Ingenuity Annual Report 2011

CONTENT
Page Corporate Structure Corporate Information Profile of Directors Chairmans Statement Audit Committee Report Statement Of Corporate Governance Additional Compliance Information Statement On Internal Control Directors Report Statement By Directors / Statutory Declaration Report Of The Auditors Statements Of Financial Position Statements Of Comprehensive Income Statements Of Changes In Equity Statements Of Cash Flows Notes To The Financial Statements Analysis Of Shareholdings Analysis Of Warrantholdings Notice Of Annual General Meeting Appendix 1 Proposed Amendments To Articles Of Association Form Of Proxy 1 2 3-7 8 - 10 11 - 13 14 - 20 20 - 22 23 - 24 25 - 28 29 30 - 31 32 - 33 34 35 36 - 37 38 - 65 66 - 68 69 - 70 71 - 72 73 - 74 75
CORPORATE STRUCTURE
Investment Holding, Consultancy & Management Services
Ingenuity Solutions Berhad
Ingenuity Microsystems Sdn. Bhd. (100%)

Enterprise Software
Reliance Computer Centre Sdn. Bhd. (100%)

Hotel Management Solutions
Uptown Excel Sdn. Bhd. (100%) Systems Integration & Services Business
Hallmark Avenue Sdn. Bhd. (100%) IT Distribution Business
Ingenuity Care Sdn. Bhd. (100%) Extended Warranty Services
Austral Diversified Sdn. Bhd. (100%)

Special Projects Development
Ingenuity Solutions Berhad Annual Report 2011
01
CORPORATE INFORMATION
BOARD OF DIRECTORS
Dato Feroz bin A S Moidunny (appointed on 25.3.2011) Ahmad Ruslan Zahari Dato Dr. Zakaria (appointed on 14.1.2011) Wong Hun Liang Ng Kok Hok (appointed on 1.12.2010) Abdul Rahman bin Shakor (appointed on 17.12.2010) Tham Kah Yong (appointed on 15.4.2011) Tan Sin Chong Shaliza binti Sabtu (appointed on 1.10.2010) Chong Set Fui(f) (resigned on 31.5.2011) Yee Wai Meng (appointed on 24.2.2011, resigned on 29.3.2011) Dato Sri Dr. Shafiq Sit Abdullah (resigned on 7.3.2011) Poh Hou Liang (resigned on 10.2.2011) Tan Kuen Wei (resigned on 17.1.2011) Gan Leng Swee (resigned on 4.1.2011) Ir. Azman Ahmad (resigned on 24.11.2010) Chairman, Non-Independent Non-Executive Chief Executive Officer / Executive Director Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Non-Independent Non-Executive Director Non-Independent Non-Executive Director Non-Independent Non-Executive Director Executive Director Chairman, Non-Independent Non-Executive Executive Director Independent Non-Executive Director Independent Non-Executive Director Non-Independent Non-Executive Director
AUDIT COMMITTEE
Ng Kok Hok (Chairman) Abdul Rahman bin Shakor (Member) Tham Kah Yong (Member)
BANKER
RHB Bank Berhad (6171-M) Malayan Banking Berhad (3813-K) Hong Leong Bank Berhad (97141-X)
REMUNERATION COMMITTEE
Abdul Rahman bin Shakor (Chairman) Ahmad Ruslan Zahari Dato Dr. Zakaria (Member) Ng Kok Hok (Member) Tham Kah Yong (Member)
AUDITORS
NOMINATION COMMITTEE
Abdul Rahman bin Shakor (Chairman) Ng Kok Hok (Member) Tham Kah Yong (Member)
SJ Grant Thornton (AF:0737) (Member of Grant Thornton International) Chartered Accountants Level 11, Bangunan Faber Imperial Court Jalan Sultan Ismail, 50250 Kuala Lumpur Tel: + (603) 2692 4022 Fax: + (603) 2732 5119 E-mail : sjgt@gt.com.my Website : www.gt.com.my
LEGAL COUNSEL
Cheang & Ariff 39 Court @ Loke Mansion 273A Jalan Medan Tuanku 50300 Kuala Lumpur , Malaysia Tel: + (603) 26910803 Fax: + (603) 26934475 E-mail : ca@cheangariff.com Website : www.cheangariff.com
PRINCIPAL PLACE OF BUSINESS

Tower M, Warisan Cityview 18-8, 8th Floor, Jalan Cheras 56100 Kuala Lumpur Tel: +(603) 9282 3517 Fax: +(603) 9282 9517 E-mail : info@ingenuity.com.my Website : www.ingenuity.com.my
SECRETARY
Lim Seck Wah (f) (MAICSA 0799845)
REGISTERED OFFICE AND SHARE REGISTRAR
STOCK EXCHANGE LISTING

Bursa Malaysia Securities Berhad - ACE Market Stock name : INGENS Stock code : 0034
Mega Corporate Services Sdn. Bhd. (187984-H) Level 15-2, Bangunan Faber Imperial Court Jalan Sultan Ismail, 50250 Kuala Lumpur Tel: + (603) 2692 4271 Fax: + (603) 2732 5388 E-mail : info@megacorp.com.my Website : www.megacorp.com.my
02
BOARD OF DIRECTORS
DATO FEROZ BIN A S MOIDUNNY
Chairman, Non-Independent Non-Executive
AHMAD RUSLAN ZAHARI DATO DR. ZAKARIA

Chief Executive Officer
WONG HUN LIANG

Executive Director
NG KOK HOK
Independent Non-Executive Director
ABDUL RAHMAN BIN SHAKOR

THAM KAH YONG
TAN SIN CHONG
Non-Independent Non-Executive Director
SHALIZA BINTI SABTU
Non-Independent Non-Executive Director
03
DIRECTORS PROFILE
Chairman, 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. ZAKARIA

Chief Executive Officer Executive Director Member of Remuneration Committee
Aged 50, a Malaysian, was appointed to the Board on 14 January 2011 as an Independent and Non-Executive Director. 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.
04
DIRECTORS PROFILE (CONTD)
WONG HUN LIANG

Executive 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 HOK
Independent Non-Executive Director Chairman of Audit Committee Member of Remuneration Committee Member 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.
05
ABDUL RAHMAN BIN SHAKOR
Independent Non-Executive Director Chairman of Remuneration Committee Chairman of Nomination Committee Member 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 YONG
Independent Non-Executive Director Member of Audit Committee Member of Remuneration Committee Member 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
TAN SIN CHONG
Non-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 MalaysiaSingapore Business Council and chairs the councils 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 RCCs 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 SABTU
Non-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
CHAIRMANS STATEMENT
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 Performance
For 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 Development
The 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 of the Board Non Independent Non-Executive
08
CHAIRMANS STATEMENT (CONTD)
Dividend
No dividend was declared for the financial year ended 31 March 2011.
Corporate Development
During 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.
Prospects
The 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.
09
CHAIRMANS STATEMENT (CONTD)
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 Changes
As 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, redesignated 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.
Appreciation
On 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 Groups 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,

Chairman of the Board Non Independent Non-Executive
10
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 Groups 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 & COMPOSITION

The 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) (b) Must be a member of the Malaysian Institute of Accountants; or If he is not a member of the Malaysian Institute of Accountant, he must have at least three (3) years working experience, and (i) (ii) (c) Must have passed the examination specified in Part I of the 1st Schedule of the Accountants Act 1967; or 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
Fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad
The current composition of Audit Committee is as follow:Chairman Members Ng Kok Hok (Independent Non-Executive Director) Abdul Rahman bin Shakor (Independent Non-Executive Director) Tham Kah Yong (Independent Non-Executive Director)
TERMS OF REFERENCE
The terms of reference of the Audit Committee is authorised by the Board and is intended to assist the Board independently in further fulfilling the Boards duties and responsibilities which includes reviewing, monitoring and highlighting the Groups 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 Committees terms of reference are as follows: (a) (b) To review the Groups quarterly and yearly statement of financial position, statement of comprehensive income, statement of cash flow and notes to the financial report. To review and make necessary recommendations on the Groups quarterly management announcements to ensure adherence to the approved accounting standards, accounting policy, listing and other requirements.
11
AUDIT COMMITTEE REPORT (CONTD)
(c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o)
To ensure compliance to existing and new accounting standards as well as highlighting significant issues and any accounting judgments to the Board. To review the consistency and compliance of the Group and its subsidiaries overall accounting policies and regulatory reporting process. To evaluate and assess the adequacy and integrity of the Groups processes in relation to the overall audit process and internal control environment during the year. To highlight significant capital commitments, contingent liabilities any litigations against or taken by the Group. To review all related party transactions to ensure the transactions are conducted on normal commercial terms within the Company or the Group. 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. To nominate a person or persons as external and internal auditors. To review with the external and internal auditors, the evaluation of the system of internal controls, the audit process and audit reports. To ensure there is an adequate control system on check and balance. To verify the allocation of options to the eligible employees pursuant to the Companys Share Option Scheme (if any) during the financial year. To carry out any other duties and rights assigned by the Board within its charter or as per Bursa Malaysia Listing Requirements. To call and convene meetings with external auditors, internal auditors and officers of the Company as and when required. 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 ACTIVITIES

The 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

Ng Kok Hok Abdul Rahman bin Shakor Tham Kah Yong Ahmad Ruslan Zahari Dato Dr. Zakaria Poh Hou Liang Tan Kuen Wei Gan Leng Swee
(appointed on 1.12.2010) (appointed on 17.12.2010) (appointed on 15.4.2011) (relinquished on 29.3.2011) (relinquished on 9.7.2010) (resigned on 17.1.2011) (resigned on 4.1.2011)
Attendance
1/1 0/1 N/A 1/1 1/1 4/4 4/4
12
AUDIT COMMITTEE REPORT (CONTD)
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 Groups 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 Groups internal controls and information system. The internal audit function includes the review, assessment and provision of reasonable assurance that the Groups 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 Groups internal control mechanism. To further discharge its duties and responsibilities effectively, the internal auditors can obtain the assistance of the groups senior management and staff in providing all the necessary information as and when required. The Groups 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 Groups internal or external auditors; and the internal control mechanism/ process has provided sufficient assurance and obtained a reliable and fair appraisal of the Groups internal control mechanism.
13
STATEMENT OF CORPORATE GOVERNANCE
A Statement of Corporate Governance in essence highlights the Group and Companys 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 Groups 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 Companys compliance as set out in Parts 1 and 2 of the Code thought the financial year.
A.
BOARD OF DIRECTORS
As in any organisation, the Board of Directors is at all the pinnacle of that organisations hierarchy structure. Members of the Board with the relevant experience and expertise are entrusted with the Groups 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 Groups 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 Boards 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 Boards 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 Groups general state of affair, financial and operational activities, and progress of any previous Boards 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 Groups 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 Boards 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.
14
STATEMENT OF CORPORATE GOVERNANCE (CONTD)
(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
Dato' Feroz bin A S Moidunny (appointed on 25.3.2011) Ahmad Ruslan Zahari Dato Dr. Zakaria (appointed on 14.1.2011) Wong Hun Liang Ng Kok Hok (appointed on 1.12.2010) Abdul Rahman bin Shakor (appointed on 17.12.2010) Tham Kah Yong (appointed on 15.4.2011) Tan Sin Chong Shaliza binti Sabtu (appointed on 1.10.2010) Chong Set Fui (f) (resigned on 31.5.2011) Yee Wai Meng (appointed on 24.2.2011, resigned on 29.3.2011) Dato Sri Dr. Shafiq Sit Abdullah (resigned on 7.3.2011) Poh Hou Liang (resigned on 10.2.2011) Tan Kuen Wei (resigned on 17.1.2011) Gan Leng Swee (resigned on 4.1.2011) Ir. Azman Ahmad (resigned on 24.11.2010)
No.of meeting Attended / Held

1/1 4/4 8/8 4/4 3/4 N/A 6/8 3/5 5/6 3/3 5/6 4/4 4/4 4/4 1/3
(III)
Committees
The 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 Committee
The 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.
15
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) (2) (3) To nominate suitable individuals and recommend their appointment as Board Members of Ingenuity Solutions Berhad and its subsidiary and associated companies. Review the performance of the Board members of Ingenuity Solutions Berhad and its subsidiaries and associated companies. 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. Consider and recommend measures to upgrade the effectiveness of the Board and the board of subsidiary and associated companies. Consider and recommend solution on issues of conflict of interest affecting directors of Ingenuity Solutions Berhad and its subsidiary and associate companies. Recommend to the Board on selection of Directors and Senior Management (if so) to fill the Board and the Committees. Consider and recommend to the Board on succession planning at Executive Director level as well as senior management. Carry out the specific duties and responsibilities per terms of reference as delegated by the Board.
(4) (5) (6) (7)
(8)
Remuneration Committee
The 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)
16
Terms of reference of Remuneration Committee:(1) (2) (3) (4) Review and recommend to the Board on the Directors fees and remuneration package for Directors. Review Service Contracts for Executive Directors and Chief Executive Officer. Review and recommend to the Board the remuneration package for Senior Management of the Group with designation of General Manager (or equivalent) and above. Consider and recommend payments like ex-gratia, bonus, incentives, retirement and salary review of executives within the Group.
(IV)
Supply of information
To effectively discharge its duties and responsibilities, Board members are supplied with full and timely access to information concerning the Groups operations and financial status on a regular basis. At every financial quarter , the Board will meet at least once to approve the Groups quarterly announcement to Bursa Malaysia Securities Berhad. The Management and the Groups 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 Groups 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 Director
The 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 Companys 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 training
In 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
17
B.
DIRECTORS REMUNERATION
Directors remuneration includes directors salary, other emoluments and fee received during the year. The fee of each Director commensurates with that directors responsibility, contribution and job scope. The fee received by the Directors of the Company is subsequently approved by shareholders at the Companys 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 Package

The Directors remuneration for the financial year ended 31 March 2011 is as follows:-
Executive Directors (RM)

Salaries and other emoluments Fees 180,547 6,500
Non-Executive Directors (RM)

29,000
Range of remuneration
Below RM50,000 RMRM50,001 to RM100,000 RMRM100,001 to RM150,000 RMRM150,001 to RM200,000 RMRM200,001 to RM250,000
Executive Directors
3 1 -
Non-Executive Directors
9 -
C.
DIRECTORS RESPONSIBILITY FOR PREPARING THE ANNUAL FINANCIAL STATEMENTS

The Board is collectively responsible to ensure that the financial statements, the results and cash flow will give a comprehensive and fair view of the Groups 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 Companys financial position and affairs. The Statement of Directors Responsibility is disclosed in this Annual Report.
18
D.
INVESTOR RELATIONS AND COMMUNICATION WITH SHAREHOLDERS

The 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. Groups 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 Ingenuitys website at http://www.ingenuity.com.my and Bursa Malaysias 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 Groups 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 Groups performance and its business operations. The Groups 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 Groups financial performance and prospects, primarily throght the annual report and quarterly financial statements by way of:-
(i)
Internal Control
The 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 Groups 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 Groups 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 Groups assets. (The Statement on Internal Control provides an overview of internal control activities during the year.)
(ii)
Financial Reporting
Prior 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 Groups 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 Committees responsibilities and work scope during the year.
19
E.
ACCOUNTABILITY AND AUDIT (CONTD)

(iii) Relationship with Auditors
The Board is collectively responsible for the Groups 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 Groups financial statements. External auditors are invited to brief the Board on the Groups financial statement and position, while the internal auditors will present their report/findings at every quarter on the Groups internal controls mechanism highlighting areas of weaknesses and strength.
F.
ADDITIONAL COMPLIANCE INFORMATION

(i) Utilisation of proceeds raised from corporate proposal
The 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) (iii) (iv) (v)
Share Buybacks Options, Warrants or Convertible Securities Depository Receipts Programme Sanctions Imposed and/or Penalties
For the financial year ended 31 March 2011, the Group did not enter into any share buyback transactions.
No options, warrants or convertible shares were issued during the financial year ended 31 March 2011.
The Company did not sponsor any Depository receipt programme for the financial year ended 31 March 2011.
There 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 fees
Non-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 Guarantee
For 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 Results
There 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.
20
F.
ADDITIONAL COMPLIANCE INFORMATION (CONTD)

(ix) Material Contract
For 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) (xi)
Revaluation Policy on Landed Property Corporate Social Responsibility Activities or Practices
The Group does not have a revaluation policy in respect of its landed properties.
The 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 Nature
Details 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. Nature of Transaction Provision of IT consultancy, services and hardware and supply by RCC. FYE2011 Value (RM) 376,510
Company Reliance Computer Centre Sdn. Bhd. (RCC)
Transacting Party RPB Group
Nature of Relationship 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 Solutions Berhad by virtue of their direct substantial shareholdings 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
RCC
Reliance Pacific Berhad
- do-
Provision of IT consultancy and services by RCC.
20,580
21
ADDITIONAL COMPLIANCE INFORMATION (CONTD)

(xii) Recurrent Related Party Transactions of a Revenue Nature (contd)
Transacting Party Reliance Shipping & Travelling Agencies Sdn. Bhd. Reliance Sighting Sdn Bhd Nature of Relationship - doNature of Transaction Provision of IT consultancy and services by RCC. Provision of IT consultancy and services by RCC. Provision of IT consultancy and services by RCC. FYE2011 Value (RM) 61,759
Company RCC
RCC
- do-
19,552
RCC
RPB Development Sdn. Bhd.
- do-
27,268
22
STATEMENT ON INTERNAL CONTROL
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 Companys assets. The Bursa Malaysia Securities Berhads ACE Market Listing Requirements require directors of Public Listed Companies to include a statement on the state of the Companys 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 auditors 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.
BOARDS RESPONSIBILITY
The 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 Groups internal control systems reliability, effectiveness and dependency.
INTERNAL CONTROL STRUCTURE, ELEMENTS AND PORCESSES

The Groups 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 Groups 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 Groups 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.
23
STATEMENT ON INTERNAL CONTROL (CONTD)
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 Groups 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 Groups 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 FUNCTION

The Groups 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 Groups internal control mechanism.
INTERNAL CONTROL SUMMARY

During 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.
24
DIRECTORS REPORT
The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 March 2011. PRINCIPAL ACTIVITIES
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.
FINANCIAL RESULTS
Group (RM)
Loss for the financial year Attributable to:Owners of the parent 1,410,511 1,410,511
Company (RM)
303,780
DIVIDENDS
There 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 PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year.
ISSUE OF SHARES AND DEBENTURES

During the financial year, the following shares were issued:-
Date of issue
11.3.2011
Class of shares
Ordinary
Number of shares
13,235,200
Nominal amount of each share

RM0.10
Purposes of issue
Working capital
Terms
Cash
There were no debentures issued during the financial year.
25
DIRECTORS REPORT (CONTD)
INFORMATION ON THE FINANCIAL STATEMENTS

Before 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 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.
(b)
At the date of this report, the Directors are not aware of any circumstances:(a) (b) (c) 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 which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or 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) (b) 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 any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
OTHER STATUTORY INFORMATION

The 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) (b) the results of operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and 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.
26
DIRECTORS
The Directors in office since the date of the last report are: Dato Feroz bin A S Moidunny Ahmad Ruslan Zahari Dato Dr. Zakaria (Chairman, Non-Independent Non-Executive Director, appointed
on 25.3.2011,redesignated to Chairman on 29.3.2011) (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) (redesignated to Executive Director on 29.3.2011) (Non-Independent Non-Executive Director) (Non-Independent Non-Executive Director, appointed on 1.10.2010) (Independent Non-Executive Director, appointed on 1.12.2010) (Independent Non-Executive Director, appointed on 17.12.2010) (Independent Non-Executive Director, appointed on 15.4.2011) (Non-Independent Non-Executive Director, resigned on 31.5.2011) (Chief Financial Officer, Executive Director, appointed on 24.2.2011, resigned as Executive Director on 29.3.2011) (Chairman, Non-Independent Non-Executive Director, resigned on 7.3.2011) (Executive Director, resigned on 10.2.2011) (Independent Non-Executive Director, resigned on 17.1.2011) (Independent Non-Executive Director, resigned on 4.1.2011) (Non-Independent Non-Executive Director, resigned on 24.11.2010)
Wong Hun Liang Tan Sin Chong Shaliza binti Sabtu Ng Kok Hok Abdul Rahman bin Shakor Tham Kah Yong Chong Set Fui (f) Yee Wai Meng Dato Sri Dr. Shafiq Sit bin Abdullah Poh Hou Liang Tan Kuen Wei Gan Leng Swee Azman bin Ahmad
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 Direct interest

Wong Hun Liang Tan Sin Chong 7,441,000 59,900 7,441,000 39,900 20,000
At 1.4.2010
Bought
Sold
At 31.3.2011
Deemed interest
Dato Feroz bin A S Moidunny* Wong Hun Liang* 32,832,308 32,832,308 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.
27
DIRECTORS BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in 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 COMMITTEE
The 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.
AUDITORS
Messrs SJ Grant Thornton have expressed their willingness to continue in office. Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.
............................................................. WONG HUN LIANG
. AHMAD RUSLAN ZAHARI DATO DR. ZAKARIA Kuala Lumpur 22 July 2011
) ) ) ) ) DIRECTORS ) ) ) ) )
28
STATEMENT By DIRECTORS / STATUTORy DECLARATION
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 Kuala Lumpur 22 July 2011
....................................................................................... AHMAD RUSLAN ZAHARI DATO DR. ZAKARIA
STATUTORY DECLARATION
I, 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 Before me: ) ) ) ) .. YEE WAI MENG
Commissioner for Oaths
29
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF INGENUITy SOLUTIONS BERHAD

(Incorporated in Malaysia) Company No: 609423 V
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 Companys 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 Companys 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. 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. We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Companys 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.
b) c)
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INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF INGENUITy SOLUTIONS BERHAD

(Incorporated in Malaysia) Company No: 609423 V (CONTD)
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 (NO. AF: 0737) CHARTERED ACCOUNTANTS Kuala Lumpur 22 July 2011
HOOI KOK MUN (NO: 2207/01/12(J)) PARTNER
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STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2011
Group Note ASSETS

Non-current assets Property, plant and equipment Investment in subsidiary companies Intangible assets 6 7 8 832,035 7,166,507 1,107,154 7,792,374
Company 2010 RM 2011 RM 2010 RM
2011 RM
6,423,814 -
6,423,812 -
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 9 10 11 7 12 12
7,998,542
8,899,528
6,423,814
6,423,812
48,751 3,132,767 102,594 500,000 499,920 4,284,032 12,282,574
206,812 1,672,770 164,214 1,000,000 527,084 3,570,880 12,470,408
13,452,437 500,000 32,315 13,984,752 20,408,566
11,747,303 1,000,000 88,942 12,836,245 19,260,057
EQUITY AND LIABILITIES EQUITY

Share capital Reserves Total equity 13 14 14,558,752 (2,547,186) 12,011,566 13,235,232 (1,284,958) 11,950,274 14,558,752 5,838,674 20,397,426 13,235,232 5,994,171 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 (CONTD)
Group Note LIABILITIES

Non-current liability Deferred taxation Total non-current liability Current liabilities Trade payables Other payables Total current liabilities Total liabilities Total equity and liabilities 16 17 187,246 83,762 271,008 271,008 12,282,574 395,665 117,385 513,050 520,134 12,470,408 15 7,084 7,084
2011 RM
11,140 11,140 11,140 20,408,566
30,654 30,654 30,654 19,260,057
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STATEMENTS OF COMPREHENSIVE INCOME

FOR THE FINANCIAL yEAR ENDED 31 MARCH 2011
Group
Note
Company 2010 RM
5,346,412
2011 RM
6,220,786 (5,364,804) 855,982 383,523 (83,196) (2,094,906) (478,755)
2011 RM 25,394 (7,432) (321,742) (303,780) -
2010 RM 23,019 (8,656) (281,653) (1,646,803) (1,914,093) -
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)
18 18
(4,172,052) 1,174,360 209,469 (96,671) (3,038,514) (1,679,353) (3,430,709) 109,655
19 20
(1,417,352) 6,841
(1,410,511)
(3,321,054)
(303,780)
(1,914,093)
(1,410,511)
(3,321,054)
21
(1.06)
(2.51)
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STATEMENTS OF CHANGES IN EQUITy

Attributable to equity holders of the Company Non-distributable Share capital RM 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 1,323,520 1,323,520 14,558,752 198,528 (50,245) 148,283 12,863,396 (7,900,000) (1,410,511) (7,510,582) 1,522,048 (50,245) 1,471,803 (1,410,511) 12,011,566 13,235,232 13,235,232 12,715,113 12,715,113 (7,900,000) (7,900,000) (2,779,017) (3,321,054) (6,100,071) 15,271,328 (3,321,054) 11,950,274
Share premium RM
Merger deficit RM
Accumulated losses RM
Total equity RM
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 1,323,520 1,323,520 14,558,752 198,528 (50,245) 148,283 12,863,396 (303,780) (7,024,722) 1,522,048 (50,245) 1,471,803 (303,780) 20,397,426 13,235,232 13,235,232 12,715,113 12,715,113 (4,806,849) (1,914,093) (6,720,942) 21,143,496 (1,914,093) 19,229,403
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STATEMENTS OF CASH FLOWS
Group
Note
2011 RM
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 87,664 (1,476,893) (242,042) (2,041,037) (1,917) 24,194 (2,018,760) 166,960 780,611 (351,514) (705,621) 67,416 (21,198) 23,991 (635,412) (19,514) (1,705,134) (2,052,622) 24,194 (2,028,428) (16,685) (107,776) (414,770) 23,019 (391,751) 105,509 (229,030) 32,033 (99,138) 625,867 203,711 277,726 (22,400) 137,502 (24,194) (409,766) 229,030 (182,871) 88,954 277,621 171,175 386,688 373 1,182,052 (23,991) (1,301,678) (24,194) (327,974) (23,019) (290,309) 1,646,803 (1,417,352) (3,430,709) (303,780) (1,914,093)
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STATEMENTS OF CASH FLOWS FOR THE FINANCIAL yEAR ENDED 31 MARCH 2011 (CONTD)
Group
Note
2011 RM
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 (2,607) 22,400 19,793 (8,336) 50,000 41,664 (2) (2) -
CASH FLOWS FROM FINANCING ACTIVITY

Net proceeds from issuance of shares Net cash from financing activity 1,471,803 1,471,803 1,471,803 1,471,803 -
CASH AND CASH EQUIVALENTS

Net decrease Brought forward Carried forward A (527,164) 1,527,084 999,920 (593,748) 2,120,832 1,527,084 (556,627) 1,088,942 532,315 (391,751) 1,480,693 1,088,942
NOTE TO THE CASH FLOW STATEMENTS

A. CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the cash flow statements comprise the following items:-
Group 2011 RM
Cash and bank balances Fixed deposits with a licensed bank 499,920 500,000 999,920
Company 2010 RM
527,084
2011 RM
32,315 500,000 532,315
2010 RM
88,942 1,000,000 1,088,942
1,000,000 1,527,084
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NOTES TO THE FINANCIAL STATEMENTS 31 MARCH 2011
1.
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The 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 POLICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The Groups and the Companys financial risk management policies seek to ensure that adequate financial resources are available for the development of the Groups and the Companys businesses whilst managing its risks. The Group and the Company operate within policies that are approved by the Board and the Groups 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 risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Groups exposure to credit risk arises primarily from receivables. It is the Groups 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 Groups 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 Groups 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 Groups exposure to bad debts is not significant. Following are the areas where the Group and the Company are exposed to credit risk:
i.
Receivables
As 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 (contd)
2.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD)

2.1
ii.
Credit risk (Contd)

Intercompany balances
The 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 risks
Liquidity 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 Groups non-derivative financial liabilities which have contractual maturities are summarised below:-
Group
Less than 1 year RM
Unsecured:
Trade payables Other payables Total 187,246 83,762 271,008
Company
Less than 1 year RM
Unsecured:
Other payables 11,140
3.
CAPITAL MANAGEMENT
The Groups objectives when managing capital is to maintain a strong capital base and safeguard the Groups 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.
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4.
SIGNIFICANT ACCOUNTING POLICIES

4.1 Accounting convention
The financial statements of the Group and of the Company are prepared under the historical cost convention, unless otherwise indicated in the summary of significant accounting policies. The financial statements are presented in Ringgit Malaysia (RM) which is the Groups and of the Companys functional currency.
4.2
(a) (b) (c) (d) (e) (f) (g) (h)
Adoption of New and Revised Financial Reporting Standards (FRSs)

FRS 7 FRS 8 FRS 101 FRS 139 Amendments to FRS 7 Amendment to FRS 8 Amendment to FRS 107 Amendments to FRS 108 Financial Instruments: Disclosures Operating Segments Presentation of Financial Statements (Revised) Financial Instruments: Recognition and Measurement Financial Instruments: Disclosures. Amendment relating to financial assets Operating Segments. Amendment relating to disclosure information about segment assets Statement of Cash Flows. Amendment relating to classification of expenditure on unrecognised assets. Accounting Policies, Changes in Accounting Estimates and Errors. Amendment relating to selection and application of accounting policies Events After the Reporting Period. Amendment relating to reason for dividend not recognised as a liability at the end of the reporting period. Property, Plant and Equipment. Amendment relating to derecognition of asset Revenue. Amendment relating to Appendix of this standard and recognition and measurement Employee Benefits. Amendment relating to definition, curtailment and settlements Consolidated and Separate Financial Statements. Amendments relating to cost of an investment in a subsidiary, jointly controlled entity or associate Financial Instruments: Presentation. Amendment relating to effective date and transition Interim Financial Reporting. Amendment relating to disclosure of earnings per share Impairment of assets. Amendment relating to the disclosure of recoverable amount Intangible assets. Amendment relating to recognition of an expense
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:-
(i)
Amendments to FRS 110
(j) (k) (l) (m)
Amendment to FRS 116 Amendment to FRS 118 Amendment to FRS 119 Amendment to FRS 127
(n) (o) (p) (q)
Amendment to FRS 132 Amendment to FRS 134 Amendment to FRS 136 Amendment to FRS 138
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4.
SIGNIFICANT ACCOUNTING POLICIES (CONTD)

4.2
(r)
Adoption of New and Revised Financial Reporting Standards (FRSs) (contd)

Amendment to FRS 139 Financial Instruments: Recognition and Measurement. Amendment relating to eligible hedged items, reclassification of financial assets and embedded derivatives Interim Financial Reporting and Impairment
(s)
IC Interpretation 10
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: Disclosures

Prior 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 Groups and the Companys 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 Companys 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 Groups and the Companys 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 Measurement

FRS 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 receivables
Prior 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 receivables carrying amount and the present value of the estimated future cash flows discounted at the receivables original effective interest rate.
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4.

4.2 Adoption of New and Revised Financial Reporting Standards (FRSs) (contd)
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) (b) (c) (d) FRS 1 Amendments to FRS 2 FRS 3 Amendments to FRS 5 First-time Adoption of Financial Reporting Standards Share Based Payment. Amendments relating to the scope of the Standard Business Combinations (Revised) 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 Consolidated and Separate Financial Statements Intangible assets. Amendments relating to the revision to FRS 3 Reassessment of Embedded Derivatives. Amendments relating to the scope of the IC and revision to FRS 3 Service Concession Arrangements Agreements for the Construction of Real Estate Hedges of a Net Investment in a Foreign Operation Distributions of Non-cash Assets to Owners
(e) (f) (g) (h) (i) (j) (k)
FRS 127 Amendments to FRS 138 Amendments to IC Interpretation 9 IC Interpretation 12 IC Interpretation 15 IC Interpretation 16 IC Interpretation 17
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 Additional Exemptions for First-time Adopters. Amendments relating to exemptions for entities in the oil and gas industry and those with leasing contracts 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 Group cash-settled share-based Payment Transactions. Amendments to prescribe the accounting treatment for share-based payment transaction Business Combinations. Amendments relating to measurement of non-controlling interests and un-replaced and voluntarily replaced share-based payment awards Improving Disclosures about Financial Instruments. Amendments relating to the fair value measurement using fair value hierarchy and disclosure of liquidity risk 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
(b)
Amendments to FRS 1
(c)
Amendments to FRS 1
(d)
Amendments to FRS 2
(e)
Amendments to FRS 3
(f)
Amendments to FRS 7
(g)
Amendments to FRS 7
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4.

4.2
(h) (i)
Adoption of New and Revised Financial Reporting Standards (FRSs) (contd)

Amendments to FRS 101 Amendments to FRS 121 Presentation of Financial Statements. Amendment relating to clarification of statement of changes in equity The Effects of Changes in Foreign Exchange Rates. Amendment relating to transition requirements for amendments arising as a result of FRS 127 Investment in Associates. Amendment relating to transition requirements for amendments arising as a result of FRS 127 Interests in Joint Ventures. Amendment relating to transition requirements for amendments arising as a result of FRS 127 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 Interim Financial Reporting. Amendment relating to significant events and transactions 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 Determining whether an Arrangement contains a Lease Fair value of award credits Transfer of Assets from Customers
(j) (k) (l)
Amendment to FRS 128 Amendment to FRS 131 Amendment to FRS 132
(m) (n)
Amendment to FRS 134 Amendment to FRS 139
(o) (p) (q)
IC Interpretation 4 Amendments to IC Interpretation 13 IC Interpretation 18
Effective for financial periods beginning on or after 1 July 2011 (a) (b) Amendment to IC Interpretation 14 IC Interpretation 19 Prepayments of A Minimum Funding Requirement Extinguishing Financial Liabilities with Equity Instruments
Effective for financial periods beginning on or after 1 January 2012 (a) (b) FRS 124 Amendment to IC Interpretation 15 Related Party Disclosures (Revised) 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:-
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4.

4.2 Adoption of New and Revised Financial Reporting Standards (FRSs) (contd)
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 judgements
Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Groups 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 uncertainty

The 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 liabilities Significant judgement is involved in determining the Groups and the Companys 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 assets Deferred 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 equipment Property, 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 costs The 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.
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4.

4.3 Significant accounting estimates and judgements (contd)
Key sources of estimation uncertainty (contd) Amortisation of other intangible asset The 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 assets The 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 impairment Allowance 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 consolidation
The Groups financial statements consolidate the audited financial statements of the Company and all of its subsidiary companies, which have been prepared in accordance with the Groups 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 Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Groups 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.
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4.

4.4 Basis of consolidation (contd)
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 Groups 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 Furniture and fittings Motor vehicles Office renovation Data processing equipment and applications 10% - 50% 10% 20% 10% - 20% 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 arms length transaction between knowledgeable, willing parties, 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 statements of comprehensive income in the financial year the asset is derecognised.
4.6
Subsidiary companies
A 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.
46
4.

4.7 Research and development costs
Expenditure 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 Projected total revenue of the developed assets x Cumulative actual development expenditure Accumulated amortisation 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 comprehensive income in the cost of sales category.
4.8
Other intangible asset
Intangible 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 grant
The 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.
47
4.

4.10 Impairment of non-financial assets
At 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 comprehensive income immediately.
4.11
Financial assets
Financial 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
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost of inventories is determined on first-infirst-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.
48
4.

4.13 Impairment of financial assets
The 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 Companys 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 assets carrying amount and the present value of estimated future cash flows discounted at the financial assets 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 equivalents
Cash 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
Provisions
Provisions 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 liabilities
Financial 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 Groups and the Companys 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 subsequently 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 derecognised when the obligation under the liability is extinguished.
49
4.

4.17 Revenue recognition
Revenue 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 translations
Transactions 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
(i)
Employee benefits
Short term employee benefits
Wages, 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 plan
Defined 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 tax
Income 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.
50
4.

4.20 Income tax (contd)
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 instruments
Ordinary 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 results
In 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 Groups other components. An operating segments 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 transfer
Segment revenues, expenses and result include transfers between segments. The prices charged on intersegment transactions are the same as those charged for similar goods to parties outside of the economic entity in an arms length transactions. These transfers are eliminated on consolidation.
4.24
(i)
Related parties
directly or indirectly through one or more intermediaries, the party:(1) (2) (3) controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries); has an interest in the entity that gives it significant influence over the entity; or has joint control over the entity;
A party is related to an entity if:-
(ii) (iii) (iv) (v)
the party is an associate of the entity; the party is a joint venture in which the entity is a venturer; the party is a member of the key management personnel of the entity or its parent; the party is a close member of the family of any individual referred to in (i) or (iv);
51
4.

4.24
(vi) (vii)
Related parties (contd)

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 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

Computer and office equipment RM 1,909,107 8,336 1,917,443 2,607 1,920,050 Furniture, fittings and renovation RM 1,514,465 (107,629) 1,406,836 1,406,836 Motor vehicles RM 235,566 235,566 (52,791) 182,775 Data processing equipment and applications RM 2,185,361 2,185,361 2,185,361
Group
Cost Balance as at 1 April 2009 Additions Disposals Balance as at 31 March 2010 Additions Disposals Balance as at 31 March 2011
Total RM 5,844,499 8,336 (107,629) 5,745,206 2,607 (52,791) 5,695,022
52
6.
PROPERTY, PLANT AND EQUIPMENT (CONTD)

Computer and office equipment RM 1,858,490 38,954 1,897,444 13,379 1,910,823 Furniture, fittings and renovation RM 1,136,522 124,858 (57,256) 1,204,124 76,175 1,280,299 Data processing equipment and applications RM 1,091,942 215,368 1,307,310 182,272 1,489,582
Group
Accumulated depreciation Balance as at 1 April 2009 Charge for the year Disposals Balance as at 31 March 2010 Charge for the year Disposals Balance as at 31 March 2011 Net carrying amount 31 March 2011 31 March 2010
Motor vehicles RM 221,666 7,508 229,174 5,900 (52,791) 182,283
Total RM 4,308,620 386,688 (57,256) 4,638,052 277,726 (52,791) 4,862,987
9,227 19,999
126,537 202,712
492 6,392
695,779 878,051
832,035 1,107,154
7.
INVESTMENT IN SUBSIDIARY COMPANIES

Company 2011 RM
Unquoted shares, at cost Less: Allowance for impairment 9,885,232 (3,461,418) 6,423,814 The particulars of the subsidiary companies are as follows:Name of company Place of incorporation Effective interest 2011 % Ingenuity Microsystems Sdn. Bhd. Malaysia 100 2010 % 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. Marketing of computer hardware and software for business solutions. Dormant Principal activities
2010 RM
9,885,230 (3,461,418) 6,423,812
Reliance Computer Centre Sdn. Bhd* Uptown Excel Sdn.Bhd. *
Malaysia Malaysia
100 100
100 -
Subsidiary company not audited by SJ Grant Thornton
Amount due from subsidiary companies is non-trade in nature, unsecured, bears no interest and repayable on demand.
53
8.
INTANGIBLE ASSETS
Group 2011 RM
Development costs Other intangible asset Hotel application software 6,998,507 168,000 7,166,507 i) Development costs Development costs Less: Multimedia Super Corridor grants received 17,370,496 (1,686,985) 15,683,511 Less: Accumulated amortisation Less: Accumulated impairment loss (5,643,047) (3,041,957) 6,998,507 17,370,496 (1,686,985) 15,683,511 (5,185,180) (3,041,957) 7,456,374
2010 RM
7,456,374 336,000 7,792,374
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) ii) iii) iv) Cash flows were projected based on actual operating results and 5 years business plan; Revenue was projected at anticipated annual average revenue growth rate of 62% (2010: 62%) per annum; Expenses were projected at annual increase of approximately 10% (2010: 10%) per annum; and 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 managements 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 2011 RM
Software cost Less: Accumulated amortisation Balance as at 31 March 420,000 (252,000) 168,000
2010 RM
420,000 (84,000) 336,000
54
9.
INVENTORIES
Group 2011 RM
At net realisable value:Trading goods 48,751 206,812
2010 RM
10.
TRADE RECEIVABLES
Group 2011 RM
Trade receivables Less: Allowance for impairment At 1 April Impairment loss recognised Impairment loss reversed At 31 March (229,030) (105,509) 229,030 (105,509) 3,132,767 (182,871) (229,030) 182,871 (229,030) 1,672,770 3,238,276
2010 RM
1,901,800
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 Groups trade receivables are as follows:-
31.3.2011
Not past due Past due 0 - 30 days Past due 31 - 60 days More than 61 days
Gross RM
2,077,357 70,381 119,867 970,671 3,238,276
Individually impaired RM
(105,509) (105,509)
Net RM
2,077,357 70,381 119,867 865,162 3,132,767
55
10.
TRADE RECEIVABLES (CONTD)

Ageing analysis of trade receivables (contd) 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 Groups 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 RECEIVABLES
Group 2011 RM
Deposits Prepayments Tax recoverable Non-trade receivables 65,660 3,316 20,000 13,618 102,594
2010 RM
70,096 3,634 18,326 72,158 164,214
In 2010, included in Groups 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 2011 RM

US Dollar 21,438
2010 RM
30,400
56
13.
SHARE CAPITAL
Group and Company Number 2011 RM
Authorised:Ordinary shares of RM0.10 each Issued and fully paid:Ordinary shares of RM0.10 each At beginning of the year Issued during the year At end of the year 132,352,320 13,235,200 145,587,520 132,352,320 132,352,320 13,235,232 1,323,520 14,558,752 13,235,232 13,235,232 250,000,000 250,000,000 25,000,000 25,000,000
Group and Company Amount 2011 RM 2010 RM
2010 RM
14.
RESERVES
Group 2011 RM
Non-distributable Share premium Merger deficit 12,863,396 (7,900,000) 4,963,396 Accumulated losses (7,510,582) (2,547,186) 12,715,113 (7,900,000) 4,815,113 (6,100,071) (1,284,958) 12,863,396 12,863,396 (7,024,722) 5,838,674 12,715,113 12,715,113 (6,720,942) 5,994,171
15.
DEFERRED TAXATION
Group 2011 RM
Brought forward Transferred to statements of comprehensive income Carried forward 7,084 (7,084) -
2010 RM
114,213 (107,129) 7,084
The deferred taxation represents the tax effects of the excess of carrying value of property, plant and equipment over their tax base.
57
16.
TRADE PAYABLES
The normal trade credit terms granted by the trade payables range from 30 days to 90 days (2010: 30 days to 90 days).
17.
OTHER PAYABLES
Group 2011 RM
Non-trade payables Accrual of expenses 31,711 52,051 83,762
Company 2010 RM
34,189 83,196 117,385
2011 RM
1,140 10,000 11,140
2010 RM
30,654 30,654
18.
REVENUE AND COST OF SALES

Revenue 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 2011 RM
Allowance for impairment of investment in subsidiary companies Allowance for impairment loss on receivables Allowance for slow moving inventories Amortisation of intangible assets Auditors remuneration - auditors of the Company - other auditors Bad debts written off Depreciation Directors remuneration - fees - other emoluments 35,500 180,547 30,000 252,368 33,000 5,000 203,711 277,726 24,000 4,500 171,175 386,688 105,509 32,033 625,867
Company 2010 RM
229,030 88,954 277,621
2011 RM
18,000 35,500 17,000
2010 RM
1,646,803 14,000 30,000 32,000
58
19.
LOSS BEFORE TAX (CONTD)

Group 2011 RM
Inventories written off Rental of premises Rental of equipment Realised foreign exchange loss Impairment on development costs Allowance for impairment loss on receivables no longer required Allowance for slow moving inventories no longer required Interest income (Gain)/loss on disposal of property, plant and equipment 137,502 95,669 5,841 (229,030) (99,138) (24,194) (22,400)
Company 2010 RM
179,691 1,800 112 1,182,052 (182,871) (23,991) 373
2011 RM
19,980 (24,194) -
2010 RM
37,421 (23,019) -
The details of remuneration receivable by Directors of the Group and of the Company during the financial year were as follows:-
Group 2011 RM
Executive:Fees Salaries and other emoluments Defined contribution plan 35,500 176,707 3,840 216,047 30,000 232,400 19,968 282,368
Company 2010 RM 2011 RM

35,500 17,000 52,500
2010 RM
30,000 32,000 62,000
20.
TAX INCOME
Group 2011 RM
Provision for the financial year Under/(over) provision in prior financial year Transfer from deferred taxation 243 (7,084) (6,841)
Company 2010 RM
(2,526) (107,129) (109,655)
2011 RM
-
2010 RM
-
59
20.
TAX INCOME (CONTD)

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 2011 RM
Loss before tax Taxation at Malaysian statutory tax rate Tax effects in respect of:Expenses not deductible for tax purposes Under/(over) provision in prior financial year Deferred tax assets not recognised during the year Effective tax expense 2,688 243 344,566 (6,841) 3,466 (2,526) 747,082 (109,655) (354,338) (857,677) (1,417,352)
Company 2010 RM
(3,430,709)
2011 RM
(303,780)
2010 RM
(1,914,093)
(75,945)
(478,523)
75,945 -
478,523 -
The Groups 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 Groups 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.
60
22.
DEFERRED TAX ASSETS

The 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 2011 RM
Carrying amount of property, plant and equipment in excess of their tax base Unabsorbed capital allowances Unutilised tax losses Others 734,000 (2,352,000) (11,006,000) (140,000) (12,764,000)
2010 RM
864,000 (2,328,000) (10,623,000) (332,000) (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 2011 RM
Salaries Defined contribution plans Social security contributions Other staff related expenses 881,355 96,293 7,026 114,429 1,099,103
Company 2010 RM
1,249,712 135,311 12,659 197,449 1,595,131
2011 RM
106,900 12,876 2,400 122,176
2010 RM
21,253 1,476 1,200 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 2011 RM
Rental expense paid to a company in which certain Directors have interest Rental expenses paid to companies in which certain shareholders have interest Revenue from companies in which certain Directors have interest Revenue from a company in which a Director has interest 27,268 478,401 -
2010 RM
44,000 46,030 650,854 213,300
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24.
RELATED PARTY DISCLOSURES (CONTD)

(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. The outstanding balances arising from related party transactions as at reporting date were disclosed in Note 7, 10 and 11 to the Financial Statements.
(c)
25. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR

(i) (ii) 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. 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. 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. 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) (vi) 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. 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.
(iii) (iv)
62
25.
SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR (CONTD)

(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. 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); 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); 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 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) (b) (c) (d) 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; Listing of and quotation of up to 291,175,040 new shares, to be issued pursuant to the Proposed Rights Issue with Warrants; Listing of and quotation of up to 218,381,280 new shares, to be issued pursuant to the exercise of the Warrants; and 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.
(viii)
(b)
(c)
(d)
63
25.
SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR (CONTD)

On 6 June 2011, Ingenuity Solutions Berhads 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 segment All business of the Group are generated from information technology segment. (b) Geographical segment
No geographical segments have been prepared as the Group principally operates in Malaysia. (c) Major customers
The following are major customers with revenue equal or more than 10% of the Groups revenue:-
Group 2011 RM
1 customer (2010: Nil) 812,150
2010 RM
-
64
27.
FAIR VALUES OF FINANCIAL INSTRUMENTS

The carrying amounts of financial assets and liabilities of the Group and of the Company at the reporting date approximate their fair values due to their short-term nature.
28.
DISCLOSURE OF REALISED AND UNREALISED LOSSES

With 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 2011 RM
Total accumulated losses of the Group and the Company: - Realised loss Consolidation adjustments (11,286,770) 3,776,188 (7,510,582)
Company 2011 RM
(7,024,722) (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.
65
ANALySIS OF SHAREHOLDINGS -AS AT 15TH AUGUST 2011
Authorised Share Capital Paid-up Share Capital Class of Shares Voting Right
: : : :
RM100,000,000 divided into 1,000,000,000 ordinary shares of RM0.10 each. RM38,877,723.60 divided into 388,777,236 ordinary shares of RM0.10 each. Ordinary Shares of RM0.10 each fully paid One vote per ordinary share
DISTRIBUTION OF SHAREHOLDINGS
SIZE OF SHAREHOLDINGS
Less Than 100 shares 100 To 1,000 shares 1,001 To 10,000 shares 10,001 To 100,000 shares 100,001 To Less Than 5% of issued shares 5% and above of issued shares Total
NO. OF HOLDERS
5 84 513 1,110 504 1 2,217
TOTAL HOLDINGS
273 64,407 3,241,500 54,900,200 237,718,932 92,851,924 388,777,236
TOTAL HOLDINGS %
0.00 0.02 0.83 14.12 61.15 23.88 100.00
SUBSTANTIAL SHAREHOLDERS
Direct Interest Shareholders
Firstwide Success Sdn. Bhd. Dato Feroz bin A S Moidunny Wong Hun Liang -
Indirect Interest % No. of Shares

98,496,924
(1)
No. of Shares
98,496,924
%
25.34 25.34
25.34
98,496,924 (1)
DIRECTORS SHAREHOLDINGS
Direct Interest Directors
Dato Feroz bin A S Moidunny Wong Hun Liang Tan Sin Chong Ahmad Ruslan Zahari Dato Dr. Zakaria Note:(1)
Indirect Interest %
0.01 0.03
No. of Shares
20,000 110,000
No. of Shares
98,496,924 (1) 98,496,924(1) -
%
25.34 25.34 -
Deemed interested by virtue of their direct substantial shareholdings in Firstwide Success Sdn. Bhd.
66
ANALySIS OF SHAREHOLDINGS - AS AT 15TH AUGUST 2011 (CONTD)
THIRTY (30) LARGEST SHAREHOLDERS

NO
1.
SHAREHOLDER
JF APEX NOMINEES (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR FIRSTWIDE SUCCESS SDN BHD) SIVA KUMAR A/L M JEYAPALAN TECHNOLOGY PARK MALAYSIA CORPORATION SDN BHD MAYBAN NOMINEES (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR NG KIAN BOON) ECML NOMINEES (TEMPATAN) SDN. BHD PLEDGED SECURITIES ACCOUNT FOR FIRSTWIDE SUCCESS SDN BHD CIMSEC NOMINEES (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR NG KIM SENG) JF APEX NOMINEES (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR JEEVAMALAR A/P KUMARASUBRAMANIAM) SIVALINGAM A/L VELUPPILLAI LEE AH YEW HLG NOMINEE (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR TEH TIAN SOON) TAN KEAN SENG LING LU KUANG GOH SEOW KHONG WONG KWEE KOON LIM POH FONG NG SIE LING
SHARES
92,851,924 12,185,200 11,485,232 7,270,000 5,645,000 5,000,000 3,850,000 3,800,000 3,800,000 3,395,900 2,500,000 2,460,000 2,200,000 2,200,000 2,171,800 2,066,200
%
23.88 3.13 2.95 1.87 1.45 1.29 0.99 0.98 0.98 0.87 0.64 0.63 0.57 0.57 0.56 0.53
2. 3. 4. 5.
6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.
67
ANALySIS OF SHAREHOLDINGS - AS AT 15TH AUGUST 2011 (CONTD)
THIRTY (30) LARGEST SHAREHOLDERS (CONTD)

NO
17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. TEOH HIN HENG LEE CHAI ENG SIAH GIM SIEW CHAN BAN HIN CHAN WENG CHOY LIM BEE CHENG KENANGA NOMINEES (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR CHONG FOONG MELW) SUAM CHEE KIT ZAMRI BIN SULONG TYE SOK CIN SIEW WEI SING TA NOMINEES (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR SALEHAH BINTI SULAIMAN) LEONG KAH FATT LOH SOOK MEE
SHAREHOLDER
SHARES
2,000,000 1,900,000 1,830,000 1,800,000 1,800,000 1,800,000 1,700,000 1,682,200 1,600,000 1,500,000 1,500,000 1,500,000 1,404,000 1,360,000
%
0.51 0.49 0.47 0.46 0.46 0.46 0.44 0.43 0.41 0.39 0.39 0.39 0.36 0.35
TOTAL
186,257,456
47.91
68
ANALySIS OF WARRANTHOLDINGS - AS AT 15TH AUGUST 2011
Issued Size No. of Warrant Holders
: :
182,392,287 warrants 2011/2016 787 Warrant holders
DISTRIBUTION OF WARRANTHOLDINGS AS AT 15TH AUGUST 2011

SIZE OF WARRANTHOLDINGS
Less Than 100 warrant 100 To 1,000 warrant 1,001 To 10,000 warrant 10,001 To 100,000 warrant 100,001 To Less Than 5% of issued warrant 5% and above of issued warrant Total
NO. OF WARRANTHOLDERS
2 2 57 398 328 787
HOLDINGS
112 250 387,175 23,827,350 158,177,400 182,392,287
TOTAL HOLDINGS %
0.00 0.00 0.21 13.06 86.72 0.00 100.00
DIRECTORS WARRANTHOLDINGS
Direct Interest Directors
Dato Feroz bin A S Moidunny Wong Hun Liang Note:Deemed interested by virtue of their direct substantial shareholdings in Firstwide Success Sdn. Bhd., the major shareholder of the Company.
(1)
Indirect Interest %
-
No. of Warrants
-
No. of Warrants
62 (1) 62
(1)
%
Negligible Negligible
THIRTY (30) LARGEST WARRANT HOLDERS AS AT 15TH AUGUST 2011 NO

1. 2. 3. 4. 5. LIU, CHING-AN AMRAN BIN OTHMAN ECML NOMINEES (TEMPATAN) SDN. BHD (PLEDGED SECURITIES ACCOUNT FOR KOH BOON POH) SIAH GIM SIEW GAN BOON GUAT
WARRANTHOLDERS
NO. OF WARRANTS
7,030,000 5,000,000 3,764,000 3,510,000 3,289,700
%
3.85 2.74 2.06 1.92 1.80
69
ANALySIS OF WARRANTHOLDINGS - AS AT 15TH AUGUST 2011 (contd)
THIRTY (30) LARGEST WARRANT HOLDERS AS AT 15TH AUGUST 2011 (CONTD) NO

6. 7. 8. 9.
WARRANTHOLDERS
ECML NOMINEES (TEMPATAN) SDN. BHD (PLEDGED SECURITIES ACCOUNT FOR KWONG MING KWEI) MOHD YASIN BIN MOHD SAID WONG CHEE LEONG OSK NOMINEES (ASING) SDN BERHAD (DMG & PARTNERS SECURITIES PTE LTD FOR ASIA INSIGHT HOLDINGS LIMITED) MAYBAN NOMINEES (TEMPATAN) SDN BHD (HARIS BIN AHMAD) SON KAT PEE @ SOIN KAT PEE LEE LAN KUI MAYBAN SECURITIES NOMINEES (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR CHIN TEK MING) MAYBAN NOMINEES (ASING) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR QIANG YAN) ONG WEE TIU ZULCEPLE BIN MOHD SANI OSK NOMINEES (ASING) SDN BERHAD (DMG & PARTNERS SECURITIES PTE LTD FOR NOBEL ELITE LIMITED) LING LU KUANG CHIA GUAN SENG MAYBAN NOMINEES (TEMPATAN) SDN BHD (LIEW CHEE KIONG) TAN ENG GUAN CHIN TEK MING CIMSEC NOMINEES (TEMPATAN) SDN BHD (CIMB BANK FOR PEK KIAM KEK) TEOH ENG HOE TEH BOON KEE LIM CHEE CHENG SIEW WEI SING JF APEX NOMINEES (TEMPATAN) SDN BHD (PLEDGED SECURITIES ACCOUNT FOR JEEVAMALAR A/P KUMARASUBRAMANIAM) SULONG BIN MAMAT TEY CHERN CHERN TOTAL
NO. OF WARRANTS
3,000,000 2,500,000 2,500,000 2,490,000
%
1.64 1.37 1.37 1.37
10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28.
2,100,000 2,000,000 1,900,000 1,801,000 1,760,000 1,662,200 1,500,000 1,500,000 1,230,000 1,221,000 1,020,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
1.15 1.10 1.04 0.99 0.96 0.91 0.82 0.82 0.67 0.67 0.56 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55
29. 30.
1,000,000 980,600 60,758,500
0.55 0.54 33.31
70
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:-
AGENDA AS ORDINARY BUSINESS

1. 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.) To approve the payment of Directors fees for the financial year ended 31st March, 2011. To re-elect the following Directors retiring in accordance with the Companys Articles of Association: i) ii) iii) iv) v) vi) vii) 4. Tan Sin Chong Shaliza binti Sabtu Ng Kok Hok Abdul Rahman bin Shakor Ahmad Ruslan Zahari Dato Dr. Zakaria Dato Feroz bin A S Moidunny Tham Kah Yong [Article 76(2)] [Article 76(3)] [Article 76(3)] [Article 76(3)] [Article 76(3)] [Article 76(3)] [Article 76(3)] (Ordinary Resolution 2) (Ordinary Resolution 3) (Ordinary Resolution 4) (Ordinary Resolution 5) (Ordinary Resolution 6) (Ordinary Resolution 7) (Ordinary Resolution 8) (Ordinary Resolution 1)
2. 3.
To re-appoint Messrs SJ Grant Thornton as Auditors of the Company and to authorise (Ordinary Resolution 9) the Board of Directors to fix their remuneration. AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF (Ordinary Resolution 10) 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.
AS SPECIAL BUSINESS
5.
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
71
NOTICE OF ANNUAL GENERAL MEETING (CONTD)

Notes: 1. 2. 3. 4. 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. 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. 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. 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. 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. The Form of Proxy must be deposited at the Companys 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. Explanatory notes on Special Business 7.1 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 Companys Articles of Association. Please refer to Appendix 1 attached to this Annual Report for details of the Proposed Amendments.
5. 6.
7.
BUKIT JALIL GOLF & COUNTRY RESORT ROUTE MAP

Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur. Tel : 03 8994 1600 Fax : 03 8994 6070
72
APPENDIX 1
Proposed Amendments to the Companys Articles of Association ARTICLE NO.
Article 56A
EXISTING PROVISIONS
No provision.
AMENDED PROVISIONS
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. 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. 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 56B
No provision.
Article 60(3)
No provision.
Article 93(i)
The quorum necessary for the Majority directors present in person or via audio visual conference transaction of the business of or by other electronic means shall constitute the quorum for the the directors shall be two(2) Board meeting. persons present physically. 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 but shall not be counted for the purpose of a quorum. A directors participation in the manner as aforesaid shall be deemed to be present at the meeting but does not include for the purpose of determination 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 audiovisual communications whereby all participating person are able to hear each other or be heard during the meeting. A directors 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.
Article 93(ii)
73
Proposed Amendments to the Companys Articles of Association (contd) ARTICLE NO.

Article 111
EXISTING PROVISIONS
AMENDED PROVISIONS
SEAL FOR USE ABROAD SEAL T h e C o m p a n y o r t h e (a) The Directors shall provide for the safe custody of the Seal directors on behalf of the which shall only be used pursuant to a resolution of the Company may exercise the Directors or a committee of the Directors authorising the use powers conferred by the of the Seal. The Directors may from time to time make such provisions of the Act with regulations as they think fit determining the persons and the regard to having an official number of such persons in whose presence the Seal shall be seal for use abroad and the affixed and, until otherwise so determined, the Seal shall be powers conferred by the affixed in the presence of at least one (1) Director and provisions of the Act with counter-signed by the a second Director or by a Secretary regard to the keeping of a or by some other person appointed by the Directors for the Branch Register. 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.
74
INGENUITY SOLUTIONS BERHAD (609423 V)

Incorporated in Malaysia
FORM OF PROXy
(Before completing this form please refer to the notes below)
No. of ordinary shares held
*I/We of
(Full Name In Block Letters)
NRIC No./Passport No./Company No.

(Full Address)
being a member / members of INGENUITY SOLUTIONS BERHAD hereby appoint the following person(s):Name of proxy. NRIC No. & address 1. _______________________________________________ 2. _______________________________________________ No. of shares to be represented by proxy _____________________________________ _____________________________________
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 FOR Ordinary Resolution 1 - Directors fees Ordinary Resolution 2 - Re-election of Mr. Tan Sin Chong Ordinary Resolution 3 - Re-election of Puan Shaliza binti Sabtu Ordinary Resolution 4 - Re-election of Mr. Ng Kok Hok Ordinary Resolution 5 - Encik Abdul Rahman bin Shakor Ordinary Resolution 6 - Encik Ahmad Ruslan Zahari Dato Dr. Zakaria Ordinary Resolution 7 - Dato Feroz bin A S Moidunny Ordinary Resolution 8 - Tham Kah Yong Ordinary Resolution 9 - Re-appointment of auditors Ordinary Resolution 10 - Authority to issue shares Special 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. AGAINST SECOND PROXY FOR AGAINST
__________________________________ Signature / Common Seal of Shareholder(s) *strike out whichever is not desired.
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 Companys 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.
affix stamp
The Company Secretary INGENUITY SOLUTIONS BERHAD (609423 V)

Level 15-2, Bangunan Faber Imperial Court Jalan Sultan Ismail 50250 Kuala Lumpur
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Ingenuity Annual Report 2011

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CONTENT

Investment Holding, Consultancy & Management Services

Ingenuity Solutions Berhad

Ingenuity Microsystems Sdn. Bhd. (100%)

Reliance Computer Centre Sdn. Bhd. (100%)

Hallmark Avenue Sdn. Bhd. (100%) IT Distribution Business

Ingenuity Care Sdn. Bhd. (100%) Extended Warranty Services

Austral Diversified Sdn. Bhd. (100%)

Ingenuity Solutions Berhad Annual Report 2011

PRINCIPAL PLACE OF BUSINESS

Lim Seck Wah (f) (MAICSA 0799845)

REGISTERED OFFICE AND SHARE REGISTRAR

STOCK EXCHANGE LISTING

Ingenuity Solutions Berhad Annual Report 2011

DATO FEROZ BIN A S MOIDUNNY

Chairman, Non-Independent Non-Executive

AHMAD RUSLAN ZAHARI DATO DR. ZAKARIA

WONG HUN LIANG

Independent Non-Executive Director

ABDUL RAHMAN BIN SHAKOR

THAM KAH YONG

Independent Non-Executive Director

TAN SIN CHONG

Non-Independent Non-Executive Director

SHALIZA BINTI SABTU

Non-Independent Non-Executive Director

Ingenuity Solutions Berhad Annual Report 2011

DATO FEROZ BIN A S MOIDUNNY

AHMAD RUSLAN ZAHARI DATO DR. ZAKARIA

Ingenuity Solutions Berhad Annual Report 2011

DIRECTORS PROFILE (CONTD)

WONG HUN LIANG

Ingenuity Solutions Berhad Annual Report 2011

DIRECTORS PROFILE (CONTD)

ABDUL RAHMAN BIN SHAKOR

THAM KAH YONG

Ingenuity Solutions Berhad Annual Report 2011

DIRECTORS PROFILE (CONTD)

TAN SIN CHONG

SHALIZA BINTI SABTU

Ingenuity Solutions Berhad Annual Report 2011

DATO FEROZ BIN A S MOIDUNNY

Ingenuity Solutions Berhad Annual Report 2011

CHAIRMANS STATEMENT (CONTD)

Ingenuity Solutions Berhad Annual Report 2011

CHAIRMANS STATEMENT (CONTD)

DATO FEROZ BIN A S MOIDUNNY

Ingenuity Solutions Berhad Annual Report 2011

AUDIT COMMITTEE REPORT

MEMBERSHIP & COMPOSITION

Fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad

Ingenuity Solutions Berhad Annual Report 2011

AUDIT COMMITTEE REPORT (CONTD)

MEETINGS AND SUMMARY OF ACTIVITIES

Audit Committee members

Ingenuity Solutions Berhad Annual Report 2011

AUDIT COMMITTEE REPORT (CONTD)

Ingenuity Solutions Berhad Annual Report 2011

STATEMENT OF CORPORATE GOVERNANCE

Ingenuity Solutions Berhad Annual Report 2011

STATEMENT OF CORPORATE GOVERNANCE (CONTD)

No.of meeting Attended / Held

Ingenuity Solutions Berhad Annual Report 2011