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CONTENTS

2 Corporate Information

3

14

Group Corporate Structure

Corporate Social Responsibility Statement

11

21

Key Personnel Profile

Statement on Corporate Governance

4

17

Directors’ Profile

Audit Committee Report

12

29

Chairman’s Statement

Additional Compliance Information

127 Statement Accompanying Notice of The Thirteenth Annual General Meeting

35

31

130

Directors’ Report and Financial Statements

Statement on Risk Management And Internal Control

Analysis of Warrant Holdings

128 Analysis of Shareholdings

125

•

Notice of The Thirteenth Annual General Meeting

Form of Proxy

Contents

2Eduspec Holdings Berhad (646756-X)

Corporate Information

AUDIT COMMITTEE

Chairman

Lim Beng Weh(Independent Non-Executive Director)

Members

Dato’ Dr. Mohd Ariff Bin Araff(Senior Independent Non-Executive Director)

Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom(Independent Non-Executive Director)

NOMINATION COMMITTEE

Chairman


Members

Dato’ Dr. Mohd Ariff Bin Araff(Senior IndependentNon-Executive Director)

Tengku Abu Bakar Ahmad Bin Tengku Abdullah(Independent Non-Executive Director)

REMUNERATIONCOMMITTEE

Chairman


Members

Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom(Independent Non-Executive Director)

Lim Een Hong(Chief Executive Officer/ Director)

Board of Directors

Wong Youn Kim(MAICSA 7018778)

Sin May Peng (MAICSA 7018354)

COMPANYSECRETARY

Crowe Horwath (AF 1018)Chartered AccountantsLevel 16, Tower C, Megan Avenue II12 Jalan Yap Kwan Seng50450 Kuala Lumpur, MalaysiaTel : 603-2788 9999 Fax : 603-2788 9998

AUDITORS

Tricor Investor Services Sdn. Bhd. Unit 32-01, Level 32, Tower A,Vertical Business Suite, Avenue 3,Bangsar South, No. 8 Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia.Tel : 603- 2783 9299 Fax : 603- 2783 9222

SHARE REGISTRAR

No. 10, Jalan 15/22,Tiong Nam Industrial Park,Section 15,40200 Shah Alam, Selangor Darul Ehsan. Tel no. : 03-5523 1781Fax no. : 03-5523 7502 website : www.eduspec.com.myEmail : [email protected]

CORPORATE OFFICE

Level 2, Tower 1, Avenue 5Bangsar South City59200 Kuala Lumpur

REGISTERED OFFICE

Malayan Banking BerhadCIMB Bank BerhadHSBC Bank MalaysiaUnited Overseas Bank Limited (Singapore) OCBC Bank Singapore

PRINCIPAL BANKERS

ACE Market of the Bursa Malaysia Securities Berhad Stock Name : EDUSPECStock Code : 0107

STOCK EXCHANGE LISTING

DATO’ DR. MOHD ARIFF BIN ARAFF(Senior Independent Non-Executive Director)

TAN SRI DATO’ HAjI ALIMUDDIN BIN HAjI MOHD DOM(Independent Non-Executive Director)

TENGKU ABU BAKAR AHMAD BIN TENGKU ABDULLAH(Independent Non-Executive Director)

LIM EEN HONG(Chief Executive Officer/ Director)

LIM SOON SEONG(Executive Director)

LIM BENG WEH(Independent Non-Executive Director)

Group Corporate Structure as at 31st December 2016

EDUSPEC SDN BHD(Malaysia Based)

100% wholly-owned Subsidiary

MULTIPLETECHNOLOGYMSC SDN BHD

(Malaysia Operation)100% wholly-owned Subsidiary

LITESPEEDEDUCATION

PROGAMMES SDN BHD

(Partners Programmes)100% wholly-owned Subsidiary

EDUSPEC ACGPTE LTD

60% Owned Subsidiary

EDUSPEC PTE LTD(Overseas Venture)


LITESPEEDEDUCATION

PTE LTD(Singapore Operations)


CLOUD DIRECTSDN BHD

30% Owned Subsidiary

EDM EDUCATIONALTECHNOLOGY (M)

SDN BHD50% Owned Subsidiary

EDUSPEC HKLIMITED


3Annual Report 2017

Group Corporate Structure as at26 January 2017


Mr. Lim Een Hong, aged 50, a Malaysian, is the Chief Executive Officer and Board member of the Company. Mr. Lim was appointed to the Board on 18 March 2010.


Mr Lim Een HongBefore coming full time into the education industry in 2008, Mr. Lim was a lawyer by profession and had been practicing continuously since 1992 as an advocate and solicitor of the High Court of Malaya. Mr. Lim was a partner in the legal practice of Messrs Eugene Tan & Co before he set up his own firm, Messrs. E H Lim, Lee & Partners in 1998. Mr. Lim had since ceased legal practice to commit his career in Education.

Since his debut into the education industry Mr. Lim has worked tirelessly to what Mr. Lim termed as institutionalizing K-12 education. Since joining the board, Mr. Lim has worked diligently to promote his ideals

in public or quasi-public education sector. At his initiative, the EHB Group is now working very closely with various multinational companies such as iCarnegie, Robomatter, Microsoft, Google and various MOEs in the Southeast Asia region. Mr. Lim has also endeavored to collaborate with other players in the industry to see a better growth in the qualitative aspects in the industry. Besides the Malaysian market, Mr. Lim also actively collaborates with his counterparts in the Philippines, Indonesia, Vietnam, and Thailand in seeking to establish regional market presence and to introduce various education solutions, programs and services to these countries in the region.

5Annual Report 2017

Dato’ Dr. Mohd Ariff bin Araff, male, aged 72, a Malaysian, is a Senior Independent Non-Executive Director of the Company. Dato’ Ariff was appointed to the Board on 19 December 2008.

Dato’ Ariff holds a Bachelor of Science (Hons.) from University of Brighton in United Kingdom, MIEM (Malaysia), P.Eng., MIEE, C. Eng. (United Kingdom), MIEEE (USA), SMP (Harvard), AMP (INSEAD), and DSNS, SPTJ.

Dato’ Ariff has extensive experience in Electric Utility Engineering and Management. Dato’ Ariff has worked in various capacities in Generation,

Transmission and Distribution Divisions of Tenaga Nasional, the biggest electric utility in Malaysia. In the 32 years Dato’ Ariff has worked with Tenaga Nasional, he has completed many varied assignments in areas of Generation and Transmission Projects, Generation Operation, Utility Planning, Transmission and Distribution Management, IT Applications in Distribution Corporate Management, Research and Development and Commercialization of Research Products.

Retired from TNB in April 2000 as Managing Director/CEO of TNB Research Dato’ Ariff was reappointed as an Advisor to TNB Research on contract basis for two years and thereafter appointed as a Director to the Board of TNB Research Sdn. Bhd. from 1997 until todate. Dato’ Ariff is a member of ASEAN Working Group on Utility Standards as well as the Working Group on Research, Development and Engineering. Internationally, Dato’ Ariff is a registered UNIDO

Expert on Energy Audit and Energy Conservation and UNCTAD Expert on Power Generation and Transmission Equipments.

In 1998, Dato’ Ariff was appointed as a Board Member of Malaysia Energy Centre (Pusat Tenaga Malaysia- PTM) until todate. Using his vast experiences in Power Engineering and Management, Dato’ Ariff helped to steer PTM to become a premier Power Research Institute. Dato’ Ariff was appointed Chairman of MIMOS Berhad, a premier government-owned R&D establishment for ICT since October 2000 until 30th December 2004. In 2002 while as Chairman of MIMOS, Dato’ Ariff was conferred the prestigious award SPTJ.

Dato’ Ariff is Co-Chairman of Doble International Engineering Committee (USA) for Transformers. Dato’ Ariff was once the President of TNB Senior Officers Association (a Trade Union) and currently holds several positions as Advisor/Chairman/Board Member of private corporations and banking institutions.

Directors’ Profile (cont’d)

Dato’ Dr. Mohd Ariff Bin Araff



Mr. Lim Soon Seong, male, aged 53, a Malaysian, has been the Executive Director of the Company since his appointment to the Board on 18 March 2010.

Mr. Lim is an engineer by profession. After graduating in Mechanical Engineering from Singapore Polytechnic in 1986, Mr. Lim was in several attachments in production, product development and sales and marketing of electronics and electrical industries.

In 1996, Mr. Lim joined Grand-Flo Electronics System Sdn Bhd. There, Mr. Lim led the sales and marketing team in identifying and developing new accounts, strategizing marketing and promotional activities such as seminars and exhibitions. One of Mr. Lim’s major focuses was to identify and establish business alliances with consultants of ERP systems such as SAP, Baan, JD Edward, Oracle and Solomon. Mr. Lim was also involved in project scooping and project management and responsible for managing business partners and principals. Mr. Lim was an Executive

Director of Grand-Flo Solutions Berhad between October 2004 and May 2008.

With the potential growth and opportunities in the education industry, Mr. Lim decided to utilize his project management and business alliance skills for the education market. Currently Mr. Lim is managing the business development of EHB Group in respect of several overseas markets to promote and market various IT education solutions, programs, products and services.

On the home front, Mr. Lim is the key personnel responsible for working with government and government-linked corporations in marketing various IT education programs, products and services. Mr. Lim is also activity working with partners to penetrate this sector of business.

Mr Lim Soon Seong

7Annual Report 2017


Lim Beng Weh, male, aged 58, a Malaysian, was appointed as an Independent Non-Executive Director of the Company on 30 July 2007 and is also Chairman of the Audit Committee of the Company.

Mr. Lim graduated with a Diploma in Financial Accounting from Tunku Abdul Rahman College, Kuala Lumpur in 1985. Subsequently, he pursued post- graduate education and was conferred a Master of Business Administration Degree by the University of Bath, United Kingdom in 1995. Mr. Lim is a member of the Malaysian Institute of Accountants and is also an associate chartered management accountant of the Chartered Institute of Management Accountants in United Kingdom.

Mr. Lim started out his career in public practice with a firm of accountants. Mr. Lim was subsequently appointed as Head of Finance and Chief Financial Officer of a couple of insurance companies between 1987 and 2004. He has been sitting on the Board of Directors of various investment holding companies since 2004 till current date.

Mr Lim Beng Weh


Tan Sri Dato’ Hj. Alimuddin Hj. Mohd. Dom, male, aged 65, a Malaysian, was appointed as an Independent Non-Executive Director of the Company on 16 June 2014.

Tan Sri Dato’ Hj. AlimuddinHj. Mohd. Dom

Tan Sri Alimuddin graduated with a Bachelor Degree in Arts (Anthropology and Sociology) from the Universiti Kebangsaan Malaysia in 1976. Tan Sri Alimuddin pursued his Masters degree in 1989 in the field of Educational Administration.

Tan Sri Alimuddin’s career as a teacher began in 1976 at SMK Tengku Menteri Changkat Jering, Perak. In 1984 Tan Sri Alimuddin was promoted as Vice Principal in SMK Dato’ Panglima Perang Kiri, Tapah Road, Perak. Tan Sri Alimuddin served as a principal in five schools among them, SM Sains Teluk Intan, Sekolah Tuanku Abdul Rahman, Ipoh and The Malay College Kuala Kangsar, Perak. Tan Sri Alimuddin was appointed Deputy Director, Schools Division in 2003 and was later promoted as the Deputy Director General, Private Higher Education Management Division in 2004. Tan Sri Alimuddin was the Head

of School Inspectorate from 2005 – 2007. On the 16th of July 2007 Tan Sri Alimuddin was appointed as the Director General for Education, Ministry of Education Malaysia.

Tan Sri Alimuddin has always been a significant contributor in the development of education and as the Chairman of Malaysian Teacher’s Foundation. Tan Sri Alimuddin has been instrumental in enhancing teacher professionalism especially in capacity building. To date Tan Sri Alimuddin’s contribution and work in the field of education continues.

In recognition for his contribution to education Tan Sri Alimuddin was conferred the Panglima Setia Mahkota which carries the title “Tan Sri” in 2009 by the DYMM YDP Agong. In 2007, Tan Sri Alimuddin was conferred the Dato’ Paduka Mahkota Perak which carries the title “Dato’” by DYMM Sultan Perak.


9Annual Report 2017

Tengku Abu Bakar Ahmad, male, aged 32, a Malaysian is the eldest son of YAM Tengku Arif Bendahara Pahang, Tengku Abdullah Ibni Almarhum Sultan Abu Bakar. Tengku was appointed as an Independent Non-Executive Director of the Company on 16 June 2014.

Tengku graduated from Swinburne University Of Technology, Hawthrone, Australia with Bachelor of Business Accounting major in Finance in 2009.

Tengku had gained working experience in insurance industry after graduation with ING Funds Bhd managing the marketing and

unit trust of the Company. In 2011, Tengku was appointed as Director of Unitab Medic Sdn Bhd, the largest medical health screening services for foreign workers in Malaysia. In 2012, Tengku was appointed to the Board of Directors of Helm Maritime Sdn Bhd and Oil and Gas Company. In 2016, Tengku was appointed as Director of Midas Mayang Sdn. Bhd.

Tengku Abu Bakar Ahmad




Additional information:• Save for Mr. Lim Een Hong and Mr. Lim Soon Seong who are siblings, none of the Director has any family

relationship with any Director and/or major shareholder of the Company;• None of the Director has any conflict of interest with the Company; and• None of the Director has any conviction for offences within past 5 years other than traffic offences, if any.

11Annual Report 2017

Key Personnel Profile

Ms Chew Gean Feun

Ms. Chew Gean Feun, female, aged 47, is the Chief Financial Officer of Eduspec Group of Companies.

Ms. Chew is responsible for all financial and fiscal management aspects of Eduspec Group of Companies. She is a key member of the Executive Management team and provides leadership and coordination in the accounting, control, risk management, business planning and budgeting efforts of the Group. Ms. Chew is also responsible for compliance with generally accepted accounting principles, regulatory requirements and oversees the financial and regulatory audits as well as all internal and operational audits for the Group. Additionally, she is also responsible for strategic

planning, budgeting and risk management, tax planning and quarterly reports to the Board and to the Audit Committee.

Prior to joining Eduspec Group in 2003 as the Financial Controller/Head of HR & Admin, Ms. Chew has extensive experience of more than 10 years in senior-level finance positions with vast exposure in managing accounting and strategic financial planning and execution, which covers operations in Malaysia and abroad.

Ms. Chew is a member of the Malaysian Institute of Accountants (MIA) and is also a fellow member of the Association of Chartered Certified Accountants (ACCA).


Chairman’s Statement

On behalf of the Board of Directors,

I am pleased to present the Annual Report of Eduspec Holdings Berhad for the financial year ended 30 September 2016.

The year 2016 has been a challenging year for the Eduspec Group, but we still foresee a strong business growth within the group in coming years. The year 2016 is an exception to the growth forecast due to circumstances which will be highlighted below. Eduspec’s continued strong growth is due to its integrated service-to-school business model which is dynamic yet flexible. The business model is capable of adapting to the unique needs and demands of the different segment of schools in the various countries. As the saying goes–one size does not fit all in education.

During the financial year ending 2016, we spent a considerable amount of resources to fully support our partners in this region namely Indonesia, the Philippines, and Vietnam. Due to the change of procurement process in the Indonesian market,

OVERVIEW


Chairman’s Statement (cont’d)

the forecasted business from that market was not realized. Nevertheless, there’s still a minimal growth in our total revenue. We started an operation in Thailand at the end of 2016, and we intend to extend our market share under the branding of Eduspec in Thailand. In every new country, we need to seed before we can harvest so we will continue this effort for the coming financial year. Moving forward, we expect things to normalize by 2017. So, better results are in the pipeline as we see a substantial growth in the overseas units especially in Vietnam and Indonesia, and we foresee this growth to continue.

In 2016, we have placed a lot of efforts in promoting STEM education. There are a lot of activities and promotions in place to integrate STEM education into schools across the region. Internally, we have streamlined our offerings into three main solutions – Programs, Digital School, and Integrated Education Solutions and Services. Eduspec’s programs are STEM-focused and include STEM with Computer Science and STEM with Robotics. For Digital School Solutions, this year we have built up more education tools for school to integrate into our hardware. The new education tools will enable us to serve our schools better.

In 2017, we are extending our business horizontally by focusing on more schools in Malaysia and the region. At the same time, we are also providing additional solutions to our current schools that we are servicing. In other business division, we have also moved to secondary schools and high schools, private and international schools as well as vocational and community colleges. In 2017, we will continue to focus on expanding our business in this segment of the market which is a new market for Eduspec.

We have always prioritized on improving ourselves in terms of business excellence and our services to schools. In 2016, World Confederation of Business (WORLDCOB) awarded Eduspec Holdings Berhad with the Business Excellence International Recognition award known as the BIZZ. Eduspec is recognized for its distinguished business excellence and being a successful leader that works innovatively and systematically in the education industry. This award will spur us to continue to strive for excellence to champion education technology in Malaysia and Asia.

In line with our strategy to expand our range of programs and services for the regional market, Eduspec Group has invested significantly in R&D. For the financial period ended 30 September 2016, there was capitalization of R&D expenditure of RM4.1 million. The Company is committed to continue investing in R&D to develop further, enhance and improve the range of educational programs and services to serve better the needs of our customers. With a bigger market share in this region, the increasing amount of R&D will be well spent.

For the financial period ended 30 September 2016, the Group recorded consolidated revenue of RM83.3 million. The Group recorded consolidated profit before tax of RM6.2 million and a consolidated profit after tax of RM5.0 million.

There was no dividend paid or proposed to be paid during the financial period ended 30 September 2016.

Having extended our presence in Indonesia, the Philippines, and Vietnam, we will continue to grow our programs and services in these markets to achieve high revenue contribution from our overseas ventures. This year we have successfully ventured into Thailand as planned. We are also looking to venture further into new markets such as Myanmar. The management expects strong growth for the existing market in Malaysia and Singapore as well as the new market in Indonesia, Vietnam, and the Philippines. At thte same time, we are also on a constant lookout for viable ventures in other countries as the PPP in Education as a concept, especially in education that relates to IT, has proven to be well accepted in many countries.

Eduspec also plans to work on the business to consumer model in 2017 where we will provide services to parents and not just to schools. Another area which Eduspec has been involved and will continue to grow is the provision of teachers training programs on IT to teachers in schools.

There is clearly a trend where governments in many developed countries have transformed their education policy for K-12, encouraging private sectors to be more involved in the public school education. We can still see a steady emergence of Charter Schools in the United States of America and Academies in the United Kingdom. In view of this trend, we clearly see an enormous opportunity in this region of Asia.

On behalf of the Board of Directors, I wish to take this opportunity to thank our shareholders, customers, business associates, partners and the regulatory authorities for their ongoing support.

We would also like to thank the management and staff for their continuous dedication and commitment to the vision and mission of the Eduspec Group.

Lastly, I wish to convey my gratitude to my fellow directors for their invaluable contribution and support.

Lim Een HongChairman

RESEARCH AND DEVELOPMENT

FUTURE PROSPECTS

ACKNOWLEDGEMENT AND APPRECIATION

FINANCIAL PERFORMANCE & DIVIDENDS


Eduspec Holdings Berhad recognizes the importance of Corporate Social Responsibility (CSR) towards education and community development. The Group is bonded together by a strong belief that our corporate philosophy is to be a caring company that has resulted in initiatives in the following areas:

(i) Equal OpportunityWe are an equal opportunity employer. There is no discrimination against employees regardless of race, religion, gender or culture. Our employees’ growth, development and safety have always been our priority. Employees are provided with a safe and healthy environment with adequate medical benefits and insurance protection. Effective and continuous trainings are given to focus on the Employees’ development and advancement.

(ii) SustainabilityWe strive to constantly improve our e-learning products through our R&D programs while using Energy Efficiency methods; this is what makes us unique. In our Green Education, we continuously promote awareness, understanding and commitment to our customers, while reducing wastage and contributing substantially towards helping our environment.

(iii) Service to CommunityAs part of our goal to give back to society, we continuously contribute to charitable causes and maintain our support covering both Corporate and Employee involvement. We understand that local businesses and communities are closely linked and that we can have a significant impact on communities as a whole. EHB Group CSR Programmes focuses on contributing to these communities both through direct financial support and through the support to our partners and staff who take part in activities organized.

Our CSR Programmes are directed at the disadvantaged community especially where children irrespective of race, culture or creed can benefit from our initiatives. Our support and the assistance would enable them to have better education to build better lives and future for themselves and society on the whole.

Learn about S.T.E.M through Playcamp

In year 2016, the Group continues its initiative to enhance students’ interest in learning by organizing Education Project in different schools.

Education Project-Learning Through Play Camp is a curriculum organized by EHB and Kaginic Corporation for children and teenagers aged 6 to 17 years old, with an objective to encourage the development of social and cognitive skills through various contents designated for different age group, involving the application of constructivist approach and thought-provoking learning tools.

Throughout the year of 2016, the group conducted the Play Camp in three schools namely SjK (C) Taman Connaught SjK (C) La Salle and SjK(C) Tshing Nian under two different program themes, Magic Science and Time Traveler, which delivers customized activities and contents to ensure different learning experience of the abstract concept of STEM (SCIENCE, TECHNOLOGY, ENGINEERING, MATHEMATICS).

Additionally, the Group and Kaginic Corporation also organized a two days session Education Project-Learning Science Camp at SK Seri Tanjung on 27th September 2016. Kaginic’s volunteers distributed tee shirts to all the students and taught them about honey and bees in the creative and fun English class. The Group’s trainer also conducted SWIPE robotics session which allow student to learn about STEM through robotics activity.

Students Learn Science Through Play atSekolah Kebangsaan Seri Tanjung

EDUCATION

Corporate Social Responsibility Statement


Eduspec Holdings recognizes the importance of community services which helps in improving and strengthening the community. Community services come in many forms and this year Eduspec with the participation from a group of its kind hearted employees initiated 2 community services activities:

On 23 April 2016, 12 volunteers from the Group visited the Persatuan Rumah Kanak-Kanak Ini Disayangi (Rumah K.I.D.S.), Subang jaya. The volunteers brought lunch and gift, and conducted educational games to let the kids explore on science related projects in a fun way. Additionally, Eduspec’s Communication team intiated a fund raising exercise from Eduspec’s employees which they managed to gather a total cash contribution of RM1,200 and donated items which worth more than RM1,300.

On 3rd September 2016, 14 volunteers of the Group joined a Home Enhancement Program for Rumah St. Vincent de Paul in Taman Melawis. The volunteers donated and helped install two wall fans in the bedroom and also found a sponsor to donate metal double decker bunk beds for the 12 children of the welfare home. KMS Engineering Construction, one of the company’s renovation contractor provided labor to paint the ceiling in the living room and a side wall. Eduspec Communications team also contributed towards this activity, at which they helped to to fix the bathroom door and painted two metal gates to wrap up the enhancement program for Rumah St. Vincent de Paul.

Visiting to Rumah K.I.D.S

Home Enhancement Program forRumah St Vincent de Paul in Klang

EMPLOYEES’ VOLUNTEERISM

Development Of Youth Creativity And Innovation

Digital Campus (DC) is a multi-tier initiative that comprises a variety of educational activities which aims to encourage learning and development of students’ creativity and innovation outside of traditional classroom settings. DC is a great way to unleash the students’ creativity and ability to think out of the box in problem solving in real life situation later on. Through the activities offered under DC such as learning through coding, digital arts, and workshop, students do not only learn about foundation in robotics, coding and digital art, but it is also an efficient way for them to build their problem solving skills in the process of learning through play.

Eduspec continues its intiative for the third consecutive year in supporting Youth On Unity (Y.O.U), a Malaysia non-profit organization, by offering the events implementation and management support. There are 3 main events under DC, which focus on Digital Arts & Animation, International Roboton and WeCode.

BRIDGING YOUTH AND DIGITAL INNOVATIONS

WeCode 2016

Corporate Social Responsibility Statement(cont’d)


“Everyone can create their own games!”

DC WeCode is a mutli-tiered programming competition which provides a platform for students to express their talents in combining art and technology for their game coding creation. In November 2016, WeCode competition was held in Jakarta where qualified candidates that have produced their very own creation will compete with talents from across the globe.

“Imagine the world at the tips of your fingers”

As the concept implied, DC International Roboton is the competition where students are challenged by technological problems and to build problems solving skills along the way with applications and progamming.

“Internet of Thing” (IOT) is the 2016 Theme of this particular competition which was held in TARUC Sport Complex, Tunku Abdul Rahman University Malaysia, Kuala Lumpur, on 4th December 2016. Students have to design, build and program their robot to demostrate solutions that solve technology-related issues.

“Create a digital masterpiece”

Digital Art and Animation Competition (DAAC) is a competition organized by Y.O.U and supported by the MoE and KBS, with an objective to elevate students’ talent and creativity to come up with their own digital masterpiece that is in line with the yearly theme. There are 3 Digital Art category organized yearly for students of different age group, which are Junior Category (6-12 years old), Senior Category (13-17 years old), and Animation Category (21 years old and below).

DAAC in KDU Glenmarie

Roboton 2016

Corporate Social Responsibility Statement(cont’d)


COMPOSITION

The Audit Committee (“AC”) currently comprises the following members:

Chairman Mr Lim Beng Weh Independent Non-Executive Director

Members Dato’ Dr Mohd Ariff Bin Araff Senior Independent Non-Executive Director

Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom Independent Non-Executive Director

The composition of the AC is in compliance with the ACE Market Listing Requirements (“AMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).

The AC shall be appointed by the Board of Directors (“Board”) from amongst the Directors and shall consist of not less than three (3) members. All members of the AC should be Non-Executive Directors with a majority of them being be Independent Directors.

The Chairman of the AC shall be an Independent Director and be elected from amongst their members. In the absence of the Chairman of the AC, the remaining members present shall elect one of their members as Chairman of the meeting. No alternate director shall be appointed as a member of the AC.

At least one (1) member of the AC:

(a) must be a member of the Malaysian Institute of Accountants (“MIA”); or

(b) if he/she is not a member of the MIA, he/she must have at least three (3) years’ working experience and

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

• must be a member of one (1) of the association of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

• fulfils such other requirement as prescribed by the Bursa Securities.

MEETING

The AC shall meet at least four (4) times a year although additional meetings may be called at any time at the AC Chairman’s discretion. In order to form the quorum for each meeting, the majority of members present must be Independent Directors.

In addition to the AC members, the Chief Executive Officer, the Head of Finance and the Internal Auditors shall normally attend the meeting as invitees. Representatives of the External Auditors shall attend meetings where matters relating to the audit of the statutory accounts are to be discussed and to present the Audited Financial Statements at the specific meeting. Other Board members, Senior Management and Employees may attend the meeting upon the invitation of the AC Chairman. The AC shall meet with the External Auditors without the presence of the Executive Directors at least twice a year.

The Company Secretary shall be the secretary of the AC. Notice of meeting and supporting documents are to be circulated to the AC members at least seven (7) days prior to the meeting so as to provide the AC members with relevant and timely information for effective discussions during the meeting. The AC Chairman shall report on each meeting to the Board.

Any resolution in writing signed by all the members of the AC shall be as valid and effectual as if it had been passed at a meeting of the AC duly convened and held and may consist of several documents in the like form, each signed by one or more members of the AC.

The AC met five (5) times during the financial year ended 30 September 2016 and the records of attendance of the AC members are set out below :

Members Number of meetings held /Number of meetings attended

Mr Lim Beng Weh 5/5

Dato’ Dr. Mohd Ariff Bin Araff 5/5

Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom 5/5

Audit Committee Report


AUTHORITY

The AC is authorised by the Board to investigate any activity within its Terms of Reference and shall have unrestricted access to information pertaining to the Group from the Internal and External Auditors, Management and all Employees. The AC is also authorised by the Board to obtain external legal or other independent professional advice, as necessary, in the discharge of its duties.

KEY RESPONSIBILITIES

The AC should assume four (4) fundamental responsibilities:

(a) Overseeing financial reporting;

(b) Assessing the internal control environment;

(c) Evaluating the internal and external audit process; and

(d) Reviewing conflict of interest situations and related party transactions.

The Board has reviewed and assessed the performance of the AC and is satisfied that the AC has discharged its functions, duties and responsibilities effectively in accordance with the Terms of Reference. The Terms of Reference of the AC can be viewed on the Company’s corporate website.

SUMMARY OF ACTIVITIES

During the financial year ended 30 September 2016, the AC in discharging its duties and functions, carried out activities which are summarized broadly as follows:

1. Financial Reporting

(a) Review of Quarterly Reports

The AC reviewed the financial positions, quarterly reports and announcements for the respective financial quarters prior to submission to the Board for consideration and approval. The 1st, 2nd, 3rd and 4th quarterly financial reports were tabled at the AC meetings held on 29 February 2016, 25 May 2016, 30 August 2016 and 29 November 2016 respectively.

The quarterly reports were prepared in compliance with the Malaysian Financial Reporting Standard (“MFRS”) and took into consideration Rule 9.22 including Appendix 9B of the Listing Requirements.

(b) Audited Financial Statements

A specific meeting was held 25 January 2017 to review the Audited Financial Statements for the financial year ended 30 September 2016.

The Audited Financial Statements were prepared in compliance with the MFRS.

(c) Statement on Risk Management and Internal Control (“SORMIC”)

The AC reviewed the SORMIC together with the Internal Auditors and External Auditors and received assurance from the Chief Executive Officer (“CEO”) and Chief Financial Controller (“CFO”) that the Group’s risk management and internal control systems are operating adequately and effectively in all material aspects before recommending the Statement to the Board.

2. External Auditors

(a) 2016 Audit Plan

On 30 August 2016, the External Auditors presented to the AC the Audit Planning Memorandum for the financial year ending 30 September 2016, outlining the audit scope, audit process and areas of emphasis. On 29 November 2016, the External Auditors presented to the AC the Audit Review Memorandum for the financial year ending 30 September 2016, outlining the major audit findings arising from the interim and final audits and the response from the Management. The External Auditors had declared and confirmed that they were independent and would be independent through their audit engagement.

The AC adopted the 2016 Audit Plan.

Audit Committee Report (cont’d)


SUMMARY OF ACTIVITIES (cont’d)

2. External Auditors (cont’d)

(b) Independent Meeting Sessions

The AC conducted independent meeting sessions with the External Auditors without the presence of the Executive Directors and the Management on 28 January 2016 and 30 August 2016.

The AC had the opportunity to assess the co-operation extended by the Management to the External Auditors, their attitude and readiness to provide documentation and explanations, as well as the adequacy of resources in the Group’s finance department.

There were no areas of major concerns raised by the External Auditors that warranted escalation to the Board. The External Auditors informed the AC that should there be any significant incidents or matters detected in the course of their audits or reviews which warrant its knowledge or intervention, it shall be reported to the AC accordingly.

At the same time, the External Auditors had the opportunity to obtain feedback from the AC on its perspectives on the areas of major concerns which it would like the External Auditors to look into.

(c) Audit and Non-Audit Fees

Before recommending the proposed audit fees and the assurance-related fees to the Board for approval, the AC evaluated the quantum of audit work, the audit process and approach, the engagement team’s credentials and experiences, their ability to provide value advices and services and to perform the audit work within the timeline.

At the AC meeting held on 25 January 2017, the AC recommended to the Board for approval of the audit fees of RM150,000 and total non-audit fees of RM5,000 in respect of the financial year ended 30 September 2016.

The Board at its meeting held on 25 January 2017 approved the audit fees and non-audit fees based on the recommendation of the AC.

(d) Re-Appointment of External Auditors

The AC carried out an assessment of the performance and suitability of the External Auditors based on the quality of services, sufficiency of resources, adequate resources and trained professional staff assigned to the audit. The AC has been generally satisfied with the independence, performance and suitability of the External Auditors based on the assessment and are recommending to the Board and shareholders for approval for the re-appointment of Messrs Crowe Horwath as External Auditors for the financial year ending 30 September 2017 at the AC meeting held on 25 January 2017.

The Board at its meeting held on 25 January 2017 approved the recommendation of the AC to re-appoint Messrs Crowe Horwath as External Auditors of the Company for the financial year ending 30 September 2017, subject to the shareholders’ approval to be sought at the forthcoming Thirteenth Annual General Meeting.

3. Internal Auditors

The main role of the internal audit function is to review the effectiveness of the system of internal control and this is performed with impartiality, proficiency and professionally.

The internal audit plan covers review of the adequacy of financial and operational controls, compliance with laws and regulations and risk monitoring activities.

The internal audit report issued for the financial year was deliberated by the AC and recommendations were duly acted upon by the Management.

The Internal Auditors had attended four (4) AC meetings during the financial year. The functional areas and operating processes reviewed by the Internal Auditors were as follows:

(a) Human Resources Functions

(b) Group Finance and Accounts Functions

(c) Dynabook Computer Centre (N.S.) Sdn Bhd

(d) Management Information Services / Information Technology of Eduspec Holdings Berhad



SUMMARY OF ACTIVITIES (cont’d)

4. RelatedPartyTransactionandConflictofInterest

At each quarterly meeting, the AC reviewed the Related Party Transaction (“RPT”) and Conflict of Interest (“COI”) situation that may arise within the Company and its Group including any transaction, procedure or course of conduct that raises questions of management integrity.

The AC reviewed and determined whether the RPT and COI situation presented by the Management is fair, reasonable, on normal commercial terms and in the best interest of the Company prior to the Company entering into such transaction.

The AC must ensure:

(a) Adequate oversight over the controls on the identification of the interested parties and identification of the RPT and possible COI situations; and

(b) Assess and address the reasonableness of the RPT and COI situation to ensure that interested parties do not abuse their powers to gain unfair advantages.

During the financial year under review, there were no RPT and COI situation reported.

INTERNAL AUDIT FUNCTION

The Group has outsourced its internal audit function to a professional internal audit services company. The primary responsibility of this internal audit function is to assist the Board and the AC in reviewing and assessing whether the management systems of internal control procedures are effective and provide recommendations to strengthen these internal control procedures so as to foster a strong management control environment.

The Internal Auditors have organized their work in accordance to the principles of the internal auditing standards covering the conduct of the audit planning, execution, documentations, communication of findings and consultation with key stakeholders on the audit concerns.

An internal audit plan is presented to the AC for approval annually before commencement of the internal audit reviews. During the quarterly meetings following the presentation of the internal audit report, the AC review the progress and coverage of the Internal Audit Plan to ensure that the audit direction remains relevant and is in line with the expectations of the AC.

Prior to the presentation of reports and findings to the AC, comments from the Management were obtained and incorporated into the internal audit findings and report. The internal audit report also covered the follow-up by the Management on the implementation of recommendations in their earlier reports.

The total cost incurred during the current financial year for the internal audit function of the Group was RM40,000 (2015 : RM40,000).



(A) INTRODUCTION

The Board of Directors (“Board”) of Eduspec Holdings Berhad (“Eduspec” or “Company”) recognises the importance of good corporate governance and continues to be committed to ensure that high standards and appropriate practices are in place to protect, enhance and support the business affairs and financial performance of Eduspec and its subsidiaries (“Group”) with the ultimate objective of safeguarding shareholders’ investment and enhancing shareholders’ value.

The Board is pleased to report the manner in which the Board has applied the principles of corporate governance and the extent of its compliance with the recommendations set out in the Malaysian Code on Corporate Governance 2012 (“Code”) during the financial year.

(B) THE BOARD OF DIRECTORS

1. Board Composition

The Code emphasizes the importance of right board composition in enhancing the Board decision making process and the transparency of policies and procedures in selection and evaluation of board members.

The present Board composition comprises Executive and Non-Executive Directors with a mix of suitably qualified and experienced professionals enabling the Board to carry out its responsibilities effectively. The Board currently consists of six (6) members, comprising one (1) Chief Executive Officer (CEO), one (1) Executive Director and four (4) Independent Non-Executive Directors. This is in compliance with the ACE Market Listing Requirements (“AMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) which requires at least two (2) Directors or one-third (1/3) of the Board, whichever is the higher, to be Independent Directors.

Mr Lim Een Hong takes on the role of Executive Chairman cum CEO of the Group, given his capability to show leadership and entrepreneurship skills, business acumen and his vast experience in the industry. The Board continues to maintain this arrangement which is in the best interest of the Group.

The Independent Non-Executive Directors which make up more than half of the Board play a crucial role in the exercise of independent assessment and objective participation in Board deliberations and decision-making process and provides effective check and balance in the functioning of the Board. All Independent Non-Executive Directors are independent of management and have no family or business relationships with the Executive Directors and major shareholders which would interfere with the exercise of their independent judgment.

The Executive Directors are responsible for the implementation of the Board’s policies and decisions and keep the Board informed of the overall operations of the Group. The Board has delegated its responsibilities for the day-to-day management of the Group’s operations and business as well as the implementation of the Board’s policies and decisions to the CEO, Executive Directors and senior management of the Company. There is a clear division of duties and responsibilities amongst them in order to maintain a balance of control, power and authority within the Group.

The Group is led and controlled by an experienced Board, many of whom have intimate knowledge of the business. The Executive Chairman is responsible for the leadership and governance of the Board, ensuring its effectiveness and orderly conduct. The Board is confident that its current size and composition is sufficient and effective in discharging its responsibilities and in meeting the Group’s current needs and requirements.

The Code recommends that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an independent director may continue to serve on the Board as a non-independent director. In the event the Board wishes to retain such director as an independent director, the Board will provide justification and seek shareholders’ approval at the forthcoming general meeting of the Company.

Dato’ Dr Mohd Ariff Bin Araff is the Independent Non-Executive Director who had served on the Board for a cumulative term of nine (9) years. The Board intends to seek shareholders’ approval at the forthcoming Annual General Meeting to retain Dato’ Dr Mohd Ariff Bin Araff as Independent Non-Executive director for the ensuing year.

The Code recommends the appointment of a Senior Independent Non-Executive Director to whom concerns may be conveyed. Dato’ Dr Mohd Ariff Bin Araff has been appointed to fulfill this role.

The Board acknowledges the benefit of board diversity as well as gender diversity to the effective functioning of the Board. Female participation will be considered when suitable candidates are identified taking into account the competencies, commitment, contribution and performance of the candidates.

Statement On Corporate Governance


(B) THE BOARD OF DIRECTORS (cont’d)

2. Board Responsibilities

The Board is responsible for the overall corporate governance of the Group, including the following specific roles and responsibilities:

(a) Establishing strategic direction, formulation strategies, business plans and significant policies;

(b) Reviewing and approving the Group’s annual budget, key operational initiatives, major investments and funding decisions;

(c) Approving quarterly and annual financial results;

(d) Overseeing the business conduct and code of ethics of the Group;

(e) Reviewing the risk management process within the Group;

(f) Reviewing the adequacy and integrity of internal control system;

(g) Responsible for corporate sustainability; and

(h) Responsible for succession planning within the Group.

The Board has delegated specific responsibilities to three (3) main committees namely the Audit Committee, Remuneration Committee and Nomination Committee, which are guided by the terms of reference approved by the Board. The ultimate responsibility for the final decisions on all matters lies with the Board.

3. BoardCharter,CodeofEthicsandWhistleblowingPolicy

3.1 Board Charter

The Board has formally established a Board Charter which sets out the roles, functions, compositions, operations and processes of the Board. The Board Charter provides guidance to the Directors in relation to the Board’s roles, duties, responsibilities and authorities which are in line with the principles of good corporate governance. The Board Charter shall be periodically reviewed, as and when necessary.

The Board Charter is accessible to the public on the Company’s corporate website.

3.2 Code of Ethics

The Board has formalised a Code of Ethics for Directors, Management and Officers of the Group to promote the corporate culture which engenders ethical conduct that permeates throughout the Group. The Code of Ethics will require all Directors to observe high ethical business standards and to act in good faith in the best interest of the Group. The Board would periodically review its Code of Ethics.

The Code of Ethics is accessible to the public on the Company’s corporate website.

3.3 Whistleblowing Policy

The Group in its effort to enhance corporate governance has put in place a Whistleblowing Policy to provide an avenue for employees and stakeholders to report genuine concerns about malpractices, unethical behaviour, misconduct or failure to comply with regulatory requirements without fear of reprisal. Any concern raised will be investigated and appropriately acted upon or addressed transparently and fairly.

The Whistleblowing Policy is accessible to the public on the Company’s corporate website.

Statement On Corporate Governance (cont’d)



4. AppointmentsandRe-Election/Re-AppointmentofDirectors

All appointment of new directors to the Board are properly made with an established and transparent procedures and in compliance with the relevant rules of the relevant authorities. The Nomination Committee is responsible for Board nomination and appointment process for appointment of new Directors and the annual assessment of the Directors proposed for re-election, re-appointment and retention of independent Directors at an Annual General Meeting.

Upon appointment, an induction programme will be given to the newly appointed Director to ensure he/she understands the nature of the Group’s business and operations.

According to the Company’s Articles of Association (“Articles”), any Director who is appointed during the year shall retire at the Company’s annual general meeting following his appointment and 1/3 of the Board who do not retire as aforesaid, will retire by rotation at every annual general meeting. The Articles further provide that every Director is subject to retirement once in every 3 calendar years and all retiring Directors are eligible for re-election. All Directors who have attained the age of 70 years are required to submit themselves for re-appointment annually at the Company’s annual general meetings in accordance with Section 129(6) of the Companies Act, 1965 (“Act”). The Articles further provide that a managing director can be appointed for a fixed term which shall not exceed three (3) years.

At the Board Meeting held on 25 January 2017, the Board approved the recommendation of the Nomination Committee that Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom and Tengku Abu Bakar Ahmad Bin Tengku Abdullah who retire by rotation pursuant to Article 80 of the Articles be eligible to stand for re-election at the forthcoming Annual General Meeting. The Board proposed that both of them be re-elected as Directors of the Company for effective functioning of the Board.

At the Board Meeting held on 25 January 2017, the Board approved the recommendation of the Nomination Committee that Dato’ Dr Mohd Ariff Bin Araff who has attained the age of seventy (70) years, who retire pursuant to Section 129(2) of the Act be eligible to stand for re-appointment at the forthcoming Annual General Meeting. The Board proposed that Dato’ Dr Mohd Ariff Bin Araff be re-appointed as Director of the Company as the Board views that it is not appropriate to prescribe age limits for retirement of a Director, rather a healthy mix of age and experience are important for effective functioning of the Board.

5. Company Secretary

The Directors have full access to the advice and services of the Company Secretary, who is suitably qualified and competent in carrying out her duties. Her role is defined and she attends all Board and Board Committee meetings and ensures that all applicable rules and regulations regarding the conduct of the Board are complied with.

The Board is satisfied with the services rendered by the Company Secretary.

6. Board Meetings

The Board meets at least four (4) times a year at quarterly intervals with additional meetings to be convened as and when necessary.

During the financial year ended 30 September 2016, the Board met five (5) times and details of the Directors’ attendance were as follows:

Directors Number of meetings held /Number of meetings attended

Lim Een Hong 5/5

Lim Soon Seong 5/5

Lim Beng Weh 5/5


Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom 5/5

Tengku Abu Bakar Ahmad Bin Tengku Abdullah 3/5




7. SupplyofInformation

Relevant information and agenda are being circulated to the Board members in advance of the Board meeting to ensure the Directors have sufficient time to obtain further information and explanations, where necessary, before the meeting so as to enable them to duly discharge their duties.

The Board has unrestricted access to any pertinent information to the Group’s affairs. Directors may seek independent professional advice at the Group’s expense if deemed reasonable and necessary. Any such request is presented to the Board for approval.

8. Board Committees

The Board delegates specific responsibilities to the Board Committees namely the Audit Committee, Nomination Committee and Remuneration Committee to support and assist in discharging its fiduciary duties and responsibilities. The respective committees report to the Board on matters considered and their recommendations thereon. The ultimate responsibility for the final decision on all matters lies with the Board.

8.1 Audit Committee (“AC”)

Details of the AC are set out on pages 17 to 20 of this Annual Report under the section “Audit Committee Report”.

8.2 Nomination Committee (“NC”)

The present members of the NC are as follows :

Chairman Dato’ Dr Mohd Ariff Bin Araff Senior Independent Non-Executive Director

Members Lim Beng Weh Independent Non-Executive Director

Tengku Abu Bakar Ahmad Bin Tengku Abdullah Independent Non-Executive Director

The NC was set up to provide a formal and transparent procedure for appointment of Directors as well as assessment on effectiveness of individual Directors and the Board as a whole.

The roles and responsibilities of the NC are as follows:

(a) Recommend to the Board, candidates for all directorships to be filled by the shareholders or the Board. In making its recommendations, the NC should consider the candidates’ skills, knowledge, expertise and experience, professionalism, integrity and in the case of candidates for the position of independent non-executive directors, the NC should also evaluate the candidates’ ability to discharge such responsibilities/functions as expected from Independent Non-Executive Directors.

(b) To identify and propose new nominees for appointment to the Board.

(c) To assess annual assessment on the effectiveness of the Board as a whole, the Board Committees and the contribution of each individual Director and Chief Executive Officer.

(d) To recommend to the Board, Directors to fill the seats on Board Committees.

(e) To review annually the Board’s mix of skills and experience and other qualities including core competencies which Non-Executive Directors should bring to the Board. This should be disclosed in the Annual Report.

(f) To determine annually whether or not a Director is Executive, Non-Executive or Independent.

(g) To recommend to the Board for contribution (or not) in service of executive Director(s) and Directors who are due for retirement by rotation.

(h) To consider, in making its recommendations, candidates for directorship proposed by the Chief Executive Officer and, within the bounds of practicability, by any other senior executive or any director or shareholder.

(i) To develop criteria to assess Independence of Directors.




8. Board Committees (cont’d)

8.2 Nomination Committee (“NC”) (cont’d)

(j) To review Board’s succession plan.

(k) To facilitate Board induction and training for newly appointed directors.

(l) To review training programs for the board.

(m) To facilitate achievement of board gender diversity policies and targets.

The NC meets at least once a year and is directly accountable to the Board.

During the financial year ended 30 September 2016, the NC met once and details of the NC members attendance were as follows :

NC Members Number of meetings held /Number of meetings attended


Lim Beng Weh 1/1

Tengku Abu Bakar Ahmad Bin Tengku Abdullah 1/1

The Terms of Reference of the NC can be viewed on the Company’s corporate website.

8.3 Remuneration Committee (“RC”)

The present members of the RC are as follows :

Chairman Lim Beng Weh Independent Non-Executive Director

Members Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom Independent Non-Executive Director

Lim Een Hong Executive Director

The objectives of the RC is to provide a formal and transparent procedure for developing remuneration policy for Directors, Group CEO/CEO and Senior Management.

The RC shall have the following responsibilities :

(a) To recommend to the Board the framework of Executive Directors’ remuneration and the remuneration package for each Executive Director, drawing from outside advice as necessary.

(b) To recommend to the Board guidelines for determining remuneration of Non-Executive Directors.

(c) To recommend to the Board any performance related pay schemes for Executive Directors.

(d) To review the scope of service contract of Executive Directors (if any).

(e) To consider the appointment of the service of such advisers or consultants as it deems necessary to fulfill its functions.

(f) To review any major changes in remuneration policy and employee benefit structures throughout the Company or Group, and if thought fit, recommend them to the Board for adoption.

The RC meets at least once a year or at such other times as the Chairman of the RC deems necessary and is directly accountable to the Board.

The Terms of Reference of the RC can be viewed on the Company’s corporate website.




9. Directors’Remuneration

The Company has adopted the objectives as recommended by the MCCG in determining the remuneration of its Executive Directors. The remuneration package is structured to attract, retain and motivate the Executive Directors to manage the Group’s operations and to align the interests of the Executive Directors with those of shareholders. The remuneration scheme is linked to performance, service seniority, experience and responsibilities.

The responsibilities for developing a formal and transparent remuneration policy and determining the remuneration package of the Executive Directors lie with the Remuneration Committee. Directors play no part in decisions on their own remuneration.

The determination of the remuneration of the Executive Directors and Non-Executive Directors is a matter decided by the Board as a whole, with the Director concerned abstaining from participating in decision in respect of the individual remuneration.

Directors’ fees are recommended by the Board for the approval by shareholders at the forthcoming Annual General Meeting.

For confidentiality, the details of the Directors’ remuneration are not disclosed for each individual Director.

The transparency and accountability aspects of corporate governance applicable to Directors’ remuneration by the best practices of the Code are deemed appropriately served by the disclosures in the ensuing paragraphs.

The details of the total Group’s remuneration of Directors for the financial year ended 30 September 2016 are categorised as follows :

Type of DirectorshipFeeRM

SalariesRM

Share-basedpayments

RM

Defined Contribution

PlanRM

TotalRM

Group :

Executive Directors - 1,045,492 410,004 83,322 1,538,818

Non-executive Directors 114,000 128,000 - 242,000

The number of Directors whose remuneration falls within the following bands is set out below :

Remuneration Band Executive Non-Executive

Below RM50,000 - 2

RM50,001 to RM100,000 - 2

RM450,001 to RM500,000 1 -

RM1,050,001 to RM1,100,000 1 -

10. Directors’Training

All Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Securities.The Directors will continue to attend other relevant training programmes, seminars and conferences to enhance their knowledge and expertise and to keep abreast with development on a continuous basis.




10. Directors’Training(cont’d)

During the financial year, the Directors had attended the following trainings :

Directors Courses/Seminar/Conference

Lim Beng Weh • Corporate Governance Breakfast Series: Improving Board Risk Oversight Effectiveness (26 February 2016 – Bursa Malaysia)

Dato’ Dr. Mohd. Ariff Bin Araff • Boardroom – MIRA Conference 2016 : Gearing Up For The Digital Future

Tan Sri Dato’ Hj. Alimuddin Hj. Mohd. Dom • Corporate Strategy Course – IERP (2 November 2015)

(C) RELATIONS WITH INVESTORS AND SHAREHOLDERS

1. DialoguewithInvestorsandShareholders

The Company recognises the importance of keeping investors and shareholders informed of the Group’s business and major developments. The Company’s annual report, quarterly financial results and announcements on material corporate exercises are the primary modes of disseminating information on the Group’s business activities and financial performance.

Investors, shareholders and members of the public are invited to access the Company’s website at www.eduspec.com.my to obtain the latest information on the Group.

2. General Meetings

The Company’s Annual General Meeting (“AGM”) serves as a principal forum for dialogue with shareholders. Shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. Extraordinary General Meetings is held as and when required.

(D) ACCOUNTABILITY AND AUDIT

1. Financial Reporting

In preparing the annual financial statements and quarterly results, the Directors are responsible to present a true and fair assessment of the Group’s position and prospects. The quarterly financial results are also reviewed by the AC to ensure adequacy of information disclosed prior to submission to the Board for approval.

The Board considers that in preparing the financial statements, the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates.

2. Internal Control

The Board has an overall responsibility in maintaining a sound risk management and internal control system that provides reasonable assurance of effective and efficient operations and compliance with internal procedures and guidelines. The Board continues to review and evaluate the effectiveness of the Group’s systems of internal control to safeguard the shareholders’ investment and the Group’s assets.

Additional information on the Group’s internal control is presented in the Statement on Risk Management and Internal Control set out on page 31 to 34 of this Annual Report.



(D) ACCOUNTABILITY AND AUDIT (cont’d)

3. RelationshipwithExternalAuditors

The Board has established a formal and transparent arrangement for maintaining appropriate relationships with the external auditors in seeking professional advice and ensuring the compliance with the appropriate accounting standards.

The AC met with the External Auditors to discuss their audit plan, audit findings and the financial statements. The AC also met with the External Auditors without the presence of Management and Executive Directors during the financial year.

Annual appointment of the external auditors is through shareholders’ resolution at the Annual General Meeting on the recommendation of the Board.

(E) STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Board is responsible to ensure that the financial statements are properly drawn up in accordance with the provisions of the Companies Act 1965 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the results and cash flows of the Group for the financial year then ended.

The Directors are satisfied that in preparing the financial statements of the Group for the year ended 30 September 2016, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The financial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies Act 1965.

(F) COMPLIANCE STATEMENT

The Company has, in all material aspects, complied with the recommendations of the Code throughout the financial year, except the following recommendations:

(a) Details of remuneration of each individual Director; (b) Chairman of the Board is not an Independent Director; and(c) Board gender diversity policy.

Deviation from the Code on item (b) and (c) above are explained on page 21 under “Board Composition” whilst deviation from the Code on item (a) above is explained on page 26 under “Directors’ Remuneration”.



1. UTILISATION OF PROCEEDS

(a) In line with the completion of the following exercised on 31 December 2013:-

• Proposed Private Placement

• Proposed Right Issue with Warrants

RM37 million in total was raised arising therefrom and the status of the utilisation of proceeds up to 30 September 2016 were as follow:

Proposed Utilisation

Expected time framefor utilisation fromdate of listing of Rights Shares and Warrants

Revised Utilisation

Plan(RM ‘000)

Unutilised proceeds

channelled to working capital

(RM ‘000)Utilisation(RM ‘000)

Balance(RM ‘000)

Expansion of existing business Within 36 months 12,966 (3,860) 9,106 -

Future business expansion Within 36 months 4,792 874 5,666 -

R & D Within 24 months 6,552 (2,013) 4,539 -

Working capital of the Group Within 36 months 11,907 5,216 17,123 -

Estimated expenses for the Proposals

Within 3 months 800 (217) 583 -

Total 37,017 - 37,017 -

(b) In line with the completion of the following exercised on 20 March 2015:-


RM24 million in total was raised arising therefrom and the status of the utilisation of proceeds up to 31 December 2015 were as follow:


Expected time frame for utilisation fromdate of listing of Private Placement

Revised Utilisation

Plan(RM ‘000)

Unutilised proceeds



Balance(RM ‘000)

Acquistion of property Within 12 months 2,692 - 2,692 -

Future business expansion Within 36 months 4,000 - - 4,000

R & D Within 24 months 3,000 (188) 2,812 -

Working capital of the Group Within 36 months 14,125 188 14,313 -


Within 3 months 700 - 700 -

Total 24,517 - 20,517 4,000

Additional Compliance Information


1. UTILISATION OF PROCEEDS (cont’d)

(c) In line with the completion of the following exercised on 2 June 2016:-


RM16 million in total was raised arising therefrom and the status of the utilisation of proceeds up to 30 September 2016 were as follow:


Expected time frame for utilisation fromdate of listing of Private Placement

Revised Utilisation

Plan(RM ‘000)

Unutilised proceeds



Balance(RM ‘000)

STEM Robotics & STEM CS Within 24 months 7,000 (2,641) 4,359 -

Future business expansion Within 12 months 1,000 - - 1,000

Acquisition of system Within 12 months 2,000 - - 2,000

Working capital of the Group Within 12 months 6,225 2,655 8,755 125


Within 3 months 110 (14) 96 -

Total 16,335 - 13,210 3,125

2. NON-AUDIT FEES

Non-audit fees paid to the External Auditors, Messrs Crowe Horwath for the financial year ended 30 September 2016 was RM 5,000.

3. PROFIT FORECAST

The Company did not issue any profit forecast for the financial year ended 30 September 2016.

4. MATERIAL CONTRACTS

There were no material contracts entered into by the Company and its subsidiary involving Directors’ and Substantial Shareholders’ interest either existing or entered into during the financial year ended 30 September 2016.

5. REVALUATION OF LANDED PROPERTIES

The Group did not have a revaluation policy on landed properties for the financial year ended 30 September 2016.

Additional Compliance Information (cont’d)


INTRODUCTION

The Board of Directors (“the Board”) of Eduspec Holdings Berhad (“the Company”) is pleased to present the Statement on Risk Management and Internal Control which outlines the nature and scope of risk management and the internal control systems of Eduspec Holdings Berhad and its subsidiaries (“the Group”) for the financial year ended 30 September 2016 pursuant to Paragraph 15.26(b) of the Ace Market Listing Requirements of Bursa Malaysia Securities Berhad (“AMLR”), Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) and “Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers” .

RESPONSIBILITY FOR RISK MANAGEMENT AND INTERNAL CONTROLS

The Board maintains a system of risk management and internal controls to safeguard shareholders’ investments and the Group’s assets. The Board is committed to establish an appropriate control environment and also to review the adequacy and integrity of the system of risk management and internal controls. Due to the limitations inherent in any system of risk management and internal controls, these systems, though implemented, are designed to manage, rather than to eliminate the risk of failure to achieve corporate objectives. Accordingly, the systems can only provide reasonable but not absolute assurance against material misstatement or loss.

The Board confirms that there is an underlying and ongoing process in the Group for the identification, evaluation and mitigation of its significant risks. The Board further confirmed that these processes are being regularly reviewed and accords with the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.

The Board has undertaken a review of the adequacy and effectiveness of the risk management and internal control system and concluded that the risk management and internal control system is adequate and effective. Further, the Board has obtained assurance from the Chief Executive Officer and Chief Financial Controller that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group.

RISK MANAGEMENT

The Board recognizes that risk management is an integral part of the Group’s business operations and has put in place the Risk Management Framework within the Group as an ongoing process for identifying, evaluating, monitoring and managing the significant risk affecting the achievement of its business objectives. To this end, the Board has formalised a Risk Management Framework by implementing an on-going process of identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives and has taken into account the guidance of the Malaysian Code on Corporate Governance.

Risk Profile consists of principal business risks are identified and documented in the Registry of Risk. The Registry of Risk identified the risk factors, statement of risk, risk owner, impact, likelihood and risk control actions. The management of risks in the daily business operation is assigned to management team and significant risks are identified and related mitigating responses as well as the corresponding internal control measures.

The risk identification process involving reviewing and identifying the possible risk exposure arising from changes both external business environment and internal operating conditions. The risk measurement guidelines consist of financial and non-financial qualitative measures of risk consequences based on the risk likelihood rating and risk impact rating. The risk control actions are prioritized and implemented as per the risk control actions assigned to the respective risk owners.

The Board of Directors is of the view that there is an on-going process for identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives in their daily activities throughout the financial year and up to the date of approval of the Annual Report.

INTERNAL AUDIT FUNCTION

The Group has outsourced its internal audit function to an independent professional services firm to perform regular and systematic review of the risk management and internal control system of the Group. The Audit Committee acknowledges that an independent and adequately resourced internal audit function is required to provide assurance on the effectiveness of the system of the internal control in addressing the risks identified. The internal auditor reports directly to the Audit Committee on a quarterly basis. The Audit Committee is chaired by an Independent Non-Executive Director and its members comprise of Non-Executive Directors.

The internal auditor primarily acts as an assurance unit highlighting significant audit findings, areas for improvement, management comment on the audit findings and subsequently monitors the implementation of its recommended corrective actions.

Statement On Risk Management AndInternal Control


Statement On Risk Management AndInternal Control (cont’d)

INTERNAL AUDIT FUNCTION (cont’d)

The Board confirms that the Group has an adequate and conducive control environment for it to accomplish its business objectives. The Group’s internal control system encompasses the Board and its various Board Committees with its specific Terms of Reference, Executive Management that is accountable for all its actions and also various monitoring and review procedures that is embedded in the Group’s processes. The Board reviews these control processes regularly to ensure that an effective system of internal control is maintained within the Group.

For the financial year ended 30 September 2016, four (4) internal audit review and follow up reviews had been carried out by Internal Auditors:-

Audit PeriodReporting Month

Name of EntityAudited Audited Areas

1st Quarter (Oct 2015 – Dec 2015)

Feb 2016 Eduspec Holdings Berhad

Internal Audit Review:-

• Billing process and procedures• Collection process and procedures• Payment process and procedures• Cash flow management• Staff claims process and procedures• Debit note and credit note• Inter-company billing• Capital asset management• Capitalization of development expenditure• Research & development expenditure• Related Party Transactions, if any

Follow-up actions on previously reported audited findings:-

• IA Reported in November 2015 – Dynabook Computer Centre (Melaka) Sdn Bhd.

• IA Reported in August 2015 – Eduspec Holdings Berhad.• IA Reported in May 2015 – Multiple Technology MSC

Sdn Bhd.• IA Reported in February 2015 – Dynabook Computer

Centre (Sabah) Sdn Bhd.• IA Reported in November 2014 – Dynabook Computer

Centre (Penang) Sdn Bhd.• IA Reported in November 2013 – Dynabook Computer

Centre (M) Sdn Bhd.

2nd Quarter (Jan 2016 – Mar 2016)

May 2016 Dynabook Computer Centre (Negeri Sembilan) Sdn Bhd


• Sales & Marketing • Contract Administration• Cash handling• Collection• IT learning Services• Stock management (workbooks)• Asset Management


• IA Reported in February 2016 – Eduspec Holdings Berhad.





Centre (Penang) Sdn Bhd.• IA Reported in November 2013 – Dynabook Computer

Centre (M) Sdn Bhd.


Audit PeriodReporting Month

Name of EntityAudited Audited Areas

3rd Quarter (Apr 2016 –Jun 2016)

Aug 2016 Eduspec Holdings Berhad


• Software and Hardware Maintenance and Management• Software Licensing Management• Purchasing / Disposing of Computer Software and

Hardware• Virus Protection and Security• Disaster Recovery / Business Continuity Planning• Access Security and Data Integrity• Data Backup and Restore Policy and Procedures


• IA Reported in May 2016 – Dynabook Computer Centre (N.S.) Sdn Bhd.

• IA Reported in February 2016 – Eduspec Holdings Berhad.





Centre (Penang) Sdn Bhd.

4th Quarter (Jul 2016 –Sep 2016)

Nov 2016 Dynabook Computer Centre (M) Sdn Bhd & Creative Educare (M) Sdn Bhd


• Sales & Marketing • Contract Administration• Cash handling• Collection• IT learning Services• Stock management (workbooks)• Asset Management• Robotics (under Creative Educare (M) Sdn Bhd


• IA Reported in August 2016 – Eduspec Holdings Berhad.• IA Reported in May 2016 – Dynabook Computer Centre

(N.S.) Sdn Bhd.• IA Reported in February 2016 – Eduspec Holdings

Berhad.• IA Reported in November 2015 – Dynabook Computer

Centre (Melaka) Sdn Bhd.• IA Reported in August 2015 – Eduspec Holdings Berhad.• IA Reported in May 2015 – Multiple Technology MSC

Sdn Bhd.• IA Reported in November 2014 – Dynabook Computer

Centre (Penang) Sdn Bhd.



The key elements of the Group’s internal control system are described below:

• OrganisationStructure

The Group has a well-defined organisational structure with clearly defined lines of accountability, delegation of responsibility and level of authorisation for all aspects of the business have been laid down and communicated throughout the Group.

• StandardOperatingPoliciesandProcedures(“SOPP”)

The respective departments have established SOPPs to serve as a general management guide for daily operations. These policies and procedures are reviewed on a regular basis to reflect changing risks or to resolve any operational deficiencies. It is also to promote efficiency and accountability for the Group.

• AuthorityMatrix

Authority Matrix has been established within the Group to provide a functional framework of authority in approving purchases and expenses.

• StaffTrainingandDevelopmentProgrammes

Training and development programmes are established to ensure that the employees are constantly kept up-to-date with the constant technological changing environment and knowledge in order to be competent in the industry in line with achieving the Group’s business objectives.

The Group’s system of internal control does not apply to associated company and a joint venture where the Group does not have full management control over them.

ASSURANCE FROM MANAGEMENT

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

REVIEW OF THE STATEMENT BY THE EXTERNAL AUDITORS

As required by paragraph 15.23 of the ACE Market Listing Requirements of Bursa Securities, the External Auditors have reviewed this Statement on Risk Management and Internal Control. Their limited assurance review was performed in accordance with Recommended Practice Guide (“RPG”) 5 (Revised): Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report, issued by the Malaysian Institute of Accountants.

Based on their review, the External Auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is not prepared, in all material respects, in accordance with the disclosures required by paragraph 41 and 42 of the Statement on Risk Management and Internal Control: Directors of Listed Issuers to be set out, nor is factually inaccurate.

CONCLUSION

For the financial year ended 30 September 2016 and up to the date of approval of this statement, the Board is of the opinion that the risk management and internal control system currently in place is adequate and effective to safeguard the Group’s interests and assets. For the coming year, the Board will continually assess the adequacy and effectiveness of the Group’s system of internal control and to strengthen it, as and when necessary. This statement is made in accordance with the resolution passed by the Board dated 25 January 2017.


CONTENTS

36 Directors’ Report

41

45

55

Statement by Directors

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Statement of Cash Flows

42

53

50

Independent Auditors’ Report

Statement of Profit or Loss and Other Comprehensive Income

Consolidated Statement of Cash Flows

41

46

57

Statutory Declaration

Consolidated Statement of Changes in Equity

Notes to the Financial Statements

44

54

52

Consolidated Statement of Financial Position

Statement of Changes in Equity

Statement of Financial Position

Financial STATEMENTS


The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 30 September 2016.

PriNCiPAl ACTiviTiES

The principal activities of the Company are investment holding and the development and provision of information technology (“IT”) learning programs and educational services. The principal activities of the subsidiaries are disclosed in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

rESulTS

THE GrOuP THE COMPANY rM rM Profit/(Loss) after taxation for the financial year 5,021,480 (3,465,844) Attributable to:- Owners of the Company 4,622,454 (3,465,844)Non-controlling interests 399,026 - 5,021,480 (3,465,844)

DiviDENDS

No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year.

rESErvES AND PrOviSiONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.

iSSuES OF SHArES AND DEbENTurES

During the financial year:-

(a) there were no changes in the authorised share capital of the Company;

(b) the Company increased its issued and paid-up share capital from RM84,586,699 to RM90,851,259 by:-

(i) a private placement of 60,500,000 new ordinary shares of RM0.10 each at an issue price of RM0.27 for the purpose of working capital; and

(ii) the issuance of 169,700 new ordinary shares of RM0.10 each at an exercise price of RM0.28 per share pursuant to the Employees’ Share Option Scheme of the Company.

(iii) the issuance of 1,975,900 new ordinary shares of RM0.10 each at an exercise price of RM0.23 per share pursuant to the Employees’ Share Option Scheme of the Company.

The new ordinary shares issued rank pari passu in all respects with the existing shares of the Company; and

(c) there were no issues of debentures by the Company.

OPTiONS GrANTED OvEr uNiSSuED SHArES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company except for the share options granted pursuant to the Employees’ Share Option Scheme.

Directors’ Report


EMPlOYEES’ SHArE OPTiON SCHEME

The Employees’ Share Option Scheme of the Company (“ESOS”) is governed by the ESOS By-Laws and was approved by shareholders on 18 August 2011. The ESOS is to be in force for a period of 3 years effective from 18 January 2012, provided always that on or before the expiry thereof, the Board shall have the discretion upon recommendation of the ESOS Committee whether or not to extend in writing the tenure of the ESOS for another two (2) years or such shorter period as it deems fit immediately from the expiry of the first three (3) years.

On 10 October 2014, the Board approved the extension of the tenure of the ESOS for another two (2) years from 18 January 2016 to 17 January 2017.

The main features of the ESOS are disclosed in Note 22 (f) to the financial statements.

On 2 November 2015, the Company granted 17,412,750 share options under the ESOS.

These options expire on 17 January 2017 and are exercisable on the specified exercise period and stated in the By Law subject to the options being vested.

The option prices and the details in the movement of the options granted are as follows:-

Number Of Options Over Ordinary Shares Of rM 0.10 EachDate of Offer Exercise At At Price 1.10.2015 Granted Exercised Forfeited 30.9.2016 10 October 2014 RM0.23 17,632,300 - (1,975,900) (969,500) 14,686,9002 November 2015 RM0.28 - 17,412,750 (169,700) (1,985,000) 15,258,050 17,632,300 17,412,750 (2,145,600) (2,954,500) 29,944,950

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the name of the option holders. This information has been separetely filed with the Companies Commission of Malaysia on 24 January 2017.

WArrANTS

The Warrants are constituted by the Deed Poll dated 19 November 2013 (“Deed Poll”).

On 24 December 2013, 382,750,000 Warrants were issued free by the Company pursuant to the Rights Issue on the basis of one point five (1.5) Warrants for every two (2) existing ordinary shares of RM0.10 each held.

Salient features of the Warrants are as follows:

(a) Each Warrant entitles the registered holder thereof (“Warrant holders”) to subscribe for one (1) new ordinary share of RM0.10 each in the Company at the exercise price of RM0.18, which may be exercised at any time from the date of issuance to the close of business on the market day immediately preceding the date which is the fifth anniversary from the date of the issuance of Warrants (“Exercise Period”);

(b) Any Warrants not exercised during the Exercise Period will thereafter lapse and cease to be valid for any purpose;

(c) Warrant holders must exercise the Warrants in accordance with the procedures set out in the Deed Poll and shares allotted and issued upon such exercise shall rank pari passu in all respects with the then existing shares of the Company, and shall be entitled for any dividends, rights, allotments and/or other distributions after the issue and allotment thereof;

(d) The Warrant holders are not entitled to any voting rights or to participate in any distribution and/or offer of further securities in the Company until and unless such Warrant holders exercise their warrants for new shares in the Company; and

(e) The Deed Poll and accordingly the Warrants, are governed by and shall be construed in accordance with the laws of Malaysia.

Directors’ Report (cont’d)


WArrANTS (CONT’D)

The movement in the Warrants since the listing and quotation thereof is as follows:

Entitlement For Ordinary Shares Of rM0.10 Each At At 1.10.2015 issued Exercised 30.9.2016

Number of unexercised Warrants 382,750,000 - - 382,750,000 bAD AND DOubTFul DEbTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that there are no known bad debts and that adequate allowance had been made for impairment losses on receivables.

At the date of this report, the directors are not aware of any circumstances that would require the writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements.

CurrENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their value as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise.

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

vAluATiON METHODS

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

CONTiNGENT AND OTHEr liAbiliTiES

The contingent liability is disclosed in Note 42 to the financial statements. At the date of this report, there does not exist:-

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

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

No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet its obligations when they fall due.

CHANGE OF CirCuMSTANCES

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



iTEMS OF AN uNuSuAl NATurE

The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.

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, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.

DirECTOrS

The directors who served since the date of the last report are as follows:-

Lim Een Hong Lim Soon Seong Lim Beng WehDato’ Dr. Mohd. Ariff Bin AraffTan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom Tengku Abu Bakar Ahmad Bin Tengku Abdullah

DirECTOrS’ iNTErESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:-

Number Of Ordinary Shares Of rM0.10 Each At At Shares in the Company 1.10.2015 bought Sold 30.9.2016

Direct InterestLim Een Hong 250,000 - - 250,000

Indirect Interest: Dato’ Dr. Mohd. Ariff Bin Araff # 1,800,000 - - 1,800,000 The Corporate Shareholders* (a) Victory Solutions (M) Sdn. Bhd. (“VSM”) Direct Interest Lim Een Hong 55,000 - - 55,000 The Company Indirect Interest Lim Een Hong 118,797,514 - (3,000,000) 115,797,514 (b) Victory Solutions Holdings Sdn. Bhd.(“VSH”) Direct Interest Lim Een Hong 1 49,999 - 50,000 The Company Indirect Interest Lim Een Hong 47,046,300 - - 47,046,300 # By virtue of his son, Ismael Alias Ariff Bin Mohd Ariff, Dato’ Dr. Mohd. Ariff Bin Araff is deemed to have interests in shares in the

Company in accordance with Section 134(12)(c) of the Companies Act 1965.

* By virtue of his shareholdings in VSM and VSH respectively, Lim Een Hong is deemed to have interests in shares in the Company and its related corporations to the extent of the Company’s interest, in accordance with Section 6A of the Companies Act 1965.



DirECTOrS’ iNTErESTS (CONT’D)

Number Of Warrants At At 1.10.2015 bought Sold 30.9.2016

Indirect Interests Lim Een Hong 54,814,450 - (10,000,000) 44,814,450Dato’ Dr. Mohd. Ariff Bin Araff 900,000 - - 900,000

Number Of Options Over Ordinary Shares Of rM0.10 Each At At 1.10.2015 Granted Exercised 30.9.2016

Share Options Of The Company Lim Een Hong 716,700 1,883,350 - 2,600,050Lim Soon Seong 1,250,000 1,275,000 - 2,525,000Lim Beng Weh 300,000 400,000 (300,000) 400,000Dato’ Dr. Mohd. Ariff Bin Araff 300,000 400,000 - 700,000Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom - 250,000 - 250,000Tengku Abu Bakar Ahmad Bin Tengku Abdullah - 250,000 - 250,000

The other directors holding office at the end of the financial year did not have any interest in shares in the Company or its related corporations during the financial year.

DirECTOrS’ bENEFiTS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with companies in which certain directors have substantial financial interests as disclosed in Note 45 to the financial statements.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

SiGNiFiCANT EvENTS DuriNG AND SubSEQuENT TO THE FiNANCiAl YEAr

The significant events during and subsequent to the financial year are disclosed in Note 47 to the financial statements.

AuDiTOrS

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.

SiGNED iN ACCOrDANCE WiTH A rESOluTiON OF THE DirECTOrS DATED 25 January 2017.

lim Een Hong

lim Soon Seong



STATEMENT bY DirECTOrSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT 1965

We, Lim Een Hong and Lim Soon Seong, being two of the directors of Eduspec Holdings Berhad, state that, in the opinion of the directors, the financial statements set out on pages 44 to 123 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company at 30 September 2016 and of their financial performance and cash flows for the financial year ended on that date.

The supplementary information set out in Note 49, which is not part of the financial statements, is prepared in all material respects, 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 in accordance with a resolution of the directors dated 25 January 2017.

lim Een Hong lim Soon Seong

STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT 1965

I, Lim Een Hong, I/C No. 670728- 04-5467 being the director primarily responsible for the financial management of Eduspec Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 44 to 123 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared byLim Een Hong, I/C No. 670728-04-5467at Kuala Lumpur in Federal Territory on this 25 January 2017

lim Een HongBefore me

lai Din (No.W668)Commissioner for Oaths


rEPOrT ON THE FiNANCiAl STATEMENTS

We have audited the financial statements of Eduspec Holdings Berhad, which comprise the statements of financial position as at 30 September 2016 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 44 to 123.

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 Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 30 September 2016 and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

rEPOrT ON OTHEr lEGAl AND rEGulATOrY rEQuirEMENTS

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

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

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 5 to the financial statements.

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

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

Independent Auditors’ Report


OTHEr rEPOrTiNG rESPONSibiliTiES

The supplementary information set out in Note 49 on page 124 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.

Crowe Horwath lee Kok WaiFirm No.: AF 1018 Approval No.: 02760/06/2018 JChartered Accountants Chartered Accountant

25 January 2017

Kuala Lumpur

Independent Auditors’ Report (cont’d)


2016 2015 NOTE rM rM ASSETS NON-CurrENT ASSETS Investments in associates 6 416,470 468,451Investment in a joint venture 7 275,411 181,835Other investment 8 357,648 -Property and equipment 9 25,556,043 25,703,003Intangible assets 10 8,904,161 6,962,100Goodwill on consolidation 11 6,068,671 6,068,671Deferred tax assets 12 142,470 102,281

41,720,874 39,486,341 CurrENT ASSETS Inventories 13 1,530,784 1,659,567Trade receivables 14 81,766,257 54,908,732Other receivables, deposits and prepayments 15 53,066,904 18,855,002Amount owing by associates 17 4,676,536 3,062,325Amount owing by a joint venture 18 926,598 922,726Tax recoverable 556,797 390,189Short-term funds 19 - 2,215,463Fixed deposits with licensed banks 20 5,320,968 5,226,948Cash and bank balances 3,558,667 9,384,561 151,403,511 96,625,513

TOTAl ASSETS 193,124,385 136,111,854

EQuiTY AND liAbiliTiES EQUITY Share capital 21 90,851,259 84,586,699Reserves 22 31,445,236 14,677,804 TOTAl EQuiTY ATTribuTAblE TO OWNErS OF THE COMPANY 122,296,495 99,264,503NON-CONTrOlliNG iNTErESTS 441,465 33,415 TOTAl EQuiTY 122,737,960 99,297,918 NON-CurrENT liAbiliTiES Long-term borrowings 23 23,214,416 13,346,360Deferred tax liabilities 12 483,250 350,998 23,697,666 13,697,358 CurrENT liAbiliTiES Trade payables 26 7,662,137 6,096,518Other payables and accruals 27 32,112,897 11,334,754Amount owing to associates 17 22,977 -Amount owing to a joint venture 18 176,816 98,599Short-term borrowings 28 3,226,544 3,819,715Bank overdrafts 32 3,078,212 1,297,082Derivative liability 33 - 35,990Provision for taxation 409,176 433,920 46,688,759 23,116,578 TOTAl liAbiliTiES 70,386,425 36,813,936 TOTAl EQuiTY AND liAbiliTiES 193,124,385 136,111,854

The annexed notes form an integral part of these financial statements.

Consolidated Statement of Financial PositionAt 30 September 2016


2016 2015 NOTE rM rM

rEvENuE 34 83,271,702 77,192,523 COST OF SAlES (45,581,060) (36,584,552) GrOSS PrOFiT 37,690,642 40,607,971 OTHEr iNCOME 6,575,690 10,921,631 44,266,332 51,529,602 ADMiNiSTrATivE EXPENSES (26,070,687) (21,309,025) SElliNG AND DiSTribuTiON EXPENSES (4,613,996) (4,907,548) OTHEr EXPENSES (6,159,656) (12,438,719) FiNANCE COSTS (1,375,621) (470,647) SHArE OF rESulTS, NET OF TAX - Associates 79,986 (347,648)- Joint venture 93,576 57,320 PrOFiT bEFOrE TAXATiON 35 6,219,934 12,113,335 iNCOME TAX EXPENSE 36 (1,198,454) (792,699) PrOFiT AFTEr TAXATiON 5,021,480 11,320,636 OTHEr COMPrEHENSivE iNCOME Items that may be reclassified subsequently to profit or loss Foreign currency translation differences (342,781) 719,123 Items that will not be reclassified subsequently to profit or loss Actuarial gain/(loss) of defined benefit plan 15,272 (1,180) TOTAL OTHER COMPREHENSIVE INCOME (327,509) 717,943 TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR 4,693,971 12,038,579

PrOFiT AFTEr TAXATiON ATTribuTAblE TO: Owners of the Company 4,622,454 9,955,937Non-controlling interests 399,026 1,364,699 5,021,480 11,320,636 TOTAl COMPrEHENSivE iNCOME ATTribuTAblE TO: Owners of the Company 4,285,921 10,804,227Non-controlling interests 408,050 1,234,352 4,693,971 12,038,579 EArNiNGS PEr SHArE (SEN) - Basic 37 0.53 1.24- Diluted 37 0.48 1.11


Consolidated Statement of Profit or Loss and Other Comprehensive IncomeAt 30 September 2016


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) (1

,180

) -

(1,1

80)

- F

orei

gn c

urre

ncy

t

rans

latio

n di

ffere

nces

-

- -

- -

849,

470

- -

849,

470

(130

,347

) 71

9,12

3

Tota

l com

preh

ensi

ve in

com

e f

or th

e fin

anci

al y

ear

- -

- -

- 84

9,47

0 -

9,95

4,75

7 10

,804

,227

1,

234,

352

12,0

38,5

79

Bala

nce

carr

ied

forw

ard

76,5

49,9

99

6,00

2,05

6 (1

8,57

0,00

0)

546,

778

10,1

10,3

77

396,

650

- (8

11,5

94)

74,2

24,2

66

33,4

15

74,2

57,6

81

The

anne

xed

note

s fo

rm a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

Consolidated Statement of Changes in EquityAt 30 September 2016


N

ON-D

iSTri

buTA

blE r

ESEr

vES

DiST

ribu

TAbl

E

rE

SErv

ES

FO

rEiG

N EM

PlOY

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(ACC

uMul

ATED

AT

Trib

uTAb

lE

rE

vErS

E CA

PiTA

l

EXCH

ANGE

SH

ArE

lOSS

ES)/

TO O

WNE

rS

NON-

SH

ArE

SHAr

E AC

QuiSi

TiON

rEDE

MPTiO

N W

ArrA

NT

TrAN

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iON

OPT

iON

rETA

iNED

OF

THE

CONT

rOll

iNG

TOTA

l

CAPi

TAl

PrEM

iuM

rESE

rvE

rESE

rvE

rESE

rvE

rESE

rvE

rESE

rvE

EArN

iNGS

CO

MPAN

Y iN

TErE

STS

EQui

TY

NOTE

rM

rM

rM

rM

rM

rM

rM

rM

rM

rM

rM

Bala

nce

brou

ght f

orw

ard

76

,549

,999

6,

002,

056

(18,

570,

000)

54

6,77

8 10

,110

,377

39

6,65

0 -

(811

,594

) 74

,224

,266

33

,415

74

,257

,681

Con

tribu

tions

by

and

dis

tribu

tions

to o

wne

rs

of t

he C

ompa

ny:

-

Issu

ance

of n

ew

s

hare

s

-

Priv

ate

plac

emen

t 21

&22

7,

662,

040

16,8

56,4

88

- -

- -

- -

24,5

18,5

28

- 24

,518

,528

- E

xpen

ses

on

issu

ance

of p

rivat

e

plac

emen

t 22

-

(1,5

15,6

25)

- -

- -

- -

(1,5

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25)

- (1

,515

,625

)

- Em

ploy

ees’

sha

re

optio

n sc

hem

e:

- g

rant

ed

22

- -

- -

- -

1,3

26,6

30

- 1

,326

,630

-

1,3

26,6

30

- e

xerc

ised

21

&22

37

4,66

0 82

2,17

3 -

- -

- (3

35,1

15)

- 86

1,71

8 -

861,

718

- for

feite

d 22

-

- -

- -

- (1

51,0

14)

- (1

51,0

14)

- (1

51,0

14)

Tota

l tra

nsac

tions

w

ith o

wne

rs

8,

036,

700

16,1

63,0

36

-

- -

- 84

0,50

1 -

25,0

40,2

37

- 25

,040

,237

Bala

nce

at 3

0.9.

2015

84,5

86,6

99

22,1

65,0

92 (

18,5

70,0

00)

546,

778

10,1

10,3

77

396,

650

840,

501

(811

,594

) 99

,264

,503

33

,415

99

,297

,918

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anne

xed

note

s fo

rm a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

Consolidated Statement of Changes in EquityAt 30 September 2016 (cont’d)


N

ON-D

iSTri

buTA

blE r

ESEr

vES

DiST

ribu

TAbl

E

rE

SErv

ES

FO

rEiG

N EM

PlOY

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(ACC

uMul

ATED

AT

Trib

uTAb

lE

rE

vErS

E CA

PiTA

l

EXCH

ANGE

SH

ArE

lOSS

ES)/

TO O

WNE

rS

NON-

SH

ArE

SHAr

E AC

QuiSi

TiON

rEDE

MPTiO

N W

ArrA

NT

TrAN

SlAT

iON

OPT

iON

rETA

iNED

OF

THE

CONT

rOll

iNG

TOTA

l

CAPi

TAl

PrEM

iuM

rESE

rvE

rESE

rvE

rESE

rvE

rESE

rvE

rESE

rvE

EArN

iNGS

CO

MPAN

Y iN

TErE

STS

EQui

TY

rM

rM

rM

rM

rM

rM

rM

rM

rM

rM

rM

Bala

nce

at 3

0.9.

2015

/1.1

0.20

15 8

4,58

6,69

9 22

,165

,092

(18

,570

,000

) 54

6,77

8 10

,110

,377

39

6,65

0 84

0,50

1 (8

11,5

94)

99,2

64,5

03

33,4

15

99,2

97,9

18

Profi

t afte

r tax

atio

n fo

r the

fi

nanc

ial y

ear

- -

- -

- -

- 4,

622,

454

4,62

2,45

4 39

9,02

6 5,

021,

480

Oth

er c

ompr

ehen

sive

inco

me

for

the

finan

cial

yea

r:

-

Act

uaria

l los

s of

defi

ned

ben

efit p

lan

- -

- -

- -

- 15

,272

15

,272

-

15,2

72 -

For

eign

cur

renc

y

tra

nsla

tion

diffe

renc

es

- -

- -

- (3

61,5

81)

- -

(361

,581

) 9,

024

(352

,557

)

Tota

l com

preh

ensi

ve in

com

e f

or th

e fin

anci

al y

ear

- -

- -

- (3

61,5

81)

- 4,

637,

726

4,27

6,14

5 40

8,05

0 4,

684,

195

Bala

nce

carr

ied

forw

ard

84,5

86,6

99

22,1

65,0

92 (

18,5

70,0

00)

546,

778

10,1

10,3

77

35,0

69

840,

501

3,82

6,13

2 10

3,54

0,64

8 44

1,46

5 10

3,98

2,11

3

The

anne

xed

note

s fo

rm a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.



N

ON-D

iSTri

buTA

blE r

ESEr

vES

DiST

ribu

TAbl

E

rE

SErv

ES

FO

rEiG

N EM

PlOY

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(ACC

uMul

ATED

AT

Trib

uTAb

lE

rE

vErS

E CA

PiTA

l

EXCH

ANGE

SH

ArE

lOSS

ES)/

TO O

WNE

rS

NON-

SH

ArE

SHAr

E AC

QuiSi

TiON

rEDE

MPTiO

N W

ArrA

NT

TrAN

SlAT

iON

OPT

iON

rETA

iNED

OF

THE

CONT

rOll

iNG

TOTA

l

CAPi

TAl

PrEM

iuM

rESE

rvE

rESE

rvE

rESE

rvE

rESE

rvE

rESE

rvE

EArN

iNGS

CO

MPAN

Y iN

TErE

STS

EQui

TY

NOTE

rM

rM

rM

rM

rM

rM

rM

rM

rM

rM

rM

Bala

nce

brou

ght f

orw

ard

84

,586

,699

22

,165

,092

(18

,570

,000

) 54

6,77

8 10

,110

,377

35

,069

84

0,50

1 3,

826,

132

103,

540,

648

441,

465

103,

982,

113

Con

tribu

tions

by

and

dis

tribu

tions

to o

wne

rs

of t

he C

ompa

ny:

-

Issu

ance

of n

ew

s

hare

s

-

Priv

ate

plac

emen

t 21

&22

6,

050,

000

10,2

85,0

00

- -

- -

- -

16,3

35,0

00

- 16

,335

,000

- E

xpen

ses

on

issu

ance

of p

rivat

e

plac

emen

t 22

-

(277

,750

) -

- -

- -

- (2

77,7

50)

- (2

77,7

50)

- E

mpl

oyee

s’ s

hare

op

tion

sche

me:

- gra

nted

22

-

- -

- -

- 2,

532,

038

- 2,

532,

038

- 2,

532,

038

- exe

rcis

ed

21&

22

214,

560

541,

004

- -

- -

(253

,591

) -

501,

973

- 50

1,97

3

- f

orfe

ited

22

- -

- -

- -

(335

,414

) -

(335

,414

) -

(335

,414

)

To

tal t

rans

actio

ns

with

ow

ners

6,26

4,56

0 10

,548

,254

-

- -

- 1,

943,

033

- 18

,755

,847

-

18,7

55,8

47

Bala

nce

at 3

0.9.

2016

90,8

51,2

59

32,7

13,3

46 (

18,5

70,0

00)

546,

778

10,1

10,3

77

35,0

69

2,78

3,53

4 3,

826,

132

122,

296,

495

441,

465

122,

737,

960

The

anne

xed

note

s fo

rm a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.



2016 2015 rM rM

CASH FlOWS FOr OPErATiNG ACTiviTiES Profit before taxation 6,219,934 12,113,335 Adjustments for:- Amortisation of intangible assets 2,184,877 1,624,496Depreciation of property and equipment 3,018,168 3,051,771Property and equipment written off 159 11,131Share-based payments 2,196,624 1,175,616Fair value loss of derivative liabilities - 35,990Fair value loss of other receivables - 207,047Allowance for impairment losses on: - property and equipment 72,210 -- goodwill - 292,853- trade receivables 138,554 5,122,415- other receivables 207,047 1,164,881- amount owing by an associate 1,083,737 -Interest expense 1,286,738 470,647Inventories written off 106,993 -Gain on disposal of property and equipment (2,425) (8,286)Interest income (250,170) (538,141)Share of results in associates (79,986) 347,648Share of results in a joint venture (93,576) (57,320)Unrealised foreign exchange loss 1,329,182 1,266,579Writeback of impairment losses on: - other receivables (705,334) - Operating profit before working capital changes 16,712,732 26,280,662Decrease/(Increase) in inventories 21,790 (609,100)Increase in trade and other receivables (61,891,385) (35,906,520)Increase/(Decrease) in trade and other payables 22,100,799 (3,194,780)Increase/(Decrease) in amount owing to a joint venture 78,217 (389,393) CASH FOr OPErATiONS (22,977,847) (13,819,134)Interest paid (1,286,738) (470,647)Income tax tax (paid)/refund (1,427,752) 283,764 NET CASH FOr OPErATiNG ACTiviTiES/ bAlANCE CArriED FOrWArD (25,692,337) (14,006,017)


Consolidated Statement of Cash FlowsAt 30 September 2016


2016 2015 Note rM rM

NET CASH FOr OPErATiNG ACTiviTiES/ bAlANCE brOuGHT FOrWArD (25,692,337) (14,006,017)

CASH FlOWS FOr iNvESTiNG ACTiviTiES Addition of intangible assets (4,126,712) (1,889,192)Advances to associates (2,674,971) (2,923,480)(Advances to)/Repayment from a joint venture (3,872) 359,319Interest received 250,170 538,141Investment in an associate 39 - (329,726)Proceeds from disposal of property and equipment 146,184 91,498Purchase of equipment 38 (2,549,803) (8,611,561)Purchase of other investment (357,648) - NET CASH FOr iNvESTiNG ACTiviTiES (9,316,652) (12,765,001) NET CASH FrOM FiNANCiNG ACTiviTiESDrawdown of term loans 10,363,750 5,025,300 (Repayment of)/Net drawdown of bankers’ acceptances (214,000) 446,000Net drawdown of trust receipts 1,579,795 398,053Net proceeds from private placement 16,057,250 23,002,903Proceeds from share options exercised 501,973 861,718Repayment of term loans (2,938,385) (5,171,047)Repayment of hire purchase obligations (76,275) (37,477)(Withdrawal)/Placement of pledged fixed deposits (182,453) 3,823,402

NET CASH FrOM FiNANCiNG ACTiviTiES 25,091,655 28,348,852 NET iNCrEASE iN CASH AND CASH EQuivAlENTS (9,917,334) 1,577,834 CASH AND CASH EQuivAlENTS AT bEGiNNiNG OF THE FiNANCiAl YEAr 10,403,194 8,708,443 EFFECT ON FOrEiGN EXCHANGE 6,414 116,917 CASH AND CASH EQuivAlENTS AT END OF THE FiNANCiAl YEAr 40 492,274 10,403,194


Consolidated Statement of Cash FlowsAt 30 September 2016 (cont’d)



ASSETS NON-CurrENT ASSETS Investments in subsidiaries 5 20,372,316 21,401,377Investments in associates 6 150,000 150,000Investment in a joint venture 7 45 45Other investment 8 357,648 -Property and equipment 9 68,915 56,263 20,948,924 21,607,685 CurrENT ASSETS Trade receivables 14 1,777,341 2,781,218Other receivables, deposits and prepayments 15 45,568,829 12,824,645Amount owing by subsidiaries 16 55,412,368 38,996,049Amount owing by associates 17 2,152,022 1,331,858Amount owing by a joint venture 18 803,613 799,741Tax recoverable 33,745 -Short-term funds 19 - 2,215,463Fixed deposits with licensed banks 20 3,091,968 3,058,300Cash and bank balances 366,590 4,306,923 109,206,476 66,314,197 TOTAl ASSETS 130,155,400 87,921,882 EQuiTY AND liAbiliTY EQuiTY Share capital 21 90,851,259 84,586,699Reserves 22 (3,910,770) (12,936,213) TOTAl EQuiTY 86,940,489 71,650,486 CurrENT liAbiliTiES Other payables and accruals 27 22,909,244 4,864,837Amount owing to subsidiaries 16 16,513,508 10,885,920Amount owing to a joint venture 18 45 45Provision for taxation - 34,273Short-term borrowings 28 1,799,800 446,000Bank overdrafts 32 1,992,314 4,331Derivative liability 33 - 35,990

TOTAl liAbiliTY 43,214,911 16,271,396 TOTAl EQuiTY AND liAbiliTY 130,155,400 87,921,882


Statement of Financial PositionAt 30 September 2016


2016 2015 Note rM rM rEvENuE 34 1,206,600 3,578,777 OTHEr iNCOME 16,369,292 6,570,289 17,575,892 10,149,066 ADMiNiSTrATivE EXPENSES (10,825,505) (8,154,963) SElliNG AND DiSTribuTiON EXPENSES (1,501,165) (84,069) OTHEr EXPENSES (8,077,678) (11,870,074) FiNANCE COSTS (585,989) - lOSS bEFOrE TAXATiON 35 (3,414,445) (9,960,040) iNCOME TAX EXPENSE 36 (51,399) (206,405) lOSS AFTEr TAXATiON (3,465,844) (10,166,445) OTHEr COMPrEHENSivE iNCOME - - TOTAl COMPrEHENSivE EXPENSES FOr THE FiNANCiAl YEAr (3,465,844) (10,166,445) lOSS AFTEr TAXATiON ATTribuTAblE TO:- Owners of the Company (3,465,844) (10,166,445) TOTAl COMPrEHENSivE EXPENSES ATTribuTAblE TO:- Owners of the Company (3,465,844) (10,166,445)


Statement of Profit or Loss and Other Comprehensive IncomeAt 30 September 2016


N

ON

-DiS

Trib

uTA

blE

D

iSTr

ibu

TAbl

E

EMPl

OYE

ES’

SHAr

E SH

ArE

WAr

rAN

T SH

ArE

OPT

iON

AC

CuM

ulA

TED

TO

TAl

CAPi

TAl

PrEM

iuM

rE

SErv

E rE

SErv

E lO

SSES

EQ

uiT

Y

Not

e

rM

rM

rM

rM

rM

rM

Bala

nce

at 1

.10.

2014

76

,549

,999

15

,268

,237

10

,110

,377

-

(45,

151,

919)

56

,776

,694

Lo

ss a

fter t

axat

ion/

Tota

l com

preh

ensi

ve e

xpen

ses

for

the

finan

cial

yea

r

-

- -

- (1

0,16

6,44

5)

(10,

166,

445)

C

ontri

butio

ns b

y an

d di

strib

utio

ns to

ow

ners

of t

he C

ompa

ny:

- P

rivat

e pl

acem

ent

21

&22

7,

662,

040

16,8

56,4

88

- -

- 24

,518

,528

- E

xpen

ses

on is

suan

ce o

f priv

ate

plac

emen

t

22

- (1

,515

,625

) -

- -

(1,5

15,6

25)

- E

mpl

oyee

sha

re o

ptio

n sc

hem

e:

- gr

ante

d

22

-

- -

1,32

6,63

0 -

1,32

6,63

0

- ex

erci

sed

21&

22

374,

660

822,

173

- (3

35,1

15)

- 86

1,71

8

- fo

rfeite

d

22

-

- -

(151

,014

) -

(151

,014

)

Ba

lanc

e at

30.

9.20

15/1

.10.

2015

84

,586

,699

31

,431

,273

10

,110

,377

84

0,50

1 (5

5,31

8,36

4)

71,6

50,4

86

Loss

afte

r tax

atio

n/To

tal c

ompr

ehen

sive

exp

ense

s f

or th

e fin

anci

al y

ear

- -

- -

(3,4

65,8

44)

(3,4

65,8

44)

C

ontri

butio

ns b

y an

d di

strib

utio

ns to

ow

ners

of t

he C

ompa

ny:

- Iss

uanc

e of

new

sha

res

- P

rivat

e pl

acem

ent

21

&22

6,

050,

000

10,2

85,0

00

- -

- 16

,335

,000

- Exp

ense

s on

issu

ance

of p

rivat

e pl

acem

ent

22

-

(277

,750

) -

- -

(277

,750

)- E

mpl

oyee

sha

re o

ptio

n sc

hem

e:

- g

rant

ed

22

- -

- 2,

532,

038

- 2,

532,

038

- e

xerc

ised

21

&22

21

4,56

0 54

1,00

4 -

(253

,591

) -

501,

973

- fo

rfeite

d

22

-

- -

(335

,414

) -

(335

,414

)

Ba

lanc

e at

30.

9.20

16

90,8

51,2

59

41,9

79,5

27

10,1

10,3

77

2,78

3,53

4 (5

8,78

4,20

8)

86,9

40,4

89

The

anne

xed

note

s fo

rm a

n in

tegr

al p

art o

f the

se fi

nanc

ial s

tate

men

ts.

Statement of Changes in EquityAt 30 September 2016



CASH FlOWS FOr OPErATiNG ACTiviTiES Loss before taxation (3,414,445) (9,960,040) Adjustments for:- Depreciation of equipment 35,165 29,842Fair value adjustment on other receivables - 207,047Fair value loss on derivative liabilities - 35,990Gain on disposal of property, plant and equipment - (3,699)Impairment losses on: - amount owing by subsidiaries 5,442,997 2,458,216 - investments in subsidiaries 2,599,094 6,988,651 - other receivables 207,047 1,164,881Interest expense 108,854 -Share based payments 828,521 371,014Interest income (156,649) (463,967)Unrealised (gain)/loss on foreign exchange (542,109) 922,769 Operating profit before working capital changes 5,108,475 1,750,704Increase in trade and other receivables (31,947,354) (12,464,753)Increase in other payables 18,008,417 4,704,706

CASH FOr OPErATiONS (8,830,462) (6,009,343)Interest paid (108,854) -Interest received 156,649 463,967Income tax paid (119,417) (172,132) NET CASH FOr OPErATiNG ACTiviTiES (8,902,084) (5,717,508) CASH FlOWS FOr iNvESTiNG ACTiviTiES Advances to subsidiaries (21,317,207) (24,830,590)Advances to associates (820,164) (1,331,858)(Advances)/Repayment to a joint venture (3,872) 347,714Investments in subsidiaries (201,930) -Investment in unquoted shares (357,648) -Purchase of equipment 38 (47,817) (41,930)Proceeds from disposal of property and equipment - 10,596 NET CASH FOr iNvESTiNG ACTiviTiES (22,748,638) (25,846,068) bAlANCE CArriED FOrWArD (31,650,722) (31,563,576)


Statement of Cash FlowsAt 30 September 2016



bAlANCE brOuGHT FOrWArD (31,650,722) (31,563,576) CASH FlOWS FrOM FiNANCiNG ACTiviTiES Proceeds from share option exercised 501,973 861,718Net proceeds from private placement 16,057,250 23,002,903Advances from subsidiaries 5,627,588 2,655,141Advances from a joint venture - 45Net (repayment)/drawdown of bankers’ acceptances (214,000) 446,000Net drawdown of foreign currency loans against imports 1,567,800 -(Withdrawal)/Placement of pledged fixed deposits (33,668) 3,967,232 NET CASH FrOM FiNANCiNG ACTiviTiES 23,506,943 30,933,039 NET DECrEASE iN CASH AND CASH EQuivAlENTS (8,143,779) (630,537) CASH AND CASH EQuivAlENTS AT bEGiNNiNG OF THE FiNANCiAl YEAr 6,518,055 7,148,592 CASH AND CASH EQuivAlENTS AT END OF THE FiNANCiAl YEAr 40 (1,625,724) 6,518,055


Statement of Cash FlowsAt 30 September 2016 (cont’d)


1. GENErAl iNFOrMATiON

The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:-

Registered office : Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur.

Principal place of : No.10, Jalan 15/22,business Tiong Nam Industrial Park Section 15, 40200 Shah Alam, Selangor Darul Ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 25 January 2017.

2. PriNCiPAl ACTiviTiES

The principal activities of the Company are investment holding and the development and provision of IT learning programs and educational services. The principal activities of the subsidiaries are disclosed in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. bASiS OF ACCOuNTiNG (a) basis of Preparation

The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

(i) No new accounting standards and interpretations (including the consequential amendments) have been adopted by the Group during the current financial year.

(ii) The Group has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:-

MFrSs and/or iC interpretations (including The Consequential Amendments) Effective Date

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) 1 January 2018MFRS 14 Regulatory Deferral Accounts 1 January 2016MFRS 15 Revenue from Contracts with Customers 1 January 2018MFRS 16 Leases 1 January 2019IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018

Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018

Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018*

Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Deferred until further notice

Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities – Applying the Consolidation Exception 1 January 2016

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016Amendments to MFRS 15: Effective Date of MFRS 15 1 January 2018Amendments to MFRS 15: Clarifications to MFRS 15 ‘Revenue from Contracts with Customers’ 1 January 2018

Amendments to MFRS 101: Disclosure Initiative 1 January 2016

Notes to the Financial StatementsFor The Financial Year Ended 30 September 2016


3. bASiS OF ACCOuNTiNG (CONT’D)

(a) basis of Preparation (Cont’d)

(ii) The Group has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:- (Cont’d)

MFrSs and/or iC interpretations (including The Consequential Amendments)

Effective Date

Amendments to MFRS 107: Disclosure Initiative 1 January 2017Amendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealised Losses 1 January 2017

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation 1 January 2016

Amendments to MFRS 116 and MFRS 141: Agriculture – Bearer Plants 1 January 2016Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016

Amendments to MFRS 140 – Transfers of Investment Property 1 January 2018Annual Improvements to MFRSs 2012 – 2014 Cycle 1 January 2016Annual Improvements to MFRS Standards 2014 – 2016 Cycles:

• Amendments to MFRS 12: Clarification of the Scope of Standard 1 January 2017Annual Improvements to MFRS Standards 2014 – 2016 Cycles:

• Amendments to MFRS 1: Deletion of Short-term Exemptions for First-time Adopters

• Amendments to MFRS 128: Measuring an Associate or Joint Venture at Fair Value 1 January 2018

* Entities that meet the specific criteria in MFRS 4.20B may choose to defer the application of MFRS 9 until the earlier of the application of the forthcoming insurance contracts standard or annual periods beginning before 1 January 2021.

The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application except as follows:- MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces the existing guidance in MFRS 139 and introduces a revised guidance on the classification and measurement of financial instruments, including a single forward-looking ‘expected loss’ impairment model for calculating impairment on financial assets, and a new approach to hedge accounting. Under this MFRS 9, the classification of financial assets is driven by cash flow characteristics and the business model in which a financial asset is held. Therefore, it is expected that the Group’s investments in unquoted shares that are currently stated at cost will be measured at fair value through other comprehensive income upon the adoption of MFRS 9. The Group is currently assessing the financial impact of adopting MFRS 9.

MFRS 15 establishes a single comprehensive model for revenue recognition and will supersede the current revenue recognition guidance and other related interpretations when it becomes effective. Under MFRS 15, an entity shall recognise revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the distinct promised goods or services underlying the particular performance obligation is transferred to the customers. The amendments to MFRS 15 further clarify the concept of ‘distinct’ for the purposes of this accounting standard. In addition, extensive disclosures are also required by MFRS 15. The Group anticipates that the application of MFRS 15 in the future may have a material impact on the amounts reported and disclosures made in the financial statements. However, it is not practicable to provide a reasonable estimate of the financial impacts of MFRS 15 until the Group performs a detailed review.

Notes to the Financial StatementsFor The Financial Year Ended 30 September 2016 (cont’d)



(a) basis of Preparation (Cont’d)

(ii) The Group has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:- (Cont’d)

The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application except as follows:- (Cont’d)

The amendments to MFRS 10, MFRS 12 and MFRS 128 clarify that the exemption from preparing consolidated financial statements is available to intermediate parent entity which is a subsidiary of an investment entity, even when the investment entity measures its subsidiaries at fair value. The intermediate parent entity would need to meet the other criteria for exception in MFRS 10. The Company is itself an intermediate parent entity of an investment entity and will deconsolidate its subsidiary upon the initial application of these amendments. There will be no financial impact on the financial statements of the Group upon its initial application but may impact its future disclosures.

The amendments to MFRS 116 and MFRS 138 prohibit revenue-based depreciation and amortisation because revenue does not, as a matter of principle, reflect the way in which an item of property, plant and equipment and intangible assets is used or consumed. There will be no financial impact on the financial statements of the Group upon its initial application.

MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and will replace the current guidance on lease accounting when it becomes effective. Under MFRS 16, the classification of leases as either finance leases or operating leases is eliminated for lessees. All lessees are required to recognise their leased assets and the related lease obligations in the statement of financial position (with limited exceptions). The leased assets are subject to depreciation and the interest on lease liabilities are calculated using the effective interest method. The Group anticipates that the application of MFRS 16 in the future may have an impact on the amounts reported and disclosures made in the financial statements. However, it is not practicable to provide a reasonable estimate of the financial impacts of MFRS 16 until the Group performs a detailed review.

IC Interpretation 22 clarifies that the date of initial recognition of a non-monetary prepayment asset or deferred income liability is considered as the date of transaction for the purpose of determining the exchange rate of MFRS 121. If there are multiple payments or receipts in advance, the date of transaction shall be established for each payment or receipt. There will be no financial impact on the financial statements of the Group upon its initial application but may impact its future disclosures.

The amendments to MFRS 107 require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. Accordingly, there will be no financial impact on the financial statements of the Group upon its initial application. However, additional disclosure notes on the statements of cash flows may be required.

The amendments to MFRS 112 clarify that unrealised losses on debt instruments measured at fair value in the financial statements but at cost for tax purposes can give rise to deductible temporary differences. In addition, in evaluating whether an entity will have sufficient taxable profits in future periods against which deductible temporary differences can be utilised, the amendments require an entity to compare the deductible temporary differences with future taxable profits that excludes tax deductions resulting from the reversal of those temporary differences. There will be no financial impact on the financial statements of the Group upon its initial application but may impact its future disclosures.




(b) reverse Acquisition

On 1 March 2010, the Company acquired a 77.78% equity interest in Eduspec Sdn. Bhd. (“ESB”) for a total purchase consideration of RM17,350,000. The purchase consideration was satisfied as follows:

(i) a total cash consideration of RM800,000;

(ii) the issuance of 137,000,000 ordinary shares of RM0.10 each at par by the Company for a consideration of RM13,700,000; and

(iii) the issuance of performance shares up to 47,500,000 ordinary shares of RM0.06 each by the Company for a consideration of RM2,850,000, if subsequent profitability is achieved by ESB in the financial year ended 30 September 2009 and for the financial years ending 30 September 2010 and 2011 as laid out in the Share Sale Agreements.

Upon completion of the acquisition, the Company became the legal holding company of ESB whereas the former shareholders of ESB to whom the 137,000,000 shares were allotted became the majority shareholders of the Company. In accordance with MFRS 3 Business Combinations, the substance of such business combination between the Company and ESB constituted a reverse acquisition whereby the acquirer and acquiree of the transaction for accounting purposes should be ESB (the legal subsidiary) and the Company (the holding company).

Under the reverse acquisition accounting, the consolidated financial statements, although issued under the name of the legal holding company, the Company, represent a continuation of the financial statements of the legal subsidiary, ESB. Accordingly, the consolidated financial statements set out on pages 44 to 51 together with the notes thereto cover ESB (as the accounting acquirer) and the Company (as the accounting acquiree) together with their other subsidiaries.

The reverse acquisition accounting does not apply in the separate financial statements of the Company set out on pages 52 to 56 together with the notes thereto. The reporting period of the Company is the same with that of the Group in the current and previous financial years.

4. SiGNiFiCANT ACCOuNTiNG POliCiES

(a) Critical Accounting Estimates and Judgements

Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:-

(i) Depreciation of Property and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Group anticipates that the residual values of its property and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final 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 year in which such determination is made.



4. SiGNiFiCANT ACCOuNTiNG POliCiES (CONT’D)

(a) Critical Accounting Estimates and Judgements (Cont’d)

(iii) Impairment of Non-Financial Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

(iv) Amortisation of Development Costs

Changes in the expected level of usage and technological development could impact the economic useful lives therefore future amortisation charges could be revised.

(v) Write-down of Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.

(vi) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loan and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

(vii) Impairment of Goodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires management to estimate the expected future cash flows of the cash-generating unit to which goodwill is allocated and to apply a suitable discount rate in order to determine the present value of those cash flows. The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discount rate used. If the expectation is different from the estimation, such difference will impact the carrying value of goodwill.

(viii) Fair Value Estimates for Certain Financial Assets and Liabilities

The Group carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity.

(ix) Share-based Payments

The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity investments at the date at which they are granted. The estimating of the fair value requires determining the most appropriate valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. This also requires determining the most appropriate inputs to the valuation model including the expected life of the option volatility and dividend yield and making assumptions about them.




(b) basis of Consolidation

All business combinations are accounted for using the purchase method which requires the identification of an acquirer for accounting purposes. As explained in Note 3(B) to the financial statements, the Group adopts the reverse acquisition accounting in preparing the consolidated financial statements which incorporate the financial statements of Eduspec Sdn. Bhd. (as the accounting acquirer) and the Company together with its other subsidiaries (as the accounting acquiree).

Subsidiaries are entities (including structured entities, if any) controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

(i) Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss when incurred.

In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.

(ii) Non-controlling Interests

Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from the equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

(iii) Changes In Ownership Interests In Subsidiaries Without Change of Control

All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity of the Group.




(b) basis of Consolidation (Cont’d)

(iv) Loss of Control

Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit or loss which is calculated as the difference between:-

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests.

Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of (i.e. reclassified to profit or loss or transferred directly to retained profits). The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

(c) Goodwill

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group’s previously held equity interest in the acquire (if any), over the net fair value of the acquiree’s identifiable assets and liabilities at the date of acquisition is recorded as goodwill.

Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised as a gain in profit or loss.

In respect of equity-accounted associates and joint ventures, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted associates and joint ventures.

(d) Functional and Foreign Currencies

(i) Functional and Presentation Currency

The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the Group operates which is the functional currency.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”) which is the Company’s functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.




(d) Functional and Foreign Currencies (Cont’d)

(iii) Foreign Operations

Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end of the reporting period. Income, expenses and other comprehensive income of foreign operations are translated at exchange rates ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity; attributed to the owners of the Company and non-controlling interests, as appropriate.

Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period.

In the consolidated financial statements, when settlement of an intragroup loan is neither planned nor likely to occur in the foreseeable future, the exchange differences arising from translating such monetary item are considered to form part of a net investment in the foreign operation and are recognised in other comprehensive income.

(e) Financial instruments

Financial instruments are recognised in the statements of financial position when the Group has become a party to the contractual provisions of the instruments.

Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.

Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

(i) Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.

• Financial Assets at Fair Value Through Profit or Loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Group’s right to receive payment is established.

Financial assets at fair value through profit or loss could be presented as current assets or non-current assets. Financial assets that are held primarily for trading purposes are presented as current assets whereas financial assets that are not held primarily for trading purposes are presented as current assets or non-current assets based on the settlement date.




(e) Financial instruments (Cont’d)

(i) Financial Assets (Cont’d)

• Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with interest income recognised in profit or loss on an effective yield basis.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current assets.

• Loans and Receivables Financial Assets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets.

• Available-for-sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories.

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.




(e) Financial instruments (Cont’d)

(ii) Financial Liabilities

• Financial Liabilities at Fair Value through Profit or Loss

Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

• Other Financial Liabilities

Other financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(iii) Equity Instruments

Equity instruments classified as equity are measured at cost and are not remeasured subsequently.

• Ordinary Shares

Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(iv) Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

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

(f) Warrants

Amount allocated in relation to the issuance of warrants are credited to the warrant reserve which is non-distributable. The warrant reserve is transferred to the share premium account upon the exercise of the warrants and the warrant reserve in relation to the unexercised warrants at the expiry of the warrants period will be transferred to the retained earnings.




(g) Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on a straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Leasehold land over the lease period of 66 yearsLeasehold building 2%Motor vehicles 20%Office and lab equipment, furniture and fittings 10% - 33.33% Computers, software and peripherals 20% - 50%Educational tools 20% - 33.33%Renovation 10% - 33.33% Electrical installation 10% - 20%

Capital work-in-progress included in property and equipment are not depreciated as these assets are not yet available for use.

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset, being the difference between the net disposal proceeds and the carrying amount, is recognised in profit or loss.

(h) intangible Assets

(i) Research and Development Expenditure

Research expenditure is recognised as an expense when it is incurred.

Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as non-current assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an entity can demonstrate all of the following:-

(i) its ability to measure reliably the expenditure attributable to the asset under development;

(ii) the product or process is technically and commercially feasible;

(iii) its future economic benefits are probable;

(iv) its intention to complete and the ability to use or sell the developed asset; and

(v) the availability of adequate technical, financial and other resources to complete the asset under development.




(h) intangible Assets (Cont’d)

(i) Research and Development Expenditure (Cont’d)

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the subsequent period.

The development expenditure is amortised on a straight-line method over a period of 5 years when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its recoverable amount.

The amortisation method, useful life and residual value are reviewed, and adjusted if appropriate, at the end of each reporting period.

(ii) Licence Fee

The licence fee is stated at cost less accumulated amortisation and impairment losses, if any.

The licence fee is amortised on a straight-line basis and the principal amortisation rate used for this purpose is 20%.

In the event that the expected future economic benefits are no longer probable of being recovered, the licence fee is written down to its recoverable amount.

(i) investments in Subsidiaries

Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investments includes transaction costs.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.

(j) investments in Associates

An associate is an entity in which the Group and the Company have a long-term equity interest and where it exercises significant influence over the financial and operating policies.

Investments in associates are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investment includes transaction costs.

The investment in an associate is accounted for in the consolidated financial statements using the equity method based on the financial statements of the associate made up to 30 September 2016. The Group’s share of the post acquisition profits and other comprehensive income of the associate is included in the consolidated statement of profit or loss and other comprehensive income, after adjustment if any, to align the accounting policies with those of the Group, from the date that significant influence commences up to the effective date on which significant influence ceases or when the investment is classified as held for sale. The Group’s interest in the associate is carried in the consolidated statement of financial position at cost plus the Group’s share of the post acquisition retained profits and reserves. The cost of investment includes transaction costs.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation.

Unrealised gains on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered.

When the Group ceases to have significant influence over an associate and the retained interest in the former associate is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as the initial carrying amount of the financial asset in accordance with MFRS 139. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that associate into profit or loss when the equity method is discontinued.




(k) Joint Arrangements Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements returns.

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures.

A joint venture is a joint arrangement whereby the Group has rights only to the net assets of the arrangement. The investment in a joint venture is accounted for in the consolidated statement of financial position using the equity method, based on the financial statements of the joint venture made up to 30 September 2016. The Group’s share of the post-acquisition profits and other comprehensive income of the joint venture is included in the consolidated statement of profit or loss and other comprehensive income, after adjustment if any, to align the accounting policies with those of the Group, up to the effective date when the investment ceases to be a joint venture or when the investment is classified as held for sale. The Group’s interest in the joint venture is carried in the consolidated statement of financial position at cost plus the Group’s share of the post-acquisition retained profits and reserves. The cost of investment includes transaction costs.

When the Group’s share of losses exceeds its interest in a joint venture, the carrying amount of that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation.

Unrealised gains on transactions between the Group and the joint venture are eliminated to the extent of the Group’s interest in the joint venture. Unrealised losses are eliminated unless cost cannot be recovered.

The Group discontinues the use of the equity method from the date when the investment ceases to be a joint venture or when the investment is classified as held for sale. When the Group retains an interest in the former joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as the initial carrying amount of the financial asset in accordance with MFRS 139. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that joint venture to profit or loss when the equity method is discontinued. However, the Group will continue to use the equity method when an investment in a joint venture becomes an investment in an associate. Under such change in ownership interest, the retained investment is not remeasured to fair value but a proportionate share of the amounts previously recognised in other comprehensive income of the joint venture will be reclassified to profit or loss where appropriate. All dilution gains or losses arising from investments in joint ventures are recognised in profit or loss.

(l) impairment

(i) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss, investments in subsidiaries and investments in associates, are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be an objective evidence of impairment.

An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassified from equity into profit or loss.




(l) impairment (Cont’d)

(i) Impairment of Financial Assets (Cont’d)

With the exception of available-for-sale debt instruments, 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 through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(ii) Impairment of Non-Financial Assets

The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when an annual impairment assessment is compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value in use, which is measured by reference to discounted future cash flow using a pre-tax discount rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating units and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rate basis.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a 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 and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(m) Assets under Hire Purchase

Assets acquired under hire purchase are capitalised in the financial statements at the lower of the fair value of the leased assets and the present value of the minimum lease payments and, are depreciated in accordance with the policy set out in Note 4(g) above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are recognised in profit or loss over the period of the respective hire purchase agreements.




(n) inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in-first-out basis and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition.

Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

(o) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. The unwinding of the discount is recognised as interest expense in profit or loss.

(p) income Taxes

(i) Current Tax

Current tax assets and liabilities are expected amount of income tax recoverable or payable to the taxation authorities. Current taxes are measured using tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period and are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss (either in other comprehensive income or directly in equity).

(ii) Deferred Tax

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

Deferred tax assets and liabilities are 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 the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity and the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs.




(p) income Taxes (Cont’d)

(iii) Goods and Services Tax (“GST”)

Revenues, expenses and assets are recognised net of GST. However, when the GST incurred are related to purchases of assets or services which are recoverable from the taxation authorities, the GST are included as part of the costs of the assets acquired or as part of the expense item whichever is applicable.

Receivables and payables are stated with the amount of GST included (where applicable).

The net amount of the GST recoverable from or payable to the taxation authorities at the end of the reporting period is included in other receivables or other payables.

(q) borrowing Costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

(r) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts.

(s) Employee Benefits

(i) Short-term Benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss and included in the development costs, where appropriate, in the period in which the associated services are rendered by employees of the Group.

(ii) Defined Contribution Plans

The Group’s contributions to defined contribution plans are recognised in profit or loss and included in the development costs, where appropriate, in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

(iii) Share-based Payment Transactions

The Group operates an equity-settled share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments of the Company (known as “share options”).

At grant date, the fair value of the share options is recognised as an expense on a straight-line method over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding credit to employee share option reserve in equity. The amount recognised as an expense is adjusted to reflect the actual number of the share options that are expected to vest. Service and non-market performance conditions attached to the transaction are not taken into account in determining the fair value.



4. SiGNiFiCANT ACCOuNTiNG POliCiES (CONT’D) (s) Employee Benefits (Cont’d)

(iii) Share-based Payment Transactions (Cont’d)

In the Company’s separate financial statements, the grant of the share options to the subsidiaries’ employees is not recognised as an expense. Instead, the fair value of the share options measured at the grant date is accounted for as an increase to the investment in subsidiary undertaking with a corresponding credit to the employee share option reserve.

Upon expiry of the share option, the employee share option reserve is transferred to retained profits.

When the share options are exercised, the employee share option reserve is transferred to share capital or share premium if new ordinary shares are issued.

(iv) Defined Benefits Scheme

Certain subsidiaries of the Group operate an unfunded defined benefits scheme in respect of their employees in accordance with the Indonesian Labor Law No. 13/2003 dated 25 March 2003.

The Group’s net obligations in respect of the defined benefit plans is calculated separately for each plan by estimating the amount of future benefits that the employees have earned in return for their services in the current and prior periods, discounting that amount and deducting the fair value of any planned assets.

Past service costs are recognised immediately in the profit or loss, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past service costs are amortised on a straight-line basis over the vesting period.

The current service cost is recognised as an expense in the prevailing period.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. The Group determines the net interest expense or income on the net defined liability or asset for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net defined benefit liability or asset, taking into account any changes in the net defined benefit liability or asset during the period as a result of contributions and benefit payments.

Net interest expense and other expenses relating to defined benefit plans are recognised in profit or loss.

The Group recognised gains or losses on the curtailment or settlement of a defined benefits plan when the curtailment or settlement occurs. The gain or loss on a curtailment or settlement comprises changes in the present value of the defined obligation and any related actuarial gains and losses and past service costs that had not previously been recognised.




(t) related Parties

A party is related to an entity (referred to as the “reporting entity”) if:-

(a) A person or a close member of that person’s family is related to a reporting entity if that person:-

(i) has control or joint control over the reporting entity;(ii) has significant influence over the reporting entity; or(iii) is a member of the key management personnel of the reporting entity or of a parent of the

reporting entity.

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

(b) An entity is related to a reporting entity if any of the following conditions applies:-

(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third

entity.(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting

entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person identified in (a) above.(vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the

key management personnel of the entity (or of a parent of the entity).(viii) The entity, or any member of a group of which it is a part, provides key management personnel

services to the reporting entity or to the parent of the reporting entity.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including any director (whether executive or otherwise) of that entity.

(u) Operating Segments

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

(v) Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

(w) Earnings Per Ordinary Share

Basic earnings per ordinary share is calculated by dividing the consolidated profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period, adjusted for own shares held.

Diluted earnings per ordinary share is determined by adjusting the consolidated profit or loss attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.




(x) Fair value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:-

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date;

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

Level 3: Inputs are unobservable inputs for the asset or liability.

The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.

(y) revenue and Other income

(i) Sale of Goods

Revenue is measured at fair value of the consideration received or receivable and is recognised upon delivery of goods and customers’ acceptance and where applicable, net of returns and trade discounts.

(ii) School Fees and Activity Income

School fees and activity income are recognised upon rendering of services and when the outcome of the transactions can be estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable.

(iii) Deferred Income

Revenue invoiced in advance is deferred and recognised as revenue upon provision of the service.

(iv) Rental Income

Rental income is recognised on an accrual basis.

(v) Interest Income

Interest income is recognised on an accrual basis.

(vi) Management Fee

Management fee is recognised on an accrual basis.

(vii) Royalty Income

Royalty income is recognised on an accrual basis.



5. iNvESTMENTS iN SubSiDiAriES

THE COMPANY 2016 2015 rM rM

Unquoted shares, at cost At 1 October 42,019,508 41,214,906Addition during the financial year 201,930 -ESOS granted to employees of subsidiaries 1,368,103 804,602 43,589,541 42,019,508 Accumulated impairment losses:- At 1 October (20,618,131) (13,629,480)Impairment loss during the financial year (2,599,094) (6,988,651) (23,217,225) (20,618,131) At 30 September 20,372,316 21,401,377

The details of the subsidiaries are as follows:-

NAME OF COMPANY

COUNTRY OF INCORPORATION

EFFECTIvE EqUITY INTEREST PRINCIPAL ACTIvITIES

2016 2015% %

Direct Subsidiaries:-

Litespeed Education Pte. Ltd. (“LES”)* Singapore 100 100 Provision of educational services.

Eduspec Pte. Ltd. (“EPL”)* Singapore 100 100 Provision of IT consultancy activities, IT development and other IT and computer related services.

Litespeed Education Programmes Sdn. Bhd. (“LEP”)

Malaysia 100 100 Provision of educational services.

Eduspec Sdn. Bhd. (“ESB”) # Malaysia 100 100 Investment holding.

Eduspec ACG Pte. Ltd. (“ACG”)* Singapore 60 60 Dormant.

Multiple Technology MSC Sdn. Bhd. (“MTM”)

Malaysia 100 100 Providing computer training and trading in mcomputer and computer peripherals.

Eduspec HK Limited (“EHKL”)* Hong Kong 100 - Virtual schools.

Held by Eduspec Sdn. Bhd.:-

Dynabook Computer Centre (Perak) Sdn. Bhd. (“DCCPK”)

Malaysia 92.67 92.67 Providing computer training and trading in computer and computer peripherals.

Dynabook Computer Centre (Melaka) Sdn. Bhd. (“DCCMK”)

Malaysia 82.67 82.67 Providing child enrichment programs.

Dynabook Computer Centre (Sarawak) Sdn. Bhd. (“DCCSW”)

Malaysia 100 100 Providing computer training and trading in computer and computer peripherals.

Eduspec International Education Cultural Network Sdn. Bhd. (“EIECN”)

Malaysia 100 100 Providing child enrichment programs.

Dynabook Computer Centre (Penang) Sdn. Bhd. (“DCCPG”)

Malaysia 100 100 Providing computer training and trading in computer peripherals.

Dynabook Computer Centre (Pantai Timur) Sdn. Bhd. (“DCCPT”)

Malaysia 90.53 90.53 Providing child enrichment programs.



5. iNvESTMENTS iN SubSiDiAriES (CONT’D)

The details of the subsidiaries are as follows (Cont’d):-

NAME OF COMPANY



2016 2015% %


Held by Eduspec Sdn. Bhd. (Cont’d):-

Dynabook Computer Centre (M) Sdn. Bhd. (“DCCM”)

Malaysia 100 100 Providing computer course, trading and renting of computers, educational software and books.

DGB Education Sdn. Bhd. (“DGBE”) Malaysia 100 100 Trading and development of educational software, technical books and computer courses.

Creative Educare (M) Sdn. Bhd. (“CED”) Malaysia 100 100 Marketing and operating of robotics for school programs and other related enrichment programs.

Open Academic Systems Sdn. Bhd. (“OAS”)

Malaysia 100 100 Providing research and develop educational software and technical books.

Digital IT Solutions Sdn. Bhd. (“DITS”) Malaysia 100 100 Trading in computer and peripherals, and technical maintenance support activities.

Time Communication Partners Sdn. Bhd. (“TCP”)

Malaysia 97 97 Investment holding.

Dynakids Sdn. Bhd. (“DYNAKIDS”) Malaysia 100 100 Provision and operation of IT learning for the pre-school market and related activities.

DES Sdn. Bhd. (“DES”) Malaysia 100 100 Research and development of courseware on robotics for school programs and other related enrichment programs.

Dynabook Computer Centre (N.S.) Sdn. Bhd. (“DCCNS”)


Eduspec Properties Sdn. Bhd. Malaysia 100 100 Investment holding.

Dynabook Computer Centre (Sabah) Sdn. Bhd. (“DCCSB”)


Time IT In E (Sabah) Sdn. Bhd. (“TITIESB”)

Malaysia 100 100 Distribution of information technology related products.

Held by Eduspec Pte Ltd:-

PT Eduspec Indonesia (“PTEI”)*^ Indonesia 40 40 Providing IT learning as well as robotic class and products in Indonesia.

Held by Eduspec HK Limited:-

Centillion Robotics Limited (“CRL”)* Hong Kong 100 - Engaged in the business of Robotics technology solution and high-tech education business and the marketing and distributing of software solutions in Hong Kong.



5. iNvESTMENTS iN SubSiDiAriES (CONT’D)

The details of the subsidiaries are as follows (Cont’d):-

NAME OF COMPANY



2016 2015% %


Held by Centillion Robotics Limited:-

Centillion Robotics (M) Sdn Bhd (“CRM”)

Malaysia 100 - Trading of education tools and programs, education solutions and training.

* Not audited by Messrs. Crowe Horwath. ^ Although the Company owns less than half of the voting power in PTEI, the Company controls this subsidiary by

virtue of an agreement with the other investors of PTEI. Consequently, the Company consolidates its investment in this subsidiary.

# An impairment loss of RM2,599,094 (2015 - RM6,988,651) is recognised in “other operating expenses” line item of the Statements of Profit or Loss and Other Comprehensive Income for the financial year ended 30 September 2016, arising from write-down of the carrying amount to its fair value less costs to sell.

(a) The non-controlling interests at the end of the reporting period comprise the following:-

Effective Equity interest The Group 2016 2015 2016 2015 % % rM rM

PTEI 60 60 506,607 (39,633)Other individually immaterial subsidiaries (65,142) 73,048

441,465 33,415

(b) The summarised financial information (before intra-group elimination) for each subsidiary that has non-controlling interests that are material to the Group is as follows:-

PTEi 2016 2015 rM rM

At 30 September Non-current assets 838,964 442,760Current assets 38,812,991 11,901,971Current liabilities (38,763,081) (12,410,786) Net liabilities 888,874 (66,055) Financial year ended 30 September Revenue 27,169,931 8,741,073Profit for the financial year 883,213 2,632,919Total comprehensive income 898,485 2,631,739 Total comprehensive income attributable to non-controlling interests 539,091 1,579,043 Net cash flows for operating activities (3,903,067) (4,539,555)Net cash flows for investing activities (35,887) (87,063)Net cash flows from financing activities 3,541,632 4,912,424

(c) The summarised financial information (before intra-group elimination) of the other subsidiaries that have non-controlling interests are not presented as the non-controlling interests are not material to the Group.



6. iNvESTMENTS iN ASSOCiATES

THE GrOuP THE COMPANY 2016 2015 2016 2015 rM rM rM rM

Unquoted shares in Malaysia, at cost

At 1 October 667,441 337,715 150,000 150,000Addition during the financial year - 329,726 - - 667,441 667,441 150,000 150,000Share of post- acquisition profits

At 1 October (210,454) 137,194 - -- for the financial year 79,986 (347,648) - - (130,468) (210,454) - - Translation reserve

At 1 October 11,464 (29,720) - -- for the financial year (131,967) 41,184 - - (120,503) 11,464 - - At 30 September 416,470 468,451 150,000 150,000

(a) The details of the associates are as follows:

Name of CompanyCountry of

incorporationEffective Equity

interest Principal Activities2016 2015

% %

DTT Eduspec Joint Stock Company (“DTTE”)#

Vietnam 40 40 Providing information outsourcing and consulting services to schools and educational institutions in Vietnam.

First Eduspec Inc. (“FEI”)*# Philippines 40 40 Providing information outsourcing and consulting services to schools and educational institutions in Philippines.

Cloud Direct Sdn. Bhd. (“CDSB”)#

Malaysia 30 30 Providing services for development, deployment and support mobile and server software applications.

* Not audited by Messrs. Crowe Horwath.

# The share of results in this associate is based on the unaudited financial statements of the associate.



6. iNvESTMENTS iN ASSOCiATES (CONT’D)

(b) The summarised financial information of the associates are as follows:-


Assets and liabilities Total assets 6,271,269 5,965,391 921,737 614,360Total liabilities 7,932,243 6,131,023 2,472,650 1,347,947 results Revenue 1,334,995 5,173,283 80,091 155,573Loss after taxation (1,474,993) (2,647,129) (851,851) (652,073)

(c) During the financial year, the Group had not recognised losses relating to Cloud Direct Sdn. Bhd. and DTT Eduspec Joint Stock Company, where its share of losses exceeded the Group’s interest in these associates. The Group’s cumulative share of unrecognised losses at the end of the reporting period was RM849,300. The Group has no obligation in respect of these losses.

(d) The summarised unaudited financial information for the associate that is material to the Group is as follows:-

FEi 2016 2015 rM rM

At 30 September Non-current assets 1,159,267 948,879Current assets 1,702,485 1,201,720Current liabilities (1,606,048) (864,276) Net assets 1,255,704 1,286,323 12-month period ended 30 September Revenue 3,532,064 2,575,102Profit for the financial year 199,986 242,174Total comprehensive income 199,986 242,174 Group’s share of profit for the financial year 79,986 96,870Group’s share of other comprehensive income - -Group’s share of total comprehensive income 79,986 96,870 Carrying amount of the Group’s interests in this associate 502,112 468,451



6. iNvESTMENTS iN ASSOCiATES (CONT’D)

(e) The summarised unaudited financial information for the associate that is material to the Group is as follows:-

DTTE 2016 2015 rM rM

At 30 September Non-current assets 1,489,655 1,450,378Current assets 996,993 149,838Current liabilities (3,851,437) (1,959,400) Net liabilities (1,364,789) (359,184) 12-month period ended 30 September Revenue 1,074,168 1,221,304Loss for the financial year (823,128) (1,118,615)Total comprehensive expenses (823,128) (1,118,615) Group’s share of loss for the financial year - (329,726)Group’s share of other comprehensive expenses - -Group’s share of total comprehensive expenses - (329,726) Carrying amount of the Group’s interests in this associate - -

(f) The summarised financial information for all associates that are individually immaterial to the Group are as follows:-

Other individually immaterial Associates 2016 2015 rM rM

Financial year ended 30 September Group’s share of loss for the financial year - (114,792)Group’s share of other comprehensive expenses Group’s share of total comprehensive expenses - (114,792) Reconciliation of net assets to carrying amount Group’s share of net liabilities above - -Goodwill - - Aggregate carrying amount of the Group’s interests in these associates - -

7. iNvESTMENTS iN A JOiNT vENTurE


Unquoted shares, at cost: At 1 October 50 50 45 45 Share of post-acquisition profits: At 1 October 181,785 124,465 - -- for the financial year 93,576 57,320 - -

275,361 181,785 - - At 30 September 275,411 181,835 45 45



7. iNvESTMENTS iN A JOiNT vENTurE (CONT’D)

(a) The details of the joint venture are as follows:-

Name of CompanyCountry of

incorporationEffective

Equity interest Principal Activity2015 2014

% %EDM Educational Technology (M) Sdn. Bhd. Malaysia Providing research and

development of educational software and technical books.

- held through the Company 45 45

- held through MTM 5 5

(b) The summarised financial information for the joint venture that is material to the Group is as follows:-

EDM 2016 2015

rM rM

At 30 September Non-current assets 2,338,032 2,071,472Current assets 376,957 113,503Current liabilities (1,971,331) (1,679,358)Non-current liabilities (193,410) (142,520) Net assets 550,248 363,097 12-month period ended 30 September Revenue 1,021,231 665,657Profit for the financial year 187,151 114,639Total comprehensive income 187,151 114,639 Group’s share of income for the financial year 93,576 57,320Group’s share of other comprehensive income 93,576 57,320 Carrying amount of the Group’s interests in this joint venture 275,411 181,835

8. OTHEr iNvESTMENT

THE GrOuP/THE COMPANY 2016 2015

rM rM

Unquoted shares, at cost At 1 October - - Addition during the financial year 357,648 - 357,648 -

Investment in unquoted shares of the Group is designated as available-for-sale financial assets, are stated at cost as their fair values cannot be reliably measured using valuation techniques due to the lack of marketability of the shares.



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9. PrOPErTY AND EQuiPMENT (CONT’D)

ACCuMulATED AT iMPAirMENT ACCuMulATED NET bOOK COST lOSS DEPrECiATiON vAluE rM rM rM rM

THE GrOuP AT 30.9.2016 Leasehold land and building 14,847,690 - (425,757) 14,421,933Motor vehicles 1,400,566 - (659,841) 740,725Office and lab equipment, furniture and fittings 8,313,484 - (4,644,510) 3,668,974Computers, software and peripherals 17,959,775 (72,210) (15,217,544) 2,670,021Educational tools 3,311,570 - (2,219,124) 1,092,446Renovation 3,694,832 - (1,579,444) 2,115,388Electrical installation 1,441,803 - (595,247) 846,556

50,969,720 (72,210) (25,341,467) 25,556,043

AT 30.9.2015 Leasehold land and building 14,847,690 - (182,467) 14,665,223Motor vehicles 734,054 - (536,962) 197,092Office and lab equipment, furniture and fittings 8,438,259 - (4,531,315) 3,906,944Computers, software and peripherals 17,448,690 - (14,580,052) 2,868,638Educational tools 2,999,121 - (1,831,092) 1,168,029Renovation 3,291,975 - (1,200,386) 2,091,589Electrical installation 1,175,301 - (369,813) 805,488 48,935,090 - (23,232,087) 25,703,003

AT DEPrECiATiON AT 1.10.2015 ADDiTiONS CHArGE 30.9.2016 rM rM rM rM

THE COMPANY NET bOOK vAluE Computers, software and peripherals 54,273 43,582 (34,460) 63,395Office and lab equipment, furniture and fittings 969 4,235 (599) 4,605Educational tools 1,021 - (106) 915

56,263 47,817 (35,165) 68,915

AT DEPrECiATiON AT 1.10.2014 ADDiTiONS DiSPOSAlS CHArGE 30.9.2015 rM rM rM rM rM

THE COMPANY NET bOOK vAluE Computers, software and peripherals 42,133 39,816 (20) (27,656) 54,273Office and lab equipment, furniture and fittings 8,938 1,058 (6,876) (2,151) 969Educational tools - 1,056 - (35) 1,021Renovation 1 - (1) - - 51,072 41,930 (6,897) (29,842) 56,263



9. PrOPErTY AND EQuiPMENT (CONT’D) AT ACCuMulATED NET bOOK COST DEPrECiATiON vAluE rM rM rM

THE COMPANY AT 30.9.2016 Computers, software and peripherals 146,016 (82,621) 63,395Office and lab equipment, furniture and fittings 5,292 (687) 4,605Educational tools 1,056 (141) 915

152,364 (83,449) 68,915 AT 30.9.2015 Computers, software and peripherals 102,434 (48,161) 54,273Office and lab equipment, furniture and fittings 1,057 (88) 969Renovation 1,056 (35) 1,021

104,547 (48,284) 56,263

Included in the net book value of the equipment of the Group at the end of the reporting period are motor vehicles acquired under hire purchase terms amounting to RM678,107 (2015 - RM115,275).

The leasehold land and building of the Group have been pledged as security for banking facilities granted to a subsidiary.



10. iNTANGiblE ASSETS

iNTEllECTuAl PrOPErTiES TOTAl rM

THE GrOuP COST AT 1.10.2014 15,621,129Addition during the financial year 1,889,192Reclassified to property and equipment (77,106)Written off (4,158,980)Currency translation differences 662,365 AT 30.9.2015/1.10.2015 13,936,600Addition during the financial year 4,126,712Currency translation differences 330 AT 30.9.2016 18,063,642 ACCuMulATED AMOrTiSATiON AT 1.10.2014 (8,955,992)Amortisation for the financial year (1,624,496)Written off 4,158,980Currency translation differences (552,992) AT 30.9.2015/1.10.2015 (6,974,500)Amortisation for the financial year (2,184,877)Currency translation differences (104) AT 30.9.2016 (9,159,481)

NET CArrYiNG AMOuNT AT 30.9.2016 8,904,161 AT 30.9.2015 6,962,100

Intellectual properties represent development of educational software contents.

11. GOODWill ON CONSOliDATiON

THE GrOuP 2016 2015 rM rM

At 1 October 6,068,671 6,361,524Impairment during the financial year - (292,853) At 30 September 6,068,671 6,068,671

In the previous financial year, an impairment loss of RM 292,853, was recognised on Eduspec Pte Ltd in “other operating expenses” line item of the statement of profit or loss and other comprehensive income as the subsidiary had been incurring losses for a number of financial years and the directors did not foresee any cash flows from the this cash-generating unit in the near future. This goodwill belonged to the Group’s ‘development and provision of IT learning programs and educational services’ reportable segment and in Malaysia.



11. GOODWill ON CONSOliDATiON (CONT’D)

(a) The carrying amounts of goodwill allocated to each cash-generating unit are as follows:-


MTM 4,055,989 4,055,989PTEI 2,012,682 2,012,682 6,068,671 6,068,671

(b) The Group assessed the recoverable amounts of goodwill allocated and determined that no additional impairment is required. The recoverable amounts of the cash-generating units (“CGU”) are determined using the value-in-use approach, and this is derived from the present value of the future cash flows from the operating segments computed based on the projections of financial budgets approved by management covering a period of 5 years. The key assumptions used in the determination of the recoverable amounts are as follows:-

AvErAGE buDGETED PrOFiT/GrOSS MArGiN

AvErAGE GrOWTHrATE

DiSCOuNT rATE

TErMiNAl GrOWTH rATE

2017 - 2021 2017 - 2021 2017 - 2021 2022 – iNFiNiTY

MTM 30% 3 - 5% 11.84% 0%

PTEI 19% 5% 16.24% 0%

The key assumptions represent management’s assessment of future trends in the regional Education industry and are based on both external sources and internal sources.

Management has determined the average budgeted profit margin and weighted average growth rate based on past performance and its expectation of market development. The discount rates used are computed based on the weighted average cost of capital of the industry that the Group operates in.

Sensitivity to Changes in Assumptions

The management believes that no reasonably possible changes in any of the above key assumptions would cause the carrying value of the goodwill to be materially higher than its recoverable amount other than as follows:-

The changes in assumptions are particularly sensitive in the following areas:-

CGU – MTM

A decrease of 2.4 percentage point in the gross margin rate used would have resulted in an impairment loss of RM279,077.



12. DEFErrED TAXATiON


At 1 October 248,717 640,987Recognised in profit or loss (Note 36) 93,138 (388,671)Translation difference (1,075) (3,599) At 30 September 340,780 248,717

Presented after appropriate offsetting as follows:-

Deferred tax assets (142,470) (102,281)Deferred tax liabilities 483,250 350,998 At 30 September 340,780 248,717

The components of deferred tax assets and deferred tax liabilities prior to offsetting are as follows:-

Deferred tax assets of the Group:


Deferred tax assets:- Accelerated capital allowances (5,095) (7,388)Others (137,375) (94,893) (142,470) (102,281)

Deferred tax liabilities of the Group:

Deferred tax liability:- Accelerated capital allowances 820,666 544,712 Deferred tax assets:- Unabsorbed capital allowances (302,740) (162,011)Unutilised tax losses (23,840) (22,861)Others (10,836) (8,842) 483,250 350,998

13. iNvENTOriES


At cost:- Finished goods 1,530,784 1,659,567

None of the inventories is carried at net realisable value.

Recognised in profit or loss Inventories recognised as cost of sales 10,538,936 10,104,611



14. TrADE rECEivAblES


Trade receivables 86,769,943 60,564,785 1,777,341 2,781,218Allowance for impairment losses (5,003,686) (5,656,053) - - 81,766,257 54,908,732 1,777,341 2,781,218 Allowance for impairment losses:- At 1 October (5,656,053) (351,606) - -Addition during the financial year (138,554) (5,122,415) - -Writeback during the financial year 705,334 - - -Translation difference 85,587 (182,032) - - At 30 September (5,003,686) (5,656,053) - -

The Group’s normal credit terms range from 30 to 60 (2015 - 30 to 60) days. Other credit terms are assessed and approved on a case-by-case basis.

15. OTHEr rECEivAblES, DEPOSiTS AND PrEPAYMENTS


Other receivables 28,094,888 4,850,794 25,175,874 3,668,219Allowance for impairment losses (2,322,257) (2,130,380) (1,371,928) (1,164,881) 25,772,631 2,720,414 23,803,946 2,503,338

Advances to supplier 29,712 1,608,695 - - Deferred revenue 8,296 7,587 - - Deposits 3,884,929 4,151,718 3,559,176 3,547,675Prepayments 22,662,258 10,002,303 18,146,250 6,695,559Recoverable expenses 709,078 364,285 59,457 78,073

53,066,904 18,855,002 45,568,829 12,824,645 Allowance for impairment losses:- At 1 October (2,130,380) (865,416) (1,164,881) -Addition during the financial year (207,047) (1,164,881) (207,047) (1,164,881)Translation difference 15,170 (100,083) - -

At 30 September (2,322,257) (2,130,380) (1,371,928) (1,164,881)

(a) Included in other receivables are advances of RM 553,545 (2015 - RM568,715) for future joint venture arrangements which are unsecured, interest-free and have no fixed repayment terms.

(b) Included in deposits is an amount of RM3,175,116 (2015 - RM3,175,116) paid to an education content provider as a performance security.

(c) Included in prepayments is an amount of approximately of RM18 million (2015 - RM7 million) paid to an education content provider for content license fees.



16. AMOuNTS OWiNG bY/(TO) SubSiDiAriES


Amount owing by:- Non-trade balances 72,007,038 50,147,722Allowance for impairment losses (16,594,670) (11,151,673) 55,412,368 38,996,049

Amount owing to:- Non-trade balances (16,513,508) (10,885,920) Allowance for impairment losses:- At 1 October (11,151,673) (8,693,457)Addition during the financial year (5,442,997) (2,458,216) At 30 September (16,594,670) (11,151,673)

The amounts owing are non-trade in nature, unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

17. AMOuNTS OWiNG bY/(TO) ASSOCiATES


Amount owing by: Non-trade balances 4,676,536 3,062,325 2,152,022 1,331,858 Amount owing to: Trade balances (22,977) - - -

The trade balances are subject to the normal trade credit terms ranging from 30 to 60 (2015 - Nil) days. The amount owing is to be settled in cash.

The non-trade amount owing is unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.

18. AMOuNTS OWiNG bY/(TO) A JOiNT vENTurE


Amount owing by: Non-trade balances 926,598 922,726 803,613 799,741 Amount owing to: Trade balances (176,816) (98,599) (45) (45)

The trade balances are subject to the normal trade credit terms ranging from 30 to 60 (2015 - 30 to 60) days. The amount owing is to be settled in cash.

The non-trade amount owing is unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash.



19. SHOrT-TErM FuNDS


Fair value through profit or loss: - Unit trust funds in Malaysia - 2,215,463 - 2,215,463 Market value of short-term fund - 2,215,463 - 2,215,463

The short-term funds represent fund in highly liquid money market which are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value.

20. FiXED DEPOSiTS WiTH liCENSED bANKS

(a) The fixed deposits with licensed banks of the Group and of the Company at the end of the reporting period bore effective interest rates ranging from 2.95% to 3.15% (2015 – 3.15% to 3.30%) per annum. The fixed deposits have maturity periods ranging from 1 to 12 months (2015 - 1 to 12 months).

(b) Included in the fixed deposits with licensed banks of the Group and of the Company at the end of the reporting

period is an amount of RM5,309,149 (2015 - RM5,126,696) and RM3,091,968 (2015 - RM3,058,300) respectively which have been pledged as security for banking facilities granted to the Group.

21. SHArE CAPiTAl

The movements in the authorised and paid-up share capital of the Company are as follows:

THE COMPANYOrDiNArY SHArES 2016 2015 2016 2015OF rM0.10 EACH: Number Of Shares rM rM

AUTHORISED At 1 October/30 September 2,000,000,000 2,000,000,000 200,000,000 200,000,000 ISSUED AND FULLY PAID-UP At 1 October 845,867,000 765,500,000 84,586,699 76,549,999Issuance of shares pursuant to: - private placement 60,500,000 76,620,400 6,050,000 7,662,040- employees’ share option scheme 2,145,600 3,746,600 214,560 374,660 At 30 September 908,512,600 845,867,000 90,851,259 84,586,699

(a) During the financial year:-

(i) there were no changes in the authorised share capital of the Company;

(ii) the Company increased its issued and paid-up share capital from RM84,586,699 to RM90,851,259 by:-

(i) a private placement of 60,500,000 new ordinary shares of RM0.10 each at an issue price of RM0.27 for the purpose of working capital; and

(ii) the issuance of 169,700 new ordinary shares of RM0.10 each at an exercise price of RM0.28 per

share pursuant to the Employees’ Share Option Scheme of the Company.

(iii) the issuance of 1,975,900 new ordinary shares of RM0.10 each at an exercise price of RM0.23 per share pursuant to the Employees’ Share Option Scheme of the Company.



21. SHArE CAPiTAl (CONT’D)

(a) During the financial year (Cont’d):-

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

(b) The holders of ordinary shares are entitled to receive dividends as and when declared by the Company, and are entitled to one vote per share at meetings of the Company.

22. rESErvES

THE GrOuP THE COMPANY 2016 2015 2016 2015 Note rM rM rM rM

Share premium (a) 32,713,346 22,165,092 41,979,527 31,431,273 Reverse acquisition reserve (b) (18,570,000) (18,570,000) - - Capital redemption reserve (c) 546,778 546,778 - - Warrant reserve (d) 10,110,377 10,110,377 10,110,377 10,110,377 Foreign exchange translation reserve (e) 35,069 396,650 - - Employees’ share option reserves (f) 2,783,534 840,501 2,783,534 840,501 Retained earnings / Accumulated losses 3,826,132 (811,594) (58,784,208) (55,318,364) 31,445,236 14,677,804 (3,910,770) (12,936,213)

(a) Share Premium

The share premium is not distributable by way of cash dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act, 1965.

The movements in the share premium of the Group and of the Company are as follows:


At 1 October 22,165,092 6,002,056 31,431,273 15,268,237Issuance of ordinary shares pursuant to: - private placement 10,285,000 16,856,488 10,285,000 16,856,488- expenses on issuance of new ordinary shares (277,750) (1,515,625) (277,750) (1,515,625)- employees’ share option scheme 541,004 822,173 541,004 822,173 At 30 September 32,713,346 22,165,092 41,979,527 31,431,273

(b) Reverse Acquisition Reserve

The reverse acquisition reserve represents the difference between the nominal value of Eduspec Sdn. Bhd. and the Company and the par value of the enlarged issued and paid up share capital of the Company of 275,000,000 shares after the acquisition to comply with the Malaysian Companies Act 1965.

(c) Capital Redemption Reserve

The capital redemption reserve represents the redemption of the redeemable preference shares.



22. rESErvES (CONT’D)

(d) Warrant Reserve

THE GrOuP/THE COMPANY 2016 2015 rM rM

At 1 October/30 September 10,110,377 10,110,377

The warrant reserve arose from the allocation of the proceeds received from the renounceable rights issue of 255,166,667 new ordinary shares of RM0.10 each together with 382,750,000 free new detachable warrants during the financial year. The reserve is determined by reference to the fair value of the warrants amounting to RM10,110,377 immediately upon the listing and quotation of the rights issue completed on 30 December 2013.

(e) Foreign Exchange Translation Reserve

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

(f) Employees’ Share Option Reserves

The employees’ share option reserve represents the equity-settled share options granted to employees. The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of the share options.

The Employees’ Share Option Scheme of the Company (“ESOS”) is governed by the ESOS By-Laws and was approved by shareholders on 18 August 2011. The ESOS is to be in force for a period of 3 years effective from 18 January 2012, provided always that on or before the expiry thereof, the Board shall have the discretion upon recommendation of the ESOS committee whether or not to extend in writing the tenure of the ESOS for another two (2) years or such shorter period as it deems fit immediately from the expiry of the first three (3) years.

On 10 October 2015, the Board approved the extension of the tenure of the ESOS for another two (2) years from 18 January 2016 to 17 January 2017.

The main features of the ESOS are as follows:-

(a) Eligible persons are employees and/or directors of the Group, save for companies which are dormant, who have been confirmed in the employment of the Group and have served for at least 1 year before the date of the offer.

(b) The maximum number of new shares of the Company, which may be available under the scheme, shall not exceed in aggregate 10%, or any such amount or percentage as may be permitted by the relevant authorities of the issued and paid-up share capital of the Company at any one time during the existence of the ESOS.

(c) The option price shall be determined by the Option Committee based on the 5-day weighted average market price of shares of the Company immediately preceding the offer date of the option, with a discount of not more than 10%, or at the par value of shares of the Company, whichever is higher.

(d) The option may be exercised by the grantee by notice in writing to the Company in the prescribed form during the option period in respect of all or any part of the new shares of the Company comprised in the ESOS.

(e) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects with the existing ordinary shares of the Company, provided always that new ordinary shares so allotted and issued, will not be entitled to any dividends, rights, allotments and/or other distributions declared, where the entitlement date of which is prior to date of allotment and issuance of the new shares.



22. rESErvES (CONT’D)

(f) Employees’ Share Option Reserves(Cont’d)

The option prices and the details in the movement of the options granted are as follows:-

Number Of Options Over Ordinary Shares Of rM 0.10 Each

Date of Offer Exercise Price

At1.10.2015 Granted Exercised Forfeited

At30.9.2016

10 October 2014 RM0.23 17,632,300 - (1,975,900) (969,500) 14,686,900

2 November 2015 RM0.28 - 17,412,750 (169,700) (1,985,000) 15,258,050

17,632,300 17,412,750 (2,145,600) (2,954,500) 29,944,950

The options forfeited during the financial year were due to resignations of employees.

During the financial year, the Company granted 17,412,750 share options under the ESOS.

These options expire on 17 January 2017 and are exercisable on the specified exercise period and stated in the By Law subject to the options being vested.

The fair values of the share options granted were estimated using a binomial model, taking into account the terms and conditions upon which the options were granted. The fair values of the share options measured at grant date and the assumptions used are as follows:-

THE GrOuP/THE COMPANY 2016 2015 rM rM

Fair value of share options at the grant date (RM) RM0.08 RM 0.11 Weighted average share price (RM) RM0.30 RM 0.25Exercise price (RM) RM0.28 RM 0.23Expected volatility (%) 66% 83%Expected life (years) 3 YEARS 3 YEARSRisk free rate (%) 4% 4%Expected dividend yield (%) 0% 0%

23. lONG-TErM bOrrOWiNGS


Hire purchase payables (Note 24) 457,038 65,477Term loans (Note 25) 22,757,378 13,280,883 23,214,416 13,346,360



24. HirE PurCHASE PAYAblES


Minimum hire purchase payments: - not later than one year 153,896 39,624- later than one year and not later than five years 497,050 70,367 650,946 109,991Less: Future finance charges (66,625) (9,395) Present value of hire purchase payables 584,321 100,596 The net hire purchase payables are repayable as follows:- Current (Note 28): - not later than one year 127,283 35,119 Non-current (Note 23): - later than one year and not later than five years 457,038 65,477 584,321 100,596

The hire purchase payables of the Group bore effective interest rates ranging from 4.95% to 6.54% (2015 - 5.06% - 6.54%) per annum at the end of the reporting period.

25. TErM lOANS


Current portion (Note 28): - not later than one year 889,413 2,940,543 Non-current portion (Note 23): - later than one year and not later than two years 11,258,904 950,881- later than two years and not later than five years 2,099,400 2,445,962- later than five years 9,399,074 9,884,040 22,757,378 13,280,883 23,646,791 16,221,426

Details of the repayment terms are as follows:

TErM lOAN

NuMbEr OF MONTHlY

iNSTAlMENTSMONTHlY

iNSTAlMENT

DATE OF COMMENCEMENT OF

rEPAYMENT

iNTErEST rATE PEr ANNuM THE GrOuP

RM 2016 2015rM rM

1 60 9,473 1 April 2013 9.60% 165,243 257,640



25. TErM lOANS (CONT’D)

TErM lOAN

NuMbEr OF QuArTErlY

iNSTAlMENTS

QuArTErlY iNSTAlMENT

(bY TrANCHES)


rEPAYMENT


rM 2016 2015rM rM

2 3 Tranche 12* 2 April 2015 7.00% - 316,3763 Tranche 13# 24 April 2015 7.00% - 1,022,7203 Tranche 14# 4 May 2015 7.00% - 459,8543 Tranche 15# 19 May 2015 7.00% - 306,8004 Tranche 1^ 31 March 2016 5.85% 5,959,156 -4 Tranche 2^ 6 April 2016 5.85% 4,404,594 -

10,363,750 2,105,750

TErM lOAN

NuMbEr OF MONTHlY

iNSTAlMENTSMONTHlY

iNSTAlMENT


rEPAYMENT


rM 2016 2015rM rM

3 240 38,671 1 May 2015 4.65% 5,766,939 5,957,980240 39,216 1 May 2015 4.65% 5,848,164 6,041,89260 39,462 1 May 2015 6.85% 1,502,695 1,858,164

13,117,798 13,858,036

23,646,791 16,221,426

Notes:- * approximately from RM60,000 to RM80,000.

# approximately from RM244,000 to RM820,000.^ approximately from RM1,000,000 to RM1,500,000

The term loans bore effective interest rates ranging from 4.65% to 9.60% (2015 – 4.65% to 9.60%) per annum at the end of the reporting period and are secured by:

Term Loan 1 and 2

(i) an assignment of proceeds from the contracts signed between a subsidiary and its customers;

(ii) a legal assignment and charge over the collection account and sinking funds account respectively;

(iii) a debenture over the subsidiary’s present and future fixed and floating assets;

(iv) pledges of fixed deposits of the Group as disclosed in Note 20 to the financial statements;

(v) a corporate guarantee of the Company; and

(vi) a joint and several guarantee of certain directors of the Group.

Term Loan 3

(i) an assignment of proceeds from the contracts signed between a subsidiary and its customers;

(ii) a corporate guarantee of the Company; and

(iii) first party charge over a leasehold land and building of the Group.



26. TrADE PAYAblES

The normal credit terms granted to the Group range from 30 to 60 (2015 - 30 to 60) days.

27. OTHEr PAYAblES AND ACCruAlS


Other payables 4,869,852 3,967,526 837,345 296,728Accruals 5,040,943 2,430,919 1,015,317 201,369Deposits received 21,192,952 4,775,964 20,803,328 4,366,740Deferred revenue 1,009,150 160,345 253,254 - 32,112,897 11,334,754 22,909,244 4,864,837

Included in the Group’s other payables and accruals is a provision for employee benefits in its subsidiary in Indonesia, as detailed below:

The Group provide long-term employee benefits to its employee in accordance with Labor Law No. 13/2003 (Law No. 13/2003). The benefits are unfunded. The following tables summarise the components of net benefits expense recognised in the statements of financial position for the estimated liabilities for employee’s benefits as calculated by an independent actuary in its report for the financial year ended 30 September 2016. The actuarial calculation used the “Projected Unit Credit” method with the following assumptions:

2016

Actuarial Discount Rate 9.80%Mortality Rate TMI 2011Salary Increase Rate 10.00% per annumRetirement Age 55 yearsDisability Rate 5.00% from mortality rate

The following tables summarise the components of employee benefits expense and liabilities of the Group.

a. Net employee benefits expense:


Current service cost 45,513 38,993Interest cost 20,345 12,775Adjustment - 144,542 65,858 196,310

b. Employee benefits liability


Present value of defined benefits obligation 258,773 201,611



27. OTHEr PAYAblES AND ACCruAlS (CONT’D)

c. The movement of the present value of obligation are as follows:


Beginning balance 201,611 -Provision during for the year 65,858 196,310Actuarial loss on obligation (15,272) 1,180Translation difference 6,576 4,121 258,773 201,611

d. The movement of the employee benefits liability in the statements of financial position are as follows:


Beginning balance 201,611 -Provision during for the year 65,858 196,310 Income: Actuarial loss on obligation recognised in other comprehensive income (15,272) 1,180Translation difference 6,576 4,121 258,773 201,611

e. Sensitivity analysis as at 30 September 2016 are as follows:

DESCriPTiON ACTuAl DECrEASE 1% iNCrEASE 1% a. Discount rate 7.40% 6.40% 8.40% Present value benefit of obligation 258,773 300,056 224,011b. Salary increment rate 10.00% 9.00% 11.00% Present value benefit of obligation 258,773 223,664 299,691

f. Maturity duration of defined benefits obligation are as follows:

DESCriPTiON PrESENT vAluE bENEFiTS ObliGATiONS uNDiSCOuNTED FuTurE bENEFiTS rM rM a. maturity ≤ 1 year - -b. 1 < maturity ≤ 2 years - -c. 2 < maturity ≤ 5 years 11,677 14,141d. 5 < maturity ≤ 10 years - -e. maturity ≥ 10 years 247,096 833,682

258,773 847,823



28. SHOrT-TErM bOrrOWiNGS


Hire purchase payables (Note 24) 127,283 35,119 - -Term loans (Note 25) 889,413 2,940,543 - -Bankers’ acceptances (Note 29) 232,000 446,000 232,000 446,000Trust receipts (Note 30) 410,048 398,053 - -Foreign currency loans against imports (Note 31) 1,567,800 - 1,567,800 - 3,226,544 3,819,715 1,799,800 446,000

29. bANKErS’ ACCEPTANCES

The bankers’ acceptances of the Group and the Company bore an effective interest of 4.03% (2015 - 7.85%) per annum at the end of the reporting period and are secured by:-

(i) a pledge on the fixed deposits of the Group; and

(ii) a third party charge over the leasehold land and building of the Group.

30. TruST rECEiPTS

The trust receipts of the Group bore effective interests ranging from 8.15% to 8.35% (2015 - 8.35%) per annum at the end of the reporting period and are secured in the same manner as the bank overdrafts as disclosed in Note 32 to the financial statements.

31. FOrEiGN CurrENCY lOANS AGAiNST iMPOrTS

The foreign currency loans against imports of the Group and the Company bore an effective interest of 4.52% (2015 - Nil) per annum above the Bank’s funding cost of the relevant currency at the end of the reporting period and are secured by:-

(i) a pledge on the fixed deposits of the Company as disclosed in Note 20 to the financial statements; and

(ii) a third party charge over the leasehold land and building of the Group.

32. bANK OvErDrAFTS

The bank overdrafts of the Group bore effective interest rates ranging from 7.75% to 8.35% (2015 - 7.35% to 8.35%) per annum at the end of the reporting period and are secured by:-

(i) a pledge of the fixed deposits of certain subsidiaries as disclosed in Note 20 to the financial statements;

(ii) a joint and several guarantee of certain directors of the Group; and

(iii) a corporate guarantee of a subsidiary.



33. DErivATivE liAbiliTY

CONTrACT/ NOTiONAl THE GrOuP/COMPANY

AMOuNT 2016 2015 rM rM rM

Forward foreign currency contracts: United States Dollar 1,597,650 - 35,990

The Company does not apply hedge accounting.

In the previous financial year, forward foreign currency contracts were used to hedge the Company’s purchases denominated in United States Dollar (USD) for which firm commitments existed at the end of the reporting period. The settlement dates on forward foreign currency contracts ranged between one to three months after the end of the reporting period.

34. rEvENuE


Activity income 3,713,805 3,764,093 - -Sale of goods 54,886,394 49,292,388 - -School fees 23,686,939 23,984,130 - -Royalty income 984,564 151,912 - -Dividend income - - 1,000,000 -Grade exam - - 206,600 704,525System software - - - 2,874,252 83,271,702 77,192,523 1,206,600 3,578,777

35. PrOFiT/(lOSS) bEFOrE TAXATiON


Profit/(Loss) before taxation is arrived at after charging/(crediting):- Amortisation of intangible assets 2,184,877 1,624,496 - -Auditors’ remuneration: - current year 376,917 403,544 127,000 127,000- under/(over)provision in prior year 7,119 56,775 (12,000) 45,500Depreciation of property and equipment 3,018,168 3,051,771 35,165 29,842Directors’ fees 114,000 114,000 114,000 114,000Directors’ non-fee emoluments: - salaries, bonus and allowances 1,045,492 1,040,654 649,520 642,000- defined contribution plan 83,222 82,968 78,876 77,040- other benefits 1,379 1,240 1,379 1,240- share-based payments 538,004 141,169 538,004 141,169Property and equipment written off 159 11,131 - -Allowance for impairment losses on: - property and equipment 72,210 - - -- goodwill - 292,853 - -- trade receivables 138,554 5,122,415 - -- other receivables 207,047 1,164,881 207,047 1,164,881- amount owing by subsidiaries - - 5,442,997 2,458,216



35. PrOFiT/(lOSS) bEFOrE TAXATiON (CONT’D)


Allowance for impairment losses on (Cont’d):- investments in subsidiaries - - 2,599,094 6,988,651- amount owing by an associate 1,083,737 - - -Fair value loss on: - derivative liabilities - 35,990 - 35,990- other receivables - 207,047 - 207,047Interest expense: - bank overdrafts 188,652 91,748 108,854 -- hire purchase 16,130 28,792 - -- term loans 1,081,956 350,107 - -Inventories written off 106,993 - - -Loss/(Gain) on foreign exchange: - realised (2,692,136) (6,008,228) (103,381) (43,885)- unrealised 1,329,182 1,266,579 (542,109) 922,769Rental expense 4,880,250 5,648,317 1,920,000 851,814Staff costs: - salaries, wages, bonus and allowances 19,541,582 15,384,162 3,615,405 2,636,072- defined contribution plan 2,215,833 1,804,507 452,450 344,403 - other benefits 1,543,980 1,451,166 212,226 268,769 - share-based payments 1,658,620 1,034,447 290,517 229,845Gain on disposal of property and equipment (2,425) (8,286) - (3,699)Interest income (250,170) (538,171) (156,649) (463,967)Rental income (109,700) (76,699) (1,320,000) (550,000)Share of results in: - associates (79,986) 347,648 - -- joint venture (93,576) (57,320) - -Writeback of impairment losses on: - other receivables (705,334) - - -

36. iNCOME TAX EXPENSE


Current tax expense: - for the financial year 1,018,963 1,051,545 46,555 111,148- underprovision in the previous financial year 86,353 129,825 4,844 95,257 1,105,316 1,181,370 51,399 206,405 Deferred tax expense (Note 12): - for the financial year 148,329 (294,584) - -- overprovision in the previous financial year (55,191) (94,087) - -

93,138 (388,671) - -

Tax for the financial year 1,198,454 792,699 51,399 206,405



36. iNCOME TAX EXPENSE (CONT’D)

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


Profit/(Loss) before taxation 6,219,934 12,113,335 (3,414,445) (9,960,040) Tax at the statutory tax rate of 24% (2015 - 25%) 1,492,784 3,027,329 (819,466) (2,490,010) Tax effects of:- Share of results in: - associates (19,197) 86,912 - -- joint venture (22,458) (14,330) - -Non-deductible expenses 975,894 1,358,767 2,029,593 2,970,666Non-taxable income (578,457) (970,250) (370,103) (15,669)Utilisation of unabsorbed tax losses and capital allowances brought forward (2,470,105) (3,661,240) (793,469) (353,839)Deferred tax assets not recognised during the financial year 1,966,207 1,867,775 - -Deferred tax assets recognised during the financial year (39,116) - - -Under/(Over)provision in the previous financial year - current tax 86,353 129,825 4,844 95,257 - deferred tax (55,191) (94,087) - -Withholding tax 230,299 113,900 - -Effect of differential in tax rates of subsidiaries (368,559) (1,051,902) - -

Tax for the financial year 1,198,454 792,699 51,399 206,405

Domestic income tax is calculated at the Malaysia Statutory tax rate of 24% (2015 - 25%) of the estimated assessable profit for the financial year.

Subject to the agreement of the tax authorities, at the end of the reporting period, the Group and the Company have unutilised tax losses and unabsorbed capital allowances available to be carried forward for offset against future taxable business income as follows:-


Accelerated capital allowances (3,261,319) (3,996,889) (62,720) (52,552)Unutilised tax losses 18,105,076 23,256,600 4,027,132 7,323,086Unabsorbed capital allowances 6,669,200 4,352,825 - -Others 15,000 15,000 - - Total 21,527,957 23,627,537 3,964,412 7,270,534



37. EArNiNGS PEr SHArE


basic earnings per share Profit attributable to owners of the Company (RM) 4,622,454 9,955,937 Weighted average number of ordinary shares:- At 1 October 845,867,000 765,500,000Effect of shares issued under private placement 20,211,233 38,415,159Effect of share issued under ESOS 920,818 1,035,275 At 30 September 866,999,051 804,950,434 Basic earnings per share (sen) 0.53 1.24 Diluted earnings per share Profit attributable to owners of the Company (RM) 4,622,454 9,955,937 Weighted average number of ordinary shares for basic earnings per share 866,999,051 804,950,434Effect of dilution: - exercise of Warrants 83,206,522 83,206,522- exercise of ESOS 16,452,144 7,994,096 Weighted average number of ordinary shares for diluted earnings per share computation 966,657,717 896,151,052 Diluted earnings per share (sen) 0.48 1.11

38. PurCHASE OF EQuiPMENT


Cost of equipment purchased 3,109,803 22,766,561 47,817 41,930Amount financed through: - hire purchase (560,000) - - -- term loans - (14,155,000) - - Cash disbursed for purchase of equipment 2,549,803 8,611,561 47,817 41,930



39. ACQuiSiTiON OF SubSiDiAriES AND ASSOCiATES

(a) During the financial year, the Group acquired/incorporated:

(i) a 100% equity interest in Eduspec HK Limited (“EHKL”) comprising 50,000 ordinary shares of USD1.00 each for a total consideration of RM201,930 which represents the entire issued and paid-up capital of EHK;

(ii) a 100% equity interest in Centillion Robotics Limited (“CRL”) comprising 10,000 ordinary shares of USD1.00 each for a total consideration of RM40,267 which represents the entire issued and paid-up capital of CRL; and

(iii) a 100% equity interest in Centillion Robotics (M) Sdn Bhd (“CRM”) comprising 2 ordinary shares of RM1.00 each for a total consideration of RM2 which represents the entire issued and paid-up capital of CRM.

(b) In the previous financial year, the Group acquired 40% equity interest in DTT Eduspec Joint Stock Company (“DTTE”) for a total cash consideration of RM329,726.

The following summarises the effect of changes in the net assets in DTTE that is attributable to owners of the Group:-

THE GrOuP 2015 rM

Equity interest at 6 November 2014 329,726Share of comprehensive income (Note 6) (329,726) Equity interest at 30 September 2015 -

40. CASH AND CASH EQuivAlENTS

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:-


Fixed deposits with licensed banks (Note 20) 5,320,968 5,226,948 3,091,968 3,058,300Cash and bank balances 3,558,667 9,384,561 366,590 4,306,923Short-term funds (Note 19) - 2,215,463 - 2,215,463Bank overdrafts (Note 32) (3,078,212) (1,297,082) (1,992,314) (4,331) 5,801,423 15,529,890 1,466,244 9,576,355Less: Deposits pledged to licensed banks (Note 20) (5,309,149) (5,126,696) (3,091,968) (3,058,300) 492,274 10,403,194 (1,625,724) 6,518,055

41. OPErATiNG lEASE COMMiTMENTS

The future minimum payments under the non-cancellable operating leases are as follows:-


Not more than one year 3,107,010 2,206,481 - -Later than one year and not later than five years 2,948,052 1,551,324 - - 6,055,062 3,757,805 - -



42. CONTiNGENT liAbiliTY


Corporate guarantee given to licensed banks for banking facilities granted to subsidiaries 26,099,861 16,240,606

43. DirECTOrS’ rEMuNErATiON

(a) The aggregate amounts of remuneration received and receivable by the directors of the Group and of the Company during the financial year are as follows:-


Executive directors: - non-fee emoluments 1,540,197 1,266,031 1,139,779 861,449 Non-executive directors: - fees 114,000 114,000 114,000 114,000- non-fee emoluments 128,000 - 128,000 - 1,782,197 1,380,031 1,381,779 975,449

(b) The number of directors of the Group and of the Company whose total remuneration received or receivable for the financial year falling in bands of RM50,000 are as follows:-

THE GrOuP THE COMPANY 2016 2015 2016 2015 No. No. No. No.

Executive directors:- RM300,001 to RM350,000 - 1 - 1RM350,001 to RM400,000 - - - -RM450,001 to RM500,000 1 - 1 1RM500,001 to RM550,000 - - - -RM850,001 to RM900,000 - 1 - -RM900,001 to RM950,000 - - - -RM950,001 to RM1,000,000 - - - -RM1,000,001 to RM1,050,000 - - - -RM1,050,001 to RM1,100,000 1 - 1 - Non-executive directors:- Below RM50,000 2 4 2 4Below RM50,001 to RM100,000 2 - 2 -



44. OPErATiNG SEGMENTS

Operating segments are prepared in a manner consistent with the internal reporting provided to the Group Executive Committee as its chief operating decision maker in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on their products and services provided.

The primary segment reporting format is determined to be geographical segment as the Group’s risks and rates of return are affected predominantly by the differences in the countries in which the Group operated.

As the Group operates primarily in the development and provision of IT learning programs and educational services segment, consequently, no segment information is prepared in respect of business segments.

The following is an analysis of the Group’s geographical segments:-

MAlAYSiA SiNGAPOrE iNDONESiA HONGKONG GrOuP rM rM rM rM rM

2016 revenue External revenue 39,827,695 16,227,422 27,169,931 46,654 83,271,702Inter-segment revenue 10,518,325 83,835 - - 10,602,160 50,346,020 16,311,257 27,169,931 46,654 93,873,862 Consolidation adjustments and elimination (10,602,160) Consolidated revenue 83,271,702

results Segment results (7,914,790) 4,484,014 13,823,363 (202,596) 10,189,991 Interest income 250,170Depreciation of equipment (3,018,168) 7,421,993Finance costs (1,375,621)Share of results in associates and joint venture 173,562 Profit before taxation 6,219,934Income tax expense (1,198,454) Profit after taxation 5,021,480



44. OPErATiNG SEGMENTS (CONT’D)

The following is an analysis of the Group’s geographical segments (Cont’d):-

MAlAYSiA SiNGAPOrE iNDONESiA HONGKONG GrOuP rM rM rM rM rM

2016Assets Segment assets 114,833,941 37,981,575 39,484,268 125,334 192,425,118 Deferred tax assets 142,470Tax recoverable 556,797 193,124,385liabilities Segment liabilities (56,367,164) (6,488,170) (6,597,892) (40,773) (69,493,999) Deferred tax liabilities (483,250)Provision for taxation (409,176) (70,386,425)

Other segment items Additions to non-current assets other than financial instruments:- - equipment 2,925,166 158,751 25,886 - 3,109,803 - intangible assets 3,632,411 20,465 473,836 - 4,126,712Amortisation of intangible assets 2,181,536 - 3,341 - 2,184,877Impairment loss on: - equipment - 72,210 - - 72,210- receivables 244,499 - 101,102 - 345,601- amount owing by an associate - 1,083,737 - - 1,083,737

MAlAYSiA SiNGAPOrE iNDONESiA GrOuP rM rM rM rM

2015 revenue External revenue 46,842,215 21,609,235 8,741,073 77,192,523Inter-segment revenue 7,073,395 222,085 - 7,295,480 53,915,610 21,831,320 8,741,073 84,488,003

Consolidation adjustments and elimination (7,295,480) Consolidated revenue 77,192,523

results Segment results (1,157,861) 13,812,215 2,733,556 15,387,910 Interest income 538,171Depreciation of equipment (3,051,771) 12,874,310Finance costs (470,647)Share of results in associates and joint venture (290,328) Profit before taxation 12,113,335Income tax expense (792,699) Profit after taxation 11,320,636



44. OPErATiNG SEGMENTS (CONT’D)

The following is an analysis of the Group’s geographical segments (Cont’d):-

MAlAYSiA SiNGAPOrE iNDONESiA GrOuP rM rM rM rM

2015 Assets Segment assets 79,744,786 37,795,268 18,079,330 135,619,384 Deferred tax assets 102,281Tax recoverable 390,189 136,111,854liabilities Segment liabilities (28,855,427) (5,573,214) (1,600,377) (36,029,018) Deferred tax liabilities (350,998)Provision for taxation (433,920) (36,813,936)

Other segment items Additions to non-current assets other than financial instruments:- - equipment 22,271,258 416,675 78,628 22,766,561 - intangible assets 1,882,845 - 6,347 1,889,192Amortisation of intangible assets 1,622,525 - 1,971 1,624,496Impairment loss on: - receivables 2,734,844 3,380,070 172,382 6,287,296- goodwill 292,853 - - 292,853

Major Customers

The following are major customers with revenue equal to or more than 10% of Group revenue:-

rEvENuE GEOGrAPHiCAl SEGMENT 2016 2015 rM rM

Customer A 27,059,798 30,299,918 IndonesiaCustomer B 13,117,567 - Indonesia

45. rElATED PArTY DiSClOSurES

(a) Identities of related parties

In addition to the information detailed elsewhere in the financial statements, the Group has related party relationships with its directors, key management personnel and entities within the same group of companies.



45. rElATED PArTY DiSClOSurES (CONT’D)

(b) Other than those disclosed elsewhere in the financial statements, the Group and the Company also carried out the following significant transactions with the related parties during the financial year:-


(i) Subsidiaries: - Dividend received - - 1,000,000 - - Management fees receivable - - - 3,946,000 - Rental receivable - - 1,320,000 550,000 - Rental expenses 1,920,000 800,000 - Supporting fees receivable - - 12,355,107 - - Utilities and maintenance charges receivable - - - 39,600 - Grade exam - - - 704,625 - Interest payable - - (10,015) - (ii) Associates: - Sales of goods - 123,426 - - - Royalty receivable 592,557 344,170 - - - Purchase of equipment (37,767) - - - (iii) Joint venture: - Royalty payable (525,425) (295,746) - -

(c) Key Management Personnel


Short-term employee benefits 1,782,197 1,380,031 1,381,779 975,449

Key management personnel comprise executive and non-executive directors of the Group who have authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly.

46. FiNANCiAl iNSTruMENTS

The Group’s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

(a) Financial risk Management Policies

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(i) Market risk

(i) Foreign Currency Risk

The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk are primarily Singapore Dollar, United States Dollar, Indonesian Rupiah and Japanese Yen. Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level.



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46. FiNANCiAl iNSTruMENTS (CONT’D)

(a) Financial risk Management Policies (Cont’d)

(i) Market risk (Cont’d)

(i) Foreign Currency Risk (Cont’d)

Foreign currency exposure

uNiTED SiNGAPOrE STATES iNDONESiAN riNGGiT DOllAr DOllAr ruPiAH MAlAYSiA TOTAl THE COMPANY rM rM rM rM rM

2015 Financial Assets Trade receivables - - 2,781,218 - 2,781,218Other receivables and deposits 2,364,543 3,175,015 - 589,428 6,128,986Amount owing by subsidiaries 17,220,616 - - 21,775,433 38,996,049Amount owing by associate - - - 1,331,858 1,331,858Amount owing by a joint venture - - - 799,741 799,741Short-term funds - - - 2,215,463 2,215,463Fixed deposits with licensed banks - - - 3,058,300 3,058,300Cash and bank balances - 56,197 - 4,250,726 4,306,923 19,585,159 3,231,212 2,781,218 34,020,949 59,618,538 Financial liabilities Other payables and accruals 4,366,740 - - 498,097 4,864,837Amount owing to subsidiaries 4,128,418 - - 6,757,502 10,885,920Amount owing to a joint venture - - - 45 45Bankers’ acceptances - - - 446,000 446,000Bank overdrafts - - - 4,331 4,331Derivative liability - - - 35,990 35,990 8,495,158 - - 7,741,965 16,237,123

Net financial assets 11,090,001 3,231,212 2,781,218 26,278,984 43,381,415Less: Net financial liabilities denominated in the respective entities’ functional currencies - - - (26,278,984) (26,278,984) Currency Exposure 11,090,001 3,231,212 2,781,218 - 17,102,431






(i) Foreign Currency Risk (Cont’d)

Foreign currency risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies at the end of the reporting period, with all other variables held constant:-

THE GrOuP THE COMPANY 2016 2015 2016 2015 increase/ increase/ increase/ increase/ (Decrease) (Decrease) (Decrease) (Decrease) rM rM rM rM

Effects on profit/(loss) after taxation and equity Singapore Dollar: - strengthened by 10% - - 1,028,555 831,750 - weakened by10% - - (1,028,555) (831,750) United States Dollar: - strengthened by 10% (561,768) 1,313,078 125,662 24,234 - weakened by10% 561,768 (1,313,078) (125,662) (24,234) Indonesian Rupiah: - strengthened by 10% - 140,728 1,819,653 208,591 - weakened by 10% - (140,728) (1,819,653) (208,591)

Effects on profit/(loss) after taxation and equity Hong Kong Dollar: - strengthened by 10% - - (8,945) - - weakened by 10% - - 8,945 - Vietnamese Dong: - strengthened by 10% 176,833 122,632 - - - weakened by 10% (176,833) (122,632) - -

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from interest-bearing financial assets and liabilities. The Group’s policy is to obtain the most favourable interest rates available. Any surplus funds of the Group will be placed with licensed financial institutions to generate interest income.






(ii) Interest Rate Risk (Cont’d)

Interest rate risk sensitivity analysis

The following table details the sensitivity analysis on a reasonably possible change in the interest rates at the end of the reporting period, with all other variables held constant:-

THE GrOuP THE COMPANY 2016 2015 2016 2015 increase/ increase/ increase/ increase/ (Decrease) (Decrease) (Decrease) (Decrease) rM rM rM rM

Effects on profit/(loss) after taxation and equity Increase of 100 basis points (bp) (162,671) (92,187) 8,357 22,905 Decrease of 100bp 162,671 92,187 (8,357) (22,905)

(iii) Equity Price Risk

The Group and the Company do not have any quoted investments and hence are not exposed to equity price risk.

(ii) Credit risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. Impairment is estimated by management based on prior experience and the current economic environment.

(a) Credit risk concentration profile

The Group’s major concentration of credit risk relates to the amounts owing by 2 customers which constituted approximately 87% of its trade receivables at the end of the reporting period.





(ii) Credit risk (Cont’d)

(b) Exposure to credit risk

As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the financial assets at the end of the reporting period.

The exposure of credit risk for trade receivables by geographical region is as follows:-


Malaysia 4,366,663 6,900,351Indonesia 77,387,597 48,008,381Singapore 6,836 -Myanmar 5,161 - 81,766,257 54,908,732

(c) Ageing analysis

The ageing analysis of the Group’s trade receivables at the end of the reporting period is as follows:-

GrOSS iNDiviDuAl CArrYiNG AMOuNT iMPAirMENT vAluE rM rM rM

2016 Not past due 18,631,156 - 18,631,156 Past due - Past due within 30 days 485,012 - 485,012- Past due 31 - 60 days 3,149,921 - 3,149,921- Past due 61 - 90 days 590,376 - 590,376- Past due more than 90 days 63,913,478 (5,003,686) 58,909,792 68,138,787 (5,003,686) 63,135,101 86,769,943 (5,003,686) 81,766,257

GrOSS iNDiviDuAl CArrYiNG AMOuNT iMPAirMENT vAluE rM rM rM

2015 Not past due 21,230,433 - 21,230,433 Past due - Past due within 30 days 3,645,749 - 3,645,749- Past due 31 - 60 days 972,669 - 972,669- Past due 61 - 90 days 155,667 - 155,667- Past due more than 90 days 34,560,267 (5,656,053) 28,904,214 39,334,352 (5,656,053) 33,678,299 60,564,785 (5,656,053) 54,908,732





(ii) Credit risk (Cont’d)

(c) Ageing analysis (Cont’d)

At the end of the reporting period, trade receivables that are individually impaired were those in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

Trade receivables that are past due but not impaired

The Group believes that no impairment allowance is necessary in respect of these trade receivables. They are substantially companies with good collection track record and no recent history of default.

Trade receivables that are neither past due nor impaired

A significant portion of trade receivables that are neither past due nor impaired are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 180 days, which are deemed to have higher credit risk, are monitored individually.

(iii) liquidity risk

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

WEiGHTED AvErAGE CONTrACTuAl EFFECTivE CArrYiNG uNDiSCOuNTED WiTHiN 1 - 5 rATE AMOuNT CASH FlOWS 1 YEAr YEArS % rM rM rM rM

THE GrOuP2016 Trade payables - 7,662,137 7,662,137 7,662,137 -Other payables and accruals - 9,910,795 9,910,795 9,910,795 -Amount owing to associates - 22,977 22,977 22,977 -Amount owing to a joint venture - 176,816 176,816 176,816 -Hire purchase payables 5.09 584,321 650,947 153,896 497,051Term loans 5.35 23,646,791 30,968,748 2,129,976 28,838,772Foreign currency loans against imports 4.52 1,567,800 1,567,800 1,567,800 -Trust receipts 8.27 410,048 410,048 410,048 -Bankers’ acceptances 4.03 232,000 232,000 232,000 -Bank overdrafts 7.95 3,078,212 3,078,212 3,078,212 - 47,291,897 54,680,480 25,344,657 29,335,823





(iii) liquidity risk (Cont’d)


THE GrOuP2015 Trade payables - 6,096,518 6,096,518 6,096,518 -Other payables and accruals - 6,398,445 6,398,445 6,398,445 -Amount owing to a joint venture - 98,599 98,599 98,599 -Hire purchase payables 5.50 100,596 109,991 39,624 70,367Term loans 5.29 16,221,426 22,890,704 3,655,052 19,235,652Trust receipts 8.35 398,053 398,053 398,053 -Bankers’ acceptances 7.85 446,000 446,000 446,000 -Bank overdrafts 8.35 1,297,082 1,297,082 1,297,082 - 31,056,719 37,735,392 18,429,373 19,306,019

THE COMPANY2016 Other payables and accruals - 1,852,662 1,852,662 1,852,662 -Amount owing to subsidiaries - 16,513,508 16,513,508 16,513,508 -Amount owing to joint venture - 45 45 45 -Foreign currency loans against imports 4.52 1,567,800 1,567,800 1,567,800 -Banker acceptance 4.03 232,000 232,000 232,000 -Bank overdrafts 7.75 1,992,314 1,992,314 1,992,314 - 22,158,329 22,158,329 22,158,329 -





(iii) liquidity risk (Cont’d)


THE COMPANY2015

Other payables and accruals - 498,097 498,097 498,097 -Amount owing to subsidiaries - 10,885,920 10,885,920 10,885,920 -Bankers’ acceptances 7.85 446,000 446,000 446,000 -Bank overdraft 7.85 4,331 4,331 4,331 -Amount owing to joint venture - 45 45 45 - 11,834,393 11,834,393 11,834,393 -

(b) Capital risk Management

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholders’ value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio. In the current financial year, the net debt components comprise total borrowings from financial institution less cash and cash equivalents.

The debt-to-equity ratio of the Group at the end of the reporting period is as follows:-


Foreign currency loans against imports 1,567,800 -Trust receipts 410,048 398,053Bankers’ acceptances 232,000 446,000Hire purchase payables 584,321 100,596Term loans 23,646,791 16,221,426Bank overdrafts 3,078,212 1,297,082 29,519,172 18,463,157Less: Short-term funds - (2,215,463)Less: Fixed deposits with licensed banks (5,320,968) (5,226,948)Less: Cash and bank balances (3,558,667) (9,384,561) Net debt 20,639,537 1,636,185 Total equity 122,737,960 99,297,918

Debt-to-equity ratio 0.17 0.02




(c) Classification Of Financial Instruments


Financial Assets Loans and receivables financial assets Trade receivables 81,766,257 52,127,514 1,777,341 2,781,218Other receivables and deposits 30,374,934 10,025,222 3,559,176 6,129,086Amount owing by subsidiaries - - 55,412,368 38,966,049Amount owing by associates 4,676,536 3,062,325 2,152,022 1,331,858Amount owing by a joint venture 926,598 922,726 803,613 -Fixed deposits with licensed banks 5,320,968 5,226,948 3,091,968 3,058,300Cash and bank balances 3,558,667 9,384,561 366,590 4,306,923 126,623,960 80,749,296 67,163,078 56,573,434 Fair value through profit or loss financial assets Short-term funds - 2,215,463 - 2,215,463

Financial liabilities Other financial liabilities Trade payables 7,662,137 6,096,518 - -Other payables and accruals 9,910,795 6,398,445 1,852,662 498,097Amount owing to subsidiaries - - 16,513,508 10,885,920Amount owing to associates 22,977 - - -Amount owing to a joint venture 176,816 98,599 - -Amount owing to related company - - 45 45Bankers’ acceptances 232,000 446,000 232,000 446,000Trust receipts 410,048 398,053 - -Foreign currency loans against imports 1,567,800 - 1,567,800 -Hire purchase payable 584,321 100,596 - -Term loans 23,646,791 16,221,426 - -Bank overdrafts 3,078,212 1,297,082 1,992,314 4,331 47,291,897 31,056,719 22,158,329 11,834,393 Fair value through profit or loss financial liability Derivative liability - 35,990 - 35,990



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47. SiGNiFiCANT EvENTS DuriNG THE FiNANCiAl YEAr

(a) On 2 November 2015, the Company granted a second Employees Share Option Scheme (“ESOS”) offer amounting to 17,412,750 share options under the Company’s ESOS to directors and employees of the Company. On 31 December 2015, 169,700 new ordinary shares of RM0.10 each at an exercise price of RM0.28 per share pursuant to the exercise of options under the ESOS.

(b) On 7 December 2015, the Company signed a Master Distribution Agreement with CM ASIA LEARNING PTE

LTD. (“CM Asia”) whereby the Company granted an exclusive distribution rights within the Designated Markets and the rights to appoint resellers/distributor to distribute the Science Technology Engineering Mathematics (“STEM”) Education Using Robotics, Stem Computer Science For Schools Program (STEM CS) and Software Development Program (SDP) to CM Asia.

(c) On 31 December 2015, 655,000 new ordinary shares of RM0.10 each at an exercise price of RM0.23 per share

pursuant to the exercise of options under the ESOS. (d) On 17 February 2016, the Company incorporated a wholly-owned subsidiary in Hong Kong namely Eduspec

HK Limited, with an issued capital of USD50,000 equivalent to RM201,930.

(e) On 8 March 2016, the Company incorporated a wholly-owned sub-subsidiary in Hong Kong namely Centillion Robotics Limited (“CRL”), with an issued capital of USD10,000 equivalent to RM40,267.

(f) On 27 April 2016, the Company announced a Private Placement (“Proposal”) for the listing of and quotation

for 126,269,900 new ordinary shares of the Company on the ACE Market of Bursa Securities Malaysia Berhad (“Bursa Securities). The structure and status of Proposal are as follows:-

unit price Total number of shares issued Status

First Tranche RM0.27 60,500,000 Completed

Second Tranche RM0.21 7,380,000 Completed on 11 November 2016

On 21 October 2016, Bursa Securities had approved the application for an extension of time of 6 months from 27 October 2016 till 26 April 2017 to complete the implementation of the Private Placement for the unissued shares. The total number of unissued shares is 58,389,900.

(g) On 24 May 2016, a wholly owned sub-subsidiary of the Company namely Centillion Robotics Limited incorporated Centillion Robotic (M) Sdn. Bhd. (“CRM”) for a total consideration of RM1.00 comprising 50% equity interest in CRM.

(h) On 11 July 2016, 1,320,900 new ordinary shares of RM0.10 each at an exercise price of RM0.23 per share

pursuant to the exercise of options under the ESOS. (i) On 19 July 2016, Centillion Robotics Limited, a wholly owned sub-subsidiary of the Company completed

the acquisition of the remaining 50% equity interest in Centillion Robotics (M) Sdn Bhd for a total consideration of RM1.00. Subsequent to the acquisition, Centillion Robotics (M) Sdn Bhd became a wholly owned subsidiary of Centillion Robotics Limited.

(j) On 27 September 2016, Eduspec Pte Ltd, a wholly owned subsidiary of the Company entered into a Joint

Venture Agreement and incorporated a company in Thailand, namely Eduspec (Thailand) Co., Ltd.

48. COMPArATivE iNFOrMATiON The following information have been reclassified to conform with the presentation of the current financial year:

THE GrOuP As Previously As restated reported rM rM

Consolidated Statement of Financial Position (Extract) Other payables and accruals 11,334,754 10,429,911 Provision for taxation 433,920 1,338,763



49. SuPPlEMENTArY iNFOrMATiON - DiSClOSurE OF rEAliSED AND uNrEAliSED PrOFiTS/lOSSES

The breakdown of the accumulated losses of the Group and of the Company at the end of the reporting period into realised and unrealised losses are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and 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, as follows:-


Total accumulated losses of the Company and its subsidiaries: - realised (38,540,985) (34,770,034) (45,890,297) (44,403,476) - unrealised (14,741,412) (12,938,114) (12,893,911) (10,914,888) (53,282,397) (47,708,148) (58,784,208) (55,318,634)Total share of retained profits of associates: - realised (130,469) (210,454) - -- unrealised - - - - Total share of retained profits of joint venture: - realised 275,361 181,785 - -- unrealised - - - - (53,137,505) (47,736,817) (58,784,208) (55,318,634)Less: Consolidation adjustments 56,963,637 46,925,223 - - At 30 September 3,826,132 (811,594) (58,784,208) (55,318,634)



NOTiCE iS HErEbY GivEN THAT the Thirteenth Annual General Meeting of EDuSPEC HOlDiNGS bErHAD (“the Company”) will be held at Greens II, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Monday, 27 February 2017 at 10.00 a.m. for the following purposes :

AGENDA

OrDiNArY buSiNESS:

1. To receive the Audited Financial Statements for the financial year ended 30 September 2016 together with the Reports of the Directors and Auditors thereon.

Please refer to Note 1

2. To approve the payment of Directors’ Fees for the financial year ended 30 September 2016. Resolution 1

3. To re-elect the following Directors who retire pursuant to Article 80 of the Company’s Articles of Association and being eligible, offer themselves for re-election :(i) Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom(ii) Tengku Abu Bakar Ahmad Bin Tengku Abdullah Resolution 2

Resolution 34. To re-appoint Dato’ Dr Mohd Ariff Bin Araff who retires pursuant to Section 129(2) of the Companies

Act, 1965 and being eligible, offers himself for re-appointment.Resolution 4

5. To re-appoint Messrs Crowe Horwath as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration.

Resolution 5

SPECiAl buSiNESS:

To consider and, if thought fit, to pass with or without modifications, the following Ordinary Resolutions:

6. Ordinary resolutionAuthority to issue shares pursuant to Section 132D of the Companies Act, 1965

“THAT subject always to the approvals of the relevant authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965, to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit, provided that the aggregate number of shares to be issued does not exceed 10% of the issued share capital of the Company at the time of issue and the Directors are hereby further empowered to obtain approval for the listing of and quotation of the additional shares so issued on the Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 6

ANY OTHEr buSiNESS:

7. Ordinary resolutionretention of independent Non-Executive Director Pursuant to recommendation 3.3 of the Malaysian Code on Corporate Governance 2012

“THAT pursuant to Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012, Mr Lim Beng Weh who has served the Board as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years be and is hereby retained as an Independent Non-Executive Director of the Company.”

Resolution 7

8. To transact any other business for which due notice shall have been given in accordance with the Company’s Articles of Association and the Companies Act, 1965.

BY ORDER OF THE BOARD

WONG YOUN KIM (MAICSA 7018778)SIN MAY PENG (MAICSA 7018354)Company Secretaries

Kuala LumpurDated : 26 January 2017

Notice Of The Thirteenth Annual General Meeting


NOTES:

1. Item 1 of the Notice is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of shareholders for the Audited Financial Statements and hence, is not put forward for voting.

2. A member of the Company entitled to attend and vote at the meeting may appoint a proxy or proxies (or being a corporate member, a corporate representative) to attend and vote in *his/her stead. A proxy may but need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

3. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless *he/she specifies the proportions of *his/her shareholdings to be represented by each proxy.

4. The instrument appointing a proxy in the case of an individual shall be signed by the appointer or *his/her attorney or in the case of a corporation executed under its common seal or signed on behalf of the corporation by its attorney or by an officer duly authorised.

5. The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or executed must be deposited at the Registered Office of the Company at Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

7. In respect of deposited securities, only members whose names appear in the Record of Depositors on 21 February 2017 shall be eligible to attend, speak and vote at the meeting or appoint proxy(ies) to attend, speak and vote on *his/her behalf.

[*Delete if not applicable]

EXPlANATOrY NOTES ON SPECiAl buSiNESS :

1. Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

The proposed Resolution 6 is a renewal of the previous year’s mandate and if passed, will authorise the Directors of the Company to issue new shares up to a maximum 10% of the total issued and paid-up share capital of the Company at the time of issue for such purposes as the Directors consider would be in the best interest of the Company. This authority, unless revoked or varied by the shareholders of the Company in general meeting, will expire at the conclusion of the next Annual General Meeting.

The general mandate granted by the shareholders at the Twelfth Annual General Meeting of the Company held on 25 March 2016 have been utilised via a private placement exercise which have been completed on 11 November 2016 where 67,880,000 new ordinary shares of RM0.10 each have been issued. The proceeds of RM17,884,800 raised from the private placement exercise had been utilised in the following manner as at 26 January 2017 :

RM’000

Proceeds from Private Placement17,885

Utilisations :14,833

Balance of unutilised proceeds as at 26 January 20173,052

The mandate is to provide flexibility to the Company to issue new shares without the need to convene a separate general meeting to obtain shareholders’ approval so as to avoid incurring additional cost and time. This mandate is also meant for any possible fund raising exercises including but not limited to further placement of shares for purpose of funding current and/or future investment, working capital and/or acquisitions.

Notice Of The Thirteenth Annual General Meeting (cont’d)


2. Retention of Independent Non-Executive Director Pursuant to Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012

The Nomination Committee has assessed the independence of Mr Lim Beng Weh who has served as an Independent Non-Executive Director for a cumulative of ten (10) years and recommended him to continue to act as an Independent Non-Executive Director of the Company on the following justifications :

(a) He fulfils the criteria under the definition of Independent Director as stated defined in the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad;

(b) He has vast experience which enables him to provide an objective and independent view point in enabling the Board to properly discharge its duties and responsibilities;

(c) He has always actively participated in Board and Board Committees discussion and has continuously provided an independent view to the Board.

STATEMENT ACCOMPANYiNG NOTiCE OF THE THirTEENTH ANNuAl GENErAl MEETiNG

1. The Directors seeking re-election/re-appointment at the Thirteenth Annual General Meeting of the Company are as follows :

1.1 Article 80 of the Company’s Articles of Association :(i) Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom(ii) Tengku Abu Bakar Ahmad Bin Tengku Abdullah

1.2 Section 129(2) of the Companies Act, 1965 :(i) Dato’ Dr Mohd Ariff Bin Araff

The profiles of the Directors seeking for re-election/re-appointment are set out on pages 5, 8 and 9 of this Annual Report.

2. The details of attendance of the Directors of the Company at Board of Directors’ Meetings held during the financial year ended 30 September 2016 are disclosed in the Statement on Corporate Governance set out on page 23 of this Annual Report.

3. The details of the Thirteenth Annual General Meeting are as follows :

Date of Meeting Time of Meeting Place of Meeting

Monday, 27 February 2017 10.00 a.m. Greens II, Tropicana Golf & Country Resort,Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan

Notice Of The Thirteenth Annual General Meeting (cont’d)


Authorised Share Capital : RM200,000,000Issued and fully paid-up Share Capital : RM91,589,260Class of Shares : Ordinary Shares of RM0.10 eachVoting Rights : One (1) vote per ordinary share

ANAlYSiS bY SiZE OF SHArEHOlDiNGS

Size of Holdings No of Holders % No of Shares %

Less than 100 16 0.963 614 0.000100 – 1,000 153 9.216 104,725 0.0111,001 - 10,000 459 27.650 2,996,039 0.32710,001 - 100,000 759 45.722 29,548,482 3.226100,001 – 45,794,629 (*) 269 16.204 602,946,259 65.83145,794,630 and above (**) 4 0.240 280,296,481 30.603Total 1,660 100.000 915,892,600 100.000

Remark : * Less than 5% of Issued Shares**5% and Above of Issued Shares

DirECTOrS’ SHArEHOlDiNGS

Name Shareholdings

Direct % Indirect %Lim Een Hong 250,000 0.027 162,843,814*1 17.780Lim Soon Seong - - - -Lim Beng Weh 301,000 0.033 - -Dato’ Dr Mohd Ariff Bin Araff - - 1,800,000*2 0.197Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom - - - -Tengku Abu Bakar Ahmad Bin Tengku Abdullah - - - -

Notes :*1 Deemed interested by virtue of his shareholdings in Victory Solutions (M) Sdn Bhd and Victory Solutions Holdings Sdn Bhd under Section 6A(4) of the

Companies Act, 1965.*2 Deemed interested by virtue of his son, Ismael Alias Ariff Bin Mohd Ariff’s shareholdings in Eduspec Holdings Berhad by virtue of Section 134(12)(c)

of the Companies Act, 1965.

SubSTANTiAl SHArEHOlDErS

Name Shareholdings

Direct % indirect %Autonaire Sdn Bhd 90,727,381 9.905 - -Areca Capital Sdn Bhd 97,983,500 10.698 - -Victory Solutions (M) Sdn Bhd 115,797,514 12.643 - -Victory Solutions Holdings Sdn Bhd 47,046,300 5.137 - -Lim Een Hong 250,000 0.027 162,843,814*1 17.780Yap Ai Lia - - 116,047,514*2 12.670Chen Jui Liang 5,000,200 0.546 47,046,300*3 5.137


Companies Act, 1965.*2 Deemed interested by virtue of her shareholdings in Victory Solutions (M) Sdn Bhd and her spouse, Lim Een Hong’s shareholdings in Eduspec Holdings

Berhad under Section 6A(4) of the Companies Act, 1965.*3 Deemed interested by virtue of his shareholdings in Victory Solutions Holdings Sdn Bhd under Section 6A(4) of the Companies Act, 1965.

Analysis of Shareholdingsas at 30 December 2016


liST OF TOP 30 SHArEHOlDErS

No. Name No. of Shares Held %

1. Autonaire Sdn Bhd 90,727,381 9.905

2. UOBM Nominees (Tempatan) Sdn BhdExempt An for Areca Capital Sdn Bhd (Client A/C 1)

78,792,500 8.602

3. M & A Nominee (Tempatan) Sdn BhdPledged Securities Account for Victory Solutions (M) Sdn Bhd

63,730,300 6.958

4. Victory Solutions Holdings Sdn Bhd 47,046,300 5.136

5. Kencana Capital Sdn Bhd 36,620,400 3.998

6. RHB Nominees (Asing) Sdn Bhd Pledged Securities Account for Chung, Chih-Chieh

34,629,366 3.780

7. Victory Solutions (M) Sdn Bhd 31,967,214 3.490

8. Chang, Li-Yin 31,394,733 3.427

9. Lim Kok Chuan @ Bernard Lim 29,000,000 3.166

10. Cho Lin, Hsiu-Hui 21,839,000 2.384


12. Maybank Nominees (Tempatan) Sdn BhdExempt An for Areca Capital Sdn Bhd

19,191,000 2.095

13. OSK Technology Ventures Sdn Bhd 18,500,000 2.019

14. Tan Chin Kwang Johnson 15,627,850 1.706

15. Lingkaran Bersatu Sdn Bhd 14,886,100 1.625

16. Cimsec Nominees (Tempatan) Sdn BhdPledged Securities Account for James Khong Poh Wah

13,980,750 1.526

17. Chen Jui-Hung 13,523,550 1.476

18. DB (Malaysia) Nominee (Tempatan) Sendirian BerhadExempt An for Affin Hwang Asset Management Berhad (TSTAC/CLNT-T)

12,884,600 1.406

19. HSBC Nominees (Tempatan) Sdn Bhd 8,578,200 0.936

20. CIMB Group Nominees (Tempatan) Sdn Bhd CIMB Islamic Trustee Berhad for Affin Hwang Multi-Asset Fund

8,000,000 0.873

21. James Khong Poh Wah 7,830,000 0.854

22. Wan Huzaifah Ariff 7,738,298 0.844

23. Leow Thang Fong 7,600,000 0.829

24. Maybank Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Abdul Razak Bin Kechik (REM 851)

7,600,000 0.829

25. HLIB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Yeoh Eng Hua

7,500,000 0.818

26. DB (Malaysia) Nominee (Tempatan) Sendirian BerhadDeutsche Trustees Malaysia Berhad for Affin Hwang Flexi Fund II

7,432,400 0.811

27. Wan Hilwanie Ariff 7,253,358 0.791

28. Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Yeoh Poh Choo

7,199,400 0.786

29. Goh Thong Beng 6,830,000 0.745

30. Ng Thiam Seong 6,764,800 0.738

TOTAL 684,667,500 74.754

Analysis of Shareholdingsas at 30 December 2016 (cont’d)


Number of Warrants in Issue : 382,750,000Number of Warrants Exercised : 0Exercise Price of Warrants : RM0.18 per warrantExpiry Date of Warrant : 24 December 2018

ANAlYSiS bY SiZE OF WArrANT HOlDiNGS

Size of Holdings No of Holders % No of Warrants %

1 - 99 53 8.803 2,583 0.000100 - 1,000 27 4.485 17,325 0.0041,001 - 10,000 80 13.289 569,900 0.14810,001 - 100,000 245 40.697 11,936,884 3.118100,001 – 19,137,499 (*) 194 32.225 218,050,618 56.96919,137,500 and above (**) 3 0.498 152,172,690 39.757Total 602 100.000 382,750,000 100.000

Remark : * Less than 5% of Issued Warrants**5% and Above of Issued Warrants

DirECTOrS’ WArrANT HOlDiNGS

Name Shareholdings

Direct % indirect %Lim Een Hong 0 0 44,814,450 *1 11.709Lim Soon Seong 0 0 0 0Lim Beng Weh 0 0 0 0Dato’ Dr Mohd Ariff Bin Araff 0 0 900,000 *2 0.235Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom 0 0 0 0Tengku Abu Bakar Ahmad Bin Tengku Abdullah 0 0 0 0


Companies Act, 1965.*2 Deemed interested by virtue of his son, Ismael Alias Ariff Bin Mohd Ariff’s shareholdings in Eduspec Holdings Berhad by virtue of Section 134(12)(c)

of the Companies Act, 1965.

SubSTANTiAl WArrANT HOlDErS

Name Shareholdings

Direct % indirect %Areca Capital Sdn Bhd 106,809,000 27.906 - -Autonaire Sdn Bhd 45,363,690 11.852 - -Lim Een Hong 0 0 44,814,450 *1 11.709


Companies Act, 1965.

Analysis of Warrant Holdingsas at 30 December 2016


liST OF TOP 30 WArrANT HOlDErS

No. Name No. of Shares Held %

1. UOBM Nominees (Tempatan) Sdn BhdExempt An for Areca Capital Sdn Bhd (Client A/C 1)

80,050,000 20.914

2. Autonaire Sdn Bhd 45,363,690 11.852

3. Maybank Nominees (Tempatan) Sdn BhdExempt An for Areca Capital Sdn Bhd

26,759,000 6.991

4. Victory Solutions Holdings Sdn Bhd 18,719,000 4.890


6. Cimsec Nominees (Tempatan) Sdn BhdPledged Securities Account for James Khong Poh Wah

12,740,775 3.328

7. Lim Kok Chuan @ Bernard Lim 10,000,000 2.612

8. Tan Chin Kwang Johnson 8,461,425 2.210

9. Queensvale Holdings Inc. 8,435,000 2.203


11. HSBC Nominees (Asing) Sdn BhdExempt An for Credit Suisse (SG BR-TST-ASING)

5,116,425 1.336

12. RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Beng Teck (CEB)

5,097,900 1.331

13. Ng Thiam Seong 4,817,645 1.258

14. Joel Ow Yang 3,874,900 1.012

15. HLIB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Yeoh Poh Choo

3,650,000 0.953

16. Leow Thang Fong 3,600,000 0.940

17. Choong Wai Kee 3,431,000 0.896

18. James Khong Poh Wah 3,354,300 0.876

19. HSBC Nominees (Asing) Sdn BhdExempt An for Bank Julius Baer & Co. Ltd. (Singapore Bch)

3,091,650 0.807

20. Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Yeoh Poh Choo

3,050,000 0.796

21. RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Cheah Song Kang @ Chiah Jee Ba (CEB)

2,966,400 0.775

22. Citigroup Nominees (Asing) Sdn BhdExempt An for UBS AG Singapore (Foreign)

2,725,000 0.711

23. RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Ho Ninghao (CEB)

2,637,400 0.689

24. Dawnway Lau 2,230,000 0.582

25. Teo Siew Hong 2,200,000 0.574

26. Tung Pui Hiew 2,128,200 0.556

27. Yeoh Eng Hua 2,000,000 0.522

28. Chen Jui-Hung 1,827,425 0.477

29. Chang Moy 1,799,850 0.470

30. GV Asia Fund Limited 1,676,800 0.438

TOTAL 297,899,235 77.831

Analysis of Warrant Holdingsas at 30 December 2016 (cont’d)

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FOrM OF PrOXY

(Company No. 646756-X)(Incorporated in Malaysia)

*I/We, (FULL NAME IN BLOCK LETTERS)

of (ADDRESS)

being a member(s) of EDUSPEC HOLDINGS BERHAD, hereby appoint (FULL NAME) of

(ADDRESS)or failing whom,

(FULL NAME)of

(ADDRESS)or failing *him/her, the Chairman of the Meeting, as *my/our proxy(ies) to attend, speak and vote on *my/our behalf at the Thirteenth Annual General Meeting of the Company to be held at Greens II, Tropicana Golf & Country Resort, Jalan Kelab Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan on Monday, 27 February 2017 at 10.00 a.m. and at any adjournment thereof in the manner indicated below :

FOR AGAINST

NO. ORDINARY RESOLUTION

1. To approve the payment of Directors’ Fees for the financial year ended 30 September 2016.

2. Re-election of Director – Tan Sri Dato’ Haji Alimuddin Bin Haji Mohd Dom

3. Re-election of Director – Tengku Abu Bakar Ahmad Bin Tengku Abdullah

4. Re-appointment of Director – Dato’ Dr Mohd Ariff Bin Araff

5. To re-appoint Messrs. Crowe Horwath as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

SPECiAl buSiNESS

6. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965.

7. Continuing in Office for Mr Lim Beng Weh as an Independent Non-Executive Director

Plesae indicate with an”X’ in the appropriate box on how you wish your vote to be casted on the Resolutions specified in the Notice of Meeting. Unless voting instructions were indicated in the space above, the proxy will vote as *he/she thinks fit.

Dated this day of 2017

No of Ordinary Shares Held:

CDS Account No.:

Tel No. (during office hours):

Signature/Common Seal of Shareholder(s)[* Delete if not applicable]

Notes:-

1. A member of the Company entitled to attend and vote at the meeting may appoint a proxy or proxies (or being a corporate member, a corporate representative) to attend and vote in *his/her stead. A proxy may but need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless *he/she specifies the proportions of *his/her shareholdings to be represented by each proxy.

3. The instrument appointing a proxy in the case of an individual shall be signed by the appointer or *his/her attorney or in the case of a corporation executed under its common seal or signed on behalf of the corporation by its attorney or by an officer duly authorised.

4. The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or executed must be deposited at the Registered Office of the Company at Level 2, Tower 1, Avenue 5, Bangsar South City, 59200 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

5. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

6. In respect of deposited securities, only members whose names appear in the Record of Depositors on 21 February 2017 shall be eligible to attend, speak and vote at the meeting or appoint proxy(ies) to attend, speak and vote on *his/her behalf.

For appointment of two proxies, percentage of unitholdings to be represented by the proxies:-

No. of units Percentage (%)Proxy 1 Proxy 2 Total 100%

EDUSPEC HOLDINGS BERHAD (646756-X)

LEVEL 2, TOWER 1AVENUE 5, BANGSAR SOUTH CITY

59200 KUALA LUMPUR

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