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Ingenuity Annual Report 2011

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Page 1: Ingenuity Annual Report 2011
Page 2: Ingenuity Annual Report 2011

CONTENT

Page

Corporate Structure 1

Corporate Information 2

Profile of Directors 3 - 7

Chairman’s Statement 8 - 10

Audit Committee Report 11 - 13

Statement Of Corporate Governance 14 - 20

Additional Compliance Information 20 - 22

Statement On Internal Control 23 - 24

Directors’ Report 25 - 28

Statement By Directors / Statutory Declaration 29

Report Of The Auditors 30 - 31

Statements Of Financial Position 32 - 33

Statements Of Comprehensive Income 34

Statements Of Changes In Equity 35

Statements Of Cash Flows 36 - 37

Notes To The Financial Statements 38 - 65

Analysis Of Shareholdings 66 - 68

Analysis Of Warrantholdings 69 - 70

Notice Of Annual General Meeting 71 - 72

Appendix 1 – Proposed Amendments To Articles Of Association 73 - 74

Form Of Proxy 75

Page 3: Ingenuity Annual Report 2011

Ingenuity Solutions BerhadInvestment Holding, Consultancy & Management Services

Austral Diversified Sdn. Bhd. (100%)

Special Projects Development

Ingenuity Microsystems

Sdn. Bhd. (100%)

Enterprise Software

Reliance Computer

CentreSdn. Bhd.

(100%)

HotelManagement

Solutions

Uptown ExcelSdn. Bhd.

(100%)

SystemsIntegration &

Services Business

Hallmark Avenue

Sdn. Bhd.(100%)

IT Distribution Business

Ingenuity CareSdn. Bhd.

(100%)

Extended Warranty Services

CONTENT

Page

Corporate Structure 1

Corporate Information 2

Profile of Directors 3 - 7

Chairman’s Statement 8 - 10

Audit Committee Report 11 - 13

Statement Of Corporate Governance 14 - 20

Additional Compliance Information 20 - 22

Statement On Internal Control 23 - 24

Directors’ Report 25 - 28

Statement By Directors / Statutory Declaration 29

Report Of The Auditors 30 - 31

Statements Of Financial Position 32 - 33

Statements Of Comprehensive Income 34

Statements Of Changes In Equity 35

Statements Of Cash Flows 36 - 37

Notes To The Financial Statements 38 - 65

Analysis Of Shareholdings 66 - 68

Analysis Of Warrantholdings 69 - 70

Notice Of Annual General Meeting 71 - 72

Appendix 1 – Proposed Amendments To Articles Of Association 73 - 74

Form Of Proxy 75

01

CORPORATE STRUCTURE

Ingenuity Solutions BerhadAnnual Report 2011

Page 4: Ingenuity Annual Report 2011

Ingenuity Solutions BerhadAnnual Report 2011

CORPORATE INFORMATION

AUDIT COMMITTEENg Kok Hok (Chairman)Abdul Rahman bin Shakor (Member)Tham Kah Yong (Member)

REMUNERATION COMMITTEEAbdul Rahman bin Shakor (Chairman)Ahmad Ruslan Zahari Dato’ Dr. Zakaria (Member) Ng Kok Hok (Member)Tham Kah Yong (Member) NOMINATION COMMITTEE Abdul Rahman bin Shakor (Chairman)Ng Kok Hok (Member)Tham Kah Yong (Member)

LEGAL COUNSELCheang & Ariff39 Court @ Loke Mansion273A Jalan Medan Tuanku50300 Kuala Lumpur , MalaysiaTel: + (603) 26910803Fax: + (603) 26934475E-mail : [email protected] : www.cheangariff.com

SECRETARYLim Seck Wah (f) (MAICSA 0799845)

STOCK EXCHANGE LISTING Bursa Malaysia Securities Berhad- ACE MarketStock name : INGENS Stock code : 0034

BANKERRHB Bank Berhad (6171-M) Malayan Banking Berhad (3813-K)Hong Leong Bank Berhad (97141-X)

AUDITORSSJ Grant Thornton (AF:0737)(Member of Grant Thornton International)Chartered AccountantsLevel 11, Bangunan Faber Imperial CourtJalan Sultan Ismail, 50250 Kuala LumpurTel: + (603) 2692 4022Fax: + (603) 2732 5119E-mail : [email protected] : www.gt.com.my

PRINCIPAL PLACE OF BUSINESSTower M, Warisan Cityview 18-8, 8th Floor, Jalan Cheras56100 Kuala LumpurTel: +(603) 9282 3517 Fax: +(603) 9282 9517 E-mail : [email protected] : www.ingenuity.com.my

REGISTERED OFFICE AND SHARE REGISTRARMega Corporate Services Sdn. Bhd. (187984-H)Level 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail, 50250 Kuala LumpurTel: + (603) 2692 4271Fax: + (603) 2732 5388E-mail : [email protected] : www.megacorp.com.my

02

BOARD OF DIRECTORSDato’ Feroz bin A S Moidunny (appointed on 25.3.2011) Chairman, Non-Independent Non-ExecutiveAhmad Ruslan Zahari Dato’ Dr. Zakaria (appointed on 14.1.2011) Chief Executive Officer / Executive DirectorWong Hun Liang Executive DirectorNg Kok Hok (appointed on 1.12.2010) Independent Non-Executive DirectorAbdul Rahman bin Shakor (appointed on 17.12.2010) Independent Non-Executive DirectorTham Kah Yong (appointed on 15.4.2011) Independent Non-Executive DirectorTan Sin Chong Non-Independent Non-Executive DirectorShaliza binti Sabtu (appointed on 1.10.2010) Non-Independent Non-Executive DirectorChong Set Fui(f) (resigned on 31.5.2011) Non-Independent Non-Executive DirectorYee Wai Meng (appointed on 24.2.2011, resigned on 29.3.2011) Executive DirectorDato’ Sri Dr. Shafiq Sit Abdullah (resigned on 7.3.2011) Chairman, Non-Independent Non-ExecutivePoh Hou Liang (resigned on 10.2.2011) Executive DirectorTan Kuen Wei (resigned on 17.1.2011) Independent Non-Executive DirectorGan Leng Swee (resigned on 4.1.2011) Independent Non-Executive DirectorIr. Azman Ahmad (resigned on 24.11.2010) Non-Independent Non-Executive Director

Page 5: Ingenuity Annual Report 2011

Ingenuity Solutions BerhadAnnual Report 2011

BOARD OF DIRECTORS

03

BA

A

E

B

F

C

G

FE

C

G

D

H

DATO’ FEROZ BIN A S MOIDUNNYChairman, Non-Independent Non-Executive

ABDUL RAHMAN BIN SHAKORIndependent Non-Executive Director

AHMAD RUSLAN ZAHARI DATO’ DR. ZAKARIAChief Executive Officer

THAM KAH YONGIndependent Non-Executive Director

WONG HUN LIANGExecutive Director

TAN SIN CHONGNon-Independent Non-Executive Director

D

H

NG KOK HOKIndependent Non-Executive Director

SHALIZA BINTI SABTUNon-Independent Non-Executive Director

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Ingenuity Solutions BerhadAnnual Report 201104

DIRECTORS’ PROFILE

DATO’ FEROZ BIN A S MOIDUNNYChairman, Non-Independent Non-Executive

Dato’ Feroz bin A S Moidunny, a Malaysian aged 44, was appointed as Non-Independent and Non-Executive Director of Ingenuity Solutions Berhad on 25 March 2011. Subsequently, he was re-designated as Chairman on 29 March 2011.

He obtained his Bachelor Degree in Law with Honours from the Nottingham Trent University, United Kingdom. He completed his Bar examination at University Malaya in 1992. Dato’ Feroz was admitted to the Bar in 1993.

Dato’ Feroz is the Managing Partner of Messrs. Feroz & Co. He has over 19 years of experience as a corporate lawyer. He also acts as business development adviser where he is highly regarded for his specialized expertise in providing solutions in complicated corporate and commercial issues. He presently sits as director in companies related to oil and gas sector, aviation, satellite services, manufacturing vehicles for army, hospitals and fire department, infrastructure and technology providers in commercial and educational sectors; television production, recording and entertainment industry and solid waste management. He also has vast experience in international agreements and has successfully assisted in listing companies onto the AIM London Stock Exchange.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.

AHMAD RUSLAN ZAHARI DATO’ DR. ZAKARIAChief Executive OfficerExecutive DirectorMember of Remuneration Committee

Aged 50, a Malaysian, was appointed to the Board on 14 January 2011 as an Independent and Non-Executive Direc-tor. On 17 March 2011, he was re-designated as Chairman. Subsequently, he was re-designated as Chief Executive Officer on 29 March 2011. He is also a member of the Remuneration Committee.

He graduated in 1984 with Bachelor of Arts in Economic Studies (Accounting & Financial Analysis) from the University of Newcastle-upon-Tyne, England. He was trained as a Chartered Accountant by a firm in London after graduation, whereupon in 1986 he joined Merchants Business Growth Consulting, a pan European marketing consulting company, as its Group Financial Controller. In 1993, he left Europe and joined what is now CIMB Investment Bank Berhad in the Corporate Finance Department. In 1997, he assisted in the formation of Commerce Asset Ventures, the venture capital arm of CIMB Group. In 2000, he joined Clear Channel Communications, Inc., the leading global media organisation listed on the New York Stock Exchange as ASEAN Regional Director/Managing Director of the Malaysian operations.

In 2005, he was appointed Chief Executive Officer of Terengganu Incorporated, a strategic investment holding company for the State. In 2008, he joined, as CEO, Armstrong Marine & Offshore Sdn. Bhd., the official representatives of Armstrong Corporation Holdings in Asia and the Pacific Rim, a company involved in offshore and shipping investments, oil trading, finance and project development. Since 2010, he is the CEO of Sungai Temau Mining (M) Sdn. Bhd., an iron ore mining company.

Currently, he is an Independent Non-Executive Director of CWorks Systems Berhad, a company listed on the ACE Market of the Kuala Lumpur Stock Exchange. He is also a director of several private limited companies.

He has no family relationship with other directors or substantial shareholders of the Company, and has not been convicted of any offences with the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.

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Ingenuity Solutions BerhadAnnual Report 2011 05

DIRECTORS’ PROFILE (CONT’D)

WONG HUN LIANGExecutive Director

Wong Hun Liang, a Malaysian aged 45, was appointed to the Board of Directors on 21 October 2003 and resumed the position of Chief Executive Officer of Ingenuity Solutions Berhad on 23 July 2010. Subsequently, he was re-designated as Executive Director on 29 March 2011.

He obtained his Bachelor of Engineering Degree in Electronics and Computer Engineering from the Universiti Putra Malaysia in 1991.

He has 21 years of experience in software engineering, ICT project management, consulting, development and training. Before joining Ingenuity Solutions Berhad, he was with NCR Malaysia and AC Nielsen, where he was leading a technical team in developing software solution for work process improvements, market research and CRM operations for the Asia-Pacific region. He was also appointed as the Software Quality Assurance Auditor for ISO 9001 for the company. His passion for software engineering and development led him to the Asia-Pacific Institute of Information Technology (APIIT), a leading Malaysian Institute of higher learning for ICT, where he became a Specialist Trainer and Senior Lecturer on software engineering, operating systems, networking, and database management systems. He has also certified as Microsoft Trainer and Systems Engineer for Internet and involve in the planning and training for Malaysia Government Smart School project.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have nay conflict of interest with the Company.

NG KOK HOKIndependent Non-Executive DirectorChairman of Audit CommitteeMember of Remuneration CommitteeMember of Nomination Committee

Ng Kok Hok, a Malaysian aged 50, was appointed as an Independent and Non-Executive Director of Ingenuity Solutions Berhad on 1 December 2010.

He is a Chartered Accountant (MIA No. CA 6226) with the Malaysian Institute of Accountants, an Associate Member of the Chartered Institute of Management Accountants and a Member of the Financial Planning Association of Malaysia.

He held the position of an Accountant in several private limited companies involved in telecommunications and manufacturing of industrial plastic containers and the trading of industrial chemicals. He has also served as an Accountant and was later promoted to the position of Financial Controller for Public Mutual Berhad ( f.k.a. Kuala Lumpur Mutual Fund Berhad). He then joined as General Manager and subsequently progressed to Chief Executive Officer of TA Unit Trust Management Berhad. Thereafter he was involved in several businesses which included international trade, e-commerce and travel agencies.

He is currently a businessman running an engineering company he founded. He also sits on the board of Tejari Technologies Berhad and AIC Corporation Berhad as an Independent Non-Executive Director.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.

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Ingenuity Solutions BerhadAnnual Report 2011

DIRECTORS’ PROFILE (CONT’D)

ABDUL RAHMAN BIN SHAKORIndependent Non-Executive DirectorChairman of Remuneration CommitteeChairman of Nomination CommitteeMember of Audit Committee

Abdul Rahman bin Shakor, a Malaysian aged 57, was appointed as an Independent Non-Executive Director of Ingenuity Solutions Berhad on 17 December 2010.

He graduated from Indonesian Flying Academy, Curug, Indonesia in 1975 and Institute of Marketing in 1979 major in marketing.

He is the co-founder of Scope Tel Sdn. Bhd. with his wife, Puan Azian Mohd Yusof. He has vast experience in commodity trading, which was gained after several years of working as a Marketing Manager in Phibro (M) Sdn. Bhd. He subsequently was appointed to open a trading branch for Gill and Duffus, UK as its commodity trading arm in Malaysia and Asia Pacific. Equipped with his trading experience, he set up a new company known as Megindah Sdn. Bhd. and it was here that he penetrated into the global market such as Iran, Australia, Taiwan, China, Korea and Hong Kong. As President of Scope Tel Sdn. Bhd. he led the way for the company to make its entry into the telecommunication industry, in particular, satellite communication. He successfully brought about changes in the company and provided VSAT services to local and multinational companies. Under his guidance and leadership, Scope Tel Sdn. Bhd. has received tremendous growth and recognition in the industry.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.

THAM KAH YONGIndependent Non-Executive DirectorMember of Audit CommitteeMember of Remuneration CommitteeMember of Nomination Committee

Tham Kah Yong, a Malaysian aged 56, was appointed as an Independent Non-Executive Director of Ingenuity Solutions Berhad on 15 April 2011.

He obtained a Bachelor of Economics from the University of Malaya in 1979 majoring in business administration.

He joined a foreign bank as credit officer for four and a half years before taking up another appointment with a leading local bank in 1983. He retired in May 2010 after thirty one years of impeccable banking career serving in various capacities. He has wide experiences in branch banking, credit evaluation, marketing, trade finance and credit administration.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.

06

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Ingenuity Solutions BerhadAnnual Report 2011

DIRECTORS’ PROFILE (CONT’D)

TAN SIN CHONGNon-Independent Non-Executive Director

Tan Sin Chong, a Malaysian aged 53, was appointed as a Non-Independent Non-Executive Director of Ingenuity Solutions Berhad on 15 March 2007.

He obtained a Bachelor of Arts (Hon) from University of Science, Malaysia in 1982. He has over 20 years of experience in international marketing of travel, tourism and hospitality services and products. He is currently a council of the Malaysia-Singapore Business Council and chairs the council’s Tourism Committee. He also serves as an international member of the World Travel & Tourism Council Strategic Committee for e-commerce. Mr. Tan is also an associate member of the Harvard Business School Alumni, Malaysia.

He is a Director of Reliance Computer Centre Sdn. Bhd. (RCC), a wholly-owned subsidiary of Ingenuity Solutions Bhd, where he plays an active role in the strategic planning and management of RCC’s business. Mr. Tan is also a Director of Reliance Pacific Berhad.

He has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years and do not have any conflict of interest with the Company.

SHALIZA BINTI SABTUNon-Independent Non-Executive Director

Shaliza binti Sabtu, a Malaysian aged 46, was appointed as a Non-Independent Non-Executive Director of Ingenuity Solutions Berhad on 1 October 2010.

She obtained a Bachelor of Science in Electronics Engineering from Saitama University, Japan in 1989 and an MBA in Entrepreneurship from University of Bath, United Kingdom in 1996.

She is currently the Chief Operating Officer of Technology Park Malaysia College Sdn. Bhd. (TPM College) since 2007. She joined Technology Park Malaysia Sdn Bhd (TPM) in 1997 as Venture Capital Manager. She was then put in charge as the Head of Finance-cum-Head of School of Business at TPM College from April 2000 to November 2003. She was the Head of Finance and Administration Department following her promotion as Senior Manager in 2004 and to General Manager in 2006. Prior to joining TPM, she was Senior Investment Analyst at Permodalan Nasional Berhad, which she joined as Investment Analyst in 1991 and was a production engineer with Sankyo Seiki (M) Sdn. Bhd. from 1989 to 1991.

She has no family relationship with the other directors or substantial shareholders of the Company; and has not been convicted of any offences within the past 10 years other than traffic offences (if any) and do not have any conflict of interest with the Company.

07

Page 10: Ingenuity Annual Report 2011

Ingenuity Solutions BerhadAnnual Report 2011

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the Annual Report and the Financial Statements of Ingenuity Solutions Berhad (“Ingenuity”) for the financial year ended 31 March 2011.

Financial PerformanceFor the financial year ended 31 March 2011, the Ingenuity Group (‘the Group”) posted total revenue of RM6.2 million contributed entirely by its Malaysian operations. This represents an improvement of 16.35% as compared to the preceding year which can be attributed to more awareness and demand in the Malaysian public sector market while the general market demand is still recovering.

As a result of this and continued vigilance on costs practised by the Group, the Group managed to reduce the loss before taxation from RM3.4 million registered in the preceding year to RM1.4 million recorded for the financial year ended 31 March 2011, an extremely encouraging 58.68% improvement amidst increasing amortisation costs.

Business DevelopmentThe Group had endured more than a year of downsizing and or rightsizing underperforming and unprofitable business divisions. We believe we have identified our most appropriate business strategy moving forwards. Of late, we are actualising the decisions made by creating conducive structural support for the Group to evolve accordingly, thus the numerous corporate exercises detailed below.

Amongst the various business proposals made, one of the significant transactions was where a Collaboration Agreement executed on 5 May 2011 between Austral Diversified Sdn. Bhd.; a wholly owned subsidiary company of Ingenuity Microsystems Sdn. Bhd., which had been identified specifically to undertake Enterprise Software & Projects; and Advance Healthcare Information Systems Sdn. Bhd. and Advance Health Care Solutions AG to jointly collaborate in proposing to the Malaysian Ministry of Health on the initiative to implement an Integrated Hospital Information System.

The objective of the initiative is to implement a common hospital information platform for all hospitals and clinics which shall enable hospitals and clinics to operate with improved efficiency and the creation of centralised lifetime health record for Malaysian citizens. As at to-date, the proposal and discussions are still on-going.

CHAIRMAN’S STATEMENT

08

DATO’ FEROZ BIN A S MOIDUNNYChairman of the BoardNon Independent Non-Executive

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Ingenuity Solutions BerhadAnnual Report 2011

DividendNo dividend was declared for the financial year ended 31 March 2011.

Corporate DevelopmentDuring and after the financial year, Ingenuity undertook significant corporate exercises in comparison to previous periods. The following summarises, chronologically, said activities.

On 11 March 2011, Ingenuity issued and privately placed 13,235,200 new ordinary shares of RM0.10 each for working capital purposes.

On 29 March 2011, Ingenuity acquired two (2) ordinary shares of RM1.00 each representing 100% equity interest in Uptown Excel Sdn. Bhd. for a total consideration of RM2.00.

On 1 April 2011, Ingenuity Microsystems Sdn. Bhd., a wholly-owned subsidiary of Ingenuity, acquired two (2) ordinary shares of RM1.00 each representing 100% equity interest in Austral Diversified Sdn. Bhd. for a total consideration of RM2.00.

On 8 April 2011, Ingenuity acquired two (2) ordinary shares of RM1.00 each representing 100% equity interest in Hallmark Avenue Sdn. Bhd. for a total consideration of RM2.00.

On 6 May 2011, Ingenuity incorporated a wholly-owned subsidiary company, Ingenuity Care Sdn. Bhd. under the Companies Act, 1965.

On 6 June 2011, at an Extraordinary General Meeting of Ingenuity, shareholders voted and approved:-● The issuance of renounceable rights issue of up to 291,175,040 new ordinary shares of RM0.10 each (“Rights

Shares”) on the basis of two (2) Rights Shares for every one (1) existing ordinary share of RM0.10 each together with up to 218,381,280 free detachable warrants on the basis of three (3) warrants for every four (4) Rights Shares subscribed. This Rights Issue exercise was completed on 22 July 2011.

● The establishment of an employees’ share of option scheme (“ESOS”) for eligible employees and directors of Ingenuity Group. To date, the ESOS scheme has yet to be implemented.

● The increase of the authorised share capital of Ingenuity from RM25,000,000 comprising 250,000,000 ordinary shares of RM0.10 each to RM100,000,000 comprising 1,000,000,000 ordinary shares of RM0.10 each.

● Amendments to the Memorandum and Articles of Association to reflect the increase in the authorised share capital.

On 22 July 2011, Ingenuity terminated the Memorandum of Understanding executed earlier on 12 May 2011 with Ingens Network Sdn. Bhd. (formerly known as RCG Network Sdn. Bhd.). On 22 July 2011, Ingenuity entered into a Heads of Agreement for the proposed acquisition of 100 ordinary shares of RM1.00 each in Vistavision Resources Sdn. Bhd. for an indicative purchase consideration of RM15,452,000 to be satisfied via the issuance of 154,520,000 new ordinary shares of RM0.10 each.

ProspectsThe Board foresees the Malaysian information and communications technology (“ICT”) industry will still be vibrant and growing in the coming years. The information technology market is boosted by ICT-friendly budget measures and growing interest in ICT especially in the area such as cloud computing. The Board believes the National Broadband Initiative has the potential to boost demand across all information technology market segments in Malaysia.

CHAIRMAN’S STATEMENT (CONT’D)

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Ingenuity Solutions BerhadAnnual Report 2011

CHAIRMAN’S STATEMENT (CONT’D)

As Malaysia is progressing into more wide-spread ICT adoption, electronic business applications such as Enterprise Resource Planning, Accounting and Customer Management Solutions are finding increasing popularity in the business market as enterprises look into enhanced productivity through automation of business operations. The Board acknowledges that the software-as-a-service achieved double-digit regional growth in Malaysia in the past couple of years and is still at an early-stage market which provides plenty of opportunities for Ingenuity to maximise.

In line with the direction of market growth, Ingenuity will focus and expand on the three (3) core business areas:-business software solution;•information technology hardware and software distribution business; and•system integration and services business.•

Board ChangesAs the new Chairman of Board of Directors, I welcome fellow new members, Ms. Shaliza Sabtu as Non-Independent Non-Executive Director, Mr. Ng Kok Hok as Independent Non-Executive Director, Mr. Abdul Rahman Shakor as Independent Non-Executive Director, Mr. Ahmad Ruslan Zahari Dato’ Dr. Zakaria initially as Independent Non-Executive Director, re-designated as Independent Non-Executive Chairman and re-designated again as Chief Executive Officer and Executive Director and Mr. Tham Kah Yong, as Independent Non-Executive Director.

The Board would like to record its appreciation to its previous members, who have served Ingenuity in various capacities, Mr. Azman Ahmad, Mr. Gan Leng Swee, Mr. Tan Kuen Wei, Mr. Poh Hou Liang, Dato’ Sri Dr. Shafiq Sit Abdullah, Mr. Yee Wai Meng and Ms. Chong Set Fui.

AppreciationOn behalf of the Board of Directors, I would like to introduce Mr. Ahmad Ruslan Zahari Dato’ Dr. Zakaria as the newly appointed Chief Executive Officer and Executive Director of Ingenuity taking the place of Mr. Wong Hun Liang, a co-founder director and whom remains as Executive Director of Ingenuity.

Further on behalf of the Board, I would like to acknowledge and thank our Management team and all our personnel for their dedication, loyalty and hard work the resultant of which is as reflected in our improved financial performance.

I would also like to thank my fellow Board Members for their prudence, wisdom and encouragement as together we guide and assist the Management and the Group’s talents towards a more prosperous future.

Our sincere gratitude is dedicated also to all of our shareholders, customers, business associates, vendors, bankers and regulatory authorities for their continuous support and trust in Ingenuity Solutions Berhad.

Yours truly,

DATO’ FEROZ BIN A S MOIDUNNYChairman of the BoardNon Independent Non-Executive

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Ingenuity Solutions BerhadAnnual Report 2011

AUDIT COMMITTEE REPORT

The Audit Committee was established to fulfill the principles of accountability, integrity and good corporate governance in assisting the Board independently in discharging its responsibilities of reviewing and monitoring the Group’s financial process, audit process, statutory and regulatory compliance, code of business conduct, and other matters that the Board or the relevant authorities may specially delegate to the Audit Committee.

The Audit Committee Report spells out the Audit Committee composition, terms of reference, summary of activities and/or any material findings that may have affected the Group’ performance, controls and operations during the year in review.

MEMBERSHIP & COMPOSITIONThe Audit Committee members are appointed by the Board from amongst the Board members. The Chairman of the Audit Committee shall be elected from among its members who shall be an Independent Director. Alternate directors shall not be members of the Audit Committee.

In accordance with Rule 15.09 of the Ace Market Listing Requirement, the Audit Committee shall consist of a minimum of three (3) members, all of whom must be non-executive directors, with majority of them being independent directors and at least one (1) member of the Committee fulfilling the following conditions:-

(a) Must be a member of the Malaysian Institute of Accountants; or (b) If he is not a member of the Malaysian Institute of Accountant, he must have at least three (3) years working

experience, and(i) Must have passed the examination specified in Part I of the 1st Schedule of the Accountants Act 1967;

or(ii) He must be a member of one of the associations of accountants specified in Part II of the 1st Schedule

of the Accountants Act 1967; or(c) Fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad

The current composition of Audit Committee is as follow:-Chairman - Ng Kok Hok (Independent Non-Executive Director)Members - Abdul Rahman bin Shakor (Independent Non-Executive Director) - Tham Kah Yong (Independent Non-Executive Director)

TERMS OF REFERENCEThe terms of reference of the Audit Committee is authorised by the Board and is intended to assist the Board independently in further fulfilling the Board’s duties and responsibilities which includes reviewing, monitoring and highlighting the Group’s financial reporting process, audit process, statutory and regulatory compliance and code of business conduct.

The Audit Committee functions independently within its charter from other directors and office of the Group or the Company and may regulate its own procedures including the calling of meetings, notices to be given of such meetings, voting and its proceedings, keeping of minutes, production and inspection of such minutes.

In implementing or carrying out its term of reference and duties, management, internal auditors and officers of the Company are required to give full co-operation in providing information and resources to the Audit Committee as and when required.

The Audit Committee’s terms of reference are as follows:(a) To review the Group’s quarterly and yearly statement of financial position, statement of comprehensive income,

statement of cash flow and notes to the financial report.(b) To review and make necessary recommendations on the Group’s quarterly management announcements to

ensure adherence to the approved accounting standards, accounting policy, listing and other requirements.

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Ingenuity Solutions BerhadAnnual Report 2011

AUDIT COMMITTEE REPORT (CONT’D)

(c) To ensure compliance to existing and new accounting standards as well as highlighting significant issues and any accounting judgments to the Board.

(d) To review the consistency and compliance of the Group and its subsidiaries overall accounting policies and regulatory reporting process.

(e) To evaluate and assess the adequacy and integrity of the Group’s processes in relation to the overall audit process and internal control environment during the year.

(f) To highlight significant capital commitments, contingent liabilities any litigations against or taken by the Group.(g) To review all related party transactions to ensure the transactions are conducted on normal commercial terms

within the Company or the Group.(h) To review with the external auditors the audit work plan for the annual audit and review the work scope and

results of the audit procedures.(i) To nominate a person or persons as external and internal auditors.(j) To review with the external and internal auditors, the evaluation of the system of internal controls, the audit

process and audit reports.(k) To ensure there is an adequate control system on check and balance.(l) To verify the allocation of options to the eligible employees pursuant to the Company’s Share Option Scheme (if

any) during the financial year.(m) To carry out any other duties and rights assigned by the Board within its charter or as per Bursa Malaysia Listing

Requirements.(n) To call and convene meetings with external auditors, internal auditors and officers of the Company as and when

required.(o) To review, highlight and recommend solutions to the Board and Management on material internal control and

internal audit matters highlighted by internal auditors.

MEETINGS AND SUMMARY OF ACTIVITIESThe committee is scheduled to meet at least four (4) times in each financial year with at least two (2) members present and the Company Secretary as the secretary of the Committee. The Committee may invite designated directors, the Chief Executive Officer, key senior management and the auditors (internal and external) to be present during the Audit Committee meetings. The minutes of each Audit Committee meeting will be circulated to all Board members at the subsequent Board meeting.

During the financial year, there were five (5) Audit Committee meetings held and were duly attended by the members as shown below:

Audit Committee members AttendanceNg Kok Hok (appointed on 1.12.2010) 1/1Abdul Rahman bin Shakor (appointed on 17.12.2010) 0/1Tham Kah Yong (appointed on 15.4.2011) N/AAhmad Ruslan Zahari Dato’ Dr. Zakaria (relinquished on 29.3.2011) 1/1Poh Hou Liang (relinquished on 9.7.2010) 1/1Tan Kuen Wei (resigned on 17.1.2011) 4/4Gan Leng Swee (resigned on 4.1.2011) 4/4

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Ingenuity Solutions BerhadAnnual Report 2011

AUDIT COMMITTEE REPORT (CONT’D)

Activities carried out by the Audit Committee during the financial year ended 31 March 2011 include the following:● Review the quarterly and year end unaudited financial results and make necessary recommendations to the

Board prior release to the relevant authorities and public on:- Compliance with existing and new accounting standards, policies and practices.- Highlight any significant adjustments or usual events.- Compliance with Listing Requirements of Bursa Malaysia Securities Berhad, Companies Act 1965 and

other regulatory requirements. ● Review the external auditors’ year end report on the statutory financial statements of Group’s statements of

financial position and statements of comprehensive income and its subsidiaries, and thereafter recommend to the Board of Directors for their consideration.

● Ensure managements’ compliance and adherence to laws, regulations, established policies, plans and guidelines on operational and reporting procedures.

● Review management letter and/or material findings highlighted by the external and internal auditors in relation to the audit program and major accounting issues that may have arisen during the course of the statutory and internal audit, to ensure that management has taken all necessary, acceptable and reasonable steps to address the findings.

● 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.

● Review the internal audit scope of work and its finding at every quarter, and to highlight to the Board on any material findings.

● Review when necessary any special assignments approved by the Board that were undertaken by Management, which includes staff reorganisation, accounting policy and credit control.

The Board is responsible for the fair presentation of the financial statements in accordance with the Financial Reporting Standards and the Malaysian Companies Act, 1965. As the Non-Executive Directors are not involved in the operations of the Company, it will need to rely on the information provided, and the information must be fair, reliable and as accurate as possible. The establishment of the internal Audit Function provides the Directors and the Audit Committee with an independent assessment and appraisal/review of the effectiveness and reliability of the Group’s internal controls and information system.

The internal audit function includes the review, assessment and provision of reasonable assurance that the Group’s internal control are functioning as planned and able to highlight all material deviation or findings to the Audit Committee immediately. To maintain impartiality and independence, the internal auditors report directly to the Audit Committee on the overall assessment of the Group’s internal control mechanism. To further discharge its duties and responsibilities effectively, the internal auditors can obtain the assistance of the group’s senior management and staff in providing all the necessary information as and when required.

The Group’s internal audit was carried out by a professional and independent advisory firm appointed by the Board with the recommendation of the Audit Committee. The cost incurred for the internal audit function for the year ended 31 March 2011 amount to RM 23,100.00.

During the financial year, there were no material deviation or weakness in the internal control system that were highlighted by the Group’s internal or external auditors; and the internal control mechanism/ process has provided sufficient assurance and obtained a reliable and fair appraisal of the Group’s internal control mechanism.

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A Statement of Corporate Governance in essence highlights the Group and Company’s commitment towards adopting, upholding and complying with the best practices of Corporate Governance pursuant to Part 1 and 2 of the Malaysian Code of corporate Governance (the “Code”).

The Board of Directors (“the Board”) of Ingenuity Solutions Berhad affirms its commitment in adopting and maintaining a high standard of accountability, responsibility and transparency in the Group’s daily business operations and affairs. This committee ensures that the best practices and principles set out in Parts 1 and 2 of the Code are adhered to, whether possible, towards building and enhancing long term shareholders’ relationship and values.

To this end, the Board is pleased to disclose below the manner in which it has applied the principles of good governance and the extend of the Group and Company’s compliance as set out in Parts 1 and 2 of the Code thought the financial year.

A. BOARD OF DIRECTORSAs in any organisation, the Board of Directors is at all the pinnacle of that organisation’s hierarchy structure. Members of the Board with the relevant experience and expertise are entrusted with the Group’s stewardship, strategic business direction and vigilance over the business operations and control. While the Board is not involved in the day-to-day affairs and operations of the Group, it discharges its duties and responsibilities mainly by concentrating its decision making process on vital business strategies, key investments, financial performance analysis and the Group’s compliance towards regulatory frameworks. the profile of each Director is presented in the Director’ Profile in this Annual Report.

(i) Composition The Board is currently made up eight (8) members, comprising the Non-Independent Non-Executive Chairman, one (1) Chief Executive Officer, one (1) Executive Director, three (3) Independent Non-Executive Directors and two (2) Non-Independent Non-Executive Directors. The Board practices a clear demarcation of responsibilities and independence. The Chairman holds a Non-Executive role for the better transparency in conducting Board meetings especially when overseeing the implementation of sensitive Board’s decision and policies.

The roles and fiduciary duties of the Chairman, the Chief Executive Officer and the Executive Director are clearly delineated for better corporate governance. The Chairman is responsible for ensuring the Board and its members function effectively, and the Chairman has authority over the general agenda and standard of conduct at each Board meeting. The Secretary of the Board meeting will assist the Chairman to ensure that all Directors are provided with the relevant information on a timely basis prior to each meeting. The general agenda may include minutes of previous meetings of the Board, quarterly financial results of the Group, issues requiring the Board’s deliberation and approval and other reports.

At each Board meeting, the Chief Executive Officer together with the Executive Director will have the overall responsibility to brief the Board on the Group’s general state of affair, financial and operational activities, and progress of any previous Board’s policies and decisions. The Chief Executive Officer will be responsible to highlight and provide a resolution ( whenever possible, for the Board to decide) on any material subject in regards to the management, operation and performance of the Group’s business.

The Independent Non-Executive Directors play an important role in providing a balanced voice and independent view in the decision making process by the Board members. The Independent Non-Executive Directors bring to the board room a balanced, non-conflicting and objective judgment on any sensitive Board’s decisions to safeguard shareholders, investors and the minority interest. Bursa Malaysia Securities Berhad ACE Market Listing requirements further states that one third of the Board members need to be independent members.

STATEMENT OF CORPORATE GOVERNANCE

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STATEMENT OF CORPORATE GOVERNANCE (CONT’D)

(II) Board Meetings The Board met eight times during the financial year ended 31 March 2011 and their attendance at the meetings are as follows:-

Directors No.of meeting Attended / Held

Dato' Feroz bin A S Moidunny (appointed on 25.3.2011) 1/1

Ahmad Ruslan Zahari Dato’ Dr. Zakaria (appointed on 14.1.2011) 4/4

Wong Hun Liang 8/8

Ng Kok Hok (appointed on 1.12.2010) 4/4

Abdul Rahman bin Shakor (appointed on 17.12.2010) 3/4

Tham Kah Yong (appointed on 15.4.2011) N/A

Tan Sin Chong 6/8

Shaliza binti Sabtu (appointed on 1.10.2010) 3/5

Chong Set Fui (f) (resigned on 31.5.2011) 5/6

Yee Wai Meng (appointed on 24.2.2011, resigned on 29.3.2011) 3/3

Dato’ Sri Dr. Shafiq Sit Abdullah (resigned on 7.3.2011) 5/6

Poh Hou Liang (resigned on 10.2.2011) 4/4

Tan Kuen Wei (resigned on 17.1.2011) 4/4

Gan Leng Swee (resigned on 4.1.2011) 4/4

Ir. Azman Ahmad (resigned on 24.11.2010) 1/3

(III) CommitteesThe Board established three (3) Committees with specific key responsibilities and terms of reference in order to better assist the Board in deliberating issues on a detailed manner, resolve and propose recommendations to the Board members for their deliberation and resolution. The members of these Committees are selected from the Board members of whom are mostly Independent Non-Executive Directors.

These committees operate with clear defined terms of reference and function independently from the Board. An Independent Non-Executive Director is normally selected to Chair the respective Committee meeting and the majority of the Committee members are Independent Non-Executive Directors, to ensure a high standard of corporate governance is adopted by these committees. The respective Committee hold meetings independently from Board meetings, and members of the Board and management can/may be invited by the Chairman of the respective Committees to be present during these Committee meetings.

The Committees in which the Board has delegated specific terms of reference and responsibilities are as follows:- Audit Committee ( refer to Audit Committee Report in this Annual Report)- Nomination Committee- Remuneration Committee

Nomination CommitteeThe Nomination Committee is responsible for ensuring that the Board has the appropriate balance composition and size, the required skills mix, experience, and other core competencies; and is also responsible for considering and recommending the appointment of new Directors to the Board. The Nomination Committee is also instrumental in recommending individuals for key positions within the Group.

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STATEMENT OF CORPORATE GOVERNANCE (CONT’D)

The existing Nomination Committee comprises three (3) members who are exclusively Non-Executive Directors:-

Chairman : Abdul Rahman bin Shakor (Independent Non-Executive Director)Members : Ng Kok Hok (Independent Non-Executive Director) Tham Kah Yong (Independent Non-Executive Director)

Terms of reference of Nomination Committee:-

(1) To nominate suitable individuals and recommend their appointment as Board Members of Ingenuity Solutions Berhad and its subsidiary and associated companies.

(2) Review the performance of the Board members of Ingenuity Solutions Berhad and its subsidiaries and associated companies.

(3) Consider and recommend a policy governing the length of service of Executive Directors, Chief Executive Officer and key personnel of Ingenuity Solutions Berhad and its subsidiaries and associate companies.

(4) Consider and recommend measures to upgrade the effectiveness of the Board and the board of subsidiary and associated companies.

(5) Consider and recommend solution on issues of conflict of interest affecting directors of Ingenuity Solutions Berhad and its subsidiary and associate companies.

(6) Recommend to the Board on selection of Directors and Senior Management (if so) to fill the Board and the Committees.

(7) Consider and recommend to the Board on succession planning at Executive Director level as well as senior management.

(8) Carry out the specific duties and responsibilities per terms of reference as delegated by the Board.

Remuneration CommitteeThe remuneration Committee is responsible for recommending to the Board the compensation and benefits package and salary scale, the basis for bonus and salary increments for the executives of the Group. The objective of the Remuneration Committee is to attract and retain high caliber executives needed to run and manage the Company successfully.

The Remuneration Committee is also responsible for recommending to the Board of remuneration and benefits package and the terms and condition of service of the Executives Directors. The remuneration package of Non-Executive Directors is also reviewed by the Committee and recommended to the Board thereafter.

The current Remuneration Committee comprises three (3) members, the majority of whom are Independent Non-Executive Directors:-

Chairman : Abdul Rahman bin Shakor (Independent Non-Executive Director)Members : Ng Kok Hok (Independent Non-Executive Director)

Tham Kah Yong (Independent Non-Executive Director) Ahmad Ruslan Zahari Dato’ Dr. Zakaria (Chief Executive Officer/Executive Director)

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STATEMENT OF CORPORATE GOVERNANCE (CONT’D)

Terms of reference of Remuneration Committee:-

(1) Review and recommend to the Board on the Directors’ fees and remuneration package for Directors.

(2) Review Service Contracts for Executive Directors and Chief Executive Officer.

(3) Review and recommend to the Board the remuneration package for Senior Management of the Group with designation of General Manager (or equivalent) and above.

(4) Consider and recommend payments like ex-gratia, bonus, incentives, retirement and salary review of executives within the Group.

(IV) Supply of informationTo effectively discharge its duties and responsibilities, Board members are supplied with full and timely access to information concerning the Group’s operations and financial status on a regular basis. At every financial quarter , the Board will meet at least once to approve the Group’s quarterly announcement to Bursa Malaysia Securities Berhad. The Management and the Group’s Secretary will be responsible to prepare, on a timely basis, all agendas and board papers containing the relevant information for the Board to deliberate on. The Board papers are circulated prior to each Board meetings to enable Board members to facilitate informed and timely decision making. The Board will normally request the presence of the Chief Executive Officer, Secretary, Management, Internal and/or External Auditors to report on the Group’s financial, operational and corporate developments. If so required, the Board may also request for professional and independent advice before making any decision and resolution.

(V) Appointment and Re-election of DirectorThe Nomination Committee ensures that all appointments of new directors to the Board are properly made with an established and transparent procedure and in compliance with the rules of the relevant authorities. Any appointment of additional director will be made as and when it is deemed necessary by the existing Board with due consideration given to the mix skills, expertise and experience required for an effective Board.

Pursuant to the Company’s Articles of Association, one-third (1/3) of the Directors including the Managing Director, shall retire from office, at least once in three (3) years. Retiring directors can offer themselves for re-election. Directors who are appointed by the Board during the financial year are subject to re-election by shareholders at the next Annual General Meeting held following their appointment. Directors over seventy (70) years of age are subject for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.

(VI) Directors trainingIn line with the constant changes in rules and regulations, information technology and business environment, all Directors are encouraged to attend continuous training to further their knowledge and equip themselves with the know-how and knowledge to effectively discharge their duties. Directors’ training programmes and seminars are deemed individually or collectively useful towards keeping the Board abreast with current development and changes in laws and regulations.

All Directors have attended the Mandatory Accreditation Programme (MAP).

None of the Directors have attended the continuous education training programme during the financial year under review for the Group is in the midst of undergoing re-organisation to strengthen their financial position and business growth. Save for Mr. Wong Hun Liang and Mr. Tan Sin Chong, all other Board members were appointed during the financial year under review.

The Board will undergo relevant training in financial year 2012 to keep abreast with new regulatory developments and requirements in compliance with Bursa Securities Listing Requirements

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STATEMENT OF CORPORATE GOVERNANCE (CONT’D)

B. DIRECTORS’ REMUNERATION Directors’ remuneration includes directors’ salary, other emoluments and fee received during the year. The fee of each Director commensurates with that director’s responsibility, contribution and job scope. The fee received by the Directors of the Company is subsequently approved by shareholders at the Company’s Annual General Meeting. The Remuneration and Nomination Committees further ensure the Group attracts and retains the right caliber Directors with the appropriate remuneration, necessary skills and experience.

Directors’ Remuneration PackageThe Directors’ remuneration for the financial year ended 31 March 2011 is as follows:-

ExecutiveDirectors

(RM)

Non-ExecutiveDirectors

(RM)Salaries and other emoluments 180,547 -Fees 6,500 29,000

Range of remuneration ExecutiveDirectors

Non-ExecutiveDirectors

Below RM50,000 3 9RMRM50,001 to RM100,000 - -RMRM100,001 to RM150,000 1 -RMRM150,001 to RM200,000 - -RMRM200,001 to RM250,000 - -

C. DIRECTORS’ RESPONSIBILITY FOR PREPARING THE ANNUAL FINANCIAL STATEMENTSThe Board is collectively responsible to ensure that the financial statements, the results and cash flow will give a comprehensive and fair view of the Group’s financial position at the end of the relevant financial year.

The Directors need to ensure that the financial statements are prepared in accordance with the applicable approved accounting standards, the provisions of the Companies Act, 1965 and the Listing Requirements of Bursa Malaysia Securities Berhad. The Board has responsibility for ensuring that proper accounting records are kept with reasonable accuracy, the disclosure of financial position of the Group, and to ensure that the financial statements comply with the approved accounting standards and Listing Requirements. The Directors also have overall responsibilities for taking such reasonable steps to safeguard the assets of the Group and to take measures to prevent and detect frauds and other irregularities.

The Board believes they have applied all appropriate accounting policies on a consistent and prudent basis, and made reasonable and necessary judgments and estimates to ensure that the financial statements for the year ended 31 March 2011 provide a true and fair view of the Company’s financial position and affairs.

The Statement of Directors’ Responsibility is disclosed in this Annual Report.

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STATEMENT OF CORPORATE GOVERNANCE (CONT’D)

D. INVESTOR RELATIONS AND COMMUNICATION WITH SHAREHOLDERSThe Board recognises the important of effective communication with its investors and shareholders. Key investor relation activities include meeting with financial analysts and fund managers and participating in teleconferences with analysts as and when deemed necessary. Presentations are made to potential investors and shareholders, based on the guidelines of the Listing Requirements.

Group’s corporate proposals, quarterly and annual financial results and other required announcement are made on Bursa Malaysia Securities Berhad on a timely basis and are available for public access on the internet via Ingenuity’s website at http://www.ingenuity.com.my and Bursa Malaysia’s website at http://www.bursamalaysia.com.

The Annual General Meeting (“AGM”) provides a platform for both private and institutional shareholders to share viewpoints and acquire information on issues relevant to the Group. At the AGM, shareholders are encouraged to participate dialogue with the Board members on the Group’s business operations in general. The Notice of the AGM and related documents are issued to shareholders at least twenty-one (21) days before the meeting.

To keep the general public informed, the Group would disseminate copies of its annual report in either CD-ROM or hard copy format to all relevant media and/or press immediately following the AGM. Shareholders will be invited to raise any questions that they may have in relation to the Group’s performance and its business operations.

The Group’s website(www.ingenuity.com.my) provides a vital communications channel for investors, shareholders, business partners and clients to access corporate information and news and events related to the Group. The website is updated periodically to reflect the developments within the Group and its used as a marketing platform to reach out to the world at large.

E. ACCOUNTABILITY AND AUDIT The Board takes reasonable steps to provide a balanced and comprehensive assessment of the Group’s financial performance and prospects, primarily throght the annual report and quarterly financial statements by way of:-

(i) Internal ControlThe Board recognises the importance of maintaining a sound system of internal controls, including operational, compliance and risk assessment, to safeguard the shareholders’ investment and the Group’s assets. The Board is aware that the system, by its nature, can only provide reasonable but not absolute assurance against all material misstatement, loss or fraud. As total risks cannot be entirely eliminated, the Board strives to ensure that the Group’s process and procedures that are put in place will minimize and manage key risk areas with the assistance of the Management, Audit Committee and Auditors. This ensures that ongoing reviews are carried out continuously to safeguard the Group’s assets. (The Statement on Internal Control provides an overview of internal control activities during the year.)

(ii) Financial ReportingPrior to the recommendations to be made to the Board, the Audit Committee, having better understanding of financial regulations and requirements, is empowered by the Board to review the Group’s financial statements to ensure conformance with all applicable approved accounting standards and Listing Requirements. The Audit Committee report with its terms of reference ( furnished in this Annual Report) provides a better understanding of the Audit Committee’s responsibilities and work scope during the year.

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STATEMENT OF CORPORATE GOVERNANCE (CONT’D)

(iii) Relationship with AuditorsThe Board is collectively responsible for the Group’s overall financial statement presentation. As the Board is not involved in the day to day operations, it needs to rely not only on Management for information, but also the external and internal auditors to ensure that the Board can present a balanced and meaningful assessment of the Group’s financial statements. External auditors are invited to brief the Board on the Group’s financial statement and position, while the internal auditors will present their report/findings at every quarter on the Group’s internal controls mechanism highlighting areas of weaknesses and strength.

F. ADDITIONAL COMPLIANCE INFORMATION

(i) Utilisation of proceeds raised from corporate proposalThe Company had in March 2011 completed a private placement of RM1.52 million. The full proceeds were fully utilised for working capital and defray incidental expenses related to the issuance.

(ii) Share BuybacksFor the financial year ended 31 March 2011, the Group did not enter into any share buyback transactions.

(iii) Options, Warrants or Convertible SecuritiesNo options, warrants or convertible shares were issued during the financial year ended 31 March 2011.

(iv) Depository Receipts ProgrammeThe Company did not sponsor any Depository receipt programme for the financial year ended 31 March 2011.

(v) Sanctions Imposed and/or PenaltiesThere were no sanctions or penalities imposed on the Group and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year ended 31 March 2011.

(vi) Non-audit feesNon-audit fee paid or payable to the external auditors by the Company for the financial year ended 31 March 2011 was RM3,000.00 (2010 : RM 2,500.00). The internal audit fee paid by the Company during the year was RM 23,100.00 ( 2010 : RM 25,200.00)

(vii) Profit GuaranteeFor the financial year ended 31 March 2011, the Company and/or its subsidiaries did not give profit guarantees to any third party.

(viii) Variation in ResultsThere was no deviation of 10% or more between the profit after taxation stated in the unaudited fourth quarter ended 31 March 2011 as previously announced and the audited financial statements of the Group for the financial year ended 31 March 2011.

E. ACCOUNTABILITY AND AUDIT (CONT’D)

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STATEMENT OF CORPORATE GOVERNANCE (CONT’D)

(ix) Material ContractFor the financial year ended 31 March 2011, there were no material contracts entered into by the Group and its subsidiaries, which involved Directors’ or major shareholders’ interests.

(x) Revaluation Policy on Landed PropertyThe Group does not have a revaluation policy in respect of its landed properties.

(xi) Corporate Social Responsibility Activities or PracticesThe Company did not undertake any corporate social responsibilty activities or practices during the financial year under review.

(xii) Recurrent Related Party Transactions of a Revenue NatureDetails of the recurrent related party transactions entered during the financial year ended 31 March 2011 are disclosed in Note 24 of the Financial Statements.

The value of recurrent related party transactions were within the mandate granted by members in the last Annual General Meeting held on 24th September 2010.

Company Transacting Party Nature of Relationship Nature ofTransaction

FYE2011Value(RM)

RelianceComputerCentreSdn. Bhd.(“RCC”)

RPB Group These Transacting Parties are subsidiaries of Reliance Pacific Bhd. (“RPB”), which are also companies indirectly controlled by Dato’ Gan Eng Kwong and Datin Irene Tan.

Dato’ Gan Eng Kwong and Datin Irene Tan are deemed interested in Ingenuity Solu-tions Berhad by virtue of their direct substantial sharehold-ings in Reliance Pacific Bhd., which wholly owns RPB Capital and Reliance E-Com, which in turn wholly own Xplonet Capital Sdn. Bhd., a major shareholder of Ingenuity Solutions Berhad

Provision of IT con-sultancy, services and hardware and supply by RCC.

376,510

RCC Reliance PacificBerhad

- do- Provision of IT consultancy and services by RCC.

20,580

F. ADDITIONAL COMPLIANCE INFORMATION (CONT’D)

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STATEMENT OF CORPORATE GOVERNANCE (CONT’D)

Company Transacting Party Nature of Relationship Nature ofTransaction

FYE2011Value(RM)

RCC Reliance Shipping & Travelling AgenciesSdn. Bhd.

- do- Provision of IT consultancy and services by RCC.

61,759

RCC Reliance Sighting Sdn Bhd

- do- Provision of IT consultancy and services by RCC.

19,552

RCC RPB DevelopmentSdn. Bhd.

- do- Provision of IT consultancy and services by RCC.

27,268

ADDITIONAL COMPLIANCE INFORMATION (CONT’D)

(xii) Recurrent Related Party Transactions of a Revenue Nature (cont’d)

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OVERVIEW The Malaysian Code on Corporate Governance requires Public Listed Companies to maintain a sound system of internal controls - designed to safeguard shareholders’ interest and the Company’s assets. The Bursa Malaysia Securities Berhad’s ACE Market Listing Requirements require directors of Public Listed Companies to include a statement on the state of the Company’s internal control in the Annual Report.

This statement of Internal Control is prepared in accordance to rule 15.26(b) of the ACE Market Listing Requirements and was reviewed by the external auditor as required under rule 15.23. The external auditor’s review was performed in accordance to the Recommended Practice Guide 5 (“RPG 5”) issued by the Malaysian Institute of Accountants; and the external auditor is not required to form an opinion on the effectiveness of the control procedures or consider whether this statement covers all risk and control procedures during the year.

BOARD’S RESPONSIBILITYThe Directors of the Company are responsible for the preparation and fair presentation of the financial statements in accordance with the Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes designing, implementing and maintaining sound internal controls which are relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable within the Group.

The Board reaffirms that its overall responsibility is maintaining and implementing an adequate and effective internal control system on an ongoing basis to identify, evaluate, monitor and manage significant business risks or internal control failures. The Board wishes to highlight that in any internal control systems (which covers not only financial but operational and compliance controls as well), it does have inherent limitations; and the internal control systems can only provide reasonable and not absolute assurance against all business and financial risk, human error or deliberate circumvention of the controls that were put in place. The Board does not manage the Company or monitor the internal control mechanism on a daily basis, as such, the Board relies on information provided by the key personnel, auditors (external and internal) and all relevant parties in its evaluation of the Group’s internal control systems’ reliability, effectiveness and dependency.

INTERNAL CONTROL STRUCTURE, ELEMENTS AND PORCESSESThe Group’s internal control mechanism provides both an integral framework and effective monitoring tool in ensuring that the business operates without major disruptions, material losses mitigated and compliance to applicable laws and regulations adhered to during the year.

The Board ensures financial and operational review are conducted periodically by the management and advisors in order to identify, manage and address current or future events that may affect the Group’s operations, controls and business plans, which includes the following:

● Organizational Structure- The organisational structure ensures that the roles and responsibilities of the Board and management are

clearly defined in ensuring effective discharge of roles and responsibilities that will provide authority limits, terms of reference and functions with clear hierarchical reporting procedures within the Group. The Chief Executive Officer leads all board papers presentation with the assistance of the respective Heads of Divisions and reports to all the Board on all pertinent issues that may affect the Group’s business and operations.

● Management, Audit, Nomination and Remuneration Committees- Management Committee meetings are held and attended by senior personnel to address operational issues,

budgets, performance, business review/planning and control management. Key personnel will be invited from the respective subsidiaries and divisions to provide monthly and quarterly reports to the Management Committee on their performance, compliance, strategic plans and highlight major issues that need attention.

STATEMENT ON INTERNAL CONTROL

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- The Chief Executive Officer will report material findings and/or variances highlighted by the Management Committee to the Board, and the Board will review its implication to the Group and provide recommended strategies to address them. To safeguard the Group’s interest at subsidiary level, representatives from the Management Committee are present at subsidiaries’ management meetings. The representatives will the management meetings. The representatives will then report to the Management Committee on their findings and observations.

- The Nomination Committee and Remuneration Committee, whose majority members consist of independent directors, was established to maintain a higher level of Corporate Governance and exercise independence judgment and decision in discharging the duties of nominating and remunerating directors, management and key personnel based on performance, skills and experience.

● Documentation and procedures- To ensure subsidiaries, business units, divisions and employees are working coherently to achieve the Group’s

overall business objectives, corporate policies and procedures of the Group are clearly documented and disseminated through internal memorandums, staff briefings and operational meetings.

INTERNAL AUDIT FUNCTIONThe Group’s internal audit function is outsourced to an independent professional firm that specialises in the provision of internal audit services at a cost of RM23,100 during the year. The Board and Audit Committee believes that this ensures a professional yet independent assessment is obtained on the Group’s internal control mechanism.

INTERNAL CONTROL SUMMARYDuring the year, the Board is of the opinion that the internal control system has been adequate and effective; and there were no major internal control failures that may have resulted in material losses or contingencies to the Group. To ensure the effectiveness, reliability and relevance of the internal controls, the Management under the supervision of the Board and input from the internal auditors will continuously improve on the internal control systems that are in place.

STATEMENT ON INTERNAL CONTROL (CONT’D)

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The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2011.

PRINCIPAL ACTIVITIESThe Company is principally engaged in investment holding.

The principal activities of the subsidiary companies are disclosed in Note 7 to the Financial Statements.

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

FINANCIAL RESULTSGroup(RM)

Company(RM)

Loss for the financial year 1,410,511 303,780Attributable to:- Owners of the parent 1,410,511

DIVIDENDSThere were no dividends paid or declared by the Company since the end of the previous financial year.

The Directors do not recommend any final dividend for the current financial year.

RESERVES AND PROVISIONSThere were no material transfers to or from reserves or provisions during the financial year.

ISSUE OF SHARES AND DEBENTURESDuring the financial year, the following shares were issued:-

Date of issueClass of shares

Number of shares

Nominal amount of each share

Purposes of issue Terms

11.3.2011 Ordinary 13,235,200 RM0.10 Working capital Cash

There were no debentures issued during the financial year.

DIRECTORS’ REPORT

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INFORMATION ON THE FINANCIAL STATEMENTSBefore the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:-

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

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

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

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

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

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

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

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

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

OTHER STATUTORY INFORMATIONThe Directors state that:-

At the date of this report, they are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.

In the opinion of the Directors:-

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

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

DIRECTORS’ REPORT (CONT’D)

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DIRECTORS The Directors in office since the date of the last report are:-• Dato’ Feroz bin A S Moidunny (Chairman, Non-Independent Non-Executive Director, appointed

on 25.3.2011,redesignated to Chairman on 29.3.2011)

• Ahmad Ruslan Zahari Dato’ Dr. Zakaria (Independent Non-Executive Director, appointed on 14.1.2011, redesignated to Chairman on 17.3.2011, redesignated to Chief Executive Officer on 29.3.2011)

• Wong Hun Liang (redesignated to Executive Director on 29.3.2011)

• Tan Sin Chong (Non-Independent Non-Executive Director)

• Shaliza binti Sabtu (Non-Independent Non-Executive Director, appointed on 1.10.2010)

• Ng Kok Hok (Independent Non-Executive Director, appointed on 1.12.2010)

• Abdul Rahman bin Shakor (Independent Non-Executive Director, appointed on 17.12.2010)

• Tham Kah Yong (Independent Non-Executive Director, appointed on 15.4.2011)

• Chong Set Fui (f) (Non-Independent Non-Executive Director, resigned on 31.5.2011)

• Yee Wai Meng (Chief Financial Officer, Executive Director, appointed on 24.2.2011, resigned as Executive Director on 29.3.2011)

• Dato’ Sri Dr. Shafiq Sit bin Abdullah (Chairman, Non-Independent Non-Executive Director, resigned on 7.3.2011)

• Poh Hou Liang (Executive Director, resigned on 10.2.2011)

• Tan Kuen Wei (Independent Non-Executive Director, resigned on 17.1.2011)

• Gan Leng Swee (Independent Non-Executive Director, resigned on 4.1.2011)

• Azman bin Ahmad (Non-Independent Non-Executive Director, resigned on 24.11.2010)

According to the Register of Directors’ Shareholdings, the beneficial interests of those who were Directors at the end of the financial year in the shares of the Company and its related corporations were as follows:-

Ordinary shares of RM0.10 each

Interest in the Company At 1.4.2010 Bought Sold At 31.3.2011

Direct interestWong Hun Liang 7,441,000 - 7,441,000 -Tan Sin Chong 59,900 - 39,900 20,000

Deemed interestDato’ Feroz bin A S Moidunny* - 32,832,308 - 32,832,308Wong Hun Liang* - 32,832,308 - 32,832,308

*deemed interest by virtue of their shareholdings in Firstwide Success Sdn. Bhd.

By virtue of the Directors’ interest in the Company, they are also deemed to have interest in the shares of all the subsidiary companies to the extent that the Company has an interest under Section 6A of the Companies Act, 1965.

No other Directors at the end of the financial year held any interest in the shares of the Company or its related corporations during the financial year.

DIRECTORS’ REPORT (CONT’D)

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

Since the end of the previous financial year, no Directors have received or become entitled to receive any benefits (other than as disclosed in Notes 19 and 24 to the Financial Statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

AUDIT COMMITTEEThe members of the Audit Committee are:-

• Ng Kok Hok (Chairman, appointed as Member on 1.12.2010, redesignated as Chairman on 4.1.2011)• Abdul Rahman bin Shakor (appointed on 17.12.2010)• Tham Kah Yong (appointed on 15.4.2011)• Ahmad Ruslan Zahari Dato’ Dr. Zakaria (appointed on 14.1.2011, resigned on 29.3.2011)• Gan Leng Swee (Chairman, resigned on 4.1.2011) • Tan Kuen Wei (resigned on 17.1.2011)

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

SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR The significant events during and after the financial year are disclosed in Note 25 to the Financial Statements.

AUDITORSMessrs SJ Grant Thornton have expressed their willingness to continue in office.

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

............................................................…. ) WONG HUN LIANG ) ) ) ) DIRECTORS ) )…………………………………………. ) AHMAD RUSLAN ZAHARI ) DATO’ DR. ZAKARIA )

Kuala Lumpur22 July 2011

DIRECTORS’ REPORT (CONT’D)

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STATEMENT BY DIRECTORS

In the opinion of the Directors, the financial statements set out on pages 32 to 65 are drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2011 and of its financial performance and cash flows of the Group and of the Company for the financial year then ended.

The supplementary information as set out in Note 28 on page 65 is prepared in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors dated 22 July 2011.

............................................................... ....................................................................................... WONG HUN LIANG AHMAD RUSLAN ZAHARI DATO’ DR. ZAKARIA

Kuala Lumpur22 July 2011

STATUTORY DECLARATIONI, Yee Wai Meng, being the officer primarily responsible for the financial management of Ingenuity Solutions Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 32 to 65 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed at Kuala Lumpur in )the Federal Territory this day of )22 July 2011 ) ………………………………………………….. YEE WAI MENG

Before me:

Commissioner for Oaths

STATEMENT By DIRECTORS / STATUTORy DECLARATION

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Report on the Financial Statements

We have audited the financial statements of Ingenuity Solutions Berhad, which comprise the statements of financial position of the Group and of the Company as at 31 March 2011, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes enumerated in Notes 1 to 27 and as set out on pages 38 to 65.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia, and for such internal controls as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 March 2011 and of their financial performance and cash flows for the financial year then ended.

Report on Other Legal and Regulatory Requirements

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

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

b) We have considered the financial statements and the auditors’ reports of the subsidiary company of which we have not acted as auditors, as disclosed in Note 7 to the Financial Statements.

c) We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

30

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF INGENUITy SOLUTIONS BERHAD(Incorporated in Malaysia) Company No: 609423 V

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d) The auditors’ reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174 (3) of the Act.

Other Reporting Responsibilities

The supplementary information set out in Note 28 on page 65 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

SJ GRANT THORNTON HOOI KOK MUN(NO. AF: 0737) (NO: 2207/01/12(J))CHARTERED ACCOUNTANTS PARTNER Kuala Lumpur 22 July 2011

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF INGENUITy SOLUTIONS BERHAD(Incorporated in Malaysia) Company No: 609423 V (CONT’D)

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STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2011

ASSETSNon-current assets

Property, plant and equipment Investment in subsidiary companies

Intangible assets

Total non-current assets

Current assets

Inventories

Trade receivables

Other receivables

Amount due from subsidiary companies

Fixed deposits with a licensed bank

Cash and bank balances

Total current assets

Total assets

EQUITY AND LIABILITIESEQUITY

Share capital Reserves

Total equity

Note

67

8

9

10

11

7

12

12

13 14

Group

2011RM

2010RM

832,035 1,107,154 - -

7,166,507 7,792,374

7,998,542 8,899,528

48,751 206,812

3,132,767 1,672,770

102,594 164,214

- -

500,000 1,000,000

499,920 527,084

4,284,032 3,570,880

12,282,574 12,470,408

14,558,752 13,235,232 (2,547,186) (1,284,958)

12,011,566 11,950,274

Company

2011RM

2010RM

- - 6,423,814 6,423,812

- -

6,423,814 6,423,812

- -

- -

- -

13,452,437 11,747,303

500,000 1,000,000

32,315 88,942

13,984,752 12,836,245

20,408,566 19,260,057

14,558,752 13,235,232 5,838,674 5,994,171

20,397,426 19,229,403

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

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STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2011 (CONT’D)

LIABILITIESNon-current liability

Deferred taxation

Total non-current liability

Current liabilities

Trade payables

Other payables

Total current liabilities

Total liabilities

Total equity and liabilities

15

16

17

- 7,084

- 7,084

187,246 395,665

83,762 117,385

271,008 513,050

271,008 520,134

12,282,574 12,470,408

- -

- -

- -

11,140 30,654

11,140 30,654

11,140 30,654

20,408,566 19,260,057

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

Note

Group

2011RM

2010RM

Company

2011RM

2010RM

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STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL yEAR ENDED 31 MARCH 2011

Revenue

Cost of sales

Gross profit

Other income

Selling and promotion expenses

Administration expenses

Other expenses

Loss before tax

Tax income

Net loss for the financial year/ Total comprehensive loss for the financial year

Loss for the financial period attributable to: Owners of the parent

Loss per share - Basic (sen)

Note

18

18

19

20

21

Group

2011RM

2010RM

6,220,786 5,346,412

(5,364,804) (4,172,052)

855,982 1,174,360

383,523 209,469

(83,196) (96,671)

(2,094,906) (3,038,514)

(478,755) (1,679,353)

(1,417,352) (3,430,709)

6,841 109,655

(1,410,511) (3,321,054)

(1,410,511) (3,321,054)

(1.06) (2.51)

Company

2011RM

2010RM

- -

- -

- -

25,394 23,019

(7,432) (8,656)

(321,742) (281,653)

- (1,646,803)

(303,780) (1,914,093)

- -

(303,780) (1,914,093)

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

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STATEMENTS OF CHANGES IN EQUITy FOR THE FINANCIAL yEAR ENDED 31 MARCH 2011

Group

Balance as at 1 April 2009

Total comprehensive loss for the financial year

Balance as at 31 March 2010

Transactions with owners:

Issuance of shares arising from private placement

Share issuance expenses relating to private placement

Total transactions with owners

Total comprehensive loss for the financial year

Balance as at 31 March 2011

Company

Balance as at 1 April 2009

Total comprehensive loss for the financial year

Balance as at 31 March 2010

Transactions with owners:

Issuance of shares arising from private placement

Share issuance expenses relating to private placement

Total transactions with owners

Total comprehensive loss for the financial year

Balance as at 31 March 2011

Sharecapital

RM

Sharepremium

RM

MergerdeficitRM

Accumulated losses

RM

Totalequity

RM

13,235,232 12,715,113 (7,900,000) (2,779,017) 15,271,328

- - - (3,321,054) (3,321,054)

13,235,232 12,715,113 (7,900,000) (6,100,071) 11,950,274

1,323,520 198,528 - - 1,522,048

- (50,245) - - (50,245)

1,323,520 148,283 - - 1,471,803

- - - (1,410,511) (1,410,511)

14,558,752 12,863,396 (7,900,000) (7,510,582) 12,011,566

13,235,232 12,715,113 - (4,806,849) 21,143,496

- - - (1,914,093) (1,914,093)

13,235,232 12,715,113 - (6,720,942) 19,229,403

1,323,520 198,528 - - 1,522,048

- (50,245) - - (50,245)

1,323,520 148,283 - - 1,471,803

- - - (303,780) (303,780)

14,558,752 12,863,396 - (7,024,722) 20,397,426

Attributable to equity holders of the Company

Non-distributable

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

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STATEMENTS OF CASH FLOWS FOR THE FINANCIAL yEAR ENDED 31 MARCH 2011

CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax

Adjustments for:-

Allowance for impairment of investment

Allowance for impairment loss on receivables

Allowance for impairment loss on receivables no longer required Allowance for slow moving inventories

Allowance for slow moving inventories no longer required Amortisation of intangible assets

Bad debts written off

Depreciation

(Gain)/loss on disposal of property, plant and equipment Inventories written off

Impairment loss on development costs

Interest income

Operating loss before working capital changes

Changes in working capital:- Inventories

Receivables

Payables

Subsidiary companies

Cash used in operations

Tax refund

Tax paid

Interest received

Net cash used in operating activities

Group Company

2011RM

2010RM

2011RM

2010RM

(1,417,352) (3,430,709) (303,780) (1,914,093)

- - - 1,646,803

105,509 229,030 - -

(229,030) (182,871) - - 32,033 88,954 - -

(99,138) - - 625,867 277,621 - -

203,711 171,175 - -

277,726 386,688 - -

(22,400) 373 - - 137,502 - - -

- 1,182,052 - -

(24,194) (23,991) (24,194) (23,019)

(409,766) (1,301,678) (327,974) (290,309)

87,664 166,960 - -

(1,476,893) 780,611 - -

(242,042) (351,514) (19,514) (16,685)

- - (1,705,134) (107,776)

(2,041,037) (705,621) (2,052,622) (414,770)

- 67,416 - -

(1,917) (21,198) - -

24,194 23,991 24,194 23,019

(2,018,760) (635,412) (2,028,428) (391,751)

Note

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STATEMENTS OF CASH FLOWS FOR THE FINANCIAL yEAR ENDED 31 MARCH 2011 (CONT’D)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment

Proceeds from disposal of property, plant and equipment Acquisition of subsidiary company

Net cash from/(used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITYNet proceeds from issuance of shares

Net cash from financing activity

CASH AND CASH EQUIVALENTS Net decrease

Brought forward

Carried forward

Cash and bank balances

Fixed deposits with a licensed bank

Group Company

2011RM

2010RM

2011RM

2010RM

(2,607) (8,336) - -

22,400 50,000 - - - - (2) -

19,793 41,664 (2) -

1,471,803 - 1,471,803 -

1,471,803 - 1,471,803 -

(527,164) (593,748) (556,627) (391,751)

1,527,084 2,120,832 1,088,942 1,480,693

999,920 1,527,084 532,315 1,088,942

Group Company

2011RM

2010RM

2011RM

2010RM

499,920 527,084 32,315 88,942

500,000 1,000,000 500,000 1,000,000

999,920 1,527,084 532,315 1,088,942

Note

A

NOTE TO THE CASH FLOW STATEMENTS

A. CASH AND CASH EQUIVALENTSCash and cash equivalents included in the cash flow statements comprise the following items:-

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

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NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011

1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTSThe financial statements of the Group and of the Company have been prepared in accordance with the Companies Act 1965 in Malaysia and Financial Reporting Standards issued by the Malaysian Accounting Standards Board (“MASB”).

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESThe Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The Group’s and the Company’s financial risk management policies seek to ensure that adequate financial resources are available for the development of the Group’s and the Company’s businesses whilst managing its risks. The Group and the Company operate within policies that are approved by the Board and the Group’s policies are not to engage in speculative transactions.

The main areas of financial risks faced by the Group and the Company and the policies in respect of the major areas of treasury activity are set out as follows:-

2.1 Credit riskCredit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises primarily from receivables. It is the Group’s policy to enter into financial instrument with a diversity of creditworthy counterparties. The Group does not expect to incur material credit losses of its financial assets or other financial instruments.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group provides services only to recognised and creditworthy third parties. It is the Group’s policy that all customers are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Following are the areas where the Group and the Company are exposed to credit risk:

i. ReceivablesAs at the end of the reporting year, the maximum exposure to credit risk arising from receivables is limited to the carrying amounts in the statement of financial position.

With a credit policy in place to ensure the credit risk is monitored on an ongoing basis, management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. The Group uses aging analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than credit terms granted are deemed to have higher credit risk, and are monitored individually.

Financial assets that are neither past due nor impaired and either past due or impaired are disclosed in Note 10 to the Financial Statements.

In respect of trade receivables, the Group is exposed to significant credit risk exposure to a single counterparty in which 89% of trade receivables consists of 3 customers. Based on historical information about customer default rates, management considers the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

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NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

ii. Intercompany balancesThe maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.

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

As at the end of the reporting year, there was no indication that the advances to the subsidiaries are not recoverable.

2.2 Liquidity and cash flow risksLiquidity and cash flow risks are the risks that the Group will not be able to meet its financial obligations as and when they fall due, due to shortage of funds.

In managing its exposures to liquidity and cash flow risks arises principally from its various payables, the Group maintains a level of cash and cash equivalents deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities as and when they fall due.

As at 31 March 2011, the Group’s non-derivative financial liabilities which have contractual maturities are summarised below:-

GroupLess than 1 year

RMUnsecured:Trade payables 187,246Other payables 83,762

Total 271,008

CompanyLess than 1 year

RMUnsecured:Other payables 11,140

3. CAPITAL MANAGEMENTThe Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Group sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

2.1 Credit risk (Cont’d)

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4. SIGNIFICANT ACCOUNTING POLICIES

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

The financial statements are presented in Ringgit Malaysia (RM) which is the Group’s and of the Company’s functional currency.

4.2 Adoption of New and Revised Financial Reporting Standards (“FRSs”)On 1 April 2010, the Group and the Company have adopted the following new and revised FRSs mandatory for annual periods beginning on or after 1 April 2010:-(a) FRS 7 - Financial Instruments: Disclosures

(b) FRS 8 - Operating Segments

(c) FRS 101 - Presentation of Financial Statements (Revised)

(d) FRS 139 - Financial Instruments: Recognition and Measurement

(e) Amendments to FRS 7 - Financial Instruments: Disclosures. Amendment relating to financial assets

(f) Amendment to FRS 8 - Operating Segments. Amendment relating to disclosure information about segment assets

(g) Amendment to FRS 107 - Statement of Cash Flows. Amendment relating to classification of expenditure on unrecognised assets.

(h) Amendments to FRS 108 - Accounting Policies, Changes in Accounting Estimates and Errors. Amendment relating to selection and application of accounting policies

(i) Amendments to FRS 110 - Events After the Reporting Period. Amendment relating to reason for dividend not recognised as a liability at the end of the reporting period.

(j) Amendment to FRS 116 - Property, Plant and Equipment. Amendment relating to derecognition of asset

(k) Amendment to FRS 118 - Revenue. Amendment relating to Appendix of this standard and recognition and measurement

(l) Amendment to FRS 119 - Employee Benefits. Amendment relating to definition, curtailment and settlements

(m) Amendment to FRS 127 - Consolidated and Separate Financial Statements. Amendments relating to cost of an investment in a subsidiary, jointly controlled entity or associate

(n) Amendment to FRS 132 - Financial Instruments: Presentation. Amendment relating to effective date and transition

(o) Amendment to FRS 134 - Interim Financial Reporting. Amendment relating to disclosure of earnings per share

(p) Amendment to FRS 136 - Impairment of assets. Amendment relating to the disclosure of recoverable amount

(q) Amendment to FRS 138 - Intangible assets. Amendment relating to recognition of an expense

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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(r) Amendment to FRS 139 - Financial Instruments: Recognition and Measurement. Amendment relating to eligible hedged items, reclassification of financial assets and embedded derivatives

(s) IC Interpretation 10 - Interim Financial Reporting and Impairment

Adoption of the above standards did not have any material effect on the financial performance or position of the Group and the Company except for the following:-

FRS 7 Financial Instruments: DisclosuresPrior to 1 April 2010, information about financial instruments was disclosed in accordance with the requirements of FRS 132 Financial Instruments: Disclosure and Presentation. FRS 7 requires the disclosure of information about the significance of financial instruments for the Group’s and the Company’s financial position and performance, the nature and extent of risks arising from financial instruments and the objectives, policies and processes for managing capital.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions. Hence, the new disclosures have not been applied to the comparatives. The new disclosures are included throughout the Company’s financial statements for the financial year ended 31 March 2011.

FRS 101 Presentation of Financial Statements (Revised)The revised FRS 101 introduces changes in the presentation and disclosures of financial statements. The Standard introduces the statement of comprehensive income, with all items of income and expense recognised in profit or loss, together with all other items of recognised income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Group and the Company have elected to present this statement as one single statement.

A statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the classification of items in the financial statements. The revised FRS 101 also requires the Group and the Company to make new disclosures to enable users of the financial statements to evaluate the Group’s and the Company’s objectives, policies and processes for managing capital.

The revised FRS 101 was adopted retrospectively by the Group and the Company.

FRS 139 Financial Instruments: Recognition and MeasurementFRS 139 establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group and the Company have adopted FRS 139 prospectively on 1 April 2010 in accordance with the transitional provisions. Any effects arising from the adoption of this Standard will be accounted for by adjusting the opening balance of accumulated losses as at 1 April 2010. Comparatives are not restated. The details of the changes in accounting policy and the effects arising from the adoption of FRS139 are discussed below:

• Impairment of trade receivablesPrior to 1 April 2010, allowance for doubtful debts was recognised when it was considered uncollectible. Upon the adoption of FRS 139, an impairment loss is recognised when there is objective evidence that an impairment loss has been incurred. The amount of the loss is measured as the difference between the receivable’s carrying amount and the present value of the estimated future cash flows discounted at the receivable’s original effective interest rate.

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

41

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.2 Adoption of New and Revised Financial Reporting Standards (“FRSs”) (cont’d)

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4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)4.2 Adoption of New and Revised Financial Reporting Standards (“FRSs”) (cont’d)The following are standards and IC Interpretations which are not yet effective and have not been early adopted by the Group and the Company:-

Effective for financial periods beginning on or after 1 July 2010(a) FRS 1 - First-time Adoption of Financial Reporting Standards (b) Amendments to FRS 2 - Share Based Payment. Amendments relating to the scope of

the Standard(c) FRS 3 - Business Combinations (Revised)(d) Amendments to FRS 5 - Non-Current Assets Held for Sale and Discontinued

Operations. Amendment relating to the inclusion of non-current assets as held for distribution to owners in the standard

(e) FRS 127 - Consolidated and Separate Financial Statements(f) Amendments to FRS 138 - Intangible assets. Amendments relating to the revision to FRS 3(g) Amendments to IC

Interpretation 9- Reassessment of Embedded Derivatives. Amendments

relating to the scope of the IC and revision to FRS 3(h) IC Interpretation 12 - Service Concession Arrangements(i) IC Interpretation 15 - Agreements for the Construction of Real Estate(j) IC Interpretation 16 - Hedges of a Net Investment in a Foreign Operation(k) IC Interpretation 17 - Distributions of Non-cash Assets to Owners

Effective for financial periods beginning on or after 1 January 2011:-(a) Amendments to FRS 1 - Limited Exemption from Comparative FRS 7 Disclosures

for First time Adopters. Amendment relating to transition provisions for first-time adopter

(b) Amendments to FRS 1 - Additional Exemptions for First-time Adopters. Amendments relating to exemptions for entities in the oil and gas industry and those with leasing contracts

(c) Amendments to FRS 1 - First-time Adoption of Financial Reporting Standards. Amendments relating to accounting policy changes in the year of adoption, revaluation basis as deemed cost and use of deemed cost for operations subject to rate regulation

(d) Amendments to FRS 2 - Group cash-settled share-based Payment Transactions. Amendments to prescribe the accounting treatment for share-based payment transaction

(e) Amendments to FRS 3 - Business Combinations. Amendments relating to measurement of non-controlling interests and un-replaced and voluntarily replaced share-based payment awards

(f) Amendments to FRS 7 - Improving Disclosures about Financial Instruments. Amendments relating to the fair value measurement using fair value hierarchy and disclosure of liquidity risk

(g) Amendments to FRS 7 - Financial Instruments: Disclosures. Amendments relating to classification of disclosures and transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised FRS

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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(h) Amendments to FRS 101 - Presentation of Financial Statements. Amendment relating to clarification of statement of changes in equity

(i) Amendments to FRS 121 - The Effects of Changes in Foreign Exchange Rates. Amendment relating to transition requirements for amendments arising as a result of FRS 127

(j) Amendment to FRS 128 - Investment in Associates. Amendment relating to transition requirements for amendments arising as a result of FRS 127

(k) Amendment to FRS 131 - Interests in Joint Ventures. Amendment relating to transition requirements for amendments arising as a result of FRS 127

(l) Amendment to FRS 132 - Financial Instruments: Presentation. Amendment relating to transition requirements for contingent consideration from a business combination that occurred before the effective date of revised FRS 3

(m) Amendment to FRS 134 - Interim Financial Reporting. Amendment relating to significant events and transactions

(n) Amendment to FRS 139 - Financial Instruments: Recognition and Measurement. Amendment relating to transition requirements for contingent consideration from a business combination that occurred before the effective date of revised FRS 3

(o) IC Interpretation 4 - Determining whether an Arrangement contains a Lease

(p) Amendments to IC Interpretation 13

- Fair value of award credits

(q) IC Interpretation 18 - Transfer of Assets from Customers

Effective for financial periods beginning on or after 1 July 2011

(a) Amendment to IC Interpretation 14

- Prepayments of A Minimum Funding Requirement

(b) IC Interpretation 19 - Extinguishing Financial Liabilities with Equity Instruments

Effective for financial periods beginning on or after 1 January 2012

(a) FRS 124 - Related Party Disclosures (Revised)

(b) Amendment to IC Interpretation 15

- Agreements for the Construction of Real Estate

The existing FRS 1, FRS 3, FRS 127 as well as FRS 2012004 - Property Development Activities will be withdrawn upon the adoption of the new requirements that take effect on 1 July 2010 and 1 January 2012 respectively. IC Interpretation 8 and 11 shall be withdrawn on application of Amendments to FRS 2 effective for the accounting period beginning on or after 1 January 2011.

All the above Amendments, IC Interpretations and FRS except for FRS 124, Amendments to FRS 7 and 101 are not expected to be relevant to the operations of the Company. The Directors anticipate that the adoption of those applicable FRS and amendments to FRS will have no material impact on the financial statements of the Company in the period for initial application except for the followings:-

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)4.2 Adoption of New and Revised Financial Reporting Standards (“FRSs”) (cont’d)

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FRS 124 Related Party Disclosures (Revised)The revised standard modifies the definition of a related party and simplifies disclosures for government-related entities. The disclosure exemptions introduced in the standard do not affect the Group and the Company because the Group and the Company are not government-related entities. However, disclosures regarding related party transactions and balances in these consolidated financial statements may be affected when the revised standard is applied in future accounting periods because some counterparties that did not previously meet the definition of a related party may come within the scope of such standard.

4.3 Significant accounting estimates and judgementsEstimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s accounting policies and reported amounts of assets, liabilities, income, expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual result may differ from these estimates. Key sources of estimation uncertaintyThe key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:-

Income tax/deferred tax liabilitiesSignificant judgement is involved in determining the Group’s and the Company’s provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise tax liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made. Deferred tax assetsDeferred tax assets are recognised for all deductible temporary differences, unutilised tax losses, unabsorbed capital allowances and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unutilised tax losses and unabsorbed capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

Depreciation of property, plant and equipmentProperty, plant and equipment are depreciated in a straight-line basis over their useful life. Management estimated the useful life of these assets to be within 2 to 10 years. Changes in the expected level of usage and technological developments could impact the economic useful life and the residual values of these assets, therefore future depreciation charges could be revised.

Amortisation of development costsThe development costs are amortised over the estimated life span of the developed assets which is estimated to be within 10 years. Changes in the technological developments could impact the economic useful life and the residual values of these assets, therefore future amortisation charges could be revised.

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.2 Adoption of New and Revised Financial Reporting Standards (“FRSs”) (cont’d)

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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Key sources of estimation uncertainty (cont’d)

Amortisation of other intangible assetThe hotel application software is amortised over the estimated life span of the software which is estimated to be within 5 years. Changes in the technological developments could impact the economic useful life and the residual values of this asset, therefore future amortisation charges could be revised.

Impairment of non-financial assetsThe Directors assess whether the carrying amount of its non-financial assets are impaired at each reporting date. This involves measuring the recoverable amounts based on the fair value less costs to sell or value in use of these assets.

Fair value less costs to sell is determined based on available published third party information or contractual value in agreements entered into by the Group or the Company.

Allowance for impairmentAllowance for impairment is determined using a combination of factors, including the overall quality and aging of receivables, continuing credit evaluation of the customers’ financial strength and collateral requirements from customers in certain circumstances. The Directors make allowance for impairment based on its best estimates at the reporting date.

4.4 Basis of consolidationThe Group’s financial statements consolidate the audited financial statements of the Company and all of its subsidiary companies, which have been prepared in accordance with the Group’s accounting policies.

All intercompany transactions, balance and unrealised gains on transactions between group of companies are eliminated; unrealised losses are also eliminated on consolidation unless the cost cannot be recovered.

The financial statements of the Company and its subsidiary companies are all drawn up to the same reporting date.

The acquisition of Ingenuity Microsystems Sdn. Bhd. has been accounted for using the merger method of accounting and the acquisition of Reliance Computer Centre Sdn. Bhd. (“RCC”) has been accounted for using the purchase method of accounting.

Under the merger method of accounting, the results of subsidiary company are accounted on a full year basis irrespective of the date of merger. The difference between the nominal value of shares issued as consideration for the merger and the nominal value of shares received will be adjusted against reserves.

Under the purchase method of accounting, the cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.

Any excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill.

Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income on the date of acquisition.

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.3 Significant accounting estimates and judgements (cont’d)

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its net assets together with any unamortised or unimpaired balance of goodwill on acquisition and exchange differences.

4.5 Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses, if any. Depreciation on property, plant and equipment is computed on the straight line method so as to write off the cost of the assets over the estimated useful life of the property, plant and equipment concerned.

The principal annual rates used are as follows:-Computer and office equipment 10% - 50%Furniture and fittings 10%Motor vehicles 20% Office renovation 10% - 20%Data processing equipment and applications 10% - 20%

Restoration cost relating to an item of the property, plant and equipment is capitalised only if such expenditure is expected to increase the future benefits from the existing property, plant and equipment beyond its previously assessed standard of performance.

Property, plant and equipment are written down to recoverable amount if, in the opinion of the Directors, it is less than their carrying value. Recoverable amount is the net selling price of the property, plant and equipment i.e. the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing par-ties, less the costs of disposal.

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

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 included in the state-ments of comprehensive income in the financial year the asset is derecognised.

4.6 Subsidiary companiesA subsidiary company is a company in which the Company has a long term equity interest of more than 50 percent and/or where it exercises control by management participation through Board of Directors’ representation.

Investment in subsidiary companies is stated at cost. Where an indication of impairment exists, the carrying amount of the subsidiary companies is assessed and written down immediately to their recoverable amount.

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.4 Basis of consolidation (cont’d)

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.7 Research and development costsExpenditure on research activities is recognised as an expense in the year in which it incurred.

Development cost are expensed in the year in which they are incurred except when the cost incurred on development project are recognised as development assets to the extent that such expenditure is expected to generate future economic benefits.

Development cost initially recognised as an expense is not recognised as an asset in subsequent periods.

Capitalised development cost, considered to have finite useful life, is amortised over the estimated life span of the developed assets which is estimated to be within 10 years based on the following formula:-

Cumulative revenue to date x Cumulative actual - AccumulatedProjected total revenue of the development amortisation developed assets expenditure at beginning of year

The amortisation commences from the time when the product is available for sale and assessed for impairment whenever there is an indication that the development cost may be impaired. Should the product or project be aborted, the relative expenditure will be charged to the statements of comprehensive income in the year in which such decision is made.

The amortisation period and the amortisation method for the development cost with a finite useful life are reviewed at least at each financial year end.

The amortisation expense on development cost with finite useful life is recognised in the statements of comprehen-sive income in the cost of sales category.

4.8 Other intangible assetIntangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated impairment loss. The useful lives of intangible assets are indefinite and are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. The useful life of an intangible asset with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable.

Further expenditure to maintain or improve the standard of performance of the intangible assets will be recognised as an expense in the statements of comprehensive income in the year in which it incurred.

Prior to 1 April 2009, hotel application software which is regarded as having an indefinite useful life was stated at cost less any impairment losses. Impairment is assessed whenever there is an indication that the intangible asset may be impaired. However, as the market for software business solutions is highly competitive and unpredictable, and after the analysis of all of the intangible asset, the intangible asset is amortised using the straight-line basis in order to write off the cost of the intangible asset over its estimated useful live at the annual rate of 20%.

4.9 MSC research grantThe MSC research grant for the development of software and system design are treated as reimbursement to development costs incurred and deducted from the product development costs incurred.

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.10 Impairment of non-financial assetsAt each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication of impairment.

If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount is estimated and an impairment loss is recognised whenever the recoverable amount of the asset or a cash-generating unit is less than its carrying amount. Recoverable amount of an asset or a cash-generating unit is the higher of its fair value less cost to sell and its value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the statement of comprehensive income in those expense categories consistent with the function of the impaired asset.

Any impairment loss is charged to the statement of the comprehensive income immediately.

Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation) had no impairment loss been recognised. The reversal is recognised in the statement of comprehen-sive income immediately.

4.11 Financial assetsFinancial assets are recognised in the statement of financial position when, and only when the Group or the Company becomes a party to the contractual provisions of the financial instrument. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition.

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. Gains and losses are recognised in profit or loss when the receivables are derecognised or impaired, and through the amortisation process.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

4.12 InventoriesInventories are stated at the lower of cost and net realisable value. Cost of inventories is determined on first-in-first-out basis. Cost of trading goods include cost of purchases plus all costs incurred in bringing the inventories to their present location and condition.

Net realisable value represents the estimated selling price in the ordinary course of business less estimated selling and distribution costs.

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)4.13 Impairment of financial assetsThe Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtors and default or significant delay in payments. Objective evidence of impairment for a portfolio of receivables could include the Group and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced through the use of an allowance account. When a receivable becomes uncollectible, it is written off against the allowance account.

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

4.14 Cash and cash equivalentsCash and cash equivalents comprise cash in hand, cash at bank and short-term demand deposits and highly liquid investments which are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

4.15 ProvisionsProvisions are recognised when there is a present obligation (legal or constructive), as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

4.16 Financial liabilitiesFinancial liabilities are recognised in the statement of financial position when, and only when the Group or the Company becomes a party to the contractual provisions of the financial instrument.

The Group’s and the Company’s financial liabilities consist of trade payables and other payables. Trade payables and other payables are recognised initially at fair value plus directly attributable transaction costs and subse-quently measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. A financial liability is derecog-nised when the obligation under the liability is extinguished.

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)4.17 Revenue recognitionRevenue from sale of goods and services are recognised as income, net of discount and goods return in the statements of comprehensive income upon delivery of goods and when services are rendered.

Interest income is recognised on time proportion basis, taking into account the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the Group or the Company.

4.18 Foreign currency transactions and translationsTransactions in foreign currencies are recorded in Malaysian Ringgit at rates of exchange ruling at the date of the transactions. Foreign currency monetary assets and liabilities are translated at exchange rates ruling as at reporting date.

Gains and losses from conversion of assets and liabilities, whether realised or unrealised, are included in the statements of comprehensive income as they arise.

4.19 Employee benefits

(i) Short term employee benefitsWages, salaries, bonuses and social security contributions are recognised as expense in the financial year in which the associated services are rendered by the employees of the Company. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by the employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occurred.

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

Such contributions are recognised as expenses in the statements of comprehensive income as incurred. As required by law, the Group makes such contributions to the Employees Provident Fund (“EPF”).

4.20 Income taxIncome tax on the profit or loss for the financial year comprises current tax. Current tax expenses are the expected amount of income taxes payable in respect of the taxable profit for the financial year and are measured using the tax rates that have been enacted by the reporting date.

Deferred tax liabilities and assets are provided for under the liability method in respect of all temporary differences at the reporting date between the carrying amount of an asset or liability in the reporting and its tax base including unabsorbed tax losses and unutilised capital allowances.

Deferred tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or that entire deferred tax assets to be utilised, the carrying amount of the deferred tax assets will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profit.

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)4.20 Income tax (cont’d)Deferred tax is recognised in the statements of comprehensive income, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity.

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 that have been enacted or substantively enacted by the reporting date.

4.21 Equity instrumentsOrdinary shares are classified as equity which are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Dividends on ordinary shares are recognised in equity in the year in which they are declared.

The transaction costs of an equity transaction which comprise only those incremental external costs directly attributable to the equity transaction are accounted for as a deduction from equity, net of tax, from the proceeds.

4.22 Segmental resultsIn the previous years, a segment was a distinguishable component of the Group that was engaged in providing services (business segment), or in providing services within particular economic environmental (geographical segment) which was subject to risks and rewards that were different from those of other segments.

Following the adoption of FRS 8, Operating Segments, an operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

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

4.24 Related partiesA party is related to an entity if:-(i) directly or indirectly through one or more intermediaries, the party:-

(1) controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);

(2) has an interest in the entity that gives it significant influence over the entity; or(3) has joint control over the entity;

(ii) the party is an associate of the entity;(iii) the party is a joint venture in which the entity is a venturer;(iv) the party is a member of the key management personnel of the entity or its parent;(v) the party is a close member of the family of any individual referred to in (i) or (iv);

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or

(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity.

Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.

5. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION The Company is principally engaged in investment holding.

The principal activities of the subsidiary companies are disclosed in Note 7 to the Financial Statements.

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

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

The registered office of the Company is located at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur.

The principal places of business of the Company is located at Tower M, Warisan Cityview, 18-8, 8th Floor, Jalan Cheras, 56100 Kuala Lumpur.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors passed on 22 July 2011.

6. PROPERTY, PLANT AND EQUIPMENT

Group

Computer and office equipment

RM

Furniture, fittings andrenovation

RM

Motorvehicles

RM

Dataprocessing

equipment andapplications

RMTotalRM

CostBalance as at 1 April 2009 1,909,107 1,514,465 235,566 2,185,361 5,844,499Additions 8,336 - - - 8,336Disposals - (107,629) - - (107,629)

Balance as at 31 March 2010 1,917,443 1,406,836 235,566 2,185,361 5,745,206Additions 2,607 - - - 2,607Disposals - - (52,791) - (52,791)

Balance as at 31 March 2011 1,920,050 1,406,836 182,775 2,185,361 5,695,022

4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.24 Related parties (cont’d)

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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7. INVESTMENT IN SUBSIDIARY COMPANIES

Company

2011RM

2010RM

Unquoted shares, at cost 9,885,232 9,885,230Less: Allowance for impairment (3,461,418) (3,461,418)

6,423,814 6,423,812

The particulars of the subsidiary companies are as follows:-

Name of company Place ofincorporation Effective interest Principal activities

2011%

2010%

Ingenuity MicrosystemsSdn. Bhd.

Malaysia 100 100 Consultant, adviser, manager, researcher, trainer and total solution provider in all aspect of information technology, including the business of marketing and distribution of multimedia products and accessories.

Reliance Computer Centre Sdn. Bhd*

Malaysia 100 100 Marketing of computer hardware and software for business solutions.

Uptown Excel Sdn.Bhd. Malaysia 100 - Dormant

* Subsidiary company not audited by SJ Grant ThorntonAmount due from subsidiary companies is non-trade in nature, unsecured, bears no interest and repayable on demand.

Accumulated depreciationBalance as at 1 April 2009 1,858,490 1,136,522 221,666 1,091,942 4,308,620Charge for the year 38,954 124,858 7,508 215,368 386,688Disposals - (57,256) - - (57,256)

Balance as at 31 March 2010 1,897,444 1,204,124 229,174 1,307,310 4,638,052Charge for the year 13,379 76,175 5,900 182,272 277,726Disposals - - (52,791) - (52,791)

Balance as at 31 March 2011 1,910,823 1,280,299 182,283 1,489,582 4,862,987

Net carrying amount31 March 2011 9,227 126,537 492 695,779 832,03531 March 2010 19,999 202,712 6,392 878,051 1,107,154

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

Group

Computer and office equipment

RM

Furniture, fittings andrenovation

RM

Motorvehicles

RM

Dataprocessingequipment

andapplications

RMTotalRM

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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8. INTANGIBLE ASSETSGroup

2011RM

2010RM

Development costs 6,998,507 7,456,374Other intangible asset – Hotel application software 168,000 336,000

7,166,507 7,792,374i) Development costs

Development costs 17,370,496 17,370,496Less: Multimedia Super Corridor grants received (1,686,985) (1,686,985)

15,683,511 15,683,511Less: Accumulated amortisation (5,643,047) (5,185,180)Less: Accumulated impairment loss (3,041,957) (3,041,957)

6,998,507 7,456,374

The management of the Group carried out a review of the recoverable amount of its development costs during the financial year.

The recoverable amount for the above was based on its value-in-use and was determined by discounting the future cash flows generated from the continuing use of those units and was based on the following key assumptions:-

i) Cash flows were projected based on actual operating results and 5 years business plan; ii) Revenue was projected at anticipated annual average revenue growth rate of 62% (2010: 62%)

per annum;iii) Expenses were projected at annual increase of approximately 10% (2010: 10%) per annum; andiv) A pre-tax discount rate of 8% (2010: 6.5%) was applied in determining the recoverable amount of

the unit.

The values assigned to the key assumptions represent management’s assessment of future trends in the industry. A reasonable possible change in a key assumption does not have any significant to the recoverable amount.

ii) Hotel application software

Group

2011RM

2010RM

Software cost 420,000 420,000Less: Accumulated amortisation (252,000) (84,000)

Balance as at 31 March 168,000 336,000

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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9. INVENTORIESGroup

2011RM

2010RM

At net realisable value:-

Trading goods 48,751 206,812

10. TRADE RECEIVABLESGroup

2011RM

2010RM

Trade receivables 3,238,276 1,901,800Less: Allowance for impairment At 1 April (229,030) (182,871) Impairment loss recognised (105,509) (229,030) Impairment loss reversed 229,030 182,871

At 31 March (105,509) (229,030)

3,132,767 1,672,770

Included in trade receivables is an amount of RM166,661 (2010: RM371,724) due from companies in which certain Directors have interest.

The normal trade credit terms granted by the Group to the trade receivables range from 30 days to 90 days (2010: 30 days to 90 days).

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables are as follows:-

31.3.2011Gross

RMIndividually impaired

RMNetRM

Not past due 2,077,357 - 2,077,357Past due 0 - 30 days 70,381 - 70,381Past due 31 - 60 days 119,867 - 119,867More than 61 days 970,671 (105,509) 865,162

3,238,276 (105,509) 3,132,767

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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The Group has trade receivables amounting to RM1,055,410 that are past due at the reporting date but not impaired. These relate to a number of independent customers for whom there is no record history to defaults.

The Group’s policy is to make full impairment for all trade receivables that are in dispute, under legal action or where recoveries are considered to be doubtful.

The net carrying amount of trade receivables is considered a reasonable approximate of fair value. The maximum exposure to credit risk is the carrying value of each class of receivables mentioned above. Trade receivables that are individually determined to be impaired at the 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.

11. OTHER RECEIVABLESGroup

2011RM

2010RM

Deposits 65,660 70,096Prepayments 3,316 3,634Tax recoverable 20,000 18,326Non-trade receivables 13,618 72,158

102,594 164,214

In 2010, included in Group’s other receivables is an amount of RM13,152 due from a company in which certain Directors have interest.

12. FIXED DEPOSITS WITH A LICENSED BANK AND CASH AND BANK BALANCES

Group and Company

Fixed deposits with a licensed bank bear interest at 2.75% (2010: 2.25%) per annum.

Currency exposure profile of cash and bank balances is as follows:-

Group and Company

2011RM

2010RM

US Dollar 21,438 30,400

10. TRADE RECEIVABLES (CONT’D)Ageing analysis of trade receivables (cont’d)

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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14. RESERVESGroup Company

2011RM

2010RM

2011RM

2010RM

Non-distributable Share premium 12,863,396 12,715,113 12,863,396 12,715,113 Merger deficit (7,900,000) (7,900,000) - -

4,963,396 4,815,113 12,863,396 12,715,113

Accumulated losses (7,510,582) (6,100,071) (7,024,722) (6,720,942)

(2,547,186) (1,284,958) 5,838,674 5,994,171

15. DEFERRED TAXATIONGroup

2011RM

2010RM

Brought forward 7,084 114,213Transferred to statements of comprehensive income (7,084) (107,129)

Carried forward - 7,084

The deferred taxation represents the tax effects of the excess of carrying value of property, plant and equipment over their tax base.

13. SHARE CAPITALGroup and Company

NumberGroup and Company

Amount2011RM

2010RM

2011RM

2010RM

Authorised:- Ordinary shares of RM0.10 each 250,000,000 250,000,000 25,000,000 25,000,000

Issued and fully paid:- Ordinary shares of RM0.10 each At beginning of the year 132,352,320 132,352,320 13,235,232 13,235,232 Issued during the year 13,235,200 - 1,323,520 -

At end of the year 145,587,520 132,352,320 14,558,752 13,235,232

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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16. TRADE PAYABLESThe normal trade credit terms granted by the trade payables range from 30 days to 90 days (2010: 30 days to 90 days).

17. OTHER PAYABLESGroup Company

2011RM

2010RM

2011RM

2010RM

Non-trade payables 31,711 34,189 1,140 -Accrual of expenses 52,051 83,196 10,000 30,654

83,762 117,385 11,140 30,654

18. REVENUE AND COST OF SALESRevenue of the Group consists of gross invoiced value of sales of information system development and system implementations, computer hardware and software and other related products, net of discounts and returns. Included in cost of sales of the Group is the amortisation of development cost during the financial year which amounted to RM625,867 (2010: RM277,621).

19. LOSS BEFORE TAX Loss before tax has been determined after charging/(crediting), amongst others, the following items:-

Group Company

2011RM

2010RM

2011RM

2010RM

Allowance for impairment of investment in subsidiary companies - - - 1,646,803Allowance for impairment loss on receivables 105,509 229,030 - -Allowance for slow moving inventories 32,033 88,954 - -Amortisation of intangible assets 625,867 277,621 - -Auditors’ remuneration - auditors of the Company 33,000 24,000 18,000 14,000 - other auditors 5,000 4,500 - -Bad debts written off 203,711 171,175 - -Depreciation 277,726 386,688 - -Directors’ remuneration - fees 35,500 30,000 35,500 30,000 - other emoluments 180,547 252,368 17,000 32,000

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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Group Company2011RM

2010RM

2011RM

2010RM

Inventories written off 137,502 - - -Rental of premises 95,669 179,691 19,980 37,421Rental of equipment 5,841 1,800 - -Realised foreign exchange loss - 112 - -Impairment on development costs - 1,182,052 - -Allowance for impairment loss on receivables no longer required (229,030) (182,871) - -Allowance for slow moving inventories no longer required (99,138) - - -Interest income (24,194) (23,991) (24,194) (23,019)(Gain)/loss on disposal of property, plant and equipment (22,400) 373 - -

The details of remuneration receivable by Directors of the Group and of the Company during the financial year were as follows:-

Group Company

2011RM

2010RM

2011RM

2010RM

Executive:- Fees 35,500 30,000 35,500 30,000 Salaries and other emoluments 176,707 232,400 17,000 32,000 Defined contribution plan 3,840 19,968 - -

216,047 282,368 52,500 62,000

19. LOSS BEFORE TAX (CONT’D)

20. TAX INCOMEGroup Company

2011RM

2010RM

2011RM

2010RM

Provision for the financial year - - - -Under/(over) provision in prior financial year 243 (2,526) - -Transfer from deferred taxation (7,084) (107,129) - -

(6,841) (109,655) - -

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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Malaysian income tax rate is calculated at the statutory tax rate of 25% (2010: 25%) of the estimated assessable profits for the financial year.

There was no provision for taxation for the current financial year as the Group and the Company have no chargeable income.

A reconciliation of income tax expense applicable to loss before tax at the statutory income tax rate to income tax expense at the effective tax rate of the Group and of the Company are as follows:-

Group Company

2011RM

2010RM

2011RM

2010RM

Loss before tax (1,417,352) (3,430,709) (303,780) (1,914,093)

Taxation at Malaysian statutory tax rate (354,338) (857,677) (75,945) (478,523)

Tax effects in respect of:-Expenses not deductible for tax purposes 2,688 3,466 - -Under/(over) provision in prior financial year 243 (2,526) - -Deferred tax assets not recognised during the year 344,566 747,082 75,945 478,523

Effective tax expense (6,841) (109,655) - -

The Group’s unabsorbed capital allowances and unutilised tax losses which can be carried forward to offset against future taxable profit amounted to approximately RM2,352,000 (2010: RM2,328,000) and RM11,006,000 (2010: RM10,623,000) respectively.

However, the above amounts are subject to the approval of the Inland Revenue Board of Malaysia.

21. LOSS PER SHARE (BASIC)The basic loss per share for the financial year has been calculated based on the Group’s net loss for the financial year of RM1,410,511 (2010: RM3,321,054) and the weighted average number of shares in issue as at year end of 133,113,797 (2010: 132,352,320). The weighted average number of additional shares issued during the financial year is 761,477 (2010: Nil).

Diluted loss per share is not presented as there is no potential dilutive ordinary share.

20. TAX INCOME (CONT’D)

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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22. DEFERRED TAX ASSETSThe tax effects of temporary differences that would give rise to future benefits are generally recognised only when there is a reasonable expectation of realisation. As at 31 March 2011, the temporary differences for which no deferred tax assets have been recognised in the financial statements are as follows:-

Group

2011RM

2010RM

Carrying amount of property, plant and equipment in excess of their tax base 734,000 864,000Unabsorbed capital allowances (2,352,000) (2,328,000)Unutilised tax losses (11,006,000) (10,623,000)Others (140,000) (332,000)

(12,764,000) (12,419,000)

The potential deferred tax assets are not recognised in the financial statements as the group has a recent history of losses.

23. EMPLOYEE BENEFITS EXPENSE

Group Company

2011RM

2010RM

2011RM

2010RM

Salaries 881,355 1,249,712 106,900 21,253Defined contribution plans 96,293 135,311 12,876 1,476Social security contributions 7,026 12,659 - -Other staff related expenses 114,429 197,449 2,400 1,200

1,099,103 1,595,131 122,176 23,929

24. RELATED PARTY DISCLOSURES(a) The transactions of the Group with the related parties which entered on a negotiated basis were as follows:-

Group

2011RM

2010RM

Rental expense paid to a company in which certain Directors have interest - 44,000Rental expenses paid to companies in which certain shareholders have interest 27,268 46,030Revenue from companies in which certain Directors have interest 478,401 650,854Revenue from a company in which a Director has interest - 213,300

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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24. RELATED PARTY DISCLOSURES (CONT’D)(b) The remuneration of key management personnel is the same with Directors’ remuneration as

disclosed in Note 19 to the Financial Statements. The Group and the Company have no other members of key management personnel apart from the Board of Directors.

(c) The outstanding balances arising from related party transactions as at reporting date were disclosed in Note 7, 10 and 11 to the Financial Statements.

25. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR(i) On 29 March 2011, Ingenuity Solutions Berhad, acquired two (2) ordinary shares of RM1.00 each

representing 100% equity interest in Uptown Excel Sdn. Bhd. for a total consideration of RM2.00.

(ii) On 1 April 2011, Ingenuity Microsystems Sdn Bhd, a wholly-owned subsidiary of Ingenuity Solutions Berhad, acquired two (2) ordinary shares of RM1.00 each representing 100% equity interest in Austral Diversified Sdn. Bhd. for a total consideration of RM2.00.

(iii) On 8 April 2011, Ingenuity Solutions Berhad acquired two (2) ordinary shares of RM1.00 each representing 100% equity interest in Hallmark Avenue Sdn Bhd for a total consideration of RM 2.00.

(iv) On 5 May 2011, Austral Diversified Sdn. Bhd.(“ADSB”) executed a collaboration agreement with Advance Healthcare Information Systems Sdn. Bhd. (“AHIS”) and Advance Health Care Solutions AG (“AHCS”), to jointly collaborate in proposing to Malaysian Ministry of Health (‘MOH”) on the initiative to implement an Integrated Hospital Information System (“HIS”) (“Collaboration Agreement”).

The objective of the initiative is to implement a common hospital information system platform for all hospitals and clinics which will enable hospitals and clinics to operate with great improvement of efficiency and creation of centralised lifetime health record for Malaysian citizens.

The initiative is jointly developed in collaboration with a well proven HIS solution provider in the world, AHCS. The said HIS solution has more than 22 years of well proven track record with implementation in more than 170 sites throughout countries such as Austria, Germany, Italy, Russia, Slovenia, Thailand and Malaysia. AHCS is an Austrian based company providing the HIS technology. AHIS is the local implementation partner for HIS solution. ADSB will be the system integrator for the HIS project and shall front all liaisons with MOH and any other relevant authorities.

(v) On 6 May 2011, Ingenuity Solutions Bhd (“ISB”) has incorporated a wholly-owned subsidiary company, Ingenuity Care Sdn. Bhd. (“ICSB”) under the Companies Act,1965.

(vi) On 12 May 2011, Ingenuity Solutions Berhad (“ISB”) executed a Memorandum of Understanding (‘MOU”) with Ingens Network Sdn. Bhd. (formerly known as RCG Network Sdn. Bhd.) (“INSB”) to explore the potential synergy of working together to expand into IT hardware and software distribution business.

It gives the exclusive rights for both companies to explore the potential working together, to synergise and create more shareholder value to both companies. The MOU shall be valid for 6 months from the date of the MOU (“Validity Period”).

Both parties shall aim to enter into definite agreement within the Validity Period. In the event any party does not wish to continue on discussion by the end of the Validity Period, the MOU shall ipso facto cease and no further claims against any other party.

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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(vii) On 22 July 2011, Ingenuity Solutions Berhad (“ISB”) announced that the Company has terminated the MOU with INSB and has on the even date, entered into a Heads of Agreement (“HOA”) for the proposed acquisition of 100 ordinary shares of RM1.00 each in Vistavision Resources Sdn Bhd (“VVR”), the holding company of INSB, representing the entire issued and paid-up share capital of VVR, for an indicative purchase consideration of RM15,452,000 to be satisfied via the issuance of 154,520,000 new ordinary shares of RM0.10 each in ISB.

(viii) On 1 April 2011, Hong Leong Investment Bank Berhad (“HLIB”) on behalf of the Board of Directors of Ingenuity Solutions Berhad (“ISB”) announced that the Company proposes to undertake the following:

(a) Proposed renounceable right issue of up to 291,175,040 new ordinary shares of RM0.10 each in ISB (“Right Shares”) on the basis of two (2) Rights Shares for every one (1) existing ordinary share of RM0.10 each held in ISB (“ISB Shares” or “Shares”) together with up to 218,381,280 free detachable warrants (“Warrants”) on the basis of three (3) Warrants for every four (4) Rights Shares subscribed on an entitlement date to be determined later (“Proposed Rights issue with Warrants”);

(b) Proposed establishment of an employees’ share option scheme (“ESOS”) for the eligible employees and directors of ISB and its subsidiary companies (“ISB Group” or “Group”) (“Proposed ESOS”);

(c) Proposed increase in the authorised share capital of the Company from RM25,000,000 comprising 250,000,000 ISB Shares to RM 100,000,000 comprising 1,000,000,000 ISB Shares (“Proposed Increase In Authorised Share Capital”); and

(d) Proposed amendments to the Memorandum and Articles of Association of ISB (“M&A”) (“Proposed M&A Amendments”).

(collectively referred to as the “Proposals”)

Bank Negara via its letter dated 27 April 2011 (which was received on 9 May 2011), approved the application for the issuance of Warrants to non-resident shareholders of ISB pursuant to the Proposed Right Issue with Warrants.

On 11 May 2011, HLIB had, on behalf of the Board, announced that Bursa Securities had, via its letter dated 10 May 2011 approved the following;-

(a) Admission of the Official List and the listing of and quotation of up to 218,381,280 Warrants, to be issued pursuant to the Proposed Rights Issue with Warrants;

(b) Listing of and quotation of up to 291,175,040 new shares, to be issued pursuant to the Proposed Rights Issue with Warrants;

(c) Listing of and quotation of up to 218,381,280 new shares, to be issued pursuant to the exercise of the Warrants; and

(d) Listing of and quotation of up to 65,514,000 new shares, representing up to 10% of the issued and paid up ordinary share capital of ISB, to be issued pursuant to the exercise of options under the Proposed ESOS.

25. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR (CONT’D)

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

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On 6 June 2011, Ingenuity Solutions Berhad’s shareholders had, in an Extraordinary General meeting held on this date, approved the Proposals.

On 9 June 2011, HLIB had, on behalf of the Company, announced that the Board has fixed the issue price of the Rights Shares at RM0.10 per Right Share. On even date, HLIB had, on behalf of ISB, announced that the Board has fixed the exercise price of the Warrants at RM0.10 per Warrant.

On even date, HLIB also on behalf of the Company announced that the Entitlement Date has been fixed on 23 June 2011 at 5.00 p.m. and the other relevant dates pertaining to the Rights Issue with Warrants.

On 22 June 2011, HLIB on behalf of the Company announced that the abridged prospectus in relation to the Rights Issue with Warrants has been duly registered with the Securities Commission and lodged with the Registrar of Companies on 22 June 2011.

On 18 July 2011, HLIB on behalf of the Company announced that at the close of acceptance, excess application and payment for the Rights Issue with Warrants, ISB received total valid acceptances and excess applications for 243,189,716 Rights Shares together with 182,392,287 Warrants. This represents a subscription rate of 83.52% of the total number of 291,175,040 Rights Shares together with 218,381,280 Warrants available for subscription under the Rights Issue with Warrants. As such, the minimum subscription level of 153,664,616 Rights Shares and 115,248,462 Warrants has been met.

(ix) On 22 July 2011, Ingenuity Solutions Berhad (“ISB”) received a legal claim by a third party for alleged billboard advertisement charges totaling RM219,400 together with interest thereon. The case management is fixed on 14 September 2011.

The Directors are of the opinion that no provision is required for the above claim.

26. SEGMENTAL REPORTING – GROUP(a) Business segmentAll business of the Group are generated from information technology segment. (b) Geographical segmentNo geographical segments have been prepared as the Group principally operates in Malaysia.

(c) Major customersThe following are major customers with revenue equal or more than 10% of the Group’s revenue:-

Group

2011RM

2010RM

1 customer (2010: Nil) 812,150 -

NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

25. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR (CONT’D)

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NOTES TO THE FINANCIAL STATEMENTS – 31 MARCH 2011 (cont’d)

27. FAIR VALUES OF FINANCIAL INSTRUMENTSThe carrying amounts of financial assets and liabilities of the Group and of the Company at the reporting date approximate their fair values due to their short-term nature.

28. DISCLOSURE OF REALISED AND UNREALISED LOSSESWith the purpose of improving transparency, Bursa Malaysia Securities Berhad has on 25 March 2010, and subsequently on 20 December 2010, issued directives which require all listed corporations to disclose the breakdown of unappropriated profits or accumulated losses into realised and unrealised on group and company basis in the annual audited financial statements.

The breakdown of accumulated losses as at the reporting date which has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and the Guidance on Special Matter No. 1 - Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants are as follows :

Group Company

2011RM

2011RM

Total accumulated losses of the Group and the Company: - Realised loss (11,286,770) (7,024,722) Consolidation adjustments 3,776,188 -

(7,510,582) (7,024,722)

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

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ANALySIS OF SHAREHOLDINGS -AS AT 15TH AUGUST 2011

Authorised Share Capital : RM100,000,000 divided into 1,000,000,000 ordinary shares of RM0.10 each. Paid-up Share Capital : RM38,877,723.60 divided into 388,777,236 ordinary shares of RM0.10 each.Class of Shares : Ordinary Shares of RM0.10 each fully paidVoting Right : One vote per ordinary share

DISTRIBUTION OF SHAREHOLDINGS

SIZE OF SHAREHOLDINGS NO. OF HOLDERS

TOTAL HOLDINGS

TOTAL HOLDINGS %

Less Than 100 shares 5 273 0.00100 To 1,000 shares 84 64,407 0.021,001 To 10,000 shares 513 3,241,500 0.8310,001 To 100,000 shares 1,110 54,900,200 14.12100,001 To Less Than 5% of issued shares 504 237,718,932 61.155% and above of issued shares 1 92,851,924 23.88

Total 2,217 388,777,236 100.00

SUBSTANTIAL SHAREHOLDERS

Direct Interest Indirect Interest

Shareholders No. of Shares % No. of Shares %

Firstwide Success Sdn. Bhd. 98,496,924 25.34 - -Dato’ Feroz bin A S Moidunny 98,496,924 (1) 25.34Wong Hun Liang - - 98,496,924 (1) 25.34

DIRECTORS’ SHAREHOLDINGS

Direct Interest Indirect Interest

Directors No. of Shares % No. of Shares %

Dato’ Feroz bin A S Moidunny - - 98,496,924 (1) 25.34Wong Hun Liang - - 98,496,924(1) 25.34Tan Sin Chong 20,000 0.01 - -Ahmad Ruslan Zahari Dato’ Dr. Zakaria 110,000 0.03 - -

Note:-(1) Deemed interested by virtue of their direct substantial shareholdings in Firstwide Success Sdn. Bhd.

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ANALySIS OF SHAREHOLDINGS - AS AT 15TH AUGUST 2011 (CONT’D)

THIRTY (30) LARGEST SHAREHOLDERS

NO SHAREHOLDER SHARES %

1. JF APEX NOMINEES (TEMPATAN) SDN BHD(PLEDGED SECURITIES ACCOUNT FOR FIRSTWIDE SUCCESS SDN BHD) 92,851,924 23.88

2. SIVA KUMAR A/L M JEYAPALAN 12,185,200 3.13

3. TECHNOLOGY PARK MALAYSIA CORPORATION SDN BHD 11,485,232 2.95

4. MAYBAN NOMINEES (TEMPATAN) SDN BHD(PLEDGED SECURITIES ACCOUNT FOR NG KIAN BOON) 7,270,000 1.87

5. ECML NOMINEES (TEMPATAN) SDN. BHDPLEDGED SECURITIES ACCOUNT FOR FIRSTWIDE SUCCESS SDN BHD 5,645,000 1.45

6. CIMSEC NOMINEES (TEMPATAN) SDN BHD(PLEDGED SECURITIES ACCOUNT FOR NG KIM SENG) 5,000,000 1.29

7. JF APEX NOMINEES (TEMPATAN) SDN BHD(PLEDGED SECURITIES ACCOUNT FOR JEEVAMALAR A/P KUMARASUBRAMANIAM) 3,850,000 0.99

8. SIVALINGAM A/L VELUPPILLAI 3,800,000 0.98

9. LEE AH YEW 3,800,000 0.98

10.HLG NOMINEE (TEMPATAN) SDN BHD

3,395,900 0.87(PLEDGED SECURITIES ACCOUNT FOR TEH TIAN SOON)

11. TAN KEAN SENG 2,500,000 0.64

12. LING LU KUANG 2,460,000 0.63

13. GOH SEOW KHONG 2,200,000 0.57

14. WONG KWEE KOON 2,200,000 0.57

15. LIM POH FONG 2,171,800 0.56

16. NG SIE LING 2,066,200 0.53

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ANALySIS OF SHAREHOLDINGS - AS AT 15TH AUGUST 2011 (CONT’D)

17. TEOH HIN HENG 2,000,000 0.51

18. LEE CHAI ENG 1,900,000 0.49

19. SIAH GIM SIEW 1,830,000 0.47

20. CHAN BAN HIN 1,800,000 0.46

21. CHAN WENG CHOY 1,800,000 0.46

22. LIM BEE CHENG 1,800,000 0.46

23. KENANGA NOMINEES (TEMPATAN) SDN BHD(PLEDGED SECURITIES ACCOUNT FOR CHONG FOONG MELW) 1,700,000 0.44

24. SUAM CHEE KIT 1,682,200 0.43

25. ZAMRI BIN SULONG 1,600,000 0.41

26. TYE SOK CIN 1,500,000 0.39

27. SIEW WEI SING 1,500,000 0.39

28. TA NOMINEES (TEMPATAN) SDN BHD(PLEDGED SECURITIES ACCOUNT FOR SALEHAH BINTI SULAIMAN) 1,500,000 0.39

29. LEONG KAH FATT 1,404,000 0.36

30. LOH SOOK MEE 1,360,000 0.35

TOTAL 186,257,456 47.91

THIRTY (30) LARGEST SHAREHOLDERS (CONT’D)

NO SHAREHOLDER SHARES %

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ANALySIS OF WARRANTHOLDINGS - AS AT 15TH AUGUST 2011

Issued Size : 182,392,287 warrants 2011/2016No. of Warrant Holders : 787 Warrant holders

DISTRIBUTION OF WARRANTHOLDINGS AS AT 15TH AUGUST 2011

SIZE OF WARRANTHOLDINGS NO. OFWARRANTHOLDERS

HOLDINGS TOTAL HOLDINGS %

Less Than 100 warrant 2 112 0.00100 To 1,000 warrant 2 250 0.001,001 To 10,000 warrant 57 387,175 0.2110,001 To 100,000 warrant 398 23,827,350 13.06100,001 To Less Than 5% of issued warrant 328 158,177,400 86.725% and above of issued warrant - - 0.00

Total 787 182,392,287 100.00

DIRECTORS’ WARRANTHOLDINGS

Direct Interest Indirect Interest

Directors No. of Warrants % No. of Warrants %

Dato’ Feroz bin A S Moidunny - - 62 (1) NegligibleWong Hun Liang - - 62 (1) Negligible

Note:-

(1) Deemed interested by virtue of their direct substantial shareholdings in Firstwide Success Sdn. Bhd., the major shareholder of the Company.

THIRTY (30) LARGEST WARRANT HOLDERSAS AT 15TH AUGUST 2011

NO WARRANTHOLDERS NO. OF WARRANTS %

1. LIU, CHING-AN 7,030,000 3.85 2. AMRAN BIN OTHMAN 5,000,000 2.74 3. ECML NOMINEES (TEMPATAN) SDN. BHD

(PLEDGED SECURITIES ACCOUNT FOR KOH BOON POH) 3,764,000 2.06

4. SIAH GIM SIEW 3,510,000 1.92 5. GAN BOON GUAT 3,289,700 1.80

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NO WARRANTHOLDERS NO. OF WARRANTS %

6. ECML NOMINEES (TEMPATAN) SDN. BHD(PLEDGED SECURITIES ACCOUNT FOR KWONG MING KWEI)

3,000,000 1.64

7. MOHD YASIN BIN MOHD SAID 2,500,000 1.37 8. WONG CHEE LEONG 2,500,000 1.37 9. OSK NOMINEES (ASING) SDN BERHAD

(DMG & PARTNERS SECURITIES PTE LTD FOR ASIA INSIGHT HOLDINGS LIMITED)

2,490,000 1.37

10. MAYBAN NOMINEES (TEMPATAN) SDN BHD(HARIS BIN AHMAD)

2,100,000

1.15

11. SON KAT PEE @ SOIN KAT PEE 2,000,000 1.10 12. LEE LAN KUI 1,900,000 1.04 13. MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHD

(PLEDGED SECURITIES ACCOUNT FOR CHIN TEK MING) 1,801,000 0.99

14. MAYBAN NOMINEES (ASING) SDN BHD(PLEDGED SECURITIES ACCOUNT FOR QIANG YAN)

1,760,000

0.96

15. ONG WEE TIU 1,662,200 0.91 16. ZULCEPLE BIN MOHD SANI 1,500,000 0.82 17. OSK NOMINEES (ASING) SDN BERHAD

(DMG & PARTNERS SECURITIES PTE LTD FOR NOBEL ELITE LIMITED) 1,500,000 0.82

18. LING LU KUANG 1,230,000 0.67 19. CHIA GUAN SENG 1,221,000 0.67 20. MAYBAN NOMINEES (TEMPATAN) SDN BHD

(LIEW CHEE KIONG) 1,020,000 0.56

21. TAN ENG GUAN 1,000,000 0.55 22. CHIN TEK MING 1,000,000 0.55 23. CIMSEC NOMINEES (TEMPATAN) SDN BHD

(CIMB BANK FOR PEK KIAM KEK) 1,000,000

0.55

24. TEOH ENG HOE 1,000,000 0.55 25. TEH BOON KEE 1,000,000 0.55 26. LIM CHEE CHENG 1,000,000 0.55 27. SIEW WEI SING 1,000,000 0.55 28. JF APEX NOMINEES (TEMPATAN) SDN BHD

(PLEDGED SECURITIES ACCOUNT FOR JEEVAMALAR A/P KUMARASUBRAMANIAM)

1,000,000 0.55

29. SULONG BIN MAMAT 1,000,000 0.55 30. TEY CHERN CHERN 980,600 0.54

TOTAL 60,758,500 33.31

THIRTY (30) LARGEST WARRANT HOLDERSAS AT 15TH AUGUST 2011 (CONT’D)

ANALySIS OF WARRANTHOLDINGS - AS AT 15TH AUGUST 2011 (cont’d)

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Eighth (8th) Annual General Meeting of Ingenuity Solutions Berhad will be held at the Tioman Room, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil 57000 Kuala Lumpur on Tuesday, 20th day of September, 2011 at 8.30 a.m. for the following purposes:-

AGENDAAS ORDINARY BUSINESS1. To receive the Audited Financial Statements for the financial year ended 31st March,

2011 together with the Reports of the Directors and Auditors thereon. (Please refer to Note 1.)

2. To approve the payment of Directors’ fees for the financial year ended 31st March, 2011. (Ordinary Resolution 1)

3. To re-elect the following Directors retiring in accordance with the Company’s Articles of Association:i) Tan Sin Chong [Article 76(2)] (Ordinary Resolution 2)ii) Shaliza binti Sabtu [Article 76(3)] (Ordinary Resolution 3)iii) Ng Kok Hok [Article 76(3)] (Ordinary Resolution 4)iv) Abdul Rahman bin Shakor [Article 76(3)] (Ordinary Resolution 5)v) Ahmad Ruslan Zahari Dato’ Dr. Zakaria [Article 76(3)] (Ordinary Resolution 6)vi) Dato’ Feroz bin A S Moidunny [Article 76(3)] (Ordinary Resolution 7)vii) Tham Kah Yong [Article 76(3)] (Ordinary Resolution 8)

4. To re-appoint Messrs SJ Grant Thornton as Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

(Ordinary Resolution 9)

AS SPECIAL BUSINESS5. AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF

THE COMPANIES ACT, 1965

“THAT, subject always to the Companies Act, 1965 (“the Act”), the Articles of Association of the Company and the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Act, to issue shares in the Company from time to time at such price and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued capital of the Company as at the date of this Annual General Meeting, and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.

AND THAT the Directors be and are also hereby empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued.

AND THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

(Ordinary Resolution 10)

6. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

“THAT the amendments to the Articles of Association of the Company as contained in Appendix 1 attached to this Annual Report be and are hereby approved.”

(Special Resolution 1)

By Order of the Board

LIM SECK WAH (MAICSA 0799845)Company Secretary

Dated this 26th day of August 2011.Kuala Lumpur

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Notes:

1. The Agenda No.1 is meant for discussion only as the provision of S169(1) of the Companies Act, 1965 does not require a formal approval of shareholders and hence, is not put forward for voting.

2. A member entitled to attend and vote at the meeting is entitled to appoint up to two(2) proxies to attend and vote in his/her stead. A proxy needs not be a member of the Company.

3. Where a member appoints two(2) proxies to attend at the same meeting, the appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

4. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account.

5. If the appointer is a corporation, the Form Of Proxy must be executed under its Common Seal or under the hand of its attorney duly authorized.

6. The Form of Proxy must be deposited at the Company’s Registered Office at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

7. Explanatory notes on Special Business7.1 The proposed Ordinary Resolution 10 is primarily to give flexibility to the Board of Directors to allot and issue

shares at any time in their absolute discretion and for such purposes as they consider would be in the interest of the Company without convening a general meeting. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

The Company continues to consider opportunities to broaden its earnings potential. If any of the expansion/diversification proposals involves the issue of new shares, the Directors, under certain circumstance when the opportunity arises, would have to convene a general meeting to approve the issue of new shares even though the number involved may be less than 10% of the issued capital.

In order to avoid any delay and costs involved in convening a general meeting to approve such issue of shares when the needs may arise during the financial year, it is thus considered appropriate that the Directors be empowered to issue shares in the Company, up to any amount not exceeding in total 10% of the issued share capital of the Company for the time being, for such purposes. The authority for allotment of shares will provide flexibility to the Company for the allotment of shares for the purpose of funding future investment, working capital and/or acquisitions.

The Company had issued 13,235,200 new ordinary shares of RM0.10 each via private placement pursuant to the mandate granted to the Company at the Seventh (7th) Annual General Meeting held on 24th September 2010 which will lapse at the conclusion of the Eighth (8th) Annual General Meeting. The proceeds raised from the private placement exercise is mainly for working capital of the Company.

7.2 The proposed Special Resolution 1 on the proposed amendments to the Articles of Association of the Company are made to improve the existing provisions of the Company’s Articles of Association. Please refer to Appendix 1 attached to this Annual Report for details of the Proposed Amendments.

BUKIT JALIL GOLF & COUNTRY RESORT ROUTE MAPJalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur. Tel : 03 – 8994 1600 Fax : 03 – 8994 6070

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)

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APPENDIX 1

Proposed Amendments to the Company’s Articles of Association

ARTICLE NO. EXISTING PROVISIONS AMENDED PROVISIONS

Article 56A No provision. If within half an hour after the time appointed for the meeting a quorum is not present, the meeting, if convened by or upon the requisition of members, shall be dissolved. If otherwise convened, it shall stand adjourned to the same day in the next week (or if that day be a public holiday, then to the next business day following such public holiday), at the same time and place or to such other day and at such other time and place as the directors may determine, but if a quorum is not present within half an hour from the time appointed for holding the adjourned meeting the member or members present at an adjourned meeting shall form a quorum.

Article 56B No provision. The Chairman, if any, or in his absence the Deputy Chairman, if any, shall preside as chairman at every general meeting and all Board meetings. If there be no such Chairman or Deputy Chairman, or if neither of them be present within fifteen (15) minutes after the time appointed for holding the meeting, or shall decline to take or shall retire from the chair, the directors present shall choose one of their number to act as Chairman of such meeting, and if there be no director chosen who shall be willing to act, the members present in person or by proxy and entitled to vote shall choose one of their own number to act as Chairman at such meeting.

Article 60(3) No provision. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded shall be entitled to a second or casting votes.

Article 93(i) The quorum necessary for the transaction of the business of the directors shall be two(2) persons present physically.

Majority directors present in person or via audio visual conference or by other electronic means shall constitute the quorum for the Board meeting.

Article 93(ii) A meeting of the directors or a committee appointed by the directors may be held by means of telephone confer-ence and/or video conferenc-ing or any other interactive means of audio or audio-visual communications whereby all participating person are able to hear each other or be heard during the meeting but shall not be counted for the purpose of a quorum. A director’s participation in the manner as aforesaid shall be deemed to be present at the meeting but does not include for the purpose of determina-tion of quorum. He shall also be entitled to vote thereat. Any meeting held in such manner shall be deemed to be or have been held such time and place as set out in the notice of the meeting.

A meeting of the directors or a committee appointed by the directors may be held by means of telephone conference and/or video conferencing or any other interactive means of audio or audio-visual communications whereby all participating person are able to hear each other or be heard during the meeting. A director’s participation in the manner as aforesaid shall be deemed to be present at the meeting and be entitled to vote thereat. Any meeting held in such manner shall be deemed to be or have been held such time and place as set out in the notice of the meeting.

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ARTICLE NO. EXISTING PROVISIONS AMENDED PROVISIONS

Article 111 SEAL FOR USE ABROADT h e C o m p a n y o r t h e directors on behalf of the Company may exercise the powers conferred by the provisions of the Act with regard to having an official seal for use abroad and the powers conferred by the provisions of the Act with regard to the keeping of a Branch Register.

SEAL(a) The Directors shall provide for the safe custody of the Seal

which shall only be used pursuant to a resolution of the Directors or a committee of the Directors authorising the use of the Seal. The Directors may from time to time make such regulations as they think fit determining the persons and the number of such persons in whose presence the Seal shall be affixed and, until otherwise so determined, the Seal shall be affixed in the presence of at least one (1) Director and counter-signed by the a second Director or by a Secretary or by some other person appointed by the Directors for the purpose who shall sign every instrument to which the Seal is affixed and the Directors may by resolution determine either generally or in any particular case that the signature of any Director, the Secretary or such other persons appointed as aforesaid may be affixed or reproduced by facsimile, autographic or other mechanical means provided that the use of such is restricted to a certificate or other documents of title in respect of any share, stock, debenture or marketable security created or issued by the Company to be given under the Seal of the Company.

(b) The Company or the directors on behalf of the Company may exercise the powers conferred by the provisions of the Act with regard to having an official seal for use abroad and the powers conferred by the provisions of the Act with regard to the keeping of a Branch Register.

(c) The Company may also have a share seal pursuant to Section 101 of the Act.

Article 121A No provision. Any dividend, interest or other money payable in cash in respect of shares may be paid by direct crediting, cheque or warrant, sent via electronic means or post directed to the registered address of the holder. Every direct crediting or such cheque or warrant shall be made payable to the order of the person to whom it is sent, and the payment of any such cheque or warrant shall operate as a good discharge to the Company in respect of the money represented thereby, notwithstanding that it may subsequently appear that the same has been stolen or that the endorsement thereon has been forged. Every such cheque or warrant shall be sent at the risk of the person entitled to the money thereby represented.

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Proposed Amendments to the Company’s Articles of Association (cont’d)

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INGENUITY SOLUTIONS BERHAD (609423 V)

Incorporated in Malaysia

FORM OF PROXy No. of ordinary shares held

(Before completing this form please refer to the notes below)

*I/We

of

being a member / members of INGENUITY SOLUTIONS BERHAD hereby appoint the following person(s):-

of failing him/her, the Chairman of the Meeting as *my/our proxy/proxies to attend and vote for *me/us and on my/our behalf at the Eighth Annual General Meeting of Ingenuity Solutions Berhad to be held at the Tioman Room, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil 57000 Kuala Lumpur on Tuesday, 20th day of September, 2011 at 8.30 a.m. and at any adjournment thereof to vote as indicated below:-

FIRST PROXY SECOND PROXY

FOR AGAINST FOR AGAINST

Ordinary Resolution 1 - Directors’ feesOrdinary Resolution 2 - Re-election of Mr. Tan Sin ChongOrdinary Resolution 3 - Re-election of Puan Shaliza binti SabtuOrdinary Resolution 4 - Re-election of Mr. Ng Kok HokOrdinary Resolution 5 - Encik Abdul Rahman bin ShakorOrdinary Resolution 6 - Encik Ahmad Ruslan Zahari Dato’ Dr. ZakariaOrdinary Resolution 7 - Dato’ Feroz bin A S MoidunnyOrdinary Resolution 8 - Tham Kah YongOrdinary Resolution 9 - Re-appointment of auditorsOrdinary Resolution 10 - Authority to issue sharesSpecial Resolution 1 - Proposed Amendments to the Articles of Association

(Please indicate with an ‘x’ in the space provided above on how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his/ her discretion).

In case of a vote taken by a show of hands, the First-named Proxy shall vote on *my/our behalf.

As witness my hand this ____________________ day of __________________________ 2011.

__________________________________Signature / Common Seal of Shareholder(s)*strike out whichever is not desired.

Name of proxy. NRIC No. & address

1. _______________________________________________

2. _______________________________________________

_____________________________________

_____________________________________

No. of shares to be represented by proxy

NRIC No./Passport No./Company No.

Notes :- 1. A member entitled to attend and vote at the meeting is entitled to appoint up to two(2) proxies to attend and vote in his/ her stead.

A proxy needs not be a member of the Company. 2. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may

appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to be credit of the said securities account.

3. A member may appoint up to two (2) proxies to attend at the same meeting, the appointment shall be invalid unless he/she specifies the proportions of his/ her holdings to be represented by each proxy.

4. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney duly authorized.5. The Form of Proxy must be deposited at the Company’s Registered Office at Level 15-2, Bangunan Faber Imperial Court, Jalan

Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

(Full Name In Block Letters)

(Full Address)

Page 78: Ingenuity Annual Report 2011

The Company SecretaryINGENUITY SOLUTIONS BERHAD (609423 V)

Level 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail

50250 Kuala Lumpur

affixstamp

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The Company SecretaryINGENUITY SOLUTIONS BERHAD (609423 V)

Level 15-2, Bangunan Faber Imperial CourtJalan Sultan Ismail

50250 Kuala Lumpur

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