Patimas Annual Report 2013

ANNUALREPORT2013

Corporate Information

1

Corporate Structure 4

Board of Directors Profile 5

Chairmans Statement 8

Statement of Corporate Governance 10

Other Information 17

Report of the Audit Committee 19

Statement on Risk Management and Internal Control 24

Financial Statements 26

Analysis of Shareholdings 119

Notice of Annual General Meeting 121

Statement Accompanying Notice Of Annual General Meeting 123

Proxy Form enclosed

CONTENTS

Annual Report 2013

244510-HPatimas Computers Berhad

(Incorporated in Malaysia)

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Annual Report 2013

CORPORATE INFORMATION BOARD OF DIRECTORS

Dato Bahari bin Haron Independent Non-Executive Chairman Appointed on 24 August 2012 Chai Ko Thing Independent Non-Executive Director Appointed on 16 October 2012 Wan Azmi bin Wan Abd Rahman Independent Non-Executive Director Appointed on 29 January 2013 Dato Seri Abdul Azim bin Mohd Zabidi Non-Independent Non-Executive Director Appointed on 1 March 2013 Ong Tee Kein Independent Non-Executive Director Appointed on 4 July 2013 Aziz Yazdani bin Ahmad Khalil Independent Non-Executive Director Resigned on 17 October 2012 Khairudin bin Ibrahim Independent Non-Executive Director Resigned on 23 January 2013 Dato Ng Back Heang Non-Independent Non-Executive Director Resigned on 1 April 2013 Law Siew Ngoh Non-Independent Non-Executive Director Resigned on 1 April 2013 Robert Daniel Tan Kim Leng Non-Independent Non-Executive Director Resigned on 1 April 2013 Abdul Ghaffur bin Ramli Independent Non-Executive Director Retired on 5 December 2012 Dato Yap Wee Hin Non-Independent Non-Executive Director Retired on 5 December 2012 Wong Ngai Peow Independent Non-Executive Director Appointed on 24 August 2012 Resigned on 12 October 2012 Hwang Seak Wai Independent Non-Executive Director Appointed on 24 August 2012 Resigned on 5 November 2012 Lim Kok Kiong Independent Non-Executive Director Appointed on 24 August 2012

Resigned on 5 March 2013 Sulaiman bin Masrum Independent Non-Executive Director Appointed on 29 January 2013

Resigned on 31 May 2013

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BOARD OF DIRECTORS (contd.)

YB Datuk Nur Jazlan bin Tan Sri Mohamed Non-Independent Non-Executive Director Appointed on 1 March 2013

Resigned on 18 April 2013 Hew Tze Kok Non-Independent Non-Executive Director Appointed on 26 March 2013

Resigned on 31 May 2013

PRINCIPAL OFFICER Jarnail Singh A/L Ram Singh Group Chief Executive Officer

AUDIT COMMITTEE

Wan Azmi bin Wan Abd Rahman Chairman Chai Ko Thing Member Ong Tee Kein Member

NOMINATION COMMITTEE

Dato Bahari bin Haron Chairman Chai Ko Thing Member Wan Azmi bin Wan Abd Rahman Member

REMUNERATION COMMITTEE

Dato Bahari bin Haron Chairman Chai Ko Thing Member Wan Azmi bin Wan Abd Rahman Member

COMPANY SECRETARIES

Tan Tong Lang (MAICSA 7045482) Chong Voon Wah (MAICSA 7055003) Jauhari bin Haron (LS03681)

REGISTERED OFFICE

Ground Floor, 8 Lorong Universiti B, Section 16, 46350 Petaling Jaya, Tel.No : 03-7956 5889 Selangor Darul Ehsan Fax.No.: 03-7958 7889

WEBSITE

www.patimas.com

BUSINESS ADDRESS Lot 4.1, 4th Floor, Menara Lien Hoe, No. 8, Persiaran Tropicana, Tropicana Golf & Country Resort, Tel.No : 03-7880 3961 47410 Petaling Jaya, Selangor Fax.No.: 03-7886 7391 Patimas Technology Centre, Technology Park Malaysia, Tel.No : 03-8994 1818 Bukit Jalil, 57000 Kuala Lumpur Fax.No.: 03-8994 2288

REGISTRAR

Boardroom Corporate Services (KL) Sdn Bhd Lot 6.05, Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Tel. No.:03-7720 1188 Selangor Darul Ehsan Fax. No.:03-7720 1111

AUDITORS

Hasnan THL Wong & Partners 10 Lorong Universiti B, Section 16, 46350 Petaling Jaya, Selangor Darul Ehsan

PRINCIPAL BANKERS

Malayan Banking Berhad RHB Bank Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad Stock Name PATIMAS Stock Code 7042

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CORPORATE STRUCTURE

Patimas Computers Berhad Patimas Computer Services Sdn. Bhd. Patimas Computer Systems Sdn. Bhd. Patimas Computer Technology Sdn. Bhd. Patimas Computer Software Sdn. Bhd. Patimas Computer Security Sdn. Bhd. Patimas Dot Com Sdn. Bhd. Patimas Business Solutions Sdn. Bhd. Patimas Outsourcing Services Sdn. Bhd. Patimas Services Sdn. Bhd. Patimas Education Centre Sdn. Bhd. Patimas International Sdn. Bhd. Patimas-HPD Systems Sdn. Bhd. Patimas e-Business Sdn. Bhd. OED Technology Sdn. Bhd. (65%) Patimas Workgroup Technology Sdn. Bhd. (60%) Sigma AIT Sdn. Bhd. (49%) Scion Global Sdn. Bhd. (45%) Dynotronic International Sdn. Bhd. (40%)

AsatAugust2013Unlessotherwisestated,100%owned

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BOARD OF DIRECTORS PROFILE Dato' Bahari bin Haron

Dato' Bahari bin Haron, a Malaysian aged 65, was appointed to the Board and assumed the role of the Independent Non-Executive Chairman of Patimas on 24 August 2012. Dato Bahari is a Barrister-at-law (Inner Temple, London) and was a Magistrate of Kuala Lumpur Court from 1973 to 1974. Dato' Bahari started his own legal practice in 1974 and was actively involved in UMNO Johor. In 1982, he was elected as a Member of Parliament for Labis, Johor. He was appointed as the State Exco Member in 1989 and held the portfolio of Chairman of the State Housing and Local Government Committee. He was also involved in various business activities in the retail, property, food and manufacturing industries. He was the Director of Bank Rakyat for five years and was the Vice Chairman of Kejora (Lembaga Kemajuan Johor Tenggara) for eight years. Dato Bahari is presently a partner of his legal firm, Messrs Bahari Hazzan & Fadzil. Dato Bahari has no family relationship with any other Directors or major shareholders of Patimas, no conflict of interest with Patimas and has no convictions for offences within the past 10 years. Chai Ko Thing Independent Non-Executive Director Mr. Chai Ko Thing, a Malaysian aged 42, was appointed to the Board of Patimas on 16 October 2012. Mr. Chai graduated with a Bachelor of Laws (LL.B) from the University of London and holds a Certificate in Legal Practice. He was called to the Malaysian Bar in 1996 and is currently a partner in a legal firm, a position he assumed since 1998. His area of practice is corporate and commercial matters including corporate transactions, banking and finance, joint ventures and advisory. He has no family relationship with any other Directors or major shareholders of Patimas, no conflict of interest with Patimas and has no convictions for offences within the past 10 years. Wan Azmi bin Wan Abd Rahman Independent Non-Executive Director Mr. Wan Azmi, a Malaysian aged 48, was appointed to the Board on 29 January 2013. He graduated in 1989 from The Association of Chartered Certified Accountants, United Kingdom and was admitted as an Associate Member and a Fellow Member of The Association of Chartered Certified Accountants, United Kingdom in 1997 and 2002 respectively. He is also a member of the Malaysian Institute of Accountants. Mr. Wan Azmi started his career as a System Accountant with a subsidiary of Majlis Amanah Rakyat MARA in 1989 before joining an investment back specializing in corporate finance advisory works between 1989 and 1994. He later assumed the position of a Project Manager for a private company providing corporate and financial advisory services. He subsequently joined Padiberas Nasional Berhad (now known as BERNAS) between 1996 and 2000; Permodalan Terengganu Berhad between 2000 to 2003 and MIMOS Berhad between 2003 to 2007, where he held top key positions in the respective organisations. Mr. Wan Azmi is currently the Managing Director of a private company involved in the rice industry. Mr. Wan Azmi has no family relationship with any other Directors or major shareholders of Patimas, no conflict of interest with Patimas and has no convictions for offences within the past 10 years.

Independent Non-Executive Director

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Dato Seri Abdul Azim bin Mohd. Zabidi Non-Independent Non-Executive Director Dato Seri Abdul Azim Bin Mohd. Zabidi, aged 54, a Malaysian, is a Non-Independent Non-Executive Director of the Company. He was appointed to the Board of the Company on 1 March 2013. Dato Seri is a Fellow of the Institute of Chartered Secretaries and Administrators, United Kingdom and holds a Master of Arts in Business Law from London Metropolitan University, United Kingdom. He was appointed Chairman of Bank Simpanan Nasional from July 1999 until June 2009. During his tenure at BSN, he was also active in the work undertaken by the World Savings Banks Institute (WSBI), Brussels, Belgium. In 2000, in recognition of this, he was appointed President (Asia Pacific) for WSBI and elevated to its Board of Directors in 2003. In September 2006 until April 2009, he was elected as Vice President and Treasurer of WSBI. Dato Seri Abdul Azims extensive involvement in unit trusts/mutual funds and fund management culminated in him being elected President of the Federation of Malaysian Unit Trust Managers in 1998 through 2003. During this period, he was appointed Member of the Steering Committee of the International Investment Funds Association (IIFA), Montreal, Canada, a post that he held until 2008. During the period from 2000 to 2004, Dato Seri Abdul Azim was selected by the Government to be a member of the National Economic Consultative Council II, where he served on the Islamic Banking and Finance Committee, selected by the Securities Commission to be a member of its Capital Market Advisory Council, selected by the Kuala Lumpur Stock Exchange (now known as Bursa Malaysia Securities Berhad) to be a member of its Index Committee and Deputy Chairman of its Board of Advisors for the Malaysian Central Depository. Dato Seri Abdul Azim is also a Director of Timberwell Berhad, Tadmax Resources Berhad, XOX Berhad, Wang-Zheng Berhad and several private limited companies. Dato Seri Abdul Azim has no family relationship with any other Directors or major shareholders of Patimas, no conflict of interest with Patimas and has no convictions for offences within the past 10 years. Ong Tee Kein Independent Non-Executive Director Mr. Ong Tee Kein a Malaysian aged 56, was appointed to the Board on 4 July 2013 as an Independent Non-Executive Director. He is a member of the Malaysian Institute of Accountants, Associate of The Institute of Chartered Secretaries and Administrators and holds a Master Degree in Business Administration. He has several years of experience in industry and consultancy practice. He sits on the boards of Mlabs Systems Berhad, Sanichi Technology Berhad, Advance Information Marketing Berhad and Biosis Group Berhad. He is also a director of several private limited companies. Mr Ong has no family relationship with any other Directors or major shareholders of Patimas, no conflict of interest with Patimas and has no convictions for offences within the past 10 years.

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PROFILE OF THE GROUP CHIEF EXECUTIVE OFFICER Jarnail Singh A/L Ram Singh Mr. Jarnail Singh A/L Ram Singh, a Malaysian aged 54, was appointed as the Acting Group Chief Executive Officer of Patimas on 15 August 2012 and subsequently re-designated as the Group CEO on 29 January 2013. He holds a Diploma in Computer Science and has more than 30 years experience in the ICT industry having worked in various areas from programming, systems analysis; to running various computer-based companies. He is a director of various private companies. For the last 13 years; his company, Sprintz Designs Sdn Bhd, has been a business partner of Patimas. From January 2008 to mid 2012, Mr Jarnail Singh headed and managed the telecommunications business division for the Patimas Group. As Head of the Telecommunications group, he grew the business to include amongst others, the supply and implementation of specialized equipment, software and services to the telecommunications industry in Malaysia and also worked closely with major Network Equipment Producers to supply solutions to the telecommunications industry in Malaysia, India, and South Africa. He has no family relationship with any other Directors or major shareholders of Patimas, no conflict of interest with Patimas, save for his interest as above and has no convictions for offences within the past 10 years.

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CHAIRMANS STATEMENT On behalf of the Board of Directors of Patimas Computers Berhad (Patimas or the Company) I present to you the Annual Report and the Audited Financial Statements of Patimas Group for the financial year ended 31 March 2013. Highlights The financial year ended 31 March 2013 was another challenging and trying year for the Patimas Group since the discovery of significant accounting and audit findings/queries (Significant Audit Findings) in the accounts of the Patimas Group which amongst others led to the delayed issuance of the of the previous financial periods audited financial statements. In light of the discovery of Significant Audit Findings, the Company has on 30 July 2012 appointed PKF Advisory Sdn Bhd firm to conduct a special audit into the affairs of the Company (special audit) on the basis of information and records that are made available by the Board of Directors and from the Management of the Company. The Company's shares were suspended from trading on 31 July 2012 as the Board of Directors announced to Bursa Malaysia Securities Berhad (Bursa) on the same date that the Company was not able to issue its annual audited financial statements for financial period ended 31 March 2012 within the four months from the close of the financial period.

Following discussions with Bursa, the Audit Committee was directed by Bursa to appoint an investigative auditor to conduct an investigative audit on the financial affairs of Patimas Group. On 29 March 2013 the Company announced that the report of the Investigative Audit by UHY Advisory (KL) Sdn Bhd has been completed and presented to the Board. The Company announced on 17 October 2012 that the former Chairman of the Company had lodged a police report in respect of unresolved significant accounting and audit findings and queries raised by Messrs Ernst & Young. Subsequently, the current Chairman of the Audit Committee also made a police report on 30 May 2013 based on the findings of the Investigative Audit Report. The financial and operational challenges faced by the Group, culminated with the Company being designated as an affected Practice Note 17 (PN17) by Bursa on 1 November 2012; the prescribed criteria of which was triggered by its negative net tangible assets position as well as the expressed disclaimer of opinion by the external auditors on the Companys audited financial statements for the financial period ended 31 March 2012. On 28 November 2012, pursuant to Practice Note 1 (PN1) the Company announced that its subsidiary, Patimas-HPD Systems Sdn. Bhd had received a legal letter of demand from Malaysia Debt Ventures Berhad (MDV) for the outstanding balance of a project financing facility. The Company also received a similar letter of demand as a guarantor in respect of the said facility. The Company is required to submit its regularization plan within twelve months of the first announcement i.e. by 31 October 2013. In this respect, the Board is working with the relevant consultants to propose a regularization plan, the details of which will be announced in due course. During the current financial year, the Company and three of its subsidiaries had sought and were granted restraining orders by the courts to restrain creditors from pursuing legal redress such as winding up proceeding or forced sale of assets while the Group is undergoing its regularization scheme.

Subsequently, on 10 August 2012, Messrs BDO Governance Advisory Sdn Bhd was appointed to conduct the aforesaid special audit. The Board has also removed the financial functions and authorities of the Executive Directors who shall no longer be responsible for the financial management of the Patimas Group. Further, in order to protect the interest of all stakeholders, the Board has on 15 August 2012 appointed Mr. Jarnail Singh A/L Ram Singh as the Acting Group Chief Executive Officer with the sole authority to oversee the day to day affairs of the Group and other operational matters.

Financial Performance The year under review was another challenging and trying year for the Group, wherein lack of working capital, liquidity in the Group and being designated as a PN17 and PN1 company caused a negative impact on the Groups overall financial performance. For the financial year ended 31 March 2013, the Group registered revenue of RM26.99 million. The Group incurred loss before taxation of RM36.39 million for the year attributed to impairment loss on software development expenditure of RM6.33 million; impairment loss on trade receivables of RM3.10 million; impairment loss on investment in associated companies of RM1.65 million; writing off of plant and equipment of RM4.30 million; and interest expenses of RM4.21 million. The Group incurred net losses of RM34.11 million during the financial year ended 31 March 2013 and as at that date, the accumulated losses of the Group was RM173.02 million. Prospects Patimas is facing a severe setback against its business performance. The Groups immediate main focus in the near term is on finalising the restructuring scheme for its borrowings with creditors and banks and in restructuring the Group to alleviate its business performance from the present financial condition. The Board is actively evaluating the prospects of the Group in light of the investigative audit, the PN17 and PN1 status of the Group and the stiff competition prevailing in both Malaysia and overseas ICT market. At this point in time, the Board is unable to comment on the prospects of the Group, save for the data centre business division and the telecommunication business division which, in the opinion of the Board, can still be profitable with proper and efficient management. The Board is mindful of the challenges facing the Group and is working diligently to improve its performance. Appreciation On behalf of the Board of Directors, I would like to express my sincere appreciation to our shareholders, customers, business associates, financiers, government authorities and regulatory bodies for their continuous support to the Group. I would also like to thank my fellow Board members, the management team and staff for their hard work, perseverance and commitment throughout the challenging year under review. Thank you. Dato Bahari bin Haron Independent Non-Executive Chairman

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STATEMENT OF CORPORATE GOVERNANCE The Board of Directors of Patimas acknowledges the importance of maintaining good corporate governance in the Group and is committed to ensure that the principles and best practices of corporate governance as set out in the Malaysian Code on Corporate Governance 2012 (Code) are adhered to. Set out below is a statement which outlines the main Corporate Governance principles and practices that were in place throughout the financial year ended 31 March 2013, unless otherwise stated. The Company announced the significant accounting and audit findings on 31 July 2012 and that it had become a PN17 company on 1 November 2012. On 28 November 2012, pursuant to Practice Note 1 (PN1) the Company announced that its subsidiary, Patimas-HPD Systems Sdn. Bhd had received a legal letter of demand from Malaysia Debt Ventures Berhad (MDV) for the outstanding balance of a project financing facility. The Company also received a similar letter of demand as a guarantor in respect of the said facility. THE BOARD OF DIRECTORS The Board The Board assumes responsibility for effective stewardship and control of the Company. The responsibilities of the Board include setting the strategic and succession plans of the Group, monitoring performance goals, formalizing documentation on matters specifically reserved for its decision and ensuring that the Group's internal controls and reporting procedures are adequate. The Board comprises members with a wide range of business, financial, technical and legal background. With this mix of expertise and background, the Company is led and guided by an experienced and competent Board of Directors. The profiles of the Board of Directors are provided in the Annual Report on pages 5 to 6. Meetings Board meetings are held at quarterly intervals and additional meetings are held whenever necessary. The Board deliberated and considered a variety of matters inclusive of financial results, operation performance and resolutions and recorded its deliberations in terms of issues discussed and the conclusion in discharging its duties and responsibilities. During the financial year ended 31 March 2013, 24 board meetings were held. The information on the attendance of the members is as follows:

Members Designation No of meetings

attended

Abdul Ghaffur bin Ramli Chairman (resigned from chairmanship on 24

August 2012)


(retired on 5 December 2012)

14/14

Dato Yap Wee Hin Executive Deputy Chairman, redesignated as

Non-Independent Non-Executive Director on

24 August 2012

(retired on 5 December 2012)

13/14


attended

Law Siew Ngoh

Managing Director, redesignated as Non-

Independent Non-Executive Director on 24

August 2012

(resigned on 1 April 2013)

23/24

Robert Daniel Tan Kim Leng Executive Director, redesignated as Non-


August 2012


22/24

Dato Ng Back Heang Executive Director, redesignated as Non-


August 2012


24/24

Khairudin bin Ibrahim


(resigned on 23 January 2013)

16/17

Aziz Yazdani bin Ahmad Khalil


(resigned on 17 October 2012)

9/12

Dato Bahari bin Haron Chairman,


(appointed on 24 August 2012)

14/14

Wong Ngai Peow


(appointed on 24 August 2012 & resigned on

12 October 2012)

4/4

Hwang Siak Wai



5 November 2012

2/3

Lim Kok Kiong Independent NonExecutive Director


5 March 2013

12/12

Chai Ko Thing Independent Non-Executive Director

(appointed on 16 October 2012)

11/12

Wan Azmi bin Wan Abd

Rahman


(appointed on 29 January 2013)

6/6




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attended

Sulaiman bin Masrum Independent Non-Executive Director

(appointed on 29 January 2013 & resigned on

31 May 2013)

6/6

Dato Seri Abdul Azim bin Mohd

Zabidi

Non-Independent Non-Executive Director

(appointed on 1 March 2013)

3/3

Datuk Nur Jazlan bin Mohamed Non-Independent Non-Executive Director

(appointed on 1 March 2013 & resigned on

18 April 2013)

2/3

Hew Tze Kok Non-Independent Non-Executive Director

(appointed on 26 March 2013 & resigned on

31 May 2013

1/1

Notes: Mr. Ong Tee Kein did not attend any of the Board meetings as the meetings were held prior to his appointment on 4 July 2013.

Board Composition and Balance Between 1 April 2012 and up to 24 August 2012, the Board comprised seven members, four of whom were Executive Directors while the other three were Independent Non-Executive Directors. Post 24 August 2012, the board re-designated the directorships of four executive directors to non-executive level, appointed several new directors, and saw several retirements and resignations of members. Since 24 August 2012, none of the board members hold executive positions. The composition of the Board of Directors throughout the financial year ended 31 March 2013 and to-date is as set out in the Corporate Information section of this Annual Report. The current composition of the Board consists of five members comprising an Independent Non-Executive Chairman, three Independent Non-Executive Directors and a Non-Independent Non-Executive Director. The number of independent non-executive directors exceeds the minimum threshold prescribed by the Code and the Bursa Securities Listing Requirements. The Board is of the opinion that the composition of the Board aims to ensure that the interest of not only the Group, but also the stakeholders and the public in general are represented in all business strategies formulation and adoption.




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There is a clear division of roles of the then Chairman and the then Managing Director (from 1 April 2012 to 24 August 2012), with each having his respective scope and responsibilities to ensure a balance of power and authority. The Chairman is responsible for ensuring the Boards effectiveness and orderly conduct. The Managing Director is responsible for the implementation of Board policies, making operational decisions and monitoring the day-to-day running of the business. The then Executive Directors take on the primary responsibilities of managing and monitoring the Groups businesses, allocation of resources and enhancement of controls and governance. The Independent Non-Executive Directors are to deliberate and discuss policies and strategies formulated and proposed by the management with the view of the long-term interests of all stakeholders. The presence of the Independent Non-Executive Directors is essential as they provide unbiased and independent views, advice and judgment as well as to safeguard the interest of other parties such as the minority shareholders and other stakeholders.

Dato Bahari bin Haron has been appointed as the Senior Independent Non-Executive Director to whom any concerns relating to the Company may be conveyed. Board Committees The Board has established various committees to assist the Board in managing the Groups businesses effectively. Each committee has its own terms of reference to govern its responsibilities and to report and propose recommendations to the Board. These committees are:

Audit Committee (The primary responsibilities, terms of reference and activities of the Audit Committee during the financial year ended 31 March 2013 are set out in the Audit Committee Report)

Remuneration Committee; and Nomination Committee.

The chairman of the various committees will report to the Board the outcome and recommendations of the committee meetings and such reports are incorporated in the minutes of the Board meetings.

Supply of Information The Directors have full and unrestricted access to all information pertaining to the Groups business and affairs, both as a full Board and in their individual capacity. They are supplied with information on financial, operational, corporate, regulatory, business developments, and audit matters for informed decision-making and effective discharge of their responsibilities. They also have access to the advice and services of the Company Secretary who ensures that Board procedures are adhered to at all times during meetings and advises the Board on matters including corporate governance issues, and Directors responsibilities in complying with relevant legislation and regulations. The Directors may, if necessary, obtain independent professional advice, at the Companys expense in furtherance of their duties.




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In the absence of the executive directors functions, post 24 August 2012, the Board of Directors has taken over the responsibilities of setting policies and decisions of the Patimas Group and has also appointed a Group Chief Executive Officer, Jarnail Singh A/L Ram Singh to carry out the implementation of business strategies and daily management and operations of the Group.




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Appointments to the Board

Nomination Committee The Nomination Committee is responsible for reviewing the Board structure, size and composition and making recommendations to the Board for any adjustments that are deemed necessary. The Committee is also responsible in making annual assessment on the mix of skills, experience and effectiveness of the Board and the committees of the Board. The present members of the Nomination Committee are as follows:

Position Dato Bahari bin Haron Chairman Chai Ko Thing Member Wan Azmi bin Wan Abd Rahman Member During the financial year ended 31 March 2013 the committee met five times with all members present. The Nomination Committee during the year reviewed and assessed the mix of skills and experience and size of the Board, contribution of each director and effectiveness of the Board and Board Committees and also reviewed the retirement of directors by rotation eligible for re-election. The Nomination Committee has also assessed the character, experience and competence of the Board and Senior Management.

Re-election The procedure on re-election of directors by rotation is set out in Articles No. 86.1 and 93 of the Companys Articles of Association (the Articles). Pursuant to the Articles, any Directors who are appointed by the Board during the year are subject to re-election by shareholders at the first meeting after their appointment. The Articles also provide all Directors shall submit themselves for re-election at least once in every three years. Any Directors over seventy (70) years of age are subject for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.

Reinforce Independence The Non-Executive Directors are not employees of the Group and do not participate in the day to day management of the Group. The Non-Executive Directors, including the Chairman are independent directors and are able to express their views without any constraint. The Nomination Committee has reviewed the performance of the independent directors and is satisfied they have been able to discharge their responsibilities in an independent manner. None of the current independent board members had served the company for more than nine (9) years as per the recommendations of the Code. Should the tenure of an independent director exceed nine (9) years, shareholders approval will be sought at a General Meeting or if the services of the director concerned are still required, the director concerned will be re-designated as a non-independent director.

During the financial year ended 31 March 2013, the Directors were also advised of developments or changes to relevant laws and regulatory requirements. Management briefings during Board and Audit Committee meetings on various operational, technical and corporate matters were also aimed at ensuring that Directors are well versed with the knowledge of the Groups business and affairs in enabling them to make meaningful decisions. The Board will continue to evaluate and determine the training needs to keep abreast with developments and changes in the regulations and the business environment relevant to the industry and to further enhance their skills and knowledge.

Directors Training All Directors namely Abdul Ghaffur bin Ramli, Dato Yap Wee Hin, Law Siew Ngoh, Dato Ng Back Heang, Robert Daniel Tan Kim Leng, Aziz Yazdani bin Ahmad Khalil, Khairudin bin Ibrahim, Dato Bahari bin Haron, Lim Kok Kiong, Chai Ko Thing, Wan Azmi bin Wan Abd Rahman, Dato Seri Abdul Azim bin Mohd Zabidi, Datuk Nur Jazlan bin Mohamed, Sulaiman bin Masrum have completed their Mandatory Accreditation Programme prescribed by Bursa Securities during the financial year ended 31 March 2013.




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Remuneration Committee The Remuneration Committee is responsible to review and recommend to the Board the remuneration package of the Board and senior management. The remuneration package of the Executive Directors is based on the Groups financials and the individuals performance. The present members of the Remuneration Committee are as follows:

Position Dato Bahari bin Haron Chairman Chai Ko Thing Member Wan Azmi bin Wan Abd Rahman Member During the financial year ended 31 March 2013 the committee met six times with all members present. The Remuneration Committee shall ensure that the levels of remuneration are sufficient to attract and retain Directors to successfully manage the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the then Executive Directors and in respect of Non-Executive Directors, the level of remuneration shall reflect their respective levels of experience, expertise and responsibilities. However, the ultimate responsibility to approve the remuneration of the Directors remains with the Board as a whole. The respective Director is not involved in any discussions and/or deliberations with regards to his own remuneration. Disclosure The Company has complied with the Main Market Listing Requirements of Bursa Securities on the disclosure of Directors' remuneration in its audited financial statements as set out in Note 31 of the Notes to the Financial Statements. SHAREHOLDERS AND INVESTORS The Board recognises the importance of good communication with all shareholders and endeavours to provide timely and accurate disclosure of all material information of the Group to the shareholders and investors. Shareholders and investors are kept informed of all major developments within the Group by way of announcements to Bursa Securities, the Company's Annual Reports and website with an overview of the Group's financial and operational performance. The Annual General Meeting (AGM) is the principal forum for dialogue with shareholders to inform shareholders and investors of current developments. Notice of the AGM and the Annual Report are sent out to shareholders at least 21 days before the date of the meeting. Shareholders are encouraged to raise questions or to seek more information on the progress and performance of the Group. Where Extraordinary General Meetings (EGM) are held to obtain shareholders approval on certain businesses or corporate proposals, comprehensive circulars to shareholders would be sent within prescribed deadlines in accordance with regulatory and statutory provisions. During the AGM and EGM, the Chairman and Board members as well as the auditors of the Company are available to respond to all shareholders queries. Shareholders and members of the public are invited to access the Companys website at www.patimas.com and the Bursa Securities website to obtain the latest information on the Group.

ACCOUNTABILITY AND AUDIT Financial Reporting In presenting the annual audited financial statements and the quarterly financial results, the Directors aim to ensure that the financial statements and quarterly announcements are prepared in accordance with the Companies Act, 1965 and applicable approved accounting standards are adopted, so as to offer a balanced and comprehensive assessment of the Groups financial position and prospects.




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Directors Responsibility Statement The Board of Directors is responsible in ensuring that the financial statements of the Group and Company are drawn up in accordance with the applicable approved accounting standards set by the Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 March 2013 and of the results and cash flows of the Group and the Company for the financial year ended on that date. In the process of preparing the financial statements, and other than as disclosed in the notes to the financial statements, the Directors have reviewed the accounting policies and practices. However, due to the circumstances that have been brought to the attention of the Board after the financial year ended 31 March 2012, the Directors are not in a position to determine whether the accounting policies and practices were consistently applied throughout the year, and in cases where judgment and estimates were made, whether they were reasonable and prudent. Risk Management and Internal Control The Statement on Risk Management and Internal Control in pages 24 to 25 of the Annual Report sets out an overview of the state of internal control within the Group. Relationship with the Auditors The Company maintains a transparent relationship with the auditors in seeking their professional advice and towards ensuring compliance with the accounting standards. The external auditors met with the Audit Committee to present the scope of the financial audit before the commencement of audit and review the results of the said audit as well as the management letter, if any after the conclusion of the audit. Annual appointment or re-appointment of the external auditors is via shareholders resolution at the AGM at the recommendation of the Board. Statement of Compliance In the opinion of the Board, the Company has complied with and shall remain committed to attaining the highest possible standards through the continuous adoption of the principles and best practices of the Code and all other applicable laws.




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OTHER INFORMATION Utilisation of Proceeds Raised from Corporate Proposals During the financial year ended 31 March 2013 the Company implemented a private placement of up to ten percent (10%) of the issued and paid-up share capital (excluding treasury shares, if any) of the Company ("Private Placement"). The Company issued 75,000,000 new ordinary shares of RM0.10 each at an issue price of RM0.10 per share (Placement Shares) on 24 July 2012. The 75,000,000 Placement Shares have been listed and quoted on the Main Market of Bursa Malaysia Securities Berhad on Thursday, 26 July 2012. Details of the breakdown of utilisation of proceeds raised from the Private Placement are as follows: Purposes Proposed

(RM'000)Actual

(RM'000)Intended utilisation

period Working capital

Wages and salaries and other statutory payments

5,217 5,217 Within one (1) year

Utilities 1,290 1,290 Within one (1) year Rental expenses 900 900 Within one (1) year

Defraying expenses in relation to the Private Placement

93 93 Upon completion of the Private Placement

7,500 7,500 The proceeds were fully utilised by 25 February 2013. Share Buy-back The Company does not have a share buy-back programme in place. On 31 January 2013, the Company resold its entire treasury shares of 6.1 million shares of 10 sen each in the open market at 12.5 sen per share. The Company does not hold any treasury shares subsequent to the resale on the said date. Options, Warrants & Convertible Securities There were no exercises of options, warrants or convertible securities during the financial year ended 31 March 2013. Sanctions and / or Penalties There were no sanctions or penalties imposed on the Company and its subsidiary companies, Directors or management by the relevant regulatory bodies during the financial year ended 31 March 2013. Non Audit Fees to External Auditors There were no non-audit fees paid to external auditors by the Group for the financial year ended 31 March 2013. Depository Receipt Programmes The Company did not sponsor depository receipt programme during the financial year ended 31 March 2013.

Profit Guarantee There was no profit guarantee given by the Company during the financial year ended 31 March 2013. Variation of Results The annual audited financial statements of the Company/Group for the financial year ended 31 March 2013 did not vary by 10% or more from the unaudited financial results announced to Bursa Malaysia Securities Berhad on 31 May 2013. Material Contracts involving Directors and major shareholders There were no material contracts entered into by the Company and its subsidiary companies involving Directors and major shareholders interests either still subsisting at the end of the financial year ended 31 March 2013 or entered into since the end of the previous financial period. Recurrent related party transactions of revenue nature The details of recurrent related party transactions of revenue nature during the financial year ended 31 March 2013 are as disclosed in Note 32 of the financial statements. Contracts relating to loans There were no contracts relating to loans by the Company involving Directors and major shareholders interests during the financial year ended 31 March 2013. Corporate Social Responsibility (CSR) Statement Due to the Companys Practice Note 17 status and taking into account the current level of activities, focus is placed on the restructuring scheme. Further as the Companys expenses are kept to the minimal, it did not undertake any CSR activities in the financial year ended 31 March 2013.




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REPORT OF THE AUDIT COMMITTEE Set out below is the Report of the Audit Committee for the financial year ended 31 March 2013. Composition The composition of the Audit Committee from 1 April 2012 to 24 August 2012 was follows:

Position

Khairudin bin Ibrahim Chairman Abdul Ghaffur bin Ramli Member Aziz Yazdani bin Ahmad Khalil Member The above Audit Committee members resigned from their posts on 24 August 2012 and subsequently the following members were appointed:

Position Lim Kok Kiong Chairman (24 August 2012 to 5 March 2013) Dato Bahari bin Haron Member (24 August 2012 to 29 January 2013) Wong Ngai Peow Member (24 August 2012 to 12 October 2012) Chai Ko Thing Member (appointed on 16 October 2012) Wan Azmi bin Wan Abd Rahman Member (appointed on 29 January 2013) Chairman (redesignated on 14 March 2013) Sulaiman bin Masrum Member (14 March 2013 to 31 May 2013) Ong Tee Kein Member (appointed on 29 July 2013) Secretary The Company Secretary of Patimas acts as the Secretary to the Audit Committee. Meetings The Audit Committee met 15 times during the financial year ended 31 March 2013. All meetings to review the quarterly results and annual financial statements are held prior to such quarterly results and annual financial statements being presented to the Board for approval. After each Audit Committee meeting, the Audit Committee reported to and updated the Board on significant issues and concerns discussed during the Audit Committee meetings and where appropriate, made the necessary recommendations to the Board.




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The information on the attendance of the members during the financial year ended 31 March 2013 is as follows:

Members No of meetings attended

Attendance

Khairudin bin Ibrahim 5/5 100%

Abdul Ghaffur bin Ramli 5/5 100%

Aziz Yazdani bin Ahmad Khalil 4/5 80%

Lim Kok Kiong 7/7 100%

Dato Bahari bin Haron 6/6 100%

Wong Ngai Peow 3/3 100%

Chai Ko Thing 6/6 100%

Wan Azmi bin Wan Abd Rahman 4/4 100%

Sulaiman bin Masrum 3/3 100%

Summary of Activities during the Financial Year ended 31 March 2013 The Audit Committee carried out the following activities during the financial year ended 31 March 2013:

Reviewed the unaudited quarterly reports on the consolidated results of the Patimas Group for the quarters ended 31 March 2012, 30 June 2012, 30 September 2012 and 31 December 2012;

Reviewed the annual audited financial statements, external auditors reports and their audit findings;

Reviewed and deliberated on the internal auditors audit findings and recommendations; Conducted meetings with the external auditors without the presence of the Executive Directors

and employees of the Company; Deliberated on the Special Audit Report by BDO Governance Advisory Sdn Bhd and made

recommendations to the Board; Deliberated on the Investigative Audit Report by UHY Advisory (KL) Sdn Bhd and made

recommendations to the Board; Reviewed with the external auditor and discussed the overall annual audit plan, nature and scope

of the audit and the significant changes in accounting and auditing issues; Reviewed and deliberated the significant risk areas, internal control and financial matters coming

to the attention of the external auditor in the course of their work; Reviewed and approved the annual internal audit plan of the Group including its audit strategy,

scope, functions, competency, resource requirements and the necessary authority to carry out its work.

Internal Audit Function The Internal Audit function is outsourced to an internal auditing firm. As normally carried out in the previous years, the activities of the Internal Audit Function during the financial year would have covered the following activities:

(a) developed the internal audit plan for financial year ended 31 March 2013; (b) execution of the approved internal audit plan; (c) presentation of the internal audit findings at the quarterly Audit Committee meetings; and (d) follow up reviews to ensure that action plans are properly and appropriately implemented by

Management. Only item (a) above was carried out and presented to the board on 29 May 2012 whilst the rest of the items (b) to (d) were put in abeyance due to the circumstances that have been brought to the attention of the Board after the financial year ended 31 March 2012 which require a far more pressing attention by the Board and the management. The costs incurred for the internal audit function in respect of the financial year under review was approximately RM17,120. The terms of reference of the Audit Committee are set out below: TERMS OF REFERENCE OF THE AUDIT COMMITTEE 1. Objectives

The Audit Committee shall assist the Board of Directors (Board) of Patimas in: i) overseeing the financial reporting and complying with the applicable Financial Reporting

standards, the provisions of the Companies Act 1965 and disclosure requirements administered by relevant accounting bodies, Bursa Malaysia Securities Berhad (Bursa Securities), Companies Commission of Malaysia and any other laws and regulations as amended from time to time; and

ii) assessing the internal and external audit processes including issues pertaining to the

system of internal control and risk management within the Group. 2. Composition

The Audit Committee is to be appointed by the Board from among themselves as follows: i) a minimum of three (3) members none of whom shall be Executive; ii) a majority shall be Independent Non-Executive Directors; iii) all members must be financially literate and at least one (1) member must be a member of

Malaysian Institute of Accountants or a person who fulfils the requirements prescribed or approved by Bursa Securities;

iv) all members shall hold office only for so long as they serve as directors of the Company; v) no alternate director shall be appointed as a member;




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vi) in any event of any vacancies resulting in non compliance of the minimum of three (3) members, the Board shall upon the recommendation of the Nomination Committee, appoint such number of directors to fulfill such vacancy within three (3) months of the event;

vii) the term of office and performance of the Committee shall be reviewed by the Board at

least once in every three (3) years to determine whether the Committee and its members have carried out their duties in accordance with their terms of reference.

3. Duties and functions

In discharging its duties, the Committee shall undertake the following: i) consider the appointment of the external auditor, the audit fee and any questions of

resignation or dismissal for recommendation to the Board; ii) review with the external auditor before the audit commences, the audit plan, areas and

scope of the audit and ensure co-ordination where more than one audit firm is involved; iii) review with the external auditor, their evaluation of the system of internal controls and

audit findings; iv) review the quarterly and year-end financial statements of the Company and Group and

thereafter recommend them to the Board for approval, focusing particularly on:- any changes in accounting policies and practices; significant adjustments arising from the audit; the going concern assumption; compliance with the applicable Financial Reporting Standards and other legal

requirements; significant and unusual events;

v) review and report the assistance given by the Company's or Group's officers to the external auditors and the overall conduct of the audit;

vi) review the audit report with the external auditors; vii) discuss problems and reservations arising from the interim and final audits and any

matter the auditor may wish to discuss (in the absence of management where necessary);

viii) review the external auditor's management letter and management's response; ix) appoint internal auditors who will report functionally directly to the Audit Committee and

review their performance on an annual basis. The Internal Audit function shall be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control, and governance processes within the Company;

x) review the following of the internal audit function:

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

ensure the internal audit function is independent of the activities it audits;




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the internal audit programme and results of the internal audit process and where necessary, ensure that appropriate action is taken by management on the recommendations of the internal audit function;

xi) consider any related party transactions that may arise within the Company or Group; xii) consider the major findings of internal investigations and management's response; xiii) consider other areas as defined by the Board. The Chairman of the Committee shall engage on a continuous basis with Senior Management, such as the Chairman of the Board of Directors, Group Chief Executive Officer, Chief Financial Officer, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Group.

4. Meeting Procedures and Quorum

i) The Audit Committee shall meet at least four times a year and such additional meetings, as the Chairman shall decide in order to fulfill its duties.

ii) At least twice annually, the Audit Committee shall meet with the external auditor, internal

auditors or both without executive Board members and employees present. iii) The Chairman may call a meeting of the Audit Committee if a request is made by any

committee member, the Company's Group Chief Executive Officer, or the internal or external auditors.

iv) The Company Secretary or other appropriate senior official shall act as secretary of the

Audit Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatory documentation to committee members prior to each meeting.

v) The Secretary shall also be responsible for keeping the minutes of Audit Committee and

circulating them to committee members and to the other members of the Board of Directors.

vi) A quorum shall consist of a majority of independent committee members.

5. Authority

i) The Audit Committee is authorised by the Board to review any activity of the Company and of the Group within its Terms of Reference. It is authorised to seek any information it requires from any director or member of management and all employees are directed to co-operate with any request made by the Audit Committee.

ii) The Audit Committee is authorised by the Board to obtain independent legal or other

professional advice if it considers necessary.




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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL The Statement on Risk Management and Internal Control is made in accordance with Paragraph 15.26 (b) of the Bursa Securities Listing Requirements which requires directors of public listed companies to include a statement on their risk management and internal controls in their annual reports. The Boards Statement on Risk Management and Internal Control has been prepared in accordance with the provisions of the Malaysia Code on Corporate Governance 2012. Responsibility The Board recognises that it is responsible for the Group's system of risk management and internal control and for reviewing its effectiveness whilst the role of management is to implement Board policies on risk management and control. The Board is committed to effective risk management practices, as it understands that such practices are essential in the maintenance of a sound system of internal control. However, in any system of internal controls, there are inherent limitations that may impede the achievement of the Groups business objectives. Therefore the system of internal control can only provide reasonable assurance and not absolute assurance against any material misstatement, losses or fraud. The Board has received assurance from the Group Chief Executive Officer that the Groups 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 Framework Throughout the financial year ended 31 March 2013, the Board had identified, evaluated and managed the significant risks faced by the Group by monitoring the Group's operations, performance and profitability during Board meetings. This serves as the on-going process of identifying, assessing and managing risks faced by the Group The key risk profile is an on-going process to ensure a more coordinated and consistent approach in managing the Groups significant risk exposures and that such process is subject to regular reviews by the Board of Directors. Key elements of internal control The following are key elements of the Groups internal control systems: Defined delegation of responsibilities and authorities in the forms of organization structure,

authority limit and approval procedures. Independent review of internal control system by outsourced internal auditor with proposed

recommendations for further improvements. Regular reporting to Audit Committee on audit findings, recommendations and progress of the

proposed recommendations or implementations.

Quarterly review of the performance of the Groups business by the Board which also covers assessment of the impact of changes in business and competitive environment.

Regular Management meetings attended by heads of subsidiaries and senior management and chaired by the Group CEO to identify; discuss and resolve business and operational issues, the day-to-day operations and conduct of the Group's businesses.




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Internal Audit Function The outsourced internal audit functions support the Board in an independent capacity to examine and evaluate the Companys business and operational processes, assess compliance with policies and procedures as well as relevant laws and regulations, and provide a reasonable assurance that the internal control system is adequate, effective and functional. The Internal Auditors provide reports on issues relating to internal controls and the associated risks together with recommendations for appropriate actions to the Audit Committee. The external auditors provide assurance in the form of their annual statutory audit of the financial statements of the Group. Any areas for improvement identified during the course of the statutory audit by the external auditors are brought to the attention of the Audit Committee through management letters, if any or are articulated at Audit Committee meetings. In addition, the Audit Committee receives reports from the internal auditor on a regular basis. As required by Bursa Securities Listing Requirements, the External Auditors, Messrs Hasnan THL Wong & Partners have reviewed this Statement on Risk Management and Internal Control. The External Auditors review scope does not extend to the adequacy and effectiveness of the internal control. The Board is of the view that there would be a need to review the effectiveness of the internal audit function to ensure that appropriate action is taken to enhance and strengthen the internal control environment. For this purpose, the Board intends to review in detail the functional capabilities and/or effectiveness of the existing internal auditor and to carry out detailed review of prevailing internal controls. The Board recognises that the Group operates in a dynamic business environment and that the Group's risk management and internal control system must be responsive to changes in the business environment and continuously evolves to support its business objectives. The Board remains committed towards continuous improvement and enhancement of its system of risk management and internal control and will, when necessary, put in place action plans to ensure that there is increased certainty of the achievement of business objectives, thus enhancing shareholders value. This statement made in accordance with the resolution of the Board dated 28 August 2013.




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REVISED DRAFT 27.04.12

PATIMAS COMPUTERS BERHAD


REPORTS AND FINANCIAL STATEMENTS

31 MARCH 2013




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BOARD OF Dato' Bahari Bin Haron (Appointed on 24.08.12)

DIRECTORS Chai Ko Thing (Appointed on 16.10.12)

Wan Azmi Bin Wan Abd Rahman (Appointed on 29.01.13)

Dato' Seri Abdul Azim Bin Mohd Zabidi (Appointed on 01.03.13)

Ong Tee Kein (Appointed on 04.07.13)

Aziz Yazdani Bin Ahmad Khalil (Resigned on 17.10.12)

Khairudin Bin Ibrahim (Resigned on 23.01.13)

Dato' Ng Back Heang (Resigned on 01.04.13)

Law Siew Ngoh (Resigned on 01.04.13)

Robert Daniel Tan Kim Leng (Resigned on 01.04.13)

Abdul Ghaffur Bin Ramli (Retired on 05.12.12)

Dato' Yap Wee Hin (Retired on 05.12.12)

Wong Ngai Peow (Appointed on 24.08.12 and resigned on

12.10.12)

Hwang Seak Wai (Appointed on 24.08.12 and resigned on

05.11.12)

Lim Kok Kiong (Appointed on 24.08.12 and resigned on

05.03.13)

Sulaiman Bin Masrum (Appointed on 29.01.13 and resigned on

31.05.13)

Datuk Nur Jazlan Bin Mohamed (Appointed on 01.03.1 and

resigned on 18.04.13)

Hew Tze Kok (Appointed on 26.03.13 and resigned on 31.05.13)

SECRETARIES Jauhari Bin Hassan (Appointed on 15.01.13)

Chong Voon Wah (Appointed on 29.01.13)

Tan Tong Lang (Appointed on 29.01.13)

Tai Yit Chan (Resigned on 11.01.13)

Liew Irene (Resigned on 11.01.13)

CORPORATE INFORMATION






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3


AUDITORS Hasnan THL Wong & Partners (No. AF 0942)

Chartered Accountants

10, Lorong Universiti B

Section 16, 46350 Petaling Jaya

Selangor Darul Ehsan

REGISTERED OFFICE Ground Floor

8, Lorong Universiti B

Section 16

46350 Petaling Jaya


PRINCIPAL PLACES Patimas Technology Centre

OF BUSINESS Technology Park Malaysia

Bukit Jalil

57000 Kuala Lumpur

Lot 4.1, 4th Floor, Menara Lien Hoe

No. 8, Persiaran Tropicana

Tropicana Golf & Country Resort

47410 Petaling Jaya


PRINCIPAL BANKERS Bank Islam Malaysia Berhad

CIMB Bank Berhad

Hong Leong Bank Berhad

Malayan Banking Berhad

RHB Bank Berhad



CORPORATE INFORMATION (CONT'D)




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PRINCIPAL ACTIVITIES

FINANCIAL RESULTS

Loss before taxation

Taxation

Net loss for the year

Attributable to:

Owners of the parent

DIVIDENDS

The Directors do not recommend any dividend for the year ended 31 March 2013.



DIRECTORS' REPORT

RM

Group

(34,113)

(29,232) (34,267)

The principal activities of the Company are investment holding, provision of management services

and provision of computer equipment rental.

(253)

No dividend has been paid or declared by the Company since the end of the previous financial

period.

Company

The Directors hereby submit their report together with the audited financial statements of the

Group and the Company for the financial year ended 31 March 2013.

The principal activities of the subsidiary and associate companies are described in Note 7 and Note

21 of the Notes to the Financial Statements respectively.

(29,232)

2,273

(28,979) (36,386)

There have been no significant changes in the nature of these activities during the financial year.

RM




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RESERVES AND PROVISIONS

ISSUE OF SHARES AND/OR DEBENTURES

No debentures were issued during the financial year.

TREASURY SHARES

INFORMATION ON THE FINANCIAL STATEMENTS

(a)

(b)

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

(a)

to ensure that any current assets which were unlikely to realise in the ordinary course of

business including their value as shown in the accounting records of the Group and the

Company have been written down to an amount which they might be expected so to realise.

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

existing ordinary shares of the Company.

During the financial year, the Company disposed its entire treasury shares of 6,100,000 shares at

RM 0.125 each for cash consideration.

to ascertain that proper action had been taken in relation to the writing off of bad debts and

the making of allowance for doubtful debts and satisfied themselves that all known bad debts

has been written off and that adequate allowance had been made for doubtful debts; and

During the financial year, the Company increased its issued and paid-up share capital from RM

75,789,578 to RM 83,289,578 by way of issuance of 75,000,000 ordinary shares of RM 0.10 each

for cash consideration.

There were no material transfers to or from reserves and provisions during the financial year other

than those disclosed in the statements of changes in equity.

Before the Statements of Comprehensive Income and Statements of Financial Position of the

Group and the Company were made out, the Directors took reasonable steps :-

which would render the amount written off for bad debts or the amount of the allowance for

doubtful debts in the financial statements of the Group and the Company inadequate to any

substantial extent; or




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INFORMATION ON THE FINANCIAL STATEMENTS (CONT'D)

(b)

(c)

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

(a)

(b)

OTHER STATUTORY INFORMATION

The Directors state that :-

In their opinion:-

(a)

(b)

which have arisen which render adherence to the existing method of valuation of assets or

liabilities of the Group and the Company misleading or inappropriate.

which would render the values attributed to the current assets in the financial statements of

the Group and the Company misleading; or

any charge on the assets of the Group and the Company which has arisen since the end of the

financial year which secures the liability of any other person; or

the results of the operations of the Group and the Company during the financial year were

not substantially affected by any item, transaction or event of a material and unusual nature

other than as disclosed in Note 38 of the Notes to the Financial Statements; and

No contingent or other liability has become enforceable or is likely to become enforceable within

the period of twelve months after the end of the financial year which, in the opinion of the

Directors, will or may substantially affect the ability of the Group and the Company to meet its

obligations as and when they fall due.

any contingent liability of the Group and the Company which has arisen since the end of the

financial year.

there has not arisen in the interval between the end of the financial year and the date of this

report any item, transaction or event of a material and unusual nature likely to affect

substantially the results of the operations of the Group and the Company for the financial

year in which this report is made.

At the date of this report, they are not aware of any circumstances not otherwise dealt with in this

report or the financial statements which would render any amount stated in the financial statements

misleading.




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DIRECTORS

Dato' Bahari Bin Haron (Appointed on 24.08.12)

Chai Ko Thing (Appointed on 16.10.12)

Wan Azmi Bin Wan Abd Rahman (Appointed on 29.01.13)

Dato' Seri Abdul Azim Bin Mohd Zabidi (Appointed on 01.03.13)

Ong Tee Kein (Appointed on 04.07.13)

Aziz Yazdani Bin Ahmad Khalil (Resigned on 17.10.12)

Khairudin Bin Ibrahim (Resigned on 23.01.13)

Dato' Ng Back Heang (Resigned on 01.04.13)

Law Siew Ngoh (Resigned on 01.04.13)

Robert Daniel Tan Kim Leng (Resigned on 01.04.13)

Abdul Ghaffur Bin Ramli (Retired on 05.12.12)

Dato' Yap Wee Hin (Retired on 05.12.12)

Wong Ngai Peow (Appointed on 24.08.12 and resigned on 12.10.12)

Hwang Seak Wai (Appointed on 24.08.12 and resigned on 05.11.12)

Lim Kok Kiong (Appointed on 24.08.12 and resigned on 05.03.13)

Sulaiman Bin Masrum (Appointed on 29.01.13 and resigned on 31.05.13)

Datuk Nur Jazlan Bin Mohamed (Appointed on 01.03.1 and resigned on 18.04.13)

Hew Tze Kok (Appointed on 26.03.13 and resigned on 31.05.13)

Interest in the Company Bought

Law Siew Ngoh - direct -

Dato' Ng Back Heang# - direct -

- indirect 2,787,300

Robert Daniel Tan Kim - direct -

Leng* - indirect -

Dato' Seri Abdul Azim - indirect 55,000,000

bin Mohd Zabidi^

#

*

^

53,823,630 30

31.03.13

The Directors who have held office during the year since the date of the last report are as follows:-

Sold

In accordance with Article 104 of the Company's Articles of Association, Wan Azmi Bin Wan Abd

Rahman, Dato' Seri Abdul Azim Bin Mohd Zabidi and Ong Tee Kein, shall retire by rotation at the

forthcoming Annual General Meeting and being eligible, offer themselves for re-election.

According to the Register of Directors' Shareholdings, particulars of interests of Directors in office at

the end of the financial year in shares, warrants and options over shares in the Company and its related

corporations are as follows:-

At

01.04.12

At

No. of Ordinary Shares of RM 0.10 each

45,940

55,000,000

73,160 (41,900,000)

(53,823,600)

41,973,160

162,640,010 (162,640,000) 10

Deemed interest through his shareholdings in Forum Pintar Sdn. Bhd.

- -

Deemed interest through his shareholdings in Syawaras Sdn. Bhd.

- - 2,787,300

Deemed interest through Heng Cheow Wah

- (45,940)




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3


DIRECTORS' BENEFITS

GOING CONCERN

On 28 November 2012, the Company made an announcement pursuant to Practice Note 1 of

the Listing Requirements of Bursa Malaysia Securities Berhad for Main Market that Patimas-

HPD Systems Sdn. Bhd. ("PHPD"), its wholly owned subsidiary had received a legal letter of

demand from Malaysia Debt Venture Berhad ("MDV") for the outstanding balance of RM

4,340,988 in connection with the credit facilities granted for a project financing facility

totalling RM 14 million. The Company also received a similar legal letter of demand as a

guarantor in respect of the said facility. Both the Company and PHPD are currently in

communication with MDV and exploring various options to regularise the default. No

Solvency Declaration by the Board of Directors is being submitted to Bursa Malaysia

Securities Berhad within 3 market days from the date of announcement.

These conditions indicate the existence of a material uncertainty which may cast significant

doubt on the ability of the Group and Company to continue as going concerns.

The financial statements of the Group and Company have been prepared on a going concern

basis. The Group and Company incurred net losses of RM 34,267,000 and RM 29,232,000

respectively during the financial year ended 31 March 2013 and as at that date, the accumulated

losses of the Group and Company was RM 173,022,000 and RM 138,628,000 respectively.

The financial statements of the Group and Company do not include any adjustments relating to

the amounts and reclassification of assets and liabilities that might be necessary should the

Group and Company be unable to continue as going concerns. The ability of the Group and

Company to continue as going concerns are dependent on the timely and successful

implementation of the corporate and debts restructuring exercise towards the profitability and

the cash flows of the Group and Company.

Since the end of the previous financial period, no Director has received or become entitled to

receive any benefit (other than as disclosed in the Notes to the Financial Statements) by reason of a

contract made by the Company or a related corporation with the Director or with a firm of which

the Director is a member or with a company in which the Director has substantial financial interest.

During and at the end of the financial year, no arrangements subsisted to which the Company is a

party, being arrangements with the object or objects of enabling Directors of the Company to

acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any

other body corporate.




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AUDITORS

Petaling Jaya

CHAI KO THINGDATO' BAHARI BIN HARON

Signed on behalf of the Board in accordance with a resolution of the Directors dated 29 July 2013.

Messrs Hasnan THL Wong & Partners, the retiring Auditors, have expressed their willingness to

continue in office.




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DIRECTORS


Petaling Jaya

29 July 2013



STATEMENT BY DIRECTORS

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

We, DATO' BAHARI BIN HARON and CHAI KO THING, being two of the Directors of

PATIMAS COMPUTERS BERHAD, do hereby state, in the opinion of the Directors, the

accompanying financial statements set out on pages 1 to are drawn up in accordance with

Malaysian Financial Reporting Standards ("MFRSs"), 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 the Company as at 31 March 2013 and of their financial

performance and cash flows for the year then ended.

In the opinion of the Directors, the information set out in Note 40 of the Notes to the Financial

Statements has been compiled in accordance with the Guidance on Special Matter No. 1,

Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant

to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of

Accountants and the directive of Bursa Malaysia Securities Berhad.

DATO' BAHARI BIN HARON CHAI KO THING




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1814


I/C No. 570201-12-5067,

at Petaling Jaya on 29 July 2013

Before me:

Pn Koh Twee Yong @ Koh Twee Siew (No. B 357)

Commissioner for Oaths

Subscribed and solemnly declared by the

abovenamed YONG KET INN,

YONG KET INN

I, YONG KET INN, I/C No. 570201-12-5067, who was appointed as the Chief Financial Officer

of PATIMAS COMPUTERS BERHAD on 30 October 2012, do solemnly and sincerely declare

that, except for the matters disclaimed by the Independent Auditors in their Auditors Report on

pages to and for the period prior to my appointment as the Chief Financial Officer, the

accompanying financial statements set out on pages are in my opinion 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.

STATUTORY DECLARATION






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1 to 1814

7 403


Report on the Financial Statements

Directors' Responsibility for the Financial Statements

Auditors' Responsibility

Basis for Disclaimer of Opinion

(i)

We have audited the financial statements of Patimas Computers Berhad, which comprise the

statements of financial position of the Group and the Company as at 31 March 2013, and the

statements of comprehensive income, statements of changes in equity and statements of cash

flows of the Group and the Company for the financial year then ended, and a summary of

significant accounting policies and other explanatory information, as set out on pages .

The Directors of the Company are responsible for the preparation of financial statements so as

to give a true and fair view in accordance with Malaysian Financial Reporting Standards,

International Financial Reporting Standards and the requirements of the Companies Act, 1965

in Malaysia. The Directors are also responsible for such internal control as the Directors

determine is necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

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.

Because of the matters described in the Basis of Disclaimer of Opinion paragraph, however,

we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit

opinion.

We were unable to confirm or verify by alternative means the opening balances

making up the statements of financial position as the previous auditors have

expressed a disclaimer opinion in audited financial statements for the financial

period ended 31 March 2012. Since the opening balances enter into the

determination of the financial performance and cash flows, we were unable to

determine whether any adjustments might have been found to be necessary in

respect of the loss for the year reported in the statements of comprehensive income,

statement of changes in equity and statement of cash flows. As disclosed in Note

38(b), an investigative audit was carried out on the financial affairs of the Group

and the Company. On 30 May 2013, the Chairman of the Audit Committee made a

police report based on the findings from the Investigative report.




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1 to 1814

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF




(ii) As disclosed in Note 2 of the Notes to the Financial Statements, the Group and the

Company incurred a net loss of RM 34,267,000 and RM 29,232,000 respectively for

the financial year ended 31 March 2013, and as of 31 March 2013, the Group and

the Company had capital deficiencies of RM 45,335,000 and RM 10,941,000

respectively whilst the current liabilities exceeded the current assets by RM

51,996,000 and RM 13,306,000 respectively. On 1 November 2012, the Company

announced that it had triggered the prescribed criteria pursuant to Practice Note 17

("PN 17") of the Listing Requirements of Bursa Malaysia Securities Berhad

("BURSA") for the Main Market. On 28 November 2012, the Company made an

announcement pursuant to Practice Note 1 of the Listing Requirements of BURSA

that Patimas-HPD Systems Sdn. Bhd. ("PHPD"), its wholly owned subsidiary had

received a legal letter of demand from Malaysia Debt Venture Berhad ("MDV") for

the outstanding balance of RM 4,340,988 in connection with the credit facilities

granted for a project financing facility totalling RM 14 million. The Company also

received a similar legal letter of demand as a guarantor in respect of the said facility.

Both the Company and PHPD are currently in communication with MDV and

exploring various options to regularise the default. No Solvency Declaration by the

Board of Directors is being submitted to BURSA within 3 market days from the

date of announcement.

These conditions indicate the existence of material uncertainties, which may cast

significant doubt on the ability of the Group and of the Company to continue as

going concerns and therefore, the Group and the Company may be unable to realise

their assets and discharge their liabilities in the normal course of business.

The Company is in the process of formulating a comprehensive plan to regularise

their financial condition ("Regularisation Plan"). The Company is required to

submit a Regularisation Plan to the relevant authorities by 31 October 2013 or the

Company may face de-listing. As of the date of this report, the Company has not

submitted any Regularisation Plan to address its PN 17 status.

In view of the matters set out above there are material uncertainties that may cast significant

doubt on the ability of the Group and the Company to continue as going concerns.


PATIMAS COMPUTERS BERHAD (CONT'D)


Basis for Disclaimer of Opinion (cont'd)




)(


Disclaimer of Opinion

Report on Other Legal and Regulatory Requirements

a)

b)

c) Except for the subsidiaries with a modified opinion in the auditors' report as

disclosed in Note 21 of the Notes to the Financial Statements, our audit reports on

the accounts of the subsidiary companies did not contain any qualification or any

adverse comment made under Section 174(3) of the Act.

Except for the matters as disclosed in the Basis for Disclaimer of Opinion

paragraph, we are satisfied that the accounts of the subsidiary companies that have

been consolidated with the Company's financial statements are in form and content

appropriate and proper for the purposes of the preparation of the financial

statements of the Group and we have received satisfactory information and

explanations required by us for those purposes.

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

the following:

The financial statements have been prepared on the historical cost basis and on the assumption

that the Group and the Company are going concerns. The going concern assumption is highly

dependent upon the successful restructuring of the defaulted debts, the successful approval and

implementation of the Regularisation Plan, and the ability of the Group and the Company to

attain profitable operations to generate sufficient cash flows to fulfil their obligations as and

when they fall due. In the event that these are not forthcoming, the Group and the Company

may be unable to realise their assets and discharge their liabilities in the normal course of

business. Accordingly, the financial statements may require adjustments relating to the

recoverability and classification of recorded assets and liabilities that may be necessary should

the Group and the Company be unable to continue as going concerns.

Because of the significance of the matters described in the Basis for Disclaimer of Opinion

paragraph, we do not express an opinion on the financial statements.

In our opinion, except for the matters as disclosed in the Basis for Disclaimer of

Opinion paragraph, the accounting and other records and the registers required by

the Act to be kept by the Company and its subsidiary companies of which we have

acted as auditors have been properly kept in accordance with the provisions of the

Act.




Basis for Disclaimer of Opinion (cont'd)




)(


Other Reporting Responsibilities

Other Matters

Petaling Jaya

29 July 2013




The supplementary information set out in Note 40 of the Notes to the Financial Statements 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 MIA

Guidance and the directive of Bursa Malaysia Securities Berhad.

(NO. AF 0942) CHARTERED ACCOUNTANT

CHARTERED ACCOUNTANTS (NO: 2791/08/14 (J))

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.

HASNAN THL WONG & PARTNERS WONG KOK SEONG

The financial statements of Patimas Computers Berhad for the financial period ended 31

March 2012 were audited by another auditor whose report dated 30 October 2012 expressed a

disclaimer of opinion on those financial statements.




)(


Note 31.03.13 31.03.12 01.01.11

RM'000 RM'000 RM'000

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 5 5,264 12,026 12,514

Intangible assets 6 - 7,873 58,075

Patimas Annual Report 2013

Documents

Transcript of Patimas Annual Report 2013