherwise disclosed in Note 3.

2.6 Use of estimates and judgement

ThepreparationoffinancialstatementsinconformitywithMFRSsrequirestheuseofcertaincriticalaccountingestimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue andexpensesduringthereportingperiod.ItalsorequiresdirectorstoexercisetheirjudgementintheprocessofapplyingtheGroup’sandtheCompany’saccountingpolicies.Althoughtheseestimatesandjudgementarebased on the directors’ best knowledge of current events and actions, actual results may differ.

Theareas involvingahigherdegreeof judgementorcomplexity,orareaswhereassumptionsandestimatesthat are significant to the financial statements are disclosed in Note 4.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unless otherwise stated, the following accounting policies have been applied consistently to all the financial years presented in the financial statements of the Group and of the Company.

3.1 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

(a) Subsidiaries and business combination

Subsidiaries are entities (including structured entities) over which the Group is exposed, or has rights, to variable returns from its involvement with the acquirees and has the ability to affect those returns through its power over the acquirees.

The financial statements of subsidiaries are included in the consolidated financial statements from the date the Group obtains control of the acquirees until the date the Group loses control of the acquirees.

The Group applies the acquisition method to account for business combinations from the acquisition date.

For a new acquisition, goodwill is initially measured at cost, being the excess of the following:

• thefairvalueoftheconsiderationtransferred,calculatedasthesumoftheacquisition-datefairvalueof assets transferred (including contingent consideration), the liabilities incurred to former owners of the acquiree and the equity instruments issued by the Group. Any amounts that relate to pre-existing relationships or other arrangements before or during the negotiations for the business combination, that are not part of the exchange for the acquiree, will be excluded from the business combination accounting and be accounted for separately; plus

• the recognised amount of any non-controlling interests in the acquiree either at fair value or at theproportionate share of the acquiree’s identifiable net assets at the acquisition date (the choice of measurement basis is made on an acquisition-by-acquisition basis); plus

• ifthebusinesscombinationisachievedinstages,theacquisition-datefairvalueofthepreviouslyheldequity interest in the acquiree; less

• thenetfairvalueoftheidentifiableassetsacquiredandtheliabilities(includingcontingentliabilities)assumed at the acquisition date.



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

3.1 Basis of consolidation (cont’d)

(a) Subsidiaries and business combination (cont’d)

When theexcess isnegative,abargainpurchasegain is recognised immediately inprofitor lossat theacquisition date.

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

If the business combination is achieved in stages, the Group remeasures the previously held equity interest

in the acquiree to its acquisition-date fair value, and recognises the resulting gain or loss, if any, in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss or transferred directly to retained earnings on the same basis as would be required if the acquirer had disposed directly of the previously held equity interest.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the business combination occurs, the Group uses provisional fair value amounts for the items for which the accountingisincomplete.Theprovisionalamountsareadjustedtoreflectnewinformationobtainedaboutfacts and circumstances that existed as of the acquisition date, including additional assets or liabilities identified in the measurement period. The measurement period for completion of the initial accounting ends as soon as the Group receives the information it was seeking about facts and circumstances or learns that more information isnotobtainable,subjecttothemeasurementperiodnotexceedingoneyearfromtheacquisition date.

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any gain or loss arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an associate, a jointventure,anavailable-for-salefinancialassetoraheldfortradingfinancialasset.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The difference between the Group’s share of net assets before and after the change, and the fair value of the consideration received or paid, is recognised directly in equity.

(b) Non-controlling interests

Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company and are presented separately in the consolidated statement of financial position within equity.

Losses attributable to the non-controlling interests are allocated to the non-controlling interests even if the losses exceed the non-controlling interests.

(c) Transactions eliminated on consolidation

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

unrealised gains arising from transactions with equity-accounted associates and joint ventures areeliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.




3.2 Separate financial statements

In the Company’s statement of financial position, investment in subsidiaries are measured at cost less any accumulated impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs. The policy for the recognition and measurement of impairment losses shall be applied on the same basis as would be required for impairment of non-financial assets as disclosed in Note 3.13(b).

3.3 Foreign currency transactions and operations

Translation of foreign currency transactions

Foreign currency transactions are translated to the respective functional currencies of the Group entities at the exchange rates prevailing at the dates of the transactions.

At the end of each reporting date, monetary items denominated in foreign currencies are retranslated at the exchange rates prevailing at the reporting date.

Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the dates the fair values were determined. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated at the historical rates as at the dates of the initial transactions.

Foreign exchange differences arising on settlement or retranslation of monetary items are recognised in profit or loss except for monetary items that are designated as hedging instruments in either a cash flow hedge or ahedgeoftheGroup’snetinvestmentofaforeignoperation.Whensettlementofamonetaryitemreceivablefrom or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences are recognised in profit or loss in the separate financial statements of the parent company or the individual financial statements of the foreign operation. In the consolidated financial statements, the exchange differences are considered to form part of a net investment in a foreign operation and are recognised initially in other comprehensive income until its disposal, at which time, the cumulative amount is reclassified to profit or loss.

The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

3.4 Revenue and other income

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, net of discounts, rebates, returns and taxes.

(a) Goods sold

Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, 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.




3.4 Revenue and other income (cont’d)

(b) Rental income

Rental income is recognised on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

(c) Interest income

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

(d) Management fees

Managementfeesarerecognisedwhenservicesarerendered.

3.5 Employee benefits

(a) Short-term employee benefits

Short-term employee benefit obligations in respect of wages, salaries, social security contributions, annual bonuses, paid annual leave, sick leave and non-monetary benefits are recognised as an expense in the financial year where the employees have rendered their services to the Group and the Company.

(b) Defined contribution plans

Asrequiredbylaw,theGroupandtheCompanycontributetotheEmployeesProvidentFund(“EPF”),thenational defined contribution plan. Such contributions are recognised as an expense in the profit or loss in the period in which the employees render their services.

3.6 Borrowing Costs

Borrowing costs are interests and other costs that the Group and the Company incur in connection with borrowing of funds.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying

asset are recognised in profit or loss using the effective interest method.

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

The Group begin capitalising borrowing costs when the Group have incurred the expenditures for the asset, incurred related borrowing costs and undertaken activities that are necessary to prepare the asset for its intended use or sale.

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.




3.7 Income tax

Income tax expense in profit or loss comprises current and deferred tax. Current and deferred tax are 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.

(a) Current tax

Current tax is the expected taxes payable or receivable on the taxable income or loss for the financial year, using the tax rates that have been enacted or substantively enacted by the end of the reporting period, and anyadjustmenttotaxpayableinrespectofpreviousfinancialyears.

(b) Deferred tax

Deferred tax is recognised using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in the statements of financial position. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences, unutilised tax losses and unused tax credits, to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax is not recognised if the temporary differences arise from the initial recognition of assets and liabilities in a transaction which is not a business combination and that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries,branches,associatesandinterestsinjointventures,exceptwheretheGroupisabletocontrolthe reversal timing of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantially enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable right to offset

current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority on the same taxable entity, or on different tax entities, but they intend to settle their income tax recoverable and income tax payable on a net basis or their tax assets and liabilities will be realised simultaneously.




3.8 Financial instruments

Financial instruments are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contract provisions of the financial instrument.

Financial instruments are recognised initially at fair value, except for financial instruments not measured at fair value through profit or loss, they are measured at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial instruments.

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

(a) Subsequent measurement

The Group and the Company categorise the financial instruments as follows:

(i) Financial assets

Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial assets are either held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or are designated into this category upon initial recognition.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value with the gain or loss recognised in profit or loss.

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at costs.

Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method less accumulated impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.13(a). Gains and losses are recognised in profit or loss through the amortisation process.

Available-for-sale financial assets

Available-for-sale financial assets comprise investment in equity and debt securities that are designated as available-for-sale or are not classified in any of the three preceding categories.

Subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except for impairment losses and foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair values hedges which are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive incomeisreclassifiedfromequitytoprofitorlossasareclassificationadjustmentwhenthefinancialasset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on 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.




3.8 Financial instruments (cont’d)

(a) Subsequent measurement (cont’d)

(ii) Financial liabilities

Other financial liabilities

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss through the amortisation process.

(b) Financial Guarantee Contracts

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

The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries andjointlycontrolentitiesasinsurancecontractsasdefinedinMFRS4InsuranceContracts.TheGrouprecognises these insurance contracts as recognised insurance liabilities when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits would be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

(c) Regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting (i.e. the date the Group and the Company themselves purchase or sell an asset). Trade date accounting refers to:

(i) the recognition of an asset to be received and the liability to pay for it on the trade date; and(ii) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition

of a receivable from the buyer for payment on the trade date.

(d) Derecognition

A financial asset or a part of it is derecognised when, and only when, the contractual rights to receive the cash flows from the financial asset expire or control of the asset is not retained or substantially all of the risks and rewards of ownership of the financial asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

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

(e) Offsetting of financial instruments

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




3.9 Property, plant and equipment

(a) Recognition and measurement

Property, plant and equipment (other than leasehold lands and buildings) are measured at cost less accumulated depreciation and any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.13(b).

Leasehold lands and buildings are measured at fair value, based on valuations by external independent valuers, less accumulated depreciation on land and buildings and any accumulated impairment losses recognised after the date of revaluation. Valuations are performed with sufficient regularity to ensure that the fair value of the leasehold lands and buildings does not differ materially from the carrying amount. Any accumulated depreciation as at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

A revaluation surplus is recognised in other comprehensive income and credited to the revaluation reserve. However, the increase shall be recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. If an asset’s carrying amount is decreased as a result of a revaluation, the decrease shall be recognised in profit or loss. However, the decrease shall be recognised in other comprehensive income to the extent of any credit balance existing in the revaluation reserve in respect of that asset.

The revaluation reserve is transferred to retained earnings in full when the asset is derecognised.

Cost of assets includes expenditures that are directly attributable to the acquisition of the asset and any other costs that are directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes cost of materials, direct labour, and any other direct attributable costs but excludes internal profits. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs in Note 3.6.

When significant parts of an itemof property, plant and equipment havedifferent useful lives, they areaccounted for as a separate items of property, plant and equipment.

(b) Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the part will flow to the Group or the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss as incurred.

(c) Depreciation

Leasehold lands are depreciated on a straight-line basis over the remaining lease terms. Other property, plant and equipment are depreciated on the straight line basis to write off the cost of the property, plant and equipment over their estimated useful lives.

The principal annual rates used for this purpose are:-

Leasehold lands 40 years and 48 years Buildings 2% Solar photovoltaic plant 5% Plant, machinery, tools and equipment 10% - 20% Furniture, fittings and office equipment 10% - 20% Motorvehicles 15%-20% Renovation 10%

The residual values, useful lives and depreciation methods are reviewed at the end of each reporting period andadjustedasappropriate.




3.9 Property, plant and equipment

(d) Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognised in profit or loss.

3.10 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception 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 or assets.

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases that do not meet this criterion are classified as operating leases.

(a) Lessee accounting

If an entity in the Group is a lessee in a finance lease, it capitalises the leased asset and recognises the related liability. The amount recognised at the inception date is the fair value of the underlying leased asset or, if lower, 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 assets.

Minimum lease payments are apportioned between the finance charge and the reduction of theoutstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are charged as expenses in the periods in which they are incurred.

The capitalised leased asset is classified by nature as property, plant and equipment.

For operating leases, the Group does not capitalise the leased asset or recognise the related liability. Instead lease payments under an operating lease are recognised as an expense on the straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the user’s benefit.

(b) Lessor accounting

If an entity in the Group is a lessor in a finance lease, it derecognises the underlying asset and recognises a lease receivable at an amount equal to the net investment in the lease. Finance income is recognised in profit or loss based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the finance lease.

If an entity in the Group is a lessor in an operating lease, the underlying asset is not derecognised but is presented in the statement of financial position according to the nature of the asset. Lease income from operating leases is recognised in profit or loss on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished.




3.11 Inventories

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

Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:

• rawmaterials:purchasecostsonafirst-infirst-outbasis.• finished goods and work-in-progress: costs of direct materials and labour and a proportion of

manufacturing overheads based on normal operating capacity. These costs are assigned on a first-in-first-out basis.

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

3.12 Cash and cash equivalents

For the purpose of the statements of cash flows, cash and cash equivalents comprise cash on hand, bank balances and deposits, highly liquid investments with a maturity of three months or less, that are readily convertibletocashandaresubjecttoaninsignificantriskofchangesinvalue.

3.13 Impairment of assets

(a) Impairment and uncollectibility of financial assets

At each reporting date, all financial assets (except for financial assets categorised as fair value through profitor lossand investment insubsidiaries)areassessedwhether there isanyobjectiveevidenceofimpairment as a result of one or more events having an impact on the estimated future cash flows of the financial asset that can be reliably estimated. Losses expected as a result of future events, no matter how likely, are not recognised.

Evidence of impairment may include indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicates that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Loans and receivables

TheGroupandtheCompanyfirstassesswhetherobjectiveevidenceofimpairmentexistsindividuallyfor financial assets that are individually significant, and individually or collectively for financial assets that arenotindividuallysignificant.Ifnoobjectiveevidenceforimpairmentexistsforanindividuallyassessedfinancial asset, whether significant or not, the Group and the Company may include the financial asset in a group of financial assets with similar credit risk characteristics and collectively assess them for impairment. Financial assets that are individually assessed for impairment for which an impairment loss is or continues to be recognised are not included in the collective assessment of impairment.

The amount of impairment loss is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The carrying amount of the financial asset is reduced through the use of an allowance account and the loss is recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases due to an event occurring after the impairment that was recognised, the previously recognised impairment loss is then reversed by adjustinganallowanceaccounttotheextentthatthecarryingamountofthefinancialassetdoesnotexceed what the amortised cost would have been had the impairment not been recognised.

Loans together with the associated allowance are written off when there is no realistic prospect of future

recovery and all collateral has been realised or has been transferred to the Group and the Company. If a write-off is later recovered, the recovery is credited to the profit or loss.




3.13 Impairment of assets (cont’d)

(a) Impairment and uncollectibility of financial assets (cont’d)

Available-for-sale financial assets

In the case of equity investments classified as available-for-sale, a significant or prolonged decline in thefairvaluebelowitscostisconsideredtobeobjectiveevidenceof impairment.TheGroupandtheCompany use their judgement to determine what is considered as significant or prolonged decline,evaluating past volatility experiences and current market conditions.

Whereadecline in the fairvalueofanavailable-for-sale financialassethasbeen recognised inothercomprehensiveincomeandthereisobjectiveevidencethattheasset is impaired,thecumulativelossthat had been recognised in other comprehensive income shall be reclassified from equity to profit or lossasa reclassificationadjustmenteventhoughthe financialassethasnotbeenderecognised.Theamount of cumulative loss that is reclassified from equity to profit or loss shall be the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss.

Impairment losses on available-for-sale equity investments are not reversed through profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss, is recognised in other comprehensive income.

For available-for-sale debt investments, impairment losses are subsequently reversed through profit or lossifanincreaseinthefairvalueoftheinvestmentcanbeobjectivelyrelatedtoalosseventoccurringafter the recognition of the impairment loss in profit or loss.

(b) Impairment of non-financial assets

The carrying amounts of non-financial assets (except for inventories 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 Group and the Company make an estimate of the asset’s recoverable amount. For goodwill and intangible assets that have indefinite useful life and are not yet available for use, the recoverable amount is estimated at each reporting date.

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 non-financialassetsorcash-generatingunits(“CGus”).Subjecttoanoperatingsegmentceilingtest,forthepurpose of goodwill impairment testing, CGUs 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 CGU or a group of CGUs that are expected to benefit from the synergies of business combination.

The recoverable amount of an asset or a CGU is the higher of its fair value less costs of disposal and its value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In determining the fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

Where thecarryingamountofanassetexceed its recoverableamount, thecarryingamountofassetis reduced to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.




3.13 Impairment of assets (cont’d)

(b) Impairment of non-financial assets (cont’d)

Impairment losses are recognised in profit or loss, except for assets that were previously revalued with the revaluation surplus recognised in other comprehensive income. In the latter case, the impairment is recognised in other comprehensive income up to the amount of any previous revaluation.

Impairment losses in respect of goodwill are not reversed. For other assets, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. An impairment loss is reversed only if there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

3.14 Share capital

Ordinary shares

Ordinary shares are equity instruments. An equity instrument is a contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

3.15 Warrant reserve

Amount allocated in relation to the issuance of warrants are credited to a warrant reserve which is non-distributable.Warrantreserveistransferredtothesharepremiumorretainedearningsupontheexerciseorexpiry of warrants respectively.

3.16 Provisions

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

If the effect of the time value of money is material, provisions that are determined based on the expected future cash flows to settle the obligation are discounted using a current pre-tax rate that reflects current marketassessmentsof the timevalueofmoneyand the risksspecific to the liability.Whendiscounting isused, the increase in the provisions due to passage of time is recognised as finance costs.

Provisionsare reviewedateach reportingdateandadjusted to reflect thecurrentbestestimate. If it isnolonger probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed.

3.17 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Executive Director of the Group, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief operating decision maker that makes strategic decisions.




3.18 Fair value measurements

Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

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

Whenmeasuringthefairvalueofanassetoraliability,theGroupandtheCompanyuseobservablemarketdata as far as possible. Fair value is categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows:

Level1: quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheGroupandthe Company can access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

The Group and the Company recognise transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers.

3.19 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group and of the Company.

Contingent liability is also referred as a present obligation that arises from past events but is not recognised because:

(a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(b) the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities and assets are not recognised in the statements of financial position.



4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

Significantareasofestimation,uncertaintyandcriticaljudgementsinapplyingaccountingpoliciesthathavesignificant effect in determining the amount recognised in the financial year include the following.

(a) Measurement of income taxes

Significant judgement is required in determining the capital allowances and deductibility of certainexpense when estimating the provision for taxation. There were transactions during the ordinary course of business for which the ultimate tax determination of whether additional taxes will be due is uncertain. The Group and the Company recognise liabilities for tax based on estimates of assessment of the tax liabilitydue.Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecorded, such differences will impact the income tax and deferred tax in the periods in which the outcome is known. The income tax expense of the Group and the Company are disclosed in Note 7.

(b) Depreciation and useful lives of property, plant and equipment

As disclosed in Note 3.9, the Group and the Company review the residual values, depreciation rates and depreciation methods at the end of each reporting period. Estimates are applied in the selection of the depreciation method, the useful lives and the residual values. The actual consumption of the economic benefits of the property, plant and equipment may differ from the estimates applied and therefore, future depreciation charges could be revised.

The carrying amounts of the Group’s and the Company’s property, plant and equipment are disclosed in Note 9.

(c) Revaluation of leasehold lands and buildings

The Group carries its leasehold lands and buildings at valuation model, with changes in fair values being recognised in other comprehensive income. The Group engages independent valuation specialists to determine the fair value of the leasehold lands and buildings at a regular interval of at least once in every five years with additional valuations in the intervening years where market conditions indicate that the carrying values of the revalued lands and buildings materially differ from the market values.

(d) Impairment of investments in subsidiaries

The directors review the investments in subsidiaries for impairment when there is an indication of impairment. This involves measuring the recoverable amount which includes fair value less costs to sell and valuation techniques. Valuation techniques include discounted cash flows analysis and in some cases, based on current market indicators and estimates that provide reasonable approximations to the detailed computation. The carrying amounts of the investments in subsidiaries are disclosed in Note 10.

(e) Fair value measurement of financial instruments

Whenthefairvaluesof financialassetsandfinancial liabilitiesrecorded in thestatementsof financialposition cannot be measured based on quoted prices in active markets, their fair value are measured using valuation techniques including the discounted cash flow model. The inputs to these models are takenfromobservablemarketswherepossible,butwherethisisnotfeasible,adegreeofjudgementisrequired in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

The information on the fair value measurements of financial assets and liabilities are disclosed in Note 21(c).



4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (cont’d)

(f) Impairment of financial assets

The Group and the Company recognise impairment losses for loans and receivables using the incurred loss model. At the end of each reporting period, the Group and the Company assess whether there is any objectiveevidencethatloansandreceivablesisimpaired.Individuallysignificantloansandreceivablesare tested for impairment separately by estimating the cash flows expected to be recoverable. All others are grouped into credit risk classes and tested for impairment collectively, using the Group’s and the Company’s past experience of loss statistics, ageing of past due amounts and current economic trends. The actual eventual losses may be different from the impairment made and this may affect the Group’s and the Company’s financial position and results.

For available-for-sale investments, the Group and the Company recognise an impairment loss when there has been a significant or prolonged decline in the market price of the investments. The Group andtheCompanyuseitsjudgementtodecidewhenanimpairmentlossshallberecognisedusingpastexperience of similar investments, historical volatility of the prices and current market conditions. The actual eventual losses may be different from the impairment made and this may affect the Group’s and the Company’s financial position and results.

The carrying amounts of the Group’s and the Company’s financial assets are disclosed in Note 21(a).

(g) Deferred tax assets

Deferred tax assets are recognised for deductible temporary differences, unused tax losses and unabsorbedcapitalallowancesbasedontheprojectedfutureprofitsofthesubsidiariestotheextentthatis probable that taxable profit will be available against which the temporary differences can be utilised. Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanbe recognised, based on the future performance of the subsidiaries. The carrying amount of the Group’s recognised deferred tax assets is disclosed in Note 19.

(h) Write-down of obsolete or slow moving inventories

The Group write down their obsolete or slow moving inventories based on the assessment of their estimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses sales trendandcurrenteconomic trendswhenmakinga judgement toevaluate theadequacyof thewrite-down of obsolete or slowmoving inventories.Where expectations differ from the original estimates,the differences will impact the carrying amount of inventories. The carrying amounts of the Group’s inventories are disclosed in Note 12.

5. REVENUE

GROUP COMPANY 2016 2015 2016 2015 RM RM RM RM Sale of goods 17,393,797 23,398,071 - - Managementfees - - 842,095 1,146,915

17,393,797 23,398,071 842,095 1,146,915



6. (LOSS)/PROFIT BEFORE TAX

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

GROUP COMPANY 2016 2015 2016 2015 RM RM RM RM Auditors’ remuneration - current year 107,000 92,000 37,000 35,000 - over provision in prior financial year - (5,660) - - Allowance for slow moving inventories 22,756 - - - Depreciation of property, plant and equipment 2,527,147 2,254,448 16,773 15,781 Net gain on foreign exchange: - realised (257,415) (45,165) - - - unrealised (136,077) (229,625) - - Impairment loss on receivables 58,164 59,775 - - Income distribution from fixed income fund (15,753) (180,128) (15,753) (180,128) Interest expense 443,520 371,064 - - Interest income from: - subsidiaries - - (626,458) (383,628) - banks (20,718) (18,865) (1,187) (5,594) Loss on disposal of property, plant and equipment 127,348 237,356 - - Personnel expenses (including key management personnel (Note (a)) - salaries and allowances 5,675,971 5,492,061 495,988 434,923 - contribution to defined contribution plan 435,294 448,058 55,491 37,244 Rental expenses - premises 207,437 175,518 45,037 76,518 - motor vehicle 48,000 48,000 48,000 48,000 Rental income (1,596,165) (1,460,165) - - Reversal of impairment loss on receivables (71,920) (192) - -

(a) Included in personnel expenses are the aggregate amounts of remuneration received and receivable by

the directors of the Group and of the Company during the financial year as follows:

GROUP COMPANY 2016 2015 2016 2015 RM RM RM RM

Executive directors: - other emoluments 462,840 560,687 121,240 121,240 - defined contribution plan 66,300 78,735 15,600 15,600 529,140 639,422 136,840 136,840 Non-executive directors: - fees 137,000 132,000 137,000 132,000 - other emoluments 2,000 - 2,000 - 139,000 132,000 139,000 132,000

668,140 771,422 275,840 268,840



7. TAX (CREDIT)/EXPENSE

GROUP COMPANY 2016 2015 2016 2015 RM RM RM RM Current tax:- Malaysianincometax - Current year 43,671 78,500 - 70,600 - (Over)/Under provision in prior financial year (37,498) (53,488) (60,985) 64,471 6,173 25,012 (60,985) 135,071 Deferred tax (Note 19):- Reversal of temporary differences (601,588) (532,300) - - Under provision in prior financial year 469,453 206,300 - - (132,135) (326,000) - -

Total tax (credit)/expense recognised in profit or loss (125,962) (300,988) (60,985) 135,071

Domestic income tax is calculated at theMalaysian statutory income tax rate of 24% (2015: 25%) of the

estimated assessable profit for the financial year.

The reconciliation of the tax amount at statutory income tax rate to the Group’s and the Company’s tax (credit)/expense are as follows:-

GROUP COMPANY 2016 2015 2016 2015 RM RM RM RM (Loss)/Profit before tax (2,623,778) 409,314 94,277 258,222 TaxattheMalaysianstatutory income tax rate of 24% (2015: 25%) (629,707) 102,329 22,626 64,556 Deferred tax recognised at different tax rates - 22,257 - - Tax effect arising from: - non-deductible expenses 166,838 200,275 13,564 102,659 - non-taxable income (21,117) (100,861) (3,781) (45,032) Deferred tax assets not recognised during the financial year 112,277 81,100 2,999 - Utilisation of reinvestment allowance (186,208) (758,900) - - Utilisation of group tax relief - - (35,408) (51,583) (Over)/Under provision in prior financial year: - current tax (37,498) (53,488) (60,985) 64,471 - deferred tax 469,453 206,300 - - Total tax (credit)/expense recognised in profit or loss (125,962) (300,988) (60,985) 135,071

The Group has estimated unabsorbed capital allowances and unutilised tax losses of approximately

RM3,398,577 (2015: RM1,455,112) and RM2,478,309 (2015: RM2,566,065) respectively carried forward,available for set off against future taxable profits of the Group.

TheCompanyhasestimatedunabsorbedcapitalallowancesofapproximatelyRM12,494(2015:Nil)availablefor set off against future taxable profits of the Company.



8. (LOSS)/EARNINGS PER SHARE

Basic (loss)/earnings per share is calculated by dividing the Group’s profit attributable to the owners of the parent by the weighted average number of ordinary shares in issue during the financial year as follows:

GROUP 2016 2015 RM RM (Loss)/Profit for the financial year attributable to owners of the Company: (2,542,449) 712,688 Weightedaveragenumberofordinarysharesinissue(unit) 415,957,677 393,691,530

(Loss)/Earnings per share: Basic and diluted (0.61) 0.18

The diluted (loss)/earnings per share is equivalent to the basic (loss)/earnings per share as the Company does

not have any dilutive potential ordinary shares during the financial year. The Company’s warrants are anti-dilutive for the financial year under review.



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9. PROPERTY, PLANT AND EQUIPMENT (cont’d)

Furniture, Fittings and Office Equipment RM Company Cost At 1.3.2015 172,689 Addition 6,383

At 29.2.2016 179,072

Accumulated Depreciation At 1.3.2015 85,661 Charge for the financial year 16,773

At 29.2.2016 102,434

Net Carrying Amount At 29.2.2016 76,638 Company Cost At 1.3.2014 83,443 Addition 89,246

At 28.2.2015 172,689 Accumulated Depreciation At 1.3.2014 69,880 Charge for the financial year 15,781

At 28.2.2015 85,661

Net Carrying Amount At 28.2.2015 87,028

(a) The leasehold lands and buildings were revalued on 28 February 2015 based on the market values given by independent professional valuers using the comparison method that makes reference to recent transactions and sales evidences involving other similar properties in the vicinity. The most significant input to this valuation approach is price per square feet of comparable properties. Had the leasehold lands and buildings been carried at historical cost less accumulated depreciation, the carrying amounts that would have been recognised in the financial statements are as follows:

GROUP 2016 2015 RM RM Leasehold lands 3,692,256 3,756,832 Buildings 12,461,889 12,768,086

16,154,145 16,524,918



9. PROPERTY, PLANT AND EQUIPMENT (cont’d)

(b) The carrying amounts of property, plant and equipment of the Group that have been pledged as security for credit facilities granted to a subsidiary of the Group as disclosed in Note 18 are as follows:-

GROUP 2016 2015 RM RM Leasehold lands 4,753,035 4,586,854 Buildings 5,339,919 5,713,146

10,092,954 10,300,000

(c) During the financial year, the Group and the Company acquired property, plant and equipment with aggregatecostofRM8,928,829 (2015:RM7,767,018)andRM6,383 (2015:RM89,246) respectively,ofwhich were satisfied as follows:-


Cash payments 5,026,958 6,070,518 6,383 89,246 Finance lease arrangement 3,391,965 1,696,500 - - Payables 510,906 - - -

8,929,829 7,767,018 6,383 89,246

(d) The carrying amounts of property, plant and equipment acquired under finance lease arrangement which

remained outstanding as at the end of the reporting period are as follows:

GROUP 2016 2015 RM RM Plant, machinery, tools and equipment 5,834,119 4,056,846 Furniture, fittings and office equipment 72,267 - Motorvehicles 491,500 267,863 6,397,886 4,324,709

(e) The fair value of leasehold lands and buildings of the Group are categorised as follows:-

Carrying Level 1 Level 2 Level 3 Total amount RM RM RM RM RM Group 2016 - Leasehold lands - 11,844,165 - 11,844,165 11,844,165 - Buildings - 16,342,593 - 16,342,593 16,342,593

- 28,186,758 - 28,186,758 28,186,758

2015 - Leasehold lands - 12,115,688 - 12,115,688 12,115,688 - Buildings - 16,684,312 - 16,684,312 16,684,312

- 28,800,000 - 28,800,000 28,800,000

The valuation of leasehold lands and buildings as at 28 February 2015 is determined by the comparison method of similar properties in the vicinity. There were no transfers between Levels 1 and 2 fair value measurements during the financial years ended 29 February 2016 and 28 February 2015.



10. INVESTMENT IN SUBSIDIARIES

COMPANY 2016 2015 RM RM Unquoted shares, at cost 5,281,002 5,281,002 Less: Accumulated impairment losses (2,599,999) (2,599,999)

2,681,003 2,681,003

The particulars of subsidiaries are as follows:- Country of Effective Equity Name of Company Incorporation Principal Activities Interest 2016 2015

ATEngineering Malaysia Designandmanufactureofindustrial 100% 100% Solution Sdn. Bhd. automation systems and machinery; Renewable energy operators and producer ATPrecisionTooling Malaysia Fabricationofindustrialandengineering 100% 100% Sdn. Bhd. parts

GoodmatrixResources Malaysia Dormant 100% 100% Sdn. Bhd.

yellowChoiceSdn.Bhd. Malaysia Dormant 81% 81%

Subsidiary of AT Precision Tooling Sdn. Bhd.

Fong’s&ATVenture Malaysia Fabricationofindustrialandengineering 75% 75% Sdn. Bhd. parts

(a) Acquisition of subsidiaries

2015

Fong’s & AT Venture Sdn. Bhd.

On5November2014,ATPrecisionToolingSdn.Bhd.(“ATP”),awholly-ownedsubsidiaryoftheCompany,enteredintoaJointVentureandShareholdersAgreement(“JVSA”)withFong’sEngineering&ManufacturingPte.Ltd. (“FEM”) to formFong’s&ATVentureSdn.Bhd. (“FATV”).FATVwas incorporatedon2January2015withinitialpaid-upsharecapitalofRM2dividedinto2ordinarysharesofRM1each.BasedonthetermsandconditionstatedintheJVSA,ATPhadinitiallyacquired2ordinarysharesofRM1eachinFATV.Subsequently, ATP had subscribed additional 99,998 ordinary shares of RM1 each in FATV. Thereafter,ATPhadtransferred25,000ordinarysharesofRM1eachtoFEMatnocost.Thishadresultedinadilutionof interest in FATV from100% to75%.A lossondilutionof interest amounting toRM25,000hasbeenrecognised to the Group’s accumulated losses in the statement of changes in equity.



10. INVESTMENT IN SUBSIDIARIES (cont’d)

(b) ThesubsidiariesoftheGroupthathavenon-controllinginterests(“NCI”)areasfollows:

Fong’s & AT Venture Sdn. Bhd. (cont’d)

Yellow Fong’s & Choice AT Venture Sdn. Bhd. Sdn. Bhd. Total RM RM RM

2016

NCI percentage of ownership interest and voting interest 19% 25%

Carrying amount of NCI 15,651 68,883 84,534

(Loss)/Profit allocated to NCI (1,002) 45,635 44,633

2015

NCI percentage of ownership interest and voting interest 19% 25%

Carrying amount of NCI 16,653 23,248 39,901

Loss allocated to NCI (634) (1,752) (2,386)

(c) The summarised financial information before intra-group elimination of the subsidiaries that have NCI as at the end of each reporting period are as follows:

Yellow Fong’s & Choice AT Venture Sdn. Bhd. Sdn. Bhd. RM RM

2016

Assets and liabilities Non-current assets - - Current assets 84,176 2,608,934 Non-current liabilities - - Current liabilities (1,800) (2,333,402)

Net assets 82,376 275,532



10. INVESTMENT IN SUBSIDIARIES (cont’d)

(c) The summarised financial information before intra-group elimination of the subsidiaries that have NCI as at the end of each reporting period are as follows: (cont’d)

Yellow Fong’s & Choice AT Venture Sdn. Bhd. Sdn. Bhd. RM RM

2016

Results Revenue - 4,062,945 (Loss)/Profit for the financial year, representing total comprehensive (loss)/income for the financial year (5,272) 182,538

Cash flows (used in)/from operating activities (5,272) 20,873 Cash flows from investing activities - - Cash flows from financing activities - -

Net (decrease)/increase in cash and cash equivalents (5,272) 20,873

Dividends paid to NCI - -

2015

Assets and liabilities Non-current assets - - Current assets 89,448 99,316 Non-current liabilities - - Current liabilities (1,800) (6,323)

Net assets 87,648 92,993

Results Revenue - - Loss for the financial year, representing total comprehensive income for the financial year (3,337) (7,007)

Cash flows used in operating activities (3,337) (684) Cash flows used in investing activities - - Cash flows from financing activities - 100,000

Net (decrease)/increase in cash and cash equivalents (3,337) 99,316

Dividends paid to NCI - -



11. OTHER INVESTMENTS

GROUP/COMPANY 2016 2015 RM RM Non-current Available-for-sale financial assets:

- unquoted shares, at cost - 25,000

Current Held for trading investment: Short term fund 10,337 -

Marketvalueofquotedinvestment 10,337 -

(a) On1March2015,theCompanyhaddisposedthe25,000ordinarysharesofRM1eachforLegendaSonataSdn.Bhd.foraconsiderationofRM25,000.

(b) Short term fund represents the investment in money market fund, most of which are placement with Shariah-compliant depositswith licensed financial institutions regulated byBankNegaraMalaysia. Themoney market fund has no lock period and a redemption notice of only one business day.

12. INVENTORIES

GROUP 2016 2015 RM RM

At cost: Raw materials 600,628 477,749 Work-in-progress 1,258,364 1,482,771 Finished goods 488,723 822,029

2,347,715 2,782,549

(a) Duringthefinancialyear,inventoriesoftheGrouprecognisedascostofsalesamountedtoRM7,607,370(2015:RM10,581,144).

(b) The amount of allowance for slow moving inventories which was recognised as an expenses in cost of sales oftheGroupisRM22,756(2015:Nil).



13 RECEIVABLES, DEPOSITS AND PREPAYMENTS

GROUP COMPANY 2016 2015 2016 2015 RM RM RM RM Trade receivables 5,124,715 6,367,494 - - Less: Accumulated impairment loss (140,919) (254,053) - -

4,983,796 6,113,441 - - Other receivables: - Subsidiaries - - 23,101,222 19,237,193 - Third parties 3,581,048 2,758,382 2,641,864 2,579,377

3,581,048 2,758,382 25,743,086 21,816,570 Less: Accumulated impairment loss - Subsidiaries - - (2,119,918) (2,119,918) - Third parties (911,347) (911,347) (911,347) (911,347)

(911,347) (911,347) (3,031,265) (3,031,265) Deposits 1,000,150 886,458 263,338 261,225 Prepayments 716,108 363,090 164,342 156,324

9,369,755 9,210,024 23,139,501 19,202,854

The foreign currency exposure profile of receivables, deposits and prepayments of the Group is as follows:-

GROUP 2016 2015 RM RM Singapore Dollar 2,485,045 2,114,253 United States Dollar 104,621 198,508

(a) Trade Receivables

(i) Credit term

The Group’s normal trade credit term extended to customers range from 30 to 90 days (2015: 30 to 90 days).



13 RECEIVABLES, DEPOSITS AND PREPAYMENTS (cont’d)

(a) Trade Receivables (cont’d)

(ii) Ageing analysis

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

GROUP 2016 2015 RM RM Neither past due nor impaired 4,102,722 4,445,654 1 to 30 days past due not impaired 420,723 657,936 31 to 120 days past due not impaired 456,291 962,635 Morethan121dayspastduenotimpaired 4,060 47,216

881,074 1,667,787 Impaired 140,919 254,053

5,124,715 6,367,494

Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired are creditworthy debtors with long term

relationship and good payment records with the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired Trade receivables that are past due but not impaired are creditworthy debtors who, by past trade

practices, have paid after the expiry of the trade credit terms and the Group is currently still in active trading with the debtors. The Group does not anticipate recovery problems in respect of these debtors.

Receivables that are impaired The trade receivables that are impaired at the reporting date and the movement of allowance accounts

used to record the impairment are as follows:-

GROUP INDIVIDUALLY IMPAIRED 2016 2015 RM RM Trade receivables (nominal amounts) 140,919 254,053 Less: Allowance for impairment loss (140,919) (254,053)

- -

The Group has determined that there are no trade receivables which require collective impairment as full allowance for impairment have always been made for specific debtors that are in significant financial difficulties.



13. RECEIVABLES, DEPOSITS AND PREPAYMENTS (cont’d)

(a) Trade Receivables (cont’d)

(ii) Ageing analysis (cont’d)

The movement in allowance for impairment loss of trade receivables is as follows:-


At beginning of the financial year 254,053 194,470 Charge for the financial year (Note 6) 58,164 59,775 Reversal of impairment loss (Note 6) (71,920) (192) Writtenoff (99,378) - At end of the financial year 140,919 254,053

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.

(b) Other receivables

(i) Amounts owing by subsidiaries is unsecured, bear interest at a rate of 3% (2015: 3%) per annum and is repayable on demand in cash.

(ii) The movements in allowance for impairment loss of other receivables is as follows:


At beginning/end of the financial year 911,347 911,347 3,031,265 3,031,265

Other 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.

14. CASH AND CASH EQUIVALENTS

The currency exposure profile of the Group’s and Company’s cash and cash equivalents is as follows:


RinggitMalaysia 1,999,330 2,767,126 562,423 577,876 Singapore Dollar 1,207,775 666,454 - - United States Dollar 264,779 149,751 - - Others 545 2,358 - -

3,472,429 3,585,689 562,423 577,876



15. SHARE CAPITAL

GROUP/COMPANY 2016 2015 Number of Number of shares Amount shares Amount Unit RM Unit RM

Ordinary shares of RM0.10 each

Authorised: At beginning/end of the financial year 1,000,000,000 100,000,000 1,000,000,000 100,000,000

Issued and fully paid:

At beginning of the financial year 393,691,530 39,369,153 393,691,530 39,369,153 Issued during the financial year 39,369,100 3,936,910 - -

At end of the financial year 433,060,630 43,306,063 393,691,530 39,369,153

During the financial year, the Company increased its issued and paid-up ordinary share capital from RM39,369,153toRM43,306,063bywayofprivateplacementwiththelistingof39,369,100ordinarysharesofRM0.10eachatanissuepriceofRM0.10each.

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

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 interests.

16. SHARE PREMIUM

Share premium comprises the premium paid on subscription of shares in the Company over and above the par value of the shares. The share premium is not distributable by way of dividends and may be utilised in the mannersetoutinSection60(3)oftheCompaniesAct,1965inMalaysia.

During the financial year, the reduction is due to issuance cost in relation to Private Placement.

17. OTHER RESERVES


Warrantreserve (a) 17,125,582 17,125,582 17,125,582 17,125,582 Revaluation reserve (b) 6,614,734 6,768,220 - -

23,740,316 23,893,802 17,125,582 17,125,582



17. OTHER RESERVES (cont’d)

(a) Warrant reserve

On5February2014,theWarrants2014/2019wereissuedforfreepursuanttotheCompany’srenounceablerightsissue.Warrants2014/2019arelistedontheACEMarketofBursaMalaysiaSecuritiesBerhad.

Each new warrant entitles its registered holder, at any time from the date of its issue up to and including 28January2019,tosubscribeforonenewordinaryshareofRM0.10eachintheCompanyatanexercisepriceofRM0.12persharewhichissubjecttoadjustmentsunderthetermssetoutintheDeedPolldated11December2013constitutingtheWarrants2014/2019.

As at the reporting date, 196,845,765 (2015: 196,845,765) warrants remained unexercised.

The warrants reserve is in respect of the allocated fair value of 196,845,765 free warrants issued in conjunctionwithrightsissueduringthefinancialyearended28February2015.Theestimatedfairvalueofthe warrants was calculated by applying the Black-Scholes option pricing model. The assumptions used in the calculation were as follows:

Exerciseprice RM0.12 Theoreticalex-rightsprice RM0.09 Borrowing cost Nil Expected dividend yield Nil Tenure of warrants 5 years from date of issuance of warrants Expected volatility 195%

TheordinarysharesissuedfromtheexercisesofWarrants2014/2019shallrankparipassuinallrespectswith the existing issued ordinary shares of the Company except that they shall not be entitled to any dividends, distributions or rights, the entitlement date of which is prior to the date of the allotment of the newsharesarisingfromtheexerciseofWarrants2014/2019.

(b) Revaluation reserve


At beginning of the financial year 6,768,220 217,500 Realisation of revaluation reserve (153,486) - Revaluation of property, plant and equipment - 6,550,720

At end of the financial year 6,614,734 6,768,220

Revaluation reserve represents the surplus on revaluation of leasehold lands and buildings, net of tax, and are not available for distribution to the shareholders by way of dividends.



18. LOANS AND BORROWINGS

GROUP 2016 2015 Note RM RM

Non-current: Secured Term loan I (a) 2,176,352 763,829 Term loan II (b) 2,523,605 - Finance lease liabilities (c) 3,994,412 2,122,475

8,694,369 2,886,304 Current: Secured Term loan I (a) 166,871 234,951 Term loan II (b) 397,678 - Finance lease liabilities (c) 1,491,370 967,209

2,055,919 1,202,160

Total loans and borrowings 10,750,288 4,088,464 Term loans 5,264,506 998,780 Finance lease liabilities 5,485,782 3,089,684

10,750,288 4,088,464

(a) Term loan I

The term loan I bears interest at a rate of 4.95% (2015: 4.95%) and is repayable over a period of 15 years by180equalmonthlyinstalmentsofRM23,259commencinguponfulldisbursementofthefacilityorthefirst day of the 37th month from the date of first drawdown, whichever is earlier.

The term loan I is secured by: (i) fixed legal charge over the leasehold lands and buildings of the Group (Note 9); and (ii) corporate guarantee by the Company.

(b) Term loan II

The term loan II bears interest at a rate of 4.95% (2015: Nil) and is repayable over a period of 10 years by 120equalmonthlyinstalmentsofRM44,445commencinguponfulldisbursementofthefacilityorthefirstday of the 37th month from the date of first drawdown, whichever is earlier.

The term loan II is secured by: (i) fixed legal charge over the leasehold lands and buildings of the Group (Note 9); and (ii) corporate guarantee by the Company.



18. LOANS AND BORROWINGS (cont’d)

(c) Finance lease liabilities


Gross instalment payments 6,167,958 3,444,814 Less: Future finance charges (682,176) (355,130)

Total present value of finance lease payables 5,485,782 3,089,684 Current Payable within 1 year Gross instalment payments 1,786,996 1,128,191 Less: Future finance charges (295,626) (160,982)

Present value of finance lease payables 1,491,370 967,209 Non-current Payable after 1 year but not later than 2 years Gross instalment payments 1,495,763 924,528 Less: Future finance charges (203,705) (104,077)

Present value of finance lease payables 1,292,058 820,451 Payable after 2 years but not later than 5 years Gross instalment payments 2,817,707 1,392,095 Less: Future finance charges (180,781) (90,071)

Present value of finance lease payables 2,636,926 1,302,024 Payable later than 5 years Gross instalment payments 67,492 - Less: Future finance charges (2,064) -

Present value of finance lease payables 65,428 -

Total present value of finance lease payables 5,485,782 3,089,684

Analysed as:- Payable within 1 year 1,491,370 967,209 Payable after 1 year 3,994,412 2,122,475

5,485,782 3,089,684

The finance lease liabilities of the Group bear effective interest at rates ranging from 4.56% to 6.53% (2015: 4.57% to 6.54%) per annum, and secured by corporate guarantee by the Company.



19. DEFERRED TAX LIABILITIES


At beginning of the financial year 2,179,933 368,600 Recognised in profit or loss (Note 7) (132,135) (326,000) Revaluation surplus - 2,137,333

At end of the financial year 2,047,798 2,179,933

Presented after appropriate offsetting as follows:-


Deferred tax liabilities 4,295,677 3,524,437 Deferred tax assets (2,247,879) (1,344,504)

2,047,798 2,179,933

This is in respect of estimated deferred tax liabilities/(assets) arising from the following temporary differences:


Deferred tax liabilities Taxable temporary differences of property, plant and equipment 2,158,494 1,387,104 Taxable temporary differences in respect of income 48,319 - Surplus arising from revaluation of property, plant and equipment 2,088,864 2,137,333

4,295,677 3,524,437

Deferred tax assets Deductible temporary differences in respect of expenses (5,461) - Unabsorbed capital allowances (812,660) - Unutilised tax losses (485,516) (626,304) Unutilised reinvestment allowances (944,242) (718,200)

(2,247,879) (1,344,504)

The estimated amount of temporary differences for which no deferred tax assets is recognised in the financial statements is as follows:

GROUP COMPANY 2016 2015 2016 2015 RM RM RM RM Unabsorbed capital allowances 12,494 - 12,494 - Unutilised tax losses 455,326 - - -

467,820 - 12,494 -



20. PAYABLES, DEPOSITS AND ACCRUALS GROUP COMPANY 2016 2015 2016 2015 RM RM RM RM

Trade payables 2,189,864 3,232,764 - - Other payables: Third parties 389,975 1,885,641 43,680 5,239 Deposits received 1,062,633 618,633 - - Accruals 385,581 470,501 59,081 51,708

1,838,189 2,974,775 102,761 56,947

4,028,053 6,207,539 102,761 56,947

The foreign currency exposure profile of payables, deposits and accruals of the Group is as follows:-

GROUP 2016 2015 RM RM United States Dollar 32,918 -

(a) Trade Payables

Trade payables are unsecured, interest-free and the normal trade credit terms granted to the Group range from 30 to 90 days (2015: 30 to 90 days).

(b) Other Payables

The other payables owing to third parties mainly consist of sundry payables for operating expenses which are generally due within 14 to 90 days (2015: 14 to 90 days).

21. FINANCIAL INSTRUMENTS

(a) Categories of financial instruments

The following table analyses the financial instruments in the statements of financial position by the classes of financial instruments to which they are assigned:

(i) Available-for-sale financial assets (ii) Loans and receivables(iii) Fair value through profit or loss (iv) Other financial liabilities



21. FINANCIAL INSTRUMENTS (cont’d)

(a) Categories of financial instruments (cont’d)


Financial assets Available-for-sale financial assets - Unquoted shares - 25,000 - 25,000

Loan and receivables - Receivables and deposits, net of prepayments 8,653,647 8,846,934 22,975,159 19,046,530 - Cash and cash equivalents 3,472,429 3,585,689 562,423 577,876

Financial assets at fair value through profit or loss

- Short term fund 10,337 - 10,337 -

12,136,413 12,482,623 23,547,919 19,674,406 Financial liabilities Other financial liabilities Payables, deposits and accruals 4,028,053 6,207,539 102,761 56,947 Finance lease payables 5,485,782 3,089,684 - - Term loans 5,264,506 998,780 - -

14,778,341 10,296,003 102,761 56,947

(b) Financial risk management

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, foreign currency risk and interest rate risk.

The Group’s and the Company’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s and the Company’s businesses whilst minimising the potential adverse impacts of financial risks on its financial position, performance and cash flows. The Group and the Company operates within clearly defined guidelines that are approved by the Board of Directors. It is, and has been throughout the current and previous financial year, the Group’s and Company’s policy that no derivatives shall be undertaken. The Group and the Company do not apply hedge accounting.

TheGroup’sandtheCompany’sexposuretothefinancialrisksandtheobjectives,policiesandprocessesput in place to manage these risks are discussed below.




(b) Financial risk management (cont’d)

(i) Credit risk

Trade and other receivables

Credit risk is the risk of financial loss to the Group and the Company that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. The Group and the Company have a credit policy in place and the exposure to credit risk is managed through the application of credit approvals, credit limits and monitoring procedures.

As at the end of the reporting period, the maximum exposure to credit risk arising from trade and other receivables is represented by their carrying amounts in the statements of financial position.

The carrying amount of trade and other receivables are not secured by any collateral or supported by any other credit enhancements. In determining the recoverability of these receivables, the Group and the Company consider any change in the credit quality of the receivables from the date the credit was initially granted up to the reporting date. The Group and the Company have adopted a policy of dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.

The Group and the Company use ageing analysis to monitor the credit quality of the trade receivables. The ageing of trade receivables as at the end of the financial year is disclosed in Note 13. Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group and the Company. A significant portion of these trade receivables are regular customers thathavebeentransactingwiththeGroupandtheCompany.Managementhastakenreasonablestepsto ensure that trade receivables are stated at their realisable values. Impairment are made on specific receivableswhenthereisobjectiveevidencethattheGroupandtheCompanywillnotbeabletocollectall amounts due.

The Group and the Company monitor the results of the subsidiaries and related companies in determining the recoverability of these intercompany balances.

Credit risk concentration profile Asat29February2016,therewere2(2015:2)majorcustomersthataccountedfor10%ormoreofthe

Group’s total trade receivablesand the totaloutstandingbalancesdue from thesemajorcustomersamountedtoRM3,502,001(2015:RM4,454,481).

Other financial assets

For other financial assets (including other investments and cash and cash equivalents), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties. At the reporting date, the Group’s and the Company’s maximum exposure to credit risk arising from other financial assets is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

Financial guarantees

The Company is exposed to credit risk in relation to financial guarantees given to banks in respect of loans granted to certain subsidiaries. The Company monitors the results of the subsidiaries and their repayment on an on-going basis. The maximum credit risk exposure of these financial guarantees is the total utilisation of the credit facilities granted as disclosed in Note 18 to the financial statements. At the reporting date, there was no indication that any subsidiaries would default on repayment.

The financial guarantees have not been recognised as it is unlikely the subsidiaries will default within the guarantee period.



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(iii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group’s exposure to currency risk arises mainly from transactions entered into by individual entities within the Group in currencies other than their functional currencies. The functional currency within the Group isRinggitMalaysia (“RM”)whereas themajor foreigncurrency transacted isSingaporeDollar(“SGD”)andunitedStatesDollar(“uSD”).

The Group observes the movements in exchange rates and acts accordingly to minimise its exposure to currency risk.

The Group also holds cash and bank balances denominated in foreign currencies for working capital purposes.Attheendofeachreportingperiod,suchforeigncurrencybalancesamountedtoRM1,473,099(2015:RM818,563)fortheGroup.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity analysis of the Group to a reasonably possible change in SGD and USD against the functional currency of the Group, with all other variances held constant:


Effect on (loss)/profit for the financial year and equity

uSD/RM -strengthenedby10%(2015:10%) 25,573 26,119 - weakened by 10% (2015: 10%) (25,573) (26,119) SGD/RM -strengthenedby10%(2015:10%) 280,654 208,553 - weakened by 10% (2015: 10%) (280,654) (208,553)

(iv) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments would fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk relates to interest bearing financial assets and financial liabilities. Interest bearing financial assets includes bank balances with licensed banks and amount owing by subsidiaries. Interest bearing financial liabilities includes finance lease payables and term loans.





(iv) Interest rate risk (cont’d)

The term loansofRM5,264,506 (2015:RM998,780)at floating ratesexpose theGroup tocash flowinterest rate risk whilst finance lease payables of RM5,485,782 (2015: RM3,089,684) at fixed ratesexpose the Group to fair value interest rate risk.

The Group adopts a strategy of mixing fixed and floating rate borrowing to minimise exposure to interest a rate risk. The Group also reviews its debt portfolio to ensure favourable rates are obtained.

Sensitivity analysis for interest rate risk

If the interest rate had been 50 basis point higher/lower and all other variables held constant, the Group’s(loss)/profitnetoftaxwouldincrease/decreasebyRM20,005(2015:RM3,745)asaresultofexposure to floating rate borrowings.

(c) Fair value measurement

The fair value of the following classes of financial assets and liabilities are as follows:

(i) Cash and cash equivalents, receivables and payables

The carrying amounts approximate fair values due to the relatively short term maturity of these financial assets and liabilities.

(ii) Term loans

The carrying amounts of current portion of borrowings are reasonable approximation of fair values due to the insignificant impact of discounting.

The carrying amounts of floating rate term loans approximate fair values as the loans will be re-priced to market interest rate on or near reporting date.

(iii) Finance lease payables

The fair value of finance lease payables is estimated using discounted cash flow analysis, based on current lending rate for similar type of lease arrangement.




(c) Fair value measurement (cont’d)

The carrying amounts of the Group’s and of the Company’s financial assets and liabilities at reporting date approximate their fair values except as follows:

GROUP COMPANY Carrying Fair Carrying Fair Amount Value Amount Value RM RM RM RM

2016 Financial Liabilities Finance lease payables 5,485,782 6,164,539 - -

2015 Financial Assets Unquoted shares 25,000 * 25,000 *

Financial Liabilities Finance lease payables 3,089,684 3,202,911 - -

* Fair value information has not been disclosed for the Group’s and the Company’s investment in unquoted shares that are carried at cost because the fair value cannot be measured reliably. Investments in unquoted shares represent investment in ordinary shares of Legenda Sonata Sdn. Bhd., which are not quoted on any market and do not have any comparable industry peer that can be used.



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22. CAPITAL COMMITMENT


In respect of the factory expansion and refurbishment by a subsidiary of the Group - Approved but not contracted for - 769,594 - Contracted but not provided for 1,070,544 3,213 1,070,544 772,807

23. FINANCIAL GUARANTEES

The Company has entered into financial guarantee contracts to provide financial guarantees to financial institutionsforcreditfacilitiesgrantedtocertainsubsidiariesuptoatotallimitofapproximatelyRM21,140,000(2015: RM9,133,000). The total utilisation of these credit facilities as at 29 February 2016 amounted toapproximatelyRM10,750,000(2015:RM4,088,000).

The aforementioned financial guarantee contracts should have been recognised in the statement of financial position in accordance with the recognition and measurement policies as stated in Note 3.8. After considering that the probability of the subsidiaries defaulting on the credit lines is remote, the financial guarantee contracts have not been recognised as the fair values on initial recognition are not expected to be material.

24. RELATED PARTIES

(a) Identity of related parties

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

The Group and the Company have a related party relationship with its subsidiaries, former subsidiaries, related parties and key management personnel. Related parties refer to companies or enterprise in which certain directors of the Company or persons connected to them have substantial financial interests.

(b) Significant related party transactions

COMPANY 2016 2015 RM RM Received or receivable from subsidiaries -Managementfee 842,095 1,146,915 - Interest income 626,458 383,628



24. RELATED PARTIES (cont’d)

(c) Compensation of key management personnel

Key management personnel include personnel having authority and responsibility for planning, directing and controlling the activities of the entities, directly or indirectly, including any director of the Group or of the Company.

The remuneration of key management personnel are as follows:-


Directors of the Group and the Company - Fees 137,000 132,000 137,000 132,000 - Other emoluments 464,840 560,687 123,240 121,240

Total short-term employee benefits 601,840 692,687 260,240 253,240 Defined contribution plan 66,300 78,735 15,600 15,600

668,140 771,422 275,840 268,840

25. CAPITAL MANAGEMENT

TheprimaryobjectiveoftheGroup’sandtheCompany’scapitalmanagementistoensurethatitmaintainsahealthy capital ratio in order to support its business and maximise shareholders’ value.

TheGroupandtheCompanymanages itscapitalstructureandmakesadjustmentsto it, in lightofchangesineconomicconditions.Tomaintainoradjustcapitalstructure, theGroupandtheCompanymayadjust thedividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made intheobjectives,policiesandprocessesduringthefinancialyearsended29February2016and28February2015.

TheGroupandtheCompanyisnotsubjecttoanyexternallyimposedcapitalrequirements.

The Group and the Company monitors capital using a gearing ratio, which is total external borrowings divided by total equity. The gearing ratio as at 29 February 2016 and 28 February 2015, which are within the Group’s andCompany’sobjectivesofcapitalmanagementareasfollows:-


Total external borrowings 10,750,288 4,088,464 - -

Total equity 42,730,444 41,490,095 26,467,141 22,573,714

Gearing ratio 25% 10% * *

* Not meaningful



26. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On4June2014,TASecuritiesHoldingsBerhad(“TASecurities”),onbehalfoftheCompanyhadannouncedthe Company’s proposal to implement a private placement of up to 59,053,700 new ordinary shares of RM0.10eachintheCompany,representingnotmorethantenpercent (10%)oftheenlargedissuedandpaid-upcapitaloftheCompany(hereinafterreferredtoas“ProposedPrivatePlacement”).

BursaMalaysia Securities Berhad (“BursaMalaysia”) had vide its letter dated 16 April 2015, approvedthe application for the listing of and quotation for up to 59,053,700 new ordinary shares pursuant to the Proposed Private Placement.

On 5 August 2015, the Company completed the Private Placement exercise following the listing and quotationof39,369,100newordinarysharesofRM0.10eachintheCompany.

(b) On10March2015, theCompanyannounced that itswholly-ownedsubsidiary,ATEngineeringSolutionSdn.Bhd.(“ATES”)hassecuredtheFeed-inTariffquotafromSustainableEnergyDevelopmentAuthorityMalaysia(“SEDA”)on9March2015.On17November2015,ATESenteredintoaRenewableEnergyPowerPurchaseAgreementwithTenagaNasionalBerhad(“TNB”)forthesupplyanddeliveryof425kWrenewableenergy from solar photovoltaic plant for a concession period of 21 years. SEDA has set a fixed rate-tariff ofRM0.6977/kWhandadditionalbonusrate-tariffrangingfromRM0.05/kWhtoRM0.1722/kWhatwhichATES can sell electricity to TNB during the concession period.

(c) On 14 July 2015, the Company proposed to establish and implement a share issuance scheme of up to thirty percent (30%) of the Company’s issued and paid-up share capital (excluding any treasury shares) for the eligible Directors and employees of the Company and its non-dormant wholly-owned subsidiaries (“ProposedSIS”).

BursaMalaysiahasvideitsletterdated23July2015(whichwasreceivedon30July2015)approvedtheProposed SIS. On 26 August 2015, the Proposed SIS was approved by the shareholders in the Extraordinary GeneralMeetingandtheeffectivedatefortheimplementationoftheSISis29October2015.

27. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

(a) On2March2016, theCompanyannounced that itswholly-ownedsubsidiary,ATPrecisionToolingSdn.Bhd. (“ATP”)hassecured theFeed-inTariffquota fromSEDAon1March2016 tosupplyanequivalentor less than300kWof renewableenergy.ATP isexpected tosignaRenewableEnergyPowerPurchaseAgreement with TNB for the supply and delivery of renewable energy for a concession period of 21 years. SEDAhassetafixedrate-tariffofRM0.5930/kWhandadditionalbonusrate-tariff rangingfromRM0.05/kWhtoRM0.155/kWhatwhichATPcansellelectricitytoTNBduringtheconcessionperiod.

(b) On24March2016,theCompanyannouncedthatFong’s&ATVentureSdn.Bhd.(“FATV”),a75%-ownedsubsidiary of ATP has entered into a Basic Purchase Agreement (“BPA”) with Fong’s Engineering &Manufacturing Pte. Ltd. (“FEM”) for the manufacture, supply and delivery of high precision machinecomponents suchasaluminiumprofiles tobeused in textilemachines toFEM’scustomers.During thetermoftheBPA,FATVundertakestosupplythemachinecomponentsexclusivelytoFEM’scustomerforaperiodoffiveyearsfromitsfirstdeliverytoFEM.



27. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR (cont’d)

(c) On1April2016,MercurySecuritiesSdnBhd(“MercurySecurities”),onbehalfoftheCompanyannouncedthat the Company proposes to undertake the following:

(i) proposedparvaluereductioninvolvingthecancellationofRM0.07fromtheparvalueofeveryexistingordinaryshareofRM0.10each in the issuedandpaid-upsharecapitalof theCompanypursuant toSection64of theCompaniesAct,1965 (“Act”) (“ProposedParValueReduction”)and theproposedreduction of the Company’s entire share premium account pursuant to Sections 60(2) and 64 of the Act (“ProposedSharePremiumReduction”)(collectively,the“ProposedCapitalReorganisation”);

(ii) proposedrenounceablerightsissueofupto759,824,495newordinarysharesofRM0.03eachinATS(“ATSShares”or“Shares”)(aftertheProposedParValueReduction)(“RightsShares”)togetherwithupto379,912,247freedetachablewarrantsinATS(“WarrantsB”)onthebasisoftwo(2)RightsSharestogetherwithone(1)freeWarrantBforeverytwo(2)existingATSSharesheldbyentitledshareholdersof ATS (“Entitled Shareholders”) on an entitlement date to be determined later (“Entitlement Date”)(“ProposedRightsIssuewithWarrants”);and

(iii) proposedamendmenttotheMemorandumofAssociationoftheCompany(“ProposedAmendment”).

BursaMalaysiahadvideitsletterdated20April2016,approvedthefollowing:

(i) admissiontotheOfficialListandtheinitiallistingandquotationofupto379,912,247WarrantsBtobeissuedpursuanttotheProposedRightsIssuewithWarrants;

(ii) listing of up to 62,365,310 additional Warrants A arising from the adjustments in accordance withtheprovisionsof thedeedpoll forWarrantsApursuant to theProposedRights IssuewithWarrants(“AdditionalWarrantsA”);

(iii) listing of up to 759,824,495 Rights Shares to be issued pursuant to the Proposed Rights Issue with Warrants;

(iv) listingofupto379,912,247newATSSharestobeissuedpursuanttotheexerciseofWarrantsB;and(v) listingofupto62,365,310newATSSharestobeissuedpursuanttotheexerciseofAdditionalWarrants

A.

TheaboveproposalswereapprovedbytheshareholdersinanExtraordinaryGeneralMeetingdated3June2016.



28. SEGMENT INFORMATION

For management purposes, the Group is organised into operating segments based on a similar basis to that for internal reporting. The Group’s chief operation decision maker reviews the decision on resource allocation and assesses the performance of the reportable segment.

(a) Operating segments

The reportable operating segments are as follows:

Fabrication and automation Fabrication of industrial and engineering parts; design and manufacturing of industrial automation systems and machinery.

Others Investment holding and provision of management services, neither which are of a sufficient size to be reported separately.

The accounting policies of operating segments are the same as those described in the summary of significant accounting policies.

Inter-segment transactions are entered in the ordinary course of business based on terms mutually agreed upon by the parties concerned.

Segment assets and liabilities information are neither included in the internal management reports nor provided regularly to the management. Hence, no disclosures are made on segment assets and liabilities.

Reconciliations of reportable segment revenue to the corresponding amounts of the Group are as follows:

2016 2015 RM RM

Revenue

Total revenue for reportable segments 22,073,518 24,544,986 Elimination of inter-segmental revenue (4,679,721) (1,146,915)

Revenue of the Group per consolidated statement of profit or loss and other comprehensive income 17,393,797 23,398,071



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28. SEGMENT INFORMATION (cont’d)

(b) Geographical information

TheGroup’soperations,assetsandliabilitiesareinMalaysiahencenogeographicalsegmentispresented.

Segment revenue based on geographical location of the Group’s customers is as follows:-

2016 2015 RM RM Malaysia 12,967,268 19,542,918 Singapore 4,426,529 3,855,153

17,393,797 23,398,071

(c) Major customer information

For the financial year ended 29 February 2016, therewas 3 (2015: 2)major customer that contributed10%ormoreof theGroup’s total revenueand the total revenuegenerated fromthesemajorcustomersamountedtoRM12,744,494(2015:RM15,286,895).


On25March2010,BursaMalaysiaSecuritiesBerhadissuedadirectivepursuanttoparagraphs2.06and2.23ofBursaMalaysiaSecuritiesBerhadMainMarket ListingRequirements. Thedirective requires all listed issuers todisclose the breakdown of the retained earnings or accumulated losses as at the end of the reporting period, into realised and unrealised profits and losses.

The following analysis of realised and unrealised profits or losses included in the retained earnings of the Group and the Company as at 29 February 2016 and 28 February 2015 is presented in accordance with the directive of Bursa MalaysiaSecuritiesBerhadandpreparedinaccordancewiththeGuidanceonSpecialMatterNo.1,DeterminationofRealisedandunrealisedProfitsorLosses intheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants.


Total accumulated losses of the Company and its subsidiaries: - realised (36,193,048) (33,676,016) (44,732,546) (44,887,808)- unrealised (2,047,798) (2,179,933) - -

(38,240,846) (35,855,949) (44,732,546) (44,887,808)Less:Consolidationadjustments 3,072,335 3,076,401 - -

Total accumulated losses asper statements of financial position (35,168,511) (32,779,548) (44,732,546) (44,887,808)

SuPPleMentarY inForMation on the realiSed and unrealiSed ProFitS or loSSeS


We, the undersigned, being two of the directors of the Company, do hereby state that, in the opinion of thedirectors, the accompanying financial statements as set out on pages 32 to 101 are drawn up in accordance with theMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewofthefinancialpositionsoftheGroupandof the Company as at 29 February 2016 and of their financial performance and cash flows for the financial year then ended.

The supplementary information set out on page 102 has been prepared in accordance with the Guidance on Special MatterNo.1,DeterminationofRealisedandunrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountantsandpresentedbasedontheformatasprescribedbyBursaMalaysiaSecuritiesBerhad.

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

…………………………………….. ……………………………………..MAK SIEW WEI DATO’ IR. AUNIAH BINTI ALIDirector Director

Date: 27 June 2016

StatutorY declarationPurSuant to Section 169(16) oF the coMPanieS act, 1965

I, yONGMANCHAI, being the officer primarily responsible for the financial management of the Company, dosolemnly and sincerely declare that the financial statements as set out on pages 32 to 101 and the supplementary information as set out on page 102 are to the best of my knowledge and belief, 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.

……………………………………..YONG MAN CHAI

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territoryon 27 June 2016

Before me,

……………………………………..ZULKIFLA MOHD DAHLIMNo. W541Commissioner for Oaths

StateMent bY directorSPurSuant to Section 169(15) oF the coMPanieS act, 1965


Report on the Financial Statements

WehaveauditedthefinancialstatementsofATSystematizationBerhad,whichcomprisethestatementsoffinancialposition as at 29 February 2016 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 32 to 101.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of the financial statements so as to give a true and fairview inaccordancewith theMalaysianFinancialReportingStandards, InternationalFinancialReportingStandardsandthe requirementsof theCompaniesAct,1965 inMalaysia.Thedirectorsarealso responsible forsuch internal controls as the directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Ourresponsibility is toexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethical 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 ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the Company’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 Company’s internal controls. 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.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial positions of the Group and of the Company as at 29 February 2016 and of their financial performance and cash flows for the financial year then ended inaccordancewiththeMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.

Report on Other Legal and Regulatory Requirements

InaccordancewiththerequirementsoftheCompaniesAct,1965inMalaysia,wealsoreportthefollowing:-

(a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965 in Malaysia to be kept by the Company and its subsidiaries of which we have acted as auditors have beenproperlykeptinaccordancewiththeprovisionsoftheCompaniesAct,1965inMalaysia.

(b) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancial 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.

(c) Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse commentrequiredtobemadeunderSection174(3)oftheCompaniesAct,1965inMalaysia.

indePendent auditorS’ rePort to the MeMberS oF at SYSteMatiZation berhad (incorPorated in MalaYSia)


Other Reporting Responsibilities

The supplementary information set out on page 82 is disclosed to meet the requirement of Bursa MalaysiaSecurities Berhad and is not part of the financial statements. The directors are responsible for the preparation of thesupplementaryinformationinaccordancewiththeGuidanceonSpecialMatterNo.1,DeterminationofRealisedandunrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,as issuedby theMalaysian InstituteofAccountants (“MIAGuidance”)and thedirectiveofBursaMalaysiaSecuritiesBerhad.Inouropinion,thesupplementaryinformationisprepared,inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the CompaniesAct,1965inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonfor the contents of this report.

Baker Tilly Monteiro Heng Heng Fu JoeNo. AF 0117 No. 2966/11/16(J)Chartered Accountants Chartered Accountant

Kuala Lumpur

Date: 27 June 2016

indePendent auditorS’ rePort to the MeMberS oF at SYSteMatiZation berhad (incorPorated in MalaYSia)(cont’d)


liSt oF landed ProPertieSaS at 27 June 2016

Postal Address/Location of theProperty

Plot 49, Hilir SungaiKeluang 2, TamanPerindustrian,Bayan LepasFasa 4, 11900,Pulau Pinang.(PN2998,Lot 12340,Mukim12,DaerahBarat Daya, PulauPinang)

Plot 82, LintangBayan LepasFasa 4 Taman PerindustrianBayan LepasMk.12,PulauPinang.(H.S(D) No. 16415,P.T.No. 5057,Mukim12,DaerahBarat Daya, PulauPinang)

Description/Existing Use

Thesubjectsiteis erected with:

- a double storeydetached factorycum office block

- a newlyconstructeddouble storeydetached factorycum office block

Thesubjectsiteis erected with:

- a double- storey factoryattached to:

- a 3-storeyoffice block anda double-storeyproductionbuilding

ApproximateAge of Building/Tenure/ Date ofExpiry of Lease

60 Years leaseexpiring on18 October2055

18 Years

1 Year

56 Years leaseexpiring on 22 January 2062

15 Years

10 Year

Land Area/Built-up Area(sq. ft.)

56,166/37,954

109,426/89,845

Net CarryingAmount as at29 February2016

10,092,954

18,093,804

Year ofValuation/Acquisition

28 February 2015(Date of Valuation)

28 February 2015(Date of Valuation)


analYSiS oF ShareholdingS

SHARE CAPITAL AS AT 17 JUNE 2016

AuthorisedCapital : RM100,000,000.00IssuedandPaid-upCapital : RM43,306,063.00ClassofShares : OrdinarySharesofRM0.10eachVoting Rights : One voting right for one ordinary share

DISTRIBUTION OF SHAREHOLDERS AS AT 17 JUNE 2016

Size of Holdings No. of Holders No. of Shares %

Less than 100 9 396 0.00

100 – 1,000 215 172,141 0.04

1,001 – 10,000 544 3,703,700 0.86

10,001 – 100,000 1,657 84,585,477 19.53

100,001 – 21,653,030 637 305,229,816 70.48

21,653,031 and above 1 39,369,100 9.09

Total 3,063 433,060,630 100.00

DIRECTORS’ SHAREHOLDING AS AT 17 JUNE 2016

Name Direct Shareholding % Indirect Shareholding %

Dato’ Nik Ismail Bin Dato’ Nik Yusoff - - - -

Dato’ Ir. Auniah Binti Ali - - - -

Dr. Ch’ng Huck Khoon - - - -

Chang Vun Lung - - - -

MakSiewWei 2,768,500* 0.64 - -

* Held through nominee company

SUBSTANTIAL SHAREHOLDERS AS AT 17 JUNE 2016


Asiabio Capital Sdn. Bhd. 39,369,100 9.09 - -

Asia Bioenergy Technologies Berhad - - 39,369,100* 9.09

* Deemed interest by virtue of its wholly-owned subsidiary’s substantial shareholding in the Company


analYSiS oF ShareholdingS (cont’d)

THIRTY LARGEST SECURITIES HOLDERS AS AT 17 JUNE 2016

No. Name Shareholdings %

1 M&ANominee(Tempatan)SdnBhd

Sanston Financial Group Limited for Asiabio Capital Sdn Bhd 39,369,100 9.09

2 MaybankNominees(Tempatan)SdnBhd

Pledged Securities Account for Tan Chin Seoh 13,100,000 3.02

3 LowMaiKin 7,251,300 1.67

4 MalaccaEquityNominees(Tempatan)SdnBhd

PledgedSecuritiesAccountforWeeKokChuan 5,029,000 1.16

5 Amsec Nominees (Tempatan) Sdn Bhd

AmBank(M)BerhadforCentralKedahPlywoodFactorySendirianBerhad

(8793-1501) 4,208,100 0.97

6 Affin Hwang Nominees (Tempatan) Sdn Bhd

PledgedSecuritiesAccountforTehEngHuat(M01) 4,000,000 0.92

7 Lim Choi Guat 4,000,000 0.92

8 Ooi Eng Guan 4,000,000 0.92

9 NgWeiFong 3,687,800 0.85

10 Lim Kok Hooi 3,600,000 0.83

11 Ren Boon Chin 3,100,000 0.72

12 Ch’ng Eng Seong 3,014,900 0.70

13 Lim Liew Hong 3,000,000 0.69

14 WongPowKeong 2,936,776 0.68

15 Kenanga Nominees (Tempatan) Sdn Bhd

PledgedSecuritiesAccountforMakSiewWei 2,768,500 0.64

16 MalaccaEquityNominees(Tempatan)SdnBhd

Pledged Securities Account for Lai Tze Jin 2,700,000 0.62

17 Public Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Teh Eng Huat (E-TAI) 2,700,000 0.62

18 Tan Ah Lee 2,700,000 0.62

19 Tan Chin Seoh 2,700,000 0.62


Pledged Securities Account for Pau Yu Tiong 2,633,800 0.61


Pledged Securities Account for Baba Hadil Bin Baba Zain 2,540,900 0.59

22 Tan Sew Hong 2,500,000 0.58

23 M&ANominee(Asing)SdnBhd

Exempt an for Sanston Financial Group Limited (Account Client) 2,168,200 0.50

24 Phua Yik Cha 2,150,000 0.50

25 Chan Han Geok 2,124,000 0.49

26 Yip Heng Keong 2,060,000 0.48


PledgedSecuritiesAccountJegaDevanA/LMNadchatiram 2,000,000 0.46

28 Hoo Choon Soon 2,000,000 0.46

29 KhongWooiChuet 2,000,000 0.46

30 RHB Capital Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Ng Kok Seng (CEB) 2,000,000 0.46

TOTAL 138,042,376 31.87


WARRANT AS AT 17 JUNE 2016

Numberofwarrantsissued : 196,845,765Warrants2014/2019ExpiryDateofWarrants : 28January2019ExercisepriceofWarrant : RM0.12WarrantEntitlement : Each warrant entitles the registered holder during the Exercise period to subscribe for one newordinaryshareofRM0.10eachNumber of warrant holders as at 17 June 2016 : 794

DISTRIBUTION OF WARRANT HOLDERS AS AT 17 JUNE 2016

Size of Holdings No. of Holders No. of Shares %

Less than 100 1 57 0

100 – 1,000 24 17,100 0.01

1,001 – 10,000 85 631,100 0.32

10,001 – 100,000 377 22,079,620 11.22

100,001 – 9,842,287 306 164,117,888 83.37

9,842,288 and above 1 10,000,000 5.08

Total 794 196,845,765 100.00

DIRECTORS’ WARRANT HOLDING AS AT 17 JUNE 2016


Dato’ Nik Ismail Bin Dato’ Nik Yusoff - - - -

Dato’ Ir. Auniah Binti Ali - - - -

Dr. Ch’ng Huck Khoon - - - -

Chang Vun Lung - - - -

MakSiewWei - - - -

analYSiS oF Warrant holdingS


ANALySISOFWARRANTHOLDINGS(CONT’D)

THIRTY LARGEST WARRANT HOLDERS AS AT 17 JUNE 2016

No. Name Shareholdings %

1 Tan Chin Seoh 10,000,000 5.08


Pledged Securities Account for Tan Chin Seoh 9,000,000 4.57

3 Lai Tai Loy 4,783,700 2.43

4 Lee Kok Guan 4,770,100 2.42

5 Hoo Choon Soon 4,686,000 2.38


PledgedSecuritiesAccountforLimKokKeng(LIM0738C) 4,000,000 2.03

7 Kamarulzaman Bin Abdul Hamid 3,000,000 1.52

8 AllianceGroup Nominees (Tempatan) Sdn Bhd

Pledged Securities Account for Lee Kok Guan (100317) 2,925,000 1.49

9 Tan Yih-Jia 2,550,000 1.30

10 WongSiewFoon 2,481,700 1.26


Pledged Securities Account for Tan Boon Huat (TAN1456C) 2,232,200 1.13

12 CIMSECNominees(Tempatan)SdnBhd

Pledged Securities Account for Tan Beng Beng (Penang-CL) 2,135,000 1.08

13 Liew Yu Shan 2,000,000 1.02

14 Tan Lee Lee 2,000,000 1.02

15 Khor Hock Yeam 1,954,000 0.99

16 Choo See Kong 1,850,000 0.94

17 Khor Boon Siang 1,700,000 0.86

18 NgWeiFong 1,658,900 0.84

19 TanChoonMui 1,580,400 0.80

20 Khor Yee Hal 1,520,000 0.77

21 Foong Choong Kun 1,500,000 0.76

22 Tan Sze Peng 1,500,000 0.76

23 WongPowKeong 1,468,388 0.75

24 Ng Cheng Cheng 1,460,000 0.74


Pledged Securities Account for Cheah Hoay Lye 1,250,000 0.64

26 Yong Khi Hee 1,220,000 0.62


Pledged Securities Account for Derrick Chin Sze Leong 1,200,000 0.61

28 Kan Yoon Keong 1,100,000 0.56

29 Lim Seng Lai 1,100,000 0.56

30 Tan Chong Hee 1,100,000 0.56

TOTAL 79,725,388 40.49


notice oF tWelFth annual general Meeting

NOTICEISHEREByGIVENthattheTwelfthAnnualGeneralMeetingoftheCompanywillbeheldatLevel4,MenaraLien Hoe, No. 8 Persiaran Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Friday, August 19, 2016 at 10.30 a.m. for the following purposes :

AGENDA

(Please refer to Note A)

Ordinary Resolution 1





1. To receive the Audited Financial Statements for the year ended February 29, 2016 together with the Directors’ and Auditors’ Reports thereon.

2. ToapprovethepaymentofDirectors’FeesfromRM258,000.00uptoRM260,000.00for the financial year ending February 28, 2017 and payment of such Fees to the Directors of the Company.

3. To re-elect the following Directors retiring under the provision of Article 132 of the Articles of Association of the Company, and who, being eligible offer themselves for re-election:-

(i) Dr. Ch’ng Huck Khoon (ii)MakSiewWei 4. Tore-appointMessrs.BakerTillyMonteiroHengasAuditorsoftheCompanyandto

authorize the Board of Directors to fix their remuneration. AS SPECIAL BUSINESS

To consider and, if thought fit, to pass with or without modifications, the following resolution:- 5. Authority To Allot And Issue Shares Pursuant To Section 132D Of The Companies

Act, 1965

“That pursuant to Section 132D of the Companies Act, 1965, the Articles of AssociationoftheCompanyandapprovalsfromBursaMalaysiaSecuritiesBerhad(“Bursa Securities”) and other relevant governmental/regulatory authorities wheresuch authority shall be necessary, the Board of Directors be and is hereby authorized to issue and allot shares in the Company from time to time until the conclusion of thenextAnnualGeneralMeetinganduponsuchtermsandconditionsandforsuchpurposes as the Board of Directors may, in its absolute discretion, deem fit provided that the aggregate number of shares to be issued shall not exceed ten per centum (10%) of the issued share capital (excluding treasury shares) of the Company for the time being, and that the Board of Directors be and is also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the ACEMarketofBursaSecurities.”

6. To transact any other business for which due notice shall have been given in accordance with the Companies Act, 1965.

By Order of the Board

ANGELINA CHEAH GAIK SUAN (MAICSA 7035272)LEE MEI MEI (MAICSA 7062284)Company Secretaries

Date : June 30, 2016Penang


notice oF tWelFth annual general Meeting (CONT’D)

NOTES:

A. This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 and the Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not put forward for voting.

Proxy : A member of the Company entitled to attend and vote at the meeting may appoint more than two (2) proxies to

attend and vote on the same occasion. A proxy appointed may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. If a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

If the appointer is a corporation, the form of proxy must be under its common seal or under the hand of an officer or attorney duly authorized in writing.

WhereaMemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinone(1)SecuritiesAccount(“omnibusaccount”),thereisnolimittothenumberof proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of Central Depositories Act.

TheproxyformmustbedepositedattheregisteredofficeoftheCompanyatSuiteS-21-H,21stFloor,MenaraNortham, 55 Jalan Sultan Ahmad Shah, 10050 Penang, at least forty-eight (48) hours before the time fixed for holdingthemeetingoranyadjournmentthereof.

Explanatory Note On Special Business:

1. Resolution 5

Theproposedresolution,ifpassed,willgrantarenewedgeneralmandate(“RenewedMandate”)andempowerthe Directors of the Company to issue and allot shares up to an amount not exceeding in total 10% (ten per centum) of the issued share capital of the Company from time to time and for such purposes as the Directors considerwouldbeintheinterestoftheCompany.TheRenewedMandatewillprovideflexibilitytotheCompanyfor any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment, working capital and/or acquisitions. In order to avoid any delay and costs involved inconveningageneralmeeting,itisthusappropriatetoseekshareholders’approval.ThisRenewedMandateunlessrevokedorvariedbytheCompanyingeneralmeetingwillexpireatthenextAnnualGeneralMeetingofthe Company.

As at the date of this notice, no new shares in the Company have been issued pursuant to the mandate granted to the Directors at the Eleventh Annual General Meeting held on August 14, 2015 which will lapse at theconclusionoftheTwelfthAnnualGeneralMeeting.

KindlynotethatthedateoftheGeneralMeetingRecordofDepositorsforthepurposeofdeterminingmembers’entitlementtoattend,voteandspeakattheTwelfthAnnualGeneralMeetingshallbeonAugust15,2016.


DETAILS OF INDIVIDUALS WHO ARE STANDING FOR ELECTION AS DIRECTORS (EXCLUDING DIRECTORS STANDING FOR A RE-ELECTION)

Pursuant toRule 8.29(2) of theBursaSecurities ListingRequirements forACEMarket, no individual is seekingelectionasaDirectorattheTwelfthAnnualGeneralMeetingoftheCompany.

StateMent accoMPanYingnotice oF annual general Meeting

Resolution For Against

Signed this day of 2016

Signature of Member (s) Number of Ordinary Shares held

or the Chairman of the Meeting as my/our proxy, to vote in my/our name(s) and on my/our behalf at the Twelfth Annual General Meeting of the Company to be held at Level 4, Menara Lien Hoe, No. 8 Persiaran Tropicana, Tropi-cana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Friday, August 19, 2016 at 10.30 a.m. and at any adjournment thereof.

I/We hereby indicate with an “X” in the spaces provided below on how I/we wish my/our votes to be cast. (Unless otherwise instructed, the proxy may vote as he thinks fit)

Notes:

A member of the Company entitled to attend and vote at the meeting may appoint more than two (2) proxies to attend and vote on the same occasion. A proxy appointed may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. If a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

If the appointer is a corporation, the form of proxy must be under its common seal or under the hand of an officer or attorney duly authorized in writing.

Where a Member of the Company is an exempt authorised nominee 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. An exempt authorised nominee refers to an authorised nominee defined under the Central Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of Central Depositories Act.

The proxy form must be deposited at the registered office of the Company at Suite S-21-H, 21st Floor, Menara Northam, 55 Jalan Sultan Ahmad Shah, 10050 Penang, at least forty-eight (48) hours before the time fixed for holding the meeting or any adjournment thereof.

I/We,

of

being a member/members of the abovenamed Company hereby appoint

of

or failing him/her,

of

1. To approve the payment of Directors’ Fees from RM258,000.00 up to RM260,000.00 for the financial year ending February 28, 2017 and payment of such Fees to the Directors of the Company.

To re-elect the following Directors retiring under the provision of Article 132 of the Articles of Association of the Company, and who, being eligible offer themselves for re-election:-

2. Dr. Ch’ng Huck Khoon 3. Mak Siew Wei

4. To re-appoint Messrs. Baker Tilly Monteiro Heng as Auditors of the Company and to authorize the Board of Directors to fix their remuneration.

To pass the following resolution under Special Business :-5. Ordinary Resolution Authority to issue shares pursuant to Section 132D of the Companies

Act, 1965.

PROXY FORM

AT S Y S T E M A T I Z A T I O N B E R H A D(644800-X)

(Incorporated in Malaysia)

The Company Secretaries

Suite S-21-H, 21st Floor,Menara Northham,

55, Jalan Sultan Ahmad Shah,10050 Penang.

AT Systematization Berhad (644800-X)

Please fold across the line and close

Please fold across the line and close

stamp

Lot 11.2, Level 11, Menara Lien Hoe,No.8, Persiaran Tropicana,Tropicana Golf & Country Resort,47410 Petaling Jaya,Selangor, Malaysia.

Tel: +603 - 787 8330Fax: +603 - 7887 8331Email: [email protected]

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